We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.

Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

Samizdata quote of the day

…as I have complained about in the past, there has been a major shift in modern companies from delivering something useful – such as a bridge which doesn’t collapse – to managing processes. A lot of companies have subcontracted out the actual work – designing, building, manufacturing, operating, maintaining – and instead busy themselves with “managing” the whole process. This involves lots of well-educated people in nice clothes sitting in glass-fronted office buildings sharing spreadsheets, reports, and PowerPoint presentations by email and holding lengthy meetings during which they convince one another of how essential they are.

Tim Newman speculating on the causes of the Florida footbridge collapse.

Trade Wars: A Phantom Menace?

Bloomberg is the only TV news channel I can stomach watching in the UK; it is the only one that is not instinctively leftist. I suppose if you are trying to provide a service that people will pay for to help them make financial decisions, a better standard of truth is required.

This morning they were very excited about Donald Trump’s threats to impose tariffs, especially now that (relative) voice-of-reason Gary Cohn has announced his resignation. They reported that the EU is threatening to respond to Trump by cutting off EU consumers’ noses to spite Donald Trump’s face.

Perhaps if we are lucky post-Brexit Britain will be a refuge of sanity, free-trade, and economic growth amongst all this madness.

Or perhaps, as one commenter on Bloomberg suggested, it is all bluster and this is just Trump negotiation tactics and it will come to nothing.

On the enduring stupidity of tariffs

Virginia Postrel:

Aluminum foil wraps burritos, physics equipment and the highlighted tresses of hair-salon customers. It forms flexible ducts and lasagna pans, lines cigarette packs and fast-food sandwich wrappers. It hides between layers of film in flexible packaging. It protects aspirin bottles from tampering, petri dishes from light and tractor engines from overheating. It tops yogurt cups and peanut cans. It backs blister packs of antihistamines, antacids and birth-control pills. It goes into automotive parts and air-conditioning systems.

U.S. manufacturers rely on aluminum foil. So do nail salons, building contractors and bakeries.To the Trump administration, however, none of these businesses—or their employees—matter as much as a couple of domestic aluminum makers. Disregarding the ripple effects, the Commerce Department has said it will impose preliminary duties of 97 percent to 162 percent on the Chinese imports that supply much of the U.S. market with thin aluminum foil. That’s likely to have much more far-reaching effects on U.S. companies than the minor deals President Donald Trump announced on his trip to China.

As the Wall Street Journal (paywall) editors said:

Mr. Trump seems not to understand that steel-using industries in the U.S. employ some 6.5 million Americans, while steel makers employ about 140,000. Transportation industries, including aircraft and autos, account for about 40% of domestic steel consumption, followed by packaging with 20% and building construction with 15%. All will have to pay higher prices, making them less competitive globally and in the U.S.

And the national security argument trotted out to support such tariffs is given suitably short shrift by the WSJ:

The national security threat from foreign steel is preposterous because China supplies only 2.2% of U.S. imports and Russia 8.7%. But the tariffs will whack that menace to world peace known as Canada, which supplies 16%. South Korea, which Mr. Trump needs for his strategy against North Korea, supplies 10%, Brazil 13% and Mexico 9%.

On just about all conceivable grounds, the tariffs are stupid.

Last year, reflecting on a few of Trump’s acts, such as deregulation moves, the tax cuts, Supreme Court picks, crushing of the Paris AGW accord and the Jerusalem embassy decision, I felt that, while Trump had said a lot of foolish things, maybe he was turning out to be a pretty good POTUS after all. The protectionism, however, remains a major blot on his record.

Ross Clark at the UK’s Spectator, meanwhile, makes an interesting observation of how all this plays to the case for Brexit.

South Africa decides Zimbabwe is an instruction manual, not a warning

Grim news from South Africa. Just in case anyone thought that the departure of President Zuma, a corrupt man who has stripped his country (South Africa faces severe water shortages brought on by neglect of infrastructure) might lead to better things will be disappointed. The new regime has signed off on a land-grab policy of confiscating white-owned land without compensation. (About 70 per cent of South African farmland is owned by whites.) The claim made is that any white person who owns land in the country must, by definition, have stolen it. (The idea that such ownership might have come into being without theft just does not cross certain persons’ minds. That fact is simply undiscussible.)

As we have found in the seizure/collectivisation of farms in the former Soviet Union, in China, and in Zimbabwe more recently, such moves herald mass poverty and violence. South Africa has ironically seen an influx of poor Zimbabweans since the vile Mugabe regime started to attack white farmers and seize land; the country has suffered a catastrophic decline in its farmland output, which may never recover. South Africa seems keen to follow suit; it has a range of largely self-inflicted woes: the current government is deeply corrupt. The country needs inward investment – seizing white-owned property hardly encourages any investor, of any racial background. As a matter of simple common sense, taking land by brute force, without compensation, from owners and giving it to those who are political cronies and hangers-on will inevitably reduce output and wealth, not the other way round.

The unfolding of South Africa’s history is a tragedy, and it is easy to see why there is an element of “score-settling” at work here. Apartheid, let it not be forgotten, was introduced in the late 1940s at the behest to some degree of the white trade union movement, keen to bolster its bargaining power. Even if you were a private entrepreneur who wanted to hire non-whites for certain jobs, for example, you couldn’t. (Minimum wage laws operated in ways that hurt, not helped, non-whites.) The system was as absurd and vile as the Jim Crow laws of the US, or other examples of serfdom and oppression down the ages. It had to go; for anyone who supports a free market economy, apartheid and its cousins are absurd as well as wrong.

But the solution of seizing white-owned land, regardless of the honesty or provenance of it, and giving it to people via a political carve-up, turns the injustices inherited from the old regime on their head, creating a new form of racism. Two wrongs do not make a right. And further, one suspects that the land seizures are an attempt to deflect attention from the failings of the existing regime. Compare and contrast how, for example, the “Asian tigers” threw off their old colonial masters and focused on getting seriously rich, not least by respecting property rights. And wherever one looks, there does seem a pretty tight correlation between respect for property rights – indeed their very existence – with prosperity and happiness more broadly. Hernando de Soto has made something of a career pushing the point that the world needs more property rights, spread among more people. (Check out this recent lecture by Niall Ferguson on the same sort of issue.) As an aside, it also seems to be a pretty solid marker of respect for property rights to have a large and growing middle class. I suspect that one of the underlying problems in South Africa is that among the non-white population, persons who can be so described aren’t a big portion of the total.

Lest anyone pounces on the notion that what has happened proves that certain racial groups are incapable of building a civilized political order, bear in mind that here in the UK, the oh-so-white Caucasian leadership of Her Majesty’s Opposition, Jeremy Corbyn, and his colleagues, want to do to the owners of privately-owned industries such as electricity, gas, and the rest what the new leadership in South Africa wants to do to white farmers. The defence of settled property rights remains a vital cause for anyone interested not just in prosperity, but liberty. As of this week, that cause took a turn for the worse in South Africa.

Antiquated attitudes

Thus saith the EQUALITY AND HUMAN RIGHTS COMMISSION to its anointed, to the BBC, whose right hand it hath holden, to subdue the unrighteous before it:

Employers still have ‘antiquated attitude to female workers’

Many employers still live in the “dark ages” when it comes to recruiting women, the Equality and Human Rights Commission (EHRC) says.

In a poll for the EHRC, 36% of employers thought it reasonable to ask a women about plans to have children.

Some 59% agreed that a woman should have to disclose during the recruitment process whether she is pregnant.

The commission said the poll of 1,106 male and female decision-makers showed worrying attitudes.

The EHRC said its study showed that many employers needed more support to better understand the basics of discrimination law and the rights of pregnant women and new mothers.

EHRC chief executive Rebecca Hilsenrath said: “It is a depressing reality that, when it comes the rights of pregnant woman and new mothers in the workplace, we are still living in the dark ages.

“We should all know very well that it is against the law not to appoint a woman because she is pregnant or might become pregnant.

“Yet we also know women routinely get asked questions around family planning in interviews.”

Other findings from the YouGov survey of small, medium and large firms included:

– 46% of employers agreed it was reasonable to ask women if they have young children during the recruitment process

– 44% agree women should work for an organisation for at least a year before deciding to have children
About one third believe that women who become pregnant and new mothers in work are “generally less interested in career progression”

– 41% of employers agreed that pregnancy in the workplace puts “an unnecessary cost burden” on the workplace

– 51% agree there is sometimes resentment towards women who are pregnant or on maternity leave
The EHRC said its survey revealed antiquated beliefs, including two out of five employers saying women who have had more than one child while in the same job can be a “burden” to their team.

Samizdata quote of the day

I asked my friends how they’d voted last year. Sanjit’s a Tory, but hard-working Annie and Marion, highly trained and usefully employed, said “Labour” without a pause for reflection. I wasn’t surprised, but I am fearful. Think what they’ll do when their generation puts a Marxist like Corbyn into power, eyeing up those assets we prize, those homes we once took for granted. What would be your instinct, if you’d never been able to buy a house, while the generation above you were getting richer by £35 a day, just by sitting in the home they refuse to let you afford?

Graham Archer.

The issue of the housing supply/demand problem has been noted several times before here at Samizdata, such as here, here and here.

Samizdata quote of the day

Next time you hear someone talking about the triumph of ‘neo-liberalism’, or the prevalence of free markets, remind them that the financial markets have been explicitly state-dependent for a decade. And this is not some unintended policy side-effect. The central banks got what they wanted. They hoped to push up financial asset prices, both to keep borrowing costs down – financial prices and interest rates generally move in inverse directions – as well as to make people and institutions feel wealthier in the hope they would spend more. It’s proved much easier to stimulate financial wealth than it is to help bring about real new wealth creation through producing more goods and services efficiently.

Phil Mullan

Samizdata quote of the day

In a recent comedy routine, Chappelle provided a succinct explanation of why it makes more sense for the United States to import some goods from China rather than try to pursue a protectionist trade policy aimed at producing everything domestically. Chappelle summarized President Trump’s position vis-à-vis China: “I’m gonna go to China, and I’m gonna get these jobs from China and bring ‘em back to America.” Chappelle then interrupted his Trump soliloquy, asking: “For what, so iPhones can be $9,000? Leave that job in China where it belongs … I wanna wear Nikes, I don’t wanna make those things. Stop trying to give us Chinese jobs.”

Allan Golombek

The efficiency of state space development

Last night, Elon Musk mentioned that the development cost of Falcon Heavy was about $500M, an astonishing sum, until you remember that NASA’s new Space Launch System has consumed about $20B to date and isn’t finished yet. Full development costs for SLS are said to be $35B.

Also, while Falcon Heavy re-uses most of its hardware and costs about $90M a flight, the current quoted SLS flight cost is $500M, and more realistically might reach $1B per flight.

However, while Falcon Heavy can only carry 63 tons to low earth orbit, SLS Block 1 will be able to carry 70 tons.

Eventually, SLS Block 2 will be available, with a payload of 130 tons to LEO. By that time, SpaceX’s BFR, which will be fully reusable, may be in flight. BFR will be able to carry 150 tons to LEO, and is intended to be fully reusable, so a flight may cost as little as a few million dollars — likely under 1/100th of the cost of a flight of SLS Block 2.

Why capitalism is good

IKEA founder Ingvar Kamprad has has died. Evidence suggests that in his youth, Mr Kamprad was a Nazi. I don’t mean this in any metaphorical sense. He appears to have been an actual Nazi.

Mr Kamprad then went on to conquer the world through selling people flat pack furniture. Rather than the other way.

Samizdata quote of the day

Mercantilists literally believe (even when they deny the belief) that money is wealth – that to accumulate money is to accumulate wealth and that to spend money is to become less wealthy. This mercantilist “reasoning” is why, for example, mercantilists applaud exports (because exports are sold for money) and lament imports (because imports are paid for with money). Thus the mercantilist obsession with the balance of payments.

Economists counter this mercantilist belief by pointing out that money is valuable only because it can be exchanged for real goods and services. Ultimately, wealth is not money and money is not wealth; ultimately wealth is the use of real goods and services. People who envy Jeff Bezos or Bill Gates or Dave the hedge-fund manager across town don’t really envy Jeff’s, Bill’s, or Dave’s possession of billions of Federal Reserve Notes (or of pieces of paper or streams of electronic bits that are easily convertible into dollars or some other currency). What the envious envy is Jeff’s, Bill’s, and Dave’s luxurious homes, luxury automobiles, private jets, top-rate medical care, and regular consumption of other real goods and services that are not affordable in the same quantities by less-wealthy people.

Don Boudreaux

Samizdata quote of the day

When there are no unemployed then the various capitalists are in competition with each other to find the labour they wish to exploit. That competition raising the price paid for the labour, that is, wages go up. Full employment really does mean wages rise. It’s worth noting that minimum wages have somewhere between little and nothing to do with this. The current Federal such is $7.25 an hour. Walmart already pays $10 an hour, from next month $11. Competition in markets is thus very much more powerful than legislation, no?

Tim Worstall