“I am not in favour of any parental choice in education. You will go to your local school.”
– Former London mayor and Hugo Chavez buddy, Ken Livingstone. Not too up to speed with the concept of choice, is he? No wonder the unions loved him.
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As promised, I have some thoughts following on from the talk given by Kevin Dowd, a professor at the Nottingham University Business School and a noted advocate of what is called “free banking”. He gave his talk at the annual Chris R. Tame Memorial Lecture as hosted by the Libertarian Alliance. (The LA was founded by Mr Tame, who died three years ago at a distressingly young age after losing a battle against cancer.) Professor Dowd covered some territory that is already pretty well-trodden ground for Samizdata’s regular readers, so I will skim over the part of the lecture that focused on the damage done by unwisely loose monetary policy of state organisations such as central banks, or the moral-hazard engines of tax bailouts for banks. March 19th, 2009 | 56 comments - (Comments are closed)
 “It was John Maynard Keynes, a man of great intellect but limited knowledge of economic theory, who ultimately succeeded in rehabilitating a view long the preserve of cranks with whom he openly sympathised.” F.A. Hayek, Choice in Currency, a Way to Stop Inflation, Institute of Economic Affairs (1975), page 10. Prof. Hayek was usually a restrained and polite demolisher of nonsense but in this quote, I think we get a sense of the rage that he must have felt at how Lord Keynes, with his easy charm and confident manner, could persuade politicians of what they wanted to hear anyway – that you can create wealth by spending other people’s money. But even later on Hayek tries to argue that Keynes would have been alarmed at how his ideas have been used as cover for monetary insanity. I think that is a mark of how basically decent an intellectual opponent Hayek was. Meanwhile, following on from Kevin Dowd’s lecture last night – which I thought was very good – I will have more to say about his talk later on. March 18th, 2009 | 22 comments - (Comments are closed)
Tyler Cowen has an interesting post up about the whole business of pundits betting their own money on their views. Economics students may remember a particularly satisfying one involving the late, great Julian L. Simon and the alarmist writer Paul Ehrlich. Simon, who might be thought as a “cornucopian” writer, bet that the price of a basket of commodities would not, when adjusted for inflation, rise over a certain period. Erhlich had been claiming that commodities were running out at an alarming pace and their price would therefore skyrocket. He lost the bet. Simon suggested they have another go but Erhlich, being at least not totally stupid, decided not to accept the offer. The affair has not blunted his views, a fact that demonstrates the incorrigibility of some so-called academics. I wonder if there controversies over which you’d be prepared to stake a few pounds, dollars or pints of beer? March 17th, 2009 | 23 comments - (Comments are closed)
Regular Samizdata commentator Ian B made a good point on this comment thread (scroll down) about the issue of economic cycles. As he says, many of the boom-bust cycles have been associated with new products and markets where there is scanty information about how large a market might be. For instance, the technology boom of the 1990s involved an area – the Web – which was still unknown territory to most of us. Yes, most of us now are familiar to the nth degree with the Internet but that is because a lot of bold, not necessarily reckless, investors, geeks and entrepreneurs took a punt. With hindsight, some of these investment propositions were pie in the sky. Well, without perfect knowledge of the future, malinvestments get made. The same can be said of the 1840s railway boom. There were shysters and boosters like the 19th Century financier George Hudson, but out of the inevitable mistakes and broken dreams came a country that was criss-crossed with railways. Out of the bust of the tech boom came the Googles, Yahoos, Amazons and Facebooks of today. These technologies, for instance, have changed how I can do my job in all manner of ways, almost all of them for the better. Out of the hundreds of automobile companies set up at the start of the last century came the motoring titans of today. The examples multiply. As Ian put it, if people don’t want these busts, then maybe they are expecting the impossible if they also want to get still all the good things that a boom can produce. For sure, it would be good to stop fuelling mad cycles with fiat money, and that is why I want genuine free market banking, and not the quasi-statist dog’s breakfast, instead. But I am most certainly not in favour of the “calm” that comes when there is no change or disruptions at all. That is to demand the peace and quiet of the grave. Update: via the National Review’s Corner blog, I came across this in a similar mood to my point. March 16th, 2009 | 20 comments - (Comments are closed)
The BBC does not even pretend to be impartial these days. Iain Dale, the blogger for those junkies of Westminster politics, notes that for the second week running, the Andrew Marr Sunday politics show did not have a single guest from the opposition Conservative or Liberal Democrat parties. There may be a suggestion that the broadcaster is going along with the government’s refusal to put on any ministers if their opposite numbers appear on the show. I happen to think this is, unwittingly of the BBC perhaps, a good thing. By making the bias of that channel so blatant, it advances the BBC closer to the guillotine. At least when Fox News puts “fair and balanced” on its strapline, we know it is having a bit of a snigger. March 16th, 2009 | 20 comments - (Comments are closed)
This is a tremendous rebuttal of the claim that British manufacturing is in decline. Of course, there is nothing specifically wonderful in having a large or small manufacturing sector, but for those who care about such things, this article nails a lot of cliches about how Britain is supposedly losing the art of making stuff well. In fact, a lot of the manufacturing that goes on in the UK is first class. Take the aero-engine business, for example. Well, it is nice to grasp at positive news that is going. March 14th, 2009 | 27 comments - (Comments are closed)
I posted this item almost as Brian hit the button on his own entry on the same subject. But I think it is worth a second bite at this cherry. Great work by Fraser Nelson at the Spectator for revealing that Royal Bank of Scotland, which is now almost totally owned by the UK government, has been asking prospective clients about their political affiliations. The exact term is to ask whether a wannabe client is a “politically exposed person”. Now, this maybe more of a cockup than a sign of anything more sinister, so my trigger finger may be getting unnecessarily twitchy, but still. This is, as the commenters on the article Fraser writes says, a classic demonstration of why state-owned banks are bad and ripe for corruption. Special favours will be demanded by the ruling party’s clients. In France, remember, the former state-run Credit Lyonnais bank was a sink of corruption. RBS is also the parent of Coutts, the private bank, and RBS Coutts, the international version of said. These banks provide clients with offshore accounts. The risk is that such a bank could be put under political pressure to deliver details about its clients, a fact that becomes particularly relevant with so many governments currently trying to shut down so-called “tax havens” such as Switzerland. If it is the case that RBS has been trying to prize out details of potential clients’ political affiliations, then at the very least the management responsible for this dim-witted idea should resign. In fact, the Chancellor of the Exchequer, Alistair Darling, should serious consider his own position. On his watch, the once very solid, in fact gloriously dull, UK banking group Lloyds has been pressured into buying the debt-laden UK banking group HBOS. Result: Lloyds’ share price has crashed and most of that bank is now owned by the government. (Full disclosure: I bank with Lloyds). Unbelievable. March 13th, 2009 | 7 comments - (Comments are closed)
Bloomberg carries this article today about the willingness of China to go on holding Western debt that might deteriorate in value:
Good luck with that. As Brian Micklethwait noted the other day, the fact that the US, or indeed the UK, might be downgraded in credit terms as nations or even default on certain debts, is no longer unthinkable. Defaults are not just things that happen in Ecuador, Russia, or competelyfuckedupistan. They can happen in the supposedly rock-solid financial centres of the world. As Glenn Reynolds says sarcastically of the new US government of Mr Obama, the country is in the best possible hands. March 13th, 2009 | 16 comments - (Comments are closed)
Following on my from recent SQOTD about property rights, it seems poignant to link to this item by Roger Thornhill. This issue is also related to that of compulsory purchase/eminent domain that I wrote about some time ago. It is also somewhat related to the idea that the government is entitled to take money out of “dormant” bank accounts if, after a certain period, the account-holder does not use the account. The assumption seems to be, that if in doubt, it belongs to the collective. Well sod that, quite frankly. March 12th, 2009 | 11 comments - (Comments are closed)
I do not like all of Will Farrell’s movies. But this one, about a nutty US TV anchorman, is wonderful. I wonder if any actual broadcasters have ever dreamed of doing this? I bet Jeremy Paxman has. March 12th, 2009 | 4 comments - (Comments are closed)
“The trouble is that because schools fail to teach history, especially legal and constitutional history, the vast majority of today’s citizens have no inkling to what they owe their liberty and prosperity, namely a long and successful struggle for the rights of which the right to property is the most fundamental. They are therefore unaware what debilitating effect the restrictions on property rights wil, over the long run, have on their lives.” – Richard Pipes, Property and Freedom, page 291. Of course, by property, one does not just mean physical property, but also to the whole idea that individuals, not the state, own their lives. March 11th, 2009 | 49 comments - (Comments are closed)
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