Quotulatiousness

February 25, 2024

Canadian publishing “has been decimated since Ottawa took an active interest in it and while federal policies haven’t been the whole problem, they’ve been vigorous contributors”

In the latest SHuSH newsletter, Ken Whyte contrasts the wholesome intentions of the Canadian federal government on cultural issues with the gruesome reality over which they’ve presided:

Even James Moore, [Liberal cabinet minister Melanie] Joly’s Conservative predecessor in the heritage department, applauded her initiative as good and necessary, although he warned it wouldn’t be easy. Moore had wanted to do the job himself, but his boss, Stephen Harper, didn’t want to waste political capital on fights with the arts community. He told Moore his job in the heritage department was to sit on the lid.

Joly got off to a promising start, only to have her entire initiative scuppered by a rump of reactionary Quebec cultural commentators outraged at her willingness to deal with a global platform like Netflix without imposing on it the same Canadian content rules that Ottawa has traditionally applied to radio and television networks. Liberal governments live and die by their support in Quebec and can’t afford to be offside with its cultural community. Joly was shuffled down the hall to the ministry of tourism.

She has been succeeded by four Liberal heritage ministers in five years: Pablo Rodriquez, Steven Guilbeault, Pablo Rodriguez II, and Pascale St-Onge. Each has been from Quebec and each has been paid upwards of $250,000 a year to do nothing but sit on the lid.

The system remains broken. We’ve discussed many times here how federal support was supposed to foster a Canadian-owned book publishing sector yet led instead to one in which Canadian-owned publishers represent less than 5 percent of book sales in Canada. The industry has been decimated since Ottawa took an active interest in it and while federal policies haven’t been the whole problem, they’ve been vigorous contributors.

Canada’s flagship cultural institution, the CBC, is floundering. It spends the biggest chunk of its budget on its English-language television service, which has seen its share of prime-time viewing drop from 7.6 percent to 4.4 percent since 2018. In other words, CBC TV has dropped almost 40 percent of its audience since the Trudeau government topped up its budget by $150 million back in the Joly era. If Pierre Poilievre gets elected and is serious about doing the CBC harm, as he’s threatened since winning the Conservative leadership two years ago, his best move would be to give it another $150 million.

The Canadian magazine industry is kaput. Despite prodigious spending to prop up legacy newspaper companies, the number of jobs in Canadian journalism continues to plummet. The Canadian feature film industry has been moribund for the last decade. Private broadcast radio and television are in decline. There are more jobs in Canadian film and TV, but only because our cheap dollar and generous public subsidies have convinced US and international creators to outsource production work up here. It’s certainly not because we’re producing good Canadian shows.

[…]

When the Trudeau government was elected in 2015, it posed as a saviour of the arts after years of Harper’s neglect and budget cuts. It did spend on arts and culture during the pandemic — it spent on everything during the pandemic — but it will be leaving the cultural sector in worse shape than it found it, presuming the Trudeau Liberals are voted out in 2025. By the government’s own projections, Heritage Canada will spend $1.5 billion in 2025-26, exactly what it spent in Harper’s last year, when the population of Canada was 10 percent smaller than it is now.

That might have been enough money if the Liberals had cleaned up the system. Instead, they’ve passed legislation that promises more breakage than ever. Rather than accept Joly’s challenge and update arts-and-culture funding and regulations for the twenty-first century, the Trudeau government did the opposite. Cheered on by the regressive lobby in Quebec, it passed an online news act (C-18) and an online streaming act (C-11) that apply old-fashioned protectionist policies to the whole damn Internet.

This comes on top of the Liberals transforming major cultural entities, including the CBC and our main granting bodies, The Canada Council and the Canada Book Fund, into Quebec vote-farming operations. The CBC spends $99.5 per capita on its French-language services (there are 8.2 million Franco-Canadians) and $38 per capita on Canadians who speak English as the first official language. The Canada Council spends $16 per capita in Quebec; it spends $10.50 per capita in the rest of Canada. The Canada Book Fund distributes $2 per capita in Quebec compared to $.50 per capita in the rest of the country. Even if one believes that a minority language is due more consideration than a majority language, these numbers are ridiculous. They’re not supporting a language group; they’re protecting the Liberal party.

February 20, 2024

QotD: Tariffs and protectionism

Filed under: Economics, Liberty, Politics, Quotations — Tags: , , — Nicholas @ 01:00

The economic case against protectionism is practically invincible. While theoretical curiosities can be described in which an import tariff (or an export subsidy) yields to the people of the home country net economic gains, the conditions that must prevail for these possibilities to have practical merit are absurdly unrealistic.

Yet in their efforts to justify punitive taxes on fellow citizens’ purchases of imports, protectionists regularly trot out these theoretical curiosities. And none is more frequently paraded in public than is the assertion that high tariffs imposed by the home government today will pressure foreign governments to lower their tariffs tomorrow, with the final result being freer trade worldwide.

“Our tariffs are the best means for making trade freer and bringing about what Adam Smith and all free traders have desired: maximum possible expansion of the international division of labor!” protectionists declare with straight faces.

This protectionist apology for tariffs is as believable as is the apology often offered by today’s campus radicals for speech codes and the harassment of certain speakers: “Our insistence on silencing conservatives and libertarians is actually a means of promoting campus diversity and inclusion!”

Both declarations are Orwellian.

Don Boudreaux, “Is Trump’s Ultimate Goal Global Free Trade?”, Catallaxy Files, 2019-06-11.

September 20, 2023

How the feds could lower grocery prices without browbeating CEOs

Filed under: Business, Cancon, Food, Government — Tags: , , , — Nicholas @ 03:00

Jesse Kline has some advice for Prime Minister Jagmeet Singh Justin Trudeau on things his government could easily do to lower retail prices Canadians face on their trips to the grocery store:

What exactly the grocery executives are supposed to do to bring down prices that are largely out of their control is anyone’s guess. Do they decrease their profit margins even further, thereby driving independent retailers out of business and shedding jobs by increasing their reliance on automation? Do they stop selling high-priced name-brand products, thus decreasing their average prices while driving up profits through the sale of house-brand products?

If the government were serious about working with grocers, rather than casting them as villains in a piece of performative policy theatre, here are a number of policies the supermarket CEOs should propose that would have a meaningful effect on food prices throughout the country.

End supply management
Why do Canadians pay an average of $2.81 for a litre of milk — among the highest in the world — when our neighbours to the south can fill their cereal bowls for half the cost? Because a government-mandated cartel controls the production of dairy products in this country, while the state limits foreign competition through exorbitantly high tariffs on imports.

The same, of course, is true of our egg and poultry industries. Altogether, it’s estimated that supply managements adds between $426 and $697 a year to the average Canadian household’s grocery bill. It’s not a direct cause of inflation, but it’s a policy that, if done away with, could save Canadians up to $700 a year in fairly short order.

Yet not only have politicians been unwilling to address it, they have been fighting some of our closest trading partners to ensure that foreign food products don’t enter the Canadian market and drive down prices. Ditching supply management would be a no-brainer, if anyone in Ottawa was willing to use their brain.

Reduce regulations
The best way to decrease prices in any market is to foster competition. As the Competition Bureau noted in a report released in June, “Canada’s grocery industry is concentrated” and “tough to break into”. Worse still, “In recent years, industry concentration has increased”.

So why don’t more foreign discount grocery chains set up shop here? Perhaps it’s because they know our national policy encourages Canadian-owned oligopolies. While grocery retailers don’t face the same foreign-ownership restrictions as airlines or telecoms, the products they sell are heavily regulated, which acts as a barrier to bringing in cheaper goods from other countries.

Although it wasn’t the primary reason for the lack of foreign competition, the Competition Bureau did note that, “Laws requiring bilingual labels on packaged foods can be a difficult additional cost for international grocers to take on”.

Other ways the federal government could help Canadians afford their grocery bills include:

  • Jail thieves
  • Stop port strikes
  • Don’t tax beer
  • Axe the carbon tax

Don’t hold your breath for any of these ideas to be taken up by Trudeau’s Liberals.

September 17, 2023

Why Indigo’s struggles are far from over

Filed under: Books, Business, Cancon — Tags: , , , , — Nicholas @ 03:00

Following up from last week, in this week’s SHuSH newsletter Ken Whyte explains why Indigo went in the direction it chose and why it seemed like the thing to do at that time:

“Indigo Books and Music” by Open Grid Scheduler / Grid Engine is licensed under CC0 1.0

Bookselling is a difficult business and it’s been especially difficult over the last twenty years. The Internet captured a lot of the used book business and shifted it online. Amazon captured a lot of the new book business and shifted it online (and bought Abebooks.com, one of the largest used book sites).

Former Indigo CEO Heather Reisman tried and failed to convince the federal government to keep Amazon south of the border back around 2002. She went so far as to sue the feds on the grounds that Amazon, as a cultural entity, was not majority-owned by Canadians and therefore operating in contravention of the Investment Canada Act. The suit went nowhere because Amazon then had no physical presence in Canada; it operated primarily through Canada Post. By the time Amazon did announce its intention to build a warehouse north of the border, early in 2010, the government had given up enforcing the Investment Canada Act. It was happy to have Amazon create new jobs.

It was when Amazon opened its Canadian warehouse that Heather began backing Indigo out of the book business. She cursed Amazon for its anticompetitive practices, not least its habit of selling books below cost to destroy competitors, and adopted the term “cultural department store” as a pivot from bookstores.

I’ve made it clear in newsletter after newsletter that I don’t like the direction Heather took Indigo but it’s only fair to look back at prevailing circumstances in 2010 and wonder if she really had a choice.

I’m sure she had stacks of research and hordes of people telling her that abandoning books was the only move. Attempting to compete with Amazon’s enormous scale and superior logistics would have struck many as a fool’s errand. Amazon would always have the largest selection, the best price, and the fastest delivery.

There was also a widespread belief that print was dead. E-books, e-readers, and tablets were the future, along with the “one very, very, very large single text“. Global e-reader sales were growing like this:

They were expected to keep growing. So were sales of e-books. In 2012, the Financial Post quoted data from Indigo predicting that e-books would capture 50 percent of the market in five years.

So, having played the Canadian Nationalist card and discovering that the government was willing to bluster but not to meaningfully act, Heather Reisman took the advice of her consultants and diversified away from books and into all the utter crap that currently befoul at least half of the retail space in every Indigo store. After all, the big box bookstores in the United States were clearly failing in the face of Amazon, with Borders filing for bankruptcy and Barnes & Noble staggering in the same direction. From 1999 to 2019, fully half of all the bookstores in the country disappeared.

The story isn’t as bleak as it looked in 2019, as Barnes & Noble is staging quite a comeback by concentrating on the book business. It’s a radical move, but Indigo could do far worse than cooking up a maple-flavoured version of the Barnes & Noble strategy. It might fail, but they’ll definitely fail if they keep on pretending to be a department gift store that also has a few books.

August 29, 2023

The noble reasons New Jersey banned self-service gas stations

Of course, by “noble reasons” I mean “corrupt crony capitalist reasons“:

“Model A Ford in front of Gilmore’s historic Shell gas station” by Corvair Owner is licensed under CC BY-SA 2.0

New Jersey’s law, like Oregon’s, ostensibly stemmed from safety concerns. In 1949, the state passed the Retail Gasoline Dispensing Safety Act and Regulations, a law that was updated in 2016, which cited “fire hazards directly associated with dispensing fuel” as justification for its ban.

If the idea that Americans and filling stations would be bursting into flames without state officials protecting us from pumping gas sounds silly to you, it should. In fact, safety was not the actual reason for New Jersey’s ban (any more than Oregon’s ban was, though the state cited “increased risk of crime and the increased risk of personal injury resulting from slipping on slick surfaces” as justification).

To understand the actual reason states banned filling stations, look to the life of Irving Reingold (1921-2017), a maverick entrepreneur and workaholic who liked to fly his collection of vintage World War II planes in his spare time. Reingold created a gasoline crisis in the Garden State, in the words of New Jersey writer Paul Mulshine, “by doing something gas station owners hated: He lowered prices”.

In the late 1940s, gasoline was selling for about 22 cents a gallon in New Jersey. Reingold figured out a way to undercut the local gasoline station owners who had entered into a “gentlemen’s agreement” to maintain the current price. He’d allow customers to pump gas themselves.

“Reingold decided to offer the consumer a choice by opening up a 24-pump gas station on Route 17 in Hackensack,” writes Mulshine. “He offered gas at 18.9 cents a gallon. The only requirement was that drivers pump it themselves. They didn’t mind. They lined up for blocks.”

Consumers loved this bit of creative destruction introduced by Reingold. His competition was less thrilled. They decided to stop him — by shooting up his gas station. Reingold responded by installing bulletproof glass.

“So the retailers looked for a softer target — the Statehouse,” Mulshine writes. “The Gasoline Retailers Association prevailed upon its pals in the Legislature to push through a bill banning self-serve gas. The pretext was safety …”

The true purpose of New Jersey’s law had nothing to do with safety or “the common good”. It was old-fashioned cronyism, protectionism via the age-old bootleggers and Baptists grift.

Politicians helped the Gasoline Retailers Association drive Reingold out of business. He and consumers are the losers of the story, yet it remains a wonderful case study in public choice theory economics.

The economist James M. Buchanan received a Nobel Prize for his pioneering work that demonstrated a simple idea: Public officials tend to arrive at decisions based on self-interest and incentives, just like everyone else.

March 22, 2023

QotD: “[T]he Conservatives were a party whom its enemies need not fear and its friends did not trust”

[Theresa May’s] party is deeply divided on the question of Brexit, and the situation is eerily reminiscent of that which followed Joseph Chamberlain’s sudden conversion from Free Trade to protectionism in 1903. Though the times then were generally prosperous (judged by their own and not by subsequent standards), Chamberlain argued that unfair foreign competition was harming, and even destroying, British agriculture and industry. The solution that he proposed was protectionism within the then extensive British Empire.

The Conservative Party, led (or at least, headed) by the highly intellectual Arthur Balfour, was deeply divided on the question. It appeared not to be able to make up its mind; as one brilliant young Conservative Member of Parliament, Harry Cust put it, “I have nailed my colours to the fence”. Balfour, the Prime Minister, refused to express himself clearly on the subject, for fear of alienating one or other of the factions of his own party, and thereby bringing the government down. Intellectually brilliant as he was, he proved incapable of exercising any leadership.

In the election that followed Chamberlain’s conversion to protectionism, the Conservatives were swept from power. Neither free-traders nor protectionists trusted them, and the opposition Liberal Party, which at least was clear on this question, soon became a government of reforming zeal. For many years, the Conservatives were a party whom its enemies need not fear and its friends did not trust.

Theodore Dalrymple, “On Brexit, Remember that Politics Is Not a Dinner Party”, New English Review, 2018-03-11.

February 6, 2023

Food prices going up? Destroying “excess” production? That’s Canada’s Supply Management system working at peak efficiency!

Jon Miltimore reports on recent comments about some of the weird requirements for quota-holding dairy farmers under the Canadian Supply Management system:

Canadian dairy farmer is speaking out after being forced to dump thousands of liters of milk after exceeding the government’s production quota.

In a video shared on TikTok by Travis Huigen, Ontario dairy farmer Jerry Huigen says he’s heartbroken to dump 30,000 liters of milk amid surging dairy prices.

“Right now we are over our quotum, um, it’s regulated by the government and by the DFO (Dairy Farmers of Ontario)”, says Huigen, as he stands beside a machine spewing fresh milk into a drain. “Look at this milk running away. Cause it’s the end of the month. I dump thirty thousand liters of milk, and it breaks my heart.”

Huigen says people ask him why milk prices are so high.

“This here Canadian milk is seven dollars a liter. When I go for my haircut people say, ‘Wow, seven dollars Jerry, for a little bit of milk'”, he says, as he fills a glass of the milk being dumped and drinks. “I say well, you have to go higher up. Cause we have no say anymore, as a dairy farmer on our own farm. They make us dump it.”

[…]

In the United States, the primary regulations are high-level price-fixing, bans on selling unpasteurized milk (which means farmers have to dump their product if dairy processors don’t buy it), and “price gouging” laws that prevent retailers from increasing prices when demand is low, which incentivizes hoarding.

In Canada, the regulations are even worse.

While the price-fixing scheme for milk in the US is incredibly complicated and leaves much to be desired — there’s an old industry adage that says “only five people in the world know how milk is priced in the US and four of them are dead” — in Canada the price is determined by a single bureaucracy: the Canadian Dairy Commission.

The Ottawa-based commission (technically a “Government of Canada Crown Corporation”), which oversees Canada’s entire dairy system (known as Supply Management), raised prices three times in 2022, citing “the rising cost of production”.

Food price inflation remains a serious issue in Canada, but the problem is particularly acute in regards to dairy products, which has seen their annual inflation rate triple over the past year, to almost 12 percent.

If the farmers were doing this sort of price-fixing themselves, it would be illegal. Instead, because it’s the government doing it, it’s mandatory. You aren’t allowed to produce any of the supply-managed products outside the system, and the government helpfully protects Canadians from being “victimized” by cheaper imports by high tariffs on anything competing with supply managed output.

As with any rigged market, the costs of “protecting” the market are diffused among all Canadian consumers, but the benefits are concentrated in the hands of the quota-holders (and the bureaucrats who oversee the system). My issues with the supply management system are one of the “hobby horses” I’ve ridden many times over my nearly 20 years of blogging.

February 4, 2023

Federal regulation of the Canadian book market has resulted in 95% of the market now being foreign owned

Filed under: Books, Business, Cancon, Government — Tags: , , , — Nicholas @ 05:00

For the record, I don’t think this kind of cultural regulation is a good idea to start with, but as Ken Whyte points out, if staving off foreign ownership was the primary intent, could it have failed any more comprehensively than this?

Sometime last year, the Association of Canadian Publishers, which represents most of the independent book publishers in English Canada (Sutherland House is not a member), began discussing a radical — some might say dangerous — new form of regulation for the Canadian book industry.

The ACP started from the reasonable position that the existing federal approach to regulating the Canadian book industry has failed. That approach is to encourage a Canadian-owned book sector and, ipso facto, to discourage foreign ownership of Canadian publishing. Successive Canadian governments, Conservative and Liberal, have paid lip-service to the policy and failed to enforce it. The multinational publishers — Simon & Schuster, Penguin Random House, HarperCollins — have moved into Canada in a big way. Great chunks of the Canadian-owned industry, including McClelland & Stewart and Harlequin Books, have been sold to foreign buyers.

The multinationals now account for about 95 or 96 percent of book sales in Canada. All but the last 5 or 6 percent of their revenue comes from sales of imported books, most of them produced in the US or UK.

The Canadian-owned component of the book sector, which produces the vast majority of Canadian author books, has shrunk to about 4 or 5 percent of the market and sales of Canadian-authored books, says the ACP, have “flatlined”.

So you can see why the ACP is interested in a new approach: for more than half a century, while pursuing an official policy of encouraging Canadian-ownership, our government has managed to hand almost the whole of our book industry to foreign-owned firms.

I, too, am interested in a new approach. It’s the ACP’s next step that worries me.

The ACP has been watching over the past couple of years as the federal government rewrites its Broadcasting Act. The thrust of Bill C-11 is to bring foreign-owned streaming services operating in Canada — the likes of Netflix, Apple, YouTube — under the jurisdiction of the Canadian Radio-televison and Telecommunications Commission (CRTC). The bill would grant the CRTC the power to impose on streaming services the same rules it imposes on the likes of CTV and Global and the companies that own them. It would compel streamers to use Canadian talent, abide by Canadian diversity requirements, prioritize Canadian content on their platforms, and give a percentage of their revenues to a fund to support the production of Canadian content.

It has occurred to the ACP that no one in government is asking foreign-owned book publishers to abide by Canadian content quotas or to deliver percentages of their revenue to a fund to support Canadian-owned book producers: “The absence of a CRTC or related regulatory body, along with the policies and programs that such a body can enact, has meant that non-Canadian firms enjoy unfettered access to the Canadian marketplace.”

That’s not quite right. Non-Canadian firms dominate Canadian publishing because the feds won’t enforce their existing policy, not because we don’t have a CRTC for books. In any event, the ACP is embracing the spirit of Bill C-11.

Oh, goody! Government bureaucratic oversight is bound to make Canadians more interested in reading Canadian books, right? I see no way that this could possibly fail.

January 25, 2023

QotD: “National unity” and economic commonsense

Filed under: Economics, Quotations — Tags: , , — Nicholas @ 01:00

Protectionists … often trot out various versions of this national-unity argument. The premise is always that when the government uses trade restrictions that reduce the business, wages, and profits of many of us in order to compel the many of us to artificially to increase the business, wages, and profits of some of us, national unity is being served.

But never is a compelling explanation offered of just how the people of the nation are made more united – of just how some common national cause is being pursued – when one subset of the people convinces the government to reduce the real incomes, options, and freedom of another subset of the people.

Economically uninformed economic nationalists … focus only on the gains that protectionism brings to protected domestic producers. … being blind to the losses suffered by all fellow citizens save the relatively small handful of protected interests – or, inexplicably, discounting the reality or severity of these losses – interpret the gains enjoyed by the protected interests as evidence that protectionism is in the national interest.

It’s all (to use an old-fashioned term) poppycock.

Don Boudreaux, “Bonus Quotation of the Day…”, Café Hayek, 2019-04-01.

January 24, 2023

An alternative theory about German Chancellor Olaf Scholz’s hesitation to allow Ukraine access to Leopard 2 tanks

Filed under: Germany, Military, Russia, USA, Weapons — Tags: , , , , — Nicholas @ 03:00

I’ve been going on the assumption that the German government was terrified of Russian reaction if they allowed some Leopard 2 tanks to be donated to the Ukrainian forces, but eugyppius points out there’s another strong contending explanation:

Leopard 2A6M in Afghanistan

Years of peace in Europe, an ageing population and a corresponding focus on expensive social programmes have caused Germany to put its defence industry into near-hibernation. Only a little over 2,000 Leopard 2s have ever seen the light of day. Each one is a hand-built machine that takes two years to make. If Germany permits the export of the European supply of Leopard 2s to Ukraine, the Russians will grind them to nothing within months, and then Europe will have no tanks except the tanks that the Americans sell them:

    Defence industry representatives, who wish to remain anonymous, report that the Americans are offering their own used tanks as replacements to [European] countries able to supply Leopard 2s to Ukraine, together with a long-term industrial partnership. Any country that accepts the American offer would be hard to win back for the German tank industry. Berlin’s influence in armament policy would decrease correspondingly.

Tanks are driven by men, who have to be trained in the operation of specific models. Their use moreover requires a whole supply chain of munitions and especially spare parts, which the Americans are eager to offer. The upshot is that, once Europe opts into American armour, it will never switch back, and Germany will be out of the game for good. Nor should we lend much credence to the idea that our very few tanks will make any difference either way for Ukraine’s prospects. The insistence that Scholz release the Leopard 2s is simply an attempt to edge Germany further out of the European arms industry and into a position of lesser political and economic influence in Europe, so that the United States can fill the gap.

Noah Carl, over at the Daily Sceptic, drew attention last week to remarks by the French intellectual Emmanuel Todd that “this war is about Germany“:

    After the collapse of the Soviet Union, Zbigniew Brzezinski called Eurasia the new “great chessboard” of world politics … The Russian nationalists and ideologues like Alexander Dugin indeed dream of Eurasia. It is on this “chessboard” that America must defend its supremacy – this is Brzezinski’s doctrine. In other words, it must prevent the rapprochement of Russia and China. The financial crisis of 2008 made it clear that with reunification Germany had become the leading power in Europe and thus also a rival of the United States. Until 1989, it had been a political dwarf. Now Berlin let it be known that it was willing to engage with the Russians. The fight against this rapprochement became a priority of American strategy. The United States had always made it clear that they wanted to torpedo [Nord Stream 2]. The expansion of NATO in Eastern Europe was not primarily directed against Russia, but against Germany. Germany, which had entrusted its security to America, became the Americans’ target [in the destruction of the pipeline]. I feel a great deal of sympathy for Germany. It suffers from this trauma of betrayal by its protective friend — who was also a liberator in 1945.

After the anti-Russian sanctions regime and its clear deindustrialising effects on the German economy, followed by the attack on the Baltic Nord Stream pipelines, and even smaller things, such as the high-profile anti-industry protests by the American-funded activist group Letzte Generation, I am willing to believe many conspiratorial things about the Ukraine war.

January 21, 2023

When did England become that sneered-at “nation of shopkeepers”?

Filed under: Britain, Economics, Europe, History — Tags: , , , , , — Nicholas @ 05:00

In the latest Age of Invention newsletter, Anton Howes considers when the English stopped being a “normal” European nation and embraced industry and commerce instead of aristocratic privilege:

A meeting of the Anti-Corn Law League in Exeter Hall in 1846.
Wikimedia Commons.

England in the late eighteenth century was often complimented or disparaged as a “nation of shopkeepers” — a sign of its thriving industry and commerce, and the influence of those interests on its politics.

But when did England start seeing itself as a primarily commercial nation? When did the interests of its merchants and manufacturers begin to hold sway against the interests of its landed aristocracy? The early nineteenth century certainly saw major battles between these competing camps. When European trade resumed in 1815 after the Napoleonic Wars, an influx of cheap grain threatened the interests of the farmers and the landowners to whom they paid rent. Britain’s parliament responded by severely restricting grain imports, propping up the price of grain in order to keep rents high. These restrictions came to be known as the Corn Laws (grain was then generally referred to as “corn”, nothing to do with maize). The Corn Laws were to become one of the most important dividing lines in British politics for decades, as the opposing interests of the cities — workers and their employers alike, united under the banner of Free Trade — first won greater political representation in the 1830s and then repeal of the Corn Laws in the 1840s.

The Corn Laws are infamous, but I’ve increasingly come to see their introduction as merely the landed gentry’s last gasp — them taking advantage of a brief window, after over two centuries of the declining economic importance of English agriculture, when their political influence was disproportionately large. In fact, I’ve noticed quite a few signs of the rising influence of urban, commercial interests as early as the early seventeenth century. And strangely enough, this week I noticed that in 1621 the English parliament debated a bill that was almost identical to the 1815 Corn Laws — a bill designed to ban the importation of foreign grain below certain prices.

But in this case, it failed. In the 1620s it seems that the interests of the cities — of commerce and manufacturing — had already become powerful enough to stop it.

The bill appeared in the context of a major economic crisis that, for want of a better term, ought to be called the Silver Crisis of 1619-23. Because of the outbreak of the Thirty Years War, the various mints of the states, cities, and princelings of Germany began to outbid one another for silver, debasing their silver currencies in the process. The knock-on effect was to draw the silver coinage — the lifeblood of all trade — out of England, and at a time when the country was already unusually vulnerable to a silver outflow. (For fuller details of the Silver Crisis and why England was so vulnerable to it, I’ve written up how it all worked here.)

The sudden lack of silver currency was a major problem, and all the more confusing because it coincided with a spate of especially bountiful harvests. As one politician put it, “the farmer is not able to pay his rent, not for want of cattle or corn but money”. A good harvest might seem a time for farmers and their landlords to rejoice, but it could also lead to a dramatic drop in the price of grain. Good harvests tended to cause deflation (which the Silver Crisis may have made much worse than usual by disrupting the foreign market for English grain exports). An influential court gossip noted in a letter of November of 1620 that “corn and cattle were never at so low a rate since I can remember … and yet can they get no riddance at that price”. Just a few months later, in February 1621, the already unbelievable prices he quoted had dropped even further.

Despite food being unusually cheap, however, the cities and towns that ought to have benefitted were also struggling. The Silver Crisis, along with the general disruption of trade thanks to the Thirty Years War, had reduced the demand for English cloth exports. And this, in turn, threatened to worsen the general shortage of silver coin — having a trade surplus, from the value of exports exceeding imports, was one of the only known ways to boost the amount of silver coming into the country. England had no major silver mines of its own.

It’s in this context that some MPs proposed a ban on any grain imports below a certain price. They argued that not only were low prices and low rents harming their farming and landowning constituents, but that importing foreign grain was undermining the country’s balance of trade. They argued that it was one of the many causes of silver being drawn abroad and worsening the crisis.

December 27, 2022

Whatever government touches, it makes worse – book publishing as a prime example

Filed under: Books, Bureaucracy, Business, Cancon — Tags: , , — Nicholas @ 03:00

The Canadian government has always claimed to want to encourage Canadian book publishers and many, many speeches and press conferences and announcements and gestures have been produced over the years (not just by the Liberals, but usually by the Liberals). The actual results of all that political performance? “Meh” at the very best:

Another of my favorite SHuSHs of 2022 was no. 168, “It Started as Polite Talk”, in which my colleague Dan Wells of Biblioasis complained of the dominance of foreign publishers in the Canadian book market. “I don’t think there’s a literate nation in the world whose native industry makes up a small percentage of its overall market”, he said. “This, perhaps, is the real crisis of Canadian publishing.”

The astonishing thing to me is that the stated policy of the federal government for more than half a century has been to foster and protect a Canadian-owned publishing sector to avoid outsourcing our intellectual life to New York and London. Acres of policy written. Billions spent. The results are risible. Here’s a visual representation of Dan’s point. The 113 members of the Association of Canadian Publishers, representing the vast majority of English-language book publishers in Canada, produce $34 million in annual sales against the $1.1 billion of foreign firms:

If you read the self-congratulatory reports from the Department of Canadian Heritage and the Canada Council, everything is fine: “The Canadian book publishing industry consistently demonstrates a high degree of resilience.”

Does this look resilient to you?

I’ve never been much of a Canadian nationalist and, all things considered, I’d prefer less of a government presence in our arts sector, but government is now so deeply entrenched in book publishing and has made such a hash of the industry that there’s really no way out that doesn’t involve better government policy.

What, exactly, better policy might look like is next year’s project.

November 26, 2022

Indigo vastly prefers selling pillows, candles, and tchotchkes of all kinds rather than – ugh! – books

Filed under: Books, Business, Cancon — Tags: , , , , — Nicholas @ 05:00

In the latest SHuSH newsletter, Ken Whyte explains why it’s becoming harder and harder to find actual books in Canada’s biggest bookstore chain … because they no longer want to be a bookstore chain:

“Indigo Books and Music” by Open Grid Scheduler / Grid Engine is licensed under CC0 1.0

We need to talk about Indigo. As you know, it’s Canada’s biggest bookstore chain, with 88 superstores and 85 small-format stores. It sells well over half the books that are bought in stores in Canada, with Walmart, Costco, and independent bookstores accounting for most of the rest.

One problem with Indigo is that it’s failing. The other problem is that it’s abandoning bookselling. Yes, that sounds like a Woody Allen joke, but it’s not funny from a publishing perspective. We depend on Indigo.

The company’s finances have been ugly for some time. It lost $37 million in 2019, $185 million in 2020, and $57 million in 2021. Things looked somewhat better in 2022 with a $3 million profit, but the first two quarters of 2023 are now in the books (it has a March 28 year end) and Indigo has already dropped $41.3 million.

[…]

Indigo hasn’t come right out and said we’re through with books. It can’t, given that Heather [Reisman] has spent the last twenty-five years building herself up as the queen of reading in Canada. Also, the Indigo brand is still associated with books in most people’s minds and that won’t change overnight no matter how many cheeseboards it stocks. So Heather talks about a gradual, natural transition: “We built a wonderful connection with our customers in the book business. Then, organically, certain products became less relevant and others were opportunities.”

To be clear, books are irrelevant; general merchandise is the opportunity. Heather recently appointed as CEO a guy named Peter Ruis who has no experience in books. He comes from fashion retail, most recently the Anthropologie chain, which sells clothing, shoes, accessories, home furnishings, furniture, and beauty products. Anthropologie was hot in 2008, and it seems to be where Indigo wants to go today.

Fair enough. You own a company, you can take it in any direction you want, so long as your shareholders will follow. I don’t blame Heather for having second thoughts about the book business. (I have them every week. It’s a tough business.) But where does that leave readers, writers, agents, publishers, and everyone else who remains committed to books?

You’ll recall that Indigo and Chapters, between them, decimated the independent bookselling sector in Canada in the nineties. They are the principal reason Canada has so few independent bookstores today. You could probably fit the combined stock of all our independents into a handful of Heather’s stores.

The federal government let Heather’s Indigo buy Larry Stevenson’s Chapters in 2001, which gave her a ridiculously large share of the market. That shouldn’t have happened.

At the same time, with the help of some lobbying by Heather, the federal government made it clear that the US chains, Borders and Barnes & Noble, weren’t welcome up here. The argument was that bookselling was a crucial part of our cultural sector and needed to be protected from foreign domination by the Canadian government.

In that spirit, Indigo also asked the federal government to prevent Amazon from opening warehouses in Canada. That request was denied in 2010, which is about when Indigo began its transition out of books.

One can see how Heather might feel betrayed by the federal government. Instead of protecting bookselling, it swung the door wide open for Amazon. You said I wouldn’t have to compete!

October 26, 2022

QotD: Protectionism forces buyers to take worse deals

Filed under: Business, Economics, Government, Liberty, Quotations — Tags: — Nicholas @ 01:00

No law or legislation prevents businesses from demanding, as a term of their selling outputs to consumers, that consumers continue to patronize these same businesses for a minimum number of years – or, indeed, until death (or bankruptcy) do them part. No law or legislation prevents workers from demanding, as a term of their agreeing to work for employers, that employers continue to employ these same workers for a minimum number of years – or, indeed, until death (or bankruptcy) do them part.

[…] too often when buyers shift some of their patronage from domestic producers to foreign producers, domestic producers – both firm owners and workers – insist that the state is morally obliged to force buyers to continue to purchase their products and their labor without any reduction in the prices and wages charged by sellers. These producers greedily and falsely insist that it’s bad policy for the state to allow buyers to shift their patronage to other sellers. Because those other sellers happen to be located abroad – or in the case of immigrants happen not to have passports issued by the domestic sovereign – such greedy and false insistence by domestic producers and workers is remarkably seen as legitimate, despite the fact that there’s nothing remotely legitimate about such insistence.

Tariffs and other forms of “protectionism” are means of forcing buyers to act and to pay as if they agreed to terms of contracts with sellers that these buyers never agreed to and that the sellers who benefit from the protectionism were unwilling to pay for in their contractual dealings with their customers.

Protectionism is akin to changing the rules of a game in the middle of a game. It’s unfair. It’s unproductive. It’s theft wrapped in flags, and too-often faux-sanctified by specious theorizing.

Don Boudreaux, “Protectionism Is a Means of Stealing That Which Suppliers Are Unwilling to Purchase”, Café Hayek, 2016-09-10.

September 15, 2022

QotD: Protectionism

Filed under: Economics, Government, Quotations — Tags: , — Nicholas @ 01:00

Any particular protectionist policy sits somewhere on a spectrum. At one end of the spectrum is a scheme of protectionism in which government officials have great discretion in doling out the privilege of tariffs. Some producers get protected; others don’t. Here, the few rob the many.

At the other end of the spectrum, government officials have no discretion in doling out the privilege of tariffs because all industries are equally protected, to the same degree, by tariffs from import competition. Here, everyone robs everyone.

Pick any point along this spectrum, and you’ll find – in practice – some people robbing others but not themselves being robbed; other people robbing others while they themselves also are robbed; and yet other people who do no robbing but who are robbed.

What you’ll not find anywhere along this spectrum is a point at which no robbery occurs, for protectionism is in essence a scheme of organized theft.

Protectionists, as has often been observed, have the ethics of thugs. Regardless of their legerdemain or their excuses – or even their felt intent – they are all apologists for plunderers.

Don Boudreaux, “Bonus Quotation of the Day…”, Café Hayek, 2019-03-17.

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