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PaperclipPerfector  4mo ago (text post)   36095 thread views

Culture War Roundup for the week of February 3, 2025

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Alex Tabarrok reviews "The Licensing Racket" in the WSJ:

Governments enact occupational-licensing laws but rarely handle regulation directly—there’s no Bureau of Hair Braiding. Instead, interpretation and enforcement are delegated to licensing boards, typically dominated by members of the profession. Occupational licensing is self-regulation. The outcome is predictable: Driven by self-interest, professional identity and culture, these boards consistently favor their own members over consumers.

Ms. Allensworth conducted exhaustive research for “The Licensing Racket,” spending hundreds of hours attending board meetings—often as the only nonboard member present. At the Tennessee board of alarm-system contractors, most of the complaints come from consumers who report the sort of issues that licensing is meant to prevent: poor installation, code violations, high-pressure sales tactics and exploitation of the elderly. But the board dismisses most of these complaints against its own members, and is far more aggressive in disciplining unlicensed handymen who occasionally install alarm systems. As Ms. Allensworth notes, “the board was ten times more likely to take action in a case alleging unlicensed practice than one complaining about service quality or safety.”

She finds similar patterns among boards that regulate auctioneers, cosmetologists and barbers. Enforcement efforts tend to protect turf more than consumers. Consumers care about bad service, not about who is licensed, so take a guess who complains about unlicensed practitioners? Licensed practitioners. According to Ms. Allensworth, it was these competitor-initiated cases, “not consumer complaints alleging fraud, predatory sales tactics, and graft,” where boards gave the stiffest penalties.

You might hope that boards that oversee nurses and doctors would prioritize patient safety, but Ms. Allensworth’s findings show otherwise. She documents a disturbing pattern of boards that have ignored or forgiven egregious misconduct, including nurses and physicians extorting sex for prescriptions, running pill mills, assaulting patients under anesthesia and operating while intoxicated.

In one horrifying case, a surgeon breaks the white-coat code and reports a fellow doctor for performing a surgery so catastrophically botched that he assumes the practitioner must be an imposter. Others also report “Dr. Death” to the board. But Ms. Allensworth notes, “at the time of the complaints to the medical board, [Dr. Death] was only one third of the way through the thirty-seven spinal surgeries he would perform, thirty-three of which left the patients maimed or dead.” The board system seems incapable of acting decisively and Dr. Death’s rampage is only ended definitively when he is indicted—the initial charges include “assault with a deadly weapon,” the scalpel—and eventually imprisoned.

This is reminiscent of my recent comments about imagining that we set up a licensing regime for grocery stores, under the pretext that we do need some training to ensure food safety... but that we let the grocery stores control the process. I predicted:

Grocery stores get the government to set up a licencing requirement to stock shelves, with some boilerplate reasoning about food safety or something. The thing is, the only way to get licensed is to get a grocery store to give you the mandatory years of experience. And, of course, they refuse to have such positions unless the government pays them for it. I would predict that there would be fewer grocery store employees, their pay would be higher, industry profits would be higher, government outlays would be higher, prices to the consumer would be higher, and service quality would decrease.

And sure, Tabarrok also agrees that we're not going to go to zero licensing for doctors. But he echos some of what I said here:

Let's put it this way - perhaps there is a "right" level of training for doctors, and perhaps there is a "right" level of training for grocery stores. Maybe the latter is much smaller than the former. Now, imagine we set up the system I described in my last comment for grocery store training. Do you think their incentives would lead to them selecting the "right" level of training?

Do we have any evidence that turning over control to them does actually have perverse incentives and results in not the "right" kind of controls (not necessarily in the patients' interests)? Back to Alex:

No system is perfect, but Ms. Allensworth’s point is that the board system is not designed to protect patients or consumers. She has a lot of circumstantial evidence that signals the same conclusion. The National Practitioner Data Bank (NPDB), for example, collects data on physician misconduct and potential misconduct as evidenced by medical-malpractice lawsuits. But “when Congress tried to open the database to the public, the [American Medical Association] ‘crushed it like a bug.’”

One of the most infuriating aspects of the system is that the AMA and the boards limit the number of physicians with occupational licensing, artificially scarce residency slots and barriers preventing foreign physicians from practicing in the U.S. Yet when a physician is brought before a board for egregious misconduct, the AMA cites physician shortage as a reason for leniency. When it comes to disciplining bad actors, the mantra seems to be that “any physician is better than no physician,” but when it comes to allowing foreign-trained doctors to practice in the U.S., the claim suddenly becomes something like “patient safety requires American training.”

We see this in industry after industry after industry that has captured the regulatory apparatus. Academia, real estate, the list goes on. Doctors are not some magic exception to perverse incentives. Alex and Ms. Allensworth disagree on possible solutions. There are hard problems here... but it's important to remember that there are, indeed, problems with the status quo. It's important to remember that we have a pretty good idea how these problems are manifested in terms of incentives. (No doubt someone can put a timer on for how long it will take a doctor to say that the solution involves putting doctors more in control of everything...)

the board was ten times more likely to take action in a case alleging unlicensed practice than one complaining about service quality or safety

Probably a case of the Streetlight Effect; determining whether John Doe installed an alarm system and whether he had a licence to do so takes less effort than determining whether he, being licenced, had installed it properly.

I think I'd find the argument compelling that licensing boards need to include multiple stakeholders, not all of whom are license-holders. In this case, including customers as a voice could, done properly, make it harder for the boards to focus so hard on artificial scarcity. Although in practice I'm sure that's harder than it sounds.

Or, you know, we could just get rid of occupational licensing.

The solution to any regulation is never to get rid of it, only to add more regulations on top.

Instead of removing the licensing, which would benefit everyone, why not add a requirement that would benefit just me?

It's not that these kind of complaints are invalid, but they miss the true utility of liscensing regimes.

Part of the reason for licensing regimes, btw, isn’t that the licensing teaches you anything or that it makes you more effective or that it makes you more ethical or that it successfully identifies protocriminals before they get the magic piece of paper. It’s that you have to put a $X00k piece of paper at risk as the price of admission to the chance of doing the crime. This deters entry and raises the costs of criminal enterprises hiring licensed professionals versus capable, ambitious, intelligent non-licensed criminals.

One might even say that this is yet another workaround that society has settled on for distinguishing the people who suck from the people who don't suck. The set of people with six-figures of capital to throw around is just better in almost every way from the set of people who don't have six-figures of capital to throw around.

A higher price of entry always gives you an even higher quality pool of people. No one should be allowed to serve coffee unless they can pay the million dollar licensing fee.

The argument is wrong on multiple levels. It confuses filtering with cleaning. In effect you’re corraling the most crime-prone elements towards criminality. They could be braiding hair, but thanks to the license requirement, you got them selling drugs and robbing people. As to the law-abiding people, they lose the licensing cost, often years of their lives. The costs are massive and unquestionable, the benefits are extremely dubious. In exchange for 4% of the lives of every citizen, we receive at best a ~ 1% cost increase for criminal organizations.

In practice, giving the state leverage over people's livelihoods does a lot more to ensure regulatory compliance than restricting it to the set of people who can afford six figure outlays.

Yes, a large point of licensing regimes is to give the state a rope directly connected to a noose around your favorite body parts. I do not consider this a positive feature, however.

I mean it depends on the profession and the risk of either crime or serious damage to property or health, I can make a case for having a pullable license, liability insurance that can pay for damages caused to consumers or for injuries to the customer, possibly to pay for injuries to the workers themselves so they don’t end up suing the customer who hired them. But for 80% or more of the licenses issued and required, no such risks exist. Outside of major home repairs and construction projects, the biggest concern would be medical care. In both cases, you can end up creating major, even life threatening problems, and the general public knows little about engineering or medicine so they can’t inspect the work themselves.

As for the rest — cosmetology, simple home or auto repairs, food service, etc., the risk of serious damage or injuries are small enough that there’s simply no good reason for the license requirements. You don’t need an associate degree to stock shelves or cut hair or change the oil on a car.

I mean it depends on the profession and the risk of either crime or serious damage to property or health, I can make a case for having a pullable license, liability insurance that can pay for damages caused to consumers or for injuries to the customer, possibly to pay for injuries to the workers themselves so they don’t end up suing the customer who hired them.

Yes, you can make a case. You can always make such a case. Which is why we have licensing for hair braiders. So whether the case can be made does not matter, it is a choice between conflicting visions. Do you want freedom, or do you want the state to have you by the short-and-curlies?

I’d really like an explanation as to how hair braiding can cause serious injury or death or damage property significantly. Having someone giving you drugs, doing surgery, yes, if I don’t have the training necessary I can seriously injure people. Building a house that someone will live in, again, if I have no idea how to build a structurally sound house, it can fall and kill people inside. I’m not suggesting that even most cases of licensing are that today. In fact, most fall well outside of “messing this process up a cause serious injury or property damage or loss (the the case of financial mismanagement)” where I think the line should be drawn.

Apparently at least one risk is scalding when hot water is used to set the braids, causing injuries bad enough to require hospital admission.

https://www.sciencedirect.com/science/article/pii/S2468912222000062

That article notes some other injuries that read like they're more in line with simply pulling the hair so tight that it either comes out or damages the scalp.

The picture that emerges is of people wanting to give their young daughters a cool hairstyle, baulking at the price of a hairdresser, trying to DIY it at home and either spilling boiling water on their kid or more likely letting a full head of hair that's freshly loaded with boiling water fall back onto the kids neck, shoulders and chest.

The article is about the UK but in America you have the issue of any resulting hospital bills to consider on top.

Reading around the topic of cosmetology there's also stuff about hairdressers being more prone to reproductive issues like low birth weight and premature ovarian failure due to exposure to toxic chemicals.

Even as a reasonably intelligent person who would be naturally wary of boiling water or less immediate risks like chemical burns I wouldn't have intuited that hair styling could contribute to ovarian failure.

In practice, state-issued licenses for barbers, tattoo artists, cosmetologists, etc are about things like 'how not to give customers infections on accident' and licenseholders are unemployable without separate training on doing the work competently. Perhaps such requirements should be simplified a la food handler licenses, but making barbers take a class on preventing the spread of lice is eminently defensible.

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