We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.
Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]
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Looking back in anger and bemusement William Hague got a terrible press at the time of his leadership of the Tory Party (no hair, Northern accent, etc etc). So he can be forgiven for a tinge of bitterness as he looks back and recalls his laser-accurate predictions in the 1990s over the follies of single, monopoly currencies such as the euro:
In future decades, in the very business school where I spoke in 1998, I believe students will sit down to study the folly of extending a single currency too far. Sad though it will be to see it, their textbook is likely to say that the Greek debacle of 2015 was not the end of the euro crisis, but its real beginning.
Meanwhile, China’s A-shares (mainland) equity market is tanking. It is arguably far more of a serious issue for the global economy than Greece, but you would not believe that judging by the brokerage notes I get at the moment.
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Who Are We? The Samizdata people are a bunch of sinister and heavily armed globalist illuminati who seek to infect the entire world with the values of personal liberty and several property. Amongst our many crimes is a sense of humour and the intermittent use of British spelling.
We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, ‘Porcupines’, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty Frédéric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
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It is really difficult for me to avoid posting snarky comments about British “conservatives” such as Hague, when their every pronouncement starts from the assumption that the Greeks (and the Latins too) can become more “competitive” by printing more money. If that is what he was saying in 1998, then no wonder he was not taken seriously. Apparently it has escaped his notice that the problem in Greece is not the trade deficit but the budget deficit (or more precisely, a history of budget deficits resulting in large public debt).
If you think i am exaggerating, consider the following quotes from his article:
Do you see any mention of government debt in the above?
To be fair to Hague, he got it right here; except that he does not think that THIS is “the problem of the eurozone” (see previous quote).
In other words, the problem goes away if the Greeks can print more money.
Note the weasely word “equally”: Hague thinks that printing money would level the playing field for the Southerners.
PS: while reading Hague’s article, i found a link to something much more interesting:
World’s oldest person, 116, eats diet of bacon and eggs.
I don’t think Hague is looking back in anger or bemusement.
He’s done quite well for himself and has no reason to be angry, nor does he come across as angry. And certainly not bitter.
Nor is he bemused.
He knew exactly why many people backed the single currency and Greece’s entry to it. It was because they were blinded by idealism and ideology. He knew that then just as he knows it now.
He’s just a man taking a bit of pleasure in pointing out why his opponents were wrong and he was right.
What future thinkers (as differentiated from those seeking career groundings from studies) are more likely to consider “common currency” experiments, exchange rate schemes and other attempts to create commercial adhesives, as part of the reactions to a sense of, but not clear perceptions of, the continuing fragmentation of Western Civilization (and the cultures of which it is composed), as the center of that civilization has moved westward from Europe and may now be headed (with its changes in cultural compositions) to the Pacific Rim.
On the conceit that human intelligence can design, construct and manage commerce that (though necessary) will be sufficient to adhere the elements of that civilization against continuing fragmentation, the changes in culture and in cultural compositions (and their continuing solvent effects) receive scant consideration.
We now appear to be at a “leveling off” of “Globalization” as an attempt to replicate the “open trade” conditions of the last half of the 19th century; seeming to forget the sequences of fragmenting violence in the following first half of the 20th century, and the further changes during the restraints and limitations of violence in the second half of the 20th century.
While culture can create and “shape” commerce and Commerce no doubt affects cultures and cultural compositions, it is not the “sufficient condition” of cultures and their composition in civilizations. Perhaps that will be a point of study for future thinkers.
Money should be neutral, not to be managed by politicians. So i don’t understand how a Libertarian defends that the Greek or any other Government should value or devalues money.
The Greek problem has nothing to do with Euro, except indirectly the undeserved reputation that Greece got and that facilitated to rack up debt. It has to do with nature of current Democratic system.
Socialism (with all it derivatives) is like an alcohol or drugs; at the beginning we intend to have just few drinks or a few joints. Then we start drinking or stuffing ourselves more and more until we end up in a DELLIRIUM TRMENS…
Just like Greece and soon Spain, and Iceland, and Ireland, and USA, and Italy, and on and on…
And few spouts about China, the dreamed out future locomotive of the world’s economy; how many times are we going to hear that the COMMUNE-FASCIST REGIMES have LIED, LIE and will LIE through their teeth before we become sceptical of the abhorrent CRAP that they are to sell us?
On a lighter note, Astraya faces of against the Great Satan today. Hopefully Freddy Flintoff will have his fish and chip van there on the boundary.
Libertarians should support the concept of any non-fiat currency. We should call ourselves ‘gold-standard’ people, goldies, because we support metal-backed currencies, of which gold is the most famous medium.
Libertarians, classical liberals etc are right that the single EU currency is not tenable given the current distribution of sovereignty and powers in Europe, but what libertarians/classical liberals do not see is: given sufficient centralized power, a single currency can be enforced over any geographical area eventually.
The Greek sovereign debt crisis is actually a sovereignty deficit crisis.
There are two possible end games with respect to the European Union. Either political structures unravel in accordance with economic forces or economic power is harnessed to tie down/mollify entropic political forces. Neither outcome is inevitable over any period of time.
Interesting.
Right on! but note the implication: any non-fiat currency is likely to be stronger than the euro. To say that the Greeks, like all people, would be better off with a non-fiat currency is to say that the euro is not strong enough for Greece; the opposite of what Hague says.
Really? I love it when people who are neither libertarians nor classical liberals tell us what we cannot see. I think you will find that most libertarians/classical liberals understand that given sufficient centralized power, a state can enforce pretty much anything over any geographical area eventually if they have enough force at their disposal. A state with enough power can make anyone call themselves “Matilda”, at least in public.
Libertarians/classical liberals understand that just fine, which is why they prefer it when states do not have sufficient centralized power to impose all those various ‘great ideas’ on everyone.
Perry,
Glad to be of service.
I should have explained my point better.
In any society, first comes peace, then security, then order, then law, then liberty. You can’t get peace by getting liberty; you can only get liberty by getting peace (and other things) first.
And you can’t have peace without force (or at least, more specifically, the implied threat of force). Doesn’t work for humans at least.
It may well be undesirable to enforce a single currency across the EU, but it’s clear to this former-libertarian that (given the above) if doing so requires force then the use of force is not really one of the reasons why such a scheme would be undesirable.
So. Part of what I meant to assert is that given sufficient centralized power, a single currency can be HARMONIZED over any geographical area with different economic growth rates, trade policies, cultures, languages, etc. The word I used was power, not force. Power encompasses force. The harmonization of monetary policies into a united currency scheme is inherently a good thing (inasmuch, for example, as it mitigates the risk of regional conflagration).
Libertarians don’t see unity, centralized power as a good thing because they don’t really see that liberty is an end result of peace, security, order, law (in that order) and that peace is contingent on force (or the implied threat thereof) and, last but not least, force is inherently a centripetal force (seeks the center, seeks unity, seeks harmony, seeks to mollify entropic forces).
“The harmonization of monetary policies into a united currency scheme is inherently a good thing (inasmuch, for example, as it mitigates the risk of regional conflagration).”
So if we are equal we will all live in peace. How very communist of you. For the moment i’ll forget the “everyone is equal but…”
I don’t think “monetary policies” are a good thing. For start the power that gives to politicians.
I imagine if I showed that remark to my chums in what was once Yugoslavia, they would have a good chuckle as one-size-fits-all was one of the prime drivers that unleashed the nationalist beast in that delightful chapter of European history.
The reality of the way the world works is quite different to what you think.
A really interesting insight into the way Greece operates here:
http://www.vanityfair.com/news/2010/10/greeks-bearing-bonds-201010?printable=true#ixzz0ywi024li
There are good reasons to like fractional reserve currencies in the abstract. They keep prices stable, i.e. as the economy grows so does the money supply. When it shrinks, so does the money supply. A loaf of bread that costs 1 Maria Theresa thaler today costs 1 Maria Theresa thaler tomorrow. In theory, with metal-backed currencies you’d have to spend a lot more time evaluating what things you don’t buy very often should cost in the same way you do under inflation.
But is there a single instance in history where the fractional reserve currency issuer was able to refrain from turning the currency into a stealth tax? In practice the gold standard is a better choice. On the other hand, no government is going to willingly give up stealth taxation, and good luck getting more than about 20% of the population to understand the shell game as it stands.
Phil B: It took a bit of reading down that Vanity Fair piece, but this caught my eye. Unsourced, but it doesn’t sound improbable:
I went to Greece in the 1990s, by train to Istanbul (Constantinopolos as they still call it in Greece!). At the stop before the Turkish border there was a 3-legged dog. He got a bit of chorizo from me. I think he was the mascot of Greek railways.
Britain was on the Gold standard for 2 centuries (18th and 19th centuries, I think). That was also the time of the Industrial revolution, which may or may not be linked to the gold standard, but people seem to think they were linked.
Still, even if you take away the gloss of that ‘coincidence’, a metal standard makes more sense than letting politicians print money, like shares in the whole economy. If not linked to something solid, isn’t that all ‘money’ then becomes?