Where's the money?

I'll name one of the organisations I work with "O". It deals with several government departments one of which I'll call "G".

A couple of weeks ago "O" sent an e-mail to "G". Essentially it said: "Send us an invoice for £Megasum and we'll pay you by return. But please make sure the invoice reaches us before 31st March."

Needless-to-say "G" has yet to send the invoice. All it needs to say is: "Send us the money." We'll pass over why on earth "G" itself doesn't know how much to invoice "O".

Like all such entities "G" is short of cash.

Or is it?

It certainly spends lots of cash. From previous experience it's highly likely that when "G" gets round to sending the invoice and subsequently receives the cheque from "O", "G" will stick the cheque in a drawer for up to three or four months before they decide to deposit it in the bank.

This is not a one off. I know of several "Os" that have similar experiences with "G".

The Hawick Pound

I see that some folk in Hawick want to issue their own currency:

A pilot scheme for the "Hawick Pound" is being launched this month to try to encourage more people to shop locally.

There has been concern from traders because of the competition they face from larger retailers outside the town.

But the idea is that the local currency could only be spent in Hawick, so money would stay in the community.

I'm all in favour of towns like Hawick having strong economies. And I'm also in favour of private monetary systems. But I don't think that the good folk of Hawick have thought this through properly.

Listen to this broadcast:

Basically we are going to print up some notes and sell them into circulation.

Just like that.

When the BBC reporter asked, "How would inflation work in Hawick?" the answer was, "I don't know." Not good enough. And if the currency is just going to be "printed up", we can guess the answer on that one.

As Mises explained, a sound currency can only come into existence by winning the hearts and minds of people in the marketplace. Why would a resident of Hawick prefer a currency that was only usable in his home town, especially a currency that can be "printed up"? There's absolutely nothing to stop Hawick folk from patronising local businesses as things stand right now. By all means let that include a bank - but one founded on sound principles.

Calling you...

MPs are having a moan about banks:

Banks are continuing to aggressively target customers who have fallen into debt, according to a report by a group of Scottish MPs.

The Scottish Affairs committee has called for an end to "undesirable practices" such as automated calls.

I didn't realise that the IMF used automated calls!

I blame the public sector workers

According to David Bell in today's Scotsman:

PUBLIC sector workers are not responsible for the recession.

But in the very next sentence Mr Bell writes:

Most of the blame should lie with regulators, bankers, governments, economists, auditors, credit rating agencies etc.

Eh? Aren't the regulators and "governments" public sector workers? And the economists have almost all been educated at universities that employ public sector teachers. Lots of those economists still work in such "public" institutions and wouldn't know real economics if it hit them on the head.

Of course bankers, auditors and credit rating agencies have also fallen down on the job but the prime reason for the financial crisis (most of it yet to happen I guess) is the existence of the fraudulent government-created money system.

Now why could this be?

Here's some interesting news about camera sales:

The UK has embraced the Micro Four Thirds camera format, making up over 10% of interchangeable lens camera sales (by volume) in December 2009. According to figures from market research company GfK Retail and Technology, around 6,600 Micro Four Thirds cameras were sold in the UK, accounting for more than half of the system's sales volumes in 11 major Western European countries.

The Micro Four Thirds system allows serious cameras with interchangeable lenses to be much smaller than the more conventional SLRs. Also, by not having the bulky pentaprism on top, these cameras look very similar to compacts.

Now why would the Micro Four Thirds system be doing especially well in the UK?

It's not the price: these cameras are pretty expensive. I reckon that the reason may well the one that's making me think of getting one of these pricey little devices. Having a small and unobtrusive camera could well mean that the user is less likely to come to the attention of Britain's police forces who are waging a relentless war on photography. Unusually in European history this is a war that seems to have left the mainland unscathed.

Opinion Polls

Last week:

Conservatives: 39%
Labour: 33%
Liberal Democrats: 17%
Others: 11%

Today:

Conservatives: 37%
Labour: 35%
Liberal Democrats: 17%
Others: 11%

Next week:

Bond Market: 100%
Conservatives: 0%
Labour: 0%
Liberal Democrats: 0%
Others: 0%

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Twitter

My Twitter account has been hacked. Password being changed. Please ignore any strange messages.

How should I vote?

I see that my good friend Sean Gabb is thinking of voting for the Tories.

This is quite a change for Sean and here's the key quote:

This being so, why do I propose to vote Conservative? The answer is that a Conservative Government would probably continue with most of the suicidal or simply demented policies of the Blair and Brown Governments. But, at the end of five years, it would then allow a free election as these things have been commonly understood in England. A re-elected labour Government would not.

I'm sure that Sean includes Scotland as well.

My own position on the forthcoming election is still in doubt.

Let's go back to when I first became interested in politics - back in the late 'sixties. After a brief leftist phase I discovered the IEA and learned quite a bit about economics. I was excited when Ted Heath won the 1970 election, but he rapidly abandoned his free market Selsdon principles and adopted interventionism. In 1972 I discovered libertarianism, joined the Libertarian Alliance (now directed by Sean), and read all the classic stuff by Mises, Hayek, Rand, Friedman and Rothbard.

Things got worse and worse during the rest of the 'seventies. Inflation was rampant and total economic collapse seemed possible. But as far as I can recall we libertarians didn't concern ourselves nearly so much with civil liberties as we do now. Not because civil liberties weren't important but rather because the Wilson/Callaghan Labour governments clearly wanted to nationalise the economy but didn't show anything like as much interest in nationalising our minds and bodies. Unlike their successors today.

This meant that British libertarians were quite supportive of the Thatcher regime as it gradually reduced the growth of the socialised part of the economy and brought inflation back under some sort of control. Sadly there was no serious attempt to tackle the welfare state but lots of us continued to vote for a Conservative party that was clearly better than the alternative.

Along came John Major - infinitely preferable to his Labour successors who enthusiastically supported the ill-fated ERM debacle. And then we got Blair. I for one wasn't fooled for a moment. Blair and Brown have almost destroyed our country. Not only have they ruined the economy, they have almost completely wiped out our civil liberties that have been won over such a long period. I think that fixing the economy will be an easier task than rebuilding civil society.

In 2005 I voted for the Tories but without too much enthusiasm. In 2007 I voted Tory for the Edinburgh City Council but SNP for Holyrood. This was partly a tactical anti-Labour vote and, thank God, Labour got the chop. But my support for the Nationalists wasn't entirely tactical. I do have a great deal of sympathy for the independence cause. My own background is both English and Scottish and I'm proud to say that I've visited every county in the United Kingdom. I also think that the UK has generally been a good thing.

But times change.

We are no longer a world power and it was the Empire that bound us together. Also, Britain is just about the most centralised country of its size - despite devolution. The dominance of London - largely the result of government policies, not of the free market - harms the rest of the country tremendously, especially those of us far from the capital. Scotland has an alternative identity that's not on offer to, say, Yorkshire. Everyone here, including unionists, has an alternate nationalism to the British one. I think that Scottish independence is likely at some time and I'd quite like to be around when it happens. I see no reason for an independent Scotland to be an economic failure - subject to adopting suitable economic policies. I've got the textbooks! And although some other libertarians may disagree, I think that Scotland's relative homogeneity may well be a most useful asset in the future.

But the SNP hasn't quite sealed the deal for me yet. Every time I decide that I'll abandon the Tories for the Westminster vote the SNP indulges in another bout of nanny-statism. Then I start thinking like Sean and lean back towards the Tories only for them to drop another clanger. I know several of the Scottish Conservative candidates and would probably vote for them out of a sense of loyalty were I to live in a relevant constituency. But fortunately perhaps I've never met the local candidate and so my own vote can't be influenced by friendship. Nor do I know the local SNP person. I have seen the Labour candidate on a couple of occasions. He seems to be slightly more knowledgeable about economics than does his boss. If only this Labour chappie would defect to the Libertarian Party my quest would be over. Oh yes, his name is Alistair Darling.

Banking reform

I went to the David Hume Institute event last night.

The topic:

‘Narrow banking and all that – regulatory reform after the collapse of Scotland’s banks’

Speaker: John Kay

I'd guess that there were around 150 people there, with heavy representation from the banking world. Kay's argument was for the introduction of a regime of narrow banking.

Its purpose:

Their purpose is to ensure that taxpayers will never again be called upon to lay out unimaginably large sums of money to protect financial institutions, and to protect the real economy – non-financial businesses and users of financial services – from the consequences of mismanagement of financial services firms. The interests of the financial services sector itself are secondary to these primary objectives.

I think that Kay's plan is certainly better than what we have now. After the talk I asked Kay about the commodity-backed currency option and the role of fractional reserve banking. He thought that his narrow banking proposals were sufficient to mitigate the effect of the fractional reserve system. I'm not so sure, although I don't think that fractional reserve systems should be outlawed so long as everyone can see what the risks are.

An interesting anecdote. After leaving the University I walked down the road to a Lidl shop to get some milk. Ahead of me in the queue were around a dozen students. Every one of them paid for their purchases using plastic. I used a fiat currency note.

Nicolagate

Everyone's being going on about the Nicola Sturgeon letter. There's some good discussion over on SNP Tactical Voting.

Jeff writes:

So two former Labour leaders and a former Tory Cabinet Minister write character reference letters and/or involve themselves in court cases at the request of a constituent and it's ok. An SNP MSP does it and she faces "serious questions", calls to resign and a media grilling to within an inch of her political life.

Unsurprisingly, the unionist parties (and their media outlets) have attacked Sturgeon, and nationalists have supported her. But what no one has done is to ask the really obvious question: Why should the state operate a benefits system in the first place?

Obviously it shouldn't.

The non-aggression principle is at the heart of libertarianism. Some libertarians believe that a state is necessary to defend us against aggressors. Others believe that it's possible to do away with the state altogether. No one who accepts the non-aggression principle thinks that the state should take resources from some to give to others. The real scandal of Nicolagate is that all the politicians seem perfectly happy with the benefits culture that's bankrupting the country.

As for Mr Rauf himself, should he go to prison? No, I don't think so. Prison would mean that taxpayers would be funding him yet again. What should happen is that he is fined, say, ten times what he has stolen and that money be used towards cutting taxes.

Scotblogs Awards

Thanks to everyone who voted in this.

Bastiat Alert

That old seen and unseen fallacy never quite goes away, does it?

Here's the latest outbreak:

ALMOST 800 jobs were safeguarded or created in the final quarter of 2009 after Scottish Enterprise paid out more than £7 million in regional selective assistance (RSA).

But how many other jobs were lost as a result of the taxes extracted to pay for the jobs favoured by Scottish Enterprise (sic)?

As the great Bastiat put it:

There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.

From "Hug a Hoodie" to "Hang a Hoodie"

And you get to do it yourself!

The question I have is this: Has Annabel Goldie signed up to this policy? What, with law'n'order being devolved and all that.

I agree with Labour! (*)

Slaps forehead. Scrapes oneself off the ground.

But they've got this one right:

Scottish Labour, which is opposed to minimum pricing, said the study strengthened its argument that the measure would do little to cut problem drinking while penalising moderate drinkers and boosting supermarket profits

Needless-to-say I understand that Labour's opposition to minimum pricing is almost certainly simply because it's a policy of the SNP, not from any moral opposition to market rigging. Oh no.

Labour's Jackie Baillie says: "Scotland’s hard-drinking culture is a national disgrace."

No, Scotland's hard-legislating culture is a national disgrace. Drinking is voluntary; being legislated into serfdom isn't.

(* Doesn't mean I'm going to vote for Alistair Darling.)

The state is not your friend (part 94)

Now this is an interesting one:

Ronnie Smith, the general secretary of the Educational Institute of Scotland (EIS), claimed the General Teaching Council for Scotland (GTCS) was “over-zealous” after John McHugh, an English teacher from Dundee, was removed from the teachers’ register after being banned from driving for two years and fined £400.

Smith said teachers were being removed from the register for relatively minor offences outside work that had no bearing on their professional skills.

I think that an employer should be able to dismiss an employee for any reason whatsoever. Subject to contract of course.

Does that mean that I think that every employer is all wise? No of course not. Nor is every employee.

If the EIS were a genuine union that's primarily interested in its members' welfare they would have spotted the real issue here. Especially as they are teachers.

The real issue is that almost all teachers in Scotland are employed by the state. In a free society, no teacher would be employed by the state. They'd be self-employed, employed by companies, employed by co-operatives, employed by parents and employed in all sorts of ways yet to be imagined. Then, if one employer behaved "over-zealously" they'd very quickly find out that no one would continue to work for them.

Who's gloomy now?

Scotland's top civil servant, that's who:

THE country is facing a gloomy future, Scotland's top civil servant has warned, with fears that reduced budgets will see a rise in compulsory redundancies.

But what Sir John is talking about are cuts in the public (sic) sector. The truth is that without cuts in the "public" sector we can't get growth in wealth creating businesses. I find it worrying when folk conflate the size of the state with national prosperity.

Does the United States face a coup d'etat?

Some very well-informed people think that it's certainly possible.

The problem of beggars in Edinburgh

I see that the manager of the Balmoral Hotel is concerned about Edinburgh's burgeoning beggar population:

Ivan Artolli, general manager of the five-star Balmoral, said overseas visitors felt uncomfortable in the city centre. And he said Scotland's capital was the worst of 15 European cities he had worked in for begging.

I understand Mr Artolli's concern. Aggressive begging is just another of those problems that'll be resolved once our streets are properly privatised.

But one thing concerns me about this article: it only deals with the problem of city centre beggars. What about the suburbs?

The situation out there is much worse. Especially in the southwestern part of the city. One local resident is regularly begging Brits and foreigners alike to sub him for billions of pounds. Isn't that the real problem?

Caledonian Mercury

I am pleased to welcome the Caledonian Mercury, a new Scottish-based web newspaper. I have added the Mercury to my blogroll and also subscribed by e-mail.

Along with the excellent Scottish Review I believe that the likes of the Caledonian Mercury represent the future of journalism in Scotland.

I like print newspapers - I've read the Scotsman and the Herald for years, but they really do seem to have lost the plot. I'll miss them when they've gone. But I quite like the idea of photographing our last socialist politician being strangled with the last copy of the Scotsman.

RNLI

I see that the Royal National Lifeboat Institution has had a record year.

Note this quote:

Michael Vlasto, the charity's operations director, said: "The record-breaking figures in 2009 may be, in part, due to people holidaying at home in the UK and Ireland instead of planning holidays abroad during last year's financial uncertainty. However, we look at long-term trends and, as we start a new decade, the figures for the past ten years show our lifeboats have launched close to 80,000 times, rescuing 76,489 people."

The key word is "charity". The RNLI is one of the few genuine charities of any size.

Many so-called charities are fakes. A genuine charity receives donations from the public that are given voluntarily. Fake charities get much of their funding from the taxpayer - that's to say funds that are extracted by force - and/or are primarily propaganda outfits devoted to increasing state activity.

Support the RNLI.

The conspiracy against small companies

Libertarians often point out that ever-increasing rules and regulations benefit large businesses who have the necessary administrative resources to deal with them at the expense of small businesses who don't. Indeed, it seems to be the case that many of these regulations exist precisely because big companies have lobbied for them. "Business" per se is not your friend. Liberty is.

A short while ago I attempted to do an online Annual Return for a small company. Twenty years ago I would fill in a paper return, take a photocopy, write a cheque and then send it off with proof of posting. Dead simple. Now one has to file online to get the cheaper rate.

So today found me at the keyboard thinking that all would be straightforward as I'd now got used to what I thought was the latest system. But no, things have changed again. Normally, all of the existing company information pops up and one just confirms "no change" for each item and eventually gets to the bit where the credit card information is entered. Not so today. I was asked why hadn't I entered the "country of residence" of the directors. This is a new requirement.

In the case of this English based company I had the option of "England", "Britain" or "UK". All were acceptable to the system but I was then asked, "When did this change take place?" But of course no change had occurred. I was tempted to enter something like 488 AD for the director residing in Kent. Isn't that around when it changed to being "England"? I wimped out and phoned Companies House and, after several attempts to get through, I was told to enter the date of the Annual Return as the date of the "change". I was also told that thousands of other people had been phoning about just this question.

I wonder if this is a cunning way of the government making money out of the phone calls. To think that we've sunk so far that I now have such a suspicious mind. Then there followed the problem of the credit card not being accepted. This was probably due to the system not understanding the Scottish flat numbering system. No wonder folk vote SNP. After a few more attempts I was able to pay the fee over the phone. After the revolution we'll get Ryanair or Amazon to take over Companies House.

The election is on!

I mean the Scotblog Awards of course.

Freedom and Whisky and Scottish Clouds have both been nominated.

The Resource Curse

I came across a post on Marginal Revolution entitled Why is Haiti so poor? It's asking the question in the context of yesterday's earthquake.

Note point 3:

Sugar cane gave Haiti some early characteristics of "the resource curse," dating back to the 18th and 19th centuries.

The resource curse?

Here is a definition:

The resource curse (also known as the paradox of plenty) refers to the paradox that countries and regions with an abundance of natural resources, specifically point-source non-renewable resources like minerals and fuels, tend to have less economic growth and worse development outcomes than countries with fewer natural resources.

Doesn't that just ring a bell?

So many Nationalists point to the oil revenues that would accrue to an independent Scotland. Unlike some, I fully accept that a vast amount of such revenue would come under Scottish control. And yes, I do know where the Anglo-Scottish border is drawn over the North Sea. But would such wealth benefit us?

Us? Those revenues would go to the Scottish political class, not to we the people. And I see no reason to expect that the political class of an independent Scotland would behave differently to how that class behaves in most other parts of the world. The money would be spent on the favoured clientele of the political class.

And so I think that Scotland would probably be better off by exchanging all the oil revenues for a single copy of the Swiss constitution.