The original contention, that regulation can make markets better, is entirely true. It’s just that we’ve got to be careful about how and why. Only when we’ve gained our justification for regulation will we get those two right.

Essentially, regulation from outside the market is only needed when we are dealing with things that have one of the two features: Effects that spill over to those not part of the transaction, and things that we don’t do very often. Things that are just the direct voluntary interaction of buyer and seller, and in commonplace transactions, we can leave to self-regulation.

A market that regulates itself, or one that is regulated by the participants in it, is not an unregulated market; it’s just one not regulated by those outside it.

21 thoughts on “Elsewhere”

  1. Oh come now. There’s a third reason for needing regulations. Vital work for politicians & bureaucrats. Where would we be without them? More importantly, where would they be without us?

  2. I think you’d have a hard time convincing most people that one party being totally misleading even when it doesn’t quite amount to fraud, wasn’t a good reason for regulation.

  3. I do wonder whether the old idea of anti-monopolies regulation might be revived; it seems hardly to be used any more.

    That, combined with an effective Fraud Squad, might provide nearly all that’s needed.

  4. One Tim example takes my eye: marriage. Let me extend that explicitly to marriage-and-divorce. It seems to me that the last fifty or sixty years of regulation of that market in England and Wales has been dreadfully bad. I might almost infer that parliament is not very good at this sort of thing.

  5. Anybody think there should be regulation on what politicians should be allowed to assert & promise? Something like the Trade Descriptions Act?

  6. You’ve left a hell of a lot of loopholes open there.

    “things that we don’t do very often” – I only change jobs every few years, that’s not very often, therefore it must be heavily regulated. McDonalds hires and fires on a daily basis, so it doesn’t need to be heavily regulated.

    A better way of looking at it is power relationships. A gas or water company has the power to make my life a misery, but I can only mildly irritate them. That’s an imbalance of power, so we regulate it. I work a zero-hours contract and am dependent on the good nature of my employer to call me in for shifts; that’s an imbalance of power. If a doctor has the exclusive right to prescribe potentially life-saving medication, he holds power over me. Car drivers hold power over pedestrians. And so on.

    Imbalances of power nearly always require regulation. Because that’s what we already do, we barely even notice it.

  7. “Imbalances of power nearly always require regulation.”

    Requires? Again, by what authority?

    Just because people don’t like a situation doesn’t mean the government has authority to do anything about it. Once you cede such power to the state, fascist control is inevitable.

    “Because that’s what we already do, we barely even notice it.”

    That people accept it doesn’t make it right.

  8. It doesn’t begin to cope with the asymmetries of most financial transactions. For example, dealers getting wind of rumours and protecting themselves at the expense of their clients.. Eg if a client puts in a sell order, then the dealer carries out the order perhaps 10 minutes after he has sold his own (or his firm’s) holding

  9. I would say that the “things that we don’t do very often” covers the cases of annonymous suppliers – where you cannot use knowledge from the experience from today’s transaction to tomorrow’s transaction because, while the transaction is the same, the supplier is different. viz higher regulation of ply-for-hire taxis, where you are contracting with anonoymous players for each transaction, and lower regulation for pre-booked taxis, where you the consumer are chosing the supplier.

  10. @Tim, good piece and provides opportunity to not go OT on a Regulation by consumer preference

    Müller have launched a new yogurt flavour in UK, promoting it in every Müller Light TV ad

    Müllerlight – Gin and Tonic yogurt

    Doesn’t appeal to me and don’t think health nazis will approve, anyone on Twatter? However, hat’s off to Müller for trying to satisfy a potential new market – although not stocked in local Tesco today.

    My gut reaction is it will die

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  11. @bis, Lud

    +1 and those regulating away freedom politicians & bureaucrats build empires of more politicians & bureaucrats

    Hitchens touched on this today

    @bis 1.21pm

    Yes, example names: Liberal Democrats

    @Andrew M

    I’d say it’s reverse: Pedestrians hold power over Car drivers – oh, correction non-RoP Car drivers

  12. because near no one would buy it — other than at joke shops

    Bloody hell, Tim. That takes me back.

    Haven’t seen a joke shop in years. Where do small boys obtain necessary supplies such as plastic turds and whoopee cushions these days?

  13. Where do small boys obtain necessary supplies such as plastic turds and whoopee cushions these days?

    Amazon. Where the big boys do too…

  14. You can make your own “itching powder”: just gather rose hips in season and harvest the seeds.

    Small boys will find that the flesh of the hip is pleasant to munch too.

    I can’t speak for domestic roses, mind; it’s dog roses I’m thinking of.

  15. Oh dear, how sad, never mind

    Müller’s unlikely new flavour has outraged campaigners concerned about the normalisation of alcohol


    Ah yes, rose hips takes me back, was always fun squirting contents inside back of someone’s shirt

  16. “Müller’s unlikely new flavour has outraged campaigners concerned about the normalisation of alcohol”

    Jesus H Frederick Christ! You’d think after 10,000 years it would be freakin’ normalized!

  17. ‘We’re told that a certain level of regulation can be — is — beneficial to the economy.’

    Your theory being that government will restrain itself once given the power to regulate.

    Good luck with that!

  18. Trifle has been “normalizing” alcohol for generations – but perhaps I shouldn’t say that, they’ll be after that next.

  19. @Gamecock, JS

    I’m surprised the ‘Outraged at Freedom” seem to have missed Big Brand and Own Brand “Beer Battered Fish”


    My mother once accidentally made Poteen Trifle in NI

    Alcohol in food? I don’t like taste, prefer seperate

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