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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Jeremy Warner, a columnist at the Daily Telegraph, has a short, thumb-sucker about what happens if Scotland becomes independent, as many Scots (and many English voters and taxpayers) want. Given that the Euro is a partial disaster, no sane Scottish politician would want to campaign to join it, at least not yet. The idea of Scotland staying in the sterling zone is also bit, well, problematic if Scotland breaks free of any fiscal union with the English, or if the English decide to give the Scots the elbow. Could Scotland go back to an old, Scottish currency of its own and would that be viable?
Of course, the land of Adam Smith and David Hume could adopt a gold-backed currency and set a magnificent new trend, but given the socialistic nature of most Scottish politicians seeking independence, that does not seem very likely, but you never know. I always felt that if the SNP wanted to really pull a trick, they should seek to turn Scotland into a sort of northern Switzerland.
Here is an old essay by Lawrence White about Scottish banking.
I listen a lot to Radio 3, the classical music channel, especially first thing in the morning. This inevitably involves listening to BBC news bulletins, which can be quite an ordeal. This morning, as my brain surfaced into consciousness, I heard a strange item, about how the government intends to switch the subsidies it gives to the British movie industry towards more popular movies, presumably away from whatever unpopular movies government subsidies had hitherto been encouraging.
Two questions immediately present themselves.
First, how does the government expect to be able to foretell which films will be popular, before they are made? Many very highly paid, very clever people routinely fail in this task, despite such people entirely concentrating (in extreme contrast to people run governments) on trying to be right about such things. What makes our government suppose that it can do any better than such persons?
And second, are not “popular” movies the exact sort of movies as would be encouraged in a totally free market? So what is the point of such subsidies? Would it not be more sensible simply to get rid of them altogether?
This seems to be the story that my half-awake mind latched onto this morning. For once, I agree with Ken Loach, who appears briefly in the video report. This is indeed typical Tory crassness. Many “mainstream” movies, or at any rate movies intended to be maintream, fail. But, and here I presumably do not agree with Ken Loach, all other government movie subsidies are also crass.
It is surprisingly easy to get the sign wrong when reasoning about quantities. Consider this old riddle:
Three ladies go to a restaurant for a meal. They receive a bill for $30. They each put $10 on the table, which the waiter collects and takes to the till. The cashier informs the waiter that the bill should only have been for $25 and returns $5 to the waiter in $1 coins. On the way back to the table the waiter realizes that he cannot divide the coins equally between the ladies. As they didn’t know the total of the revised bill, he decides to put $2 in his own pocket and give each of the ladies $1.
Now that each lady has been given a dollar back, each of the ladies has paid $9. Three times 9 is 27. The waiter has $2 in his pocket. Two plus 27 is $29. The ladies originally handed over $30. Where is the missing dollar?
To get the missing $1 in the question we have done this arithmetic: 10 + 10 + 10 – 1 – 1 – 1 + 2 – 30 = -1
The correct arithmetic is: 10 + 10 + 10 – 1 – 1 – 1 – 2 – 25 = 0
Positive numbers represent payments from the ladies to the restaurant, and negative numbers represent money received by the restaurant. The result should obviously always come out to zero. That +2 should be a -2. Okay, there is a 30 where there should be a 25 as well, but only because the +2 yielded an intermediate result of 29 which is close enough to 30 to cause confusion.
This getting the sign wrong is the same mistake that means Tim Worstall has to point out that jobs are a cost. The new widget factory will create 1000 jobs, we are told. If it produces 1000 widgets per year, that means we get one widget per man-year of time. The man-year of time is a cost. If we could somehow arrange for the widget factory to create only 100 jobs for the same output, we would have just as many widgets and 900 man-years left to spend on some other useful thing. We would be richer.
This mistake crops up in trivial ways all the time. My friend recently gave up full-time work to look after the children for various financial and logistical reasons. Think how the economy is losing out, she mused. Not only am I not producing widgets, I am not paying the nursery workers or buying train tickets for my commute. Well it is true that the widgets my friend used to make are no longer made, but the nursery workers do not count: the same amount of childcare is being done as was being done before. It is not correct to add the childcare previously done by the nursery worker to the childcare now done by my friend. At worst there is now an unemployed nursery worker who will go and do something else instead, but that is just a market optimising everyone’s activities to match the level of demand. The train tickets were just part of the cost of getting the widgets made.
Ah, train tickets. We are going to get a new high speed rail link between London and Birmingham. The government is going to ‘invest’ £32.7bn in order to reap up to £46.9bn of ‘economic benefits’. I wonder how many of these benefits have the wrong sign. Counted among the benefits are “hundreds of jobs”, but these are already included in the cost figure.
Also counted are ticket sales. Which makes sense if the ‘investment’ was really an investment. But invest here really means to steal from the British public £32.7bn so that they can then pay, say, £40bn for train tickets in exchange for £40bn worth of train travel. I make that -32.7 – 40 + 40 = -32.7. Where is the missing £32.7bn?
Author’s note: It seems that we have started Monday in full “let’s shoot at Cameron” mode today. Well, it is still the game shooting season.
The comments from UK prime minister David Cameron, saying it would be wrong to scrap the UK top income rate of 50 per cent on incomes of £150,000 a year or more (which when other changes are taken into account, means a marginal rate of more than 60 per cent), are typical of this regime. The government knows that the tax rate is well on the wrong side of the Laffer Curve, but this, remember, is a regime that cares with almost pathological zeal about the image it projects. The key is to show that those evil, high-earning bastards (like the sort of people who start businesses and run them) take their “fair” share of the current pain being inflicted in the name of deficit reduction.
The Tories played a high price for an inept general election campaign that required them to ally with the Liberal Democrats, a party full of people whose hostility to entrepreneurship and wealth creation is even more severe than it among parts of the Labour Party. And this hostility to high earners comes particularly ill from politicians, such as Mr Cameron, who have enjoyed the benefits of a rich inheritance rather than having to get their hands dirty by creating a business from scratch. Very ill, indeed.
As I commented on previously, David Cameron wants shareholders to vote on directors’ pay packages. Another problem with this occurs to me.
Right now I can value a company on its past performance and what I think its future performance will be, and part of this evaluation comes from my opinion of the decision-making abilities of the people in charge. If I know who they are, and am confident that they will hire the right people into the right positions, I might value the company more highly.
If shareholders make decisions I have the problem that the performance of the company depends on who the shareholders are, and I do not know who the other shareholders are.
In the specific case where shareholders can vote on directors’ pay, if we assume that the highest pay attracts the best performing directors, then the best performing companies will end up being the ones with the least left-wing shareholders.
Says David Cameron:
Government can’t tell people what they should be paid but…
His excuse for meddling is that there has been a “market failure”, as indicated by a Guardian article that says that FTSE 100 directors’ pay increased by 49% last year. And that is not right. People just will not stand for this sort of thing. What about the shareholders? The board should be forced to let them vote on pay and termination packages, he thinks, otherwise it is just crony capitalism and stealing from shareholders.
It is perfectly obvious that all of this is factored in to the share price already, and perfectly obvious that there are no principles on display here. From Cameron’s Tory party we get the same envy politics as from the other parties. But I repeat Perry.
The maths doesn’t add up; this is just sinking capital into a loss making project. If you’re going to use the power of the state to do that, then you shouldn’t be surprised that this country is getting poorer.
– Steve Baker MP denounces the plan for a new stretch of high speed rail, quoted (behind a registration wall) at the Financial Times.
I make this today’s QotD here not in spite of Guido having already featured it as his quote of today (and maybe also of the next few days) but because of this. Baker’s soundbite is getting around. Good.
Lots of Americans who read Samizdata but not Guido, and who are also confronting idiot plans to waste their money on high speed rail foolishnesses, will now also read this soundbite. Good again.
Meanwhile, as the FT’s headline proclaims, “economists insist” that this piece of Keynesian pump priming that won’t should go ahead, damn the expense. Well they would, wouldn’t they?
Nicholas Wapshott, a columnist and book author about Reagan and other historical figures, has seen the film, “The Iron Lady” (about Margaret Thatcher). I am going to see the film this evening with my wife and two friends, both of whom are pretty big fans of the lady. Wapshott, writing over at Reuters, hated the film. (Reuters carries signed columns these days, and its writers can be far more open about their biases, which is all to the good).
“But it is the chilling image of a once dominant leader reduced to a fumbling, mumbling old crone that is the movie’s main theme and, while it may pass muster as a sly piece of brutal political theater, as a record of Thatcher and her many achievements, both for good and ill, it is a pitiless, poisonous travesty. Streep has lent her extraordinary acting skills to perhaps the most shameful and cruel piece of political revenge ever to have made it to the screen.”
“Would Henry Fonda have volunteered his name and faultless reputation to “The Deranged Mr. Lincoln”? Anthony Hopkins dignified Oliver Stone’s somber “Nixon” by trying to get beneath the skin of the paranoid president brought down by his private demons. Even Josh Brolin in Stone’s hilarious “W” made America’s most contentious president in recent times a likeable, surprisingly complex eldest son yearning to show his father he was worthy of winning the White House.”
Another paragraph from later in the review:
“It is in the context of Thatcher sharply reducing the size of the state that the violence between picketers and police and the poll tax riots that punctuated her reign can be best understood. There is a high political price to be paid for redrawing the boundaries between the private and public sectors, and for deliberately provoking a recession, in the face of well organized opposition. In “The Iron Lady,” the newsreel shots of cars burning and mounted police beating miners with batons are left unexplained.”
Wapshott’s review is interesting because, as I noted a few weeks back when discussing a review I read in the Spectator, some reviewers from the left have had their brains scrambled by a film that makes them sympathise with a person who has lost some of her mental powers.
So, having read this review, I am still going to see the film with an expectation that this will be an interesting production. For the subject of this remarkable person continues to fascinate, a fact no doubt given heightened interest due to how, for example, the disaster of the eurozone has given some of her old skepticism about the hubris of Eurofederalism new relevance. Her old preaching about the importance of thrift, saving and hard work is hardly irrelevant.
The changes that Margaret Thatcher wrought in the UK are profound, but it is also worth pointing out that she fell short of what she might have hoped for on a number of fronts. The state continues to take a huge chunk of our money; our higher education system, much of the media and chattering classes are reflexively anti-capitalist and at odds with some of the key features of Western civilisation. Even today, there are those who pine for the old, brutal certainties of Soviet-era collectivism. And from a libertarian/classical liberal point of view, the Thatcher era disappointed: no real change to the Welfare State; erosions of certain civil liberties; imperfect privatisation; missteps on Europe (such as, arguably, the Single European Act). Welfarism and the associated creation of an underclass of feral, uneducatable youngsters, was not really addressed during her time in office (but then again, it has not been addressed for the past 20 years, hence the kind of violence that hit the UK last summer).
And yet those of us old enough to remember what a mess Britain was in during the 1970s, with its hideous inflation, endless strikes, shabby goods and services, eroding willingness to confront foreign aggressions and general crapness, cannot fail to be struck by the scale of what was achieved in Thatcher’s term of office. In the private sector, the union closed shop is no more; inflation, while still a serious problem (as this blog often points out), is not in the double-digit levels it used to be. Some of the old, inefficient state-run industries have been put into mostly private hands; the City of London, despite some criticisms that can be made of the “Big Bang” deregulation, is unquestionably one of the greatest financial hubs on Earth. And consider this detail although it comes across as a bit crass at times: even a state broadcaster such as the BBC has a show called “Dragon’s Den”, which is about would-be entrepreneurs pitching for venture capital funding on TV. Such a celebration of business would have been unthinkable on such a channel 30 years ago. Mrs Thatcher told the British that it was okay to make the most of yourself. For all her faults and errors, that is one of the “vigorous virtues” (to use a term from a book on Thatcherism by Shirley Robin Letwin) that endures.
And to call oneself a socialist is still, let’s not forget, not nearly as easy for a politician to do today if he or she wants to get elected. Somewhere during the 80s and 90s, I think, that term was discredited to a significant degree. Not just by Thatcher, granted – the fall of the Berlin Wall and the associated discrediting of Soviet-style central planning did for that. But her relentless attacks on socialism and central planning, and her championing of the free market, played a significant part.
Here is a good book on Mrs T by Claire Berlinski, published some time ago. Recommended. Another book worth checking out is the new opus on the history of the Conservative Party by Robin Harris. Charles Moore, whose biography of Thatcher comes out after she dies, has a good column up at Vanity Fair.
Anyway, I’ll write about my own impressions at a suitable point.
For me, by far the worst aspect of the recent re-trial of the Stephen Lawrence murder case has been the fact that it demonstrates the dangers of the decision, by the former Labour government in the UK, to end the old double jeopardy rule. Some of the perpetrators of the crime may now be behind bars, but the wider issues worry me.
The writer Brendan O’Neill, a Marxist who writes at at the online journal Spiked, sees this in class terms:
“It is clear from the orgy of post-conviction self-congratulation amongst the chattering classes (Dacre says yesterday was ‘a glorious day for British newspapers’) that the trial of Norris and Dobson was a political trial. It was a showtrial, or at least a showy trial, which was relentlessly used to advertise and entrench the morality of the new political elites. Just because Norris and Dobson are lowlifes, whom no one will much miss when they are banged up, doesn’t mean we should give the nod to this bending of the justice system to the whims of the cultural elite.”
And another:
“It is fitting that the Lawrence case should end with a political trial, because this was the most cynically exploited and politicised murder in living memory. Lawrence was not the first young black man to have been murdered by racists, nor was he the first black murder victim to have been failed by a seriously botched police investigation. But he was the first black murder victim whose tragic demise was cynically milked by the cultural elite and used as the lynchpin of a moral crusade against Old Britain and its foul, backward inhabitants. In a triple whammy of murder-milking, Lawrence’s death was used by the elites to demonise the white working classes as the new ‘brutes within’; to redefine racism as a disease of the brain rather than as a relation of power; and to dismantle long-standing legal principles that were once seen as central to the justice system.”
He’s got a point, although I would add that, not being as het up about class as Mr O’Neill is, I don’t see the disgust that many feel about race-related murders as some sort of ruling-class plot to stamp on lots of white proles. There is more than just a whiff of a new victimology here of the sort that far-right groups like to pander to.
There is real danger in ending the DJ principle, as it means the Crown Prosecution Service will not be under the same pressure in future to get all of its legal and evidential facts lined up as strongly as possible when bringing a case for trial, because it knows there will always be a chance that if it does not get a conviction on the first occasion, it can always have another crack at it later if something new turns up. It is a bit like European Union referendums: if the voters don’t give the “right” answer the first time, they can always be polled again. (As argued by a commenter on Tim Worstall’s own post on the issue).
A real concern for me is that the original case is over 18 years old. That is a long time and all kinds of issues about memory recall arise. Like I said, I don’t doubt that the guilty persons are the scum that they are but there are broader issues of due process of law at stake.
Here is another look at double jeopardy. And there has even been a film made using the title, Double Jeopardy. The CATO Institute has written on how this issue plays out in the US legal system.
…the phrase that Geoffrey Howe used when discussing the best policy for Liverpool in the 1980s?
Yes, that’s right: the word “managed”. It is not for the state to decide where people should live or where they should do business and certainly not for the state to use violence to force them to do so.
Dan Mitchell, of the CATO Institute and an excellent defender of those much-maligned tax havens, has a list of predictions for 2012 about the global scene. I agree with all of them apart from the sports one. Here are mine:
Obama will be re-elected by a whisker, but the GOP will cement its control of Congress. Hopefully, a credible, free marketeer Republican will be chosen in the next election who does not carry some of the baggage of Ron Paul regarding his more unusual supporters or his flaky views (in my opinion) on foreign affairs. But in fairness to Paul, his achievement in getting the libertarian message out there on issues such as the economy, role of the Fed and the bailouts will continue to resonate, for which he deserves great praise.
Ayn Rand’s Atlas Shrugged will continue to sell lots of copies; Detlev Schlichter will continue, hopefully, to spread good sense among the financial community and among some policymakers.
China’s property market and wider economy will slow down markedly, though I think it will avoid a hard landing. I am not sure that the country will fully float the yuan in 2012, although it should do so.
The UK coalition government will struggle on, although at least one high-profile Lib Dem minister will resign. I hope it is Vincent Cable, who is an idiot.
Brazil’s economy will continue to grow rapidly. The Latin America economy will gain momentum, apart from such wrecks as Venezuela.
The London Olympics will go off largely without incident and as predicted, the British taxpayer will be paying for it for many years. Boris Johnson will try and milk it for his own political purposes, probably with some success.
Sarkozy will lose the French presidential elections unless the economy improves. The French National Front will again get a lot of votes.
Mobile technology will continue to change the banking industry.
Italy’s public finances will remain a mess. And yet in spite of it all, the northern part of Italy will continue to be the rich, beautiful place it often is, confounding some of the doomsters.
Greece will leave the euro; possbily one more country may do so. Turkey’s efforts to join the EU will continue to founder.
The issue of the “education bubble” will remain one of the biggest domestic policy screwups in nations such as the UK and US. Policymakers will tinker with it.
Cheap flights will remain one of the main positives about living in Europe.
Pope Benedict’s failing health (he looked absolutely shattered in his Christmas address) will become more of a talking point.
AGW alarmists will continue to lose ground. A major politician in a big country will take on the Green lobby. (Well, we can hope so).
There will be continued big advances in areas such as nanotech and medicine, mostly shockingly under-reported.
Parts of Africa will get more prosperous.
Commercial space flight will loom even larger as a reality. Hooray!
Piracy in the Indian Ocean might abate as countries adopt harsher methods to deal with it. More merchant vessels will be armed or escorted by vessels that are as insurance premia adjust.
Argentina will occasionally make sabre-rattling remarks about the Falklands, which will be largely ignored.
England might actually do quite well in the European Championships soccer tournament; England’s cricket team should have a decent year. People from Northern Ireland will continue to win lots of golf majors. Roger Federer might – as he has shown from recent form – win Wimbledon again, confirming he is the greatest sportsman of our time and the most famous Swiss person in the world.
Lady Gaga will start dressing demurely as a way of shocking her fans (I am one of them).
The quality of driving in Malta will continue to get worse.
Latin will make a comeback as a subject in UK state schools.
Finally, more of a hope than a prediction: Hollywood will make a decent hard science fiction movie this year and Ipswich Town will avoid relegation, just.
Happy New Year to you all (apart from the trolls).
A reminder of earlier dramas in London and surrounding parts this year:
A court on Wednesday sentenced a rioter who was caught on video pulling a man off his scooter during the summer riots to almost six years in jail.
The footage of Ryan Kitchenside, 18, chasing his victim before yanking him to the ground during the August riots in Croydon, appeared on video-sharing website Youtube, leading to his eventual identification.
Equally depressing is how other rioters joined in to help, as in to help Ryan Kitchenside.
It won’t end up as six years, but it will still be something. I recall reading elsewhere, somewhere, that the regular criminals are beating up rioters in prisons, because regular prisoners don’t like their own neighbourhoods being trashed either, and because regular prisoners are having to be moved around to accommodate the new arrivals.
Read the story and view the video here.
Here is the same video at YouTube, with added sound. That video looks like it was done by a human, rather than any CCTV machine. I am not YouTube savvy enough to find out who held the camera and what the story was there. Anyone?
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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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