Competition Confusion in the UK
UK Member of Parliament (former Conservative Party Cabinet Minister) Kit Malthouse published an essay in CapX earlier this month titled “We need a competition revolution.” I, of course, completely agree that competition is vitally important to any economy, and the UK has been struggling with productivity and growth challenges that may be linked to competition issues. But as I read Malthouse’s piece, I found myself increasingly disillusioned.
Rather than take an evidence-based, market-oriented approach, Malthouse paints a dire picture of rampant monopolization across British industries: “we see the same pattern: a handful of dominant firms controlling vast swathes of the economy, shutting out competition and stifling innovation.”
Malthouse’s argument suffers from two fundamental problems: it is wrong on the evidence, and it is wrong on the economy theory. Besides that, it is not a bad piece.