Perhaps Dr Sean Gabb’s book (Culture Revolution, Culture War) and C S Lewis’s ideas about Bulverism have something in common.
Perhaps Dr Sean Gabb’s book (Culture Revolution, Culture War) and C S Lewis’s ideas about Bulverism have something in common.
by Sean Gabb
I made a brief appearance yesterday on BBC1′s “The Big Question”, where I
argued that voting should not be made compulsory. Here is the relevant
On Saturday the 6th March 2010, I recorded a long interview with Al Gore’s
television station all about the decriminalisation of incest. Stand by for
news about where to find this.
Tomorrow morning, I shall be interviewed by BBC Radio Bristol about CCTV
cameras. I will upload the recording of this shortly after.
On the 17th March 2010, I shall be talking to Haberdashers’ Aske’s school
for boys all about libertarianism.
On the 24th April 2010, I shall be speaking at this event:
Saturday 17th April 2010
2.30pm to 4.30pm
CARRS LANE CHURCH CENTRE
Carrs Lane, Birmingham B4 7SX
10 minutes walk from city centre New Street station.
See website http://www.carrslane.co.uk for directions
TIME FOR TRUTH
Who Speaks for the People of Britain?
In the Chair
Chairman, Campaign for an Independent Britain
Dr. SEAN GABB
Director The Libertarian Alliance
The Taxpayers Alliance, West Midlands
Vice-Chairman Campaign for an Independent Britain & organiser of General
Election “Candidate 2010″
Published by The Campaign for an Independent Britain
http://www.eurosceptic.org.uk. For 35 years,CIB has led efforts to safeguard our
nation’s sovereignty. We are a democratic, independent and strictly
remaining a non-party political pressure group, supported by membership
subscriptions and donations from members of the public. Our objective is
Britain’s withdrawal from the European Union whilst maintaining trading
and friendly relations with other countries
. Enquiries 07092 857684
As and when we arrive at the event, outer-London-parking-controls and tribulations permitting, we shall attempt to “live blog” parts of this (whatever “live-blogging” might be: I hope someone will tell us!) We are armed with laptops which I guess is a requirement, and we assume that modern trendy venues like the National Liberal Club have some kind of internet connection…
(UPDATE1:- I see that Blogdial has picked this up – well done, please tell everyone asap. There are a lot of other outgoing links in Blogdial about this matter, which later you may care to follow. UKIP (and here too): Renegade Parent: old Gerald Warner: the Quisling-Graph for once is good and right, and this editorial too. plus links to the usual GramscoFabiaNazi Maoist lefty stuff as well, for entertainment if it were not so sinister and if the buggers did not really mean it, as they do.)
(UPDATE2:- And here’s Daniel Hannan, on how Thatcher saved Britain. That’ll get the Ballses, Ed and Yvette (she a chav or summat?) ranting.)
NEWS RELEASE FROM THE LIBERTARIAN ALLIANCE
In Association with the Libertarian International
Release Date: Thursday 11th June 2009
Release Time: Immediate
Dr Sean Gabb on 07956 472 199 or via firstname.lastname@example.org
For other contact and link details, see the foot of this message
Release url: http://www.libertarian.co.uk/news/nr075.htm
The Libertarian Alliance today denounces Ed Balls, Secretary of State for Children, Schools and Families in the British Government, for taking the first steps towards what will be the outlawing of home education.
[Mr Balls has accepted a report recommending that all home educating families in England will have to register annually and demonstrate they are providing a suitable education. It further recommends that children should be forced into state schools if parents do not meet certain standards set by the education bureaucrats. See here for further information: http://www.dcsf.gov.uk/pns/DisplayPN.cgi?pn_id=2009_0105 ]
According to Sean Gabb, Director of the LA:
“The right of people to educate their children within the values of their family, their faith or their community has always been respected by the British State. Parents have been legally obliged to proved their children with an education – but have never been obliged to send them to school, or even to notify the authorities of what they intend.
“The current proposals sound moderate. The talk is of giving support, not of forbidding. But they are the first step to outlawing home education. Registration will, for the first time, let the authorities know who is educating their children at home. Once these parents are known, they will be visited and inspected to ensure that they are providing a ‘suitable’ education. What this means – though not all at once: it will take several years of salami slicing – is that parents will be hit with impossible and ever-changing health and safety rules. They will be forced to keep records in rigidly prescribed formats – records that will almost certainly demand disclosure of the race and probable sexuality of the children, and that will (if not first lost on a railway train) be shared with foreign governments and private companies. paper qualifications may be required from parents. They will eventually be forced to teach the feared and discredited National Curriculum.
“At no point will home education be made into a criminal offence – as it is in Germany and Belgium, among other European countries. Instead, it will be surrounded by so many rules and by so much supervision, that most parents who now educate at home will give up. Many who carry on will be picked off one at a time – their children conscripted into a state school for some trifling infraction of deliberately conflicting and arbitrary rules. In extreme cases, parents will have their children taken into ‘care’.
“The motive for regulation is not the safety of children or to provide them with a decent education. State schools do not – and are not intended to – provide children with a decent education. Their purpose is to indoctrinate children with the values of the Establishment. These values used to be love of Queen and Country and a perceived obligation to go and be shot at when rounded up and put into uniform. Nowadays, the values are politically correct multiculturalism.
“As for regulation as a guarantor of safety, we only need look at the nursery worker arrested this week for sexual assaults on children. Since this is a matter before the courts we make no comment on the woman’s guilt or innocence. We do note, however, that she will have been closely examined by Ofsted, and checked against all the relevant databases, and judged officially safe with children. Anyone who thinks regulation makes children safe needs his head examined.
“This current proposals will lead ultimately to a state of affairs in which children can be torn from their homes and forced into schools where they will be brainwashed into values that their parents find abhorrent – and where they will probably be kept illiterate and innumerate as these things were once measured, and where they might also be bullied into suicide or lifelong depression.
“Ed Balls, the Minister concerned, wants all this because his Government has turned Britain into a soft totalitarian state. No child – except, of course, of the rich, who can always buy their way out – must be permitted to escape the ideological apparatus of the New Labour State. Home educators are the equivalent of the Kulaks in the Soviet Union. They show too much independence. They must be destroyed.
“The Libertarian Alliance denounces Mr Balls and the Government in which he is a Minister, and calls on people everywhere – British or not, parents or not – to write to him expressing their own contempt of and opposition to this attempted mass kidnapping of our children.”
The address details for Mr Balls are as follows:
The Rt Hon Edward Michael Balls MP
Secretary of State for Children, Schools and Families
Great Smith Street
London SW1P 3BT
His Deputy, Delyth Morgan, can be reached as follows:
Baroness Morgan of Drefelin
Secretary of State for Children, Schools and Families
Great Smith Street
London SW1P 3BT
For those who think these things still matter, Mrs Morgan should be addressed in correspondence as “My Lady”
Letters should be brief. They should refer to the report “Review of Elective Home Education in England (June 2009)”
(available at http://www.dcsf.gov.uk/everychildmatters/_download/?id=6080 )
Points worth making are:
END OF COPY
Note(s) to Editors
Dr Sean Gabb is the Director of the Libertarian Alliance. He is regarded as one of the most prominent British writers on home education. He is co-author of “Homeschooling in Full View: A Reader“, 1995. His “Home Schooling: A British Perspective” can be read at http://www.seangabb.co.uk/academic/homeschooling.htm
He can be contacted for further comment on 07956 472 199 or by email at email@example.com
Extended Contact Details:
The Libertarian Alliance is Britain’s most radical free market and civil liberties policy institute. It has published over 800 articles, pamphlets and books in support of freedom and against statism in all its forms. These are freely available at http://www.libertarian.co.uk
Our postal address is
The Libertarian Alliance
2 Lansdowne Row
London W1J 6HL
Tel: 07956 472 199
The Libertarian International – http://www.libertarian.to – is a sister organisation to the Libertarian Alliance. Its mission is to coordinate various initiatives in the defence of individual liberty throughout the world.
Sean Gabb’s personal website – http://www.seangabb.co.uk – contains about a million words of writings on themes interesting to libertarians and conservatives.
Hampden Press – http://www.hampdenpress.co.uk.- the publishing house of the Libertarian Alliance.
Liberalia – http://www.liberalia.com – maintained by by LA Executive member Christian Michel, Liberalia publishes in-depth papers in French and English on libertarianism and free enterprise. It is a prime source of documentation on these issues for students and scholars.
With his mixture of vaulting intellectual ambition and
howling mediocrity of mind, Lenin is the MaGonagal of
philosophers. (Connoisseurs of intellectual incompetence
should browse through ‘Materialism and Empririo-Criticism’
for an especial treat). Nonetheless, like Hitler, the man
possessed a certain low animal cunning and a complete absence
of moral sense, which qualities permitted him to make a few
acute psychological and sociological observations. Perhaps
the most interesting of these is the concept of the useful
For Lenin this was the role to be played unwittingly by
simpleminded, tenderhearted, bourgeois dupes in preparation
for the proletarian revolution, a revolution utterly
antipathetic to simpleminded, tenderhearted bourgeois dupes.
But the concept is of general political utility, for it is
essentially that of the political naif who believes against
all the evidence in the good intentions of those in authority
or aspiring to authority and the rightness of their ideology.
The useful idiot should be distinguished from the Uncle Tom,
the latter being a mixture of shrewd self-promoting civility
and psychological subordination. The useful idiot is a
self-deluding, self-committed political adherent.
In practice, all political movements seek their useful idiots
and none more so than those operating within an mass elective
system, for no party standing for election is ever willing
to tell the whole truth about its desired ends or intended
means. The best of all useful idiots are, of course, those
in positions of the greatest political power.
Margaret Thatcher might seem an unlikely candidate for such a
role of useful idiot. Was she not the Iron Lady, the Hammer
of the Left, the slayer of the socialist dragon? Did she not
speak of turning back the tide of coloured immigrants? Was
she not the rock from which the European Leviathan
rebounded? Did she not ensure that Britain was respected in
the world as she had not been since Suez? Was she not a mover
and shaker in the nationalist cause?
In her own rhetorical world she was all of these things, a
veritable Gloriana who enchanted some and banally persuaded
many more, but in practical achievement she was none of
them. This discrepancy between fact and fancy made her an
extraordinarily useful idiot for the soldiers of the
ascendent ideology of the post-war period, the sordid bigotry
that is latterday liberal internationalism.
In her the Liberal Ascendency found a massive shield for,
by constantly promising what she could or would not deliver,
she allowed the primary corruptions of the post war period
- immigration, multiculturalism, “progressive” education,
welfarism, the social work circus, internationalism, the
attachment to Europe - to not merely continue but grow
vastly whilst she
. whilst all the time the general public was fed a rich diet
of lies by the agents of the Liberal Ascendency, the Public
Class – that unwholesome melange of politicians, media folk,
educationalists, social workers and senior public servants
who have come to dominate our lives - about the savage
deprivation of funds for education, health and the welfare
state and the damage done by rampant Thatcherite ideological
hooliganism in all important parts of life.
A harsh judgement? Well, at the end of her reign what did
Britain have to show for her vaunted patriotism, her wish to
maintain Britain’s independence, her desire to drive back the
state, her promise to end coloured immigration? Precious
little is the answer.
Her enthusiastic promotion of the Single European Act (“It’s
a market and markets are good”), which she ruthlessly drove
through Parliament, allowed the eurofederalists to greatly
advance their cause under the guise of acting to produce a
single market; her “triumph” in reducing our subsidy to
Europe left us paying several billion a year whilst France
paid next to nothing; our fishermen were sold down the river;
farmers placed in the absurd position of not being allowed to
produce even enough milk for British requirements; actual (as
opposed to official) coloured immigration increased; that
monument to liberal bigotry, the Race Relations Act was
untouched, welfare and health spending rose vastly; the
educational vandals were not only allowed to sabotage every
serious attempt to overturn the progressive disaster, but
were granted a great triumph in the ending of ‘O’ levels, a
liberal bigot success amplified by the contemptible bleating
of successive education secretaries that “rising examination
success means rising standards”; foreign aid continued to be
paid as an unforced Dangeld; major and strategically
important industries either ceased to be serious competitors
or ended in foreign hands; the armed forces were cut
suicidally; local government spending rose massively
But what of her supposed triumphs, what of privatisation and
the sale of council houses, the subjection of the unions and
the winning of the Falklands war? Perhaps this will have the
most lasting effect. However, that is a different matter
altogether from saying it was an unreservedly good thing. We
may celebrate the liberation of British Telecom and BA, but
is it such a wonderful thing to have no major car producer or
shipbuilder? The trouble with the privatisation of major
industries, which may either be greatly reduced, go out of
business or be taken over by foreign buyers, is that it
ignores strategic and social welfare questions. Ditto free
trade generally. Both assume that the world, or at least the
parts which contain our major trading partners , will remain
peaceful, stable and well disposed towards Britain for ever,
an absurd assumption. What, for example, would be the
response of a future British government to BMW if they
decided to move production of all Rover models abroad? An
absurd scenario? I don’t see why it is for BMW might make
such a move for financial reasons or be directed to do so by
a future aggressively nationalist German government.
There is also a moral question connected to privatisation
which was never properly answered by Tories: what right does
the state have to dispose by sale of assets which are held
supposedly on behalf of the general public? This is a
question which should be as readily asked by a conservative
as by a socialist for it touches upon a central point of
democratic political morality, the custodianship of public
property. The same ends – the diminution of the state and the
freeing of the public from seemingly perpetual losses – could
have been achieved by an equitable distribution of shares
free of charge to the general public. This would have had,
from a Thatcherite standpoint, the additional benefit of
greatly increasing share ownership.
As for the sale of council houses, I have never been able to
persuade myself that this is anything other than a
socialistic measure, a redistribution of wealth to the poor.
It is also inequitable because it excludes the poor not
living in council property and discriminates amongst council
tenants according to the quality and situation of their
properties – there is a vast difference between having the
right to purchase a detached house which is not part of a
vast estate and having the right to purchase a small flat on
the twentieth floor of a tower block. Nor will many
purchasers of leasehold right-to-buy properties be thankful
that they made the decision to buy, for after five years they
are left at the mercy of vengeful councils which may levy
what service and repair charges they like. Nor can many of
such leaseholders view moving with any equity for their
chances of finding a buyer at any price, let alone that which
they paid, are minuscule.
As someone who is old enough to remember the Wilson, Heath
and Callaghan years I have no illusion of exactly how awful
the unions were when they had real power. What I am not
convinced of is the prime position granted in Thatcherite
hagiography to her union reforms. In 1979 two things were
already apparent: full employment was likely to be a thing of
the past and many union members had a sufficient material
stake in the country to not welcome frequent strikes. Had
full employment returned in the Thatcher years it is dubious
But what of her clients, the Liberal Ascendency? Would they
not be dismayed by much of what she did? Well, by the time
Margaret Thatcher came to power liberals had really lost
whatever interest they had ever had in state ownership or the
genuine improvement of the worker’s lot. What they really
cared about was destroying They had new clients, the vast
numbers of coloured immigrants and their children, women,
homosexuals, the disabled, In short, all those who were
dysfunctional, or could be made to feel dysfunctional, in
terms of British society. They had new areas of power and
distinction, social work, education, the civil service ,the
mass media to which they added, after securing the
ideological high ground, the ancient delights of politics.
I can hear the cry, but was not Margaret Thatcher undone by
circumstances? In some degree that is of course true,
particularly in her early years as prime minister. Had she
been a single term prime minister it would have been a fair
excuse. But the thing to remember about the woman is that
she was prime minister for eleven years. Where she can be
utterly condemned is in her failure to ensure that she had a
cast iron majority of like minded ministers in cabinet. Not
to have done that by the beginning of her second term was
stupid; to fail to do it at any time in her premiership was
both scarcely credible and unforgivable. To leave Europe in
1979 can reasonably be seen to be a pipe dream considering
the state of the Tory hierarchy and indeed parliamentary
party at that time. But to arrive in 1990 at a situation
where not only was Britain still being taken for a mug but
to be forced into the absurdity of the ERM. Dear God! She was
so weak that she was unable to prevent the effective
sacking of a favourite cabinet minister by the German
Think of her major cabinet appointments. She ensured that the
Foreign Office remained in the hands of men (Howe and Hurd)
who were both ardent Europhiles and willing tools of the FO
culture, the Chancellorship was entrusted to first Howe and
then Lawson who was also firmly committed to Europe. The Home
Office sat in the laps of the social liberals Whitelaw, Hurd
and Baker, Education was given to Baker and Clarke. Those
appointments alone ensured that little would be done to
attack the things which liberals held sacred.
What would be a fair summation? She is that most dangerous of
incompetents, a proactive incompetent.
She is one of those strange creatures who appear charismatic
when placed in the supreme position but vaguely absurd and
curiously insubstantial in any other state. I remember a
Radio 4 interview between Michael Chalton and Margaret
Thatcher in which Chalton was speaking in his usual
coherent but intellectually sophisticated manner. Thatcher
failed to answer many of his questions but this was not for
the usual reason of political evasiveness: rather she failed
because she patently did not understand what he was saying
and produced some extraordinary non sequiturs by way of
reply. There is also her performance at Oxford where she took
a Second in a subject (chemistry) which lends itself to the
achievement of a first by any undergraduate of normal
Hat tip Brian Micklethwait.
1) This is short notice, but there will be a Libertarian Alliance meeting on Monday the 9th March 2009, starting at 7:00pm. The meeting will be in the upstairs room at The Coach and Horses on Great Marlborough Street, Soho, London. To find out who the speaker will be, and to ask any further questions, send e-mail to David McDonagh firstname.lastname@example.org
2) The Chris R. Tame Memorial Lecture will take place on Tuesday 17th March 2009 between 6.30pm and 8.30pm at the National Liberal Club, One Whitehall Place, London SW1 (nearest tube Embankment). Professor Kevin Dowd will speak on “Lessons from the Financial Crisis: A Libertarian Perspective”. For further details, contact Tim Evans email@example.com
3> Here is a video of my speech to the Marlborough Group on the 22nd February 2009. In this, I take issue with those who claim that British law and the British Constitution have been breached by New Labour. Constitutional lawyers like Michael Shrimpton are wholly correct that whatever goes through Parliament has the force of law. He is also right that the Queen cannot be held to have broken her coronation oath – any Act that conflicts with the words of her oath are taken to have altered the meaning of the oath. My reply is to ask “so what?” The law and Constitution exist to enable ordinary people to live in peace and freedom. They draw their legitimacy from the extent to which they achieve this purpose. When they stop achieving this purpose, or when they begin to frustrate this purpose, they become illegitimate, and can rightly then be overthrown and replaced. Where the Monarchy is concerned, I argue that, whatever the lawyers may claim, there is a contract with us. We agreed in 1688 to regard these people as the Lord’s Anointed, and they agreed to respect our rights, and also to protect them. Since the present Queen has broken her side of the bargain, she had no right to our deference. This speech was given in the heart of England to a meeting of rather elderly conservatives. There was barely a single person there who had not been made by circumstances into a fan of Oliver Cromwell. Here is the speech link:
4> My speech to the Oxford Union on the 26th February 2009 went very well. I will write a full report of this in the next week or so, but am very busy at present.
…..and shows that they must have been waiting, pooing their pants in fright, to get rumbled by someone. God, how slow can bloggers be sometimes? (But _IF_ you go here, you will see that the Libertarian Alliance’s duty-Chimpanzee-Type-Writing-Shift for 2004 (in the unheated Nissen-hut, not the other one) had indeed spotted ASH already!) (And if you go here, we have a raft of ancient writings about fake-charity and its iniquities, or even real charity, and its role in a liberal civilisation.)
The Landed Underclass notes today that Charity Finance (whatever that is for) has logged the existence of fakecharities.org, a site set up by the estimable Devil, to expose and monitor the use of public funds directly by “charities”.
The “charities” named in fakecharities.org are almost entirely engaged in fake lobbying: lobbying, it may be added, for mainly liberty-restricting ends such as more persecution of smokers, alcohol-likers, drivers, people who enjoy tasty food such as burgers and chips, other kinds of poor people, and suchlike.
Libertarians of all kinds will know that under liberal or what we call “free” societies, history shows the greatest rate of expansion of private charity. This is contrasted with the situation of charities under a Big State, which forcibly confiscates so much of people’s resources that charities actually suffer and attenuate. The only way they can survive is to actually abdicate their caring role in favour of the Big State tkaing it over, and than “caring” on behalf of “the people”. Naturally, the “charities” which then do best out of the pig-trough are those with the most Statist ends themselves. Small charities which actually do charity may survive in odd niches and localities, such as this one: but those which don’t trough-pig mega with the sharpest elbows will eventually go down.
Of course, this is what a Big State wants.
Or you could have a charity like this one, which not only has been doing something supremely useful for many decades, but takes no money from Big States.
Here. This chap is a Canadian conservative: I have always hoped that there would be some of these.
Comment from Blogmaster:- I should have said that this is the post which Keith Neilson comments on below. The original post was a stormer, which has mightily upset certain Tories in the UK.
Thursday, 26th February 2009…a date to watch, for some fireworks…..
At The Oxford Union,
Dr Sean Gabb of the Libertarian Alliance
shall oppose the following motion:-
“This House Would Restrict The Free Speech of Extremists”.
Should the BBC have sacked Carol Thatcher because she said in a private conversation that someone looked like a golliwog? No, says Sean Gabb, Director of the Libertarian Alliance. Jo Brand was investigated by the police for allegedly inciting violence on BBC 1 against her political opponents. Carol Thatcher used a word. One gets the sack, the other the BBC’s unconditional support. But, then, Jo Brand is part of the New Labour Establishment. Carol Thatcher is the daughter of a Prime Minister who still makes the ruling class shudder.
The Car Industry Bail Out:
Are There no Politicians Now Who Understand Economics?
by Sean Gabb
The British Government has just announced what may be £2,000 million of subsidies for the car industry in this country. Responses to the announcement range from gratitude that jobs and manufacturing capacity are to be saved to complaints that the subsidies do not go far enough. My reading and viewing may not be comprehensive, but I have seen nothing in the mainstream media denouncing the subsidies as at best politically motivated – much of the car industry being located in constituencies held by Labour – and at worst economically illiterate. Since the first grounds of denunciation ought, after nearly twelve years of these people, to be self-evident, I will devote myself here to the second.
We are continually told at present – which is somewhat more than usual – how government spending had created, or will create, so many jobs. Therefore, the immense expansion of the British State since 1997 has created three hundred thousand jobs or whatever. Some deplore this because most of those employed can be expected to vote Labour. Hardly anyone denies there has been a net addition to the number of employed. The same reasoning underlies all discussion of how we are to get through the recession on which we have now started.
The truth is, however, that government spending does not so much create as displace employment. Every pound spent by the Government must first be taken from the people, who cannot then spend it for themselves. If the money is taken is taken through taxes, it exactly reduces the ability of the people to spend or invest it for themselves as they wish, or to save it for transfer, via the banking system, for others to spend or invest as they wish. If the money is borrowed, it again exactly reduces the amount of money that the people can borrow to spend or invest.
It is more complex if the money is printed by the Government – or, more likely nowadays, borrowed from the banks in a fractional reserve system. But if its effects are often hard to trace until after the event, inflation is no less a tax than any other means of providing money to governments. It may reduce the actual purchasing power of money left in the hands of the people. Given the downward pressure on manufacturing costs we have seen during the past generation, inflation will at best reduce the potential purchasing power of money that already exists.
This being so, the argument that government spending creates employment relies on a blindness to the concept of opportunity cost – that every pound spent on paying one salary is a pound less to spend on another salary. Put more simply, it is a case of what Bastiat described as “what is seen and what is not seen”. We see the jobs created by the Government in it “regeneration” projects. We do not see the jobs that would otherwise have been created to supply things that people actually would have bought had the money been left in their own pockets.
For the past six months, the argument has been reinforced by the claim that government spending is needed to make up for a disinclination by others to spend or invest. This being so, it will not be a zero sum game, but will create net employment. There is no doubt that there has been a deflation. People are borrowing less and saving more. The banks have been increasing their financial reserves. But it does not follow from this admission that government spending is needed to make up the deficiency. The fall in spending is not the cause of the problems we face, but is a symptom.
For perhaps the past decade, many central banks in the rich world have kept interest rates below the level needed to balance the supply of savings and the demand for loans. When other prices are forced below their equilibrium – rent control, for example – the result is shortages. In the fractional reserve system that we nowadays have, however, pushing interest rates below their equilibrium has simply enabled the commercial banks to create money out of nothing. In the past, this would have led almost at once to price increases. This time, with most consumer goods made in countries where supply curves are very elastic, and with exchange rates only loosely related in the short term to the financing of foreign trade, and with financial and property markets able to absorb what long seemed to be limitless amounts of money, the result was a speculative bubble, in which consumer prices hardly rose, and in which most of us were persuaded that we were growing richer.
These bubbles never last. The new money is brought into being through bank lending that cannot continue forever. There comes a point where people have taken as much debt as they can service, or where they have invested on the basis of trends that stop rising. It is then that some event that would otherwise have been overlooked becomes the excuse for a panic. The bubble bursts. Net borrowing turns negative. Prices of overbid assets fall. Prices of securities fall to the value of their underlying assets – assuming there are any that can be identified. Much investment in new capacity is shown to have been unwise.
On this reasoning, the present fall in spending is not an event in itself that needs to be and can be cured by higher government spending. What we now have is really part of a cycle that began with the artificial lowering of interest rates, and that will end with the liquidation of the unwise investments and the correction in asset prices. The British Government’s policy of trying to halt the deflation with higher spending and even lower interest rates cannot do better than lengthen the cycle during its unpleasant phase. It also increases the size of the State – which already takes far too much of our money and spends it on things we would never buy given a free choice.
But I return to the bail out of the car industry. This is not a case of limiting collateral damage. The car industry is not a fundamentally sound victim of circumstances. It is instead one of those sectors in which unwise investments were made. There is no shortage of finance for businesses that really are considered sound. Even I still receive one or two pre-approved loan offers from banks I never knew existed. If the car companies cannot borrow to maintain their working capital, it is because no one believes in their fundamental soundness. Even at the height of the boom, it was claimed that there were too many car makers, given present and future demand for cars. There will now be several years when hardly anyone with an ounce of common sense will spend money unless he must on a new car. No one seems to care if estate agents all over the country are losing their jobs. If car workers are now to lose their jobs, it is for the same reason.
Of course, there are things the Government could do and ought to do to help the car industry. These are all negative. For the past twelve years, it has been running propaganda campaigns and piling taxes and regulations that have tended to make driving less attractive than it might otherwise have been. These propaganda campaigns should be ended. The road excise and petrol duties should be cut. The cameras and yellow and red lines should be taken away. The police officers now deployed to harass drivers should be dismissed – there being, in any event, more policemen than needed to enforce the laws of a free country.
I move back now to the general difficulties we face. With increasing desperation, Gordon Brown is denouncing anyone who questions his policy of inflation as wanting to do nothing. Well, doing nothing at all would be an improvement on what he has been doing. However, there are things the Government could do. None of it would take us back straightaway to the prosperity we have lost. But it would shorten and moderate the pain that stands between us and recovery. I suggest the following:
I could go on, making more and more claims unlikely ever to be conceded by the British Government or any other. But the first two, plus a few cuts, would go far to shortening the recession. Sadly, even these will not be tried – not at least until the Keynesian remedies everyone wants have been tested to destruction.
Murray Rothbard, America’s Great Depression
Henry Hazlitt, Economics in One Lesson
Hans-Hermann Hoppe, Credit Creation or Financial Intermediation?: Fractional-reserve Banking in a Growing Economy
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