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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.
This item at the Harry’s Place blog, concerning the Guardian newspaper’s coverage of issues such as Israel and Islamists, needs to get the widest possible attention:
“If Guardian journalists are twitchy about what is happening to their newspaper, they have only themselves to blame. The Jews were, as always, the canary in the coal mine. When those journalists stayed silent, either because they didn’t think they could say anything, or because they didn’t care, or even because they partly agreed, they allowed a culture of zaniness and extremism to take root at the newspaper. Now, the guns have been turned on them, over Syria and Middle East reporting generally, and it may well be too late for them to stop it. The Indymediaisation of The Guardian is likely spread further, across its other departments, as experts leave and are replaced by “Open Journalism” monomaniacs.”
“It is the job of economists to point out trade-offs; it is the job of politicians and planners to deny that trade-offs exist.”
– William Easterly, The White Man’s Burden, page 256.
Here is a terrific piece on the problems posed by the mounting costs of funding retirement, and the tax implications thereof, from Reason’s Nick Gillespie. It is obviously written from a US perspective but as always, the lessons are broader than that.
I particularly liked how he lampoons old Baby Boomers calling for a return of the draft. That bad idea never seems to entirely die off.
“We’d rather like people not to live on flood plains. Because, you know, their existence is evidence that that’s where it floods sometimes. Not being able to insure your house against floods if you live on a flood plain is what is known, in technical language, as a “fucking clue” that perhaps you shouldn’t be living there. Surely to God at least one person in government knows someone at Lloyds of London?”
– Tim Worstall. I love it when he gets justifiably riled.
“The assumption of natural rights expressed in the Declaration of Independence can be summed up by the following proposition: “first comes rights, then comes government.” According to this view: (1) the rights of individuals do not originate with any government, but preexist its formation; (2) The protection of these rights is the first duty of government; and (3) Even after government is formed, these rights provide a standard by which its performance is measured and, in extreme cases, its systemic failure to protect rights — or its systematic violation of rights — can justify its alteration or abolition; (4) At least some of these rights are so fundamental that they are “inalienable,” meaning they are so intimately connected to one’s nature as a human being that they cannot be transferred to another even if one consents to do so. This is powerful stuff.”
– Randy Barnett.
“In order to punish Barclays further, they should have to start life again as a third division Scottish football club.”
Mark Littlewood, boss of the Institute of Economic Affairs, in a private communication via Facebook. It is so good that I don’t think he’ll mind me quoting him here.
He is talking about the resignation, announced today, of Bob Diamond as CEO of Barclays. That bank has been fined a total of £290 million by US and UK authorities for manipulating the inter-bank interest rates known as LIBOR. Criminal prosecutions are high possible and the net could widen very far indeed.
Barclays is one of those UK banks – HSBC being the other big high street one – that did not receive, nor ask for, bailouts by the UK taxpayer. However, that bank, like all the rest, did benefit from the privilege of being able to get access to cheap Bank of England funding; and it also benefited from state-backed guarantees. The point cannot be made too often: we don’t have a proper capitalist banking system but at best a hybrid. But it also needs to be recognised that even in a world of total laissez faire and no funny fiat money, there might still be market conventions for setting a benchmark reference rate for interest rates between banks, just as there is a daily “fix” for the gold price in the London spot gold market. Such market benchmarks arise, like a sort of Hayekian spontaneous order, because they are useful for other economic actors in pricing products of their own.
However, when a bank or other institution fiddles the prices submitted for these benchmarks, it erodes confidence in the system and the reputation of the miscreant will be badly damaged. In a crude sort of way, what has happened is a good sign that organisations which screw up suffer.
Update: Guido Fawkes weighs in, and points out that the manipulation of interest rates has also been government policy for years.
There might be a tendency, I think, among some world-weary types to say that this whole “Fast and Furious” disaster now unravelling is nothing more than the US equivalent of the sort of “Westminster Village” obsessions that we Brits got engrossed over more than a year ago. Nothing much to see here, please move along, etc. But I don’t see it that way. The use of executive privilege to squash oversight of key decisions made by this administration seems to be a serious matter that ought to concern the wider public, not least as people got killed and hurt.
Jennifer Rubin weighs in on the subject of the lamentable US Attorney General, Eric Holder:
“If he were a first-year law student asked to explain how the president could refuse to allow House oversight on a botched operation in which Americans and Mexicans died and the administration has twice had to cop to providing erroneous information to Congress, Eric Holder’s letter would get an “F.” He doesn’t set out the nature of the document being withheld, the type of privilege being asserted, or the argument as to why it supersedes the right of Congress to oversee executive branch misconduct. Congress is certainly within it rights to hold him in contempt. But really the president should can Holder.”
Bear in mind this appeared in the Washington Post, the same newspaper that we associate with the Watergate scandal, and hardly a bastion of the “vast rightwing conspiracy”.
Here is a great video featuring “Skeptical Environmentalist” Bjorn Lomborg, talking to John Tierney, . Lomborg discusses his views about how any debate on improving lives of the poor around the world requires us to understand that resources are scarce, and that being obsessed by “sexy”, attention-grabbing issues means we ignore the less glamorous, but often far more severe issues. Of course, the media and political world tends to push attention towards the “eye-catching initiatives” (to use Tony Blair’s formulation). But that doesn’t mean we have to settle for this. Lomborg is terrific. No wonder he drives deep Greens nuts.
I recommend pretty much all his works, especially his book, Cool It.
Here is a brief comment I left over at Tim Worstall’s blog, regarding fractional reserve banking and supposed journalistic illiteracy about said:
“I can see why smart people are dubious about fractional reserve banking. The whole “maturity transformation” line that defenders of FRB come up with only works if you are prepared to take the risk that, in the event of a crisis, you won’t be able to get your money out of a bank when you want it. That is why, in a real free market, not the rigged charade we have now, FRBs would have to be clearly advertised as such, and without the moral hazard-machines of state deposit insurance and a central bank acting as lender of last resort, printer of funny money, etc. In such a laissez faire world, FRB might persist, but it would be a lot more restricted than now, and its capacity for causing booms and busts reduced. Like I say, it should not be illegal so long as everyone knows what it is.”
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