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.
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In the comments to my earlier post about the West Indies Federation, Bruce relayed something his schoolteacher once told him:
Question to the class:
There are ten crows sitting on a wire.
You shoot one. (This was back when guns, shooters and shooting had not been totally criminalized by the ruling-class sociopaths).
How many are left?
Nine?
That would be the answer expected from most kids.
Correct answer?
NONE!
Crows, unlike most of the lamestream media, academics and politicians, are NOT STUPID.
To which Niall Kilmartin replied:
Bruce (November 23, 2017 at 8:11 am), there is a socialist version of your ‘crows’ story.
At one of the glumly festive parties Stalin used to inflict on his politburo cronies, he told the story of how, while he was in exile in Siberia under Tsarism, he was out skiing and saw several crows perched on a branch. He shot a couple then skied back for more ammunition, returned and shot the rest. After he left the room, Beria said, “He’s lying” (understandably the others were cautious in responding, fearing a provocation). Conquest, in his biography of Stalin, charitably suggests the story may have been just a Siberian version of the old US Western “tall tale’, told for entertainment as a whopper not intended to be believed. It has also been suggested that the crows’ feet were frozen to the branch and Stalin for once in his life was telling the truth.
Whatever the truth of it, the moral is clear: under socialism, the crows will not fly away.
Far be it for me to say that our Shadow Chancellor is taking tips from Stalin, but that line did remind me of what I heard him saying on an audio clip posted last week by Guido Fawkes:
McDonnell now sure there won’t be a run on the pound.
John McDonnell has changed his tune from Labour conference […] Now he insists “there’s never going to be a run on the pound” and “of course” he isn’t planning capital controls if it happens. Only a few years ago McDonnell used to openly threaten the City with capital controls if they opposed his policies.
The Times tells us that a moment of decision approaches. “EU nations will block Brexit deal if Britain ditches Brussels regulations, warns Michel Barnier”:
National parliaments or regional assemblies across the European Union will block a future trade deal if Britain tears up Brussels regulations on competition, food safety, social standards or environmental protection, Michel Barnier warned today.
The EU was alarmed a fortnight ago when Liam Fox, the secretary of state for trade, hinted that after Brexit Britain would ditch regulations on health and the environment to secure new trading deals with countries such as the United States.
In a stark warning to Conservatives and Brexit supporters, Mr Barnier, the European chief negotiator on Brexit, warned that Britain’s choice between Donald Trump’s vision of a deregulated laissez-faire economy
Are we talking about the same Donald Trump here? Swanky hotels, reality TV, funny hair, President of the United States of America? ‘Cos that guy’s a protectionist. Like you.
or the “European model” of social and environmental protection will determine the shape of a final Brexit deal.
“The UK has chosen to leave the EU. Does it want to stay close to the European model or does it want to gradually move away from it?” he said at the Centre for European Reform in Brussels.
Any preference?
Scotland has become the land of the minimum alcohol price. Gushingly the BBC says that Scotland will become the first country in the World to have a minimum alcohol price (if you don’t count prohibition as an ‘infinite’ price). The UK’s Supreme Court has ruled that the proposal does not violate EU law (when pretty much anything else might).
And of course, it is for the good health of the wretched, like Gorbachev’s war on vodka.
When he took over the Soviet government in 1985, Gorbachev unleashed a massive campaign to promote soft drinks and fruit juices — instead of vodka.
His government also hiked the price of vodka and severely limited its sale. In typical Soviet style, he also proposed truly heavy-handed, excessive regulations to combat the shift from vodka to other forms of alcohol.
For instance, in the south of Russia, 100-year-old vineyards were systematically eradicated. The result was predictable enough. There were huge lines in vodka stores, of course. And in those lines, arguments and fights broke out incessantly.
Prior to Gorbachev’s anti-vodka campaign, the drink was often consumed by a “troika.” Consuming vodka in groups of three made sense because a bottle cost three rubles. In this way, each person contributed one ruble — and in turn, each had one glass.
But now, instead of just boozing up with each other, people actually shared their misery about life in larger groups. These people realized that in their miserable, detoxed circumstances, waiting in line had never been harder. And it had never been more politically explosive.
However, this measure is backed by remarkably precise science:
27. The University of Sheffield study went on to model the effect of a 50 pence per unit of alcohol minimum price on drinkers in poverty and not in poverty. It concluded that annual consumption by harmful drinkers in poverty would experience a fall of 681 units (as compared with nearly 181 units for such drinkers not in poverty), while consumption by hazardous drinkers in poverty would experience a fall of just under 88 units (as compared with a fall of only 30 units for such drinkers not in poverty). There would be 2,036 fewer deaths and 38,859 fewer hospitalisations during the first 20 years of the policy, after which when the policy had achieved its full impact, there would be an estimated 121 fewer deaths and 2,042 fewer hospital admissions each year.
The good news is that this is not a tax, the extra cost goes to the retailer, not the government (or, worse still, the UK government) although presumably they will get a cut from the VAT imposed on the ‘value-added’ of the extra paid, but don’t get me started on that.
The ultimate justification, and the reason why it was all being litigated, was that the minimum pricing was one way to skin the cat without having a general tax increase, whilst balancing the government’s health policy against the right to trade freely.
As to the general advantages and values of minimum pricing for health in relation to the benefits of free EU trade and competition, the Scottish Parliament and Government have as a matter of general policy decided to put very great weight on combatting alcohol-related mortality and hospitalisation and other forms of alcohol-related harm. That was a judgment which it was for them to make, and their right to make it militates strongly against intrusive review by a domestic court. That minimum pricing will involve a market distortion, including of EU trade and competition, is accepted. However, I find it impossible, even if it is appropriate to undertake the exercise at all in this context, to conclude that this can or should be regarded as outweighing the health benefits which are intended by minimum pricing.
More good news is that the laws are ‘experimental’ (Where have we heard that before?), so will expire after 6 years… Don’t hold your breath waiting for non-renewal.
So are good times ahead for alcohol retailers in the English Border towns, as the poor, harried Scots seek to trade with free England?
On the plus side, it is at least not a tax. But what unintended consequences might flow?
Edits: My thanks to Longrider for reminding us of the (late, unlamented) Danish fat tax, butter late than never.
I note that Part VI of the Act of Union with England 1707 states:
That all parts of the United Kingdom for ever from and after the Union shall have the same Allowances Encouragements and Drawbacks and be under the same Prohibitions Restrictions and Regulations of Trade and lyable to the same Customs and Duties on Import and Export And that the Allowances Encouragements and Drawbacks Prohibitions Restrictions and Regulations of Trade and the Customs and Duties on Import and Export settled in England when the Union commences shall from and after the Union take place throughout the whole United Kingdom . . .
And the English Act of Union 1706 has the same wording.
Imposition of tariffs hurts the poorest in society, who spend a larger proportion of their income on food. To quote Daniel Hannan’s new Institute For Free Trade, in regards to industries that have been artificially propped up by government, “we must not shy away from the fact that some people lose out from free trade. But it is vitally important to clarify the scale on which this occurs. Many more people lose out from protectionist policies. The overall effect of an open trading environment on the economy is undoubtedly positive.”
In sharp contrast, Jones laid out his vision of post-Brexit Britain as follows: “What we can’t do is have free-trade deals that deliver cheaper goods in Britain but end up with us exporting jobs to somewhere else.” Like many protectionists who have come before him, Jones ignores both jobs lost to protectionism (more expensive inputs lead to more expensive outputs) and the very concept that for the last two hundred years has made his own nation prosper: comparative advantage.
– Alexander Hammond
Washington is a parasite that sucks the rest of the country dry. The counties surrounding Washington, D.C., have the highest per capita income of any metropolitan area in the country including New York, Hollywood and Silicon Valley. The unemployment rate is also the lowest of any large region in the country.
At least New York, Silicon Valley and Hollywood all produce something we need or enjoy. Washington produces red tape, taxes and new ways to handicap innovation on a daily basis.
While America staggers after its first lost decade (2007–17) and with a new lost decade set to begin (Japan, anyone?), Washington grows fat and rich. Trust me, the hotels and restaurants in town are jammed. No depression here.
– Jim Rickards.
Not sure I’d agree with him on Hollywood but he is one of an apparently growing number of commentators who have noticed the parallels between the West’s current predicament and the Fall of the Western Roman Empire.
The United States wants Canada to end supply management, which impedes agricultural imports – dairy, eggs, and poultry. Canada’s trade negotiators and politicians steadfastly refuse, and in their defense of the policy call up an astounding piece of logic: that the less Canadians have, the richer we are.
Canada’s Agriculture Minister insists that supply management is an “excellent system” and that “to deal with anything else is simply a non-starter.” Supporters on the left argue that the policy is necessary to protect domestic farmers from unfair competition from American farmers who receive government subsidies.
Conservatives have argued the same. Current Parliament Member and former International Trade Minister, Ed Fast argued in a recent essay that America simply wants access to the Canadian market “to deal with its own problem of overproduction, to the detriment of Canadian farmers.”
Here is what all proponents of supply management are arguing: If we allow the Americans to send us milk, then their problem of overproduction becomes our problem. Don’t you see how problematic it is, how much poorer we will become if we allow them to send to us the fruits of their overproduction, and at a low price to boot? Don’t you see how much richer we would be if we had less milk?
– Matthew Lau
Unilateral free trade benefits us all and even benefits the poor more than other groups in society. Just what we learned 169 years ago with the repeal of the Corn Laws. Further, as they say, tariff protection makes all poorer while also weighing more heavily upon the poor. This is not an argument in favour of trade protection.
Unilateral free trade it is then, eh?
– Tim Worstall
Complaints about the water industry, meanwhile, are at an all-time low and, according to the independent water consumer watchdog, satisfaction with the industry is at record levels.
If there ever was a time when water customers were ripped-off it was when water was state-owned and millions of households were sometimes paying for a service that had been cut off.
– Ian King
But I do think King is making a fundamental error by assuming the motives for nationalising has anything whatsoever to do with about producing better value, or improved management 😆, or in any way yielding more of the thing an industry does. Yes, I know what they say, and I can say I am a hippopotamus with opposable thumbs (I am, of course). Nationalisation is about a total world view, in which the state is all, and nothing must be beyond the reach of its unfettered power: the state is an end in and of itself. Quoting facts about the water industry at Corbyn supporters is not just an exercise in futility, it indicates a complete failure to understand the enemy. Indeed, the only reason to talk to them at all is for the benefit of third parties who may be listening.
The Guardian‘s Owen Jones asked the following question on Twitter:
How quickly should anti-LGBTQ rail tycoon and SNP donor Brian Souter’s assets be nationalised by a Labour Government?
As a side-issue to the recent decision by London’s TFL [Transport for London] to stiff Uber for alleged safety concerns (please try not to laugh at the back), it occurs to me that there are various reasons why people across the spectrum, including Tories, seem quite fine with the ban (it may be that Uber will do some sort of deal and get back into business in London, mind). One seems to be a sort of fogeyish dislike of Uber (it’s American, which is vulgar, and relies on newfangled tech that some people don’t understand, such as apps, and satellites, etc); another seems to be “fuck-the-consumer-why-can’t-they-use-the-night bus?” level of grumpy nastiness, and another is a sort of feigned, or maybe real, worry about the loss of a set of skills (learning the streets of London by heart). I regard the first two reasons as so fatuous as to not be worth responding to. The latter, however, does interest me.
Consider, a standard Marxist argument, and indeed one not just associated with Marx but even early classical economics (the Labour Theory of Value) It holds that the value which a provider of a service/product should receive is linked to his labour, his effort and skill (learned via effort), not simply the interplay of demand and supply. There are, of course, all manner of problems with it: you cannot simply work out whether a skilled worker is worth X or Y times more than an unskilled one – there is no formula to do this. Second, resource allocation is impossible if the amount paid for Y or X is based not on the relative differences in wants and scarcities of something, but labour, instead. The marginalist revolution in economics, which broke in the 19th Century and which seems to have passed Marxists by, points out that the subtle differences in the subjective preferences of people for this or that are what drive economic exchange. Prices are signals; a labour theory of value leaves out the vital signalling function of prices, which is why an economy driven by such a theory breaks down, with shortages of much-wanted goods over here, and a glut of not-wanted stuff over there (evidence: socialist countries throughout history).
It may be a bummer for the taxi drivers of black cabs who have spent ages learning the streets of London by heart – getting “the knowledge” – to find that satnav and apps have driven a stake into their business model and potential sources of earnings, and be forced to get all those newfangled gizmos and compete with a chap from Hounslow who is second-generation Indian and who cannot name the first-11 team sheet of your favourite soccer team. But in a free market, technology and innovation means the customer isn’t paying for the effort to acquire a skill, but the outcome of it. And that seems a tough argument to sell, but it is nevertheless correct.
On a related note, this essay by Jeff Tucker of FEE about marginal utility and human happiness is brilliant. I shared it on social media and people who might not normally give a crap about such ideas said how much they liked it. Economic wisdom can spread in mysterious ways!
Here’s where we get to the economics lesson. When producers aren’t allowed to profit, they don’t produce.
– Daniel Mitchell
Now this might seem screamingly obvious, yet even the UK is full of people who are either utterly oblivious to this self-evident and often demonstrated fact, or simply do not care, as equality via privation-for-all is actually their objective, with Venezuela’s example on that score being much admired.
Not paying corporation tax is an advantage to those who don’t pay it as against those who do. Which is what we’ve been saying about corporate and capital taxation all along. If you tax corporations then there will be less investment in them in your economy. This makes everyone poorer – the deadweight costs are high. This is indeed exactly the same reasoning which leads us to insisting, as a result of optimal tax theory, that we shouldn’t be taxing the corporations at all.
Which is interesting, even amusing, don’t you think? The EU’s justification for why they just must tax companies is the very reason basic theory says we shouldn’t be taxing corporations at all.
– Tim Worstall
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