Realtor Cartel Update: Massachusetts

One way that people have gotten around the Realtor Cartel is by nominally joining it. Indeed, when the barriers to entry are only a few thousand dollars of test and licensing fees it can make sense to join the cartel (i.e., become a “Realtor”) just to save on the costs of a single property sale.

The Massachusetts cartel moved in 1999 to raise its barriers with a “continuing education” requirement. This had the intended effect: The number of licensed agents fell 58%. The justification for the requirement was that it would improve the cartel’s service to the public. A study just released by Benjamin Powell and Evgeny Vorotnikov concludes this was a sham:

The study found no evidence that either the volume of complaints, or those requiring a response from the board, decreased after mandating the continuing education courses.

In other words, full-time agents changed the law to limit their competition from part-timers and enhanced their own incomes in the process. Sadly, the much-touted benefit to consumers has yet to be seen.

How much of Higher Education is Content?

Because if there’s one thing the information age has taught us it’s that content wants to be free.

Lectures look to me as much like content as movies and music. Five years ago I wondered why we weren’t simply recording and distributing the best lectures by the best lecturers, instead of charging students to attend small performances of lower quality in person.

Since then we have seen an explosion in “open-source” courses offered by universities. The Khan Academy led a proliferation of excellent, free, online teaching for K-12 students, and is no longer alone.

Now here comes Silicon Valley with the for-profit tech ventures that aim to provide free online education and, somehow, make money on the side. Since what they’re doing is providing content presumably the initial business strategies will mimic all other profitable content providers: upselling and advertising.

And eventually they should find a way to undermine the old-fashioned higher-education cartel. I’m kind of surprised it has taken so long.