|Aaron Rounds Barbershop|
He decided to take the first step toward living his dream by turning his garage into a barber shop. Since he cannot charge money for his services he is settling for cutting hair for family and friends on the weekends and saving up any donations until he can afford the government license. Good for Mr. Round, a man passionately committed to his dream and who is willing to take strong measures in pursuit of that dream.
It should be apparent, however, that what stands between him and his dream is the state. There is no good reason for the government not to allow Mr. Round to use his garage and barbering supplies as he sees fit. Anyone who is willing to voluntarily pay Mr. Round for a haircut demonstrates that he values his service more than the money and Mr. Round would value the money more than the service. Who gets hurts by this arrangement? No one. Both parties benefit. It is clear, therefore, that government intervention in this market is reducing the number of haircuts available to the general public. By artificially reducing the supply of hair cuts, the price of hair cuts is being kept artificially high as well. Such regulation is socially destructive.
Some might argue that government licenses in the barber industry helps maintain a uniform standard of high quality and safe hair cuts. If that was the real motive for the regulation, however, why is cutting hair for free legal? Why is Mr. Round legally able to give potentially bad hair cuts away for free? Murray Rothbard cogently recognized that the economic purposes of such government licenses is to restrict competition, thereby giving established firms special privilege. In his Power and Market he writes:
How much these requirements are designed to “protect” the health of the public, and how much to restrict competition, may be gauged from the fact that giving medical advice free without a license is rarely a legal offense. Only the sale of medical advice requires a license. Since someone may be injured as much, if not more, by free medical advice than by purchased advice, the major purpose of the regulation is clearly to restrict competition rather than to safeguard the public (p. 1097).