Two Notes on PSST
1. Some folks on the right are bothered by the term “sustainable” in patterns of sustainable specialization and trade. They seem to be afraid that I am some sort of tree-hugging wuss. Or that I think patterns of trade need to be sustainable forever. Instead, what I intend by “sustainable” is that the patterns are mutually beneficial, as evidenced by profit. I wish to distinguish sustainable patterns from patterns that are created by government subsidies of unprofitable enterprises.
2. Are there any policy implications of PSST?
I can think of one, which is the elimination of internal trade barriers. I would argue that occupational licensing is an internal trade barrier. In fact, I believe that when state X denies a license to someone licensed in state Y, that is a violation of the Constitution, in spirit if not in letter.
I can imagine having zero occupational licensing, with consumer protection instead provided by a statute that penalizes fraud and misrepresentation. You cannot claim to have graduated medical school when you have not done so, but if you make it plain that you are not a doctor, you can perform whatever service the consumer is willing to obtain from you.
As usual, I prefer a vague law to a precise statute, with gradual accumulation of case precedent helping to achieve greater clarity over time. For example, suppose somebody engages in deceptive practices to sell quack medical services. I would want the punishment to be harsher if this is done to exploit people who are poorly educated than if the target market is people who really should know better. Not that there should be no punishment in the latter case. But my sense is that fraud perpetrators often seek out victims among the weak, and that especially ticks me off. Anyway, I would not try to specify exact criteria in the law, but I would hope that over time judges and juries would arrive at sensible applications. Incidentally, there might be role for rewards for people who successfully identify scammers and bring them to justice.
The main point: get rid of internal trade barriers