Irish Liberty Forum

In these times of austerity, it’s good to know that taxes are still being spent on worthwhile projects – like arresting people for growing plants.

Much of the developed world is suffering a jobs crisis, and the experience for Ireland is worse than most. The Irish legal framework for the jobs market, beyond a basic minimum wage, has also had a complicated system of “Joint Labour Committees” which are capable of imposing additional wage requirements on particular sectors of the economy (affecting about 200,000 people). This system was found to be unconstitutional last summer. Replacement legislation is coming down the pipeline now, with the government promising to extend an employer’s right to plead “inability to pay“.

The current legislative proposals permit an employer – subject to certain conditions – to apply to the Labour Court for a derogation from the wage rates set in the sectoral wage agreement on the basis of inability to pay.

The derogation can be granted for between three months and two years – provided an employer has not been granted an exemption within the previous five years for the same workers.

The Labour Court must be satisfied that without the exemption, there would be a substantial risk to jobs or to the sustainability of the employer’s business.

The change is described by a government spokesman as “minor”. They don’t want to be seen to be undermining the wages of the low-paid, but the truth is that this system does no good at all for the people who need the most help, who are just below the bottom rung of the jobs ladder: those who are looking for work.

Involuntary “unemployment” would not exist in the free market; anyone who can work would be hired, if they would only lower their asking price. When market-clearing wage rates are illegal, however, unemployment is inevitable.

Thought experiment: Imagine that the price of a new car was set by government at an artifically high level, as a result of the government having been lobbied by manufacturers of some of the more expensive models. Imagine that you could only negotiate a lower price if you presented your case formally to a special government committee, who would decide whether or not you could afford it. Do you think that more or fewer new cars would be bought?

With thanks to Wicklowwolf over at Freedom Ireland.

Vincent Browne’s latest article created a bit of a stir online. The headline, “Technocratic, unelected governments are the ideal”, was always bound to attract attention. His core proposal is as follows:

If parliament was where policies were decided and a technocratic executive arm were directed to execute those policies and be held entirely accountable for doing that, then we might have democratic politics and accountable politics.

I would have thought that we already had a substantial technocracy in the form of the full-time employees of each government department: the ones who remain employed regardless of which government reaches power. It seems that this proposal would like to take things a step further so that the Ministers themselves, the chief executives of each department, were also unelected.

Voters would lose control over these appointments; they may be appointed in a similar fashion to the European Commission. Would this reduce corruption and improve accountability? Something tells me that it would not. Those who reached executive power would undoubtedly be friends and allies of politicians, except one stage further removed from voters. Wouldn’t we rather have the messiness of democracy than surrender to even greater bureacratic control? Even better, we could abandon the notion that government can produce a perfect society. Let’s discuss the alternative.

After spending some time at another location, we’ve decided to come back to WordPress. Subscribe to the feed for regular updates, or email us if you would like to contribute. Here’s to some great conversations!

As World War II raged, an amazing thing happened in Irish politics. According to Wikipedia’s entry for Seán T. O’Kelly:

O’Kelly was appointed Minister of Finance in 1939. He secured the passing of The Central Bank Act in 1942.[4] On 17 July 1942 at the fifth and final stage of the Dail debate on the “Central Banking Bill”, he argued that the owner of the credit issued by the Central Bank of Ireland, should be the private property of the joint stock banker and not the property of the people of Ireland. This debate was carried out when only five Deputies were present in the Dáil.

But how did the question of “credit” even arise? It arose thanks to James Dillon, TD for Donegal West, who made a remarkable contribution, including what follows:

“There are two methods of rebutting the contention that credit money here belongs to the Irish people. One is the method of denying its existence, and that, as I understand it, is the position of the Leader of the Opposition. The position taken up by the Leader of the Opposition and by those who think with him is that a banker lends the money of his depositors and shareholders and nothing else, and that, therefore, the public have no concern with the activities of a bank, other than their personal dealings with it.

I propose to submit to the House that, far from that being true, the day the banker gets established, the least of his business is the lending of his money or that of his depositors and shareholders, that that represents only one-tenth of his activities and that the remaining nine-tenths of his total activities consists in lending and dealing in a commodity called credit money which he creates on the strength of the fact that he is functioning in a community consisting of law-abiding men who maintain, by their several individual exertions, a stable community.

This conception is so revolutionary to many persons who have never given any study to banking that a large number of people, without examining the evidence, simply throw their hands in the air and say that it could not be true; but the astonishing fact is that it is true, and, by the mercy of Providence, these facts were made manifest and placed forever on record in the evidence of the Committee on Finance and Industry which sat under the chairmanship of Lord MacMillan in 1931, and the minutes of whose evidence have been reported.”

Everybody should know that Nobel prize winner and archetypal mainstream Keynesian economist Paul Krugman was demanding a housing bubble in 2001 and 2002.

To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

The little problem that the economics profession won’t face up to yet is that Keynesianism has been dead wrong from its very conception. The urgent task for everybody else is to stop these people from inflicting their policies on us for any longer.

We’ve got new central bank figures:

Monthly statistics from the Central Bank show the first net fall in mortgage lending since 1990. The figures also show a sharp fall off in credit card spending…

It is the first time that repayments on existing mortgages has been greater that new mortgage lending since the Central Bank began this monthly statistics series in 1990. The figures show that, overall, mortgage lending fell by over €100m last month.

Contrary to what most people think, deflation is a good thing. Under a free market monetary system, this imaginary digital “credit” would never have been brought into existence in the first place. As loans are paid in faster than they are being created, with the most speculative loans already in a state of default and evaporating from the system entirely, the money supply more closely reflects that which would prevail in a deregulated, decentralised system (however a pale imitiation it might be).

What’s been lacking from the debate on the proposed Irish blasphemy law is any framing of the discussion in its proper context: property rights. Once we do this, the correct criticism of the law becomes clear.

We begin by noting that all communication has a physical form, a form which is always the property of some agent. Read the rest of this entry »

It’s a sign of the times that every public debt offering in Europe has become a “risk event”, with the Irish government among the most vulnerable to what would be a catastrophic collapse in demand. And no longer empowered to produce its own counterfeit money, it is ultimately reliant on the ECB to remain solvent.

The Sunday Independent reports that the ECB has finally started to play ball, providing the funds to ensure that no Irish government bond is left unbought:

Irish banks are using billions of euro from the European Central Bank (ECB) to buy up Irish government debt, the Sunday Independent can reveal.

It has emerged that the banks were “active” in a recent Irish government bond sale of about €1bn, and it was confirmed yesterday the repossession of Irish bonds at the ECB has occurred.

Irish banks are using ECB funds to “create the illusion” of demand on the international markets.

Incidentally, how reassuring that the same governments who collude in this type of activity are fighting the good fight against market abuse by private participants, defined previously here:

Market abuse may arise in circumstances where investors have been unreasonably disadvantaged, directly or indirectly, by others who:

* have used information which is not publicly available (insider dealing);
* have distorted the price-setting mechanism of financial instruments;
* have disseminated false or misleading information.

Of course, the governments themselves would never do anything like that.