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Joint Statement - 20/07/2018

 

US, UK, and all other countries should embrace unilateral free trade.

 

The United States, the United Kingdom, and any wise country should immediately implement policies of unilateral free trade. No trade agreements are required, no negotiation or retaliation, no matter what the rest of the world does.

By Bill Etheridge, U.K. Independence Party, Member of European Parliament
and Wes Benedict, Libertarian Party Executive Director.

Besides the Declaration of Independence of the United States, another seminal event occurred in 1776. Adam Smith published The Wealth of Nations. As he explained, “In every country it always is and must be in the interest of the great body of the people to buy whatever they want of those who sell it cheapest.” Nothing has happened in the succeeding 242 years to refute Smith’s remarkable insight.

Much of the world seems to have forgotten that lesson today, though, as countries hike tariffs in an ongoing war of punitive retaliation. It shouldn’t be this way, though. By moving resources to more productive and valued uses, trade makes everybody better off. This remains true no matter what kinds of tariffs or sanctions other countries impose. Trade barriers hurt the countries that impose them most of all.

The most important economic principle to help us understand gains from trade is “comparative advantage.” When people specialize in the goods and services they can produce more efficiently, then trade for the rest, they create wealth and grow the economy.

For example, it is theoretically possible to grow bananas in North Dakota with an immense investment in greenhouses and electricity for grow lamps. They would be very expensive bananas, though, compared to those that can be inexpensively imported from Ecuador, where bananas grow like weeds. If a lobby for North Dakota banana producers made enough noise about protecting American banana-producing jobs, and made enough strategic campaign contributions, it could persuade Congress to raise tariffs on bananas from Ecuador. When those prices rise high enough, North Dakota bananas would become competitive at the grocery store — but consumers would pay more to purchase them, and have less money to spend on anything else they want to buy.

Tariffs and other trade restrictions effectively function as higher taxes on consumers in the country that levies the tariffs. Americans are poorer because they pay more for bananas. Ecuadorians are poorer because sell fewer bananas. The politically connected North Dakota banana growers and their lobbyists are better off, but only at the coerced expense of everybody else.

The same logic applies to steel, aluminum, and all the other goods being targeted by the Donald Trump administration’s quack economist Trade Representative Robert Lighthizer. Complaints about an unequal balance of trade are meaningless. If a country sells more to us than we sell to them, the difference comes back as foreign investment in our country. We have a trade imbalance with China, but China is also the largest holder of U.S. Treasury debt and is making direct investments in American factories. The Chinese company Shangdong Tranlin Paper recently built a brand-new paper mill near Richmond, Va., creating many new American jobs. When countries freely trade with each other, the balance of payments includes both trade and investment activity, and these are always in balance.

“Countries with free trade are rich and strong,” said Wes Benedict, executive director of the U.S. Libertarian Party. “Countries with high tariffs are sick, corrupt, and weak. There are some exceptions to that rule, because trade isn’t the only factor that determines wealth, but every country with trade restrictions would be wealthier if they unilaterally eliminated their own tariffs — whether or not other countries follow suit.”

According to Financial Management magazine, the top five countries with the lowest trade barriers are Singapore, Hong Kong, the Netherlands, New Zealand, and Finland. According to Business Insider, the five countries with the highest trade barriers are Iran, Bhutan, Sri Lanka, Nepal, and Pakistan. According to the CIA Factbook, the average per capita income of the top five free-trade countries is $57,520. The average per capita income of the bottom five is only $9,960.

Many people know that most economists think free trade benefits everyone, but they mistakenly think that this has to be a two-way street. Hardly anybody realizes that a country can implement free trade unilaterally and still reap the benefits of free trade regardless of what the rest of the world does. That’s the great news.

“Trade wars are completely unnecessary and completely unwise,” Benedict said. “Either side — or both sides — can win, simply by refusing to impose tariffs. While tariffs are bad, retaliatory tariffs are even worse, wholly foolish, unnecessary, and counterproductive because they exacerbate trade wars. When countries stop trading with each other, this often leads to shooting wars.”

When the United States imposes tariffs on goods from Canada or China, most of the damage happens to the United States. If Canada and China are smart, they would refuse to retaliate. If they were wise, they’d go further and reduce their own tariffs and other trade restrictions to zero, reaping the benefits of lower prices, higher purchasing power, and a growing economy.

Trade barriers also create dependency. If the steel industry only exists in America because of tariffs that price foreign steel out of our markets, then steel lobbyists will forever beg the government to keep or raise those tariffs to protect them. Every business that uses steel will suffer from higher prices and lower quality.

Libertarian National Committee Executive Director Wes Benedict meets with Bill Etheridge, Member of European Parliament from the U.K. Independence Party
Libertarian National Committee Executive Director Wes Benedict meets with Bill Etheridge, Member of European Parliament from the U.K. Independence Party

When representatives from the U.K. Independence Party (UKIP) recently met with Libertarians at the U.S. Libertarian Party headquarters in Alexandria, Va., the issue of free trade stood out as a priority among all our areas of common concern. The United Kingdom has a long history of supporting free trade, as does the United States, so why are we embroiled in new trade restrictions and threats of still more salvos in the world’s growing trade skirmishes?

“I firmly believe that for a nation to be prosperous, happy, and at peace it must implement free trade,” said Member of European Parliament Bill Etheridge, of the U.K. Independence Party. “A post-Brexit U.K. has a major opportunity to adopt a new approach and lead the way with unilateral free trade. Pressing ahead with unilateral free trade would be a bold, peaceful move that would put us firmly on the map as an open free trading nation once again. For too long the U.K. has been linked to a protectionist block that has forced prices up for consumers and helped impoverish the third world. Let’s use Brexit as a positive mechanism to rectify decades of expensive isolated trade as a result of being a member of the European Union’s protectionist racket.”

The United States should follow suit, and abandon the long-discredited economic fallacies that the Trump administration has resurrected. Mountains of empirical evidence and sound economic theory both show that tariffs and trade wars only serve to impoverish American workers.

“More than anything else, economic fallacies inform this president’s trade views,” wrote Daniel J. Ikenson, director of the Cato Institute’s Center for Trade Policy Studies, about President Trump’s recent actions. “Unlike his predecessors, he sees trade not as a win-win proposition, but as a zero-sum game with distinct winners and losers. Exports are Team America’s points; imports are the foreign teams’ points; the trade account is the scoreboard.”

Trump is using the wrong measurement to keep score.

 

Statement - 04/04/2018

 

Catalonia: Can Independence Work?

            After centuries of attempted rebellion against the Spanish government, Catalonia put the future of their rebellion in a democratic referendum.  Although over 90% of those who came to the polls voted in favour of breaking away from Spain and forming a republic, the Spanish government declared that the referendum was invalid, illegal, and harmful to the state.  With members of the independence movement either serving prison sentences for rebellion or currently awaiting extradition for charges of sedition and embezzlement, such as Catalan leader Carles Puigdemont, the question arises of whether or not Catalonia can function as an independent state.  However, due to a unique culture, binding national identity, and rising nationalism in other nations, Catalonia could reasonably achieve independence.

Brief History of Catalonia

            During the early years of Spain, Catalonia was integrated into the Kingdom of Aragon.  However, later it was incorporated into the Spanish territories with the marriage of Ferdinand II of Aragon and Catherine I of Castille.  Under the Spanish monarchy, Catalonia was allowed to retain much of its independence, as it had its own traditions, courts, and government bodies.  During the Spanish Civil War and under the regime of Francisco Franco, the once semi-autonomous political entity of Catalonia was harshly repressed, fostering much resentment of the Catalans toward Spain.  However, after the end of the rule of Franco, Spain allowed Catalonia to adopt its constitution and sign the Statute of Autonomy which revived Catalan traditions, culture, political institutions, and language.

2006 Catalonia Referendum

            The distinct culture of Catalonia, having a separate language and different customs, has formed a people who do not see themselves as Spanish.  This national and cultural identity has inevitably caused rifts within Spain.  While Catalonia has long struggled to gain independence from Spain in order to create a republic, the present-day movement started in earnest around 2006.  In 2006, Catalan held a referendum to vote on whether or not to adopt a new Statute of Autonomy, which would have granted greater power and control to Catalan from Spain.  Even though the referendum was a success, the Spanish legal courts declared much of this new statute to be void and illegal.  Many parts of statute were thrown out, while many others were severely amended and rewritten compared to the statute on which the people actually voted.  The actions of the Spanish courts caused massive demonstrations in many major cities in Catalonia, where over one million citizens marched in Barcelona in protest alone and adopted the slogan “We are a nation. We decide,” that reveal the distinct divide between Spanish and Catalan national identity.

2017 Independence Referendum and Parliament Vote

            After several more years of tension between Spain and Catalonia, the Catalan people held an election on whether or not to secede from Spain and start a new republic.  The results were nearly 92% in favour of seceding.  However, there were problems concerning the legitimacy of the election, such as voter fraud.  On the other hand, only 43% of the Catalan population went to the polls. The Catalan government argued that the reason for this turnout was because of widespread Spanish police presence and force at polling stations that made Catalan citizens either weary of voting or unable to vote. Regardless, the Spanish government, as well as the European Commission, declared that the independence vote was illegal and nullified the referendum as it allegedly violated the Spanish Constitution.

            Although the referendum was declared unconstitutional and suspended by the Spanish government, the Catalan parliament held a vote on 27 October, 2017 and declared independence from Spain.  In retaliation, the Spanish Prime Minister, Mariano Rajoy, threw out the Executive Council of Catalonia, which was the executive branch of the Catalan government system.  In doing so, Rajoy and Spanish law enforcement dissolved the Catalan parliament and issued warrants for Carles Puigdemont and other top Catalan government officials on the grounds of rebellion, sedition, and embezzlement.  On Sunday March 25th, 2018, Puigdemont was arrested by the German authorities and is currently undergoing extradition procedures.  During the following days, demonstrations have broken out all over Catalonia in protest off the arrest of Puigdemont and the suppression of an arguably legitimate vote of independence by the people and the parliament.

Is Independence a Reasonable Option for Catalonia?

            While the independence movement has been harshly suppressed by Spain and bashed by the European Commission, the fight for sovereignty in Catalonia is still ongoing.  However, whether or not Catalonia has the foundations for running its own nation is of the utmost importance. Three factors exist for nation-building to be successful.  At the core, there must be a pre-existing national or cultural identity, such as shared customs, values, traditions, and, most importantly, language.  In Catalonia, there is a shared language that is completely separate from Spanish, which unites the people under one identity.  After having centuries of relative independence, where distinct culture could develop, Catalonia easily meets this criteria.

Another important factor to consider is that there must be a strong economy with a prominent middle class for democracy to flourish.  Catalonia is one of the wealthiest regions in Spain, and the region has a thriving middle class due to high levels of industrialization and the existence small businesses from the tourism industry.  Finally, there must be a lack of political apathy in the population.  The Catalans have demonstrated a clear concern about their politics as over one million people protested in 2006 and with mass protests happening even today.

With all three of these main factors being met, independence can be seen as a reasonable option for Catalonia.  The region has the proper infrastructure to sustain itself as a nation, not only economically, but as a unified nation due to a long-held national identity that is separate from Spain.  While the question of when Catalonia will gain independence remains, the region is in a good position to be autonomous when the time comes.

 

 

Statement - 28/03/2018

 

The Revolution of Dignity in Ukraine: Four Years Later

 

Statement by our Chair - Bill Etheridge MEP

 

 

Recalling the basic principles of democracy and the rule of law in European Countries; recalling the basic responsibility of the European Countries for the maintenance of peace and security, as well as the respect for the fundamental rights and freedoms; reaffirming that European Countries support the aspirations of the Ukrainian people to establish a new legal democratic order and the importance of maintaining a comprehensive political dialogue in Ukraine that reflects the diversity of society and includes representatives from all regions of Ukraine.

 

Supporting the efforts made by European and international organizations to promote justice in examining the events that took place in the Maidan in January-February 2014; noting with concern the inactivity of the Ukrainian authorities in the investigation of the massacres on Maidan during the Revolution of Dignity - and noting procedural violations and pressure on judges in high-profile political processes.

 

1. We reaffirm our commitment to basic democratic values and  the important role of freedom of speech in civil dialogue in Ukraine.

 

2. We call upon Ukrainian law enforcement to investigate promptly and objectively all the facts regarding the crimes against life and health of the Ukrainian citizens that took place during the Ukrainian revolution of dignity – both protesters and employees of law enforcement bodies.

 

3. We call on the Ukrainian authorities to respect their international obligations regarding the protection of the basic rights of all Ukrainian citizens, including the rights of persons that belong to minorities and political opposition. We believe that no one should be discriminated against based on their political views, and every citizen should be a part of democratic dialogue.

 

4. We believe that to establish a fair and objective picture of events that took place on the Maidan in February 2014, it is important not to neglect or ignore any evidence that would allow people to determine the real course of the tragic events that took place in Majdanie in 2014. In particular, the material collected and presented by the investigative journalist Gian Micalessin and Anna Stephan should be thoroughly investigated, and not ignored.

 

5. We believe that to perform an objective investigation regarding Maidan tragic events, it is recommended to set up appropriate assistance from European Countries that could help to monitor progress in the investigation and protect its credibility and transparency.

 

 

Press release - 19/01/2018

 

Of course Macron wants a bridge: the Calais problem won’t be solved whilst France remains in Schengen.

 

 

If Theresa May and her government had hoped to show that they were taking a tough line on Brexit and standing up for the UK in the meeting at Sandhurst yesterday, they failed.

 

Not content with trying to build metaphorical bridges, it was even discussed we should have one across the Channel. 

 

The meeting’s conclusion consisted of more demands for UK tax payers’ money for the EU and for France and more capitulation by Mrs May. The so-called ‘Sandhurst Treaty’ includes a promise that Britain will take up to 260 unaccompanied child migrants from Calais and other Channel ports and will reduce the amount of time taken to process their applications to come to the UK from six months to 25 days.

 

In addition, adults seeking asylum in the UK will be given a decision within a month which Mrs May thinks will deter illegal migrants from flocking to Calais.

 

It won’t.

 

I’ve spent more time than most in the migrant camps in northern France and not one person I spoke to told me they would be going back home. They have not travelled across the sea and the continent to be deterred by a new agreement when the majority of them plan to arrive in the UK illegally anyway.

 

The main problem France faces is its membership of Schengen. It means that when migrants land somewhere in the EU they can travel across the Schengen Area without getting their passports - or their paperwork issued by the country they landed in - checked. It is a piece of legislation which facilitates illegal migration but instead of blaming the EU and themselves for the camps in their northern beach towns, the French government instead blame the British. It might be politically expedient in the short term but it's an utterly stupid move. 

 

At a time when ambulances are unable to get to elderly patients in need and SAS veterans can't be housed, our government has just given another £44 million of our money away to France to deal with a problem which they created and they refuse to address: that of free movement within the EU and people trafficking. Instead they continue to enable criminal gangs in their sick trade causing problems not only in Europe but in the countries these people are leaving which desperately need economically viable people to rebuild and develop into democratic nations.

 

But that wasn’t the end of the deals. The two leaders also agreed to closer cooperation on security and defence, including a deal to contribute troops to a 10,000 strong Joint Expeditionary Force which would be ready to deploy by 2020 - on the agreement of both countries.

 

Given the recruitment and retention crisis in the British Armed Forces, signing up to yet another deal where our already thinly spread troops will have further commitments is not only folly, it is dangerous.

 

France and the UK rarely have the same strategic aims as the EU; something the history books as well as the newspapers will tell you. Yet this deal means that now our defence policy has to tie up with France’s. And if we’re not deploying together, for example in Mali where the French, aided in small numbers by the British, are trying to deal with the flow of jihadis from the disastrous decision to bomb Libya, then what is the point of this deal? 

 

Are we just waiting for some serious incident to occur, when instead of the decision being taken by the government we have to have a chat with the French about the deployment of our own troops who take their oath to The Queen? International Law, the rules which are supposed to guide a country on what military action it can take (unless you are Tony Blair in which case presumably heavy tomes are used as some kind of door prop) does not limit a country from responding to an attack by another country. Article 50 stipulates that any action necessary within the Geneva Conventions can be used to repel an attack. What if we had to ask the French?

 

History shows us we don’t usually agree with the French (take a look at Vietnam, Iraq and the Falklands) and it detracts us from alliances which we actually benefit from. As a former Home Secretary Mrs May will know the importance of ‘Five Eyes’, the premier group in the intelligence community. France are not a member of Five Eyes because members of that group do not trust them to keep top secret information to themselves, primarily because of their allegiance to Brussels and Europol.

 

Understandably, these latest moves have not gone down well with the people who have to carry out the decisions of governments.  An officer in the British Army commented to me:

 

“These moves illustrate further steps in the folly of placing out nation’s defences in the hands of another nation. The government are using the French Armed Forces to make up the shortfall of manpower, light armour and strategic air transport caused by eight years of savage cuts fo the British defence budget.”

 

Barely a week goes by without another handout by Whitehall either in cash or resources to an organisation which has leeched of us for decades.  It’s like they have not seen the struggles people are facing in this country because of the strain on public services, the housing market and the recruitment crisis in the military which will not be solved by some patronising adverts. 

 

Brexit should be a great defining movement in this country’s history but all the while we are putting people who do not believe in us in charge of the negotiations we will continue to be on the back foot.

 

The conversation with the EU, like the French should be a very quick chat. We’ll have unilateral free trade with the EU and those people who moved to the UK legally under EU free movement can stay. Should they then talk about trying to kick out Brits from Spain we can rethink the arrangement, but it should be made clear there will be no blackmail, no huge bills and no tying of our Armed Forces into bilateral or supranational agreements.

 

There’s the rest of the world out there for us: why despite everything are we still focusing on a declining market with such an inward looking perspective?

Announcement - 19/12/2017

 

New booklet

Our Chairs lastest EFDD booklet - We want the UK and Europe to be Prosperous, Happy and at Peace is now available. Download here.

 

We want the UK and Europe to be Prosperous, Happy and at Peace is now available.
Prosperous Happy Peace 2018.pdf
Adobe Acrobat document [4.8 MB]

Announcement - 16/12/2017

 

We are pleased to announce our new Honorary President - Dr Tomaž Slivnik


Dr Tomaž Slivnik was born in communist Yugoslavia, where he gained first hand experience of how communism does not work and how government gets in the way of entrepreneurial poor people trying to better themselves. Aged 16, he won a scholarship to an international school in Italy and at 18, he won a bronze medal at the International Mathematics Olympiad in Canberra, Australia, allowing him to study at Trinity College, Cambridge, where he obtained an MA, MMath and PhD in Mathematics. For a while, he was a postdoc and assistant professor, and spent time at Louisiana State University, Griffith University, National University of Singapore and Ljubljana University. He left academia to become a successful technology entrepreneur. He has lived on three continents and several large and small islands. He is an experienced entrepreneur and angel investor with a strong interest and focus on technology, ranging from technical software, electronics and other engineering disciplines. He is a member of several business angel networks and a member of the board of Cambridge Angels.

We very much welcome his expertise in the fight against authoritarianism and the destructive socialist narrative sweeping Europe. 

Regards,

 

Bill Etheridge MEP  -Chair

 

Announcement - 07/12/2017

 

The next Indigo meeting will be on 11th January 2018 starting at 18:30 (IEA, London). Dinner will commence at 19:30 - there are strictly limited tickets for paid members only. 

 

 

Announcement - 15/11/2017

 

 

The Indigo group is pleased to annouce our new Lead Spokesman - Ben Walker.

Paradise Papers 12/11/2017

 

The details of another hack on companies which specialised in corporate services, namely helping rich people legally reduce their tax bill, has been the headline since the 13.4 million documents were released.

The firm Appleby, where 6.8 of the documents were related to, operates in 10 jurisdictions and there were another 19 corporate registries maintained by governments in secret jurisdictions, mainly in the Caribbean but also including Malta, a member of the EU. 

Whilst the majority of noises being made about these revelations, which include U2 front man Bono, who attacked the Canadian Prime Minister in 2005 for being ‘too slow’ in increasing the country’s foreign aid budget, come from the left, there is a very small noise being made by people who realise that avoiding tax is inevitable.

Tax avoidance, unlike tax evasion, is not illegal. There are people who would like to make it so, but they will have very little experience outside of left wing politics or trade unions. Either that or they singularly fail to understand human nature.
 

But instead of attacking people who are fortunate enough to be able to afford financial advisors, we should be looking at reducing everyone’s tax burden - for the benefit of all.

In economics, tax cutting is known as ‘expansionary fiscal policy’ for the simple reason that when you cut taxes, people have more money to spend efficiently. Yet over the last few years we have a majority view which mistakenly think Keynesian demand management, or high government spending, is the best way to stimulate the economy.

This is not only true of income tax, but importantly of corporation tax, which taxes the profits on businesses, and national insurance, which ludicrously taxes employment. A tax on giving people work? Who thought that one up?

Businesses are the engines of growth, particularly SMEs. And just like us common or garden income tax payers, they are the ones who end up paying a larger percentage of income as tax because they don’t have the teams of tax lawyers and financial advisors that the multinational companies such as the ones involved with the Luxembourg ‘sweetheart’ deals have. 

So it’s the rich who get to avoid that tax, once again, by virtue of their size and wealth.

I am not for one moment saying that we should crack down on this: No, what I believe is that these opportunities for fiscal efficiency should be opened up to all.

In an interview with Fox News in 2004 economist Milton Friedman said there were four ways to spend money:

“There are four ways in which you can spend money.  You can spend your own money on yourself.  When you do that, why then you really watch out what you’re doing, and you try to get the most for your money.  Then you can spend your own money on somebody else.  For example, I buy a birthday present for someone.  Well, then I’m not so careful about the content of the present, but I’m very careful about the cost.  Then, I can spend somebody else’s money on myself.  And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch!  Finally, I can spend somebody else’s money on somebody else.  And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get.  And that’s government.”

What we need to do is to break away from this almost perceived wisdom, so entrenched is it in the minds of the majority of politicians, the media and thus the general public, that the government is the best person to spend our money. It is not: it is the best way perhaps for areas such as defence or street lighting, overcoming the 'free rider' problem and monopsonies, but in most areas it is inefficient and wasteful. Just think how much it costs you to change a light bulb compared to a government department.

Financial Advisor and fellow libertarian explains the situation: ‘An investment fund in a ‘tax haven’ simply means the payment of capital gains tax is delayed. Once the money is repatriated the tax is owed.

‘If you truly want to avoid tax you need the investment in a trust. This is particularly true of inheritance tax.

‘Despite her huffing and puffing on TV over the last few days by the retired Parliamentary budget chairman Dame Margaret Hodge, her family trust is legend.’

We have one of the most complex tax systems in the world, as anyone who has tried to do a self assessment can testify. In countries like Lithuania, they have a flat tax system, where a percentage of your total earnings is taken for government spending. 

Many people think this is ‘unfair’ because the rich pay the same as the poor, which is, frankly, innumerate. These people should quickly learn the difference between a percentage and an actual amount. Paying 10 per cent of tax on an annual salary of £20,000 is quite clearly less than paying ten per cent tax on an annual salary of £100,000. Five times less, to be precise, and if you can’t do that sum in your head then chances are you are probably the shadow Home Secretary.

In the UK the annual salary for someone earning the minimum wage is roughly £13,200. Yet the tax free allowance is only £11,500. This means that someone earning the kind of money where you would struggle to pay rent, heating, food and run a car still gives the state £400 a year in tax. They then would be entitled to state benefits to help them make ends meet, which comes from the same pot that they themselves paid into, only there are administrative costs which also need to be paid from that. 

It’s a farce and it's immoral. What kind of government thinks taxing people on low incomes only to give them their money back via a convoluted and costly benefits system is anything other than insane? 

Anyone earning below an amount on which they can reasonably live should not pay any tax at all.

What the paradise papers show us, as the Lux Leaks did before, is that people will go to considerably lengths to keep as much of their money as they can. If we could afford it, the majority of us would.

But libertarians believe that instead of this just being a privilege of the rich, this ability to spend ones own money, to invest it, save it or spend it as you see fit, should be an opportunity for all.

Just remember: tax cutting expands the economy and that means we all get richer either directly or from increased tax receipts to the treasury for better defences, better roads, better healthcare and the ability to run a budget surplus and start to pay off that huge national debt which is increasing second by second and costs billions to service.

You don’t need to be a super smart tax lawyer to see the sense of doing that. 

 

 

 

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