Call for Papers for a panel at the June 2023 University of Glasgow’s Tercentenary events. Dr. Charles Wheelan of Dartmouth College is looking to run the following panel:
“Adam Smith famously warned of the impact of guilds in inhibiting healthy economic competition. The guilds have disappeared, but Smith’s insights are more relevant than ever. Charles Wheelan will speak about the growing impact of occupational licensure, which is the process by which governments require legal credentialing for individuals to practice a profession. The professions licensed (at the state level in the U.S.) now include occupations like hair braiding and interior design. The effect, as Smith warned, has been to diminish economic and geographic mobility and to preclude some vulnerable populations, such as ex-felons, from finding work.”
Inquiries and interest can be directed to Charles Wheelan at: Charles.J.Wheelan@dartmouth.edu
Adam Smith’s arguments against occupational licensure in general are straight forward and well known. However, as I see it, this might be a general rule with noteworthy exceptions.
Public regulations of dangerous trades or of trades, where safety considerations are involved like electricians or gas fitters seem sensible. In Germany membership in trade organization (“Handwerkskammer”) is obligatory for most craftsmanship. Someone who wants to lead such business need an exam in the respective trade (“Befähigungsnachweis”).
Under certain circumstances occupational licensure helps to bring forward public goods. To offer young people vocational training might be seen as a burden and only be provided when all businesses of the trade participate. Organizations of trades usually develop “good practice” standards which might reduce transaction costs and protect consumers in case of asymmetric information.
The arguments might need to be evaluated for each case.
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