For a couple of decades now I’ve been insisting that China is the most free market economy on the planet. In some senses of course this is laughably untrue. In others, or in at least one, remarkably close to the bone.
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December 18th, 2025 | 6 comments
 I left this comment on another place and thought I’d share it here. I was responding to an American pal – whom I normally agree with – who said the the UK’s vote for independence outside the EU was a disaster. I have jazzed it up a bit and added links. Well, it is Christmas! The EU has become an increasingly regulated, bureaucratic entity, and while the UK tried to pull it in a different direction, the sclerosis of the continent got worse. The Single Market and “freedom of movement” aspect had their positives – up to a point. The Customs Union (external tariff wall, in other words) was a clear negative, however. The structure of the EU is hostile to classical liberal economics in the medium term, not a plus. The bureaucratic mission creep of the European Commission, unhampered by a largely toothless E. Parliament (it cannot initiate or repeal directives), meant the EU economy decelerated, imperceptibly at first. Its share of global GDP has shrunk and not just because other, non-European countries such as China and India have grown over the past few decades. While some of the reasons for Brexit were grounded in nationalism, which I dislike, some reasons were more classically liberal. Those reasons should not be discounted. Another point: for far too many, the ideas of free enterprise and freedom of trade became entwined, in a poisonous way, with the creation of transnational, bureaucratic structures distant from ordinary people. To that extent, the EU is part of the problem for those making the case for capitalism and open markets. When you say those words, far too many think of men and women in suits in Brussels regulating this and that, not entrepreneurship, trade and human interaction. That’s a problem. For Americans reading this, remember that when the original 13 colonies broke free from the UK in the 1770s, they did so in part for reasons around representative government and the powers to tax with legitimate power. The EU increasingly came to the point where member states were reduced to regions of a centralising state. Ross Clark’s Far From EUtopia is a marvellous read about Brexit, what went wrong, and more. December 15th, 2025 | 14 comments
There is strategic competition with economic rivals, notably China, especially around advanced technology, supply-chain dominance, and industrial sovereignty. But tariffs raise costs for domestic firms that rely on imported components, in some cases hurting US manufacturers rather than helping them. Indeed, recent data show US manufacturing has contracted, with some firms citing tariffs as a reason for layoffs or relocation. Retaliation from trade partners can offset gains via higher tariffs abroad, disrupted supply chains, and increased uncertainty. The welfare benefits of rising domestic output are modest under many models because gains might be outweighed by efficiency losses, higher consumer prices, and reduced variety. And the government risks politicizing trade decisions, which may lead to cronyism or poorly targeted protection by helping politically connected sectors rather than broadly boosting national economic health December 10th, 2025 | 52 comments
That is not how wealth works of course. The people who have piles of money do not in fact have piles of money they’ve got piles of paper signifying ownership of companies and businesses. Which leads to the third problem with the idea. Which is that taxing these billionaires on their stacks of ownership of assets does not, in fact, free up money into the economy. It doesn’t reverse hoarding that is – just changes who hoards. December 5th, 2025 | 18 comments
“The great heroes of capitalism are the entrepreneurs who can feel the future in their bones and will do anything to bring it into being — fanatics who are compelled to build castles in the air, as Joseph Schumpeter put it. The biggest beneficiaries of these innovations are consumers who are showered with products and services beyond the dreams of previous generations. Capitalism may have made accommodations with some horrible regimes and vile practices in the past, as Beckert shows in detail. But as a system it thrives best in conditions of freedom, where government power is limited, property rights secure and businesspeople left alone to pursue their dreams and subject them to the stern test of the market.” – Adrian Wooldridge, Bloomberg ($), in one of his best recent columns IMHO, gently taking apart a new book by Sven Beckert that purports to show how we have become rich primarily through violence and enslavement, not mutual exchange. The book is apparently more than 1,300 pages long, and the largest ever published by Penguin. To write a book that long, and miss the key elements of why free enterprise is as great as it is, seems a lot of work for scant reward. Alas, I suspect Beckert’s book will be treated as reverently on parts of the Left as Thomas Piketty’s blockbuster, which turned out to be built on proverbial sand. A recent Nobel prizewinner in economics, Joel Mokyr, has written a book that I think rather more accurately identifies why, for instance, the UK became as wealthy as it did during the Industrial Revolution, and plays far more attention to the role of ideas. The Wealth and Poverty of Nations by David Landes is also a good study, in my view. Anything by Deidre McCloskey is also good. November 29th, 2025 | 26 comments
Cash savings are not dead money – they’re the deposits that finance the banks’ loan books. Tossery built upon ignorance. Richard Murphy – that Sage of Ely – is one of the few people in the country able to proffer up budget ideas even worse than the ones we’re going to get from Rachel this week. November 24th, 2025 | 11 comments
The Green Party are calling the scarcity of resources into play as an argument against the efficient use of resources. They’re mad. QED. November 4th, 2025 | 9 comments
Now, zoom out to the regulatory burden, a beast fed by both parties. The Tories kicked it off with gusto. In 2015, George Osborne slashed mortgage interest relief, fully phasing it out by 2020, landlords could no longer deduct full interest from taxable income, effectively hiking taxes by up to 20% for higher-rate payers. Add the 2016 3% stamp duty land tax (SDLT) surcharge on buy-to-lets, which cooled purchases by 10-15% per industry estimates. EPC rules tightened too: from 2018, rentals needed at least an E rating, with fines for non-compliance; by 2025, proposals aimed for C by 2030, costing landlords £8,000-£15,000 per property in upgrades. Right to Rent, introduced in 2014 and expanded, mandated immigration checks with £3,000 fines per illegal tenant. The 2019 promise to scrap Section 21 evictions lingered unresolved until Labour grabbed the baton, but it fuelled uncertainty, prompting a landlord sell-off wave. Labour, far from easing the pain, has doubled down. The Renters’ Rights Act 2025, royal assent in October, bans Section 21 outright (implementation mid-2026), mandates periodic tenancies, and limits rent hikes to once yearly at market rates—with challenges via tribunals. Pets can’t be unreasonably refused, and bidding wars are outlawed. Selective licensing proliferates: councils like Southwark charge £600-£750 per property for five years, with paperwork galore. Fines for breaches? Up to £30,000, as Reeves learned. Right to Rent enforcement has “rocketed” under Labour, with penalties hitting £4.2m recently versus £596k pre-election, a 600%+ spike, per Home Office data. No wonder a 2025 Landlord Today survey cited “political pressure” as a top exit reason for 40% of landlords. Impacts? Catastrophic for small players. October 31st, 2025 | 16 comments
Price controls are when you solve the loud noise your smoke alarm is making by removing the battery. October 28th, 2025 | 9 comments
I have a feeling this Landeur chap on YouTube is rather capturing the UK zeitgeist right now. Here he is pointing out the dangers of ever increasing taxes. October 16th, 2025 | 11 comments - (Comments are closed)
Just to make this plain. Electricity is sold at the one price. We do not get charged different amounts for a green electron than a dirty brown one (we might well do dependent upon time of day, reliability of supply, etc, but that doesn’t change this particular argument). We have one price for the output. Whoever produces cheaper will make more profit. Because that’s just how profit works – revenue minus costs is profit. Therefore either renewables are cheaper and thus they make more profit or renewables are not cheaper and they make less profit. There is no version of this story in which renewables are cheaper and yet they make less profit. September 16th, 2025 | 71 comments - (Comments are closed)
I came across this interview with US academic Cass Sunstein, whose views on behaviouralism – including the area known as “behavioural economics”, have been immensely influential on governments in the past 25 years or so. The idea of “nudging” people via policies to doing certain things (auto-enrolment in savings for retirement, messaging about the dangers of certain lifestyles, etc) has become a default piece of wisdom. It accords with the tendency of a managerialist political class that sees the wider population as only partially rationally self-interested. Sunstein, as shown in this video (conducted by the Hoover Institution in the US) notes how he disagreed with the Chicago-based economics folk such as Nobel Prize winner George Stigler and others about the idea of rational expectations. The behavioural school thinks that human motivation is not like that; in the financial services space, for instance, there is a school of thought known as behavioural finance that looks at crowd behaviour in times of stock market booms, busts, etc. And there are temptations to try and “fix” these behaviours. I see a few dangers, and maybe Sunstein does too now (it is worth seeing the whole video). For example, it is easy to see how a government, even if democratic and accountable, can grow into a monster if driven by even well-meaning people that think that people aren’t necessarily fully rational, and need to be nudged, or guided, into doing the “right thing”. This helps explain, in some ways, why the “administrative state” is what it is. It would not have got so big had it been a clearly evil project. Most people who drive all these changes and programmes think they are doing the right thing. Some might be bad but most aren’t. And yet here we are, with a bloated set of governments in the West, with skyrocketing debt and all the rest of it. I think a major flaw in behavioural economics is the hubris of the “nudge” advocates about how they think they can handle all this. And as we have seen, politicians who lean towards tax-and-spend policies love some of these ideas because they can sit alongside what they want to do anyway. I am not even sure it makes sense to describe these as “liberal” because some of this “nudge” stuff does not seem to accord with ideas about treating people as individuals who need to be held accountable for their actions. It is arguable that the “nudge” crowd hew to a form of soft determinism, or maybe “soft paternalism” – the notion that we are not really volitional creatures with agency, but buffeted by internal and external forces, and often emotional first, rational second. But even if that latter point is true, a rational person with choice-making capacity can realise that he or she is prone to making unwise/foolish choices, and like Odysseus who lashed himself to a mast to avoid being tempted by the Sirens, adopt rules and protocols to not screw up. (I know an alcoholic who avoids parties and certain events to avoid getting into trouble, to give one example. Another might be a stockbroker who turns off the noise of the daily news and makes better investment decisions over the long run.) Self-knowledge is the beginning of wisdom, and all that.
August 29th, 2025 | 50 comments - (Comments are closed)
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