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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“If you wanted to fly and there were no supervisory authority in the airline industry and no regulations enforcing safety standards, you would be very reluctant to fly fledgling airlines. You would prefer the established ones that had the track record and the reputation. So a complete lack of safety regulations in the airline industry would favour established firms, making the entry of new ones impossible and killing competition and consumer choice.”
Raghuram G. Rajan and Luigi Zingales, from page X (in the Roman numeral segment) of “Saving Capitalism from the Capitalists.” Published in 2003.
This is an interesting defence of government-imposed safety standards. I am not wholly convinced by this line of argument; it is, for sure, an interesting way of trying to show how government regulation actually stimulates rather than restricts entry into a particular line of business.
My take is that if a fledgling airline, say “Ultra-Cheap Airlines Inc.,” can persuade investors and others to get it started in business with a few aircraft and so on, then the staff on the aircraft – such as the pilots – will not set foot into an aircraft if they fear that safety has been compromised, or if the aircraft are poorly maintained. Pilots are not usually self-destructive, as far as I can tell. In fact, a debutant airline business would bend over backwards to show customers that it had set high standards, get consumer watchdog organisations and other certification providers to give it a “seal of approval”. What the authors of the quote don’t seem to understand is how the “established” airlines got to be in that positions in the first place. Presumably, they had to start by persuading a highly nervous customer base that flight was safe, or at least, not lethal.
And of course, if the standards imposed by regulators are particularly onerous, then it is hard to see how a small business operating a few aircraft could afford to compete with the big boys. Regulations are a form of barrier to entry, much in the same way that extensive licensing of doctors is designed, quite deliberately, to regulate the number of people working as physicians.
This book is generally pretty good, however; it is interesting to read this book alongside the Martin Hutchinson/Kevin Dowd book about financial markets that I quoted the other day.
“So 2011 is the year of the “beneficial crisis”, when the EU will try to exploit short-term economic hardship in order to eliminate the powers of national governments and to create a new pan-European political structure. If it succeeds, it may go on to become a great world power. If it fails, it will start to revert to a collection of nation states.”
– Peter Oborne
He makes a persuasive argument that as far as the architects of the EU superstate were concerned, the sort of crises we are living through – such as the Irish/Greek debt problems – are not problems for the eurozone, they are actually very useful stepping stones towards creating their own new version of the Holy Roman Empire, except that unlike the HRE, the new state will be one run on corporatist, heavily regulated, lines.
To hang your head when you are not guilty is an immoral act.
Matt Welch, over at the Reason Hit & Run blog, comes across this piece of nuttery from the land that gave us Dan Ackroyd and John Candy. How sad and oppressive that nation appears. Of course, there is no reason for anyone else to gloat: in Britain, we have more than our fair share of censors and wannabe controllers of supposedly offensive messages.
Canada does seem to be prone to a lot of this sort of nonsense. Mark Steyn, a Canadian national now living in New Hamshire, has had his problems with self-appointed guardians of what is considered to be acceptable to say and write.
My old man, when in the RAF in the 50s, once nearly emigrated there to serve in the Canadian air force. You might now be reading me with a Toronto or Vancouver dateline. Oh well, Dad chose to move into farming instead.
Erratum: I previously said John Belushi was Canadian. He was not. Sorry for the error.
David Henderson, over at the EconLog blog, has astute observations to make about the statements made by a parent of the girl murdered by the Arizona shooter. I recommend you read it all. It is probably not the sort of article to appeal to Paul Krugman, who is now well on the way to achieving the status of what the swearblogger Obxnoxio the Clown calls “a weapon’s grade cock-end”.
Here is more on Krugman’s descent, over, at all places, the Economist.. Even that organ of high-minded opinion is starting to publish attacks on him. Or maybe its editors are starting to take note of our own Paul Marks.
“The struggle for definition is veritably the struggle for life itself. In the typical Western two men fight desperately for the possession of a gun that has been thrown to the ground: whoever reaches the weapon first shoots and lives; his adversary is shot and dies. In ordinary life, the struggle is not for guns but for words; whoever first defines the situation is the victor; his adversary, the victim. For example, in the family, husband and wife, mother and child do not get along; who defines whom as troublesome or mentally sick?…[the one] who first seizes the word imposes reality on the other; [the one] who defines thus dominates and lives; and [the one] who is defined is subjugated and may be killed.”
The quote is from Thomas Szasz, psychiatrist and libertarian. The race to get your side’s definition in first perfectly describes the frenzy of the left wing media establishment to link the murders carried out by Jared Loughner to the right, the Tea Party, and Sarah Palin. I posted about the contrast between Guardian columnist Michael Tomasky’s haste to explain Loughner’s murders and his reluctance to explain Nidal Hassan’s murders here.
Over the last few days further evidence has emerged that Loughner was (a) simply a drug-addled madman, judging from his strange pseudo-logical screeds on YouTube and (b) had began to fix his mad rage on Gabrielle Giffords in 2007, after she gave what he regarded as an inadequate answer to his question, “What is government if words have no meaning?” At that time Palin was barely known outside Alaska.
A prescient remark from Thomas Szasz, then. Yet anyone who knows anything of his work and writings will have predicted that I am about to say that an apt quote is not his only relevance to this situation. Szasz is famous for opposing the many authoritarian crimes of the psychiatric profession: among them imprisonment without trial or appeal, assaults under the name of “treatment” (such as lobotomies, electric shocks, injections of drugs against the patient’s will), and collusion with the state to define dissent and eccentricity as mental ills. All very great dangers and he was right to oppose them, as he was right to oppose the prohibition of drugs.
And yet – there is Jared Loughner and the lengthening list of those like him. Lougher was is (Why do I keep saying was? He is alive and in custody!) a drug-addled madman who killed six people. “He should have been locked up before this” does not seem an unreasonable thing to think.
Clayton Cramer is a former libertarian. His article Mental illness and mass murder contains food for thought. This 2007 post by Brian Micklethwait is also relevant. I would welcome your opinions.
I know, my friends, that you are concerned about corporate power. So am I. So are many of my free-market economist colleagues. We simply believe, and we think history is on our side, that the best check against corporate power is the competitve marketplace and the power of the consumer dollar (framed, of course, by legal prohibitions on force and fraud). Competition plays mean, nasty corporations off against each other in a contest to serve us. Yes, they still have power, but its negative effects are lessened. It is when corporations can use the state to rig the rules in their favor that the negative effects of their power become magnified, precisely because it has the force of the state behind it. The current mess shows this as well as anything ever has, once you realize just what a large role the state played. If you really want to reduce the power of corporations, don’t give them access to the state by expanding the state’s regulatory powers. That’s precisely what they want, as the current battle over the $700 billion booty amply demonstrates.
This is why so many of us committed to free markets oppose the bailout. It is yet another example of the long history of the private sector attempting to enrich itself via the state. When it does so, there are no benefits to the rest of us, unlike what happens when firms try to get rich in a competitive market. Moreover, these same firms benefited enormously from the regulatory interventions they supported and that harmed so many of us. The eventual bursting of the bubble and their subsequent losses are, to many of us, their just desserts for rigging the game and eventually getting caught. To reward them again for their rigging of the game is not just morally unconscionable, it is very bad econonmic policy, given that it sends a message to other would-be riggers that they too will get rewarded for wreaking havoc on the US economy. There will be short-term pain if we don’t bailout these firms, but that is the hangover price we pay for 15 years or more of binge lending. The proposed bailout cannot prevent the pain of the hangover; it can only conceal it by shifting and dispersing it among the taxpayers and an economy weakened by the borrowing, taxing, and/or inflation needed to pay for that $700 billion. Better we should take our short-term pain straight up and clean out the mistakes of our binge and then get back to the business of free markets without creating an unchecked Executive branch monstrosity trying to “save” those who profited most from the binge and harming innocent taxpayers in the process.
What I ask of you my friends on the left is to not only continue to work with us to oppose this or any similar bailout, but to consider carefully whether you really want to entrust the same entity who is the predominant cause of this crisis with the power to attempt to cure it. New regulatory powers may look like the solution, but that’s what people said when the CRA was passed, or when Fannie and Freddie were given new mandates. And the very firms who are going to be regulated will be first in line to determine how those regulations get written and enforced. You can bet which way that game is going to get rigged.
I know you are tempted to think that the problems with these regulations are the fault of the individuals doing the regulating. If only, you think, Obama can win and we can clean out the corrupt Republicans and put ethical, well-meaning folks in place. Think again. For one thing, almost every government intervention at the root of this crisis took place with a Democratic president or a Democratic-controlled Congress in place. Even when the Republicans controlled Congress, President Clinton worked around it to change the rules to allow Fannie and Freddie into the higher-risk loan market. My point here is not to pin the blame for the current crisis on the Democrats. That blame goes around equally. My point is that hoping that having the “right people” in power will avoid these problems is both naive and historically blind. As much as corporate interests were relevant, they were aided and abetted, if unintentionally, by well-meaning attempts by basically good people to do good things.The problem is that there were a large number of undesirable unintended consequences, most of which were predictable and predicted. It doesn’t matter which party is captaining the ship: regulations come with unintended consequences and will always tend to be captured by the private interests with the most at stake. And history is full of cases where those with a moral or ideological agenda find themselves in political fellowship with those whose material interests are on the line, even if the two groups are usually on opposite sides.
– Professor Steven G. Horwitz, writing in late September 2008, in a piece entitled An Open Letter to my Friends on the Left. This evening, Horwitz will be giving a talk at the Institute of Economic Affairs in London, entitled An Austrian Perspective on the Great Recession 2008-2009.
“It might be more appropriate if the Sveriges Riksbank would end the Economics Nobel Prize as a failure: strictly, it isn’t a true Nobel at all; it was not part of Alfred Nobel’s legacy, but a much later add-on to pander to the economics profession’s vain pretensions of scientific respectability. If we judge a science by the hallmark of predictability, then the predictions of economists are no better than those of ancient Roman augurs or modern taxi drivers; alternatively, we can judge by its contribution to “scientific” knowledge, in which case the contribution that modern financial economics has made makes us wonder if the agricultural alchemist Lysenko shouldn’t have got a Nobel himself; or we can judge it by contribution to the welfare of society at large, in which case the undermining of the capitalist system, the repeated disasters of the past 20 years, the immiseration of millions of innocent workers and savers, and the trillion dollar losses of recent years surely speak for themselves.”
– Alchemists of Loss – How Modern Finance and Government Intervention Crashed the Financial System, by Kevin Dowd and Martin Hutchison. First published in 2010. Page 86.
Now having read it, I cannot recommend this book too strongly. Some of the discussion about modern financial theory – and its baleful consequences – is quite complex, but the authors write with a verve and eye for drama that makes this a very readable book. In my view, it is the best study of what has happened, and more importantly, spells out in practical, thoughtful ways as to what should be done.
In today’s Guardian Michael Tomasky has written the following article about the murder of six people and attempted murder of many others, including Congresswoman Giffords: In the US, where hate rules at the ballot box, this tragedy has been coming for a long time. Some selected extracts:
… You don’t have to believe that alleged shooter, Jared Loughner, is a card-carrying Tea Party member (he evidently is not) to see some kind of connection between that violent rhetoric and what happened in Arizona on Saturday.
… So what particular type of nut is Loughner? We don’t have a full picture yet. But we have enough of one. His coherent ravings included the conviction that the constitution assured him that “you don’t have to accept the federalist laws”. He called a female classmate who had an abortion a “terrorist”.
In sum, he had political ideas, which not everyone does. Many of them (not all, but most) were right wing. He went to considerable expense and trouble to shoot a high-profile Democrat, at point-blank range right through the brain. What else does one need to know? For anyone to attempt to insist that the violent rhetoric so regularly heard in this country had no likely effect on this young man is to enshroud oneself in dishonesty and denial.
I would like to report to you that my nation is in shock, and that we will work together to ensure that nothing like this ever happens again. Alas, neither of these things is close to true. Of course an event like this is hard to believe in the moment; but in the context of our times, it’s really not surprising at all. Last summer, a California man armed himself and set off for San Francisco with the express intent of killing liberals at a nonprofit foundation that had been pilloried by Glenn Beck and others. Only the lucky accident of his arrest en route for drunk driving prevented the mayhem then.
The Coalition to Stop Gun Violence has documented more than two dozen killings by or arrests of rightwing extremists who intended to do serious political violence since 2008. One Tennessee man killed two worshippers at a liberal church, regretting only that he had not been able to ice the 100 liberals named by author Bernard Goldberg as those most responsible for destroying America. Giffords herself received threats after voting for the healthcare reform bill, and shots were fired through the window of her district office. An event like this has been coming for a long time.
In contrast, here is the article that Michael Tomasky wrote when Major Nidal Hasan murdered thirteen people and attempted to murder many others: American, for better or worse. Some selected extracts:
We have much more to learn about Hasan before we can jump to any conclusions. A New York Times profile of him from yesterday notes that this army psychiatrist, who’d presumably heard many blood-curdling war stories, obsessively feared being sent over to Iraq or Afghanistan. But it then says that the FBI has monitored some internet postings by a certain Nidal Hasan that spoke positively of suicide bombers, comparing them to soldiers who risk their lives for their comrades. The Times didn’t know if it was the same Nidal Hasan.
For all most Americans know about Palestinian culture, Nidal Hasan could be as common a name as Dave Johnson. The Palestinian is an unknown person in the US. Jews are a part of the country and have been for decades, but average Americans pretty much know Palestinians only as suicide bombers. Sadly, for some Americans this event will reinforce an image of a people who resort first to mindless violence.
…
We should assume until it’s proven otherwise that Hasan was an American and a loyal one, who just snapped, as Americans of all ethnicities and backgrounds and political persuasions do. And, as is so rarely the case in these situations, he’s alive, so we’ll have a chance to hear him express his views some day.
“But I detect that the criticism [of big businesses] is increasingly out of date, and that large corporations are ever more vulnerable to their nimbler competitors in the modern world – or would be if they were not granted special privileges by the state. Most big firms are actually becoming frail, fragile and frightened – of the press, of pressure groups of government, of their customers. So they should be. Given how frequently they vanish – by take-over or bankruptcy, this is hardly surprising. Coca-Cola may wish its customers were “serfs under feudal landlords”, in the words of one critic, but look what happened to New Coke. Shell may have tried to dump an oil-storage device in the deep sea in 1995, but a whiff of consumer boycott and it changed its mind. Exxon may have famously stood out from the consensus by funding scepticism of climate change (while Enron funded climate alarmism) – but by 2008 it had been bullied into recanting.”
Matt Ridley, the Rational Optimist, page 111.
He’s right, of course. While Hollywood moviemakers may delight in using bosses of large firms to be villains, which is rather ironic, given the importance of big entertainment firms like Time-Warner, Disney and Sony Corporation to the movie industry in recent years. The actual track record shows, as Ridley says in this excellent book, that firms have a far shorter shelf life than government agencies. This is hardly surprising. There is, in government, no negative feedback loop with a failed agency or an agency that has outlived whatever reason for its original existence. As we see time and again, a government agency will often look for new things to justify its continued existence, arguing for larger budgets, more staff, and so on. With business, on the other hand, any firm that does not adapt to the constant shifts of consumer habits will die.
Here’s more:
“Half of the biggest American companies of 1980 have now disappeared by takeover or bankruptcy; half of today’s biggest companies did not even exist in 1980. The same is not true of government monopolies: the Internal Revenue Service and the National Health Service will not die, however much incomptence they might display. Yet most anti-corporate activists have faith in the good will of the leviathans that can force you to do business with them, but are suspicious of the behemoths that have to beg for your business. I find that odd.”
After having read and watched anti-business folk for years now, I don’t perhaps find this attitude as odd as Ridley does. The hatred of business is, in my view, a product of centuries of crappy, anti-reason philosophy and a fear of freedom that this has generated.
If we ever get to the day when the best we can do in the way of eccentrics is men who wear silly hats, then heaven help us.
– Simon Heffer, on the late David Hart
What depraved individual wants to make it easier for the government to do stuff? The government doing stuff is expensive and hurts freedom, so we should all be trying to make sure it barely ever does anything. Still, there are people out there that hate humanity and want the government constantly doing stuff and spending our money while pushing us around. They must be foiled.
– from a posting by Frank J concerning a proposal to make government faster, entitled Making Government Slower. His suggestions follow.
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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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