Control by Licensing over Entry into the Market

Abstract

Much has been said and written concerning the weaknesses of the distributive processes in America. Undoubtedly, economic forces are at play which clog these processes and thereby militate against the efficient functioning of our capitalistic society. That some of these forces are aided and abetted by ill-advised legislation presents, on its face, a sound premise. Legislation inspired by a sincere and conscientious effort to avoid chaos or collapse of our industrial structure may be just as deadly. Whatever be the objectives of these measures, there is today, under governmental paternalism, an ever-growing mass of restrictive legislation operating to close the avenues of entrepreneurship to untold numbers who might otherwise be engaged in productive activity. To criticize or evaluate motives back of this legislation is not the purpose of this paper. That licensing legislation is restrictive no one will deny. That the state must exercise some degree of control over persons and products in the field of commercial activity is also generally conceded. But, whether such restrictive measures are of benefit to the public and are essential to a more orderly economic society is highly problematical. In the alleged interest of the consumer and defended by doctrines couched in such hackneyed phrases as police power, public health, and public welfare, a mushrooming of legislation has spread designed to effectuate governmental supervision and control through licensing over many types of trades, businesses and occupations. Among those now embraced are barbers, plumbers, dry cleaners, watchmakers, tailors, food dealers, and bakers. And, of late, the state legislatures have shown a distinct tendency toward expanding this concept of licensing to include the regulation of product as well as personal competition. The National Industrial Recovery Act unquestionably provided a temporary stimulus for both industrial and commodity types of control through licensing legislation. Its invalidation by the Supreme Court of the United States1 did not serve, apparently, to innoculate the patient against recurring attacks in modified