Brendan Ryan (Labour)

I cannot resist commenting on the free market. Perfect competition is one of the great myths of the 19th, 20th and 21st centuries since it demands, among other matters, that the departure of any market participant will have no effect on the marketplace. Given its scale, the closure of Senator Quinn's wonderful chain of supermarkets would have a significant effect on the market. Once a market has been established with five or six participants, free competition becomes distorted, a fact every economist recognises.

John Kenneth Galbraith described such a market, not as monopoly but as oligopoly, a concept I do not intend to pursue too far. I apologise to the people who have to keep a record of this House for using words like that. Free markets have always been an interesting concept by which to make interesting mathematical models. Even Adam Smith recognised over 200 years ago that wherever the possibility existed people in a marketplace will attempt to fix prices.

There are many areas of life where healthy competition provides the best for both vendor and customer. There are also very interesting stories about big multinationals such as ICI at its height, who decided to introduce concepts like "internal markets" and ran into problems. Every time a new drug was to be made, everybody was to compete to tender for its production and that still happens a bit. The problem was that when any branch had a new idea, they held on to it themselves because it gave them a competitive advantage over the other branches of the multinational company. In the process this meant that the multinational parent only benefited from innovation in one location because every other location was deprived of that new idea.

I have no problems with markets and I was making the same point 20 years ago when I arrived in this House. I have never had a great enthusiasm for nationalising everything, any more than I have a great enthusiasm now for privatising everything. One must be a pragmatist in these matters. I do not think there is an argument here based on concepts of market economics that is capable of dealing satisfactorily with all the issues.