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]

Thank goodness so many people have university degrees

In 1820, the vast majority of people lived in extreme poverty and only a tiny elite enjoyed higher standards of living. Economic growth over the last 200 years completely transformed our world, with poverty falling continuously over the last two centuries. This is even more remarkable when we consider that the population increased 7-fold over the same time. In a world without economic growth, an increase in the population would result in less and less income for everyone. A 7-fold increase in the world population would be potentially enough to drive everyone into extreme poverty. Yet, the exact opposite happened. In a time of unprecedented population growth, we managed to lift more and more people out of poverty.


Despite the clear evidence, many people are not aware of the fact that extreme poverty is declining across the world. The chart below shows the perceptions that survey-respondents in the UK have regarding global achievements in poverty reductions. While the share of extremely poor people has fallen faster than ever before in history over the last 30 years, the majority of people in the UK thinks that the opposite has happened, and that poverty has increased!

The chart below presents evidence from a survey in the UK, but ignorance of global development is even greater in other countries that were also surveyed. The extent of ignorance in the UK is particularly bad if we take into account that the shown result corresponds to a population with a university degree.

Max Roser & Esteban Ortiz-Ospina

Big regulation

War and Peace is 1,200 pages long. Bleak House spreads to 1,000. Dodd-Frank, the US’s sprawling overhaul of financial regulations after 2008, runs to 848 pages – earning itself the nickname `Dodd-Frankenstein’. And the EU’s bumper trade deal with Canada reaches a hearty 1,600 pages. Last week, surmounting all of these achievements, the EU introduced a truly spectacular piece of regulation. `Mifid 2′ is its name and it weighs in at a princely 7,000 pages. That’s 1.4 million paragraphs, or six Bible-lengths. It must surely be a contender for the longest piece of red tape ever.

Juliet Samuel (Daily Telegraph, registration required). Needless to say, people continue to drone on about “neo-liberalism” and “unfettered markets”. If only.

I can predict a standard retort: that if the UK wanted to be an enthusiastic EU member (no laughing at the back, kids) then it could influence the EU machine and reduce this regulation. But how has that worked out, really? True, I know of some politicians who have tried to slow this process down, but it continues regardless.

Sure, when the UK leaves, then UK-based firms that wish to do business with the EU will need to comply with EU regulations just as they must do so with the laws of the US, or Canada, Australia, or Planet Zog. But the process cuts two ways. If the UK parliament has any sense (big if, course) and keeps rules within bounds rather than “gold-plates” whatever is in force in other countries, then the UK will gain. Further, the very existence of countries with independent rule-making makes it harder for policymakers in transnational groupings such as the EU to create tax/regulatory cartels. (This is why countries such as Switzerland drive Brussels nuts.)

In time, the regulatory costs of doing business in the EU will cripple its financial markets, and that makes it rather harder to persuade yours truly that being outside this regulatory behemoth is so bad for business. Being outside a relatively free and flexible customs union, which is what the Single Market is, can sound risky, even daunting. Being outside an expensive, inflexible, bureaucratic nightmare is far less so. In fact, getting as far away as possible from such a structure is not just a smart gamble, but essential.

Samizdata quote of the day

Public regulation is static by principle. According to his knowledge of the past, a regulator will define conditions for the presence. However, she cannot know what will come in the future. By definition, innovation represents the direct opposite. Innovator cares not about what people did in the past or what the current situation is. Innovation is a projection of the future. The issue arises when these two concepts collide in a concrete case. The regulators then judge the innovation on the basis of the old standards and the innovators judge the regulation based on their own vision of the future.

Today the static barriers of government regulations are exceeded by new technological innovations and new entrepreneurs. Therefore, it is necessary to take a step back and look at these issues from a broader perspective. We can also look at this problematics simplistically and see if the new technology fits into the official regulatory box, or not. And if it, by chance, doesn’t fit, we ban it automatically.

Robert Chovanculiak

Samizdata quote of the day

Specifically, Buffett offered to bet that over a ten-year period from January 1, 2008, to December 31, 2017, the S&P 500 index would outperform a portfolio of hedge funds when performance is measured on a basis net of fees, costs, and all expenses. Hedge fund manager Ted Seides of Protégé Partners accepted Buffett’s bet and he identified five hedge funds that the predicted would out-perform the S&P 500 index over ten years.

As I reported last September on CD, Buffett’s now-famous bet was actually settled early and ahead of schedule, because the outcome was so one-sided in favor of the S&P 500 index over hedge funds

Mark Perry

I have been following this for a while and given my views on hedge funds, I was not in the slightest bit surprised at the outcome. Factor in fees, costs, and all expenses and the difference becomes eye-watering. Personally I am a big fan of the Terry Smith school of thought (which is to say when it comes to investments “don’t just do something, sit there!”): with a few glorious exceptions, managed funds almost always over-trade.


A hundred and fifty years ago it took twenty-five men to all day to harvest and thresh a ton of grain. With a modern combine harvester, a single person can do it in six minutes. In other words, it contributed to a 2,500-fold productivity increase.

– Johan Norberg writing in Progress: Ten Reasons to Look Forward to the Future.

A festive quote and two more festive photos

Festive photos to add to that photo of meat, from Christmas Eve, meat which I was lucky enough to share.

That evening we all did much toasting, and one of us photoed all our glasses while we were doing this. Many get angry about the modern habit of photoing food and drink just before it is consumed, but I say: Why not? Where’s the harm?

On Christmas Eve I was too busy holding up my own glass and joining in the fun to be photoing it. But, I did take a photo of a very similar event back on December 18th, on Primrose Hill, just to the north of Regents Park:

Christmas, or in this case the run up to Christmas, is a time to renew old acquaintances. I don’t know who these people were and how they were connected, and in this time of computerised face recognition, I have deliberately made this difficult with my photo. Friends? Relatives? What I do know is that they were greatly enjoying each other’s company, just as Perry and I and his other guests did on Dec 24th.

Later on Christmas Eve I did get my camera out, and I got this shot of our Dear Leader, enjoying a present that one of us had given him, of one of his favourite chocolate treats:

On a more serious note, I have been reading Deidre McCloskey’s book, The Bourgeois Virtues. At the beginning of her chapter entitled: The Very Word “Virtue”, McCloskey offers a number of quotes from bygone years, including this one from Benjamin Constant, who until now has been only a name to me. Apparently, in the year 1814, Constant said, in celebration of the greatly increased opportunities for human enjoyment that commerce was at that time beginning to make available to the generality of people, this:

The progress of civilization, the commercial tendency of the age, the communication among the peoples, have infinitely multiplied and varied the means of individual happiness. To be happy, men need only to be left in perfect independence in all that concerns their occupations, their undertakings, their sphere of activity, their fantasies.

Plus, a bit of spare cash and the chance to spend it on luxuries, like high quality meat (as Perry put it: “Duck with skin turned to quackling, stuffed with pheasant & wood pigeon”), and amusingly packaged chocolate. Here’s another toast, to: stuff. The stuff that has, since Benjamin Constant’s time, so greatly increased, by means of exactly the processes he refers to.

Concerning who and what Benjamin Constant was, I have yet to read this. Tomorrow, I intend to. Happy Christmas everyone, what’s left of it.

The Netherlands and the oil crisis

I have a dim memory of a TV news report on how the 1973 oil crisis was affecting Holland. I can’t remember the specifics but it was something along the lines that the crisis was much worse in Holland than elsewhere. At some later date I got the idea that the Dutch had been selling arms to the Israelis and the Arab oil embargo introduced after the Yom Kippur War was much more strictly enforced on Holland than elsewhere.

As I got older (I was very young in 1973) this made less and less sense. How, I thought, do you control what happens to oil you’ve sold once it has been put on a ship?

For some reason this week I was reminded of this dim and distant memory and decided to do some duckduckgoing. I discovered that someone has written a book on the subject. This is what the rubric says:

The Netherlands played a remarkable role during the October War and the oil crisis of 1973. In secret, the Dutch government sent a substantial amount of ammunition and spare parts to Israel. The Dutch supported Israel also politically. Within the EC they vetoed a more pro-Arab policy. The Arab oil producing countries punished The Netherlands by imposing an oil embargo. The embargo against the Netherlands was intimidating. The Netherlands was dependent on Arab oil. The embargo seemed to threaten the Dutch position in the international oil sector. The government introduced several measures to reduce oil consumption. However, within two months it became clear that oil continued to arrive in Rotterdam. There was in fact no oil shortage in the Netherlands.


Some hippies on a road on a “car-free” Sunday in Holland, made “car-free” because the government was worried about oil supplies.

Labour will pave the streets of Birmingham with gold

Today the Shadow Chancellor John McDonnell launched a report commissioned by the Labour Party from GFC Economics & Clearpoint Corporation Management Ltd. I have had a quick read of it, not in any detail but enough to think that you might be interested in reading it too. Here it is:

Financing Investment: Interim Report

It is called Financing Investment but it does not say much about financing investment. I suppose a report called Let’s Put The National Investment Bank And The Strategic Investment Board And A Bit Of the Bank Of England All Next Door To Each Other In Birmingham And Mention It Twenty Times is better for votes in Birmingham. They’ll be able to put out a special Birmingham edition of Monopoly with that street collecting a massive rent.

However there is more to this report than just more swanky government buildings in Birmingham. Branch offices in Glasgow and Cardiff are also promised. And this caught my eye:

There is a risk that the disproportionate number of technology companies in London and the South East will increase, exacerbating regional inequality.

You hear that, South East? Only in Labourland is an increase in the number of technology companies in one area seen as a “risk” in itself.

But that is a mere taster. On page 47 we begin to reach the meat of the proposal. Rejoice! There is to be something called a Strategic Investment Board.

The Strategic Investment Board will sit at the heart of the economy, coordinating R&D, commercialisation and information flows

We learn that

3. The Strategic Investment Board will draw on science and technology to devise comprehensive policy proposals for investment. There will be an emphasis on R&D investment. Private sector R&D will not be crowded out. It will be encouraged.

It is nice to be reassured that private sector R&D will not be crowded out, but the very fact that the possibility is mentioned does rather imply that public sector R&D will be crowded in. Who will be deciding who gets this “investment”, and what reason have we to suppose they would be good at it? The answer is not reassuring:

5. Scientists and researchers at the cutting edge of their fields will be appointed to senior advisory positions. The Strategic Investment Board will also seek the advice of trade unionists, businesses and leading industrialists.

Ah, “getting round the table”, I remember that. I was too young to understand all the hoo-hah about Barbara Castle’s In Place of Strife in 1969, but I can just about remember the series of increasingly ineffectual “Solemn and Binding agreements” and “Concordats” agreed between Labour governments and the unions over beer and sandwiches at No.10 as the 1970s wore on. None of them stuck.

(Edit: in the comments Sam Duncan says, “So they’re basically digging Neddie and the NEB out of the dustbin and bunging them in the microwave for a couple of minutes, then? That’s the Great Corbyn Plan?”)

On page 48 it says,

The Strategic Investment Board will scrutinise and advise the monetary and financial policy authorities as banks shift from unproductive lending to innovative companies.

That all sounds very nice, but why is a bunch of scientists, businessmen and trade unionists moonlighting from their proper jobs expected to be able to tell what lending is unproductive? While lending to “innovative companies” can turn out well, it is not a game for amateurs. God only knows that the banks have not always done a good job, but at least it was their job. And it is strange to see the socialists display such faith that the capitalist exploiter will act for the common good and not, for instance, draw an enormous salary augmented by backhanders to ensure that companies in which he has a well-disguised interest get all this luverly investment.

On page 49:

We suggest that the Strategic Investment Board has six permanent committee members plus two
representatives, one each from the National Investment Bank and the publicly-controlled RBS. This
will ensure a consistency between the polices of the National Investment Bank/RBS and the Bank of

Wha-wha-what is the Royal Bank of Scotland doing there? They’re not thinking of using money deposited by the public with RBS for this “investment”, are they? Investment specifically directed at innovative companies? That might, er, cause queues to form outside RBS branches on the morning of a Labour election victory.

I have left the biggest question, where the money is to come from – because I really don’t think RBS can cover it all – as an exercise for the reader. The Labour party answer is “From the National Investment Bank, stupid.”

Samizdata quote of the day

People talk and think about jobs like they are things. Like you can possess one, lose one, or like you need to go get one from someone. So they go to job boards looking for the people who are giving away jobs. They go through the societal rituals that are expected of job seekers. But they are making a fundamental mistake–because jobs are not things, they are abstractions.

Getting lost in this abstraction causes a lot of pain and confusion. Seeing past the abstraction lets you see the countless opportunities you have available to you.

A job is an abstraction to describe a relationship between one person and another individual or group of people that agree to a certain type of ongoing trade. To get a job, you don’t need someone to create it and give it to you; you simply need to convince someone that you can make them more money than you cost.

Ryan Ferguson

Mongolia, the EU’s blacklisted tax haven

It has been quite a grim century for Mongolia, many decades under the Soviet yoke after the ‘Mad Baron’ von Ungern-Sternberg managed to take over in the chaos after WW1, and write his own grim chapter, and still its capital is called ‘Red Hero’, but despite that name, Mongolia has got itself into the EU’s bad books, not by human rights abuses, but by a lack of them as a tax haven.

To determine whether a country is a “non-cooperative jurisdiction” the EU index measures the transparency of its tax regime, tax rates and whether the tax system encourages multinationals to unfairly shift profits to low tax regimes to avoid higher duties in other states. In particular these include tax systems that offer incentives such as 0% corporate tax to foreign companies.

The scoundrels, the shame of it, not taxing someone!

EU members have been left to decide what action to take against the offenders. Ministers ruled out imposing a withholding tax on transactions to tax havens as well as other financial sanctions.

OK, how about undercutting or matching them for starters? That would, actually, hurt them.

For some reason, the ‘charity’ Oxfam thinks it is entitled to chip in.

The UK-based charity Oxfam last week published its own list of 35 countries that it said should be blacklisted.

Are Oxfam’s shops taxed (or business-rated) in the same way as their commercial neighbours? Can they explain how sanctions (so useful against South Africa under Apartheid) improve the lot of the poor? Since sanctions harm, the corollary is that free trade doesn’t, and yet… But I digress.

Let’s hope that Mongolia shows the same defiance before its accusers as the Baron von Ungern-Sternberg did when facing a People’s Court, from ‘Setting the East Ablaze’ by Peter Hopkirk.

‘Showing no signs of fear at the fate awaiting him, the baron challenged the right of a ‘people’s court’ to try him. He told his Bolshevik accusers: ‘For a thousand years Ungerns have given other people orders. We have never taken orders from anyone. I refuse to accept the authority of the working class’.

Then they shot him.

The full blacklist is:

The 17 blacklisted territories are:
American Samoa, Bahrain, Barbados, Grenada, Guam, South Korea, Macau, The Marshall Islands,Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Trinidad and Tobago, Tunisia, United Arab Emirates.

and conceding the point that taxes create poverty:

The EU made exceptions for countries faced with natural disasters such as hurricanes, and put the process temporarily on hold.

Terror at living outside the EU, ctd

Recent UK gross domestic forecast predictions, issued this week via the glum figure of UK finance minister Philip Hammond, have encouraged some of my friends who are EU Remainers to shout about how Brexit is damaging Britain, we are going to lose tens of thousands of jobs to the continent, or wherever, etc, etc. The rage is not dying, in fact. Some of the language (Brexit supporters are “retarded” being a recent one) is not becoming milder. We haven’t yet reached the acceptance phase after the initial shock and anger.

Apart from the devaluation of sterling after June last year, there hasn’t been all that much of a shift on the economics front. The underlying performance of the UK economy does not appear to have altered that much. Some American banks such as Goldman Sachs and JP Morgan talk of shifting some business to the continent to create subsidiaries in anticipation of any EU access shenanigans, as I would expect, but it hardly fits with a Biblical level of terror to justify some of the vehement language I see on forums such as Facebook.

Assume we must take seriously the risk of life outside the joyous embrace of the EU Single Market, this is worth considering, from Tory MP and former minister, Peter Lilley:

The Single Market is talked about as if it were some inner sanctum accessible to a privileged few. In fact, every country has access to the Single Market – with or without tariffs. The Single Market programme, which I implemented, involved harmonising product rules – sensible, since businesses can now make one product range for the European market, not 28. But that benefits American and Japanese exporters as much as German or British firms. Although often invoked as particularly benefiting UK service companies, in fact UK service exports to the EU have grown less rapidly since the Single Market reforms than any member state except Greece and Italy

He also responds to the point that apparently, by being outside the EU, the UK will now submit to EU rules without being able to influence them:

People assume Britain benefits from participating in setting these rules. But rules provide a framework within which all companies operate – not an advantage to any individual country. Britain set the rules of tennis but rarely wins Wimbledon! British exports to the EU have grown less rapidly since the Single Market than they did before 1993, less than our partners’ and much less than non-EU countries’ exports! Maybe that is partly because we suffer EU regulations on 100% of our companies (costing our economy billions of £s) whereas non-EU firms need only comply with EU regulations on activities carried out within the EU.

And on the “passporting” issue that comes up:

How important is the right to passport services to the EU? Passporting lets financial institutions operate throughout the EU via branches supervised by their home country regulator without seeking authorisation from local regulators. Having introduced the Single Market measures, I decided to make a speech extolling how they had removed barriers to trade, not least through passporting. Unfortunately, my officials could not find a single company doing business it previously could not do! Banks were almost invariably operating, not through branches, but via subsidiaries which still needed local authorisation and regulation. (Emphasis mine.)

And on the terror that outside the EU, the UK will be hurt, Mr Lilley looks at EU-regulated mutual funds and alternative investment funds regulation (private equity, real estate, private equity, etc):

Since then the UCITS, MiFID and AIFM directives have extended passporting rights to other financial service providers who do take advantage of it. However, most UCITS funds choose to operate via subsidiaries in Luxembourg and Dublin without causing an exodus of jobs from London. Also the AIFM directive provides for recognition of equivalent standards of regulation by non-EU providers which is intended to be granted to Hong Kong and Singapore, so could scarcely be refused to the UK post Brexit.

In other words, you don’t have to be in the EU to manage investments sold within its borders. And yet if you take some of the Remainer arguments at face value, you would think that the UK is to be cast into a dark, lonely place.

A final thought. One of my Remainer co-jousters talks of the folly of the UK “going it alone”, as he claimed we had done after 1945. That, however, not only ignores our membership of NATO but also the UK’s web of trade with not just the continent of Europe, but also the old Commonwealth nations and places such as Argentina, and of course the US. The UK was hardly living under a rock during the period before EEC membership began in 1973, and further, that membership involved slapping tariffs on many of those countries. As Mr Lilley says, it has taken ages for the EU to hammer out free trade deals with nations such as India, China, etc, and to improve on what we have with the US. (I have even seen some of my Remainer friends dismiss this range of countries as “minor”, or “colonial outposts”). So let me get this straight: the US, Canada, Australia, New Zealand, India, South Africa, parts of Latin America, the Pacific-Rim, etc, are “minor”, but the European Union is a powerhouse. Great, got it.

Have a good weekend everyone.


Under socialism, the crows will not fly away

In the comments to my earlier post about the West Indies Federation, Bruce relayed something his schoolteacher once told him:

Question to the class:

There are ten crows sitting on a wire.

You shoot one. (This was back when guns, shooters and shooting had not been totally criminalized by the ruling-class sociopaths).

How many are left?


That would be the answer expected from most kids.

Correct answer?


Crows, unlike most of the lamestream media, academics and politicians, are NOT STUPID.

To which Niall Kilmartin replied:

Bruce (November 23, 2017 at 8:11 am), there is a socialist version of your ‘crows’ story.

At one of the glumly festive parties Stalin used to inflict on his politburo cronies, he told the story of how, while he was in exile in Siberia under Tsarism, he was out skiing and saw several crows perched on a branch. He shot a couple then skied back for more ammunition, returned and shot the rest. After he left the room, Beria said, “He’s lying” (understandably the others were cautious in responding, fearing a provocation). Conquest, in his biography of Stalin, charitably suggests the story may have been just a Siberian version of the old US Western “tall tale’, told for entertainment as a whopper not intended to be believed. It has also been suggested that the crows’ feet were frozen to the branch and Stalin for once in his life was telling the truth.

Whatever the truth of it, the moral is clear: under socialism, the crows will not fly away.

Far be it for me to say that our Shadow Chancellor is taking tips from Stalin, but that line did remind me of what I heard him saying on an audio clip posted last week by Guido Fawkes:

McDonnell now sure there won’t be a run on the pound.

John McDonnell has changed his tune from Labour conference […] Now he insists “there’s never going to be a run on the pound” and “of course” he isn’t planning capital controls if it happens. Only a few years ago McDonnell used to openly threaten the City with capital controls if they opposed his policies.