Espousing libertarianism

Over at the Libertarian Alliance blog, Keir Martland has written of what he views as a failure of the LA to advance the Libertarian cause in a significant way, and an analysis of the various other ways that might be tried—ending with the rather depressing idea that we should just carry on with more of the same.

I left the following comment...

As someone who has tried to push libertarianism in a number of channels—through a widely-read and deeply offensive blog (which I know converted a few tens of people); through pushing libertarianism in, and writing policies for, UKIP; to helping start the UK Libertarian Party—I can say that the main problem is that the majority of UK people do not take to the philosophy.

The blog became hard work to continue writing (and started threatening my real life work); UKIP has edged back to more statist policies in order to win votes (especially in the north); and the LPUK has never really gained traction (partly because it is under-funded, and run by part-time amateurs who, like most libertarians, rather despise the political process that they are nominally part of).

So, what is it that the British people do not like about our philosophy? The answer is rather interesting—and gleaned from my (admittedly random and anecdotal) surveys of people in pubs.

People are worried about the effects of a smaller state on other people.

I have spoken to people that are pretty poor, and many who are in receipt of benefits. Some have been aggressive, some dense—but most not. Most people would prefer that the state would leave them alone: most proudly (and perhaps unrealistically) opine that they could make a living without benefits, because they are capable people.

But what (they say) about the really poor people? What will happen to them—how will they cope? Today, these "poor people" are as mythical as the rich, top hat-wearing, cigar-chomping capitalists of Victorian yore: but it these people that ordinary British people become concerned about when one discusses the shrinking of the state, and the curbing of Welfare.

As such, two things need to be done:

• there needs to be a comprehensive libertarian philosophy of welfare. For me, this is based on voluntary contributions, along the lines of the successful Friendly Societies of the late 19th century (and which were destroyed by the introduction of state National Insurance in 1911). A development of this policy enables libertarians to answer the worries of the "man in the pub";
• libertarians need to find a way to communicate to the "man in the pub"—because there are vastly more of them than there are libertarians (currently), and hugely more than there are academics. And the man in the pub most certainly does not read academic treatises.

The way into the discussion of libertarianism should be based on the ideas that the state interferes too much in our day-to-day lives (the man in the pub often likes a smoke, and he certainly likes a drink), and that the promises that the state makes cannot be counted on. If the state promises you welfare, what guarantee do you have that it will deliver? As Lando Calrissian said, "this deal just gets worse."

People are surprisingly libertarian for themselves, but they are also surprisingly worried about these mythical poor people—an underclass whose existence the media and the government have an interest in perpetuating.

Anyway, that's my take on it. For what it's worth.

I also left out one rather crucial element, which those who have read The Kitchen or heard me speak will remember: we need to have a credible transition plan. You cannot simply convert to a system of voluntary Welfare overnight:

• first, the institutions to support it do not exist;
• second, the culture of voluntarily saving for problems does not exist in most people.

Both of these need to be addressed, and both will take time.

Luckily for us, the Tories are trying (with only moderate success) to address the second part: however, and perhaps through necessity, they are using—forced withdrawal of benefits, forcing people to do their own budgeting through Universal Credit—rather than cultural change. It may be, however, that this force is a necessary first step to start this transition—time will tell if this shock therapy works (if the electorate allows it to continue, of course).

Whatever happens, I am pretty sure that speaking to academics (most of whom are on the Left) is going to change very little.

UPDATE: a follow-up comment in response to someone else...

I would generally, these days, call myself a "minarchist libertarian" or "classical liberal".

Either way, I don't really think that a libertarian government should have any policy on whether mutuals or businesses are best for making money—after all, even our very statist governments don't bother getting into that debate.

And, yes, the state shouldn't dictate what marriage looks like. But it does because it bases some state benefits on defining what marriage is: remove those benefits, and then the state has no business defining marriage.

As I have frequently outlined, the Welfare State puts us all in hock to the state—which gives it licence to define our actions. Remove state welfare, and you remove any moral or economic justification for the state to dictate how we live our private lives (as long as we do not initiate force or fraud against someone else's life, liberty or property).

How many times have you heard some draconian policy justified because "it costs the NHS money"? The Welfare State is the crux of statism—and thus dealing with it *must* be the priority of those who are anywhere on the libertarian spectrum.

Removing it should be a uniting force for our movement: to do that, we need to describe how we would avoid people starving on the streets, etc. All of these are more important to the general people (and voters) of this country than abstract wibblings about esoteric policies that no one understands or cares about.

By the way, I added the links to previous posts here, for reference, but not in the original comments that I left.

UPDATE 2: links to my major essays on Friendly Societies can be found below.

• an expansion of a talk on Welfare, that I gave to the Adam Smith Institute in April 2010;
• an expansion of my part in a debate on liberty that I took part in at the IEA in July 2010.

Both deal with what a voluntary Welfare State might look like, and lean heavily on Friendly Societies to achieve that aim.

Actually, the poor did cause it

Caroline Lucas: demon.

It is raining hard right now, and this makes me happy.

Why?

Because it will hopefully ensure that the "tens of thousands" of people marching against "austerity" have a thoroughly miserable time.

The protest is expected to draw 75,000 people according to its organisers who are a broad coalition of left-wing political groups.

It began outside the Bank of England at noon followed by a march to Parliament Square where a rally is expected to take place from 2:30pm until 5:30pm.

Damn. It looks like all of these brave Social Justice Warriors will have already been in the pub, drinking expensive cider before the rain really hit. So, it seems that your humble Devil will have to derive his satisfaction by sitting here (armchair warrior that I am) and mocking them instead.

So, no doubt a number of publicity-seeking slebs will be there—who has deigned to walk with the great unwashed, I wonder?

Among those better known faces attending are comedian and activist Russell Brand, Guardian journalist Owen Jones, singer Charlotte Church, Unite general secretary Len McCluskey, Green MP Caroline Lucas, and Labour leadership contender Jeremy Corbyn.

Charlotte Church? Marching with an estimated 75,000 people? Gosh.

A couple of weeks back, on Facebook, I urged Charlotte to heed her own advice and pay more tax.

Dear Charlotte Church,

I think that it's lovely that you would be happy to pay 70% tax (albeit with provisos). However, I suggest that you make the first move, and send all of the extra tax to:

The Treasury,
1 Horseguards Road,
London.

You can tell those nice mandarins what budget you'd like the money to go to, and we can see how generous you've been.

Further, I am very much looking forward to the Treasury's coffers being boosted by the similarly generous contributions of all of the people who will be joining you on the anti-austerity march.

If they all follow your example and pay tax at 70% for the rest of their lives, I am sure that the government will be able to support poor people much more generously.

Thank you in advance—you are a true philanthropist.

Regards,

c

Alas, Ms Church back-tracked somewhat—she said that, even if she did pay extra, it really wouldn't sort anything out. Rich though she might be, her donation would be barely enough to keep the government running for more than 5 minutes.

But, just think, Charlotte: if only you were to stand up at this march and urge these kind socialist souls to join you in paying more—perhaps you and the 75,000 could raise meaningful amounts of money, year after year. A few days later, the Spectator embraced the suggestion—even being considerate enough to urge the Treasury to make it easier for these rich people to donate their cash.

At the end of our tax returns, we declare how much tax we owe. Osborne can introduce a new line in the tax return saying: if you think this isn’t enough, how much extra would you like to pay? People like Ms Toynbee and Ms Church can then fill in the extra so they can pay 50 per cent, or even 70 per cent, if they like.

This ‘nudge’ tax reform would be consistent with the liberal principles of a Conservative government while allowing left-wingers to act along with their conscience and hand over more of their income to the government.

So next time, rather than complain that they would be happy to pay 70 per cent tax, such people can proudly claim that they do pay 70 per cent tax. And they will have the tax return to prove it.

The Speccie even has the decency to address Charlotte's complaint that paying more tax would make little difference.

Those saying that this voluntary tax would not make much difference are mistaken. The US runs this a similar (here) and under Osborne a huge share of the tax is drawn from tiny number of people. The best-paid 1pc now contribute 27pc of all income tax. The top 0.01pc pay 4.7pc (an average £2.6m each). The Charlotte Churches of our country – the 1 per cent, if you will – have never shouldered a greater share of the burden. So if she volunteered to shoulder an even larger share, it really would help bring an earlier end to austerity.

This change, alongside Charlotte Church's fine example, really could make a difference—at least 75,000 people putting their money where their mouth is, and actually paying more tax. How heart-warming.

Of course, all of this does rather assume that these protesters are paying any tax at all. I would bet that a pretty hefty chunk of them are, in fact, nett beneficiaries of the state. Apart from anything else, a great many of them are almost certainly students, complaining that "austerity" is restricting the frequency of their ski holidays or something...

But hist! Who is this grinning loon, her evil shark-like eyes darting amongst the crowd? Why!—it is that bastion of barminess, Dr Caroline Lucas MP! Hooray for the good doctor (of Elizabethan literature)—lang may her lum reek, as they say in Scotland (apparently). I wonder what words of wisdom will drop from her lips...

Green MP Ms Lucas, who held onto her Brighton seat at the last general election, has spoken to packed crowds in Parliament Sqaure: "This Government is continuing to punish the poor for an economic crisis they didn't cause.”

Well, this is a bit of a problem, isn't it? I mean, I don't want to be indelicate, but it is precisely the poor who have caused this "economic crisis".

After all, the trigger for the banking crisis was people who walked away from mortgages that they couldn't afford to pay. A great many of these people were... well... "the poor". (Especially at the point that they couldn't afford to pay their mortgage.)

For sure, this was exacerbated by over-leveraged banks trading mixed assets and, yes, in the UK we did bail out the banks. But we did, at least, bail them out by buying shares: and selling these shares (and sundry others charges to the state) will, in fact, make an estimated £14 billion profit for the British taxpayer. In fact, the government has been profitably selling Lloyds Bank shares for some months now.

But the "economic crisis" was exacerbated in the UK by the fact that the government was already running a pretty hefty structural deficit all through the boom years. And what was the largest part of this spending? Why—supporting "the poor", of course.

And, of course, the Coalition and, now, Tory government has also been massively over-spending too. And who are the main recipients of this money? I'll give you a clue, Caro—it's not "the rich" because they don't need it.

What? Yes, that's right, the main recipient's of this cash are "the poor"—'cos that's how redistributive welfare works, y'see.

When looked at it that way, Caroline, the poor are, in fact, the primary cause of this particular economic crisis. I know it sounds harsh but it is, from this perspective, actually true.

So, I'm sorry, Caroline: on this—as on every other topic on which you offer your utterly valueless opinions—you are wrong.

Bad show—better luck next time, old girl.

Now don't let the door hit your scrawny arse on the way out, will you?

UPDATE: Obo the Clown highlights some more rampant stupidity from "doctor" Lucas.

76% didn't vote for this Govt - Osborne has no mandate for austerity. He wants to shrink state not cut deficit #EndAusterityNow #JuneDemo - Caroline Mucus

That's lovely, Cazza, but as was immediately pointed out to her, 71% of the people in Brighton Pavilion didn't vote for her, so is she going to resign out of principle?

She really isn't very bright, is she?

UPDATE AGAIN: Longrider's final comment might be the most pithily offensive I've seen today.

Hundreds have gathered with placards reading “No cuts” and “Stop Union Busting” and celebrities such as Russell Brand and Charlotte Church have joined protesters on the street.

Oh, right, Britain’s finest brains, then.

Heh.

The problem with healthcare

Some of you might have noticed that there is a lively debate going on in the US Supreme Court over the so-called Obama-care Programme. Whilst the wife has been avidly reading the transcripts—with some interest, outrage and amusement—we have been debating the more general point of how healthcare is delivered.

It's a tricky subject—not least because it is emotive and, as such, tends to give rise to bad headlines for politicians when the inevitable rationing happens. Because the really big problem with all healthcare systems is that there simply isn't enough money to pay for what is desired (if not absolutely required).

All of these debates about the actual delivery and payment of healthcare—both here and in the US—simply doesn't address the basic problem of healthcare being massively expensive. I would like to posit some reasons, and put forward some hopes of solutions.

The first pressing problem is that healthcare services are extremely prone to Baumol's cost disease.

In line with the government’s 2% inflation target, the Treasury’s assumption is that productivity in the economy as a whole will rise at 2% a year and pay at an average of 4%. Hence, if pay in the public services is to remain competitive with that outside, it must rise on average by about 4% a year. So to be able to afford the same number of staff in any particular service, expenditure also needs to go up by 4% a year – a “real increase” of 2%. The problem for services, such as health and education, and for the armed forces, is that they need such a “real increase” to keep the same number of staff to maintain existing standards, because there is little or no room for improving productivity.

As Timmy points out, there are ways to mitigate for this—particularly in how services are delivered.

The reason being that productivity in services is merely more difficult to improve, not impossible. Only if you say that a near monolothic organisation of 1.4 million people is the most efficient manner of delivering health care to 60 million people can you say that the NHS productivity cannot be improved. And that certainly ain’t an argument I’m going to try and make.

One obvious method of improving efficiency would be to abolish national pay bargaining... but no one has the balls to try that as yet unfortunately.

There were rumours that Osborne was going to do so in this budget and certainly is seems that the government is moving that way. And there is no doubt that the NHS could be run more efficiently—especially if the providers were not run by the government and thus had some efficient way of measuring quality.

One of the biggest goals in healthcare service delivery must be to adopt the strategy of manufacturing and remove, as far as possible, as many people from the delivery as possible. Now, there are many ways to do this, but one of the most exciting is to harness new technologies as much as possible—like, for instance, being able tobuild new organs or even print new kidneys (truly amazing video)!



Just think: although it's still a prototype (both printer and organ), that machine can print a new kidney in seven hours. And that kidney can be printed from the recipient's cells.

Just consider the cost reductions over conventional treatment—no cost of keeping the patient on dialysis for months or years whilst waiting for a donor; no surgical teams required to remove the organs from the donor; no need to go through the whole thing again to replace the organ after ten years; no drugs required to deal with rejection nor having to treat the patient for the panoply of diseases inevitable with immunosuppressant therapies.

We are on the cusp of a healthcare revolution—where technology really can start to make healthcare delivery cheaper.

One of the other big costs is drugs, and this is largely a political problem. To make you marvel and to illustrate this point, I'd like to introduce you to bexarotene. Bexarotene is a cancer drug that has been approved by the US Food and Drug Administration for a decade (this is important later on).

Now, bexarotene has been shown to be immensely effective in the treatment of Alzheimer's disease—not only can it slow it, but it seems likely that the drug can actually reverse the effects.

In the study described below, the cancer drug Bexarotene quickly and dramatically improved brain function and social ability and restored the sense of smell in mice bred with a form of Alzheimer's disease.
...

Within hours of taking the drug, amyloid plaques began to clear out of the mice’s brains. After three days, more than 50 percent of the Alzheimer’s plaques had disappeared, and the mice regained some of the cognitive and memory functions typically lost in Alzheimer's disease.
...

Neuroscientists at Case Western Reserve University School of Medicine have made a dramatic breakthrough in their efforts to find a cure for Alzheimer’s disease. The researchers’ findings, published in the journal Science, show that use of a drug in mice appears to quickly reverse the pathological, cognitive and memory deficits caused by the onset of Alzheimer’s. The results point to the significant potential that the medication, bexarotene, has to help the roughly 5.4 million Americans suffering from the progressive brain disease.

Sounds pretty cool, yes? Alzheimer's is not only an incredibly expensive disease to treat, it is extremely distressing.

When I worked as an Auxiliary Nurse in a medical centre, I saw people with progressive brain disorders such as Alzheimer's. One woman was nothing more than a still moving shell of a human being—no thinking human being existed inside her. She simply wandered about making a soft ululation day after day: when she got to a wall, like a wind-up toy, she just kept walking and walking against the wall.

Another time, I had to comfort a twelve year old boy because his father no longer recognised him. These patients had been there for years—at a cost of more than £1k a week—and would be there for years more.

A drug that could stop all of this would be amazing. But there are a couple of problems.

First, bexarotene is pretty expensive.

How much does Targretin (Bexarotene) cost?

Targretin is a tier 5 drug, this means it is very expensive. An Internet search indicated that 30, 75mg capsules cost $1,156.64.

Now, we might guess that this is probably still considerably less than £1,000 a week (minimum) in a nursing home but actually we don't know—and herein lies the rub.

Despite being approved for the treatment of cancer at specified doses, bexarotene, and the dosage, would need to be re-approved by the FDA for the treatment of Alzheimer's. And, as we all know, that kind of testing costs a lot of cash.

Will the drug company stump up for it? No. Why? Because bexarotene is about to come out of patent.

Unfortunately, the drug is going to have to go through several rounds of clinical testing before the drug is approved for Alzheimer's. This will takes years.

Will the drug ever get tested and get approved by the FDA for Alzheimer's? The current drug Targretin is scheduled to lose its patent in 2016. So, in order for Targretin to be financed into a Phase 3 clinical trial it will need to be re-engineered and re-patented to make the numbers work. In other words, it is unlikely that anyone is going to step up and finance the testing of a drug that is likely to be an available generic by the time it is approved for Alzheimer's patients.

And there we have the big problem with drug development.

It takes something like 8 years and $600 million to get a drug approved by the FDA for the treatment of humans. Those are big numbers, and it is why we have Big Pharma. I know a couple of people in Edinburgh who run small drug research labs; when they find something promising, they sell the patent to Big Pharma because only big corporations have the colossal amounts of cash required to get a drug to market.

And the patent life for a drug is, if I recall correctly, about 14 years. So, you spend 8 years bringing a drug to market and then you have about 6 years to recoup over half a billion dollars. As the Americans would say, you do the math.

This problem is only going to get worse as we move towards personalised treatments; if the regulatory agencies insist that every drug tailored to an individual—because that is the kind of breakthrough that we are looking at—need to go through this kind of approval process, then we may as well kiss tailored treatment goodbye.

There needs to be a fundamental rethinking of drug regulation: either it needs to be relaxed, or the patent life needs to be extended.

So, both technology and relaxed regulation can play a part in ensuring that we—the customer—get more healthcare for our limited resources, i.e. cash. But, you can bet that these innovations will be fought tooth and nail.

The medical establishment and the unions will fight to the bitter end to protect their own interests—as we have seen with the Healthcare Bill in this country. After all, the bastards of the BMA were happy to destroy the Friendly Societies and oppose the NHS because they believed that each of them were opposed to doctors' interests—they couldn't care less about patients and never have. The same applies to all of the other trades unions.

And governments love their regulation, oh yes. And so do big corporations because they are set up to deal with them. The people who lose out are... well... we poor idiots who pay for it all.

Technology will make us freer, happier and richer than ever before: the forces of conservatism will stop that if they can...

Great minds, and all that...

Back in December, the wife wrote the following in a short post musing on the Welfare State...

Seriously? No, seriously?

Just cut out the middleman and let rich people sponsor a poor person. There would be less waste in the long run, jobs for council workers (the OKCupids of wealth patronage!), and a powerful social impact.

After all, why give your money to charity when you can give it to your own impecunious client?

... and today, Blue Eyes posts one of his increasingly infrequent missives.

I’ve got an idea.

Instead of running an entitlement-based welfare system where Parliament decides the rules and then makes up taxes to pay for it, how about a sponsorship system. The system should match up contributors and recipients in, say, a local area and provide information for the sponsor. The sponsor would get to see how the people he/she is funding are getting on and the sponsored might be encouraged to persuade the sponsor that he/she is getting value for money. Sponsors might even want to give advice to their mentorees to help them get on in life.

Those wanting to receive money from benefactors should have to provide certain information in return for their money: what is the money going on, how are the children getting on at school, how is the job hunt going?

If all this sounds quite intrusive to you then that is the idea. It’s about time the relatively small number of people who pay for the huge all-encompassing welfare machine got a little bit of influence on it.

Sounds good to me.

One of the biggest problems with the Welfare State is that the recipients truly believe that their money comes to them—not as charity, nor as pay-outs on insurance payments that they have made—but as of right.

Which, of course, partially it is. The idea that one should be ashamed of living off the hard work of others has long gone; similarly, as politicians have sought to bribe ever larger and more biddable swathes of the electorate, the idea that one should first have to pay into the system in order to get anything out of it has become similarly redundant*.

Long-time readers will know that I consider the National Insurance Act of 1911 to be—as viewed over the long term—one of the stupidest and most evil acts ever passed by a British government. (Had it remained as it was intended—that is, buying Friendly Society memberships for those who could absolutely not afford them—then its consequences might have been mitigated.)

As it turns out, that Act simply started the rot.

Because the doling out of subsequent monies to those who have never paid a penny into the system—and which often rewards them for doing the most perverse things, such as having myriad children which they can neither afford nor properly care for—must be some of the wilful, stupidest and downright evil acts in history. Especially, I say again, the bit about encouraging them to have children.

So, as an alternative to simply stopping these payments overnight, perhaps we should consider Blue Eyes's and Bella's proposals...

* Unless, of course, you do actually pay in—in which case you must prove you have done so in order to get a brass farthing of your insurance. Especially if you are freelance.

Quote of the Day

It seems that your humble Devil missed the sixth birthday of this blog, which occurred on the 13th of this month—still limping on!

Anyway, here's a quick quote of the day from Dumb Jon, regarding the Benefits Cap.

See, that's the penalty of basing your policy platform on appealing to a tiny slither of North London. You really do start to think that an income equivalent to £34K gross is the equivalent of Dickensian poverty.

Meanwhile, that creaking sound is one of the central pillars of the left's platform collapsing into dust. They've spent years telling everyone that the Tories are heartless. Now they've got to explain that by 'heartless' they mean 'opposed to taxing people with jobs so they can give some other people more for watching TV than most of the country earns working full time'.

Quite—it is an utter scandal. As far as I am concerned, this state of affairs simply isn't defensible in any way. And it seems that, according to Liberal Voice of the Year (by a massive margin) Mark Littlewood, the majority of the country agrees...

Only around 10% of the electorate oppose the principle of an annual cap on benefits. Approximately 80% support the cap being no more than £26,000 and about 60% think Iain Duncan Smith’s policies are, if anything, too generous.

However, I also think that the Tories are shying away from the most necessary reform—we must cease paying for the unemployed to have children.

If you would like to be kind about it—we don't want retrospective taxes, etc.—then you announce, very publicly, that nine months from now there will be no child benefit of any sort.

Obviously, the unelected and utterly irrelevant Bishops will kick up a stink but fuck 'em, frankly. We cannot afford to keep paying those who will not work to have children (preventing many of them working for another 18 years) who will then also not work—but who will beget yet more offspring who will also not work, and so on and so forth.

Stop all Child Benefits now (or in nine months)! You know it makes sense.

Anyway...

In the meantime, the massive piece of software that your humble Devil has been working on has just been through it's first alpha testing phase—and received an average score (from actual customers) of 4.5 out of 5. Needless to say, we are very happy!

We are now moving into beta and we should be finished, a little behind schedule, in mid-February. And then comes the challenge of the full release...

In addition to this, I have been inveigled into taking part in another Barnes Charity Players production—this time playing the irrepressible, and slightly sociopathic, Frank in George Bernard Shaw's Mrs Warren's Profession. This is already proving to be fun but, with the run starting on 20th of February (until the 25th), life is a little full right now!

Anyway, your humble Devil hopes to be a little more active around mid-February, although I shall attempt to post a little more frequently in between now and then.

Even should I fail to do so, I hope all of you have lots of fun in the meantime!

UPDATE: A Very British Dude opines on the Coalition's tactics here, and then finishes up with the kind of sentiment that the vast majority of the people in this country agree with.

The idea that an income equivalent to a salary of £34,000 "will thrust families into poverty" is absolutely abhorrent to the people who are forced, by the threat of expropriation and violence, to pay for it, people who are sneered at as "middle class". I would not be surprised if the Government quietly persuaded enough of its supporters in the Lords to stay away from yesterday's vote, to ensure a right royal battle on ground on which it is absolutely certain of the public's support.

Good luck, lefties, trying to persuade anyone that an income equivalent £34,000 a year salary is going to thrust anyone into "poverty". I suspect the Government is absolutely delighted to have this in the news for a few more weeks. "Labour wants to pay its voters more than you earn".

Quite.

Treat kids as money boxes...

Regular readers will know that some of the benefits that your humble Devil gets most angry about are those surrounding children.

There are two strands to this ire. The first is a simple indignation that I—a childless man whose lifestyle is not only unsubsidised but heavily taxed (and sometimes illegal!)—should be forced to subsidise the lifestyles of those who choose to have children.

The second is based not on petulance but on a real concern for the kind of mentality that child benefits induce. Let me elaborate...

This year, it was reported that some GCSE students were visited by Michelle Obama, and one of them found herself inspired.

... before meeting Mrs Obama, Talitha didn’t see the point in school. She hung out with kids who didn’t take work seriously and was ready to throw her life away—to become a "stereotypical baby-mum", as she told the Times.

Why? Why would you saddle yourself with an expensive, time-consuming, helpless human being? Yes, all your friends may be doing it—but why are they saddling themselves with an expensive, time-consuming, helpless human being?

Because they will be paid for doing so.

More importantly, why should a visit from a strong woman convince Talitha that her hitherto chosen route may not be, y'know, entirely fulfilling.

Because using another human being simply as a way to gain money and a council flat is a pretty low ambition. And not just "low" as in morally suspect, but "low" as in "a pathetic way to waste your potential".

No, I'm not doing down those who choose to be mothers because they want to care for a child: I am condemning those who want to have a child because they cannot think of any other way to fulfil themselves—or, in too many cases, to make a living.

And of course critics tell me that no one would actually have a child simply for the money—that would be awful. Well, yes—yes, it would.

The 36-year-old woman is accused of shaving her son’s head and eyebrows and forcing him to wear a bandana to school to make it look like he was receiving chemotherapy.
It is alleged she then swindled the authorities by claiming a carer’s allowance, tax exemptions and a disability allowance for the boy, who is now aged nine.
Gloucester magistrates’ court was told how the mother allegedly forged doctors’ notes and prevented the boy and his seven-year-old sister from taking part in school activities by leading them to believe they were too unwell.

Of course I object to the £100,000 scammed out of our taxes by this pathetic excuse for a human being. But more, I object to the way in which she treated her poor children—she made them suffer simply so that she could get more money.

But what do you expect when our entire benefits system is set up to encourage people to pimp their children?

It's only a matter of time

On the 25th of September, Dr Eamonn Butler wrote the following over at the ASI blog...

So, the eurozone and the IMF are putting together a £1.7 trillion fund to save Greece (and for that matter Portugal and Ireland) and stave off a default. Right?

Wrong. The whole purpose of the £1.7 trillion is not to give aid and comfort to Greece. It is designed to give aid and comfort to the European banks who are stupid enough to be still holding Greek debt when Greece is obviously bust. It is intended to allow—and indeed it will hasten—the inevitable default of a country [Greece] that is overspent, over borrowed, that cannot pay its way and shows no sign of putting its house in order—not one single member of its bloated and lazy bureaucracy has been let go, not one single item in the Greek government's bizarre portfolio of nationalised firms has been privatised.

And yesterday morning, I wrote...

... throughout the Western world, both states and the banks that have bought their bonds are, effectively, bankrupt.

Not only this, but the various governments do not even seem to understand that they are bankrupt, and are continuing to spend far more than their income; their one concession to the problem being to mutter futilely about cutting a few billion—out of structural deficits of many tens of billions—at some point in the next decade.

Even in Greece, public sector workers strike and riot as though their government had any alternative to the—frankly risible—cuts to public spending.

And tonight, I am greeted by this wonderful little nugget on the BBC website...

Greece has said its budget deficit will be cut in 2011 and 2012 but will still miss targets set by the EU and IMF.
...

The figures come as inspectors from the IMF, EU and European Central Bank are in Athens to decide whether Greece should get a key bail-out instalment.

Greece needs the 8bn euros (£6.9bn; $10.9bn) instalment to avoid going bankrupt next month.

Bankruptcy would put severe pressure on the eurozone, damage European bank finances and possibly have a serious knock-on effect on the world economy.

These politicians simply aren't taking this seriously, are they?

There is, I think, not one single Western economy that is not up to its eyeballs in debt: the vast majority of them are still running colossal, unaffordable deficits that are adding—every minute of every day—to that eye-wateringly massive pile.

And yet these politicos and technocrats keep throwing these vast sums of money about with the air of a millionaire lending a tenner to his mate—as though these vast sums of money were peanuts in the grand scheme of things. Not only are they not peanuts, they are largely illusory—there is no value behind the paper anymore.

In the meantime, the banks keep on buying the government debt hoping that—when the inevitable crash comes—the governments will not allow their buddies, the banks, to fail. In the end, there will be little choice.

Ultimately, the European Central Bank can print as much money as it needs: but, when it does so, the amounts required will be so mind-bendly massive that hyper-inflation will be the inevitable result.

The Western governments—and, just as importantly, their peoples—need to open their eyes and realise that this cannot continue: they need to understand a very simple, blindingly obvious fact...

The social democratic model—funded, as it is, on ever-increasing state spending on special interest groups using fantasy money—is bust. Kaput. Gone. Fucked beyond all measure.

And they need to realise it quickly. Because the impending crash is going to be bad enough: but the longer it goes on, the worse it will be...

Ponzi schemes to the left (of the pond) and Ponzi schemes to the right (of the pond)...

In My Arrogant Opinion has a very succinct quote about US Social Security...

Really, the only way Social Security isn’t like a Ponzi scheme is that knowing it’s a scam doesn’t protect you from it.

He also links to this amusing video, in which a young man rings up the US Securities and Exchange Commission (SEC) and attempts to report this disgusting fraud—using the SEC's own definition of a Ponzi Scheme as a reference.



As regular readers will know, your humble Devil has—for many years now—repeatedly (and at length) pointed out that our own dear National Insurance is, in fact, a colossal Ponzi Scheme. Indeed, I reinforced this fact in a conversation with JohnB [Blockquotes are JohnB's points.].

John,

Some benefits and pensions are qualified by time spent paying NI; some are not.

NI is supposed to cover health care, state pension and unemployment benefit.

All are paid out of general taxation. Some taxpayers pay NI; some don't. All the money goes into the same government pot.

Receipt is supposed to be on the basis of money paid in (which is why freelancers sometimes get shafted); it is not so long ago that you could be refused certain benefits on the basis of "not having paid your stamps".

The point about a Ponzi is that there's no underlying revenue source.

That's not entirely true: Ponzi did have a revenue source—as did Madoff. What neither of them had was a sufficient revenue source to cover the pay-outs that they were making (and advertising).

By any measure, that curently applies to the British state: it does not have the money to pay out what it advertised to "investors".

Because it is the British state, it can—and does—borrow vast amounts of money to cover the pay-outs, but it cannot do so for ever. For a long time, yes; for ever—no.

Even if the government could take the entire British economy in tax (which would, of course, destroy it), it could still promise more than it could deliver.

As it is, the government is advertising returns that are far, far in excess of its income (feasible tax) and, eventually, its ability to pay: it pays the returns to people with their own money or with that of newer investors (in the case of pensions, the next generation).

This is, quite obviously, a Ponzi Scheme.

And if you doubted that the government is unable to afford the most basic of the National Insurance payments. As from next year, we are all going to be taxed another 8% in order to pay for our pensions.

Yes, indeed—starting from next year, we are all going to have to start paying into a compulsory pension scheme.

(Well, I say "all"—but, of course, it only applies to those who have jobs. People who have never worked in their lives can continue merrily to pay fuck all.)
The Pensions Regulator has just issued a reminder (PDF) that all employers will have to provide a pension arrangement to all employees, beginning in October of 2012 on a widening basis until 2016. This requirement calls for a minimum total contribution to an approved pension scheme of 8% of salary, of which at least 3% must be contributed by the employer and the rest by the employee. Employers may choose to introduce a more generous scheme if they wish but the 8%/3% is the minimum requirement.

Alright, so I exaggerated slightly in the headline: the employee will only pay a minimum of 5% into this "approved" pension scheme. However, anyone who thinks that the 3% employers' contribution (plus the costs of administering the scheme, of course) will not adversely affect wages is a total idiot.

Of course, the whole thing seems so sensible—yes, we do need to save for our retirement and, yes, too few people save anywhere near enough (especially when they are younger). And yet...

This is, effectively, the government admitting that it is unable to meet its pension obligations despite already taking 11% from the employee and 12.8% from the employer—money that is supposed to cover these obligations.

Plus, the government is also adding 1% to each set of contributions for 2011–2012: that is, you will pay 12% of your salary and your employer 13.8%.

So, NICs is most definitely supposed to cover pensions.

We and our employers are paying a combined total of 25.8% of our salaries into National Insurance (which is supposed to cover state pensions).

Now, we and our employers are having to pay in extra, to a minimum of 8%.

This makes a grand total of 33.8% of your salary that is being paid into—what is, effectively—social security. Yes, that's your pension, health care and unemployment benefit.

For me, this means:

• £2,852.64 employee's contribution +


• £3,302.06 employers' contribution +


• roughly £930 employee's new pension contribution +


• £1550 employers extra pension contribution =


• Total for state cover: £8,634.70 per year.

Now, since I have all of these privately (to roughly the same level), let's do a comparison:

• Health care (top care possible): £768 +


• Pension (to roughly the same pay out as the state pension): £2,160 +


• Unemployment cover (better than the state provides): £264 =


• Total for private cover: £3,192 per year

Now, I don't know about anyone else, but I think that I'm being scammed here—and not by the private sector.

The simple fact is that the government cannot pay out at the advertised rates, and it forces us to pay more and more and more in so that it can pay out the older investors.

It is a Ponzi Scheme—and that is being generous. Were I being ungenerous, I would simply state that it is massive larceny on a grand fucking scale.

It's one rule for them...

Destroy the medical profession

As regular readers will know, your humble Devil is no fan of the medical profession: sentences such as , and "when will these fucking medical types shut their fucking cakeholes and get on with their job of patching people up?" might have led viewers to conclusion that I think that doctors are a total bunch of fuckers who should be beaten to death with their own stethoscopes.

And said viewers would be correct. But it's nice to see my view validated by Sam Bowman at the Adam Smith Institute.

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public"—Adam Smith

As usual, Adam Smith was right. Today I can think of no trade about which the above is more true than the medical profession. I don’t just mean doctors’ use of occupational licensure laws to keep their prices artificially inflated. Politically active groups of doctors are possibly the greatest single threat to personal freedom that there is in the UK today. Their motivation isn't necessarily their wallets, but their egos. Bullies like to use the state to push people around so they feel powerful.

As I outlined in my commentary on Working Class Patients And The Medial Establishment: Self-help in Britain from the mid-nineteeth century to 1948, David Green states very clearly that the medical profession are actually motivated by both "their wallets" and "their egos".

The organised medical profession had long resented the dominance of the medical consumer, and particularly resented working-class control of medical "gentlemen". The BMA were equally anxious to obtain more pay and, above all, higher status for doctors.

As regular readers will know, the combination of the BMA and the private insurance companies led directly to the destruction of the Friendly Societies—social corporations that provided primary care and unemployment benefits for the working classes—through the lobbying of MPs involved in the 1911 National Insurance Act. [Emphasis mine.]

The essence of working-class social insurance was democratic self-organisation: amendments to the Bill obtained by the BMA and the Combine [the private insurers' trade association] undermined it. Doctors' pay had been kept within limits that ordinary maual workers could afford: under pressure, the government doubled doctors' incomes and financed this transfer of wealth from insured workers to the medical profession by means of a regressive poll tax, flat-rate National Insurance Contributions.

I have said it many times, and I shall say it again—doctors are not your friends and the medical profession couldn't give two shits for anything other than big, fat pay-cheques. And, as I said back in June 2010, ...

...whilst the doctors continue to run our medical services, and continue to bribe, bully and poison our rulers—and whilst our rulers still have the power to force us to obey these bastards—we will never be free...

They medical profession are a bunch of thugs, driven by self-importance, conceit and greed, whose only motivation for existence is to bleed you dry and then present you—or someone near to you—a massive bill. But, they are also suffer from an almost incredible arrogance in that they believe their every prognostication to be gospel, every utterance to be truth and every opinion to be law. They are cunts of the very first water.

So, since we have now established this principle, let us see what has driven the ASI's Sam Bowman to attack the bastards on this occasion.

There’s a sad example of this in today’s call in the Lancet, a medical journal that is often used as a political mouthpiece by campaigning doctors, for the government to introduce a “fat tax” to curb obesity.

Of course, the proposal is utterly specious. It's pretty dubious whether the "obesity epidemic" claims are true or not. And which diet plan should be implemented? Is it bacon, sugar, bread or something else that makes us fat? Will political parties of this fat tax utopian future be divided between the Low-Carb Party and the Low-Fat Party? And what if fat people's early mortality rates mean that they actually save the government money in pension and care home bills?

The doctors err even by their own logic. As Will Wilkinson has pointed out, if fat taxers thought things through, they would favour a tax on fat people themselves, not on the food they eat. Taxing food punishes people who exercise so that they can enjoy Big Macs, but not people who are so lazy that they balloon out while eating a balanced diet.

Of course, to the average doctor—who has coddled and protected, in importance and financially, by the state for a century—corporations must automatically be evil (otherwise they wouldn't actually sell things, right? They'd do it out of charidee); not only that, but the Ordinary People, the hoi polloi, are too stupid and bovine to make their own choices.

Of course, this should be no business of the doctors': their job should be to shut the fuck up and do their job of patching people up (and charging a suitable fee, of course). And in a free society, that is precisely what would happen.

However, we do not live in a free society: we live in a Welfare State*. And in the Welfare State (and particularly this one), the health service is administered by the state and the doctors are the gate-keepers. It is the hoi polloi, who pay for this health service, of course, but—since we are given no choice about it—we are (as I have said many times) in hock to the state.

The state is the provider of a service: the National Health Service in this case. Because the state provides and "pays" (through taxes, of course) for this service, it has the power to dictate to the population.

Obesity costs money over and above a "normal" person's treatment. Even if the obese person has private medical insurance, they cannot opt out of the NHS because they are forced to contribute to the NHS through their NICs. And, in fact, because of various laws—an ambulance can only take you to a state A&E;, all GPs are employed by the state—no one can opt out of the state-provided system entirely.

In this way, everyone is in debt to the state. And as long as everyone is in debt to the state, the state, fundamentally, has the right to tell the population how to behave. And this debt can never actually be discharged: you are in debt to—and thus subject to the whim of—the state from the moment that you are born until the moment that you die.

And, remember, there is no actual contract to sign (or not sign) so the government can—and does—keep on shifting the terms of this agreement as and when it likes. It's a little like Lando Calrissian's bargain with Darth Vader in The Empire Strikes Back: "This deal just gets worse..."

As such, no one in this country owns their own body; no one in this country owns their own life. Everyone is effectively in hock to the state because you can never, ever opt out of state provision.

Once again, it seems that Sam Bowman agrees with me on this...

The justification for pushing people around like this is the NHS. Shouldn’t people have to pay for their own illnesses? Well, yes – that’s how personal responsibility works. But having an NHS removes the personal responsibility, and artificial attempts to inject it into the system are doubly illiberal and wrong.

The government (and the electorate, for that matter) forces people to be in the NHS. You have no choice in the matter, and you can’t opt out of it. Jamie Whyte put it well: "first the do-gooders conjure up the external costs by insisting that no one should have to pay for his own medical care, then they tell us that they must interfere with behavior that damages our health because it imposes costs on others." This is perverse and illiberal.

Yes, and the doctors—and their spiritual buddies, the politicians—love it: this way, they can all feel important, and all line their pockets.

The tax would only affect the poor—rich people's spending habits wouldn't be dented. How easy it must be for doctors to pontificate about the need for a fat tax, knowing that such a tax would hardly affect them at all.

Indeed, what with doctors having to take on the treatment of all of these extra obese people, surely it must be time for another contract "negotiation"**—trebles all round!

This creepy, controlling paternalism has plenty of fans in politics on both sides of the partisan divide. Doctors are the politicians' enablers, lending the weight of their “expertise” to the nanny instinct of the political class in exchange for the feeling of being important.

Which is precisely the same relationship that the government has with Fake Charities—many of which are also run by doctors and their creepy little acolytes.

No amount of expertise – medical or otherwise – should give somebody the right to interfere with another adult’s choices. Nor should democracy be used as an excuse to violate the sovereignty of the individual. If fat people are costing the NHS money, that's a mark against having an NHS, not against having fat people.

Quite. And all of this relates to the conclusion of my June 2010 post linked to above...

Most of you will have seen—in the newspapers and, in particular, on blogs written by members of the medical profession—claims that doctors should be allowed to run the NHS, because they know what they are doing. Of course they do: they want to run your lives and giving the medicos control of the NHS would give them the ultimate tool to do so. That would ensure a much "higher status for doctors" and the edict would be simple—obey us or be left to die.

If you doubt this, just take a long at some of the news stories around, especially as regards the medical profession's urgings to deny healthcare to smokers, drinkers and fat people. True, the BMA tend to side with Fake Charities more than the insurance companies these days, but the process is the same; government-funded "medical advisers"—no less effective or poisonous than Grima Wormtongue—whisper into politicians' rights ears, whilst government-funded "charities" bolster the message from the left.

Our New Coalition Overlords™ promised to take on the vested interests but, narrow-minded as they are, they seem to mean only the bankers and other huge commercial interests whose establishment status flows from the rules and regulations imposed by government.

But no mention has been made of those other vested interests: those—like the medical profession—whose power, privilege and money is propped up by the government and funded by the blood of taxpayers. There are so many of them that a stupid person might find it difficult to know where to start.

But, actually, it is really very simple: if we want decent welfare for all, affordable medical care and freedom, we need to return to "democratic self-organisation". And if we wish to do that, we have to smash and utterly destroy the organised medical profession, and grind it into the dust.

We need to return these arrogant doctors, and their associated scum (a category in which I include politicians), to beings servants of the consumer, not the masters. But whilst the doctors continue to run our medical services, and continue to bribe, bully and poison our rulers—and whilst our rulers still have the power to force us to obey these bastards—we will never be free, and we will never have a proper, functioning society.

To paraphrase P J O'Rourke, when the legislators can decide what can be bought and sold, the first thing for sale are the legislators. And the medical profession bought them a hundred years ago.

Destroy the power of the BMA and the medical profession and we can begin to struggle towards freedom. Leave them in place—poisoning public debate and raping the freedom of ordinary people in order to gain money and prestige—and we will always be slaves.

All of the above continues to be true—nothing has changed. So every time that you see a doctor warning of some dire consequence of anyone's lifestyle, don't condemn their victims—that is the precise reaction that these fuckers want from you, the better to divide and conquer.

Imagine, instead, how much you would like these bastards to stop hectoring you and bossing you about—and think, therefore, about how best to damage and destroy the entire medical profession. Think about how best to humble the arrogant, dictatorial doctors who urge the government to ban and tax your pleasures, how to put the lazy, hoity-toity nurses who starve their patients to death back into their proper place and, most important of all, how to blast apart all of their evil bloody trade unions.

And try not to laugh too much whilst you do so...

* Not for much longer, of course, because the Welfare State is utterly bankrupt across the world.

** Where the doctors tell the politicians how much cash they want and how little actual doctoring they want to do, and the politicians agree. After all, it's not their money, eh?

London calling...

It is unusual for Brixton to be the calm epicentre in the middle of a massive riot storm—for this night at least (so far)—but I ascribe our relative tranquility to that fact that we are at the top of a hill that the rioters cannot be arsed to climb.

I don' think that I would be misrepresenting Blue Eyes to say that he points out that these bastards should stop being indulged.

What the champagners cannot seem to grasp is that the people who involve themselves in this kind of thing are not indulging in a fight of principle against oppression but are acting simply and rationally in their own self interest. They know that they could not normally get away with ram-raiding Currys, but while the CCTV cameras are pointing at the kids with bricks and burning stuff they can chance it. If they get caught the courts will only give them a slap on the wrist anyway. What’s another suspended sentence amongst friends?

Of course the statists will be telling us that the way to keep everyone happy is to redistribute yet more money from the productive part of the economy to the unproductive sullen ill-educated scum. It’s like a modern form of Danegeld where the opinion-formers of the local Labour and Co-operative Party and their friends fall over themselves to buy the peace of an ever-growing band of people who know they will always be looked after by the people with the keys to the till. One vox-pop quoted a resident of Broadwater Farm saying that last time we rioted we got a new swimming pool. QED.

I am sick and fucking tired of people telling me that I should sacrifice more money and—most insultingly—sympathy for those who are "disenfranchised".

You know what? If you call yourself "disenfranchised", I know that you are a triple-dyed cunt who would not be worth pissing on if you were in a Croydon fire (that you'd started).

You are not "disenfranchised": you are a lazy cunt who believes that other people should be raped so that you can live your life in the kind of luxury that your slaves cannot.

Your slaves?

Yes: your slaves—those people who have the reward for their production stolen from them in order to support your feckless, useless lifestyle. Do you really have so little pride in your life that you are happy to be supported by the work of others?

I despise you.

No, the only additional public funding which should result from this latest example of Britain’s total lack of institutional organisation should be channelled towards building prisons, beefing up the courts and getting the police out of their offices and onto the streets. Anything else is just a sop to the criminals.

Quite.

I still don't support the right of the state to murder its citizens—are you listening, Guido?—but by all means beat the living shit out of them. And then make the cunts pay for their own treatment.

That may not be feasible: the NHS could never cope with the administrative strain. However, I fully advocate the following: that anyone convicted of any criminal offence is unable to claim benefits of any sort for the rest of their lives. And if the offenders are under 18, then their parents should have all benefits removed too.

The single biggest problem in this country is that criminals do not pay for their acts: this would be bad enough, but even worse is the fact that we—the productive citizens who are forced to pay for them in the first place—are also required to pay for them even when they have attacked us.

This must stop.

So, your humble Devil intends to start a number of e-Petitions in the next few days, but the most important is the withdrawal of all benefits for criminals and their families.

After all, if they are spending every single waking hour attempting to earn enough money to live, then they are not going to have the leisure to smash our shops, our businesses and our homes.

We have tried the carrot, and it has failed: it is time to lay on the stick in massive doses.

Nearly one third of Britons are in receipt of benefits

The Express today reported that some 20 million Britons are in receipt of benefits.

Because it was the Express, I decided to go and find the original Public Accounts Committee report and, sure enough, this figure is accurate. [Emphasis mine.]

1. The Department for Work and Pensions is responsible for much of the benefits system, and the majority of payments are processed by the Department's agencies, Jobcentre Plus and the Pension, Disability and Carers Service. The benefits system is both large and complex: there are around 30 different types of benefits and pensions, with 900 distinct rates of payment.[2] In 2009-10, some £148 billion of payments were made to 20 million people.[3]

As Obnoxio dryly commented on Twitter...

That is one FUCK OFF "safety net"

Indeed.

It's also one fucking massive client state...

Solving the pensions Ponzi scheme

For those who are not familiar with your humble Devil's view of National Insurance Contributions (NICs), I'll just let the Scary Clown outline what a Ponzi scheme is.

Just in case you don't know what a Ponzi scheme is, it works like this: I get N people to pay money into my "fund" and promise them that the fund will pay out some crazy benefit. They all like the idea and get their friends to put money in. As new people add more money in, I use the money coming in to pay out to the original investors and skim off a chunk for myself. The more people chucking money into the pot, the more I can skim off and the more I can dish out to investors. But since I'm not doing any kind of investing, the problem comes in when people stop chucking money into the pot, or even worse, when people want to withdraw their money.

Then all hell breaks loose, as it did with the Bernie Madoff case.

But what far too few people realise is that the government's "National Insurance" is nothing but a Ponzi scheme. While the economic population is growing there is no problem meeting pension requirements (and all the other things that National Insurance ostensibly pays for) but when the population starts ageing and you have more claimants than contributors, it all gets a bit messy.

Obviously, this whole shit-heap is going to have to end at some point—probably in tears. As loyal readers will know, I am always interested in the way in which we might manage transitions towards a more libertarian society. Thus it is with great pleasure that I point you to a solution over at the Adam Smith Institute.

An obvious choice, denied to voters

Imagine you were forced to pick between two options: Option one – you give me £10 today for me to safeguard for you, but there is a very high likelihood that tomorrow, when you wish to claim, I will default. Option two – you give me £5 today, and can invest your remaining £5 on your own, again with the assumption being that I will likely default tomorrow.

Whilst it's hardly a wonderful choice you would surely choose option two, to minimise your losses. However, when it comes to National Insurance Contributions (NICs), the government only gives you option one, and then pretends that you're safe.

"But wait!" I hear you cry. "The government wouldn't default on the state pension!"

"In which case," say I. "You are incredibly naive." I'm afraid that the signs are all there in various stories over the last few years—most pertinently, in this case, in the story about how the government were planning to force people to contribute a percentage of their wages towards a private pension over and above their NICs.

So, given that there is every reason to believe that the government—if not about to default anytime in the very near future—is attempting to shore up the ever more crippled finances, there might be a better way.

What about if the government offered people both options?

Either;
Every employee pays 11%, to be paired with a contribution of 12.8% from their employer. When the employee retires, provided there is enough cash in the National Insurance Fund, they receive a state pension, just as they would have under the existing system.

Or;
Every employee keeps their 11% share as income to be invested into a private pension arrangement, and the employer continues to pay a 12.8% stake towards national insurance. The employee waives their right to a state pension, but receives a 'recognition bond' that entitles them to slightly less than the value of their employee contribution to the National Insurance Fund to date.

The choice is thus open for every individual to make, and logic dictates that the choices will be made rationally, relative to each individual's age and circumstances. Most young people, and in particular those who have just started working will certainly be better off taking the private route, even if this means they will not get any personal benefit from the contribution of their employers. Older people, and in particular those close to retirement, who have been contributing to the fund over a lifetime's work will be much more likely to stay with the national insurance scheme.

Of course, the need for this choice is largely depending on my initial analogy – it assumes that the government is likely to default at some point in the future.

As I have pointed out, it is reasonable, I think, to assume that the government will, indeed, default. It may not be in the next ten or twenty years but it is safe to assume that, by the time that I reach retirement age, it will have done so.

NuLabour's solution was to keep your 11% and your employer's 13% and make you pay even more on top (and remember that both portions of NICs are going up by 0.5% in April): in the ASI's solution, the government keeps the 13% to pay out to current pensioners, and you get to invest your 11% as you see fit.

But this must be some kind of crazy talk! It'll never work, surely? Er, yes it will...

Greater Returns for the people

The benefits of pension privatisation are undeniable. The Chileans are certainly richer as a result of their privatisation scheme. This is despite heavy regulation that accompanied the scheme in the early years, which forbade, for example investment in foreign equities. As Chile's economy has developed, more opportunities have arisen, and even greater returns can be realised with less regulation being necessary. The plans from America have highlighted this trend too. The projections are much more favourable when regulation is looser, for example allowing a greater percentage of peoples' money to be invested in stocks, as opposed to bonds. Nonetheless, even with a 50/50 split between bonds and stocks, the SSA scoring looked favourably on the financial returns of the Cato plan.

Those who invested in private pensions have comfortably produced returns more than three times greater than state pensions, because of the efficiency with which they are invested. It is because of this that most people will be better off, even if they have to sacrifice the share of NICs paid by their employers. Furthermore, Michael Tanner of Cato noted that notwithstanding the fall in the value of the stock market over the last year or two, an employee who started investing 40 years ago would still have done much better had they invested privately than had they relied on Social Security – had they been given a choice. This plan is a sustainable way to give them that choice.

Yup: it worked in Chile and it looks as though it will work in the United States. Not only does it work, but everyone is better off. This can only be a good thing. So, which party is going to implement such an eminently sensible plan?

Anyone? Bueller...?

Quote of the day...

... comes from the evidently eminently quotable Charlotte Gore and her post (which is well worth reading in full) inspired by Hayek's Road To Serfdom.

It may be that the socialists are the most vocal anti-racists, but it is they who’ve created the economic conditions in which racism thrives. It’s they who’ve created a country with a growing obsession with stopping “foreigners” taking advantage of our welfare state, and it’s they who’ve spent the last 100 years telling everyone that Free Trade (which includes free movement of people) is a bad and terrible thing, it’s they who’ve told everyone that the job of the state is to pick sides and pick winners…. and they’re acting surprised, shocked and outraged when people who see themselves as losers in the current system want to use the state for their own purposes?

What exactly did they think would happen? I mean, really? The only way to stop National Socialism in the UK is to stop socialism.

This is a point that I have made many times myself—although less eloquently—over the years. It is not only that socialism is a creed based on violence and extortion but also, as Charlotte points out, it creates a "them" and "us" mentality amongst the population, and leads to misery.

Further, I have often written about how the Welfare State is the reason why we have a "broken society" and the more that I talk about it, the more I realise just how right I am. It creates a them and us mentality even amongst the "indigenous" population because some are state losers—those who pay for it—and some are state winners—those who contribute nothing and who are encouraged to continue contributing nothing by the state's largesse.

Until people start to realise all of this and stop worshipping this "social democracy" as some sort of quasi-religion, our society is going to continue going down the fucking panhole.

An admission

You know how I said that politicos are starting to realise that the Welfare State is unsustainable...? Well, via my impecunious yet peripatetic Greek friend, it seems that Herman Van Rompuy, front-runner for the new job of EU President, has decided to confirm my assertion...

"New resources will be necessary for the financing of the welfare state. Green tax instruments are a possibility, but they are ambiguous: This type of tax will eventually be extinguished.

But the possibilities of financial levies at European level must be seriously examined and for the first time the large countries in the union are open to that."

This is, of course, only an admission that our model of social democracy is too expensive and that the fuckers want to soak us for yet more cash—the trouble is that they could tax us at 99% and still they would need more.

The Welfare State is unsustainable, socially destructive and incredibly wasteful: we need to find other solutions.

More on the railways, and thoughts on the privatisation of services

Further to your humble Devil's criticism of rail privatisation—they aren't really private at all—the Adam Smith Institute blog has covered the renationalisation of the East Coast Line; and Eamonn Butler's piece raises some issues that I failed to notice.

This is, of course, exactly how rail franchising is supposed to work. Services are put out to tender, and are run by private companies, but if one of them comes a cropper, the government steps in until another provider can be found. The only trouble is that the government has been stepping in rather a lot lately. Not because the private sector is inherently flaky, but for a couple of other reasons. First, the government screwed the operators down too hard on price. Many of them already had made considerable investment in the rail industry and were not prepared simply to write it off. So they paid over the odds. Then boom turned to bust (thanks, Gordon) and their figures started to look a bit sick. Second, the government drew up its franchise agreement so ineptly that when the chips are down, it is far cheaper for an operator to fold than continue operating a service. Step forward, the taxpayer. Frankly, it's no way to run a railroad.

The thing is that the "privatisation" of the railways is, in effect, simply one of the private finance initiative (PFI) and public-private partnerships (PPP) idea that both the Tory and Labour governments latched onto in the nineties.

The idea, very broadly, was that the private sector—in return for the potential to make large profits from monopolies—would pile huge amounts of capital into these public services. The quid pro quo was that they would run them in a way that the state dictated.

The private companies make massive, easy profits off a captive customer base, and the government get to look good by improving services (or at least modernising them) but—and this is absolutely crucial—it also keeps the capital expenditure off the government books.

I believe, however, that both the Tory and Labour governments had an even more subtle agenda: the privatisation of public services by the back door.

No, bear with me here! Although, I'll admit that the following is purely speculation...

As I intimated in a comment on my Friendly Societies piece, many people in the apparatus of the state (although Brown is possibly not one of them) have started to realise that current levels of government spending are utterly unsustainable. Not only that, but the huge increases in cash simply haven't produced the rise in service quality that was hoped for.

What to do? The government is already spending billions more than it is getting in tax revenue—nearly £200 billion more this year alone. Yes, this year is particularly bad for the public finances, but even in the good years the government has borrowed ten of billions.

This simply isn't sustainable: even the British government will reach a point at which they can no longer get credit (although they are likely to reach a point where it is simply too expensive for them to borrow more). That point obviously hasn't been reached yet, but should the state stick to the projected spending rises, it won't be too many years before they do.

Think about it: not only is the government not paying down its debt, it is actively increasing it—by about 40% of total spending—every single year. This is not prudence, that's for sure.

At the same time, having splurged on public sector appointments and then increased salaries (and, in far too many cases, having to up the pension payments), the government now finds itself in a bind: if it starts sacking thousands of public servants, not only will the unemployment figures rocket upwards but they will also have lost a good number of voters. Besides, the politicos know as well as we do that "efficiency savings" simply don't happen, c.f. the Gershon Report savings, which have been largely illusory.

Not only that, but the NuLabour government is further hamstrung by the fact that the Party is now almost entirely funded by the unions—the bulk of whose members are in the public sector. And the unions are already starting to cut up rough.

Government-sponsored cuts are going to be hard enough for the Tories: they are impossible for Labour.

So, it's time to turn to the private sector—those evil companies sack people all the time, right? And the unions don't have nearly such a strong hold there either. And the government can deny all responsibility as far as job losses go, too.

But the British love their public services—the NHS is the wonder of the world, our education system churns out A grade after A grade, and the oldies are thrilled with the state pension.

So how to make this transition? Now, were I in this situation (and not so damn impatient), I would carry out the exercise in three parts.

1. The first part would be the transfer of the assets to the private sector, whilst maintaining government control.


2. The second part would be the transfer of the administration to private entities, whilst maintaining some control through full or partial government funding.


3. The third part would be the handing over of complete control of the service to the private entity and, crucially, the privatisation of the funding.

The first part has, in many cases, come to pass; many of the schools and hospitals built under PFI remain within the control of the private company even at the end of the contract. The company often runs some of the repair and maintenance services, or other facilities, throughout the life of the contract too.

The second part is also coming to pass. Think about the Tories' plans to make some schools effectively independent along the Swedish "free school" model—not to mention NuLabour's Academies.

In the NHS, more hospitals are applying for—and being granted—Foundation Status, giving them far more control over the administration and budgets (and they are no longer run directly by the Strategic Health Authority but by an "independent regulator" called Monitor).

The Primary Care Trusts, too, are being split—separating their commissioning and providing arms into what are, nominally at least, entities independent of each other. Moves like this suggest to me that the so-called internal market is being set up to become a proper market of competing companies.

For the moment, the third part—the independent funding—has not yet been implemented, although there have been rumblings and rumours of the NHS being a paid-for service, as well as compulsory medical insurance to cover your old age care. The government has most certainly suggested that everyone should be forced to contribute to a private pension.

Now, as I freely admitted, the above is all total speculation on my part—but I'm willing to take a long bet that I am not totally wide of the mark. Even if the privatisation of public services is not on the current government's agenda, all of the foundations for doing so are in place—it just needs someone to start pulling the levers...

New From Old: A Friendly Society

A couple of weeks ago, your humble Devil gave a brief talk to the Adam Smith Institute's Next Generation about ideas for libertarian welfare in general, concentrating on Friendly Societies in particular.

Most speeches that I give are based either on posts that I write at The Kitchen or am planning to write, and a post about Friendly Societies has been brewing for a while—it's just that with my limited time, easier things, such as abusing MPs for being swindling swine, have got in the way.

However, urgings by the folk at the ASI to expand my speech has provided the spur of obligation, and so I have finally sat down to expand on my ten minute waffle. The speech was broadly based in two parts: the first explained what was wrong with the current Welfare State, the second outlined how we might better address the problem.

ON LIBERTARIANISM IN GENERAL

The first thing to be pointed out is that libertarianism is not about leaving people in the street to die. Libertarianism is, first and foremost, a philosophy based on personal liberty—the central crux of which is the non-aggression axiom.

This axiom is very simple—you shall not initiate force or fraud against another person's life, liberty or property.

As such, a libertarian government would not, for instance, stop people setting up a socialist enclave if they so desired—as long as every member of the socialist group was there voluntarily and not co-opted against their will.

(This, incidentally, is a fundamental difference between a libertarian and a socialist polity: you can live as a socialist under a libertarian government; you cannot live as a libertarian under a socialist government.)

Generally speaking, libertarians recognise collectivism, when voluntary, as being A Good Thing; libertarians welcome people working together, as they can often achieve things that individuals cannot. However—and this is worth repeating ad nauseam—the stress must be on the voluntary aspect of this collectivism.

THE PROBLEMS WITH STATE WELFARE

This is the first hurdle at which the state's welfare provision falls down—it is compulsory, not voluntary. Sure, you can make voluntary, private provision for your own welfare—you can take out insurance (or assurance) to provide for the same things as NICs does: indeed, I have private health and unemployment insurance as well as a private pension—but you cannot opt out of paying for the state's provision. Even if you do not wish to rely on the state's provision, you must still pay your NICs.

The second problem is that there is no National Insurance Fund: it is a colossal Ponzi Scheme—that is, older investors are paid out from the income stream provided by newer investors. Bernie Madoff was imprisoned for running a Ponzi scheme worth some £40 billion over 40 years—the government is projected to take £110 billion in this one year.

The third problem is that welfare is not based purely on those things that NICs is supposed to cover—health, pensions and unemployment insurance. With NICs, there is at least some idea that what you pay in is, in some way, related to what you get out. No, the real problem is with the raft of Benefits—Child Benefit, Housing Benefit, etc.—which are not based on any insurance or assurance principle.

As such, these benefits create a sense of entitlement—that these things come to people as "their rights". Few people on benefits consider that these benefits are stolen from people who have to work hard and then have their pockets picked; instead, benefits-claimants seem to think—much as MPs appear to—that this is "magic money" that just falls from the sky. It is not.

Not only does this state of affairs enable people to see it as "their right" to live on benefits if they so desire, it also (perhaps unwittingly) leads them to look upon the state as their protector—their father-figure. For those of us who would implore people to realise that the state is not inherently a benign and superior being, this attitude is a severe problem.

But it has lead to a fourth and very disturbing trend—that the agents of the state now see themselves as a paternalistic figure, with a duty (and the right) to force people into a way of living that state agents deem to be the correct one.

There are over sixty million people in this country, all with their own priorities and desires. There means that there are over sixty million ways to live and it is immoral, and impractical, for the state to demand that everyone live in one way.

But the fact that people might have different ideas on how to live their lives does not concern our politicians; men have always sought dominion over others and only those who actively seek that power go into Parliament in the first place.

The difference between the present day and the situation 150 years ago is that now the politicians have our money—and they fully intend to blackmail and bully us into living as they dictate.

You shall not smoke!—it cost the NHS money.

You shall not drink!—it costs the state money.

You shall not become fat!—it costs the state money.

As I said, the agents of the state seem—or at least pretend—to believe that all money belongs to the state, and the state's position of father in many people's eyes lead others to assume the same.

For those of us who value our liberty, it is this tendency which is the most dangerous aspect of the Welfare State—and its tentacles can, and do, invade every aspect of our lives. And what the money aspect does not justify, the wars—on drugs, on Benefit Fraud, on "terror"—take care of.

As such, the abolition of the Welfare State is not an incidental consideration to any libertarian government—it is absolutely crucial.

WHY PRIVATE CHARITY IS NOT THE ANSWER

But what do you replace it with? Far too many libertarians tend to wave their hand and invoke "private charity", but would this really be enough? Sure, 150 years ago, private charity was central to society—the seven great hospitals of London, for instance, were all built and maintained with private charity and we are infinitely richer now than people were then.

But my contention is that people have got out of the habit of giving voluntarily: bankers (the industrialists of our age) blow colossal sums of money on houses, swimming pools and dolly-birds without a thought to their fellow man—philanthropists concerned with the day-today living of ordinary people are somewhat rare today.

This is because of the corrosive effect of the Welfare State. As I have said before, when we see a homeless person in the street, we do not think "there is a fellow human in pain: how can I help?"; instead, we think "why hasn't the government sorted that out yet?"

And it is this attitude—not the "individualism" that many blame—that has led to our "broken society".

Given this, it is obvious that private charity simply will not cater for the welfare of millions of people. No, private charity simply will not cut it—not, at least, as anything more than a backstop.

And, given that we live in the culture that we live in, I have always maintained that any libertarian government would need to allow for a transition period—a period that could last for decades.

Given this—and the humanitarian and PR problems (if nothing else) of having people starving on the street—any libertarian government would have to put in place a welfare system of some sort.

This welfare system should not rely on private charity, needs to encourage voluntary collectivism (for assurance purposes) but also to help to bring communities together; it needs to have anti-fraud measures built in and should, ideally, encourage self-reliance.

Further, although there is likely to be some reliance on established insurance companies, anyone who has dealt with these unpleasant collections of shysters will blanche at the thought of leaving all provision to them.

A POSSIBLE SOLUTION TO WELFARE PROVISION

And this is where we turn to the concept of Friendly Societies.

On the day that I gave the talk to the ASI, Charles Moore mentioned Friendly Societies in his generally sensible list of what is missing from our modern Britain.

As well as gaining much, we have also lost. Honour, manufacturing, oratory, worship, friendly societies, organised temperance, provincial pride, fair play, low taxes, reading and writing, public order, good trains and public clocks which kept the time—just a few of the things which our own age could improve if it bothered to admire the past rather more and itself rather less.

Friendly Societies were voluntary co-operatives, usually based locally, which at one point covered about half of the country—but they were growing swiftly. Their potential was, alas, effectively killed by the National Insurance Act of 1911 and the onset of state welfare provision—for the compulsory contributions, obviously, crowded out the voluntary contributions to the Friendly Societies.

As insurance-assurance co-operatives, Friendly Societies fulfill our desire for voluntary collectivism. As local societies, they also help to provide some cohesion to communities; many Friendly Societies provided a social function as well as an economic one.

Most societies allowed their members to choose their level of pay-in; how much was paid out was determined by numerous factors, but criteria usually included how much you had paid in, how long you had been a member and your actual need.

This last is important, for our current Welfare State is not based on need—it is based on an inhuman, box-ticking system. Learn how to play the system and you can get more than a living wage; but this system is not based on need. (The one time that I have been starving, I was unable to get any help because I was employed as a company director—the fact that the company had almost no money to pay me was irrelevant.)

As such, Friendly Societies address the issue of self-reliance too; you are responsible for ensuring that you pay in and, should you fall on hard times, your pay-out is related to what you paid in.

Friendly Societies also address the issue of fraud. People are far less likely to steal from those whom they know personally; further, knowing you personally, those people will also be able to check whether you are, in fact, stealing from them. And this applies, of course, not only to benefit claimants but also to those running the Society.

Being based on social ideals might also shape the nature of Friendly Societies. In 2008, for instance, the FSA authorised Principle Insurance—the first shari'a-compliant insurance firm.

Friendly Societies would, of course, also provide competition for the big insurance companies, thus helping to guard against a leap from state dependence to corporatism. Or, of course, Friendly Societies might choose to re-insure their deposits with the said companies.

As such, Friendly Societies would provide an assurance-insurance framework that the vast majority of people could access; where they did not currently exist, commercial insurance companies would fill in the gaps.

Obviously, Friendly Societies would not pay out to those who have not paid in—thus destroying the culture of a lifetime spent on benefits. The pay-outs would be on strict terms, thus ensuring—unless all members voted so—that there would not be a culture of subsidising lifestyles, e.g. paying people who unable to support children to have babies left, right and centre. (The benefit that this aspect alone would have in society in general is huge.)

As such, private charity^* would be the welfare option solely for those who have no other option at all—a welfare scope that I believe private charities could easily deal with.

And, crucially, the state is removed from the welfare system entirely.

HOW MIGHT A LIBERTARIAN STATE ENCOURAGE FRIENDLY SOCIETIES?

As is the case with so many solutions, the framework for Friendly Societies has been largely destroyed. As such, a libertarian state might look at ways in which Friendly Societies might be encouraged.

Removing much of the red tape—and other barriers to entry—involved in setting up such financial institutions would be an excellent start. A low barrier to entry would also ensure, if a Friendly Society became too big and corporate (and more like commercial insurance companies), that others could spring up to provide an alternative, to provide competition.

Other initial measures might include tax breaks (although a libertarian government would cut taxes hugely in any case) and, perhaps, fund matching for swift set-ups. That is, if Friendly Societies formed during the first term of a libertarian government, the state would match whatever monies they managed to secure in, say, the first six months.

Obviously, if anyone with more legal, insurance or economic knowledge than this humble amateur has any good ideas, then do feel free to contribute your ideas.

This has been something of a broad-brush presentation, but I do believe that Friendly Societies do show us the way to a welfare provision that is not state-controlled and, thus, does not allow the state to control us.

^* A CLARIFICATION (inspired by Rumbold's comment): by private charity, I do not only mean actual charitable organisations—I mean friends and family too. This must be the first port of call for those who are disabled and unable to work, for instance. The number of disabled people who are truly unable to work at all is very small—I know a bloke who lost both arms below the elbow and both legs above the knee from frostbite, and yet he has a job (he can use the stumps to type on a computer, and he uses prosthetics to walk to work. Oh, and climb mountains).

I took part in a debate on Accessibility and Entrepreneurship at the Information Technologists Livery Company a few weeks ago, and there were a number of profoundly disabled people there who, being unable to find jobs, had started their own companies. In all but a tiny number of cases, being disabled does not mean being unable to work.

(This is an expansion of a talk that I gave to the Adam Smith Institute on Tuesday, 3^rd November 2009.)

UPDATE: linked from the ASI Blog and reproduced in the Events Archive.