[seibelj]

This is the same model of all licenses, which is inherited from the guild system common throughout all of human history (the government (monarchs, oligarchies, democracies) protect favored industries from competition).

I put them on a spectrum:

- Licenses that anyone can obtain by showing the requisite skills. This is the least nefarious, and the clearest example would be driver's licenses. In a perfect world anyone can apply for and receive a driver's license. It gets corrupted by requiring training from other state-approved schools, but in its purest form it achieves, "If you can pass the driver's test, you get a license." Interestingly enough even advanced degrees sometimes achieve this goal - in California anyone can take the bar exam and get licensed to practice law without ever attending an accredited law school. Every other state requires you to attend law school (and the required cost / debt) before getting licensed.

- Licenses that you can obtain only after attending approved schools. This would be doctors, dentists, accountants, and nearly every lawyer (see above). The filter for the guild is getting into the approved school. If you manage to get accepted into and complete the program, you will succeed in getting licensed based on raw intelligence (meritocracy). The primary filter that protects the guild is getting into the approved schools (although there exists a subset of people who make it into school and fail the license exam, most commonly in law).

- Licenses that anyone can get, but require some absurd amount of hours of training, which usually costs absurd amounts of money that achieves nothing and are government mandated because of various entities that lobby politicians. These would be all of the blue-collar guilds like hair stylists, interior decorators, and being a florist in Louisiana (seriously - https://www.kplctv.com/story/37848470/requirements-for-louis...). You can learn the basics of hygiene and sweeping hair in a 60 minute youtube video, but the 1000 hour requirement in a for-profit cosmetology school in Massachusetts (https://www.mass.gov/service-details/how-can-i-become-a-cosm...) is absolutely absurd, especially considering becoming an EMT - someone that literally saves lives and gets dying people to hospitals - is a $950 six-month part time program (https://www.boston.gov/departments/emergency-medical-service...). Even worse, very rarely these licenses are transferrable between states, making the blue collar employee both indebted and chained to a particular area.

- Licenses that anyone can get, but are purely graded on a curve in order to protect existing members. Finally we get to the actuarial licenses! Similar licenses would be Michelin star restaurants and wine sommeliers. Only a very small community appreciates these licenses, but the value to those that have them is high via the artificial scarcity. In order to keep them fair they offer the test(s) to anyone, but grade on an absurdly difficult curve to make them essentially random, and then take only the top scorers to preserve their scarcity. The process to get the license is to cram test exams ad infinitum and continue to take the test until you randomly get the top score. They ultimately mean nothing, at least compared to the amount of people who deserve the license vs. those that have them.

In summation, licenses are an atrocious relic of a bygone era, but because of economic incentives they live on in a variety of forms and have little chance of ever being eliminated.

Addendum - occasionally I will see an HN poster asking why there isn't some sort of certification or license for software engineers (perhaps in some countries these exist, but not in the USA where software engineers are the top-tier of salaries across all industries). My argument against this is that the lack of licenses is exactly why US tech companies dominate the world - anyone can succeed whether they are an ethnic or sexual minority, autistic / neuroatypical, paraplegic, etc. can learn to code and make an impact - and at any age! Licenses mean nothing to technology, and the moment they appear is a signal that something significant has changed and the industry in that country will collapse when compared to all the other countries that don't artificially restrict talent.

[namdnay]

> Licenses that anyone can get, but are purely graded on a curve in order to protect existing members. Finally we get to the actuarial licenses! Similar licenses would be Michelin star restaurants and wine sommeliers. Only a very small community appreciates these licenses, but the value to those that have them is high via the artificial scarcity. In order to keep them fair they offer the test(s) to anyone, but grade on an absurdly difficult curve to make them essentially random, and then take only the top scorers to preserve their scarcity. The process to get the license is to cram test exams ad infinitum and continue to take the test until you randomly get the top score. They ultimately mean nothing, at least compared to the amount of people who deserve the license vs. those that have them.

If I follow you correctly, this last category is basically all "competitive examinations"? I wouldn't be so quick to dismiss them (maybe that's because I live in France, where competitive examinations are the third national pastime, just behind moaning and striking).

Michelin stars for example are supposed to distinguish the best restaurants, so of course they're going to be competitive! Would you complain that we only give three Olympic medals per event?

These competitions can be useful in case of limited availability (e.g. number of places every year in an elite engineering college), but also just as a signal that you're dealing with the best of the best. For example, if you go to a Boulangerie held by a "Meilleur Ouvrier de France", you know you're going to get some of the best croissants in the world.

[civilized]

> These competitions can be useful in case of limited availability (e.g. number of places every year in an elite engineering college), but also just as a signal that you're dealing with the best of the best.

When you're dealing with actuaries, you're definitely not dealing with the collective "best of the best" (although individuals may happen to be excellent). You're dealing with people who were willing to memorize and practice and grind a very specific set of exams because they had no other options or didn't want to do anything else.

[seibelj]

I would argue that there should be way more Michelin-star restaurants than exist, but they artificially cap the supply to keep them rare. It's a form of the same thing.

[civilized]

I think there's an incentive system at work that I'm not sure I've seen articulated before. If the people controlling a rating system want the best ratings to be rare, they will often have to resort to a combination of opacity, arbitrariness, and fine distinctions that are largely meaningless to the consumers of the ratings. Because True Quality can't be reliably recognized by some ratings committee... and yet, they must rate.

[nradov]

A Michelin star rating is not a license. It has no legal force. It's simply a restaurant review, like you can read in any newspaper. Some consumers choose to trust Michelin reviews more than other sources.

[namdnay]

Indeed, just like an olympic medal. The MOF is a better example IMHO

[actuary]

Actuarial credentials aren't licenses. In the United States, they confer no privileges aside from the ability to sign a particular statement on the condition of a company's loss reserves. This is something that few actuaries will ever need to do.

Actuarial credentials are instead a market-based signaling mechanism, akin to a specialized technical degree. All signaling mechanisms are imperfectly correlated to whatever it is they're signaling for, but in my own experience, it's usually a good bet that an actuary who holds a credential will be more capable than one who doesn't. The market agrees and pays credentialed actuaries a premium. If credentials stopped being an excellent predictor of ability, there would be nothing stopping the market from disfavoring them. Note that there's one highly successful insurance company (Progressive) that has made this call and hires very few actuaries. Most companies wouldn't be able to follow their operating model, but that's a different conversation.

And if the actuarial societies and insurance companies are trying to preserve scarcity of actuarial credentials, they're doing a poor job of it. The test-taking process continue to be well-supported by insurance companies. Junior actuaries typically have all exam expenses paid and are given an additional 25 to 30 extra days off per year to study for exams. The number of credentialed actuaries has exploded (I think more than doubled) in the past decade. There are no quotas and no economic barriers after you get your first job.

I do like your comparison with Michelin-star restaurants. Michelin stars are a signifier of quality. The letters after my name are too.

[mch82]

Licenses actually mean a lot and are integral to many industries. Software isn’t traditionally regulated because society still doesn’t understand the danger of defective software.

Buildings, electronics, phones/radios, vehicles, food, medicine, and serious industries are all licensed.

[seibelj]

Some software is dangerous, like airplanes and medical software that aids in live surgeries. But the majority of software is not dangerous. You shouldn't need to be licensed to make a video game or browser extension.

[buck4roo]

Nominate parent for best of HN2021 award