The most dangerous people in the world

[Robert Henderson]

The most dangerous people in the world

Robert Henderson

Contents

The most dangerous people in the world
Laissez faire as religion
The historical background to laissez faire
The personnel of the religion
Why elites are so keen on "free markets" and "free trade"
Laissez faire for the banks is a one way bet
The cost of the current banking failure
Laissez faire makes you richer
What needs to be done - First, nationalise the banks
What else should be done?
What is likely to happen
What are governments for?
Terrorists, traitors or mentally ill?

The most dangerous people in the world

Imagine a group of ideologically driven people spread throughout the
world whose wish is to ruthlessly shape the world in their own image.
Imagine that their ideology is such that it has severely damaged the
societies in which its proponents have gained influence and power.
Imagine that this group is immune to reason, adhering to their ideology
regardless of how it corresponds to reality or how much damage it does.
Imagine that the ideology is such that it requires its followers to
transcend all natural group affections such as the tribe, clan or
nation. Imagine men and women to whom treason is so much second nature
that they have no conception that what they do is treason.

What groups might meet those criteria? Catholics during the Reformation
would fit much but not all the bill, Marxists would be a near perfect
fit for much of the twentieth century and radical Muslims would make a
fair fist of the description now. But there is another such group in the
world, a group which has existed for more than two centuries and which
is now far more powerful and universal in its reach than any other
ideologically driven group in history and consequently more
destructive. ,

As a revolutionary political creed, the group’s ideology has evolved
from a desire to engage in the reckless reformation of a nation’s
natural economy linked with a vague idea of the universality of Man, to
a political position which includes the deliberate settlement of its
territory by millions of foreigners and the removal of the ability of
the native population to meaningfully to protest through non-violent
means by the transfer of the country‘s sovereignty to supra-national
powers by devious means. This group is not called terrorist; its
proponents hold and implement their ideology unhindered by the law in
the most advanced societies in the world and in many of those societies
it has become the elite’s creed.

The ideology is liberal internationalism. It originally rested on the
laissez faire economics of so-called free markets (so-called because
they rely on state intervention to prevent monopolies forming) and free
international trade bound in with the Enlightenment idea of the
Universality of Man. To this original portfolio has been added the idea
of unrestricted movement of peoples across national boundaries, with
labour treated simply as a factor of production , and the totalitarian
system of thought we know as political correctness, a propaganda system
designed to both underpin the liberal internationalist ideal and deal
with the social frictions created by the implementation of the ideal.
(Political correctness meets the criteria for a totalitarian ideology as
it potentially touches every aspect of life because the concept of
discrimination can be applied to any human situation and because it
claims that the only acceptable view on any aspect of life which it
touches is the politically correct one).

You think it is absurd to say this group is the greatest existing threat
to world peace or our own society? Not if an objective assessment is
made of the damage - economic, political, social and cultural - which
they have caused in their various guises over the past century and a
half.

Take the British example. Islamic terrorism has to date produced a toll
of just over 50 dead and 900 injured in Britain, all from one dramatic
event in July 2005 The peripheral effects of these terrorists have
been a reduction in the legal safeguards for those accused of a criminal
offence, a worrying increase in the surveillance powers of the British
state and a decrease in the freedom of speech through both fear of
Muslim reprisal and zealous action by the state in repressing criticism
of Islam.

That is serious damage, which will doubtless become more serious as time
passes, but when compared with the consequences of liberal
internationalism for Britain since the middle of the 19th Century its
significance is utterly dwarfed, for that is a litany of catastrophic
periods of economic failure, enhanced class hostility, the wilful
creation of racial and ethnic strife, war and the destruction of
democratic control. Indeed, one of the malign consequences of liberal
internationalism is the modern Islamic extremist threat to the West,
for that is the child of mass Muslim immigration to the first world,
the gross provocation offered by aggressive wars against Muslim
countries by liberal internationalist war-mongers and the willingness of
politicians under the spell of political correctness to pander to
extremist Muslims within their societies.

Although liberal internationalism has become swollen from an economic
theory to a fully fledged totalitarian ideology, laissez faire
economics is still its prime engine and provides a skeleton upon which
the flesh of the later ideas rests. Because of this I shall
concentrate most of my fire on the nature and implications of that
economic theory.

Laissez faire as religion

The enemy of rationality is ideology . By an ideology I mean a mental
construct which consists of a menu of tenets which the adherent applies
without regard to their utility or truth. The observance of the ideology
becomes an end in itself. All ideologies are inadequate to a lesser or
greater extent, because they are menus of ideas which are variously
(1)incompatible, (2) inadequate descriptions of reality and (3) based on
premises which are objectively false or at least debatable.

Laissez faire followers are ideologues par excellence. They fancy
themselves to be rational, calculating beasts. In reality, their
adoration of the market is essentially religious. They believe that
it will solve all economic ills, if not immediately, then in
the medium to long term. Their attitude towards Adam Smith’s
Invisible Hand is akin to the quasi-religious worship that intellectual
Marxists accord to the dialectic. If there was something akin to the
Lord’s Prayer for the laissez faire congregation to chant it would
runs along these lines:

Our Invisible Hand
Which art in the Market,
Hallowed be Thy name .
Thy economic Kingdom come
Thy will be done In Earth,
As it is in the Chicago School textbooks.
Give us this day our daily profit
And forgive us our losses,
But allow us to dun
Those who debt against us.
Lead us not into patriotic temptation
And deliver us from state intervention
For Thine is the economic kingdom
and the Market power and selfish glory
For ever and ever
Amen

Armed with this supposed objective truth, they proselytise about
the moral evils and inefficiencies of public service and the
wondrous efficiency and ethical outcomes of private enterprise
regardless of the practical effects of their policies or the frequent
misbehaviour of those in command of large private companies

Like the majority of religious believers, they are none too certain of
the theology of their religion. (I am always struck by how often
advocates of laissez faire lack a grasp of even basic economic theory
and are almost invariably wholly ignorant of economic history). They
recite their economic catechism sublime in the concrete of their
ignorance or vouchsafe their fidelity with declarations such as “Those
of us who believe with every fibre of our being in the free market
should not condemn anyone for discovering a new commercial opportunity
to fill in the gap between the summer holidays and Christmas: but that
does seem to be what Hallowe'en is all about these days.” ( I find
Hallowe'en frightfully frightening By Simon Heffer 31 Oct 2009
Telegraph)

“Those of us who believe with every fibre of our being in the free
market ...." As clear a statement of religious belief as you could wish
for. The idea that one can have an emotional relationship with an
economic theory is distinctly odd - Marxism was never just that because
Marx loaded it with the revolutionary struggle and other such emotional
excitements. Any normal person will address economic matters
pragmatically and be concerned with ends not the means to ends.

Like all religious believers, the laissez faire adherents have to
continually stretch their ideology to accommodate pesky facts that clash
with their theology. They are in a particularly difficult position at
present because the banking crisis is the child of an extreme laissez
faire policy followed by politicians with a consequent lack of public
control and oversight. They try to hide from the fact that their god has
feet of clay in various ways. Let us have a glance at the most popular
of these denials of reality.

Take this statement by Ambrose Evans-Pritchard of the Telegraph:
" It is not a good moment for the poster-child of the flat-tax
revolution, but those crowing the end of "Margaret Thatcher's Baltic
Model" neglect half the story. Estonia's euro peg is anything but
free-market. It makes Tallinn dance, awkwardly, to Frankfurt's distant
tune. It stoked the boom by enticing people to borrow cheap at eurozone
rates: it is now prolonging the bust..."Telegraph Debt deflation
laboratory of the Baltics

Here we have the laissez faire equivalent of Communists saying communism
never failed because it was never tried. Evans-Pritchard is of course
correct when he says that Estonia is not a kosher laissez faire
paradise. This is unsurprising because no country has ever been such an
economic Eden and none ever will, because it would require an anarchic
situation to achieve true laissez faire and that will never happen.
Therefore, in the eyes of the likes of Evans-Pritchard laissez faire
will never fail.

Then there is the barefaced volte-face without any acknowledgement that
there has been one: “ City's growing influence may have been a bad
influence on Britain” (Daily telegraph Tracy Corrigan 23 Jul 2009).
This from a newspaper which has lauded the City to the skies until the
credit crunch arrived.

Next comes the outright refusal to acknowledge what has happened: "
“We had grown rather accustomed to singing the praises of free
financial markets. The crisis threatens to discredit them. But this
crisis was not the result of deregulation and market failure." (There's
no such thing as too big to fail in a free market (Telegraph 5 Oct 2009
Niall Ferguson).

To this can be added the perversion of language to misdescribe that
which does not fit the ideology, Here’s a prime example with someone
trying to bring public and civil society behaviour within the laissez
faire fold: "the non-market part of the free economy". (Telegraph
Philip Booth 18 10 2009 What this year's Nobel Prize winners can teach
the Conservatives ). “Non-market part of the free economy?“ As
John Wayne remarked in one of his films to someone who challenged him to
a friendly fight "I ain't ever heard of one o' them..." Talk about
trying to fit a square peg into a round hole.

Finally there is that old favourite when all else fails, the argument
from authority. Edmund Conway provides a first rate example (Telegraph,
Edmund Conway looks at the economic principle of comparative advantage,
01 Sep 2009). He enumerates the disadvantages of comparative advantage -
an idea at the heart of laissez faire - such as reduced self-sufficiency
and the dangers of a narrow economic base, but cannot bring himself to
throw down his idol and concludes "Nevertheless, most economists argue
that comparative advantage is still one of the most important and
fundamental economic ideas of all, for it underlies world trade and
globalisation, proving that nations can prosper even more by looking
outwards rather than inwards."

Comparative advantage is a good example of how wish-fulfilment trumps
reality for the laissez faire believer. The iron logic of the idea is
that each nation (or a region within a nation or even a supra-national
region) becomes less self-sufficient because the notion demands that
each region or nation concentrates on the economic activities at which
it is most proficient and discards those at which it is inferior. That
has the consequence of a nation or region being at the mercy of other
nations or regions for essential goods and services. It is also liable
for catastrophic structural unemployment because if the economic base
is narrowed dramatically, changes in fashion or the emergence of a
foreign competitor who takes your trade, the industry in which you have
an advantage collapses. The narrowing of the economic base also reduces
the opportunity of a society to advance. Look at much of the Third
World.

In the 1840s and 1850s the likes of Ricardo, Bright and Cobden were
urging Germany to forget about industrialising and concentrate on their
"comparative advantage" in agriculture. Does anyone honestly believe
that would have been in Germany's interest?

Comparative advantage is a prime example of an intellectual (David
Ricardo) getting carried away with an idea whose simple economical
beauty blinds him to the fact that it is based on a chain of
absurdities, namely, that there will always be free trade between
nations, that wars will not intervene, that all nations will play the
non-protectionist game, that there will never be scarcity of food or
raw materials, that demand for products will remain stable.

But the difficulty for the laissez faire worshipper is much deeper than
the absence of perfection or the failure of the real world to behave as
laissez faire economics says it should behave, The theory is being
based upon a lie . The lie is that the markets they call free are
actually free . The natural end of a truly free market is monopoly or
at least greatly reduced competition. For this reason all advanced
states have anti-monopoly laws which interfere with the natural workings
of the market. The market created is consequently not a free market but
a state controlled one, and one which is controlled in the most
fundamental way.

To that gross interference with the market may be added state granted
privileges of limited liability, patents, copyright and trademarks and
the varying tax regimes, laws affecting economic activity such as
health and safety legislation and state institutions such as the police,
defence and justice.

The problem with laissez faire as a modern economic theory is that its
still holds firmly to classic economics. For example, it has long been
howlingly clear that individuals do not act rationally in the sense that
classical economists imagined and hence market efficiency as Adam Smith
envisaged it - as the summation of rational individual decisions - does
not exist. The existence of economic bubbles alone should have stopped
it ever gaining credence. Yet the general thrust of laissez faire
economics tacitly at least still rests on the idea that drove
Smith’s theory. Indeed, if this was not the case the laissez faire
advocates would be reduced to the absurdity of saying the market
produces rational and beneficial outcomes from behaviour which is
frequently (in economic terms) irrational and damaging to the
individual who engages in it. .

If you want an example of one of Richard Dawkins' memes (mental viruses
which capture the mind) at its most virulent, you can't do better than
the addiction to unbridled laissez faire displayed in the face of all
the overwhelming evidence that its overall effects are pernicious.

The historical background to laissez faire

The religion has its roots in the first half of the 18th century when
there were occasional attempts to suggest tariff reform, but the idea
only became a serious political policy in the 1780s with the advent of
Pitt the Younger as Prime Minister in 1784 who long toyed with
"economical reform".

The 18th century also provided the religion with its holy book, The
Wealth of Nations by the Scottish philosopher and economist Adam Smith.
This strongly argued for "free markets" and "free trade", but Smith
also recognised the demands of national security, the need for
government to engage in social provision such as road building and
maintenance which would not otherwise be done and, must importantly,
the nature of a society and its economy. Here is Smith on the
Navigation Acts: "...the Act of Navigation by diminishing the number of
buyers; and we are thus likely not only to buy foreign goods dearer,
but to sell our own cheaper, than if there were a more perfect
freedom of trade. As defence, however, is of much more importance than
opulence, the Act of Navigation is, perhaps, the wisest of all the
commercial regulations of England." (Wealth of Nations Bk IV. ch ii)

But Smith and his book suffered the fate of all those who found
religions, secular or otherwise. As the decades passed Smith's cautious
approach was redrawn in the minds of his disciples to become a
surgically "clean" mechanical ideology in which all that mattered was
the pursuit of profit and the growth of trade and industry through the
application of the "holy edicts" of open markets and comparative
advantage. The disciples, like other religious believers, avidly
quoted the passages from their holy book which suited their purposes
and ignored those which did not. They also found a further holy text in
Thomas Malthus' Essay on Population of 1802, whose predictions,
although unproven by events, could be used to demonstrate that
economic expansion was vital if widespread starvation was not to occur.

The clinical, soulless and inhuman nature of the laissez faire idea
as it evolved is exemplified by the English economist David Ricardo.
Here is a flavour of his mindset: "Under a system of perfectly free
commerce each country naturally devotes its capital and labour to such
employments as are most beneficial to both. The pursuit of individual
advantage is admirably connected with the universal good of the whole.
By stimulating industry, and by using most efficaciously the peculiar
powers bestowed by nature, it distributes labour most economically,
while increasing the general mass of the production it diffuses general
benefits, and binds together by one common tie of interest and
intercourse the universal society of nations". (David Ricardo in The
fall of protection p 174).

The Napoleonic wars largely foiled Pitt's wish for broad reform and
placed "free trade" in suspended animation as a serious political idea
until the 1820s, when cautious attempts at tariff reform again were
made. But underneath the political elite was a radical class who were
very much enamoured of wholesale economical reform. With the Great
Reform Act of 1832 they were given their opportunity to become part of
the political elite. They took it with both hands, their most notable
and extreme proponents being John Bright and Richard Cobden backed by
the intellectual power of David Ricardo - all three became MPs.

Within a dozen years of the first election under the Great Reform
Act's passing, Parliament had been captured by the disciples of Adam
Smith and the pass on protection had been sold by of all people a Tory
prime minister, Sir Robert Peel, an action which kept the Tories from
power for most of the next 40 years.

Such was their religious credulity that the "free traders" advocated
not merely opening up Britain's markets, both at home and in the
colonies, to nations who would allow Britain equivalent access to
their markets, they advocated opening up Britain's markets regardless
of how other nations acted. The consequence was disastrous for
Britain.

Disraeli in a speech on 1st February 1849 cruelly dissected this
insanity:" There are some who say that foreigners will not give us
their production for nothing, and that therefore we have no occasion to
concern ourselves as to the means and modes of repayment. There is no
doubt that foreigners will not give us their goods without exchange for
them; but the question is what are the terms of exchange most
beneficial for us to adopt. You may glut markets, but the only effect
of your attempt to struggle against the hostile tariffs by opening
your ports is that you exchange more of your own labour each year for
a less quantity of foreign labour, that you render British labour less
efficient, that you degrade British labour, diminish profits, and,
therefor, must lower wages; while philosophical enquirers have shown
that you will finally effect a change in the distribution of the
precious metals that must be pernicious and may be fatal to this
country. It is for these reasons that all practical men are impressed
with a conviction that you should adopt reciprocity as the principle
of your tariff - not merely from practical experience, but as an
abstract truth. This was the principle of the commercial negations at
Utrecht - which were followed by Mr Pitt in his commercial
negotiations at Paris - and which were wisely adopted and applied by
the Cabinet of Lord Liverpool, but which were deserted flagrantly and
unwisely in 1846". (The fall of Protection pp 337/8").

Ironically, the laissez faire worshippers make the same general
errors as Marxists. They believe that everything stems from economics.
For the neo-liberal the market has the same pseudo-mystical
significance that
the dialectic has for the Marxist. Just as the Marxist sees the
dialectic working inexorably through history to an eventual state of
communism (or a reversion to barbarism to be exact), so the neo-liberal
believes that the market will solve any economic problem and most
social ills. Neither ideology works because it ignores the reality
of human nature and its sociological realisation.

The one track economic mentality of the early "free traders" is well
represented by the father of J S Mill, James Mill: "The benefit which is
derived from exchanging one commodity for another arises from the
commodity received rather than the from the commodity given. When one
country exchanges, or in other words, traffics with another, the
whole of its advantage consists of the in the commodities imported. It
benefits by the importation and by nothing else. A protecting duty
which, if it acts at all, limits imports, must limit exports likewise,
checking and restraining national industry, thus diminishing national
wealth." (The fall of protection p 174). And to Hell with any social or
strategic consideration or changing economic circumstances.

After the Great War and the fall of "free trade" as public policy in
1931, the religion went underground for nearly fifty years. When it
re-emerged as a political idea in the 1970s the politicians who fell
under its spell were every bit as unquestioning and credulous as those
of the 1840s. Tony Blair' statement on Globalisation, ie, free trade,
at the 2005 Labour Party Conference shows that it is alive and
kicking today. Scorning any attempt to discuss Globalisation, Blair
said of those who wished to oppose it "You might as well debate whether
autumn should follow summer". (Daily Telegraph 1 10 2005.)

The personnel of the religion

It is easy to see the attractions of laissez faire for certain types of
mind. There is the emotional satisfaction of having an ideology which
is both easy to grasp at its most basic level - the market as a
quasi-god - and a cast iron promise that if its dictates are followed
prosperity will follow. It is, for the materialistically inclined,
Heaven on earth, jam today not tomorrow. Those attributes will appeal
to both those who want a general guide to what they should do and think
rather than having to do the hard mental labour of making pragmatic
decisions as events occur - how satisfying to chant "Public bad,
private good" rather than having to think - and to those who are
suckers for promises of a new Eden if only they will keep the faith.
The third type of mind it will appeal to is the intellectual who can
build the must marvellous academic castles in the air using the basic
tenets of the ideology.

But laissez faire is not sustained simply because the ideology is
attractive. Like every other religion it draws its willing adherents not
only from those temperamentally suited to a surrender to an ideology.
but from those driven by motives such as a wish to exercise power, the
opportunities any ideology gives for control, ambition, the desire to
ape those with power, and greed

To these willing adherents must be added those who pay lip service to
the creed for fear that to do otherwise would be personally
disadvantageous on a scale running from having advancement in a career
damaged to being downright dangerous.

The interplay of these motives together with the fact that the those
who adhere to laissez faire remain in power, explains why nobody but
nobody in modern Britain in a position of authority or influence will
accept responsibility for the present financial mess. Some are simply
unable to accept that their god has failed. Others realise that the god
has failed but will not admit it because they know that if they now
start questioning the economic system which has failed, they will be
held responsible for previously advocating its merits and promoting its
implementation. Most importantly, many mainstream politicians either
act as apologists for laissez faire economics or at least refrain from
criticising it from pure self-interest as they await highly paid
sinecures in the public and the private sectors once their serious
political careers are over, sinecures which could abruptly vanish if the
laissez faire boat is rocked.

The consequence of this is that no one has been brought to book for the
criminal recklessness and why despite all the political huffing and
puffing against bankers the banks have remained largely untouched by
public control even where they are nationalised in part or whole and
those responsible for regulating the banks have kept their positions. .

Why elites are so keen on "free markets" and "free trade"

An ideology may have its attractions, but that does not explain why it
becomes the ideology of an elite. Innumerable ideologies, sacred and
profane, have come and gone without achieving such a status.. Sometimes,
as with the French and Russian Revolutions, a dramatic event catapults a
group with a particular ideology into power, but in a country such as
Britain with a very long tradition with representative government, the
ideological capture of an elite has to be by more subtle means. The
answer lies in the self-interest of the elite which emerged after the
Great Reform Act when the balance of power began to shift from the
landed aristocracy to the bourgeoisie. That elite gradually evolved into
a broader middle class movement which in turn is evolving into a
supra-national class, a class which is closely bound up with big
business.

"I just think that a lot of modern corporate capitalists -- the
managerial class basically -- has no loyalty to any country anymore, or
any particular values other than the bottom line." (Pat Buchanan quoted
by Daniel Brandt in his article "Class Warfare" in issue 13 of
Namebase Newsline -http//www.namebase.org/news13.html).

Buchanan is grasping a demon which he only dimly apprehends. What is
happening is vastly more significant than simply gaining economic
advantage. We are presently witnessing the creation of an international
class of plutocrats who care for nothing but their own class.
They have the potential to form a true international aristocracy.
If that happens, the imperfect democratic control the masses have
been able to exert over their elites in the past century will end.
The prime tool for the creation of such an international aristocracy
is "free trade".

There are parts of Western elites which are reluctant to embrace
"free markets" and "free trade", but the general economic trend is
clear: the internationalist, globalist creed is the dominant philosophy
when it comes to trade and increasingly the idea of laissez faire in
the domestic sphere is being accepted in practice if not always in overt
political policy.

Why have Western elites moved from the socially oriented
nationalism which dominated most of the twentieth century to laissez
faire driven internationalism? The answer is simple: internationalising
politics gives them greater political control. Laissez faire with its
add-ons of mass migration and the emasculation of the nation state
provides a means to subvert the power of the masses to restrain the
abuses of elites through democratic control.

From the point of elites socially oriented nationalism was an
aberration. In most circumstances throughout history the wishes of the
mass of a population have been of little or no account in any
formal sense. The masses made their presence felt through
rioting - the historian Lewis Namier memorably described the
government of 18th century England as “aristocracy tempered by
rioting” - and social disturbance or as catspaws in the service of
elite members who wished to rebel. An elite took note only when they
were frightened enough - the creation of a form of national public
assistance by the Poor Law of 1601 is a classic example of such
behaviour.

Eventually, representative government evolved to the point where the
masses began to have a direct say in the political process through the
vote. The elite as a group did not welcome this but felt it could not
be resisted. It was not democracy to be sure but elective oligarchy,
which was buttressed by elite constructed devices to exclude new
entrants into the political process such as first past the post
voting, election deposits and a very strong party system. Nonetheless,
once the franchise was broadened the masses were able to exercise a
large degree of democratic control because politics was still national
and a political party had to respond to the electors' wishes. The elite
resented this control over their behaviour as all elites do and looked
around for a way to diminish democratic influence. They found the means
to do it through internationalism.

In a sovereign country elected politicians cannot readily say this
or that cannot be done if it is practical to do the thing.. That
is a considerable block on elite misbehaviour. So elites decided that
the way round this unfortunate fact was to commit to treaties which
would remove the opportunity for the electorate to exercise control.
A most notable example is the Treaty of Rome and the subsequent
treaties which have tied its constituent members into the EU. Vast
swathes of policy are no longer within the control of the EU members
because of these treaties. Add in the treaties tying Britain to the UN
and the WTO and the commitment of every mainstream British party to
them, and democratic control has essentially gone.

But internationalism is not simply a bureaucratic elite device to
weaken democratic control, it is a sociological event in itself. An
elite thinks of itself as a separate group, a group which may in some
circumstances extend beyond national boundaries and jurisdictions.
The medieval aristocracies of Western Europe thought themselves part of
a chivalric whole. When Charles I of England was executed in 1649
the monarchs of Europe were horrified because they thought it would
set an example for other royal killings.

The ruling elites in the First World today have a class interest which
binds them more closely to one another than to the people they rule.
Indeed, there is arguably a greater sense of international elite
solidarity than ever before. This is because modern communications
allow people, goods and ideas to move with an unmatched ease. Because
of this the international class can constantly revitalise and extend
their group solidarity.

The advantage to the elites of this culturally based international
solidarity underwritten by many personal elite relationships across
national boundaries, is that it allows them to weaken even further
their dependence upon their immediate (native) populations, because
not only does a particular national elite have a ready made excuse for
not doing something - “Our treaty obligations will not permit it”
- but the personal relationships and the growing sense of class
solidarity
increases the confidence and hence the willingness of the various
national elites to act ever more in the international elite class
interest. Indeed, the more they are together and the more they act
together, the more natural it will seem.

It is important to understand that elites are not engaged as a group
in a conscious conspiracy against the masses. What happens is that the
psychological and sociological forces which press upon us all push the
elite to adopt policies which always lead to their retention of power.
It is not difficult to see how this happens.

All human beings have a powerful ability to write a narrative in their
heads which will persuade them that they act not from self-serving or
disreputable reasons but honourable and socially useful ones. The
consequence of this is that while individual members of an elite will
consciously comprehend the likely effect of their ideology, the
majority will simply accept their ideology at face value. This helps to
bolster and stabilise the elite's position because no secular elite
ideology ever overtly states that the masses will be disadvantaged
if the
ideology is followed, and in the case of formal democracies, the
ideology positively claims to materially better society as a whole.
This will emotionally reassure most elite members, who will bolster
their acceptance of the ideology through inter-elite conversations - if
most or all those in a group are positive about something, that is
most powerful social reinforcer.

It is important to understand how we got into the present mess.
Despite the widespread ignorance of and economic theory and history
amongst the elite , it wasn't primarily an intellectual failure amongst
those with power but one of character. Some failed to act rationally
because of their inability to resist the laissez faire ideology, others
failed because they feared the consequences of speaking out against the
elite ideology, some failed because they had a vested interest in
maintaining a system which paid them well.

Laissez faire for banks is a one way bet at present

The fragility of the belief in laissez faire economics can be seen by
the readiness of almost all of the supposedly big bad free marketeers
to rush for the support of the State when things go wrong. As the
Government almost invariably steps in when it is a bank going bust,
being a banker is a one way bet: the bank makes money you get the
vast remuneration: the bank fails the taxpayer steps in and you do not
suffer any punishment such as summary dismissal, the removal of limited
liability if you are a director or criminal proceedings, but are
dismissed with a massive pay-off at worst and continue to be employed
on the same outrageous remuneration terms as you were before the
taxpayer had to bail out the banks.

There is existing law which could be applied to culpable bank directors
but never is. Section 174 of the 2006 Companies Act details the duties
of the directors as follows :

(1) A director of a company must exercise reasonable care, skill and
diligence.
(2) This means the care, skill and diligence that would be exercised by
a reasonably diligent person with—
(a) the general knowledge, skill and experience that may reasonably be
expected of a person carrying out the functions carried out by the
director in relation to the company, and
(b) the general knowledge, skill and experience that the director has.

How can the directors of RBS, HBOS, Lloyds TSB and Northern Rock be
said to have met these requirements? Lloyds TSB have even admitted that
inadequate due diligence was done before the takeover of HBOS.

There is also the question of general competence. The alarming truth is
that the executive directors of banks almost certainly did not
understand the complex financial packages being devised by their
investment arms which led to the crisis. On 10 February 2009 the
recently removed executive directors of the RBS and the HBOS appeared
before the Commons Treasury Select Committee: Sir Fred Goodwin (ex-RBS
chief executive) and Sir Tom McKillop (ex-RBS Chairman),e Andy Hornby
(ex-HBOS chief executive) and Lord Steveson of Conandsham (ex-HBOS
Chairman).

During their examination by the committee, each of the four directors on
show was asked to detail their formal banking qualifications. All four
had to admit that they had none. I am generally an enemy of
credentialitis, but in this case technical qualifications are necessary
to ensure that the directors understand the very complex financial
instruments being used and the exotic accounting practices employed by
large corporations. If failure to understand such things does not amount
to gross negligence what does?

The Companies Act allows shareholders, subject to the agreement of a
court, to sue directors for negligence, default, breach of duty or
breach of trust. No attempt has been made to removed their limited
liability to allow this to happen. Nor, as far as I can discover, has
any attempt has been made to get bank directors banned from holding
directorships in the future. Why have the institutional shareholders
not started such legal action to remove limited liability from directors
so they can be sued? Why has no politician raised the possibility of
banning ex-bank directors from being directors in the future? The only
plausible reason is the tacit class interest encompassing politicians,
bankers and large institutional investors, the last being the only
non-governmental people generally with the financial muscle to fund
actions to remove the limited liability of directors. There is a simple
legal way to stop them enjoying the fruits of their ill-gotten gains:
remove their limited liability and ban them from holding directorships
for life.

As for criminal charges, I wonder if something could not be done under
the laws relating to fraud. There must come a point where recklessness
behaviour becomes fraud because the director knows they are taking
chances which will most probably not come off. For the future we need a
law of reckless endangerment which would make any director who
endangered a bank or allied institution through their criminally
reckless behaviour to be punished by the criminal law.

The culpable bankers should be punished both from common decency and to
deter others in the future. Those who are saying "we must move on" are
arguing a nonsense. Let's try that argument with a few other scenarios:
X murdered Y but there is no point in recriminations: we must move
forward; X stole £50 million from his employer but that was in the
past: we must move on. Doesn’t really work does it? The argument
politicians and bankers both employ promiscuously that to concentrate on
bankers’ pay is to distract from the real issue of what is to be done
about the economy is simply special pleading: reforming bankers’ pay
is part of dealing with the economic mess because if they have the same
incentives to misbehave in the future and no penalty is paid by those
who have misbehaved in the past there will be no reason not to misbehave
once more. .

Far from being punished, bankers who have left the banks they have
helped ruin have received gigantic pay-offs to reward them for their
incompetence. The case best known to the public is that of Sir Fred
Goodwin of RBS who originally was to receive an immediately payable
pension of more than £700,000 per annum,(since reduced to a more modest
£400,000 odd ) but he does not stand alone. To take a couple of other
examples, according to the Telegraph (27 Feb 2009) “Eric Daniels, the
chief executive of Lloyds Bank, which has accepted tens of billions of
pounds from the Government, could receive almost £10 million in pay,
perks and bonuses this year”, while Adam Applegarth, the chief
executive of Northern Rock when it failed, a bank so badly damaged
that it is now wholly owned by the British taxpayer, reportedly
trousered £760.000 (Northern Rock boss to get £760,000 payoff
Telegraph Tony Undercastle 31/03/2008).

Nor is it only bankers who have been so lucky. viz: “Clive Briault,
the official in charge of supervising Northern Rock when it collapsed,
received a payoff of almost £530,000 after parting ways with the
Financial Services Authority, it emerged yesterday. The payoff took Mr
Briault's total remuneration for the year to almost £884,000. FSA chief
executive Hectors Sants collected cash, bonuses and other benefits
totalling £662,000, compared with the £652,577 received by his
predecessor John Tiner, despite the FSA's own critical report into
regulatory failings that culminated in the Northern Rock fiasco. “
(£530,000 farewell for FSA official who watched over Northern Rock
Peter Taylor Telegraph 01/07/2008).

As for politicians. not a single person responsible for the mess has
taken any responsibility. The person most at fault is of course Gordon
Brown, who in more then ten years as chancellor debauched the British
economy through massively expanded public spending and his role as
cheerleader-in-chief for the excesses of the financial sector.

Since the development of this economic crisis the Government has been
advocating what they represent as a Keynsian solution. The problem is
that they are only giving us half of Keynes,. There are two parts to
his theory: the prudence of government in reducing public debt in good
economic times and the use of public money to boost aggregate
consumption in bad economic times. In fact, even that does not do Keynes
justice, because he advocated public spending to boost demand only as a
very last resort after time had shown that the self-righting corrective
of the market had failed. Gordon Brown as Chancellor neglected the
prudent part of Keynes with the consequence that we arrived at the
credit crunch is unprepared to carry out the second part of Keynes.

As for the independent economic “experts" who supported laissez faire
, have they suffered from their failure to predict what was happening?
Not a bit of it. They still occupy their posts in the media, think
tanks, private consultancies and academia, drawing their pay and
pontificating as if their misjudgement and misunderstanding of economics
had never happened.

There is no excuse for the failure to predict the financial collapse.
It was of course impossible to predict the detail of the crash but it
really wasn't that difficult to see what was coming in general terms.
Some of us, myself included, picked the disaster before it happened, in
my case in July 2007 before even Northern Rock had collapsed. My
decision to make such a prediction came when the housing bubble which
was driving the economic boom became so extreme that first time buyers
on average earnings could not afford to buy a property in most parts of
Britain, despite mortgages of five and six times earnings and up to 125%
of the value of the property being on offer. As first time buyers
support the entire housing market, that could only have one result: a
severe fall in house prices which in turn would topple the boom into
bust. It was not, as they say, rocket science.

The cost of the current banking failure

The extent of the obligations which the taxpayer has taken on is
impossible to calculate with any precision for two reasons. First, it
is not known how much of the money pushed into British banks (RBS,
HBOS, Northern Rock, Bradford and Bingley) will be recouped when and if
they are sold. Second, the extent to which the loans guaranteed by
the taxpayer (both for the banks which are now part owned by the
taxpayer and those which are still technically impendent like HBSC and
Barclays) are subject to default is not known. That the “experts”
are groping in the dark can be seen from the fact that the Governor of
the Bank of England has refused to even estimate how much money will
have to be put into the banks. (Mervyn King: 'Impossible to say' how
much capital needed to shore up banking system By James Kirkup,
Telegraph 26 Feb 2009)

There is also the possibility that if the Lloyds Group is
successfully sued by institutional shareholders on the grounds that
they were misled by the management before the takeover of HBOS by Lloyds
TSB or because of Lloyds TSB e failure to do due diligence before
completing the deal, then the taxpayer might have to foot at further
colossal bill, especially if the company is still part-state owned when
a suit is successful.

The partly state owned banks are in theory to be sold reasonably
quickly, probably within the next five years, but that assumes they
will be in a state which will attract buyers and the world economy will
have recovered enough in that time to create circumstances in which
plausible buyers will come forward. There is a further fly in the
ointment. The EU competition commissioner has already insisted that
subsidiary parts of RBS and Lloyds are sold off, with the added proviso
that they must not be sold to buyers who would then have too large a
market share in Britain. If that ruling is extended to the sale of the
main bank assets it would create very grave difficulties because no
British bank would be able to make such a purchase and the number of
foreign banks able to do so would be very limited. That could result in
the banks being broken up clumsily just for the sake of reducing size
rather than for good commercial reasons or sold for a song.

In addition to the problem of finding buyers, there is a very real
possibility that nothing like the full extent of sub-prime debt has
been admitted to by the banks, whatever their ownership status, and only
a fool would bank on both Britain and the world’s economy recovering
fully within five years. The fact that RBS had to be bailed out again
with mind-boggling sums so soon after the first gigantic cash injection
is strong indicator of the massive hidden bad debt still lurking within
banks.

The hard figures for taxpayer’s cash being spent to prop up the banks
are mind boggling. To date RBS has received £45.5 billion - with
another £8 billion earmarked if it is needed. Of that approximately
£27 billion has already disappeared through the toxic debt trapdoor (as
at November 2009). . Through a series of complicated loans and
repayments, Lloyds Banking Group has received £14.7 billion net.
Northern Rock received £27 billion in September 2007, although this has
been reduced as the less toxic mortgages have been redeemed (Daily
Telegraph High Risk gambling in record bank bailout 4 11 2009).

As for estimates of future obligations, even the government anticipate a
long term cost to the taxpayer of the bailout to be £20-50 billion,
but it could rise to over £1 trillion if all the government insurance
and other guarantees are called in - the amount underwritten in the
governments Asset Protection Scheme currently stands at £282 billion
(ibib). In July 2009 the IMF estimated the cost of British taxpayer
support for the banks to that date as £1,227 billion (IMF puts UK
banking bail-outs at £1,227bn Telegraph 31 Jul 2009 Edmund Conway).

Then there is the national debt. The Office for National Statistics
(ONS) projects a national debt of £792 billion by the end of the
2009/10 financial year with another possible £1.5 trillion being added
before the crisis is over. (Independent 5 11 2009 1.5 trillion could be
added to national debt). This would leave Britain with a national debt
of £2.3 trillion, substantially more than current GDP which is around
£1.5 trillion. Before Northern Rock was nationalised, the National Debt
was officially less than £600 billion. ( It should also be borne in
mind that the National Debt is substantially larger than the current
official figure because Brown’s Enron-style accounting has kept the
true cost of PPP and PFI off the books, most of the ongoing debt not
being included in the National Debt.)

In addition to the direct costs of this banking fiasco, there are the
vast sums of money, loss of expertise and human misery caused by a
severe recession to be set against the politicians and bankers’
account. There is now, as there has always been, a signal failure
amongst the laissez faire believers to acknowledge the true economic
costs of their religion in terms of lost wages, lost tax, higher
benefit payments and increased anti-social behaviour when people are
put out of work. A prime example of such behaviour was that of
Margaret Thatcher when she exulted in the destruction of Britain’s
heavy engineering and extractive industries without seemingly having any
concern about the structural unemployment she was causing or its human
and economic costs. .

There obviously have to be limits to public service employment, but it
is clearly better, for both moral and economic reasons, having people
employed in useful - and I stress the useful - public service than
unemployed, provided their wages can be met without radically
destabilising the economy. At least that provides people with
purposeful lives and the public with something for their taxes.
Moreover where enterprises such as coal mining and the railways and the
energy utilities are in public hands strategically important economic
capacity is being maintained. Nor is it simply a case of defending
public service provision for important private industries can be
defended through protectionist measures. This mixture of public and
private protection of employment opportunities could be further
bolstered by a refusal to permit further mass immigration.

The claim that laissez faire makes you richer

The proponents of laissez faire claim that it creates more wealth than
any other economic system. There is precious little evidence for this.
The one and only bootstrapped Industrial Revolution took place in a
Britain which was highly protectionist in its international trade . It
was also with a domestic economy which had considerable restraints on
the unrestrained operation of the market in the laws governing the
employment of agricultural workers and apprentices, the lack of easy
communications, especially roads, throughout much of the country, the
power of custom drawn from a pre-industrial society and a very powerful
social hierarchy. Every state which has industrialised since Britain has
also done so behind protectionist walls.

Laissez faire did not become the dominant elite ideology until the
Industrial Revolution had been running for more than a century. By 1850
Britain was comfortably the dominant industrial power in the world.
Between 1860 and the outbreak of the Great War Britain followed a policy
as near to true free trade as any country has ever done. The result was
her economic dominance was broken, most notably by the USA and
Germany, countries which were conscientiously protectionist throughout
the period.

From the end of the Great War until the 1930s Britain attempted
unsuccessfully to resurrect the pre-1914 economic conditions until the
economic catastrophe which became the Great Depression - created under
the rule of laissez faire - finally forced the British elite to abandon
the ideology, a change symbolised by Britain‘s departure from the Gold
Standard in 1931. This abandonment lasted until 1979 when Thatcher
reintroduced the ideology in a new and arguably more virulent form.

During the modern period of greater protection and state involvement in
the economy which ran from the Depression until the 1980s, Britain’s
economy did not cease to grow. Wages steadily rose, GDP expanded.
1950s and 1960s Britain was a world in which unemployment reached just
about as low as it can (around 300,000 was the fewest to which it sank)
and living standards were rising rapidly, Britain made most of the
things it consumed, it was at the forefront of high technology, the
country was largely self-sufficient in food and manufactured goods and
most of its energy was supplied by publicly owned utilities fuelled by
a native coal industry. All of this happened in a Britain where
inequalities of wealth and income were steadily declining, a trend which
the laissez faire school would have us believe diminishes incentive and
hence economic growth.

Whether overall Britons would have been more prosperous under
continuous laissez faire from 1860 to the present day is a question
which is impossible by its nature to categorically answer. However,
the creation of the first Industrial Revolution and the strong growth
experienced between 1931-1979 , both in circumstances bereft of
uninhibited laissez faire , suggests that at best it would have made
little difference and at worst would have resulted in further economic
catastrophes, the cost of which would have comprehensively outweighed
any higher profits gained during boom times. When the colossal sums
being put at risk in the present recession are considered and placed
with the catastrophic losses of the Depression, those sums alone (and
that ignores the other less dramatic economic slumps of the past century
and a half) suggest that a century and half of stable economic
progress would have left Britain considerably better off today than it
is.

What is highly probable, based on the experience of the period 1979 to
the present, is that unemployment would .have been much higher than it
was from 1945-1979. Since 1979 the rate of dole claimants has never
dropped below 800,000 and the real rate of unemployment is has been
much higher than the claimant rates. How much higher is debatable, but
the measure favoured by the government based on a household survey of
those seeking work has remained well over a million and currently stands
at 2.46 million. In addition, there are nearly 3 million on long term
sick benefit, many of whom could probably work (the figure of long-term
has risen from around 600,000 in the early 1980s) and the very large
numbers of people kept off the unemployment registers by being in higher
education and very large numbers working part time who want to work
full time. The real unemployment total in 2009 is probably 5-6 million,
but it could even be higher. The Daily Telegraph recently estimated the
figure for just those who wanted to work but could not at 5.7 million
(Telegraph 12.11.09 5.7m and climbing: the real unemployment toll
Edmund Conway)

The prime thing to note about Britain’s periods of protectionism and
state involvement in the economy since the Industrial revolution began
is that, although there were periods of recession as the trade cycle ran
its natural course, these economic periods never produced catastrophic
economic failures such as that experienced in the 1930s or that which we
are now living through. Even the financial upheavals of the 1970s, which
were caused primarily by the oil price hike in 1973 and over-powerful
unions rather than the economic policies being followed, did not produce
anything like as severe a financial crisis as that of the 1930s or the
present. Moreover, the Depression and the present turmoil are not the
only severe crises which arose during the time of laissez faire, they
are merely the most dramatic, most notably the banking crisis of 1907
when reputedly bankers led by J P Morgan averted a crash of 1930s
proportions.

A fair summation of the experience of the past three centuries is that
there is no obvious correlation between rates of GDP growth and
personal enrichment and the balance between laissez faire and state
intervention by means of protectionism and economic control of the
domestic market. What can be said is that state intervention produces a
much more stable economy than laissez faire policies. That in itself is
valuable for it prevents great economic upheaval . Consequently, even
if it could be proved that laissez faire policies increase wealth in the
short to medium term more quickly than would happen in an economy such
as Britain had for the first 30 years after 1945, there would be a
powerful argument that the long term benefit of greater stability of a
state interventionist regime might well make that the preferred economic
state because it would offer greater security and certainty.

If laissez faire is such a wealth maker its supporters need to explain
why it leaves so many poor in supposedly rich countries. In Britain,
most Britons could not live on their savings for more than a month,
approximately 50% of Britons have no private pension provision and
around a third of the population live in rented accommodation despite
the criminally lax mortgage regime of the past twenty five years. If it
were not for the safety net of the welfare state, a very large
proportion of the British population would be as insecure now as they
were 100 years ago. Indeed, the absurd cost of both rented and
purchased property in present day Britain arguably makes it more
difficult now for the ordinary person to raise a family than it did even
thirty years ago because of the need for both people in a relationship
to go out to work to pay the housing costs and the shortage of money
left over after paying for housing. The vast swathes of poverty in the
USA, much of which would not look out of place in the Third World, tell
an even starker story. The laissez faire advocates also need to explain
the success of much more statist economies such as Sweden, France and
Germany, who are at least as economically successful as Britain and
arguably more successful.

The laissez faire practitioners have for forty years or more attempted
to justify free market solutions on the grounds of “trickle down”,
the idea that if the economically successful are provided with the
right laissez faire conditions they will make massive amounts of money
which will enrich society in general including the poor because the
creation of wealth will filter down through society to the very bottom
of the economic pyramid. It simply has not happened. American
blue-collar wages today are much as they were in 1970 and if anything
are declining. The picture in Britain is not dissimilar.

But wealth is much more than money or property. It is also about free
time, a sense of long term security of employment, the ability to
comfortably raise a family and a sense that their homeland was just
that, a homeland. Fifty years ago most people had a short trip to work.
Their work was secure. They could raise a family on a single full time
wage and obtain decent housing. The country had not as yet been
seriously affected by mass immigration.

Today anyone under the age of 30 in normal social circumstances will
struggle to provide the wherewithal to start a family and will probably
have to live a long way from their work, that is, if they have a job.
Their sense of a homeland in which they are privileged has gone. The
fact that we have more technological toys does not make us richer.
Indeed, for most people it merely adds unnecessary complication and
frustration to their lives.

The part of society which has suffered most in Britain is the white
working class. Their natural employments, especially in the heavy and
extractive industries, have been wilfully destroyed. New council
estates destroyed long established working class communities with their
informal social support systems, while massive immigration provided
ever more intense competition for jobs, especially unskilled and
semi-skilled jobs, and social goods such as NHS services, council
housing and schools. In addition, the ever more frenzied privatisation,
whole or piecemeal, of the past 30 years reduced the quality and scope
of public provision, most notably in council housing, the NHS, the vital
utilities (energy and water) and public transport. This of course
affects everyone to a degree, but it disproportionately disadvantages
the less well off because they are the
people most in need of public services.

To illustrate how perilous the position is of many Britons wanting
work today I will quote this paean of despair by a middle-aged
working-class Briton which I took from the uk.politics.misc newsgroup:

“Yesterday I saw my husband with tears in eyes again, because he
cannot get full-time work to support us. When I met him ten years ago,
he was working 12 hour shifts, and even now, he refuses to go on the
dole. I don't understand why you refuse to believe that he and others
like him simply cannot find work any longer. He is 50, and the agency
books are full of 20-something Poles - what do you think? And don't say
he's aiming too high - he has always earned minimum wage and still does.
He is already hanging his head in shame, and not because he is lying,
but because there is simply no work for him, and when there is, he is
ignored. He has worked all his life in menial jobs - he cannot deal with
not working. What shall I tell him?

“Many of them [Jobs] are advertised in Poland and employees are
recruited directly from Poland - see above. This happens because it
seems that British employers do not want British workers. Perhaps you
can explain to me why there is not one factory or warehouse
job advertised here, when the place is full of factories and warehouses,
and every person that you pass in the street along these roads where the
factories and warehouses are located, are Eastern European, when 5
years ago they would have been British? There is less work now than
then, so what is the reason?”

But even if the “trickle down” had occurred and the poor had got
richer in absolute terms compared with what they had in 1979, that
would not be the end of the story. Wealth is not merely about who has
what but about the power relationship between the rich and the poor.
Money is power and the larger the disparity in wealth and incomes, the
greater the power of those who have the most.

If I am rich I can afford to go to law to harass and intimidate someone
who cannot afford such costs. I can protect myself with servants. I can
buy influence in government. I can give a poor man employment or take it
away from him. I can do any number of things to exert my will directly
and indirectly over anyone who is not rich.

The objective facts say that it is wealth which primarily determines
life outcomes. It allows privileged access to all the goods of life and
these then become threaded into the structures of individual lives. To
be born to educated parents is a boon which stems in all probability
from those parents having been born to educated parents. To be free of
the worries of having enough money for the necessities of life frees the
person to do other things. To live in comfortable and uncrowded
circumstances creates a sense of calm and security. Does anyone believe
in their heart of hearts that the behaviour of the poorest, least
well-socialised sections of society would not change radically for the
better if they were all suddenly given middle class incomes? Of course
they would because suddenly they would be removed from the stresses they
experience being at the bottom of the material heap.

As income and wealth inequality in Britain is substantially wider now
than it was in the 1970s, the poor in Britain today have less power in
their relationships with those better off than they had thirty years
ago. Add in the emasculation of unions, the destruction of the natural
employments of the working class such as heavy and extractive
industries, the use of mass immigration to lower wages and increase
competition for jobs and the position of the poorer sections of society
is dramatically weaker than it was when Thatcher came to office.

It is telling that Western businessmen who ostensibly support the
idea of the positive effects of competition arising from "free markets"
and "free trade" never want it for themselves. Instead of rubbing
their hands when this supposedly wealth creating circumstance arises ,
they always happily accept a state subsidy or push for protectionist
practices when it is to their advantage. None of the US airlines had
any hesitation in grabbing billions of dollars from the Federal
government after 911. Large companies publicly complain of government
regulation while secretly welcoming it because they can bear the
cost of it more easily than their smaller competitors.
Multinationals shamelessly play one country off against another in
their search for massive subsidies and other favours before they deign
to operate in a country.

It has been ever thus. The two greatest names of the early Industrial
Revolution, Josiah Wedgewood and Matthew Boulton, were happy to climb
on the Enlightenment bandwagon with its beliefs in the Universality
of Mankind and advocate lesser tariffs and freer trade - until the
proposed freeing threatened their own businesses. What goes for
businessmen goes for the individual worker. Who has ever met someone
whose job was threatened by "free trade" speaking in favour of it?

Countries play the same game, cheating wherever they can. And the more
powerful the state the greater the cheating, both in terms of helping
particular industries with direct state aid and in the formulation of
the treaties governing world trade. Hence, the USA presents itself as
the ultimate champion of free enterprise whilst being both now and
throughout its history one of the greatest of protectionists and state
subsidisers of its industries - that it is seen widely as an
enterprise society is one of the great propaganda triumphs of history.
Its behaviour after 911 is symptomatic of the unequal nature of modern
"free trade". The US not only handed, as mentioned above, billions to
its ailing private airlines, but put up protective tariffs to protect
its steel produces.

Abe Lincoln's used to put this question to pro-slavers who said
slavery was a boon for the slave because they were provided for and
were free of normal responsibilities: "What is this good thing that no
one wants for himself?" The question should be put to the the
laissez faire disciples.

The truth about laissez faire economics is brutally simple: "free
markets" and "free trade" are simply part of an elite ideology and
like all elite ideologies they serve the purposes of the elite first,
second and last. If it does not suit their purposes the elite will
exempt themselves from the requirements of the ideology while insisting
everyone else continues to honour the official ideological line. Those
not of the elite who espouse it act merely as useful idiots to promote
the interests of the elite.

What needs to be done - First, nationalise the banks

Until Lehmann Bros went down (Sept 2008) it was still just about
possible (although it took a good deal of credulity) to honestly believe
that Northern Rock was simply a one-off economic disaster, but once
Lehmann had started the ball rolling last year it was soon unmissably
obvious that the entire banking system in the developed world was
infected with the same criminal recklessness with every one being
insolvent because all required government action to keep them afloat
whether it be direct investment or government backed schemes such as
Britain’s Asset Protection Scheme. That being so, the most rational
course would have been to force the banks into administration on the
usual legal grounds of their demonstrable insolvency and then go for
immediate and complete nationalisation with no automatic compensation to
shareholders because the banks were insolvent. The state would then
have had legal responsibility only for bank deposits and a
distribution to shareholders and other creditors would only be made if
realised assets exceeded the liabilities, a distribution which would
never occur because the liabilities were so vast there would have been
nothing to distribute. However, for reasons of British public
confidence and international politics something would have had to be
paid to the shareholders and other creditors.

This action would have immediately solved, as far as it can be solved,
the problem of a lack of investor and depositor confidence because the
entire weight of the British taxpayer will be behind the banks, which in
an advanced economy is the best security there is. It would also, in
all probability, have cost a great deal less than what the crisis has
already cost and what it is likely to cost in the future. At worst it
would have placed no greater burden on the taxpayer because we are
already underwriting every financial institution while giving the
additional benefits of allowing government to rapidly (1) ) direct
lending to where it is most needed immediately, namely, business. (2)
institute procedures to prevent reckless banking and (3) ascertain the
true extent of the bad debts insofar as that could be done. I say as
far as possible because debts can easily change their status from sound
to bad as an economy worsens. In addition, many of the financial
devices used to market and circulate the sub-prime debt are so complex
it is possible that no one really understands them. Indeed, they may
have been deliberately made impossibly complex to ensure that they
could not be understood. Nonetheless, an estimate could be made which
would at least give an order of magnitude of the toxic loans. For
example, it could tell us that the debts were in the trillions rather
than the hundreds of billions of pounds.

There is an obvious danger which would have to be guarded against. A
banking system under state control would be prey to politicians
manipulating bank operations for their own political advantage, for
example, by extending credit freely supporters or, more broadly,
instructing banks to apply looser lending rules in constituencies which
they hold than in constituencies held by their political opponents. The
worst case scenario is that they would plunder the banks for their own
personal pecuniary advantage. The check against such abuses is
unambiguous legal restrictions on what can and cannot be done by banks
with thumping legal penalties for those who ignore the law and regular
surveillance of the financial position of politicians and bankers.

Apart from dealing with the present crisis there are three good general
reasons why banks should be nationalised. First, banking cannot simply
be treated as another industry. Money is the petrol which drives the
economic engine. Take it away and a society is reduced to barter. An
advanced society rests on a viable currency and a stable and reliable
supply of credit. It is simply too fundamentally important a matter to
leave in private hands, something which is tacitly admitted by British
governments for the taxpayer has long underwritten the vast majority of
bank deposits. Once other restrictions were removed in the 1980s and
1990s this allowed the traditionally staid British retail banks to
borrow recklessly because the lenders know the taxpayer stands behind
them.

Second, the banks and their ilk are the prime drivers of the growth in
the money supply through their massive expansion of credit (when a loan
is made the money supply increases by the amount of the loan, because
the lender still owns the money and the borrower has the use of it.) The
lack of proper controls over lending has effectively privatised control
of money, with the financial institutions being allowed to contaminate
the currency by creating money of widely varying quality. An analogy
would be with a currency based on gold with the government minting to a
consistent standard, while allowing private companies to mint coins to
whatever standard they chose. Nationalisation puts the control of the
money supply back into public hands.

Third, all modern banking is fractional reserve banking, that is, the
bank holds liquid reserves which are only a small percentage of its
debt. Thus it has considerable similarities to pyramid schemes (or Ponzi
schemes if you must) because both rely on the sociological trait that in
normal times only a small percentage of investors/depositors will want
to withdraw their money at any one time. When times become extraordinary
and there is a run on a bank, the bank rapidly becomes insolvent because
it has little liquidity, . the reserves held being only a tiny
proportion of the total liabilities of the bank in advanced economies.
This is unlikely to radically change while banks are in private hands.
Hence, private banks in places such as Britain would always be very
vulnerable to runs on them if the state did not guarantee most or all
of the deposits. With British banks in public hands the problem
vanishes, insofar as it will ever vanish, because the depositors know it
is guaranteed by the taxpayer.

Bank nationalisation does not mean general state control of the economy.
It is quite possible to retain capitalism for most other economic
activity. It is only ideologues such as Marxists who think otherwise as
they attempt to fit reality into their ideology rather than adjusting
their ideology to reality. If something is practically possible - and
this is - then human beings can decided that is how they wish to live.
Supposed ideological necessity is no necessity at all if the ideology
does not capture the mind.

Nor would the nationalisation of the banks mean that the state would be
the only source of credit. Companies could still raise money through
rights issues and the sale of bonds. Private equity companies could
continue provided they took only money actually owned by an investor,
that is, the investor had not borrowed to make the investment. Retail
companies could fund their own credit schemes. Loans and investment on a
personal basis could still be made.

Britain is getting the worst of all worlds at the moment and will
continue to do so if the banks remain in private hands. They are
propped up with country-ruining sums of money yet very little control is
being exercised over them. The weasel-worded policy of “quantitative
easing” - the virtual-world equivalent of printing money - which has
so-far (November 2009) put £175 billion into the economy has not
persuaded the banks to release the purse strings on lending to either
private individuals or business. That is true even of the banks which
are part or wholly owned by the taxpayer: RBS, Lloyds, Northern Rock
and Bradford and Bingley, Instead the banks are re-building their
balance sheets at the taxpayers’ expense and, most shamefully, massive
remuneration is being paid to the people who got us into this mess.
When the self-serving cries of “We must pay the market rate to get
and keep the best people”, it should be remembered that not only are
these the class of people who created the mess, making money through
banking is considerably easier now than it was before the recession
began. because so much banking capacity has been lost.

In one sense the banks cannot be blamed for what they are doing
because they are on one hand being instructed by government to re-build
their balance sheets to provide greater security for their future
trading and on the other to lend more to businesses and loosen the
reins on mortgage lending. They cannot do both, especially as much of
the credit supplied in Britain prior to the recession was foreign
originated, a source which has now dried up, and politicians of all
sorts are yelling about the irresponsibility of 125% mortgages and
mortgage multipliers of six and seven times income. The result is
businesses failing for want of their previously normal credit and the
housing market limping along as first time buyers are effectively
squeezed out of the market by 25% deposits and 3-4 times salary
mortgage multipliers and many who need to re-mortgage finding to their
horror that they cannot do it on affordable terms. However, that is not
an argument to allow banks to continue in private hands but an argument
to nationalise, because it is quite clear that they will not behave in
any interest other than their own while they remain nominally
independent or are taxpayer owned enterprises waiting to be returned to
private hands and still being run as quasi-private companies with, in
the case of RBS and Lloyds Group, the absurdity of having shares traded
on the stock exchange while the taxpayer feeds what are essentially
insolvent businesses with seemingly endless and mind-shaking sums of
money.

The extent to which British banks were serving their own purposes
without regard to any other consideration before the financial roof
fell in can be seen from their massive reliance on foreign business,
viz:: “Whitehall sources said that they had discovered that some major
UK lenders - including RBS, HSBC and Barclays - have had only 20 per
cent of their balance sheets made up of "traditional" loans to UK
households and firms. Meanwhile, up to 80 per cent is tied up in loans
to foreign nationals and companies, bond issues and other investments. “

( Patrick Hennessy, 80 per cent of bank lending 'went overseas' 17 Jan
2009 Daily Telegraph )

It would have been best if the banks had been nationalised right at the
beginning of the present crises. However, the delay has taught the
public one very important lesson, namely, that private enterprise is
amoral and will always follow its own rather than the national interest.

How much would nationalising the banks cost? The honest answer should
be no more than it takes to soak up their debts because the reality is
that British banks were all insolvent when the rot set in after the
demise of Lehman Brothers in 2008. Those banks which did not directly
take taxpayers money, most notably Barclays and HSBC, survived only
because of Government action such as the Asset Protection Scheme which
allowed them to lay off the risk on vast amounts of sub-prime debt and
the avalanche of money created through the printing of money by virtual
means, otherwise known with quaint dishonesty as Quantitative Easing. As
the debts of the banks vastly exceeded the assets the normal
consequence of insolvency would be for shareholders to receive nothing
because their shares would be worthless and there would be no money to
distribute to them after paying what was realised to the creditors.

Many readers at this point will be saying, hold on, our economy is
heavily dependent on financial services in general and the City of
London in particular, and much of the money government spends comes
from the taxes drawn from the financial services. Won’t nationalising
the banks kill the goose which lays the golden egg?

The size of the financial services sector is large but it accounts for
only a small part of British GDP. Estimates of its size vary but most
are in the range of 7-10 percent of GDP. IFSL Research puts the
contribution of financial services for 2007 (the height of the boom) as
low as £7.6 billion put employment in the financial services in 2008 at
1.03 million and their positive contribution to the balance of payments
in 2007 at £36.9 billion,

That leaves a great deal of other British economic activity and
employment. Even with every financial institution in the country
nationalised most of that banking activity would remain. In addition,
the profits to be made by cautious state banking would substitute for
substantial parts of the current tax revenue which is spent by
government. Moreover, as economic commentators and politicians are
beginning to acknowledge, Britain’s heavy reliance on financial
services has caused the British economy to suffer more than any other
advanced nation in this recession because the catastrophic losses
sustained by the banks were proportionately larger because the banking
sector was larger (Britain is the only major economy not to have come
out of recession by November 2009). Arguably, reducing the proportion of
Britain’s economy which is dependent on financial services would be a
good thing in itself, although nationalised banks restricted to cautious
banking should not get into the same sort of difficulty again.

As for the tax revenue derived from financial services, this is far from
being a dominant funder of British government spending. For example,
the reported tax take from the City in the financial year 2008/9 is
£32.5bn (Open Europe 28 7 2009 Government reveals City firms
contributed £32.5bn in tax revenue in a year) This is interesting for
two reasons: firstly, the £32.5 represents only around 5% of the total
UK budget spend for 2008/9 (excluding the bank bail-outs). Hence, the
idea that the City is massive driver of tax revenue is objectively
wrong.

Secondly, the tax paid by the City is tiny compared with the amount
that the taxpayer has pumped into the banks so far - hundreds of
billions and perhaps as much as a trillion. Therefore, the total amount
in taxes contributed by the City since 1997 is almost certainly much
less than the taxpayer has had to pump in to date. Moreover, the pain is
far from over because the banks and their ilk are almost certain to have
further massive bad debts to announce which will result in more taxpayer
support.

If we can only guess at what the ultimate cost will be to the British
taxpayer, it is clear that that the sums involved are so vast they will
swallow up many years of the tax generated by the City. For example, if
the £2.3 trillion national debt figure is reached, that would mean the
profligacy of the banks and their ilk in Britain would have saddled the
taxpayer with around £1.7 trillion pounds (the national debt before
the Northern Rock crash was less than £600 billion.). Taking the £32.5
billion tax figure for the City in the past financial year, it would
require approximately 52 years of tax revenue from the City at that
level to meet the £1.7 trillion the taxpayer may have to service and/or
pay down if the predictions turn out to be anywhere near correct.

Even the City’s contribution during the boom years is overstated,
viz.: “…we are apt to attribute the sudden spurt in Britain's
prosperity in the mid- to late-1980s to a deregulated and reinvigorated
City, it owed far more to the massive windfall from the North Sea. Take
a look at the numbers. In 1979, when Margaret Thatcher came to power,
the amount Britain owed, as a nation, was £88.6 billion. In the
subsequent six years, taxes from the North Sea (which had been pretty
much non-existent previously) generated an incredible £52.4 billion.
“(Edmund Conway Telegraph 4 11 2009).

There is also the question of the amount of tax bankers actually pay
compared with what they would pay if they were under strict PAYE, the
fate of the vast majority of British employees. The Daily Telegraph
reported (James Quinn 16 Oct 2009) that the tax due on a Goldman Sachs
bonus pot of £13.5 billion for 2009/10 would £2.5 billion. Let's do
a bit of arithmetic. Suppose all of the Goldman Sach's bonus pot of
£13.5 bn is taxed at 40%. That would be £5.4 billion. Of course they
will all have personal allowances and be taxed at the standard rate of
tax up to the point where 40% rate comes into play. However, balanced
against those reductions are the NI contributions, both employee and
employer, and the new 50% tax band above £150,000. That duty would
almost certainly substantially outweigh reductions caused by the lower
rate tax band duty and the personal allowances. However, for the sake
of simplicity, let us assume that the higher rate tax band and the NI c
contributions merely balance out the lower rate tax and personal
allowances. Instead of the £5.4 billion due at the 40% tax rate the
Treasury is only slated to receive less than half that amount (46.20% to
be exact).. The balance is tax avoided at best and evaded at worst. If
it is only £2.5 billion the average real rate of tax on their entire
earnings will be around 18% based on the entire sum being taxed at 40%.,
although it could be even lower in reality depending on the balance
between tax allowances and the lower rate tax band and national
insurance and the higher rate tax band, possibly as low as 15%. That
would be a substantially lower rate of tax than a worker on average pay
under PAYE. Nationalise the banks and that type of avoidance would
become a thing of the past if politicians have the courage and lack of
self-interest to control banking remuneration.

The City of London has not been a boon to Britain, but an albatross
waiting to be hung around all our necks.

What else needs to be done?

The Government have attempted, with precious little objective success,
to keep the economy moving by reducing VAT from 17.5% to 15% for a
limited period (which ends on 1 January 2010), borrowing vast sums of
money to cover the ever expanding gap between tax revenue and
government expenditure and most, controversially and dangerously,
engaging in what is quaintly called quantitative easing rather than by
its honest name of printing money by virtual means.

There is a very real danger that the British government's credit in the
bond markets will dry up and even if this does not happen, if they carry
on with policy of recklessly injecting money into the economy there is
every chance that inflation will eventually get out of control. This
is a criminally reckless gamble by the very people whose lack of moral
sense, personal greed, slavish adherence to an ideology, intellectual
inadequacy and sheer absence of common sense have brought us to this
crisis. Such gambles should not be taken with nations. .

Instead of being widely pro-active using a variety of economic methods
on a suck-it-and-see basis, the policy should be to ride out the
economic storm whilst ameliorating the suffering. This would also be
the most efficient way to get money circulating into the economy for it
would disproportionately increase the incomes of the poorest who will
need to spend it simply to achieve a reasonable or even a basic standard
of living. That could be done by increasing working tax credits and
pensioner credits and benefit payments for the unemployed.

For the longer term strict credit controls are vital. I have been
railing against the removal of credit controls for mortgages and other
credit ever since Thatcher ditched them in the 1980s. Had they remained
in place much of the present difficulty could never have arisen.

Housing costs are the prime poison in the British economic system at
present. It was house prices which were the prime drivers of the boom
before this recession. To show how absurd prices have become compare
the fifties to now. In 1955 the average house cost (at 2008 prices)
£36,000: at the height of the boom in 2007 the average house cost more
than £200,000. Even today (2009) it is in excess of £160,000.
Reducing average house prices to multiples of earnings equivalent to
those in the mid fifties when the average property cost three and a
half times average earnings, would mean average house prices today of
around £85k.

A sane mortgage regime would be a minimum ten per cent deposit and a
maximum three times earnings multiplier, with no self-certifying wages
and meaningful credit checks a legal requirement on mortgage providers.
That would of course put many people into serious negative equity and
could feed deflationary tendencies - although it is arguable that
substantially lower housing costs could strongly stimulate spending
across the broad economy - but it would eventually create an economy in
which the majority of the population could afford a property with
sensible borrowing and a change in mentality which would underpin a new
more sober approach to debt. To ease the pain of the inevitable housing
price contraction and the inability of many to get on the housing
ladder, the government should engage in a massive programme of social
housing building and restrict social housing to the native population.

Non-mortgage credit also needs to be managed properly, with restrictions
on what can be borrowed and proper credit checking. In all forms of
credit those who make false declarations should be prosecuted for fraud.
It is a sad commentary on modern Britain that there are hundreds of
thousands of people, even millions perhaps, who have committed serious
fraud by making false declarations to gain mortgages and other credit
but never been prosecuted for it because of the numbers. That brings
the law into contempt.

That is what needs to be done domestically. What about Britain’s
relations with the rest of the world? Our politicians are still blindly
beating the free trade drum for all they are worth while the rest of
the world is busily re-erecting protectionist barriers.

There is no example of the world not turning to protectionism when
economic times are difficult. Worse, for the laissez faire believer,
there is no example in easy economic times of protectionist barriers
being
dismantled wholesale - the nearest any country came to it was Britain
between 1860 and 1914, but even that disastrous experiment contained
protectionist elements because of the large part of the world Britain
controlled through the Empire and its considerable unofficial control of
countries such as Argentina. Traditional barriers have often been
removed in easy economic times, but then other less obvious hindrances
have been created. (The EU is a prime example of this with tactics such
as demanding environmental standards and health and safety
legislation.).

We are presently in a situation akin to that of individuals who are
told not to panic buy some product in short supply. To follow that
advice is irrational because we know as a matter of fact that such
please are invariably ignored by the large majority. The rational thing
to do is go out and buy as much as possible as quickly as possible. The
same applies to protectionist measures in circumstances when others will
generally adopt them: be protectionist first is the rational path. In
particular, the British government should be identifying strategically
important British industries - food, energy, water, high tech
businesses - and protecting them from international competition.

As things stand, Britain is in danger of repeating the mistakes of
1860-1931 (when Britain lost its industrial predominance as other
nations such as Germany and the US pursued protectionist policies) and
of the period from 1985 onwards when we signed up to the Single
European Act and then applied the market rules when the likes of
Germany and France did not.

It would be astounding if protectionism was not always in evidence
because the protectionist impulse accords with human nature while free
trade is violently opposed to every human instinct. This is because it
is a natural and healthy thing to wish to protect your own "tribe" and a
completely unnatural thing to wilfully create a situation where your own
tribe is not privileged over all other tribes.

Generally, the government should aim for a change of economic mentality.
It should be made clear that a business cannot be run at any price,
economic or social. For example, people must understand that a
businessman does not have the right to incontinently import labour or
the owners of a strategic British company to sell it to foreigners.
Instead, the businessman must normally do only what he can with the
human resources drawn from the native population, the only exceptions
being those with skills which are both genuinely scarce and of strategic
value. Mass immigration must stop.

On the political front, democratic control needs to be returned to the
British people through withdrawal from the EU, the repudiation of all
treaties which prevent Britain controlling her borders or determining
her domestic political policies and the removal of all laws which
prevent free expression or privilege any minority either overtly or in
practice. A written constitution constraining governments from repeating
the mistakes and betrayals of the past should be introduced, for
example, constitutional clauses forbidding the transfer of British
sovereignty to any foreign body.

There also needs to be an end to the legalised corruption which now
exists. British politicians no longer receive their pay-offs in brown
envelopes or Swiss bank accounts, they get them through consultancies
and agencies and by absurdly overpaid non-executive sinecures after
they leave office. That gives them an incentive to go along with lax
economic regimes such as that which brought the world to its present
unhappy state. Politicians (and public servants) should be banned from
working for any private business or in an industry with which they have
had dealings while in public service.

Above all we need to rid ourselves of ideologues of any stripe,
including those who hold the positions of power and influence in our
society, and replace the ideologues with pragmatists who have ends they
wish to achieve but are not in a mental straitjacket when it comes to
achieving the ends.

History teaches only one thing about economics: that there is only one
general truth, namely, any extreme economic ideology will prove
disastrous because economic reality demands that political and social
reality is observed. No extreme economic ideology does that, for
example, both laissez faire and Marxism reduce the world to a system of
material relationships, while wholesale protection is impracticable for
an advanced economy.

What is likely to happen

In the long term, the danger is that the whole sorry business will be
re- enacted, both because of the institutionalisation of the economic
regime
which has brought us to this mess, but also because it is in the
interests of the political elites of the advanced countries to maintain
the status quo which removes any democratic control.

The elites will keep on with the laissez faire rhetoric, but in the
short to medium term we will see protectionist retrenchment. However,
that does not mean globalism stops or that laissez faire within domestic
markets (something separate from free trade) will come to a dead halt.
Even Nazi Germany - which probably was the nearest to any industrialised
society becoming self-sufficient - still relied extensively on imports.
Moreover, there is much more to liberal internationalism than economics.
Mass immigration will continue unabated, as will the ever more thorough
institutionalisation of political correctness, both through laws and the
absolute control of our public life by those committed to the ideology,
a control which is found not only in British mainstream politics, but
the mass media, public service, not-for-profit agencies such as
charities, the education system and big business. .

Since the collapse of Lehman brothers in September 2008 a vast array of
proposals has been floated by both politicians and supposed financial
and economic experts. These have included a transaction tax on banking
transactions, the restructuring of bonus regimes to remove the
incentive to take risks and the idea that no bank should be “too big
to fail”. The last is one of the favourites at the moment and one of
the most nonsensical, f or it flies in the face of the face of all we
know of human psychology and history. Any financial institution which
fails - especially if the word "bank" is attached to it, causes general
panic. There is no safe size where banks and their ilk can be allowed to
fail without dire general consequences.

What most of the proposals have in common is their impracticality for
they would only work if adopted worldwide, a fantasy even the liberal
internationalists cannot being themselves to believe. Hence, nothing
meaningful has been done and will not be done.,

In the case of Britain, the policies I have advocated in the sections
dealing with the nationalisation of the banks and the other action which
I believe is desirable would be impossible while Britain remains
within the European Union, because member states of the EU can no longer
make their own domestic economic decisions when it comes to the
structure of the economy or conclude their own trade treaties. Nor could
mass immigration be halted because 400 million or so people from the
other EU states have the absolute right to visit, live and work in
Britain. Even immigration from outside the EU is extremely difficult to
counter while Britain is tied into the UN Convention ob Refugees and the
European Declaration of Human Rights now enshrined in British law by the
Human Rights Act.

No conceivable British government in the foreseeable future would leave
the EU or repudiate other international treaties because they have all
bought into the liberal internationalist ideal. But even if by some
miracle the EU fell apart and Britain had her sovereignty back, we would
in all probability still have a government trying to follow the liberal
internationalist line because all three major British parties have
accepted so-called free market economics (remember, it is in reality
government controlled economy through anti-monopoly legislation).
Consequently, they are now in the position where they cannot openly
criticise what has happened in the past 30 years because they are all
guilty of supporting it

The effects of laissez faire

Far from being a source of international stability and peace, laissez
faire in its modern guise of globalism is a prime cause of instability.
The objective consequences of their implementation of the ideology,
which includes mass immigration and the removal of protectionist
barriers to "improve" the market, are :

1. To reduce the self-sufficiency of nations and thus make them less
able to resist those who preach the laissez faire gospel.

2. To cause through mass immigration and the export of jobs the
impoverishment of the masses in terms of reduced wages, fewer job
opportunities and immigrant competition for social goods such as
education, housing and health.

3. To cause mass unemployment.

4. To cause an increased sense of insecurity generally for the
country's citizens.

5. To cause ethnic and racial discord where none existed before through
mass immigration. .

6. To periodically cause catastrophic economic crises such as we are
presently experiencing.

7. To rapidly create a plutocracy.

No country in the world has suffered such wilful ruination (for Thatcher
celebrated the destruction of much of Britain's manufacturing and
extractive industry as "creative destruction") of the employments which
sustained the British working class. Make no mistake, it is laissez
faire which has brought both the credit crunch and left Britain with a
dangerously narrow economic base.

More broadly, Thatcherism has left the entire country in a dangerously
vulnerable state. The disgraceful and reckless failure of governments
to restrain British banks and their ilk from lunatic levels of credit
creation needs no rehearsal, but there are many other frightening
weaknesses.

Our manufacturing industry has been largely destroyed through off-
shoring or by industries simply being allowed to die (inflation is not
going down as quickly as anticipated because we import so much), the
privatised energy and water companies (most of which are foreign owned)
have failed to invest sufficiently in maintenance and new plant, we are
sleepwalking to a point somewhere between 5-10 years hence when we
find we do not have sufficient generating capacity to support our
domestic and industrial energy requirements and the proportion of food
which we
produce for home consumption is dropping rapidly.

Everything this and previous governments have done for 30 years,
conspires to make us ever more dependent upon foreign countries and,
consequently, ever less able to make our own decisions. Those who
believe this is a good thing should reflect on what is happening in the
present financial crisis: countries around the world are looking after
their own interests by retreating behind protectionist walls and the
cavalier
behaviour of Russia over the past few years over its supply of gas to
the Ukraine and by extension, to much of Europe bodes ill for the
future.

Because of what has happened since 1979 Britain is arguably the First
World country most at risk at present because (1) our elite have failed
to protect even our most strategically important industries in a
negligent manner not approached by other first world countries, a
practice which has led not merely to foreign ownership but also a
dangerous narrowing of our economic base and (2) our financial services
sector is larger proportionate to our economy than any other country.

The vast disparity in incomes and near unbridled passing of wealth down
the generations ordained by laissez faire rapidly creates a plutocracy
which is arguably the most obnoxious of authoritarian regimes because it
is the most stable, although in the very long run a plutocracy will
almost certainly be capsized by the tendency towards an ever more
closed elite with its concomitant reduction in the talent pool from
which the ruling caste is drawn.

There is another inherent problem with plutocracies, the creation of
individuals with great power because of their extraordinary wealth.
In Mediaeval England kings constantly had trouble with nobles who were
so powerful they became in the terminology of the time "overmighty
subjects". In a plutocracy those with extraordinary riches fill the
same role because their wealth puts them effectively beyond the law.
Unless they are incredibly stupid they can avoid the normal consequences
of misbehaviour, moral or criminal. They never accept responsibility.
They are never at fault. They react to criticism with outrage. They use
their wealth to buy their way out of criminal prosecutions. They use
their wealth to intimidate and persecute those less wealthy and powerful
through their use of the civil law.

In the world of globalism the power of the plutocrat is enhanced both
because of the opportunities to acquire ever vaster wealth and the
development of vast supra-national companies. This particularly applies
to the banks as the past eighteen months have shown, with politicians
standing helplessly by as the people who have created the mess continue
to run the financial systems of the world. We may be seeing the
beginnings of a time when governments become not so much political
vehicles but the administrative arms of big business.

What are governments for?

What is the function of government? At the biological level all that
is required is a the direction of a society in a manner that is not so
dysfunctional that it ceases to exist. That requirement encompasses
any form of viable political organisation.

But human beings ,being large brained, highly intelligent animals with a
high degree of self-consciousness, go beyond the blind dictates of
biological necessity. That means they can, within the constraints of
social conditioning, choose the type of society which they would like
to live in, whether their desires are practical or not.

Throughout history governments have normally been organic growths
arising from the unconscious evolution of the societies which support
them. Such governments have been intellectually justified, in as far
as they have been justified at all, in a way to confirm a social
structure which had developed without any conscious design. Even
proselytising religions such as Christianity and Islam did not radically
alter the structure of the societies in which they became dominant.
Rather, they adapted themselves to the societies which they conquered.
Christianity may have cast off the learning of the Ancient world for the
better part of a thousand years after it became the religion of the
Empire, and time seen Islam evolve into a creed which eventually sucked
intellectual enquiry out the lands it conquered, but the general shape
of life in Christian and Islamic society was determined not by the
conscious dictats of the religions but the unplanned material
circumstances of those societies. Feudalism arose in the West as a
response to the chaos of a collapsed Roman Empire, while Islam
diversified radically as it spread from its backward Arab origins to
sophisticated societies As for the impetus to conquest, religion was
used as a justification for what was simply routine human behaviour. If
it had not been Christianity and Islam it would have been some other
pretext. Occasionally individuals and groups within such societies
have advocated radical social and political reforms such as the
Anabaptists during the Reformation and the Levellers in 17th Century
England, but these movements were short-lived, unable to capture
significant numbers of the elite and based on religion. Purely secular
ideologies had to wait for the Eighteenth century.

Secular ideologies are a very different kettle of fish from the
religious. Religious ideologies assessed as intellectual constructs do
not ask human beings to engage in behaviour which would harm the
societies in which the religion exists. Their poison comes from
adherents attempting to persuade non-believers to observe the behaviour.
Contrariwise, secular ideologies are conscious constructs which aim to
alter the material circumstances of society, whether that be to change
the economic relations between people, to amend the power relationships
between classes or to alter the racial composition of society. If
the ideology is at odds with reality even its peaceful implementation
can be the cause of harm to a society. That is why they are so
dangerous. Liberal internationalism is such an ideology.

What type of society would most human beings choose to live in?
In his Theory of Justice the American philosopher John Rawles posed this
question, suppose you were to join a society without knowing what your
personal circumstances would be, what type of society would you choose?
The only rational answer is one in which there is no great social and
material divisions. Anything other form of society than an
equalitarian one would be a reckless gamble on being within the upper
reaches of society rather than at the poorest.

What exists is of course all too often a million miles removed from an
egalitarian society. The terminally depressing truth is that there is
and ever has been only one general political question: how far can the
masses control the naturally abusive tendencies of the ruling elite?
They are naturally abusive because elites as a class want nothing more
than to secure their own advantage. For them the exercise of power is a
burden to be borne only by the masses G K Chesterton summed up the
position beautifully in his novella The man who was Thursday: “The
poor object to being governed badly: ...the rich have always objected to
being governed at all."

Terrorists or traitors?

What should we call the liberal internationalists? Are they terrorists
because of the damage they do? That is a difficult label because the
proponents of the ideology have not come power through force. Instead,
they have got their hands on the levers of power though a long process
of infiltrating the elite until they became the elite and their ideology
became the elite ideology.

Traitor is a much more promising term. An ideology which asks for
loyalty to something other than the nation state, which has as one of
its ends the transfer of sovereign power from the nation state to
foreign authority, which requires its adherents to removes democratic
control from the population which they are meant to serves definition
treasonous. Liberal internationalism does all that and more, for it
permits mass immigration, which is a form of conquest, and pursues
economic policies which both disadvantage its own people and leaves the
country dangerously exposed to changes in economic conditions and
political circumstances.

Why are the liberal internationalists not called what they objectively
are, traitors? The answer lies in is Sir John Harrington’s seventeen
century words:

Treason doth never prosper; what's the reason?
For if it prosper, none dare call it treason.

The best way of judging the purpose of any political ideology is to ask
cui bono? (who benefits?) The obvious answer in the case of "free
markets" and "free trade" are those who believe (with good reason)
that they nor their dependants will never be amongst those who will
suffer the ill-effects of laissez faire. These people are and will
continue to be overwhelmingly drawn from the middle and upper classes
for the same reasons that such classes have always maintained their
superiority, namely that such people will have inherited wealth,
social connections and superior opportunities for education which are
denied to the majority.

Both the traditional Left and Right have been duped by globalisation.
The Left initially welcomed globalisation as a dissolver of national
sovereignty, but they are discovering by the day just how restrictive
international treaties and membership of supra national groups can be.
As things stand, through our membership of the EU and the World Trade
Organisation treaties, no British government could introduce new
socialist measures because they cannot nationalise companies, protect
their own commerce and industry or even ensure that taxpayers' money
is spent in Britain with British firms. A British government can have
any economic system they like provided it is largely free trade, free
enterprise.

The Right are suffering the same sickness with different symptoms. They
find that they are no longer masters in their own house and cannot
meaningfully appeal to traditional national interests because treaties
make that impossible.

But there is a significant difference between the position of the two
sides. The traditional Right have simply been usurped by neo-Liberals
in blue clothes: the traditional Left have been betrayed by a
confusion in their ideology which has allowed their main political
vehicles to be surreptitiously by the likes of Blair.

The left have historically objected to "free-trade" on the grounds
that it destroys jobs and reduces wages. But what they (and especially
the British Left) have rarely if ever done is walk upon the other two
necessary planks in the anti-"free trade" platform: the maintenance
of (1) national sovereignty and (2) a sense of national cohesion. The
consequence is that the Left has been and are still struggling with
two competing and mutually exclusive ends: internationalism and the
material improvement of the mass of the people.

The new international elite is neither left nor right. Its ideology
is simply designed to promote the interests of the elite. It has
aspects of right and left, but they are merely the policies which
allow the elite to both disguise their true intention and to give a
pseudo-moral camouflage to their ends. They speak of the
internationalist equivalent of "motherhood and apple pie" with
exhortations to "end world poverty" and fund a "war on disease
worldwide". If I had to find a term to describe this elite I think I
would settle for neo-Fascist because so much of what is proposed is
reminiscent of fascism.

Opposition to globalisation with its underpinning creed of laissez faire
should not be a Left or Right issue. The socialist and the
Conservative should both resist it because it removes the ability of
the electorate to control those with power and the power of their
political movements to realise their ends.

Robert Henderson 16 11 2009

--
Robert Henderson
Personal website: http://www.anywhere.demon.co.uk

[AgitProp]

Jews and their lackeys.

[Blue]

blue

[William Black]

Robert Henderson wrote:
> The most dangerous people in the world

Are people who can't get a publisher...

--
William Black

"Any number under six"

The answer given by Englishman Richard Peeke when asked by the Duke of
Medina Sidonia how many Spanish sword and buckler men he could beat
single handed with a quarterstaff.

[Poetic Justice]

William Black wrote:
> Robert Henderson wrote:
>> The most dangerous people in the world
>
> Are people who can't get a publisher...
>

Are Liberals that want to help you....

[Robert Henderson]

In message <myBMm.34411$Xf2....@newsfe12.iad>, Poetic Justice
<PoeticJustice@talk-n-dog.?.?.com.invalid> writes

Very true, When they tell you they are doing something for the good of
another be afraid, be very afraid.... RH