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« More moral hazards: a reply to threeportdrift’s comment | Main | Learning lessons »

Thursday, 17 January 2008


Thanks for replying to my comment.

I think there may be a further moral hazard
involved in the NR bailout in that it was presented in part as an attempt to protect the interests of small investors and shareholders. Should all small investors in all kinds of businesses be protected in this way? There is
also the question of coercion.There is no moral case for taking money from one person to give to someone else. This is also the problem I have with state welfare. Of course, I'm not advocating a return to Victorian social conditions.I just think that the state is rubbish at actually alleviating suffering of any kind and that if people were allowed to keep more of their own money they would make much better decisions. A whole raft of friendly societies, mutual organisations and insurance companies, which existed before the welfare state would re-establish themselves. The present system really does involve an elite who believe they know what's best for ordinary people. They don't.

"My first criterion is that laws should not discriminate against any significant minority of the population. "

This sounds like an argument for the rule of law and more particularly, equality before the law. The latter is essential for an ordered society and respect for the law. At present we have the spurious concept of group rights which effectively make some groups more equal than others and which leads to envy and competition for privileges between groups. Henry Sumner Maine in "Popular Government" said such a process would be disastrous and take literally hundreds of years to correct.

"Swinging the emphasis in defining what laws are acceptable, from preventing harm to others towards which restraints are injurious, makes – to my mind – little difference."

In practical terms you're probably right, although you would be missing one or two opportunities to do some good.Making motor-cyclists wear crash helmets, for example is a good idea, easy and cheap to enforce.

Liberty is of course defined by the constraints placed upon it. Among them law, morality, religion, public opinion etc. They all involve coercion of some kind. Mill's conception of liberty effectively delegitimises most of this, leaving us with only the law. The law can't be everywhere and is singularly unsuited for the job it is being asked to do. We need to stop making laws and repeal most of what presently exists. As for research, this would have to be separated from the state and politics or the temptation to skew the results in one direction or the other would be too great for most politicians.

Thank you so much for your comments Peter. They have provoked me to think about the relationship between capitalism and poverty. Not in the way most people think about it, I hope. I am working up an article on the subject but it may be a while before it is ready because I need to give myself a bit of a break. I also wanted to post something about Benazir Bhutto's assassination which is coming out tomorrow. Thanks again.

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