So it is not surprising that in 2010 Philip Booth and myself (both connected to the Institute of Economic Affairs) wrote the book ?Does Britain need a Financial Regulator?? Our answer was no. And, which had previously been written on the IEA website, here’s the reason why: Until 1980, there had only been two life-insurance failures in more than 100 years in a largely unregulated market. Then came heavy regulation ? and a subsequent series of big failures? Meanwhile 100 or more government-appointed regulators scour the landscape looking for prey, seemingly in cahoots with journalists who are going after the insurers. Top level columnists at the Daily Telegraph have made references to ?ripping off customers? in buying annuities because their policies provide no facility for changing the rules in mid-stream. Yet the whole point of an annuity is that it does NOT change until the annuity holder(s) die. How could such an insurer provide a specific income to every annuitant, whilst ignoring the law of averages which enables annuities in the first place? Why is there not a familiar refrain with regard to life insurance? Surely commentators realise that these policies work both ways. The EU doesn?t help by insisting that annuity rates cannot ?discriminate? between women and men, even though women (on average) live significantly longer! Furthermore, those who peddle this nonsense seem to have no real understanding of private enterprise and the importance of fair dealing in market transactions. All the government does in this particular instance is get in the way. Genuine markets, free of government control, do not fail. Ill-educated politicians, and journalists who should know better, assume that without government control, markets develop into monopolies. This is a total myth ? not even John D Rockefeller, then operating in so-called Wild West conditions, could approach a monopoly. It is not possible under free-market conditions. Microsoft can?t do it any more than Sainsbury’s can. Yet governments no longer allow capitalists to operate in free market conditions. Unfortunately, most people in the UK don?t appreciate this. Over the years capitalism has morphed into fascism. The only monopolies are vested in government, yet the politicians pretend otherwise. Thus in late May 2014 George Osborne said that Business must speak up for the free market and trade, or risk seeing the country slide into an anti-business era of high taxes, regulation, and trade barriers. Unfortunately, that slide was achieved many moons ago ? shortly after the Second World War if not sooner. Fascism is the system of government that cartelizes the private sector, centrally plans the economy to subsidise favoured producers, exalts the police state as the source of order, denies fundamental rights and liberties to individuals, and makes the executive state the unlimited master of society. There is less understanding in the UK, but it was good to read in the Telegraph (Tuesday 17th edition) a suggestion from Lord Saatchi that the Conservatives should pledge to abolish corporation tax for small businesses to allow them to challenge cartel capitalism. Terry Arthur is an author of various books including ?Crap ? A guide to politics?. As well as Financial Regulation Fellow of Institute of Economic Affairs and a Fellow of the Adam Smith Institute, he played rugby for England in 1966.
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