Friday, 10 June 2011

State non-intervention getting things done.

I am a fan of a small state - as small as possible. However the state is needed and has some responsibilities - primarily national defence and administering the rule of law.

Here in Brighton there is a large student population and property is expensive so there is a substantial lettings sector. Many tenants and landlords seem dissatisfied with the existing lettings agencies, and with a new Green council who are keen to secure the student vote it has been suggested that the council should create and run an 'ethical lettings agency' or at least regulate the existing lettings agencies more.

As a fan of a small state, the less the council do the better in my view, and both options are interventionist and likely to be expensive and bureaucratic. So I present my solution - a solution that could address many areas - particularly where *legal* fees seem to make up an inordinate proportion of the expenses!

I suggest that a government agency produce sets of standard contracts, in this case a property rental agreement. It should cover most standard situations and be freely available for anyone to use. A national standard contract would be very inexpensive to produce and would mean the legal element of the transaction is commoditized. Almost all cases of legal dispute could be sorted out quickly and cheaply through local arbitration which would rapidly build up precedents for all likely situations. No one would be obliged to use these contracts, but their advantages (to everyone except lawyers) is obvious. The arbitration could be financed by the taxpayer (as courts currently are for legal disputes), or there could be a 'stamp duty' charged on the registration of a contract - the fee being used to finance a fund to pay for the costs of an arbitration service.

So for very little cost (and an overall huge saving) the state could perform one of its absolute duties (administering the rule of law) - with minimum intervention or interference in the market.

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