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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In other news, it would appear that the “Conservative” party believes that the housing market in the U.K. is insufficiently distorted and in danger of reverting to market principles. To prevent that, the new budget contains provisions to assure that there will be malinvestment, bank bailouts, and direct state losses from mortgage defaults for years to come.
I confess to being impressed. It is normal for politicians to fail to learn from history, but here they’ve managed to forget even 2008. Well done, gentlemen, well done!
Chancellor extends home-buying schemes
This article from John Phelan, at The Commentator, is worth reading:
Functioning banks certainly are a key part of a modern financial system but why should the same be said of the toxic zombies who are blundering round the current financial landscape?
And how did these rotten banks get so big in the first place? It’s because governments and central banks prop them up. Bad banks rarely go out of business, they just lumber on, soaking up and destroying more wealth. Goldman Sachs and JP Morgan were bailed out five times in the 20 years before 2008.
The second lesson is that there really is no such thing as private property. In extremis the government considers itself entitled to any amount of your property it desires even if, as in the Cypriot case, it means revoking its own commitments to protect bank deposits.
But then this is the logical outcome of taxation. If you think that a shortage of government revenue can be solved by the government simply helping itself to someone else’s revenue you really can’t have a philosophical problem with this. If you believe in the 50p tax rate this is where you end up.
The last paragraph is particularly telling. It is good, in a grim sort of way, that people have been alarmed at the idea of governments grabbing savings. But what on earth do people think governments do already? Consider the central banks’ “quantitative easing” policies. Printing money benefits those who get the new money first against those who do not; savers lose out when a government “reflates” an economy. In the UK, for example, inflation – understated by government statistics – is in the low but significant single digits and over a relatively short period, will devastate savings due to the impact of compounding. The proposals from leftist politicians for a so-called “wealth tax” in the UK is merely another form of property rights confiscation, but then again, income taxes are a form of confiscation in that they confiscate the products of work. Confiscation is what governments with a monopoly on the use of physical force do. It is one of their defining characteristics.
Meanwhile, Detlev Schlichter has an interesting new item up about the Cypriot disaster. What is notable about it is that he does not adopt a lazily predictable “bash the eurozone” stance here.
In particular, Schlichter kicks against the assumption that what was proposed – taking a slice of deposits – is somehow uniquely evil:
I am a free market guy. I am in favor of laissez faire so I always like to see placards that read “Hands off”. One could see such placards at demonstrations in Cyprus yesterday: “Hands off Cyprus”. That is great. But be careful what you wish for. A proper hands-off policy means letting the chips fall where they may. That would certainly mean no bailout and thus total collapse of the Cypriot banking system and the Cypriot economy. Don’t forget that Cyprus and its banks and its depositors are still being bailed out with other people’s money here.
That is also what some of my libertarian friends don’t seem to get when they speak, as some of them did yesterday, of another incident of the ‘the state stealing from its citizens’ or of confiscating their property. As much sympathy as I usually have with these views, in this instance they are simply mistaken. If this were expropriation it would mean that the act of abstaining from this expropriation – of the expropriator simply doing nothing – would mean that the ‘victim’ keeps his property. But if the EU did nothing in this situation – “hands off”, laissez faire – it would mean that most depositors, including those under €100,000, got wiped out completely. The choice is not between keeping everything and paying a ‘levy’, but between paying a ‘levy’ and losing almost everything.
If I let them compute those statistics, they’ll want to use them for planning.
– Sir John Cowperthwaite, Financial Secretary of Hong Kong from 1961 to 1971, quoted in a recent posting at the Cobden Centre blog by Sean Corrigan entitled Masterly inactivity.
According to this blog posting, these words were spoken by Cowperthwaite to, and recalled by, Milton Friedman (who had asked about the paucity of statistics), in 1963.
For the first time in recorded history, we have nearly every central bank printing money and trying to debase their currency. This has never happened before. How it’s going to work out, I don’t know. It just depends on which one goes down the most and first, and they take turns. When one says a currency is going down, the question is against what? Because they are all trying to debase themselves. It’s a peculiar time in world history.
– Jim Rogers, the investor, adventurer and commentator, as quoted at the splendid Zero Hedge website.
(I like the site’s motto: “On a long enough timeline the survival rate for everyone drops to zero.”)
On a related theme of currency debasement and government tactics, this book, Currency Wars, looks a gruesomely entertaining read.
“The Gini coefficient in my office is close to 1.0. How I yearn for the assembly line.” — An anonymous finance professional of arid wit.
I often see postings by friends on social media sites trumpeting the fact that the “gap between rich and poor” (whatever that might mean) is terrible in the United States and we must do something about it.
When confronted with such statements, I usually note that the Gini coefficient (which seems to be what they are referring to) is far lower in India, and yet most poor people in the United States would strongly resist trading places with someone in India at the same decile of income, while strangely most poor people in India probably would trade places with their counterpart in the United States.
The reply I generally get in return is either silence, or sometimes a pointer to some sort of document or video purporting to explain how damaging to society a big “gap between rich and poor” is. (Such materials are generally rather unconvincing, at least to me.)
I continue to hold that it is better to be eating well but to know that others are doing even better than you than it is to know that even though you are starving most other people are too. The former will keep you fed, while the latter should reasonably appeal only to those so encumbered by jealousy that they prefer universal misery to the success of others.
I suppose, however, that it is a question of personal values. To me, envy is not a rational basis for public policy, but others appear to feel it is the only one that counts.
Living cultures change. It is the very process of change that makes them themselves. Their sameness is not merely a matter of their difference from other cultures, but of their differences from themselves over time, just as a person who grows from childhood to adulthood remains the same person only by changing. What too many observers from wealthy societies seem to identify as the essential cultural element of poorer societies is their poverty. I have observed the disappointment of visitors from wealthy cultures when colorful poor people dressed in brilliant clothes stop, pat themselves down, and take out cell phones in response to insistent ringing sounds. It’s not authentic! It ruins the whole trip! Those people are being robbed of their culture! They’re victims of global capitalism! The arrogance of those who want to keep the poor in their native environments, lizards in a terrarium, is startling.
Although seeing a Dalit (“untouchable”) or a Mayan highlander talking on a cell phone may ruin the visit of a wealthy poverty tourist, being able to use telephony to talk to their friends, family members, or business associates is often highly valued by the people who bought the cell phones and should not be seen as a threat to their identity. Globalization is making possible a culture of wealth and freedom for Dalits and Mayans, who can enjoy wealth and freedom without ceasing to be the people they are. Just as culture should not be identified with isolation or stasis, it should not be identified with poverty.
Tom G Palmer, Realizing Freedom, page 371.
The essay from which these paragraphs are taken reminded me of the recent talk that Samizdata commenter Michael Jennings gave at the apartment of Brian Micklethwait. Meanwhile, some time ago I wrote about an excellent book by the economist, Tyler Cowen, who also challenges the clichéd views about globalisation and the presumed “flattening” and homogenising effect it is supposed to have on cultures. In fact, as Cowen and Palmer notes, what globalisation and the spread of things such as IT does is often enable more, not less, diversity in certain respects.
I should add that Palmer’s book is excellent reading, blending a mix of theory (he subjects the likes of John Rawls and GA Cohen to a brutal dissection) and essays on specific issues such as repression in Egypt, the problems in Iraq, and the curious contortions of “left libertarians”. Tom is a great person who travels far and wide in the job of spreading classical liberalism and free market ideas. I don’t know how he handles the jet-lag.
Several months ago I instructed the internet to tell me about anything concerning 3D printing, but I usually now file the resulting emails under: to be looked at later if at all. People saying they have worked out how to make ever more intricate and ever more tasteless and 70s-ish napkin rings no longer excite me that much. Okay, I get it. The technique works. But come on. A napkin ring? That takes four hours to get made? (That’s how long the damn video goes on for! Although I now learn from another video at the same site that the process may have got stuck after an hour. So, how long does it actually take to 3D print this napkin ring? Don’t tell me. I really do not care.)
I earlier here pondered, and quickly discarded, the idea that 3D printing would be arriving in our homes some time quite soon. What 3D printing really is is better stuff-making, by the people who already make stuff.
So it was that this link – which does not concern brightly coloured napkin rings, but on the contrary is to a story (here is the original Wired version) about an enterprise that has used 3D printing to make the body of a car – really did get my attention. This car body is just as strong as a regular steel car body but much lighter, and hence much more fuel efficient. Oh sure, it’ll still be years before most cars are made this way, but this surely is the future starting to reveal itself, to those of us beyond the circle of specialists who are already paying close attention to such developments. As was noted in one of the comments on my earlier 3D printing here (that’s the link again), car makers (Mercedes was singled out for our attention) already use 3D printing, to make small but important car parts. So it won’t be a huge leap for them to use 3D printing to make rather bigger car parts, until hey presto, they’re 3D printing entire cars!
The comments on that earlier posting were very informative. But nobody, except me in the original posting, discussed the possibility that 3D printing could shift the balance of manufacturing power somewhat back from the getting-rich world to the already-rich world. This is an idea you now hear quite a lot. Thinking about that idea some more, I think that 3D printing may be less of a macro-economic game changer that at first it looked, to me, like being. The idea, in other words, resembles the idea of a 3D printer in every home. After all, here is yet another manufacturing method, devised and developed in the richest and cleverest places, but then, surely, easily unleashable in any place, and in particular in places that are merely getting richer and getting cleverer. Does that change the game? It sounds like the game as usual to me. Which could be why nobody else thought the idea worth commenting on. But maybe I am getting that wrong.
Michael Jennings’ talk about globalisation at my home last Friday was both fascinating and entertaining.
It’s tempting for a blogger to assume that because he has said all his stuff several times over, in about a hundred blog postings, that everyone who cares about it now gets it. But a talk that pulls a lot of it together actually tells even his most regular readers a great deal that they probably didn’t previously get. So it was last Friday.
The basic point was that “globalisation”, far from being a great big steam-roller that flattens every individual local culture into ubiquitous uniformity, is actually a complex process, in which the supposed steam-roller is confronted by local forces that are often at least as powerful as the steam-roller and which oblige the steam-roller to behave very differently in each different spot. The result is not a simpler and duller world, but a far more complex and interesting and abundant one. In any given place, globalisation means that there will be far more to choose from, and each place, by shaping how globalisation happens locally, retains its individuality. It even becomes more individual and unusual, because of the extra layer of complexity and interestingness brought to it by foreign influences, locally modified.
The particular example of globalised uniformity that people who have only visited a tiny few of the most famous Western cities regularly cite is fast food chains. But taste in food, whatever the food’s velocity, varies a lot from place to place, and if Mcdonald’s ever had a plan to impose total dietary uniformity upon the world, any such plan has long been abandoned. The simple McDonald’s hamburger mutates into any number of local variations for any number of local reasons, not the least of which is that in quite a few places ham is forbidden, never mind not liked. What and how people eat varied hugely from country to country in the past, and it still does.
Michael’s style was of the anecdotal, feel-free-to-interrupt sort, so different listeners will remember different little illustrative stories among the many he told. My two favourites both concerned exceptions to the general point that Michael was making, exceptions which, with their oddity and rarity, prove the rule, as the rather odd saying goes. Because, both concerned global forces so overwhelming and irresistible in the force that they bring to bear on particular places that the quirks of that particular place really are powerless to resist.
→ Continue reading: Michael Jennings on how actual globalisation really works (and two exceptions to the rule)
The belief that a sound monetary system can once again be attained without making substantial changes in economic policy is a serious error. What is needed first and foremost is to renounce all inflationist fallacies. This renunciation cannot last, however, if it is not firmly grounded on a full and complete divorce of ideology from all imperialist, militarist, protectionist, statist, and socialist ideas.
– Ludwig von Mises in Stabilization of the Monetary Unit— From the Viewpoint of Theory, Introduction, VIII: The Ideological Meaning of Reform, final paragraph. Quoted by Thorsten Polleit, at the end of his article Fiat Money and Collective Corruption.
I am about to attend a Mises Circle discussion of Polleit’s article this evening, at the IEA.
From today’s Financial Times:
BNP Paribas made a loud contribution to the debate on how comfortable fund managers, and financial institutions generally, should be about speculating on food prices last week.
On the back of criticism from Oxfam, the international aid agency, which accused the French house of “speculating on hunger”, BNP suspended subscriptions on two of its funds.
BNP’s Parvest World Agriculture fund, which manages €159m of assets, has been shut to new investors as a “precautionary” measure, while its EasyETF Ultra Light Energy fund has also been closed.
BNP Paribas has funds in which its clients invest; those funds hold investments in agricultural-related businesses and properties of one kind or another, such as companies that make farm machinery, etc. If commodity prices for things such as wheat and soy are rising and that encourages the share prices of various industries to rise, and this encourages more investment in those industries so that the production of said commodities rises, this is not a bug of capitalism, but a feature. And if those speculators, who bet that prices will rise, and they do, and therefore make money, their price-creation role – conveying information that triggers responses – is to be applauded, not condemned.
Oxfam, and other organisations that throw rocks at the financial intermediary role of speculators and the like, is merely playing to a long-established trope. It is demonstrating economic illiteracy on an epic scale. I can, of course, understand why a large bank that makes a big point of its image not wishing to offend organisations such as Oxfam. But bear in mind that what Oxfam objects to is the very process of the free market in action. When a bank caves into such pressure, then that surely is a sign that anyone serious about making money from the agricultural sector would be better advised to do so elsewhere.
In the meantime, if anyone can explain to me how a hungry person in a country benefits from such actions, do let me know.
Update: I suppose it is possible to argue that central bank inflation of the money supply via quantitative easing is encouraging investors to put this money into commodities and other “hard assets” in ways that have unforseen and negative effects, but I haven’t seen that point made by Oxfam.
Following the highly successful (nobody has said otherwise to me) relaunch of Brian’s Fridays with a talk by Sam Bowman on January 25th, the last Friday of February is now approaching fast, in fact it is about as early in the month as a last Friday is capable of being, namely February 22nd. Tomorrow week, in other words. And my speaker will be my good friend and fellow Samizdatista, Michael Jennings, talking about How globalisation has made the world less rather than more homogenised. (And yes, isn’t it great that we now have author archives here?)
It will not amaze Samizdata readers to learn that Michael’s talk will be making maximum use of his impressive understanding of business and of technology, together with the fact that for as long as any of his London friends have known him he has been roaming the globe, looking at the impact of such things at first hand. Follow the above link if you doubt this, and look in particular at postings like this one, from last Christmas Eve. Many speak these days about globalisation. Michael really does know a great deal about what this process now consists of.
As I have earlier said here, one of my purposes in relaunching these evenings is to stir up more blogging than might otherwise have happened, by me and by others, both before and in response to these events. And that is now starting to happen. So far such blogging has mostly been me, but now Michael has joined in, with a couple of postings at my personal blog which are his in all but name, here and here, mentioning some of the themes he is now busy wrestling down into a forty minute talk.
The second of these two postings includes four photos, taken in Georgia, Cyprus, Tianjin (which is the fourth largest city in China), and Mumbai. He will be showing us further photos on the night. It also contains this line (under the Tianjin picture):
One could write an entire book about fake Apple Stores.
I wanted to make that today’s SQOTD, but the spot had already been taken.
What such bloggage means is that these meetings will have an impact way beyond the mere people who happen to show up on the night, in a way that was very hard to contrive with meetings of this sort in the days before the internet. As so often, when it comes to newly devised ways of communicating, the new ways don’t render the old ways obsolete. On the contrary, they make the old ways both easier to organise and more significant in their impact. Even if you don’t ever come within a thousand miles of my home, you may still benefit, albeit indirectly, from these meetings taking place.
As to the obvious way of multiplying the impact of these talks, by video-ing them, at present I am not doing this. Opinion, what I know of it, is divided on the wisdom of this decision, but my feeling is (a) that video works better when it is shorter and more visually punchy than just a person talking for half an hour or more, and (b) that there is value in at least some speaker meetings not being videoed. (If no other libertarians were videoing meetings, I probably would.) Speakers, especially the sort of younger and less experienced speakers whom I intend quite often to invite, may feel freer, in such unimortalised circumstances, to explore subjects outside their comfort zones and off the beaten tracks of the usual libertarian topics and arguments. Unvideoed meetings are a chance for people to think aloud, and perhaps attempt a talk which they will later perfect and want to have videoed, when it is good and ready.
If you would like to attend Michael’s globralisation talk, or would like information about future Brian’s Fridays, please email me (by clicking where it says “Contact”, top left, there), or leave a comment here (or there).
I am not much impressed with Roger Bootle’s drearily conventional arguments for what the UK economy needs.
“I have banged on before about decisions on key projects which have large public sector involvement but which may also hold the key to major private sector spending, e.g. over London’s airport capacity.”
Preposterous Keynesian fallacy at work. It presupposes that money allocated to some project via the political process is more likely to create a ‘multiplier’ than market driven uses of that money… and it assumes that the money taken by the state by force would not have been invested in something more worthwhile in aggregate if the decisions were left to its original owners before it was confiscated by the state.
But of course as it is easier to see something like an airport rather than the myriad of other uses the money would have gone to had it not been forced into that project, so somehow the big flashy ‘infrastructure’ protect is claimed to have driven knock-on investment and is therefore an obvious Good Thing. As Bastiat put it “That which is seen versus that which is not seen”.
Ain’t necessarily so and given the record of government decision making versus the more diffused decision making of markets, usually ain’t so.
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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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