Now that the Lisbon Treaty has been ratified, the referendum that should be offered would ask three questions:

1. Do you wish the British government to withdraw from the European Union?

2. If Britain remains in the European Union, do you wish there to be a referendum on any future European Union treaty?

3. If Britain remains in the European Union, do you wish the British government to negotiate a reduction in the control of the European Union over British government?

Posted by James Bartholomew • Indexed in Off the subject

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Harriet Harman is wanting to force companies to analyse and disclose the difference between what they pay the women in their employ and what they pay the men. She is still under the illusion that legislation to favour women in employment is doing them a favour. The opposite is the case, as has been shown by the example of Sweden. There women have plenty of legal protection and the result. Women there are paid a lower proportion of what men earn than in countries with less protection for women.

Why? It is obvious if you are in business or have a little imagination. Why employ a woman at all if she is going to have extra privileges and bureaucracy attached to her. Her employability is reduced. Therefore the money she can attract has been reduced.

In Sweden, so I understand from Catherine Hakim who has studied this subject, the rights attached to women are so great that private companies decline to hire them. They therefore have to get lower-paid, more routine government jobs.

What is extraordinary to me is that so few people in government (or most of the media) seem to be aware of these facts.

My fuller posting on these issues is here: http://www.thewelfarestatewerein.com/archives/2005/03/some_commonly_b_1.php

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To a lunch organised by the Centre for Policy Studies. The idea was to look at the apparent crisis in capitalism.

Tim Congdon argued that it was not a crisis in capitalism and that it was the Government had made a banking problem a great deal worse last autumn. It had failed to do what the Bank of England did in the 1970s, namely support the banks behind the scenes. The good news however was that the Government has finally gone in for "quantitative easing" and this will work, causing the economy to begin to turn in six to nine months' time.

Lord Baker pointed out the huge contrast between individuals cutting back on their expenditure and the Government increasing its expenditure. He suggested the budget deficit would become huge. Sooner or later there would have to be cutbacks.

Brian Reading suggested, among other things, that inflation was a danger.

Together, these three (among a variety of other speakers) painted a mixed picture: some recovery, a huge government deficit and a danger of inflation.

My own contribution was to suggest that democracies have an inbuilt tendency to gravitate towards state ownership and regulation. People are unhappy about one thing or another and demand that "something must be done". That gradually leads to more government control and spending. In the 1970's, the economic crisis came out of a period when excessive socialism and union power were seen to be a cause of the problem. It was thus possible for Margaret Thatcher to use this crisis to create a counter-revolution against the Left-ward drift. But the current crisis, rightly or wrongly, is seen by most of the media at least, as a failure of capitalism and so it will be very difficult for those of us who want to reduce the role of the state to use it to our purpose.

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It has happened again. It just took a bit longer this time. Once again, a Labour government has ended up with a run on the pound. Sterling has this week fallen to an all time low against the Euro. Yes, it is lower now than it was the aftermath of Black Wednesday when Britain came out of the Exchange Rate Mechanism. The incompetent mistakes of that time have now been more than matched by Labour.

Since the recent peak in 2007, the pound has tumbled by 21 per cent against the dollar, by a quarter against the Euro and a massive 46 per cent against the Japanese Yen. This gives the lie to the idea peddled by Mr Brown that the recession we are now enduring is all a matter of international problems. The foreign exchange markets are telling us clearly that this crisis is worse here than elsewhere – that the government here got it more wrong than any other major country.

A run on the pound has happened every time Labour has been in power. It is in the party’s DNA. In the previous Labour administration from 1974 to 1979, the pound collapsed against the Deutschemark – from DM6.05 to DM3.89. The time before that, between 1964 and 1970, the pound slumped from DM11.10 to DM8.74. That was when Harold Wilson made his infamous comment that the devaluation did not mean “of course” that “that the pound here in Britain, in your pocket or purse or in your bank, has been devalued”. In that broadcast, 41 years ago, he said that the devaluation would enable Britain to “to break out from the straitjacket” which had previously meant that every time a government had tried to expand the economy there had been a balance of payments crisis. In other words, he was devaluing to stop the cycle of boom and bust.

Now what other politician proclaimed that he was ending boom and bust? Ah yes. Gordon Brown. Only last year he repeated his boast, “we will never return to the old boom and bust”. And just like Wilson, events are showing that either he did not understand what was going on or else he was deliberately misleading us.

We can go back further still. The post-war Attlee government, much revered by the Left, presided over a slump in the value of the pound from US$4.03 to US$2.80. While Germany and France were embarking on post-war economic miracles, Britain was in financial crisis. The only other previous Labour administration (apart from a very brief stint in 1924) was that of Ramsay MacDonald from 1929 to 1931. There was no devaluation in that short time. But the pound slumped the following year when the same man headed a coalition government. So that’s the record. Five Labour administrations, five devaluations.

Why do they do it?

It is simple enough. They spend and spend until they reach the limits of the taxes the British public will bear and the lending that foreigners will provide us with. They spend like Billy Bunter eats – until they burst with it. They are like Dawn French with chocolates or Casanova with girls. They can’t stop themselves. They spend because it is the only answer they have to any problem and, being socialists, they think always that the government can and should deal with all problems.

They do not reflect that the taxes and debts which the spending causes are, themselves, major problems. They are problems that are now putting Britain in a crisis of recession and unemployment.

Posted by James Bartholomew • Indexed in Off the subject • Politics

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I went to an Intelligence Squared debate on the motion "It is wrong to pay for sex" last night. One of the excellent speakers was Germaine Greer who made plenty of clever points. But one part of her argument was an attack on capitalism and, in almost an aside, she referred to the "grotesque profit margins" of the supermarkets.

I wondered, though, if she actually knew what the profit margins of our supermarkets are. Had she looked them up? And what would she - or I or you - consider to be "grotesque"? At a guess, a profit margin of 20% would be the minimum. Perhaps 30% or even 50%.

So this morning I decided to check exactly what is the profit margin of our biggest supermarket chain, Tesco's. For those who are not financially minded, the profit margin is the net pre-tax profit as a a percentage of the turnover (sales). In Tesco's latest accounts, the company had turnover of £47.3 billion. Its pre-tax profits were £2.8 billion. Its profit margin, therefore, was 5.9%.

Grotesque? I think not. The margin is certainly less than that of most corner shops. Supermarkets tend to have lower profit margins than most other retailers. They have high turnover of stock, they buy in bulk and so they are able to sell cheaply. They prices can be kept down because of the economies of scale. That is why customers go to them. They are one of the reasons that the price of food in Britain and in other advanced countries has fallen dramatically over the past century, thus ending the days when poor people went hungry.

I wouldn't call Germaine Greer's ignorance of capitalism and how it works "grotesque". It is commonplace. But I do think it regrettable that someone of her fame and influence does not bother to do any research before she makes assertions about company profits.

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The BBC - especially the Today programme on Radio 4 - is showing ill-disguised delight at the current crisis of capitalism. Presenters such as John Humphrys have no doubt that it was as all caused by stupid, greedy capitalists and that a high priority now should be to ensure that these said capitalists do not get bailed out or rewarded or let off their crimes. His questioning of Alistair Darling, the Chancellor of the Exchequer, a short while ago was nearly all directed at attacking the idea of the innocent taxpayer being made to pay for the self-serving idiocy of bankers. He asked what the taxpayer was getting out of this.

It was, of course, a rare pleasure to hear Mr Humphrys suddenly develop an interest in the well-being of taxpayers. For many years he has suggested that the answer to any problem is for the government to spend more money on it and thus increase the tax burden. Leaving that to one side, what Mr Humphrys seemed to have trouble grasping is that we are dealing here the risk of a major recession and that the whole purpose of the Mr Darling's dramatic interventions was to try to prevent this happening. Mr Humphrys seemed unaware that banks are not like other businesses. They are central to the working of an economy. Incidentally, he also seemed unaware of the difference between spending money that disappears (as in spending it on a meal) and handing over money to banks that will in theory - and probably in reality - repay it.

Given the statist leanings of Mr Humphrys and other presenters, it is not surprising that the whole crisis is treated as a failure of capitalism and no effort is made to establish what role governments had in creating it. No, that is not entirely fair. I did hear Laurie Taylor, in an afternoon programme, searching for any academic economist who had forecast this crisis. He found a retired Professor Dale who had long ago warned about the change in the law that was known as Big Bang. This made it much easier for banks to own securities. He suggested - nearly 20 years ago - that the owning of securities by banks contributed to the Great Depression in America. He implicitly warned that Big Bang carried with it a risk of a repetition. This ascribing of at least a little responsibility to a government was unusual. There is much more scope, though, in this area.

Some may think, "How on earth could governments have contributed to the crisis?". I suspect there are a variety of ways but here, for a start, is quite an important one. On September 30th 1999 an article appeared in the New York Times headlined, "Fannie Mae Eases Credit To Aid Mortgage Lending".

Fannie Mae was the biggest underwriter of mortgage loans in America. I am no expert on American instituions but I understand it was an offshoot of government and in response to government pressure, according to the article, it was now going to "encourage...banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans."

Essentially this was an official move to embark on sub-prime lending - the very sub-prime lending that is at the core of the current financial crisis. Sub-prime lending means extending mortgages to people whose credit is "not good enough".

Part of the idea was to make more profit. But the article plainly states that Fannie Mae "has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people". You can easily imagine that Clinton and other Democrats thought it was a generous and popular act to get Fannie Mae to underwrite lending to the poor. But, as we now know, it was a disastrous act. The poor can't pay their loans back. The institutions that rely on them to pay back go bust.

Impressively, the writer was aware of this danger: "Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's."

That was spot on.

Let us lay to rest the idea that this crisis is entirely made by greedly capitalists. One President Clinton, that figure much-loved by the Left-wing consensus at the BBC, was one of its creators.

The New York Times article is here.

Posted by James Bartholomew • Indexed in Media, including BBC bias • Off the subject • Politics

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Frances Lawrence is dismayed and who can blame her? She has learned that Learco Chindamo, the killer of her husband, Philip, will not be deported when he comes out of jail because of his ‘human rights’. The following is most of an article which I wrote yesterday for the Daily Express:

The trouble is, the idea of ‘human rights’ has become all powerful. It is a new kind of religion. It demands obedience whatever the circumstances and sometimes drives out common sense. ‘Human rights’ govern much of our lives these days and how we tell other countries to govern themselves, too. But does the idea itself make sense? Do ‘human rights’ exist, in fact, or are they are just a fantasy? And does living slavishly in accordance with them really make our lives better?

I suggest that the whole idea is figment of the imagination. If one looks at how it developed, it is fairly clear that it was dreamed up by intellectuals to justify resisting the power of kings. The French philosopher, Jean-Jacques Rousseau, was probably the first to use the phrase, “les droits de l’homme” – ‘the rights of man’ – in 1762. It is well known that the French were angry at the way the kings of France used their immense power in the 18th century. Naturally their minds turned to how they could justify opposing a king who, according to the theory of the time, was annointed by God. A contrary theory was needed to make those who wanted to curtail the king’s power feel virtuous instead of sinful. The ‘Rights of Man’ fitted the bill and it is no coincidence at all that the American revolutionaries eagerly picked up on the phrase to justify rebelling against British rule.

So that’s where we got the idea. It was a clever justification for rebelling. You could even call it a kind of ‘spin’. During the French revolution, the rights they were demanding were “Liberte, Egalite, Fraternite!”. But the human rights which people insist exist keep on changing. That, indeed, is one of the reasons for believing that they don’t genuinely exist. Rights under human laws exist, of course. And people create legal rights based on their notions of human rights. But human rights themselves do not exist.

Or, if they do, who created them? Now that our society is secular, nobody claims any more that they were created by God and if they did make such a claim, they would find precious little support for it in the Bible. There the emphasis is on how human beings must be good and worthy of heaven, not how they can demand one thing or another.

Proponents of the idea of human rights think these rights exist independently, without having been invented by us. If so, what is the evidence for their existence? The modern world is meant to be scientific and want proof of things. Where is the proof that human rights exist?

Jeremy Bentham, the British philosopher, called the idea of human rights “nonsense on stilts”. Bentham really got the wind behind his sails: “from real laws come real rights” he said. But “from laws of nature, fancied and invented by poets, rhetoriticians and dealers in moral and intellectual poisons come imaginary rights, a bastard brood of monsters, ‘gorgons and chimeras dire’”.

If human rights had an independent and true existence, they would have been around at all times, in all countries. Yet somehow, we are to assume, the vast majority of civilisations that have ever existed never noticed them. It is part of the vanity of modern times to be quite comfortable with the idea that we are much cleverer and more perceptive than, say, Socrates or Confucius.

“Ah yes,” someone might say, “human rights are an intellectual fantasy, but they are a jolly useful one. The idea has done a lot of good, furthering human happiness and bringing down tyrants.”

Is that true? I accept it may be possible that, in some circumstances, the idea might have helped a bit. But there are thousands where it has not helped at all. It is not doing much good in Zimbabwe right now. And there are a great many instances where it has led humans into stupidity or cruelty.

The French Revolution led to a ‘reign of terror’. Thousands who had done no harm to anyone were guillotined. All this was fed by a sense of righteousness that the concept of human rights encouraged. The concept of ‘human rights’ was the grandfather of communism and the miseries and terrors of Mao’s China and Stalin’s Russia. If only these people had been suffused with an idea of decent human behaviour, they might not have killed millions. Instead they were filled with the idea that they were creating a perfect world to which people had a ‘right’.

In modern times, the Human Rights Act hamstrings the government as it tries to keep out terrorists and fight crime. And then there are the times when the effect of human rights is just silly. Earlier this year, a zoo in Sussex wanted to hire someone to be the Fat Controller of its “Thomas and Friends” railway. The zoo’s “legal human resources advisers” warned that it must not advertise for a fat male. Indeed, there must be no question of discriminating against a thin female to play the role. Yes, it was all a matter of ‘human rights’. This was truly, “Nonsense on stilts!”

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The website has been down for a week or so. Sorry about that. It is now working (mostly).

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The funniest thing that has happened in Britain for a long time....

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I attended a lecture last week by a British officer who had served in southern Iraq. He said his experience was 'exceptional'. It certainly was awful.

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