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]

Has Bean open day

I have been buying coffee beans from Has Bean for several years. Their unique selling point is they ship the beans on the same day they are roasted, so they are really fresh. They also cater to coffee geeks by letting us choose beans by country of origin, plant variety and processing method. And they do not roast the beans too much so it is possible to taste the difference all these things make.

A coffee roaster, complete with custom Has Bean modifications.

A coffee roaster, complete with custom Has Bean modifications.

On Sunday they had an open day at their facilities near Stafford. They simply opened the doors and did coffee cupping (i.e. tasting), brewing demonstrations, talks and tours. They threw in some real ale and nibbles for good measure. I went along.

The story goes that the boss, Steve Leighton, got fed up with his job as a prison guard and decided to turn his coffee roasting hobby into a business. After trying to sell coffee on Stafford market, he became exasperated when a customer came back to complain that the ground coffee would not dissolve in the water. It was after this that a friend suggested he tried selling coffee on the Internet.

The chief roaster, Roland Glew, after explaining exactly how the roasting is done by smell and sound of cracking, and how roasting for ten seconds too long can ruin the product, told us how speciality coffee buyers interact with farmers. Steve Leighton visits farms, gets invited into the farmers’ family homes and treated like family. Whereas once upon a time their coffee would be thrown into a bag labelled “coffee” and they would get a fixed price, Leighton can work with them to explain what people want, get them to change their methods, try new varieties of plant or different processing methods, divide up the farms differently, and generally get them to make better coffee because he is able to pay a premium for it. He is able to make assurances about how much coffee he will buy so they can safely make the needed investments, and continue to buy coffee if a farmer has a bad year because it is in his interests to keep the farm in business. Has Bean are even experimenting with what would otherwise be waste: cascara and coffee flowers.

Roland demonstrating the sample roaster.

Roland demonstrating the sample roaster.

This is what innovation leading to economic growth looks like. It is largely made possible by the dis-intermediation of the Internet. Geeks are all but buying coffee directly from farmers. The Internet also has a way of bringing people with weird hobbies, like getting all serious about coffee, together. An individual becomes part of a global buying market who otherwise might have been the only weirdo in town.

It is a completely different way of making poor people richer than Fair Trade, which a Department for International Development report found does not even work. Steve Leighton is not very impressed with Fair Trade, either.

Steve doing his party trick of telling a story about any coffee variety you point to.

Steve doing his party trick of telling a story about any coffee variety you point to.

I asked Steve how much import tariffs affect his business. He said not a lot. Thinking about it, this makes sense. Possibly one reason coffee prices are in general so low is that other things farmers could grow are hit by trade barriers. Only coffee is left. He was much more worried about the exchange rate movements since the Brexit vote.

Steve seems particularly fond of Bolivia. On the visit I heard a lot about how life is hard for Bolivian coffee farmers because the president Evo Morales is more interested in supporting coca farmers. He also told a great story about the Yungas Road, which he travels on. It was the most dangerous road in the world because vehicles would fall off of it. Then a bypass was built, but travelling on the bypass was expensive because bribes would need to be paid at checkpoints. So now Steve uses a company who run bicycle tours for tourists to get down the road.

More pictures from me, here. See and hear more from Steve in his fascinating “In My Mug” videos, like this latest one from Bolivia. You can hear more about his most recent trip to Bolivia in this Tamper Tantrum podcast.

Apple replies to the EU, and it is magnificent

In an astonishing EU ruling, Apple is being told the pay the Irish state €13 billion(!!!) in retrospective taxation that the Irish state never asked for. And the reply from Apple is very well crafted. It is clear they are not going to take this shakedown by the European Commission lying down.

When even ‘Communist’ China gets it…

I found this quite interesting:

On the face of it, China’s central bank has room to cut interest rates to try to lift the economy, but sources say evidence companies and banks are hoarding cash has reinforced policymakers’ view there is no major benefit in easing policy further.

The reluctance has also been shaped by the experience of Japan and the European Union. Despite much more aggressive easing policies than China, including negative interest rates, they have struggled to lift their economies out of the doldrums, these sources said.

And my reaction was to marvel… can it be true ‘Communist’ China is the only state to finally figure out the absurdity of modern mainstream thinking regarding interest rates? Every time Bank of England Governor Mark Carney opens his mouth, I am reminded of Albert Einstein’s purported definition of insanity. Is China really the only place the penny fen has finally dropped?

Samizdata quote of the day

And the idea that is the bedrock of all economics is the understanding that complex economic order emerges spontaneously, without central design or guidance, when private property is secure and markets are at least reasonably free – when, in short, there reigns what Adam Smith called the “the obvious and simple system of natural liberty.”

Too many economists today, busy mastering mathematical technique or striving to make their work relevant for current holders of political power, lamentably never learn – much less master – these and other foundational ideas. But no amount of mastery of the idea of the likes of Nash equilibrium or of the Stolper-Samuelson theorem is worth a damn without a mastery of these older, less sexy, yet foundational ideas.

Donald Boudreaux

Samizdata quote of the day

Whenever dismal scientists agree so passionately about the impact of a complex, one-off and multi-faceted event, alarm bells deserve to go off

Allister Heath

Samizdata quote of the day

If that sounds familiar, it’s because this amounts to Mr. Corbyn’s People’s Quantitative Easing concept in all but name. The idea much derided last year is becoming so mainstream that even a leadership candidate for Britain’s Conservative Party, Stephen Crabb, could recently propose a £100 billion ($130 billion) public-works investment fund that wasn’t so different from PQE. Mr. Corbyn’s PQE is essentially indistinguishable from the suggested 50-year Japanese bonds.

This probably says more about the central bankers’ desperation than Mr. Corbyn’s prescience. With government spending and borrowing constrained by slow growth and high debt, and supply-side reforms still politically far off in many economies, the pressure is mounting on central bankers to act as magicians pulling rabbits out of their hats. The longer this continues, the deeper they’ll have to rummage around for the next rabbit. It’s enough to make one wonder what will be the next extreme idea to follow the journey from crank to orthodoxy.

John Phelan

Samizdata quote of the day

For those that already have, Mark Carney is the gift that keeps on giving. Borrowed imprudently and struggling to make those interest payments ? Worry not; the Bank of England has your back. For those that don’t have, the Bank of England is taking away your chance of ever realistically saving anything, now that interest rates have been driven down to new historic lows of 0.25%, and may go lower yet. For the asset-rich, for the 1%, for property speculators, and for zombie companies and banks, Carney is your man. For the asset poor, or for savers, or pensioners, or insurance companies, or pension funds, the Bank of England has morphed from being anti-inflationary fireman to monetary arsonist.

Tim Price

“They like to fill out forms”

Boy, the Guardian‘s commenters are not happy with this offering: “The secret life of a trade union employee: I do little but the benefits are incredible”. My respects to the paper for printing it. For all its faults the Guardian does present a variety of opinion.

Many Libertarians and like-minded folk are reflexively against trade unions. I am not. I believe that any two people, or any two groups of people, should be free to come up with whatever deal suits them, and it is nobody else’s business to tell them they cannot operate under those conditions. A single union workplace? Fine, so long as you do not impose it by force or threats. (A comment from Laird below prompts me to add that perhaps the most common sort of imposition by force is the use of law. Neither employers nor unions need hire goons any more – they hire legislators instead.) Free competition between unions will in the long term raise the general standard, just as it does between companies or nations. If they are wise, trade unions will not simply compete to provide the highest wages or the best services for their members. They should also compete to promote the prosperity of the industries in which their members work. Militant trade unions have killed whole industries – ask the old men who used to be printers or dockers in the 1970’s – and smart workers know this. It looks like the anonymous writer of this piece is dimly aware that the union for which he or she works is beginning to pay the price for featherbedding:

There are disadvantages to these perks though, as nobody feels they can leave until they retire or are offered a fantastic redundancy package. Even that doesn’t work sometimes, as people realise they are on to such a good thing that they refuse the redundancy offer and stay here to do little more than open the post for the rest of their working lives, while still picking up the same salary.

As a result we have an ageing workforce with no fresh ideas. The activists are computer illiterate, preferring to print out emails instead of send them on electronically. I was once scoffed at for suggesting that we try to have a paperless office instead of killing rainforests. “We have too many old members. They like to fill out forms,” I was told.

Macroeconomics Today

The Bank of England just cut interest rates to 0.25%, announced it will buy 60bn government bonds and 10bn corporate bonds, and reduced its growth predictions (for what they are worth) from 2.3% to 0.8%. There is talk of reducing the rate of VAT. There is talk of reducing corporation tax, which incidentally worries Northern Ireland pundits because a plan to do the same thing there might lose some of its advantage.

I am not sure whether to be happy or sad. I will stick to happy for now, because I am an unrelenting optimist. Could Brexit panic the establishment into turning Britain into Chris Patten’s Hong Kong to save the economy?

Edit: I should have said John Copperthwaite, not Chris Patten.

Samizdata quote of the day

“The advocates of the minimum wage and its periodic boosting reply that all this is scare talk and that minimum wage rates do not and never have caused any unemployment. The proper riposte is to raise them one better; all right, if the minimum wage is such a wonderful anti-poverty measure, and can have no unemployment-raising effects, why are you such pikers? Why you are helping the working poor by such piddling amounts? Why stop at $4.55 an hour? Why not $10 an hour? $100? $1,000?”

Murray Rothbard.

Alice in Wonderland economics

Has the Bank of England finished its campaign of driving down UK base rates and forcibly impoverishing savers ? On the evidence of last week’s Radio 4 programme ‘How low can rates go ?’ hosted by my dear and highly valued friend Martin Wolf, the answer is unclear. But a host of government-appointed technocrats from around the world, including Mr. Kuroda, were wheeled out in defence of a monetary policy that severed any ties it might once have had with the real world quite some time ago. (Victor Hill, reviewing the programme, calls it ‘Alice in Wonderland’ economics.)

– Tim Price writing about Monetary Terrorism.

One has to wonder about the true motives of people opposed to “sweatshops”

In June, the Sun newspaper in the UK claimed that a factory in Sri Lanka that produces a line of clothing for a popular singer Beyonce is using sweatshop “slaves.” The report attracted little interest in Sri Lanka, partly because attention was more focused on the devastating floods that hit the island. But perhaps the report also failed to make waves because it simply did not ring true; the mainstream apparel factories in Sri Lanka are seen as responsible and respected employers in the formal sector.

– Ravi Ratnasabapathy, writing an article called Why Sri Lankans want to work in Beyonce’s “sweatshop”

However I think Ratnasabapathy might overestimate both the wits and honesty of the people who criticise such forms of employment in the Third World.