Monday 25 April 2011

Address to the Foundling Fathers

I mentioned the debut of the new blog Orphans of Liberty. A nice name by the way.

Here is their initial statement:

Who are we?

We are differing voices who come together under one banner – that of liberty. We are political and apolitical – some belong to parties, some do not. Some are self-professed libertarians, some are small “c” conservatives, some classical liberals – the names are varied.   However we all have one thing in common, a love of personal liberty; that casualty of the encroaching state as it seeks to micromanage our lives. In his first post for this blog, luikkerland states that writing is the the first act of rebellion. Here, then, is our defiance. Read, engage, enjoy.

Now this is all very fine but I do have one concern and that's the use of the word libertarian. Founder of the new site James Higham places himself in the Libertarian Quadrant.


But back in November I warned about the increasing use of the term "left libertarian", which I've seen quite a few times in the Orphanosphere recently.

This is what I wrote:

The point is that liberty is indivisible. The case for economic liberty is exactly the same as the case for personal liberty. The economic spectrum goes from authoritarianism to libertarianism just as does the civil liberties spectrum. The government that takes away your economic freedom is as much your enemy as one that takes away your personal freedom.
There is some evidence on my bookshelves that I became a libertarian way back in January 1972 and I don't think that I ever heard of "left libertarianism" for at least twenty years afterwards. But now it's out there in the marketplace of ideas, although its adherents might not like that term!

Here is what Wikipedia has to say:

Libertarianism is a political philosophy that upholds individual liberty, especially freedom of expression and action.[1] Libertarianism includes diverse beliefs and organizations–all advocate either the minimization or the elimination of the state, and the goal of maximizing individual liberty and freedom.

Libertarian schools of thought differ over the degree to which the state should be reduced, with minarchists advocating reduction to only state protection from aggression, theft, breach of contract, and fraud, and anarchists advocating complete elimination of the state. Additionally,some schools are supportive of private property rights in the ownership of unappropriated land and natural resources while others reject such private individual ownership and often support communal ownership instead.[2][3][4] These are sometimes grouped as right-libertarians and left-libertarians respectively.

I've underlined the key quote.

I think this is highly misleading. Real libertarians believe, as stated above, in individual liberty, and only actual individuals can act. Furthermore, acting individuals who appropriate previously unowned resources are then free to decide what to do with their new property, including deciding whether that property continues to be owned by individuals, or communally through co-operatives and the like or indeed by profit-seeking companies, which are themselves a form of communal ownership.

The problem with the so-called "left libertarians" is that they only seem to accept the idea of communal ownership, and communal ownership of a particular sort. In other words they don't believe in individual liberty at all.

There is another point. Without private ownership of property there can be no long-lasting non-economic liberties either.

We real libertarians are perfectly comfortable with any pattern of ownership, so long as it is voluntary. Of course, those of us who are economically minded will point out that certain types of ownership are not conducive to material prosperity but those who chose to use their own property in that way are perfectly free to do so. But not with my property, comrades.

I'm sure that most Orphans would prefer to live in a prosperous society. That requires a defence of real libertarianism.

Orphans of Liberty

Welcome to Orphans of Liberty.

Wednesday 13 April 2011


Here's some interesting news:
The Royal National Lifeboat Institution (RNLI) has achieved the highest score for charities for the second year running in research on reputation carried out by the Reputation Institute (RI).
Remind me again. What's different about the RNLI?

Oh yes:

The RNLI is independent of Coastguard and government and depends on voluntary donations and legacies to maintain its rescue service. Since the RNLI was founded in 1824 its lifeboat crews and lifeguards have saved over 139,000 lives.

Sunday 10 April 2011

Time to shrug?

I started a little company way back in January 1996. My wife and I are the sole shareholders and directors. The company was active for the first couple of years during which I was working freelance. It then became more or less dormant for four years when I was working full time elsewhere. Since returning to live in Scotland the company has sprung back to life.

Our company has never needed a bailout. It has never been overdrawn. Its annual return and accounts have always been filed with Companies House well before the deadlines. The P14 and P35 returns have always gone in on time. Those are the ones that cover tax and NI due and paid for the year. Admittedly the first time I did the P14s and P35s online took a wee bit longer than doing them on paper but the Revenue were offering a tax free bonus, so online was a no-brainer.

The corporation tax return is, or rather was, simplicity itself. Perhaps five minutes to fill it in, then photocopy it and take to the post office. Nae problem.

And so we come to this year.

The company's year-end was on Thursday 31st March. On the Saturday morning I reconciled the bank statement, which included the last client cheque for the financial year. That enabled me to work out my gross salary and employer's NI for the month. We've never bothered with dividends, what with all of the IR35 nonsense. I just want a quiet life and if that means paying a wee bit more tax, so be it.

Next, I prepared the profit and loss account and balance sheet for 2010/11. I also filed the P14s and P35 online. So, only five minutes to go for the corporation tax return which incidentally would show a £2 loss and consequently no tax actually due. I don't suppose that ukuncut would understand... One year I made a £2 profit and the Revenue wanted a cheque for 38p. I like to think that they framed a copy of that cheque on the office wall. The cheque did go through the bank. Fair enough, I'd have done the same.

But everything's changed this year. You aren't allowed to file the corporation tax return on paper any more. It must be filed online. But here's the catch: whereas the P14s and P35s are filed directly onto the Revenue's website, the corporation tax return has to be filed using iXBRL format. As you can see from the HMRC link, this requires a bit of thinking. Do I need to buy special software for the former five-minute job? Not necessarily:

HMRC provides a free product, 'Online Tax Return - CT'. This lets you file Company Tax Returns and supplementary pages A, E and J online with Accounts and Computations templates that ensures your return is submitted in the correct manner. HMRC have tested all the features of this service, and will provide support to users through the Online Services Helpdesk. This will be one of the available filing options once you have logged on to our Online Services.
"Tested"? Not quite. Although the Revenue assures me that their software works on an Apple, first one needs to download Adobe Reader. (Apple has its own equivalent). But the current version of the Reader only goes up to OSX 10.6.6 and the latest Apple operating system is 10.6.7. Do I risk a download? By the way, the Revenue's helpdesk was out of order during the busiest week of the tax year! It gets better. Before you download the HMRC software into your Adobe Reader you must first adopt the Revenue's Twelve Step Programme:
Changing settings in Adobe Reader

You’ll be able to enter data into the service but you won’t be able to view, print, add attachments, or submit the return until you have changed settings in your Adobe form. This change will ensure the Company Tax Return and accounts service operates securely.

There are twelve steps you need to take to change the settings in Adobe Reader to make the service secure.

I've used Adobe Reader on other machines before and didn't even know (or need to know) that it had "settings".

So I guess that I've spent around two hours researching the whole damned thing. I may try to use the Adobe Reader on my notebook but the company's accounts are on the Apple. And the accounts have to be filed online along with the tax return.

I used to wonder about those claims that ever increasing red tape was introduced at the request of large established companies so as to do down small potential competitors. To some extent yes, but not always surely. Now I'm not so sure. I see zero evidence that the coalition government likes or understands small business. They probably are trying to kill us off. Time to shrug?

(UPDATE: I spoke about this to a partner in a firm of Chartered Accountants on Monday evening. It's not just me. The whole iXBRL change is chaotic.)

Bill Jamieson is wrong

In today's Scotland on Sunday Bill Jamieson writes about the Eurozone bailouts.

Correctly, Bill starts by apportioning some of the blame to those countries already on the bailout list:

In this analysis, we cannot absolve the governments of these countries for a large measure of responsibility for the desperate state their economies are in. Greece fiddled the figures it supplied to the Eurozone authorities to qualify for entry. Its statistics now have to be independently verified.

The Irish government turned a blind eye to the galloping personal and corporate debt explosion that occurred under its watch. Portugal has failed to modernise its industries and undertake restructuring to stop its economy becoming ever more uncompetitive.

Unfortunately, Mr Jamieson goes on to say this:
It is now painfully obvious that a "one size fits all" interest rate regime was a fatefully simplistic project - poorly thought through, blind to potential problems and wilfully insouciant to warnings that across such dissimilar economies, problems and tensions were bound to arise. Whoever thought that Germany's strict anti-inflation culture would allow for the different economic composition and dynamics of countries as unlike Germany as Portugal and Spain?
I disagree completely. Needless to say I'm not supporting the existence of a fiat currency like the Euro. But I am opposing the easy call for countries like Greece, Portugal and Ireland to be able to seek salvation through devaluation of their own restored currencies.

Let's not beat about the bush. Devaluation means that you granny's life savings are to be stolen so as to bail out the imprudent. That's also the shameful policy of the current "Conservative"/"Liberal" government here in the UK. And that's what Bill Jamieson's policies would mean for Greece, Portugal and Ireland.

The key point is that devaluation is an invariable consequence of a fiat monetary system. That's exactly why the political class opposes sound money. They want to steal your money. The proper libertarian solution is to get government out of the money business altogether. Governments should not create money, they should not have central banks and they should not guarantee deposits.

Throughout history free people have invariably chosen a form of money that's based on something that's already been valued in the market place for other uses. Given choice, it is highly likely that people would pick precious metals like gold and silver as money. That in turn would mean that the same homogenous money was in use throughout the free world. It follows then that worldwide interest rates would converge according to the global supply of and demand for savings. That supply and demand for savings would be driven by the way in which people throughout the world valued future goods over present goods.

In such a world there would be no continuous theft of your granny's life savings by the political class. Governments would have to live within their means, however shocking a concept that may be. The Greeks, Portuguese and Irish governments should live within their means. So, of course, should ours.