Well, that's housing solved then

We thought this interesting from The Observer:

Most, for sure, would never be in the market in the places where oligarchs and kleptocrats like to buy, such as Knightsbridge, Kensington, parts of Highgate, and in suburban gated communities such as St George’s Hill near Weybridge, Surrey. But, as Transparency International has also argued, there has been a ripple effect: if billionaires buy in Kensington, then slightly less loaded bankers start to look in marginally less expensive districts, where the most successful professionals might be pushed further afield, and so on, until first-time buyers in outer boroughs find that their studio flats are a notch more pricey.

Increasing the demand for housing, at any point in the price hierarchy, increases prices at all points of the price hierarchy.

Interesting, no? For that also means that increasing the supply of housing, at any point in the price hierarchy, will reduce the price of housing at all points in the price hierarchy.

That is, solving Britain’s housing crisis - assuming there is that thing that needs a solution - is not a matter of having to build “affordable” housing, or rental, or council, or state, or social, it’s a matter of simply building more housing.

Which is good, because we know how to do that. Free the market from the constraints that slow down and prevent the building of houses people want to live in, where they’d like to live, and the market will indeed provide. As happened the last time we did have a free market in housing in Britain, in the 1930s. When private housebuilding rose to shave 300,000 units a year to serve a markedly smaller population.

So, now that The Observer - and therefore all right thinking liberals and progressives - are on board with the basic economics we can get on with the solution. Blow up the Town and Country Planning Act 1947 and successors. Proper blow up, bang! Kablooie!

So, having sorted housing out what do we do for the rest of the week?

Those designer markets, designed by professionals

A standard claim these days is that free markets, those things that arise from folk just getting on with things themselves, can and should be improved by the ministrations of the bureaucratic classes. Because those professionals are able to take into account all the needs of stakeholders, the value to society as a whole, in a manner that voluntary coooperation just doesn’t manage.

Recreational marijuana has been legal in the state since 2018. Supporters of legalisation argued that changing the law would deal a blow to drug cartels and generate huge tax revenues.

However, four years later law-abiding operators struggle to make ends meet while the black market is thriving. About 75 per cent of cannabis consumed in the state comes from illegal sources, industry figures say. They blame taxes, too much regulation and a failure to tackle illegal competition, which is free from red tape and able to offer cannabis at much lower prices.

So that’s that contention put to the test and it fails, doesn’t it?

Given that dope dealing is something mastered by all too many teenagers we’d generally think that it’s not all that difficult but it does seem to be beyond the wit of those professional classes.

Now imagine an entire economy festooned with these sorts of ministrations about stakeholder interests and value to society as whole. Not, exactly, what we desire is it?

The argument against that progressive control of the economy is, clearly enough, observation of what they achieve when they try it.

Another of those times that Greenpeace can go boil their heads

The point at issue here, for us at least, is not about deforestation nor food produced from areas which have been. It’s about the costs of the suggested systems:

Sini Eräjää, Greenpeace EU’s food and nature campaigner, said that the demands would have rendered the deforestation law “meaningless”.

“For example, mass balance systems allow the mixing of goods that meet legal sustainability criteria with those that do not,” she said. “They would drive a coach and horses through the middle of the EU’s due diligence proposal through which vast quantities of unsustainable and illegal goods could follow.”

The argument from the food production side is that the world should not build another entire system of grain silos, ships and railway cars for these sustainable crops as well as that current system reserved for conventionally produced. The Greenpeace argument is that the second system should be built.

As if we should rewire the country for those green and renewable electrons to distinguish them from the conventionally produced. As we don’t do that with electricity perhaps we might not with food.

Or perhaps we should. We’re open to the idea that consumers would like to know that their food is pure, pure by whatever standards those consumers think is worth having. All we would insist is that consumers who demand a certain purity have to pay for their purity demand.

What Greenpeace is demanding is that the entire global system be rewired to accord with their desires. The costs of which will fall upon all consumers of course. We think the correct solution is that those who desire the separately farmed, collected, transported and processed pay the costs of doing exactly that.

That is, some voluntary badge or scheme, perhaps similar to Fairtrade or the like, which allows consumers to - as we agree entirely they should be able to - distinguish the products. Rather than Greenpeace insisting that everything must be done this way so that all must carry the costs.

After all, we do in fact have examples of this in the food system already. Both kosher and halal foods are widely available and the costs of that availability are carried by those who desire foods produced to those standards. Which is exactly as it should be.

Our suspicion here is that Greenpeace doesn’t want to accept such a system because they know that not enough people care for their obsessions. There aren’t enough consumers who would voluntarily pay the extra that is - at which point Greenpeace can go boil their heads of course.

Assume, just for a moment, that Eric Williams is correct

A book of unpalatable truths about Britain’s slave trade has become a UK bestseller, almost 80 years after author Eric Williams was told by a British publisher: “I would never publish such a book, for it would be contrary to the British tradition.”

We have to say that we just don’t find anything unpalatable about the base thesis:

His thesis was that slavery just became economically unviable, and that the Slavery Abolition Act of 1833 was driven more by the Industrial Revolution changing the way that Britain did business rather than any moral desire to stop the practice of slavery in its colonies.

Capitalism and markets lead to the freedom of millions upon millions of people.

We fail to see anything unpalatable, or even contrary to British tradition, about that. Even, we think that’s something worth celebrating. Possibly, something worth keeping in mind as we attempt to craft current economic and political policy.

You know, it worked, why won’t it work now?

Not that we think this is a consolation and yet

Natural experiments are worth monitoring, even if we all desperately hope that the experiment never actually came to pass. Being able to compare East and West Germany in 1989 was not worth the pain and grief of the previous 40 years but there was still a lesson to be learned from doing so - socialism isn’t the way to economic development.

Cryptocurrencies are Putin’s sanctions-busting superweapon

Despots will find it easier to get their way in a world where cryptocurrencies undermine the US dollar

This could be true, yes. This always was rather the selling point of crypto, that it was a non-governmental type of money which could be used when governments were restricting the use of their own, government created, money.

We’re about to find out, aren’t we?

Money is, simply, whatever people agree to use as money. History is replete with examples of restrictions upon one type leading to the use of another. Cigarettes for example, where people might literally smoke a bank note.

No, we do not think that being able to conduct this experiment is worth the associated costs. But given that the idiocies are already happening let’s actually observe and see.

Do cryptocurrencies work as a way around government restrictions on the use of money? Or not? At least we’ll then know.

The problem with state ownership of the water companies

From America comes a little tale which is relevant to our British shouting match over the privatisation of the water companies:

‘This is everybody’s problem’: inside America’s growing sewage crisis

In the docuseries Wasteland, communities battle institutional neglect and personal and environmental damage

The American water systems are - largely enough - under what we would call local authority control. They’re suffering from a lack of that routine maintenance and investment over time which keeps a water system in top-notch condition.

Which is also roughly what the original diagnosis of the British water systems was under government control. In theory, yes, it’s true, government can allocate capital across society’s needs. Given the lower cost of capital to government - based on the ability to tax us all off into the indefinite future - this should, again in that theory, lead to a cheaper and also ideally funded water system.

Except it didn’t work out that way. Government found it was much more exciting to spend that societal capital in other ways. We might even say that this is a feature of political control of those purse strings. There’s not much red ribbon cutting to do for the cameras when the money’s spent on repairing the drains. Better to, say, fund more grievance studies courses so that joyful graduates can be crowded into the photograph.

The British water systems gained access to much, much, more capital when privatised. Further, the more privatised - as with England - the more more capital was available and the more upgrading of the water system that resulted.

Now we have that same problem to be analysed in the US. The water systems have not been invested in properly over the generations. We can use this either as a further example to show us that privatisation here was the right decision, or proffer our own privatisation as the example for the US to follow.

Yes, it’s true, in theory government should be able to allocate capital across infrastructure, borrowing powers making that capital cheaper. Real world experience says - now with this added example - that it doesn’t work out that way. The problem with the theory being that it doesn’t actually take politics into account - which is a significant problem if it’s political control of investment that is the subject under discussion.

Rest In Peace, Daniel Doron

I am saddened to report the death of my friend — and a good friend of liberty — Daniel Doron. He was founder and director of the Israel Centre for Social and Economic Progress (ICSEP), which promoted market solutions to economic and organizational problems in the country. Though Israeli politicians were generally consumed by anti-competitive socialist policies, his close contacts with Israeli politicians on all sides enabled him the the Centre to achieve a number of successful market reforms.

For much of his lifetime, Israel’s politicians were consumed by the conduct of wars and intifadas. He himself, born in 1929, served in Air Force Intelligence in the 1948 Arab-Israeli conflicts. But rather than allow such hostilities to extinguish liberty, Daniel kept on championing freedom and the benefits it would bring, even in difficult times. As he cheerfully told me during the first Intifada: “Our government may be in a state of conflict, but we can still do something to make the buses run on time.”

He recognised that mutual prosperity was the best way to promote peace and urged market reforms on the Palestinian leaders as much as the Israeli ones. He write a number of prominent articles in The Wall Street Journal and other international papers explaining the importance of peace in spreading prosperity, and the importance of prosperity and interdependence on maintaining peace. In this he was informed by his time at the University of Chicago's Committee on Social Thought and the ideas of Friedrich Hayek and Milton Friedman, who were teachers there, and with whom he continued a lasting friendship and collaboration — particularly Friedman. All three were members of the Mont Pèlerin Society, an international forum of liberal economists and social scientists, from which he garnered more pro-freedom ideas, and intellectual and moral support.

He served in various offices on the fringes of Israeli politics, advising on economic policy and entrepreneurship, and promoting pro-freedom politicians. He also had a boundless feeling for art, literature and culture: he prided himself on having seen every one of Shakespeare’s plays — even travelling specially to London to catch a rare performance of King John — and among other things, he arranged a number of exhibitions for the artist Shalom Moskovitz (whose works are on display in national museums and galleries in Paris, New York, Amsterdam, Stockholm and elsewhere). He also translated Catcher in the Rye and A Portrait of the Artist as a Young Man into Hebrew.

Cheerful, gregarious, larger than life, and never backward in coming forward, Daniel Doron will be remembered internationally as an active, energetic, enterprising and effective promoter of social and economic freedom.

That Modern Monetary Theory doesn't seem to work so well

These past few years have been an interesting test of Modern Monetary Theory. Don’t worry about the balance between tax and government spending. After all, the actual real spending is financed by simply printing money anyway, tax is that balancing item that comes later. So, why bother with the pretence, just keep printing and spending as much as pleasures politicians’ hearts to fill societal need.

UK households face biggest fall in living standards since 1950s, say experts

Ah, that doesn’t work out so well then.

There being those three reasons why it doesn’t work. One is that the quantity of money does in fact matter. Inflation will come and bite upon the fundament.

The second is that more government spending is not just more money floating around. It’s more direction of more of life by those who are good at kissing babies. Being able to get elected is not, surprise though this may be to some, actually a good qualification for knowing how society should work in any detail. That’s knowledge that resides in us, the populace, not elected representatives. Shifting the power and the chequebook over to those with even less knowledge is not a good strategy.

The final - and to us proof positive - one is that spending other peoples’ money is glorious fun, taking it one of those tricky little things that there’s always a certain hesitancy over. Politicians like to be liked - the kissing babies thing - and they just never will tax to cover their spending desires. That we’ve a national debt at all proves both two and three on our little list. If all government spending were more productive than private such then there would have been the burst of growth from that past spending to pay off the debt which would no longer exist. Also, they’ve not raised taxes in the past in order to finance that spending, have they?

Or, as we might put it, allowing politicians a free hand with a never-empty societal chequebook is about as useful as providing alcoholics with a free bar. Some will eventually learn self-restraint, undoubtedly, but not many and not soon.

The fog of ignorance argument for minarchy

It appears that the decisions about lockdown were not well taken:

Scientists did not have accurate Covid case numbers, and were unsure of hospitalisation and death rates when they published models suggesting that more than 500,000 people could die if Britain took no action in the first wave of the pandemic, it has emerged.

That’s a bit of a blow to the accuracy of any predictions or models.

Yet as Britain’s epidemic begins to fade away, it is becoming increasingly clear that many influential scientists were ignored, ridiculed and shunned for expressing moderate views that the virus could be managed in a way which would cause far less collateral damage.

Instead, a narrow scientific “groupthink” emerged, which sought to cast those questioning draconian policies as unethical, immoral and fringe. That smokescreen is finally starting to dissipate.

We agree that public health policy in the face of a pandemic is not quite the place to be arguing for laissez faire. Something had to be decided after all - that Swedish model is looking ever better, as at least one of us recommended at the time.

However, our point here is something larger. It also involves letting everyone in on a little secret. Every decision about anything is taken in this same fog of ignorance. No one at all knows the entirety of the economy nor society. Everyone is making certain guesses about reality when they make a decision about anything at all.

Which is the argument for minarchy of course. Government is no better - at best, it’s entirely possible to outline ways in which it is worse starting with the quality of the people making the decisions - at this than the private sector. The big difference being that government makes the mistake for everyone. Any business decision makes it for that business alone. Or, to widen a little, any organisation makes it for the staff, suppliers and consumers of that organisation alone, profit is not the defining difference here.

If every decision suffers from the same problems of information lack, groupthink and just plain commonplace incompetence then we would rather each and every decision affect smaller, not all, areas of everything.

The useful argument in favour of minarchy is therefore that decentralisation of power allows mistakes to only cock up part of, not all of, life. Which, given recent governmental performance across the near entirety of the rich world seems like a useful argument in favour of that minarchy, doesn’t it?

Dear Sir Ed Davey - To Whom?

An idea is gaining some credence, that BP must be made to sell its stake in Rosneft. Sir Ed Davey for example:

On Friday Ed Davey, the Liberal Democrat leader, wrote to the Prime Minister urging him to sanction Rosneft and put pressure on BP to divest its stake.

He wrote: “It is unacceptable for a flagship British company like BP to hold such a large stake in a Russian state-backed company.”

It’s worth, perhaps, reminding that the British government no longer owns BP. Therefore what BP does - within the law - is not the concern of the British government.

But over and above that there’s the simple practicality of the idea. We’ve just - rightly so - placed significant sanctions upon the Russian economy. With effect from, we believe at least, 1 March no one may invest further in that economy. Bond issues may not be bought, capital markets are closing and so on. So, who could actually buy that 20% stake? No other oil major can. Private investors cannot. Institutions would be locked out. The only possible buyer would be someone within that Russian and sanctioned economy.

The price would be pretty bargain basement therefore.

The proposal is, therefore, that the largely outside Russia shareholders in BP should lose very large sums of money, someone inside Russia - or the Russian state itself - should be able to buy a large and valuable asset at pennies on the $. This is to be done in the name of punishing Russia and Russians.

Someone here has lost their minds and it isn’t us.

Now, if this sale had been forced through at some point in the past, the money safely banked before the sanctions, we would still be opposed to the idea but could admire the Machiavellian manipulation of selling at full price then slicing the value through sanctions. But to force the sale afterwards? It’s not just what are these people thinking, it’s are they thinking at all?

As is so often the case the proposals of those who rise to senior positions in politics are the finest and purest argument in favour of minarchy.