The Energy World is Flat: Opportunities from the End of Peak Oil

Chapter TwelveFlattener #9 – Regulation and Government Intervention

Policies that aim to thwart market forces rarely work, and usually fall victim to the law of unintended consequences

Lawrence Summers

One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors

Plato

Competition is an unsound economic regulator

Samuel Insull

The role of the government

During a recent interview on television, following the launch of my book, Journey to Economic Freedom: Why Debt Slaves You, and Austerity Frees You Up,¹ I was being bombarded by questions on “the government is not doing enough”, “they should be hiring more people to create jobs”, as if it was the obligation and role of the government to hire people to reduce the unemployment. There was very little consideration to how the government would pay for them.

“The role of the government is to provide a supportive environment to stimulate the creation of jobs in the private sector. The role of the government is not to be the employer of last resort”, I answered. I am a big believer in economic freedom, and support the austerity measures taken by the government, but do not agree with many other aspects, such as the increase in taxes or the heavy burdens to entrepreneurs.

As a liberal economist, I believe the government has an important role to play, but it must contribute and focus on the empowerment of private businesses to thrive, not the reckless misallocation of capital at the expense ...