This is a very relevant and apposite peice. It's not the whole story. The UK also needs to decentralise it's moribund Governance Structure and strengthen the capabilities of and widening the remit of local government especially in the areas falling behind in the UK However that doesn't detract from the urgency of doing what Robert is suggesting here. The UK really needs this. Peter
Unfortunately, I have several disagreements with the underlying problems faced by the UK. We keep hearing we were once a successful capitalist nation; when in point of fact, we were once a very successful free enterprise nation, where much of the prosperity was embedded into each local community, through the simple process of local savings being re-invested back into new local enterprise; i.e. millions of very small businesses. particularly, NOT in any way connected with, and thus under the control, of ANY bank. At that time, bank lending and associated services were always a market place for larger, growing towards acceptance by the nations Financial Institutions.
Again, then, our financial institutions were very well staffed by individuals who were absolutely committed to the concept of their integrity towards the needs of their nation. No up and coming business could have their shares listed on the national stock exchange without meeting VERY specific attributes; long term stability; year after year of delivering reliable returns to their initial, (local community), investors. That in turn also created an underlying foundation of individuals within each local town, as brokers for the delivery of the needs of the growing business; where today, that function has, effectively disappeared.
People seem to fail to realise that when the London Stock Market was founded; the entire nation had people acting as brokers for service to the owners of businesses; many being VERY simple cash businesses; that had a tradition going back centuries. These were always simple free enterprise, often only involving a single furlong of land growing crops for their local communities. Indeed that was the how and why the UK developed Market towns, where all the local community needs were freely available on a direct cash basis. Perhaps the President of Argentina and the Prime Minister of the UK should read; The Road Ahead from a Grass Roots Perspective, and learn that so called Capitalism is a major part of their underlying economic problems.
As for big state enterprises; ALL of then must be shut down. Period!
Had been in a hurry when I closed my original comment, (voluntary responsibility to a 98yr old lady in my local community), so now I have to describe in much greater detail, my final comment above.
Bankruptcy? Yes, why? It is an ancient commonly understood concept, that to succeed, you have to have first experienced failure, as that teaches how to avoid such in any future enterprise. Again why? This opens us into a very stark difference between two forms of business, (employing to create success). In the first case, someone has an idea, and sets out to create a small start up business to provide a product or service, raises, one way or another, sufficient funding to allow them to set out to try and succeed; which is, as I see it, an example of free enterprise in any small local community. On the other hand, a department of a government has the self same thought process, I think I can do this or that, and to enable ability to proceed, I need to seek funding, so they turn to their government, and raise what they believe is necessary to again, succeed with their project.
Both seem to fit within exactly the same framework; raise funds and set out to succeed. As I understand this debate; that is a totally inaccurate "same framework" description. On the first hand, unless they succeed within their original timing, to create sufficient income from their proposed form of trade, to pay their ongoing costs, they run out of money and become bankrupt. They are forced by the rules of bankruptcy to accept their failure. Again, another fact, being made bankrupt ends their involvement.
Now turn to the example of a department of government. They describe what they wish to do, and the sums of money required to achieve their aims. However, having set out their stall, so to speak, now they are facing the timescale for their proposal is beyond their original description and thus the funding they originally requested is about to run out; and; technically, exactly as the first example, they are about to become technically bankrupt. Except that is not how failure operates in government department operations - is it? Now they need more time and more funding.
So what is the primary purpose of bankruptcy? Bankruptcy demonstrates failure, which then; automatically; forces an acceptance of the failure of the underlying principles upon which the original funding was based. The ownership of the thought process of the origins of what was proposed is forced to change.
If we take the concept of bankruptcy into a government department proposal that has run out of money and needs more time; that would require acceptance that the entire proposal has to be brought to a swift end; including the removal of the original leadership, who are now discredited.
Instead what happens is their proposal carries on, with all required additional funding being found from somewhere, and the original leadership remains in their posts.
Am I correct to surmise that that is the underlying mechanism that drove the excessive borrowing by the Argentina goverment, and as also here in the Uk? With here in the UK an excellent example being HS2? Our railway history demonstrated that we once built up to 1,000 miles of railway in a single year using simple labour laying ballast and lines and simple bricklayers to built the many bridges needed. That if any single part of that original enterprise had made inaccurate assumptions, they would have been made bankrupt , and new leadership would have been needed to keep the overall aiming point achievable.
It is my belief that one side of this debate describes classic free enterprise; while the other describes classic feudalism, where failure is never accepted, and the price has to be regularly increased and paid for by the people from taxation; and where taxation is insufficient to pay the price; the money has to be borrowed from external banking markets; and as such, inevitably, taxation has to be increased to now not just pay for the costs of the failed project, but of the borrowing from the markets.
If all of that is true, then, surely, the correct solution is to force the rules of bankruptcy onto the individuals leading failed government department projects? That unless we do that, the excessive borrowing will never stop, and the individuals within the government departments will do everything they can; including creating state secret police services to silence any private individual criticism of their intellectual and financial bankruptcy.
One side remains free enterprise accepting rules that always lead to financial success; the other leads to classic feudalism, where the leadership never face failure; always expect their proposals to be fully funded; regardless of the long term consequences to their wider nation's citizens; or to put it in recent context; who do we tax to pay the our bills?
The proper response to the likes of a government department inspired HS2 proposal is to immediately send it into bankruptcy and the leadership, (NO, not the wider nation, the project leadership), having to bear the full costs of their failure, as is normally imposed upon the free enterprise economy; where occasional bankruptcy ensures successful enterprises learned from their, and others; prior mistakes.
This is a very relevant and apposite peice. It's not the whole story. The UK also needs to decentralise it's moribund Governance Structure and strengthen the capabilities of and widening the remit of local government especially in the areas falling behind in the UK However that doesn't detract from the urgency of doing what Robert is suggesting here. The UK really needs this. Peter
Unfortunately, I have several disagreements with the underlying problems faced by the UK. We keep hearing we were once a successful capitalist nation; when in point of fact, we were once a very successful free enterprise nation, where much of the prosperity was embedded into each local community, through the simple process of local savings being re-invested back into new local enterprise; i.e. millions of very small businesses. particularly, NOT in any way connected with, and thus under the control, of ANY bank. At that time, bank lending and associated services were always a market place for larger, growing towards acceptance by the nations Financial Institutions.
Again, then, our financial institutions were very well staffed by individuals who were absolutely committed to the concept of their integrity towards the needs of their nation. No up and coming business could have their shares listed on the national stock exchange without meeting VERY specific attributes; long term stability; year after year of delivering reliable returns to their initial, (local community), investors. That in turn also created an underlying foundation of individuals within each local town, as brokers for the delivery of the needs of the growing business; where today, that function has, effectively disappeared.
People seem to fail to realise that when the London Stock Market was founded; the entire nation had people acting as brokers for service to the owners of businesses; many being VERY simple cash businesses; that had a tradition going back centuries. These were always simple free enterprise, often only involving a single furlong of land growing crops for their local communities. Indeed that was the how and why the UK developed Market towns, where all the local community needs were freely available on a direct cash basis. Perhaps the President of Argentina and the Prime Minister of the UK should read; The Road Ahead from a Grass Roots Perspective, and learn that so called Capitalism is a major part of their underlying economic problems.
As for big state enterprises; ALL of then must be shut down. Period!
Had been in a hurry when I closed my original comment, (voluntary responsibility to a 98yr old lady in my local community), so now I have to describe in much greater detail, my final comment above.
Bankruptcy? Yes, why? It is an ancient commonly understood concept, that to succeed, you have to have first experienced failure, as that teaches how to avoid such in any future enterprise. Again why? This opens us into a very stark difference between two forms of business, (employing to create success). In the first case, someone has an idea, and sets out to create a small start up business to provide a product or service, raises, one way or another, sufficient funding to allow them to set out to try and succeed; which is, as I see it, an example of free enterprise in any small local community. On the other hand, a department of a government has the self same thought process, I think I can do this or that, and to enable ability to proceed, I need to seek funding, so they turn to their government, and raise what they believe is necessary to again, succeed with their project.
Both seem to fit within exactly the same framework; raise funds and set out to succeed. As I understand this debate; that is a totally inaccurate "same framework" description. On the first hand, unless they succeed within their original timing, to create sufficient income from their proposed form of trade, to pay their ongoing costs, they run out of money and become bankrupt. They are forced by the rules of bankruptcy to accept their failure. Again, another fact, being made bankrupt ends their involvement.
Now turn to the example of a department of government. They describe what they wish to do, and the sums of money required to achieve their aims. However, having set out their stall, so to speak, now they are facing the timescale for their proposal is beyond their original description and thus the funding they originally requested is about to run out; and; technically, exactly as the first example, they are about to become technically bankrupt. Except that is not how failure operates in government department operations - is it? Now they need more time and more funding.
So what is the primary purpose of bankruptcy? Bankruptcy demonstrates failure, which then; automatically; forces an acceptance of the failure of the underlying principles upon which the original funding was based. The ownership of the thought process of the origins of what was proposed is forced to change.
If we take the concept of bankruptcy into a government department proposal that has run out of money and needs more time; that would require acceptance that the entire proposal has to be brought to a swift end; including the removal of the original leadership, who are now discredited.
Instead what happens is their proposal carries on, with all required additional funding being found from somewhere, and the original leadership remains in their posts.
Am I correct to surmise that that is the underlying mechanism that drove the excessive borrowing by the Argentina goverment, and as also here in the Uk? With here in the UK an excellent example being HS2? Our railway history demonstrated that we once built up to 1,000 miles of railway in a single year using simple labour laying ballast and lines and simple bricklayers to built the many bridges needed. That if any single part of that original enterprise had made inaccurate assumptions, they would have been made bankrupt , and new leadership would have been needed to keep the overall aiming point achievable.
It is my belief that one side of this debate describes classic free enterprise; while the other describes classic feudalism, where failure is never accepted, and the price has to be regularly increased and paid for by the people from taxation; and where taxation is insufficient to pay the price; the money has to be borrowed from external banking markets; and as such, inevitably, taxation has to be increased to now not just pay for the costs of the failed project, but of the borrowing from the markets.
If all of that is true, then, surely, the correct solution is to force the rules of bankruptcy onto the individuals leading failed government department projects? That unless we do that, the excessive borrowing will never stop, and the individuals within the government departments will do everything they can; including creating state secret police services to silence any private individual criticism of their intellectual and financial bankruptcy.
One side remains free enterprise accepting rules that always lead to financial success; the other leads to classic feudalism, where the leadership never face failure; always expect their proposals to be fully funded; regardless of the long term consequences to their wider nation's citizens; or to put it in recent context; who do we tax to pay the our bills?
The proper response to the likes of a government department inspired HS2 proposal is to immediately send it into bankruptcy and the leadership, (NO, not the wider nation, the project leadership), having to bear the full costs of their failure, as is normally imposed upon the free enterprise economy; where occasional bankruptcy ensures successful enterprises learned from their, and others; prior mistakes.
I rest my case.