Big Government Cronyism: The Ancient Job Killer is on the Loose in America

By Joe Carter Published on June 16, 2016

For as long as there have been government officials, there have been economic cronies — friends, family and associates who use their connections for their own financial gain.

In ancient Israel, for example, when the prophet Samuel appointed his own sons as leaders, they began to engage in cronyism. The book of Samuel tells us that “they turned aside after dishonest gain and accepted bribes and perverted justice.”

Unsatisfied with these corrupt leaders, the elders of Israel asked Samuel to appoint a king over them. God tells Samuel to warn the people of the consequences, which would include even worse forms of economic cronyism. The king “will take the best of your fields and vineyards and olive groves and give them to his attendants. He will take a tenth of your grain and of your vintage and give it to his officials and attendants.”

In the 1950s, only one in 20 U.S. workers needed government permission to pursue their chosen occupation. Today, it is closer to one in three.

People of faith read such passages and instantly recognize this as unfair and unjust — a corrupting influence on both the people and the government. Yet we tend not to even notice the cronyism that occurs in our own economic system. Because the “dishonest gain” is often more subtle than the examples found in the Bible, we often do not recognize cronyism.

Cronyism, otherwise known as “crony capitalism,” occurs when an individual or organization colludes with government officials to create legislation or regulations that give them forced benefits they could not have otherwise obtained voluntarily. Those benefits come at the expense of consumers, taxpayers and everyone working hard to compete in the marketplace.

The simple truth is that cronyism hurts us all, but it is especially harmful to the poor.

There are numerous forms of cronyism, but one of the most subtle and damaging to the economically vulnerable are occupational licensing laws.

Occupational licensing is a form of government regulation requiring a license to pursue a particular profession or vocation for compensation. Some forms of occupational licensing are, of course, necessary to protect public safety.

For instance, we all want a surgeon who has received some sort of certification that she is competent to practice medicine. But oftentimes, occupational licensing is merely a way for established businesses or industries to use the power of the government to reduce competition.

It is also one of the fastest areas of growth for cronyism. In the 1950s, only one in 20 U.S. workers needed government permission to pursue their chosen occupation. Today, it is closer to one in three. Research has shown that licensing neither protects public health and safety nor improves products and services. But it is highly effective in limiting the number of people who can create a job for themselves and earn a livable wage.

Take, for example, the case of Jestina Clayton. Clayton grew up in a village in Sierra Leone where every girl learns traditional African hair-braiding. When she was 22, Clayton moved to Centerville, Utah, and found a niche market among a small group of Utah parents who had adopted African children but didn’t know how to style their hair.

When she began advertising her services, though, Clayton was shut down, because she didn’t have a cosmetology license. Getting such a license would require nearly two years of school and $16,000 in tuition. She had the necessary skills, and her work posed no threat to the public safety. Yet a crony policy attempted to prevent her from earning a living.

Fortunately, a federal judge eventually ruled that Utah’s licensing requirement was “unconstitutional and invalid,” because regulations are irrelevant to her profession.

Sadly, though, for millions of other Americans, occupational licensing continues to serve as a barrier to work and self-sufficiency.

Citizens shouldn’t be required, at the threat of gunpoint, to show a license that says the government will allow them to style and blow-dry hair. Nor should the poor and low-skilled be prevented from applying themselves to thousands of other professions for which they are competent but lack certification.

People of faith often disagree on matters of economics. Yet all of us should care about the poor. Cronies, such as Samuel’s sons in the Bible, may always be with us. But we should always fight against them to defend the most economically vulnerable among us.

 

Joe Carter is a senior editor with the Acton Institute, co-author of How to Argue Like Jesus: Learning Persuasion from History’s Greatest Communicator, and adjunct professor of journalism at Patrick Henry College. 

Reprinted with permission from the Washington Examiner

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  • Robert J. Cihak, MD

    Joe writes, “Some forms of occupational licensing are, of course, necessary to protect public safety.
    For instance, we all want a surgeon who has received some sort of certification that she is competent to practice medicine.”
    As an MD myself, I do NOT agree that licensing of surgeons is necessary. I was, and remain, convinced by Milton Friedman’s book “Capitalism and Freedom”, especially Chapter 9 “Occupational Licensure.” Friedman takes up the arguments for licensure of physicians as the seemingly strongest case for licensure. He documents how licensing boards tend to be dominated by people that provide the services being licensed and how they uniformly function to limit competition by limiting access to the business.. er, sorry, profession ..by often requiring excessively burdensome training, time and money. If licensing protected the public, I would expect the profession being licensed to fight against new licensing laws. The opposite is true, from personal observation of massage therapists and speech therapists lobbying FOR licensing laws to protect their monopoly.
    True, I do want competent medical practitioners to treat my ills. Joe mentions “certification” which Friedman recommends. Independent groups certify individuals, not gov’t agencies. Likewise, survivors.. er, patients .. also certify practitioners (or not) based on their personal experience.
    Also, doctors frequently hide behind the framed documents on their office walls, sometimes looking down at the questioning potential patient with an attitude such as, “How dare you question me about my success rate?! Look at all the Framed Documents hanging on the wall!! The Government officially says I can do this!”
    Truly independent groups would be best positioned to analyze medical and other practitioners. Gathering the information necessary is difficult in the current licensing regime.

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