Freedom Upsets Patterns: The Deregulation Argument Westminster Will Not Have

0:00Freedom upsets patterns the deregulation argument Westminster will not have by Elias Sanchez. The United Kingdom's economic deceleration is conventionally attributed to fiscal consolidation, anemic productivity growth, and the supply side dislocations that followed Russia's invasion of Ukraine. These are real constraints. But treating them as primary causes rather than downstream symptoms is a misdiagnosis, and an increasingly costly one. The deeper pathology is regulatory density, an accumulated architecture of formal constraints that suppresses entrepreneurial discovery, crowds out new entrants, and reduces the adaptive capacity of institutions. It is this environment, not fiscal tightness alone, that arrests the spontaneous bottom-up processes of coordination

1:03upon which market economies depend for long-run resilience. The human cost of this misdiagnosis is not abstract. In 2024, approximately 12.2 million households in England were spending more than 10% of their income on domestic energy, according to data from the in-fuel poverty coalition and the Department for Energy Security and Net Zero. Fuel taxation and green levies embedded in energy bills function as a regressive flat charge, falling proportionally hardest, on those least able to absorb them. The regulatory architecture that produced those costs was not designed around the subjective circumstances of the poorest households. It was designed around policy targets, statistical projections, and the administrative convenience of large established suppliers.

2:08The same logic crushes new entrants from the other end. As OVO energy disclosed in testimony to the competition and market's authority, crossing the threshold of 250,000 customers, triggers obligations under the energy company's obligation worth millions of pounds, not merely in direct compliance costs, but in the specialist staff and systems required to meet them. The result is a regulatory structure that penalizes growth and trenches incumbents and systematically destroys the incentive for entrepreneurial discovery precisely at the moment it becomes viable. These are not accidental policy failures. They are the predictable consequences of a planning logic that substitutes the regulator's statistical model of reality

3:09for the dispersed living judgment of individuals. Regulation of this kind does not merely produce bad outcomes. It commits a prior offence. By designing policy around aggregate patterns, it treats human beings not as creative, self-determined agents, but as variables to be managed. It presumes an effect that human capacity is best expressed within a constrained and coercively assigned set of actions. This is not governance. It is in a tradition of economic thought running from Friedrich Hayek through to more recent scholars of entrepreneurship, a form of epistemic violence, a systematic assault on the spontaneous, inalienable capacity of individuals to discover, combine and act on knowledge that no central authority can fully observe or anticipate.

4:11D-regulation in this context is not an ideological preference for a minimal government. It is a functional and moral imperative. The institutional failure of offgem and what should replace it. The case for deregulating the UK energy market is not at its core a case against regulation in the abstract. It is a case against a specific institutional logic, one that offgem embodies completely. Offgem is not staffed by incompetent people. The problem is structural. As a public body whose mandate is shaped by political objective determined in Westminster, net zero targets, price cap mechanisms, consumer protection metrics, it is constitutionally incapable of enabling the kind of entrepreneurial discovery the energy market requires.

5:11Its compliance architecture, as the OVO case demonstrated, does not create a level playing field. It creates a cliff edge that punishes growth in trenches incumbents and eliminates the middle tier of firms that would otherwise be scaling alternatives to oil and gas. Reforming offgem's threshold rules would change the clothes without changing the body. The institutional DNA optimizing for political goals rather than entrepreneurial freedom would remain intact. The question then is not whether to dismantle this architecture, but how to do so without exposing in the most vulnerable households to the transitional costs that inevitably accompany structural reform. Argentina offers an instructive, if imperfect, precedent.

6:12When Javier Miele established the ministry of deregulation and state transformation under Federico Sturzenegger, he created an institution whose explicit mandate was its own progressive redundancy. Abolishing regulations at a rate that, according to Miele's own account of the program's pace, reached 3.5 per day at its height. One early result was rent decontrol, which according to analysis published by the Library of Economics and Liberty, caused the supply of available apartments to nearly triple with real prices falling by as much as 40%. Entrepreneurial discovery, once unshackled, moved faster than any quota target could have anticipated. The UK is not Argentina. There is no hyperinflation to stabilize.

7:14No currency controls to lift. No parallel exchange rate to close. The macroeconomic starting conditions are different in degree, if not entirely in kind, but the institutional logic is transferable. What the UK requires is a body modeled, not on of Jim's regulatory mission, but on Sturzenegger's deregulatory one. Centralized initially to manage the macroeconomic stabilization, that precedes liberalization, but with decentralization, written into its constitutional mandate. Authorities should devolve progressively to local and community-level bodies, so that the administrative logic never scales into the dense regulatory architecture it was created to dismantle. Of Jim's supply side functions, its oversight of production, entry thresholds and compliance obligations

8:17on energy suppliers should be the first to go. Its consumer protection role, particularly for low-income households, still exposed to regressive energy pricing, should be ring-fenced temporarily as a transitional floor. The precise institutional design of that transition is a matter for further analysis. What is not a matter for further analysis is the direction of travel. A deregulation body that measures its own success by its own diminishment is the only institutional form consistent with the argument being made here. The wrong question. The entire British policy debate about energy has been asking the wrong question. From net zero frameworks to hydrogen strategies, from offshore wind targets to nuclear commissioning timelines, the political class has proceeded on a single

9:20unexamined assumption that a state can know in advance which energy technology will define the future and that the function of policy is to back that technology with subsidies, mandates and regulatory architecture. This assumption is not merely inefficient, it is epistemically presumptuous, and a tradition of economic thought stretching across most of the 20th century has explained precisely why. The core insight developed by Friedrich Hayek and later extended by economists working in the same tradition is that knowledge in a society is not concentrated in any single mind or institution. It is dispersed, tacit and irreducibly personal. No central authority can aggregate it without fatal loss. From this follows a further argument developed by

10:21Israel Kirsner, the economist who first formalized the theory of entrepreneurial alertness. The entrepreneur is not a planner, but a discoverer, someone who notices opportunities that no model predicted and no committee commissioned. Hesu Swerta de Soto, the Spanish economist whose 2010 work socialism, economic calculation and entrepreneurship radicalized these insights, grounds entrepreneurship not merely in market function, but in human subjectivity itself in the inalienable creative capacity of individuals to combine and recombine ideas in ways that formal systems cannot anticipate, replicate or substitute. Whether the energy technology that liberates the UK from oil dependency will be lithium, tidal, nuclear, solar,

11:22or something no government white paper has yet named, we cannot know. That unknowability is not a policy problem to be solved. It is the very condition that makes entrepreneurial discovery possible. Every formal framework that picks a winner, every subsidy architecture, every regulatory mandate, every net zero target, backed by compliance obligations, does not accelerate that discovery. It forecloses it. It substitutes the state's necessarily limited model of reality for the anarchic, iterative, recombinative, creativity of human minds operating outside the parameters of formal legibility. This is the indictment. Westminster has not merely made inefficient policy choices. It has, through the accumulated weight of regulatory density,

12:22committed a sustained act of epistemic presumption, substituting its own patterns for the spontaneous order that only free human subjectivity can generate. The cost is not measured only in GDP points or productivity gaps. It is measured in the energy firms that never scaled the technologies that were never discovered, the entrepreneurs who were regulated into stillness before their ideas could compound into something transformative. It is measured in the 12.2 million households identified by the infuel poverty coalition and confirmed by the Department for Energy Security and net zero, spending more than a tenth of their income keeping the lights on. Not because energy is inherently scarce,

13:23but because the regulatory architecture has made it so. The urgency is real. Every year this architecture remains intact is another year of suppressed discovery, compounding dependency, and preventable poverty. The transitional costs of reform are real, too. Argentina's experience makes that plain. But the transitional costs of inaction are invisible only because they are diffuse, chronic, and fall most heavily on those with the least political voice. Robert Nosek, the philosopher who argued that freedom inevitably disrupts any pattern, a state attempts to impose, wrote that freedom upsets patterns. It does, and that is precisely the point. The pattern Westminster has imposed on the UK energy market

14:23and on the human subjectivity that should be its most productive force is not a feature of good governance. It is the problem. Deregulate that freedom and what emerges cannot be predicted. But that unpredictability is not chaos. It is the precondition for every discovery that has ever mattered. For more content like this, visit meases.org.