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.
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Spectator politics correspondent Fraser Nelson spots that Gordon “off balance sheet” Brown, as I will now continue to call this shit of a national leader, has devised an accounting wheeze to remove the tens of billions of public debt involved in the Northern Rock bailout from the public accounts. As a result, Brown can claim that the UK public finances are fine, nothing to look at here, please move along.
As Mr Nelson points out, Brown engages in practices that politicians are only too keen to condemn when applied by banks. But at least banks, if they try to remove certain default risks off their balance sheets, use forms of tradable insurance policies known as credit default swaps. I’d be interested to know how exactly Brown & Co. intend to hedge out the risk that Northern Rock does not return to any form of profit. This disconnect between the talk of prudence on the one hand and financial trickery on the other will, I hope, be the undoing of this overrated bullshitter from north of the border. Brown is damaging the age-old Scottish reputation for plain dealing. No wonder so many Scots want to cut loose from the UK. I don’t blame them.
One of the hardest things for a libertarian to do at the moment is to maintain any kind of optimism or sense of confidence that his or her ideas will catch on. The danger is that if one sinks into despair, then that despair will come across as a form of defeatism, which turns into a sort of self-fulfilling prophecy. If I have a criticism of one of the head honchos of the UK-based Libertarian Alliance, Sean Gabb, is that he used to wallow so much in this sort of “we are all doomed” schtick that I almost imagined, that in a perverse kind of way, that he was secretly rather enjoying it and that it was all a bit tongue in cheek. Funnily enough, at last year’s annual LA conference in London – the next one is held this weekend – I sensed that Mr Gabb had cheered up a bit. Even so, reasons for to be grim about civil liberties issues remain but sometimes I think that momentum might be slowly changing at the level of public debate. Increasingly, if the government comes out with some new measure, it is geeted with a sort of wearied resignation or outright derision; enthusiasm for such measures are few, or supported by obvious toadies and fools.
Take this story in the Daily Telegraph today. The outgoing Director of Public Prosecutions, no less, talks about the UK embracing the politics of fear:
Outgoing Director of Public Prosecutions Sir Ken Macdonald warned that the expansion of technology by the state into everyday life could create a world future generations “can’t bear”.
Maybe they will not just bear it, but do something about it.
In his wide-ranging speech, Sir Ken appeared to condemn a series of key Government policies, attacking terrorism proposals – including 42 day detention – identity card plans and the “paraphernalia of paranoia”.
Paraphernalia of paranoia – that is a nice turn of phrase.
Now that banks are being forced back to their traditional model of being dull institutions, those chasers after excitement who have been shown the door might like to consider some career options. I rather like Matthew Lynn’s list of suggested new ideas.
On a serious note, it is one thing to embrace risk-taking as a virtue of entrepreneurship, so long as the persons taking the risks carry responsibility for the bust. The problem with the investment banks, such as now-defunct Lehman Brothers and Bear Stearns, is that seldom happens. If the “Masters of the Universe” really do crave the high-wire, much better that they do so with money not given to them by the taxpayer.
On a separate but related point about state ownership of banks, one issue that has not yet been much discussed is that of political and business corruption. Under “public” ownership, what will count will be what Ayn Rand called “the politics of pull”: the ability of governments to put their toadies onto bank boards to ensure that favoured groups get their loans and other benefits, while enriching those with the right connections. We saw that in countries like France, state-controlled banks such as Credit Lyonnais became engines of corruption on a huge scale. If ever there was an issue for enterprising journalists to go after, it is this one. They may probably do so once they have become bored describing Gordon “off balance sheet” Brown as some sort of economic superman.
You might think that with all the worries about recession, bank failures and so on, that political leaders might want to avoid making ever greater commitments on public spending. Not so. Just to remind us about the kinds of concerns that animate the political classes, here is this story:
Everyone who buys a mobile telephone will be forced to register their identity on a national database under government plans to extend massively the powers of state surveillance.
Phone buyers would have to present a passport or other official form of identification at the point of purchase. Privacy campaigners fear it marks the latest government move to create a surveillance society.
It is hardly a fear. It is a reality.
A compulsory national register for the owners of all 72m mobile phones in Britain would be part of a much bigger database to combat terrorism and crime. Whitehall officials have raised the idea of a register containing the names and addresses of everyone who buys a phone in recent talks with Vodafone and other telephone companies, insiders say.
It is important to remember that even supposedly private sector firms such as Vodafone can easily find it next-to-impossible not to co-operate with governments on stuff like this, particularly if the government can threaten to cut off licences.
The move is targeted at monitoring the owners of Britain’s estimated 40m prepaid mobile phones. They can be purchased with cash by customers who do not wish to give their names, addresses or credit card details.
So let’s assume that the government has data on the 40 million-plus people who buy a pre-paid phone. Even leaving aside the moral objections to such a database, the practical issue of how on earth one can sift through the haystack of millions of such details for the possible pin of a terrorist plot does not seem to register.
But then again, one must remember that the database state is not really about terrorism. It is a beast that is now acquiring a life of its own. After all, thousands of jobs, millions of profits, are tied up with this. If the Tories really do stick to their pledge to shut this thing down – and I would not want to bet my house on it – it is going to put a lot of “consultants” out of a job. A certain grim satisfaction would be involved in that. My wife, who is a consultant, refuses to work on any such things, god love her.
It is funny how films that you put down on the “must get around to seeing it sometime” list never get seen. Well, I have wanted to watch that 1970 epic, Waterloo, for a while and watched it during a quiet Saturday afternoon. Several things struck me about it, not least the fact that the cast was drawn from the Soviet Union (the Red Army?). I think I remember reading somewhere that the Soviet forces were used as cast extras in quite a lot of films, including a Russian film version of War and Peace. Rod Steiger’s portrayal of Bonaparte has not, in my view, ever been bettered. What a great actor Steiger was. Mad eyes.
I wonder if anyone who drives past the rolling wheatfields of Belgium in which the battle was fought ever wonder about the sheer carnage that was caused on that damp June day in 1815, or reflect that, nearly 200 years later, Bonaparte’s dream of a pan-European empire has in some ways come to pass, albeit without the nifty French cavalry uniforms.
Andrew Roberts’ fine account of both Napoleon and his nemesis, Wellington, is certainly worth a read.
…They would make Guido Fawkes an advisor on how to fight the next election. Of course Guido (aka Paul Staines), whom I know and like, prefers, as I and many other bloggers do, to give party politics a wide berth in professional terms. He is far more effective doing what he is doing now and obviously has a great time doing it. But as his example shows, the guy has more sense on how the Tories should go after the absurd notion of Gordon ‘off-balance-sheet’ Brown than any number of folk working in Tory HQ.
Think about it: the Tories should put up posters with the Brown comment on “no return to boom and bust” over, and over, and over. That this man, who has presided over deteriorating public finances during a relatively strong period of growth, sold our gold reserves at a fraction of their current value, raided pension funds and shafted taxpayers should be able to pose as some sort of economic Winston Churchill is a joke.
Jesse Walker at Reason magazine points out something very inconvenient for Naomi Klein, whom I discussed recently at this blog:
Let’s just zero in on the contrast Klein draws between utopian theories and real-world practice. It’s a fair argument if you apply it properly: that is, if you look at the consequences of Friedman’s policy prescriptions where they are put in place. It makes sense, for example, to look at how Friedman’s ideas about denationalization and free trade fared in Chile after they were put into effect. It doesn’t make much sense to look at Blackwater’s contracts in occupied Iraq, because — try as Klein might to pretend otherwise — they don’t have anything to do with Friedman. (And of course, it’s important to examine the ways Pinochet’s Chile deviated from Friedman’s economic ideas as well as the ways it embraced them.)
Exactly.
At the same time, you have to consider how Friedmanism fared everywhere some portion of it was applied, not just cherry-pick the most unappealing regimes that experimented with it. If the only place that adopted any of Friedman’s economic ideas was Chile, then Klein might be onto something when she suggests there’s a connection between libertarian economic policies and deeply un-libertarian ideas about torture, censorship, surveillance, and state-sanctioned murder. But the most sweeping free-market reforms of the last 40 years were not adopted in Pinochet’s Chile, Thatcher’s UK, or anyplace else addressed in Klein’s book. They were enacted by the New Zealand Labour Party in the 1980s. Far from fusing economic liberalization with political repression, the Labour government expanded civil liberties: It adopted a bill of rights, decriminalized homosexuality, improved the treatment of the native Maori. And while Pinochet signed on to the CIA’s war against the Latin American left, New Zealand strained its relations with Washington by making itself a nuclear-free zone, a policy that effectively barred the U.S. Navy from New Zealand ports. By Klein’s logic, these are all effects of Friedmanomics.
One would not expect Ms Klein to respond to this other than with smears. It turns out that she more or less ignored the devastating review of her book by Johan Norberg at CATO recently, did not address his very serious accusations of widespread inaccuracy or misrepesentation. To repeat: it is not just her views that are a problem – I am sure some leftists argue in good faith – but her actual, repeated lying, fabrications and errors that are so easily corrected and yet she cannot be bothered to do so. That is one reason why I loathe so much of this sort of writer. It is a sort of contemptuous attitude towards simple fact-checking that I cannot abide. So Friedman did not support the Iraq war after all? Well, whatever, he might as well have done, seems to be her attitude.
The point that Jesse Walker makes about the varied effects of free market ideas is important. Yes, some repressive regimes around the world may have found it convenient, for whatever reason, to claim they had signed on to the package, as Chile did. But then remember that even former London mayor Ken “friend of Hugo Chavez” Livingstone once argued that he had borrowed the idea of road-charging from the great Chicago professor. In different times, very different types of political leader, such as Richard Nixon, claimed to be Keynesians, just as, right now, a lot of people are scurrying to claim to be in favour of tougher regulations (see Guy Herbert’s comment immediately below this one).
Klein tries to draw an equivalence, in a muddied way, between those leftists who deny that Marx can be blamed for the horrors done in his name and those of us who point out it is absurd to try to blame free market thinkers from what is happening now. Well the reason, Ms Klein, why Friedman et al cannot be so blamed is that what is happening now is not an example of laissez faire capitalism. Re-read that slowly, Ms Klein: what is happening now is not a case of laissez faire. Just to spell it out for those who have not been following this debate: the central banks responsible for setting interest rates are state bodies; the US home loan agencies such as Freddie Mac that underwrote risky mortages are ultimately state bodies; the legislation forcing banks to lend to risky groups is state activity; the Basel and other bank capital rules that have arguably encouraged the irresponsible use of credit derivatives are state rules, and so on. With the exception of Lehman Brothers and some of the Icelandic banks, not a single large financial institution has been allowed to go bust, as a private company would in a free market. Not one.
Thanks to the eagle-eyed Samizdata commentariat (Ian B), I read this article by Dominic Lawson, son of the former Chancellor of the Exchequer, Nigel Lawson. Lawson Jnr argues that the much-mocked notion of gold-backed currencies, which finally fell out of favour in the early 1970s during the Presidency of that economic ignoramus, Richard Nixon, is due for a comeback. He gives a rather quaint example of what is happening in Lewes, Sussex.
As an admirer of the writings of the Austrian economics school, I have a great deal of sympathy with this argument, although I do not think that gold per se needs to be the anchor of a currency. Given the vast gyrations in the price of gold in recent years, I do not see it as a very practical option for many, if not some, countries. What I do think, however, is that the idea that we can go on regarding money as a sort of metaphysical abstraction to be manipulated at will by Godlike central bankers needs serious reappraisal.
But remember that in times of massive stress – and inflation – gold, like silver and other relatively scarce substances of universally-recognised value, can win new friends. I will be keeping an eye out for stories of such “parallel currencies” in the next few weeks and months. If readers have examples, let me know. Surely this is an area for an enterprising economics PhD student to work on. Why not?
In the meantime, I see that Gordon Brown is now regarded as “statesmanlike” by spending gigantic sums of other folks’ money. I’d be more impressed if he came out and urged a big reduction in UK public spending. He’s also probably got some beachfront property in Arizona he wants to sell………..
“In addition, one should not minimize the great economic achievements of the past 25 years in the form of rapid growth in world GDP, low world inflation, and low unemployment in most countries. Perhaps these achievements will be overshadowed by a deep world recession, but that remains to be seen. If the impact of this financial crisis on the real economy is not both very severe and very prolonged, and time will answer that question, the combination of the past 21/2 decades of remarkable achievement, and the economic turbulence that followed, may still look good when placed in full historical perspective.”
– Gary Becker.
Like Professor Becker, I think fears of a repeat of a 1930s-style depression are unwarranted. What is a serious concern in my mind is the likely explosion of poorly thought-out regulation by politicians who seem to have forgotten how it was often such regulations, as well as lax monetary policy, that is at the crux of the current turmoil.
This, by Charles Spencer in the latest Spectator, made me smile:
“This is a time for making the most of small mercies. One of the greatest of these, as the financial system collapses around us, is the splendid joke that is Robert Peston of the BBC. His extraordinarily camp, over-emphatic delivery would be perfect for reporting glitzy Broadway first nights but seems hilariously at odds with worldwide economic catastrophe. Peston has all the glee of the callow cub reporter rejoicing in the size of his scoop while lacking the imagination to understand the anxiety his excitable tales of doom-and-gloom might be causing others.”
I admire the scoop-getting skills of Mr Peston, if not always his analytical skills. Anyway, as Mr Spencer continues:
“Like poor Mr and Mrs Spencer of Claygate, Surrey, for instance, who somehow managed to commit themselves to £40,000 worth of home improvements (double glazing and a new kitchen) just before the current crisis went big time. As I do my lengths at the swimming pool, I sometimes experience a knot of fear forming in my guts. Mercifully, thinking of Peston, an egregious character both Jane Austen and P.G. Wodehouse would have been proud to have invented, makes me laugh and my panic disperses.”
On a nicer note to Robert Peston, however, he has put economics at the top of the BBC news agenda in a way that would have been unthinkable a decade ago. Part of this is down to simple events, but part of it is due to Peston’s skills in ferreting out the news, not to mention his status as a friendly journalist to NuLab. Whether this continues if the current bunch get kicked out of Westminster is a moot point.
It has been a memorable weekend for yours truly, nearly all for very nice reasons. Over the past few days, the weather in much of the UK – after a truly crap summer – has been glorious. There are few things to beat than walking along in a leafy park, with the autumn season turning the leaves into golds and reds, then sitting on the side of a river, cold beer in hand, in the company of close friends. I did all that in Cambridge over the weekend. The credit crunch and the worries of the financial world seemed, if only for a few hours, very far away. But then when walking with a friend around the Quad of Pembroke College, I felt as if I could have been in another century.
But perhaps I should have been prepared for a surreal weekend when I opened my mail on Saturday morning. First off, I got a letter from those admirable folk at the NO2ID campaign urging me to help contribute some money. I have already paid over a cheque and was happy to send another (please follow my example). And then I opened another, very different letter, from the UK Department Of Health. The DoH has something called a “Biobank”. This is a government-run research project designed to track the health of a cohort of the UK population aged between 40 and 69. As I and my wife are both in our early 40s, we are obviously in the cohort. I was informed that a “provisional appointment” had already been made on my behalf and that I nevertheless had the option to refuse. I have refused. While checking the health of certain people and attempting to judge their vulnerability to certain diseases or conditions can be a worthwhile thing for say, a private insurer to do, I had no desire to go along with a government programme. The reason is not simply that it would involve acquiring yet more intimate health details on myself, but recent embarrassing losses of government data give me no confidence that such details will not be lost. Also, one has to ask to what purpose will the “Biobank’s” findings be put? Presumably, to help drive government policy to cajole, encourage or indeed coerce UK citizens to change their personal habits. I consider that taking part in such a campaign would involve my giving my sanction to such things.
Well, at least I had the option to refuse to take part in this project, which is something. But one wonders how long such indulgence might last. Sooner or later, the DoH might consider it necessary to make involvement in such surveys compulsory.
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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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