On “Bottleneckers” And Occupational Licensing

What’s a “bottlenecker,” anyway?
Dr.

Dick Carpenter, director of strategic research at the Institute for Justice, spoke in Little Rock today about the history of special interest groups, or bottleneckers, who use government favors to restrict competition and drive up consumer costs artificially.

Carpenter’s new book defines the term this way:

A “bottlenecker” is anyone who uses government power to limit competition, thereby reaping monopoly profits and other benefits. Bottleneckers work with politicians to constrict competition, entrepreneurial innovation and opportunity; they limit consumer choice; they drive up consumer prices; and they support politicians who willingly overstep the constitutional limits of their powers to create, maintain and expand these anticompetitive bottlenecks.

Carpenter discussed examples around the country of businesses using government licensing and regulation to ensure a tilted playing field. One of the examples used by Carpenter was the fight between Ken’s Cab and the taxi cartel in Little Rock.

Carpenter said:

There’s a myth about occupational licensing. The myth is that legislators create licenses at the request of harmed consumers and concerned citizens. The truth is that the licenses are created by legislators at the request of those licensed industries. It sounds absurd that anyone would ask for government intrusion into their business. The key is to follow the money. Those asking to be licensed have come to recognize that by restricting competitors or “bottlenecking”…they can artificially inflate prices and wages and therefore enjoy these incumbent benefits as a result (of the licensing).

Unfortunately, “bottlenecking” is alive and well in Arkansas. Hopefully, legislators and taxpayers will pick up a copy of Carpenter’s book and learn about the threat this poses to Arkansans attempting to earn a living.

You can order a copy of “Bottleneckers” here. All proceeds from book sales go to fund the great work of the Institute for Justice.

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