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.




But the NHS were trying…

I was impressed that the libertarian press was sticking the boot into the mainstream media, Labour and the NHS in an apparently co-ordinated effort today. The City AM editorial made the point nicely and Guido backed it. It is vital to ask why one story – Libor or horse meat – is getting more press than another – the large scale failure of NHS hospitals. This is how bias is revealed.

The question is powerfully raised, but I don’t like the answers. Guido simply highlights that the difference exists, and points to the equine story as a distraction, and so made no contribution on this point. Heath gets it wrong by highlighting “double standards”, but there is a totally consistent standard that is being applied.

The NHS is set up to help the poor get healthcare. The poor, having better things to worry about, tend not to be the people doing all the shouting. For that we have Polly-Toynbee-style trustifarians with smart houses and cushy jobs writing daily columns, not filling sandwiches nightly in factories.

What the shouting in favour of the NHS is usually about is that the NHS helps others. Not the speaker. Everyone except the speaker who is alright-actually thanks-for-asking. That the NHS failed to care for 1200 people, resulting in their deaths is regrettable but the NHS was trying to do good. It was trying to help others, not the speaker and not the NHS either. The fact that the NHS is a lose-win deal makes it virtuous. The NHS and everyone who pays for it lose and the patients win; that’s the point. Were NHS staff greedy, self-absorbed, evasive and dishonest? Almost certainly, but they are part of a larger project aiming for a lose-win outcome.

Meanwhile, meat manufacturers and bankers exist to help customers. Customers who pay them money. Their normal mode of operation is rationally self interested: a win-win. Such sustainable trades are morally neutral at best, but eyed with suspicion. Are those win-win outcomes really fair? How come one party has more buildings and employees?… hmnn…. In this context the greedy, self-absorbed, evasive, and dishonest minority tip the scale and the result is an anger which is unmitigated by any appreciation for a larger virtue.

The standard then, to spell it out, is nasty unpleasantness on one side balanced with lose-win altruistic contributions; and the NHS is seen as a massive charitable program. It might very well be avoiding criticism due to bias and short-termist point scoring by the left, but the NHS is supposed to be forgiven, it’s trying and that is good enough. That it might be trying something unsustainable and foolish is not part of the analysis. The problem is that the whole moral analysis is flawed, and that is why this blog keeps returning to the point that to win we must change the terms of the moral analysis.