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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“It might be exhausting just trying to keep up with Musk and he will get plenty wrong. And yet, all the criticism is hopelessly wide of the mark. Our political and economic culture sneers at and neglects men and women like him. But if Musk and his ilk ever chose to go on strike, like a seemingly endless number of workers in both the public and private sectors, the system could grind to a complete halt.”
– Matthew Lynn, Daily Telegraph. Lynn’s article (£) is spot on. Yes, Musk received public subsidies for Tesla and the SpaceX business gets deals from NASA, but the point is also that he has made, particularly in the spacefaring area, a tremendous go of massively reducing launch costs via the recoverability of the rockets. He did it when far more expensive ways of space flight failed to deliver. If he did nothing else, that puts him on my list of heroes.
The line about him ever going on strike makes me wonder if Lynn thinks of Musk as a sort of Ayn Rand hero. It’s almost uncanny. Of course, some people, including Musk himself, tend to think of him more as a bit of a Tony Stark.
Musk can be maddening to some, and vexatious even to his admirers. But overall, I am glad he is around.
“Flexible working is not a new phenomenon. It has been around for decades, with varying degrees of success depending on the companies and industries that have implemented it. You do not need to be a working-from-home (WFH) evangelist to realise that working patterns have changed in recent years. Certain jobs, such as lawyers or journalists, can tolerate a level of WFH without a noticeable impact on performance. However, it is important to note that prior to Covid, its uptake amongst businesses has been very limited. The only reason it is plaguing our economy now, is not because businesses and start-ups across the nation have realised the phenomenal improvement in productivity. Far from it. It is simply because government-directed WFH orders, subsidies, and now policies have created a false sense of normality as well as a false labour market. And it is doomed to fail, like many so many state interventions, created far away from business reality.”
– Andrew Barclay, businessman.
I was at a banking conference in Monaco (tough job, and someone has to do it) and this seemed to be the view of a lot of the folk present. Mind you, for a lot of my working life, my “office” is a table in a hotel business reception, airport lounge, cafe or my home. But I have done this for decades, and in my younger years (20-40) had the benefit of the cameraderie, mentorship and “culture” that comes with being in an office as part of a team. I follow a more “hybrid” approach these days, and it seems to work. (I actually think I work longer hours than when I was in an office.) I don’t see any reason for the State to intrude into this, either by penalising one form or working or encouraging it. A neutral approach is best. And what definitely should not happen is enshrining this or that way of working as a “right” beyond obvious constraints to protect life and health, both physical and mental. As ever (here comes the libertarian drum-roll sound), it is competition and vigorous enterprise that provides the best ways of people figuring out working patterns that suit them best, be they youngsters, middle-aged farts like me with or without children and dependents, etc etc.
“The Soviet Union was world-renowned for maths and science instruction but that failed to translate into a strong economy. Similarly, the UK has some of the top universities in the world yet has experienced stagnant growth for the last decade. Prosperity requires creating the right institutional environment for entrepreneurship, not dictating curriculums from the top.”
Matthew Lesh, Director of Public Policy and Communications, at the UK-based Institute of Economic Affairs, the UK think tank. (The quote is from an emailed press release I was sent today.) He responded to UK Prime Minister Rishi Sunak’s comments on the case for extending the teaching of maths and how far too many people think it is okay to be poor at the subject. (I used to be poor at maths, but certainly did not wear that as a silly badge of pride.)
Lesh’s point, however, is certainly worth focusing on. Being good at certain subjects and having knowledge about subjects is not the same as having a flourishing economy, particularly if one has oppressively high taxes, heavy regulations, spending on flashy projects such as HS2 that crowd out private investment, etc. At the margins, having a more maths-literate population might have a positive effect if, for example, more people can get their heads around statistics – and how they can be manipulated – and important concepts for business and finance such as compound interest, for example. Of course, in an age when the teaching of STEM subjects (Science, Technology, Engineering and Mathematics) gets more attention, this all fits.
Here is a paper from Stanford University about maths skills and economic growth.
I do worry that Mr Sunak, in his understandable and laudable desire to encourage teaching and better grasp of such subjects, can come across as assuming that this might be a sort of silver bullet to the UK’s economic woes. As the Lesh comment about Soviet Russia shows, having lots of maths whizzes in a country is no good if the underlying economics is poor. And by the way, a lot of those Russian maths aces, such as those of Jewish descent, emigrated to Israel as soon as they could, which explains, among other things, why Israel has been a STEM and start-up powerhouse.
On a final point, I remember some years ago (I cannot find the link, sorry) watching a televised talk by Michael Collins, the Apollo 11 and Gemini astronaut, given at MIT. He talked about teaching, and about why there needs to be another “E” in the STEM acronym: E for English. There’s no point in having all this knowledge if you are lousy at communicating it. He’s right. An example of how to communicate complex ideas brilliantly and clearly is that of Edward Chancellor in his recent book The Price of Time, where he writes about interest rates, and why manipulation of them is dangerous and a folly that goes back centuries. It is an outstanding case of clear exposition, fascinating facts and an enjoyable tone of voice.
“When was the last time an American president included Ireland in their vocal – and justified – criticism of Europe for slacking on its commitments? The fact is, with so many American voters claiming Irish heritage, Ireland gets a free pass, something it shamelessly exploits.”
– Richard Kemp, Daily Telegraph (£).
I wonder if Ireland’s fairly low-key approach is a hangover from when, during WW2, it was neutral, presumably out of a reflexive hatred for the UK rather than some deep love of the other side. In the case of another country that gets praise here occasionally – Switzerland – it was also neutral, although the Swiss probably, for military reasons, feared with some justification that if it sided with the UK, it would have been rapidly invaded by its German neighbour. These days, the Swiss have imposed sanctions on Russia, along with the UK, EU and the US, so its own neutrality is fading. And Ireland, as an EU member state, has of course imposed the same sanctions, for what that’s worth. It is not a NATO member – something that might come as a surprise to some people.
There’s a wider issue for those of a free market and economics point of view here. Ireland could be accused, perhaps rightly, of being a “free rider” on other countries that are able and willing to spend serious money on defence. This “free rider problem” is a subject that comes up in economics and public policy, and used to justify, for example, compulsory public spending on things such as highways, education and defence because it is uneconomic and inefficient to charge individuals for the benefits of said, and yet there will always be those who benefit but have no incentive for pay up. Is this behaviour by Ireland a “free rider” issue, and if so, what if anything can be done about it?
Separately, Ireland has for a long time had one of the lowest rates of corporate taxation in the world. President Joe Biden, who likes to flaunt his Irish roots (as many US presidents, in their rather tiresome way, do) has been an advocate of a global pact through which major countries adhere to a minimum tax rate of 15 per cent, and who knows, that might go higher. This counts as a tax cartel, and a country such as Ireland (an EU member state, remember) loses out from that, as do other small EU states such as Malta and Luxembourg. Ireland boomed in the late 80s, and through the 90s, in part because of its low-tax charms. These angered the policymakers of Brussels, who perhaps rightly saw this as a challenge to their desire to create a more high-tax/high-spend regime across the EU. So Ireland can at times be annoying for the right reasons.
What this all comes down to is that Ireland has, in different ways, chosen to stand apart. For all that it might be annoying that Ireland doesn’t supposedly do more on defence (it has a big coastline and requires safe shipping lanes), there’s been a sort of independence of mindset about Ireland that I quite like. (And as a coda to all this, lots of Irishmen, during WW2, defied their country and fought during WW2 against the Nazis, to their everlasting honour.)
“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
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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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