Tuesday, 29 April 2014

SumoKing's Libertarian Corner

That the conservative opposition to too much government control is not a matter of principle but is concerned with the particular aims of government is clearly shown in the economic sphere. 

Conservatives usually oppose collectivist and directivist measures in the industrial field, and here the liberals will often find allies in them. But at the same time conservatives are usually protectionists and have frequently supported socialist measures in agriculture. Indeed, though the restrictions which exist today in industry and commerce are mainly the result of socialist views, the equally important restrictions in agriculture were usually introduced by conservatives at an even earlier date.

Friedrich Hayek: Why I Am Not a Conservative

15 comments:

Lola said...

Yeah. Great that isn't it. One of my favourites.

Mark Wadsworth said...

Yes agreed, it's Blue Socialists vs Red Socialists.

The Stigler said...

There are two establishment forces: Conservatives and Socialists. Conservatives believe in protecting wealth of existing capital, Socialists believe in protecting wealth of existing labour.

The thing with Thatcher and Major is that they were more liberals than conservative, and ever since, people have said things like "Cameron isn't a Conservative" when, actually, he is. He's exactly what a Conservative is. It's just that Thatcher and Major weren't.

Mark Wadsworth said...

TS, Major was a decent sort of bloke who happened to do the right thing at the right time.

Thatcher had no discernible principles or policies, economic or social, apart from getting re-elected.

Lola said...

TS / MW - See 'the Nolan Chart'.

Lola said...

MW - I quite liked Mrs T - but there again I do like strong women...there's something about female authority figures....(I think I will stop there).

The Stigler said...

Lola/MW,

Thatcher was certainly a visionary politician, and while I broadly agree with some things she did, some policies (e.g. selling off council housing, greater centralisation of power) were not good.

Graeme said...

Mark - for all her many faults, Thatcher did actually have (in Howe and Lawson) the only Chancellors in my memory who actually reduced taxes and tried to simplify the tax code.

paulc156 said...

Yeh seem to remember Lawson as the home owners best friend. 30% price rise in 1988 alone.

Mark Wadsworth said...

G, that's true. I never said she/they were all bad, just completely inconsistent.

Paul, exactly not:

"[Double MIRAS] remained in place until the 1988 Budget, when Nigel Lawson ended the option to pool allowances from August 1988. Lawson later publicly expressed regret at not having implemented the change with effect from the time of the budget, as it is generally accepted that the rush to beat the deadline fuelled a sharp increase in house prices."

He could have avoided the rush, but prices certainly fell (partly) as a result of that.

A bubble was due to end in 1989 anyway, but nonetheless, Lawson did his bit.

And he also recently admitted that ending Dom Rates was a pure Homey bung devoid of any merit, it was purely political.

paulc156 said...

Mark. Well what was the context for ending 'double' MIRAS: Sustained house price rises for the previous 6 years. A policy of keeping interest rates low through the period as he adopted a policy of shadowing the DM. Eventually it cost him his job. [he forgot to tell his PM what he was doing]by which time house prices had taken off then came crashing down as interest rates were belatedly raised-only after Lawson had vacated.

Mark Wadsworth said...

P, as per usual, we've have got completely off the topic of Hayek (who said that LVT was a great idea, as long as the practicalities of valuations can be ironed out).

Suffice to say, land prices/credit bubbles go in 18-year cycles. Short of LVT, Chancellors can only tinker at the edges. They would have boomed and busted in the 1980s whatever they did.

paulc156 said...

Mark. Not disputing the merits of LVT but an '18' year set in stone cycle? An easy credit policy that Lawson supported through his tenure long after fundamentals had ceased to call for it, 'only' because he thought UK had eradicated supply side constraints and he wished to shadow the German currency meant cheap mortgages. You can't take 'credit' out of the equation regardless of 'the cycle'.

Mark Wadsworth said...

PC, the land price cycle and credit cycle are the same thing.

And yes, the 18 cycle appears to be set in stone, this was observed over a century ago.

New Labour were the first to recognise this and milk it for electoral advantage.

paulc156 said...

Trouble with cycles is there are dozens of them. Kondratiev, Schumpeter, Juglar et al had cycles named after them and there's another 18 year cycle out there somewhere, the name escapes me. In any case, if the 'land price/credit cycle' was in an upswing during the 80's it was yet another reason to curtail credit rather than ease it as Lawson did. He was not integral to the cycle after all.