Quotulatiousness

August 7, 2026

Brexit plus ten

Filed under: Britain, Economics, Europe, Government, Media, Politics — Tags: , , , — Nicholas @ 04:00

Mark Nayler looks at the state of Britain ten years after the historic vote to leave the European Union. He notes that there appears to be a bit of buyer’s remorse among those who voted to leave the EU, although I would note that the political leadership, both Conservative and Labour, almost all did their level best to sabotage any positive results (although the “Boriswave” of immigrants would have swamped even a substantial economic boom all by itself).

In the run-up to the UK’s referendum on EU membership in June 2016, extravagant claims were made by both the Remain and Leave campaigns. Leaving the EU, the so-called Remainers warned, would propel the UK into recession and mass unemployment. Brexiteers, as they were dubbed, countered with promises of enhanced sovereignty, tighter borders, and liberation from Brussels’s stifling bureaucracy. The latter won the Brexit vote (as it came to be known) by 52% to 48%. But just over a decade on from that historic decision — and six and a half years since the UK officially left the bloc — it’s less clear whether they also won the argument.

This is in large part because of geopolitical turmoil since the vote. Throughout the last decade, there has been a global pandemic, Russia has launched a full-scale invasion of Ukraine (which, in turn, caused an energy crisis across Europe), and Donald Trump has waged a series of tariff wars across the world. The difficulty of disentangling the effects of these events on the UK economy from those caused by Brexit is formidable. One analyst has even said that “we will never know precisely what the impacts of Brexit were”.

Overall, however, the sweeping transformations predicted by both Brexiteers and Remainers — positive in the former case, negative in the latter — have not occurred. The actual changes have been less dramatic, more gradual, and more mixed than either side forecast. One also has to factor in the UK’s lack of a stable leadership since the vote: when Labor’s Andy Burnham took over from Keir Starmer on July 20, he became the UK’s 7th prime minister in 10 years. This, perhaps, has so far prevented the theoretical autonomy now possessed by the UK from being fully realized. According to a poll conducted in June, 57% of Britons now believe that it was a mistake to leave the EU — meaning there are a lot of dissatisfied Brexiteers out there.

Remainers forecast economic ruin for the UK if it chose to leave the EU. According to the then-Chancellor of the Exchequer George Osborne, “A vote to leave would represent an immediate and profound shock to our economy [and] that shock would push our economy into a recession”. A recession failed to materialize, although the pound suffered its biggest-ever one-day drop on June 24, 2016, the day after the vote, falling 10% against the dollar and 7% against the euro (it still hasn’t returned to its pre-Brexit values against either currency, although Trump’s tariff wars and the pandemic are also factors here). That said, researchers broadly agree that Britain’s economy has contracted due to Brexit. According to a 2025 paper for the US National Bureau of Economic Research, UK GDP per capita is 6–8% lower than it would have been had the UK remained in the EU. Investment is down by 12–13%, employment by 3–4%, and productivity has been reduced by about 4%, according to its authors.

Immigration was a major theme of the Leave campaign. The UK Independence Party’s widely criticized poster showed a large group of Syrian refugees at the Croatia–Slovenia border in 2015, next to a massive slogan reading “Breaking Point” — and, underneath it, in smaller letters, “The EU has failed us all”. The center-right party was playing to concerns about a surge in migration over the decade and a half preceding the referendum, triggered by EU enlargements in 2004,when ten new countries joined, and in 2007. In 2000, migration to the UK from other EU countries stood at 6,000, but by 2015 it had risen to 330,000. In 2015 and 2016 alone, more than a million migrants arrived in Britain. According to a poll conducted on the day of the referendum, 33% of Leave voters said the main reason for their decision was a belief that leaving the EU “offered the best chance for the UK to regain control over immigration and its own borders”. It seems the poster had done its job.

The composition of Britain’s migrant population has changed radically since Brexit, with an increase in non-EU migration more than compensating for the reduction in arrivals from the EU. But immigration has not decreased. In fact, the UK has witnessed record levels of immigration over the last decade. In the year ending March 2023, just over three years after Britain’s withdrawal from the bloc, net migration peaked at 944,000.

August 3, 2026

“We’ve got steel mills at home”

Filed under: China, Economics, Government — Tags: , , , , — Nicholas @ 03:00

When you want to point at amazingly vast political failures, the Chinese plan to have peasants produce steel in tiny backyard furnaces must rank near the very top of boneheaded notions. It would be funny except for the huge costs in material, environmental damage, and human lives:

Mao Zedong killed roughly 45 million people between 1958 and 1962, and the backyard steel furnace campaign sits at the center of that catastrophe as a textbook case of central planning consuming itself alive.

The logic of the Great Leap Forward went like this: if the Soviet Union industrialized through state-directed production, China would do it faster and bigger. Mao ordered peasants across every province to smelt steel in small furnaces built on collective land. Party officials set output quotas with no reference to actual resources, actual skills, or actual demand. Farmers melted down their own plows, woks, and door hinges to hit the numbers. They stripped hillsides bare for fuel. What came out of those furnaces was overwhelmingly pig iron so brittle it had zero industrial use. The quotas got reported as fulfilled, the statistics traveled up the command chain, and Beijing celebrated a triumph that existed only on paper.

You have to understand what those farmers were abandoning to stand at furnaces all day. The 1958 harvest was, by most estimates, actually decent. But with the rural labor force diverted to smelting operations, crops rotted in the fields unharvested. Free market economists call this opportunity cost: every hour a farmer spent producing worthless slag was an hour not spent producing food. The price system, had anyone been allowed to use it, would have made this tradeoff immediately visible. Prices signal scarcity. Planners just issue directives and wait for reality to disobey them.

Local officials faced execution or labor camps for reporting shortfalls, so they reported surpluses. Beijing then exported grain abroad, partly to service debts to the Soviet Union, partly to project an image of socialist success, even as provinces like Anhui and Sichuan descended into mass starvation. The state had monopolized food distribution, so when the numbers were wrong, there was no private market, no informal trade network, no alternative channel to move grain to the dying. The apparatus designed to feed people became the mechanism that starved them.

This is what the elimination of private property and price signals actually produces in practice: 45 million corpses and a generation of Chinese children who grew up stunted by famine.

August 2, 2026

“Cash for Clunkers” – the seen and the unseen

Filed under: Economics, Environment, Government, USA — Tags: , , , , , — Nicholas @ 03:00

French economist Frédéric Bastiat explained why the “Cash for Clunkers” program would fail … and he wrote about it more than a hundred years before it happened – “That Which is Seen, and That Which is Not Seen”. The US government publicized the “seen” … removing older cars from the roads in pursuit of lowering pollution. Nobody publicized the “unseen”, as Handre explains:

The Cash for Clunkers program, which Congress passed in June 2009 and burned through its $3 billion budget in under two months, destroyed functional wealth on a national scale, and somehow they called it “stimulus”.

The mechanics were simple: trade in a working car, receive up to $4,500 toward a new one, and watch government employees pour sodium silicate into the old engine to make it seize permanently. Around 700,000 vehicles got crushed. These were not rusted-out death traps. The eligibility rules required the trade-in to be drivable and insured. You were watching the state systematically annihilate usable capital because Keynesian demand theory told it that destruction generates recovery. Frederic Bastiat explained why this is wrong in 1850, in an essay short enough to read on your lunch break. Congress ignored it.

The ripple effect hit people the government never mentioned in its press releases. Mechanics lost repair work. Used-car dealers watched their inventory evaporate. Low-income buyers who depend on the sub-$5,000 market faced prices that jumped roughly 10% in the years after the program. Free market economists call this “seen versus unseen”. Politicians only showed you the gleaming new Chevy Malibu driving off the lot. They never showed you the single mother in Akron who needed a $3,000 Corolla and found nothing affordable left on the lot.

Even the environmental justification collapsed under basic scrutiny. A 2009 study by Resources for the Future calculated that the program cost between $237 and $365 per ton of carbon dioxide reduced. The voluntary carbon credit market at the time priced a ton around $10 to $20. The government spent up to thirty times the market rate to achieve an environmental outcome the market was already pricing far more efficiently.

This is what central planning always does. It takes your money, destroys real assets, and transfers wealth from the poor to auto manufacturers and their financiers. The program’s designers received awards. The Akron mother paid higher prices. The engines sat crushed in junkyards. Nobody in Washington answered for any of it.

July 31, 2026

Nobody “designed” capitalism

Filed under: Britain, Economics, Education, History — Tags: , , , , — Nicholas @ 03:00

One of Karl Marx’s cleverer notions was to come up with a label for the economic system that had slowly emerged from the feudal period in Europe. It wasn’t ever the result of some overarching plan or campaign, it was just the easiest way for producers and consumers to connect without coercion or force. It had no real name until its declared enemy named it:

Capitalism did not begin in a boardroom. Voluntary exchange, repeated across generations, built the fairs, the credit networks, the double-entry books that Luca Pacioli codified in 1494. Nobody planned this. That’s the whole point.

The story you learned in school runs backwards. You were taught that greedy factory owners exploited children until noble legislators rescued them in 1833. What actually happened: the Industrial Revolution dragged English living standards up so fast that population doubled between 1750 and 1850 because people stopped dying. Wages rose. Life expectancy rose. The factory that horrifies the modern reader was an upgrade from a life of starving on a tenant farm at the mercy of the harvest. Children worked because their families were poor, and the factory made those families less poor. The reformers arrived after the market had already done the heavy lifting, then took credit for the sunrise.

Real capitalism needs sound money, and here is where the tragedy sharpens. Between 1815 and 1914, under a classical gold standard, prices in Britain fell gently while output exploded. You could save a coin and expect it to buy more later. That world died in stages: 1914, when governments suspended gold to print [money for] war; 1933, when Roosevelt confiscated citizens’ gold at $20.67 an ounce then revalued it to $35; 1971, when Nixon closed the window entirely and handed us the pure fiat regime you live under now.

What followed was corporatism wearing capitalism’s coat. When the Federal Reserve can conjure trillions and hand them to the banks and firms closest to the spigot, you no longer have a market allocating capital. You have a cartel allocating privilege. The 2008 bailouts were a monetary system doing exactly what a monetary system built on the printing press does.

When someone blames “unfettered capitalism” for the mess around you, ask them to point to the fetters.

The answer is to let go. Less regulation, no central bank, less tax, less government. Not more!

A few days ago, Severian point out:

Title page of Das Kapital in the first German edition of Volume 1.
Wikimedia Commons.

At its broadest, “system” means something like “the appearance of rule-governed behavior”, and so yeah, “capitalism” is a “system” in that sense. The “law” of Supply and Demand is a “rule”, if you like, and we can start piling on the ACK-shullies from there. But it’s not particularly useful trying to analyze why and how it happens; the only thing we need to proceed is to acknowledge that it does.

“It” being “reification“, which you’ll recall means “treating an abstraction as if it were a real object”. Synonyms (per Wiki) include “concretism, hypostatization, or the fallacy of misplaced concreteness”, and while I personally dig “hypostatization” — it’s got that groovy Gnostic ring to it — “reification” is easier to type; plus it was very successfully repurposed by Marx and we might need that later, so “reification” it is. Calling “the natural human tendency to exchange stuff for other stuff, each party pursuing what he perceives to be his own advantage” Capitalism is a reification. It’s useful rhetorical shorthand …

… but it carries with it a tendency to mistake the map for the territory, you dig? Instead of confining yourself to “the natural human tendency to exchange stuff for other stuff, each party pursuing what he perceives to be his own advantage”, you inevitably start talking about the “rules” or “laws” of Capitalism. And from there, it’s just a short leap to our course title: the morality of Capitalism.

Because that’s what rules are for, no? To keep things fair — or equal, if you prefer. If we want to find out who’s better at tennis, let’s say, we set up a bunch of rules, to eliminate from the outcome every “inequality” but skill (and dumb luck). Both players have to agree on the scoring. Tennis, therefore, really is a system, strictly speaking. It really is a game, in the mathematical and linguistic senses.

Tennis is not a reification. When we talk about tennis, we are talking about the rules of the game, or the outcome of an individual match. That’s it.

But watch what happens when we start talking about the “rules” of Capitalism. The very word “rule” (or “law”) unavoidably contains the notion of fairness. The rule determining “out of bounds” in tennis is explicitly designed to make the game fair, because that’s what game rules are for — to make the players equal in every respect but skill. You couldn’t know who is the better tennis player if the rules were arbitrary; “out of bounds” has to be clearly defined, and universally applicable.

If you start talking about the “rules” of Capitalism, then, you might not think about “fairness”, but you can’t help but feel it.

Which the contrast with Communism makes worse. Because of course “Capitalism” and “Communism” are “dialectically constructed”. I don’t like throwing Marxist jargon around, but it’s useful in this case. Because Communism is a system, or a game, or whatever word you prefer. Communism does have rules, and they are explicitly designed — like the rules of all games — to ensure equality.

(And they do, comrades, they really do. As P.J. O’Rourke pointed out back when he was funny, Communism is as fair as it gets. We’re all equally broke, starving, and dead, but goddamn it, we’re equal).

I’m sure I don’t have to tell this crowd what a bad idea it is to let your enemies define things for you, but that’s what “Capitalism” does. Karl Marx his own self invented that term. Pick your famous “Capitalist” thinker — Adam Smith, David Ricardo, whoever. They didn’t call themselves “Capitalists”; they called themselves political economists. They weren’t devising rules for a game; they were describing phenomena they observed. It was only after Marx slapped the “Capitalism” tag on the natural human tendency to exchange stuff for other stuff, each party pursuing what he perceives to be his own advantage, that we started seeing “Capitalists”.

July 28, 2026

QotD: Projecting the effect of a maximum wage law

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

What would be the impact of such a policy?

We cannot know exactly, because we would struggle to find a real-world example of it in a comparable country. But we could think of it as, effectively, a 100% marginal tax rate on incomes above £100,000. We could then look at the empirical literature on how responsive top earners are to tax incentives, and extrapolate from that.

We know from previous studies that the behaviour of top earners is quite sensitive to tax changes. Last year, the Institute for Fiscal Studies (IFS) tried to model the impact of a proposal to increase the tax burden on the top 5% of earners. In this case, the proposal was to lower the threshold for the 45% additional rate of income tax from £150,000 to £80,000 per annum, and to introduce an “additional additional rate” of 50% for incomes above £125,000.

If nobody changed their behaviour, such a policy would increase tax revenue by just over £9 billion per annum. But people would, of course, change their behaviour. Some top earners would switch to less demanding positions, some would retire earlier, some would reduce working hours, some would engage in more proactive tax planning (i.e. legal tax avoidance), some would simply emigrate, and so on.

We know for certain that responses of that kind exist. But we cannot exactly quantify them. So the IFS came up with a range of plausible outcomes rather than one definite number. It turns out that at the most optimistic end of the spectrum, behavioural changes would still knock over a third off the potential additional tax revenue, reducing it from over £9 billion to under £6 billion. At the most pessimistic end of the spectrum, the policy would fail to raise any additional tax revenue – it would, in fact, reduce revenue by almost £1 billion. (Stop smirking, Dr Laffer.)

If a tax rate of 50% can be predicted to trigger such strong behavioural responses, you can guess how much damage an implicit rate of 100% would do.

Kristian Niemietz, “The public love it, so what’s wrong with the idea of a maximum wage?”, Institute of Economic Affairs, 2020-10-14.

July 24, 2026

To Zohran Mamdani, “working class” means earning less than a million a year

Filed under: Economics, Media, Politics, USA — Tags: , , , , — Nicholas @ 04:00

Rob Henderson coined the fantastically useful phrase “luxury beliefs”, and regularly points out examples of people expressing beliefs that allow them to virtue signal at little or no cost, yet if the ideas were implemented would harm those not as privileged as the speaker:

New York City mayor Zohran Mamdani, 10 February 2024.
Photo by Kara McCurdy via Wikimedia Commons.

In a recent New York Times interview, Zohran Mamdani, New York City’s socialist mayor, struggled to define “working class”.

At one point he was asked point-blank, “How do you define the working class?”

Mamdani replied, “I think if you have to work to pay your bills, I think that that is one definition of being a part of the working class”.

After some pushback from the interviewer, Mamdani said he would draw the line at “about a million dollars a year”. I have no idea how he can say that without any embarrassment, but that’s why he’s a politician and I’m not. Say what you will about him, but the man knows his base. These are the people who claim to be the champions of women yet — and please forgive what has now become a hackneyed line — can’t define what a woman is, and they claim to be the champions of the working class, yet can’t define what the working class is. Or they redefine both terms to be so expansive that they could potentially encompass just about everyone.

This is where the luxury belief class has steered us.

Anyone who isn’t a millionaire gets to be working class now. It sounds absurd but that’s where we’re at now. Remember during the primaries in 2015, Bernie Sanders said that “the millionaires and the billionaires” need to pay their fair share? At some point over the past decade, he dropped “millionaires” because he became one. Now you see the millionaires condemning only the billionaires. Mark my words, at some point in the not-too-distant future, you will see the billionaires disparaging the trillionaires. Maybe inflation will hasten that phenomenon.

Anyway, in that Mamdani interview, the focus on defining class by money is revealing.

People often conflate social class with economic class. This allows us to talk about the former while pretending we are talking about the latter.

It is easier to discuss income than educational pedigree, accent, hairstyle, clothing, taste, or zip code.

But education usually signals social class more clearly than income does.

Research has found that parental educational attainment is the most important objective indicator of social class. This is because, compared with parental income, parental education is a more powerful predictor of a child’s future lifestyle, tastes, and opinions. If your parents went to college but you didn’t, you’re still middle-class or higher. Not working class.

Education shapes habits, networks, and outlook long after the degree is earned. Higher education bestows cultural capital: patterns of speech, tastes, opinions, and expectations about life. Income may rise and fall over a lifetime. The worldview formed in selective institutions usually endures. By that standard, college graduates, regardless of earnings, are not working class.

Education also shapes political views more strongly than income does.

In 2021, Ezra Klein pointed out that “We tend to think of class as driven by income” but that “A high school dropout who owns a successful pest extermination company in the Houston exurbs might have an income that looks a lot like a software engineer’s at Google, while an adjunct professor’s will look more like an apprentice plumber’s. But in terms of class experience — who they know, what they believe, where they’ve lived, what they watch, who they marry and how they vote, act and protest — the software engineer is more like the adjunct professor.”

Plainly, a PhD who takes a job driving a taxi will tend to vote like other PhDs, not like other taxi drivers, especially if he or she also has a parent with a college degree.

It was so much easier to recognize the British classes, at least back in the 1960s that is:

John Cleese, Ronnie Barker, and Ronnie Corbet as the avatars of the British upper, middle, and lower classes
Original version from The Frost Report, 7 April 1966.

Brian Lilley: “Carney has run out of time”

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

While Prime Minister Mark Carney has been playing to the anti-American crowd at home, President Donald Trump has pretty clearly run out of patience with Canada’s dilly-dallying:

🚨 Trump just dropped a tariff ultimatum on Mark Carney — and Canada’s PM is officially out of time. Instead of cutting a real deal, Carney’s played delay tactics: dodge serious talks and pray Democrats win midterms to weaken Trump.

Foolish strategy. Here’s why it’s blowing up 👇

Trump’s threat: 50% tariffs on $28 BILLION in Canadian exports (hockey sticks to whisky, honey to flowers) unless Canada brings real solutions by Aug. 19.

U.S. Trade Rep Jamieson Greer: This is about forcing real negotiations.

Carney says he’s “intensifying” talks. But sources on BOTH sides say Canada’s offers are just vague “promises to discuss”. No substance.

Insiders call it “ragging the puck” — stalling in hopes a weaker Trump post-midterms gives Canada a sweeter deal.

Meanwhile, manufacturing jobs are bleeding: 17K lost last month alone. Over 50K since Carney became PM.
Ordinary Canadians are paying the price while politicians play games. 😡

Carney’s team hasn’t even used obvious bargaining chips:

* Provincial bans on U.S. booze (keep ’em in place, but not leveraged)
* Preferred access to Canada’s critical minerals
* Fixing cheese import disputes

These could be packaged to get tariffs lifted. Why sit on them?

Reality check on dependency:

🇨🇦 Canadian exports to U.S. = 19.9% of our GDP
🇺🇸 U.S. exports to Canada = just 1.4% of their GDP

Trump’s claim Canada “needs us to survive” is exaggerated — but we’re far more exposed.

Delaying hurts us way more.

Why the foot-dragging?

Carney has little incentive to end the fight. Angry Canadians at Trump = more Liberal votes.

Politics over prosperity. Classic.

Question for Canadians:

Should Carney drop the delay tactics, use our leverage, and get a deal done ASAP? Or keep waiting for U.S. midterms?

What’s your take?

Reply below 👇

Who’s really paying for this? Workers or politicians?

Jen Gerson points out that by being relative pushovers every time it’s clear that Trump really means something, it’s confirming American belief that we’ll always be pushovers:

Parody cover of Mark Carney’s Value(s) seen on the net.

This week’s announcement of 50 per cent tariffs on a raft of goods is more proof that the Liberals’ ironclad strategy of “say tough things in public but then capitulate quietly on issue after issue” isn’t panning out. And I write that knowing full well that the statute being used to implement the tariffs is old, tenuous, and may not hold up. I’m not talking about them, for a moment. I’m talking about us.

Where do we even start with Prime Minister Elbows Up? Dropping the Digital Services Tax and retaliatory tariffs? The apology for the terrible sin of running a Ronald Reagan ad? And now we have the business of the Gordie Howe Bridge: to recap, Canada fronted $6.4 billion to build the span between Windsor and Detroit, which was to be paid back over decades through bridge tolls. At the last minute — and presumably at the behest of the rich MAGA donor who owns the competing bridge — Donald Trump announced the bridge would not open until the U.S. got a better deal. After more quiet negotiations, such a deal was struck.

Initially, Carney claimed that the U.S. would take a split of the operating profits — but only after the debt was paid off, something which was expected to bring real profits down to a very small amount. Effectively, he said the deal would give the Americans chump change.

Subsequent reporting suggested this wasn’t the case at all; that the Americans are to take their cut from operating revenue, which presumably will have the effect of dramatically extending our payback period.

In short, it’s a major concession, made worse by the fact that Carney appears to have lied.

And, frankly, I’m not sure which of these two pills is harder to swallow. Regular press conferences aside, Team Canada has been rather shockingly non-communicative about what the hell is going on with USMCA re-negotiations. I give the government some credit for the need to maintain “strategic silence” in order to pursue “strategic patience”, but if your entire brilliant communications strategy for rallying the Canadian public in the face of unprecedented American economic aggression amounts to “Shush. Just trust us. Carney’s super smart. He’s got this,” well, then, you really can’t lie and be dumb about it.

Carney came to power 18 months ago with an explicit “Elbows Up” promise that is deteriorating into a punch line. I don’t object to choosing not to rise to the bait of every provocation. But when “doing nothing” is accompanied by caving on everything, what you have is no longer “strategic patience.” It looks a lot more like “showing the Americans that we have no appetite for retaliation.” We’ve indicated with crystal clarity that aside from the odd mean speech, and the fact that Canadians are Big Mad, we will extract no material consequence for anything they choose to do. And absent consequence, they will continue to escalate past the point of diminishing returns.

Why?

Because they can.

Because they don’t care.

Because they take delight in their own contempt for our demonstrated weakness.

July 23, 2026

DSA: Trump doesn’t respect political norms. Also DSA: Let’s abolish the current system

Filed under: Economics, Government, Media, Politics, USA — Tags: , , , , , — Nicholas @ 05:00

On Substack, Chris Bray attempts to establish what the nascent Democratic Socialists of America actually stand for — and what they stand against:

Democrats are racing left, sprinting faster and faster toward abject authoritarian idiocy. Democratic socialists are defeating old Democrats in Congress and governing our big cities to death, and the DSA now offers an explicitly post-capitalist future in which everything is “free”, the one thing that resources can’t actually ever be:

    You have no debt. You don’t need health insurance. You don’t pay a mortgage or have a landlord, because comfortable housing is a human right. Your retirement is publicly funded. Food, education, energy, medicine, and transportation aren’t for-profit businesses; they are common goods and utilities.

You get as much food, energy, and everything else as you feel that you need, and labor is no longer imposed on anyone. Should work well.

Meanwhile, after years of dire warnings that Evil Trump doesn’t respect our Constitution, here’s an actual headline today from one of the mindless institutions of the Democratic Party’s narrative-making apparatus:

They also propose the replacement of the Supreme Court, the restructuring of the presidency, and the elimination of the Electoral College, but other than that they’re really mad that Trump doesn’t respect our political norms. Trump is very bad, because he’s tearing down our political system, and also we demand the destruction of our political system.

Why are they moving left, moving left, and then moving left some more? Why doesn’t anything ever hold them in check?

Because there’s no anchor on the right to hold the left anywhere near the center. There’s no force in American politics pulling consistently and effectively in the other direction. They’re unopposed and unanchored, so nothing holds them. Mixing metaphors, it’s like gravity ceased to exist, so the moon is floating away. Political centering is the product of a contest. Bad ideas are punished and rejected through debate. And we increasingly don’t have that. Here’s a Republican congressman bragging about getting his measure passed to make home repairs a federally funded giveaway:

Democrats think the federal government should just give you whatever you need as a government handout, while Republicans think the federal government should, how can I put this, just give you whatever you need as a government handout. Your bathroom faucet broke? Don’t worry, that’s a federal program.

Meanwhile, while Democrats demand the abolition of the Senate, the Supreme Court, the Electoral College, and private property, prominent Republicans are theatrically angry at … Donald Trump.

July 22, 2026

Andy Burnham’s “Manchesterism” at the national level

Filed under: Britain, Economics, Government, Politics — Tags: , , , , — Nicholas @ 06:00

In The Critic, Shimeon Lee looks at Andy Burnham’s time as Mayor of Greater Manchester and what his record there says about how he will try to run Britain from No. 10:

Prime Minister Andy Burnham’s official MP portrait, July 2026.
© House of Commons via Wikimedia Commons.

Andy Burnham is now Prime Minister, and the country soon to discover what “Manchesterism” means when applied to the British state. Burnham’s nine years as mayor, alongside his earlier national record, offer a clear guide to the instincts he is likely to bring to No.10: a willingness to raise taxes, expand the state and prioritise policies that sound good but ultimately deliver poor value for money.

It is revealing that after being elected mayor in 2017, one of Burnham’s first acts was to impose a new charge on households in Greater Manchester. The new mayoral precept was initially set at £8 for the average band D property, funding the mayoral operation, including Burnham’s £110,000 salary. As so often happens with new charges, it did not remain modest for long. The charge more than doubled the following year, rising again in 2020-21, 2022-23, 2025-26 and 2026-27. By the time Burnham resigned to contest the Makerfield by-election, it had risen to £61.75, nearly eight times the original amount in less than a decade.

As residents paid more, the mayor built an increasingly elaborate network of advisers, commissioners and panels funded by taxpayers. These included a young person’s advisor paid £500 per day, a transport commissioner and an active travel commissioner each paid £650 per day, and an LGBTQ+ advisor paid £177 per day. He also established seven equality panels facilitated by “culturally appropriate organisations” which cost £392,435 a year. Taxpayers can only speculate how much larger that ecosystem could become when he takes control of Whitehall.

The mayoral precept was not the only tax rise implemented by Burnham. As mayor, he raised every tax under his control. The band D police precept rose from £162.30 when he entered office to £285.30 by the time he left, a 76 per cent increase. At the same time, the fire precept increased from £59.95 to £92.20, a 54 per cent increase. Both increases substantially outstripped cumulative inflation of 37.5 per cent during that period.

Even that understates his tax-raising ambition, as it only includes the charges he managed to implement. In 2019, Burnham proposed a clean air zone for Greater Manchester which would impose a daily charge on commercial vehicles that did not comply with environmental standards: £7.50 per day for taxis, £10 per day on vans and £60 per day on buses, coaches and heavy goods vehicles. These would have added thousands of pounds a year to local businesses’ costs.

July 20, 2026

Carneynomics in action

Filed under: Business, Cancon, Economics, Government, Media, Politics, USA — Tags: , , , , , — Nicholas @ 05:00

Even though the relic media are all singing from the government’s hymn book — because they might lose their generous subsidies if they don’t — a few dispiriting details about the real state of Canada’s economy still slip through:

This is the Carney economy in one picture.

He sold himself as the adult in the room. The banker. The international dealmaker. The man who could handle Trump and restore confidence.

Instead, Canadian manufacturers are preparing their exit.

According to the KPMG survey, 42% of manufacturers have already moved some production to the United States or are considering doing so. Another 36% are cutting investment, 12% have paused spending and 9% have cancelled projects altogether.

Manufacturing jobs are disappearing. Investment is drying up. Factories are moving south.

Businesses respond to incentives, costs and uncertainty. They do not remain in Canada because Mark Carney gives polished speeches about nation-building. They go where taxes, energy prices, regulation, labour costs and access to markets make production worthwhile.

Carney promised competence. What Canadians are getting is stalled trade talks, falling investment, disappearing jobs and another Liberal government that seems incapable of understanding how private-sector wealth is actually created.

A great many Canadians now see Carney as an incompetent ideologue in a good suit, surrounded by the same Liberal machine that helped create this mess.

And what consequences does he face?

Very few.

Carney is rich. His family is secure. His pension, investments and connections are intact. He will never worry about a mortgage payment, a grocery bill, a lost factory job or whether his children can afford a home.

The people who pay for his failures are workers, families, small-business owners and young Canadians whose futures are being shipped across the border.

That is the ugliest part of modern government. The people making the decisions are often insulated from the consequences. They can damage an economy, lose jobs, drive away investment and still retire wealthy, respected and welcomed back into corporate boardrooms.

A résumé is not an economic policy. A banker’s vocabulary cannot hide factories closing and investment leaving.

Canada is not being built. It is being hollowed out, while the people responsible remain comfortable.

This is why I thought the announcement on Friday that a Republican senator is calling for Carney’s assets in the US to be seized and to refuse him a visa … it’s beyond weird that a Canadian Prime Minister would have over 90% of his personal assets invested in the United States rather than in Canada. This gives Trump another handle on Carney, if he chooses to use it.

On her Substack, Melanie in Saskatchewan envisions how this may play out:

AI image from Melanie in Saskatchewan

So let me make a prediction: Any day now, your government will solemnly discover the importance of proper forest management.

There could be a task force, or a federal strategy, a minister standing solemnly in front of some trees. Perhaps an announcement that Ottawa has been “working around the clock” on a comprehensive plan that, by a miraculous coincidence, became urgent only after the American president threatened tariffs and a U.S. senator started talking about sanctions.

Should that happen, Canadians will be entitled to ask a very simple question: What finally changed Ottawa’s mind?

Was it concern for Canadians living through evacuations, destroyed communities and weeks of choking smoke? Was it the economic damage caused by recurring fire seasons? Was it pleas from provinces, northern communities and forestry workers for better prevention, mitigation and emergency capacity?

Or did the urgency arrive only when Washington threatened to slap another charge on Canadian exports and Senators possibly sanctioning Canadian officials like yourself? You personally have A LOT at stake if you are sanctioned since the majority of your wealth investment portfolio is in America.

The timing on this matters a great deal. It matters whenever a government suddenly treats a long-standing domestic problem like a national emergency only after somebody powerful outside the country attaches a financial consequence to it.

Trump has accused Canada of “wilful negligence” in maintaining its forests and says he intends to ask you what Canada plans to do. Your emergency management minister responded that governments have invested billions in fire prevention and forest sustainability since 2020. That defence deserves to be examined very closely and very carefully, because Canadians can reasonably ask what those billions purchased, where they went and why so many communities remain frighteningly vulnerable. To say it plainly … Canadians simply do not see any value for the dollars spent.

You announced spending of $317 million to lease 10 water bombers and heavy helicopters for rapid deployment to provinces because the wait time for them to be built is too long. So, here’s a fun little arithmetic exercise for Ottawa: water bombers are built right here in Canada — jobs, sovereignty, the whole patriotic package you’ve been selling — yet the federal shopping list remains stubbornly empty.

With $317 million, you could buy three heavy scoopers and have pocket change left for spotter planes or a helicopter, or — and this is where it gets embarrassing — you could roll out 45 to 55 single-engine Fire Boss aircraft, scattering an actual national fleet across every province that needs one. But apparently the government prefers its firefighting budgets theoretical. It is here that I will remind you, Fort Mac, Jasper and Lytton should have already provoked this response to act years ago.

The United States is hardly in a position to lecture anyone without hypocrisy. It is enduring its own brutal wildfire season, and fires do not stop at customs booths to declare their country of origin. Climate, drought, lightning, forestry practices and emergency capacity all play a role. There is plenty of responsibility, contradiction and political theatre to go around here. America has somehow managed to turn airborne smoke into an international trade dispute, because apparently even oxygen now requires a customs declaration. But that doesn’t absolve Ottawa. Again … Fort Mac. Jasper. Lytton. The warnings were already there. The time to act was then, but Ottawa chose navel gazing instead. In my books, that means today’s consequences lie with the governing Liberals.

Markets reject Carney’s official carbon price, so Canadians have to pay more

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

Canada is one of the last remaining bastions of Net Zero zealotry … in fact, Prime Minister Mark Carney may be the only national leader trying to turn back the tide of economic reality over this:

AI image posted by L. Wayne Mathison on X.

Mark Carney wrote a book called Value(s) lecturing the world about fairness, responsibility, sustainability and humility. His real governing value appears to be this: when markets reject his climate scheme, force Canadians to rescue it.

Carney now admits the official carbon price is supposedly above $100 while actual credits have traded near $20. Any honest banker would recognize the message. The market does not believe these credits are worth the imaginary price politicians assigned to them.

Carney’s response is classic central-planner arrogance. He will not reconsider the product. He will rig the price, tighten the rules, compel companies to buy it and call the resulting coercion “investment certainty”.

He praised carbon pricing in Value(s) as one of the most important and effective ways to reduce emissions. Then the consumer carbon tax became politically poisonous, so he scrapped it. The industrial version survives because its costs are easier to bury inside electricity, transportation, groceries, construction materials, wages and lost investment.

Carney also boasts that Canada continues sending climate-finance money abroad while other G7 governments pull back. Canadian families are struggling with food, housing and energy, yet our philosopher-banker remains determined to finance his international reputation with their money.

His book preached humility. His government practises price fixing.

His book preached responsibility. His government transfers the risk to taxpayers.

His book preached fairness. His policies protect the climate-finance class while ordinary Canadians absorb the costs.

Carney spent years wrapping political ideology in the language of banking. Now the numbers are exposing the sales pitch. When a theoretical $100 asset trades for $20, the market has delivered its verdict. Ottawa can falsify the price, but it cannot manufacture genuine value.

Value(s) may be hundreds of pages long. Carney’s philosophy fits into one sentence:

When reality refuses to validate the climate fantasy, force Canadians to pay until it does.

July 19, 2026

The rise of the populist right in Australia

Filed under: Australia, Britain, Economics, Media, Politics, USA — Tags: , , — Nicholas @ 05:00

Celina outlines the conditions that allow populist movements to displace traditional centre-right parties as Australia’s One Nation under Pauline Hanson is in the process of displacing the Liberals:

Everyone has an opinion about why One Nation is surging. Most people argue it’s immigration. Others say it’s the cost of living, housing, or just a general distrust of politicians. And obviously all of those things are factors.

But of course, all of those explanations are just opinions, and more importantly, they don’t really explain why this is happening now.

One Nation isn’t the first party of its type to emerge, in fact, Australia is actually pretty late to this trend. We’ve already watched similar parties rise in Britain, the United States, Germany, France, Italy, the Netherlands, Sweden and across much of Western Europe.

[…]

So if immigration alone explains One Nation’s rise, why didn’t One Nation explode ten years ago?

The answer, according to a growing body of political science, isn’t simply that voters changed. It’s that the centre-right stopped functioning the way it used to. For decades, parties like the Liberal Party acted as gatekeepers. They bundled together free-market economics, cultural conservatism and a vague patriotism into one broad electoral coalition. But the Liberal Party has fractured rapidly and everything has changed.

This is exactly what happened with Trump and the Republican Party, with Brexit and then Reform UK in Britain, and with similar populist parties across Europe. The rise of the populist right isn’t just about people becoming more conservative, it’s about the collapse of the old centre-right policy formula. Australia is now going through exactly the same process.

As a comparison, Reform UK established itself as the dominant force on the British right rivaling the Tories whilst they were already crumbling, which allowed those voters to become apart of Reforms broader support base. Analyses of the 2024 election in the UK found that around 80% of Reform voters had voted Conservative in 2019. The same thing now seems to be happening with One Nation. Some of that growth comes from former Liberal voters. Some comes from people who previously supported smaller right-wing parties and have now consolidated behind One Nation because they think it’s the only party capable of replacing the Liberals. Some comes from Labor. But overwhelmingly, this is a story about the collapse of the centre-right rather than some sudden ideological revolution among Australians.

So yes, immigration matters. Cost of living matters. Housing matters. But those things explain why voters became dissatisfied. They don’t explain why millions of those voters suddenly stopped expressing that dissatisfaction through the Liberal Party and started expressing it through One Nation instead. To answer that question, you need political science and when you look at the research, the rise of One Nation starts looking like Australia’s version of a much bigger political realignment that’s already transformed much of the Western world.

So, populist insurgencies are underway in Australia, Britain, France, Germany, Italy, and the Netherlands … so why not in Canada, where all of the conditions are at least as pro-populism as any of the others? My answer is propaganda. Most Canadians still get their daily news and opinions from traditional sources — almost all of whom are now directly on the government’s payroll. Most Canadians are as insulated from dissident voices as Germans were in the 1930s … and Canadians still trust their government more than most other westerners.

QotD: Obfuscated exchange

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

We have discussed potlatch a lot so far but obfuscated exchange is one of my two major research interests, and it’s what first got me really interested in Ashley’s work.1 At some level the fundamental nature of the interaction is that rich men are paying for models to hang out with them, yet that rarely happens directly. Instead there are multiple ways in which the nature of this transaction is obfuscated. And note, it’s not because anything about bottle service is illegal, because it ain’t. Unlike prostitution, there are no laws against paying for arm candy, it’s just that it’s seen as extremely tacky and kind of a desperate move.

At this point, it’s worth digressing from Ashley’s work and laying out my own theory of obfuscated exchange before showing how Ashley applies the model to her data.2 So the starting point is to recognize that there are certain goods and services that may be more or less OK if you get them for free, but are gross, shameful, and/or illegal if you pay for them. For instance, payment transforms casual sex into prostitution and constituent service into bribery.

Now suppose you’re someone who has money, and who really wants to have no-strings sex with someone who isn’t really attracted to you, or to get a government service that the legislator or bureaucrat thinks you’re not entitled to. One way to handle this is you just do it anyway and break the taboo: you hire the prostitute or bribe the public official. Another way is you don’t do it: you think something like “I would gladly pay $200 for sex or $10,000 to get this zoning exemption, but that would be wrong and so I’m not doing it”. But what I find really interesting is when you find a way to have your cake and eat it too by buying the non-market good while obfuscating that you paid for it, hence obfuscated exchange.

In my 2014 Sociological Theory paper, I outline three forms of obfuscation:

  • Gift exchange — I give you a gift and at some point in the future you give me a gift. There is a continuous tension between whether the gifts are traded for each other or are both expressions of a relationship.3 This ambiguity effectively allows gift exchange to trade goods that it would be immoral to directly exchange for one another. The classic example is that the difference between a sugar baby/sugar daddy relationship and a prostitute/john relationship is gift exchange vs cash on the barrelhead.
  • Bundling — You and I engage in some type of innocuous commercial transaction, but we also have a relationship involving things that ought not to be sold. The classic example is a boss having sex with his worker, or a lawyer with his client.4 Is this just that two people with a business relationship also find one another irresistible, or is it quid pro quo sexual harassment? Interpreted as bundling, it is the latter, and there are some cases where it’s obviously little more than money laundering (as with the Congressman who went to prison for selling his house to a defense contractor, who immediately resold the house at a substantial loss).
  • Brokerage — I hire someone to help me acquire something, and they pay the person I need it from, who then gives it to me. A majority of settlements under the Foreign Corrupt Practices Act look like this: AmericaCo is doing business in Corruptistan and hires LocalFixer who in turn just bribes PublicOfficial.

After that first paper, I introduced a fourth type, “pawning”, which is when an explicit debt is forgiven in exchange for a non-market good. This is how the mob gets gambling addicts to serve as co-conspirators in embezzlement and robbery. However Ashley didn’t find any pawning to speak of in her ethnography.

So back to Ashley, one of the things I love about her ethnography is you see three different obfuscation structures all at once. Again, at a fundamental level, what is happening is rich guys are paying for models to hang out with them, but not explicitly. Let’s start with the rich guys and work towards the models. What it says on the $30,000 credit card receipt is “champagne” or “vodka”. In theory the arm candy is incidental, even though that’s why the guys aren’t spending much less at BevMo and getting drunk in their hotel room. So the arm candy is bundled with the alcohol.

We might then think, OK, so the club provides the models, and in a sense they do, but the club doesn’t do this directly. Instead it pays a commission to night club promoters who arrange that the models be there in exchange for a commission on the table’s check. So the promoters act as brokers between the club and the models.

Now we might be thinking, OK, so the promoter gets a cut of the check and out of that he pays the models. Nope. As a rule promoters don’t pay models, and when they do it is widely seen as a death spiral desperation move. Rather, promoters recruit models through gift exchange. For reasons discussed in Ashley’s first book, models are constantly short on cash, and promoters will hang out in fashion districts looking for models who they can offer favors to and befriend. For instance, she talks about promoters who will drive SUVs around Manhattan offering models rides. A common pattern is to meet a group of models, identify the most popular girl in the clique, seduce her, and then get her to constantly mobilize her girlfriends to help you get paid by staying out until 4am, even though this means that they are so tired and hungover the next day that they miss their own auditions and photoshoots.

There is more than a little resemblance between the promoters and pimps. Aside from the vast moral difference that these guys don’t commit felonies and aren’t hyper-misogynists, they all come across as like Andrew Tate with their peacocking, their hustle mindsets, and the basic fact that their livelihood is based on leveraging their own charm into mobilizing pretty girls into making money for them from other men.

John Psmith and Gabriel Rossman, “GUEST JOINT REVIEW: Very Important People, by Ashley Mears”, Mr. and Mrs. Psmith’s Bookshelf, 2024-03-04.

  1. My other major research interest is diffusion, or how ideas and behaviors spread. This is the subject of my 2012 pop music radio book and my 2021 PNAS. The upshot of my take on diffusion is that you will be badly misled if you only pay attention to social contagion processes like word-of-mouth as it’s critical to consider the constant hazard (eg, advertising, government mandates, or the legitimacy that comes with a mature product category).

    2. Rossman, Gabriel. 2012. Climbing the Charts. Princeton, NJ: Princeton University Press. https://www.google.com/books/edition/Climbing_the_Charts/E_37GZumy50C?hl=en

    Rossman, Gabriel, and Jacob C. Fisher. 2021. “Network Hubs Cease to Be Influential in the Presence of Low Levels of Advertising”. Proceedings of the National Academy of Sciences 118(7). https://www.pnas.org/doi/10.1073/pnas.2013391118

  2. Rossman, Gabriel. 2014. “Obfuscatory Relational Work and Disreputable Exchange”. Sociological Theory 32(1):43–63. https://www.chapman.edu/research/institutes-and-centers/economic-science-institute/_files/ifree-papers-and-photos/obfuscatory-relational-work-and-disreputable-exchange.pdf

    3. Rossman, Gabriel, Michael Munger, Alan Fiske, and Alex Tabarrok. 2016. “The Exchanges We Hide”. Cato Unbound. https://www.cato-unbound.org/issues/june-2016/exchanges-we-hide/

    Schilke, Oliver, and Gabriel Rossman. 2018. “It’s Only Wrong If It’s Transactional: Moral Perceptions of Obfuscated Exchange”. American Sociological Review 83:1079–1107. https://www.oliverschilke.com/fileadmin/pdf/Schilke__Rossman._It_s_Only_Wrong_If_It_s_Transactional_-_Moral_Perceptions_of_Obfuscated_Exchange.pdf

    Schilke, Oliver, and Gabriel Rossman. forthcoming. “Honor among crooks: the role of trust in obfuscated disreputable exchange”. American Sociological Review https://osf.io/6b793/

  3. Bourdieu, Pierre. 2000. Pascalian Meditations. Stanford, CA: Stanford University Press. especially “Twofold Truth of the Gift”
  4. Zelizer, Viviana A. 2005. The Purchase of Intimacy. Princeton, NJ: Princeton University Press.

July 18, 2026

Jevons and Baumol, and why they matter now

Filed under: Bureaucracy, Business, Economics, History, Technology — Tags: , , , — Nicholas @ 03:00

On the social media site formerly known as Twitter, Matt Ridley talks about the ideas of William Stanley Jevons and William Jack Baumol, whose ideas have become far more important over the last few decades:

English mystery novelist Agatha Christie (1890-1976) at Schiphol Airport in Amsterdam on 17 September, 1964.
Photo by Joop van Bilsen for Anefo via Wikimedia Commons.

Agatha Christie once remarked that she had never expected to grow rich enough to own a car or poor enough not to have servants.

The reason this strikes us as bizarre today boils down to two names that you hear invoked a lot in the tech industry: Jevons and Baumol. One is shorthand for the expansion of products or professions with rising efficiency, the other for the shrinkage of products or professions with stagnant efficiency.

There’s a pleasing chronological symmetry between these twin ideas: William Stanley Jevons coined the Jevons paradox in 1865; William Jack Baumol described Baumol’s cost disease exactly a century later in 1965.

… For every industry that experiences efficiency gains, there’s another that does not. And this latter industry inevitably becomes less affordable. Baumol’s first example was string quartets: violinists are no more productive but you have to pay them more to prevent them running off to become software engineers. The productive industries drive up the labour costs in the rest of the economy.

Marc Andreessen jokes that if a hole appears in the wall of your house in California these days it is probably cheaper to glue a flat-screen television over it than hire a builder to repair it: a Jevons-deflated cost beats a Baumol-inflated one.

The big question of our age is can AI drag Baumol-shaded industries back into the sunlight of Jevons? Can it make things like healthcare, education, or government switch from rising costs to falling costs?

I fear not in the case of government because of a bureaucratic version of the Jevons and Baumol effects. As Cyril Northcote Parkinson put it in an article in the Economist in 1955: “Politicians and taxpayers have assumed (with occasional phases of doubt) that a rising total in the number of civil servants must reflect a growing volume of work to be done. Cynics, in questioning this belief, have imagined that the multiplication of officials must have left some of them idle or all of them able to work for shorter hours. But this is a matter in which faith and doubt seem equally misplaced.”

Since 1997, the British public sector has seen zero increase in productivity. That is to say, the average civil servant generates about the same output today as he did three decades ago.

Think about this for a second. Thirty years ago fax machines were high-tech, the internet was in its infancy, emails were new, Wi-Fi was scarce, mobile phones were voice-only. How is it remotely possible to be no more productive today than then?

We know the answer. Each email is now copied to a dozen people, each report is pasted and copied till it is twice as long, each Zoom call has five times as many attendees, each mobile call is followed up by three times as many WhatsApp messages – and each day at the desk is interrupted by a training session on transgender anticolonial sustainability. That’s a sort of Jevons-Baumol effect: a Jevol?

July 17, 2026

Why solar power is not the answer for Britain

Filed under: Britain, Economics, Environment, Politics — Tags: , , — Nicholas @ 03:00

On the social media site formerly known as Twitter, Sama Hoole looks at a recent World Bank report that shows very clearly why solar power should not even be on the power options list for Britain:

The World Bank ranked every country on earth for practical solar potential.

Britain came second from bottom. Not second from bottom in Europe. On the planet. Out of everywhere they measured, the only place with worse conditions for a solar panel is Ireland. Norway is above us. Norway, where the sun clocks off entirely for part of the year, is a better bet than Lincolnshire.

The reasons are not a mystery. We sit at 53 degrees north, the same line as Edmonton, Alberta. The sun in December gets about as high as a first-floor window and then thinks better of it. And there’s the cloud, which is not a detail, it is the national personality. A square metre of London gets 0.52 kilowatt hours of sunlight a day in December and 4.74 in July, so the panel does nine times less work in the month your heating is on than in the month it isn’t. Across the whole of 2024, British solar ran at 9.5% of what it’s rated at. The other 90.5% is a photograph of a power station.

Now the other column.

The ground we’re bolting it to is Trent valley silt and Lincolnshire fen. Some of it took three hundred years to drain. It grows wheat at yields that most of the planet cannot get near, in a climate so reliably damp that grass grows here without anyone asking it to, which is the entire reason this island has cattle and cheese and a butcher.

So we are, measurably, one of the worst places on earth for sunlight and one of the best on earth for food.

And we’ve had a good long look at both of those numbers and gone with sunlight.

Somewhere in Namibia, which the same report ranked first, there is a patch of absolutely nothing, in full sun, wondering what it did wrong.

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