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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Well, for all you gold bugs out there, here is a spiffy new banking facility, although it so far is confined to the Gulf.
Ayn Rand and Ludwig von Mises would have approved, I’m sure. By the way, the price of gold is currently around $1,250, a new record. Given the various “quantitative easing” programmes of central banks in recent months, the hunger for the yellow metal is not surprising. I must say that at current levels, it does seem a pretty risky idea to push even more money into gold, since there has been so much of a rally already. If – and this is one hell of an if – some governments start to reduce their debt burdens and try to squeeze monetary growth in some parts of the world (like in Australia), then some of that “fear premium” in gold may start to fade.
So the European Union and other Tranzi* institutions have decided to prop up the euro by another, monstrous bailout package, involving the purchase, by the European Central Bank, of billions of euros of bonds. In other words, the ECB, which for a while tried to act as “Son of the Bundesbank”, has given up on all that rigorous, Teutonic stuff and taken a leaf out of the Anatole Kaletsky let’s-print-till-we-drop playbook. Excellent. Holidays in Europe will be cheap as chips at least until inflation takes off.
What do readers think is the chance that Germany, say, will be back using the Deutschemark by the middle of this decade? I’d say it is low, but you have to wonder. Germany had for many years an enviable reputation for having a strong currency. They’ve thrown it away. I see that some of the natives are getting restless, although a news report here cites “dithering” over the bailout package as a cause of anger. I’d say it was hostility to the bailout per se.
Ironically, the strength of gold at the moment highlights the benefit of that Hayekian idea of “parallel”, competing currencies in the same jurisdiction. The way things are going, a lot of firms and individuals, given the freedom to do so, would rather be invoiced in gold or some other, relatively solid store of value (eg, Swiss francs, Australian dollars, and so on).
*A short term for Transnational Progressivism, a sort of political philosophy that puts stress on the need for big, cross-border institutions to run our lives at the expense of national, and usually more democratic ones. Examples: the UN, IMF, European Union, IPCC, etc.
“The answer to our woes, is a devolved English Parliament. Let the four constituent nations go their own separate way. let Scotland have independence, let Salmond have his way. Lets the Welsh & the Welsh and Northern Irish go. We moan on this site about the Internal Aid department, well how about we look a bit closer to home. England again has voted overwhelming Conservative, except this morning we are still governed by a party that is led and draws its legitimacy from the huge client state that is Scotland. All the usual suspects will whitter on about the unfairness of the FpTP system, whilst ignoring the biggest unfairness of all.”
Written by a character called Paul B, over at the Spectator’s Coffee House blog.
I happen increasingly to agree. While I yield to no-one in my admiration for much of what Scotland has brought to Britain and to the wider world – this book is a wonderful description – the brutal fact is that Scotland is now exerting an outrageously one-sided, and disproportionate, influence on British affairs. Its politicians have carefully natured a client state in the big cities such as Glasgow, where a huge proportion of the locals subsist on state benefits. If, as the Coffee House commenter suggests, we were to make it possible for Scotland to operate as an independent nation, then the Scottish Labour Party machine, a profoundly corrupt one and similar to the Chicago Democrat machine that gave the US Barack Obama would no longer exert its malign influence on England’s affairs.
It is time to cut Scotland loose, both for its interest, and more to the point, for those who want to see the back of the Scottish Labour Party and its arm-lock on UK affairs for the past decade and a half.
In the meantime, I suspect that the international bond market is going to have the casting vote on what happens next after this inconclusive election.
Guido Fawkes wryly notes that the Financial Times, which for a long time has backed Labour in its editorial pages, and for a long time taken a ploddingly, predictably, wrong-headed stance on many issues (such as joining the euro), has now come out for the Tories.
Of course, the FT, like the Economist – which has also backed Cameron – is a purveyor of conventional wisdom, so it may be that a centrist, social democratic paper like the FT feels fairly comfortable in backing a party that has not shown any considerably conservative political views. But as Guido says, there may be another reason in that the FT has seen some of its readers die off or defect to other, more robustly pro-market, publications. If the latter is the case, then that is an admirable lesson to be learnt: if you want to see how a product has to change in the face of consumer trends, look at the business media.
“Amazing isn’t it? Not that Labour slimed an ordinary member of the public who disagreed with them. They’ve been doing that since before they were elected in 1997. The lucky ones only found their reputations traduced in the press. The not so lucky ones found themselves dead in a field. No, what’s amazing is that is was caught live and bang to rights.”
– Blognor Regis
If I were this Mrs Duffy person who was slimed by Brown, I’d be thinking of watching my back for a few months. One thing we have learned over the past 13 years is that NewLabour are vindictive bastards.
Update: Janet Daley draws a certain parallel – as well as noting a key difference – in another famous example of a leftist politician blurting out certain comments during an encounter with an ordinary member of the public, the famous Obama/Joe The Plumber exchange.
As this Joe character found, Obama’s attack dogs tried to make life hard for him and as I said above, it may already be happening to the lady who was slagged off by Mr Brown.
Via Arnold Kling at the EconLog blog, is his plan to fix the US financial system. It applies with equal force to the UK, I think, apart from one or two specifics. It is not the sort of more radical measure that the likes of Kevin Dowd has favoured, but it is pretty good and it actually is something I could envisage being attempted. I even think it might be possible to contemplate a partial breakup of the banking system to avoid a “too big to fail” issue although I would caution that bigness, per se, is not the problem. What is the problem is the fractional banking system as it now operates under the moral hazard regime of a central bank, legal tender laws, and the rest.
Excerpt:
“The overarching principle I have is that we should try to make the financial system easy to fix. The more you try to make it harder to break, the more recklessly people will behave. By reducing the incentives for debt finance and for exotic finance, you help promote a financial system that breaks the way the Dotcom bubble broke, with much lesser secondary consequences.”
Anyway, something for the politicians to ponder.
Here is a related post of mine a few weeks ago about the need to push the case for free market banking even though the details can be sometimes overtaken by events.
Dominic Lawson draws out some perceptive conclusions about the recent volcanic ash problem for the airline industry:
Underlying all this, however, is something quite new, which, like the phrase “zero tolerance”, is from across the Atlantic. This is the idea that there is no such thing as an accident — a concept that is heaven on earth for litigators. On the basis of the so-called precautionary principle (which, if it had existed in prehistoric times, would have been bad news for the caveman who discovered fire) governments are expected to remove all possibility of risk from the field of human conduct. It was something akin to this sort of thinking that caused the British Medical Journal to state in 2001 that it would no longer use the word “accident” because even earthquakes, avalanches and volcanic eruptions were predictable events against which we could, and should, take precautions. We have just seen what happens when the authorities do have a fully fledged “precautionary” volcano safety policy. It does not survive the first encounter with reality.
The problem, alas, is that “reality” is something that many of those in power are uninterested in. As he notes, when the PP is applied to small groups – such as farmers – they lack the political and business clout to kick up a fuss. What really forced policymakers to back down on the airline travel restrictions was the fact that hundreds of thousands of travellers were faced with massive delays and thousands of businesses were affected.
I understand one blessing of the flight restrictions was that this whole kerfuffle prevented Tony Blair from playing more of a role in the election campaign. Silver linings and black clouds, etc. (Excuse the cloud pun). It would be nice to think that this globetrotting parasite could be permanently stuck in a departure lounge.
The leader of the Liberal Democrats, who has surged up the popularity charts in recent days after his supposedly slick performance in the recent TV political debates opposite David Cameron and Gordon Brown, made a remark – which I caught on the TV summaries this morning – that proves that behind all the supposedly “nice”, decent image he wants to present, that he is a man incapable of handling serious disagreement with the conventional wisdom. In his attack on Cameron’s decision to ally Tory MEPs with a certain grouping of right-of-centre European political parties, Clegg damned this grouping for being full of anti-semites and, wait for it, “climate change deniers”. So, let me get this right, as far as Clegg is concerned, someone who is unconvinced, or at least not fully convinced, of the AGW theory, is on a par with someone who hates Jews and wishes them ill. Riiiight.
There are two notable things about Clegg’s remark: that he made it and thought this would play with the audience, and that Cameron, trying still to be so much the “I am above all this grubby stuff” schtick, did not kneecap this insufferable toad for so doing. But then again, as David Cameron has bought into the AGW theory wholesale, he did not have it within him to call out Clegg for such a remark.
As has been noted already, this is a prime example of when political parties embrace the same, suffocating meta-context (as Samizdata’s own editorial El Supremo, Perry, would put it). It means that interesting, even deadly, debating points don’t enter the heads of those who could profit from actually using them. And yet I am sure that many Britons, who are not totally convinced of AGW, would have applauded Cameron had he had the sense to hammer Clegg for his oafish remark.
“The trouble is that what the markets demand – a credible plan for getting debt back to sustainable levels – is the opposite of what the voters want to hear. Perhaps regrettably, when markets and politics collide, it is always the markets that end up winning. Today’s fantasy world of still-growing public expenditure can last only as long as markets are willing to lend on reasonable terms. Governments are perfectly happy to rely on bond markets to support their grandiose social ambitions when times are good, but when the going gets tough, they become a growing source of frustration and complaint. George Brown memorably blamed the gnomes of Zurich for the sterling crisis of 1964, never mind that it might have been solidly grounded in economic fundamentals. President Clinton’s campaign manager, James Carville, became so angry about the pressures for deficit reduction that he snapped that if there were such a thing as reincarnation, he would want to come back as the bond market, because it was more important than the Pope.”
– Jeremy Warner.
He seems to be taking the line that ultimately, “we get the governments we deserve”. Well maybe, maybe not. The problem with this sort of argument is it begs the question of what “we” is being discussed. It is a disheartening experience to watch as so many of my fellows seem willing to vote for a bunch of statist buffoons. I feel no sense of kinship, no sense of “duty”, to a country inhabited by those who seem to have given up on basic facts of reality. And so I repeat the point I made a few weeks ago here: for a genuine patriot, an obvious option is to get out of this country. My plan B is still very much on the cards.
Over at the Stumbling and Mumbling blog, the author asks this question, after watching an interesting TV programme about the sort of free market activities he sees going on in bits of Africa:
“Why is it that the societies that come closest to the libertarian ideal are poor ones, rather than rich? (It would, I think, be a stretch to argue that libertarianism causes poverty in this case). What is it about wealthier societies that brings with them bigger government?”
I think this can be fairly easily explained: as countries get richer, their voters think – naively – they can afford to have big government, at least until they start to hit those sort of problems that we have encountered in the West in recent decades with government overload. In the US, for example, the country became so rich, relatively, after the Second World War that things like the Great Society reforms, or the Space Program, were easier to contemplate and the risks and costs could be shrugged off, at least for a while. I guess what happens is that after a burst of wealth creation – as in the UK’s Industrial Revolution – part of the population that has made a lot of money wants to ease up, or wants to turn to the easier, and possibly more exciting, realm of politics.
I sometimes notice that some of the noisiest anti-libertarians, such as many academics in the universities, live in the US, the world’s richest nation, and I think the two things are in fact connected. If you have an incredibly wealthy country, it spawns a lot of folk who have the inherited wealth, the time, and the inclination, to make a living outside the immediate commercial system, and hence, will argue for something different. You can see this in certain family businesses: the Alpha Male type sets it up and makes a shedload of money; the son is sent to a posh school and starts to want to be part of the Establishment and is teased by his schoolfriends for being in “trade”. The next son may end up in the professions, and as such, will tend to be drawn towards the State, or at least take a more benign view of state power than granddad. And I think this is partly what happened in the UK in the second half of the 19th Century and into most of the 20th Century. Part of the “business class” that might be expected to form the backbone of a free market order got housetrained by a remarkably conservative, ruralist, anti-commerce establishment. (This book makes such a case, for example).
There is also the issue of “correlation is not causation”. Just because big government can sometimes be seen in wealthy societies in no way proves that the former helps bring about the latter, or vice versa. Stumbling and Mumbling implies that libertarianism, being what it thinks might be a simple-minded creed, cannot work in a sophisticated, wealthy society. In fact, I’d argue quite the reverse: the more complex a society is with a complex division of labour and profusion of individual tastes and demands, the less effectively big government tends to work. In fact, there are plenty of examples of rich societies with a relatively small government – perhaps Hong Kong being one of the best examples.
The CATO Institute’s annual index of freedom report also suggests a pretty close relationship between countries that are rich and where the government focuses on the core, minarchist roles of protecting life and property, enforcing contracts, preventing fraud, etc. That does rather undermine the point made in the comment I link to.
It is, of course, excellent news if it is true that parts of Africa are heading down the pro-market route. But using such examples to make a bit of a dig against the wider application of classical liberal ideas is unfounded.
“I think that one of the narrative themes of the progressive era that spawned our modern state is the deliberate smashing of the poor and, in particular, of the “petty capitalism” that sustained them. One of the things I get from reading through the hugely influential London Labour And The London Poor by the reformist activist Henry Mayhew is a horror of the poor, as he describes the costermongers and hawkers and small underclass production businesses which sustained them. The poor had to be done away with and replaced with something more acceptable to higher class tastes and, by all kinds of social activism and regulation they were, to a large extent, done away with as, their petty capitalism squeezed out by the State, they were dragooned into a compliant workforce for factories run by bewhiskered, interfering philanthropists who voted for Victorian Nick Cleggs. And in the end, they all got their council flats and a better wage, and all they had to give in return was their spirit.”
IanB, who has happily resurfaced over at Counting Cats after a period away from the blogging gig.
I’d add my two cents to this article by arguing that although some people want things like council houses, rent controls and minimum wage laws out of a naive but sincere belief that these are good, it has always struck me that part of the reformist zeal to do away with things like “cheap labour” is a sort of “yuck” factor. I sense a lot of this whenever I watch a programme about the downtrodden, poor workers of distant lands. It never seems to cross the minds of the do-gooders here that such folk face far worse alternatives to working for a relatively low wage to a Western one – not working at all. The poor child labourers of Asia do not have the alternative of spending much of their teens in a school and then off to college. And in any event, their best hope of escaping their plight is to have as much vulgar capitalism as possible.
IanB identifies puritanism – both of the religious and the secularised versions – as a key driver of the reformists’ zeal. I’d also add in a sort of aesthetic dislike, even hatred, for industry and trade. The Fabian movement that has had such a baleful effect on the past 100 years or so was inspired not just by the Evangelical “Great Awakening” of the 19th Century, but by the back-to-the-land movements inspired by the likes of John Ruskin and William Morris.
Read the whole article.
Update: It might be objected (and indeed it was, predictably, by an incredibly rude and now banned commenter) that religious puritanism has anything to do with the nanny statist trends of our time. But while there are some who argue, with Max Weber, that the “Protestant Work Ethic” was in some ways pro-market, the fact is that that ethic was double-sided. Sure, there was a striving, pro-enterprise side of it, but there was also a strong, anti-materialist side and a side that scorned pleasure, which provided some of the intellectual fuel for groups such as the “Christian socialists” of the 19th and early 20th Centuries. The teetotal movement, for example, found ready adherents. And consider the intellectual backgrounds of folk like RH Tawney, Arnold Toynbee, and so on. To deny that they had religious inspiration for their views is obtuse.
I like this article by Tim Cavanagh over at Reason’s Hit & Run blog:
This is the problem with the new declinism. With no compelling vision of the apocalypse that doesn’t involve zombies, cyborgs, or outlaw bikers, we tend to miss something obvious: The problem isn’t that things are collapsing. It’s that not enough things are collapsing. General Motors, AIG, and the government of California have committed enough errors to merit immediate extinction, but there they still are. Yet the political establishment continues to argue that the market needs to be prevented from delivering rough justice to sinners. President Obama, who one year ago gave us a worst-case scenario in which an unstimulated economy might hit 8 percent unemployment by this year, now presides over 10 percent unemployment but tries to bamboozle us with counterfactuals like this doozy from the 2010 State of the Union address: “If we had allowed the meltdown of the financial system, unemployment might be double what it is today.”
He’s making a good point. Much of the current mess has been caused by policymakers, such as Greenspan/Bernanke at the Fed, or our own benighted Gordon Brown, trying to “rescue” a failed system by throwing huge amounts of money into the system to prevent disaster, only to build up even greater woes in the future. Going bankrupt is never nice, but by freeing up resources and more to the point, by making people learn from their mistakes, it is a healthy process. To borrow from Karl Popper, if we don’t allow bad investment theories to be falsified by events, then the market will fall short in one of its most powerful functions, of generating valuable new information.
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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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