Thread by @syrpis

The right wing of the Tory party was back this week... with the 'deregulation = growth' line.

A thread, with an EU dimension, on why this isn't true, and why, if one needs to be simplistic, deregulation = not growth, but inequality. 🧵1/

It is easy to ignore this sort of line.

But this sort of sloganeering is effective (think 'take back control'), it changes people's minds, and it distorts the public debate. 2/

If it were true, deregulated economies would be the fastest growing; and growth would accelerate in the wake of deregulation.

But... Such evidence is lacking. There is no strong correlation between deregulation and growth. 3/

The reason is that regulation (and deregulation) comes in all shapes and sizes. A useful starting point is to think about why we have chosen to regulate particular markets in particular ways. 4/

Economics suggests that regulation is often a response to market failure.

It is called for when there are 'externalities', when there are 'information asymmetries' or 'inequality of bargaining power', and where firms (eg monopolies) are not subject to market discipline. 5/

In less economic language, it is about ensuring that checks exist on those with (too much) market power, and about ensuring that those without market power are protected.

If you change that balance, you can start to tackle inequality. 6/

There is, of course, a lively debate about when regulation is needed. It is possible to take different views about whether a market is working well and whether intervention is needed; and about what sort of regulation should be introduced. 7/

So... regulation may be thought of as 'cumbersome' or 'paternalistic', or as 'red-tape', or as having too great an effect on small business.

Conversely, it may be 'friendly' or 'smart' or 'agile'. 8/

That debate is long-standing, lively, and cuts across familiar political lines.

What is troubling is the straight-forward, simplistic, assertion that regulation is bad, and that deregulation is good. 9/

And... as so often with the right wing of the Tory party, the simplistic assertion is applied with extra force to things which have a connection with the European Union.

The EU Retained Law (Revocation and Reform) Bill is the case in point. 10/

In brief, rules which emanate from EU law (pretty much a random list) and which have not been implemented via primary law (again, pretty much a random list) will be revoked, unless ministers decide that they need to be retained. 11/

This is not just regulation, but pernicious, anti-democratic, EU regulation, so, per the Tory right, in order to enable growth and a 'post-Brexit recovery', the presumption is that it should be revoked. 12/

Perhaps the most infuriating aspect is that the Tory right knows full well that regulation is needed... and that it intervenes all the time to ensure that markets operate in better ways (see eg the interventions re energy prices). 13/

Like on some many issues, a more productive, nuanced, debate is possible. But so long as the Govt continues to govern by slogan, or to be in thrall to those who only think in slogans, it isn't going to happen. And we're all suffering the effects. 14/14