> Calculating only the cost is useful information.

I mean, kind of, but it's not remotely the only relevant piece of information. I could make you a car for $2,000. Would you want to drive it at highway speeds in it? What do you think your chances of survival would be in an accident?

The article makes a point to call out the music therapy case to conjure the specter of seemingly unnecessary regulation leading to regulatory capture, but the vast majority of licensed occupations are licensed because bad shit happened when they weren't. Doctors were quacks. Bridges fell down. Buildings caught fire. Planes fell from the sky. Millions of dollars in damages and countless lives were lost over and over because some greedy sumbitch decided to cut corners or defraud his customers or just didn't think about the consequences of his design or service decisions. These regulations exist because people ruined it.

And I mean, is music therapy dangerous if it's misused? I don't know. I don't even know what music therapy is used to treat! What harm can unethical application music therapy cause? Physiotherapy can easily be unethical. So can psychotherapy and counseling. Why is music therapy harmless, especially if it's been shown to have measurable heath effects? And how can I tell the difference between an actual music therapist whose treatment is based on established practices, and some guy with a blindfold, some headphones, a nice couch, and an mp3 player? Rely on my for-profit insurance company to do that for me, when they have a conflict of interest as well?

Yes, it's difficult to gauge the effectiveness of regulation, especially because you can't tell if what you got for $5,000 in regulation might have been just as effective as if it had cost $500. But arguing that the choice of whether or not to regulate comes down entirely to cost is kind of absurd.

> But arguing that the choice of whether or not to regulate comes down entirely to cost is kind of absurd.

But this isn't what was argued. From the post you replied to

> For example, if hairdressers are licensed due to questions of sanitation, perhaps the same benefit -- or more benefit -- could be achieved through periodic health inspections rather then licensing individual hairdressers.

Regulation has many forms. Licensing is only one of them.

Most hairdressers are independent subcontractors. The license is the only handle the regulatory system has on them short of criminal proceedings.

Perhaps the 1400 hour instruction requirement could be cut down to 20 hours, and the licensing could remain to give health inspectors a registry of who to inspect?

Something like that would be the approach if the goal were to use regulations to maintain good hygiene without imposing undue costs on young people hoping to get into the industry. If the intention of the license is to keep others out of the field of work though, 1400 hours of instruction would be the approach taken.

> What harm can unethical application music therapy cause?

For that matter, what about retail clerks? They could defraud their customers or steal from their employers. We could license them too. Farmers workers could contaminate food. So could restaurant workers. Janitors who fail to clean properly could allow disease to spread. Groundskeepers operate dangerous equipment. News reporters could misreport the news. Priests could give bad advice -- or worse. To say nothing of legislators.

Just about anyone could screw up their job with severe consequences. So why do we license the people who cut your hair but not the people who make your food? It makes no sense. And before you conclude that the answer should be that we license people who make food, consider the consequences for people who would no longer be able to afford food. (Or a medical care, or legal services, or to have a working toilet.)

The more important something is, the more important it is that we don't price people out of being able to afford it.

>>but the vast majority of licensed occupations are licensed because bad shit happened when they weren't. Doctors were quacks. Bridges fell down. Buildings caught fire. Planes fell from the sky.

You repeat this as an article of faith. Do you have any evidence that licensing increased safety?

If yes, do you have any evidence that the increase in friction for those wanting to enter a field of work incurred less social costs than the risks alleviated from the occupational licensing?

If you're going to massively intervene to restrict economic interactions between consenting adults, at the very least you need a comprehensive, well-sourced argument for the net utility of such restrictions. I've personally never seen such a case made for the centralization approach.

It's all just repeating a narrative as if it's self-evident it's true, which is not giving things as complex and impactful as economics and the laws that govern us the respect they deserve.

> Calculating only the cost is useful information.

> It points out that there is a very large cost which is an opportunity for optimization.

Two things, one: why does everything need to be perfectly optimized? And two: You're assuming that intangible benefits aren't useful. Is money all that matters?

> Andrew Wimer works to make the case for economic liberty, free speech, private property rights and school choice in the court of public opinion.

This is also a politically charged study and this guy has an axe to grind. Sure, tear down everything that protects people from quacks and charlatans - that's the American Dream, after all.

> If you make an extra $5000 but have to spend $5500 in time/money related to keeping your license, you're not making $5000 more, you're losing $500.

I don't see why there's this concern about $500 of inefficiency, this isn't an optimization problem. The benefits to licensing are intangible.

>>Two things, one: why does everything need to be perfectly optimized?

Any sub-optimization is wages, quality-of-life, scientific funding, etc that is being foregone.

>>Sure, tear down everything that protects people from quacks and charlatans - that's the American Dream, after all.

Reputation markets are extremely effective at protecting people from quacks. In any case, to some extent, people have to take responsibility for their own consumer choices. They shouldn't have market choices taken away from them for their own good, by a paternalistic government/voting-base. That's not how a healthy/free society is governed.

The reason why paternalistic centralization isn't functional is that those very same quacks can exploit the public through licensing. They can make false appeals to safety and claims of benefits to argue for highly restrictive licensing rules that cost society far more than they provide in the way of safety, just so that they can enjoy wages inflated from suppressing competition.

Then fighting quacks becomes a political process requiring an election win, and that is all-or-nothing (either you get the quack's representative voted out, or you don't), and doesn't allow the incremental, parallel improvement possible through a decentralized market consisting of millions of consumers making independent consumer choices not subordinate to a single regulatory agency wielding monopoly power.

"Reputation markets are extremely effective at protecting people from quacks."

You mean like vote totals on Reddit, or StackOverflow points?

I believe, based on the contexts I've seen the term used in, that a reputation market just means the competition created between market providers to gain a better reputation than each other, due to the competitive advantage that having a superior reputation provides. There doesn't have to be explicit quantification of reputation, like Reddit/StackOverFlow points, to qualify as a reputation market.

Reputation obviously has a huge impact on market success, and this effect leads to high quality providers dominating the market overtime.

Probably the best example of this dynamic is eBay. The vast majority of trades are not fraudulent, because consumers rely on the seller ratings as indicators of reliability. Most top sellers have something like 99% positive ratings. The market is pretty much totally unregulated, yet very reliable.

That works for ebay because it is very simple to determine if you got the result you wanted.

Case A: You get the correct product, it is working. Case B: Didn't get product, doesn't work, etc...

A gets +1, B gets -1. Simple to judge for 99% of people.

More complex things, like medicine or law or even wiring electrics in a house, the consumer is completely incapable of determining if the service they got is good, because they don't understand it well enough to judge.

This is why reputation systems won't work for anything more complex than ebay. Studies already show doctors get judged mostly by how nice they are. Sure, a reputation system might help you find the nicest doctor, but that isn't whats important right?

This is a common argument for having government take over, but it's unsubstantiated in my opinion.

For example, an automobile is an extremely complex product where the outcome of a purchase takes years to materialize, and yet we have highly developed market-based mechanisms for ascertaining the quality of automobiles.

Bottom-up decentralized processes disseminate correct information very efficiently. Wikipedia would be a good example of that. Anyone can quickly find a reasonably good answer on almost any issue, of any level of complexity, using a Google search to return the top Wikipedia page on it.

>>Studies already show doctors get judged mostly by how nice they are.

That doesn't tell us much. The quality of doctors may already be assured by the overly stringent licensing process, and price is made a non-factor by insurance/government coverage, so consumers look for signs of empathy, as its the only other relevant variable and the only one that they control.

While there's no indication that reputation markets don't work, there's plenty of evidence that government take-over of industries turns out just as classical economic theory would predict: disastrously.

One major case is healthcare: in every developed country over the last 50 years, government regulation and control of healthcare has massively increased, and this as corresponded with substantial increases in healthcare expenditure as a percentage of GDP.

In the US for example, the number of hospital administrators increased 3,200% between 1975 and 2010, compared to a 150% increase in physicians, and this increasing inefficiency is due to an increasing number of regulations:

https://www.athenahealth.com/insight/expert-forum-rise-and-r...

> Two things, one: why does everything need to be perfectly optimized? And two: You're assuming that intangible benefits aren't useful. Is money all that matters?

Intangible benefits are difficult to quantify, but that's no excuse for assigning their value as infinity and assuming they justify any cost. Or for wasting resources unnecessarily.

You could try to estimate the intangible value in QALYs or some other made up thing, but it's usually best to just estimate it in monetary terms, because money is fungible and well-understood. If you lose $5000, that's $5000 you don't have to spend on fighting climate change or education or cancer research or whatever other productive use it could have been put towards if you hadn't wasted it.

And if you get $5000 in intangible value by spending $4500, you're still wasting $4000 if the same intangible value could have been produced by spending $500.

> perhaps the same benefit -- or more benefit -- could be achieved through periodic health inspections rather then licensing individual hairdressers

Inspections with out a license would be unenforceable. If they fail an inspection, you revoke their license, requiring them to shut down. If there is no license to revoke, there is nothing stopping them from continuing to operate.

I think the difference is between a license that requires you to drive down to the statehouse with $50 and a valid state ID vs. a license that requires you to pass the tests at the end of an 8 week course held once every other year that costs $40k.

Calculating the costs without analyzing all of the pros and cons means not actually calculating the costs. It is borderline dishonest.