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Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]
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I’ve just been listening to an interview, conducted by recently acquired Samizdatista Patrick Crozier. His inteviewee is John Butler, and they talk about the contents of Butler’s new book, The Golden Revolution. Access this interview at the Cobden Centre blog. It lasts just over forty five minutes, but to me it felt less.
I have not read Butler’s book, but judging by this interview, my immediate impression is that Butler’s strength as an economic commentator is his combination of an unswervingly market based understanding of economic reality with a far more detailed grasp of the recent history of the twentieth century’s big economic events and big economic policy decisions, more detailed than is usual among your typical unswerving market based understander of economic reality. Butler understands why the great policy mistakes of the twentieth century were indeed mistakes. But he also knows the detail of the circumstances that made these mistakes so attractive to the people who made them.
I won’t try to retell the story Butler tells. Suffice it to say that, like many of us here, he attaches great importance to the decision, by President Nixon, to abandon the gold convertibility of the dollar.
As for the resulting mess and what to do about it, Butler considers that a return by the world to gold as the basis of its currency arrangements is not only desirable, but possible and even likely, and he reflects on the various ways in which this change back to monetary sanity might soon be accomplished and by whom.
A strongly recommended listen, to anyone who has three quarters of an hour to spare and a desire to understand the state of the world somewhat better.
Pleasure is a brain wave right now. Happiness is a good story of your life. The Greek word for happiness is “eudaimonia,” which means literally “having a good guiding angel,” like Clarence the angel in It’s a Wonderful Life. The schoolbook summary of the Greek idea in Aristotle says that such happiness is “the exercise of vital powers along lines of excellence in a life affording them scope. But nowadays there is a new science of happiness, and some of the psychologists and almost all the economists involved want you to think that happiness is just pleasure. Further, they propose to calculate your happiness, by asking you where you fall on a three-point scale, 1-2-3: “not too happy,” “pretty happy,” “very happy.” They then want to move to technical manipulations of the numbers, showing that you, too, can be “happy,” if you will but let the psychologists and the economists show you (and the government) how.
– Deirdre N McCloskey, writing about the whole, rather dubious realm of “happiness studies”. The fact that the UK’s paternalistic prime minister, David Cameron, is a fan of this sort of thing does not fill me with confidence.
[Greek government policy is] known as ‘drinking your way back to sobriety’.
The deficit spending the Greek government wants to do is almost-entirely suppressive or neutral to GDP – it is spending by government, for government, on government. The population is shrinking, their internal revenue picture is already dreadful and only getting worse (because they have the worst ratio of producers to consumers of tax funding in the civilized world, and getting worser) and the only way any government of Greece can survive and keep the mayhem in the streets down to acceptable levels is to restore the drunken-sailor approach to public spending that got them into trouble in the first place. This means 14 monthly pension checks a year, retirement at 50 for workers in hazardous trades like hairdressing, and all the other 1,001 ways they managed to bankrupt themselves already.
– Serial commenter llamas
Who do you hope wins the election in Greece today?
As a starting point for discussion, I thought the headline of this Guardian article “A Syriza victory will mark the beginning of the end of Greece’s tragedy” might well turn out to be true if Syriza do win, albeit not in the way the left wing authors expect.
“Historically, remember, Andrew Carnegie was a Scottish immigrant; John Roebling, a German one; Nikola Tesla, a Serb who emigrated from Croatia; Albert Einstein was a German immigrant who became a U.S. citizen in 1940; the great economist, Ludwig von Mises, was an Austrian immigrant; and Ayn Rand, author of Atlas Shrugged, a Russian one. The list could be indefinitely extended. In our day, Sergey Brin, co-founder of Google, emigrated to the U.S. from the Soviet Union. Jerry Yang, co-founder of Yahoo, emigrated to America from Taiwan. Vinod Khosla, one of the founders of Sun Microsystems, is an Indian immigrant; Andreas Bechtolsheim, another of Sun’s founders, a German one. This list, too, could be greatly extended.”
– Andrew Bernstein.
I like this comment:
The economic platform most voters seem to want is lower taxes (or lower taxes on everyone except the “rich”), more jobs, more government benefits, and no deficits. Which, come to think of it, was Obama’s platform in 2008. The only problem is that it can’t be done, which makes it hard to run on that platform two times in a row.
It’s from “Larry3435”, and is attached to a piece by Jennifer Rubin entitled Obama’s economic approach a dud with voters.
It is important for libertarians like me not to confuse a bunch of people who think we probably shouldn’t have very much more government than we can pay for with people who think we definitely should have a lot less government than we can pay for, which is what we libertarians reckon, among other things.
Still, it’s a start.
A thing I keep banging on about is that a crucial stage in an argument occurs when the burden of proof gets reversed.
Crackpot Theorists devise a Crackpot Theory. It unites them. It excites them. It excuses their shared belief that The Free Market Is Not Good Enough. They demand action from each other. They capture small parts of government departments that most people don’t give a damn about. They write small laws and get them passed.
A few Critics notice, and start explaining that the Crackpot Theory is, maybe, a crackpot theory. The Crackpot Theorists say: No it isn’t! The Critics say: But you are making bad decisions! The Crackpot Theorists say: No we aren’t! As this phase of the argument gets seriously going, the Critics become ever more convinced that the Crackpot Theorists are indeed Crackpot Theorists, and because the Crackpot Theorists are behaving like the maniacal Crackpot Theorists that they are, the Critics grow in number, and in their certainty that the Crackpot Theorists are totally crackpot.
The small bits of the government departments grow into big bits, and infect other bits. The laws they introduce get bigger and more intrusive.
But sadly, nobody else cares, or not enough to stop all this. The money and inconvenience involved is still trivial, by the usual standards of government-imposed expense and inconvenience. Let the Crackpot Theorists have their fun! And besides: Maybe, just maybe, the Crackpot Theorists are onto something. Better safe than sorry! Anyway, what can you do?
As the Crackpot Theory grows in power, powerless people start to notice and to cry out: Your Crackpot Theory is just an excuse for us to be taxed more! Alas, for many people this is a feature, not a bug.
Throughout this phase of the history of the Crackpot Theory, the Critics of the Crackpot Theory are in the impossible position of having only one way of stopping the rise to prominence of the Crackpot Theory, which is to convince the Crackpot Theorists that they are wrong.
Some Crackpot Theorists are convinced. Quite a few of them creep away in ashamed silence. A tiny few even say in public that they were wrong. But others of them are now so wholly dependent for their livelihoods upon the Crackpot Theory being true that they stick with it anyway, despite now suspecting or even knowing what total crackpottery it is. What can they do?
Until, one day, the Crackpot Theorists pick a fight with a group of people powerful enough for their anger to actually matter, to the entire world.
At which point, the burden of proof, hitherto weighing down only upon the shoulders of the Critics, now descends upon the shoulders of the Crackpot Theorists themselves. Suddenly, they have to convince the world that they are right and that their Critics are wrong. They have to convince their Critics that their Critics are wrong, just to shut their Critics up from saying what the world now wants to be told, namely that the fight with those powerful and angry people is a fight that is not worth having.
But our Crackpot Theory says that we must have this fight! No matter what! The world must be saved, even if it is ruined in the process!
I’m just thinking aloud, you understand. Having seen this (linked to just now by the ever-alert Instapundit):
China will take swift counter-measures that could include impounding European aircraft if the EU punishes Chinese airlines for not complying with its scheme to curb carbon emissions, the China Air Transport Association said on Tuesday.
Wei Zhenzhong, secretary general of the China Air Transport Association, said:
“We would try to avoid any trade war.”
If that’s not a powerful and angry person threatening a trade war, I don’t know what is. If the trade war duly happens, next up: trade war. (What was that about the EU putting an end to conflict between Great Powers?)
So, Crackpot Theorists, is your Crackpot Theory true enough to be worth stuff like this? Go ahead. Convince us.
There are a some ideas that are useful when thinking about markets. People act rationally; they act in their own best interests; they follow incentives; their preferences are revealed by their actions; and so on. This leads to such things as arbitrage, which the rationalist Harry Potter has figured out.
So not only is the wizarding economy almost completely decoupled from the Muggle economy, no one here has ever heard of arbitrage. The larger Muggle economy had a fluctuating trading range of gold to silver, so every time the Muggle gold-to-silver ratio got more than 5% away from the weight of seventeen Sickles to one Galleon, either gold or silver should have drained from the wizarding economy until it became impossible to maintain the exchange rate. Bring in a ton of silver, change to Sickles (and pay 5%), change the Sickles for Galleons, take the gold to the Muggle world, exchange it for more silver than you started with, and repeat.
Today I ordered a new HTC One S for my wife. For £15.50 per month over two years we get the handset for “free”, and various voice, SMS and data services. That means that we pay £372. But by buying via a cashback site site such as Quidco we get £30 back — this is commission that would otherwise have gone to some middleman. So we are paying £342 for the handset and the service.
The cheapest I can find the handset online on its own is £350; more typically it costs £400. For equivalent voice, SMS and data services I would pay at least £8.50 per month.
Arbitrage does seem to be happening. On eBay there are people selling phones that have been removed from their original packaging to be unlocked. Someone has taken out a contract with free handset and is then selling the handset without the service for more than they paid for the handset plus the service.
There are other oddities. My wife is an Orange customer. The deal we wanted is available on both T-Mobile and Orange, in both cases only to new customers. One can not simply arrange a new deal with one’s existing supplier because then it is impossible to keep the same phone number. One can “upgrade”, but by doing this the best deals are not available. The only rational thing for a customer to do is switch network operators every two years. My wife switched to T-Mobile. If she had been a T-Mobile customer she would have switched to Orange; nothing else would be any different.
The only way that this makes sense is if most customers do not understand it. The strategy must be to lure new customers with cheap deals and then charge them ever more by confusing them into staying loyal. And it must work, because otherwise this state of affairs would not be stable. People act rationally all right, but they are often acting on limited information.
The rather obvious lesson is that it pays to have more knowledge than the next man.
Incidentally, while it is not strictly relevant because my story could be true of any network operators in the UK, both Orange and T-Mobile are owned by the same parent company, EverythingEverywhere.
“Capitalism is based on capital, and capital is generated through saving and not money-printing, contrary to what many economists and central bankers want us to believe. Prosperous societies have always been built on hard money, which encourages saving and the expansion of the capital stock, and in turn increases the productivity of human labour. Greek savers are no different from American savers or German savers, and the role of money, saving and capital is no different in Greece from that in any other country. The laws of economics change as little from one place to another as the laws of physics. And sacrificing the interests of your savers for some short-term boost to growth will have the same adverse long-run effects in Greece as it has anywhere else.”
– Detlev Schlichter
Not being wise in the ways of Twitter, I am not sure where Mr Eugenides got this piece of simple but effective graphics, only that he either acquired it or created it, one way or another, and that I found out about it because it was one of David Thompson’s clutch of ephemera last Friday:
I recall reading in one of Professor Parkinson’s books, I think in his classic Parkinson’s Law, that people only find it easy to have strong opinions about sums of money, or circumstances generally, that are within their particular and usually rather limited range of experience. So it is that a local planning committee will spend an hour arguing about a cheap loft extension, while nodding through an entire hundred million quid power station without discussion. Something along those lines. True, I suspect. Certainly true of many people.
So, the thing to do, with these otherwise unimaginably huge sums of money that politicians are slinging around nowadays, to keep all their various financial plates on sticks spinning fast enough, is what is done here, in the above graphic. Divide them all by the same (very large) number, until the original numbers become regular numbers of the sort regular people can relate to, while the numbers all nevertheless retain their relative sizes, to each other. The essential nature of what is going on is thus laid bare, for people who might otherwise be blinded by all the zeros, and all those bewildering words ending in “-illion”.
I agree with Mr Eugenides. This is clever.
And no, he didn’t invent it. It’s been around for a while.
I found Michael Barone’s piece here (thank you Instapundit) about ideological self-sorting very thought provoking.
Barone mentions a book called The Big Sort, which says that such self-sorting within the USA is bad, because it is “tearing us apart”. The book, says Barone:
… describes how Americans since the 1970s have increasingly sorted themselves out, moving to places where almost everybody shares their cultural orientation and political preference – and the others keep quiet about theirs.
Thus professionals with a choice of where to make their livings head for the San Francisco Bay Area if they’re liberal and for the Dallas-Fort Worth Metroplex (they really do call it that) if they’re conservative. Over the years the Bay Area becomes more liberal and the Metroplex more conservative.
Barone only concerns himself with how such self-sorting might be affecting the upcoming Presidential election, speculating that it causes liberals to live in an ideological cocoon and be bad at dealing with criticisms of their opinions. He instances the claim that Obamacare is unconstitutional, which liberals only took seriously when the Supreme Court suddenly did. Liberals had had months to prepare counter-arguments to that argument, or to rejig Obamacare so that it didn’t clash with the Constitution, but they saw no need to do either.
But there is plenty more to be said about ideological self-sorting. Might ideological self-sorting in due course become a major global tendency, with people choosing not just localities within countries, but actual countries, on ideological grounds? Is that already happening to any significant degree? If not, how likely is it that it might? And if it did start or has started, what might be its consequences?
The self-sorting Barone refers to is happening because moving within the USA is now quite easy. But time was when moving anywhere else was far harder, yet some people still did it, to particularly enticing destinations, from particularly abominable starting points. That people tried to hard to get out of the old USSR was one of the most damning and least answerable criticisms made against that horrible place.
The USA itself, all of it, is an exercise in ideological self-sorting, in the sense that most Americans are descended from people who bet the farm, metaphorically and often literally, on life in America being a better bet, even if they started out in America only with what they could carry. Americans are mostly descended from people who took a huge chance to make hugely better things happen for them. The great American exception to this is Americans descended from slaves, or from American natives. African slaves shipped to America placed no bets. They were chips in bets placed by others. Does that fact illuminate the seemingly still rather fraught relationship between black America and the rest of America? I think: yes.
But I am digressing into American history. What of the future of the world?
As a libertarian, I like the idea of ideological self-sorting, partly because it seems to me that there is a huge imbalance, in favour of minimal statism and against maximal statism, when it comes to how well each works out when practised only locally. Remember all those mental agonies suffered by Soviet communists when they started to realise that they were going to have to make do with “socialism in one country”, rather than everywhere? And remember how easy it then became to see which was better, Communism or not-Communism? Most of the world’s collectivists, although there are surely exceptions to this generalisation, are now collectivisms whose entire purpose is to deny “free riders” their free ride, anywhere on earth, thereby denying not only choice but exit. For collectivists, a world in which anti-collectivism flourishes, albeit only in some places, is anathema. They have to have it all, or their ideas won’t work, even in the limited sense of being inevitable and inescapable, and alternatives being hard to imagine because all suppressed. For most collectivists, it’s world government or nothing. But for libertarians, we only have to get a libertarian nation of some sort going, and to protect it from being completely shut down, and we’re in business.
We libertarians also have a big advantage in believing in being self-armed. Any libertarian national enclaves that emerge from the process of self-sorting that I envisage will, I believe, punch above their numerical weight, militarily speaking.
It is tempting to suppose that once ideological self-sorting gets seriously under way, if it does, it will then self-reinforce. As more people of one mind concentrate in particular places, those of other minds will have ever more reason to go elsewhere. This is the process that the author of The Big Sort dislikes, but which I favour for the world as a whole.
And then, when we all get to see which places work well and which work badly, you would at least hope that lessons would be learned. Sometimes that happens, as when many Eastern Europeans fled from Communism to America and then provided the political fuel for what America’s Communists and their useful idiots still describe as anti-Communist “hysteria”, in other words opposition to Communism and the belief that Communists ought not to infest the American government.
However, a big problem with ideological self-selection is that sometimes, having helped to wreck their original home, ideologically stupid people then move to other more successful places, but bringing their own stupid ideological opinions with them. Think of all the Muslims who now run away from overwhelmingly Islamic countries because of Islam’s despotic habits of government, only to bring those despotic tendencies with them to their new homes.
I’ve never been to the USA, but I occasionally read reports (and I seem to recall comments at this blog along these lines) that something similar happens there quite a lot, and is happening now, as “Blue” Staters run away from Blue States, but then vote for more Blue State stupidity in their new and formerly Red State homes. I trust I have the colour coding the right way round there. Personally I think this coding is wrong. How did the damn pinko taxers-and-spenders manage to get themselves coloured blue, and to colour their more enlightened and less parasitical enemies red?
So, to sum up, and hence to enable me to bring this rather unwieldy posting to a close, I think that, although it might not work out as well as I hope, I’m in favour of ideological self-sorting, and especially when it comes to self-sorting between different countries. But I’m sure I’ve missed out a lot of important things that could be said further on this topic, and I look forward to any such things that our commentariat might want to add to this.
“All the available Keynesian levers for achieving economic growth have been pulled, yet the recovery is one of the weakest since World War II. The problem lies with the way the “stimulus” was carried out, the uncertainty of looming higher taxes, and the antibusiness rhetoric and regulatory strong-arming of this administration.”
– Harvey Golub, Wall Street Journal.
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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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