Blogroll Category: Current Affairs

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Why the Deep State Is at War With Trump

Mises Institute - Sun, 31/12/2017 - 17:15
By: David Stockman

If you were a Martian visitor just disembarked from of one of Elon Musk's rocket ships and were therefore uninfected by earth-based fake news, the culprits in Washington's witch-hunt de jure would be damn obvious.

They include John Brennan, Jim Comey, Sally Yates, Peter Strzok and a passel of deep state operatives -- all of whom baldly abused their offices. After Brennan had concocted the whole Russian election meddling meme to sully the Donald's shocking election win, the latter three holdovers -- functioning as a political fifth column in the new Administration -- set a perjury trap designed to snare Mike Flynn as a first step in relitigating and reversing the voters' verdict.

The smoking gun on their guilt is so flamingly obvious that the ability of the Trump-hating media to ignore it is itself a wonder to behold.

After all, anyone fresh off Elon's rocket ship would learn upon even cursory investigation of the matter that the National Security Agency (NSA) intercepts electronically every single communication of the Russian Ambassador with any person on US  soil -- whether by email, text or phone call.

So the clear-minded visitor's simple question would be: What do the transcripts say?

In fact, a Martian visitor would also quickly understand that the entire world -- friend, rival, foe and enemy, alike -- already knows of NSA's giant digital spying operation owing to Snowden's leaks, and that therefore there are no "sources and methods" on the SIGINT (signals intelligence) front to protect.

Accordingly, the disinterested Martian would undoubtedly insist: Declassify the NSA intercepts and publish them on Facebook (and, for old timers, on the front page of the New York Times) so that the truth would be known to all.

The Deep State Watergate

Of course, that would punch a deep hole in the entire RussiaGate witchhunt because NSA, in fact, did record Flynn's late December conversations with Russian Ambassador Kislyak. And there was not a single word in them that related to alleged campaign collusion or otherwise inappropriate communications by the in-coming national security adviser to a newly-elected President who was three-weeks from inauguration.

Indeed, as explained below, Mueller has effectively told us that Flynn's communications with Kislyak were clean as a whistle.

Accordingly, there was no reason whatsoever -- as in none, nichts, nada and nugatory, too -- for the FBI's January 24th interview of Flynn. Four days after the inauguration,  Acting Attorney General Sally Yates and the FBI were wasting the time of the new President's national security advisor for no earthly reason except to administer a "gotcha quiz" on what they knew from the transcripts to be completely innocent conversations with the Russian Ambassador

The content of the calls was entirely about pending policy matters. That is, the UN security council resolution condemning Israel's settlements policy and Obama's belligerent new anti-Russia sanctions. With respect to both of these matters, the incoming President had a publicly known policy position different from the incumbent's, and about which his team was completely entitled to communicate with official foreign ambassadors.

So the January 24th interview itself was a Nixonesque abuse of the nation's law enforcement machinery to strike at a political enemy -- albeit a mighty legitimate one who had just become occupant of the Oval Office by will of the American people.

These new-style Deep State "plumbers" who openly broke into the White House that day, in fact, conducted a blatant entrapment exercise with malice aforethought. Its only possible purpose was to bait Flynn into contradicting the word-for-word transcripts in the FBI's possession -- intercepts which had been illegally "unmasked" by Brennan's political witch-hunt for Russian election malefactors.

And we use the "illegal" word purposefully to underscore that the only ultimate justice here is for Obama's rogue CIA director to be locked-up.

Brennan's post-election leakathon of phony Russian meddling accusations was so threadbare of valid national security evidence that it even included falsehoods from the completely discredited and ludicrous Steele dossier -- which was paid for by the DNC and Clinton campaign. And it culminated in the evidence-free screed of January 6th that was nosily presented to Obama as an intelligence community's assessment but was actually a hatchet-job authored by Brennan and a hand-picked silo of anti-Trump analysts and fiction-writers like the now outed Peter Strzok of the FBI.

Issued under cover of the CIA, FBI, NSA and Director of National Intelligence (the confirmed liar, James Clapper), this document amounted to a sweeping abuse of the national security apparatus in furtherance of purely political purposes and vengeance against Deep State critics. It capped a 5-month long, Brennan led campaign of naked political exploitation of the national security machinery that made the Nixon White House look like a Boy Scout Jamboree.

As we will demonstrate below, Brennan never had hard proof of Trump campaign collusion with the Russians to influence the election because if it existed it would have leaked in full "smoking gun" splendor long ago.

The Russian Hoax

We are referring here, again, to NSA digital intercept evidence that Russian state actors used the internet to remotely hack the Podesta and DNC servers in order to steal and then disseminate their politically embarrassing contents and thereby "influence" the US election in Trump's favor.

Yet aside from the asinine claims about Russian troll farms and trivial amounts of Facebook ads and other such social media monkey business, that's all she wrote. There has been no other tangible allegations of election "meddling" that rise to even minimal plausibility.

And you don't have to be fresh off Musk's Martian rocket ship to recognize it; you can google it yourself, but nothing -- we mean -- nothing comes up on the screen.

Yet as to the DNC emails, there has already been a compelling demonstration by ex-NSA super SIGNET sleuth, William Binney, that the DNC emails were downloaded on a memory stick by a staff insider from his own computer, not remotely hacked by Russian trolls.

That's because the download speed of 22.7 megabytes per second embedded in the Guccifer publication of the DNC email trove was impossible to achieve from Russia or Romania or anywhere else outside of the DNC offices in July 2016 when the "hack" allegedly occurred. The highest average ISP speeds in the US during the first-half of 2016 were achieved by Xfinity and Cox Communications at 15.6 megabytes per second and 14.7 megabytes per second, respectively, while average speeds on US systems were in the order of 11 megabytes per second.

In short, the embarrassing DNC emails about election-rigging against Bernie Sanders by the Democratic Party apparatus were almost surely sucked out of the DNC's servers by an insider with a thumb drive (which can download at the indicated speeds), not some nefarious Kremlin operative 3,000 miles away.

And as for Podesta's emails, the Donald was surely right all along: Any 400-pound slob on a couch could have hacked an email account protected by a password called, well, "password".

Stated differently, if either of these email troves were "hacked" by remote Russian agents the digital footprint of that action is stored at one of the massive NSA server farms. 

Accordingly, it would have been unmasked at the get-go by Brennan's hand-picked apparatchiks, thereby giving rise to another virtual certainty: Namely, such NSA intercepts, if they actually existed, would be such politically radioactive "proof" of Trump collusion that they would have been leaked from the endlessly porous US government long ago.

Moreover, any such digital evidence -- which must exist or there was never a hack in the first place -- would have drastically foreshortened Mueller's investigation, too. That is, Mueller would have gotten NSA's digital logs the day he opened up shop in May and would have had no other investigative task than to track down any digital evidence of Trump campaign involvement with such a Russian hacking operation.

We say "digital evidence" because unless one of Trump's inner circle traveled to Moscow to secretly collude with the Kremlin in an off-the-grid manner on the DNC/Podesta hacks, NSA would also have the intercepts to prove it. To wit, the schedules, phone calls, text messages and emails of the Trump family and inner circle are all out there in the NSA server farms. Every one of them.

Were there a shred of evidence on these digital logs proving or even hinting at Trump campaign complicity in the alleged DNC/Podesta hacks, it would not have been overlooked by the Brennan's inquisitors; and it would have been dispatched by Mueller's gunslingers in no time at all.

So let's be clear on the matter. The Donald is the ultimate seat-of-the-pants one man show who essentially relies upon his four family members (Donald Jr., Eric, Ivanka and Jared Kushner) and a few trusted advisors. Yet none of them were sent to Russia during the relevant time frame -- and had they colluded in any other way Mueller would have nailed them for any untoward digitized interactions with the Russians in a heartbeat.

That's right. Anyone disembarking from Elon's rocket ship could also google the fact that only two people -- Carter Page and George Papadopoulos -- even remotely involved with the Trump campaign went to Russia or tried to go there.

But Carter Page was a no-count volunteer who went to Moscow on his own dime and who never even met Trump.

Likewise, Baby George Papadopoulos was a 29-year old kid who got drafted onto Trump's foreign policy advisory panel from, apparently, the phone book when the GOP foreign policy establishment boycotted to nearly a man/women the Trump campaign prior to the convention.

Accordingly, Baby George's claim to fame is that he appeared in exactly one photo with the Donald on the day the foreign policy advisory committee was announced in order to appease an endlessly nagging gaggle in the press and among Trump's legions of opponents.

If Papadopoulos had done anything more serious than sit for a photo op designed to prove Trump got his foreign policy advise other than from "watching TV," as the Donald had previously averred, his guilty plea would have hinted at it.

But, no, what Mueller's high priced legal gun-slingers got him on was -- again -- technical perjury. So as we review Mike Flynn's alleged crimes just recall that the Baby George's sin was to say he meet some dufus UK professor -- who was also a phony expert on Russian affairs -- before Papadopoulos was announced as a foreign policy advisor on March 19, 2016.

As it happened, he actually meet him about a week earlier and was therefore truthful with the FBI. But these modern-day, hair-splitting Torquemadas nailed him for the "crime" of not mentioning that he knew on March 10 that he was to be appointed to the Trump committee, and that knowledge somehow colored his March 15 meeting with this no-count English go-between.

You can't make this stuff up!

The Perjury Trap of the Century

In any event, how do we know that every word on the Flynn transcripts were perfectly legal and appropriate and did not in the slightest manner compromise so-called national security?

Simple. Mueller's "Statement Of The Offense" tells us so.

In the case of the Russia sanctions conversation Flynn was trying to make peace, and in the case of the UN censure resolution against Israel he was trying to make trouble. But the latter is what presidents and their advisors do all the time, and the former is a wonderful idea that Washington should try far more often.

In fact, just consider the words of Mueller's charge:

....FLYNN falsely stated that he did not ask Russia's Ambassador to the United States ('Russian Ambassador') to refrain from escalating in response to sanctions that the United States has imposed against Russia. FLYNN also falsely stated that he did not remember a follow-up conversation in which the Russian Ambassador stated that Russia had chosen to moderate its response to those sanctions as a result of FLYNN's request.
In fact, this criminal charge actually narrates the actual tick-tock of a more peaceful world struggling to be born in real time.

Accordingly, Mueller charges that on December 28th the Russian Ambassador first called Flynn after the Obama White House announced another spiteful round of petty sanctions against Putin associates.

The in-coming national security advisor, in turn, discussed "what if anything, to communicate to the Russian Ambassador" with a senior official of the Trump transition; and according to Mueller's criminal complaint, the two agreed that "members of the Presidential Transition Team a Mar-a-Lago did not want Russia to escalate the situation."

Good for them!

There upon the very same day Flynn dialed-up Kislyak and, as the felony charging document contends, "requested that Russia not escalate the situation and only respond to the U.S. Sanctions in a reciprocal manner."

Self-evidently, the wheels of peace began to turn because the complaint notes that on December 30 "Russian President Vladimir Putin released a statement indicating that Russia would not take retaliatory measures in response to the U.S. Sanctions at the time."

Indeed, Russia didn't merely take "reciprocal" actions, as Flynn requested, but did absolutely nothing at all. Even more progress!

Then on the last day of the year, Kislyak called Flynn back and "informed him that Russia had chosen not to retaliate in response to FLYNN's request".

And then there is just white space in the Russia-related section of the charging document. Not a single word or hint that the Kremlin was paying off the Trump Administration for nefarious promises it had made in return for Russia's campaign help.

For crying out loud, that white space itself proves there was not so much as a single clause or veiled code word in the transcripts about pre-election collusion or other untoward arrangements between the Trump campaign and the Kremlin -- or the FBI plumbers would have asked about it on January 24, Flynn would have lied, and it would be in the plea deal.

Indeed, the possibility that there is something untoward in the Flynn intercepts which Mueller chose to keep under wraps and did not stipulate in the plea is preposterous in the extreme.

After more than one year of investigation that has produced exactly zero hard evidence of pre-election collusion it is beyond impossible that at long last Mueller would have abjured. That is, refrained from putting a grain of content into what anyone getting off Musk's Mars rocket can see is an utterly bogus Russia meddling case.

At the end of the day, Mueller's perjury did occur in the context of a crime. But the felony was the Brennan-led Russian meddling inquisition.

Especially after the shocking result on November 8, the Deep State and its collaborators and shills in the Democratic Party, official Washington and the mainstream media were not about to be rebuked by the unwashed demos of Flyover America.

Indeed, if you are not caught up in the RussiaGate hysteria and witch-hunt, it's as plain as the nose on your face

To be sure, the perjury trap sprung on Flynn was justified by Hillary partisan, Sally Yates, on the grounds that Flynn's alleged "lie" to the Vice President left him vulnerable to "blackmail" by the Russians.

What undiluted hogwash!

The best poker player on today's international stage, Vlad Putin, finally gets a US President with a rational attitude about Russia, and he plans to burn him day one?

C'mon. Whether she intended it or not or had gamed it out thoroughly, the history records will show that the sanctimonious Hillary partisan and politically ambitious, Sally Yates, then and there killed the best chance for peace on earth since the Soviet Union fell in 1991.

Sally Yates, James Comey, and John Brennan are the real criminals here.

As Justin Raimondo so eloquently put it:

Think about it, folks: both the US and the Russians possess enough nuclear firepower to destroy all life on earth several times over. This sword of Damocles is hanging over us by a thread, just as it loomed large during the last cold war with Moscow. It’s a  machinery of annihilation that is set on hair-trigger alert, and any number of events could unleash it: a miscalculation, a foolish bluff, a misunderstanding, a technical glitch, a showdown similar to the Cuban missile crisis. All that stands between us and utter extinction is the hope that this apparatus of death can be restrained by mutual agreement. Bravo to the Trump administration for making peace a priority. If this is now a crime, and even “treason,” as the mouth-breathers of #TheResistance would have it, well then let the Washington Inquisition make the most of it.

The point was also underscored cogently by Andrew McCarthy of the National Review.

As McCarthy argues below, differences on foreign policy are essentially now being criminalized; and the Donald's justified desire to shutdown the Brennan-inspired political witch-hunt called RussiaGate is being falsely characterized as obstruction of justice rather than what it actually is -- an effort to prevent the Deep State's insidious assault on American democracy from going any further.

While all that plays out, though, behold the frightening thing Mueller’s investigation has become: a criminalization of politics. In the new order of things, policy differences are the grist for investigation and prosecution.

Nevertheless, Trump’s victory caused consternation in the Obama administration for two reasons. First, and most obviously, Obama did not want his policies reversed. Second, neither Obama nor his party could abide a judgment of history holding that the election of Trump, the bane of their existence, was a result of the American people’s rejection of the Obama agenda and of Hillary Clinton, the hapless candidate nominated by Democrats to carry that agenda forward.

...The ongoing Mueller probe is not a good-faith investigation of suspected espionage or other crime. It is the exploitation of the executive’s intelligence-gathering and law-enforcement powers in order to (a) criminalize Trump political policies with which the Obama administration disagreed and (b) frame Clinton’s electoral defeat as the product of a traitorous scheme rather than a rejection of Democratic-party priorities.
Finally, we couldn't agree more with McCarthy that General Flynn is a very foolish man. He was not required to speak to the FBI when agents came to interview him on January 24.

Moreover, as the former head of the Defense Intelligence Agency he surely knew that the FBI would have been monitoring Kislyak and that the FBI had recordings of the conversations the agents wanted to ask him about.

That he agreed to submit to the interview anyway, and then to lie, is surely one of the stupidest acts coming out of official Washington that we can recall from 47 years of observation. But perhaps it does explain why America's legions of puffed-up generals have been such abysmal failures for onwards of a half-century now.

So it is fair enough to say that Flynn has no one to blame but himself, and that a person of such poor judgment should never have been chosen to be the president’s principal national security adviser in the first place.

Then again, the American people should also understand why Flynn has gone down and why the Donald's political scalp is fairly waiting to be lofted from the Washington Monument.

To wit, the Deep State has turned its own crimes during and after the 2016 election into nothing less than a coup d'etat against American democracy.

Categories: Current Affairs

A health care system diagnosis that doesn't really work

Adam Smith Institute - Sun, 10/12/2017 - 07:01

We are told that some patients in hospitals in poor countries are held hostage after their treatment. They are held until their medical bills are paid. Distressing no doubt, even something that something must be done about. But the diagnosis of the underlying point is in error:

“This is a systemic problem, and the number of rights abuses is quite profound: people are being detained without trial, they’re being locked up with security guards, and women are giving birth to babies who are entering the world, in effect, as prisoners,” said Robert Yates, project director at the Centre on Global Health Security, who co-authored the paper.

“Healthcare user fees are at the root of the problem, and this just shows how bad a privately financed health system can get. We need to do more research on this and the global health community needs to start taking this seriously.”

There is a doubling down on this same point:

“Healthcare really needs to be free of charge to the patient, because this is the consequence of making patients pay, and it is the worst situation in a whole range of very difficult situations: they may get the medical care they need but then they, or their belongings or their ID papers, are kept hostage,” said Dr Mit Philips, health policy advisor at Médecins sans Frontières.

“Unfortunately, because many of these health facilities don’t receive sufficient funding to provide adequate care even when patients can afford to pay, this is the kind of economic logic that results. If we’re serious about universal health coverage, then abolishing user fees would be a good place to start.”

As we say, this diagnosis is wrong. For it is our own National Health Service which is the outlier here, one of the very few systems that has no user fees, indeed appears to have no system nor ability to make sure that those who really should be paying them do so. Most, somewhere between the majority and near all, rich world health care systems do have some requirement for such users fees. Yet said rich world systems do not keep patients locked in hospital until those bills are paid.

It is therefore not the system of user fees which leads to the practice, is it? 

What is the reason is one of those things we can discuss. Possibly the absence of a legal and efficient debt collection system. Could be the general poverty in these places meaning that routine health care is hugely costly as compared to average incomes. Might be the manner in which all too much of a nation's government spending gets creamed off by the WaBenzi. We can indeed think of a number of reasons why this is happening.

But given that the majority of rich world systems have some form of user fee, that said majority doesn't keep patients hostage until bills are paid, then it's not user fees being the underlying cause of the problem, is it? 

Therefore the abolition of them isn't the solution.

Categories: Current Affairs

Two Portraits from the American Civil War

Mises Institute - Sat, 09/12/2017 - 17:00
By: Chris Calton

Here are the portraits of famous figures from the Civil War:

The first is a Democrat. Politically, he was the polar opposite of Abraham Lincoln and the new Republican Party. He was ardently pro-slavery. He supported the Lecompton Constitution that sought to make Kansas a slave state, and favored the Dred Scott decision that threw out the Missouri Compromise and opened even Northern territories to slavery.

In 1860, this person attended the Democratic Convention. Before the party split and produced two rival nominees for president, he supported Jefferson Davis. After the split between the Northern and Southern democrats, he supported the Southern candidate, John C. Breckinridge, instead of the more moderate norther nominee, Stephen Douglas.

Our second figure looks decidedly different. He is a Union officer who worked to recruit volunteers for the Northern cause. He led a regiment into Washington D.C. to defend the capital. His quick action against the South earned him a promotion to general, and he was put in charge of Fort Monroe. While he ran the fort, the general invoked international warfare rules to declare the runaway southern slaves “contraband,” effectively emancipating them, even as President Lincoln was undermining similar actions by his other generals as an attempt to capitulate to Southern slave owners.

But this Union general was brutal toward the South. In New Orleans, he was referred to as a “Beast.” When he was placed in command of the Southern metropolis, one of his first actions was to execute William Mumford for his audacity in lowering the flag of the United States. Southerners saw him as exceedingly cruel, but he epitomized the image of a Northern patriot. Jefferson Davis, who had the political support of the first character, turned his ire on this second figure by publishing a list of his crimes against Southerners, futilely hoping to enrage the North.

Without previous knowledge of these specific details, people might think of any number of figures who could plausibly fit one of these respective character portraits. What is most certain, though, for anybody who is familiar with the standard narrative of the Civil War, is that these two figures are absolute polar opposites.

The reality, of course, is that the standard narrative — at least the one taught in most public schools — is inaccurate.

As you may have guessed at this point, both people described above are the same person: Union General Benjamin Butler. Although he was originally from Massachusetts, he was as much of a Southern, pro-slavery Democrat as you could find. The fact that he was, technically, a Northerner did not preclude him from joining the Confederacy, either. Josiah Gorgas, for example, was a Northern-born general who served the Confederacy as their Chief of Ordinance, in charge of overseeing the production of arms and ammunition.

Benjamin Butler is a case study. He’s a single example, of course, and the defenders of standard history will happily point that out. The factors involved in the eruption of the Civil War are complex and variegated. But Butler is an important illustration of what is, from the northern perspective, probably the most important factor driving people to support the war: nationalism.

In the mid-19th century, of course, nationalism, meant unionism. Butler was a strange case because of his unusual support of southern Democrats as a Northern man, but his nationalism is hardly exceptional. For decades, southern political leaders had been threatening secession, and for decades, northern leaders had responded that disunion could only result in war.

In 1850, Northern congressman Daniel Webster — who was referred to as “satanic” by New York abolitionist for his support of the Fugitive Slave Law – took to the floor of the senate and responded to threats of disunion by proclaiming, “I will not state what might produce the disruption of the Union; but, sir, I see as plainly as I see the sun in heaven what that disruption itself must produce; I see that it must produce war, and such a war as I will not describe!”

It's true that no significant historical event can be fully explained monocausally. That does not, however, mean that a single factor cannot be dominant in driving such an event. After the South seceded, many in the North — especially the Republican-controlled government — rallied for war. But it was not opposition to slavery that compelled their action; it was nationalism.

Categories: Current Affairs

The WTO: Useless for Trade, Useful for the State

Mises Institute - Sat, 09/12/2017 - 12:00
By: Carmen Elena Dorobăț

On Monday, WTO officials will gather in Buenos Aires for their 11th ministerial conference. There is very little hope that any of the deals on the agenda will be reached, as both the WTO’s negotiations and its dispute settlement system have long been paralyzed by political bickering and a deep-seated inefficiency in the organization itself. Anxious WTO ministers (such as the EU’s trade commissioner) are now grasping at straws and blaming Trump and his lack of support for the WTO’s troubles.

Yet twenty-two years after its creation, the organization has almost nothing to show for it as far as trade liberalization is concerned. Juggling 164 member countries, each with its own protectionist agenda, was never likely to bring about ‘more open trade’, ‘more competitive markets’, or ‘market stability and predictability’. Especially not after trade rules, services, intellectual property, and environmental protection were brought to the negotiations table alongside tariffs and non-tariff barriers. Countries started by holding agreements hostage to their demands, continued with disregarding agreements completely, and now end on quibbling over the language used in joint statements.

An easy, albeit crude, depiction of WTO’s failure can be seen in the figure below, where the world tariffs effectively applied (which include unilateral liberalization and preferential trade agreements) have been consistently lower than those achieved via multilateral negotiations (most favored nation) in the first twelve years after WTO’s creation—when it was allegedly most successful. 

Other research offers the same story, and we’ve seen in detail before the reason why bottom-up, unilateral trade liberalization tends to work, and top-down, multilateral trade agreements never do (here, here, and here).

The WTO’s end seems nearer now, and not a moment too soon. So it did a few years ago, though, and yet it lingers on because governments have a few reasons to keep it alive.

First of all, once bureaucratic spending machines are set in motion, there’s little that can be done to rein them back in. The less efficient they are and the less they do, the more their budgets are increased for meetings, summits, and conferences meant to tackle precisely their inefficiencies. Had a private company been so utterly unproductive in its main activity, it would have long ago filed for bankruptcy. But the WTO, like the IMF, the World Bank, and all the other national and international governing bodies, does not operate on a profit and loss basis, but on political partisanship. As such, the WTO can easily reinvent itself during expensive lunches in exotic locations, and squander almost $200 million of taxpayers’ money every year.

Second, and more importantly, the WTO is actually useful to governments, even though it is detrimental to free trade and consumers. It provides a forum ripe with opportunities to satisfy domestic interest groups by hurting international competition, create political alliances with favored countries, or use trade as a strategic asset in a game of political tic-tac-toe.

Will we ever see the WTO dismantled? I’m not holding my breath. It will continue, in other shapes or forms, to waste money and facilitate trade: not merchandise trade, mind you, but the exchange of political favors.


Categories: Current Affairs

We do find this productivity story amusing

Adam Smith Institute - Sat, 09/12/2017 - 07:01

Apparently it is just terrible that market competition is going to lead to some Asda workers losing or changing their jobs:

More than 800 senior Asda shopfloor workers are facing a pay cut or redundancy in the new year after the supermarket chain embarked on another cost-cutting exercise.

Store staff have been briefed this week on a proposal that could mean 842 section leaders being removed from its store management teams. Thousands of other workers will also be affected by a wider move to cut the number of hours spent on stacking and tidying shelves at 600 supermarkets.

In a document given to staff, and seen by the Guardian, the retailer said it needed to cut costs so it could “close the price gap” with rivals Aldi and Lidl.

It said: “We need to continuously review our operating model. … being the cheapest of the big four is no longer a viable business model. We need to be able to look at ways to reduce our operating costs in order to close the price gap.”

No, that's not the amusing part.,What is amusing is to compare this with the very loud complaints currently being made about British productivity.

For this is exactly the sort of thing which increases productivity, that very thing which all are shouting must be improved. To use less labour to perform a task is the very definition of increased labour productivity. So, why isn't this being hailed as a - partial to be sure - solution to what ails our economy? 

Note also how this comes about. Aldi and Lidl have shown that the Great British Public appears to be just fine with hauling their comestibles out of their packing boxes, not actually requiring teams to shelf stock for them. The competition from that lower labour using - and thus more productive - method of retailing being exactly what is pushing Asda into similarly trying to be more productive in its use of labour. Market competition leads to productivity rises.

Except, of course, when people insist that there's something wrong with anyone increasing the productivity of their use of labour.

Categories: Current Affairs

The curse behind an LGBT prayer

Anglican Ink - Sat, 09/12/2017 - 03:51

Gavin Ashenden reflects on Kelvin Holdsworth's gay prince prayer

Brain for Bendigo as Robinson resigns

Anglican Ink - Sat, 09/12/2017 - 03:30

The Anglican Diocese of Canberra-Goulburn has lost two senior leaders in the space of a week, with the resignation of Bishop Stuart Robinson and the appointment of Bishop Matt Brain as Bishop of Bendigo.

Beach in Kigali

Anglican Ink - Sat, 09/12/2017 - 03:22

ACNA Primate joins Rwandan church for provincial clergy conference

St Helen's Bishopsgate walks away from apostasy in the CoE

Anglican Ink - Fri, 08/12/2017 - 22:57

City of London parish breaks relations with those who reject the Biblical teachings on human sexuality

Plea for assistance from Bishop Ackerman

Anglican Ink - Fri, 08/12/2017 - 22:25

Keith Ackerman asks Anglicans to rally round to support an embattled urban mission

Rwanda begins primatial election process

Anglican Ink - Fri, 08/12/2017 - 22:09

Archbishop Rwaje expected to call for a successor in 2018

Ryan McMaken: Who Prosecutes the Prosecutors?

Mises Institute - Fri, 08/12/2017 - 21:00
By: Ryan McMaken, Jeff Deist
Ryan McMaken on Mises Weekends

So far, the federal investigation into Russian collusion during the 2016 election has been a farce. Lawless and corrupt federal prosecutors—and their pet police agency, the FBI—dominate the headlines. Yet, the Constitution never provided for a federal police force, and lists very few federal crimes. So, how and why did federal prosecutors and agents become so powerful? editor Ryan McMaken joins Jeff Deist to discuss.

For further reading, see Bill Anderson's Mises Wire article, "Federal Prosecutors Are Running Amok".

Categories: Current Affairs

NRA-Republican Backed Bill Makes it Easier for Feds to Disarm Citizens

Mises Institute - Fri, 08/12/2017 - 19:45
By: Tho Bishop

On Wednesday, the Republican controlled house voted to further federalize gun laws in this country. While Ryan McMaken has noted the danger in further centralizing gun legislation, there is another deeply troubling aspect to this bill: it expands the ability of the Federal government to restrict Americans’ right to bear arms.

During the legislative process, the NRA supported merging the bill aimed at nationalizing concealed carry permits with another piece of legislation aimed at “fixing” the National Instant Criminal Background Check System (NICS.) Obviously this legislation was inspired by the failure of the US Air Force to report the criminal record of Devin Kelley, who went on to commit a horrific shooting in Sutherland Springs, Texas. While the motivation to do something after this atrocity is entirely natural, unfortunately this bill is simply another example of the Federal government using its own failure to justify expanding its own power.

After all, the “Fix NICS” bill doesn’t seek to punish the US Air Force for its failure to properly process paperwork. Instead, it provides $760 million in additional funding for the Department of Justice to establish new guidelines to ensure compliance among Federal agencies. That funding can also be used “to ensure maximum coordination” between State government and Indian tribes with the NICS.  

While the idea of bolstering the already existing Federal gun registry may strike some as relatively benign, it’s important to understand how it has been used in the past.

As Congressman Thomas Massie noted in his own criticism of the bill:

When President Obama couldn’t get Congress to pass gun control, he implemented a strategy of compelling, through administrative rules, the Veterans Administration and the Social Security Administration to submit lists of veterans and seniors, many of whom never had a day in court, to be included in the NICS database of people prohibited from owning a firearm. Only a state court, a federal (article III) court, or a military court, should ever be able to suspend your rights for any significant period of time.

While Republicans and supporters of the NRA may not fear the Trump Administration coming after their guns, it is obviously reckless to grant additional power and resources to future administrative states that may be quite hostile to the right to gun ownership. To put it simply, there is never a good reason to give Federal agencies the power the revoke an individual's ability to lawfully purchase a weapon without due process. 

Further, if one needed an example of how dangerous it is to centralize gun legislation in Washington DC, look no further to what gun owners in states like Ohio and Hawaii are currently facing. Both states, having recently legalized the use of medical marijuana, have placed those who need it with the choice of either owning a gun or receiving life-improving medicine.

In 2011, the Federal government sent a letter to licensed gun dealers reiterating that marijuana users were prohibited from owning a gun – even if it they have a medical prescription. The 9th U.S. Circuit Court of Appeals upheld this decision last year. Hawaii, which requires gun registration, has gone as far as to sending letters to permitted gun owners with marijuana prescriptions requiring they turn over their weapon. While the state is currently asking for “voluntary cooperation,” it could be a matter of time before it turns into compulsory compliance.

While the simplicity provided by nationalizing laws is an understandable appeal, especially if you’re a gun owner who frequently travels, political centralization is never the answer. By supporting this flawed attempt at “National Concealed Carry Reciprocity,” the NRA and their supporters in the House have sided with the power of Federal agencies over the Second Amendment rights of Americans.  

Categories: Current Affairs

How to Build a Better Government: Smaller, Consensual, and Decentralized

Mises Institute - Fri, 08/12/2017 - 12:00
By: Trey Goff

[Your Next Government?: From the Nation State to Stateless Nations by Tom. W. Bell]

When I first met him, Tom W. Bell seemed more like the successful lawyer/entrepreneur type than he did the type of guy to write an intensely well-sourced book synthesizing information from a variety of fields. On that front, he pleasantly surprised me: this book is an excellent, abundantly well-sourced paean to consent, choice, and competitive governance.

Bell begins the book by explaining how smaller, consent-rich and decentralized government is creating a “bottom-up, peaceful revolution” in the way governance is organized around the world. He cites the usual examples of Chinese special economic zones and SEZs all around the world generally as evidence of this. All of this has been surveyed extensively by other authors as well, but Bell does an excellent jo of succinctly re-presenting it here. However, Bell forays into a field I’ve not seen broached elsewhere by examining previous examples of special jurisdiction-type entities within the United States. Specifically, he details the extensive use of foreign trade zones (FTZs) throughout the United States as an example of special jurisdictions closer to home. These zones exempt the businesses within them from many aspects of US customs, excise taxes, and import taxes. These zones are ubiquitous and play host to a sizeable portion of US foreign trade. He closes this survey of the evidence of special jurisdictions by dedicating a chapter to some interesting examples: Henry Ford’s spectacularly failed attempt to make a massive city in the middle of the Brazilian rain forest (Fordlandia), Honduran ZEDEs, and seasteads.

The second section of the book focuses primarily on the legal theory supporting small, decentralized, special jurisdictions. In this section, he first explains the theory behind a polycentric legal order (all of which will be already be intimately familiar to any scholar of common law and anarchocapitalism). He spends time focusing on why much of this legal theory is predicated on a need to maximize consent from all involved parties. It is here that Bell’s most original and interesting work comes into play: he introduces a theory of consent as a gradient, with the lowest rung being hypothetical consent and the highest being explicit, express consent. He concludes this discussion of consent by explaining that all governance structures should attempt, as much as is possible, to move up the “ladder of consent” toward express consent. He closes the theory section of the book by taking a brief foray into constitutional interpretation theory which, although highly intriguing, seemed to be less germane to the core thesis of the work.

The bulk of the book is spent in part three, where he discusses the “practice” of small, decentralized governance jurisdictions. He begins by discussing the six “best practices” that all small jurisdictions should strive for, which are worth reproducing in full here:

  1. Respect for consent
  2. Protection of fundamental rights
  3. Independent adjudication
  4. Clear and fair interpretive rules
  5. Remedies for wrongs
  6. Freedom of exit

He then goes on, after elaborating on these six subjects, to present several ideas that could make currently extant nation-states marginally better in respect to these six best practices. He suggests such things as eliminating governmental immunity (he even has a wonderful section making the case that perhaps government officials should be doubly liable for violation of individual rights, not immune from them) and advocating for the use of what he calls “citizen courts” which are made up of private legal professionals and arbiters to resolve disputes between citizens and their governments rather than government courts hearing cases of government misconduct. Once again, this should be intimately familiar material to anyone who has read Murray Rothbard, Robert Murphy, Randy Barnett, or Edward Stringham. He then goes on to detail how to encourage more ownership of cities through the use of property rights or corporate shares.

He takes a brief dive into democratic theory by advocating for a kind of democracy he calls “double democracy.” Double democracy has a relatively simple institutional framework: a one share/one vote structure for the construction of new policy or statutes paired with a one person/ one vote structure that can only veto actions or appointments-nothing more. In this way, a double democracy can claim the advantages of the one share/one vote system that works so well in provide corporate governance today, while avoiding legitimacy problems and a potentially tyrannical oligarchy by allowing a straightforward majority of people to stop dangerous, rights-violating policies with the one person/one vote system.

However, as a student of democratic theory, I’m dubious of its claimed efficacy in light of general public choice concerns about democratic institutions and in light of what we empirically know about the actual functioning of democratic rule, as in the work of Jason Brennan, Illya Somin, and Bryan Caplan. Bell recognizes this work by making it such that majority rule is restricted only to the vetoing of a law, rule or regulation, limiting the harm rationally ignorant voters can inflict. Double democracy would certainly be a massive improvement on the democratic institutions we currently have, but alas, at the end of the day, it’s still a democracy; it’s entirely plausible that the shareholding majority could enact some property rights-violating law that has a coercive, deleterious effect on a small minority of the population, which is then subsequently upheld by the public at large.

Bell then moves on from this brief digression into democratic theory by calling for special jurisdictions in the US (what he calls USSEZs). These USSEZs are an attempt to bring the astounding success of small, decentralized, competitive jurisdictions to the United States. To oversimplify: Congress would pass a law creating the possibility for USSEZ which will be exempt from almost all regulation and taxation. However, these can only occur by purchasing federal lands (ensuring a revenue stream for the feds), and requires revenue sharing between federal and state governments on the revenue from these land leases. Although the general idea of special jurisdictions in the US isn’t new, Bell’s particular iteration of it is, and it’s still a fantastic idea generally.

He closes the book out by discussing Ulex, his model legal code for the operation of a stateless society. He likens Ulex to the “kernel” software of Linux, allowing for innovation and expansion by actual users of this “legal” software. It is comprised of the restatement of the principles of common law and codifies the most basic tenants of legal procedure and behavior that the common law has evolved to include over the millennia.

Overall, this book is an excellent “backdoor” into anarchocapitalism. Although Bell would never characterize his work this way, this book is excellent at making voluntaryism seem both academically respectable and eminently reasonable. This book also does an excellent job of providing a more thorough and rigorous theoretical underpinning for the nascent start-up society movement quietly and diligently working around the globe to advance human freedom and prosperity.

My only (miniscule) matter of dispute with Your Next Government relates to double democracy. The concept of double democracy is an improvement upon extant democratic institutions, but still suffers from a variety of flaws inherent to any democratic collective decision-making process. Rather, I think the evidence indicates that democracy as an institution is simply not the most effective means of maximizing human liberty or prosperity.

Despite this small point of contention, this book is still an instructive, informative, and important addition to the pantheon of rigorous and original libertarian legal theory. It is certainly in my top 10 anarchy-related works of political theory.

The core thesis of the book is that smaller, decentralized, competitive, polycentric legal systems work better, while all governance structures should strive for express, voluntary consent. What these two things combine to tell the thoughtful reader is simple: stateless associations of private cities are the way of the future.

In other words, anarchocapitalism.

Categories: Current Affairs

Jerusalem: the dogs that didn't bark

Lustig's Letter - Fri, 08/12/2017 - 09:00
I wonder how many Palestinians are familiar with the Sherlock Holmes story Silver Blaze.
Detective: 'Is there any other point to which you would wish to draw my attention?' Holmes: 'To the curious incident of the dog in the night-time.' Detective: 'The dog did nothing in the night-time.' Holmes: 'That was the curious incident.'
Bear with me. After President Trump's reckless announcement on Wednesday that the US now recognises Jerusalem as the capital of Israel (and that -- one day, some time in the far distant future -- it will move its embassy there), what was the curious incident?
Observe the reaction from the rulers of the the Arab world's most powerful nations. Did they rise up in fury? Did they threaten to cut off relations with Washington and cancel all their arms contracts?
No, they did not. Like the dog in the night-time, they did (virtually) nothing. Of course, they went through the motions: President Sisi of Egypt warned against 'complicating the situation in the region by introducing measures that would undermine chances for peace in the Middle East.'
King Salman of Saudi Arabia called the move 'a flagrant provocation of Muslims, all over the world.' But the country's real ruler, the king's son, crown prince Mohammed bin Salman, remained silent. Given that he is now best buddies with Trump's son-in-law Jared Kushner, his perfect imitation of the night-time dog should come as no surprise.
Not for the first time, the Palestinians have been left high and dry by their Arab neighbours. The New York Times reported a few days ago that when the embattled and enfeebled Palestinian leader Mahmoud Abbas was summoned to Riyadh last month, he was presented by the Saudi crown prince with a proposed plan 'that would be more tilted toward the Israelis than any ever embraced by the American government'.
The Saudis and Israelis, like Mr Trump, view Iran's regional ambitions as far more relvant to their interests than the fate of the Palestinians. In the face of the Middle East's three most militarily powerful nations, what hope is there now for poor Mr Abbas?
But the Arab world's autocratic rulers, whose acquiescence in the US president's foolhardy initiative does not at all reflect the mood of the people they supposedly represent, are not the only dogs that have failed to bark.
Behold the key words in Trump's carefully scripted announcement: 'I have determined that it is time to officially recognise Jerusalem as the capital of Israel.'
Did you spot the two missing words, two more dogs that didn't bark? According to Israel, Jerusalem is not merely its capital, it is its 'eternal, undivided' capital. There's a big difference -- because, at least in theory, there is nothing in Mr Trump's formulation that precludes the possibility of Jerusalem also, one day, becoming Palestine's capital as well. In Israel's formulation, there is.
So,  a glimmer of hope? Maybe. You may also, if you are in the habit of looking for silver linings, take some comfort from the following passage of his speech: 'We are not taking a position on any final status issues, including the specific boundaries of the Israeli sovereignty in Jerusalem or the resolution of contested borders. Those questions are up to the parties involved ... The United States would support a two-state solution if agreed to by both sides.'
Not exactly a ringing endorsement of long-established US policy, I agree -- and in any case, I am already on record as having lost any confidence that the two-state solution remains a viable option. What makes a workable deal even less likely is that this supposed master of deal-making has done the one thing that no deal-maker should ever do: he has given one party to the dispute a hugely valuable prize (even if it is largely symbolic) without extracting anything in return.
Why should Israel even contemplate negotiating in good faith if the current occupant of the White House is happy to concede one of their most fundamental demands, free, gratis and for nothing?
The US under President Trump has now abandoned any pretence (and it has largely been a pretence for many years) that it can be an honest broker in the Israel-Palestine conflict -- it has also turned its back on international law, since under the terms of the original UN resolution that paved the way for the establishment of the Israeli state,  Jerusalem was to be given neither to Israel nor to Palestine but was to be administered under a 'special international regime'. (That is why no country -- not one -- has an embassy in Jerusalem.)
There has already been anger on the streets of Palestinian towns and cities, and there may well be more deaths on both sides of the conflict as a direct result of Mr Trump's announcement. I wish I believed that those deaths might trouble his conscience, but perhaps no one has told him that a third of the people who live in Jerusalem happen to be Palestinians.
So why did he do it? First, because he said he would: 'While previous presidents have made this a major campaign promise, they failed to deliver. Today, I am delivering.' That will go down well with his core supporters, including evangelical Christians for whom the Jews' right to control Jerusalem is a bedrock belief.
Second, because no one could stop him. Unlike repealing Obamacare, or building a wall to keep out Mexicans, or banning immigrants from Muslim-majority countries, this was easy. Just make the speech, then sit back and enjoy the reaction.
Third, because he prides himself on being unlike any other president before him. Look again at those words: 'They failed to deliver ... I am delivering.' Never mind the consequences, just admire that jutting chin and puffed out chest.
And fourth, because it oh-so-helpfully diverts attention from a piece of news that he really, really does not want us to focus on: that Deutsche Bank has started handing over details of his financial dealings with them to Robert Mueller, the special prosecutor heading the inquiry into alleged Russian interference in last year's presidential election.
Categories: Current Affairs

Too many zombie companies - support for the Austrian view again

Adam Smith Institute - Fri, 08/12/2017 - 07:01

An accurate and useful description of economic models and theories is that there's a nugget at least of truth in each one of them. Yea even unto some of the corners of Marxism, a monopsonist employer of labour is indeed a bad idea. The trick is in deciding which model should be applied to the analysis of which problem and when.

Which brings us to the Austrian view of recessions and their aftermath:

There are as many as 100,000 “zombie companies” holding back the economy by soaking up credit that could be used to finance the businesses of the future, a study has claimed.

The Organisation of Economic Co-operation and Development has assessed the impact on productivity of zombie firms kept on life support by their banks and has found that Britain would be growing more quickly if it encouraged a clearout.

Zombie companies have been cited as one of the reasons for Britain’s weak productivity growth, as they soak up capital that successful businesses could use. The OECD defined zombie firms as being more than ten years old and having “persistent problems meeting their interest payments”.

It added: “Zombie firms represent a drag on productivity growth as they congest markets and divert credit, investment and skills from flowing to more productive and successful firms and contribute to slowing down the diffusion of best practices and new technologies across our economies.”

A crude - very crude indeed - sketch of that Austrian view is that mistakes are made in economies. That's fine, that's what the market is, an error detection machine. But the crucial next part is that those errors must be killed off. Bankruptcy the mechanism by which this happens.

We can and should ad in that comment of Warren Buffett's - it's when the tide goes out that you see who has been swimming in the nuddy. When times are generally good, in the upswing of a boom, mistakes can be and are covered up by that general enthusiasm. Recessions are, in this Austrian view, the necessary countervailing force, revealing and wiping out those accumulated errors. All of which is rather what the OECD is saying here. 

The policy implications of this view are harsh - when recession strikes just let it happen. Clear out that dead wood so that asset and production factors can be and are reallocated to more productive uses. Short sharp recessions are the way to deal with it, not ameliorative action which prevents economic pain for that simply extends the time span of said economic pain. 

Agreed, many don't like this view - but as the OECD is pointing out there's more than a nugget of truth to it all the same.

Categories: Current Affairs

The Great Cake Debate: The Importance of Conscience

Christian Concern - Fri, 08/12/2017 - 00:00
In recent months, there has been a proliferation of new legal cases where Christian business owners are being sued for refusing to provide services based on conscience grounds. These cases often relate to same-sex weddings or the promotion of messages supporting marriage redefinition. Equality Law and Christianity

In recent months, there has been a proliferation of new legal cases where Christian business owners are being sued for refusing to provide services based on conscience grounds. These cases often relate to same-sex weddings or the promotion of messages supporting marriage redefinition.

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Christian street preacher cleared of hate speech conviction

Christian Concern - Fri, 08/12/2017 - 00:00
A Christian street preacher has had his conviction for using ‘threatening and discriminatory language’ whilst preaching in Lincoln overturned by the Crown Court. Daniel Courney had his conviction overturned by the Crown Court

A Christian street preacher has had his conviction for using ‘threatening and discriminatory language’ whilst preaching in Lincoln overturned by the Crown Court.

Daniel Courney, aged 33 (pictured centre), had been convicted by Lincoln Magistrates on 14 September after the Crown Prosecution Service pressed charges over complaints by Muslims in the area. But at the Crown Court on Thursday, his conviction was overturned.

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Are Economic Crises Inherent to Market Economies?

Mises Institute - Thu, 07/12/2017 - 20:00
By: Jesús Huerta de Soto

It is interesting to note that Marx, in his analysis of the capitalist economic system, basically concentrates on the study of the imbalances and maladjustments which occur in the market.

This accounts for the fact that Marxist theory is primarily a theory of market disequilibrium and that occasionally it even coincides remarkably with the dynamic analysis of market processes which was developed by economists of the Austrian School, and particularly by Mises and Hayek themselves. One of the more curious points on which a certain agreement exists relates precisely to the theory of the crises and recessions which systematically ravage the capitalist system. Thus it is interesting to observe that certain authors of the Marxist tradition, such as the Ukrainian Mijail Ivanovich Tugan-Baranovsky (1865–1919), reached the conclusion that economic crises originate from a tendency toward a lack of proportion among the different branches of production, a lack Tugan-Baranovsky believed inherent in the capitalist system.1 According to Baranovsky, crises occur because 

the distribution of production ceases to be proportional: the machines, tools, tiles and wood used in construction are requested less than before, given that new companies are less numerous. However the producers of the means of production cannot withdraw their capital from their companies, and in addition, the importance of the capital involved in the form of buildings, machines, etc., obliges producers to continue producing (if not, the idle capital would not bear interest). Thus there is excessive production of the means of production.2

Clearly part of the underlying economic reasoning behind this analysis bears a strong resemblance to that behind the Austrian theory of the business cycle. In fact Hayek himself mentions Tugan-Baranovsky as one of the forerunners of the theory of the cycle he presents in Prices and Production.3

Furthermore it is interesting to note that Hayek himself, for a time, came to believe, like Marx, that economic crises were inherent in the capitalist economic system, although Hayek considered them the necessary cost of maintaining an elastic monetary and credit system, the expansion of which, at all times, would “guarantee” economic development. Specifically, Hayek asserted that economic crises arose

from the very nature of the modern organization of credit. So long as we make use of bank credit as a means of furthering economic development we shall have to put up with the resulting trade cycles. They are, in a sense, the price we pay for a speed of development exceeding that which people would voluntarily make possible through their savings, and which therefore has to be extorted from them. And even if it is a mistake—as the recurrence of crises would demonstrate—to suppose that we can, in this way, overcome all obstacles standing in the way of progress, it is at least conceivable that the non-economic factors of progress, such as technical and commercial knowledge, are thereby benefited in a way which we should be reluctant to forgo.4

This early thesis of Hayek’s, which partially coincides with that of Marx, would only be valid if the very Austrian theory of business cycles had not revealed that economic crises cause great damage to the productive structure and widespread consumption of accumulated capital. These effects seriously hinder the harmonious economic development of any society. Moreover (and this is even more important) the theoretical, legal, and economic analysis carried out here is aimed at demonstrating that economic crises are not an inevitable by-product of market economies, but on the contrary, result from a privilege governments have granted banks, allowing them, with respect to monetary demand deposits, to act outside the traditional legal principles of private property, principles vital to market economies. Thus credit expansion and economic cycles arise from an institutionally-forced violation of the property rights involved in the monetary bank deposit contract. Therefore crises are in no way inherent in the capitalist system, nor do they inevitably emerge in a market economy subject to the general legal principles that constitute its essential legal framework, an economy in which no privileges are conferred.

A second link connects Marxism and the Austrian theory of business cycles. Indeed if any ideology has justified and fed the class struggle, strengthening the popular belief that it is necessary to strictly regulate and control labor markets to “protect” workers from entrepreneurs and their capacity for exploitation, it has precisely been Marxist ideology. Hence Marxism has played a key and perhaps unintentional5 role in justifying and fostering the rigidity of labor markets, and therefore in making the readjustment processes which inevitably follow any stage of bank credit expansion much more prolonged and painful. If labor markets were much more flexible (a situation which will only be politically possible once the general public realizes how damaging labor regulation is), the necessary readjustment processes which follow credit expansion would be much less lasting and painful.

There is a third possible connection between the Austrian theory of economic cycles and Marxism: the absence of economic crises in systems of “real socialism,” an absence many authors have highly praised in the past. Nevertheless there is no point in arguing that economic crises do not arise in systems in which the means of production are never privately owned and all economic processes are coordinated from above through a coercive plan which public authorities deliberately impose. We must remember that depression appears in a market economy precisely because credit expansion distorts the productive structure, so that it no longer matches the one consumers would voluntarily maintain. 

Thus wherever consumers lack the freedom to choose and the productive structure is imposed on them from above, it is not that successive stages of boom and recession cannot occur, but rather, with all theoretical justification we may consider that such economies are continually and permanently in a situation of crisis and recession. This is due to the fact that the productive structure is imposed from above and does not coincide with the desires of citizens and it is theoretically impossible for the system to correct its maladjustments and discoordination.6 Therefore to contend that an economy of real socialism offers the advantage of eliminating economic crises is tantamount to affirming that the advantage of being dead is immunity to disease.7 Indeed after the fall of the socialist regimes of Eastern Europe, when consumers were again given the opportunity to freely establish the productive structure most in line with their desires, it immediately became clear that the scale and magnitude of past investment errors would make the readjustment process much deeper and much more prolonged and painful than is common in the stages of recession which affect market economies. 

It has become evident that most of the capital goods structure which existed in socialist economies was completely useless with respect to the needs and objectives characteristic of a modern economy. In short socialism provokes a widespread, intense, and chronic malinvestment of society’s factors of production and capital goods, a malinvestment much more severe than that caused by credit expansion. Hence we may conclude that “real socialism” is immersed in a deep “chronic depression,” i.e., in a situation of constant malinvestment of productive resources, a phenomenon which has even been accompanied by cyclical adverse changes and which has been studied in certain detail by various theorists from the former Eastern economies.

The appalling economic difficulties presently confronting the economies of the former Eastern bloc stem from many decades of systematic economic errors. These errors have been much more serious (and have been committed at a much more rapid pace) than those which have regularly appeared in the West due to credit expansion by the banking system and to the monetary policy of public authorities.

Excerpted from Money, Bank Credit, and Economic Cycles

  • 1. Tugan-Baranovsky, Industrial Crises in England. Spanish translation included in Lecturas de economía política, Francisco Cabrillo, ed. (Madrid: Minerva Ediciones, 1991), pp. 190–210. See also chapter 7, footnote 87.

  • 2. Excerpt translated from Spanish edition. Ibid., p. 205; italics added

  • 3. In the German literature similar ideas were introduced mainly by the writings of Karl Marx. It is on Marx that M.V. Tougan-Baranovsky’s work is based which in turn provided the starting point for the later work of Professor Spiethoff and Professor Cassel. The extent to which the theory developed in these lectures corresponds with that of the two last-named authors, particularly with that of Professor Spiethoff, need hardly be emphasised. (Hayek, Prices and Production, p. 103) 

    See also Hayek, The Pure Theory of Capital, p. 426. On Tugan-Baranovsky and the content of his doctoral thesis, The Industrial Crises in England, see the biographical article on this author by Alec Nove, published in The New Palgrave: A Dictionary of Economics, John Eatwell, Murray Milgate, and Peter Newman, eds. (London: Macmillan, 1987), vol. 4, pp. 705–06. The error in all of these doctrines of a “lack of proportion” lies in the fact that they disregard the monetary and interventionist origin (in the form of the privileged operation of the banking system) of such a lack, they fail to recognize the entrepreneurial tendency to detect and correct maladjustments (in the absence of state intervention) and they naively assume that government economic authorities possess a deeper knowledge of these effects than the network of entrepreneurs which act freely in the market. See Mises, Human Action, pp. 582–83.

  • 4. Hayek, Monetary Theory and the Trade Cycle, pp. 189–90. In 1929 the young Hayek added that, in his opinion, a rigid banking system would prevent crises, but “the stability of the economic system would be obtained at the price of curbing economic progress.” He concluded, It is no exaggeration to say that not only would it be impossible to put such a scheme into practice in the present state of economic enlightenment of the public, but even its theoretical justification would be doubtful. (Ibid., p. 191) 

  • 5. In fact Marx himself considered the interventionist and syndicalist versions of socialism “utopian” and even stated that welfare and labor legislation aimed at benefiting workers would invariably be ineffective. In this sense he fully accepted the classical school’s arguments against state regulation of the market economy. Marx’s position on this issue in no way lessens the fact that Marxism, quite unintentionally, was the main ideological force behind the “reformist” movements that justified intervention in the labor market.

  • 6. We have completely devoted the book, Socialismo, cálculo económico y función empresarial, to demonstrating why it is impossible for a system of real socialism to exert a coordinating effect through its policies even under the most favorable conditions.

  • 7. A dictator does not bother about whether or not the masses approve of his decision concerning how much to devote for current consumption and how much for additional investment. If the dictator invests more and thus curtails the means available for current consumption, the people must eat less and hold their tongues. No crisis emerges because the subjects have no opportunity to utter their dissatisfaction. Where there is no business at all, business can be neither good nor bad. There may be starvation or famine, but no depression in the sense in which this term is used in dealing with the problems of a market economy. Where the individuals are not free to choose, they cannot protest against the methods applied by those directing the course of production. (Mises, Human Action, pp. 565–66)

Categories: Current Affairs

Avocados smashing the case for socialism

Adam Smith Institute - Thu, 07/12/2017 - 17:58

Good news everybody! Scientists and capitalists have worked together to save the world (again)! That’s right, our A&E departments across the Western world will no longer be plagued by throngs of millennials who’ve cut their hands preparing their mortgage-breaking breakfasts – for now we'll all be able to buy stoneless avocados. The Tories might not be interested in winning over the hearts, minds or votes of millennials but clearly Marks and Spencers have spotted a gap in the market and are determined to exploit it. 

Innovation comes in many forms: from the over 700 varieties of cheese produced in the United Kingdom (quick nod to Liz Truss’ speechwriter there) to the myriad of insurance contracts brokered and underwritten at Lloyds of London. These innovations come not because government is in the business of writing one-size-fits-all central policy, but precisely because it is not. 

These avocados are a glorious part of the capitalist revolution. No pressure group has demanded them, no party has campaigned for cultivation programmes to develop them, and no grey bureaucrat would have been able to draw in all the various individuals from across the world needed to cultivate, grow and transport them to your shopping basket. 

In fact the British Association of Plastic, Reconstructive and Aesthetic Surgeons demonstrated the lack of imagination in all central planning in their response to the original news of a spike in avocado hand injuries as they said they wanted: “safety-warning labels placed on avocados” as “there is minimal understanding of how to handle them.”

Biologists, farmers, the retailers and now consumers will be free to tackle the negative externality of our increasingly international palate and reduce the unnecessary suffering caused by slicing your hand. They also, helpfully, get rid of the imperfect information that avocados nearly always come with–just how much of this very expensive fruit is pit. All-in-all consumer surplus looks like it is on the up.

Guess what, they do it all because of the profit motive. I just can’t understand why millennials aren’t all rabid capitalists like me!

Categories: Current Affairs


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