Lefty economist spouts bollocks about regulation
HA-JOON Chang is writing in the Guardian about red-tape and competition. He is utterly wrong. Sigh.
Would-be red tape cutters believe that the more regulations there are, the less investment there will be. However, regulation is only a minor factor in investment decisions. Things like growth prospects, technological progress, quality of labour force and infrastructure are far more important. The truth is that, if there is money to be made, businessmen will invest regardless of the level of regulations. This is why the 299 permits that were needed to open a factory in South Korea in the early 1990s did not prevent the country from investing 35% of its income and growing at 10% per year at the time.
No one at all has ever said that factories won’t get opened because there is red tape. The argument is that fewer factories will get opened the more red tape there is.
The actual argument that this pillock is putting forward is “Look, there’s a factory, see, I told you red tape wasn’t a problem!”
Ignoring the point that every economics student has beaten into him: the job of the economist is not to look at what is seen but what is unseen. We want to know how many factories have not been built because of red tape, not admire those that have been despite it.
Jeebus, this loon teaches at Cambridge and people say there’s nothing wrong with the education system these days?
Posted: 2nd, May 2012 | In: Money Comments (3) | TrackBack | Permalink
