A Case for Regulation
There is common ground between Jeremy Corbyn, the new leader of the UK Labour Party and Bernie Sanders in the US, an influential contender for the Democrats’ leadership. The word used of both is “authenticity”. Their political stance implies they favour regulation.
My purpose is to ask what that word “authenticity” means and why it has so much impact. The implication is that politics as we experience it somehow lacks authenticity. The political centre has moved far to the right. Even left-wing politicians such as Tony Blair or Barack Obama occupy similar ground to right-wing politicians. Corbyn and Sanders have fewer associations with vested interests on the right and tap into a sense of independent thinking. Whether this makes them electable is another matter. It will be interesting to see the long-term impact of their influence
A paper, Threat to Democracy: The Impact of “Better Regulation” in the UK, issued by the New Economics Foundation this week, shines light on the reasons for this perceived lack of authenticity. The primary purpose of politicians is to protect the interests of the people who vote for them. Politicians bought by these huge commercial concerns become inauthentic.
A Case for Regulation
The paper describes an activity introduced during the Coalition government (with roots in the previous Labour government). They aim to deregulate just about everything. The paper is not long and so I shall not go into detail. It shows deregulation is not in the interests of the economy, society, democracy or the European Union. The United States is one of the few countries that has gone further down this road than the UK. The paper makes the point that regulation and red tape are not the same thing and indeed shows how deregulation can result in an increase in red tape, when it suits big business.
The main point I want to make in this post is the case for regulation. The following is a paragraph from the report. I’ve added bullet points but otherwise it unchanged:
-
“Clear and effective regulation can drive business growth by encouraging innovation to meet specified standards, such as fuel efficiency requirements or safety expectations for household appliances.
-
It ensures that less powerful businesses are able to compete on a level playing field, preventing the extraction of rent by dominant companies.
-
It gives businesses the long-term confidence to make investments in skills, infrastructure, and research, thereby expanding production possibilities and productivity.
-
Regulation prevents economic inefficiency by ensuring costs are dealt with at source, for example requiring polluters to bear the cost of pollution rather than the health service paying for the treatment of its effects.
-
Regulation can create and enable markets just as much as it can constrain them.” (Page 10)
Local Business Benefits from Regulation
In other words, regulation is good for local businesses. Deregulation is abdicates democratic control of the economy, resulting in capital accumulated in the hands of very few people. They benefit because politicians allow them to.
Whilst people, when asked about red tape, might favour deregulation in theory, they tend to favour regulation when they contemplate its detailed impact. The report puts it:
“It seems that deregulation, in the abstract, is an attractive idea, but when confronted with specific protections, most people quickly recognise how important good regulation is to the quality of their lives. It’s also clear that tokenistic consultation measures are sufficiently flexible to allow this inconvenient discovery to be ignored.” (Page 11)
Politicians are finding most people do not support this campaign to empower the corporations and so introduce it under the radar. Many sense politicians are either selling out to unelected corporations or else not aware of what is happening (much deregulation does not need parliamentary approval).
What is to be done? Read the report and support its recommendations!