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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“This ‘Great Forgetting,’ as Cutsinger and Salter call it, has consequences. One is that many young economists ‘focus on applied research using sophisticated statistical tools without an underlying theoretical framework to guide them.’ The effects, however, go beyond formal economics. The marginalization of price theory in the academy is increasingly mirrored in the conduct of public policy—and the results are dire.”
– Samuel Gregg. He is writing in relation to a new CATO Institute publication that addresses why price theory is, so it appears, a neglected field in mainstream economics, and why this matters. The way I see it, prices are information about relative scarcity and plenitude. I learned a few things about what’s known as “Austrian” economics, and one of them is that a reason why central planning and socialism do not work, is that from an epistemological point of view, they are barren in terms of information. And that leads to barren economies. (At the extreme, you get the terrible famines of Communist nations, in part because economics is, in a sense, banned.) George Gilder, who writes a lot about business and technology, even has a book on the topic of the “information theory of capitalism”.
From a Bloomberg article entitled UBS Banker’s Frustration Exposes Cracks in World of Climate Finance
The article makes it clear that banks are struggling to deliver on credible “decarbonisation” financial policy and remain profitable concerns. Considering how Western taxpayers spent billions bailing out banks more than a decade ago, it would be extraordinary if banks were to deliberately restrict their earnings streams through going full “dark green”.
More:
“Banks are living and lending on planet earth, not planet NGFS,” Berkey told the group in an impassioned speech, alluding to the Network for Greening the Financial System, a collection of central bankers that creates model scenarios for how the energy transition may evolve. Details of what transpired at the meeting hosted by the Financial Stability Board — a coordinator of global regulations — came from people who were in the room but asked not to be named discussing private talks. Berkey confirmed his participation, declining to say more.
The UBS banker’s outburst, which got little pushback from those present, exposes the cracks emerging in a multitrillion-dollar transition finance project, and taps into what’s rapidly becoming one of the most contentious issues in the global banking industry. In private, senior bankers in sustainable finance divisions in London, New York, Toronto and Paris grumble about unrealistic expectations from regulators, civil society and climate activists around the industry’s role in getting the planet to net zero.
“Outburst” – translation – telling it like it is.
The standoff that’s brewing is setting the stage for a showdown at the heart of the ESG movement, where environmental, social and governance considerations are being pitted against old-fashioned capitalism.
Not really “old fashioned capitalism”. Just “capitalism”. We had more than a decade of ultra-low interest rates via quantitative easing. During this period, the business case for eliminating fossil fuels and powering a modern economy via solar, wind and happy thoughts appeared viable. With interest rates at their more normal long-term levels, some of the more fanciful projections don’t add up. This is called “reality”. Capitalism, which hinges around private property rights, voluntary exchange, and the desire to maximise the use of scarce resources that have alternative uses, is based on reality. Elsewhere, the article alludes to how capitalism produces “negative externalities” (carbon emissions) that must be controlled. What the article doesn’t stop to consider is that there are “positive externalities” from a prosperous world: more resources to fix problems, more wealth, higher living standards, more resilience, etc. (This is the broad thesis of the excellent book by Alex Epstein, Fossil Future, which totally debunks the alarmist case. See this video also featuring Epstein and Bryan Caplan, among others.)
Banks that had enthusiastically committed to align their entire operations with net zero goals are having second thoughts as the real-world ramifications of acting on those pledges become painfully apparent.
That’s what happens when you sign up to something that appears fashionable. Ditto with DEI (diversity, equity and inclusion, or, as I read the other day, “Didn’t earn it”).
Some of the world’s biggest lenders, including Deutsche Bank AG, HSBC Holdings Plc and Bank of America Corp., are adding caveats to their restrictions on financing coal, the planet’s most-polluting energy source.
Very wise.
BlackRock Inc. Chief Executive Officer Larry Fink says he has stopped using the term ESG and emphasized the world’s largest asset manager’s work with energy firms in a letter to investors this week. The firm has scaled back its participation in international climate investing alliances.
Fink is now more likely to focus on the imminent retirement crisis of the US and the developed world. Some of that has been brought around as birthrates have fallen. But hang on a minute, I thought having kids was bad for the Earth?
It is tough being green, isn’t it?
I cannot add to this article by Fran Ivens in the Telegraph: “How Argentina’s ‘chainsaw man’ Javier Milei slashed rents by 20pc”
Rents in Argentina have fallen 20pc since President Javier Milei scrapped a “destructive” cap for landlords in December.
Under four-year rent controls, landlords fled the market in their thousands and rents increased 286pc, fuelling an even deeper housing crisis.
Since the legislation was scrapped, rents have fallen and the number of properties that are available for rent has increased significantly, according to industry body the Argentine Real Estate Chamber.
The drastic change in outlook for the country’s rental market adds further weight to arguments that even with the aim of reducing the burden on renters, rent caps often have the opposite effect.
The rules, introduced in 2020 by then-president Alberto Fernández, included a mandatory lease term of three years and a limit on rent to an average growth rate of the consumer price index and the wage index. This cap was set by the central bank.
Even before the new legislation came into force, the effect was significant. Unsure of how much and when they would be able to increase rents, landlords hiked their pieces to try and avoid being caught out.
Worsening the situation, 45pc of landlords decided to sell their properties in the wake of the announcement significantly reducing the amount of accommodation on offer and further pushing up prices.
In the 12 months to February 2024, rents increased 286.7pc in Buenos Aires, according to rental platform Zonaprop. There was also a currency aggravation. While many use dollars in Argentina as a hedge against the peso that has been losing value, the law mandated that rental payment must be in the local currency.
Over the past five years, the Argentinian peso’s value against the dollar has decreased by around 95pc.
The reason Beijing seems so relaxed about the crisis is obvious: this is a situation in which China wins either way. Either the threat continues but shipping is safer for Chinese vessels than for others, in which case sailing under the protection of the red and gold flag may become a coveted competitive advantage, or Beijing finally tells Iran to knock it off, in which case China becomes the de facto go-to security provider in the Middle East. Both outcomes would be geopolitical coups. No wonder China is willing to accept a little short-term economic pain as the situation plays out.
– Nathan Levine
“Both Adam Smith and Joseph Schumpeter were much more realistic than Marx about the bourgeoisie’s political wisdom. Smith regarded capitalists as short-term actors who never gathered together other than to hatch a conspiracy against the public. Schumpeter regarded them as idiot savants who might be brilliant at building businesses but who were frequently fools when it came to dealing with politics. It’s not clear who can save us from the world of trouble that seems to be brewing. But anybody who is counting on the business elite to fill that role is making a dangerous mistake.”
– Adrian Wooldridge. Bloomberg ($)
But the proposed UK law would go beyond just FaceTime and iMessage to encompass all Apple products.
Earlier in January, civil liberties groups including Big Brother Watch, Liberty, Open Rights Group and Privacy International, put out a joint briefing opposing parts of the bill.
The groups said they were concerned the proposed changes would “force technology companies, including those based overseas, to inform the government of any plans to improve security or privacy measures on their platforms so that the government can consider serving a notice to prevent such changes”.
They added this would be “effectively transforming private companies into arms of the surveillance state and eroding the security of devices and the internet.”
– Zoe Kleinman
“In the UK, the Financial Reporting Council has just opted against including ESG requirements in the UK Corporate Governance Code — these were to have increased the role of audit committees in overseeing ESG and expanding diversity and inclusion. BlackRock Inc. Chief Executive Officer Larry Fink rarely mentions ESG any more. Elon Musk reckons that “DEI must DIE.” Bill Ackman (whose money matters) has called DEI the “root cause” of the sharp rise in anti-semitism at US universities. Donald Trump has promised to cancel all DEI initiatives across the federal government. The courts have already called a halt to race-based affirmative action at US universities, and last year the Attorney Generals of 13 US states wrote to Fortune 100 CEOs to let them know they would face serious legal consequences if they were to treat people `differently because of the color of their skin.'”
– Merryn Somerset Webb. She argues that much of the driving force is not just the absurdities of much environmental and “diversity” policies, but the brute fact of rising interest rates. Companies’ balance sheets and cost control issues are taking more urgency. ESG/DEI or whatever other piece of fashionable stuff is a lot harder to justify when capital is no longer “free”.
I trust and hope that interest rates remain around current levels for many more months to come, so as to force firms to compete harder for capital, to put it to genuinely profitable uses, reward long-term saving and habits of thrift and competence, and other generally good things.
As an aside, I can recommend The Price of Time, by Edward Chancellor, which demonstrated the great harms caused by artificially low interest rates over the centuries.
Ah! A testable proposition. So, currently the UK government takes 45% of everything, 45% of all economic effort and GDP.
The US government – at all levels – consumes about 28% of GDP, the Indonesian about 11% (yes, 11%) and Singapore’s some 17% or so.
So it would seem that economic dynamism is indeed associated with less than the UK’s confiscatory tax rates. Even, that fructifying idea has some empirical legs.
As ever, all economics is either footnotes to Adam Smith or wrong.
– Tim Worstall
“There were no marches for Adam Smith or posters of Milton Friedman at Davos this year, but the applause for the combative defense of free markets by Argentina’s new libertarian President Javier Milei was more than polite. Citing the contrast between ages of stagnation and the miracle of accelerating progress in the modern era, Mr. Milei reminded his audience that `far from being the cause of our problems, free-trade capitalism as an economic system is the only instrument we have to end hunger, poverty and extreme poverty across our planet’.”
– Walter Russell Mead, WSJ ($)
A couple more from the paywalled article:
His words resonated because, as one heard in panel after panel, the empirical foundations of the fashionable statist view appear to be crumbling. For now at least, the China miracle seems to be over. Beijing isn’t only suffering one economic shock after another. Its worst problems—demographic decline, a property bubble, overinvestment in manufacturing, and fear of arbitrary state actions against both foreign and domestic businesses—are the result of government planning gone wrong. As China doubles down on repression, its economic problems get worse.
Fifteen years after the financial crisis, meanwhile, tightly regulated Europe has fallen behind the U.S. Using chained 2015 dollars to minimize the effect of currency fluctuations, total European Union gross domestic product in 2008 was 81% that of the U.S. In 2022 it was 73%, hardly an argument for the European way.
The final point is a good one. These days, only the more ardent fans of the Brussels machine really claim that EU membership has had, or could have, a transformational impact on economic growth. That argument, to the extent it made sense, is a dead letter.
…are said at Davos.
This is an AI translated version of Milei’s speech, in which he uses words like “parasites”.
Prices in markets are information – however much we might not like the lessons being delivered.
– Tim Worstall
We are constantly being told by that coalition of communists and racists that talk about “de-colonisation” that the British Empire was a Bad Thing and that therefore we whiteys should a) be ashamed, b) tear down any monuments to that empire and c) give all our money and wealth to the descendents of the alleged victims of that empire. This despite the fact that there is almost no one alive who had anything to do with said empire. There is no force for good like inter-generational guilt.
For some time Oxford Academic Nigel Biggar has been discomfited by this claim and these demands. In 2017, he was denounced by “fellow” academics for running an “Empire and Ethics” project. Last year saw the publication of his book Colonialism: A Moral Reckoning. This itself was something of a palaver with Biggar’s original publisher dropping the thing in what appeared to be a cancellation. Luckily there is still some competition in the publishing world and another publisher came to the rescue.
Biggar is at pains to point out that he is an ethicist not a historian. He deals in moral issues not historical ones; hence the title of the book. Well, that’s the theory but with over a hundred pages of footnotes it would appear he is quite good at the not-day job.
He examines the various claims that the “de-colonisers” make: Amritsar, slavery, Benin, Boer War, Irish famine. In all cases he finds that their claims are either entirely ungrounded or lack vital information that would cast events in a very different light.. Amritsar? Dyer was dealing with political violence that had led to murder. Some victims had been set alight. Anyway, he was condemned for his actions by the British authorities and, indeed, his own standing orders. Slavery? Everyone had it and Britain was the first to get rid of it. Benin? They had killed unarmed ambassadors. Irish famine? They tried to relieve it but they were quite unequal to the size of the task. In the case of Benin he comes very close to accusing the leading de-coloniser of knowingly lying. The only one of these where I don’t think he is so convincing is the Boer War. He claims that Britain was concerned about the future of the Cape and especially the Simonstown naval base and also black rights. I think it was the pursuit of gold even if it does mean agreeing with the communist Eric Hobsbawm.
He is far too polite about the “de-colonisers”. They are desperate to hammer the square peg of reality into their round-hole of a theory. To this end they claim knowledge they don’t have, gloss over inconvenient facts, erect theories that don’t bear scrutiny and when all else fails: lie. Biggar tackles all of these offences against objectivity with a calmness and a politeness that you can bet his detractors would never return.
The communists – because they are obsessed with such things and are past masters at projection – like to claim that there was an “ideology” of Empire. Biggar thinks this is nonsense. As he says:
There was no essential motive or set of motives that drove the British Empire. The reasons why the British built an empire were many and various. They differed between trader, migrant, soldier, missionary, entrepreneur, financier, government official and statesman. They sometimes differed between London, Cairo, Cape Town and Calcutta. And all of the motives I have unearthed in this chapter were, in themselves, innocent: the aversion to poverty and persecution, the yearning for a better life, the desire to make one’s way in the world, the duty to satisfy shareholders, the lure of adventure, cultural curiosity, the need to make peace and keep it, the concomitant need to maintain martial prestige, the imperative of gaining military or political advantage over enemies and rivals, and the vocation to lift oppression and establish stable self-government. There is nothing morally wrong with any of these. Indeed, the last one is morally admirable.
One of the benefits of the British Empire is that it tended to put a stop to local wars. How many people lived because of that? But that leads us on to another aspect. Almost no one ever considers what went on before the Empire arrived. Was it better or worse than went before it? Given that places like Benin indulged in human sacrifice, I would say that in many cases the British Empire was an improvement. And if we are going to talk about what went before what about afterwards? He has little to say about what newly-independent countries have done with their independence. The United States, the “white” (for want of a better term) Commonwealth and Singapore have done reasonably well. Ireland is sub-par but OK. Africa, the Caribbean and the Indian sub-continent have very little to show for themselves. This may explain why Britain needed very few people to maintain the Empire. At one point he points out that at the height of the Raj the ratio of Briton to native was 1 to 1000. That implies a lot of consent. Tyrannies need a lot more people.
The truth of the matter is that talk of reparations is rooted in the failure of de-colonisation. If Jamaica were a nicer place to live than the UK, if Jamaica had a small boats crisis rather than the UK then no one would be breathing a word about reparations or colonial guilt. All this talk is pure deflection from the failure of local despots to make the lives of their subjects better.
Biggar has nothing to say about what came after the empire and he also has little to say about how it came about in the first place – so I’ll fill in that gap. Britain acquired an empire because it could. Britain was able to acquire an Empire because it mastered the technologies needed to do it to a higher level and on a greater scale than anyone else. Britain mastered technology because it made it possible to prosper by creating wealth. That in itself was a moral achievement.
Of course, modern Britons don’t actually need to justify the Empire. As I pointed out at the beginning none of us had anything to do with it. You could argue (does anyone actually do this?) that we current-day Britons are the inheritors of the same culture and perhaps we should be ashamed about that. Except that I am not in the mood to condemn a culture that produced the rule of law, freedom of speech, property rights and the Industrial Revolution. Anyway, does anyone seriously think that modern British culture would be capable of giving birth to a second empire? Culture changes. The other argument is that many of us continue to be the beneficiaries of the Empire. At very least those who have started with nothing and yet are still on the hook for reparations are entitled to feel a bit miffed. But one only has to look around to see that most of Britain’s prosperity is much more recent in origin. Sure, that big house might have originally been built from a slaver’s profits but if a more recent person hadn’t kept the roof intact it would be a ruin by now.
A narrative about a rapacious British Empire is being used to first humiliate and shame modern Britons in preparation for their impoverishment and eventual extermination. OK, maybe I am getting ahead of myself here but I’ll bet you some of them of thinking that. There is certainly nothing in the “decolonisation” belief system to prevent it. Biggar’s achievement is to demonstrate that – if you do believe in intergenerational guilt – there is nothing to be ashamed of.
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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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