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April 21, 2004


Chris Lightfoot

Is "bankers' playground" a well-known cliché? The only references I can find to it on the web are in the article you discuss here, and in a piece on Clerkenwell.

Mark T

wider recognition that the public sector has no wealth of its own and merely distributes that of the private sector would be a major step to improving popular understanding of the limits and role of government - as well as curbing the sense of entitlement to "their money". Moreover, the ever increasing agency costs levied by the public sector for performing this role need greater scrutiny.


David Clark opines that in post-Thatcher Britain, we have one of the most lightly regulated econonmies in the industrialised world. Utter nonsense. I very much doubt that Clark has ever had to run a small business, since if he had done so he would have realised what a nonsense that is.

Notwithstanding some of the reforms under the Tories in the 1980s and 90s, Britain remains a heavily regulated economy. The fact that it is not as heavily oppressed by red tape as say, Italy or France is not much consolation.

John Turnbull

"some things that have traditionally been counted a public good, such as higher education, are in fact more like hybrid goods, because they benefit principally those who consume the good rather than the public generally - their positive externalities, in other words, are fewer than has commonly been assumed."

Those damn doctors - only in it for themselves.


Clearly doctors are different from the rest of us - they operate for the sake of altruism and the good of society alone.

Andrew Ian Dodge

I believe that the free market can both serve the economy and the public good. When has the public sector/bureaucracy ever been better at delivering a service than the private one?

John Turnbull

There is no such thing as a "free" market. Markets are creations of society, via governments, not the mythical, stand-alone entities that free marketeers seem to believe in. Thom Hartmann explains it well:

"Governments provide a stable currency to make markets possible. They provide a legal infrastructure and court systems to enforce the contracts that make markets possible. They provide educated workforces through public education, and those workers show up at their places of business after traveling on public roads, rails, or airways provided by government. Businesses that use the "free market" are protected by police and fire departments provided by government, and send their communications - from phone to fax to internet - over lines that follow public rights-of-way maintained and protected by government.

And, most important, the rules of the game of business are defined by government. Any sports fan can tell you that football, baseball, or hockey without rules and referees would be a mess. Similarly, business without rules won't work."


I really enjoy this blog. Thanks.


The Heritage Foundation's Economic Freedom Index ranks GB 7 out 155 countries. Even if you agree with the measurement it doesn't mean more freedom isn't good. It would mean that GB is relatively unregulated.

John Turnbull,

Yes they are.

I am thinking that doctors would exist without public funds. Call me a wild eyed conservative. The government isn't creating doctors, the government is paying for their educations. Perhaps this benefits the general public, perhaps we end up with more doctors and/or better doctors, but the primary beneficiary is the doctor. They get a free education and a nice job.

If the answer no they aren't, we shouldn't fund their educations, since selfless doctor wannabes would undoubtedly still find a way to become doctors.

Ed Snack

With respect, the notion that governments create markets is a fiction. Markets existed long before governments were ever thought of, as neolithic peoples traded goods over significant distances. All that is required are goods that tradable and some form of communication to make the trading possible. Try reading "The Origins of Virtue" Matt Ridley, for an introduction. International trade flourished long before there were governments with any ability to enforce agreements.

David Gillies

Britain is, indeed, relatively lightly regulated. The problem is that 'one of the most deregulated economies in the industrialised world' is like that old joke: 'tallest building in Wichita'. The scope for deregulating even the most lightly regualted economy is vast.

I would agree that States are not necessary for enforcement of free-market rules. But they are sufficient; indeed that's one of the problems in that they usurp the regulatory structures that precede them. There's then of course a tendency to regulatory creep.

John Turnbull, BigMacAttack, you're both off beam. John, virtually all of the goods you specify could be provided by private entities - even courts (the existence of binding arbitration lends significant credence to this). There's no a priori reason that the State should provide education, hospitals or roads (if it can provide them more efficiently than the private sector then all well and good. But if Government merely arrogates to itself the right to provide these things then that is not an argument against private-sector provision of them). The set of true public goods is very small (albeit that the members of the set are very important). As for the idea that public funding of medical training make for more/better doctors - the primary function of the GMC is to keep numbers of trainee doctors down. Since when has a trade union thrown its doors open to all and sundry? There's actually a serious problem of retaining female doctors after their twenties as so many of them get married and drop out of the profession. But that's another story...

John Turnbull

Ed, point taken: I should have said that governments create "free" markets. Sorry to rely again on an appeal to authority, but others have already argued these points better than I could. John Gray, Professor of European Thought, LSE:

"Free markets are creatures of state power [...] Encumbered markets are the norm in every society, whereas free markets are the product of artifice, design and political coercion. Laissez-faire must be centrally planned; regulated markets just happen. The free market is not, as right thinkers have claimed, a gift of social evolution. It is an end product of social engineering and unyielding political will."

I'm not anti-enterprise or in favour of a planned economy. I'm just saying that we should recognise the so called free market for what it really is.


Sigh. A "front organisation" that can organise a demo two million strong? Get a grip.

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