The Distributional Impact Of Barber Licensing

In the comments to Henry Farrell’s latest intervention into the debate over the need for a “theory of politics,” I note that many people seem primarily to be interested in disagreeing with my public policy judgment. Since I, as Farrell notes, am much more comfortable debating policy specifics than hazy theories of politics I’d rather engage in this. In particular, one thing that came up is the old issue of barber licensing. I see breaking up the barber cartel and increasing competition for barbering services as a progressive measure, because if you reduce the cost of things that poor people buy, you increase their real living standards. A contrary view espoused in comments is that since barbering is a working class occupation, we ought to favor cartelization as a means of increasing working class income.

This, for the record, is exactly what I had in mind when in an earlier post I said that policy ideas need to be “workable.” We need to ask ourselves if it’s actually true that barber licensing is an egalitarian measure. I’m almost certain that it’s not. Clearly, if we restrict entry into the barbering industry what we do is redistribute real income away from the customers of barber shops and to the incumbent barbers. In effect, you’re setting a kind of price floor. But the important thing to note about this is that haircuts are already sold at a wide range of price points. Rich people — the kind of people it would be progressive to stick it to — are not buying the cheapest available haircuts. Indeed, they’re not even close. And there’s little reason to think that the de facto price floor on haircuts is having any impact whatsoever on the price that they pay for haircuts. The people impacted by the haircut price floor are going to be the people shopping for the cheapest haircuts. That, by and large, is going to be relatively low-income people.

But to perhaps gesture at a “theory of politics” issue, I think part of what bugs people about the barber issue is that they’ve developed the implicit view that for progressive politics to succeed we need to raise the social status of “big government,” and that it’s counterproductive to this mission to highlight any misguided “big government” initiatives. It’s acceptable to criticize excessive spending on the military and on prisons, because the conservative critique of “big government” often exempts those institutions. But if conservatives attack “regulation,” then “regulation” must be defended or, when indefensible, ignored. My view is that this is backwards, and that the public is skeptical about supporting “big government” precisely because they doubt that its advocates are invested in ensuring that higher taxes will lead to quality services. Progressive insouciance about the question of whether or not regulations are, in fact, serving the public interest feeds cynicism about the role of the state.