Richard Denniss has an op-ed in the AFR today that fills space but has little substance:
Many may have bemoaned the dominance of “economic rationalists”, but I’m beginning to miss them. Sure, they often used simplistic and narrow assumptions to justify a wide range of bad ideas but, compared to the economic irrationalists dominating today’s policy debates, at least they were willing to have a fight with vested interests.
The economic rationalists of the 80s and 90s raged against a few main targets, primarily monopolies (therefore the need for competition policy), public sector service provision (therefore the need for privatisation) and high taxes (therefore the need for tax cuts).
So what’s the problem?
There is a simple reason that governments like to ignore economic rationalists when it comes to selling off government services; monopolies attract much higher prices than competitive firms. Politicians can deliver a “magic pudding” of lower taxes and lower levels of debt simply by transferring government monopolies into private monopolies.
… it’s harder to explain why the economic rationalists have gone so quiet. Maybe they don’t believe in markets any more. Maybe they don’t care about consumers any more. Or maybe, like Adam Smith, they have all just gone to work for the monopolists.
The point that he is making is that public monopoly is preferable to private monopoly – but he provides no evidence to support his case. What is all the more remarkable is that he expects “economic rationalists” (now there is a blast from the past) to argue in favour of government ownership.
Finally he makes a factual error – Adam Smith didn’t go work for the monopolist per se, he became a tax collector. To be fair the government is the ultimate monopolist, but I suspect that wan’t the snarky point Denniss was trying to make.