We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.

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Samizdata quote of the day

Who the hell do you think you people are?

- Nigel Farage MEP uses the TV cameras in the European Parliament in Strasbourg to berate the Euro-elite and to create another few minutes of video that is now starting to make some waves, particularly in the USA. Which means that it is that much more likely to get noticed over here also. That “people” should probably have come after the first “you” rather than the second, but it will do. As a major British Newspaper has now noticed, the Euro-project is starting to look not just seriously corrupt and seriously nasty but also seriously vulnerable.

26 comments to Samizdata quote of the day

  • Jessica Boxer

    The British made a huge mistake in the 20th century. Rather than dissolving the Empire into the loose cultural cooperative that is the commonwealth, they could instead have transformed it into an economic free trade zone if they had been willing. If they had, the world, and the ex British Empire, would have been much better off.

  • Jessica Boxer

    Let me add a basic rule of diplomacy that would serve us all well: “never trust the French — they will stab you in the back, and never trust the Germans, they will stab you in the front.”

  • Jessica,

    unfortunately Imperial Britain was dominated by mercantilist thought within the political class. They could only see the subject territories as places to provide cheap resources to British industry, leading to impoverishment, rather than as places to develop, leading to general wealth. The thought of an English business having to compete with an Indian business was anathema.

    As a result, we lost the Empire because we could no longer afford it, and back home our industry had been rendered sclerotic. The “mistake” was the inevitable consequence of a century of fundamental error.

  • manuel II paleologos

    What on earth are they going to do then? I mean, leaving aside the hugely enjoyable gloating, what are their options? Can France and Germany go back to using francs and D-marks? How long would that take?

    And why does a single currency work across the USA when it doesn’t in Europe? Is it really just because there are fewer economic differences between, say, Connecticut and Mississippi than Greece and Germany?

    I’ve never really seen either of those things explained; any pointers would be welcome.

  • Manuel,

    It didn’t work all that well. For a century after the civil war the south was stuck with a currency that was overvalued for their needs, thus the enduring image of southern poverty – even if it is now changing. And that with a central government holding powers of regional redistribution that the EU is only just now starting to demand.

  • PeterT

    Labour mobility is much higher in the US than in Europe due to, I suppose, the language and culture issue.

    As I pointed out elsewhere a few days ago there is no economic reason why a monetary union should not work. But due to ‘nominal rigidities’, essentially the fact that wage and price increases are much easier to implement than cuts, even when the latter are required to restore full employment, monetary union does cause stresses that it takes backbone to live with. Hence Ireland.

    While I am not a UKIP supporter due to their anti-libertarian immigration policy (who do they think they are!) it seems not unlikely that a strong showing from UKIP may force Cameron to call a referendum.

  • And why does a single currency work across the USA

    Does it really?

  • Sorry CC, missed your comment there…And, you don’t have to go as far back as the Civil War either – the current Interesting Times are illustrative enough.

  • What is the most delicious in that video are the expressions on the faces of the usual suspects.

  • Jackthesmilingblack

    Click the “Send” key, Julian.

  • Jack Olson

    Manuel, it didn’t always work well. Under President Jackson, the USA abolished its central bank and didn’t get one back until 1913. As a result, the American economy suffered from numerous booms and busts which a well-regulated central bank would have mitigated. Meanwhile, there was considerable political strife over how to regulate the value of the currency, a power the Constitution reserves to Congress. This was the origin of political movements like the Free Silver movement and the Populist Party.

  • jdm

    a well-regulated central bank would have mitigated.

    Probably true. I dunno. It sure seems like the present central bank institution has screwed (or helped to screw) things up so badly, that it’s primary tools have been rendered useless.

    Reminds that in comparison with a rear-wheel drive car with low clearance and an automatic transmission, a big ol’ 4-wheel drive truck with a stick and snow tires is much better equipped to, um, mitigate issues of driving in snow, but if (and when) the truck does get stuck, it is really, really stuck.

  • The EU presumption and Ego needs to be challenged and burst at every opportunity.

    But but…it was agreeeeeeed, wasn’t it? Sovereignty ends at midnight, haven’t you been told?

  • Jessica Boxer

    Jack Olson wrote:
    > As a result, the American economy suffered from numerous booms and busts which a well-regulated central bank would have mitigated.

    How come this “well regulated central bank” didn’t mitigate the many booms and busts since its creation, including the uber boom and bust of 1920-1930?

    Between Jackson and Wilson there was never any boom or bust like the ones we have had since Wilson.

    > Meanwhile, there was considerable political strife over how to regulate the value of the currency, a power the Constitution reserves to Congress.

    No it doesn’t, the constitution grants congress the power to coin money. This has been grossly extrapolated to mean the power to delegate to an unaccountable body the power to print unbacked monopoly money. Which is hardly the same thing.

  • jdm

    Between Jackson and Wilson there was never any boom or bust like the ones we have had since Wilson.

    That is not true.

  • RRS

    Going back to an original query as to the operative differences of U.S. and E.U. currencies.

    In exchanges with Martin Wolf quite sometime back, I pointed out that what “stood behind” or ultimately supported the U.S. currency was the productivity of the U.S. “economy.”
    Wolf disagreed with me and took the position that the controlling factor is its Legal Tender status.

    My point has been (but is now being diminished by actions of the Fed in expanding its “balance sheet” [forms of assets held]) that the $$ was backed by holdings of obligations of U.S. business operations (discount window) and obligations of the U.S. Gov’t.; both of which depend upon producing revenues from business activities for repayments, either directly or as taxes on the revenues.

    But what has been “behind” the Euro? Anything other than the obligations of the several governments; dependent on taxation of internal revenues?

    I think we now have some indication that the legal tender status of the Euro, while a factor, is not sufficient to support what is labeled Value.

    There is a fragmentation of, and serious differentiation in the capacity for, taxation to support the Euro, whose issuer does not have the same “private” role as the FED in the U.S.

    So, there is a difference in the kinds of issuers; and, in what is “behind” the currencies.

  • John W

    The Daily Express petition(Link) merits a special post in its own right.

    Thanks, Brian, this is excellent news!!

  • RRS

    Alisa -

    Single currency in the U.S.

    First Paragraph Sec.10 Art I Constitution.

    Through taxation at 100% of face, private Bank Notes were put out of existence, the last being permitted to the National Bank of Waco, Texas (because of territorial spread of use). Thus Fed notes are now all there is. Treasury issues of Silver Certificates were withdrawn long ago; and we all know what FDR did with his promise about gold.

  • Laird

    Not quite, RRS. The section of the Constitution which you cite states, in pertinent part, “No State shall . . . coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; . . . .” This doesn’t require a single national currency; it merely prohibits the individual states from issuing their own currencies. Private companies (such as banks) could, and did, do so until that power was completely usurped by the federal government.

    Perhaps you were thinking of Article I, Section 8, Clause 5, which gives Congress the power “To coin Money, regulate the Value thereof, and of foreign Coin . . . .” However, nothing in this suggests that the federal government has any legal authority to issue fiat currency. Jessica’s statement at 04:26 PM is correct.

  • Arty

    Who the he’ll do they think they are? They’re the ‘liberals’ and ‘progressives’ from the previous post. And they’ve been busy gutting our economy, destroying our work ethic, our class system, our morals and jiggered our education system so that it reflects their beliefs instead of the physical world. They’ve flooded our countries with people, many of whom are so different the best word to describe them is ‘alien’. The worst of these think we are inferior to them and openly call for our destruction. The enormity of the betrayal and the degree to which we’ve been undermined is just starting to be revealed. Oh, and we elected them too.

  • Paul Marks

    Ian B. – what you say is partly true of the 1700′s, there was some “mercantalist” influence in British political thinking at that time (noteably Pitt the Elder).

    Some people carried on this type of thinking – such as Edward Gibbon Wakefield (his plans for New Zealand).

    However, the influence over government policy was very limited in the 19th and 20th centuries.

    The idea that people in overseas colonies should be forced to buy British goods was not followed – nor was the idea that they should be forbidden to manufacture various things, or that their exports should be taxed (all this is generally Spanish policy – rather than British).

    Indeed trade restrictions tended to go the other way – for example as early as the 1850′s colonies in Australia were putting taxes on British imports (as did Canada). Possibly this was an over reaction to the experience with the American colonies – they had been subjected to controls on their imports and taxes, so with the Australian and Canadian colonies policy went to the other extreme their assemblies (a typical British thing – setting up elected assemblies ….) were allowed to put taxes on British goods.

    Both extremes of policy were destructive of the idea of a long term empire – but then, even in Africa, many British Empire buildings (such as Lugard) thought of Empire as temporary – much longer term than it proved to be, but still temporary.

    It could be that the dream of Empire free trade never really had a chance after the colonies in Australia and Canada were allowed to put taxes on British imports – although people like Joe Chamberlain kept trying to breath life into it.

    As late as 1931 there was an effort at “Imperial Preference” but it did not really catch on (perhaps had the war not come…..).

    Many British people remained basically committed to world free trade (although the overvaluation of the Pound in 1925 made free trade a very difficult position) – although they retaliated to the American (and other) trade tax increases of 1931 with their own trade taxes in 1932.

    Perhaps the real problem was the lack of any Imperial Parliament – even for defence.

    A political rather than economic problem.

    The idea of American representatives in the House of Commons was rejected in the 1770′s (although the debate was a lot closer than a lot of people think) and that led to the break with the American colonies.

    And the idea of an Imperial Parliament (Joe Chamberlian again) was rejected in the 19th and 20th centuries – thus making the British Empire politically (as well as economically) rather an illusion (a lot of pink on the map – rather than a real enity, at least to some extent). Although, of course, the two World Wars really did the damage – they made what might have been a long term dissolution into a dissolution that took only a few decades.

  • Paul Marks

    The European Union:

    More like the Spanish Empire than the British.

    A vast web of detailed controls on every aspect of life, and so on.

    Actually for a brief period the British Empire was getting like that – “new thinking” (not that new – the Spanish and Romans had done it, and Dalhousie had gone too far down the “development” road in India in the early 19th century, well intentioned but without understanding) came in the 1930′s (at least in the colonies that did not have elected assemblies) with “marketing boards” and so on

    After World War II (with Atlee) it became much worse – with people like Andrew Cohen setting themsleves up like Plato Guardians, in places like Uganda.

    They meant well (they really though that all this statism would be good for the locals – it was not an exploitation effort, and lands that got independence, such as India, followed the same policies of folly, only more so), but the whole thing was crackbrained.

    However, some colonies (noteably) Hong Kong managed to dodge the bullet of “reform”.

    As for the E.U. – the whole thing is demented, a Tower of Babal.

    The international elite (as can be seen from the academics and the estabishment media – such as the Economist magazine and the Financial Times) love it – not because they have a deep love of European culture (actually they place little value on “Europe” – people like Timothy Garton Ash would sell the whole place out to the forces of Islam in a heatbeat) but because they see it as a stepping stone to the “world community” they crave.

    This world community would be sort of like Francis Bacon “New Atlantis” accept on a globel scale – a regime ruled by an “educated” elite (with neither indiviudal freedom, at least not in anything the elite cared about, or any real, as opposed to formal, “democracy”), all aspects of life controlled by the elite (the wise – the guardians) for the benefit of the people. Not via public excutions and so on – but via regulations and propaganda.

    Rather like Cas Susteen’s view of government (“Nudge” – required reading for high officials and ministers in both the American and British, Mr Cameron loves the vile work, governments not just in the E.U.).

    “But this is insane Paul” – errr yes it is, but it is also the truth.

    In the face of all this such things as German (and other bankers) trying to cover their backsides by getting an Irish baillout looks rather innocent in comparison.

    As Ian B. is fond of pointing out – the British and American political class is just as sick as any in Europe. The European political classes are committed to demented notions such as the European Union – but so is the British (and the American) one.

  • RRS

    Laird -

    Precisely the point I made about how the former forms of private bank notes as currency were taxed out of existence (and still are).

    Much as I deplore the effects of “Fiat” currencies (which are just about all there are), I think the legal precedent in the Constitution “To borrow Money on the credit of the United States,” authorizes the issuances of silver certificates, gold certificates (which are not coinage), treasury notes of any duration – with or without specifiction as to mode of repayment.

    The exclusive power to regulate the “Value” of Money creates inter alia the force of nationwide Legal Tender laws, in addition to any rules of Tender under State laws.

    Of course, the actual “currencies” afloat in daily transactions have largely been forms of private credits, such as “checks” on demand accounts, now widely replaced by credit cards, electronic balance transfers, in which the formal “Legal Tender” is simply the unit of account.

    So, daily trade does use a large amount of “private currency” in the form of “private credits.”

    Given your background, none of this is news to you; just an explication of my previous expression.