Media reaction to the National Wealth Fund has, in general, been positive, though (predictably) The Economist was critical. Interestingly, The Guardian did not appreciate the fund’s misleading name. Probably the most glowing responses came from the Financial Times. Many might think that this, as well as the various big names involved in the formulation of the policy — including former Bank of England governor Mark Carney and the Chief Executives of Aviva, NatWest, and Barclays — reflects the fact that this policy is well-formulated and fundamentally sensible. They would be wrong. As we have seen, there is nothing sensible about the majority of the ‘preliminary’ sectors chosen.
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Samizdata quote of the day – the new ‘National Wealth Fund’ is catnip for useful idiotsPerry de Havilland (Wiltshire) · Economics, Business & Globalization · Slogans & Quotations · UK affairs August 22nd, 2024 |
 15 comments to Samizdata quote of the day – the new ‘National Wealth Fund’ is catnip for useful idiotsLeave a Reply |
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“the new ‘National Wealth Fund’ ”
In most other countries it might be called the sovereign wealth fund, but since Charles III already has most of the wealth, I suppose it would be too, … in your face, to call it that.
And in other news, any time the government says a thing, you can take it to the bank that you’ll get exactly the opposite.
National poverty.
Mark Carney.
Not a name this Canadian associates with impartiality and probity when it comes to financial matters.
Any Sovereign Wealth Fund (as it would be in all but name) would be emptied in seconds by the reds and the blues alike.
Can you imagine what would have happened had we had a SWF during the 2008 banking crisis or through COVID-19? Can’t you just hear the clamour of the fuckwit classes questioning why we’re investing our wealth outside of the UK? Could you imagine Labour leaving huge barrel-fulls of cash for the Tories to spend (or vice-versa)?
A well-managed Sovereign Wealth Fund would have been a brilliant thing to do with our North Sea oil bonanza 40-50 years ago. Now though, however, many trillions in debt that we are and with our oil money mostly pissed up the wall, it would be a disaster.
North Sea oil revenues peaked at about 3% of GDP but were only above 0.5% for a decade. There is no way the UK could have done anything meaningful with the revenues in the context of its economy. Whereas in Norway oil and gas revenues have averaged above 20% of GDP for the past two decades, a far more significant proportion, enabling Norway’s SWF.
In any case, judging by what the National Wealth Fund will be squandered on, diverting North Sea oil revenue into such a fund, rather than giving it to the populace via tax cuts, would have been a colossal waste of money.
As the articles says:
I am certain that every penny of this money will be wasted, although TBH I have no idea what ‘clean steel’ is meant to be. We’ve already lost a couple of hundred million on a gigafactory project while carbon capture and green hydrogen are useless snake-oil tech. The only winners will be subsidy farmers.
The (modern) Economist magazine normally supports more government spending and taxation (even the old Economist magazine supported 19th century bailouts for bankers – as long as they were done behind the scenes) – but it seems the “National Wealth Fund” was too much even-for-them.
As for various banks and other such rushing to support this insanity – sadly no surprise there, as these “private enterprise” corporations are joined at the hip with the state – totally dependent on the Bank of England and so on.
Back in the 1980s the banks and other corporations acted as-if they were operating in a capitalist society (even Hollywood films sometimes supported decent values – although the people involved in making them often did not believe in these principles), but now there is no effort on the part of the banks and other vast corporations to act as-if they believed in free enterprise and general liberty.
If government wants to build “infrastructure” it should tax people and build it – but that would make the costs too obvious, so governments prefer to borrow the money (“sell bonds”) or engage in even worse financial antics (such as “PFI” a favourite of Prime Minister Gordon Brown) which end up costing taxpayers far MORE.
Not that the “government infrastructure will produce economic growth” theory is true anyway – it is not true, as “infrastructure” is the same as anything else – if it is economically useful it will be built at the expense of the people who intend to use it.
As for the “Green” projects – the government (both the unelected officials and politicians such as Ed Miliband) think they are imitating Germany.
They are NOT imitating Germany – the German government has made many terrible mistakes, but it is NOT really following the mad policies of Ed Miliband and so on, in reality there are a lot of coal mines and so on opening up in Germany and the announcement that all nuclear power stations would be closed has not been followed by action.
In short – the German government said one thing, and (to some extent) actually did something rather different.
The United Kingdom is far more ideological than Germany (yes more ideological – not less), in Britain all that matters is the ideology of the establishment – what officials and so on are taught to believe.
Even in the 19th century this was so – but the ideology was very different then.
Karl Marx wrote in Britain – but he knew nothing about British politics, the “class interests” of “capitalists” have never determined policy here, otherwise such things as the 1875 Disraeli Trade Union Act (pushing “picketing” and other paramilitary tactics) would not have been passed (by the way that Act was the start of both the relative, RELATIVE, industrial decline of the United Kingdom and the rise of structural, as opposed to temporary, unemployment).
Today things are vastly more extreme – British government policy, on labour market regulations (“worker’s rights” – the establishment definition of “rights” as the use of government power rather than restrictions on government – basically turning the word “rights” on its head, reversing the meaning of the word), “Green” projects, and so on – will have the effect of destroying what is left of British manufacturing industry.
The United Kingdom still has a lot of manufacturing industry – although it is no longer in the top ten countries. But this government (unelected and elected – for the officials and politicians are now on the same page, they believe the same, utterly-false, things) will destroy it. And the United Kingdom will hit very hard times indeed.
The conclusion for people with financial resources or internationally marketable skills, is obvious.
I do not have to spell it out.
If you build it they will come. Mostly those who can make money from running it, arranging professional services, and probably selling ‘merchandise’.
“The Government spent all my taxes on fantasy projects – and all I got was this lousy t-shirt.”
It’s not waste if your friends get the money.
Most sovereign wealth funds are based on oil and other commodity revenues, garnered by states such as the United Arab Emirates. Norway has one. Venezuela had one (not an encouraging precedent.) Singapore has one, although this is more like a giant pension fund, and not driven by natural resources. (It’s well run.)
There are several issues. One has to hope that the money is invested in a long-term framework, but as we know, politicians can have other ideas. The SWFs run out of the Gulf etc aren’t democratic and accountable. I don’t want such organisations running media companies , etc.
They can also be used for prestige projects that are more about national vanity than hard commercial calculations. The dangers of statist mission creep are high.
I prefer them not to exist. Far better to slash taxes and leave investment to individuals, their funds and individual capitalists.
Johnathan Pearce – yes indeed Sir.
If only our Masters were as successful with public funds as they seem to uniformly be with their own private accounts…
“…and the announcement that all nuclear power stations would be closed has not been followed by action.”
@Paul Marks
I’m sorry to disagree, Sir, but Germany has indeed shut down all its nuclear power stations, including blowing up their cooling towers so to disable them thoroughly.
Maybe the German government is “NOT really following the mad policies of Ed Miliband and so on”, but it is following its own wildly mad agenda. It is absolutely able to destroy anything still standing without following any other madman in Europe or the world.
Surely before we could have a National Wealth Fund we would need some actual national wealth – instead of a rapidly growing national debt. Presumably modern monetary theory has some magic handwavium that makes that little problem go away (at a guess it’s just “print more money”, in the belief that money is the same thing as wealth). So there is no use making that point to the people responsible for this.
Spruance – on a recent visit to Germany I was told differently, but it is possible I was not given accurate information.
I agree that there have been many terrible policy decisions in Germany – but still it has large scale manufacturing.
The United Kingdom is no longer even in the top ten manufacturing nations.