Lee: Rise of the Licensing Cartel

In a Forbes op-ed, Sen. Mike Lee calls for an end to the cartelization of the American workforce by government licensing boards.

Writes Lee:

Should only dentists be allowed to whiten people’s teeth? Or is this a service anyone should be allowed to offer?


This may sound like a silly question at first, but when the deeper question of occupational licensing is applied to the broader economy, it turns out that there are millions of jobs and hundreds of billions of dollars at stake.


Keep in mind that the Food and Drug Administration already regulates teeth-whitening products for safety and that virtually no one has ever been injured by someone administering these products.


But in a number of states throughout the country, dentists began losing teeth-whitening customers to non-dentists who had set up kiosks in shopping malls and were charging less money for the same teeth-whitening services.


These upset dentists then went to their state dental-licensing boards and urged those boards to add teeth whitening to the definition of “the practice of dentistry.” These state boards complied and sent letters to malls informing them that their teeth-whitening tenants (at least those who were not dentists) were in violation of state law and should be evicted. The malls did exactly that. The results were unemployed teeth whiteners, more expensive teeth whitening, and higher profits for the dentists.


This is textbook anticompetitive behavior. An organized cartel (the dentists) restrained competition (limiting teeth whitening to dentists) in a manner that deliberately reduced competition and raised prices. The only twist here is that they used the threat of government punishment to enforce their monopoly.