American musician Ray Stevens has produced this superb analysis of the Obama Budget Plan:
I’m sure Ray has much to teach politicians and the public in the UK and Europe too, particularly about ethics and decency in the public finances.
For more on that subject, see Jörg Guido Hülsmann’s brilliant book The Ethics of Money Production (PDF) and these sovereign debt projections from the Bank for International Settlements.
Over the past few days, many constituents have written to me expressing anger and dismay about the riots, policing and justice. I share this anger and dismay. As I said in my article on Wednesday, we must establish that the state’s duty is to protect the law-abiding and their property first and foremost and that the police do not require the consent of rioters before acting with reasonable force.
The Prime Minister has said that we will do whatever it takes to restore law and order and to rebuild our communities. His statement yesterday may be found here.
As the Prime Minister has said, too few police were deployed and their tactics did not work. They faced widespread, simultaneous looting, not concentrated public disorder.
More police have now been put on the streets, more people have been arrested and more criminals are being prosecuted. No phoney concerns will get in the way of publicising the faces of those wanted for crimes. The police are already authorised to use baton rounds (“rubber bullets”) and there are contingency plans in place to make water cannon available at 24 hours notice. The Government will give the police the power to remove face coverings under any circumstances where there is reasonable suspicion that they are related to criminal activity.
The Prime Minister also announced measures to support victims and to tackle the culture of criminality which has grown up in our country. There is a difference between right and wrong: a culture which glorifies violence, disrespect and irresponsibility is unacceptable. The Government is setting out to do those things which will change our broken society.
I was glad that the Prime Minister yesterday reasserted the old principle that the public are the police and the police are the public. Given that people are entitled under law to use reasonable force in defence of their lives, their property and their communities, it is important that the public are given appropriate guidance. I will be writing to the Home Secretary seeking that guidance.
Similarly, the police should be guided by the principle of reasonable force. Occasionally, an individual police officer has used excessive force in a difficult atmosphere but, over the past few days, the police have not used that force which it appears the majority of the population would have endorsed. I personally do not approve of ‘kettling’ peaceful demonstrators. We have to recognise that the police are in an extremely difficult position in this area. However, Parliament and the Government must ensure that the police are able to use that force which is reasonable in the circumstances, even if that includes the use of baton rounds, water cannons, tear gas or other tactics which may cause serious injury or even death.
We now face the problem of inadequate sentencing. I will be writing to the Justice Secretary on that subject.
All in all, I believe we now see clearly the legacy of a century of misguided statism and surrender of basic human values. The police have not drawn the correct distinction between policing legitimate demonstrations and intervening in criminal riots: unreasonable force has sometimes been used where none was appropriate and reasonable force has not been used where it was required. That must be resolved.
How so many people have come to be so reckless, irresponsible, immoral and downright criminal will be a subject for discussion over many years. I am reminded of the warnings issued by C S Lewis in The Abolition of Man and by Alexis de Tocqueville, who wrote in the 19th century of the dangers of the nanny state:
Subjection in minor affairs breaks out every day and is felt by the whole community indiscriminately. It does not drive men to resistance, but it crosses them at every turn, till they are led to surrender the exercise of their own will. Thus their spirit is gradually broken and their character enervated [...]. It is in vain to summon a people who have been rendered so dependent on the central power to choose from time to time the representatives of that power; this rare and brief exercise of their free choice, however important it may be, will not prevent them from gradually losing the faculties of thinking, feeling, and acting for themselves, and thus gradually falling below the level of humanity.
It is my view that many in our society have sunk to the present level because, for generations, we have progressively surrendered ourselves to the embrace of the state. It is past time that we rediscovered the classical English values of liberty under the law, which means responsibility. That would include building a straightforward system of justice based, not on the state’s attempt to shape the individual’s character, but on the protection of life, liberty and property.
However, on the positive side, I have been deeply heartened by the way communities have come together to defend themselves and to clear up the mess created by those who have betrayed their fellow man. Moreover, the young people I meet in Wycombe schools and during their work experience unfailingly lift my spirits with their sincerity, good intent and earnestness. Our young people are, on the whole, a cause not for despair but for hope.
The disgraceful events of the past days contain many lessons for us all. We should now strive to build a better society based on personal and social responsibility and those values which have sustained every civilisation, foremost of which is this: do as you would have others do unto you.
Click for PDF
Yesterday, I gave a presentation which sets out:
We went on to discuss what Conservatives can and should do now to reshape our country and make gains in this long-running battle against the rise of the state.
The slides are available here. I have added some additional slides on debt, debasement, monetary factors and the spectrum of ideas.
In connection, I can thoroughly recommend browsing the Conservative Poster Archive: from 1909:
CPA poster 1909/10-14
After dashing through C S Lewis’ brilliant if somewhat esoteric 1930s sci-fi/fantasy known as The Cosmic Trilogy, I picked up Jung’s even more esoteric Answer to Job.
After all that, it seemed time to return to Mere Christianity, which is so titled because it explains those doctrines which are generally uncontroversial amongst all Christian denominations.
The book comprises a number of talks which Lewis gave during the madness of the Second World War, covering right and wrong as a clue to the meaning of the universe, what Christians believe, Christian behaviour and some first steps in the doctrine of the Trinity.
He closes the first chapter on The Law of Human Nature as follows:
These, then, are the two points I wanted to make. First, that human beings, all over the earth, have this curious idea that they ought to behave in a certain way, and cannot really get rid of it. Secondly, that they do not in fact behave in that way. They know the Law of Nature; they break it. These two facts are the foundation of all clear thinking about ourselves and the universe we live in.
However, after yet another young person explained how they had been taught moral subjectivism in their compulsory “citizenship” classes, I was reminded of his book The Abolition of Man. I reviewed it previously here. It tells the tale of society’s path if mankind adopts the subjective morality advocated most notably by Nietzsche and his disciples.
Since Nietzsche’s lamentable Beyond Good and Evil was subtitled “Prelude to a Philosophy of the Future”, I’ll be researching the syllabus shortly…
In his short article Inflation and You, Ludwig von Mises explains inflation itself, the social and economic effects of inflation, who inflation’s victims are, the futility of attempts to hedge against inflation, the moral and political effects of inflation and, finally, inflation and government borrowing. I thoroughly recommend the whole article, but I reproduce the section on government borrowing, which seems particularly pertinent at the moment:
Inflation and Government Borrowing
The writer, having witnessed the course of inflations in one European nation after another, believes that it is not too late to stop further inflation in the United States by bold and painful measures. Inflation is not an act of God. It is a result of the methods used to provide a part of the means for the conduct of the war. One set of methods can still be replaced by another, less harmful set. It is still possible to keep down the amount of money and money substitutes by financing the total amount necessary through taxation and loans.
People sometimes call inflation a special way of “taxing” a country’s citizens. This is a dangerous opinion. And it is wholly untrue. Inflation is not a method of taxation, but an alternative for taxation. When a government imposes taxes, it has full control. It can tax and distribute the burden any way it considers fair and desirable, allotting a larger share of the tax burden to those who are better able to carry it, reducing the burden on the less fortunate. But in the case of inflation, it sets in motion a mechanism that is beyond its control. It is not the government, but the operation of the price system, that decides how much this or that group will suffer.
And there is another important difference. All taxes collected flow into the vaults of the public treasury. But with inflation, the public treasury’s gain is less than what it costs the individual citizen, since a considerable part of that cost is drained off by the profiteers, the minority that benefits from the inflation.
It is no less fallacious to consider inflation as a method of raising loans for public use. Technically, inflation does increase the total of the government’s indebtedness to the banks. But the banks’ intervention is only instrumental. If the government borrows from the banks, the banks do not grant loans out of their own funds, or out of money deposited with them by the public; the banks are not real lenders; they grant the loans out of their “excess reserves.” They merely expand credit for the benefit of the government. In other words, they increase the quantity of money substitutes.
When you as an individual buy a government bond, you make a loan to the government; you put part of your cash holdings into the hands of the treasury. There is then no increase in the total quantity of currency or credits available and hence no inflation.
However, it is different when government borrows from the banks’ “excess reserves.” Their so-called “excess reserves” are not a tangible thing. The term is merely a phrase indicating the limits within which the law is prepared to tolerate credit expansion, that is to say further inflation. The effects of loans from available “excess reserves” are just as inflationary as the effects of issuing more paper money. It is a mistake, therefore, to confuse this government “borrowing” from the “excess reserves” of the banks with genuine loans.
Popular education is absolutely essential. It is clear that the efforts of the U.S. government to collect the means necessary for the conduct of the war by taxation and by sale of government bonds represent sound measures for heading off inflation. Everybody should be made to understand that the burden of high taxes and of making personal loans to the government are minor evils compared to the disastrous and inexorable consequences of inflation. Not only for the sake of the national welfare, but for the sake of your own interests–whether you are rich or poor, employer or wage earner–you should do your best to arrest the further progress of inflation.
See also Hülsmann, The Ethics of Money Production for a detailed explanation of how the production of money has become an instrument of exploitation and the consequences.
I came into politics out of fury with a political elite which was positively trampling the principles of democracy and an open society. By 2007, what Labour were doing to our country was awful enough, but then the handling of the Lisbon Treaty was the final straw: what a witches’ brew of deceit, sophisty and betrayal surrounded that unacceptable affront to government with the consent of the governed.
I thought we could go no lower.
And then came the expenses scandal and I was ashamed to be on the candidate list. After much kerfuffle, we seem to be moving on. Certainly, MPs know they are on thin ice…
Yet here is a new low: a repulsive phone hacking scandal involving not just journalists, but also police and politicians. Anyone ought to be disgusted by the conduct of public life which is being revealed.
Of course we need investigations into the circumstances of this case and the conduct of the press but there is something wider at stake. We need to question whether a stong state of near total scope with so little real democratic accountability, coupled with such a short and continuous news cycle, can ever escape the incentives that the system creates.
The “Westminster Bubble” is intense and unavoidable. We may be lobbied by powerful interest groups such as teachers, health professionals or publicly-funded charities. Companies and industries come together to press their case in a kind of corporatist guild socialism. Think tanks keep yelling at politicians who are too busy to listen. The Party has its own demands for absolute loyalty to the line and to the Whip.
Amongst all this, our constituents are suffering real state failures. HMRC, in particular, is treating people abominably and every state-provided public service has its victims of inadequate quality or service. As I have written before, the state is in decline. The era of big government has run its course, together with the dominance of its client classes: the politicians, the journalists, the giant corporations which suckle poisonously at the teat of taxpayer-backed funding, the special interest groups without a care for others and all those who fear to make a living through voluntary social cooperation.
Layer by layer, the corruption of society inherent in big government is being exposed. Good.
Of course we need a free press to hold power to account — that is an essential component of democracy – but all freedom requires an objective moral basis if it is not to degenerate into savagery, exploitation and degradation of the human spirit.
We must rediscover and apply those values which have sustained civilisations through the ages.
The golden rule has been stated many ways but “do as you would have others do unto you” may be the most familiar. Naive it may sound but more ethical conduct is vital if we are not to discover that public life can go yet lower.
He has shown you, O mortal, what is good.
And what does the LORD require of you?
To act justly and to love mercy
and to walk humbly with your God.
– Micah 6:8 via BibleGateway.com.
Yesterday, I received a sneering email from an obviously partisan campaign group which implied that the Big Society is about nothing more than people giving their time. I beg to differ.
If society is “the sum of human conditions and activity regarded as a whole functioning interdependently” (Concise OED), then it comprises everything we do. Society includes family, friendship, volunteering, giving and exchanging. It is a rich and comprehensive tapestry of human relationships which includes business.
Read the rest of my article: CentreRight: Surely the Big Society is about more than volunteering?.
The Ethics of Liberty by Murray Rothbard is a difficult book to which few could subscribe in full.
It is difficult partly because it is concerned only with ‘that subset of the natural law that develops the concept of natural rights, and that deals with the proper sphere of “politics,” i.e., with violence and non-violence as modes of interpersonal relations.’ The book is not concerned with the ethics of personal morality, simply ‘a political philosophy of liberty’.
In confining itself so, it presents an ethic which is surely untenable to most minds, perhaps minds unaccustomed to separating fully personal morality and politics, as Rothbard does. It is nevertheless useful on the subject of self-ownership, a concept which most people would accept, and gladly insist upon.
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As I sit here on the train, reading a book on ethics, I am mindful of being an engineer in politics.
Engineers are quintessentially pragmatic. We get things done, in the circumstances we face, with the resources we have. We may accept falling short of perfection, but we deliver things which work and improve them.
However, we don’t flounder around uninformed. Aeroplanes do not fly thanks to fairy dust and software does not write itself. Aerospace engineering requires the application of correct ideas. Software engineering is little more than ideas implemented.
However, as anyone who has engineered aircraft or software will know, engineering is compromise. No vehicle travels faster than light and no computer program has found the second Meerten’s Number1 The former is fantasy. The latter, a practical impossibility.
That is, if you wish to achieve something in the real world, it is important to understand how the real world works, even if you cannot perfectly apply your ideas.
And so we turn to the attitude of the opposition benches yesterday.
Labour’s jeering, self-righteous indignation and lack of remorse over the public finances seems to suggest two premises. The first is that the government has an inexhaustible horn of plenty. The second is that the financial crisis was an automatic feature of the economy which could not have been avoided.
The Government does not have an inexhaustible horn of plenty. Government funds itself by taking today, promising to take a greater sum tomorrow and debasing the currency. We have reached the limits of all three and the consequence is an entirely predictable crisis.
Thanks to something called the Laffer Curve, it now seems likely that increasing taxes will reduce government revenues.
We are at the limits of government borrowing. As one commentator put it, Gordon Brown’s borrowing was “reckless in the extreme”. Furthermore, as was argued yesterday in the Commons, government borrowing last year was facilitated by buying from the market with new money government bonds of a value broadly the same as that which the government needed to sell.
Rulers have always debased the currency to pay for their escapades. When they clipped coins of intrinsic value, the immorality of it was obvious. Now that effect is achieved by something which sounds terribly technical (“quantitative easing“) and by the nature of the banking system (private banking with a fractional reserve, controlled by a central bank) the immorality of it is less obvious. However, as Toby Baxendale explains, the pound has lost around 99.5% of its value over the last century. Debasement is a stealth tax, one which redistributes wealth towards those who receive the new money first: it is primarily a tax on those with low and fixed incomes. At its extremes, currency debasement ends in a Crack Up Boom which finally destroys the currency.
As I have explained before, the banking crisis and the wider economic and fiscal consequences are not attributable to the free market. It was all horribly predictable.
Labour’s premises are wrong. There is no inexhaustible horn of plenty from which a benevolent government can dispense unlimited gifts. This crisis is not an automatic result of the operation of the free market, but a result of bad banking law and government intervention.
It is no good the opposition jeering and pointing as they oppose cuts to unaffordable Government spending. If we are serious about human well-being, prosperity and social progress for everyone, then we need to face the world as it really is and find a way through. Neither fantasy nor insistence on defeating practical impossibilities will do.
This begs the question, “How does society work?”. It turns out, of course, that our generation is not the first to ask. The first systematic treatises on the nature of society and social cooperation were written by the Thomist Scholastics of Salamanca in the 15th and 16th centuries. Their ideas resurfaced with scholars including Menger, Bohm-Bawerk and Mises. Their system of thinking may or may not be complete, but it appears to have the greatest explanatory power for our circumstances today.
Where to begin? Mises’ Human Action is perhaps the definitive treatise, though it has been extended and refined over the years. However, if you only have time for a pamphlet, I recommend Eamonn Butler’s primer on Mises, available to download or buy from the Institute of Economic Affairs.
We may not like reality, but we do have to deal with it. Pragmatic we must be, but let’s at least grasp some good ideas.
