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Corporate governance « Previous | |Next »
May 29, 2003

Corporate governance does not just refer to the way corporations govern or misgovern themselves within the marketplace. It also includes the way that the state regulates the market. It includes the way the proceses sof the market allow the retail business to be dominated by Coles Myer and Woolworths in Australia These corporations just get bigger and bigger as they move into liquor stores and petrol chains.

And the federal government stands by and watches the duopoly grow. It basically says that there is competition between the two big retailers. Hence we have the benefits of competition. Thats all that matters. It is big business. But is it genuine market competition?

What would Graeme Samuels, the new (acting ) head of the Australian Competiton and Consumer Commission, do? He is alleged to be in the pocket of big business----the true competitive capitalists in the business world?---by some; and has a sold faith that competition is the best way to promote the public interest, consumer welfare and sustainability. Will we expect a push for some anti-trust action in the name of increasing competition?

Samuels has to work with the confines of the Trade Practices Act and case law. But that legislation has its philosophical roots in the ethos of the liberal market. So we can ask: What about the independent retailers? Or the independent fuel retailers? Aren't they meant to be the stalwarts of the free market?

Isn't the ethos of the market meant to be something like this. We should:

" the dynamism of the self-organizing market and reject any attempts by bureaucrats and politicians to suppress competition...celebrate the decentralized decision-making of market capitalism and those quick-thinking, street-savvy entrepreneurs who take risks and use the unique knowledge they possess to take the opportunities open to them."

If so shouldn't we be using this:

" vision of a society of independent, self-employed producers to criticize the concentration of power in capitalist society; be deepy critical of the reality of liberal society in which the new forms of corporate organization and hierarchy (eg., major media players) act to make individuals subordinate to higher authority. So... [shouldn't we].... dismantle these concentrations of political and economic power and then distribute power and property as widely as possible to ensure that Australia becomes a nation of dynamic entrepreneurs."

Somehow I do not think that is what Costello and Samuels mean by a competitive market. It is Hayek though. Wasn't Hayek the public philosopher behind compettion policy? Or am I mistaken?

| Posted by Gary Sauer-Thompson at 11:53 AM | | Comments (0)