If there’s one economic principle that Democrats, Republicans, and libertarians agree on, it’s that competition is generally good and government-supported private monopoly power is reliably bad.
That principle is the driving force behind an overdue effort to free up to 20 vocations in Florida from needless government regulation. Among the vocations set for deregulation are hair braiders, ballroom-dance-studio owners, and interior designers.
Not surprisingly, many who practice those vocations are resisting that effort. All too often, the only real function of occupational regulation is to protect members of the regulated industry from fair competition by erecting barriers to entry. Dishing out economic benefits to loyal supporters may be the pastime of some politicians, but it imposes substantial costs on society by eliminating economic opportunities for would-be entrepreneurs and driving up prices for consumers.
Naturally, when special pleaders harvest unjust favors from compliant politicians, there’s always an asserted justification. In this instance, the protectionist regulations masquerade as professional standards of competence or anti-fraud and health-and-safety precautions.
When such regulations are truly necessary, even libertarians, who generally oppose government economic regulations, support them. The libertarian position is straightforward: If regulators can show that unlicensed practitioners, in contrast to their licensed counterparts, engage in deceptive practices or violate health and safety rules, then government intervention may be justified. In fact, however, the claimed concerns are more often a pretext.
Consider Florida’s licensing scheme for interior designers. Florida requires a would-be interior designer to obtain a college degree from an accredited program, serve a two-year apprenticeship, and pass a licensing exam. While those requirements are billed as safeguards against incompetence, that assertion is disingenuous at best. Fully 60 percent of Florida’s 2,560 state-licensed interior designers were simply grandfathered-in without demonstrating those credentials.
Moreover, if the practice of interior design really needs to be regulated, that’s certainly news to consumers in the 47 states that have no licensing prerequisites.
The Florida State Board of Architecture and Interior Design stipulated, in writing, during a recent lawsuit in a Tallahassee federal court, that the state had no evidence that unregulated practice of interior design presents any bona fide public-welfare concerns.
Nor, conceded the board, did the state have any evidence that licensing of interior designers has led to better job performance, greater safety, or fewer building-code violations — or otherwise benefited the public in any demonstrable way.
The Interior Design Protection Council has documented twelve studies by government agencies across the nation on whether interior-design regulation is needed. Without exception, all twelve of the studies concluded that regulation would not add any more protection to the public beyond measures already in place.
Moreover, the claim that deregulating a vocation will put existing workers out of business is unsupported and largely irrelevant. After all, were it not for the regulations themselves, aspiring practitioners would have the same right to practice as current members of the profession.
“Liberty,” declared the Supreme Court in Meyer v. Nebraska, includes the right “to engage in any of the common occupations of life.” If only that were true in the state of Florida.
Instead of focusing on new and better consumer products, entrenched interests try to manipulate the law — consorting with members of the legislature, their staffers, and the best lobbying firms that money can buy. Special-interest legislation advances the private interests of favored competitors. That’s how monopoly power is born and nurtured at public expense.
Government has no business enacting arbitrary regulations to protect the profits of a closed fraternity of privileged companies — especially when the effect is higher prices, narrower choices, and fewer new firms started by emergent entrepreneurs.
That’s the libertarian view. Unfortunately, recent news reports have quoted at least one Florida legislator as saying, in the context of the deregulation effort: “We’re not libertarians; we’re Republicans. And we recognize the role for government.”
On this question, however, there should be no disagreement between libertarians and Republicans (or Democrats, for that matter): Occupational regulations that are truly necessary to protect the public should be retained. But regulations that merely immunize anti-competitive industries such as interior design against upstart challengers should be scrapped — the sooner the better.
— Robert A. Levy is chairman of the Cato Institute.