WHAT'S HAPPENED TO SELF-RELIANCE AND RESILIENCE? THEY WERENEVER NEEDED MORE

The title of Kristian Niemitz's latest book, "Socialism: The Failed ldea That Never

Dies", is easily explained by the current crisis. We are experiencing a re-

emergence of a giveaway culture designed to shield individuals, groups,

businesses and industries from the devastation of our lockdown, without the

slightest regard for the economic and social consequences of ofloading money in

quantities not known since the second world war.

The money in question, conjured up from nowhere by the Treasury's computer,

is utterly unbacked and represents nothing but itself. Its aim is to shower the

population with power to purchase the essentials on which we depend for

maintaining life and health. Grants, subsidies, business loans, suspended

liabilities, loan guarantees, hikes in state pensions, deferring tax payments

furlough guarantees, reliefs of every shade. So what's not to like, especially when

the beneficiaries perceive all this largesse to be the government's duty, and their

entitlement?

This financial emergency is born of a rampant and unpredictable viral attack,

warranting crisis management. The result isn't socialism in its pure sense - but

the circumstances it has created are consistent with the very essence of a state-

managed collective society, including the proposed remedies. As a leaked

memorandum by HM Treasury discloses, these include wealth and property

levies, higher VAT, corporate and income tax rates, threatening that the only

alternative to raising taxes is another bout of deeply divisive austerity measures

not exactly music to the PM's ears.

When the principles of free markets and the primacy of self-determination have

all but disappeared from the state's own institutions what chance is there for a

post-lockdown reassembly of the familiar economic order?

Dealing with experts - and germs

Iť's astonishing how a serious dose of fear can be politically exploited. When we

hear dire warnings from health authorities on what could happen to us, and what

it, we suddenly become as compliant as mice on a

we treadmill. should do to avoid

Never mind that the expert opinions are mutually inconsistent; or that they are

based on predicted outcomes roundly discredited by equally eminent scientists;

or that ensuing government "advice" is garbled and barely intelligible. As a

leaderless herd we hear what we want to hear and feed unquestioningly into a

stream of communal inertia.

Our leaders knee-jerk response to the perception of threat, and our own

spineless compliance, highlights the virtual abdication of individual will.

Why? Our hard-won immunity against disease has been compromised by

decades of coddling. When we were kids in South Africa the only basic rule was to wash hands before meals and after visiting the loo - sensible enough, but

there was no obsessive follow-up list of strictures My Durban-born wife recalls

how, as a child, she loved the taste of sea-sand, and put it in her mouth whenever

she went to the beach. No one knows what degree of lifelong immunity those

sand-borne microbes bestowed

What about risk?

The belief in entitlement in a welfare-driven culture leads us to expect that the

government is responsible for "sorting it out", whatever "it is.

But what's at risk? Death isn't a "risk" -it's a cast-iron certainty for all of us.

When it comes, and how it comes, are imponderables beyond the wit of any

government, and we are "entitled" to no more than that the state will act

reasonably and in good faith to protect the lives, health and civil liberties of its

subjects.

The fact is, in this cruel, but just, world, every action entails an element of risk

yet rather than accepting risk and facing it, far too many of us have effectively

been emasculated and rely on the state to provide blanket protection against

every risk, under some corner of its labyrinthine "Health & Safety" regulations.

Far from affording protection, this regulatory compendium provides citizens

with an utterly false sense of security against ills that have no place in the state's

mandate. There are non-negotiable limits to entitlements. And, above all, what

happened to our own, innate, self-protective mechanism?

We have a deaf and physically disabled son. My wife and I established a charity a

dozen years ago with the mission of enhancing the lives of adults with physical

and learning disabilities. It is a small charity but, due to the unwavering efforts of

its trustees, it has become an established presence in the community, partly

because its fund-raising efforts include the staging of monthly chamber music

concerts and buffet suppers for up to 65 guests. It has become a living

demonstration of sustained achievement.

Over the years the trustees, including our long-suffering treasurer, have

undertaken all the regulatory burdens of form-filling, filing of returns, training,

safeguarding, writing mission statements, award-seeking declarations,

independently verified financial statements, and the rest. I can't speak for other

charities, but there is a point at which wearisome regulatory compliance saps

energy and creates an additional financial cost that yields little compensatory

benefit. In short, if we had faced it in our early days it would have acted as a

deterrent rather than an encouragement

The economic cost of universal bailouts

Governments everywhere have responded to this crisis by robbing money of its

purchasing power on a scale not known in our lifetimes, excusing their actions

under the heading of necessity. It is true that many citizens have benefited from

the redistributive effect of debasement, but that does not mean there is no cost

The shakedown that follows today's inflationary frenzy will be no less cruel

because the government's motives were pure! Traditional recourse to the printing press is plagued, this time round, by

pressure on central banks to introduce negative interest rates to stave off their

counter-intuitive fear of deflation. The theory is that if banks can be stimulated

into lending fiat money at zero cost, recipients will spend, spend and spend

But, since interest rates reflect relative time preferences, there can be no such

thing as negative rates. The recipients of all that free moolah will include

unviable businesses that cannot service loans, leaving swathes of weakened

banks begging for bailouts - but with what?

Conclusion

Every financial crisis has its own particular features. In earlier crises deficits

were expressed in "millions" of dollars or pounds; next time these became

"billions"; this time even "trillions" are commonplace. Do you think next time it

will be "quadrillions"?

My bet is that this will not happen. Before that we'll revert to barter.