Many people, including, I suspect, many policy-makers, talk about the spill-over from the current financial crisis into the “real economy”, or how to avoid it.
The truth is there is no division. The market in its widest sense is about using scarce resources in the ways they are most valued - to serve individuals’ ends most effectively.
The price mechanism determines what is required to achieve different ends, and the utility of using the different means available, and the relationship between present and future wants largely determines interest rates.
The current financial crisis is a symptom of the need to realign resources, of the impossibility of the current organisation and allocation of resources meeting people’s most valued and urgent wants.
The progress of the financial crisis is the process of a reallocation of capital and of priorities between present and future wants.
The change is so sudden and violent because for many years governments have sought to manipulate the capital markets to achieve “growth” and prosperity. They have done this by artificially lowering interest rates, giving the impression that capital is cheaper (more plentiful) than it really is. Capital is not money as such, even if it is normally represented by money. Because the price (money) and interest rate mechanisms have been distorted, there has been a false accounting: people have lived beyond their means, consuming capital - the future seed-corn.
The sudden change in the financial markets is the result of the dropping of a collective penny, of chickens coming home to roost. The existing allocation of capital is found to be unsustainable. We have to cut our cloth to suit our means, cutting our expenditure and dedicating more resources to future (capital) purposes.
No amount of government money creation can avoid that truth. All it can do is obscure people’s real wants and what really needs to be done to best meet them, continuing to divert capital to sub-optimal ends.
It is true that deflation (like inflation) has untoward effects, itself affecting people’s behaviour, diverting them from the best paths. But the time to take steps to avoid deflation was in the past. The crisis is on us now and the quickest way through it is to let it happen. The best way to avoid a recurrence is to revert to a sound money policy - meaning a non-manipulatory policy by the government, probably best achieved by reversion to the gold standard, simply because there is little scope for the government to create or destroy a gold currency.
October 07, 2008
July 27, 2008
What Would You Do If You Ruled The World?
What three things would you do if you ruled the world?
This is what I would do:
First, I would restrict government spending to a maximum of 10% of GDP.
Second, I would forbid secondary legislation (i.e. The passing of enabling acts which allow the creation of further law and regulation at the discretion of ministers and officials).
Third, I would insist on maintaining parliamentary sovereignty.
Why these things?
Taxation must be limited because in taxing us the state co-opts us in the pursuit of its collective ends, which is necessarily at the expense of our ability to pursue our individual ends in life.
Secondary legislation must be eliminated because it gives law making powers to the executive, enabling them to avoid the rule of law: law becomes whatever they say it is.
It also makes feasible the creation of far more law, and law which is detailed and prescriptive instead of being general principles of conduct. Insisting on primary legislation helps limit the scope of government, and curtail the ambitions of politicians and bureaucrats.
And Parliament must retain its sovereignty, because it is through the mechanism of parliamentary government that those who govern are kept accountable to the people, and that there is a mutually understood relationship between the two.
Maintaining parliamentary sovereignty is of course another reason secondary legislation should be eliminated: it prevents the legislature from passing law making powers to bodies which have no accountability or relationship to the people - the road to eventual tyranny.
This is what I would do:
First, I would restrict government spending to a maximum of 10% of GDP.
Second, I would forbid secondary legislation (i.e. The passing of enabling acts which allow the creation of further law and regulation at the discretion of ministers and officials).
Third, I would insist on maintaining parliamentary sovereignty.
Why these things?
Taxation must be limited because in taxing us the state co-opts us in the pursuit of its collective ends, which is necessarily at the expense of our ability to pursue our individual ends in life.
Secondary legislation must be eliminated because it gives law making powers to the executive, enabling them to avoid the rule of law: law becomes whatever they say it is.
It also makes feasible the creation of far more law, and law which is detailed and prescriptive instead of being general principles of conduct. Insisting on primary legislation helps limit the scope of government, and curtail the ambitions of politicians and bureaucrats.
And Parliament must retain its sovereignty, because it is through the mechanism of parliamentary government that those who govern are kept accountable to the people, and that there is a mutually understood relationship between the two.
Maintaining parliamentary sovereignty is of course another reason secondary legislation should be eliminated: it prevents the legislature from passing law making powers to bodies which have no accountability or relationship to the people - the road to eventual tyranny.
June 20, 2008
Lisbon Treaty Exposes EU Anti-Democracy
Isn’t it nice to have a government that ignores its people? Isn’t it nice that Gordon Brown, heading quite possibly the most unpopular government Britain has known in modern times, goes off and ratifies the Lisbon Treaty when it is as obvious as can be the treaty would be overwhelmingly rejected by the British people, were they given the opportunity?
Should it take effect, the treaty enables the transfer of yet more powers from Parliament to the EU. In practice the powers would be transferred to the 27 heads of government of the EU’s constituent states who, acting collectively as the European Council, would be able to draw down and exercise those powers without further reference to the member state Parliaments (i.e. with one bound they are free of their peoples, and the checks and balances of their national constitutions). Especially where majority voting applies - and the Lisbon Treaty considerably extends majority voting - there is thereafter no possibility that individual Parliaments can have any meaningful influence over what transpires.
The whole process by which the Lisbon Treaty has come into existence and is being ratified, deliberately avoiding obtaining popular consent - and now following the Irish No vote nevertheless trying to force the treaty through, is itself evidence of the extent to which the EU’s various Presidents and Prime Ministers have assumed a loyalty to EU institutions above and beyond anything shown to their native countries.
When you consider that Brown (and his predecessor Blair) has proceeded without regard to public opinion, indeed by studiously avoiding ever engaging with the British public on the matter, and that at the last election the Labour party were afraid to seek a mandate to carry through a new EU treaty, and instead preferred to defer the issue by promising a referendum on the outcome, Brown is clearly behaving undemocratically.
Brown has contrived to act despite the wants, interests, desires, and aspirations of the British people. He has made no effort to persuade the British people of the rightness of what he is doing, and he has wholly failed to solicit their agreement.
When you further consider that the changes the treaty brings about are not just to do with the country’s internal constitutional arrangements (which would leave open the possibility of their future reversal by Parliament), but are changes that make Britain subservient to a superior judicial, legislative, political, and constitutional regime located elsewhere (thereby making any unilateral reversal impossible), it is quite unforgivable. I guess Brown has too much hubris and sense of personal historical destiny to feel any shame, but he should. He may have the political power, but what makes him think he has any moral entitlement to do such a thing? The guy is a thug.
It is true Brown has run his ratification through Parliament, but no election was ever fought on the issues raised by the treaty, and the promise of a referendum buried the then impending treaty as an issue when the election was fought. Now Brown has avoided a referendum by claiming that the document he has ratified was not the document the government had in mind when it promised a referendum.
In the light of the Irish referendum no vote, there are many treaty proponents claiming that referenda are not the way to decide such important matters. The treaty is obviously far too complicated to be pronounced upon by ordinary, and for the most part ignorant, people in a referendum. In any case, the range of issues rolled up into the treaty is far too wide for a crude yes or no answer. Or so they say.
Too complicated? The treaty’s proponents are being disingenuous. There are very few MPs who have read the treaty, let alone properly understood it - to do so means considerable study and analytical work. This is because the treaty was deliberately cast in the form of a lot of amendments to the pre-existing treaties, both to hide the fact that its content is pretty much the content of the failed Constitutional treaty; and to add credence to the argument that ordinary people would not understand the treaty and so should not be given the power of decision over it.
So if the political establishment - including the Irish Prime Minister, it seems - have not read the treaty, and take their understanding of it second-hand, there can be little force in the argument that the treaty is too complicated for the public to decide upon.
Referendums are too crude? Well Parliament itself cannot amend the treaty, but only say yes or no to it, so the idea that the treaty comprises too many pieces to be susceptible to a simple yes or no by the people is also revealed to be empty: yes or no is all anyone, however grand, can say to the treaty.
Why should we assume ordinary people are not fit to be consulted on the treaty? It is after all the general public in whose name and for whose benefit the treaty is being incorporated into law, and who will have to live with the consequences, good or bad, so they certainly have an interest in the matter.
The questions raised will be about ends, values, and mechanisms (and their efficacy): whether we support ever closer union; or the loss of our country’s independence; or a cross-border power of arrest by foreign police; or the loss of veto powers by our government; or free movement across borders; or whatever? What is so difficult? What makes these questions so much less tractable for the public than for politicians? Is it that the politicians are whipped?
People vote as they do knowing the treaty stands or falls in its entirety. Just as yes voters may swallow hard and sacrifice things they hold dear, so no voters find themselves unable to compromise, possibly losing some elements they favour. But in this there is no difference between them and their elected (and sometimes unelected) politicians. The main difference I can see is that ratification opens up new career games for the politicians.
What strikes me in writing this piece is that I find myself having to explain and justify the benefits of popular consent and democratic accountability. There is something profoundly disturbing in the fact I have to do this, and that intelligent people seriously doubt the need for popular consent: something harking back to the communist and fascist regimes of the twentieth century. I can only hope it does not portend another Dark Age.
Should it take effect, the treaty enables the transfer of yet more powers from Parliament to the EU. In practice the powers would be transferred to the 27 heads of government of the EU’s constituent states who, acting collectively as the European Council, would be able to draw down and exercise those powers without further reference to the member state Parliaments (i.e. with one bound they are free of their peoples, and the checks and balances of their national constitutions). Especially where majority voting applies - and the Lisbon Treaty considerably extends majority voting - there is thereafter no possibility that individual Parliaments can have any meaningful influence over what transpires.
The whole process by which the Lisbon Treaty has come into existence and is being ratified, deliberately avoiding obtaining popular consent - and now following the Irish No vote nevertheless trying to force the treaty through, is itself evidence of the extent to which the EU’s various Presidents and Prime Ministers have assumed a loyalty to EU institutions above and beyond anything shown to their native countries.
When you consider that Brown (and his predecessor Blair) has proceeded without regard to public opinion, indeed by studiously avoiding ever engaging with the British public on the matter, and that at the last election the Labour party were afraid to seek a mandate to carry through a new EU treaty, and instead preferred to defer the issue by promising a referendum on the outcome, Brown is clearly behaving undemocratically.
Brown has contrived to act despite the wants, interests, desires, and aspirations of the British people. He has made no effort to persuade the British people of the rightness of what he is doing, and he has wholly failed to solicit their agreement.
When you further consider that the changes the treaty brings about are not just to do with the country’s internal constitutional arrangements (which would leave open the possibility of their future reversal by Parliament), but are changes that make Britain subservient to a superior judicial, legislative, political, and constitutional regime located elsewhere (thereby making any unilateral reversal impossible), it is quite unforgivable. I guess Brown has too much hubris and sense of personal historical destiny to feel any shame, but he should. He may have the political power, but what makes him think he has any moral entitlement to do such a thing? The guy is a thug.
It is true Brown has run his ratification through Parliament, but no election was ever fought on the issues raised by the treaty, and the promise of a referendum buried the then impending treaty as an issue when the election was fought. Now Brown has avoided a referendum by claiming that the document he has ratified was not the document the government had in mind when it promised a referendum.
In the light of the Irish referendum no vote, there are many treaty proponents claiming that referenda are not the way to decide such important matters. The treaty is obviously far too complicated to be pronounced upon by ordinary, and for the most part ignorant, people in a referendum. In any case, the range of issues rolled up into the treaty is far too wide for a crude yes or no answer. Or so they say.
Too complicated? The treaty’s proponents are being disingenuous. There are very few MPs who have read the treaty, let alone properly understood it - to do so means considerable study and analytical work. This is because the treaty was deliberately cast in the form of a lot of amendments to the pre-existing treaties, both to hide the fact that its content is pretty much the content of the failed Constitutional treaty; and to add credence to the argument that ordinary people would not understand the treaty and so should not be given the power of decision over it.
So if the political establishment - including the Irish Prime Minister, it seems - have not read the treaty, and take their understanding of it second-hand, there can be little force in the argument that the treaty is too complicated for the public to decide upon.
Referendums are too crude? Well Parliament itself cannot amend the treaty, but only say yes or no to it, so the idea that the treaty comprises too many pieces to be susceptible to a simple yes or no by the people is also revealed to be empty: yes or no is all anyone, however grand, can say to the treaty.
Why should we assume ordinary people are not fit to be consulted on the treaty? It is after all the general public in whose name and for whose benefit the treaty is being incorporated into law, and who will have to live with the consequences, good or bad, so they certainly have an interest in the matter.
The questions raised will be about ends, values, and mechanisms (and their efficacy): whether we support ever closer union; or the loss of our country’s independence; or a cross-border power of arrest by foreign police; or the loss of veto powers by our government; or free movement across borders; or whatever? What is so difficult? What makes these questions so much less tractable for the public than for politicians? Is it that the politicians are whipped?
People vote as they do knowing the treaty stands or falls in its entirety. Just as yes voters may swallow hard and sacrifice things they hold dear, so no voters find themselves unable to compromise, possibly losing some elements they favour. But in this there is no difference between them and their elected (and sometimes unelected) politicians. The main difference I can see is that ratification opens up new career games for the politicians.
What strikes me in writing this piece is that I find myself having to explain and justify the benefits of popular consent and democratic accountability. There is something profoundly disturbing in the fact I have to do this, and that intelligent people seriously doubt the need for popular consent: something harking back to the communist and fascist regimes of the twentieth century. I can only hope it does not portend another Dark Age.
May 02, 2008
Council Elections - Labour All Out!
Labour have suffered large losses of seats in the local elections in England and Wales.
What? A sudden enthusiasm for Conservative policies?
I don't see it. Labour plumb the depths, and for the Conservatives it's a case of Buggins' Turn.
What? A sudden enthusiasm for Conservative policies?
I don't see it. Labour plumb the depths, and for the Conservatives it's a case of Buggins' Turn.
February 15, 2008
Police & CPS Should Be Prosecuted Over Lotfi Raissi Extradition
The Court of Appeal has found that Lotfi Raissi was falsely imprisoned, and his life destroyed, on the basis of false evidence presented by the CPS and Metropolitan police.
The police and lawyers should be investigated to decide whether they should be prosecuted, for example for false imprisonment, malicious prosecution, and perjury. At the very least some of their number, including those at the top of those organisations, should be sacked.
Only then will the police and CPS be minded to uphold right and the rule of law and stop being bullying cynical jobsworths.
The judges said: “We consider that the way in which extradition proceedings were conducted in this country, with opposition to bail based on allegations which appear unfounded in evidence, amounted to an abuse of process.At the very least those responsible were incompetent or careless, but quite possibly the 'evidence' was fabricated.
The police and lawyers should be investigated to decide whether they should be prosecuted, for example for false imprisonment, malicious prosecution, and perjury. At the very least some of their number, including those at the top of those organisations, should be sacked.
Only then will the police and CPS be minded to uphold right and the rule of law and stop being bullying cynical jobsworths.
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