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]
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It is an interesting argument made here that so-called “instant books”, written in the aftermath of some crisis or big event, can be easily overturned by subsequent events, debate and analysis. Quite true. And it is also true that the internet, blogging and online debate is intensifying this process of making a book look dated within months of publication. But it seems to me that in the article I link to, the author of the item is making some mistakes about the book, Meltdown, written by Thomas Woods about a year ago.
For a start, I think that it is worthwhile that some authors, as soon as the hue and cry went up about “greedy bankers”, sought to challenge the establishment “narrative”, assiduously supported by parts of the mainstream media, that says that the meltdown in financial markets somehow proves that capitalism is flawed, needs more regulations, controls, etc. Getting a book out as quickly as possible makes sense because a book is a talking point. Even if some of its facts are challenged or overturned, the point is that the author gets invited to give talks, has to take questions, can be asked for more details, etc. A book, in other words, is a good starting point. No book, no launch party, no nothing.
And challenging the established narrative any way possible is important. The usual line is what I hear from David Cameron, Barack Obama, and of course our own government. To hear the contrary view, that what happened was primarily caused by state-established central banks distorting price signals of interest rates, and hence fuelling an asset bubble, is much rarer. For example, the other day I walked into Waterstones, and in the section on economics and current affairs were books such as Gillian Tett’s Fool’s Gold, or books with such racy titles as How I Caused The Credit Crunch. In these cases, the books will typically treat the issue as one where the crisis is caused by “greedy”, or naive bankers, who are treated as little different from wild animals, or caused by the supposed dangerous complexity of trading technologies.
The author of the article criticising Mr Woods’ book, Roger Donway, argues that Mr Woods’ book is flawed in many ways, as it, for example, does not give much of an idea of what caused the crisis beyond the standard “Austrian” analysis of what happens when central banks flood the world with fiat money. But why should Mr Woods write a 1,000-word tome to spell out the causes of the crisis in every last detail? The purpose of the book, as is pretty clear to someone like me who knows a thing or two about economics, is to spell out to the general reader what the broad, free market take on the crisis is. I happen to think that Mr Woods summary of the “Austrian” view on what money, banking, the business cycle, etc, are, is simply brilliant. There can never be enough books spelling out why, for example, it is necessary to understand the role of money, and what money is and more, what it is not.
Mr Donway just assumes that folk who might pick up Mr Woods’ book off the shelves are already well-versed in their von Mises, Hayek or Rothbard. But that is hardly likely. The sort of person who steps into a bookstore, and wants to read something about the current financial mayhem, and who might be the sort of person who doubts the current wisdom but who is not an economics specialist, is ideally suited to read this sort of book. Yet Mr Donway writes:
“Chapter 5 also presents material familiar to anyone who has perused some works of Austrian economists, particularly the works of Murray Rothbard. And this material is even less informative about the meltdown of 2008. Entitled “Great Myths about the Great Depression,” the chapter actually takes very brief looks at the depressions of the nineteenth century and the depression of 1920–21, as well as devoting 11 pages to the causes of the Great Depression. And how does an examination of the Great Depression help explain the collapse of 2008? “In both cases, an inflationary credit boom brought about by the Fed’s lowering of interest rates led to massive resource misallocation and a distorted capital structure.” (106) That’s not very helpful.”
The events of previous depressions/recessions will always be different in certain ways from what is happening now, but that is nitpicking. The point of why Mr Woods talks about the short-lived recession of 1920-21 (solved quickly without a Keynesian orgy of money-printing) and the decade-long stagnation in Japan in the 1990s, say, is to shed light on what ought to have been the approach of policymakers in the recent past. To say that an examination of the Great Depression gives no insight into what is happening now strikes me as a case of trying to shout debate down. After all, one can be sure that the advocates of Big Government and Keynesian demand management will call history in aid if they think it bolsters their case.
This paragraph is perhaps a bit fairer:
“Now, some critics might blame this tendency to abstractionism on Woods’s “ideological” economics, but I do not. If he believes in the pure Austrian theory of boom-and-bust, fine. Let him present his analysis using that theory and let his explanation be judged by its adequacy, not by its origins. But in order to judge the adequacy of Woods’s case, we need to hear him make it against those economists who understand his theoretical approach but disagree with it or at least disagree with his application of it. It is no help to hear Woods rebut mainstream economists who do not take Austrian economics seriously.”
Quite possibly true. I know for a fact that people operating in the free market school of thought differ about quite a lot of things, such as whether fractional reserve banking should be illegal, whether state central banks are an evil to be abolished or institutions to be placed under better, tighter rules, etc. But Woods cannot be expected to go into vast reams of text to debate every real or potential objection from such quarters; and in any event, he does, I think, point out the differences that exist between say, the Chicago school – in some ways closer to the Keynesian one – and his “Austrian” point of view.
Of course, there is a need – and this is where I think Woods’ book falls short as a piece of work – in showing exactly what practical steps governments could take in putting financial systems on a sounder footing. There is, in the UK for example, a move by economists such as Kevin Dowd and the folks over at the Cobden Centre to flesh out in detail as to what an “honest money” banking and financial system would actually look like. And as I have previously mentioned on this site, Professor Dowd has sketched out how, for example, a failed bank could be restructured and bankrupt banks be let go without crippling an economy.
And Professor Dowd has, or is about, to release a book on these matters. But for all that the Woods book may be a bit lacking in some respects, I do believe he did me a favour in helping to marshall some of my own thoughts about how to think about the credit crunch. I am glad he did that, and most impressed that he did so in such a short space of time, by focusing on the core ideas at stake.
“In the 19th century, the British would have answered Mr Riley-Smith’s question “What has trade to do with human understanding” very readily. It has a great deal to do with it, we would have said. Commerce is the main means of peaceful intercourse with other people. It is the circulatory system of the world. It is part of the constitution of liberty which, as the author rightly says, we exported to America. If we have forgotten this, it is we, not the United States who are – both metaphorically and literally – the poorer.”
Charles Moore, writing about what he regards as an interesting but in some ways wrong-headed book about America by Tristram Riley-Smith.
Well, the days are getting longer, I have even seen quite a bit of the yellow thing in the sky, and I was woken up this morning by some randy pigeons on my terraced roof, so let’s take it away, Mr Tom Lehrer:
Spring is here, a-suh-puh-ring is here.
Life is skittles and life is beer.
I think the loveliest time of the year is the spring.
I do, don’t you? ‘course you do.
But there’s one thing that makes spring complete for me,
And makes ev’ry sunday a treat for me.
All the world seems in tune
On a spring afternoon,
When we’re poisoning pigeons in the park.
Ev’ry sunday you’ll see
My sweetheart and me,
As we poison the pigeons in the park.
When they see us coming, the birdies all try an’ hide,
But they still go for peanuts when coated with cyanide.
The sun’s shining bright,
Ev’rything seems all right,
When we’re poisoning pigeons in the park.
Lalaalaalalaladoodiedieedoodoodoo
We’ve gained notoriety,
And caused much anxiety
In the audubon society
With our games.
They call it impiety,
And lack of propriety,
And quite a variety
Of unpleasant names.
But it’s not against any religion
To want to dispose of a pigeon.
So if sunday you’re free,
Why don’t you come with me,
And we’ll poison the pigeons in the park.
And maybe we’ll do
In a squirrel or two,
While we’re poisoning pigeons in the park.
We’ll murder them all amid laughter and merriment.
Except for the few we take home to experiment.
My pulse will be quickenin’
With each drop of strychnine
We feed to a pigeon.
It just takes a smidgin!
To poison a pigeon in the park.
My old friend, Andrew Ian Dodge, now residing in the chilly US northeastern state of Maine, has a book out, And Glory, which is set in a near future where the EU superstate is in full power (not that far off, then, Ed). He mashes up a a bit of political speculation, SciFi and good rollocking drama to make an interesting read. (As if my reading list was not long enough, aaagrrrh).
I have been thinking about who else has written books where the EU is treated as a sort of malign feature of a novel. One that springs to mind is Andrew Roberts’ novel, written a few years ago, called The Aachen Memorandum. I am a fan of Roberts the historian, so this hopefully would be a good read. Sometimes the EU crops up in the science fiction books of Ken Macleod, as in Cosmonaut Keep. And I recall that Peter Hamilton made some glancing, and unflattering references, to the EU in this recent novel, which was quite enjoyable, albeit with a rather unpleasant central character.
Of course, writing any speculative novel about the European Union carries the risk that reality keeps overtaking the story line. I mean, I wonder if either the two Andrews mentioned here or Ken would have envisaged the idea of a German politician suggesting that Greece flog off some of its islands to pay down its debt?
And as an aside, Henry Porter, the British journalist and scourge of this government over its dreadful civil liberties record, also had a novel out recently that I can recommend for mixing a powerful message and a cracking good storyline.
If commenters can think of other novels where there is an EU angle, let me know.
“By God, The Guardian is a loathsome newspaper; a local north London morning daily for Stalinist metro libtards, perpetually arrogant, snobbish, self-righteous, humourless, dull, relentlessly middle class, cowardly and cheap.”
– Rod Liddle
As regulars know, I am not Mr Liddle’s greatest fan but when he is on form, he really hits it out of the park, as they say in baseball. The whole piece is an exhilerating piece of invective, all the more delicious in that its targets deserve everything they get.
Rob Fisher, another occasional commenter at our threads who has his own blog, has this to say about a new TV show about border security guards (yes, that’s right). On the basis of his comment, I think I will be watching the rest of Mad Men instead.
If you want an, er, interesting take on the global warming alarmist/doomonger/population-controller mindset, check this out. Not safe for work, well, at least not in some offices I know of.
NickM, Samizdata comment thread regular who gigs over at CountingCats, pretty much sums up my own views about the Tories and David Cameron at the moment. Which got me thinking: what would happen if, heaven forbid, we got another few years of Gordon Brown in Number 10?
This is all getting very ugly indeed. For a start, sterling is falling fast in the exchanges. There is, I think, more than an outside chance that if long-term government bond yields start to rise faster to attract lenders to lend, it will push the UK back into the recession from which it only recently – if you believe the data – recovered. I also think this government is quite capable of reiimposing exchange controls, which means that tourists, for example, would not be allowed to take more than a piddling amount of cash out of the UK. Of course, such a policy would not be announced in advance but imposed as an immediate measure. But it is a prospect to bear in mind. It is a bit academic in my case, but it is worth moving any spare cash you might have offshore, assuming you can do this without incurring a heavy charge. With what investments I do have, I tend to make sure that a fairly high proportion are in economies that are not heavily exposed to sterling. I am also a bit of a long-term dollar bear, given that the US also suffers from massive debt problems and that the dollar is also losing its reserve currency status, albeit slowly. I also favour commodity-backed currencies (the Australian dollar, for instance.)
Next year, I can qualify to get a Maltese passport, which, among other things, makes it easier for me to live in places such as Canada, apparently. I am going to look into this seriously. In the current environment, it pays to have a Plan B. I am lucky: as we don’t – yet – have kids, me and the missus will not have too great a trouble getting out, although I would contemplate it perhaps even more so if I did have children. I have worked abroad from time to time, so some of the logistics would not be a mystery to me. My only major reservation at the moment is that if I did move, I would not want to be too far from my parents, who haven’t been in the best of health lately and are not getting any younger.
UPDATE: Thanks for the feedback (well, most of it, anyway). First of all, my support for the freedom to migrate – as in the above instance – does not mean that I can expect to go where I like, or change the culture of the country to which I choose to live, or impose my values on such places. Which means that I do not dismiss the worries of those who have been concerned about, say, the influx of folk from very different cultures into the UK (ie, from the Muslim world). There is also the injustice, of course, of migrants taking up welfare benefits in the countries to which they enter – that clearly should stop. But such important caveats aside, as I have said, the freedom of exit is, if you think about it, the ultimate freedom as it protects other freedoms. If the situation becomes intolerable, it is glib for someone to argue that I am somehow “harming” my fellows who stay behind by leaving. If a state can ban or seriously hamper any individual from leaving a country of his birth, tht person is a serf.
One commenter by the name of Tim thinks my argument for leaving is somehow unprincipled as I will be causing, albeit in a tiny way, the very sort of problems (a falling pound, etc) that is bothering me in the first place. That argument does not convince. One might as well object to my refusing to use the services of a firm any longer because the firm will lose sales. Yet the firm, if it is run by intelligent people (big if) will react to the loss by trying to make itself more attractive. If a country is losing people and their departure is a “harm”, then surely that very fact is an incentive for countries to change course, to encourage people to enter that country rather than leave. Or take another analogy: socialists get upset by the idea of school choice because a school will be “harmed” if dissatisfied parents pull their kids out and send them somewhere else.
Trawling around some sites to find a corporate statement, I came across this gem:
“Secretary of State Hillary Clinton to Attend The Daily Beast’s Women in the World Summit.”
Blimey. Is the writer of that headline channelling the late Evelyn Waugh?
“The declaration of neutrality on the issue of the sovereignty of the Falklands issued by the US State Department is clear proof of the uselessness of the Obama administration.”
James Corum, military expert, ex-US soldier and writer in the Daily Telegraph. I would point out, in fairness, that in the early phases of the Falklands conflict in 1982, some members of the Reagan administration initially were sympathetic to Argentina, or at least tried to prevent a UK military recovery of the islands. But the Obama administration clearly has little love for the UK. Fair enough: let the UK follow its national interest and f**k the White House.
Over at Devil’s Kitchen, the blogger uses justifiably salty prose to describe what he thinks of Nick Clegg, the leader of the Liberal Democrat Party, after Mr Clegg gave various proposals for taxing City bankers and the like, including such brilliant ideas as raising the rate of capital gains tax to 50 per cent on top earners, in line with the new, 50 per cent income tax rate due to kick in at the start of April. Clegg gave an interview to the daily freesheet, CityAm.
Clegg, let us not forget, could be in a position to be an important power-broker if the outcome of the next UK general election produces a hung parliament in which no one single party has an overall majority. Given that both the Tories and of course Labour have shown no reluctance to pander shamelessly to anti-banker, anti-capitalist sentiment, it is likely that if any of these parties gets into bed with the LibDems (a truly gruesome thought, Ed), that such “bash-the rich” crapola will get worse. So we can expect the exodus of wealthy people from this country to continue if this sort of zero-sum economics nonsense holds sway.
Under trade descriptions legislation, the LibDems’ own brandname would be declared as false advertising. Liberal they are certainly not.
Eric Raymond has a thoughtful and compassionate article at his blog about two people he knows who are down on their luck in the US economy. They are not uneducated bums, or lacking in motivation. But they are examples, he says, of how the rising costs of hiring and firing people has, when coupled to other factors, meant that many people will not enjoy the benefits of any subsequent economic recovery. Money quote:
“I now think the increasingly jobless recoveries from the last couple of downturns were leading indicators. The end of the post-New-Deal fantasy that we could increase the friction costs of capitalism without limit, regulating and redistributing our way to prosperity, is hurtling towards us like a dark sun. A and B are two of the luckless bastards who are spiraling down its gravity well. Multiply them by ten million to see what it’s like when the contradictions of socialism on the installment plan come home to roost.”
I tend to associate labour market rigidities with Western Europe – where high levels of unemployment have persisted alongside relatively high GDP growth (that’s assuming you believe government GDP figures, Ed). It is tragic that the same process is at work in the US, at least if Mr Raymond’s article is indicative of a broader trend.
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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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