Miscellaneous Wordsmith Miscellaneous Wordsmith

The best way to think of gold

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So the best way to think about gold in the longer term, rather than as a specific hedge against either inflation or deflation, is as a currency. A currency that cannot be debased or undermined by any government. Central banks in emerging economies certainly seem to be looking at gold that way.

John Steepek, 'Why your portfolio should be braced for another crash' MoneyWeek

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Miscellaneous Tom Clougherty Miscellaneous Tom Clougherty

England's lost liberty

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A couple of weekends ago I read an old paper I found on the Libertarian Alliance’s website – ‘How English liberty was created by accident and custom – and then destroyed by liberals’, which was written by Sean Gabb in 1998. I found its thesis fascinating.

To simplify somewhat, Sean contends that even as English liberalism reached its zenith in the Victorian era, it was being undermined from within. The reason for this was that English liberalism was not based on liberal philosophy so much as it was the fortunate result of a historical and cultural accident – the ‘administrative vacuum’ of the 18th Century, which followed the Glorious Revolution of 1688.

During this period, any growth of government was severely hindered by strict adherence to traditional customs and the rule of law, which allowed for no administrative discretion, and no assertion of administrative necessity. As Sean points out, England did not, at this stage, even have a professional civil service. Certainly, plenty of people were granted sinecures and fancy titles – but they didn’t actually do anything. It was, he says, close to ‘administrative anarchy’. The English people have never been freer.

The thing that brought an end to all this was that the late 19th Century liberals, in rationalizing and harmonizing the laws and administration of England, effectively undermining the reverence of common law and custom and the absence of administration that had sustained liberty for so long. In a sense, they created government as we know it today, and in doing so they unleashed “the greatest illustration that history affords of public choice economics". Government, once it had the means to do so at its disposal, started to grow. It hasn’t stopped since.

This error, Sean says, was compounded by three defects in the liberals’ reasoning: (1) they relied too much on economic arguments, and thus allowed liberalism to be caricatured as heartless and calculating; (2) the labour theory of value that Smith and Ricardo subscribed to played straight into collectivist hands; and (3) they were too quick to make exceptions to the general rule of laissez-faire.

I’m not a historian, so I’m not in a position to critically assess Sean’s analysis of 18th and 19th Century political history. Suffice it to say that I found his arguments convincing as I encountered them. I’d certainly recommend reading the whole paper.

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Miscellaneous Wordsmith Miscellaneous Wordsmith

Hazlitt on aid

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Government-to-government foreign aid promotes statism, centralized planning, socialism, dependence, pauperization, inefficiency, and waste. It prolongs the poverty it is designed to cure. Voluntary private investment in private enterprise, on the other hand, promotes capitalism, production, independence, and self-reliance.

Henry Hazlitt

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Miscellaneous Wordsmith Miscellaneous Wordsmith

Quote of the week

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[I]t is not by the intermeddling of... the omniscient and omnipotent State, but by the prudence and energy of the people that England has hitherto been carried forward in civilisation... Our rulers will best promote the improvement of the nation by strictly confining themselves to their own legitimate duties, by leaving capital to find its most lucrative course, commodities their fair price, industry and intelligence their natural reward, idleness and folly their natural punishment, by maintaining peace, by defending property, by diminishing the price of law, and by observing strict economy in every department of the State. Let the Government do this: the People will assuredly do the rest.

T.B. Macaulay, 1830.

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