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Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]
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I get all sorts of emails, and this one, from a fairly well known money manager in the UK by the name of Terry Smith, is worth reading in full. It is the text of a letter he has sent to the Financial Times newspaper. The FT is behind a paywall so I reproduce it in full:
From Mr Terry Smith.
Sir, I refer to the debate being conducted in the pages of the Financial Times between those who propose further Keynesian measures, such as Martin Wolf (“Struggling with a great contraction”, August 31), and those who do not accept that they will work, such as Wolfgang Schäuble (“Austerity is the only cure for the eurozone”, September 6).
Such so-called Keynesian measures as advocated by, among others, Ed Balls, Samuel Brittan, Paul Krugman, George Magnus and Barack Obama as well as Mr Wolf have not worked to date, and they will not work. Their advocates seem to assume that their repeated failure to solve our economic problems just means that the medicine must be repeated, which reminds me of Richard Nixon’s motto that “if two wrongs don’t make a right, try three”.
I say “so-called” Keynesians because these advocates seem not to realise that Keynes’ theories did not rescue us from the Great Depression. They are also asymmetric in their application of his theories – calling for ever larger deficit spending, having overlooked the bit about running a surplus in a boom. But above all, they do not seem to realise that they cannot work in a period of debt deflation in which a recession is preceded by the collapse of the banking system, as their current failure is demonstrating.
To the ordinary person in the street, the idea that we can rescue ourselves from a crisis caused by excessive borrowing by borrowing even more must seem mad. In this respect they are possessed of far more common sense than those who are currently advocating just such a course of action and purport to be our leaders.
The first step in rectifying this situation should be to make a clear and unambiguous statement about the actual debt the UK is carrying.
To give a lead to this, today we have circulated to every member of parliament a tin can emblazoned with the UK debt figure – £3,589bn including commitments for public sector pension commitments, private finance initiative and banking sector guarantees, so that they can see what it is they are metaphorically “kicking down the road” with their present policies. This, ahead of the party conference season, I hope might spur some considered and honest debate on this issue.
It is time for those who wish to lead us out of this crisis to tell people how bad the current situation really is and the painful remedies which will be needed to remedy it.
Terry Smith, Chief Executive, Tullett Prebon, London EC2, UK
I get the impression that this man is not looking to be elevated to the peerage. Good.
To the ordinary person in the street, the idea that we can rescue ourselves from a crisis caused by excessive borrowing by borrowing even more must seem mad. In this respect they are [he/she is] possessed of far more common sense than those who are currently advocating just such a course of action and purport to be our leaders.
– Terry Smith
When I first saw the headline, I thought this was a touch of exaggeration by the Daily Mail (hardly my favourite newspaper). But it turns out to be fairly solid. Here is an AP version. My apologies to readers as this item is a few days’ old:
Scottish officials say they may take four heavy children away from their parents after warnings to help their kids trim down have apparently failed. The children are aged one to 11. The parents are obese and have three older children who are also heavy. For the past two years, the family has lived in government housing and had their eating habits scrutinized. Last week, officials in Dundee told the family their four youngest children could be taken into foster care or adopted. A government spokesman said they would act in the children’s best interests.
In the U.S., there have been several cases where obese children have been taken into care after their parents couldn’t help them lose weight.
Now, the issue of whether or when third parties – not just states – should intervene if children are thought to be at risk is not an easy line to draw. (It is one of those issues that I find can divide libertarians, such as intellectual property and immigration). But this case does seem a particularly egregious example of state over-reach. There is no suggestion that the parents of these children are cruel, or unpleasant, nor is there any suggestion that the children are unhappy, or held against their will. None of the usual markers of harm seem to apply, unless there are facts of the case that have not been issued for reasons of confidentiality or legal reasons. About the most that might be said is that the elders are not very successful in encouraging their offspring to be fit. And that might be fair, but I tend to regard much, if not all, of the current obesity obsession as another of those moral panics about which writers such as HL Mencken famously wrote.
This is a bad case, and I hope the children can be restored to their home as soon as possible. It seems bizarre, at a time when, in the aftermath of the riots, we are told about the importance of families, that certain people in governments should be so determined to break them up even where the problems do not appear to be particularly severe. If a child grows up with a loving mother and father and happens to be a bit on the chubby side, that is surely infinitely better than a generation of fit young thugs without fathers.
“Scottish Conservative Party set to disband” screams the title of an article…
Well why not? Scotland already has two Mega-Statiist major parties (SNP and Labour) so what need is there for a third? Indeed perhaps a new party north of the border might actually be, you know… conservative! If that comes to pass, perhaps someone might decide England needs a conservative party too because gawd knows it does not have one at the moment.
Nothing has changed from the riots and nothing will.
As usual after such shocking events, we had two or three days of moral clarity where you could get away with saying things that normally you can’t – like pointing out how many people live lives of amoral spoon-fed incontinent idleness.
Then we had the essential moment – known as “the Gitmo moment” – providing a cause around which confused lefties could rally (in this case the harmless but poorly expressed mutterings of a TV historian).
The next step is to draw ludicrous moral equivalences – burning down shops and killing people is, apparently, no worse than wearing a dinner jacket and getting drunk, or fiddling expenses. I don’t often agree with David Cameron but it was good to see him having a pop on that point at the BBC.
Finally you just keep repeating idiocies about how rioters were “deprived” and bringing it all back to “inequality” and such notions. It doesn’t matter how stupid it is if you say it often enough.
This is just how it works. In a few months I bet you’ll be able to call it the Tottenham Spring. We’ll “reach out”, we’ll open some youth clubs, our policing will become even more limp-wristed, vendors of steel shutters will do well, and small shopkeepers will, bit by bit, give up to take up lives of amoral spoon-fed incontinent idleness.
– Samizdata commenter m2p
There was an item on the local London TV news early last night about a bunch of cooks who, when confronted by a bunch of crooks, defended themselves, their restaurant and their diners. Yes, here is the story, from earlier in the month, at the time of those riots. Remember them?
Chefs and waiters leapt to the defence of members of the public enjoying an evening at The Ledbury, an upmarket restaurant in Notting Hill, London.
Thugs and rioters armed with bats and wearing hooded tops forced their way into the two star restaurant before demanding diners hand over their wallets and wedding rings.
But staff and others fought back with kitchen tools before leading customers into the wine cellar for protection.
Later in the evening, the looters returned, and the diners were ushered by the staff to the safety of the downstairs wine cellar. Which seems like a craven retreat, and in a way it was. But the personal cash and valuables of the diners were what the looters were after, and they were again thwarted.
The significance of the TV coverage I saw this evening wasn’t just that all this happened, but that the TV coverage was so sympathetic to the restaurant staff for doing what they did. The Ledbury (which I had never heard of until now) has apparently won some kind of vote of excellence for its food, organised by a restaurant guide, and the general atmosphere radiating from my TV was: hurrah! Good for them, and the perfect excuse to tell the story, again, of those heroic deeds by the heroic Ledbury staff a few weeks ago.
A few further thoughts occur to me. → Continue reading: Praising the defenders of the Ledbury (again)
I am a sarcastic cow, I am used to being a sarcastic cow and I am comfortable being a sarcastic cow. When the time comes to simply recommend an article in the Guardian my non-sarcastic mooing sounds all funny in my own ears. But, here goes: I recommend you read ‘Freedom of information is for businesses too’ by Heather Brooke.
A request by tobacco giant Philip Morris International has reignited concern about the use of freedom of information laws. The data it was interested in was collected as part of a survey of teenagers and smoking carried out by the university’s Centre for Tobacco Control Research.
The UK’s FoI law is meant to be applicant blind. This means anyone can ask a public body for official information and there should be no discrimination based on the identity of the person asking. In the case of scientific research conducted and funded in the public’s name, there is a strong argument that the underlying data and methodology should be disclosed. It is precisely this transparency that grants research reports their status as robust investigations.
It is right to ban the English Defence League’s march, argues Lutfur Rahman, the leader of Tower Hamlets council. How sensible and moderate he is. Observe how he calms the fears expressed by the left wing feminist writer Nina Power that the power to ban the EDL today is certain to be used against other causes tomorrow. Mr Rahman writes,
So while I applaud the Metropolitan police and the home secretary in listening to the many voices from our community in banning the EDL march, I will support the right of community organisations to hold some of the events that Power fears might be banned. However, I feel sure that good sense will prevail, and that the authorities will be capable of distinguishing between community events and demonstrations designed to whip up racial and religious intolerance.
Pernickety people might argue that once the “right” to demonstrate is dependent on your organisation falling within the authorities’ definition of a “community organisation”, then it is no longer a right. Really, though, who can be bothered with such far-fetched ideas? We have the assurance of a local politician that good sense will prevail.
Richard North and Christopher Booker are having a go at the more unpunished sort of looting, by overpaid local council employees. Says North:
Loot a shop, and you go to jail. Loot council tax payers and, if they don’t pay up, they go to jail.
I can’t remember who said it, but what whoever it was (Kingsley Amis?) said was that the rot set in when they stopped calling the Town Clerk the Town Clerk, and started calling him the “Chief Executive”.
LATER: See also this posting, in which trooper Thompson quotes a big chunk from Right-Wing Populism by Murray Rothbard, including this:
Why then did communism implode? Because in the end the system was working so badly that even the nomenklatura got fed up and threw in the towel. The Marxists have correctly pointed out that a social system collapses when the ruling class becomes demoralized and loses its will to power; manifest failure of the communist system brought about that demoralization. But doing nothing, or relying only on educating the elites in correct ideas, will mean that our own statist system will not end until our entire society, like that of the Soviet Union, has been reduced to rubble. Surely, we must not sit still for that. A strategy for liberty must be far more active and aggressive.
Hence the importance, for libertarians or for minimal government conservatives, of having a one-two punch in their armor: not simply of spreading correct ideas, but also of exposing the corrupt ruling elites and how they benefit from the existing system, more specifically how they are ripping us off. Ripping the mask off elites is “negative campaigning” at its finest and most fundamental.
Indeed. I’m not saying I agree with everything in this Rothbard piece, but I do agree with that. But I also believe that if I, and others of my inactive disposition, spread the correct ideas, it is automatic that the kind of people who, unlike me, refer to themselves as “Trooper” are going to want to join in on my side, but more aggressively.
Children will be banned from watching shooting events under Boris Johnson’s Olympic ticket giveaway.
London schoolchildren are eligible for 125,000 Olympic tickets but these will not include any featuring guns, as Games organisers and City Hall fear a backlash from the anti-gun lobby.
The sheer idiocy of this speaks volumes of the rot at the heart of British society and its decadent political class. A different take on this can be found here.
I am now, as if regular readers of my recent stuff here need to be told, paying at least as much attention to the final game, which began this morning, in the England India test match cricket series as I am to such things What To Do About The Deficit. England are already 3-0 up, and are now looking to make it a 4-0 thrashing. This morning England, batting first, made another good start. But then it rained for the rest of the day.
Which meant that the radio commentators and their various guests had to talk amongst themselves, rather than commentate on the mostly non-existent action. And one of the things they talked about was the contrast between the general demeanour and attitude of the two teams, as illustrated by how they both warmed up at the start of the game. Compared to the quasi-military drill in perfectly matching attire that was the England warm-up, India looked, they said, like a rabble, and have done all series. The biggest recent change in how the Indians actually play, they all agreed, is that the Indian fast bowlers are now significantly slower than they were two or three years ago, and several inches fatter.
Why the contrast? Well, it seems that the top Indian cricketers now play too much cricket of the wrong kind – limited overs slogging basically, which encourages run-restricting rather than wicket-taking bowling, and careless, twist-or-bust batting. And they play not enough cricket of the right kind. Hence their arrival in England in a state combining lack of preparation with apparent exhaustion and general lack of fitness. But, you can’t really blame them, said the commentators. The Indian Premier League now pays its players more in a month than cricketers of an earlier generation would ever see in their entire careers.
The reason I mention all this, apart from the fact that I personally find it all very interesting, is that, in among all this cricket chat, somebody said something very Samizdata-friendly that I thought I would pass on. Former England cricketer, now cricket journalist and pundit, Derek Pringle, threw in the following, concerning the impact of the Indian Premier League on the attitude and physical preparedness of the top Indian players:
The IPL has become a bit of a welfare state for them.
You might reckon it odd to compare the predicament of men who are being paid rather lavishly to do too much work, but of the wrong sort, with the very different circumstances of people who are being paid very little by comparison to do next to nothing, beyond go through the motions of looking for work without actually doing it. You might also want to ask whether limited overs slog-fests really are “wrong”. After all, if that’s the sort of cricket that people generally, and Indians in particular, will now pay most readily to watch, what is so wrong about it?
Good points both, but not the point I want to make now. What my point is about the above soundbite is that Derek Pringle was simply assuming, when he said it, that state welfare makes you fatter and lazier and less industrious than you otherwise might have been. Pringle, famously inclined to being a bit of a fatty himself, just knew that we all knew what he was getting at. It didn’t have to be spelt out. Simply: state welfare rots the body and the mind and the soul. Anything else which, arguably, resembles state welfare in its financial impact upon the individuals concerned is likely to do similarly debilitating and demoralising things to those individuals also. If you are one of those eccentrics who still thinks otherwise, the burden of proof is entirely on you to explain your bizarre and contrarian opinions.
The argument that state welfare corrupts – physically, mentally and morally – is not, to put it mildly, new. When the modern British welfare state got under way after World War 2 this argument about the potential impact on its recipients of state money was already centuries old, and it was duly re-presented in opposition to the new welfare arrangements. But, the old argument was dismissed, with scorn, and also with, I believe, much genuine sincerity. These were the days, remember, when the masses of the British people were at a unique summit of mass moral excellence. (Thousands upon thousands of them used to turn up to watch county cricket, in other words the kind of cricket those cricket commentators are saying the Indian cricketers haven’t been playing enough of.) Are you seriously saying, asked the welfare statists, that a bit of help when times are bad is going to turn these good people (good people who had just won the war, don’t forget) into barbarians? Not, as Americans now say, going to happen. Yet, as a crude first approximation, this is what did happen, if not to them then to a horrifying proportion of their descendants.
And before any anti-immigration commenters pitch in, let me answer them with two questions and my two answers. Given the same welfare arrangements but no mass immigration, would there now be similar barbarism? I strongly believe so, even if maybe not on the same scale. Given the same mass immigration but no state welfare to speak of, would there now be similar barbarism? Much less, I think.
Realising that state welfare corrupts is one thing. Taking state welfare away from the millions of people whose entire lives are now organised around the assumption that state welfare will continue indefinitely is quite another, which is why this radical change of opinion has been somewhat subterranean. So far it has had little practical effect. But, as Derek Pringle’s casual aside illustrates, this changed opinion is now well in place, and sooner or later this will surely have consequences.
As has been noted before, the disaster of the eurozone is, in the eyes of some policymakers, as much an opportunity for further pan-European empire-building as it is an occasion for shame and embarrassment. This week, Angela Merkel, German Chancellor, and Nicolas Sarkozy (remember him? He’s the one who married one of Mick Jagger’s old flames), came up with this barnstormer of an idea, in the form of a European-style “Tobin tax” and a form of increased economic central government. It has the ring of inevitability about it.
The problem for the UK is that said tax, which has been assailed by the likes of Tim Worstall before, would apply not just to the eurozone, but to the UK, which is not in the euro. And given the relative size of London as a financial centre compared to Paris, Frankfurt or Milan, guess which place takes the biggest relative hit? You guessed: London. Never mind, of course, that banks that can do so will put some of their activities outside the EU, or that the costs of the tax will be borne by savers, borrowers and users of financial services generally, in the form of lower rates of savings interest – already negative in real terms – more expensive costs of hedging forex transactions, and the like. This is what is known as tax incidence. Politicians are not, as we know, in the business of understanding the Law of Unintended Consequences. Indeed, we might even define today’s political class as people who defy this law.
Of course, Cameron, Osborne and others (but not their LibDem allies) will protest about such a tax on London’s financial sector, but look how far such protests got us before concerning sovereign debt bailouts by the UK. And such men have shamefully pandered to such anti-capitalist sentiment in the past, so there is a sort of brute justice if they fail to prevent this latest move now. Such men, of course, have enjoyed the fruits of financial wheeler-dealing when the going was good, such as financing of the Tory party by the likes of Michael Spencer, the founder of derivatives powerhouse ICAP. (As an aside, I see that the odious Vincent Cable, Business Secretary, wants to slap capital gains tax on housing transactions of wealthy properties if the Tories decide to ditch the top 50 per cent rate of income tax. Even a land value tax is better than CGT, although not by very much. There is no such thing as a benign tax.)
Alas, banker bashing has reached such heights of hysteria that some might even try and argue that such a tax on the evils of speculation is a jolly good idea. It pained me to see that even that otherwise fine book on the recent market disaster by Kevin Dowd and Martin Hutchinson, floated the idea.
Allister Heath weighs on the latest eurozone wheeze. He’s unimpressed, not surprisingly.
Update: Here is a twist on the issue of tax incidence and taxes on companies. Milton Friedman is magnificent.
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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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