Friday, June 16, 2006

More from the goldfish bowls

The experiment continues. This from the civilised (if occasionally rather touchy) debate at the Dirty Leftie's blog.

"I apologise unreservedly if I seemed condescending. I am trying to stimulate debate. I really do appreciate your politeness in not deleting comments (as most Left-wing bloggers do) and I did not intend to abuse it. I would sincerely like to get Britain’s political bloggers out of their goldfish bowls and into a real debate.

Yes, I have heard of Market Socialism - my turn to be condescended to, I guess. I work in it. I live and work in Russia, but most of my deals are structured offshore financial transactions under English Law.

I have observed in 25 years as a business lawyer the level of detailed regulation which is required to suppress market-driven conduct of which Socialists do not approve. I have observed that the best brains in any Market Socialist economy are ranged on the one side in the Finance and Economics Ministries and on the other side in the upper echelons of the accountancy and legal professions. People who could otherwise be genuinely creative spend their lives engaged in sterile, unproductive - albeit fun- combat.

It’s a great game. If you are a tax lawyer, the government gives you a whole new playset every year. It’s more fun than Sudoku, and it pays. But it creates no wealth - whether for individuals or for society. All of us, whether Socialists or Capitalists, need wealth to be produced. Surely we only differ as to how and for whom?

Year on year, the volume of regulation rises. Year on year, the means of circumventing the regulations become more elaborate and expensive. This diversion of talent is one of the reasons I would almost prefer the honesty of a command economy to this approach. A command economy is at least theoretically capable of rational regulation in the best interests of all (although history shows it always degenerates into Prescottism - by which I mean the allocation of wealth and privilege on a political not an economic basis).

“Democratic Socialism” inevitably creates an unholy muddle of regulations, precisely because of the need to sell them to an electorate. To maintain itself in office while increasing regulation to “stifle” the market, a Democratic Socialist government needs to promote hostility to and mistrust of business.

That is the problem. Private business creates the wealth for the Social Democratic programme, but the negative propaganda required to keep Social Democrats in power militates against more citizens becoming business-people. It actually encourages more and more talent into the regulatory agencies of the State. Perhaps the brightest pupil recently to leave my childrens’ school now works alongside Gordon Brown. She had talent, creativity and energy. But she will never produce anything of value, economic or social. What a waste. But what a very logical choice for her and an encouraging one for you. She is a bright young woman who anticipates decades of Socialist market-stifling. It’s obviously more fun to be stifler than stiflee! Replicate that decision a few thousand times and you have a future in which the best talent is unproductive.

It may be a contentious statement, but I would argue quite seriously that Chinese Communism provides -at present - a more business-friendly environment than British Democratic Socialism. [Before you throw the iPod sweatshops in my face (and I have to throw the Morecambe Bay cocklers in yours) please understand that I don’t approve of either system.]

I accept that you do not seek “to impose this system”, but this system is experienced in practice as a series of impositions. Of course, business people suck up to Social Democrat governments in the hope of mitigating their horrors or perverting their powers for gain, but it would be a very foolish person (Tony Blair, Gordon Brown?) who actually believed the flattery.

The only positive benefit a Socialist government can bring a business is by creating “barriers to entry” which restrict competition and therefore shaft the consumer. We should expect the business environment in Britain to become closer and closer to that of France, as big business and government increasingly live in each other’s pockets exchanging corrupt advantages to the detriment of the ordinary citizen.

Democratic Socialism as opposed to Communism (the only difference, as Marx saw it, was the route by which the objective was reached) depends on a majority of the population agreeing forcibly to modify the behaviours of a minority; the very minority which has the skill, enthusiasm and appetite for risk to create wealth.

Much regulation misunderstands the nature of the relevant business. For example, lawyers, most of whom spend most of their professional energy helping businesses to comply with laws, are required now to “shop” clients whom they suspect may have broken some. In consequence, clients are now careful to edit information provided to their lawyers. This prevents the lawyers from advising correctly on compliance. Therefore more business people are criminalised. Another example of the law of unintended consequences, one of only two universal laws.

I really would be interested in your replies to my earlier questions about how to make markets work under Socialism. They were not facetious. I am really interested to know how you would get me out of bed in the morning if I was paid as much to stay there. “Standing up or lying down, it’s six zloties an hour” was a proverb in Socialist Poland, as was “If you don’t steal from the State, you steal from your family.”

Go for it. Maybe you will convert me. I was an active Communist in my youth (hard though I find it now to imagine what was going through my mind), so I have an established vulnerability."

Because equality is obviously Disgusting

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