We'll chalk this up as a victory for free markets, capitalism and globalisation then

We'll chalk this up as a victory for free markets, capitalism and globalisation then

The Lancet tells us, in shocked and disapproving tones, that there are now more fatty lardbuckets on the planet than there are undernourished people. We simply cannot bring ourselves to think of this as being a bad thing. Rather, we consider it to be a massive victory for the economic policies of the last few decades. A victory for capitalism, free markets and globalisation.

A ridiculously silly complaint about the national living wage

A ridiculously silly complaint about the national living wage

We should emphasise here that we are not in favour of Osborne's new national living wage. The correct answer to some people being perceived as having too low an income is not to start price fixing, messing with the market. Instead it is for those who insist that those incomes are too low to put their hands into their own pockets and top up those incomes they perceive as being too low. Yes, it is simply moral that those doing the insisting do the paying.

Obama is wrong about the difference between capitalism and communism

President Obama recently told Cuban kids not to worry about the philosophy of communism or capitalism, but just go with what works. I have little problem with that because most people are indeed not bothered with matters of philosophy, and we know what works – and it isn’t communism. So if they do what works they will end up as capitalists.

But I do get angry when it is suggested that there is ‘little difference’ to choose between these two philosophy. The trouble is, that there is very little difference between communism and what’s called capitalism these days, largely because our politicians do not understand the philosophy themselves.

Maybe it’s just my recent speed-dating of Ayn Rand rubbing off on me, but I think we need to promote a much deeper understanding of the principles underpinning our system, in particular their ethical roots, nature and results.

Obama, for example, is at pains to point out that capitalism is just fine, provided that we make sure it has a proper ethical dimension. Which shows that he thinks that, by itself, it doesn’t, and that it somehow needs to have morality regulated into it.

Yeah, well what about the ‘moral' basis of communism? It’s not capitalism that murdered 3,000 people a day when it was going strong (add them up: Stalin, Mao, Pol Pot’s purges just for starters). And capitalism at least treats people like human beings rather than as tools in someone else’s thinking, and respects their lives, families and property. In Cuba, you have a cow and because your family is starving you kill it to eat. Then you go to jail because it’s not ‘your’ cow, it’s the state’s cow. How moral is that? 

Sure, you have to be nice to communist leaders if you want them to talk to you and maybe then have an impact on them; but there must be ways of letting them know that as a matter of plain fact, it’s communism that stinks, not capitalism, both in theory and practice. The general mass of their own population, of course, already know that.

The liberal case for 'Leave'

The EU referendum campaign is presenting us two competing choices. On the one hand a vision of Britain as part of a steadily-integrating EU (at whatever speed) or a vision of Britain completely outside it.

For the Remain side, we are required to anticipate what may happen over the next generation which, if the last 40 years are anything to go by, will mean a gradual growth of EU power into more and more areas of competence - the ratchet towards “a country called Europe”.

The vision of Britain outside generally uses a number of arguments employed over a long period: of the need to regain our sovereignty and become a self-governing democracy again; to have the flexibility to deregulate; to spend the UK’s EU contributions on something better inside the UK; to drive forward better trade deals with countries beyond the EU; and to constrain immigration.

However let’s take this from a different angle and set out a third vision - a Leave proposition that rejects some of the arguments outlined above. In short, a liberal case for Leave.

Read more.

Why not get all Marxist about the libraries?

We've another of these dirges about how the libraries are under such great threat:

Nearly 350 libraries have closed in Britain over the past six years, causing the loss of almost 8,000 jobs, according to new analysis.

In a controversial move that sparked protests by authors including Philip Pullman and Zadie Smith, councils across the country have shut their reading rooms in an effort to make deep savings.

Children’s author Alan Gibbons warned the public library service faced the “greatest crisis in its history”.

All of which brings out our inner Karl Marx. Who did insist that the forces of production (ie, technology) determined social relations. And if we're to be a little more narrow about this, technology determines, or at least should, how we go about doing certain things. The economic historian Brad Delong has long pointed out that the university teaching style of a lecture is really just a hangover from medieval days. When books were vastly expensive (a scholar might hope to accumulate a library of perhaps a score volumes over a lifetime) then having one person reading that very expensive product to 200 made some sort of sense. When a copy of the book costs less than the hourly wage of the reader perhaps less so.

So it is with libraries. When books were much more expensive than they are today then increasing the Solow Residual (in exactly and entirely the manner that Uber and so on do today, the sharing economy) through reuse and lending made great sense. But technologies change, relative prices change. It may or may not be true that we have reached that tipping point just yet, where the value of the books being lent is less than the cost of running the lending system, but we think we can all see that that is going to happen at some point.

The point is thus not that libraries are closing, nor that we should all fight the power to prevent it. What should actually be the discussion is, well, do we need libraries any more? And if we still do then when won't we?

But of course, as C. Northcote Parkinson pointed out, there's nothing as conservative as a bureaucracy considering its own existence.

Ooooh the outrage over Tesco and the other supermarkets

That Tesco's brands a few of its products with the names of fictitious farms is amusing, as is the outrage that this has brought forth from the usual suspects. But then matters take a turn for the worse as we get a question of such driveling stupidity as to potentially make our brains leaks from our ears. Or possibly to ponder whether this has already happened to the questioner. We refer to this from Yvonne Roberts:

How have we allowed a system to emerge that squeezes the whole supply chain in the name of profit and seduces us into ignoring our carbon footprint for that dubious consumer privilege called “choice”?

For this is the point and purpose of having an economy in the first place. Both Adam Smith and Frederic Bastiat tell us that we must always look at economic questions from the point of view of consumption. And we can and do go further than that ourselves: the point of this whole economy thing is to maximise the consumption possibilities of the population. What is to be consumed, how such consumption is to be valued, being the choice of said population. If choice is what said people value then an increase in such choice is an addition to the value they gain from consumption: which is, again we insist, the reason we have this whole structure of markets, exchange, production and all the rest. This is the very purpose of our efforts: to increase consumption opportunities.

Profit is simply a method of keeping score along the way. If you make a profit in your production process then that means that you are adding value. The value of your outputs is greater than the value of your inputs. More accurately, the alternative uses of those inputs would produce less value added for consumers to enjoy. Thus profit is a good thing, losses bad, for losses indicate that you are subtracting, rather than adding, that value which can then be consumed.

If growing a pig in Belgium, slaughtering it in Germany and eating it in England produces more value for the consumers to consume than to grow, slaughter and consume a similar pig in England then so be it: this is the very point of it all, to produce the greatest value of output that may be consumed from the limited resources at our disposal.

Choice, consumers, consumption, these are not things to be disdained from the comfort of an Islington eyrie, they are the entire damn point of having a society or an economy in the first place.

Take the Easter egg. The salt may have come from China; palm oil from south east Asia; whey from New Zealand; sugar from the Caribbean; cocoa from South America, on and on. Britain imports food from more than 180 countries.

Ain't it just fantabulously wondrous?