It appears your editor owes an apology to Lord Monckton of Brenchley following last Friday’s Money Morning.
As you know, we’re more than happy to admit when we get something wrong, and on this occasion we have. What did we stuff up? Well, for that you’ll have to wait until tomorrow.
Until then…
Your editor laughed heartily this morning on reading the following paragraph from News Ltd:
“ASIA-Pacific powers, including the United States and China, have vowed to overhaul the crisis-stricken world economy, rejecting protectionism and touting plans for a gargantuan free market.”
Our laughter only increased further when we reached the following paragraph:
“Leaders of the Asia-Pacific Economic Cooperation (APEC) forum, who together steer more than half the global economy, have also said they will maintain hefty stimulus spending ‘until a durable economic recovery has clearly taken hold’.”
We wonder if these journalists ever actually read what they’ve written. If we’ve got this right, governments have “plans” for a “gargantuan” free market that will be supported by “hefty” government stimulus spending.
How on earth can that be described as a free market?
It can’t.
In fact their comments are no different to any other comment you’ve heard from politicians over the last twenty, thirty or fifty years.
They all claim they support free markets while simultaneously introducing more and more rules and regulations to ensure markets are under more government control than ever before.
For a start you can’t “plan” any free market let alone a gargantuan free market.
Free markets aren’t planned they just, well, they just are.
And that’s why politicians hate the free market. A free market works without interference and meddling from governments.
In a free market there would be no need for a bunch of megalomaniacal pen pushers (politicians and bureaucrats) to swan off to Singapore for meetings on how to plan a free market.
There would be no need because under a free market they would have no influence on markets. Their meetings would be redundant. There would be nothing to discuss.
In fact, dare we say it, they would be redundant.
But central planners can rest at ease. And free marketers like your editor and cry into their beer.
Because there will be no gargantuan free market. Instead there will be the same old gargantuan state interference, corruption and incompetence. If you skip past the waffle about free trade in Leaders’ Declaration:
“But our common goal remains the same – to support growth and prosperity in the Asia-Pacific region, through free and open trade and investment…”
You’ll see that encouraging free markets and free trade is the last thing on their mind:
“We will leverage APEC’s traditional strengths of voluntary cooperation, capacity building, sharing of best practices, and working with the private sector, to implement necessary reforms in infrastructure development, agriculture/food management, social security, education and workforce training, and regulatory frameworks. We will work with the International Financial Institutions and Multilateral Development Banks to facilitate these efforts. Given APEC’s diversity, these reforms must take into account individual economies’ stage of development, demographic trends, factor and institutional endowments, and comparative advantages.”
A free market isn’t a free market when you have government telling you they will become even more involved in an economy.
It just isn’t possible.
And as for the statement that:
“We firmly reject all forms of protectionism and reaffirm our commitment to keep markets open and refrain from raising new barriers to investment or to trade in goods and services…”
Well, we don’t think we’ve come across a bigger lie since the Australian banks claimed they hadn’t received a single dollar of bail out money.
You only have to compare that statement with the previous one I’ve quoted above. On the one hand they claim to reject protectionism, and on the other hand they claim they’ll support reforms in infrastructure development, agriculture/food, social security, education and regulations.
And you can bet the “reforms” won’t involve less red tape and regulation it will mean more red tape and regulation.
When you look at each one of those topics again you’ll realize each one is the antithesis of free markets.
A free market in infrastructure development? I wouldn’t have thought so. When was the last time any infrastructure project happened on the basis of free market competition or supply and demand? Never.
Agriculture and food is one of the most manipulated and corrupt markets there is. Domestic producers receive numerous ‘free-kicks’ thanks to import regulations, or because of state approved monopolies.
Social security. A free market in social security? Are you kidding me? Social security is one of the biggest drains on the taxpayer wallet. Billions of dollars is stolen from taxpayers each year, swilled around in Canberra and then redistributed to the politicians favourite causes.
We’d love to see a free market in social welfare, but we know it ain’t gonna happen.
And as for education, again, where is the free market there? Nowhere. State schools get complete government funding and even private schools get handouts. How is that a free market when every school gets cash regardless of performance?
It’s clear the politicians either have no idea what free markets are, or more likely, they know exactly what a free market is and are afraid of it.
Because in a truly free market their powers to influence, bribe, threaten and meddle disappear. That’s why they need to maintain as much control over the economy as possible.
But the outcome of the APEC summit makes us realize one thing. It makes all the talk from Lord Monckton of Brenchley about a ‘world government’ all the more plausible.
Have we turned all conspiracy theorist? No. But as I mentioned at the beginning, we’ll have more on that tomorrow.
Cheers.
Kris.
60-Second Market Round Up
by Kris Sayce
Shae has taken a long weekend, which included dressing up as an Oompa-Loompa. We believe it was for a fancy dress party but that is yet to be confirmed!
So we’ll step into the breach for today until she returns tomorrow.
The S&P/ASX200 closed at 4,706.40 down by 41 points.
The Dow Jones Industrial Average closed at 10,270.47, a 73 point gain. In Europe the FTSE finished higher by 19 points to 5,296.38.
The Nikkei was down 34 points to 9,770.31.
In Australian dollars gold is trading at $1,198.79, while in US Dollars it is trading at $1,118.90. And the price of silver in Aussie dollars is $18.68 and in US Dollars it is $17.43.
The Aussie dollar against the US dollar, currently trading at USD $0.9340. The Aussie dollar against the Japanese Yen is trading at JPY 83.60.
Crude oil closed at USD$76.35.
For the biggest movers on the market yesterday click here…
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Al Capone had a vision for the free market with minimal government intervention.
soo are countries without social
(& u have to work with a pig of a boss every day)
welfare better off??
i dont think so
Polarizing Kris’s arguments won’t change the truth in his words. Surely all of us want more for the roughly 30% commission we hand over to the government. The civil service is self governing despite the overtones and are by nature box tickers and pillow fluffers. Forge your stats at intervals and hang around for retirement with little interruption. New world order? And the new world currency will be human misery. We don’t have to be seen to be making progress to progress do we? Global warming has become global conforming as taking any alternative view whether personal or learned is considered to be politically incorrect. Long live democracy and freedom of speech. There is no greater danger than the perception of knowledge.
Al Capone was a creation of government regulation – interference in the free market. No-one can set up a profitable crime organisation selling alcohol any more – why not? – alcohol prohibition is gone.
Been on holudays the last two weeks and have spent a fair part of yesterday and today catching up on the last two weeks of your editorials I guess you call ‘em.
Read through your missive today Kris and it was very interesting and I am not sure that I am ready to put you into the nut house just yet. Suits my conspiracy theory style and my thoughts in regard to KRudd’s leadership aspirations (and it is not to lead this country) quite nicely thank you very much.
And here is where I drop the hammer on you.
You also argue very nicely why there should never be free markets and can not be although you do not mean to so thanks!
You point out, correctly, the politicians all want power and are therfore self serving despite their lip service to serving the country. But this also applies to most human beings. If there is a sniff of power to be had they want it! (I have worked with owners corps and parent committees. Weirdly they are the stuff that the novel Power without Glory was actually based on :p)
Essentially what you argue, and I believe correctly, is that people are self interested and I say this applies to all things not just power. It applies equally if not more to money. Which in turn applies to the processes in accumulating money and this means that people will stretch ethics and laws to obtain it. If there were no rules and thus a free market then people in powerful positions would exercise that power to their own benefit and not to the benefit of the community.
That is why we have to have things like government provided education and minimum wages because even if it is more expensive then it would be if they were privately run or a free market because, quite frankly, business has no interest in educating anybody unless it is to train them to do the work that they require or paying them a fair wage (more wages means less profit for that business).
Free markets can only work if humans are ethical and I afraid to say old friend that humans are not. Most if not all will do things for their own benefit and will even break laws and ethical boundaries if they feel that they can get away with it.
As you say, its just logic.
Correction Kris a free market works DESPITE ‘interference and meddling from governments’ – where you, I, and some of your correspondents differ is where the line is drawn between a ‘completely free market’ ( not possible, or desirable, in this day and age) and a planned economy such as exists in totalitarian countries, you know the ones, where people can be executed for ‘economic crimes’. If the Copenhagen Treaty is signed in its’ present from the world moves much closer to totalitarianism government from the fascist left.
Maybe it is time to discuss the purpose and benefits of Government as well as the limits that should be applied to Government?
Without basic assumptions clearly defined in common, people often discuss at cross purposes without even knowing they are doing so.
As for the issue of climate change it seem strange that there is not a website that outlines (1) the evidence including the answers to the various criticism of the evidence and (2) the evidentiary holes where available evidence is poor (e.g., lack of data, data with poor scientific standards, etc). Like so many issues today it seems that either someone with power decrees (without providing evidence or with little provided evidence) or alternately someone in power decrees (with evidence that is stagnent in that criticism of the evidence is not widely communicated nor rationally refuted in a dynamic process of truth finding). NOTE; the power decree is in common.
Surely the greater the supposed importance of an issue the more necessary it is that a dynamic process of truth finding be actively employed while any rational doubt remains. Without this we are left merely with the exercise of power in one form or another.
Try to imagine the bad taste left for those believing they live in a democracy who, often long after power decrees, are asked to vote to supposedly influence government direction in a voting context of either no good evidence or stagnent evidence that refuses to refute criticisms.
Also try to imagine the even worse taste left for those who despite the marketing telling them they live in a democracy, do not believe it.
Using Kevin B’s logic that a free market can’t work because the human beings running it aren’t intrinsically ethically assumes that those same human beings magically become upholders of ethical standards when they become politicians and bureaucrats and promise to come up with laws and policies which are administered equitably as a genuine service to assist the greater public good? Most politicians exist for purely ego driven pursuits (they just want to do their bit for their constituents/country and are certain they have the unique talents to do so – what hubris!) The Sir Humphrey Appleby class of public sector employee – the unelected lever pullers earning more than their hapless MP’s – are there simply for their own career benefit. The same may be said for free market enterprises but as Paul Keating once noted, you can always back self interest because at least you will know it will be trying it’s hardest.
The comparison with the EU was interesting. Perhaps, the same parallels might be drawn with the UN (the original treaty), the IMF, and the World Bank – all funded by national governments (the taxpayer).
I have become increasingly skeptical of the AGW synthesis of information. In the 1980′s, I was fully on board the AGW train, but no more. Increasingly, the forecast estimates of temperature and sea levels of that era continue to diverge from scientific observation, but there seems to be an unwillingness (particularly at the political level) to relent in pursuing control of CO2 emissions. Perhaps governments see this as the next big bubble that can be blown, to substitute for financial derivatives, with a nice slice for government in “transaction fees”. Of course any discussion on climate change is not complete without passing reference to Kevin Rudd’s childish rant at the Lowy Institute a couple of Fridays ago. That speech was a broad brush attack on anyone who questions the climate change conventions. The name-calling and sheer vitriol of this outburst has merely served to confirm my suspicions that there are other drivers for this political push for CC ascendancy. I am not sure whether Rudd’s outburst was driven by political pressure, or simply because he is prepared to burn a fair bit of political capital on this issue. I am sure his comments have been globally noted by now, and of course APEC reached no commitment on carbon emissions. Lick that egg of your face Kevin.
Why are you folks always blaming the bureaucrats and politicians. They are just porns in the bigger game. If you really listen to what they say you soon discover they have no idea about what is really going on. Then you have to ask: “Who is really running the Show?” The anwer can be found on the second Tuesday of every month with the two ball canes.
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