Sunday, March 27, 2011

Witch City: Who Should Determine the Number of Psychics? Gov't. Regulation v. Market Competition

Here's a good case study of occupational licensing, with economic lessons in barriers to entry, contestable markets, and government regulation vs. market competition:

In 2007, the city of Salem, Massachusetts lifted its cap on the number of psychics allowed to operate in the city and now some local psychics believe the 'Witch City' is getting overrun with too many competitiors.  The views of two area psychics represent the two opposing approaches to the situation: a) more government regulation to limit the number of psychics, vs. market competition determining the number of psychics in Salem.

1. Barbara Szafranski, long-time psychic license holder and owner of shop "Angelica of the Angels," argues for greater government regulation:

"It negatively affected my business by 75%. I lost business because many stores opened up that were not in this field. They just opened up because they wanted to get the money from the readings.  It just becomes a bunch of gypsies. Maybe I shouldn't say that word because they might be upset by it but those people are not necessarily always qualified.

I'm in favor of putting the cap on because there are so many psychics in the city now. When I first opened up my business 25 years ago I was just about the only one in this area and, of course, as you're seeing since then it's grown and grown and grown."

Szafranski wants Salem city leaders to do a better job controlling the number of fortunetellers and preventing charlatans from operating.

2. Christian Day, a Salem warlock who owns two shops in the city, lobbied the city council to lift the cap on Salem psychics and thinks the change towards greater market competition is good for the psychic industry:

"I feel like it creates this sort of sparkle effect where everybody's sort of raising the bar on one another and making everything more exciting. As a person who believes in the power of the free market, I believe that the free market should decide whether or not there are too many psychics. If we have too many, they won't make any money and they leave. It's just like anything else.

What we want to encourage is that quality people come and in my opinion the free market encourages quality. If you cap the number of licenses and keep those people with licenses protected you essentially guarantee that people with lesser talent are protected. It is rather interesting to me that people expect government to protect their business. Your ingenuity should protect your business. Your talent should protect your business. Your aggressiveness to succeed will protect your business."  

MP: I'm with Christian Day on this issue, he believes in the "power of the market" and understands basic economic principles that "competition breeds competence" and intense market competition is usually the best and most effective regulator possible.  

HT: Curtis Purington


At 3/27/2011 8:37 PM, Blogger Benjamin Cole said...

I love this post--it shows what I often say, that despite all the rhapsodizing about "local control" and state government, in fact your local government is probably the biggest crusher of your economic freedoms.

Try practicing law without a license. Driving a jitney. Starting up a push-cart food stand. Building a skyrise condo in Newport Beach. Practicing medicine. Opening a pot store. As Dr. Perry has pointed out, some cities even try to keep out Wal-Mart. Usually it is business interests, not the fuzzy hair crowd, that is behind these repressions.

And other states (such as Michigan) insist that only full professors--not some guys with Masters, or even just great teachers--can teach even freshman economics. Some states (such as Michigan) even grant to professors tenure, so that they are permanently protected from competition.

Some states even finance universities, that unfairly compete against private-sector higher education! BTW, here in Southern California, a terrific new university, Chapman, has started up, completely privately financed, and rising in stature with every passing year. Do we really need anymore public universities?

At 3/27/2011 9:07 PM, Anonymous Anonymous said...

Are we sure this article isn't purely satirical? Witch and psychic licensing?!! Have the people in Massachusetts gone insane?! I mean we know they're very stupid, which explains why they're so liberal, but you read this article and you feel like you're on drugs.

At 3/27/2011 9:28 PM, Blogger reprise8 said...

Reality check for Ms. Szafranski - if the gov't, as you request, did a better job of preventing charlatans from operating, you would not be in business.

At 3/27/2011 10:36 PM, Blogger Dimitri Mariutto said...

If they really are both psychic [I am not one to believe unless I have empirical evidence], won't they both know what happens in the future? Did the 'psychic' Ms. Szafranski not foresee her business being 'negatively affected'? Just sayin.

At 3/28/2011 7:47 AM, Blogger Unknown said...

All this post leads me to thinking is about the current education system and how a majority of poor quality teachers are protected by the current tenure system which only allows new teachers to enter the system through the retirement of the aging ones.

At 3/28/2011 10:16 AM, Blogger anonymous said...

There is very strong scientific evidence for psychic abilities:

Not all psychics are fortune tellers.

Mediums communicate with spirits and pass messages on to the living.

I'm in favor of competition. I don't agree with restricting compeition to make it profitable for a few well connected individuals.

However I think it is reasonable that competent professionals are concerned about charlatans who might be damaging their profession. There should be ways to manage this without restricting competition.

The medical profession is a good example. What ways should doctors prevent charlatins from practicing medicine without restricting competition?

At 3/28/2011 10:31 AM, Blogger anonymous said...

Noble prize winning scientists who investigated psychic phenomena or investigated the literature agree they are not explainable through known laws of science.

Magicians who have investigated mediums have found that their phenomena cannot be due to magic tricks:

If the world's most brilliant scientists say it's real and trained magicians say it's not tricks - what grounds does an ordinary person have for disbelieving these phenomena?

Most skeptics have to resort to ridicule because the facts are against them.

At 3/28/2011 11:01 AM, Blogger Ron H. said...

"If they really are both psychic [I am not one to believe unless I have empirical evidence], won't they both know what happens in the future? Did the 'psychic' Ms. Szafranski not foresee her business being 'negatively affected'? Just sayin."

If I'm not mistaken, I believe there are some "natural" laws governing psychic ability that keep one from seeing their own future.

At 3/28/2011 12:22 PM, Blogger Unknown said...

Ms. Sza is basically saying "we don't want fake psychics around here."

At 3/29/2011 6:29 AM, Blogger Rich B said...

Christian Day, eh? Odd name for a pagan.


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