America's License Raj
economist.com
economist.com
Actually, Milton Friedman famously (and impressively persuasively) did oppose mandatory licensure of doctors.
http://www.fff.org/freedom/0194e.asp
A lot of the trouble with licensure is that it tends to ratchet upwards. If I'd been forced to spend $20,000 getting licensed as a barber, I'd be mad if a competitor opened across the street without having spent all that money. Repealing licensure requirements benefits everybody except the people who've already gotten licenses.
It does seem like an outdated way to see if a doctor is good or not. I'd personally find a recommendation from a friend or a bunch of positive reviews on yelp a lot more convincing than the mere fact they have a license to practice. It's pretty likely hospital administrators and others would be able to determine which doctors were good without a licensing practice (just like we find good programmers without licensing), and they have strong incentives to do so.
The hospital in this case is a middle man, and their role is vouching for the doctors they hire. When you buy a propane tank at Home Depot, the reason it doesn't blow up is that Home Depot's reputation depends on selling non-explodey propane tanks. When you buy meat at Whole Foods, why are you sure it's not rotten? Because the government checked that specific steak, or because you know Whole Foods wouldn't sell you rotten meat? Similarly, the reason people go to reputable hospitals is precisely because they know they can trust those places to hire competent staff.
A purely free-market, reputation-based system of behavior works well for frequent events, but fails miserably for infrequent events, and that's why regulations are necessary.
In other words, and more snarkily, the assumption that Home Depot hires competent staff is probably not sufficient to protect you from explosion.
But there are cases where dangerous things aren't regulated by the government and it still works out pretty well, like roller coaster rides. In that case insurance companies actually play a big role in disseminating industry best practices.
In cases where companies produce danger for people other than their customers we shouldn't expect them to necessarily be responsible without government oversight - like with pollution. And in something like a hospital where people tend to die even when the hospital does everything right I wouldn't expect people to be able to differentiate between good and bad hospitals well enough - and the evidence I've seen is that people don't currently choose hospitals based on how good they are even with the government publishing statistics on the matter. I can easily imagine that in a totally unlicenced market the problem would be worse.
You would, but so would a bunch of stupid people with stupid friends. I think licensing doctors falls into the same category as mandatory school attendance, i.e., stopping people from hurting ourselves so they don't drag us down with them. To think we worry about doctors following decades-old traditions instead of evidence-based medicine, or being influenced by drug companies. Those are good worries to have! It could be a lot worse. Everyone knows you're supposed to see a doctor when you need medical care, got to take your kids to the doctor when they're sick, etc. That magic word "doctor" results in people actually getting competent medical care instead of going to a faith healer or an herbalist, which is what they'd do if anyone could call themselves a doctor and people had to discriminate for themselves.
Let people screw themselves all they want if it doesn't screw me, but we should take some measures to make sure people get more competent medical care than they would be able to choose for themselves, just like we force them to educate their kids instead of putting them to work full-time when they're eight.
If mandatory schooling was about education then why can't parents take their education dollar to any certified provider?
They can, in the U.S. They can send their kids to a private school or even school them at home, provided they meet certain requirements.
Not everything needs to be a vast conspiracy, y'know. Some things are slightly screwy despite the best of intentions.
Second, the market is steadily routing around physician's monopoly on the practice of medicine. There's sverything from questionable stuff like acupuncture and chiropractic to nurses and PAs doing things that only doctors used to be allowed to do (e.g. prescriptions, minor procedures), and those trends seem to be accelerating.
"The average physician's net income declined 7 percent from 1995 to 2003, after adjusting for inflation, while incomes of lawyers and other professionals rose by 7 percent during the period."
http://www.nytimes.com/2006/06/22/business/22doctors.html
"...none of this really matters, because doctors' salaries aren't a large enough chunk of health care spending in the United States to make a difference. According to Reinhardt, doctors' net take-home pay (that is, income minus expenses) amounts to only about 10 percent of overall health care spending. So if you cut that by 10 percent in the name of cost savings, you'd only save about $26 billion. That's a drop in the ocean compared with overhead for insurance companies, billing expenses for doctors' offices, and advertising for drug companies. The real savings in health care will come from these expenses."
http://www.slate.com/id/2227965/
The rest of your comment is incorrect as well. The AMA does not license physicians, state governments do. Many physicians don't even belong to the AMA. The AMA lobbies for physicians, but it's not in any way like a union (not that there's anything wrong with unions).
Resident physicians in particular would probably lead better lives if in fact there were something like a union to limit hospitals and training programs that have traditionally worked these young physicians upwards of 100 hours a week for what amounts to minimum wage. Resident physician hours and primary care doc hours are still onerous, and most are paying education debut averaging $150,000.
Physicians can practice without any involvement with a hospital, and many do. In any event, the idea of using hospital CEOs or CFOs to determine "good" doctors is about as misguided as asking British Petroleum to determine "safe" drilling engineers.
There is a reason for (some) licensing. We tried the adolescent libertarian fantasy of letting the "free market" drive things like medical training and licensure back in the early days of the 20th century. You could characterize the vast majority of medical education in that era as training in quackery, before people like Abraham Flexner got involved:
http://www.npr.org/templates/story/story.php?storyId=9366625...
Interesting data, but the question is if licensing scarcity increase salaries than without. The salary decrease in 1995 to 2003 doesn't tell us anything other than.....net income decrease.
The rest of your comment is incorrect as well. The AMA does not license physicians, state governments do. Many physicians don't even belong to the AMA. The AMA lobbies for physicians, but it's not in any way like a union (not that there's anything wrong with unions).
Would it be possible that AMA effectively limits licensing rate through their lobbying?
There is a reason for (some) licensing. We tried the adolescent libertarian fantasy of letting the "free market" drive things like medical training and licensure back in the early days of the 20th century. You could characterize the vast majority of medical education in that era as training in quackery, before people like Abraham Flexner got involved:
Interesting data, but not enough details to support your statement. We need more details on what kind of reforms were made, privately or governmental.
I can tell you first-hand that AMA lobbied hard to reduce the number of medical school slots in America, there actually was an AMA-backed federal program in the mid-1990s that paid schools for the lost revenue from being forced to admit fewer students! The AMA also works to prevent nurses and midwives and the like from performing simple medicine and competing with doctors.
Plenty of people already use that method. And a lot of them go to see homeopaths and chiropractors based on that. Can you image what would happen to those people if they had to use recommendations from friends when they had actual medical problems that require actual doctors?
Can you summarize what his argument is? Can't we count on some upfront testing that will weed out the people who clearly cannot call themselves doctors? Is testing the same as licensure?
The rebuttal would be "Fine, but certainly state licensure can't hurt. It's just a backup." He says that it does in fact hurt, by allowing the AMA to control the supply of people who get to practice medicine. This limits patients' options w/r/t how, from whom, and for what price they can get medical care.
E.g. suppose I find a competent, well-trained nurse to remove a mole for me. The nurse and I agree to go ahead for $100. Friedman says that it's a) morally wrong and b) inefficient for the government to barge in and say, "No, for your own safety, you're not allowed to make this voluntary agreement. You have to have a doctor do this. Oh, and it'll cost $300." That's the effect of a law that says only licensed physicians are allowed to remove moles.
We have much the same situation with examinations boards for school leavers in the UK. A competitive market for examinations providers and schools incentivised to maximise pass rates has unsurprisingly led to grade inflation as each board tries to 'best serve their customers'....
But, as the Wall Street Journal has doggedly pointed out,
America’s Licence Raj has extended its tentacles into
occupations that pose no plausible threat to health or
safety—occupations, moreover, that are governed by
considerations of taste rather than anything that can be
objectively measured by licensing authorities. The list
of jobs that require licences in some states already
sounds like something from Monty Python—florists, handymen,
wrestlers, tour guides, frozen-dessert sellers, firework
operatives, second-hand booksellers and, of course, interior
designers—but it will become sillier still if ambitious
cat-groomers and dog-walkers get their way
Where in the US do second-hand booksellers need a license?
I suspect that they may be counting for some of these requirements to have a business license, rather than any license tied specifically to the occupation. They may also be mixing up requirements to be licensed with requirements to be bonded.
I can learn programming on my own (through books or Internet) and get a employment as a programmer working on business critical systems and I do not need to get any license from anyone. But hey, if I want to cut someone's hair, I need to pay my dues to the state?
I think for non medical businesses, the licensing requirements should be removed. We save tax payer's money and there could be more competition in the market place which will benefit the consumer. [And don't worry about protecting the consumer, once you get a bad hair cut from a salon, you will announce it to the world (thanks to the Internet) that the hair salon is bad and you will never visit that place again. Market forces will take care of the crappy businesses.]
http://www.tpub.com/content/armymedical/MD0164/MD01640044.ht...
http://www.sanitarian.com/14_American_Jails___Barbering_and_...
Here in Washington state you do need a food handlers license just to wash dishes in a restaurant. It's not especially onerous, something like $15 to take a fairly simple test. (And even for the lowest-wage employees I imagine most Restaurants will eat the cost of licensing without complaint.)
And I think it's the general assumption that you don't need to worry about disease in a salon that merits the higher barrier of entry to getting a license than a Janitor, where everyone knows that if there's a bunch of human-sourced fluid on the ground, you need to be careful.
And food preparation is in fact a licensed occupation: http://www.google.com/search?q=food+handlers+license
Whereas a florists license in Louisiana was defended with: "The state now maintains that regulation is necessary because consumers often phone in orders for third parties and never get to see what they've paid for." [1]
I'm not sure how anyone could defend something like that with a straight face.
1: http://www.legalaffairs.org/issues/May-June-2004/scene_joyce...
According to the Institute of Justice (the nonprofit which seems to the primary source here) -- Los Angeles:
http://www.ij.org/citystudies/la
"Even in this age of Amazon.com and impersonal warehouse bookstores, many people still appreciate the intimacy and service of a local and independent used bookshop. Unfortunately, they are a dying breed, and Los Angeles is doing everything in its power to make them extinct. Used bookshops—or “secondhand book dealers,” as they are referred to in the municipal code—are among the 53 categories of business that require a police permit. [109]"
"In addition to complying with the general police permit regulations—e.g., submitting to fingerprinting, paying the applicable permit fee ($263), etc.—they must comply with occupation-specific regulations that create administrative nightmares for purveyors of used paperbacks. [110] For example, every time a used bookshop purchases or receives books in exchange, it is required to “ascertain that the person selling or exchang[ing]” the books “has a... legal right to do so,” then execute a consecutively numbered bill of sale for the purchase or exchange. [...] The Police Commission, in turn, has its own set of rules governing used bookshops. Amazingly, they require that bookshops thumbprint every person from whom they receive a book and file a daily report with the Police Department describing all books taken in that day. They also require used bookshops to hold books for at least 30 days before selling them. [112] Apparently on an ad hoc basis, these requirements are waived for some shops. [113]"
Just the other week, I was sitting on the subway reading Tolstoy, when some kid snatched it out of my hands and raced out the door.
Perhaps LA subjects used bookstores to regulations similar to those imposed upon pawn shops?
[Note that I'm not arguing either in favor or against these regulations. I'm merely suggesting that they are more rational than they might at first appear.]
It's really sad.
The main profession the article picks on - interior designers - seems to be misunderstood by the author. He incorrectly insinuates interior designers only choose fabrics and colors. In fact, interior designers are professionals who have completed training in space management, ergonomics and architecture. They are able to recommend structural changes that could, if designed incorrectly, cause structural damage. Interior Decorators, who in fact are NOT licensed, are limited to choosing fabrics and colors (so to speak). More info: http://www.schools-of-interior-design.com/Interior-Design-vs...
Some of his other examples:
Frozen desert sellers - I hate to bring out the '...but think of the children argument,' but seriously, do you know if the grungy dude in the van selling ice-cream to your kids knows how to handle food safely? Has a criminal record? Has 12 DUIs?
Firework Operators - their job is to set off large explosions close to large crowds, occasionally indoors. I, for one, don't have a problem making sure they know what they're doing.
So the author may have a valid point, but his poor choice of examples does not support his case well in my opinion.
It seems clear that if someone is going to recommend putting holes through walls, they should be appropriately educated and licensed. But I clicked through to your link, and it appears that the biggest difference is that interior designers are required to be familiar with various building codes and the like.
In other words, bureaucracy begets bureaucracy.
I fail to see the relevance of criminal records and DUIs to handling ice cream.
DUI history is a common concern when licensing occupations that involve driving niche equipment under challenging circumstances, such as a truck in a throng of tiny jaywalking pedestrians.
If the law allows you to have a driver's license even though you have 12 DUIs, I can't see any reason why you shouldn't be allowed to drive a van.
On the flip side the worst that can happen in the vast majority of cases is that programs won't work (or maybe they'll even lose your data or leak it to the world). It's pretty rare that a programming error can kill someone.
My own sister has formal training in interior design from a baccalaureate program at a state university, and she has pursued that occupation since graduation for more than two decades. I am aware from my sister's work in commercial interior design in a big city with skyscraper office buildings that some interior designers have somewhat of an influence on the safety of public spaces. But it's ludicrous to think that Florida's pattern of regulation of interior designers is in any sense motivated by public safety concerns. If there are such huge public safety concerns from interior designers not being state licensed, why do we not hear news stories from other states with different patterns of regulation about all the people who die from entering buildings that are owned by owners who hired unlicensed interior designers?
The experiment in federalism that has been going on in the United States offers a wonderful comparative laboratory of policies. Unfortunately, for reasons well explored by public choice theory,
http://www.econlib.org/library/Enc/PublicChoice.html
state legislatures often ignore the real-world experience of other states in setting policy, preferring instead to listen to rent-seeking
http://www.econlib.org/library/Enc/RentSeeking.html
lobbyists who divert attention from real-world experience to focus on hypothetical harms that could (maybe) happen if they don't obtain their favorite kind of special treatment. So I would respectfully suggest to my fellow HN participants that if someone wants to make a case that some occupation (e.g., hacking to build web-based SaaS businesses?) should be regulated by state-issued licenses, the persuasive way to make that case is to refer to detailed statistics about actual benefits or harms to the general population, rather than referring to imagination or common fears.
P.S. The one time I had to shop for a surgeon, for my wife, I asked my mom, an operating room nurse who has worked with some world-famous surgeons, to help me find the best doctors in town. That she was readily able to do. People always work the best network they can for the other people they care about most, and life will always be this way, regulation or no regulation. My wife had a completely uneventful and full recovery from her surgery.