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"Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice" - Adam Smith

Bitcoin is a win-win for liberty

Written by Preston Byrne | Monday 06 January 2014

Depending on who you ask, cryptocurrency is either: (1) the future or (2) stupidity.

Some early adopters claim that 1 BTC could reach $40,000; others ask whether BTC will become “Gold 2.0”.

The ASI's own Tim Worstall (among others) disagrees, pointing to the fact that a cryptocurrency can effectively be created out of thin air—“with no scarcity comes no value”—and likens BTC, whose rivals (wow) multiply, as akin to that of “the Golgafrinchan B Ark using leaves as money. They...have to burn down the forest to stop inflation.”

This view is wrong. Cryptocurrency is not presently scarce: there are perhaps hundreds of cryptocurrencies with active userbases, many of which are actively traded. Yet despite being functionally identical to BTC some are near-worthless (1 DOGE = $0.00035) while others are prized (1 LTC = $24.00). Why, then, is 1 BTC worth $760?

The answer, of course, is that cryptocurrencies aren't money, but rather “more of a payment system like Visa than a currency like the dollar,” and ones with some unique characteristics at that: low transaction costs, increased anonymity, and a distributed network architecture. This alone has value.

BTC also benefits from its “first-mover status (which) grants it some advantage over its competitors in the form of network effects,” with its value deriving, “at least in part, on the number of other users willing to transact.” (Luther, 2013).

In this respect its lead is commanding. As for its closest analogue, credit cards, network effects in respect of these have resulted in there being “only three major credit card companies in the world… (and as such) cryptocurrency network externalities are likely to be high.” Though cryptocoins are obscenely easy to mint, the dominance of a few large players will mean joke currencies become increasingly difficult to trade.

As yet, cryptocommerce has only been adopted by small, distinct groups of individuals (libertarians, internet denizens, and black marketeers (Luther, op. cit.)). For each of the above, crypto serves a distinct purpose and success or failure has a distinct meaning. For those who see crypto as a creature of politics (as I do), at this early stage, it should not matter what a particular cryptocurrency is worth from time-to-time. It matters only that a few are (1) capable of holding value and (2) are actually used.

The value of the eventual frontrunners will undoubtedly bear a relationship to black market demand – as put by one commentator, “if Bitcoin succeeds, it will be because of the War on Drugs and other policies that increase demand for a quasi-anonymous, internet-transportable currency,” exactly the kind of disruptive function the crypto-anarchist manifesto predicted in 1988.

Crypto therefore presents states with a dilemma: repress it, or compete against it. Choose the former, and cryptocurrency will serve as a check on state power. Choose the latter, and it will have been a powerful catalyst for reform.

Either way, liberty wins.

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Help to What? Moving forward from conference season

Written by Preston Byrne | Thursday 03 October 2013

Help to Buy was conceived and born into a dysfunctional legal and political environment, including: (1) a draconian, outdated planning regime which still retains features of its social-democratic origins in the 1940s; and (2) Housing Benefit, a rent subsidy amounting to a staggering £24bn a year, nearly half of which is directed to the private sector, behaving exactly as expected: perversely benefiting private landlords to the detriment of virtually everyone else, including private renters and—in the wake of the implementation of the benefit cap—welfare beneficiaries as well.

With that context in mind, the Adam Smith Institute argued early last month that the Help to Buy programs, also subsidies, are likely to have a difficult adolescence and produce similar effects, disproportionately hurting the poor and the young while improving the position of existing landowners. We are by no means alone in this view; many believe the scheme will make housing less affordable in the long term by driving up prices, increasing inequality, increasing household debt in an environment where interest rates are very likely to rise, and increasing the overall risk of losses for participants in the sector (including new homebuyers, whose liability to repay high-LTV mortgages could become very onerous, very quickly if interest rates move upwards).

The Government's move last week to empower the Bank of England to harness Help to Buy if the housing market overheats is a welcome admission that the Government shares at least some of the concerns of its critics. It is, however, a pity, and a loss for progress, that the Conservatives are unable to admit this in public, as most recently seen with Radio 4's interview of David Cameron on Tuesday.

In that interview, Sarah Montague peppered the Prime Minister with a list of the scheme's non-partisan opponents, including the ASI, and the reasons for our opposition. The Prime Minister blithely replied that “you need to get out more and listen to ordinary people who want to buy a home,” and that his government's objective was to liberate young Britons who, “trapped in rental accommodation, [are] paying high rent to somebody else”.

On the subject of housing, Cabinet-level officials have repeated similarly populist rhetoric with increasing frequency over the past 30 days. While this might resonate with younger voters, it does nothing to address the fundamental imbalances that underpin the high price of housing, and misleads the public as to the character of the crisis. As the Spectator's Fraser Nelson pointed out, the Anglo-Saxon fetish for homebuying is not a value universally shared; if this were the case, he playfully suggested, we should perhaps send humanitarian aid to the long-suffering peoples of “Austria, Denmark, the Netherlands, Korea and Sweden as well as France and Germany,” where short-term leasehold tenure is more widespread.

Even if the question of tenure were a normative one (and it isn't), in practical terms, the distinction is almost entirely sentimental in the medium-term. For the purchaser who takes maximal advantage of the equity loan component of Help to Buy, for over half a decade he or she may expect to trade his or her landlord for a bank and, after 5 years of interest-free lending, the Treasury—while not paying down very much principal, at least on a typical long-run amortisation schedule. There is also, of course the matter of capital appreciation; but even this, in a climate of high and rising prices, carries the potential to be a double-edged sword for banks and borrowers alike.

The real substance of the housing question is not one of tenure, nor one of "aspirations" (especially when the political realisation of these aspirations is inefficient at best, and reckless at worst). The country would benefit most from a renewed focus on affordability in the long term, a measure on which the British housing market – social and private, rented and purchased—continues to remain under significant stress.

In this respect there is very little difference between purchased or rented accommodation. In May, for the first time in 18 months rents rose across every region in the country; records were broken in London, where the average monthly individual rent now exceeds £1,100. Only yesterday, Boris Johnson—referring to a “massive affordability gap” in the London rental markets—called for additional government-subsidised support, “allowing companies to make tax-free loans for rental deposits, as they can for childcare.”

We might call such a program “Help to Rent.” Armed with the knowledge that the government already spends £10 billion a year subsidising tenants in the private rental markets—a new Help to Buy Equity Loan scheme every 17 weeks, or Help to Buy Mortgage Guarantee every year—the Mayor’s proposal, too, is unwise, for all the usual reasons.

If the crises in social rented, private rented, and private purchased accommodation are to ease, aggressive supply-side solutions are necessary to increase the availability of housing, which will gradually bring down its price and increase the availability of finance (as lower price-to-earnings ratios will make banks less reticent to lend). One option to achieve this, while appeasing more parochial voices who seek to retain the national character of urban and rural environs, might be placing greater emphasis on private property rights in planning laws governing built-up areas, a form of liberalisation which would allow developers to option out, and then raze, inefficient stock in places with few architecturally or socially redeeming characteristics (such as Fulham and Battersea) and replace it with buildings of considerably greater ambition.

Subsidising demand will not and cannot, given present legal and political restrictions on development, achieve this outcome. Further injections of government cash will only make life more difficult for future market entrants who are forced to pay for these subsidies while competing against them. As the Conservative Party Conference draws to a close, young Conservatives—and indeed first-time buyers of any political persuasion—should resist and oppose calls by senior Tory figures for additional state intervention in the housing market. If affordable housing is the goal, it's time to call for rather less.

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Talk o' gin an' beer

Written by Preston Byrne | Wednesday 10 April 2013

London's pubs may soon be protected from demolition or conversion after Boris Johnson agreed to list them as 'community assets'. What this means is that any pub which is so listed becomes considerably more difficult to sell. A selling pub landlord will be required to:

  • notify their local authority;
  • wait for the local authority to notify any “interested parties;” and
  • “if local groups are interested in buying the asset they (will) have 6 months to prepare a bid to buy it before the asset can be sold,”

…helped along by government-funded “pre-feasibility grants of up to £10,000 and feasibility grants of up to £100,000” drawn from a £30 million social slush fund.

The Daily Mail reports that “every week 25 pubs close,” with the attendant loss of thousands of jobs, “never to reopen, victims of... cheap supermarket booze, heavy duty on beer and the smoking ban.”

Supposedly, listing “helps to see off the property developers who are the main reason pubs go down.” But are they?

Industry publications further point out that taxation on alcohol is “eight times greater” than in France, which combined with increased input costs “of barley, malt, glass, aluminium and energy” squeezes margins such that “the major UK brewers have seen profits plummet by almost 80 per cent.” Changing tastes and squeezed budgets have contributed to beer sales falling to their lowest levels since the Great Depression.

Many pubs are now more valuable for the land on which they sit than the pints they pull, resulting in their being “demolished or converted to other uses such as residential and retail services which radically alter community spaces and change the tone of the high street.”

This is no bad thing. The father of Austrian economics, Carl Menger, wrote that “if, as a result of a change of tastes, the need for tobacco should disappear completely,” there would be no doubt that tobacco would lose its utility entirely and the services of tobacconists, importers, traders, pipe-makers, tobacco-farmers, and “the specialised labour services of so many people who are employed” in the trade would “cease to be goods.”

This should not mean permanent destitution for those involved. A free market can redeploy its resources towards more profitable purposes. “Many tools and machines used in the manufacture of tobacco products,” Menger wrote, can be “placed in causal connection with other human needs even after the disappearance of tobacco.”

As in many other occasions in life, where goes tobacco, so goes beer. Times, and tastes, have changed. [ ] Yesteryear's East End labourers are now hipsters and carb-conscious yuppies, and City types are more likely to hit the gym at lunchtime than ‘roll down the pub’.

The problem is exacerbated by the smoking ban, the high burden of business rates, VAT and excise taxes, and falling household incomes. Additionally, in the midst of a housing crisis, the human need for housing is considerably more pressing than the human need for drinking in connection with the land on which “our” pubs have been built. One should not therefore be surprised that pubs have become increasingly valuable as property, rather than business, assets.

This is not to say that the Austrian approach is entirely fatalistic on the issue. We can, and should, announce “last call” on government intervention in this sector of the economy – freeing pub business from regulation so it becomes more competitive and liberalising the housing market will reduce the cost to society of both entertainment and places to live, while not interfering one whit with the property rights of pub owners. Listing pubs as “community assets,” however, achieves virtually nothing.

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Don't repeal the Human Rights Act. Give it teeth

Written by Preston Byrne | Tuesday 12 March 2013

The government's push to repeal the Human Rights Act 1998 is ill-advised, says the ASI's legal writer Preston Byrne, who argues that the civil liberties protections offered to the British people by the Human Rights Act 1998 must be buttressed, not erased. If there is a problem with the Human Rights Act, it's not that it goes too far – it's that it doesn't go nearly far enough.

The other day I stumbled upon Justified, a newish series about a thirtysomething, cowboy-hat-wearing, gun-toting U.S. Marshal named Raylan Givens. Raylan, the story goes, has been reassigned from sunny Florida to sleepy Kentucky – “punishment” for carrying out what amounts to a daylight assassination of a Miami mobster – following which he promptly misbehaves, sleeping with material witnesses, failing to recuse himself where conflicts of interest arise, and killing a number of human beings per episode. These are problems that the characters, treading the fourth wall, openly acknowledge but do little to fix.

It’s not The Wire. But then, it’s not 2002, and Raylan is a better fit for the conscience of today's United States. Pining for John Wayne, America reminsices as Raylan, self-loathing, naïve and eager to wield raw, unbridled power, apes him; we admire him for falling short. He is a John Wayne for the Drone Age, angry, uncertain, broke and extra-judicial.

It is impossible to suspend disbelief and enjoy the show. in real life, the only thing this cowboy could ride is a desk. Killing is an unfortunate and traumatic possibility in the life of an armed policeman. When it occurs, it is very contentious. Administrative concerns kick in, a lawsuit or public inquiry is often involved and it is often cause for mandatory suspension or early retirement, on account of which “it would be hard to ‘imagine a set of facts’ that would lead a cop to be involved in the deaths of six people,” especially in the first season alone.

Read this article.

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William Beveridge's violin

Written by Preston Byrne | Wednesday 09 January 2013

By now almost everyone has heard that Child Benefit is going to be means-tested. We’ve also heard the middle class has responded to the move with “outrage.” We might also have heard the world’s smallest violin somewhere in the background of a BBC interview where a married mother complains of the manifest injustice that her six-figure income is structured so that her state aid will be taken away, whereas other families' six-figure incomes are not. She is not alone. Tonight, parents everywhere will cry out for Leviathan's intercession, hoping government will hearken to them in the spirit of fairness and equality… and, perhaps, with a little cash.

The refrain is a familiar one, and reminds me of a time I went down to Occupy London Stock Exchange – the cleaner, British version of Occupy Wall Street. I attended a talk there once on the subject of work, and the attendees – about twenty of them –  began the session by stating their employment, only to follow with aggressive complaining about how their work represented their abject mistreatment by the “system." “The terms of my employment are unfair,” said one; “my work is not valued,” said another, an unpaid intern in an art gallery. “I am not paid enough for what I do,” said a third. 

A range of employment – builder, cleaner, lecturer, doctor, student, protester (really?), freelance writer, freelance landscape architect – was represented. But the solution which the twenty of them agreed in council was not, as one might think, to go out and find another job, or to change careers to one which provided steadier work than freelance journalism, art internships or landscape design in central London. Instead, it was agreed that their labour should be withdrawn for a day on 30 November (even those who were self-employed): they would go on strike and seek a political solution in the longer term.

None of which, of course, does anything to solve the particular problem each of them faced: that their incomes were unsatisfactory compensation, in their eyes, for the marginal disutility of their labour.

Life is hard, goods and services are expensive, and competition in the labour market is ferocious. Nonetheless, except in cases of egregious civil rights violations, politics is almost never the best answer for improving one’s lot, particularly when one wants to make meaningful improvement on a middle-class financial position in a developed industrial state.

We each possess a degree of influence over our own lives which is far greater than that of any redistributive policy. What job to accept, what job to keep, what job to quit -- whether we can afford to have children, and how many. What these choices have in common is that they are ours alone. So should be the consequences. Viewed this way, spending life begging the government to save you is merely a waste. But asking your fellows to subsidise your expensive decisions — especially when you can afford to shoulder the burden yourself — is simply rotten. 

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The Benefit-Industrial Complex

Written by Preston Byrne | Monday 17 December 2012

Housing benefit is a national industry, says Preston Byrne. In this article he argues that it sustains a national minimum rent and drives up rental costs for everyone.

Anyone following the progress of the government's “Universal Credit” welfare reform program will know that (1) its signature provision is the creation of the so-called Benefit Cap limiting the amount of benefits that any one person or family can claim in a given week to £350 or £500, respectively.

Lesser known is (2) that “under Universal Credit, the default position will be that all housing costs for both social and private sector tenants” – currently paid out as a single, discrete benefit but soon to be subsumed within the benefit cap – are to be paid directly to claimants, whereas previously it was paid directly to claimants' landlords.

That the second of these proposals should be controversial is a little surprising, considering the fact that paying one's rent is the sort of thing most people will do for a substantial majority of their working lives. So I was puzzled to see Mark Easton, BBC News' Home Editor, excoriating the government, and accusing it of being “secretive*... on a matter that affects the lives of hundreds of thousands of the most vulnerable people in Britain”: the proposal to, in his words, “force social housing tenants to pay their own rent”.

Read this article.

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On communists and tax freedom

Written by Preston Byrne | Wednesday 30 May 2012

On my way into work yesterday morning, I stumbled across a passage of Thomas Paine's American Crisis with which I identified. "Universal Empire," Paine wrote, "is the prerogative of a writer. His concerns are with all mankind, and though he cannot command their obedience, he can assign them their duty."

A sensible observation, for the nature of political speech - written or otherwise - has much more in common with decree than it does with mere suggestion, and this is precisely why it can be so hostile sometimes. Polemic is almost exclusively made with the express intention that someone, anyone, should obey it; that it is the mind of the hearer which governs whether the statement is enforced, rather than the will of the utterer, does not change the intent of the thing (rarely, if ever, have I heard a politician suggest that it would be perfectly reasonable for anyone to oppose the particular policies he or she champions).

And while our democratic society gives us the freedom to decline, the power of such speech — indeed, all speech — is still latent, bubbling just beneath the surface waiting for convenient facts to arise. Whether a particular group of people find a particular statement reasonable is likely to be based in their particular circumstances, and a suggestion which a large number of people happen to find reasonable is rather more likely to become policy than one which a large number of people find unreasonable. See the Great Pasty Reversal for evidence of a recent iteration.

This annoying problem of consent is why libertarians are so often frustrated with politicians: where the core of anything which can legitimately describe itself as a liberal belief is non-coercion, such an idea can only be translated into policy through legitimate democratic means. It is therefore necessary to wait for circumstances to turn in one's favour, for people to drink your particular flavour of Kool-Aid, before one can hope for political change.

Without wishing to portray myself as a socio-political Nouriel Roubini (anyone with a good reading list or financial adviser could have deduced the same), I and others like me now believe that the time when liberal principles can do the most good for our country is now: a year and a half ago, I wrote that European democracy could destroy itself through the over-provision for social welfare, at the time thinking that this would likely take place through the election of extreme right- and left-wing elements such as occurred in the late Weimar Republic.

I also suggested that it would very shortly become clear that Western governments would find themselves in a position where they could not meet their obligations, throwing the legitimacy of that same welfare-state model into question. Both of these have now come to pass with Greece, and there is a high degree of likelihood that similar consequences will come to pass elsewhere, in a very real and immediate way.

This is where Tax Freedom Day, which took place yesterday, comes in. Tax Freedom Day is an enormously useful — and remarkably effective — rhetorical tool to show how government makes life in difficult times just that little bit more difficult. It illustrates in real terms the central liberal criticisms of government: it is too large, too out of touch, too inefficient, too unfair. As a rhetorical tool it aims to convince, not to intimidate. It is meant to invite discussion, not threats and vitriol. Unless, of course, you're a reader of the Morning Star, in which case any opinion - no matter how crude - is fair game.

Yesterday the Morning Star, a broadly Communist rag which once served as a party organ of the Communist Party of Great Britain, rode swiftly and alone into battle to spearhead an underwhelming assault from the far left on Tax Freedom Day, straining to remind us that we really do owe the state for everything from the food on our tables to the roofs over our heads to, indeed, our very lives.

After wasting the first 200 words of the article dwelling on a somewhat improbable semantic interpretation of the term "Tax Freedom", an unnamed editor of the paper admonished us that "the tax you pay isn't subsidising vacationing tax collectors' Cuba Libres and frozen daiquiris on the beach in Barbados. [what?] It's funding your roads [privatised in France]... street lights [massively energy-inefficient, the bane of amateur astronomy]... old people's lunch clubs [a nice thing to do but query whether you really need a government for that] ... ambulances [privatised in the United States]... (and) crisis teams. [again, what? Robert Downey Jr.?]"

Because of tax's ubiquity, the paper argued, no-one escapes the requirement to pay homage: "if you are an average person [I try not to be], you were born using its revenues [wrong - private], are taken care of throughout your life using tax-financed resources [also wrong, so far] and you are likely to be buried or cremated using municipal facilities" [planning for it to be wrong: Viking longboat, Nova Scotia, huge party. Everyone's invited].

What's more, the Star adds, paying taxes is not just practical, but super-fun, too. "We actually enjoy working collectively," the paper writes, arrogating to itself the responsibility of speaking for all its readers, "to provide the things we all need" -- no mention on whether the computer servers hosting their website were provided gratis by fellow comrades-in-arms. They continue: "That's what human society is all about. Working together, living together, and playing together." 

Yet despite this the Morning Star spent little time, one measly paragraph, those two sentences reproduced above, informing us how much the average leftist enjoyed paying taxes, enjoyed spending the taxes of others, and no space at all on why they do not voluntarily give up fully all of their income to the state. I suspect it is because there is that pesky word in English which is used, not wrongly, in all cases where there is a complete surrender of freedom to ruler from the ruled. We return again to Paine, who wrote that "Britain, with an army to enforce her tyranny, has declared that she has a right (not only to tax) but to 'bind us in all cases whatsoever', and if being bound in that manner is not slavery, then there is not such a thing as slavery upon this earth."

Yet, improbably, the Morning Star drove on.  "To the Adam Smith Institute," they wrote, "we send this message... if you don't like it, all you free-market, anarchistic, individualist, solipsistic entrepreneurs, why don't you all bugger off into a corner... (while) we'll get on with building a decent society that cares for everyone in need and hopefully get rid of parasites, exploiters, and, most especially, the Adam Smith Institute."

We all know the history of Communism, and its record when it comes to dealing with dissent; so, with this, I offer no more. What the article says about the state of current thinking in the British far left is another question — the answer to which I shall leave entirely up to you. 

[While we're on the topic of the Morning Star, this letter to the editor is a classic — ed.]

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Fluffy capitalism

Written by Preston Byrne | Monday 23 January 2012

Last week, as has happened many times before, the Prime Minister gave a speech.

He began by telling us things we already know -- unemployment is up, confidence is down, Labour is to blame and the Tories are here to save the day -- and said to us, with all of the stern and confident authority of an Etonian schoolmaster, that "we won't build a better economy by turning our back on the free market. We'll do it by making sure that the market is fair as well as free." Adding for the sake of prudence that "of course there is a role for government, for regulation and intervention," he took great pains to explain that "the real solution is more enterprise, competition and innovation" -- platitudinal Occidental nothingspeak with which it is virtually impossible to disagree. In order to give effect to these sweet nothings he whispered in our collective national ear, the Prime Minister proposed that the UK adopt a kind of "Popular/Moral Capitalism", a system of economic organisation without any consistent philosophical grounding which, broadly speaking, holds that we should make "markets work for all of us, to spread wealth, freedom and opportunity." (As if they don't do that already.)

I should begin by thanking the Prime Minister: mere seconds of exposure to his outrageous oeuvre of political tripe instantaneously shattered the writer's block from which I've suffered since Christmas. Eamonn beat me to the punch by publishing the post that I wanted to write. As we have come to expect from Eamonn, his reply was both succinct and persuasive; "Capitalism," he wrote, "is perfectly moral and responsible, if only politicians let it be." I would have a difficult time stating the libertarian position any better. However, I fear that Eamonn -- by discussing economics at all -- conferred upon the day's political dialogue a degree of coherence and dignity that it did not deserve. For, despite the media headlines and the earnest debate in which the two (three?) major parties have struggled to engage, what is perfectly clear is that none of them are talking about capitalism, at least not capitalism in a form that a libertarian would recognise.

Cameron's speech -- which I have, unfortunately, read in full -- revolved around three pillars. The first, "social responsibility," espoused a belief that "companies have obligations, too"; ignored was the fact that corporate salaries house, feed, clothe, and generally cater for all of the needs of the vast majority of British families, either directly in salary, or indirectly through redistributive taxation, better than almost anywhere on Earth. The second was "responsible capitalism," in short, that "everyone should share in the success of the market"; the Prime Minister failed, however, to mention that it was the market which provides all goods and services -- the X Factor, Hermes ties, cut-price Addidas trainers, toothbrushes, and CD recordings of Prokofiev's Fifth Piano Concerto -- to every living person in Britain today at a reasonable price. His third plank was the proper allocation of "risk and reward" -- which was not, as might be sensible, a critique of Beveridge's bankrupt post-war Welfare State which has, for decades, laid the cost of lassitude and sloth firmly at the feet of the taxpayer, but rather a crass and pedestrian snipe at bankers' bonuses and executive remuneration, backed neither by evidence nor anything resembling sound economic argument. And after all of this, the Prime Minister had the unmitigated gall to suggest that his non-philosophy was compatible with a world where the UK supports "the new, the innovative and the bold;" and that, when this country is "fizzing with business potential," the consolidation of "seventeen... out-dated pieces of legislation" into a single new Parliamentary Act regarding co-operative businesses was an acceptable panacea for the economic ills we face.

If this was, as billed by the Conservative Party, meant to be a major statement of economic policy, it failed, and utterly. The New Statesman called the speech "hollow", "desperately short on specifics", "abstract and often contradictory"; the Guardian, a "cop-out". Michael Deacon, writing for the Telegraph, was even more damning: "so familiar have these words and phrases become, and so elementary are the messages they’re employed to convey, that the speakers need hardly bother filling in the gaps between them to create whole sentences: they might as well just recite the buzzwords, one after another, for 20 minutes." Even the hapless Ed Miliband managed to get the proverbial jump on the Prime Minister when he proposed populist, but nonetheless practical and concrete, policy proposals for a "fairer" market, arguing for the abolition of bank charges and fare rises on trains, to name a few.

Indeed, on closer examination, nowhere in the Prime Minister's proposals was there to be found any idea to enhance "enterprise, competition and innovation" -- no reduction of the tax burden, no loosening of employment law to enable greater private-sector hiring, no paring back of the Welfare State (which is, in effect, a subsidy for labour for which everyone pays) -- in other words, nothing which would actually improve the British economy or the lot of the British population. Furthermore, his proposals for the improvement of the market were not proposals, but rather, descriptions of the market's essential characteristics; markets necessarily reward their participants as they, per Hayek, teach consumers "who will serve us well: which grocer or travel agency, which department store or hotel, which doctor or solicitor," which shop floor assistant, which tube driver, which banker -- and teach suppliers how "to provide the most satisfactory solution for whatever particular personal problem we have to face." There is no room for morality here: either a man provides a service well, or he does not, and in a free society, should he fail, it is fair and right that his client -- not some indeterminate and fluffy Big Society ethics -- be the ultimate arbiter of his success.

In short, the mainstream debate which we read about in last week's papers has nothing to do with morality and capitalism: what the Prime Minister proposes is not moral and is not capitalism. And it is incumbent upon us to remind him of that.

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Think piece: "War or Class or some combination of the two"

Written by Preston Byrne | Monday 05 September 2011


The London riots seemed to confirm everybody's worldview, however different those views were. Was there some overarching lesson about class or the state, asks PJ Byrne, or were the riots simply a sad reminder that we are all animals, capable of good and bad choices?

Last month, Tom wrote that he was "glad to be out of London while the rioting and looting was going on", for while "it may have been chilly and damp in the Lake District... it was also peaceful and quiet." Nonetheless, he added, "watching the footage on the news, I couldn’t help thinking that most of those responsible were ‘looters’ long before they started smashing up JD Sports and setting shops on fire." Tom then provided an example of what he meant by quoting an extract from Ayn Rand's epic novel Atlas Shrugged, staple fare for any libertarian firebrand, where key protagonist Francisco D'Anconia said:

"when a society establishes criminals-by-right and looters-by-law—men who use force to seize the wealth of disarmed victims—then money becomes its creators’ avenger. Such looters believe it safe to rob defenseless men, once they’ve passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality."

Tom's implication was, at least to me, abundantly clear: the looters were merely acting as they had been taught by the welfare state, by assuming that they were entitled, by right, to the property of others in a topsy-turvy world where the role of government, "instead of being a protector of man's rights... is becoming their most dangerous violator; instead of guarding freedom... is establishing slavery; instead of protecting men from the initiators of physical force... is initiating physical force and coercion in any manner and issue it pleases". (Rand, 1964) [Continue reading...]

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They just don't get it

Written by Preston Byrne | Tuesday 02 August 2011


I arrived home last night to find a copy of the Westminster Reporter-- a "free" taxpayer-funded publication produced by Westminster Council-- under my front door. Usually I take these sorts of things and throw them away, but sometimes Hayek, Mises, or Pennington can be a bit much after a long day at the office, and a little light reading is welcome relief. So I plunked down on the couch and decided to have a read.

Predictably, the magazine was not exactly high literature, and was mostly an effort by the Council to justify its own existence. It was mildly successful in this regard. Take, for example, this: "a new police car is to patrol Little Venice and Maida Vale". Fair enough. Or this: "a Night Warden has been patrolling Edgware Road to reduce noise, litter, and anti-social behaviour". Not a bad idea, if a touch Sisyphean-- and that job is perhaps better suited to a policeman but hey, they get points for effort. Or, pushing the envelope a little, this: the Council is planting a few dozen trees near the Marylebone Road "(to) help reduce pollution in the immediate area". A dubious claim, but trees are our friends, right? I suppose I could get behind that.

In fact, that's pretty much the whole magazine: a saccharine exposition of public expenditure in the City of Westminster, presented in a social-democratic, U-Rated film sort of way, rather like watching the Lion King in black and white without the sound on, designed so that its reader feels nothing and, in particular, finds nothing objectionable.

Unfortunately for the Reporter, its editor probably didn't count on it being read by a die-hard libertarian with a knack for criticism, so when the Council tried to show off a bit, it was bound to get itself into trouble. One such example from the most recent edition is when the Council bragged about a new £113,000 gym facility which had been opened up in Paddington that, it said, had a staggering "eleven pieces of free-to-use equipment" (£10,272.72 per machine), including "running machines (within twenty minutes' walking distance of Hyde Park), recumbent bikes (in a city with a free bicycle hire scheme), tai-chi balance discs (£14.95 on and a multi-stretch station" (an activity that everyone I have ever known, anywhere in the world, does perfectly well all by themselves).

And what's more, all of this is out of doors-- that's right, running machines and stationary bicycles bolted firmly to the ground, outdoors, in one of the wettest and coldest countries on Earth.

Worse than its fiscal indiscretions, however, the Council has proven incapable of making spending decisions that are well-grounded in philosophy-- in plain English, "they just don't get it". This summer's Reporter triumphantly announced that Westminster would soon be home to the UK's first Parkour / freerunning course, to open at Westminster Academy; no doubt government-funded and very expensive, the course will "feature obstacles for people of all abilities and ages and will showcase a... free flow area where practitioners can combine a range of moves to test their skills", but only, of course, if they get a competency certificate first.

This is, put plainly, stupid: the whole point of freerunning is to take the oppressive and compartmentalized urban milieu, made of walls, automobile thoroughfares and fences, and to transcend it through creative expression; it is non-competitive and totally unregulated, and in this way, thoroughly anarchical in character. Put it in a box, and you kill the sport; though maybe this isn't entirely surprising, given that we now know what Westminster thinks about anarchists.

Thus this very short survey of welfare-state silliness draws to a close. This is usually the point where, in my short writings for the ASI, I tend to borrow a line from some long-dead economist and relate it to some greater truth about life. The truth about government expenditure, however, is so mundane, so pathetic, so straightforward, that a reference to theory seems scarcely necessary.

That truth is this: at all times, someone, somewhere, in government is taking your money and spending it in the worst possible way. And this is a state of affairs to which we all must strenuously object.

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