(Sent to The Spectator January 4th 2002 but unpublished)


Dear Sir

I notice that your paper treads the usual pragmatist path regarding the euro: to wait and see what happens. You also wait for a convincing argument in its favour. But these passive attitudes will not be enough to save sterling when the referendum comes. If you truly stand for the free market and the individual choices that make it up, then it is from these very principles that you must argue before it's too late.

The euro is fundamentally wrong for three reasons. Firstly because central banking, which should really be called state banking, prohibits private banks from operating according to their own rules and as such is a violation of free trade. Secondly because state banking invests politicians with potentially lethal control over the entire economy. By adjusting interest rates and the volume of money in an entire economy they can, and regularly do, destroy millions of people's hard earned wealth. This happened in Britain and the US in the 70s, also during the ERM fiasco, and now in Argentina. A government has no right to such power. Thirdly while state banking is wrong on any scale, at least without the euro there is competition between states to provide sound money. Without it, a state or superstate has no checks on its fiscal policies, until they cause the whole system to collapse.

The only reason for a European wide state bank is not a savoury one: it gives a handful of politicians the power to decide the financial fate of 300m people at a stroke. Surely it is a grave mistake to offer up 'one neck for one noose' as Ayn Rand put it.

Yours faithfully