The conservative approach to criminal justice:
fighting crime, supporting victims, and protecting taxpayers.

Regulatory Capture and the Story of Jestina Clayton

| June 19, 2012

Jestina Clayton, in many ways a paragon of the American Dream, is facing criminal sanctions for providing a beneficial service to the citizens of Centerville.

From the website of the Institute for Justice:

Jestina Clayton, a college graduate, wife, mother of two and refugee from Sierra Leone’s civil war, has been braiding hair for most of her life.  Now she wants to use her considerable skills to help provide for her family while her husband finishes his education. But the state of Utah says she may not be paid to braid unless she first spends thousands of dollars on 2,000 hours of government-mandated cosmetology training—not one hour of which actually teaches her how to braid hair. In the same number of class hours, a person also could qualify to be an armed security guard, mortgage loan originator, real estate sales agent, EMT and lawyer—combined.  Such arbitrary and excessive government-imposed licensing on such an ordinary, safe and uncomplicated practice as hairbraiding is not only outrageous, it is unconstitutional.

However, unless the statute is overturned, Ms. Clayton could be found guilty of a Class A misdemeanor, punishable by a fine of up to $1,000. Ms. Clayton would also have a criminal record.

This appears to be a textbook example of overcriminalization, where victimless regulatory violations are inappropriately punished through the criminal law. Why is providing a service, which is beneficial to both the provider and the consumer, a crime? The answer is regulatory capture. The New York Times recently detailed Ms. Clayton’s situation and the underlying problem of regulatory capture.

From the article:

It didn’t take long for professional groups to find that they also stood to benefit from [occupational licensing] regulations. Over the years, more and more started to lobby for licensing rules, often grand­fathering in existing professionals while putting up high barriers to new competitors. In fact, businesses contorting regulation to their own benefit is so common that economists have a special name for it: regulatory capture. “Everyone assumes that private interests fight like crazy not to be regulated,” says Charles Wheelan, who teaches public policy at the University of Chicago. “But often, for businesses, regulation is your friend.”

. . .

This is the pattern that creates regulatory capture — the people with the biggest stake in any regulation are usually the ones who are being regulated. When there’s a public hearing on, say, implementing new rules for trading derivatives, most of the people who show up are the people who trade derivatives. And these people, who generally know the most about trading derivatives, can use their expertise to try to create rules that benefit themselves. In the high-school-­civics model, the insiders would be countered by smart, well-informed opponents who could argue for the public interest. But real life has nothing to do with high-school civics.

The Institute for Justice also recently conducted an in-depth study on occupational licensing, titled License to Work: A National Study of Burdens from Occupational Licensing. The study can be found here.

Share

RIGHT ON CRIME is a national campaign to promote successful, conservative solutions on American criminal justice policy—reforming the system to ensure public safety, shrink government, and save taxpayers money. By sharing research and policy ideas and mobilizing strong conservative voices, we work to raise awareness of the growing support for effective reforms within the conservative movement. We are transforming the debate on criminal justice in America.

www.scriptsell.net