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

“What I find fascinating is how many intelligent people are willing, even feel urged, to provide intellectual support for a system that is not the result of intellectual discourse but came about – rather non-intellectually – through sheer power politics, opportunism and hubris, and that is evidently failing. Our financial system (or non-system) offers a great example of Nietzsche’s dictum that investigating the true origin and the true motivation behind things most often leads to surprising results. The purpose and the clever design that most people later believe to be behind various institutions are often only projected onto them with hindsight.”

Detlev Schlichter.

As regular commenter “Laird” said the other day, compared to the chicanery that is modern central banking, the row about the LIBOR business is small beer indeed.

Boris Johnson’s Olympic Welcome

Incoming from Michael J, drawing my attention to this video of the Mayor of London flagging up the Olympic Games in appropriately manic style, minus a great deal of piss that has been edited out of him, so to speak. The official grand opening is tomorrow.

Right at the end, in the one bit of Not Boris, someone shouts: “I hate Sebastian Coe!” This, if I am not mistaken, was Jeremy Paxman. I did not know he felt that way about Coe. (LATER: He doesn’t. Or not publicly. Not Paxman. See first comment.)

This sort of thing is the twenty first century’s version of pelting those who consider themselves Great and Good with vegetables.


More on Boris Johnson here: here and here.

French philosopher turns anti-Green

French intellectuals are, on the whole, a rather annoying group of people, notorious for confusing obscurity and verbosity with profundity, and for whom the regular use of words ending in “-isation” is a substitute for rather than an aid to clear thinking.

Nevertheless, when French intellectuals change their minds about something of significance, it signifies. Whether this is because they actually influence any persons other than other French people, and mostly only each other, or whether it is that they influence nobody but do have a highly developed sense of which way the intellectual winds of the world are blowing and when they are shifting in direction, and hence how to sale with them, I do not know. But, one way or another, these people do count for something.

So the fact that one of this tribe, Pascal Bruckner (a “celebrated French philosopher from the centre left”), has decided that environmentalism has now become a load of despotic hooey is, I believe, quite significant.

I remember when these people turned en masse against Soviet Communism, either because it had “betrayed” Communism (bad) or because it was Communism (bad), in the late nineteen seventies. That meant something then.

And this (“Scorning the propaganda of fear”) means something now.

Changing the world one tweet at a time

I recently had this conversation on Twitter:


Rupert Murdoch said something and I replied. Someone else overheard and I sent him a link to Madsen Pirie’s series of videos about economics. Well, how would you answer that question in 144 characters? Now one more person knows that there is such a thing as Austrian economics.

I am not surprised to encounter people who have never heard of it. “Economists” are presented as a homogeneous blob by the mainstream media. It is nice to be asked about it and to have the answer be appreciated.

Good sense on the LIBOR issue

From Foreign Affairs:

“The scandal has sparked calls from politicians, including Mervyn King, the governor of the Bank of England, for stronger regulation of the world’s most powerful banks. But such proposals miss a key point: Price fixing and manipulation are illegal. They have been for a long time. So it is unlikely that saddling financial markets with legal constraints that simply double down on what is already on the books will help. A better solution would go to the heart of the problem. Regulators and market participants should set such benchmark interest rates as Libor in a way that makes them reflect movements in the market, making manipulation impossible.”

“The fundamental principle underlying floating rates is to allow the market to determine borrowing costs. Customers who borrow on a floating-rate basis, if they are sensible, and institutions that loan money on a floating-rate basis, if they are ethical, therefore expect two things from a benchmark interest rate. First, the benchmark should reflect actual conditions in the financial markets. That means no random fluctuations — money costs what it is worth. Second, the benchmark rate should not be easy to manipulate. No rational, informed borrower would borrow money at a variable rate of interest and then empower the lender to determine when and how the interest rate changed in the future.”

This is one of the best and most incisive explanations of what is wrong with the current system of averaging out interbank rates – as done via the British Bankers’ Association – and what needs to be done to avoid a repeat. Refreshingly, the article, written in the sort of publication that policymakers read, does not call for more regulation, which is definitely not what is needed.

A sunny day at the Oval

Yesterday, Michael Jennings fixed up for the two of us to take advantage of the relative cheapness of final day tickets for a test match in England. Accordingly, yesterday morning, we and the many others with the same idea made our way to the Oval, home of Surrey County Cricket Club (which I support) and just across the river from where I live, to watch the fifth and final day of the first test match, of a mere three this summer between England and South Africa.

And the big news, from the point of view of any cricket atheists reading this, is that it really is now summer, finally. Look at all the clouds in these pictures. That’s right, there aren’t any. Click on them for bigger versions with more sky. Sill no clouds:

OvalPavilionS.jpg  OvalTVCameraS.jpg

On the left there is the view of the old pavilion and associated buildings and stands. On the right is a TV cameraman high up above the new stand, to our right as we sat.

And we sat, in the sun, for the two two hour sessions that it took for the game to end. I had thought of everything else. Camera: tick, obviously. Food: tick. Drink: tick. Binoculars, which I didn’t use, but: tick. But, sunhat: not tick. “Sunblocker”: not tick. Today, the day after (similarly hot and cloudless) my face is very red and feels like it has been punched just below my left eye. My right hand has also had a good sandpapering.

But it was a fine day out nevertheless, given that I had my camera with me. I know I keep saying this in various blog postings, but I can hardly find words to communicate how much more I enjoy days out like this, now that I can take a digital camera with me and concoct a photo essay about it all later, and then, much later, look back through the photo archives, or maybe read again a blog posting like this one, and relive it all again. What’s a touch of the sun when set beside that? → Continue reading: A sunny day at the Oval

India Today on cotton farmers

I have been playing on my Asus Padfone (review to follow) with an app called Zinio, which lets users buy electronic versions of print magazines. It came with a free sample of the November 2011 edition of India Today. As far as I can tell the magazine is run and written by Indians. According to Wikipedia it is published in Hindi, Tamil, Telugu and Malayalam as well as English. So I imagine it provides some kind of snapshot of the opinion and thinking that is going on inside India, rather than an outsider’s view. The cover story was about cotton farmers who are committing suicide because they can not pay their debts. A boxout by Dhiraj Nayyar entitled “Government the Culprit” reads:

Rahul Gandhi has a straightforward explanation for why farmers in Vidarbha commit suicide. Speaking on the perils of globalisation on October 18, he said, “The farmer in Vidarbha drinks pesticide as global prices tumble.” The economics behind the suicides of cotton farmers in Maharashtra is more complex.

Contrary to Rahul’s claim, it is the Government which has done more to depress the prices of cotton than the international market has. The Government has imposed numerous restrictions on the export of cotton since April 2010. This has led to a decline in the domestic price that farmers get.

The use of genetically modified Bt cotton has been at the centre of controversy, with activists blaming it for the plight of farmers. Evidence suggests that Bt cotton has been good for farmers. A position paper published by the Foundation for Biotechnology Awareness and Education, an NGO, quotes five independent academic studies conducted after the launch of Bt cotton in 2002, that say that Bt cotton has increased yields in India by 30.9 per cent to 63 per cent. The increase in profit to farmers, according to these studies, has ranged from 50 to 110 per cent over non-Bt cotton.

This seems like sound thinking so far. I wonder why the Indian government would restrict export of cotton.

While Bt cotton is resistant to pests, it is not resistant to droughts. So crops still fail.

In normal course, farmers are entitled to a concessional financial bailout from the local administration or public sector banks. They don’t always get it. “The administration will only help if the farmer was using a seed approved by the Government. A lot of farmers use unapproved seeds”, says [agricultural economist Yoginder] Alagh. By his estimate, there are 20 large firms and anywhere between 200-300 small firms which sell Bt seeds. Most small firms aren’t Government approved but sell seeds cheap. Banks are usually reluctant to lend to indebted farmers because they lack collateral. That sends farmers into the clutches of moneylenders who charge between 25 and 40 per cent interest instead of the 7-9 per cent charged by banks. It isn’t Bt cotton that has failed farmers. It is the failure of back-up systems that has.

I am not so sure about this appeal to government bailout schemes. The implication here is that the government is wrong to favour seeds from certain suppliers. There may be rational reasons for doing so, such as seed quality, or there may be political connections with certain suppliers. I imagine that a free market solution, such as insurance or futures trading, would be more likely to make only rational and proportional restrictions. Could the government scheme be crowding out such solutions?

In any case, I am encouraged to detect a somewhat pro-free-market stance in a mainstream magazine in India.

Further evidence that the UK government is full of morons

The stifling impact of being run by so-called “moderates” continues. On the BBC TV this morning, the programme is leading with the fact that a government finance minister, some hopefully soon-to-be-gone creature called David Gauke, is attacking people who have ever paid a builder, plumber or garage mechanic in cash so as to avoid paying VAT. Mr Gauke told his TV interloctor, in words that may haunt him, that he has never done any such a naughty thing, oh no.

The context for this is that the UK government has recently announced a campaign against what it defines, with worrying vagueness, as “aggressive avoidance” schemes. Not just “avoidance”, which is what happens if you hold a tax-advantaged fund such as a Self Invested Personal Pension, or if you do not smoke (avoiding tobacco duty), or don’t drive (avoiding petrol tax) or drink (etc). No, “bad avoidance” is if you structure your financial affairs in such a way as to pay as little tax as you can do so without actively defrauding anyone. An interesting notion. As we know, the UK comedian Jimmy Carr was recently hit by exposure of his tax-planning, and other celebs and sports folk have sometimes got into similar sorts of arrangements.

In as much as governments need to exist at all – and I am not an anarchist – there is a legitimate argument about the least-bad way to do this, and the simpler and flatter the tax regime is, the better. A huge chunk of this tax planning industry from which people like Jimmy Carr make use would vanish in a puff of smoke if our system was overhauled on the sort of lines recently proposed by the 2020 Tax Commission.

The trouble with the stance taken by Mr Gauke is that he presumes that there is some correct chunk of our wealth to which the State has presumed to take a share, and that any action we take to avoid tax might increase the tax burden paid by our fellow citizens. But what this man seems to ignore is, a), that an economy is not a static pie where my action must negatively affect someone else (that old zero-sum problem again), but an economy is something can grow through mutually beneficial trade, and that that, b), in a tolerably free society, the level of tax that citizens will pay has its limits, even if people don’t go in for some of the more artificial wealth structures to minimise tax (bearing in mind that it costs money to get an accountant/lawyer to set these schemes up).

Also, suppose that, instead of getting a builder into do a bit of work for cash to smarten up my flat or tackle an issue, I try and get a mate around to do the job for me in return for buying him a nice bottle of wine or editing some material for him/her? Is this not also wrong in the eyes of Mr Gauke? I guess it is. Even before I have done anything, the State is saying: “I want a piece of whatever action you engage in”. Taken to extremes, this penalises work over leisure. It is not surprising what the results are.

At root, this is a matter of basic political philosophy. In the main (there are exceptions), the current Conservative Party and its Liberal Democrat coalition partners subscribe to a deeply paternalistic, communitarian outlook of the sort that Barack Obama, in his recent communitarian-leaning “you did not build that” speech, could identify with. This is also a sign of how under Cameron, the Tory party has reverted to the older, more trade-disdaining traditions of old and away from its Thatcherite strains. How’s that working out for us?

People who make a living by getting paid in cash to fix windows, respray cars or mend pipes are not an evil. In the vast majority of cases, they are doing something about which someone like David Gauke, David Cameron or Barack Obama have been ignorant of all their lives: earning a living, and providing people with goods and services in a free market. They might as well try and understand life on Mars. It is shame we can’t send them there.

Update: The Daily Telegraph weighs in. It is not impressed by Gauke.

Care in using sport as an example for other things

It is inevitable. The day after Bradley Wiggins (about whom Patrick Crozier wrote here) rode to victory in the Tour de France, becoming the first British winner of this famously brutal event, London’s mayor, Boris Johnson, took hold of this feat, and the upcoming Olympics, to make some points about what might appear to be a very different issue: the UK economy:

“As you listen, you realise that these performances were the result not just of physical genius, but also of colossal intellectual and emotional effort — years of self-discipline. The Olympics, in other words, is about character. It’s about the will. Of course, as Baron de Coubertin was at pains to point out, it is not all about winning. But if you want to win, then you need to work. That is the basic message of the Olympics.”

There is a problem here. Sport – so long as it does not involve cheating the rules (key qualification) is a strict meritocracy, and effort and reward hopefully are closely aligned, although that doesn’t allow for the blessings of inborn physical and mental capabilities, nor that of simple luck. There is, in my view, a danger in supposing that the qualities that are good in sport can be easily carried across into other fields. One thing that Boris J. probably understands better than some of his fellow Conservatives is that with sport, it is, at least as far as competitors are concerned, zero sum. If Bradley Wiggins wins the Tour, that means someone else doesn’t, and so on. It is not of course zero sum for the spectators and fans who get a vicarious sense of enjoyment from watching it all. But in a free economy, there is a positive-sum game: everyone “wins” as the economic pie expands as more efficient and effective ways of delivering goods and services are arrived at. And to do that, requires, not some sort of endless preaching about the need for hard work and conquest of pain, but about allowing free men and women to interact how they want, subject to as few impediments as possible from the State.

The late Robert Nozick once criticized the notion that inheritance of wealth is unfair by pointing to how people who say this often liken their ideal society to a sort of athletics race, where there is a track of fixed length, a fixed starting point and end, and a set quantity of runners seeking to acquire a pre-determined prize. A free, open society is very different. It is, as he said in Anarchy, State and Utopia, about people exchanging different things with one another without worrying about any set starting point or finishing line.

Like Boris Johnson, I agree we can and should be inspired by the courage and determination of people such as Bradley Wiggins and other athletes. Let’s not, however, confuse a sadistic 3-week peloton through the French countryside with what needs to happen to revive an over-regulated and over-taxed economy.

In the meantime, well done to Wiggins. Fantastic achievement, and he appears to be a likeable bloke as well. I hope he can cope with some of the fame and hangers-on who will be attracted to his presumed new wealth.

Well done Bradley Wiggins, ruthless professional

At some point in the next 24 hours* a Briton clad in figure-hugging lycra the colour of a canary, wearing sideburns the size of a département and sporting the logo of the MSM’s least favourite organisation will cross a line on the Champs Elysées in Paris and become the winner of the Tour de France. It will be the greatest achievement in British sporting history.

I say “greatest achievement” because there is nothing to compare with the Tour de France. It is by far the toughest event in sport. Just to complete the course is an achievement – three weeks of aching legs plus burning lungs plus crashes plus saddle sores plus mountains thins out the densest of fields. It towers above other events in cycling. Sure, the sport may have a World Champion (a Briton, as it happens) and Olympic champions (including many Britons) but the winners of those competitions would give their eye teeth (plus molars, incisors and anything else they could find in their mouths) to win the Tour.

Up until recently Britons had never been particularly good at cycling and awful at the Tour de France. Prior to the 1990s only one Briton had ever worn the leader’s yellow jersey. In the 1960s the British team – it was run on national lines in those days – had to pad itself out with anyone who could get a passport. This included one rider, Michael Wright, who despite being born in England with an impeccably English name could barely speak the language.

So, what happened? Reading between the lines of an ITV4 documentary the other night the answer would seem to be ruthless professionalism. Team Sky, Wiggins’s employers, building (loathe as I am to admit it) on state-funded Olympic success have left almost nothing to chance. Wiggins’s training has combined significant weight loss (so he can climb faster) with special exercises to strengthen his lower back (so that his torso has greater rigidity which creates less drag so making him time trial faster). His highly-talented team mates have had to sacrifice their own ambitions for that of the team. Twice, mountain specialist Chris Froome (who will be runner-up tomorrow and may well go on to win the Tour in years to come) has had to wait for Wiggins when a stage victory was there for the taking. Meanwhile, Mark Cavendish, the greatest sprinter in the world, has spent large parts of the tour as little more than a water bottle carrier.

By the way, I can’t help notice that the team’s sponsor, Wiggins’s coach, his late father and a couple of the riders are/were Australians. So, Australia’s greatest ever sporting achievement then, if it wasn’t for the fact that an Australian won it last year? Oh, and the fact that they count test cricket as a sport.

* Barring a truly bizarre set of events or a positive dope test. (It will not, not, not be to do with someone riding faster than him.)

Thoughts on Toby Young’s new school

One of the few policy areas where the current British government at least appears to be making some headway is education. Here is an article by Toby Young, describing what he confidently believes is such progress, and I hope he is right. (Earlier thoughts by me here about Toby Young’s educational ideas and efforts here.)

Whether, in the longer run, these new free schools will go anywhere especially good remains to be seen. Two thoughts about them occur to me.

First, the customer is still, at least partly, the government. Government money follows the choices of parents. But what if a future government, rather than going to the bother of totally shutting down such schools, started instead following its own money and demanding all kinds of relatively subtle changes and impositions, with a view to grinding them down a little less publicly, and then blaming them for the failure that was inflicted upon them? That’s not at all hard to imagine.

When truly free markets start, they often do so in a very muddled way. Only when the worst of the muddle is sorted does progress then get seriously under way. When, on the other hand, there is immediate improvement, of the sort that Toby Young describes in his article, that can mean merely that government employees have been replaced with other government employees. At first, the new government employees do a better job. Later, progress falters, and eventually things start getting worse, again. The best public bid becomes replaced by the most enticing private bid, made covertly to the politicians. There’s been a lot of that lately.

It is tempting for right wingers to assume that, merely because the slighted government employees – in this case the old school unionised state teachers – are angry about having their monopoly snatched away from them, that the new approach must necessarily be a wholly good thing. Sadly, it does not follow.

My second thought concerns the rules that these new free schools must follow. My question is: Are they allowed to threaten expulsion to pupils they decide they don’t want to keep? I can find no answer in Young’s piece, but suspect that they probably can. If that’s right, then that really is a huge step in the right direction, towards freedom of association.

That may sound an unnecessarily depressing, even belligerent, way to talk. But in schools, in my limited but still very real and quite recent experience, the right to expel is the biggest single difference between success and failure.

Paradoxically, if you can expel, you very seldom actually want to, because the mere hint of the threat solves your problem. But if you cannot expel, you cannot threaten it either, and problems then multiply. Add that to the fact that, quite properly, you also cannot threaten tortures of the sort that used to be routine in schools but which are now frowned upon (like severe beatings or solitary confinement or compulsory hard labour), and the school has literally no power over its pupils, other than its power to amuse. As soon as those pupils work that out, the ones who prefer mayhem to learning or even to being otherwise entertained become the rulers of the place. There is simply no way to control them. At that point, just about everyone involved wants out of there.

I have personally witnessed this kind of thing, when doing various stints of volunteer teaching. The problem was not the age of the pupils or the incompetence of the teachers. In other circumstances the same pupils would have behaved fine, and in other institutions the teachers would have done fine work, a fact that many failing teachers act upon, thereby becoming successful something elses. The problem was the rules.

If Toby Young’s school is obliged to go on attempting to educate whichever pupils they are at first happy to welcome but later wish they hadn’t, then look out Toby Young. Trouble. Just as corruption and monopolised failure takes a bit of time to organise, so too does it take time for pupils in a place like Tony Young’s school to work out that the people bossing them around are actually defenceless against determined rebellion, if that is the situation. But if that is the situation, the pupils will work it out, and that will have consequences, of the sort that Toby Young will not like at all.

If, on the other hand, Toby Young and his comrades can simply say to such potential rebels: “Our gaff – our rules – break our rules and ignore all warnings, and you’re out”, then the problem won’t even arise, because the mere hint of expulsion will end such problems at once.

Expulsion is the opposite side of the coin to the right to leave, the coin being (see above) freedom of association. Freedom of association is, I think, one of humanity’s very best ideas. If all those present in some institution prefer, however grudgingly, being there to not being there, and if everyone there is tolerated, however grudgingly, by everyone else, then everything just works so much better. There may be lots of other problems, but tackling them becomes so much easier if all those who don’t even want to solve those problems can be told to get the hell out of there, or can just get the hell out anyway.

Samizdata quote of the day

“Obama also wishes us to believe that, because successful producers learned something from government teachers, used government roads and bridges, employed government research, and the like, this means they don’t really own their success or wealth. Rational Americans know full well that the government funds such things by forcibly confiscating the wealth of producers. Rational Americans also know that a bum is as free to use a government bridge as is a successful business owner, but the business owner chose to apply his intelligence and work hard to build something great.”

Craig Biddle.

In some ways, Obama’s assertion that we don’t really deserve credit for, or earn, what we produce because of such factors is a bit like the idea that the guard-dog that protects our house owns it, not the owner. I get the impression that Obama’s comments are causing him quite a lot of damage, and I hope he continues to be pounded for them.