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Chip Mellor
Greg Kahn/Genesis
Chip Mellor

Regulation slayer

Q&A | Governments regularly set up arbitrary barriers to entrepreneurship. Chip Mellor and the Institute for Justice break them down

Issue: "The new urban frontier," March 9, 2013

William (Chip) Mellor is president and general counsel of the Institute for Justice (IJ), which he co-founded in 1991. Mellor and IJ litigate constitutional cases involving key questions of economic liberty, school choice, and the First Amendment. Here are edited excerpts of our interview.

After you received your law degree in 1977, why didn’t you follow the corporate law path? I went into private practice very briefly and realized that wasn’t the right avenue to pursue the kind of passions and aspiration I had to change the world and restore constitutional protection for individual liberty.

What do you recommend today for some of these Patrick Henry College students with aspirations like yours? They should look into the couple of dozen vibrant public interest law firms that address issues ranging from homeschooling to private property rights to school choice to First Amendment. 

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What’s the underlying problem facing lots of people who want to go into business? Government officials impose arbitrary regulations and licensing requirements on people of modest means who are simply trying to earn an honest living. They do that when they condition entry into a job by requiring that you go to particular schools or get particular credentials that all too often have nothing to do with what you’re actually trying to do in your job. 

Your first case involved braiding hair in Washington, D.C. Hair-braiding is a tradition in African and Caribbean communities that goes back hundreds of years—but when it became popular in America in the early ’90s, suddenly African hair-braiders were required to be fully licensed cosmetologists, which meant going to school for 2,300 hours, and when you got done you had to pass an exam showing you could do hair styles on live models that were consistent with the hair styles popular on white women in 1938 when the law was passed—finger waves and pin curls.

One of your cases involved caskets in Louisiana. Monks at a 125-year-old Benedictine abbey not far from New Orleans needed a new source of revenue after Hurricane Katrina. They had a carpentry shop. They make caskets for themselves, why not make a few and sell them to the parishioners? Seemed like a good idea until they made their first casket and put it on the market. There was a knock on the door. It was the funeral board saying they had to cease and desist instantly from selling those caskets because they were not licensed funeral directors. And to be a licensed funeral director, of course, you have to go to school for a couple of years, learn how to embalm bodies, do all these sorts of things that have nothing to do with the simple act of building a casket—and if you continue to sell caskets without a license, you face six months in jail and $1,000 for every casket you sell. 

What about filing the teeth of horses in Minnesota? You have to be a fully licensed veterinarian. We see those types of problems whenever regulated industry is able to capture a licensing process and impose arbitrary laws for the purpose of either eliminating competition or forcing people under their umbrella. 

Tell us about the Dallas sign ban. The government said that if you have a storefront and want to put signs in your window, they could only cover no more than 25 percent of your window. They said they wanted the police to be able to see in, but the real goal was beautifying these neighborhoods.

So you’re against beauty? It’s in the eye of the beholder, and if you ask any of those hard-working entrepreneurs, they’ll tell you the most beautiful thing is a customer walking in the door because they’ve seen that sign.

Gas and limousines? Government back in the New Deal got in the business of allocating market share and controlling prices people can charge. The vestiges of that still remain in the gas market: In Wisconsin if you wanted to run a discount gas station, you couldn’t charge below a minimum standard. We’ve also had a limousine service case: Limousines are required to charge a minimum fare, and cannot underbid their competition in order to get more business or to provide consumers with a more affordable service. 

How do you distinguish between wrong and right regulation? Cab drivers are often aspiring and hardworking entrepreneurs who can’t get into the market because there are limits on the number of cabs. We think that goes too far—that’s an arbitrary decision in the market—but it’s fine to require taxis to have adequate insurance, competent drivers, criminal background checks, and safe vehicles.  

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