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.
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This caught my attention, at a site called “The Smart Set”.
“If the zeitgeist has a face, it supposedly belongs to Ayn Rand and her capitalist philosophy of Objectivism. Talk radio hosts adore the author’s demands for limited government; Congressman Paul Ryan insists that his staffers read her overstuffed opus Atlas Shrugged; picket signs at Tea Party rallies suggest that we all “READ AYN RAND.” And yet, some pieces are missing. Ayn Rand was anti-war, but spending for hundreds of military bases and two-and-a-half wars remains sacrosanct even as Congress made the debt ceiling a major issue. She found homosexuality “immoral” and “disgusting,” and yet gay marriage has regained the initiative in the public square. And Randian heroes are explicitly — nay, objectively — elitist. They are genius millionaire square-jawed heroes who walked right off the screen at the movie matinee. The average Tea Party rallier, not so much.”
A bit of a jumble. Rand was anti-war, certainly, but she certainly was no pacifist, either about the Nazis or any other totalitarian regimes. She had a problem about homosexuality, but I doubt she favoured the state using its violence-backed powers to suppress it; indeed, from my reading of her journals and other material, I don’t know if she had developed views on this subject at all. As for the line about her support for “elitism”, it does rather depend on what you mean. For Rand, and most who broadly support her views (as I do), the idea was that people are entitled to develop their lives and talents to the greatest extent possible in free trade with their fellows. There is plenty of room for upward mobility, striving and competition. This has nothing to do with privilege, which is often what can be meant by an “elite”, for example. (Elitism is, of course, a boo word for the egalitarian left, and I suspect the author of the piece tilts in that direction).
“There is another writer whose political and philosophical influence is finally being felt in the public sphere. You may have read one of his books as a child. His name is Robert A. Heinlein, and he wrote science fiction. He was a libertarian enamored of military might, a conservative who championed free love. His heroes are certainly competent. They’re also folks who hack the systems in which they live, not elitists who abandon a corrupt world full of moochers and looters to worship the dollar as an end unto itself. And unlike Rand, most of Heinlein’s work is actually readable.”
Some of this is true, though I don’t think Heinlein was “enamoured” of military might; he understood that values need to be defended, of course, so to that extent he understood the warrior ethic and code, but he also understood the trader ethic, too. He was able to see how military codes develop and why they exist (his book, Starship Troopers, is about this very issue).
The idea that the characters in Rand’s Atlas Shrugged “worship the dollar as an end unto itself” proves that the author of this article clearly has not thought straight. The point for Rand is that the dollar, preferably a gold-backed dollar, is a symbol of liberty, not something that you worship as a totem.
It is sometimes instructive when a writer from outside the usual field opines about something about which you know quite a lot, as I do about Rand and Heinlein, having read pretty much everything they wrote. The author of this article hits on some good points, so don’t be put off by my nit-picking.
Somehow, this man, Eoin, appears to be so thick (he’s a Doctor, apparently) that I fear he should be banned from handling heavy machinery:
“We are taught by Cameron to regard small businesses as the engine room of entrepreneurial spirit in the UK. We are led to believe that their inventions, wealth creation and profits lead to employment and growth. But this is the stuff of fantasy. Three quarters of the 4.5million businesses in the UK employ no one. Their wealth creation serves their own ends. They create no jobs and do nothing to solve youth unemployment. The vast majority of small businessmen are in business for themselves. Evidence of civic virtue or a desire to create jobs is in preciously short supply and thus Cameron was wrong to shrug off record rises in youth unemployment as something that could readily be solved by small business.”
So my wife, for example, who set up her own business (marketing for SMEs) has done nothing to reduce unemployment. So all those people who, for example, lost a job at a firm and who set up on their own are not doing anything to reduce unemployment unless they employ someone? Is this man for real?
Of course, given the job-destroying impact of red tape, employment protections on full-time and part-time staff, taxes, and so on, it sometimes is a marvel that anyone ever gets a paid job at all. I am a minority owner, and employee, of a small business in wealth management/media sector and every decision on hiring someone is taken with the utmost care, since it is difficult to fire someone if they are not up to scratch.
There are times when I fear that some people out there are so fucking stupid that Darwinian ideas of natural selection are in need of revision.
Thanks to Tim Worstall for spotting this piece of lunacy.
For some light relief amid the gloom:
Fresh from his decidedly mixed record as the governor of California (which he pronounces “Calliwornia”), Arnold Schwarzenegger has an Austrian museum in his honour. This must make him feel every one of his 60-something years.
Odd bunch, the Austrians.
“It’s a sincere question: What have been the truly innovative, groundbreaking or even unconventional big public policy ideas to come out of this administration? Are there any? Because from where I sit, it simply looks like Obama takes existing, conventional, liberal ideas – some of them very, very old – off the liberal pantry shelf and hawks them like it’s new inventory. Where’s the evidence that Obama’s “mastery” over public policy has translated itself into creative approaches? Not in the stimulus from what I can tell. Maybe there’s something impressive to tout in ObamaCare, but Obama didn’t actually have much to do with the crafting of ObamaCare – a fact Wilson acknowledges. Was his genius to be found in shovelling cash into Solyndra and other embarrassing white elephants? Was he the guiding intellect behind a green jobs program that has produced dozens of jobs in places where it was supposed to create thousands?
And if he’s such a genius about public policy, why did it take him so long to discover that there’s no such thing as “shovel ready jobs”? You don’t have to be a Jedi Master of public policy to have known that.”
– Jonah Goldberg, over at the National Review’s Corner blog. I think the same question might be put to pretty much any of the major political figures of our time.
“Why did Steve Jobs do so much of his innovating in computers? Well, obviously, because that’s what got his juices going. But it’s also the case that, because it was a virtually non-existent industry until he came along, it’s about the one area of American life that hasn’t been regulated into sclerosis by the statist behemoth. So Apple and other companies were free to be as corporate as they wanted, and we’re the better off for it. The stunted, inarticulate spawn of America’s educrat monopoly want a world of fewer corporations and lots more government. If their “demands” for a $20 minimum wage and a trillion dollars of spending in “ecological restoration” and all the rest are ever met, there will be a massive expansion of state monopoly power. Would you like to get your iPhone from the DMV? That’s your “American Autumn”: an America that constrains the next Steve Jobs but bigs up Van Jones. Underneath the familiar props of radical chic that hasn’t been either radical or chic in half a century, the zombie youth of the Big Sloth movement are a paradox too ludicrous even for the malign alumni of a desultory half-decade of Complacency Studies: They’re anarchists for Big Government. Do it for the children, the Democrats like to say. They’re the children we did it for, and, if this is the best they can do, they’re done for.”
– Mark Steyn
On the subject of Steve Jobs, here is – to my pleasant surprise – an excellent and insightful piece by BBC correspondent Justin Webb. Good for him.
I submitted a comment to this blog, “From Poverty To Power”, by Duncan Green, who is involved with the Oxfam International website. Oxfam International, I should point out, is a highly political non-government organisation that promotes what seems to be a distinctly anti-trade, anti-capitalist agenda. He supports the idea of a tax on global financial transactions, that has sometimes been dubbed a “Robin Hood tax” (rob the rich and give to the poor, geddit?). Samizdata readers will know the blogger, Tim Worstall, well, who leaves a typically well-argued comment on the piece I link to. I decided to have a pop myself. I have no idea if my comment made it on (I used a different ID). Here it is:
“I love the way that some here dismiss Tim. For those who don’t know, he is an entrepreneur and I suspect, knows more about economics and business than most of the folk on this board. His point seems to be unanswerable: taxes are a cost. Indeed, that is often their point.”
“For instance, we tax alcohol and tobacco, for example, to drive down consumption for health reasons. Policymakers support imposing tax “costs” on certain items of consumption to reduce turnover. Sometimes, it is argued by people that property should be taxed more to discourage speculation in property, etc.”
“So it seems fairly clear that taxing financial transactions will mean there will be fewer transactions overall, and that the volume will decline. This will, as Tim Worstall states, reduce liquidity, widen the bid-offer spreads in financial markets for things such as currencies, bonds, equities, commodities and so on. It will therefore be more expensive for people to obtain mortgages, buy currencies when on holiday, and so on. Of course, the tax will affect groups differently – that is another issue. But there will be considerable knock-on effects.”
“Alan Doran: It is no doubt true that some funds will migrate to “rogue” tax havens where FTT does not hold sway. Well, a less negative way of putting it is that people do business where it is cheaper to do so, ie, where there are lower taxes. That is what is meant by economic freedom.”
“An example of this is when, in the very late 60s, a change to the US tax treatment of bonds encouraged the development of an offshore eurodollar market in London. Capital migrates. If people want to stop or cut financial transactions and prevent trade, they should be more honest about it.”
The idea of a financial transaction tax, or “Tobin Tax” (named after the economist, James Tobin) has been knocking around for some time. The Economist had a good item on it back in 2001.
Separately, Oxfam’s socialist tilt has been noted for a long time.
“The boost to growth from more monetary easing and more deficit spending – naturally always transitory and the source of further misallocation of resources – will be ever more faint and short-lived. Instead of igniting a new false boom, a progressively larger share of the policy stimulus will simply evaporate in the service of maintaining the accumulated misallocations, of avoiding a correction of artificially raised asset prices and of bloated balance sheets. As the manufactured recoveries get weaker, fiscal deficits get larger as a result of the combination of ongoing welfare state outlays and futile Keynesian stimulus spending.”
(204-205)
“Given the theoretical analysis in this book and the consistently devastating historical record of state paper money, it is remarkable that those who advocate commodity money today are either marginalised as slightly eccentric or made to extensively explain their strange and atavistic-sounding proposals while the public readily accepts a system of book entry money in which the state can create money without limit. The global financial crisis that commenced in 2007 is a case in point. The crisis constitutes a thorough and illustrative indictment of the alliance of state and financial industry, of a system of expanding state paper money and government-supported fractional reserve banking. Yet, the political class and the media managed to put the blame on capitalism and on greedy bankers.”
Paper Money Collapse, page 243, by Detlev Schlichter. I single out these quotes for touching on two key issues: the declining effectiveness of Keynesian stimulus spending – assuming it was ever valid in the first place – and the fact that the public, aided by the political classes, have, with some exceptions, managed to completely misunderstand our present crisis.
This book is not comforting reading, nor is it always easy to read. You have to concentrate. But it is a “must-read”. For me, one of the most valuable insights of this book is how it explains how the general price level in an economy can appear to be stable but that injections of fiat money into the system can derange relative prices for consumption, intermediate and production goods. This point is vital. It explains why those central banks, such as the Bank of England, got dangerously complacent in the 90s and noughties when the inflation targets they had been set appeared to behave. But all the while, the surges in money supply growth created a bloated financial sector and property market bubble.
He also rebuts the argument, sometimes used by opponents of commodity, or “inelastic” money, that a growing economy needs a growing supply of money to ensure stability. Untrue. At most, an expanding economy, with growing innovation, division of labour and productivity growth, should see a mild deflation over time (which is good for people who want to save by holding cash). But as Schlichter explains, there is no reason in logic or evidence why a mild price deflation should hamper economic progress once people get used to the idea that their money will buy a rising stock of goods and services through time. He uses the analogy of computers. In recent times, the hourly wages needed to buy, say, a mobile phone have slumped. Has that stopped people from going out and buying these devices? Of course not.
Schlichter’s explanation of how fractional supply banking works is crystal clear and, in my view, he explains it slightly better than say, Murray Rothbard did in his The Mystery of Banking, although the latter book is still well worth reading. And Schlichter’s style is more sober and less brash in its tone than the approach adopted by Thomas E Woods in his book about the crash, although Woods’ explanation of Austrian business cycle theory is pretty good.
All these books are useful for driving home key points about how we have arrived in our current pass. Schlichter, precisely because he used to work in the investment management business for so long, speaks not as an ivory tower academic, but as someone who has been on the practical side of finance. He knows that much of what appears to be “free market banking” is anything but; in fact, as he describes it, much of what now goes on in Wall Street, the City or wherever is a hybrid of market and state planning. In its way, it is profoundly corrupt. Schlichter also mentions how such a large chunk of the economics profession is locked into the philosophy that drives the current system – without it, many of these people would have to do something else for a living.
Perhaps the scariest part of his book is when Schlichter points out that the derangement of the capital system in the West is worse than in the late 1970s, when the-then Fed chairman, Paul Volcker, pushed up interest rates to record highs to purge some of the malinvestment and rottenness from the system. The cigar-chomping Volcker was a brave man, and he had the support of the-then presidents Carter and Reagan (Carter sometimes needs more credit than he gets). I cannot see any such central banker now receiving such support for this sort of thing. Instead, we’ve got ourselves “Helicopter Ben”.
Paper Money Collapse is one of the best books to come out of the financial crisis, maybe the best so far.
“Nobody ever asked why Steve Jobs kept working after he was rich. Everyone understood.”
– Virginia Postrel, writing about the computer entrepreneur and business visionary, who died yesterday.
Peter Thiel, the founding CEO of PayPal, has an essay up that makes the contention that the pace of technological innovation in the West, for various reasons, has slowed. He argues that this paradoxically may explain why, in the absence of serious tech change, investors are instead drawn to the dangerous finangling of asset markets such as property, and have fallen prey to the easy charms of high leverage. It is quite an interesting idea.
Here is an interesting couple of paragraphs:
“The most common name for a misplaced emphasis on macroeconomic policy is “Keynesianism.” Despite his brilliance, John Maynard Keynes was always a bit of a fraud, and there is always a bit of clever trickery in massive fiscal stimulus and the related printing of paper money. But we must acknowledge that this fraud strangely seemed to work for many decades. (The great scientific and technological tailwind of the 20th century powered many economically delusional ideas.) Even during the Great Depression of the 1930s, innovation expanded new and emerging fields as divergent as radio, movies, aeronautics, household appliances, polymer chemistry, and secondary oil recovery. In spite of their many mistakes, the New Dealers pushed technological innovation very hard.”
“The New Deal deficits, however misguided, were easily repaid by the growth of subsequent decades. During the Great Recession of the 2010s, by contrast, our policy leaders narrowly debate fiscal and monetary questions with much greater erudition, but have adopted a cargo-cult mentality with respect to the question of future innovation. As the years pass and the cargo fails to arrive, we eventually may doubt whether it will ever return. The age of monetary bubbles naturally ends in real austerity.”
It does rather go against the ideas of Matt Ridley about whom Brian Micklethwait writes below on this blog. Ridley’s take on the pace of events is far more optimistic: he does not, for instance, share the gloomy outlook on food production that Thiel makes.
This rather gloomy “are the easy economic gains gone for good?” theme was also made recently in the Tyler Cowen book, called The Great Stagnation. Here is a somewhat critical review by Brink Lindsey.
Dale Halling, an entrepreneur and scourge of things such as the Sarbanes-Oxley Act and anti-patent campaigners, has his own take on why the pace of innovation in the US may have slowed.
I can see why a certain gloom might set in. Many of the innovations we see today, especially in things such as consumer electronics and mobile phones, don’t have the majestic appeal of a space rocket, tall building or breakthrough in medicine. But these things are continuing: materials science, for example, which is an area that is not very “sexy” (to use one of my least favourite epithets) is full of innovation. And there are the developments in biotech and nanotechnology, to take other cases. And let’s not forget that even in the midst of the Industrial Revolution, some people claimed that all that could be invented had been.
And here is another example of the sort of concern that gets aired about where all the big inventions have gone, taken from The Money Illusion blog:
“My grandmother died at age 79 on the very week they landed on the moon. I believe that when she was young she lived in a small town or farm in Wisconsin. There was probably no indoor plumbing, car, home appliances, TV, radio, electric lights, telephone, etc. Her life saw more change than any other generation in world history, before or since. I’m already almost 55, and by comparison have seen only trivial changes during my life. That’s not to say I haven’t seen significant changes, but relative to my grandma, my life has been fairly static. Even when I was a small boy we had a car, indoor plumbing, appliances, telephone, TV, modern medicine, and occasional trips in airplanes.”
The worry is, of course, that in a world of low innovation and weak genuine economic growth, political fighting over the economic pie becomes nastier, and certain groups find life becomes very uncomfortable. Not a happy thought.
The principal argument I used to put which the pro Euro Labour, Liberal Democrat, CBI and TUC forces found difficult to counter was the simple proposition that joining the Euro was like taking out a joint bank account with the neighbours. You were likely to ruin a good friendship with them, when you fell to arguing over the size and use of the overdraft. This unfortunately sums up the Euro crisis. Greece, Spain, Italy and Portugal want to use the common overdraft or borrowing ability to excess. The Germans do not want to help pay the interest and sustain the joint credit rating, but they are being drawn more and more into doing just that.
– John Redwood.
I like the joint bank account analogy.
Virginia Postrel, over at her Deep Glamour blog, has interesting brief thoughts about how British Airways is attempting to revive its image by being glamorous. The video linked into here has shots of BA aircraft past and present, including that ultimate piece of aviation coolness, Concorde. The new billboard ads I see on the side of the London Underground go for this sort of feel, too. But as always with glamour, the trick is being able to achieve a certain willing suspension of disbelief, rather in the way that, as Postrel has noted elsewhere, people regarded Barack Obama as a glamorous politician. (So was JFK, unlike, say, Eisenhower, Truman or even Ronald Reagan, despite the latter’s Hollywood back-story).
BA is not the only airline to try for the glamour approach in its marketing. The new adverts by Virgin go for a slightly more raucous, fun-fun-fun! approach and it makes me wonder how some feminists must think of it as the ads are full of young, sexy-looking women in killer heels, slinky red uniforms and so on, while the pilots and other crew are all winking in a naughty fashion at the camera. The message seems to be: “Fly Virgin and you might just get away with a hangover or a phone number!” On the positive side, it certainly seems to be at odds with the neo-puritan killjoy mood of the moment, so kudos to Sir Richard Branson for that.
And these thoughts take us to the collision between the desire to project hopes and dreams onto something (an airline or a politician or actor) and the reality. Consider how the vacuous Obama sound-bite “Hope and Change” has now become an ironic tagline for many an Instapundit post, for example. And Postrel has given several talks, including this one at TED, about the glamour issue more broadly. (She also has a book coming out.)
This issue of aviation glamour reminds of something I wrote a while ago about the movie, The Aviator, based on the life of Howard Hughes. He played a huge part in the airline industry, of course. And here is another chance for me to talk about Aerotropolis, a fascinating book about aviation and the modern world.
“He just kept on trucking. When unable to get a haircut because the barber would not cut the hair of black people, he bought himself a pair of clippers and cut his own hair. He does so to this day. (Take that, John Edwards!) This is the same man who put himself through Morehouse College majoring in math, got a masters in computer science from Purdue (while improving academically), plotted rocket guidance for the Navy, started in business at Coca-Cola, then went on to turn around the fortunes of Philadelphia’s Burger King franchise, take over the aforementioned Godfather’s Pizza chain, become the head of the National Restaurant Association, be appointed to the Federal Reserve Bank of Kansas City, and host a radio show into the bargain. And, of course, he defeated the Big C.”
Roger L Simon
I cannot see him in David Cameron’s inner circle, somehow. For all my worries about where it is headed, the fact that someone like Mr Cain (has to be one of the best surnames in politics) can reach such levels says a lot about what the US is in terms of how people can surmount obstacles to build a successful business despite prejudice and the rest.
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Who Are We? The Samizdata people are a bunch of sinister and heavily armed globalist illuminati who seek to infect the entire world with the values of personal liberty and several property. Amongst our many crimes is a sense of humour and the intermittent use of British spelling.
We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, ‘Porcupines’, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty Frédéric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
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