24/09/2014
A recurring theme on this blog is the role of regulation in society and, in particular, how we deal with it in the context of "Brexit". Specifically, I have found myself looking at means of absorbing existing regulation into the post-exit UK, and dealing with new mechanisms to replace EU systems and procedures.
A popular response to the opportunity presented by withdrawal, however, is to seek a massive reduction in the "burden" of regulation, permitting the "market" to reign supreme. By this means, it is often averred, we can save billions.
For the market to function, however, the consumer requires information, and in the
Mail online today, we see an example of how the "market" treats the information a consumer needs to make an informed decision on which car to buy.
In this instance, it is mileage figures in the frame, with EU regulations in place to require manufacturers to post performance figures of each of their models, for the edification of prospective buyers.
But, rather than support the attempts to assist the "market", what we see from the
Mail report is that the manufacturers do their very best to undermine the system, resorting to a number of "tricks" to boost the miles per gallon (claims) on vehicles, the differences amounting to as much as £400 a year in excess fuel costs, representing the cost of actual performance.
There is, one might aver, a free market solution to this, in that the European consumer body BEUC has released the results of independent tests carried out for the Italian consumer group Altroconsumo to challenge some of the leading car-makers in court, for falsifying claims.
Even in this instance, though, there is state intervention at two levels â the first in setting up standard testing protocols. Left to the market, there would be competition in test standards, and another loophole the corporates could exploit. The second level of intervention is in having a court system and legal system, through which manufacturers can be challenged.
What comes over here, though, is that, left to itself, there is no way the "market" is going to make life easy for consumers. The purpose of the market is to extract as much money from the customer as possible, in return for giving as little as possible, tempered only by the need to bring them back â churning notwithstanding.
In this context, the regulation and the attendant bureaucracy is certainly seen as an imposition on the corporate world, where it impinges on the ability to extract more for less from the consumer. But, from the other side of the divide, this is society's way of levelling the playing field, and reducing the rip-off opportunities.
What that says, if anything, is that if there is a need for regulation, then it should be necessary to serve a specific purpose, and then it should be effective in serving that purpose. And here, one could argue that the EU has not succeeded if its tests can be so easily subverted.
The trouble is, in my view, is that this is not the place for dogma. I do not take the view that regulation,
per se is either good or bad, or that the market is always an effective answer.
And that is why, it seems to me, that there are no easy solutions â no simple magic wand to wave. Leaving the EU presents an opportunity to look at the regulation which is on the statute book, and a chance to look at the way we are regulated. But to aver that we are going to be able to warm ourselves on a bonfire of regulation seems to me a tad optimistic.
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