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A message from the people of Iceland to the global political establishment…
By rejecting the absurd notion that governments can legitimately make taxpayers liable for bad commercial decisions by banks, Iceland shows itself as an island of sanity in a global sea of madness. April 10th, 2011 | 30 comments - (Comments are closed)
 Rob Fisher has a couple of postings up about coffee, which I enjoyed reading. I am strictly a Gold Blend man myself, and am as interested in the structural qualities of coffee jars as I am in their contents, but even I notice how the price of Gold Blend can fluctuate quite wildly, which is what the second of Rob’s coffee postings is about. In the first and more substantial of Rob’s coffee postings, the whole matter of Fair Trade coffee is gone into. Like many free marketeers, I assume this to be a fairly (actually not that fairly) foolish enterprise, better at separating money from dimwitted Westerners than at helping poor coffee growers in faraway countries. But what are the facts? Read Rob to learn more, and also read Has Bean, the quality coffee blog which Rob links to and discusses some of the content of. Unlike me, Rob does care a lot about the quality of his coffee, having just purchased a coffee grinder. Apparently, the smaller the time gap between grinding and drinking, the better the coffee tastes. Unless you prefer Gold Blend. April 7th, 2011 | 8 comments - (Comments are closed)
Debate about George Soros has got bogged down. Did he willingly help the Nazis deport Jews to their deaths, and plunder their property? Did he, even decades later, describe this as the most happy year of his life, fleeing only when he feared that the Nazis would discover that he himself was a Jew? Or did he have no choice, acting in the way he did simply out of a desire to save his own life? How much did the parents of George Soros despise religious Jews? Did his father really support world government, and pass on this belief system to his son? Or was he just a man who enjoyed made up languages? Did his mother, in spite of being a Jew herself, really hate Jews? Or was it just a mild distaste? Does George Soros today fund groups, including groups in the Middle East, that want to wipe Israel from the map, out of hatred for Jews? Or, perhaps, out of hatred for any nation or individual that wishes to be fundamentally different – not part of a standardized world order? Or is Mr Soros simply ignorant of the true nature of the groups he funds? Does George Soros fund – directly and via the Tides Foundation – groups in the United States that employ Marxists because he shares their desire to impose totalitarianism upon the world (making a mockery of his supposed anti totalitarian stand in Eastern Europe in past years)? Or because (again) he simply does not know the true nature of the groups he funds? My own opinion is that the above is simply unknowable. One can not get into the mind of George Soros to know whether he really knows that he funds anti-Israel groups, and far left groups. And one can not prove one way or the other whether he knows that many of the Marxists he funds, via the Soros money that goes to the groups they work for, are in “the enemy of my enemy is my friend” alliance with Islamist groups. Mr Soros may simply be an old man totally unaware of, for example, the irony of his “Open Society Foundation” in the United States being controlled by a far left ex high officer of the SDS – someone who would be no friend of Karl Popper. For Soros to fund enemies of the Open Society in the name of the Open Society may simply be the result of a man whose brain is decaying with age – and who is getting a lot of bad counsel from evil advisers. However, the written and spoken opinions of George Soros can be known. Mr Soros may not be a good writer (I am not good writer either), but at least his works are fairly clear on his central claim. Pick one book at random, and the central political point is the same in each of the works that deal with policy. And his works have been stating the same central point – the same central lie – since at least the 1990s, so it cannot be a case of senility. If you wish me to pick out a single work, I suggest you look at the Open Society: The Crises of Global Capitalism. Remember that the first edition was published in the 1990s – long before any supposed senility can possibly have been a factor. So what is the central lie told by George Soros? It is his claim that “Market Fundamentalism” dominated the Western world in the 1990s, and in the 2000s. A fanatical laissez faire gripped the West, with government reduced to unimportance. This is simply not true. → Continue reading: George Soros’ Big Lie – “Market Fundamentalism” April 5th, 2011 | 28 comments - (Comments are closed)
The Antitrust Religion, Edwin S. Rockefeller, page 103. Well, as we can see in the case of Google, the antitrust movement still has legs today. April 5th, 2011 | 14 comments - (Comments are closed)
I am a bit late to this debunking of a book called The Spirit Level, which I had seen on sale in paperback at a local bookshop. Via Kristian Niemietz – who writes at the IEA blog – I came across the essay attacking TSL’s contention that egalitarian societies – where wealth gaps are small – “almost always” outperform societies in which governments do not seek to equalise incomes. I must admit that I nearly bought The Spirit Level to see if it did say anything of value, but it turns out to be yet another call for controls on our terrible materialism and consumerism, perhaps in the same vein as works such as “Affluenza”. Ugh. March 31st, 2011 | 20 comments - (Comments are closed)
I have noticed from some libertarians, such as “left libertarians” such as Roderick Long, a hostility to the idea of limited liability corporations. I understand and even sympathise with such opposition to statutory limited liability. It can and does foster corporate structures that become so unwieldy that they are indistinguishable from the State in key respects. But the key word to remember here is statutory. Consensual Limited Liability of a sort that can be arranged without an explicit statutory power is, in my view, no different from say, other consensual commercial transactions that are recognised in law, such as via Common Law. Of course, limited liability firms may be far less common under such a system but it is unwise to bet on it disappearing. And given all the benefits of limited liability: the ability to get large pools of investors to finance large ventures, it seems an issue worth examining in detail. The reason some free marketeers, particularly of the more radical sort, get angry about limited liability is that they see ownership and control torn asunder, creating a serious misalignment of interests. Case in point being an argument made by Kevin Dowd and Martin Hutchinson, in their book that analyses the recent credit crunch, Alchemists of Loss. They take the view that listed banks, protected by limited liability, have, unlike old partnership-owned banks with unlimited liability, made dangerous bets. A problem that is, of course, made much worse by corporate welfare via bailouts, central bank funny money, the usual. In the same way, you could argue that limited liability companies in general exhibit negative behaviours when politics intrudes. But one of the High Priests of libertarian capitalism, Murray Rothbard no less, made it clear that there is nothing in principle wrong with the idea of limited liability. His argument strikes me as pretty solid:
March 30th, 2011 | 39 comments - (Comments are closed)
I left this comment over at this particularly bad article at American Conservative, a sort of ultra-paleocon publication, as it was flagged up in the Arts & Letters Daily aggregator site. The AC article made various, and in my view foolishly wronghead, comments about Adam Smith, while neglecting to mention other aspects of his ideas, or mistakes, such as his mistaken attachment to a form of the labour theory of value (admittedly a mistake made by other classical economists and not really sorted out until the marginalist revolution of the late 19th Century). I note that Philip Salter, of the Adam Smith Institute, left a comment. Here is mine, which I thought I would republish here.
March 25th, 2011 | 14 comments - (Comments are closed)
I occasionally get sent material about the economy, and fresh data on today’s ugly UK inflation figures must surely set the alarm bills ringing in the City and Bank of England. UK consumer price inflation – which unlike retail price inflation, does not factor in mortgage interest payments – comes out at 4.4 per cent in February, the highest in 28 months, according to the Daily Telegraph. RPI rose to 5.5 per cent, the highest level since the early 1990s, back in the period when the hapless government of then Prime Minister John Major was in power and trying to fix the system by tying sterling to the-then Deutschemark. How well that worked. It is going to be harder and harder to ignore the inflation problem. If you compound the effect even over, say, five years, an inflation rate of about 5 per cent will massacre savings, while of course being just marvellous news for borrowers. And I have this sickening feeling that while some policymakers may fret publicly about inflation, some of them are quietly happy to have this huge wealth transfer via inflation persist. The capital structure of the West’s financial system will be further distorted. Here are the figures as shown by the Office for National Statistics. They don’t make for fun reading. One of the few MSM journalists in the UK has been onto this subject early and frequently is Fraser Nelson at the Spectator. Here’s his latest. (The comment thread shows how depressingly silly some people are about inflation). March 22nd, 2011 | 21 comments - (Comments are closed)
March 10th, 2011 | 81 comments - (Comments are closed)
Instapundit linked yesterday to a fascinating little Slashdot titbit about the price of digital books. Apparently, a crime writer called John Locke has lowered the price of his latest book from around what a book book costs to make and distribute, to a price much nearer to what an eBook costs to write and distribute, that is to say, he has dropped his price by about ninety percent. And he has been doing far better with this new arrangement than he did with the old one.
I certainly pause. For as long as eBooks cost the same as books, then I will prefer books, because I am used to books and eBooks are like … well, I don’t know what they’re like exactly, and at ten quid a go or whatever, I can’t be bothered to find out. But when eBooks start costing a tenth of what books cost, that is to say, less even than remaindered or second-hand books, then I’ll probably do a rethink. Since writing the above, I have discovered that quite a few commenters on the Slashdot piece are of the exact same mind as me about eBooks. It all reminds me earily of the early price of DVDs, which I recall as one of the oddest episodes in recent techno-biz history. For a fleeting little moment, DVDs were priced according to a “logic” that said that, since DVDs enable you to watch a movie lots of times over, that means that the proper price for a DVD is several times the price of a cinema ticket. Seriously, they thought they could get away with charging about forty quid for the things. Which, by the way, explains the ridiculously elaborate cases that individual DVDs still typically get sold in. When DVDs started out, they thought they were selling something almost unimaginable in its luxuriousness. They thought they were selling an even better version of those enormous metallic discs that they used to sell at about a hundred quid a pop to millionaires of the sort who really did have real home cinemas. Which they sort of were. But that didn’t mean that the rest of us were willing to pay millionaire money to get our hands on a decent DVD collection. We could already guess what DVDs cost to make (not a lot) and until we saw that fact reflected in the prices we were being asked to pay, we sat on our hands. And that is what has surely been going on during the last year or two with eBooks. They haven’t charged for eBooks like they were hardbacks, but they have looked at what they consider to be the added convenience when deciding about price, rather than looking at the cost to them of making and distributing the product and the consequent opportunity to reach a whole new raft of customers with a dramatically reduced price. A few pioneers willing to pay off the development costs of the new gizmos have paid for these early eBooks. But now, eBooks will surely plummet in price, just as DVDs did. Occasionally people tell me that I should write a book. I’m pretty sure that will never happen, but the eBook phenomenon, which I sense is about to get truly phenomenal (both in how books are read and in how they are created), may change my mind about that. March 10th, 2011 | 17 comments - (Comments are closed)
When I wish to buy cheap low end computer accessories (cables, card readers, laptop batteries, etc), I find that it is much cheaper to buy them on eBay from foreign sellers, rather than from anyone in the UK. I have been doing this for five years or more, and it is interesting to see where the items then come from. Five years ago, they were almost always from Hong Kong, with return addresses in places like Yuen Long. (“The unfashionable end of the western spiral arm of the New Territories”). The markets where the sellers get them from are actually over the border in Shenzhen in China proper, so I suspect that these sellers make regular trips to the markets over the border, bring stuff back, and then post it to buyers in the West. I still get items from Hong Kong, but in recent times it has become more common for then to come from Shenzhen. I am not sure if this is due to another set of eBay sellers having come into being on the other side of the border, or if the same ones are simply posting from a post office on the other side of the border because this is cheaper. (How international postal services relate to one another, and whether and how much money is paid from the sender to the recipient national post office is a complete mystery to me, alas. I suspect it is as baroque as the equivalent system of international telephone call settlements (which I did understand) was before it collapsed under its own insanity. There are undoubtedly some hidden and probably unintentional subsidies somewhere here). My hunch is, “a little of both”. Some Hong Kong sellers posting in Shenzhen – some Shenzhen sellers. In recent times, the items have occasionally been posted from Dongguan, part of essentially the same economic and manufacturing cluster as Shenzhen (although not a Special Economic Zone, but politically speaking just an ordinary prefecture level city in Guangdong province). However, far enough away from Hong Kong that Hong Kong people are not going to go there to buy and send stuff. Therefore, these sellers are definitely mainland Chinese. And today, I received an item from Zhangpu in Fujian province, a good way north up the coast. This is one of the more prosperous regions of coastal China (south of the Special Economic Zone in Xiamen), but Hokkien rather than Cantonese speaking and far from recent European influence and probably a centre more for trade and investment from also Hokkien speaking Taiwan. It is interesting to see this sort of activity moving up the coast, but there is no sign of it moving inland. Of course, it is always going to be close to the factories. However, write a little English, and the fact that you can sell stuff to people throughout at least the English speaking world has clearly been learned. As an observation, I have found such Chinese sellers to be reliable and honest in their dealings with me. They send you exactly what they say, the products all work properly, and if there is any kind of problem (such as a missing item due to postal problems) they are eager to resolve it. An excellent eBay reputation is very important to such people. This works so well that I don’t actually bother looking at eBay feedback from Chinese sellers before buying: I simply assume that the system has weeded unreliable and dishonest sellers out automatically. On the other hand, this particular purchase was a card reader, for which I paid a total of £1.67. including postage. eBay fees might amount to about 20p. The postage label says that postage cost ¥9.60, which is at present equal to about 90p. This leaves about 57p to pay for the card reader. Allowing the seller a modest 17p profit, we are left with a card reader coming out of the factory no more than 40p (and possibly a good deal less, depending on how many middle men there are), which is a miniscule sum of money. My preferred conclusion from this is that economies of scale are wonderful, capitalism is grand, and modern technology is awesome, in that technological products all become so cheap so fast that almost nobody has to be excluded from owning them. And this is true, of course, although I worry about something else. When capital is too cheap due to excessively easy credit, all kinds of capital intensive businesses appear to be profitable, when in reality they are receiving a subsidy from the banking system. (Another, non-Chinese example: a large portion of Europe-Asia air travel has in recent years been taken over by airlines based in the Middle East Gulf states. The cost of capital of these airlines is artificially low, as they are implicitly backed by the oil wealth of Abu Dhabi. Whether they would be profitable with out this, it’s hard to tell). China’s banking system is incredibly opaque. The bits that we can see aren’t especially pleasant to look at. And of course, opaque = bad, pretty much by definition. When everything unwinds, the consequences will be unpleasant, featuring scenarios that will appear oddly familiar to us. Government bailouts of banks, savers being robbed of the value of their savings, and inflation, perhaps. And perhaps this is already happening. £1.67 is actually a bit on the high side, compared to prices I was paying for similar items a few months back. March 2nd, 2011 | 17 comments - (Comments are closed)
Here is a good piece by Rob Fisher about the latest episode of Channel 4 TV’s 10 O’clock Live. Particularly good bit:
I agree with Rob. My preferred attitude to spreading ideas has always been to unbundle them, to try to spread them, at any rate in hostile circumstances, one at a time or at least only a very few at a time. Bundling among friends is also, if you think about it, often saying just the one thing or just the few things, that the bundling of this with that and maybe also with that makes sense – this, that and that having already been long agreed about separately. I haven’t watched 10 O’clock Live beyond episode one, but applaud Rob for doing so. We need our people everywhere, and watching (between us) everything. February 21st, 2011 | 13 comments - (Comments are closed)
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