The Role of Competition in Ireland’s Economic Recovery

A number of the papers/presentations from last week’s Competition Authority conference are now available: see here. 

Last night’s The Frontline programme had an interesting discussion on competition in the market for GPs, among other topics related to the functioning of the health care system: see here. 

Coming soon . . . a guest post by regular IE contributor Paul Hunt on the failures of the “competition model” in key utility industries.

24 replies on “The Role of Competition in Ireland’s Economic Recovery”

Ireland will leave the Euro long before it dismantles the privileges enjoyed by those in the medical and above all the legal profession in this country. To introduce real reform, to dismantle these last of the guilds in Ireland, would be to turn almost 500 years of Irish social and political order upon its head. Such is their influence, social, political and technical on this country, I do not believe that the Irish legal profession can be reformed by anything short of a revolution.

If Irish solicitors–already mired in property related debts–scent the end of their absolute monopoly on Irish law, the country will default and return to a Punt in short order.

@OMF
There is no reason why we can’t achieve legal reform. This has already been done in Britain, and other countries which inherited the British legal tradition (e.g. Australia) are looking to follow their example.

How about the role of competition in Ireland’s ruin ? Anglo set the pace and all the other banks followed them over the cliff.

The Competition Authority clearly has an exemplary handle on competition policy when it comes to elites.

Its members are set to earn €137,000 per annum.

It must be an immense relief to the ECB, IMF, Merkel etc, to learn that the government is reining in public pay.

Reform? There will be no reform. There will be plenty of guff about it, but it won’t happen.

For decades government inaction on liability incentivized the legal profession to gouge as much as possible from the compensation candy mountain. Even the combined influence of ISME and IBEC could not get government action until the Celtic Bubble was off the ground.

Lawyer conferences on medical negligence are regular events. A few years back one of the main medical insurers (UK-based) threatened to stop all over more or less overnight in obstetrics forcing the government to come up with a cobbled state solution.

Who was the guy that drew up the bank report and expressed surprise that so many of those he interfered had lawyers in tow?

Edit above:” Who was the guy that drew up the bank report and expressed surprise that so many of those he interviewed had lawyers in tow?”

Again the economic community is striving for efficiencies when it gives no surplus to technological capital development.
Malthusian equations become inevitable under these conditions.

The decline of the military industrial complex into a more feudal contractual / monetory relationship has deprived society of a outlet & excuse for pure technological developments without cost constraints.

The efficiencies withen western economies since the late 60s is more and more a product of reducing redundancy withen systems rather then real advancement.
Since the days of neolithic man he been striving to reduce labour inputs but it seems much like Roman times the west has become complacent with its slave / oil inputs and is thus happy to increase workloads on human beings with little regard for the effeciency of output in a holistic manner.
A Lord of the flies decent into anarchy awaits if we cannot measure & act on correct energy inputs and outputs and particullary wether they are net energy negative or not.
The cost of these projects is immaterial if they have a negative return.
The decapitalisation of society for the last 40 years is now feeding into the system via a negative feedback loop.
It is pointless to make savings in a closed system when those savings are wasted on useless consumption.
A synthesis of Austrian & Keynesian ideas is badly needed – i.e personnel savings but with ambitious and possibly large but well managed capital projects.
Otherwise we will continue to pour water into a perforated bucket.

This is a Minsky moment now – we are on the edge of the precipice.

Take it easy DoC, we’re facing nothing so apocalyptic. Ireland is merely returning to its natural state: A run down basket case when the only opportunities available are gombeen politics, the church, poverty, or emigration.

And you can scratch farming off that old list. The competition authority might be putting on its kid gloves with the doctors and lawyers, but if the farmers dare seek to challenge the monosonys of the big retailers, the authority is swift to initiate office raids to crush dissent. Once again, our institutions are remarkably selective in picking their battles.

Presumably through these policies, the government feels that the country can base its economy on hospitals and people suing one other. Since the previous government felt that an economy could be based on people selling houses to one another, I don’t think this is an entirely unlikely government strategy.

People forget the Teaching/Lecturing/University profession who must be the best paid in the World based on the contracted hours/weeks worked and millionaire pension pots. But then they are not subject to any Competition Authority or for that matter Oversight Board to see if we get value for money ?? Quinn has been making noises about making them more accountable but one can expect he will be rebuffed easily especially when the three most Senior posts in Cabinet are held by Teachers. Strange way to run a country !!!!

@Ronnie O’Toole

The Australian States are way ahead of the UK when it comes to legal innovation and reform.

The UK made an unholy mess of conveyancing which it is trying to unravel.

The time time for competitive reforms was a generation back, before Chindia was free-gifted modern technological production resources and thence were able to deploy their millions of jobless. Becoming competitive means being willing to reduce our standard of living to Chindia’s level. That’s OK? Yeah! I Thought so!

@DoC: “A Lord of the Flies decent into anarchy awaits if we cannot measure & act on correct energy inputs and outputs and particularly whether they are net energy negative or not.”

I have a bad feeling that only a few folk know what you are referring to. When they do – it will also be too late. We will have already passed through that event horizon.

There was a short Energy Policy symposium last week (CMcC organized). None of the three main contributors made any reference to energy costs in terms of energy units (they used monetary costs). The Prof from Oxford (Dieter Helm) was gushing about the ability of emerging and unknown and yet to be developed and deployed technologies to drive western economies ever onward and upward. Incredible!

Do folks actually, really, truely believe, that in a finite system, with finite resources, an exponential growth plot-line will NEVER inflect over and decay back the way whence it came?

Brian Snr.

TRP
clearly you missed the classes on capitalisation in school. Plus, the conflation of two different levels in education with an administrative structure. Apart from that a good post. 🙂
(IANAT)

@Obseesive Maths Freak

Never has Ireland depended so much on foregin capital flows as it does now – the contraction already beats the Edwardian collapse hands down.
There is no organic internal capital to call on – its a hollow trading shell.

The banks have stretched everything to extreme thinness to get a reward – the cloth is already thorn and without a major effort it will get ripped to shreds as the continent attempts to recapitalise at our expense.

Our borderline mentally retarded / corrupt petty elite have launched us into a monetory and free trade abyss.
The only thing we will have left to show for this in a few years will be a Eurovision winner as our continental betters will display some theatrical compassion for our stupidity.
My God what have we done ?

The Competition Authority is now a very recognisable brand. We’ve established our credibility as an agency. People take us seriously. We box considerably above our weight, both in Ireland and among our international peers.
 Competition culture is becoming established in Ireland, not just among policymakers, but among the public at large.

I find it difficult to believe that the Chairman could make the above claims with a straight face.
That is not the way it is:
1. We have gone from almost the lowest energy costs in Europe to the one of the highest. Yet the energy sector employees are the highest paid in the State. How did sham competition help that?
2. The legal profession has not been tackled at all despite that fact the cheques are being paid by the State. The fact is nobody wanted to break the cartel because their sons, daughters, etc might benefit.
3. The legal profession is out of bounds for ordinary people.

I regret to say that listening to the Chairman’s and other claims of success is a little bit like to listening to a well paid Janissaary corps lauding its successes to the troops while in the near background the bloated trappings of empire are dragging what is left of the rotten empire into the abyss.

@Dork

Many readers will be quite tired when skimming through posts on this blog. Sometimes I get the sense that if I had the spare energy, there would be really interesting things hiding in yours. Is there any chance you could make the posts a little less impenetrable for those of us who give up half way through?

@Brian Woods Snr
Karl Denninger has produced a amazing graph recently , it is quite something.
Post 1980 growth has not been real growth in the States and they have the reserve currency !!

market-ticker.org/akcs-www?singlepost=2593664

I remember M. Harney talking monetarist nonsense on the Late Late Show a few years ago and she wanted Ireland (a poltical a economic province /pygmy) to follow the Pied Piper Friedman into the abyss.
I cannot remember if we were in the Euro or punt but even this Dork was aware of her stupidity back then but why not the establishment ?

What were they thinking when they were feeding at the through ?
Being more of a squaddie rather then a officer during the boom years I got to see the real malinvestment and madness squared I guess.
There is a monumental divorce from reality amongst the elite of all western countries.
When the 18th &19th century local merchant class of my Lilliputian city got down to business it was more visceral somehow or at least I think it was – this divorce from reality especially in Brussels & Frankfurt is especially disturbing.

Goggle : The Exchange at Cork 1815 > Cork: Merchant Princes > Cork City …
I keep thinking of Imperial Rome now especially during Caligula’s & Nero’s reign rather then London’s early to mid 19th century direct malice , they learned from their mistakes at least for a period while the continentals always favour a more direct and inefficient rule.

@dork and @omf
Try cheer up a bit. Get some fresh air, don’t take yourselves so seriously. Do some exercise.

@PRGuy

I wonder if it just maybe it means house prices are nowhere near the bottom yet?
Even close to the bottom yet?

@PRGuy

Those mortgage figures – the 3000 odd approvals for the first three months – need to be drilled into. How long is it taking for mortgage approval? What LTV ratios are the institutions using? How many ‘new’ mortgages are actually remortgages (a useful fact to have)?

I wonder are these figures massaged the same way the credit to SME figures are massaged by the convenience of cajoling overdrafts and credit card debt into term loans?

@The Alchemist

Surely you are not suggesting that pillars of society such as banks might not be as transparent as they should be? You’ll be telling me next that they hire people from respectable industries … PR for example… to help them ‘present’ this type of data.

In all seriousness, those figures are so bad that I had to do a double take myself. I wonder how much though is difficulty in obtaining the loan versus people waiting until they think the market has hit bottom (esp. first time buyers – in both instances).

@Noel

You may well be right.

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