“We got commission control 40 years ago when economic illiterates believed that control was better than competition at ensuring that consumers get more for less. Having learnt from their mistake, most countries abandoned commission controls long ago. Commission regulation increased prices for the obvious reason that consumers were no longer allowed to pay brokers enough to keep them in business, especially at the lower, mostly black, end of the market. That forced insurers to build new marketing, advisory and distribution costs into higher prices passed on to consumers. After 40 years of failure, our Financial Services Board marches on in its failed direction”.
Read Leon Louw’s latest column Kafkaesque reality has been allowed to intrude on us in form of FSB first published by Business Day in BDlive today.
Further extract
IMAGINE private enterprise being controlled by communists. Imagine them having no idea what competition is or how it works. Then imagine them having a bureaucratic empire so all-knowing and omnipotent that it makes laws more easily than Parliament, runs quasi-courts without judicial checks and balances, and imposes bigger fines than courts. Go on to imagine mysterious, faceless, unaccountable megalomaniacs controlling you from behind closed doors, implementing and enforcing decrees, sentencing and fining supposed transgressors, and then keeping the money. Mercifully, that could never happen in our open and democratic society, with our accountable transparent legislature to produce law, independent judiciary to adjudicate and our executive branch of government separated from both by the Constitution to perform administrative functions. Or could it? That Kafkaesque reality has in fact crept up on us unnoticed and unchecked in the form of the Financial Services Board (FSB).