I am a bit late to this debunking of a book called The Spirit Level, which I had seen on sale in paperback at a local bookshop. Via Kristian Niemietz – who writes at the IEA blog – I came across the essay attacking TSL’s contention that egalitarian societies – where wealth gaps are small – “almost always” outperform societies in which governments do not seek to equalise incomes.
I must admit that I nearly bought The Spirit Level to see if it did say anything of value, but it turns out to be yet another call for controls on our terrible materialism and consumerism, perhaps in the same vein as works such as “Affluenza”. Ugh.
Instapundit has just asked if, in the words at the top of the piece he links to, Israel will be the third nation on the moon.
Oh I hope so. I really do hope so.
I am an optimist, in the sense that I always want to be an optimist, which I suppose is what an optimist is. But of late, being an optimist has been very hard. This notion, even as a mere possibility, has cheered me up no end. The nearer it gets to actually happening, the happier I will be about it.
And the more all the right people, as in the deeply and repellently wrong people, will get angry.
I have noticed from some libertarians, such as “left libertarians” such as Roderick Long, a hostility to the idea of limited liability corporations. I understand and even sympathise with such opposition to statutory limited liability. It can and does foster corporate structures that become so unwieldy that they are indistinguishable from the State in key respects. But the key word to remember here is statutory. Consensual Limited Liability of a sort that can be arranged without an explicit statutory power is, in my view, no different from say, other consensual commercial transactions that are recognised in law, such as via Common Law. Of course, limited liability firms may be far less common under such a system but it is unwise to bet on it disappearing. And given all the benefits of limited liability: the ability to get large pools of investors to finance large ventures, it seems an issue worth examining in detail.
The reason some free marketeers, particularly of the more radical sort, get angry about limited liability is that they see ownership and control torn asunder, creating a serious misalignment of interests. Case in point being an argument made by Kevin Dowd and Martin Hutchinson, in their book that analyses the recent credit crunch, Alchemists of Loss. They take the view that listed banks, protected by limited liability, have, unlike old partnership-owned banks with unlimited liability, made dangerous bets. A problem that is, of course, made much worse by corporate welfare via bailouts, central bank funny money, the usual. In the same way, you could argue that limited liability companies in general exhibit negative behaviours when politics intrudes.
But one of the High Priests of libertarian capitalism, Murray Rothbard no less, made it clear that there is nothing in principle wrong with the idea of limited liability. His argument strikes me as pretty solid:
“Finally, the question may be raised: Are corporations themselves mere grants of monopoly privilege? Some advocates of the free market were persuaded to accept this view by Walter Lippmann’s The Good Society. It should be clear from previous discussion, however, that corporations are not at all monopolistic privileges; they are free associations of individuals pooling their capital. On the purely free market, such men would simply announce to their creditors that their liability is limited to the capital specifically invested in the corporation, and that beyond this their personal funds are not liable for debts, as they would be under a partnership arrangement. It then rests with the sellers and lenders to this corporation to decide whether or not they will transact business with it. If they do, then they proceed at their own risk. Thus, the government does not grant corporations a privilege of limited liability; anything announced and freely contracted for in advance is a right of a free individual, not a special privilege. It is not necessary that governments grant charters to corporations.”
Commenting on this Guardian article, someone called “weejonnie” says,
If you want to participate in the gross corporate profits why don’t you buy shares in the companies. Decide which ones are making far too much and invest in them.
Or has that gone over the average left-thinking person’s head?
Yes, it probably has. So spell it out. Tell the next person who makes this argument to you that since he is so sure that corporate profits are, as the original article puts it, soaring at the expense of homeowners, consumers and students, then there is no reason for him not to put his money where his mouth is. He can always give his new ill-gotten wealth away away to the poor students if it bothers him. If you get a bright one he might independently discover the concept of “risk”.
Computer modellers have long been accused of inventing extreme weather events at some deliberately vague point in the future. But here is an Australian story about how another kind of modelling invented extreme weather conditions at an exact moment in the recent past, that other forms of actual measurement didn’t register.
The claim by SEQWater in its official report that a “one-in-2000-year” rainfall event occurred over the Wivenhoe Dam at a critical stage on January 11 has been widely reported in the media and cited by senior public servants to justify the near loss of control of the dam at the time.
But no such rainfall event was measured by any rainfall gauges. Instead, the claim was manufactured by SEQWater after it modelled the rapid rise of levels in the dam, repositioned rainfall data to an area immediately upstream of the dam, and then doubled it.
After extrapolating in this unusual way to achieve an extreme number, the SEQWater report states: “Rainfall of this intensity and duration over the Wivenhoe Dam lake area at such a critical stage of a flood event was unprecedented.
“The resulting run-off could not be contained without transition to (an operating strategy that led to the operator opening the dam’s gate for huge releases).”
Senior independent engineer Michael O’Brien, who has spent the past nine weeks analysing the performance of the dam and SEQWater, said that while the rainfall was heavy, he did not believe it was extreme and he doubted it was ever close to the range claimed by the operator.
This is no mere academic spat. SEQW’s allegedly flawed decision making contributed hugely to the serious flooding that recently hit Queensland.
Mr O’Brien, who has mounted a strong case that the devastating floods in and near Brisbane would have been almost completely avoided with better management of the dam, said the one-in-2000-year event was an “invention” that could not be taken seriously.
The modelling-trumps-measurement vibe to all this is the reason that climate skeptics like Anthony Watts are already onto this.
Delingpole hasn’t yet had a gloat about it all, but doubtless he will, because this just begs to be amplified into a big story, of the sort that the world’s Old School Media will either run with, or make further climate-prats of themselves by ignoring.
I used to hold fairly high hopes about Nick Cohen, who had the courage to tell his leftist friends a few home truths about the sheer madness of their consorting – in the case of the hard left – with radical Islamists. He does not adopt the default “Blame America First” line on issues such as, say, Iraq, or for that matter, events in the Balkans. In the very big scheme of things, he’s one of the good guys, in my opinion. The trouble is that he is still a big government leftie; for him, the reductions in spending by this government, which are not that much more than envisaged by former UK (Labour) Chancellor Alisdair Darling, are wicked. Oh well.
He attended the protests against the UK government’s supposed “cuts” on Saturday (the sneer quotes are there because it is not clear that government spending as a share of GDP will actually shrink). Before I return to his comments against the “cuts”, here is what he said about the kind of folk causing a tear-up in the West End:
The folly of ignoring or indulging the far left becomes apparent as soon as you realise that the similarities between the SWP and the BNP are more important than the differences. Both are hysterical totalitarian organisations that love vicious rhetoric and promote anti-Semites. The left wing press and the BBC will never acknowledge the overlap between fascism and communism, because they fear accusations of “betrayal,” and have a mental block that prevents them accepting that evil resides on the left as well as the right of British politics. As a point of contrast, imagine how they would react if the BNP hijacked a Countryside Alliance march. The Today programme would have had a nervous breakdown on live radio.
Quite so. All we have to do now is get Mr Cohen to give up on the nonsense of this Keynesian idea that cutting public spending – and hence debt – somehow reduces “demand” in the economy. Given that a large chunk of tax revenues are gobbled up on debt interest payments alone, it seems fairly good public finance to make an adjustment. Cohen and others would do well to realise that Britain’s public finances were on their way to ruin long before anyone had heard of sub-prime mortgages, collateralised debt obligations, or for that matter, Ben Bernanke.
As an aside, I was in Piccadilly on my way to a meeting yesterday, and could see some fairly extensive damage to shops, banks, etc. Well done guys.
Well, well. This will get some luvvies in a tizz: I knew a bit about the life and times of the great, late Liz Taylor, much-married Hollywood actress and drop-dead gorgeous to boot (those violet eyes, ye gods). But I was not aware that she was such a keen supporter of Israel. . She was definitely not of the “Michael Moore school” of Hollywood.
Somewhere up there, she’s having a glass of bubbly with Richard Burton. RIP.
Mark Steyn has been in London, and although his visit has coincided with truly wonderful weather – I have spent a great afternoon with my wife and friends eating good food on the side of the Thames in Richmond – it has also been a time of protest:
“In a democracy, there are not many easy ways back from insane levels of “social” spending, and certainly not when the leader of Her Majesty’s Loyal Opposition panders to the mob by comparing them to anti-apartheid activists. Judging from the many marchers partial to robotic, pseudo-ethnic West African drumming, the British left’s plan is presumably for the entire country to relaunch itself as the world’s least rhythmic percussion ensemble.”
This denial of reality is everywhere. Consider this YouTube spot featuring Mark Littlewood, head honcho of the Institute of Economic Affairs (and a friend of mine) alongside some hard-leftist type who regards the mass protests yesterday as an example of the Labour movement “striking back”. As far as this guy is concerned, our national debt is relatively low (seriously), we can, somehow or other, grow our way out of any problems that might exist, etc. In fairness to the BBC interviewer, she did not let this guy make these points without challenge and I thought Mark acquitted himself well. A good, perhaps “soft” point to make here, as Mark did, is the “think of the children” angle. The protesters who want to protect final-salary public pensions, vast numbers of state jobs, etc, are choosing to do so regardless of the debt being loaded on the shoulders of future generations. And in their adolescent fantasies, they imagine that all the mess can be somehow put right by taxing the evil rich bankers. There is, in this worldview, a pot of gold at the end of the proverbial rainbow, usually located in a tax haven. But what these folk don’t seen to understand, or perhaps, don’t want to understand, is that taxing banks even more means lower savings rates, higher borrowing charges, worse service, lower investments. If we drive sources of capital away, as happened in the 1970s, then does this young activist really believe that will benefit the more vulnerable people in this country in the medium-term? I suspect he either does not care or imagines that somehow, something will turn up.
This mindset does not come out of thin air. The activist was trotting out the standard, dreary line about how all the things he imagines are good (and I regard as thoroughly bad), such as comprehensive state schooling, socialised medicine and Big Government, arose even when Britain was broke after WW2. Arguably, these developments ensured we stayed thoroughly broke, right up until the 1970s when the UK was, humiliatingly, bailed out by the IMF. As Mrs Thatcher said, in the end, socialists always run out of other people’s money.
A difficulty for any government is that once the drug of state dependency has been created, it is a long, hard road back to sanity. I don’t like this government, which is hardly close to my own classical liberal worldview, but some measure of credit is due here. A larger chunk of voters than is perhaps realised have no conception of self reliance, independence, or a desire for said.
Many voters have been clients of the state all their lives; changing that will be enormously difficult. Whole cities, such as in the north of the UK and pockets elsewhere, derive the bulk of their incomes from taxpayers in the more prosperous parts of the UK. Londoners are a fairly stoical lot, but we are getting a bit tired of folk coming to the capital, trashing it, and demanding that this evil den of capitalism should go on providing them with the lifestyle to which they think they are entitled. Maybe London should declare itself an independent state and we’ll see how well the rest of the UK can cope without this high finance. The Atlas Shrugged narrative continues.
Independence for London. Hmm, there have been worse slogans.
Every day is Earth Day in North Korea
– Samizdata commenter ‘newrouter’
It is 8:30 pm in London and ‘Earth Day’ has begun. Every single light in our house and garden have now been turned on.
Big demo against the cuts in London today! Takes me back, that does. Maggie, maggie, maggie, OUT OUT OUT!
Simon Jenkins says British demonstrations scarcely ever achieve their aims. I think they often do. Not always quickly, not always directly, and the aims achieved are not always good, but the clue to the effectiveness of demonstrations is in the name. The demonstration demonstrates that there are enough people who care enough about some issue to fill up in Trafalgar Square. They vote, thinks the politician. Not that he panics; he knows that there are other voters shouting or yawning at their televisions as they show pictures of the Trafalgar Square lot, but the highly visible existence of this big shouty bundle of single-issue votiness seeps into his mind and affects his decisions, irrespective of whether he likes them or loathes them.
On the other hand, sometimes the demonstration demonstrates that there are not enough people who care about your issue to fill up Trafalgar Square. (There will be today; I speak in general terms.) If the mainstream media like your cause they will do their very best to help by means of what I think of as the squat shot. That’s when the cameraman squats on the ground and points the camera upwards so that the shot shows only bodies and not the tell-tale large areas of empty pavement between and around the marching feet. (Added later: however eventually, the use of this low-angle crowd-shot becomes a signal to alert observers that attendance was low, and the subject of ridicule. The BBC have wised up and reined back on its use in the last few years.)
And sometimes – in fact ofttimes – the demonstration demonstrates that quite a lot of your supporters are not very nice. The blogger Zombietime went to many anti-war demonstrations in the US while G W Bush was president and quietly snapped away. One of the results was this record of the signs calling for Bush to be assassinated. Here in Britain the student demonstrators against tuition fees did not endear themselves to the public by the fact that one or two of their number were photographed hurling fire extinguishers from the top of buildings or hanging from the flag commemorating the war dead at the Cenotaph. I sympathise with the demonstration organisers in these cases: they did not condone these actions – but like the scorpion in the fable who could not help but sting even at the cost of his own life, demonstrations cannot help but demonstrate something. You asked the public to watch and judge your cause by the people you assembled, and they will.
As will your own people. The demonstrations I went to in the 70s and 80s have merged in memory. Was it at the CND one, or the anti-NF one, or one against changes to the immigration laws where I saw the collection bucket being passed round for the IRA? The bucket filled up slowly, I’ll say that much for my fellow demonstrators, but it was not empty. At all of them I picked up piles of mimeographed leaflets that I now wish I had kept. They were revealing. They were insane. I realised that Searchlight, for instance, who I had thought of as just an anti-fascist group were very left wing indeed. Most of all I remember the posters. Three quarters of the posters, and almost all of the printed ones, were produced by the Socialist Workers Party. Busy little bees, they were. They still are: it is an astonishing fact that this tiny and fissiparous Trotskyist sect has twice dominated massive popular protest movements in my lifetime; the Anti-Nazi League / Rock against Racism movement of the 80s and the Stop The War Coalition of 2001-2008. Sorry, 2001-present, only they stop wars much more quietly now that Mr Obama is president. They were also big in CND.
Most demonstrators back then avoided carrying SWP posters. But it was difficult to refuse if someone asked nicely, so ordinary non-SWP people did end up walking for miles with an embarrassing commie placard thinking, how the hell did I end up doing this and I’m not doing it again. I suspect this will happen today as it did in the 80s.
The problem with demonstrators being turned off by weird extremist literature and weird extremist fellow attendees is not confined to causes that I dislike – even if part of the reason I now dislike them is that I was turned off by the weird literature and people. I sympathised with, although I did not attend, the big demonstration in 2002 against the hunting ban. My husband picked up a BNP leaflet for me while he was there because he had heard earlier verbal versions of the reminiscences about extremists at demonstrations that form much of this post. It depressed me that the originators of the leaflet were probably right in seeing that demonstration as a good opportunity to shift their stuff. One good thing, the leaflet had a picture of a squirrel on it. The good here is not the squirrel per se, fond as I am of the tree-rats, but at least they felt the need to hide behind cuddly things.
Oh yeah, another thing to avoid is having the same demo at regular intervals. Lie all you like about numbers, the media will help you if you are left wing, but when like for like comparisons can be made, decline will out. A left wing writer said in 2003:
The SWP’s main priority is recruitment. Why else did it continually call demonstrations week after week during the Iraq conflict? This was a big tactical error for the anti-war movement. When the bombing started, many people felt dispirited and tired, but were organising and carrying out further actions and protests. More importantly, the SWP had not realised that many people on the enormous demonstration in February were there because they felt they had been denied a democratic voice. These demonstrations were bound to result in diminishing numbers – and many were bound to judge that as the collapse of the anti-war movement.
Innovative forms of demonstration like Earth Hour (today, apparently) replace the crowd in Trafalgar square with the crowd at home doing something that shows up somehow. This avoids the “embarrassing supporter” problem and the “clashes with the other big demo” problem. However having a metric for your demonstration that is easier to count than crowd size, and having it as a regular event, makes this type of demonstration particularly vulnerable to the cold wind of comparison to last year. The better they do one year, and the more their success is hyped up, the tougher the target for next year.
I left this comment over at this particularly bad article at American Conservative, a sort of ultra-paleocon publication, as it was flagged up in the Arts & Letters Daily aggregator site. The AC article made various, and in my view foolishly wronghead, comments about Adam Smith, while neglecting to mention other aspects of his ideas, or mistakes, such as his mistaken attachment to a form of the labour theory of value (admittedly a mistake made by other classical economists and not really sorted out until the marginalist revolution of the late 19th Century). I note that Philip Salter, of the Adam Smith Institute, left a comment. Here is mine, which I thought I would republish here.
“Philip Salter has nicely rebutted many of the points of this remarkably bad article. But I would add this point to the argument, made here, that somehow there is a case for protectionism in giving “infant” industries a chance to get off the ground. It is sometimes argued that in the case of some of the “Asian Tigers” – Japan, Taiwan, South Korea, etc – that this is what happened. That is far too glib. Sure, some of these countries practised protection, but then again, as Philip Salter said, Hong Kong did not. Also, many African nations, which on a per capita basis were richer than Asia in 1945, often used subsidies, tariffs, quotas and many other restrictions, and those countries have been largely overtaken by Asia.”
For a good debunking of the whole “infant protectionist” argument, I recommend this article by R. E. Baldwin: “The Case Against Infant Industry Tariff Protection”; Journal of Political Economy 77 (May/June) 295-305, as cited on page 41 of “Reviving the Invisible Hand: The Case for Classical Liberalism in the 21st Century, by Deepak Lal. I suggest readers of this website study that book, if only to guard against the kind of nonsense that this publication has chosen to publish. In the meantime, I commend PJ O’Rourke’s recent excellent, and typically witty, study of Adam Smith.