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by Eric Shierman
Occupational licensing: the man of system makes his move
I have often wondered about the etymology [2] of the term “man of system” that Adam Smith so famously used in The Theory of Moral Sentiments. Did he coin it, or was it a common term contemporary to his time? Either way, he identified well the mentality of the people employed to carry out the coercive power of the state from ancient times to today. In the constant arms race between ordinary people trying to make a living, and our men and women of system in the Oregon legislature currently trying to double down on two more bad occupational licensing laws, we see how actual humans fail to behave in ways Salem’s central planners envisioned when the laws were first passed. HB2191 [3] and SB697 [4] are basically small, unnoticed bills that move a handful of workers around like pawns on an economic chess board.
For those of you like me who prefer primary sources, here is the quote in full. The context finds Smith contrasting two approaches to the failings of common people. The first approach is that of the man whose “public spirit is prompted altogether by humanity and benevolence” who seeks to limit the law to its manageable limits. This man of humanity and benevolence seeks to improve society through the non-coercive means of “reason and persuasion.” The man of system however always escalates to the coercive approach:
The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon it.
Like three dimensional chess, SB 269 deals with the problems of occupational licensing on another level. From law schools to beauty schools, expensive trade schools have emerged largely due to laws we have enacted that mandate attendance at them before government authorized entry into the profession. These laws seek to prevent the time honored and lower cost means of simply apprenticing one’s self with an established tradesman. This artificially created market demand for trade schools has obviously led to all manner of abuse of prospective students by trade school recruiters so Oregon lawmakers feel they have to regulate college recruiters as well. A whole chapter of the Oregon Revised Statutes stands devoted to regulating these gatekeepers to employment.
One means of bypassing restrictions on trade school recruiting has been to hire contractors as agents who have been exempt from the language of ORS 345.010. HB2191 changes the language to now include an individual “who is working on behalf of the school under a contract.” It is not clear how many abuses this broader language will actually prevent. The root source of this problem comes not from anything particularly malevolent about vocational education. It’s entirely a derivative of the monopoly position our laws privilege them with. Given the ample peer reviewed economic literature showing occupational licensing ads no value to consumers, the best way to solve this problem would be to allow these trade schools to compete with less expensive alternative means of training workers.
The men and women of system in Salem don’t think that way. Like whack-a-mole they show up every year to pass more and more laws needed to deal with the negative consequences of previously passed laws. HB2191 passed the Oregon Senate unanimously yesterday and cleared the Oregon House on March 11th 48 to 9.
SB697 tries to respond to the underground market in tattoo services that Oregon’s heavy handed regulation of what ORS Chapter 690 calls “body art practitioners.” SB697 seeks to now criminalize the possession of tattoo equipment. Seriously! Prisons ban the possession of the tools needed to engrave tattoos also, and somehow this highly diffuse and low barrier to entry profession thrives in our state penitentiaries.
Why do we have this black market? It’s certainly not because of the high cost of following sanitary best practices. Needles are cheap and easily replaced for each new customer. The compliance problem is not health related; it’s credential related. Many poor people (such as newly released felons whose criminal record bars them from employment in our high minimum wage state) possess the knowledge to perform tattoo engraving safely, but lack the money to pay for the 368 hours of extremely expensive training necessary before one can even be allowed to pay the additional fees for a permit.
SB697 passed the Senate 24 to 5 and as of yesterday sits on the House speaker’s desk awaiting referral. The man of system awaits his move.
Eric Shierman lives in southwest Portland and is the author of A Brief History of Political Cultural Change [5]. He also writes for the Oregonian’s My Oregon [6] blog.