Interior Design Cartel's Attack on Economic Liberty

Clark Neily, Senior Attorney @Institute for Justice

The Cartel’s Attack on Economic Liberty

For as long as there has been government, private industry groups have sought to manipulate the levers of power to promote their own selfish interests.  In medieval Europe those efforts gave rise to the guild system; in England, they led to Royal monopolies on the sale of everything from wine to playing cards.  Indeed, government-backed monopoly power was actually among the causes of the American Revolution; for example, the famous Boston Tea Party was actually a protest against a Royal monopoly granted to the East India Company on the importation of tea to the Colonies. 

In throwing off the yoke of British rule, among the Founding Fathers’ goals was to substantially reduce the ability of government to play favorites in economic affairs, as the British government and corrupt local officials had been doing.  The same is true of the Fourteenth Amendment, which was added to the Constitution following the Civil War with the specific purpose of securing key civil rights—including economic liberty—to all citizens, particularly newly freed African-Americans, whose ability to earn an honest living was nearly destroyed by the infamous Black Codes of the time. 

Simply put, the US Constitution was written with economic liberty very much in mind and was, at least until the advent of the New Deal in the mid-1930s, enforced consistently with those ideals much of the time.  With the advent of the New Deal, however, courts adopted an attitude of complete deference to legislatures with respect to economic regulations, refusing to apply any meaningful level of scrutiny to laws affecting people’s ability to earn a living.  As a result, private industry groups like ASID became quite adept at dressing up blatantly anti-competitive licensing laws in the garb of the public interest, which they were able to do without any actual evidence only because courts stopped requiring evidence in cases involving economic regulations.

That point is vividly displayed by the various interior design cases we have litigated so far, including Florida, in which states have unanimously been forced to admit that there is not a shred of credible evidence to support the idea that the unlicensed practice of interior design presents any genuine public welfare concerns.

Of course, in making that concession, the states are only admitting what is obvious on the face of the laws themselves (both enacted and proposed), which are so riddled with inconsistencies, contradictions, and omissions that even a child could see how utterly absurd their proponents’ health and safety arguments are.  To take just one example, in every state we litigated in so far, it has been the case that the vast majority of state-licensed interior designers were “grandfathered-in”—i.e., given a license without meeting any of the supposedly necessary “three Es” of education, experience, and examination. Incredibly, not one of those laws contains any requirement that interior designers who obtained their licenses through grandfathering disclose that fact to potential customers to prevent them from being misled about the licensee’s true qualifications. 

Simply put, every occupation eventually develops a faction of insiders who decide to seek government protection from would-be competitors through occupational licensing.  And every one of those occupations—from florists and casket sellers in Louisiana to African hairbraiders in California—dreams up some argument about how dangerous it is for unlicensed people to do their job.  And the one thing they always have in common—including emphatically the pro-licensing interior design crowd – is a total inability to support their assertions with any credible evidence.  The fact that they can sometimes sell their snake oil claims about public health and safety to a bunch of credulous legislators or disengaged judges certainly does not mean there is anything to those claims and if you look at the interior design cartel’s recent track record, what you see is that the vast majority of legislators and judges aren’t buying the cartel’s bogus health and safety arguments.

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