Capitalism And Freedom

Friedman notes that the demise of the medieval guild system contributed to an expansion of freedom in Western society. In the United States of the mid-19th century, people could pursue any profession, a fact Friedman attributes to the “triumph of liberal ideals” (137). He sees modern-day occupational licensure as a step backward.

Like guilds and castes, licensure keeps employers from hiring certain people for an occupation. Unlike guilds and castes, licensure is enforced by the government. Friedman argues that the impetus for creating licensing rules and bodies usually comes from the wrong source: individuals in the profession seeking licensure. Licensure provides them with a clear economic benefit. Friedman says it “frequently establishes the medieval guild kind of regulation in which the state assigns power to members of the profession” and worries that this setup allows arbitrary factors to enter the decision-making process (141). He also complains that licensure proponents invoke paternalistic claims that individuals outside the profession need to be shielded from their own ignorance. Friedman thinks people are capable of choosing professionals to meet their needs and that subpar practitioners will be edged out of the market by better alternatives.

Friedman argues that “producer groups will invariably have a much stronger influence on legislative action [.