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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A truly bizarre article has appeared in the American Prospect arguing that President Bush’s proposed social security privatization should be opposed. Why? Because social security privatization has happened in Britain and has been a disaster.
How odd. I live in Britain and work in an economic think tank, and I never knew that Britain had privatized social security. Indeed, the Inland Revenue (Britain’s equivalent of the Internal Revenue Service) wrote to me recently on the subject of my state pension.
Social Security Privatization was floated as an idea after Labour came to power, but it has never become government policy. It was advocated by Frank Field MP, then the Minister for Welfare Reform, who soon after left the Cabinet.
The Prospect article is, frankly, drivel. Social security privatization has not happened in Britain.
Dr Eamonn Butler has more on the UK’s pensions on the ASI Blog.
He may not be the sort of man who gets the attention of the ordinary citizen, or the sort of man one talks about down the Dog and Duck on a Friday night, but New York Attorney General Eliot Spitzer, wannabe Democrat politician and formidable lawyer, is making quite a name for himself as a legal terror of big Wall Street businesses, launching a flood of suits against insurers, brokerages, fund management companies and banks.
Some of his suits may have an element of justice behind them and no doubt he has calculated that bashing the Gordon Gekko classes makes for good copy and will no doubt endear him to the sort of folk who regard Michael Moore as a political seer. To the rest of us, however, who make a living in the financial markets, his zeal is troubling. Take the recent so-called “scandal” surrounding the case of mutual fund firms which allowed certain types of quick-fire trades to happen in and out of their funds. The activity, while not illegal, is considered harmful because it can damage the long term investments of ordinary investors. Well maybe, maybe not. I find it worrying, however, that the cumulative impact of Spitzer’s energies will be to push up the costs of doing business in the U.S. capital markets, and drive many smart would-be financiers into other fields.
We tend to forget that despite high-level scandals such as the collapse of energy giant Enron, the world economy has greatly benefitted from the efficiencies and new products driven by the entrepreneurs of the modern age. My worry about the whole raft of laws spawned in recent years, such as Sarbanes-Oxley or even the awful Patriot Act, is that financial innovation will be curbed. And as a result, many businesses will shun the public listed stock market and choose to go private instead if that is the way to avoid the glare of the Eliot Spitzers of this world.
Regulatory growth is not a sexy subject, I admit, but let’s not forget that the destruction of wealth and entrepreneurial morale will end up biting us in the economic behind if we don’t take a full regard to the effects.
I like airplanes, but am rather suspicious of this huge new Airbus that they have just rolled out, handsome though it does look and useful though it will surely be in many circumstances. In particular, I suspect that the A380 is costing Europe a whole lot more than is being officially suggested, and that Boeing decided not to build a similar aircraft for good, loss-avoiding reasons.
Well, I still do not know very much about Airbus finances, but this story certainly backs up the costing-more-than-they-are-admitting aspect:
TSUNAMI-struck Thailand has been told by the European Commission that it must buy six A380 Airbus aircraft if it wants to escape the tariffs against its fishing industry.
I realise that it is carrying the search for a silver lining to absurd lengths to say such a thing, but one good thing about this whole Tsunami horror is that it has brought this EU vileness rather more out into the open than would have happened otherwise. As it is, the combination of nastiness and lack of political sensitivity being shown by the EU is extraordinary even by their low standards. Do they not see that the Tsunami has somewhat changed things?
The Thai trade negotiators, not unreasonably, seem to betting that things are indeed now rather different. They seem to be calculating that, if they simply expose the nature of the deal they are now being faced with by the EU, the EU will back down in the face of worldwide disgust, not least within Europe itself. The Thais will get their aid. They will be allowed to sell their keenly priced fish products without punitive tariffs being slapped on them. And they will not have to buy six of these damned great airplanes unless they decide that they want to. All of which is a lot to hope for, but at least they may get more of what they want than they would have done if the Tsunami had no struck.
The EU Referendum Blog has more on this whole sordid episode:
The aircraft will cost Thailand some £1.3 billion – nearly the amount that all 25 EU members states have pledged in tsunami aid to the whole affected region.
Richard North also points out that Thailand was being shafted before the Tsunami in a similar manner. This is not about the EU getting nasty; it is about it remaining nasty.
But that is the EU, naked in tooth and claw. While workers from across world are on the ground, helping to rebuild the Thai economy, EU officials are also right in there – undermining the basis of any recovery.
And according to North, Thailand is not the only country that is being “encouraged” to buy Airbuses with EU trade policy concessions.
The irony is that by swapping a bit of freer trade for aircraft orders, the EU is agreeing, reluctantly, to do itself a favour. It is agreeing to impose the terrible burden of cheaper goods upon itself. But even when it does good things, it cannot seem to help stirring in bad things, like flogging unwanted airplanes.
I was so struck by the hostility expressed inthe comments section of my previous post about Virgin airline boss and entrepreneur Richard Branson, in some cases for quite valid reasons, that it got me thinking of whether there is, in today’s business world, any entrepreneur who would pass the kind of harsh ideological standards we libertarians might want to set and be able to become a major business player.
I doubt it, sadly. If I am wrong about that, comment away.
With all the understandable attention being focused on the dreadful situation in the lands skirting the Indian Ocean, there is always a danger that disasters of a different, more Man-made kind, get overlooked. Well this week the German statistics office reported a dreadful set of unemployment figures, showing the number of jobless in Europe’s biggest economy to be at the highest level for seven years
A Bloomberg report on the story contains the following passage:
New measures cutting benefits for the long-term unemployed took effect on Jan. 1. Those without a job, including people previously registered as social-welfare recipients rather than as jobless, will also face increased pressure to accept job offers or risk losing benefits. The changes will add an as yet undetermined number of people to the January jobless total.
But it is clear that the German authorities are still tinkering with the issue. That 10.8 percent of the working age population of such an important country should be out of a job is a disgrace. What I find odd though is how little outraged commentary in the economics part of the press there is about this. It is almost as if the European chattering classes have come regard this problem in Germany, and also France, with an air of sullen resignation. Of course, dealing with it will involve lots of vulgar, Reaganite actions such as deregulation, tax cuts to spur business formation and the like, which of course goes against the grain of Germany’s ‘managed’ form of business so beloved of leftist commentators like Britain’s own Will Hutton.
Germany needs to get its act together. Some 15 years since reunification with the eastern part of the country, Germany has failed to live up its early promise. With so many young people, including those from immigrant backgrounds, on the dole, no wonder commentators wonder about the social fabric of that country. They should.
Entrepreneurship does not seem to get a very fair run on our main terrestrial television channels, as far as I can tell. The BBC is a particular offender. So credit is due to the BBC for a programme that shows how contestants with business ideas compete for money and interest from a panel of venture capitalists.
I watched the programme on Tuesday evening, and after my initial reservations about the format I became pretty engrossed. At the end, the final contestant, who eventually negotiated a deal where the others had failed, came across as such a smart fellow that I would have invested my own meagre funds in his idea.
The impression I got was that the producers asked the panel of VCs to play the role of flint-faced, capitalist bastard. They certainly succeeded. I disliked all of them intensely. No doubt that was the goal of the producers, but despite all that, I could not fail to be impressed by the enthusiasm of the wanna-be entrepreneurs.
The BBC may not fully realise it, but it is spreading the entrepreneurial meme.
As regulators impose more onerous capital adequacy and reporting requirements on the Western world’s banks, investment firms and brokerages, demand surges for increasingly sophisticated computer infrastructure to keep track of all the new systems deemed necessary to make the regulations work. As a result, demand is rising, according to this Financial Times article, for graduates with science degrees, especially in the field of physics. And it does not come as much of a surprise to learn that Britain’s mostly state-run education system is not doing a very good job at churning out young physics students. I am shocked, shocked to hear this!
I would greatly prefer it if clever folk with scientific knowledge were engaged in the potentially fruitful areas of nanotechnology, biotech, aviation and civil engineering, all fields likely to see continued rapid growth, than working to make increasingly Byzantine bank regulations work better. It looks like a waste to me. We want our budding Isaac Newtons and Richard Feynmans working on spacecraft, not greasing the wheels of the latest EU banking directive.
“We are not gods. We cannot create wealth out of thin air. Western wealth is just a function of colonialism or, in its current form, neo-liberalism – of taking resources from countries like Ethiopia. Neo-liberals then try to justify this by pretending that they have ‘created’ the wealth they have.”
– Left-thinker
Walking past a newsstand near my office yesterday, I saw the banner headline “Tube Bosses Buy Parts on eBay”. The accompanying story told us, in faintly mocking tones, how engineers working on the London Underground system have resorted to using the online auction firm because the parts they need are so old that they cannot get the pieces they need from regular stock.
Now it may at first appear a terrible thing that our metro systems are so old that the folk running them have to resort to an online auction set up by those vulgar American geeks from their Silicon Valley offices to get the stuff they need. But (drums roll!) I have a certain admiration for the Tube staff who had the entrepreneurial savvy to make use of the amazingly successful eBay platform. If the power of the internet can make my journey to work a bit smoother, I ain’t complaining.
It makes me wonder how many other major businesses are resorting to services like eBay to solve their inventory supply needs. I think it is still not yet possible for an airline to buy jet engines that way, though you never know. Is capitalism great or what?
“The flat tax makes sense” says The Daily Telegraph this morning, in an editorial which coincides with the release of the Adam Smith Institute report on this. In the US, President Bush has identified tax reform as one of his top three priorities – along with pension and court reform – for his second term. And many of his advisers are keen for him to tear up the thousands of pages of the federal tax code and replace it with a single tax rate of 17 per cent, and even that payable only on incomes over $36,000. Every time in the past that the US has slashed its tax rates – under Coolidge, Kennedy, and Reagan – it has enjoyed a boom, and the US Treasury has actually raked in more taxes, and with the richest taxpayers contributing a far greater proportion. So this idea seems like an all-round winner.
Bush must be cheered by what he sees in other countries, too. A number of the EU’s new members, like Slovakia and Estonia, have gone for the flat tax. So has Russia and the Ukraine. Hong Kong too. Even China is thinking about it.
There’s a good deal of interest here in Britain too. That’s partly because our clever Chancellor of the Exchequer has made the tax code so complicated that nobody understands it. Tolley’s Yellow Tax Guide, the professionals’ bible on the UK tax system, now runs to an unliftable 7000+ pages across four volumes. People are hungry for the change. And so, in both the UK and US, it’s worth pushing for.
Update: Poland is bringing in the flat tax too.
Anti-globalizers fail to look at the world in an aggregate way. Instead, they base their beliefs on anecdotal evidence. They find a worker in a factory who has been badly treated and blame this on globalization, and label all factories producing for Western companies as sweatshops. But they turn a blind eye to the big picture. They do not see the effect of inward investment in creating competition for labour, which pushes up wages and conditions. They do not know why the Asian Tigers are now rich. They do not see the economic growth rates of those countries – like India – who have liberalized, believing that globalization simply produces poverty. Indeed, they tend not to use any aggregate data at all. Because the big picture does not fit in their worldview, they junk it. They stick their fingers in their ears and then continue to argue against globalization with anecdotes.
The anti-globalizers are very good at confusing capitalism with absence of capitalism. They point to countries which have not liberalized and are therefore poor, and then blame this poverty on globalization. Because the facts do not fit their worldview, the facts must be wrong.
They want those in poor countries to become rich but without making the same ‘mistakes’ as Western countries. To the extent they support trade, it is a very odd form of trade. It involves people doing exactly the same type of work as their ancestors did, but with the wages being higher. They regard trade as a redistributive process rather than as a way of creating wealth. They do not see how wealth creation is anything more than a capitalist myth – after all, they say, we live in a finite world. All the evidence for the existence of wealth creation is ignored, because their worldview is trapped by the Fixed Quantity of Wealth Fallacy.
The anti-globalizers claim that the environment is getting worse. But the facts are not on their side. They look at the roads in London, see lots of cars and say that air pollution is getting worse and worse. They fail to look at the data – they do not need to because their worldview tells them that the environment is getting worse. The data however shows that the air quality in London is the cleanest since records began in 1585. On most measures, the environment is getting better.
Nevertheless, in the name of helping the environment, they promote the idea of a future Britain where we all live simpler lives, use local currencies, work locally and buy from local organic farmers. They have a romantic image of the Middle Ages economy, with people all happier, picking buttercups in the fields. They completely ignore that the economy of the Middle Ages was nasty and oppressive for the majority of those living under it, where people died at a young age. They fail to grasp that with wealth comes the ability to solve environmental problems. Instead they prefer to oppose the creation of wealth.
The anti-globalization movement is intellectually bankrupt. It is capable of shouting slogans and protesting international meetings. But in terms of providing solutions to the world’s problems, it has nothing to offer.
This list is getting quite a bit of attention. It is a report of some of the many things that Jay Rosen talked about when being interviewed by a guy from the BBC:
– Political attacks seeking to discredit the press and why they’re intensifying
– Scandals in the news business and the damage they are sowing
– The era of greater transparency and what it’s doing to modern journalism
– Trust in the mainstream media and what’s happening to it
– Bloggers, their role in politics, their effect on the press: their significance
– How the Net explosion is changing the relationship between people and news
– The collapse of traditional authority in journalism and what replaces it
– Amateurs vs. professionals; distributed knowledge vs. credentialed expertise
– The entrance of new players of all kinds in presidential campaigning
– The producer revolution underway among former consumers of media
– Jon Stewart and why he seems to be more credible to so many
– “He said, she said, we said” and why it’s such an issue this year
– The “reality-based community” thesis and the Bush Administration
– The political divide and the passions it has unleashed this year
– Why the culture war keeps going, this year reaching the mainstream press
– Why periods of intense partisanship coincide with high involvement
– The problem of propaganda and the intensity of its practice in 2004
– Why argument journalism is more involving than the informational kind
– Assaults on the very idea of a neutral observer, a disinterested account
– And then there’s this: the separate realities of Bush and Kerry supporters
I think that there is one huge thought missing from this list, so huge, and so completely in the faces of both the people having this conversation that they both missed it. Jay Rosen did anyway. This is: that these two people were talking to each other from opposite sides of an ocean.
The internet has taken politics global. The row about the Guardian trying to influence the US election by getting Guardian-readers to send pontificatory emails to the voters of Ohio is only so visible because it was so funny, but in a quieter way, the Guardian is now influencing US elections, by the simple fact of it publishing its stuff online, and Americans (and everyone else) being able to read it all, quickly and cheaply.
Another version of this same fact is the way that the Bush supporters in the USA took great heart from, and accused their local mainstream media of downplaying, the result of the recent Australian election. → Continue reading: New realities – separate realities
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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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