. . . In the legal field, lawyers are granted the power to vet their own membership by the state. That’s a monopoly. Same thing goes for the practice of medicine.
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I guess I see your reasoning, but would that make the practice of driving a monopoly, too? Since the state requires that drivers pass tests administered by other drivers . . . It’s all a matter of how you define something, I suppose. IMHO, a monopoly eliminates competition and allows the monopolizing entity to decide the price of the monopolized goods or services. There is a large variation in the fees of the professional services that you mention here, so I would disagree with the breadth of your definition.[/quote]
The important difference is that the state is assumed to be a neutral actor. Driver’s licenses are available to all who apply and meet the same standards. The state’s motivations in granting licenses or denying them have nothing to do with, say, keeping truckers’ wages from getting too competitive.
A bar association is a club of professionals and managed by its own members. The state does appoint a few directors to the bar’s board in California, but the state doesn’t have much more than a consultative role. Besides, who’s going to sue the bar association? It gets worse when the bar’s lobbying arm starts exerting itself on the legislature … which is full of members of the bar.
A monopoly’s key characteristic is the restraint of trade. Natural consequences of this restraint are increased prices, reduced efficiency, reduced choice, and (frequently) reduced quality of goods and services. Not all of those symptoms must be present for there to be a monopoly, but even statutory monopolies like SDG&E, Major League Baseball, and Cox Cable would surely put out a cheaper product more efficiently if they faced real competition. Competition was judged impractical in those cases, so the government compromised.
Getting back to the RE industry, I think all the defects named above plague the real estate market.
