Thomas Piketty, New Fascist?

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On the face of it Piketty's work is orthodox, envy-ridden social democracy. Backed up by dodgy charts. But when we poke around at the words in the FT article there's an odd smell:

US inequality may now be so sharp, and the political process so tightly captured by top earners, that necessary reforms will not happen – much like in Europe before the first world war.

Here's the thing - the masterpiece created by the Great War was Fascism. It's authoritarian, directed, Listian autarky was the solution to those very problems that Piketty alludes to - essetially the excesses of capitalism.

The essence of the the New Fascism is that there must be a new authoritarian, directed, Listian solution - but petty nationalist autarky is rejected just as is personal liberty, choice and the idea of individual achievement. The fruits of success are not ours but the state's to determine.

The deepest irony of the New Fascism is that its adherents use the old discredited Fascism as a threat to beat us into submission. We are told that we must embrace their new order or suffer a return to that frightening past, a past that scarred Europe so terribly:

Short of that, many may turn against globalisation. If, one day, they found a common voice, it would speak the disremembered mantras of nationalism and economic isolation.

But Piketty and others propose the same solutions as did Gentile and Spirito - that identity is subsumed in a wider society and individual sovereignty is a false aspiration. Above all this is the central idea that the state must enforce society's sacrifice for the greater good. In this case it is a vain search for material equality built on the idea that we are unequal because the powerful have stolen from the weak.

I don't comment here on Piketty's economics but on the imperative behind his words - that liberty must be sacrificed on the altar of equality. This is the New Fascism.

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Labour's still wedded to the license state

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The bizarre polity that is modern India was - under its then perennial Congress Party rule - described as the 'license raj":

This is when India got its License Raj, the bureaucratic control over the economy. Not only did the Indian Government require businesses get bureaucratic approval for expanding productive capacity, businesses had to have bureaucratic approval for laying off workers and for shutting down. When a business was losing money the Government would prevent them from shutting down and to keep the business going would provide assistance and subsidies. When a business was hopeless an owner might take away, illegally, all the equipment that could be moved and disappear themselves. In such cases the Government would try to keep the business functioning by means of subsidies to the employees. One can imagine how chaotic and unproductive a business would be under such conditions. 

Every economic act, every profession, every industry acts solely on the basis of licenses granted by government. Not only was this corrupt but it crippled the Indian economy for a generation.

This lesson in failure - with India falling ever further behind places like South Korea, Thailand, Indonesia and, latterly, China - is still ignored by social democrats. Ignored by those who see the purpose of the state as the direction of individual actions to a greater good - or rather to the preferences and interests of the political class.

Such a man is Ivan Lewis MP, the Labour culture shadow - Mr Lewis wishes to license journalists:

Lewis will suggest that newspapers should introduce a system whereby journalists could be struck off a register for malpractice.

Not only is this illiberal - but then we expect that from Labour politicians - it is stupid and enforceable only by arbitrary power. It would represent the first step towards the social democrat establishment controlling the output of the press, a big stride towards the hounding of journalists for the grave sin of criticising Labour politicians. And it is wrong.

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...or you could just cut taxes?

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Read this attempt to create a distinct economic strategy for Labour - at it's heart is the idea that the share of GDP that is wages and investment need to rise for a sustainable economy. Now leaving aside the fact that the peak for 'wage share of GDP' was in 1975 - just before we crashed into the IMF's bail-out and during the height of the union power that destroyed out manufacturing industry, I was struck by an obvious alternative.

Here is our social democrat writer quoting the IMF:

"...without the prospect of a recovery in the incomes of poor and middle income households over a reasonable time horizon, the inevitable result is that loans keep growing, and therefore so does leverage and the probability of a major crisis that, in the real world, typically also has severe implications for the real economy.”

So 'poor and middle income households' can't afford to pay back loans and maintain current living standards - creating the borrowing pathology that infects our economy. The propsed solution is:

Support for a living wage in the public sector and in public procurement

That's it really. A rehash of the economic nuttiness promoted by Ed Miliband during his leadership campaign (and largely directed to the successful strategy of sucking up to big union bosses - oh, yes folks, the 1970s all over again).

And that alternative? Simpler, cleaner, less-controlling, more effective and popular?

Just cut taxes for 'poor and middle income households'

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Tim Farron or "Some so-called liberals really don't get it do they?"

Tim Farron, who I believe holds some elevated position in the Liberal Democrat Party and represents South Lakeland at Westminster is prattling on about needed "fair trade" for upland farmers.

I see farmers who struggle to keep going and just to pass on the farm to their children. It really is high time we give farmers a fair deal. I am doing all I can to make sure that their concerns are heard. We need a strong supermarket regulator as soon as possible and we need to provide fair trade for British farmers.

Let's be clear, Mr Farron is right when he says farmers struggle, work daft hours in all weathers and are often living below the poverty line. And that often the price they get for their produce barely represents the cost of production. But his solution - regulating prices - is wrong.

Let's begin with subsidy. The Common Agricultural Policy dishes out 55 billion Euros in farm subsidy. So why then Tim are your upland farmers below the poverty line?

Each year we’re seeing a further concentration of benefits in the hands of fewer,
larger landowners, who seem to use their subsidy cheques to buy up more land and more subsidy ­entitlements,” Jack Thurston, the co-founder of farmsubsidy.org, told the Scotsman. “Most people think farm subsidies are there to help the small guy but we’re seeing it’s quite the reverse. The bigger you are, the better your land, the more public aid you get,” he said.

So there you have it, Tim. Billions in subsidy to farmers is being scooped up by landowners leaving tenant farmers and upland farmers with less income. And you want to blame supermarkets? Are you so in love with the EU that you can’t see how its corrupt subsidy system is the problem and that more regulation, more price controls will serve only to distort the system even further?

Let’s look at what happened in New Zealand where there was a similar situation with plenty of upland sheep and cattle farmers a long way from the market. And there was a distorting subsidy system. In the 1980s the Government scrapped the subsidy. And all the farms closed? No.

New Zealand agriculture is profitable without subsidies, and that means more people staying in the business. Alone among developed countries of the world, New Zealand has virtually the same percentage of its population employed in agriculture today as it did 30 years ago, and the same number of people living in rural areas as it did in 1920.

Indeed if you read on Tim, you’ll find that sheep farmers – you know the chaps who come to your surgeries – were hardly affected at all by the changes:

Sheep farmers, who as a group were the most heavily subsidized, were (not surprisingly) hardest hit by the elimination of subsidies. Those farmers who were heavily in debt at the start of the reform period were hit hard by rising interest rates, and a transition program was negotiated to ease their situation. Farm-related sectors like packing and processing, equipment and chemical supply, and off-farm transport also suffered, but this was regarded as evidence of their previous inefficiency. Overall the ‘transition period’ lasted about six years, with land values, commodity prices, and farm profitability indices stabilizing or rising steadily by 1990.

If you were a real liberal, Tim – one who believed in free markets allowed to operate freely – you’d be campaigning for us to scrap agricultural subsidy so as to allow farming to thrive. Instead, like a good social democrat sucking at the taxpayers teat, you call for more regulation, more price controls and more taxpayers money directed to special interest groups.

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Why Jack of Kent isn't a liberal

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Top legal blogging chap, Jack of Kent, has – in his glory and pomp – issued a definitive definition on his blog. Not to do with the law but an answer – nay a revelation – “what is liberalism?” Forget about the great minds of the past who have pondered the meaning of liberal and liberalism – Jack has given us the definition. In short, easy to digest sentences:

Flowing from this priority placed on human autonomy then come the more practical applications of liberalism: due process, equality and diversity, freedom of expression on public matters, a private space on personal matters, free movement of peoples, internationalism, free trade, an evidenced-based approach to policy and law making, and so on.

Now because I’m a good boy and not as clever as Jack, I’m going to accept his definition of liberalism (even though I don’t entirely agree). Which is why I know Jack isn’t a liberal. He wrote this:

The ongoing economic crisis is a good moment to test this faith in the Market deity

And this…

It is as if the invisible hand has let us all go and started slapping us instead. One really must now have doubts that the Market is omnibenevolent, even if it retains the other two usual attributes.

No-one who claims to be a liberal should hold these views. You cannot be selective in your choice of liberal viewpoints and it is as illiberal to reject the free market as Jack does here as it is to reject freedom in sexuality, worship or diet.

But then, even in his glorious defining statement, Jack falls back on that old leviathan:

The liberal endorses an individual's autonomy unless there is a greater public interest in interfering with that autonomy.

So I can do what I want so long as the Government (or Jack) doesn’t think I shouldn’t do that something. I hate to tell you, Jack, that ain’t liberalism. It's social democracy.

But then, what do I know, I’m not a liberal!

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