Policy makes all the difference in creating wealth.
“Water services should meet the cost of the capital they employ (that is to say, make normal profits), just like other utilities such as electricity and gas. If they don’t, capital will be misallocated because it could produce more social value in other uses.”
The Executive Director of the New Zealand Business Roundtable has some insightful thoughts for the world at large in a new Frontier Centre Backgrounder.
The idea of progress is not utopian; it is about improvement. In a public policy context, for example, the relevant issue is not whether a policy change achieves a perfect solution but whether it is a move in the right direction.
Third, we have learned yet again that government regulation often does more harm than good. As the Wall Street Journal observed, the great irony is that the banks that made some of the worst mortgage investments were the most highly regulated. Bank regulators cannot possibly spot all weaknesses. More emphasis must go on caveat emptor – investors and depositors beware.
Rather than assuming people are generally fit to make their own decisions and allowing them to bear or enjoy the consequences, good and bad, the paternalist state focuses on diminishing their access or temptation, treating them as weak, impressionable victims, prey to advertisers and retailers, who need to be protected from their own foolishness.
With the National Party’s decision not to move any state-owned enterprises to the private sector in its first term if elected this year, we appear to have a new political consensus between the major parties in New Zealand: privatisation is bad. This contrasts with the earlier consensus that privatisation is good.
- Page 1 of 2