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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It is not often I quote Nikita Khrushchev in any context, but Al Qaeda is quite correct that western civilization poses a clear and present danger to their cherished notions of a universal social life centred on submission to God. An economically successful western civilisation underpinned by severalty and free intellectual enquiry is caustic to a civilisation based on the submission to non-rational ideas which are propagated by force. To put it bluntly, we will enervate them and eventually destroy them by gradual assimilation.
The best and brightest muslims are already hard pressed to not see the glaring practical and intellectual flaws in their societies and want better for themselves, and as a result there is already a small but fairly well integrated middle class of secularized American and Euro-Muslims who can be observed in the markets, cinemas, offices, pubs and bars of the west. But far more dangerous to the broader Islamist project is the example not of western thought but of western affluence and the ease and secular self-direction it yields.
The sheer material wealth of the more advanced west is almost guaranteed to subvert the broad masses who come in contact with it. The current difficulties in assimilating the lower parts of the socio-economic western muslim population should not blind us to the fact that western culture’s corrosive effects on the Islamic world view really counts far more when they are felt in Peshawar, Ankara and Cairo than in Marseilles, London and Chicago. In that theatre of the war of civilisations our truly effective weapons are not the gunship helicopters, laser guided bombs and 5.56mm small arms being used in Iraq right now, but rather our cheap DVD players, Internet connections, music/porn/action videos and smorgasbord of good, accessible but inexpensive Tex-Mex, Thai, Italian and Lebanese foods that globalisation has brought us, etc. etc. I have made this point before but as we concentrate on the more local and violent issues being resolved in the streets of Iraq, it does not hurt to put it all in the broader context within which our enemies certainly see things.
It is the horror of this viral characteristic of western consumer culture which really lies at the heart of the antipathy of the Islamists to the west: as secular society and severalty is the true heart of our civilisation, by our very nature we cannot and will not just ‘leave them alone’. It is not a matter of what western governments want to do, because western businesses and cultural influences will go wherever there are receptive markets and audiences. It is not a western ‘conspiracy’ to subvert Islam, merely the very nature of western civilisation at work. Short of turning the entire Islamic world into a hermit empire like North Korea writ large, the mullahs and ayatollahs cannot avoid their flocks hearing our siren songs.
Our weapons are varied and effective
How international trade works has always been a difficult sell for promoters of economics. Explaining Comparative Advantage is easy if you are holding a lecture, but less easy if you have only a sentence or two. I am reminded of the catchphrase of my economics teacher who would say: “Not everything in economics is intuitively obvious.”
This is unfortunate. Mercantilism – and the neo-mercantilism put forward today by many NGOs – is deeply damaging, especially to the world’s poorest who are “protected” by high import tariffs.
The current buzz-word in trade policy is “offshoring”. Many people in Britain and America think it bad for their country. Yet offshoring jobs is nothing new. It is merely the specific jobs that are moving abroad is different. In the past, the jobs moving abroad were always changing. There is nothing new now. And each time people campaigned against losing jobs to overseas countries, Britain and America kept on increasing the total number of jobs in their economies. Opponents of offshoring do not have the evidence of history on their side.
Further reading: Offshoring service jobs is advantageous
No doubt many readers of this site are of the libertarian persuasion after reading scholarly tomes by Ayn Rand, or Karl Popper.
Not me, though. I simply observed governments in action, and compared them to the workings of the free market.
One interesting thing I have observed over the years is that even governments who present themselves as ‘friends’ of the free market get the political urge to regulate, with the purest of motives, to ‘help’ the market along.
Markets aren’t like that, though. Even the best intentioned meddling by governments have consequences that are undesirable. Consider the Australian government’s well intentioned meddling in the Australian property market… → Continue reading: The Road to Hell is paved with good intentions.
It would appear from yesterday’s UK budget, before my accountant gets through the smallprint, that Gordon Brown has decided one million small UK businesses hold just too many awkward voters to browbeat in one go. So he has only smacked us with a light tap rather than the full hammer of state retribution he was muttering about earlier in the month.
There is still a Section 660 court case, with a judgement due in June, where he may yet succeed in fully wrecking the small business sector, just as he managed to do recently with the UK film industry, and the IT contractor sector several years ago, with his IR35 measure, but I’ll cross that bridge when we get to it.
What really puzzles me, however, is why whenever he deliberately introduces tax loopholes, to apparently encourage small businesses, instead of financial journalists just praising him in newspapers the damned small businesses actually take advantage of his faux largesse. Which means he has to get all moody and pompous before closing his own damned loopholes down again. → Continue reading: The cleverest man in the world
You may not have noticed, but in the UK this week is Fairtrade Fortnight – that time of the year when we are encouraged to buy ‘fair trade’ coffee and other ‘fairly priced’ products. I spent Monday going on TV and radio shows explaining why the scheme is counter-productive, much to the fury of its supporters.
For a start, we should be realistic about the scheme’s potential. In Britain, despite ten years of advertising, 97% of coffee sold is not on the scheme. Most consumers are likely to continue buying coffee according to cost and quality. Its potential for increasing wealth among coffee producers is thus extremely limited. Some argue that the scheme is taking us away from thinking about more radical solutions to poverty.
Secondly, the real problem with ‘fair trade’ is that it is based on economic illiteracy. The low price of coffee is caused by production increasing by 15% since 1990, and supply is bigger than demand. This cannot be blamed on multinational buyers of coffee. There are simply too many people employed in coffee production. With new technology, the price may well decline further. In Brazil, five people and a machine can do the work of 500 people in Guatemala. The low coffee prices are a signal to exit the market, or switch up to higher value coffee.
‘Fair trade’ – though it helps some farmers – encourages people to stay in the coffee market and gives them confidence to increase production. That is all very well, but this has a downside. More supply means a lower price on the world markets. Perversely, ‘fair trade’ makes matters worse for the vast majority coffee producers.
Criticism of the multinational buyers of coffee abounds, but these people have probably done more to help the lives of coffee producers than ‘fair trade’ has – by promoting coffee drinking to members of the public, and putting trendy coffee shops everywhere.
Instead of ‘fair trade’, we should concentrate on real solutions. Like getting rid of the Common Agricultural Policy and EU tariffs, which limit the goods overseas producers can diversify into. And coffee producing countries need to make the economic reforms that enable enterprise to flourish. ‘Fair’ pricing schemes may sound like a good idea, but they fail the market test.
Alex Singleton can be contacted via his personal website.
Equitable Life is a mess, that is for sure. The responsibility of making sure the people who look after your money can be trusted ultimately lies with the owner of the money… the pensioners, the beneficiaries of what Equitable Life actually does. However if fraud or other gross misrepresentation is involved, and not just incompetence, ineptitude or misfortune, then things do change somewhat as it becomes a criminal matter.
However Equitable Life is massively regulated, so many of its weird business decisions must be seen within the context of the weird distorted environment within which it operates…
So yes, there is an argument that as the state should therefore also be liable for the mess. But then if you accept that, given that the British economy grows more regulated by the day, that would suggest investors should be lining up to claim tax money from the state every time anything goes bust. After all, what makes Equitable Life’s casualties any different from the casualties of any other business cock up?
Occasional Samizdatista Malcolm Hutty recently emailed me thus:
Re your post on Samizdata a little while back about the fixed quantity of programming fallacy: if you’re interested in an intelligent discussion amongst programmers about whether outsourcing programming to India is actually a successful commercial strategy (and under what conditions it might work or not work) look here.
Sample quote:
In my opinion you rarely can separate design and implementation, especially if it’s not a totally standard system that you are going to implement, e.g. when your customers don’t know exactly what they want. You have to have a very clear and quality design in order to be able to send the specs overseas for implementation. Most of the time you have a half-baked design when you start coding. You make a prototype, you try out this and you try out that, and you correct your design in the process. After a while you get confident in your design, and then you start coding full-speed. At this point you have stable specs, and you can outsourse things but it’s too much of a hassle and overhead at this point, and maybe not worth the trouble at all. Most of the software projects have this kind of loosely structured overlapping design and implementation processes. It’s not automated yet, we are still too chaotic.
As someone unburdened by much detailed knowledge of these matters, I say that a reduction in price will always have consequences. Pile it high and sell it cheap, and you will be amazed by the number of new purchasers who come forward, seemingly out of nowhere. Remember the days when there would only be demand for six mainframe computers. As cheaper computers materialised, people thought of steadily more things to do with them. And it will be the same with outsourcing. My guess is that outsourcing will not so much make certain already familiar types of software cheaper, but will make new kinds of software possible. The big impact will come not from the people asking: how can we do our stuff more cheaply? It will come from those asking: what software can we now do that will make use of outsourcing, which we could not do before?
But what do I know? Meanwhile, I am quite prepared to believe that making profitable use of outsourcing is a skill that has to be learned, and that outsourcing definitely has its pitfalls.
Scott Wickstein takes a look at how farmers in so many parts of the First World get away with distorting trade at other people’s expense, both via pocketing taxes and inflating prices in the supermarkets of Australia, Britain, Europe and North America
To the list of certainties in life, such as death and taxes, we can add the fact that farmers will clamour for protection and subsidies. That is not surprising, but what is surprising is that around the globe, governments of all persuasions, whatever their nature, are willing to obey the demands of their farm lobbies.
A typical example of this is the recently concluded free trade agreement between Australia and the United States. Much of the agreement is actually devoted to excluding certain products from free trade. One such product is sugar, which was excluded at the behest of the US sugar producers lobby. That exclusion, in turn, provoked such an outcry by Australian sugar producers that the Australian government felt obliged to provide subsidies for the Australian sugar farmers.
From these actions, one can conclude that the political clout of the US sugar producers is much greater then that of sugar consumers, such as confectionery manufacturers. And yet, this is but a manifestation of a trend which is global. All over the world, governments are all too willing to knuckle down and obey the demands of their farm lobbies. That politicians do this, and run the risk of enraging urban electorates, speaks volumes about the organization of farm lobbies, and, indeed, it also shows how disorganised free trade proponents are. → Continue reading: First blast of the trumpet against the Monstrous Regiments of Farmers1
The Office of Fair Trading (the name being a splendid example of British irony in action) has ordered 60 private schools in the UK to hand over documents for an inquiry into alleged fee-fixing in violation of the 1998 Competition Act.
The OFT’s move provoked protests from the Independent Schools Council, which said it had “serious concerns about the protracted nature of this investigation and the effect it may have on schools”.
However, the ISC appeared to acknowledge that some schools may have fallen foul of a change in the law, but blamed the Government for failing to keep them informed.
Yet again we see that the scope and burden of state regulation is such that it is almost impossible for businesses to avoid breaking some laws unless they employ a ruinously huge staff of lawyers and ‘compliance officers’. Of course the very notion that the state, which imposes vast distorting pressures throughout the economy, can be an arbiter of ‘Fair Trading’ is almost beyond parody. As the Angry Economist said the other day:
Now, I would be the last person to claim that markets always produce good results. Some problems are hard for markets to solve simply because they are hard problems. Pointing to a problem which is hard for markets to solve doesn’t automatically mean that solution-by-government will be better. It may turn out to be that government interference will produce a better result (pareto optimal) than peaceful cooperation. I allow that as a possibility at the same time that I doubt it will ever happen, once all costs are accounted for.
The trouble is, as economies are complex networked systems, that it is not always obvious how this law over here buggers up that market over there. The distortions are often not a single causal step away and thus might as well be completely unrelated unless you are willing to take the time to really look at why things happen the way they do… and in most political systems, it is usually easier to just pass another law.
It is a well-worn aphorism that you should avoid meeting your heroes, because up close and personal they will often disappoint you with their inevitable human foibles, as compared to their superhuman attributes as witnessed from a worshipful distance, often spilling tomato juice down the tie of your admiration. But although I have personally found this to be true, with an old Sheffield Wednesday sporting hero of mine who I once discovered sneakily chatting up a girl I was after, the cad, I still feel one must gather one’s rosebuds from life. So despite the aphorism above I always take the risk of meeting heroes, however briefly, on the rare occasions when I get the opportunity to do so.
And last night, when I met one of them, alas very briefly, it proved no risk at all. For not only was my hero just as good in the flesh as he is as a picture on the Internet, he was even better. Far better, a true heroic star, a man of penetrating intelligence with a hint of self-deprecatory humour, a man of sparkling West Coast eloquence with an ability to make uninteresting questions put to him seem vital and imaginative, and a man of such devastating rhetorical ability that in just half an hour he managed to destroy a New Left edifice, constructed out of glue and matchsticks over three decades, to leave it as a dusty pile of splinters on the floor.
He was outstanding. He was inspirational. He was magnificent.
And no, I’m not talking about David Carr. Because I met him last year. I am, of course, talking about Bjørn Lomborg, author of The Skeptical Environmentalist. Michael Jennings, below, details Mr Lomborg’s short talk for the Adam Smith Institute, last night, so I’ll break my usual habit and keep this short. First, you must buy the book, if you haven’t done so already you naughty person. Second, we’re not going to run out of Shale Oil until about the year 5000. Third, that won’t matter, because we’ll be off fossil fuels by the end of the 21st century. Fourth, I was the first one to get my book signed last night because I’m one of those sorts of people. Fifth, if you ever get the chance to hear Bjørn Lomborg speak, yourself, just stop everything. Take that opportunity!
My greatest hero of all, Ludwig von Mises, once stood alone to take on the entire world before he then beat it. Bjørn Lomborg is a man in that vein. Almost alone, and despite copious icebergs of abuse, he has dragged the gun down from our heads that Greenpeace eco-warriors were gleefully pointing at us and wiped the imminent smile of success from their faces. Think Agent Smith. Think Mr Anderson. He is the one.
The book is available on all good websites everywhere. It’s a no-brainer. Just buy it.
[BTW, for all Lomborg groupies, such as myself, there is another great review of the event here, by Andrew Medworth of the ASI]
The week’s edition of the Economist is a rather good one. It is a publication which although generally on the side of the angels, often infuriates me with its statist meta-contextual inconsistencies. Likewise they are at their worst when describing broader civil liberties issues, particularly self-defence. That said it is a magazine which is often a bloody good read.
The leader article is called The new jobs migration and discusses a subject dear to my heart: free trade and outsourcing.
The fact that foreign competition now impinges on services as well as manufacturing raises no new issues of principle whatever. If a car can be made more cheaply in Mexico, it should be. If a telephone enquiry can be processed more cheaply in India, it should be. All such transactions raise real incomes on both sides, as resources are advantageously redeployed, with added investment and growth in the exporting country, and lower prices in the importing country. Yes, trade is a positive-sum game. (Adam Smith did think of that.)
Great stuff. When people argue that they just want to ‘protect American (or British/French/Japanese) jobs’, what they are really demanding is that force be used to ensure that other people’s purchasing power within their own nation not be allowed to grow because of their own sectional interests.
When people look at cases of folks loosing their jobs in the USA or UK because an Indian or Philippine call centre can do it cheaper, and then call for this to stop, they are not looking beyond the first causal link of costs and benefits. Moreover, they are ignoring that we live in an extended and (largely) capitalist society which is extraordinarily good at dealing with such problems when the ‘invisible hand’ is free to work its ‘magic’. Some people are losing their jobs, ergo, this is bad and must be stopped… this rather like concluding as the world seems intuitively to be flat, therefore it must be flat. By this logic all labour saving devices should have been declared ’employment destroying devices’ and banned long ago.
There is also another splendid article in the United States section called The Great Hollowing-out Myth which roundly rubbishes the notion that outsourcing damages the US (or other) economy and overall employment prospects (alas that article is available only via on-line subscription or in the print version):
Contrary to what John Edwards, John Kerry and George Bush seem to think, outsourcing actually sustains American jobs
[…]
Yes, individuals will be hurt in the process, and the focus on public policy should be directed towards providing a safety net for them, as well as ensuring that Americans have education to match jobs being created. By contrast, regarding globalisation as the enemy, as Mr Edwards does often and Messrs Kerry and Bush both do by default, is a much greater threat to America’s economic health that any Indian software programmer.
Run, do not walk, to your nearest newsstand.
Arnold Kling makes an excellent point about Doc Searl’s ‘statement of geekonomics’ dating back to 2000.
There is a classic line attributed to John Gilmore that “The Internet interprets censorship as damage and routes around it.” Economists might say that markets try to route around the damage caused by monopolists or government regulators. I view Searls as saying that with the Internet and markets, consumers do not need their paternalistic advocate so much.
To me, Searlsian Geekonomics sounds more like Hayekian libertarianism than Deanian re-regulationism. I don’t think that the Dean campaign deserved such a strong Geekbone. To me, the logic of Geekonomics is to lead one to be skeptical of the Democratic Wing of the Democratic Party.
I find Doc Searls very sound on almost all issues other than his support for Dean’s campaign. I am glad that someone pointed out the contradiction in his position.
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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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