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It has often been pointed out that whilst government spending is seen as a proper way to express compassion we (meaning those of us who believe that government is too big) can not win.
The above was brought home to me, yet again, yesterday. I watched a person being interviewed by a television presenter, and the person was requesting yet more government spending.
A decade ago a new government scheme was set up to pay for medical cover for children from poor families not already covered by Medicaid (the ‘working poor’). As welfare state schemes tend to do, the scheme has greatly grown in expense and yet ‘essential needs’ are not being met and so the person was on television (with the full support of the television interviewer) saying that the budget suggested by President Bush was not enough.
That is right, the wild spending George Bush (a man who gives the impression that he has never come upon a welfare state scheme that he did not like) is being attacked for not spending enough taxpayers money.
The man who was speaking was Republican Governor Perdue, from conservative Georgia, who was in Washington DC (with other State Governors) to ask for yet more taxpayers money. After all Georgia has implemented the scheme ‘aggressively’ (this was assumed to be a good thing to do) and, therefore, was facing a serious financial problem. As the people talked film was shown of a poor little child getting medical care (subtext – if you oppose the scheme you are a monster).
And the interviewer? A presenter for Fox News (the only non leftist television network). If the ever-more-government-spending-on-welfare-state-schemes position wins by default (for there were no arguments) when the people in the conversation are a Republican Governor from a conservative State and a presenter from Fox News then what hope is there of victory, what hope of rolling back government? At present not much.
One can trace the roots of the problem as far back as one likes. Some trace it to the error made by the German Samuel Pufendorf and other scholars, in confusing taxes and government spending with the virtue of charity (as if there could be such a thing as compulsory charity). FA Hayek even traced the problem right back to human nature evolving when humans lived in hunter-gatherer packs, so that there is always a danger of civil society (or the ‘extended order’) breaking down under the pressure of our near-brute instincts – the atavistic instinct for ‘fair shares’ dignified as the doctrine of ‘social justice’.
However, be at that is it may, the belief that government spending = compassion is clearly deeply rooted. Is there anything that we can do?
Well we can argue against ever bigger government and we can try and get these arguments to the public. But many people before us have tried to do this, over the decades, and they have failed to roll back government or even prevent its growth (although we do not know how bad things would be if they had not tried). And we can do all we can to help people in need, but all the efforts of charity (or ‘benevolence’, or the ‘independent sector’ to those who have been taught to think of ‘charity’ as a dirty word), have not convinced most people that ‘helping’ is not a proper role for government.
Perhaps only the bankruptcy of the Welfare States of the modern world will make people think again. It is possible that even bankruptcy will not make people turn against statism, perhaps ‘pack instincts’ will take over totally with total collectivism and the break down of civil society. However, if we keep on arguing as well as can and trying to get our arguments before people as much as we can, then perhaps people will consider the path of freedom, the path of voluntary interaction that is civil society, when social and political bankruptcy finally occurs.
225 years ago today Parliament voted a resolution to end the war and grant the colonies independence. A month later Lord North faced a vote of no confidence and stepped down.
It seems to me any old place can declare independence, it is when your would-be rulers accept it that matters.
The British Council announced that ten offices in Europe would shut so that funds could be diverted to the Middle East and Asia. Part of this diversion is admirable: an attempt to undermine the attraction of the Salafist ideology for impressionable youths. Scepticism rises over the small sums allocated in comparison to the rich charities that fund madressehs in all Muslim countries.
Martin Davidson, director general designate of the British Council, said it was “time to tackle the new challenges the world faces.”
These included “building trust with the Islamic states and China,” Davidson told the Press Association.
The council would scrap “traditional arts activities” in Europe, such as orchestral tours and artistic commissions, in favour of projects “designed to prevent Muslim youths from being indoctrinated by extremists sympathetic to al-Qaeda,” the Times said.
This project is coordinated by a new leader of the British Council, who also stated that they would be working with their European partners to promote common values. The British Council belongs to EUNIC, the European Union National Institutes for Culture, and this new organisation was launched on the 21st February 2007 (pdf file). Is it any coincidence that, as soon as the British Council is submerged within a pan-European body, its focus is aimed at the Middle East and China? Even the small details begin to back up Mark Steyn.
I will be going to live in China shortly, however I intend to backpack around South East Asia for a few months before settling in Beijing. I do not really wish to lug my two hundred and fifty or so CDs around Asia. I am not a masochist. Also, I would hate to lose them. Yet I would also hate to be without my music – so I plan to buy a portable MP3 player and copy all of my CDs on to that. However, I do not know which model to buy, so perhaps a knowledgeable reader could help me out.
Firstly, I should mention that I do not want an iPod. I do not like having to use iTunes to plonk songs and data on the device, and I have heard a lot of stories about reliability problems – units dying just after the warranty has run out, unprovoked formatting of memory and that kind of thing.
I want a player that is compatible with Windows and has a relatively simple procedure for the addition of files – as I may be doing a fair bit of that at internet cafes and places where the software available is limited. Ideally, I would like to be able to rip a CD straight to the player without having to store the music files on a computer in the process. I am not awfully concerned about a video playing ability or an especially fancy display for viewing photos, as I will primarily be using the unit to listen to music. I would like the unit to have at least 30 gigabytes of memory, and I do not want to spend much more than 200 pounds or US$400.
A tech-savvy friend told me to check out the Creative Zen Vision M and the Toshiba X-series. Does anyone have any comment on these units, or any other recommendations?
Everything I have heard and read tells me that this kind of thing used to be true in Britain.
I live in a very small street with only eight houses, but delivery vans come down here at least twice a day. Fed Ex and that other company. People have a lot of parcels delivered by not the Post Office these days. The internet brings us gifts every day.
They bash on the door a few times, then put the parcel down and walk off. One time, a delivery man hid the parcel under our doormat. I guess he thought it was more valuable-looking than usual (true- it was Lego/s). Nobody expects parcels to be stolen from doorsteps. Everywhere I’ve lived in England, that would be insane. I never minded about crime when I lived in the UK, but that was before experiencing life in a place that feels this safe. It’s wonderful.
I heard a story from my brother-in-law about Nottingham in the thirties. Apparently, in a very poor part of town and at a very poor time, as was the practice in such places in those times, a man used to come round with a big leather bag, collecting rent, in cash. This man was not liked. People went hungry to ensure that he got his cash. But it never occurred to him or to anyone that this was a stupid thing for him to do, because it was not stupid. Anyway, one day, he left his bag in the middle of the street for some reason, full of cash, unattended. A while later he came back and collected it, untouched, all the money still there. Those were the rules.
But stories like that about long-ago Nottingham are far easier to dismiss than the contrast that Alice Bachini-Smith describes from her own direct and hugely contrasting experiences. To tell me that I am wrong about 1930s Nottingham only involves saying that the story has become exaggerated over the years, as maybe it has. To tell Alice that she is wrong means telling her that she is wrong about her own experiences. It means calling her a liar, pretty much.
As to why things worked like this in most or even all of Britain in the past and still do work like this in the more law abiding parts of America, well, that is another argument. The reasons are quite complicated, I would say. (For instance, I have long believed architectural design to be part of the story.)
I recall publishing an interesting piece for the Libertarian Alliance by the historian Stephen Davies entitled Towards the Remoralisation of Society about these kinds of arguments. This was published in 1991 but since then the story in Britain has surely changed rather little and if anything has got somewhat worse. (Here and here are some more recent writings by the same author, the former being a book that you have to buy, but the latter being a blog posting that you can actually read.)
Today I visited the consulate of an Asian nation to apply for a tourist visa. When observing the visa application fee, I noticed that those travelling on a U.S. passport must pay almost three times more for a visa to enter this particular country. I believe many other countries impose an extraordinary surcharge for visa applicants travelling as U.S. citizens, too. Talk about American exceptionalism.
Still, I expect Americans are used to this sort of arrangement. When it comes to a whole suite of multilateral projects, the rest of the world expects the American taxpayer to cough up a hugely disproportionate share. When the American taxpayer wants to travel to the rest of the world, they find themselves paying considerably more for an entry visa to many countries as punishment for their poor choice of nationality.
Being a U.S. citizen must rankle at times.
“…and the nominees in the category of Best Fashionable Issue in a Guilt-Supporting Role are….(pause)…World Poverty (applause)…AIDS (applause)…the Iraq War (bigger applause)…Africa (applause)…and Saving the Planet (huge applause).
And the winner is…..(rustle, rustle, rustle)…Saving the Planet!! (more huge applause, whoops, whistles).
Sadly, the Planet can’t actually be with us tonight because its currently on location shooting another movie with Al Gore. But it is going to speak to us now by live satellite link.”
PLANET: (by satellite feed) Oh…oh…this is just so…I don’t know. What can I say? I’m overwhelmed, you know. I mean, I’m up there with World Poverty and AIDS, I mean, WOW, what competition!! I’m just….I don’t know, let me tell you that I am one thrilled, happy, proud biosphere right now. But, you know, this Award isn’t for me. It’s an Award for all the brilliant people who made it possible to save me, all those NGOs and…especially Al Gore…and let me tell you, I am so in awe of that man. I am totally, unbelievably excited to be working with him again. He is my saviour. Absolutely, you know. And I’m accepting this for him as well. What else can I say? I need a drink. Somebody get me a drink (burst of laughter, close up of Jack Nicholson busting a gut). But, seriously, I really want to thank the Academy and I also want to thank my agent, Murray Felberman….I love you, Murray, I love you man. So, I got to get back to work now but I just want to say that I love you all and when I get back to LA we’re going to have a big party (blows kiss).
There is a pull-out supplement in the latest Spectator, entitled “The Connoisseur’s Guide to the Cricket World Cup 2007”. Peter Oborne is very gung-ho about cricket just now (no link because the bit I am about to quote is stuck behind a registration wall – I read it on paper):
Never have there been so many outstanding international teams. Go back to the previous ‘golden age’ before the first world war and there were just three Test-playing nations: England, Australia and South Africa.
So far so routine, this being from a piece by Oborne entitled “A new golden age”, which he does explain. Basically, not only are there more good national teams now, and more excellent players, but they also play cricket that is entertaining to watch, unlike what was played a generation ago. But then comes this kicker, and in brackets if you please:
(Actually there should have been four: until 1914 the United States was well capable of competing at the highest level, and a cricket tour of the United States formed the background to Psmith Journalist, one of P. G. Wodehouse’s best novels. Unfortunately, the Imperial Cricket Conference, which governed international cricket, excluded America because it was not part of the British empire, so it went off and played baseball instead. This snub to the US at such a promising stage of its cricketing development, is one of the tragedies of history.)
I did not know that (more about this sad story here). I am not used to feeling spasms of hatred toward those who presided over the British Empire, although I often learn about things that make others understandably angry about these people. But I did when I read that. We have talked here before about cricket in the USA, but I do not recall this particular circumstance being mentioned by anyone. Apologies if someone did and I missed it. For while I would not put this particular tragedy of history down there with the Slave Trade and the Holocaust and the depredations of King Leopold, Stalin, Mao, Pol Pot and the rest of them, this certainly does seem like a definite pity to me.
Talking of cricket, and what with cricket’s World Cup fast approaching, Samizdata’s travel correspondent Michael Jennings has been, well, talking of cricket. He has done a podcast with Patrick Crozier, about Australian sport in general, and Australian cricket in particular, what with cricket being the biggest sport in Australia. Did you know that Aussie pace ace Brett Lee (who will sadly be missing the World Cup because of injury) does commercials on Indian telly, and has had a pop hit in India? You do now.
And for more about how sport and politics intersect, do not miss this sports report by Guido Fawkes.
In the course of my day job, I have to give my boss a round-up of the Sunday business pages to keep track of all the latest news and features. Not surprisingly, the Sundays are full of stuff right now about Britain’s ‘super-rich’, such as those folk brokering lots of mergers and takeovers at the moment (see my post below defending private equity). Well, the socialist looters among us will be thrilled to know that the enemies of personal enrichment are alive and kicking. Here is a job ad in the Sunday Times:
“HM Revenue & Customs. Make a real difference, take our information to a new level” (I liked that bit)
“Attractive six-figure package – central London”
I am sure it is very attractive.
“You probably know HM Revenue & Customs as the people who collect tax but there’s far more to it than that”
I bet there is. Go on, we are dying to know.
“We play a vital role in law enforcement and protecting society”
Yep. When Gordon Brown fucked the UK pensions system, it was all about protecting society.
“90,000 work within HMRC, and we have over 40 million customers (taxpayers, claimants and others)
“Customers” – that is beautiful. And we ‘customers’ of VAT, income tax, inheritance tax, stamp duty, national insurance (tax), etc, are being cared for by 90,000 caring, sharing, hugging, cuddly people. Terrific.
“In every sense we have a huge responsibility for society and the economy, so customer focus sits at the heart of everything we do”
I do not know who writes these adverts, but the Comedy Central Channel is always in need of new blood. Hire this person immediately.
When I read the following column by Will Hutton, lambasting private equity firms for daring to take over big UK companies like supermarket J. Sainsbury or whoever, I laughed out loud. Here is his lead paragraph in Friday’s Guardian:
It is time to come to the defence of the public limited company, one of the great Enlightenment gifts to western civilisation. Increasingly capital, in the quest for higher returns to make vast personal fortunes, is going private to escape the demands of public accountability on stock markets. If uninterrupted, the long-term adverse consequences of this privatisation of capital for our economy, society and democracy will be profound.
Rubbish. Firms that are floated on the London Stock Exchange, Nasdaq or the Martian 250 are privately owned, Will. They are not owned by the state. True, limited liability laws, as the libertarian writer and friend of mine, Sean Gabb, likes to point out, present serious issues in terms of the gap between ownership, responsibility and control (I wrote about this topic a while ago). But to argue that private equity shops like Apax, Carlyle or Texas Pacific – those evil Amerikans – are taking what should be ‘public’ into grubby ‘private’ hands is economic illiterate nonsense. Firms exist to make a profit, Will. As Milton Friedman trenchantly put it without hint of apology to the gods of ‘social responsibility’, a company’s job is to make a profit for their owners, not to further whatever corporatist/fascist/socialist/ist agenda that happens to attract the gaze of Guardian editorialists.
Why the current wave of hysteria about private equity? It is being fuelled by two things: fear and envy. Fear of the power of these sometimes shadowy firms to buy up famous companies with great wodges of debt finance, or leverage, as the finance geeks put it. Envy, because of the large bonuses that the private equity honchos pay themselves and the often high profits they make in turning firms around. And of course no story about private equity can be written without referring to the Masters of the Universe lampooned by Oliver Stone in Wall Street or portrayed in books with such objective titles like Barbarians at the Gate.
In the main, what these firms do is target cash-rich firms that are run by often lazy executives who have presided over crappy business decisions. Take the meltdown of Marconi a few years ago, one of Britain’s most famous companies. That was a listed company. The destruction of value and jobs in that company remains, in my mind, one of the most disgraceful episodes in British corporate history and who knows, it might have been saved from making big errors had a private equity fund been in charge, rather than deluded executives. Private equity firms helped stymie Deutsche Börse’s foolish bid for the London Stock Exchange 2 years ago, and have turned around businesses. They typically buy and hold a firm for 5 years or more, take a hands-on approach to running firms before spinning them off to another buyer or floating them in an IPO. So Will Hutton should spare us sentimental guff about how limited liability firms floated on the stock exchange represent the perfect model of doing business or something that Adam Smith or Voltaire would exalt. They are merely one of the many ways in which economic activity manifests itself. As interest rates rise and the economic cycle turns, some of the excesses of leveraged buyouts will fade and private equity transactions will decline. No doubt Will Hutton will forget everything he has written and go back to bashing listed firms for their “short-termist” fixation with pleasing shareholders, or whatever.
As mentioned several times in these pages, by the way, one additional reason why listed firms go private is because their bosses prefer not to have to put up with onerous reporting requirements under US and other laws, like the onerous Sarbanes-Oxley rules. If Hutton or other big government advocates are worried about the migration of companies off the listed stock market, they might like to remember that point.
Right, my rant of the day is over. Enjoy the rest of the weekend.
Update: have slightly amended the text about Marconi, just to reinforce the point. One commenter, Bryan Appleyard, has argued that firms become “cultural” forces, as if released from the laws of supply and demand. I have heard some odd attacks on private ownership and M&A before, but that is a new one. Companies that have been taken over by private equity include the Automobile Association, Kwik Fit, Debenhams, various property firms, HEA, the US health chain, and many more. I don’t really see how the cultural issue makes a bit of difference to the folk who work in them or buy their products.
I’d also add that I think some of these private equity deals are in danger of coming unstuck, and no doubt much gloating and gnashing of teeth will occur when or if this happens. It is partly a function of low interest rates and the impact this has on asset prices. Monetary growth is strong at the moment and this is one of the ways in which money supply growth comes out. Another lesson from Friedman to remember.
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