Monday, July 28, 2014

Peak politician

You don’t hear the Greens talking about “peak oil” anymore, and there’s a simple reason for that. The simple reason is that even the Greens now realise “peak oil” is bollocks. Fracking changed all that. So now, they’re against that.

So we are still nowhere near peak oil, and given how resource economics work, unlikely ever to approach it.

However, we’re a small country, with few naturally occurring sources of hot air and blowhard, and it looks like we might have now approached peak politician.

The evidence for this frightful state of affairs grew even greater over the weekend, with the announcement of a recycled politician needing dialysis several times a day as a candidate for the Mana Party in Te Tai Tonga.

Georgina Beyer, who when last heard from was withdrawing from work while whinging about not picking up political appointments is the latest political retread to enter the hustings.

Because with so many parties this election year with so few real differences between them, and with only so much locally-produced hot air and blowhard available, there just aren’t enough politicians to go around.

Poor lambs.

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Planning for the Unpredictable

Guest post by Randal O’Toole

How do you plan for the unpredictable? That’s the question facing “planning” organisations writing transportation plans for their regions. Self-driving cars will be on the market in the next 10 years, are likely to become a dominant form of travel in 20 years, and most people think they will have huge but often unknowable transformative effects on our cities and urban areas. Yet not a single regional transportation plan has tried to account for, and few have even mentioned the possibility of, self-driving cars.

Instead, many of those plans propose obsolete technologies such as streetcars, light rail, and subways. Those technologies made sense when they were invented a hundred or so years ago, but today they are just a waste of money. One reason planners look to the past for solutions is that they can’t accurately foresee the future. So they pretend that, by building ancient modes of transportation, they will have the same effects on cities that they had when they were first introduced.

If the future is unpredictable, self-driving cars make it doubly or quadruply so. Consider these unknowns:

  • How long will it take before self-driving cars dominate the roads?
  • Will people who own self-driving cars change their residential locations because they won’t mind traveling twice as far to work?
  • Will employers move so they can take advantage of self-driving trucks and increased employee mobility?
  • Will car-sharing reduce the demand for parking?
  • Will carpooling reduce the amount of vehicle miles traveled (VMT), or will the increased number of people who can “drive” self-driving cars increase VMT?
  • Will people use their cars as “robotic assistants,” going out with zero occupants to pick up groceries, drop off laundry, or do other tasks that don’t require much supervision?
  • Will self-driving cars reduce the need for more roads because they increase road capacities, or will the increase in driving offset this benefit?
  • Will self-driving cars provide the mythical “first and last miles” needed by transit riders, or will they completely replace urban transit?

Planners  in Seattle and Atlanta asked participants at the recent Autonomous Vehicle Symposium to help them incorporate self-driving cars in their regional transportation models. Yet the consensus was that no one has any idea about the answers to the questions I asked above. The only prediction that people could come close to agreeing on was that self-driving cars will increase miles of driving as people take advantage of greater mobility more than they increase carpooling.

Self-driving cars are not a black swan amidst the flock of urban planning “knowns”; they are a whole flock of black swans, any one of which could completely sink even the most accurate predictions about all the others.

Some of the planners believed they could make guesses about the effects of self-driving cars and use them to make “sensitivity runs” to estimate the possible magnitude of the effects of self-driving cars on cities. But even if they made such runs, they would have no idea which runs will come close to reality.

“There are no models in planning practices that can predict the emergence of new modes and forms of mobility,” admitted one planner. “Our models haven’t even got the Internet yet. They haven’t got the cell phone. They’re not going to have autonomous cars.” Another agreed: “ITS [intelligent transportation systems] is 25 years old, but our models still don’t account for it.”

We are about to introduce a new technology that will completely transform our society in unpredictable ways, and many of those transformations will start changing travel behaviours and land-use patterns well before 20 years are up. The fact that plans are revised even every five years doesn’t help because many of those plans include costly investments in projects that take decades to complete. Even if new information reveals that those investments are no longer appropriate, once begun the political pressure to complete the projects will likely be too great for future officials to resist.

This means it’s not enough to simply rewrite transportation planning models. We need to rewrite the entire process of urban planning, following four principles:

  1. Instead of writing 20-year plans that pretend to know what a city will need in the distant future, planners should only write short-term plans that solve today’s problems without foreclosing options for the future.
  2. Planning processes should be streamlined so that it no longer takes 10 or more years to plan, design, and build facilities that, a few decades ago, were built in a couple of years.
  3. Urban areas should avoid infrastructure projects that take decades to complete and would make sense only if people completely changed their lifestyles.
  4. New transportation facilities should be “generic” in the sense that they can be used by a wide variety of modes and easily adopted for whatever modes become dominant in the future.

If some of these suggestions sound familiar, that’s because I’ve made them before, particularly in my 2007 book The Best-Laid Plans. The future is unpredictable even without self-driving cars, and I’ve had little faith in the ability of long-range plans to cope with those unpredictabilities. But now even the planners are willing to admit that they can’t cope with the unpredictable effects of this new technology.

I hope that at least some of them are willing to tell that to the politicians  who create the legal requirement for their “plans.”


Randal O’Toole is a Cato Institute Senior Fellow working on urban growth, public land, and transportation issues, and author of the books Reforming the Forest Service, The Vanishing Automobile and Other Urban Myths. In his book The Best-Laid Plans, O’Toole calls for repealing planning laws and proposes reforms solving social and environmental problems without heavy-handed government regulation.
This post first appeared at the Cato at Liberty blog. It has been lightly edited for local context.

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Saturday, July 26, 2014

This would make smokers quit...

[Hat tip Casey Daily Despatch]

Friday, July 25, 2014

Quote of the day: On growing up

“That's one of the hard things about growing up that I'm starting to see
all too often: life isn't just a matter of crossing off a neverending list of
accomplishments, it's more a case of watching on helplessly as yet
another thing is added to the list of things you'll never do.”

- Bob Murphy, Western Bulldogs utility, ‘Father Time ... slam dunked

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Thursday, July 24, 2014

How Regulation Kills Innovation

A guest post this morning from Greg Beato,  and our friends at Laissez Faire Books, who introduce it.

We've talked recently about  disruptive technologies, and there's a reason for that. The world you live in is very hesitant to change. It's difficult to make a significant or meaningful change. This isn't something new to modern times. Take a second to think back through history and come up with some other big game changers.

Henry Ford's assembly line that made the Model T affordable is a good one. How many cars does your family have in your driveway?

Don't forget the Wright brothers' first flight at Kitty Hawk. A trip across the Pacific used to take months. Now it takes hours.

Then there's the rise of computer giants Microsoft and Google. You're reading this via email right now, correct? Still taking photos on emulsion film, or do you take digital photos on your phone?

These ideas changed the way the world functions. The way you live your life. They ended the old business models and created something different, allowing new entrepreneurs and innovators to take that new model and create something even better.

It's the very definition of laissez faire: what happens to the world when people are left to play, tinker, have fun, and innovate a better tomorrow. We're currently living in our ancestors' imaginations, and the future consists of what we can dream up today.

But there are those who aren't too keen on this line of thinking. They're the people who have too much invested in the status quo, who want to keep things just the way they are because they're reaping the advantages. They're the people you really need to look out for. They'll stop at nothing to make sure things stay the way they've always been.

For example, the taxi companies that are so mad about ride-sharing companies like Uber and Lyft.

Or the hotel industry that thinks Airbnb threatens their high hotel rates.

Or even the Fed with Bitcoin. Imagine what the Fed thought when they found out about an anonymous currency they can't control that's actually gaining traction throughout the U.S. and the rest of the world.

Governments at all levels are more likely to side with the status quo than embrace the new technology. They have special interests they need to take care of. They don't want to rock the boat and potentially give up the power and control they've accumulated. And that's dangerous.

Because in a free market, the old guard can't so easily keep out a new idea or technology that threatens to put them out of business. They might be able to force them out of the market, but they're not strong arming-people under the cover of law. Additionally, they can't prevent you from choosing the less expensive or better-quality option. That's how a functioning free market works.

But once you get the grey ones involved (or any of their relatives at the city, or local level), things get a little hairy.

Suddenly, you're not allowed to open up shop unless you fill out the right forms and get approval from the right people. In fact, in some places, there are boards that determine whether the industry needs additional competition. And those boards... are made up of current businesses.

That's right. The people with the most incentive to keep competition out are the ones manning the gates. And the people in power actually think this is a good idea, that it actually helps consumers.

Fortunately, new technology is like gravity. When someone finds a new, better way of doing something, that force is unrelenting. Never-ending. Unstoppable. So the companies that benefited from the old way of doing things, along with their government sponsors, can fight tooth and nail to keep things the way they are... but I wouldn't put money behind them. Progress will win out.

Now, with the power of disruptive technologies in mind... let's turn to today's article. Reason's Greg Beato thinks there's another sector of the economy ripe for a new business model. Unfortunately, the guys in D.C. (as well as governments throughout the rest of the U.S.) have spent the last four years building a new (and insanely expensive) system to manage it, which will impact us even here in New Zealand.

The ACA created a massive piece of regulation that affects millions of people and businesses, raising costs for everyone involved. Now new technologies are popping up that offer better (and less expensive) ways to do what the law requires, and the U.S. government is trying to shut them down.

That’s bad for everyone.

Smart Apps vs. Obamacare

Health care costs in the U.S. have been rising so steadily for so long that containment barely seems possible. Even optimists don't dream of cutting the price tag. As its official name -- the Patient Protection and Affordable Care Act -- suggests, Obamacare aims for affordability, not radical reduction.

But at a time when we're all walking around with more computing power in our pockets than NASA used to send Apollo 11 to the moon, perhaps we should be setting our expectations higher. Is it really so hard to imagine, in 10 years or so, the advent of advertising-sponsored health care? Or at the very least, bulk-purchased cardiology readings for a Netflix-like $8.99 monthly subscription?

The device that could potentially enable such scenarios already exists. The Alivecor Heart Monitor, above, approved for over-the-counter use by the Food and Drug Administration in February 2014, is a shell that fits over iPhones and Android devices. It converts electrical impulses from a user's fingertips into ultrasound signals, which are then picked up by the phone's microphone and processed using Alivecor's app.

Users can email the single-channel electrocardiogram (ECG) produced by the Heart Monitor to their physicians, or they can pay a small fee to Alivecor directly through the app for analysis by a cardiac technician or board-certified cardiologist within 24 hours.

Currently, the heart monitor costs $199. The ECG analysis ranges from $2-12 a pop. In comparison, two researchers who published a study in the February 2014 issue of JAMA Internal Medicine queried 20 Philadelphia area hospitals about the fee they charged for an ECG-and found prices ranging from $137-1,200.

So Alivecor's fees are already quite nominal. But imagine if, say, Google or Amazon decide to incorporate such functionality more seamlessly into their devices. ECG analysis would likely be offered for free or near-free, in return for opt-in consent to share this information with advertisers and other third parties. When you have a heart attack in the future, the beta-blocker coupons will arrive faster than the ambulance.

imageIn 1997, Harvard Business School professor Clayton Christensen introduced the concept of "disruptive innovation," the process by which a "simplifying technology" combined with a "disruptive business model" upsets established markets and radically broadens access to goods or services.

The Model T is a classic disruptive innovation. The PC is another. In a September 2013 white paper published by the Clayton Christensen Institute (CCI), Ben Wanamaker, executive director of CCI's health practice, and Devin Bean, a research associate at CCI, examine the disruptive potential of Obama’s Affordable Care Act.

In their estimation, some aspects of Obamacare encourage disruptive innovation, at least theoretically. To accommodate the millions of new consumers that the individual mandate has created, the "already burdened" health care system will potentially turn to "new care delivery models that leverage less-credentialed practitioners to deliver care for more routine health concerns."

Similarly, employers who are mandated to provide care for their employees will look for the least expensive options available, creating "opportunities for new and disruptive entrants" to offer cheaper alternatives to traditional forms of coverage from established providers.

But while Obamacare creates new health care consumers, it also dictates the kind of health care these consumers must purchase, which severely inhibits innovation. As the CCI white paper suggests, minimum "essential" benefits that can only be purchased through tightly regulated insurance exchanges "put a floor on the low end of coverage."

Because of these policies, Obamacare simultaneously "overshoots the needs of many customers while preventing innovation that could fundamentally lower the cost of care by requiring that insurance plans mimic the legacy state insurance markets."

Obamacare, in short, puts the weight of law behind the status quo. To illustrate this fact, Wanamaker and Bean offer an historical hypothetical. If Obamacare had existed in the 1940s, insurers would have had to offer sanitarium care for tuberculosis treatment, because that was the standard level of care back then.

And even when antibiotics emerged as a cheaper, more effective form of treatment, health care options that didn't include sanitariums would not have been permitted -- at least until legislators got around to removing that service from its mandated package of minimum essentials.

In addition to "lock[ing] customers into outdated, expensive treatment options," Wanamaker and Bean maintain, Obamacare-compliant health plans will, "by virtue of the benefits they cover," funnel most care into "traditional venues of care-the hospital and doctor's office." So ultimately, all the entities that have been in charge as health care costs have soared achieve further entrenchment via Obamacare. Washington loves an incumbent!

"When you are young and healthy, you may not think you need health insurance. But life is unpredictable," goes an Obamacare recruiting pitch at NYC.gov. "Health care is expensive. Making sure that you are covered is very important." Granted, even one-percenters who can afford concierge genetic sequencing can't foretell car crashes or autoerotic asphyxiation mishaps.

But new technologies are making our medical destinies far more predictable than they once were. And the high price of health care isn't nearly as predestined as the Obamacare pitch insists.

In reality, we are heading toward a world of highly distributed and comparatively cheap diagnostic tools that will allow patients to self-collect health data more assiduously than a team of ICU nurses. The Cellscope Oto (left) turns your smartphone into a digital otoscope for viewing the inside of a person's ear.

The Scanadu Scout (right) , a small, puck-shaped device scheduled to hit the consumer market in 2015 with an estimated retail price of $199, is an attempt to approximate the tricorder of Star Trek fame-a sensor-rigged device that can quickly monitor your temperature, blood oxygenation, respiratory rate, and more, then make an automated diagnosis using intelligent algorithms.

In addition, simple but ingenious innovations, such as "smart pill bottles" that track whether or not you've taken your medication, or predictive analytics programs that identify which patients are least likely to stick to drug therapy regimens and thus need more intervention from caregivers, promise to significantly improve outcomes.

Eventually, all of the data that devices like the Scanadu Scout produce will be stored, shared, and compared as never before, producing more accurate patient histories, more closely tailored diagnoses, and better predictive insights.
The transition to this new world won't always go smoothly, of course. Making powerful diagnostic tools available to people who remain completely stymied by the self-checkout line at CVS promises to be a recipe for both comedy and tragedy.

But health care is on the verge of becoming far more individualised, far more contextualized and collaborative, and most of all, far more ubiquitous. And as this happens, the Affordable Care Act will start to look more and more anachronistic, a 20th-century solution imposing itself onto a rapidly shifting set of 21st-century conditions.

Indeed, imagine if, in the late 1990s, the federal government decided to ensure our right to affordable music by making every American purchase a monthly subscription to the Columbia House Music Club or Tower Records. That would have been great for the Columbia House Music Club, Tower Records, and, say, Sisqo, but would it have been great, in the long run, for the American people?

If you want to pay hundreds of dollars for a traditional ECG, many health care providers will accommodate your desires. But as the Alivecor Heart Monitor suggests, cheaper alternatives exist.

Obamacare doesn't prohibit consumers from pursuing these new cheap alternatives. Nor does it prohibit companies from offering products and services that could radically reduce prices. But unfortunately it will be a long time before you can expect an iPhone a day to keep doctors and insurance agents completely at bay.

As long as those $2 ECGs from Alivecor can detect a pulse, you're going to have to keep paying substantial premiums to Aetna or Blue Cross each month. Essentially, Obamacare establishes an obsolescing way of doing business as a pre-existing condition.


Greg BeatoGreg Beato is a contributing editor for Reason magazine. He has written for dozens of publications, including SPIN, Wired, Business 2.0, and the San Francisco Chronicle.
This article originally appeared here on Reason.com. It has post has been reposted here from Laissez Faire Books.

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Wednesday, July 23, 2014

Economics for Real People: How Economies Grow

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Exams are over, holiday have finished, and students are hard at it again. That means Auckland Uni Economics Group meeetings start up again. Here’s what’s on tomorow night:

Hi everyone,
We hope that you are all set for another semester of classes. And more importantly, we hope that you are all set for another great semester of Economics Group seminars.
Economic ideas, as we have seen, change the world and any student of economics must be familiar with the range of ideas that exist. This is especially important as economists struggle to explain what has happened in recent years to the world's financial system.
So far this year, we have looked at such topics as: The Broken Window Fallacy, The Division of Labour, and (most recently) The Clash That Defined Modern Economics.
This week we resume our programme by looking at How Economies Grow (or, in other words: Capital and its Structure).
What does growth look like? What exactly grows? What part do savings and credit creation play? And what’s the difference between growth and progress—and how do different schools of economic thought differ on this and other related questions?

    Date: Thursday, 24 July
   
Time: 6-7pm
   
Location: Case Room Two, Level Zero, Business School (OGGB)
                          (plenty of parking below, entrance off Grafton Rd)

All welcome to attend. We look forward to seeing you there.

PS: Check us out on the web at http://www.facebook.com/groups/191580464208836/

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It’s not investors driving up house prices [updated]

image

See that bit of paper above? That’s a building permit from 1975.

Cost of the permit: $3.

That is not a misprint. The cost of the building permit in 1975 was three dollars. (That’s thirty dollars in today’s devalued money.) 

The most recent permit I received from council cost my clients nearly ten thousand dollars. That, too, is not a misprint. A ten with three zeroes.  Sure, it was for more than just a garage, but this might suggest to you one of the reasons house prices are way higher now in terms of what you and I earn than they were in 1975.

Think about it. Could it be that the cost od producing them has been made way higher?

Speculators are always blamed for rising prices. But they’re just a convenient scapegoat.  In the absence of other reasons for rising prices, how would  speculators gain? If their own purchases are enough to move the market up, then so too would their sales.

Investors in Auckland housing are one of the latest scapegoats, but as president of the Auckland Property Investors' Association Andrew Bruce argues,

Faced with purchasing a property, investors are driven by our own sets of financial criteria whereas home-buyers are more likely to be governed by emotions.
After all, investors are acutely aware that a high purchase price will only have a negative impact on the net return.
What then is the incentive for investors to drive up home prices?

The obvious response, of course, is “capital gain.” But with mortgage payments well above rental returns on most properties (and the higher yielding parts of Auckland offering little in the way of capital gain) that takes some while to pay off, even if the gain is sufficient to outweigh years of payments.

Agree with him or not, he makes a strong argument that one of the main reasons for rising house prices is the rocketing cost to produce houses. And he points to one main culprit: “the skyrocketing cost of doing business with council.” He has examples too:

An APIA member recently completed a basic one lot subdivision of his rental property within the Auckland region.
    The project started in July 2012 and took a year to complete, this was after extensive delays throughout the process.
    While the actual physical work involved (i.e. installation of the underground infrastructure) took only three weeks, the paperwork took 49.

Most New Zealanders who’ve had dealings with councils will echo that story: long delays that benefit nobody but council employees. And the added cost is significant, adding around 20% to the cost of completing that subdivision.

Another member who has built numerous minor dwelling units throughout Auckland over the past 13 years has also felt the price-pinch.
    Back in 2003 he intimated to me that obtaining a consent for a minor dwelling unit cost $2,000.
    Recently he received approval for a similar consent which cost $42,000.
    This is the equivalent of a 2,000 per cent increase in price over 11 years.
    Included in the $2,000 council fee back in 2003 was a $684 charge for a water meter.
    Today the price for a water meter and connection from WaterCare is a minimum of $12,770 which is a 1,767 per cent increase over 11 years
    The cost increases described above only account for direct council costs.
    One must also anticipate the significant pecuniary burden associated with time delays and uncertainties which in many cases spell the demise of a project before it even starts.
    For a building project to be economically viable and therefore be green-lighted by financiers, investors, and developers, these costs have to be justified by the final sale
price.

No wonder then that, even with rising house prices the model of speculative building is broken. The model of speculative building is broken not because of investors pushing up the sale price of houses, but because the cost of of producing land and houses is going through the roof.

That won’t be cured until it’s possible once again for builders to buy an inexpensive piece of land, and build and sell at a profit an inexpensive home on it.  In other words, not until the model for speculative building is fixed.

If Paul Bennett wants to get rid of loopy rules, if her wish to get rid of them is not just an electioneering gimmick, then let her start there: with all the things that get in the way of that small builder making a profit from a small house.

It could be the best thing she ever did to help New Zealanders.

UPDATE: Rodney Dickens’s latest housing report gives some indication that the hurdles in Auckland are greater than elsewhere – despite the greater demand for Auckland housing, since 1995 supply has been increasing at a rate well below the national average.

image

Could Auckland learn something from Otago’s councils?

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Quote of the Day: Artist as revolutionary


Venus, Michael Newberry, 2008, oil on linen, 48 x 48 inches
Artist Michael Newberry painted that glorious nude, above. Venus. Inspired by "the feeling/image/theme…: a beautiful woman free to be, from the inside outwards."
Yesterday, he posted these cogent thoughts:
There is a lot crap going down worldwide: religious warfare, American fascism, unethical scientists promoting political agendas, educators that want government policy to rule young minds, instead of individual teachers and parents - I see so much stupid stuff going down and so few right answers it's painful. And when I ask what could I do about it, I realize that I am.
    Few of you will make the connection but the beautiful female (or male) nude in art is a symbol of individual freedom and happiness. That is one of the reasons that religions repudiate godlike nudes - if people are unique, happy, and free then religion or government have no hold on them.
    So instead of taking up arms, or political power, or infiltrating teachers unions I paint about freedom. I have a hope that brilliant individuals will move obstacles out of their way, not take any shit from anybody or government, and will and continue to reach their outer reaches of fulfilment - and in doing so will become examples to others about what a well lived life looks like.
Amen.

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Tuesday, July 22, 2014

Offended yet?

Oops.

Manurewa MP Louisa Wall and the South Auckland group Warriors of Change are offended. They’re offended by some year-old cartoons.

Cartoons by Al Nisbet about the Government's breakfast in schools programme ran in The Press and the Marlborough Express in May last year.
    One depicted a group of adults, dressed as children, eating breakfast and saying: "Psst ... If we can get away with this, the more cash left for booze, smokes and pokies."
    The other depicted a family sitting round a table littered with Lotto tickets, alcohol and cigarettes and saying: "Free school food is great! Eases our poverty and puts something in you kids' bellies."

Louisa and her made-up allies are so offended they’ve rolled out their feelings of offence before the Race Relations Commissioner, the Human Rights Commission, and now the Human Rights Review Tribunal, all in hope someone will stop laughing long enough to take her seriously.

Offended?

What sort of “warrior” picks a fight over a cartoon, for Galt’s sake?

You say you’re offended? I say so what.

Here’s Steve Hughes.

[Hat tip Ian J.]

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Capitalism vs. crony capitalism

Guest post by Richard Ebeling

In the minds of many people, the term “capitalism” carries the idea of unfairness, exploitation, undeserved privilege and power, and immoral profit making. What is often difficult to get people to understand is that this misplaced conception of “capitalism” has nothing to do with real free markets and economic liberty, and laissez-faire capitalism, rightly understood.

During the dark days of Nazi collectivism in Europe, the German economist, Wilhelm Röpke(1899-1966), used the haven of neutral Switzerland to write and lecture on the moral and economic principles of the free society.

“Collectivism,” he warned, “was the fundamental and moral danger of the West.” The triumph of collectivism meant, “nothing less than political and economic tyranny, regimentation, centralization of every department of life, the destruction of personality, totalitarianism and the rigid mechanization of human society.”

If the Western world were to be saved, Röpke said (and after the war, he did more than most to save it), it would require a “renaissance of [classical] liberalism” springing “from an elementary longing for freedom and for the resuscitation of human individuality.”

What is the Meaning of Capitalism?

At the same time, such a renaissance was inseparable from the establishing of a capitalist economy. But what is capitalism? “Now here at once we are faced with a difficulty,” Röpke lamented, because, “capitalism contains so many ambiguities that it becoming every less adapted for an honest spiritual currency.”

As a solution, Röpke suggested that we “make a sharp distinction between the principle of a market economy as such . . . and the actual development which during the nineteenth and twentieth centuries has led to the historical foundation of market economy.”

Röpke went on, “If the word ‘Capitalism’ is to be used at all this should be with due reserve and then at most only to designate the historical form of market economy . . . Only in this way are we safe from the danger . . . of making the principle of the market economy responsible for things which are to be attributed to the whole historical combination  . . . of economic, social, legal, moral and cultural elements  . . . in which it [capitalism] appeared in the nineteenth century.”

In more recent times it has become common to use the term “crony capitalism,” implying a “capitalism” that is used, abused, and manipulated by those in political power to benefit and serve well connected special interest groups desiring to obtain wealth, revenues and “market share” that they could successfully acquire on an open, free and competitive market by offering better and less expense goods and services to consumers than their rivals.

Corrupted Capitalism vs. Free Market Capitalism

This facet of a corrupted capitalism is, unfortunately, not new. Even as the classical liberal philosophy of political freedom and economic liberty was growing in influence in Europe and America in the nineteenth century, many of the reforms moving society in that freer direction happened within a set of ideas, institutions, and policies that undermined the establishment of a truly free society.

Thus, the historical development of modern capitalism was “deformed” in certain essential aspects virtually from the start. Before all the implications and requirements of a free-market economy could be fully appreciated and implemented in the nineteenth century, it was being opposed and subverted by the residues of feudal privilege and mercantilist ideology.

Even as many of the proponents of free market capitalism and individualist liberalism were proclaiming their victory over oppressive and intrusive government in the middle decades of the nineteenth century, new forces of collectivist reaction were arising in the form of nationalism and socialism.

Three ideas in particular undermined the establishment of the true principles of the free market economy, and as a result, historical capitalism contained elements totally inconsistent with ideal of laissez-faire capitalism – a free competitive capitalism completely severed from the collectivist and power-lusting state.

The Ideas of “National Interest” and “Public Policy.”

In the seventeenth and eighteenth centuries, the emergence of the modern nation-state in Western Europe produced the idea of a “national interest” superior to the interests of the individual and to which he should be subservient. The purpose of “public policy” was to define what served the interests of the state, and to confine and direct the actions of individuals into those channels and forms that would serve and advance this presumed “national interest.”

In spite of the demise of the notion of the divine right of kings and the rise of the idea of the rights of (individual) man, and in spite of the refutation of mercantilism by the free-market economists of the eighteenth and nineteenth centuries, democratic governments continued to retain the conception of a “national interest.”

Instead of being defined as serving the interests of the king, it was now postulated as serving the interests of “the people” of the nation as a whole. In the twentieth century, public policy came to be assigned the tasks of government guaranteed “full employment,” targeted levels of economic growth, “fair” wages and “reasonable” profits for “labor” and “management,” and the politically influenced direction of investment and resource uses into those activities considered to foster the economic development viewed as advantageous to “the nation” in the eyes of those designing and implementing “public policy.”

Capitalism, therefore, was considered to be compatible with and indeed even requiring activist government. In nineteenth century America it often took the form of what were then called “internal improvements” – the government funded and subsidized “public works” projects to build, roads, canals, and railways, all which transferred taxpayers’ money into the hands of business interests interested in getting the government’s business rather than that of consumers in the marketplace.

It also manifested itself through trade protectionism meant to artificially foster “infant industries” behind high tariff walls. Selected businesses ran to the government insisting that they could never grow and prosper unless they were protected from foreign competition, at the expense, of course, of the consumers who would then have fewer choices at higher prices.

Today, it still includes public works projects, but also manipulation of investment patterns through fiscal policies designed to target “start-up” companies considered environmentally desirable or essential to “national security.” It also takes the form of pervasive economic regulation that controls and dictates methods of manufacturing, types and degrees of competition, and the associations and relationships that are permitted in the arena of commerce and exchange both domestically and in international trade.

In the misplaced use of the phrase “American free market capitalism” there is little that occurs in any corner of society that does not include the long arm of the highly interventionist state, and all with the intended purpose and resulting unintended consequences of political power being applied to benefit some at the expense of many others.

Perversely, the interventionist state in the evolution of historical capitalism has come to mean in too many people’s eyes the inescapable prerequisite for the maintenance of the market economy in the service of an ever-changing meaning of the “national interest.”

Central Banking as Monetary Central Planning

Whether in Europe or the United States, the application and practice of the principles of a free market economy were compromised from the start with the existence of monetary central planning in the form of central banking.

First seen as a device for assuring a steady flow of cheap money to finance the operations of government in excess of what those governments could extract from their subjects and citizens directly through taxation, monopolistic central banks were soon rationalized as the essential monetary institution for economic stability.

But the German economist, Gustav Stopler, clearly explained many decades ago in his book,This Age of Fable (1942), the government’s control of money undermines the very notion of a real free market economy:

“Hardly ever do the advocates of free capitalism realize how utterly their ideal was frustrated at the moment the state assumed control of the monetary system . . . A ‘free’ capitalism with governmental responsibility for money and credit has lost its innocence. From that point on it is no longer a matter of principle but one of expediency how far one wishes or permits governmental interference to go. Money control is the supreme and most comprehensive of all governmental controls short of expropriation.”

Once government controls the supply of money, it has the capacity to redistribute wealth, create inflations and cause economic depressions and recessions; distort the structure of relative prices and wages so they no longer reflect the values and choices of the buyers and sellers in the market; and generate misallocations of labor and capital throughout the economy that brings about imbalances of resource uses inconsistent with a market-based pattern of consumer demands for alternative goods and services.

Then, in the face of the market instabilities and distortions caused by the government’s mismanagement of the money supply and the banking system, the political authorities rationalize even more government intervention to “fix” the consequences of the boom-bust cycles their own earlier monetary central panning policies created.

The “Cruelty” of Capitalism and the Welfare State

The privileged classes of the pre-capitalist society hated the market. The individual was freed from subservience and obedience to the nobility, the aristocracy, and the landed interests.

For these privileged groups, a free market meant the loss of cheap labor, the disappearance of “proper respect” from their “inferiors,” and the economic uncertainty of changing market-generated circumstances.

For the socialists of the nineteenth and twentieth centuries, capitalism was viewed as the source of exploitation and economic insecurity for “the working class” who were considered dependent for their livelihood upon the apparent whims of the “capitalist class.”

The welfare state became the “solution” to capitalism’s supposed cruelty, a solution that created a vast and bloated welfare bureaucracy, made tens of millions of people perpetual wards of a paternalistic state, and drained society of the idea that freedom meant self-responsibility and mutual help through voluntary association and human benevolence.

A “capitalist” system with a welfare state is no longer a free society. It penalizes the industrious and the productive for their very success by punishing them through taxes and other redistributive burdens under the rationale of the “victimhood” of others in society who are claimed to have not received their “fair” due.

It weakens and then threatens to destroy the spirit and the reality of individual accomplishment, and spreads a mentality of “entitlement” to what others have honestly produced. And it restores the fearful idea that the state should not be the protector of each citizens individual rights but the compulsory arbiter who determines through force what each one is considered to “rightfully” deserve.

Peaceful and harmonious free market competition in the pursuit of excellence and creative improvement is replaced by the coerced game of mutual political plunder as individuals and groups in society attempt to grab what others have through a redistributive system of government force.

Free Market Capitalism was Hampered and Distorted

The ideal and the principle of the free market economy, of capitalism rightly understood were never fulfilled. What is called “capitalism” today is a distorted, twisted and deformed system of increasingly limited market relationships, as well as market processes hampered and repressed by state controls and regulations.

And overlaying the entire system of interventionist “crony” capitalism are the ideologies of eighteenth century mercantilism, nineteenth century socialism and nationalism, and twentieth century paternalistic welfare statism.

In this warped development and evolution of “historical capitalism,” as Wilhelm Röpke called it, the institutions for a truly free-market economy have either been undermined or prevented from emerging.

As the same time, the principles and actual meaning of a free-market economy have become increasingly misunderstood and lost. But it is the principles and the meaning of a free-market economy that must be rediscovered if liberty is to be saved and the burden of “historical capitalism” is to be overcome.

The socialists and “progressives” twisted and stole the good and worthy concept of liberalism as a political philosophy of individual rights and freedom, respect and protection of honestly acquired private property, and peaceful and voluntary industry, production and trade. It was usurped and made into the “modern” notion of liberalism as paternalistic Big Bother government controlling every aspect of life in the name of the “social good.”

Restoring the Ideal of Free Market Capitalism

The word “capitalism” was used as a term of abuse by the socialists almost from the beginning. But it also meant a system of creative and productive enterprise and industry by free and self-guiding individuals, each pursuing their peaceful self-interests through honest work, saving, and investment. The “self-made” man of capitalism was an ideal and model for the youth of America. The man who was motivated by his own independent self-responsible vision, who built something, new, better, and greater as a reflection of the potential of the reasoning and acting human being who sets his mind to work.

His wealth, if successfully accumulated, was honorably earned in the marketplace of ideas and industry, not plundered and stolen by force and political power. No individual is robbed or exploited on the truly free market, since all trade is voluntary and no man could be forced into an exchange or association not to his liking and consent.

Free competition sees to it that everyone tends to receive and earn a wage that reflects the estimation of his productive worth to others in society. Each individual is free to improve his talents and abilities to make his services more valuable to others over time, and earn the commensurate higher wages from possessing more marketable skills.

Wealth accumulated enables investment and capital formation for the production of new, better and more goods and services wanted by the consuming public, the majority of whom are the very wage-earning workers employed in the production and manufacture of those goods under the market-determined guiding hands of successful businessmen and entrepreneurs.

Free Market capitalism makes the consumer “king” of the marketplace who determines whether businessmen earn profits or suffer losses, base on what they decide to buy and how much they are willing to pay.

It is free market capitalism that helps make each man and woman a “captain” of their own fate, with the freedom about what work and employment to pursue, and the liberty to spend the income they earn in their own personal, desiring way to live the life they value and want, and that gives meaning and purpose to their own life.

No person need put up with humiliation, abuse or disrespect from a bureaucrat or political official who has control over their fate through the power of government planning, regulation and redistribution.

Free market capitalism offers people opportunities and choices as consumers, workers and producers, with the liberty to change course whenever the benefits from doing so seem to outweigh the costs in the eyes of the individual.

Free market, or laissez-faire, capitalism makes this all possible because it rests on a deeper political philosophical foundation based on the idea and ideal of the right of the individual to his own life, to be lived as he desires and chooses, as long as he respects the equal right of others to do the same.

Free market capitalism insists that there is no higher “national interest” above the individual interests of the separate citizens of a free society. In a system of free market capitalism government should no more control money and the banking system than a limited government should control the production and sale of shoes, soap, or salami.

And free market capitalism calls for each individual’s peacefully earned property and income to be respected and protected from plunder and theft, and that includes any created rationale and attempted justification to rob Peter to redistribute to Paul through the coercive power of government.

The good name of “capitalism” has to be recaptured and restored, just as the good name and concept of “liberalism,” rightly understood, should be returned to the advocates of individual liberty and free enterprise.

But this task requires friends of freedom to explain and make clear to others that what we live under today is not “capitalism” as it could be, should be and properly really means.

The reality of that “historical capitalism,” about which Wilhelm Röpke spoke, is the “crony capitalism” that must be rejected and opposed so that free men may some day live under and benefit from the truly free market capitalism that is the only economic system consist with a society of human liberty.


Richard M. Ebeling is a professor of economics at Northwood University. He was formerly president of The Foundation for Economic Education (2003–2008), was the Ludwig von Mises Professor of Economics at Hillsdale College (1988–2003) in Hillsdale, Michigan, and served as vice president of academic affairs for The Future of Freedom Foundation (1989–2003).

Loyal, but why?

If the saccharine-sound of Dave Dobbyn singing Loyal makes your teeth grind, there might be more to your loathing than just the awful nasal whine. It might be that loyalty, in the way he whines about it, is not the value it could be, or – given how popular the sappy song is – people think it is, or would like it to be.

Loyalty is a sub-species of integrity – a reflection of consistency between your principles and your actions. Psychologist Michael Hurd reckons however that, very often, we choose sports teams, friends, even lovers on the basis only of vague or unidentified feelings.  Feelings we never examine any further.  That’s fine when it comes to sports teams (unless you find yourself supporting Collingwood, or England), but not for higher values.

“When it comes time to be loyal — or disloyal — to friends or associates, we’re unclear on what we’re actually being loyal to. As a result we’re left with nothing else but feelings.
    If someone annoys you for a trivial reason, you’ll reject or back away from them without really knowing why, and you might later come to regret it. If someone betrays you for a very big reason, you’re lost without a set of conscious convictions to guide you

Your “loyalty” is based on little more than habit, which offers no guidance on what to do next. Just nagging doubt. On the other hand…

If you live your life consciously, by a set of conscious convictions and principles, then you deliberately select your friends and loved ones accordingly. If you value integrity and honesty, for example, then you not only seek to practice it, but to  find people who do the same. Ditto for any other virtue you consciously hold near and dear to your heart and mind: intelligence, intellectual honesty, productivity, and rationality.
    If you value your ideals consciously, and you seek to uphold them in daily life, then your friends and spouse will be very important to you. They’re important to you because they embody and actualize — in your eyes, and hopefully in reality — your most cherished values. Loyalty in that context is “easy,” in that betraying people who embody what’s important to you would go against everything  you think and most deeply feel.

This is obviously part of a bigger point about holding, developing, and testing your convictions and principles consciously.

It’s generally considered more cool, normal or socially acceptable not to hold any conscious convictions — or, if you do hold them, not to hold them “too strongly.” Or, if you must hold deep, intense or conscious convictions, then at least don’t let anybody know it.
    Not only is this boring and shallow; it makes something most of us do consider virtuous — loyalty — impossible. I suspect this is one reason why so many get attached to their dogs (or cats). These animals possess a consistency and integrity (on a nonconceptual level) of which humans are more brilliantly capable, but rarely display.

Here’s Dave Dobbyn.

Hell no. Just joking.

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How the Welfare State begins …

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Hat tip Power Line: ‘The Morals of the Welfare State

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Quote of the day: “For every rocket fired on Israel, Hamas gets two in return…”

“For every rocket fired on Israel, Hamas gets two in return. Gazans just have to listen
to Israel when it warns them of attacks by phone, leaflets, radio or the final roof-
knocking warning and get away from Hamas. So if you paid attention in elementary
school math class, you’d know that if Hamas fired 0, Israel would fire 0×2=0.” He
adds, “If Israel still fires rockets without provocation, I’ll be pro-Palestinians as well.”
- Farid el-Nasire, co-creator of the Israel Under Attack programme, 
   quoted in ‘Where'd that rocket come from? New site shows you’

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Hurry up and wait

Guest Post

Image: National Park ServiceHere's a story you can tell the next time someone says America needs immigration reform. It's the story of Norma Uy from the Philippines. Back in the '80s, millions of men, women, and children from around the world illegally entered the U.S. But Uy didn't want to go that route.

So 33 years ago, Uy got in line. That is, she started the legal process to enter the United States.

It took a long time, but she didn't want to carry the stigma of an illegal alien in America, even though President Reagan could have granted her amnesty if she had left in the early '80s.

Uy was patient.

Uy was resilient.

And eventually, Uy earned her spot in America.

Because in 2002, 21 years after she started the legal process to get into the United States, Uy finally got her ticket. Her visa to legally enter the United States.

These are the people you want to enter the U.S., right? People who follow American laws before they even enter the country. People who don't think they can earn their place by crossing into the U.S. under the cover of darkness.
Uy was the type of immigrant you want.

But there was a problem. And this type of problem is the root of the immigration situation in America.

When Uy applied in 1981, she had a 2-year-old daughter. A provision in the law allowed parents to extend their visa to their children. Twenty-one years later, however, her baby girl was a full-grown adult. And under current U.S. immigration laws, adults can't obtain a visa through their parents.

In other words, Uy's daughter had to get back in line. The same line that took her mother 21 years to get through.

So Uy faced a problem, one that many people who want to follow the law have to deal with. Should Uy leave her child in the Philippines and move to America? Or should she stay behind with her family and give up her chance at a better life?

This is the real issue behind the current immigration problem. The laws the U.S. has to control the borders and permit people to enter are so complex, and the wait so long, it's keeping out the type of people we should want to let in. Uy, or people like her, could have illegally found their way into the U.S., laid low for a few years, and gotten amnesty.

Now she's stuck in a no-win situation.

Here's something else to consider. The U.S. has had a rough time the past six years. Two presidents trying to meddle, control, and rein in the economy caused the problems of today. People are dropping out of the labour force, and any economic "growth" you hear about in the news is really Fed money manipulations (when that bubble pops, things are going to get real bad).

But even with all this, the country still has a problem with people wanting to live there. You don't see any headlines about Colombia building a wall on their border to stop immigrants from Central America. No one wants to go there. They want to go to the U.S..

People vote with their feet. And the U.S. should be proud that people are willing to leave the country where they were born and raised for a shot at something better. This has been an American theme since the discovery of the New World.

Now, before you start commenting to voice your complaint, I should clarify something. I don't think the borders should be open to everyone. We just need to make it as easy as possible for people like Uy and other law-abiding citizens to get in as soon as possible.

There are people you need to keep out. They'll be the ones trying to illegally enter the country if we make the immigration process simple, easy, and efficient. Everyone else will be hopping in line with the Norma Uys of the world, waiting a couple of months before collecting their visa and starting their new life in America.

But as long as immigration remains a political problem, that won't happen.


This post first appeared at the Laissez Faire Books blog.

RELATED:

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Message to John Minto

Message from Pat Condell to John Minto, Martin Bradbury, Annette Sykes et al …

… and, to my surprise, echoed somewhat by Bill Maher:

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Monday, July 21, 2014

Quote of the day: On responding to Wagner

“… opera audiences … are responding to the heightened atmosphere
of the music-dramas which, as Thomas Mann put it, “implies that the
highest and best available to man is a life cast in the heroic mould.’”

- Simon Williams, Wagner and the Romantic Hero

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The Middle East Friendship Chart

“Friendship” might be the wrong title. It’s not clear that Iraq, among others, is even friends with itself – let alone the Palestinian Authority and its separate heads.

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Head to Slate for the full interactive chart.

[Hat tip Vinay Kolhatkar]

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Politics as horse race

It’s not exactly a contest of ideas out there on the hustings.  Not that you’d know if any ideas were being debated, not if media reports were all you had to go on.

The media, as always, steer clear of ideas and talk only about the race. The polls. The “gaffes.” The details of the campaign to come, without the ideas around which campaigns are supposed to centre. Politics as horse race.

And the polls, the polls! If the polls are reported as your opinion about the parties, but all you heard about the parties is the polls, from whence and based on what would you form your opinions?

News reports are full of the race without the reasons, and the politicians without real mention of their politics.

David was on holiday in Queenstown. He spoke to a sexual predator, and his caucus talked to the media about David. John was on holiday in Hawaii. He spoke to Max and Bronagh, and his caucus talked up John and ignored Jonathan. Not much learned from any of that.

Act isn’t part of the race, except in Epsom, so we only hear about Act-and-Epsom. Colin Craig is standing in some other electorate, and might have  a deal done. What he stands for, other than general creepiness, you wouldn’t really know from reports.

The Greens are wearing suits and trying to appear sensible, so few pointed questions are being asked. DotCon/Hone/Harre/InterMana are trying not to appear sensible, attracting questions mostly about how they’re all getting on.

Mind you, we did hear over the weekend that John Minto wants to banish the Israeli embassy and remind us he opposed the 1981 Springbok tour; and that Winston wants to tax foreigners and promote himself as the apostle of common sense. We learned these things over the weekend, if from that we really learned anything at all.

And we learned that DotCom has a September gimmick to bury John Key. And if it’s true that Glenn Greenwald were to take the time to visit, this last at least has legs.  If his visit is not just an idle claim thrown out by an attention-seeker (will any NZ journalist bother to ask Greenwald himself?), he’s unlikely to be visiting just to swap cooking recipes with Laila Harre.

Mind you, I wonder how many voters actually care if John Key knew about DotCom before or even after the raid on DotCom's house? Or if there’s anything more that would be reported.

Not if there were a poll out that weekend.

China, my China

Our regular Asian/Australian correspondent Suzuki Samurai has more book recommendations for you…

The twenty-first century, it is said, is going to be China's century. The story is a fascinating one, and will be more so as it unfolds. Alas, the masses of information that most people use to form this story they get from China's propaganda apparatchiks through an often gooey-eyed and incurious western media – bushels more chaff than wheat. There is little doubt however, that China is a far better place than it was just a few decades ago. How it navigates the stormy waters of their gargantuan debt, culturally embedded corruption, nationalistic fervour of it's territorial claims, and, albeit slow, demands for political emancipation* will show us what has changed at root.
    Is this a new China? Or is it going to be new, with Chinese characteristics? There are many hundreds of books written about China. Below I mention just a few I commend to your attention which I think gives something of an insight into the story of China's complicated, sad, and truly bizarre recent history.

Lets start with two on Mao:

Mao: The Unknown Story
Book by Jon Halliday and Jung Chang.

This book has already been reviewed on this blog (actually, I think the editor has my copy) [true story – Ed.].
     I'd like to add that while Mao was but a blip in the Chinese timeline, this maniac's impact was so destructive and obscene it's worth another look to get an idea of what a shambles the place was in when he died an unfortunately painless death in September 1976. This book has of course been criticised for embellishments and spurious claims. However, if these criticisms have any validity, they can't take away the fact that if just one chapter in this book of 992 pages were true it would still put Mao at the top of the “Complete Evil Bastard” leader board. Which is a very bg board.
    Which brings me to another book on Mao and more importantly, his court...

The Private Life of Chairman Mao
A Memoir by Zhisui Li.

Li was Mao's personal physician for nigh on two decades, an unenviable job for anyone averse to tending to a stinking, sexually predatory, disease-spreading ball of puss whose indifference to suffering in others would combine to form an addled mind with immeasurable power over life and death; including of course, the Doctor's.
    What Sinophiles will find instructive in this book is how Mao's court functioned (if by “function” you means chaos), which of the main players in this game of chaos went on to be part of the current China, and, to my mind most importantly, how culture and politics overlap in China.

How China Became Capitalist
by Ronald Coase & Ning Wang

This book is more scholarly than the previous two mentioned. Centenarian & Nobel Laureate in Economics, Ronald Coase, (with Ning Wang) has written a very detailed political and economic look at how China got to where it is now from the miserable leftovers of Mao's regime.
    In short, China became capitalist hap-haphazardly, accidentally, and at times it looked like not happening at all. With some well intentioned, but ignorant, pragmatists having to outmanoeuvre old guard communist hard-liners at every juncture, they still managed to not-so-much put in place policies to enable capitalism to flourish, but were able to 'test' ideas by allowing small-scale trials that the population at large were engaging in themselves.
    Once news of these trials got through to the power brokers, they'd allow it elsewhere, and so on and so forth. This spontaneous flourishing of enterprise became unstoppable and, they knew, very necessary if China was ever going to become a rich and powerful country – this last being especially important to Chinese.

Which rounds off nicely to a  book which should be of interest to anyone that wants to have a crack at doing business in China...

Poorly Made in China
An insiders account of the tactics behind China's production game.
by Paul Midler

The name of this book would suggest you might want to avoid doing business in China. Actually Midler is all for it. In simple language, real example, and anecdote he shows what to look out for - and there is a lot to look out for, that's for sure.
    When not writing, Midler is an expert in the hold-your-hand kind of way; that is, for the right fee he'll show you how to get the deals done in China. He speaks the language, and has heard it all. The book itself is at once hilarious and astonishing. Chapter after chapter of real examples of the shenanigans and rip-offs that inexperienced wide-boys will weather should they go in head first and ill-prepared. This book is good fun, but essential to anyone who wants to dive in and get their widgets made in China.

Here’s Brian Eno:


*Commentator Gordon Chang reports that there are many hundreds of thousands of protests of more than five hundred people in China per year. This data he often uses to suggest that there is growing disillusionment with the government. Actually, the protests I've seen, heard, and read about are usually ones attacking some local bureaucrat, maybe a mayor, and sometimes property developers. When mentioning the government, the protesters invariably say they respect or even love the government and that they call on the government to do more to help them fight the targets of their aggression. As for demanding democracy: nonsense.

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Friday, July 18, 2014

Friday Morning Ramble: Edition #2001 [updated]

Did you know:  this week, in 1917, the Royal House of Saxe-Coburg-Gotha changed its name to the less German sounding "House of Windsor””  Thought you’d like to know that. (If you like, you can brag about being a co-holder of the World Cup?)

Elsewhen:

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Malaysian Airlines plane MH17 is down, but the cause and those responsible is still unclear. [UPDATE: “US intelligence agencies have confirmed that the aircraft was shot down by a surface-to-air missile, but it is unknown who launched it.”]
Ukrainian Buk Air Defense System Allegedly Deployed Near Donetsk Yesterday; Questions Still Linger – MISH’S GLOBAL ECONOMIC TREND ANALYSIS
Q: What was the Malaysian jet doing over a war zone? – Paul Marks, NEW SCIENTIST

“… depends on whether this was (a) an accident by Ukrainian forces, or (b) an accident by Russian or pro-Russian forces, or (c) an intentional act, in which case pro-Russian rebels would be most likely culprits (since it is hard to come up with a reason why Ukraine or Russia would intend something like this). Accidents like this happen (see here or here), but when they do they change the game politically.”
The Downed Malaysia Airlines Plane Is a Game Changer for Ukraine – Peter Feaver, FOREIGN POLICY

“By any rational standard, the aggressor in war is culpable for the death or injury of civilians on both sides. But the laws of war effectively push the blame from Hamas to Israel.”
How the International Laws of War Abet Hamas, Undercut Israel – Elan Journo, BREITBART
The Slaughter of Innocents – David Rothkopf, FOREIGN POLICY

imageDoes Auckland Council do empire-building better than anyone?
Like Russian nesting dolls, Auckland Council secretaries need secretaries – TAXPAYER’S UNION

Nothing stays static, least of all export destinations from a small country like ours.
Export growth – HOME PADDOCK

“Arguments for digital piracy are drivel – it’s high time we steered away from this cultural cliff.”
“Fifteen years of utter bollocks”: how a generation’s freeloading has starved creativity – NEW STATESMAN

Remember when Formula One cars looked and sounded beautiful? Here’s a wobbly look and listen from a parade of classics at Silverstone.

 

“Who would have thought? … Having a volcano under an icesheet makes a difference.”
Surprise, West Antarctic volcano melts ice – JO NOVA

“"'Where the disagreement comes is that Dr. Christy says the climate models are worthless and that there must be something wrong with the basic model, whereas there are actually a lot of other possibilities,' Dr. Mears said… To say "there are actually a lot of other possibilities" is a complete fraud--the whole question was whether they know the relevant possibilities and their magnitude. Which they didn't.”
Skeptic of Climate Change Finds Himself a Target of Suspicion – via THE PURSUIT OF ENERGY

It’s gone! Any reason Nick Smith’s Emissions Trading Scam shouldn’t be next? And good reason?
Australia’s carbon tax has been axed as repeal bills clear the Senate – NEW.COM.AU
End of the carbon bubble – Alan Moran, CATALLAXY FILES

“An independent Scotland would be a rich country with terrible prospects.”
The economics of Scottish independence: A costly solitude – ECONOMIST

“Libertarians should welcome this flourishing of all types of literary writing, especially if we hope to win the hearts and minds of the public at lar
The Flourishing of Libertarian Literary Writing – Matt McCaffrey, CIRCLE BASTIAT

What’s the difference between libertarians and conservatives? Hayek and John Stossel explain.

But, but …
Who’ll Build the Roads? – John Stossel, CAPITALISM MAGAZINE

But, but …
What About Drivers Licensing? – Michael LaFerrara, PRINCIPLED PERSPECTIVES

Yaron Brook from the Ayn Rand Institute discusses inequality and “rockstar” economic historian Thomas Piketty…


““If resources are not fixed but created, then the nature of the scarcity problem changes dramatically. For the technological means involved in the use of resources determines their creation and therefore the extent of their scarcity. The nature of the scarcity is not outside the process (that is natural), but a condition of it.”
The Liberating Theory of Resourceship – MASTER RESOURCE

Brazil, Russia, India, China and South Africa (the increasingly economically powerful BRICS) have decided the IMF is not for them, and no-one is quite sure what that means.
Guest Post: BRICS Against Washington Consensus – Pepe Escobar, ZERO HEDGE 
Delusional IMF “delighted” to be marginalized by BRICS – Simon Black, SOVEREIGN MAN 
BRICS give greenback the bird – MACROBUSINESS
The BRIC nations are taking the next step towards ending the dollar as world reserve currency?Keith Weiner, FACEBOOK

Meanwhile …
Steve Forbes Promotes a Gold Standard – CIRCLE BASTIAT

“America’s antitrust laws are administered by a flourishing establishment of academics, regulators, lawyers, judges, and think-tank analysts whose mission in life is to torment businessmen. Want to see how they operate?”
Scholars with Thumbscrews: Antitrust’s Predatory Academics – VOICES FOR REASON

Remember when Microsoft was eviscerated by the DoJ, and America’s appalling antitrust laws? This is Act III.
Blaming Rearden for the Vandals Sacking His Mills – VOLTAIRE PRESS

“In other words, Russ and his colleague begin to empiricise the costs of cronyism in the U.S."
The Relationship Between Political Connections and the Financial Performance of Industries and Firms – Russ Sobel & Rachel Graefe-Anderson, MERCATUS CENTER

“A great explanation of the difference between the two.”
Richard Ebeling: Free Market Capitalism vs. Crony Capitalism – AGAINST CRONY CAPITALISM

A new economic measurement of an economic system shows, again, just how poor GDP is at accurately measuring an economic system. “In 2013 GO was 76.4% larger, and GDE was 120.4% larger, than GDP.”
Gross Output: J.M. Keynes versus J.B. Say – Steve Hanke, GLOBE ASIA

“Say’s insights continue to challenge interventionist economists to this day. Everl Schoorl’s new biography sheds new light on Say’s life and works, writes Carmen Dorobat. This audio Mises Daily is narrated by Keith Hocker.”

image

“The city needs places of solace, calm, order and beauty – even prettiness. But prettiness and concealment are anaesthetic. The urban mind needs its regular confrontations with tangle, too, a bracing shock that places the world in perspective and informs us, without either warmth or rancour, that our lives are enmeshed in a vital mechanism.”
Cities thrive most when they are a tangled mess – Will Wiles, AEON

image“The current epidemic of gluten intolerance says more about our psychology than our physiology.”
Time for some grains of truth about wheat and gluten – NEW SCIENTIST

Eurotrash do Fountainhead? The clash will be colourful.
The Fountainhead review – Ivo van Hove's smouldering take on Ayn Rand – GUARDIAN

“No more scientifically valid than a Buzzfeed test.” Ouch.
Why the Myers-Briggs test is totally meaningless – VOX

Now, this is how you catch a fly ball!

Peer review isn’t what it used to be, or ever was.
Academic Fraud and the Peer Review Process – Joseph Salerno, CIRCLE BASTIAT

“So what, exactly, do consumers have to fear? To find out, Popular Science chose 10 of the most common claims about GMOs and interviewed nearly a dozen scientists. Their collective answer: not much at all.”
Core Truths: 10 Common GMO Claims Debunked – Brooke Borel, RICHARD DAWKINS FOUNDATION

So, this is how you run a think tank!
Lunching for Liberty: Some Reflections on Britain’s Institute of Economic Affairs – Jeremy Shearmur, HETSA

From the I-Could-Have-Told-You-That file: “Giving up alcohol for a month is pointless for people’s health, says a leading liver expert.”
Dry July isn’t working – WHALE OIL

"It turns out that aliens are considerate. They seldom disturb earthlings during working or sleeping hours. Rather, they tend to arrive in the evening, especially on Fridays, when folks are sitting on the front porch nursing their fourth beer, the better to appreciate flashing lights in the heavens..."
Economist Chart on UFO Sightings – GEEK PRESS

Who wants to buy Tracey Emin’s used bedclothes? They’re yours for a trifling 2.54 million pounds.
Artist Tracey Emin's messy bed sells for $4.4 million – AOL

Kristin Hersh is coming to New Zealand in August!

And Nick Cave in December!

And Wagner tomorrow … Tristan and Isolde! Here, sung by the stunning Waltraud Meier, as the opera’s final resolution, is the only six-minute orgasm set to music. (If this doesn’t move you, see if you can trade in your current model for a used soul on TradeMe, it will be more use.)

Monk’s not here, but he was in concert in Paris in 1969, and you can now see that on YouTube!

[Hat tips Archinet , Jazz on the Tube, Neil Miller, Carbon Dioxide, Greg Davis, Neil Miller, Stephen Hicks, James Stannard, Paul McKeever, End the Debt Draft, Russell Beaumont]

Thanks for reading, and have a great weekend.
Maybe I’ll see you at Tristan!
Cheers
PC