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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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Samizdata quote of the day – churn and change Competition has utterly transformed telecommunications after the state Post Office monopoly was ended. The same happened with deliveries when Amazon came along with an innovative service. Uber and Airbnb have each transformed their markets.
That is how competition works. It is Schumpeter’s creative destruction. Like evolution, it works by a selective death rate. It is not who owns the production, it is how easy it is for potential competitors to gain access to the market. Growth, productivity and innovation are driven by competition. Producers vie to satisfy the consumers, and those who do so survive, for a time, over those who do not.
One thing that competition ensures is change. It leads to a dynamic economy, just as its absence leads to a static one.
– Madsen Pirie
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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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Which is why “too big to fail” is perhaps the worst idea every articulated in economics. Almost the opposite is true — the bigger they are the more you should want them to fail. Because big companies are almost always horrendously inefficient but make up for their inefficiencies by buying protection from competition from the government in a whole host of ways: regulation, rent seeking, lobbyists, patents, oppressive compliance costs, no bid government contracts and on and on.
Not all big companies are bad, but “big” is often a sign of “bad”, and big companies are usually quite destructive to competition. So “too big to fail” is about as wrong as it is possible to be. And that is saying something in the world of economics which is littered with some of the most asinine ideas humanity has ever thought of.
Good post.
And good comment Fraser Orr – although, as you know, “too big to fail” is not really from economics, the great economists held no such view, it is from POLITICS.
It is true that economics has been corrupted – but there are still real economists who understand basic economic law, basic principles.
In late 19th and early 20th century France (unlike Germany – and, to a lesser extent, unlike Britain) economists resisted being corrupted – so the political powers created a new subject “Public Administration” – with institutions to train public intellectuals to repeat statist drivel.
The stand of the old French economists deserves to be remembered – for, although they were defeated, they were honourable and brave men – fighting against lies and tyranny.
As the theme tune from the old French television series “The Flashing Blade” puts it – “it is better to have fought and lost, than not to have fought at all”.
“He who runs away, lives to fight another day!” This exchange of quotes is fun. Got any others?
“it is better to have fought and lost, than not to have fought at all”
“He who runs away, lives to fight another day!”
Should there be something about choosing your battles wisely in there too?
Definitely, one must choose one’s own battles wisely.
Sun Tzu’s greatest wisdom was arguably “know your enemy, know yourself, and in a hundred battles you shall never be defeated”.
But then again, there are cases when being defeated can lead to victory in the long term. Trump’s loss in 2020 is one such case. Here is another, related case that i came across today.
He who runs away is unlikely to fight another day. Although the character in the “Red Badge of Courage” does – in reality running away is habit forming.
It is always easy to find an excuse not to make a stand – “it is hopeless, I will just be punished if I speak or vote against……” – politicians (including me) often tell themselves this.
Wellington is said to have been asked- “What is the greatest quality in a General?”, and he replied, “To have the intellect to know when to retreat, and to have the courage to do so.”, or words to that effect.