16 Jan 2014

Canadian guilds

In my short time here, I've noticed that it's harder [than in the US or NL] for people to work in some professions (engineers need to be members of their organization to call themselves "engineers"), restraint of trade in some businesses, and so on.

Suppliers who face less competition often say that they can provide more quality. A certified engineer will be paid more but she will have more resources to build safer bridges. A lack of competition in beer retailing -- or higher prices via tax -- saves lives (I'll stop bitching about alcohol taxes; I don't mind paying more if fewer people die).

I was lucky to be exempted from most of these rules when it came to my visa (PhD with US passport and offer letter can get a NAFTA professional visa on the border), but others are not so lucky. They cannot work; they cannot deliver value at a bargain to customers.

My point here is not to blast prudence in the name of competition. It's to call attention to the benefits and costs of a "guilded marketplace." Let's look at them from a "negative" perspective.

Less competition means...
  • Higher prices for consumers (but more profits -- "monopoly rents" -- to suppliers)
  • Less innovation and more "convention"
  • Less opportunity for the restless and more power to the establishment
More competition means...
  • Less consistency on methods, outcomes and safety
  • Greater search costs to find a supplier
  • Harder regulation and oversight
These bullets (feel free to add your own points) should help you see how the Canadian system may be seen as "cozy and responsible" by incumbents, the rich, and bureaucrats but "costly and staid" by innovators, the poor and outsiders.

Bottom Line: Costs and benefits depend on where you stand.

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