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April 07, 2009


Forgive my bragging but my Principles of Microeconomics textbook devotes one and a half pages to occupational licenses (246-247) and suggests to students that the next time they get a haircut they ask their stylist about any state mandated training programs that the stylist took and inquire whether the program helped her become a better stylist.

The problem here is not that economists agree, but are failing to speak up against foolish laymen. The problem is that almost everyone agrees, but are overruled by a small minority with resources and a financial interest in making sure legislatures reach the wrong conclusion.

jimrandomh -

Most people support licenses for many professionals such as lawyers, teachers, electricians and doctors even though you can make an extremely strong case against state mandated licensing for these occupations.

The WSJ link goes to an article from 2009-04-01 about Karl Rove and Barack Obama.

Robin, what are your suggestions exactly? That economists write letters to the NYT or to their local newspapers about this? or that they become political entrepreneurs and found one or more Associations Against Obviously Absurd Legislation to lobby against the "bad" lobbies?

I do not think it is a matter of silliness. It is not silly to worry about Obviously Absurd Legislation. It is just that for most economists starting a battle against, say, interior design licensing, would be boring, take a lot of time and bring little expected gain to the fighter.

I guess you might say that there are plenty of economists (and others) that take on Don Quixotesque battles with even lower expected net gains. Probably most of them (I have no data) are about "serious, important, difficult" issues (war, poverty, inequality, etc.) that have high emotional impact - something that interior design licensing sadly lacks (unless framed as an example of lack of free trade, which does have some emotional impact on many economists).

Actually, valter, I'm inclined to disagree - I think it would be easy to argue that there are better returns to economists going after "low-hanging fruit" which they tend to agree upon than creating more noise over, say, the financial crisis or broad issues of political economy which have already been hashed-over time and again. This isn't to say that these issues aren't worth discussing, but a lot of contemporary debates have a low signal:noise ratio and the contributions of those inclined to opine upon them tend to just signal intellectual solidarity rather than add anything new.

But I imagine that there would be relatively decent returns to coming down as a discipline against certain kinds of policies - even if economists' ire is focused on one particular law (in this case, licensing of interior decorators), it seems reasonable to believe that the tide of public debate of these issues could be turned. In a broader sense, I have to wonder to what extent the existence of systematically biased economics beliefs that Caplan describes can be faulted to economists themselves for not doing a better job of engaging the public on these issues.

How about rent control?
I don't think economists consider that undignified. I think silliness is an excuse confabulated for the other examples, but the real reasons also cover rent control.

I'm not sure what these real reasons are, but I suspect that they are more along the lines of being afraid of revealing / being forced to learn that the public and politicians don't care about expert opinion or simple argument.

James, congrats; Peter, agreed; Douglas, could be.

jim, James is right; public opinion is the obstacle.

Paul, thanks, fixed.

valter, we could collect petitions with many signatures, for example, or have our economics associations make official statements.

In other words, valter is right about gains to the economist.

But in terms of value to society, cases where there is expert consensus are "low-hanging fruit." The expected value of action may be low, but at least it is positive.

Silly, Robin? A bouquet of flowers killed my father!

coming down as a discipline against certain kinds of policies

You're not taking into account the distorting effect of the media, which will quite happily represent the entire weight of a discipline versus a few nutjobs as a raging debate on which the jury is still out.

Robin, I would be glad to sign a petition about this or encourage a professional organization to make an official statement (or sign a petition encouraging an official statement). I'm curious - did the colleagues you spoke with refuse to take even these steps?

Incidentally, does the AEA take official positions on any policy issues? (forgive my ignorance about this!). Which other professional organizations might we appeal to?

Maybe the problem is just that there isn't an obvious official avenue through which to raise these issues. It might be helpful if some official body like the AEA released an annual poll asking economists to weigh in on a range of issues so at least there would be some authoritative place that non-economists could go to see what economists think.

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Someone says that the debate is dominated by nutjobs, I totally agree. Their attitude is like: "See if you have to license doctors and pilots, next the government is going to go after interior designers!!!!!"
While this works wonders to reinforce already like minded ideologues that they are right, it doesn't work as a persuasion tool for policy change. Most people would like to think that when they receive a service that involves their life and health that there is some minimum standards backed up by government rules and laws, while they will agree that a botched interior design job should only involve the fashion police... But the absolutist doesn't make this rational argument, they just thump some Hayek tract.

So yes it is a Silly Consensus because it involves Silly people, and to challenge the "consensus" you will find yourself allied with some very silly people.

I actually have asked a hair stylist about state licensing. Her opinion was roughly that state-required licensing was absurdly expensive (in Florida). She didn't know why it existed, only that it was just a silly hurdle to be overcome. However, she did feel that regulation and inspection related to hair styling was useful; mostly because regulators looked for proper antiseptics and procedures that keep hair-borne parasites and diseases from being spread. I have no idea how effective or costly these health-related regulators are, but I'm less concerned about them because there are actual economic arguments for their existence.

James D. Miller: While licenses for interior decoration and being a florist are obviously absurd, you say that one can also make a very strong case against mandated licensing for professions such as teachers and doctors. I'm curious to hear why this is so - could you provide a brief summary, or a reference that'd explain it in more detail?

My colleagues tell me that it would just seem silly to make a fuss over this; it is just not a serious topic.

They have a point. What you need is a general anti-licencing rule. Then you can say that no licencing regulation should be passed if it violated that rule.

Any ideas about what that rule should be?

I don't think the analogy to the medical field is as relevant as comparing it to architecture.

As much as I disagree with required licensing for interior designers, there is a very large difference between interior designers and interior decorators. The former needs to understand and be able to successfully apply fire and life safety principles, barrier-free design (e.g. ADA)and many standards and codes that most would assume only architects are required to understand/know. The latter just needs to match colors, fabrics and styles together.


You nearly had me until I went over to the ASID website and was greeted with:

"Michael Alin, ASID Executive Director, Gives Video Address on Legislative Priorities for 2009
Society pledges legislative support to create more opportunities for designers in a down economy."


"How to Report Your CEU Compliance

No course information is required. Simply access your online profile and select “Go to My ASID.” Scroll down to “Report your CEU Compliance,” and you’re all set. The reporting deadline is Dec. 31, 2009, but don’t risk being audited by waiting until the last minute."

Very rigorous, right, this mandatory continuing education requirement - no course information required!

So I went to see what kind of important continuing education is in fact offered for the requirement. I was greeted with this so-important-for-public-safety online class - American Indian Culture, Southwestern Tradition, and Santa Fe Style. Ah yes, you must pay them to learn how tastefully recognize the cultural importance of bleached cow skulls and fake Indian blankets by Ralph Lauren.

Robin's right, this is a scam to keep talented gay men down, and make sure all the others pay the regular dues.

Though economists may not do too much about it, there are organizations that challenge licensing laws on a regular basis. The public law organization Institute for Justice (a libertarian outfit) has an Economic Liberty division that mounts legal challenges to these types of licensing laws. (http://www.ij.org/index.php?option=com_content&task=view&id=557&Itemid=240) Lots of interior design, hair-braiding, and florist cases. I know there are some other, smaller organizations that do similar work as well.

It's very interesting to see the argument against licensing for interior design from an economic perspective. I call myself a renegade interior designer because though I have a degree in it I do not have a license. (Oh, the horror!) I think it is important to learn about building codes and ADA requirements and green design to benefit the health and safety of everyone. No sense in designing a beautiful space made of asbestos and coated in lead paint. Design education is important. But I think that the problem is that unlike in some of the other professions listed, there are too many artificial barriers to employment as a designer. I cannot take a licensing exam until I have worked for a few years for a designer who is licensed, but there are so few of them hiring entry-level designers. They want someone with experience. So I don't have experience because no one will hire me, but no one will hire me because I have no experience. Which is how I ended up selling carpet and furniture for a while.

But now I say screw it. I'm going to call myself a designer anyway and if they want to sue me, take it up with a lawyer. And speaking of lawyers, at least they get to take the bar exam once they get their degree instead of doing some b.s. "apprenticeship" first.

So as someone who is personally affected by these ridiculous laws, I am glad to see that you took the time to use interior design as an example of the useless regulations. Also, you may want to read this report:

Designing Cartels by The Institute for Justice

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