Deregulation and market failure

from Steve Keen

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.

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