“Good moral character” is a standard found in occupational licensing law that, in the accounts given on the show, allows a licensing board to deny a license to an applicant whose background it deems inconsistent with that standard. The excerpts treat it less as a competence measure than as a discretionary filter on entry to an occupation, and most often as a filter that falls on people with criminal convictions.
The standard as a licensing filter
In the December 2020 episode, Bob Zadek calls occupational licensing, alongside minimum wage laws, probably one of the best examples of how systemic racism exists in society while remaining hidden, and asks Michael Tanner to address the “good moral character” issue Tanner has written about. Tanner describes licensing laws as often making very little sense in terms of protecting health and safety, offering the comparison that it takes longer to become a beautician than to become an EMT, which he attributes to a strong beautician lobby in Sacramento. Beyond tests and coursework, he says, applicants in many cases must show a “good moral character,” which he says allows the board to kick out anybody it did not want. Those requirements, in his account, were never applied in a race-neutral way and still block entry-level into business and into the labor force, tending to hurt people with higher levels of unemployment; he adds that in the wake of COVID, which will disrupt many low-income, low-skilled jobs, the regime should be re-examined Towards a Libertarian Theory of Anti-Racism (2020).
Zadek supplies a concrete case: a prisoner in a state prison who worked in the prison barbershop, learned hair cutting, and on release applied for a barber’s license, only to be denied because of “good moral character” owing to a felony conviction. Zadek calls this a perfect example of how licensing laws are racist and systemically racist, while insisting the focus should be on the right problem. In the same episode Tanner frames his book The Inclusive Economy: How to Bring Wealth to America’s Poor as asking why people are poor, locating part of the answer in individual behavior and choices and part in structural issues such as racism, gender discrimination and economic dislocation, and concluding that the culprit on both sides of the equation ends up being the government Towards a Libertarian Theory of Anti-Racism (2020).
Carpenter: the “cruelest aspect”
Dick Carpenter, Senior Director of Strategic Research at the Institute for Justice, takes up the phrase directly in the November 2022 episode. He says it most often comes up with people who have some sort of criminal background: a person is convicted, goes to jail or prison, and on release wishes to re-enter society, which typically means wanting to work in an occupation; where that occupation requires a license, the law in some occupations across many states says the license cannot be earned if the applicant has a criminal background, or something inconsistent with good moral character, such as a criminal conviction. The result, he says, is that people with a criminal background are prevented from working because that background violates the good moral character provision. He calls the cruelest aspect — and says he means it, it is cruel — the case of people trained in prison to learn an occupation who, on leaving prison, are told they cannot practice the occupation for which they were trained, because of a license and the license’s good moral character requirement New data shows that occupational licensing does nothing to increase quality (2022).
Zadek supplements this with a California anecdote: because of the state’s well-known forest fire problem, a program allows prisoners to qualify for release to fight forest fires, where they are paid a very small amount but learn a highly skilled activity, earn early release credits and earn money. On release, having decided they like fighting forest fires, they cannot get a job because they do not get a firefighter’s license because of bad moral character The Presumption of Liberty & Occupational Licensing (2022).
The wider licensing case
The 2022 episodes place good moral character inside a broader argument about what licensing does. Zadek’s framing is that no one relies on the licensing regime when hiring an interior decorator, a barber or a yoga instructor — they rely on recommendations, on Yelp and other online screening devices, on samples of work — and that the answers to why the regime exists are all bad. He asks why two consenting adults cannot enter a transaction in which one hires the other on the basis of whatever information the hirer has New data shows that occupational licensing does nothing to increase quality (2022).
Carpenter describes licensing as creating what Milton Friedman called a “Cadillac effect”: it forces every consumer in a licensed occupation to buy a Cadillac, when the consumer may be willing to buy the Chevrolet of service — a quality of service that is acceptable and affordable. A license prevents that choice, and the disproportionate effect falls on consumers who cannot afford the licensed service and must either do without or do the work themselves. He cites a study from about forty years earlier finding that licensing actually increases threats to public health and safety, because people compelled to do without a service provider do their own electrical work and harm themselves. Without a license, he says, an occupation has multiple tiers of service providers and the consumer chooses the tier New data shows that occupational licensing does nothing to increase quality (2022).
On aggregate costs, Carpenter cites work by Morris Kleiner, a professor at the University of Minnesota, and his co-author, examining the quantitative economic costs of licensing. Across about 36 states with good data, lost economic output ranged from about $28 million in Rhode Island to $840 million in California; nationally, licensing costs the economy somewhere between $6.2 and $7 billion in lost output annually. A second measure, misallocation, reflects labor diverted from the occupation a worker’s skills and interests would otherwise select: misallocation cost ranged from $675 million in Rhode Island to $22 billion in California, and between $184 and $197 billion nationally, again annual figures New data shows that occupational licensing does nothing to increase quality (2022).
Zadek’s own statement of the harm stresses the unseen: citizens who want only to earn a living are harmed one at a time, denied permission by a bureaucrat or by someone in the occupation, and do not make headlines. He also frames the customer’s side — that the law prevents him from spending his own money to hire someone to whiten his teeth, knowing the person is probably not that skilled — and notes that the government does not care if he buys a bad car or overpays for other things New data shows that occupational licensing does nothing to increase quality (2022). In the same episode Zadek describes licensing as protectionist, protecting the people in the occupation, and asks Carpenter to address the infringement of the freedom of the rest of society who do not get to hire whom they want New data shows that occupational licensing does nothing to increase quality (2022).
Zadek also identifies a cost that is not easy to measure: workers on welfare or another assistance program who have a skill but no license, and who cannot afford the tuition or the licensing, are locked behind a barrier and cannot start to move up the economic ladder. He states the design point bluntly — licenses are designed not to help people get into an activity but to keep them out — and it is in that context that he asks Carpenter to explain the damage done by the three words “good moral character” The Presumption of Liberty & Occupational Licensing (2022).
Across episodes: the same question, twice
The topic appears in the December 2020 episode with Michael Tanner and again in the two November 2022 episodes with Dick Carpenter, and the excerpts show no development between them: in both treatments “good moral character” is described as a discretionary licensing standard that excludes applicants, especially those with criminal records, rather than a health-and-safety measure. What changes is only the emphasis — Tanner places it within an argument about systemic racism and entry-level work, while Carpenter places it within an argument about licensing’s measurable costs and its effect on people trained in prison — and the two guests advance those framings separately, with Zadek supplying the barber and prisoner-firefighter anecdotes in each period.
What the sources do not cover
The excerpts do not identify the statutes, boards or cases that define or have construed “good moral character,” nor any court holding on the standard. They do not state how many states or occupations use the phrase, or what fraction of applicants are denied under it. The Kleiner study’s title, publication date and methodology are not given beyond the figures quoted, and the 2022 episode’s discussion of the Institute for Justice’s own study on licensing and service quality breaks off before Carpenter addresses it.