The Palmetto Insider

The blog of the South Carolina Policy Council

Regulating Businesses to Death

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As The Nerve has reported, there are dozens of state agencies in South Carolina that stifle entrepreneurship and business activity. For instance, chiropractors, cosmetologists, and funeral directors all operate under state licensing boards that restrict entry into those markets.

These boards impose extensive licensing requirements and payment of fees just for the privilege of conducting business in our state.

As indicated in Unleashing Capitalism, South Carolina businesses spend millions of dollars each year lobbying the Legislature for a variety of exemptions and incentives. Or, in this case, erecting barriers to entry (including higher regulatory fees) to bar potential competitors from entering a market.

While licensing boards do provide some measure of consumer protection, these boards could also be replaced by professional groups that help steer consumers to qualified practitioners.

Think licensing boards don’t pose a problem for both consumers and competing businesses? Consider this sad tale eye-opening example from Louisiana.

The Institute of Justice details the story of a monastery that has been selling coffins since the 1990s. The monks have made coffins for more than 100 years – but recently decided to start a business because of the heavy demand for their coffins. They had no dreams of becoming the next coffin conglomerate. But they were looking for an opportunity to help support their monastery.

But they haven’t gotten that chance – in fact, they’re being threatened with jail and fines.

A powerful entity in Louisiana – the State Board of Embalmers and Funeral Directors – has subpoenaed two monks because they are not registered with the state.  If found guilty, the monks could serve 180 days in prison.

The Institute for Justice has now  filed a federal lawsuit to defend the monks’ right to conduct voluntary exchanges on the open marketplace without fear of retribution from government bureaucrats.

This case should reverberate close to home in South Carolina where the funeral services lobby is relatively powerful.  Rep. Bill Sandifer, chairman of the House Labor, Commerce and Industry Committee, is a funeral home owner by trade.

In 2002, Rep. Sandifer sponsored a bill (H 3515) that mandated pages of new requirements related to funeral homes. The result of the legislation, which went into effect in August 2002, was to limit competition and provide protection to funeral home owners who have already gone through the licensure process. In 14 years in the legislature, Sandifer has sponsored eight bills related to the funeral industry, in many cases being joined by another funeral director on the other side of the aisle, Rep. Anne Parks.

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Written by Jameson Taylor

August 12, 2010 at 2:22 pm

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