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Antoine Clarke on the boom and bust in French private investment in pre-revolutionary Russia

About a month ago, I was at the Institute of Economic Affairs to hear a talk given by Antoine Clarke to the End of the World Club. The audience was larger than usual, and of a very high quality. It listened, fascinated and engrossed, and with some rueful laughter at the intense relevance of a seemingly rather obscure slice of history to our own times.

The talk was about French investment, private but egged on by French politicians for their own foreign policy reasons, in pre-revolutionary Russia. This investment was huge, and for a while it provided a healthy income to French savers, by French standards. But then, because of events which the French media of the time somehow neglected to inform their readers about, it all started to go wrong, and wronger and wronger, and then of course very wrong indeed. Collusion and corruption on a huge scale among and between politicians, bankers and journalists is not, said Antoine, anything new.

Antoine has now gathered his spoken thoughts from that night into a blog posting at the Cobden Centre.

Quote:

The first Russian bonds sold in France were in 1867 to finance a railroad. Others followed, notably in 1888. At this point the French government decided on a policy of alliance with Russia and the encouragement of French savers to invest in Russian infrastructure. From 1887 to 1913, 3.5% of the French Gross National Product is invested in Russia alone. This amounted to a quarter of all foreign investment by French private citizens. That’s a savings ratio (14% in external investment alone) we wouldn’t mind seeing in the UK today!

A massive media campaign promoting Russia as a future economic giant (a bit like China in recent years) was pushed by politicians. Meanwhile French banks found they could make enormous amounts of commission from Russian bonds: in this period, the Credit Lyonnais makes 30% of its profits from its commission for selling the bonds.

In 1897, the ruble is linked to gold. The French government guarantees its citizens against any default. The Paris Stock Exchange takes listings for, among others: Banque russo-asiatique, la Banque de commerce de Sibérie, les usines Stoll, les Wagons de Petrograd.

The first signs of trouble come in 1905, with the post-Russo-Japanese War revolution. A provisional government announced a default of foreign bonds, but this isn’t reported in the French mainstream media or the French banks that continue to sell (mis-sell?).

During the First World War, the French government issued zero interest bonds to cover the Russian government’s loan repayment, with an agreement to sort out the problem after the war. However, in December 1917, Lenin announced the repudiation of Tsarist debts.

Boom, bust. And surprise surprise, French governments of the twentieth century were neither willing nor able to provide anything like the kind of compensation for disappointed French savers that had earlier been promised.

Antoine Clarke is fluently English thanks to his English father and fluently French thanks to his French mother, and he has lived and worked in both countries. As long as I have known him I have urged him to make maximum use of this bilingualism, in connecting us Anglo libertarians to French stories and writings, and vice versa. This talk and his subsequent written version of it is a perfect example of the sort of thing I had in mind, and I thank and congratulate him for it. How many non-French libertarians already knew this story? Some, certainly, a bit, but certainly not me.

Taking a ride in an Uber taxi

It’s one thing to read a Guardian piece complaining about Uber. That certainly makes Uber seem like a fine thing, but you can’t trust everything you read, can you? Maybe Uber is not actually as great as the Guardian is making it appear. Last Friday evening, a week ago, by a lucky chance, I went one better. I had an actual trip in an Uber-taxi. It was a good experience.

Rooted as I am in the twentieth century, I was not the one who set this journey in motion. The man who did was my twenty first century friend Rob, who is as computer-savvy as I am computer challenged. I and Rob were guests at a dinner party, and I heard that he and another guest had some kind of lift home fixed, going back towards central London, and I asked if I could join in. Yes, fine. I then rather delayed things by taking what turned out to be rather too long to do my thankyous and fairwells, because, basically, I am not used to taxis being this fast in answering the call. But, eventually I was aboard, and off we went.

It was only when I was in it that I learned that this was one of these new-fangled Uber taxis, this being why it had arrived so quickly to pick us up and why I should have been quicker off the mark when leaving the party.

What Rob had done, as soon as he and the other guest decided they needed to be off home, was crank up the Uber app on his smartphone and summon – and here’s the point of this system – the nearest Uber taxi, by looking for blobs on his smartphone Uber-map.

On our journey, we and the driver chatted about how the new system worked. New technology often has this effect, I find. It gets people talking. It reminded me a bit of the early days of blogging, which got all sorts of people in touch with each other who would never normally have been communicating.

Our driver preferred his new Uber-life partly because he now gets no grief from a demanding taxi-cab office with its rigid time and place demands and general stress and hassle. He now eludes that middle man and, via his new and improved middle man (Uber), instead relates directly to his passengers. There is an elaborate regime to register both complaints from drivers about passengers, and from passengers about drivers, but for a driver who wants to do an honest job, that’s all good, just as it is for passengers who are willing and indeed eager to behave themselves.

We passengers also like the service that the driver and his comrades provide, because it is cheaper than old-school taxis, and quicker, and easier to track. But given that Uber is so cheap for us passengers, and given that the driver pays twenty percent of the reduced fare that we pay him to Uber, how come the driver is nevertheless such a contented guy?

A big plus for the driver is that he now works exactly when he likes, that being what a lot of the grief between him and his former taxi office had been about. He can start and stop when he pleases, with no warning concerning either, provided only that he finishes all paid-for journeys he embarks on.

But just as impressive as the increased flexibility the driver enjoys is that the flip side of us having hailed the nearest Uber taxi to us when we wanted to start our journey is that our driver is immediately available to start his next useful journey just as soon as he has completed his previous one. Our driver had been taking someone to that particular part of suburban London, and within moments there we were, wanting him to take us back to the middle of London from that same out-of-the-way spot. He doesn’t have to drive back, empty, to some damn taxicab office. He resumes work at once. This is why Uber-taxis are cheaper. This is not done by lowering the standard of living of the drivers or the quality of the product. It is done by seriously improving the efficiency of the drivers and their vehicles.

You can tell that Uber is a massive efficiency gain by the fact that the regular black cab drivers are in a state of fury about it, and have been threatening to screw up London’s traffic, with some kind of demo/disruption or suchlike. Their excuse is that there is apparently some law or other which, in the opinion of the cabbies and their lawyers, these new Uber-taxis are breaking, concerning computer tracking or something. But such complaining seems likely only to publicise that if the law is getting in the way of Uber, then it should stop.

If you want some more jeering at those angry black cabbies, see what City A.M.’s Guy Bentley has to say about them.

That the black cabbies are demonstrating against Uber in particular, rather than against “Kabbee, Hailo, Addison Lee, GetTaxi, Uber and Green Tomato” merely serves to establish Uber in the public mind as the market leader. I daresay there are also “network” reasons why one big brand leader is advantageous to most customers. So, big win for Uber, I’d say.

I am sure that there are many, many tweaks to Uber that I am not even remotely aware of, the kind where not only do I not know the answer but where I had never even thought of the question. But presumably Uber-savvy commenters can fill in many more details.

In particular: what could go wrong? Our driver didn’t seem to have any worries. But, was he perhaps being a tad optimistic? Will his income maybe decline if lots more want in on the driving side of things? What about if robot cars join in, and snatch away his job? Great for us passengers, because if it’s not it won’t catch on. But not so great for our driver.

Once you start talking about systems like Uber and robot cars in the same sentences, is the longer term implication of things like Uber going to be: fewer privately owned cars? Will Uber 3.0 be the first robot car killer app?

But oh yes, back in the here and now, one further detail I do now remember the driver talking about. If you are an Uber customer based in Los Angeles (as a recent passenger of his was), you can use the exact same account to whistle up our London driver as you have already been using in LA. The exact same account. Think about that. In any Uber-enabled city, and there are now a lot of such cities around the world, you can use taxis with the kind of confidence you already have about Uber-taxis in your own back yard.

My guess would be that a characteristic Uber first time user is someone who is about to venture to a foreign city where Uber is in action, and he signs up for Uber beforehand, so that he knows his taxis in the strange foreign landed will then be sorted at non-punitive expense and without grievous risk. Where he lives, he has a car and trusts the local taxis. But in foreigner-land, Uber taxis will be a massive plus. Then, once he has sampled the service in a strange city, the obvious next thing will be to use it back home more regularly. If that’s all approximately right, you can see why the black cabbies are spitting blood.

But alas for the black cabbies, their complaints are only advertising Uber to a global audience of city-hopping tourists and businesspersons. London’s black cabs are famous the world over. So if they are now moaning about Uber, that’s a global story. With enemies like this, Uber hardly needs an advertising agency.

But that’s enough guessing from me about Uber. Over to our commenters and their amazing ability to share a collective conversation with us and with each other, thanks to the work of an earlier generation of computer-magicians.

Islam has no truly moderate wing

Ayaan Hirsi Ali, in the course of being interviewed by Sam Harris:

The reason the so-called Muslim “extremists” are so successful at recruiting, keeping, inspiring, and mobilizing people – and then finally getting them to wage jihad – is that what they’re saying is fully consistent with the teachings of Muhammad.

My thanks to the ever alert Mick Hartley to alerting me to this interview. Hartley entitles his posting “The faith has no truly moderate wing”. That is certainly how Islam seems to me when I read its scriptures.

It may of course just be wishful thinking on my part, but I predict that, some time within the next hundred years or so, there will be a mass-abandonment of this horrible religion, by all those who find themselves being raised as Muslims but who just want to be human beings, rather than in a state of perpetual war – at best mere ceasefire – with all non-Muslims, and constantly at the mercy of lunatic preachers nagging them to actually do what they still go through the motions of saying they believe. The only truly effective way of shaking free from such influences is to say that the lunatic preachers are wrong about everything – about Allah, about the obligation to submit to Allah, about the whole damn thing. It is because they fear what I hope for that devout Muslims have always threatened such mayhem if anyone now proclaims themselves in public to have abandoned Islam, like Ayaan Hirsi Ali. The effort to establish the right to abandon Islam unmolested is a key locus in the righteous struggle to reduce Islam to insignificance and political impotence.

Christians often complain that atheists only complain about Christianity, rather than about Islam. This criticism does not apply to Sam Harris.

Interesting headline photograph

If I emerge from the front door of my block of flats, but then realise that I have forgotten to bring my camera with me, then, unless I am in an extreme hurry, I turn around, go back up the five flights of stairs to my home, and get my camera. I cannot bear to be out and about in London without it, being a ever-more voracious photographer of whatever I see on my perambulations that interests me, and that’s more and more, the more I think of different interesting things to keep track of.

Plus, I just know that if I am not careful in this way, then the one day when I do not have my camera with me will be the exact day that an Airbus 380 on its way into Heathrow gets into trouble so serious that it is visible even to me, and plummets down into central London.

One of the things I like to photograph is the front pages of newspapers, because of their often amusing or arresting headlines. I mostly do this in the shop where I often buy my monthly copies of the Gramophone and the BBC Music Magazine (by “music” this magazine means classical music) and my weekly copies of the Radio Times, so the proprietor doesn’t mind me photographing other things. He knows that I am not going to buy any of these newspapers, but that I might be about to buy something else, and that I regularly do, even if maybe not on that particular day.

And, I take a lot of other photographs, of such things as cranes, bridges, Big Things, roof clutter, signs and notices, and other digital photographers, especially when they are engaged in photographing such things themselves, or in photographing themselves.

All of which is my explanation of why I took the photo below (on March 14th 2014) but then forgot about it, until I went trawling through my photo-archives seeking something else entirely:

PublicWorkersPay

I couldn’t find that exact story on the www, but here is the Evening Standard version of the same thing.

For me, this is always an interesting moment in the see-saw that is now British politics, between regimes which contrive as much government as the voters feel they can afford and regimes which unleash more government than the voters feel they can afford. (The option of having less government than the voters feel they can afford, is not, alas, considered worth offering.)

I cannot remember to the nearest year when the Blair/Brown regime was reported as having pushed public sector pay above this same mark, contriving a country in which public sector workers were, on average, reported to be getting more than private sector workers, but I do remember noticing that moment, and thinking it of some significance.

And this latest little tilt in the balance between production and predation strikes me as significant also, and worth noting here even if the announcement happened a couple of months ago. Just for now, for the time being (or so it says in the newspapers): production gets you better wages than predation. Good.

I know, I know. As good news comes, this is pretty small stuff. After all, even this feeble milestone took them four years to get past. As “austerity” goes, it is very mild indeed. But it is good news, I think. And I particularly enjoy being told it by a newspaper which so obviously disapproves of the story that it is telling.

Steve Baker on centrally planned interest rates: “It’s a crazy thing!”

Speaking in this video, Steve Baker makes a point that cannot be made too often:

It’s a crazy thing. In most price systems or most parts of the economy, people understand that it’s wrong to plan prices. So here we are, we’ve had chaos in the credit markets, and the credit markets are centrally planned by a cooperating international network of central banks, committees of planners, who deliberately alter the height of interest rates. And we don’t make the connection that central planning causes chaos. And it’s just a really simple thing, and it’s true in money and banking and it’s true in everything else.

Making our case on financial matters can get difficult, because it can quickly get bogged down in arcane detail. Talking about the interest rate as a politically imposed price works well, because the idea is so clear and so straightforward.

Baker has just been voted onto the Treasury Select Committee. I know very little of the inner workings of Britain’s Parliament, but those who know better about such things I tell me that this is a very big deal. The Guido Fawkes blog certainly thought this circumstance worth a passing mention. This man is making headway.

When I first heard the newly elected Baker talking about what he hoped to accomplish, he sometimes sounded like he thought that the Keynesian/Quantitative Easing door was so rotten that it might only need a few good kicks to be destroyed. Well, hope springs eternal and this door was and is very rotten indeed, but it is also very powerfully defended. Baker now talks like a man who is definitely in for the long fight. Good.

Richard Carey on the Levellers at the Rose and Crown tonight

Richard Carey is a devoted student of the English Seventeenth Century and of its ideological struggles in and around the time of the Civil War. Tonight, he will be giving a talk about all this at the Rose and Crown in Southwark, and I will definitely be there.

There could hardly be a more important subject for an English libertarian. Libertarianism now has a rather American flavour. The biggest libertarian books, especially those of more recent vintage, tend to be written by Americans or at least in America. So, if it is the case (and it is) that libertarianism of the modern and self-consciously ideological sort actually has its origins in the English Seventeenth Century, then that is a fact that we English libertarians should regularly be celebrating and reflecting upon.

My own off-the-top-of-my-head take on this is that libertarianism of the sort I espouse most definitely did make its first big appearance in Seventeenth Century England, in the form of the Levellers. But the impeccably libertarian nature of this first great libertarian ideological eruption has been masked by the kinds of questions that most exercised those first English libertarians. Libertarianism now tends to be about what governments ought to do, and most especially about the many things that governments now do, but ought not to do, or at the very least to do much less. In the seventeenth century, libertarians with unswervingly libertarian views on, e.g., property rights as the correct institutional foundation of liberty, were not quite so exercised about how the government should behave, although they did have plenty to say about this. Their central concern was: Who has the right to be the government in the first place? If you do have to have some kind of government, who should choose it? The central preoccupation of those Levellers was: Where does political authority come from? If there must be government, who decides about who shall be that government?

Charles I – famously or infamously according to taste – claimed that God had chosen the government of England, in the form of … Charles I. This the Levellers, of course, challenged. But having challenged it, and the king having been executed, the question remained: If Charles I is not the legitimate ruler of England, then who is?

The Levellers were “egalitarian” in the sense that they were indeed far more egalitarian about who should be allowed to participate in that political debate, about who should govern. Political authority sprang from … everyone! When it came to deciding who the government was, everyone’s voice counted. This was the sense in which the Levellers really were, sort of, “levellers”.

But this political egalitarianism was seized upon by Seventeenth Century Royalists as evidence that the Levellers were also egalitarians in the modern sense, who believed that economic outcomes should be equalised by the government. They were accused of being socialists. There were indeed real socialists around at that time. These were the Diggers. But the Levellers had very different views to the Diggers.

Later, the Levellers were proclaimed to be socialists by another ideological tendency, namely … socialists.

The irony being that these later socialists mostly had ideas about how government should conduct itself were pretty much identical to those of Charles I. Charles I believed that the state (i.e. Charles I) had relentlessly to intervene in the market and in the workings of the wider society, in order to correct freedom’s economic and other injustices, and never mind any harmful consequences that flowed from such intervention, or “tyranny” as the Levellers called such activities. Modern socialists believe exactly the same, about themselves.

So, the Levellers, historically, have been caught in a pincer movement of lies, proclaimed by two different brands of statists. Royalist statists accused the Levellers of being socialists. Subsequent socialists claimed the Levellers as socialists. Both were wrong. But if we libertarians do not now correct these errors, nobody will.

I still recall with great pleasure the talk that Richard gave at my home last year about the ideological context within which the Levellers first arose, and the questions that they were most keen to answer. Tonight, I am hoping to learn more about the answers they gave to these questions, and, in general, about the nature of their libertarianism. Because libertarianism is most definitely what it was.

I wrote this posting in some haste, to be sure that what I wrote got posted in time to encourage at least some who otherwise might not have done to attend Richard Carey’s talk this evening. I am fully aware that the above is a highly schematic and simplified version of a very complicated story. I have, in particular, supplied no linkage to pertinent historical writings. Comments and corrections, especially with links to pertinent material, will be very welcome to me, and I’m sure to others also.

LATER: I see that in his piece about Richard (linked to above), Simon Gibbs includes yet again an earlier picture taken by me, of Richard sporting lots of hair like a down market Cavalier. Now he looks more like this:

RichardCareyRoundhead

Technically, that is not a good photo, but it’s the best I can do right now.

Hair matters a lot, when it comes to Seventeenth Century English ideological disputes.

Matt Ridley (and Ayn Rand) on technological progress and on those who oppose it

Incoming from the IEA, alerting me to a short IEATV performance by Matt Ridley, in favour of fracking.

In Britain fracking will be easy, cheap, safe, and it will mostly to be done in the North. It will create just the sort of wealth we now most want, in just the sort of places we now most want it. Not even our current crop of environmentally deluded politicians will be able to resist this entirely benign process for very long.

I am anything but an uncritical admirer of Ayn Rand, but one of many things that she got very right was her characterisation of the opponents of liberty as being anti-industrial. These people just do not like ingenious and complicated and clever and ever-improving technology, however much humans might benefit from its implementation, in fact the more it helps humans the more the anti-industrialists hate it. They prefer economic primitivism and damn the body count. Rand first started saying this at a time when many collectivists were still claiming, in all sincerity, to know, even better than free marketeers, how to get the world’s economy motoring along. But as that latter claim has faded, the anti-industrialism that Rand already saw has become more and more obvious and obstructive to human progress.

Remember that Rand had emerged from the USSR, which once upon a time worshipped technology, until the kopek began to drop that it knew frack all about how to do it and to how make it better. Remember all those posters with belching factory chimneys. Remember all the lies about steel and tractor production. Time was when collectivists claimed to be able to make all this stuff happen even better.

Not any more, as listening to Matt Ridley talk about fracking, and the myths and falsehoods upon which opposition to it is now based, reminds us.

Samizdata quote of the day

VikingTimesQuote

- Spotted yesterday in the Times (which is behind a paywall) of the day before yesterday by 6k. “Very good” says he. Indeed.

Samizdata quote of the day

Why be libertarian? It may sound glib, but a reasonable response is, Why not? Just as the burden of proof is on the one who accuses another of a crime, not on the one accused, the burden of proof is on the one who would deny liberty to another person, not the one who would exercise liberty. Someone who wishes to sing a song or bake a cake should not have to begin by begging permission from all the others in the world to be allowed to sing or bake. Nor should she or he have to rebut all possible reasons against singing or baking. If she is to be forbidden from singing or baking, the one who seeks to forbid should offer a good reason why she should not be allowed to do so. The burden of proof is on the forbidder. And it may be a burden that could be met, if, for example, the singing were to be so loud it would make it impossible for others to sleep or the baking would generate so many sparks it would burn down the homes of the neighbors. Those would be good reasons for forbidding the singing or the baking. The presumption, however, is for liberty, and not for the exercise of power to restrict liberty.

A libertarian is someone who believes in the presumption of liberty. And with that simple presumption, when realized in practice, comes a world in which different people can realize their own forms of happiness in their own ways, in which people can trade freely to mutual advantage, and disagreements are resolved with words, and not with clubs. It would not be a perfect world, but would be a world worth fighting for.

- The concluding paragraphs of Why Be Libertarian? by Tom G. Palmer, which is the opening essay in Why Liberty? edited by Palmer for the Atlas Foundation.

Here’s a picture of Palmer waving a copy of Why Liberty? during the speech he gave to LLFF14 at University College London last weekend:

TomPalmerWhyLIberty

Free copies of Why Liberty? were available to all who attended.

Christopher Snowdon on fake charities and sock puppets

Here is part of slide number one of Christopher Snowdon’s talk at LLFF14 yesterday afternoon, entitled “How the state finances the opponents of freedom in civil society”:

JeffersonQuote

That is from The Virginia Act for Establishing Religious Freedom, first penned, it would seem, in 1779, and actually passed in 1786.

Christopher Snowdon is described here as the “Director of Lifestyle Economics at the IEA”, which means he is their chief complainer about sin taxes.

His talk yesterday was based on the work he did writing two IEA publications, Sock Puppets: How the government lobbies itself and why and Euro Puppets: The European Commission’s remaking of civil society. Both those publications can be downloaded in .pdf form, free of charge.

Snowdon walked around a lot when talking, so although I took a lot of photos of him, only this one was any good:

ChristopherSnowdon Silhouette

Behind Snowdon is a long list of NGO’s which receive substantial funding from the EU. For legible versions, see Euro Puppets.

In the short run, all this money paying for leftist apparatchiks to lobby for more money for more leftist apparatchiks is good for leftism, but I wonder if in the longer run it won’t be a disaster for them. Another quote, about how all causes eventually degenerate into rackets, springs to mind. This is the kind of behaviour that even disgusts many natural supporters of leftism. As Snowden recounted, few people outside this incestuous world have any idea of the scale of this kind of government funding for “charities”, never mind knowing the extra bit about how the money is mostly used to yell and lobby for more money, and for more government spending and government control of whatever it is. In particular, Snowden recounted that when John Humphrys interviewed Snowden on the Today Programme, he (Humphrys) did not grill him (Snowden), he (Humphrys) mostly just expressed utter amazement at the sheer scale of government funding for “charities”, for anything.

What this means is that if and when a non-leftist politician gets around to just defunding the lot of them, just like that, he gets a win-win. He cuts public spending, even if only a bit. And he slings a bunch of parasites out into the street where they belong, who are then simply unable to argue to the public that they were doing anything of the slightest value to that public. Insofar as they do argue that they shouldn’t have been sacked, they do not further their own cause; they merely discredit it further and further prove that the decision to sack them was the right one.

Samizdata quote of the day

So relentless is this brainwashing that it percolates throughout the curriculum, so that even exam papers in French, English or religious studies can ask students to explain why the world is dangerously warming up, or why we must build more wind turbines. In 2012, I described an A-level general studies paper set by our leading exam board, AQA, asking for comment on 11 pages of propagandist “source materials”, riddled with basic errors. A mother wrote to tell me how her intelligent son, after getting straight As on all his science papers, used his extensive knowledge of climate science to point out all their absurd distortions.

He was given the lowest possible mark, a fail. When his mother paid to have his paper independently assessed, the new examiner conceded that it was “articulate, well-structured” and well-informed. But because it did not parrot the party line, it was still given a fail. I fear this corruption of everything that education and science should stand for has become a much more serious scandal than Mr Gove yet realises.

- Christopher Booker

Anthem – the musical

This io9 piece reports that a musical based on Ayn Rand’s Anthem will open, in New York, on May 29th.

Anthem

There is a website, where you can read this:

Anthem is told through the words of Equality 7-2521, in diary form. Equality 7-2521 is a young man who lives in the future after a time called the “Great Re-birth”. The city in which he lives is surrounded by an immense forest which is thought to be impassable due to the fact it is filled with wild animals. This is a simple and isolated society in which all technology is carefully controlled and in its most primitive state. All awareness and understanding of individualism has been lost and words such as ‘I’, ‘me’, or ‘mine’, do not exist in spoken or written language, therefore, nearly the entire story is told in the ‘first person plural’. Independent thoughts and/or actions are strictly prohibited by law and therefore, everyone lives and works in groups as a collective body also known as the “Great We”. …

It will be interesting to see how well it does.