Ritchie advocates state theft

The solution to the PFI system is apparently:

My answer? Compulsory repurchase at undeveloped land value paid with gilts that are not saleable for a significant period. And if that seems harsh, so be it: this is about reclaiming the common good from those who have sought to destroy it.

That is, the last government (and the one before, the one before that, indeed, I think we would be going back five or six elections since this was introduced) emcouraged people to purchase assets from the State. Hand over your money and you get this lovely set of tax offices for example. Maybe it was a good contract, maybe it was a bad one. But it was a contract which the government of the day actively encouraged and which was entirely legal under the laws of the land at that time.

These should now be torn up. The money that was paid for buildings, anything that has been spent on improving the site, this will simply be confiscated. There are a number of ways to describe this, from state theft through to tyranny.

It\’s most certainly not upholding the rule of law, is it? Nor certainty of contract?

And even if the PFI deals were so entirely screwed that it is worth renegotiating them this does not mean that doing so unilaterally would be worth the British Government entirely losing its reputation for keeping its word. One only need to look at the interest rates on government bonds of countries which have a reputation of weaselling out of obligations as against those who do not to see the value of being thought at least mildly honest.

As an example, I would give you the diference in yields recently on Greek Government bonds issued under Greek law and those issued under English law. That\’s exactly the value that straight dealing with contracts has.

39 thoughts on “Ritchie advocates state theft”

  1. You could reasonably date it to the sale of BP shares by Healey. Or the unwanted bits of church property he’d nationalised by Henry VIII.

  2. Surely RM is only talking about undeveloped land and not tax offices ?

    Surely not.

    From his article:

    NHS sell offs from Foundation Trust are going to become normal. As budgets are squeezed asset sales and leasebacks will become prevalent as a means of filling the gap and then one day we’ll realise the whole NHS infrastructure is owned offshore as a means of taxing the economy for the benefit of a few.

    He is talking about the whole privatised asset and only paying undeveloped land prices for the seizure.

    Although that does raise an interesting thought. There may be hospitals, particularly around London, where the land without the hospital is actually worth more than the PFI contract would sell for …

  3. Here’s a proposal.

    A large proportion of Ritchie’s income over recent years has been from the trade unions.

    A large proportion of trade union money has been ‘fiddled’ out of the public purse by rather underhand arrangements of the previous government.

    This was morally unfair. The money was effectively stolen from taxpayers.

    I propose legislation be introduced to retrospectively claim back that money from those it was paid to.

    Such individuals should receive no recompense. This will not be challengeable in the courts.

  4. How is this different from compulsory purchase of houses at below their market value to clear the way for vanity projects such as airports and high-speed rail links?

  5. History repeats itself.

    Railway nationalisation in 1948 was paid for with 30 year scrip which was then inflated away.

  6. Umm, insofar as RM has a philosophy, doesn’t he believe that we should all give all our money to the State?

    I think he believes that the State, unlike we mortals, best knows how to spend our money?

    So how could the PFI contracts be a pile of poo?

    Normally, I don’t comment on RM related posts because the man is either bonkers or evil or the mutant offspring of the two.

    But this is him advocating theft because one of his basic tenets is wrong and it makes me rather cross.

  7. @ Frances Coppola
    Compulsory Purchase Orders are *supposed* to be at fair value. Murphy wants assets to be seized and so-called payment to be in paper that is non-transferable (and so has no measurable value) with nominal value based on the agricultural use of land upon which a hospital has been built. In most cases the latter is zero (or less than a tenner, in the few cases where you could graze one sheep for one day a week on grass verges to the car park).
    CPOs are only morally acceptable if fair value is being paid to someone who is blocking a project after other landowners have agreed (which latter implies that the original offer was thought to be fair). Murphy is not proposing anything like this.

  8. And his acolytes still claim his philosophy has nothing in common with Communism? Sounds almost Castroesque in its blatant disregard for the principles of Private Property

    I also love the phrase ‘The common Good’ which seems to mean ‘whatever Richard J Murphy thinks it is’

    Remember, Boys and Girls, this man is expected to be the Chief Economic Advisor to the incoming Miliband government in 2015. Those readers resident in the UK had better book their tickets out now …

  9. Remember, Boys and Girls, this man is expected to be the Chief Economic Advisor to the incoming Miliband government in 2015.

    Do you have any evidence for that?

  10. Re: Paul B – only the traffic I get from my contacts within organisations such as Compass, and his seemingly endless presence as a ‘talking head’ on the BBC, especially Radio 4. From what I’ve seen of your comments here, I assume you’d think him being placed in that position would be a good thing, no? He’d send those vicious ‘neoLiberals’ scattering to their tax haven hideaways!

  11. Van P – I’m bit puzzled where “Murphy as a serious person” comes from. There’s plenty of vaguely lefty/liberal/Keynsian bloggers/academics around -Blanchflower, Wren Lewis, Portes. Milliband could annoy most readers of this blog w/o having to descend to Murphy. And whatever you think of him, do you really see Ed Balls as a shrinking violet who’d do whatever Murphy said?

  12. Dunno about Van P but I see Ed as a scheming opportunist (i.e. politician) who would at least appear to do whatever the TUC (i.e. Murphy – as he is definitely their lead tax and economics adviser) said. Until he could think of (or Yvette pulled the right string) a loosely plausible reason why it wasn’t possible.

    That it “is screaming idiocy” doesn’t count, unfortunately.

  13. SE. “…I see Ed as a scheming opportunist (i.e. politician) who would *at least appear to do* whatever the TUC (i.e. Murphy ) said.”

    So we agree – he wouldn’t do what Murphy said? He’d just string the idiot along?

    “Until he could think of … a loosely plausible reason why it wasn’t possible.” How long would that take? 30 seconds? The more of an idiot you think Murphy is, the shorter the period you should allow.

    I know this is damning with faint praise, but all I’m saying is that Balls is brighter than Murphy (and better at nasty political infighting).

  14. Luke

    True enough re: Balls – that presumes he isn’t removed and Umanna or some other Union puppet installed. I think it would be along the lines of Walters/ Lawson in the 1980s – a struggle of wills. Whatever I think of Murphy, he is no shrinking violet – I’m sure he’d give as good as he gets!

  15. @ Luke
    Balls is a nasty piece of work but he must be a lot brighter than Murphy who only got into a third-class university to study a course that wasn’t deemed to merit a degree when I was at school/university.

  16. So we agree – he wouldn’t do what Murphy said? He’d just string the idiot along?

    Dunno. Depends how much power the unions wield in the Balls protectorate. Remember, they selected Milliband so they may require some kowtowing to their special interests which Balls (or Yvette) may deign to grant them.

    As a minor side note – I’ll agree with PaulB (who, I admit, wasn’t making this distinction). Ritchie is an incompetent not an idiot. If your premises are sufficiently far removed from reality, no amount of intellect will allow your conclusions to be correct. (A lack of intellect and a generous helping of dumb luck might do the trick, though 😀 ).

  17. Ritchie is worse than incompetent. He’s actually too stupid to realise how stupid he is.

    Most of us know we don’t know most things. Ritchie thinks he’s actually worked it all out.

    No one past 17 who thinks that should ever have any power or influence.

  18. PaulB
    Incompetence doesn’t deserve this mindless perversity at intelligent debate. Hosted by Worstall.

    Worstall and his twats wouldn’t know how the fuck real people live if they threw up down their necks and stamped on their children. Waving Farage flags and pissing on a Belgian.

    And then getting a “brown child” to mop up the piss. Whilst telling them that they’ve never had so good as a result of you. And that Hannon excuse of a human.

    Johnny “brown child” Foreigner to you, Fat Boy.

    Unfortunately for Worstall, as incompetent that you may think Murphy is, your pissy nothings only add to the slurry of fuckwittery.

    Pedanticise all you like, but all see from this great libertarian fight-back is a twat in portugal supporting failed ideas, commented on by old school ties, contrary pensioners and blind wannabes.

    Incompetence is a safe haven compared to the level of low-life scummery I endure here,

  19. Arnald: of course it’s up to you which writers you find congenial. But there’s a basic level of competence required to make a government adviser worth employing, and Murphy falls woefully short of it. See for example this thread, in which Murphy misunderstands a simple financial table to the tune of £5bn, and is unable to admit it even after two of us independently pointed it out.

  20. Arnald

    I’ll agree with you on one point – if you’re representing the ‘real people’ ,based on your witterings (which seem to sink lower every time you deign to comment)I’ve no idea how you’re capable of breathing whilst typing!

  21. @William Connelly

    Yes I can see the difference. Going on strike on the eve of the olympics is blackmail. And a contract signed under duress is voidable – or it is a valid defense for voiding the contract in common law.

    Signing a PCI was a way for Gordon Brown to shift public debt of the UK balance sheet. There was no duress.

    Simples!

    By the way, William, nice to see you here. I suppose now that you have been banned from abusing your position in wikipedia to twist climate information you have some more time on your hands.

  22. PaulB,

    It’s not the first time I’ve read your exchange with Murphy, and each time I’m amazed at the neck of the man. He asks you for an explanation, and immediately dismisses it out of hand without even understanding a quarter of it. I’m sure when he first read it, he thought “Oh shit…”

  23. So let me get this straight. The State is all knowing and all wise, and therefore must be given ultimate power over all economic activity, on grounds of it being the most efficient option.

    The State also signed the PFI agreements completely voluntarily, under no duress whatsoever. It now proves that the State did an awful bargain, and the agreements are massively inefficient and the State wishes it hadn’t signed them.

    So by definition, if the State is capable of signing agreements that are not the optimum solution economically speaking, it is therefore not all knowing and all wise, and therefore is certainly no better than a market solution, and most likely a worse one.

    Case dismissed I think.

    Oh and RM is a nasty little fascistic c*nt, just for the record.

  24. Willi is always patrolling around here, since science threw him out, failing as a green candidate and no one reading his webshite he has plenty of time.

    Tim adds: We rather like Billy around here. He’s one of the very few greens who are actually willing to listen about the economics of climate change.

  25. Of course, most central bankers and their supportive economists, via support for fiat monetary systems, are no better than Murphy. Inflation is the confiscation of savings. The moral aspect of debauching currency in the name of “macro-economic management” or whatever is not highlighted as much as it should be.

    To switch continents, the deal to bail out GM in the US under the Obama administration involved a confiscation of part of what is owed bondholders. Arguably, the “pre-pack” deals for many bankrupt companies also shaft creditors. A lot of this is now treated as SOP in modern finance, not just in the minds of people such as Richard Murphy.

  26. @Jonathan

    Actually it was the Chrysler bankruptcy and restructuring under chapter 11 which was the most scandalous as unsecured creditors (the unions) received a higher recovery than secured creditors thereby violating the principal of the absolute priority rule. There was also some conflicts of interest because the senior secured creditors (banks) who helped the deal go through were also beneficiaries of Obama’s TARP programme.

  27. TN: Thanks. I should emphasize that it’s not Murphy’s eccentric views on the elasticity of taxable income that trivially disqualify him. It’s the simple £5bn error he makes in reading the financial data.

  28. @paulB

    Did not know that. Still I think Timmy has a point and that “morally” there is a difference between an agreement forced by the blackmail of the unions to ruin a hugely expensive event that has cost the state £10bn or so and one agreed between parties coolly with lots of time for consideration.

    What part of my wikipedia comment was wrong – you saying that Billy was never banned. Or that his edits were unbiased.

  29. Fred: I am saying that WMC is not currently banned from editing climate information on wikipedia (as you can easily verify by looking at his contributions page). Further discussion would be wildly off-topic, so I suggest we leave it here.

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