If Europe is serious about reform it should suspend its competition laws

Posted on

The European Union is built on the basis of the idea that the free flow of capital between nation states without impediment placed in its way is a good thing. It is assumed that this will increase wealth. And it is assumed that anything that gets in the way of competition is a bad thing, and so is illegal.

Those assumptions are wrong. Unbridled competition is not a good thing. Whilst I am a fan of competition in many areas of life in some it is just straightforwardly wasteful. Take the NHS as an example. Given the objective of the NHS is to provide first class healthcare to everyone involving competition in the process is just folly. Competition requires choice - so every resource would have to be duplicated and then, to ensure the capacity for people to make choice was available, would have to work at way less than full capacity. That would impose an enormous cost, and is likely to seriously undermine excellence as resources were diverted into advertising, marketing, media, and contracting that would destroy investment in healthcare excellence. So unless we substantially increase resources available to the NHS (I suspect by as much as 50%, which we do not have) we can have competition in the NHS or we can have excellence. I know which I want.

And laws that supposedly support competition and that actually support monopolistic power are a decidedly bad thing. That could happen in banking right now. We need nationalised banks in Europe at present. If €2 trillion or more of taxpayer funds are going into banks then they need to be stated owned. but it will be argued by other banks that this will create unfair competition when in fact they are part of the problem that is being cured and will already benefit massively from it. The result is that instead of those funds being used for social good to reform banking forever they will be used to support he status quo. In other words, competition law is being used to impede progress, development and the creation of new opportunity which is the exact opposite of what they should be doing.

There is an answer right now. With the EU in crisis two things are needed. First of all the assumption that the free flow of capital is beneficial has to be questioned. There is very clear evidence that as the markets continue to circle it is not. Ans second competition laws that preserve the status quo of privilege and abuse most people have to be suspended.

Now.