The free market is a system of cooperation
for mutual benefit.

A fascinating perspective from Robert Thorpe at The Cobden Centre - The consequences of the impending national bankruptcies:

The governments of Portugal and Ireland are waiting for Greece to default. If that happens then it will likely trigger the bankruptcy of several European banks*. This is the “Second Lehmann Brothers” the UK press have been discussing that could cause another financial crisis. I think such a crisis is likely to happen, but for political reasons more than economic ones. If one of the three countries I mention were to default then the ensuing crisis would give the others permission to do so. It would allow them to blame default on outside events. The politicians in the remaining two countries involved would then become heroes rather than villains. It’s quite likely that in this situation default could be popular since it could reduce taxes.

Elsewhere, I was reminded of a relevant saying of Hayek’s in 1932:

[M]onetary policy all over the world has followed the advice of the stabilizers. It is high time that their influence, which has already done harm enough, should be overthrown.

It’s to be found in the preface to Monetary Theory and the Trade Cycle (PDF, pp. 5-7), from Prices and Production and Other Works, a book I dearly wish more economists and thoughtful people would read.

Each year, the good people of High Wycombe weigh the Mayor, the councillors and the MP to check who is gaining weight at taxpayer expense. It’s a magnificent idea but strangely my Westminster colleagues seem reluctant to institute the tradition on Parliament Square.

Unfortunately, I put a little weight on in my first year, it turned out. Here’s me making the most of being booed as a pantomime villain after the fateful cry of “and some more!”

Happily, the weight was handy during the past week, as Beth and I took our summer holiday early at the spectacular Wildwind in Greece. I’m helming the large catamaran on the left:

I thoroughly recommend Wildwind and Vassiliki Bay for sailors and windsurfers. A gentle sea breeze develops through the morning and early afternoon before a quite predictable katabatic near gale arrives late in the afternoon. What’s more, Wildwind is, I think, the only place where powerful boats are provided in strong winds for competent sailors and where they will allow you to single-hand the awesome Hobie Fox in lighter airs. This was my fourth visit and I am sure we will be back.

Meanwhile, with me turning 40 tomorrow, the minor public humiliation of weighing in couldn’t be more timely. I feel inspired to return to regular exercise…

Via British taxpayers ordered to bail out euro – Telegraph:

All 27 EU finance ministers have been summoned to Brussels on Sunday to sign up to a “European stabilisation mechanism. Britain will be unable to veto this as it will be put through under the “qualified majority voting” system.

And the mandate for a Labour Chancellor to sign up to this is what?

Interested readers may wish to see The Cobden Centre’s posts on Greece and my serialisation of The Theory of Money and Credit (start at the bottom of the page). Also my precis of Huerta de Soto’s explanation of the fundamental problem.

Update: you may enjoy my other economics posts and in particular Eamonn Butler’s Mises Primer published by the IEA with a foreword by yours truly.

Via the Guardian: Alistair Darling rules out British support for euro