The Profits of Oppression

Luke Johnson

A greater threat to open markets than bureaucrats, union bosses or socialists are business owners who exploit regulations to prey on entrepreneurs, argues well-known commentator Luke Johnson of the UK private equity firm Risk Capital Partners.

He writes: “Politicians, civil servants and their co-conspirators – lawyers – justify their existence by endlessly passing new legislation that restricts free trade.

“They are aided in this task by parasites who subcontract to government, exploiting monopolies, grabbing licences and restricting new rivals.

“There is always some spurious rationale for fresh edicts – harmonization, protecting consumers, preventing abuses, and so forth. The effect of such interventions is often stifled competition and unintended consequences that damage the public.

“There are more than 650 regulatory bodies in Britain, each making the entrepreneur’s life just a little harder.

“Regulations tend to help big companies. They act as barriers to small newcomers. Be it broadcasting, pharmaceuticals, banking or insurance, my experience has been that the rules favour incumbents.

“Established businesses have permissions and licences that newcomers struggle to obtain, they have connections to regulators, and they also capture the very watchdogs that are meant to oversee them.

“This big-business establishment resists innovations because they might undermine their oligopoly, margins or special privileges.”

CopyRight – OnTarget 2012 by Martin Spring