The corporatist corruption of capitalism in the UK
chancellor's Autumn Statement...
"CORPORATISM," said ex-Tory MP
and now UKIP intellect Douglas Carswell on Wednesday.
"Hard-hatted corporatism."
Carswell was tweeting about the UK Conservative government's new
Budget programme, writes Adrian Ash at BullionVault,
outlined to Parliament on Wednesday by Chancellor George Osborne in his
Autumn Statement.
...and a point not far either from Labour shadow chancellor
John McDonnell's mis-fired gimmick – in his response to Osborne's statement –
of quoting and
throwing 20th century Chinese dictator Chairman Mao's Little Red Book
at the Tory front bench on Wednesday.
See, with nickel prices hitting new 12-year lows, Chinese
base-metal producers on Monday asked Beijing to buy "surplus" stockpiles,
reports Reuters – "the first coordinated effort since 2009 to revive
prices."
Would the Politburo buy? It's planning to amass $10 trillion-worth of raw materials from overseas
anyway, Premier Li Keqiang said Wednesday. So why not?
Bloomberg says Wednesday's rally in base metal prices
showed how "China is moving to prop up metals prices." And with that rumour of
state-support in the bag, China's base-metals lobby began petitioning for
more government meddling, this time to ban "short selling" of metals derivatives by
speculators – that old bug-bear of every special interest group in any
financial market.
China also leads the world in mining gold – also at
multi-year low prices right now. And Beijing already happens to be the No.1
central-bank gold buyer this century so far.
Ex-Soviet Russia too – the world's No.2 or 3 gold producer – has been piling up central-bank
gold. Whether that's aimed at boosting prices or not, it has certainly helped
Russia's domestic miners earn Rubles even as sanctions block Russian banks from doing business
for Dollars or Euros over the Ukraine crisis.
The Kremlin has also long helped Russia's domestic
platinum and palladium miners. State depository Gokhran holds untold quantities of the white metals. And
Wednesday's pop in the price of palladium – half of which comes from Russian
mines each year – quickly saw traders gossip that the government was out
buying more, trying to put a floor in the market at these new multi-year
lows.
India has no precious metals mines to speak of. But it
does have a huge jewelry sector, serving the world's No.1 consumer gold
market and employing maybe 2 million people directly in small
workshops and bigger factories.
Hence the "hard hat" jibe from Carswell. Hence
the torrent of concrete coming across the country. Hence the flood of
construction contracts...and financing deals...needed first.
In his Budget speech Wednesday, Osborne used the word
"build" some 27 times. That was well ahead of "income"
(17), "credit" (11), "deficit" (10) and "debt"
(16).
Can you guess the only other words (on our quick count at
least) which he used more?
"Tax" (34) and "spending" (63).
Tax, spending and building. Cheers!
"This system, however, is not capitalism, but rather
an economic order that harks back to [imperial Germany's] Bismarck in the
late nineteenth century and [Fascist Italy's] Mussolini in the twentieth: corporatism."
Phelps is wrong, of course. There never was some
"Austrian economics" Eden where entrepreneurs ran naked, unabashed
and uncorrupted by State-given contracts and monopolies. The rule of law
finds "government" and "civilization" indistinguishable.
And while the "managerial state" surely does afflict the modern
West, its ideal now lies not in history – not even in the "stop-go"
industrial policy of the 1960s and '70s – but in today's so-called
"emerging economies".
A decade ago, Brown famously announced "the end of
boom and bust" in his tax-and-spend budgets. And his arrogance was
surely one reason that history and irony gave the UK a kicking before anywhere else when the
global financial crisis then followed in 2007-2012.
Government cannot "manage" economic activity or
direct "the free market" anymore than they can "manage"
other relationships between people. Mis-manage, yes. But drive efficiencies
in an open society? By taxing some and favouring others...and by getting
ever-more involved in choosing what grows, what dies, and who benefits?
Phelps' word "corrupted" is too nice. Simply
"corrupt" will do. And yet here we are, still electing
tax-and-spend parties who ape Russia, India and most of all Communist
ex-Communist China as their model of the corporatist state.
As for any Conservative voters now worried they voted Tory
but got Labour, a glance at the history books says
Osborne's ancient forebear...the first Baronet of Ballentaylor and
Ballylemon...repaid James I's divinely-right decision to sell him that title
by siding against the King's son (the even higher-taxing
spendthrift Charles I) and backing Cromwell during the English Civil War's
bloodshed in Ireland.
Really! Some pensioners and placemen have no gratitude.