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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Not that I’d want to make this a hard diagnosis but much of the vague lefty wibble that used to infest economics has moved over into anthropology. I assume because economists have had to actually accept the real world evidence of the world out there getting richer, of lives getting better. You know, all those pretensions to being a science and thus testing hypotheses.
That one’s difficult to explain by the idea that socialism makes the people rich for example.
So, the woo is relegated to anthropology, where actual facts aren’t quite so important.
– Tim Worstall
The logistics chain that is Amazon, or Walmart, or even a Ralph’s, is one of the grand capitalist achievements in history. It used to be, in those heady days before the capitalists inserted themselves into the food supply system, that the working man spent 80% of income on food and rent. Sure, rent is a bit of a problem in certain places still. But food bills have fallen to perhaps 10% of household income.
We can check this too. Back in 1962 or so Mollie Orshansky noted that a poor family was spending about 30% or so of income on food. So, if we take a reasonable diet and triple it – roughly – then we’ve got a reasonable estimation of the poverty line. Sure, it was a back of the fag packet estimation and was meant to be used for a year or two while they all figured out something more sensible. But that is what the Official Poverty Line in the US is today, merely upgraded for inflation. And as general inflation has been significantly higher than food price inflation over those decades that average poor family, on the same inflation adjusted budget, is now spending 12 to 15%, not 30%, of their budget on food.
Supermarkets are the reason why. The people who own supermarkets charge a 1 or 2% margin on their activities. They get 2%, we get a 50% reduction in costs. It’s one of the great bargains of all time.
And this is what Guardian columnists complain about…
– Tim Worstall
The bank formerly known as RBS, now called NatWest Bank PLC, has announced that if Scotland votes to leave the UK, it will move to London
Britain’s NatWest would move its headquarters out of Scotland in the event of a vote in favour of independence, its CEO Alison Rose said, only days before parliamentary elections there.
State-backed NatWest (NWG.L), which until last year was called Royal Bank of Scotland, has been based for 294 years in the Scottish capital Edinburgh.
The reason, something to do with a anti-business culture in an independent Scotland?
“In the event that there was independence for Scotland our balance sheet would be too big for an independent Scottish economy. And so we would move our registered headquarters, in the event of independence, to London,” Rose told reporters.
This is presumably not meant to be a threat from the majority (c.59%) State-owned bank or playing politics. For a bit of context, the RBS Group changed its name recently to NatWest Group plc with a view to (I presume) burying the RBS brand and plunging a stake through its heart after its unfortunate recent history. NatWest was an English bank acquired by RBS as it ballooned before bursting
I have no doubt that the Chief Executive did not say, and did not mean to say
‘our balance sheet would be too big for an independent Scottish economy if we go bust again.‘.
But the latter is what I am hearing. An implicit admission that the bank risks insolvency, and would expect to be bailed out by the UK government at taxpayers’ expense again. The assumption that the bank is at risk of bankruptcy runs through this announcement like letters in a stick of rock.
So England, Wales and Northern Ireland will be the lucky recipient of all these (theoretical) liabilities.
No true Scotsman should fear independence if it means the departure of this fiscal UXB and its liabilities, a chilly modern-day Darién scheme without the disease and bugs.
But why on Earth should anyone in any country want to receive such a cuckoo in the financial nest? It sounds to me that if the bank were utterly worthless, that would be an improvement. Do we need any more evidence of the perils of fractional reserve banking?
“America innovates, China duplicates and Europe regulates.”
– Jeremy Warner, Daily Telegraph, (behind paywall). (He is writing about the EU’s Precautionary Principle and generally silly approach to new technologies. These are differences of degree, of course: it is not as if the US is quite the swinging-from-the-chandeliers classical liberal place of yore.)
Conspiracies are almost always bunk (but note that word ‘almost’). In the vast majority of cases, there are other better explanations for why things happen. Also, it ain’t a conspiracy if it is right out in the open for all to see. And by out in the open, I do not mean people saying “we are going to screw you over”. No, forget what people say, just focus on what they do and try to actually make happen. Once you understand what their objectives are, and the incentives they respond to, you can (almost) always parse their proclamations and get what they actually mean. An oil company’s objective is to produce oil, right? So, why would an oil company support phasing out internal combustion engines? Well, an oil company’s objective is not to produce oil, it is to make money and keep its employees in their jobs. And you can also make money by having governments give you taxpayer’s money to develop alternatives.
Big business seeks unified, market-based approaches ahead of climate summit
Corporate executives and investors say they want world leaders at next week’s climate summit to embrace a unified and market-based approach to slashing their carbon emissions. The request reflects the business world’s growing acceptance that the world needs to sharply reduce global greenhouse gas emissions, as well as its fear that doing so too quickly could lead governments to set heavy-handed or fragmented rules that choke international trade and hurt profits.
– Reuters (2021)
Note that phrase “fragmented rules”. There is even a photo in the article of some poor impoverished fellow titled “A farmer burns paddy waste stubble in a field on the outskirts of Ahmedabad, India”. No doubt this man is filled with a frisson of excitement at the prospect of having his costs massively increased by getting rid of internal combustion engines, and maybe even having some patented GMO seeds foisted on him that he has to pay for annually.
So, here is another quote.
Fascism is the organised attempt to introduce socialist planning with the consent of big business
– Edward Conze (1934)
Conze’s quote is very illuminating and even from the perspective of a deeply unpleasant man writing in the 1930s it is on the money. Where I think Conze’s observation needs a bit of updating is fascism (or alt-socialism) circa 2021 does not look exactly like fascism circa 1934. The ‘organised’ bit these days lacks jackbooted chaps marching down the street (well, usually), and modern neo-racism is tactically different to the way it was done in 1934, albeit the primary objective is still segmentation of populations into manageable groups.
Admittedly, Chinese Han nationalism is a bit more like paleo-racism than the neo-racism of the 白左 Wokesters of the Western world, complete with jackbooted thugs marching down streets, but in most other respects, the Chinese Communist Party has provided a master-class in how an ineffective Marxist socialist regime can quickly adopt the more effective and pragmatic outsourced fascist approach to planned socialist societies. A lot of people in the west look at China and rather like what they see.
When big businesses argue for higher taxes and more regulation, it takes wilful blindness to not see why they are saying these things. It is because it gives them a comparative advantage over less well capitalised up and coming rivals who lack huge compliance departments. Moreover, it strangles future would-be rivals at birth, making it too expensive to even try and get a business based on little more than a good idea off the ground. Just make sure the regulations and costs apply to everyone, no “fragmented rules” that leave gaps in which dangerous weeds might grow.
It is not a conspiracy, because not only is this completely out in the open, it is just a confluence of interests between people with monetary and political power, bureaucrats public and private looking to maintain their power and prestige.
By running their ship aground in the Suez Canal, the owners of the Ever Given, Japanese firm Shoei Kisen KK, unilaterally realized the dream of Peter Navarro and other radical protectionists. For seven glorious days over $9 billion dollars worth of goods per day were stopped from flowing through the Suez Canal. Much of that was headed to the United States and would have added to the “trade deficit,” thus (allegedly) wrecking havoc on the United States. Many hundreds of ships loaded with hundreds of thousands of containers full of all kinds of exports are still backed up. The impact on supply chains will continue to be felt long after the forces of free trade got the ship back on its way. According to Lars Jensen, chief executive of Denmark-based SeaIntelligence Consulting, “The effect is not only going to be the simple, immediate one with cargo being delayed over the next few weeks, but will actually have repercussions several months down the line for the supply chain.”
The doctrine of the balance of trade has been around for centuries. It has also been refuted for centuries.
The protectionists should award the captain of the Ever Given a medal for – literally – blocking trade. Protectionists seek to block trade. And that’s what the Ever Given has done. (Free traders argue that protectionism isn’t a useful descriptive term, because blocking trade doesn’t protect a country, although it does protect special interests from competition.)
Of course, no serious person would propose an award to the captain of the Ever Given, but there’s really no economic difference between the bulk of a gigantic ship physically blocking trade and the armed police of the Customs and Border Patrol coercively blocking trade.
– Tom Palmer
“Don’t give us $2bn loan, Kenyans tell IMF”, reports the Times.
A $2.34 billion bailout for Kenya from the International Monetary Fund (IMF) has provoked anger among its citizens rather than relief.
Since the three-year package was disclosed, the IMF’s social media sites have been peppered with complaints under the hashtag #StopGivingKenyaLoans. A petition demanding that the loan be cancelled has gathered a quarter of a million signatures in a few days.
The east African state is already struggling to pay off debts that are expected to peak next year at 73 per cent of GDP. President Kenyatta has admitted that every day $18 million is lost from state coffers to corruption.
…
In a post on the IMF Facebook page, Mwihaki Mwangi said that the loan would do more harm than good. “Stop lending money to the Kenyan government,” he wrote. “It ends up in a few corrupt pockets. No change in living standards to the common citizens. We are becoming poorer and poorer. Heavy taxes levied on our meagre salaries. Reverse the loans.”
“Konrad Adenauer, the first post-war West German chancellor, reportedly once said that people who own a detached house rarely become revolutionaries. Whether he actually said that or not, his government certainly acted upon it, facilitating large-scale housebuilding as a means to promote political and social stability (as well as, presumably, for the more self-interested motive of winning votes). The dictum also holds in reverse: if you deliberately wanted to alienate an entire generation and turn them against the market economy, creating a severely supply-constrained housing market like the British one is exactly the way you would do it.”
– Kristian Niemietz
In case anyone brings this up, central bank money printing is a factor behind the inflation in residential prices (rents, mortgages) relative to post-tax income, but probably not the only factor. There’s also a rising population as birthrates are a touch above replacement level, immigration (although that might have changed a bit since the Brexit vote of 2016) and changed household composition (divorce, more people living in single-person units, etc).
“On the surface, it is hard to understand why the EU is resorting to such extreme measures. According to the consultancy firm Airfinity, even if the EU does ban exports, it will gain only an extra week of supply, while the British will lose two months. The political and economic price will be high. The EU will trash its reputation as a place in which to do business. Why base a plant in somewhere such as Leiden if the authorities will seize control of production lines whenever it is convenient? If these contracts get overridden by bureaucratic fiat, then so can any other agreement. (After all, if the AstraZeneca deal with the EU was legally binding, the company would have been hauled before a judge in Brussels by now.) The EU risks turning itself into a pirate state, for very little gain, which helps explain why smaller countries that depend on multinational investment, such as Ireland, have become nervous. Blind panic is the only explanation that makes sense.”
– Matthew Lynn.
In the past, some classical free market types preferred that the UK stay in the EU as the lesser of two evils, and although I think they were misguided, I understood that basis of such a concern (loss of free movement, etc). Given the behaviour of the EU over vaccines, including an obvious contempt for private property, contracts and so forth, the classical liberal case for EU membership looks very ragged now. At the very least, the risk-reward trade-off of being in such a bloc must have shifted. I wonder whether one or more of the smaller nations might bug out if this sort of shit continues. And I am sure some Scottish voters, tempted by independence but concerned about what it means to stay in the EU and be under its single currency, are now thinking.
These days, government laws mandate that food produce sold in stores must contain lots of information in the label, such as trans-fats, sugar, salt, etc. There are warning labels on certain products, such as cigarettes, all the way through to household detergents, home DIY equipment, paints, plastic bags, you name it. It isn’t clear to me how much of this ever is read closely by consumers, but presumably policymakers hope people do study the label. And when it comes to food allergies, those who suffer from them (nuts, gluten, dairy, etc) will look at them.
I have been listening to this Reason podcast about Phil Harvey and Lisa Conyers, authors of a book who go into the gazillions paid out in subsidies to various business sectors in the US. Their book covers everything from Elon Musk’s Telsa through to the sugar farmer lobby. And during the podcast a suggestion was made – perhaps tongue-in-cheek – that goods and services that have received a subsidy/tariff or other privilege from the State should have that fact posted on the label. Imagine buying a car and having a label in the contract stating “this car has been produced with taxpayers’ money”, or, to take a different example, “This sugar has been made more expensive because of public policy”, etc.
Inflation, like sin, is an inevitable consequence of choices people make. But to strategise it as a policy is wrong. It undermines confidence not just in the money supply of the moment, but in the nature of money itself. This government, via the Ponzi scheme of “quantitative easing” is pumping inflation into the financial structures of the UK. This is a deep subversion of the concept of money itself.
– Sean Walsh
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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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