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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Just to make the problem clearer. Economies do add up. If this happens here then that over there must also happen. If we don’t see that second then we’re mistaken in our assumption that the first has. If productivity has risen and wages haven’t then the labour share must have fallen. The labour share – up to when PK wrote in 1996 – had not fallen. Therefore that confident blue line from 1970 to 1996 is wrong.
We don’t even have to worry about why it’s wrong. It just is – so bollocks to the rest of it.
Chakrabortty’s getting on a bit to be an enfant terrible of course, his unwillingness to spend time and energy understanding the economics he’s attempting to write about is easier to explain for he’s at The Guardian. In fact, he writes the economic editorials for The Guardian and an actual knowledge of economics in that job – let alone time and effort spent gaining it – would be a positive hindrance.
No, really.
– Tim Worstall putting the boot in 😀
The current tax rate as a proportion of net national income (according to the Adam Smith Institute) is 44%. See if you can guess what it was in
a) 1924 and
b) 1913.
Answer below the fold.
→ Continue reading: Sunday morning quiz
But moving away from the obvious and serious to something more jocular.
Borrowing costs imposed on France
And, no, really, just no. Yes, yes, we all know what they’re saying but it doesn’t work as a construction.
Think of the average nutter – the average socialist but I repeat myself – who’ll scream the house down about the power of The City, of “the market”. This is to make a category error, it is to reify the markets. Those markets are not, for all the linguistic ease of our saying so, “a thing”. They’re just you and me and the folk holding our chequebooks, that’s all. There’s no thing there, no market view, no market control – either control of the market or the market controlling other things. Just that interaction of 8 billion people each counting their own pennies.
The markets – as opposed to the market – do not impose borrowing costs upon anyone. They don’t impose anything at all. There’s a price at which people will lend you their pennies, a price at which they won’t. That changes over time. And, erm, that’s it. This is not an imposition.
– Tim Worstall
#Just_Stop_Toil is best anti-Luddite hashtag ever. Use it.
Why does it work? Because, as it turns out, the profitable level of a fish stock is above the sustainable level. More fish around, less diesel and time used to catch enough to feed the market. Profits are thus maximised at stock levels substantially above sustainable levels. That means more fish to gawp at while maximising profits.
Or, alternatively, George Monbiot has got the neoliberal capitalist attitude to fisheries entirely and wholly the wrong way around. The reproductive rate of money, within that neoliberal capitalism, is more fish in the sea than there are currently. Therefore, having neoliberal capitalism running the fisheries (some to many fisheries perhaps not all) would increase the number of fish to gawp at. Exactly and precisely the opposite of what George is claiming.
The problem is about George. For someone who keeps insisting that he’s just critiquing the neolberal capitalist attitide to the environment he knows fuck all about the neoliberal capitalist attitude toward the environment.
But then that’s such a strange thing in public intellectuals, isn’t it? Ignorance?
– Tim Worstall
Shocking news from today’s Sunday Telegraph:
Dutch job disease: how labour rights have undermined the Netherlands
Sacking an employee in the Netherlands is no easy feat.
Ask many managers and they will explain to you the nuisance of having to apply to the courts to obtain a “dismissal permit” for an underperforming employee.
Even if a worker has agreed to leave, they then have a two-week cooling-off period to possibly change their mind.
The process is so arduous that the Dutch are deemed by the OECD to have one of the strictest worker protection regimes in the developed world.
This might sound unambiguously progressive for the Netherlands, and a potential inspiration for Deputy Prime Minister Angela Rayner as she seeks to enhance workers’ rights in the UK.
However, for plenty of workers, the Dutch system has backfired.
Underpinning the problem is the fact that many bosses are increasingly reluctant to hire workers given the difficulties they later encounter when trying to sack them.
The result is that more than one quarter of Dutch workers are employed only on temporary contracts, far more than any other rich country.
‘The system is the problem, not people’: how a radical food group spread round the world
Incredible Edible’s guerrilla gardening movement encourages people to take food-growing – and more – into their own hands
Pam Warhurst insists she’s no anarchist. Nevertheless, the founder of Incredible Edible, a food-focused guerrilla gardening movement, wants the state to get out of people’s way.
“The biggest obstacle is the inability of people in elected positions to cede power to the grassroots,” she says.
[…]
Her big idea is guerrilla gardening – with a twist. Where guerrilla gardeners subvert urban spaces by reintroducing nature, Incredible Edible’s growers go one step further: planting food on public land and then inviting all-comers to take it and eat.
I doubt this idea would scale up, but if growing food to give to others gives people pleasure, go for it. I cannot bring myself to feel outraged about the odd unauthorised carrot in a municipal flowerbed. And long have I waited to see lines like those I have put in bold type appear in the pages of the Guardian:
But as much as Warhurst’s idea has simplicity and wholesomeness, it also has a radical streak. At its heart, Incredible Edible is about hijacking public spaces – spaces nominally owned by communities, and paid for through their taxes, but administered and jealously guarded by public authorities.
And that is where Incredible Edible meets its biggest challenge: the dead hand of the state.
I have just returned from a holiday in Switzerland, where I often go to do deplorable things. While visiting a country, I try to keep an eye on which news stories are trending there. The almighty algorithm has observed my interest in things Swiss and even after my return keeps sending stories from the “swissinfo.ch” website my way. I am sure you can guess what it was about the following story that struck me as odd:
Swiss colonial exploitation highlighted by National Museum
Switzerland’s colonial history is the focus of an exhibition at the National Museum in Zurich. Based on new research, it looks at the country’s role in colonialism and slavery, and considers its legacy today.
If it were not for the way that every museum in the Western world has scrubbed out and re-written the labels on its displays to be “anti-colonialist”, I might consider this exhibition to be a welcome corrective. The Swiss are an admirable people, but they do have a slight tendency to think that their neutrality and their benign absence from the indexes of history books are entirely the results of virtue rather than geography. As the exhibition points out, many Swiss were happy to profit from slavery. Then I read further:
It [the exhibition] tells the story of businessmen who took part in the transatlantic slave trade or made their fortunes trading in colonial commodities and exploiting enslaved populations. In particular, the exhibition presents the whips and handcuffs used on slaves on coffee and cocoa plantations in Ghana, which enabled Swiss businessmen to make their fortunes.
It also tells the story of people who traveled the globe as missionaries or left Switzerland to found settlements and exploit territories considered uninhabited.
Why are traders in colonial commodities, missionaries and migrants lumped in with slavers, as if trading with other peoples, trying to persuade them to believe in the same things you do, or moving to a place you thought was uninhabited were evils in themselves?
It looks to me as if this exhibition is less about telling the stories of the forgotten victims of Swiss oppressors than about classifying the Swiss as an oppressor people, or, to be more exact, about making sure the Swiss know that little things like never having had any colonies are not enough to acquit them of being members of a colonialist race.
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Related post: “N star star star star, not N star star star star star”.
Media reaction to the National Wealth Fund has, in general, been positive, though (predictably) The Economist was critical. Interestingly, The Guardian did not appreciate the fund’s misleading name. Probably the most glowing responses came from the Financial Times. Many might think that this, as well as the various big names involved in the formulation of the policy — including former Bank of England governor Mark Carney and the Chief Executives of Aviva, NatWest, and Barclays — reflects the fact that this policy is well-formulated and fundamentally sensible. They would be wrong. As we have seen, there is nothing sensible about the majority of the ‘preliminary’ sectors chosen.
– Pimlico Journal
Sovereign Wealth Funds (SWFs) controlled more than $11.8 trillion in 2023, beating hedge funds and private equity firms combined, up from $1 trillion in 2000. State-owned enterprises (SOEs) had assets worth $45 trillion in 2020, the equivalent of half of global gross domestic product, up from $13 trillion in 2000. The Organization for Economic Cooperation and Development calculates that half of the world’s 10 biggest companies and 132 of its 500 biggest are SOEs. The state is not only back. It has burrowed into the heart of the capitalist economy — running companies (often across borders) and shaping capital markets.”
– Adrian Wooldridge, Bloomberg ($)
I would argue that this issue is as big, or more serious, than the usual complaint that boards of large, mostly listed, companies have gone “woke”. Because as we have seen, as interest rates have risen to curb inflation, some of this wokery has gone into retreat. But sovereign wealth funds are a different kettle of fish. With a few exceptions (Norway), nearly all the countries operating SWFs are commodity-rich autocracies, such as those of the Gulf, of varying levels of opacity. As Wooldridge says, this creates a big problem because the healthy “creative destruction” of free market capitalism cannot so easily work its brutal, if necessary, magic.
Recently, there was an attempt – since thwarted, as far as I can tell – by an Abu Dhabi-backed fund to buy the Telegraph Group, owner of titles including the Spectator and the Daily Telegraph. That caused a political storm. But many other acquisitions, such as of ports, sports clubs and infrastructure, go on and are routine.
A question I have is whether the current Labour government, full of managerialist/statist types with no feel for entrepreneurship and the healthy ups and downs of capitalism, will be tempted to do something similar, although the UK, unlike the oil-rich potentates of the Gulf, is short of funds. But even so, the Starmer government might be tempted, maybe in concert with other countries, to try and get into the state capitalism act. It is probably already doing so.
The question is whether any of the opposition parties have the fortitude and discipline to mount a coherent takedown of all this, and perhaps join it with a similar assault on the growing spread of the “administrative state”. In many ways, the rise of this state, and SWFs, are part the same, troubling trend.
The first piece is how pensions work, and what’s gone wrong with them. In our state pension (I’ll say a little about private schemes at the end), we don’t “save up for our retirement”. When we started the system after the war, we needed to pay retirees immediately. Pensions have therefore always been met each month out of taxes paid by workers that month. At any given moment, there is only a week or two of funds in the government’s “State Pension account”.
While that arrangement solved an immediate problem, it created an enormous structural problem. When the pension scheme was started, life expectancy was about 68. Now it’s about 82. And birth rates started falling in the 1960s, meaning that more and more pensioners incomes are being funded by fewer and fewer workers. The result is that the average person born in 1956 now takes out around £290,000 more in retirement income than she paid over her working life.
The plan for addressing that problem was to grow the economy each year by an amount sufficient to generate enough tax receipts to keep funding the expanding retirement bill. And for most of the 20th century, while we benefitted from a global hydrocarbon and nuclear energy system that for decades doubled in size every 7 years, that plan worked.
“Net Zero” puts an end to that.
– Richard Lyon
Steve Baker, the former Conservative MP (he lost his High Wycombe seat in the 2024 general election), ex-RAF officer, and a business figure in the IT sector, drops some solid truths in his new Substack:
The evidence suggests that we cannot afford the state we have, not now and not in our lifetimes. Taxes are at historic highs and it is implausible to believe they can be raised usefully. Debt is heading into unsustainable territory and the National Insurance Fund will be exhausted in 20 years, putting a date on the currently inevitable default of the welfare state.
Moreover, the evidence is that currencies have been dramatically debased since 1971, manufacturing injustice on a vast scale in ways which are rarely and poorly understood, but which appear to be reflected in commonly-expressed grievances which have been leading to political radicalism.
The situation facing the UK and the world is extremely serious. When Rachel Reeves on Monday tells the Commons we cannot afford present spending, the Conservatives should make the most of it in the public interest.
Read it all. As Mr Baker writes, the UK Chancellor of the Exchequer, Rachel Reeves, is due to address parliament on Monday (29 July) on the state of the UK public finances, claiming that they are so much worse than originally thought (which is disingenuous, to be polite), and hence pave the way for even more tax hikes. Mr Baker’s essay contains some fairly eye-popping charts and data points about where the UK is in terms of its total tax burden.
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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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