Do you have a license?!
You better
Government often demands you get a license
before you're allowed to work.
People think this is a good idea.
We license drivers,
we license dogs,
People think it makes us safer.
But licenses also do something bad.
If people want to work, let them work.
11-year old Madison Root was told
she couldn’t work
because she didn’t have a license.
She wanted money for braces, so
she tried selling mistletoe.
Here she is in a tree, picking it.
But when she went to sell it at this outdoor market
police told her “Stop!
That’s illegal!”
They told her she could beg,
but can't sell anything.
Her father sent us this video.
I was amazed that people cannot
work hard,
but they can be just lazy.
I assume that’s not exactly what the cops
but the fact is:
All over America, people want to work, but can't
because it’s so hard to get proper licenses.
In the 1950s, well
only about 1 in 20 Americans
needed the government’s blessing to do their job
Today that number is more than 1 in 3.
This new book, Bottleneckers,
reveals how licensing rules allow
older businesses to profit
by keeping newcomers out.
These are people who want to erect barriers,
who want to put in place bottlenecks because
they want to keep competitors out.
It's kind of like what happens on a highway
if you close a lane.
The established, existing businesses are like
these motorcycles
licenses don’t slow them down.
During my consumer report days,
I assumed licenses protected us from scams like these:
We are not ripping people off.
But licensing doesn’t stop that.
Georgia funeral director,
who was pitching dead bodies out in the woods
behind his funeral establishment.
He was licensed.
Bernie Madoff
was licensed.
Teachers in public schools who have sex with their students.
Licensed.
Licensing doesn’t stop that.
What licensing does do,
is crush new entrepreneurs.
Want to braid peoples hair?
This woman was told she couldn’t do it legally
unless she spent thousands of hours
to get a cosmetology license.
She begged the government,
"Just let me braid!"
I was making these phone calls
to the board of cosmetology
saying I don't want to do
cosmetology
All I want to do is braid hair.
No!
Not without our license,
said the cosmetology board.
These are people
who have a clear conflict of interest.
Of course they do,
She wants to compete with them
Cosmetologists got together
and they went to the legislature and they lobbied
for the creation of a license.
Makes me wonder,
how could I get rid of my competition?
I’m annoyed by all these TV channels.
I’d like to limit that.
Yes, I’m sure.
So what you need to do John
is you need to go to government
and ask for special protection.
You need to claim that there is some public interest,
some way that the public
is going to be protected
by limiting the number of providers.
And that actually happened in America.
When I started in TV,
most viewers just had
ABC, CBS, NBC, and boring public television.
People could have had many more channels,
cable TV technology was available.
But lobbyists for my employer argued:
“No! That will hurt the poor.
They need broadcast TV.
They can’t afford cable.
So the FCC limited cable TV for years.
And that helped me make more money.
Certainly it does, that’s the effect of licensing.
That is,
the people who are in the industry have the ability
to artificially inflate prices
and their wages as a result
and consumers are worse off.
I was better off!
You were much better off
but now we realize
everyone else was worse off.
That’s what the bottle neck does
It limits choices,
thereby raising prices,
and enriching older businesses
There are so many bottlenecks.
We’ll show you a bunch in the next episodes.
We’ll also show you how these
problems can be better solved
by the free market.
Market regulation actually is enough for the
vast majority of occupations out there.
Bottleneckers around America,
They make life worse for you.