“Build 1,000 new state of the art nuclear power plants in the US and Europe, right now. We won’t, but we should.”
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TIME Magazine has made Donald J Trump, re-elected to the White House, as its Person of the Year. These POTY titles don’t necessarily mean the publication thinks that X or Y are good or praiseworthy; what counts is that they are significant in some overwhelming way. Trump fits the bill perfectly. Without a doubt, his election in November will shake things up, not always for the better. But shake them up they surely will. If I were to choose an alternative POTY from the ranks of politics, my choice would be Javier Milei, president of Argentina. He’s been in the job for just over a year. On his watch, inflation in a high-inflation country has sunk to low single-digits. He’s deregulated the rental market and prompted a flood of new rental housing, cutting rents as a result. He brandished a chainsaw as his symbol of what he wanted to do to government. Thousands of public workers have been laid off; a number of regulations have been scrapped. The price of Argentinian debt, both public and private, has risen, and the yields have fallen. This represents a massive vote of confidence in the creditworthiness of a nation renowned for its fecklessness for decades. This will attract capital and investment, helping the country pull out of recession and hopefully, boost living standards in a sustainable way. It needs to happen: there is a lot of poverty in that country. As a result of some of this free market medicine, the Argentinian peso has risen in value: The peso-dollar has surged 22 per cent a year before. So much so, in fact, that Keynesian columnist Ambrose Evans Pritchard, who often predicts the case for reflating this or that country with lots of cheap money, has denounced this situation. For those who have seen Latin American currencies reduced to dogfood (apart from maybe in Chile) in recent decades, no higher praise for Milei can be higher than catching the glare of a columnist who is so often wrong in his predictions. So there you are: My choice for Man of the Year would be a chainsaw-wielding fan of Austrian economics in Buenos Aires, an actual classical liberal in a world gone increasingly collectivist. Update: I fixed the way of expressing the foreign exchange rate; apologies. The point stands: the peso is worth a lot more today than a year ago. Another update: Does a stronger Argentina make it more likely the government might try and re-take the Falklands? Maybe; one risk factor now in play is that under a socialist and self-hating PM, Sir Keir Starmer (who has an inferiority complex about Mrs Thatcher), the Argentinian public might, with some reason, think there is a chance the UK could be persuaded to transfer control. There is a lot of oil down in the South Atlantic; Milei does not, as far as I know, give a damn about Net Zero and might eye the area as a key resource. But he is also not a fool and might, with justice, think that a row with the UK is not worth the trouble, particularly if Argentina looks to rebuild trade relationships, particularly in a world of rising tariff barriers.
December 20th, 2024 | 61 comments
 “But there is a limit to how much we can gain from a combination of long-term reforms and controlled disruption. The deeper problem with the public sector is not the people who run it but the people who use it. The combination of an ageing population and a stagnant economy means that a growing number of countries can no longer afford the largesse of the post-war era. And the only viable long-term solution to this problem (barring a productivity miracle) is to cut big entitlements rather than to pretend that we can force the public sector to produce miracles. What really needs to be disrupted is not so much the workings of government as the public’s expectations.” December 12th, 2024 | 30 comments
“I honestly don’t understand how it can be so hard to cut immigration. The government has and has long had all the tools it needs at hand to actually do it – if it actually wants to. Especially as only around 25% of visas are actually work visas. I wonder if the way forward is just to give responsibility for incoming workers to companies. If they need workers [that they] can’t find in the U.K. they can hire abroad, sponsor, house and finance them within a 3-5 year circular visa system. [This] Takes stress of public services especially the NHS and housing; it allows workers to make money to take home and reduces long-term numbers. Japan has a system much like this.” – Merryn Somerset Webb, columnist. These comments appeared on her Linkedin page. While many on the free market side of the fence can be at odds on the immigration issue, what seems plain to me is that controlling legal immigration ought to be pretty straightforward if that is the policy. So why is this so hard to do in practice? I cannot help but think that it is a lack of political will, and an element of resistance to enforce democratically-enacted policy at the level of the Civil Service. In which case, it is no wonder that the Conservatives got crushed in July and that, on current trends, the current shower in government will go the same way.
November 29th, 2024 | 29 comments
“We are seen, bluntly, as a country run by student union activists, a place where violent criminals are released from prison to free up space for people who have posted nasty comments online. If you’re British, you might protest that things are more complicated than that, but you must also concede that our critics have the big picture right.” November 24th, 2024 | 27 comments
“Britain’s biggest problem is a lack of economic growth – so much else is downstream from that. In per person terms, annual real growth averaged more than 2 percent in the run up to the financial crisis. From the crash to COVID-19, growth was just 0.6 percent on average. And of course these growth rates compound. Before the financial crisis, living standards were on course to double every 35 years; afterwards, it was every 120 years. This is a change with profound societal – and even civilizational – consequences. “From tax and regulation to institutional malaise, demographic decline, and a culture that denigrates success – there are all sorts of explanations for our economic slowdown. But the way I see it is that we are suffering a progressive loss of economic dynamism, as we gradually replace market processes with bureaucratic ones – often to reduce risk or increase ‘fairness’. To many observers, every individual step along the road is reasonable and easy enough to justify. But over time, the effect is suffocating.” – Tom Clougherty, Institute of Economic Affairs November 17th, 2024 | 19 comments
“Some 35 years after the collapse of the 20th century’s most rigorous experiment in the failure of central planning, the fall of the Soviet empire, and comparative success of the capitalist West, it is hard to fathom how we’ve got into this climate communist mess. It should be self-evident that the planet doesn’t have a thermostat, let alone one easily adjusted by national leaders ordering technology to improve through a cascade of plans lashed to a target. Decarbonisation will happen regardless and is likely to go faster by inventing better solutions funded from the proceeds from growth, or bottom-up innovation. Rather than five-year battery-powered tractor plans, in the context of mission-led state direction – the latest reinvention of the language of failure by top-down socialist planners.” November 14th, 2024 | 12 comments
“The necessity of finding a sphere of usefulness, an appropriate job, ourselves is the hardest discipline that a free society imposes on us. It is, however, inseparable from freedom, since nobody can assure each man that his gifts will be properly used unless he has the power to coerce others to use them. Only by depriving somebody else of the choice as to who should serve him, whose capacities or which products he is to use, could we guarantee to any man that his gifts will be used in the matter he feels he deserves. It is of the essence of a free society that a man’s value and remuneration depend not on capacity in the abstract but on success in turning it into concrete service which is useful to others who can reciprocate. And the chief aim of freedom is to provide both the opportunity and the inducement to insure the maximum use of the knowledge that an individual can acquire. What makes the individual unique in this respect is not his generic but his concrete knowledge, his knowledge of particular circumstances and conditions.” – F. A. Hayek, The Constitution of Liberty, pages 80-81. With yesterday’s revolting annual Budget statement from the Labour government still ringing in my ears, I thought a bit about how this lot treats ideas of “merit” and what is considered “unearned” wealth. For instance, one aspect of yesterday’s measures from Chancellor Rachel Reeves is to add a deceased spouse’s pension pot to inheritance tax (threshold starts at £325,000); IHT is 40 per cent. Any money paid out from the pension will be hit, subject to certain conditions, at 45 per cent for top-rate taxpayers – an effective rate of 67 per cent. This sort of move stems from the idea that certain people don’t “deserve” to inherit X or Y, and must pay their “fair” share to the Moloch of the State. I urge people to read Hayek’s masterpiece, not least for its dissection, and demolition, of much of the argument put forward about why certain wealth is “unearned”, and why we should be paid according to some social formula of merit. That way totalitarianism lies. October 31st, 2024 | 10 comments
“Britain’s deluded politics are downstream of a deluded public. This country simply doesn’t realise how poor it is; the gulf between public expectations of the state and the state’s means of financing itself has widened to dangerous levels. People on relatively high incomes don’t feel rich and therefore assume that there are plenty of actually rich people who could be squeezed to pay for stuff. Entitlement spending, in particular, is eating British democracy alive. Council budgets are increasingly consumed by social care and special educational needs and disabilities (SEND) spending, with services cut to the bone. Meanwhile in Westminster, successive governments continually forestall capital investment to avoid tinkering with absurd commitments such as the pension triple lock.” – Henry Hill, writing about the UK Budget statement of Chancellor of the Exchequer, Rachel Reeves. (For non-British readers who want to know what the “triple lock” is, it is a safeguard that ensures the state pension increases each year by the highest of three measures: Inflation: The Consumer Price Index (CPI) for the previous September; Average earnings: The average increase in total wages across the UK for May to June of the previous year; and a minimum rise of 2.5%.) I agree with Hill that many members of the public, and not just the chattering class, are so economically illiterate they have little idea of how screwed the UK is financially, given demography, state bloat, over-regulation and tax, and the rest. And anyone who pushes against it is one of those sinister people known as “neoliberals”. October 30th, 2024 | 17 comments
“It’s not too much to say that if Israel had taken Mr. Biden’s advice, Sinwar, Nasrallah, and the rest of the Hamas-Hezbollah leadership would still be alive.” – Wall Street Journal editors. October 18th, 2024 | 17 comments - (Comments are closed)
“When competence is rewarded, you get more of it. When the ability to play internal politics is what gets you ahead, then you get more of that. SpaceX has clear goals, short deadlines and clear lines of responsibility. Boeing’s culture, once one that revered engineering, has become one that worships byzantine corporate politics — where you’re more likely to get fired over DEI infractions than over job performance. And it’s not just Boeing; in Oregon, a top forestry official was put on leave after a DEI officer complained he was “seeking only the candidates most qualified for the job,” without emphasizing their “gender and identity.” Ditto the federal government, which has created a self-perpetuating culture of incompetence: It’s virtually impossible to get fired, and failures often bring more resources to the agency, not less.” – Glenn Reynolds, New York Post. October 15th, 2024 | 5 comments - (Comments are closed)
Well, maybe this is a sign of the times. A Communist dictatorship, which has gone after pesky entrepreneurs such as Jack Ma and many smaller firms, realises that this is bad for business. Who would have imagined that? It is a bit like Lenin realising, in around 1921, that shooting and jailing entrepreneurial people was not smart, so we had the New Economic Policy for a few years until Stalin turned the repression back on to full power. The question I have, however, is whether this is a temporary change, and bad habits will resume: China is cracking down on behaviours from law enforcement seen as detrimental to the ordinary function of private businesses, a crucial step in restoring confidence as the country embarks on a whole-of-government effort to ensure a steady, sustainable economic recovery. – The South China Morning Post ($). October 11th, 2024 | 15 comments - (Comments are closed)
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