Liberal Vision

Bad Economics Fortnight

It’s “Fairtrade Fortnight” - apparently… Don’t get me wrong. The people behind the “Fairtrade” brand (which is a brand just like Coca Cola. It is a brand. Full stop.) have good intentions. But what they believe in is bad economics. They are ultimately out-of-touch and misinformed and rely on woolly rhetoric and guilt-inducing marketing.
I think this facebook group says it best:

Fairtrade is a cartel that favours farmers in relatively wealthy countries (eg Mexico), who can afford to sign on to the Fairtrade brand, at the expense of those in the poorest countries, who cannot. Fairtrade incentivises the growing of cash crops, like coffee, which encourages the overproduction of these crops and locks poor farmers into a dependence on Fairtrade for their income. According to Oxford University economist Paul Collier, Fairtrade ensures that poor farmers “get charity as long as they stay producing the crops that have locked them into poverty”, perpetuating the poverty trap that Fairtrade claims to work against. We also object to the bullying tactics used by the Fairtrade cartel to get exclusive access to universities, etc, by having their rivals banned. This is a coercive measure that limits freedom to choose between different products.The only way to help lift the poorest farmers out of poverty is by boycotting Fairtrade and buying goods from the poorest, non-Fairtrade countries. Our alternative: Buy products from poor countries and spend the amount you save on real charity that helps the neediest, not a privileged elite of Fairtrade-sponsored farmers.

A good video:

Quote: “we don’t have a view on mechanisation…”

Oh dear…

Some more articles here:

Not So Fair Trade

The Poverty Of Fairtrade Coffee

Unfair Trade

All about Co-ops…

Here are a selection of posts from about the blogosphere on the Tories new Mutualist plans:

Positive:

Co-op Capitalism:

“Co-op’s are neither socialist or capitalist necessarily. Most hedge funds are co-ops, owned by the partners with the profits shared by the workers. Many law firms are co-ops, luxury apartment blocks are run by self-selecting co-ops, huge agri-businesses are run by co-ops of rich farmers, mutual funds are a form of co-op, the list is endless. Lefties might want co-operatives to be non-profit, organic wool knitters but the most successful ones are not. They do this because they are smart and don’t want a third party to profit at their expense. Co-ops have nothing to do with top-down state socialism as designed by Fabians.”

Co-operative Ownership - the Liberal Way:

“I have written before that co-ops and similar ventures are part of the rich tapestry of a market economy. After all, before the days of statutory regulation, the Stock Exchange was a mutual – you can’t get closer to the market economy than that. Co-ops and mutuals certainly have their limitations – access to capital and corporate governance being the two main ones. People complain about profit-making banks being owned by shareholders but mutuals can be captured by management and pay poor interest rates to savers and co-ops can be captured by a senior management clique without any possibility of facilitating change. There is a big literature on all this and I hope that Osborne’s team has read it. Neverthelessm, mutuals and co-ops definitely have their place. Three cheers for George Osborne’s attempts to create co-ops in the public sector then? Not yet.”

Co-op Dissonance:

“The Conservative Party recently re-asserted its commitment to allow co-operatives and other non-profit bodies to run public services on a contractual basis. It is an idea very similar to the adopted Swedish model of paying for schools, although there are a number of clarifications that need to be made. Whilst the ‘Free School’ model allocates funds according to the number of pupils being educated (i.e. according to outcome), the worker-co-operative proposals have hinged on the use of contracts. This means that while the penalty for a failing school will be the loss of pupils and a corresponding loss of revenues, ultimately resulting in the closure of a pupil-less school, the penalty for a failed contract is still unclear. The ‘Free School’ model means competition is automatic as pupils and parents are instantly able to choose and change the school they would like to attend, but a truly competitive environment based on contracts will be much harder to achieve with co-operatives, as each contract could essentially be a short-term monopoly on government-funded services for its duration.”

Negative:

The John Lewis State:

“If a John Lewis style primary school were a floperoo, would all the teacher-shareholders be sacked, or only the head? A resolution procedure for failing co-ops that didn’t harm pupils - or patients of community nursing teams - would plainly be essential. And what about the power structure within each co-op. Would all co-op members have identical shares and equal votes on strategy and management? Some headteachers, for example, would find such democracy profoundly uncomfortable. Or would there be a boss or senior management team, who would have both management control and the potential to pocket the bulk of any financial gains? The background to all of this - of course - is that revenues for public services will be under pressure for many years, as a result of the shocking state of the public finances. For the looming general election, there are few more important debates than how public services can deliver more out of less.”

Will Tory Co-ops take off?:

“The public finances are dire. The co-op business plan will have to assume the state will be paying less and less for their services over time. Yet somehow they’ll have to work out how to make a surplus to make the venture attractive. This could make sense with a high degree of flexibility over staff pay and terms and conditions. But in the case of nurses and teachers, contract terms would be transferred from the public sector, which gives the workers protection. So the flexibility will come in paying more, or paying any new staff less. Over time this will make a big difference and could be the basis for a decent business model. But big barriers remain, not least the generous public sector pension terms. Will the potential surpluses really be enough to convince public sector workers to become entrepreneurs?”

WTF???!!!:

Vote Blue Get Red?!:

“After they are ostensibly mutualised, social enterprises will be subjected to competitive tendering, internal markets and divisive incentive structures. The economies of scale and low cost finance available to large public sector organisations will also be lost. As an added bonus to the right, a serious wedge will be driven into national pay bargaining and public sector trade unionism further weakened.

In other words, forget all Cameron’s talk about ‘Conservative means to progressive ends’. The big idea here is to open up Jobcentres, schools and NHS trust to marketisation. Those guys remain as high on Hayek as they ever were.”

As if…

LibDems Are Officially The Most Kinky

It’s what we’ve always suspected…

Still, it’s nice to have a poll we come top in for a change (!)

EU SWIFT Vote Ends Bank Data Sharing

This is quite possibly one of the best things I’ve heard come out of the EU in some time and yet has been woefully under-reported:

The European parliament rejected an agreement on sharing banking data with the US yesterday, delivering a potential setback to long-running US efforts to track down terrorist financing.

Citing concerns about European citizens’ privacy, the parliament voted to scrap a deal that would have given the US continued access to data compiled by Swift, a co-operative that handles interbank money transfers.

The move means that for the first time since the September 2001 attacks, the US will not have access to large parts of the Swift database, which includes information from more than 8,000 financial institutions globally.

Crucially in this vote it was the Liberals (ALDE) who helped sway the vote in favour of our right to privacy. We should be very proud of the role LibDem MEPs played in ensuring this result. The end result was 378 MEPs voting to block the data sharing and 196 voting in favour of it’s continuation with 31 abstentions.

One has to wonder at the sheer nerve of the US:

The US had lobbied hard to keep the data flowing, with Hillary Clinton, the secretary of state, and Tim Geithner, the Treasury secretary, both contacting Jerzy Buzek, the parliament’s president, in an attempt to sway the vote.

The US Treasury had previously obtained the data through repeated subpoenas sited on US soil, but a decision by Swift to move key computer servers to Europe from last month means Washington must now persuade the EU to hand over the data voluntarily.

EU governments agreed, on an interim basis, to continue co-operation last November. Though some had reservations, most were swayed by US arguments that the Swift data led to valuable intelligence that could prevent terrorism in Europe.

No matter how the US try to spin this, it is a victory for the little people against the state. The US demands were grotesquely disproportionate to the threat posed by terrorism. Dutch Liberal rapporteur Jeanine Hennis-Plasschaert explained:

“If the US administration proposed something equivalent to the Congress – transferring in bulk all banking data on American citizens to a foreign power - we know what they would say”. In other words, the agreement provides for no reciprocity for the EU.

Robin Hood: A Libertarian Hero Defamed (!)

Amidst all this discussion of a “Robin Hood Tax” it occurred to me that collectively we seem to have seemed to have forgotten the story of Robin Hood.

Robin Hood famously “stole from the rich and gave to the poor”. But before socialists claim him I’d just like to point out one little detail. The poor were poor because of hugely punitive taxes. They were imposed by Prince John to fund the statesman’s extravagant lifestyle. A factor in turn augmented by an already heightened level of taxation due to his brother’s (King Richard’s) costly middle eastern conflict (the Crusades). You could say the fable holds some parallels with modern day Britain…

Far from being a socialist, Robin Hood took money off the wealthy elite and gave it back to those who had generated it in the first place, redressing problematic redistribution. Sounds like a libertarian to me.

Naming a tax after a man who is, by all means, a libertarian hero must surely be defamation!

Class War and Power Play

Here’s the reasoned piece on class war that I originally promised HoT:

The longer I am involved in politics the more I grow to dislike class war. The world in which class war exists is a world where no one holds political viewpoints beyond their own vested interests.

That’s a bleak view of humanity isn’t it?

Allowing class war to be successful is a consequence of an apologist society. If you are an administration that has been in power for 12/13 years you should not be able to absolve yourself from failure by simply saying “we’re not toffs”. The prospect of Labour doing this from now until the election is a wretched one, indeed.

But is there any truth to the claims that “Tories help the rich, Labour help the rest”? Well, yes. But what’s true of the Tories is also true of Labour. The Tories like wealthy individuals and Labour like wealthy organisations i.e. the Unions. Either way both parties facilitate power being transferred from the people to a small wealthy elite. They both protect the vested interests of the rich and use the apparatus of the state to do it. As for the LibDems, well, we are not powerful and/or important enough to have any vested interests at all. But if you can tell me the liberal equivalent of Lord Ashcroft or the Trade Unions, please, do let me know…

As far as I’m concerned class belongs in the same dustbin as the gender card and the race card.

Some of you may scoff at the suggestion that classism is as bad as racism or sexism but ‘class war’ does share similar characteristics with the former in that it is a reductionist proposition. It simplifies every issue and mode of human interaction to a single factor. If you are a feminist you see suppression and exploitation in every conscious decision and unconscious consequence. This, I hope you’ll agree, is an unattractive lifestyle and puts off many who sympathise with it’s proponents legitimate claims. The same can be said of classism.

Making the odd joke using a gender, race or class stereotype is funny. But using gender or race stereotypes consistently for political gain is now recognised as meaningless. The same should be true of class stereotypes. It is one of the most off putting aspects of UK politics and I look forward to a day when we can shake off this last residual hangover from our political past.

Clause 26 Update

The Liberal Democrats have moved a motion to decline a second reading of the Children, Schools and Families Bill.

CHILDREN, SCHOOLS AND FAMILIES BILL: Second Reading. [Until 10.00 pm]

Mr Nick Clegg Mr David Laws Annette Brooke Stephen Williams Dr Vincent Cable Mr Paul Burstow

   That this House declines to give a Second Reading to the Children, Schools and Families Bill because it adds hugely to the bureaucratic burdens on schools and colleges without improving real opportunities and educational standards for pupils and without genuinely empowering parents; its proposals for the regulation of home education introduce powers which are excessive and risk undermining key freedoms for home educators; it fails to put in place a coherent system for delivering school improvement; its provisions on family proceedings have not been properly consulted on and do not take account of existing reforms; and it does not include much needed policies to introduce a Pupil Premium to support the education of children from disadvantaged homes or to establish a new Educational Standards Authority to restore confidence in educational standards and to reduce the extent of destabilising political interference in English education.

Fabians, Co-Operativists and the Living Dead of the Left

The news that our Prime Minister was going to rake the Co-op Party over the coals for Labour’s GE manifesto upset me. It really did. Everything the man touches turns to dust before our eyes. I went to bed last night dreading the possibility that the sensible discussion on mutualist solutions that this country so desperately needs was never going to happen having been further cursed by Gordon “Jonah” Brown.

Those of you who read this blog will know that I’m not a big fan of the Co-op Party being an “affliate constituent” of the Labour Party. State socialism and mutualism are not compatible. In fact they are mutually exclusive. So all this talk of co-operative schools and housing settlements mean nothing in the context of a welfare state.

As Simon Cooke quite rightly points out there is nothing remotely ’socialist’ about the John Lewis Partnership. But there is a lot to be said for individuals having a stake in the company or institutions they work for and feeling more connected to the profit that they generate. But there has to be profit.

On further thought what struck me was this: why all this emphasis on co-operativism from Labour all of a sudden? I find unlikely that Gordon Brown is seriously considering dismantling the welfare state… But where are the Fabians? Am I the only one who finds it interesting, however, that instead of harking back and shoring up the core vote in the typical manner, the Labour Party are changing their tack slightly?

Could it be that the Labour Party’s faith in Fabianism is faltering? Afterall we literally cannot afford Fabian style social democracy anymore. I would so much like for this to be to an acknowledgment of that. Alas, I fear this is not likely. Instead what we’ll see is the conflation of the remains of Fabianism conflated with soft mutualist rhetoric, the unfortunate hybrid of which will taint the name of genuine mutualism for years to come. These are very sorry days for any genuine mutualists, indeed.

Breaking News: Mutualists Everywhere Weep!!

*literally puts head in hands and cries*

EDIT: I’ll deal with this tomorrow…

Make Your Own Cameron Poster

You know you want to, people…

More to follow (there goes my afternoon…) Send me yours at sara.scarlett@liberal-vision.org

[Ed - updated, another contribution, this time from Tom Papworth...]

From Sara: