As 2015 gets started, one important story from 2014 we missed is a much-needed victory over crony capitalism in Kentucky. George Will recapitulates the facts of Bruner v. Zawacki, in which a district court judge struck down what is known as a “certificate of necessity” regulation. In this case, the CON regulation required new moving companies to earn a certificate to do business by showing that pre-existing moving firms are “inadequate” and the new company meets a real need. The process for applying for a certificate involved informing competitors about your application, and competitors then often create trouble for the world-be entrepreneurs by filing legal complaints against the proposed company. Will provides some history:
In 1932, the Supreme Court overturned an Oklahoma law requiring any new ice company to prove a “public need” for it, arguing that the law tended to “foster monopoly in the hands of existing establishments”: “The principle is imbedded in our constitutional system that there are certain essentials of liberty with which the state is not entitled to dispense,” including “the opportunity to apply one’s labor and skill in an ordinary occupation.” […]Soon, however, judicial progressivism became deferential to the political class’s conceit that it could centrally plan the present and foresee the future […]Writing in George Mason University’s Civil Rights Law Journal, [Timothy] Sandefur notes that, after World War I, states and cities used CON requirements to cripple taxis, thereby protecting private investments in trolley lines. Plus ça change, plus c’est la même chose.
We’re glad that a judge in Kentucky reached back into 1932 and borrowed from that year the Supreme Court’s common sense. But ridiculous anti-entrepreneurial requirements are pervasive, and there’s much work still to be done. Take, for instance, licensing rules even in professions like hair dressing and floristry. Barriers-to-entry enshrined in regulation are very damaging to young people who need opportunities to succeed on their own, and the sooner these restrictions fall, the better. Read Will’s whole column. We hope to see more victories of this sort in 2015.