Arguments against NEMs

Put ‘government’ and ‘initiative’ in the same sentence and there will always be people who feel they can project the rest of your proposition: Statist solutions resulting in lumbering directionless projects at the behest of politicians.

Those projects exist. NEMs isn’t one of them. There’s some key points about NEMs likely to get lost in the noise of any debate on this subject. They are worth repeating:

• All the costs are borne by private sector operators, not the taxpayer. The webiste is designed and run by external companies with a mandate that frees them from government interference.
• No-one is ever forced to use it. There are no restraints on other markets, online or off. NEMs increases choice, you can use the regulated public markets if you want but anyone else can offer you an alternative.
• Government has access to facilities that, combined with new technologies, can create newly efficient marketplaces for the benefit of many. Those facilities should not remain bottled up indefinitely. They can’t realistically be released into the economy any other way.

Beyond any misunderstandings, some valid concerns about NEMs should be addressed in the legislation:

Despite these points, it’s important to recognise there will be losers in a NEMs launch. The stagecoach business never recovered from the Railway Acts in the UK. Early airlines lost out when Air Traffic Control became a regulated level-playing-field equally open to newcomers. But NEMs won’t happen overnight. Its impact will become clear progressively and it will create new opportunities for those who are flexible enough to seize a space in the new landscape that we can’t fully predict at the moment.

National rail networks in the UK created the holiday industry, a far bigger sector than stage coaching. Federal ATC increased public confidence in air travel. NEMs will spawn all sorts of new activity; and make it very low risk to try new endeavours.

We have to accept that yes, NEMs could go disastrously wrong at a point when potentially millions of people depend on it. An outage or Denial of Service attack on a system relied on by a huge percentage of the population would have catastrophic economic impact. But all centralised infrastructure carries this risk.

NEMs is a lot less sensitive than other infrastructure. Being deprived of the e-markets you took for granted would be inconvenient. But losing your water supply is devastating. It happens periodically on a small scale. It could one day happen across a whole urban area. There is no back up to the one public water supply. Yet we all accept that risk every day. We will have to do the same with NEMs.

•  Which countries?