The Myth of Licensing and Certification
January 26, 2004
by David B. South
Does licensing help or hinder? I submit it dramatically cuts innovation and often gives the consumer an innaccurate impression of a vendor or contractor.
 David B. South, President of the Monolithic Dome Institute |
It has become the standard theory throughout the ages and even more so in our day and age to only let people with "specific qualifications" perform an activity or service. This is done through licensing.
Licensing comes from the guilds which selectively taught adherents how to do certain activities. For example, the Medicine man taught his disciples so only they could dispense medicine or only a licensed plumber can do the plumbing because he is an expert in such. The theory is that a licensed person will do a better job because they are the only ones trained to do such a job. The fact is, many amateurs are better at the job, but have not deigned it necessary to get the license.
Licensing often degenerates into unions or restraint of trade. The same is true of contractors. Whenever the numbers get large the system often breaks down. The free market always works better. The idea to "let the buyer beware and check credentials and references" will always insure better quality than licenses. Sometimes licensing is instituted because we do not have the time or desire to check on the workman in question. Licensing leaves people that are "licensed" doing business when they shouldn't. There is rarely a *sunset provision to licensing.
Also, consideration should be given to who is doing the licensing. If it's a government agency it can claim no responsibility. Therefore, graft for licenses can and often creeps into the system. For instance, I know one foam contractor who was told by the building inspector that if he would write a check for $5,000, he would give him a license. Otherwise he would have to go through the state system which would take three months and several thousand dollars. So, the contractor gave him the money. That is what you call wide-open graft. No moral checks are done. Crooks get licensed the same as the honest man. The Better Business Bureau is far better at identifying the "bad guys" than any licensing system.
Certification programs often give a false sense of security. Unless the organization doing the certification will actually stand behind the actions of the certified, the customer has no place to turn if there is a problem. Again, there is no way to weed out the "bad guys." Under no circumstance can a private party certify another without control and remuneration. All certification does is tell us that on a certain day under controlled conditions someone did a proper job. It does not tell you that he can ever do it again or will always do it again - properly.
If a certification is given an implied warranty or guarantee goes with it. For that reason they are usually given by sue-proof entities and as such, give very little protection. I am personally against both licensing and certifying. They both give a false sense of security and create a restraint of trade. However, it would seem there are some professions that probably need licensing, where life safety is involved.
Any licensing program must have a tremendous amount of on-the-ball oversight, or it becomes little more than a union. E-bay has developed a system where their constituents are graded by those they work with or serve ? putting the responsibility of checking references and credentials on the buyer where it belongs.
* "Sunset Provision" is a term used to denote that a law or registration ends at a certain time.
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