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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Keynesian economics may have gone out of fashion, but it is still here with us today in a different form. That is the theory of ASI president Madsen Pirie, who writes that Keynesianism has been privatized by the current UK government.
Keynesian economics used to be about government spending being used to flatten the business cycle. Now the privatized Keynesianism is about pushing private citizens into doing it. As Pirie writes:
They make saving less worthwhile by burdening companies with taxes and regulations, depressing share prices. They make spending easier with lower interest rates and by measures which boost house prices and encourage people to borrow.
The privatized Keynesianism builds up indebtedness and inflated house prices, and cuts into investment and pension provision. Government hopes that the boom part of the cycle will come to the rescue, and that rising wealth and prosperity will solve these problems.
Or will the privatized Keynesianism inflict the same long-term damage on the economy that the old Keynesianism did?
How slow can an object in motion be?
A special interest group returning taxpayers money?
A bureaucrat accounting for his travel expenses?
International trade negotiations?
There has actually been progress in the latest round of WTO talks, as serial offenders the EU and the US have finally agreed to remove export subsidies on agricultural products, and to lower domestic subsidies as well. Not too much can be read into this- the Economist report states:
The agreement leaves much of the detail to further negotiating sessions, and trade wonks are greeting it as only a minor success that takes negotiators perhaps halfway towards a final Doha-round deal. But it is progress.
There is still so much to be done. Japan, for example, maintains a 490% tariff on rice imports.
Nations which have already woken up to the fact that free trade is a good thing have been more proactive. Australia, for example, has signed a free trade agreement with the US, which goes with similar agreements with New Zealand, Singapore, and Thailand. There is no doubt that these agreements, while useful, are a poor substitute for genuine international trade liberalisation, but they are still progress, at least for those willing to give Free Trade a chance.
One of Spain’s top banks, Santander, is making a bid to buy the British banking firm Abbey plc, the mortgage lending firm which used to be a building society (what Americans would know as a Savings and Loan).
I do not have much to say about the specifics of the deal. It is all a part of the merger, acquision and disposal process which is a healthy part of capitalism and the efficient allocation of scarce capital. Maybe the shareholders of either firm have strong views on the matter but I do not. However, what is interesting to me is what this deal says about Spain’s development as an economic power.
Spain is one of the success stories of the past few years. When I went to the glorious city of Barcelona last year I was struck by how prosperous and dynamic the place was. I hear and read similar impressions from other sources. Much of this has to do with the determination of Spanish entrepreneurs to throw off the shackles of former failed socialist policies and embrace a more liberal economic culture, which former centre-right premier Aznar helped spawn. Let us hope the new socialist government elected earlier this year in rather shameful circumstances after the Madrid bombings does not mess it up.
It would be a grave error to infer too much from the acquisitive activities of a Spanish bank in Britain. But I get the feeling that this grand old nation is flexing its economic muscles again, and who knows, making a distinct improvement to the quality of Britain’s economy while getting richer as well. Good. It feels appropriate somehow. There are hundreds of thousands of British expatriates living in Spain so it perhaps fitting that Spain’s biggest companies are trying to get a piece of the action in the UK.
(As an aside, I would like to know what the Spanish-based blog Iberian Notes makes of this).
Now where did that come from?
Japan’s economy is actually growing at more than a statistically obvious rate for the first time properly since the 1980s. The fact that a heatwave is being credited with boosting business leads to the obvious conclusion.
Global warming is Good for Capitalism. Light those brown coal fires now! Chop down those hedgerows! Hunt those whales! Bring back leaded gasoline!
There is a tax strike in Lebanon against government levies on mobile phone charges.
This is pure supply-side economics coming from Zuheir Berro, the president of Consumers Lebanon:
Berro also refuted allegations that the government needed to charge high fees to insure more income. “This is a random policy which will get us nowhere,” he said. We still have a very high capacity for subscriptions and if they lower the fees, then subscriptions will multiply,” he added.
Lebanon has a 24 percent level of subscribers, compared to over 80 percent in industrialized countries, according to Berro.
The high subscription and communication fees, according to the group, are hindering the country’s development and investments.
Meanwhile British MPs are demanding extra local taxes, in addition to the existing local property and business taxes because it is the key to ‘democracy’.
It is always refreshing to read an article trashing state intervention only to read in the by-line at the end that the author is a candidate for the State of Massachusetts’ Senate.
Going back to look up James D. Miller’s bio details, I see that he is ‘Assistant Professor of Economics, Smith College’. My ignorance of the American education system is profound. Yet it seems to me that this is not the profile I would expect for a British economics professor. A candidate for political office who publicly calls for less state intervention, and does not even ask for more tax money in education! We used to have one or two or those.
I am especially intrigued by Mr Miller’s references (linking to Thomas Sowell) to the two earthquakes in California and Iran during 2003. The reason fewer than 10 people were killed in a Californian earthquake measuring 6.5 on the Richter scale, whereas 28,000 were killed by a 6.6 Richter earthquake in Iran? One word: wealth.
I really must read more Sowell. And thank you James D. Miller for an educational article.
It takes a lot to make me doubt the benefits of the free movement of people, money, ideas, goods and services. But a new report published by the Centre for the New Europe raises some questions about parallel trade in the European Union.
In today’s Wall Street Journal, Stephen Pollard explains the harm that can be caused by the re-exporting of pharmaceuticals from a country such as Spain, where regulated prices are low, sometimes under different labels and with inaccurate expiry dates, to countries where prices are regulated higher, such as Germany and the UK.
Until now my own view has been so what?
If a company sells products in two countries at different prices then an entrepreneurial opportunity may exist for traders to exploit. Demand in the cheaper country goes up, pushing up prices there, and supply increases in the more expensive country, pushing prices down. We may not see equal prices everywhere because there may be other factors affecting costs: land prices, distance, demographic differences, even the cultural acceptability of using medication. But with price controls in the various countries, the market process is subverted: increased demand in Spain does not lead to higher prices and increased supply does not produce lower prices in Germany (except possibly in the ‘informal sector’).
The EU appears to be promoting the compulsion to sell the same product everywhere in the EU, which is a violation of a person’s right to choose to sell or not. So what I would at first glance dismiss as special pleading by a corporate lobby turns out to be an anomaly. The CNE estimates that more than 3 people could be dying every two hours as a result of these regulations.
If the EU really wants freer trade, it should start by challenging the price control systems of its own member states.
David Smith, the economics editor for the Sunday Times, has a splendid article on his personal blog, Economics UK, about why the Eurosceptic approach is the economically rational one.
Britain’s unemployment rate, on a comparable basis, is 4.8%, against 9.4% in France and 9.8% in Germany. Unemployment stands at under half the EU average. Per capita gross domestic product in Britain, according to a new report from Capital Economics, is higher at $30,200 (£16,440), than Germany’s $29,200 or France’s $28,500.
The economic momentum is with us. Britain has been growing continuously for 12 years, during which time other EU countries have suffered at least one recession and in some cases two. The sick man of Europe has made a remarkable recovery.
Of course the economic argument for Britain being in the EU (as opposed to some EFTA-like agreement) was always tosh. Switzerland anyone? It is now highly visible tosh.
Here on Samizdata.net we may decry the regulatory idiocy of the Labour government but clearly things are even worse in Euroland, and at least if more sovereignty is maintained at the UK level, more of the damage can be undone at the UK level rather than locked in by remote stasis oriented Europe wide institutions. All the EU has to offer is corruption, stagnation and regulation. No thanks.
I recommend this article about the Organization for Economic Cooperation and Development (OECD).
It reminds us here, if any of us need reminding, that even if we do manage to shake our country loose from the EU, there is still a ghastly alphabet soup of international organisations lying in wait for us.
Representing mostly high-tax European nations, the OECD thinks it is unfair when jobs and investment move from high-tax to low-tax nations. The bureaucrats are particularly upset that so-called tax havens provide a refuge for oppressed taxpayers from welfare states like France, Germany, and Sweden. As part of its anti-tax competition project, the OECD met in Berlin for a two-day conference during the first week of this month, hoping to bully tax havens into helping high-tax nations track and tax flight capital.
Using various threats, the OECD is pushing low-tax countries into providing information about nonresident investors to foreign tax authorities, meaning that any benefit of investing elsewhere disappears once European tax collectors can impose taxes on money invested outside their borders.
Acting as the Gambino family of the tax world, the OECD has pressured places like Anguilla and Panama to sign “commitment letters” pledging to participate in something called “information exchange” – an odd term for a one-way flow of data from “tax havens” to high-tax governments.
The writer of this, Joel Mowbray, focuses on the US contribution of $50 million per annum to this evil enterprise. But what this makes me think of is the fact that, following their recent electoral success, Britain’s UKIP is now being challenged by its enemies to work out some other policies, besides merely saying a big NO to the EU. And I say to such challengers, be careful what you wish for.
To think that I was one of those deeply ill-informed people who thought that ‘resistance’ was merely the the ratio of the potential difference across an electric component to the current passing through it.
Mea culpa. Mea maxima culpa. I was so wrong:
RESISTANCE means saying no. No to contempt, arrogance and economic bullying. No to the new masters of the world: high finance, the countries of the G8, the Washington consensus, the dictatorship of the market and unchecked free trade. No to the quartet of the World Bank, International Monetary Fund, World Trade Organisation and the Organisation for Economic Cooperation and Development. No to hyper-production. To genetically modified crops. To permanent privatisations. To the relentless spread of the private sector. No to exclusion. No to sexism. No to social regression, poverty, inequality and the dismantling of the welfare state.
No to the abandonment of the South. No to the daily deaths of 30,000 poor children. No to the destruction of the environment. No to the military hegemony of a sole superpower. No to “preventive” war, to invasion, to terrorism and to attacks on civilians. No to racism, anti-semitism and islamophobia. No to draconian security measures. No to a police state mentality. No to dumbing-down. To censorship. To media lies. To manipulative media.
Resistance also means saying yes. Yes to solidarity between the six billion inhabitants of this planet. Yes to the rights of women. Yes to a renewed United Nations. Yes to a new Marshall plan to help Africa. Yes to the total elimination of illiteracy. Yes to an international campaign against a technology gap. Yes to an international moratorium that will preserve drinking water.
Yes also to generic medicines for all. To decisive action against Aids. To the preservation of minority cultures. And to the rights of indigenous peoples.
Yes to social and economic justice. And a less market-dominated Europe. Yes to the Porto Alegre Consensus. Yes to a Tobin tax that will benefit citizens. Yes to taxing arms sales. Yes to writing off the debt of the poor nations. Yes to banning tax havens.
To resist is to dream that another world is possible. And to help build it.
Got that? Good. Excellent. Carry on.
…3 days later than last year. The Adam Smith Institute has announced that this year’s Tax Freedom Day will be tomorrow, 30th May 2004.
The ASI calculates this every year, providing a useful measure of one of the ways in which the state reduces liberty, destroys wealth and lowers overall living standards.
As usual, Tax Freedom Day attracts quite a lot of media coverage from the usual suspects. I wonder if any voters are actually noticing?
I spent a couple of hours at Tokyo Narita airport yesterday morning, changing planes on the way back from Sydney to London. Like many geeks people, I like to check frequently to check my e-mail / check the news / see if anyone has insulted me in the Samizdata comments section, so I wandered around the terminal looking for an internet terminal on which to do so. Narita is well served with such terminals, so I was quickly satisfied.
What is interesting here is that there are internet terminals provided by two separate companies here. The ones on the left are provided by a local ISP, and users are charged ¥100 (about £0.50) for ten minutes of use. The ones to the right are provided by Intel, and are free to use. The photograph illustrates that the usage patterns are indeed what would be predicted by the laws of economics.
It is actually quite common now to find free internet terminals for use in airport terminals, particularly in airside transit lounges where passengers may spend a few hours between flights. This is a relatively simple and cheap amenity for airports to provide to their customers, so they do. Often though, the airport does not even need to provide it: some technology company will set it up for free, in the belief that the sorts of people changing planes at major airports are the sorts of people they want to advertise their services to. As well as free internet terminals provided by Intel, I have also seen free internet terminals provided by Yahoo at Tokyo airport. (I have seen free internet terminals provided by Samsung at Sydney airport which never seem to be working – probably not a good way for the company to advertise itself). The good thing at Tokyo is that they seem to be willing to allow competition between various organisations that want to set up such terminals, and they apparently don’t have to be free.
Which when you think about it makes a certain amount of sense. If you provide a good for less than the market price, access to the good will normally end up being regulated by queues and quotas (ie willingness to wait, and restrictions on the amount of the good you consume, regardless of how much you want) rather than by ability or willingness to pay for it. (The public health systems of the world, which are full of people waiting endlessly for medical care, are prime illustrations of this). In busy periods, queues are likely to form for the free terminals, and at that point people who really need to access the internet quickly are still likely to be able to do so if they are willing to spend money. And such people can then use the terminals for as long as they like, whereas time restrictions are normally placed on free terminals. (From this we can also conclude that the health system of Australia, in which people who are willing to pay more can jump the queues of the public system and have their healthcare done privately, is better than the situation in Canada, where private provision of healthcare is essentially illegal).
In practice though, I doubt the providers of the for pay terminals at Narita are making much money, simply because the provision of free terminals there is so good. Putting them behind security restricts their use to passengers, and therefore demand cannot grow in the way it does for many free goods. They may get some use at busy times, but I suspect not much. However, in certain other airports (for instance Singapore) where there are free terminals but not many of them, for pay terminals could (and do) also get a lot of use.
And in the case of healthcare, where demand is capable of growing completely out of hand if you eliminate price sensitivity completely, private provision that people pay for directly is the only way that anyone will end up with reasonable access to healthcare. Given that (unlike with free internet terminals) people are paying for the public health system out of their own taxes in the first place, the argument for eliminating most public health care and having proper price sensitivity from the start is pretty strong.
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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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