My word processing program objects: “bottlenecker” is not a word. But the authors of this book think it should be and I agree. A “bottlenecker” is someone who tries to get government officials to enact laws or regulations that obstruct new competitors from entering the market. Just as the neck of a bottle restricts the flow of liquid, so do such rules restrict the flow of rivals. Occupational licensure is a favorite tactic, but not the only one. This book details the ugly tactics that bottleneckers use to get their way and recounts numerous legal battles that have been waged against them.

The book’s subtitle conveys the big message: people often try to game government for power to exclude competitors, thereby gaining private profit. Those efforts, when successful, drive up costs for consumers and destroy entrepreneurial opportunities for individuals who want to get ahead. It is basic public choice theory that interest groups will attempt and often succeed in getting friendly politicians to minimize competition, but what Bottleneckers does especially well is put that theory into stories sure to hit the mark with ordinary readers.

Authors William Mellor (an attorney who co-founded the Institute for Justice) and Dick Carpenter (director of strategic research there) begin with the dismaying fact that while back in the 1950s occupational licensure was rare with only around 5% of American workers subject to licensing, today roughly 33% of workers face this requirement. Moreover, the ratchet keeps moving upward as more and more groups get politicians to impose licensing. Professional groups often wage multi-year campaigns involving top-notch lobbyists when they want a bottleneck in their field. Initiatives to de-license occupations are almost unheard of.

Scare stories / Consider, for example, the interior design profession. Most Americans would scoff at the idea that anyone should have to obtain a government license to be allowed to work as an interior designer, but to those who are in the business, keeping down the number of newcomers is important. The American Society of Interior Designers (ASID) has been fighting for many years to get state legislatures to enact at least “titling acts” (which prevent anyone who hasn’t passed the required exams from advertising his or her services as “interior design”) or, better yet, “practice acts” (which make it illegal for an unlicensed person to do any work that is deemed interior design). Annoyingly enough, the ASID wheedled a $13,000 grant from the National Endowment for the Arts to develop its model legislation.

With this and many other examples, Mellor and Carpenter demolish the notion that licensing stems from public demand for protection against incompetent or unethical practitioners. The impetus for licensing always comes from the group itself, and one of the standard arguments is that all the group’s members really want to do is protect the public.

The authors tell the story of the push for interior design licensing in Florida, where the proponents argued that tragedies could ensue if unlicensed people were allowed to do their work. For instance, they said, unlicensed designers might use carpeting that isn’t fire-resistant. Indeed, Florida had experienced such a tragedy in a nursing home, but it had nothing to do with an “incompetent” designer choosing the carpeting. Never mind the facts, though—lobbyists won’t let a good scare story go to waste.

Another revealing aspect of the ASID story is how states waste resources in policing their laws. We learn, for instance, that the Florida Board of Architecture and Interior Design hired a law firm to investigate and root out the supposed danger of unlicensed individuals doing design work. The authors write, “Every year, the firm initiates proceedings against hundreds of citizens and businesses both in Florida and outside the state, in most cases for nothing more than simply using the terms ‘interior design,’ ‘interior designer’ or even ‘space planning’ without the board’s permission.” So it isn’t just consumers who suffer from higher prices when they deal with interior designers; taxpayers also suffer when state resources are diverted into nothing more than cartel protection.

Frustrating fight / In each type of bottlenecking they discuss, Mellor and Carpenter describe the legal challenges that have been brought against the laws. Some suits have been successful; others have not. In the battle over interior design licensing, the most conspicuous case has been in Florida, where designer Eva Locke, a Cuban refugee, filed suit against the state’s licensure law. The Florida statute included both titling and practice regulations.

The district court ruled that the titling regulation was a violation of the First Amendment because it prohibited Locke from speaking to people about the nature of her work. But the court also ruled that the practice aspect of the law was legal, despite strong evidence that no public interest was served by restricting interior design work to those licensed by the state. When Locke appealed that decision to the Eleventh Circuit, the result was a depressing instance of judicial deference. The judges said they wouldn’t “second guess the legislature’s judgment as to the relative importance of the safety justifications.” That ruling exemplifies the main barrier to legal action against bottlenecking: the deeply ingrained idea among judges that they should “let democracy work” rather than intervene against patently absurd regulations stemming from one of democracy’s weak spots: its openness to special interest manipulation.

Making a killing / Perhaps the most distressing of the stories Mellor and Carpenter tell is about the funeral industry’s use of licensure to prevent competition that would save people money at a time when they’re particularly vulnerable to pressure. There is a lot of money to be made from the death of loved ones, and the soft-spoken, compassionate people who tell the bereaved that they only want to bring them solace turn into ferocious dragons whenever someone threatens to diminish their profits.

The initial threat to those profits came from the Federal Trade Commission. In 1972, the FTC undertook an investigation of the funeral industry and found that funeral directors routinely pressured families into purchasing high-cost caskets; misrepresented legal, cemetery, and crematory requirements; and even performed services without permission from the family—billing them, of course.

The investigation led the FTC to propound the “Funeral Rule,” meant to restrict unethical practices in the industry. Funeral directors fought the rule with intense lobbying in Congress and legal challenges. Not until 1984 did the Funeral Rule finally take effect. When it did, a market for lower-cost burial goods emerged. To stifle that competitive threat, the funeral industry turned to state regulation. Specifically, they argued that only licensed funeral directors should be permitted to sell caskets.

One man who ran into this regulatory minefield was Pastor Nathaniel Craigmiles of Chattanooga, TN. His Baptist church had mostly poor and uneducated members. After his mother’s death, he discovered how inordinately expensive funerals were and decided to save his parishioners from needing to “mortgage their homes to pay for a decent burial.” He started up a small business selling caskets at much lower prices than what funeral homes in Chattanooga were charging. Craigmiles secured the necessary local business permits, but he didn’t obtain a funeral director’s license because, of course, he wasn’t running a funeral home. Then an official from the state funeral board informed him that without the license, his casket sales were illegal. “You don’t have to buy a car from a mechanic. Why should you have to buy a casket from a funeral director?” Craigmiles asked.

Obtaining the required license was far too costly for him to consider. Instead, he filed suit against the state board, arguing that its licensing rule was an unconstitutional deprivation of his right to earn an honest living. In court, the funeral industry tried to defend the anticompetitive regulation by claiming that it was necessary to protect public health and safety. Craigmiles countered that those arguments were bogus because it was legal for Tennessee residents to use homemade caskets and bodies could be buried without one. The judge rightly saw the funeral board’s arguments as utterly self-serving and ruled that the licensing requirement was invalid.

Astoundingly, once Craigmiles was allowed to resume his business, he found himself threatened with bodily harm, his store windows broken, and his caskets damaged after being delivered to funeral homes. Even after his store mysteriously burned down, he would not give in to the intimidation and instead opened two new stores.

The funeral industry wasn’t throwing in the towel, however. It appealed the judge’s decision against its anticompetitive regulation to the Sixth Circuit. But the higher court was having none of the appellant’s arguments, concluding the Tennessee legislature’s “measure to privilege certain businessmen over others at the expense of consumers is not animated by a legitimate governmental purpose.” That was an example of engaged rather than deferential judging.

Don’t think that we have a free market in caskets nationwide. In other states, the funeral industry has prevailed, thanks to shameless lobbying to sway legislators and deferential judges on other courts. For example, Oklahoma’s identical regulation against casket sales by anyone other than a licensed funeral director was upheld by the Tenth Circuit in 2004.

Conclusion / Other instances of bottlenecking that Mellor and Carpenter cover involve food trucks (where local politicians openly admit they want to protect brick-and-mortar restaurants against competition by imposing rules that prevent trucks from selling food nearby), hair braiding (where stylists who do African-style hair braiding have been forced to get cosmetology licenses even though nothing taught in cosmetology programs is relevant to this hair styling), and street vending (where the interests of small vendors to make a modest living has been sacrificed by politicians who prefer awarding monopoly contracts to big business, especially around sports stadiums).

It’s worth noting that the politicians who aid the bottleneckers include both ostensibly pro-market Republicans and pro-consumer Democrats. Don’t expect any philosophical consistency when interest groups say they’ll support you in exchange for keeping competition out of their business.

Every one of these stories will raise the blood pressure of Americans who believe in free enterprise. As the authors say: “Breaking open bottlenecks is about more than economic growth. It is also about creating a just society built, in part, on the right to earn an honest living free from arbitrary and unnecessary government encroachment.” This is an issue where free market advocates should be able to make common cause with progressives, since both camps presumably dislike the abuse of government for private profit.