Here’s a perfect example of why state licensing is so harmful to society. Last week employees of a Kansas City, Kansas daycare left a three-year-old child in a movie theatre and, it appears, failed to account for the missing girl for almost two and a half hours. The child was eventually found in the theatre’s restroom by an employee, and returned to her parents, but not until after the police became involved.
The whole reason, we’re told, that we need the government to license businesses is because it will protect customers and prevent this sort of thing. For without a benevolent agency looking out for the needs of us poor, ignorant consumers, we’d have no way to judge the quality or safety standards of a given business, our betters tell us. But this is wrong on many fronts.
First, it’s important to point out that this incident was merely one of many problems that plagued the daycare facility, and the state was well aware. In fact, as the news report shows, the state inspected the facility a number of times and found many problems, including:
too many children, toddlers strapped into seats intended for infants, over-the-counter pain and sinus medicines in reach of children, uncovered electrical outlets, failing to have current health and immunization records on hand, exposed wiring and nails, inadequate training and record keeping of staff, a play area with exposed wires and rotting siding, mold growing on the insulation in the basement, rusted and broken lawn chairs for children in an outdoor play area and a leaking water heater.
So, even with all of the problems mentioned above, some minor, some major, the state was apparently comfortable with them nonetheless.
In the absence of government licensing programs, private agencies could evaluate daycare companies and assign a ranking or score. Naturally, higher-scoring daycare facilities would be proud to display their rankings as an advertising tool. Those businesses would tend to be in higher demand, assuming their prices were also competitive. Lower scoring centers would likely not be able to charge as much, but that doesn’t mean they wouldn’t have business. As is true with virtually all things, lower quality tends to bring a lower price, thus allowing more people to use the service. Now, if it were revealed that the evaluation or ratings agencies neglected to find problems, or covered them up, they would lose their reputation, just like the daycare center would. What private ratings agency would survive, having certified a childcare facility with exposed wiring, moldy basements, and a poorly trained, outnumbered staff?
In this case there seems to be no doubt the daycare failed in its task to watch over the child, and for that it should be punished. In a free society this would happen just as swiftly, if not sooner, than it has over the past few days. Once news agencies began reporting that a child was missing the reputation of this facility would start to sour. If parents felt it was a grievous enough offense, then it’s entirely likely they would remove their children and the daycare would find it difficult to attract business. In other words, the market would punish this business and those more capable would take in the children.
But the punishment wouldn’t be aimed squarely on the daycare center, as it now is; the ratings agency would also lose face, having certified the daycare at a particular level, only to have the truth come out. So, not only would people not trust the daycare, they would also be wary of the ratings agency. In this way there would be a sort of dual accountability that is absent in the government system. Everyone faults the daycare and, few, if any, hold the state agency at least partly to blame for certifying this business. It suffers in no way, and therefore is allowed to continue its disservice. In fact, the state often benefits from this sort of thing, because its functionaries can use the failure as an excuse to secure more funding.
There is at least one more way the government-regulated economy is harmed by state licensing, and that is, what happens to the other children previously cared for by the daycare? It’s likely that some parents would be unhappy and pull their children immediately, assuming they had alternatives. What about the parents and children without alternatives for daycare? What if this were the only affordable program or the only one near enough to home or work? These are questions rarely asked by the public, who too often demand action from the government, without considering the consequences of such action.
It’s possible that not all parents would be so quick to take their children out, and they would be harmed by the state’s move. In a free society the daycare would likely remain open longer, or at least be free to, so long as there were clients left. But now it’s been shut down, and the parents of at least a dozen children will be looking for someone to watch their kids. Hopefully they’ll all have a place to go.