A decade ago, dentists in North Carolina were growing fat on the fees they earned for whitening teeth, so they weren’t thrilled when non-dentists started offering similar products and services at cut-rate prices. Luckily for licensed dentists, they controlled most seats on the State Board of. Luckily for licensed dentists, they controlled most seats on the State Board of Dental Examiners. Beginning in 2006, that board sent out threatening letters to dozens of insurgent teeth-whiteners and succeeded, according to court papers, in driving these businesses out.
Cases like these follow a timeworn pattern: Established industries spot competitors on the horizon and prevail upon the government to quash them. In Utah, state law demanded that an African hair braider obtain 2,000 hours of cosmetology training before practicing a craft she learned as a child. In Louisiana, the horticulture board required flower arrangers to pass a licensing exam, and the funeral board went after monks who wanted to sell low-cost caskets.
Fortunately, it just got a little harder for well-connected industries to hijack government regulation for their own ends. Last week, the Supreme Court found that the North Carolina board had violated federal antitrust law; the board, the court concluded in a 6-3 decision, was so little supervised by the state that it was basically freelancing.
The little-noticed decision could prove to be a sleeper. Even the dissenters saw that the dental board was serving dentists’ interests, not the public’s. If courts take a more skeptical approach in similar cases, everything from taxi medallions to licensure exams in a host of professions could come, and should come, under withering scrutiny.
The most florid tales of licensing excess, including the Utah and Louisiana cases, come courtesy of the Institute for Justice, a public-interest nonprofit that’s been fighting such rules for years. The group now represents teeth whiteners in Connecticut, Georgia, and Alabama, and it’s advancing a powerful and far-reaching theory: Licensure rules that exist mostly to insulate special interests from competition are an unconstitutional hindrance on Americans’ right to make a living.
In a more innocent era, customers might have heeded a dentist’s warning against unlicensed teeth-whiteners. Today, people don’t spook as easily. The hotel industry thinks it’s unsafe to rent from amateur innkeepers in faraway cities, but travelers keep booking rooms on Airbnb. Taxi medallion owners warn about unregulated car hires, but UberX customers are still getting into vehicles driven by strangers.
Far from eroding unneeded licensing rules, though, rapid change in the economy may be encouraging their proliferation. As established professionals watch profit margins thin, many of them welcome measures that prop up wages and fend off competitors.
One way to fight inequality is to lift the barriers that keep people from working. One way to limit regulation is to put the burden on licensing boards to justify their rules.
Dante Ramos can be reached at email@example.com.