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To its credit the Times publishes several columnists who go against the opinions of its readers. Sometimes, however, I suspect that the Times ignobly picks writers who are not the best ambassadors for their causes. The readership of the paper’s Scotland section is devoutly Unionist. Every week Fiona Rintoul reminds them why. In an article called “Scotland can prosper once we take the wheel”, she writes:
Fresh ideas have also come from Jim Osborne, of the Scottish Banking and Finance Group. He has proposed reforming the pension system to benefit pensioners and the wider community. Scotland’s council pension funds, which control £45.5 billion of assets, could, he feels, help to support the expansion of Scotland’s social housing stock. This chimes with global developments in pension funds’ asset allocation. With bond yields at historic lows, pension funds are turning to infrastructure investments for yield.
Osborne has also suggested that Scottish local authorities be allowed to issue municipal bonds to power spending. Again, this chimes with global developments as bond markets diversify. Scottish local authority “munis” could form suitable investments for pension funds too.
This excellent article in the US Spectator by Paul Wood is two weeks old. That probably means all the prices he quotes should by now have an extra zero at the end. The vividness of his portrayal of Lebanon as the magic stops working is unaffected, so read it anyway: “What happens when your currency collapses?”
An extract:
The government continues to insist that for imports of some vital goods — food, fuel and medicines — the lira is worth the fictional rate of 1,500 to the dollar. What this means is vast government subsidies to import these goods.
This has had some perverse effects. For a long time, you could fill up your car for about five bucks. The gas station would charge you, say, 60,000 lira, which was $40 at the official exchange rate, except your lira would have come from the black market at a fraction of that. As any economist will tell you, if you don’t ration by price, you ration by queuing, as in the Soviet Union. So there have been long lines at gas stations and now actual rationing, a quarter of a tank per customer — and that’s if you can find a gas station open at all. A side effect of the fuel shortage is that the internet is slowing to a crawl, sometimes breaking down altogether. The commonly accepted explanation is that there’s not enough diesel to run the power plant belonging to the national phone and internet company.
It’s the same with medicines. We’ve just bought a year’s course of treatment for our daughter’s nanny, who has breast cancer. We went to the hospital with 225 million lira in cash. It filled a small backpack. Those lira cost some $15,000 on the black market but they paid for $150,000 worth of medicines at the official exchange rate.
Lebanon is temporarily the cheapest place in the world to have cancer. People are coming here for treatment; subsidized medicines of all kinds are being smuggled abroad. A hypertension drug named Atacand has turned up for sale in Kinshasa, at $20 a box. It was bought in Lebanon for $2 a box. Atacand is therefore unobtainable here now. One report about this absurd situation quoted a Lebanese expat in Kinshasa who was buying the drug there to send back to his village at home.
The human will to self-deception is strong. There are some who will read this article and only take in one line: “Lebanon is temporarily the cheapest place in the world to have cancer.” There are some in Lebanon living through these events who will only take in one thought: “Isn’t it great how fuel, food and medicine are so cheap now!” They will not ask themselves why they are so hard to get, or why, as Mr Wood mentions elsewhere in the article, half of Lebanon’s doctors have left to work abroad.
In the news cycle of late: lorry driver shortage threatens empty supermarket shelves.
One product so affected is apparently bottled water. I can say I have been having trouble buying the particular brand of bottled soft water I put in my coffee machine to avoid having to descale it so often.
The Road Haulage Association wrote to the Prime Minister with five causes of the shortage: covid, Brexit, retiring drivers, a driving test shortage and IR35. The first two are causing foreign drivers to return to their home countries, not to return, they say. The last two I imagine are exacerbating the first three. If you make lorry driving pay less and cost more (whether obvious monetary costs or by increasing bureaucratic hurdles) it stands to reason that supply will diminish. To get supply back to the same level, you will have to pay more. In macroeconomic terms: taxes and regulations reduce economic growth. This is how that looks in real world terms.
IR35 is particularly egregious. A driver recruitment agency writes:
The effect of the IR35 reform is to force agency workers who previously operated as Ltd Companies to pay more tax and their agencies or end clients to pay Employer NI Contributions. If we were to keep the drivers’ net income the same, it would result in an increase in employment costs of 25% to the agency.
Maybe they are exaggerating their own costs, but the exact number does not matter too much. More tax is being collected from the employment of lorry drivers: that is the point of the IR35 regulation. One way or another it will be paid for by people directly and indirectly using the services of lorry drivers. Someone might argue that prior to IR35, the haulage industry was immorally getting away without paying enough tax, but that someone must now accept the increased costs of certain goods, including to poorer people for whom such goods are a more significant portion of their income.
Increased barriers to immigration are also said to play a part here. It is undoubtedly true that increased immigration drives down wages as it increases supply, which is to say it drives down the cost of hiring lorry drivers, and drives down costs to everyone who is indirectly using their services. Quite possibly the remaining lorry drivers are happy about this shortage (although I do suspect that any thus increased earnings are just going towards the now higher taxes). Also happy are the people who want everyone to have higher wages and use terms such as “living wage”, even if (as I suspect) those people also want more freedom of movement without wanting any reduction in wages that comes with it.
In the long term, more immigration should not mean lower wages: there is no lump of labour; if there are more people then there is more work to be done. On the contrary, denser concentrations of people create efficiencies that decrease costs, which makes things cheaper, which is the same thing as increasing wages. But dynamics are often overlooked. If you suddenly reduce the supply of lorry drivers you are going to suddenly increase the price of them. All of the other effects take time. And some of those effects will be cost-cutting innovations that reduce the need for lorry drivers. So watch out, lorry drivers.
I am a computer programmer. There was a time when there were suddenly many computer programmers arriving from Europe. My wages did not go down. The increased supply of programmers meant that more projects were started, there were more interesting things to work on, more interesting people to work on them with, and in general much more opportunity. Now it is becoming harder to hire programmers. I suspect if this continues, a lot of projects will happen in places where it is not so hard to hire programmers. My wages will not go up. The equivalent problem for the lorry drivers might be that as things get more expensive, people buy less things. Everything gets less interesting. That is how economic decline looks and it will not be good for the remaining lorry drivers in the end.
I have my doubts about whether the shortage will become a real crisis. So far, supply chain crises as a result of Brexit and covid have proved remarkably short-lived, and supply chains remarkably robust. Some new equilibrium will be found. But relative costs do change, and the people who want higher taxes, more regulation, higher wages or less immigration, ought to have the downsides of their demands pointed out to them.
For these CEOs, the problem isn’t just the media and external critics: The wokeness is coming from inside the building. At dinner parties, they ask each other the same question: How do we keep woke activists off the payroll? “It’s the first thing they want to talk about these days,” a vice president at a venture-capital shop told me. “It’s the crazy, activist, political stuff. I’ve not met a founder who doesn’t think it’s a problem. There’s a state of what the fuck?”
– Peter Savodnik
Sky News on Twitter: “Boris Johnson has suggested the world’s leading nations should support a more ‘gender-neutral and feminine’ way of post-COVID economic recovery.”
“Gender neutral and feminine”? Click on the words below* that in your opinion best match what was going through Boris’s tousled head as he said these words.
(a) Pay up, Matt, I did it.
(b) Hey, if Joe can get away with “Those RFA pilots”, I can get away with this.
(c) You’re looking awfully pretty today, Carrie.
(d) You’re looking awfully pretty today, Ursula.
*Nothing will happen when you click. But you will feel better for having expressed yourself.
“The `robber barons’ gave us railroads and public libraries. Zuck gave us Farmville and censorship.”
– Glenn Reynolds, apropos criticisms of how Big Tech bosses such as Mark Zuckerberg carry on. For what it is worth, the censorship operated by the Facebook and other Big Tech folk is still, in my view, less serious than of the traditional government kind. If you don’t like Facebook then don’t use it. By contrast, with government, we are forced to pay taxes to the bastards, regardless of what we use or how we vote.
And by the way, most of the “robber barons” weren’t robbing anyone, but adding value and doing such evil things as producing cheaper steel, oil and transportation. Much of the anti-trust furore was built around a total failure to see competition as an active process across time, not a static sport. The “perfect competition” model of neoclassical economics has done a lot of damage.
Not that I’d want to make this a hard diagnosis but much of the vague lefty wibble that used to infest economics has moved over into anthropology. I assume because economists have had to actually accept the real world evidence of the world out there getting richer, of lives getting better. You know, all those pretensions to being a science and thus testing hypotheses.
That one’s difficult to explain by the idea that socialism makes the people rich for example.
So, the woo is relegated to anthropology, where actual facts aren’t quite so important.
– Tim Worstall
The logistics chain that is Amazon, or Walmart, or even a Ralph’s, is one of the grand capitalist achievements in history. It used to be, in those heady days before the capitalists inserted themselves into the food supply system, that the working man spent 80% of income on food and rent. Sure, rent is a bit of a problem in certain places still. But food bills have fallen to perhaps 10% of household income.
We can check this too. Back in 1962 or so Mollie Orshansky noted that a poor family was spending about 30% or so of income on food. So, if we take a reasonable diet and triple it – roughly – then we’ve got a reasonable estimation of the poverty line. Sure, it was a back of the fag packet estimation and was meant to be used for a year or two while they all figured out something more sensible. But that is what the Official Poverty Line in the US is today, merely upgraded for inflation. And as general inflation has been significantly higher than food price inflation over those decades that average poor family, on the same inflation adjusted budget, is now spending 12 to 15%, not 30%, of their budget on food.
Supermarkets are the reason why. The people who own supermarkets charge a 1 or 2% margin on their activities. They get 2%, we get a 50% reduction in costs. It’s one of the great bargains of all time.
And this is what Guardian columnists complain about…
– Tim Worstall
The bank formerly known as RBS, now called NatWest Bank PLC, has announced that if Scotland votes to leave the UK, it will move to London
Britain’s NatWest would move its headquarters out of Scotland in the event of a vote in favour of independence, its CEO Alison Rose said, only days before parliamentary elections there.
State-backed NatWest (NWG.L), which until last year was called Royal Bank of Scotland, has been based for 294 years in the Scottish capital Edinburgh.
The reason, something to do with a anti-business culture in an independent Scotland?
“In the event that there was independence for Scotland our balance sheet would be too big for an independent Scottish economy. And so we would move our registered headquarters, in the event of independence, to London,” Rose told reporters.
This is presumably not meant to be a threat from the majority (c.59%) State-owned bank or playing politics. For a bit of context, the RBS Group changed its name recently to NatWest Group plc with a view to (I presume) burying the RBS brand and plunging a stake through its heart after its unfortunate recent history. NatWest was an English bank acquired by RBS as it ballooned before bursting
I have no doubt that the Chief Executive did not say, and did not mean to say
‘our balance sheet would be too big for an independent Scottish economy if we go bust again.‘.
But the latter is what I am hearing. An implicit admission that the bank risks insolvency, and would expect to be bailed out by the UK government at taxpayers’ expense again. The assumption that the bank is at risk of bankruptcy runs through this announcement like letters in a stick of rock.
So England, Wales and Northern Ireland will be the lucky recipient of all these (theoretical) liabilities.
No true Scotsman should fear independence if it means the departure of this fiscal UXB and its liabilities, a chilly modern-day Darién scheme without the disease and bugs.
But why on Earth should anyone in any country want to receive such a cuckoo in the financial nest? It sounds to me that if the bank were utterly worthless, that would be an improvement. Do we need any more evidence of the perils of fractional reserve banking?
“America innovates, China duplicates and Europe regulates.”
– Jeremy Warner, Daily Telegraph, (behind paywall). (He is writing about the EU’s Precautionary Principle and generally silly approach to new technologies. These are differences of degree, of course: it is not as if the US is quite the swinging-from-the-chandeliers classical liberal place of yore.)
Conspiracies are almost always bunk (but note that word ‘almost’). In the vast majority of cases, there are other better explanations for why things happen. Also, it ain’t a conspiracy if it is right out in the open for all to see. And by out in the open, I do not mean people saying “we are going to screw you over”. No, forget what people say, just focus on what they do and try to actually make happen. Once you understand what their objectives are, and the incentives they respond to, you can (almost) always parse their proclamations and get what they actually mean. An oil company’s objective is to produce oil, right? So, why would an oil company support phasing out internal combustion engines? Well, an oil company’s objective is not to produce oil, it is to make money and keep its employees in their jobs. And you can also make money by having governments give you taxpayer’s money to develop alternatives.
Big business seeks unified, market-based approaches ahead of climate summit
Corporate executives and investors say they want world leaders at next week’s climate summit to embrace a unified and market-based approach to slashing their carbon emissions. The request reflects the business world’s growing acceptance that the world needs to sharply reduce global greenhouse gas emissions, as well as its fear that doing so too quickly could lead governments to set heavy-handed or fragmented rules that choke international trade and hurt profits.
– Reuters (2021)
Note that phrase “fragmented rules”. There is even a photo in the article of some poor impoverished fellow titled “A farmer burns paddy waste stubble in a field on the outskirts of Ahmedabad, India”. No doubt this man is filled with a frisson of excitement at the prospect of having his costs massively increased by getting rid of internal combustion engines, and maybe even having some patented GMO seeds foisted on him that he has to pay for annually.
So, here is another quote.
Fascism is the organised attempt to introduce socialist planning with the consent of big business
– Edward Conze (1934)
Conze’s quote is very illuminating and even from the perspective of a deeply unpleasant man writing in the 1930s it is on the money. Where I think Conze’s observation needs a bit of updating is fascism (or alt-socialism) circa 2021 does not look exactly like fascism circa 1934. The ‘organised’ bit these days lacks jackbooted chaps marching down the street (well, usually), and modern neo-racism is tactically different to the way it was done in 1934, albeit the primary objective is still segmentation of populations into manageable groups.
Admittedly, Chinese Han nationalism is a bit more like paleo-racism than the neo-racism of the 白左 Wokesters of the Western world, complete with jackbooted thugs marching down streets, but in most other respects, the Chinese Communist Party has provided a master-class in how an ineffective Marxist socialist regime can quickly adopt the more effective and pragmatic outsourced fascist approach to planned socialist societies. A lot of people in the west look at China and rather like what they see.
When big businesses argue for higher taxes and more regulation, it takes wilful blindness to not see why they are saying these things. It is because it gives them a comparative advantage over less well capitalised up and coming rivals who lack huge compliance departments. Moreover, it strangles future would-be rivals at birth, making it too expensive to even try and get a business based on little more than a good idea off the ground. Just make sure the regulations and costs apply to everyone, no “fragmented rules” that leave gaps in which dangerous weeds might grow.
It is not a conspiracy, because not only is this completely out in the open, it is just a confluence of interests between people with monetary and political power, bureaucrats public and private looking to maintain their power and prestige.
By running their ship aground in the Suez Canal, the owners of the Ever Given, Japanese firm Shoei Kisen KK, unilaterally realized the dream of Peter Navarro and other radical protectionists. For seven glorious days over $9 billion dollars worth of goods per day were stopped from flowing through the Suez Canal. Much of that was headed to the United States and would have added to the “trade deficit,” thus (allegedly) wrecking havoc on the United States. Many hundreds of ships loaded with hundreds of thousands of containers full of all kinds of exports are still backed up. The impact on supply chains will continue to be felt long after the forces of free trade got the ship back on its way. According to Lars Jensen, chief executive of Denmark-based SeaIntelligence Consulting, “The effect is not only going to be the simple, immediate one with cargo being delayed over the next few weeks, but will actually have repercussions several months down the line for the supply chain.”
The doctrine of the balance of trade has been around for centuries. It has also been refuted for centuries.
The protectionists should award the captain of the Ever Given a medal for – literally – blocking trade. Protectionists seek to block trade. And that’s what the Ever Given has done. (Free traders argue that protectionism isn’t a useful descriptive term, because blocking trade doesn’t protect a country, although it does protect special interests from competition.)
Of course, no serious person would propose an award to the captain of the Ever Given, but there’s really no economic difference between the bulk of a gigantic ship physically blocking trade and the armed police of the Customs and Border Patrol coercively blocking trade.
– Tom Palmer
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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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