When the Euro was about to be launched a colleague and I were in Germany on business. Over drinks with our German business partners they teased us about it. In all previous such conversations with them we had been primarily concerned about the impact of EU policy on the UK's interests. As a global trading nation, we argued, these often diverge from those of the more parochial economies of mainland Europe. To their surprise, on this occasion we were more worried about Germany for whom we predicted the Euro would be a disaster.
The dream has given way to nightmare. We must face the reality that the EU itself is now threatened by the euro. The current efforts to save it are endangering the Union yet further
God knows denial has been for a long time, by default, the operating mode of those in charge of EU institutions.
Money has to be at the service of the political structure, not the other way around
We had robber barons then and we have robber barons today. But there’s a big difference between the robber barons then and the robber barons today. The robber barons then primarily could get their money only if people freely gave it to them. They got their money by selling a service. And nobody had to buy it. And if people bought it it was because it was a better service than it was before. The robber barons today are in a large part able to get their money by sending a policeman to take it out of your pocket.
The real reason why poverty is increasing is that we have had government after government making public sector cuts. This has led to more expensive services and unemployment which forces wages down. And all this has been done in the name of tax cuts for the rich.
Rent and utility bills are killing everybody including business, they must be capped and energy re-nationalized. I don't care if people think it's socialism because at what point do you say capitalism with no rules or morals has to stop and isn't working?
So much for our government's claim that work is what stops poverty and benefits is (sic) what keeps people in it
I couldn't care less how well the banking sector is doing or what the GDP is or the UK's position in wealth tables is so long as I can turn the lights and heating on and eat decent food without worrying about the cost. [my emphasis] MAJOR wealth distribution needed
Since the 17th/18th century capitalist seizure of government power, and specifically following from the 1694 creation of the Bank of England, the government's debt has been the basis of our monetary system. This combination of government power and capitalist credit money made possible a broader based integration between government and the economy - contributing directly to the explosion of British economic, industrial and military power which later gave birth to the British Empire.
This system has obvious advantages with respect to the coordination of a mass economy but from the perspective of individual freedom it is deleterious.
Some argue that the private creation of government money is a separation of powers which itself limits government. In reality, the opposite is true. Finance is government and government is finance - and at the same time, if we wish to do business, we cannot help but be drawn into this government-private hybrid money nexus. The power of government is surreptitiously (or not so surreptitiously) extended to every aspect of economic life.
Not only is it nearly impossible to escape this system but also, if the government relies upon and controls the private money system, we face the twin dangers that (1) control of government/finance becomes the most profitable activity in society and (2) the temptation to raise revenue for government takes precedence over real economic considerations.
The Fred Goodwins of the world, or the trend for physicists to become bankers are a result of (1) while the austerity/ higher tax campaigns are a result of number (2).
Libertarians would generally seek to solve these problems by eliminating the government from money creation. There are a number of problems with this approach. Firstly, credit networks without government support tend to be either small and personal, or entirely unstable. Secondly, there is no evidence that pure "commodity money" has ever existed or that barter can be used to run a large scale economy. Thirdly, almost everyone agrees that there must be some role for government and if government must use private money we again run into problems (2) + (1) - because government relies upon private money it cannot be separated from private business.
Now, there may well be a trade off between the ability to run a mass economy and individual liberty, in order to be free we might have to accept fewer things. I'm relatively comfortable with that - from the perspective of libertarians the destruction of the mass economy may well be a feature rather than a bug. However, I do feel that, rather than eliminating government money creation, as libertarians suggest, (or eliminating private money creation as per the positive money proposal) - we should allow both systems to operate alongside each other, but to exist, entirely and conspicuously separately - in essence, make using government money and engaging in the mass economy a choice.
Government created money could be a form of virtual commodity, (with the function of gaining respite from the taxman - essentially a tax credit). If the government did not require private money, there would be no (revenue related) reasons for it to tax these transactions. Therefore, it would be relatively easy to eliminate VAT, income tax, capital gains tax and replace it with some form of flat tax on tax credits only. In this way, the ability to do business would be separated from the need to pay tax.
Personally, I would set up the system in such a way that it would be possible to choose through lifestyle to avoid tax entirely. (For example - we distribute 100 tax credits to each citizen every year and tax on the basis of natural resource consumption- 100 tax credits for every 10 squared meters of land - by making a lifestyle choice to consume fewer natural resources you could avoid taxation and then be free to engage in whatever other business you choose - obviously many people would insist that people did "work first" before they get credits.)
You could then choose to conduct business either using surplus tax credits (which would offer the mass stability of government money), private credit agreements or barter/commodity money. These entirely independent monetary systems would provide a *real* division of economic power and be based entirely upon voluntary exchange.
As I say, I don't know if this would be more efficient from the perspective of production or "raise GDP", but I do think it would be more conducive to personal liberty.
The great secret about the National Insurance fund is that there ain't no fund
I place economy among the first and most important of republican virtues, and public debt as the greatest of the dangers to be feared.
What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom
After less than two years back in Britain I am bored of the first world problems of this plump and pampered land. I am particularly tired, for example, of the overused word "privilege". To me, the great enemy of mankind is not privilege but poverty. Those of us who are not poor represent a problem solved. The question is how to increase the wealth of those who still are. As a purely economic issue, that's a question long since answered.
History shows us that free markets cure poverty fastest. History also shows us that socialism increases poverty. Ask the millions of people in the former Soviet Bloc. It is a stupid, nasty, hateful doctrine; the moral equivalent of deliberately infecting the healthy with disease in order to reduce health inequality.
Socialism's obsession with material goods ignores the fact that the ability to accumulate wealth, important though it is as an engine of economic development, is not that big a deal at a personal level. Faced with my late wife's cancer, our life's savings could ultimately only buy her more comfortable surroundings in which to die. Material rewards for a life of hard work are all very well, but any sane person knows that true happiness comes from things that have little or nothing to do with money; health, culture, education. recreation and family.
There's a wonderful passage in one of Billy Connolly's shows where he talks of a man at a dinner party who, asked what he did, said "I am a tobogganist". Connolly has much fun imagining what his Glaswegian working class father would have said if he had told him that's what he wanted to be. I have recently been reading about the famous photographers Henri Cartier-Bresson and Robert Frank. Both came from rich families. Both walked away confidently from their material comforts (although Frank occasionally took money from his parents to help him along) in order to embark on artistic careers. Their equivalent, if you like, of tobogganing.
The confidence, perhaps even arrogance, of such people about the importance of their life choices derives from the fact that, unlike Billy Connolly (and most working-class children) they have no practical-minded parents telling them, with their best interests at heart, to "get a real job" The confidence, or indulgence, of their parents is helped by money, of course. If you can't support your child for ever, you are understandably more anxious to see him support himself. But their "privilege" was more complicated than that. Their parents did not laugh at them when they aspired to be "tobogganists". Rather, they expected of them, if that's what they were going to do, that they should head for the highest Alp. That expectation is the true nature of privilege.
Yes, it's easier with money but it's also possible without. Chinese children do not do best in Britain's schools because Chinese parents are, on average, richer. They do better because their parents, on average, value education more highly and expect more effort. A "tiger mother" may not feel like a privilege when you are under her care and control, but she is worth more than all the money in the world. Any parent, rich or poor, educated or not, can be a good parent - with better effect on their child's ultimate happiness (and, incidentally, the nation's prosperity) than any redistribution of wealth.
I remember two long-lost school friends in my scruffy home town up North. Their father was a dustman devoid of all aspiration. Their mother, however, had a dream. Both arrived at infants school able to read because she had pushed them around town in their prams teaching them to do so from the road signs. Unashamedly eccentric herself, she empowered them to be different from their contemporaries and not to give a damn about the relentless peer pressure to be stupid at our bog-standard comprehensive school.
She wasn't Chinese. She was from the white working class; now the second-worst performing ethnic group in Britain's schools. She did nothing any parent, grand-parent or aunt - rich or poor - could not do. I wish all the whingeing envy-ridden half-wits banging on about "privilege" would shut up and be like that scruffy, oddball, utterly splendid mother. She refused to be defined by her circumstances. So - if we have any dignity - should we all.
If you have economically under-privileged kids, if you teach them, are related to them or even just have them as neighbours don't tell them they are doomed. Don't encourage them to hatred and envy. Encourage them to dream of "tobogganing" and lend them the occasional book. Let them see you reading for pleasure (pretend if you have to) so they think of it as normal. Then they will be privileged kids too.