Corporate industrialists are frequently not keen on free markets. They are fond of order, safety, and “fairness” or “a level playing-field” – which means everybody doing things the same way they do. They like a managed world, because management is what they do. So no good comes of appointing them as regulators. Technocracy joins with bureaucracy.
Here is Adair Turner interviewed by The Guardian (perhaps in itself a significant choice of forum):
There will be more people asking more questions and getting more information than we were getting before… . There is no doubt the touch will be heavier. We have to make sure it is intelligent and focused on where the risks really are.
Translation: “We have to destroy The City in order to save it.” This is ‘risk’ as understood by a safety fanatic – one-sided, and totally unrelated to choice or to return.
We will have more people than before looking at the high-impact, systemically important firms with major knock-on effects than we did before. We will pay more than necessary to attract the correct quality of people from outside.
More than necessary? And who will pay for such artificial premiums? Whoever the FSA decides to tax or fine. It is a predatory organisation: a Self-Financing Regulatory Agency. So it wil have to find more occasions to punish and to license in order to fund more intervention, licensing and punishment.
There is no chance of a 1929-33 Depression. We know the lessons and we know how to stop it happening again.
A prime lesson of the Great Depression for most commentators has been that shutting down free trade in goods in order to protect industrial markets made the depression deeper and longer than anyone could have imagined. It stopped trade and industry recovering from the shock. That our Government is looking to blame foreign investors for our problems and is taking measures to frighten them off, and that Lord Adair is advocating, as the cure for a financial market crash, tight supervision of the surviving free markets in finance and commercial instruments, suggests the lessons have been rather badly understood. They risk stopping the financial markets recovering from the shock.
Adair Turner trained at McKinzey. He has spent the last 15 years of his life acting as a consultant to the likes of Merrill Lynch (which suffered huge losses and has been taken over), was director general of those corporatists at the CBI, has been asked by the UK government to recommend fairly statist ideas for private pensions, and as you say, is now in charge of regulation. I actually know him. As such folk go he is one of the nicest of men, in fact, very bright, but as Guy says, he is fundamentally a technocrat. He is “Davos Man”: that sort of person who seamlessly shifts between government, civil service, NGOs and corporations that closely resemble government.
The kind of discussion that goes on about the current crisis in blogs like this is totally off the radar of these people. They are still hankering for the days immediately after WW2 when lots of tweedy Cambridge dons and “Brains Trust” bureaucrats from Harvard and Yale decided to create things like Bretton Woods agreements and run the world.
I have long noticed that the big companies like the EU, they can use it to remove the smaller competition. It is not surprising that he wants more regulation, this despit the fact that regulation caused a lot of the recent chaos, the FSA springs to mind. There was an article on the “EU Referendum” site a day or so ago which dealt with the philosophy of regulation, arguing that it changed from a common sense system to a purely rule governed system with dire effects.
You don’t think that they want a depression? A chance to finish off the free market for generations? Like leftists everywhere, Naomi Klein is projecting.
You don’t think that they want a depression?
No I don’t. I think they have no comprehension of what they are doing. Because lefties have no intuition of commerce at all; and corporatists tend to think that what is good for established corporations is good for everyone – that all that is required is sufficient ‘infrastructure’ and ‘investment’ to do massively more of the same.
I have long noticed that the big companies like the EU, they can use it to remove the smaller competition.
Not remove, prevent. Big companies are very alert to barriers to entry, and collective input into regulation is a more effective substitute for the cartels that are now notionally banned. Cf non-tarriff barriers to trade.
No one with power or influence has learned any right lessons.
What caused the bust?
Errrr “greed and corruption” they might as well say “demons” or, Lord Keynes, “animal spirits”. From the Nobel Prize winning Paul Krugman to a hack media creature (accept that Prof Krugman is a hack media creature of course) they have not the slightest idea of even the basic principles of economics.
They have no conception that a credit money boom must end in a bust – even though it has been written about since the days of David Hume (indeed before).
And why was (say) the great bust of 1921 not followed by a long lasting slump whereas the bust of 1929 was?
They do not know that either.
To them President Harding’s policy of cutting government spending (so he could cut taxes and still balance the budget) is alien. Harding is just “Teapot Dome” and that is all they know.
As for allowing the market to clear by letting prices and WAGES fall – that goes everything they teach.
President Herbert “The Forgotten Progressive” did everything to prevent wages falling after the bust of 1929 – and was astonished when unemployment exploded.
The policy of the 1930’s both under Hoover and Roosevelt was more government – more regulations (especially pro union regulations), more government spending and more taxes.
Not just taxes on imports but on the domestic rich also (Hoover did that long before F.D.R.).
And now?
More government spending, more taxes (soon), and more regulations – especially pro union regulations (for example an end to the secret ballot).
Yes our rulers (in America, Britain and elsewhere) have learnt one lesson from the Great Depression.
How to repeat it.
No one with power or influence has learned any right lessons.
What caused the bust?
Errrr “greed and corruption” they might as well say “demons” or, Lord Keynes, “animal spirits”. From the Nobel Prize winning Paul Krugman to a hack media creature (accept that Prof Krugman is a hack media creature of course) they have not the slightest idea of even the basic principles of economics.
They have no conception that a credit money boom must end in a bust – even though it has been written about since the days of David Hume (indeed before).
And why was (say) the great bust of 1921 not followed by a long lasting slump whereas the bust of 1929 was?
They do not know that either.
To them President Harding’s policy of cutting government spending (so he could cut taxes and still balance the budget) is alien. Harding is just “Teapot Dome” and that is all they know.
As for allowing the market to clear by letting prices and WAGES fall – that goes everything they teach.
President Herbert “The Forgotten Progressive” did everything to prevent wages falling after the bust of 1929 – and was astonished when unemployment exploded.
The policy of the 1930’s both under Hoover and Roosevelt was more government – more regulations (especially pro union regulations), more government spending and more taxes.
Not just taxes on imports but on the domestic rich also (Hoover did that long before F.D.R.).
And now?
More government spending, more taxes (soon), and more regulations – especially pro union regulations (for example an end to the secret ballot).
Yes our rulers (in America, Britain and elsewhere) have learnt one lesson from the Great Depression.
How to repeat it.