A Stitch in Haste

The (possible) housing bubble is having an unintended consequence: increased scrutiny of real estate broker commissions (WSJ - $) --

In a widening push to promote price competition in sales of residential real estate, government antitrust enforcers are preparing to sue the National Association of Realtors, alleging that its policies will illegally restrict discounting of sales commissions and put online competitors at a disadvantage.
...
The Justice Department is expected to charge that the NAR, in a proposed 2003 bylaw, illegally adopted practices intended to stifle Internet-based rivals and discounters, according to lawyers close to the case. These competitors often charge commissions below the traditional 6% that is divided between buying and selling agents.
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The government is also targeting industry-backed efforts to get state legislatures and real-estate boards, which set licensing standards, to enact regulations that in effect protect full-service real-estate agents and their commissions. Some brokers offer fixed fee-for-service, or menu, pricing that can lower consumers' costs, and others rebate a portion of the commission.

The Justice Department and the FTC have warned several states in recent months that such laws hamper innovation and competition, and have formally objected to industry-supported proposals in Oklahoma and Texas.

Now on the one hand libertarians tend to distrust antitrust laws, but on the other hand we also distrust licensing and other occupational restrictions that keep would-be entrants out of a trade. So which one prevails here?

Starting from first principles, if the NAR, qua private organization, wants to limit how its members operate as a condition for the benefits of membership, then that of course is their right. If the NAR becomes so good at what they do that they grow into a near-monopoly, then so be it; that's the good kind of monopoly and the antitrust authorities should butt out of it.

But the NAR leaders should stay in their offices and out of state legislatures and should not be allowed to invoke the Politics of Pull and lobby for laws that restrict the behavior of non-members or that require membership in the NAR itself. That's the bad kind of monopoly -- the kind that only arises via the heavy hand of government. As I've blogged previously, although licensing can, theoretically, serve an economic efficiency function, when it morphs into guilding then it becomes an unjustifiable affront to free markets.

With all due respect to the false god of federalism, if the only way to prevent state laws that impede free markets is by appealing to federal agencies that also tend to impede free markets, then so be it. The enemy of my enemy...

Marginal Revolution has a more economics-driven analysis.