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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Douglas Carswell, who is still merrily blogging away despite the happy intrusion of fatherhood, wonders whether the days of the spin doctor might be starting to fade. He says the internet is seriously starting to cut into the middleman of the spin doctor. I am not so sure about that – presumably, spinners will use the internet to try and prolong their role. But there is no doubt that spin doctors, rather like old fashioned advertisers, are seeing their roles changed, and in often uncomfortable ways, by the Internet. Look at how the traditional “gate keepers” of the media castle have been sidelined by outlets such as YouTube, for instance.
Talking of advertising, I just love the series, Mad Men.
Right, nuts to the G20. Here is a fine appreciation of the late Dusty Springfield, one of the world’s greatest singers, who would have been 70 today.
Quick Friday quiz: name your favourite singers (male and female, both contemporary and classical).
Let it not be said that the politicians gathering to celebrate an orgy (er, steady on, Ed) of Keynesian delinqency and transnational socialism are letting this current financial crisis go to waste. The G20 countries have agreed to a crackdown on those pestilential things, tax havens. I have defended them before and will do so again. What we are seeing is a determined effort to create a global tax cartel. Cartels, unless backed by brute force, tend to break down eventually. The G20 are making lots of blood-curdling threats about sanctions and so forth. What is Germany or Italy going to do – invade Switzerland? Good luck with that, gentlemen.
At the root of the hatred of tax havens is a hatred of freedom, pure and simple. If you believe a democratically elected government, say, can seize the wealth of a portion of its citizens, then you will believe that that minority can be more or less robbed, held hostage and prevented from going abroad. Socialists such as Richard Murphy believe that if 51 per cent of my fellow citizens want to help themselves to the contents of my bank account, then I am being “undemocratic” and a bad citizen if I choose to park my cash in the Caymans or wherever. Well, why not go the whole distance and require anyone who has an offshore bank account either to close it or be forced to get an exit visa if they wish to do so? We may be already reaching that point. If, on the other hand, you believe people are entitled to their property regardless of what their fellow electors think, then tax havens – “haven” is a place of safety, remember- are an important escape route and bulwark against looters. When politicians want to shut down places of safety in a time of crisis, it is well to be cynical about the motives of those involved. Especially if they happen to be such characters as Gordon Brown or Barack Obama.
The sheer cynicsm of it all is breathtaking. Whatever the cause of the current financial crisis, I think it is pretty fair to say that it did not originate in tax havens. Switzerland, in fact, has been hammered by the crisis; its biggest wealth manager, UBS, has lost an estimated $49 billion in write-downs connected to the US sub-prime disaster. The $50 billion Ponzi scheme fraud of Bernard Madoff happened onshore, right under the noses of the SEC, rather than in some far-flung island in the South Pacific. The huge losses incurred by banks have been nothing whatever to do with so-called “tax leakage”. And in the US, there is already a tax haven, known as the state of Delaware. And the UK has been – well until recently – a tax haven on certain definitions. Ditto places such as Ireland or even Belgium.
Rant over. Thanks for your patience.
The blogger at Devil’s Kitchen has been doing fine work, as have others, in exposing “fake charities” – those organisations that while claiming to be autonomous, voluntary organisations, receive a substantial amount of funding from the taxpayer via grants and as a result, frequently take positions in terms of public policy that, unsurprisingly, fit in with the fashionable bromides of transnational progressivism, health fascism and environmentalism. The Fake Charities website does sterling work in listing those organisations that should be closely watched. The site is a great resource and well worth bookmarking.
I do not give a voluntary penny to any of them. An old girlfriend of mine used to work as a fund-raiser for the NSPCC. She told me that it was a bit like working for the government. The tragedy of all this is that charities, like other once-autonomous institutions drawn into the arms of the state, are valuable parts of a civil society. Opponents of liberalism will sometimes claim that we are “atomists” who have no interest in co-operative ventures. That is mischievious nonsense: a libertarian is in favour of, or at least tolerates, all forms of voluntary interaction and charitable, philanthropic activity is absolutely vital to this. Without a Welfare State to care for the inevitable casualties of life, such organisations are obviously important. In framing the case for moving towards a truly free society rather than the mess we have now, it is in fact particularly important to highlight the examples of where philanthropy, as properly understood, has made a positive difference to people’s lives. It is all of a piece with trying to set out positive, constructive examples of what a free society actually can look like, rather than just moaning about the situation we now find ourselves in.
“The Federal Reserve…along with other central banks, is a legal counterfeiter.”
Paul Kasriel, economist at Northern Trust, the US bank. He is in favour of all this “quantitative easing”, by the way, but he is far too honest an economist not to identify what that euphemism actually stands for. And he predicts that it certainly will trigger inflation later on.
My post below on the experience of Scottish banking before 1845 – when the rules were changed by the-then UK government of Robert Peel – elicited a lot of great comments. It turns out that the Lawrence White paper that I mentioned had been savaged fairly thoroughly by Murray Rothbard. Rothbard’s paper is immensely detailed and shows what a thorough economic historian Rothbard was. Briefly put, he says that White has misinterpreted the Scottish banking experience by not distinguishing between free banks that operated 100 per cent reserve requirements linked to gold, and those that were simply free banks without such specie requirements. (Rothbard was an advocate of such metal-backed money). This inevitably raises that old friend of ours, fractional reserve banking, which Rothbard described as essentially a fraud. Now in trying to make up my mind on FRB, it seems to me that so long as the holder of bank notes is made aware that the note has been issued by an FRB, rather than a 100-percent reserves one, then what is the problem? It is a bit like the argument about limited liability corporations that vex some libertarians such as Sean Gabb of the Libertarian Alliance. Surely, if I transact with a LL company and knowingly do so, then such consent is what counts. LL companies could, conceivably, exist even without special government legislation, although they might not last as long as LL firms do now. (Here is a rejoinder to Gabb on LL). Same with FRB: if there is commercial deposit insurance and customers know the score, I fail to see why the existence of fractional banking should necessarily lead to disaster. Or is there something I am missing in this debate?
At first blush, some might consider all this to be a bit arcane. It is anything but. Explaining how banks work now, and how they can be made to work much better as a result of competition and basic rules, will go some way, I hope, to destroying misconceptions. Such misunderstandings that exist at the moment only play into the hands of those who want to bring the free market order down. Such as those folk protesting at the G20 summit in London today. I will be in the area on business. I might take some photos and post them up later if they are any good.
Update: I was in the Docklands area. Nothing much going on while I was there.
Those good people at the Institute of Economic Affairs have put this fine study of free banking, as it existed in Scotland until the middle of the 19th Century, back into print. It is examined in great detail, with lots of figures and examples of how these banks operated, how many bank failures there were, and so forth. There are a few equations but nothing that should faze all but the most mathematically challenged. Historical scholarship of this detail and depth is vital. It is as vital, in fact, as those studies that showed that in Victorian Britain, before the Welfare State came along, Britain already had an extensive network of mutual aid societies. Without this historical memory, it becomes easier for politicians to sell the lie that the solution to X or Y lies in ever bigger government.
Readers can either read the pdf for free or, if it is tough on the eyesight, as it is for me, readers can get a publication-on-demand sorted out for just £10.
I do not suggest that free banking is necessarily the panacea for the current troubles. But it seems to me that a point lost on the anti-globalistas as well as many of the other critics of the current financial system is that they fail to grasp how banking, as it is practised in most instances today, has deviated from a genuine example of laissez faire capitalism. What we need is sound money, administered by banks operating under the constant blast of competition in proving the soundness of that money. When you think about it, it is not very hard to grasp the idea, is it?
The President of France is threatening to walk out of the G20 gabfest this week if the countries cannot agree on stricter regulation of the world’s financial markets. Of course, Mr Sarkozy buys into the fantasy that what has happened shows the failure of “unregulated capitalism”. If only he would walk out of the conference, which is likely to involve further layers of largely useless and counter-productive rules and meaningless communiques, not to mention disrupt London, provide a focus point for tens of thousands of anti-globalistas, and cost Londoners a ton of money in policing and disruption.
Go on Sarko, do it for les enfants.
“It is perfectly possible for inertia to be beneficial and an improvement, if the alternative is poorer. It is the same fallacy as the claim of the current Government concerning the current economic crisis, that ‘doing nothing is not an option’.”
– Former England rugby player and man of firm views on the sport, Brian Moore. Now a television commentator and newspaper pundit, Mr Moore sees parallels between the rule changes in rugby – some of which have been a retrogade step, in his view – and the reaction of certain governments to the credit crisis.
I must say it is about time that we found out what the South Park kids made of the bailout. This is probably not entirely work-safe.
I came across this fine tribute website to John D. MacDonald, the writer of many crime/mystery novels, most of which were set in the area around Florida, the Bahamas and Caribbean. If you have not come across his writings, which are a sort of mixture of Lee Child, with a twist of Raymond Chandler, a shot of Ian Fleming, a light coating of Eric Ambler and a tincture of Robert Parker, then you should correct that oversight. One thing I love about these old 1950s and 1960s novels is the artwork on the covers. I love those “pulp” covers with pictures of hot dames, tough private eyes, guns, boats, gambling cards with smudges of coffee or whiskey on them. There is a whole genre of design and artwork that went into making these covers that deserves more credit than it usually gets.
Even today, the MacDonald books, especially his Travis McGee stories, which later got a hilarious echo in the crime capers – also set in southern Florida – of Karl Hiaasen – read as freshly and sharply today as when they were first written. Reading them makes me want to jump on a plane and head on down south for a spot of marlin fishing off the Keys. Bliss.
Talking of protests – see Perry’s post immedately under this one – there are a number of protests going on in London to coincide with the pointless and expensive Group of 20 meeting of major industrialised and developing countries next week. There could be some serious clashes. It makes me wonder, given the Tea Party anti-bailout protests in the US at the moment – which are starting to get more coverage from the MSM – as to whether there is any understanding on the part of the G20 protesters that they actually might share some common ground with the free marketeers of the Tea Partiers. After all, do the anti-globalistas understand the rage that many Tea Partiers feel at having their hard-earned cash used to bail out banks that were run by often quasi-state institutions and highly paid executives? Of course, a lot of the G20 protesters are Naomi Klein-type socialist buffoons who want to replace what they mistakenly think of as “unregulated capitalism” with central planning etc, but it seems to me that the might be a section of the protesters who might be open to understanding the real causes of the crisis and understand also the injustice of the prudent bailing out the imprudent.
Of course this may be unwisely optimstic and that all of the G20 protesters are statists of one sort of another, out to bash at a “system” that they do not comprehend. If there are ugly scenes in these protests and people working for banks are targeted and hurt, I hope that Gordon Brown, a prime minster of a government that once used to fete the City when it suited, feels suitably ashamed for pilloring those same bankers now that the credit crisis has hit. It is now another reason why my loathing of Gordon Brown and his brand of politics has reached hurricane-force level.
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