Free Life Commentary,
an independent journal of comment

published on the Internet
Issue Number 58
11th November 2001

"Uniting Europe without the Union"
A Conference in Prague
2-5 November 2001
A Brief Record of Proceedings
by Sean Gabb

Free Life Commentary,
an independent journal of comment
published on the Internet
Issue Number 59
17th December 2001

A Case Against the European Union
by Sean Gabb

Because I run the Candidlist (www.candidlist.com), I am a person of moderate importance and of some prominence in the Eurosceptic movement. However, I have not, so far as I can recall, ever set out my reasons in one place for my opposition for the European Union. Therefore, I will now briefly set out these reasons.

During the debate over British membership of the European Economic Community that took place in the 1970s, I was too young to have any fixed opinion on the matter. As a patriot, I disliked the idea of being ruled by foreigners. But I did not read any of the newspapers - and I am not sure if there were any worth reading—where the argument was put in these terms. The argument that I did follow was all about economics and specifically about free trade with the other member states. Because I was a libertarian of sorts even then, and because I had a fixed belief in the economic and moral virtues of free trade, I supported British membership—for what very little my support was worth in those days. During the referendum campaign in 1975, I saw no reason to disbelieve what I saw on the television - remember, I was very young—and I was struck by the fact that the only political parties that were utterly opposed to membership were national or international socialist in their ideology. I was pleased with the result of the referendum, and then allowed the whole issue to drop from the front of my mind. I was in good company. From the mid-1970s, virtually all political debate was focussed on economic policy, which in those days was a matter overwhelmingly for national governments.

When the debate over membership of the EEC began again in the early 1980s, I saw this as part of the continuing debate over economic policy. By now, I could see that continued British membership was not a good thing in itself. It may have made sense for a group of Roman Law countries, with more or less despotic political cultures, to come together in a federation. It made no sense to me for England to join in the process. I could see differences between us and the main European countries so great as to make any formal union impossible without massive changes on one or both sides; and the balance of numbers and wealth could only put the main burden of change on us. I variously despised and feared these changes—the agricultural and fishing policies, the forced metrication, the general hostility to individuality and local customs. Even so, I was broadly in favour of remaining in the European Union because I thought its limited commitment to free markets was a useful influence in the British debate on economic policy.

Right through the 1980s, the Labour Party was committed to policies that involved insulating the country within a mass of import and exchange controls, and then stealing everything by law that could not be stolen by inflation. Parts of the Tory Party were hardly better—the anti-socialism of most activists owed far more to Corelli Barnet than to Milton Friedman or Enoch Powell, and some would have welcomed almost any degree of economic nationalism. With alternatives like these, Europe could be seen as an expensive but necessary insurance policy. At best, it co-opted people like Michael Heseltine and Neil Kinnock, thereby depriving the protectionists of their natural leaders. At worst, it was an institutional obstacle that might slow down any government that wanted to unplug this country from the world economy.

I continued believing this into the early 1990s. By now, my interest in the economic debate was diminishing. The Tory protectionists had fallen silent—some dead, others become Thatcherite free marketeers. The more intelligent Labour politicians had simply stopped being socialists in the Bennite sense. They had bought Armani suits and started talking in post-modernese about Bill Gates and global culture. I was now interested in the protection of civil liberties. For all it had saved the country in the economic sense, the Thatcher Government was hard at work on shredding our constitutional liberties. I now saw Europe as a means of slowing the progress of this work. The Factortame case was seen by many as an interference with the sovereignty of Parliament. I saw it as a means of stopping the British authorities from censoring what adults in this country could read or watch. If the Treaty of Rome was able to keep the Customs and Excise under some control, I was happy to let it be used for that purpose.

By the mid-1990s, however, many libertarians were realising that the European Union as it now was had served its purpose as an obstacle to socialism. Instead, it had become the main institutional obstacle to radical free market policies. Admittedly, these were not yet on any British political agenda. It is significant, though, that they were being argued against by the Establishment intellectuals rather than dismissed out of hand. In Europe, they remained for the most part unknown, and seemed unlikely to make any intellectual progress for at least a generation. I shared in this realisation. Also, I was becoming more sophisticated in my understanding of political power and its restraints. What brought me fully into the Eurosceptic movement—and I was a late entrant: as late as 1997 - was partly the nature of what the European Union was doing, but mainly how it was doing these things.

I see no point enumerating the evils imposed on us by membership of the European Union. That is being done already by Christopher Booker far better than I can; and no speech on Europe by a Conservative politician is complete without its reference to some expensive or simply mad new regulation. What interests me is the means of imposition. These are still not generally understood, but ought to be seen as the real positive case against Europe.

It would be nice if the evils of European membership could all be traced to Brussels or Bonn or some other European capital. It would then be a simple matter of throwing off the foreign yoke. We could drive the invaders screaming into the sea and set about restoring our freedom and greatness. Reality is not that simple. I have no doubt that membership of the European Union endangers our survival as a nation of free individuals—but it does so by raising up a wholly domestic enemy.

During the past 30 years of European membership, our Constitution has been subtly amended. Some branches of government have been exalted as never before, others set on their way to extinction. The most obvious beneficiaries have been the administrators, the special interest groups—which include much of big business—and those politicians who learn to play the rules of the new system. These have become a ruling class largely freed from democratic control. Such control has only so far ever existed in nation states with liberal institutions. In these places, the authorities are directly accountable to a public opinion that may be divided on all manner of issues, but that is also agreed on certain fundamentals, and that is able to be moved one way or another by the force of argument. Let jurisdiction be transferred to a multi-national authority, and it does not need to face this kind of united public opinion. It becomes rather like the old Hapsburg Empire, which was able to maintain itself for centuries by playing off one national group against another, never having to justify itself to all the people as the French and British Governments had to do.

That is the European Union. The old democratic institutions remain, but are of decreasing significance. They have little real control over the decisions that affect our lives. Either they merely ratify those decisions, or they are not even formally consulted. At every point, this transfer of power is justified by the need to comply with obligations accepted under the various European Treaties.

Let me take what many will think a trivial example. In October 1995, it became a criminal offence to use English measurements in a wide range of commercial transactions. There was an outcry in the media and to some extent in Parliament, as people were forced to stop using measurements the very names of which are part of our language. The outcry was silenced by the explanation that this had been forced on us by "Europe". A Directive from 1989 was produced which required standard units of measurement throughout the Union.

The explanation was false. The Directive did require standardisation, but was silent about the outlawing of other units of measurement, or the use of criminal law to ensure compliance. Indeed, a Directive of the European Union is not a law. It is simply a wishlist sent out by the Commission to the member governments, which can be treated very largely as they wish. I am told that in Spain and Italy and Holland, I can still legally buy a gallon of petrol and even a scruple of vitamin C—assuming I can find anyone there willing to deal with me in these units. The forced metrication of this country happened not because someone in Brussels decreed that it be done, but because the relevant officials at the Board of Trade have tidy minds that are offended by the illogicality of the English system of weights and measures; and because the big food retailers could see a means of increasing their already large market share by imposing conversion costs on their smaller competitors that they themselves can easily afford. These people used the excuse of Europe to avoid the political reaction that might have frustrated their design had they relied on a law made entirely in this country.

It is the same with agricultural and fishing regulation. Whole branches of commerce and ways of life are destroyed in manners that would never be possible were the destroyers accountable to Parliament. But the officials expand their empires, and a lucky few wire pullers grow rich, while public opinion rails against a European Commission that may not object at all to what is being done—that may even rather like it—but that may also not have required, nor had the legal power to compel, its doing.

In some cases, the corruption of democracy is still more impressive. The money laundering laws that make it hard to open a bank account in this country, or use large amounts of cash, appear to have been forced on the British Government by a European Directive made in 1991. The truth is that various Home Office and Treasury officials were looking for new things to regulate in the middle 1980s, at the same time as various City institutions were worrying about losing business as financial deregulation opened their markets to new entrants. There were other interested parties, but these were the important ones. They were powerful enough to lobby the British Government into joining with the Americans to call for a United Nations initiative against money laundering. This led to a Convention, that led to a Council of Europe Directive, that led in turn to a European Union Directive, that led finally to British laws for which no British politician can be blamed—no matter how much harm they do to the City as a whole—and which no democratic majority can overturn without first repudiating a mass of treaty obligations.

We are currently seeing the acceleration of this process. The Government has just forced a set of anti-terrorist laws through Parliament that give it the power to make new criminal laws without further reference to Parliament. It would have faced overwhelming domestic opposition had it tried to make laws against holocaust revision or some other opinion deemed "xenophobic". It can now make these laws de facto because it is doing away with the old dual criminality rule that limited extradition of British citizens to foreign countries only to those cases where the alleged offence was also a crime here. It will soon be possible, without the requirement of anything more than proof of identity, automatically to turn a citizen of this country over to face trial in any other member state of the European Union that has issued an arrest warrant. Since some of these countries—Germany, for example, claim an extraterritorial jurisdiction for their restraints on freedom of speech, it is conceivable that people like David Irving will one day be deported - without appeal to any British court—to face trial for acts committed in this country, but which are not criminal in this country. As said, the Government is using membership of the European Union to make new criminal laws de facto without reference to the usual process of democratic argument and justification.

That is the European Union—and that is also the New World Order, of which Europe is only a fragment. There is no external conspiracy. There is no foreign domination. There are simply national élites who conceal their own despotism behind the fiction of obedience to international law. These élites cooperate with each other across borders. They are gradually laying the foundations of a true world government, by way of multinational federations like the European Union. For the moment, it must be granted, they are distinct from each other, and their power in any one country rests on bluff. They have not the means to smother a democratic revival in a large and powerful country like ours. This may change in the next generation, as the federations gain increasing powers of taxation, and build up military forces able and willing to prevent secessions.

But that is not now. Withdrawing from the European Union ought not be seen as throwing off a foreign domination—it certainly ought not be allowed to sour commercial relations with France and Germany—but as a restoring of internal balance to our Constitution.

And that, briefly put, is why this country should withdraw as soon as possible from the European Union.

Free Life Commentary,
an independent journal of comment

published on the Internet
Issue Number 65
8th April 2002

Paris in the Springtime with a Fistful of Euros:
A Record of the Libertarian International Spring Convention,
Paris, 5-8th April 2002
Sean Gabb

Free Life Commentary,
an independent journal of comment
published on the Internet

Issue Number 110
25th August 2003

"Nej till Euron"
Fighting the Evil Empire in Another Province
by Sean Gabb

Adlon Hotel, Stockholm, Monday 25th August 2003

With Mrs Gabb, I am in Sweden for two reasons. The first is to address the summer conference of one of the main libertarian movements in Scandinavia. The second is to help strengthen the no campaign in the closing stages of the Swedish referendum on the Euro. It was my intention to write a long account of the things seen and done during this past week, together with observations on the Swedish people and their architecture and language. But I am presently short of time, and the glare of the television lights has dimmed all else but the events they illuminated. I will write at more length when back in England. For the moment, though, I will concentrate on the second reason for my visit.

Late last year, the Swedish Prime Minister—some vain creature whose name escapes me, but who likes to get himself photographed in company with Tony Blair—decided to try pushing his country into the Euro. He announced a referendum, and doubtless imagined that a year of campaigning would so wear out everyone else that he would have his way in the end. Sadly for him, though most of the parties and media and most of the Swedish establishment in general were in favour of giving up the Crown, the Swedish people have so far shown unwilling. With three weeks to go before the vote, the opinion polls continue to report strong opposition. The yes campaign seems to have more money and a better co-ordination of effort than the diverse coalition of movements against joining. But truth and greater commitment have so far been decisive.

Not surprisingly, the campaigners for a yes vote have descended from vague generalities—peace in Europe, more investment and jobs in Sweden, and so forth—to specific falsehoods. The claim at present is that Sweden cannot escape the Euro, since just about every country in Europe either is a member already or is about to become one. Even Britain, they insist, will join within the next few years. This being so, Sweden has no choice.

It was with these claims in mind that one of the more vigorous groups campaigning against the Euro—Medborgare Mot EMU, which is Citizens Against Economic and Monetary Union—decided to bring over some British Eurosceptics to explain that Britain was in fact very unlikely ever to join. This group is led by Margit Gennser, a former Conservative Member of Parliament in Sweden, and has Erik Lakomaa as its Campaigns Director. Together, they chose to invite me, Madsen Pirie of the Adam Smith Institute, and Bernard Connolly, former civil servant with the European Commission and author of The Rotten Heart of Europe. We made our presentations this morning at the Swedish Academy of Engineering Sciences, before an audience of bankers and politicians and virtually all the main Swedish media.

We began at 10:00 am. After a brief introduction by Professor Kurt Wickman, who was chairing the meeting, Madsen Pirie went first. What I like most about listening to Madsen is that beneath the entertaining surface of what he says is a logical structure of argument that lets whatever he says be reconstructed from memory days or even months after the event. I first noticed this at a conference in 1988, when I was able to sit down two days after he had introduced us to the concepts of an internal market and diversity of funding in the National Health Service—dull stuff now, but exciting when explained by one of the people who had just helped think of it—and write three pages without a single note. Today was no exception. Madsen began thus:

I was first in Sweden 35 years ago. While I was here, you changed from driving on the left of the road to driving on the right. I well remember the endless confusion during the weekend of the change—the traffic jams, the young men and women with their yellow jackets and flags, and the general excitement of the change.

In retrospect, all Sweden got was to put itself at a disadvantage in a car market that still includes, Britain, Japan, India, and various other important places. I am here again during what may be a process of change, and I can tell you this with pretty near certainty—whatever you may decide in the next few weeks, British driving will continue to be on the left and its politics on the right.

He now moved to explaining the "five tests" set by Gordon Brown—that is, the political device for ruling out British membership of the Euro until it could be shown not to be bad for the economy. This had not been shown. He dwelt on the considerable differences between the British and European financial economies. For example, 70 per cent of British families owned their homes. 80 per cent of mortgages were advanced under variable rate agreements—that is, payments rose and fell with changes in the lending rate set by the bank of England. This was often very unlike the rest of Europe, where people either rented or bought on fixed rate mortgages. In Europe, a change of interest rates could take 18 months to have an effect on consumer spending. In Britain, the change was almost immediate. This made the activities of whoever is in charge of monetary policy far more important in Britain that elsewhere.

Again, he said, the British economy was far more open and flexible than those on the Continent. Even after six years of Gordon Brown, Britain remained by European standards a country of low taxes and light regulation. This had allowed the country to attract up to 40 per cent of all direct inward investment to the European Union as a whole. "In terms of geography" he said, "Britain is just off the coast of Europe. In economic terms, it is somewhere in the mid-Atlantic—half way between Europe and America." Nothing that might seriously damage these facts could be considered.

From this, Madsen passed to the political consequences of joining the Euro—how it would increase the regulatory pressures from Brussels. He concluded:

At the moment, let me assure you, there is an 80 per cent probability that Britain will not join the Euro. If you vote no to the Euro next month, that probability will rise to 100 per cent. Voting no will not leave you isolated in Europe.

Madsen spoke for about 15 minutes, which was just right for the audience. I saw two campaigners for the Euro looking concerned as they discussed his speech. Next, I spoke. For those who are interested, a recording of my speech will soon be somewhere on the Internet. For those who cannot wait, or do not care to endure my loud, flat voice, what I said went roughly as follows:

Dr Pirie has explained very convincingly the reasons why, on both micro and macroeconomic grounds, Britain will not join the Euro. I will now explain why, on political grounds, this will not happen.

You can never under-estimate the vanity and stupidity of politicians—look, for example, at your own Prime Minister. However, what politicians usually want above all is a quiet life. It is perfectly obvious that trying to get Britain into the Euro will give no one in government anything but trouble.

As in Sweden, there must be a referendum before Britain can join the Euro. The first difficulty with this will be the question. This will inevitably cause an argument. No matter how fair the questions seems to one side, the other will claim bias. Probably, the matter will end up in court, and there is no certainty of what the Judges will rule. The politicians may well find themselves going into a referendum with a question not of their choosing.

Then there is the matter of funding. The State will give money to both sides, but this will be greatly supplemented by wealthy activists. The result will be a disadvantage for one side. This might also end in court.

Though the Government might win all cases brought against it, the mere fact of being taken to court would make many of the electors suspect they were being tricked—and this would incline them to vote against joining even if they could think of no other reason.

Then there is the matter of public opinion. For years now, there has been an overwhelming majority against joining the Euro. No campaign is likely to change this. Most likely, the Government would lose. In theory, it could stay in office having lost a referendum. But the moral damage would be immense, and it might destroy the Government.

Even assuming a victory, there would be trouble. In the first place, the opponents of entry would not just go away. They would make loud accusations of cheating. Many would turn out to even louder street demonstrations. Some might even start campaigns of civil resistance. In the second, whatever government took us into the Euro would be made to accept the full blame for the next recession. At present, we all know there will be a recession, but no one seems much inclined to blame Gordon Brown. After all, the Conservatives won elections in 1983 and 1992 as the country was bottoming out in very deep recessions. They lost an election in 1997 about half way through one of the most spectacular booms in British history. Since Margaret Thatcher retaught us our economics, we have learnt to regard politics and economics as largely separate matters. In the Euro, we would blame the politicians for any recession. They took us in, we would insist. The Euro caused the recession, we would assert. We would crucify them.

So what is in it for the Government? The answer is nothing. Tony Blair might look for some reward in Europe—the Presidency, perhaps—but what about Gordon Brown and Jack Straw and David Blunkett, and all the others who would expect to stay behind and live with any resulting mess?

One should never say never. But assuming some understanding of their self-interest, the various members of the British Government have no reason to lift a finger to get the country into the Euro. It will not happen.

Now, I was warned before giving this speech that—to quote John Cleese—I should not mention the War. I do not think I have. But if I have, I do not think you noticed.

I put in this rather odd final point because some other British Eurosceptics had recently visited and had given credibility to the yes campaign by insisting that the European Union was exactly the same as the Europe intended by the German National Socialists. It seems that most Swedes know the scripts of Fawlty Towers by heart, and we decided to throw in the reference so we could head off the usual boring questions about paranoid xenophobia and whatever. It got a big laugh and a round of applause.

Next came Bernard Connolly. He spoke at much greater length - nearly an hour—and concentrated on the details of which he was a master and Madsen and I were not. He spelt out the corruption and incompetence at the heart of European decision making, giving examples of how economic decisions are made for political ends, and how these are made to work no matter at what cost to productive and allocative efficiency. It was a speech worth hearing, but was too long and involved for me to retain the full threads.

Then there was questioning from the floor, but this produced nothing new and is not something I feel any duty to report.

I will not report the comments I received. But I know I did a good job. I looked smart in my suit. I spoke clearly and fluently. I conformed closely to the Madsen Pirie school of public speaking - "stand up, speak up, shut up". I also handled a long interview for the television rather well. I had been willing to bet money that no one in the Swedish media would have bothered to find our who I was. But the researchers had been set to work, and I faced a polite grilling about the Candidlist, about the Libertarian Alliance, and about my reasons for not wanting laws against drinking and driving. I answered all questions honestly and dully—that is, I killed any story that might have been under construction. My experience is that straight answers are always the best. This was no exception.

The efforts today of the three British visitors—and mine were less than a third of the whole—have tended to help the no campaign in Sweden. We have not in ourselves made a great difference. But we have helped to knock down the claims that Britain is about the join the Euro, and that Sweden ought to hurry to avoid being left out.

I would normally be dubious about getting involved in the internal politics of another country. But referenda on the Euro are a different matter. The European Union is a threat to all the peoples of Europe. In the face of this common threat, we help ourselves by helping each other. I am sure the Swedish politicians do not intend to take no for an answer in this referendum. As in Denmark and the Irish Republic, their intention, if they lose, is simply to keep holding new referenda until they get the answer they want. However, this may not work. The Euro is an economic disaster. All the promises made in its favour have come to nothing. If the Swedes vote against joining, the British will not even be asked. If Britain stays out, the whole project may begin to unravel.

The Europhiles often call people like me "narrow little nationalists". We are encouraged to visit other member states of the Europe Union, and to get involved in issues of common importance. We are told to learn that our fellow citizens of the European Union are people just like ourselves, with similar problems and similar hopes. Well, I have taken that advice—and I hope its results will not be pleasing.

Free Life Commentary,
an independent journal of comment
published on the Internet

Issue Number 135
16th April 2005

Free Trade v Fair Trade:
A Debate Organised by Christian Aid
St Margaret’s Church, Westminster
The Evening of Friday 15th April 2005
12:15am – 1:15 am
A Speech Together with Introduction and Brief Commentary
by Sean Gabb

Introduction

I took a telephone call about a week ago from a young man called Leo Bryant. He worked for Christian Aid, he said, and was organising a joint conference with Oxfam on world poverty. Would I like to sit on the panel and debate the issue? The provisional title of the debate was “Free Trade v Fair Trade”. Would I speak for free trade? I should normally have said yes at once. The conference was to be in St Margaret’s Church in Westminster, and would draw an audience of around 700. I had long been scandalised by the socialist takeover of English Christianity, and this would be the closest I might ever get to addressing one of my sermons to a real congregation.

The problem was the timing. The whole event was set for Friday evening, and my debate was to be after midnight. I thought of having to wander round Central London with nowhere to go between the closing of my university and the beginning of the debate, and was inclined to turn Mr Bryant down. But he offered me a bed for the night, and urged on me the size of the audience. So I agreed.

As it happened, Central London was just as cold and lonely as I had expected. But there I finally sat last night, about 20 feet in front of the altar in St Margaret’s. Beside me was Alex Singleton from the Globalisation Institute. Beside him was Alan Beattie of The Financial Times, who would chair the meeting. Beyond sat Martin Khor from Third World Network and Prosper Heoyi from Oxfam. Before me was the large audience I had been promised. They were a fragment of a vast procession that had streamed all evening through Westminster, waving banners and candles and singing the rather feeble stuff that has since the 1960s passed for religious music.

Not all was grim, though. I had some friends there. David Carr, David Goldstone, Paul Coulam and a few others had braved cold and boredom to be there. More would have come, but were appalled by the timing of the event.

We began with Alex Singleton. He put the case for free trade in its most orthodox form. Trade benefitted both parties, he said. It was not an act of charity for us to open our markets to poor countries, but obvious self-interest. As for the poor countries themselves, those that had liberalised their domestic economies and opened up to foreign trade and investment had enjoyed the best growth rates over the past few decades. It was all true and all very well said.

I had expected to speak at the end of the debate. I had agreed with Mr Singleton that he should use the first five minutes to put the case for, and that I should use the next to last five minutes. However, Mr Beattie turned to me and asked me to go next. This was a nuisance. I had been settling into a gentle doze in preparation for the fair traders, and I think it was amusingly plain to the audience how I unprepared I was for immediate action. However, I had written and largely memorised a speech, and I delivered this, cutting where necessary to fit it into the time available. 

Though I was praised afterwards, I know that I am a poor speaker for short occasions. I am not frightened by large audiences. I can speak clearly and grammatically. Give me 40 minutes to outline a case, and I can do a fine job. I am, after all, a lecturer. But I do not shine when it comes to the short speech. So it was last night. I had been awake for nearly 20 hours. I had given four lectures during the day. was half asleep. I found my eyes wandering to my text. If praise was due at all, it was for the content of what I was saying, not for my manner of saying it. Yet the speech was a good one. I can write well.

These reservations being made, here is what I said::

The Speech

If you think that I came here tonight to defend multinational corporations and the international government institutions, you have chosen the wrong person. These are dishonest. They are corrupt. They are incompetent. They have blood on their hands.

But do not suppose for a moment that the world trading order as it actually exists is liberal or more than incidentally connected with free markets. A free market is a place where individuals and groups of individuals come together to transact voluntary exchanges without any backing of government force. To call the actually existing order liberal – or “neo-liberal” – is as taxonomically accurate as calling the old Soviet Communist Party syndicalist. That order is based on tariffs, subsidies and a web of other often invisible regulations. The international institutions are a projection of Western states. The multinational corporations are creatures of these states. They shelter behind the privilege of limited liability. They get their political friends to cartelise markets, and do favours in return.

This is not market liberalism. It is a fraud played on us all by our ruling classes – these being those politicians, bureaucrats, educators, lawyers and media and business people who derive wealth, power and status from an enlarged and activist state.

But this being said, the fair trade solution is easily worse than the problem.  The ruling classes in any country never have at heart the best interests of their subjects. But in the West, we can just about afford corporatism. We still have some heritage of market liberalism. Our ruling classes are to some degree restrained in their predations. That is not so in poor countries. The ruling classes there are naked kleptocracies. All that keeps them from utterly starving their unfortunate subjects is their own idleness and incompetence. The fair trade talk may well be of “import substitution” or “rational planning” or “picking local winners”. The reality will be to turn poor countries into sealed territories ruled by the law of the jungle – a jungle in which only the well-connected will survive. Presented in the lilting, caring tones of “helping the poor”, what we have is nothing more than the old Nazi policy of autarky.

Let me give one example of how fair trade works in practice. On the 1st January this year, import taxes were raised in Kenya and in several other African countries on second hand clothing from the West. The stated purpose of this was to give local textile manufacturers the chance to grow big enough to face foreign competition. Of course, the textile interests will never be able to face open competition. Infant industries never grow up. Protect them, and prices rise. Money that would otherwise be saved and invested is spent on paying the higher prices. Money that would otherwise be spent on other goods is spent on paying the higher prices. The country gains a sector in which it may have no comparative advantage—or in which it might have a comparative advantage only in less well-connected hands. Those sectors in which there might be a comparative advantage suffer. But the lucky capitalists who are protected make big profits, and their friends in government collect the usual gifts. And the people at the bottom? Norman Nyaga, a Kenyan Member of Parliament can answer here. Writing in The Kenya Times last month, he accused the Government of deliberately rigging the textile market in favour of some foreign investors. He said the effect would be to damage the livelihood of 10 million Kenyans who work in the second hand clothing sector, and to lower the incomes still further of the 56 per cent of Kenyans who live below the official poverty line and who must buy second hand clothes or go without.

I do not support the present system of world trade. But give me a straight choice between this and the economics of the jungle that is fair trade, and I will choose the present system. Global corporatism may be unfair. But it does at least allow some wealth to be created. It does allow at least some rational economic calculation. Fair trade simply gives even more power to politicians and bureaucrats and favoured business interests in poor countries—that is, to the very people and interests that made and have kept these countries poor.

If you really want to improve the lives of the poorest, forget all this “kumbaya socialism”—which is a cocktail of bad economics and bad theology, held together by self-righteous candle-waving. Either settle for what we have —which, unfair as it is, delivers something—or campaign for a system of real voluntary exchange. Fair trade can never be fair. But free trade can be free.

Commentary

Had I been giving a lecture rather than a brief speech, I could usefully have elaborated on some of my points. I have written at length elsewhere about the political and economic implications of the Christian faith, and so will not repeat myself here. But I grow increasingly convinced that allowing the creation of joint stock limited liability corporations was one of the greatest legislative mistakes of the 19th century. Their existence is based on a separation of ownership from control. The owners are released from all responsibility. The controllers form a separate class of corporate bureaucrats little different in outlook from civil servants. The usual psychology operates. They will commit immoral acts for their organisations they might not consider committing for themselves. The owners will assent. The legal privileges and unlimited lifespan of these corporations let them grow to enormous size and wealth. The opportunities exist for highly effective immorality. Collectively, they become part of the state apparatus, and work to destroy true, unregulated enterprise.

These corporations could not exist in any natural economic order. I have heard other libertarians argue that they might emerge without legal privilege on some loose contractual basis. But I do not agree. The shareholders would still be liable in tort, and that alone would deter them from any involvement with a business that they did not personally control. As for the utilitarian argument, that large undertakings need large companies, I also disagree. So long as it showed an acceptable return on investment, there is no project too big to be taken on by clusters of sole traders and partnerships. No doubt, things like the Channel Tunnel would not have been built – but I fail to see how not having that would have made the world a poorer place. Even if some highly valuable projects might not be undertaken, their lack would be compensated by the greater general innovation to be expected in an order of small, unregulated firms.

Indeed, the matter of what to do about the corporations is more interesting to me than world poverty. As I said in my speech, people in places like black Africa are poor because they have maniacally corrupt and oppressive governments. They would do better even with the most cartelised global corporatism than left in the clutches of their own rulers. And that is it. But how can this corporatism be replaced by a system of voluntary exchange between legally responsible small firms? I think I have a few answers here, but will give these at another time.

Outside the church, I bumped into the personal assistant for one of the Conservative leaders. The usual sort of well-dressed, well-connected young man on the make who appeals to such people, he insisted I might have brought a few people over to my side had my speech been less “abrasive”. I replied by noting how eight years of being soft and gentle had got his Party nowhere. I also pointed out that five minutes speaking time is best given up to blunt expression, when what is expressed is probably new to the audience. I know that a few mouths had fallen open at my dismissal of “self-righteous candle waving”. But that effect was my intention. I wanted the audience to go away with a few memorable phrases. These might eventually provoke a chain of thought in the hearer’s mind, or be passed on in conversation to someone else more receptive.

There are times when arguments can be won by moderate expression and compromise. But this was not such a time. It was not even a time for argument. An hour chopped into little blocks of comments from the panel and questions from the audience does not allow for argument in any meaningful sense. As said, it was a time for blunt expression.

I wish I had been able to stay longer and have some real arguments, but I could now feel great waves of tiredness sweeping over me. So I went off to bed. The audience remained in the church, singing responses in a language unknown to me and set to music that might have been more suited to lullabies for an idiot child. The rest of the procession had taken to resolute candle waving, and had moved down Whitehall to Downing Street, where hopes were expressed of waking up Tony Blair. A pity, I thought at the time, the Salvation Army had not sent a few of its brass bands to join in the parade.

And that is it. A fuller account would mention the grotesque nonsense uttered by the other speakers. They had obviously never opened an economics textbook in their lives. Nor had most of the audience that so warmly applauded their nonsense. But I cannot be bothered to record any of what was said on the other side. There will be a DVD of the whole event, and this will speak for itself. 

On balance, it was worth attending. I waved the flag for the Libertarian Alliance. I handed out several dozen business cards. I might be invited to speak at other events where I can outline my objections in more detail to the heresies of theological socialism. Together with Mr Singleton, I might even have started a few trains of thought in unknown minds.

Free Life Commentary,
A Personal View from
The Director of the
Libertarian Alliance
Issue Number 169
10th March 2008

A Day with UKIP
by Sean Gabb

I drove down to Exeter last Saturday the 8th March 2008, to speak at a United Kingdom Independence Party rally. If I had bothered checking in advance that the round journey would be 600 miles, I might have declined the invitation. I am glad, though, that I did not check, and that I did accept.

Imagine, if you can, a party rally, put on by one of its regional branches, and attended by several hundred decent, ordinary people. Imagine, then, being able to watch a dozen or so people called to the podium to speak fluently and with passion about what they truly think. Imagine also being able to mingle throughout with the leaders and elected representatives of that party. Imagine all this, and you have UKIP.

I watched parts of the Liberal Democrat conference on television yesterday. As with all the Regime Parties, these people talk about the need for commitment and fundamental change, and then carefully avoid saying or promising anything that might resemble either commitment or change. What I saw on Saturday with my own eyes was politics as it always used to be in England.

I last voted Conservative in 1997. Since then, I have voted UKIP whenever possible. So far, I have done this as a means of punishing the Conservatives for being so dreadful. I will now vote UKIP because I like the party and because I admire its leaders.

I will not summarise my speech, as I made a video record of it, and of the one made by Marc-Henri Glendening of the Democracy Movement. There was some coordination between us, and so our speeches are worth watching one after the other. I am never happy with filming in a room where public address equipment is in use, but the sound quality is adequate. Our speeches are available courtesy of Google Video. In time, I hope, UKIP will make its own video footage of the whole rally available on-line.

Now, though it was right to say how much I enjoyed myself last Saturday, the real purpose of this article is to confirm in writing what I did say then several times. I was approached by one very senior person in UKIP and by someone who has the ear of other senior persons, and asked if I would like to stand in the European Elections, and with a position on the party list that would give me some chance of being elected. I said no, but am not sure if my refusal was taken as more than false modesty.

There would be certain advantages in having me as a candidate. I am a clear and prolific writer. I speak reasonably well without notes. I can think on my feet. I know how to handle the media. I am not that old, nor particularly displeasing to look at. I have shown no tendency as yet to megalomania, and most of the things in my private life I would not have known are more comical than scandalous.

This being said, my answer is still no. I do not wish to stand with any party endorsement in any election that I might win. Here are my reasons.

First, I am Director of the Libertarian Alliance. This is a non-party organisation. I accept that we have had our greatest impact during the past thirty years on the youth movement of the Conservative Party, and that we now have a certain influence within UKIP. But we do have supporters in the Labour and Liberal Democrat Parties. For all these parties are loathsome at the top, there is some chance of libertarian pressure from the membership. And there are still some libertarians who do not share my opinion of the European Union. It is one thing for the Director of the Libertarian Alliance to say what he thinks as an individual, but quite another for him to be a UKIP candidate.

Second, I have certain qualities that, while useful for directing the Libertarian Alliance, rule me out as a party politician. I am poor at giving and taking instructions. I am not much of a team player. I have little charm, and am easily bored with the ordinary things of life. What interests me is often seen by others as unimportant or obscure. In politics, I would be another Enoch Powell, but without the brilliance.

Third, there is the nature of my opinions. I may believe in withdrawing from the European Union, and I may be a firm patriot. But I have also spent much of the past thirty years trying as clearly and persuasively as I can to say things that most would regard as not on but considerably beyond the lunatic fringe in politics. I believe in legalising all drugs. I am not for decriminalising possession of small amounts of cannabis for personal use, or for diverting the enforcement budget to "education". I would make it no more illegal to buy a packet of heroin than it is now to buy a packet of tea; and I would not allow the authorities to spend a penny of our money on telling us whether and how to use it. I believe in repealing all the race relations and other hate crime laws. I would allow employers and landlords to qualify their advertisements with phrases like "niggers and faggots need not apply". I do not believe possession of child pornography should be a crime. I do not even believe it should be a crime to publish child pornography here that was made abroad by and with foreigners.

I like to think I can justify these opinions - plus all the others I cannot be bothered to mention or may have forgotten that I hold. But it should be clear that no party mad enough to adopt me as a candidate would get a fair hearing ever again in the media.

And so, I wish UKIP well. I wish it more than well. It is our last and our best hope in politics. I enjoyed last Saturday in Exeter. I look forward to the weekend after next at another rally in Morcambe. If I am seriously asked, however, to do more than this, my answer must be thanks but no thanks.

Free Life Commentary,
A Personal View from
The Director of the Libertarian Alliance
Issue Number 215
21st November 2011

Review by Sean Gabb
Time to Say No:
Alternatives to EU Membership

by Ian Milne
Civitas, London, 78pp, £8.00
ISBN: 978-1906837327

In its supporting evidence, this is a very useful book. In its overall purpose, it is quite useless. Its former is the claim that British membership of the European Union does not pass any kind of cost-benefit analysis. Our trade outside the EU has been growing much faster than our trade within. This will continue for at least the next generation, as the main EU countries are demographically in decline and, on the whole, stagnant economically. Indeed, taking into account direct and indirect costs of membership, the gains from being part of the Single Market could be negative. In purely economic terms, Britain is better off out.

The book is worth reading for its short but authoritative stating of these arguments. But I will now explain why it is generally useless. Mr Milne imagines a referendum, in June 2014, on British membership of the EU. He imagines this will go in favour of withdrawal, and that the governing and opposition parties work harmoniously together, and with the EU institutions, for a phased two year withdrawal as required by the Treaty of Lisbon. After this, the country can be free again to govern itself.

The problem with this scenario is that its main assumption is absurd. This country is not ultimately governed from Brussels. We are not victims of foreign control. It is a false belief that our own liberal and therefore benign institutions have been checked by the European Commission, and that leaving the EU will have much the same effect as removing a stone from a horse’s hoof. The truth is that, just as before 1973, this country is governed from London, and by our own ruling class. All that EU membership has achieved is to help make the exercise of power by this ruling class less accountable.

Since the final disappearance, around 1980, of decency and regard for the public good in our politics, every tax and regulation and change in the law had been made for the benefit of some wealthy interest group. The political wing of our ruling class has been acting on behalf of its economic wing. If there have sometimes been disputes between and within these wings, we should not deceive ourselves on the essential unity of state and big business. Now, this is an actual constitution that is best hidden from democratic scrutiny. And so we have had a growth of supranational organisations to hide the reality of how power is exercised. Though by far the most prominent in this country, the European Union is just one among many of these institutions.

Let me explain this abstract point with an actual example. I do not think anyone of importance in Brussels has ever cared what system of measurements we use in this country. Yet, starting in 1995, we suffered a rapid and brutal metrication. By 2000, it could be a criminal offence to sell a pound of bananas. Anyone who complained about this was referred to an EU Directive from 1989 that allegedly tied the hands of British politicians. What seems really to have happened, though, is that the big four supermarkets had found a way to hobble their smaller competitors. Metrication required new measuring instruments. More importantly, it needed an expensive retraining of staff to work at commercial speed in so far unfamiliar measurements. The big supermarkets could spend millions on this without noticing. It was a different impact on small grocers.

If it had needed a Weights and Measures Bill to go through Parliament in the old way, there would have been an outcry, and someone important might have found it worth discussing who was pushing for this. Instead, the law was changed without meaningful reference to Parliament, and everyone who disagreed could rail against the European Union in general, while the actual projectors and beneficiaries of the change could walk away smiling.

And that is how we are governed – in little things and in great. The British Government is practically at liberty to enforce or not enforce any EU law it chooses. It does not comply with a Directive from the 1970s that seems to require identity cards. It does not comply with another Directive that, by implication, seems to forbid it from prohibiting civilian ownership of handguns. If our Government does choose to follow EU law, it is either because that particular law benefits – or has even been procured by – some privileged interest in this country, or because the only interests actually damaged are outside the ruling class.

This is why, regardless of which party is in office, and regardless of what the party leaders may have said in opposition, every British Government since 1973 has been committed to EU membership. And this is why the withdrawal scenario given by Mr Milne is impossible. No referendum will be allowed. If one must be allowed, the question will be slanted – for example, giving a “compromise” option of renegotiation to divide the anti-EU vote – and the mainstream media and whole of big business will argue for staying in. If there is a vote for withdrawal, the referendum will simply be rerun six months later.

The problem with most Eurosceptics is still their assumption that leaving the EU will allow us to solve all our problems. The truth is that the EU is not the cause of our problems: it is merely another symptom of how we have failed as a nation. If we are not to fade away as a distinct nation before the middle of this century, we need a revolution. Undoubtedly, one of the first acts of a revolutionary government must be immediate withdrawal from the EU – just as it must be withdrawal from every other supranational institution. But regarding withdrawal as of supreme importance in itself is the political equivalent of trying to cure chicken pox by popping all the blisters.

Yes, Mr Milne has probably got his sums right. If he really believes our masters will allow us a genuine voice about EU membership, or will listen to that voice, he needs to think again.

And one final point. I do sound in this review as if I am simply copying Richard North. I do greatly admire Dr North. He has said much more than I have about the European Union, and knows things in detail that I at best only dimly perceive. There can be no shame in putting in my own words what he has persuaded me to believe. But I have reached these opinions independently of him. For example, here they are, given ten years ago in much their present form. This is a moderately important point to make. When one reasonably intelligent person is persuaded by another, it adds some weight to a conclusion. When that conclusion is reached independently, the weight is increased. By all means, we could both be wrong. But this final point is worth making.

Free Life Commentary,
A Personal View from
The Director of the Libertarian Alliance
Issue Number 195
17th June 2010

Reflections on the 2010 Conference of the
Property and Freedom Society
by Sean Gabb

I have never bothered asking what persuaded Hans-Hermann Hoppe to invite me to the first conference of the Property and Freedom Society in 2006. I received his invitation in about the February of 2006. It looked interesting – not least because it was to be held in Bodrum, which is the modern Turkish name for Halicarnassus, the birthplace of Herodotus and otherwise famous for its Greek theatre and the remains of the great Mausoleum. However, Chris Tame was dying in hospital, and I decided that my place was at his side.

“Oh no, it isn’t,” Chris answered from his bed. He sat up and stabbed at the print-out of the invitation. “I’ll be dead long before May. Whatever the case, you’d be mad to turn this one down.” He took me through the names listed in the invitation, pointing out their eminence within the conservative and libertarian movements. Finally, he reminded me of the key importance of Professor Hoppe within both movements, and his importance in his own right as an economist and philosopher. It was my duty to attend, Chris announced. If he were not confined to his death bed, he would go with me.

And so – Chris now dead, just as he had predicted – I set out in the May of 2006 for Bodrum. I wrote a longish account at the time of this first conference of the Property and Freedom Society, and see no reason to say more about it now. But Chris was right. It was a significant event in my life. Until then, I had long admired from a distance, but never met, men like Professor Hoppe and Paul Gottfried and Stephan Kinsella. Now, in the luxurious surroundings of the Hotel Karia Princess, and in the perfect weather of the Eastern Mediterranean, I could sit down to dinner with them and get to know them. I was invited back the following year, and the year after that, and the year after that. Last week, I went again, and can report that this fifth conference was every bit as interesting and productive as all the others.

PFS 2010 - Hans-Hermann Hoppe, Welcoming Remarks. The PFS - After Five Years
from Sean Gabb on Vimeo.

Because I made video recordings of all the public proceedings, I do not need to give a close account of all the speeches. They will, in the next week, all be uploaded to the usual place for anyone to see. But it is worth discussing professor Hoppe’s opening speech, The Property and Freedom Society: Reflections After Five Years – now published by the Libertarian Alliance as Personal Perspectives, No.25. In this, he explains why he set up the Property and Freedom Society and what he hopes it to achieve. He begins with a critique of the mainstream libertarian and conservatives institutes. It is, for example, now 63 years since the first meeting of the Mont Pelerin Society, and it is hard to see what good this has achieved. F.A. Hayek cannot be wholly blamed for its failure, since he was never wholly in charge. But it was, from the start, a place where limited statists were able to mingle with avowed advocates and beneficiaries of fiat law and paper money. And any scheme for limiting either of these is impossible in principle and has failed in practice. The tendency of fiat law is to become ever more arbitrary and burdensome. The tendency of paper money is semi-permanent inflation. Both are means for the ruling class to tighten its control on society. The State cannot be limited. At best, those directing it can be persuaded to pick and choose among various schemes for making their control easier or less immediately destructive.

The very success of organisations like the Mont Pelerin Society to engage with governments is a sign of their failure. In the past, ruling classes were able to neutralise the far more potent threat to their control posed by religion. They have used much the same methods to deal with the limited state movements. As with the churches, they have been bribed and flattered into moderating their critique of the State, and even co-opted as some kind of intellectual fig leaf.

Professor Hoppe saw this clearly in the 1990s, when he attended three meetings of the Mont Pelerin Society. These were filled with politicians and central bankers and general clients of the ruling class. There was no discussion allowed of the American State’s military aggressions, or of its monetary corruptions, or of the multicultural discourse that is the main current legitimation ideology of the State. His own attacks on democracy and support for constitutional monarchy were considered scandalous and “confrontational”, and he has not bothered going back.

His experience of the John Randolph Club was slightly more positive. This was largely a Murray Rothbard front organisation, where conservatives and libertarians were able to come together and discuss their equal, of sometimes different, objections to unlimited state power. It was also a place where members of each movement could learn from the other. Libertarians, for example, could overcome the indifference to the cultural and historical underpinnings of liberty that often proceeds from their emphasis on economics. In turn, the conservatives could learn some true economics.

Ultimately, though, the John Randolph Club fell apart because of the failure of many of its conservative members to radicalise. They were never able to put aside their fantasy of somehow capturing the institutions of an extended state and using these to impose a conservative authoritarianism. And they would not reconsider their support of stupid economic policies like protectionism and soft money.

It was on account of his disappointment with even the least useless of the other policy institutes he had known that Professor Hoppe decided to set up the Property and Freedom Society. Its purpose was not to engage with the ruling class or its various clients, but to have nothing whatever to do with them. It would exclude politicians and economic illiterates. It would reject the State and all its works. It would instead seek to foster a counter-culture that was opposed both to the State and to the legitimising ideologies of the State that many libertarians have not been able to recognise for what they are. The Property and Freedom Society would provide a space within which representatives from a range of traditions would be able to discuss the principles of a free market natural order, and to see the State more clearly than is normally possible as nothing more than a gang of bandits surrounded by various applause societies and useful idiots.

The Property and Freedom Society was conceived as a kind of salon – a place where intellectuals from various traditions could come together as friends, and share and harden their own opposition to the State and its legitimising ideologies. Presided over by him and by his wife Gülcin Imre, the Salon Hoppe would surely have it impact on the movement, and on the world at large.

This was the essence of Professor Hoppe’s opening speech. And his movement has been a success in the way that he intended. Its public proceedings are the speeches, and I am glad that I have been able to help make these available by making video recordings of them and putting them on the Internet. I regret that my recordings of the first two conferences were incomplete. I also regret that my fuller recordings of the next two were marred by technical incompetence. Some of these have adequate sound, but many are hard to follow, either because I relied on the internal microphone of my video camera, or because I was ignorant of how to place an external microphone. This year, I am happy to say, I was more successful. All the speeches have adequate sound, and many have good sound. A problem I have not been able to overcome is that, outside of England – in both Turkey and Slovakia – recording on mains power with an external microphone is inseparable from a feedback hum. The morning sessions I was able to record on battery only, with partial recharges during the coffee breaks. Afternoon sessions required mains power. I can filter out much of the feedback hum, but cannot wholly eliminate it. Whatever the case, the speeches all have clear sound, and I shall eventually buy additional batteries or a better video camera.

        

PFS 2010 - Mustafa Akyol, Are Islam and Capitalism Compatible? from Sean Gabb on Vimeo.

But, as said, because they have all been recorded, I do not need to describe the speeches. If I have to acknowledge any star of the conference, I suppose it would be Mustafa Akyol, on Islam and Capitalism. He is a Turkish journalist who is completely fluent in English, and is a libertarian, and, it seems, is a fairly devout Moslem. His speech is an informed response to the frequent claim in the West that Islam is a religion only for men with frightening beards and wild eyes and a taste for suicide bombings. It is not. If is, of course, The Other – the historic enemy of Christendom, that subdued three quarters of what had been the Roman Empire, and came close more than once to taking the last quarter. No one who is not of that Faith can take a sentimental view of Islam. At the same time, Islam produced a great and often admirable civilisation that had room for much intellectual freedom and for extended commerce. If the accidents of immigration have made Islam in Europe a religion for displaced peasants with lavish funding from Saudi puritans, that does not make Islam in the wider sense other than a religion compatible with as high a degree of enlightenment as Christianity. Islam is compatible with a free market order. The development of a market system in Turkey has been associated with a recovery of Islam in the public sphere, and this must be recognised by anyone who wants to see through the fog of propaganda that has been raised to lead us into another world war.

I liked Paul Gottfried on Herbert Marcuse, and on Marxism in general. I liked Olivier Richard on the economics of inflation. And I liked everything else. To single anyone out other than Professor Hoppe and Mr Akyol would be – as I keep saying – superfluous, bearing in mind that everything is on-line, and unfair to the other speakers.

Naturally, this does not prevent me from mentioning my own speech. I was asked to speak about the Second World War and why it should have been avoided. I did this rather well. Mrs Gabb, who came into the conference room to watch me, was not impressed. She said it all sounded too much like an advertisement for the novels of Richard Blake. But I have watched my speech twice now on video, and I still think it was rather good. I dislike reading from a text. Even without one, my voice tends to dullness, and my general delivery is wooden. Since I can speak fluently enough without, I like to avoid having either a text or notes in front of me. At the same time, I do like – other commitments allowing – to produce a text in advance. This lets me lay down the structure of what I want to say. It also removes any suspicion that I have just turned up without any preparation to deliver a speech that is only clear by accident.

    

PFS 2010 - Sean Gabb on the Second World War from Sean Gabb on Vimeo.

Because both text and video are available, I will not go again over the main part of what I said. What I do think worth mentioning is the point that came into my head for the last five minutes of the speech. This is the lack of any sustained cultural production within the conservative and libertarian movements. We have always been strong on analysis and criticism. We have our philosophers and economists and historians, and these are among the best. We are not wholly without our novelists and musicians and artists. But we have not so far excelled in cultural production, and have mostly not considered this of comparable importance to uncovering and explaining the workings of a natural order. So far as this has been the case, however, we have been mistaken.

The socialist takeover of the English mind during the early 20th century was only in part the achievement of the Webbs and J.A. Hobson and E.H. Carr and Harold Laski and Douglas Jay, and all the others of their kind. They were important, and if they had no written as they did, there would have been no takeover. But for every one who read these, there were tens or hundreds who read and were captured by Shaw and Wells and Galsworthy and Richard Llewellyn, among others. These were men who transmitted the socialist cases to a much wider audience. Just as importantly, where they did not directly transmit, they helped bring about a change in the climate of opinion so that propositions that were rejected out of hand by most thoughtful men in the 1890s could become the received wisdom of the 1940s. They achieved a similar effect in the United States, and were supplemented there by writers like Howard Fast, and, of course, by the Hollywood film industry.

More recently in England, the effect of television soap operas like Eastenders has been immense and profound. Their writers have taken the dense and often incomprehensible writings of the neo-Marxists and presented them as a set of hidden assumptions that have transformed the English mind since 1980. No one can fully explain the Labour victory of 1997, or the ease with which law and administration were transformed even before them, without reference to popular culture.

I do not wish to disparage novelists like Ayn Rand, who was a libertarian of sorts. At the same time, what I have in mind is not long didactic novels where characters speak for three pages about the evils of central banking. What I do believe we need is good, popular entertainment of our own creation that is based on our own assumptions. I think the most significant objective propagandist of my lifetime for the libertarian and conservative cause was the historical novelist Patrick O’Brian. I have read all his historical novels, some more than once, and I do not think he ever sets out an explicit case against the modern order of things. What he does instead is to create a world – that may once have existed largely as he describes it – that works on different assumptions from our own. If this world is often unattractive on account of its poverty and brutality, its settled emphasis on tradition and on personal freedom and responsibility has probably done more to spread the truth than the Adam Smith Institute and the Institute of Economic Ideas combined.

I would never claim that Richard Blake is in the same league as Patrick O’Brian. But he is significant so far as he is a libertarian novelist who has managed to find a mainstream publisher. His latest novel, Blood of Alexandria, is still more explicitly libertarian than his others, and he deserves all the encouragement that our movement can provide. Indeed, someone else who deserves our encouragement is Jan Lester, one of the most significant figures in the Libertarian Alliance and in the Libertarian Alliance – yes, this is not one of my typing mistakes! The Libertarian Alliance has just published his play, The Naked Politician, as Philosophical Notes, No.82. This needs a performance. Anyone who can help with this is doing the cause of right, truth and justice as great a service as by funding the distribution of the more abstract works of our movement.

But this really is enough of the public proceedings of the conference. Professor Hoppe spoke of a salon, and this works at least as well through private conversations as through formal speeches. And one of the few rules of the Property and Freedom Society is that there are to be no limits on what anyone cares to discuss over lunch or dinner. Sadly, these were private conversations, and I might find my own conversations in Bodrum far less open and interesting in future if people thought their words were about to be transcribed and published to the world. One part of a long conversation, though I can reveal. I was at dinner with some Turks who explained their bitter humiliation at being kept out of the European Union. They listened patiently to my explanation that they were lucky to have avoided that horrid embrace. Their reply was that it was a matter of national pride. They could put up with being excluded from a club made up of great nations like France and Germany and England. They could accept the inclusion of the Greeks – a matter of historical connection with Europe. But to be passed over in favour of disreputable mafia states like Romania and Bulgaria was too much to be tolerated. If I wanted to understand Turkey’s rising disillusionment with the West, and its recent closeness with the Arab countries of the Middle East, I needed look no further than its rejection by the European Union.

But this is all I think I can say. If you want to know more about them, you will have to go to Bodrum yourself next year!

I should say something now about the location of the Property and Freedom Society conferences. The Hotel Karia Princess is a luxury hotel in one of the quieter parts of Bodrum. It is about a ten minute walk from the harbour and shops of the city, and just a flight of steps away from a discreetly-placed supermarket that is most useful for those things that are not provided by the hotel. With its swimming pool and large garden and its gymnasium and Turkish bath – the hotel is a world in itself, and many guests – some go every year for a month – and conference attendees hardly ever go outside it.

Even if it were not owned and run by libertarians, I would recommend the Hotel Karia Princess for the excellence of its location and the quality of its service. But it is owned and run by libertarians, and I suggest that any libertarian or conservative who is planning a Turkish holiday should consider booking a room here. It has all that anyone could desire for a memorable holiday. My only criticism is the perhaps excessive fondness displayed by the staff during my stay for the Overture to Eine Nacht in Venedig by Johann Strauss, and for the Waltz based on themes from Emmerich Kálmán’s Gräfin Mariza. These were a welcome change from the “elevator music” played in the public areas of other hotels. And there was no coverage at all of the dreadful World Cup. Even so, I might recommend a more balanced repertory of the light classics.

Since all the hyperlinks will be stripped from this article when it is posted out, here are the full details of the hotel:

Hotel Karia Princess
www.kariaprincess.com
Eskiçeşme Mahallesi,
Myndos Caddesi No:8
48400 Bodrum
Turkey
Tel. :+90.252.3168971
Fax : +90.252.3168979
E-mail: reservations@kariaprincess.com

Speaking of Turkey in general, I do most highly recommend the country to the more discriminating traveller. As with Islam, I do not take a sentimental view of the Turks. Historically, they have been implacable advocates of every cause to which they attached themselves. This being said, they have never been other than a brave and honourable race. They are justly proud of their country. To anyone who does not attack Islam or the memory of Kemal Ataturk, and who refrains from going about stark naked in public, they are as straight and welcoming as could possibly be desired. Since I regard Ataturk as a great man – if somewhat flawed – and have no desire to shock the religious sensibilities of others, and am far too modest to expose my flesh to the world, I am not inconvenienced by these limitations.

I cannot speak for those parts of the country remote from the sea. But the parts of Turkey I have seen strike me as entirely safe. The reputation of Turkish drivers is undeserved. On three of my visits with Mrs Gabb, I have hired a car and driven for several thousand miles. I have never once seen an accident, and the other cars are far less battered than in Greece. The main problem on the mountain roads is finding the right points for overtaking the lorries that rumble uphill at about 20mph. On one occasion,, we ran into a giant storm on the mountain roads between Aydin and Mugla. For half an hour, it was like driving in a car wash, and the road was an inch deep in water. But everyone else on the road slowed to a steady crawl and stayed safely in lane.

The beaches within easy reach of Bodrum are mostly either crowded or dirty. The beach at Bitez is both. We spent an hour there, struck by the omnipresent smell of dog mess and the stains on the cushions provided by the local restaurant. Unless you are a lower class Englishman or an elderly German of limited means, my advice is to avoid the place. There is an excellent beach resort outside Fethiye, a few hours south of Bodrum. We arrived rather late in the day, and so had less benefit of the place than we might have liked. Otherwise, boats can be hired for about £200 a day. These will take you to places inaccessible by road, where you can swim in the warm, sparkling sea.

So far as sightseeing is concerned, I am less fond of Ephesus than I ought to be. Though grand, it is normally filled with tourists. We went there in 2007. I enjoyed sitting in the theatre where St Paul preached, and the public toilets have a sociological interest. But it rained hard while we were there, and our most memorable experience was trying not to fall down on the wet marble pavements.

But I do recommend Aphrodisias, about four hours through the mountains from Bodrum, and hardly ever visited. In ancient times, this was the provincial capital of Caria, and its sudden destruction by an earthquake in the 7th century – plus the quality of the marble used for its construction – has left ruins of great freshness and magnificence. The reconstructed gateway to the Temple of Aphrodite is particularly impressive, as is the partially reconstructed Temple of the Emperors. There is also an immense stadium on the outskirts of the city, part of which, I regret to say, was partitioned off in later antiquity for gladiatorial combats.

On all my visits to the ruined cities of what used to be Asia Minor, I have been struck by the great wealth of the region. Judging the wealth of past ages by modern standards is a worthless activity. But I do not think Western Europe had anything until fairly recently to compare with the civic life of the Asiatic Provinces of the Roman Empire. I will not boast about my knowledge of the ancient languages. I have much trouble with reading inscriptions. The ancients never separated words, and used many abbreviations that I am not learned enough to understand. But I was struck by the fact that almost every carved block in Aphrodisias is covered in writing – dedications, funerary inscriptions, public memorials: this was a civilisation based on the written word, and those who carved their words into stone did so in the assurance that their civilisation would last to the end of time. It is both interesting and melancholy to walk streets that once swarmed with people, and to wonder how London or Paris might appear to the travellers of some remote future in which our own civilisation has also passed away.

Because, yet again, we arrived rather late in the day, we had to hurry about the city. We missed the public baths and the theatre. However, we did find time to look in the museum. This is well worth seeing. Perhaps its most interesting exhibit is a statue of a Governor set up in about the year 500. I had never before seen a public statue from so late a time in antiquity, and, though much influenced by the stiffness of Christian art, this shows a strong survival of the classical tradition. For this alone, the trip was worth the drive.

We have been twice to Pamukkale, anciently known as Hierapolis. Both times, we arrived late and without any hope of seeing the whole of what was once a large city – a large city surrounded by one of the biggest cemeteries in the world. Mrs Gabb, on both occasions, was much taken with the limestone deposits that have given the whole site the appearance of a snow field. I was more interested in the bizarre paganism of the city. This was a centre for the worship of Cybele, whose priests would castrate themselves in a religious frenzy. They were notable for their visits to the Plutonium, which is a fissure in the rocks through which poisonous gas escapes. Though more visited than Aphrodisias, This is also far less crowded than Ephesus, and repays a visit.

One day, we shall pay visits to Miletus and to Laodicea. It would also be interesting to find some Turkish towns that have not been stripped of their old charm by modern development.

I could say much more. I could go into detail about the immense hospitality shown by Professor Hoppe and by his wife Gülcin Imre. I could mention the meals, the visit to the fishing village, the boat trip, and all the rest. However, this has already been a long article, and Stephan Kinsella has already written at length about these things. And so, I commend Turkey and the Hotel Karia Princess. And I commend Hans-Hermann Hoppe and the Property and Freedom Society. Long may their salon continue to shine from Bodrum!

Free Life Commentary,
A Personal View from the Director of the Libertarian Alliance
Issue Number 184
18th June 2009

Book Review by Sean Gabb
Organization Theory
Kevin A. Carson
Booksurge, 2009, 642pp, $39.99
(ISBN 9781439221990)
Available from Amazon

I will begin my review by stating its main conclusions. These are that Kevin Carson has written one of the most significant books the libertarian movement has seen in many years. I do not agree with everything he says here. I do not suppose any libertarian will unreservedly accept what is said. Even so, I doubt if there is a libertarian who can read this book and not, in some degree, have his vision of a free society enriched and even transformed by it.

Summarising an argument that is worked out over more than six hundred pages is not easy. However, Mr Carson begins by observing that, while economic theory seeks to analyse the behaviour of individuals and small groups within a market system, the economic reality is a world dominated by large corporations within which prices are largely administered and there is an absence of competition.

He asks why this should be so. Why is there so much substitution of hierarchy for individual contracts? The standard answer, provided by Ronald Coase, among others, is that large firms are more efficient than small firms. The further the division of labour is carried, the larger the potential economies of scale. In an open market, however, the division of labour involves transaction costs – these being the costs of negotiating exchanges between many different suppliers of goods and services. Within a firm, these costs are not abolished, but are much reduced. Therefore, a firm will expand to the point where the cost of organising one more transaction within itself is equal to the cost of letting that transaction be made on the open market.

According to this analysis, firms grow large so far as their lower internal transaction costs make them more efficient than their smaller competitors. And there is an obvious temptation to regard size in a market economy as evidence of greater efficiency.

Against this analysis and its conclusions, Mr Carson argues that the point at which internal transaction costs become equal to the costs of transactions via the market has been artificially raised by state intervention. There are few objective benefits in size. Lowest long run average cost is often achieved by rather small scale production methods. There is little evidence that large factories are more efficient than small factories. There is little evidence that large firms are more innovative than small firms. Anyone who looks inside a large firm will see information and management and resource allocation problems similar to those described by Hayek and von Mises in their work on socialist calculation.

For two hundred years, economists have been content to repeat and elaborate on the example of the pin factory described by Adam Smith – in which the operations of making a pin are divided among many workers, thereby raising average output. In fact, these efficiencies can be realised just as easily by dividing the operations so that individual workers perform them one after the other.

If large firms predominate, it is not because they are the outcome of free market forces. Rather, they are called into being by systematic distortions of the market that amount to a subsidy on size. These distortions include the following:

First, there is subsidised transport and communication infrastructure. According to Mr Carson,

[i]t’s… important to remember that whatever reductions in unit production cost results from internal economies of large-scale production is to some extent offset by the dis-economies of large-scale distribution.[p.34]

The British and American railway networks, for example, were built in the nineteenth century by private companies. However, investment was only made profitable by compulsory purchase laws, or actual grants of land. Without this help, the returns on investment – never very exciting in any event – would in at least most cases have been negative. Once built, though, the railways in both countries enabled the growth of national wholesale and retail markets that could now be served by large firms. The modern road networks were mostly paid for out of taxes, or with loans services by the taxpayers. They did for the concentration of enterprise in the twentieth century what the railways had done in the nineteenth. Distribution costs have thereby been externalised on other users or on the taxpayers.

Again, there is the building of ports and blue water naval defences and the forced opening of foreign markets. Without the very costly work of the British and American navies over the past few hundred years, it would not have become so cheap and convenient to carry goods about the world – a carrying trade that also widens markets and thereby subsidises the emergence of the large firms best able to benefit. There are foreign policies that make other countries more stable markets for large firms. How the Americans organised their southern neighbours for the convenience of the United Fruit Company needs no more than a mention. There is also the hugely expensive oil-based Middle Eastern policies of the British and American Governments during the past hundred years. Even with all the taxes heaped on it, petrol may have been made far cheaper than it would have been in the absence of government intervention. Perhaps, indeed, it is the artificial cheapness of oil that has shaped the whole structure of our civilisation by crowding out smaller scale alternatives.

It may be argued that subsidising transport tends to create large positive externalities. Perhaps it does. Nevertheless, the most visible benefits – being those enjoyed by large firms – have always been smaller than the full costs. As Mr Carson says,

If production on the scale promoted by infrastructure subsidies were actually efficient enough to compensate for real distribution costs, the manufacturers would have presented enough effective demand for such long-distance shipping at actual costs to pay for it without government intervention. …[a]n apparent ‘efficiency’ that presents a positive ledger balance only by shifting and concealing real costs, is really no ‘efficiency’ at all. Costs can be shifted, but they cannot be destroyed.[p.69]

The same can be said of every communications network from national post offices to the Internet. They widen markets at far less than full cost to those who benefit from it. In particular, the satellite-based telephone and Internet revolution of the past few decades has allowed production and distribution right across the world to be organised from a single location.

Second, there are patents and copyrights. In a natural order – that is, in a society without a state – property rights in intangible items would be at least difficult to have recognised. The reason is that, while only one person can possess my notebook computer – and to take it away from me would be an obvious injustice, easily prevented or rectified – this review can be reproduced without limit. Similarly, the computer itself can be copied. In neither case is anyone deprived of his own possession. Intellectual property rights are essentially artificial property rights. They do not derive from scarcity, but from the creation of scarcity. They are essentially grants of monopoly privilege. They can only be created by the State. They can only be enforced by limiting what people can do with physical objects they have bought.

The claim that rights to intellectual property encourage the creation of intellectual property is unfounded. There is much evidence that firms would continue to develop new products in the absence of patent protection. There are many other ways of rewarding artistic creation than copyright. What does seem to be the case, however, is that patents are routinely used to hinder innovation; and the sharing of patents between large firms has the effect of shutting smaller competitors out of the market. And payments for the use of intellectual property enter very heavily into the supply cost of nearly all goods and services. This is particularly the case with pharmaceuticals, where patents serve less to encourage innovation than to increase prices to dozens of times their natural level.

Third, there is the cartelisation of costs brought about by laws prescribing minimum standards of product quality or of fair trading or of payment and treatment of workers. When, for example, cigarette manufacturers are stopped from advertising, there is the same effect on cost and profit as if the companies had agreed among themselves to stop advertising. Mr Carson says:

A regulation, in essence, is a state-enforced cartel in which the members agree to cease competition in a particular area of quality or safety, and instead agree on a uniform standard which they establish through the state. And unlike private cartels, which are unstable, no member can seek an advantage by defecting.[p.80]

Taxes have a similar effect. Value added tax, for example, is applied whenever money changes hands between businesses – above a low turnover threshold, that is. The effect of this is to raise the costs of transactions via the market, without touching those taking place within a firm.

Fourth, there are the incorporation laws. These allow a firm to be defined as an artificial person, with most of the civil rights and obligations of a natural person. One of these obligations is the same unlimited liability for debt as a sole trader has. However, while the firm has unlimited liability, the liability of its owners is limited to the extent of their investment. This privilege alone allows incorporated firms to raise large amounts of capital on the financial markets. Yet, while the shareholders theoretically own them, such firms in practice are the property of their managers, who feel none of the moral responsibility that comes with ownership.

Unless unlucky or badly run, incorporated firms can last forever, and can grow bigger and bigger and more bureaucratic in their organisation. It is no argument that incorporation might still be possible in a stateless society. It probably would not. Whatever the case, incorporation laws enable far more incorporation than would take place where every attempt required costly and time-consuming negotiation and advertising.

By these and other means, Mr Carson says, size of business organisation has been systematically encouraged by the State. Now, those who gain from such enlargement have not been passive or accidental beneficiaries. This is not a matter of “socialist” laws made by economic illiterates that have then worked to the advantage of big business. The world in which we live has been deliberately shaped over the past few hundred years or more by plutocratic elites that have wanted stable markets and docile workers and suppliers. These elites comprise the managerial and rentier classes, politicians and bureaucrats, and the various intellectuals who propagate the ideologies that justify the ruling class as a whole. The justifying ideologies shift over time. But the overall project has been one of centralising economic and political power so that wealth can be shifted upward from those who produce to those who consume.

In this state of affairs, the construction of welfare systems should not be seen as radical attacks from outside, but as an essential support of the established order. The growth of large firms as the dominant business unit has required the virtual conscription of millions of people into hierarchical structures, with the suppression – or at least the discouragement – of their individuality. Apart from regular cash payments, the reward for an almost military deference to authority has been promises of job security and paid holidays and pensions and healthcare. In America, this was made into a cartelised cost on big business. In England and most other countries, it was directly assumed by the State.

We do not live in anything approaching a market order. The state of affairs in which we live is best described as a kinder, gentler feudalism. Those at the top possess fabulous, almost risk free wealth. Nearly everyone else is attached, in extended patterns of fealty, to large organisations – big business firms, state bureaucracies, welfare services, and the like.

This being said, if our modern feudalism is nicer than the old, it is growing nastier over time. plutocratic social democracy worked so long as its inefficiencies could be covered with subsidies from the taxpayers and the exploitation of consumers, and so long as the workers were broadly content with the bribes given to keep them quiet. More recently, Mr Carson says, the crises of the system – overproduction of certain commodities, waste of natural resources, inability to maintain control outside the West, rising discontent within the West, and so forth – have begun to dwarf any means of overcoming them. The response has been a rearrangement of the sticks and carrots. Mr Carson says:

The elites who run our state capitalist economy made a strategic decision in the 1970s, to cap real wages and transfer all productivity increases into reinvestment, dividends, or CEO salaries. So while real wages have remained for thirty years, the wealth of the top few percent of the population has exploded astronomically…. To impose this policy on society, obviously required increasing authoritarianism in all aspects of social life.[p.257]

Because the system is unstable, it may collapse by itself. Or it may require an external push. Whatever the case, Mr Carson hopes for a future world in which statist privilege of all kinds will have been abolished, and in which all costs of economic activity will have been internalised. Such a world, he thinks, will be mostly of small communities, in which food and energy and manufactured goods will be produced and consumed close to market, and in which small-scale – often rather simple – technology will be the rule. Ordinary people, whether by themselves or in free combinations, will look after their own healthcare and welfare and will arrange for the education of their children.

As said, this is a long book, and a full summary of its argument would fill a much longer review article than mine. But this is, I think, the essence of what Mr Carson is arguing. And rather than elaborate on this essence, I think it would be more useful to explain what I find so remarkable about it. What is there to justify the praise that I gave in my first paragraph?

One answer – urged on me by a friend who calls himself an anarcho-communist – might be that Mr Carson has written the definitive refutation of free market libertarianism. To anyone who has read not more than a few pages of his work, this is a superficially persuasive opinion. Mr Carson does not regard himself as a free market libertarian as this term is generally understood. He says instead:

I belong to the general current of the Left so beautifully described by the editors of Radical Technology (‘the “recessive left” of anarchists, utopians and visionaries, which tends only to manifest itself when dominant genes like Lenin or Harold Wilson are off doing something else’). “[p.1]

He does also, I admit, sneer many times at what he calls “vulgar libertarians” – these being people who defend plutocratic privilege as if it were a close approximation to a free market order. I also admit there are such people. The Internet is crawling with people who call themselves libertarians, and who defend the right of a drug company to sell its products in different markets at different prices, and to use the power of the State to suppress private arbitrage between these markets. Ayn Rand and – without her own reservations – her followers worship big business as the highest possible stage of human development. So far as they accept that there is a parasite class, this is the poor and unsuccessful who act via the politicians they have been unwisely allowed to elect to office. The Chicago libertarians for the most part seem to define a free market as little more than “Tesco/Walmart minus the State”. They readily accept that there are groups benefiting from state action, but do not accept the existence of a “ruling class”. And they deny that big business forms part of a system that is inherently exploitative. It might be argued that Mr Carson is attacking free market libertarians for hypocrisy.

But this is not his intention, and I think it would be regrettable if his book were to be regarded as an attack. He also says:

I embrace both the free market and the socialist libertarian camps…. I write from the perspective of individualist anarchism, as set forth by William B. Greene and Benjamin Tucker among others, and as I attempted to update it for the twenty-first century.[p.1]

For all his sneering at the “vulgar libertarians”, Mr Carson’s analysis proceeds much of the time – and with full awareness and acknowledgement – along the same lines as that of Murray Rothbard and of other free market libertarian critics of plutocracy. Almost every page of this book and of all else he has written shows and admits the influence of the Austrian school of free market economics. The Index of this book contains thirty eight references to Rothbard – quotations from his works or generally favourable comments on them. I do not think this famous passage is among those quoted:

Every element in the New Deal program: central planning, creation of a network of compulsory cartels for industry and agriculture, inflation and credit expansion, artificial raising of wage rates and promotion of unions within the overall monopoly structure, government regulation and ownership, all this had been anticipated and adumbrated during the previous two decades. And this program, with its privileging of various big business interests at the top of the collectivist heap, was in no sense reminiscent of socialism or leftism; there was nothing smacking of the egalitarian or the proletarian here. No, the kinship of this burgeoning collectivism was not at all with socialism-communism but with fascism, or socialism-of-the-right, a kinship which many big businessmen of the twenties expressed openly in their yearning for abandonment of a quasi-laissez-faire system for a collectivism which they could control.[Murray Rothbard, Left and Right: The Prospects for Liberty (1965), available at http://www.lewrockwell.com/rothbard/rothbard33.html]

Even if not quoted, though, the passage shows an obvious similarity of approach. Or we can take a passage from Sheldon Richman that is quoted:

Many self-styled defenders of the free market misunderstand the American system. They believe that under a thin layer of government intervention lies the system they cherish. All we need to do is scrape away that layer, and glorious capitalism will be restored.

They couldn’t be more wrong. There is no thin layer of intervention. Government has intruded deeply into economic activity from the beginning, most particularly in banking and finance, which is by nature at the center of any economy. The web of privilege and control is pervasive, touching all parts of the economy. Moreover, this intervention was never imposed on bankers, financiers, and the rest of the business elite. It was welcomed — to be more precise, it was invited and sponsored by them. Free enterprise, risk, and loss were for the little guy. Partnership with the state was for the elite. That partnership meant favoritism and protection from competition. It meant exemption from market discipline and exploitation of taxpayers, consumers, and workers.[Sheldon Richman, The Corporate State Wins (2008), available at http://www.fff.org/comment/com0810b.asp]

Of course, written in 2008, this may show the influence of Mr Carson rather than any influence on him. But there can be no doubt that Organization Theory is a book written by a free market libertarian of sorts – and is a book that contains much of value to the free market libertarian analysis of actually existing capitalism. Its value lies in three areas. First, it carries the analysis of how plutocracy operates to a deeper radicalism than can be found in much of Rothbard and his circle. Second, he provides an overpowering weight of evidence for this analysis – evidence, I grant, of not always the highest value. Third, he writes from a perspective not often understood by free market libertarians.

I will avoid discussing his views of incorporation, as this is already an emerging consensus within free market libertarianism. I have written something on this myself, and my opinion – that the joint stock limited liability corporation is an unnatural and an undesirable development – is one that I formed before reading Mr Carson, even if this opinion has been strengthened by reading him. What did come new to me was his analysis of how distortions in the transport market tend to subsidise the growth of big business. It is some while since I read Rothbard with close attention, but I do not think he regarded these subsidies as of central importance. Hans-Hermann Hoppe does mention them somewhere in passing as more instances of coerced association. But I think Mr Carson is the first to treat them as of central importance. And once properly understood, they can be used to remove one of the main disputes between libertarians and traditionalist conservatives, among others.

For the better part of two centuries, conservatives have been sceptical of free trade because of its alleged tendency to destroy local patterns of enterprise and the relationships deriving from these. Their complaint has been that the removal of tariffs has tended to deprive large numbers of people – especially the native working classes – of any reasonable market for their services. Against this, libertarians have used the formally irrefutable logic of comparative advantage. If it is cheaper to import wheat or steel from abroad, they have argued, it is economically inefficient and a violation of rights to force people to buy these things from native suppliers.

While irrefutable, however, the theory of comparative cost is usually argued on the assumption of zero transport costs. Once these are taken into account, extended foreign trade may become far less profitable. Richard Cobden once observed that British agriculture was already protected by the high cost of shipping corn from Russia. What has happened since then is the growth of a vast international transport system built or subsidised by the taxpayers. This has brought down transport costs paid at the point of use and enabled the growth of unnaturally large patterns of international trade.

I live in one of the main apple growing regions of England. Even in the autumn, I can go into my local supermarket and find apples on sale from South Africa, from Chile, and even from China. When I drive home every summer from Slovakia, I find myself stuck on the smaller German motorways behind lorries carrying food from Turkey. How much of this trade would make economic sense if price in the shops reflected the full cost of transport? How much would there be if the motorways had not been built by the State, with powers of compulsory purchase and with grants of immunity against tort for pollution? How much would there be if transport companies had to pay the full cost of the wear their lorries made on the roads? How much would there be if the costs of stabilising the Middle East were reflected in the price of commercial diesel?

Adam Smith pointed out that grapes could be grown in Scotland, but that the opportunity costs made this a foolish use of resources. Perhaps it is. But perhaps if the full costs of production and transport entered into price, might it not make better sense to grow our own exotic fruits – especially given our more advanced agricultural techniques? Does it make real economic sense to import every consumer good imaginable from China and the Far East? Would it not be cheaper, in the absence of distortions, to buy television sets from a factory in our home town? Would it not be cheaper to spend more on maintaining most consumer durables than on replacing them every few years?

We are accustomed to laugh at ill-informed attacks on Ricardo and the other economists of foreign trade. But perhaps these attacks do contain factual truths that our own assumptions about trade theory prevent us from understanding. Perhaps if we were to take account of real transport costs, this whole dispute might be seen as another dialogue of the deaf.

The longest section of Organization Theory is contained under the heading “Systemic Effects of Centralization and Excessive Organizational Size”. This is made up of observations that strike me for the most part as common sense – and even common knowledge – but that I have not before seen brought together into a structure of analysis. Indeed, though I did teach management theory for several years, its overall theme was a revelation to me. As said, many libertarians recognise that big business is inherently exploitative. But we have also assumed that it is reasonably productive within its own terms. It is not. As already mentioned, Mr Carson believes that large firms show many of the weaknesses long since indentified in centrally-planned economies. He says:

Individual human beings make optimal decisions only when they internalize the costs and benefits of their own decisions. The larger the organization, the more the authority to make decisions is separated both from the negative consequences and from the direct knowledge of the results. And in a hierarchy, the consequences of the irrational and misinformed decisions of those at the top are borne by the people who are actually doing the work. The direct producers, who know what’s going on and experience directly the consequences of decisions, have no direct control of those decisions.[p.193]

The results of this are an obsession at the top with targets that can be measured and an indifference to local understandings of how work may best be done. Profitability crises are managed by thinly-veiled attempts to make people work harder for less, by “downsizings” that cut measurable costs while destroying intangible patterns of human capital, greater incentives to management to restore profitability, and an interest in fad management theories that talk of “empowerment” and decentralised control, but are just shifts in legitimising ideology to jolly the workers along.

Strikes and other forms of industrial action should not be seen as mindless wrecking, or attacks on property or violations of contract. Rather, they are often attempts by the workers to claw back some of the humanity stolen by them. Nor can what is often the standard libertarian analysis of free contracting be used to justify the increasing authoritarianism of big business. Mr Carson looks at the increasing attempts to control what workers do in their own time:

Vulgar libertarians like to stress that, ‘in a free market,’ workers are free to take their labor elsewhere if they don't like their working conditions. And many free market libertarians respond with just that advice--frequently in quite indignant terms--in response to workers' complaints about their employers. Every complaint about employers' restrictions on their employees’ freedom of speech and association outside of work is met with the response: ‘Well, nobody’s forcing you to work there.’

Well, yes and no. We market anarchists do not propose the imposition of any external constraint on what terms an employer can set as a condition of employment. The question is not whether the state should permit employers to set such conditions, but what kind of a market allows it


Just how godawful do the other ‘options’ have to be before somebody’s desperate enough to take a job, and hold onto it like grim death, under conditions of stagnant pay, where (thanks to downsizing and speedups) they're doing their own work plus that of a former coworker?

But never mind those things. How do things get to the point where people are lined up to compete for jobs where they can be forbidden to associate with coworkers away from work, where even squalid, low-paying retail jobs can involve being on-call 24/7, where employees can’t attend political meetings without keeping an eye out for an informer, or can’t blog under their own names without living in fear that they’re a websearch away from termination?[pp.402-03]

This analysis shades into a perspective on libertarianism that I, for one, had never really considered before. I came to libertarianism by reading Whigs like Macaulay and classical liberals like John Stuart Mill and Herbert Spencer. The common tendency of these writers is to view society from fairly close to the top. Liberty is good, they argue at least impliedly, because it means that well-educated middle class people get left alone to live as they please. My libertarian friends were mostly brought over by reading American writers of the twentieth century. Our common opponents have been socialist intellectuals who cry up the plight of the working man as an excuse for expanding state power. Those of us who are English and have reached middle age remember the crises of the 1970s, in which trade union activists seemed to be trying for a pro-Soviet revolution. There is for us a natural identity between property and liberty. And we have been inclined by reading and experience to identify the defence of property with defence of the propertied classes. If we have adopted the more radical approach of Murray Rothbard, it has been to complain at how the plutocratic elites have plundered middle class people like ourselves. Something most of us have never considered other than in passing is the position of those at the bottom – the semi-skilled and unskilled working classes.

Several years ago, I sat down to dinner with David Carr, who is the Legal Affairs Spokesman for the Libertarian Alliance. We discussed at some length what sort of outreach we could develop for those at the bottom. Libertarianism, I said, offered lower taxes to all. So what? David asked. A checkout assistant in Tesco pays little tax, and probably gains on balance from the welfare state. So what about freedom of thought and speech? he went on. These people are not very intellectual. And what of the right to live as they choose? They can already do that. Whatever taxes and restrictions there might be on cigarettes and drink and other recreational drugs, these do not really apply to anyone who is not worried about the occasional brush with the law. Granted – non-libertarian political systems, if they turn totalitarian, murder large numbers of people, and do not usually discriminate by class. But the chance that England will fall under a Stalin or a Pol Pot are not worth mentioning.  Granted – the abolition or hampering of markets means that goods are allocated more on the basis of connections than of price. But the poor lack both connections and money. They are made worse off – but not often in ways they can be brought to consider. Libertarianism is a fine ideology for the productive middle classes and those with the energy and ambition to rise into them. But what about the workers? Our conclusion was to find some way of preaching the benefits of “trickle down” – that the lower classes benefit from how their betters use their freedom – and to hope that some non-libertarian party might wrap up a certain amount of libertarian policy in complaints about the European Union and mass-immigration.

Our discussion was, I must say, a little more sophisticated than that. But the question of how to preach libertarianism outside the middle classes did not get much further than that. Shortly after this, I discovered the work of Kevin Carson, and my view of the question was transformed. His present book draws his earlier work together into one place and reinforces that transformation. The problem with all those patronising Labour apparatchiks and the scum in donkey jackets selling their newspapers outside Underground stations is their prescription. Their diagnosis that ordinary working people are exploited in a system that transfers wealth upwards is broadly correct.

People at the bottom suffer from plutocratic state capitalism because it robs them of the dignity that comes of being respectably poor – that is, being securely in control of their own lives. It raises the price of all goods and services to them. It places direction of their lives into the hands of credentialed elites. It herds them into large state or formally private organisations and subjects them to irrational and authoritarian control of their working lives. It forces them to live in disgusting conditions by preventing them from taking over unused land and building their own homes according to their abilities.

But “[c]onsider” says Mr Carson,

the process of running a small, informal brew pub or restaurant out of your home, under a genuine free market regime. Buying a brewing kettle and a few small fermenting tanks for your basement, using a few tables in an extra room as a public restaurant area, etc., would require at most a bank loan for a few thousand dollars. And with that capital outlay, you could probably service the debt with the margin from a few customers a week. A modest level of business on evenings and weekends, probably drawn from among your existing circle of acquaintances, would enable you to initially shift some of your working hours from wage labor to work in the restaurant, with the possibility of gradually phasing out wage labor altogether or scaling back to part time, as you built up a customer base. In this and many other lines of business, the minimal entry costs and capital outlay mean that the minimum turnover required to pay the overhead and stay in business would be quite modest. In that case, a lot more people would be able to start small businesses for supplementary income and gradually shift some of their wage work to self employment, with minimal risk or sunk costs.[p.549]

This does not talk – as many libertarians do when considering small businesses – about something that might turn its owner into a millionaire. It talks instead about micro-businesses that will never make anyone rich, but will simply make their owners independent of a system that turns them into serfs and bribes them with welfare handouts into becoming electoral fodder for the farce that is plutocratic social democracy. However, all this is presently illegal. There are taxes and regulations that exclude this sort of micro-business. The benefit that libertarianism holds out to the Tesco checkout assistant is not lower taxes on her pitiful and already mostly untaxed salary, but the chance not to work for Tesco.

Let me now turn from those areas where I completely agree with Mr Carson to those where I may disagree in principle, but am inclined to agree in practice. I am not sure if I agree with his opinions on land ownership. Certainly, I have no objection to expropriating South American latifundia and dividing these among the peasants who work them. But these are the product of obvious and usually recent theft overseen by the State. I am less sure about the illegitimacy of the rental income I derive from a second property. I am less sure about the income I hope one day to derive from owning a number of commercial properties. On the other hand, big landowners in England at least are part of the plutocratic ruling class. Most agricultural land here still seems to be owned by the old aristocracy – even if ownership is concealed by trusts and other corporate forms. This ownership prevents the emergence of a self-sufficient farming class. Perhaps there is a case for some confinement of property rights in land to what an owner can reasonably use for himself.

I am also divided on some intellectual property rights. I accept that patents are illegitimate. But copyrights are another matter. I own several property rights from which I do hope to grow rather rich, and – even discounting my personal interests – I think it would be unjust to deprive writers and composers of their royalties. I know that there are other systems of reward that do not rely on grants of monopoly privilege, and these may become more important as the enforcement of copyright grows technically more difficult. For the moment, though, I do look forward to my royalty cheques and do not regard them as ill-gotten.

On the other hand, I accept that copyright laws serve mostly to enrich media companies that are part of the ruling class. The main function of these companies is to brainwash us into accepting the system in which we live, or to moronise us into not being able to notice how we are tyrannised over and exploited. I am not sure.

I am more decided about Mr Carson’s acceptance of the environmentalist claims. I do not believe that we are running out of natural resources. I certainly do not think, as Mr Carson insists, that we are living in the age of “peak oil” – that “the greatest sources of concentrated energy [i.e., fossil fuels] are almost certainly reaching their peak[p.432], and that we shall soon see a decline in their extraction. I will not bother in what is already a long review with digressing on a reply to this claim. I simply do not believe it. That being said, I do like his vision of a decentralised world where energy needs are met locally or in the home. We have lived for around two centuries now in a civilisation powered by oil and coal and gas. WE have got most of our oil from a Middle East that we have had to colonise and generally turn upside down. One cost of our dependence on oil has been the grown of giant oil companies that are leading members of the plutocratic ruling class. Another cost has been radical Islam. However generated, our energy needs have been met by vast, centralised distribution networks over which we as individual have no control, and which encourage us into attitudes of passive reliance on the ruling class.

Yet there are alternative ways of generating and distributing energy. At the moment, these are more expensive than those already established. This is partly because most of the alternatives are not very good in themselves – but also because we have had generations of effort put into making the best of moving large amount of oil around the planet, or distributing electricity and gas via national networks. There is no reason to suppose that these alternatives should always be a joke. That is why I am often unsure about the green movement. So far as it wants to shout down industrial civilisation and return us to the long preceding age when energy consumption was minimal, I stand happily beside the most fanatical and vexatious Randroid. So far as it might be useful to bringing about a world in which energy consumption can rise without limit – but without state-built or state-controlled energy networks – I am inclined to put on a straight face and nod hopefully over talk of wind turbines and solar cells.

Let me now conclude with one purely negative criticism of Mr Carson. I come back to his denigration of the “vulgar libertarians”. Since I probably do not qualify as one of these according to his definitions – and probably never have done – I hope my defence will not be seen as self-serving apologetic. But what have these people said that is so absolutely reprehensible? They have defended the most fantastically productive economic system that has ever been extensively tried. If, judged by the strict standards applied by Mr Carson – standards that I largely accept – this system is lacking. Compared with any other, it is barely the wrong side of heaven itself. It is exploitative at home. Say what other system has not been. It is nakedly exploitative in outlying regions. Again, say what other system has not been. It is riddled with irrationalities and waste of human and material resources. I repeat the challenge. We have lived under something like our present system for at least one century – perhaps two or more. Mr Carson is still free to write up and publish his devastating attack on it; and I am free to give it a more or less enthusiastic review. If the “vulgar libertarians” have given any intellectual support that has enabled the system to survive, they still rank among the benefactors of mankind.

But this leads into issues far removed from this review. Mr Carson has written a very long book. Even so, it is filled with arguments and insights that, I repeat, will enrich and transform the vision of a free society held by anyone who reads it. Despite what I see as its occasional faults, I heartily recommend it.

Free Life Commentary,
an independent journal of comment

published on the Internet
Issue Number 5
27th October 1997

One Europe, One Union, One Faith?
Comments on the Persecution
of Scientologists in Europe
Sean Gabb

Failures of the Debate on Europe