George Walford: Freedom from Freedom

One proposed cure for our economic difficulties is that all restrictions on competition be removed. Here is one example of the way this tends to work out in practice.

In 1981 Hereford was chosen as the site of an experiment in removing all official controls from competition between bus services. For a time competition flourished, with increased services and reduced fares. But a price had to be paid; the city surveyor spoke of the creation of “major environmental problems,” citing noise, fumes, congestion and danger to passengers; the experiment had set the city’s environmental improvements back by 20 years. One passenger described the clogging of the streets by more and more buses as “unbearable.”

But these effects, although serious, are in a sense incidental; we draw attention to something else, something inseparable from unrestrained competition. The National Bus Company used its massive resources to undercut its four competitors; three have already been driven out, and as competition diminishes, fares are expected to rise again. (Observer 10 Mar 85)

Another example of the same tendency: Mr. Geoffrey Henshaw is an independent cinema operator who complains that he is being driven out of business by the big circuits; they refuse to let the independent cinemas have the new films until most of the profit has been squeezed out of them.

The Monopolies Commission has spoken against the practice, and the Government has regulatory powers which Mr. Henshaw is asking it to use. He complains: “We are not being allowed to trade in a competitive way, and under a Conservative Government I think we should be.”(Observer, 14 October 1984)

This highlights once more the paradox of the “free” market, that it can only survive under control. The large circuits have competed so successfully that they are able to exclude their competitors; in order to ensure Mr. Henshaw’s continuing ability to compete the big circuits have to be controlled, their freedom to compete has to be restricted.

If you put a lot of small, hungry fish in a pool you’re likely to end up with one big fish. Unrestricted competition tends to eliminate itself. The preservation of freedom, including freedom to compete, requires careful control.

from Ideological Commentary 18, June 1985.