I was reading through the whirlwind of discussion that my post last week on "Joe the Plumber" set off, and I noticed that most readers were in agreement about one point: I am dead wrong about licensing.
Here's a good example from commenter "Ol' Whip":
Yes it does matter. It is an outside certification that he actually knows what he is doing and won't cause your house to flood, your sewage to back up or your boiler to explode.
Lot's of folks can change a light bulb but I sure don't want them claiming to be electricians and working on my house.
With all due respect to my esteemed readers, I just find this argument perplexing. It doesn't square with my personal experience of how consumers try to make sure they are buying quality service—and I'm guessing many other people have similar experiences.
Of all the ways of demonstrating to consumers that they will get their money's worth when buying a service, government licensing seems like the LEAST important by far.
It seems to me that people are much more likely to ask for recommendations from friends or family or look for businesses with nice ads in the local paper long before they worry about who passed what tests set by the local or state government.
What's more, consumers' ability to weed out the bad businesses from the good is being enhanced all the time by the Internet. Yelp.com, for example, has proved to me to be a very useful tool at finding feedback about local businesses.
I don't expect to persuade everyone, but I think people should consider all the ways that the market can enforce its own quality control before we jump to the conclusion that we need costly licensing laws.
Carl Schramm has more about how the "Joe the Plumber" story illustrates why we need more risk-taking in our economy, not less.