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]

In praise of globalisation…

So you were expecting some long libertarian paean to globalisation, eh?  Perhaps you thought I was going to use my usual taunt at ‘locavores’ that unlike them, I dislike the idea of poverty and so have nothing against purchasing products from the less wealthy rather than just from tax subsidised first world farmers…

 

vodka_pickles

 

Not this time… because sometimes a picture from inside Festung Samizdata is worth a thousand words.

Changing a narrative

This caught my eye:

A favorite “progressive” trope is that America’s middle class has stagnated economically since the 1970s. One version of this claim, made by Robert Reich, President Clinton’s labor secretary, is typical: “After three decades of flat wages during which almost all the gains of growth have gone to the very top,” he wrote in 2010, “the middle class no longer has the buying power to keep the economy going.” This trope is spectacularly wrong.

Don Boudreaux and Mark Perry, via the Wall Street Journal. (Via Cafe Hayek.)

That is not to say that the growth rate could not and should not have been better. But that is not the same thing.

I am a British citizen with ambition: get me out of here

A lot of British people have done a “John Galt” in recent years, it seems, according to UK member of Parliament Nick de Bois:

Mr de Bois said tax does play a part in emigration, but suggested that culture is a more important factor, warning that Britain should encourage people to succeed and get rich, not criticise them. “Government must help lead a culture change in this country that competes with the new economies, one where competitiveness and success are valued and personal achievement and personal wealth are respected, not pilloried,” he said.

If you are mystified by the “Galt” reference (most Samizdata regulars will know it), it refers to the plot of Ayn Rand’s Atlas Shrugged, in which a character called John Galt leads a “strike” of the top businessmen, scientists, artists and others to abandon their work at a time when such people are increasingly hampered by the State. In the US, the expression “Going Galt” has caught on to describe the sort of thing written about here.

Of course, emigration needn’t be a bad sign for a country and indeed, in some countries, emigration can relieve domestic pressures. In the 19th Century, large numbers of Britons left for the New World, seeking a better life. Of course, many from the around the world did so for reasons of persecution and poverty. The ability to exit a country is also one of the few things that might persuade an otherwise foolish government to pursue policies that encourage wealth creation rather than hurt it. As I have noted before, the ability of the super-rich – or indeed far less wealthy people – to get their money abroad, or move overseas, can be a healthy constraint on government. That is why I think “tax competition” between jurisdictions, far from being an evil, as leftist campaigners claim, is a good force in the world. And so it is important to bear in mind that when governments impose capital controls and exit visas, be very afraid.

In the meantime, although I don’t agree with all of its views, this book, Exceptional People: How Migrants Shaped Our World and Will Define Our Future, by Ian Goldin, Geoffrey Cameron and Meer Balarajan, is worth a read. (I am not so keen on some of its Transnational Progressivist leanings, though).

 

 

 

The Invisible Hook

In a discussion about a computer game, someone mentioned a book about 18th century piracy: The Invisible Hook by Peter T. Leeson. Click to look inside and the first words you will read are:

I’m not a historian. Nor am I a pirate. I’m an economist with a long-standing interest in privately created law and order who happened to wonder one day how pirates cooperated since they had no government.

Sold!

Obeying the law is not enough – you have to read politicians’ minds, apparently

Here is a classic piece of nonsense to start this week in chilly Britain:

The UK tax authority said the amount of tax that big companies may have underpaid by using artificial intercompany transactions to inappropriately reduce taxable profits has risen 48 percent last year. The figure comes as public anger grows over tax avoidance by big businesses and British MPs investigate possible remedies.

– (From a report from Reuters.)

I read this report carefully and nowhere does it say that the firms concerned have broken laws, engaged in fraud, or used violence or engaged in criminal acts. They are taking full advantage of the laws of the jurisdictions with which they have contact, as their shareholders would expect them to do in maximising shareholder returns. If politicians really wanted to reduce what they see as such dodgy tax avoidance, perhaps they should enact taxes that are simple, low, and flat. This is not rocket science, as the 2020 Tax Commission report issued last year showed.

The recent naming and shaming of Starbucks, for example, of simply making use of legal arrangements, was particularly odious. No wonder people are thinking that we are living in a world like something from the pages of Atlas Shrugged.

Tim Worstall writes about this sort of issue a lot, usually in the process of skewering that socialist “accountant” from Wandsworth, Richard Murphy. Tim is always entertaining and instructive at the same time.

 

 

For hungry readers, here’s some thoughts on food

It sometimes makes me wonder why so few people seem to draw the connections between stories in the media that cry out to be connected. Here is one example, to do with food:

The price of basic food items could rise by as much as five per cent this year because of miserable weather last autumn, the managing director of Waitrose has warned.

Mark Price said food price inflation is already hovering at three to three and a half per cent, but this is just “the tip of the iceberg” and prices could increase even more dramatically over the coming months.

Produce such as bread and vegetables will become up to five per cent more expensive because of poor crop yields leading to a shortage of supply, he warned.

Many farmers are reporting that they still have not planted crops for 2013 because of the torrential rainfall which caused flooding across parts of Britain late last year.

From the Daily Telegraph.

Then there is this item about the waste of food in some countries:

Today, we produce about four billion metric tonnes of food per annum. Yet due to poor practices in harvesting, storage and transportation, as well as market and consumer wastage, it is estimated that 30–50% (or 1.2–2 billion tonnes) of all food produced never reaches a human stomach. Furthermore, this figure does not reflect the fact that large amounts of land, energy, fertilisers and water have also been lost in the production of foodstuffs which simply end up as waste. This level of wastage is a tragedy that cannot continue if we are to succeed in the challenge of sustainably meeting our future food demands.

Something is wrong with this picture. On the one hand, we are warned that food could be in much more scarce supply, hence the risk of skyrocketing prices; on the other, we produce oodles of the stuff and yet are wasting it, in various ways (poor storage, silly bureaucratic rules about sell-by dates, lack of basic knowledge about cooking, the ease of throwing out food rubbish.) It seems to me that inasmuch as there is a genuine problem, it is that we don’t have a full free market in food. If those who talk in horror about rich Westerners chucking out half-eaten meals really are disgusted by this, how much more disgusting are policies such as EU payments to farmers not to produce food under what is called “set aside”? (This is a policy pioneered by that champion of bad economic ideas, FDR, in the 1930s). And tax-subsidies for “biofuels” that distort agriculture markets are another glaring form of waste, surely. (It is also worth bearing in mind that state-subsidised farming is often also the most destructive from a sustainability point of view; the European Common Agricultural Policy saw the use of modern fertilisers and pesticides increase significantly).

If food prices rise due to a natural shift in the supply-demand imbalance, rather than due to the distortions of the State, then we wasteful Westerners will have to relearn some old habits, whether it be never leaving food on a plate and wise storage of our food. And just to finish on this thought: how much more severe would our shortages be, if, instead of being able to tap into a global supply of food, we had to rely on purely “local” produce, as the “locavores” would have us do?

On slightly tangential point, I read that a once-prominent opponent of GM foods has changed his mind and now admits that much of the opposition was not based on honest science and reasoning.

Jeremy Irons and Polly Toynbee say silly things but they know how to live

David Thompson’s latest Elsewhere posting ends very entertainingly. He quotes Matt Welch, Jonah Goldberg and Victor Davis Hanson, before himself adding this very quotable paragraph:

For some, professions of egalitarianism and socialist belly fire are a kind of rhetorical chaff – a way to elevate oneself as More Compassionate Than Thou, while deflecting envy from below. (“Please don’t hate me for being richer than you. Look, over there – they have even more, or almost as much – let’s all hiss at them!”) Vicarious philanthropy – giving away freely other people’s earnings – is a remarkably effective ruse, so much so it seems to encourage a certain disregard for dissonance, as demonstrated, for example, by the Guardian’s editor Alan Rusbridger in this comical exchange with Piers Morgan. And by the Guardian’s imperious class warrior Polly Toynbee, whose rhetoric was contrasted with her actual lifestyle and was promptly reduced to indignant spluttering on national television. Similar obliviousness is also displayed by the millionaire actor Jeremy Irons, who denounces consumerism and asks, “How many clothes do people need?” All while owning no fewer than seven houses, one of which is a peach-coloured castle. No, you’re not allowed to laugh. Because his wife is also very Green and “deeply socialist.”

Good knockabout stuff. It would seem that Piers Morgan has his uses.

But, there is always a danger with this way of arguing, where you challenge someone for not living in accordance with his or her own bad ideas. The danger being that you may forget to point out that they are bad ideas. Often, there is so much demanding that whoever it is should practice what he preaches, that it is forgotten what stupid preaching it is.

Thompson does not make this mistake, as his swipe at vicarious philanthropy illustrates, as do all the other postings on his site that criticise other bad ideas. But others do.

Polly Toynbee’s class warfare preaching would be just as wrong if she preached it while living in a cardboard box under a bridge, and it might also be worse, on account of being more persuasive. It is her preaching I object to, not her lifestyle.

Jeremy Irons owning seven houses isn’t going to cause our descendants to fry or starve to death, any more than will us masses wanting to have more frocks and suits and shirts than we could get by with. The fact that, having earned a ton of money in the movies, Irons chooses to invest in property in a big way, and then, having invested in it, chooses to live in quite a lot of it, is evidence that, despite the foolishness of his professed opinions, his actual opinions, the ones he acts on, are less foolish. This man certainly knows how to live!

If you demand consistency from people, be sure to be clear what sort of consistency you are demanding.  I want Irons to carry on living as he wants to, using the money he has earned. I just want him to stop spouting unintelligent and uncharitable nonsense about how we poorer people ought to fret about our shopping habits. Let Polly remain unequally rich, and continue to enjoy her Italian holidays. Let her merely shut up about the goodness of enforced equality.

I am not saying that Thompson’s comments are wrong. Pointing out that the Toynbee and Irons lifestyles clash with their publicly expressed opinions is well worth doing. But the idea of doing this, which must never be lost sight of in all the complaints about hypocrisy, is not to shame these grandees into living differently. It is to shame them into talking less public nonsense.

To coin money and regulate the value thereof

This all too serious joke has steadily gained traction among the self anointed cognoscenti.

Probably one reason they think “Hope®it will work is because it is “legal”.

We don’t make the loopholes. We just find them. The Treasury can’t print money on its own, because the money supply is supposed to be the strict purview of the Federal Reserve … but that might not be quite so strict after all, thanks to a coin-sized exception. Congress passed a law in 1997, later amended in 2000, that gives the Secretary of the Treasury the authority to mint platinum coins, and only platinum coins, in whatever denomination and quantity he or she wants. That could be $100, or $1,000, or … $1 trillion.

And we know that Congress has the power “to coin money and regulate the value thereof”, right? The Constitution says so, right?

→ Continue reading: To coin money and regulate the value thereof

Boris on Fracking

Over at Neal Asher’s (more on him from me later, once I have finished his novel) blog, I see this entertaining Boris Johnson quote about fracking:

The extraction process alone would generate tens of thousands of jobs in parts of the country that desperately need them. And above all, the burning of gas to generate electricity is much, much cleaner – and produces less CO2 – than burning coal. What, as they say, is not to like?

In their mad denunciations of fracking, the Greens and the eco-warriors betray the mindset of people who cannot bear a piece of unadulterated good news. Beware this new technology, they wail. Do not tamper with the corsets of Gaia! Don’t probe her loamy undergarments with so much as a finger — or else the goddess of the earth will erupt with seismic revenge. Dig out this shale gas, they warn, and our water will be poisoned and our children will be stunted and our cattle will be victims of terrible intestinal explosions.

Which is all very good except that, as Tim Worstall is forever pointing out, jobs are a cost. I can see why Boris, a politician, would see votes in talking up the thousands of jobs, but I hope he understands this. When he chooses between scheme A and scheme B, I would hope he does not pick the most expensive, more labour intensive one.

And it is unadulterated good news. The greens’ opposition to fracking may be working now, but the political will will be there the moment the first blackouts hit. So I do not imagine things will get much worse than that, and then there is enough energy for a few more technological revolutions.

Overpopulation, or not

Well done Jeff Wise at Slate. You have managed to notice what has been obvious to absolutely everybody who has been looking at demographic trends and population projections for at least the last 20 years. Specifically, growth in the world’s population is in fact slowing down, and the population will start to contract in aggregate within a small number of decades, and is already doing so in some places.

As a less scientific but still useful, rough rule of thumb on demographic matters, I would recommend taking any prediction made by Paul Erlich in the first half of the 1970s and assuming the precise opposite has happened since.

Sensible… indeed inspirational… words from a Tory MP? WTF?

I cannot understand how a sensible coherent guy like Steve Baker managed to get into Parliament as a Tory MP…

Just watch this and then lament that a clueless jackanapes like David Cameron is running the Conservative Party and not this guy.

Samizdata quote of the day

The point is that recessions are not caused by a lack of demand. They are caused by people making the wrong things (i.e. destroying wealth). We know they are because enterprises make losses and sometimes go bust. Recessions end when people start making the right things. All that money printing does is keep people making the wrong things. All that state spending does is encourage people to make even wronger things.

– Patrick Crozier comments, in a discussion sparked by his own posting about Keynes for the Cobden Centre, here.

I am finding the many jokes I hear about people going out shopping and thereby “rescuing the economy” less and less funny, and more and more stupid and tragic.  These jokers seem really to think that this is how it works.