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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There is an interesting debate going on at the Econlog blog about whether there is anything like a “meritocracy” in the market. (My short answer: it is a mixture of luck and merit, but I am not sure about the ratio between the two). Rather than me weigh in, I just wanted to point to what I consider to be Bryan Caplan’s insightful comments. I also liked the comments in the associated thread by a character with the name tag of “MernaMoose”.
It may not always be the case that the hardest working folk make the biggest bucks, but it generally operates that if people think it does, then the system as a whole generates a bigger pie in which many of those who have worked hard to maximise their talents do well. After all, fatalism (“why should I bother since it is all down to chance?”) tends to correlate, from what I can see, with a less prosperous society in general. Unfortunately, there will always be the hard cases where the supposedly worthless celebrity earns gazillions while the hard-grafting nurse gets paid a lot less. (Although in my experience, some of these celebs have worked incredibly hard to get where they are). But in a society based on voluntary exchange and where no central authority gets the potentially horrendous power to decide who has made the most use of their talents (assuming such talents can be known in advance), that situation is inevitable. Being philosophical about such things, such as watching a trust-fund brat sailing through life while someone else has to slog away for a relatively small income, is hard, I know.
I have started reading the book, Crashproof 2.0 by Peter Schiff, and I thought I would register some early impressions.
He is a guy who was once mocked for daring to suggest, only a few years ago, that the buildup of debt in the US and parts of the West, and its reliance on what amounts to “vendor financing” from Asia, was bound to end in tears. It did. “Vendor financing”, by the way, relates to the practice of a firm that offers temporary loans to the consumers of its own products. This, more or less, says Mr Schiff, is what happened in the past decade or so: Western consumers bought cheap products from China; Western manufacturers went bust or offshored production to Asia; China used the foreign earnings from its exports to buy up Western debt, enabling even more Western consumer spending, fuelling even more Chinese exports……until the whole process when up in smoke. (This process was aided by an artificially weak Chinese exchange rate, not to mention the recklessly loose monetary policy of the Fed.) So far, so good: Schiff makes a lot of sense in debunking all of this.
But then there is a rather rum argument. Schiff says that somehow, this process was bad because as a result of the low-cost production from China and other parts of the world, US manufacturing jobs were replaced by allegedly lower-paying, crappier service sector jobs. (It is simply assumed that non-manufacturing jobs are worse than manufacturing ones). This sounds a bit like the sort of attack on globalisation I have heard made by such economic illiterates such as Lou Dobbs of CNN. I was a bit surprised that an Austrian-leaning writer such as Schiff should be making it. If the service sector can generate wealth for those who work in it, what is the problem? If, in a proper free market without the distortions of fiat money etc, certain manufacturing jobs were to be done by low-cost nations and other jobs by us, how is this a cause for Apocalyptic treatises?
Another query I have is this: if the Chinese/whoever are earning real income by selling us stuff, and then use that real income to lend us money that is used to fund investment in things that will create wealth in the future, again, how is this a problem? Sure, if that Chinese money is simply fuelling consumer spending and encouraging feckless spending and low savings – which is what did actually happen, I can see the issue. But lending money for productive purposes is hardly an evil. In the 19th Century, for example, the UK, with its wealth generated in the Industrial Revolution, was a net investor into countries such as the US, Canada and Argentina. I guess the trick is to make sure that the money lent for productive purposes is money derived from genuine savings, not funny money.
Maybe Mr Schiff will answer these points later in the book.
Football: is the bubble about to fade and die?, asks Jim Thomas. No Jim Thomas, it is not. It may be about to burst. But bubbles don’t fade. Further figures of speech surge forward. “Damp squib”, “Macbeth levels of scheming”, “weathering the storm”, “walking towards the precipice”, “belt tightening”. Mix and mismatch at will.
Aside from this linguistic oddity, this short piece is quite interesting, listing some of the financial grief now afflicting various English soccer clubs. Thomas singles out Arsenal and Aston Villa for praise. Apparently, they have not been spending loads of money recently, hence their ability to weather the storm, avoid the precipice, etc.
Are you bored with Climategate? And bored with me writing about it, again and again? Yesterday, fellow Samizdatista Michael Jennings told me he is. I understand the feeling, and would be interested to hear if any of our commentariat shares it, but as for me, I can’t leave this thing alone. I mean, this is now the biggest single battle between the forces of light and the forces of darkness, and the forces of darkness are now in definite, headlong, ignominious retreat. I for one do not feel inclined to stop shouting about that any time soon.
However, I do agree that things are now moving on, and that is what this posting is about.
I will start by saying that AGW, as an acronym, is incomplete. We should really have been talking, throughout the Climategate campaign, not about “AGW” only, but about ICAGW. As in: Immediate and Catastrophic Anthropogenic Global Warming. And a good way to describe the current state of the debate is that we are now witnessing the removal of the I from that acronym. → Continue reading: Climategate and the retreat from Immediate
Tory MP Douglas Carswell, who is one of the relatively few good guys in that party, in my view, has this blog post about a recent proposal on how to make the banking system more robust, as made by the “Austrian”-leaning organisation, the Cobden Centre. I am not entirely sure about the use of the word “democratise” here in relation to banking; however, I guess this is how Mr Carswell is trying to popularise the basic idea of making banking more solid.
Truth be told, if your average citizen really reflected on what a controlled fiction fractional reserve banking really is, his or her hair would turn white in seconds.
Thanks to my old Libertarian Alliance mate, Tim Evans, for the pointer.
Toyota is recalling thousands of motor vehicles around the world to deal with certain problems, such as possible brake failures. The story was the lead item on the BBC TV news today, not surprisingly, given the large number of people who now drive Toyota cars. On one level, this issue is being billed as a terrible embarrassment for the Japanese company, but to an extent I find the comprehensive recall of the cars to be a pretty good example, in fact, of how private businesses with a huge brand-name investment have to act when their products have a problem. Can you imagine, say, a government department doing such a massive “recall” of a failed policy? With private business, the penalties for failure are bankruptcy. For government, the consequence of a mess is often more of the same, only with more lumps of taxpayers’ money. To put it more technically, there is little in the way of a negative feedback loop when governments are involved.
As an aside, and yes, I know this may seem a bit mean-spirited, but I cannot help reflect that the problems of the Prius cars add to what has been a terrible time for the Green/AGW alarmists. The Prius is very much the car that guilt-ridden, Greenie types like to drive. As the snows continue to fall, who wants to drive one of those machines right now? And in any event, they are just pig-ugly. Time to fire up the Aston Martin, Carruthers.
Every now and again I have one of those “It’s amazing what you can buy nowadays” moments, when I am confronted with some aspect of the modern world that is working really well. As parts of it most definitely are, even as other aspects of human civilisation remain shambolic or worse. So it was yesterday, when I saw and snapped this, through a rather grubby and blurry shop window, just across from the ticket barriers at Piccadilly tube station:
 I know. 32 gigabyte SD cards have been around for months, and for many were no big deal in the first place. I actually seem to recall seeing a 64gb SD card yesterday also, somewhere in Tottenham Court Road, but for some reason this didn’t amaze me so much, probably because the price was so huge that I wasn’t so gobsmacked by it. It was the fact that the above 32gb SD card wasn’t just in existence, somewhere foreign and only reachable via the internet, but in existence right there in a pokey little shop window like this one that hit home to me. This was a 32gb SD card, and it was no big deal. That was why, for me, it is such a big deal. For me, all this is amazing. I can remember having a hard disc in my PC that was only 30 megabytes. → Continue reading: A 32gb SD card!
Tom G. Palmer, a writer I greatly admire, nicely calls out some rather boorish behaviour by the leftist writer, Jonathan Chait. I am a bit surprised: I always figured that Chait was one of the more reasonable leftists, so it seems a bit disappointing that he is a sneering jackass.
Mr Chait’s powers of reasoning are in any event, somewhat over-rated. I fisked something by him in relation to the Great Depression some time ago.
Given that we think, as most of us seem to do, that the production of such goods as cars, vacuum cleaners, and frozen vegetables should take place in a regime of market competition, why do so many among us nevertheless agree that it makes sense to exclude the production of money from these same forces? Why must the production of money be entrusted to a monopoly called the central bank?
– My thanks to Jerzy Strzelecki for drawing my attention to this mises.org piece by him, written when the recent banking tumult was at its most tumultuous, entitled The School of Salamanca Saw This Coming. Quite brief and well worth a read. You don’t have to believe in God to understand phrases like “usurpations of God’s knowledge”.
“When one studies the history of money one cannot help wondering why people should have put up for so long with governments exercising an exclusive power over 2,000 years that was regularly used to exploit and defraud them.”
F.A. Hayek, Denationalisation of Money: The Argument Refined. Page 33. Published by the Institute of Economic Affairs and Ludwig Von Mises Institute. The book is quite challenging and complex in some of its arguments, but I find the broad thrust of it – that competition is good for currencies as it is for other aspects of economic life, to be unanswerable.
Tim Worstall takes a look at what sort of thoughts rattle around inside the head of the man likely to be Britain’s next finance minster, George Osborne. He does not like what he sees, and in the process, makes this vital point:
“What in buggery are “intrinsic values”? If we’re all the way back to Thomas Aquinas and “true value” then we’re about to march off a very steep cliff. For there isn’t and aren’t any such things. The value of something depends upon the value of everything else: we cannot say that 1 kg of gold is worth $12,000, or x tonnes of wheat, or y tonnes of fresh water or z numbers of smiling babies, without having some idea of the relative values of fresh water and smiling babies. Which in turn depend upon the state of knowledge (medical knowledge tells us what our forefathers did not know, that unfresh water leads to definitely not smiling and in fact dead babies) and the state of technology (how much effort do we have to put into freshening water to get smiling babies?) and indeed where we are at any one time (less effort if we’re by a clear mountain stream, more if we’re on a boat out in the ocean). Values are thus relative, always, all the time, not intrinsic.”
Or as PJ O’Rourke once put it when taking Marxist economics (surely a contradiction in terms, Ed) apart, the problem with the left, in general, is that they cannot accept that the value of anything in a market is ultimately no more or less than what a person wants to pay for it. That makes such leftists angry. Well, that’s life.
The Nobel Prize winning economist and columnist, Paul Krugman, does his best to annoy crusty free market ideologues such as myself with his sheer, implacable wrongness. It stuns me that the craziest remark in the post I link to here is not actually made up, but something he actually wrote.
Perhaps he should do Saturday Night Live.
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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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