Zenefits Scandal Highlights Perils of Hypergrowth at Startups
Alternative title: &quot;Zenefits Scandal Highlights Perils of Excessive Occupational Licensure&quot;. What exactly is the purpose of requiring a license for selling insurance? If consumers desire some assurance of quality in their insurance brokers, then certification, not licensure, would be sufficient. The only justification for licensure over certification is a paternalistic one: consumers are simply too ignorant to choose their own insurance brokers, even if some are certified and some are not. As Milton Friedman said in Chap 9 of Capitalism and Freedom, this argument &quot;amounts to saying that we in our capacity as voters must protect ourselves in our capacity as consumers against our own ignorance.&quot;<p>This isn&#x27;t to say that Zenefits hasn&#x27;t made a huge misstep for seemingly little benefit (bypassing a 56 hour course?), but I wish there was some discussion of the absurdity of the law that was broken alongside the bashing of Zenefits for breaking it.