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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Blimey, those Atlas Shrugged themes keep on coming. Glenn Reynolds has a collection of reader thoughts about how, assuming Obama or for that matter, McCain wins, entrepreneurial vigour will be hit by any rise in taxes, particularly things like capital gains tax. Obama wants to raise CGT, which would be damaging to the US equity market, hence pension savings, not to mention curb new business formation. Way to go, Barack! Even so, the idea of entrepreneurs consciously choosing to cut back on any business plans while they sit out the first year or two of a leftist presidency is striking. Small businessmen and women are not getting much attention from politcians right now. No surprise: small businesses are disruptive; they tend not to be much interested in screwing subsidies or other benefits out of the state and are consequently not widely chased for campaign contributions. For sure, now and again a politician might talk about “helping small businesses” but there is a sort of going-through-the-motions aspect to it which means the pols do not really care that much. Just ask Joe The Plumber.
It is easy, in the current fears about the state of the world economy and what might be in store, to lose sight of what has actually been achieved in recent years. Fuelled by a mixture of education, supply-side tax cuts, a benign regulatory climate and the emergence of computers, small businesses in California’s Silicon Valley and other parts of the world have driven much of the growth seen in the past 20-plus years. Sure, big businesses get on the front page of Time or The Economist, but the small, or not-even-yet-started firms are the ones that matter. If the “animal spirits” of entrepreneurs are held back, we are all in a lot of trouble.
Anway, unlike some people who seem to want to torture themselves by sitting up all night to watch the elections, I shall be heading off to watch the latest James Bond film. Friends tell me it is not as good as the last one, with too much head-spinning action and not enough characterisation or jokes. But watching Daniel Craig blasting along in his Aston surely has to be better than watching Mr Magoo or The Community Organiser from Chicago. It is a shame Mr Fleming could not have written a novel where a bunch of crooked politicians wind up in a pool of sharks. Maybe that should be the next plot. Perhaps I’ll go ahead and write it.
Charles Moore, writing in the Daily Telegraph, urges Britons compelled to pay the outrageous tax, sorry, licence fee to the BBC should refuse to do so following the recent episode over two radio presenters who chose to mock an elderly actor about one of the presenters having had sex with the actor’s grand-daughter. I urge readers to read the Moore article. It is devastating and gets to the heart of why the Russell Brand/Jonathan Ross saga is not just a minor issue, but a brutal example of what is happening in the culture of the UK.
It is a lamentable fact about Britain that one of the things we are best known for these days is braying vulgarity, rudeness and cruelty, although certain issues, such as football hooliganism, seem to have become a bit less of a problem in recent years. For example, I tend to find US television far funnier, far sharper and yet also less cruel. Of course this is a generalisation – I am sure Samizdata readers living abroad can give me examples of cruelty-as-entertainment – but in the UK, it is becoming more and more the norm, not the exception. And the BBC, paid for by a tax, is at the heart of it. What is even more pathetic about the brutality of this culture is that its targets are not powerful dictators or scoundrels, since that might be dangerous. It is the sheer cowardice of these folk that appals.
As Sean Gabb has written, the BBC is part of the “enemy class”. As libertarians, we need to realise that privatising the odd bit of the state is not enough. The BBC, as part of the media class that is so interwoven with the political, corporatist class, must be destroyed, totally.
I must say that one of the few gratifying aspects of the current financial turmoil has been the way in which one of the UK’s biggest banks, Barclays, has decided to spurn any offers of help from the UK government – ie, the UK taxpayer – and raise funds from mostly private investors. In its recent raising of about $12 billion of funds to improve its capital position, Barclays made it clear that it wanted to stick with funding via the commercial market because, if it had drawn on the UK state moneys that have been provided for the likes of Lloyds TSB and Royal Bank of Scotland, it would lose its freedom to set pay, among other things.
Now, free market purists may object that the Middle Eastern funds that have pumped cash into Barclays are not entirely private sector organisation and of course they have a point. But the fact is that as a taxpayer, I haven’t been asked to write a checque to Barclays, in contrast to other UK banks. Barclays has also kept its affairs away from the hands of such characters as Alistair Darling, the UK finance minister. Those banks which have taken state aid face the risk that the confidentiality of their clients, especially in the wealth management area, could be compromised. Of course, even before 9/11, banks have been required to compromise on secrecy due to things like money laundering laws and the like. But there is no doubt that once a bank becomes an arm of the state, such erosions of client confidentiality that have already occurred will increase.
And the reaction of certain parts of the media has been interesting. On Friday evening, the BBC economics correspondent, Robert Peston, told us in that extraordinary voice of his how Barclays shareholders would be penalised by having to pay a higher amount to obtain funding than if they had, like good little corporatists, gone along to the UK Treasury. Peston, as a corporatist himself and creature of New Labour, cannot fathom why a bank wants to stay out of the public sector. Barclays’ executive bonuses may be “obscene” as far as Peston is concerned, but at least Barclays avoided some of the worst excesses of the credit boom. It is, as a result, relatively strong as a bank. Barclays must be thankful that it lost a merger battle to buy ABN Amro last year. If its refusal to eat from the state table annoys BBC journalists – who of course are paid out of a tax – then the bank must have done something very right. One cannot exactly say that of a lot of banks these days.
These pictures are pretty cleverly done. (Via Andy Ross).
Like a critical, if at times exasperated admirer of the novelist and philosopher Ayn Rand, I am interested to read books by people who are sharply critical of her work because it is a sign, as far as I can see, that she is starting to attract proper, scholarly attention. That is surely better than blind hatred or for that matter, Randroid hero-worship.
Hence I was quite intrigued when I came across the book, entitled “Ayn Rand Contra Human Nature.” Unfortunately, as this review of it at Amazon demonstrates, the author of the book mirrors a trait of the woman he criticises in one key respect: he writes in a state of furious anger and sarcasm, whiich rather undermines his own effort to take her arguments apart. Rand, for sure, was an angry writer – she had a lot to be angry about – but she was often guilty of abrupt dismissals of philosophers one might regard as giants or at least want to consider more gently: David Hume, for instance. And some of her judgements on aesthetic matters make me rub my eyes in amazement. For example, she regarded Beethoven as “malevolent”, which is a pretty bizarre comment on the creator of “Ode To Joy”, about as unmalevolent bit of music you can ever hear.
But the fact is that in my mind, much of what she stood for and argued about is as relevant and useful now as it was half a century ago. Her impact on driving a libertarian movement, even if she spurned the term, cannot be denied. On art, for example, I find a lot of her ideas very fruitful in explaining why I respond to some works of art and cannot abide some others. I like the way that she understood, for example, the appeal of so-called “bootleg romantic” culture such as pulp thrillers and popular action film heroes and heroines. I think she played an important role in invigorating the Aristotelian tradition in philosophy and has encouraged me to follow this up by reading writers such as Henry Veatch and these fellows. Meanwhile, I keep coming across references from people saying that the present credit crisis and the governments’ response to it is something out of Atlas Shrugged. So it clearly annoys leftists that she is still cited in this fashion. The fact that Rand is part of the current intellectual conversation is one reason why I am not quite as gloomy about the state of affairs in this world than I might otherwise have been. Let’s face it, had one of her former acolytes, Alan Greenspan, stuck to his early disdain for central banking before he became part of the system, we might not be in this mess today.
This blog looks pretty interesting for critical fans of Rand.
I must say I find all this global warming business to be jolly exciting.
William Rees-Mogg has a nice, rather wistful account of the days of when bank managers actually knew their clients, knew their economic circumstances and were not in the business of lending money to folk with little or no credit history. Mr Rees-Mogg is a devotee of the gold standard. However, in talking about the changing nature of banks and the quality of their staff, he does not touch on an issue which struck me the other day: limited liability.
Under limited liability laws and with central bankers acting as lenders of last resort, there is an element of moral hazard. Some free marketeers like Sean Gabb – whom I mention below – think limited liability laws are a statist curse on the capitalist system, since they would not arise without active state adjustments of corporate law. I am not sure about whether limited liability would exist in a world of pure laissez faire. It might, I guess. Also, not everyone buys the idea that LL is a distortion of the market or would not exist without state action.
However, there are still some nooks and crannies of the banking world where unlimited liability still exists and works successfully. The Swiss private bank Pictet, founded in 1805 in that memorable Napoleonic battle year of Austerlitz and Trafalgar, operates a partnership system where the bank partners face unlimited liability. As a result, Pictet operates a very conservative lending and investment policy. During the fat years of the ‘Noughties, Pictet may have seen some of its more aggressive competitors steal a march, but now the bank is attracting inflows from investors who appreciate the structure of the firm. At a time when Swiss banks have sometimes attracted bad headlines due to massive losses undertaken by over-confident people, the example of Pictet is an interesting contrast.
One of the reasons for slow output on this blog over the weekend was that several of your regular scribes, such as yours truly, Guy Herbert, Brian Micklethwait and Philip Chaston, were at the annual Libertarian Alliance (UK) conference in London. Several of us remarked on how many people turned up for the two days. By my reckoning, we had about 140 folk in total. What was particularly gratifying was the number of younger people in their early 20s whom I had never heard of before. Several of the newbies mentioned that they had come across the LA via the world of blogs. This is encouraging: there is nothing more dispiriting than to observe that the circle of folk who share similar views is static and getting greyer and more wrinkled. Suddenly, that appears to be changing.
There may have been several reasons why the LA conference proved so successful in terms of numbers. First of all, the speaker list was particularly strong: Aubrey de Grey, David Friedman and Hans-Herman Hoppe, to name just three. I thought Professor Friedman (son of Milton Friedman) was terrific when he spoke about how new technologies, such as nanotech, artificial intelligence and new forms of encryption, would throw up all manner of new legal issues. He is an irrepressible speaker and great value. Another reason for the high numbers at the conference is that I wonder whether the credit crunch has produced an unintended result by refocusing attention on the arguments about capitalism and financial markets. People want to know about what defenders of laissez faire think. Quite a few of the attendees were students furiously writing stuff down for assignments. The LA is getting used as a resource for academics.
I came home from the event yesterday feeling enthused and proud of how Tim Evans and Sean Gabb have driven the LA forward after the sad loss of Chris Tame, its founder, more than two years ago. He’d have been very proud, I have no doubt.
Occasionally, whenever one of us Samizdata scribes writes about events in the UK, such as loss of civil liberties, or the latest financial disasters perpetrated by the government, or crime, or whatnot, there is sometimes a comment from an expatriate writer, or US citizen in particular, suggesting that we moaners should pack our bags, cancel the mail and come on over to America. Like Brian Micklethwait of this parish, I occasionally find such comments a bit annoying; it is not as if the situation in Jefferson’s Republic is particularly great just now, although a lot depends on where you live (Texas is very different from say, Vermont or for that matter, Colorado).
But considering what might happen if Obama wins the White House and the Dems increase or retain their hold on Congress, I also wonder whether we might encounter the example of enterprising Americans coming to Britain, not the other way round. The dollar is rising against the pound, so any assets that are transferred from the US to Britain go further. Taxes are likely to rise quite a bit if The One gets in, although they are likely to rise in the UK too to pay for the enormous increase in public debt, even if the Tories win the next election in 2010.
Of course, this is an issue at the margins. If I were an American looking to get out of a left-tilting America, there are many other countries apart from Britain I would want to live in, not least because the weather here is generally lousy, you cannot defend yourself with deadly force, and the place is so crowded. Switzerland is likely to be popular for those who want to go to Europe; some East European states will be attractive. And there is the whole of Asia to consider, possibly even the better bits of Latin America. But do not be surprised to read of a steady exodus of Americans in the next few years, assuming Obama proves to be as bad as some reckon he is. We might hear the accents of the West Coast or New York on the London Underground and in the bars of the West End a bit more.
Update: Here’s more on the collapse of the pound. At this rate, New Yorkers will be heading to London to do their Christmas shopping. Seriously, this shows that markets believe Brown has so badly mortgaged the UK economy on debt that Labour will try to turn on the money printing presses. And we know where that leads.
Enough of terrible politicians. What people should really know is what to drink during social and business encounters. Over to you, John Tierney.
As I suggested yesterday on the immigration issue, a danger during harsh economic times is that political leaders play the nationalist card, not just on the immigration – or emigration issue – but also on the purchase of so-called national “champions” by foreigners. It was the protectionism of the early 1930s in America, copied by many other nations, that helped transform would have been a relatively short, if unpleasant, recession into a global slump.
It appears that Nicolas Sarkozy, French president, has learned very little about this episode. He wants France (ie, the benighted French taxpayer) to create a national fund to prevent French firms from being taken over. So if cash-rich Middle East, Asian or other businesses want to invest in say, an under-capitalised French firm, then Sarko would rather the French state owned it instead. Quite how this squares with the European Union’s single market rules is unclear. But then, ever since the credit crunch, whatever “free market” credentials the EU project ever had would appear to be totally dead.
There are times when, in one of my less admirable moments, I pray that certain politicians suffer a grisly end. It is not big of me, I know, but boy it is hard sometimes.
Over a year ago, when parts of the UK were inundated by floods, I remember the Spectator’s Rod Liddle moan that one reason why the water was running off the ground and into the rivers so much faster was because of all the additional immigrants crowding into the UK at the time. (Yes, really). It was a nonsense argument: much of the worst flooding was in places like Gloucestershire rather than in London, the former hardly being a hotbed of immigration. But hey, if you are in the business of defending zero-sum economics and the “lump of labour fallacy”, not to mention hold a general dislike of foreigners messing up the view, any stick will do.
It turns out that tens, maybe hundreds, of thousands of immigrants want to go back to their country of origin because of the changing economic landscape, and may do so. So Rod and his other worriers can sleep easy. Britain is now able to breathe free (sarcasm alert).
On a side-note, I’d add that with a recession now occuring, dislike of “foreigners” taking “our jobs” is going to become an even more toxic political issue, particularly where among the low-paid, arrivals from abroad do depress wage rates, if only in the short run. But then one should consider the shocking fact that during the boom years, immigrants were taking half of the new job vacancies in the UK, despite there being a large amount of unemployment among the indigenous population, a terrible indictment of the tax and welfare system’s destruction of work incentives.
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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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