It’s hard to know where to begin with the agreement signed by the G20, so I thought it might be interesting to point out all the various words and phrases that trigger libertarian alarm bells – and why. I work on the theory that the majority are desensitised to economic violence, that so ubiquitous and commonplace is political grabs for power that we don’t notice it when it happens.  

It’s an exercise in understanding different political tribes, rather than a typical rant. There’ll be plenty of those elsewhere, I’m sure.

We start from the belief that prosperity is indivisible;

The temptation here is to pretend to know what this means, but I’m not going to. I’m going to call the bluff: This is deliberate obfuscation in order to create the appearance of importance and profundity. “We, the people…” it is not.

…our global plan for recovery must have at its heart the needs and jobs of hard-working families

Shudder. The phenomenon of families as the only politically recognised economic unit turns out to be a global one. Is there no escape? What a difference, “our global plan for recovery must have at its heart the rights of individuals” would be. What a profound, world shaking difference that would make. 

…an open world economy based on market principles, effective regulation, and strong global institutions

Libertarians look at this as the alternative to, “an economy based on free trade between all nations of the world” – the alternative being heavy political control of markets – in other words, protectionism if one is feeling kind, and socialism if one is feeling a bit American.

We have today therefore pledged to do whatever is necessary…

It doesn’t take a die-hard anti-statist to be concerned with the idea of the 20 most powerful countries in the world agreeing to do “whatever is necessary.” From a libertarian point of view, there is no more chilling phrase in the English language. It invokes, “The Greater Good” – the ability to act in a way that would be unthinkable if the repercussions on individuals were taken into account instead of the interests of a faceless collective. 

strengthen financial regulation to rebuild trust;

says, to libertarians, “we’re taking charge of this.”

an additional $1.1 trillion programme of support to restore credit, growth and jobs in the world economy

which says “we’re going to raise $1.1 trillion in tax.”

We are undertaking an unprecedented and concerted fiscal expansion, which will save or create millions of jobs 

Hard not to agree with the first part, but whether this saves or creates a single job in the long term – considering how much tax will be required to pay back the $1.1 trillion – is another matter. It makes you wonder – who’s going to get the blame when it fails? Will it be a lack of ambition on the part of the G20 or will the panic stricken borrowing and splurging get the blame? How will we know if they’ve made the situation worse, or prevented it getting worse? As with the aftermath of the Great Depression, will economists continue to argue over this for centuries to come?

we also agree to establish the much greater consistency and systematic cooperation between countries, and the framework of internationally agreed high standards 

Which, to libertarians, looks suspiciously like code for, “because we’re shackling our own financial services, we fully intend to make sure that no upstart state can sneak up and steal business from Wall St and the City of London just because they’re now highly regulated and therefore less competitive internationally”

You can hardly blame them for trying to rig the system in their favour – after all, Britain’s biggest export has been financial services and the changes Brown would impose would effectively end our global advantage in this market. Smells like protectionism, and extension of the quasi-Free Trade seen within the EU – Free Trade so long as you follow the very expensive rules that suit the big, powerful states.

Regulators and supervisors must protect consumers and investors, support market discipline, avoid adverse impacts on other countries, reduce the scope for regulatory arbitrage, support competition and dynamism, and keep pace with innovation in the marketplace.

This sounds very much like someone’s trying to reinvent Free Trade, except with Politicians at the heart of the action. Free Trade seems to leave politicians as impotent observers rather than masterful Governers, willing and able to steer the whole of human activity in the ‘right’ way. Global politicians decide the solution requires Global politicians shock news!

to endorse and implement the FSF’s tough new principles on pay and compensation and to support sustainable compensation schemes and the corporate social responsibility of all firms

Corporate Social Responsibilty. Would you like to know the name of a company that spent a great deal of money on CSR? It gave millions to charity, every year and promoted a culture of volunteering and community service in its staff. It gave to the local community, sponsoring local football teams and community programmes. It was carbon neutral. It paid legendary quantities of tax, had cutting edge equal opportunities and diversity policies. It had beyond generous sick pay entitlement, too. That company was called HBOS. Goes to show how useful CSR is. Corporate Social Responsibility is simply about putting private companies under the control of political will. 

In future, regulation must prevent excessive leverage and require buffers of resources to be built up in good times;

Ah, the benefit of hindsight.

to take action against non-cooperative jurisdictions, including tax havens. We stand ready to deploy sanctions to protect our public finances and financial systems.

Which to me says, “If there’s one area where protectionism is justified, it’s protecting our economy against low tax economies. With $1.1 trillion of tax to raise, we can no longer tolerate free and open competition between states if the competitive factor is tax. We simply can’t afford to lose.”

We will not repeat the historic mistakes of protectionism of previous eras….refrain from raising new barriers to investment or to trade in goods and services

The word that jumps out is “new”, don’t you think? 

In summary the whole document appears to be a confused mish-mash of protectionist rhetoric and Keynsian binging being sold as support for (intra-G20) free trade and condemnation of (extra-G20) protectionist measures. So this blog post picked out the more alarming statements, but that’s not to say that there’s not more to be concerned with, or in fact stuff that’s so empty that there’s nothing to be concerned about. Is there anything positive to take away from it? It doesn’t seem like it today. The fact that politicians still consider it useful to be ‘pro-free trade’ and ‘anti protectionism’ at least in terms of the way they describe their policies means there’s some some sanity left in this world. 

But I finish with the scariest word used in this entire document, the one that makes my heart sink:

We…

It’s not just Brown. That ‘we’ says doesn’t matter who you elect, who your Government is, this is what the world is doing. It says, to me, that the world leaders – all of whom face electoral disaster as a result of the recession – have agreed to stick together for their common good. ‘We’, in the context of the leaders of the 20 most powerful states in the world is truly chilling.