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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I have quite enjoyed watching the rugby so far; the Argentinian side has been a revelation; some of the South Pacific sides have played with their customary bravery and gusto; even England, after a stuttering start, look a bit better. The side that is – supposedly – fancied to win the contest this year by many observers are the New Zealand All-Blacks.
So you can imagine my befuddlement yesterday afternoon when I watched the game with friends down in deepest Suffolk. The shirts of the ‘All-Blacks’ were covered in a sort of grey-blue, while the Scots, instead of their old, neat blue shirts with the old Thistle emblem, instead had some weird grey-blue stripes on top of some other colours. At a distance, it was actually pretty hard to tell the two sides apart, colour-wise. I understand all the marketing stuff that goes on in sports these days but is not a fairly basic notion that you can tell one side apart from the other? I mean, during the thick of a rugby match, for example, it might actually be a good idea for teams to be easily able to recognise one another. As a friend of mine put it yesterday, the referee should have ordered one side off the pitch to change into recognisable shirts.
The whole thing was bizarre. Mind you, New Zealand won by a large distance, to no-one’s great surprise.
This reviewer plainly does not care much for Naomi Klein, scourge of the supposed evils of global capitalism. I plodded through some of her writings once just to see what the fuss was about and the economic illiteracy of this woman surprised even a jaundiced observer like me. She has achieved the rare feat of making the late JK Galbraith look like a great sage by comparison, which is quite a feat, given that many of his predictions were wrong, although he was a witty writer at times, which I suspect explains a lot of his appeal. And yet it is all such a shame: I think we free marketeers need to be challenged by high-class criticisms in order to sharpen our own defence of the market order; the problem is that if the anti-capitalist types out there become self-parodies, we can fall into a sense of false security. It never fails to surprise me just how bad a lot of anti-market writing often is.
On the issue of anti-capitalism, this old gem by Ludwig von Mises is a must-read, as fresh now as when he wrote it decades ago.
Every decent man is ashamed of the government he lives under.
– HL Mencken, US journalist. I would love to have seen him write about the likes of Bush, Blair and Gordon Brown.
The decision of the British government to rescue Northern Rock, the mortgage lender, with billions of pounds of taxpayer’s money, represents a terrible long-term blunder, in my view. It may also put the UK afoul of EU law, for those that care about such matters. Of course one feels very sorry for the people who have savings with NR and I suppose many of them are mightily relieved at the turn of events. I am sure I would be relieved if I were in their position.
But hard cases make bad law, and bad policy. Consider what has happened: a company gets itself into a pickle because its funding policies are up-ended by a sudden rise in short-term interbank borrowing costs; fears grow that the firm cannot make good all its commitments and a bank run occurs. Before the days when financial institutions of a certain size were considered too large to be allowed to fail, the collapse, however tragic, of Northern Rock would have been seen as a necessary if very nasty reminder that capitalism has its risks.
Banks and other institutions that lend money must not lend to people without being sure of the latter’s credit worthiness. But that caution has been thrown to the winds in recent years: in the US and Britain, for example, borrowing covenants have been relaxed, and pretty much any sentient lifeform has been able to get a mortgage. Some financial institutions are to blame for their plight although in mitigation, the price signals that are the essential feature of markets have been distorted by a long stretch of cheap money. The ultimate culprits, as I said the other day, are the central banks and their historically low interest rates. With so much cheap liquidity, the sort of returns investors made on safe investments were peanuts and so they took greater risks for often only a slightly higher reward. We are now moving to a position where risk is more realistically priced. The Northern Rock bailout undermines that move.
The rescue of Northern Rock also shows that the supposed success by Margaret Thatcher and even John Major in rolling back socialism is itself an exaggeration. It proves that if a company is big enough, it can call on the public purse. Northern Rock, based in Labour Party heartland of the north-east, has been effectively nationalised by the government, and inevitably, the clamour will grow for more and arguably more deserving groups of people to be bailed out. I can think, for example, of the hundreds of thousands of people who face retirement without a decent pension because Gordon Brown, when he was Chancellor, helped to shaft private sector pensions by changes to how equity dividends are taxed. They are arguably far more deserving of some form of recompense.
Of course, if the Tories had any moral or political backbone – and they most certainly do not – they would have denounced this state of affairs, rather than take the easy way out of playing to the gallery by supporting the tax-funded bailout of Northern Rock. Back in the mid-1990s, when Barings went down due to dodgy trades in the derivatives market, the collapse was seen as a harsh but necessary lesson about the realities of risk. For a while, Barings served as a useful warning, far more useful than any group of regulations. With the rescue of Northern Rock, careless financiers will now regard the state as an easy touch.
This is a pretty good yarn explaining to the layperson how exactly we moved from a period when the financial markets only ever seemed to go up to the time, now, when there are long queues of anxious customers trying to pull their money out of mortgage lending and savings firm, Northern Rock. Hedge funds have lost money. Weird-sounding entities called ‘SIV-lites’ have lost cash (the absurd jargon of financial markets never fails to amaze me). I do not share the view of some Jeremiads that this saga will bring about a recession – although I do not discount that possibility – but the pace of the UK economy is bound to slow down. Suddenly, this present government is going to find it a lot harder to pay for all those new public sector sinecures it has created over the past 10 years – possibly as many as a million public sector jobs. Slower growth will cut into revenues.
The Northern Rock saga has jolted financial markets so much that the US equity market today fell because of the situation. Normally, the UK stock market takes its lead from the US, not the other way around. By coinidence, meanwhile, Alan Greenspan, the former chairman of the US Federal Reserve, has been plugging his memoirs and airing his views about the current problems. Like a lot of people, I take a less than reverential view of Greenspan, although I can see his many fine qualities too: he is a good economist, pretty sound on markets as such folk go, but he abandoned his old, gold-bug principles a long time ago and was a pretty “seat-of-the-pants” sort of Fed head, making up economic doctrine almost, it seemed, on the hoof. It is a bit rich, frankly, for Greenspan to bash Bush for the tax cuts (one of the few good things that Dubya did as President, actually). Greenspan operated a relatively loose interest rate regime and this fuelled the lending practices that have come back to haunt us, especially the whole sub-prime debt Snafu. Cheap money that is detached from economic reality begets trouble. As a man who once learned his economics in the circles of Ayn Rand and Ludwig von Mises, it is a shame that even he could not understand this, or if he did, act upon it.
I have said it before but I repeat it here: it is high time that the cult of the detached, Olympian central banker setting interest rates for whole land masses was ended. Here is the classic statement of why central banks with monopoly rights of currency issuance keep coming a cropper.
Remembering one great Kiwi. On September 15, the Battle of Britain was won.
Some aviation eye candy.
Google comes up with a great prize idea.
“I would never, ever use violence against one of my own children. I usually find that waving the gun around works.”
(A line I remember – I think accurately – from the glorious Lock N’ Load CD by Denis Leary).
London is the most expensive place to eat out in the world, even more pricey than Tokyo (a city I really want to visit). Not very surprising, I guess. The sheer financial vibrancy of London fuels this, although it may lose some oomph if the problems in the global markets lead to some job cuts in the investment banking industry.
The key thing I have learned is to be bloody careful about the wine. I find that even in a pricey restaurant, you can get away without paying a fortune so long as you go very easy on the booze. But as soon as you buy anything other than the cheapest plonk in the list, you might as well call in the receivers and sell the house. For this reason I rarely eat out in expensive places, unless it is a special occasion, or eat at my magnificent Tandoori restaurant in deepest Pimlico, which is right next door to my flat. Now that’s luxury for you.
Recommendation: try this place out for a special night out. Great staff.
The other day I encountered this argument, which I failed properly to swat away and as a result, got rather rude to my interlocutor and he went off in a huff (sorry about that mate). What he said that made me go red was this:
“You libertarians keep banging on about the terrors of regulation. Yet you also slag off massive lawsuits and things like that. But if you want to get rid of huge payouts for things like people suing for damages, you need regulations. So why are you so hostile to them?”
As I pointed out, this is what is called a straw man argument.. Such “arguments” hold up a false, or in some cases deliberately false and weak, version of a point of view that a person wants to knock down easily (hence the “straw” bit). So let us fisk it.
First, I do not know any liberals or libertarians who argue that regulations are and always are a bad thing. Private sector bodies and voluntary associations of all kinds have them. A privately owned hospital, for instance, would regulate the behaviours of people who entered the premises. Why? Because that hospital would not want its reputation and bank account to be wrecked by outbreaks of disease, which lead to nasty insurance payouts. So it is in the self interest of said institutions to operate regulations, and more important perhaps, to be seen to do so. Another case is the London Stock Exchange. Long before modern financial regulators like the Financial Services Authority came along, the LSE was founded (back in the 18th Century, I think) and it had rules, albeit not always formal ones, but rules nonetheless (“my word is my bond”, etc). Trust is the key. And if you do not have trust, and have ways of enforcing said, then networks of commercial or other transactions do not work so well. So let us dispose of the canard that classical liberals are agin regulations. They are not. What we are against is one-size-fits-all regulations imposed heedlessly by the state. This is the crucial thing. Regulations, to be useful, need to be tried and tested, and if need be, discarded. State regulations tend not to be like that, but rather resemble clumps of ivy climbing up the side of a tree. They are much harder to reverse.
Okay, so now we come to the idea that libertarians hate expensive lawsuits. I suppose it is true that we hate frivolous, massively costly lawsuits, by definition (and who does not, except lawyers?). But sometimes you need to have lawsuits because you will not always have perfect knowledge of the kind of problems that can arise. Take the example of the hospital again – its managers may not know about new diseases that can be transported into the building in unexpected ways. A lawsuit following a disaster may be the trigger for a new rule. In this sense, lawsuits, although unpleasant for those on the receiving end of them, act as a sort of discovery process about what sort of problems exist. Lawyers have their uses.
In other words, this is quite a complicated argument. I just will not make the same mistake of trying to explain it after two beers and a 13-hour day at the office.
I am glad to see that the current moral panic about Britons sliding into a Hogarthian nightmare of drunken idiocy has not put off these guys from selling sparkling wine – or champagne, maybe – for £5 a bottle. I am not sure whether it is going to taste as good as Krug, mind. And of course, with many so-called luxury goods, the business model gets ruined if the prices are cut so massively that the exclusivity is lost, and hence the cachet of buying X or Y in the first place. Would Ferraris, for example, be quite the same if they were as cheap as Fords?
Even so, fair play to the businesses that bring us cheap goods. Globalisation – terrible, isn’t it?
The next time the Russian airforce tries to test the UK air defences (which seem to be working fine), perhaps the boys in grey-blue should paint a big sign on the side of the Typhoon fighters saying this: “The way to Harvey Nichols’ jewellery department and Chelsea FC is that way, chaps”.
Seriously, what the expletives deleted does Putin think he is trying to prove, exactly? It is not as if one of those “Bear” aircraft are state-of-the-art. Ironically, there has been a lot of criticism about the expense of the Eurofighter project – justifiably – but at least the RAF have a superb fighter. Let us hope they do not have to remind the Russians of what an outstanding force the RAF still is.
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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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