“One of my top scientists has four kids. How is he going to provide for his kids without profit?” So says Martin Shkreli on this week’s Milo Yiannopoulos Show. Shkreli is supposedly the most hated man in America for raising the price of the drug Daraprim from $18 per dose to $750. The way he tells it, it was like buying a wine company that was selling wine for $2.50 cents per bottle but losing money, when all the similar wine was selling for $100 per bottle. He saved the business.
He described being interviewed on CNBC, a business news channel.
I went on there and it felt like they were shaming me for raising the price of Daraprim and I’m sitting there saying, “all fucking day, 24 hours a day all you talk about is profits, and my profits are inappropriate?
Milo laments the regression of America from a place that celebrated success to one where the media and the government like to punish rich people. Shkreli pointed out how people used to love to hate Bill Gates, but they do not any more, now that he is giving he money away. “What else did they think he was going to do with it?” he asks, pointing out that once you have one billion dollars, you can no longer really spend any more on yourself.
Shkreli has been arrested on fraud charges. He says the charges against him make no sense, given that his investors are making lots of money.
In the interview he comes across as a fun guy who annoys the right people. His Twitter feed is entertaining, too.
Update: There is something of an Ayn Rand novel about his questioning from Congress.
I am being nudged by Simon Gibbs, who is organising it, to say something here, now, about this Libertarian Home event, about and against taxation.
This event will happen on the afternoon of Saturday May 14th, in Holborn, London. The speakers (see the list here) will include: Yaron Brook; Anton Howes; and a couple of new names to me, “Janina Lowisz, BitNation and Julio Alejandro, Humanitarian Blockchain”. Sounds intriguing, in a twenty first century and good way. I’m guessing that the gist of what they may say will be that the internet makes it possible for things to be crowd-funded and micro-financed and generally supported in ways that not long ago were impossible, and that modern life thus offers even greater opportunities to chip away at and to improve upon the tax-and-spend state, both ideologically and in practice. You could sum those speakers up by saying that there is no need for high taxes in the future (Lowisz, Alejandro), there was no need for high taxes in the past (Howes), and there is no excuse for high taxes ever (Brook).
That nudging I mentioned at the start of this posting is worth emphasising. Based on how a similar event in October 2014 went, which Simon Gibbs also organised, Simon will do whatever he needs to do, having already lined up some good speakers for May 14th, to get also a good throng of people to listen to them and to mingle with and to network with one another. The cost of a ticket is, if you book now, £12, and there is a basic sense in which attenders will be paying their £12 for all that nudging that Simon is now doing, to ensure that this event is a success. The most helpful way that you can support Simon and his nudging would be, if you now know that you want to attend, to book your own ticket, now. To tell Simon, now, that you will be attending, go here, and click on the bigger and lower of the two red rectangles saying: “Join us!”
I could expand, on the wrongs of taxation, on the particular excellence of Anton Howes as a speaker and as an up-and-coming libertarian historian and intellectual, on how interesting and how well organised and welcoming that October 2014 event was (at which Yaron Brook also spoke), and how many attended it, and so on and so forth, but Simon wants the word on this latest event on May 14th to spread now, and he wants this posting to go up now. So, up it goes, now.
Taxation is of course a very topical subject just now. If you want more tax talk here, try this.
The recent controversy about the potential closure, by India-headquartered Tata, of the steelworks in Wales (formerly owned by Corus) has revived old memories of when the UK government (ie, the taxpayer) owned steelworks. It was an unhappy episode. The picture of middle-aged men, in “tight-knit communities” (the cliches write themselves) losing their jobs with not much immediate prospect of getting another job (such men are, apparently, incapable of doing this), is politically toxic. (Interestingly, the role that anti-carbon policies, enacted to prevent global warming, have played in hurting such industries isn’t getting all that much attention as far as I can see. Does. Not. Compute.) Never mind that tens of thousands of bank staff (not all “fat cats”) have been given their P45s in recent years – when steelworkers are given the bullet, it has a visceral effect on the public imagination of a kind that is very different. People can easily visualise the value of making steel, used as it is in many modern industrial products; they cannot so easily figure out the worth of people processing interest rate swaps transactions, for example. Also, the bank bailouts of 2008-09 mean that for a new generation of voters, the idea of bailing out a failed set of institutions, while unpleasant, isn’t off-limits. If we must bail out banks, so the argument goes, let’s bail out steel. (Just as, in the US, the same kind of logic was used to justify bailing out GM, shafting GM creditors in the process.)
Momentum is building for the current government to nationalise the steel factories, a prospect that no doubt would have appalled the late Margaret Thatcher. The present Business Secretary, sometimes billed as a future Conservative Party leader, has said that part-nationalisation is an option. One of the arguments used to make the prospect more palatable to people otherwise wary of the whole notion is that Britain needs a core capacity to make steel, because we need to be able to build weapons in times of war, for example. (A similar argument is sometimes used to defend protection for forms of agriculture; the UK imports many foodstuffs but has been vulnerable to blockades and attacks on shipping in previous world wars.)
But if this military-need argument really is as strong as is made out, then there is a case for saying that the most cost-efficient (from the point of view of free market economics and taxpayers’ interests) isn’t nationalisation, or the alternative of just shutting down plants, but a sort of strategic reserve. To some extent, in a free market where there are futures and options markets for commodities such as iron, etc, those much-maligned speculators will hoard steel/other during a market glut and wait for prices to rise before selling, and vice versa. If there is a more pressing military requirement that cannot be easily slotted into this market argument, then a “strategic steel reserve” might be an idea, as the investment advisor and former Comservative Party parliamentary candidate Douglas Hans-Luke says. (I don’t endorse all of his views, I should add.) It is an idea worth considering, and arguably, just as an individual should keep a first aid kit, flashlight, water purifier, set of knives, screwdrivers and fire-lighting items and other emergency tools handy, and learn how to use them, so should a country. It is, arguably, a basic requirement of even a minimal state to have that “emergency toolkit” in the cupboard, just in case. Even better, in a healthy civil society, the public should have these things, and be encouraged to learn how to use and store them. And of course that includes firearms and types of working knives, a subject about which the UK lost the plot years ago. It is, I understand, a crime to carry a Swiss Army knife in your pocket in the UK, for instance. Ironically, such things are made out of high-grade steel from places such as Sweden.
An emergency steel reserve sounds a lot easier to defend than nationalisation, not least because it is rational on its own merits. I’m ready to be convinced otherwise. How about every schoolkid gets taught how to make steel and weld during science class?
At the weekend, the left-wing firebrand Polly Toynbee lamented the “extraordinary growth of inequality”. She has previously described it as “soaring”. The Observer columnist Will Hutton has said that the income gap is “ever-increasing”. It has become a factoid that the income distribution is widening year-on-year, especially after the financial crisis. And yet, these claims are just not true. To uncomfortably paraphrase Ronald Reagan and Mark Twain, the trouble with our left-wing friends is not their ignorance about inequality in the UK, but that they know so much that ain’t so.
– Ryan Bourne.
The final paragraph of this article has a lovely sting in the tail.
King is aware that monetary policy has been used to provide short-term gains at the cost of long-term pain – what he calls the “paradox of policy”. Despite extremely low rates, the global economy remains out of kilter. It’s a pity that King never considers Friedrich Hayek’s early work which suggests that economies become unbalanced when central bankers impose an inappropriate interest rate. But as King buys into the “savings glut” story, he doesn’t believe that monetary policymakers are to blame. For the man in charge of the Bank of England when UK bank Northern Rock went down, this is a convenient if not quite satisfactory conclusion.
– Edward Chancellor
In Africa there is a humanitarian emergency unfolding that has largely escaped the world’s attention. It is a prodigious drought and it holds much of the continent in an unforgiving grip. Here in Ethiopia it is reckoned to be the worst for 50 years. The culprit is long-term climate change coinciding with a hot and unwelcome blast of El Nino. The result? Successive rains have failed. And when the rains fail, so do the harvests. In a nation where three quarters of the population relies on farming, that’s a disaster. And so a great hunger has arrived which will render as many as 15 million people in need of urgent aid.
The ruling party in Ethiopia is the Ethiopian People’s Revolutionary Democratic Front. The name says a lot. Wikipedia details concisely their ideology.
The front views liberal democracy and free market capitalism as decadent, and has a “romantic attachment” to the beliefs of Vladimir Lenin…
That would be the kind of decadence that lets us feed ourselves when the weather is bad.
The Wikipedia article cites an article in the Addis Ababa university paper.
Not forgetting ‘revolutionary democracy’ as a pervasive and effective yet out-dated alternative to the ‘‘ill-fit and unsustainable liberal democracy’’, it is undeniable that EPRDF’s economic results owe their little success to the liberal economic reforms pushed into results by a powerful state.
They fucking know what they have done, and what they should do to fix it.
What most of us would like is for the Government to spend less and leave us with more of our own money. If Messrs Cameron and Osborne now get caught up in a tidal wave of popular resentment against the avariciousness of the rich they will only have themselves to blame for playing footsie with the Left’s analysis that wealth creation is to be despised, inheritance is evil and judicious tax planning is immoral. Rather than mount a robust Tory defence of the virtues of material success backed by lower or flatter taxes and affordable public spending, they have burnished their so-called One Nation credentials to avoid being portrayed as out of touch, privileged and posh. There may well be activities exposed by the Panama Papers that will warrant criminal investigation. But this story has been hijacked by anti-capitalist campaigners who think all our earnings should be handed over to the state to be redistributed by Jeremy Corbyn and his followers. They simply cannot understand the aspirational instincts that drive most people, and they never will.
– Philip Johnston, one of the many who are writing about the Panama Papers affair.
As an aside, one issue that hasn’t been directly faced in the commentaries is this: if it is appalling for journalists to hack phones and steal private, confidential data in pursuit of politicians, celebs, etc, why is it noble and good to do so when this involves leaking millions of account details, many of which are about people who haven’t committed any crimes? Ok, it is in the public interest, will be the retort. But who gets to decide this?
Well I heard a terrible April Fool’s trick today on BBC Radio 4, some economist chap talking about a hike in the UK’s minimum wage, saying that raising the minimum wage boosts the economy as there will be more money to spend in retail etc.
– Mr. Ed
There is a steelworks at Port Talbot in south Wales owned by the Indian Tata group, which is losing money hand-over-fist. The owners appear to have thrown in the towel after 9 years, and are looking for a buyer, for a works losing a reported £300,000,000 a year. So poor old Tata is consuming its capital to the detriment of its investors, and the benefit, for now, of its staff and contractors.
The reaction to this disappointing news about the works, which will doubtless be devastating for those who work there and rely on it for their own livelihoods, seems to be that ‘something must be done’, but once again the Broken Window Fallacy should be borne in mind.
At present, the UK government appears to be tempering calls for nationalisation of steel works, although one Conservative MP, Mr Tom Pursglove, has come out to call for nationalisation, pointing out that Brexit would make it easier for the UK government to grant state aid to industry.
Conservative MP Tom Pursglove is delivering a letter to the prime minister this afternoon calling on the government to ignore EU rules on state aid and consider nationalising the steel industry. As a prominent campaigner for Britain to leave the EU, it is no surprise that he believes Britain would be in a better position to protect the steel industry if we were not bound by EU rules. Those on the other side of the referendum debate point out that the EU is our most important market for steel, with more than half of our steel exports going to the EU and more than two thirds of our imports coming from it.
As my maths teachers used to say ‘Show your working!‘. Funny how EU rules on State Aid don’t seem to apply to farming.
What is truly depressing is that almost no one, apart from a valiant chap from the IEA I heard on Radio 4 news this afternoon, is suggesting that a steel plant should be profitable, the Zeitgeist seems to be that the plant should simply exist. However, there are reports that the Chinese government is subsidising steel exports by selling it below cost price. The IEA chap on Radio 4 said that China has, in the past 2 years, produced more steel than the UK has produced in its entire history (but there are many different kinds of steel, and they are not fungible).
Is anyone scared that China will up the price of steel once it has caused much capacity in the rest of the world to shut down?
The whole notion that culture can be “appropriated” in any negative sense is one of the most absurd notions being bandied about (and that is really saying something given the carnival of absurdities that passes for critical thinking these days).
Such ideas about culture are profoundly fascist in origin, a collectivist notion that somehow culture and identity must be preserved in a “pure” state from outside influences and somehow “belongs” to an ethno-national grouping. It is very much akin intellectually to abominating miscegenation. Yet strangely the same people who spout such arrant nonsense tend not to picket performances featuring oriental ballet dancers or black opera singers (as well they shouldn’t). Sorry (not really) but the future is cosmopolitan and voluntary. I will take whatever aspects of any culture I think are worth incorporating and there is not a damn thing anyone can do to stop me. And if some collectivist jackanapes is offended by my “appropriation”, well take a guess how many fucks I give because that just makes it all the more delicious
It cannot be said too often and it is especially pertinent right now, given the state of the world’s economy now, and in particular given how America’s Presidential candidates are talking now: The Great Depression was both caused by and then horribly prolonged by bad governmental and political decisions. The Great Depression was not caused by unfettered capitalism. Throughout this unfolding disaster, capitalism was very fettered indeed, and it was these ever-tightening fetters which proved to be so disastrous:
The genesis of the Great Depression lay in the inflationary monetary policies of the U.S. government in the 1920s. It was prolonged and exacerbated by a litany of political missteps: trade-crushing tariffs, incentive-sapping taxes, mind-numbing controls on production and competition, senseless destruction of crops and cattle, and coercive labor laws, to recount just a few. It was not the free market that produced twelve years of agony; rather, it was political bungling on a scale as grand as there ever was.
That is the final paragraph of Lawrence W. Reed’s demolition of Cliché of Progressivism #33 (that it was all the fault of “Unfettered Capitalism”) for FEE (the Foundation for Economic Education). I was steered towards this piece because of its Quotulatiousness. That blog quotulates a few of the early paragraphs of Reed’s piece. I say: read the whole thing.
Almost as important as how the Great Depression began and was prolonged is how it ended, just after World War 2, as Reed also explains very well.
If you want a bit more detail about that recovery, and in particular of its politics, try reading the chapter on mid-twentieth century America in JP Floru’s book Heavens on Earth (SQotD-ed here), which is about eight such happy episodes around the world in recent times. The world now knows, in the words of Floru’s final chapter heading (also the sub-title of his book), “How To Create Mass Prosperity”. Or rather, the sensible parts of it do. The only uncertainly about the free-market, non-interventionist policies that Reed and Floru recommend is in whether such policies will be applied in the first place, and whether they will then be persisted with.
See also this earlier posting here, which reports on, among other things, a ding-dong I had with Lord Skidelsky concerning this exact same point.
In the charged atmosphere in US and other countries’ politics at the moment, immigration, legal and illegal, is a hot topic, to put it mildly. As regulars here know, a key point is that immigration/emigration cannot be divorced from issues such as whether the chosen destination of a migrant has a welfare state, or not. It is worth, with all that in mind, to remind ourselves that on the whole, migrants tend to be highly motivated people, not the malevolent “snakes” that Donald Trump (whose ancestors were immigrants, and we don’t know how fully documented they might have been) might put it. Here is an item from the Wall Street Journal:
A new non-partisan study on entrepreneurship gives some credence to the tech industry’s stance that American innovation benefits from robust immigration.
The study from the National Foundation for American Policy, a non-partisan think tank based in Arlington, Va., shows that immigrants started more than half of the current crop of U.S.-based startups valued at $1 billion or more.
These 44 companies, the study says, are collectively valued at $168 billion and create an average of roughly 760 jobs per company in the U.S. The study also estimates that immigrants make up over 70% of key management or product development positions at these companies.
The foundation examined 87 U.S. companies valued at $1 billion or more as of Jan. 1, as tracked by the Journal’s Billion Dollar Startup Club. The authors of the study used public data and information from the companies to create biographies of the founders.
Of course, as I anticipate some commenters might say, these immigrants are, one assumes, legals, and they haven’t overstayed their visa terms or they did not jump over any fence. But for what it is worth, these achievements would be no less notable even if they had not been entirely legit as stands under existing law.
There is a lot of fear in Western politics at the moment, and it is all too easy to forget the many positives out there. Remember, politicians who want to expand the State usually thrive when people are scared, or made more scared.