Legal Theft

I should begin with a disclaimer.

Over the last eight years I have owned two successful and profitable businesses which had to be liquidated because the bank I was with moved the financial goal posts. In both cases, my local “relationship manager” was powerless to help mitigate a blanket decision made much further up the food chain. So the news over the last few days regarding the actions of RBS in closing down small businesses seems less remarkable to me than it will have been to many others.

The assertion is that these businesses were closed by the sudden withdrawal of agreed lending in order that RBS could acquire the assets of the businesses at prices below the market value. It is worth noting that the story has been brought to our attention by a businessman who was invited to join the Department of Business Innovation and Skills and had not, apparently, been subjected to the compulsory briefing on how state corporatism works and what truths may not be stated.

But I have to tell you that what has been revealed thus far is [In Ken’s opinion -Ed] only the tip of the iceberg and all the major banks were following similar policies of preying on their customers – weakening them, killing them, then picking their bones.

For even more outrageous and scandalous examples it is worth reading some of the wonderful investigative reporting of Ian Fraser, particularly into the HBOS operation in Reading.

This was a scam run by the wonderfully named Lyndon Scourfield and involved Mediterranean yachts, suitcases of cash and East European call girls. So far, ten people have been arrested but, given the record of the Serious Fraud Office in prosecuting financial crime, I don’t suppose they are too concerned.

And, in parallel with the crimes perpetrated by the banks, it could be argued that the consequences of the actions of the asset factoring companies are even more devastating. After reading these horror stories, you will be astonished we have any small businesses left.

Furthermore, it is a strange fact that most of these crimes have been totally ignored by the main stream media. Not being a conspiracy theorist I assume that they think that the public are either uninterested in financial matters or too stupid to understand them. However it is a fact that, for every business destroyed, real people lost their jobs, homes, marriages and, in some cases, their lives.

But what has all this got to do with libertarianism?

Well, I recently wrote here about the detrimental effects of the energy cartel currently operating in the UK and my concerns regarding the unfettered power of state corporatism. The banking scandals referred to above are yet another symptom of the same problem – a sector protected by state regulation, actively conniving to make excess profits and protected, by the state, from failure.

It is increasingly clear to this libertarian how the battle lines are, and will be, drawn. On the one side we have the large corporations which collude with and feed off the state and are permitted, by government, and the uneven application of the rule of law, to feed off us. On the other side you have everybody else.

This story is important because I believe the natural affection that libertarians have for property rights and markets should not blind us to the dangers and excesses of the capitalist system currently operating in this country and we should understand that there can be no legitimate right to assets that have been stolen, however lawfully.