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]
|
This, which I got to via the Mises Economics Blog (such is the world these days), is not good. It is from today’s London Evening Standard:
GEORGE Bush’s administration has called on US companies in Britain to relocate jobs to America in an astonishing move that could trigger a major trade war.
US-based multinationals have been told they will receive compensation from American trade authorities if they cancel contracts in Britain and take jobs home, according to CBI director-general Digby Jones.
The allegations come only a day before Bush arrives in London for his controversial State visit and escalate the storm of protest he has already caused by slapping big protectionist tariffs on European steel imports.
Speaking at the CBI’s annual conference in Birmingham, Jones said: ‘Three chief executives of American companies investing in Britain have told me to my face that they have been told to close down, bring their stuff home and make it in the US.’
For as long as I can remember, I have been telling myself and anyone else who will listen that the very existence and widespread use of the phrase ‘trade war’ – as opposed to the cuddly version: protection – is evidence that the world now understands how deeply dangerous trade wars can be. Now I am not so sure. Not only is Bush provoking a ‘trade war’, but people on this side of the Atlantic seem keen to make the absolute most of this that they can. This is just want Europe in the worst sense wants, and Britain in the best sense does not.
No wonder the CBI (Confederation of British Industry) – which loves big business and hates small business, which thus favours regulation of the sort that big business can live with and small business can not, and which thus favours Britain being locked into the EU – is flagging up this stuff. It is grist to their EUro-mill, a multi-coloured EU rag to all their fat cat bulls. I hope they do not get anywhere with it. I fear they will.
I have also tended to resist the idea that the current President of the Unites States is a fool. Do fools get elected President? I am starting to have doubts about that as well. On the other hand, maybe Bush wants a trade war with Europe. It certainly seems that way. And it also seems that he does not mind making maximum bad vibes for his former best friend, Tony Blair.
Fresh British data shows corporate Britain suffered a 10-year record level of bankruptcies in the third quarter of this year, as this article explains. However, before assuming the worst, a good question to always ask when reading stories like this is – how many new business starts were there over the same period? And you know what, after a lot of searching around on Google and elsewhere, it is mighty hard to come up with reliable data. (I would be grateful for help thereon).
But it matters in knowing what the figures are. Because, as the American business writer George Gilder noted more than a decade ago in his excellent book, Wealth and Poverty, if a country has a lot of bankruptcies, it does not necessarily mean an economy is in trouble. So long as bankrutpcies do not outstrip new company formation, there is no problem. In fact, having a lot of bankrupticies is, paradoxically at first sight, a healthy sign. It means folk are taking risks, trying ideas. Some of those gambles will go splat. But even then the sounds of firms hitting the ground with a thud generates knowledge for the rest of the economy. Or to borrow from Karl Popper, bankruptcies are like falsifying a theory in science. You still learn from when an idea is challenged and proven not to work.
So, the latest figures maybe cause for concern. What we really need to know is whether, in Blair’s corporatist and ever more highly-taxed Britain, the animal spirits of entrepreneurs are given full rein.
And I can guess what you good readers out there think of that!
Puff Daddy, or P. Diddy, or whatever, has a clothing line that he was shocked, shocked! to discover was being made in a “sweatshop” in the Honduras. Clearly, this was intolerable, so Puff did the only (politically) correct thing, and said he would terminate the contract if conditions at the factory were substandard.
So lemme get this straight. To show his solidarity with the oppressed Honduran workers making 90 cents an hour, he threatens to fire them all. I understand that this makes Puff feel better, but how is it supposed to help the workers?
To make it worse, Puff’s sweatshop was actually paying well above the Honduran average wage. I’m not quite clear on how moving a relatively high-wage job from a poor country to a more developed country with a higher-wage workforce is supposed to advance social justice, but obviously the Puffster’s grasp of ethical ephemera exceeds my own.
A friend of Alice Bachini’s has been buying a fridge. The two most interesting obvservations are that an aesthetically different but otherwise identical fridge cost 50% more than the one that was purchased, and that it was possible to obtain a substantial discount by finding an internet retailer that offered the same fridge for substantially less than the high street retailer, and taking up the high street retailer’s offer to match any competitor’s price.
As for the first issue, I am presently reading Virginia Postrel’s The Substance of Style which is to a large extent about the first question (ie about why people care about fridges with different aesthetics, and why they are willing to pay a lot more for the right aesthetics). I will review the book when I finish reading it.
As for the second issue, well it brings up a big annoyance of mine about this country (which is a country that in most ways I rather like), which is that in some ways it isn’t that sophisticated as a retail market. In a lot of areas the high street is just horribly uncompetitive and anticompetitive. → Continue reading: Britain’s woefully uncompetitive high street
Over on the Adam Smith Institute blog, Madsen Pirie makes an excellent point about the joys of borders and the competition they bring:
In the US I like to cross state lines to go for the lower sales taxes and duties. It is reckoned that ‘leakage’ (cross border shopping) will be a significant factor if there is a 3 percentage point tax differential. And it’s not only competition in sales and purchase taxes which works. I love French food and wine, and the priority they are given, but I don’t feel the same way about their income tax and social insurance. The Danes do pickled fish on rye bread superbly, but there’s no way I want to pay Danish taxes. I enjoy the Swedish forests and lakes, but not their government.
Which is of course why so much of the USA’s political class have supported the steady march towards ever more federal power and why the EU’s political classes love ‘harmonization’ to prevent ‘unfair’ tax competition. The Adam Smith Institute is often seen as just being about the life of homo-economicus but as Madsen’s remarks show, they are in fact concerned about the impact of liberty on culture and society and not just the Dow Jones Index.
One of the reasons so many French families can be found living in Kensington (‘Frog Valley’) is that there is a two way exchange going on between Britain and France: a ‘brain drain’ in which French entrepreneurs, executives and high tax bracket individuals are moving to relatively less regulated more dynamic Britain to escape the deadening (and grasping) hand of the French state, whilst at the same time retired British people who do not actually have to work for a living, and are thus unlikely to have to deal with the nightmarish French state, are buying up property in the Dordogne to experience the cheese, fois gras and claret idylls of bucolic France.
Yes, there is something to be said for borders.
Much is being made, rightly, of China’s growing economic importance in the world, following China’s recent and very newsworthy space mission.
But now here’s a really interesting and encouraging New York Times article about the rapid and highly visible economic progress now being made in India. The most encouraging thing about the piece for me is that not only is this progress described, it is also explained:
This is no longer the India of Gandhi, among history’s most famous ascetics.
The change in values, habits and options in India – not just from his day, but from a mere decade ago – is undeniable, and so is the sense of optimism about India’s economic prospects.
Much of India is still mired in poverty, but just over a decade after the Indian economy began shaking off its statist shackles and opening to the outside world, it is booming. The surge is based on strong industry and agriculture, rising Indian and foreign investment and American-style consumer spending by a growing middle class, including the people under age 25 who now make up half the country’s population.
The lesson – and being taught in the New York Times, please note, rather than merely in some free market Think Tank think piece – is that if you want rapid economic progress and a sense of optimism, you have to shake off your “statist shackles” and open up to the outside world.
The use of the word “statist” I find especially interesting. I could be wrong, but I don’t believe that’s a very common usage over here, and for that matter how common is it in the USA’s mainstream media? It makes the point perfectly that the important divide now is not between different factions wanting to use state power to do this or alternatively that, but rather between all of those who want their country or state to be or to remain bound by statist shackles, and all those who want those statist shackles shaken off. (You may need to slow down a bit when you try to say things like this out loud.)
For the sake of the entire world, I hope that the Indians themselves draw this same lesson from their own emerging success, and then teach that lesson to the rest of the world. Combine them doing that with the Chinese having so visibly retreated from their own far more horrific statist mania unleashed by the lunatic Mao-Tse-Tung and as a result also emerging into economic superpower status, and the twenty first century could end up being a very good one. It already looks like being a very prosperous one.
Bet that title grabbed you… not! I don’t normally ponder the business section of the newspaper either, being a non-earning radical unschooling parent with barely a couple of ha’pennies to rub together for heating at this time of year. However, as one of Samizdata’s resident optimists, I couldn’t help but notice this Telegraph headline warming the cockles of my heart:
FTSE rides wave of global optimism
So what? I hear you all demand. Aren’t markets notoriously fickle? Don’t share indexes go up and down like yo-yos from one moment to the next?
Well, not exactly, no. They do react over-sensitively sometimes, including to mistaken theories and red-herrings and suchlike. But they do also tell us something about how economies are doing, in a general sense. And there are few things more important to a country’s success than its economy. And free-markets succeed where controlled markets never can, which is why Eastern Europe is still hobbling its way towards the 1980’s while in the West we enjoy Gameboy Advance, ever-improving standards of living and quite a few more Wonderbras per capita than you will still find in rural Transyllvania.
And also why looking at the economic news can actually tell us something about how free our country is. If things are booming, then of course lower taxes would help them boom even more: but something else is definitely still going right regardless (probably many things, in fact).
Freedom is about more than legislation. It’s also about how the state enforces its legislation, what methods for criticising and changing the legislation are in place (democracy being the best one anyone seems to have achieved so far, definitely more efficient for spreading ideas than fascist dictatorship), and how effective people are at doing this criticising and changing. Here on Samizdata, I’d say we’re pretty good. But it would be wrong to assume that everyone is as knowledgeable (or interested) as we are in the political process and evolutionary growth: interpreting widespread disagreement with our own ideas as hard evidence that evil Marxist brainwashing plots have tainted the Nation That Once Was Great is a big logic error (file under “conspiracy theory”).
→ Continue reading: UK Business News
In Defence of Global Capitalism
Johan Norberg
Cato Institute, 2003
Another welcome book in the Simon, Lomborg line, this time from Sweden, an auspicious sign. The Preface was reprinted in Liberty, where I first read it and where it makes a good summary of the argument of the book. In 1988 when the author was 16, his party – the Anarchists – got the largest percentage of votes, 25%, in the school mock-election, running an agin-the-government campaign. His position has changed somewhat – capitalism has difficulty working without a legal system and transparency in transactions – but is basically the same.
He starts by insisting that over the past three or four decades things have got better, particularly in the poorer “developing” countries. Income per capita has increased and mortality been reduced. This he ascribes to opening of the countries concerned to “the market”, both internal and external. He is, moreover, strongly against national barriers, not merely to trade, but also to migration, though here he doesn’t take into account our xenophobia. The case against tariffs is succinctly put by the quotation: “Either a branch of enterprise is profitable, in which case it deserves no tariff protection; or else it is unprofitable, in which case it deserves no tariff protection (p. 152).”
Although not explicitly against the EU as such, his analysis of its CAP agricultural subsidies and protectionism (pp. 148-) is damning, and it is even more shaming that so-called pro-Third World anti-globalisation protesters do not target them.
There is a separate chapter on “The African Morass” (p. 98-) where per capita GDP has actually decreased since the ’60s, though I think the statement that “The African countries have inherited a hierarchic, repressive political structure from the colonial powers” needs to be modified: what they did inherit, according to Bauer, was a late move to a command economy and a socialist intellectual outlook. The situation has been exacerbated by international aid, and debt cancellation would only be an encouragement of the behaviour that brought the bankruptcy about
The author refutes the prevalent belief that world inequality is growing, either between (p. 53) or within countries. He also points out that social mobility means that “the poor” are not the same people from one year to the next (p. 76). This, incidentally, is the factor most frequently, in fact always, omitted from discussions on poverty, whether absolute or relative; in fact, only 4% of the US population remain in the “poor” bracket (20%) for as long as two years, though some will remain longer.
A Life Against the Grain: The Autobiography of an Unconventional Economist
Julian L. Simon
Transaction, 2002, hardback
This is a posthumously published work:
Julian Simon died suddenly and, according to the doctor’s report, instantly of his first and only heart attack on February 8th, 1998. He had just returned from a trip to Spain where he had been awarded an honorary degree from the University of Navarre. He was in very good spirits and showed no signs of fatigue or illness.
So runs the initial “Comment” by his widow, Rita J. Simon. I had wondered how he died, having learnt, with regret, the fact from the mention in a Laissez-Faire Books Catalogue, and even feared that, given his history of depression, he might have committed suicide, a fear justified by his admission in this book that he had contemplated doing so while in depression, being prevented by thoughts of his family responsibilities.
The Autobiography of an Unconventional Economist, as the work is subtitled, had been finished, apparently over a year before, in a much longer form (900 pages – though whether they are equivalent to the page size of this 359 page book is not indicated) and has been edited by his widow, with acknowledged support. There may have been a misprint or two I have forgotten, but the only obvious textual fault is not filling in internal references to other chapters, which are left as 00, awaiting specification in the final revision. There is an unfulfilled promise of a bibliography of JLS’s publications in the text, but not even a normal list of previous titles at the beginning. His death date is not given on the reverse of the title page, with the usual guff there. All this said (at perhaps unnecessary length) I must say that the book is a very interesting one, less so perhaps for its ideas – these are in his other books – than for information on the personality of its author, though even here there is a possibly involuntary veil of reticence. I hasten to add that I don’t just mean about sex, a rather welcome exclusion, but rather why he feels dissatisfied with himself. He obviously had a happy marriage and his three children grew up satisfactorily (Ch 17); he had no money troubles and always did the job he liked or, if it wasn’t suitable, changed it.
Although his reassuring ideas about world resources and the environment had not gained widespread acceptance by the time he died, he does not seem to bear ill will to anyone. He may have thought that he didn’t manage his life effectively – but this would conflict with his propensity to work at whatever took his interest. This gives an episodic feel to about the first two thirds or so of the book; when is the action really going to start? → Continue reading: An Unconventional Economist who underestimated himself
A couple of weeks ago, non-resident Samizdatista Alice Bachini pointed to this Telegraph piece in praise of supermarkets in general and the Tesco chain in particular, which explains that supermarkets help us to save time and money, make life easier (particularly for women), and provide a tremendous range of stuff much easier to buy at all sorts of odd hours if necessary, that Tesco provide a fine online service for people who want it, and that all round these are really good things and should be applauded. (Oddly enough, my fellow Samizdatista Jonathan Pearce wrote a similar piece between my starting and finishing this piece). Now this is a good article – it even takes a brief time out to denounce the Common Agricultural policy as evil – and on the whole I couldn’t agree more. However, there is one important issue that the author (Alice Thomson) missed. Midway through the article, she says the following
Supermarkets are always accused of sacrificing quality for quantity. Actually, because they buy in bulk and have a rapid turnover, it often means that their fruit is fresher than their competitors’. At Tesco yesterday, I counted six varieties of autumn apples, four from Britain.
Because they have such huge buying power, they can also take a gamble on exotic produce. The old corner shops were great for a packet of cigarettes, but they’d never have sold fresh basil. Supermarkets have made us more rather than less adventurous.
The result is entirely true. Supermarkets today contain a great many more lines than was the case a couple of decades ago, particularly fresh foods. But she is wrong about the reason. The reason why supermarkets are able to provide so much better products is not about buying power. It is instead almost entirely about the benefits that have been obtained by supermarket chains developing complicated computer systems to handle their logistics.
I will return to this, but for now a digression into economics. → Continue reading: Why supermarkets are good, and what this has to do with the productivity paradox
A new Sainsbury’s supermarket has opened near where I live in Pimlico, central London. Very good it is indeed. Just about every food obtainable that I would ever want plus lots more. I made my first trip the other day and it triggered off some thoughts about what these big food chains represent in our culture.
First off, the customers looked genuinely excited, cheerful. It may seem weird that in an age of abundance where we take such things for granted, but the opening of this store seems to have created quite a buzz in the area, rather like the opening of a multi-plex cinema. Shopping for many people is an extension of leisure activity rather than just about the utilitarian business of buying food for the table.
The neo-Luddites in our midst claim to despise all this. Supermarkets, they say, force smaller shops out of business and these big stores’ buying power squeezes the margins of suppliers. To the first charge, I say that if small stores are indeed being forced under, it has more to do with the burdens of regulation and tax which necessarily weigh more heavily on small firms than on larger, more established ones. And secondly, the increased buying power of large stores is indeed a fact, but that also means the consumer gets to benefit. And a big store’s brand-name visibility means the owners of the business have to fret constantly – and they do – about product quality. Let’s face it, if you buy a tin of beans from Megastore Inc and it turns out to poisonous, then think multi-zillion quid lawsuit. If it is bought from Uncle Fred Cornershop, probably not.
And a final point. Supermarkets, it seems to me, have played a considerable part in the liberation of women from traditional household chores, and hence made it easier for women to leave the home and go into work. If we had no superstores and only small stores, then shoppinig would take much, much longer, and hence put even more of a strain on family life where most couples have to be earners out of financial necessity.
Of course the anti-globalistas are none too keen to focus on the essentially conservative, dare I say, reactionary nature of what their hatred of big business means. No reason for us to be shy, however.
Right, off to explore the wine counter.
With David Willetts blowing yet another unsolicited Kiss of Death into the rapidly fading twilight of the UK Conservative Party, it was interesting to hear Polly Toynbee say Willetts had been using the thoughts of our old friend, John Maynard Keynes, to push forward the increasing statism of his latest ideas, such as using coerced taxpayers’ money to subsidise working mothers.
No wonder Ms Toynbee has been so taken with Mr “Two Brains” Willetts’ recently published pamphlet. What it contains used to be called social engineering, of the most crude kind, but now it has been re-labelled as compassionate conservatism, and even arch-socialist Ms Toynbee has declared her guarded support. I therefore thought we’d better examine the roots of Mr Willett’s new philosophy, and get an Austrian view on the Keynesianism underlying it.
And what better place could we start than Mises.org? → Continue reading: Keynes, the Man
|
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.
|
