In a matter of months, this word, blockchain, has gone viral on trading floors and in the executive suites of banks and brokerages on both sides of the Atlantic. You can’t attend a finance conference these days without hearing it mentioned on a panel or at a reception or even in the loo. At a recent blockchain confab in London’s hip East End, the host asked if there were any bankers in the room. More than half the audience members, all dressed in suits, raised their hands.
Okay, what the F**k is a blockchain (one word or two?), I hear you cry?
A block chain is a transaction database shared by all nodes participating in a system based on the Bitcoin protocol. A full copy of a currency’s block chain contains every transaction ever executed in the currency. With this information, one can find out how much value belonged to each address at any point in history. (Wikipedia.)
Here is a book by Dominic Frisby, whom I have met and is known to Samizdata contributors such as Brian Micklethwait, about Bitcoin, and the blockchain system. There is now quite a literature about Bitcoin, some of it with a strong “hell with fiat money” sort of bent, others with a more agnostic approach. Here is one such example by Paul Vigna. Going onto Amazon or other search engines for such books brings up a lot of hits.
More broadly, the point of the article to which I linked at the top here is that very serious financial industry figures are now piling in; sure, some of them will have problems, and the history of how some people get carried away is instructive. But just as instructive is that, even after a period of difficulty, such as when the dotcom boom went sour, we were left not just with a lot of garish stories of excess, but some valuable business models that worked. And that, I suspect, will be the story around Bitcoin – not that this will be the one to succeed, but that the technology surrounding it will have a major change on how finance and other activity happens.
Rather suitably, following the link to a speech by Brendan O’Neill earlier on Samizdata, is this long, very troubling and hopefully widely-read item on the Atlantic Monthly. Excerpt:
The press has typically described these developments as a resurgence of political correctness. That’s partly right, although there are important differences between what’s happening now and what happened in the 1980s and ’90s. That movement sought to restrict speech (specifically hate speech aimed at marginalized groups), but it also challenged the literary, philosophical, and historical canon, seeking to widen it by including more-diverse perspectives. The current movement is largely about emotional well-being. More than the last, it presumes an extraordinary fragility of the collegiate psyche, and therefore elevates the goal of protecting students from psychological harm. The ultimate aim, it seems, is to turn campuses into “safe spaces” where young adults are shielded from words and ideas that make some uncomfortable. And more than the last, this movement seeks to punish anyone who interferes with that aim, even accidentally. You might call this impulse vindictive protectiveness. It is creating a culture in which everyone must think twice before speaking up, lest they face charges of insensitivity, aggression, or worse.
There’s a saying common in education circles: Don’t teach students what to think; teach them how to think. The idea goes back at least as far as Socrates. Today, what we call the Socratic method is a way of teaching that fosters critical thinking, in part by encouraging students to question their own unexamined beliefs, as well as the received wisdom of those around them. Such questioning sometimes leads to discomfort, and even to anger, on the way to understanding.
But vindictive protectiveness teaches students to think in a very different way. It prepares them poorly for professional life, which often demands intellectual engagement with people and ideas one might find uncongenial or wrong. The harm may be more immediate, too. A campus culture devoted to policing speech and punishing speakers is likely to engender patterns of thought that are surprisingly similar to those long identified by cognitive behavioral therapists as causes of depression and anxiety. The new protectiveness may be teaching students to think pathologically.
Remember: the students who are moulded by this process will, in a few years’ time and in some cases, become politicians, business leaders, civil servants and others of influence. The question I ask is whether there will be enough persons not infected by this nonsense to still have enough clout in the public life of the West to resist this. Because a generation that is terrified of giving offence is not going to be all that effective at, say, facing up to existential threats to the Western way or life, or even less intimidating concerns.
Final thought: the authors note that part of the problem begins when children are young and protected, arguably to a dangerous degree, by parents and not allowed to play outdoors and be unsupervised and learn, early on, about the risks and bugs of real life. I think this might be at the core of the broader problem. And the lessons here don’t just apply to the US.
A suicide-homicide is an act of ultimate rage. People who do these kinds of things feel like they’re the victims. Their acts of suicide and homicide are a way to make a point. Although they don’t live to see the results, they would probably like what they see: Millions of people not only being momentarily horrified, but agreeing with the murderer’s classification of him- or herself as a victim. Whatever the President and the Pope have to say about this, rest assured that the killer — if he were alive to hear — would be happily applauding.
So the idea this letter represents mainstream economics must be challenged. When Sky is reporting it without an alternative viewpoint, it can mislead the public. But this also shows something interesting about the political left. People across the political spectrum like to appeal to the authority of “experts” to improve credibility. But for the left, this is crucial. Unlike supporters of markets, left-wing interventionists believe experts can direct economic activity for us. Building up the idea that “experts” support these interventions and believe they work is therefore of critical importance to obtaining public acceptance.
– Ryan Bourne, Institute of Economic Affairs.
Too good not to share. From the excellent Cafe Hayek blog.
Dear Mr. Trump:
You insist that we Americans are harmed whenever foreigners take actions that result in us getting more imports in exchange for our exports. I ask that you, with your own money, prove that you really believe the economic principle that lies at the root of your insistence.
If you’re correct that people are impoverished when they pay lower prices, and are enriched when they pay higher prices, then you can easily augment your personal fortune by demanding that the suppliers from whom you purchase the steel, cement, and other materials used to construct Trump buildings raise the prices they charge you for their merchandise. The higher they raise the prices they charge you to carry out your economic affairs, the wealthier you’ll become because you’ll be increasingly reluctant to purchase their offerings. In the limit they can charge you prices so high that you’ll buy nothing from them! How great would that be?! And the possibilities don’t end there! You can even further expand the Trump treasure by lowering the prices – even to $0 – that you charge your customers for hotel rooms and the other goods and services that you supply.
Just think of the additional wealth that will come your way by your being, as a buyer, dissuaded by high prices from purchasing goods and services from people not named ‘Donald Trump,’ and, as a seller, by the hordes of customers who will demand to consume almost limitless quantities of the wares that you make available at prices of $0.
Who knew that getting rich is so easy?!
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
So many economists today spend more and more time mastering higher-level mathematics and econometric techniques that they simply never master basic microeconomics. These economists (from my reading of him, I judge Piketty to be among them) take their fluency in statistics and their skill at quantitative-data gathering for being a fluency in, and skill at doing, economics. They are mistaken. And while their error is too-often masked to the general public by their formal credentials as professional economists, their error is never hidden from genuinely skilled economists such as Deirdre McCloskey.
– Don Boudreaux, of Cafe Hayek. The whole item is worth a read, as is the McCloskey item at the Cato Institute to which he links. And let’s not forget Samizdata’s own Perry Metzger’s marvellous “shoe event horizon” takedown of Piketty a few months ago.
This item at the EconLog blog caught my eye. It has the ring of truth about it:
And yet, good for him, this is exactly the outcome of his short time in Greek government. As a Minister, he has nothing to exhibit as success. But an intense countenance, an elaborately casual look, and his colourful prose makes him a perfect fit for the world of celebrities. I suppose this is another proof of the immense powers of “commodification” of global capitalism.
The author, Alberto Mingardi, is writing about the “cool dude” Greek finance minister, Yanis Varoufakis. The man’s rather strained form of Marxism will, so the author of the piece, hurt him not at all because his targets are, for different reasons, ones that aren’t particularly sympathetic, such as the German government, and Brussels.
The point, though, its that being a failed socialist finance minister isn’t enough to get that sort of media celeb status without other ingredients. After all, there are quite a few of such people and in some cases, such as former UK chancellor Gordon Brown, he is about as trendy as flared jeans; he has all the media appeal of steel reinforced concrete. The Greek chap has the looks and demeanour of an outsider, even if, in reality, he is as much a part of the Big Government class as the rest of them. He understood that people fall for all this bollocks about wearing leather jackets, riding a motorbike and not appearing to be A Suit.
And back in the UK, assuming that Jeremy Corbyn (not exactly the sort of name one associates with horny-handed coal miners or ship-builders) becomes leader of Her Majesty’s Opposition, and leads Labour into the sort of disaster widely foretold, he has a career as a media celeb sorted: the ageing geography-teacher schtick with the beard, loose jackets and references to Tony Benn.
Via Lindsay Perigo, a New Zealand-based writer, former radio current affairs fellow, and general stirrer. As he says, if you are not offended by all of this, something isn’t working.
The Story of Admiral Nelson, Updated
Nelson: Order the signal, Hardy.
Hardy: Aye, aye, Sir.
Nelson: Hold on, this isn’t what I dictated to Flags. What’s the meaning of this?
Hardy: Sorry Sir?
Nelson (reading aloud): “England expects every person to do his or her duty regardless of race, gender, sexual orientation, religious persuasion or disability”? What gobbledygook is this, for God’s sake?
Hardy: Admiralty policy I’m afraid, Sir. We’re an Equal Opportunity Employer now. We had the devil’s own job getting ‘England’ past the censors lest it be considered racist. Strictly speaking, I shouldn’t be calling you “Sir,” Sir, but rather, “Person of Consensus-Based Enhanced Authority.”
Nelson: Gadzooks, Hardy! Hand me my pipe and tobacco.
Hardy: Sorry Sir, all naval vessels have now been designated smoke-free working environments.
Nelson: In that case, break open the rum ration. Let us splice the mainbrace to steel the men before battle.
Hardy: The rum ration has been abolished Admiral. It’s part of the Government’s policy against excessive enjoyment.
Nelson: Good heavens Hardy! I suppose we’d better get on with it, then. Full speed ahead.
Hardy: I think you’ll find that there’s a 4 knot speed limit in this stretch of water.
Nelson: Damn it man, we are on the eve of the greatest sea battle in history; we must advance with all dispatch. Report from the crow’s nest, please.
Hardy: That won’t be possible Sir. Health and Safety have closed the crow’s nest. No harness, and they said that rope ladders don’t meet regulations. They won’t let anyone up there until proper scaffolding can be erected.
Nelson: Then get me the ship’s carpenter without delay, Hardy.
Hardy: He’s busy knocking up a wheelchair access to the foredeck, Admiral. Health and Safety again, Sir—we have to provide a barrier-free environment for the differently-abled, wheelchair-mobile.
Nelson: Differently abled? I’ve only one arm and one eye and I refuse even to hear mention of the words. I didn’t rise to the rank of Admiral by playing the disability card.
Hardy: Actually, Sir, you did. The Royal Navy is under-represented in the areas of the differently-sighted and the differently-limbed.
Nelson: Whatever next?! Give me full sail. The salt spray beckons.
Hardy: A couple of problems there too, Sir. Health and Safety won’t let the crew up the rigging without hard hats. They don’t want anyone breathing in too much salt either. Apart from the racism inherent in its whiteness, it’s full of sodium. Haven’t you seen the Ministry of Health adverts?
Nelson: I’ve never heard such rubbish. Well, break out the cannon and tell the men to stand by to engage the enemy.
Hardy: The men are a bit worried about shooting at anyone, Admiral.
Nelson: What?! This is mutiny!
Hardy: It’s not that, Sir, it’s just that they’re afraid of being charged with murder if they actually kill anyone. There are a couple of Legal Aid lawyers on board, watching everyone like hawks.
Nelson: Then how are we to sink the Frogs and the Spanish?
Hardy: That’s “residents of France and Spain,” Sir. And actually Sir, we’re not.
Nelson: We’re not?!
Hardy: No Sir, the residents of France and Spain are our European partners now. According to the Common Fisheries Policy, we shouldn’t even be in this stretch of water. We could get hit with a claim for compensation.
Nelson: But you must hate a Frenchman as you hate the devil.
Hardy: I wouldn’t let the ship’s Diversity Coordinator hear you saying that, Sir—you’ll be up on Disciplinary Report for Hate Speech.
Nelson: You must consider every man an enemy who speaks ill of your King. That’s a matter of black and white.
Hardy: That’s “monarch-person,” Sir. And your point is controversial and problematic, Sir. Apart from “black and white” being offensive to people of colour, we must be inclusive in this multicultural age. Now, put on your Kevlar vest. It’s the rule. It could save your life.
Nelson: Don’t tell me, Health, Safety and Disability. Whatever happened to Rum, Sodomy and the Lash?!
Hardy: As I explained sir, rum is off the menu and there’s a ban on corporal punishment.
Nelson: What about sodomy?
Hardy: Good news there, Sir—sodomy is now compulsory.
Nelson: In that case … kiss me, Hardy.
So farewell, Yanis Varoufakis. You used to be Greece’s finance minister. Then you resigned, or were you sacked? You took control of the Greek economy six months ago when it was growing. Yes, honestly! Growth last year ran at 0.8 per cent, with forecasts of 3 per cent this year. The government had a primary budget surplus. Unemployment was falling. Until you came along.
Varoufakis was a product of British universities. He read economics at Essex and mathematical statistics at Birmingham, returning to Essex to do a PhD in economics. With the benefit of his British university education he returned to Greece and, during his short time in office, obliterated the nascent recovery. The economy is now expected to contract by 4 per cent this year — an amazing transformation. Greece’s debt burden has increased by tens of billions and many people have emigrated.
But Varoufakis is not alone. Plenty of other visitors to our universities have been influenced by the teaching here and returned to their countries to wreak havoc.
James Bartholomew, on the malign effect, as he sees it, of UK education. My problem with this article is that it is inevitably selective and I wonder, for example, what would happen if you randomly selected a group of postgraduates from UK universities, now living abroad in countries such as India or Singapore, and polled them on their economic and political views. It seems from entirely anecdotal experience that most graduates, especially in the liberal arts, tilt left; I am not sure about the leanings in economics today – although I get the impression that the ideas of Milton Friedman, Hayek, von Mises et al are still seen as quite “extreme”. But there have, for example, been pro-market lecturers at places such as the London School of Economics, for all its socialist origins: Lionel Robbins and FA Hayek, to take two examples. Arthur Seldon, one of the original men at the pro-market Institute of Economic Affairs – an enormously influential think tank in its time – was educated at the LSE, and I know quite a few LSE alumni who are pro-market.
So yes, during certain periods of UK history when socialism/collectivism was fashionable, the folk who came out of university often carried terrible ideas with them. Today, though, I think the problem is more about culture and philosophy. Post-modernism still exerts a big influence, for example, and the damage wrought is not always as easy to chart as with economics.
Of course, these points lead us back to that thorny subject of the PPE (politics, economics and philosophy) degrees which several UK politicians possess. The PPE is very much an exam crafted to give a sort of rounded set of subjects that an administrator/political leader was expected to understand, and I have no firm views about this sort of degree – there is no reason why having one cannot be a very thorough form of degree at all. But studying a subject does not seem to correlate a lot to understanding – the current UK government is led by a man with a PPE and it wants to push up the UK national minimum wage, a form of economic illiteracy, if supposed political cunning.
Singapore is the only place I know where you can meet someone who has an economics degree from Stanford, and have her tell you that she has a liberal arts background.
– Marginal Revolution
I have been to Singapore several times, and love the place.
“A good economist is one who can understand both the “seen” and the “unseen” consequences of policy. It is the proponents of this policy who are ignoring the complexities of the issue. `Britain deserves a pay rise, let’s give it one’ is hardly the height of sophistication when it comes to economic and political analysis.”
Philip Booth, who was unimpressed by how Iain Martin, of the “popular capitalist” blog CapX, wrote in defence of George Osborne’s atrociously-conceived “living wage” idea.
When you have a writer of an allegedly pro-free market blog such as Martin arguing for state fiat control of wage levels, and who belittles those who argue against such things as ideological nit-pickers, there is a problem. What also gets me is that this foolish idea was introduced by a government that does not need to pander to leftist economic illiteracy. The Tories don’t even have the feeble excuse of having to placate coalition partners after having won power outright in May.
There may be some good features of Osborne’s recent Budget (the upward rise in inheritance tax thresholds was welcome, although the system remains unnecessarily complicated) but there is far too much political gamesmanship from Osborne for anyone who supports free markets to take him all that seriously as a friend of capitalism and freedom. If or when the costs of a far higher statutory minimum wage start to really hit small and medium-sized firms – as they will – will he have the balls to admit this has been a foolish mistake? I am not betting on it – he’ll probably have moved on by then.
A notionally free-market party is endorsing a policy which will see a fifth of the wage distribution’s hourly rates determined by a government QUANGO – targeting not a basic wage floor to alleviate exploitation, but a measure of inequality.
– Ryan Bourne.
The key word in that sentence is “notionally”.