The High Cost of Occupational Licensing

“Occupational licensing may increase quality for some higher income customers. But licensing increases monopoly power for dominant firms while driving lower-income customers out of the marketplace.

One of the most fundamental things about economics — which many people who are passionate about politics do not understand — is that the economy is not like a chess board where you can move one piece with deterministic and predictable consequences. On the contrary, an economy is an intricate fabric of interrelated institutions and actors all of whom act relative to one another. Any one move creates a cascade of domino effects. If the price of milk changes dramatically then orange juice sales might be affected — and with them the prices of other fruits as well. It’s impossible to predict.”