Economics

BBC Newsnight uses The Cobden Centre to flag up need to slash UK state

I am delighted that TCC Senior Fellow, Dr. Jamie Whyte, was on Friday’s edition of the BBC flagship programme, Newsnight:

Tonight: turning crisis into opportunity.  Faced with the worst economic conditions in decades, is it time to ‘think big’ and downsize the state. If you were starting from scratch, what would the government actually control? We ask our radical thinkers how big it should be.

As the media start to grasp the debt trap we and other western nations are in, it is only right that high quality programmes such as Newsnight use our ideas and people for comment. Fundamentally questioning the idea of government involvement in healthcare, welfare and education, this edition of Newsnight is a sign of things to come.

As the government fails to cut the deficit and therefore the debt explodes, it won’t be too long before we’re all exploring ideas on the private production and enforcement of law.

 

Economics

The Bristol pound

This article, published in the The Telegraph, is interesting not for what it says about local currencies but instead the wider, unstated, political atmospherics of our time.

Putting to the side the claim that Bristol is a hot bed of left-wing radicalism, as opposed to an historic hub of global trade, it strikes me that when people are against big business, big banks, the Bank of England, or for that matter a nationalised pound, they in fact smell the unjust corporatism of crony capitalism. Unable to articulate this with a coherent body of knowledge and an understanding of ‘state failure’, they instead turn to the ever decreasing circles of protectionist localism.

While such conclusions are wrong, they are at least borne of people starting to try and articulate the right question. The key thing for them to learn is that they should try substituting the word ‘big’ with the word ‘state’!

Economics

Eyes wide shut

Our friend and Advisory Board member Ben Davies of Hinde Capital has produced a two-part report entitled Eyes Wide Shut covering the state of the UK’s financial health.

Nations sustain prosperity by encouraging an openness of society, willingness to permit creative destruction and democratic rule of law. It is the relationship between man-made economic and political institutions that fosters these aspects of the nation. Those that promote real growth through productivity enhancement and encourage progressive innovation will thrive; those that move towards repressive institutions of the State will stagnate and fail.

Unfortunately this is where the UK is heading today. Mounting debt that has merely boosted government consumption and transfer payments have undermined the overall productivity growth and led to economic stagnation and loss of economic freedom.  Unfortunately, we believe that a nation will tend to bankrupt its citizens before it bankrupts itself; especially under a fiat currency system when it has the temptation to fund a welfare state through continued deficit financing.

Both reports are well worth reading:

  • Part I. The UK Hitting the Wall (PDF)
  • Part II. UK Economic Repression and an End Solution (PDF)

You may also enjoy Ben’s introductory blog posts (Part I, Part II), and his appearance on CNBC:

Finally, you can find Ben’s thoughts on the PIIGS and the potential remonetisation of gold here.

Economics

The threat posed by free money

Another good article by Allister Heath for City A.M.:

If you want proof that the global economy’s woes are increasing, as a result of extreme imbalances, look no further than some countries’ borrowing costs. Germany has set a zero per cent coupon on its 2-year government bonds (or Schatz) due to be sold today – in other words, borrowers will not be paid for the privilege of lending money to the German state.

Strange times indeed. I recommend the whole article.

Economics

15 years of the MPC

A brilliant video from our friends at SaveOurSavers, celebrating 15 years of the Monetary Policy Committee:

Economics

The Argentine threat to the world financial system

An interesting upcoming event …

The All Party Parliamentary Group on Economics, Money and Banking
is pleased to invite you to a meeting hosted jointly with the

European Financial Forum

Speaker:

Graham Mather

President of the European Policy Forum and author of Why Argentina’s debt matters to Europe, a paper published by the EFF in March 2012.

Graham has been General Director of the IEA, Head of Policy at the IoD and an MEP.

4pm on Monday 14th May in Committee Room 19, House of Commons

The Argentine Debt Crisis is little understood in Britain. Argentina committed the greatest default in history in 2001 ($81bn). It has failed to come to an arrangement with outstanding creditors despite reserves large enough to repay its debts in full. Its defiance of treaty obligations and international court judgements poses a threat of contagion and further destabilisation of the international financial system. Its behaviour has provoked mandatory sanctions from the USA, which now also votes against World Bank loans to the country.

Britain is the second largest contributor to the current World Bank IDA lending programme, which has lent £4.78 billion to Argentina. The EU has allocated 65 million euros in aid for Argentina between 2007 and 2030. Britain is the sixth largest investor in Argentina, investing over $2bn in the last three years.

Graham Mather will address whether providing further loans to non-essential Argentine Government projects at a time when it is refusing to pay its international debts and honor international obligations risks sending conflicting signals to President Kirchner.

Economics

Why do savers distrust the banks?

Simon Rose and his colleagues at Save Our Savers are good friends of The Cobden Centre. Anyone doubting the rising concern of millions of British savers who are now suffering at the hands of absurdly low interest rates and QE should watch this excellent performance from BBC Breakfast News:

With millions of Britons no longer trusting the banking system or fiat paper money this interview is an important sign of things to come.

Economics

Pennies drop as the conversation shifts

At the end of January, TCC Senior Fellow Detlev Schlichter spoke at an Adam
Smith Institute seminar called ‘Monetary Reform and the Eurozone Crisis’.

On the podium with Brendan Brown and Andrew Lilico, Detlev not only delivered a cogent causal analysis of this crisis but his insights and this event powerfully illustrate the ways in which free marketeers can shift the wider economic conversation. You can watch all kinds of pennies drop here.

Economics

Beyond the Mondragon experiment

When Labour peer Maurice Glasman recently went on BBC Radio 4 with TCC’s Detlev Schlichter I was disappointed and a little taken aback to learn of his Lordship’s ignorance when it came to the Austrian School of Economics. While towards the end of the interview he accepted the need for honest – backed – money, he went on to demonstrate his ignorance when he implied that free marketeers have a prescriptive attitude to ownership philosophies and organisational models. I was really saddened by this not least because like so many other Austro-libertarians I have spent years pointing out that genuine markets would encourage more open and diverse forms of ownership including mutuals.

When I was fifteen I avidly watched this excellent BBC documentary on the Mondragon Experiment which sparked a life long interest in mutuals, friendly societies and co-operatives. Later, as a university student I went on to study a wide range of radical dissenters including a wide range of anti-statists. Indeed, it is with this history in mind that I find it ironic that away from the naïveté of Lord Glasman, it is Conservative Prime Minister David Cameron who is planning to introduce a Parliamentary bill promoting co-operative forms of ownership and doing so in key areas such as education and healthcare.

Thirty-two years on from the BBC’s film on the Mondragon Experiment, maybe opinion formers are finally rediscovering the libertarian tradition of collective forms of organisation and self-help without the state. As much a part of a market as any other form of non-coerced organisation or ownership philosophy, I do hope Lord Glasman and his Purple Book friends take note.

Economics

Are you ready for EuroCrash the musical?

I am not joking. It has finally happened. And I want to see it. As reported by Bloomberg, ‘Euro Crash! The Musical’ is coming to town. According to this report this spectacular and timely production “transposes the single-currency story to a deep dark forest. Mark and Gilda can’t find their way out. They are lured into the gingerbread Euroland house, where Papa Kohl and Madame Mitterrand run a school of fiscal discipline attended by some wayward pupils – personified nation states like Callum of Ireland and Stavros of Greece”. The show’s numbers include “a chorus praising the virtues of the Bundesbank and former U.K. Chancellor of the Exchequer Norman Lamont singing “Our currency’s gone down the plughole” in the shower”.

“EuroCrash!” is showing in at the Cockpit Theatre in London from 8 to 11 February 2012 and I am definitely going to see it. For more information and to book your ticket(s) just click here.