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.
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This recent posting of mine here referred to the wonders of global divisions of labour and the consequent availability of cheap goods and services that would have once been luxuries. The posting quoted an example about something as simple and evocative as exports of flowers (aaahhhhh) but of course it applies to anything: computer software, underwear, books, automobile components and furniture.
The ensuing comments were interesting (one of the reasons I like blogs with comment threads is that they give me ideas to write about). One argument, which I have heard several times, went something like this: globalisation and free trade is obviously grand in many ways and gives us all manner of goods unknown to our ancestors. However, the people who do best out of this tend to be smart people who can handle the rapid pace of change that globalisation brings. But not-so-smart folk, who are used to manual labour but not much up to anything else, will end up on the scrapheap. This is a bad thing as it erodes the social fabric, destroys established communities (such as Yorkshire mining villages, etc), and in particular, means that the sort of folk – mostly men – who used to expend their energy and pride on producing ships and material goods lose purpose in life, turn to crime, etc, etc. If they get jobs at all they tend to be worse-paid, “McJobs” which are demeaning to perform. Conclusion: globalisation has big losers as well as winners.
Superficially, this sort of argument carries a certain amount of force, but only lasts until one realises that this sort of line could be used not just to stop cheap imports from China and inflows of Polish construction site workers, but could, for example, be used to ban people in California from importing stuff from neighbouring Nevada, or ban a guy living in Paris from moving to Bordeaux because he is “stealing” a job from people who live in the French coastal town. In other words, when one realises that national borders are lines on a map, the perversity of protectionist economic arguments is manifest. Taken to its logical extreme, I am “taking” jobs from people in East London because I work in Canary Wharf but live in London’s central area of Pimlico.
The other sort of problem here is that it reminds me of how people still view work that involves physical objects, such as manufacturing, as being in some way more “real” than service-based jobs. It demonstrates the lingering Marxian view that wealth is not wealth unless you can drop it onto your foot. It is a view that also, I think, reflects a highly gloomy, if not disdainful, view of one’s fellows. Despite the difficulties involved and the wrench of closures of factories, millions of jobs have been created in countries like the United States that have replaced the old jobs, and many of those jobs are not the supposedly-terrible “McJobs” but jobs that have long-term career prospects. (Although folk that poke fun at “McJobs” tend to ignore several things, such as that such jobs are good entry-level jobs and people then move on to something else).
Here is an admirable debunking of the idea that free trade encourages a “race to the bottom” in terms of incomes. Another admirable paper by the late Murray Rothbard here.
Readers may wonder why I am bothering to write about this, given that protectionism is pretty discredited (I have yet to meet anyone who, when sober, takes Lou Dobbs seriously). But the easy charms of protection continue to seduce lawmakers and even quite intelligent interloctors on blog comment threads. Like ivy threatening to throttle a young plant, protectionism needs to be ruthlessly cut back by argument, over and over again.
I sometimes watch nature programmes and often as not, the narrator(s) of such programmes will wax lyrical about the complexities, the marvels of the natural world. (Programmes such as The Blue Planet by David Attenborough). In moving over into the Man-made world, we often get similar sentiments of praise and wonderment at things like great buildings, bridges or even whole cities, but seldom is such language employed in looking at the area of human commerce.
All the more reason to savour expressions such as this, written over at the admirable Cafe Hayek blog a while back:
This winter morning I bought a bouquet of wildflowers from the supermarket. Its price was $5.99. The flowers are fresh, beautiful, fragrant – and from Ecuador.
Ponder this fact.
For a mere one hour and eight minutes of work, a minimum-wage worker in the United States can acquire a bouquet of fresh flowers grown in South America. In other words, for 68 minutes of working in the U.S., a minimum-wage worker can take home some of the beautiful fruits of the efforts of strangers in Ecuador who plant, tend, and pick flowers – of other strangers (where?) who make the protective packing material used for shipping the flowers – of yet other strangers who pilot the planes and drive the trucks that transport these flowers fresh from Ecuador to U.S. supermarkets – and of the countless other strangers who build the planes and trucks, who fuel the planes and trucks, who pave the runways and roads used by the planes and trucks, who feed the pilots and drivers, who insure airlines, trucking companies, and supermarkets against casualty losses, who wake up at pre-dawn hours to put the flowers into an attractive display in the supermarket.
These and millions of other strangers all worked — all cooperated — to make it possible for me and my family to enjoy a beautiful bouquet of fresh flowers in the deep winter. And all for a mere $5.99.
The time you hear or read someone complaining about the supposed evils of global trade, remember sentiments such as that.
Today I received, from the Globalisation Institute, a press release, which began as follows:
Monday 6 November – A new report released today by the Globalisation Institute says that microfinance is not being taken seriously by the Department for International Development.
In October, it was announced that the Nobel Peace Prize would go to the founding father of microfinance, Dr Muhammad Yunus, who created the Grameen Bank in Bangladesh. However, microfinance remains tiny in Africa and receives scant support or encouragement from DFID.
Okay, cards on the table. I am a big fan of the Globalisation Institute and of its bosses Alex Singleton and Tom Clougherty. I write quite frequently for the Globalisation Institute blog, my latest posting there, about mobile phones (which makes much of a comment at my blog by Michael Jennings on the subject), having gone up there only last Friday. Tonight, I am attending a Globalisation Institute do, to which I have been invited so that I can take photos. David Cameron will be present, and they want to be sure that his presence there is immortalised pictorially, so that they can blog about it and impress their many donors with their political plugged-in-ness. Very sensible.
But… and you could hear that word coming a mile off couldn’t you?… I have severe doubts about these latest pronouncements of theirs. → Continue reading: Memo to DFID – please do not take microfinance seriously
Every day or two I visit The Croydonian, and today The Croydonian links to an amazing report. Papua New Guinea is having a row with Australia, about an Australian evildoer who escape in a Papua New Guinea airplane, and Papua New Guinea is now threatening a range of nasty things against Australia, of which this, apparently, is the most nasty:
The most serious step being contemplated is the suspension of significant elements of Australian aid deemed not essential to PNG, the Herald understands.
Yes, you did read that right. Papua New Guinea is threatening to cut off aid, from Australia to Papua New Guinea! Imagine the consternation that must now be sweeping through the Australian aiding classes. They do not want us to help them any more! Worse: Perhaps they do not think we were helping.
Is this an idea whose time has come?
For those of you in London, there’s a free showing of a new film on Wednesday looking at "the dark side of environmentalism". I saw Tom Clougherty on the internet TV station 18 Doughty Street (view recording) discuss the film against some statist from the Green Party. Clougherty’s view was that while there is something of the Michael Moore about this film, it makes an important point. It’s about an underdeveloped town in Romania full of unemployment and poverty. Capitalists want to create jobs by building an environmentally-friendly mine, but Western environmentalists swoop in from overseas and try to force the locals to stay poor, saying that the locals are happy being poor. The showing is at One Great George Street, Westminster, London SW1P 3AA. Doors open at 6:30pm, the film starts at 6:45pm, there is a Q&A session at 7:50pm, and there is a drinks reception at 8:15pm. RSVP to iea@iea.org.uk. View the trailer here:
The film is also available on DVD from here.
If this deal goes ahead, it will be the largest example yet of an Indian firm buying a British one. How the world has turned, 60 years on from the end of the British Empire in India.
Anglo-Dutch steelmaker Corus Group Plc is set to recommend a 4.1 billion pound takeover by India’s Tata Steel Ltd as soon as Friday, sources close to the matter said.
Corus’ board met on Wednesday evening to rubber stamp the deal but is waiting until Tata’s board meets, which is expected on Thursday or Friday, before making an official announcement to its shareholders, the sources said.
It will be interesting to see how those anti-globalisation campaigners, who in the past were the same sort of folk to demand that the rich West gives aid to “Third World” nations like India, respond to Indian business purchases of British and other European firms. That is the trouble with fighting evil capitalists – one minute they are wearing pin-striped suits and speak in posh English accents, the next, something quite different. It must be very annoying.
I cannot have a situation where businesses close haphazardly.
– Rt Hon Alistair Darling MP, speaking on Radio 4’s Today programme about the Sub-Post Office network, and neatly demonstrating the dirigiste mentality of the Scottish Raj
Tom Clougherty, the new face at the Globalisation Institute, linked earlier today to a fascinating Wired piece about a new way of extracting drinkable water from “thin air”.
Clougherty is wise enough to use the phrase “If reports are to be believed” when talking about the huge benefits that this invention might have. So, the question is: will it work?
It being, approximately, and give or take a big dollop of industrial (and presumably military) secrecy this:
“People have been trying to figure out how to do this for years, and we just came out of left field in response to Darpa,” said Abe Sher, chief executive officer of Aqua Sciences. “The atmosphere is a river full of water, even in the desert. It won’t work absolutely everywhere, but it works virtually everywhere.”
Sher said he is “not at liberty” to disclose details of the government contracts, except that Aqua Sciences won two highly competitive bids with “some very sophisticated companies.”
He also declined to comment on how the technology actually works.
“This is our secret sauce,” Sher said. “Like Kentucky Fried Chicken, it tastes good, but we won’t tell you what’s in it.”
He did, however, provide a hint: Think of rice used in saltshakers that acts as a magnet to extract water and keeps salt from clumping.
“We figured out how to tap it in a very unique and proprietary way,” Sher said. “We figured out how to mimic nature, using natural salt to extract water and act as a natural decontamination.
“Think of the Dead Sea, where nothing grows around it because the salt dehydrates everything. It’s kind of like that.”
The 20-foot machine can churn out 600 gallons of water a day without using or producing toxic materials and byproducts. The machine was displayed on Capitol Hill last week where a half-dozen lawmakers and some staffers stopped by for a drink.
More about this at engadget, where there is comment on the same Wired piece.
Do any of our more tech-savvy commenters have any other news concerning this apparently wondrous gizmo, or any opinions about whether such a thing is, in principle, likely to work?
“Teach you I cannot, my young Padawan.” As a science fiction reader I am used to meeting strange words and either guessing their meaning through context or not guessing and enjoying the story anyway. So I was only slightly hampered when reading a story in yesterday’s Times headlined “New York Mayor fights drain of IPOs to London” by my complete ignorance of what an “IPO” is and the complete failure of the story to enlighten me. You can tell me all about it in the comments if you must, but as far as I am concerned “eye-pee-oh” could be replaced by any other sequence of sounds, such as snurg-ah-poog or plibble. Plibble it is. Plibbles must be pretty nice things, because the mayor of New York is so concerned that all the plibbles New York used to win (apparently plibbles are things you win) now being won by London that he has appointed management consultants to investigate causes and possible remedies for the Great Plibble Crisis. Concern has focused on the fact that since the passing of the Somebody-Whatsit Act, London has gained a 26.4 per cent share of the global plibbles. Hurrah for London, I think. New York’s problem is that doing whatever you have to do to comply with the Somebody-Whatsit act before you can get your plibbles is one big hassle. So the plibbles go somewhere else.
Blimey, I could have saved Mayor Bloomberg a packet on consultancy fees and I still have no idea what a plibble is.
Come to think of it, anyone could work out that if plibble-getting is made tedious and expensive in your country then plibbleseekers will get their fun somewhere else.
Even if you do not know your plibbles from your twogbots.
This seems like a good idea
The Financial Services Authority (FSA) is to hold a six-week exercise to test the resilience of the UK’s financial institutions to an avian flu pandemic.
Starting on 13 October, some 60 banks, insurance firms and other financial businesses will take part.
The exercise will look at a number of factors including how firms could cope with a greatly reduced workforce
Yes, I know that we free market purists might argue as to why we need a big regulator like Britain’s FSA to set this up, but even in the absence of such a body, smart businesses would be looking to stress-test their systems against a potential serious problem like avian flu. And it is serious. Naysayers may jest about how much effort was expended on the Y2K technology issue (remember that?) but I am encouraged that these sorts of issues are taken seriously. The health of the London-centred financial system is critical, not just to the British economy, but to the wider trading system as well.
Tyler Cowen, hardly a scaremonger, has thoughts about possible preparations that should be taken.
There is a military coup in Thailand, a crazed leader of Iran denying the Holocaust and prattling about the return of the “12 Iman”; a Venezuelan demogague brandishes the work of terrorist sympathiser Noam Chomsky; there are riots in the streets of Hungary, a major hedge fund loses billions in the gas market.
What do the world’s economic markets do in response to all this? Well, as historian Niall Ferguson notes, they do remarkably little:
The price of crude oil for November delivery fell 5 per cent last week, even as Messrs Ahmadinejad and Chávez were holding their rant-fest. On news of the coup in Bangkok, the Thai currency declined by little more than 1 per cent against the dollar – nothing compared with its spectacular gyrations during the Asian crisis of 1997. Investors in the Hungarian stock market are not having a great year, it’s true, but recent political events have barely registered. If you invested in Budapest two years ago, you have still nearly doubled your money.
To see just how far politics and economics have parted ways, just consider which of the world’s stock markets have done best so far this year. In pole position is Morocco (up 58 per cent in dollar terms since January 1). Next is none other than Mr Chávez’s Venezuela, up 49 per cent. In third place is Indonesia, where three Christian men were executed on Friday for their part in sectarian violence, sparking riots (34 per cent). Russia, where it is bankers who get the bullet, is not far behind on 32 per cent.
He goes on to argue:
investors are continuing to mistake liquidity for security. Despite the much-trumpeted tightening of interest rates by the world’s principal central banks, the reality is that monetary expansion has barely slowed. In Britain, for example, the broad money measure M4 grew at an annual rate of 13 per cent in July, a remarkable figure. Money may be dearer, but it is still amazingly plentiful. That seems to be encouraging a rather cavalier approach to risk assessment.
So it would seem.
Mr H. Benn (the ‘Overseas Development’ minister) has announced that the British government will withhold £50 million (US$ 94 million) of taxpayers money that it was to pay to the World Bank to be lent out to ‘Third World’ governments.
Mr Benn said this was protest against the World Bank’s policy of demanding free trade and privatization in return for loans. Actually the World Bank does not do that very much any more. These days it normally just demands that a loan (for example) for education actually be spent on education – rather than go in corruption.
However, I still think the government was right to withhold the money (and not because I am against free trade or privatization – or think that the same economic principles can produce good results in one country and bad results in another, as a weird editorial in the Daily Telegraph claimed), but because I do not believe that taxpayers money should be taken by the government and given to the World Bank.
The World Bank should not exist (and nor should the IMF). If ‘Third World’ governments want state education (or some other folly) they should pay for it themselves – as they will have to after the loan money runs out anyway. All the loan achieves is to give them a debt to pay back on top of the future state education (or whatever) bill.
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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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