Share

Policy: Economy

Protectionism in everything: From fortune tellers to hair braiders

By |
Beltway Confidential,Opinion,Timothy P. Carney,Lobbying,Economy

Regulations are not always about protecting consumers and workers from avaricious or careless corporations. They are often about protecting incumbent businesses from competition:

Melanie Armstrong wanted to be an African hair braider, practicing a skill passed down from generation to generation. In Tupelo, Mississippi, where she lived, government licensing rules meant she had to take 300 hours of course work to start her salon: 300 hours, she notes, "none of which covered hair braiding."

Ramesh Ponnuru tells how Armstrong is typical of small businesswomen and men in this country, where one of every three fields requires some sort of professional licensing. These licensing requirements raise “costs to consumers and reducing opportunities for job creation,” Ponnuru writes.

And don’t chalk this up to regulatory incompetence, Ponnuru writes:

This behavior is indefensible, but it isn't inexplicable. Existing providers in any market benefit when governments impose restrictions on new competition, and they lobby for them. The government restrictions turn the industry into a cartel, and not an especially subtle one. In many cases, state governments let boards composed of providers determine who will get to compete with them. But it's worse than the typical cartel, testified Rebecca Haw of Vanderbilt Law School, because it's a cartel "backed by the police power of the states."

Here's more on this issue from Washington Examiner columnist Veronique de Rugy at the Mercatus Center (disclosure: I recently spoke at a Mercatus conference, and earned a fee).

Some other examples here.

View article comments Leave a comment