Sunday, June 20, 2010

Do we still live in a free market?

The Independent has a populist piece about "fat cat barristers" making too much money, loaded with threats from the "Enterprise" Minister. It would be funny if we were talking about some tin pot little communist regime, but this is Ireland? I know that we are in a recession but state mandated fee cuts for professional services? Presumably these fees are being freely negotiated and parties have a choice with regard to paying them or taking their business elsewhere. While there is limited room for state intervention if there is evidence of obstacles to competition, these sorts of populist moves have no place in a free market economy.

Have a look at some quotes from the article:
Figures from the Central Statistics Office reveal that, while every other section of the workforce, from civil servants to builders, is experiencing pay cuts, legal fees were 2.8 per cent higher in "the latter part of 2008'' than their average for that year.

... not all professions are suffering equally, for outside of our legal friends, accountants, PR people and management consultants reduced their fees by just 1.5 per cent.

The bad news for our cosseted elites is that Enterprise Minister Batt O'Keeffe has written to the representative bodies of the major professional services and told them to reduce fees as "a gesture of fairness to the public and in the spirit of competitiveness".
The minister has also commissioned a three-pronged investigation into excessive professional fees.
Speaking to the Sunday Independent, a senior departmental source noted growing concerns about professional profiteering that "the minister is quite happy to use the carrot to resolve the issue, but the stick is lying in wait should it be necessary''.

The source added that Mr O'Keeffe wants professionals such as "barristers, solicitors accountants, doctors, dentists management consultants and others to cut their fees by at least 10 per cent''.
It is believed the minister was particularly unimpressed with "our legal friends who are spending too long tinkering with Daniel O'Connell's snuff box in the law library and are totally removed from the pressures being experienced by ordinary citizens''.
The Sunday Independent was told the minister also thinks it is "time for the rest of the professions to come into line with what is happening in the real economy instead of living in the current Narnia where they are still charging Celtic Tiger rates''.

Some of these remarks from the "source" are quite comical. I doubt if Irish (Narnian) barristers are quaking in their boots at what the White Witch (Enterprise Minister) might do to them with the "stick".

More evidence of lack of competition - and less talk - would be the way forward if the state wants to hit "fat cat barristers." Until then, law is still a good career option come boom or bust.