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Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

Steve Baker MP quotes von Mises in the Commons: “There is no means of avoiding the final collapse of a boom brought about by credit expansion …”

Yesterday, there was a mini-rebellion in Parliament, to be precise in one of its Committee Rooms. Britain’s (increased) IMF subscription was being discussed, and although it got through, there was a little flurry of excitement, as Guido reported:

Something very rare happened in what is usually the dullest of committees. A dozen or so Tory non-members of the committee came and spoke against affirming the instrument. Government whips cajoled the pliant Tory and LibDem members of the committee to vote to affirm the instrument while Tory MPs spoke from the floor against it. Promising new boy Steve Baker and backbench eurosceptic Douglas Carswell were among those who spoke against affirming the instrument.

You can now read what was said in Hansard.

When these kinds of things are argued about, everything depends on whether the contrariness on show is a genuine argument that we should switch to an alternative and better policy, or merely grumbling. If all that is happening is that people don’t like whatever it is, what with them not having created the problems (or so they say) with their decisions, and what with all the cuts they are having to put up with now, well, frankly, that doesn’t count for very much. If the powers that be are able to say: Well, what would you do that would be any better? – and if you don’t then have an answer, you might as well not have bothered. All you are saying is: This hurts. And all that the government has to say in reply is: Yes, we hear you, we feel your pain, but we are going to do it anyway, because despite all the pain, we remain convinced that this is the best thing to do.

Scroll down at Hansard and you can read, in particular, what Steve Baker MP had to say. The thing about Baker is that he really is arguing for a paradigm shift in economic policy thinking. He even quoted a chunk out of Human Action, which I think I will quote here, again:

The wavelike movement affecting the economic system, the recurrence of periods of boom which are followed by periods of depression, is the unavoidable outcome of the attempts, repeated again and again, to lower the gross market rate of interest by means of credit expansion.

There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” (Human Action, p. 572)

Baker is not just saying: this is a crisis. Everyone knows that. He is also saying: and we need to have the crisis, now, all of it and get it over with as soon as we can.

Hayek also got a mention, as did Jesus Huerta de Soto, who gave the Hayek Memorial Lecture last October.

This is the kind of politicking that is capable of having actual impact. Not now, and certainly not right away, but … in the longer run. In the longer run, ideas can change.

LATER: The Cobden Centre blog now has a more user friendly version of Steve Baker’s words, here.

Pointing the finger at strikes in China and in Britain

The Prime Minister of China has just been on the television news (more on the story here) telling “Britain” (by which he seems to mean the British government) not to indulge in “finger pointing” about China’s human rights record. He loves Shakespeare, he said. Do any of China’s critics know anything about Chinese literature?

It’s an interesting idea, that you need to acquire a love of Chinese literature before you can reasonably complain about circumstances like this (just lately linked to by Instapundit):

… Workers complained they were forced to stand during 12-hour shifts with only two toilet breaks, forbidden to drink water while on the job.

They also charged that the factory, operated by Simone Ltd., was feeding them blackened rice and other substandard food, for which deductions were made from their wages. “The Korean management treats us less than human beings,” said one worker. “The male managers walk into female toilets any time they please; we can’t contain our anger any more.” …

But it is not enough of an explanation of such events to say that the people of Guangdong don’t like being horribly treated. My question is: how come they now feel able to be so angry? I mean, it’s not like they have never been maltreated before.

Answer:

Long-term social trends and the problems of authoritarian rule explain much of the restiveness, but there is another principal reason.   Employees these days have much more bargaining power.   Back at the Simone factory in Panyu, management said it would fire those who did not return to work.   That threat used to be effective, but not now.

Why not?   For several years, Guangdong has been short of help.   Some residents have become relatively well-off and no longer need mind-dulling employment in factories, something evident in Shenzhen, the booming city bordering even-more-prosperous Hong Kong.

It sounds as if finger pointing by the likes of David Cameron won’t be necessary to make China’s bosses, political and economic, start to become a tiny bit nicer, year on year. Supply and demand, of and for labour, is now working that trick.

The Forbes piece, with its headline about “Conflict handbags”, implies that soon there may be calls for boycotts of handbags made in China. But is it not the willingness of richer people to buy such stuff that is bidding up the price of labour in China, and making such things as the denial of toilet breaks so unsustainable?

Meanwhile, where is the voracious demand for the services of Britain’s public sector workers, who are also threatening strike inaction? The government is going to stop! State teachers will stop teaching! Here is a case where a strike is being triggered by a fall in demand for the relevant labour. The paymaster is feeling the pinch, and wants to cut their pensions. I wonder what the Prime Minister of China thinks about that? Seriously, I would like to know this. Even better, I would like to see him doing some finger pointing. That would be a real laugh.

I don’t know how many illusions Britain’s state pen-pushers and button-pushers have about how loved they are by the rest of us. When we encounter them we tend not to discuss any feelings of rage towards them that we may be engulfed by, which is all part of why we often get so enraged with them. On the other hand, they talk about the “front line” services that they supply, like they know they are in a war, rather than serving anyone besides their bosses. Their calculation has to be that the government needs them, in order for the government to go on being the government. But, the threat by them to stop the government … spending money, won’t necessarily come over as much of a threat to the nation as a whole.

But those state teachers might also want to be a bit careful. If they go on strike too enthusiastically, they might find that people might work out how to get along okay without them, and maybe with humiliating speed.

Examples of spectacular historical ignorance

It has emerged that the Provisional IRA, rather than its deniable offshoot the South Armagh Republican Action Force, was responsible for the 1976 Kingsmills Massacre. If you do not know about that event, the grim story is here.

On 5 January 1976, the 10 textile workers were travelling home from work in the dark and rain on a minibus in the heart of rural County Armagh.

….

A man asked their religions. There was only one Catholic left on the bus. He was identified and ordered away from his Protestant work mates. He was able to run off.

The lead gunman spoke one other word – “Right” – and the shooting began.

Mr Black was the only one to survive.

It seems almost indecent to let such an event be the starting point for a more general line of thought, but that is the way the mind works sometimes.

I had remembered the Kingsmills massacre. The last question put to the men and the awful choice of what to answer when you did not know whether the terrorists asking were Loyalist or Republican had stuck in my mind. Today I have advanced a little further in knowledge: I now know that analysis of the guns used confirms that it most likely was the IRA after all. The thing is, though, that my level of knowledge, which I tend to think of as average, is actually way above average. I have known for three decades that this massacre occurred. I knew that a few days previously five Catholics had been murdered and that the Kingsmills massacre was carried out in reprisal for this. And here’s the point, I know that there are Catholics and Protestants in Northern Ireland, Republicans and Loyalists, and could give you a basic account of which side is which and how that situation came to be.

My own background is Irish Catholic. My family loathed the IRA. So I grew up paying a slightly above average amount of attention to Northern Ireland and I noticed over the years that plenty of people in the world literally did not know that there were any Protestants there. These people thought that that it was a case of “the English” occupying Ireland. Partisans on the Republican side also spoke thus, but selective rather than complete ignorance was their problem, as it was for partisans on the Loyalist side. The way in which those soaked in the history of a conflict can blank out the other side and talk of “the people” when they mean “our people” is tragic but a quite different phenomenon from that of ordinarily well educated members of society who simply have no idea – but not, alas, no opinion.

I have explained the existence of a Protestant population in bad French and worse Italian. I remember reading of angry editorials in American newspapers of thirty years ago that appeared to be unaware that the Republic of Ireland was an independent state. Colonel Gaddafi of Libya – now there’s a name from the past, wonder what happened to him? – at one time was visited by a delegation of Protestant paramilitaries who convinced him that this was not a straightforward anti-Imperialist struggle and got him to cease sending arms to the IRA.

I think a few of the commenters to this article still literally do not know of the existence of the Protestant population. If they do know of it, they ain’t showing it.

The ignorance that is rational for individuals can do great harm.

What are your experiences of spectacular historical ignorance? What effect does that ignorance have? To count, examples should not be the ignorance of the illiterate and semi-literate. There are millions on Earth who do not know the world is round. That is sad but not interesting. What is sad but interesting is the state of those for whom some basic historical fact is an “unknown unknown”, to use Rumsfeld’s formulation.

On second thoughts, why confine ourselves to history? A Scottish friend of mine relates that some of people she talks to in her part of the world literally think that the financial crisis of 2008 arose because bankers took “all the money” for bonuses. They think the government could get all the money back and make everything OK again, had it but the willpower. Discussing the matter, she modified that slightly, and said that if these friends and acquaintances were ever to articulate the idea I have just described they would probably see that it could not be correct, but they never have articulated it. This is in a Labour-voting but by no means deprived area near Glasgow, but I would not bet on the proportion of people thinking thus in my Tory part of Essex being much different, for all that ‘banksters’ keep the local economy going.

These holes in peoples’ knowledge will have their effect in the end. One could call it trickle-up ignorance.

Toby Young on increasing the supply of good education

Ever before I wrote this, I was on the lookout for Fixed Quantity Of… theories, and even more since then. Usually these theories are fallacies. Often, changing how something is done, and in particular changing the rules or the overall setting within which something is done can quite dramatically change, for the better or for the worse, both the quantity and the quality of whatever is being argued about.

Here is another such theory/fallacy, the Fixed Quantity of Education fallacy. Toby Young takes aim at it here. He and some friends of his are setting up a “free school”. Their critics in the state education sector object, because this new school will suck educational excellence out of their schools and make it available only to a privileged few.

In particular, it is said that this new school will draw middle class children away from state schools, to the educational detriment of these schools. State educators who talk like this sometimes make it sound as if most of the good teaching that goes on in their schools is done by middle class children rather than by educationally expert adults. Perhaps they have a point.

But the amount of satisfactory educating going on is very variable, depending on how relaxed or restrictive are the rules about how it may be done and who may do it. (For instance, if it were forbidden for parents to educate their children at home, that would, I believe, sharply diminish the supply of good education.) Toby Young says that the real reason the detractors of the educational venture he favours are so vocal is that they fear being shown up as bad educators, by a new school that creates a vast new surge of educational excellence, thereby proving that they could be doing this too. No upper limit on the total amount of available education is stopping them, only their own stupid educational ideas and habits. I am sure that he has a point.

God’s Idiot gets an articulate kick in the cobblers

The dependably dismal Archbishop of Canterbury, a man who thinks his god favours a massive force backed regulatory state which takes one person’s wealth implicitly at gunpoint and gives it to someone else, get a well phrased hammering by Graeme Archer:

It is obscene, Dr Williams, that some people choose not to work, and are better off as a consequence than those who do not make such a choice. Such people are less deserving than others. If there are no jobs available, what are all these Polish men doing on this bus, at 6.30am? They deserve more than to be viewed as taxable cart-horses.

And you? On an average salary? Trying to raise a child and thinking about having another? Coming to the conclusion that you might be able to balance commuting against mortgage costs, if you moved to an unpopular area farther out than you’d like? It must be hard for multiple houseowners such as Mr Cruddas, or the Archbishop in his palace, to understand: this is life, for most of us. And we’re not fascists because we make a distinction between the deserving and the undeserving when we see where our tax is spent.

Read the whole thing. My only regret is Archer does not follow the moral argument to its logical conclusion.

Samizdata quote of the day

I tend to have a “half empty” view of the world – but even I do not believe that the British population contains no pro freedom people. Indeed I believe that there are millions of pro freedom people in Britain – and basically the British book trade was telling us all to bugger off, that we were not welcome in the book shops.

Well we got the message – it is not all “the internet” that is the reason for the decline of the British book trade, basically they were telling non-socialists that our custom was not wanted.

Paul Marks

“Government” money

As a BBC news announcer gave out the round of story headlines this morning on the television, I heard this particular classic of its type connected to this story about extremism and universities:

“Government money is no longer going to be given to Islamic extremists”.

First of all, there is, as readers of this blog know, no such thing as “government money”. All money spent by government is, despite what some might believe, owned by you, the taxpayer, or lent to it, by other people. Second, it is not just appalling that money levied on pain of imprisonment (taxes) is then transferred to people who want to impose a particular worldview on their fellows; it would be just as bad if the money were to be given to the forces of sweetness and light. No such groups, whether it be Islamic Jihad, The Women’s Institute or the Worshipful Company of Bald People, should receive a penny from the taxpayer. End of subject.

Sound and fury, signifying nothing, fortunately.

The ineffectiveness of modern government is a great blessing. It means that proposals like this – “Cameron-backed report to protect children from commercialisation” – will almost certainly come to very little.

For the record, like Tim Worstall, I think T-shirts for five year olds that read ‘Sexy Tart’ are not the most tasteful of fashion statements. My opinions are rather more hostile than that, as it happens. But my hostility to chav parents is mild compared to my hostility to the governing classes, who first bred the problem (by ensuring that two generations have grown up who had no need to be respectable), and now step forward to “solve” it by giving themselves more power.

Mercifully, the modern Big State is made of fat, not muscle. Listed below are the key proposals of this report, and next to each what will actually happen.

• Retailers to ensure magazines with sexualised images have modesty sleeves. Measurable, enforceable, provides work for council busybodies. Might happen.

• The Advertising Standards Authority to discourage placement of billboards near schools and nurseries. Discouraging noises will be made.

• Music videos to be sold with age ratings. Measurable, enforceable, work for busybodies. Will be about as effective as the age ratings for computer games and films. (I have nothing against manufacturers giving an age rating for a product voluntarily, by the way – but see the final sentence of this post about “voluntary” self-regulation.)

• Procedures to make it easier for parents to block adult and age restricted material on internet. Could be dangerous, since procedures to make it easier for parents to block adult material on the internet are necessarily also procedures to make it easier for governments to block any material on the internet – but fear not, they can’t afford the people who can write the program.

• Code of practice to be issued on child retailing. OMG, a code of practice!

• Define a child as 16 in all types of advertising regulation. Presumably they mean “under 16”. If the current regulation allows scope to define a child as “under 13” this might make a difference. Or it might not. Probably all concerned will work very hard to find all the clauses and sub-clauses in fifteen different laws that refer to this, harmonise them all, then sit back and contemplate the beautiful consistency of the result. No one else will notice.

• Advertising Standards Authority to do more to gauge parent’s views on advertising. Colourful website to be set up. Two comments will be left a week, in Chinese.

• Create a single website for parents to complain to regulators. Colourful website to be set up. 45,000 comments will be left a week, often in something resembling English. Government will promise to clear backlog by 2021.

• Change rules on nine o’clock television watershed to give priority to views of parents. Will be acclaimed by all until someone who is not a parent threatens to sue.

• Government to regulate after 18 months if progress insufficient. Although I do think it most unlikely that the government ever really will send out inspectors to measure the amount of black lace on pre-teen bras, I still find this type of sickly-sweet concealed threat, so common nowadays, nauseating. “Voluntary change is so much nicer, don’t you think? So much more meaningful. But, of course, if you don’t change voluntarily…” It always reminds me of Dolores Umbridge early in her career.

Samizdata quote of the day

Never mind he is debasing the currency and starting us on the road to runaway inflation, is functionally indistinguishable from Tony Blair and his ‘savage cuts’ are a fiction simply parroted by a mainstream media seeming unable to do simple math… he has ‘Ease and authority’

Well, phew, good to know! I guess we’ll be ok then!

– Perry de Havilland commenting on a Telegraph blog article claiming that “Ease and authority make David Cameron hard to beat

Guido nails it again…

… no, I am not talking about his, er, other talents but rather the clarity of his economic analysis

Ladies and gentlemen, Guido presents the Great Inflation Swindle, we have just seen the second-biggest one-month increase on record and a record high in core CPI yet the Governor of the Bank of England has told us for 3 years inflation was a blip and that the real danger was deflation. It was a deliberate lie to excuse the most reckless monetary loosening since… well actually monetary policy has been too loose globally since back to 1998 when Greenspan “saved the world” after Long Term Capital’s financial theory geeks had a close encounter of the reality kind. The loosening up of monetary policy to smooth the aftermath of that hedge fund collapse told financial risk takers to rack up the risk because central banks would step in if you got in to trouble. Everyone was “too big to fail”. Central bankers turned capitalism from a system of profit and loss into a system of private profits and socialised losses. Taxpayers had their chips put on the gambling table without even being asked.

Read the whole thing.

An accurate appraisal of “Vince” Cable

The Business Secretary, and member of the Liberal Democrat Party, Vincent Cable, likes to let us know he supposedly predicted the recent credit crunch (I am not sure he did, actually), and still manages to be presented as a sage voice on current affairs. Never mind that many of his views are nonsense.

Anyway, the Daily Mash satirical website has nailed him.

Martin Kettle, ever-helpful to those in power

To argue for controls over the internet may not be cool, but it’s right

Investigating Chris Huhne is disproportionate