Freakonomics Radio 621. Is Professional Licensing a Racket?
388 snips
Feb 7, 2025 
Rebecca Allensworth, a Vanderbilt law professor and author of "The Licensing Racket," critiques the pervasive system of professional licensing in the U.S. She reveals how licensing began in medicine and law but now extends to diverse fields like hairstyling and auctioneering, often creating barriers for qualified workers. Allensworth explores the self-dealing nature of licensing boards, their failure to protect the public, and the hidden costs totaling $250 billion annually. Her insights challenge listeners to rethink the necessity and ethics of these regulations.
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Unexpected Commonality
- Seemingly unrelated professions like hairdressers, lawyers, and auctioneers share a commonality.
- They require professional licenses, overseen by boards often composed of members from the same profession.
Licensing's Importance and Ineffectiveness
- Licensing boards are the most important regulatory institution in labor, exceeding unions and minimum wage in impact.
- However, current licensing practices are often excessive and ineffective, creating high barriers to entry without proportionate public protection.
Evolution of Licensing
- Medical licensing began in the late 19th century, initially limited to learned professions.
- The demand for addiction therapists led to the creation of alcohol and drug abuse counselors, whose licensing requirements escalated over time, surpassing even physicians.
