18 May, 2022
We have spent considerable time exploring and explaining the differences between healthy competition, which delivers benefits for all, as we have shown in our recent Telecoms report; and harmful competition, where companies compete on the basis of what economists called “externalities,” such as being more willing to pollute than the next firm, or more willing to take profitable risks at taxpayers’ expense. We investigated this in the context of the broken ‘market’ for children’s social care in the UK.
Yet there is a third concept, that gets called international “Competitiveness.” This is a far muddier concept, often wielded by politicians who want to justify subsidies for a particular sector. The idea is that whole countries can be ‘competitive’. This may be true on the sports field, or in the military arena, but every sane economist knows that the whole concept is a nonsense.
We are honoured to have been asked to sign – alongside 57 economists, ex ministers and former regulators – including a Nobel laureate and a number of heavyweight names – of a letter exploring the fallacies and dangers of pursuing a ‘competitiveness agenda.’
Please read about it in the latest edition of our newsletter, The Counterbalance. It explores, among other things, why “competitiveness” of this kind hurts competition in markets.
This edition also contains news of an exciting conference we just held in Berlin, to help build a European anti-monopoly movement.