Doctors stand defiant

End Occupational Licensure
By Walter E. Block, Ph.D. - April 20, 2020

In the bad old medieval days there were masters, journeymen and apprentices. This guild system controlled many occupations. If you wanted to enter any of them you had to be approved of by the powers that were.

The same sort of thing took place in bad old India under British rule. There was that scene in the movie “Gandhi” in which numerous of his followers were brutalized as they approached the sea. What was that all about?  The colonial powers had reserved salt-making for the crown. Gandhi did not quite buy into this prohibition. His supporters were attempting to violate this stricture and were subjected to ruthless beatings to quell their protest.

In the good old (well, new, modern) US of A we do not engage in such uncivilized practices? Surely not, you say? You are in grave error. Such feudalism is alive and well under present institutional arrangements.

You may not have noticed this, you Rip Van Winkles, but many African – Americans arrange their hair in intricate patterns.  (Some white people are now copying them, in a blatant act of cultural appropriation; the horror). Many hair braiders are young black girls.

Modern-day feudalists place all sorts of roadblocks against them. They are required to attend expensive school for several years, where they learn the finer points of scalps, hair and other irrelevancies. These braiders know far more about their business than these erstwhile “professors” of hair. New Orleans, with its large black population, is particularly vulnerable to these legal outrages.

Why do we have these laws on the books in the first place? There are two theories which attempt to explain this phenomenon. The first is the public good argument. Unless the government compels all practitioners to pass a licensing exam, given only after years in “school,” inept braiders will ruin the hair of their clients. These requirements are put in place so as to protect the public. It is easy to give the back of our hand to this “explanation.” It is so blatantly obvious that it is false. Protect the public indeed.

The second is that barbers, hairdressers and their ilk simply do not welcome the competition of these hair braiders. They would like to seize this business for themselves. Under the thin veneer of safeguarding customers, they instead raise the prices they must pay, since they have excluded their competitors from the market. Other callings that require licenses include interior designers, locksmiths, alarm installers, hypnotists, motion picture operators, parking valets, magicians, landscapers, horse-shoers, and furniture upholsterers. Estimated cost? Over $2 billion per year, for the almost 30% of the labor force covered.

It is easy to see the hypocrisy in this case. It takes far greater insight to be able to apply these considerations to medical doctors. They, too, resist entry of competitors into what they consider their turf. But they do so right at the source: the AMA ensures that all too few students are admitted to medical school. If such an establishment accepts more applicants than the AMA deems advisable, it loses its accreditation. Just you try, gentle reader, to set up a new medical school without a by your leave from these powers that be. This is why the salaries of physicians are a healthy multiple of those who might otherwise have become doctors in a freer society, such as those with a Ph.D. in biology.

This AMA practice is particularly egregious when it comes to foreign doctors who are already highly skilled and accredited in their countries of origin.  Thousands of professionals emanated from Austria to the U.S. in the 1930s, to escape the Nazis. Physicists, chemists, biologists, engineers, economists, mathematicians, none of them had any particular problem attaining similar position in this country. The exception was physicians. A similar occurrence befell Cubans fleeing communism a few decades later. Barriers to entry were set up only for the doctors.

The barricade set up against them was that in order to be qualified, one had to pass an exam — given in English. The AMA argued that unless there was proficiency in our language, patients would be harmed. (This didn’t apply to physicists, chemists, biologists, engineers?) But some patients are wheeled into the hospital unconscious, rendering communication with them moot.

Second, surely, those foreign doctors could at least treat members of their fellow language community in the US.

Third, what about translators? This would entirely obviate the objection launched by the AMA. True, this would cost more, but that is entirely a separate matter.

Milton Friedman champions instead of licensing, certification for doctors. Here, if you do not take or pass an exam, you can still practice. (Most tasks of the CPA fall into this category). Doing so would greatly ameliorate our present health care difficulties, as labor, in general, accounts for some 75% of the GDP and physicians’ salaries comprise a large share of medical expenditures.

There is nowadays a felt need to do something about our medical mess. The best way to address this problem is not with socialist medicine. It is, rather, to delete the feudalism from health care. Substitute a certification agency industry for licensing (akin to Underwriters Laboratories, Good Housekeeping Seals of Approval, Consumer Reports), watch the number of doctors rise and their salaries fall.

The free enterprise system is the solution, not socialism, for both hair braiding and medicine.

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