Crap: A Guide to Politics - The Blog

CHEEKY CRAP FROM OUR PRIME MINISTER (for how long??) COURTESY OF IAIN MARTIN

“The far greater depressions and inflations of the twentieth century have not educed nearly as much mass interest in economics as did the milder economic crises of the past century” - Murray Rothbard, History of Money and Banking in the United States (Mises Institute)

I comment on the extract below from Iain Martin, the excellent Sunday Telegraph columnist. Iain Martin is far from being a regular crap artist, but free marketeers are too thin on the ground to let false history pass without comment especially when it comes from our Gordon:

"Confession of a free marketeer: Gordon Brown is right
By Iain Martin

Henry Morgenthau Jr is a name not much mentioned now; in his time he was a giant, an architect of the new world that emerged from the wreckage of war.

He was President Roosevelt's treasury secretary, who chaired the Bretton Woods conference in New Hampshire in 1944 and largely got his way on a redesign of the global capitalist system. The results were a new basis on which currencies would operate, the creation of the World Bank and the International Monetary Fund to encourage growth, more open markets and a greater role for government in the regulation of international finance......

In 1999, Brown said: "The founders of Bretton Woods resolved that the failed policies of laissez-faire which resulted in vast inequities and recurring depression from the 1870s to the 1930s would not be repeated… Unregulated market forces had brought great instability and even greater injustice. In the post-war era, governments had to work collectively.".....

the lesson from Morgenthau and his contemporaries is that we are not powerless in the face of forces over which we might think we have no control. Brown's intervention shows that he understands this. In response free marketeers will need to have more to say than "get government out of the way"."

Free marketeers do indeed need to have more to say than “get government out of the way”.  They have to say why, which in this case means pointing out that Gordo’s “laissez-faire” and “unregulated market forces” had disappeared (at least insofar as Bretton Woods was concerned) long before his starting point of 1870!

For a simple proof of this one need look no further than banking, where free market banking had disappeared in England at least two generations earlier and in Gordo’s Scotland (despite an excellent record in its period of genuine free market banking) in 1844-5.  (In Morgenthau’s USA the early influence of government was even greater; genuine free market banking never existed there at all)

On April 15th in the Financial Times, Martin Wolf (another regular guy) had to admit that: “the incidence of banking crises has been as high since 1980 as in any period since 1800” whilst Ben Bernanke, Chairman of the Federal Reserve Bank, has admitted that the Fed caused the Great Depression. 

The UK’s own Great Depression was caused by government too, by its return to the Gold Standard in 1925 at the parity of its departure in 1914, despite the years of substantial inflation in between, (an error which provided an excuse to go off it altogether in 1931).

In fact the 1925 version was a Gold Exchange Standard, which it was able to impose on other countries, the essential feature being an internationally co-ordinated inflationary government-issued paper money based on the UK pound.  Bretton Woods provided the same thing except that it was based on the US dollar, which was the main objective of Morgenthau.  Neither has stood the test of time and both caused untold damage around the world.

The last thing that is needed in today’s crisis is more government interference, internationally co-ordinated or not.  Gordo should learn a little more about financial crises in his own country and how it avoided them in its period of free-market banking.

Free-marketeers have indeed more to say than “get government out of the way”.  We should also say “get government schools and government education out of the way; its history syllabus and lessons are bunk!

Six Social Myths

Today I take the opportunity of quoting a commentary which is not crap – it would have been in my book as part of my own commentary had I been clever enough to anticipate it.  The excerpts below come from an article in a magazine called Policy, from the Centre for Policy Studies in Australia, “the leading independent public policy ‘think tank’ within Australasia” and it is hard to find a better exposition of the Prolific Crap that sustains the welfare state.  I suppose it’s nice to know that we’re not alone in the world!

Six Social Policy Myths [Policy (Australia) Vol 24 No.1 Autumn 08]

Policy experts often think alike, even when the evidence contradicts them. This is how billions of dollars get spent on government programs that don’t work, argue CIS researchers Jennifer Buckingham, Andrew Norton, Phil Rennie, Jeremy Sammut, and Peter Saunders.

Myth 1: All children can benefit from an increase in government spending on institutional child care

What all this adds up to is that the research literature provides no strong evidence that child care is good (or bad) for all children. You would never know this from listening to the public policy experts in this field. They talk and act as if the research is clear and the issue is done and dusted. The truth is that governments are being pushed to commit ever-increasing amounts of taxpayers’ money to funding something that does not deliver the claimed payoffs. Australian child care advocates are convinced of the case for more child care and greater subsidies, but the evidence does not support their claims.

Myth 2: More government spending on education and training can solve the problem of joblessness

Recent research by the Australian Council for Educational Research (ACER) finds that, far from benefiting from more education, low ability students often lose from it.

The point that is persistently overlooked in the education and training debate is that some people are simply not cut out for year 12 schoolwork, a university degree, or a technically skilled job....

Myth 3: High tuition fees are pricing students from poor backgrounds out of university

Strikingly, the more a working-class family earns, the less likely it is that their sons will go to university, although for daughters, university attendance rates do increase slightly as household income rises. The children of the poorest professional families have higher university enrolment rates than the children of the most affluent working-class families, which suggests that parental occupation has more of an impact on children’s educational outcomes than parental income.

A person’s family background has a big influence on whether they go to university, but it operates indirectly, via school results, and has little or nothing to do with income....

Myth 4: Poverty in Australia is getting worse, and higher welfare spending is needed to counter it.

But there are at least three reasons why we should refuse to go along with this.
The first is that the welfare lobby’s definitions of ‘poverty’ are entirely arbitrary.

Secondly, the report is not measuring ‘poverty,’ but income inequality.

[Thirdly].... Household incomes fluctuate, so most people who appear under any arbitrarily-drawn ‘poverty line’ do not stay there long.

Myth 5: Higher spending on preventive medicine will reduce health costs in the future.

But the authors of these studies admit they contain no evidence that access to and receipt of primary care reduces obesity (that it modifies individual behaviour) or that it lowers the incidence of chronic disease.(32) They also admit that improved health outcomes depend on an ‘appropriate balance’ between primary and secondary care.(33)

Meanwhile, a 2002 cross-country analysis of primary care across thirteen OECD countries found that those (including Australia) that had weaker primary care systems but spent more on secondary care achieved better health outcomes than the stronger primary-care-oriented countries.(34) Of course, prevention is better than cure, but only when it works.

Myth 6: Higher social expenditure creates a more caring society.

The unifying theme that underlies all of the myths we have examined is the belief that social problems require additional government spending to put them right.

Here, then, is the biggest myth of all—the meta-myth, if you like—which is embedded in the shared consciousness of the social policy establishment. It is the assumption that government is the appropriate agency for resolving people’s problems, and that we as individuals bear no responsibility for sorting out our own lives. For as long as this myth persists, ‘social problems’ will continue to grow, government budgets will continue to expand, and job opportunities for social policy experts will continue to multiply.

BACK SOON, WITH MORE REAL CRAP

PROLIFIC CRAP FROM MATTHEW PARRIS

At the launch party of my book at the Institute of Economic Affairs, I quoted with approval a paragraph from the Tory MP and Times columnist Matthew Parris:

“The British Left has never had a problem in principle with intervention, coercion  or prescription. Why would they? To the leftist mind, impressed with the  possibilities of collective action channelled into statist structures for the purposes  of increasing the sum total of human happiness at gunpoint, the idea of wading  into the Middle East to sort things out was always going to have an instinctive  appeal”.

Here is a politico linking the Warfare State and the Welfare State – both need guns. Now that is promising. Maybe, I thought, we could move off the bogus spectrum of Right versus Left (what would the British Right do, Matthew?) to the real issue: Big Government versus Small Government, and thus debate what functions necessarily belong to Government. What must be done at gunpoint?

We had Matthew’s answer on Saturday 29th March; one helluva lot. Under the title of “The State Works; Have faith”, his list of things that only Government can do includes the following:

"Put Canary wharf on the map. Get Crossrail built. Get roads built. Get decent  healthcare for those who are poor and chronically sick. Underwrite and arrange  free and universal schooling. Protect us abroad [wow] and police us at home.  Force the pace on Climate change. Frame, amend and administer the law. Defend  the interest of the generality against the appetites of individuals. Create a  national park, guarantee a green belt. Hold back the march of a million breeze  block bungalows across the countryside. Redistribute wealth and power."

Both history and theory demonstrate that nothing on this list must necessarily involve Government, and much of it is touched on in my book (the basic issues are ownership of property and the signals of market pricing).  But what I would like to concentrate on here is not Matthew’s list above, but rather his assertions below:

“The great challenges as they appeared in spring 2008” are “the environment,  the regulation of banking, fair trade, malaria and HIV-Aids, congestion,  immigration, asylum.  What has anti-statism to say about any of these?  I cannot  remember a time when the ideas of Hayek, Joseph, and Sherman all seemed more  distant to the anxieties of the hour”.

Firstly, Matthew, haven’t you left a few biggies out?  Like war, including Iraq (on which you have those major debates with your colleague David Aaronovitch), political corruption, and falling living standards, all of which are the direct result of Big Government, and only Big Government (ie your statist structures). What about major government cock-ups (like losing discs with data for 25 million people, or Katrina, or last summer’s flooding – about all of which Big Government had been warned months and indeed years earlier and done nothing about it).

Secondly, let’s look at the challenges named by you and generously assume that they are the topics on everybody’s lips (I’ll leave out the environment – too long to cover here, so buy my book!):  banking, where your now irrelevant Hayek’s proposed denationalisation (ie re-privatisation) of money is still the only solution; fair trade (if it’s not free it’s unfair and highly damaging to the poor); malaria and HIV-Aids, (where Big Government is responsible for the deaths of millions of people by banning DDT); immigration (never a problem until Big Government took it on, and now a huge issue as I write – see also my book page 63); and asylum (where last week The Independent Asylum Commission attacked the system as inhumane).

On all these matters the State does NOT work. Anti-statism can hardly do worse. Indeed Statism stole these issues at gunpoint, Matthew, from the far superior laissez faire system. Oh, and by the way, that chap Hayek not only revealed statism as dictatorship (elective or not) in The Road to Serfdom. He showed why the worst get to the top. And he showed elsewhere that the perennial “challenge” of living standards and the quality of life is far better dealt with outside the State, because the taxes government take attack the division of labour at its roots.  My calculation (see Chapter 7 of my book) is that every extra pound of tax reduces overall living standards by about 65p, and vice versa, and that’s before any waste!

Come off it, Matthew.

I should have known better, of course. In Chapter 8 (Ideological Crap) of my book I took to task another Times columnist, Associate Editor Anatole Kaletsky, for including in his necessary list for Government the following: law enforcement, poverty alleviation, environmental protection, the promotion of public culture (see my entry of March 10th on “Crap Art”) and the financing of pure scientific research (see October 29th). And this from a self-described “instinctive liberal”!

THE PUBLIC SECTOR CANNOT BE EFFICIENT

In the Daily Telegraph of 17th March, Philip Johnston lays into Government waste, referring at length to a forthcoming book by John Seddon “Systems Thinking in the Public Sector” which apparently argues that the massive waste is not deliberate; it arises “because it has failed to listen to people who know how to run services on behalf of the customer rather than the producer”.

Thus:

“public services have requirements placed upon them by a whole series of bodies that are all based on opinion rather than knowledge”.

Mr Seddon is not enamoured of “local engagement” or “citizens juries” (Three cheers!).  He argues that:

“what people want from public services is for them to work properly…… waste  can be eradicate if the systems are properly designed against demand rather than  phoney outcomes”.

Mr Seddon is an occupational psychologist and “management thinker”.  Good luck to you and your book, Mr Seddon, but quite frankly this all seems very much beside the point.  In fact it seems very similar to the proposals of Michael Barber, a partner in the management consultants McKinsey & Co., and a former head of Tony Blair’s “delivery unit” – see Chapter 12 (Prolific Crap) of my book.

These people have to earn a living, but I am surprised that Philip Johnston doesn’t ask two simple questions:  How does one design against “demand” if you don’t know what the  demand is?  And how does one decide on what aspects of life and civilisation should be in The Public Sector?  After all, there is no problem with “demand” in markets; satisfy it or go bust.

How, for example, would one “design against demand” in assessing the merits of single-sex hospital wards referred to in my previous entry (February 27th).  Outside the public sector – private hospitals for example – it’s easy – suck it and see.

What kind of “knowledge” is it that censors the most wonderful information system available to humanity – the signals given by market prices?

What other “knowledge” tells NICE how to assess the value of expensive drugs – or to say “yes” in Scotland but “no” in England?  Or to advise Ed Balls on class sizes?  Or on the acceptable number of children who don’t get into their first choice school?  What are the acceptable losses in a rural school or post-office?  What is a sensible cost for roads – or flood defences?  It looks awfully like “back to the producers” to me.

Come on Philip.  Wait, my apologies!  I’ve just thought of something.  No doubt this is the first of a two part article, with the obvious questions to come next time round?  Isn’t it?

Crap Art

One of the (very positive) reviewers of my book pointed out that the Crap categories can sometimes overlap.  This entry shows that all too clearly – where Misleading Crap and One Rule for Them Crap vie for the top position.

My selected issue is the row over funding for the Arts.  Before the storm broke in January Dame Helen Mirren had called for tax breaks for the film industry.

“Tax breaks are absolutely what is needed to keep London alive as a film capital  because we are facing competition not just from California but the Eastern European countries as well” (reported in The Evening Standard 30th Non 2007)

So is the wine-growing industry, Dame, and no doubt 101 other industries as well. (And how about little financial gesture from the film stars?)

The storm came early in January when The Times reported that The Arts Council faced an unprecedented vote of no confidence from hundreds of angry actors and directors opposing its decision to terminate the funding of nearly 200 of the nation’s companies:

“Kevin Spacey, the Oscar-winning star, gave warning of a revolution and Sir Ian  McKellan, one of Britain’s finest actors, called the cuts destructive”.

They’d certainly help to destroy a little of the enormous welfare-state-in-reverse enjoyed by our elitists, starting with the BBC.

And how about the Tate Gallery, (with the ubiquitous City toff Paul Myners a director) secretly buying works of art from its own trustees (reported alongside other insider-dealing practices which would put the City to shame, by David Lee in the Sunday Telegraph of 13th January)?

Back in the main business of funding, the Arts Council’s approach was described as “bollocks” by the National Theatre’s director, Nicholas Hytner:

“They [the powerful and influential at The Arts Council] don’t just believe the  bollocks, they live the bollocks.... I think there is a very simple proposition here.  Good theatre – and for “theatre”  read the performing arts in general – deserves public investment”.

Why the cuts, affecting some 200 cultural bodies?  According to The Times (2nd February) the Arts Council argues that they are necessary to fund 81 new organisations and projects, and that overall the Art Council’s spending has “risen by 9 per cent, spreading £1.3 billion between 888 organisations over three years”.

So there is an overall increase! You can imagine the corruption going on here.  The description applied to the United Nations by Stefan Halper “a miasma of corruption” – see Chapter 9 (One-Rule-for-Them) of my book, seems to fit very well to the Arts Council and all its works.

One could go on.  I was reminded of all this by the recent lynching of Margaret Hodge for daring to suggest that The Proms had “failed to attract a diverse audience and unite different sections of society”, upon which Gordon Brown’s spokesman (great things, spokesmen) praised the concerts as “a wonderful, democratic and quintessentially British Institution”.

Democratic?  Come on.

The last word (nearly) can go to extracts from two letters to The Times of 6th March.  Valerie Thompson of East Horsley, Surrey tells us that:

“The Government seems to be trying very hard to destroy the last remnants of our  artistic life by taking cash away from arts organisations”.

Taking away from, Valerie?  Taking away from?

Susan Seely from Worsley, Manchester, points out that the Proms are hardly zenophobic, with the international composers on show this year including Mozart, Beethoven, Grieg, Debussy, Gershwin, Chopin, and Verdi.

Now there’s a wonderful list. Plenty of artistic life in those days; I wonder how many of that little lot were funded by “public investment”.

THE CATASTROPHE THAT IS THE NHS

Chapter 3 (Meaningless Crap) of my book records Dave (The Vague) Cameron’s answer to the permanent crisis in the National Health and Education industries which supposedly are, as Gordon Brown never tires of saying, “free at  the point of use”.

“Yes you should meet higher standards, yes you should give your patients and your pupils more.  But we’re not going to tell you how to do it.  You are professionals.  We trust in your vocation.  So in a Conservative Britain, professional responsibility will provide the answer to rising expectations in the NHS and schools.”

(David Cameron, Conservative Party Conference 2006)       

No doubt Dr Michael Ingram, a GP who writes occasionally for The Telegraph, agrees wholeheartedly, declaring on 5th February that:

"Waiting in the wings are the privatisation of general practice and its metamorphosis from a personal, long term relationship of care that is valued in  this country and admired abroad into a private production line system where the concept of “your” family doctor is just a distant memory”.

What planet is he on?  Surely this has to be Cheeky Crap.  “Your” family doctor, the embodiment of which pre-dates the NHS (remember Dr Finlay?) has been a distant memory for at least 30 years.  The state-run NHS, the world’s third largest employer, has been reduced to setting utterly meaningless, weasel-word targets and other bureaucratic nonsenses, for want of price signals.  Take, for example, the current mixed-wards scandal.  No doubt a stab at the likely costs of a full makeover has been made, but there is only one way to find if mixed-wards are worth it, and in what circumstances.  That is not to commission a study, it is to test it on paying customers.

The more fundamental point demonstrates why professionals alone, whatever their intentions, cannot run any large organization, let alone one which is in the “public” sector and “free at the point of use”. It is that, as Nikita Krushchev is reported to have said, “When all the world is communist, Switzerland will have to remain capitalist, so that it can tell us the price of everything”.1

Prices are the invisible hand which guides decisions about the use of all scarce factors of production (capital, labour, land and a myriad of sub divisions); that is why socialism is impossible, and why “national planning” must always be grossly inefficient. (It is not surprising that government censors free market prices wherever it can, that way we, as well as them, must grope about in the dark.)  It is also why the NHS cannot even grope without them.

What, then, has enabled the NHS to stumble along this far?

Firstly, I suggest, is that it started life by compulsory nationalisation of a system that already worked.  As that system became obsolete (via changes in technology etc.) the NHS began to crumble.  Secondly, á la Krushchev, it relies on “Switzerland” i.e. external markets.  Do not Messrs Cameron and Ingram realise how vital in hospital budgeting and funding are its tariffs, (e.g. for operations) copied from the private sector?  Thirdly, it is bolstered by the taxes of the increasing number of taxpayers who don’t use it, preferring to go elsewhere at home and (increasingly) abroad.  (Were this iniquity to be removed by tax rebates, the exodus would become a flood.)

The anti-choice nature of the NHS has been deliberately muffled since its birth by the socialist slogan “from each according to his means, to each according to his needs” – misleading crap and ultimately meaningless crap.  Why?  Because any group of citizens and families with the same means demonstrates a huge diversity of choice amongst different goods and services – health, education, holidays, hobbies, shopping, eating out, and so on.  Only a Stalin would remove such choices by nationalisation and taxation in the name of “free at point of use”.  Only a Stalin would gladly trade several thousand hospital deaths a year in the name of socialism2.

And a Bevan, of course. Aneurin Bevan, the founder of such injustices, is one of the Cameroons’ “Key Britons” whom we must be taught to remember for all time (yes, as a beacon not a blight).  Yet within a couple of generations or so, either the NHS or civilization in the UK will be doomed.

1. The underlying point was first proved by Ludwig von Mises in the 1920s and has never been refuted.

2.   By, for example, outlawing the sale of organs for transplants and by wilful neglect of MRSA,  virtually unheard of in private hospitals.

IDEOLOGICAL CRAP: Children of the State

On October 29th 2007 I referred to government-financed “science” and its propensity to create and perpetuate myths (such as “the world is flat”). Junk science, or more accurately  just junk.

Surely nowhere is this clearer than in State “Education”, a test-bed for increasingly potty ideas under the flag of “social engineering”, introduced and abandoned over several generations of the intensification of the Welfare/Warfare State.  As Per Bylund says (here) all central planning increases central power and when the expected results do not materialise, we get yet more central planning.

The latest junk comes from the Universities of London and Sheffield.  The former, in the shape of Stephen Machin and Sandra McNally, tells us that

“Some aspects of primary education are geared in favour of helping higher  income groups…..policies favour parents which…. know how to use published  information….but can also afford to choose exactly where to live”.

Let’s hope that too many millions weren’t spent on a statement of the obvious (relating to State education).

The latter’s chief adjudicator Philip Hunter says

“Parental choice in the market leads to segregation”.

What market is this?  Not education, that’s for sure.  Even if it were, he’s wrong; Chapter 8 of my book points out that in the USA a genuine cause for concern, racial segregation, is considerably less pronounced in private schools than state schools.  And both here and there, many state school teachers (to say nothing of the pols) prefer private schools for their own children.

The market, Mr Hunter, provides a permanent race to the top under the incentives of improve or die.  Prices for all goods are initially high and the market is small, but the search for efficiency provides a virtuous circle of reduced prices, mass production, and continuous improvement (consider motor cars). 

But the reverse applies in the “public” sector.  (Imagine what a lottery would do for supermarkets, sports teams, computers, and so on.)  As hooligans colonise every school, standards will plummet – to those of current government care homes.  Already hundreds if not thousands of West Indian parents in the UK are sending their children back to the Caribbean for a better education; under lottery placement (from which politicos will be exempt of course) the exodus will be enormous.

No prizes for guessing what happens next in the name of “social justice”.  Private education will be banned.  And after that, forced marriages (currently and rightly under attack by the politicos) will become the last desperate throw in the battle for “equality”.  Wealth must marry poverty, brains must marry brawn, and beauty must marry ugliness.  The return of eugenics with a vengeance.

You think I’m kidding?  Let’s hope so.

ILLOGICAL CRAP FROM THE POLITICOS EN MASSE

The politicos are joined at the hip on tax and spend.  On December 15th last, The Times reported that the Cameroons are “considering a plan to end the BBC’s sole claim on the £3.2 billion licence fee and parcel it out to other broadcasters”.

On 18th January The Times reported that James Purnell (as the Labour Government’s Anti-culture Secretary, but now promoted to fill the gap left by the priceless Peter Hain)  suggested that the £3.4 billion licence fee (wow, 6% inflation per month!) could be carved up in future between the BBC and commercial broadcasters committed to making “quality public-service programmes”.

Naturally, the Chairman of the BBC Trust, Sir Michael Lyons, lost no time in protesting that this “could threaten its (the Beeb’s) ability to deliver public-service programmes and prompt a viewers’ revolt”.  In contrast the Chairman of the broadcasting Policy Group said that the proposal “may be a sensible first step to protecting the key objective of preserving plurality of supply”.

Meanwhile the Beeb’s Chief Executive Mark Thompson is pursuing an uncosted venture to provide political analysis for every schoolchild arguing that “the BBC was the right body to bring politics to children”.  Ugh!  (Note the singular “the” despite the BBC’s well known bias and corruption.)

As if this weren’t enough, a letter to The Times, correctly describing the current situation “it is as if anyone who wished to read The Times had to take out a year’s subscription to the Guardian…” quite illogically welcomes the Tory proposal!  (So anyone not wishing to take out a subscription to either The Times or the Guardian – or the BBC – must do so for all three!).

This is exactly how the politicos build up their empire, picking off an activity or organisation to nationalise or subsidise (in line with a lobby group’s plea on the basis of “public service” or other such tarradiddle) and later on when the injustice is plain to see, embracing all the competition too.  If the BBC had (sensibly) never existed, who would now be clamouring that all broadcasters – and other media, including The Times and the Guardian – should be funded partially by taxes?  And does anybody think that the overall subsidy would then remain at £3.4 billion? (In France President Zarkozy seems to do what he wants without clamour; he has just decreed that the five channels that make up France Télévisons, where he has some friends of course, will be financed entirely by taxpayers.)

None of this could be sustained without politicos in the media, where the Fourth Estate long since gave up its role as guardian of us the sheeple against the rapacity of government. The Times is a good example on this very issue; David Aaronovitch falls headlong into the same trap as the letter above (see my book Chapter 6) and Tim Hames became a fully paid-up member of the carve-up brigade on Jan 28th.  Government now assumes all wealth is its own, to “parcel out” to those who created it – and those who didn’t, whenever it pleases.

To use a popular word to which I shall return in due course, government is “colonising” all our private areas, possessions, and rights. The Internet, and organisations like The Taxpayers Alliance, are freedom’s only hope.

In the last paragraph of my previous entry (Mad as a Hattersley  (Jan 24th) I referred to a book by Lawrence White, published by “Blackwell”. In fact the publisher was The Institute of Economic Affairs; Blackwell published another, related, book by the same author. Apologies for any confusion.

MAD AS A HATTERSLEY

I hope that my previous entry convinced readers that under corporatism, the pols have exactly what they want – the lever of power over business and a ready-made scapegoat when it all goes wrong.

What has Roy Hattersley got to do with it, though?  Okay we’ll accept that he spouts Newspeak.  Like wealth equals freedom and consumers are “stakeholders” who can therefore gatecrash on any business function but no political ones. (See Newspeak Crap in my book.)

We can also accept his view (The Times, 1st January) that shareholders in Northern Rock (or any other company) should not be bailed out by taxpayers (what about employees and depositors, Roy??).

We can even accept that depositors’ savings “were put at risk by the economic system that Labour’s opponents (the Conservatives) support”.  (And that Labour’s supporters support, of course – you missed that bit, Roy.)

But what nobody with the faintest idea of corporatism can accept is that Northern Rock shareholders “are typical casualties of the free market”.  What sort of a free market is it in which banks (a) need a government licence, (b) cannot issue their own notes (the Central Bank has a monopoly of role issue) (c) have to use interest rates based on those rigged by the Central Bank (d) get government support (e) make billions from government in other ways – advising them, raising capital for them, and trading their “securities”?

Will that do for now, Roy?  At least you can rest in the knowledge that a real live economist who also writes in The Times (17th January) agrees with you.  Despite the fact that the situation in the USA is much the same, Anatole Kaletsky calls Citigroup and Merrill Lynch “the proudest and loudest proponents of American-style private enterprise”.  How about American-style corporatism, Anatole?

But Hatters hasn’t finished.  “The depositors were rescued by government intervention in the economy.  The whole story might be a parable designed to give ministers the courage of their social engineering convictions”.  Whoops, sorry Roy, “their social democratic convictions”.  I must have been thinking about my next piece for this blog.

Here’s a better description; “a fable designed to gull we the sheeple into blaming markets for the disastrous consequences of government intervention in the economy”.

You don’t need to be steeped in banking theory to see that the industry is steeped in corporatism – just look at Tony Blair’s appointment to advise J P Morgan Chase at a reported salary of £2 millions p.a.  There is only one way that Tony can be worth anything to a business – by using his skills as a lobbyist and persuader to gain favours from governments.

Like I said, Roy, corporatism, not free markets.  To learn about genuine free banking you need to go back to the early nineeenth century and look at Scotland.  Or read “Free Banking in Britain” by Lawrence White (Blackwell).  After all, they tell me you are a literate man.  For a lesson in corporatism, perhaps you could just read my book – if   you’re a busy chap working on all that social democratic guff, then chapters 5 & 10 will do. Failing that, just follow this link.

Free Enterprise or Corporatism?

Who wrote this and when?

“Nationalisation is inefficient, hugely expensive, and totally  unnecessary.  The desired results can be achieved just as effectively  and far more cheaply through taxation and regulation”.

It was part of the Conservative Party manifesto in 1974 – and duly noted in the first edition of my book.  It is not crap as such, indeed from the politico’s point of view it’s a godsend; a win-win situation with a ready-made fall-guy (the relevant industry or business when something goes wrong – note “when” not “if”). This is Corporatism in action – unholy alliances between Big Government and Big Business. 

Since that 1974 manifesto at least and in truth since World War I at the latest the journos and even Joe Public have no excuse for being gulled in this way, yet almost invariably, they attribute all faults to business and even worse, see all business as examples of the free market as opposed to state-rigged monsters.

The most glaring current (and recurrent) example is the railway industry; it is clear that Network Rail is a major feature (the major feature?) and that travel price increases are “agreed” (often imposed) by the Minister for Transport or his henchmen.  What do you expect from a train operator, having already accepted the poisoned chalice of subsidies?  It is pathetic that seasoned journos (with the odd honourable exception such as Jeff Randall and Simon Heffer) and letter writers by the score carry on in the same old way, many hankering after the “good old days” before “privatisation”.

Privatisation?  Now there’s a word to conjure with.

COMING SOON

More real live crap soon, in the shape of the inimitable and unstoppable Roy Hattersley (covered in both editions of my book and still going strong), on another supreme example of Corporatism, the Banking industry – yes, he calls it the free market. Also our friend Dave (The Vague) Cameron, not ten years old in 1975 but already one of the all-time crappers, on the BBC.

In the meantime, let us rejoice that the fully nationalised industries like the NHS are beginning to be rumbled, and not before time.  I particularly like the following letter to The Times (3rd January 2008) from a Mr Brian Christley of Abergele, Conway:

“Fit as a Gordon:
Sir, with regard to the Prime Minister’s plan to withhold NHS treatment from the unhealthy (report and letters, Jan 11th): if we knew Gordon Brown’s precise weight, blood pressure, cholesterol level, etc. we could use these figures as our target for getting an appointment.”

Bravo.  (Wouldn’t it also be nice to know if persistent tantrums are a cause of high blood pressure or a manufactured safety valve, and the corresponding effects on the victims?) And how about a competition to design an application form (politicos will be exempt of course) for seeking unrestricted coverage – a privilege which will become increasingly rare for the NHS’s financiers – we the sheeple.

The point re NHS rationing is covered in Chapter 11 (Fashionable Crap) including a reference to Matthew Syed of The Times. (Items re the NHS generally feature regularly throughout the book.)