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]
Those were reportedly the last words of General John Sedgwick at the Battle of Spotsylvania Court House in the American Civil War. (Wikipedia boringly says that he did complete the sentence. Just.)
General Sedgwick was a brave man to stride along the front like that. He sought to encourage his men, some of whom had been seen to flinch as the Confederate bullets landed all around.
I hope our Scottish readers will forgive me if I say that, though all the hearts that beat under Scottish skies are brave, not all of them are quite as brave as General Sedgwick. But some are:
“Deficits are nothing to be afraid of”, writes Jim Byrne for Bylines Scotland. You see, taxes don’t fund spending and a sovereign government can create new money to pay off its debts whenever it likes and so all Scotland needs to do make its deficit disappear is declare independence. This is called “Modern Monetary Theory”. Mr Byrne posts a link to a 14-page Bank of England document that, he says, shows that the Bank agrees with him. Which does make one wonder why the Bank doesn’t just declare “the deficit is nothing to be afraid of, let the rejoicing commence”. Unless it’s a case of “Gary, no”?
I am saddened to read that Nigel Lawson, former UK Chancellor of the Exchequer, and an articulate advocate of the UK’s departure from the EU (and also a rigorous debunker of global warming catastrophism), has died at the grand age of 91. My condolences to his family and friends.
It is ironic that he fell out with Mrs Thatcher in the late 80s over the issue of the UK joining the Exchange Rate Mechanism in Europe. He was opposed to the euro, but saw ERM entry as a necessary way for the UK to try and control inflation. In that sense he was a fixed-exchange rate man, and in the 19th century he’d have been a Gold Standard defender, I suspect. In the end, he was at one with Mrs T. on the dangers of a centralising Europe. And of course, in his time at 11 Downing Street, he cut top rates of tax and simplified the system dramatically. Alas, his successors haven’t continued that trend. Lawson was also the intellectual driving force behind privatisation of state-owned businesses, and while arguably not enough was done to promote competition, the overall benefit in my view was considerable.
His speech explaining why the UK had to leave the EU remains, in my mind, one of the most brilliant and succinct explanations for why this was the right course. He focused, rightly, on the issues of democratic accountability and freedom.
Right to the very end, his mind was as sharp as those of all too many in power are blunt.
As a “lukewarmer”, I am more of a believer in climate change than many here. One thing that pulls me towards scepticism is the habitually dishonest language used by advocates of measures against climate change. Take this BBC article: “Climate change: UK risks losing investment in net-zero race, MPs warn”. It says,
The government is set to announce its revised energy strategy on Thursday.
It argues the UK is a “world-leader” in working towards net-zero.
But cross-party MPs fear investors – and jobs – could move elsewhere if the strategy is not ambitious enough.
The BBC article makes me want to riff on Mary McCarthy’s famous quip about Lillian Hellman – every word in it is a lie, including ‘and’ and ‘the’.
In particular, the words “race”, “investment” and “jobs” are all used in a sense that means the opposite of their usual meanings. “Investment” means something you buy in the hope that its price will rise so that you can sell it later as a profit. The “investment” the article talks about is simply spending. Argue if you wish that it is justified spending, but that doesn’t make it investment.
The article, taking its tone from the government, talks about “green jobs” as if they are a good thing. As Tim Worstall often points out, all jobs are a cost not a benefit. Perhaps a necessary cost, but a cost. And the purest, costliest, unbeneficialliest jobs of all are jobs that are created solely to comply with government regulations. Not unexpectedly, the people who get these make-work jobs like having them, because they get paid. But the money to pay their wages has to come from somewhere. It comes from (a) taxes, i.e. making everyone a little bit poorer, and (b) companies diverting money that could have been truly invested in making or doing things that people actually wanted made or done (which would have created genuine new jobs) into the hamster-wheel of fulfilling green regulations, filling in government forms to say that they have done so, paying to be trained to fill out the forms, paying protection money to Green organisations to get a little green smiley logo saying they comply, and so on and on and on.
What’s wrong of the word “race” in the phrase “net-zero race”? This word is dishonest because a race is meant to indicate a competition in which some prize or benefit is won by whoever is fastest – and in which said prize or benefit goes in lesser degree or not at all to the other competitors. In this case “the race to net-zero” is a race to lose benefits, a race in which the prize is being hobbled. That is still true even if one accepts the necessity of being hobbled. The choice of the US to hobble itself first by passing Biden’s “Inflation Reduction Act” (another example of dishonest language) hands a competitive advantage to the UK, so long as we do not do likewise.
As to why the race to net zero is a racist concept, only a racist needs such an obvious thing explained.
“A bank without a chief risk officer is a bit like a football team without a left tackle. It’s not the sexiest position on the field, and most fans couldn’t recognize him without a helmet, but what the left tackle does is crucial. He’s the guy protecting the quarterback’s blind side when a 250-pound pass rusher is trying to pulverize him. Silicon Valley Bank not having a chief risk officer for a brutal year in tech was the equivalent of that left tackle walking off the field during a blitz.”
– Ben Cohen, Wall Street Journal ($). He is reflecting on how Silicon Valley Bank did not have a chief risk officer in place for eight months. The reason why classical liberals should focus on this aspect of the bank’s demise is because at the moment there are calls for yet more rules and regulations on banks. But the problem in my view is that there are plenty of rules, but they aren’t often enforced consistently, or intelligently. (Apologies to non-followers of NFL football, but I think you get the point of it.)
But Cohen adds this important caveat, which is another twist on the whole “moral hazard” argument that we hear about a lot when banks fail: “The existence of a chief risk officer created the appearance of proper oversight and satisfied regulators, but having someone to police risk meant the traders actually taking those risks might have felt they didn’t have to be so vigilant.”
Hmm. So in the end, having a CRO in place might, ironically, make a bank even more cocky because of the assumption that there is a person there to keep everyone on-point.
“Deposit insurance is a cancer at the heart of the capitalist system, destroying its ethical foundations. Rich depositors should not be able to secure returns, in the good times, for investing in fundamentally riskbearing activities (which fractional reserve deposits are, by their nature) but then be bailed out by the government when times are tougher. And banks are the largest allocators of capital in the economy – so this fundamental injustice gets spread across the entire economic system.”
A problem in much of the West is that the large investors who have been bailed out, such as those who did so via Silicon Valley Bank, or Credit Suisse, etc, is that they tend to be politically quite powerful. A lot of the north Californian business class, for instance. And it tends to vote Democratic.
Far from robbing anybody of surplus value, Capitalism is like a benevolent ancestor who, instead of consuming all the port that he could get – as some ancestors did – laid down an enormous cellar of it for the use of future generations. And every one who is now alive in this country, and millions abroad likewise, are now able to help themselves to bottles of the grand old vintage then laid down and now ready for us, crusted, fruity, full of ripe flavour and rich bouquet. For none of us could have been so well off, and many of us could not have been born at all, if Capitalism had not done this deed, and done it judiciously and well.
– Hartley Withers, The Case for Capitalism, 1920 p239. Withers was editor of the Economist between 1916 and 1921. It’s a good analogy, or ought to be. It ought to make you think of science, shipping, railways, hospitals, educational institutions. Unfortunately, in my case it – especially the “rich bouquet” bit – makes me think of sewers.
The idea of creative destruction in capitalism is frequently bandied around, particularly among techies, but rarely is it ever allowed to work its magic in today’s world, where seemingly everyone is looking for a handout, from the biggest auto companies to the tiny little community coffee bar at the end of the street, and from the wealthiest financier to the poorest welfare claimant.
– Jeremy Warner, Daily Telegraph (£). The title of his article, which is about the federal government protection of depositors in Silicon Valley Bank, is “Capitalism is dead unless institutions that take bad bets are allowed to fail, nobody ever learns the lessons”.
But we shouldn’t be surprised by these occasional eruptions. First, banking is a confidence game. We’ve decided as a species that it’s safer to keep our money in a bank rather than say, at home, in our mattresses. Maybe it’s the confidence inspired by the marble bank façade, or the huge, 10-foot-thick steel door to the vault over in the corner. But here’s the fallacy in that logic: in our fractional banking system, one in which banks are only required to hold a fraction of their deposits as reserves, the money—our money—that we think is safe and secure is not even at the bank. And whether it is safe and secure is a matter of a myriad of factors that a depositor has nothing to do with, and no control over.
“In other words, in our fractional banking system, the mirage of safety and security is a clever and extremely persuasive narrative created to get us all to put our money in a bank thinking that a bank is the safest place to put our money. Even the banks that we perceived to be the most august—Lehman Brothers, Merrill Lynch, Bear Stearns—turned out to be elaborate and highly sophisticated houses of cards.
– William D Cohan, a writer at the “Puck” collection of columnists on various financial matters. (It is behind a registration wall, and free for seven days.)
“Government subsidies are never free, and now we are learning the price U.S. semiconductor firms and others will pay for signing on to President Biden’s industrial policy. They will become the indentured servants of progressive social policy.”
Democrats last year snookered Republicans into passing their $280 billion Chips Act, which includes $39 billion in direct financial aid for chip makers and a 25% investment tax credit. Republicans hoped this would satisfy West Virginia Sen. Joe Manchin, but after Chips passed he quickly flipped and endorsed the Inflation Reduction Act.
Now the Administration is using the semiconductor subsidies to impose much of the social policy that was in the failed Build Back Better bill. On Tuesday Commerce Secretary Gina Raimondo rolled out the new rules for chip makers and summed up the politics to the New York Times: “If Congress wasn’t going to do what they should have done, we’re going to do it in implementation” of the subsidies.
For a fascinating insight into the arguments and geopolitical tensions around silicon chips (and the role of Taiwan), I recommend Chip Wars, by Chris Miller.
Every time I look at Joe Biden and his allies, and particularly at Biden, a machine politician with beady little eyes and wandering hands, I think of an Ayn Rand villain.
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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