We didn't beat the unions just to have the guilds back


This little image ought to seriously worry us all:


It's for the US economy, but the situation here in the UK is similar, and it's drawn from this paper.

Now there's nothing wrong with unions as unions: the right to free association is just as important as the right to free speech. What worried about union power was the ability to collect rents, to unfairly divert income from the populace to those unionised producers. We've, to a large extent, managed to beat that particular problem over recent decades. Yet this has been replaced by the need to have a licence to do so many different jobs and trades:

Our multivariate estimates suggest that licensing has about the same quantitative impact on wages as do unions -- that is about 15 percent,

We've the same amount of rent seeking going on, just in a different manner. No, this isn't an advance. In fact, it's a retrograde step, we're moving back to the world of the medieval guilds, that model of socio-economic organisation that Adam Smith himself so railed against.

I will admit, I'm happy enough with some licensure: that a doctor can prove he's been taught that homeopathy is bunkum works for me even if our current system of licensure doesn't actually manage this. But only a licensed electriction can change a plug or socket in a kitchen? No, this is restrictive practices, rent seeking, just by licence instead of union.

And just as we had a decades long struggle to free ourselves from the rent seeking of the unions we are going to have to go through all this again over those who would reimpose the guild system upon us. Fortunately it's easier this time: we can simply deregulate, abolish the licences and restrictions that allow this theft from our pockets. Perhaps one for the liberals, if not the Liberals, in our current government?