Judge Judy

August 17, 2010

“I have never met a socialist who wanted the kind of society that I think socialism would produce.”

-David Friedman, The Machinery of Freedom

Today I learned that Judge Judy is not a real judge, but rather an arbitrator. It makes sense, when you think about it. Anyway, while I was learning that, I read an article by a professional arbitrator about how the depiction of the arbitration process on the Judge Judy TV program was doing harm to the image of arbitrators and giving Americans a skewed sense of how the American legal system really operates. The article I read concluded by saying that Judge Judy and similar programs should be subject to stricter federal regulation.

Hearing calls for regulation, the typical response from economists is to impugn the motives of those who advocate it. It is, after all, a fact that the licensing requirement for doctors reduces the number of practicing doctors and raises the salaries of current doctors. A rational and self-interested doctor would thus advocate stricter licensing requirements, making sure that no one could compete with him and force him to lower his prices.

Like I said, those are the economic facts about licensing laws. Still, it does not survive my own introspection to say that most professional who advocate regulation of their profession are doing so for selfish reasons. I believe that most doctors really are concerned that if unlicensed people are allowed to provide medical care to people, many of their patients will suffer unnecessary problems caused by low-quality care. I think that unions who lobby for a higher minimum wage (thus excluding their competitors) really are worried that workers will not be paid a “fair wage” in the absence of such legislation.

If people really were as self-interested as some economists think, there would be nothing for economics education to do. The AMA knows what licensing does and how its members benefit for this legislation, and thus there is no way they will ever want to change it. One of my goals in communicating about economics is to try to convince people that the laws they think are good and necessary actually have consequences that no one intends.

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