Quote of the day, 20th Oct 2011

It's amazing to me how many people think that voting to have the government give poor people money is compassion. Helping poor and suffering people is compassion. Voting for our government to use guns to give money to help poor and suffering people is immoral self-righteous bullying laziness. People need to be fed, medicated, educated, clothed, and sheltered, and if we're compassionate we'll help them, but you get no moral credit for forcing other people to do what you think is right. There is great joy in helping people, but no joy in doing it at gunpoint.

Penn Jillette

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Event: Is the Global Economy Heading for Monetary Breakdown?

The All Party Parliamentary Group on Economics, Money and Banking and Steve Baker MP in association with The Cobden Centre, the Institute of Economic Affairs, the Adam Smith Institute and the Institute for Public Policy Research cordially invite you to a discussion on:

Is the Global Economy Heading for Monetary Breakdown?
The Threat Posed by Elastic Paper Money

Tuesday 11 October 2011
Committee Room 7
Palace of Westminster
4.00pm-5.30pm

with

Steve Baker MP, Chairman and Conservative MP for Wycombe

Dr. Tim Evans, Chief Executive of The Cobden Centre

Detlev Schlichter, author, Paper Money Collapse:
The Folly of Elastic Money and the Coming Monetary Breakdown

Detlev Schlichter’s analysis might be controversial but it is logical and rigorous. Explaining in detail what he believes to be the real causes behind the world’s current economic woes, he paints a frightening picture of the global monetary breakdown he now believes is underway. The event is a must for anyone concerned with the future of the world economy and our society.

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Why inequality?

As we know our hunter gatherer forebears lived in rigorously egalitarian societies: some of our instincts even now are that we should similarly be living in such egalitarian manner. No one has much more than the other and peace and harmony should prevail. We do certainly know that excessive (a changeable measurement, to be sure) inequality can lead to great unhappiness in a society.

So, if this is so, how come the inegalitarian, unequal, societies, won out over those more equal?  No, not oppression, not the "capitalists", at least not according to these researchers:

Agent-based simulation results show that in constant environments, unequal access to resources can be demographically destabilizing, resulting in the outward migration and spread of such societies even when population size is relatively small. In variable environments, stratified societies spread more and are also better able to survive resource shortages by sequestering mortality in the lower classes.

That doesn't sound very fun (that "sequestering mortality" means the poor die) but what we seem to have here is Darwinian evolution of societies (no, please don't write in, this is an analogy, not a direct comparison). The environment is changeable and it appears that unequal societies are able to thrive in such changes, while the more equal ones are not.

I would go further than this research myself: no proof, just my own prejudices. Two things: firstly, it's necessary to move beyond the hunter gatherer technology before there are things with which it is possible to be unequal. Certainly inequality in the physical goods sense requires stationary and thus agricultural living.

The second is that those hunter gatherer societies are vehemently, violently egalitarian. Place can only be measured by positional goods thus there is always a battle for them, for status, for the prettiest woman and so on. So much so that, as Stephen Pinker points out, such societies are not just much more violent than our own, murder isn't just the most common cause of death for men, in some it is the majority cause of death.

In essence, I'd argue that this inequality is beneficial: we may have an inequality of physical goods but squabbling about keeping up with the Jones' stops us all from murdering each other over the zero sum game of who gets to be top dog.

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The restoration of Panmure House

The plan to restore Adam Smith's old home in Edinburgh, Panmure House, is now getting underway in earnest. The only one of Smith's lifetime homes still standing, he resided there for the last nine years of his life, and held literary salons every Sunday when he would invite some of the leading intellectuals of the Scottish Enlightenment round to discuss ideas. Now the Edinburgh Business School at Heriot Watt University has bought the house to save it for future generations, and return to this tradition, creating an elegant space for meetings, debates and the arts.

It is not an easy job. It has taken three years (!) to get planning approval for the restoration. And sadly, this fine eighteenth-century townhouse is in a dangerous condition, reduced to a sorry state by three decades of local-authority occupation, as these pictures of the inside show. When restored, the same rooms (also pictured) will be quite magnificent. Work starts in March.

This week a fundraising panel at the Edinburgh Business School started work on raising the £5m needed to restore the house and keep it running, in use and indeed loved. If you would like to help this effort – or indeed contribute financially to the work of breathing life into Adam Smith's too-long-neglected home, do let me know: eamonn.butler@old.adamsmith.org.

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Amen, Brother

Hat-tip to Mont Pelerin's World

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Some friendly advice for government

Give up – all of you, you and your Washington friends and your looting planners and the whole of your cannibal philosophy. Give up and get out of the way...

Dagny Taggart in Ayn Rand's Atlas Shrugged

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A libertarian's prayer

Our Hayek who art in heaven;
Hallowed be Thy Name;
Thy free markets come;
Individuals’ will be done on earth as it is in heaven;
Let us keep our daily bread;
And forgive us our trespasses, as we forgive those who trespass against us;
And lead us not into nannying;
But deliver us from socialism;
For Thine is the peace, and the freedom, and the creation of wealth, forever and ever.

Amen.

[Have a nice weekend – ed]

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Odds and ends, 6/9/11

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Here's a list of the best things I've read online over the last week or so. We're trying it out as some might find it interesting – it's a trial, so leave your suggestions in the comments.

The Most Important Economics Debate of the Interwar Period – Steven Horwitz

Austrian school economist Steve Horwitz says that the Hayek-Knight capital theory debate was the crucial economics debate of the 1920s and 1930s. Horwitz says that disagreements over the nature of capital and how decisions about its allocation are made that are at the root of both the socialist calculation debate and the Hayek-Keynes debate about economic stimulus and recessions.

Russia's Economy: Putin and the KGB State – Paul Gregory

Economist and Russian historian Paul Gregory argues that the street gangs of the Yeltsin era have been overtaken by the state KGB gang under Vladimir Putin. He says that weak property rights, a cronyist banking system and the insecurity of foreign investment in Russia will cause the Russian economy to stagnate.

North Korea: The Long Coma – Alex Tabarrok

Reviewing Barbara Demick's extraordinary study of ordinary people's lives in North Korea, Nothing to Envy, Alex Tabarrok reflects on the insulation that North Korea has had from the rest of the world, even compared with the Soviet-era Eastern Bloc. This was so tight that many North Koreans believed that their dystopian state was prospering relative to the rest of the world.

Labor is Not Fungible – Sheldon Richman/"Dhanson" 

Why didn't the Obama stimulus work? Because jobs are not the same, and labour is not homogeneous. An economic stimulus package disrupts the normal economy (by pulling some workers out of their gainful employment and by changing reskilling incentives for others) and boosting aggregate demand does nothing if the problem is a supply-side problem with finding the right people for jobs that really are in demand.

What is Wrong with Global Warming Anyway? – David Friedman

The key point here is uncertainty. Anybody who claims to know what any economy will look like in one hundred years is being foolish. We have little idea about the costs and benefits of a warmer temperature – or how rich, say, Bangladesh will be in a century, which is a very important factor when determining what (if any) action we should take to try to prevent global warming.

"the tax on freddos" – e-petitions

Thank goodness somebody is finally raising this important issue (Freddo bars). This is what e-petitions were made for.

Hayek on Keynes

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The London Lootings need real solutions

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Let's be clear. The riots engulfing London over the past few days are not politically motivated, and nor are they even protests. What may have started out as a reaction to the shooting of Mark Duggan has evolved into a mindless, thuggish reaction to the noticeable absence of law and order. A police state that spread itself so thinly in order to control every one of us has failed in its core duty of protecting the peaceful majority's lives and property from the shocking rapacity of a violent minority.

So who are the culprits? The vast majority of the looters appear to be very young, revelling in the havoc and destruction they cause rather than expressing anger and frustration. Some blame poverty and inequality, citing youth unemployment and cuts to the Education Maintenance Allowance. This is of course an insult to every respectable poor person; those with the strength of character to get by and to better themselves without resorting to violence. If this is about poverty, it is poverty of spirit amongst a young few, rather than any widespread material poverty.

Diane Abbott, the MP for the affected Hackney North is probably much closer to the truth when she points out how these youths are destroying their own communities. Rather than venting frustration at figures of authority, they are actively destroying the livelihoods of their own neighbours. The poverty of spirit here is about alienation from the rest of society rather than purely the loss of respect for authority. After all, peacefully challenging authority is the healthy sign of a free and vibrant society, whereas relished violence towards your own neighbours is nothing more than sheer barbarism.

The knee-jerk reaction from many to use authoritarian measures has therefore also been disturbing. Calls to bring in the army, use water cannons and restore respect for authority do not address the problem. These young people are alienated by an impersonal, centralised welfare system that allows them to receive and take without any appeal or bond to the societies and communities immediately around them; so instilling a grudging respect for authority will only be temporary, and potentially perpetuate the problem when a deep-felt respect for all others is required instead.

Instead, the lasting solution must come from communities. Already, there are reports of groups of residents chasing away looters, and of Turkish communities in North London clashing with the thugs. Residents and shopkeepers have little choice but to rely on themselves and each other. Citizens therefore need to be made well aware of their rights in defending themselves and their property. The myth of neighbourhood policing has been shown up for the skin-deep and top-down sham it often is - but the answer is not to replace it with a more oppressive regime; it is to allow society to confidently step in so that law-abiding communities can themselves reclaim the city from fear. 

Anton Howes is Director of the Liberty League.