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Mount Sorrel

There’s been an awful lot of this Brexit thing recently so – in the way of light relief – I’m going to talk about the First World War.

I think just about everyone has heard of Passchendaele which was fought in 1917. The better informed will know that its official title was the Third Battle of Ypres. Which makes this headline (from 12 June 1916) somewhat premature:

The Times 12 June 1916 p5

The Times 12 June 1916 p5

What they are referring to is what we now know – or more accurately: don’t know – as the Battle of Mount Sorrel. There are eerie parallels with the Somme. The attacker unleashed a huge artillery bombardment:

Artillery fire is not now used merely to demoralize the enemy or break up formations. It is used to annihilate, to obliterate every form of defensive work, and make life itself impossible on every yard of the ground attacked. I will not labour the point for the benefit of the makers of munitions at home.

He exploded mines. He came on in waves. He was mown down in his thousands:

When the infantry advanced they came, not charging, but with full kit and in regular formation, as if to occupy untenanted ground. They paid for it.

Only one difference: the attacker was German.

And how did the defender (mainly Canadian) respond to this? By organising immediate counter-attacks just as the Germans would on the Somme. At first they didn’t work. However, when they decided to sit down and do some planning – Arthur Currie take a bow – they succeeded.

Did I say one difference? Actually there were two. The Germans achieved surprise, to the extent that at the very moment they attacked there were two Canadian generals in the front line, there because “Oh it’s a quiet sector and we’re not expecting anything to happen.” One was killed, the other captured.

There’s also this:

Long after the issues of minor engagements in this war are forgotten, and when everybody has ceased to care whether at any moment we gained or lost a hundred yards or ground or a mile of trench, the memory of how the Canadians fought against hopeless odds near Hooge will be remembered, and Canada and the Empire will be proud, for generations to come, of the men whose deeds I have mentioned and of their no less gallant comrades.

Alas no. The war was too big for that.

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Brexit will make the UK like Guernsey – So says a French pol

Of all the dire threats, this from the French Economy Minister (there is one? an economy I mean) is the most chilling, since it reminds me of how far we have fallen.

Leaving the European Union would make the UK as significant as Guernsey, France’s economy minister has said

So the rate of income tax would be a standard 20% and there would be no VAT and no Capital Gains or Inheritance Tax? That’s some good deal for being insignificant.

Of course, this 20% tax rate is an anomaly in Guernsey, it was introduced as 4 shillings in the pound (20 shillings per pound/livre) in WW2. Let’s look at some of the measures the Nazis introduced in the occupied Channel Islands.

On arrival in the islands, the Germans issued proclamations imposing new laws on the resident islanders. As time progressed, additional laws restricting rights were posted and had to be obeyed. The restrictions included:

Confiscation of:

weapons (1940)
boats (1940)
radios (1940) then (1942)
motor vehicles (forced sale) (1940)
cameras (1942)
fuel
houses
furniture

Restrictions on:

fishing (1940)
drinking spirits (1940)
exporting goods (1940)
changing prices of goods (1940)
patriotic songs and signs (1940)
more than three people meeting together (1940)
access to beaches
fuel
freedom of speech
access to medicines
some clubs and associations.

Changes to:

drive on right of roads (1941)
rations (1943, 44 & 45)
clocks to German time (1940)

Forced to accept:

curfew (1940)
exchange rate to Reichsmarks (1940)
census (1940)
identity cards (1941)
growing vegetables
food rationing (1940)
increase in income tax to 4/- (1940)
lodgers billeted
German language in schools
Cycling in single file (1941)
work from Germans
censorship

Well we have a long way to fall before that state of affairs, and cycling in double file is by no means discouraged bar some circumstances by the Highway Code, presumably in the hope of causing more accidents.

So let freedom reign, even though the sky (and tax rates) may fall.

And today, I couldn’t help noticing the timing of these sequential adverts on a hoarding in Newcastle.
Remain

and next this:
Greece

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Time for a bit of sunshine

And now a word from Simon Gibbs, who will soon have his own by-line on Samizdata.

We’re nearing the date of the EU referendum we’re having in this part of the world, and a great many people are fed up of being lectured to, or frightened, or lied to. Understandably, people are beginning to have a moan about this atmosphere of negativity – but this just adds to the gloom.

To change the mood you have to go out of your way to do something positive – set appropriately in context but nevertheless positive. It takes effort to think of what positive would look like when the subject is so dangerous and horrid. Ayumi, one of my colleagues at Libertarian Home (which is now very much a joint effort) had an idea about how to do it. We backed her to the hilt.

So here, thanks to Ayumi and to Devika and Richard and little James and teeny tiny Abigail (and dozens of people whose names I quickly lost track of) is a little bit of positivity. Making this was seriously hard work, but it was really very satisfying.

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Samizdata quote of the day

When the government (i.e. Mr Cameron and Mr Osborne – they are the government) supported the Labour Party continuing to get automatic payments from trade union members (i.e. no need to “opt in”) and supported eleven more years of the BBC tax – I knew the “fix was in”.

Now we hear that Baroness W. has “left Leave” – the lady was never a supporter of the Independence of this country. Actually Baroness W. is a typical member of the “chattering classes” – endlessly going on about “discrimination against Muslims” and “the politics of hate” (look in the mirror dear lady – you will see someone who practices the “politics of hate” all the time). The idea that this lady was ever really in favour of getting out of the E.U. is absurd.

As for the chattering classes in general – they are wrong about just about everything (I say “just about” as even a stopped clock is correct twice a day). Their ignorance is only matched by their arrogance.

– Paul Marks

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It is the scolding I cannot stand

The tone of an argument should not matter, I like to think, as much as the quality of the argument itself. I have been reading Charles Moore’s multi-book biography of Margaret Thatcher (he is working on volume three) and I am reminded of just how much a segment of the “chattering class” loathed her as much for what she sounded and looked like as what she said. To some extent, we try to rise above all this and point out the irrationality of disliking a view about X because of who is saying it, and so forth. Maggie was not the kind of person to pour a lot of oil on troubled waters (she was, however, more willing to temporize and compromise in certain cases than the standard narrative suggests). The accent, the emphasis, the Methodist-inspired approach, that “tone”, set a certain kind of person off the deep end. (To some extent, having wankers such as playwright Harold Pinter as your enemy is something to be quite proud of.) But even those who broadly agreed with a lot of what Maggie did and said might have to admit that it did put some quite otherwise rational people off.

And this leads me, to, yes, the Brexit vote this week. I cannot help but think that the very fact of Remainers often being the likes of the IMF, or Very Grand Economists, etc, is like the sensation for many of chalk scratching down a blackboard (I am giving my age away). When a EU Commissioner like Juncker attacks Brexiters, you can imagine how well, or badly, this goes down. And on the some of the interactions I have had on Facebook, much the same effect applies. I have been told, for instance, that the UK electorate has no excuse for whining about the undemocratic nature of the EU because British voters, by and large, don’t vote for MEPs and that the EU Parliament is chosen via proportional representation and therefore a fine and worthy body, and stop whining. The fact that MEPs cannot initiate, or repeal, legislation of any serious nature is ignored (MEPs do have blocking powers). And there have been a few outpourings of rage from a few of my acquaintances that a referendum is happening at all. What such folk don’t seem to realise is that such attitudes only make those of a EUsceptic strain even more annoyed, and more likely to vote Leave out of a “that’ll show you arrogant bastards” tone. In much the same that however logical a position of Mrs Thatcher in her heyday might have been, people, given the cussedness of human nature, disagreed.

The tone does matter, in other words. And although some of the vibe coming out of the Leave side is unsavory and foolish, the Remain side’s collective impersonation of 18th Century French aristocrats (just before the Bastille fell) is, in my view, even worse. It should not always matter, but it does.

 

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The one-world government logic of Remain

One of the arguments of those wishing the UK to stay in the European Union is that if the UK decides to leave, it will still need to accept most, if not all, EU laws if the UK wants to continue to trade and interact with this bloc. (This is the position, for example, of Norway and Switzerland, or so the Remainers say.) It is all about keeping British “influence”.

The Remainers often don’t appear to realise where the logic of their argument leads. Surely it leads to the case for World government. Let’s look Westward for a moment. Consider the recent example of how the US uses a “worldwide system” of tax. Any American living abroad has to file an annual return to the Internal Revenue Service. The US recently enacted a thumpingly controversial and intrusive piece of legislation called the Foreign Account Taxation Compliance Act, or FATCA. This means any foreign financial institution must take all necessary steps to establish whether a client is American or not or, if it interacts with the US. If no such steps are taken, the FFI must pay a 30 per cent withholding tax. It means that the IRS and other branches of US government have been able to enforce a massive piece of extra-territorial legislation on the rest of the world. Many Americans can’t get access to accounts when they live abroad. The situation is a shambles. Do I hear Remain-type people arguing that we should join the US in political union to try and sort this out and “influence” the US? Of course not. In another case, that of the football organisation FIFA, it was the use of dollar-based transactions by the alleged crooks at FIFA that led to the US Department of Justice, rather than the Swiss or others, sending in the investigators to Zurich. I haven’t heard of Swiss people arguing that Switzerland should become part of the US so that the Swiss can gain “influence” in Washington over such powers.

In other words, countries that have the economic muscle to create a situation where dealing with it entails certain extensions of judicial power can have influence way beyond their borders and aren’t likely to want to have that power diluted by sharing it with others. The US is, despite the best efforts of its political class, the world’s largest economy, and likely to remain so for a while. Ironically, the US hasn’t actually signed up to many of the very cross-border tax compliance moves that it insists upon when applied in other lands. Rank hypocrisy, you might say. But what this also reveals is that when you hear a lot of fine words about “gaining influence”, what it really boils down to is brute economic wealth and power. China, for example, owns a lot of US Treasury debt, as do a number of other Asian jurisdictions, and I suspect that explains why the US hasn’t launched many noisy campaigns about evil expat “tax evaders” in that region. This isn’t edifying, but that’s reality.

The “influence” that the UK may have in the corridors of Brussels comes, if it exists at all, from the relative prosperity and hence economic power of the UK, rather than on anything else.

In fact, to gain the “influence” that involves going along with the Brussels machine as the Remainers see it requires the UK to operate under the Qualified Majority Voting system of the EU. So, on key issues, such as a proposed EU transaction tax on banks, the UK is likely to be outvoted, suffering damage to a key industry (the City). The UK is most likely to object to EU directives where the UK sees a key interest at risk, and by definition, most likely to be in a minority when a QMV process occurs. The “influence” is diluted, often in ways that hurt real UK interests. QMV may seem to benefit the larger countries, but in certain respects it means that the UK can lose key votes on issues that really matter, such as to financial services.

Competition between jurisdictions, with freedom, crucially, of citizens to be able to migrate and with open capital flows, represents arguably the best check on power that we have. A looser Europe, enjoying free trade and free capital flows, but without such centralised political power, is arguably the best outcome from a liberal (in the right sense) use of the word. World government is a deluded dream, but I fear the Remain camp is not willing to face up to where the logic of its argument is leading.

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Jeremy Corbyn’s heart really is not in this Remain business, is it?

Jeremy Corbyn admits Britain cannot put a ceiling on immigration while in the EU

Asked on BBC One’s Andrew Marr show if there was any kind of upper limit to the numbers coming into Britain, he said: “I don’t think you can have one while you have a free movement of labour – and I think the free movement of labour means that you have to balance the economy so you have to improve living standards and conditions.

“And so that means the EU’s appalling treatment of Greece… that is a problem. If you deliberately lower living standards and increase poverty in certain countries in south-east or eastern Europe then you’re bound to have a flow of people looking for somewhere else to go.”

I do not know what “balance the economy” means and I doubt Mr Corbyn does either. But at least he is not a weasel like Cameron. In a TV appearance allegedly aimed at persuading us to vote to stay in the European Union he resignedly says that the main claim of the other side regarding the most hotly contested issue, immigration, is correct. Then he says that the EU’s treatment of one of its member states is “appalling” and deliberately aimed at lowering living standards. Why he wants to stay in a union that wants to impoverish people is a mystery… or it would be, if he did.

My sunken hopes rise a little, given added lift by the fact that the dear old Guardian had this story on the front page for about a minute and a half before someone realised. It now can only be found if you already know it is there. For its part the BBC has clipped the key words off the beginning of the relevant clip from its own programme. Mr Corbyn answered a straightforward question in a straightforward fashion. That media organizations in favour of Remain seek to hide this rather than boast of it speaks volumes.

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Quick arguments for voting Leave

Why do you want to leave the EU? Because I think it’s vital that you are able to vote out a government. The EU has a façade of democracy but do you ever remember it making a difference who you voted for in EU elections?

Are you hostile to foreigners? You can be friends with someone without wanting to live in the same house as them. Actually many people in Europe are hoping for Brexit so that their countries can be encouraged to become independent as well.

The EU has prevented war. No, that was NATO. The EU’s arrogance has increased tensions. A few years back the scars of WWII were almost healed. Now look at the hostility between Greece and Germany.

Farage / Boris / Gove will do awful things. Farage isn’t even an MP. The Tories will still be in government if we vote Leave. The difference is that they can be voted out at the next election, unlike the EU.

Economic experts say “Remain”. Many of the same ones said that we would be left isolated if we didn’t join the Euro. The EU’s own experts said the Euro was a great idea. Now look at Greece with 50% youth unemployment. The best economic experts in the European Union were spectacularly wrong. Stay in the EU, and we will be bailing out their next mistake.

We can reform the EU from within. There is a saying, “The definition of insanity is to keep doing the same things and expect a different result.” How well did we do at reform for the last 40 years? How well did Cameron do when he negotiated with Angela Merkel even with the threat of Brexit? Once we vote Remain we will have demonstrated that when it comes down to it, we will back down.

The Leave campaign has no plan for what to do next. Since a vote for Leave will make it start mattering again who wins the next UK election, we can’t say exactly what the plan is because that depends on what the British people vote for. In contrast we can say what the plan is if we remain: “Ever closer union”.

*

I have not mentioned immigration because this is a post about quick arguments and I cannot think how to edit my own rather complicated views down. I suppose I could remind people that opposing the EU does not have to be about immigrants.

What are your quick arguments for wanting to leave the EU? Or for staying?

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Drug legalization is becoming an acceptable view among the elite

Amid the blanket news coverage of the EU referendum and the murder of Jo Cox, it went almost unnoticed that a major report from the Royal Society for Public Health (RSPH) and the Faculty of Public Health (FPH) called for drug decriminalization in the UK.

The Times, still seen as the Voice of the Establishment, came out in support:

Breaking Good

Would it ever make sense to jail a chain-smoker for smoking or an alcoholic for touching drink? On the basis that the answer is no, the Royal Society for Public Health (RSPH) is urging the government to decriminalise the personal possession and use of all illegal drugs. This is radical advice, but also sound. Ministers should give it serious consideration.

Not that long ago Kofi Annan, the former UN secretary-general, said it was time to legalize drugs. I hope this trend continues.

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Leaving the EU isn’t the end of the City as we know it

I have spent the last few days in Geneva – I travel to Switzerland regularly as part of my job – and needless to say, the prospect of the UK leaving the European Union comes up a lot in the Alpine state. For good reason. Switzerland is not in the European Union (that country has more sense), is unlikely ever to want to do so, and has a broadly amicable relationship with its neighbours, apart from when they aggressively seek to break down Swiss bank secrecy laws. (Such laws are, for cross-border purposes, no longer effective, although within Switzerland, the laws remain on the statute book and there are no plans as far as I know for lawmakers in Berne to repeal them.) By and large, Switzerland’s financial services industry is still in good health, although like many other centres, onshore as well as offshore, has had to contend with mass of regulation, some of it home-grown. (Swiss banks operate under unusually severe capital adequacy rules and the country now has negative interest rates, which hits banks’ margins.)

The Swiss trip got me thinking about London’s position in the EU referendum. One regular argument you might read about in the financial pages of pro-EU papers such as the Financial Times, for example, is of how if Britain quits, this will hurt London’s financial sector (aka “The City”), because we will no longer be able to “passport” financial services run from London across the whole of the EU. This seems to be a greatly exaggerated worry. For example, in many cases with the fund management industry, fund structures known as UCITS (the acronym is for a long set of French words), which can be bought and sold across the EU – and beyond – and issued in different currency share classes, are typically registered in Luxembourg and Dublin. There are now Chinese yuan share classes in UCITS funds, and China is not, bless its cotton socks, in the EU. Many of the portfolios held in these pan-European structures are managed by investment whizzes in London, and indeed, Zurich, and Geneva, or Hong Kong. So it seems unlikely, to pick this one example, that leaving the EU means disaster. If the UK leaves the EU, then some non-EU member state banks, wealth managers and insurers might have to set up onshore, representative offices in the EU, which is irksome, but hardly seismic. Similarly, the European Union directive affecting hedge funds and private equity, called AIFMD, applies to the European Union, but non-EU jurisdictions such as Jersey and Guernsey have acquired the ability to be treated as “equivalent” for the purpose of this directive.

And that leads to a broader point about rules, treaties and standards. To trade, transact and interact, one doesn’t need to have centralised, top-down legal rules and a single political entity, such as the EU, but to have – and the is the crucial bit – mutual recognition of another’s standards. If the the UK quits the EU, then German carmakers will need to recognise and honour UK motor manufacture rules (which would be sensible for Germany to do, given it is a net exporter to the UK) and the UK would have to return the favour. And so on and so on. Australia has to acknowledge our rules, and we theirs. We see this sort of mutual recognition in all fields of life. Over time, of course, a wider set of rules can be adopted, rather as languages and standards around computer software do.

To trade with people living and working in the EU, it is not necessary to be married to an undemocratic, clunky structure in Brussels. Ending that misconception will not just help win the case for UK exit, it might also encourage people to think more clearly about the very structures of power that we assume are necessary for economic activity to happen. So regardless of what happens next week, I hope it might galvanise thinking about proper authority, and the role of transnational organisations.

On some specific issues around trade, the City, and so forth, this article by Conservative MP and former Cabinet minister, Peter Lilley, is simply excellent. The Adam Smith Institute has a good piece on the classical liberal case for leave.

There may be some specific consequences that are adverse – but within certain limits. For example, take those strange creatures, “non-doms” – persons who live for a period in the UK and enjoy freedom from UK tax on their worldwide income but who have to pay a levy to enjoy this status. Some of these non-doms live in the UK because it also gives them the freedom to roam around the EU. And there are people buying “investment visas” (a sort of market for passports) who want to get a British visa not because of our marvellous weather, but to roam around the EU. They may choose to get a “golden visa” in Spain or Malta instead.

But in the broad scheme of things, losing money from rich overseas investors using the UK as an entrepot doesn’t seem such a massive blow, given the overall balance. If we leave the EU, the City will not have the impost of a pan-European transaction tax (aka “Tobin tax”) on financial transactions that hits London disproportionately hard and which was imposed by qualified majority rule in the EU. The UK financial services sector might be spared the horrors of a massive lump of “investor protection” (sarcasm alert!) regulation due to hit the market, called MiFID II, or at the very least we will be able to haggle around whether we need to respect all of it to sell financial services into the EU. Some of this regulatory crap will still be a part of our lives, but there will be a better chance of getting changes to how the UK is affected via the democratic process, however imperfect that is.

Given how many treaties and transnational pacts are decided at a global, rather than purely European, level, it also worth noting that in or out of the EU, a good deal of what goes on will not change all that much. But one big benefit for me is that however foolish UK politicians continue to be, and however onerous certain rules are, UK lawmakers will not be able to use EU membership as a handy excuse for something they want to do anyway, such as “Dear constituent, I agree this rule is mad but we cannot do anything because it is in EU law number xxxxxx.” Instead, our elected representatives will need to advocate new laws, or advocate repealing laws, by appealing to the merits of a case. It might also improve the calibre of people who choose to go into UK politics in the first place.

I am voting Leave.

 

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An un-convent-ional hiding place in Argentina for cash and a gun

Try as I might, I cannot but chuckle at news coming out of Argentina, of a lawmaker, Señor Lopez, from the Kirchnerite movement in Argentina being arrested in the alleged circumstances of hiding between 5-8 millions of dollars worth of cash and a gun in a convent.

An Argentine former secretary of Public Works with the Cristina Fernandez administration, Jose Lopez, and currently a member of the Mercosur parliament, was arrested on Tuesday in the Buenos Aires province locality of General Rodríguez while he was trying to hide bags full of money and an automatic gun in the garden of a convent.

The reason for the formal arrest was possession of a war weapon, a Sig Saguer rifle, loaded with 25 cartridges.

Lopez was arrested with six bags and a suitcase stashed with dollars, Euros, Yuan and Qatar currency as well as very expensive watches (Rolex, Omega). “We found 160 bundles of cash, 108 of dollars, and some of them still thermo-sealed with the stamps from China’s central bank”, revealed Cristian Ritondo, head of Buenos Aires province security. Ritondo said Lopez tried to bribe the police officers and went into shock when they did not accept, and later suffered a deep depression.

At first he told the officers he was planning to donate the funds to the nuns monastery. In effect one of the nuns interviewed said that Lopez had visited them the previous day and “he was quite crazy”, saying he had stolen the money which was to help the monastery, “but today when he turned up and started dumping the bags, police arrested him. I told the officers he was a good man, he came once a year to visit us and would help us with donations of coffee and tea”

Corruption in Argentina is, at least, like a certain beverage, reassuringly expensive. The comments are quite good, especially the one about the nuns needing a good Rolex to time their prayers.

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Jo Cox, RIP

This morning I was joking about how gloriously dotty yet reassuring yesterday’s “naval battle” between rival Leave and Remain flotillas on the Thames outside the Houses of Parliament was. This afternoon I learned that one of those on the Remain boat, Jo Cox, Labour MP for Batley and Spen, was murdered just outside her constituency surgery. She leaves behind a husband and two young children.

I am too depressed to make a post with links. There is no shortage of commentary and speculation on the internet. A man has been arrested and no other suspects are being sought.

May she rest in peace.

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