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A competitive market place? « Previous | |Next »
February 26, 2003

There is an interesting paragraph in the newsletter of 21 Feb that is built around this article in The Age. The paragraph exposes the myth of Australia as the land of free market capitalism. It says:

"Is there another country which has so many dominant players in different
industries? Rupert has 70 per cent of the newspaper market, Westfield has 40 per cent of shopping centres, Telstra makes 90 per cent of the telco industry profits, the Big Four banks now dominate the entire financial services industry, Qantas has 70 per cent of the domestic aviation market and even Foster's and Lion Nathan have a duopoly over the beer industry."

I thought that the whole point of the neo-liberal mode of governance was to create competitive marketplace nor the concentration of economic power? Competition brings efficiency. Remember that mantra from the boosters? A competitive marketplace that had broken free from past constaints was to be the upside of globalization in that competition would deliver economic growth.

So where is the competition? Where are the bright, free-market economists calling for the bust up of the big companies in the name of competition between small, freewheeling, non-bureaucratic companies that maximize creativity and linked together in decentralised networks? Was not the creative, innovative entrepreneur who started off in his garage with nothing but his talents and self-confidence the big answer to poverty and inequality?

| Posted by Gary Sauer-Thompson at 8:02 AM | | Comments (3)


my sentiments precisely. what people think of as a free market really just amounts to dominant players bullying the small ones or killing them off completely. it's hardly survival of the fittest, just survival of biggest. some competition.
not forgetting how the GST has killed off a lot of small businesses too.

Perhaps competition ideally does foster new entrants and see them evolve. It certainly does still have the ability to weed out inefficient players in the market-place, as the collapse of Ansett, HIH and OneTel can attest.

The evolution of start-ups to mature players always was extremely difficult and indeed, may be getting more so. We need to be careful that we don't ignore more powerful forces which may be at work, countering this competition effect. Now you don't have to be Einstein to look at a modern industrial state, to work out what some of these countervailing forces are. You see them at work producing Globalisation of industry.

The question is, in the absence of competition would the number of players be more or less, and would we be better off?


You are quite correct. A GST has killed off quite a number of small business hopefuls, just as any Govt. requirement always raises the entry bar. My own experience, suggests a lot of part-timers and back-yarders were flattened by the minimum quarterly ATO BAS return requirement of the GST.

What about PAYEE tax, Wholesale Sales Tax(GST's wicked step-mother), Superannuation Guarantee, Workcover, Company Tax, Fringe Benefits Tax, HECS Tax, Child Maintenance Tax, ABS returns, as well as a host of licences,charges and Regulations specific to a particular industry, which we have to deal with? These all raise the bar to new entrants.

Are you suggesting we as a society knock all these on the head in order to give the little bloke a go? Sounds like you're a Laissee Faire man to me if you are. Enough to warm the cockles of any business-man's heart, but I won't pop it in my forward business planning just yet!