Keynes and Friedman 235reality they are enacted to serve the interests of the members of
the occupational group seeking to preserve their own economic
well-being. Systems enacted to limit the number of doctors
increase the income of those already licensed. The American
Medical Association and the American Bar Association are the
two biggest and most powerful “unions” in America, Friedman
asserts. Their power over who shall be licensed, who may
practice, who may be drummed out of the business, which
colleges and universities shall be allowed to train such practitio
ners, contributes to creating an all-powerful monopoly— to
protect, not the public, but the doctors’ and the lawyers’ eco
nomic status.
Friedman categorizes occupational licensure laws into three
types: registration, certification, and licensure. Registration can
be justified as a control device as a part of the state’s police
powers. Registration of pharmacists to keep accounts of drugs,
or gun dealers to keep records of firearms sales, are examples of
this type of regulation. Certification is less easy to justify, since
the process is and can be done within the private marketplace.
The Good Housekeeping Seal, Consumer Report magazine, and
other independent rating agencies are examples of this process.
There is, however, no justification for licensure. The exclusive
club created by lawyers, of lawyers, for lawyers, assumes that
people cannot choose; someone must choose for them. And then
the lawyers decide that it is they who will choose. Certification
would do the job just as well: a person achieves certain minimal
competency in an occupation and then offers his services to the
public—the market will do the rest.
The ethics of distribution in the free market rests on the
premise, “to each according to what he and the instruments he
owns produces.” Of course, monetary rewards are not the only
standard; some choose to work longer, harder, outdoors, for
money; others choose to work at jobs which provide free time,
travel, or other rewards. To attempt to redistribute income by a
graduated, progressive tax on income without taking into ac
count other than the factors than those which relate to value is not
only wrong, it doesn’t work. People who feel unjustly taxed seek
to create loopholes to avoid taxation. In particular, those who
have the wealth tend not to pay nearly so much tax as those who
are trying to become wealthy. Taxation becomes more a process