Society is cooperation;
it is community in action.

Every week over 26 weeks, I’ll be publishing a précis of a chapter of Henry Hazlitt’s brilliant 1946 book, Economics in One Lesson, prepared by Michael Dowsett during his internship. The index page is here.

This week, Taxes Discourage Production, which discusses how taxes and government spending inhibit progress, hamper the development of real wages and worsen unemployment. The original chapter is only two pages and can be read here.

Buy or download Economics in One Lesson.

Every week over 26 weeks, I’ll be publishing a précis of a chapter of Henry Hazlitt’s brilliant 1946 book, Economics in One Lesson, prepared by Michael Dowsett during his internship. The index page is here.

This week, The Blessings of Destruction, an extension of The Broken Window Fallacy.

Buy or download Economics in One Lesson.

Every week for the next 26 weeks, I’ll be publishing a précis of a chapter of Henry Hazlitt’s brilliant 1946 book, Economics in One Lesson, prepared by Michael Dowsett during his internship. The index page is here.

This week, in just 189 words, The Lesson.

Of course, there is no substitute for reading the book: buy, download.

Tomorrow, Saturday December 10th at 1.30pm, my colleagues Gordon Kerr and Kevin Dowd will appear on the steps of St Paul’s Cathedral to explain how bankers falsify profits and misappropriate bailout funds for personal benefit.

Kerr will set out:

• How derivatives transactions are structured to game flawed accounting rules and Basel regulations and create illusory profits and capital;
• How Basel rules, although deeply flawed, cannot actually function given the present false accounting system;
• A specific example of how his team found a £25 billion black hole in RBS’ accounts this May, astonishingly missed by the FSA and Bank of England, and RBS’ response to this exposure;
• The way out of this mess.

Kevin Dowd will put the present crisis into historical context and explain the threat to sterling presented by continued failure to fix the banking system. 

Gordon Kerr is a banking insider and author of The Law of Opposites to be published on 13 December by the Adam Smith Institute. Professor Kevin Dowd is a leading economist and author of Alchemists of Loss (Wiley, 2010). Both Kerr and Dowd are with Cobden Partners.

Gordon and Kevin are taking a courageous step in doing this. They are likely to inflame and dismay the financial community while providing authoritative, scandalous information to the protestors. I hope it goes well: things must change and, as I said before, if this is capitalism, I am not a capitalist.

The Government recently announced a number of policies to help British businesses.

They have launched the updated and overhauled businesslink.gov.uk website. This is now the primary gateway for businesses, of whatever scale, seeking support and information from the Government. It’s backed by a new telephone contact centre and many thousands of new business mentors.

They have launched a new nationally-delivered Manufacturing Advisory Service to help small and medium-sized manufacturers to grow. It is estimated that this will help generate £1.5 billion in economic growth. For more information, click here.

The Government continue their goal of cutting red tape with the extension of the Primary Authority Scheme. This allows businesses spanning local authority boundaries to nominate a particular authority under whose regulatory regime they will operate. In addition,  it will offer clearer, more straightforward guidance – so that businesses, particularly SMEs, have greater access to comprehensive guidance on what they need to do to comply. It is hoped this will create a more accountable and transparent system of local regulation and a simpler regulatory landscape.

The Make it in Great Britain campaign is aimed at transforming outdated opinions of UK manufacturing. Business Secretary, Vince Cable, said:

I want our most passionate manufacturers, whether that’s ‘captains of industry’ or those just starting out in their careers, to be our industry champions. With their help, we can modernise people’s views of manufacturing and dispel the myth that ’we don’t make anything in the UK anymore.

In Europe, despite the present instability, my colleague Mark Prisk is focusing on reducing European regulation by pressing EU officials and MEPs to follow the UK’s lead.

My colleague Douglas Carswell has been rather scathing about the Government’s progress. His post here, reminds me to ask economist David B Smith whether he believes we have moved beyond New Labour’s system, which he described as ”an economic approach that was functionally hard to distinguish from that of fascism.”  I’d certainly like to hear from businesses which believe what the Government are doing is a great help and indeed those which don’t.

I look forward to hearing the Chancellor’s Autumn Statement on 29 November. I wish I could believe it will include those measures which would be in everyone’s long term interests: worthwhile bank reform, comprehensive deregulation of business and a sufficient acceleration of the deficit reduction strategy to enable tax cuts…

Related reading:

• Schiff and Schiff, How an Economy Grows and Why It Crashes: Two Tales of the Economy
• Mises, Bureaucracy (PDF, buy), The Causes of the Economic Crisis (PDF, buy) and Economic Freedom and Interventionism (online, buy)
• Kirzner, How Markets Work: Disequilibrium, Entrepreneurship and Discovery
• More