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By Toby Baxendale, on 27 August 10
”The National Health Service is the closest thing the English have to a religion,” wrote the former Tory chancellor Nigel Lawson in his memoirs.
Daniel Hannan MEP was torn to pieces politically for daring to say that in his view the service provided was not optimal. In the book he co-authored book with Douglas Carswell, The Plan: Twelve Months to Renew Britain, they suggest alternative solutions.
In the late summer of 2009, in the run up to the General Election the following year, this sparked David Cameron into a defensive stance, and being the astute politician he is, he sensed the political mood music and declared his “wholehearted commitment” to the NHS. He suggested that the NHS represented a “simple, practical, common sense, human understanding of a fantastic and precious fact of British life”. He added “That’s why we are committed to the NHS and the principle of a healthcare system that is free at the point of use, based on need and not the ability to pay.”
It is generally understood that if you wish to be taken seriously in this country, you must never be critical of the NHS. Suggest a reform here and a fine tuning there, but don’t so much as imply that fully taxpayer-funded and state-provided health care might not the best solution for the people. Should you dare go down that line of thinking, you are sure to be dismissed as a wide-eyed loony!
It is assumed that the market for health care is naturally monopolistic as the medical profession can organise at the expense of the consumer, who is ignorant. Naturally, the State needs to step in and protect the ignorant consumer. This is akin to saying that food producers know more about food (essential for life!) and they will have a tendency to organise at the expense of the consumer, so the State should step in and we can have a National Food Service (God forbid: an 18 month wait for a can of Baked Beans!) and all those starving people that the private sector does not provide for will be fed! Also private provision will never cover the poor, already sick, and the needy; therefore the State must step in. Historically this has notbeen the case.
David Green in 1985 wrote a magnificent book Working Class Patients and the Medical Establishment: Self-help in Britain from the Mid-nineteenth Century to 1948. He shows that health care provision prior to the 1911 National Insurance Act was spontaneously provided by worker-organized mutual or friendly societies. Indeed, 75% of all provision was via these organizations with the balance paid for by private provision by those who could pay on the nose directly for medical related services; and for the utterly impoverished small minority, the Poor Law provision. Interestingly, these societies were paid for by a flat subscription fee for all. Green shows that only 4.5% of applicants were turned down.
These societies employed doctors, on the whole provided drug dispensing services and sick pay for their members. Doctors were often elected and answerable to the committee of lay people of the society. This democratic control was detested by a vocal minority of doctors as it afforded accountability. They also detested the dominant consumer. Many, though, were happy and content.
The societies, who negotiated individually with doctors, would ensure a good wage for the doctor, but some in the General Medical Council viewed this to be “infamous conduct” — lowering your wage to be affordable to the masses was enough to get you struck off. Ironically the Trade Union thugs and dinosaurs of the 70’s and 80’s would have no doubt approved of this closed shop, restrictive practice which was so much at the expense of the working-class patient. How the original trade unionists, who were so supportive of the friendly societies, would be spinning in their graves.
The great success of the mutual provision of a private welfare state was in effect its own downfall. Lloyd George sought to extend the benefits that the freely chosen mutual provision of the masses had achieved to cover the very poor. Green shows us how during the passage of the bill, the medical profession, which did not like working for the proles and being governed by lay committees, managed to advance arguments that would deliver control of the goods and services provided by the mutual societies, demanded by the patients and the lay committees that ran them, to the medical profession themselves.
It was successfully argued that the pay that the Doctor received on contract to the Society prevented him from providing a full unbiased professional service for the benefit of the patient. It was argued that the practice of certain doctors in competing for the individual subscriptions of members by undercutting other doctors was bad for the provision of medical care. Working-class fraternalism was the BMA’s worst enemy, as competition for patients kept the doctors’ pay at levels that the masses of working-class people could afford.
The commercial insurance companies too had long detested the competition that the Societies had given them and with the BMA, they formed themselves into the Combine and extracted concessions to the Bill.
Green says
The essence of working-class social insurance was democratic self-organization: amendments to the Bill obtained by the BMA and the Combine undermined it. Doctors pay had to be kept within limits that ordinary manual workers could afford: under pressure, the government doubled doctors’ incomes and financed this transfer of wealth from insured workers to the medical profession by means of regressive poll tax, flat-rate National Insurance contributions.
The unhappy outcome of this legislation initially intended to extend to all citizens the benefits of friendly society membership, already freely chosen by the vast majority, was a victory for the political muscle of the Combine and the BMA. They achieved a very considerable transfer of wealth and power from the relatively poor working –class to the professional class.
Post 1911, the doctors were paid out of the state insurance provision and ultimately by the state via the National Health Service, post 1948. Popular, affordable, voluntarily-funded healthcare was crowded out. We now have inefficient Soviet style provision of health care. Dress it up how you like, but essentially the state is the prime provider of health care. Private provision is sidelined and often only available to the wealthy. Choice in services is limited. Patient consumer control of the doctor / medical provider is negligible. Until we have consumer control, our service will always be suboptimal.
David Cameron and the Big Society: Could this be a return to mass private affordable consumer controlled democratic provision of medical care?
I have previously written here about my enthusiasm for the Big Society project.
On August the 13th 2010, 12 projects were launched that allowed public sector workers to take control of delivering services. Could it be possible that we could take control of our local general purpose hospital and local GP services? For this to happen, we would need to get a full tax rebate for all participating members and form a traditional friendly society and extract those services from the state and return them from whence they came, on the whole, to the working-class mutual societies that Green writes so eloquently about.
Would the government be prepared to give a rebate in our tax so we could use the money as our ancestors did, to arrange our own healthcare in a mutual format? Can we see the lay people of say Welwyn and Hatfield, where I live, rise up and form a mutual for all its members benefit? That is a truly wonderful thought. At the moment, our local QE11 hospital where my youngest child was born is facing closure with only the A&E services and one or two other things being left open, and there is much popular support to keep it open. Do the people want to go this far? If we were given our tax back I am confident most citizens would seek to pay their subscriptions, vote in their doctors, and arrange for the full service that they want on a lowest cost basis. Could consumer control and patient power return to Britain?
How bold are Andrew Lansley and David Cameron?
Readers interested in more from David Green may enjoy his 1993 Civitas paper, “ Reinventing Civil Society: The Rediscovery of Welfare Without Politics“.
By Toby Baxendale, on 27 August 10
Yesterday I discovered a brilliant article by Graham Stewart about the legal challenges to the Coalition budget launched by the Fawcett Society:
successive anti-discriminatory legislation, culminating in Harriet Harman’s statutory behemoth, the Equality Act (which received its Royal Assent in April), forces all government departments to undertake an impact assessment on the likely outcomes for ‘protected’ groups in society before implementing policy. Where such an assessment shows a policy may widen rather than close inequality gaps, the government is expected to take corrective action. The Equality Act defines the ‘protected’ groups as those who suffer discrimination on grounds of age, race, disability, sex, sexual orientation, gender reassignment, marriage and civil partnership, religion and belief, pregnancy and maternity.
…
But the cuts must go through or the United Kingdom faces ruin. And it will be a ruin that will not discriminate between men and women, the able bodied and the disabled, the unisexuals from the transsexuals or whatever other section of society the Equality Act wishes to ring fence as exceptional. So the choice for the Government is clear. Either the budget must be enacted in full or the obstructive passages of the Equality Act must be repealed.
I recommend the whole article, available at Critical Reaction.
By Toby Baxendale, on 24 August 10
John Bright and Richard Cobden are forever associated because they were both industrial capitalists, Corn Law Reform free traders, Anti War campaigners, and founders of the “Manchester School” of working class classical Liberalism. We have published some articles in the past about Cobden, after whom I named this Educational Charity, the most recent by Tom Woods, a brilliant work of scholarship. This piece has prompted me to dig out from the vaults this most moving and brilliant speech given in the House of Commons on the 23rd of February 1855 on the war against Russia in the Crimea.
On the 22nd of February 1855 four senior Cabinet Ministers including Gladstone had resigned citing that they were being censured by the new Palmerston led Administration, as members of the prior Administration, they had decided to go to war; Palmerston was now arguing for peace. Cobden and Bright had always stood opposed to war, indeed Bright was a principled Quaker.
Sadly this speech could have been made in recent years. Free trade, more interaction with other people and not war is the best approach. War only ever delivers up an enlarged State and a diminution of freedom with widespread destruction of life, limb and property.
Notes: The seat of Tiverton was Palmerston’s. Lord John Russell was MP for the City of London negotiating the peace treaty at Vienna. Steve Baker MP advises us that his colleague the great Bill Cash is writing a biography of Bright. A quick web search and I see the great free trader himself is flying the family flag as Bright was his great grandfather’s cousin (see here).
The official copy of the “Angel of Death” speech is to be found in Hansard. Needless to say, it was given unscripted.
“MR. BRIGHT
I am one of those forming the majority of the House, I suspect, who are disposed to look upon our present position as one of more than ordinary gravity. I am one, also, of those, not probably constituting so great a majority of the House, who regret extremely the circumstances which have obliged the right hon. Gentlemen who are now upon this bench to secede from the Government of the noble Lord the Member for Tiverton. I do not take upon me for a moment to condemn them; because I think, if there be anything in which a man must judge for himself, it is whether he should take office if it be offered to him, whether he should secede from office, whether he should secede under a particular leader, or engage in the service of the Crown, or retain office in a particular emergency. In such cases I think that the decision must be left to his own conscience and his own judgment; and I should be the last person to condemn any one for the decision 1756 to which he might come. I think, however, that the speech of the right hon. Gentleman is one which the House cannot have listened to without being convinced that he and his retiring colleagues have been moved to the course which they have taken by a deliberate judgment upon this question, which, whether it be right or wrong, is fully explained, and is honest to the House and to the country. Now, Sir, I said that I regretted their secession, because I am one of those who do not wish to see the Government of the noble Lord the Member for Tiverton overthrown. The House knows well, and nobody knows better than the noble Lord, that I have never been one of his ardent and enthusiastic supporters. I have disapproved much of his policy both at home and abroad; but I hope that I do not bear to him, as I can honestly say that I do not bear to any man in this House—for from all I have received unnumbered courtesies—any feeling that takes even the tinge of a personal animosity; and, even if I did, at a moment so grave as this, no feeling of a personal character whatever should prevent me from doing that which I think now, of all times, we are called upon to do—that which we honestly and conscientiously believe to be for the permanent interests of the country. We are in this position, that for a month past, at least, there has been a chaos in the regions of the Administration. Nothing can be more embarrassing—I had almost said nothing can be more humiliating—than the position which we offer to the country; and I am afraid that the knowledge of our position is not confined to the limits of these islands. It will be admitted that we want a Government; that if the country is to be saved from the breakers which now surround it, there must be a Government; and it devolves upon the House of Commons to rise to the gravity of the occasion, and to support any man who is conscious of his responsibility, and who is honestly offering and endeavouring to deliver the country from the embarrassment in which we now find it. We are at war, and I shall not say one single sentence with regard to the policy of the war or its origin, and I know not that I shall say a single sentence with regard to the conduct of it; but the fact is that we are at war with the greatest military Power, probably, of the world, and that we are carrying on our operations at a distance of 3,000 miles from home, and in the neighbourhood of the strongest fortifications of that great military empire. I will not stop to criticise—though it really 1757 invites me—the fact that some who have told us that we were in danger from the aggressions of that empire, at the same time told us that that empire was powerless for aggression, and also that it was impregnable to attack. By some means, however, the public have been alarmed as if that aggressive power were unbounded, and they have been induced to undertake an expedition, as if the invasion of an impregnable country were a matter of holiday-making rather than of war. But we are now in a peculiar position with regard to that war; fur, if I am not mistaken—and I think I gathered as much from the language of the right hon. Gentleman—at this very moment terms have been agreed upon—agreed upon by the Cabinet of Lord Aberdeen; consented to by the noble Lord the Member for Tiverton when he was in that Cabinet; and ratified and confirmed by him upon the formation of his own Government—and that those terms are now specifically known and understood; and that they have been offered to the Government with which this country is at war, and in conjunction with France and Austria—one, certainly, and the other supposed to be, an ally of this country. Now, those terms consist of four propositions, which I shall neither describe nor discuss, because they are known to the House; but three of them are not matters of dispute; and, with regard to the other, I think that the noble Lord the Member for the City of London stated, upon a recent occasion, that it was involved in these terms—that the preponderant power of Russia in the Black Sea should cease, and that Russia had accepted it with that interpretation. Therefore, whatever difference arises is merely as to the mode in which that “preponderant power” shall be understood or made to cease. Now, there are some Gentlemen not far from me—there are men who write in the public press—there are thousands of persons in the United Kingdom at this moment—and I learn with astonishment and dismay that there are persons even in that grave assembly which we are not allowed to specify by a name in this House—who have entertained dreams—impracticable theories—expectations of vast European and Asiatic changes, of revived nationalities, and of a new map of Europe, if not of the world, as a result or an object of this war. And it is from those Gentlemen that we hear continually, addressed to the noble Lord the Member fur Tiverton, terms which I cannot well understand. They call upon 1758 him to act, to carry on the war with vigour, and to prosecute enterprises which neither his Government, nor any other Government has ever seriously entertained; but I would appeal to those Gentlemen whether it does not become us—rewarding the true interests and the true honour of the country—if our Government have offered terms of peace to Russia, not to draw back from those terms, not to cause any unnecessary delay, not to adopt any subterfuge to prevent those terms being accepted, not to attempt shuffles of any kind, not to endeavour to insist upon harder terms, and thus make the approach of peace even still more distant than it is at present? Whatever may be said about the honour of the country in any other relation in regard to this affair, this, at least, I expect every man who hears me to admit—that if terms of peace have been offered they have been offered in good faith, and shall be in honour and good faith adhered to; so that if, unfortunately for Europe and humanity, there should be any failure at Vienna, no man should point to the English Government and to the authorities and rulers of this Christian country, and say that we have prolonged the war and the infinite calamities of which it is the cause. Well, now, I said that I was anxious that the Government of the noble Lord should not be overthrown. Will the House allow me to say why I am so? The noble Lord at the head of the Government has long been a great authority with many persons in this country upon foreign policy. His late colleague, and present envoy to Vienna, has long been a great authority with a large portion of the people of this country upon almost all political questions. With the exception of that unhappy selection of an ambassador at Constantinople, I hold that there are no men in this country more truly responsible for our present position in this war than the noble Lord who now fills the highest office in the State and the noble Lord who is now, I trust, rapidly approaching the scene of his labours in Vienna. ["Hear, hear!" and cries of "No, no!"] I do not say this now to throw blame upon those noble Lords, because their policy, which I hold to be wrong, they, without doubt, as firmly believe to be right; but I am only stating facts. It has been their policy that they have entered into war for certain objects, and I am sure that neither the noble Lord at the head of the Government nor his late colleague the noble Lord the Member for London will shrink from the responsibility 1759 which attaches to them. Well, Sir, now we have those noble Lords in a position which is, in my humble opinion, favourable to the termination of the troubles which exist. I think that the noble Lord at the head of the Government himself would have more influence in stilling whatever may exist of clamour in this country than any other Member of this House. I think, also, that the noble Lord the Member for London would not have undertaken the mission to Vienna if he had not entertained some strong belief that, by so doing, he might bring the war to an end. Nobody gains reputation by a failure in negotiation, and as that noble Lord is well acquainted with the whole question from beginning to end, I entertain a hope—I will not say a sanguine hope—that the result of that mission to Vienna will be to bring about a peace, to extricate this country from some of those difficulties inseparable from a state of war. There is one subject upon which I should like to put a question to the noble Lord at the head of the Government. I shall not say one word here about the state of the army in the Crimea, or one word about its numbers or its condition. Every Member of this House, every inhabitant of this country, has been sufficiently harrowed with details regarding it. To my solemn belief, thousands—nay, scores of thousands of persons—have retired to rest, night after night, whose slumbers have been disturbed, or whose dreams have been based upon the sufferings and agonies of our soldiers in the Crimea. I should like to ask the noble Lord at the head of the Government—although I am not sure if he will feel that he can or ought to answer the question—whether the noble Lord the Member for London has power, after discussions have commenced, and as soon as there shall be established good grounds for believing that the negotiations for peace will prove successful, to enter into any armistice? ["No! no!" and "Hear, hear!"] I know not, Sir, who it is that says “No, no,” but I should like to see any man get up and say that the destruction of 200,000 human lives lost on all sides during the course of this unhappy conflict is not a sufficient sacrifice. You are not pretending to conquer territory—you are not pretending to hold fortified or unfortified towns; you have offered terms of peace which, as I understand them, I do not say are not moderate; and breathes there a man in this House or in this country whose appetite for blood is so insatiable that, even 1760 when terms of peace have been offered and accepted, he pines for that assault in which of Russian, Turk, French, and English, as sure as one man dies, 20,000 corpses will strew the streets of Sebastopol? I say I should like to ask the noble Lord—and I am sure that he will feel, and that this House will feel, that I am speaking in no unfriendly manner towards the Government of which he is at the head—I should like to know, and I venture to hope that it is so, if the noble Lord the Member for London has power, at the earliest stage of these proceedings at Vienna, at which it can properly be done—and I should think that it might properly be done at a very early stage—to adopt a course by which all further waste of human life may be put an end to, and further animosity between three great nations be, as far as possible, prevented? I appeal to the noble Lord at the head of the Government and to this House; I am not now complaining of the war—I am not now complaining of the terms of peace, nor, indeed, of anything that has been done—but I wish to suggest to this House what, I believe, thousands, and tens of thousands, of the most educated and of the most Christian portion of the people of this country are feeling upon this subject, although, indeed, in the midst of a certain clamour in the country, they do not give public expression to their feelings. Your country is not in an advantageous state at this moment; from one end of the kingdom to the other there is a general collapse of industry. Those Members of this House not intimately acquainted with the trade and commerce of the country do not fully comprehend our position as to the diminution of employment and the lessening of wages. An increase in the cost of living is finding its way to the homes and hearts of a vast number of the labouring population. At the same time there is growing up—and, notwithstanding what some hon. Members of this House may think of me, no man regrets it more than I do—a bitter and angry feeling against that class which has for a long period conducted the public affairs of this country. I like political changes when such changes are made as the result, not of passion, but of deliberation and reason. Changes so made are safe, but changes made under the influence of violent exaggeration, or of the violent passions of public meetings, are not changes usually approved by this House or advantageous to the country. I cannot but notice, in speaking to Gentlemen who 1761 sit on either side of this House, or in speaking to any one I meet between this House and any of those localities we frequent when this House is up—I cannot, I say, but notice that an uneasy feeling exists as to the news that may arrive by the very next mail from the East. I do not Suppose that your troops are to be beaten in actual conflict with the foe, or that they will be driven into the sea; but I am certain that many homes in England in which there now exists a fond hope that the distant one may return—many such homes may be rendered desolate when the next mail shall arrive. The angel of death has been abroad throughout the land; you may almost hear the beating of his wings. There is no one, as when the first-born were slain of old, to sprinkle with blood the lintel and the two sideposts of our doors, that he may spare and pass on; he takes his victims from the castle of the noble, the mansion of the wealthy, and the cottage of the poor and the lowly, and it is on behalf of all these classes that I make this solemn appeal. I tell the noble Lord, that if he be ready honestly and frankly to endeavour, by the negotiations to be opened at Vienna, to put an end to this war, no word of mine, no vote of mine, will be given to shake his power for one single moment, or to change his position in this House. I am sure that the noble Lord is not inaccessible to appeals made to him from honest motives and with no unfriendly feeling. The noble Lord has been for more than forty years a Member of this House. Before I was born, he sat upon the Treasury bench, and he has devoted his life in the service of his country. He is no longer young, and his life has extended almost to the term allotted to man. I would ask, I would entreat the noble Lord to take a course which, when be looks back upon his whole political career—whatever he may therein find to be pleased with, whatever to regret—cannot but be a source of gratification to him. By adopting that course he would have the satisfaction of reflecting that, having obtained the object of his laudable ambition—having become the foremost subject of the Crown, the director of, it may be, the destinies of his country and the presiding genius in her councils—he had achieved a still higher and nobler ambition; that he had returned the sword to the scabbard—that at his word torrents of blood had ceased to flow—that he had restored tranquillity to Eu- 1762 rope, and saved this country from the indescribable calamities of war.”
By Mark Goodhand, on 4 August 10
In his latest article for Centre Right, Steve Baker asks “Do ideas matter?”
The Labour Party apparently thinks so: I have lost count of the number of times they have denounced the Government as “ideological”. We have even been called “pre-Keynesian neo-liberal ideologues” in the course of a speech.
Famously, Mrs Thatcher banged on the table a copy of Hayek’s Constitution of Liberty with the words “This is what we believe!” It’s rather ironic that Hayek’s postscript to that book was titled, “Why I Am Not a Conservative”.
…
When I reflect on these dark years of New Labour, I see as complete an implementation of the ideas of Gramsci, Foucault and Althusser as one of sound mind could dread. ”Pre-Keynesian neo-liberal ideologues”? It’s a bit rich, coming from hypocritical neo-Marxist demagogues.
The idea of the Big Society has a rich, pragmatic heritage. For me, it is about altruistic individuals in positive relationships. Some of those relationships will be charitable, some personal and some commercial. All are social, because society is the cooperative action of individuals, not the coercive power of the State.
As usual, the whole article is well worth reading.
By Abhinandan Mallick, on 2 August 10
Why the Tories should abolish the Bank of England, and why they will politically benefit from doing so
The Conservative Party, since forming their coalition government have seemed to suggest, both from the actions they have taken and the announcements they have made, that they are ready to make radical reforms. Recent statements by Francis Maude would seem to suggest that this government is quite ready to continue in the direction of radical reform. Indeed an excellent article that recently appeared in The Spectator provided some hints as to direction the Conservatives, and in particular George Osborne, seem to be taking in order to wrest this country from its relentless state dependency. From this, a few things are clear.
The idea behind public sector cuts, devolution of schooling authorities tax breaks in particularly state employed areas, as well as removing the £545 child benefit tax cuts for families earning £50k a year seems to have been to cut the bloc of voters relying on state handouts to survive, and to begin to produce, in a Thatcherite fashion, a bloc of economically independent voters with what Shirley Letwin called “vigorous virtues.” Central to much of this is to reverse the tactics Labour had previously used against the conservatives, any further attempts to reintroduce state benefits and subsidies will have to face the burden of justifying where their funds will come from, in much the same way that Labour used to chide the Tories in opposition, whenever any hints of cuts or movement toward a balanced budget were made, as cruelly proposing the cutting of “critical services.”
Taking this as a given, it seems puzzling at least to this writer, why money has not entered the debate. This is since the inflationary phoney boom created through credit expansion, was the primary means of smoke and mirrors the former government used to so effectively mask the disastrous consequences of its unsustainable spending policies. One could compare the modern economic boom as a tool of statecraft comparable in character to the bread and circuses of the Roman Empire. It is time for this nation to cast the wool from its eyes.
A printing press, can be a terribly convenient tool of conducting “monetary policy”, if you own one. Statists and their apparatchiks have long been fond of it, and it provides a great vehicle for the growth of the state, since it allows them to gorge the wealth of the people they rule over, without encountering direct resistance. Why is this, you might ask? As Adam Smith pointed out a long time ago, money is not wealth.
Printing money, or producing electronic credit, or rather “inflation”, as it used to be understood, never can and never does produce neutral effects. Quite obviously, those that receive the new money first can enrich themselves at the expense of others since they can spend this new money first. By doing so they increase demand for certain goods, causing their prices to get bid up relative to what they would have been, while others must cope with paying these increased prices whose income has not been raised have thereby been robbed of their wealth and had the purchasing power of their money destroyed. What is most sickening about this process is that it hurts the poor, the ones who have the least money to begin with, the most; while the same sycophants and interventionists who espouse these destructive policies nowadays are the very ones who claim to have their interests at heart.
Even more insidiously, while dumping newly created money to buy government and “high quality” private bonds, the Bank of England through its irresponsible quantitative easing policy is keeping interest rates at 0.5%. In much the way these easy money policies created this crisis, they will continue to exacerbate it. The manipulation of interest rates causes capital to appear less scarce than it otherwise would have been, causing submarginal long term investments to appear more profitable, producing an inevitable cluster of errors down the road, once the interest rates correct and the real scarcity of capital is revealed. This occurs since the consumer savings to needed to make such projects have any hope of being sustainable were never made.
Yet economic booms are a political tool, and really the most insidious among them. If the Tories continue to allow the Bank of England to operate as it does, they are preventing a real correction, and are fermenting a crisis that will surely punish them in 4 years time. Yet if they truly are wanting to be radical this time around, there is no better way of consolidating their political position than allowing the privatisation of money, allowing people to use non-monopolised currencies like gold and silver not controlled by mercantilist bigwigs who seek to actively destroy the savings of the citizenry.
This would “shut the door”, preventing any future Labour government of allowing itself to engage in profligate and damaging spending; removing their ability to hide the robbery of the citizenry through inflation, since they would now have to account for any spending increases through taxation. Predictably, people would resist this much more vehemently. What better way to create Shirley Letwin’s kind of people!
Repeal of the legal tender laws would be a place to start, with the ultimate goal being to abolish the demonic institution that has been at the heart of our troubles: the Bank of England. Alternatively, any of one of the excellent plans for monetary reform that have already been suggested on this website can begin to be considered.
Furthermore, as already noted such a reform, when clearly stated as above would shame any opposition from either Labour or the Lib Dems if they even once tried to state they were doing so in favour of the poor. By advocating inflation they are and have been destroying both the poor and the middle class! Therefore, I must ask the Tories out there, what are you waiting for? Privatise money!
By Toby Baxendale, on 1 August 10
We are told in this weekend’s Sunday Telegraph that:
Listening to David Cameron’s first speech on the steps of Downing Street, Archbishop Vincent Nichols says he nearly fell off his chair at the Prime Minister’s pledge to work for “the common good’.
His surprise was down to the fact that only a few weeks earlier, Catholic bishops had published a document offering election advice to churchgoers called “Choosing the Common Good”. Archbishop Nichols is “encouraged at the echoes of Catholic teaching emerging in the language of the new Coalition Government.” The article goes on to say “the Archbishop appears filled with an infectious optimism that the country could be on the cusp of returning to a more cohesive, united society.”
Nichols said,
If we can generate that sense of volunteering and the sense of fulfilment that comes from it in our society, then we would be better for it. The Big Society is a step in that direction.
It should come as no surprise to our Catholic leader in the UK that a Conservative Prime Minister should be in tune with large parts of Catholic Social Teaching. One of the greatest influences on Thatcher for example was F A Hayek, who was born a Catholic Christian, although he later became agnostic. The final sentence of his last book, The Fatal Conceit does seem to offer up a legitimate view that re reverted to his Catholic Faith.
In 1993 the Hayek Memorial Lecture “Two moral ideas of business” run by the Institute of Economic Affairs, Michael Novak in his book of the same year “The Catholic Ethic and the Spirit of Capitalism” revealed to us that Hayek had been having extensive conversations with Pope John Paul II who wrote the encyclical “Centesimus Annus.” Chapters 31 and 32 are very Hayekian.
As Karol Wojtyla, the old Pope’s doctoral Thesis, “The Acting Person,” is replete with observation that it is the creative and dynamic interaction of free citizens that causes social co-operation. This idea of course underscores Hayek’s conception of the spontaneous order of social co-operation.
Could this be David Cameron or F A Hayek writing? Is this the same as the spontaneous order of human co-operation or the mutual co-operation of The Big Society? Are they the same?
By intervening directly and depriving society of its responsibility, the Social Assistance State leads to a loss of human energies and an inordinate increase of public agencies, which are dominated more by bureaucratic thinking than by concern for serving their clients, and which are accompanied by an enormous increase in spending, In fact, it would appear that needs are best understood and satisfied by people who are closest to them who act as neighbours to those in need. It should be added that certain kinds of demands often call for a response which is not simply material but which is capable of perceiving the deeper human need.
Well it is from Centesimus Annus, by Pope John Paul II No 48 1991.
Archbishop Nichols should be aware that the Cameron modernised Conservative Party, which (whether it knows it or not) sits on a great body of thought that is deeply rooted in Catholic Social Thought.
I have written here about the Thatcherite view of society contrasted with the Cameronian one here. It is worth highlighting some of these points again.
Thatcher’s Infamous Quote
From an interview given by Prime Minister Margret Thatcher to Women’s Own magazine, October 31, 1987:
I think we have gone through a period when too many children and people have been given to understand “I have a problem, it is the Government’s job to cope with it!” or “I have a problem, I will go and get a grant to cope with it!” “I am homeless, the Government must house me!” and so they are casting their problems on society and who is society? There is no such thing! There are individual men and women and there are families and no government can do anything except through people and people look to themselves first. It is our duty to look after ourselves and then also to help look after our neighbour and life is a reciprocal business and people have got the entitlements too much in mind without the obligations, because there is no such thing as an entitlement unless someone has first met an obligation [...]
I wrote,
It would be ignorant to say that there is no such thing as society. Society is the purposeful actions of all the individuals who participate in it. As such it is simply the sum of all its parts. Delve a little bit deeper and you will see that is in fact the most liberating and fulfilling invention of mankind discovered by the use of reason. The ability for man to cooperate and pursue his ends is society. Working within the societal structure of mutual co-operation to facilitate exchange of goods and services, you get the additional benefits of friendship and a sense of belonging or togetherness. This is often hailed as one of the greatest benefits of living and cooperating together.
The principle of the division of labour that allows us to avoid providing individually for all our goods and services, shelter and warmth, with the necessary impoverishment this would mean for the majority (and probably death), make us what we are as human beings. We are lifted out of the survival of the fittest war of all against all.
The Darwinian nightmare is not writ large in the human species as it seems to be for most other life forms.
Mrs Thatcher was taken out of context, as can be seen when you read the full text of the talk. However I suspect she, or her speech writers, displayed little understanding of the true benefits of the discovery of mutual human co-operation. I think they were also of the school of thought that would quite rightly argue for less government, as is Cameron, one of her successors. However she did not have much of an idea of what to put in its place. The transition from a government-run, welfare-providing, rule-making, centralised decision-making society to individual responsibility, local-community-led society is quite a painful process. To be smoothly transitioned to a society more compatible with liberty, I fear warrants only a constructivist approach to getting top-down government out of our lives and to rebalancing responsibility away from government and to the individual and the family. Cameron is spot on the money with regard to this.
Consider these extracts from “The Big Society” (delivered on the 10th Nov 2009) speech by David Cameron our aspiring PM.
I believe that in general, a simplistic retrenchment of the state which assumes that better alternatives to state action will just spring to life unbidden is wrong. Instead we need a thoughtful re-imagination of the role, as well as the size, of the state.
And:
The size, scope and role of government in Britain has reached a point where it is now inhibiting, not advancing the progressive aims of reducing poverty, fighting inequality, and increasing general well-being. Indeed there is a worrying paradox that because of its effect on personal and social responsibility, the recent growth of the state has promoted not social solidarity, but selfishness and individualism.
This is an extremely important point. Absent personal responsibility and the mutual bonds that bind us together through the universal division of labour fall away. The selfish, those who do not take individual responsibility, the person who says he has a “right” to a job, a house, an income etc, these people believe others must provide for them. This is selfishness in its extreme, if they are fit and ready to work. We all suspect that with 2.7 million people on Incapacity Benefit, there is extreme selfishness and little societal / individual responsibility at play. In war, enemies have tried their best to bomb the hell out of us and incapacitate as many of us as possible, but I suspect in 1945 there were not 2.7m people incapacitated in the UK!
Cameron goes on to say
And here lies the rub.
The paradox at the heart of big government is that by taking power and responsibility away from the individual, it has only served to individuate them. What is seen in principle as an act of social solidarity, has in practice led to the greatest atomisation of our society. The once natural bonds that existed between people – of duty and responsibility – have been replaced with the synthetic bonds of the state – regulation and bureaucracy.
Our alternative to big government is the big society.
But we understand that the big society is not just going to spring to life on its own: we need strong and concerted government action to make it happen.
Archbishop Nichols should be not surprised the modern Conservative Party has moved on and improved from the raw Thatcherite approach in its positioning of the free society with that of the Modern Catholic Social Teaching that it has so much in common with. When the Pope visits the UK this September, we trust that his advisors and Cameron’s celebrate the great vision of the last Pope, Hayek and Cameron himself on these matters.
Some related articles that go deeper into some of these issues mentioned above are listed here
Afterthought
It is a great shame that the Pope will not be visiting Northern Ireland as there is a large Catholic minority that has little in common with its political representatives who are largely statist, interventionist top down socialist meddlers who have little in common with Catholic teaching. Those Catholics actually have more in Common with The Big Society vision of Cameron and no political representation.
By Sean Corrigan, on 31 July 10
Readers who enjoyed my Cui Bono article earlier this week may be interested in this piece from Times Higher Education:
Climate change is serious business – in more ways than one. Martin Cohen describes how capitalist ‘bootleggers’ have co-opted the environmental ‘Baptists’ to fulfil their raison d’etre – making money. Thanks to the ‘greenwash’, the solutions could be worse than the problems
In view of recent comments by our minister for Energy and Climate Change, Cohen’s account of the Danish experience with wind power is especially illuminating:
Until recently, the most important subsidy supporting the sector was that the Danish National Grid (and hence consumers) was obliged by law to buy all the electricity produced by wind-power projects – and to do so at prices determined by the government, not the market. That’s why Danish householders must pay almost double the UK price for electricity. Estimates of the costs of the subsidies differ – the Danish government says it is about DKr4 billion (£443 million) a year – but independent experts put it at about DKr10 billion a year. If the higher estimates are correct, it would mean that Denmark has been spending more on wind turbines each year than on education.
…
With wind turbines, a conventional power station must always provide back-up. For the Danes, traditional power stations with capacities equal to 90 per cent of the installed wind-power capacity must be permanently online to guarantee supply at all times.
…
As mentioned, the nominal output of wind power is far greater than the actual output. A more realistic target for the Department of Energy and Climate Change would be the construction of 100,000 wind turbines. Unfortunately, Wales is too small for all those. Instead, a 10km-deep dedicated strip right around the coast of the British Isles would be required. Even Brighton, and its new Green MP, would be blown away …
Cui bono?
By Sean Corrigan, on 26 July 10
We’ll keep the Green Flag Flying
In a recent polemic, the well-regarded investment manager and part-time climate activist, Jeremy Grantham, set out his version of the Nicene Creed of climate alarmism and asks – either naively or disingenuously – who is supposed to benefit from all this if it is simply a ‘conspiracy’, a term deliberately chosen – along with the more emotive epithet of ‘denier’ – to ridicule the exercise of rational scientific scepticism and to deride those not fully willing to believe that everything that de Tocqueville’s ‘vast tutelary power’ disseminates is the unalloyed truth.
To answer Mr. Grantham’s question, let us consider this affliction of anthrophobic, anti-capitalistic and wholly irrational environmentalism in a little more detail, whether exemplified by cuddly panda(r) pressure groups; by the truly shocking, warmed-over eugenicists of the population reduction ‘movement’; or in the compulsory purchase of those contemporary green indulgences which masquerade as carbon permits.
Far from finding it difficult to identify who gains from the promotion of what Vaclav Klaus has rightly categorised as the greatest threat to freedom since the fall of Communism, the real problem is to separate out the beneficiaries of this most pernicious of ideologies since it serves so many disparate interests all at once.
Big business can enjoy it – as it does all regulatory blankets – as a means of disadvantaging smaller, would-be competitors. Boardroom egoists can bask in the vainglory of the eco-plaudits they can win from both kings and credulous crowds, while disregarding their primary duty to maximise shareholder returns the honest way, rather than through the public purse.
Union leaders relish it, because it allows them to dress their selfish restrictionism up in the colours of compassion. “No!” they cry, “You mustn’t move the factory to China – they pollute too much! Here at home, we may be relatively expensive, but at least we’re clean. Pay us more for the sake of your children!”
Messianic political leaders – each lustful of his precious “legacy” – the many neo-Jacobin fanatics, and the kind of frustrated dirigistes who secretly bemoan the fall of the Berlin Wall can all exploit Green scaremongering to order their twisted Dystopias, to impose whole new rafts of taxes upon their electors, and to interfere ever more closely with individual liberties as they do.
National Security Strangeloves have a certain coincidence of interests here, too, for not only can they hope that the adoption of the Cult will inhibit the economic ascent of any potential rivals to their own Hegelian deity, but they can easily substitute the militarists’ hallowed concept of “autarky” whenever they encounter the nauseating buzzword, “sustainability.”
Then there are whole faculty buildings packed with hack scientists whose uninspired work promises to deliver neither fundamental insight nor commercial usefulness, but who can enhance the importance of their pronouncements – and better harvest public funding – by uncritically endorsing the new atmospheric atavism and by tampering with their unscrutinised ‘data’ in order to give their intellectual prostitution a veneer of objectivity.
Next up we have the unwashed hordes of woad-painted New Age warriors – dole-devouring, didgeridoo-droning addle-heads – all convinced that if they throw a few brickbats outside a WTO meeting they will soon usher in the kind of faux-Celtic fantasy world best restricted to the escapist realms of the RPG addict.
In contrast, we have an entire concours d’elegance of those fad-ridden fortysomethings who are the latest designer-labelled devotees of the Earth Goddess, their Kensington mews coffee tables groaning under the forest-felling weight of the pretty picture books issued as holy writ by Gaia’s own High Priest of the Britons, the Attenborough.
Finally, we have the same hoi polloi-hating coterie of Michelin-munching, silk-suited Platonic elitists – of the kind so mercilessly exposed in John Carey’s seminal work, The Intellectuals and the Masses.
These sanctimonious, self-appointed meddlers can usually be found advocating higher taxes for budget holidaymakers while hypocritically flying first class from one five-star NGO summit to another. These are the Davos Dominicans – mendicants who nonetheless manage to live high on the hog as they seek to impose their narrow and stifling orthodoxy on all us poor, toiling peasants, while wielding Bell, Book, and Biofuel in the attempt to exorcise us of that most diabolical of fiends, the dreadful demon, Carbon.
That most ‘Open’ of Conspiracists, that most persistent of re-modellers of the human clay, that indefatigable prophet of the World State – H.G. Wells – long ago proposed much of the programme which Greens and the Carbophobes wish to bring about, while no less an infernal genius than the Marquis de Sade advocated the equation of animal and plant ‘rights’ with those of humanity which the ‘Plague Species’ misanthropes seek to write into law today.
As Wells wrote,
Religion, modern and disillusioned, has for its outward task to set itself to the control and direction of political, social, and economic life. If it does not do that, then it is no more than a drug for easing discomfort, ‘the opium of the peoples’.
Mix that re-harnessed religious instinct in with the temptations of rent-seeking, the sycophancy which attaches to power, and the hunger for power itself and it is all too simple to answer the question of who stands to benefit from a belief – real or affected – in climate orthodoxy.
By Toby Baxendale, on 24 July 10
The Labour Party will eventually get back in power again. There is a very good chance it will be led by David Miliband.
In the FT yesterday he wrote: “Framing the debate as a choice between the public and private sectors is certainly good politics, but it is bad economics. The Budget will force 600,000 public sector workers into unemployment”. You can see the full article here. This demonstrates that Miliband is a slave to the underconsumptionist crank Keynes. He does not understand the role of costs and savings in society that was recently explained so well by Prof Guido Hulsmann. I draw your attention to my notes explaining the two underconsumptionist “Elephants in the room.”
Mr Milliband, please note.
Slide 9
Sophism 1: A “leak” in the circuit of spending? – In Glory of Hoarding
To Keynes, an act of savings is a leak from the economy. If I choose to sit on all my money under a mattress then I increase the purchasing power of all the money in ownership of others not under my mattress. I enrich people by an act of hoarding as their money units have more command on the same level of goods offered for sale.
Sophism 2: “The Paradox of Savings” – Circular Flow of Income
One man’s spending is another man’s income. Save, i.e. cut back on spending in the economy as a whole, and the workers’ income will fall. This will cause a depression. If the arguments in the above do not solve this then you must add; what matters is not that income will fall, but the relative difference between the level of costs and profits is the thing that really matters. If incomes all fall and thus the costs of labour has fallen, companies’ costs positions go down in a greater percentage to their overall cost base so they remain profitable, then there is no system-wide depression as this adjustment process (bringing costs into line with expenditure and making business profitable once more) takes place. Relative cost and income matters, not absolute cost and income.
Milliband says:
I am an economic realist….The government also has no plan for jobs…. Instead, it should focus on the jobs deficit: the 2.5m people looking for work. Sweden made halving unemployment its priority during its 1990s fiscal consolidation.
Jobs for sure should be the centrepiece of any economic policy and I will come back to this later….
Sadly he demonstrates that his knowledge of economic history is very poor. For example:
Britain is repeating Japan’s response to its crisis: pulling stimulus too early, raising value added tax and relying too heavily on monetary policy – leading to unemployment and stagnation.
Japan has had the biggest increases in its money base and the largest sustained fiscal expenditures thrust upon it. It is the Keynesian belief in demand management that has all failed over the last 20 years. Yes – 20 years. This nation has been postponing its reckoning for two decades. When you find that the Imperial Palace in Tokyo (3.5 km sq patch of land) was worth more that the whole value of property in California, the word “bubble” comes to mind. For sure, there are still many system-wide adjustments that need to take place before that nation emerges out of its fiscal and monetary incontinence. With Miliband under such delusions we should be getting worried that this no doubt well-meaning politician could do so much damage to us as a nation, just like his old boss. That nightmare just finished and I do not want to go back there soon!
He has identified five steps to renew Britain.
Step 1: Create a British Investment Bank.
This is very irritating indeed; we have a whole slew of banks, private equity and venture capital. The last thing we need is the State becoming the allocator of capital. Professional investors or lenders lend to opportunities that have a very good chance of creating wealth. The only purpose of having a State owned bank is so that it can lend based on political criteria, otherwise why do it? This will cause more bad investment and slow down the process of the liquidation of the bad investments we have already. This really is far too important an area of society for the government to get involved with; they simply do not have the skill or understanding.
If he really wants to lift the lid off growth and release the true creativity of all entrepreneurs he should consider the following:
- Abolish Corporation Tax in full so that all businesses can use their own retained profits to facilitate further investment in them and not be reliant on bank funding. This was how things were done in the Industrial Revolution.
- Abolish Capital Gains Tax in full so that entrepreneurs are incentivized to create more businesses with our reward of getting a tax free gain. Sir Gus O’Donnell initiated, via Gordon Brown, the most favourable CGT regime in living memory. I was staggered at the time that a Labour government could actually have such great vision. It put the business community right at the heart of Labour. Miliband would do well to remember this, should he wish to get the support of business again.
- Abolish Inheritance Tax in full. This will stop the crazy incentive of having to avoid tax by going into exile, or doing some very fancy and expensive tax planning so you can build great intergenerational wealth that is built upon and passed down through generations for the ongoing benefit of many people. This nation was built on great big industrial and financial fortunes created this way. The more the State confiscates and sets up perverse incentives to avoid and leave the nation, the more impoverished we will become.
This line of thinking applies to all of those taxes.
Corporation Tax is due to be around £35 bn and the other two raise approx £5bn in total. This is currently also what we pay in terms of interest payments for the national debt, a burden which significantly increased under the last Labour government.
This July the two big State owned banks, RBS and Lloyds, missed the lending targets set by their last political masters by nearly £17 bn.
We pay nearly 6 million people in this country to do nothing, being either unemployed or on incapacity benefit. What a colossal waste of human resources, and a staggering affront to human dignity. If each one of them with all their benefits was costing us £6,667 per year, this would be £40bn a year. If the private sector was released from the corresponding tax burden, it would have the means to create jobs and wealth. £40 bn a year more in the hands of businesses would prompt a jobs revolution that could well take most of these people off benefits and into work.
This is what Miliband and indeed all politicians should be brave enough to be thinking, but the Miliband plan shows no such enlightenment …
Step 2: Get 60% of people into University
This is often said by well meaning well educated middle class people. They want to see Oliver Twist blossom. There is, of course, nothing wrong with this, indeed all people should be encouraged to achieve their potential – but so should the Artful Dodgers. It is not possible for all people to be like the middle class, well-educated Miliband. Where is the respect for the artisan? Where are the technological colleges to educate our carpenters, butchers, mechanics, fishmongers, and plumbers. All these critical skills are severely undervalued and are being worked by an increasingly imported in work force which does value these skills.
Instead, Miliband should be thinking about doing the following:
- Abolish the minimum wage for all people aged under 21 years old and let employers pay anybody anything if they can prove that they are putting a young person through a artisanal skill based training program that could well lead to a job. A young lad living with his mother aged 16 is largely no use to man nor beast until he has gained experience and at £240 per week (plus NI etc) a plumber would not bother to take him on as he would not produce that benefit for maybe a couple of years which would make it worthwhile to invest in the employment and training of this person.
The next gem from Miliband involves the magical mystery multiplier:
Step 3: Deploy the public sector “to invigorate local economies by maximizing the multiplier effect of public services
I tell you no lie! I will not even bother to comment on this suggestion. The thought of those crack troops of bloated inefficiency trying to organize a fairly lean private sector will send us into the dark ages.
Miliband would do well to read this article which also shows why the multiplier is a myth. Here is one quote from it:
If I have £100 and I spend it on goods and services, my demand to hold cash or my money demand goes down by £100 and I receive goods and services in exchange. The person(s) who sold me the goods and services receives the £100 in exchange for those goods and services and his demand for a cash balance, or money demand has gone up. Where is the multiplier in this? It does not exist
Meanwhile, back in Miliband land …
Step 4: Increase productivity “and the quality of work in low pay, low value sectors of the economy.”
I am not sure what this means but I could not disagree with the desire to increase productivity. This is the only aim of capitalist entrepreneurs. I try to use the existing factors of production in better and more efficient ways over time to get better products and services for my customers. The only thing that gets in the way of this is endless pronouncements and laws from various government departments here and in Europe. If Miliband is advocating a total abolition of all this garbage, then great. Somehow I suspect he is advocating better meaning meddling, which will have exactly the opposite effect.
I suspect the low quality and value sectors comment is political rhetoric. Needless to say, 100 years ago if you had electricity you were a prince among men. Now, I would think it is 99.9% of our country. The onward accumulation of wealth, built upon the shoulders of our ancestors via the operation of private business – and not government – ensures that the maximum number of people are lifted out of poverty. Not allowing the creative talents of people to freely express themselves, by having things like the minimum wage, is an affront to the Judeo-Christian ethic upon which this society is built and will ensure that Miliband’s objectives are hampered. If paying people more were the answer, we could stop poverty today by not just having a minimum wage of £5.93 per hour but £593 per hour. The absurdity of this is plain to see. However, not so plain to Miliband who is obsessed with the underconsumptionist fallacies mentioned above.
Step 5: Produce an industrial strategy, “marshalling the state’s tools of procurement, regulation, planning and taxation to attract the private sector where it is needed most”
He goes on to say: “We can learn from Portugal’s initiative on infrastructure for electric car-charging, a viable commercial case for investment in manufacturing. Germany’s renewable energy policy combined feed-in tariffs with regional development areas and research, creating more than 300,000 jobs. Israel’s incentives-based approach to commercializing university research has taken it to the top of the innovation charts. Globally, governments are helping to expand the economic pie.”
The government can only take what the private sector generates. It does not own factories producing things that create wealth. It spends wealth that would otherwise have been spent by the private sector on things that people actually value.
He concludes
At the last election Labour could not find a single business to support its economic policy. I am determined to put this right – and lead Labour into again becoming the party of spreading wealth creation, not just spreading wealth. It is not good politics to have bad economics.
Sadly for Miliband I suspect that that will still be the case should he get in power! I hope his period in opposition allows him to reflect on why the people have put him out in the cold. I hope he learns a bit of economics as well, and visits factories, enterprises, banks, and other businesses at the coal face, and talks to people who are involved in the creation of the wealth of our nation. I hope he asks them how they would go about creating more wealth. If he does this, and reflects sincerely, he must surely realise the secret to our nation’s future prosperity lies not in what government can do, but in what it can stop doing.
By Steven Baker MP, on 24 June 10
Professor Kevin Dowd blogs my speech in the budget debate for the IEA:
By far the best contribution to the parliamentary debate on the Emergency Budget was by the MP for Wycombe, Steve Baker. Using impeccable analysis and respected (ONS and Bank for International Settlements) data sources, Mr. Baker painted a frightening scenario in which the fiscal policies of western governments are unsustainable, and were even before the recent crisis erupted.
It’s even worse than I thought. If you dare, read more here.
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