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

“Doing nothing is a full-time job. Don’t imagine that laissez-faire means putting your feet up. All officials want to extend their powers; all bureaucracies will grow if they can. To stop it happening you need to be at your desk before the civil servants come in and still be there when they go home.”

Sir John Cowperthwaite, financial secretary, Hong Kong in the post-war period. (Quoted in this excellent CapX article about the terrible mayor of London, Sadiq Khan.)

Here is a profile of Cowperthwaite for those who want to know more about this admirable person, as different from the London mayor as can be imagined in terms of managerial approach and political philosophy. (Here is an interesting leftist’s blog comment on Khan, proof that he is not universally beloved on that side of the spectrum).

Samizdata quote of the day

“But though feted and exploited by questionable allies, Solzhenitsyn should be remembered for his role as a truth-teller. He risked his all to drive a stake through the heart of Soviet communism and did more than any other single human being to undermine its credibility and bring the Soviet state to its knees.”

Michael Scammell, on a writer and survivor of Soviet brutality, and who was born on Dec 11, 1918. So on a day after what would have been his centenary birthday, let’s celebrate his birth.

Samizdata quote of the day

“Thatcher had to see off the fury of miners fighting pit closures, a dispute that dragged on for a year but which failed to mobilise other industries or the public at large. Macron is confronted by a nationwide rebellion that unites people of different regions, classes, occupations and political allegiances. While protestors rampaged through Paris last Saturday there was also violent unrest in Toulouse, Bordeaux, Calais, Marseille, Narbonne, Nantes and many towns. This week, more than 100 high schools have been blockaded by pupils who, emboldened by the gilets jaunes, have relaunched their springtime protest movement against educational reform. Farmers, lorry drivers, construction workers and ambulance staff are also threatening to go yellow.”

“It has been said that the gilets jaunes movement is to Emmanuel Macron what the miners’ strike was to Margaret Thatcher in the mid-1980s. Not in the slightest. While the comparison might please Macron — who, from the moment he was elected, has staked his reputation on his determination not only to reform his country’s economic model but also to stand firm when the inevitable backlash erupted — it hides the fact that what the French President faces is far more serious.”  

Gavin Mortimer, Spectator (£).

Samizdata quote of the day

“The U.K. is a European country, and always will be. Trade and contacts among the nations of Europe can and should continue much as before. And I have no doubt they will do so. But the political nature of the EU has changed since monetary union. The EU failed to recognize that the euro would demand fiscal and political integration if it was to succeed, and that countries outside the euro area would require a different kind of EU membership. It was inevitable, therefore, that, sooner or later, Britain would decide to withdraw from a political project in which it had little interest apart from the shared desire for free trade.”

Mervyn King, former governor of the Bank of England. If you read his comments carefully, his displeasure at how the institution he led has become a plaything of Remainer propoganda is plain. His book, The End of Alchemy, contains a devastating take-down of the euro and is an explanation of why the UK had little alternative in the end but to leave. King was never quite of the full “establishment” – too much of the West Midlands grammar school boy to really be at ease in the EU corridors of power. Good.

An exodus

“What’s wrong with UK financial markets? The global economy is recovering, but British stocks and shares are not keeping pace. The pound has failed to recover from the slide it experienced in the wake of the EU referendum. This is frequently blamed on investors being spooked by Brexit, even more so by the possibility of a no deal. But has anyone actually asked the markets what is spooking them? Look closer and it becomes clear that while Brexit is a problem for some investors, most are much more worried about a far bigger risk, even if they rarely speak about it in public. It is the possibility of a Corbyn government.”

Ross Clark, in the Spectator (£).

As there is a paywall and it is annoying for those who cannot get through it, here are more paragraphs:

Since last year’s election, when the Labour leader came within a stone’s throw of No. 10, it has been impossible to write off the idea of a Corbyn victory. And we’re about to enter a time when anything can happen. Theresa May looks doomed to lose the Commons vote on her Brexit deal on 11 December; the DUP has said it may well withdraw its support from the Tories, leaving the Prime Minister without a majority. Whatever the Commons result, turmoil is more or less guaranteed — and one possible outcome is a general election as early as January.

A no-deal Brexit would unquestionably cause short-term ructions in the UK economy, as well as affect the pound and the FTSE — for what economic forecasts are worth (which is not very much, to judge by recent history). Oxford Economics recently claimed that GDP would be 2 per cent smaller than expected, pushing the UK into a mild recession. But even if that were to happen (and it has to be remembered just how far Treasury forecasts were out when they claimed the economy would shrink by 3.6 and 6 per cent in the event of a Brexit vote), growth would then rekindle, trade would continue, companies would re-route imports and exports, and an inflationary spike would die down. But if Corbyn were to be elected on a ‘radical socialist’ platform, investors can only guess as to what might happen.

It is the threat of a wealth tax that is scaring wealthy individuals. It is a theme to which shadow chancellor John McDonnell has returned several times. In 2012 he gave his endorsement to a proposal by University of Glasgow academic Greg Philo (sometimes mistakenly called an ‘economist’ but actually a professor in sociology) to subject wealthy individuals to a one-off wealth tax of 20 per cent in the hope of using it to pay off the government’s debts.

`The wealthiest 10 per cent own £4,000 billion,’ said McDonnell. ‘If you took 20 per cent of that you would then have £800 billion and we could tackle our deficit — we could tackle our debt — four-fifths of our debt would then be wiped out. So we’re saying just collect the money and make those who created the crisis pay for the crisis and that way you overcome it.’

The idea that wealthy individuals are as a group responsible for the 2008/09 crisis is absurd — what role, he might like to explain, did the Rolling Stones play in the crash? — as is the suggestion that such a tax would pay off the government’s debts: how McDonnell would manage to capture his £800 billion when, of course, highly mobile wealthy individuals have the option of fleeing the country. There is little appetite around the world for international socialist revolution, the only thing which could stop capital flight in its tracks.

On the contrary, many governments are going in the opposite direction and making every effort to attract wealthy residents. Donald Trump’s tax cuts have set out a big welcome mat for the world’s rich (if not so much for those of liberal opinion). Israel has introduced a ten-year tax holiday on the global wealth of new residents — they will pay tax only on money they bring into the country. Emmanuel Macron has reversed François Hollande’s war on the rich and offered special inducements to attract wealthy residents. Monaco recently held a presentation in London in an effort to attract wealthy individuals. Argentina and Greece, countries from which the wealthy were fleeing in recent times, are now much more settled.

The author is correct; in my own discussions with people in the financial markets, there is a real fear of what these reheated Marxists will do. Anyone who owns land, for example, unless they are politically connected to Labour, will be targeted. And as usual, it will not just be “the rich” who get it in the neck (not that isn’t bad in its own right), but the broad mass of the middle class who will not have the ease of being able to go abroad on a second passport.

The tragedy of the current situation is that Prime Minister Theresa May uses the genuine fear of a Corbyn-led government to scare us into accepting her plans to turn the UK into a European Customs Union vassal state, indefinitely, hoping no doubt that we all become so bored by the Brexit process that we accept that as the least-worst, if still crap, outcome. This situation, however, cannot last and I predict that there will be a significant political party realignment in the next few years, a view that several folk I know share. This current choice menu of Marxist anti-semite Left vs managerialist and hopeless Tory Party is simply shameful for a country of the UK’s standing in the world.

A fallacy

I recently went along to a financial markets briefing in the City (as part of my job; I do these things so you don’t have to, dear reader), and we got onto the subject of the eye-watering amounts of public debt in the West.In the US alone, the total debt is around $22 trillion (we must hope that if the economy is as robust as Donald Trump claims, that some of this gets repaid). And the economist in the room, when asked about this, and about how future generations are being asked to pay for our current profligacy, liked to refer to the following quote, from one Abba P Lerner, quoted in 1948. (Lerner was a Russian-born British economist). The quote goes: “Very few economists need to be reminded that if our children or grandchildren repay some of the national debt these payments will be made to our grandchildren and to nobody else.”

All very clever, and people in the room (apart from yours truly) nodded their heads at such profundity. So the UK/Western debt is terrifyingly big? Heh, no bother, because our kids/grand-kids will repay it, to er, each other, or something.

But wait a minute. If the UK racks up, say, £5 trillion of debt, and the interest charges to service that debt are still, say, the equivalent of several government departments (such as defence, health, etc) then that is money that has to be found, and yes, the payments of some of those will be paid to other, very much alive Britons, but would those people rather not have to repay it in the first place, but instead use savings to finance investment in productive goods and services? In other words, the inter-generational wealth transfer issue doesn’t become less of a horror. If the present generation racks up a bloody great debt, then the following one is left with a collective bill that it would, other things being equal, prefer not to pay. And there comes a point, of course, when the cost of financing the debt repayments can be so big that current economic growth and revenues cannot fund it, so you end up in a Latin American crunch, a sort of liquidity nightmare. So the question is at what point does the stock of public debt go from being this sort of seemingly benign shuffling of paper from A to B to something out of a disaster movie?

One thing that ought to give people pause about the blithe statements of economists about debt is that some debt down the years has been financed by debasing money – in other words, inflation. The robbery of savers and encouragement of financial speculation and finagling is, paradoxically, a reason why we have seen relatively slack productivity growth and hence stagnant real wage growth in the West in recent years. (Ultimately, real wage growth requires more productivity, and that needs to be financed by real savings, not central bank fairy dust.)

I commend readers to the studies and writings of a friend of mine, Scottsdale, Arizona based investment figure Keith Weiner, who has noted the link between very low, or even negative interest rates, capital destruction, and crap wage and income growth. Far too many on the free market side are in denial that we have suffered from poor wage growth, but we have. It is one of the reasons for why charlatans and thugs such as Jeremy Corbyn and all the rest have been successful, because some of their critiques about living standards are true. Their diagnosis, of course, isn’t.

Samizdata quote of the day

“The idea that it is not possible to leave the EU seems to be the most dangerous affront to democracy. They are saying not only that it was wrong for the public to vote to leave, but also that it cannot be done and therefore the democratic vote was meaningless.”

Richard Tombs, historian, University of Cambridge.

Samizdata quote of the day

“The unwarranted gloom about the UK and the exaggerated respect for the EU are not new. Many of those who now say that Britain must stay as closely aligned to the EU as possible predicted disaster when the pound left the exchange rate mechanism in 1992; prophesied a decade later that Britain would rue the day that Gordon Brown gave the single currency a wide berth; and said with the utmost confidence in 2016 that a vote for Brexit would lead to an immediate and deep recession and a massive increase in unemployment. None of these things happened.”

Larry Elliott, writing in – yes – the Guardian. Even if you don’t share his left-leaning, Keynesian economics, much of what he says he about the EU debate is spot-on. He is right, for example, to remind folk of just how lousy the forecasts of various EU pushers down the years have been, and continue to be. The shamelessness is, well, shameful.

If France could quit NATO without permission, why can’t Britain leave the EU?

Author’s note: I gave a talk at one of Brian Micklethwait’s end-of-month Fridays on the Brexit process and why and how libertarians should think about it. This is a sort of distillation of my views, with added material from events of this week. Thanks again to Brian for giving me a chance to hash this out in a congenial atmosphere, along with the likes of Patrick Crozier, also of this parish.)

I haven’t anything particularly original to add to the immediate furore about Mrs May’s plan but thought I would set out a few thoughts here, particularly as people on the pro-liberty side of the fence are often divided on the Brexit question. (Yes, there are libertarian Remainers, and may the Lord have mercy on their souls.)

Mrs May’s “deal” is awful, in my view, and my former editor, Allister Heath, says what needed to be said yesterday in a typically trenchant Daily Telegraph column. To paraphrase (the DT is behind a paywall), he notes that, for example, members of NATO are free to leave without having to get permission from the others first, whereas under this “deal”, the UK would have to ask Brussels’ permission to leave the Customs Union. (In the 1960s, De Gaulle took France out of NATO in certain respects at the height of the Cold War, let it be noted.)

In all walks of life, people can and do end agreements – they get divorced, change jobs, leave membership organisations of all kinds. I even cancelled a gym membership once – I don’t recall asking any civil servant’s consent. And the world continues to turn. Only the EU, it seems, wants to lock the UK into an indefinite arrangement, like a form of involuntary servitude. The only way that such a deal would ever be overturned is by extra-legal means (yes, and that might even include military action). The fact that the EU demands such terms from a country that is making very few other changes to its post-EU situation and paying £39 billion for the privilege, is so evidently unjust that one wonders if there is a secret agenda for the UK to crash out. (I sometimes wonder if this is what is going on, but then remember the more obvious reason which is that Mrs May, who supported Remain, does not and did not want Brexit to happen, other than superficially, such as getting blue passports and being meaner to immigrants, as part of her generally authortarian mindset.)

The oddity about our situation is that while the EU moves on towards becoming ever more centralised – assuming the euro-zone doesn’t crack up under its contradictions – the new technologies and ideas shaking up business and creating our future are going to come from free, open economies, where the State is relatively small, taxes are low and flat, regulations are strict but not wide, and where entrepreneurship and grit are prized qualities. The EU, by contrast, trundles on, poisoning national politics, stirring up ugly populism, and lining the pockets of a group of people who are so convinced of their own virtue that they express open contempt for democracy. We forget, for instance, how the EU recently helped to stamp out seccession of Catalonia from the rest of Spain. The Scottish independence folk who think Brussels is their friend should take note.

My dislike of these forms of bullying and obduracy are in general the reasons I voted for Brexit over two years ago. This was never going to be a clean or easy process – there’s too much invested psychologically in this project of an EU state for its architects to give up easily. For some on the Remain side, this goes deeper than “market access” or the ability to hire a Polish cleaner without fuss. It’s about virtue, modernity, of being part of the progressive side of history.

For those on the Brexit side like me who hew to classical liberal ideas on society, in the tradition ranging from John Locke all the way through to Ayn Rand and Milton Friedman, it is also important to acknowledge that some on the Brexit side are as collectivist, and fans of Big Government, as some Remainers appear to be, while some on the Remain side hold broadly liberal views and genuinely worry that Brexit will mean the return of socialism and protectionism. Those worries should be taken seriously.

Brexit does not have to involve any diminution of a drive towards a freer society – ultimately, what will make the difference are the values of the people who make up a political construct. To those libertarian Remainers who – rightly – object to the idiocies that we Brits are capable of inflicting on ourselves (and the list is long) I make this point: it is a damn sight easier to chuck out a national government than it is to chuck out a whole political class from 28 separate countries, with different languages and political traditions. And that, for me, is the most important argument of all.

Samizdata quote of the day

“There’s a cost for everything. And the ultimate payer of every cost imposed by government is not only the individual member of the mass of taxpayers who does not benefit from the scheme, but likely, also, its intended beneficiaries (cf., welfare, busing, affirmative action, urban planning).

The Secret Knowledge, David Mamet, Page 60. (Published by Sentinel, 2011.)

A statement of corporate philosophy I can get behind

These days, there is a lot of effort behind what is called the corporate social responsibility movement to inject what some of us might see as Leftist political ideas into the ways companies operate. (There is debate about this among free market folk, it ought to be conceded. See an article at Reason magazine.) Some of this is mandated by state regulation; some of it can also come from pressure certain types of shareholder (if there is consent involved, libertarians can’t object to that in principle). The old idea, put forward by the late Prof. Milton Friedman, that the primary obligation of company management is to maximise shareholder value, is shocking to the modern mindset. During my time in writing about and following the modern investment and financial industry, I am relentlessly bombarded by calls for firms to be more mindful of their social, environmental and related obligations. Making profits is all too often treated as a tad vulgar, even immoral. (This perspective might change a bit as and when the next recession bites.)

With that in mind, it’s refreshing to read a statement of corporate philosophy like this, from the Asgaard (as in the Vikings) business that runs the Starting Strength weight training operation, associated most famously with barbell lifting trainer and wonderfully plain-spoken Mark Rippetoe. The whole statement is great, even if you have never been to a gym or aren’t interested in lifting weights (full disclosure: I am doing the barbell lifting programme (in the UK) and it has already changed my health for the better).

Here are a couple of paragraphs:

We don’t like big government, government regulation of the workplace and personal space, and government safety nets for those who decide not to finish life’s heavy sets of 5. We don’t appreciate people who are constantly offended for other people at no cost to themselves, and who feel the need to force us to agree with their opinions, which we cannot be made to do. We like people who take personal responsibility, who do not ask for charity, and who give freely when they feel compelled to do so. We appreciate an honest effort toward a worthwhile goal, and we will help if we can.

We like nice guns, good food, strong drink, talented musicianship, thoughtful art, and the effort it takes to create them. We appreciate beautiful women and handsome men, masculinity and femininity, and we know the difference. We also understand that some people have different opinions about these things, and we respect their opinions at precisely the same level of enthusiasm with which they respect ours.

As an aside, I came across Rippetoe (or “Rip” as everyone calls him) via Glenn Reynolds. So I owe the law professor and blogger supremo for putting me on the path to getting stronger.

At least Americans choose top judges in public

One thought that I have about the whole furore about the Supreme Court and Kavanagh (no, I am not going over the whole bloody thing now) is that the US system is so much more public than in other countries that have something such as a Supreme Court, or bench of wise men/women who get to opine or even rule on constitutional matters. We have our Law Lords in the UK, and indeed the House of Lords (chosen by the government as there aren’t hereditary peers any more). As far as I know Law Lords are appointed from within the legal system and it is not entirely clear who specifically gets to pick them or approve the Law Lords. As for France, it has a Constitutional Council, members of whom are senior retired political folk and others who must be approved by the French parliament. What is interesting in the French case is that I don’t recall much media coverage of the hearings, even allowing for the often lousy state of British coverage of French public affairs (you would think a country a few miles across the English Channel and with whom we have traded, and occasionally defeated or liberated in wars might get a bit more attention). Germany has a federal constitutional court, and the gift of membership to this body is held in the hands of the Bundestag and by the Bundesrat (this body represents the state parliaments at the federal level).

All these systems have their merits, quite possibly, but what is certainly striking to my eyes is that it is only in the US that the decision as to who gets on the bench or not seems to be a matter of great media and public interest. In part, I suspect, this is because of how membership is in the gift, at least in the initial proposed stage, of the President. The US Supreme Court has issued major decisions down the decades, as momentous as Roe Vs Wade, Kelo (a big eminent domain case) and Dred Scott, to name just three. It seems also a more public system, whereas I get the impression that when a judge takes his or her seat in a European country, it registers as much public response as the daily announcement of the shipping forecast. And that, I think, speaks much to the more vigorous temper of American public life. It may not feel like this at the moment, but at least the raucous nature of American public life speaks to a certain health. In Europe, by contrast, so much of what happens resembles one of those dull zombie films of the 1970s or 80s.