Blogroll Category: Current Affairs
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A remarkable American who made a profound impact on history was born on December 8th, 1765. This was Eli Whitney, an inventor, engineer and manufacturer. He found fame not only as the inventor of the cotton gin, a device that separated the cotton fibres from the hard seeds, but also as the pioneer of mass manufacture based on putting together interchangeable parts.
The new machines of England's Industrial Revolution needed cotton, but it was very labour-intensive. It took one person a full day to separate one pound of the cotton fibres from the attached seeds by hand. Whitey thought this process might be done by a simple hand-cranked machine, easy to make, operate and repair. Cotton was fed via a hopper onto a revolving cylinder bristling with short wire hooks to snag the fibre. A mesh allowed the fibre through, but not the seeds, and finally a drum rotating in the opposite direction brushed off and collected the cotton. The seeds could be used to plant more cotton, or to make cottonseed oil,
Whitney's simple cotton gin could enable someone to process 50 pounds of cotton in a day, vastly increasing he profitability of the crop, and transforming the economy of the American South. Whitney gained a patent in 1794, but the planters were reluctant to pay for his machines and service costs because the machine was too easily copied. Bootleg versions spread through the South, and Whitney was unable to enforce his patent protection in the courts. Planters grew rich by using slave labour to plant and harvest their cotton, and to process it, but Whitney's reward was a tiny fraction of the profits his machine made possible.
Arguably his bigger contribution came when the US government feared there might be a war with France, and needed muskets. They turned to outside contractors to supply 40,000, since the government armouries had only made 1,000 over a three-year period. While other suppliers made muskets using skilled artisans to fashion each piece, Whitney had derived an idea from his cotton gin manufacture, and bid to make 10,000 muskets by fitting together parts made by specially designed machine tools. Since the parts, including the stock, the barrel, the trigger, and so on were all made with precision separately, any of them could be fitted together with any of the others to make a musket.
Whitney described his tools as being "like an engraving on a copper plate," from which many identical prints could be made. In 1801 in front of newly elected President Thomas Jefferson and US officials, he had them pick parts at random from assembled piles of musket constituents and fit them together into complete muskets. They did so, and the age of mass manufacture from constituent parts was born.
Skilled craftsmen and artisans, together with their privileged patrons, bemoaned the fact that the products were identical, lacking individual craftsmanship. But they were cheap to make, and became accessible to those of more limited means. Henry Ford, later to invent the moving production line, gloried in the similarity and low cost of his cars, offering "any colour you like, as long as it's black."
The development of modern information technology and automation means that products are no longer identical. During manufacture the customer can specify individual requirements such as trim, colours, materials, etc., which are fed into the production process so that in the case of cars, no two coming off the production line are identical. Each one instead is custom made for the buyer. The process has become sophisticated enough to combine mass production with individual variation, such that each customer receives a different product. Whitney, who stared the process, would have ben astounded, but probably delighted, to see where it would lead.
A stirring rally call in the lead up to the election. Labour is just promising the return of universalism. There are certain things that all should have at a minimum standard and those things should be supplied by the state. We’d even agree with the base theory - all should have civil liberty for example. It the what as in, what things should all have provided by the state that we disagree with.
At which point the justification of that universalism as Labour is insisting:
But in the UK the arguments grounding this approach have to be made afresh. And they go like this: universal provision is more efficient, better quality, less stigmatising and builds social participation, while tackling poverty and hardship.
It’s the efficiency and quality claims we would argue with. People do tend to be more efficient in their use of things that they must directly pay for after all. And quality?
The state schools are better quality than the private? The NHS is better quality than private health care? The GPO was better quality than BT and today’s competitors? A government food service would be better quality than private sector supermarkets? We’ve not tried that one in Britain but the evidence from the Soviet system wouldn’t lead us to think so.
So, no, the claim doesn’t stand. Further, there’s a slightly more subtle reason why it doesn’t. We know that it is competition which improves productivity and standards of output. The one universal system of provision is exactly what does not allow that competition thus everything becomes worse than it could be over time in such a one producer system.
After all, we do want the citizenry to have the best - which is exactly why we don’t want monopoly provision of it, whether that monopoly is being run by the state or anyone else.
In the space of less than one month the Karnataka Central Diocese (KCD), acting on behalf of the Church of South India Trust Association (CSITA), has lodged two criminal complaints against the same set of persons. The first complaint dated 15/10/2019 was lodged with the Ulsoor police station in Bengaluru and the second dated 13/11/2019 in the police station in Chikkaballapur, about 55 kms from Bengaluru. In both these, the KCD has accused one John S. Dorai, Thyagaraja, Jeevan Stephen and “others” of attempting to illegally transact prime CSITA property in Bengaluru and Chikkaballapur. Both complaints have resulted in FIRs and at least one arrest has been made.
At Youth4CSI we have criticised John Dorai and his associates (See our Jan 23, 2019 post “Are those claiming to be the fence now eating the crop?”) for attempting to lease out CSITA property in Mysuru and elsewhere. We are not convinced of the argument put forward by Dorai and his supporters that leasing was a strategy to prevent illegal sale of these properties by those in power or by the ruse used of depositing a part of the lease proceeds in official CSITA accounts to make it appear the transactions are above board. That said, the two recent police complaints lodged by the KCD Secretary Rev Paul Dhanasegaran, a close associate of Bishop P.K. Samuel, raise many troubling questions as to their timing and real intent.
We are attaching below the police complaint lodged by the KCD three weeks ago about the Chikkaballapur property transaction that we at Youth4CSI first reported on a month ago. See. https://www.facebook.com/youth4csi/posts/2305629669560262 The following are some of the issues thrown up by that complaint filed by KCD which also contains information on the other complaint filed a month earlier:
1) Pg 2 of the complaint reveals that a “bogus lease agreement” on the No 4 M.G. Road property (seen in picture) was executed on 3/2/2018. It also reveals that the CSITA had officially requested the KCD to lodge a criminal complaint on 22/11/2018. Yet the complaint in the 4 M.G. Road matter was lodged only a year later on 15/10/2019 as revealed in the letter. Why such an inordinate delay and why now?
2) Pg 2 of the complaint also states that the GPA given by John Dorai was dated 22/10/2018 but the No 4 M.G. Road bogus lease agreement was dated 3/2/2018. So how could the two be connected? In fact there is no connection between the two as the 22/10/2018 GPA (also attached below) was not only executed eight months after the alleged bogus lease on 4 M.G. Road property but was valid only for a very limited period from 22/10/2018 to 20/11/2018 (see pg 3 of GPA). It seems the purpose of this GPA was only to register the lease on a CSITA property in Mysuru which was done on 14/11/2018. So how could this date-limited GPA have been used to execute the agreements on either the No 4 M.G. Road or Chikkaballapur properties? Surely the beneficiaries of those agreements would have objected had this been the case.
3) While the complaint of 15/10/2019 makes the lessee of No 4 M.G. Road property K. Abdul Nazar a co-conspirator and accused with Thyagaraja and others, the complaint of 13/11/2019 gives a clean chit to the Chikkaballapur agreement beneficiary M/S M.S. Ramaiah Developers & Builders Pvt Ltd. This is all the more strange as this company is cited in the complaint letter as a “long-time tenant” of another landmark CSITA property in Bengaluru and would surely have known about who the real powers in the CSITA-KCD were or would have at least made a phone call to confirm. In any case why Is the KCD giving the builder a clean chit in advance in its complaint when it is actually the job of the police to do so after due investigation?
4) Youth4CSI understands the Chikkaballapur case has been transferred to the Ulsoor police station for it to be clubbed with the investigation into the earlier complaint since the accused persons are the same. Incidentally the Ulsoor police station is located a few hundred metres from where the KCD Bishop’s House is located and has been often called on to settle various issues.
Now here is why the timing of the two complaints become important. As we reported last month, Bishop P.K. Samuel is one of three bishops vying to become Moderator of the CSI in Synod polls in January 2020. The leading contender for the post currently is Bishop Dharmaraj Rasalam of South Kerala Diocese. Bishop Rasalam was in the running for the job in 2017 itself when he was persuaded by fellow bishops to make way for Bishop Thomas Oommen of Madhya Kerala Diocese. Oommen, it was argued then, had, due to the retirement age being 67, only one chance to become Moderator while Rasalam could stand again in 2020. Besides, Oommen was the Deputy Moderator at the time.
Given Rasalam’s seniority and the apparent “promise” held out to him in 2017, Bishop Samuel has to do something significant if he has to negate this advantage that Bishop Rasalam currently enjoys. John Dorai has long been a thorn in the side of the CSI bishops and sending him to jail (the Bengaluru police are still actively looking for him) will go down well with Samuel’s fellow bishops. At least that could be the thinking behind the first complaint that was lodged on the eve of the Moderator’s elections and a full one and half years after the alleged No 4 M.G. Road property lease was executed.
As per the 2016 CSI Constitution the Bishops’ Council meeting on the first day of the Synod session is to agree (either unanimously or by two thirds majority) on one name for Moderator and another for Deputy Moderator which then have to be ratified by a majority affirmative vote of the Synod. If the bishop nominated for Moderator/Deputy Moderator does not get a majority or if the Bishops’ Council fails to propose one name, the Council will choose two names by secret ballot and the Synod will elect one of them by simple majority. This is very different from the system prevailing pre-2016 where whichever bishop who wanted to become Moderator could directly take his campaign to Synod voters. Since all three Moderator contenders this time have only one shot at the post before they retire, the competition to be the name put forward by the bishops or to be among the two chosen by secret ballot will be intense come next month. And in such a scenario expect all three candidates to pull out all stops.
The post Has the Upcoming Moderator Election Influenced the Filing of Two Criminal Complaints by the KCD? appeared first on Anglican Ink © 2019.
The CSI Synod has appointed an Administrative Committee to manage the affairs of the Krishna Godavari Diocese. In an “order” dated 28th November 2019 and addressed to Bishop George Cornelious, the Synod has said this was needed to fill an “administrative vacuum” created in the diocese. The Committee with Bishop Cornelious (seen in pic with his wife) as chairman has 15 members including Vijay Pradhan (KG Diocese) as administrative secretary, N. D. Solomon Raju (Karnataka Central Diocese) as financial administrator and Babu Abraham (Cochin Diocese) and Samuel Cornelius (Madras Diocese) as two of its members from outside the KG diocese.
Explaining the circumstances leading to the decision, the order issued on a Synod Secretariat letterhead in the name of Moderator Thomas K. Oommen states: “The new Diocesan Council of Krishna Godavari diocese for the triennium 2019-2021 was convened and constituted on 8th November 2019. Then came a status quo order with regard to conduction (sic) of elections if they are not completed by 1.00 p.m. from the High Court of Andhra Pradesh at Amaravati in writ petition no 17759 of 2019. The election of the Executive Committee and other Boards and Committees were not completed by 1.00 p.m. as per the report of the Election Officer and that the new officers elected were not installed as the Council came to be adjourned around 1.30 pm.” Youth4CSI has a copy of the Synod order (strangely it carries only a round stamp of Moderator beside his name at the end, not his signature) but is not able to attach it here as the photocopy we received is rather faint.
The AP High Court was moved by the same petitioners who had got former Moderator and Bishop of Krishna Godavari G. Dyvarsirvadam arrested last December and jailed for a month on major corruption charges. They contended that incumbent Diocesan Secretary G. S. Sudheer, a nephew of Dyva, who had issued notices convening the Council stood incapacitated from taking such action by pending criminal and civil cases involving him. Sudheer is a co-accused in the criminal case against his uncle and is currently out on bail.
An interesting strategy adopted by the petitioners was that they made senior government officials including the Collector and Police Commissioner of Vijayawada the lead respondents (see order copy attached) in the WP and argued these officials were not performing their duty in restraining the diocesan officials from violating status quo orders passed in other cases against them. Most stays brought against Diocesan Council elections are from local courts. As the KG diocese had already taken caveats in local courts in Vijayawada, the petitioners directly moved the AP High Court where, to make the petition stick, they used alleged inaction by senior government officers as the cause of action. Though the ex-parte stay sought by the petitioners did not fructify, a curiously worded order saying status quo will be maintained if elections had not been completed by 1.00 pm on the date of hearing, which was the opening day of the Council, was issued (see attachment) .
While the immediate purpose of getting the Council stayed has been served, it will be a greater challenge for the petitioners to ensure the stay continues longer than if the matter were in a local trial court. The case is again coming up for hearing next week, when the petitioners are to file the counter to the submission made by the diocese. The stayed Council election was also meant to elect the 17 members who will represent the diocese in the triennial Synod session being held in Trichy in January 2020. Now it is unlikely they will be present in Trichy.
Bishop Cornelious who succeeded Dyvasrivadam is said to be not much different than his predecessor when it comes to making a fast buck be it through unofficial fees for teacher appointments, transfers, conducting confirmation services, etc. He suffered a mild stroke last month but is said to have made a full recovery. Meanwhile the chargesheet against Dyva, who is currently out on bail, has yet to be filed by the CB-CID even a year after he was arrested and jailed. Sources say transfers of several officials after the installation of the new Jagan Mohan Reddy government in Andhra Pradesh in May 2019 has led to the delay and are hopeful of this happening early in the new year.
The post CSI places diocese of Krishna Godavari under national church administration appeared first on Anglican Ink © 2019.
Several hundred men, women and young girls and boys mobilized on Saturday 30 November 2019 in the commune of Buhiga to demonstrate their commitment to the fight against violence against women and girls.
This event was organized by the Church of Burundi and saw the participation of the population from the public and private sector.
For the Bishop of Buhiga it was an opportunity to reflect on the damage caused by domestic violence and examine the environments where it takes, as well as the impact it has on the lives of victims. They gathered to unite efforts to combat these violence.
The Governor of the Province of Karuzi acknowledged the existence of gender-based violence in this province and called on everyone to contribute to its eradication.
The Archbishop of the Church of Burundi made an urgent call to the authors of violence to turn away from it and encouraged the victims to denounce the authors and to entrust themselves to the care centers.
This gathering was also an opportunity to call on the people not to give up their arms against the fight against AIDS and that all people play a part in its eradication.
CSW welcomes the repeal of Sudan’s repressive Public Order Laws, announced on 29 November, but remains concerned that the country’s Criminal Code has not been amended and can still be used.
On 29 November the Prime Minister of Sudan Abdalla Hamdok welcomed the abolition of the Public Order Law by the transitional government, paying tribute to “the women and youth of my country who have endured the atrocities that resulted from the implementation of this law.”
The repeal of the Public Order Laws has also been widely welcomed by human rights groups, and particularly by women’s rights groups. The laws were designed to regulate relations between men and women, including requirements for separate sections for men and women on public transport and the prohibition of dancing together. The laws also regulated the dress code for women in public.
However, the repealed public order laws were local laws implemented in each state. The national laws remain in effect through the 1991 Criminal Code, and it is under these laws that religious minority women have historically been arrested, fined and given lashes on public indecency charges. On 25 June 2015 twelve Christian women from the Nuba Mountains were arrested as they left the El Izba Baptist Church in Khartoum wearing trousers and skirts. Two of the women were subsequently found guilty of indecent or immoral dress and fined.
Sudanese women’s rights activist and journalist Wini Omar, who was prosecuted for indecent dress in 2017 under article 152 of the criminal code, told CSW: “When it comes to public order regime in Sudan, there is an urgent need to work on amending the Criminal Code, which includes numerous articles that discriminate against women and limit the personal freedoms of individuals. It also requires the abolition of public order courts and the public order police. Amending personal status law is a crucial step, and legislation on sexual harassment and domestic violence are also needed to protect women”
Sudan’s criminal code also contains provisions that limit personal freedoms and criminalise apostasy and blasphemy. In May 2014 Meriam Ibrahim was sentenced to 100 lashes for adultery, and to death by hanging for apostasy by the Public Order Court in El Haj Yousif, Khartoum. The court ruled that despite being raised by her Christian mother, Ms Ibrahim was a Muslim because her father was Muslim. The law also prohibits Muslim women from marrying a non-Muslim man, therefore by marrying a Christian she was deemed to have committed adultery. The court of appeal overturned the original ruling in June 2014 and declared Ms Ibrahim innocent, but the law under which she was convicted remains in effect.
CSW’s Chief Executive Mervyn Thomas said: “While we welcome the repeal of Sudan’s repressive local Public Order Laws, which have been used historically to target women and have had a particularly deleterious effect on women from religious minority communities and lower socio-economic backgrounds, we remain concerned that no changes have been made to the criminal code. The criminal code contains numerous provisions that are inconsistent with Sudan’s international obligations to protect the rights of women, as well as the right to freedom of religion or belief. We urge the Minister of Justice to urgently prioritise the review and amendment of these damaging laws.”
(4 Dec 2019)
Many of you will have heard that Archbishop Emeritus Desmond has been admitted to hospital for the treatment of what Mama Leah described as a stubborn infection. He has been hospitalised a number of times over the past few years for such infections.
I went to see him this evening, where I found him lucid and engaging. He said he is as good as he can be for an 88-year-old, especially in view of his ill-health in childhood.
When I told him that I had told Leah I was coming to scold him out of hospital, he chuckled warmly, which is a good sign. He also said he apologised for making me do so many hospital visits!
Before leaving, we said the Lord’s Prayer together and I gave him a blessing.
Please pray for him, for Mama Leah, for Trevor, Thandi, Nontombi and Mpho and their familes, and for the doctors treating him.
++Thabo Cape Town
The post Archbishop of Cape Town gives update on the health of Desmond Tutu appeared first on Anglican Ink © 2019.
There is a well-known doctrine in Islam called Taqiyya. It’s the principle that should some deceit further Islam’s interest, you have a duty to deceive. It looks tragically as though Usman Khan was pretending that had been de-radicalised, when in fact, as his killing spree indicated he hadn’t. But he had deceived a number of people on the way.
If that’s true, it makes Jack Merritt’s death doubly tragic. His poor father, desperate to honour his dead son’s memory, asked the politicians not to use his son’s murder in their political campaigns as a political football. But, that wasn’t going to happen. It didn’t happen; it couldn’t happen.
The facts of last week’s ‘terrorist’ murders in London are clear and beyond any kind of dispute. But their meaning divides our society just as grievously as Brexit, or the election campaign.
We find that we have to make decisions about the programmes that offer the rehabilitation of offenders. We have to make judgments about human nature; and we have to decide if Islam is just one religion amongst many, or unique in how it sees itself and what it is setting out to achieve.
The rehabilitation of offenders is the easiest and least offensive of the three questions. The work that Jack Merritt and his Cambridge colleagues set out to do was wholly admirable. Those of us who have met, befriended and even admired people who have fallen through the social net feel passionately about giving people a second chance. Everyone ought to be given a second chance.
But are there any limits? The very press that has been praising the work of the Cambridge rehabilitation programme and its reaching out to Muslim terrorists has gone strangely silent over James Ford.
If you watched any of the video footage on social media,James Ford was the last man to be dragged off Usman Khan. Ford was incredibly brave. He too was an ex con. But some years ago, he had killed Amanda Champion, a vulnerable young woman with learning difficulties.
Now Ford seems to have disappeared from the public narrative. There is nothing romantic and no victimhood attaching to that kind of murder. But he too was part of the well intentioned rehabilitation programme. No one is now asking how his heart and mind have been changed by the programme.
If you believe in forgiveness and second chances, it includes murderers like James Ford. But there is a precondition for rehabilitation; you’ve got to want it. You have got to have come to a point where you are as broken-hearted and repulsed by the damage you have done and the misery you have caused as your victims are. It doesn’t just happen through educational programmes.
That certainly applies to murderers; but does it apply to Islamists ? That might seem like an offensive question at first sight. But one of the reasons why Jack Merritt’s dad’s hope that politics could be kept out of his bereavement failed, is that unlike any other religion, Islam is political. It is hybrid. It’s half a religion and half a political and military way of life. Most people in the West, knowing almost nothing about it, think of it as if it were an Arabic form of Judaism or Christianity. But it isn’t.
The Times last Tuesday carried a photo of Usman taken a few years ago carrying a banner “Islam will dominate the world.” That is a perfectly respectable Islamic view. For in Islamic thought the world is divided into two areas. Dar al-Islam,theworld of peace which is where Islam dominates and everyone lives according to Islamic values; and daral-harb,the territory of war, which is everywhere else that has not yet submitted to Islam, but will. Islam has three major strategies. Immigration, birth rates and violence.
Because the West treats Islam as if it were only a system of piety, instead of being both a religion and a political way of life as ambitious for world domination as any other group who have set out to achieve it, be they Romans, Marxists or Nazis, we misunderstand Islam, and Usman Khan.
By imposing words like extremist, or terrorist or radical on Usman and his friends, or on Isis and its members, we deceive ourselves. You can’t de-radicalise a Muslim who is being faithful to Islam’s political and cultural ambitions, because he’s not been radicalised in the first place. He might have been energised, or inspired or enthused, but not ‘radicalised’. Isis is not ‘extremist’. It is behaving in a way that is faithful to Islamic values, theology and the example of Mohammed.
A sudden glimmer of that realisation has presented itself to some of our politicians, but the implications of this are so problematic that the media and most people neither want to know, or be told. Because it exposes that what de-radicalisation and rehabilitation really mean, is persuading Umsan and those who understand Islam as he does that they should prefer Western liberal secular values to core Islamic ones.
That’s a big ask. And how many of them are there? Gilles de Kerchove, the EU’s anti-terrorist coordinator estimates 25,000 in the UK alone of whom 3,000 are under daily surveillance by MI5 &6. If that’s true, where do we go from here?
The post Islam has three political strategies — immigration, population and violence appeared first on Anglican Ink © 2019.
It is widely believed that resources that are utilized in normal times to promote economic prosperity become underutilized during recessions. Some experts hold that what is required are policies which will increase the availability of credit. On this Ludwig von Mises wrote in Human Action,
Here, they say, are plants and farms whose capacity to produce is either not used at all or not to its full extent. Here are piles of unsalable commodities and hosts of unemployed workers. But here are also masses of people who would be lucky if they only could satisfy their wants more amply. All that is lacking is credit. Additional credit would enable the entrepreneurs to resume or to expand production. The unemployed would find jobs again and could buy the products. This reasoning seems plausible. Nonetheless it is utterly wrong.
It makes sense to suggest that what is lacking to absorb idle resources is the scarcity of credit. One should however emphasize that the credit that is lacking is productive credit. Briefly, productive credit emerges when a wealth generator lends some of his real wealth to another wealth generator. By giving up the use of the loaned real wealth at present, the lender is compensated in terms of interest that the borrower agrees to pay.
As a rule, the greater the expansion in real wealth, the lower the interest rate that the lender is likely to agree to accept (i.e., his time preference is likely to decline).
Observe that the interest rate is just an indicator, as it were — it is not responsible for the expansion in real wealth. Any policy that tampers with interest rates makes it much harder for wealth generators to assess the true state of the productive credit. This in turn leads to the misallocation of productive credit and to the weakening in the wealth generation process.
As a result of distorted interest rates, an overproduction of some goods and the under production of other goods emerges.Loose Monetary Policy Appears To Work Because of the Expanding Pool of Real Wealth
As long as the pool of real wealth is expanding, easy monetary policy will appear to “work.” Once, however, the pool becomes stagnant or starts declining, the “music stops” and no amount of central bank monetary pumping is going to “work.”
On the contrary, the more aggressive the central bank’s stance is in attempting to revive the economy the worse things are likely to get. The reason being because easy monetary policy strengthens the exchange of nothing for something thereby weakening the process of real wealth generation — the heart of economic growth.
One could argue that, irrespective of the reasons for the emergence of idle resources, the role of the central bank is to pursue policies that will make it possible for a greater use of these resources.
Loose monetary policy cannot replace real savings that are required to employ idle resources. Note that the central bank is not a real wealth generator, and hence does not have real savings to support real economic growth. (GDP growth has nothing to do with a genuine economic growth. Individuals in the various stages of production require goods and services to maintain their life and wellbeing, not pieces of paper we label as money).Idle Resources Emerge from the Previous Boom
What those commentators who advocate easy monetary policies to absorb idle resources have overlooked is that as a rule, idle resources emerge on account of boom-bust policies of the central bank. As a result of the previous easy monetary stance, various non-productive or “bubble” activities have emerged. These activities depend on easy monetary policy for their existence, which diverts real wealth to them from wealth generators.Once the the bust takes hold, bubbles burst and more resources become idle.
There is only one sustainable solution to this. People would have to cut back on consumption and production which were not truly wealth-generating but were bubbles created out of easy-money policies. It is quite possible that certain types of consumption and production would have to be abolished all together. This also implies that individuals that are employed in activities that generate products which are on the lowest priority list of consumers would have to adjust their conduct. This could be done by accepting lower salaries or by trying to be employed in activities that generate products, which are on the highest priority list of consumers. For this, they would have to alter their skills.
In the meantime, there will be many idle resources.
According to Mises,
Out of the collapse of the boom there is only one way back to a state of affairs in which progressive accumulation of capital safeguards a steady improvement of material well-being: new saving must accumulate the capital goods needed for a harmonious equipment of all branches of production with the capital required. One must provide the capital goods lacking in those branches which were unduly neglected in the boom. Wage rates must drop; people must restrict their consumption temporarily until the capital wasted by malinvestment is restored. Those who dislike these hardships of the readjustment period must abstain in time from credit expansion.
Furthermore says Mises,
If commodities cannot be sold and workers cannot find jobs, the reason can only be that the prices and wages asked are too high. He who wants to sell his inventories or his capacity to work must reduce his demand until he finds a buyer. Such is the law of the market. Such is the device by means of which the market directs every individual's activities into those lines in which they can best contribute to the satisfaction of the wants of the consumers.
Obviously, printing more money cannot fix the issue of idle resources. What is required is time to re-build the pool of real wealth, which was damaged by the previous easy monetary policies of the central bank. The reinvigorated pool of real wealth will make it possible to strengthen the pool of real savings, which in turn will make it possible to employ various idle resources.
The most important decision that authorities could make is to acknowledge the damage that the printing presses have caused and remove themselves from managing the so-called economy.
Not every square inch of the planet earth is suitable for a housing development. Flood plains are not great places to build homes. A grove of trees adjacent to a tinder-dry national forest is not ideal for a dream home. And California's chaparral ecosystems are risky places for neighborhoods.
This is nothing new. While people many Americans who live back East may imagine that something must be deeply wrong when they hear about fires out West, the fact is things are different in North America west of the hundredth meridian. The West is more prone to extreme temperatures, hundred-year droughts, and fires in the wilderness. Many of these ecosystems evolved with this fire risk.
Efforts to blame them primarily on climate change ignore the long standing reality. The Sacramento Bee notes, for example:
It’s also not enough to blame the growing devastation of recent wildfires solely on climate change, researchers said. While drier, warmer conditions have lengthened the fire season and likely increased the severity of the blazes, wildfires are only destroying more homes today than decades before because of rapid growth in rural areas.
It's not that fires are more devastating in the natural sense. The problem is that human beings insist on putting their property in places where fires have long destroyed the landscape, over and over again.
The Bee continues:
[T]he fires aren’t getting closer to us — we’re getting closer to the fires. “We’re seeing wildfires that have always been a part of the landscape that are now interacting more and more with us..."
Strader studied wildfire history in the western United States going back three decades, then mapped population growth in areas where fire activity had ranged from medium to very high. His research determined there were 600,000 homes in fire prone areas in the West in 1940. Today, that number is around 7 million.
So, why do people keep building homes in these places? Part of it is natural populations growth, of course. But the manner and rapidity with which this development expands out into the fringes of metro areas is also partly due to government policy and infrastructure.
In an unhampered market, it would be very expensive to extend a new neighborhood out into ever-further-out regions near metro areas. In order to reach these places, housing developers would need to find a way to finance both the new housing construction and the roads that give access to them. Certainly, developers often provide part of the funding through development fees demanded by governments. But these roads are often also subsidized by state and local governments, especially in the form of ongoing maintenance. Once a road to a new semi-rural community is built, governments will often maintain it, while spreading the cost across all the jurisdiction's taxpayers.
This system of subsidy allows more rapid and more dispersed development. Unsubsidized roads would tend to force more close-in and more dense development.
The federal development also subsidizes the construction of larger and more sprawling residential property through the FHA insurance programs and government-sponsored enterprises like Fannie Mae. By purchasing home loans on the secondary market, the GSEs push more liquidity into the home loan market, making loans cheaper, and pushing up demand for larger, sprawling developments.
Many conservatives often speak of density in residential and commercial development as if it were some kind of left-wing conspiracy. It is assumed that few people who opt for density were there not left-wing urban planners to force it on everyone.
But the reality is that in an unhampered market, density levels would be higher than they are now, because sprawl would be (all else remaining equal) much more costly to consumers than is now the case.
Naturally, many left-wing advocates favor changing California's housing development patterns in light of the fire risk. But they can only point toward more restrictive government regulations. The Los Angeles Times editorial board, for example, complains that "Land-use decisions are made by local elected officials and they’ve proven themselves unwilling to say no to dangerous sprawl development ..."
But government prohibitions simply aren't necessary. If people insist on building and selling homes in fire-prone areas, let them be the ones to cover all the costs. This includes the cost of fire mitigation and rebuilding after fire. This in itself would limit development in these areas.
And yet, while California pundits are complaining that policymakers aren't doing enough, California politicians are actively taking steps to keep the market from correcting the excessive building in fire-prone areas.
This week, California regulators prohibited insurance companies from dropping the homeowners' insurance policies of homeowners in fire prone areas:
The state said its moratorium applies to about 800,000 homes, and more areas are expected to be added.
A state law passed last year allows the California Department of Insurance to require insurers to renew residential policies for one year in ZIP Codes that have been affected by declared wildfire disasters.
Previously, insurers had to renew policies for homeowners who suffered a total loss. The current law extends to all policyholders in an affected area, regardless of whether they experienced a loss.
Not surprisingly, many homeowners in fire-prone areas of the state are having problems finding fire insurance for their homes. And they often pay handsomely when they do find it. That's too bad for the owners this fact doesn't justify handing down state mandates that insurance companies continue to cover people who have taken on unacceptably high risk.
By stepping in to force insurance companies to cover these homeowners, California politicians are doing two things:
They're continuing the cycle of encouraging homebuyers to buy homes in areas likely to fall victim to wildfires. At the same time, regulators are increasing the costs incurred by insurance companies, and this will likely have the effect of driving up the price of fire insurance for homeowners who more prudently declined to purchase a house in fire-prone areas.1
At the macro level, the end result will be something akin to what we've seen in flood-prone areas in the United States. Thanks to federal regulations and subsidies, many property owners can avail themselves of flood insurance priced well below what would be available in an unhampered market. Legislation such as the National Flood Insurance Act of 1968 means builders and homeowners have been encouraged to place property where they're likely to be flooded over and over again.
We're now seeing a similar type of moral hazard at work in California.
In a more sane political environment, however, those who insist on living in the way of wildfires would have to assume the risk of doing so, rather than demanding politicians force the cost on insurance companies and taxpayers.
- 1. Fire insurance is often more expensive in rural and semi-rural areas not just as a function of fire risk. These areas often lack water infrastructure other than wells, which means no fire hydrants. Water for fire suppression can only be used if transported by truck to the site.
One day after the Japanese attack on the US Pacific fleet at Pearl Harbour on December 7th, 1941, President Roosevelt made a speech to Congress describing it as “a date which will live in infamy.” History has usually shortened and corrected “a date which” to “a day that,” and often abbreviated it simply to “Day of Infamy.”
The Japanese attack was made without a declaration of war against a country at peace that had hitherto refrained from entering the Second World War, already raging in Europe and elsewhere. Japanese diplomats in Washington DC were pretending to talk peace even as its carrier fleet sailed towards its target in the Hawaiian Islands.
The unprovoked nature of the peacetime attack, compounded by the duplicity of the Japanese, outraged American opinion. Congress declared war immediately after the President’s speech, and Americans rushed to enlist in the armed forces. Roosevelt had long been trying to edge US public opinion towards what he saw as an inevitable war with Nazi Germany. He had been unsuccessful, but now Hitler solved the problem by declaring war on the United States four days after the Japanese attack. His action enabled Roosevelt to make Europe the main theatre of US action, even though it had been attacked in the Pacific by Japan.
The Japanese people had been brainwashed by a ruthless and racist ideology that regarded other races as lower forms of humanity, just as their Nazi counterparts in Germany had idealized the ‘superior’ Aryan race. Japan thought it could win a short war against the US by a preemptive strike against its ability to hit back. They needed overseas possessions to provide raw materials and slave labour for their imperial ambitions.
While the Japanese attack sank or severely damaged US battleships, cruisers and destroyers, the US aircraft carriers had left port days earlier and were not hit. This was a serious blow because naval warfare was on the cusp of a change from direct ship-to-ship engagements to attacks from long range by carrier aircraft. The Japanese attack therefore failed to establish their command of the Pacific waters.
When the US hit Tokyo with B25 Mitchell bombers flown from the USS Hornet, Japan sought to establish a protective shield by taking Midway Island. US Navy codebreakers uncovered the plan and enabled the Japanese task force to be attacked by US carriers lying in wait. Four of the carriers that had carried out the Pearl Harbour attack were destroyed, and hundreds of their most skilled and experienced pilots were killed. This took place only 6 months after their Pearl Harbour attack.
A fatal weakness of the Japanese was their neglect of defence. It was part of their ideology that they would attack. Their Zero fighter was a superb machine, fast and agile, but it lacked any protective armour or fuel tank baffles, and a single hit could turn it into a fireball. Their carriers, unlike the US ones, lacked effective fire control systems. Their fuel hoses did not shut down during a battle, and torpedoes and bombs were scattered across the decks instead of safely stowed. The result was that when a bomb struck, the Japanese carriers became exploding and raging infernos.
The lessons of Pearl Harbour lasted throughout the Cold War, in that the West was determined that no surprise attack should destroy its ability to retaliate. Aircraft sat fueled up on runways, with some already airborne. Ballistic missile submarines patrolled the oceans, with reconnaissance planes and later satellites watching for any signs of a surprise attack. It was fraught with danger, but it kept the peace. That December day in 1941 had taught vigilance, and the lesson lasted.
The Austrian business cycle theory offers a sound explanation of what happens with the economy if and when the central banks, in close cooperation with commercial banks, create new money balances through credit expansion. Said credit expansion causes the market interest rate to drop below its "natural level," tempting people to save less and consume more. Credit expansion also drives firms to increase investment spending. The economy enters into a boom phase.
However, the boom is unsustainable. After the effect of the injection of new money balances has worked itself through the economy, consumers and entrepreneurs realize that the economic expansion has been a one-off affair. They return to their previously preferred savings-consumption-investment affinity: once again, they save more, consume, and invest less. This manifests itself in a rising market interest rate and the boom subsequently turns into bust.Credit Market Distortion
The market interest rate plays a crucial role in the boom and bust cycle. As it is manipulated downwards by the central bank, a boom sets off, and as the market interest returns to its "natural level," the boom turns into bust. This explains why central banks have been increasingly trying to gain full control over the market interest rate in recent years: for he who controls the market interest rate controls the boom and bust cycle.
The major central banks around the world have effectively taken over the credit markets in an attempt to prevent the current boom from turning into yet another bust. On the one hand, monetary authorities fix the short-term market interest rate in the interbank funding market. By doing so, they also exert a rather strong influence on credit rates across all maturities.
On the other hand, central banks influence long-term interest rates directly: They purchase long-term bonds, thereby determining their price and yield. The credit market ‘government securities’ can be expected to already be under full control of monetary policymakers; and it is just a technicality for any central bank to extend its purchases if needed to bank and corporate debentures and mortgage debt.Keeping the Boom Going
If and when central banks succeed in keeping market interest rates at very low levels, the "correction mechanism" — namely a rise in market interest rates — is put to rest, and the boom can be kept going, while the bust is postponed. Basically, all major central banks around the world have taken recourse to policies controlling market interest rates, and quite effectively so as the economic expansion — fueled by overconsumption and malinvestment — in the last decade testifies.
The question is, however, whether the boom can last indefinitely, whether the economies can flourish with chronically artificially suppressed interest rates? This is a rather complicated question, deserving of an elaborate answer. To start with, the boom can be kept going as long as market interest rates remain suppressed below the economy’s "natural interest rate."
If however, the market interest rate hits zero, things take a nasty turn, as people would stop saving and investing. Why save and invest, why take any risks that do not yield a positive return? In fact, with the market interest rate hitting zero, capital consumption sets in, the division of labor collapses. A nightmare scenario: If the market interest rate disappears, we will fall back into a primitive hand-to-month economy.Causing Price Bubbles
Against this backdrop, we may say the following: As long as there is still room for pushing the market interest rate down further, the chances are reasonably good that the boom continues, and that the bust will be adjourned into the future. As per the charts below, current market interest rates in the US have not reached rock bottom yet. Corporate and mortgage credit costs in particular still have some way to go before hitting zero.
Meanwhile, the forced depression of market interest rates drives up asset prices such as, for instance, stocks for at least two reasons. First, expected future profits are discounted at a lower interest rate, thereby increasing their present value and thus market price. Second, lower interest rates reduce firms’ cost of debt, translating into higher profits — which also contributes to higher stock prices in the market place.
It should therefore not come as a surprise that the decline in market interest rates in recent years has indeed been accompanied by buoyant stock prices — as illustrated in the chart above. Just to point out one thing again: The decline in market interest rates is only one factor among many others which explain why stock prices have gone up in recent years. But it is a significant factor, and it contributes to the build-up of a price bubble.Wiping Out Investment Returns
As long as the boom keeps going, people rejoice — especially so when asset returns remain buoyant — and they do not question the underlying forces driving the "make-believe world of prosperity." However, a monetary policy of ever-lower interest rates can only go so far. For if central banks push their key interest rate and government bond yields to zero, they basically drag down all other investment returns with them.
This is because investors, in a desperate search for yields, would bid up the prices for assets such as, say, stocks, land, and real estate. As the purchase price of these assets rises relative to their "intrinsic" value, future investment returns diminish and in the extreme case converge towards the central bank’s zero interest rate.1 At least, in theory, a central bank nailing down its key interest rate at zero would also drive investment returns of existing assets towards zero.
However, the division of labor would already start unraveling at a market interest rate of slightly higher than zero. The reason is that acting man — be it as a consumer or an entrepreneur — has a time preference that is always and everywhere positive, and so is its manifestation, the originary interest rate (or "natural interest rate"). The originary interest rate is always and everywhere positive, it cannot fall to zero, let alone become negative.A Helping Hand from Above?
Since central banks have established a rather firm grip on market interest rates, the chances are that the ongoing boom will continue — and it may well continue for much longer than most market observers expect at the current juncture. However, there should be little doubt that the longer the boom keeps going, the bigger the distortions in the economic and financial market system will become.
This, in turn, suggests that the severity of the crisis that must be expected to unfold at some point in the future — at the latest when all market interest rates have been pushed onto the zero line and investment returns have become negligible — is driven to ever-higher levels. This is something we do know from the Austrian Business Cycle Theory. But it is certainly not enough to come up with a reliable forecast.
It goes beyond the science of economics to come up with quantitative forecasts. What economics can do, however, is pointing out and making intelligible the conditions under which today’s economic and financial systems work; in particular that market interest rate manipulation through central banks causes damages on a grand scale and will end badly — something that may only be prevented by a helping hand from above.
- 1. Value is subjective, but by "intrinsic value," I mean value based on demand that would have existed in the absence of extreme interventions by central banks.
The Office for National Statistics has released the latest wealth figures for the UK. About which The Guardian says:
Britain’s total wealth grew by 13% in the two years to 2018 to reach a record £14.6tn, with wealth among the richest 10% of households increasing almost four times faster than those of the poorest 10%.
A study by the Office for National Statistics (ONS) also found that the poorest 10% of households had debts three times greater than their assets compared with the richest 10% who amassed a wealth pile 35 times larger than their total debts.
The figures highlight the growing divide between those at the top of the wealth ladder, many of whom have retained their pension rights, property values and invested their savings since the 2008 financial crash, while those on low incomes live in rented accommodation with meagre pension entitlements and rising debts
This is not quite so. The ONS is producing figures which show the market wealth figures. Which isn’t the thing we’re interested in even if we are one of those who worry about inequality. What we actually want to know is what is the wealth distribution after all the things we do to change it?
When we measure income inequality we study the numbers after the impact of taxes and benefits - what inequality is there left after the welfare state that is. If we were to run around shouting about the pure market distribution of incomes we’d be looked at as the idiot ginger stepchild of the conversation.
With the wealth distribution though we don’t measure the effects of what we do to change it. For example, only fully funded pensions count - the fact that everyone gets either a state pension of the pension guarantee is not included. With housing, it is only equity in private sector housing which counts - the capital value of a below market rent tenancy is ignored. Private wealth which might be used to pay school fees is measured - that any and every child gains some £5,000 a year’s worth of state education is ignored. Private money to pay for health care is counted, the capital value to the citizen of free health care through the NHS is ignored.
Wealth inequality is wrongly measured for we don’t include the effects of all that is currently done to reduce it. Therefore we’re never going to gain any useful guidance about what should be done next by perusing these figures. After all, the thing we’re trying to work out is, well, what should we be doing next? Something that does require looking at the effects of what we’ve already done.
At a meeting of the Council of St John’s Nottingham on 11 November 2019, future options were prayerfully considered and it was agreed that the operation of the current configuration of St John’s is no longer financially viable in the long term. St John’s will therefore begin the process of closure now. However, several significant aspects of St John’s ministry will continue through partner institutions.
The Midlands Institute for Children Youth and Mission announced recently that it will move to Leicester and merge with iCYM that its vital work will continue in this new location and serve the national church. The specialist Library resources (around 10,000 books) will also be gifted to iCYM in Leicester. Plans are well advanced – look out for further news and come along to one of the open days in Leicester .
St John’s is now able to announce that it is in negotiation with The Queen’s Foundation, Birmingham to take over its Extension Studies department which offers Distance Learning courses and Degrees validated by the University of Durham. Discussions are well advanced and final arrangements will be announced when they have all been completed and agreed with the University and Queen’s. St John’s Council has every confidence that Queen’s will support and develop the current provision professionally. All other key partners are fully informed of this development and work is in hand to ensure that the transition progresses smoothly. St John’s is impressed at the warmth and care with which negotiations with Queen’s have progressed. Current students and staff have been informed of this, and are assured that their courses will continue until they have completed them. It is hoped that the Timeline on-line learning materials will continue to be developed from this new home.
Discussions with the Diocese of Southwell and Nottingham and with St Mellitus College, East Midlands are well advanced to ensure that the St John’s Library has a new home in Nottingham and the hope is that it remains a regional resource. A further announcement will be made in due course.
St John’s will hold a closing service in Bramcote to which former students, friends and supporters of the college, will be invited during the summer of 2020 to mark the end of 150 years of commitment to training and preparation for Christian Ministry, and to pray for the ongoing work in these new locations. Further details will be announced in due course.
Commenting on the announcement, Chair of St John’s College Council Chris Smith said: “Generosity has always been a core value of St John’s College and in this spirit we are pleased to share the wealth of knowledge and resources we have created for the benefit of the Christian community, and honour the work of our past students and staff who have worked hard to deliver on our mission.”
St John’s Nottingham is thankful to have pioneered the delivery of distance learning training and we believe this next chapter will continue the pioneering spirit ensuring continued delivery of Christian training and learning which responds to the economic and social climate we now operate within. We are pleased to have found new homes for St John’s ministries, with Christian partners who share our passion for accessible and applied learning for the whole people of God.
David Hewlett, Principal of the Queen’s Foundation, said: “we are glad to be able to continue the vital work of making theological education as widely accessible as possible through distance and online learning. We share St John’s pioneering spirit and are grateful that the St John’s Trustees have seen fit to find a new home for this work in Queen’s.”
Implementation of our transition plan will now begin as we prepare for the closure of our Bramcote site in Summer 2020, but it is our intention to pass on St John’s mission to our new host partners in a strong position in order to ensure continued delivery of Christian educational training. Therefore, we are keen to engage with the Christian community to ensure that our student, staff, Association, alumni and host partners have continued confidence in the work which will be continued in their new homes in 2020.
Chris Smith, Chair
on behalf of St John’s Council
2 December 2019
Thirtyone:eight has been commissioned by Emmanuel Church, Wimbledon to undertake an independent lessons learnt review concerning Jonathan Fletcher and Emmanuel Church to start immediately. The review will take place over the next six months, with a report of the findings to be published by May 2020.
Focusing on the activities of Jonathan Fletcher while he was minister of Emmanuel, we have been commissioned to undertake a robust and comprehensive exploration of both good practice and failings in culture and safeguarding practice at Emmanuel Church Wimbledon from 1982 to the present. The review will enable the voices of those impacted by the behaviour of Jonathan Fletcher to be expressed, heard and considered alongside other contextual information and concerns from other relevant sources. The draft scope for the review can be viewed here.
The review process will be entirely independent, and measures are being put in place to achieve this, including the establishment of an Independent Advisory Group. The group will consist of up to six individuals, with a representation of victims/survivors. Thirtyone:eight invite any individuals interested in participating in the Independent Advisory Group to express their interest by 20th December. Further details are available here.
The names of Independent Advisory Group participants will be kept confidential and will not be known by Emmanuel Church Wimbledon until the publication of the report. The group will oversee the work of the review and will be chaired by Justin Humphreys (Chief Executive (Safeguarding) at thirtyone:eight). The review itself will be led by Dr Lisa Oakley. Once the Independent Advisory Group is formed, it’s first task will be to review, shape and finalise the detailed scope with the review team, ensuring that all legitimate perspectives and appropriate lines of enquiry have been considered. The Independent Advisory Group will then meet at agreed intervals throughout the process of the review, with the overall purpose of guiding its work, acting as a point of reference and scrutiny, and ensuring complete independence.
Once the scope has been finalised, the fieldwork for the review will commence. A proposed timeframe for the different stages of the review can be found here.
In the meantime anyone, including victims/survivors, who wishes to participate in the review or who wishes to pass on information to thirtyone:eight can do so confidentially by using the contact us link which can be found here or by emailing JFsafeguardingreview@thirtyoneeight.org. Thirtyone:eight and Emmanuel Church Wimbledon take data privacy and confidentiality very seriously. Identities of confirmed participants will be known only by the reviewers and the Independent Advisory Group. No victim/survivor identifiable details will be passed between Emmanuel Church and thirtyone:eight without prior consent from those individuals.
Thirtyone:eight continue to operate an independent helpline for victims/survivors of abuse. If you have been affected by matters related to Jonathan Fletcher and you would like to speak to someone independent about this you can contact the thirtyone:eight helpline on 0303 003 1111. Please quote ‘2019’ to identify that your call relates to Jonathan Fletcher. Information you share with the helpline will not be shared with others, including the independent review team, unless you consent to that or action needs to be taken to protect you or others (in adherence to standard safeguarding practice and protocol).
The post Lessons learnt review concerning Jonathan Fletcher and Emmanuel Church Wimbledon underway appeared first on Anglican Ink © 2019.
6 December 2019
Dear Truro Family & Friends,
Following on from last week’s announcement of Tory’s departure we have further information to share with you.
Tory Baucum has submitted his resignation as Rector of Truro Anglican Church and has also renounced (resigned) his ordained ministry in the ACNA (Anglican Church of North America). Tory and Elizabeth intend to be received into the Roman Catholic Church sometime next year.
Concurrently, members of Truro’s staff have alleged grievances against Tory, the seriousness of which is such that (1) the vestry is conducting a formal investigation by an independent party to determine what occurred, and (2) the inquiry will take some time to complete. Tory has agreed to participate.
The parish meeting previously announced has been postponed.
The Wardens and Vestry of Truro Anglican Church
The vestry welcomes your questions. Please send them to the registrar, Betsy Perryman, at Betsy@TruroAnglican.com.
We ask for your prayers for Tory and his family, our staff, the wardens and the vestry, and all our congregation at this time.The Wardens and Vestry of Truro Anglican Church
[This talk was delivered 23 November at the Palais Coburg in Vienna, Austria, at an event commemorating the 70th anniversary of the publication of Mises's Human Action.]
Nowadays, it’s not uncommon for people as young as 20 or 30 to feel they have to share their memories with the world. Even at an advanced age, I prefer not to talk publicly about personal things and experiences in my life, but to reserve this for private conversations.
But on the occasion of this event I would like to tell you something about my intellectual development: about my development from a child of his time, who through his encounter with Ludwig von Mises and the Austrian School of Economics became an intellectual exotic – some would say a dangerous madman – apparently from a different time. And to this end a little biographical background is appropriate.
I was born in 1949 in post-war Germany, the same year that Ludwig von Mises' magnum opus Human Action was published, which I was to discover almost 30 years later, and which had a decisive influence on my intellectual development, and which today, on this occasion, is to be presented for the first time translated into German.
My parents were both refugees from the area of the former GDR, who after the war had ended up in a small village in Lower Saxony, West Germany. My father was a self-employed master tailor – among many other things, a common feature I have with Roland Baader, whose father was also a master tailor – who after having been a prisoner of war did not return to his Soviet-occupied hometown. The family of my mother, who was later to become a primary school teacher, had been expropriated by the Soviets in 1946 as so-called east-Elbian Junkers and had been driven out of their homes and farms, carrying nothing more than their backpacks. Until our move to the nearby district town, seven years after my birth, we lived in great poverty, with an outhouse outside the tiny workshop apartment. But as a boy I didn't really notice that. On the contrary, I remember my first years as a little village boy as a very happy time. Since the early fifties my family, thanks to the enormous hard work of my parents and their life-long practiced resolute and disciplined thriftiness, experienced an economic upswing year after year.
The local edition of the Hannoversche Allgemeine was read regularly in my parents' house and every Monday Der Spiegel magazine fluttered into the house. There were also a number of books, classical literature like that of Lessing, Goethe, Schiller, Kleist and Fontane, and modern literature like that of Thomas and Heinrich Mann, Max Frisch, Böll and Grass. There were also a few works on German, European, and ancient history, as well as various reference works and atlases. My parents were eager readers themselves and always encouraged me to read, whereby history always fascinated me more than literature (and this has remained so to this day). We did not have a television until I was 16 or 17 years old. But my parents were not intellectuals who could have guided me in my reading, disciplined me or sharpened my judgment. And I would pass the same judgment on my grammar school teachers, almost all of whom came from the war and pre-war generation. The history lessons at school strengthened my interest in studying history, the biology lessons drew my attention to Konrad Lorenz and ethology, and the religious instruction given by a Protestant theologian awakened my interest in philosophy for the first time.
It was however not least this burgeoning interest in philosophical questions that also led to my increasing intellectual dissatisfaction and disorientation. Many of the answers and explanations I received for my questions seemed arbitrary, more opinion than knowledge, contradictory or inconsistent. Where did these contradictions and disputes come from, on the basis of which criteria could they possibly be resolved and decided, or was there perhaps no clear answer to certain questions? Above all, however, I missed something like an intellectual systematization, an overall view of all things and connections, and it was especially this need and the search for a solution that made me – initially and for some years – a typical child of my time: the time of student rebellion, which began in the late 1960s, during my final two school years, and reached its peak in 1968, the year in which I began my university studies, and whose spiritual products were later to be called the 68 generation.
Inspired by the leading figures of the student rebellion, I first began to study Marx and then the theorists of the new left, the so-called cultural Marxists of the Frankfurt School: Marcuse, Fromm, Horkheimer, Adorno, Habermas, etc., assuming I would find an answer to my questions from them. I became (temporarily) a socialist, albeit not a follower of the ‘real existing socialism’ as practiced in the former GDR, which I knew from my own experience from regular visits of relatives and whose miserable, pitiful economy of scarcity and its proletarian leaders disgusted me. Instead, I became a follower of, as it was called, "humane democratic socialism," led by a supposedly wise elite of philosophers. And so it came to pass that Jürgen Habermas, at that time the rising young star of the new left and today the high priest of social democratic statism and politically correct virtue-signalling, became my most important first philosophy teacher and dissertation supervisor. In 1974, the year of my PhD, my socialist phase was of course already over, and my dissertation on an epistemological topic – a critique of empiricism – had nothing to do with socialism or ‘the "left."
My short leftist phase was followed by an equally short ‘moderate’ phase. Instead of the Frankfurt School, my intellectual curiosity was now increasingly focused on the Viennese School. More specifically: to the so-called Viennese circle around Moritz Schlick, and even more specifically to Karl Popper's philosophy, which is located at the edge of this circle of logical positivists. The core of Popper's philosophy, which to this day is probably the most widespread and influential worldview, especially in the non-academic field, is the following double thesis: All statements about reality are of a hypothetical nature, i.e. they can be refuted or falsified by experience. Conversely, all non-hypothetical, a priori or apodictic statements, i.e. statements which in principle are not exposed to falsification, are statements without reference to reality.
I was by no means prepared to accept the universality of this thesis. (By the way: Is this a hypothetical or an apodictic statement?) Even while working on my doctoral dissertation, I came across Paul Lorenzen and the so-called Erlangen School, which made the validity of the Popper thesis appear highly doubtful, especially in the field of natural sciences. Isn't it necessary to first collect and measure data and carry out controlled experiments in order to test a hypothesis regarding causal connections? Doesn't the knowledge regarding the construction of measuring instruments and the performance of controlled experiments come methodically before the hypothesis test? And doesn't the falsifiability of hypotheses owe itself to the non-falsifiability of the construction of measuring instruments and the methodology of experimenting?
Today I consider the importance of these questions to be greater than I did then, but this is not the place or the opportunity to pursue this subject (or any higher philosophy at all). Then (as now), my main interest was in the social sciences, and as far as that is concerned, I was to a large extent initially willing to follow Popper. Like Popper, I thought that social science statements were generally hypothetical, in principle falsifiable ‘if then’ statements, and that practical social research must be, as Popper put it, “piecemeal social engineering.” One must always test one's hypotheses before either proving them for the time being (but never definitively) or falsifying and revising them. Non-falsifiable statements, on the other hand, especially those that relate to reality, i.e. about real objects, do not exist in the social sciences.
Today I consider this thesis of Popper’s, apparently so tolerant and open to experience, not only to be wrong, but I also consider it to be downright disastrous or even dangerous.
First, a small example from everyday experience to demonstrate their error. No one will want to expose the statement “a person cannot be in two different places at the same time” to falsification. Instead, we accept it as an "apodictic" or "a priori" true statement. And yet it undoubtedly has a reference to reality, as every fan of crime thrillers knows. For if Mr Meier was stabbed to death in Vienna on January 1, 2019 and Mr Müller was in New York at that time, then Mr Müller cannot be considered a murderer in this case: not only hypothetically not, but clearly and categorically not. This statement forms the basis of the so-called alibi principle, which repeatedly provides us with infallible help in everyday life.
My complete break with Popperism came about while working on my habilitation thesis on the foundations of sociology and economics. On the one hand, it became clear to me that when explaining human action one cannot in principle do without the categories of choice, purpose or goal, means, success or failure, whereas natural events and natural processes "are as they are" and must be explained causally, without any reference to choice, goal, means, success or failure. On the other hand, less obvious and of incomparably far greater significance, it became clear to me that the sciences of human action contain a segment: the economy (in contrast to history and sociology), in which one can very well make apodictic statements and judgments, in such a way that one does not have to test something in order to know how it ends, but where one knows the result from the outset, ‘a priori,’ and is able to predict it with certainty.
While studying economics I came across statements such as the quantity theory of money, according to which an increase in the money supply leads to a reduction in purchasing power per monetary unit. For me it was obvious that this statement is a logically true statement, which cannot be falsified by any ‘empirical data,’ and nevertheless a statement with a clear reference to reality, about real things. But wherever I looked in contemporary literature, whether on the left by Paul Samuelson or on the right by Milton Friedman, the entire guild of economists was, to put it bluntly, in love with the Viennese philosophy of logical positivism or Popperism, according to which such apodictically true real statements are impossible or scientifically inadmissible. For them, this statement was instead either a mere tautology, a definition of words made up of other words (without any reference to reality), or a hypothesis to be tested that could be empirically falsified.
However, the intellectual tension and irritation which initially arose from this apparent discrepancy quickly dissipated to my full satisfaction. On winding paths I had finally come across Mises's Human Action in my studies – in the library of the University of Michigan. Mises not only confirmed my judgment about the logical character of central economic statements, he also presented a whole system of apodictic or a priori statements (his so-called praxeology) and explained the errors and disastrous consequences of the positivist philosophy of Viennese provenance, the central protagonists of which he, as their contemporary, was intimately familiar with.
The discovery of Mises and, immediately afterwards, that of his American students, in particular of Murray Rothbard, brought me, on the one hand, a great intellectual relief – here was finally the long-awaited integrated, coherent overview of all things, an architectonic of human knowledge! – on the other hand, however, it also brought with it much anger and disappointment and led to an increasing alienation from the academic-university business and prevailing public opinion.
This ambivalent development – increasing intellectual certainty on the one hand coupled with increased social alienation on the other – can be illustrated and explained on the basis of a small list of examples of apodictic or quasi-apodictic statements, as brought to light by the Mises-Rothbard School – the so-called Austro-Libertarians. For each of the following examples, a more detailed explanation exists as to how far the statement in question is not a falsifiable statement in Popper's sense, but I simply trust here that this circumstance is always immediately, intuitively understandable, and that in any case the concentrated power of the various examples is sufficient to recognize that one by no means has to try and tolerate everything in order to know how it ends (and also how it definitely does not end).
Thus, for example, the previously mentioned quantity theory leads to the statement that it is impossible to increase social prosperity by increasing the money supply. How else should one explain that despite the existing possibility of any amount of increase in paper money, poverty continues to exist in some places, unchanged. An increase in the amount of money can only ever lead to a redistribution of a given stock of welfare goods. It favors the first and early recipients of the new, additional money at the expense of the last and late users.
Let me continue with a whole battery of statements of similar, i.e. apodictic or quasi-apodictic, quality.
Human action is the conscious pursuit with scarce resources of goals regarded as valuable.
No one can deliberately not act.
Every action strives to increase the subjective well-being of the actor.
A larger quantity of a good is always preferred to a smaller quantity of the same good.
The earlier attainment of a given goal by given means is preferred to its later attainment.
Production must always precede consumption.
Only those who save – spend less than they earn – can increase their prosperity permanently (unless they steal).
What is consumed today cannot be consumed again tomorrow.
Price fixings above the market price, such as minimum wages, lead to unsalable surpluses, i.e. to forced unemployment.
Price-fixing below the market price, such as rent ceilings, leads to shortages and a persistent shortage of rented housing.
Without private ownership of production factors – in classical socialism – there can be no factor prices and without factor prices an economic calculation is impossible.
Taxes – compulsory charges – are a burden on income producers and/or property owners and reduce production and capital formation.
No form of taxation is compatible with the principle of equality before the law, because any taxation involves the creation of two unequal classes of persons with conflicting interests: those of the (net) taxpayer on the one hand, for whom taxes are a burden one seeks to reduce, and on the other hand the class of recipients or rather consumers of (net) tax, for whom taxes qua source of income are a delight that one seeks instead to increase as much as possible.
Democracy – majority rule – is incompatible with private property – individual property and self-determination – and leads to creeping socialism, i.e. to ongoing redistribution and the progressive erosion of all private property rights.
Whatever is subsidized by taxes, such as lounging about or doing things for which there is no profitable customer demand, is further encouraged and strengthened by the subsidy.
Whoever is not personally liable for the repayment and redemption of so-called public debts incurred by him or with his participation, as is the case today with all politicians and parliamentarians, will frivolously and without hesitation take up debts for his own present advantage and to the detriment of an impersonal future public.
Whoever controls a territorial money printing monopoly enforced by state power, like all so-called central banks, will also make use of this privilege and, even if an increase in the amount of money can never increase social prosperity as a whole, but can only redistribute it, will still print more and more new money for his own benefit and that of his direct affiliates and closest business partners.
And finally, there’s this: Whoever or whichever institution has a territorial monopoly on the use of force and jurisdiction, as actually claimed by all states, will also make use of it. I.e. he will not only exert violence himself, but he will also declare his exertion of violence to be lawful by virtue of his ultimate legal representative. And in all conflicts and disputes of a private person with representatives of this institution (the state) no independent, neutral third party decides on good and evil, or about the guilt and innocence of the opponents, but always and invariably an employee, i.e. a dependent representative, one of the two conflict parties (the state) itself, with a corresponding, reliably predictable partisan, "state-supporting" result.
The list of such apodictic or quasi-apodictic statements could easily be continued, but it should be long enough to see what kind of consequences arise from this ensemble of elementary insights of social science.
Obviously, these insights are in blatant conflict with social reality. In this reality there are monopolies of violence, monopolies of money printing, taxes, taxpayers and tax consumers, tax-subsidized idleness and uselessness, majority rule (democracy), public debt, politicians and parliamentarians exempt from liability, capital consumption (consumption without saving), redistribution of property, minimum wages and maximum rents. And what's more, all these acts and institutions are not subject to constant criticism. On the contrary, they are, almost monotonously and from all quarters, presented and praised as self-evident, correct, good and wise.
The consequence of these insights and their comparison with social reality should be clear. To put it colloquially: one is – and I myself was – at first simply flabbergasted. It became increasingly clear to me what blatant madness prevails in the present world. And I was flabbergasted at the time and effort it had taken me to arrive at this in fact obvious insight.
And there were obviously two reasons for this insanity. One was simply human stupidity. Although the ends one supposedly pursued might have been well-meaning, one was mistaken in the choice of means. It was stupid, for example, to try to fight unemployment with minimum wages or housing shortages with rent caps. It was stupid to expect more general prosperity from an increase in the money supply or more economic growth from an expansion of credit (without increased savings). It was stupid to introduce democracy as a means to protect property. And it was also stupid to expect a reduction in violence or even justice, i.e. impartial conflict resolution, from the establishment of a monopolist on the use of force and the judiciary (i.e. a state); because taxes, i.e. the threat and use of force, and partisanship in conflict resolution are essential characteristics of any state.
But it was by no means (and unfortunately) only stupidity or ignorance that was responsible for the rule of madness. There was also deliberate deception, lies and fraud. There were also liars and deceivers who knew all this. They knew that the aforementioned measures and institutions could not, and could never, lead to the benevolent results hoped for by their simpler contemporaries, who nevertheless or precisely because of that propagated and supported them vigorously, because they themselves and their friends and followers could profit from them – even if only at the expense and to the chagrin of others. And, of course, it became immediately clear to me who the people and circles, who were these crooks and their minions, were.
And another thing I understood through my studies of Mises and his school of thought: the reason for the popularity and the affectionate promotion of Popperism especially in these circles. For it is not only this philosophy that allows any insane assertion to be considered hypothetically possible and any nonsense to be tried out. On the contrary, it also allows, quite contrary to its alleged receptivity and openness to experience, to protect any nonsense with cheap excuses against refutation. If minimum wages do not reduce unemployment or poverty, it is because they are not high enough. If money or credit expansion does not lead to increased prosperity, it is because it is too small. If socialism leads to impoverishment instead of prosperity, it is only because it was executed by the wrong people, or because climate change or some other ‘intervening variable’ has intervened, etc., etc.
However, as already indicated, all this knowledge and understanding and the inner peace, satisfaction and yes, joy, which one, which I, experienced through my encounter with Mises's work, also had its price. For once you have understood your Mises and learned to see the world with Austrian eyes, you will quickly notice, at least if you admit to it, that in many respects you are quite lonely and isolated.
Not only was one faced with the opposition of all (these) political crooks, but also of large sections of their various minions, especially the entire, almost exclusively tax-financed academic-university establishment, which I tried to find a way into. An academic career was difficult, if not impossible, and it took considerable courage, willingness to fight, and sacrifice not to resign or give up. In Germany – let alone Austria – I was at that time out on a limb. I therefore decided to move to America. And so Mises became not only an intellectual but also a personal role model for me.
Mises had been denied a regular academic career in Austria and, after the National Socialists seized power, was forced to emigrate to the US. Even there, in the heartland of capitalism, it was difficult for him to gain a foothold. But his courage and will to fight were unbroken and he managed to make his work increasingly heard and to raise a new generation of students, especially the brilliant Murray Rothbard. Rothbard, too, had been obstructed throughout his life, and his academic career had been rather bumpy. But it was Rothbard who now took me under his wing in the USA, helped me to obtain a professorship and in particular connected me with the Ludwig von Mises Institute, founded by Lew Rockwell in 1982 and inspired by him, Rothbard, as academic director.
It is, essentially, thanks to the work of the Mises Institute, with which I have remained closely connected from its humble beginnings to the present day, and which, under the direction of the incomparable Lew Rockwell, has grown into an institution with worldwide appeal and connections, that an event like this one can once again take place in Austria today. Thanks to his work, the names and works of Mises and Rothbard are much better known today than they were during their lifetimes. In fact, there is no country in the world where there are no Misesians or Rothbardians. My own writings are now also available in more than 30 languages. And it is certainly also an indicator of the progress that the Austrian school has since made, when an audience of 1,500 attended a lecture that I recently gave, in Moscow of all places, and a few hundred more even had to be turned away due to lack of space.
In spite of this undeniable progress, one cannot, of course, hide the fact that the Misesian Austrian School still represents an intellectual outsider-position. Indeed, especially as an "Austrian" one has every reason to be pessimistic about the further development of the Western world, at least in the short and medium term. For we are currently living through a period in which the normal madness, which I have already mentioned, is once more intensified by the crazy doctrine of political correctness and the pathological, quasi-religious climate mania of infantile so-called climate protectors, confronted with whom one often no longer knows whether to simply howl and cry, or instead crack up laughing.
However, today there is no more stopping the Mises School. And when the truth finally wins out, because only what is true can also work smoothly in the long run, then the hour of the Austrian School of Economics will have come.
(Translated from German by Robert Grözinger.)
An influential line of thought in contemporary political philosophy began well but quickly got off track. The line of thought began as a criticism of Isaiah Berlin. In his famous paper, “Two Concepts of Liberty,” Berlin set forward a notion of “negative freedom” that libertarians will find familiar: “I am normally said to be free to the degree to which no man or body of men interferes with my activity. Political liberty in this sense is simply the area within which a man can act unobstructed by others. If I am prevented by others from doing what I could otherwise do, I am to that degree unfree; and if this area is contracted by other men beyond a certain minimum, I can be described as being coerced, or, it may be, enslaved.”
Berlin’s “negative freedom” looks like the NAP, but as we’ll see below, it isn’t the same thing. Several writers, the so-called “civic republicans,” seized on a crucial flaw in Berlin’s concept. The best known of these writers are the historian of ideas Quentin Skinner, (whom Murray Rothbard greatly admired) and the philosopher Philip Pettit. The flaw that the civic republicans found in “negative freedom” is that you could be uncoerced but still dominated by someone who held power over you. Suppose, for example, that you were a slave, but your master did not interfere with your life. In Berlin’s sense you are “free”, but your master could at any time change his mind and render you unfree. Even if he never did change his mind, you would still be dependent on him in an unacceptable way.
Philip Pettit generalizes the civic republican’s key theme:
“Think of how you feel when your welfare depends on the decision of others and you have no come-back against that decision. You are in a position where you will sink or swim, depending on their say-so. And you have no physical or legal recourse, no recourse even in a network of mutual friends, against them. You are in their hands.
In any case of this kind you will be dominated by others, being in a position where those others have the power of interfering in your life in a certain way: and this, more or less arbitrarily; more or less at will and with impunity. If you do escape ill treatment, then, that will be by the grace or favour or the powerful, or by your own good fortune in being able to stay out of their way or keep them sweet. And even if you are lucky enough to escape such treatment, you will still live under the mastery of those others: they will occupy the position of a dominus — the Latin word for master — in your life … the central theme in republican concerns throughout the ages — the theme that explains all their other commitments — has been a desire to arrange things so that citizens are not exposed to domination of this kind. They do not live, as the Romans used to say, in potestate domini: in the power of a master.”
Pettit and his civic republican colleagues take their good point in the wrong direction. They emphasize that the power of the person who dominates you is “arbitrary.” By this term, they don’t mean that the master follows a policy that can’t be predicted. Even if a slave knew what his master was going to do, he would still be under the master’s domination. Rather, they mean that the person dominated is under the will (ad arbitrium) of the master.
Now for the wrong turn. They think that in a democracy, under certain conditions, people aren’t subject to the arbitrary will of others. If you participate in a deliberative democracy, then you are involved in choosing the rules by which you are governed. The rules, in this view, aren’t imposed on you arbitrarily, even if these rules aren’t the ones you most prefer. To qualify as non-arbitrary, a majority vote isn’t sufficient. Rather, the rules must be decided through deliberation, by the citizens or their representatives. You could be drafted into the army, or taxed at very high rates, without being dominated, in the civic republican sense.
Before we turn to showing what is wrong with the civic republican position, one misunderstanding needs to be averted. The civic republican doctrine is not the same as Rousseau’s “general will.” If you democratically deliberate and other policies than the ones you prefer are chosen, it isn’t the case that your “real” will now chooses the other policies. The civic republicans wisely avoid that bit of murky metaphysics. Rather, what they contend is no more, and no less, than that with democratic deliberation, you aren’t dominated.
What is wrong with their view? From a libertarian standpoint, the answer is obvious. Even if you aren’t “dominated,” you can still be coerced, if you are prevented from doing what you want to do. From the correct perception that Berlin’s “negative freedom” isn’t sufficient for genuine liberty, the civic republicans wrongly judge that negative freedom isn’t necessary for genuine liberty.
The NAP avoids the problem that the civic republicans found in Berlin’s concept. The NAP says that no one has the right to initiate aggression. In other words, you have a right to be free from coercion. If you have this right, then you are not subject to anyone’s domination. Democratic deliberation isn’t needed to avoid domination, and it can’t take away your rights.
Today being the Spanish Day of the Constitution, it is an apt time to reflect on said Constitution and its commitment to democracy. While it may have worked in 1978, Spain ought to amend its constitution to be truly democratic, especially with regards to the question of Catalan independence.
On 14th October, nine of Catalonia’s independence leaders were jailed for a total of over 100 years but what Madrid seemingly fails to realise time and time again is that imprisoning their leaders doesn’t address the complaints of angry Catalan nationalists— and may exacerbate the issue. Support for independence and anti-Spanish rhetoric is still prominent both within Catalonia and internationally.
Catalonia’s now infamous 2017 independence referendum was allowed under the Law on Referendum on Self-determination of Catalonia passed by the Parliament of Catalonia. It was not, however, permissible under the Spanish constitution. And so, Spain’s national government enacted Article 155 which allowed them to use ‘necessary measures’ to force Catalonia to comply with the idea of ‘the indissoluble unity of the Spanish nation’. Madrid’s idea of ‘necessary measures’ included dissolving parliament, and police brutality, actions that would ultimately add fuel to the (now literal) fire(s).
Whether or not the referendum should have gone ahead, Madrid’s response of clamping down on Catalonia so harshly is telling of how desperate they are. Prohibiting the referendum today seems just as anachronistic as Spain declaring war in Catalonia back, in 1934. It seems that the government strategy has changed little since. The ban on Spain’s autonomous regions gaining independence was written in the constitution after the Franco dictatorship in order to keep Spain unified while it regained its feet. Madrid shouldn’t cling to this outdated system. By amending the constitution, Spain may seem less fragile and tension will likely be eased. Indeed the reforms are a step in the right direction.
The neoliberal standpoint is that liberty is of utmost importance and as such, the legitimacy of state ought to depend on its people. If the majority of Catalans withhold their consent to being part of Spain, then the region should be able to leave Spain.
Allowing a real vote does not mean that Spain will automatically lose Catalonia. It is important to remember that the result of the 2017 referendum should not be viewed as gospel. The referendum was not verified and there are claims that some people voted twice. Furthermore, it is likely that those who would have voted against independence would have also wanted to obey central government and not legitimise referendum by voting in it. This suggests that were Spain to hold a legitimate referendum it is possible that the outcome would be less overwhelmingly pro independence. While 90% of votes being in favour of independence may seem pretty conclusive, it was 90% of 43% of the population. When discussing Catalonia, the debate shouldn’t simply be pro independence or anti independence, but rather pro choice or anti choice. Catalonia should only have independence if the majority of Catalans do genuinely support it.
Allowing a real vote would, however, allow Spain to gauge the Catalan people’s level of discontent with the rest of Spain. It allows discussions to go ahead to de-escalate the situation, knowing whether independence truly is the desired outcome from the majority of the Catalan people.
If Spain were to ever allow its autonomous regions independence, then a key detail that should be ironed out is whether or not any final negotiations must be voted on. As we have seen with Brexit, there are calls for a ‘people’s vote’ on any possible withdrawal agreement. This ambiguity can be avoided by making it clear whether it is the government or the citizens that have the final say in any agreements.
The issues arising in Catalonia could stem from the inflexibility of a written constitution. When discussing Catalonia, comparisons with Scotland seem natural, however, Spain and the United Kingdom are very different countries. First of all, it is not illegal in Britain for different regions to secede from the union. The question of a Scottish independence referendum was not as outlandish. Another key difference between the two countries, is that Spain, unlike the UK, has a written constitution. Having a written constitution makes Spain inflexible and forced into upholding principles that may now seem archaic. Spain has had its current constitution since 1978 which may not sound like a long time, but Spain has changed a lot since then. In 1978, Spain had transitioned from a dictatorship that spanned five decades to a fledgling democracy. Now, it is a democratic country (or at least it is well on its way to being one). Any efforts to update the constitution will undergo much scrutiny and debate, making Spain a cumbersome nation and making it harder to adapt and keep up with the modern world.
The question should not be whether or not you support an independent Catalonia but if you support democracy. For those who do support democracy, the way of achieving it is clear: in the spirit of liberty, reform the constitution and have a real vote.