onsdag 24 december 2008

Is Polly Toybee a Jesuit invention?

Should I believe in Polly Toybee? I have never met her. I know her only through what she has written in the Guardian. The opinions she expresses are consistent, usually almost to the point of being predictably stereotypical. Occasionally she comes out with something especially perceptive and sometimes there are touches of brilliance. More usually I find her irritating.

But for all I know she could be a nom-de-plume for a group of journalists who take turns to write the pieces. Or even a textbot. I have no evidence to the contrary, even though I have seen advertisements announcing meetings to be addressed by someone purporting to be a "Polly Toynbee".

On Sundays I go to church. It is a Catholic church and I am expected to believe that when the priest carries out certain actions and pronounces certain words, ordinary bread and wine are transformed into the body and blood of Christ, that is, God.

Her Christmas message, in the Guardian on 23 December, is "There's probably no God". Speaking out of personal experience, I have more evidence for the existence of God than "Polly Tonybee", so I am agnostic on the subject of the latter.

"Her" arguments for agnosticsm ("she" doesn't seem to do full-blooded atheism) as so poor that they sound like "straw man" stuff. My parish priest can do better than that. I am wondering if "Polly Toynbee" is not just a Jesuit plot, devised with the aim of making atheism seem ridiculous.

fredag 12 december 2008

What free markets?

The concept of the fee market is coming under continued attack. But neither its attackers or its defenders seem to grasp the fundamental point that "The market" does not exist in the abstract - it is conducted within a particular framework of property rights, in particular land rights. Within the present framework, periodic boombusts have turned out to be inevitable. Within other frameworks, there would be other outcomes.

The principal and fatal defect with our present system of property rights is that land is held almost free of obligations. This situation arose gradually, gaining its full force in the UK during the Enclosure period from 1760 to 1840. One result is that land titles are traded increasingly feverishly, using borrowed money, as economic cycles proceed. Another is that moneylenders have undue power. Another is that everyone who is not a land owner is obliged to pay rent or work for wages. Most damagingly of all, this system of land tenure ensures that some people will become ever richer whilst the majority become ever poorer, with only a welfare state between them and destitution. That is not a sustainable position as it has led to welfare dependency and ever-increasing taxes on earnings.

The problem needs to be tackled at source, ideally at a Europe-wide level but individual countries should not be forced to go at the pace of the slowest - which most probably would be the UK where landowning interests are most entrenched and refractory. What has to be done is technically simple - to reform tax systems so that governments derive most of their revenue from the rental value of land, which is what they did a millenium ago. Once they do that, then the need for welfare states and further market intervention will dwindle.

British political parties short of funds

There area reports that the main political parties are running short of funds again. People will not contribute. I wonder why?

The collapse of the present political parties could be the best thing that could happen in British politics. Good riddance to them.

The people who get to lead the parties are those who are least suited to do so - at their higher levels they are a magnet for the ambitious and unflective. The disastrous handling of the economy by Labour throughout its period in office and the inadequate critiques of government economic policy by the opposition parties appear to be an inevitable outcome of the system.

A curious feature of the British party political alignments is that they do not reflect genuine economic or social interests. The Conservatives are an uncomfortable alliance of landowning and business interests which are inherently in a state of mutual opposition - most businesses are rent payers and get screwed by their landlords. Labour is an uncomfortable alliance of intellectuals and what remains of the working classes, when the latter can be characterised by attitudes which would be regarded as right wing and authoritarian, especially as regards issues such as immigration and the law.

There is no party representing the interests of employed middle class people, nor is there one representing the underclass or the retired. This must surely be one reason why the parties are constantly looking over their shoulders and weighing up their chances at the polls, which is fatal to effective political leadership and policy making.

The country is, however, fertile ground for a populist party of the extreme right.

torsdag 11 december 2008

Turning the British into morons

The editors of the Oxford Junior Dictionary have brought it up to date by leaving out words relating to the natural world, Christianity, and even some common foods and things you can see in the local park. Supposedly this is meant to reflect the multicultural nature of British society but I can't help suspecting that it is part of the agenda to turn the British into a race of morons, an enterprise at which those responsible are achieving complete success.

The words missed out are

Carol, cracker, holly, ivy, mistletoe
Dwarf, elf, goblin
Abbey, aisle, altar, bishop, chapel, christen, disciple, minister, monastery, monk, nun, nunnery, parish, pew, psalm, pulpit, saint, sin, devil, vicar
Coronation, duchess, duke, emperor, empire, monarch, decade
adder, ass, beaver, boar, budgerigar, bullock, cheetah, colt, corgi, cygnet, doe, drake, ferret, gerbil, goldfish, guinea pig, hamster, heron, herring, kingfisher, lark, leopard, lobster, magpie, minnow, mussel, newt, otter, ox, oyster, panther, pelican, piglet, plaice, poodle, porcupine, porpoise, raven, spaniel, starling, stoat, stork, terrapin, thrush, weasel, wren.
Acorn, allotment, almond, apricot, ash, bacon, beech, beetroot, blackberry, blacksmith, bloom, bluebell, bramble, bran, bray, bridle, brook, buttercup, canary, canter, carnation, catkin, cauliflower, chestnut, clover, conker, county, cowslip, crocus, dandelion, diesel, fern, fungus, gooseberry, gorse, hazel, hazelnut, heather, holly, horse chestnut, ivy, lavender, leek, liquorice, manger, marzipan, melon, minnow, mint, nectar, nectarine, oats, pansy, parsnip, pasture, poppy, porridge, poultry, primrose, prune, radish, rhubarb, sheaf, spinach, sycamore, tulip, turnip, vine, violet, walnut, willow

Wrong sort of train

Humvees and Clouds
Originally uploaded by Jayel Aheram

I saw a train parked at Didcot the other day, loaded with vehicles something like the ones in the picture, in desert sand colour. This made me very angry. This stretch of railway is one of the busiest in Europe yet it is still not electrified. The right sort of train I would want to here is the one loaded with cables and other gear for putting up the long-overdue electrification.

£ slides relentlessly

The relentless slide of the UK pound continues. Commentators try to explain it away by suggesting that it will make exports cheaper but our manufacturing capacity is a shadow of what it was. Britain's biggest "industry" of recent years - making money by moving it around - is no longer an effective means of livelihood. And with most of the world in a similar mess, though not, seemingly, to such an extend, there is not going to be a rush of visitors coming to spend all their money in Britain.

The economic "experts" assure us that there is a danger of deflation, but the falling exchange rate will soon enough translate into higher prices in the shops, and the growing body of government debt will unleash a tidal wave of inflation around 2011.

The interest rate cuts are proving useless except as a means of driving down the value of the £, whilst hitting the thrifty and provident, and since the recession will continue for at least three years longer than the Chancellor has confidently assured us it will end, the government debt will be about three times more than it is counting on, which means that inflation will continue until 2015 or so, probably at the same rate as in the later 1970s.

The whole unfolding disaster is a monument to the incompetence of British politicians and the people who advise them, bankers, and, behind them, the entire body of "professional" economists. In more barbaric times, those responsible would have lost their heads.

onsdag 3 december 2008

What free markets?

There never was a free market. A free market cannot exist if land is enclosed and monopolised, which has been the case since the early nineteenth century. In that situation the landowner is always bargaining from a position of strength vis a vis both the capitalist and the labourer.

Governments must collect the rent of land and use it as public revenue instead of taxes on wealth production. Otherwise there will be another boombust around 2025.

There is no free bargaining when potential tenants have the option of starving or coughing up whatever was asked. So the right sort of land reform is key. In Zimbawe, we have a classic example of the wrong sort of land reform. Mugabe identified that there was a genuine problem and then did exactly the opposite of what was required and the country ended up with land monopolised by his cronies instead of former colonialists.

What Mugabe ought to have done was to leave the white farmers free to continue on their land but to introduce a tax on the rental value of land, and get rid of any other taxes such as income tax. The efficient farmers would have carried on as usual, the inefficient ones would have retired and others would have taken over the land, so long as they were competent farmers able to pay the land value tax - just as an inefficient farmer would not take on a farm tenancy. That would have been a colourblind policy which would have worked to everyone's benefit and Zimbabweans would all have become wealthy.

Some people argue that such a policy would discourage people from working - they say that people need to own their land. But in practice very few people actually own the land on which they both work and live. Most pay rent and work for wages. It does not stop them working hard as long as they are properly rewarded for their efforts. Since land value taxation is a replacement for existing taxes, it means that people receive 100% of their wages instead of being robbed by the government which is what happens now. Even under a minimal system, governments need a lot of resources and they have got to be paid for somehow. Either it comes from the rent of land or it comes from robbery of people's wages or savings, through debasement of the currency.

It is strange how people who claim to be in favour of markets and economic freedom are happy to tolerate the theft of the fruits of people's labour. Yet at the same time they are happy to allow people to keep what they have not produced ie the rental value of land. There is an odd contradiction here.

The flaw in the Libertarian argument.

There is just one flaw in the libertarian argument but it is fatal. It fails on the question of land rights. Nozick, one of the prophets of modern libertarianism, skirts over this key issue. There is a powerful critique of the position by Hillel Steiner, who wrote a piece called "The Libertarian Dilemma"

It can be illustrated by a couple of parables. A boatload of people lands on a fertile island. In the middle of the island is a chest containing the title deeds to all the land on the island. They share it out equally between them. A few minutes later another boatload arrives. Now that all the land is owned, there is nowhere they can go. Those who came on the first boat approach the newcomers with labour contracts. The latter have no option but to accept whatever terms are offered.

In the second parable, four people sit down and play Monopoly. When all the squares have been bought by one or other of the players, a fifth player joins the game and is given an allocation of money. But he quickly finds his money is disappearing. He complains to the other players that the game is unfair as he never had the opportunity to purchase any of the sites, and wherever he lands, he has to pay rent.

Therein lies the kernel of the fallacy of free markets. If land is enclosed and there is no free land available, there can be no free markets.

If on the other hand, all the rent of land was collected and distributed, the market would probably work quite well, because landowners would enjoy no special privileges. How this might be acheived in practice is explained.

It is unfortunate that "progressive" politics have rarely taken this policy on board, preferring to go for revolution, often violent, which in the end has achieved nothing.

Here is a counter argument...
Let's imagine the first settlers of the Fantasy Island hoarding all of the land for themselves, after which the second wave of settlers are reduced to the level of serfs. The problem with this thought experiment is that it assumes that the "serfs" are unable to save their money, start a small business (in rented premises of course), expand that business, accumulate capital and then purchase a piece of land for themselves from its original owner. On the fictional island, economic mobility is barred. In fact, in a libertarian society, the conditions for economic mobility - freedom - are abundant.

These thought experiments are very much a true model of reality. In the USA, the libertarian model held for just so long as there was land freely available - hence the exhortation "Go west, young man". Once the last state, Oklahoma, was distributed, there was no more new land and the island model was a true reflection of the situation.In practice, when land is fully enclosed, it is extraordinarily difficult for anyone to accumulate capital and savings because everyone is bidding up the rent against everyone else, so that earnings are driven down to bare subsistence. It is only exceptionally skilled operators that can climb out of the swamp filled with alligators snapping at their heels, which is what happens when market forces operate in an situation of 100% land enclosure.

The rent of land is a stream of wealth which owes nothing to the efforts of the land owners, since it is derived from the actions and presence of the community. Surely that is the community's entitlement?

In the UK situation, the most valuable land in the capital is owned by a handful of families whose estates were alienated from the monarch through fraud or other dubious processes. The US government just handed out land which had not previously been owned. This would be unproblematic so long as there was an infinite supply, but once the supply of land ran out, the stage was set for creating haves and have-nots due to inequality of opportunity.Furthermore, by handing out land free of obligations, the government was then obliged to fund its activities by robbing people, through the taxation of wages, of the fruits of their labour, something which I would have thought was contrary to the whole notion of libertarianism.Libertarianism is not about equality of outcome, but it is surely in favour of the notion that effort should be rewarded, idleness should go unrewarded and these demand equality of opportunity, so far as it is realistic to achieve this.

Time to tackle US poverty?

It is being suggested that President-Elect Obama should appoint a "Poverty Czar". But the root cause of poverty is lack of access to land. Those who do not have it are forced to pay rent and work for wages. Rents rise to the maximum that people can afford and it is only the exceptional individuals who can get out of that trap. If everyone is educated or works harder, the effect is merely to raise the levels of rent. It is as simple as that. The Law of Rent is an iron law of economics. It was described by, amongst others, David Ricardo, whose name it bears. Unfortunately, modern economic theory ignores the role of land and rent, with the result that the cause of poverty is nearly always thought to be something else, and the problem is never solved.

Where land has been freely available, there is no poverty, since people have the option of working their own land. This was the situation on the western side of the USA in the mid nineteeth century. This was noted by a San Francisco man, Henry George, who developed a new theory of economics to account for it. But when he had finished his work he found that he had only re-stated the ideas formulated a century before by the French Physiocrats, though in an updated form. George also gave the most convincing explanation to date of the land-based cyclic boombusts such as the one we are currently experiencing. You can read his book online here.

Although a poverty czar (or perhaps czarina!) in itself will achieve nothing, the situation is not hopeless. The solution is to read George's book and apply the proposed remedy. But since it will take political courage to face-down vested interests, the czar(ina) will need to be strong.

Human Rights

The concept of "rights" worries me because in practice they are not delivered when the need is greatest. It seems to me that rights are best achieved when it is duties that are defined, sometimes positively, sometimes negatively. eg my right to walk down the street freely depends on everyone observing their duty not to molest me or arrest me without due cause.

Amongst key duties which are not being observed at present are the duty not to kill another human (something itself in need of definition), the duty to care for one's children, and the duty of the state to ensure that everyone has the means of earning a livelihood.

Virus questions - and the Swedish exception

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