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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London is the most expensive place to eat out in the world, even more pricey than Tokyo (a city I really want to visit). Not very surprising, I guess. The sheer financial vibrancy of London fuels this, although it may lose some oomph if the problems in the global markets lead to some job cuts in the investment banking industry.
The key thing I have learned is to be bloody careful about the wine. I find that even in a pricey restaurant, you can get away without paying a fortune so long as you go very easy on the booze. But as soon as you buy anything other than the cheapest plonk in the list, you might as well call in the receivers and sell the house. For this reason I rarely eat out in expensive places, unless it is a special occasion, or eat at my magnificent Tandoori restaurant in deepest Pimlico, which is right next door to my flat. Now that’s luxury for you.
Recommendation: try this place out for a special night out. Great staff.
The other day I encountered this argument, which I failed properly to swat away and as a result, got rather rude to my interlocutor and he went off in a huff (sorry about that mate). What he said that made me go red was this:
“You libertarians keep banging on about the terrors of regulation. Yet you also slag off massive lawsuits and things like that. But if you want to get rid of huge payouts for things like people suing for damages, you need regulations. So why are you so hostile to them?”
As I pointed out, this is what is called a straw man argument.. Such “arguments” hold up a false, or in some cases deliberately false and weak, version of a point of view that a person wants to knock down easily (hence the “straw” bit). So let us fisk it.
First, I do not know any liberals or libertarians who argue that regulations are and always are a bad thing. Private sector bodies and voluntary associations of all kinds have them. A privately owned hospital, for instance, would regulate the behaviours of people who entered the premises. Why? Because that hospital would not want its reputation and bank account to be wrecked by outbreaks of disease, which lead to nasty insurance payouts. So it is in the self interest of said institutions to operate regulations, and more important perhaps, to be seen to do so. Another case is the London Stock Exchange. Long before modern financial regulators like the Financial Services Authority came along, the LSE was founded (back in the 18th Century, I think) and it had rules, albeit not always formal ones, but rules nonetheless (“my word is my bond”, etc). Trust is the key. And if you do not have trust, and have ways of enforcing said, then networks of commercial or other transactions do not work so well. So let us dispose of the canard that classical liberals are agin regulations. They are not. What we are against is one-size-fits-all regulations imposed heedlessly by the state. This is the crucial thing. Regulations, to be useful, need to be tried and tested, and if need be, discarded. State regulations tend not to be like that, but rather resemble clumps of ivy climbing up the side of a tree. They are much harder to reverse.
Okay, so now we come to the idea that libertarians hate expensive lawsuits. I suppose it is true that we hate frivolous, massively costly lawsuits, by definition (and who does not, except lawyers?). But sometimes you need to have lawsuits because you will not always have perfect knowledge of the kind of problems that can arise. Take the example of the hospital again – its managers may not know about new diseases that can be transported into the building in unexpected ways. A lawsuit following a disaster may be the trigger for a new rule. In this sense, lawsuits, although unpleasant for those on the receiving end of them, act as a sort of discovery process about what sort of problems exist. Lawyers have their uses.
In other words, this is quite a complicated argument. I just will not make the same mistake of trying to explain it after two beers and a 13-hour day at the office.
I am glad to see that the current moral panic about Britons sliding into a Hogarthian nightmare of drunken idiocy has not put off these guys from selling sparkling wine – or champagne, maybe – for £5 a bottle. I am not sure whether it is going to taste as good as Krug, mind. And of course, with many so-called luxury goods, the business model gets ruined if the prices are cut so massively that the exclusivity is lost, and hence the cachet of buying X or Y in the first place. Would Ferraris, for example, be quite the same if they were as cheap as Fords?
Even so, fair play to the businesses that bring us cheap goods. Globalisation – terrible, isn’t it?
There could be an interesting storm brewing when you see things like this…
Gold has raced to a 16-month high of $700 an ounce as investors seek to shelter their cash after stock markets ended the week sharply lower. The yellow metal has clawed back around $30 this week, raising hopes it could revisit last year’s highs of around $730 an ounce. Although gold is traditionally strong at this time of year, the rout in credit markets is fuelling further appetite for the safest investments.
and this…
A sharp drop in foreign holdings of US Treasury bonds over the last five weeks has raised concerns that China is quietly withdrawing its funds from the United States, leaving the dollar increasingly vulnerable.
I am trying to join the dots but instead of a bull or a bear, the outline looks a bit like a hippopotamus. Not sure what to make of that.
Tim Worstall has a bit of fun with poor old George Monbiot, who frets about the origins of all that terribly nasty “neo-liberal” (ie, classical liberal) thinking that dared to suggest an alternative to Man’s future in a great socialist project.
Well, I have been to a few events hosted by think tanks like the Institute of Economic Affairs, have been a member of the Libertarian Alliance for 22 years (!) and have been even known to correspond with likeminded people in foreign countries. The sheer horror of it, Georgie!
Seriously, articles such as Monbiot’s suggest to me that the “neo-liberals” have been winning at least some debates, or at least getting under the collars of collectivists of various types. That has to be a good thing.
For a grown-up analysis of the revival of classical liberal ideas in the West, Brian Doherty’s book is a great read. It mainly focuses on the US, however.
Let’s see if we can spot the flaky reasoning in this letter to The Times (of London), as prompted by a good(ish) article by Daniel Finkelstein today:
Writing as a parent and as one who stands to inherit a large sum, a far better way to reduce inter-generational inequality would be to set inheritance tax at 100% over a comparatively high threshold (e.g. £500K). Then the older generation would have a strong incentive to sell their large, expensive homes – increasing supply and making property more affordable for the young – and spend the money, boosting the economy, employment and wages. It would also have the benefit of forcing the children of the rich to make their own way in the world – they have enough advantages in life anyway.
First, the writer assumes as a matter of course that “inter-generational inequality” – however defined – is of itself a bad thing, a thing to be prevented by limits on any wealth bequeathed above a certain level. For this writer, he/she assumes that no person should have, in this case, an amount higher than say, £500,000. But why on earth should the state rule that people should be banned from receiving, as a gift, more than whatever some egalitarian thinks is the “right” amount? So the inheritor may not “deserve” it in some sense but so what? If a person does not deserve to inherit £1m, neither do his fellow citizens deserve to have that wealth evenly divided up among themselves, either. I think it was FA Hayek who pointed out that in talking of deserve, we talk of deserve in the eyes of someone else, like a father, boss or God who decides that Johnathan Pearce or AN Other “deserve” to receive X or Y out of the multitudes. But dumb luck in inheriting money or good looks or a high IQ is just that: luck. Luck is neither undeserved or deserved. Through aeons of time, we have evolved into human beings with things like opposable thumbs and relatively large brains. We did not “deserve” those, either, so does this mean we should hold ourselves back to benefit our less fortunate creatures?
→ Continue reading: The fallacies behind inheritance tax
As a counterweight to the doomongers out there, this is a spendid talk on global economic and population trends that one hopes reaches a wide audience. Something pleasant for a Sunday. The video runs for about 20 minutes or so, if my memory serves. It is always refreshing to come across an academic who is not only thought-provoking but also very funny.
Ruth Lea (thanks to Perry for pointing this out to me) has what is a pretty good analysis of the upcoming regulatory juggernaut to hit the City out of Brussels. I won’t expand much further other than to say that without the City, the UK economy would be a shadow of what it is now. Of course, in the short run, the UK government has been content to let financiers make their big bucks because it pulls in so much taxable revenue. More fundamentally, however, London’s position as a great finance capital on the planet is not secure; while regulations like Sarbanes-Oxley have driven some US businesses to the UK, Brussels-generated laws could hamper the UK and drive that business outside the EU, although natural inertia and the benefits of London’s accumulated legal and financial expertise are strong assets. Never forget the Swiss. The weather is okay, the trains work, the Swiss mountains are great for skiing in the winter and although I am happily married, I have always rather admired their women. If you are a 30-something banker with no ties, London is not necessarily superior.
Of course, if the Scottish nationalists were not such lefties, they’d be playing the Adam Smith card and campaign to turn Edinburgh into a sort of tartan low-tax paradise, and take a leaf out of the Irish book on how to revive an economy (no, the Irish economy is not all about EU grants, in case anyone brings that one up).
Well, the Fed has cut the cost of borrowing to avert what many see as a financial crisis. There are several ways to view this move, I guess. One view, as expressed here, is that central banks created the current asset price bubble and appetite for dubious credit products like collateralised debt obligations – bundles of bonds and loans – by cheap interest rates. Central banks caused this state of affairs, so they should let hedge funds and other institutions go bankrupt as part of the natural, if painful Darwinian process of the market. It sounds harsh, but a few casualties, while not much fun for the immediate investors, are a useful warning about how investments can go awry.
On the other hand, the fall in stock market prices since late July has been so fast that it threatens to cause a wider, systemic economic problem, and the rate cut was justified.
I take the former view, by and large. The underlying state of the UK economy, for example, is reasonable, if not great (thanks to the taxes and regulations of our current prime minister, Gordon Brown). But corporate earnings have been strong, consumer spending is okay – it has weakened a bit but hardly fallen off a cliff – and the cost of equities, when set against expected corporate earnings, are pretty cheap by long term standards. (The FTSE 100 index is priced on a multiple of about 12 times earnings, the cheapest since the early 1990s). The Fed, by cutting rates in this way, is more or less saying that stock market bears cannot make money, that the only way to bet is for stocks to rise. This ultimately creates a serious moral hazard by encouraging risky borrowing and lending behaviour.
I think we’ll regret what the Fed did today. Whoever said August was dull?
A report in the Times (of London) states that one of the UK’s leading charities, Voluntary Services Overseas (VSO), has told gap-year students (students taking a period of time off between school and university or whatever) not to take part in costly and often useless aid projects.
Indeed. Far better to encourage students not to take a gap year off at all, but to work hard, get a job, and then use all their energy and idealism to campaign to scrap all tariff barriers, trade “pacts” and other distortions of the world trade system.
As a subject for reading, this I highly recommend. I wonder if any university dons care to put it on their students’ reading lists?
When people start blaming Big Evil Capitalists for the latest SNAFU in the global capital markets – the collapse of many debt products linked to what are called sub-prime mortgages in the US – remember that the problem stems in part from how lenders have been positively encouraged by some states to lend money to risky borrowers and people with a history of debt defaults and late payments (thanks to Glenn Reynolds for the link).
Of course, ultra-low interest rates in many nations, such as Japan, have also fuelled a vast rise in the levels of global monetary growth, which in the near-term encouraged people to invest in any asset class offering a decent return regardless of risk of assets held, like bundles of sub-prime mortgages repackaged into exotica called collateralised debt obligations (please do not ask me to define these, it is too early in the morning and I have only had one coffee). Low interest rates have cut the price that investors typically demand for shouldering risk; now that rates have risen to curb inflation, the price for that risk has gone up.
Milton Friedman and Robert Heinlein may be dead, but the truths they espoused are very much alive. As they said, there is not, and never has been, such thing as a free lunch.
Maybe I should point out this story to my lovely Japanese sister-in-law. I wonder how many ordinary British people, never mind women, do things like this to make money?
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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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