Archive for the ‘Common Law’ Category


Tuesday, February 5th, 2013

By Mark Rogers

Developing economies. Less developed countries. Third world countries. And then of course, developed economies.

But is there not a question being begged by these terms?

Let us look again at what I characterised as Keynes’s self-indictment:

“We take as given the existing skill and quantity of available labour, the existing quality and quantity of available equipment, the existing technique, the degree of competition, the tastes and habits of the consumer, and disutility of different intensities of labour and of the activities of supervision and organization, as well as the social structure.”

I call this a self-indictment because it displays an extraordinary degree of complacency and ignorance about how economies work (see the previous article in which I examine Lord Bauer’s response to the Keynesian approach).

What is fundamentally wrong about the Keynesian starting point is that not only is it not a starting point, it isn’t even an endpoint: this paragraph posits a certain stasis as the foundation of an economy. It is true historically that economies can stagnate and thus civilizations disappear, but any functioning economy, such as those Lord Bauer discovered when he left the academy and looked at what was actually happening in West Africa and Malaya, is dynamic, in short developing.

Looked at from the other end, the idea of “development” as a comparative term also suggests that there is an end result, i.e. something called a “developed economy”. But as we have seen in The Knowledge Economy, the western economies are headed on a path to what we could call “de-development”. With heavy government regulation and intervention, with QE, with the loss of paper trails in, for example, the subprime mortgage crisis, the legal underpinning of a free economy seems to be in freefall. I suppose that is one form of dynamism, but it is not a desirable one.

Readers curious as to why articles of this nature should be appearing on a gold investment website should read: GOLDCOIN.ORG: MIXING POLITICS AND NUMISMATICS

And for background on the writer: CONFESSIONS OF A LAW AND ORDER ANARCHIST

And for a review of one of the most important books on the financial crisis published last year: THE MESS WE’RE IN: WHY POLITICIANS CAN’T FIX FINANCIAL CRISES


Tuesday, January 29th, 2013

By Mark Rogers

 Banks are businesses like any other (in principle) but the regulatory frameworks constructed to “oversee” them in fact legislated banks out the consequences of operating in the private sector. The question inevitably arises therefore: what were the kickbacks?

They were obviously not such as obtained in the media, where for decades newspapers have espoused political causes and backed parties and politicians. Yes there were some ultimately certain relations that proved fairly poisonous for democracy – one thinks of Murdoch and Blair for example. The Browne/Balls-Banker axis was more fundamental, more insidious and more toxic than the media-politician axis, if only because the latter was transparent, in the sense that we could see some at least of what was going on and newspapers made no bones about their political stance.

Banks had traditionally been independent of the state (remember: the Bank of England was only nationalized in the late 1940s). The media-state “interface” had always been the more obvious and troublesome one: censorship versus boosterism – no surprise there. Journalists and politicians after all have a lot in common.

In other words, what the LIBOR arrangements, if guessed correctly by The Spectator, amounted to were not merely a conscription of the banks by the state, but the willingness of the former to be so co-opted. So where does that leave Barclay’s decision not the take the Queen’s shilling? And the subsequent vilification of Bob Diamond?

Are bankers inherently dishonest or do politicians persuade, even force, the at least more craven of the bankers to become so?

After all you don’t have much choice after you’ve been nationalized – and the legislation that exempted bankers from the commercial consequences of failure was effectively a form of nationalization.

Nazi-style socialism

It needs to be strongly emphasised that when Mr Anthony Blair persuaded the Labour Party to abandon Clause Four, the nationalization of the means of production, in favour of “market forces”, he actually was trading in the Communist version of Socialism for the Nazi version of Socialism which was to leave industrial and commercial productive forces in private hands but surround them with state interference and legislation. This is not market forces.

For a brilliant analysis of the banking problem as caused by the regulatory framework – not, it must be insisted upon, bad or lax regulation but the fact of the regulatory regime existing at all – please read the last of the three links below, and then go out and buy the book!

Readers curious as to why articles of this nature should be appearing on a gold investment website should read: GOLDCOIN.ORG: MIXING POLITICS AND NUMISMATICS

And for background on the writer: CONFESSIONS OF A LAW AND ORDER ANARCHIST

And for a review of one of the most important books on the financial crisis published last year: THE MESS WE’RE IN: WHY POLITICIANS CAN’T FIX FINANCIAL CRISES


Sunday, January 27th, 2013

By Mark Rogers

A recent story in the London Evening Standard announced that first time buyers are expected to stump up a £100,000 deposit. Thus, evermore young, first time buyers are being denied their place on the bottom rung of the housing ladder – or that is what at least it is usually called: edge of a bottomless abyss might be more accurate, and something from which they should be glad they have been saved!

A question that might at first blush seem curious: if there is a housing shortage, why are there so many estate agents? There are parts of London where they even cluster together. However, this is easily explained. Many of the properties on offer will not be unlived in – they will be the homes of people wanting to move for the sake of employment or retirement, and perhaps many more will have been put up for sale to realize their value, given that they were bought not merely to be lived in but primarily as an asset. The real explanation of the number of estate agents is that there are few buyers because most people, especially that class of “first time buyers” or rather would-be first time buyers, cannot afford the prices.

Estate agents earn their bread and butter from management fees for lettings: the houses for sale are the window dressing. Which is one among several factors that explain the high cost of housing: fees on sales are adjusted to take account of the length of time the house is on the estate agents’ books.

Another thing that the number of estate agents indicates in economic terms is the relative lack of information in the market: houses are expensive partly because there is no proper market in them, and therefore the information about what houses are worth – their prices – is limited. (See here, here and here for further discussion of the problem of the modern mortgage.)

Nevertheless, the modern fashion is to own – or at least to aspire to own. This is historically unprecedented. Most of the time, most people rented. Families who acquired houses, or who bought plots of land to build their own, usually did so towards the end of the pater familias’s career in upper middle class families who had acquired serious money. The house was then left to the children, so over time the number of people who owned their own homes increased, but slowly.

Why Rent?

Many families rented for their entire lives. And this in turn meant that there was a real market in housing, because renting meant that the market was flexible, price-sensitive and therefore price informative, and, crucially, not sodden with debt, i.e. a mortgage on your future which your income may never catch up with because of inflation.

Properties rented were owned in terms of the Common Law: what you were buying with your weekly or monthly rent was a lease with an almost full entitlement to property rights in respect of the inviolability of your privacy and the contents of the property that you brought into the house: landlords could not, for example, demand unilateral access while the current rent was paid in full, or demand that certain objects not to their taste were excluded. Landlords of course owned the property in the fullest sense of the term given that they had the right to sell it – but even this ultimate test of ownership was circumscribed by the rights of the resident tenants. So for the ultimate owner, the property represented two things: a current income, and a future saving.

The great advantage of renting was that the tenant’s obligations were contracted serially under the terms of the lease, which meant that, provided proper notice was given and dilapidations were duly paid for, the owner of the lease, i.e. the tenant, could leave the property at whim or out of the necessity of looking for work.

Leases were therefore one of the engines of a free and flexible economy. And they also have the advantage that they are a regular provider of price information.

One must wonder then if one of the reasons politicians are keen on promoting home ownership is that the modern mortgage is in fact a means of control over the home-owning population without the state actually having to nationalize their property…

In this context it should also be remembered that Victorian prosperity did, as mentioned above, mean a gradual increase in home ownership and homes therefore being left to descendants. However, the invention of inheritance tax in the late nineteenth century combined with modern inflation – which brackets houses into inheritance tax even though the residents’ incomes do not reflect that nominal, inflated value – have, all the while the politicians sing the virtues of home ownership, denied homes to an increasing number of inheritors.

And another problem arises with the so-called “homeless”. There are a lot of vendors of the Big Issue but they are not homeless: their hostel rooms or their flats are provided by the local authority and their rents are paid out as benefits by (and of course to) that same authority. The real homeless, the people who sleep on the streets, are either mentally disabled or young people who have fled home, in many cases state institutions. So once again in an economy dominated by the welfare state, it is all a matter of juggling with words, rather than material fact.

These considerations once again prompt reflections on what it is we really value and how that value is measured: as pointed out here, our money is not really money, and our mortgages are not real mortgages.

And once again, the question arises: when will this house of cards collapse? The eurocrisis is allowed to drift, quantitative easing underpins access to cash while piling up crisis for the next generation, politicians urge the banks to lend, and banks remain free of the consequences of moral hazard…

Readers curious as to why articles of this nature should be appearing on a gold investment website should read: GOLDCOIN.ORG: MIXING POLITICS AND NUMISMATICS

And for background on the writer: CONFESSIONS OF A LAW AND ORDER ANARCHIST

And for a review of one of the most important books on the financial crisis published last year: THE MESS WE’RE IN: WHY POLITICIANS CAN’T FIX FINANCIAL CRISES


Friday, January 11th, 2013

By Mark Rogers

Keynes was notorious for believing that savings, especially in a welfare state, were a form of selfishness. Alan Greenspan, quoted in the previous post, pointed out that: “The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.”

The implications of that last remark are that everyone is depersonalised, for it surely applies to those who wish to be wealthy, to those who wish to fend for themselves whether they are particularly rich or not. People are no longer regarded as autonomous individuals, capable of taking responsibility for themselves and their families and friends. So Greenspan’s insight needs modification: that there be no way for anyone to protect themselves: the wealthy are assaulted in their wallets to subsidise the rest and the rest are subsidised to keep them docile: everyone loses out.

The slogan “the personal is political” is, like so many slogans, not merely obfuscatory – what does it really mean, or rather what purpose does it serve? – but, taken at its ostensible face value, is the opposite of the truth: politics is the impersonal, and the greater the state intrusion into ordinary life, the more impersonal it becomes. Government departments deal with aggregates, and in doing so must strip people of their individuality; the more a person or family relies upon the state, the less they are dealt with individually. It is statistics that are housed not humans, or as Jane Jacobs put it housing is thought of “as a collection of separate file drawers”.

The idea that owners of wealth should have no way of protecting themselves is overtly clear in the attacks upon individuals who have allegedly avoided paying taxes. Indeed, the entire taxation machinery of the modern Western welfare state is designed to reverse the traditional notion of accountability: it is we the citizens who must be called to account for ourselves, rather than that the state is held accountable to us. One result is the eurocrisis.

At the heart of this enormous problem lies a fallacy that Ronald Reagan drew attention to, and it goes a long way to explaining why crises such as those engulfing Europe are proving so hard to deal with: “If no one among us is capable of governing himself, then who among us has the capacity to govern someone else?”

Readers curious as to why articles of this nature should be appearing on a gold investment website should read: GOLDCOIN.ORG: MIXING POLITICS AND NUMISMATICS

And for background on the writer: CONFESSIONS OF A LAW AND ORDER ANARCHIST

And for a review of one of the most important books on the financial crisis published last year: THE MESS WE’RE IN: WHY POLITICIANS CAN’T FIX FINANCIAL CRISES


Friday, December 28th, 2012

By Mark Rogers

Globalization: what is it but an activity that is as old as civilization – simply a modern name for trade? Joseph Addison’s paean to its virtues stresses the civilizing effect it has, bringing together merchants from every clime and culture, who, in furthering their own mutual interests, enhance everything from landscape to palates to manners and morals.

So why is it scorned and despised by so many, especially in the rich west?

Martin Wolf in “Why Globalization Works” (first referenced here) provides a useful list summarising the attitudes of the anti-globalizers, the first three of which I will deal with in this article. His summary is an accurate one of these views, so equally accurately does he indicate their incoherence.

“The critics make the following more or less specific charges against market-driven globalization.

“It destroys the ability of states to regulate their national economies, raise taxes and spend money on public goods and social welfare.

“In the process, it undermines democracy, imposing in its place the rule of unaccountable bureaucrats, corporations and markets.

“It amounts to an abdication of power by benevolent democratic governments in favour of predatory private corporations.”

Underlying assumptions

The first thing to notice about these attitudes is the underlying assumption that the modern democratic state is benevolent and rational and that its primary function is the regulation of the economy in order to tax the productive and furnish what are laughably known as “public goods and social welfare”.

The second underlying assumption is that modern democracies are accountable, and that it is corporations and markets that somehow are not. On the contrary, the collapse of accountability is manifestly evident in the euro crisis and the concomitant collapse of the European project, yet far from behaving in a responsible, accountable manner, the politicians are desperately trying to cling onto their power and privileges.

In the U.K. we have seen how politicians brazenly justified their expenses, in the process demonstrating their ignorance of the legal system. In one of the more scandalous moments of that preposterous saga, when one of the overtly criminal M.P.s was on trial and facing the prospect of jail if convicted (which he duly was), more than one hundred M.P.s wrote the judge a letter to try and influence the outcome of that trial, pleading with the judge not to sentence him to prison. One simply does not do this to an English common law judge: he duly ignored them, but that it was possible for so large a number of M.P.s to bring themselves to behave in this way shows a sorry disregard for our constitution – but then, at least since the Second World War, that disregard has become increasingly the parliamentarians’ mode of proceeding.

Markets, on the other hand, are engines of accountability, through bankruptcies and competition. That we may not see those who run companies, and anonymity is largely how free societies function, they are nevertheless under the remorseless pressure of their customers and competitors to provide the goods and services desired.

State Worship

The most important thing about these assumptions is that they amount to an unquestioning assumption that the state is the proper director of human affairs, and that ordinary humans are not – the ordinary person is not trusted, and the greater his wealth, the less trustworthy he is deemed. This is a preposterous view, and a dangerous one. I have quoted before Paul Johnson’s dictum that the ability of the state to wreak great evil has been amply proved; whether it is capable of good is open to considerable doubt.

Take two recent stories in the press. I have dealt with the first already in several articles about tax avoidance, the latest twist to which is the transformation of a parliamentary committee, the Public Accounts Committee, which is meant to hold the government to account, the proper function of M.P.s, instead turning on taxpayers and in accusatory mode devising ways to hold the public to account. We had also earlier seen how H.M.R.C. was devising means to use schools to snoop on tax avoiders.

A yet more recent story of the government turning on the people is the revelation this week of a costly scheme to monitor every child taken to an A. & E. Department for signs that its parents are trying to hide evidence that it is being abused. The National Health Service, that is, is being turned into a Stasi-like instrument to intrude into family life. This gross violation of privacy is based on an illusion. After the prominent publicity given to the deaths of battered children such as Jasmine Beckford, Victoria Climbié and Baby P, public inquiries were held. In spite of the detailed evidence in the findings of specific neglect at best, malign acquiescence at worst, combined with ignorance and lack of care, on the part of the social workers, each inquiry came to the same conclusion: that there had not been sufficient sharing of information between the relevant branches of the state.

So now in the fullness of time, some bright spark in the government has seen how the NHS can be turned into an information gathering and disbursing scheme – entirely neglecting two essential facts: the male abusers of infants are not the children’s natural fathers (mothers may hide the evidence of abuse, but this is because they are either mentally deficient, as Baby P’s showed every sign of being, or simply scared) – this is common knowledge, but is routinely overlooked. The second is that a highly abused child is more likely to be imprisoned at home than be taken to hospital. When a social worker did manage to get Jasmine Beckford and her sister into hospital, the police were adamant that they should not be returned. The social worker over-ruled them, and the police acquiesced (why they didn’t take advantage of that hospitalization to arrest the step-father I have never understood).

There is ample evidence that when the state reaches a certain size, and has acquired powers of intrusion into daily life by nationalizing health and education, its functionaries become a coterie, acting in their own interests at the expense literal and figurative of the general public. That the state in this form should be trusted with our welfare is belied by history, the same history that shows the most dangerous religion ever invented is the cult of the state.

Re-inventing the wheel

The present writer indeed agrees with those who object that globalization “destroys the ability of states to regulate their national economies, raise taxes and spend money on public goods and social welfare” and hopes that destruction proceeds apace. To quote the American commentator Michael Ledeen: “Faster please!”

Joseph Addison was right to see in the mercantile classes of his day the great benefactors of mankind: we in our day have seen the “benevolence” of the state in action, not least in those developing countries the anti-globalizers weep for where state aid has created destitution, and where restoring trade and expanding markets have repaired the ravages of that aid.

Not for the first time in the late twentieth and early twenty first centuries have we been required to re-invent the wheel – under the baleful glare of those who think it shouldn’t have been invented in the first place.

Readers curious as to why articles of this nature should be appearing on a gold investment website should read: GOLDCOIN.ORG: MIXING POLITICS AND NUMISMATICS

And for background on the writer: CONFESSIONS OF A LAW AND ORDER ANARCHIST

And for a review of one of the most important books on the financial crisis published last year: THE MESS WE’RE IN: WHY POLITICIANS CAN’T FIX FINANCIAL CRISES


Monday, December 17th, 2012

By Mark Rogers

In one of my earliest articles for this website, I broadly condemned the corruption of the British political elite and centred that attack on the professionalization of Members of Parliament and delegated legislation. The irony of these two assaults on our constitutional liberties is that at the same time as recognizing membership of the House of Commons as a paid profession, Parliamentarians ceased to be Parliamentarians and instead delegated their responsibilities to the government. The latter sits in Parliament as of right as being composed of elected MPs, and the upshot of this is that the ancient privileges of the House, which one protected it from the executive, are now used to protect the executive from the House!

Geoffrey Wheatcroft, in his book The Strange Death of Tory England (first referred to here), puts some numbers of these derelictions.

He quotes the Tory grandee Julian Amery: “When I was young, a man would go into parliament because he was somebody. Now a man goes into parliament to become somebody.” That this is not a nostalgic grouse is borne out by some significant points. There are fewer by-elections, which means that MPs hang on to their seats. “During the parliament of 1918-22 there were108 by-elections, in 1931-5 there were sixty-two, in 1992-7 there were seventeen and in 2001-5 there have been six, which is to say the number has plummeted from a yearly average on twenty-seven to fifteen to three to one and a half.”

There is the failure to use Commons procedure to bring down governments or throw out Prime Ministers. Wheatcroft comments: “Every British government between 1837 and 1874 fell following a vote in the House of Commons, a golden age when parliament really was master of the executive. During the twentieth century that happened just twice. … By the late twentieth century, politics had become a trade, and a well-rewarded one; being an MP was a nice little earner.”

The salary of an MP, as I argued in the article linked to above, is the original source of the corruption. At one time parliament was full of people who had outside interests in many fields, and therefore the House of Commons was truly representative of the electorate. While a Register of Members’ Interests exists, that register is a farcical indication of where we stand now: members should have outside interests, in the real economy, deriving their income from those interests and not in an underhand way (which the register is designed to forestall). They would then have a better grasp of the likely impact of the legislation they so sloppily pass on the wider economy. With universal franchise, the House ought to be full of plumbers and electricians, booksellers and oilmen, housewives and chocolate factory owners et al… Instead we have, by and large, a dreary litany of lawyers and trade unionists.

The other source of the “nice little earner” are the expenses MPs may claim, both legitimately and as well as illegally, even criminally as the expenses scandal revealed. These are accompanied, in Wheatcroft’s words, by “perks, handshakes or severance pay [severance pay!] for MPs who lost their seats, and pensions, which would once have been considered a grotesque idea but which were now an accepted mark of that professionalization. If MPs acted as they had so often in the past, and voted openly to bring down a government, it would be likely to precipitate a general election, when many of them might lose their seats and no longer be able to pocket those expenses.”

An interesting gloss on this problem is Wheatcroft’s comment on a puzzlement that Roy Jenkins voiced in his biography of Gladstone. In the nineteenth century prime ministers found it difficult to keep their Cabinet ministers who kept resigning for apparently trivial reasons, but in the twentieth century, when a minister should clearly go, it is hard to persuade him to. This, says Wheatcroft, is simply another manifestation of the professionalization of political life. Cabinet ministers in the nineteenth century had lives beyond politics with other sources of income (even though MPs were not paid, ministers were handsomely emolumated).

With nothing else to do, the modern MP sits in Parliament, incompetently overseeing the drafting of legislation that is incoherent and unnecessary, unaware of the impact of such legislation because only tangentially connected to the world outside politics, and unwilling to hold the executive to account for fear of losing pay and perks. A sorry but true description of the Mother of Parliaments in her descent to being the whore of a venal democracy.

Readers curious as to why articles of this nature should be appearing on a gold investment website should read: GOLDCOIN.ORG: MIXING POLITICS AND NUMISMATICS

And for background on the writer: CONFESSIONS OF A LAW AND ORDER ANARCHIST


Monday, December 3rd, 2012

By Mark Rogers

[As I shall be referring to past articles on taxes, here is the link to a short summary of their argument with an index of all those other articles: The Moral Dilemma at the Heart of Taxation.]

Before examining the latest round of political opportunism and hypocrisy on the subject of taxation, as well as the moral earnestness of a certain newspaper, I propose two new words: should what companies such as Starbucks, Google and Amazon and individuals who engage in protecting their wealth from the ravages of the state be accused of tax evadance or avoision? It used to be the case that “evasion” was illegal while “avoidance” was legal. While this was a definition that depended mostly on bad legislation and even worse Bill drafting, even these distinctions are now lost. Politicians and journalists alike will use both words to describe the perfectly legal activity of avoiding taxes [see above mentioned articles].

The Public Accounts Committee has just published a “damning” report on its interrogations of representatives of Starbucks, Google and Amazon. The Chairman of this committee is Mrs Margaret Hodge. More on her later.

Both the Committee’s report and today’s Times of London lead editorial make much of the morality or otherwise of the companies’ behaviour. We shall address that later too, but first must note that The Times makes a very peculiar distinction:

“When a corporation seeks to reduce its tax bill, it does so with a veneer of self-justification. … An individual, meanwhile, may legitimately seek to manage his or her own taxes out of sheer prudence.”

First, in common law, a corporation is a legal person. Second, is The Times saying that corporations do not act out of “sheer prudence”? Third, the Chancellor, George Osborne, was recently reported as making much the same points, when, in a preliminary outline of his Autumn Statement to be delivered on December 5th, having once more [see above articles] denounced “aggressive” avoidance, as an afterthought he hoped that the Starbucks review of its U.K. tax position would not lead it to conclude it should shut up shop and retire from these shores. Exactly!

Government sneaks

The government is pursuing tax avoidance schemes and threatening legislation that will compel providers of such schemes to expose their clients, even though none of these people, providers and clients alike, are criminals or engaging in practices that are illegal – unlike the MPs who are condemning them, those MPs who thought nothing of hoodwinking the public with their illegal manipulation of their expenses schemes, with all the lying and dishonesty that involved. The providers and clients of avoidance schemes are not even being dishonest. And the government that is threatening them is the same government that taxes the poorly paid, even those on the minimum wage, squanders vast sums on benefits, squalid hospitals and lousy schools, etc… a very long et cetera, as the singer Adele noted [see Jimmy Carr and His Terrible Error in the index of tax articles].

And it gets worse: “Up to two million people are to have their credit files secretly checked under a crackdown on tax evasion to be unveiled by George Osborne to help raise another £10 billion.” This is from a report in today’s Telegraph. It goes on: “Credit reference agencies will cross-check details of the income people declare on their tax returns against their spending patterns to identify ‘high’ and ‘medium’ risks of both illegal and legal tax avoidance.” This is shocking, but doubtless HMRC will reward the credit ratings agencies handsomely having co-opted them into its Stasi-like operation. This is a very serious corruption of the body politic. And I wonder what exactly is implied by “risks”?


Kelvin MacKenzie, also writing in the Telegraph, makes this point: “Sick and tired of subsidising folk from the rest of the country? You belong to a select club – the club of the hard-working, clever and creative people living in London and the South East who single-handedly are giving the rest of the nation a standard of living they can’t, or won’t, create for themselves.”

That seems a good enough place to start examining why this issue has suddenly been turned into a moral one.

The Times leader quoted above goes on: “Lower tax bills, [the corporation’s] officers may argue, mean lower bills for its customers and higher returns for its shareholders – who in turn ought to be paying tax. The reasoning, invariably, is false, for even corporations have moral duties.”

This is sheer intellectual, and moral, incoherence: first, the leader does not even mention the huge swathes of job creation, both directly in the form of, say, Starbucks’ own employees and indirectly through the supply chain – which explains Osborne’s concern that paying more tax may shut a multinational company down. And of course it should be noted that throughout that chain of employment, taxes will be being collected.

The most incoherent aspect of that statement, though, is that a true reasoning along economic lines of the effect on jobs and prosperity is viewed by The Times as immoral, as “a veneer of self-justification”. But that is just how companies, big and small, operate. And why shareholders should be pilloried in this way reveals further moral and economic confusion; they are after all the people who invest their money and, quite rightly, expect a return – or why invest? And amongst those profit-seeking shareholders in major corporations are many of the big pension funds – those same pension funds which have been despoliated by the state: first by Gordon Brown’s so-called windfall taxes, and more recently by the millions wiped off their funds by QE.

But let us consider morality and taxes in one of the most shocking exposures of state corruption, the grooming for sex by Asian gangs in the north of England of underage girls. This was going on in the full knowledge of the agents of the state, the social workers who had responsibility for these girls, many of whom were in care, and the police, and all this while these agents of the state were, and still are (heads have not rolled), drawing their pay – from the public purse funded by the taxpayer. Morality anyone?

And what about that Chair of the Public Accounts Committee, Margaret Hodge? While we’re on the subject, this is that same Margaret Hodge who, as Leader of Islington Council, covered up homosexual grooming by some of her own social worker employees of boys in Islington care homes (and who, in the full knowledge of this failure to protect the vulnerable on her watch, Tony Blair, sickeningly, appointed Minister for Children).

Margaret Hodge was also one of the more exploitative manipulators of her expenses as revealed in the MPs expenses scandal. Morality, forsooth! Why should Starbucks subsidise her with its taxes??

“The Barking and Dagenham Sentinel - being delivered free to all homes in Barking – has dealt a crushing blow to the hopes for re-election of Margaret Hodge. Hodge stands revealed for her record on the Iraq war, her expenses claims and her failure to deal with serious child abuse when she was Head of Islington Council. The paper suggests that the ‘hold your nose and vote Labour’ approach would be immoral and inappropriate  in this instance. Many principled anti-racists are rejecting Hodge and instead intend to vote for the Green Party. Other committed Labour supporters are deciding to stay at home as no  genuine, principled Labour candidate is standing in the Constituency.” This is part of a report on Chairman Hodge, which can be found here; other reports here and here.

So morality is a mug’s game in politics; as Harold Macmillan once said, if the public wanted morality it should get it from it bishops, not its politicians.

Paul Johnson in his book A History of the Modern World from 1917 to the 1980s, makes the cogent point that the evidence that the state can do great evil is the history of the twentieth century; whether the state can act for the welfare of its citizens is dubious – evidence for this is not encouraging.

Starbucks and Amazon, shopkeepers both, are of immense benefit to the nation: Margaret Hodge and her ilk are not. The Public Accounts Committee, a spending committee, should revert to its proper parliamentary and constitutional function of keeping the government accountable, not assist it in its raids on private and productive wealth.

Readers curious as to why articles of this nature should be appearing on a gold investment website should read: GOLDCOIN.ORG: MIXING POLITICS AND NUMISMATICS

And for background on the writer: CONFESSIONS OF A LAW AND ORDER ANARCHIST

Hayek and Mrs Bunch: The Irregularity of Individuals

Thursday, November 29th, 2012

Marshalled by Mark Rogers

It is perhaps not surprising that the English Common Law presages so much of Hayek’s understanding of how law underpins economic life, particularly as it is so heavily concentrated on property. Common Law has another importance, however, in an Austrian, Misean sense in that it is founded in human action, not in abstractions – which tend to the fiat diktat sense of “law” – that is,  in the ordinary practicalities of everyday life. Judges are often to be found revelling in them, as in this glorious example from the late nineteenth century. The judgment is taken from Not In Feather Beds, a collection of essays and speeches by Lord Radcliffe (Hamish Hamilton, London 1968). The essay is entitled “How a Lawyer Thinks”, and Lord Radcliffe has chosen this particular judgment as being an apt specimen of that thinking. The opinion was delivered by Lord Macnaghten, “one of the greatest exponents of the legal art that this country has known,” in an appeal to the House of Lords.

“The period 1888; the setting a late-Victorian, foggy, lamplit Christmas Eve at Paddington; the subject a Gladstone bag lost at the station by a certain Mrs. Bunch. Mrs Bunch is now at grapples with the Great Western Railway as to which of them is to bear the burden of the loss. This is how Lord Macnaghten deals with the problem.” [I should add that it is beautiful specimen of English prose: and, not least, pay attention to the punctuation!]

Your Lordships are familiar with the evidence in this case, and I do not propose to repeat it. It is enough to say that on the 24th of December 1884, at 4.20 p.m. Mrs Bunch came to Paddington with a Gladstone bag and some other luggage, meaning to travel with her husband by the 5 p.m. train to Bath, that on her arrival at the station her luggage was received by a porter in the employment of the company, and taken by him to the platform for the purpose of the journey, and that the Gladstone bag was last seen on the platform with the same porter a few minutes afterwards. From that time all trace of the bag is lost. The porter and the bag both vanish from the scene. It was suggested by the learner counsel for the appellants, by way of explanation, that the porter was possibly one of a number of men picked up by the company for the day to meet the pressure of Christmas traffic. But I may observe, in passing, that so far as the public was concerned, there was apparently nothing to distinguish the casual helper of whom little, if anything, was known, from the regular and trusted servants of the company.

            On these bare facts standing alone it seems to me that there would be evidence upon which the County Court judge might reasonably find for the plaintiff, even if the company were not under the liability of common carriers as regard the lost bag.

            But then it was contended with much earnestness that it ought to have been inferred from the circumstances of the case and from Mrs. Bunch’s conduct that at the time of the loss the bag was not in the custody of the company for the purpose of the journey. It was said that Mrs. Bunch came to the station too soon – that she came before the train was drawn up – that she broke the journey, if the journey is taken as having begun – and left the bag in the charge of a porter who was then not acting as the servant of the company within the scope of his authority as such, but acting as her agent in his individual capacity, and that if this was not what she meant, it was an attempt on her part to saddle the company with a liability which they were not bound to undertake.

            It seems to me that there is no substance in any of these objections. Mrs. Bunch, no doubt, came to the station somewhat early. But the one thing that railway companies try to impress on the public is to come in good time. And considering the crowd likely to be attracted by cheap fares during the Christmas holidays, and the special bustle and throng on Christmas Eve, it does not seem to me that Mrs. Bunch came so unreasonably early as to relieve the company who received the luggage from the ordinary obligations flowing from that receipt. It is impossible to define with the extreme limits on both sides the proper time for arrival. Everything must depend upon the circumstances of the particular case. But, among those circumstances, the least important, as it seems to me, is the time when the train is drawn up at the departure platform. That is, as everybody knows, a very variable time. And it is a matter over which the passenger has no control, and of which he can have no notice before he comes to the station.

            Then I think that there is nothing in the conversation which took place between Mrs. Bunch and the porter. Mrs. Bunch’s question was a very natural one. The answer which she received was just what might have been expected. Nine women out of ten parting with a travelling bag on which they set any store would have asked the same question. In ninety-nine times out of a hundred the same answer would be returned. I do not think that this conversation altered the relation between the parties in the least degree. It seems to me almost absurd to treat it as a solemn negotiation by which the lady abdicated such rights as she possessed against the Great Western Railway Company and constituted this ephemeral and evanescent porter in his individual capacity the sole custodian of her Gladstone bag.

            Nor can it, I think, be said that Mrs. Bunch broke the journey by leaving the platform to meet her husband and get her ticket. To take a ticket is a necessary incident of a railway journey. It is, at least, a very common incident in railway travelling for persons, who intend to travel in company, whether they be members of the same family or not, to meet by appointment in the railway station from which they mean to start, and it is certainly not unusual in such a case for the purchase of tickets to be deferred until the meeting takes place…

            It was said that if everybody acted as Mrs. Bunch acted in this case, railway companies would require an army of porters, and that it would be almost impossible for them to carry on their business. I quite agree, but I am not much impressed by that observation. I apprehend that if all travellers acted precisely alike, if everybody arrived at a station for a particular journey at precisely the same moment, though the time of arrival were the fittest that could be imagined, there would be no little confusion, and perhaps some consternation among the railways officials. Whatever may be the result of your Lordships’ judgment, there is no fear that it will have the effect of making everybody act alike. Things will go on just as usual. The fidgety and nervous will still come too soon; the unready and the unpunctual will still put off their chance of arrival till the last moment, and the prudent may have their calculations upset by the many accidents and hindrances that may be met with on the way to the station. And it is just because of the irregularity of individuals that the stream of traffic is regular and easily managed.

Lord Radcliffe justly comments: “the style is very nicely fitted to the subject. It is grave, without being portentous; it is admirably detailed, without being finicky; and at the same time there is, I think, at the back of it a gleam of decorous amusement that these sober legal propositions have to be marshalled and weighed to solve the problem of Mrs. Bunch and her Gladstone bag. Next, these paragraphs which seem to be no more than a recital of facts, or a rather quizzical glance at certain arguments, do in fact contain an exposition of legal principles – so much so that Mrs. Bunch’s case has become a leading case determining for good the kind of considerations that are to govern the loss of Gladstone and other bags at railway stations and the weight to be given to some of those considerations. But the legal principles are, as it were, built into the factual structure of the story itself, not imposed upon it, so that the story seems to arrange itself naturally around them and to take its form and order from their intrinsic logic… And, lastly, the whole passage, though the careful simplicity of it is to some extent delusive, is irradiated by a vivid common sense.”

It is the last paragraph of Lord Macnaghten’s opinion that sums up the whole problem of economic planning and direction; it is this quality of the Common Law that fits so neatly and substantively with the analysis of human affairs that distinguishes the work of Hayek and Mises.

Readers curious as to why articles of this nature should be appearing on a gold investment website should read: GOLDCOIN.ORG: MIXING POLITICS AND NUMISMATICS 

And for background on the writer: CONFESSIONS OF A LAW AND ORDER ANARCHIST