No, what's irritated me once again is Polly Toynbee's shrill whinge in CiF for being castigated for telling the nation what's good for the poor. It's quite wrong, she says, to criticise her on the grounds that she has blue blood in her veins, earns many times the median wage, comes from a privileged elite of British society, has never wanted for anything and has never once experienced the life of those she claims to champion. None of these prevent her from telling the poor what's best for them - redistributive socialism - yet people attack her on these grounds.
Arthur Seldon, who founded the IEA with Ralph Harris, would have found Polly's privileged background remote indeed. He was born Abraham Margolis in the East End of London to Russian-Jewish refugee parents. They both died in the Spanish flu pandemic of 1918. He was adopted by a cobbler, Pinchas Slaberdain, and his wife Eva. He grew up with the great depression in the East End, and knew the harsh reality of poverty at first hand. He recalls when he was nine or ten his foster father died to leave him and his foster mother provided for by an insurance policy. He says he learned that even the poor, if left alone, were doing things for themselves. He said:
I was appalled by the insensitivity of governments to the efforts of the working classes to help themselves - the belief that they could not do all the necessary things. They were most anxious to ensure that they used all the opportunities of insurance to safeguard their families in times of sickness and loss of work. I began to sense a sort of anti-working class sentiment in all political parties. They wanted the State to do these things. They didn't like people to do things for themselves. They thought that ordinary people weren't capable. They forgot all the history of the working classes.That experience of course will be quite alien to Mary Louisa Toynbee and her kind. The Toynbee women of this world usually manage to find some object on which to focus their care; it's usually donkeys, or stray Greek cats, or orphan swans or suchlike, but Polly has picked the poor for the benefit of her special attention.
Ralph Harris, too, came from a working class background. He recalled when his mother died finding four policies in a shoebox - a funeral benefit policy for each of her children. "The working class feared they wouldn't have the money to bury their dead, so you could take out for a penny or halfpenny a week an insurance policy to pay five pounds; four children, four policies, sixpence a week altogether and five pounds on it." Harris believed in something that would be quite alien to Mary Louisa Toynbee;
Liberty carries with it individual responsibilities. Responsibility for yourself, and hopefully your family and as far as possible your neighbours. But it does throw responsibility onto our own shoulders. Well, that's what living means; it doesn't mean shrugging off responsibility and taking soft options.Now, when I want to hear what policy will best help the poor, do I listen to Ralph Harris and Arthur Seldon, or to Lady Mary Louisa Toynbee? Tough call.
Anyhow, back to the Austrian Business Cycle Theory. Wiki says in summary:
According to the Austrian business cycle theory, the business cycle unfolds in the following way. Low interest rates tend to stimulate borrowing from the banking system. This expansion of credit causes an expansion of the supply of money, through the money creation process in a fractional reserve banking system. This in turn leads to an unsustainable "monetary boom" during which the "artificially stimulated" borrowing seeks out diminishing investment opportunities. This boom results in widespread malinvestments, causing capital resources to be misallocated into areas which would not attract investment if the money supply remained stable. Austrian economists argue that a correction or "credit crunch" – commonly called a "recession" or "bust" – occurs when credit creation cannot be sustained. They claim that the money supply suddenly and sharply contracts when markets finally "clear", causing resources to be reallocated back towards more efficient uses.Ah, I can understand why people are coming back to this now.