The open market must work to benefit consumers to ensure positive change, according to ACCC chairman Rod Sims.
Speaking at the 2017 Australia Conference of Economists in Sydney, Sims reiterated the importance of public confidence in open-market economics amid growing distrust by consumers.
While praising the benefits of open and competitive markets, Mr Sims also highlighted the need for appropriate regulation to restrain the potential harm from a profit motive that is not always channelled towards productive ends.
“I feel strongly that we will all be considerably worse off if this increasing disillusion with a market economy goes unchecked,” ACCC Chairman Rod Sims said.
Sims expressed disappointment that modern economic theory had not been more influential in shaping public policy and bending the open market economy towards outcomes beneficial to consumers.
“The vast majority of what companies do is to the benefit of consumers. They spend a lot of time reducing costs, improving their products and opening new stores or facilities. This is why free market economies are so successful,” Mr Sims said.
“However, as anyone with any commercial experience knows, businesses are at least as much focussed on reducing competition and keeping potential or actual competitors out of the market as they are on ‘satisfying the needs of consumers’.
“It is not enough, therefore, to assert that the profit motive will always drive progress. Destructive, anti-competitive business practices must be discouraged so profits are not sought at the expense of long-term economic welfare.”
