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]

‘…If there are not… …great private fortresses… …to which you can flee from the State, …’ . And then the Patreon/Mastercard question….

The words of economist and philosopher Anthony de Jasay, in a long interview on YT. The full quote, as I transcribe it:

‘…The State can starve you if it has sufficient power over the economy. If there are not (as Schumpeter put it) great private fortresses in the economy to which you can flee from the State, when all these private fortresses are demolished, then you are utterly delivered to the State….’.

. He also said

‘…the State can starve you if it has sufficient power over jobs, over the economy, because it can decide that you will not get a job…’

But with the Patreon and Mastercard blacklisting of certain ‘right wing’ voices on YT, such as the brave Robert Spencer and where no state appears to have done anything, we have a situation where private companies are choosing to end contracts with individuals on what can only sensibly be termed political grounds. This might be the thin end of a very broad wedge. In a cashless society, it could make like very difficult indeed for certain individuals.

Now a libertarian might say that this is unfortunate but simply the choice of a business whether or not it wishes to do business with any particular person, and is not a matter for any form of legal regulation. Furthermore, if there is a breach of contract (e.g. a bogus justification for not processing payments), then damages are limited to the losses that flow from the breach and would cease at the point at which the contract could lawfully have been ended.

A counter argument might be that if it is to do this, a business (assuming that we are talking about the legal fiction of a body corporate) which seeks to refuse custom on political grounds (rather than on grounds of breaching the law), then it should be open about its aims, and be specifically empowered to pick and choose customers in its terms of service and in its company rules. So if Mastercard advertise to me that I can use my card for payment, without qualification, then it has fraudulently mis-represented to me what it will do since in an objective reality, making payment to Mr Robert Spencer, (pbuh) is perfectly innocuous, and my custom has been obtained by deceit, and Mastercard has in fact a general obligation to process payments made by me to whomever I choose, except where an illegality issue arises, where it need not advertise the fact.

And of course, a company does nothing, it has the legal fiction of a corporate personality, whereby it is supposedly liable for its acts, not always those who work for it. But if those who work for a company are not acting in its best interests, but in the interest of their own malevolence, can that company claim against them? Should the ‘veil of incorporation’ be pierced?

And what sort of a weapon might that be in certain judicial circuits in the United States, or other jurisdictions, where ‘social justice’ might be deemed a requisite corporate objective?

So, what would those who tend towards libertarianism, and some around here may be 0.999 (recurring) in the direction, others not so close to being an integer, say could or should be done about the situation, if anything?

And does the State (from its own pov) need to do anything more to restrict the internet if there is a ‘private’ solution to undesirable speech on the internet?

A couple of surprises in the Human Freedom Index for 2018

The Cato Institute has published its Human Freedom Index for 2018.

The jurisdictions that took the top 10 places, in order, were New Zealand, Switzerland, Hong Kong, Australia, Canada, the Netherlands and Denmark (tied in 6th place), Ireland and the United Kingdom (tied in 8th place), and Finland, Norway, and Taiwan (tied in 10th place). Selected countries rank as follows: Germany (13), the United States and Sweden (17), Republic of Korea (27), Japan (31), France and Chile (32), Italy (34), South Africa (63), Mexico (75), Kenya (82), Indonesia (85), Argentina and Turkey (tied in 107th place), India and Malaysia (tied in 110th place), United Arab Emirates (117), Russia (119), Nigeria (132), China (135), Pakistan (140), Zimbabwe (143), Saudi Arabia (146), Iran (153), Egypt (156), Iraq (159), Venezuela (161), and Syria (162).

The positions of Venezuela and Syria were about as surprising as a [insert your preferred metaphor of complete unsurprisingness here], but I did not expect to see Canada listed as more free than the United Kingdom and the United States as less free.

Alex Epstein on the 97% lie

Alex Epstein gives a well-deserved kicking to that 97% claim:

What you’ll find is that people don’t want to define what 97% agree on – because there is nothing remotely in the literature saying 97% agree we should ban most fossil fuel use.

It’s likely that 97% of people making the 97% claim have absolutely no idea where that number comes from.

If you look at the literature, the specific meaning of the 97% claim is: 97 percent of climate scientists agree that there is a global warming trend and that human beings are the main cause – that is, that we are over 50% responsible. …

But do the “97%” even say that? And are the actual percentage that do say that right? My opinion has long been: No; and: No.

I scroll down, and am pleased to discover that Epstein agrees with me:

But it gets even worse. Because it turns out that 97% didn’t even say that. …

Marxists used to believe that Marxist tyranny was needed to rescue the world’s economy from capitalists. But that excuse collapsed long ago. The biggest economic rescue acts that are now needed are to rescue the bits of the world’s economy that Marxist tyrants have been busy ruining. So, should Marxists abandon these methods? Yes. Are they abandoning these methods? Many presumably have, and have gone silent. But others, the ones we still hear shouting their nonsense, just fabricated a different set of excuses for those same old tyrannical methods.

Samizdata quote of the day

“Doing nothing is a full-time job. Don’t imagine that laissez-faire means putting your feet up. All officials want to extend their powers; all bureaucracies will grow if they can. To stop it happening you need to be at your desk before the civil servants come in and still be there when they go home.”

Sir John Cowperthwaite, financial secretary, Hong Kong in the post-war period. (Quoted in this excellent CapX article about the terrible mayor of London, Sadiq Khan.)

Here is a profile of Cowperthwaite for those who want to know more about this admirable person, as different from the London mayor as can be imagined in terms of managerial approach and political philosophy. (Here is an interesting leftist’s blog comment on Khan, proof that he is not universally beloved on that side of the spectrum).

On human culture – and on how it got printed and then electrified

This coming Sunday, January 6th, I am to give a talk at my friend Christian Michel’s home in London, about the historical impact of the technology of information storage and communication. The somewhat cumbersome title I have supplied to Christian goes like this:

The difficulty and the ease of the making of and the distribution of cultural objects: A history of human civilisation in three layers

Yes, a bit of a mouthful, but it’s a complicated story.

The pre-talk blurb underneath that title, that I also sent to Christian, and some of which Christian has just emailed out to his list of potential attenders, went like this:

I love grand theories of history, and here’s another: history in terms of the storage and communication of what is dryly known as “information”. In more vivid English, in terms of all the cultural meanings we have created for ourselves and for each other (and also at each other, so to speak) over the centuries since humans first contrived to craft meaningful messages beyond what they merely said to one another.

There are three “layers” to the story I’ll be telling, divided into three by two history dates.

Layer One: Creating “cultural objects” is difficult and so is transmitting or communicating them.

Layer Two: Creating “cultural objects” suddenly becomes much easier, for those who command the means to do it, but transmitting them or communicating them remains difficult.

Layer Three: Both creating and communicating messages becomes easy.

Layer Two starts settling on top of Layer One with the printing of the Gutenberg Bible in the early 1450s. Layer Three starts to settle on top of Layers One and Two with the invention of the electric telegraph in the 1840s. (Morse code etc.)

Layers rather than “eras”, because the cultural habits and political institutions established during Layers One and Two – the civilisational divisions of Layer One and the nationalist passions (to say nothing of printing itself) characteristic of Layer Two – never went away and are still very much with us today.

Of course there’s much more to my story than that crude summary. I will elaborate on the above simplicities as much as time permits.

I’d be interested in what the Samizdata commentariat has to say about all or any of this.

For now, I will merely elaborate a little, as I will on the night, on the matter of those “civilisational divisions and nationalist passions”.

→ Continue reading: On human culture – and on how it got printed and then electrified

This should not have been a surprise to anyone paying attention

Now there’s an all purpose headline. I could have used it for a dozen posts, but the particular unsurprising event I choose to talk about today is this:

Collapse of ethical lenders stokes fears over credit access

Ethical lenders that have been touted as alternatives to high-cost firms such as Wonga and BrightHouse are going out of business at the fastest rate in years, fuelling concerns that less well-off customers are in danger of losing access to credit.

Eight credit unions across the UK have collapsed in 2018, affecting 14,000 customers with more than £25m in savings, according to an analysis of data from the Financial Services Compensation Scheme. Meanwhile some of the most successful remaining groups are being forced to cut back on lending.

The figures mark the worst year since at least 2010, as the sector battles against rising regulatory and technology costs.

Credit unions provide savings and loan products for members, with loan rates capped at 3 per cent per month.

The Financial Conduct Authority and the government have been cracking down on high-cost sectors such as payday lending and rent-to-own retailers that are seen to take advantage of vulnerable customers, and have repeatedly encouraged unions as a more affordable alternative.

Tim Worstall has been going on about this for years. Anybody that lends to the poor – be it Wonga or the Church of England – is either going to have to charge hefty fees in proportion to the sums lent or lose money. There are two reasons for this. One, any sort of lending has to cover administrative costs. Whoever answers the phone and fills in the form and makes the decision has to be paid. The cost in staff time to approve a loan of a hundred pounds might be less than the cost of paying someone to approve a loan of a hundred thousand pounds, but it is not a thousand times less. Two, you have to cover the losses caused by those borrowers who default. Where does the money to do that come from? That’s right, the borrowers who don’t default. And, um, how can I put it tactfully… the sort of borrowers who need to turn to a payday loan company or a credit union are exactly those who are most likely to default because they are “running on empty” when it comes to money.

If a well-meaning government decrees that loan rates should be capped at three per cent per month, then the amount of money needed to cover the lender’s losses ain’t coming in. Soon the law-abiding lenders must leave the lending business, sending the poor who need money quickly into the hands of the loan sharks, people whose debt collection operation tends to be done via steel-capped boots. But never mind that, at least nasty payday lenders have been stopped from making a profit from poverty.

Dr Stephen Davies on the wealth explosion unleashed by railways

I’ve followed the career of Stephen Davies ever since I got to know him in the 1980s. Here’s a photo I took of him in my home in January 2000, when he spoke at one of my last Friday of the month meetings.

Tonight, I photoed Stephen Davies again. Well, to be exact, he was on TV, and I photoed my TV:

That’s Davies doing a talking head job on the subject of Trains That Changed The World. Good to see the Institute of Economic Affairs also getting a good plug.

I’m watching these shows now, as I write this. The transformation of the lives of the great mass of working people and their families in countries like Britain and America in the nineteenth century is being well explained. Karl Marx, were he watching, would be cursing. Immiseration? Forget it. It was more like a wealth explosion, made possible by railways, probably more than any other technology.

During the last few years, it bothered me that Davies seemed to be doing so much – lots of educational outreach for the IEA, for instance – that he might not be finding time to write any books. Oh me of little faith. In April of 2019, this book will be published:

And oh look. It will be entitled The Wealth Explosion. If what Davies was saying on the TV is anything to go by, and it surely is, then railways will figure prominently in this book.

I just noticed that the Executive Producer of Trains That Changed The World was the famously anti-anti-capitalist Martin Durkin. That explains a lot.

Why so gloomy?

Matt Ridley:

Has the percentage of the world population that lives in extreme poverty almost doubled, almost halved or stayed the same over the past 20 years? When the Swedish statistician and public health expert Hans Rosling began asking people that question in 2013, he was astounded by their responses. Only 5% of 1,005 Americans got the right answer: Extreme poverty has been cut almost in half. A chimpanzee would do much better, he pointed out mischievously, by picking an answer at random. So people are worse than ignorant: They believe they know many dire things about the world that are, in fact, untrue.

Before his untimely death last year, Rosling (with his son and daughter-in-law as co-authors) published a magnificent book arguing against such reflexive pessimism. Its title says it all: “Factfulness: Ten Reasons We’re Wrong About the World — and Why Things Are Better Than You Think.” As the author of a book called “The Rational Optimist,” I’m happy to include myself in their platoon, which also includes writers such as Steven Pinker, Bjorn Lomborg, Michael Shermer and Gregg Easterbrook.

For us New Optimists, however, it’s an uphill battle. No matter how persuasive our evidence, we routinely encounter disbelief and even hostility, as if accentuating the positive was callous. People cling to pessimism about the state of the world. John Stuart Mill neatly summarized this tendency as far back as 1828: “I have observed that not the man who hopes when others despair, but the man who despairs when others hope, is admired by a large class of persons as a sage.” It’s cool to be gloomy.

Studies consistently find that people in developed societies tend to be pessimistic about their country and the world but optimistic about their own lives. They expect to earn more and to stay married longer than they generally do. The Eurobarometer survey finds that Europeans are almost twice as likely to expect their own economic prospects to get better in the coming year as to get worse, while at the same time being more likely to expect their countries’ prospects to get worse than to improve. The psychologist Martin Seligman of the University of Pennsylvania suggests a reason for this: We think we are in control of our own fortunes but not those of the wider society.

There are certainly many causes for concern in the world today, from terrorism to obesity to environmental problems, but the persistence of pessimism about the planet requires some explanation beyond the facts themselves. …

One reason why people are so gloomy about the state of the world might simply be that most of us are genetically programmed to look more keenly for badness than for goodness, because badness, if ignored, might kill us. Impending disaster requires us to take action, by, say, getting out of its way. All that impending wonderfulness demands of us is … well, not much at all. As evolutionary scientists constantly remind us, what matters is individual and group survival and procreation, not the mere truth of things. If being unrealistically gloomy about the future of mankind makes us more likely to perpetuate our DNA, perhaps by making us believe that life has to be more of a struggle than it really does have to be, then maybe such pessimism is an attitude that has consequently become part of that DNA, in defiance of the mere truth.

But what do I know? Personally, I’ve always been an almost pathological optimist, about the world if not so much about my own prospects in that world.  That being all part of why I have read so much of what Ridley says on these matters.

Samizdata quote of the day

“The U.K. is a European country, and always will be. Trade and contacts among the nations of Europe can and should continue much as before. And I have no doubt they will do so. But the political nature of the EU has changed since monetary union. The EU failed to recognize that the euro would demand fiscal and political integration if it was to succeed, and that countries outside the euro area would require a different kind of EU membership. It was inevitable, therefore, that, sooner or later, Britain would decide to withdraw from a political project in which it had little interest apart from the shared desire for free trade.”

Mervyn King, former governor of the Bank of England. If you read his comments carefully, his displeasure at how the institution he led has become a plaything of Remainer propoganda is plain. His book, The End of Alchemy, contains a devastating take-down of the euro and is an explanation of why the UK had little alternative in the end but to leave. King was never quite of the full “establishment” – too much of the West Midlands grammar school boy to really be at ease in the EU corridors of power. Good.

And why might that be?

“Dublin’s landlords would rather put their properties on Airbnb than rent to local families,” wails the strapline to an article by John Harris in the Guardian called “30,000 empty homes and nowhere to live: inside Dublin’s housing crisis”.

To give him credit John Harris has never been one to do all his reporting from a swivel chair in Kings Cross. He was one of the few Guardian writers to foresee a Leave victory in the EU referendum, having co-authored with John Domokos a well-regarded series of video and written reports from some of the most depressed parts of the UK. Now he is talking to people struggling to find somewhere to live in Dublin. Here is how he describes the situation:

For want of a flat with a secure tenancy, the two of them have lived here for almost two years, in what the Irish government calls a “hub”…

*

I pay £95 for a single night’s stay (including a £43 “cleaning fee”), which highlights why whoever owns it has decided to rent it out in this way. The same move has been made by scores of other landlords: in August 2018, there were reckoned to be 3,165 entire properties listed on Airbnb in Dublin, compared with only 1,329 available for long-term rent.

*

The city is smattered with key boxes for Airbnb apartments. A stock line among activists demanding action from the government gets to the heart of all this: in 21st-century Dublin, they say, homeless families stay in hotels, and tourists stay in houses.

*

To make things even more difficult, her landlord then decided to sell up, which forced her to suddenly confront a private-rented housing market in which the monthly rent for anything similar was well over €1,500 (£1,300).

*

I am sure this is all honestly reported. But I think Mr Harris might be failing to see what is in front of his nose. All else being equal, most landlords prefer long term tenants to short term ones. A nice steady sum arriving in the bank every month makes for an easy life – and for a relationship of mutual trust to grow between landlord and tenant. In contrast. short term lets carry many risks: that the tenants will not look after the place, having little incentive to do so; that they will get into arrears with the rent or skip without paying it, and, most obviously, that the property will sometimes be vacant and earning you no money.

When most of the landlords in a place are seen to flee the predictability of the long term market for the uncertainty of short term lets, or even more perversely for the sheer unrelenting work involved in “turning over” a property every few days for each new AirBnB customer, there is usually a two word explanation. I did not see those two words anywhere in Mr Harris’s article, though this sentence came close:

Central Dublin – along with 20 other areas of the country – is now classified as a “rent pressure zone”, which caps annual rent increases at 4%, but politicians and activists claim this gets nowhere near tackling the causes of skyrocketing housing costs.

The missing two words were, of course, “rent control”. I don’t know Dublin. I don’t know its housing laws. But as soon as I saw that line “For want of a flat with a secure tenancy” I knew that rent control was at the bottom of this story. And so it proved. It took me only a few keystrokes to find this report by Fiona Reddan in the Irish Times:

Will rent controls start to work in 2018?

That was written in January. It is now December. Judging from Mr Harris’s description, it looks like rent controls in Dublin “worked” exactly as rent controls usually do. If he had happened to read Ms Reddan’s prescient article from eleven months ago (I suppose it would be asking too much for him to have read Henry Hazlitt’s even more prescient words on rent control, written with reference to New York in 1961 but eerily applicable to Dublin in 2018), he might have had a somewhat better idea as to why the 4% cap on rent increases fails to tackle the causes of the crisis, as he sees it. Answer: it is one of the causes. Ms Reddan writes,

If you’re wondering why the much-vaunted rent controls, first introduced this time last year, are having so little impact on stalling price growth, consider this investor’s tale.

He had a house rented out close to Dublin that was bringing in €1,300 a month – far below the market rates, which were more than €1,800. Stymied by the rent controls, which limit rent increases to 4 per cent a year (and 2 per cent a year for tenancies in place before the end of 2016), when his tenants left he was looking only at marginal increases in his rent.

So what did he do? Sold this property and bought the one next door. Previously owner occupied, it wasn’t subject to rent controls, which meant that he could slap a new, higher rate of €1,900 on it. The difference in rent quickly covered his legal and stamp duty costs.

A fallacy

I recently went along to a financial markets briefing in the City (as part of my job; I do these things so you don’t have to, dear reader), and we got onto the subject of the eye-watering amounts of public debt in the West.In the US alone, the total debt is around $22 trillion (we must hope that if the economy is as robust as Donald Trump claims, that some of this gets repaid). And the economist in the room, when asked about this, and about how future generations are being asked to pay for our current profligacy, liked to refer to the following quote, from one Abba P Lerner, quoted in 1948. (Lerner was a Russian-born British economist). The quote goes: “Very few economists need to be reminded that if our children or grandchildren repay some of the national debt these payments will be made to our grandchildren and to nobody else.”

All very clever, and people in the room (apart from yours truly) nodded their heads at such profundity. So the UK/Western debt is terrifyingly big? Heh, no bother, because our kids/grand-kids will repay it, to er, each other, or something.

But wait a minute. If the UK racks up, say, £5 trillion of debt, and the interest charges to service that debt are still, say, the equivalent of several government departments (such as defence, health, etc) then that is money that has to be found, and yes, the payments of some of those will be paid to other, very much alive Britons, but would those people rather not have to repay it in the first place, but instead use savings to finance investment in productive goods and services? In other words, the inter-generational wealth transfer issue doesn’t become less of a horror. If the present generation racks up a bloody great debt, then the following one is left with a collective bill that it would, other things being equal, prefer not to pay. And there comes a point, of course, when the cost of financing the debt repayments can be so big that current economic growth and revenues cannot fund it, so you end up in a Latin American crunch, a sort of liquidity nightmare. So the question is at what point does the stock of public debt go from being this sort of seemingly benign shuffling of paper from A to B to something out of a disaster movie?

One thing that ought to give people pause about the blithe statements of economists about debt is that some debt down the years has been financed by debasing money – in other words, inflation. The robbery of savers and encouragement of financial speculation and finagling is, paradoxically, a reason why we have seen relatively slack productivity growth and hence stagnant real wage growth in the West in recent years. (Ultimately, real wage growth requires more productivity, and that needs to be financed by real savings, not central bank fairy dust.)

I commend readers to the studies and writings of a friend of mine, Scottsdale, Arizona based investment figure Keith Weiner, who has noted the link between very low, or even negative interest rates, capital destruction, and crap wage and income growth. Far too many on the free market side are in denial that we have suffered from poor wage growth, but we have. It is one of the reasons for why charlatans and thugs such as Jeremy Corbyn and all the rest have been successful, because some of their critiques about living standards are true. Their diagnosis, of course, isn’t.

The Depression hasn’t gone away you know

I know all of us on this side of the Atlantic are terribly excited about the latest Brexit/leadership crisis but – unbelievable as it may sound – there are even bigger fish to fry. A stock market crash is looming. Yes, I know I have said that every year since the 2008 financial crisis but this time it really, really, really might actually happen.

In this presentation – which sadly includes a little bit of advertising – Jesse Colombo outlines why he thinks a crash is imminent.