By Graham Peterson
From one perspective, people should hate doctors and lawyers just about equally.
- Doctoring and lawyering both train people in a dubious set of skills (many confess learning what they actually needed on the job).
- They both benefit from professional organizations (cartels) supported by government licensing, that restrict entry.
- Those entry barriers drive up fees that are already astronomical because people who come to doctors and lawyers are desperate.
- They are two of the oldest professions, and old professions have a way of sneaking a lot of country club privilege into their proceedings.
In my view these are all reasons to have a pretty foul taste for both groups. Now, they both provide a range of incredibly important services, and I think in any world they would command disproportionately high fees — saving people from jail and death is a big deal.
But consider that their importance gets used to justify the bulleted list of unnecessary (and actually damaging) institutional accoutrements above. Competition among service providers, plainly, improves quality of those services. Where, then, would we want lots of competition in society? Doctoring and lawyering (and teaching). Who cares if some knave has a monopoly on bubble gum? We should be concerned about monopoly on health and legal care.
But these people argue that competition would actually degrade the average level of their services, and doctoring and lawyering are too important for that!
On its face, this argument is persuasive. Both intuition and experience show that the marginal entrant to a market is often times worse at what she does than the incumbent. The marginal entrant is a hack. Hacks charge less, and take away the marginal customer, who doesn’t care for top of the line service. So for many, it looks like professional cartels are in the interest of idiots who would otherwise go buy services from a second string newbie.*
But consider two objections here. First, would billions of people be better off if Sears Roebuck had been granted a monopoly on the department store market in order to protect toaster buyers? Or are we doing just fine now that Walmart, Target, and Nordstrom’s have segment demand into people who just want a $10 toaster, $30 slick looking toaster, and $150 deluxe stainless steel toaster oven?
A gradient of quality of products is completely appropriate in almost every case. If you don’t believe the argument applies to medical care, I dare you to tell it to a broke parent who flew their child to Mexico to have a life saving surgery.
Second, new entrants don’t just provide hack versions of products: most new entrants in fact provide new products and services, or provide the old products and services in a new, more efficient way. Cartels do not promote innovation because they do not benefit from it. In fact they’ve been known to deliberately stifle it. One of the most famous cases of successful planned obsolescence was a result of a cartel in light bulb manufacturing.
So like I said, people should really hate both doctors and lawyers for stifling innovation, forcing people to buy unnecessary services they don’t want, and raising prices — in two of the most important markets there are.
But why do people, nevertheless, feel like doctors are heroes and lawyers are snakes?
Well, doctors save people from nature, God, bad luck — and lawyers save people from other people. No doctor is required to take nature’s side and argue that her harms are fair; the question is already settled that you don’t deserve to die. The case is opposite with lawyers: for every defense lawyer their is a prosecuting lawyer, and prosecuting lawyers give lawyers a bad name.
So people don’t hate lawyers because of their stupid and harmful professional cartel. And they don’t hate doctors for their cartel either. But they ought to.
*This argument is currently popular among journalists and academics who are very nervous about all of the new entrants to the intellectual marketplace.