“You are just an accountant. I don’t pay you for the truth, I pay you for the figures I need.”
Transcript of DEA phone tap evidence in Government of Colombia Vs Baron Adelbert Gruner
CHAPTER 36 AN ECONOMIC LETTER
The Hon Charles Miles MP
House Of Commons
My Dear Charles.
As you may know I have recently made a TV series on the history of economics. My final programme may be of interest to you and the Haven group.
I begin the series with the French Physiocrat theorist Quesnay. It was his assumption that a farmer growing crops with his wife processing them for food represented the true productive economy. He believed that the miller or baker were unproductive and had somehow insinuated themselves between the farmer and his wife. In other words the miller and baker were sponging off the family.
It was Adam Smith who demonstrated that the baker and miller were actually adding value. So they were productive, and building biscuit factories could be looked on as a respectable undertaking. For most of the 19th and early twentieth centuries, manufacturing was looked on as the only form of wealth creation. Mere service industries like banking or insurance were believed to be sponging off the hard working manufacturies.
Then in the 1970's Bacon and Eltis showed that service industries could be considered productive if they were marketed. If people were prepared to pay for non industrial services, then they must be considered productive wealth creators acting for the national good.
In the 80's and 90's these theories led to the market testing of all the Governments departments to see if they were in fact usefully contributing to the national good, or just sponging off the tax payer. Much good has been done in reorganising the civil service and local government As soviet communism died it seemed that market testing must be the way ahead.
However it has escaped no ones attention that the Chinese mix of capitalism and communism is somehow outrunning our market led economy. So in my last programme I propose a new theory to account for this. We need to get beyond market testing and find a new method of moving the economic well being of the nation forward.
If we go back to Quesnay's farming family we could see that the farmer digging up his own potatoes would not be making a profit in the Adam Smith sense. But likewise he is not incurring a marketable cost in the Bacon and Eltis sense. He is in fact doing it himself for himself. The same would apply to a modern man making a set of shelves from junk. He has not added to the local economy by purchasing from a shop. But he has not cost his family anything and at the end of the day he is wealthier by one set of shelves.
I believe the same applies to a nation like China. The government builds the power and transport infrastructure and provides the manpower and raw materials, factory owners do the rest.
If the
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