Such a mechanism may be desirable, but it isn't necessary for the existence of cities. There are plenty of third world countries that don't bother with licensing, and still manage to have major metropolises.
But my point was just that when people talk about 'trades and crafts on which the existence of the modern city depends' they generally mean carpenters, plumbers, electricians and other hands-on trades, not clerks and bureaucrats.
Once again, here's the new thread for posting quotes, with the usual rules:
Please post all quotes separately, so that they can be voted up/down separately. (If they are strongly related, reply to your own comments. If strongly ordered, then go ahead and post them together.)