Thursday, 6 May 2010

It's not a Greek Crisis

"There is no money. There is no one else’s pocket left to pick. You can’t borrow anymore, you can’t print anymore, and you can’t steal anymore from anyone else....You object to the bond market, but the bond market is just the voice of reality calling. It’s telling you that 2 plus 2 is still 4, no matter what your union bosses would have you believe. Your bosses tell you that ‘the people’ didn’t spend the money, but it’s not true. That’s exactly who has wasted the money, and now the bill is coming due....You’ve thrown your bottles, burned your flags, waved your signs and had your fun. Now it’s time for you to learn the lessons of history and abandon this idiocy before we finally lose our patience with you. Grow up – and get back to work."
Daily rant directed towards the recent Greek Protesters

It may be all Greek to you, but the effects of the bond bubble is here for all to view (already a wiki page has formed). As soon as the so called economic professors proclaimed the financial crisis to be over (the very same individuals who said 'What housing bubble?') another one has begun to erupt and its only just begun. The location or nation doesn't matter, the important point is no politician, government official or prominent academic has a clue what to do next. A 'bailout' is required to avoid financial contagion, horror stories of Lehman are retold. It doesn't matter that no one in the West can cope with their own domestic liabilities never mind take on others, instead a short term fix is proposed as the solution. In reality it can only exacerbate the problems down the line.

Euro bashing has taken center stage. All the Euro sceptics have suddenly come out of the closet. They never knew in the first place why the UK shouldn't join the Euro but recent events have given them the confidence to speak out once more. Is the Euro doomed? Wrong question. All fiat money is doomed. Despite what has been said regarding the Euro, the Germans hold the key to it. Their Deutschtum regarding sound monetary policy does not bode well for future bailouts towards the more irresponsible European nations. Germany should have got rid of Greece and let them fail. But politicians prefer short term fixes rather than the tough long term ones - they won't be around when they break again. Our old PM Tony Blair can attest to that.

Many falsely believe that Greece is the Canary down the coal mine. Put it this way, did we expect better of the Southern Mediterranean nations? We could list the historical facts, the Inquisition, Catholicism focus on the collective rather than the individual, corruption, even the hot weather but that's what history teaches you - what to expect. Greece isn't the canary down the coal mine, the drachma when it existed was very weak, and the Greeks vigilance at the printing press had a terrible history. Britain, as I have mentioned, is the canary down the coal mine from what I can gather. It is a member of the monetary core - nations such as Germany, Switzerland, the Scandinavian countries, the US - these countries have historically had relative sound money (a few periods of exception can be noted) and have respected individual liberties as early leaders of free markets. When the crisis spreads to the core then we will see real problems. Who will bailout the last resort? There is only one tool. A printing press, others such as China wait to see what destruction we can inflict on ourselves. They gave us cheep goods, gave us their savings to buy more of their goods and saturated us with consumption based debt as we have already struggled to grow our economies over the past decade. If you can't beat them militarily then use economics as a weapon, as Sun Tzu said, ' hundred victories in one hundred battles is not the most skillful. Seizing the enemy without fighting is the most skillful'.

Portugal and Spain are showing signs of stress also, how long it takes to spread northwards remains to be seen. Eastwards Dr Faber says bubbles are forming in China, nothing I haven't observed but good to hear from the doom prophet whose practically called every bearish situation before it happened for the past 25 years. Where can an investor turn in times like these? The answer should now become obvious to anyone who is following such events closely.

Tonight we have the election here in the UK. Will we have a hung parliament? I hope it lives up to its promises as the most exciting election in a generation. The last two were very boring for a neutral like me, I was too young for the elections previous to these. On that note its time to go watch what Government will 'solve' our domestic crisis. Unfortunately as the quote hints at the start, no politician or bailout offers a cure. Only ourselves as individuals can put things right. Politicians will just keep putting our problems back for the next guy to solve.


  1. The mystery of government spending is like poring water from a half full glass in to half empty glass the total amount of water is the same. The money Governments spends is the money we will not spend plus the money they borrowed or print in our names. However this is not the case for countries such as Greece, Portugal, Italy and Spain since they cannot borrow in there own currencies.
    In other words with out a bailout they have to pay or default. Bailing them out will defeat the purpose of the Euro.

    The UK or the US cannot default since they can borrow in there own currencies.
    If there is no demand for their bonds there central banks will simply print and purchase them.
    This is conveniently called "Quantitative Easing" so that most people do not understand that it is counterfeiting. This will be the final invisible tax that will dilute the public debt but will evaporate personal savings at the same time. Those countries will not technically default instead they will deteriorate and their citizens could very well default.

  2. My criticism of the Greek economy is in the level of tax avoidance, which is generally accepted to be far more widespread than in this country.

    In this case I think their govt should take the initiative to show some goodwill - it may go a long way to easing the pain and if it's done well may even help balance the books quicker.

    I'm interested on your thoughts on tax avoidance in the wider sense - what is the impact and what does it say about tax policy? How high is it in this country and which sections of society engage in the practice to a larger extent?

    Don't taxpayers feel they have a greater stake in what their govt spends it on? Should(n't) govt listen to people who actively freeload?

  3. *the greek govt should take the initiative to lower taxes

  4. Its what many on the left think they can get away with - taxing people more and more and somehow talented hard working people will just put up with it. In reality, even in the UK, people avoid taxes, pushing money into other avenues rather than pay it through income taxes. Its one big moral hazard. The higher the taxes go, the lower private capital and enterprise there will be. Brain drains happen where people in effect leave the country if it gets bad relatively to other countries.

    On the point above, yes the Greeks should lower taxes however their government are so far in a hole that they just can't do it. They will have to get tough on tax avoidance to get some revenue. Of course a brain drain may occur leaving them short of revenues again.

    The raising of taxes is theft. I notice that the new UK government are thinking of raising CGT to 40%. I mean who gives them the authority to take peoples investments, people who may have worked hard and saved to get that money.

    Not to mention the Government needs an army of tax collectors to chase people up, a complete waste of societies resources.

    In my opinion we wouldn't have taxes. People could pay for what they want to use.

  5. The argument for raising CGT at this time is to equalise the rate at which it is taxed with that of Income Tax.

    Differential rates increase equality because of the different spread of applicability across demographics (ie rich people have more assets and therefore pay more CGT), but this leads to effective tax avoidance where bankers pay 18% while their cleaners pay 40% (as well as incentivising a whole unproductive sector of the financial industry devoted to finding and exploiting any loopholes).

    So by your terms (that tax is theft), differential rates are not only theft but theft from those who can least afford it!

    Equalisation 'up' also happens to raise the tax take which is helpful at this time, otherwise I'd have been interested to hear more about the 'tax neutral' stance where tax switches don't increase the total revenue to the Treasury.

    But on the point of principle behind taxation, can the market operate efficiently without parameters set by taxation? How would it be possible to measure the invisible costs to society for the provision of basic standards of universal access to services (such as roads, schools or A&E departments for instance)?

    You may argue we can do away with these, but I think that'd miss a major part of the the calculation - ie that paying for good schooling or basic health actually saves money by reducing crime and preventing public health problems such as cholera (these were common epidemics through the 1800s when government accepted little or no social responsibility in these areas).

    I mean, we could save billions by abolishing the police force and the NHS, but how would that affect overall productivity? Do you really want to see slums like the 19thCentury Whitechapel spring up again?

    And how would the eastenders react if you told them the consequences of equalisation 'down'?

    Probably in the same way as the Greeks. By rioting.

    As a matter of interest I found a recent offline estimate of the proportion of tax avoided. 25-30% in UK, 40-50% in Greece.

    Interestingly there seems to be a major correlation between wealth/poverty indicators and the scale of tax avoidance. Which may go a long way to explain Africa's economic legacy.

    Better in the hands of the taxman than in the hands of a real criminal, eh Mr Mugabe?

  6. *differential rates increase inequality

  7. Its a common mistake to make comparisons with slums in 19thC Victorian Britain to now, a classic scare story of the left. It makes the silly comparison of their capital structure to our current one. Of course we don't have slums like that, but it isn't state spending that has prevented that, its the advancement of private enterprise through the years along with technology. We stand on our ancestors shoulders.

    Regarding Roads or A&E etc this was all paid by the private sector at one point. In fact Britain had the best roads in Europe much better than places like France a couple of hundred years ago. They were paid by private money, not the state, while as Frances roads were built by regal families. Read historical accounts. Again people think falsely that the NHS is some wonder from the state, its not. Its the advancement of the free market that has enabled the state to raise more taxes from the private sector to pay for it. 100-200 years ago our society was too poor for an NHS, we even had to send our children to work as our industrial base was so low. Same with education, police. People can pay money for what they use, or insurance type payments.

    Regarding CGT - I'm not a banker but not only do I have to pay money on earned income, but the money I save is also subject to further tax.

    I don't think people would complain if there was no tax. They'd just notice the increase in living standards for all, the same whenever tax is lowered. What is inequality? Don't we all have different goals and ambitions? I much prefer to read than earn fistfuls of money.

  8. Comparisons are only relevant and valid when they are made on a like-for-like basis.

    The turnpike trusts which allowed for the expansion of the road network in Britain were only successful up to a point.

    This was partly because tolls were difficult to enforce for those determined to avoid them, like the highwaymen, whose crimes the new roads encouraged, but also because their full benefit couldn't be realised without funding for patrols. Equally the economic challenge of the railways took large volumes of traffic from them, so toll charges grew beyond the level of widespread affordability and the roads began to be taken within the remit of the state precisely because of the new technology.

    Basically direct taxation became essential to support a minimum standard which indirect taxation could no longer.

    It's not a matter of one being better than the other, than it is each are better applied to different circumstances.

    On the point about slums I'd ask you: what did private enterprise ever do to banish the spree killers of the likes of Jack the Ripper from the streets? And how do you explain private enterprises' lack of interest in the massive investments to pay for Bazalgette's sewage system during the middle of a public health epidemic?

    I don't agree that any system can be effective over the longer term unless it can balance the competing interests. State income derived from usage, or through insurance is not nearly as predictable, so it cannot guarantee the minimum standards demanded by the public. And if the state does not use direct taxation, then it is no different from private companies anyway - who will defend the national interest then?

    So unless you are prepared to make a political choice to abandon an underclass and reject international pressures it is impossible to avoid direct taxation - in fact it was the moves against this in the 19thC which opened up the space for a new party to demand the mechanism of direct taxation was taken advantage of to fund these areas.

    In other words the practical consequence of a refusal to compromise your own ideological adherence will be to strengthen your ideological opponents.

    For my part not being a wealthy monkey I don't have any particular preference for the type of taxation levied on me, rather I am concerned it is at a fair level for the services provided, that it is at a fair level compared to the means and usage of everyone else and that the long-term security of the nation's finances is provided for in the best way.

    The trouble with differential rates of direct taxation is that it unbalances the economy by incentivising the placement of capital in less productive areas.

    While you are right that people eventually do pay for what they use, it remains unanswered how people with insufficient capital gain access to the services in the first place.

    Government must play a role in kickstarting strategically-important schemes, partly because that is what it is mandated to do and partly because that is how we hold it accountable.

    If that role were to be removed from the state, then it becomes the plaything of whoever does gain control (ie the non-dom bankers and corporate barons like Ashcroft and Murdoch). Nice for them, but not nice for the rest of us.

  9. Ashcroft and Murdoch - who gave them power? It was the politicians, the government! If it weren't for them, competitive forces always ensure no one can carry out their interest at the expense of others.

    Back to the roads, the private roads in the UK were better than the French or the Spanish because private companies would build them to serve a purpose for all, not the minorities as in the later's case. They were of much better condition and less expensive to travel on.

    Again your point regarding railways, initially private money all run by non state entities until the state took them over. The rot set in for railways when the state started building roads for 'free', while the railway companies got no such subsidy so had to compete with the roads the state was putting money into.

    Regarding private enterprise (or just people acting as individuals) dealing with slums it does all the time by advancing societies standards of living. Again its not the state that deals with poverty, its people. That's why countries such as Cuba and North Korea are so poor, just one big large slum but the government argues that they have got rid of slums.

    I think we will have to agree to disagree. I believe people should be free to do what they want as long as it doesn't cause harm to others and there should be no state. The state creates the unfair conditions, they don't create fairness and equality as they claim.

  10. Hang on there, you're being selective in your examples.

    It's dangerous to ignore the possibilities or the drawbacks of any policy position - especially if it is maintained dogmatically against the flow of events.

    Equalising up and equalising down are just as contentious as the increase in inequality which unconstrained market forces provides, so for me it's not a question of which is right and which is wrong, but of under what conditions a policy can have the best effect. I'd place a severe health warning against sticking to one, particularly in a democracy when electoral pressures demand changes.

    However I agree that the past government started to shift the balance in a way which was more damaging than helpful.

    And this lesson also applies to the corporate structures which were responsible for road and rail in the past. I think you've missed out the period when overexpansion of the railways meant the rail companies were unsustainable, just as you've missed out the period when toll roads saw a massive decline in quality because incomes fell when the competing transport systems took business away from them and reinvestment in maintenance couldn't be maintained.

    In this I think you're neglecting the positive role of the state in providing guarantees of service level which comes to the fore as private companies increasingly deny any public service remit - I mean, would you want all news to be fox news? Are Virgin Trains perfectly clean, reliable and punctual?

    And here I'd point to the standard criticism of democracy that governments are only representative of a majority at most. Politicians didn't give wealthy members of society additional power, rather this is a consequence of the electoral system where we the people in the form of our votes and economic choices passed power to them. If politicians are blamed, this is indirectly our fault for putting and keeping them in place.

    I think the question of the existence of a state is far less relevant than understanding the proper role of one and understanding how its functions can be constrained to proper levels to optimise the effectiveness of society in general.

    I also think the idealistic belief in a minimised state function also depends on an international perspective of cooperation, rather than pure competition, as the threat of foreign armies cannot be combatted solely by private enterprise. Extreme competition leads a zero sium games where there are equal numbers of winners and losers - nice for the winners, but not for anyone else.

    Private enterprise (corporations) is notoriously less accountable to public concerns, just as the public enterprise (the state) is to private concerns, so the correct answer must be in finding and maintaining a workable balance between the two.

    I don't see that your desire for private enterprise to subsume the public enterprise has any wholly positive precedent in history - you want to be ruled by the whim of the nearest military dictator? Are you really arguing that what is good for them must be good for you? I don't think so.

    Surely you are arguing for a more democratic and more accountable society, merely that the overbearance of the state of recent years has pushed you towards greater emphasis on private solutions. At which point I'd find it very possible to agree.

  11. So I think it is worth acknowledging the multiple perspectives towards societal organisation are largely determined by ones starting point and that it is only where agreement can be found that a course of action can be decided.

    I'm firmly opposed to all ideological rationales at an individual level because they each refuse to reconcile themselves to the reality of alternatives - none of which can automatically be assumed to be negative (or positive for that matter). And on a practical level unswerving adherence to ideology begs the question how one intends to implement proposals without alienating public support.

    So forgive me for refusing to rule out the possibility of agreement and continuing this discussion: I don't agree to disagree - there are always new facts and new perspectives which may change our minds.

    So I'd like to ask a philosophical question about the harm principle (which I support in general terms).

    Would you argue this principle legitimises or delegitimises suicide?

    Is this a wholly personal choice, or would you accept the consequences of the choice impacts others, necessarily or otherwise? If otherwise, then surely it is a matter of the conditions under which it occurs, rather than one or other.

    So is any man an island?

  12. You make a lot of points above and I can't possibly answer them all. Regarding suicide, if a person wishes to take their life, then they are free to do so in my opinion. If it impacts on others ie family members then so be it. People sign up to the armed forces knowing full well they could die in action, causing great grief to the ones they leave behind. But its that individuals choice and no one should take that decision away from them, especially the state.

    Regarding the money into roads or railways, I still do disagree but think about it like this. We used to prop up our miners, steal companies, car makers etc all at the expense of the taxpayer, society. Thats the whole point of the free market, people decide what they want to use and buy as individuals which in turn decides what sections of society should have resources put towards them. Its not the job of the state - the state always makes bad decisions on these points.

    Yes I believe in private solutions. To sum up my point I wouldn't have a government or state. We don't need one. Wars, poverty, mass corruption - its always caused by the state. A free society would organise itself as people are rational despite the common wisdom that people think we need a government to protect us. Laws would be formed, liberty and freedom would stop corruption early and economic stability would actually exist.

  13. Well, that's what I'm getting at - either you're describing the intellectual communist dream of universal connectivity (the borg) which thereby escapes capitalist economics and abolishes private enterprise to create global harmony, or you're wishing to create a power vacuum which opens the risk of it being filled aggressively.

    The way I see it organised power must proliferate and grow until it reaches it's natural limits, only then will it be able to dissolve all the invasive and overbearing mechanisms which enables it to function.

    Because it must require a universal solution, otherwise the most centralised power able to marshall the most resources (directly or in a looser coalition format) will simply take advantage of the weakness and invade.

    I think the example I'd give is of the dark ages in Britain after the romans left and took their state apparatus with them.

    The Romano-British and then the anglo-saxons were too disunited to effectively combat expansionist invaders who were at that point with only a tribal (rather than state) structure to support them.

    But even then a natural hierarchy tends to emerge which forms an established decision-making structure for matters of shared importance - particularly in the face of existential threats, such as invasion or escalated internal conflict.

    The historical truth is that the state evolved on the battlefield, not in the mind of any mystic or psychopathic maniac. Conflict is not the creation of the state, but the consequence of an imperfect state.

    So how is it possible to have no state unless all sides agree equally and at the same time?

    And how is it possible to gain universal agreement unless there is an agreed means of reaching it in an established forum with a level of legitimate authority?

    Aren't you therefore calling for a stronger UN with a more direct and powerful mandate, or a permanent communication technology which enables everyone constant access and rigorously enforced attendance (a physically embedded internet, with twitter on you eyeballs, maybe?)? Wouldn't that then have all the functions and appearances of a state - either in the administration or in the programming?

    In other words the state is simply an extension of self-organising hierarchies and without completely reforming access to the decision-making processes we all live in accordance with there is no means or hope to get rid of it.

    At it's heart isn't the state just a reflection of the basic family unit? and our opinion of it our reaction to our own familiy upbringing?

    more questions, sorry

  14. I say people can take care of their own defences if that were the case and pay for an armed force. The Army would decide when to intervene ie when under attack. The level of money raised to pay for this can be decided by the people on a vote system.

    Stronger UN - no they are not the solution, part of the problem.

    We can have democracy without the state. Whenever I think about the situation that we can have a state history shouts back and says it always, without fail, will abuse its power. The US set up a constitution to limit powers of its state but all of that has been thrown out of the window in the past century. So we need no state, we can still form decisions just in a democratic manner with no presidential figure making decisions that are not in everyone's interest. Iraq? Brown Selling Gold? Afghanistan? Bailouts? All dictated upon us with no say.

    A single nation could successfully have no state, similar to when the world thought Communism would take over. It didn't because the free market economies won out and showed the others how much more prosperous they were. Free markets always show people the way. Only problem is Governments wouldn't want this and would boycott the country with no state. Shame, but history is always full of power mad people.

  15. Your frustration with the failings of the current system is manifest, but your proposed solution is highly problematic.

    It seems you're saying power corrupts and absolute power corrupts absolutely.

    But what you're not accounting for is that it is impossible to prevent the corruption of power even where the amount of power held is limited. Corruption will still occur because it is impossible to remove power altogether - whether it is placed equally in everyone's hands or collected in the hands of fewer.

    Using your example of a self-restraining army, we only need to look at the recent case of Sierra Leone (cited as a good example of intrvention) when the commander went beyond any remit to campaign on his own behalf.

    Freeing commanders from democratic accountability places huge onus on their personal political convictions and analytical skills, and in cases such as currently in Thailand, nothing would then prevent them from roaming the streets, massacring thousands and mounting a coup to secure their position and impose their view.

    Armies have regularly and systematically seen fit or been used as vehicles to reinforce order where it breaks down, often taking matters into their own hands - we only need to look at the past century to see the scale of loss of life to understand the consequences of removing their accountabililty.

    This is where my argument that the state is not separate from the rest of society comes in: the most powerful individual always assumes charge and the chain of command remains unbroken.

    However which individual ends up at the top of the chain and how they exercise it depends on the type of power the culture of that society emphasises most. Merely removing the emphasis from the current bureaucratic/democratic system of protocol, argument and debate opens up the real possibility that force will surely become the order of the day.

    And this is where I dispute the criticism that there was no debate over the various issues you mention during the past decade.

  16. There were people who stood up in parliament and strongly criticised every single issue which you objected to, but due to the perverse electoral system which distorts the weight of electoral decisions to place undue emphasis on the few votes in key marginals under FPTP it meant the percieved majority opinion was underrepresented when it came to these contended issues and the percieved minority was able to hold sway in parliament where and when it mattered. The connection between the population and our representatives was shown to be broken - it's disproportionality had been exposed as a fatal flaw.

    So if you say the system was designed to create a distorted picture which resulted in the wrong decisions, I'd say that was a more accurate description. And the difference between reform and abolition being that in redesigning the system with a different electoral system parliament it will be composed and constructed differently - meaning it is almost guaranteed to reach different conclusions because it will be reaching them in different ways.

    Or you can leave it to pure chance that military commanders don't catch syphilis (as was common for centuries) and suffer mental debilitation, or have other psychological demons they need to work out but have hidden and repressed until the crucial moment arrives.

    The common comparison is between a free market and a casino. Any system which depends upon luck will always fail in the long run as the public at least gets to participate in the false reasoning behind the bad decisions of a constitutionally elected government and this creates a legitimacy even where we may disagree with their acts in any particular instance.

    So your charge that the state does not act on precedent (though it may be bent to whim) is just not accurate.

    Anyway, if you want me to be blunt, if we never developed a state with all it's checks and balances, protocols and oversights etc., humanity would still be practicing ritual sacrifice - as has returned in a number of the darkest corners of civilisation in recent years where the breakdown of society has become apparent.

    That's not something I'd recommend, as it is typically a practise used to silence social and political dissenters.

  17. Sure corruption will occur, scams - but this is imperfections of individuals and the law should deal with such individuals as required. Problem with states is the corruption can go on for decades.

    Regarding Armies interventions - we should only intervne if someone attacks or a genocide occurs. All other issues are domestic regardless of how grotesque. We should let indivdual nations overthrow corrupt regimes - it always happens eventually.

    Regarding FPTP see my hung parliament post regarding my thoughts on this.

    Free market and Casino - too many Michael Moore films.

    The state, our saviour created modernity? Now that is naive. It was because we remove the state that countries get rich and are better than others who give rise to larger state or regal monopolies. The more power people have as individuals the more stable a social system is. Look at the UK. Liberal, tiny government, for decades. Then along came statism post World War II and the whole country became a shambles, 3 day power weeks, no rubbish collection. All of it caused by our wonderful state.

  18. Now you've opened up a gaping contradiction in your argument, which I don't see how you can get around.

    I think you need to ask yourself again 'what is the state?'

    The simplest description is of a sovereign body which both creates and enforces laws. It is composed of the institutions which facilitate these functions, but it is better understood as a moral state whose success is in developing under its auspices a binding contract between the individual and the collective (the meta-relationship).

    In other words the state is the law.

    Which means if you do away with the state, you are doing away with law by doing away with law-makers and law enforcers. Therefore if you do away with the state you can have no recourse to the law of the land - you are forced into a position where you must actively seek protection, with all the potential insecurities and confusion a system of opt-ins and opt-outs brings with it (think mafia protection - that's natural law ie continual vendattas based on honour codes and perpetual fear of death at any moment).

    It's a bit of a pity you didn't pick up on the phrase 'basic standards' because that is the standard synonym for law.

    It is also strange that you've created a presumption that a law and a piece of paper can automatically be equated. A piece of paper has no meaning and no value unless it is backed up by a guarantee, and the state is the only universal guarantor - without institutional capability there is no guarantee (eg without a state-sanctioned reserve bank all transactions would still take place using coinage - paper money and digital money couldn't exist). It is because legitimacy requires and depends on accountability and eventually this derrogates down to open and inclusive public elections.

    So Weber's description of the state as a monopoly on the legitmate use of force retains its vailidty because it is a jurisdictional description, not an economic description. Which may explain where your confusion arises from (since you come at the concept from an economic perspective).

    Now the legitimacy of the state can and does vary according to the quality of the laws it makes and the reliability and rigour with which they are enforced, so I must ask you again whether you are really just criticising the current level of legitimacy from a minimal-state libertarian position or rejecting it altogether as an anti-state anarchist.

    As it happens I'm actually a supporter of the Chatham House organisation, but I didn't know they made films too (it seems against the spirit of the rule), so if you can point me in the direction of any I'd be grateful (I'm not convinced Michael Moore would be the best presenter they have either, esp given the resources available to them). What is it you dislike so much about diplomacy and free discussion?

  19. The states not the law, its the peoples will that makes the law. Some of the most corrupt countries are the ones where the state controls all facets of society.

    I too grappled with the concept of having smaller states, to do what they should. Problem is states always get larger for whatever reason. Therefore the logical conclusion is we have to have no state. If the state is outlawed so is unlawful power that can be wielded by the few. A free society where people can do as they please as long as they are within the bounds of the laws societies set. Thats what I'd like to see.

    You'd be amazed how rational people can be as a collective.

  20. If the state is incapable of restraint and incapable of being restrained then we wouldn't even be having this exchange.

    I stand by the description of the origin of legitimacy and that this creates a state where law can be codified and upheld.

    It is disingenuous to separate an understanding of 'the state' from 'the people' as it is intrinsically derrived from our ability to communicate with each other.

    So rather than seeing the state as imposed from above (which would be illegitimate) we must instead see it as a product of a process of self-organisation which requires the consent and complicity of those who are held within it's bounds.

    Therefore the state offers an undeniable route to protection for the masses against the powerful few without which we would be endlessly subject.

    Admittedly this is dependent on our ability to use the institutions of state to our benefit rather than allow them to be perverted to the ends of those with vested interests. Also the demos is defined by our imperfection and our plurality on what this means in concrete terms, so we will - and should - inevitably extend the argument about reform to allow us the flexibility to deal with the ever shifting nature of events, but as communication and free expression gradually expands global integration will gather pace to the point where the overbearance of the public enterprise on private choice can be minimised.

    How far this will go and how fast it can be achieved depends on the a range of factors such as the extent of human ambition, capability and conceptualisation of our choices. For one, the exploration of space presents a universal challenge which I don't think can be attained without at least some universally-inclusive organisation.

    Anyway, the very idea of reason and its ability to remain perpetually enslaved by subjective perspectives (even my own) is a source of constant amazement, so it's good to continue the debate.

  21. One other thing.

    It does irk me when single objects (ie 'the state', the EU, immigrants, criminals etc) are indentified as the single scapegoat and it is argued that everything would be alright if they were just done away with abolished.

    This habit strikes me as an easy debating option because it gives a get out clause to understanding the broader interplay of a variety of issues and how unintended consequences are created, often with much greater negative impacts.

    My feeling therefore is that it is best to accept there is a problem (and the size of the state is definitely one in the here and now), but to try and mitigate the worst excesses without denying the reasoning for it in the first place.

    Similar examples can be found in every area - from drugs and alcohol, to nuclear weapons, to welfare benefits or whatever: we just don't live in an ideal world.

    The problem is in making the transition to something better.

    And, just like with nuclear weapons, I can't accept unilateral action is a sustainable answer. There will always be dissent, so the difficulty comes in finding a mutually acceptable position where all sides are equally serious and resolute to the outcome.

    I mean, Aldermaston is on our doorstep, but while NKorea is in the habit of sinking neighbours subs and Iran still wishes to exert itself how do we influence them without becoming a victim?

    It is impossible to ignore threats, yet we would be failing if we simply submitted.

    But then complexity never plays well.