If you ever trawled through my old blog posts (not recommended), then you would not BBC bias being something that frequently comes up. But I was pleasantly surprised last night watching the second episode of Masters of Money by Stephanie Flanders. This episode, based on Hayek, did miss out quite a few details which I think I would have got in, was fair to him. It gives credit to him having predicted the Great Depression and it suggests that his followers predicted the current one (although not making it too obvious).
Hayek's concept of the Fatal Conceit was explained fairly, as was the complication of the market, although the price mechanism explanation was rushed through, meaning that the viewer wouldn't understand the point unless they were already aware of it. The program was also fair when it came to government interventions in the market, and their distorting effects, with money being singled out both by Hayek and by Flanders as the most important. It was great to see. Seeing Ron Paul being listened to without derision or spin on the BBC was marvellous. OUtlining the differences between Hayek and Friedman was also great to see, as the left usually lumps all right-wingers together.I hope to see more like this in the future.
There were of course some typical howlers, like declaring Bush to be a free marketeer (the state growing in size and increasing tariffs are somewhat different to free market positions). Hayek was also described as the most extreme free marketeer, something clearly not true. Rothbard, anyone? The lack of any mention of Mises and the fact that Hayek was a socialist until he read Mises' work as possibly the most disappointing part of the program. The program also resorted to talking to both Mervyn King and Paul Krugman, possibly two of the least useful people to talk to with regards to Hayek and Austrian economics - Krugman probably being the worst economist for mis-characterising the school. Krugman talked about the nineteenth century US as if it was in a state of free banking in an attempt to refute Hayek. Of course Krugman is completely wrong here, with both the First and Second Banks of the US (government chartered quasi-central banks) playing their part early on, government green-backs during the civil war era, the ban on branch banking, and many, many other examples utterly destroying his point. Whilst examples of successful, stable free banking periods abound (Canada during this same period into the twentieth century being a prime example).
Ignoring Krugman, we did get an admission from Merv that economic models are often quite badly wrong. He, and the makers of the program didn't quite connect up the dots on this one for current circumstances, neither were the dots connected for modern QE and Austro-Hungarian money printing (in both cases to buy government bonds).
Overall, there was plenty wrong with the program, but by BBC standards it was pretty fair, and it was a surprise that it was even broadcast in between the Keynes and Marx sessions of the series. I hope to see more like it in the future, perhaps with more in-depth explanation of problems. However, for now, I'll brace myself for Marx next week.
Tuesday, 25 September 2012
Tuesday, 4 September 2012
The Reshuffle is Pointless
As Dan Hannan points out (seemingly doing his usual, one awful post, one great post routine), the reshuffle will really offer no difference either to the coalition or the government as a whole, the mandarins in Whitehall and Brussels still call the shots. Why is there so much coverage? Well, it's easier for the media to talk about differences in the cabinet, and it is easy to follow, unlike the opaque bureaucracies already mentioned.
Even if the changes could make a difference, the pathetic nature of the changes made by Cameron show why nothing will really change under him, whether in coalition, minority or majority government. Osborne is still in a job - having failed to do anything useful except nudge pension reform slightly in the right direction (but nowhere near enough to combat the eventual collapse). He is too weak, and not enough of an ideas man to take anything like flat-tax proposals or closing departments forward. The backbenches have excellent people like Steve Baker and Douglas Carswell who could perform the role, but there are many less controversial ones who could actually sort a few things out. Jeremy Browne could have been an outside bet, and would have thrown the LibDems a hefty bone.
Of course, the LibDems would need some good news to compensate for throwing Cable out, or giving him a non-position like Clarke or Warsi (who are both only kept in to appease certain groups, everyone knows they are both liabilities). However, Cable stays at BIS, red tape will not be cut, the EU will not be challenged and we will continue to lose our global economic standing.
Next up on the list of useless choices is Hunt. He was in a fairly pointless position before (why do we need a 'Culture Secretary'?), and given that we didn't just scrap the department, why didn't he just stay where he couldn't screw up anything serious? Now we have a health secretary who believes in homoeopathy. Given that the Conservatives are generally not trusted by the health lobbies and unions, why did Cameron give them such an easy target? How will that help push through vital reforms (let alone the cuts that really should, but will not occur).
There is one ray of light amongst all this, Owen Paterson. He is apparently supportive of shale gas and sceptical of AGW. Excellent, but can he really do anything to stop the mandarins, Brussels and the rest of his cabinet pushing through more subsidies, wind farms and other tripe? I reckon he is just a sop to "the right" to quieten them down. It might work for a week or two, but once it becomes obvious that there will be no change, the backbenches will be as "rebellious" as ever.
There was never any real change during the reshuffles of the Labour years, there was very little difference when the coalition came in and there will be very little difference from this reshuffle. The same steady decline, weak leadership and the various economic cans being kicked down the road.
Even if the changes could make a difference, the pathetic nature of the changes made by Cameron show why nothing will really change under him, whether in coalition, minority or majority government. Osborne is still in a job - having failed to do anything useful except nudge pension reform slightly in the right direction (but nowhere near enough to combat the eventual collapse). He is too weak, and not enough of an ideas man to take anything like flat-tax proposals or closing departments forward. The backbenches have excellent people like Steve Baker and Douglas Carswell who could perform the role, but there are many less controversial ones who could actually sort a few things out. Jeremy Browne could have been an outside bet, and would have thrown the LibDems a hefty bone.
Of course, the LibDems would need some good news to compensate for throwing Cable out, or giving him a non-position like Clarke or Warsi (who are both only kept in to appease certain groups, everyone knows they are both liabilities). However, Cable stays at BIS, red tape will not be cut, the EU will not be challenged and we will continue to lose our global economic standing.
Next up on the list of useless choices is Hunt. He was in a fairly pointless position before (why do we need a 'Culture Secretary'?), and given that we didn't just scrap the department, why didn't he just stay where he couldn't screw up anything serious? Now we have a health secretary who believes in homoeopathy. Given that the Conservatives are generally not trusted by the health lobbies and unions, why did Cameron give them such an easy target? How will that help push through vital reforms (let alone the cuts that really should, but will not occur).
There is one ray of light amongst all this, Owen Paterson. He is apparently supportive of shale gas and sceptical of AGW. Excellent, but can he really do anything to stop the mandarins, Brussels and the rest of his cabinet pushing through more subsidies, wind farms and other tripe? I reckon he is just a sop to "the right" to quieten them down. It might work for a week or two, but once it becomes obvious that there will be no change, the backbenches will be as "rebellious" as ever.
There was never any real change during the reshuffles of the Labour years, there was very little difference when the coalition came in and there will be very little difference from this reshuffle. The same steady decline, weak leadership and the various economic cans being kicked down the road.
Wednesday, 15 August 2012
Virgin, First and Rail Contracts
So, in the news today is that First have won a bid for running the West Coast mainline service, beating the incumbent Virgin bid, offering a great deal more for the service. The government has chosen, apparently, wholly on the big number, says Branson and he may be right. The difference between the two bids is largely on that number, as without altering the track, I see little ability to improve the service other than with lower fares.
Now, Virgin may be able to deliver and I hope they do, the better the train lines are, the better my transport around the country is likely to be (as an aside I have used the Virgin service on a number of occasions between Birmingham and London, and it is not too bad). However, I doubt that First can offer a great deal better service without new lines. This is the problem, the lines, the actual track is owned by the government and the contracts are awarded by the government (as has happened with this case). The reason the free market works so well for consumers is because those same consumers make a choice between different providers. When the government selects bids, they do not what is best for the end user, but for the government (in the short term) - so the size of the bid, hence why some companies collapse trying to offer the sort of bids they need to make to please the government. Alternate systems of rail travel are impossible, nobody can build a 7 foot gauge track like Brunel did, which can offer faster service with wider trains, the government will not allow it.
When our rail network was built initially, it was private, it was constantly expanding (apart from the war years where it was brought into government service), the London Underground was too, being the track of several companies competing to offer services for London. Whilst some companies over-expanded and collapsed, others kept going - there was a strong market and the customers were the winners. Now we have a system that is part-privatised. There is some competition, but for most people there is a monopoly of the places they go between, there is crucially only one set of tracks for each route. If you want to go by train, you have to use whatever battered old thing draws into the station. There have undoubtedly been huge improvements since the railways were "privatised"; the small improvements and efficiencies brought in through the prospect of bankruptcy to the private providers helped to stop the terminal decline in our rail network. When the "privatisation" occured, the decline in passenger numbers finally stopped and indeed reversed. But we still have a nationalised rail system, and as such government contracting.
The part privatisation of the railways under Thatcher was just that, a part-job, incomplete and in my personal opinion, a bit pathetic. The track itself needs to be sold off, and permission given for private companies to build new lines, whether they are "High-Speed" or otherwise. This means that investment in infrastructure can finally occur, and the improvements to the transport system, a hallmark of 19th century Britain, can happen again. Instead of mis-diagnosing the problems as those of "privatisation" with ridiculous rose-tinted glasses looking back upon the nightmarish nationalised system, we should get government out of the way finally. The failures of Thatcher's privatisations can be brought down to not being bold enough. Whilst I seriously doubt my internet connection would be as fast without Thatcher, I think it should be a lot faster - this is easily achievable. We need to finally privatise what remains of our utilities, ignore the "natural monopoly" claptrap and allow competition to rid the monopolies of their status.
Now, Virgin may be able to deliver and I hope they do, the better the train lines are, the better my transport around the country is likely to be (as an aside I have used the Virgin service on a number of occasions between Birmingham and London, and it is not too bad). However, I doubt that First can offer a great deal better service without new lines. This is the problem, the lines, the actual track is owned by the government and the contracts are awarded by the government (as has happened with this case). The reason the free market works so well for consumers is because those same consumers make a choice between different providers. When the government selects bids, they do not what is best for the end user, but for the government (in the short term) - so the size of the bid, hence why some companies collapse trying to offer the sort of bids they need to make to please the government. Alternate systems of rail travel are impossible, nobody can build a 7 foot gauge track like Brunel did, which can offer faster service with wider trains, the government will not allow it.
When our rail network was built initially, it was private, it was constantly expanding (apart from the war years where it was brought into government service), the London Underground was too, being the track of several companies competing to offer services for London. Whilst some companies over-expanded and collapsed, others kept going - there was a strong market and the customers were the winners. Now we have a system that is part-privatised. There is some competition, but for most people there is a monopoly of the places they go between, there is crucially only one set of tracks for each route. If you want to go by train, you have to use whatever battered old thing draws into the station. There have undoubtedly been huge improvements since the railways were "privatised"; the small improvements and efficiencies brought in through the prospect of bankruptcy to the private providers helped to stop the terminal decline in our rail network. When the "privatisation" occured, the decline in passenger numbers finally stopped and indeed reversed. But we still have a nationalised rail system, and as such government contracting.
The part privatisation of the railways under Thatcher was just that, a part-job, incomplete and in my personal opinion, a bit pathetic. The track itself needs to be sold off, and permission given for private companies to build new lines, whether they are "High-Speed" or otherwise. This means that investment in infrastructure can finally occur, and the improvements to the transport system, a hallmark of 19th century Britain, can happen again. Instead of mis-diagnosing the problems as those of "privatisation" with ridiculous rose-tinted glasses looking back upon the nightmarish nationalised system, we should get government out of the way finally. The failures of Thatcher's privatisations can be brought down to not being bold enough. Whilst I seriously doubt my internet connection would be as fast without Thatcher, I think it should be a lot faster - this is easily achievable. We need to finally privatise what remains of our utilities, ignore the "natural monopoly" claptrap and allow competition to rid the monopolies of their status.
Saturday, 28 July 2012
Quicksilver Trilogy - Libertarian Fiction
This isn't exactly a book review blog, but the Quicksilver Trilogy (Rising, Zenith & Twilight) by Stan Nicholls (renamed the Dreamtime trilogy in the US) which I have just finished is, I think, a very libertarian set of books. They are a pretty easy read, so teens should be able to enjoy them, as would most adults. As a fantasy series, they are fairly decent without the libertarian side, so I would recommend them to fantasy readers on that basis anyway. The libertarian ethic though, I don't think can be ignored.
In the Quicksilver world, magic is hugely important, a controlled product by the dominant empires which is used as a tool of subjegation. The rival empires of Gath Tampoor (a typical seeming autocratic empire, no unifying ideology) and Rintarrah (a fascist/socialist state where everything is ordered and has its place in a supposedly egalitarian environment, but there is an enshrined upper class anyway) are both somewhat oligarchic, with a number of ruling figures at the top of departments, secret services and the like. The story watches as the main characters, through one method or another, are adopted into the resistance movements in the two empires and Bhealfa (a protectorate of Gath Tampoor) and their attempts to escape to a relatively uninhabited island and secure their liberty.
Without giving too much away, I'll try to show how this series goes through the abuses of the state, and thereby will help to give readers good libertarian insights. I'll start with a scene in the first book, where there's a confrontation between a prostitute who's friend has been killed, and a member of the upper echelons of society responsible; in the supposedly equal Rintarrah: "'Listen, slut' he snarled, 'I've got contacts. I can make things really difficult for you. I'm talking about big trouble.'" as well as the inbuilt racim of the state "'And you think the authorities would take the word of a Qalochian whore over that of a man of stature'". Bear in mind that the profession of prostitution, like everything else deemed bad by the authorities is denied to be in existence is the 'ordered' nation of Rintarrah. Throughout the books, the issues of race and legal injustice are brought up. Those at the top enjoying protection against the people, whilst the people are abused by those above.
There is a clear argument that tax is theft in the second book, where a former pirate defends his practice: "I spent three years in the business. And I use the word advisedly; it was a business as far as I was concerned'. 'That's a novel way of describing it.' 'But it's true. Piracy's a very elementary form of barter. You exchange possessions from people in exchange for letting them keep their lives. It's not dissimilar to taxes. Nobody wants to pay them but governments make you. [...] where people have to follow their laws at the ultimate expense of their lives.'"
So, the state is racist and unfair, and tax is theft, now onto book three and the abuse of language (which also appears earlier): "'[T]hey employ language as a weapon against us. Taking another's land is liberation. Suppressing the people's right to speak is freedom. Executing a patriot is an act of public order. And anybody opposing them is a terrorist.'" Even gun rights comes up in (although not directly, guns not yet existing in this universe) with magic as the equivalent; "'[T]hat's the fault of the system we live in, not the craft.' He held up the rapier he was still clutching. 'It's like this sword. It can be in the hands of a tyrant or a freedom fighter. The sword has no say in it.'"
Libertarian foreign policy is also brought to the fore through criticism of an interventionist foreign policy: "Where rival empires competed for dominance, foreign policy was often a euphemism for armed conflict. At any given time, territory was contested, rebellions were being quelled and unruly populations subdued. [...] And while the warring parties had made destruction a fine art, little attention was paid to helping its many innocent sufferers."
Show trials appear several times, including one of an ambassador: "'It amounts to treason.' 'But I'm not even a Bhealfan subject!' 'Ah, and neither is he. So you're making a further admission that like my enemy you're not a Bhealfan subject. This is all starting to sound rather damning, isn't it?' [...] 'Would you be kind enough to outline the nature of the charge?'.
This set of books evidently hasn't set the literary world on fire, and not the most brilliant pieces of fiction ever written, but they are entertaining, and I think they should be touted as the libertarian books they are, they might help open the eyes of somebody, and for that I recommend them to anyone interested in fantasy. Not as good as The Moon is a Harsh Mistress and doesn't show how a libertarian world would work, but it shows the excesses of the state, which is just as important.
In the Quicksilver world, magic is hugely important, a controlled product by the dominant empires which is used as a tool of subjegation. The rival empires of Gath Tampoor (a typical seeming autocratic empire, no unifying ideology) and Rintarrah (a fascist/socialist state where everything is ordered and has its place in a supposedly egalitarian environment, but there is an enshrined upper class anyway) are both somewhat oligarchic, with a number of ruling figures at the top of departments, secret services and the like. The story watches as the main characters, through one method or another, are adopted into the resistance movements in the two empires and Bhealfa (a protectorate of Gath Tampoor) and their attempts to escape to a relatively uninhabited island and secure their liberty.
Without giving too much away, I'll try to show how this series goes through the abuses of the state, and thereby will help to give readers good libertarian insights. I'll start with a scene in the first book, where there's a confrontation between a prostitute who's friend has been killed, and a member of the upper echelons of society responsible; in the supposedly equal Rintarrah: "'Listen, slut' he snarled, 'I've got contacts. I can make things really difficult for you. I'm talking about big trouble.'" as well as the inbuilt racim of the state "'And you think the authorities would take the word of a Qalochian whore over that of a man of stature'". Bear in mind that the profession of prostitution, like everything else deemed bad by the authorities is denied to be in existence is the 'ordered' nation of Rintarrah. Throughout the books, the issues of race and legal injustice are brought up. Those at the top enjoying protection against the people, whilst the people are abused by those above.
There is a clear argument that tax is theft in the second book, where a former pirate defends his practice: "I spent three years in the business. And I use the word advisedly; it was a business as far as I was concerned'. 'That's a novel way of describing it.' 'But it's true. Piracy's a very elementary form of barter. You exchange possessions from people in exchange for letting them keep their lives. It's not dissimilar to taxes. Nobody wants to pay them but governments make you. [...] where people have to follow their laws at the ultimate expense of their lives.'"
So, the state is racist and unfair, and tax is theft, now onto book three and the abuse of language (which also appears earlier): "'[T]hey employ language as a weapon against us. Taking another's land is liberation. Suppressing the people's right to speak is freedom. Executing a patriot is an act of public order. And anybody opposing them is a terrorist.'" Even gun rights comes up in (although not directly, guns not yet existing in this universe) with magic as the equivalent; "'[T]hat's the fault of the system we live in, not the craft.' He held up the rapier he was still clutching. 'It's like this sword. It can be in the hands of a tyrant or a freedom fighter. The sword has no say in it.'"
Libertarian foreign policy is also brought to the fore through criticism of an interventionist foreign policy: "Where rival empires competed for dominance, foreign policy was often a euphemism for armed conflict. At any given time, territory was contested, rebellions were being quelled and unruly populations subdued. [...] And while the warring parties had made destruction a fine art, little attention was paid to helping its many innocent sufferers."
Show trials appear several times, including one of an ambassador: "'It amounts to treason.' 'But I'm not even a Bhealfan subject!' 'Ah, and neither is he. So you're making a further admission that like my enemy you're not a Bhealfan subject. This is all starting to sound rather damning, isn't it?' [...] 'Would you be kind enough to outline the nature of the charge?'.
This set of books evidently hasn't set the literary world on fire, and not the most brilliant pieces of fiction ever written, but they are entertaining, and I think they should be touted as the libertarian books they are, they might help open the eyes of somebody, and for that I recommend them to anyone interested in fantasy. Not as good as The Moon is a Harsh Mistress and doesn't show how a libertarian world would work, but it shows the excesses of the state, which is just as important.
Friday, 20 July 2012
Oh Kimi
So, apparently North Korea is to 'reform' its economy under the leadership of Kim Kong-un. This has followed in the great traditions of China and the USSR in 'purging' generals in order to wrest control from them. Apparently the main general was pushed out for reasons of illness, but nobody seriously believes that. Evidently, opening up the insular nation and freeing the press were not high on the reformist list of 'things to do'.
However, I have very little hope in these economic reforms, at least in the long run.
The cabinet had created a special bureau to take control of the economy, with the control being taken away from the military. What, on the microeconomic level has really changed? Nothing. This is the typical approach of the statist. Some economists of the left might write about how reforms of this nature will help revive the economy, as if it was simply a problem of mismanagement. Another approach, you might call it an Austrian approach, is to view the economy through the various actions individuals, and through them, businesses make to trade. Do they buy goods from X or Y? do they sell at price A or B? It is from this, microeconomic level, that the economy as a whole grows. The failure to merge this properly into macroeconomics is one of the greatest problems I see with modern economics. Modern macroeconomics sees the economy on the macro level acting independently from the micro, the sectors apparently not acting based on what people at the micro end buy and sell. This is why macroeconomists seem to spout such nonsense so often, and why their predictions tend to be way off target.
The problem is, both in Western governments, and more keenly felt in nations like North Korea, the government sees the economy in these narrow macroeconomic terms. Thinking that if you just build a steel industry, you will sell steel products to the world (or at least your own nation), and it will be wondrously efficient. This thinking is what gave the world the Lada and Moskvitch cars and the appalling failures of the Virgin and Idle lands Scheme (which turned large areas of Kazakhstan into desert and resulted in large quantities of grain being imported from Canada during the 1970s and 80s).
For all the zeal that the North Koreans might put into 'reforming' the economy, I doubt they will achieve that much. It is effectively impossible for any North Korean to accumulate capital, so the market economy cannot function. The only way to repair the economy is to free it from government control, to allow individuals to make up their mind as to what they are willing to buy and sell. Ignore the macroeconomists and set the microeconomy flourish, allow people to start a business and create wealth without facing insurmountable barriers. In essence, to fix the North Korean economy, North Korea must abandon the Communist mantra that makes it so famous today. It might not take up many news headlines, but at least the people would be able to eat.
The same solution applies at home, cut bureaucracy, cut government spending and allow the real, micro-level economy to thrive.
The cabinet had created a special bureau to take control of the economy, with the control being taken away from the military. What, on the microeconomic level has really changed? Nothing. This is the typical approach of the statist. Some economists of the left might write about how reforms of this nature will help revive the economy, as if it was simply a problem of mismanagement. Another approach, you might call it an Austrian approach, is to view the economy through the various actions individuals, and through them, businesses make to trade. Do they buy goods from X or Y? do they sell at price A or B? It is from this, microeconomic level, that the economy as a whole grows. The failure to merge this properly into macroeconomics is one of the greatest problems I see with modern economics. Modern macroeconomics sees the economy on the macro level acting independently from the micro, the sectors apparently not acting based on what people at the micro end buy and sell. This is why macroeconomists seem to spout such nonsense so often, and why their predictions tend to be way off target.
The problem is, both in Western governments, and more keenly felt in nations like North Korea, the government sees the economy in these narrow macroeconomic terms. Thinking that if you just build a steel industry, you will sell steel products to the world (or at least your own nation), and it will be wondrously efficient. This thinking is what gave the world the Lada and Moskvitch cars and the appalling failures of the Virgin and Idle lands Scheme (which turned large areas of Kazakhstan into desert and resulted in large quantities of grain being imported from Canada during the 1970s and 80s).
For all the zeal that the North Koreans might put into 'reforming' the economy, I doubt they will achieve that much. It is effectively impossible for any North Korean to accumulate capital, so the market economy cannot function. The only way to repair the economy is to free it from government control, to allow individuals to make up their mind as to what they are willing to buy and sell. Ignore the macroeconomists and set the microeconomy flourish, allow people to start a business and create wealth without facing insurmountable barriers. In essence, to fix the North Korean economy, North Korea must abandon the Communist mantra that makes it so famous today. It might not take up many news headlines, but at least the people would be able to eat.
The same solution applies at home, cut bureaucracy, cut government spending and allow the real, micro-level economy to thrive.
Thursday, 12 July 2012
Bank of Dave
So, this guy called Dave wants to start his own bank, as shown on Channel 4. A self made man (a minibus dealer), a proper capitalist. Should be exactly the sort of guy to start a new bank. He has some money behind him, should be easy, right? Nope. Contrary to the opinions of many, the banks do not suffer from a lack of regulation; Thatcher's deregulation is mostly a red herring. Not only does the UK have tonnes of regulations of its own, with the FSA and to some extent the Bank of England acting as policemen, but we have the Basel Accords on a more international level. You need to have a government license, for which you need to take of bunch of (costly) exams. This means you either have to be pretty well off, or already working in finance. This means that it is hard for new banks to start, as Bank of Dave showed. Dave could go to prison for using the work "bank" without the proper licences.
Dave starts his
business by paying the local business taxes, before he even opens the
doors. The government giving a helping hand to new start-ups, in its
own special way. But he has to wait for the FSA to make up their mind
before he can hold deposits or make loans. The deposit part of which
is still undecided at the end of episode 1.
Capitalism rests on the
idea that businesses can enter and leave markets, in the banking
sector, this is clearly not the case. The normal risks of a business
are not permitted, the regulations are so complex that only companies
with a huge amount already invested in the sector stand a chance of
getting through them. Is economist lingo this is called a Barrier to
Entry.
Dave is doing exactly
what I'd want a good bank to do, instead of going to some credit
history, he goes and looks at the businesses he lends to. Whilst it
might take some time to do, it will reduce risk as you know what you
are investing in. Someone with no blips in their record might have a
terrible business idea, and someone who has been unlucky might have a
great idea, but not be able to get the credit he needs. It seems the
current banks, and their focus on computer models for risk instead of
people, means that they are less good at analysing where to lend (and
unable to see a huge crash coming, as explained in the great book
A Colossal Failure of Common Sense). If only new banks could start up
and compete with them, we might end up with a better banking sector.
Lending based on contact with local businesses to help them expand is
how banking took off in this country, with most loans in the 19th
century being to small businesses, often rolling over as they
expanded. This model is also the kind that, in my opinion, would most
suit developing nations. Letting small, one man businesses, often
unregistered with the authorities, get money to expand and deliver
the goods that people want and need.
Dave is a capitalist, a
proper one, and the thing standing in his way is the regulator. We
need to unleash Dave and others like him. Scrap the FSA and bring in
Free Banking I say. Let Dave call his bank a bank, let him take
deposits and make loans, and if he fails, then he fails, but on his
own merit. Before anyone suggests it, no, free banking is not
unstable. Indeed,
free banking is a tried and tested model, working historically in
Scotland, Canada, Australia, Sweden and a host of other nations.
Help out Dave, support
real capitalism, free the banks!
Wednesday, 11 July 2012
More Lords Reform
Many people, including me, are in favour of Lords Reform, but do not support the current proposals, or do so begrudgingly, hoping for later changes. Others are against reform, or for going backwards. So I'm going to try to explain why I'm in favour of reform more clearly, and then look at how to fix the constitutional problems with it.
The House of Lords is meant to act as a reviewing chamber, which more closely assesses the Bills put through the Commons. A replacement Senate, or whatever it might be called, should essentially do the same thing. The crucial thing for any reform is that it aids scrutiny, and does not diminish it. The current set up of the Lords is not only undemocratic (although the EU is a far larger problem on that count), but it is currently full of Labour peers that the Blair and Brown governments stuffed there, holding up reforms and generally getting in the way politically, instead of adding scrutiny to the Bills put through the Commons. Let us not forget that this is just a clearing up exercise for the "temporary" 1911 Parliament Act, which states in the preamble the desire to replace the HoL with an elected second chamber.
Most of the current Lords are not the "experts" that some would have you believe but former politicians, high level party donors, or simply folks like Lord Skidelsky, who is only an "expert" in the way that he is an academic, who frequently gets things horribly wrong. I would be very happy to have this lot chucked out. If the people were sufficiently expert, they need only convince the voters of it and they could get back in. If they don't win the votes, but they are still sufficiently expert, then they can still be called in to give evidence, as people do currently (because, as it turns out, the Lords isn't full of the experts that you need).
One of the issues from the pro-reform side (or at least the pro, current plans side) that irks me is the idea that a referendum is unnecessary because this issue was in the manifestos of all three main parties and was in the coalition agreement. However, none of those documents mentioned anything specific about these reforms, and the idea of there being a referendum is sound, as this is a clear constitutional issue over how the nation is governed.
What should the Other Place look like then? Well, being voted in by region might work, with say 3 or 6 senators/lords for each region/constituency, depending on what size the regions are. If you elect in thirds (with votes every two years), it means the people of the region get a fairly regular say in scrutiny, but the body as a whole is less likely to be based on the whims of national politics. Perhaps 6 year terms like the US senate would work, with the time between general elections cut to 3 or 4 years whilst we're at it. It is more likely to give you the sort of varied group that might do a good job of scrutinising bills. You definitely do not want a party list system as you are aiming for strong scrutiny, which means the less party politics the better, so of course PR voting doesn't make much sense (as it groups people into parties by nature). Perhaps there should be no pay for these Lords, so that they have to work separately as well, meaning that they are less likely to just become career politicians.
After bringing through something akin the the reforms I've outlined, the idea should then be put to a referendum as a matter of course, it is an issue over how the country is governed. The same reason we should have had referendums on the Maastricht and Lisbon treaties (they altered the relationship between the UK and the EU, losing some sovereignty); the way we were governed was greatly altered and it would be difficult if not impossible to revert by a new government, unlike normal Acts of Parliament.
So yes, I do want reform of the Lords, but it needs to be carefully thought out in respect to the purpose of the second chamber, i.e. scrutiny, and not just become a commons Mk.2, with the worst excesses taken further. At the end, whatever the composition looked like, it should be put to a referendum, because in principle, it is the right thing to do for this sort of thing. Besides, how do you keep a straight face whilst arguing that the Lords needs to be more democratic, whilst refusing the right of the people a say it how it is altered?
P.S. This was the last post on Lords Reform. Will find something more interesting to write about tomorrow.
The House of Lords is meant to act as a reviewing chamber, which more closely assesses the Bills put through the Commons. A replacement Senate, or whatever it might be called, should essentially do the same thing. The crucial thing for any reform is that it aids scrutiny, and does not diminish it. The current set up of the Lords is not only undemocratic (although the EU is a far larger problem on that count), but it is currently full of Labour peers that the Blair and Brown governments stuffed there, holding up reforms and generally getting in the way politically, instead of adding scrutiny to the Bills put through the Commons. Let us not forget that this is just a clearing up exercise for the "temporary" 1911 Parliament Act, which states in the preamble the desire to replace the HoL with an elected second chamber.
Most of the current Lords are not the "experts" that some would have you believe but former politicians, high level party donors, or simply folks like Lord Skidelsky, who is only an "expert" in the way that he is an academic, who frequently gets things horribly wrong. I would be very happy to have this lot chucked out. If the people were sufficiently expert, they need only convince the voters of it and they could get back in. If they don't win the votes, but they are still sufficiently expert, then they can still be called in to give evidence, as people do currently (because, as it turns out, the Lords isn't full of the experts that you need).
One of the issues from the pro-reform side (or at least the pro, current plans side) that irks me is the idea that a referendum is unnecessary because this issue was in the manifestos of all three main parties and was in the coalition agreement. However, none of those documents mentioned anything specific about these reforms, and the idea of there being a referendum is sound, as this is a clear constitutional issue over how the nation is governed.
What should the Other Place look like then? Well, being voted in by region might work, with say 3 or 6 senators/lords for each region/constituency, depending on what size the regions are. If you elect in thirds (with votes every two years), it means the people of the region get a fairly regular say in scrutiny, but the body as a whole is less likely to be based on the whims of national politics. Perhaps 6 year terms like the US senate would work, with the time between general elections cut to 3 or 4 years whilst we're at it. It is more likely to give you the sort of varied group that might do a good job of scrutinising bills. You definitely do not want a party list system as you are aiming for strong scrutiny, which means the less party politics the better, so of course PR voting doesn't make much sense (as it groups people into parties by nature). Perhaps there should be no pay for these Lords, so that they have to work separately as well, meaning that they are less likely to just become career politicians.
After bringing through something akin the the reforms I've outlined, the idea should then be put to a referendum as a matter of course, it is an issue over how the country is governed. The same reason we should have had referendums on the Maastricht and Lisbon treaties (they altered the relationship between the UK and the EU, losing some sovereignty); the way we were governed was greatly altered and it would be difficult if not impossible to revert by a new government, unlike normal Acts of Parliament.
So yes, I do want reform of the Lords, but it needs to be carefully thought out in respect to the purpose of the second chamber, i.e. scrutiny, and not just become a commons Mk.2, with the worst excesses taken further. At the end, whatever the composition looked like, it should be put to a referendum, because in principle, it is the right thing to do for this sort of thing. Besides, how do you keep a straight face whilst arguing that the Lords needs to be more democratic, whilst refusing the right of the people a say it how it is altered?
P.S. This was the last post on Lords Reform. Will find something more interesting to write about tomorrow.
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