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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Normally I would not bother to unpick the economic nonsense of Corbynista Owen Jones, but he has the sort of article up on the Guardian that passes for conventional thinking among a sizeable chunk of the population, so I am going to quickly have a pop at it:
Travel outside London….Britain’s deregulated bus system reveals itself as the source of widespread, justified disgruntlement – an overpriced, inefficient, poor-quality mess. According to a report to be published this week, since deregulation in 1986 – unleashed with the promise that “more people would travel” – bus trips in big cities outside London have collapsed from 2bn to 1bn a year. In London, on the other hand, where everything from how much we pay to which routes exist is decided by the mayor and Transport for London, bus use since the 1980s has gone in the opposite direction: from around 1bn to more than 2bn trips a year. Britain’s bus privatisation disaster is a story of profit before need, and a discomfiting tale for those who believe the private sector automatically trumps the public realm.
Jones doesn’t use the term, but he presumably thinks that the fact of there being far fewer bus services in the UK than a certain period in the past is a case of what economists call “market failure” – where there is a lot of supposed demand for X, but and under-supply of it, which needs to be fixed by, you guessed, the State (supported by the taxpayer, the very same people who are supposedly unable to pay for the under-supplied service). There are several issues here. First of all, services run by a municipality (ie, a monopoly with no competition) typically don’t lend themselves to good consumer service. Second, in a large metropolis such as London, where an organisation such as Transport for London runs things, there is still quite a lot of competition (cycling, walking, cars, etc) the abuse that any monopoly power has is constrained, although the situation is far from ideal. Funnily enough, the other day TFL, which had been lobbied by taxi drivers to go after Uber, seems to have decided against it, which is good news.
In the countryside, it may well be true that there are a dearth of buses. It may not be profitable to run them on certain routes, but is that an argument against private provision and for state control? In very sparsely populated parts of the country, it is a serious mis-allocation of scarce resources to provide such things when there are more urgent requirements instead for the resources in question. Second, if a person goes to live in the country, part of the pro/con of living in the back of beyond is that you don’t have lots of rapid-transit transport nearby. You may have to rely on having a car, driven by either you, or by a neighbour, partner, etc. That is part of the trade-off that comes from choosing to live in the sticks, rather than in the city. Why should those who have chosen the option to live in the country, or to stay there, be subsidised in transport terms by those who do not? In some cases, the persons paying for the subsidy will be far less well off than those taking advantage of it. That is the sort of regressive transfer of wealth that I assumed a lefty such as Jones would be against. This sort of issue also explains why, other things being equal, the cost of buying a home in central London is far higher than, say, the middle of Norfolk or Yorkshire.
Jones states that because, in his view, people “need” X that it is the responsibility, in the event of some alleged market failure, for the State to step in. But leaving aside whether the need is real or a figment of Jones’ socialist imagination, consider a basic example of a human need: food. Food is, despite some interventions and distortions created by the State, such as import tariffs and subsidies for farmers, largely handled in the private sector here. Ask yourself whether we would be better off in having food supplied by something such as Transport for London, or Sainsbury’s, Tesco’s or Asda. It does not even come close, does it?
I read this…
Pope tells Davos elite: Consider your role in creating poverty
…and my immediate response was “Fine, and then consider your role in creating poverty”. This economically illiterate collectivist favours precisely the sort of top-down state run economics that strangle innovation and distort markets to favour whoever can best manipulate the means of collective coercion.
I will admit to rather enjoying the sight of Donald Trump storming through the Republican race. It’s simply refreshing to see someone over turning the established and perhaps too measured way that politics has been approached recently. However, my enjoyment is as nothing to the perils of the economic policy which he’s just announced, which is that he’ll get Apple to start making “their damn computers” in America instead of in other countries. This is really not a sensible policy at all even though it accords with his other misunderstandings about trade. Because the net effect of such a policy would be to make America a poorer country. Something we’ve known since David Ricardo published in 1817. And, since making the country, or the people of the country, poorer is not at all the point nor purpose of having an economy, or even a public policy about the economy, this is something we really shouldn’t try to do.
– Tim Worstall.
Of course, I suspect that Trump knows full well that protectionism is a lousy idea and harms those who advocate it. I am guessing that he doesn’t care.
National Review’s Kevin Williamson has a book on Trump that makes for sobering reading. If anyone thinks Trump is any kind of supporter for limited government conservatism, I have a beach resort in Leeds I’d like to sell you.
Oxfam are at it again: The 62 richest people own more than the bottom half of all people. The last time this was measured it was 80, and before that 388. All this means the world is getting worse. Something Must Be Done. And so on.
Some thoughts in response, and I am glad to see that many Guardian commenters have had similar thoughts:
This is a really bad way to measure things. To be in the top 1% you just have to own a normal house in London. What do the top 62 have that the others do not? A bigger house in London and a functionally equivalent but shinier car. They are certainly not eating all the food and making everyone else hungry.
There is not a fixed quantity of wealth. The rich people being rich takes nothing away from the poor people. They control resources, in the sense that they get to have a bigger influence over what gets made, but for the most part they got rich by making useful things, so they are probably the right people to be making such decisions. Their idiot children who inherit the money will soon fritter it away on fancy cars and restaurant food, so it will get redistributed to factory workers and waiters in the end anyway.
By any real measure, such as infant mortality, nutrition, life-expectancy, number of people subsistence farming, access to clean water: things are getting better. There is a web site showing all this but I can not find it.
And what would Oxfam do about it, anyway? Force the rich people to give it to governments, probably. See my previous comment about who has proven themselves able to make useful things.
If there is one thing the BBC and Samizdata have in common, it is our coverage of all the important issues.
Simon Watson, 41, has been an unlicensed sperm donor for 16 years, donating once a week. “Usually one [baby] a week pops out. I reckon I’ve got about 800 so far, so within four years I’d like to crack 1,000.”
This is a whole new world of discovery for me.
The number of women using donated sperm to get pregnant is rising, but many find the cost of treatment at private clinics prohibitive. This has led some women to use unlicensed donors. […] Very few women are eligible for artificial insemination on the NHS as the criteria are very strict. Private licensed clinics cost between £500 and £1,000 for each cycle of treatment. Mr Watson charges £50 for his services […] “If you go to a fertility clinic people have to go through lots of hurdles – counselling sessions, huge amounts of tests and then charge absolute fortunes for the service – but realistically if you’ve got a private donor you can just go and see them, meet them somewhere, get what you want and just go,” he explains.
Regulatory hurdles push up prices for the end user, so the demand for cheap and cheerful is met elsewhere. But what about the supply side? Another BBC article, bemoaning the lack of donors, completes the picture.
Just nine men are registered as donors a year after the opening of Britain’s national sperm bank in Birmingham. […] Donors are paid £35 per clinic visit, but Ms Witjens said financial reward was not a good way to boost recruitment. “We might get more donors if we paid £50 or £100 per donation, but money corrupts. “If you feel you can make £200 a week for four months, you might hide things about your health.”
I would have thought women might want to be a bit pickier than have sperm from the kind of loser who gets out of bed for thirty-five quid.
So we have private services supplying a high cost, high quality product, but crowded and regulated out of providing better value or budget services. A state provider that manages to have nothing but shortages of supply and (I would guess) poor quality products. And a grey market filling in the gaps. This is not a new world at all: there is nothing new here. To make things better I would abolish the state providers and deregulate, creating an environment for reputable intermediaries to supply maximum value for money across the whole range of price points. If anything does change it will probably involve more rules and the criminalisation of the grey market, increasing costs and risks.
As The Big Short unfolds its racing narrative and the protagonists come to curse the authors of the disaster, and as the movie ends with the epilogue text running up the dark screen, we hear investment bankers, stockbrokers, and rating agencies condemned as pure frauds—criminals who should not have escaped jail. We never once—I know that this defies belief, given what has been published about the crisis—we never once hear government mentioned. Not the Federal Reserve, not the government-created, government-backed Federal National Mortgage Association or the Federal National Mortgage Association [Fannie Mae and Freddie Mac], not the legislation pressuring banks to make subprime loans. Not one word. A Martian somehow hearing and understanding this movie would not know that government existed—except for a few mentions of how government regulatory agencies were asleep at the switch. Capitalism, the private sector, through greed, stupidity, and sheer denial, brought on this epic collapse of the U.S. economy and endangered the world financial system, which had to be saved by governments.
It is impossible to see this as an innocent error. Perhaps in 2010, when Michael Lewis published his book—possibly, and I am stretching, here—a writer might have focused on the direct, immediate locus of the tragedy and missed its essential cause. But by 2015, when this film was completed and released, dozens of books and articles had laid out explicitly, irrefutably the role of government as enabler of the crisis. I might mention the account by a leading banker, John A. Allison, who went through the entire experience, managed his bank to save its depositors from the disaster, and then told the story in The Financial Crisis and the Free Market Cure [McGraw-Hill Education, 2012]. There are many other accounts, such as “Who Really Created the Global Financial Crisis”? The Big Short is told as though they do not exist.
Walter Donway, writing in the Savvy Street website (which I heartily recommend).
It is worth noting that portrayals of how financiers operate are not always bad or glaringly lacking in context. As mentioned on this blog before by Brian Micklethwait, one of the best movies made about the crisis has been Margin Call, starring the likes of Kevin Spacey and Jeremy Irons. That film does not seek to claim that bankers are all evil bastards masterminding, well, evil, like a lot of jumped up Bond villains who are evil because that is what they are. Rather, it shows a lot of flawed, not always admirable but very human, well, humans dealing with a fuck up as well as they can. Even Wall Street, the Oliver Stone movie of the 1980s, is pretty good to the extent that the “Greed is good speech” contains some pretty serious truths (alas, undermined by what Gordon Gekko says later about how business is about a zero-sum game, which it isn’t). It seems the fundamental failing of The Big Short (written by Michael Lewis), both in the book, and the film made about it, is what it leaves out, as Walter Donway correctly notes. There is no fundamental explanation of why the crisis happened. Ask someone why the crisis happened and they blather on about “bankers” or “greed” gives us as much information about developments as when a person tries to explain the origins of the First World War by saying “warmongering”, “Kaiser Bill” or “bayonets”.
I might see the Big Short, but given my own Scrooge-like approach, will buy the DVD when it comes out cheap, or via that capitalist marvel Amazon Prime, to which I now have access. (Woot!)
“Fear not,” said the angel at Christmas, “for, behold, I bring you good tidings of great joy, which shall be to all people.” Indeed. There has never been a better time to be a human being.
– Dan Hannan writes in Conservative Home that 2015 was the best year in human history, and 2016 will be better yet.
Libertarians are now the optimists about the human future, and collectivists are the pessimists. Libertarians know how to make the world better for humans and are doing this, by resisting and (wherever possible) rolling back collectivism. Collectivists never did know how to make the world better for humans, but now not even they believe that they know how to do this. All they can now do is fabricate catastrophe and demand that keeping human progress going be made into a crime.
Stefan Stern wrote the standard Guardian article about the awfulness of Uber, only this time it wasn’t Uber it was a bunch new to me called “Deliveroo”: “Deliveroo and its ilk are serving up low wages, insecurity and social division”. He wrote,
But we have clearly not even begun to think deeply enough about the implications for workers in all this.
A commenter called “narnaglan” replied,
There is nothing in this for you to think about. Deliveroo has nothing to do with you, since you are not a shareholder. The people who work for it choose to do so and are not forced. It is entirely legitimate, and ethical.
Your only response to Deliveroo, if you have a feeling that they are not doing it “right” is to start your own business, where the delivery people are under contracts and conditions that you feel are acceptable. If you are correct in your assumptions, Deliveroo will be driven out of business, and your new, ethical delivery service will immediately dominate.
But you will not do this.
Why? Because you are comfortable sitting on the sidelines telling other people how to live and run their affairs. You are not willing to take risk yourself, and have no original ideas of your own. All you are able to do is react to what other people invent, and criticize it through your distorting and inverting Guardianista Socialist lens.
Deliveroo and all other businesses that allow people to start work are useful and beneficial. The more companies in the market like it, the more jobs there are, and the better off people are. Someone with an idea will disrupt Deliveroo, which is the latest in a line of home delivery services that have existed for at least 18 years, one of the first being the Room Service delivery service that did not even have a website.
You people simply do not understand the market, innovation and how things really work. All you know how to do is destroy, call for people to be made unemployed and business to be made inoperable because you think you have the right to tell other people how to live, how to organize and what private contracts they make between themselvs are ethical.
You are wrong. About everything.
And also as ever, if you want to reduce inequality and also, not quite the same thing but close to it, raise the incomes of the working poor then what you should be agitating for is not more price fixing, but a return to full employment. Which, in this particular place and time, means arguing for less regulation of who may employ whom to do what and also arguing that the Federal Reserve should delay raising interest rates. For there are indeed things we can do to make the economy better but we do also have to make sure that they’re the right things.
– Tim Worstall, who is picking apart the thinking of the chief operating officer of Blackstone, the world’s largest listed asset management house. I have been to briefings where I have heard investment managers say that minimum wage laws are a good thing and have dismissed worries about unemployment, especially among minorities and the young, as unwarranted. What I fear is that there are now quite a lot of people working in the investment sector who have imbibed some “making water flow uphill” socialistic nonsense, and these folk now oversee our investment portfolios. It is definitely worthwhile spending time working out if the investment professionals in charge of your money subscribe to these ideas or not.
For a brilliant take-down of minimum wage laws, rent controls and other attempts to push up/reduce prices from where they might otherwise be, Henry Hazlitt’s Economics in One Lesson, over half a century old, is still a classic of devastating argumentation.
(Author’s note: corrected from the original where I wrote BlackRock rather than Blackstone. Mea culpa.)
“You can’t just continue growth for the sake of growth in a world in which we are struggling with climate change and all kinds of environmental problems. All right? You don’t necessarily need a choice of 23 underarm spray deodorants or of 18 different pairs of sneakers when children are hungry in this country. I don’t think the media appreciates the kind of stress that ordinary Americans are working on.”
— Bernie Sanders
“When I saw those shelves crammed with hundreds, thousands of cans, cartons and goods of every possible sort, for the first time I felt quite frankly sick with despair for the Soviet people. That such a potentially super-rich country as ours has been brought to a state of such poverty! It is terrible to think of it.”
— Boris Yeltsin
Post inspired by reading the story of how Boris Yeltsin went grocery shopping in Clear Lake, Texas, and discovered that perhaps socialism wasn’t all it was cracked up to be.
See also: the latest on the paradise that is Venezuela.
Monopolies are only sustained by force. Sometimes examples are useful.
In his book The No Breakfast Fallacy, Tim Worstall relates how in 2010 China limited the supply of rare-earth minerals to force the price up. The only problem was that rare-earth minerals are not rare at all, and the increased prices meant that Lynas Corporation and Molycorp were able to raise finances to re-open some mines that had been previously closed due to the previous low prices from China.
Today, Imprimis Pharmaceuticals announced that they are making for $1 an alternative to the drug Daraprim, in direct response to Turing Pharmaceuticals increasing its price from $13 to $750.
Update: Tim Worstall wrote about the Daraprim and rare-earths in Forbes. I hadn’t seen it when I wrote this, honest!
The idea that there is a fixed amount of wealth is a pessimistic fallacy held by cod economists. The idea that there is a fixed amount of stupidity is an optimistic fallacy held by cod psychologists. New forms of stupidity are being generated all the time; and this process is not the least hampered by old forms of stupidity continuing to flourish and even spring up anew in places from which naive observers had thought that particular species of stupidity had been eradicated.
The Guardian newspaper is a sort of Rare Breed Survival Trust for economic and political stupidity. It works to secure the continued existence and viability of endangered falsehoods. Heartwarmingly, its labours often meet with success and stupid ideas once considered moribund can thrive again. Not thrive in terms of achieving anything worthwhile, of course, because the ideas concerned are stupid, but in terms of being loved.
Let’s look at a case study of a fallacy brought back from the brink of extinction to flourish once again in the pages of the Guardian. I refer you to an article by Zoe Williams entitled “Poverty goals? No, it’s extreme wealth we should be targeting”.
Furthermore, as Martin Kirk from the activist network the Rules pointed out, all the language of sustainable goals frames poverty as a disease: eradicable, no match for the ingenuity of mankind, but fundamentally nobody’s fault. It is a landscape where everyone’s a hero and nobody’s a villain; one in which unfair trade agreements, land grabs, structural debt relations, privatisation of publicly owned utilities and tax evasion never happened.
Poverty is not a naturally occurring germ or virus; it is anthropogenically created though wealth extraction. Any goal that fails to recognise this is not only unlikely to succeed, but can only be understood as a deliberate act of diversion, drawing attention away from what might work; in its place, the anodyne, fairytale language of hope, in a post-ideological world where all politicians just want what’s best and a billionaire is just a benefactor you haven’t met yet.
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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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