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]

Samizdata quote of the day

“This modern society seems to be threatened by a number of serious threats, and the one that I would like to concentrate on which will in fact be the central theme, although there will be a lot of subsidiary little items, the central theme of my discussion, is that I believe that one of the greatest threats to modern society is the possible resurgence and expansion of the ideas of thought control; such ideas as Hitler had, or Stalin in his time, or the Catholic religion in the Middle Ages, or the Chinese today. I think that one of the greatest dangers is that this shall increase until it encompasses the whole world.”

– Richard Feynman. The Pleasure of Finding Things Out, page 98. The comment comes from a talk he gave in Italy in 1964. I don’t doubt that he’d be alarmed and saddened at the censorious crap going on some Western universities today.

Let’s be blunt: classical liberalism is losing

I put this comment up on a group page on Facebook about the latest comments from the young Congresswoman Alexandria Ocasio-Cortez, quoted approvingly by two academics in the US, and re-post them here, with some adjustments:

The problem, as I keep noting, is the zero-sum mentality. For such an approach, creating wealth is incomprehensible, and that therefore having much wealth must be evil. She carries the assumption that for A to be richer than the average, B must have been robbed in some way. There’s no sense of a rising tide of wealth, or any grasp of the division of labour, the benefits of innovation, anything. And then there is a sort of hatred of the good for being the good, a hatred even for people who have achieved great success. Even if her concern for poor people is sincere, she’s just treating rich people as means to an end (giving that wealth to others); she just assumes that their wealth was gained wrongly. (In case Paul Marks or others make this point in the comments, some of the rise in inequality in recent times is down to central bank creation of money, which has tended to benefit owners of real estate and equities, but I suspect that Ms Ocasio-Cortez isn’t going all Ludwig von Mises on the Fed.)

She’s not alone in calling for massive redistribution and it is obviously tempting these days to be patronising and poke fun at a not-very-smart young woman (she has a certain cunning in how to market herself), but we should not do so. I don’t pity her. I despise her and her revelling in what amounts to thuggery (which is what coercive state redistribution amounts to, stripped of the fancy language). The rot goes far wider. Prominent academics (such as the people quoted in that NYT article I linked to above), the likes of Thomas Piketty, newspaper columnists, TV broadcasters and arguably even the Pope all press the same, flat-Earth economic buttons. They haven’t been confronted enough. So many “right-wing” politicians aren’t any good at this; they behave all too often like rabbits caught in headlights. Since 2008, this has become worse.

This book, Equal is Unfair, by Yaron Brook and Don Watkins, is particularly good at skewering this egalitarianism.

Also I would argue that Robert Nozick’s renowned book, Anarchy, State and Utopia, and its chapter on egalitarianism and the flaws of Marxism contains just about the most deadly critique of this egalitarian mindset I have ever read. It’s now almost 50 years’ old, but it remains totally on target.

At some point, Ms O-C is going to over-reach, and make an ass of herself, as they often seem to do. Or she may be shocked at being outflanked by people even more collectivist than she is, and start to get a bit wiser. Who knows?

But the mindset she represents is not going away. And our universities and colleges are full of people who imbibe re-heated Marxist, egalitarian notions from their post-68 lecturers. There’s a huge task for genuine classical liberals to take up.

Samizdata quote of the day

“The World Economic Forum in Davos is precisely where one would expect to find the kind of people that want to overturn the EU referendum result. Davos types wouldn’t just cancel referendum results they don’t approve of. If they could if they would cancel the people.”

Douglas Carswell

Going “woke” is bad for business – hopefully

There has been something of a trend, it seems, of big firms adopting “woke” or politically correct agendas (here is a definition of “woke” for the befuddled) in recent months and years. The latest example is that of razor and men’s grooming products business Gillette, part of consumer giant Proctor & Gamble. Here is the advert and a discussion around it by the Wall Street Journal. Here is another version of the advertisement.

So what’s going on here? In my view, this is an attempt by a firm that is keen to stem outflow of market share to rivals, and which also fears a reduced demand for its products at a time when a lot of men seem to want to grow beards these days (although they still will want to trim them and keep them neat, etc). The firm’s top brass have concluded that in the current culture, where masculinity is considered to be “toxic”, and probably a contributor of right wing views, global warming and competitive team sports, that a change of tack is required. Make men buy something by worrying about their primal urges! Get into the good books of the chattering classes and the distributors of ad. industry campaign awards!

The problem here is that this illustrates the disconnect that there now is between that segment of the chattering classes that is influenced by leftist ideas and the rest of the population. The CEOs of modern firms may not all tack in this direction, but they have become convinced, or been convinced, that going “woke” is smart for business. Also, the kind of folk most likely to rub up against CEOs are the consultants and advertisement gurus who imbibed such modish ideas in colleges and unversities.

We see this kind of agenda at work in the wealth management industry, where firms are keen to stress how much of what they do is to promote environmental, social and governance-linked investment, never mind actually making money for clients and owners. Entrepreneurs are as celebrated as much for giving their wealth away as for the grubby process of, you know, making it in the first place. (One of my least-favourite expressions used by business folk of a certain type is how they want to “give back” to the “community” – this implies that they “took” something initially that wasn’t fully theirs.)

Clearly, a lot of this may be incubated in Western universities, and you have to wonder what sort of business decisions will be made by the kind of “coddled” youngsters now going through universities. I have been reading the Coddling of the American Mind by Greg Lukianoff and Jonathan Haidt, and what alarms me, as it should anyone, is what sort of future businessmen and women we will get if they are drawn from the sort of ranks these academics describe. What will be their desire to take risk, to invest wisely, to cater to genuine client needs? How susceptible will they be to political fads entering the boardroom and factory floor?

In the end, as some classical liberals say, the ultimate arbiter of all this is profit/loss. If Gillette’s market share rises after these ads, maybe the management will say “there, I told you so” and move on. I have made my own tiny vote on this by ensuring I buy from rivals such as Wilkinson’s Sword instead. Possibly, so will others of us “toxic males”.

Samizdata quote of the day

“Doing nothing is a full-time job. Don’t imagine that laissez-faire means putting your feet up. All officials want to extend their powers; all bureaucracies will grow if they can. To stop it happening you need to be at your desk before the civil servants come in and still be there when they go home.”

Sir John Cowperthwaite, financial secretary, Hong Kong in the post-war period. (Quoted in this excellent CapX article about the terrible mayor of London, Sadiq Khan.)

Here is a profile of Cowperthwaite for those who want to know more about this admirable person, as different from the London mayor as can be imagined in terms of managerial approach and political philosophy. (Here is an interesting leftist’s blog comment on Khan, proof that he is not universally beloved on that side of the spectrum).

Samizdata quote of the day

“But though feted and exploited by questionable allies, Solzhenitsyn should be remembered for his role as a truth-teller. He risked his all to drive a stake through the heart of Soviet communism and did more than any other single human being to undermine its credibility and bring the Soviet state to its knees.”

Michael Scammell, on a writer and survivor of Soviet brutality, and who was born on Dec 11, 1918. So on a day after what would have been his centenary birthday, let’s celebrate his birth.

Samizdata quote of the day

“Thatcher had to see off the fury of miners fighting pit closures, a dispute that dragged on for a year but which failed to mobilise other industries or the public at large. Macron is confronted by a nationwide rebellion that unites people of different regions, classes, occupations and political allegiances. While protestors rampaged through Paris last Saturday there was also violent unrest in Toulouse, Bordeaux, Calais, Marseille, Narbonne, Nantes and many towns. This week, more than 100 high schools have been blockaded by pupils who, emboldened by the gilets jaunes, have relaunched their springtime protest movement against educational reform. Farmers, lorry drivers, construction workers and ambulance staff are also threatening to go yellow.”

“It has been said that the gilets jaunes movement is to Emmanuel Macron what the miners’ strike was to Margaret Thatcher in the mid-1980s. Not in the slightest. While the comparison might please Macron — who, from the moment he was elected, has staked his reputation on his determination not only to reform his country’s economic model but also to stand firm when the inevitable backlash erupted — it hides the fact that what the French President faces is far more serious.”  

Gavin Mortimer, Spectator (£).

Samizdata quote of the day

“The U.K. is a European country, and always will be. Trade and contacts among the nations of Europe can and should continue much as before. And I have no doubt they will do so. But the political nature of the EU has changed since monetary union. The EU failed to recognize that the euro would demand fiscal and political integration if it was to succeed, and that countries outside the euro area would require a different kind of EU membership. It was inevitable, therefore, that, sooner or later, Britain would decide to withdraw from a political project in which it had little interest apart from the shared desire for free trade.”

Mervyn King, former governor of the Bank of England. If you read his comments carefully, his displeasure at how the institution he led has become a plaything of Remainer propoganda is plain. His book, The End of Alchemy, contains a devastating take-down of the euro and is an explanation of why the UK had little alternative in the end but to leave. King was never quite of the full “establishment” – too much of the West Midlands grammar school boy to really be at ease in the EU corridors of power. Good.

An exodus

“What’s wrong with UK financial markets? The global economy is recovering, but British stocks and shares are not keeping pace. The pound has failed to recover from the slide it experienced in the wake of the EU referendum. This is frequently blamed on investors being spooked by Brexit, even more so by the possibility of a no deal. But has anyone actually asked the markets what is spooking them? Look closer and it becomes clear that while Brexit is a problem for some investors, most are much more worried about a far bigger risk, even if they rarely speak about it in public. It is the possibility of a Corbyn government.”

Ross Clark, in the Spectator (£).

As there is a paywall and it is annoying for those who cannot get through it, here are more paragraphs:

Since last year’s election, when the Labour leader came within a stone’s throw of No. 10, it has been impossible to write off the idea of a Corbyn victory. And we’re about to enter a time when anything can happen. Theresa May looks doomed to lose the Commons vote on her Brexit deal on 11 December; the DUP has said it may well withdraw its support from the Tories, leaving the Prime Minister without a majority. Whatever the Commons result, turmoil is more or less guaranteed — and one possible outcome is a general election as early as January.

A no-deal Brexit would unquestionably cause short-term ructions in the UK economy, as well as affect the pound and the FTSE — for what economic forecasts are worth (which is not very much, to judge by recent history). Oxford Economics recently claimed that GDP would be 2 per cent smaller than expected, pushing the UK into a mild recession. But even if that were to happen (and it has to be remembered just how far Treasury forecasts were out when they claimed the economy would shrink by 3.6 and 6 per cent in the event of a Brexit vote), growth would then rekindle, trade would continue, companies would re-route imports and exports, and an inflationary spike would die down. But if Corbyn were to be elected on a ‘radical socialist’ platform, investors can only guess as to what might happen.

It is the threat of a wealth tax that is scaring wealthy individuals. It is a theme to which shadow chancellor John McDonnell has returned several times. In 2012 he gave his endorsement to a proposal by University of Glasgow academic Greg Philo (sometimes mistakenly called an ‘economist’ but actually a professor in sociology) to subject wealthy individuals to a one-off wealth tax of 20 per cent in the hope of using it to pay off the government’s debts.

`The wealthiest 10 per cent own £4,000 billion,’ said McDonnell. ‘If you took 20 per cent of that you would then have £800 billion and we could tackle our deficit — we could tackle our debt — four-fifths of our debt would then be wiped out. So we’re saying just collect the money and make those who created the crisis pay for the crisis and that way you overcome it.’

The idea that wealthy individuals are as a group responsible for the 2008/09 crisis is absurd — what role, he might like to explain, did the Rolling Stones play in the crash? — as is the suggestion that such a tax would pay off the government’s debts: how McDonnell would manage to capture his £800 billion when, of course, highly mobile wealthy individuals have the option of fleeing the country. There is little appetite around the world for international socialist revolution, the only thing which could stop capital flight in its tracks.

On the contrary, many governments are going in the opposite direction and making every effort to attract wealthy residents. Donald Trump’s tax cuts have set out a big welcome mat for the world’s rich (if not so much for those of liberal opinion). Israel has introduced a ten-year tax holiday on the global wealth of new residents — they will pay tax only on money they bring into the country. Emmanuel Macron has reversed François Hollande’s war on the rich and offered special inducements to attract wealthy residents. Monaco recently held a presentation in London in an effort to attract wealthy individuals. Argentina and Greece, countries from which the wealthy were fleeing in recent times, are now much more settled.

The author is correct; in my own discussions with people in the financial markets, there is a real fear of what these reheated Marxists will do. Anyone who owns land, for example, unless they are politically connected to Labour, will be targeted. And as usual, it will not just be “the rich” who get it in the neck (not that isn’t bad in its own right), but the broad mass of the middle class who will not have the ease of being able to go abroad on a second passport.

The tragedy of the current situation is that Prime Minister Theresa May uses the genuine fear of a Corbyn-led government to scare us into accepting her plans to turn the UK into a European Customs Union vassal state, indefinitely, hoping no doubt that we all become so bored by the Brexit process that we accept that as the least-worst, if still crap, outcome. This situation, however, cannot last and I predict that there will be a significant political party realignment in the next few years, a view that several folk I know share. This current choice menu of Marxist anti-semite Left vs managerialist and hopeless Tory Party is simply shameful for a country of the UK’s standing in the world.

A fallacy

I recently went along to a financial markets briefing in the City (as part of my job; I do these things so you don’t have to, dear reader), and we got onto the subject of the eye-watering amounts of public debt in the West.In the US alone, the total debt is around $22 trillion (we must hope that if the economy is as robust as Donald Trump claims, that some of this gets repaid). And the economist in the room, when asked about this, and about how future generations are being asked to pay for our current profligacy, liked to refer to the following quote, from one Abba P Lerner, quoted in 1948. (Lerner was a Russian-born British economist). The quote goes: “Very few economists need to be reminded that if our children or grandchildren repay some of the national debt these payments will be made to our grandchildren and to nobody else.”

All very clever, and people in the room (apart from yours truly) nodded their heads at such profundity. So the UK/Western debt is terrifyingly big? Heh, no bother, because our kids/grand-kids will repay it, to er, each other, or something.

But wait a minute. If the UK racks up, say, £5 trillion of debt, and the interest charges to service that debt are still, say, the equivalent of several government departments (such as defence, health, etc) then that is money that has to be found, and yes, the payments of some of those will be paid to other, very much alive Britons, but would those people rather not have to repay it in the first place, but instead use savings to finance investment in productive goods and services? In other words, the inter-generational wealth transfer issue doesn’t become less of a horror. If the present generation racks up a bloody great debt, then the following one is left with a collective bill that it would, other things being equal, prefer not to pay. And there comes a point, of course, when the cost of financing the debt repayments can be so big that current economic growth and revenues cannot fund it, so you end up in a Latin American crunch, a sort of liquidity nightmare. So the question is at what point does the stock of public debt go from being this sort of seemingly benign shuffling of paper from A to B to something out of a disaster movie?

One thing that ought to give people pause about the blithe statements of economists about debt is that some debt down the years has been financed by debasing money – in other words, inflation. The robbery of savers and encouragement of financial speculation and finagling is, paradoxically, a reason why we have seen relatively slack productivity growth and hence stagnant real wage growth in the West in recent years. (Ultimately, real wage growth requires more productivity, and that needs to be financed by real savings, not central bank fairy dust.)

I commend readers to the studies and writings of a friend of mine, Scottsdale, Arizona based investment figure Keith Weiner, who has noted the link between very low, or even negative interest rates, capital destruction, and crap wage and income growth. Far too many on the free market side are in denial that we have suffered from poor wage growth, but we have. It is one of the reasons for why charlatans and thugs such as Jeremy Corbyn and all the rest have been successful, because some of their critiques about living standards are true. Their diagnosis, of course, isn’t.

Samizdata quote of the day

“The idea that it is not possible to leave the EU seems to be the most dangerous affront to democracy. They are saying not only that it was wrong for the public to vote to leave, but also that it cannot be done and therefore the democratic vote was meaningless.”

Richard Tombs, historian, University of Cambridge.

Samizdata quote of the day

“The unwarranted gloom about the UK and the exaggerated respect for the EU are not new. Many of those who now say that Britain must stay as closely aligned to the EU as possible predicted disaster when the pound left the exchange rate mechanism in 1992; prophesied a decade later that Britain would rue the day that Gordon Brown gave the single currency a wide berth; and said with the utmost confidence in 2016 that a vote for Brexit would lead to an immediate and deep recession and a massive increase in unemployment. None of these things happened.”

Larry Elliott, writing in – yes – the Guardian. Even if you don’t share his left-leaning, Keynesian economics, much of what he says he about the EU debate is spot-on. He is right, for example, to remind folk of just how lousy the forecasts of various EU pushers down the years have been, and continue to be. The shamelessness is, well, shameful.