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'The Licensing Racket’ Review: There's a Board for That
- Bostonian 2y agohttps://archive.is/Tcc1J https://archive.is/Tcc1J Excerpted and discussed at https://marginalrevolution.com/marginalrevolution/2025/02/the-licensing-racket.html https://marginalrevolution.com/marginalrevolution/2025/02/th... The book site is https://www.hup.harvard.edu/books/9780674295421 https://www.hup.harvard.edu/books/9780674295421 'Clifford Winston of the Brookings Institution argues for eliminating occupational licensing for lawyers entirely and replacing it with a system of voluntary certification. Government has a role to play by collecting information about service quality and making it easily accessible to the public. Databases like the NPDB should be improved and opened for many professions. The medical profession is unlikely to be delicensed, but as Ms. Allensworth’s book shows, we shouldn’t let the AMA dictate the terms of medical education. Many European countries offer combined undergraduate and medical degree programs that take only six years, compared to the eight or more years required in the U.S. Advances in artificial intelligence, which Ms. Allensworth doesn’t explore, may also catalyze reform. AI is already transforming fields such as legal research and medical diagnostics, automating tasks once reserved for licensed professionals. As these technologies advance, they can reduce reliance on rigid licensing systems by ensuring quality and safety through innovative tools.'
- turtlesdown11 2y ago[flagged]
- hollerith 2y agoThe trouble with giving doctors complete control over doctor education is that in the US they've used that control to restrict the supply of doctors to keep the price of doctors high.
- sarchertech 2y agoRight now it’s congress that is restricting the supply of doctors. The AMA’s (which only represents about 15% of doctors btw) current position is that we need more doctors and they have been actively lobbying congress to provide funding for more residency slots.
- hollerith 2y agoOK I stand corrected. I bet the situation is quite complicated, and I now regret offering a one-sentence explanation.
- EvanAnderson 2y agoThe AMA lobbied for the freeze in slots in the 90s. Their change of heart today doesn't make them less responsible for creating the mess, in the name of protecting physician salaries, in the first place.
- sarchertech 2y agoThe AMA lobbied for a freeze in slots because the rate of growth had was increasing and extrapolating from that it looked like more physicians would be graduating than there would be jobs for them to fill. The number of physicians has been growing faster than population growth since the 60s. No one could have predicted that we’d be able to sustain the insane growth in medical spending and demand that allowed this to continue. Because of the way medical training is funded, number of physicians isn’t not a free market phenomenon. Congress decides how many there are. In the 90s it looked like there were going to be too many. When that changed the AMAs position changed, it was a perfectly reasonable position. But even if it weren’t a reasonable position. That was 30 years ago. No one who was in a position of power is around today, so it’s unclear to me how exactly the current AMA should bear responsibility. It would be like if IEEE today called for a temporary freeze on the increase of H-1Bs. Then 30 years later something causes an explosion in demand for engineers and people started blaming these evil engineers.
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- mjd 2y agoIn many cases, these licencing schemes are put in place by incumbent trade groups, to prevent comeptition. For example, an association of funeral home owners will lobby their state representative for a law forbidding the sale of coffins by anyone other than a licensed funeral director. Ostensibly this somehow protects the public from unscrupulous coffin-sellers. In actuality, its main effect is to protect the profits of the funeral home oligopoly. (Lest you think this is a fanciful example, see St. Joseph Abbey v. Castille.) The AMA education requirements are of essentially the same sort, put in place by a compliant legislature to protect the profits of an incumbent cartel, at great cost to the public. Advances in artificial intelligence will do nothing, absolutely nothing, to catalyze reform of what is essentially a problem of politics and greed. https://ij.org/case/saint-joseph-abbey-et-al-v-castille-et-al/ https://ij.org/case/saint-joseph-abbey-et-al-v-castille-et-a...
- mjd 2y agoI would add too that these laws often serve the same interests of white supremacy that they have since the Civil War. After the end of Reconstruction the Southern states instituted laws now called the “Black Codes”, forbidding blacks from being blacksmiths, or grocers, from owning property, or doing any sort of work other than, effectively, being sharecroppers - essentially slaves of the same white landowners as before. Consider who is hurt most by laws requiring expensive and onerous licensing for independent hair-braiders. Are a lot of white hair-braiders suffering from this, do you suppose? https://en.wikipedia.org/wiki/Black_Codes_(United_States) https://en.wikipedia.org/wiki/Black_Codes_(United_States)
- ghaff 2y agoAt one point the US did have at least a couple of 6-year undergrad/medical school programs but they were discontinued I believe. Machine learning has been talked up a lot in medicine especially in the context of radiology. I'm not sure to what degree it's really panned out to date. Legal discovery has been aided by automation of various sort for years.
- psychlops 2y agoNext time you get an x-ray, drop it in your favorite LLM and start asking it questions. It's eye-opening.
- gorkish 2y agoChatGPT does not carry expensive malpractice insurance. The Radiologist is human in the loop for reasons other than their pattern recognition ability.
- psychlops 2y agoNot sure what concern you are addressing. I never said to replace radiologists with ChatGPT. My suggestion was to use it as a tool for further information. That said, note that malpractice is in place for a reason. Everyone makes mistakes. We all have to go in to work even if we have a horrible hangover, doctors and radiologists included.
- senkora 2y agoThe UMKC 6-year one seems to still exist as far as I can tell: https://med.umkc.edu/academics/degree-and-certificate-programs/ba-md/faqs.html#admissions https://med.umkc.edu/academics/degree-and-certificate-progra...
- sarchertech 2y agoIt’s hard to compare medical education between countries because some counties will have shorter medical school lengths but longer residency requirements. And official durations are often different than the amount of time it actually takes students. In Germany for example med school is 6 years, but the average student completes it in about 7. A US student with some AP credits from high school and a few summer classes could easy finish university in 3 years and end up taking the same amount of time as the average German medical student. But even looking at averages at the end of the day doctor’s salaries are a small fraction of overall medical costs so shaving a year off of the average training times isn’t going to make a dent. The US also doesn’t have a national high school curriculum, so removing general education requirements from the university + medschool pipeline, which is essentially what countries with shorter total training times do, is a harder problem than it is in Europe.
- luma 2y agoLawyers have organized their licensing so well that they are the ONLY profession in America not being overrun by PE consolidation because they had to foresight to not allow it. The capital class was eventually going to run up against them to try and break down that wall.
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- willis936 2y agoWhat would the motivation be for them to do that? Restricting access to law & order to the wealthy is working out great for them.
- Ekaros 2y agoExtracting money. Delta between billed rate and minimum wage is pretty massive. There is lot of money to be extracted from that gap. And from pushing the billable rate and hours up at same time.
- willis936 2y agoThey are getting something for that money: exclusive access to the legal system. That is power they wouldn't sell.
- pseingatl 2y agoAccenture, E&Y, PWC and Deloitte all have a law division; not as much in the US but overseas and slowly creeping here because these firms are joined at the top and fueled by public money. The consolidation was set back by more than a decade because of Enron and the prosecution of Andersen, but now they're back. These hybrid firms, because of the requirement of annual tax filings, offer something big law firms simply cannot. Very few law firms have set up consulting arms and those who have done so have stumbled, e.g. Greenberg Traurig.
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- nickdothutton 2y agoFor licensing see medieval guilds.
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- ddgflorida 2y agoWe also have the "Continuing Education" racket.
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- pseingatl 2y agoThis subject was addressed comprehensively in Milton Friedman's Capitalism and Freedom. BTW, Friedman makes DOGE look life a fearful, cautious agency. He would have eliminated dozens of federal agencies; perhaps 80% of them.
- spicyusername 2y agoThe world Milton Friedman lived in was very different than the world we have now. Much of what he had to say no longer applies, today. Its analogous to reading philosophy from pre-enlightenment or pre-naturalist philosophers. Academically interesting, but totally irrelevant. Economists like to masquerade as hard-scientists, but once you get past supply and demand and behavioral economics, its just academics making things up that sound good. The world we live in is globally interconnected with civilization and planet-sized problems. The actors squabbling in today's world are no longer small local groups, focused on community-sized problems, as they mostly were pre-1900. They are impossibly large, country-spanning, corporate entities with huge reach and influence. Public institutions need to be sized appropriately to solve modern problems and to properly contend with their corporate competitors. Tiny pre-WWI-sized governments are not going to cut it with post-WWII-sized problems.
- BlandDuck 2y agoInteresting ideas. I respectfully disagree with all of them. Do you have any evidence to back them up, or are you yourself "just [...] making things up that sound good" ?
- bryanlarsen 2y agoPerhaps Friedman's most widely known saying is that "inflation is a monetary phenomenon". In the last 30 years the correlation between money supply expansion and inflation has been low. OTOH the correlation between supply shocks and inflation has been high. A real science would update in the face of contradictory evidence. Some economists have, but most haven't.
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- ty6853 2y agoI bypassed trades and engineering licensing to build my house, which is usually only legally possible if you do basically everything yourself ( at least in my state diy work and even owner/builder amateur structural engineering is exempted from licensing since there is no compensation involved). End results, costs <30% of anything comparable offered commercially.
- spicyusername 2y agoHow much of that 30% is just labor costs? If you total up the time you spent doing the work, and multiply that by what you could have been paid working doing something else, how does the savings change? People should definitely build their own houses. Its custom fit to you and you get the satisfaction of doing it. But its also a lot of work, requires considerable time investment, and requires quite a bit of specialized knowledge.
- ty6853 2y agoNot sure. I lost about 4 months of work, rest was time where I didn't have other work offered to me so the opportunity cost was 0. But consider if I hired someone, I would lose 30% of my earnings to taxes. And then 50% of what I pay others goes to insurance/licensing/taxes/transportation etc. So really your labor costs should be about 30% if you bill your own time since it is tax free both ways and no overhead.
- potato3732842 2y agoBack in the day (this century) I was an under the table laborer for someone building their own house. He said it costs less than half as much and takes 4x as long. I.e. the majority of that 70% savings is not from labor.
- Aurornis 2y agoWhen I was on Reddit I browsed the /r/DIY subreddit every once in a while. It was amazing to see all of the self-built decks, sheds, and unpermitted home modifications that were death traps. I’m sure you did your homework and did everything by the book, but I’ve seen enough both online and in my experience with old houses (commonly modified without permit) to have an appreciation for licensing and permitting requirements. A few years ago my friends’ landlord tried to rebuild the house’s deck until it got shut down by an inspector driving by. I thought it was outrageous until I walked over and saw what was being built, which was a laundry list of engineering and design failures. After that I was thankful that the inspector noticed and stepped in. Licensing (and permitting) doesn’t exist for the ideal case where people practice perfectly without licensing. It exists for the average case, where people like to guess and improvise. > End results, costs <30% of anything comparable offered commercially. If you did the work yourself I’d expect similar savings. I think this is an example of DIY labor, not the cost of licensing.
- ty6853 2y agoBoard differences in medical field have been interesting to watch. For instance NP and PA have very similar skills, but the nursing board goes to bat for nurses allowing independent practice while doctors have chosen in some states to sabotage PAs as they live under the medical board fiefdom. There is little other explanation for the divergence in practice privileges. If you are a licensed professional and your profession doesn't own the board, what often ends up happening is competing professions under the board sabotage each other.
- trillic 2y agoJust last week I saw an NP, PA - someone with both degrees, didn’t understand why they’d have both. This makes sense now.
- n8henrie 2y agoCan you explain what you mean about doctors sabotaging PAs? In what way? And which doctors are to blame?
- ty6853 2y agoIn some states dragging their feet on supporting independent practice and chaining them to more onerous doctor oversight/collaboration requirements vs NP. I'm referring to doctors with/of influence in the medical board. NP are under the nursing board so doctors are less entrenched in their influence.
- Aurornis 2y agoLetting NPs practice independently as doctors is increasingly viewed as a mistake, not a model that should be emulated more widely. There are a lot of problems coming out of the fact that NPs are now basically practicing medicine in parallel with doctors despite vastly different education and training experience. Many patients don’t even understand the difference. It doesn’t matter for common things like a simple sprain or common cold usually, but cases of medication overprescribing (think antibiotics for colds, etc) are commonly traced back to NPs and specialists will complain about the deluge of incorrect referrals from NPs who don’t know what they’re doing. One example: I heard a specialist explain that they had to stop taking referrals for Ehlers-Danlos evaluation from NPs because the local NPs were referring people at impossibly high rates due to misdiagnosis. Ehlers-Danlos has become a popular (though incorrect) TikTok diagnosis for vague symptoms and rather than push back, many local NPs were running with it. Social media is full of people who are convinced they have Ehlers-Danlos and a lot of NPs were leaning into the trend instead of realizing that it’s not real.
- neonate 2y agohttps://archive.is/Tcc1J https://archive.is/Tcc1J
- bryanlarsen 2y agoCanada might see significant movement on licensing restrictions soon. There's a big movement to reduce inter provincial trade barriers in the face of potential American tariffs. It's a good political sound bite: replace American trade with Canadian trade. But in physical goods almost all of the barriers have already been demolished. Liquor is the maon exception. But the service industry is now bigger than the physical goods industry and there are lots of barriers in it, licensing being perhaps the biggest. Licensing is a provincial responsibility. Hopefully the rare unity the country has experienced since Trump's inauguration can be harnessed to unify and rationalize licensing country wide.
- mhb 2y agoPrerequisite of 1,000 hours of classroom instruction to qualify as a barber in Rhode Island. [216-RICR-40-05-4.4 C]: "Students enrolled in programs of hairdressing/cosmetic therapy or barbering may enter into a work-study arrangement after they have completed at least one thousand (1,000) hours of classroom instruction." https://rules.sos.ri.gov/regulations/part/216-40-05-4 https://rules.sos.ri.gov/regulations/part/216-40-05-4
- gosub100 2y agoContrast that to flying a plane: "Key points about PPL classroom instruction: Ground School: In addition to flight hours, you must also complete a ground school course covering subjects like aerodynamics, weather, navigation, and regulations, which typically involves around 36-40 hours of dedicated classroom instructi"
- dghlsakjg 2y agoThat is for just the private pilot license of the most basic type for clear conditions. This isn't the greatest comparison. For one, the FAA allows you to take as much or as little classroom instruction as you need. There is no classroom requirement (kinda, there are other ways to get a pilots license). I had 0 hours of ground school, and did self study. I know people with 50+ hours of one on one tutoring. The FAA evaluates you on your knowledge, they don't care about your experience, except for meeting the minimum number of flight hours. To get to the point where you can charge money for your skills you are looking at 8x the flight time to get to 250 hours as pilot in command, plus a litany of other courses to earn a commercial certificate, but even here, you are lucky to get a job, and it will likely be pretty un-glamorous flying. To get to fly an airliner (in the US, Europe has much lower requirements), you need 1,500 hours minimum for the piece of paper, and its not like you are going to be flying an airliner alone.
- tim333 2y agoI think a private pilot license is probably of comparable or greater difficulty than being a barber. I have a PPL and have done my own barbering and flying is both trickier and has worse consequences if you screw up. I agree a PPL isn't close to enough to fly an airliner. But shaving and trimming hair?
- donatj 2y agoMy wife cut hair professionally for twenty years. Between COVID, the birth our first child and going back to school she stopped. Now she wants to go back part time to make some extra money, but her license expired and that means she has to get her license back. That includes having to attend over 100 hours of class, for a slightly above minimum wage job many people do themselves, at home, with zero experience. It's absurd. Maybe an hour or two refresher is justifiable, but I assure you she had not forgotten how to cut hair to the extent that she needs 100+ hours of retraining. It's deeply embedded in her psyche at this point. My wife says she basically just needs to go hang out at a cosmetology school to make the hours but doesn't need to actually do anything while she is there. It is absolutely a racket.
- omgJustTest 2y agoI hear you about the schooling requirement / hours. However if the "racket" were not there, the vast surplus of labor providing "slightly above minimum wage" services would depress wages down to the legal minimum. The government would then be the only thing preventing a race-to-the-bottom in your wife making any money. I have seen deregulation of industries decimate trucking, giving rise to subhuman organizations like Prime Trucking. I would strongly advise anyone seeking deregulation to really consider... does this mean - literally - the only thing that one can offer as a competitive edge is how little money you are willing to take for this service? Additionally, given the wrecking ball currently applied to the us govt, I would strongly advise that "no tax on tips" and "default gone regulations" may help some minimum wage people, but they have super nefarious implications for other parts of the govt. "Tips" for example are now legal to politicians, per the US Supreme Court [Snyder v US, 2024] and "no tax on tips" implies that politicians do not have to record those tips as income on their taxes... which was possibly one of the last ways in which they could have been documented in any way.
- donatj 2y agoI disagree 100%, there is a big difference in quality between a haircut from an experienced stylist and your cousin Vinny. People right now go to fancy expensive salons when they could get a $15 haircut. I think people would certainly pay more for a reliable and stylish haircut even if they could get a bottom barrel haircut from a high schooler. You just pay for the quality of work you want done. What you call race to the bottom, I as a consumer call fair pricing not controlled by syndicates. Controlling the market by limiting the job pool to just the people who can already afford the time let alone the licensing fees really just serves to keep people in poverty. How many people could be working right now but can't afford the time and money to get licensed?
- stogot 2y agoI’d like to read books about random topics and this one is interesting, but 304 pages? It seems publishers demand most nonfiction to be that page length
- ghaff 2y agoYeah, probably depends a bit on the specific publisher but 250 pages+ at any rate.
- betaby 2y agoIn Quebec about 80% of all occupations require licensing. We are well past useful regulations. Such situation makes people poor. Since everything needs license, people can't practice jobs that they are perfectly capable doing.
- amadeuspagel 2y agoA counter example to this is food. Anyone can open a restaurant. Even though the risks, like food poisoning, are much bigger then a bad haircut.