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]
|
Russell Roberts wrote this essay yesterday in response to the devastating fires in Los Angeles: “Profits versus Love”
A few years back we thought about building a deck or a porch on the back of our house. But we decided against it when the estimates started coming in. They were about double what the architect had told us it would cost. Double! Had the architect misled us as a way of encouraging us to proceed with the project? No, six months earlier the Mississippi had overflowed its banks and destroyed a lot of houses in the St. Louis area. Carpenters and builders had no time to build a back porch or a deck. They had bigger fish to fry. To get them to build a porch, you had to pay a premium.
We delayed the project for a couple of years, and prices came down. That delay was an example of the hidden benefit of high prices. When prices are high, the least-urgent projects get delayed, freeing up resources for more urgent projects. The porch just isn’t worth it. So the wood I would have used instead gets set aside to rebuild a washed-away house. The carpenter I would have kept busy now works on building that new house.
As you may have noticed, my claim that Russell Roberts wrote that essay yesterday was a lie. He wrote it twenty-one years ago in 2003. Unfortunately it might as well have been written yesterday because some people never learn. On 12 January 2025 the Governor of California, Gavin Newsom, tweeted about measures he is taking in an effort to help the victims of the fires:
NEW: Just issued an Executive Order that will allow victims of the SoCal fires to not get caught up in bureaucratic red tape and quickly rebuild their homes.
We are also extending key price gouging protections to help make rebuilding more affordable.
The responses are full of people making the obvious point about red tape. A lady calling herself “Orange County MAGA” says, “So you’re saying California has too much bureaucratic red tape? Gee, if only there was an elected leader who we could call…”
Criticism of Newsom’s “price gouging protections” is much rarer, despite the harm they do being more immediate and severe than the long-term harm done by excessive building regulations. That is par for the course. Patrick Crozier’s post from 2015, “People are ignorant about economics”, contains this anecdote from Mike Munger:
…there was a hurricane in Raleigh, North Carolina. The roads were blocked, there was no electricity and there was a shortage of ice.
Ice may not sound that important but it is. Not only does it help to preserve food but it also helps to preserve some medicines like, for instance, the insulin needed by diabetics.
Some “yahoos” – Munger’s term – saw an opportunity to make money. They got themselves a truck, loaded it with ice and some chainsaws and proceeded to drive towards the centre of Raleigh. If they found the road in front of them blocked they chopped up the fallen trees and carried on.
When they got to the centre of town they started selling the ice. Usually, ice sold for $2 a bag. They were selling it for $12. Very soon a queue appeared. Then the police arrived. Citing price-gouging laws they arrested the men and impounded the truck.
And here’s the kicker: as the truck was towed away the people in the queue applauded the police.
Here are some more posts from the Samizdata archives about how “price-gouging” helps people hit by natural disasters:
As Hurricane Milton makes landfall, a reminder about price-gouging
“The good news,” Cuomo said of the promised 12 million gallons, “is it’s going to be free.”
A Quote of the Day from Tim Worstall
Or check out the entire discipline of economics.
On 14 June last year, just prior to the UK General Election, I noticed parallels between the Labour Party and its stated aims and how matters unfolded after that party won power in 1964 under Harold Wilson.
An important event was the sterling crisis of 1967. And this week, we read of how the yields on UK government bonds (gilts) have soared – which means investors are far less confident in the country’s creditworthiness. UK Chancellor of the Exchequer, Rachel Reeves, now dubbed in certain quarters as “Rachel from Accounts” due to her questionable background details, is in China at the moment (interesting destination), and there is talk of how the UK might need to be bailed out by the IMF as it was in 1976. Even if this does not come to pass, the descent of this government has taken place with tremendous speed. We could be headed for a sterling and government debt crunch; there is widespread and justified anger about its handling of criticisms about the “grooming gangs” saga; the questionable decision to hand over the Chagos Islands in the Indian Ocean to Mauritius looks worse by the day; the government is going after private schools and educational rigor more generally; one in five working-aged adults are economically inactive….and on it goes.
We are not out of the first half of January yet. “Hard pounding, Hardy”, as Nelson said at the Battle of Trafalgar.
“The legitimacy of altering social institutions to achieve greater equality of material condition is, though often assumed, rarely argued for. Writers note that in a given country the wealthiest n percent of the population holds more than that percentage of the wealth, and the poorest n percent holds less; that to get to the wealth of the top n percent from the poorest, one must look at the bottom p percent (where p is vastly greater than n), and so forth. They proceed immediately to discuss how this might be altered.”
– Robert Nozick, noting how the presumption of equality of wealth as a just default position is widely held and rarely challenged head-on.
Anarchy, State and Utopia, page 232. The book’s second section, in which Nozick demolishes egalitarian ideas about equality and what he calls the “patterned” approach to justice in holdings, is in my view the best bit of the book, and enduringly influential on many classical liberals, libertarians, etc, to this day. The book was published in 1974, and Nozick was a Harvard academic at the time. (Proof that the 1970s was in some ways a fertile time for good ideas, and Harvard was in better shape than today.)
“But there is a limit to how much we can gain from a combination of long-term reforms and controlled disruption. The deeper problem with the public sector is not the people who run it but the people who use it. The combination of an ageing population and a stagnant economy means that a growing number of countries can no longer afford the largesse of the post-war era. And the only viable long-term solution to this problem (barring a productivity miracle) is to cut big entitlements rather than to pretend that we can force the public sector to produce miracles. What really needs to be disrupted is not so much the workings of government as the public’s expectations.”
– Adrian Wooldridge.
As most of us are aware the almost all Western governments are living beyond their means. Every year they spend more than they raise and their debts spiral ever upwards. But there is a solution: ask the voters. Here is how it would work:
- On his birthday the voter is asked what he would like the government to spend its money – sorry ill-gotten gains – on.
- The voter gets to select from the departments of state: defence, interior, health, education etc.
- At the end of the month the selections of all the voters who have responded are totted up and government revenues for that moth are divided amongst government deportments in proportion to how many voters have selected them.
At a stroke:
- Spending and revenues are brought into line.
- Voters cannot complain that the government isn’t spending enough on such and such because it is in their power to do something about it.
- If it becomes apparent that a department has too much money (or too little) then that will (one hopes) become public knowledge and voters will change their selections accordingly.
- There will no longer be interdepartmental rows over spending. It is taken out of the hands of politicians.
- Departments would have a strong incentive to keep waste to a minimum. If it becomes known that they are being wasteful, voters are likely to move their money to a different department.
I can see some objections/issues:
- How should voters make their preferences known? In person? By mail? Should the voters get one vote or several? 90% of me wants to spend on defence but 10% wants the money spent on prisons.
- War. If a war starts it could take a while for the state to get on a war-footing. About a month but I would guess there would be provision for such an emergency.
- Publicity. Humans being humans and politicians being politicians, there will be great competition between departments for voters’ favour. Would there be a danger of advertising budgets getting out of hand? If advertising was banned what else might politicians get up to?
- Revenue is lumpy as are birthdays. The government does not raise the same amount every month and birthdays are not evenly distributed throughout the year. This could have some interesting effects.
Will Hutton: “Farmers have hoarded land for too long. Inheritance tax will bring new life to rural Britain”.
“Inheritance tax springs from the universally held belief that society has the right to share when wealth is transferred on death as a matter of justice.”
It is not universal.
“This is not confiscation, especially if the lion’s share of the bequest is left intact.”
It is confiscation.
“It is asking for a share.”
It is not asking.
Someone tweeting under the name of “Lyndon Baines Johnson”, a supporter of Kamala Harris, explains how he would like a Harris administration to deal with technological innovators:
Lyndon Baines Johnson
@lyndonbajohnson
If Harris wins, fairly high on the agenda should be finding new federal contractors so that SpaceX and Starlink are shown the door. -OS
8:05 PM · Nov 3, 2024
For all his grievous faults, the actual LBJ would have known how to describe that proposal in a few choice words. He wanted the Apollo program to succeed.
“The necessity of finding a sphere of usefulness, an appropriate job, ourselves is the hardest discipline that a free society imposes on us. It is, however, inseparable from freedom, since nobody can assure each man that his gifts will be properly used unless he has the power to coerce others to use them. Only by depriving somebody else of the choice as to who should serve him, whose capacities or which products he is to use, could we guarantee to any man that his gifts will be used in the matter he feels he deserves. It is of the essence of a free society that a man’s value and remuneration depend not on capacity in the abstract but on success in turning it into concrete service which is useful to others who can reciprocate. And the chief aim of freedom is to provide both the opportunity and the inducement to insure the maximum use of the knowledge that an individual can acquire. What makes the individual unique in this respect is not his generic but his concrete knowledge, his knowledge of particular circumstances and conditions.”
– F. A. Hayek, The Constitution of Liberty, pages 80-81.
With yesterday’s revolting annual Budget statement from the Labour government still ringing in my ears, I thought a bit about how this lot treats ideas of “merit” and what is considered “unearned” wealth. For instance, one aspect of yesterday’s measures from Chancellor Rachel Reeves is to add a deceased spouse’s pension pot to inheritance tax (threshold starts at £325,000); IHT is 40 per cent. Any money paid out from the pension will be hit, subject to certain conditions, at 45 per cent for top-rate taxpayers – an effective rate of 67 per cent. This sort of move stems from the idea that certain people don’t “deserve” to inherit X or Y, and must pay their “fair” share to the Moloch of the State. I urge people to read Hayek’s masterpiece, not least for its dissection, and demolition, of much of the argument put forward about why certain wealth is “unearned”, and why we should be paid according to some social formula of merit. That way totalitarianism lies.
“In many parts of the country the graduate earnings premium is negative – these local economies are unable to absorb or properly use higher qualified people because of the structure of the local economy.”
– From this essay, “Levelling up: against just “cities and skills”, by Neil O’Brien, who I think is the Conservative MP of that name. I found the link via the trade unionist Joe Allen.
Though I salute Mr Allen’s open-mindedness in linking across the political aisle, I would like to make one observation with which he probably – and his employer the TUC certainly – disagrees: to whit, the fact that there are parts of the country where going to university on average makes a young person poorer is yet another argument against rent control.
Again and again I see the argument that, far from it being a problem that landlords are being driven out of the rental market, it is a fine thing, because landlords selling up will make more homes available. “Home” is a beautiful word, but there are and always will be people who are not looking for a permanent home. Some of this group are students, obviously, alongside those in temporary jobs, those whose work requires them to move frequently – and those who have a choice between staying at home where their degree is useless or moving to some place where it isn’t. A strong rental market allows rural people to try out life in the city, and vice versa for city people. In a society where landlordism is banished and every house is a home, you had better pray that the waiting list to leave your quaint village is exactly equal in length to the waiting list to join it.
Price gouging during disasters is good. It saves lives.
Think of it this way. When the hurricane is on its way do you want people to panic-buy double what they need “just in case”, causing the shops to run out? Why wouldn’t they do that if prices are artificially stopped from rising? Wouldn’t it be better if people limited the amount they bought because “it’s so expensive right now”, leaving more available for others?
When the disaster strikes, would you like businesses and individuals from hundreds of miles away to drop whatever they were doing previously and start transporting emergency supplies into the area affected – and keep doing it until there are no more shortages? Would you like factories hundreds of miles away to shift production to whatever the people in the afflicted area need most? You would? Then let them sell their stuff at a higher price than usual.
Why does it work? Because, as it turns out, the profitable level of a fish stock is above the sustainable level. More fish around, less diesel and time used to catch enough to feed the market. Profits are thus maximised at stock levels substantially above sustainable levels. That means more fish to gawp at while maximising profits.
Or, alternatively, George Monbiot has got the neoliberal capitalist attitude to fisheries entirely and wholly the wrong way around. The reproductive rate of money, within that neoliberal capitalism, is more fish in the sea than there are currently. Therefore, having neoliberal capitalism running the fisheries (some to many fisheries perhaps not all) would increase the number of fish to gawp at. Exactly and precisely the opposite of what George is claiming.
The problem is about George. For someone who keeps insisting that he’s just critiquing the neolberal capitalist attitide to the environment he knows fuck all about the neoliberal capitalist attitude toward the environment.
But then that’s such a strange thing in public intellectuals, isn’t it? Ignorance?
– Tim Worstall
“We have not built a reservoir since 1992 or a nuclear power station since 1995, but we have raised the age of using sunbeds to 18.”
– Daniel Hannan, Sunday Telegraph.
|
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.
|
