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

No place has got rich – that is, the population enjoying a multiplicity of those three squares and a roof – without being roughly capitalist, roughly free market and trading across the borders of that place or society. Non-capitalism, non-marketism and autarky just don’t produce the result. We can and should go further too. Any place that is rich has been that roughly capitalist, marketist and tradist for some time now. Those places that have only in recent decades adopted the trio are getting rich. Those that still haven’t done so are still poor.

Sure, there’s a spectrum of possible policies, from Sweden’s tax heavy social democracy to Hong Kong’s near laissez faire. But that is a spectrum that always includes our trio.

Tim Worstall

15 comments to Samizdata quote of the day

  • Ferox

    As a proof by construction, imagine a country whose territory consisted of the entire Earth.

    Its trade policy would of necessity be one of autarky, there being nobody else to trade with. And the effects of that trade would be identical to those in a world consisting of independent free-trading countries.

    The point being that autarky works fine if the country is large enough to produce all of what it needs on its own. Not ideal, probably, but to determine that you have to compare the costs and benefits of autarky to the costs and benefits of trading with other countries whose governments and people are determined to cheat and harm you at every turn.

  • APL

    “No place has got rich – that is, the population enjoying a multiplicity of those three squares and a roof – without being roughly capitalist, roughly free market and trading across the borders of that place or society.”

    Is that even true?

    Under the capitalistic circumstances of the industrial revolution, where the Iron and Steel barons, the Coal mine owners, the rail magnates made themselves extremely rich, the fraction of the population enjoying ‘three squares and a roof’ was relatively small, the itinerant population very high.

    Capitalist industrial times was when the foul pestilence on mankind of Marxism was conceived, founded on the fact that large fractions of the working class were not getting ‘three squares’ and generally lived in abject squalor.

    We did not live in a capitalist organized society last year, and we certainly do not today.

    The wealth we all take so much for granted, certainly during my lifetime was in my opinion due to expansionary managed monetary policies* coupled with technological advances.

    All through the latter half of the last century, we lived through monetary expansionary and socially redistributive times, the class that superseded the Iron & Steel, the Rail and Coal magnates, has been the employees of the department of circumlocution which has grown like topsy.

    *The exponential growth can be traced to the abolition by Nixon of the gold standard in 1970.
    The destruction of the currency, any currency, took off in 1918, caused directly by the ruinous dynastic war in Europe. And I suspect is reaching its terminal stage now.

  • Is that even true?

    Yes.

    Under the capitalistic circumstances of the industrial revolution, where the Iron and Steel barons, the Coal mine owners, the rail magnates made themselves extremely rich, the fraction of the population enjoying ‘three squares and a roof’ was relatively small, the itinerant population very high.

    Now do the lives of rural folk during the Industrial Revolution. As grim as the live of a factory worker in Manchester circa 1850 might have been, it was worse in the countryside, which is why there was so much movement into the cities. Did the people at the top benefit more? Sure. So what? Not relevant to the thesis.

    Being kinda sorta capitalistic is what ultimately lead the wealth that either trickled down (or more accurately spread out like an inkblot) or was then available to be ‘redistributed’ politically.

  • TomJ

    Besides which, the argument isn’t that everyone will immediately have their three squares &c immediately Timmy’s triad is adopted, rather that none has got to that point where everyone does without adopting them. And note he doesn’t call for a perfect adoption of the policies, merely a rough approximation.

  • Deep Lurker

    And the effects of that trade would be identical to those in a world consisting of independent free-trading countries.

    No, because the independence of those independent free-trading countries would produce wealth-generating differences as well as providing a check on wealth-crushing authoritarian measures, with both those factors being absent in a single-nation world. (Assuming no off-planet free trade in both cases.)

  • APL

    PdH: “Now do the lives of rural folk during the Industrial Revolution.”

    The ‘rural folk’ had been subject to the agrarian revolution so ‘their condition’, stable for centuries had just been thrown into upheaval too, and yes, that upheaval ( viz redundant as a result of efficiencies and mechanisation of agricultural processes ) led to a ready workforce for the industrial revolution to take advantage of.

    So, yes, the condition of many rural folk at that time wasn’t particularly good. But that doesn’t really support your thesis, that Capitalism improved everyone’s lot.

    The thesis is rather a romantic revisionist view of how you’d wish it to have been.

    PdH: “kinda sorta capitalistic”

    Translated: Not very capitalistic at all.

  • Stonyground

    You need to read the post by TomJ again. He concisely makes the case that you are missing the point.

  • Translated: Not very capitalistic at all.

    I get the impression you didn’t actually read the linked article 😆

  • Cesare

    That’s all good and well, but Marxism is a faith based belief system.

  • Stonyground

    Anonymous quote from elsewhere regarding Marxism:

    “Communism was never anything more than a cynical self-serving path to wealth for people who literally have nothing to offer to make society better.”

    Not entirely true because there are always useful idiots who think that it will definitely work this time.

  • APL (October 10, 2020 at 6:48 am) is ill-informed on economic history. (To be fair, many a ‘history’ teacher in schools knows no better).

    The 1800s saw a steady, and (by historical standards) rapid, rise in the UK population. It also saw a steady, and (by historical standards) unprecedented, rise in the wealth of all major classes of the population, definitely including the working class. The working class expended significantly more per head and (because of their increased numbers) far more absolutely.

    The ‘crisis of marxism’ – dedicated Marxists having to reinvent the theory because Marx’ predictions were being more blatantly contradicted by reality than even they could ignore – happened in the 1890s, and it happened in Europe, which was behind the anglosphere in starting to be “roughly capitalist, roughly free market and trading across borders’.

    Extracting this information from raw data – everything from census data to the analyses of Marxists living at the time – is easy. Extracting it from the propaganda calling itself history which later marxists stuffed into history books used by educationalists is rather like extracting statistical data about police shootings from the press releases of BLM.

  • Tim Worstall

    “Under the capitalistic circumstances of the industrial revolution, where the Iron and Steel barons, the Coal mine owners, the rail magnates made themselves extremely rich, the fraction of the population enjoying ‘three squares and a roof’ was relatively small, the itinerant population very high.”

    Hmm, well.

    First off, those markets things worked well for labour. Ooop North where there was the option of going off to be oppressed in the cotton mills farm wages were some 25 shillings a week. And no rent was charged on the potato beds (a surprisingly important part of the compensation package). At the same time in Dorset, quite the poorest part of England having entirely missed the installation of Satanic mills farm wages were 8 shillings a week.

    It would appear that markets with their demand and supply and choices and alternatives worked.

    Further, at the national level, that rise in the incomes of the capitalists and not much in that of the workers is called the “Engels Pause”. Engels himself took it as being just the inevitable outcome of the Satanic mill capitalism thing. More sensible people point out that it wasn’t just the industrial capitalists who got all the cash. It was the landlords too. The solution to which was the abolition of the Corn Laws so they didn’t have a stranglehold over the price of bread, that staff of the working man’s diet.

    The considerable – hisorically unprecedented in fact – sustained and ongoing rise in the living standards of the workers just so happened to start really motoring in the 1840s. You know, when trade was added to that capitalism and market mix.

    Capitalism provides the incentives for innovation, markets the competition to make sure the consumer benefits more than the capitalist and trade means that local monopolies can be confronted, overturned – as well as spreading the division and specialisation of labour over the species not just those under one or other stationary bandit.

    The Industrial Revolution with its mills, chimneys, starving waifs and children stuffed up chimneys is a proof of the trio working. For the reduction in the number of starving waifs came as a result of the IR.

  • staghounds

    The ancient Egyptians and Aztecs did alright.

  • Paul Marks

    APL – your view of the industrial revolution was answered by T.S. Ashton some 70 years ago, in his short book “The Industrial Revolution” – please read the work (or re read it if you have already read it), if you still hold the view that the industrial revolution was a bad thing FAIR ENOUGH, but read the counter argument first.

    Nor is this is just about factories and mass production – the advantage of freedom is NOT dependent on technology. It was one of the great errors of Dr Karl Marx to think that legal and social “relations of production” are produced by technology “forces of production” – it is actually the other way round. The legal and social interactions produce a society which can develop and use the technology.

    Why were people in England better off than people in France BEFORE the industrial revolution? Why did the industrial revolution take place in this island rather than in France?

    The people of France were not uninventive and they were most certainly not stupid – so why?

    France was held back by the Compulsory guild system (made the law all over France by Henry IV in the early 1600s) and by the web of regulations created by Louis XIV and his minister Colbert in the late 17th century.

    The French were not ALLOWED to progress – and this was the source of French poverty, not the luxury of King Louis XVI or his Queen (contrary to the myth – the luxury of aristocrats was NOT the problem in France).

    None of this is new – state despotism was also seen in Spain (the term “Spanish Practices” originally meant the endless regulations and edicts of the state in Spain – especially in matter of labour) and many other nations.

    There was NOTHING SPECIAL ABOUT THE BRITISH – the difference is that here people were ALLOWED to progress, whereas elsewhere they were normally NOT allowed to progress. State regulations held people back.

    Neither endless state edicts telling everyone what they are going to do for the rest of their lives (“Build Back Better” – “Stakeholder Capitalism”) nor crushing taxation are new – they can both be seen, for example, in the Roman Empire after the rise to power of the Emperor Diocletian.

    To deal with some other myths….

    No it was NOT “Empire” or “slavery” that mostly financed investment in British industry – it was, at first, the profits of domestic FARMING (the agricultural revolution of England and Wales – not really the Highlands of Scotland or most of Ireland, which remained a land of peasant plots a system created FROM ABOVE by the “Penal Laws” which were a disaster in Ireland). Later on domestic industrial profits financed investment, but farming (contrary to another myth) did not really go into decline till the late 19th century (there were more people employed in farming in England and Wales in the Census of 1851 than there had ever been before – it was the increased population who went to the factories, NOT “people driven off the land”).

    Turning to Sweden.

    Sweden was historically a LOW (not a high) tax country – it was only really from the late 1960s that Sweden became a high tax country. And it is not the super high tax country it was in the 1970s – it has rolled some of the high tax rates back.

    Obviously at present Sweden is far more of a free market country than places like Britain or New York which use Covid 19 as a excuse for endless arbitrary (and often contradictory edicts) that neither the British Prime Minister or the Governor of New York actually understand. They do not understand their own laws (edicts) and can not give a clear account of what they are.

    “Ignorance is no excuse when breaking the law”.

    Not even when the people who make the laws (with their arbitrary edicts – which change from day to day) do not know what “the law” is?

    How does that pass the “Reasonable Man” test?

    “Spanish Practices” indeed.

  • Paul Marks

    The French invented many things – but were often prevented from applying them in industry (prevented by regulations and compulsory guilds).

    And should the answer come “the French were theoretical – not practical”, well that is NOT true, but let us assume (for the sake of argument) that it was true…..

    What of the Germans? The people of the Germans lands were known for CENTURIES for their hard work and their love of machines and new machines (for more so than the English, the Scots or the Welsh) – so why was the industrial revolution not in the German lands?

    The various German states held back the German people with regulations (edicts) and compulsory guilds.

    There is nothing wrong with guilds if they are VOLUNTARY – but they were not voluntary, they were compulsory.

    Tragically Britain and the United States have gone down this road with “Occupational Licensing”, “Business Licenses” and so on.

    It is not just the crushing levels of taxation and government spending and the Credit Bubble financial system that means we are not really capitalist countries any more – it is the endless edicts and regulations.

    When my father was born both Britain and the United States were, basically, free economies (not perfect, nothing is, but basically) – but now, NO.

    This means that, in spite of all the modern technology, living standards will crash.

    In theory this can be prevented IF freedom can be restored – but what at the chances that “Build Back Better” Joseph “Joe” Biden, or Prime Minister Johnson will do that?

    None at all – there is no chance that such “Build Back Better” Big Government people will roll back the state and restore a free (or even sort-of free) economy.

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