My earlier piece on Football Fascism over at Business and Politics caught quite a lot of attention.

So, here is some more, exporing the strange collectivism of Michel Platini:

“I am not a financier, but I have a financial philosophy, which is that you cannot spend more than you generate…”

Zut.

What you can ‘generate’ is determined by all sorts of things, including your attitude to risk and your and others’ assessment of how smart and effective you are.

Platini sounds like a lumpen Gallic romantic extolling the humble virtues of the French farmer, living modestly but well off his soil and toil. Oh, except that the EU’s CAP sploshes financial fertiliser paid for by others over the whole landscape, allowing French farmers to spend far more than they ‘generate’.

Of course Platini is right to point to the dire effects which sustained stupidity can have on football clubs. Sustained stupidity in fact can have dire effects anywhere. Funny that.

He’s just wrong about what to do about it.

Laying on ever-more ‘regulations’ means taking responsibility and moral accountability away from clubs and private citizens, and handing it over to illiberal French/UEFA control-freaks.

“Oh”, you cry. “You’re heartless. You have no feelings! Surely we have to feel sorry for ‘the loyal fans’ when a club goes bust.”

No, we don’t.

Football fans! It is a good thing if a club goes bust now and again.

Clubs are private institutions, living off their wits. When one goes bust, this sends all the right signals to everyone else – including you – to behave responsibly in the future. Don’t be naive – don’t waste your money supporting a bunch of feckless fatheads.

And above all, don’t vote in the coming UK elections for parties who run around promising that the state will fix anything and everything which has a problem.

As the spectacular example of Greece and the Eurozone shows, piling up elaborate, compulsory, collectivist rules detached from private honesty only creates illusion.

And makes the ultimate crash even more horrible.

Come on you Spurs.

This promoted Jeremy Jacobs to argue in a comment that football clubs play important roles in the community and so need ‘proper central and local government support’.

To which I have responded:

We are stuck in a paradigm which emerged thousands of years ago, as an answer to a primitive information deficit problem: how to organise collective action?

The answer emerged: strong central power (king, emperor, tsar, warlord, church) using force to extract resources from the masses. If they don’t pay up, whip them!

This latterly takes the form of paternalistic (and, even creepier, maternalistic) liberal fascism. The collective is the state. The state is the collective. Whatever. The State Knows Best…

I quote from this superb analysis by Russell Roberts which painstakingly expores how in recent decades the State has skewed attitudes to private risk taking and created the shambles we see now (Warning! Only for grown-up readers):

An unpleasant but unavoidable conclusion of this paper is that Wall Street was (and remains) a giant government-sanctioned Ponzi scheme. Homebuyers borrowed money from lenders who got their money from Fannie Mae, Freddie Mac, and banks that borrowed money from investors who expected to be reimbursed by the politicians who took that money from taxpayers.

Almost everyone made money from this deal except the group left holding the bag—the taxpayers. There is an old saying in poker: If you don’t know who the sucker is at the table, it’s probably you.

We are the suckers. And most of us didn’t even know we were sitting at the table.

Many people have placed the current mess at the doorstep of capitalism. But Milton Friedman liked to point out that capitalism is a profit and loss system. The profits encourage risk-taking. The losses encourage prudence.

Government policies have made too many markets one-sided. Because of implicit government guarantees, the gains were private and the losses were public. The policies allowed people to gamble with other people’s money, and by rescuing the creditors of Fannie Mae, Freddie Mac, Bear Stearns, AIG, Merrill Lynch, and others, policy makers have further weakened the natural restraints of the profit and loss system. This isn’t capitalism—it is crony capitalism.

He has some answers:

Rescuing rich people from the consequences of their decisions with money coming from average Americans is bad for democracy. It is bad for democracy because the Fed and the Treasury are spending trillions of dollars of taxpayer money with very little accountability or transparency. It’s bad for democracy because it means that some people have to live with the consequences of their decisions while others get rescued.

That in turn creates a very destructive feedback loop of rent seeking, where losers seek government help after the fact rather than making careful decisions before the fact…

Milton Friedman once observed that people mistakenly believe that electing the right people is the key to better public policy. “It’s nice to elect the right people,” he said, “but that isn’t the way you solve things. The way you solve things is to make it politically profitable for the wrong people to do the right things.”

To do that, we, the people, have to favor a different philosophy for the relationship between Washington and Wall Street than the one we have now. We have to favor a relationship where there is both profit and loss.

Brilliant.