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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Last night, Elon Musk mentioned that the development cost of Falcon Heavy was about $500M, an astonishing sum, until you remember that NASA’s new Space Launch System has consumed about $20B to date and isn’t finished yet. Full development costs for SLS are said to be $35B.
Also, while Falcon Heavy re-uses most of its hardware and costs about $90M a flight, the current quoted SLS flight cost is $500M, and more realistically might reach $1B per flight.
However, while Falcon Heavy can only carry 63 tons to low earth orbit, SLS Block 1 will be able to carry 70 tons.
Eventually, SLS Block 2 will be available, with a payload of 130 tons to LEO. By that time, SpaceX’s BFR, which will be fully reusable, may be in flight. BFR will be able to carry 150 tons to LEO, and is intended to be fully reusable, so a flight may cost as little as a few million dollars — likely under 1/100th of the cost of a flight of SLS Block 2.
IKEA founder Ingvar Kamprad has has died. Evidence suggests that in his youth, Mr Kamprad was a Nazi. I don’t mean this in any metaphorical sense. He appears to have been an actual Nazi.
Mr Kamprad then went on to conquer the world through selling people flat pack furniture. Rather than the other way.
Mercantilists literally believe (even when they deny the belief) that money is wealth – that to accumulate money is to accumulate wealth and that to spend money is to become less wealthy. This mercantilist “reasoning” is why, for example, mercantilists applaud exports (because exports are sold for money) and lament imports (because imports are paid for with money). Thus the mercantilist obsession with the balance of payments.
Economists counter this mercantilist belief by pointing out that money is valuable only because it can be exchanged for real goods and services. Ultimately, wealth is not money and money is not wealth; ultimately wealth is the use of real goods and services. People who envy Jeff Bezos or Bill Gates or Dave the hedge-fund manager across town don’t really envy Jeff’s, Bill’s, or Dave’s possession of billions of Federal Reserve Notes (or of pieces of paper or streams of electronic bits that are easily convertible into dollars or some other currency). What the envious envy is Jeff’s, Bill’s, and Dave’s luxurious homes, luxury automobiles, private jets, top-rate medical care, and regular consumption of other real goods and services that are not affordable in the same quantities by less-wealthy people.
– Don Boudreaux
When there are no unemployed then the various capitalists are in competition with each other to find the labour they wish to exploit. That competition raising the price paid for the labour, that is, wages go up. Full employment really does mean wages rise. It’s worth noting that minimum wages have somewhere between little and nothing to do with this. The current Federal such is $7.25 an hour. Walmart already pays $10 an hour, from next month $11. Competition in markets is thus very much more powerful than legislation, no?
– Tim Worstall
In 1820, the vast majority of people lived in extreme poverty and only a tiny elite enjoyed higher standards of living. Economic growth over the last 200 years completely transformed our world, with poverty falling continuously over the last two centuries. This is even more remarkable when we consider that the population increased 7-fold over the same time. In a world without economic growth, an increase in the population would result in less and less income for everyone. A 7-fold increase in the world population would be potentially enough to drive everyone into extreme poverty. Yet, the exact opposite happened. In a time of unprecedented population growth, we managed to lift more and more people out of poverty.
[…]
Despite the clear evidence, many people are not aware of the fact that extreme poverty is declining across the world. The chart below shows the perceptions that survey-respondents in the UK have regarding global achievements in poverty reductions. While the share of extremely poor people has fallen faster than ever before in history over the last 30 years, the majority of people in the UK thinks that the opposite has happened, and that poverty has increased!
The chart below presents evidence from a survey in the UK, but ignorance of global development is even greater in other countries that were also surveyed. The extent of ignorance in the UK is particularly bad if we take into account that the shown result corresponds to a population with a university degree.
– Max Roser & Esteban Ortiz-Ospina
War and Peace is 1,200 pages long. Bleak House spreads to 1,000. Dodd-Frank, the US’s sprawling overhaul of financial regulations after 2008, runs to 848 pages – earning itself the nickname `Dodd-Frankenstein’. And the EU’s bumper trade deal with Canada reaches a hearty 1,600 pages. Last week, surmounting all of these achievements, the EU introduced a truly spectacular piece of regulation. `Mifid 2′ is its name and it weighs in at a princely 7,000 pages. That’s 1.4 million paragraphs, or six Bible-lengths. It must surely be a contender for the longest piece of red tape ever.
– Juliet Samuel (Daily Telegraph, registration required). Needless to say, people continue to drone on about “neo-liberalism” and “unfettered markets”. If only.
I can predict a standard retort: that if the UK wanted to be an enthusiastic EU member (no laughing at the back, kids) then it could influence the EU machine and reduce this regulation. But how has that worked out, really? True, I know of some politicians who have tried to slow this process down, but it continues regardless.
Sure, when the UK leaves, then UK-based firms that wish to do business with the EU will need to comply with EU regulations just as they must do so with the laws of the US, or Canada, Australia, or Planet Zog. But the process cuts two ways. If the UK parliament has any sense (big if, course) and keeps rules within bounds rather than “gold-plates” whatever is in force in other countries, then the UK will gain. Further, the very existence of countries with independent rule-making makes it harder for policymakers in transnational groupings such as the EU to create tax/regulatory cartels. (This is why countries such as Switzerland drive Brussels nuts.)
In time, the regulatory costs of doing business in the EU will cripple its financial markets, and that makes it rather harder to persuade yours truly that being outside this regulatory behemoth is so bad for business. Being outside a relatively free and flexible customs union, which is what the Single Market is, can sound risky, even daunting. Being outside an expensive, inflexible, bureaucratic nightmare is far less so. In fact, getting as far away as possible from such a structure is not just a smart gamble, but essential.
Public regulation is static by principle. According to his knowledge of the past, a regulator will define conditions for the presence. However, she cannot know what will come in the future. By definition, innovation represents the direct opposite. Innovator cares not about what people did in the past or what the current situation is. Innovation is a projection of the future. The issue arises when these two concepts collide in a concrete case. The regulators then judge the innovation on the basis of the old standards and the innovators judge the regulation based on their own vision of the future.
Today the static barriers of government regulations are exceeded by new technological innovations and new entrepreneurs. Therefore, it is necessary to take a step back and look at these issues from a broader perspective. We can also look at this problematics simplistically and see if the new technology fits into the official regulatory box, or not. And if it, by chance, doesn’t fit, we ban it automatically.
– Robert Chovanculiak
Specifically, Buffett offered to bet that over a ten-year period from January 1, 2008, to December 31, 2017, the S&P 500 index would outperform a portfolio of hedge funds when performance is measured on a basis net of fees, costs, and all expenses. Hedge fund manager Ted Seides of Protégé Partners accepted Buffett’s bet and he identified five hedge funds that the predicted would out-perform the S&P 500 index over ten years.
As I reported last September on CD, Buffett’s now-famous bet was actually settled early and ahead of schedule, because the outcome was so one-sided in favor of the S&P 500 index over hedge funds
– Mark Perry
I have been following this for a while and given my views on hedge funds, I was not in the slightest bit surprised at the outcome. Factor in fees, costs, and all expenses and the difference becomes eye-watering. Personally I am a big fan of the Terry Smith school of thought (which is to say when it comes to investments “don’t just do something, sit there!”): with a few glorious exceptions, managed funds almost always over-trade.
A hundred and fifty years ago it took twenty-five men to all day to harvest and thresh a ton of grain. With a modern combine harvester, a single person can do it in six minutes. In other words, it contributed to a 2,500-fold productivity increase.
– Johan Norberg writing in Progress: Ten Reasons to Look Forward to the Future.
Festive photos to add to that photo of meat, from Christmas Eve, meat which I was lucky enough to share.
That evening we all did much toasting, and one of us photoed all our glasses while we were doing this. Many get angry about the modern habit of photoing food and drink just before it is consumed, but I say: Why not? Where’s the harm?
On Christmas Eve I was too busy holding up my own glass and joining in the fun to be photoing it. But, I did take a photo of a very similar event back on December 18th, on Primrose Hill, just to the north of Regents Park:
Christmas, or in this case the run up to Christmas, is a time to renew old acquaintances. I don’t know who these people were and how they were connected, and in this time of computerised face recognition, I have deliberately made this difficult with my photo. Friends? Relatives? What I do know is that they were greatly enjoying each other’s company, just as Perry and I and his other guests did on Dec 24th.
Later on Christmas Eve I did get my camera out, and I got this shot of our Dear Leader, enjoying a present that one of us had given him, of one of his favourite chocolate treats:
On a more serious note, I have been reading Deidre McCloskey’s book, The Bourgeois Virtues. At the beginning of her chapter entitled: The Very Word “Virtue”, McCloskey offers a number of quotes from bygone years, including this one from Benjamin Constant, who until now has been only a name to me. Apparently, in the year 1814, Constant said, in celebration of the greatly increased opportunities for human enjoyment that commerce was at that time beginning to make available to the generality of people, this:
The progress of civilization, the commercial tendency of the age, the communication among the peoples, have infinitely multiplied and varied the means of individual happiness. To be happy, men need only to be left in perfect independence in all that concerns their occupations, their undertakings, their sphere of activity, their fantasies.
Plus, a bit of spare cash and the chance to spend it on luxuries, like high quality meat (as Perry put it: “Duck with skin turned to quackling, stuffed with pheasant & wood pigeon”), and amusingly packaged chocolate. Here’s another toast, to: stuff. The stuff that has, since Benjamin Constant’s time, so greatly increased, by means of exactly the processes he refers to.
Concerning who and what Benjamin Constant was, I have yet to read this. Tomorrow, I intend to. Happy Christmas everyone, what’s left of it.
I have a dim memory of a TV news report on how the 1973 oil crisis was affecting Holland. I can’t remember the specifics but it was something along the lines that the crisis was much worse in Holland than elsewhere. At some later date I got the idea that the Dutch had been selling arms to the Israelis and the Arab oil embargo introduced after the Yom Kippur War was much more strictly enforced on Holland than elsewhere.
As I got older (I was very young in 1973) this made less and less sense. How, I thought, do you control what happens to oil you’ve sold once it has been put on a ship?
For some reason this week I was reminded of this dim and distant memory and decided to do some duckduckgoing. I discovered that someone has written a book on the subject. This is what the rubric says:
The Netherlands played a remarkable role during the October War and the oil crisis of 1973. In secret, the Dutch government sent a substantial amount of ammunition and spare parts to Israel. The Dutch supported Israel also politically. Within the EC they vetoed a more pro-Arab policy. The Arab oil producing countries punished The Netherlands by imposing an oil embargo. The embargo against the Netherlands was intimidating. The Netherlands was dependent on Arab oil. The embargo seemed to threaten the Dutch position in the international oil sector. The government introduced several measures to reduce oil consumption. However, within two months it became clear that oil continued to arrive in Rotterdam. There was in fact no oil shortage in the Netherlands.
Oh.  Some hippies on a road on a “car-free” Sunday in Holland, made “car-free” because the government was worried about oil supplies.
Today the Shadow Chancellor John McDonnell launched a report commissioned by the Labour Party from GFC Economics & Clearpoint Corporation Management Ltd. I have had a quick read of it, not in any detail but enough to think that you might be interested in reading it too. Here it is:
Financing Investment: Interim Report
It is called Financing Investment but it does not say much about financing investment. I suppose a report called Let’s Put The National Investment Bank And The Strategic Investment Board And A Bit Of the Bank Of England All Next Door To Each Other In Birmingham And Mention It Twenty Times is better for votes in Birmingham. They’ll be able to put out a special Birmingham edition of Monopoly with that street collecting a massive rent.
However there is more to this report than just more swanky government buildings in Birmingham. Branch offices in Glasgow and Cardiff are also promised. And this caught my eye:
There is a risk that the disproportionate number of technology companies in London and the South East will increase, exacerbating regional inequality.
You hear that, South East? Only in Labourland is an increase in the number of technology companies in one area seen as a “risk” in itself.
But that is a mere taster. On page 47 we begin to reach the meat of the proposal. Rejoice! There is to be something called a Strategic Investment Board.
The Strategic Investment Board will sit at the heart of the economy, coordinating R&D, commercialisation and information flows
We learn that
3. The Strategic Investment Board will draw on science and technology to devise comprehensive policy proposals for investment. There will be an emphasis on R&D investment. Private sector R&D will not be crowded out. It will be encouraged.
It is nice to be reassured that private sector R&D will not be crowded out, but the very fact that the possibility is mentioned does rather imply that public sector R&D will be crowded in. Who will be deciding who gets this “investment”, and what reason have we to suppose they would be good at it? The answer is not reassuring:
5. Scientists and researchers at the cutting edge of their fields will be appointed to senior advisory positions. The Strategic Investment Board will also seek the advice of trade unionists, businesses and leading industrialists.
Ah, “getting round the table”, I remember that. I was too young to understand all the hoo-hah about Barbara Castle’s In Place of Strife in 1969, but I can just about remember the series of increasingly ineffectual “Solemn and Binding agreements” and “Concordats” agreed between Labour governments and the unions over beer and sandwiches at No.10 as the 1970s wore on. None of them stuck.
(Edit: in the comments Sam Duncan says, “So they’re basically digging Neddie and the NEB out of the dustbin and bunging them in the microwave for a couple of minutes, then? That’s the Great Corbyn Plan?”)
On page 48 it says,
The Strategic Investment Board will scrutinise and advise the monetary and financial policy authorities as banks shift from unproductive lending to innovative companies.
That all sounds very nice, but why is a bunch of scientists, businessmen and trade unionists moonlighting from their proper jobs expected to be able to tell what lending is unproductive? While lending to “innovative companies” can turn out well, it is not a game for amateurs. God only knows that the banks have not always done a good job, but at least it was their job. And it is strange to see the socialists display such faith that the capitalist exploiter will act for the common good and not, for instance, draw an enormous salary augmented by backhanders to ensure that companies in which he has a well-disguised interest get all this luverly investment.
On page 49:
We suggest that the Strategic Investment Board has six permanent committee members plus two
representatives, one each from the National Investment Bank and the publicly-controlled RBS. This
will ensure a consistency between the polices of the National Investment Bank/RBS and the Bank of
England.
Wha-wha-what is the Royal Bank of Scotland doing there? They’re not thinking of using money deposited by the public with RBS for this “investment”, are they? Investment specifically directed at innovative companies? That might, er, cause queues to form outside RBS branches on the morning of a Labour election victory.
I have left the biggest question, where the money is to come from – because I really don’t think RBS can cover it all – as an exercise for the reader. The Labour party answer is “From the National Investment Bank, stupid.”
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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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