Samizdata

I am due for a fascinating teleconference in 10 minutes, but I thought this Glenn Reynold’s post nicely illustrated a real blind spot for libertarians. We tend to be market- and economics-oriented, and any concentration of attention in one area creates blind spots in others. One of those blind spots has to do with the economically irrational but irreducibly human craving for non-material benefits in the form of status, recognition, etc.

My historian-brother often says that one of the most interesting phenomena that he’s observed is the cross-cultural willingness of people to trade away economic benefits for status. I suspect that this is one example of that. So, in a surprisingly similar way, is being a politician. That’s an obviously poor economic move for most folks. But one of the drug dealers in Price’s book talks about how he likes the way he becomes the center of attention when he enters a room full of junkies. Politicians, I think, get the same thing, especially in the bubble-environments of Washington, or state capitals. I suspect, in fact, that people are, to varying degrees, hardwired to get an endorphin rush from that sort of attention, just as they’re hardwired in varying degrees to respond to drugs.

As I say, I don’t know if Levitt talks about that or not, but I think it’s one possible explanation for a lot of stuff that looks economically counterproductive.

I have a niggling sense that there is a lot more to be said on this subject, but duty calls. Go read the Instapundit post, and as always, be sure to click the concluding “Indeed.”

Sean Gabb now has a report up about his efforts to knock some freeness into the heads of those self-styled fair traders. And in Alex Singleton’s Globalization Institute email this morning was a link to a write-up of the Globalization Institute in the Church press, although how significant this particular example of the Church press is I do not know. Still, it all helps. See also this posting.

In the comments on that earlier posting that flagged up the meeting in the Church last Friday night, puzzlement was expressed about why so many of these Fair Traders are in favour of free trade for the rich countries, especially in things like agriculture, yet opposed to free trade for poor countries. How come? Are they not being inconsistent?

I can suggest a possible answer that makes sense of such an apparent contradiction. Suppose that (a) you are an egalitarian, and that (b) you think free trade is harmful to whoever has it imposed upon them. That would explain it, I think. Trade freedom makes rich countries poorer, and trade unfreedom makes poor countries richer. Total bollocks of course. Egalitarianism is stupid, and the claim that trade freedom makes countries poorer and that trade unfreedom rescues poor countries is the opposite of the truth. But if that is what you are and what you think, it becomes reasonable. As in: a madman is someone who has lost everything except his reason. Impeccable logic, based on false axioms.

The result of such agitation is actually to make rich countries richer, and to keep the poor countries poor, which is the very thing these self-righteous morons spend their lives saying they object to. But there you go. There’s one born every time a celebrity clicks his/her moronic finger on the telly.

For some further thoughts on these and related matters from me from way back, see this.

Today I went for a wander around Camden in London, visiting Camden Market, Camden Lock and The Stables, contiguous areas filled to overflowing with small shops and open air stalls selling exotic Goth clothing, lampshades made out of old computer motherboards, Tibetan jackets, New Age crystals, Latex fetishware, fur-lined handcuffs, AC Milan supporters posters, weird furniture made out of tree stumps, flashing clothes with fibreoptic weaving, magic mushrooms to go, bongs, ‘No one knows I’m a Lesbian!’ tee-shirts, and food from West Africa, Morocco, Japan, Indonesia, Lebanon, Korea, Venezuela, France, Italy, China, Jamaica, Thailand, Holland, Scotland and even England.

The political content was endless racks of tee-shirts emblazoned with Che Guevara, Bush=Hitler and McShit Hamburger logos and stands owned the Socialist Worker’s Party and various other fringe folk manned by quixotic and very earnest folks handing out “Bush is the biggest terrorist!” posters.

Now my guess is that 75% of the people who thronged around Camden (the crowds were dense over a very large area indeed) are more or less completely indifferent to those particular the messages and certainly 95% of the stalls and shops were not selling politically oriented things at all. Yet what was available was entirely of the left and almost all of it was either Communist (Che Guevara’s image was widely seen) and/or anti-American.

Right in the centre of the large shopping area called The Stables is a Cuban Restaurant called rather unambiguously The Cuban. Giving it the benefit of the doubt, I stuck my head inside as for all I knew the place was owned by some Cuban refugee who had fled Castro’s communist dictatorship. But no. The first thing I see is a large image of Che Guevara. The outside of the building has a sign saying this place brings “The Spirit of Havana in the heart of Camden”…

 

…which presumably means that criticizing the restaurant gets you dragged off to jail by uniformed thugs as that is truly the spirit of Havana.

Now if someone wants to portray a benign fantasy version of Cuba (“Castro chicken tenders!“), well that is entirely up to them. But the moment I see that Che image up on the walls, The Cuban takes a position on who ‘the good guys’ are and it becomes more than just a Cuban restaurant. Too harsh? Well imagine a German restaurant. Now put a picture of Himmler on the wall of that restaurant and suddenly the entire context of the place changes. I wonder how people would react to a Cambodian restaurant which offered a “Pol Pot Roast” or a “Killing Fields Kocktails!” whilst a smiling image of Pol Pot looked down on the gorging clientele. My goodness what fun that would be. Still, perhaps a closer examination of The Cuban’s menu may reveal such dishes as “Jailed Journalist Jambalyah” or “Dead Dissident Daquiris” whereupon my views of the place would have to change somewhat. I have not looked but somehow I doubt it.

But it got me pondering. I wonder how many of the anti-globalisation activists who probably regard areas like Camden as ‘home turf’ and perhaps even eat at The Cuban realise how the area only looks the way it does because of the global movement of goods within a market economy. Do they seriously think that there is a place like Camden anywhere in Cuba? Do they think the new Age crystals, the fetish shops, the Goth gear purveyors, the mountain bike shops and, hell, even the clothes they wear, the mobile phones they all carry, the iPods they listen to, would all be available in a politically directed command economy? Please, show me such a place.

The thing is, their own lifestyles and environments are examples of the benefits of what they profess to reject. Quite funny really if you think about it.

Paul Staines writes:

New data shows that the developing world’s share of global trade has surged to a 50-year peak. Rising oil and commodity prices coupled with vigorous global trade growth meant developing countries saw their share in world merchandise trade rise sharply in 2004 to 31%, the highest since 1950, according to WTO figures released this morning.

The data provides clear evidence that trade liberalisation continues to play a growing role in economic activity and is increasingly important for development and poverty alleviation. More countries are engaging in international trade and participating more actively in setting and negotiating trade rules.

Just like with India and Hong Kong, trade liberalisation is key to African prosperity. If we truly want to Make Poverty History, the world needs free trade – not protectionism.

How long Economics in One Lesson has been available to read free, online, I have no idea, but since she only just heard about this, I feel entitled to say with similar lack of shame (unless of course a fellow Samizdatista has already flagged this up and I missed it) that her posting was how I finally found out about this myself.

It has been a while since I read this book. The bit I recall with the greatest vividness concerned the broken window fallacy. This fallacy says, fallaciously, that broken windows are good for the economy because they are good for the window-mending business. What the broken window fallacy neglects to mention is that broken windows are bad for all the businesses that the window mending money might have gone to instead, but now cannot.

The most extreme statement of this fallacy is the claim that the ultimate window breaker, war, is good for the economy, because that way lots of work is “created” in all the industries that subsequently set to work to repair the destruction. When Keynesian economics was in its pomp, you did hear people actually saying this. Maybe, if those are the kind of circles you still move in, you still do.

Yet war is creative, in a back-handed way, and provided that you lose. It destroys wealth, but it can also destroy certain impediments to future wealth creation. Mancur Olsen, in his book (alas not available on line so far as I know) The Rise and Decline of Nations (lots of five stars out of five reviews here), says that, yes of course, losing a war does destroy wealth, but that it also destroys what he calls “distributional coalitions”. In plainer language, losing a war breaks up politically well-connected rackets, like state-enforced cartels and trade-unions. Thus the post-WW2 economic miracles of Germany and Japan.

This is what you would call a high risk strategy for achieving economic dynamism. I mean, just for starters, be careful who you lose your war to. Pick the wrong country to surrender to and you are liable to end up with an even huger, politically even better connected racket, in the form of your rapacious conquerors. In other words, broken windows followed by more broken windows, and nobody ever mending them.