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.
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I came across this interview with US academic Cass Sunstein, whose views on behaviouralism – including the area known as “behavioural economics”, have been immensely influential on governments in the past 25 years or so.
The idea of “nudging” people via policies to doing certain things (auto-enrolment in savings for retirement, messaging about the dangers of certain lifestyles, etc) has become a default piece of wisdom. It accords with the tendency of a managerialist political class that sees the wider population as only partially rationally self-interested. Sunstein, as shown in this video (conducted by the Hoover Institution in the US) notes how he disagreed with the Chicago-based economics folk such as Nobel Prize winner George Stigler and others about the idea of rational expectations. The behavioural school thinks that human motivation is not like that; in the financial services space, for instance, there is a school of thought known as behavioural finance that looks at crowd behaviour in times of stock market booms, busts, etc. And there are temptations to try and “fix” these behaviours.
I see a few dangers, and maybe Sunstein does too now (it is worth seeing the whole video). For example, it is easy to see how a government, even if democratic and accountable, can grow into a monster if driven by even well-meaning people that think that people aren’t necessarily fully rational, and need to be nudged, or guided, into doing the “right thing”.
This helps explain, in some ways, why the “administrative state” is what it is. It would not have got so big had it been a clearly evil project. Most people who drive all these changes and programmes think they are doing the right thing. Some might be bad but most aren’t. And yet here we are, with a bloated set of governments in the West, with skyrocketing debt and all the rest of it.
I think a major flaw in behavioural economics is the hubris of the “nudge” advocates about how they think they can handle all this. And as we have seen, politicians who lean towards tax-and-spend policies love some of these ideas because they can sit alongside what they want to do anyway. I am not even sure it makes sense to describe these as “liberal” because some of this “nudge” stuff does not seem to accord with ideas about treating people as individuals who need to be held accountable for their actions.
It is arguable that the “nudge” crowd hew to a form of soft determinism, or maybe “soft paternalism” – the notion that we are not really volitional creatures with agency, but buffeted by internal and external forces, and often emotional first, rational second. But even if that latter point is true, a rational person with choice-making capacity can realise that he or she is prone to making unwise/foolish choices, and like Odysseus who lashed himself to a mast to avoid being tempted by the Sirens, adopt rules and protocols to not screw up. (I know an alcoholic who avoids parties and certain events to avoid getting into trouble, to give one example. Another might be a stockbroker who turns off the noise of the daily news and makes better investment decisions over the long run.)
Self-knowledge is the beginning of wisdom, and all that.
“Mr. Merz is doing what no one else in the top ranks of Western politics seems willing to do, which is broach the fundamental dilemma of the modern West. Nations have built welfare and entitlement states that are so large they have outstripped the ability of slow-growing economies to pay for them. Yet because the entitlement cushion is so broad and reaches deep into the middle class, it has become nearly impossible to reform.
This is true among conventional politicians of the left and right. But it’s also true of the supposed radicals of the populist right. From Marine Le Pen in France to the U.K.’s Nigel Farage, the AfD in Germany and Donald Trump, the populists dodge difficult reforms of the broken welfare state.”
– Wall Street Journal ($) editorial, reflecting on the recent statements on the German welfare state by the country’s Chancellor, Friedrich Merz.
Following from my post of yesterday about the attacks on inheritance, and attitudes around equality more generally, I took another look at the Lewis Goodall attack on inheritance. Goodall, a journalist, argues that he is in favour of capitalism – he wants to cut income taxes – and therefore he is not just some malcontent Leftie who wants to hit people on the head with tax.
There is also a sort of intergenerational justice argument going on here. Quantitative easing and other forces have inflated asset values; Boomers have, to some extent, enjoyed final-salary pensions and been able to retire in their early 60s, if not before. Most Gen X (that includes me), Millennials and the Zs will have to work for longer. (Given hopefully rising healthspans, that might not be a bad thing, however.) True, those who were young adults in the 50s, such as my Dad, had to do military service, and there were other nasties to deal with that we younger adults did not have to handle. But still, there’s a sense of grievance that those who had “never had it so good” got to have the best of times, and their offspring have got the dirtier end of the stick. That’s certainly part of what is driving some of this anti-wealth/inheritance narrative.
Switching gears here, there are structures that people have, over the centuries, sought to form to stop inheritors becoming obnoxious and lazy, and also to hold families together so that they don’t fall out, as in the HBO series, Succession.)
For years, in my day job, I have wrestled with the trend of a multi-trillion dollar/equivalent transfer of wealth from the Baby Boomer generation. In the wealth management sector, particularly in the US, there’s a whole field of advisory work that goes on to help guide ultra-wealthy families about how not to spoil their children. The debate is often framed in the question of “how much is too much?” in transferring wealth.
We have seen the rise, in their thousands, of what are called family offices. These are structures – operating around the world – that act as a sort of trusted point of control for a family’s private wealth. FOs operate in North America, continental Europe, the UK, Singapore, United Arab Emirates, Australia, and other developed countries. (I predict a big expansion in India, as many businesses there are family-owned.)
Sometimes FOs emerge from the executive suite of a family-run firm; they run the liquid wealth of a family, and that becomes a sole focus once a firm is sold or floated on a market. FOs are designed to hold families together – they even have their own “constitutions” and governing procedures – and create a sort of structure through which families handle payments to different members, run investments, deal with philanthropy, personal and cybersecurity, bill payments, and more. Once obscure, the family office industry is a large, multi-trillion sector. The original FO was, arguably, founded by J D Rockefeller, the oil tycoon. Today, the likes of Michael Dell and Bill Gates have them, as do the founders of Google, the governing family of Walmart, Home Depot, shipping dynasties in Denmark, Mittlestand firms in Germany, and many more. (Germany has many family offices, most of which are obscure.) Families that are far less wealthy than the foregoing can create family offices, although they aren’t economically efficient to run if assets under management go under $100 million.
Another structure for we lesser mortals is the trust. These are creatures of the English Common Law, and are extensive in the UK, Australia, New Zealand, Singapore, and biggest of all, the US.
Trusts remain an incredibly useful tool for ensuring orderly transfer/control of assets by families. If people such as Lewis Goodall are worried that inheritors become spoiled brats and lose a work ethic (if that is his genuine concern, it is a fair one to have), then trusts can, or could, be structured so that a beneficiary only receives payouts from it if certain terms and conditions are met.
Governments sometimes try and clip the wings of trusts. In 2006, UK Chancellor of the Exchequer Gordon Brown moved against the trusts sector, on the specific issue of inheritance. The use of trusts in the UK has, on balance, shrunk, but they retain their uses.
If people fear that inheritance saps the ambition and energy of inheritors, then trusts and other structures can be set up by parents and others to avoid that from happening. In a way, this sort of discussion is not so different from those that come with Universal Basic Income – what happens if we turn the entire working-age public into a bunch of loafers?
To some extent, considering the impact of inheritance on inheritors – or UBI recipients – are empirical questions, based on an understanding of incentives, behavioural issues, values and so on. The morality of it is a different one. UBI is funded via tax – a coercive move of money from the individual to the State. Inheritors of legitimately acquired wealth are receiving something that was legitimately held and transferred by consent of the transferrer.
On a friend’s Facebook page I left the following comment about the claim of the writer Abi Wilkinson (in the Guardian!) that inheritance should be confiscated by government to fund the UK’s welfare state. What could possibly go wrong?
I wrote:
The hostility to inheritance also comes from a mistaken sense of fairness. As Robert Nozick argued in Anarchy, State and Utopia (I quote from memory), people wrongly think life resembles an athletics race, where the racers compete to hit the finishing line. As a result, those “lucky” athletes endowed by nature/god whatever with stronger muscles etc must be handicapped by having weights in their shoes, for example. Just as a child of rich parents must be deliberately held back to give poor kids a more “fair” chance of winning. But as Nozick said, life isn’t like that. It is about people exchanging goods, services and ideas with one another. There’s no fixed end-point to which we are all racing.
Also, the idea that there is some “prize” that humans compete for implies that someone or some entity has created that “prize” in the first place. But that’s smuggling in a sort of communitarian assumption into the actions of individuals. In an open society, the prizes on offer are varied and multiply constantly.
I should add that the second section of Nozick’s renowned book dissects and ultimately rejects forced redistribution for egalitarian or other forms of “patterned” notions of justice, and he robustly defends what he calls an “entitlement” concept of justice.
One of the approaches that the late Prof. Nozick used was the thought experiment, such as the example referenced above about a fictitious athletics race in which the entrants are hampered/favoured to make the race more “even”, and then assuming that society in general should be like this. A race, held by people who know the rules and seek to abide by them, is not like an open society. “Open” is the key word here: there is no single end to which persons are heading, such as winning the race.
And yet a lot of the metaphors one comes across around discussions around equality, including equality of opportunity as well as outcome, seem to borrow, perhaps unwittingly, from this “race competition” worldview. To give another example, I remember reading some months ago about a university professor (Warwick) who suggested that when parents read stories to their children, this is a form of privilege. This also plays to the idea that life has a fixed end-measure of success, so that anyone giving a value to someone else is giving the latter an unfair “head start” on someone else. It would require a State to exercise totalitarian control of our actions from the moment we wake up to go to sleep lest our actions unfairly advantage/hamper someone in the “race” they are considered, by this worldview, to be on. (It also, by the way, shows that today’s Higher Ed. is full of certifiable fools and worse.)
On a related note, Thomas Sowell is good on this sort of topic. His book, A Conflict Of Visions, is an example.
Update: The UK journalist Lewis Goodall – he appeared on LBC the other day – says inheritance should be confiscated. No ifs, no buts. His argument is that no-one should have any wealth they haven’t “earned”. But that takes one down some very murky philosophical paths. We did not “earn” the good fortune to have been born in the current era, with its modern healthcare, high-speed travel and technical marvels. We could have been born in the Dark Ages, for instance. We did not “earn” this or that. We haven’t “earned” our genes, or for that matter, been “punished” for them, either. They just are. An inheritor is entitled in the narrowest sense of that word to X that is handed down because the person handing it down was the legitimate owner of it.
As Andrew Lilico in the Spectator argues (paywall, sorry), taxes on inheritance are attempts to block people from using their property as they choose. But what’s the point for many people in amassing significant wealth if they cannot transfer it to their nearest and dearest? Also, if the likes of Goodall claim that they are for capitalism, they cannot decide that this or that form of wealth is “unearned” and have the State seize it. The acquisition and transfer of property is an embedded feature of a free society.
As ever, F A Hayek was excellent on this sort of topic. See “Equality, Value and Merit”.
News comes to me that an advert, a video in the style of a musical, for something called Coinbase, which I understand is some form of crypto set up, which is why the advert has been banned, and about which I know nothing more, (and this is not advice or recommendation on financial matters) is not permitted in the UK by the regulator, OFCOM. Not that I doubt that OFCOM are interpreting the regulations correctly. That the advert might be termed mildly satirical would be a fair description, and take a look at the shop names. It’s almost an updated Oliver Twist. Has it been made by people familiar with modern Britain? I would say so.
As Burns said in his ode ‘To a louse’:’O wad some Power the giftie gie us / To see oursels as ithers see us!’.
Thanks to comedian Andrew Lawrence for the tip.
Over at Bloomberg, columnist Matthew Brooker notes that a mix of policies have caused London’s housebuilding sector to almost stop.
Homebuilding in London has all but ground to a halt. The capital is on track to deliver less than 5% of its annual target of 88,000 homes with half the year gone, by far the worst performance in two decades. Such a collapse in the UK’s largest and richest city would be a poor omen for economic growth and productivity at the best of times. For this to be occurring under a one-year-old Labour government that arrived in office promising a generational uplift in housing supply is extraordinary.
The figures almost defy belief. Housing starts have fallen by more than 90% compared with the financial year ended in 2023, official data from the Greater London Authority show.
The reasons:
Why is this happening and what can be done? The words “perfect storm” crop up frequently. A thicket of interlocking factors is at play, some of which have built up over years. On the supply side, the immediate trigger is the creation of a new Building Safety Regulator, or BSR, with a set of more stringent requirements for high-rise buildings in the wake of the 2017 Grenfell fire, which killed 72 people. Delays in approvals have compounded post-pandemic challenges of inflated construction costs and higher interest rates.
Meanwhile, successive tax changes, some dating back more than a decade, have driven away offshore investors, according to Molior founder Tim Craine. Developers build only in response to demand, he points out. Investors who buy apartments “off plan” before they are complete play a crucial role in financing construction and providing a signal of likely end-demand. Their declining presence has raised speculative risks and undermined the financial viability of projects.
Former Conservative Chancellor of the Exchequer George Osborne targeted a series of tax measures at buy-to-let investors in the belief that they were driving up house prices and squeezing out first-time buyers. The trouble is that the private-led investment model is intimately connected to the delivery of affordable housing for deprived communities. London boroughs grant planning permission for apartment complexes on condition that developers designate a portion, typically 35%, as affordable. These are bought by housing associations that then sell or rent them out at discounts to the market. If there are no private buyers, there will be no affordable housing either.
The article makes no reference to the current immigration issue in the UK, but it is fair to say that even without large net inflows of people to the UK, the low level of house building and new residential accommodation is a problem if we want a refurbished, modern housing stock. Add in the immigration issue, then we have a crisis. The current UK government made much of housing when it was elected last July. The data for London is lamentable.
The article also reminded me of the planning dysfunction, among other things, that was identified as problems in last year’s major “Foundations” report into why UK seems unable to get anything built, and certainly erected on time, and on budget, these days.
Homebuilding and Renovating Newsletter is not usually a place where one would expect to see a story to make the blood boil. But it has this: “Council’s £70k error stayed hidden for years, until one man refused to back down”.
Steve Dally never expected a minor tweak to his home improvement plans would end in a life-altering legal standoff.
What began as a routine planning permission amendment, spiralled into a punitive bill, threats of repossession, and five years of unrelenting pressure.
Now, Waverley Borough Council admits it got it wrong, but only after one man forced their hand.
In 2018, Dally received planning permission to rebuild his rear extension. It was exempt from the Community Infrastructure Levy (CIL).
A year later, he made a minor amendment, but the council treated it as a brand-new build and to his surprise the council issued a £70,000 charge.
“I was blindsided,” Dally said. “It was a technicality. But it nearly ruined us.”
The council refused to budge. Letters, threats, and interest charges followed. “You wouldn’t treat a dog this way,” he said in 2024.
[…]
“The system was set up with no safety net,” admitted Liberal Democrat councillor Liz Townsend. “Even when mistakes happened, we had no way to fix them.”
“No way to fix them”… that awkward feeling when you admit that you wrongfully demanded tens of thousands of pounds from someone and you’d quite like to put it right but you can’t because there isn’t a procedure in the manual.
Evidently a way was found eventually, because on July 8th the council formally admitted its mistake and confirmed Mr Dally would have his money refunded – but I suspect that if it had been someone in the private sector making a spurious demand that the council pay them seventy thousand quid, the discovery of a way to put things right would have taken somewhat less than six years.
Andrew Lilico, on CapX
“Our fiscal situation is hopelessly beyond the capacity of our politics to address it. Tax and spending is so high, and so concentrated in unproductive activities such as NHS spending, that it is bearing down on growth, creating a doom loop of insufficient tax revenues to keep our debts from rising leading to increased tax rates leading to lower GDP growth leading to lower tax revenues. The only ways out are fiscal crisis, inflating away our debts or brute luck. What’s my guess? I’m still betting on luck, with new technologies boosting growth enough for us to escape, but crisis is getting nearer and nearer with every month that passes.”
When people start holding out for the whizz-bang potential of tech, or just plain luck, to take us away from the brink, things aren’t good. Plan for the worst, and hope for the best is a smarter strategy. At the moment, the UK, like all too many other developed countries, appears to be stuck in what Lilico refers to the “doom-loop” of sluggish growth, an ageing population, falling revenue, higher borrowing, and so forth. The term “doom-loop” got used a lot, I recall, during the pandemic, when some of our present discontents took a turn for the worse. Breaking free of such a “loop” will require a level of brute courage and honesty that, unfortunately, will be a tall order. I am not even sure how far down this path Nigel Farage of Reform can go – particularly if he is trying to woo disgruntled, “our NHS” Labour voters in the north, Midlands and other parts of the UK. As for the Tories…they appear for the moment to have gone on a sabbatical.
Where to turn for ideas? Well, I’ve started to read the books (here and here) on the UK’s economic plight by Jonathan Patrick Moynihan, who is a member of the House of Lords (“Baron Moynihan of Chelsea”), and a businessman and venture capitalist. The books are superbly written, and rather lovely items in their own right with the cartoons of famous politicians and pundits on the dust covers. They seem to chart a way forward. But at root the message is hard: cut spending, and shed a lot of functions.
The question, for me, is when and how does the work of pushing back against the current insanity start, assuming that Starmer, Reeves and the rest of these jokers see out a full parliamentary term.
At what point, for example, would an Argentinian-style chainsaw approach be required? Are we going to need a case of crisis treatment when all else has failed?
For a few hours today the lead story on the front pages of both the Guardian and the Telegraph was about the untimely demise of a plant. The Sycamore Gap Tree was a mildly famous old tree next to Hadrian’s Wall. I don’t think I ever consciously saw it in person, but I had heard of it. The tree’s Wikipedia article – it has its own Wikipedia article – says,
The tree was felled in the early morning of 28 September 2023 in what Northumbria Police described as “an act of vandalism”. The felling of the tree led to an outpouring of anger and sadness.
That last sentence is certainly true. It was one of those news stories that is of little consequence by the normal measures of the importance of news stories but which packed a surprising punch emotionally. I’d heard of that tree. It had a node in my brain, not a big node but one in a nice area near to the ones dealing with history and nature and charming old guidebooks, and now some scumbags had cut it down, apparently for the fun of making me and people like me feel bad. I was glad when said scumbags were arrested and gladder still when earlier today they were both found guilty of criminal damage and told to expect custodial sentences. I was even a little bit glad to read that both men had been remanded in custody prior to sentencing for their own protection.
Am I justified in thinking that the two men who cut down this particular tree deserve more serious punishment than other people who cut down trees that do not belong to them in order to steal the wood or something? I would not go quite so far as the readers of the Telegraph, who would be quite happy to use the wood to build a gallows and recover the costs by selling commemorative slices, but I am definitely in a vengeful mood.
Why? It was not my tree, except in the feeble sense that it belonged to the National Trust, of which I am member. My suffering at its demise was not zero but was not great either. It didn’t ruin my life. It didn’t even ruin my morning. Presumably the same goes for all the other people who felt bad reading about the vandalism in the paper or hearing about it on the news. They suffered, but not greatly. The tree didn’t suffer. All agree that the criminal damage was a straightforward crime and should be punished, but why do so many people, including me, feel that this was a more serious crime than most instances of criminal damage because it upset people? The post below treats the idea of blasphemy laws and a so-called right to be shielded from offensive speech with a scorn that I fully share. I have an uneasy feeling that I am coming close to setting up an offence of tree blasphemy.
“Yes, like any philosophy, neoliberalism has its limits, and as with any philosophy, some of its adherents get overexcited and take things a bit too far. But given where we currently are, and where we are likely to go in the near future, focussing on the risk of “too much neoliberalism” seems bizarre to me. It is as if you were lost in the desert, and your main worry was that if you find an oasis, you might end up drinking too much water, and get overhydrated. Maybe one day, neoliberalism will be so popular that there really will be a non-trivial risk of taking it too far. If so – that will be a good day.”
– Kristian Niemietz, Editorial Director, Institute of Economic Affairs. (Part of his commentary is this recent apologia to libertarians from Noah Smith, a US centre-leftist who appears to have some intellectual honesty and grit, which is refreshing, and so it appears, rare.)
It might be helpful of critics of neoliberalism bothered to define it clearly.
(Tim Worstall has a related takedown of George Monbiot’s recent forays into this territory. Worstall is, as you might expect, unimpressed.)
“Donald Trump will not “break” Canada, Mark Carney promised during his election victory speech on Monday evening. The Liberal leader secured a remarkable comeback victory for the party, which had been set for an electoral wipeout under Justin Trudeau. In a speech to supporters in Ottawa, Mr Carney, the former governor of the Bank of England, said Mr Trump’s repeated description of Canada as the 51 state was not an “idle threat”.
It was an idle threat, as Carney knows perfectly well. I would ask “What was Trump thinking?”, except I already know that the answer was “This will make my supporters laugh and annoy people I enjoy seeing annoyed.”
I remain glad that Donald Trump won the 2024 U.S. election. I have several reasons for this view, but perhaps the biggest one was that for at least half Joe Biden’s term of office a cabal of his “advisers” operated his poor senile body like a puppet. They were preparing to continue their unelected rule for four more years when his visible confusion in the debate against Trump made the pretence no longer supportable, so they replaced him with Kamala Harris, who was deeply complicit in this fraud against the American people. While this was happening, tyrants and terrorists made hay worldwide.
Trump has other virtues besides not being senile. He is brave and determined. Rather than being apologetic at having something as primitive as a nationality, as people like Mark Carney and Sir Keir Starmer are when among their own class, Trump actually loves his country. Unfortunately his ideas on how to advance its interests are often simplistic and counterproductive (e.g. tariffs) and his behaviour is often childish (e.g. pointlessly goading Canada and Greenland).
The very shallowness of Trump’s economic thought may help America avoid the harm tariffs would do it. One of the world’s great tragedies is that very intelligent men remain attached to the bad ideas that appealed to them in youth, and employ their intellect in devising ever more ingenious explanations for why said bad ideas failed this time but will work next time. In contrast, Trump was not argued into supporting tariffs, and probably does not need to be argued out of it. I am reasonably hopeful that when he sees prices go up and his poll numbers slide he will row back on the policy, stopping only to claim it was all a negotiating ploy. (Hell, maybe it was all a negotiating ploy.) J.D. Vance, a genuine intellectual, may be harder to convince.
Alas for Canada, Mark Carney has all of Vance’s intellectualism without his unconventionality. He will continue the policies of his predecessor Justin Trudeau and his explanations of why they are not working will be most eloquent.
Well, he went ahead and did it. In a ceremony outside the White House, Donald Trump unveiled a list of tariffs on countries, on “friend and foe”, starting with a minimum of 10% (the UK, which is now outside the European Union, was hit with the 10% rate, while the EU was hit with double that amount). In general I see this as a bad day for the US and world economy for all the sort of reasons I have laid out.
This will not adjust the worldview of the red hat wearers, but I wonder has it ever occurred to Mr Trump’s fans that his arguments, when adjusted for a bit of rhetoric, are more or less leftist stuff from the 1990s?
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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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