Licenses and regulations are intended to prevent people from doing harm to others. Consumer protection regulations, many of which exist due to Ralph Nader efforts, have saved many lives.
Critics of the practice say that this is preemptive justice, effectively punishing people (with economic harm) who have not committed any crime; instead, they claim, the “rule of law” should be more effectively used to punish those who actually do commit harm to others.
Federal regulations are written by Congress and paid lobbyists tend to have a great deal of influence over how regulations are written. An example of poor and unfair regulation includes exempting the fracking industry from clean air and clean water acts. Large corporations can afford regulations or avoid them by manipulating the justice system, while small businesses and individuals tend to be disproportionately burdened by regulations.
In some cases, regulations can do more harm than good. For instance, public health regulations are difficult to change and therefore when a new improved technology becomes available, it cannot be implemented. Also, the existence of public health regulations can give the public a false sense of safety, when in actuality many approved practices and products are a danger to health. The use of pesticides is an example of a harmful, state-approved practice. Companies can afford to fight lawsuits and/or pay-off victims instead of being held responsible for bad products.
Licensing requirements may be necessary to protect public health and safety, but State licensing can be problematic. In Louisiana a person cannot get a job threading eyebrows without 750 hours of classes in unrelated beauty skills and pass on a state exam. It’s illegal to get paid to talk about the history of Charleston, South Carolina. It is illegal to massage a horse in Tennessee unless you are a veterinarian. Barber school students aren’t allowed to give free haircuts to the homeless. A poor person can be arrested and spend time in jail for selling flowers on a street corner without state permission. A 2015 report by the Department of Labor and the White House Council of Economic Advisers found people with criminal convictions and low income workers are most likely to be rejected when applying for a state-issued license.