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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A few days back, I pointed out what a collection of dishonest, inaccurate drivel was contained within Naomi Klein’s recent book, in which she wrongly accused the late Milton Friedman of, among other things, supporting the invasion of Iraq (he opposed it, as a cursory Google search could have shown her). Jonathan Chait, of The New Republic, a left-leaning US publication, also stamps hard on the woman.
Now, I might disagree with the late Professor Friedman about the rights and wrongs of invading Iraq but what interests me is why some people on the left, and the right for that matter, get themselves so confused about what the likes of Milton Friedman were about. And yet his views are hidden in plain sight, or not hidden at all. He was, in the best sense of the word, a liberal. He opposed the War on Drugs. He opposed military conscription. (Does Klein?). He thought sexual relations between adults was no business of government. He opposed censorship. He opposed robbing the poor of their savings via inflation. He opposed trade union closed shops as injurious to the non-unionised worker. He opposed exchange controls and countless other controls on our lives, of all kinds. He supported school vouchers as beneficial for the children of the poor and politically overlooked. Being the son of poor Jewish immigrants, Professor Friedman was a classic example of the American Dream. His influence on American public life, and the wider world of ideas, was and still is immense.
At some gut, non-intellectual level, Ms Klein knows this. So instead of wrestling with such ideas, she has to create this conspiracy-theory: that free market ideas depend on there being brutal shock events to succeed. Really? Now, it may be true that crises such as hit Britain in the late 1970s may sweep pro-market governments to power, but there is nothing pre-ordained about this. Instead of a Maggie, we could quite easily have elected an extreme socialist government dedicated to total state central planning, as has indeed happened before. Wars and recessions are typically no friend of small government, or of the open society in general.
Ms Klein is a moron. The smarter parts of the left are starting to notice.
I am currently watching the head of Equitable Life, the UK life insurer that made massive losses a few years ago, demanding that you and I, the UK taxpayer, put our hands in our pockets to compensate EL’s policyholders for their losses. They are complaining that mistakes taken by government caused many of the problems it suffered.
Leaving aside the ins and outs of the case, in general principle, I think it is outrageous that anyone claiming to be a senior manager of a commercial business like Equitable Life should have the brass neck to demand that governments, ie, taxpayers, should bail them out. Yes, some of the rule changes made by governments can harm a business – the tax changes on pensions by Gordon Brown in the late 1990s are a classic case in point. There may, as a result, be something to be said for demanding repayment of taxes wrongly levied on a company, for example. But why should a taxpayer, say, who has no likelihood of a decent private sector pension, be taxed to save the blushes of business executives on six-figure salaries or affluent policyholders who have lost a portion of their pensions? There seems to be no awareness of the perverse, and often regressive, redistribution of wealth that is entailed when these demands for compensation emerge.
It is true that Equitable Life has done quite a bit to honour some of its debts. However, asking the UK general public to put right the rest of the mess is a step too far. And there is another reason for objecting to such corporate welfare, since every time taxpayers foot the bill for another financial Snafu, it creates a fresh moral hazard, and encourages financially inept firms to imagine that if anything goes seriously wrong, the taxpayer will put everything right.
At a time when the credit/money bubble financial institutions are in crises the Economist chooses to lead with a story on Mr Cameron – the leader of the British Conservative party. I can not claim to have read the story as I do not find Mr Cameron very interesting – at least compared to other matters. And, as I am British and have been an active member of the Conservative party since the end of the 1970’s, if he was of such great interest to anyone (other than his family and friends) it would be surely be me.
In case anyone makes the defence that the financial crises was not known at the time when the Economist went to press…
Well the absurd government created Freddie Mac and Fannie Mae had not lost 50% of their stock market value when the Economist went to press – but their problems were obvious, as were the problems of the compassionate lender to the poor (always run a mile from a company that says it is in business to help the poor) Indybank of California, the run on that enterprise was well under way.
The people at the Economist could have made some reasonable predictions about the general financial situation, but they did not – or at least did not lead with them. I will make the prediction now that the the gutless Bush Administration will not order the arrest of the corrupt Mr Johnson (the ex head of Fannie Mae and leading Democrat) as this would upset his friends, such as Senators Obama and Durbin and Congressman Barney Frank – and we must not upset these upstanding individuals…
…Any more than we must upset Speaker Nancy Pelosi by having a Presidential press conference asking people to telephone her to ask why she will not allow a vote in Congress on whether or not to allow more drilling for oil at a time of record fuel prices – although it is fine for Speaker Pelosi to have a press conference telling everyone to telephone the President Bush to blame him for high fuel prices.
Of course the Economist did have other stuff in it:
A brief look, thanks to the library, showed an article sneering at Governor Bobby Jindal (the upcoming Republican and someone the Economist shows signs of fearing) and another puff piece about the all wise Senator Obama – this one claiming that his cynical habit of saying anything to get elected (even, supposedly, reversing positions he has held all his life – well reversing them till after the election) is a good thing, and pointing to his economic advisers as the height of “sensibleness”.
No doubt they will prove about as sensible as the fanatical collectivist Paul Krugman – a man the Economist long favoured.
I could go on, for example examining their obituary of the late Senator Richard Helms and showing how the obituary shows the Economist writers do not understand the nature or effects of the 1964 Civil Rights Act, but I will stop here.
Anyone who is still buying the Economist is beyond rational argument.
Apparently, the humourless twerps who lead many of the world’s main industrial nations got a touch of the vapours over these parting remarks from the President as he left the G8 cant-fest in Japan:
The American leader, who has been condemned throughout his presidency for failing to tackle climate change, ended a private meeting with the words: “Goodbye from the world’s biggest polluter.”
He then punched the air while grinning widely, as the rest of those present including Gordon Brown and Nicolas Sarkozy looked on in shock.
Oh please. Mr Bush, who I imagine is fed up to the back teeth at the preening hypocrisy, moral posturing and downright dishonesty of the Green lobby, has clearly decided that the US is not going to be ashamed of being an industrial nation. The constant calls by various environmental groups for the US and other major states to slash CO2 emmissions by more than a half by tomorrrow afternoon or whatever are unworkable, and they know it. The massive cost of shifting energy sources to supposedly cleaner ones could help to tip parts of the world economy into recession or make the existing slowdown even worse; the push for biofuels, for example, is, arguably, hurting poor people in countries that are traditionally highly dependent on grains etc for basic foodstuffs.
In case any commenters ask, no, I am not a climate change denier, but I do seriously doubt whether a massive cut in carbon emissions over the timescale demanded by some is going to work without causing havoc.
No, I am glad Mr Bush gave his rival leaders the verbal equivalent of a kick in the nuts. More please.
I must admit I have tended to view Naomi Klein, the author of No Logo, the anti-capitalist book, as a committed socialist but not obviously a downright liar. If this scathing review of her recent book, The Shock Doctrine, is accurate, then she he has appallingly traduced the late Professor Milton Friedman, accusing him of holding attitudes that he did not actually hold, such as over the recent invasion of Iraq (she claims he was for it, in fact he opposed it). The book, according to the review, reveals that she cannot figure out what the difference between a classical liberal and a neo-conservative is, for example. As the reviewer, Johan Norberg makes clear, a lot of “shock” events, like terrorist attacks, wars and hyperinflation do not work in the interests of classical liberals, but quite the opposite. In Weimar Germany, inflation destroyed much the middle class, helping to pave the way for Hitler. Wars have been used by national leaders to justify big increases in government powers that are often not rescinded. And so on. Klein either knows this, or cannot be bothered to mention it as it does not fit into her thesis.
Anyway, read the review. It is superb.
Apologies: I got the woman’s surname wrong, now fixed.
A report in the Daily Telegraph today over the Group of 8 gathering of political leaders in Japan carries this:
Mr Brown will call for the creation of a new international panel of experts – mirroring a similar panel for climate change – which will examine long-term trends in food supplies and offer advice to individual countries.
A panel of experts? Surely, the best judges of long term trends are those investors who have been putting their own and their clients’ money on the line. Those evil people – speculators – have a strong vested interest in getting these long-term trends right. I would rather listen to the famed investor and commodities writer Jim Rogers than a bunch of academics hired to form some form of panel.
He will also pledge to increase investment in agricultural research and push for an increase in aid to agricultural projects in the developing world. In total, Britain’s contribution to tackling higher food prices has now cost the Government more than £500m.
How about not spending taxpayers’ money on such ventures and instead, removing trade barriers and other trade restrictions, such as production quotas and the like?
As for encouraging research, there is no need for states to do this. Large companies in the agricultural sphere, such as Monsanto and Bayer do oodles of research already. These governments would do better to resist attempts to outlaw GM foods and other “frankenstein” technologies.
That great economist Gordon Brown is at it again. His depth of understanding of real people and the real world is unrivalled after 11 years of prudent stewardship of the UK’s whole economic wellbeing:
Britons must stop wasting food in an effort to help combat rising living costs, Gordon Brown has said en route to the G8 summit in Japan.
Mr Brown said “unnecessary” purchases were contributing to price hikes, and urged people to plan meals in advance and store food properly.
A Cabinet Office study on food policy reveals that the average UK household throws away £8 of leftovers a week.
Back-to-front puritanism. Sounds to me like the ‘problem’ is food is so relatively cheap that Britons don’t mind wasting it. (Encouraged by bureaucratic nonsenses such as use-by dates, no doubt.) If something is genuinely expensive and hard to get, people do not throw it away.They don’t plan meals in advance and store food carefully because they can afford to live at their convenience and with less effort. We are so rich in the western world that the price of basic food and of energy has only a marginal effect on our living standards.
That’s not to say consumers and producers, unless prevented from doing so by state bullying in some unpredicted direction, won’t change their behaviour because of that marginal increase in costs. They certainly will. What they won’t do is simply less of the same thing, nor will they without threats follow the puritan agenda. The whole social and economic system will adapt in a million different ways by changes in factor prices, taste and technology.
Brown seems to think we should always be striving and suffering towards some abstract common goal, however. So the facts don’t suit.
So it is with ‘recycling’. Driven by targets and prohibitions and propaganda, it has become a national obsession. But this is at the cost of subsidy and taxation that uses up resources and displaces people from other activity. Some re-uses are enforced; others are now forbidden. It has more to do with the taboos of governmentalism than any rational allocation of resources.
There used to be quite a lot of voluntary recycling, the measure of the utility of waste reclamation being the price of the materials. Much of it has been stopped. That ‘waste’ food would have had value and been sold to pig-farmers not so long ago. Banned. On no evidence. For no other reason than it suited the bureaucracy.
A person calling him or herself “Thorkel” left a comment over at Wired magazine’s recent item on water shortages:
Your article on the planet’s dwindling supplies of freshwater (“Peak Water,” issue 16.05) shies away from the obvious: There’s not a hope in hell of avoiding dangerous water shortages until demand is reduced. And there’s not a hope in hell of reducing demand sufficiently until the human population is significantly reduced. We can either start taking measures to curtail our own breeding, or we can die in thirst and hunger and in the wars over what little is left.
How “significantly” we should reduce the human population, or by what means, is not explained. Apart from “curtailing our own breeding” (by forced sterlisation, compulsory abortions on the Chinese model, perhaps?) is not explained either. Neither is this writer, I expect, aware of how previous predictions of disastrous shortages of water and food been shown to be utter nonsense.
More than two-thirds of the Earth’s surface is covered in water. That seawater is not drinkable but then the problem is therefore one of using resources to convert that water into drinkable form. But to suggest that the Earth has a water shortage problem is a nonsense; what it has is currently an under-investment in the systems that might be needed to convert seawater into liquids fit for human use.
The always readable Leon Louw, who spoke at last year’s Libertarian Alliance conference on the issues raised here, is good on this topic.
Data is accumulating that the British residential property market is now undergoing a significant fall. The commercial side of it has been suffering for some time. Apart from some prime residential bits in central London – and even these parts are not immune to change – average prices have now fallen month on month across the country for quite some time.
Some of this may abate eventually. I hope so, since a collapse in house prices would presage a major recession. It is all well and good for people to say that a shakeout is necessary to clear all this cheap money out of the system – and I understand that point – but it is pretty grim having to endure the process first-hand. But beyond that, what this episode reminds me of is the unwise move by many people to put all their long-term retirement savings options into property. I know quite a few people who cheerfully tell me that they have no pension and are relying on a business or set of properties to do the job. Well, they have a half-decent point: many pension savings schemes are a rip-off and poorly invested. But relying on bricks and mortar to keep us comfortable in our rocking chairs does not strike me as very smart. Maybe market developments will act as a wakeup call. And anyway, as I have remarked before, more and more people are going to have to re-think the whole notion of “retirement” anyway, particularly if we are going to live longer, and in healthier shape, than our ancestors.
Just to avoid any possible confusion, I should probably point out here that the Samizdata Illuminatus is a collective pseudonym used when any of the regular writers of this site wants to publish something anonymously. The author of this post is actually in London, not Massachusetts
Dale posted below about the idiotic rules he encountered when attempting to buy asprin in (I presume) Northern Ireland. I cannot answer the question as to whether the situation with asprin is really as absurd as his pharmacy said it was, but in answer to the question of whether it could be that absurd, I can assure him that the answer is very definitely yes. In this regard I have a little story of my own.
I have a hiatus hernia, which causes acid reflex in my oesophagus, which is intensely painful and uncomfortable, makes it difficult to eat certain kinds of food (anything at all acidic), and if untreated could lead to longer term problems that are even more serious (In the worst case cancer of the oesophagus). There is a class of drugs called proton-pump inhibitors that are used to treat this condition, and they are simply wonderful. You take one pill a day, and all your symptoms go away. They are really this good. The best known of these drugs is omeprazole, sold under the brand name “Losec” in Europe and “Prilosec” in the US. To get this drung, I could get a prescription from a doctor, but I would rather not have to deal with the NHS, as I find doing so to be too soul destroying.
However, the drug is available in the UK without a prescription, so no problem.
Well, not exactly. Omeprazole is a “behind the counter” drug in the UK, meaning that it is only available in pharmacies and you cannot simply pick it up off a shelf and then take it to the cashier and pay for it, but you have to actually walk up to the pharmacy counter and ask for it, supposedly so that you can receive proper advice. However, the nasty sting is that pharmacies tend not to display the price of such drugs in clear view, so you don’t usually find out the price until after you ask for the drug. They are relying on people being too embarassed to say that the drug is too expensive after having asked a pharmacist for it, so “behind the counter” drugs tend to be priced much higher then they would be if they were on the regular shelves.
To make things worse, the law states that the over the counter version of omeprazole must be sold in 10mg pills (the standard for the prescription version is 20mg) and in packets containing no more than 14 pills. There is nothing stopping you from buying a larger number of pills to obtain a larger dose, other than the fact that the way the drug is regulated and sold makes it expensive to do this. I am charged about £8 for such a pack of 14 pills, but as they are half dose pills, this is only a week’s supply. (This is almost entirely profit for the pharmacy, as the patent on the drug has expired).
So, although the drug is very effective for people with certain ailments, not prone to any kind of abuse, pretty much completely harmless, out of patent and very cheap to manufacture without any intellectual property issues, I cannot buy it without vast numbers of rent seekers in the medical and related professions profiteering from doing so (either by charging me directly or charging the government via the NHS) and the price being pushed up to a level I find annoying.
The US lacks this “behind the counter” racket, and omeprazole is also available over the counter in the US in large packets of proper 20mg pills, so there is nothing preventing me from buying it in large quantities at Wal-Mart when I am in the US, for about a quarter of what I pay for it in the UK. However, the Americans have lots of other rackets and the situation with this drug is sadly not typical, as American regulators (under pressure from doctors groups) are extremely reluctant to reclassify other prescription drugs as over the counter.
Sadly, though, I visit the US only once a year, if that, and my supplies seldom last until the next trip. Recently, I have found another solution, however, which is to buy the drug on eBay from people in Delhi. The price in this case is much less than I would pay even in the US, and less than a tenth what I would pay in the UK. It is possible to argue about the ethics of importing patented medicines from abroad, but in a situation in which the patent has expired, parallel imports are definitely something to be encouraged. It is probably not technically legal for me to conduct my own parallel imports from abroad, but I really do not care.
And there is something supremely ironic about using India to get arount the permit-Raj of the developed world medical bureaucracy.
As the US television journalist John Stossel points out, when politicians start calling for “windfall” taxes on oil or other evil firms for making “obscene” profits (which begs a question of what the right level is), they ignore the fact that such taxes will reduce dividends and shareholder returns, including those of pension funds. And the pension fund members – us ordinary Joes – lose out when politicians decide to come a-lootin’.
Part of the trouble is the vocabulary. “Windfall”, like “windfall apple”, implies that a good – such as a juicy apple – has fallen to earth and the acquirer of said has done nothing to earn it. It is, so the argument goes, just dumb luck that the chap who found the apple did so. And so, to switch to those Big Oil firms, there is no merit in clocking up monster profits when the oil price spikes. But this ignores the fact that oil firms and their investors took a risk in seeking to find, process and sell oil products and those risks could easily have gone wrong. We tend to forget how risky, both physically and economically, investing in oil is. When Brent crude was trading below $10 a barrel in the mid-90s, did those politicians who want to chase a few votes by bashing Big Oil cry any tears for the oil firms that were taking big losses at the time? No, of course they did not. And frankly, given that petrol is so heavily taxed in many major nations today, it is, to put it politely, rank hypocrisy for any politician to strike attitudes on the supposed venality of oil firms at all.
By the way, John Stossel is a marvel. If only we could have a few of him in the British television media.
Tim Worstall provides a suitably terse response to the latest piece of economic illiteracy from leftie writer Richard Murphy, who is against admirable things like avoidance of high taxes, and who now is supporting measures to prevent, or at least hamper, investors from making money by “shorting” the shares of firms they think are likely to perform badly.
The practice of “shorting” seems to get a certain class of person all upset. Earlier this year, when the shares of HBOS, the UK banking group, came under pressure, the cry went up that those irresponsible wreckers called hedge funds were deliberately trying to destroy the firm to make a fast profit. What this ignores is that if there were not investors willing to temporarily borrow stock as part of their short-selling tactics, then this would reduce the total number of counterparties in a market, and reduce liquidity and efficiency in the pricing of shares, which is a bad thing. Illiquid markets – which can produce big jumps up or down in the prices of shares – are generally not good places to be in, particularly for smaller investors.
If I take a dim view of a company that I do not own, shorting lets me act on that view and maybe make some money out of it. Quite why this is so terrible, Mr Murphy does not bother to explain.
Some time ago, when I wrote about this topic, one sarcastic commenter moaned that I was insulting the intelligence of readers by trying to explain what “shorting” is. I reject that criticism since it s plainly obvious that even among supposedly intelligent people, the workings of the financial markets are mysterious. And what people do not understand, they fear.
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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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