Free markets mean free people; many times we have heard conservatives say those five words? But regulation always seems to creep into our “free” markets, often for many sensible reasons; protecting the environment, promoting safe practice at work and preventing dangerous products from hitting our shops. Regulation makes people feel safe and any attempts to deregulate often leads to shouts of pure rage from those on the left. Britain has never really seen a libertarian party gain prominence, Labour slightly dabbled in it in the 70s, the Liberals & Liberal Democrats have usually toed over the line a little bit, but the Conservatives have consistently remained rather authoritarian.
One could argue that you cannot have true economic freedom without embracing libertarian views and that is why the conservatives have always struggled to make the moral argument for truly free markets; because the Conservatives have never really believed in them themselves, but there is a moral argument to be had for truly free markets. It would be impossible for one to write about every market and the merits of deregulation within those markets inside a single article, so I am going to focus on just one market and that is housing.
The United Kingdom is currently facing a housing crisis, put quite simply there are not enough homes and of those homes that exist many are far too expensive to allow many people to even hope of purchasing one. Those two issues are intricately linked through the basic principles of supply and demand but the root cause of it is the over-regulation of the housing market. The average cost of building your own home is just £84,000 according to the National Self Build Association, but that same house on the market would be valued at £189,000 on average and substantially more depending on what parts of the country you live in.
The problem sits within our planning system, a developer might take years to get permission for a large project, having to employ multiple designers, architects, and other experts, often paying these consultants multiple times over as amendments are made or certain aspects are rejected, this costs an extraordinary amount of money with then inflates the cost of a new home. Similarly, Local Strategic Development Plans tell developers where and when they can build, massively restricting the availability of plots of land and the number of homes being built, again inflating the cost of both.
If we were to deregulate this market, we would no doubt see mini-revolution in home building, not just from developers but from “DIY builders” who might be put off by the complexity, time and difficulty involved with building your own home. If we were to create a truly free housing markets, developers would be able to build houses to match demand, this would both solve the shortage of houses and help to bring down the cost of houses to more realistic levels, especially near major cities such as London where most people can only dream of owning their own home.
An argument can be made even for deregulating wages by scrapping the minimum wage, by the very act of setting a minimum wage we set a standard salary for all low skilled jobs across the board, an employer is going to be very unlikely to pay a cleaner or a laborer above minimum wage because the precedence has been set by the existence of a minimum wage. Unemployment is at a record low, by all laws of economics wage growth should be soaring across the country, but they aren’t. Ordinarily, when unemployment is low, employers have to fight for every single employee they hope to employ and usually this is done by offering better remuneration. Unfortunately the minimum wage dictates the worth of a low skilled worker to both the employer and the employee, if we were to scrap the minimum wage we would see all wages begin to grow far more organically because an employee would then be paid their true value, instead of the artificial value imposed upon them by the state. The minimum wage is no longer seen as a minimum, it is seen as the average for low skilled work.
People will always be wary when we talk of deregulation but until we start making these arguments for truly free markets we will always be shackled by the regulations that hold these markets back. This article only addresses housing and wages but examples can be found in every area of every market and it is time we allow the organic growth and direction to dictate how these markets work, not politicians in the Westminster bubble.
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