Ridiculous German fine

C&A managers simply wanted to reduce the pressure on their cashiers, as they became accustomed to the new currency. For four days, credit-card transactions were accorded a 20% discount, and the changeover went extremely well. 

Dusseldorf Commercial Court struck straight away - remember that in Continental systems, judges themselves may take the investigatory initiative. The Dusseldorf Judge alleged that C&A broke the law because they offered a general discount for a limited period of time, and he held that was illegal. Aldi had offered discount terms too, but did not impose a specific time-limit, and thus escaped his censure. 

"Time-limited discounts", under German law, are permitted only for store closures, anniversaries, or "official" seasonal Sales.  The Euro-currency changeover was not covered by any of those exceptions - hence the fine. C&A have said they will appeal, but what a waste of time and money!  German shopping-hours are also tightly regulated, and have resisted all attempts at liberalisation.  These represent real constraints upon the buoyancy of the German economy, and (once the 22 September General Election is out of the way) they should be removed.

Performing Public Functions

I have always sensed that the role of "the Armed Forces" in modern society is more than military.  And this week has brought a real insight on that front, relevant to all socialists.  Two insights, to be precise.

In the United States, American Rivers turns out to be an environmental lobby group working on a bi-partisan basis in Congress, and attracting the support of the excellent Democrat Senator John McCain.  This week they published a dramatic Report entitled America's Most Endangered Rivers, 2002.  Nothing unusual there, river pollution is a common global concern. 

Unusual was the target of the Rivers Report - for it was the American military.  It turns out that all America's rivers are controlled by the US Army Corps of Engineers. part of the US Defense Department.  And the Corps is bitterly criticised for permitting destructive property development, neglecting environmental concerns and residential safety.  So: every river in America is controlled by a single national public agency - would you have guessed that?  I confess that I did not.

The other insight came from the UK, with this week's publication by the Government of future foot-and-mouth plans.  In future, the Army will be called in straight away, to manage the public health measures.  Deja vu?

Now: I have no principled objection to using the Army to perform such public service functions.  They are salaried public servants, discharging public functions which ought never to be privatised.  In America, it may well be that the use of the Army is politically more acceptable than expanding "civil service bureaucracy".  In the UK, the Army has an enviable reputation for good logistical management.

My concern is a different one.  Soldiers are conventionally soldiers, trained and skilled in the use of necessary force.  That is a vital role in society, and one which must be systematically cultivated.  Will they not ultimately find these civilian functions tiresome, and unchallenging?  Should we not be developing a proper national Civil Emergencies Force, staffed by dedicated public servants and motivated accordingly?

Profit Percentages

"Teenage scribblers" were City financial analysts, as described the former Chancellor Nigel Lawson, do you remember?  And I get similarly annoyed at ill-informed City comment, particularly from the pretentious young wafflers on BBC-TV.  

For example, as a former Barratt Managing Director for the London Region, I bridled at the FT's reception of their excellent profit figures, published in March.  They reported profits at 11.8% of turnover, which was dismissed by Scribbler Martin Dickson (who may or may not be a teenager) as "well below the industry best".  

What tosh!  Market forces consistently keep housebuilder's profits in the 10%/12% bracket.  Lucky breaks may generate higher profits occasionally, but can never be sustained.  That is because the principal cost is land, and in the development land market the price is constantly forced up to the maximum, particularly in the high-demand South-East.  If a housebuilder assumed profits of 20%, he would never be able to buy any land at all, and he would never get started!  The land market mechanism is extremely sophisticated, and has an entire profession (the Chartered Surveyors) devoted to its operation.  And for a large building programme like Barratts, 11.8% is an excellent performance.  

The converse is also true.  If a housebuilder slips below 10%, alarm bells should start ringing.  The housebuilding business is essentially a high-risk enterprise, which can be wrecked by sudden changes, for example, in interest rates.  It is no place for the unwary.