“As I use the term,” she explains, “a professional license is a government-granted right to perform a service that can be obtained only through a significant investment in human capital, usually in the form of education and examination.” According to Allensworth, “we licensed only a handful of occupations” in the 1960s, but now we license “about three hundred professions.” Using her definition of a professional license, she estimates that “almost 20 percent of American workers, or nearly thirty million, must hold a professional license to do their job.” The growing prevalence of occupational licensing motivates her explanation and critique.

Licensing boards / Occupational licensing comes into existence when a state legislature passes a law requiring a license to practice some profession. Practitioners lobby for the law; consumers do not. Legislators pass the law without vigorous debate. “Perhaps the most important thing that a state licensing law does,” the author claims, “is establish a board to oversee the nitty-gritty of professional regulation.” The “nitty-gritty” involves “the power to interpret licensing statutes, create ethics rules and other regulations that have the power of law, and decide individual cases for application or discipline.”

Most board members are practitioners. Common sense suggests that practitioners are best suited to determine best practices. Allensworth, however, emphasizes the problems that stem from boards that consist mostly of practitioners. Professional associations heavily influence boards without necessarily considering the public interest. Practitioners may disdain the thought of an alternative model where they are overseen by “bureaucrats” and “regulators.” “But at least in theory,” the author argues, “full-time state employees have what virtually no board member has: regulatory expertise, the ability to collect and analyze relevant data, and, perhaps most importantly, time to dedicate to the project.”

Allensworth is especially troubled by what she calls the “ratchet” of increasing occupational standards. Boards set standards low at first and then raise them over time. Take the author’s example of alcohol and drug counselors in Tennessee. At first, the state’s Board of Alcohol and Drug Abuse Counselors set the standard for new counselors at 1,500 hours of “supervised practice.” Over a period of 30 years, the board increased the standard to 6,000 hours. That’s quadruple the initial number of hours, and at 40 hours of work per week for 50 weeks of the year, is equivalent to three years of work. Other ways boards increase licensing standards are by increasing fees to take qualifying tests, requiring more “ethics and other practice rules,” and requiring more courses.

Constraining supply / Allensworth, thinking like an economist, equates occupational standards to “barriers to entry” that reduce the supply of a service and raise the price. According to the economists she cites, “licensing reduces the number of providers in a profession by somewhere between 17 percent and 27 percent” and raises the price of services by 10 percent. Yet, the effect on the quality of service is ambiguous.

She summarizes “the libertarian position” on licensure as follows:

Professional licensing keeps out too many workers, innovators, and new forms of competition. Licensing is a web of “red tape,” raising impenetrable entry barriers and reducing economic freedom and entrepreneurship. Libertarians argue that it excludes safe, competent providers and keeps licensees from fully competing with one another. The losers are the consumers who pay too much for professional services—if they can get them at all—and the millions of workers who can’t practice their trade without fear of governmental sanction. The winners are the professions themselves.

Her summary is accurate. Again, she uses Tennessee to put faces on individual workers who lose. The state’s Board of Cosmetology and Barber Examiners rebuffed Omar Mahmoud because, though he was licensed to cut hair in Michigan, he failed “an English-only written test on the theory of barbering.” The board also denied hair braider Fatou Diouf when she tried to convince them that the cosmetology course requirements and exams were unnecessary for her work and that unlicensed braiders did not harm the public. Boards stymie any change that will lower the cost of obtaining a license, increase the supply of practitioners, and reduce the incomes of licensed practitioners. The board rejected Elias Zarate as well after he was fined for cutting hair without a license and petitioned for “help” to obtain a license.

Although Allensworth endorses libertarian views of licensing, she offers a critique. She believes the libertarian view is most appropriate for occupations that tend to have less status, such as barbers. Occupations with more status or higher incomes, such as doctors, arguably deserve more scrutiny—though the current system often gives them the wrong type of scrutiny. In fact, much of her book exposes the negative consequences of occupational licensing by examining medical professions. State medical boards, for instance, do not necessarily recognize each other’s licenses to practice, and they restrict what nurse practitioners and physician assistants may do. “Thanks in part to a broken licensing system,” the author states, “we don’t have enough providers in normal times, let alone in a public-health crisis.” She blames licensing for worsening hardships during the COVID crisis.

Protecting bad professionals / Allensworth writes that “the problem with licensing in America isn’t always that we have too much regulation. Sometimes, we don’t have enough.” Licensees are supposed to be held to high professional standards, but boards often fail to oust incompetent, even “dangerous,” providers. Allensworth shares several shocking stories about licensed health care providers in Tennessee: Dr. Michael LaPaglia sold controlled substances from his residence, committed fraud, and illegally prescribed drugs. He was initially suspended, but the Board of Medical Examiners “reinstated” his license. Christina Collins, a nurse, “prescribed one patient so many controlled substances that he would have to have taken fifty-one pills a day.” The Board of Nursing chose not to discipline her. According to some patients, Dr. Russell Stevenson is “a caring, available doctor” with other qualities. “Prosecutors,” however, “showed that the doctor regularly prescribed patients almost twenty times the threshold dose that the [Centers for Disease Control and Prevention] says presents a significant overdose risk.” Although the Board of Medical Examiners disciplined him, he continues to practice and write prescriptions. And there are more disturbing cases.

Allensworth’s evidence that boards fail to police bad actors is not just anecdotal. She reports that even when Tennessee’s Board of Medical Examiners had evidence of doctors engaging in “sexual misconduct,” the board allowed two-thirds of them to keep their licenses. In situations involving fraud and situations involving reckless prescribing, the board allowed a similar share of doctors to keep their licenses. And Tennessee is not the only state to go easy on misbehaving professionals.

Boards fail to discipline bad practitioners for many reasons. Allensworth argues that, for one, boards are underfunded, limiting their activity. Also, they do not take it upon themselves to look for bad actors; they passively wait until they receive a complaint. Consumers often do not report bad practice because they do not recognize it, or the practitioners have co-conspirators who help cover up, or the consumers doubt they will prevail, or they fear retaliation and public embarrassment. Also, fellow practitioners and police officers are often reluctant to report misbehavior. If complaints are made, the practitioners can employ cunning lawyers who often prevail in board proceedings that are “low-information and non-adversarial.” Board members show a great deal of sympathy toward their fellow practitioners, refrain from “second-guessing” their judgment, and often seem unsympathetic to complainants. Finally, special interests adversely influence boards. Purdue Pharma, maker of the opioid OxyContin, altered standards for prescribing in ways that encouraged more prescribing. Allensworth reckons, “Purdue’s confidence game would not have worked as well as it did if we had had functional agencies to regulate doctors and prescribing nurses that didn’t need to take money and advice from the pharmaceutical industry itself.”

Reform / Readers who see that licensing trounces an individual’s right to work will appreciate the efforts of the libertarian-leaning public interest law firm Institute for Justice (IJ). “At the center of IJ’s reform strategy,” Allensworth tells us, “are its high-profile lawsuits against state governments alleging that the fit between a licensing law and public protection is so poor as to render it unconstitutional.” She applauds IJ’s work for exposing absurd rationales for licensing. For instance, “the state of Louisiana was forced to argue that licensing florists helped prevent infection from misplaced floral wires and potentially disease-carrying soil.” Similarly, legal maneuvers by IJ and others prod legislators to require that board members defend their rationale for licensing in public on a regular basis. Nevertheless, Allensworth views the current state of progress as inadequate. Legislators are not tackling the problems with boards, nor are they attempting to reform higher-status professions in law and medicine.

Allensworth offers her own strategy for reform. To begin, she would have us assess whether the market process itself can regulate professional service. Only if the market is incapable would she consider a government role. One role is “codified regulation,” whereby government officials mandate best practices and monitor compliance. Employees who work in child daycare, for example, would be required to place babies on their backs in cribs; officials would monitor compliance with routine visits to daycare centers.

If we recognize how well markets regulate in many cases and the alternatives to government licensing in others, we will see that licensing is a “last resort.” The author writes: “Professional licensing is only appropriate for work that requires what I will call ‘professional judgment.’ This is the process of applying a complex system of knowledge to an individual case.” Based on this criterion, she reasons that licensing is appropriate for lawyers and doctors.

The author recommends three ways to improve licensure boards. She calls for increased funding so that boards may become “proactive” in their search for bad practitioners. With more funding, she writes, “resources must also be allocated to hiring more staff to follow up on investigations and prosecute cases.” It’s tempting to dismiss her call for more funding, especially when other people (taxpayers) will provide the additional funds. Allensworth responds that failing to reform boards and weed out bad doctors is more costly. “Tennessee alone,” she points out, “has spent billions of dollars to combat an opioid crisis enabled by nonexistent discipline for prescribers.”

Beyond funding, she calls for consumer representation on boards, with a majority of board members coming from outside the occupation. Also, she recommends revamping the operation of boards. Among the changes she suggests is that hearings about professional wrongdoing “should be more adversarial, structured, and guided by clear criteria.”

Currently, no board in any state around the country functions the way Allensworth recommends, with an adequate budget, well-rounded membership, and well-defined rules. She cites the United Kingdom’s oversight of the medical profession as the best example of the way things should be done.

The author can imagine abolishing licensing boards but not licensing. She describes this alternative as “bureaucratizing professional licensing.” Legislators would set standards for entry into an occupation and professional codes of conduct that would be enforced by government regulators. But the author warns that replacing one regime with another may cause adverse, unforeseen developments. For instance, practitioners would be able to influence regulations by influencing legislators.

In his 1962 book Capitalism and Freedom, Milton Friedman deemed the rise of occupational licensing to be a “retrogression.” That is startling if you recall Allensworth’s statistics on how licensure has exploded between the 1960s and today. Friedman would appreciate Allensworth’s explanation and critique of licensing boards, her demonstration of government failure at protecting the public, and her thorough scholarship. Challenging the ways we think about occupational licensure remains high on the list of priorities for a free society.