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]
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A short item, which takes the breath way, on how the problems of countries like Greece has encouraged the German government to insist that unless these countries are as economically “fit” as Germany is or claims to be, they cannot participate in EU decisions.
Well, I guess such a comment makes it explicit that as far as Germany is concerned, the strong states rule, and the weaker ones should shut up and do as they are told. Sometimes, it really amazes me why anyone ever doubts that this is the consequence of the single currency project. The Greeks, and other such countries, have just had a lot of illusions broken up into atoms.
Update: well, I guess I should thank Glenn Reynolds for the “instalanche” of comments, some of which, I assume, are from the US. Let me consider a few of the points made. First of all, I am not – which seems to be the view of some – defending the Greek state, and by implication, some of their voters. To the Germans, or indeed other euro zone countries, it must indeed be an outrage that a country expects to be able to continue enjoying the luxuries of early retirement, generous welfare and short-work week. If the Germans are irritated about this, they are entitled to be. But you see, this is what happens in a currency union where one bit of it is subsidising another bit. In the US, where the poorer parts get subsidies from the richer or at least not bankrupt bits, the poorer bits are not then told, by their neighbours, to shut up. I am not aware, for example, of a rich state of the US demanding that poorer parts be banned from sending Congressmen or Senators to DC (if you have examples, please let me know). The Germans knew, when they choose to sacrifice a perfectly solid currency – the Deutschemark – in exchange for the euro, that there were risks. Some German politicians may have naively assumed that the less prosperous bits would raise their game, but given the cussedness of human nature, that was not a sure-fire bet. As Michael Jennings points out in the comment thread, Germany itself had the experience of reunification and the problems of integrating the post-communist East into the capitalist West. But at least it had a common sort of political identity. But it is a much more difficult thing for a German politician to demand that a member of a currency union should not be allowed to participate in discussions relating to that currency.
I don’t feel a lot of sympathy for the Greek government, but I don’t feel much sympathy for the Germans, either. They wanted this currency union, and arguably, imposed an unsustainable interest rate straitjacket onto the continent. Much of their political and media elite has invested a huge amount of emotional and political capital into this. They made their bed, now they must lie on it.
I really, really hope that Nick Clegg, leader of the UK Liberal Democrats, does not hold the balance of power at the next General Election, if this Spectator article, “Can Nick Clegg Sing the Blues?”, is a guide (the article is behind the Speccie’s subscription firewall).
Mr Clegg, the article says, is trying to reach out to supposed Conservative voters by arguing for tax cuts. But as is clear, the cuts are only for low-earners and not for anyone else (I certainly do support tax cuts for the poor, in case anyone brings this up). He wants, for example, to impose a so-called “mansion tax” on properties worth £2 million or more and wants to raise the level of capital gains tax from its current 18 per cent to 50 per cent – a huge jump – on those whose annual income is £150,000 or more. In other words, CGT will skyrocket for the sort of entrepreneur who can, or hope, to make a decent capital gain on a business that has been launched. As the supply-side school of economists likes to point out, once depreciation for wear and tear and inflation is taken into account, a 50 per cent CGT rate can in fact be more like 70 per cent, largely nullifying the gain and likely to hammer entrepreneurial activity. Given that top earners are already due soon to be paying 50 per cent income tax, not to mention other tax hikes, the process will drive yet more folk abroad and deter wealth creators from coming into the UK. The likely upshot of this will be a less active stock market – which will hit pension fund investments – hardly a great idea from the LibDems’ point of view – and likely as not, erode, rather than acquire, more revenues.
There is also a quote, on page 14 of the magazine, that also proves to me that Mr Clegg is a numbskull: “The Tory inheritance tax cut, he said, would help people who don’t actually spend their money, they just squirrel it away'”. In other words, if you have wealth, either from your own efforts or from inheritance, and save it – you are a parasite, a dead weight. Mr Clegg clearly thinks that saving is bad, that “hoarding” of money in a bank account, or whatever, is a terrible thing, and that we should all be spending our money like mad down the High Street. Maybe he thinks it would be better if trustafarians were all down the dog track or the casino rather than sitting on a portfolio.
It is almost hard to summon breath to point out that it is precisely the high level of consumer spending, funded by debt rather than by real savings, that in part explains much of the current economic mess. We need to encourage, not discourage, savings. And given that as folk get richer, they typically invest and “hoard” a relatively high percentage of wealth, it is folly to hit them since they are a key source of capital for future investment. Folk on low incomes, by contrast, have low savings for the rather obvious reason, of course, that they struggle to make ends meet with what little income they have.
In fact, if the Tories have any sense – not much unfortunately – they should boldly confront the insane, Keynesianism-on-drugs mindset that says that spending is always a good thing and that savers are all rich, selfish bastards who should be taxed. Many years ago, FA Hayek likened this form of economic thinking to quackery. As usual, the great Austrian economist was being far too polite.
I have been rushed with work lately – hence no update on the blog yesterday by me or indeed, by anyone else. But hey, it is Friday, and time for a spot of photo nonsense.
I am not sure I would want to play chess with any of them, mind. (H/T, David Thompson).
It is an interesting argument made here that so-called “instant books”, written in the aftermath of some crisis or big event, can be easily overturned by subsequent events, debate and analysis. Quite true. And it is also true that the internet, blogging and online debate is intensifying this process of making a book look dated within months of publication. But it seems to me that in the article I link to, the author of the item is making some mistakes about the book, Meltdown, written by Thomas Woods about a year ago.
For a start, I think that it is worthwhile that some authors, as soon as the hue and cry went up about “greedy bankers”, sought to challenge the establishment “narrative”, assiduously supported by parts of the mainstream media, that says that the meltdown in financial markets somehow proves that capitalism is flawed, needs more regulations, controls, etc. Getting a book out as quickly as possible makes sense because a book is a talking point. Even if some of its facts are challenged or overturned, the point is that the author gets invited to give talks, has to take questions, can be asked for more details, etc. A book, in other words, is a good starting point. No book, no launch party, no nothing.
And challenging the established narrative any way possible is important. The usual line is what I hear from David Cameron, Barack Obama, and of course our own government. To hear the contrary view, that what happened was primarily caused by state-established central banks distorting price signals of interest rates, and hence fuelling an asset bubble, is much rarer. For example, the other day I walked into Waterstones, and in the section on economics and current affairs were books such as Gillian Tett’s Fool’s Gold, or books with such racy titles as How I Caused The Credit Crunch. In these cases, the books will typically treat the issue as one where the crisis is caused by “greedy”, or naive bankers, who are treated as little different from wild animals, or caused by the supposed dangerous complexity of trading technologies.
The author of the article criticising Mr Woods’ book, Roger Donway, argues that Mr Woods’ book is flawed in many ways, as it, for example, does not give much of an idea of what caused the crisis beyond the standard “Austrian” analysis of what happens when central banks flood the world with fiat money. But why should Mr Woods write a 1,000-word tome to spell out the causes of the crisis in every last detail? The purpose of the book, as is pretty clear to someone like me who knows a thing or two about economics, is to spell out to the general reader what the broad, free market take on the crisis is. I happen to think that Mr Woods summary of the “Austrian” view on what money, banking, the business cycle, etc, are, is simply brilliant. There can never be enough books spelling out why, for example, it is necessary to understand the role of money, and what money is and more, what it is not.
Mr Donway just assumes that folk who might pick up Mr Woods’ book off the shelves are already well-versed in their von Mises, Hayek or Rothbard. But that is hardly likely. The sort of person who steps into a bookstore, and wants to read something about the current financial mayhem, and who might be the sort of person who doubts the current wisdom but who is not an economics specialist, is ideally suited to read this sort of book. Yet Mr Donway writes:
“Chapter 5 also presents material familiar to anyone who has perused some works of Austrian economists, particularly the works of Murray Rothbard. And this material is even less informative about the meltdown of 2008. Entitled “Great Myths about the Great Depression,” the chapter actually takes very brief looks at the depressions of the nineteenth century and the depression of 1920–21, as well as devoting 11 pages to the causes of the Great Depression. And how does an examination of the Great Depression help explain the collapse of 2008? “In both cases, an inflationary credit boom brought about by the Fed’s lowering of interest rates led to massive resource misallocation and a distorted capital structure.” (106) That’s not very helpful.”
The events of previous depressions/recessions will always be different in certain ways from what is happening now, but that is nitpicking. The point of why Mr Woods talks about the short-lived recession of 1920-21 (solved quickly without a Keynesian orgy of money-printing) and the decade-long stagnation in Japan in the 1990s, say, is to shed light on what ought to have been the approach of policymakers in the recent past. To say that an examination of the Great Depression gives no insight into what is happening now strikes me as a case of trying to shout debate down. After all, one can be sure that the advocates of Big Government and Keynesian demand management will call history in aid if they think it bolsters their case.
This paragraph is perhaps a bit fairer:
“Now, some critics might blame this tendency to abstractionism on Woods’s “ideological” economics, but I do not. If he believes in the pure Austrian theory of boom-and-bust, fine. Let him present his analysis using that theory and let his explanation be judged by its adequacy, not by its origins. But in order to judge the adequacy of Woods’s case, we need to hear him make it against those economists who understand his theoretical approach but disagree with it or at least disagree with his application of it. It is no help to hear Woods rebut mainstream economists who do not take Austrian economics seriously.”
Quite possibly true. I know for a fact that people operating in the free market school of thought differ about quite a lot of things, such as whether fractional reserve banking should be illegal, whether state central banks are an evil to be abolished or institutions to be placed under better, tighter rules, etc. But Woods cannot be expected to go into vast reams of text to debate every real or potential objection from such quarters; and in any event, he does, I think, point out the differences that exist between say, the Chicago school – in some ways closer to the Keynesian one – and his “Austrian” point of view.
Of course, there is a need – and this is where I think Woods’ book falls short as a piece of work – in showing exactly what practical steps governments could take in putting financial systems on a sounder footing. There is, in the UK for example, a move by economists such as Kevin Dowd and the folks over at the Cobden Centre to flesh out in detail as to what an “honest money” banking and financial system would actually look like. And as I have previously mentioned on this site, Professor Dowd has sketched out how, for example, a failed bank could be restructured and bankrupt banks be let go without crippling an economy.
And Professor Dowd has, or is about, to release a book on these matters. But for all that the Woods book may be a bit lacking in some respects, I do believe he did me a favour in helping to marshall some of my own thoughts about how to think about the credit crunch. I am glad he did that, and most impressed that he did so in such a short space of time, by focusing on the core ideas at stake.
This is splendid almost beyond words.
Now go make your own!
Hat tip to John Farrier
Iowahawk has delved into Shakespeare and uncovered
this little known masterpiece.
Enjoy!
“In the 19th century, the British would have answered Mr Riley-Smith’s question “What has trade to do with human understanding” very readily. It has a great deal to do with it, we would have said. Commerce is the main means of peaceful intercourse with other people. It is the circulatory system of the world. It is part of the constitution of liberty which, as the author rightly says, we exported to America. If we have forgotten this, it is we, not the United States who are – both metaphorically and literally – the poorer.”
Charles Moore, writing about what he regards as an interesting but in some ways wrong-headed book about America by Tristram Riley-Smith.
Well, the days are getting longer, I have even seen quite a bit of the yellow thing in the sky, and I was woken up this morning by some randy pigeons on my terraced roof, so let’s take it away, Mr Tom Lehrer:
Spring is here, a-suh-puh-ring is here.
Life is skittles and life is beer.
I think the loveliest time of the year is the spring.
I do, don’t you? ‘course you do.
But there’s one thing that makes spring complete for me,
And makes ev’ry sunday a treat for me.
All the world seems in tune
On a spring afternoon,
When we’re poisoning pigeons in the park.
Ev’ry sunday you’ll see
My sweetheart and me,
As we poison the pigeons in the park.
When they see us coming, the birdies all try an’ hide,
But they still go for peanuts when coated with cyanide.
The sun’s shining bright,
Ev’rything seems all right,
When we’re poisoning pigeons in the park.
Lalaalaalalaladoodiedieedoodoodoo
We’ve gained notoriety,
And caused much anxiety
In the audubon society
With our games.
They call it impiety,
And lack of propriety,
And quite a variety
Of unpleasant names.
But it’s not against any religion
To want to dispose of a pigeon.
So if sunday you’re free,
Why don’t you come with me,
And we’ll poison the pigeons in the park.
And maybe we’ll do
In a squirrel or two,
While we’re poisoning pigeons in the park.
We’ll murder them all amid laughter and merriment.
Except for the few we take home to experiment.
My pulse will be quickenin’
With each drop of strychnine
We feed to a pigeon.
It just takes a smidgin!
To poison a pigeon in the park.
Jack lost his iPhone last night. He has therefore been stuck at home on his Playstation 3 all day.
– An (early twenties, male) customer overheard in a coffee bar in the East End yesterday afternoon. I can understand how the world outside the front door is a scary, scary place if it is just you, completely unaugmented.
The late Chris Tame, whom I used to assist in the running of the Alternative Bookshop and of the Libertarian Alliance, used to say, of blogging, that it was “here today and gone tomorrow”. Well, indeed, most of it does pretty much fall off most of our merely mental radar sets by around the middle of the following week, but most of it is still there, and if you want to remember and refer back to an ancient internet essay or blog posting, you can usually find it. And actually, as the internet gets older, what is striking is how much better it remembers things than did the old print media, or even than did the pre-internet apparatus of print-based scholarship. Why? Basically, because anyone (you don’t have to spend the entire day in some newspaper library in North London) can type a few vaguely remembered words or phrases into Google, and up it comes. So long as you have even a vague recollection of whatever it was, then you can dredge it all up again, and tell the world all about it, again.
I was reminded of all this by a posting yesterday by Mr Eugenides, which is basically a quote from something written in 1995, which is about – please forgive how self-referential this is becoming – how the Internet wouldn’t ever amount to anything:
Lacking editors, reviewers or critics, the Internet has become a wasteland of unfiltered data.
The author now admits he was quite wrong. He has had to, however much he might have wished that his unwise words could just have been forgotten.
The central point is that the power of the internet to entertain, inform, and by and by to change the world for the better, is not derived from the average quality of the average internetter, but from what the best internetters manage routinely, and from what us more routine internetters manage at our best. And that power just grows and grows.
The internet adds up to a brilliant bunch of reviewers, a brilliant bunch of critics, and a brilliant bunch of editors, brilliant meaning whatever you think brilliant means. It corrects errors. It draws your attention to things that on your own you would have entirely missed. It plants numerous flags and banners in that “wasteland”. It filters data relentlessly, to suit all intellects and tastes. A “wasteland of unfiltered data” is exactly what it is not.
It helps that almost all persistent internetters, as a natural consequence of what we do and of how others respond, also learn and learn.
Which reminds me, I must dig up an ld posting that Mr Eugenides did a few months back about what a useless git Richard North is. Ah yes, here. This took me about ten seconds to find. I wonder what Mr E thinks about that now.
My old friend, Andrew Ian Dodge, now residing in the chilly US northeastern state of Maine, has a book out, And Glory, which is set in a near future where the EU superstate is in full power (not that far off, then, Ed). He mashes up a a bit of political speculation, SciFi and good rollocking drama to make an interesting read. (As if my reading list was not long enough, aaagrrrh).
I have been thinking about who else has written books where the EU is treated as a sort of malign feature of a novel. One that springs to mind is Andrew Roberts’ novel, written a few years ago, called The Aachen Memorandum. I am a fan of Roberts the historian, so this hopefully would be a good read. Sometimes the EU crops up in the science fiction books of Ken Macleod, as in Cosmonaut Keep. And I recall that Peter Hamilton made some glancing, and unflattering references, to the EU in this recent novel, which was quite enjoyable, albeit with a rather unpleasant central character.
Of course, writing any speculative novel about the European Union carries the risk that reality keeps overtaking the story line. I mean, I wonder if either the two Andrews mentioned here or Ken would have envisaged the idea of a German politician suggesting that Greece flog off some of its islands to pay down its debt?
And as an aside, Henry Porter, the British journalist and scourge of this government over its dreadful civil liberties record, also had a novel out recently that I can recommend for mixing a powerful message and a cracking good storyline.
If commenters can think of other novels where there is an EU angle, let me know.
Oh Jesus wept, just put the leadership of the Tory party out of our misery and get it over with. The ‘secret weapon’ of the Tory Party is a pro-Euro corporatist whose ability to alienate actual conservatives has been proven every time the bastard has rolled out over the last couple decades.
The Tory party is facing a widely detested and demonstrably failed government and the fact they are not forty points ahead in the polls shows just how far they have their heads up their own collective backsides… and now, just to dispel any lingering doubt, they dust off Ken Bleedin’ Clarke. Unbelievable.
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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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