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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Longevity in an office is no automatic guarantee of worth. So the fact that Dr Alan Greenspan, chairman of the U.S. Federal Reserve, has been in the post for 18 years and is shortly to step down, does not mean he must qualify for greatness. But even a sceptic of the need for central banking like me believes that Greenspan, who is nearly 80 years old, is a remarkable man. His career spans the financial crash of 1987, the recession of the early 90s, the long stock market boom, the Asian financial crisis, the Russian debt default and the rescue of hedge fund Long Term Capital Management, and of course, 9/11 and its aftermath.
I am not going to chart every nip and tuck of his tenure to state whether he was a monetary policy genius, a wise man who realised his limitations and that of his office, or just very lucky. I suspect that luck played a part but what jumps out at me, from reading articles like this, or this fine biography by Jerome Tuccille, is that Greenspan was a very wise operator indeed. America, and indeed most of the western industrialised world, has enjoyed a relatively long period of economic growth and low inflation. The United States has certainly done so. And Greenspan, being at heart a classical liberal, had the intelligence and humility to chalk up 99 percent of the credit to entrepreneurs and their employees rather than to the supposed fine arts of macro-economic policy.
I remain a sceptic, though, of the need for central banking. Greenspan has left no ideological or operative legacy that could be enshrined in doctrine and used as a clear guide to future policy. Although determined to protect price stability, he could be daring and flexible when required, far more so than the more conventionally monetarist European Central Bank. The problem though is that Greenspan’s replacement could be made in a far different mould.
America, and indeed the world, has been very lucky to have a man as wise as Greenspan at the helm. But it is surely dangerous that an economy as big as that of the United States should allow so much economic power to be held, ultimately, in the hands of one man – even if he does have very smart folk working with him. Of course, the business of “doing monetary policy” has become better over the past decades. Britain’s own central bank runs monetary policy with a studied approach unimaginable in the horror years of the 1970s when money was treated as a metaphysical abstraction. But things could go wrong. Sooner or later the men with the interest rate levers are going to make a big mistake and the results could last a while.
Meanwhile, this article scans possible successors to the clarinet-playing former disciple of Ayn Rand and gold-backed currency.
Reports about Hurricane Katrina make for grim reading. Not just the immediate human and physical toll, which is the worst of all. Also worrying must be the financial impact, both in terms of the likely huge insurance payouts and the rising price of oil – although high oil prices may eventually trigger a supply response, if the market works as it should.
More than 90 percent of the Gulf of Mexico oil production has been shut down and for how long, is as yet unclear. Crude oil is now over $70 a barrel and could even march higher, particularly if another hurricane takes hold, or if political and military affairs take another bad turn in the Middle East, or for that matter other places such as Nigeria and Indonesia. The black stuff is getting ever more expensive and of course, makes a mockery of the sort of anti-SUV posturing of the sort I mentioned a few days ago here. As the price rises, people will not change their motoring habits to please non-drivers like Andrew Sullivan, but because it makes plain common sense. Alternative energy sources, even those once branded too offbeat, starting to attract more venture capital and support.
Britain’s Channel 4 news had an item on the hurricane in which the general gist of the commentary went like this, to paraphrase a bit: “Is America getting the payback in weather for being the world’s largest carbon polluter?” The broadcasters may mean well but it came across as almost gloating in tone. I hope that was not the intention.
“Organic farming has been put forward as one of the major pillars of a new, more-sustainable human society that would be “kinder to the earth”. Unfortunately, organic farming cannot deliver on that promise. In fact, organic farming is an imminent danger to the world’s wildlife and hazard to the health of its own consumers.”
Dennis Avery, quoted in Fearing Food, (page 3) by Roger Bate and Julian Morris.
Something for George Moonbat to ponder, I reckon.
Laissez Faire Books, the bookshop that stocks all manner of fine tomes from the complete works of Murray Rothbard to obscure 19th century liberal historians, now has a blog. Definitely worth checking it out on a regular basis and some of their stuff is frequently cheaper than the other big online book retailers. I once spent a very pleasant two hours browsing through their store in downtown San Francisco last year.
Thanks to the ever-readable Marginal Revolution for the pointer.
Uber-blogger Andrew Sullivan, fresh back from his holidays, rages against Americans who drive big SUVs on the grounds that by doing so, they help swell the coffers of terror sponsoring states in the Middle East. Patriotic Americans, says the ahem, British Mr Sullivan, should drive smaller, more fuel-efficient vehicles. He does not like the habit of “soccer moms” driving their kids around in such vast vehicles, full of clobber he thinks is a waste of space and money.
Well Andrew, maybe. I would have thought that with the price of crude oil hitting the region of around $66 per barrel, that even the dimmest motorist is going to see the impact on a bank statement eventually and wonder about trading in the Hummer for something a tad smaller. I know it is crazy ideological talk but people do actually take account of prices.
If oil prices stay on their current trajectory, it won’t need a scold like Sullivan to remind Americans, or indeed anyone else, to adjust their consumption. All it takes is the operation of prices. Some Scottish geezer called Adam Smith once wrote about this about 230 years ago, I think. It is such a shame that even bright folk like Andrew Sullivan take all this time to catch on.
No longer are hearing aids just for people suffering from defective hearing. This article in Wired, the U.S. technology and futurism magazine, says manufacturers are now producing aids that even someone with “perfect” hearing can use to enhance the experience of certain sounds. An example of how a medical technology ended up becoming almost a luxury product like coloured contact lenses.
Sounds like a winner. I suffer from a permanent mild buzz in my right ear, the results of an ear infection. It sometimes is a little hard to make out what a person is saying in a loud party gathering. With one of these new, inconspicuous aids, I could listen in to comments across the room better than Superman. Thinking about it, it might make it impossible to whisper a confidential message to anyone without fearing that a guy with one of these hearing gadgets might pick it up. Shades of Q Branch fantasy turning into reality.
On the subject of enhancing human capacities via technologies, I have ordered Ronald Bailey’s latest hymn of praise to developments in this area. Looks good from the initial reviews.
It has not been a good last few days in the airline industry. Today, a passenger jet crashed in Venezuela, killing its entire passenger muster of more than 160 people. A Cypriot airliner crashed in Greece at the weekend, killing its entire passenger list and crew. And a few days previously, an Air France plane had a crash near Toronto, but fortunately all the passengers survived.
There is probably no direct connection to all this but it is a harsh reminder that, even in an age of ever-improving safety standards, air travel carries its hazards (and of course that is even before we get to the terror issue). It is also makes me aware that the skies over southern Britain, for example, are crammed with aircraft and it is still amazing that not more accidents occur than is the case. The volume of aircraft now flying to and from Heathrow’s mega-airport is extraordinary and continues to grow. The margins for error when it comes to potential collisions must be razor-thin.
I am watching that supreme embodiment of the Anglosphere culture at the moment – cricket, surely the finest game invented by Man. England are building on their first-innings batting performance against a rather shaky-looking Australia, although the Aussies have a chance to draw the match I think thanks to a superb batting effort by Shane Warne. Warne is normally and rightly famed for his leg spin, able to make the ball move in a bewitching fashion.
The Ashes series, as the England vs Australia Test matches are known, are currently shown on the Channel 4 terrestrial tv channel. The channel has made a huge success of its cricket coverage, I think. Its commenators are excellent, intelligent and don’t interrupt the flow of play. Even the adverts shown during a brief pause in play don’t irritate me like I thought they would. Simon Hughes, a true cricket geek, does a fine job of explaining key terms and tactics to novices. Cricket is a complex game and yet the presenters seem to make it accessible without dumbing it down.
Four of us Samizdata scribblers are split down the middle on this Ashes series, I guess. Two Aussies – Scott Wickstein and Michael Jennings – pitted against Brian Micklethwait and yours truly.
Update, despite the so-far snarky remarks in the comments sections, my joy continues to rise thanks to today’s batting performance. Summary of the game here.
“Hi, we’re aliens from another planet and our intentions are purely hostile.”
The Simpsons.
American journalist, Cathy Young, wades into the Intelligent Design (ID) versus Darwinian evolution controversy. It is an issue that appears to be causing more of a ruckus in Jefferson’s Republic than in Britain, which until recently, was pleasingly unruffled by attempts by religious folk to roll back the achievements of science (I have not a clue what Islamists think of evolution). Champions of ID seem, at any rate in the United States, to be coming from the so-called conservative side of the political divide. As Young points out, though, it is by no means clear why conservatives should take this stance:
In some ways, evolutionary theory is more compatible with conservative ideas than with leftist ones. Indeed, proponents of applying evolutionary theory to human social structures tend to be viewed by the left with suspicion, particularly on biological explanations for sex roles. As several commentators have pointed out, it’s conservatives who reject the notion that complex organization requires deliberate central planning — in economics. Why should biology be different?
Exactly. The Hayekian idea of spontaneous order is similar in some ways. It is arguable that Darwin’s appreciation of the emergence of complex systems may have been influenced by the writings of the Scottish Englightenment, such as Adam Smith and his famous idea of the “invisible hand”. It is entirely possible to believe in the existence, or indeed entertain the possibility of a Supreme Being and yet still sign up to Darwin’s theory and the subsequent development thereof. An atheist would presumably find it very hard to support ID, I would have thought. Here is a link to lots of stuff about this issue here, from a broadly pro-evolution perspective.
Should ID be taught in schools? Well, as a taxpayer, I object to what I think is a bogus theory being taught with money seized from my wallet. If parents want to teach religious ideas to their children, I have few objections. My only caveat is that parents do not have an unfettered right to indoctrinate their offspring, although given the rebellious instincts of most kids, this is pretty hard to do over an extended period of time in a vigorous, pro-science, pro-reason culture.
Anatole Kaletsky, the economics journalist who, despite a fondness for Keynsianism, is one of my favourite columnists, believes Italy’s departure from the euro and possible re-creation of the lira is a real possibility, one that needs to be taken with deadly seriousness by financial markets. He says the financial fallout from an Italian divorce could be disastrous:
While detailed consideration of these arguments is probably premature, the practical implication is clear: If the possibility of an Italian withdrawal were ever taken seriously by the markets, foreign holders of Italy’s €1.5 trillion public debt would face enormous losses, big enough to endanger the solvency of many non-Italian banks. In other words, the Italian Government is now in a position to kill the euro and wreck the European banking system merely by threatening to withdraw.
I think he is correct. As I said in my last posting about Hayek’s idea of competing currencies operating inside the same country, it is folly to imagine that the cult of the all-wise central banker will not come a cropper some time or later. Many Italian entrepreuneurs might be very glad indeed of an alternate store of value if that country does indeed pull the plug on the euro.
Some scare stories deserve to be ridiculed but I think Kaletsky is on to something. Between now and the Italian national polls next year, it would be smart to keep a very close eye on the euro zone financial markets indeed.
(Thanks to the Adam Smith Institute blog for the pointer. It reaches pretty similar conclusions).
Arnold Kling has brief thoughts here about the phenomenon of air miles. The “bonus” miles one accumulates due to air travel now equate to about $700 billion of value, according to a study that Kling cites. That is a lot of money. He is not very keen on air miles, largely it seems because he dislikes the way that dinner table companions go on about them. I know how he feels. An acquaintance of mine, who shall remain nameless, would constantly brag about how many air miles he got via Virgin or whatever… zzzzzz
On a more serious note however, one can see how some people might want to treat the air miles market as a sort of parallel currency. $700 billion dollars worth of air miles could buy one a lot of goods and services, conceivably, if exchanged by barter. Clearly they are highly restricted in terms of liquidity, the key advantage of money. But during a period of high inflationary stress, I could see how air miles could become quite popular as a medium of exchange.
The idea of competitive currencies is often rightly associated with the late F.A. Hayek. The idea seems to have gone rather quiet of late. Perhaps because we currently live in a period of relatively low inflation, the fears about the dangers of monopoly money and hubristic central banks have faded. It would be highly complacent, however, to assume that the current benign low-inflation environment will last forever. These things seldom do. Hayek’s idea may be ready for a comeback.
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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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