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]

Might as well be hanged for a sheep as a lamb, Liz

“Labour surges to 33-point lead over Tories”, reports the Times.

Labour has surged to a 33-point poll lead over the Conservatives after a week of market turmoil triggered by Liz Truss’s tax-cutting budget.

The YouGov poll for The Times finds Tory support has fallen by seven points in the past four days amid fears the government’s plans will lead to spiralling interest rate rises.

It is thought to be the largest poll lead enjoyed by any party with any pollster since the late 1990s.

Labour’s lead is fuelled by voters switching directly from the Conservatives, with 17 per cent of those who backed Boris Johnson in 2019 saying they would vote Labour.

Just 37 per cent of 2019 Conservative voters said they were planning to stick with the party, suggesting a Tory wipeout.

Liz Truss now faces a choice. She can pull back. This might regain her a percentage point or two. She would then be 31 points behind instead of 33. Her place in history would be secure: as an answer to a difficult pub quiz question about who was Prime Minister between Boris Johnson and Sir Keir Starmer. Or she can push onwards. She might still fail, but more gloriously. And if she succeeds, she gets to sit alongside Margaret Thatcher in the Told You So Hall of Fame. Even if, as seems likely, she loses the next election but hands Sir Keir an economy in significantly better shape, she will be remembered as someone who put country before party.

I read it as “digital collar”

From the White House website:

President Biden often summarizes his vision for America in one word: Possibilities. A “digital dollar” may seem far-fetched, but modern technology could make it a real possibility.

A United States central bank digital currency (CBDC) would be a digital form of the U.S. dollar. While the U.S. has not yet decided whether it will pursue a CBDC, the U.S. has been closely examining the implications of, and options for, issuing a CBDC. If the U.S. pursued a CBDC, there could be many possible benefits, such as facilitating efficient and low-cost transactions, fostering greater access to the financial system, boosting economic growth, and supporting the continued centrality of the U.S. within the international financial system. However, a U.S. CBDC could also introduce a variety of risks, as it might affect everything ranging from the stability of the financial system to the protection of sensitive data.

To be fair, these remarks by Dr. Alondra Nelson, head of the White House Office of Science and Technology Policy, Alexander Macgillivray, Principal Deputy United States Chief Technology Officer, and Nik Marda, Policy Advisor do acknowledge the existence of risks:

For example, these objectives state that a U.S. CBDC system should expand equitable access to the financial system, preserve the role of physical cash, and only collect data that is strictly necessary.

Given the record of the FBI, the CIA and the NSA, I would put very little faith in their definition of “strictly necessary” as a shield against the US government spying on its citizens.

“Little by little the truth of lockdown is being admitted”

A retired and now ennobled supreme court judge writes in the Times that the decisions of the government during a crisis were wise and good and that if, perchance, any slight errors were made, fear not, lessons will be learned.

Bzzt. Click. System error. Commence program reset.

A retired and now ennobled supreme court judge – Lord Sumption – writes in the Times that “Little by little the truth of lockdown is being admitted: it was a disaster”.

In a remarkably candid interview with The Spectator, Rishi Sunak has blown the gaff on the sheer superficiality of the decision-making process of which he was himself part. The fundamental rule of good government is not to make radical decisions without understanding the likely consequences. It seems obvious. Yet it is at that most basic level that the Johnson government failed. The tragedy is that this is only now being acknowledged.

Sunak makes three main points. First, the scientific advice was more equivocal and inconsistent than the government let on. Some of it was based on questionable premises that were never properly scrutinised. Some of it fell apart as soon it was challenged from outside the groupthink of the Sage advisory body. Second, to build support, the government stoked fear, embarking on a manipulative advertising campaign and endorsing extravagant graphics pointing to an uncontrolled rise in mortality if we were not locked down. Third, the government not only ignored the catastrophic collateral damage done by the lockdown but actively discouraged discussion of it, both in government and in its public messaging.

Lockdown was a policy conceived in the early days by China and the World Health Organisation as a way of suppressing the virus altogether (so-called zero Covid). The WHO quickly abandoned this unrealistic ambition. But European countries, except Sweden, eagerly embraced lockdown, ripping up a decade of pandemic planning that had been based on concentrating help on vulnerable groups and avoiding coercion.

At first Britain stood up against the stampede. Then Professor Neil Ferguson’s team at Imperial College London published its notorious “Report 9”. Sunak confirms that this was what panicked ministers into a measure that the scientists had previously rejected. If No 10 had studied the assumptions underlying it, it might have been less impressed. Report 9 assumed that in the absence of a lockdown people would do nothing whatever to protect themselves. This was contrary to all experience of human behaviour as well as to data available at the time, which showed that people were voluntarily reducing contacts well before the lockdown was announced.

I find myself in the odd position of being slightly more in sympathy with the government than is a former supreme court judge. Frightened men make mistakes. I also find myself slightly more in sympathy with Rishi Sunak than I was yesterday. However, I have to ask why he did not voice his doubts at the time.

Working from home – who’s the exploited proletariat, exactly?

CEOs at prominent firms such as Apple, Tesla and Goldman Sachs have required employees to return to the office, curbing the working from home trend that got going at the start of the pandemic.

One point that jumps out at me is how this shows that skilled employees have a lot of market muscle today – firms need to persuade them to do certain things and don’t have all the power.

Consider: Labour is not homogenous and takes time to replace. We have seen a dramatic example of this in the airline sector, where thousands of staff, such as those working in security and baggage handling, were let go, creating a bottleneck problem when restrictions ended. Airlines are now scrambling to get people re-hired, but that is not easy as employees and contractors must go through security vetting. Hence the thousands of cancelled and rescheduled flights that have been a feature of the holiday travelling season.

What all this shows is how flawed Karl Marx was in his claim that capitalists have the superior bargaining power over “workers” and that business owners hope to create a “reserve army” of the unemployed who will put downward pressure on wages, hence creating the “surplus” that becomes profit.

Among the many things wrong with Marx’s idea is that claim that the majority of the risks and uncertainties are on the employees’ side. Hiring and retaining labour, including skilled labour, is not straightforward. There are search costs to consider in hiring, and employers know that it is often better to retain a worker, even if they could get someone a bit cheaper, than have the cost and time of hiring another. Also, a worker is paid a wage/salary, at least initially, whether a firm has made a profit or not, and that is a risk the employer has to bear (otherwise why else do firms have revolving credit facilities to manage cashflow?) Further, all workers are to some extent also “capitalists” – they have built skills and character (punctuality, agreeableness, ability to follow rules, get on with others and serve clients, etc) that take time and effort to acquire. A plumber, software programmer or security manager have capital sitting in their heads, and when a firm hires such a person, it is renting that capital.

There are of course of lots of reasons why Marx’s description of labour/capital relations is wrong and simplistic (example: his insertion of the idea of “socially necessary labour” begs the question of how one knows what that is, and it turns out that SNL is revealed by the interplay of prices in a market, rendering his idea circular). But the current working from home/office argument seems to bring home a particular point, which is that those supposedly evil capitalists don’t have all the power, and in many cases, have far less than even they might have hoped for.

Addendum: Thomas Sowell’s critique of Marxism remains one of the most succinct and effective that I have read. Also, there is a segment in Robert Nozick’s Anarchy, State and Utopia where he demolishes the “exploitation” theory very effectively. Another good treatment of the issue is by Kevin McFarlane, an engineer and libertarian.

Now he tell us

Mr Sunak…..explained how the minutes from Sage meetngs were edited so that dissenting voices were not included in the final draft.

(Report from the Daily Telegraph.)

In other words, the committee – Sage – that was created by the government to oversee COVID-19 policy deliberately suppressed views from one of the most important departments of state – The Treasury – because it did not go with the lockdown narrative.

I am not a particular fan of former Chancellor of the Exchequer, Rishi Sunak, one of the two senior figures running for leadership of the Conservative Party. We have the highest tax burden in 70 years, and he could, had he been so inclined, resigned rather than gone along with that. Nevertheless, his comments on how policy on Covid was driven over the past few years are shocking, if true. Maybe he is trying to justify himself after events – he could, of course, have resigned and explained why he was so appalled at what happened. We must not forget the efforts made by the scientific/policy “establishment” to suppress awkward voices such as the signatories of the Great Barrington Declaration in their calls for focused action against the virus rather than indiscriminate lockdowns.

I am not particularly hopeful that the right lessons will be learned from the COVID-19 debacle, such as how dangerous it is to give power to a group of people with no wider appreciation of the damage actions can cause (assuming that said damage was not indeed part of the actual point). The dynamics of power being what they are, this sort of thing can and will happen again. Groupthink is killing people, in some cases, literally. A solid consensus in the banking/financial services sector before the 2008 financial crash held that central bankers had more or less cracked the problem of setting interest rates, running monetary policy and inflation, and that if banks got involved in odd-sounding derivative products, they’d be fine in lending sub-prime loans; we have had “the science is settled” consensus on global warming, and part of our current energy clusterfuck can be pinned on a determined drive against fossil fuels in much of the West. The response to covid was another dangerous “the science is settled” moment. The way that children are taught – or not taught – in schools is another example of a dangerous consensus.

Challenging these “the science is settled” mindsets is hard, but it has to be done.

Autumn is coming

You may think that mid-June is a little early for me to be saying that, but I do see signs that Britain, and perhaps the world, is not as green as it once was:

  • Ben Spencer and Harry Yorke in the Times: “Ministers quietly abandon ‘green crap’ as focus shifts to food security”

    Boris Johnson has scaled back plans to rewild the country as the government retreats from the green agenda to focus on the cost-of-living crisis.

    Ministers last year announced a post-Brexit scheme that would pay farmers up to £800 million a year — a third of the farming budget — to transform agricultural land into nature-rich forests, coastal wetlands, peatlands and wildflower meadows.

    But the fund, called the landscape recovery scheme, has been quietly slashed to just £50 million over three years, less than 1 per cent of the budget.

  • Nick Cohen in the Guardian: “Why bankers close their ears to the ‘climate nut jobs’ talking about the end of the world”

    If the future remembers any corporate villain from 2022, it will be Stuart Kirk. The satirically titled head of “responsible investment” at HSBC looks the part: shaven headed, tightly trimmed beard, hard, sharp eyes. Like all the best villains, the banker’s arguments are insidiously appealing. He says out loud what his audience thinks, cutting through polite society’s pious crap to reveal its selfish desires.

    “There’s always some nut job telling me about the end of the world,” he told the Financial Times’s Moral Money conference – and I haven’t made that title up either. “Who cares if Miami is six metres underwater in 100 years? Amsterdam has been six metres underwater for ages and that’s a really nice place.”

  • A poll by Redfield and Wilton Strategies asked, “Would Britons support or oppose the Government suspending its environmental taxes to reduce the cost of living?” The result:

    Support 49%
    Oppose 18%
    Neither 23%

    A majority (58%) of 2019 Conservative voters and a plurality (46%) of 2019 Labour voters support the suspension of environmental taxes.

  • Samizdata quote of the day

    “To tackle big problems, we need more freedom, not less. Only world-leading entrepreneurs and businesses can stimulate the new discoveries and technologies that will enable us to deal with super-castropic risks. It is not collective sacrifice but a new wave of radical individualism that fuses classical ideals of liberty with a renewed sense of personal responsibility (not least when it comes to health) that will make our country more resilient.”

    Sherelle Jacobs, Daily Telegraph (£)

    Convinced governments have massive cash reserves they’re keeping from you just to be evil?

    Then you will LOVE this ABSOLUTELY FREE (and gloriously 70’s K-Tel) video brought to you by “Mercurius”, “SNP Economics Explained”. It isn’t just for Scotland. It works for YOUR government, too, GUARANTEED.

    Because everything is easily solved by pledging more money.
    No tax rises required.
    No cuts to other services.
    No need to set the conditions for a growing economy to take in more tax.
    A fairer society means pledging to pay for everything, absolutely FREE
    It’s that easy!
    Have a £5,000 cash injection every day.
    Hell, why not have £10,000?
    Now that’s compassionate!

    A formula for failure

    There is a shortage of baby milk in the US. Few fears are more primal than that of not being able to feed your baby. Parents across America are stressed and angry. (Some people, however, find the situation amusing.) One of the many reasons to like unbridled capitalism is that by reducing scarcity it reduces conflict. Whenever there is a shortage people become angry when they see others getting what they cannot get.

    “Texas governor criticises Biden administration for giving baby formula to migrant children”, writes the Independent. There are several things worth discussing there. It would be unconscionable not to give formula to children who need it, but the knowledge that “Uncle Sam will provide” probably is a factor attracting illegal immigrants to the US, including children both accompanied and unaccompanied. The consequences of that can be horrible.

    However the thing that struck me most about this story was tucked away as background information:

    A recall of formula produced at a Michigan manufacturing facility – along with a Covid-19-fuelled supply chain issues – has made formula difficult for families to find, or subject to purchase limits in stores, after manufacturers shut down and warehouse stocks were recalled but not replaced. US formula is largely monopolised, with stringent regulations on imports; shortages from the recall are compounded by demand among a handful of companies relying on the same fragile supply chain.

    President Biden has called on federal agencies to help address the shortages, including easing rules that manufacturers must follow for their products to be eligible under the Special Supplemental Nutrition Program for Women, Infants, and Children, or WIC, which supports low-income families.

    Few dare argue when “stringent regulations on imports” and “rules that manufacturers must follow” are introduced under the cry of “We must protect the children!” Yet now that the children are being protected half to death, these measures seem astonishingly hard to remove.

    Update: Eric Boehm of Reason magazine has more detail: America’s Trade and Regulatory Policies Have Contributed to the Baby Formula Shortage

    Thanks to strict FDA regulations and oppressive tariffs, America is already largely dependent on only domestic suppliers for infant formula: America exports far more than it imports every year.

    That’s exactly the situation the economic nationalist want in all industries—and we’re now seeing exactly how that can go wrong. Cutting off foreign trade and protecting domestic suppliers can make a country more vulnerable to unexpected supply problems, not more resilient.

    The rot goes deep

    I was going to say the rot goes deep in Scottish politics, but it ain’t just Scotland.

    It started with a minor story about a senior member of the Scottish National Party getting into hot water. Until this story broke Dr Tim Rideout was the SNP’s currency guy. Quoting the Times:

    “Nicola Sturgeon ‘will root out racism’ in SNP after adviser Tim Rideout suspended”

    Nicola Sturgeon has pledged to “root out and condemn toxic racist political discourse” in the SNP after a senior party member said that Priti Patel should be “sent back to Uganda”.

    Tim Rideout, a member of the nationalists’ policy development committee, was suspended from the party after the controversial social media posts about the home secretary came to light.

    Pam Gosal, the Conservative MSP and the first Indian Sikh member at Holyrood, urged the first minister to condemn the “appalling racist comment”.

    Pam Gosal was right. It was a nasty bit of snide directed at the Home Secretary solely because of her ancestry. I already knew Rideout was a twit on financial matters – here he is speaking at some sort of Modern Monetary Theory conference – but I had thought better of him than that.

    A Conservative MSP angrily saying that a Scottish National Party official has said something appalling, when he has, is normal politics. What shook me, because not that long ago it was not normal politics, was the remark from the (Labour) Shadow Secretary of State for Scotland, Ian Murray:

    Ian Murray, the shadow Scottish secretary, has called for police to take action against Rideout. He added: “These are truly horrendous and outright racist remarks from a key advisor to Nicola Sturgeon.

    Once laws against “hate” unaccompanied by any clear crime are passed, as the SNP has done in Scotland, it does not take long for the policing of political speech to become literal.

    Turkey – circling the drain with a gold grab

    Little noticed in the UK media, reports from a financial vlogger Joe Blogs (that is his handle) on Turkey tells us that the government is ‘asking’ citizens to hand over their gold and foreign currency, at a time of 50% inflation, but citizens will get Lira in return.  There are 30,000 gold shops in Turkey and five major refineries. Do not worry that Erdogan is a (not so) covert Islamist, he is first and foremost a Keynesian.

    The Turkish government is not simply standing by and watching as the Lira inflates away, the government has cut tax on food from 8% to 1%, and this in the context of a currency crisis, the lira falling 44% in 2021 against foreign currencies. So they know that cutting taxes eases burdens on people. Unfortunately, Atatürk’s doctrine of ‘statism‘ lingers, with lots of Turks employed by the State.

    Meanwhile, the Turkish Finance Minister has been in the UK and reported had a ‘fantastic‘ meeting with potential investors. And the goverment is determined to keep on down this path, telling the private banks to step up their efforts to help by handing over foreign currency deposits. (Doubtless this is all voluntary).

    Here is a graph of recent Turkish inflation rates. Are we going to be seeing a ‘crack-up boom’ in real time any week now? Turkey is reportedly informally dollarising, with over 50% of transactions in Turkey in dollars (Why not the Euro?).

    I can’t help thinking that in the UK, the government is looking at Turkey with envious eyes, dreaming of taking steps to inflate away what remains of our prosperity and to seize our assets.

    And it is not all bad from the Turkish government, they have changed the name of the country in a re-branding exercise, changing it from ‘Turkey’ to ‘Türkiye’, apparently to avoid confusion with the bird of the same name.

    Joe Blogs also has some interesting coverage on the Chinese property conglomerate Evergrande, and the efforts of a US Hedge Fund to take ownership of collateral in Hong Kong.

    Does aid to evil regimes cement them in power? Should we do it anyway?

    When I was young I read many earnest articles saying that international aid should be directed towards eradicating the long term causes of famine and poverty rather than short term fixes for specific disasters. Back then I was convinced by such arguments, but later I reversed my opinion. Give generously in emergencies, yes, but most government-to-government foreign aid was well described by development economist Peter Bauer: “Aid is a phenomenon whereby poor people in rich countries are taxed to support the lifestyles of rich people in poor countries”. The money from the sky is not merely wasted but counterproductive:

    Governments embarked on fanciful schemes. Private investors, lacking confidence in public policies or in the steadfastness of leaders, held back. Powerful rulers acted arbitrarily. Corruption became endemic. Development faltered, and poverty endured.

    Yet it remains true that when catastrophe strikes it is often only governments who have the power – the credit, the personnel, the ships and aircraft – to render aid quickly. In most such cases I unhesitatingly say, do it. Yeah, it might be nicer if we were not forced to pay taxes for any cause at all but when people are dying by the thousands don’t wait for Libertopia to evolve before helping them.

    However it is at least arguable that one situation where even emergency aid can end up doing net harm is when the regime in charge of the country stricken by famine or disaster is so bad that perpetuating it (as the aid will undoubtedly do) is an even worse catastrophe.

    Is Afghanistan such a case? This Guardian article does a fair job of presenting both sides of the dilemma, albeit from a starting point far more in favour of international aid than mine.