Friday, 31 July 2015

Friday Morning Ramble

A random walk through a few things I was going to talk to you about this week, but ran out of time …


imageSo the “Adam Goodes being booed” saga has now jumped the Tasman, even though no bastard here knows who he is.
Still … you should. You really should.
Goodes no certainty to return 
              – AFL.COM.AU
Please fill me in on what has happened today in the Goodes booing issue? 
              – John Harms, FOOTY ALMANAC
Who was Adam Goodes talking to on Friday night?
              – Peter Baulderstone, FOOTY ALMANAC, June 3
Fans who boo Goodes are bigots: Coach Scott 
              – GEELONG CATS
A guide to busting the Adam Goodes excuses 
              – Lachie Gaylard, FOOTY ALMANAC
UPDATE: Captains unite: Enough is enough – AFL.COM.AU

Turns out only 30 per cent of new mortgage loans by value over these 10 months were to “investors,” whereas 69 per cent were to owner-occupiers. So …
Lending to investors: still no smoking gun – Michael Reddell, CROAKING CASSANDRA

Wealth inequality? Don’t blame Thomas Piketty’s villains. Blame local government, whose meddling in property rights causes artificial scarcity in housing.
Local Governments Are The Source Of Housing Inequality – Chuck DeVore, THE FEDERALIST

“Building and Housing Minister Nick Smith has seized on a National Construction Pipeline Report as proof his policies are working… But his rosy predictions are lost on urban development commentator Hugh Pavletich. ‘Out-of-control house price inflation tells us all we need to know about the success and failure of Nick Smith’s housing policies in Auckland.’”
Housing expert dismisses Smith's Pipeline reportChris Hutching, NBR

Seems like the Nick Smith building performance narrative has been shot to pieces within a few hours …
New dwelling consents were down overall last month, but up in Auckland and flat in Christchurch – INTEREST.CO.NZ
Building approvals tipped to fall – YAHOO NEWS
Building Consents Issued – STATISTICS NEW ZEALAND

The conjunction of the dollar and the gun.
How for-profit prisons have become the biggest lobby no one is talking about – WASHINGTON POST

“Volumes of research and centuries of experience do not bear out claims that immigrants ‘take our jobs,’ don’t learn English, and fail to assimilate. But the idea that immigrants could vote to upend our relatively free economy has an air of credibility. It is arguably the best argument against liberalising immigration.” However…
How Good Is the Best Argument Against Immigration? – Alex Nowrasteh, ANYTHING PEACEFUL

Cochrane: "Illegal immigration is easy to fix. Make it legal."
A Comment On Security And The Peregrine Survey – John Cochrane, HOOVER INSTITUTION

The drug war is exhausting the coffers of big governments.
Three more UK police forces signal that they will turn blind eye to cannabis use – TELEGRAPH

A wee reminder …

“The traditional left-right spectrum is badly corrupted, because conservatives, the so-called right, have not even understood, let alone advocated, free markets and real Capitalism.”
Conservatives against the Core Principles of Capitalism – SAVVY STREET

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“Only one hand was raised in opposition, but a veto should never be allowed to deny justice…”
Australian FM Slams Russia Over Shoot-Down of Civilian Plane: Your Veto ‘Compounds the Atrocity’ – CNS NEWS

Quote: “Many converts (to Islam) leave the faith. We don’t have exact statistics but some stats say 50 per cent will leave within a few years.”
Islam: Fastest Shrinking Religion in the World – JIHAD WATCH

Turns out he doesn't love death as we love life.
'Jihadi John' flees ISIS, fears death: Reports – YAHOO NEWS

“’Some Cultures Are Simply Better.’ Just by saying this you will often be called a 'racist'. This is nonsense.”
Multiculturalism: A Free Pass for Islam – ATHEIST REPUBLIC

Are you keeping up with the Stephen Hicks/John Wright debate on religion?
Theist vs. Atheist: What Should You Believe? – STEPHEN HICKS 

"The essence of life is the achievement
of joy, not the escape from pain."
- Ayn Rand

3d Printing. The possibilities are endless – even taking your entire wardrobe with you on a memory stick!


Danit Peleg, a 27 year old Israeli fashion design student 3D-printed an entire fashion collection from home!

Posted by START-UP NATION on Tuesday, July 28, 2015

“What's especially incredible is that this instrument was only conceptual in Da Vinci's mind. It didn't exist until this man spent 5,000 hours creating it for the first time.”
Listen to the instrument da Vinci invented but never got to hear – CLASSICAL MPR.ORG

Decide which you prefer …
24 totally cringe-worthy classical music jokes – CLASSIC FM
22 of the best insults in classical music – CLASSIC FM

Iggy Pop Dry Humps a Teddy Bear, Slash Discusses Blow Jobs & Other Notorious Musician Moments on Kids' TV.
15 Hilarious And Calamitous Appearances By Musicians On Kids TV Shows - NME

Technology changes human lives. Feel free to let your eyes water.

Eschewing cliches and beer talk. If by “eschewing” is meant embracing.
The typical Yorkshireman wears a flat cap and loves nothing better than a pint of good Yorkshire ale with his whippet at his feet – Neil Miller, MALTHOUSE BLOG

Time for …
50 Twitter Jokes – THE POKE

Here to help you out:

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And finally …

Thursday, 30 July 2015

Hitler’s reading lists

Philosopher Stephen Hicks throws out a challenge to the way people see Hitler and his fellow statist mass-murderers:

It’s always a bad strategy to underestimate one’s enemies. And especially with the recent popularity of National Socialist ideas and movements, we remain vulnerable if we do not fully understand them. It is more comfortable to dismiss a threat by thinking of our adversaries as stupid or depraved. But sometimes they are not.

Very often they’re not. Very often it’s the true zealot who is most dangerous. This is the challenge. To see them as they actually are, and to understand the source of their evil.

If we are going to fully understand the causes of National Socialism and other horrors, we have to consider an unsettling possibility: Maybe those who commit them, like Hitler and his accomplices, can be highly intelligent, well educated, and think of themselves as noble idealists …

The problem not being the idealism, but the ideals embraced.

The phenomenon of bookish young men and women becoming activists for political violence is not rare. Consider these geographically varied examples:

  • Pol Pot, the genocidal dictator in Cambodia, was an indifferent student but received part of his education in Paris and upon his return to Cambodia taught French literature and history at a private college.
  • Abimael Guzm├ín, leader of Peru’s Shining Path terrorist group, wrote a dissertation on Kant and became a professor of philosophy at a Peruvian university.
  • Osama bin Laden — who was a university graduate with a degree in civil engineering — read the works of theologian Seyyid Qutb. At university in Saudi Arabia, bin Laden attended regularly the lectures of Muhammad Qutb, who was his brother Seyyid’s translator and editor as well as professor of Islamic Studies.
  • And Josef Goebbels attended five of the best universities in Germany and received his Doctor of Philosophy degree from the University of Heidelberg.

Like many odious totalitarians, the source of Hitler’s ideals, argues Hicks, can be found in their reading. Hitler read widely, and fully absorbed what he read.

All of the evidence shows that Hitler not only collected books but was a serious and systematic reader. According to Professor Ambrus Miskolczy, author of Hitler’s Library (Central European University Press, 2003), Hitler’s books show much underlining and the systematic use of coloured pencils, with the different colours indicating agreement or disagreement.
    And he read widely [in History, Economics, Military Strategy, Culture, Art and Architecture – and] in Philosophy, including the works of Kant, Hegel, Marx, and Nietzsche.

So, “where to begin?” asks Hicks.

Here is one place: When some names crop up regularly — as do the names Immanuel Kant, Johann Fichte, George Hegel, Karl Marx, and Friedrich Nietzsche — in the reading lists and the writings of major activists who have committed political violence, then it is important to all of us that we commit ourselves to becoming better educated in philosophy.

* * Read more: How Smart and Well-Read was Adolf Hitler? – Stephen Hicks, EVERY JOE

Learning from Greenpeace. Well, sort of.

The former co-founder of Greenpeace, Patrick Moore, has made a series of short, pithy and provocative videos for Prager University. You should watch.

First up, he explains why he helped to create Greenpeace, and why he needed to leave. What began as a mission to improve the environment for the sake of humanity became, he says, a political movement in which humanity became the villain and hard science a non-issue.

Here, he untangles the knotty issue of "deforestation" and shows how, from a purely environmental perspective, it is possible and desirable to grow more trees and use more wood products:

He cuts through the hype about genetic engineering, and gives you the facts: how Genetically Modified Organisms (GMOs) improve our lives, and how they can save millions of people in the developing world from hunger and disease -- if we only let them.

CO2 is neither bad nor dangerous, nor is it a pollutant. Moore provides some surprising facts about the benefits of CO2 that you won't hear in the current debate.

And finally, Moore explains why “climate change,” far from being a recent human-caused disaster, is, for a myriad of complex reasons, a fact of life on Planet Earth.

Lewis House, by Frank Lloyd Wright


The Lewis House in Tallahassee, Florida, is one of his few “solar hemicycle” houses, owned now by Byrd Lewis Mashburn (pictured), the daughter of the original owners, who is raising funds and seeking volunteers for the house’s restoration. Empty for some years, “Mashburn said she is grateful now for the steady stream of visitors, but they are putting a strain on the 2,282-square-foot home. It needs repairs to its roof, plumbing and wiring systems.”

[The first owners] Clifton and George Lewis first met Wright in Lakeland at Florida Southern College, where Wright-designed structures dominate the campus. It was 1950 and Wright was on hand for the dedication of his new Administration Building. During a reception for Wright, the Lewises got in the long receiving line to meet the great architect and decided to pitch their idea for a new house. …
When Clifton met Wright she said: "Mr. Wright, we're the Lewises, and we are from Tallahassee. We have a lot of children and not much money, and we hope you will do a house for us.”
orge, who worked for his family's bank, the Lewis State Bank, finally bought five wooded acres south of Lake Jackson that included a stream and a spring. They sent topographic maps and photos off to Wright. The house and the land cost $48,000.
The house was added to the National Register of Historic Place in 1979. Members of the Lewis family lived there until 2010.

This is a portion of the upstairs of Spring House.


The colourful and iconoclastic Clifton Lewis, who was also one of the founders of the LeMoyne Center for the Visual Arts, The Tallahassee Museum and a foot soldier in Tallahassee's civil rights movement of the early '60s, died in February 2014. She was 94.
"We still have the opportunity for it to be saved for public use," Mashburn said. "That's what our parents wanted. They wanted other people to have this amazing experience - not as a museum - but as a place where you can come and have your graduation party. Later on, it will be a wonderful place for a honeymoon. And occasional weekends and overnight visits for people. ... It's just a wonderful place."


For more on Spring House, visit .

Byrd Washburn grew up in Spring House, the only private

[Pics and video by USA Today, Spring House Institute, and Preserve Spring House]

This long seated area in Spring House was designed


Wednesday, 29 July 2015

The Epitome of the Global Financial Crisis - Iceland: A Case Study


Now they’re back, they’re back in earnest. 

Here’s your write-up for tomorrow night’s seminar with our friends from the Auckland Uni Economics Group.

The most spectacular bankruptcy of the 2008 financial crisis was the collapse of Iceland’s financial system. How could such a developed and sophisticated economy collapse so spectacularly?
    This is one of the most important questions that can be asked as the Icelandic experience is really a microcosm of the experience of many other developed countries.
    In other words, understand why the Icelandic economy experienced a boom and then a bust and you will get insight into the causes of the current economic crises around the world. And the real reasons for the collapse of Iceland‘s economy will probably come as a surprise to you.
    Come along and find out what they were!

    Date: Thursday, July 30
    Time: 6-7pm
    Venue: Case Room Two, Level Zero, Business School

We look forward to seeing you there.


PS: Keep up to date with us on our 2015 Facebook page.

Quote of the day: On genuine free trade

“Genuine free trade doesn’t require a treaty (or its deformed cousin, a “trade agreement”) … If
the establishment truly wants free trade, all it has to do is to repeal our numerous tariffs, import quotas, anti-“dumping” laws, and other … restrictions on trade. No foreign policy or foreign manoeuvring is needed.
    “If authentic free trade ever looms on the policy horizon, there’ll be one sure way to tell. The government/media/big-business complex will oppose it tooth and nail. We’ll see a string of
op-eds ‘warning’ about the imminent return of the 19th century. Media pundits and academics
will raise all the old canards against the free market, that it’s exploitative and anarchic without government ‘coordination.’ The establishment would react to instituting true free trade about as enthusiastically as it would to repealing the income tax.”

- Murray Rothbard, ‘The NAFTA Myth,’ 1993

Dairy’s debt delusion

ScreenHunter_8477 Jul. 23 10.33

From the debt problems of an underwater government --now over $100 billion in debt and counting -- to the debt problems of underwater dairy farmers who, like dairy farmers around the globe, had credit extended to bring new dairy into production, only to find that debt-driven overproduction has lowered dairy prices below what many need even just to repay their debt.

An anyone yet spell malinvestment?

Over the weekend a blog reader was asking why I haven’t written on the dairy debt crisis. I said I had: it was a few years ago before the malinvestment became obvious. You can read those again if you like, since only the details have changed (they’re below) or you should read Michael Reddell’s recent analysis here and here which (like this very post you’re reading) are tinged with the sadness of “I-told-you-so”:

The rate at which new dairy debt has been taken on (and made available by lenders) has slowed markedly since around 2009.  Dairy debt grew at an average annual rate of 17 per cent from 2003 to 2009, and by around 4 per cent per annum in the six years since then. … That [now means] that dairy farmers on average have $6 of debt for every $1 of GDP they generate –  and among the indebted farmers that ratio will be much much higher. …

  • October 2009: Dairy bubble starts to pop – and guess who’s holding the pin?The Crafars are the tip of a multi-billion-dollar pyramid of debt – a pyramid propped up by the very assets that have been inflated by all that debt. … The Crafars’ collapse indicates the first major signal that defeat on all three fronts is now upon us … Are you surprised?  Mainstream economists might be, but this is precisely what Austrian economists expect to see as the “rapid growth” of a credit-created boom turns into debt-based bust. …
        If you want to get angry at someone, don’t get angry at the Crafars – get angry at those responsible for creating all the credit-backed profligacy: at the denizens of the Reserve Bank. It was them who inflated the bubble.  It’s reality that’s now holding the pin.
  • July 2009: The Biggest Bill: And here ‘s another piece, on the debt problems of the dairy industry, who (in a story that’s now all too familiar) have partially substituted the “economically perverse” illusion of debt-fuelled capital gain (i.e., the illusory “wealth” of a bubble) for real productivity growth. Read Analyst warns of dairy debt tsunami
  • June 2009: The credit/debt delusion: The faster you go, the bigger the mess: Many farmers have apparently been riding the bubble -- "farming for asset gains" the Agriculture Production Economics report calls it – leaving them exposed on three fronts … No debt bubble has ended well … Garrett talks about the “delusion of credit,” a mass delusion as widespread now as it was in the 1920s. And as destructive…
        Prosperity is so very far from being a product of credit that it is almost one-hundred and eighty degrees wrong to suppose that it is – in that the delusion that prosperity is a product of credit wipes out the pool of real savings that has been created by the increase and exchange of wealth, and on which further wealth creation actually depends.  Frank Shostak explained the destruction back in 2005 [as being robbed by means of loose monetary policy].
        “Robbed by means of loose monetary policy.”  That’s as true for creditors as is for debtors, and everyone in between.


Do Refugees Need Food Stamps or Freedom? [updated]

In Australia, NZ, America, and Europe refugees are a political issue when they should be a humanitarian issue.
The problem is the inhumanity of progressive humanitarianism.
The problem, says Alex Nowrasath in this Guest Post is a lack of understanding of what free humans can do for themselves.

Ship bearing immigrants approaches Statue of LibertyDaniel Costa of the Economic Policy Institute criticised a piece I wrote for The Hill in which I called for the U.S. to accept more refugees.  Costa took issue for my argument to limit their access to welfare once they arrive, which I wrote in the eighteenth paragraph of my piece.  Conservatives criticised me for not mentioning welfare reform sooner in my piece.  I wrote about allowing more refugees in for the first seventeen paragraphs of my piece because that is more important than denying them welfare.

Costa, however, stooped pretty low when he wrote: “Hopefully refugees will never be forced to suffer their libertarian version of humanitarian relief.”  Emphasis added.

The humanitarian relief that refugees need isn’t food stamps once they arrive to the United States – it’s an escape from violence and oppression.  Refugees aren’t fleeing Syria because their Syrian equivalent of Temporary Assistance for Needy Families benefits expired; they are fleeing because they are being murdered.       

Costa assumes my opposition to welfare means that I oppose all support for refugees.  That is untrue.  As I mention in my original piece, civil society, private charities, churches, previous immigrants, and other groups that do aid refugees are performing a valuable service.  That aid is important in helping some, but not all, people who flee war, oppression, and dictatorship to thrive in their new country. 

That voluntary aid and support should continue and the generous people who donate their own money to such causes are to be commended.  But welfare is not charity and it does not alleviate the real scarcity that affects these refugees: liberty, and a lack of visas for them to come here in the first place.

Welfare or Refugees: Choose One

Welfare is one reason why countries admits so few refugees.  It’s an open secret on Capitol Hill that President Obama didn’t raise the refugee cap as a part of his executive actions specifically because of the welfare cost.  Australian politicians rise in the polls when they assure voters refugees won’t be getting to their shores. Limiting welfare for refugees is a key element of convincing the public and policymakers to accept more immigrants of every kind – including refugees.  It’s no coincidence that support for immigration increased after the 1996 welfare reform.  Costa’s insistence that refugees receive welfare benefits once they arrive is tantamount to him insisting that fewer of them come in the first place – an outcome with far worse humanitarian consequences than the current situation.

imageThe public choice reality is that more handouts to non-citizens will lead to less public support for liberalising humanitarian immigration.  Here I document many of the polls that reveal how worried Americans are about immigrant welfare use. British polls show similar fears. Those welfare fears are vastly overblown but they do affect public opinion and policy making.

Since the political limitation on allowing more refugees is welfare, the only humane thing to do is to deny welfare benefits and thus allow more of them to come. Can anybody seriously suggest that Syrian refugees would be worse off than they currently are if more of them arrived in the west but didn’t have access to means-tested welfare?  Of course not.

Let’s allow the refugees to choose for themselves.  We should allow more refugees to come beyond what the current quota allows but deny them access to means-tested welfare until they naturalise.  Hundreds of thousands or millions of refugees would take advantage of that deal in the near future and they would all be better off than they currently are.

Welfare Doesn’t Aid Assimilation

Costa argues that welfare benefits help immigrants succeed.  Refugees don’t need welfare to succeed once they are here.  Refugees outperform many classes of economic immigrants who are ineligible for means-tested welfare.  Costa believes this is because those refugees received some welfare (I’m inferring this from his piece).

However, the peer-reviewed version of the paper he cites by Kalena Cortes doesn’t even mention welfare as a contributing factor to their labour-market success.  She attributes the growth of income to refugee willingness to work more hours and their higher rate of human capital accumulation due to their longer time horizons – they can’t return to their home countries.  It’s a testament to the perseverance of refugees that their willingness to work was not constrained much by welfare benefits.  Refugees are responsible for their own economic successes, not the welfare agencies.   

imageThere is some evidence that access to welfare can slow down English acquisition – an important part of labour market integration.  Soviet refugees in New York State were less likely to work than their counter-parts in Maryland.  Those in New York also had more access to welfare than those in Maryland.  Those in Maryland were also more comfortable with the English language.  Welfare decreases the incentive to work, on the margin, due to high effective marginal tax rates.  Working was an important part of increasing English skills.  To the extent that welfare decreased the likeliness of refugees to work, it slowed their accumulation of language skills and success in the labour markets.   

Some Vietnamese refugees did have access to means-tested welfare and they assimilated fine.  But as David Haines points out in his book Safe Haven: A History of Refugees in America, refugees entered the labour force more rapidly in cities like Richmond, Virginia where public assistance was more limited than in places where it was more abundant.    

More important than public assistance is that many Vietnamese refugees came to the U.S. when the economy was growing or was on the verge of a major job expansion.  The papers I cite above all point to economic and job growth as a better predictor of refugee assimilation and success than anything else.  For instance, Haines points to the strong manufacturing job base in Richmond as helping refugees to that city do well.

If welfare matters so much for refugee integration, then why was there no economic effect on refugees after it was decreased?  As Bollinger and Hagstrom write:

imageThe 1996 welfare reforms appear to have no effect on the probability of poverty for any group, regardless of the measure used.  Nor is there much evidence for any substantial difference in the post reform between immigrants, refugees, and native born.  Indeed, even when differences are measured in how well the programs moved these groups out of poverty, there appears to be no substantial differential impact of welfare reform. 

The booming economy post-1996 certainly helped refugees enter the job market.  Perhaps welfare reform aided that period of job growth, perhaps it didn’t, but it doesn’t seem to have mattered much either way.  From 1994 to 1999 welfare use by refugees collapsed so that by 1999 refugee-headed households had similar welfare use rates as U.S. citizens.  Refugees are still clamouring to come here. Sweden gives high welfare benefits to refugees that combine with their rigid labour market regulations to lock many into segregated poverty for decades.  Fortunately the United States government does not provide nearly so much welfare nor does it have such a rigid labour market.  Attempting to be humanitarian by providing welfare backfired in Sweden.

At best, Costa can claim that welfare does not delay integration into the labour market at the current low levels in the United States, but welfare doesn’t seem to speed up integration either.  Refugee time-horizons, inability to return to their home countries, their resources upon arrival, and acquisition of human capital aided by those realities seem to explain their relative success – not government welfare offices dispersing taxpayer dollars. 

Assuming for argument’s sake that welfare doesn’t delay labour market integration (it does), removing it does no harm to the refugees and could influence public opinion to allow more of them to enter western countries while saving taxpayers some money.  Sounds like a win for everybody.

Alex Nowrasteh is the immigration policy analyst at the Cato Institute's Center for Global Liberty and Prosperity.
A version of this post first appeared at


The great immigration menace - another ‘lump of labour’ fallacy tale - CIS.ORG.AU
Immigrants do not threaten our jobs — on the contrary, they create new possibilities and demand in our economy.

Greene & Greene’s "Ultimate Bungalows”

The style of NZ’s many California Bungalows derives from California. This seems obvious enough from the name, but you tell many people that and they’re astonished. Go figure.

In the years 1904-1913, the brothers Charles and Henry Greene combined Japanese aesthetic sensibility with English Arts & Crafts, injected robust American optimism and Californian informality and with it a new style was born that would jump the Pacific in less than a decade, and dominate New Zealand suburbs for twenty years.

I was looking for a video that might help explain the Greenes’s style, but couldn’t. Instead, there’s this:

Loblolly House,’ named for the Loblolly pines that surround the home, is a contemporary home designed by James Erler that is inspired by the Greene and Greene "Ultimate Bungalows."

It focuses on features rather than spaces, but it’s not a bad introduction.

Tuesday, 28 July 2015

Soccer “highlights”

Yes, it’s true, people watch this shit.

Bring back Greg Louganis.

Put down the bloody video games and go outside

Show this to a family who needs it.

And talk to them about the importance of hands-on sensory experiences.

[Hat tip Maria Montessori Education Foundation]

“China has entered the bust phase”

July 24 -- Asianomics Group Deputy Chief Economist Sharmila Whelan discusses the economy in China, outlook for the country’s equities and their impact on commodities. She speaks with Francine Lacqua and Manus Cranny on Bloomberg Television’s “The Pulse.”


Eric Sprott:  “I don’t think there is any doubt about the world economy rolling over.  China has been the major buyer of all products and they’re not holding it together here.  They’ve experienced a market crash already, with these huge amounts of debts that the Chinese have taken.  The Chinese have created more debt than anybody.  Their debt outstanding has increased remarkably….  The debt is accelerating way faster than the economy is growing.  And the economy is the engine that produces the earnings to pay the interest on the debt.  Well, if the engine starts misfiring, who is going to pay the interest and how do you pay off the principal?”
Read: Billionaire Eric Sprott Issues One Of The Most Dire Warnings Of 2015

[Hat tip Hugh Pavletich]

Today's Anti-Capitalists Ignore the Fundamental Problems of Socialism

Guest post by Jonathan Newman

demonstrationAnti-market and pro-socialist rhetoric is surging in headlines and invective (see also here, here, and here, or any random post on the Daily Blog or the Double Standard) and is popping up more and more on social media feeds.

Much of the time, these vocal opponents of markets can’t tell the difference between state-sponsored organisations like the International Monetary Fund and actual markets. But that doesn’t matter because the articles and memes are often populist and vaguely worded — intentionally framed in such a way to easily deflect uninformed attacks and honest descriptions of what they are actually saying. In the end, they can all be boiled down to one message: socialism works and is better than capitalism.

While most of it comes from the left, the right is not innocent; the right appears to be primarily concerned with promoting its own version of populism, which apparently does not involve a defence of markets. “Build bigger walls at the border,” for example, is not a sufficient response to “All profits are evil!” [Indeed, the traditional left-right spectrum is badly corrupted, because conservatives, the so-called right, have not even understood, let alone advocated, free markets and real Capitalism.]

Instead of stooping to this level or simply resorting to “Read Mises!” (a more fitting response), we must show, yet again, that socialism — even under well-meaning political leaders — is impossible and leads to disastrous consequences.

The Necessity of Profits, Prices, and Entrepreneurs

Socialism is the collective ownership (i.e., a state monopoly) of the means of production. It calls for the abolition of private ownership of factors of production. Wages and profits are two parts of the same pie, and socialism says the profit slice should be zero.

The inherent theoretical problems of socialism all emanate from its definition, and not the particulars of its application. However, the supporters of socialism define “collective” as no exchange, no trade, of the factors of production. And without exchange, there can be no prices, and without prices there is no way to measure the costs of production. And if you can’t measure your costs of production, you can’t know what to produce or whether what you’re producing is consuming resources or producing them.

In an unhampered market economy, the prices of the factors of production are determined by their aid in producing things that consumers want. They tend to earn their marginal product, and because every labourer has some comparative advantage, there is a slice of pie for everybody.

If technological changes make certain factors more productive, or if education and training makes a labourer more productive, their prices or wages may be bid up to their new, higher marginal product. An entrepreneur would not like to hire or buy any factor at a price that exceeds its marginal product because the entrepreneur would then incur losses.

Entrepreneurial losses are more important than many realise. They aren’t just hits to the entrepreneur’s bottom line. Losses show that on the market, the resources used to produce something were more highly valued than what they were producing. Losses show that wealth has been destroyed.

Profits give the opposite signal. They represent economic growth and wealth creation. A profitable line of production is one in which the stuff that goes into producing some consumer good costs less than what consumers are willing to pay for the consumer good.

As such, profits and losses are more than just important incentives, or cover in a conspiratorial capitalist class system; they are the only way to know that wealth is being created instead of destroyed in any line of production.

Under socialism, there is a single owner that does not bid factors away from some lines of production and toward others. Nobody is able to say, with any shred of certainty, that a particular tool or machine or factory could be used to produce something else in a more effective way. Nobody knows what to produce or how much to produce. It’s economic chaos.

Without Markets, We Can’t Know What or How to Produce

Profits and losses guide and correct entrepreneurs in the process of producing things they expect consumers will demand. Without this information, including the costs of production specifically, entrepreneurs cannot engage in economic calculation, the estimation of the difference between future revenues and the costs of production necessary to gain those future revenues.

Labourers are put to work in areas where they don’t have a comparative advantage. Farmers are sent to factories, and tailors are sent to the mines. Workers are in the wrong lines of production and have the wrong tools. Every morning, the economy looks like Robert Murphy’s capital-rearranging gnomes just ransacked it.

The Polish film Brunet Will Call lampooned situations like this, with consumer and capital goods in the most unlikely places. A butcher pulls an automobile’s clutch cable out of his freezer, and gives it to the main character, who pays for it with information on the whereabouts of a double buggy for someone’s new-born twins (at the flower shop, obviously).

So the failure of socialism is not conditional on the culture, time, or place of the victims. Socialism is flawed at its core: the “collective” ownership of the means of production. As such, there is no way to enact a functioning, growth-inducing version of socialism anywhere. In practice, however, the theoretical problems of socialism give way to civil unrest, which is met with state force and results in a death toll higher than any official war ever fought.

Without profit motives to produce, quotas must be put in place. With quotas, even in the cases where workers don’t lie about their production, chaos still reigns. For example, if a nail production quota is based on the number of nails, workers produce a lot of tiny, unusable nails. A nail quota based on weight would encourage workers to produce massive, but still unusable nails — a situation lampooned by this cartoon (right) in Krokodil during the 1960s.

Endless queues stretched across the USSR, filled with people looking for shoes even though shoe production in the USSR exceeded that of the US. The problem was all the shoes were too small, because shoe production was measured by number, with no regard for the sizes or designs consumers demand.

The Wake of Socialism

Some cases are funny; others are not. About seven million people died of starvation in the USSR just in 1932–33 (middle-of-the-road estimate based on manipulated data). The authors of The Black Book of Communism (1999) estimate the deaths of close to 100 million people are attributable to communist and socialist regimes. That’s more than 200 times the number of US deaths in WWII (and a case could be made that their deaths are attributable to socialism, too).

Even today, in Cuba, the average wage is about $20 a month. In North Korea civilians are routinely rounded up by the dozens for public execution for the crime of watching South Korean TV smuggled into the country. In Venezuela, one of the world’s biggest oil producers, armed soldiers patrol supermarkets to protect the few things remaining on the shelves, toilet paper no longer being among them.

When people are hungry and unhappy, the state cannot survive if the people know others are better off. The state uses propaganda, misinformation, and censorship to make an already captive citizenry even more confused and submissive.

So count me surprised to hear fresh calls for socialism in 2015 — if the strong economic calculation argument and astronomical death toll haven’t turned the Left off of socialism, I don’t know what will. The idea is both bankrupt and deadly in both theory and practice.

Jonathan Newman was a 2013, 2014, and 2015 Summer Fellow at the Mises Institute.
He teaches economics at Auburn University, Alabama.
This post first appeared at the Mises Daily.
Pics from Krokodil, Shutterstock.

Quote of the Day: John Stuart Mill on voting

It is important, that the assembly which votes the taxes, either general or local,
should be elected exclusively by those who pay something towards the taxes
imposed. Those who pay no taxes, disposing by their votes of other
people’s money, have every motive to be lavish and none to economise.
       “As far as money matters are concerned, any power of voting possessed
by them is a violation of the fundamental principle of free government . . .
It amounts to allowing them to put their hands into other people’s
pockets for any purpose which they think fit to call a public one. . . ”

- John Stuart Mill, from his Considerations on Representative Government [1861]

Are enterprise zones finally “a thing”?

Ideas percolate slowly.

So it's encouraging to see the Government is at least entertaining the idea floated publicly this week by Local Government New Zealand (LGNZ) [and for many years by many others] for 'Special Economic Zones.' It shows the Government may be relaxing its more purist and laissez faire approach from before the Northland election and looking at some more pragmatic ideas.

The reason the thinking in that quoted paragraph is so confused is because it’s written by the frequently befuddled Bernard Hickey (an idiot who seems to think the best thing about a Special Economic Zone is the cut the government gets!), but the story he reports is still a good-news one.

A 'special economic zone' could allow a struggling region such as the Manawatu/Wanganui or Northland or the East Coast to trial the relaxation of either national or local laws or revenue raising measures to see if it might kick-start economic growth. Any local Government in that region would in exchange for relaxing the law then get to share in the benefits of economic growth, possibly through some sort of income tax or GST sharing arrangement.

Clearly, Hickey shares the idiot-focus with LGNZ.

LGNZ did not spell out exactly how they might work or who might use them [if central Christchurch isn’t screaming out to you right now as the obvious first candidate that can only be because your brain is switched off], but the idea is out there now and, unusually, has not been rejected outright as other regional development suggestions have been in the past.
The idea was initially run up the flagpole in New Zealand last September by NZ Initiative Head of Research Dr Eric Crampton after a visit to Hong Kong. China has used special zones extensively to try out new ideas on relaxing taxes and other regulations, and with great success, especially across the border from Hong Kong. He also pointed to a special zone used in Honduras to allow free trade and different types of government. Dr Crampton suggested local Governments could relax Resource Management Act (RMA) rules in such a zone.

And so they could. And much more besides.

The NZ Initiative has since circulated more detailed economic zone ideas amongst policy makers in Wellington and received a positive reception from all sides. Another suggestion was for rules restricting overseas investment to be relaxed for a specific region.
    LGNZ President Lawrence Yule then included the idea in the association's 10 point plan for local government funding reform released at this week's conference in Rotorua. He later said such a zone could include minimising RMA rules or fast-tracking consents, or even the potential for tax or rates relief.
    LGNZ also suggested in its funding reform plan that the central Government share the fruits of any extra economic growth generated by such a zone, to provide an incentive for Councils to 'go for growth'. That could include granting Councils a share of income taxes or GST generated in their region from the extra growth.
    The lack of incentives for growth in many regions is more of an issue than many think.

And this, really, is all that encourages Hickey and LGNZ and, no doubt, the likes of Looney Len to get excited. They read a proposal containing the words “granting Councils a share of income taxes or GST generated in their region” and they simply start frothing at the mouth.

Mind you, at least in that same proposal we also have the words “the fruits of any extra economic growth generated by such a zone,” which is the most recognition you’ll ever get from bloviating blowflies like Bernard that liberty and spontaneous order might just be better for humanity’s progress than regulation and central planning.

And if it takes a bit of rates/income tax ju-jitsu from Dr Crampton and the Initiative to get the grey ones on board, so be it.

Melson House, by Walter Burley Griffin, 1912

Walter Burley Griffin was a very early collaborator with and “apprentice” of Frank Lloyd Wright. His conception of uniting architecture with nature was much more literal than Wright’s, preferring where possible to build his houses from stone hewn out of the site, and have them appear as if they had grown there.

Wright had made a proposal for the limestone crest, but it was set back a fair distance. [Wright's design for Melson later became the Isabel Roberts House.] Griffin placed the Melson house at the brink and by a cantilever suspended parts of rooms over the edge.

Shades of Fallingwater many years later, Wright learning from Griffin.

Stone grew out of stone to rise out of the hill face and embrace a simple square plan.  Concrete and stucco completed the external materials to fuse the  house to the site, a marvellous marriage of site and building.  The plan appears binuclear but the drive through the garage is set at the same level as the upper bedroom floor with living below, and that the bottom floor a billiard room. No praise can be too high for this house: historian Wayne Andrews’ comment would be the most correct: ‘Griffin succeeded in creating one of the irreplaceable houses of the twentieth century.’

Marion Mahoney Griffin was both her husband’s delineator, and Frank Lloyd Wright’s. Her beautiful renderings, such as the one above, set the tone ever after for all drawings from the Wright office.

PBS have a small website on the house with several fascinating stories from folk who lived there.

[Rendering from Block Museum. Photo from Griffin Society. Quotes from The Architecture of Walter Burley Griffin, by Donald Leslie Johnson]

Monday, 27 July 2015

IRD sick leave

The Herald reports:

Inland Revenue Department staff are being hauled before their manager if they have even one day off ill, as the tax agency grapples with its high level of sick leave.
The meetings, dubbed “welcome back conversations”, are part of a new initiative – Supporting Positive Attendance – introduced after the IRD noticed skyrocketing rates of staff taking sickies.

Frankly, I have to ask why they’re reporting skyrocketing rates of IRD staff taking sickies as a bad thing!?

What, I wonder, would be the biggest problem if Inland Revenue Department staff had, say, 365 days per year off ill?


Yes, euthanasia is already happening in NZ

Everyone who’s ever watched someone they love dying already knows this, and will have their own story about it to tell …

Euthanasia is already happening in NZ
Doctors and nurses are playing increasing roles in prescribing, supplying or administering drugs that may hasten a patient’s death, according to new research.
A University of Auckland study anonymously surveyed 650 GPs.
Sixteen reported prescribing, supplying or administering a drug with the explicit intention of bringing death about more quickly.
But in 15 of those cases, it was nurses who administered the drugs. 
Researchers acknowledged the actions of the GPs would generally be understood as euthanasia, but the survey did not use that term. 
In the survey, led by Auckland University senior lecturer Dr Phillipa Malpas, GPs were asked about the last death at which they were the attending doctor.
Of the 650 to respond, 359 (65.6 per cent) reported that they had made decisions, such as withdrawing treatment or alleviating pain, taking into account the probability that they may hasten death.
Some made explicit decisions about hastening death.
Of the 359, 16.2 per cent withheld treatments with the “explicit purpose of not prolonging life or hastening the end of life”.

I agree with David Farrar: “So euthanasia is already quite widespread – but with no legal protections for patients. If we legalise euthanasia, then we put in place a legal process where we can be sure any actions taken are with the consent of the patient, and is necessary to stop their suffering.”  And also so that friends and loved ones and everyone involved may have a candid conversation about the ending of a life, instead of furtive hints about what medication might be expected to do or not to do.

Best marks, goals, kicks and tackles, Rd 17

.You don’t have to know anything about AFL to enjoy this week’s best marks, goals, kicks,and tackles!

Not just the world’s most libertarian team sport, but also the most fast-moving …and just what is he doing up there in number 7!

Top 10 ‘Ramble’ links, voted by readers

So each week I have a bet with myself which of the links from my Friday Morning Ramble links will be clickbait, and which internet poison.

I gave myself half a point this week. The ones that looked like catnip, in order of popularity…

  1. Tesla just did something big in the car world
  2. This is What the History of Camera Sales Looks Like with Smartphones Included 
    [supplementary: I, Pencil. Extended Commentary: Creative Destruction]
  3. Fact Check: The Washington Post on Donald Trump and John McCain
  4. I spent the last 15 years trying to become an American. I've failed.
  5. LEIGHTON SNITH SHOW: Peter Boghossian - Critical thinking and Atheism
  6. Twelve Questions: James Shaw
  7. British economics graduates have left a trail of misery around the world
  8. Why Most of the World’s Banks Are Headed for Collapse
  9. Little Known Chart Shows Why it’s Wrong to Hate Deflation
  10. Small New Zealand population initiated rapid forest transition c. 750 years ago: Drier forests lost within decades, instead of centuries as previously thought

And the two with all the popularity of roadkill, neither of which I had totally pegged for unpopularity:

Witch doctors are “infiltrating” South Auckland.

South Auckland “community leaders” are warning that “witch doctors” are “infiltrating” South Auckland.

Warnings are being issued about black magic-practicing witch doctors said to be swarming into South Auckland and exploiting vulnerable people. …
    "They are here to suck money out of people. They are leaving people in a very devastated state -- suffering mentally, psychologically ... after losing large sums of money," she said.
    "It has got to a stage where South Auckland is swarming with [them].”

They promise the earth, suck you dry, and deliver nothing but misery in return.

They’re out there to exploit you.

Be on the lookout for them.

Yes folks. Be on the lookout for politicians, priests and pastors. Outside parliament and its surrounds, there is no place in the country where there are more government programmes, government plans, government agencies, and government-employed welfare agents per-square kilometre, nor more priests, pastors and promisers of bogus salvation. Not to mention “community leaders.” Because for all their promises, all their sizzling state solutions and “wrap-around support,” they’ve left people there in a devastated state.

These bastards have done way more harm than a little bit of simulated voodoo.


A Yankee in Middle Earth: Differences between US and NZ police

Our guest poster this morning, Monica Beth, observes her new New Zealand home through her native American eye.
Today:  Preliminary perspective on differences between US and NZ police.

I was stopped by a cop last night, and will recount the event at the end.

Feel free to leave your thoughts in a comment, but please read this before you do.

To be fair, a routine complaint I’ve seen here in NZ in several different places online is that police do not respond to crime fast enough, mostly theft. So the police here seem to err on the side of neglect rather than force, but it can often leave Kiwis feeling like the police do not have their backs when it comes to fighting crime.…/briefing-inc…/frontline-services

There are police scandals here in NZ (mostly involving either sex abuse or neglect of sex abuse claims). There will always be abuse of power anywhere you go. There is no such thing as a utopia. But in general, I would say there is a greater sense of and respect for bringing police to justice when they do wrong, as well as the requirement to change the law or establish oversight when the system is clearly not working. Take the example of these NZ cops who were fined heavily for attempting to blame a civilian for an accident they caused.

To wit, the Independent Police Conduct Authority (IPCA), established in 1989, is an independent body that considers complaints against the New Zealand Police and oversees their conduct.

Where can citizens in the US complain or appeal about police misconduct? (I confess I don't even know what the answer to this question is, or whether there is one.) Has anyone heard of a judge issuing a fine or a warning to a police officer in the US? Who polices the police?

Enforcement for traffic violations was something that was handed over to police in NZ in the 1980s, and the public has remained happy with it, but it's not something that has gone unexamined or unreviewed. Can you even imagine the concept of reviewing whether police should handle traffic offenses in the US, or whether those offenses should be handled by a different governmental authority?

The police in NZ have only recently been able to use tasers (I think since 2008), and guns are locked in the trunks of their cars. Naturally, this forces police toward a mentality of de-escalation. Arming cops with tasers has not been uncontroversial, and guns are not brought into the equation by police unless the person they are confronting is known to be armed and dangerous.

On average over the past 10 years, NZ police have killed 0.7 people per year in a country with a population around the same as Colorado. That yearly rate is more than 10 to 20 times that in Colorado, depending on the year.

Another telling historical fact. The word “force” to describe New Zealand’s "police force," was officially removed from the description in 1958.

Finally, contrast police recruitment in NZ (New Cops) with police recruitment in the US (NYPD, US Capital Police)

New Cops - Entry Requirements         image

The contrast between their web pages is stark.

On the NZ page (above left), we have a smiling woman in her early 20s with untidy hair, with a focus on friendliness and preventing problems before they happen, with headings like, "A strong desire to help" and "No worries." When they say they “don't want cookie-cutter cops,” that they are looking for folks with different backgrounds, experiences and interests, working towards the same goal, who have empathy and ability to solve problems, it seems actually believable. Sure, all web pages are essentially marketing, but this matches what I see on the street here, where cops are often talking side by side on the street, standing with people they've pulled over, going over something on a clipboard.

On the US pages, I see un-smiling faces, postures of preparation bordering on aggression, and worded messages that convey "toughness, pride, honour, authority." I also perceive a combination with nationalism.

I see a lot of well-intentioned libertarian folks blaming police abuse on what they think are unique problems in America, such as the drug war. Conversely, conservatives blame "thuggishness" among ethnic minorities. Liberals blame racism.

But New Zealand also has drugs and it also has a lot of impoverished ethnic minorities. The prison population is higher among these ethnic groups in NZ also, and it's universally acknowledged and widely discussed. One could mistake that for racism.

I also see US libertarians blaming things like big government. But the NZ police have much wider search and arrest powers in NZ than they do in America.

I'm sympathetic to blaming "Big Gov" but I confess I see it as useless question-begging. The existence of the Fourth Amendment doesn't seem to be any protection from unwarranted search and seizure anymore.

How did that happen? And how do we get the government to obey its own laws that it's already supposed to be enforcing? By making more laws?

I propose there are three differences here.

1) A culture of politeness and empathy has been and is being lost in the US. There is a TV show here in NZ about cops, and when they pull people over their inflection rises at the end of a sentence, and they do such things as refer to the person as "mate." Almost complete lack of a punitive attitude. Perhaps it's because they're being filmed and feel they have to be on good behaviour, but the situations are amusing rather than highly alarming, despite revolving around alcohol and drugs. The people who they are pulling over are treated as a temporarily incapacitated danger to themselves and the public. The focus is on de-escalation, safety, and prevention.... not punishment, respect, and authority.

2) The police here are not automatically armed with lethal weapons. They are only allowed to pull these weapons out in certain conditions.

3) Police conduct is independently evaluated by a non-police governmental authority. The police are themselves policed.

Last night I was pulled over for a routine traffic stop. This was the first time I was stopped by police here, and I didn't really know what was going on, though I knew I'd eventually encounter a traffic stop as they are routine here. I rolled down my window and the policeman muttered something politely and held a machine toward my face. I said, "I'm sorry, what's going on? I'm new here and I've never done this before." He smiled and chuckled, pulled the machine away, explained that it was breath analysis, muttered something else, and then put the machine toward my face again. Kiwis can be difficult to understand because sometimes they speak quickly, I don't always understand the accent, and their vocal tone can be quite quiet in comparison to Americans. So again, I said confusedly, because I didn't understand what exactly I was supposed to do, "You want me to blow into this machine?" He laughed again. "No," he said. "All you need to do is count to ten." When I was done, he showed me the results. "No alcohol." And then checked my warrant of fitness (a safety inspection you need to get done on your car every 6-12 months), then smiled and said I was free to go.

Basically, I see America's current problems as primarily a result of out of control anger, outrage, entitlement, and oversensitivity on the part of everyone. I see so much anger in my feed these days. Angry, angry, angry. Feeeeelings, whoawhoawhoawhoa feeeeelings. People are mad at anything and everything. I don't even mean this primarily as criticism of others and not myself, because I have to continue to examine and check these attitudes in myself as well. (This extends way beyond law enforcement or anything to do with government at all.)

Ironically, I think what America needs most is to do something that's illegal to do, which is to sit down on the couch, all together at once, and collectively smoke a joint or take some quaaludes. Then, and only then, *after* it comes out of being happily stoned, maybe it can figure out how the hell to solve its problems.

Monica BethMonica Beth is a new New Zealander from the States, a scientist trained to acute differences.
She is presently training her eye on the many differences between her country of birth and her new home.