Leftist and statist mid-wits blaming 2008 on deregulation just never ends. The FSA banking regulations, published only on their website as it was not feasible to print them, ran to 1,200,000 paragraphs. Yes, 1.2 million paragraphs of rules is ‘deregulated’ banking.
Then the idea the BoE needs more policy space to tackle recessions. For the love of God, they cause recessions by messing with interest rates. The natural rate is unknowable and the conceit of ‘controlling’ it is what causes boom and bust.
The rest of Mr Vleighle’s economics is risible. He and his ilk are either morons, or know better and are truly malevolent. Either way, letting him and his friends loose gives the state plenty of perpetually dependent rubes to justify its existence. It can do nothing else.
I can't add to that really. The only thing I would say is that there is a third 'm' option between moronic and malevolent which gets to the heart of things: managerial. They just genuinely believe in technocracy. It's sheer hubris.
Interestingly I’m currently reading a biography of Hayek ( by B Caldwell) and it features correspondence between Hayek and Keynes. They did debate economics and the answer to the “Great Depression”, but Keynes did reveal that he was more closely aligned with Hayek on inflation and many other aspects than what economic historians have portrayed. There’s still a debate in the history of economic thought about whether Keynes was actually a Keynesian!
"[A]s central banks…are considering a move to [CBDCs], this constraint can potentially be moved more easily in the future. If digitisation becomes sufficiently widespread so that cash is used much less..."
says Mr Vlieghe.
Digitisation and CBDCs are, of course, not the same thing. You don't need CBDCs to destroy cash. Cash is already dying, via debit cards and mobile phone based payment systems.
This confusion between CBDCs and digitisation does seem to be widespread. I am not sure whether it is a deliberate ploy by the pushers of CBDCs, or whether it is just indicative of their lack of understanding.
If I can shed some light on this, you don't need CBDCs to destroy cash, but there is a difference between CBDCs and commercial bank money, which is that you could program a CBDC to automatically lose value over time (i.e. to have a built-in negative interest rate). This will only be an advantage, of course, if there is no realistic alternative to using a CBDC. You can follow the logic from there.
Definitely, I agree with you on this. I was just pointing out in passing that he had falsely implied that the introduction of CBDCs would itself lead to cash being used much less.
Careful who you sleep with. Bastiat is OK when windows are broke; but when we are broke, not so much. To say "The law (the state) can give nothing that has not first been taken from its owner." is incorrect - the kind of talk that got Liz Truss tossed. Economists (me and FB) tend to be fixated on income, (such as GDP) and what makes it wax or wane. Despite Adam Smith’s title, his great insights were not about wealth, but income.
Income is a FLOW ($ per unit time), whereas wealth is a STOCK ($X in my bank account). These are different kinds of concept, which respond differently to economic forces (I was about to say "laws"). The total stock of wealth in a country is determined by the willingness of the citizen to hold it (as gold or securities) rather than to pop down the pub and drink it (as a flow!). Clearly, the state’s laws affect that willingness, and recent centuries have greatly extended the range of instruments available for the citizen to do the required holding. The Bastiat aphorism applies only to flows.
One could even argue that a (perhaps the) basic error of our age, is that in this area the state should be doing much more than it is, and different. For example, it is surely a missed opportunity to force people to hold most of their wealth as an annuity, such as a state pension. The citizen is denied part of the possible range of choice over what he does with "his" assets. Imagine being told at 65 that you have a week to live, so that your family will lose most of your $100k a year. As Uncibal so often says, the state has a limited sympathy for family life.
Yes - the State loves 'flow' in general, because flow can be diverted, strengthened, weakened, etc. I wrote a post about this back around the New Year.... On the pension point, I believe you can actually now in the UK do what you suggest and draw down some or all of your pension if you wish - this was introduced about 10 years ago I think (I might be wrong).
You are correct on that UK detail. As you say, welfare is just one example of how the structure of economic policy (not the control function) is all about flow - and not only in the UK.
However, one can imagine most "distribution" policies, from welfare to education finance, being re-designed on "stock" lines. Better for citizens, to make their own decisions in a web of positive economic and social incentives with no nasty "poverty traps". Better also for politicians, who could offer much more generous benefits than today, without shattering glass ceilings at the PSBR. The ones to suffer would be welfare bureaucrats; vast numbers of whom would, by definition, find more productive work.
The scope for more generous benefits gives me a tiny hope that reform may one day be possible. Doing it piecemeal would of course be foolhardy.
Leftist and statist mid-wits blaming 2008 on deregulation just never ends. The FSA banking regulations, published only on their website as it was not feasible to print them, ran to 1,200,000 paragraphs. Yes, 1.2 million paragraphs of rules is ‘deregulated’ banking.
Then the idea the BoE needs more policy space to tackle recessions. For the love of God, they cause recessions by messing with interest rates. The natural rate is unknowable and the conceit of ‘controlling’ it is what causes boom and bust.
The rest of Mr Vleighle’s economics is risible. He and his ilk are either morons, or know better and are truly malevolent. Either way, letting him and his friends loose gives the state plenty of perpetually dependent rubes to justify its existence. It can do nothing else.
Leftist and statist mid-wits blaming 2008 on deregulation just never ends. The FSA banking regulations, published only on their website as it was not feasible to print them, ran to 1,200,000 paragraphs. Yes, 1.2 million paragraphs of rules is ‘deregulated’ banking.
Then the idea the BoE needs more policy space to tackle recessions. For the love of God, they cause recessions by messing with interest rates. The natural rate is unknowable and the conceit of ‘controlling’ it is what causes boom and bust.
The rest of Mr Vleighle’s economics is risible. He and his ilk are either morons, or know better and are truly malevolent. Either way, letting him and his friends loose gives the state plenty of perpetually dependent rubes to justify its existence. It can do nothing else.
I can't add to that really. The only thing I would say is that there is a third 'm' option between moronic and malevolent which gets to the heart of things: managerial. They just genuinely believe in technocracy. It's sheer hubris.
And hubris brings nemesis.
The naked hatred of private savings was of course already a key component of Keynes' "General Theory".
Interestingly I’m currently reading a biography of Hayek ( by B Caldwell) and it features correspondence between Hayek and Keynes. They did debate economics and the answer to the “Great Depression”, but Keynes did reveal that he was more closely aligned with Hayek on inflation and many other aspects than what economic historians have portrayed. There’s still a debate in the history of economic thought about whether Keynes was actually a Keynesian!
Hayek also, funnily enough, had a tendency to be much less Hayekian than the Hayekians...
"[A]s central banks…are considering a move to [CBDCs], this constraint can potentially be moved more easily in the future. If digitisation becomes sufficiently widespread so that cash is used much less..."
says Mr Vlieghe.
Digitisation and CBDCs are, of course, not the same thing. You don't need CBDCs to destroy cash. Cash is already dying, via debit cards and mobile phone based payment systems.
This confusion between CBDCs and digitisation does seem to be widespread. I am not sure whether it is a deliberate ploy by the pushers of CBDCs, or whether it is just indicative of their lack of understanding.
If I can shed some light on this, you don't need CBDCs to destroy cash, but there is a difference between CBDCs and commercial bank money, which is that you could program a CBDC to automatically lose value over time (i.e. to have a built-in negative interest rate). This will only be an advantage, of course, if there is no realistic alternative to using a CBDC. You can follow the logic from there.
Definitely, I agree with you on this. I was just pointing out in passing that he had falsely implied that the introduction of CBDCs would itself lead to cash being used much less.
Industrialisation organised the poor and displaced county folks
into (blue collar) industrial army...That army soon recognised it had
a weapon. The Strike, which would gain it a share of the wealth it
produced...Come de-industrialisation came the loss of that weapon
for most...Without it the working class could not prevent the upper
class clawing back all the concessions they were compelled to make...
It's all there in "You'll own nothing, and you'd better be happy about it."
They signalled their intentions...
Careful who you sleep with. Bastiat is OK when windows are broke; but when we are broke, not so much. To say "The law (the state) can give nothing that has not first been taken from its owner." is incorrect - the kind of talk that got Liz Truss tossed. Economists (me and FB) tend to be fixated on income, (such as GDP) and what makes it wax or wane. Despite Adam Smith’s title, his great insights were not about wealth, but income.
Income is a FLOW ($ per unit time), whereas wealth is a STOCK ($X in my bank account). These are different kinds of concept, which respond differently to economic forces (I was about to say "laws"). The total stock of wealth in a country is determined by the willingness of the citizen to hold it (as gold or securities) rather than to pop down the pub and drink it (as a flow!). Clearly, the state’s laws affect that willingness, and recent centuries have greatly extended the range of instruments available for the citizen to do the required holding. The Bastiat aphorism applies only to flows.
One could even argue that a (perhaps the) basic error of our age, is that in this area the state should be doing much more than it is, and different. For example, it is surely a missed opportunity to force people to hold most of their wealth as an annuity, such as a state pension. The citizen is denied part of the possible range of choice over what he does with "his" assets. Imagine being told at 65 that you have a week to live, so that your family will lose most of your $100k a year. As Uncibal so often says, the state has a limited sympathy for family life.
.
Yes - the State loves 'flow' in general, because flow can be diverted, strengthened, weakened, etc. I wrote a post about this back around the New Year.... On the pension point, I believe you can actually now in the UK do what you suggest and draw down some or all of your pension if you wish - this was introduced about 10 years ago I think (I might be wrong).
You are correct on that UK detail. As you say, welfare is just one example of how the structure of economic policy (not the control function) is all about flow - and not only in the UK.
However, one can imagine most "distribution" policies, from welfare to education finance, being re-designed on "stock" lines. Better for citizens, to make their own decisions in a web of positive economic and social incentives with no nasty "poverty traps". Better also for politicians, who could offer much more generous benefits than today, without shattering glass ceilings at the PSBR. The ones to suffer would be welfare bureaucrats; vast numbers of whom would, by definition, find more productive work.
The scope for more generous benefits gives me a tiny hope that reform may one day be possible. Doing it piecemeal would of course be foolhardy.
Leftist and statist mid-wits blaming 2008 on deregulation just never ends. The FSA banking regulations, published only on their website as it was not feasible to print them, ran to 1,200,000 paragraphs. Yes, 1.2 million paragraphs of rules is ‘deregulated’ banking.
Then the idea the BoE needs more policy space to tackle recessions. For the love of God, they cause recessions by messing with interest rates. The natural rate is unknowable and the conceit of ‘controlling’ it is what causes boom and bust.
The rest of Mr Vleighle’s economics is risible. He and his ilk are either morons, or know better and are truly malevolent. Either way, letting him and his friends loose gives the state plenty of perpetually dependent rubes to justify its existence. It can do nothing else.
You are right, the state is not your friend and always has been your foe. 😉
Some of the cleverest people I have encountered are also the most profoundly stupid.
Great article David and deeply distressing.
If only there was something like a virus or something that killed predominantly old people that are the cause of these problems :/