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 see the UK Chancellor, Alistair Darling, is making the point in the House of Commons that the financial crisis will not deflect the government from bringing about a low-carbon economy, despite the fact that such a change, by definition, will be costly. I am watching his statement in the House right now. He has also referred to the current economic climate as if it were an outbreak of a virus or a meteorite impact from outer space.
There is a risk that these people are sincere about all this. That, in fact, is the danger: not that such folk are liars and charlatans, but that they actually mean it.
The biographer of JM Keynes, Robert Skidelsky, writing in the Independent newspaper over the weekend, ponders what his economics hero might have done in the current environment. Not surprisingly, perhaps, Skidelsky argues that the economist would have advocated stimulating aggregate demand in some way, either through tax cuts, interest rate reductions or a combination of the two.
In the course of the article, he has a swipe at the “Austrian” school of free market economists who argued that Keynesian economics was – and is – quackery:
“However, his clinching argument in his 1930s debates with free market economists such as Friedrich Hayek was political. It was much too risky to allow economies to slide into deep depression. The example of Hitler was vivid in the minds of all democratic politicians. In 1928, at the height of Weimar Germany’s prosperity, the Nazis got 2 per cent of the vote. By 1930 they were up to 18 per cent. In 1933 Hitler was in power.”
The trouble with this argument is that when supposedly Keynesian stimulii were applied to economies in say, 1930s America, they did not work. Fact. As I pointed out here with reference to US official statistics, unemployment never fell much below the average levels for that decade until the outbreak of the Second World War. Paul Marks has also pointed out how FDR’s achievements were largely mythical, if not in fact the opposite. This woman has argued in a recent book that FDR’s policies made the situation worse. In the UK, the supposedly more fuddy-duddy governments of Baldwin and Chamberlain arguably presided over a less serious outcome by not adopting such “New Deal” policies. Meanwhile, in Japan during the 1990s and part of the ‘Noughties, a number of stimulus packages failed to revive the world’s second largest economy.
Now Mr Skidelsky presumably must be familiar with these statistics, and yet he argues that the reflationary policies of his hero, even though they have not been borne out by historical evidence, were somehow capitalism’s best defence against political fanaticism. He may be making the case that governments have to be seen to be “doing something”, even if it does not work much, to avoid the charge of callous neglect. But if policies don’t work, how is this supposed to calm political agitation? The German example is instructive: I would at the very least have thought that the destruction of the German middle class via the hyper-inflation of the 1920s was a major part of why Germany was so easily tipped over into extremism when economic problems hit home. And that reflation was caused by government, not the private sector. I also think that Skidelsky underestimates the extent to which people do, at a gut level, understand that the governments in power in the West bear some, if not all, responsibility for the present mess.
Meanwhile, I see the UK Labour government is going to take Britain down the wrong side of the Laffer curve by making tax hikes on “the rich” – including entrepreneurs and other wealth creators – a campaign pledge. And this despite evidence, which the government must surely realise, that higher marginal tax rates are destructive of revenues. Update: Fraser Nelson has a splendid, bullet-point take-down of Gordon Brown’s bare-faced lies on the economy and his supposed role in leading us to sunnier climes. It cannot be said too often what a complete shit the UK premier is.
“There is no art which one government sooner learns of another, than that of draining money from the pockets of the people.”
– The Wisdom of Adam Smith, page 194.
Glenn Reynolds has an interesting article at Forbes about the connection between wars and the expansion in state power. He argues – quite convincingly I think – that while war may once have been one of the primary causes of increases in state power, that increasingly, it is demand for other public goods and initiatives that drives state power. For example, I reckon that the environmentalist argument is likely to prove a significant justification for such increases in spending, tax and regulation, as will, alas, the current financial crisis.
The “war is the health of the state” argument is often one that some libertarians use to oppose any wars, even if such wars might have some legal/moral justification, on the grounds that wars inevitably create costs that outweigh the supposed benefits of toppling some nasty regime, etc. An example of this view comes from Robert Higgs, whom I recommend. But the WIHOS argument is not a fixed law, rather a general tendency with some clear exceptions. At the end of the Napoleonic Wars, for example, the UK public sector, such as it was, was retrenched and the income tax was abolished for more than two decades. The end of the Cold War saw significant cuts in military spending. Perhaps what is not so easily retrenched, however, are state controls and regulations over behaviour. Consider World War One. Before 1914, UK subjects did not need a passport; there was no Official Secrets Act and the role of the state, relative to that of our own time, was small. Now it is much larger.
WIHOS is not an iron law, but rather a sensible rule of thumb. Alas, there are plenty of other factors besides war that drive expansion of public spending and controls.
There is a good article by Bloomberg columnist Mark Gilbert on why just transferring billions of taxpayers’ money to America’s embattled automakers is a bad idea, and he has thoughts who might be better equipped to run these firms.
As he says, long before the credit crisis hit, some, if not all of the carmakers were suffering from problems. There is a glut of cars on the world market and the spike in oil prices – admittedly now in reverse – has made a number of such vehicles uneconomic.
Talking of oil, the black stuff is now below $50 a barrel, down by about $100 from its peak. Wow.
I came across this eye-popping collection of strange building pictures here. Some of them are quite familar to me, such as the Lloyds of London building, but others I have not seen before.
Thanks to Stephen Hicks for the link. His site is definitely worth a visit.
This fellow, meanwhile, also has regular nifty pictures on architecture, with a strong enthusiasm for the works of Frank Lloyd Wright.
I have written about this subject before as an urgent issue of security, and surely the topic of piracy must be at the top of countries’ security agendas now that a large oil tanker has been seized. It makes me wonder what insurers such as Lloyds of London must think: surely, if shipping fleets want to keep insurance premia down, an obvious solution must be to arm, or better protect, such vessels. I do not know what the law is about whether ships, operating in international waters, on carrying weapons on board merchant vessels. In centuries past, vessels of the East India Company, for instance, were frequently as well armed as many naval vessels. They had to be.
If this problem gets worse, then it is not just the navies of the western powers, such as those of Britain or the US, that might have to think about protecting shipping routes more aggressively. I think that the rising economic power of India must take on more responsibility to guarding some of the shipping lanes in the Indian Ocean. India, after all, is a prime beneficiary of globalisation and global trade. For that matter, China probably will have to think about protecting its shipping more effectively, as must jurisdictions which engage in much ship-borne trade such as Singapore and Australia and Brazil.
One of the reasons why a strictly isolationist foreign policy does not work is that in the real world, the web of global trading routes from which we all benefit have to be protected. Free market transactions must be protected against predators. That means things like naval bases or agreements between states to protect certain shipping routes, for example. If states cannot do this, but somehow expect merchant ships to continue conveying the goods which drive the world economy, pressure to let merchant ships carry weapons will be irresistable.
Some time ago, I read the Frederick Forsyth novel, The Afghan. I won’t give away the plot but piracy is a key part of it. Any security policy, including an anti-terrorist one, must take account of seaborne threats. It might seem rather obvious to point this out in an island nation like the UK, but a large proportion of our economic produce is conveyed over the wet stuff. If the anti-terror experts have not addressed themselves fully to this issue, they had better start doing so. Maybe this hijacking might have a galvanising effect.
Here is what the US navy has been doing.
Timothy has an absolute blinder of an article here. The next time you read of some liberal – in the American usage of the word liberal – attack one of their opponents as a “hick”, or “redneck”, or whatnot, consider his words.
Read the whole thing.
Last night I was lucky enough to get invited to a smart awards ceremony in London marking achievements in the world of luxury goods and services. There were folk from various brands and companies such as Chanel, Aston Martin, and the like. Lots of nice expensive champagne, dishy women and impeccably dressed chaps. At the end of the event, an award was given to a certain Vivienne Westwood, one of Britain’s most famous fashion designers. She started her career back in the 1970s in the world of punk, associating with Malcolm McClaren, who went on to manage the Sex Pistols, before moving on to other fields. To describe Ms Westwood as a gloriously bohemian figure is an understatement: she wore this amazing red dress, had bright orange hair and her face was painted a sort of white to create the impression of an eccentric 18th Century party-goer in the court of Versailles.
I was struck by two things. On the one hand, Ms Westwood is a great entrepreneur. She has a fashion business empire that stretches around the world, employing loads of people, creating jobs and income, not to mention fashions, for thousands of people. My wife adores some of her stuff. She has been heaped with honours and is the toast of Milan, Paris, London and New York.
And yet as soon as she opened her mouth in the ceremony last night, we were treated to meandering monologue about how how “Britain has far less culture than France”; how cheap labour is the evil that causes wars, how mankind is threatened with extinction in a few year’s time; how the French were great because they had central planning back in the 17th Century to create a fashion industry, how she was soooooo glad that Obama was in the White House…..on and on it went, bringing together in one speech an amazingly concentrated collection of fatuity.
It keeps amazing me how people in business, even tremendously successful businesspeople, can hold views that would make any sixth-form pupil cringe with embarrassment. But part of me loves the free market precisely because even an eccentric like Ms Westwood, while decrying global capitalism, can make a mint out of it by selling people stuff that they want. Just don’t ever take her views on world affairs seriously.
Oh well, at least she is more fun to watch that Polly Toynbee and like I said, she has created a great business.
“In the anointed we find a whole class of supposedly “thinking people” who do remarkably little thinking about substance and a great deal of verbal expression. In order that this relatively small group of people can believe themselves wiser and nobler than the common herd, we have adopted policies which impose heavy costs on millions of other human beings, not only in taxes but also in lost jobs, social disintegration, and a loss of personal safety. Seldom have so few cost so much to so many.”
Thomas Sowell, the Vision of The Anointed, page 260.
His analysis applies – with the odd exception – to the political/intellectual elites responsible for the expansion of government for the past 100 years or so.
Via the wonderful Boing Boing site, I came across this rather, ahem, interesting luggage. And the website is French. Quite what the airport security people will make of this is anyone’s guess. I suspect that many airports will not see the joke.
I like gadgets like the best of them but for the life of me, what is the US government doing creating flying cars? I cannot quite see this as a priority item in defeating Islamic terror, somehow.
That’s not to say I do not want a flying car, of course.
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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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