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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I do not intend to buy the book, but Sean Gabb’s review of Kevin Carson’s recent work is well worth reading. Carson is a sort of radical anarchist-libertarian who has interesting things to say. He is worth paying attention to; and Sean gives what looks like a very fair appraisal. And reading Sean’s review got me thinking about one supposedly arcane issue: bankruptcy law.
I thought about this because Mr Gabb, whom I would consider to be a libertarian in the Rothbardian tradition – with a Burkean twist – and Mr Carson are opponents of limited liability laws. I am not so opposed, but I can certainly concede the force of the point, and I think a similar point applies to the bankruptcy codes of some western countries. I have come across several instances recently of the “pre-pack”, in which a business goes into liquidation, the firm’s assets are sold off to supposedly the highest bidder, and the firm is re-started, Phoenix-like, under the same management, often in exactly the same business and line of work. I know of at least one business rival of my firm who has done just that and has, as a result, been more or less given, for free, hundreds of thousands of pounds in credit, while his creditors get the shaft. In a pure free market order, a rather more drastic outcome might be felt by this debtor, not least, the blackening of his or her business reputation. Indeed, if I recall from history, debtors used to go to jail.
Now, there may be good reasons for bankruptcy protection laws: they ensure that the chances of creditors getting their money back are enhanced by continuing a business as a “going concern”. But a balance needs to be struck, since if the law is too lax, it surely means that many borrowers get away scot-free with heavy debts and as a result, the average cost of credit goes up for the rest of us, good and bad risks alike. The law of unintended consequences strikes again.
Anyway, I am sure Carson’s book, which covers a wide field, will get plenty of attention.
Here is a revealing article in the Washington Post – hardly a newspaper of the conservative or libertarian side – that mocks the fawning treatment of Mr Obama by much of the press. Things change but there are continuities: I can remember how Tony Blair, or, for a while, Bill Clinton got such an easy ride in the press. The media was studiously easy on JFK in the early 1960s and covered up Kennedy’s numerous extra-marital affairs. Sure, Bush jnr got an easy ride from some of the Right – remember when Andrew Sullivan practically wrote love letters to Dubya before the gay marriage thing sent Sully off the edge? – but there was not the kind of broad-based cult of worship that there now is around the community organiser from Chicago.
Apart from Fox, the editorial pages of the Wall Street Journal, a few niche publications like the American Spectator and the blogs, Mr Obama has had a remarkably easy ride and it does not seem to be ending soon. In part this is because much of the liberal media, even if some of its more intelligent denizens know that this is a bit silly, are playing as a “team” for Their Man, and don’t want to be seeing doing anything that might help the other side.
There has always been, and always will be, slanted coverage of public affairs, and it will continue. Even if the BBC in the UK were scrapped tomorrow and its reporters sent off to planet Titan, the fact is that there will be a substantial block of leftish/liberal media types and pundits. But the sheer, jaw-dropping bias of the White House press corps is something to behold. But maybe, just maybe, there are signs of cracks in the facade. I cannot help but think that Obama has, by trying to be all cool and sophisticated over the Iranian turmoil, started to piss off even parts of his side. He does not walk on water, and it is about time that this fact was noted. The stance now adopted by the media is not one suitable for self-respecting adults.
This might have made the grade as a Samizdata quote of the day, but we already have a superb one today. However, I wanted to post this by the regular commentator, IanB, as it was too good to leave at the bottom of a very long thread about the flawed idea that land, qua land, is special, and must be singled out for tax because of its supposed uniqueness, as distinct from say, income or consumption:
“Liberty is based on a different presumption which has the virtue of making sense, which is that people should own property and do with it as they wish, because it is their property. And, honestly, if I save up and buy some land and plant a big garden on it for my retirement, I don’t care whether you think it would be better used for a glue factory because that would return you some externality that you can double charge for via your tax.”
“This is why liberty and georgism are incompatible; you keep making claims on behalf of the community. Screw this “community” of yours. It has no rights or claims on me beyond the right to freely interact with me. The LVT is a crude social engineering plan. It attempts to maximise productivity of land. Liberty is not about maximising any statistical value- it is simply the principle that the person may do with themself and what is theirs what they wish. So long as they produce enough by whatever means to survive, there are no other demands upon their economic activity.”
Exactly. Suffice to say, I doubt the LVT enthusiasts will give up (they are persistent, a bit like cockroaches that can apparently survive a nuclear blast). Question: why does this issue come up a lot on this site? Are we masochists? Well, libertarians obviously are against taxation, period, but there are grounds for debate on the least-worst form of tax; for what it is worth, some form of consumption tax is probably best in my view, not least because they tend to be fairly easy to collect, although there are still issues here. But in debating the pros and cons, let’s not lose sight of the fact that it is tax, per se, that we want to grind down as far as possible (that leaves open debate between anarcho-capitalists and minarchists on how to fund “core” functions of law and defence). There is no such thing as a perfect tax, and use of tax to re-arrange some alleged fault in the economic order of things by punishing some presumed “unearned” surplus is not just morally wrong, it is almost always doomed to failure. So however tedious some readers might find the LVT debate, I make no apologies for giving it the occasional good kicking on this site, along with other taxes.
The debate has certainly encouraged me to read a bit more about Henry George, the thinker associated most often wiith the land tax idea. He was an interesting thinker in many ways. He was a good guy in many respects: a passionate defender of free trade, for example. And he hated other taxes besides LVT. He’d be far too free market for most of our current politicians. Here’s a nice entry on him, which has some good but I think very fair criticisms.
Update: as part of our slugfest with these Georgists – they embrace a range of ideological stances, BTW – I thought to add some further points, having read a bit about their views. I don’t know why Georgists should, for some reason, not give more weight to foolish central bank policy in causing asset price bubbles, or assume that property bubbles are bad, but other bubbles – like say, the dotcom one of the 1990s, are less so. One Georgist likes to raise the example of Hong Kong, which has a LVT. But that example won’t fly as there have been big gyrations in the price of accomodation, which hardly suggests LVT did much to alleviate the situation, or by much. In fact I would say that proves pretty conclusively that LVT, on its own, cannot fix this sort of problem if monetary policy is deranged by Keynesian demand-management or other economic quackery.
There is another, even more fundamental problem with the Georgist position about land. The problem is that it does not distinguish between the fact that while land is, by definition, fixed, available land is not. This is why the likes of John Bates Clark, an economist of the late 19th Century, demolished the land value tax movement’s arguments as did Murray Rothbard half a century later. Both men pointed out that the LVT argument ignores the fact that the price of land is driven by its marginal productivity, and in that sense is no different from labour or physical or human capital. To single out land for special tax treatment will lead to a misallocation of resources, encouraging more building density than is rational, etc. The total amount of land is fixed – obviously – but the total amount of sellable land is determined by the amount of marginal buyers and sellers, a very different thing. If demand is heavy enough, new land comes onstream. Just ask the Dutch.
Update: one commentator on the other long thread – it is so far down that I’d rather address it here – claims that Rothbard’s critique has been “thoroughly demolished”. Has it hell. Perhaps someone could explain to me why his point is mistaken. Consider this paragraph by the fellow:
“The selling-price of an asset on the market will be the capitalized value of its expected future rents: the capitalization to take place at the going rate of interest. The rate of interest is the price of “time,” and hence future earnings are discounted back to the present at this rate. A piece of land sells now at the discounted sum of its future rents. Similarly, any asset will sell at the capitalized value of its future earnings; and where these earnings accrue from hiring out, the rent selling-price relation will be the same. If Rembrandts are habitually rented out to museums, they will earn, say, per monthly rents; tuxedos will earn nightly rents, and so on. Admittedly, land differs from improvable capital because land is not replaceable, and therefore land earns ultimate rents.”
And then this:
“The Georgist has a curious conception of the market; he considers that the market is independent of the actions of an important part of its constituent individuals: the suppliers. On the contrary, there is no entity “market” which will take care of finding correct rents. If the shell of ownership is left and its contents confiscated by the State, there will be no incentive for owners (whether of land or Rembrandts) to allocate the assets to the highest bidders and most productive uses. There is no inconsistency when I point out that everyone will rush to grab the best locations if land were free; it would be the same if Rembrandts were suddenly declared free by the government (or if there were a 100 percent tax on their value).”
Here is also a very detailed, and to my mind, devastating take on Georgism in its various forms, by the writer Paul Birch. It is pretty technical, but worth studying. He concludes that the “libertarian” Georgists are the least-bad, but also notes, as many Samizdata commenters have done, that Georgists tend to flick around between a sort of hatred of landlordism per se on the one hand, and a more pragmatic concern with efficiency, on the other. One commenter has referred to landowners as “parasites”. That should tell us something about where these guys are coming from.
In boxing terms, the referee would have to stop the fight at this point to save Mr George’s hide. And I am done here.
“We live in a broadly capitalistic society…if Briitish Airways gets into trouble and cannot be sustained as a profitable business, then the government should not step in and bail it out.”
Richard Branson, talking about the economic woes of British Airways. I have no idea whether sincerely believes in untramelled laissez faire (one has doubts) or is just dissing the competition, but it was refreshing to hear such comments on the BBC Breakfast TV show this morning. Take note, Messrs Obama, Brown, and the rest of them.
Warning: for the irony-challenged, this is a spoof.
Or maybe not.
Talking of issues to do with property ownership, this Daily Telegraph article about how some of the old industrial cities in the US are shrinking caught my eye. The US authorities are encouraging, with the use of a bit of public funds, the idea of knocking down whole swathes of supposedly defunct towns and cities and returning them to their “pristine” natural state. It is, in one way, a part of what the economist Joseph Schumpeter once called the “creative destruction” that is vital to capitalism.
Except that I don’t see a lot of capitalism going on here, more a sort of hybrid of private enterprise and state involvement. If, as the article claims, hundreds of square miles of urban area in the US/wherever are no longer economically viable, and could be used for something more economically valuable, whether it be farmland, recreational parks, golf courses, boating lakes, race tracks, or so on, then why not leave it to property and land developers? I find it worrying that the US government, either in its federal or local forms, can decree that an area of land is no longer “economically viable,” and decide to send the bulldozers in. And I also cannot help smelling a strong whiff of anti-suburbanism in this article, at least according to some of the folk quoted in it.
I tend to find that it is a revealing about a person’s overall viewpoint as to whether they slag off suburbs or not. If you despise them, chances are that you are a member of the Enemy Class, even though such people hypocritically live in such places.
Maybe it is the garden gnomes, or something.
Tim Worstall – back in harness after running for office as a UKIP MEP – writes about the Labour government’s stated desire to ensure that not a single tract of the UK is without broadband access. It is the sort of techie, practical measure that Mr Gordon Brown thinks will help win him a bit of respect in the traditional Tory and LibDem shires.
As Tim says, the logic of this idea is questionable. There are geographical, physical reasons why broadband access, or indeed other forms of communications, are not available everywhere, all the time. Also, as the comment thread attached to Tim’s piece reveals, there is this argument, that I have raised before – also prompted by one of Tim’s articles – about why people feel that because X or Y wants a road, canal, power cables, whatever, that therefore the state should be able to use compulsory purchase powers, and taxation, to pay for whatever it is that is wanted. I have referred to this mindset as “brute utilitarianism”. Also, it is a cost of living in the countryside that one does not always have the same degree of speedy access to certain things that one has living in a town or city. That’s life, so folk should deal with it. (One of the few arguments for land value taxes is that people living in such remote places would, other things being equal, pay less taxes also. However, there are other problems with LVT as the Austrian school of economics points out, attractive at first blush though the idea might be).
I pay more to live in my rabbit hutch apartment in Pimlico and for the same outlay I could live in a big place in the sticks. But for the benefit of living in SW1, I get quick access to airports (a short trip from Victoria to Gatwick); the Tube, buses, taxis, broadband access, etc. This is part of the cost “package”, if you like, that comes with my locational choice. A person who lives in a remote area and who demands Pimlico or New York-style communcations is demanding that the citizens of a city should subsidize that preference. And yet many of the people who migrate from the towns to the country are quite well off; as I have noted in my native Suffolk, as soon as the townies settle in, they start demanding all kinds of amenities, not realising, or caring, that such things don’t exist because they are relatively expensive to put in rural areas, which is precisely why Mr and Mrs Chartered Accountant can afford to live in their nice village cottages in the first place.
Sometimes such debates are as easy as this: if people want something, then damn well pay for it yourself, and do not use the robber powers of the state to grab it off someone else.
Rant over.
Er, not quite: my reference to LVT brought out a crop of Henry George “land-is-special!” types on the comment board. Several of us have responded to them, but I came across this nice essay by Jan Narveson, which I think is one of the best smackdowns for the land value tax mob that I have ever read. Excerpt:
Now, the point of this little essay is that that is basically all there is to it, and there doesn’t need to be anything else. The idea that we all have an equal right to the land is amazingly arbitrary, and contrary to all human experience while it’s at it. It’s arbitrary in that it has no basis. The fact that we don’t make the land is irrelevant, as already seen: we don’t make the natural part of anything we have or own, no matter whether we have “made” it or not. But the point is, it doesn’t matter. For things are just things: they do not come with labels saying that they “belong” to some people or that some people, somehow, have a “claim” on them, nor in turn that everybody has a claim on them, equal or otherwise.
“It is rare that governments successfully cut costs by first spending more money.”
– Tyler Cowen. He was talking about Mr Obama’s plans to socialise US medicine. I am sure that when the NHS was set up here in the UK, the advocates of said argued that it would “save” money in the long run. Meanwhile, here is some useful commentary from Arnold Kling.
The late Peter (Lord) Bauer, a Hungarian-born economist who lived for much of his life in the UK, did outstanding work in demonstrating why markets and trade are superior to overseas aid, and pointed out how aid, and the organisations that often get involved in delivering it, frequently make problems of poverty worse, not better. Even aid advocates like Sir Bob Geldof will readily concede, meanwhile, that aid delivery becomes next to impossible during conditions of war, and when countries are under the rule of armed thugs. So last night’s Channel 4 programme on Somalia will have surprised few regulars at this blog.
What was interesting was how local traders were allegedly bribing some aid officials to take sacks of food and then sell it into the market. We were meant to be appalled by this, and part of me was. But also I also could not ignore the fact that this part of Africa seems to be buzzing with a sort of entrepreneurial class of men – one did not see many women – who trade in, and take great efforts to obtain, food and other stuff. That surely suggests that a market, of sorts, works in this part of the world. But what clearly does not work is the rule of law, or the enforcement of property rights. Without due protection for the latter, in particular, then the indestructible desire to “truck and barter” can all too easily degrade into a form of banditry. But let’s be clear here: while one can be nauseated at foreign aid being filched by some of the locals, that desire to trade is not, in itself, the problem. It is, in fact, part of the solution to the poverty of Africa.
Meanwhile, I strongly recommend William Easterly’s book on foreign aid and the mistakes that well-intentioned folk make about aid.
In just over one month’s time, some of us space geeks will be hoisting a glass or several to mark this 40th anniversary. I was only a three-year old toddler when Messrs Armstrong and Aldrin climbed out of the craft and onto that dusty, sun-blasted place called the Moon. 40 years. Popular Mechanics has a good look at what it all meant.
I think a good place to mark the occasion would be down at Greenwich, London, near to the Royal Observatory.
Some right-wing Americans got very upset when Jon Stewart, the TV comedy/news guy, monstered the CNBC “Mad Money” front-man Jim Cramer a few months ago. They had a point; it is clear that at least in some of his shows, Stewart tacks left. But whether unwittingly or otherwise, he was very fair in an interview recently with Peter Schiff – who by the way is possibly running for political office. Mr Schiff is a hard-money capitalist, an attacker of the Fed, of the bailouts of Bush/Obama. I wrote about him a while back. And Schiff used the platform of this very popular show to beat the drum for free markets, sound money, and getting rid of the Fed.
Good for Jon Stewart, at least on this occasion, for giving Schiff a platform.
Books that try to convey important philosophical ideas can sometimes be a bit of a struggle to read. Much as I liked Ayn Rand’s Atlas Shrugged for the sheer sweep of the novel and the way it tackled all manner of topics, I’ll be the first to concede that some folk out there will find that type of book a daunting read. But a shorter, and highly engaging, example of something rather similar has been out for a few months now: “Old Nick’s Guide To Happiness”, by Nicholas Dykes.
I will not give the plot away but to say that Mr Dykes’ novel is based in the wilds of Scotland, focusing on what happens when a young man, who is shortly to head off for Oxford as an undergraduate, gets lost and hurt during a hiking expedition in the Highlands, and how he falls in with a rather unusual couple living there. There are lots of discussions of philosophy and ideas along the way, but is done in such a charming way that the reader, whatever their views, will not feel they are being lectured at. Admittedly, if you are a religious fundamentalist, deep Green or hardline collectivist, then this book will drive you nuts.
I have known Mr Dykes for several years and he has been a regular writer for the Libertarian Alliance, among other places. I liked this book very much and I hope Mr Dykes tries his hand at another novel. As he realises, abstract treatises are all very well, but if you can convey ideas through the medium of fiction, with strong characters, a good plot and plenty of engaging detail, it can be far more effective. The Left, if I can be permitted to use that term has long understood this – it needs to be understood by those who work in the broadly classical liberal tradition, too. And the same point applies even more, perhaps, to the world of TV drama and films.
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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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