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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In this month’s lead essay at Cato Unbound, ‘Why Aid Doesn’t Work,’ William Easterly makes a rational case for directing international aid dollars toward programs where the results can be objectively measured by hard scientific methods. He is persuasive, but in the end, the scientific method is still just a patch, a facsimile for what is really missing: legality.
In the developed world, the distinction between government and non-government organizations is meaningful, but not in places where government is corrupt and ineffective. In a lawless state (ie, one where corruption dominates the channels through which people get things done, for good or for ill), both aid organizations and entrepreneurial warlords effectively operate by the same rules. One’s moral orientation is not the point. If the basic sphere of operation is illegal (in the deepest sense of the word), then there is little chance that your efforts will result in enlightened, long-term improvement. Will Connors, a Chicago journalist and blogger working in Ethiopia has written compellingly about corruption in the aid community there.
Any aid-before-government aparatus is still going to break down – it will just do so further down the road. As Easterly suggests, you may demonstrably produce healthier, taller, better-educated children by buying them meat to eat twice a week, but if the best they can hope for is to grow up to be a corrupt low-level official, have you really accomplished anything lasting?
Better to see aid dollars spent as investment dollars – sunk into private businesses, rather than programs of any kind. It is possible. It is even possible that the weaker the local (corrupt) government, the greater the opportunity for leveraging capital investment. In Carol Pineau’s documentary, Africa: Open For Business, the CEO of Daallo, a Somali airline, marvels that the only reason he is able to thrive is that there is no government at all in his country. No government means no corruption, he observes dryly.
Entrepreneurs are the leading men of capitalism, the venturesome protagonists who move the plot forward. But economic theory gives them few if any lines to read.
The Economist.
I think that the economics profession is showing a bit more interest in entrepreneurship, at least since the 1980s. The “Austrian” school that gave us the likes of von Mises, Ludwig Lachmann and Israel Kirzner, for instance, puts the entrepreneur pretty much front and centre of the economic picture. For sheer gusto in defending the entrepreneur, there is still to this day no better advocate in my view than George Gilder.
Should money be as free as speech? After all, it is also a form of communication.
In the past year, the internet has spawned a few companies aimed at helping individuals borrow and lend without bothering to involve a bank or credit agency. Zopa, based in the UK, aggregates individuals into groups for the purpose of making small loans, with a socially conscious slant. In the US, Prosper just launched a sleek, well-designed person-to-person lending site. Borrowers can also form groups on Prosper, for the sake of leveraging better interest rates. I also know of at least one nascent project, Bruce Boston’s Quid St., which aims to aggregate individuals for the purpose of making capital investments (as opposed to loans). I met Bruce recently, and he mentioned what an influence gaming had on his view of how to build an online marketplace. Which put me in mind of the Park Paradigm, a blog about digital markets whose authors think future finacial markets may evolve out of sports book and gambling sites. And not entirely unrelated note, Paypal made it possible just this week for people to send each other money anywhere, via cell phone.
What we are witnessing here, I think, is the creation of a new international capital market.
But we already have an international capital market, you say. Well, yes and no. When it comes to lending and investing and otherwise redistributing capital, we make do with a rudimentary, feudal system that has never really caught up with our momentum toward the free flow of other types of currency–cash, ideas, information, energy, goods and services, even political will. We have developed extremely liberal mechanisms for exchanging these forms of dynamic and stored energy, but capital remains over-managed, its governance, distribution and oversight resting in the hands of a select few.
The invention of a truly open and free capital market will be as significant a development as the invention of the printing press, affecting the free flow of wealth and opportunity much the way that invention affected the free flow of intellectual capital. 500 years after Gutenberg, it’s hard to imagine a world without cheap, plentiful and ungovernable words. One hundred years from today, it will be just as hard to remember a world where capital flowed through banks and currencies were government-issued.
Capital, and as a consequence personal wealth, will exist in a much more fluid and dynamic state than it now does, and all our discussions about wealth, wages and income will take place in an entirely new financial language. We may not end up solving poverty, so much as rendering it obsolete, all because of the technology-driven privatization of capital that is just now beginning.
That is the conclusion of research published today by Mischa Balen. Over a billion people worldwide do not have access to safe drinking water, and 2.6 billion people have no sanitation facilities. More than two million people die each year from diarrhoea, and over six million people are blind as a result of trachoma, a disease strongly related to lack of face washing. In Sub Saharan Africa, 42% of the population lacks access to decent water. This state of affairs, he finds, is caused by state failure in water systems.
What can be done? Where the private sector has been called in, it has prevented wars and conflict by creating a system of property rights and acting as an incentive to conserve; increased access to clean water; increased the treatment of sewage, thereby lowering infant mortality; cut politicisation from the supply of water; promoted sustainable development by reducing wastage.
That is great. Unfortunately, ideological opponents of markets are campaigning heavily against the private sector. They choose, he says, “not to compare private provision in reality with state provision in reality, but private provision in reality with a mythical, utopian state provision which does not exist in the real world.” No change there, then.
While activists call for consumers to buy Fairtrade coffee, critics – like the author of the documentary The Bitter Aftertaste – say that the achievements of the Fairtrade movement are too modest. Hostility to the movement is on the rise from right and left alike. As Reason magazine puts it:
The movement has always aroused suspicion on the right, where free traders object to its price floors and anti-globalization rhetoric. Yet critics from the left are more vocal and more angry by half; they point to unhappy farmers, duped consumers, an entrenched Fair Trade bureaucracy, and a grassroots campaign gone corporate.
It has always seemed to me that there is a better, more sustainable approach to raising living standards. That approach is to help farmers move away from just growing coffee and exporting the beans (with very little processing) to the developed world. If coffee-producing countries actually did the processing and packaging, and even stuck their own trademarks on the finished product, developing countries would be able to capture more of the value in a bag of coffee sold in shops in the high street.
When I’ve spoken to Western companies selling Fairtrade produce, they never seemed all that interested in the idea – or they though it was not feasible. So I am delighted to have found a company that actually does it: coffee grown in Peru and Costa Rica where the packaging and processing is also done there too. I went to their UK online store and bought some which I will be tasting in the office on Monday, but it strikes me as a superb way of increasing living standards. More information is here.
I have always found group names quite interesting, such as a ‘crash’ of rhinos, ‘school’ of fish, a ‘gaggle’ of geese, a ‘stupidity’ of politicians, a ‘conspiracy’ of lawyers, etc… but what is a collection of French students to be called? Perhaps an ‘unreasonableness‘? Or would it be a ‘perversity’? Or maybe a ‘delusion’ of French students?
Three hundred thousand of them were protesting and/or rioting because of attempts to change the laws that make no business in their right mind want to hire them in the first place. This is because if they turn out to be indolent layabouts, a company is still not allowed to fire them. So, as unemployment approaches 10% in France (or quite a bit higher according to some), demonstrating that something is just a tad wrong with the ways things work in France, these clever chappies want to motivate employers to continue to not hire people. Outstanding.
There is a lot of stuff about Dubai at the moment. The issue of Dubai Ports’ purchase of P&O and the reaction by certain American Democrat and Republican politicians is a massive story Stateside, though it has not registered much in the UK, unless you are a reader of the business sections. There is a smell of protectionism in the air in Europe too, with a number of European states scratching each other’s eyes out about merger and acquisitions involving banks and utilities. Plus ca change..
Dubai is now a major story on a number of fronts. The BBC recently ran a series of programmes about the incredible amount of construction happening there and the local magnates and immigrants who are driving the economy forward. A vast artificial archipelago of homes and estates has been built into the Gulf. Dubai is also a major business and media centre, a place where a lot of sporting and cultural events goes on. Dubai is also becoming one of the major venues for business conferences in areas such as finance.
So it seems to me that even with all the reservations one might have about that part of the world and the islamist threats not far away, Dubai’s vibrancy is a sort of Good Thing. The place has, potentially, the capacity to exert the same impact on parts of the Middle East as Hong Kong did on mainland China. Perhaps it is all a bubble and will go up in smoke, as the Eyeores out there might think, but on the whole I am optimistic. Let’s face it, pessimism is a sort of cop-out.
May the meme of liberty spread out from its borders and confound the naysayers. Meanwhile, this man is doing something highly admirable.
The Oscars are nearly upon us. (Okay, please try to keep reading) One thought prompted by this circus and what goes on in films is how films can carry messages very different from the intentions of the film-maker. A classic example is the 1987 film, Wall Street, in which Michael Douglas gave what I thought was his greatest performance as Gordon Gekko. Gekko is what your average lefty Hollywood producer imagines is a capitalist: incredibly greedy, callous and crooked, stamping the lives of good honest hardworking people, blah, blah, blah. And yet we know that in the course of the speech, Gekko gives his tremendous “greed is good” speech, which I sometimes think reads like Ayn Rand on acid.
A friend of mine, Libertarian Alliance founder Chris Tame, once told me that during this stage of the movie, he burst into applause, much to the surprise of the other cinema-goers. I wonder how many other folk have had the same reaction to a speech or line in a film where without realising it, a pro-capitalist point has been made in a way the director probably had not intended? Has anyone got any examples?
The ideal gift idea for that collectivist friend in need of enlightenment and help in doing maths. (Thanks to those clever folk at the von Mises Institute.)
Clive Davis approvingly quotes a book by a fellow called Rod Dreher, a “crunchy conservative” (whatever that is) who is, we are told, a passionate environmentalist, a disliker of suburban sprawl, shopping malls (oh, the vulgarity!), television (ditto), McMansions (huh?) and other regrettable features of consumerist, dollar-obsessed America. Instead, this fellow, who sounds rather like an American Roger Scruton (of whom I am an admirer, at least in parts) is a fan of government restrictions and regulations, and mentions the case of the U.S. Pacific Highway, left pristine and free of crass development by land-use regulations.
There is nothing actually all that new in conservatives embracing controls on development. The very word, conservative, is based on the desire to conserve and protect what exists from the new. During the Industrial Revolution, conservatives like the Poet Robert Southey railed against what they saw as the ugliness of industrialism and the associated sprawl. (Some of the dislike was also based on snobbery and fear of an pwardly mobile and undeferential middle class). The trend has continued. It was that perfect symbol of cuddly English fogeyism, Sir John Betjeman, who took potshots at suburbia, penning one of his most famous verses about that place to the west of London known as Slough. (The former Poet Laureate asked Hitler to bomb it).
What is so striking is how unoriginal and old-hat all this sort of thing is. More interesting to me, however, are those writers who do not imagine that shopping malls or mock-Tudor mansions in Surbiton deserve our scorn. Virginia Postrel has recently written approvingly of a book actually describing sprawl rather than automatically condemning it.
And let’s face it, most of us, particularly those with children, live in suburbs or are moving there. It is a conceit, I reckon, of people who have no children, and who do not need the space, to take potshots at those who have decided to leave the supposedly hip inner city. It remains a mystery to me why the desire of people to live in a bit of space and comfort drives certain intellectuals nuts. Maybe it is the garden gnomes.
“There were Eastern men in felt hats with giant rims of rich gleaming fur, talking to long-bearded Jews about racks of animal pelts – the faces of small nasty critters gaping blankly at the sky. Chinese carrying crates of what he had to assume was China, coopers repairing busted casks, bakers hawking loaves, blonde maidens with piles of oranges, musicians everywhere, grinding hurdy-gurdys or plucking at mutant lutes with huge cantilevers projecting asymmetrically from their necks to support thumping bass halyards. Armenian coffee-sellers carrying bright steaming copper and brass tanks on their persons, bored guards with pikes or halberds, turbaned Turks attempting to buy back strange goods that (Jack realised with a shock) had also been looted from the Vienna siege-camp…”
Quicksilver, by Neal Stephenson, page 420.
The above passage relates to when one of the central figures in Stephenson’s marvellous Baroque Trilogy enters the-then famous Leipzig fair. What struck me about this section of the book was Stephenson’s brilliant description of the sheer fun that markets can involve. (Yes, the curmudgeons out there will start muttering about the triviality of reducing market economics to fun, good heavens). His description even reminded me of a more modern market: the futures exchange in London’s Cannon Street. I used to visit the LIFFE building and would look down from the gallery to look at the sea of men – not many women – trading odd-sounding things like short-sterling futures and options, gesticulating at each other in small groups, more often resembling folk on the verge of a pub brawl than a place where gazillions of pounds, dollars and euros were being transacted.
We are so used to critiques of capitalism from people who decry the supposed coldness and soulnessness of markets, unlike the supposedly warmer and more fulfilling communal lifestyles they claim to favour. And yet as Stephenson has reminded me, the market is that supreme example of social interaction and co-operation, often gaudy and loud, alarming even, but never dull.
One of the advantages of having a comments section is providing me with new ideas to write about, even when the comment in question is so flat-out wrong that it makes me gape with amazement at the screen. In my recent post about the economic fallacies surrounding immigration, a commenter opined that Indian immigrants into the UK were leeching money out of this country by not re-investing it in new businesses but merely writing cheques to “inactive” folks back in the old homeland.
It is a lousy argument on a number of levels, and I am not even going to dwell long on the obvious dangers of inciting distrust and hostility towards economically successful immigrant groups and accusing them of not being sufficiently “patriotic” by not spending all their profits in Britain. The argument also fails because it ignores the subjectivity of economic value. If a businessman earns a million pounds in profit from a drycleaning business in Birmingham and sends the odd cheque back to his aged relatives in Bombay, then how is economic value being destroyed? In the eyes of the businessman, helping his loved ones is worth more to him than investing that money in something else, even though other people might disagree with that decision and think him to be deluded. It is none of my business to force a change in that decision.
Also, that businessman is doing something that supporters of a liberal civil society have traditionally supported: philanthropy. How can it be wrong for a man to steer a portion of his wealth to his dependants, educate them, feed and house them? Who gives any entity the right, least of all the State, the power to say yay or nay to that decision? The argument that such transfers are wrong is an echo of the old Bethamite notion that the State is entitled to seize wealth if that maximises the “greatest happiness of the greatest number”.
A final point. No doubt large sums of money are paid by immigrants and migrant workers back to the points of origin all the time. This has happened for centuries. These transfer often sustained people in great hardship.
I have come across some dubious economic arguments in my time, but the idea that immigrants paying money to their folks is some sort of parasitical waste has to be one of the weakest.
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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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