“Free markets” and “free trade” as a religion, by Robert Henderson – Replies, Anyone?

Anyone fancy responding to this? An obvious response is to ask RH to define the laissez-faire religion he is attacking, and to distinguish this from corporatism, and then to ask if he knows anything about the economics of public choice and regulatory capture, or about the effects on business scale and morality brought about by infrastructure subsidies and the tax and regulatory burden….SIG

http://livinginamadhouse.wordpress.com/?p=590

Free marketeers fancy themselves to be rational, calculating beasts. In reality, their adoration of the market is essentially religious. They believe that it will solve all economic ills, if not immediately, then in the medium to long term. Armed with this supposed objective truth, they proselytize about the moral evils and inefficiencies of public service and the wondrous efficiency and ethical outcomes of private enterprise regardless of the practical effects of their policies or the frequent misbehaviour of those in command of large private companies. Their approach is essentially that of the religious believer.

Like the majority of religious believers, “free marketeers and traders” are none too certain of the theology of their religion. (I am always struck by how many of them lack a grasp of even basic economic theory and are almost invariably wholly ignorant of economic history). They recite their economic catechism sublime in the concrete of their ignorance.

The religion has its roots in the first half of the 18th century when there were occasional attempts to suggest tariff reform, but the idea only became a serious political policy in the 1780s with the advent of Pitt the Younger as Prime Minister in 1784 who long toyed with “economical reform”.

The 18th century also provided the religion with its holy book, The Wealth of Nations by the Scottish philosopher and economist Adam Smith. This strongly argued for “free markets” and “free trade”, but Smith also recognised the demands of national security, the need for government to engage in social provision such as road building and maintenance which would not otherwise be done and, must importantly, the nature of a society and its economy. Here is Smith on the Navigation Acts: “…the Act of Navigation by diminishing the number of buyers; and we are thus likely not only to buy foreign goods dearer, but to sell our own cheaper, than if there were a more perfect freedom of trade. As defence, however, is of much more importance than opulence, the Act of Navigation is, perhaps, the wisest of all the commercial regulations of England.” (Wealth of Nations Bk IV. ch ii)

But Smith and his book suffered the fate of all those who found religions, secular or otherwise. As the decades passed Smith’s cautious approach was redrawn in the minds of his disciples to become a surgically “clean” mechanical ideology in which all that mattered was the pursuit of profit and the growth of trade and industry through the application of the “holy edicts” of open markets and comparative advantage. The disciples, like other religious believers, avidly quoted the passages from their holy book which suited their purposes and ignored those which did not. They also found a further holy text in Thomas Malthus’ Essay on Population of 1802, whose predictions, although unproven by events, could be used to demonstrate that economic expansion was vital if widespread starvation was not to occur.

The clinical, soulless and inhuman nature of the laissez faire idea as it evolved is exemplified by the English economist David Ricardo. Here is a flavour of his mindset:”Under a system of perfectly free commerce each country naturally devotes its capital and labour to such employments as are most beneficial to both. The pursuit of individual advantage is admirably connected with the universal good of the whole. By stimulating industry, and by using most efficaciously the peculiar powers bestowed by nature, it distributes labour most economically, while increasing the general mass of the production it diffuses general benefits, and binds together by one common tie of interest and intercourse the universal society of nations”. (David Ricardo in The fall of protection p 174).

The Napoleonic wars largely foiled Pitt’s wish for broad reform and placed “free trade” in suspended animation as a serious political idea until the 1820s, when cautious attempts at tariff reform again were made. But underneath the political elite was a radical class who were very much enamoured of wholesale economical reform. With the Great Reform Act of 1832 they were given their opportunity to become part of the political elite. They took it with both hands, their most notable and extreme proponents being John Bright and Richard Cobden backed by the intellectual power of David Ricardo – all three became MPs.

Within a dozen years of the first election under the Great Reform Act’s passing, Parliament had been captured by the disciples of Adam Smith and the pass on protection had been sold by of all people a Tory prime minister, Sir Robert Peel, an action which kept the Tories from power for most of the next 40 years.

Such was their religious credulity that the “free traders” advocated not merely opening up Britain’s markets, both at home and in the colonies, to nations who would allow Britain equivalent access to their markets, they advocated opening up Britain’s markets regardless of how other nations acted. The consequence was, as we have seen, disastrous for Britain.

Disraeli in a speech on 1st February 1849 cruelly dissected this insanity:” There are some who say that foreigners will not give us their production for nothing, and that therefore we have no occasion to concern ourselves as to the means and modes of repayment. There is no doubt that foreigners will not give us their goods without exchange for them; but the question is what are the terms of exchange most beneficial for us to adopt. You may glut markets, but the only effect of your attempt to struggle against the hostile tariffs by opening your ports is that you exchange more of your own labour each year for a less quantity of foreign labour, that you render British labour less efficient, that you degrade British labour, diminish profits, and, therefore, must lower wages; while philosophical enquirers have shown that you will finally effect a change in the distribution of the precious metals that must be pernicious and may be fatal to this country. It is for these reasons that all practical men are impressed with a conviction that you should adopt reciprocity as the principle of your tariff – not merely from practical experience, but as an abstract truth. This was the principle of the commercial negations at Utrecht – which were followed by Mr Pitt in his commercial negotiations at Paris – and which were wisely adopted and applied by the Cabinet of Lord Liverpool, but which were deserted flagrantly and unwisely in 1846″. (The fall of Protection pp 337/8″).

Ironically, the “free traders” make the same general errors as Marxists. They believe that everything stems from economics. For the neo-liberal the market has the same pseudo-mystical significance that the dialectic has for the Marxist. Just as the Marxist sees the dialectic working inexorably through history to an eventual state of communism (or a reversion to barbarism to be exact), so the neo-liberal believes that the market will solve any economic problem and most social ills. Neither ideology works because it ignores the reality of human nature and its sociological realisation.

The one track economic mentality of the early “free traders” is well represented by the father of J S Mill, James Mill:”The benefit which is derived from exchanging one commodity for another arises from the commodity received rather than the from the commodity given. When one country exchanges, or in other words, traffics with another, the whole of its advantage consists of the in the commodities imported. It benefits by the importation and by nothing else. A protecting duty which, if it acts at all, limits imports, must limit exports likewise, checking and restraining national industry, thus diminishing national wealth.” (The fall of protection p 174). And to Hell with any social or strategic consideration or changing economic circumstances.

After the Great War and the fall of “free trade” as public policy in 1931, the religion went underground for nearly fifty years. When it re-emerged as a political idea in the 1970s the politicians who fell under its spell were every bit as unquestioning and credulous as those of the 1840s. Tony Blair’ statement on Globalisation, ie, free trade, at the 2005 Labour Party Conference shows that it is alive and kicking today. Scorning any attempt to discuss Globalisation, Blair said of those who wished to oppose it “You might as well debate whether autumn should follow summer”. (Daily Telegraph 1 10 2005.)

None of this would matter very much now if those who believe in “free markets” and “free trade” were without political power. Unfortunately, theirs is the elite ideology of the moment and the past 25 years. In Britain, the Tories may be more fanatical in their devotion to the market as panacea, but Blairite Labour have caught more than a mild dose of the disease. A good example of this is their response to house price hyperinflation where they desperately and futilely attempt remedies within the constraints of what they perceive to be “free market” disciplines rather than opting for the obvious state generated remedies such as restricting immigration, building a great deal of social housing and forcing developers to release land for building.

Both the traditional Left and Right have been duped by globalisation. The Left initially welcomed globalisation as a dissolver of national sovereignty, but they are discovering by the day just how restrictive international treaties and membership of supra national groups can be. As things stand, through our membership of the EU and the World Trade Organisation treaties, no British government could introduce new socialist measures because they cannot nationalise companies, protect their own commerce and industry or even ensure that taxpayers’ money is spent in Britain with British firms. A British government can have any economic system they like provided it is largely free trade, free enterprise.

The Right are suffering the same sickness with different symptoms. They find that they are no longer masters in their own house and cannot meaningfully appeal to traditional national interests because treaties make that impossible.

But there is a significant difference between the position of the two sides. The traditional Right have simply been usurped by neo-Liberals in blue clothes: the traditional Left have been betrayed by a confusion in their ideology which has allowed their main political vehicles to be surreptitiously by the likes of Blair.

The left have historically objected to “free-trade” on the grounds that it destroys jobs and reduces wages. But what they (and especially the British Left) have rarely if ever done is walk upon the other two necessary planks in the anti-”free trade” platform: the maintenance of (1) national sovereignty and (2) a sense of national cohesion. The consequence is that the Left has been and are still struggling with two competing and mutually exclusive ends: internationalism and the material improvement of the mass of the people.

UN Global-Warm-Mongerators…always wrong, all the time

David Davis

We’ve come to expect it, since they do it on purpose.

BUT..

The pretence, of course, of appearing manfully to try to shore up a wrong position (although based on falsified data – a fact still not widely known or believed, despite the Climate-Gate scandal) is a good position for them to take. It makes them look like heroic, altruistic martyrs in the service of “The People”.

These droids are very, very clever, far-seeing, and have planned their strategic and fundamental assault on civilisation for a very, very long time.

WE must never, ever underestimate their resourceful and ferociously-focussed pursuit, in the face of all opprobrium, of their objective of irreversible enslavement of all people: this will be in a living hell encompassing the Whole Earth, where all except the bastards themselves will endure the torments specially reserved for the damned.

Informers and Benefit Fraud: A Libertarian View. by Sean Gabb

Free Life Commentary,
A Personal View from
The Director of the Libertarian Alliance
Issue Number 189
9th February 2010
Linking url: http://www.seangabb.co.uk/flcomm/flc189.htm

Informers and Benefit Fraud:
A Libertarian View
By Sean Gabb

I have just been sent one of the most disgusting newspaper articles I have seen this year. It is from today’s issue of The Guardian, and describes how the British Government is considering a scheme to reward those who inform on benefit cheats. Astonishingly, the Ministers seem to think this will make people more inclined to vote Labour at the next general election. If they are right, I am not sure how much longer I want to live in this parody of a country.

But, now I have said enough about the proposed scheme, let me explain what I find so disgusting about it.

The first is that, while every respectable person has a duty to report crimes against life and property, and to bear witness if required, there is much difference between this and calling into being an army of paid spies and police informers. Such people are not needed to report genuine crimes. Their general use is to act as the eyes and ears of an oppressive state. Established for one purpose, their use inevitably spreads to other areas. There is a natural temptation for paid informers to become agents of provocation. There is an equally natural temptation for them to become blackmailers. The resulting culture is one in which friends drop their voices when discussing anything in public that might be overheard to their disadvantage – and where new acquaintances, and even old friends, are viewed with suspicion. My wife grew up in Communist Czechoslovakia, where all this was a fact of everyday life. It was this, far more than the police and security services, who were responsible for a collapse of trust between ordinary people that has outlived is cause by twenty years.

It may be argued, that unlike drugs and prostitution, benefit fraud is not a victimless crime, but is theft from the taxpayers – but that, while they may be expected to report burglaries, individual taxpayers have no incentive to turn in someone who is claiming while working on the side. This is true, but needs to be seen in perspective. No one knows how much benefit fraud actually costs – the figure of £1 billion is believed to be a gross underestimate. However, even if the cost were five or ten times this figure, it would still amount to barely two per cent of total government spending. Most of this goes on paying for services that, where not useless, are harmful to life, liberty and property. Look, for example, at Trevor Phillips. In 2006, he was appointed Chairman of the Commission for Equality and Human Rights at a salary of £160,000. Doubtless, this has since gone up. Even so, his initial salary was equal to more than 2,488 weekly payment of jobseeker’s allowance at the maximum single rate of £64.30. In return for this, his most famous achievement to date has been to hound the British National Party into not insisting that its members should be white – while doing nothing to stop the various Black Police Associations from insisting that their members should be black. As if his published salary were not enough, Mr Phillips was revealed in 2008 to be the majority shareholder in Equate Organisation, which offers a “discreet, customised service” on how to handle the sort of equality issues that are investigated by his Commission. Oh, and the man who is employed to make then nearest things acceptable in public to puking sounds every time the name Nick Griffin is mentioned apparently keeps a bust of Lenin on his desk.

But if more loathsome and better paid than most of the others, Mr Phillips is just one among hundreds of thousands of New Labour apparatchiks given our bread to eat in return for oppressing us. I have no doubt these people collectively earn more than the £116 billion that is paid out every year on benefits. According to the probably fake statistics that attended the informer proposal, benefit fraud may cost every taxpayer in this country £35 a year. Well, I for one, can live with that. Once all the excise duties are paid, it is much less than a single tank of diesel for my car. The New Labour State costs me upwards of half my income, plus my liberty and my sense of nationality.

The only people who are really harmed by benefit fraud are those committing it. They lose yet more of their self-respect. This being said, the benefit rates are so awful that I fail to see how anyone can feed himself and his children without some cheating. Certainly, those on public welfare should not be able to buy cars and flat screen televisions. But they should be able to pay their heating bills and afford Christmas presents for their children without putting themselves into the hands of loan sharks.

And I do not believe that this sort of benefit cheat costs me anything approaching £35 a year. Everyone knows that the benefits system is being systematically milked by gangs of – usually foreign – criminals. Everyone knows that key parts of the system have recently been captured from the inside by organised criminals. Twenty years ago, a friend mine worked behind the counter of a Post Office in South London. He told me at the time how workers from the local benefit office used to come round to cash cheques they had written out to each other. I shall be most surprised if this turns out now to be the worst manner of inside fraud. And these are frauds that can and should be detected by ordinary policing. They do not require the machinery of a police state.

This brings me back to the informer scheme. I cannot help mentioning that it has been by Jim Reid, the Scottish Secretary. He is said once to have been a member of the Revolutionary Communist Party. Trust a Labour politician to have dropped all his proclaimed ends of raising up the poor – but not the police state means these ends were supposed to justify. I hate everyone of my generation who went into politics. Thirty years ago, they sneered at me and people like me as “selfish” and “abhorrent”. They spent the next twenty years insisting to each other and anyone who was stupid enough to listen to them that, when they came into their own, ordinary people would live in dignity and want for nothing. They have since then matured into the worst ruling class this country has seen since the Normans assimilated. The expenses scandal is nothing compared with how they have governed the country in public.

Now, I suppose I should offer some positive recommendations of my own for dealing with benefit fraud. I doubt anyone important is listening to me. But let it be supposed that some political party were to consult me on welfare reform – what would I suggest?

In the short term, I would set the police on catching the organised gangs of benefit cheats. Once these were in prison or deported to their countries of origin, much of the problem would have been solved. For the rest, I would advise looking the other way unless some minor fraud came to the attention of the authorities in the normal scheme of enforcement.

In the longer term, I would try to make most of the state welfare system redundant by lifting the tax and regulatory burden that stops the poorest people in this country from looking after themselves. And this is not – let me say at once – some soft version of the neo-liberal gloating about forcing welfare recipients into work by cutting their already pitiful benefits. Though it may always exist in a free society, the wage system as we have known it during the past few centuries is neither natural nor desirable. It is a cleaned up version of the bottom end of the feudal system, transmitted to industrial society via the management of domestic servants.

Middle class people often moan about the surly attitude of the working classes – about their unwillingness to do as they are told unless they are banned from union membership, or unless their unions can be taken over by middle class bureaucrats who then sell their members out. But I can think of no middle class person who would like working class conditions of work. I remember reading some years ago of a B&Q warehouse in Bristol. The casual workers employed there were electronically tagged. If anyone stopped moving for more than ten minutes, a computer shouted a message into his earpiece to report to the management office. No one does this sort of work unless he is desperate. No one who does it can have any pretensions to dignity. To say people have a choice whether to work for B&Q is a patronising joke. It is B&Q or Tesco, or some other demeaning job. It is like saying a man has a choice of meals if the menu shoved under his nose offers turd sandwich or snot pizza.

What I have in mind is letting poor people start their own micro-businesses in the manner described by Kevin Carson. Let someone start a coffee shop in the front room of his house. Let a family brew beer and sell it. Let people open little schools to teach reading and writing. Let them look after other people’s children. These things are currently not permitted. Or they are prevented by taxes and regulations that raise the fixed costs of doing business to the point where unreasonably large revenues must be generated year after year. Some people may get rich from doing this. Most will not. But enrichment is not the purpose. The real purpose is to give people the ability to survive without having to rely for all their income on salaried work.

It goes without saying that all subsidies to existing large businesses should be cut off at once – no more transport subsidies that allow goods to be moved about at less than full cost; no more interventions abroad to stabilise export markets, or secure access to artificially cheap goods and labour; no more taxes and regulations that can be carried by big business as cartellised costs, while flattening new entrants to the market; above all, no more limited liability laws that foster the growth of huge joint stock enterprises that are little more than the economic wing of the ruling class.

Where welfare is concerned, people should be enabled to join together in free mutual societies, accepting members and offering such benefits as may be agreeable to the relevant parties. This means no more taxes and financial regulation, and no more money laundering laws that, again, are little more than state cartellisation.

One of the failings of libertarianism – and I do not exempt myself from past guilt – is that we have too often argued as if actually existing capitalism was the free market. We may have conceded that business was too highly taxed and regulated, and that this frequently was turned to the advantage of the bigger firms in any market. But the assumption has too often been that a free market is effectively Tesco minus the state – that the wage system and big business were both natural and desirable institutions. As said, they are neither. The state capitalism that, in the 1980s and 1990s, we called Thatcherism or Reaganism was nothing approaching a free market. It was better than state socialism. But that is not saying very much. It has to some extent been our fault if ordinary people have been offered an apparent choice between a system in which a lucky few grow gigantically rich through connections and the ability to shuffle paper in the accepted ways, and ordinary people cannot buy houses and have children without going head over heels into debt – and sometimes not even then – and the present system of shadow boxing between multinational corporations and a huge superstructure of at best intrusive and at worst corrupt officials.

I might end by accusing the present Government of moral and intellectual bankruptcy. But this would be to absolve the equally if differently useless Tories. It would also be to concede that any of these people ever had anything good to offer. They are evil. Never mind the ideals they still sometimes ritualistically claim to guide their actions. All they have ever had to offer is a land fit for police spies and agents of provocation. They must all be destroyed – politically and financially.

NB—Sean Gabb’s book, Cultural Revolution, Culture War: How Conservatives Lost England, and How to Get It Back, can be downloaded for free from http://tinyurl.com/ya4pzuh

Climate terrorism is the next thing

David Davis

I warned people, time and again, about things like ALF, IFAW and the RSPCA. These were the breeding-grounds for the next big fashionable murder-scheme: climate terrorists. Much the same people frequent both camps.

One never, also, really fully bought into the “Islamist” scare. Apart from 9/11 and a few other obvious big set-pieces, the foot-soldiers of that movement are not serious at all. Some of their priests, “scholars” and imams – yes: they’ll get a lot out of a Universial World Caliphate, including all the virgins while they yet live too (when virgins are of most use to a man.) But the footsloggers and suicide bombers: no, to the drivers of this, they are just expendable scum.

Islam will soon learn that it’s been set up as a patsy. It’s not a religion – and that’s a different discussion we will have with it when a more relaxed time comes, and it has grown up a bit. Having read the Koran and commentaries, I can see that it’s a fairly nifty way of husbanding chattels, animals and women, in pre-Enlightenment Lands of harsh climate where there is nothing. But as I said, we’ll have that discussion another time.

For the present though, the Bramwello-Ehrlichite GreeNazi movement is much more dangerous and immediately harmful: all of those in it all seem to believe with messianic fervour what they are saying. They really are prepared to murder, starve and freeze millions to death, down to the meanest polytechnic student among them: there must be some attraction towards violence associated with the promotion of opinions, among this class of person. In time,  I prophesy that they will learn from their mates in ALF how to go about “targetting” private named individuals too.

Liberal rhetoric does not, somehow, carry within it the same degree of utterly certain conviction of rectitude that the GreeNazis’ sort does. Even Islamists of the militant kind appear to be quaking nervous bags of jello by contrast.

These are the dangerous ones of the next generation, following in a grand and highly-studiable tradition of anti-liberal protest followed by “action”. Just watch.

LiberaLaw: Gabb on Carson

 

LiberaLaw: Gabb on Carson

Review by Sean Gabb of Kevin Carson’s “Organization Theory”

Free Life Commentary

Free Life Commentary,
A Personal View from
The Director of the Libertarian Alliance
Issue Number 184
18th June 2009
Linking url: http://www.seangabb.co.uk/flcomm/flc184.htm
Book Review by Sean Gabb

Organization Theory
Kevin A. Carson
Booksurge, 2009, 642pp, $39.99
(ISBN 9781439221990)
Available from Amazon

(http://www.amazon.com/exec/obidos/ASIN/1439221995/ref=nosim/kayetechsystems)

I will begin my review by stating its main conclusions. These are that Kevin Carson has written one of the most significant books the libertarian movement has seen in many years. I do not agree with everything he says here. I do not suppose any libertarian will unreservedly accept what is said. Even so, I doubt if there is a libertarian who can read this book and not, in some degree, have his vision of a free society enriched and even transformed by it.

Summarising an argument that is worked out over more than six hundred pages is not easy. However, Mr Carson begins by observing that, while economic theory seeks to analyse the behaviour of individuals and small groups within a market system, the economic reality is a world dominated by large corporations within which prices are largely administered and there is an absence of competition.

He asks why this should be so. Why is there so much substitution of hierarchy for individual contracts? The standard answer, provided by Ronald Coase, among others, is that large firms are more efficient than small firms. The further the division of labour is carried, the larger the potential economies of scale. In an open market, however, the division of labour involves transaction costs – these being the costs of negotiating exchanges between many different suppliers of goods and services. Within a firm, these costs are not abolished, but are much reduced. Therefore, a firm will expand to the point where the cost of organising one more transaction within itself is equal to the cost of letting that transaction be made on the open market.

According to this analysis, firms grow large so far as their lower internal transaction costs make them more efficient than their smaller competitors. And there is an obvious temptation to regard size in a market economy as evidence of greater efficiency.

Against this analysis and its conclusions, Mr Carson argues that the point at which internal transaction costs become equal to the costs of transactions via the market has been artificially raised by state intervention. There are few objective benefits in size. Lowest long run average cost is often achieved by rather small scale production methods. There is little evidence that large factories are more efficient than small factories. There is little evidence that large firms are more innovative than small firms. Anyone who looks inside a large firm will see information and management and resource allocation problems similar to those described by Hayek and von Mises in their work on socialist calculation.

For two hundred years, economists have been content to repeat and elaborate on the example of the pin factory described by Adam Smith – in which the operations of making a pin are divided among many workers, thereby raising average output. In fact, these efficiencies can be realised just as easily by dividing the operations so that individual workers perform them one after the other.

If large firms predominate, it is not because they are the outcome of free market forces. Rather, they are called into being by systematic distortions of the market that amount to a subsidy on size. These distortions include the following:

First, there is subsidised transport and communication infrastructure. According to Mr Carson,

[i]t’s… important to remember that whatever reductions in unit production cost results from internal economies of large-scale production is to some extent offset by the dis-economies of large-scale distribution.[p.34]

The British and American railway networks, for example, were built in the nineteenth century by private companies. However, investment was only made profitable by

If in doubt….PAYRISE!

Fred Bloggs

In the face of the current economic crisis (some might say fiscal armageddon) the goverment has devised a plan, which consists of, briefly, giving themselves a 60% pay rise. No doubt this “plan” will solve all the economic problems in the world, feed all the starving Africans, raise Atlantis, and with all its well-crafted majesty, scare the Russians so shitless they’ll give Lenin a haircut. Or, well, maybe not.

Apart from the Atlantis bit.

Find out more Here.

Derek Simpson, UNITE, pig-troughs and Animal Farm

David Davis

Well, well, well. What a surprise. And I thought trade Unions were to help the low-paid against their faces being ground by “wicked capitalist running-dogs and lackeys of the Boss Class”.

So who’s in the “Boss Class” now, eh, Derek? And what about your members losing their jobs then?

What Greens are really up to…..

…..and Simon Heffer on Victorians. (Just incidentally so right, that one.)

David Davis

But I quite accidentally chanced on this stuff today. We all know that most GreeNazis have been articulating their beliefs with quite disarming frankness for decades. So it’s good to find more people (b)logging their progress for the rest of us, sadly too busy to do much about it.

As Auberon Waugh would have said, “I’m not suggesting that we should arrest, tie to MacDonald’s restaurants and then publicly tar-and-feather all lovable sandal-wearing-greens; but  more does need to be done to combat the Green Terror”.

It won’t let me paste any links, not get rid of the bloody italics, so here they are:-

http://windfarms.wordpress.com

http://windfarms.wordpress.com/agenda21/

http://en.wikipedia.org/wiki/Auberon_Waugh

GAS: RUSSIA. North Sea. Britain should just turn it off. Do not masturbate in front of Russia while talking about gas.

David Davis

I hear a nasty rumour that “the EU” will take “our” gas. This is because the EUmonsters masturbated with Russia the USSR on screen, and have come unstuck. Do not masturbate with Russia the USSR on your screen. Bad things will come to you. Russia the USSR is not exactly anybody’s friend at present, until we have done régime change there, and it has become liberalised and Putin is out of office.

Press ENTER to liberalise Russia the USSR. This may take some minutes, and you will need a paypal account.

In the meantime, go to http://www.libertarian.co.uk and give us some money. In the long run (very long I fear) this will help us to liberalise Russia the USSR. Then, the gas won’t be turned off by them, just because they think we don’t like them – or because they think we might just slightly like Israel.

As it gets colder, and sterling becomes toilet-paper, we shall be glad to be able to have chip-butties.

David Davis

I have even met builders, with whom I worked a bit last summer as a second-fix trade-polisher on a housebuilding job, who had crisp-butties for their tea-breaks (many.)

The Landed Underclass tells us, I am happy to relate, that the Vegan stuffed vine leaves are off in 2009 because of Sterling’s continuing fall. I can’t say I’m very sorry about that, although I do like stuffed vine leaves, preferably full of a nice lemony mixture of minced lamb, rice, pine nuts, coriander and other poncy (but scrumptious) Wireless Tele Chef type comestibles. However, his main point is the most cunningly marvellous exposition about foods in general by a proper doctor, the kind who knows about war and stuff. We’d all really prefer to get treated by guys llike that whom he describes, if push came to shove: and not the sneering hectoring sub-types of “professionals” like State “dieticians” whom I met in a certain famous children’s hospital not 30 miles form here, a few years ago when our new-born (now five) was rather less well than he orta-av-been.

The problem arises of course where the State, whether nanny, jackbooted or otherwise (I can’t tell the difference) steps in. I quote from landed’s quote from the Daily express:-

Tam Fry of the National Obesity Forum said …: “As prices rise and incomes fall, people will be drawn to the cheaper, less healthy processed foods, which are precisely the sort of things we are trying to wean people away from. Once habits change, it becomes hard for people to go back, especially because cheaper junk foods are so seductive.”

I have not previously heard of the “National Obesity Forum”, but I bet it’s (a) not a national movement and (b) it’s anything but a forum in which people engage in civilised discourse.

The libertarian issues are as follows:-

(1) If people are to be “weaned” off certain foods, and forced to eat others which they desire  less, then they are the state’s farm animals. I do feel quite sure that this is what “Tam” “Fry” does truly intend, although he’d not see it like that. he’d be “helping” people. Like Stalin did.

(2) If there was a real market in food, then the price of Vegan stuffed Vine Leaves would reflect demand and also the affluence (or otherwise) if the clientele that would go for it.

“Organic” Death-Farming was always a criminal fraud, and now it is exposed in its obscene nakedness

Although a not-very-nice subject for Christmas, this organic-socialist-farming nonsense needs to be nailed through the heart, where the nail belongs, or it will kill more people. Let’s do it now.

It also causes death to starving millions labouring under socialist paradises, reducing as it does on purpose the total gigatonnage of foods that could otherwise be grown using fertilisers, pesticides and other modern conveniences necessary for the large-scale mechanised farming that humans require, and therefore driving up the price.

David Davis

Thanks to Obnoxio (again) for the hat-tip to this marvellous and uplifting news……

They want to….what? Let’s get this right…..“They want to establish new organic ground rules before the market becomes even more depressed next year.”

Oh. They want to do capitalism! Good. Serve them right. Like the cockroach Castro (who is still sadly dead) should have been condemned to be the MD of a small private company in the USA, making stuff in difficult times. For ever!

I feel better about the recession now, than I did.

DISASTER!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Peter Davis

Within the last hour of this post, the value of the Pound Slerling has gone below the value of the EURO!!

this is a terrifying prospect, but as of 23:11 GMT, £1 is worth 0.72 Euro cents (my keyboard cannot do euro signs, funny though, because it can do everything else though, even these: Ψ Φ ♦ ♣ ← ↑ → ↓↔ θ Ξ ¿)

This man has been directed, by The Onebama, to nail jelly to the ceiling.

David Davis

Again, if it was not pathetically sad, it would be humorous.

This is a model of an “Award-winning environmental policy professor”.

The Atlas of the Real World….

….was probably meant to be a new-lefty-bible, and was almost certainly drafted by them, but Free Market Fairy Tales has kindly gutted-and-filleted the crux-or-nub of the liberal Classical Free Market case, yea, even from its maps (very clever they are too….wish I’d thought of viewing the world’s movable parameters in that way.)

I hope that Strange Maps picks it up soon.

David Davis

Four cheers for the devil …

David Davis

… for standing up for individual property rights. More important, even, than clean drinking water for all the world’s children, as advocated nobly and forcefully by Bjørn Lomborg (or is it Lombørg? I don’t know.)

The Devil was merely getting at Private Eye. But the strategically-underlying point he makes is seminal (this is a un-PC banned-word now.)

Sean Gabb on the Financial Crisis (Yawn!)

Free Life Commentary,
A Personal View from
The Director of the Libertarian Alliance
Issue Number 175
19th September 2008

Free Markets and the Financial Collapse
by Sean Gabb

I was called earlier today by someone at the BBC to comment on the collapse of the financial system. I have no particular qualifications for commenting on this. I do not know how long it will last, or how the recovery will begin. I certainly have no detailed advice on what should be done by anyone during the next few days.

The reason I was thought worth contacting, though, was obvious. The narrative in the establishment media is that markets were too lightly regulated after about 1980, and that the consequences were a ruthless and short term greed that has now reached its natural conclusion. This being so, the answer is how much regulation should now be introduced to prevent all this from happening again. I am a libertarian. I believe in markets. If markets are now being denounced, I am the right sort of person to approach for a defence.

The problem, the researcher discovered, is that I was not the right sort of person to approach. I think, for most people, it is a matter more of ignorance than of intellectual dishonesty. But there is a general tendency to identify free markets with any set of institutional arrangements that allow things to be bought and sold.

When it comes to the Private Finance Initiative, or the privatised utilities, or the internal market in the National Health Service, I do grow impatient. These are not examples of free markets, but of corporatism: they have been called into being by the State, and are at every step regulated and privileged by the State. Where the financial markets are concerned, the identification is more reasonable. After all, these are dynamic and highly efficient markets. Perhaps more so than any others, they conform to the neoclassical concept of perfect competition. Many people who work in finance are sympathetic to libertarianism. The markets are often discussed and defended in libertarian terminology.

What I tried to explain to the researcher was that, for me and for many other libertarians, markets are to be defended not according to how efficient they may be, but according to whether they are or would be part of a voluntary order.

What libertarians want is a society in which people come together only in uncoerced relationships. Some of these � marriage and partnership agreements, for example � might be hard or even impossible to dissolve. Some others � the main example being parents and their children � might involve some coercion for a limited period. But we do require, so far as reality permits, that no one should be compelled into any relationship.

When we defend markets, we mean those relationships, outside the circle of our friends and loved ones, than involve exchanges of legally binding promises, usually with a price attached. We do not defend priced relationships that are based on any degree of coercion. Therefore, we denounce slavery and trading in slaves. We denounce the collection of taxes to pay for services provided by the government. We denounce regulations that limit the range and nature of relationships that people can choose.

And we denounce patterns of indirect coercion that herd people into relationships they might not otherwise have chosen.

The financial system, as it currently exists, is based on this last type of coercion. Consider:

First, we have taxes and a monetary framework that make prudence, as traditionally known, unwise. It used to be that people would save for emergencies by putting money into savings accounts or contributing to mutual insurance schemes. For their old age, they would save money for purchase of annuities on retirement. But we have long had levels of inflation that eroded capital values, and taxes that depressed real returns. We can respond to this by playing the markets. But this requires more time and understanding than most people are willing to give; and there is the problem � at least in Britain � of capital gains tax when securities are sold at a profit.

The answer has been to put our savings with groups of professional speculators. These claim to understand the markets better than ordinary people. Undoubtedly, they have more time to follow the markets. And there are tax laws that privilege such companies.

The result has been to concentrate most savings into the hands of people whose job is look out for short term profit, and who are inclined to welcome exotic new products that no ordinary investor would ever dare touch.

Second, there are the company laws that allow easy incorporation and limited liability for debt. These have allowed giant business organisations to rise up and flourish. The result here has been to increase the number of securities that can be bought and sold, and to call into being whole armies of professional speculators, employed by multi-national banks and other organisations.

Third, there is fractional reserve banking and fiat money. Ever since the development of modern finance, bankers have been tempted circulate more notes than they could honour. What kept this in bounds was knowledge that the monetary base was a certain amount of gold that would not quickly be changed in size. Nowadays, if bankers cannot finance all the lending they would like to make at prevailing interest rates from the stock of savings, they can simply create more money. They still have an obligation to redeem their promises. But they operate in circumstances where the monetary base can be increased at will.

I do not say that there would be no financial markets in a voluntary order. There would be intermediation between lenders and borrowers. There would be trade in bonds. There would be securitisation of debt. There would be speculation on future values of commodities and securities.

I do not even say that the financial system we have is wholly useless or malign, given the highly corporatized nature of business. Fears of shortselling or takeovers provide a check on corporate sloth or greed. The endless speculation enables those of us who have some money not to have it all stolen by our government through taxes or inflation.

But the financial system, as it does now exist, would not exist as part of a voluntary order. It would not be the huge global casino that it is. It may be efficient. It may be plausibly claimed as an instance of the free market in action. But it is not part of a voluntary order, and therefore has at best only partial legitimacy to libertarians.

Moreover, if the financial system is a creature, directly or indirectly, of government, its current problems have been wholly caused by government. I do not know when the inflation started. It may have been to float us out of the last recession, back in the early 1990s. It may have been to avoid the expected panic of the Millennium Bug. It may have been to pay for the War on Terror. It may have been the product of all of these and others. But for many years, money has been lent that was not first saved. The gap between savings and loans was bridged by money creation. It is testimony to the skill of regulators and the sophistication of the markets that the speculative bubble was able to grow so large. But, however long delayed, its bursting was inevitable. The media can blame crooked mortgage sellers in the American ghettoes, or coke-fuelled graduates in the London dealing rooms. But financial collapse was always a matter of when and not if.

When I gave a potted version of this to the BBC researcher, I could almost hear her eyes glazing over. For the second time this year, I was not called into the studio to defend the City. I understand why I was not called in. What I am saying does not fit into the establishment narrative of what has happened.

And though I never got to tell the researcher, I also have no idea of what should now be done. Perhaps the bank of England should raise interest rates sharply and stand back while much of the financial system goes insolvent. This would get things over and done with, and move us reasonably fast into the recovery stage of the next bubble. Or perhaps it should flood the City with fresh money, in an effort to bring about a soft landing. I really do not know.

Something I do know reasonably well, however, is how to stop these bubbles from starting. If I ever came to power as the front man for a military coup � somewhat unlikely for several reasons, but still worth hoping for � I would do the following:

First, I would cut taxes and government spending by at least two thirds. The remainder should pay the interest on the national debt and honour the pension commitments made to those over about the age of fifty. I would then end the tax privileges of the investment funds. This would, among much else, allow people to plan for their future without having to sit behind the institutional equivalent of a compulsive gambler.

Second, I would repeal the Companies Acts and make the declare the directors of existing corporations the true owners with joint and several liability for their debts. This would put an end to the impersonal, bureaucratic nature of modern business. It would also reduce the number of securities to be bought and sold and reduce the number of people employed to buy and sell them.

Third, I would move to a fully-convertible gold standard, with the heads of every bank made jointly and severally liable for redemption in gold of all obligations, unless contracted otherwise

As said, even a stateless voluntary order would still have financial markets. And the semi-statist system I am recommending would have not only financial markets, but also some room for speculative bubbles. But neither would be anything like the world in which we actually live.

The shame is that what we have is largely what we shall have. Sooner or later, the present collapse will be over. Then, whatever �tough regulation� the politicians may have brought in will be circumvented by a new generation of clever speculators, and the next bubble will begin to inflate.

It could be worse, however. We are not talking about Soviet Communism here, but a corporatism that, if neither stable nor just, does enable the creation of vast amounts of real wealth. And, I might say, I have done rather well personally out of the late bubble. I am assured I shall not lose disastrously now it has burst. This means I am well placed to benefit from the next bubble.

As the Good Book says: �Unto every one which hath shall be given �.�

NB—Sean Gabb’s book, Cultural Revolution, Culture War: How Conservatives Lost England, and How to Get It Back, can be downloaded for free from http://tinyurl.com/34e2o3

Wicked climate-change fraud properly exposed, in plain langauge, at last.

David Davis

Excellent exposé by Bishop Hill, about the carefully-diguised but fraudulent manipulation of data and preocessing, used to convince gullible people or those with little free time and a lot to do. Lots of useful embedded links to primary sources. Hat tip Samizdata, courtesy of Brian Mickelthwait, and I think the Englishman’s got his teeth into its ankle also. (Useful but slightly irrelevant, although amusing, links to all about Richard Dawkins included free if you see him.) You’ll all be pleased to see that The Devil has picked it up, too, and is somewhat less amused by the scale of the fraud even than I am!

And for some real dunking in proper coloured graphs and all that stuff, go to John Daly, here.

The great global warming con is starting to unravel … in the Nottinghamshire Times …

…of all places! Perhaps we are starting to beat the UN-IPCC-liars, and Gore and his deceivers, after all.

David Davis

The Purple Scorpion does very good extra new stuff about global warmnazi-ing

David Davis

Here. Good new commentary about stuff form the Observer; that is to say, a “News Paper”, mostly read by pseudo-intellectual British lefties, with names such as Deidre Dutt-Pauker. These are a declining breed happily, but sadly with an ability to “punch above their weight”. we shall have to see about that when we set up “Libertarian re-reducation camp sites”; These might be called “free markets”, in stuff such as “journ-al-ism”.