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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Al Gore, call your office:
Forecasters are predicting a cold and windy Easter weekend, with snow, gales and heavy downpours in some regions. With snow expected to blanket the north, temperatures will drop as low as -8C in some areas, with particularly treacherous conditions possible over the Scottish mountains.
From the Independent newspaper, ironically one of the most vociferous advocates of the idea that the Earth is doomed from global warming, killer bees or whatever.
Of course, as Dale Amon said the other day, it makes sense to think how free marketeers should address the question of “what if man-made global warming really is a problem?” rather than just poke fun at it, as I am doing here. Dale is right, of course, just in the same way that advocates of civil liberties need to recognise that we face a terrorist threat and not, as one or two libertarians of my acquaintance can do, deny it. Changing ocean currents, caused by movements in the Arctic ice shelf, might, for example, explain why the Gulf Stream is not working its balmy magic on the British climate this time of year. But you can see how perplexing all this must be to people constantly harangued about the need to drastically cut down on carbon usage. The earth does not seem to be getting hotter, at least not around here. It is bloody cold, in fact. But then, my parents and grandparents will point out to me that Easters have often been terrible in the past; they can even remember it snowing in late April.
It was always a mistake to think that the demise of UK mortgage lender Northern Rock, entailing a massive bailout of the bank by the UK taxpayer, would be the only major example of a financial institution getting into dire trouble. Investors have woken up this morning to the news that JP Morgan, the blue-blooded US bank, has bought US bank Bear Stearns for less than a tenth of what Bear was worth, based on its share price, late on Friday. Wow. Bear Stearns, which has been building a fancy new European HQ in London’s Canary Wharf (that is a often a bad sign), was one of the earliest victims of the credit crunch. Two of its hedge funds were smashed last year by heavy losses linked to US mortgage-backed debt that has turned out to be worthless. The Fed has stepped into the JPMorgan/Bear Stearns deal with a £30 billion (don’t you just love these big round numbers?) funding facility. The dollar is in free-fall, which might be great for US exporters, not so marvellous for Germany, France or other countries. There is a whiff of panic in the air.
One of the more thoughtful, if sobering, analyses comes from The Times (of London) columnist William Rees-Mogg. He points out that once again, the late Milton Friedman has been proven correct: we have been through a period, since the 1990s, of rapid monetary growth. The inflationary impact of that growth had been temporarily masked in the High Street and the labour market by the deflationary effect of cheap goods from China and elsewhere. But for those who wanted to look hard enough, the warning signals were plenty: asset price bubbles in property, gold, antiques, fine wine, equities, as well as the frenzy of mergers and takeovers, much of which was funded by cheap debt, as well of course as the heavy lending to sub-prime borrowers in the US, Britain and elsewhere.
The trouble, however, is whether central banks have, or ever had, the weapons to control runaway lending. Consider this: for much of the 1990s and “Noughties”, Japan, the world’s second-largest economy, operated a zero-interest rate policy. Its official interest rate today is 0.5%. Let me repeat: 0.5%. As a result, speculators have borrowed vast amounts of money from Japan and reinvested the proceeds in places like Britain, where rates have been over 5%, or the US, or Switzerland, or Australia, New Zealand, and the euro zone. This is what is called the “carry trade”. These carry trades mean that to all intents and purposes, low-rate nations set the prevailing value of borrowing money.
Of course, old-style mercantilists might argue that this proves the need for exchange controls, capital controls and the like. I disagree, but I can understand the reactions. We live in a globalised market for money and credit, but without some sort of international “anchor” mechanism like the old gold standard, there is a dangerous vacumn in the system. Yes, I know all the arguments against tying currencies to gold (which is above $1,000 per ounce), but surely the finest minds of our economics profession need to figure out one of the key challenges of our time: how to ensure that the price of money is handled intelligently in today’s global market place.
Update: Megan McArdle has thoughts.
Recent large stories in Britain and the US keep the issue of whether prostitution should be legalised in the public eye. I think it should. The resignation this week of Eliot Spitzer, a US politician and former state prosecutor who quit after allegations about his use of prostitutes’ services – despite his prosecuting them in his day job – and the recent conviction of the British murderer of five Ipswich prostitutes, convince me we should legalise it. The benefits are many:
People like Eliot Spitzer and other vicious, corrupt state officials would have fewer ways of annoying the rest of us, which is unquestionably a public good. Pimps who control prostitutes, or who attempt to do so, would have fewer opportunities to prey on such women. The spread of sexually transmitted disease would be reduced, if not eliminated because a client could shop around to find brothels that enforce hygiene checks and advertised themselves accordingly. If he caught a STD, the client could sue the brothel, just like a client can now sue a pizza joint if he or she gets food poisoning. And finally, because if an adult woman or man wants to sell sexual favours, that is their business, and no-one else’s, period.
John Derbyshire, the UK-born commentator who writes for the right wing US publication National Review, has this comment, which reminds me of why I am not a conservative:
Prostitution, like drug trafficking, is one of those zones where libertarianism bumps up against the realities of human nature.
Wrong. Prostitution and drug trafficking, which are both illegal, demonstrate perfectly the libertarian argument that if you ban trades between consenting adults (children are another matter), then criminals and the plain reckless will provide them, damaging society as a whole.
To a lover of liberty, it is hard to see why a woman shouldn’t sell her favors if she wants to. Trouble is, weak or dimwitted women end up in near-slavery to unscrupulous men, and I think there’s a legitimate public interest in not letting that happen.
Oh come on. One might as well say that liberty is only for intelligent, smart people who write for right-wing Washington magazines. Of course, unintelligent, feeble-minded people screw up, but the case for liberty is that people are better off if they are presumed to be best able to judge their own interests. The fact that some cannot do this does not overturn that point. Encouraging personal responsibility is good for society as a whole (sorry to use such a collectivist expression) even if it is true that some individuals are not good at taking such responsibility.
The best private sector solution would be a guild system, like the geishas had in old Japan. There’d be entry standards for the guild. Women would have to pass exams, and have some entertainment skills other than the obvious ones. The guild would police itself, expelling miscreants. Freelancing outside the guild could be under strong social disapproval, even made illegal.
He is talking about a form of trade union closed shop for prostitutes, sanctioned by law. But then what about the businesses that try to gouge concessions from politicians to get into these closed-shop deals? How would such ‘guilds’ be able to start up? What about registration fees? I can see a wonderful opportunity for political and business corruption here.
No, sometimes we ideologues have it right: the simplest, most radical option is also the most practical one. Even if you morally disapprove of prostitution – I do not – as a practical matter, legalising it makes lots of sense. Compared to what goes on down in most parliaments, prostitution is a noble calling.
David Mamet, the US playright who for most of his adult life thought of himself as a liberal in the US sense – ie, a leftist with a favourable view of government – has had a sort of epiphany:
As a child of the ’60s, I accepted as an article of faith that government is corrupt, that business is exploitative, and that people are generally good at heart.
These cherished precepts had, over the years, become ingrained as increasingly impracticable prejudices. Why do I say impracticable? Because although I still held these beliefs, I no longer applied them in my life. How do I know? My wife informed me. We were riding along and listening to NPR. I felt my facial muscles tightening, and the words beginning to form in my mind: Shut the fuck up. “?” she prompted. And her terse, elegant summation, as always, awakened me to a deeper truth: I had been listening to NPR and reading various organs of national opinion for years, wonder and rage contending for pride of place. Further: I found I had been—rather charmingly, I thought—referring to myself for years as “a brain-dead liberal,” and to NPR as “National Palestinian Radio.”
What about the role of government? Well, in the abstract, coming from my time and background, I thought it was a rather good thing, but tallying up the ledger in those things which affect me and in those things I observe, I am hard-pressed to see an instance where the intervention of the government led to much beyond sorrow.
He finishes thus:
I began reading not only the economics of Thomas Sowell (our greatest contemporary philosopher) but Milton Friedman, Paul Johnson, and Shelby Steele, and a host of conservative writers, and found that I agreed with them: a free-market understanding of the world meshes more perfectly with my experience than that idealistic vision I called liberalism.
Interesting. Sowell is primarily an economist – and a great one – rather than a philosopher, although he has written on the topic (his debunking of Marxism is first-class). Even so, Mamet joins that small but influential group of writers, like Christopher Hitchens, Martin Amis and others who have become disenchanted with the default mode of big government worship of their peers. Mamet deserves applause for writing this piece; it appears in the Village Voice, and I bet his readership will get a sharp dose of the vapours.
Down in the dreary bowels of the Financial Times’ website, which has a list of what we happy people can expect in today’s budget, is this classic of FT understatement:
The chancellor will announce a delay in introducing international financial reporting standards to government.
No shit, Sherlock. In plain English, the vast debt bill incurred in the government’s Private Finance Iniative will not be put on to the public balance sheet for a while yet. How jolly conveeenient. If the PFI debt was so accounted for, it would add tens of billions of pounds of debt to the public balance sheet, making the state of the UK public accounts look positively Italian.
As I have said before, this “off-balance-sheet” stuff is a curse of modern finance, and should be scrapped.
The following headline appeared in The Times (of London) this morning:
Greggs chief attacks speculators for driving up the price of wheat
The managing director of Greggs, the high street baker, has attacked speculators for driving up the price of wheat and fuelling famine in Africa.
Sir Michael Darrington, who yesterday announced that he would be stepping down after 24 years in charge, said commodity traders were more to blame for spiralling food price inflation than poor harvests or farmland given over to biofuels.
Ah, bash the speculators. Where would we be without those terrible people? It may be that some of the high price of wheat – now over $13 a bushell and up 118% in the past 12 months – is down to hordes of greedy, Gordon Gekkos bidding up prices for the stuff, but these people make a living by trying to correctly guess future prices and act on imperfect information. They cannot, however, defy the laws of economic gravity. If supplies increase, as is likely if prices are so high and there are big profits to be made growing the stuff, or if demand slackens, as people use wheat substitutes, then all that speculative mania will fall away. In any event, unless this business executive or other folk have looked at what happens when wheat is no longer traded as a commodity but handled by government regulations, they will realise the nonsensical nature of bashing speculators. In the 1980s, years of agricultural subsidies led to the infamous “wheat mountains” that were subsequently dumped onto the world market, hitting producers in the Third World.
Now consider this headline:
Bread basket that is left to grow weeds
The item goes on to explain that large tracts of good, agricultural land in Eastern Europe are lying fallow, ie, un-planted, because of tariff barriers and other restrictions. The Times rightly hammers the EU’s wretched Common Agricultural Policy, the USA’s farm support system, and other regulatory controls on farm production, for contributing to this farce.
It is a joke to attack speculators, who after all bet their own or their banks’ money on trying for forecast supply/demand trends, when it is politicians, who rarely, if ever suffer the consequences of bad investment decisions, who get to bugger up global agricultural markets in this way. At least if a bank or hedge fund gets a bet wrong, the principals in the fund get bankrupted, or executives are sacked. This does not always happen, of course, but generally the market is much tougher on mistaken bets than the political system is. As prices soar in the shops and hit poor consumers, the petty meddling of Chancellor Alistair Darling in today’s budget statement is small beer indeed. Great former UK politicians like Robert Peel have put free trade front and centre of their economic philosophy. It would be a welcome step if western governments today did the same.
A lot of elections at the moment. Besides the US elections, we have just had the Spanish elections and in my wife’s small country, Malta, the ruling Nationalist Party, a vaguely right-of-centre party that supported Malta’s entry into the EU and the euro, won by an incredibly slender margin (just over a thousand votes). As I have a vested interest in Malta remaining a broadly open country, I am glad that the party won, or at least relieved that Labour, the main opposition party with a vindictively regulatory streak, did not. But my views on Malta’s election are tinged with a bitter-sweet taste as the Nationalists, for all their generally pro-enterprise views, have made serious errors. The party took Malta into the EU. By staying out of the EU, Malta could have retained and expanded its status as an offshore tax haven, providing Monaco, the Swiss, Liechtenstein and Gibraltar with some useful competition as a friendly venue. Malta has quite a thriving IT and financial sector and English is widely spoken there, a priceless advantage. By keeping out of the EU, it could also have avoided becoming a conduit for tens of thousands of illegal immigrants who use the small island as an entry point for the EU. Malta, an island the size of the Isle of Wight with half a million people, is not a country that can easily absorb a large influx. But as my better half points out, Malta, a Catholic country, has long feared the shadow of its Muslim neighbour, Libya, just a hundred miles or so to the south, and sees EU membership as somehow tying it ever more closely to a non-Muslim population. The Maltese are quite a tolerant bunch but they are fiercely pro-western. The Archbishop of Canterbury would be thrown into Valetta’s Grand Harbour.
One reason for the closeness of the elections is that there is a lot of anger at the governing party, even among most moderate voters, at some of the crasser building developments in the densely populated island. Even the most ardent defender of free enterprise will sometimes struggle to defend the ugly high-rise developments in part of the island that have gone up next to the attractive, honey-coloured buildings along parts of the country (in the smaller neighbouring island of Gozo, such developments have been far fewer, thankfully). Tourism is a crucial source of income for Malta; its historic buildings are part of its appeal, so long-term tourist entrepreneurs should hopefully follow their self-interest and avoid damaging the very thing that makes Malta a nice place to visit. This is an interesting subject for economists: ugly developments make money for investors in the short run and arguably, are better than no development at all, but the long run costs can be in the form of less tourism overall as would-be visitors go elsewhere for somewhere prettier.
Anyway, back on topic: this has to have been one of the closest election results I have ever read about.
The editor of The Spectator, Matthew d’Ancona, is not what you would call a combative journalist. I tend to feel that the Spectator, while still a highly readable publication these days, has tended sometimes to tag along a bit too tamely behind the Cameron/Brown consensus, although the magazine retains its robust elements, not to mention that entertaining if rather self-parodying old card, Taki.
What the Spectator thinks of Gordon Brown may not count for much outside the Westminster village of media/political junkies, but I reckon this ferocious column by d’Ancona about the government’s repulsive behaviour over the recent EU Constitution, sorry, Treaty, represents quite a shift. Whatever respect that d’Ancona used to voice about Brown has disappeared. I have never read anything so sharp by d’Ancona before. The trouble is, that it has taken far too long for the truth to dawn on even supposedly cynical media commentators that Brown is not a man of honour or principle. The mistake is to think that because he is Scottish, dour, unable to do the Blairite Dianaesque rhetoric, that he is therefore somehow more ‘solid’ or ‘honest’ than the actor-manager that he replaced. The truth, alas, is quite different. Brown is just another machine politician.
On both sides of the Atlantic, the men and women who serve in the volunteer armed forces have been attacked on their own soil. There has been an attack on a recruitment office in the US. It is a sign of the times. In Peterborough, East Anglia, RAF personnel serving in such nearby bases as RAF Wittering have been abused, although it does not appear – yet – that any of the abuse has involved physical violence. As a result, force commanders are thinking of rescinding the idea of letting service personnel wear their uniforms while off-duty. Given that a chap traditionally liked to wear his uniform as a matter of pride, not to mention its wonderful women-attracting qualities (sorry if this offends PC readers), this is a poor state of affairs. I read this unpleasant story with a certain amount of personal interest as my father used to serve at Wittering with 23 Squadron, a fighter squadron that in the 1950s operated aircraft such as Venoms and more latterly, Phantoms and Harriers.
The identity of the abusers is not described. For all we know, they could be anti-war types, Islamists, or just local youths trying to impress their mates by “having a go” at folk in uniform. When I lived in Ipswich 15 years ago, there were always stories of how Army squaddies at Colchester, a nearby army town, were getting into scrapes with the locals. It was, however, much rarer for the US servicemen at RAF Bentwaters, Woodbridge, Mildenhall or Lakenheath to encounter problems, since overseas US guys tend to be more polite and let’s face it, if you insulted an F-16 pilot after drinking too much Adnams ale in an Ipswich boozer, the chances are that the guy would order in a squadron of B-52s to nuke the place. At least I like to think that was always an option.
Sometimes I wonder whether the news editors in the media “join the dots”, to coin a phrase. Scanning my Bloomberg machine this morning (part of my day job), this headline was prominent:
Chicago’s Snowiest Winter Since 1979 Depletes Budget
Then, on the same Bloomberg front page, is this:
Gore Invests $35 Million for Hedge Funds With EBay Billionaire
Gore has, of course, made himself a mint and also burnished his Green credentials with his film, An Inconvenient Truth, a film that has had great influence in encouraging the idea that the Earth is at serious risk from man-made global warming, although others remain to be convinced. Fair play to Gore: if he has managed to make a lot of cash by producing a film and persuaded enough paying customers to see it, well who am I, as an ardent capitalist, to complain? If he wants to invest in those mysterious-sounding things called hedge funds, even better (they are not all that bizarre, by the way, just a form of investment fund with a few tricks). But if the city of Chicago is running short of cash to pay for all the snow clearance, maybe the councillors should phone up Al and ask for a donation. After all, the current freezing weather in so many places must be er, Man’s fault, right?
That the EU Referendum blog is unhappy at the latest turn of events in the UK parliament is an understatement:
In other words, in a very real sense – not at all an arcane, academic point – as Lisbon bites, it will no longer makes any difference at all who we elect. For sure, any new government will have some residual powers which it can call its own, but these will gradually be stripped from it as the EU starts to exert its newly-acquired powers.
It occurs, therefore, that the one thing we need to do is boycott the electoral process. If there is no point in having MPs, we should no longer partake in the charade that we have meaningful elections. There can be no better message to send to MPs than an ever-declining turnout. This robs them of even the pretence of legitimacy.
Quite so. It seems to me that we have the bizarre spectacle of MPs choosing to make themselves irrelevant. Perhaps they have reached the deep realisation that they are unworthy of being legislators, that their real role in life is to fiddle expenses, disport themselves on TV and go to foreign junkets. There is, quite frankly, no further use for them.
In moments like this, when so many powers are being transferred to a supranational entity like the EU with remarkably little democratic accountability, and on a scale that has no clear modern parallel, it makes me wonder what, if any point, there is in things like intellectual activism. Getting the message across in a national context is hard enough; trying to persuade Frenchmen, Germans, Italians, Dutchmen, Spaniards, Greeks, Portugese, Belgians and Finns of the case for less government is next to impossible. One of the reasons why I, as a libertarian, am broadly in favour of self-governing nation states is not out of some starry-eyed belief that they are always better than some broader alternative, but because experience teaches us that it is increasingly hard to make changes on a large, supranational level where there is not a shared culture or shared language.
The EU has had its merits, but I think the sad truth is, and has been for some time, that lovers of liberty cannot expect it to be reformed from within or turned into some sort of benign free trade zone. We have to get out.
Matthew Lynn, a columnist for Bloomberg, has a good and succinct take on the latest nonsense about actions by the German and British government to use information – obtained in highly dubious circumstances – to go after people who have put their money away in tiny European tax havens such as Liechstenstein. Philip Chaston of this blog has already touched on the subject. The difficulty that even any pro-freemarketeer politicians – if there are many – have in defending tax havens is defending the right of people to essentially flee from an oppressive but still-democratic regime. In chatting to people on this issue and reading the commentary, a lot of people make the assumption that wealth is collectively owned if enough voters wish it so and that therefore no-one has the right to flee from the looting intentions of such voters. In other words, non-domiciled residents who want to get away from the British taxman are not being good, democratic citizens by shirking their ‘responsibilities’.
At its core, what this issue throws up, beyond the practical issues of how tax rates hurt economies, is a broader issue of the obligations, if any, that an individual has to his fellow citizens. If one believes the classical liberal idea that governments exist to serve the individual and not the other way round, that individuals have no apriori obligations to others, then the crackdown on tax-avoiders should be seen as the power grab that it is.
Another issue, of course, is this: democracy and liberty are not the same thing, a point that has been remarked at this blog many times before. For sure, democracy may – may – be the least-worst way to kick out a government and replace it with a hopefully better one, but the idea that freedom comes from letting 51% of the electorate steal from 49% of the electorate has precious little to do with liberty. The right to own property and enjoy its fruits unmolested is as important as freedom of speech or the right to self defence. Tax havens rile communitarians precisely because they are a standing reproach to the looters who use democratic mandates to justify their depredations. They act as a brake on the power of governments with a temporary majority in a democratic assembly every bit as powerful as other checks and balances such as independent courts and upper chambers. And as traditional checks and balances are eroded – as they have been in Britain recently – we need all the constraints on national and supranational power we can get. We should therefore see the efforts by EU and other nations to create a global tax cartel as being every bit as dangerous as the alleged cartel deals forged by the 19th Century “robber barons”, except of course that this latter group were usually unfairly maligned. Compared to the tax-cartel zealots, Rockefeller and Co. were strict amateurs.
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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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