Deregulation and market failure

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The old­er I get, the more cyn­i­cal I become about gov­ern­ment inter­ven­tion in the econ­o­my.

That state­ment might appear to be either a recan­ta­tion of every­thing I’ve ever argued, or a sign of the usu­al tale of left-wingers mov­ing to the right, and right-wingers to the left, as life expe­ri­ence tem­pers youth­ful exu­ber­ance. It’s nei­ther (well, okay, maybe it’s a bit of the lat­ter), because my devel­op­ing posi­tion reflects the com­plex­i­ties of a mixed econ­o­my.

The lat­est real world expe­ri­ence that has pushed me fur­ther into cyn­i­cism about gov­ern­ment is a very per­son­al one: an attempt by the Aus­tralian gov­ern­ment to increase com­pe­ti­tion in edu­ca­tion via dereg­u­la­tion is the direct cause of the pro­pos­al to ter­mi­nate the eco­nom­ics pro­gram at my uni­ver­si­ty. The pol­i­cy change will actu­al­ly reduce com­pe­ti­tion in the edu­ca­tion mar­ket­place in Aus­tralia: the mar­ket was more com­pet­i­tive with the pre­ced­ing reg­u­la­tions in place.

An update though: UWS has now decid­ed to at least pre­serve a major (8 units) in Eco­nom­ics with­in the Bach­e­lor of Busi­ness. This is progress, and UWS is to be com­mend­ed for respond­ing sen­si­bly to the enor­mous neg­a­tive feed­back that the orig­i­nal pro­pos­al received. But this is still short of the Bach­e­lor of Eco­nom­ics we cur­rent­ly have, so some influ­ence from the pub­lic to per­suade UWS to main­tain this unique degree would be very valu­able.

Also, a read­er on Busi­ness Spec­ta­tor point­ed out that I got my maths wrong in the exam­ple of ice-cream ven­dors on the beach: the opti­mal posi­tions for the cus­tomers with 2 ven­dors on the beach is the 25% and 75% loca­tion. Put the poor ini­tial maths down to … well, I expect you can guess what.

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About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.