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Local governments “safety” regulations strangling economic opportunity


Local governments “safety” regulations strangling economic opportunity

Campaign for Liberty members are well-aware of how many federal regulations serve to benefit powerful corporate interests at the expenses of smaller competitors and consumers. For example, the regulations outlawing incandescent light bulbs just happen to force us to use a product manufactured  by General Electric, while so-called “consumer safety” legislation passed to “product the children” from dangerous toys ends up harming small and independent manufactures and not even applying to the large companies whose alleged malfeasance what was used to publicly justify the law in the first place.

The phenomenon of laws labeled as “pro-consumer” that actually benefit entrenched business interests is, if anything, more common at the state and local level. Many so-called “occupational licensing” laws serve as a barrier to entry into a business, thus limiting competition and raising prices. While the politicians claim these laws are necessary to protect consumers from dangerous and unscrupulous business, looking at how some of the professions for which a license is required suggests that legislators passing this bills may not always be primarily concerned with protecting consumers.

For example, Mississippi requires someone who simply wants to open a  hair braiding business to take 300 hours of course work–none of which cover hair braiding. Mississippi requires more training to braiding hair than to be a firefighter or an emergency medical technician. The result is to limit the supply of hair-braiders, and other hair care professionals, to those who can afford the training.

Question: Do this license help or hurt those at the bottom of the economic ladder looking to start their own hair-care business? (Answer: It hurts)

Question: Does this licensing scheme help or hurt consumers? (Answer: It hurts)

I don’t mean to single out Mississippi or hair-braiding. Licensees and other forms of regulations are used by states and local governments to stop compaines like Uber from competing with taxicabs and food trucks from competing with brick-and-motor restaurants. And, of course, Campaign for Liberty members are well aware of how large agribusinesses benefit from laws restricting our food choices.

More information on occupational licensing and other forms of regulation that stifle entrepreneurship and harm consumers to benefit entrenched business interests here and here.


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