The National newspaper in Scotland has been running what I think to be a very important series on the threats posed by freeports during the course of this week.
I have made my own contribution to this series in an article in which I describe freeports as having all the characteristics of tax havens. My argument is multifaceted, but does in the first instance address the economic fallacies that underpin the argument for freeports, saying:
The narratives that the proponents of [freeports] use is always alluring. They are, however, always based upon the idea that freedom from regulation and taxation is the foundation for prosperity. This is total nonsense.
It is not chance that the most taxed and regulated countries in the world are all also the most prosperous, but that is always the case, most especially if we take the more obvious tax havens like Luxembourg, Ireland, the Netherlands, and the Cayman Islands out of consideration.
It is also very obviously true, on the basis of even the most superficial observation, that those countries with low levels of taxation and regulation are almost always associated with high levels of crime, low levels of income for the population as a whole, unstable government, and corruption.
Regulation and the taxation that supports it are necessary. Without them, world trade competes without rules, and mayhem results.
A sporting analogy helps here. As we all know, every sport is dependent upon rules and regulations. Sporting competition only exists because there are umpires, referees, and others to monitor compliance with those rules.
Markets are the same. They, too, require regulation, but the whole logic of freeports is to pretend otherwise. They try to create artificial advantages for one team over all others as if your favourite team could always play with 12 people on the pitch when opponents were restricted to 11. Rigging the rules does not help competition. It destroys it.
One of the commonalities that I have always found present amongst those who have advanced tax haven activity is that, without exception, they say they want to promote free market activity whilst at the same time seeking to the undermine compliance with all the conditions that must apply if free market activity is to be beneficial to society as a whole, based upon the theories to which they say they subscribe.
The whole basis of a genuine belief in the virtue of markets is dependent upon those markets not being rigged, and upon the rules that they impose being complied with. Even in his more extreme moments, Milton Friedman always made this point.
The modern proponents of freeports and tax havens, and all other forms of regulatory abuse, have no interest in following Friedman's suggestion. That is because they are not in the slightest way entrepreneurial, and have little or no understanding of what it really means to be free market operators. They are instead only interested in ways in which they can manipulate regulations to extract profits from markets at cost to society at large. That is the single reason for the existence of freeports and precisely why all governments should reject their existence since they represent a threat to their populations as a whole.
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Let’s be clear. The proponents of Free Ports know exactly what will happen… and it supports their agenda.
As Free Ports suck economic activity away from the rest of the country their hope is that the clamour will be more more and more free ports until our whole nation is a Free Port – “Free” to be exploited for narrow gain at the expense of citizens that become sicker, less well educated, more poorly housed as they lead ever more precarious lives.
It has always struck me, too, that if Freeports are such a good idea what’s the logic of only applying them to part of the country? It’s surely inevitable that those who are pushing the idea are eyeing the possibility of “freeporting” the UK. Then we really would be back to serfdom.
We’ve seen what free trade does to the water companies. Shareholders take the money, polite our rivers, raise prices, and they still seek a public bail out.
I spoke to my local councillor (Green Party) about Freeports and SEZs in our area. He said if the Council pulls out it will bankrupt them so they are getting green type companies involved. So far they have successfully got two. The outgoing Tory council stitched up the new one.
If these Freeports are rammed through by the Tories in the last throes of their asset stripping agenda, can they later have Freeport status removed by an enlightened Government? In other words, are Freeports a one way immovable regression that the UK public just have to suck-up no matter who they vote for in future elections? Of course that will require those candidates who genuinely care about the wellbeing of the population to get enough seats in the next parliament to have the power to modify a reckless Labour government intent on more of the same asset stripping agenda. Is another future possible?
The problem with reversing any grant iof a freeport is in the cost of cancelling related contracts
This is my worry for Scotland, a small country with three large Freeports in the making. I see it being the wrong move at a time when we’re (possibly) on the cusp of becoming independent.
Our bright future scuppered by self interested elites.
One only needs to examine what Houchen and his pals have done in Teeside to see how this goes. I hope Houchen loses the mayorality, especially since Green/Lab are cooperating to that end.
Freeports, public private partnerships,42 Integrated care systems in health, multi stakeholder systems, all being put in place by this feral government.