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I recently recorded a conversation with Toby Baxendale, who owns and runs a fish distribution empire, and who is the founder of the Cobden Centre. Listen to it by clicking here. Our chat lasted about fifty minutes and a lot of interesting biographical and intellectual ground is covered. For the benefit of those for whom that is rather a long time to spend listening to talk, I have written at greater length about listening to and learning about this interesting and formidable man here. November 20th, 2009 | 4 comments - (Comments are closed)
 Via the Cobden Centre, a relatively new think tank that focuses on banking and money from the “Austrian” point of view, here is a nice article by James Tyler. He sets out how to avoid past problems and what to do about banking and money. I still think that fractional reserve banking, so long as it is openly stated and so long as legal tender laws are scrapped, is not necessarily an evil. If a person deposits money in an FRB that advertises itself as such and if he takes out commercial insurance to cover a potential disaster, then in a free market based on consent, I am not sure that FRB should be made illegal. For sure, a bank that claimed to be a 100% reserve bank that was in fact, not fully covered, should be prosecuted for running a fraudulent business. But that is simply a case of obtaining money by deception, an offence covered in existing law. As is so often the case, I think that some of our current woes could be ameliorated, if not solved, if we enforced the basic Common Law of this realm rather than endlessly creating new rules instead. But then I guess that would give politicians nothing much to do, would it? November 18th, 2009 | 30 comments - (Comments are closed)
So how is Zimbabwe doing these days? According to this article, linked to yesterday by Patrick Crozier, things are actually improving. Patrick quotes this bit:
While reading this article, I could not shake the feeling that I was really reading a piece of libertarian science fiction. Could they really have done anything so very sensible, and could things really be improving so definitely? The piece does appear to be genuine, so far as I can tell, but if it turns out to be fantasy-fiction, this paragraph will get me off the credulity hook. File under maybe true but maybe too good to be true. Meanwhile, if the piece really is true, the best bit of all in it is that there is now no “lender of last resort” in Zimbabwe. Could it be that libertarian economic policy – in particular libertarian banking policy – is about to get a serious test, which it will pass, and hence another serious showcase, highly pertinent given the world’s current banking woes, to educate the world with? How will socialism and state-centralism get the credit for that I wonder? If genuine, this piece reminds me of a vivid British recollection from way back. Someone on the telly asked a City commentator, just after Black Wednesday (the day in 1992 when John Major’s economic policies collapsed in ruins), what the prospects were now for the British economy. Well, he said, now that the government has not got a policy, rather good. November 12th, 2009 | 6 comments - (Comments are closed)
I find this horribly convincing:
To me the moral of the last couple of decades of world economic history is clear. The world was indeed somewhat released from the dead hand of politics. In particular, the making of stuff was released into the wild. Consequently, during the last two decades, stuff has just got better and better. But the world’s financial systems remained under rigid political control, everywhere. Stuff-making roared ahead. But then the financial systems started collapsing, and China looks like being next. Managed capitalism has indeed only been a very partial success, but which word in that phrase will get the blame? I say that the stuff-makers, the truly honest capitalists of the last two decades, should not be blamed. They did, and continue to do, a fabulous job. On the contrary, the politician/financiers should, instead of trying to shift the blame and the burden onto them, be looking to the stuff-makers for lessons in how to make an honest living. November 11th, 2009 | 26 comments - (Comments are closed)
The predicted insanity of “quantitative easing” (i.e. re-inflating the bubble) is laid bare:
I would quite like to see the people responsible for one of the greatest rolling acts of theft in recent history hanging from lampposts. Bernie Madoff was a minor league player by comparison. November 2nd, 2009 | 13 comments - (Comments are closed)
So asks John McWhorter:
See also this article about Indians who write their novels in English rather than in one of the local Indian languages, partly because they just do, and partly in order to increase their potential readership around the world. The piece is by Chandrahas Choudhury, himself the author of a novel in English. He also blogs. Both pieces were recently linked to by Arts & Letters Daily, to whom thanks. I suppose a danger of everyone on earth speaking the same language, as was explained in The Hitchhiker’s Guide to the Galaxy, is that we would all of us then understand each other’s insults.
But this is to assume that hostility causes wars. I think it is at least as true to say that wars cause hostility. Quite aside from the rights and wrongs of English conquering everyone and everything, there is the intriguing question of whether it in fact will so triumph, or whether any other potential universal language, like Spanish or Chinese, will triumph, in the nearish future. Perhaps English will triumph, but in the process it may itself fragment. If one language does triumph, it may well be English, but not necessarily English as I know it. October 30th, 2009 | 89 comments - (Comments are closed)
Thomas Woods, Meltdown, A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse. Page 84. This book is full of great passages like this. I have already quoted a nice line from Mr Woods mocking the contention that the enormous expansion of government spending in WW2 helped “solve” the Great Depression. Incredibly, there were people who actually defended this absurd idea on our comment boards. It never fails to amaze me that people overlook a basic fact of economic life: we work to produce stuff that people want to consume. The kind of state domination of a country during war, with its rationing, government direction of labour, and of course, mass conscription, hardly sounds like the sort of policy that anyone interested in increased prosperity should favour. There is one point where I disagree with Mr Woods. He says the veneration of Keynes is inexplicable. It is in fact pretty easy to understand: he had a sort of superficial plausibility, and of course his ideas were meat and drink to politicians looking for intellectual cover to expand their powers. Even so, I do kind of wonder if Keynes would be embarrassed by some of the people who claim his name as justification for their views. October 30th, 2009 | 13 comments - (Comments are closed)
Yesterday I recorded a conversation with Paul Marks, a regular contributor here. My purpose was to enable all who are curious about who and what Paul Marks is to learn more. And the best way to learn more about Paul Marks is to listen to him talk not about himself (which we only did for about ten seconds) but about some of the things that he has been thinking about in recent years and in recent months. In recent years, Paul has been brooding on the impending financial disaster which he saw coming. You know, the one that “nobody saw coming”. Well, he did. How come? More recently he has been pondering the Marxist background and foreground of US President Barack Obama. What, Barack Obama as bad as Ho Chi Minh? Yes, he replied. He didn’t just say it, he explained it and he justified it. As I said at the end of the convsersation itself, and as I repeated in the posting I did about the conversation on my personal blog soon after it had been recorded, I think it went well. Since then, I have listened to it right through again, and I remain very content with it. If, on the basis of this plug, you feel inclined to have a listen yourself, this will occupy somewhat under half and hour of your time. Enjoy. October 28th, 2009 | 51 comments - (Comments are closed)
Following on from this post about how technology can boost some businesses but later turn them over, I thought about a specific type of business that I use, as a result of one of the comments. Namely, the optician. I am one of those folk who wear glasses pretty much all day and I do not like bothering with contact lenses or laser eye surgery. I have a slight stigmatism in my right eye and contact lenses for such a thing are very pricey. Since I was a young boy I have worn specs, and after the usual phase of being teased as a “four-eyes”, I got over that, and decided, “To hell with it, I am going to go for the intelligent preppy guy look instead”. (It worked on the ladies, I find. Come to that, I find some women in glasses incredibly attractive). But will modern technology and things like the internet put some opticians out of business? Possibly. If you know your prescription and the type of lenses you need, then I suppose that if you see a frame that suits, you can submit the order, and assuming the postal system is working, get the specs in a few days. In my case, though, I actually like to browse through a number of different frames and try them on first. There does not seem to be a substitute for doing it in the flesh, so to speak. It is the same, surely, for buying some kind of clothes, even off-the-peg ones where you know your size. Sometimes there is just no getting around the need to go to a store, go to the changing room and try stuff on. October 26th, 2009 | 14 comments - (Comments are closed)
Patrick Crozier recently did a podcast interview with our own Michael Jennings, on the subject of businesses that are now failing, which I heartily recommend. Michael zeroed in, in particular, on bookshops, spectacles, newspapers and – very topically for today (although the conversation itself took place a short while ago) – postal services. A particular point which Michael emphasised was how the same technology can start out by helping a particular business, but then turn round and smack it in the vital organs. The dead tree press, for instance, thanks to the lead given by men like Rupert Murdoch, at first thrived on computer technology. Now look at it. Computer technology also started out by making postal communication a better deal rather than a worse one. Junk mail, without the e- at the front, was, after all, an early bastard child of computers. And postal services the world over, like most businesses, have enthusiastically applied computer technology to their various activities, making old-school physical communication that much quicker and cheaper and thus more attractive to users than it would otherwise have been. But again, now look at the predicament of post offices, and in particular, today of all days, our own Royal Mail. Note how easily the Royal Mail itself is managing to communicate with us all, despite not being able to send out any letters. I found particularly interesting what Michael said about the book-selling trade. Once again, the same pattern repeats itself. Early computer technology helps the old-school businesses, in this case the big book-selling chain stores like Borders, by making them more organised. But the big Borders expansion has now gone into reverse, with, for instance, the Oxford Street, London, manifestation of it having just now closed. Book selling works well on the internet because books are a standard product that you don’t necessarily need to smell, fondle, weigh in your hand, and so on, like you might want to do with something like a camera or a laptop computer. But a product doesn’t have to be generic and standardised to work well as an internet purchase. It just has to be easy to describe with complete accuracy. Most pairs of spectacles are a bespoke product. You just have to know exactly what you want. But this is doable. So high street opticians are a good candidate for execution any year now. I am sure that the Samizdata commentariat will be able to suggest more candidates for imminent death. Patrick and Michael ended their conversation by agreeing that they didn’t think that the bad economic conditions we’ve been having lately are going to go away any time soon, which means, as Michael pointed out, that people are not going to stop being highly price-conscious, which is one of the big drivers of computerisation and internet-isation, and failure for all the businesses that can’t adapt to these processes. I’ll end this by recycling an interesting comment that Michael has just added to Patrick’s posting:
Like I say, recommended. October 23rd, 2009 | 16 comments - (Comments are closed)
“There is no real evidence that any fewer UK banks would have gone bust had this separation been in place. It was not proprietary trading that brought down HBOS, it was bad lending to commercial property. Northern Rock, Bradford and Bingley and the Dunfermline did not own investment banks. RBS was brought to its knees as a result of a multitude of bad lending decisions, the over-priced takeover of ABN Amro and vast holdings of dodgy “assets”; its collapse was not caused by a giant investment banking bet gone wrong. In the US, it is likely that Citigroup would have required a bailout even had it not owned an investment bank. Generally, the same is true of all of virtually all the recipients of Tarp funds.” – Allister Heath, arguing against the idea, floated the other day by the Bank of England governor, that governments should force banks to split off their supposedly high-risk investment banking arms. Of course, with the “too big to fail” doctrine now more or less entrenched, the danger is that politicians will feel – with some justification, arguably – that they do not want taxpayers to be held to ransom by the threat of having to bail out huge firms, so the “solution” is to prevent banks being so big in the first place. My own preference is that all state-backed deposit protection should be abolished, so that any bank operating on a fractional reserve basis would have to take its chances in a free market, with the only deposit protection coming from private insurance. But in the current policymaking environment, that does not appear very likely or politically palatable. But sooner or later, the idea of taxpayers’ underwriting the losses of FRB banks has to be confronted. October 22nd, 2009 | 16 comments - (Comments are closed)
Nichola Pease, a top City executive, caused a stir last week when she said that state-enforced maternity leave “rights” for women – and for that matter, paternity leave – was a cost that had a bad consequence. If you tell a company that it must pay a woman her full salary for a year while she is not working and raising her child, say, then, other things being equal, fewer women will be employed in the first place, however hard one tries to enforce so-called equal opportunity hiring practices. This is a simple fact. If you raise the cost to a company of employing a person or increase the risk that employing a woman will be more expensive than employing a man, say, then fewer women will be employed. It is a fact as undeniable as a the laws of gravity. Unfortunately, one of the driving characteristics of many politicians down the ages is a petulant hatred of such facts, and a desire that 2+2 could equal five rather than four. Consider this reaction to Ms Pease’s comments by a Labour MP. It is not so much an argument as a tantrum:
In other words, a City executive has said something that this MP considers to be unsayable. There is no argument given, no attempt to explain how driving up costs will not have an adverse result. End of discussion. What needs to be pointed out is that every time the government creates some new “right” to such things, such as paid long holidays, long periods of paid leave for child-rearing, or whatever, there is a cost of some kind, that is borne by someone, often those more vulnerable than the group intended for the original benefit. The honest answer is for such MPs to openly admit as much rather than to pretend otherwise. For example, it would be refreshing if defenders of minimum wage laws could state that they prefer a bit more unemployment to the sight of people working on very low wages. Of course the argument is still bad and involves coercively arranging affairs to benefit some groups at the expense of others, but it would at least be preferable to what we usually get. October 17th, 2009 | 23 comments - (Comments are closed)
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