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Sod the European Union and loss of sovereignty. News arrives this morning that two state owned investment funds - The China Development Bank and Temasek, the investment arm of the Singaporean government, have between them taken a 10% plus stake in Barclays Bank.

Now, there's nothing new, or inherently threatening, about overseas money investing in UK companies, but in this case there are two issues.

First, these funds (as with the Qatari bid for Sainsbury's last week) are themselves so wealthy because of state protectionism. China in particular is not operating on the same economic "rules" as most of the west, what with pegged exchange rates and state control of assets generating this cash.

Second, Barclays is a bank, and as such in an incredibly privileged position. It is part of a cartel of a few organisations that effectively have the ability to create our money. A few choice quotes should suffice to show how awkward this could be...

Reginald McKenna, Liberal Chancellor of the Exchequer in 1915 and later Chairman of the Midland Bank, at the time the world's largest bank:

"I am afraid that ordinary citizens will not like to be told that the banks can, and do, create and destroy money. And they who control the credit of the nation direct the policy of governments, and hold in the hollow of their hands the destiny of the people."

Meyer Amschel Rothschild:

"Give me control of a nation's money and I care not who makes the laws."

Robert Hemphill (a director of the Federal reserve Bank of Atlanta in the 1930s):

"This is a staggering thought. We are completely dependent on the commercial Banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the Banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon."

Franklin D Roosevelt:

"The real truth of the matter is, as you and I know, that a financial element in the large centers has owned the government of the U.S. since the days of Andrew Jackson."

It's not that there should not be overseas investors in our commercial banks and so on. But that our commercial banks should not have the ability to create fiat money on their own initiative but in our name. We must either privatize the money supply or nationalize it - but if we allow other governments to take over the function through acquisition we can forget worrying about losing sovereignty to the EU and other such arguments, we will have handed real sovereignty, through control of our money supply, to foreign governments.

Technorati Tags: fiat money, monetary reform

I was at the Not-the-first-hustings yesterday at the South Central Conference at Newbury and was impressed by both Nick Clegg and Chris Huhne. I saw nothing to make me change my loyalties away from Chris, but one thing in particular Nick said (twice at least) was worth flagging up I thought.

I think the first reference was in his speech when talking about how to re-engage voters in an era when so many people say "what does government matter when the global conglomerates have all the power" he seemed to say that government should seek to control (as in rein in not own I presume) big business. Then again, when one of the questions was about how to sell Europe, he suggested that one of the benefits of Europe was the ability of governments to club together to control such global corporations.

I'm don't recall whether these were the only references to what one might call "economic" policy but they stuck in my mind because, whilst the media seem to talk about Nick being on the "economic liberal" (code for "right wing" in the economically illiterate media) part of the party, these are the sort of anti-corporate slogans that characterize Caroline Lucas or Naomi Klein more than they would Milton Friedman. Further, in reference to his past role as an EU trade negotiator, he seemed to believe that this in fact meant Euro-protectionism rather than freeing global trade.

On the other hand, Chris, who I think it is generally accepted is more grounded in economic theory, cited yesterday Hobhouse and the early twentieth century liberal reformers as his heros and today on Andrew Marr's program Lloyd-George. These guys knew all about the best mechanisms for helping the poor working classes - free trade and anti-monopoly.

I can't say whether Chris shares my view that the welfare state as conceived by these reformers was a necessary but essentially temporary measure only needed in an economic system that favoured the land-owner, capitalist and banker. But as a land value taxer, I would identify Chris with an "economic liberalism" that in a sense supersedes what many call "social liberalism". That believes that if we get the economic system more equitable, by reducing protectionism and monopolistic advantage, we create greater opportunity for the "little guy" than we can do by state led intervention in people's lives and wealth and consequently need a smaller safety net as a result.

Economic liberalism is "of the left" not the right. Its aim is to break the class and wealth based advantages enjoyed by the privileged and give the working person a greater share of the value of his or her production. Chris, I think, understands this. But Nick does not seem to be the "economic liberal" the press portrays him as, at least judging by those comments yesterday, but rather takes a protectionist and interventionist stance. A position which also has a big following in our party to be sure; this is not a value judgement, but it is a position I do not personally support (any longer).

All it goes to show really is that we cannot put any credence on the media who mischaracterize "economic liberalism" as something of the right and "social liberalism" as something of the left, and, having failed to understand either put our two candidates in those false categories. Nick might be on the "right" in the sense that he is apparently a protectionist, but it's not the sort of "right" the meedja seem to understand!

...is that it always seems that the first steps towards it, the first things to be cut away from the protectionism ridden form of capitalism we have now, hurt the small person more than the big person. If the "average Joe" (and no, it's just a phrase, not meant for you Joe O or Joe T!) cannot see the benefits to them of peeling away layers of protectionism and bureaucracy why would they support removing the state's comfort blanket?

Much of what we remember about Thatcher era attempts to roll back the economic power of the state, for example, centers around mining and industrial communities with their "hearts ripped out" and of the "haves" becoming the "have mores" through privatisation whilst those often for whom the state industry had been the economic lifeline were cut off. Or of the rise of the oligarchs in Russia, leeching off the common property of the people of that country in the form of its natural wealth.

Which is why economic liberals must strive to show that the root cause of the grossest inequalities we see in the world around us is that the rich and powerful are, as often as not, made so and maintained by protectionism and monopoly. Then when we act, unlike in the Thatcher era, we must be clear that each step we take strikes directly at that privilege and produces a perceptible incremental and preferably material rather than hypothetical benefit to those whom the existence of that privilege has hitherto harmed.

Our Liberal forebears knew this, hence the urgency with which they attempted to go about radical change, attacking monopoly and protectionist created wealth, in the People's Budget. It must be equally obvious with hindsight that the failure to drive through the most radical of those proposals left the way open for the Labour party to sneak in and push socialist, statist, coercive rather than liberal means to what they claimed were the same ends. Those means we now know have failed and continue to fail wherever they are tried. And not only that but they do not have the saving grace of freeing people from that other gross dependency on the state and the political establishment.

This is the main task for our shared liberal future - and it looks like 70% of us might just agree.

A conversation got me thinking; what is it we seek to control through drugs laws? Is it the substance in question itself, as the system for enforcement would have it - since it prohibits specific substances. Is it the effects of taking certain substances? And if so, is it the health effects, the social effects or the immediate short term effects of taking those substances?

It seems to me that the latter, the short term usually neurological effects that people seek, are mostly benign. People don't do drugs in order to hurt themselves, to bring on short term pain, usually, but in order to give them a particular desirable feeling - often of wellbeing, escape from some painful reality, sometimes of added confidence, at other times of empathy for others, sometimes merely relaxation, or extra energy. All these seem like legitimate feelings and effects for people to want to seek. And sure, they can be gained by all sorts of ways other than by taking drugs - though possibly with more difficulty and less convenience.

But is it actually immoral to take substances to achieve such ends? Clearly not, as many legal substances can do the same things and we don't necessarily proscribe chocolate (the theobromides - poisonous to dogs for example - promote wellbeing), coffee (the caffeine is the most commonly used stimulant on earth) or St John's Wort (an ancient treatment for depression, possibly an "over the counter" SSRI). Heck, humanity might not have survived so long without the supposed aphrodisiac effects of many natural and often exotic foodstuffs and supplements.

Anyway, the point is that we put all sorts of things, natural and synthetic, from oysters to Horlicks, into our bodies in an attempt to achieve certain feelings. And there are "chemists" out there, a whole industry, constantly trying to reproduce some of the effects of illegal substances without actually using any illegal substances. The science will likely always be one step ahead of the legislators, so I have no doubt that these concoctions are achieving more than a placebo effect. You can buy them on the internet for next day delivery from online stores that have forums that people join to say how much they enjoyed them or not. Just like eBay or Tesco online.

But whilst they may be legal, are they safe? They certainly don't have much of a regulatory framework or testing regime to prove themselves. Yet they are legal when many proscribed drugs have had centuries, even millennia of use for us to examine for evidence about their safety.

Why is heroin so intrinsically bad when common lore at least says that our longest reigning monarch to date ran the empire on an opium concoction; even a Roman emperor kept the northern Germanic tribes at bay whilst writing a classic tome about his predecessors while taking opium. Tales tell of how the first president of the United States kept himself in balance with cannabis and that the slavery campaigner William Wilberforce similarly emancipated half the world while toking. Some of our greatest poets seem to have had a penchant for mind-bending substances - would we have denied the world their art worried about what they may have been taking when producing it? And, just as today, throughout history there have been chemists, alchemists, trying to find such things as the elixir of youth.

So on the one hand we have all these relatively natural substances - opium, cannabis, coca, certain fungi and so on - used for millennia and with relatively well researched evidence about their effectiveness, the dosages at which they are safe (from experience if nothing else) and the circumstances in which they may not be, and they are illegal. Even the main active ingredients in some synthesized drugs like ecstasy have a hundred year history since it was patented my Merck and has been tested off and on for different uses - a drug waiting for something to cure! On the other we have perfectly legal concoctions, though nobody but the creator and I suppose a DEA investigator if they wanted to check, knows what's in them, they have little research history and for all we know they might be toilet cleaner and arsenic.

The devil you know, versus the devil you don't? I know which I would consider safer. Drugs laws are pointless. They criminalize the wrong people. And in the process drive the whole thing underground into a system controlled by organized crime - killing far more people in that process, from failed narco-states to street gangs in Manchester or London. And that criminalization makes it all the harder for people to seek help or even to be open about their use, often until it's too late. We know it would be possible to maintain a fairly humdrum ordinary existence even addicted to opium if it were available, regulated and quality controlled, for before the Harrison narcotics acts in the US that started the "war on drugs" we know that the preponderance of addicts were white upper and upper middle class women, like Queen Victoria mentioned above. We don't know that about the toilet cleaner and arsenic concoction deemed legal - albeit by default probably - and I think I know what I would rather my friends and family were taking if they were that way inclined.

When reputable science puts ecstasy nearly twenty places below alcohol and tobacco in the list of the most harmful substances and yet its supply can get you a life sentence who do we think these laws are serving?