Saturday, January 12, 2008
Oi, Peston, no!
Sorry, this one's going to be a fully-grown rant. Just read the executive summary and leave me to fulminate, vituperate and excoriate in peace. : )Executive summaryRobert Peston is a class A berk. The Chancellor and Prime Minister seem little better. They're all squabbling over a business which is headed for the hot place in a home-built wheeled contraption. And in the middle, the only people with real ownership rights over the company are being over-ridden roughshod, as if the company is no longer theirs to run. Oh, Vince Cable was stupid, too.Full rantIs it just me, or does the BBC, and particularly Robert Peston the business editor, seem to be attempting to stoke the fires of nationalisation under the feet of Northern Rock? The fervour behind his latest blogpost is so thinly-disguised he'd get nicked for exposure if he left the house. Shareholders are, apparently, "recalcitrant" because they want to decide how the company administers its own assets. The cheek of it!For the benefit of Robert Peston's continuing education, the shareholders of Northern Rock are what we call its owners. This means that, absent actual criminality, they should be blinking well left alone to decide what happens to their company in peace. To teach this lesson, I propose that Mr Peston's current abode be "nationalised temporarily" to stabilise his home situation, and then sold off to the highest bidder. So, Peston, buzz off and quit calling for state interference. Remember Iraq? Not a model of state interference, is it?Yes, I will grant that the Treasury has a right, as a creditor, to ask for its money back; but that does not extend to nationalisation. When did you ever hear of a creditor acquiring a debtor company because it couldn't pay its debts? And, more to the point, when did you ever hear of the acquiring creditor doing so to the detriment of all other creditors, unilaterally writing off or down all their debts? It's not lawful.Northern Rock is publicly-held property, and the Government has no right to appropriate it in order to solve its own cock-up. Any nationalisation would be simple theft, depriving shareholders of their natural property rights. We will have watched Stalin come round full circle. And of course, Stalin will revert to Mr Bean and the whole thing will be an absolute fiasco.Thinking of the source of that gibe, Cable was a prize ass to suggest nationalisation. He was a co-author of The Orange Book, one of the Lib Dems' better publications, in favour of free societies, free markets and free minds. What went wrong?Full disclosure: I'm not an idiot, I don't hold shares in Northern Rock. As you can tell, I believe, very simply and very strongly, that the Government is confusing its privileges as government with its legal rights as creditors, and it's being egged on by sections of the Fourth Estate which I thought knew better than to trust politicians. And as long as the Emperor believes he has clothes, we have a problem.
Subscribe to:
Post Comments (Atom)
4 comments:
I think nationalising Northern Rock would be a pretty dire idea (and it seems unlikely to happen now), but I'm not sure where you get the idea of "natural property rights" from. (Certainly not from the Bible - that year of jubilee was a blinking imposition, an interference in the natural property rights of free-born Israelites.)
You don't have to be a Marxist to appreciate ol' Karl's point that the nature of property rights is not fixed, but is heavily influenced (Karl would say "determined") by the social and economic structures of a particular society at a particular time. Modern capitalist property rights are very different from feudal property rights, for example.
And in particular, the joint stock company has to count as one of the most artificial constructions in human economic history. There is nothing "natural" about a PLC: it is entirely a human construct, and a creature of the modern state. To say that PLCs should be immune from state interference is missing the point: PLCs (and other limited companies) are state interference. Not least, they interfere with the "natural" rights of creditors to nail the "owners" of a bankrupt company to the wall. That was their intended purpose from the start.
And you don't need to read Marx to get a healthy dose of correction on the "natural property rights" of PLC shareholders: Milton Friedman would be as good a place as any to start.
"Natural property rights"! Nurse, the screens! :-)
Way-ull, Ah gits mah economics from da You-Ess Constitushun. ; )
Yeah, perhaps "natural" was the wrong word to use; as I said, this was a full-on rant, not a considered piece of FT editorial. : )
But there are, I think, important distinctions between divinely-ordained law administered by man and the plans for nationalising the Rock, as far as they got. I dunno, perhaps this is overly-simple, but if I own something for which someone will pay me money, and someone else takes it by force majeure for nothing, that's theft. It doesn't stop being theft because it's the government doing it.
I take your point about limited liability (and would sooner see it disappear along with credit), but it's rank hypocrisy for the government to decide that it will stop creditors from nailing a company to the wall unless the government itself is the creditor. The government should never have got into the situation of being a creditor of the Rock's in the first place.
You may enjoy today's Steve Bell cartoon from the Guardian. Seems to sum up the situation on so many levels...
Ha! Yeah, that about sums it up.
The thing that really baffles me is why I'm so exercised about this. It's not like I'm a taxpayer, or indeed have any direct interest in the Rock's survival or otherwise.
Post a Comment