The future of free enterprise?

The proofs of a new book out this week

just arrived. It’s edited by Kwasi Kwarteng, Ryan Bourne and Jonathan Dupont of the Free Enterprise Group and is a game of two halves: how to reform the state and how to improve the market.

[amazon_image id=”1137482567″ link=”true” target=”_blank” size=”medium” ]A Time for Choosing: Free Enterprise in Twenty-First Century Britain[/amazon_image]

I’ve not read the book but the question that comes to mind paging through is whether there is anything very new in the policy suggestions? The first chapter on ‘The Architecture of Government’ ends with four recommendations: axe half of the Whitehall departments and outsource administration; regionalise the national minimum wage and look at fiscal decentralisation; have a balanced budget rule and no discretionary fiscal policy; stop using official forecasts of GDP and instead use prediction market forecasts. Of these, the fourth is a subset of the first (outsource a Treasury function), and the second is the only really new element among a standard set of conservative preferences. I for one would welcome a serious look at economic decentralisation.

The final chapter, in the markets section, is called ‘Crossroads’ and it recommends: build more (private) housing and airport capacity in London; have a market for immigration visas; renegotiate EU treaties to remove labour market regulation; lower corporation tax and phase out other business taxes. The first of these is controversial across the political spectrum; the others, again, not new ideas. In this half of the book I was disappointed that there is little about making competition policy tougher so markets can work better, although it does advocate account number portability in banking (where there is too little competition) and an end to the compulsory BBC licence fee (an industry where there is already substantial competition so heaven knows that this is meant to achieve).

Anyway, I’ll read it more carefully. There are some interesting policy suggestions in each chapter – some more radical than others. There will be useful material in it for students. But my first impression is that it’s a clear (and well-written) statement of a rather well known world view, covering familiar Westminster territory. It would be more interesting to have the free market take on, say, competition in digital markets, or privacy and surveillance, or a genuinely radical market perspective on the NHS (not covered at all as far as I can see).

It also makes the standard ‘free market’ assumption that the market and the state occupy mutually exclusive territory, so for better markets you need less state. That’s a profound error. We need better both.


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