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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“Over the next few years, all those heavily subsidised plants in the US, Germany and France are going to come on stream, selling chips into a global market where there are too many of them and prices are tumbling. The losses could be vast. Taxpayer money will have been put to terrible use and, in the UK, Treasury officials will perhaps be quietly breathing a sigh of relief that we were too hopelessly disorganised. There is a lesson to be taken, not least at a time when when `industrial strategies’ are more popular than ever. Just because a product is important it does not mean any particular country has to produce it. And if demand is growing, it is safe to assume private companies will be capable of meeting that need without help from the state. Too often, governments end up subsidising the wrong industries at the wrong time. They have a poor record of picking winners, and should instead set low and fair taxes, lower tariffs, keep competition open, and break up any cartels. Once they have done all that, the market can decide which are the industries of the future.”
– Matthew Lynn, Daily Telegraph (£).
My only quibble with the quote from this excellent article is that his support for trust-busting activity needs to be qualified with the point that a lot of anti-monopoly activities by governments are often based on a misunderstanding of competition as a static game, not a dynamic process through time. We see this regularly in the recent wailing about Big Tech. (See an article here.)
I am saddened to read that Nigel Lawson, former UK Chancellor of the Exchequer, and an articulate advocate of the UK’s departure from the EU (and also a rigorous debunker of global warming catastrophism), has died at the grand age of 91. My condolences to his family and friends.
It is ironic that he fell out with Mrs Thatcher in the late 80s over the issue of the UK joining the Exchange Rate Mechanism in Europe. He was opposed to the euro, but saw ERM entry as a necessary way for the UK to try and control inflation. In that sense he was a fixed-exchange rate man, and in the 19th century he’d have been a Gold Standard defender, I suspect. In the end, he was at one with Mrs T. on the dangers of a centralising Europe. And of course, in his time at 11 Downing Street, he cut top rates of tax and simplified the system dramatically. Alas, his successors haven’t continued that trend. Lawson was also the intellectual driving force behind privatisation of state-owned businesses, and while arguably not enough was done to promote competition, the overall benefit in my view was considerable.
His speech explaining why the UK had to leave the EU remains, in my mind, one of the most brilliant and succinct explanations for why this was the right course. He focused, rightly, on the issues of democratic accountability and freedom.
Right to the very end, his mind was as sharp as those of all too many in power are blunt.
“For decades, traditional manufacturing jobs were gobbled up by automation and offshoring. This led Robert Reich to postulate a hierarchy of work in which the “symbolic analysts” – essentially, people who worked with information as opposed to actual stuff – were at the top, while people who worked with actual things were at the bottom. With a remarkable lack of sympathy, journalists and politicians told coal miners and auto workers that they should “learn to code” as their jobs vanished.”
– Glenn Reynolds, on his new substack column. He goes on to note the irony of how it is writers of code, rather than some in manual labour jobs, whose jobs are on the line. My own view is that this is not really the time to let one’s eyes gleam in pleasure at seeing this or that sector be taken down or elevated. (Beware the karma involved, folks.) What, above all, counts for me is ensuring that government stays out of the way as much as possible. To imagine that governments can somehow manage whatever AI comes up with is to ignore the hubris over matters such as the “climate emergency”, Covid-19, and all the rest.
“Artificial intelligence in particular conjures the notion of thinking machines. But no machine can think, and no software is truly intelligent. The phrase alone may be one of the most successful marketing terms of all time.”
– Parmy Olsen, Bloomberg columnist. ($)
“A bank without a chief risk officer is a bit like a football team without a left tackle. It’s not the sexiest position on the field, and most fans couldn’t recognize him without a helmet, but what the left tackle does is crucial. He’s the guy protecting the quarterback’s blind side when a 250-pound pass rusher is trying to pulverize him. Silicon Valley Bank not having a chief risk officer for a brutal year in tech was the equivalent of that left tackle walking off the field during a blitz.”
– Ben Cohen, Wall Street Journal ($). He is reflecting on how Silicon Valley Bank did not have a chief risk officer in place for eight months. The reason why classical liberals should focus on this aspect of the bank’s demise is because at the moment there are calls for yet more rules and regulations on banks. But the problem in my view is that there are plenty of rules, but they aren’t often enforced consistently, or intelligently. (Apologies to non-followers of NFL football, but I think you get the point of it.)
But Cohen adds this important caveat, which is another twist on the whole “moral hazard” argument that we hear about a lot when banks fail: “The existence of a chief risk officer created the appearance of proper oversight and satisfied regulators, but having someone to police risk meant the traders actually taking those risks might have felt they didn’t have to be so vigilant.”
Hmm. So in the end, having a CRO in place might, ironically, make a bank even more cocky because of the assumption that there is a person there to keep everyone on-point.
“Deposit insurance is a cancer at the heart of the capitalist system, destroying its ethical foundations. Rich depositors should not be able to secure returns, in the good times, for investing in fundamentally riskbearing activities (which fractional reserve deposits are, by their nature) but then be bailed out by the government when times are tougher. And banks are the largest allocators of capital in the economy – so this fundamental injustice gets spread across the entire economic system.”
– Andrew Lilico, The Sunday Telegraph (£)
A problem in much of the West is that the large investors who have been bailed out, such as those who did so via Silicon Valley Bank, or Credit Suisse, etc, is that they tend to be politically quite powerful. A lot of the north Californian business class, for instance. And it tends to vote Democratic.
I like the following comments by Adrian Wooldridge, the journalist, writing in Bloomberg ($ paywall) a week ago:
The humanities at their best are also perfectly equipped to provide an education in something that has been sadly lacking in recent business history: human judgment. The notion of judgment might sound a bit vague — certainly compared with the profit and loss of the business balance sheet or the ones and zeros of the digital economy — but the difference between a successful leader and a mediocre one does not lie in the amount of information they possess. It lies in the very human ability to process a vast mass of ambiguous information — sales patterns, technological innovations, political threats — and then make a rapid decision under pressure. The importance of judgment is growing as the world becomes more uncertain and trade-offs become more pressing. Who knows? Perhaps this week’s financial turmoil could have been avoided if Greg Becker, the CEO of the just-shuttered Silicon Valley Bank, had studied the humanities at Indiana University instead of majoring in business.
A preference for deceptive certainties over fuzzy truths has arguably been the biggest problem for business in recent years. Businesspeople have grown incomparably rich since the 1980s by embracing the deceptive certainties of business theory while forgetting the great truths of political theory. They have embraced the cult of shareholder value (paying themselves like owners rather than employees) while also providing themselves with golden parachutes and exploiting every accounting trick in the book. But in so doing they have whipped up popular fury that is threatening to overturn business civilization (and will not be placated by a few bromides about diversity and sustainability).
They would have been wiser if they had studied classical political theory along with contemporary economics and business theory. Aristotle argued vigorously for the “golden mean” on the grounds that a prosperous middle class is necessary to long-term stability. Plato insisted that elites inevitably collapse if they give way to their own appetites rather than restraining themselves in the interest of the public good. Surely Plato+Aristotle is a better formula for understanding the state of modern America than any number of business theorists?
I’d like to quote the whole article but there is a copyright/subscription issue, and I am a free marketeer and respecter of property, after all.
Why does everything have to be justified on the basis that it will help the NHS? Especially when the NHS is failing its patients so badly? UK healthcare spending as a percentage of GDP now ranks fifth highest in the OECD, yet the system isn’t delivering even the most basic forms of care. Some 2.7 million people are sitting anxiously on the waiting list.
– Kate Andrews
Regular readers of this blog know that politically, the cause for liberty cuts through conventional categories. Over at Wired magazine, which in my view has tilted more Left in recent years and seems to have a lot of “green” material in it these days, it occasionally comes up with an article that is worth reading.
Here’s one on the use of AI technology to track alleged welfare cheats in Denmark. Denmark is one of those supposedly happy, social democratic, tax-and-spend places that the dimmer sort Western politicians, such as US Democrats, like to wax lyrical over. Well, take a look at this:
Denmark isn’t alone in turning to algorithms amid political pressure to crack down on welfare fraud. France adopted the technology in 2010, the Netherlands in 2013, Ireland in 2016, Spain in 2018, Poland in 2021, and Italy in 2022. But it’s the Netherlands that has provided the clearest warning against technological overreach. In 2021, a childcare benefits scandal, in which 20,000 families were wrongly accused of fraud, led to the resignation of the entire Dutch government. It came after officials interpreted small errors, such as a missing signature, as evidence of fraud, and forced welfare recipients to pay back thousands of euros they’d received as benefits payments.
The idea of creative destruction in capitalism is frequently bandied around, particularly among techies, but rarely is it ever allowed to work its magic in today’s world, where seemingly everyone is looking for a handout, from the biggest auto companies to the tiny little community coffee bar at the end of the street, and from the wealthiest financier to the poorest welfare claimant.
– Jeremy Warner, Daily Telegraph (£). The title of his article, which is about the federal government protection of depositors in Silicon Valley Bank, is “Capitalism is dead unless institutions that take bad bets are allowed to fail, nobody ever learns the lessons”.
But we shouldn’t be surprised by these occasional eruptions. First, banking is a confidence game. We’ve decided as a species that it’s safer to keep our money in a bank rather than say, at home, in our mattresses. Maybe it’s the confidence inspired by the marble bank façade, or the huge, 10-foot-thick steel door to the vault over in the corner. But here’s the fallacy in that logic: in our fractional banking system, one in which banks are only required to hold a fraction of their deposits as reserves, the money—our money—that we think is safe and secure is not even at the bank. And whether it is safe and secure is a matter of a myriad of factors that a depositor has nothing to do with, and no control over.
“In other words, in our fractional banking system, the mirage of safety and security is a clever and extremely persuasive narrative created to get us all to put our money in a bank thinking that a bank is the safest place to put our money. Even the banks that we perceived to be the most august—Lehman Brothers, Merrill Lynch, Bear Stearns—turned out to be elaborate and highly sophisticated houses of cards.
– William D Cohan, a writer at the “Puck” collection of columnists on various financial matters. (It is behind a registration wall, and free for seven days.)
I was going to put this into a comment on Patrick Crozier’s excellent item about Gary Lineker, the UK former footballer, and now TV show presenter (and enthusiastic Tweeter). But as the comment was chunky I am taking the liberty of putting it here.
On social media I come across the argument that Lineker hosts a sports programme, not a current affairs show about politics, so he’s not causing a problem by taking heated positions on a private twitter account. There are several problems with this line of reasoning.
Football these days is, alas, political. Maybe it always has been – even George Orwell disliked international games because he thought it stoked rather than reduced national ill feeling. Today, footballers have “taken the knee” over the Black Lives Matter eruptions, for example, or spoken about the Qatar World Cup and the row about maltreatment of stadium construction workers. There is a new UK government regulator of football (dealing with issues such as the finances of the game), and that is bound to be a political issue that a pundit like Lineker will want to talk about. Four years after Russia annexed Crimea, Lineker and the rest were in Russia to commentate on the World Cup of 2018. The footballing body, FIFA, was the centre of a massive corruption scandal. Brexit affected European football, such as because of the UK’s exit from the Single Market and the consequent impact on free movement and labour market contracts. And so on.
Why mention all this? Because it will not do for Lineker to say his role has nothing to do with politics so it’s okay to slag off the UK government or whatever on A or B, particularly in harsh language. That is why his principal, if not sole employer – the BBC – is entitled to ask him to tone it down on social media, or at least issue some small disclaimer along the lines “my views aren’t necessarily shared by the BBC” sort. The BBC is paid for by a tax known as the licence fee. In its charter, it has to uphold impartiality as part of the bargain, although in reality this is very hard to achieve consistently (which is why I think the fee needs to go).
For those who aren’t in such a role, or who have an independent income, they are freer to upset, provoke and delight anyone with equal measure. (This is also a reason why protecting savings from inflation is good precisely because it makes independent sources of income easier.)
But where a certain stance comes with the day job, then a contract of employment/service is entitled to contain some form of words about certain pronouncements. For Lineker, unfortunately, the “beautiful game” is no longer just about men (now women) kicking a bag of air around.
Final point: It is not as if Lineker, in condemning UK policy on illegal migrants, was adopting a particularly brave or original stance. His views are standard “liberal” boilerplate. I cannot imagine Lineker saying “Net Zero is BS”, or “All Lives Matter” or “Brussels is out of control” or “gender is not a social construct”.
Go on Gary, prove me wrong.
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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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