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.
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“What irritates me about France today is how the taste for work, for effort, has been completely lost.”
– Bertrand Meunier, who recently agreed to move to London from France to take a job at private equity firm CVC Capital Partners. He is one of many such people who are leaving that country to come to the UK in the wake of new, heavy taxes imposed by the recently elected socialist government in Paris. In the relative sense, London is marginally less ghastly than Paris, tax-wise. If you are a French person looking to work at a school for Gallic expats’ children in London, that looks like a growing business to be in.
“People who do otherwise commendable work are capable of rape and other crimes. If presented with rape allegations, they must face them like anybody else, however otherwise worthy their past contributions. Now, these statements should be so self-evidently obvious, it is ludicrous that they need to be said. But the furore over WikiLeaks founder Julian Assange sadly makes it necessary. Although now granted political asylum by Ecuador, Assange is a rape suspect who skipped bail. Yet some of his supporters have ended up making arguments that they would never dream of making about anybody else.”
– Owen Jones, writing in the Independent. He is, by the way, a big fan of Wikileaks. I am not so keen, as I have explained here before at Samizdata, such as when Wikileaks affected private bank details.
Here is also a good article on the impact of Wikileaks’ activity on investigative journalism, by Nick Cohen.
Update: George Galloway has, er, tried to defend Assange. With friends like Galloway, Assange doesn’t need enemies.
A Reuters columnist says that markets have yet to face up to the fact that there could soon be a “glut” of oil. In other words, the scarcity-mongers are mistaken.
“A final conclusion to draw from the next oil revolution is a little more existential. This is yet another reminder that what both common sense and expert consensus assure us to be true very often isn’t. It was obvious that efficient markets worked and financial deregulation would stimulate economic growth, until the financial crisis and the subsequent international economic recession. It was equally apparent that we were running out of oil – until we weren’t.”
Quite. In these depressing times, it is easy to miss the positives.
As it is holiday season, this item – via Instapundit – got my attention. It is about why some kinds of travel guides tend to be mealy-mouthed about some of the countries they write about:
“There’s a formula to them: a pro forma acknowledgment of a lack of democracy and freedom followed by exercises in moral equivalence, various contorted attempts to contextualize authoritarianism or atrocities, and scorching attacks on the U.S. foreign policy that precipitated these defensive and desperate actions. Throughout, there is the consistent refrain that economic backwardness should be viewed as cultural authenticity, not to mention an admirable rejection of globalization and American hegemony. The hotel recommendations might be useful, but the guidebooks are clotted with historical revisionism, factual errors, and a toxic combination of Orientalism and pathological self-loathing.”
There is a related point, also. When I occasionally read of how a region or place is “unspoilt”, it often is just an aesthetic comment that area X or Y has not been buggered up by ugly buildings. Fair enough. Even the most ardent defender of laissez-faire does not have to like all the consequences of some buildings. But there is a danger that this can sometimes tip over into a dislike of building and human activity per se. To take one example: I love certain big cities precisely because they are “spoilt” by the energy and sometimes crazy creativity of the people who live in them and build them.
Now that the likes of yours truly are back from holiday to a post-Olympic London, I have been reading about the number of people who noted how quiet London (outside the Games areas) has been. Tranquil streets, empty restaurants, that sort of thing. It appears that the authorities, such as Transport For London, did a “good” job, in a way, in putting the fear of God into the domestic populace. Janet Daley writes:
“What I had not anticipated was that the spectacularly effective campaign of advance warnings and threats to London’s travelling public would cause so much of its working population to abandon the capital. Thus the evacuation of traditionally depressive, harassed, exhausted Londoners made way for the arrival of a lot of rather sweet, smiley people who turned the city into a very jolly and, momentarily, carefree place.”
I am very pleased the event has gone off well. Not least because there were not (unless it has been kept secret) any major security problems at the Games. Lots of sportsmen and women had a grand old time, the capital looked pretty good to outsiders, etc.
The last two weeks does certainly prove that if certain organisations want to convince Londoners that they should get out, they will. Holding the Games in August also helped. And the terrible summer weather leading up to the Games also encouraged a lot of us to hit the airports and railway stations. I may have missed some of the buzz of Olympic London, but the lovely countryside and weather in Southwestern France more than compensated for it.
There is, of course, the matter of the cost of all this. To borrow from Frederic Bastiat, the French economics and legal writer, we can all see the benefits of shiny new stadiums, swimming pools and cycle tracks. That is seen. What is not seen are the things and services that will not be supplied or made due to the taxes and other charges imposed to make the Olympics happen. There are no photos of entrepreneurs whose business plans might be stillborn from such costs, for example. I doubt whether Lord Coe or other Olympic grandees gave much thought to the opportunity costs of such events, or cared. And the insights of Bastiat apply to other “eye-catching” projects: space flights, high speed rail, big aircraft carriers, etc.
Anyway, I am not going to rain on the parade of what appears to have been a successful event. But being the Adam Smith libertarian that I am, it would be remiss not to remind fans of big sporting jamborees that these things have a cost, and the costs will be borne by those quite different, sometimes, from the beneficiaries.
“So the Games have managed to achieve what even Hitler failed to accomplish with the Blitz: the total evacuation of London’s working population. Well, not quite total. There are plenty of poor devils who are still trying to scratch a living in the wasteland of empty restaurants, shops and streets. The trouble is that the the usual customers – the great mass of people who normally commute into central London every day – have been terrorised into staying away by a hugely successful Transport for London promotional campaign.”
Janet Daley, in the Daily Telegraph.
She writes about how so many Londoners have fled the country. I am one of them. More than 7 months ago, dreading what I feared might be the impact of the Games, I booked two weeks’ holiday in southwestern France, staying in the lovely small town of Marseillan, in the Languedoc region (nearest big city is Montpellier). I am actually doing some work down here although I have handed most responsibility to a colleague. My wife and I are having a great time – the weather is glorious without being raspingly hot; the food is amazing and good value; the locals are very pleasant; and last but not least, there is a most gratifying lack of Brits to remind me of home. I do check in on the internet occasionally, but although this might strike some as unsporting, I just haven’t got the “Olympic bug” at all. Yes, I thought parts of the opening ceremony were fun (glad to see Brunel honoured as the great Victorian civil engineer he was), and thought the James Bond routine was hilarious, and was not even all that annoyed about the National Health Service propaganda. (I thought the bit about the Industrial Revolution was actually not bad – all that celebration of carbon emissions and molten steel! But I am just not all that enthused. The greatest sporting festival this year has come and gone (the European football championships), and the Tour de France was also a gloriously unexpected highlight of the year. And as Brian says, there was also the cricket. Always the cricket.
By the way, Bradley Wiggins, winner of the Tour, cycled past where I am now staying, and the locals worship the guy. He has become a bit of a cult in France. They like his character, guts and behaviour.
My blogging output is going to be light for the next 10 days. You see, they sell cheap but excellent red wine here by the litre.
“What I find fascinating is how many intelligent people are willing, even feel urged, to provide intellectual support for a system that is not the result of intellectual discourse but came about – rather non-intellectually – through sheer power politics, opportunism and hubris, and that is evidently failing. Our financial system (or non-system) offers a great example of Nietzsche’s dictum that investigating the true origin and the true motivation behind things most often leads to surprising results. The purpose and the clever design that most people later believe to be behind various institutions are often only projected onto them with hindsight.”
– Detlev Schlichter.
As regular commenter “Laird” said the other day, compared to the chicanery that is modern central banking, the row about the LIBOR business is small beer indeed.
From Foreign Affairs:
“The scandal has sparked calls from politicians, including Mervyn King, the governor of the Bank of England, for stronger regulation of the world’s most powerful banks. But such proposals miss a key point: Price fixing and manipulation are illegal. They have been for a long time. So it is unlikely that saddling financial markets with legal constraints that simply double down on what is already on the books will help. A better solution would go to the heart of the problem. Regulators and market participants should set such benchmark interest rates as Libor in a way that makes them reflect movements in the market, making manipulation impossible.”
“The fundamental principle underlying floating rates is to allow the market to determine borrowing costs. Customers who borrow on a floating-rate basis, if they are sensible, and institutions that loan money on a floating-rate basis, if they are ethical, therefore expect two things from a benchmark interest rate. First, the benchmark should reflect actual conditions in the financial markets. That means no random fluctuations — money costs what it is worth. Second, the benchmark rate should not be easy to manipulate. No rational, informed borrower would borrow money at a variable rate of interest and then empower the lender to determine when and how the interest rate changed in the future.”
This is one of the best and most incisive explanations of what is wrong with the current system of averaging out interbank rates – as done via the British Bankers’ Association – and what needs to be done to avoid a repeat. Refreshingly, the article, written in the sort of publication that policymakers read, does not call for more regulation, which is definitely not what is needed.
The stifling impact of being run by so-called “moderates” continues. On the BBC TV this morning, the programme is leading with the fact that a government finance minister, some hopefully soon-to-be-gone creature called David Gauke, is attacking people who have ever paid a builder, plumber or garage mechanic in cash so as to avoid paying VAT. Mr Gauke told his TV interloctor, in words that may haunt him, that he has never done any such a naughty thing, oh no.
The context for this is that the UK government has recently announced a campaign against what it defines, with worrying vagueness, as “aggressive avoidance” schemes. Not just “avoidance”, which is what happens if you hold a tax-advantaged fund such as a Self Invested Personal Pension, or if you do not smoke (avoiding tobacco duty), or don’t drive (avoiding petrol tax) or drink (etc). No, “bad avoidance” is if you structure your financial affairs in such a way as to pay as little tax as you can do so without actively defrauding anyone. An interesting notion. As we know, the UK comedian Jimmy Carr was recently hit by exposure of his tax-planning, and other celebs and sports folk have sometimes got into similar sorts of arrangements.
In as much as governments need to exist at all – and I am not an anarchist – there is a legitimate argument about the least-bad way to do this, and the simpler and flatter the tax regime is, the better. A huge chunk of this tax planning industry from which people like Jimmy Carr make use would vanish in a puff of smoke if our system was overhauled on the sort of lines recently proposed by the 2020 Tax Commission.
The trouble with the stance taken by Mr Gauke is that he presumes that there is some correct chunk of our wealth to which the State has presumed to take a share, and that any action we take to avoid tax might increase the tax burden paid by our fellow citizens. But what this man seems to ignore is, a), that an economy is not a static pie where my action must negatively affect someone else (that old zero-sum problem again), but an economy is something can grow through mutually beneficial trade, and that that, b), in a tolerably free society, the level of tax that citizens will pay has its limits, even if people don’t go in for some of the more artificial wealth structures to minimise tax (bearing in mind that it costs money to get an accountant/lawyer to set these schemes up).
Also, suppose that, instead of getting a builder into do a bit of work for cash to smarten up my flat or tackle an issue, I try and get a mate around to do the job for me in return for buying him a nice bottle of wine or editing some material for him/her? Is this not also wrong in the eyes of Mr Gauke? I guess it is. Even before I have done anything, the State is saying: “I want a piece of whatever action you engage in”. Taken to extremes, this penalises work over leisure. It is not surprising what the results are.
At root, this is a matter of basic political philosophy. In the main (there are exceptions), the current Conservative Party and its Liberal Democrat coalition partners subscribe to a deeply paternalistic, communitarian outlook of the sort that Barack Obama, in his recent communitarian-leaning “you did not build that” speech, could identify with. This is also a sign of how under Cameron, the Tory party has reverted to the older, more trade-disdaining traditions of old and away from its Thatcherite strains. How’s that working out for us?
People who make a living by getting paid in cash to fix windows, respray cars or mend pipes are not an evil. In the vast majority of cases, they are doing something about which someone like David Gauke, David Cameron or Barack Obama have been ignorant of all their lives: earning a living, and providing people with goods and services in a free market. They might as well try and understand life on Mars. It is shame we can’t send them there.
Update: The Daily Telegraph weighs in. It is not impressed by Gauke.
It is inevitable. The day after Bradley Wiggins (about whom Patrick Crozier wrote here) rode to victory in the Tour de France, becoming the first British winner of this famously brutal event, London’s mayor, Boris Johnson, took hold of this feat, and the upcoming Olympics, to make some points about what might appear to be a very different issue: the UK economy:
“As you listen, you realise that these performances were the result not just of physical genius, but also of colossal intellectual and emotional effort — years of self-discipline. The Olympics, in other words, is about character. It’s about the will. Of course, as Baron de Coubertin was at pains to point out, it is not all about winning. But if you want to win, then you need to work. That is the basic message of the Olympics.”
There is a problem here. Sport – so long as it does not involve cheating the rules (key qualification) is a strict meritocracy, and effort and reward hopefully are closely aligned, although that doesn’t allow for the blessings of inborn physical and mental capabilities, nor that of simple luck. There is, in my view, a danger in supposing that the qualities that are good in sport can be easily carried across into other fields. One thing that Boris J. probably understands better than some of his fellow Conservatives is that with sport, it is, at least as far as competitors are concerned, zero sum. If Bradley Wiggins wins the Tour, that means someone else doesn’t, and so on. It is not of course zero sum for the spectators and fans who get a vicarious sense of enjoyment from watching it all. But in a free economy, there is a positive-sum game: everyone “wins” as the economic pie expands as more efficient and effective ways of delivering goods and services are arrived at. And to do that, requires, not some sort of endless preaching about the need for hard work and conquest of pain, but about allowing free men and women to interact how they want, subject to as few impediments as possible from the State.
The late Robert Nozick once criticized the notion that inheritance of wealth is unfair by pointing to how people who say this often liken their ideal society to a sort of athletics race, where there is a track of fixed length, a fixed starting point and end, and a set quantity of runners seeking to acquire a pre-determined prize. A free, open society is very different. It is, as he said in Anarchy, State and Utopia, about people exchanging different things with one another without worrying about any set starting point or finishing line.
Like Boris Johnson, I agree we can and should be inspired by the courage and determination of people such as Bradley Wiggins and other athletes. Let’s not, however, confuse a sadistic 3-week peloton through the French countryside with what needs to happen to revive an over-regulated and over-taxed economy.
In the meantime, well done to Wiggins. Fantastic achievement, and he appears to be a likeable bloke as well. I hope he can cope with some of the fame and hangers-on who will be attracted to his presumed new wealth.
“Obama also wishes us to believe that, because successful producers learned something from government teachers, used government roads and bridges, employed government research, and the like, this means they don’t really own their success or wealth. Rational Americans know full well that the government funds such things by forcibly confiscating the wealth of producers. Rational Americans also know that a bum is as free to use a government bridge as is a successful business owner, but the business owner chose to apply his intelligence and work hard to build something great.”
– Craig Biddle.
In some ways, Obama’s assertion that we don’t really deserve credit for, or earn, what we produce because of such factors is a bit like the idea that the guard-dog that protects our house owns it, not the owner. I get the impression that Obama’s comments are causing him quite a lot of damage, and I hope he continues to be pounded for them.
While the weather in the UK has been, with barely a break, a miserable wet time resembling one of those bits of the Old Testament where God gets a bit pissed off with His Creation, it has been stinking hot in some other countries, notably the wheat-growing parts of the US. Hence, all kinds of grim predictions of shortages, and ensuing higher prices for bread and other foods, as reported by Reuters.
But there is another factor besides the weather – deliberate government policy concerning biofuels. Here is blogger Bishop Hill on the matter:
“I’m sure that people who can no longer afford a loaf of bread will be much reassured by the fact that the UK government is discussing flexing their biofuels mandates.”
Of course, the idea that misguided environmental ideas might make poor people even poorer is a notion that does not fit with the conventional narrative from our political class. I doubt that our own benighted Prime Minister, David Cameron, gives this much thought, or if he does, evades the implications thereof. One of the biggest scandals of our time, in my view, is not private banks cooking up “LIBOR”, or MPs fiddling their expenses, but the fact that a mistaken or overwrought theory about climate change was used to justify loading extra costs on the global economy and those least able to bear it.
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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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