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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Anatole Kaletsky is usually good value for his economic analysis. In a pretty scathing column today about the collapse of Brown’s political reputation since becoming Prime Minister last year, Kaletsky tries to contrast Brown the bumbling PM with Brown the masterful Chancellor of the Exchequer. He writes:
Indeed, he was probably the most successful chancellor in modern history, notwithstanding his muddled tax reforms, his badly timed gold sales and the fatal damage he allowed the regulators and courts to inflict on Britain’s pension funds. Mr Brown made the right decisions on monetary policy and the Bank of England. He kept Britain out of the euro. He reduced capital gains and corporation tax more radically than any Tory chancellor and he resisted populist demands to squeeze the rich.
Oh please. Sorry to rain on the parade here, but remember that in the early part of the current decade, Brown subtly shifted the way in which the BoE measures inflation. Without going into a lot of technical detail, he allowed the central bank to pursue a less stringent inflation target, and allowed it to loosen the strings of monetary policy. We are now – arguably – suffering some of the effects. Also – and it is frankly incredible that Kaletsky does not mention this – Brown has presided over a massive increase in the size of public spending and borrowing. During the supposedly fat years, the state of the public finances has actually got worse when it should have done the opposite. Hardly the mark of a good, prudent finance minister. The public sector payroll – no doubt expected to vote Labour – has swollen by up to 1 million since 1997, according to some estimates. That is a collossal increase and a large dead weight on the economy. Again, this burden is weighing more heavily on the economy now that the international environment has become more difficult.
By doing the British economy no serious harm during his long tenure at the Treasury, Mr Brown earned a distinction unique among postwar chancellors, with the possible exception of Kenneth Clarke.
Well, compared to some of the massive errors made by previous Labour and Tory chancellors, it is true that Brown’s record has been quite reasonable, but Kaletsky ignores the substantial shift in the size and cost of government since becoming Chancellor; that amounts to “serious harm” and detracts badly from his record.
Do not misunderstand me. It is not necessary to believe that every move made by Brown has been bad and it is also important to realise that in the globalised financial markets of today, there is only so much – thank goodness – that a finance minister can do. But as we have seen from the continued flight of entrepreneurs and businesses from Britain, from the tax increases, from the poor productivity gains in the UK, and so forth, Brown has been a mediocre custodian of the economy at best. And even his prize achievement, the independent Bank of England, looks less impressive now after the BoE was unable to act swiftly, as it could in the past, over the Northern Rock fiasco.
Tim Worstall has interesting things to say about the difference between social status and economic inequality, pointing out that the two things only occasionally map onto each other, a fact which does rather undermine the egalitarian argument that reducing economic inequality will reduce differences in status. A good point indeed: in the former Soviet Union and in heavily statist countries today, for example, there was and is a gulf between the citizenry and the cliques that run the show. This exists to a lesser extent, however, in the mixed economies of much of the rest of the world, where ‘new class’ of people – bureaucrats, politicians, media folk, academics, quangocrats, etc, hold considerable power and influence, even though they may earn less than say, a Goldman Sachs bond dealer. The gap was arguably far harder to bridge than is the case in the more fluid situation one finds in a pure market order where the process of ‘creative destruction’, to quote the Austrian economist Joseph Schumpeter, destroys once-dominant businesses and dynasties and creates new ones in a never-ending cycle. Tim also makes the good point that having high status is often little to do with money at all. Fame, or having a prestigious job, or being an influential commentator, or whatever, often counts for far more than how much money one has in the bank. Ask yourself this: who has more status in British society – the editor of the Times or a hedge fund investor?
Another way of thinking about the difference between being rich and status is this: in some cultures, where acquiring wealth is sneered at or even suppressed, what counts is the accident of birth, or the ability to pull the levers of political power, or manipulate opinion in some way. As you will, gentle reader, no doubt guess, I think that one of the great things about the pursuit of wealth is that it is, in one of the deepest senses, profoundly egalitarian. Think about all those media commenters who sneer at ‘ghastly chavs’ messing up the view in the South of France or taking cheap flights to Malaga: what this point of view admits, in a way, that capitalism makes it possible for the masses to get on the same ladder as those dealt a good hand by accident of birth. I still think that part of the motivation for the Green movement or strict controls on immigration and population growth is a desire to cut off the ladder of opportunity for the masses (yes, I know this is a bit of ad hominem argument but I think it carries some validity).
For a great book on the subject of envy, which of course lurks beneath a lot of complaints about status and inequality, I recommend this classic study.
Anyway, as Tim rightly points out, people who think that ironing out economic inequality through such methods as steeply progressive income taxes will narrow gaps in status are liable to be disappointed. Humans are by nature a competitive species, and ranking folk according to some metric or other is ineradicable. Also, as the US writer George Gilder wrote in his masterful early 1980s defence of supply-side tax cuts and entrepreneurship, the folly of progressive taxes and other methods is that they do not eradicate inequality. Rather, they fossilise existing patterns of unequal wealth distribution and encourage the most ambitious people in a society to channel that aggression into less benign forms. Not an original insight, of course – Samuel Johnson, the 18th Century writer, made the same point – but one that needs to be rammed home from time to time.
Gordon Ramsay, the ‘outspoken’ celeb chief wants the state to outlaw out-of-season vegetables. I kid you not. That the man is an arrogant little shit has always been apparent from his TV shows but this sort of national socialist volkish crap really does mark him as truly authoritarian.
The TV chef said it was “fundamentally important” for chefs to provide locally-sourced food. “Fruit and veg should be seasonal,” he said. “Chefs should be fined if they haven’t got ingredients in season on their menu. I don’t want to see asparagus on in the middle of December. I don’t want to see strawberries from Kenya in the middle of March. I want to see it home grown.”
The ‘I am’ does not want to see something and so thinks his views should be the force backed law of the land: the psychopathology of the expert that we so often see coming from doctors is at work again. The great unwashed must be forced to follow expert opinion, which means their opinion, naturally.
I like the idea of third world farmers pulling themselves out of poverty and selling me their products whenever I want to buy them and why should a loud mouthed self important chief and a bunch of fascistic green activists get to have a say in that? Their craving to impose their will on others should stop being socially acceptable and they need to be called authoritarian thugs to their faces.
One writer I rate pretty highly is Ross Clark. As well as being a regular newspaper and magazine columnist in places like The Times (of London) and The Spectator, he is also the author of several good books. He has written a fine piece, with deliberate echoes of George Orwell, about the current mania for surveillance in Britain. His liberal views seem to be pretty robust. He has also written a short satire on life in Britain in 2051, a dystopia, showing what the country became when industrialism, liberty and associated individualism, modern technology, medicine, commerce and mass travel and communications were destroyed by a mixture of forces. Unlike the dystopias of Huxley which attacked modern technology, Clark’s dystopia very clearly shows that, with all its occasional shallowness and gaudiness, life as we now enjoy it is pretty wonderful and to turn our backs on it would be to miss things such as mass communications and information sources; techniques such as modern dentistry and keyhole surgery; cheap flights; fast, relatively safe transport, cuisine from around the world; downloadable music of any type available for a few cents, the prospect of DNA mapping to cure many diseases… the list rolls on. Our society is still pretty free, on the whole – though the losses of civil liberties and the associated nanny statist developments are a part of the trend towards a darker society that Clark writes about. But if you think, gentle reader, that Gordon Brown’s Britain is bad in certain respects, then Clark’s version is vastly worse still. He imagines a society, fractured into tiny tribal units lorded over by thugs and religious bigots, in which all these things and more are banished, loathed. His nightmare prediction is one of a world in which scientists, doctors, engineers and bankers are attacked, even murdered, for what they do. It is not a book to read if you are suffering from a bad depression and need a bit of cheering up.
A question that occurs to me about this book is that Clark seems to have written it with the partial object of satirising reactionary Greenery, religious fundamentalism and technophobia, hoping no doubt that the loathesomeness of the dystopia he presents will remind readers of the dangers of what the Greens/others have in store. My problem, though, is that other dystopian novels have often not had much of a salutary effect. As Perry of this parish remarked some time ago, our capacity for satire has been so sated by real-life lunacy that even a hit TV show called ‘Big Brother’, taking a line from Orwell’s 1984, does not inspire the same intended feelings of loathing that Orwell’s attack on totalitarianism was supposed to elicit. Fair enough, there are signs of a fightback against this trend.
But I wonder whether Clark is only really preaching to the converted. I hope not. I hope some stray Guardianista who thinks that John Gray or Bill McKibben are great sages will pick up this great little book and learn something from it. And for undecideds, I would hope that this dystopia warns them off from the anti-Enlightenment trend in which part of our society seems to be moving.
Perhaps a another way to think about winning arguments for technology, capitalism and so on is to portray positive fictional accounts of such things, rather than to portray the opposite. One way to win an argument to is be positive, to give examples of how things are improving, and improving the lives of millions of people. Grumpiness is not really a great sales pitch. Alas, avoiding the error of slipping into grumpiness is difficult when there is so much to be grumpy about, so it takes quite an effort to avoid it.
A couple of weeks ago I linked to a story about how the UK drugmaker Shire was planning to relocate offshore to avoid paying UK tax. The FT reports today that a large number of blue-chip firms are looking at following suit.
The problem, however, is that even if the UK government cuts corporate taxes to entice firms not to leave, a high-spending administration like this one is likely to recoup any loss of revenue by hiking taxes elsewhere. If it does, that will only encourage more people to leave.
Pah. Not only do I know of French Basque cheeses, I have eaten them with cider in a bar in St-Jean-Pied-de-Port while two tables of Basques on either side of me got on with serious drinking song competition, and I am presently in the Palermo district of Buenos Aires (which reminds me oddly of the French concession of Shanghai – slightly urbane areas in two cities with wide, leafy streets that were in their heydays around the same time, I suspect) while I decide in which of the many wonderful parillas I am going to wash down my evening steak with Mendoza Malbec. Americans are such provincial wimps.
And I don’t go in for any of that “Good liberal while lingering over the Sunday New York Times” crap, either. It was just great burning so much carbon to get here.
Shane Greer reports on his attempt to get Westminster City Council to recycle business waste. It turns out that the council, while willing to collect his office’s waste, will not recycle any of that waste – and will fine him if he puts his waste in recycling facilities aimed at domestic users. That sounds awfully like punishing businesses that try to be green.
The problem with councils running recycling services is that they are inefficient and fail to innovate. They use outdated methods that are expensive, and end up recycling in the same way as British Leyland used to make Austin Minis (at a loss).
In large parts of Ireland, a recent report by Gordon Hector points out, the state has let the free market deal with refuse collection: individual customers choose from private companies and pay directly, rather than through council tax. Competition has meant that technologies and methods unknown in the UK have been deployed. Greyhound, one of Ireland’s larger waste companies, recycles 87% of the rubbish it receives (because recycling is good for its profits). The best-performing council in the UK only recycles 55% of waste; the lowest 11%.
This might not compute with environmental activists, but yet again we see that the free market is greener than state control.
– Update: On another brain-dead environmental issue, have a look what the council at Basingstoke is doing to destroy the local environment and harm taxpayers simultaneously, by pushing development into the beautiful Lodden Valley, instead of on the bod-standard land it already owns in Manydown.
Bill Emmott has a marvellously sane piece on food shortages, agriculture, the credit crisis and the case for GM crops. He’s in favour of GM, wants free trade, and is unimpressed by the case for biofuels.
The comment thread attached to Emmott’s article reveals considerable fear and hatred of GM foods. I would like to ask some of the commenters how they imagine most strains of wheat, barley, soybeans or rice that have been staples of diets for centuries came along. They are, albeit through trial and error over eons, just as ‘modified’ as a Monsanto crop. And that I think is the kicker: it is the speed of scientific change, not the change as such, that gives people the heeby-jeebies about genetic modification. I am not sure how that can be easily addressed without massive improvements in popular understanding of science.
It is wrong to make sweeping assumptions about certain media outlets. I came across what was actually a pretty decent defence of open borders and the benefits of allowing people to migrate between countries over at the Guardian’s “Comment is Free” site, which in my experience often has decent columns but absolutely gobsmackingly bad comment threads, particularly if the subject of the Middle East and specifically, Israel, comes up.
Phillipe Legrain has this pretty good argument in defence of immigration, challenging the recent House of Lords report on the subject. It revives a few of the points I also made here. In that Samizdata thread, one issue that came out in the comments was the idea, which is weird if you think about it, that residents who are lucky enough to be born in a country X are entitled to tell outsiders that they are not entitled to move around. Take the logic further: am I, a British citizen, entitled to ban my fellow Brits from moving abroad if such people are, say, incredibly skilled or rich? What right do I have to do this? (None). But if we are entitled to use some sort of “quality of life” consideration or economic calculus to say that we should ban or cap immigration, then does not the same argument cut the other way when it comes to emigrants?
I ask this question because, like a good classical liberal, what ultimately counts is liberty. The ability to get out of a country is a crucial check on the ability of the rulers of such places to act badly.
By the way, if you read the CiF thread linked to here, it is hard not to be depressed at the sheer, groaning economic illiteracy in evidence. As I keep stating, there is no argument against the influx of immigrants that cannot be used to advocate strict population controls, shorter working weeks to “create jobs”, and other lump-of-labour nonsense.
One caveat: Legrain makes a couple of bad points amid the good ones. He dismisses the House of Lords report on the grounds that it has some Tory members on the panel, such as Lord (Nigel) Lawson. Lawson is a pretty robust advocate of free trade and the descendant of immigrants himself, so Legrain made a cheap shot. Also, immigration may alleviate the coming pension problems by adding to the workforce, but ultimately, that problem will require a long-term rise in savings, and immigration is not a permanent fix for that.
Another writer who is good on the subject is Chris Dillow. He points out that if immigration is so terrible, why not take controls down to a local level, so that people in say, Essex are banned from moving to Hampshire, or Wales, or whatever? No doubt someone will claim this is a “straw man” argument, but it is not. If you believe national boundaries are in fact just lines on a map, then there are other lines, too.
Yesterday morning I posted, on my personal blog, some anodyne remarks about how economic trouble strikes. They included this:
Speaking of Paul Marks, …
… as I was …
… someone should really dig out him ranting away three or four years ago about the fact that the British economy is doomed, doomed. Now everybody is talking like this. They are merely telling us so, now. He told us so, years ago. With luck, it will be possible to find an entire Samizdata posting, from way back, in which this last week’s cursings are all there.
I scratched about for a while in the Samizdata back catalog, but could find nothing entirely suitable. I suspect that Paul may have posted a lot of his best doom-mongering in comments, both following up on his own postings, and on the postings of others. However, commenting at my posting this morning, Peter Briffa supplied a link to this posting at conservativehome.com, dated June 14th 2005. The posting itself concerns some fairly anodyne remarks from Shadow Chancellor George Osborne, about such things as a “modern, integrated transport infrastructure”, a reduction of the regulatory burden, a “strong macroeconomic environment” and “simplification of taxes”. But then, comment number two, quite long, turns out to be from a certain Paul Marks. It includes this:
On the Bank of England: Well the British money supply is expanding at least as fast as the Euro money supply (see the back pages of the “Economist” any week for the stats) – so even I would not make a jingoistic claim that all things in Britain are fine. Of course joining the Euro would mean even lower interest rates for central bank credit-money (hardly a good idea).
Sadly the notion that “expanding the money supply” is good for long term economic prosperity has been an article of faith for many decades (whenever there are problems the cry goes up “cut interest rates”). Once it was believed that this credit money expansion should be linked to the general “price level” (in order to prevent, horrors of horrors, falling prices), but at least since Keynes the doctrine has been to issue more money (by various clever means)as soon as there is trouble – whether the “price level” is going up, down or sideways.
I do not expect to convince anyone here that credit money expansion is the cause of the “boom-bust cycle”, but for anyone who thinks (along with Mr Blair and Mr Brown) that this cycle has been “abolished” I would advise them to watch and see.
So, not only did Paul Marks predict the trouble ahead that we have now crashed into. He also predicted what would be wrongly said about how to deal with it when trouble did in due course strike. I’m sure that there is similar stuff to be found here. Paul? Anyone?
I have a lot of time for Chris Anderson, the top editor at Wired. His book, The Long Tail, ought to be on the reading list of anyone who wants to understand how the massive reduction in the costs of searching for stuff online has changed the economics of businesses as varied as retail to travel. But in his latest essay on how businesses are moving to give stuff away for free, he over-reaches.
Here’s this paragraph:
Milton Friedman himself reminded us time and time again that “there’s no such thing as a free lunch. But Friedman was wrong in two ways. First, a free lunch doesn’t necessarily mean the food is being given away or that you’ll pay for it later – it could just mean someone else is picking up the tab.
But if someone else pays for my lunch at my favourite pizza joint, it is not free. It has not mysteriously come out of the sky.
Of course, Anderson makes a lot of great points about how the structure of how things are paid for has been massively changed by technology. He is also right to emphasise how a lot of businesses “give away” goods and services for free as gifts, but they still charge for their output at some point. Otherwise, what Anderson is talking about is not business, but philanthropy.
Sorry, but Friedman’s, or Robert Heinlein’s logic is unbreakable. There is no such thing as a free lunch.
CityAm, the freesheet newspaper in London, has this cracking scoop:
Shire Pharmaceuticals, the FTSE 100 drugs giant that focuses on treatments for attention deficit hyperactivity disorder, is to re-register its head office outside the UK for tax reasons.
The group, which is valued at around £5bn, has been consulting the accounting group PriceWaterhouseCoopers on the merits of a move and is set to inform investors today. Shire’s headquarters are currently near Basingstoke. The news will come as a further blow to the UK economy.
The story ends with a quote from Matthew Elliott, head of the lobby group, The TaxPayers’ Alliance:
“This disastrous news confirms that Britain’s competitiveness has suffered a series of blows from misguided tax hikes.”
I am glad to see that the influence of CityAm’s newly-appointed editor, Allister Heath, who has written on the flat-tax issue in the past for the Taxpayer’s Alliance and at the now-defunct weekly, The Business, is making itself felt. Far too many journalists at places such as the FT, for instance, seem to operate in a corporatist cocoon. Allister will not make that mistake.
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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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