Notes On The News
by Gwydion M Williams
Creative Destruction [Anglo Economics]
Adam Smith on Usury and Interest
Dogs going to the dogs [Dangerous Dogs]
The Net and the Law [Internet Anti-Piracy]
US Republicans [South Carolina]
Return of the Mixed Economy? [The Chinese example]
Protecting The Rich
I’ve said before that the rich in today’s society are an Overclass, as disconnected and fragmented at the top of society as an Underclass in the bottom layers. And this fits with their continued willingness to scoop up huge amounts of money in salary and bonuses, embarrassing those politicians who try to defend their interests.
The Golden Calf has shat on ordinary Britons, and will be allowed to do so again. The Fancy Finance of the City of London makes those people about as useful as so many tapeworms, but it looks like they will be protected for as long as possible. Cameron has already shown himself willing to isolate Britain within Europe, rather than accept a Transaction Tax or Tobin Tax that would make speculative trading much less profitable.
Contrary to how it looked a few years back, the former Leninist countries have not formed a ‘New Europe’ supporting the values of the rich in the Anglosphere. The current crisis has hurt them, and currently Hungary is the biggest dissenter. It’s rather a right-wing government, but also one that has asserted Hungarian interests against the demands of International Finance.
But International Finance is not a coherent entity. It is a mob of disconnected individuals, and most of them are concerned only with getting more for themselves. A prospective collapse increases the urgency of grabbing as much as you can while you can.
A ruling class can come together and perhaps make sacrifices for shared belief. An Overclass cannot and mostly does not wish to. If the whole thing might have collapsed by next year, it makes sense to scoop up as much as possible.
Creative Destruction [Anglo Economics]
When capitalism has a particularly acute crisis, the phrase ‘creative destruction’ gets rolled out. The phrase was popularised by Austrian-American economist Joseph Schumpeter and was originally an explanation as to why capitalism would destroy itself. Neo-Liberals took it up and reversed the meaning, believing that it must be a sign of health.
The destructiveness and waste of the current system is clear. Its usefulness for the creative process is open to question. You don’t have to wreck things to regenerate them. In universities, where existing assets cannot easily be lost or taken over, the world’s best are mostly centuries old. Places that have adapted but also kept a long tradition. Only very occasionally does a new start-up push its way to the first rank.
Still, talk of ‘creative destruction’ seems to reassure people. It feeds the “Only Fools and Horses” mentality that has spread so widely since the 1970s. Detached from Trade Union influence, ordinary people can easily be persuaded to resent most forms of skill and knowledge, the stuff they know they lack. Persuaded to admire money, luck and successful cheats, with always the dream of being the next. That’s the mentality that keeps almost all of them at the bottom of a complex society, and increasingly irrelevant to that society.
Pensions [not a burden]
If the same society is producing the same wealth with fewer workers, then there is no reason why pensions shouldn’t stay at the same level. Or even increase, given that retirement pay is always less than pay in work.
The ‘problem’ is only a problem from the viewpoint of the richest 1%. In their eyes, pay for ordinary workers is an unwelcome expense, but mostly unavoidable. They also get better workers if they pay above the average rate, worse if they pay less. But from their viewpoint, pensioners are a pure burden, not needed and not contributing to the profits of the 1%. (Or not unless they are lured into foolish investments.)
Employed workers are fools if they see pensioners as a burden: they can reasonably expect to end up as pensioners themselves.
A great many of them are fools, sad to say.
Myths of Self-Employment
For most of human history, most people have had control over their own work, with a minority working for the rich. The Industrial Revolution changed that, gradually turning the bulk of the population into employees.
After World War Two, people mostly thought of themselves as employees and saw that their own interests were looked after through state power. Thatcher persuaded them to fear the Big Bad State, drawing on a general discontent that many leftists had fuelled in a short-sighted manner.
Thatcher’s promise was more economic independence, and it wasn’t met. Ideas like forcing big businesses to pay their bills on time get floated but never get anywhere. The rich get to evade most social controls and tax, the small businesses get squeezed. They get seen as an anomaly, “self-employed”, an oddity between being an employer or an employee.
“Since the middle of the last decade, the number and proportion of self-employed Britons has been increasing, and the drastic events of 2008 did not slow the rise….
“‘The additional self-employed are unlike self-employed people as a whole in terms of gender, hours of work, occupation and sector of employment,’ says the CIPD’s report. Tellingly, of those who make up the net rise in self-employment since 2008, 90% are part-time…
“All this has been boiled down to talk about a new crop of ‘odd-jobbers’ – but there’s something more important going on, so far undocumented in official statistics: the accelerated conversion of proper jobs into a mess of ‘self-employment’ that’s completely fraudulent. Eighteen months ago, two Daily Mirror journalists began a brilliant campaign on this issue titled ‘Gizza Proper Job’, and exposed such firms as Ryanair and the minicab firm Addison Lee; it has also been touched on by BBC1’s Panorama. That it remains a political non-issue says a lot about the current debate about the supposed fundamentals of the economy: politicians and the press will happily fume about either overpaid executives or ripped-off customers, but thinking about the nitty-gritty of working lives is still somehow beneath them.
“‘We are looking for a number of door supervisors, security guards and CCTV operatives,’ says one typical online job ad. ‘You will be employed on a self-employed basis’. This from the suburbs of Bristol, and another trade long steeped in such sharp practice: ‘Self-employed hairdressers are required for a busy, newly opened and re-vamped Beauty Salon.’ A lot of ads predictably push the supposed merits of ‘being your own boss’ – but in most cases the boss is where he’s always been, only he’s found a neat new way of paying you less.” [C]
It’s not always like that. One commentator summed it up nicely: “If you have a difficult to find skill then ‘self employed’ is not a bad crack as you can charge almost what you want. However for the average worker ‘self employed’ is a ticket to poverty as your employment can disappear overnight.” [C]
The bulk of the ‘self-employed” are actually day-labourers. They work for someone else but have no security. This suits the Thatcherite ‘entrepreneurs’, who mostly have no particular skills beyond squeezing money out of ordinary workers. Pre-Thatcher, foreign observers and especially the Germans said that British workers were fine and the management useless. More power to the managers has confirmed this.
Adam Smith on Usury and Interest
“In some countries the interest of money has been prohibited by law. But as something can every-where be made by the use of money, something ought every-where to be paid for the use of it. This regulation, instead of preventing, has been found from experience to increase the evil of usury; the debtor being obliged to pay, not only for the use of the money, but for the risk which his creditor runs by accepting a compensation for that use. He is obliged, if one may say so, to insure his creditor from the penalties of usury
“In countries where interest is permitted, the law, in order to prevent the extortion of usury, generally fixes the highest rate which can be taken without incurring a penalty. This rate ought always to be somewhat above the lowest market price, or the price which is commonly paid for the use of money by those who can give the most undoubted security. If this legal rate should be fixed below the lowest market rate, the effects of this fixation must be nearly the same as those of a total prohibition of interest. The creditor will not lend his money for less than the use of it is worth, and the debtor must pay him for the risk which he runs by accepting the full value of that use. If it is fixed precisely at the lowest market price, it ruins with honest people, who respect the laws of their country, the credit of all those who cannot give the very best security, and obliges them to have recourse to exorbitant usurers. In a country, such as Great Britain, where money is lent to government at three per cent. and to private people upon a good security at four and four and a half, the present legal rate, five per cent, is perhaps as proper as any.
“The legal rate, it is to be observed, though it ought to be somewhat above, ought not to be much above the lowest market rate. If the legal rate of interest in Great Britain, for example, was fixed so high as eight or ten per cent, the greater part of the money which was to be lent would be lent to prodigals and projectors, who alone would be willing to give this high interest. Sober people, who will give for the use of money no more than a part of what they are likely to make by the use of it, would not venture into the competition. A great part of the capital of the country would thus be kept out of the hands which were most likely to make a profitable and advantageous use of it, and thrown into those which were most likely to waste and destroy it. Where the legal rate of interest, on the contrary, is fixed but a very little above the lowest market rate, sober people are universally preferred, as borrowers, to prodigals and projectors. The person who lends money gets nearly as much interest from the former as he dares to take from the latter, and his money is much safer in the hands of the one set of people than in those of the other. A great part of the capital of the country is thus thrown into the hands in which it is most likely to be employed with advantage.”
That comes from The Wealth of Nations, which right-wing economists treat like the Bible – quote the bits you like and ignore the rest. The whole Thatcher / Reagan project has indeed shifted investment to “prodigals and projectors”, people who spend money foolishly and people who borrow a lot of money for highly dangerous business plans.
Labour could demand that the concept of boring respectability be restored to banking. People should be told, if you need advice on investing you shouldn’t be investing. And that there are no longer any trustworthy sources of financial advice – if indeed there ever were any. But it looks like Ed Miliband dare not do anything beyond mildly moderate New Labour doctrine, just as New Labour did not dare not do anything beyond mildly moderate Thatcherism. Even though the whole system is visibly falling apart, they do not dare.
Dogs going to the dogs [Dangerous Dogs]
Yet another case recently of a dog attacking and severely injuring a child. But such cases are just the extreme of a wider pattern.
Dogs should be stopped from barking at people outside their own homes: immediately punished and told off by their owners if they do such a thing. If the owners can’t or won’t do this, they should be banned from taking their dog into any public place. (Also dog licences should be re-introduced and enforced more seriously.)
What mostly happens now is that the victim gets stupid assurances, “he won’t hurt you”. So long as someone else is being harassed, they stay unconcerned. (Or maybe appreciate the violence of their dogs.)
Dogs need to be taught that the public space is public, then the occasional tragedy of a major attack would be much less likely. So too would the more frequent matter of a minor bite, and great deal of upset.
I’d be arrested if I made a habit of threatening strangers who came too close to me in a public place. Why should dogs be allowed to behave worse?
The Euro was and still is a threat to the dollar’s hegemony. It has come under fierce attack, despite Europe’s economy being no more stressed than the USA. A lot of the stress has come from Ratings Agencies, private companies owned by people in the US finance industry. And the Ratings Agencies certified a lot of rubbishy financial assets as excellent in the run-up to the crisis of 2008, allowing some people to make a lot of money in the process and leave others stuck with the loss. So why not be suspicious?
Such suspicions are sneered at “conspiracy theories”, as if conspiracies of various sorts were not part of human nature in every single human society we have any knowledge of. The term “conspiracy theory” should only be used when the claim assumes at least one of the following:
a) The accused is much more powerful than they seem.
b) The accused is working towards very different ends than those they openly admit to.
Even those can be true, but need a very high level of evidence before they can be taken seriously. But evidence the ordinary sort of conspiracy – people using the powers they obviously possess to covertly advance their stated aims – should not be lumped with the crackpot conspiracy notions.
It’s a very reasonable suspicion that financiers in the USA are out to break the Euro and are alarmed at the possibility of the European Union or a core group within in curbing excesses of capitalism.
A lot of the financial traders would be out of business if there were a Tobin Tax, the small tax on trades that Europe is proposing. A Tobin Tax wouldn’t mean much for someone who was doing a trade because of need. It would be lethal to the profits of speculators who make a tiny profit on each of a vast number of transactions, based not on need but on reading the market’s movements better than the rest. So a lot of reason to conspire against the Euro.
The Net and the Law [Internet Anti-Piracy]
The brief shut-down on 18th January by Wikipedia and a vast number of other websites had a significance that everyone seems to have missed. This drastic action against anti-piracy legislation being proposed by Congress was an admission that the internet isn’t in fact independent, or even very hard to control. The myth of uncontrollability is not believed by experts in the field, not when they see their own interests at risk.
The big problem with modern media is that once a single digital recording of a film, book or song has been produced, the cost of producing extra copies is very small. This applies particularly to films, where almost any film in the Top Ten will have cost tens of millions. The sale price has to reflect a share of producing the original as well as the copy. And with songs and films, and also some books, there is also a serious chance of losing money even without piracy.
It is also true that you get ludicrously large payments to a few lucky individuals. But that needs to be fixed in various ways, including tax. Piracy is not a fix.
So, I am against piracy. Yet there is also sensible criticism that the proposed laws would allow very wide use of powers, with great scope for abuse. Broadly, I do not expect the USA to fix it and do not trust them to do so.
One interesting extra:
“US legislators seem to have been taken aback by the vehement opposition of the big US technology companies, for example – companies which have traditionally tended to have a relatively low profile in Washington, at least compared with the movie studios and their representatives. The truth is that while the so-called ‘creative industries’ are important, they are economic minnows compared with the technology industries, and realisation of this may have led politicians to backpedal on Sopa.” [B]
The technology companies are not hurt by other people’s goods being pirated, and may indeed gain because a pirated film still needs expensive hardware to show its merits and come near to cinema quality. Hardware now is very hard to pirate. Software has keys and licences and also fairly easy to protect.
Not so much a blow for freedom as the bigger capitalists seeing off the smaller.
Egypt is now Islamist
The exact results are still being worked out in Egypt’s complex electoral system. But it is clear that Islamists of various sorts will control about two-thirds of the seats. The liberals and radicals who started the protests that brought down Mubarak now face something very much less to their tastes.
All of this was pretty predictable. And I was one of the minority who did predict it, even as most people in the West were enthusing about those nasty Arabs coming into line with nice Western values.
In my Newsnotes for February 2011, I said
“Things are moving so fast in Egypt that whatever I write now (Thursday 3rd [February]) could soon be out of date. But there is some underlying logic to events, so I will try.
“I was ahead of the game on Friday 28th [January], when I circulated an e-mail suggesting that what was happening then resembled the early stages of the overthrow of the Shah in Iran, which was a mix of Islamists with Western-orientated liberals and leftists. I didn’t see the mainstream British media saying that until later, and it had been noticed by then the Iranians themselves were making such comparisons…
“In Egypt, the position of the army is the key. The demonstrators gained power for as long as the army sounded neutral. But on Tuesday 1st February, Mubarak said he would be standing down in September. This seemed to satisfy the army, who then called for the demonstrators to go home. Since they could not fight the army, they would have been wise to have done just that, or at least offered terms for going.. Instead they stuck to a demand that the army had rejected – that Mubarak step down unilaterally.
“The rally and the subsequent street-fighting has been about that issue: should Mubarak be humiliated and his 30-year rule criminalised, with unpredictable results for all those who served the regime? It seems quite a lot of people thought this unreasonable. They wanted Egypt to move on but not to overturn what it has.
“Since most of the secular protestors don’t actually want Egypt to change very much, why are they continuing the confrontation?
“They should remember Iran, should be wary of the Muslim Brotherhood. I felt from early on that the Muslim Brotherhood were being smart in hanging back. The army would definitely crush an uprising that was dominated by them. But if secular protestors smash the secular state, or if the secular state smashes them, they are the coherent alternative. (The Arab left seems almost extinct, sadly.)”
The following month, I said:
“Various ‘reflective’ pieces have been written in the wake of the overthrow of existing governments in Tunisia and Egypt. The absence of a coherent government in either place does not bother the commentators. Nor a sudden surge in people trying to flee from Tunisia to Italy. It is Democracy and therefore it must be A Good Thing.
“The USA does also seem to have learned some lessons from the overthrow of the Shah of Iran. The main lesson seems to be that you should rat on your Third-World friends as soon as they look shaky.
“In Egypt, the protestors would have been wiser to have kept Mubarak once he seemed committed to reform. This would have been sound advice, but it was not the advice they were given. Instead the West more or less endorsed the hard-line stand that Mubarak must go before anything else happened.
“The protestors missed what would have been the best way to ease tensions, an assurance of immunity. This worked in South Africa, but it was arrived at because the USA was then dominant globally and the USA was looking after its friends. Elsewhere they see no need for it. Mubarak may have thought the USA was his friend, but the way he was treated suggests that they saw him as their servant, and now ‘surplus to requirements’…
“In Egypt, a lot of the anger has been about Egypt following a ‘globalist’ agenda, increasing inequality and trying to shrink the state. That’s bound to be a big issue if elections actually get held. But it may also prove that no one can cope with the new politics except the Islamists.
“As I said last month, the Iranian Revolution of 1978-9 proceeded by stages, with the Islamists eliminating their enemies by stages. Something similar could happen in Egypt, particularly since the non-Islamic forces have nothing very obvious to offer…
“The Tunisian and Egyptian uprisings are being seen as a continuation of the ‘Colour Revolutions’, the wave of well-organised popular protests that knocked over some of the governments which had emerged from the Soviet collapse.
“The overthrow of most governments in Middle-Europe in 1989 had a definite logic: those governments had become little more than puppets of Moscow, and people wanted a sharp change. Mostly they wanted admission to the European Union and incorporation in the European Union’s way of life. This is pretty much what they got.
“The change to a Western system was carried through without disaster in countries where there was a memory of multi-party politics. It has still been distinctly disappointing, with many of the new politicians making fools of themselves at international gatherings. Still, it has lasted.
“East of Middle-Europe – east of the Baltic states and the Carpathian Mountains – things were much more muddled. Middle-Europe could see itself as returning to its natural place as the close associate of Western Europe. The true Eastern Europe had different traditions and nowhere clear to go.”
It’s about worked out as I expected. I forecast a civil war in Libya, and facts now emerging suggest that the ‘insurgents’ would have lost without massive Western military backing. I suspected that Bahrain would not be democratised and it has not been. I suspected that the Syrian regime had enough popular support to last and so far it has.
People had a ludicrously false notion of what would happen if you overthrew an authoritarian system. In real history, only a few things are likely to then happen:
- Power may pass to some existing organ of government. Often the army. Sometimes to a parliament that had had limited powers, as in England in 1688. Or to regional governments, as in the American War of Independence where the thirteen states and most of the town and county governments were at the heart of the revolt.
- You may get a personal dictatorship round some charismatic leader, the end point of the French Revolution and also their Second Republic of 1848.
- You may get power passing to a collective with a strong ideology. This was the end-point in both Russia and China, though it took months in Russia and took nearly four decades of breakdown and weakness in China between the Republican revolution in 1912 and the Communist consolidation in 1949. Iran was more like Russia, a few months between getting rid of the Shah and the creation of an Islamic Republic.
- You may get complete chaos, as in Somalia
All these things are treated as unexpected, even though they keep happening. Western media kept thinking of the break-up of European Leninism. But that was mostly a set of existing governments going in a direction they had long wanted when the Soviet Union became too weak to stop them. In the fragments of the Soviet Union, the main trend has been back to charismatic leaders or else chaos. In Russia, it looks increasingly possible the Communists could get voted back into power.
The position in Egypt is that the more serious liberals know they have failed and are clinging to an alliance with the larger and more moderate branch of the Islamists, the party of the Muslim Brotherhood. The army seems to be taking the same line, support the new popular majority and be safe for the criminalisation that some of the protestors were calling for. And of course the price of that will be much more serious Islamisation of Egypt, traditionally moderate and secular.
Despite which, the West is still determined to destroy secular Syria. Some people don’t learn.
[In the event the Westernisers launched a new round of protests. And then the army took over, confident that the West would go on supporting them. Which is just what did happen.]
US Republicans [South Carolina]
The USA should be ashamed of South Carolina, prime defender of slavery in the early 19th century and initiator of secession several months before Abraham Lincoln actually took office. (The USA differs from most multi-party systems in making the newly elected leader wait for months before taking over the government. The election takes place in November, but the President only takes office in January, and in Lincoln’s day had to wait till March.)
South Carolina should be ashamed of itself. It produced John C. Calhoun, Andrew Jackson’s vice-president and several times Senator for South Carolina. He was the big advocate of slavery as a positive and noble institutions. Previous Southern politicians had been slave-owners but had seen it as a necessary evil, something it would be good to be rid of eventually. Calhoun championed liberalism and democracy for whites, but also believed that blacks should be slaves forever. He was also the leading figure in the Nullification Crisis of the 1830s, in which South Carolina claimed the right to reject federal trade tariffs. His last effort before dying in 1850 was to get passed a powerful Fugitive Slaves Act, which allowed intrusion into Northern states where slaves might have taken refuge. He certainly paved the way for the later Civil War, which was of course precipitated by South Carolina seceding.
(That was of course a revolt by Southern Democrats against a Republican presidency. This alignment lasted nearly 100 years, but when Kennedy and Johnson as leaders of the mainstream Democrats forced through racial equality, the Republicans led initially by Nixon managed to pick up the racist vote while avoiding ever being labelled as racist.)
South Carolina should be ashamed of itself and the USA should be ashamed of South Carolina. Neither outcome is very likely, of course. But I also get the feeling that the whole US Republican and Tea-Party tradition is desperate and not at all sure of itself. It hates change, but it is also an enthusiast for unfettered capitalism and global trade, the greatest agents of random change that the world has ever known. It correctly senses that it is a dying tradition, but has no idea what to do about it.
South Carolina may have made history again with reviving the Presidential campaign of Newt Gingrich, who was born in Pennsylvania but has mostly made his career in Georgia, right next to South Carolina. At one time he seemed out of the race, but now he and Romney are the only serious contenders. And he certainly knows how to work popular prejudice.
Gingrich got away with claiming it was unfair to voice the claim by his second wife that he had suggested an ‘open marriage’ before dumping her and moving on to his third wife (so far). It would have been unfair if Gingrich had always treated private morals as private, but that’s not true at all. He was prominent in going after Bill Clinton for doing much less. What’s sauce for Bill Clinton ought to be sauce for Newt Gingrich, but evidently Gingrich thinks otherwise and gets applauded for it by hard-core Republicans.
Intolerance begins at home or it is a bad joke. In the USA it is indeed a bad joke: I count them as weak because they have a history as such evasions.
Weak but dangerous, they still have nuclear weapons and the world’s biggest armed forces, including half of the world’s aircraft carriers and much more than half the actual naval might. They also still have lots of admirers, though ‘President Gingrich’ might help to cure that. The man is really a joke but a successful one, a man who can attack the ‘elite media’ while serving the richest 1% and be ‘Grinch Newtbridge’ when it comes to those on welfare. (He tells people to get off welfare and into a job, at a time of high and rising unemployment.) I assume he’ll say anything to get elected: he has reversed his position on Climate Change, where he used to believe but has now followed the key US Republican voters in becoming a Denialist.
It isn’t ignorance that makes you a fool: it’s what you know that ain’t so. That’s a piece of US folk wisdom, but it seems to have been excluded from current New Right package. Gingrich is a highly intelligent fool. He resembled Enoch Powell in lacking any self-critical ability, being unable to be skeptical about what he wants to believe. And in thinking conservatism is compatible with unchained capitalism, even with much more evidence than in Powell’s time of its utterly nihilistic effects.
Return of the Mixed Economy? [The Chinese example]
Since the mid-1990s, I’ve been asserting that People’s China was very far from capitalist. It is less equal and much more profit-driven than it was when Mao ruled, but it would have a long way to go before it got to the point that Western Europe was at during the high years of Keynesianism.
I don’t think I’ve had any influence outside of readers of this magazine, but the non-capitalist nature of China is now being conceded. Thus in the Guardian, one expert said:
“Unlike Britain, the US and the stricken eurozone economies – China has a modest budget deficit of around 2%. Which points to the central reason why China was able to ride out the global crisis of 2007-8 with such dramatic success. China’s response was to launch the biggest stimulus programme in the world, investing heavily in infrastructure.
“But instead of doing it through deficit spending and printing money, the Chinese government was able to use its ownership and control of the banks and large state companies to increase lending and investment. Which is why China has grown by 10% a year since the crash, while the west and Japan have shrunk or stagnated.
“China has travelled a vast distance from the socialised economy of the Maoist period and has a huge private sector and large-scale foreign investment. But its hybrid economic model continues to be based around a publicly owned core of banks and corporations. So while in Europe and the US governments rely on indirect (and so far entirely ineffective) mechanisms to reverse the collapse of private investment at the heart of the crisis – and private banks and corporations hoard bailout cash – China has the leverage directly to boost investment, jobs and incomes.
“And that state-owned core has been central to the country’s extraordinary growth over the past three decades. Of course that advance has also been based around the largest migration of workers in human history. And the costs of its economic rise have been massive: from rampant corruption and exploitation of low-wage labour to environmental degradation, decline in health and education provision, an explosion of inequality and serious restrictions on civil rights.
“Strikes and rural upheavals across China – as well as political shifts – are now challenging and having their impact on those failures. But China’s authoritarian system can also lead people elsewhere to ignore some powerful lessons about its economic experience. And one of those is that what used to be celebrated across the political mainstream in Britain and Europe as a ‘mixed economy’ – along with long-discarded levers such as capital controls – can deliver results that a privatised, deregulated economy is utterly unable to do.” [D]
The Economist for 21st January went rather further, noting that most of East Asia and many other developing economies had been run all along as a Mixed Economy, or what they call State Capitalist.[E] They complain about it, saying that the various semi-state companies and state-dominated banks could easily be adjusted to be much more profitable. No doubt they could be – but would that actually benefit the society as a whole?
The New Right thesis has been that profit for individual enterprises is the best guide to advancing the overall welfare of the society. That was Adam Smith’s doctrine – and quite unproven. As I detailed a few months back, neither the USA nor Britain have done better decade by decade since the Thatcher / Reagan revolution than in the decades before. Germany, Italy, France and Japan have done rather worse. And that was before the crisis that became acute in 2008 and shows no sign of ending any time soon.
[A] This particular passage comes from Book 2, sections 4:13 to 4:15
[E] The Visible Hand: The Rise of State Capitalism, 21st January 2012.