Day By Day© by Chris Muir.

Wednesday, April 06, 2005

Government bureacracies as vehicles for private spite

If you click here, you'll find yourself at a fascinating John Stossel argument about a fabulously successful corn-row braiding business that took on and defeated a government bureacracy that was trying to run it out of town for failing to fulfill timely and expensive licensing requirements that had nothing to do with the business' work. It's a great David and Goliath story, but why I specifically noticed it was this line, from the hair salon's owner:

Uqdah thought he understood why the cosmetology board wanted to shut down his salon: "Money — other salons don't like the competition." I think he was right. Even if licensing boards intend to protect the public, in time they are captured by the people who care most. Who cares most? Not consumers — you don't get your hair done that often, and even if you did, you don't care enough about it to want to join a regulatory bureaucracy. Innovators don't join the boards; they're busy innovating. Scientists, economists, doctors, and others with genuine expertise in safety and commerce don't join the boards, either. They're busy doing more important things. So boards are usually captured by the licensees, the established businesses. William Jackson, a former member of the Washington, D.C., Cosmetology Board, admitted, "The board, 90 percent of the time, are salon owners."
Last year, I worked on a case where the local government had six of its people working (it seemed) full time to put out of business a man whose customers were satisfied and whose product, while initially cutting edge, was fully vindicated both in marketplace and the world of science. It was patently clearly that the government was acting at the behest of his competitors, who missed that cutting edge, and sought other ways to undermine his success. The government's motive was less clear but, I think, it was simply the attack dog mentality. Once the competitors waved that hunk of red meat over my client, the government prosecutors were blinded to common sense, logic, human kindness, market reality, whatever. They're paid to attack, they're paid to enforce often petty, unrealistic rules, and they did.