Matt Zeitlin: Impetuous Young Whippersnapper

One of the main problems with the libertarian movement gaining a bigger following is its seeming refusal to proactively address issues of entrenched poverty. While massive welfare spending clearly isn’t a panacea, it’s generally accepted that some level of government involvement is necessary to deal with poverty. Libertarians, if they want more support from outside the economically comfortable, should push forward with two issues. The War on Drugs/prison reform and occupational licensing. It’s clear how the War on Drugs is ineffective and its negative effects mostly fall on the poor and the black. But occupational licensing is another great example of how a libertarian policy instinct that generally wouldn’t get a ton of traction among the working class and poor – less government regulation – is unambiguously in their interest.

One of the canonical pieces of libertarian propaganda (in the good sense) is the story of the Louisiana florists. Louisiana is the only state in the nation that requires a license to become a florists. The exam is reportedly quite difficult, highly subjective, is administered only four times a year in Baton Rogue and has a passing rate of well below 50 percent. And who grades the test? Louisiana florists. Is there any mystery as to why it’s so difficult?

It’s unclear how licensing florists does anything for Louisiana consumers. Will an unlicensed florist threaten the safety of their customers? That seems unlikely. There’s a much simpler reason. Louisiana florists want to protect themselves from competition and have turned to the state government to serve as its monopoly enforcer. It is also very clear who loses out from such an arrangement. Louisiana consumers have to pay more for florists’ services because of the artificially low supply. Prospective florists too are also screwed, they simply can’t get in the business. This is a textbook case of regulatory capture: how certain special interests are able to manipulate regulation that is supposed to be in the public interest and instead use it to protect their own interests. Other cases of libertarian lore include limo drivers, hair braiders and casket sellers.

How to make things better is unclear. A ban on all occupational licensing isn’t the way to go. Not only is it unfeasible politically, certain occupational licensing probably does benefit consumers who have neither the time, information or ability to rate all sorts of services on their own. As of now, the best path for reform would be two-fold. In the short term, legal advocacy groups like the Institute for Justice should do their best to simply hassle state licensing boards and sue them. They’ve had some successes at striking down the more absurd laws, and through a strategy of attrition could do some real good. Along with that, libertarian bloggers, magazines and journals should be unceasing in reporting anti-competitive occupational licensing. Stories like those of the Louisiana florists, or the limo drivers of the casket sellers make great copy and get those who aren’t particularly libertarian (like me or Matt Yglesias) all fired up for the cause.

In the long/medium term, it would probably be best for states to pass laws stipulating that all occupational licensing schemes need an explicit statement of how they serve the public/consumer interest. While certain special interests with a motive in restricting competition and entry into their industry would probably weasel their way around this law, it could shame some of them and make legislators more aware of the perniciousness of these rules.