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Well that was not very clever of me, was it? I got the wrong de Soto in the original posting here, which I have taken down to avoid confusion. My apologies for the first poster who told me it was wrong. Ugh. Grovel-grovel. Here is the event, anyway. I strongly recommend people to go if they get the chance. I will be. October 22nd, 2010 | 10 comments - (Comments are closed)
 There have, as I might expect, been a flurry of reviews about a recent biography of Harold Macmillan, who – to those non-Brit readers who might not have heard of him – was prime minister in the late 1950s through to 1963, and who was involved in controversies that hung over his head until his very old age, such as the issue of his alleged involvement in sending Cossack forces back to the tender mercies of Stalin at the end of WW2. He was a complex and interesting character in many ways; my mother remembers his nickname of “Supermac” and the extraordinary period in the early 1960s when the Profumo Scandal broke, as well as Macmillan’s own resignation through ill health and the subsequent emergence of Alec Douglas Home as leader. Home, let it not be forgotten considering how he was mercilessly lampooned by parts of the leftist press, almost won the 1964 general election. One review here by Simon Heffer more or less sums up my own views of the man. Heffer recognises that for all Macmillan’s undoubted merits – he was, for example, an extremely brave army officer wounded several times in the First World War – that he was a decidedly flawed politician in certain respects, particularly on the crucial issue of economic policy and industrial relations. The 1950s and 60s saw the rise of what was to be dubbed the “British disease” – a time of rising industrial strife, inflation, low productivity, endless “stop-go” cycles of Keynesian-inspired reflation followed by subsequent slamming on of the monetary brakes. And while it would be grossly unfair to pin too much blame on one prime minister for the sort of problems that eventually came to a head in the 1970s, he must take some share of the responsibility for the mess that was eventually addressed – after a fashion – by Mrs Thatcher’s administration in the 1980s. And yet the impression I get from Heffer’s review, and particularly, this one by Peregrine Worsthorne, is that the biography more or less absolves Macmillan of any blame whatever. Worsthorne’s review in the Spectator – behind a subscription firewall – carries this, for instance:
Oh dear. Fell asleep during the 1970s, did we? He also says that Macmillan was right to have played down the danger of the Soviet Union during the Cold War. I am not sure that is really true, but if it was true, is that to his credit? With the benefit of hindsight, the Soviet Union was a rotten house that looked imposing with all its mass Red Square parades and all the rest but eventually crumbled very fast, but at the time, it did not seem that way, and some very supposedly clever people, such as that Keynes fan (!) JK Galbraith, were arguing as late as the early 80s that there was no real difference economically between the West and the Soviet Empire. And the sheer size of the Soviet armed forces, and the way that the Hungarian and Czech revolts were harshly suppressed, hardly squares with the idea that that Empire could be treated with a sort of shrug of the shoulders. By the way, for a dose of good sense on the Cold War years, I recommend this by Norman Stone. But perhaps the most ludicrous aspect of Worsthorne’s review is this part, in which he writes mournfully of what might had been had Sir Alec Douglas Home won in 1964:
I am going to do Worsthorne the respect of assuming he is sane, and serious, when he wrote that somehow, Mrs Thatcher’s time in office was some sort of ghastly “interlude” when the rightful aristocratic rulers of us unwashed were horribly pushed aside by a bunch of grammar school educated City slickers and Jewish intellectuals. Macmillan once infamously said that he regretted there were more Estonians than Etonians in the Tory Cabinet of the time, a particularly nasty little line. Sure, the attack on the Blair and Brown bunch is perhaps more deserved, but let’s not forget that Blair was a Fettes public schoolboy, and a good many of Mrs Thatcher’s ministers came from smart backgrounds. In fact, when all is said and done, what Worsthorne rates as Macmillan’s greatest achievement, is contained in the opening paragraph of his review. I leave readers with this to ponder:
In other words, whatever Macmillan may or may not have done to stem the UK’s post-war economic decline, at least he kept the toffs on top. Words fail me. October 21st, 2010 | 14 comments - (Comments are closed)
This article by one of the Home Depot founders has been out for a few days, but I thought it would be good to put it up as it communicates, with a sort of barely suppressed rage, how businessfolk in the US feel patronised and insulted by the sort of policymakers in Washington, obviously starting with Obama. And I would happily wager that there are a lot of business people who feel pretty much the same way about the UK, as well. I just wish we would have more entrepreneurs making these kind of comments. October 20th, 2010 | 12 comments - (Comments are closed)
Probably the most devastating take-down yet of the economist and leftist news columnist I have ever read. The man’s credibility is in total ruins. The stuff at the end about the housing bubble is the killer. Read the whole thing. October 18th, 2010 | 22 comments - (Comments are closed)
James P. Hogan, Minds, Machines and Evolution, in the chapter, “The Revealed Word of God, pages 174 and 175. Hogan wrote good SF and non-fiction, although this Wikipedia entry (treat with some care), suggests he also was a Holocaust denier, which is a bit like finding out that your close friend is selling hard drugs to teenagers. He died in July this year. As some may know, I wrote a while back about what I saw as an unconvincing attempt by the UK journalist Christopher Booker to play the victim card and assume that advocates of AGW scepticism and intelligent design proponents (i.e., creationists), were both equally victims of intolerance from the scientific community. But actually, as one commenter – I think it was Counting Cats at his own blog – pointed out, there is more in common between AGW alarmists, with their almost religious approach, and creationists. The reason why I keep returning to this topic is that for all that I am unbudgeable on tolerance for all manner of views, barking mad or eminently sane, the point is that if we are going to be able to resist some of the more oppressive demands of AGW alarmists, it pays not to ally ourselves with what I regard as seriously flawed ideas, such as creationism. It is the sort of thing that will be seized upon by the AGW alarmists, in their quest to treat any dissent as examples of bad science. Just sayin’. October 18th, 2010 | 52 comments - (Comments are closed)
In the UK edition of Wired magazine is an article on the use of environmental markets in which, for instance, property developers or industrial users of water pay others, such as owners of wetlands or somesuch, if they want to make a development. The way the article is written gives the impression – at least in my eyes – of this being a great example of how capitalism and the Greens can work together. I am not so sure. For instance, take the idea of “banks” of wetlands. Typically, what happens is that a government, such as the US one acting under legislation, will decree that there can be no net loss of wetland in given geographical area A, so if any area of wetland is destroyed, then the destroyers must offset this by paying to create another area of wetland somewhere. I immediately see a problem here: someone in authority has decreed that whatever happens to be the area of wetland at the time the new system is introduced is the area that must be maintained ad infinitum; but why not say that the area should be twice as big, or three times, or four times, or half as big? Also, the supposed “market” for such development permit trading depends on the existence of government regulations of certain areas, like wetlands, which might clearly go against the property rights of the folk who have owned those wetlands in the past and might have wanted to turn them into golf courses or whatever. To be fair, though, the article does address the fact that property rights or markets of some sort represent a smarter way of addressing issues such as conservation, pollution and so on than traditional “lets just ban it” approaches used in the past. The article contains a great example of how the French mineral water industry did a deal with farmers over the latters’ use of fertilizer and pesticides in order to protect the water and keep the farmers happy. That is the kind of market transaction that works, and probably could have worked without government getting involved. My worry, though, is that a lot of such artificial markets in things such as environmental resources can become prey to corruption and mission creep of all kinds. Nigel Lawson, for instance, wrote dammingly about carbon trading in his recent book on the global warming controversy. October 15th, 2010 | 5 comments - (Comments are closed)
Whatever pious comments George Osborne, UK finance minister, or David Cameron might make about encouraging savings for the long term and less reliance on borrowing, blah, blah, blah, this sort of policy, assuming it is true, shows that this government does not give a rat’s arse about encouraging savings. Coupled with the new top tax rate of 50 per cent, reduced tax-free allowances and other adjustments, the enterprising class of those who work to build up pension pots for themselves just got a serious setback. At a time when there is so much talk about a pensions “time-bomb”, this sort of announcement is also disheartening since it sends out the message that pension schemes are a contrick. My own managing director at the firm at which I am now a small partner does not bother with pensions and intends to rely on his own business/properties to pay for his old age. When announcements like this come out, who is to say he is really wrong? October 14th, 2010 | 17 comments - (Comments are closed)
I have been busy travelling lately, so not much opportunity to post much on the site at the moment, but I could not resist this. October 11th, 2010 | 15 comments - (Comments are closed)
Lord (Robert) Skidelsky is the biographer of JM Keynes. Keynes is, as regulars here know, a man generally regarded as the “dark knight” of economics, a man who made intellectually respectable notions that had been often regarded as little more than the ploys of quacks and charlatans. Books by Henry Hazlitt and William Hutt, for example, have in my view pretty much demolished his central idea: that the way to get out of a recession is for governments to print money in large amounts and hopefully, when the sun comes out from behind the clouds, to turn on the monetary and fiscal brakes later on. It is an approach that was destroyed by the stagflation of the 1970s, when a combination of high unemployment, out-of-control trade union power, low growth and skyrocketing prices forced policymakers to seek alternative sources of wisdom, in the forms of Friedman, Hayek and the rest. However, the attempts by governments to revive their economies in the past few years have given what I consider to be a spurious impression that Keynes’ ideas are still appropriate to our time. I disagree. Skidelsky argues that the current Tory/LibDem coaltion government is making a fearful error in trying to reduce debt and spending. He also argues that what the world needs right now is a new sort of Bretton Woods agreement, moving on from the original deal as signed in the 1940s at the end of WW2. That agreement achieved, among other things, strict controls on capital flows between nations. It is hard for younger people to realise that it was not all that long ago that it was illegal, for example, for Britons travelling abroad to take more than a small amount of money out of the country without explicit consent. This is serfdom: if people are banned from taking money from place A to B even if they have earned it, then what is the difference between that and a serf seeking the consent of his lord before moving to another village down the road? And in any event, as Lord Skidelsky knows only too well, the BW agreement eventually failed because of a combination of forces: rising government deficits, rigid, unionised labour markets and inflation (caused by things such as Vietnam War, the Great Society welfare policies in the US and UK); the oil crisis of the early 1970s, and developments such as the offshore Eurodollar market, which encouraged a relatively unregulated, vibrant financial market that made BW increasingly hard to operate. The stresses proved too great; the US finally severed any link between the dollar and gold during the Nixon presidency, and Bretton Woods was dead. A good summary of how it all went wrong can be seen in this recent book by Deepak Lal. Keynes was not completely wrong on all the topics of the day, and to his great credit, the post-war settlement did include attempts to foster free trade and reduce protectionism, which policymakers realised had been such a disaster in the 1930s. But the idea of governments spending vast sums of central bank funny money as a way to deal with the results of previous monetary excess looks less and less wise with every day that passes. Keynes still has his devotees, such as Paul Krugman, but his ideas are not, by and large, what are needed to get us out of our current predicament. October 8th, 2010 | 61 comments - (Comments are closed)
“It is true that individual financial institutions made bad decisions. In my opinion, they should have been allowed to go out of business—that would have been the proper way for them to be handled. However, their decisions were secondary to government policy. It should be remembered that the Federal Reserve owns the monetary system in the United States; we do not have a private monetary system. In 1913, our monetary system was nationalized. If you’re having problems in the monetary system—which is where the problems in the economy began—they are, by definition, government problems. This is analogous to interstate highway bridges falling down: If interstate highway bridges were falling down, everyone would recognize that the government owns the highways and conclude that this is a government-caused problem. Well, the government owns the monetary system, and the errors by the Federal Reserve are the foundations of the financial problems we’ve experienced.” John Allison, former CEO of BB&T, who is that rarity in financial services, a genuine free marketer who knows what the prime cause of the credit disaster has been. (The quote is taken from an interview of Allison by The Objective Standard, a fine magazine. Most of the articles are behind the subscriber firewall.) October 6th, 2010 | 18 comments - (Comments are closed)
It looks as if some reporters who wrote about the late British comic actor, Norman Wisdom, have learned – assuming they actually gave a shit in the first place – that using Wikipedia as your source for information is a high-risk strategy. Doh. October 6th, 2010 | 16 comments - (Comments are closed)
This is a headline in the leftist New Republic magazine, over an article lauding any kind of US government spending, by Jonathan Cohn: “Wanted: More Fraud, Abuse in Government Spending” Here’s a paragraph to show just how far down the Keynesian rabbit-hole parts of the pro-stimulus crowd have gone:
So “throwing away” money – which is ultimately not the government’s to “throw away” but belongs, or is claimed, from individual citizens – “creates” jobs, does it? So if the US unemployment rate is stubbornly holding just below 10 per cent – a miserable result – then what is needed is yet even more spending, more money printing. These guys remind me of what was said, not always fairly I might add, of WW1 generals, who, when faced with the failure of their latest mass infantry assaults against the German army in Flanders, were urged for one more push, one more bout of bloodletting and hence on to victory. Einstein once defined madness, I recall, as the repeating of an error and failing to learn from such errors over, and over again. By that measure, parts of the media and commentariat in the US are out of their conceited, Keynesian minds. October 5th, 2010 | 25 comments - (Comments are closed)
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