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Anorak | Lefty economist spouts bollocks about regulation

Lefty economist spouts bollocks about regulation

by | 2nd, May 2012

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

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Posted: 2nd, May 2012 | In: Money Comments (3) | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink