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It was recently announced that after talks between the British and Hong Kong governments, Richard Branson’s Virgin Atlantic Airways had won its long desired rights to fly from London to Sydney, Australia. In return for this, Hong Kong’s Cathay Pacific Airways were given the right to fly from London Heathrow to New York and other cities in the United States. Various observations were made about how an additional competitor on each route would increase competition and give passengers lower fares and more options.
While this is true as far as it goes, this is a pretty bizarre paragraph if you think about it. Why does the British government have to negotiate with the Hong Kong government before a private company can fly to Australia? In what parallel universe is the quid pro quo you must offer to get your airline permission to fly to Australia the permission for another airline from a third country to fly to New York?
And if additional competitors are good on routes, why were these airlines not allowed to fly on them already? And why did Singapore Airlines, Delta Airlines, and Continental amongst others object strenuously to the deal?
To answer these questions, we have to look at just how international aviation is regulated. This is bizarrely anachronistic. This most global of industries is regulated by a web of bilateral treaties between nations that dramatically limits competition. And to find this out, we have to look back into the dim depths of the past, to 1944. → Continue reading: The insane world of bilateral international aviation regulation
Taxation is in the news just now in Britain, because the word is that Middle England is finally getting fed up with Gordon Brown and his relentless drizzle of sneaky tax increases and failure or refusal – it doesn’t really matter which, does it? – to keep a lid on public spending. Which is perhaps why, when I supped last night with Alex Singleton, we fell to talking about Tax Freedom Day. And I heard myself saying, the way you do, that there is another way to dramatise the scope and nature of the British tax burden, which is to ask: How many taxes does Britain now have?
Frankly I have almost no idea at all of what the answer to this question is, for Britain. But to ask it might achieve many benefits, I surmise. → Continue reading: How many taxes does Britain have?
I am in Antwerp. As well as being a city of great economic importance as one of Europe’s largest ports, and also one of those great Dutch trading cities in which modern capitalism was invented in the sixteenth and seventeenth centuries, Antwerp is today a very cool city: full of great bars, interesting shops, jazz clubs, assorted types of cafe, you name it. This afternoon, after drinking two or three glasses of fine Belgian beer while listening to a piano and bass jazz duo, I got on the metro to go back to my hotel. (The Belgians are the first people I have encountered who have managed to make a single line metro system confusing to use, but I digress). I found myself sitting in a seat on the metro platform, waiting for a train.
Suddenly, quite softly, I heard a familiar song being sung. It was one of the songs from the famous musical epsiode of Buffy, The Vampire Slayer. As I do happen to count knowing the lyrics (and far too much dialogue) of Buffy amongst my many skills, I paused for a moment or two and (perhaps it was the beer) joined in. After a few seconds, the girl noticed that there was somebody else singing and stopped, and seemed slightly embarrassed to be caught doing this. However, I mentioned that as someone who personally owned six seasons of Buffy on DVD, I was unlikely to think less of her for singing songs from Buffy. (There is also the minor matter that she was quite beautiful, and few guys mind it if a beautiful girl is a little embarassed).
She said that she was still waiting for the DVDs of season 5, as she is buying the US versions. (It is a point of dispute amongst Buffy fans as to whether the US or European DVDs are better. The European ones have been released first and are in widescreen, but the US ones are cheaper and have more special features, including a particularly hilarious commentary track on one episode from Seth Green. So we discussed this briefly. But once again I digress).
She expressed her surprise about the whole thing: she said that she sings that song when walking the dog, but that nobody had ever recognised it before. She said this in an accent I couldn’t quite place: it sounded sort of posh English, but it wasn’t quite that. So I asked her. She said that she was Argentine, but that she had lived in England for a time, and also had spent a while in Germany. I could sense that there was more to the story than this, But that was as much as I got.
If I was writing this in a film script, this would have been a wonderful example of what Roger Ebert calls a “meet cute”, and I would have no doubt used the whole episode as an excuse to invite her back to the jazz club, and it would have ended up being a wonderfully amusing story to tell our grandchildren.
But, sadly, there is something that I have left out of this story, which is that the girl in question was not alone. She was with a young Belgian man, obviously a boyfriend. So, I chatted with them a little until my train came, wished them goodbye and boarded my train.
I am not sure that there is a point to this story, other than that a globalised world in which I, an Australian who lives in London, can spontaneously start singing a song from a musical episode of a television series of light gothic horror set in a Californian high school with a beautiful somewhat anglicised Argentine woman in an underground train station in Antwerp is something I like immensely. And also, Joss Whedon is a genius.
Just how long will the European Union last? Unarguably it is well dug in. Will it hang in there just long enough to condemn an entire continent to a painful and lingering death?
Few people are prepared to confront such a possibility or even entertain any such notion. Fortunately, one of those few is Ruth Lea:
The tectonic plates of the global economy are shifting. After a gap of several centuries, India and China are re-establishing themselves as major economic heavyweights. China, in particular, is becoming the “workshop of the world” and its economic rise will be as significant as the USA’s arrival on the global scene in the 19th century.
We may complain as jobs are “exported” to these emerging colossi but, whether we complain or not, this seismic shift is occurring and we cannot ignore it. The need to remain internationally competitive is becoming ever more critical for all the “western” economies.
I have little doubt that the US, with its “can-do” entrepreneurial attitudes and enormous economic power will continue to make the grade. But I am increasingly unsure that this can be said about the major euro-zone economies or even, in my darkest moments, Britain. After all, over the past five to six years, Britain has been slipping down the competitiveness league tables compiled by the World Economic Forum and the International Institute for Management Development reflecting higher taxes, heavier regulations and poor public services.
Government policymakers, while singing the praises of enterprise, competitiveness and high productivity, have undermined them all. The EU’s regulatory zeal has undoubtedly played a significant role in damaging British competitiveness. Over the past six years, one of British business’s greatest complaints about Government policy has been the rapid increase in the number and complexity of employment regulations.
And, as if right on cue, yet another set of Brussels-mandated employment regulations comes into effect in the UK today. → Continue reading: Laughable
Here’s a quiz. The UK government is squandering money all over the place. That’s what governments do, after all. Just look at National Rail, The Dome, Government Department IT projects… If you could choose one government project that was the most appalling of all, what would it be? Are there ones that we don’t know about?
I bought the paper version of the December 2003 issue of Prospect yesterday, and was all set to quote from the two pieces I’ve already been reading with particular interest, while apologising for not supplying any links. Well, I can, but in the case of the longer article only to an introductory excerpt. How long even these links will last, I cannot say.
From Michael Lind’s review of D. B. C. Pierre’s Vernon God Little, which won the Booker Prize.
At one point Pierre’s cartoon Texas sheriff says: “How many offices does a girl have that you can get more’n one finger into?” The comic malapropisms of pompous black characters were a staple of racist minstrel-show humour of the Amos ‘n’ Andy kind. If Pierre, purporting to unveil the reality of black America, had depicted a leering, sex-obsessed African-American police officer unable to distinguish the words “office” and “orifice,” would jury members like AC Grayling – a distinguished philosopher whose work I have long admired – have voted to award such bigoted trash the Booker prize?
But I don’t want to be too hard on the Booker jury. They’ve democratised literature by proving that a book doesn’t have to be any good to win a prize, so long as it exploits socially acceptable national and ethnic stereotypes. …
Assuming Lind is right about the crassness of this book, and although I’ve not read it I have no particular reason to doubt him, the next question is: why? What gives? Why this animus against Americans, and especially against those most American of Americans, the Texans. → Continue reading: Market-dominant minorities of the world unite!
George Monbiot has had a revelation… a few decades later than it should have been, but hey, better late than never. Having had the rare pleasure of meeting George Monbiot in the flesh, I was somewhat incredulous to read of his sudden insight that the only plausible way to end capitalism is with totalitarianism rather than caring sharing ‘democracy’:
Whenever anyone in Paris announced that capitalism in all its forms should be overthrown, everyone cheered. But is this really what we want? And, if so, with what do we hope to replace it? And could that other system be established without violent repression? In Paris, some of us tried to tackle this question in a session called “life after capitalism”. By the end of it, I was as unconvinced by my own answers as I was by everyone else’s. While I was speaking, the words died in my mouth, as it struck me with horrible clarity that as long as incentives to cheat exist (and they always will) none of our alternatives could be applied universally without totalitarianism.
Of course the choking weed of ‘democratic’ regulatory statism will continue to bugger up that great impersonal global capitalist wealth generation machine for quite a while yet. However in the long run Monbiot is quite right that the only way to actually kill off that protean virus-like thing called capitalism is to kill 20 or 30 million people in the developed world… and that ain’t gonna happen. Nevertheless, do not expect Monbiot to abandon his attempt to replace as many several social interactions as possible with collective political interactions any time soon (euphemistically called ‘making the world more democratic’). In many ways, his sudden realisation that he cannot wish capitalism out of existence by calling for a show of hands will make him more keen on gaming the system to achieve his ends, much the same way Ralph Nader holds himself up to be a ‘consumer advocate’ (and what could be more ‘capitalist’ that a ‘consumer’, right?) and speaking outside the tradition left wing meta-context.
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.
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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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