Equilibrium: the Watchword of the True Libertarian. UKIP’s future.
Equilibrium in Economics
A principle of economics is that, for an economy to prosper, it needs to achieve a state of equilibrium.
What that means, in practice, is that the economy takes on a life of its own which is self-sustaining. Demand equals supply. If any part of the economy takes an inappropriate cut of the cake then equilibrium ceases to apply and instability rules.
When that occurs wide swings between the various competing elements in the economy occur until, gradually, the economy moves back towards equilibrium. On the way it is likely great hardship can be caused and this generally is inflicted on the weakest and most vulnerable. This has been the history of the UK since the beginning of the nineteenth century.
Equilibrium in Society
Society is the same. Where the rights of some are undermined by the demands of others then society becomes unstable. Those who advocate Libertarianism have to be aware that unfettered rights for themselves have the effect of creating this instability and potentially to cause a complete breakdown of law and order. A breakdown of the economy’s equilibrium can equally cause the same result.
What this means is that any aspiring “libertarian” has to consider carefully the limits and to identify boundaries that must be observed. For example most of us agree it is wrong to take a life and laws must exist to prevent that.
Some people, paradoxically, argue that the State must be entitled to take a life. That is hardly a libertarian stance. It is an authoritarian one. Murder is murder, whether by an individual or the State.
When it comes to the mundane everyday matters of competing elements I would suggest we consider the relationship between employers and employees. This is the area where the economy and society frequently drift out of equilibrium and for the most part this is, I believe, due to a fundamental lack of understanding of the need for equilibrium.
No-one should be expected to toil for less than an economic wage. To make employees the first target of any cost cutting is theft. If an employer is not able to meet its obligation to pay its hired hands then that employer should recognise they are asking their employees to make sacrifices so that they, the employers, can profit. In other words they are asking their employees to invest in their business.
If the employees invest in the business then they are entitled to a return on that investment. If an employer needs employees to invest then that should be by consent and on agreed terms. Providing shares in lieu of wages would, it seems to me, be a way out of the impasse that can occur. However, if the minimum wage cannot be afforded, then the employer has to recognise the business is not viable.
How Not to Manage a Company or Country
When I heard John Rees-Evans expound his method for suppressing the legitimate earnings of his employees in Africa I was appalled. He chose, he said, to import cheap labour to undercut his employees and to starve them into submission.
BREXIT: To Free Us from Undercutting Labour
That is the issue at stake in BREXIT. We have been subjected to a persistent and prolonged attempt to undermine the income levels and living standards of the British people by the import of cheap labour from elsewhere.
To elect a leader that condones such inappropriate methods would, to me, be a contradiction UKIP could not live with. How could we trust a leader who has practised the very worst aspects of the EU rule in his own businesses? When it comes to electing a leader then actions speak louder than words.
Every Unfettered “ISM” fails.
Just as pure unregulated capitalism or socialism are bound to fail: Libertarianism, like any other “ism”, will fail if unfettered. The purpose of the debate in UKIP needs to be focussed on a pragmatic analysis of where the limits and boundaries lie.
Trades Unions are given a bad press. My experience in a number of industries and the public sector is that without them most enterprises would collapse. They offer a channel of communication between employer and employee.
Yes indeed they can be corrupted, like any other component in society. Like every other part of society there need to be rules under which they operate. UKIP needs, though, to understand the necessity for collective bargaining as an alternative to chaos. That is particularly true in the public sector but also for those employed by multi-national companies which seem entirely unaccountable to their shareholders, the public or government.
A Society and Economy Seriously out of Equilibrium
At present both society and the economy are seriously out of equilibrium. The majority of the population have suffered repeated cuts to the real value of their incomes for 17 years or more. There is regular unrest, riots, protests and worse. At the same time the profits of massive multi-national companies have rocketed. There is no evidence to suggest those companies are using much or any of those profits to reinvest and so that money is “dead” money.
The UK economy is no longer a feudal one. It is an economy of balanced and mutually dependent interests. The employee is the consumer who buys the goods that pay the profits and keep the employer in business who employs the employee who is the consumer… etc. It is a virtuous circle. If anyone in the circle takes more than their share then it will cease to function.
The Evidence of the Breakdown
The evidence of how this breakdown has happened is all around you. Pubs and night clubs are closing. Shops are closing. Bus services are not viable and outside London almost non-existent. The railways depend on massive subsidies. So too does public transport in London!
The cause is not the cost of the employee. The cause is the greed and stupidity of the employers. Rather than reduce their demands they chose to import cheap labour. As usual this is nothing more than a stop gap. Within six months the imported cheap labour demands the same rates as those they put out of work and so it goes on.
Unless tackled this will bring about a total collapse of our economy and society. That is why BREXIT is a long overdue and essential requirement.
To restore equilibrium we must leave the EU. We must also move towards a taxation system that does not punish employers for creating jobs and which does not deter exports. I detailed this in my earlier article