"It’s training to be an entrepreneur, and an employer—not an employee."

Q: Governments and central banks have inflated asset prices for decades—making housing, education, and healthcare unaffordable for many.

Is the 'system' designed to turn Millennials and Gen Z into lifelong renters and debt-serfs? Is there a way out?

Doug Casey: It’s a natural consequence of Statism.

First of all, taxes are high and have been increasing for decades. After taxes, you have less money left over to save. And if you do try to save, inflation eats away at the dollars that you put in banks or investments. Worse than that, welfare and government benefits make saving feel unnecessary for many people. They feel they don’t need as much because the cradle-to-grave welfare state will cover them. There’s a reason why Klaus Schwab famously said, 'You’ll own nothing and be happy.'

A lot of people believe it. This feeling is abetted by schooling, where everyone is inculcated with this collectivist meme. On top of that, the rich are viewed as parasites. And who wants to be a parasite?

This is all caused by State intervention in the economy. Schools almost always teach students that the State is their friend. It’s not; it’s their enemy. ....

Q: We’re seeing a collision between AI/automation and a credential-heavy job market. Which parts of today’s white-collar economy do you think are most fragile?

Doug Casey: .... The bright side is that while AI and robotics will destroy huge numbers of jobs—starting now—they’ll also level the playing field. A person of less than average intelligence can have AI do things for him that he might otherwise be unable to do. A further benefit is that the world doesn’t need paper pushers and cubicle dwellers who are sitting around doing marginally productive labor. Very much like the world no longer needed people working like drones in textile mills 200 years ago, at the start of the Industrial Revolution.

While AI is going to create some major problems in the short run, it’s going to be a very good thing after those bumps in the road. Just like the Industrial Revolution itself created problems while vastly improving the world. ....

Q: What should a 25-year-old do to build real, durable earning power in the next 5–10 years?

Doug Casey: Ayn Rand answered that question in a speech I heard 40 years ago. When asked, she said: 'The best way to help the poor is not to be one of them.'

I confronted this problem with my friend Matt Smith when we wrote 'The Preparation.' The book explains why young people should avoid college. In fact, it urges them to treat college like the poison that it now is, showing how college has become a serious detriment in almost every way. More importantly, we describe what young men should do instead during the four years between 18 and 22, a time which is critically important, but generally wasted.

We demonstrate—exactly—how a young man can qualify himself with the equivalent of a BA, a BS, and elements of an MBA. That’s in addition to learning practical things in a hands-on way. We divide the four years into 16 quarters. The student will learn everything from flying a plane to sailing a boat around Cape Horn to operating heavy equipment. He’ll qualify in welding and metalwork in Canada. Cooking at a professional level in Italy. He’ll be farming in one quarter and building a house in the next. He’ll learn martial arts skills in Thailand, as well as shooting and scuba. You get the idea. It’s a productive and busy four years.

The critical thing, since we don’t know how the world is going to evolve because of AI, is to become a Renaissance man, enabling students to do anything and go anywhere. To avoid trying to climb a greasy corporate ladder, but build a web where you can reach out in any direction. That’s necessary in the world of AI. It’s training to be an entrepreneur, and an employer—not an employee."

~ from an interview with investor 'Doug Casey on Why Millennials and Gen Z are Trapped by Debt, Inflation, and Broken Promises

"Treaty of Waitangi politics intrude ever more conspicuously into many areas of our society and our public life." Including internet access!

"Treaty of Waitangi politics intrude ever more conspicuously into many areas of our society and our public life. 

• "Even New Zealand’s left-leaning mainstream media have picked up on the University of Auckland's compulsory indoctrination-rich Waipapa Taumata Rau course
• "Janet Dickson’s challenge to the Real Estate Authority over their compulsion on estate agents to undertake a compulsory professional development module called Te Kākano (The Seed)
• "another example in tertiary education concerns efforts to decolonise [sic] the Massey University BA degree ...

"Such examples barely lift the lid on the extent of Treaty indoctrination across the public service, the education and research sectors, businesses and professional regulatory bodies. For example, 

• the Midwifery Council’s Scope of Practice
• the cultural safety requirements imposed on practitioners by the New Zealand Psychologists Board, and 
• the Treaty-centric competency standards for New Zealand pharmacists ...

"A very heavy focus on one population is evident in the charters, mission statements and constitutions of many organisations in New Zealand. ... [I]t seems that even the Internet cannot escape the current identity politics. ... [even if s]uch technology is universally available to the entire world and, by its very nature, is not exclusive to any one ethnicity. In fact, it is one of the most democratising of any technology ...

"[And yet] the InternetNZ Council [which operates the regional registry for New Zealand, i.e, the .nz Register]... has on its agenda the ... overarching Strategic Goal of 'Centring Te Tiriti o Waitangi' as a Strategic Priority, and ethno-centric preferences that dominate five Strategic Goals and 13 out of 25 sub-goals [including] ...  

• Implement Ngā Pae: Pae Kākano | Horizon 1....
• understand what it means to InternetNZ | Ipurangi Aotearoa Group to be Tiriti-centric....
• embed Te Tiriti through our strategies, policies, practices, people capability to achieve digital equity, digital inclusion and access for Māori ...
• [ensure] a Te Tiriti o Waitangi perspective guides everything we do. ...
• [ensure] investment priorities are guided by clear objectives that promote equity, align with priorities identified by Māori in the sector.

"It is perfectly reasonable that effective engagement with Māori, as with all stakeholders, should be part of the mission of InternetNZ. However, by declaring that it will be Te Tiriti-centric, InternetNZ, like our universities, is implicitly taking a political stance, when as a user-focused organisation it should remain entirely neutral....

"The stated goals stand at odds with the principles of [worldwide] internet governance as identified, for example, by the global Internet Society[which undertakes] the global management of the Internet.  ...

"As a critical facility for Internet access for New Zealanders, InternetNZ needs simply to recommit to the fundamental principles of a globally interconnected world, that demonstrate no preference for any particular ethnic, religious, social, economic, national, cultural or racial grouping. ... 

"[W]e must avoid even the remote possibility that access to a .nz domain name could be frustrated because the user may not support one or more of the strategic goals outlined above, or New Zealanders’ rights and responsibilities being differentiated by race."

~ John Raine and David Lillis from their post 'In Case You Were Wondering – InternetNZ and the Treaty'

"When politicians start talking about competition, economists ought to get a little bit nervous."

"It’s fair to say that economists like competition.
    "It’s also fair to say that when politicians start talking about competition, economists ought to get a little bit nervous.
    "People can have very different understandings of the same word. ... At the heart of the difference – while trying to avoid the boring bits – is how we understand the term competition. Is a competitive market one where there is some ‘right’ number of companies, of the ‘right’ sizes relative to each other? Or is a competitive market [an open market —] one in which no special permissions are needed to set up shop and every firm always needs to be looking over its shoulder?
    "Sometimes, the two amount to the same thing. ... But not all competitive markets, by the one definition, are open by the other. And not all open markets are ‘competitive,’ if we measure things by counting companies. Openness matters more – both when thinking about customers’ experiences, and about government policy. ...

    "When markets are open, underperformance by existing competitors ... is potential profit for new entrants – and better service for customers. ...

    "And that gets us back to my worries when politicians start talking about enforcing more competition. ... If the Government wants to focus on openness [on reducing barriers to entry], it could do much good. ...  There are no shortage of places to shine a flashlight. ...

•     "Successive Commerce Commission market studies identified regulatory and policy-based barriers that make it incredibly difficult, if not impossible, for new firms to compete with incumbents.
•     "The market study into building materials noted the lack of land zoned for new big-box retail suppliers ...
•     "The commission’s final report into grocery retail found a similar problem. ...
•     "Similarly, the commission warned that regulatory barriers hinder competition in banking. ...
•     "Opening a new pharmacy is tied up in weird regulations about who is allowed to own pharmacies. ...
•     "Many occupational licensing regimes look an awful lot like cartels organised to protect incumbents. ... I wonder [for example] why anyone should need special permission to be a real estate agent. ... Are we quite sure that regime is still needed?

    "It is a target-rich environment, if we are thinking about openness. ....

"The Government could help to bring down prices and improve the products on offer for consumers if it focused on ensuring market openness. Political campaigns against existing businesses may be more tempting, but they will do less good."

~ Eric Crampton from his article 'When politicians campaign on competition, be very worried'

Occupational Licensing: Teachers union against more teachers

"What’s better, no teacher or a recently retired, though now deregistered one?

'An Otago principal facing relief staff shortages would rather use unregistered teachers than send his students home.. . . [But] PPTA Te Wehengarua president Chris Abercrombie said the “ad hoc” response ... meant thousands of young people would not be taught by trained and qualified subject-specialist teachers. . . [And] PPTA Otago regional chairman Kussi Hurtado-Stuart said the loosening of regulations [allowing this] was a 'short-sighted solution.'

"Surely a recently retired, albeit no longer registered, teacher would be better than no teacher? ..."

~ Ele Ludemann, from her post 'Union’s politics showing,' in which she submits "the union’s anti-Government politics" are on display here. I'd suggest however that this is less about the union's politics, and more about simply protecting its turf. Just like all occupational licensing.

Busting labour monopolies. Case study: Occupational Licensing

"Occupational licensing is costly for both consumers and aspiring workers, but results in measurable benefits for existing market practitioners. Occupational licensing persists even though its costs very likely outweigh its benefits.
    "Occupational licensing makes it illegal for an individual to work in a profession before meeting minimum entry requirements set by the government. ... The minimum entry requirements often include paying fees, meeting minimum levels of education and training, passing exams, and meeting other requirements such as having a minimum age or possessing 'good moral character.'
    "Several dozen occupations, such as physicians, dentists, barbers, and cosmetologists, are licensed [along with] florists, interior designers, and ocularists. ... Many professions such as massage therapists, funeral directors, and athletic trainers, are licensed ...
    "Active market providers make up the largest percentage of licensing board membership. Many licensing board members own or have financial ties to schools that directly benefit ... Applicants for licenses are also future competitors of existing practitioners. Licensing board members can financially benefit from limiting entry into the profession by imposing expensive requirements. Consequently, licensing board members do not typically separate the public interest function of licensing boards from their own private interests. ...
    "The commonly stated objective of occupational licensing is to limit harm to consumers from poor quality service. ... But licensing has very clear negative effects. ...
    "Research confirms that licensing raises the prices of licensed services by anywhere from 3 to 13%. ... Studies estimating the effects of licensing in the 21st century often find little evidence of benefits for consumers. ...
    "[E]stimating the average effects of licensing on quality may not fully capture losses in access to service from reductions in the number of professionals. This has come to be known as the 'Cadillac effect' ... [L]icensing limits consumers to either purchasing services from providers meeting standards set by licensing boards (Cadillacs), or not purchasing services at all. This may encourage consumers to seek services in the underground economy, or to encourage consumers to do the services themselves. ...
    "[L]icensing boards [also] force consumers to purchase services meeting a standard that is not in the consumer’s best interest. ... [O]ccupational licensing reduces labor supply by as much as 29%. Occupational licensing restrictions can also limit the number of immigrants working in a licensed profession. ...
    "[T]here is very little evidence that licensing helps consumers. What is clearer is that licensing does indeed benefit existing practitioners."

~ Edward J. Timmons, from his post 'Occupational Licensing'

BOOK REVIEW: 'The Capitalist Manifesto: Why the Global Free Market Will Save the World,' by Johan Norberg

The IEA's Kristian Niemitz reviews Johan Norberg's important new book.

I first came across Johan Norberg almost exactly 20 years ago, when the German translation of his book In Defence of Global Capitalism came out. The book argued that globalisation was a success story. In large parts of the developing world, poverty, infant mortality and illiteracy were falling, life expectancy was rising, nutrition was improving, and democracy was spreading. These positive trends were, according to the younger Norberg, likely to continue, and they were not a product of chance. They were a result of the spread of capitalism.

At the time, this was considered an outrageous thing to say.... The almost universally accepted conventional wisdom of the day was that “globalisation” meant the exploitation of poor countries by multinational corporations, and that the world was going from bad to worse. ...

With his most recent book The Capitalist Manifesto: Why the Global Free Market Will Save the World, Norberg goes back to the beginning.... The era of “globalisation” is generally said to have started around 1990, so when In Defence of Global Capitalism came out, it was still in its relatively early stages. We now have three decades to go by. What happened in those three decades?

Quite a lot. 

• Extreme poverty fell from 38% of the world’s population to less than 10%, 
• child and infant mortality fell from 9.3% to 3.7%, 
• global life expectancy increased from 64 years to over 70 years, 
• illiteracy dropped from 25.7% to 13.5%, 
• child labour decreased from 16% to 10%, and so on, and so forth. 

The countries and regions which performed best are the ones which did precisely the opposite of what the anti-globalisation movement wanted them to do, while the most spectacular counterexample is the movement’s erstwhile poster child of Venezuela. ...

There are genuine problems, though. In some Western countries, NIMBYism is driving up the cost of housing. This makes it harder for people to move to where the best job opportunities are, and it gives younger generations a worse deal. In addition, the extension of occupational licensing is erecting market entry barriers. None of this has anything to do with “neoliberalism” or “hyperglobalisation”, though – quite the opposite....

But have classical liberals benefited from this, in any way? Has being right made us more successful in winning over hearts and minds? Are there more people now who embrace free-market capitalism, or who at least accept that, even if they don’t like it, it is the most powerful motor of economic and social progress known to man?

Very far from it ... in addition to the anti-capitalist Left, we have also seen the rise of an anti-liberal Right. ... Where In Defence of Global Capitalism was able to concentrate on one enemy, The Capitalist Manifesto has to fight a two-front war. Some chapters are primarily aimed at the anti-capitalist Left, others are primarily aimed at the anti-liberal Right, and some could apply to both in roughly equal measure. ...

• Chapter 3 concentrates on the ... misplaced nostalgia for the economic structure of the postwar decades ... Norberg shows that automation and productivity improvements have contributed far more to job losses in the manufacturing industries than free trade, and that ... the same processes that make some jobs redundant also lower consumer prices and thereby make us richer, [creating] demand for new jobs in other sectors ...
• Chapter 4 addresses the old Marxist idea that wealth must be built on exploitation, but also some of the more recent literature on inequality, such as Thomas Piketty’s Capital in the Twenty-First Century and The Spirit Level by Kate Pickett and Richard Wilkinson. In market economies, people do not get rich by exploiting others. They get rich because they offer something that lots of people are prepared to pay for. Left-wing celebrity authors like Michael Moore and Bernie Sanders understand that perfectly well when it comes to their own book sales, but they are not capable of extending that logic to entrepreneurial activities. ...
• Chapter 5 picks up another perennial Marxist theme: the idea that capitalism supposedly leads to greater and greater industry concentration over time. ... The best antidote to worrying too much about market concentration, though, is to read an article from 20 or 30 years ago that was worrying about the same thing. This is because a lot of the behemoths of yesteryear have since faded into obscurity. ...
• If there is one thing those of us on the pro-globalisation side were wrong about 20 years ago (and in Chapter 7, Norberg is very open about that), it was our belief that freer trade and freer markets would lead to the spread of Western liberal values, and Western-style liberal democracies. In China, this has clearly not happened. Under Xi Jinping, China has gone into reverse, both in terms of economic and political liberty. However, none of this means that economic nationalists, who seek to decouple Western economies from China, are right.... 
• One of the weirder phenomena of the past five years or so was the rise of a new wave of militant, anti-capitalist eco-movements: the Greta Thunberg movement, Extinction Rebellion, Just Stop Oil, and their various offshoots and counterparts in other countries. It is weird because it happened after the environmentalist side had already won the debate on climate change. ... On green issues, anti-capitalists are as wrong as they are about everything else. As Norberg shows in Chapter 8, market economies can and do address environmental problems very effectively.

All in all, the slightly older Norberg skewers the bad of ideas of the 2020s as effectively as the young Norberg skewered the bad idea of the early 2000s.

>> FULL REVIEW HERE: PART ONE  AND PART TWO.

Regulation raises elites

"One often overlooked consequence of regulation is that it adds to the complexity of decision-making. Thus government regulation tends to favour the better informed members of the community, over those who are less well informed. Although I have a PhD in economics, I don’t believe that I am anywhere near well informed enough to deal with government regulation. [Even t]he tax code is too complex for me....
    "There are many other areas of life where being well informed [or well connected] helps one to deal with the complexity of regulation. Big companies have an easier time complying with complex regulations than small companies. Occupational licensing laws favour those with more formal education. Our welfare state favours those who understand the complexities involved in applying for benefits. Expertise in taxes favours those who wish to avoid estate taxes, or those who wish to avoid losing wealth to the government after signing up for [a state pension]. Our immigration system is highly complex and difficult to navigate....
    "When the government designs its tax laws and regulations, it seems as though almost no weight is put on the way in which the rules favour those who are better informed. I have two problems with complex regulations:

1. They favour the cognitive elite (as well as big businesses that can hire people to navigate the regulations.)
2. They incentivise people to become well informed about facts with no social utility.

"The first problem relates to equity, the second to efficiency. ...
    "Regulation creates a shortage of painkillers. Who gets painkillers in that environment? Those who are smarter and more well connected. Regulation creates a shortage of kidneys for transplant. Who gets kidneys in that environment? Those who are smarter and more well connected. The safety net doesn’t have enough money for everyone who is needy. Who benefits from government programmes? People smart and well connected enough to navigate through all of the paperwork. (i.e., not the homeless.) Who has an easier time navigating the regulatory gauntlet to build new houses? The big builders. There are many more such examples.
    "Progressives tend to favour big government, thinking it will help those on the bottom of society. Sometimes it does. But big government also creates a system that favours those who are skilled at navigating its complexity—the economic and cognitive elite."

~ Scott Sumner, from his post 'Regulation favours the elites'

"The professional class ..."

"The professional class that supports policies like housing regulation and occupational licensing to inflate their home values and salaries has had a worse impact on opportunities for the poor than the 1%, although the latter gets a lot more attention from the left."

~ Chris Freiman

Occupational Licensing --> Corruption

"Occupational licensing is like the 'land zoning' of labour policy -- largely hypothetical health and safety edge-cases get used to justify a system that's just 95% about exclusion and graft."

~ M. Nolan Gray, commenting on 'Bogus beauty, nail and barber licenses being sold under the table in DC'

 

"When I am dead let this be said of me: 'He belonged to no school, to no church, to no institution, to no academy, least of all to any régime except the régime of liberty.'”

Gustave Courbet, Woman with a Parrot, 1866

“I am fifty years old and I have always lived in freedom; let me end my life free; when I am dead let this be said of me: 'He belonged to no school, to no church, to no institution, to no academy, least of all to any régime except the régime of liberty.'”

~ Gustave Courbet

About Courbet's famous nude (his first to be accepted by the Paris Salon in 1866 after a previous entry in 1864 was rejected as indecent), artist Michael Newberry explains that Courbet

shows us a special moment of freedom where there is no baggage, no pain, and no suffering –– as if they had never existed. This is significant because it aligns with Aristotle's eudaemonia and it aligns with a healthy psychology, the concept of holding a vision as a guide to what we are living for, which painting and sculpture are the ideal mediums to show what these visions look like.
    Her skin is aglow with health; her body speaks of flowing generous proportions; her hands are sensuously elegant; and her head is gently rotated and lifted. Her eyes are half closed in a dreamy indulgence of the moment. The high note of the painting is the gorgeous shape of her left hand on which the parrot is perched. She is not holding the parrot back, rather her hand is an affectionate, soft support, inspiring the bird to enjoy her human connection. Notice how complementary the shapes of her fingers are in relationship with the bird's spread wings. There is also a subtle bit of balmy synthesia: notice the warmish brown coloring of the shadows around her crotch, breast, and particularly around her languid eyes the hue gives off the slightly moist scent of musk. She is undoubtedly slowly waking up from a very satisfying dusky afternoon siesta. (Excerpt from Newberry's upcoming book Evolution Through Art.)

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QotD: "Those who carry on trade always try to rid themselves of competition..."

"Those who carry on trade always try to rid themselves of competition; they always produce some sophistical arguments to prove that it is to the interest of the State to rid them at least of foreign competition, which they have no difficulty in representing as the enemy of national trade."~ French economist ARJ Turgot in a 1754 letter to Controller-General of Finances Abbé Terray

[Hat tip Cafe Hayek]
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"Architect goes to jail; world shrugs"

"Paul Newman will have some time in jail to read up about architecture. Maybe he can even study for his exam and, no doubt, pass it. He could even emerge as a good contributor to the discipline and the profession. But what worries me more than the presence of a few shady and crafty operators such as Newman is bad architects who, under the cloak of licensure (and without the [architects institute] or anybody else able to do anything about it), commit crimes against our landscapes and lives on a daily basis. Those are the ones that should really go to jail."
~ Aaron Betsky, dean at the Frank Lloyd Wright School of Architecture at Taliesin and Taliesin West, on the jailing for seven years of a man for practising architecture without the state's license

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Occupational licensing doesn't protect who you think it does

Occupational licensing doesn't protect who you think it does. Rather than protecting consumers, its more about protectionism for those being licensed — and ideal way to bar competitors and minimize the dangers, to incumbents, of the new, novel and innovative.

In fact, argues Jason Sorens in this guest post, Licensing tradesmen and professionals is about little more than consumer exploitation, .

Do occupational licensing laws protect you from unscrupulous and unqualified practitioners? Or do they just protect the current practitioners against new competition?

These laws ban ordinary people from practicing a certain trade or profession — be it dentistry or hair-styling — until they have paid fees, undergone a certain number of hours of schooling, and usually passed certain examinations in order to get a license.

The proponents of such licensing laws generally claim that they help keep consumers like you safe from harm and fraud.

But let’s take a look at the evidence for ourselves.

Licensing’s Effect on Quality, Pricing, and Availability

We can examine the effects of occupational licensing on practitioner quality in part by looking at complaints to state governments. University of Minnesota economist Morris Kleiner has found in his book Licensing Occupations and a series of related papers that states that license practitioners see no fewer complaints than states that do not license them.[1]

In terms of pricing, an Obama White House report from 2015 noted that “the evidence on licensing’s effects on prices is unequivocal: many studies find that more restrictive licensing laws lead to higher prices for consumers.”

Furthermore, occupational licensing reduces the supply of new entrants into a profession. A study of Vietnamese manicurists in the American Economic Review found that lengthier training requirements reduced the number of practitioners significantly.

Occupational licensing also reduces low-income entrepreneurship activity significantly. Low-income workers often find it hard to pay for training, particularly when they have to go to school for a year or more to achieve certification for skills they already possess, over which time they still have to support themselves somehow.

Because licensing requirements vary by country and by state, and many do not automatically recognise those of other territories, licensing also prevents practitioners from moving easily or practicing across state lines.[2]

As Econ 101 tells us, that reduction in new entrants raises the wages of existing practitioners at the expense of increased prices to consumers—whom these laws are allegedly intended to protect.

How Licensing Laws Happen

You could call into question a lot of the prior evidence, and it’s not hard to find a few studies that find no effects of licensing (this isn’t too surprising, given the difficulty of measuring these effects). But what makes the incumbent-protection theory of licensing most plausible is actually the politics of the licensing process.

1. Legislators Only Hear from Lobbyists
Who proposes new licenses? It’s almost always a practitioner group that lobbies the state legislature. Very rarely do you see a new licensing proposal emerge because of consumer outcry for it. When state legislators hear testimony on a licensing bill, only practitioners show up to testify, and they are almost always unanimously in favor of licensing.

Consumers don’t show up, and neither do people who might want to enter the profession someday. So it would be really surprising if state legislatures didn’t overregulate occupational entry when the information and pressure they are getting is always so skewed.

2. Licensing Always Grandfathers Existing Practitioners
If licensing were about protecting the public, then licensing requirements would be applied equally to all practitioners. But that’s not what state governments do. Invariably, they exempt incumbents (known as “grandfathering”)and apply the new requirements only to future practitioners. This discrimination makes sense only if you want to restrict supply in order to help incumbents, not if you want to protect the consumer.

3. Strong Sunrise Review Helps
Some places (but very few) have strong “sunrise review” provisions. These require all new licensing proposals to be reviewed by an executive department before the legislature can vote on them, and specify that licensing is only justifiable if it is the least restrictive means necessary to achieve the objective of protecting public health and safety. Colorado and Vermont are two American states that seem to have strong procedures. And these two states have much less licensing than other states.

If review by government licensing bureaucrats (who are hardly free-market ideologues) results in less actual licensing, that fact suggests that the additional licensing seen in other states is probably not justified by consumer protection.

Certification Is Rare

If you want to protect the consumer, so-called ‘certification' almost always makes more sense than licensing. Certification — or “title regulation” —merely applies penalties to illegitimately calling yourself a certified practitioner if you haven’t met the criteria for certification. Laws against calling yourself a registered architect for instance wouldn’t forbid you from practicing architecture if you were unregistered, simply from claiming to be registered if you weren't. (And if registered architects are perceived to be superior, then consumers won’t be fooled by fellows fraudulently preteneding to be so.)

In essence, certification lets consumers decide if they want to get services from a certified or an uncertified practitioner, alllowing them to be the purveyors of quality.

But certification is in fact rare. Where it exists, governments usually end up replacing it with licensing. Why? Because certification doesn’t restrict entry — it doesn’t serve the interests of incumbents the way licensing does, and it’s incumbents who pay the lobbyists.

To be sure, government certification is hardly necessary today, especially as it can be easily achieved by private sector certification done by experts such as Underwriters Laboratory, voluntary organisations like Master Builders or Certified Builders, or by the public at review aggregation services like Yelp and Trip Advisor and in sharing apps like Uber, Lyft, and AirBnB.

The Upshot

The combination of all these facts strongly suggests that the motivation and function of occupational licensing is not to protect consumers like you and me, but to exploit them, and to protect existing practitioners from new competition.

Where there really a grave risk to public health and safety from incompetent practice in a certain industry, there is a simple and effective solution: bonding. Require a prospective practitioner to put up a bond or prove liability insurance coverage sufficient to cover the costs of a reasonable lawsuit judgment. And require both incumbents and new entrants to meet the requirement.

_________________________________________________________________________________________

Jason Sorens is a lecturer in the Government Department at Dartmouth College and received his Ph.D. in political science from Yale University in 2003. He is also vice president of the Free State Project.
His post has appeared previously at Learn Liberty and FEE.

NOTES:

[1] Note that this research can look only at occupations that are licensed in some states but not others.

[2] From the Obama Administration report: “Forthcoming analysis of five licensed occupations finds that, controlling for observable differences that could affect migration rates, individuals in three of these occupations have lower interstate migration rates than their peers in other occupations, while their intrastate migration rates are similar. This is to be expected if a State-based licensure system depressed mobility” (15).

Builder to Registrar: “I find it appalling that my means of earning a livelihood is at the mercy of answering to you”

 

One reason the cost of doing building business is so high is that builders and designers in New Zealand no longer have a right to work. The Licensed Building Practitioner regime brought in a few years ago by this National Government took away that right, instead just granting builders and designer bi-annual permission to ply their trade, if and only if that permission is kindly granted by whatever the Building Industry Authority currently chooses to call itself.

One Auckland builder at least has had enough of begging permission from the grey ones, penning this letter back to one Paul Hobbs, who currently has a sign on his door calling him the Registrar of Licensed Building Practitioners:

Dear Mr Hobbs

I am writing to you regarding my legal requirement to pay an annual licensing fee of $199.34.

I would like it noted that I thoroughly object to paying this fee and that I recognise it for what it is. I am not interested in impressing you with my standard of workmanship and I find it appalling that my means of earning a livelihood is at the mercy of answering to you. Needless to say I have always built to an extremely high standard and I still do even though I find myself constantly having to appease people like you who, if not piling me with pointless paper work, you are helping yourself to my earnings.

To be honest, I have about had my fill with working in the building industry.

As for “skills maintenance” what a joke. I am often working with guys who have finished their apprenticeship yet fail to operate fairly simple tasks with any level of skill and understanding. It is as though no one has ever taken these boys under their wing and imparted some knowledge and skill. This is a trend not only recognised by me but I hear it constantly from other business owners.

Without going into detail here I, at least, recognise that such an industry low as we are now in is a testament to the drag that government and council are to the building industry.

Anyway, I have said my piece. I look forward to the day when your gravy train comes to halt and that you and those under your employ are forced to work productively for a living.

Regards

P**** O******

We will keep you up to date with any replies.

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Hampered health market a blinding failure for southern patients

 

Did you hear news this morning that ophthalmologists in Southland are so overworked that eye patients are losing vision in their long wait for available specialists. “The condition of 30 people who are losing their eyesight has worsened because of significant delays in treatment at Dunedin and Southland hospitals,” says RNZ.

Six of the worst-affected patients have had severe eyesight loss.
    A further 4600 people have received letters from Southern District Health Board (DHB) this week saying their eye operations are overdue…
    "Twenty-four of the patients have had to have additional health interventions."
    Some patients waited five times as long to be seen as they clinically should have…

The reason, according to Southlands health bureaucrats? Too many patients, and too many new treatments with which to treat them.

So you might find yourself thinking, wow, if only Southland had more ophthalmologists, right?

Well, just remember that it was not that long ago that Southland ophthalmologists were “working to block Australian doctors from performing routine eye procedures in Southland.”

Southern Health received Government funding for an extra 225 cataract operations and tried to get two Australian ophthalmologists to perform the procedures.
    But one of the doctors did not complete the operations he was contracted for after New Zealand surgeons failed to clear him to do the work.
    The second was apparently told it was not in his career interests to operate in Invercargill.

Implicated in this protectionist racket were five eye surgeons including both the president and vice president of the Ophthalmological Society of New Zealand – the eye surgeons’ trade union. This was the culture within these entities and their union: their margins were more important than their patients’ health, such that an eye surgeon from out of town was told “it was not in his career interests to operate in Invercargill.”

Does that culture still hinder the employment of eye surgeons down south? Well, some of those operating this protectionist racket are still in practice. And while fining these low-lifes a token sum as penance once the practice was exposed, the operations were still undone, and the law still protects those without this trade-union’s accreditation from saving patients’ eyes. So it is still a factor.

And there is a lesson here. What happens in unhampered markets when there’s a big increase in demand for haircuts, massage therapy or ice cream? More barbers, masseuses and purveyors of delightful desserts see this as a boon, and come hither in search of higher margins. What happens in hampered markets when patients losing their eyesight need urgent treatment? See above.

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Quote of the Day: On fully developing ‘human capital’

 

“Outside of STEM [i.e., learning Science, Technology, Engineering and Maths],
I believe work experience is a more important means of developing human
capital than is most academic coursework. But between laws against unpaid
internships, rampant occupational licensing, and minimum-wage legislation,
we are asymptotically approaching a point at which we have de-facto outlawed
work experience for young people who have not yet graduated from college.
    “The quasi-religious belief in ‘education’ then supports the shenanigans of
rent-seeking universities with bloated administrations and often delusional
professors in the humanities and soft social sciences (e.g. sociology). The
result will be increasing youth unemployment and a weak economy, all of
which will then be blamed on ‘capitalism’ by the delusional professors and
their deluded students. This leads to demands for even more anti-capitalist
regulation and more faux investments in ‘education’ which then exacerbates
the problem even further. Rinse, repeat.”
~ Michael Strong, CEO at Radical Social Entrepreneurs, Co-Founder at Kọ School + Incubator
and Chief ‘Visionary’ Officer at FLOW: Liberating the Entrepreneurial Spirit for Good

[Hat tip Stephen Hicks]

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“Also to meet competency 1.2 your practice example must relate to demonstrating the principles of the Treaty of Waitangi”

I’m sure it will comfort you next time you find yourself in need of a nurse l to know that, in order for your nurse to  maintain their registration as a nurse, they must first “demonstrate their competence” as a nurse to The Council of Nurses.

A Council who does not hesitate to ensure – and this is important – your nurse’s “continuing competence” in something they call “competency 1.2,” which it turns our is something to do with “the principles of the Treaty of Waitangi” etc.

For clarity, this “competency 1.2” is one of the very first “competencies” stressed by The Council of Nurses in their Handbook of Competencies for Registered Nurses; it means, and I swear I am not making this up, “a demonstrated ability to apply the Treaty of Waitangi/Te Tiriti o Waitangi to nursing practice.” Which is to say, to be culturally safe.

This is obviously very important. Because your nurse’s knowledge of, excuse me, a “continuing competence” in applying Governor Hobson’s three spare clauses (just imagine how useful it would be, for example, for your nurse to ensure your land is only acquired by the Crown)  is undoubtedly of much more immediate use in a medical emergency than their having taken the time to learn, say, the basic protocol of Advanced Cardiac Life Support.

So I guess you’d have to hope they studied up on that other stuff in their spare time.

Licensing made easy

Quote of the day: On lawyers

"Justifications for the bar examination are invariably predicated
on paternalistic assumptions about the ability of ordinary people
to choose qualified lawyers; such arguments ignore the number
of ordinary people who, today, cannot afford qualified lawyers
at all under the current anticompetitive system."
- Alan Mendenhall, ‘The Lawyers Guild’

This is what a cartel looks like

The news is awash this week with stories of foreign doctors unable to find medical work in New Zealand – because, says the Medical Council, there are enough local doctors already, thank you very much.

Which leads to an obvious question:

Are the rules around licensing designed to protect doctors’ patients? Or to protect doctors’ salaries?

Foreign doctors have to sit a local exam before being allowed to practice. The local Medical Council limits entry to foreign doctors by limiting the number of examinations it offers.

Cosy.

As Eric Crampton’s post makes abundantly clear,

It’s the tip of a whole series of policy directions which control the health sector’s workforce and make little sense except from a rent-seeking perspective.