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It is nice to see that a compatriot of mine is presently making the case for free trade at the WTO summit in Hong Kong, at which the usual bunch of vested interest and anti-globalisation protestors have shown up. Seriously, that anyone can go to Hong Kong and then attempt to argue that free trade is against the interests of the poor just boggles the mind. But they do. (link once again via Tim Blair). December 13th, 2005 | 4 comments - (Comments are closed)
 Those smart fellows at the Marginal Revolution economics blog like to track all manner of strange and innovative ways in which Man engages in the age-old routine of truck and barter. Sport has spawned all manner of new business enterprises in recent years and now it is possible for investors to build assets by investing in the future market value of footballers. Makes sense, really. These days football players, even quite mediocre ones – never mind great talents like Pele or George Best (RIP) – are paid enormous amounts of money in their careers. Rather like the bloodstock trade, I think. The idea of getting a financial stake in a player is also likely to bring investor pressure on players to be monitored off the field as well as on it (do we really want a potentially lucrative asset to be carousing down the pub?) Personally, I am sticking to equities, bonds, cash and a bit of brick and mortar. December 5th, 2005 | 4 comments - (Comments are closed)
My first posting on the Globalization Institute’s blog is about the almost hidden but massive transfers of cash by migrants workers to their families in under-developed countries. The following quote comes from Time magazine:
There are two things I especially like about this growing trend. One is that unlike other forms of aid (including private giving by Westerners), the money tends to be better spent, because the donor is immediately related to the recipient. The second is I think unique to migrant workers. Normally there is a dependency trap: the money coming in is for a set term and will only be renewed if the recipient pleads continuing poverty. But migrant workers who leave their families behind have a strong incentive to watch out for improving economic conditions back home. As families achieve a tolerable standard of living they tend to reduce the amount of migration. The whole bureaucracy of aid is bypassed. Thinking about it, perhaps giving a Christmas bonus of £100 to the office cleaner from Ghana or the Ukraine does more to make the world a better place than £200 given to an aid charity. We often hear about the benefits of cutting taxes, but here’s a new one. For each pound in taxes saved by low-income migrant workers, up to 40p will be transferred to a family in the developing world. That’s got to be a better return than the government makes of our money. December 2nd, 2005 | 40 comments - (Comments are closed)
The price of gold on the world commodities market is at the highest level since December 1987 (god that seems a long time ago). A number of reasons are given for why it is so strong, such as being a default resting place for investors who are shy of holding stocks, bonds or cash. Gold is also strong because commodity prices in general, such as nickel, zinc, iron ore and bauxite are being driven higher by the voracious appetite for metals and other goods by China. There may be another factor, though, which ought to set off a few red lights in the central banks. Gold is often a hedge for people against inflation. It seems a long time ago when Britain endured double-digit inflation, but inflation is creeping higher, although that may be simply due to the temporary effects of higher oil prices. Anyway, the gold stuff may be issuing a gentle warning. Let’s hope the Bank of England takes note of it. November 29th, 2005 | 18 comments - (Comments are closed)
From David Tebbutt:
It sounds more like a threat to me. At best, manipulated bullshit. Problem solving is a fine thing, but the fewer conversations and networks devoted to “global” problem solving, the better, I would say. This is, I think, because “global” bundles together lots of difficulties into one huge impossibility, which you then blame on global capitalism. But the way to actually solve problems is to do what actual capitalists actually do, which is break the problems up into solluble particles. Still, “actionable” means that someone will at least be able to sue these people, yes? No. Non-responsibility for resulting chaos is of the essence of gatherings like this. November 25th, 2005 | 45 comments - (Comments are closed)
I have devoured pretty much most of John Le Carre’s spy stories, such as The Spy Who Came in From the Cold, Tinker, Tailor, Soldier, Spy, A Small Town in Germany and Smiley’s People. His novels have a chilly, grittily believable quality that stands in contrast to the sophisticated romps of Ian Fleming (Who is actually a pretty good read, as Anthony Burgess once said). More recently, Le Carre, bereft of a Cold War to provide his theme, has turned his attention in a different direction. He has turned it towards the supposed evil of global capitalism and big drug firms. The Constant Gardener, a film which hammers the allegedly rapacious activities of drug companies, has now been turned into a film starring the British actor Ralph Fiennes (whom I once saw live giving a somewhat histrionic performance in London in the Ibsen play, Brand). The Social Affairs Blog, has a fine demolition job of the book and film here by UK academic Kenneth Minogue. Minogue’s treatment of the film is brutal. Now I can see why, as pointed out on this blog concerning the firm Pfizer, some drug companies get a deserved hammering. But what I don’t quite understand is the sheer venom directed at drug firms in general by people who presumably must realise that developing and researching drugs can be highly expensive. If drug firms cannot be sure that their products won’t be instantly copied by other manufacturers, who can be sure that drugs to combat AIDSand other killers would make it to the marketplace? The issue of intellectual property rights does of course remain a very tricky issue among libertarians, but do the opponents of any such property rights imagine that we can or should leave drug development to the State, given the experience of our own Soviet model of national health care? It seems as if the attacks on drug firms stems from a desire to seize the hard work and graft of others because one has a “right” to curative drugs. But if, as Le Carre and others contend, we should give drugs to the poor of the Third World for nothing, the bill for this could be enormous. I don’t really like the idea that the wealth creating capabilities of people should be held in partial ransom by the open-ended needs of billions of other people. On the subject of AIDS, it is always worth reading Andrew Sullivan, who has HIV, on why he loves drug companies. November 23rd, 2005 | 36 comments - (Comments are closed)
Those strange-sounding financial entities known as hedge funds, which are sometimes depicted as the Darth Vaders of the modern market, often have rather odd or dull names. So I was glad to come across a firm in the United States with a name that proudly celebrates the free market with unabashed gusto. The firm has a great merchandise selection, too. November 17th, 2005 | 7 comments - (Comments are closed)
Hollywood Director James Orr points out some interesting factoids about how megacorporate movieland is seeing the game shifting before their very eyes. The internet changes everything… we just do not know precisely how yet. November 10th, 2005 | 3 comments - (Comments are closed)
It is often said by libertarians, or “radicals for capitalism”, to coin Ayn Rand’s phrase, that Big Business is often lousy at defending the market and in fact is only too happy to co-opt the State to make life hard for competitors. I was reminded of this fact when noted Libertarian Alliance author, Sean Gabb, made much of this point in a talk on Friday evening. It appears that the U.S. retailing giant WalMart may be guilty of this by lobbying for a rise in the U.S. minimum wage. Debate continues as to what exactly is the impact of a minimum wage on the unemployment rate in a country, but in theory at any rate, raising the marginal cost of hiring a worker presumably makes it less likely that said persons will be hired, other things being equal. Marginal Revolution, the U.S. economics blog, has a take on the issue here. Other useful discussions at the Von Mises Institute here, and taking a more supportive view of such laws, is this paper here. Even if one takes the assumption that minimum wage laws don’t always raise unemployment overall, the businesses that lobby for them may think they do, or think that by raising their would-be competitors’ costs, that it will strengthen their own market position. In short, there is nothing very altruistic about it. And Walmart, to take this firm as an example, is also renowned as a beneficiary of eminent domain land-grabs. Funnily enough, this has become something of a cause celebre for parts of the left, who ironically, are relying on the same sorts of defences of property rights that I referred to a few days back on this site. It would be nice if the left embraced property rights as a cause. Stranger things have happened. October 30th, 2005 | 81 comments - (Comments are closed)
I went from Instapundit to this this presumably not-so-instant pundidtry by Glenn Reynolds called The old industrial state, and from there, via an eBay reference, to another Glenn Reynolds piece called Is small the new big?. The idea here is that that new big businesses – eBay, Amazon – are getting big by helping the small guy to do his thing, unlike the old big business, which was an economically deluded tyrant. But did not the big, bad old industrial system – which only became a “state” in the years of its dotage – also empower people? For as long as it was properly run, it did. The Model T and the Sears Roebuck Catalogue empowered the little guy, just like eBay and Amazon now. The Model T was the basis of many a small business. Sears Roebuck made it possible for smaller operators outside the big cities to function on level terms with the city folks by letting them buy the same stuff and get their money back if not satisfied, just as if they were buying it from a big city store. Most of the USA still lives in small towns, I am constantly told. The old industrial “state” is what enabled them to do so, comfortably. More recently, the personal computer industry – now dominated by big, bad, old Intel and Microsoft – has empowered millions of individuals, and made possible the growth of enterprises like eBay and Amazon. Empowering the little guy is not a new idea. I can still remember the thrill of empowerment that I felt from my first computer, an Osborne 1. There are two quite distinct ideas rubbing together here. One is bigness, and its alleged badness. The other is the genuinely bad idea that it is both smart to try to – and actually possible to – insulate huge numbers of people from market pressures, indefinitely. J. K. Galbraith, quoted by Reynolds, thought that this could happen, and his big idea, if you can call it that, was that business bigness meant being above and beyond market realities. The truth is that a big business that ignores market realities is heading for a big fall. But the little guy is just as prone to economic delusion as the big guy. That is often why he is so little. Like the guy making a small fortune in sport, he started out with a large fortune. The ultimate embodiment of the Galbraith delusion was of course the USSR, which copied the bigness of US business without copying any of the market responsiveness that brought the USA’s business bigness into being in the first place. The USSR just stole bigness from others, and eventually the loot ran out. What is true is that formerly successful and still established ways of doing things can get into serious trouble, and because they once were so successful, they can last way beyond their days of success. There is a lot of ruin in them. Big and successful businesses become Galbraithian. They become, on a tiny scale, economically speaking, the USSR. But they cannot last, any longer than the USSR could. Not being able to murder all their rivals and critics, they last a lot less long. Business bigness is the consequence of a new business idea becoming thoroughly understood by a few exceptional people, who proceed to organise it, and then to triumph over almost all of their rivals. Then, times change, and that kind of bigness needs to change too, but by then millions have got used to it and cling to it. That is the problem of the old “industrial state”. What we are living through is neither the end of bigness nor the beginning of individual empowerment by bigness. It is a transitional period, between one lot of bignesses and other sorts of bigness. And these new bignesses will be just as like to give rise to new Galbraithian delusions as the earlier ones were. And let us also give credit where credit is still due. Those big old businesses got big in the first place by doing lots of empowering of the little guy. To put it in Reynolds-ese: the old big also did small. October 18th, 2005 | One comment - (Comments are closed)
Just over a year ago I spent a very happy few days in northern California, spending one very long and pleasant day in the state’s Napa Valley wine region. The region boasts some of the best wines in the world, including the now-famous wineries of Robert Mondavi. Mondavi’s wines caused a global sensation in the trade when, during a “blind tasting” in the early 1970s, wine critics rated his produce a notch above the competition from more exalted premises in Bordeaux and Burgundy. The horror! This article very nicely draws out how the challenge of New World wines from California, Chile, Argentina (a magnificent producer of wine), South Africa, New Zealand and Australia has led to a fairly grumpy response from the traditional centres. This is perhaps understandable. The French produced some of the finest wines of all time, with only a bit of competition from the flowery Hocks and Moselles from Germany and the likeable Riojas in Spain and a few good ones from Italy. About 20-plus years ago, you could walk into a supermarket and choose from only a relatively limited range of wines, much of it fairly basic plonk. Globalisation has put some of the world’s most far-flung wine producers into the reach of Joe Public. All we need now is a similar global “race to the top” in the production of effective hangover cures. October 15th, 2005 | 41 comments - (Comments are closed)
Richard D. North, Rich is Beautiful, (page 199). September 29th, 2005 | 7 comments - (Comments are closed)
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