In the days of Laffer Curves and Reaganomics our academic economists Tweedledee and Tweedledoubledee loved to talk of the Public Sector crowding out the Private Sector. You may have been a little hazy as to what this had to do with either the public or the private sector. You were not alone.

George Bernard Shaw refused to accept this dichotomy between public and private sectors, insisting instead on a threefold discrimination between Private Wealth, Common Wealth and Personal Possessions. Many of the economic views of the Founding Fabians...The Fabian Papers were published in 1884...were given academic respectability in the 1930s and 1940s by R.H.Tawney.

In the real world there are many forms of discrimination against the little firm. Money is misdirected away from small local investments by the power of Monetary Dispatronage. Crowding out is a trickle down phenomenon that strikes disproportionately at small microbusinesses within the private sector. When Commercial Banks cut back on loans and overdrafts thousands of little microbusinesses are sent to the wall so the bank can escape the spectacle of large corporate customers defaulting on their credit obligations.

These are the same large organisations who protect their own interests...in collusion with the private banks...by delaying payments to small businesses from 30 to 60 days and beyond thereby ensuring that microbusinesses are hit with the double whammy of credit restriction from the banks and balooning receivables because of non-payment by large companies.

If you are large enough to cause embarrassment to a bank's managing officers you can extend your overdraft to whatever level your accountants demand even though the extension of this one big overdraft might dissolve countless little ones. Here are other examples.

If you want to buy a car or a computer there will be financial intermediaries on hand to lend you money at zero interest rate with many months of payment holidays before the first repayment is due.

If you already own one property and want to invest in a Property Bubble by buying a second property and renting into a declining market borrowing a hundred thousand pounds for the privilege then you can get all the money you want at just a percent or two above the bank rate.

The explosion in property prices in England over the past few years has been driven by the Central Banking mechanism that compels their client Commercial Banks to issue money as a Debt at Interest mortgaged against Real Estate as Collateral. The end result is houses being built and property prices being driven up not by demand by householders for shelter but by the demands of the banking system for security against which to create money...and make profits for the bank's shareholders.

The stupidity of all this is that houses get built and countryside destroyed not because people need homes but because wages fail to put enough money into circulation and so individuals are forced back onto Equity Release as their only way to obtain money.

Residential and Commercial Property today has taken the place held by Gold in the Mercantile Era. But gold does not tarnish and is difficult to extract. Houses and office blocks are easy to build by comparison. And the only way to restrict supply is to ration the licensing of building...otherwise known as Planning Permission. But is it really necessary for half the buildings in the country to be occupied for one half of the day and the other half for the other half? Whither Property Prices when the Idiocy of Commuting is recognised and the habits of a lifetime changed as Ownwork increasingly displaces Jobwork...with a resulting doubling in the number of dwellable buildings?

You may well be charged much more to earn exorbitant profits for financial intermediaries but your failure to secure the best deal is part of a broader problem identified by the guru of self-sufficiency John Seymour in a brief aside in his 1961 classic The Fat of The Land. 'We never sell anything we produce,' he remarked. 'We discovered early that once you start trying to sell you enter a world of thieves and rogues and bounders in which you just cannot breathe. We wished to be included out of that world, please.' You might wish to be included out too.

But if you want ten thousand pounds to invest in a microbusiness with a three-year pay-back and a good healthy return over five years the best the banking fraternity will offer is Credit Card Debt at one and a half percent per month...many times the bank rate. Foregoing the money might be possible but some may have no other option.

These are all examples of Crowding-Out or the rather broader idea of Monetary Dispatronage. Money goes to the wrong people in the wrong place at the wrong time and in the wrong form and its distribution is only loosely related to risk & reward and almost completely unrelated to supply & demand.

Indeed if it relates to anything at all it relates to power and the misalignment of power between those who have spare money and those who are willing and able to use it...which brings us back to Tawney’s crucial distinction between Property and Improperty and between Working Capital & Idle Capital. To talk of Debt and Equity in these circumstances tends to obscure rather than enlighten. At the limit such talk is perverse.