Quotulatiousness

August 15, 2026

Debunking common Supply Management beliefs

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

On his Substack, Dr. Sylvain Charlebois debunks ten myths about Canada’s supply management cartel that interfere with Canadians’ ability to engage with the idea of dismantling the government’s favourite oligopoly:

Suddenly, everyone — and their grandmother — seems to be an expert on supply management.

That newfound interest is healthy. Canadians are finally examining the benefits, costs and contradictions of a complicated system affecting roughly one-quarter of the country’s agricultural economy.

A generation ago, few economists openly criticized supply management. Those who did faced fierce attacks, while the dairy lobby deployed a nationwide marketing budget approaching $200 million annually. Remember the Doug Gilmour milk advertisements? Today, the “Milk” logo appears on Toronto Maple Leafs jerseys through a multimillion-dollar sponsorship.

For years, criticizing supply management was almost politically taboo. Social media has changed that. Consumers can now see milk being dumped, compare Canadian prices with those abroad and question why Ottawa repeatedly compensates a protected industry.

Dairy farmers are not the problem. They operate rationally within rules created by governments and administered by marketing boards. But those rules should not be immune from scrutiny.

Here are 10 myths Canadians should stop believing.

1. Dairy farmers are poor […]

2. Supply management is saving the family farm […]

3. Canadian dairy farmers receive no subsidies […]

4. Trade agreements make every dairy farmer lose money […]

5. Ending supply management would automatically lower prices […]

6. Farmers alone pay for dumped milk […]

7. Milk dumping is unavoidable […]

8. Canada has fully respected CUSMA […]

9. Supply management guarantees food security […]

10. Reform means abolishing the system overnight […]

Money isn’t an invention of the state

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

The invention of money has happened many, many times in many different societies. It’s an essential element to moving beyond subsistence and crude barter, because having a stable medium of exchange allows far more sophisticated economic activities. It addressed the real needs of people and it worked:

The state didn’t invent money. Carl Menger destroyed that myth in 1871 with his regression theorem, and statists have been seething ever since.

Picture yourself in a primitive barter economy. You’re a blacksmith who needs grain, but the farmer doesn’t want your horseshoes. He wants pottery. The potter wants leather goods. The leather worker wants meat. You face what economists call the double coincidence of wants problem: finding someone who both has what you want and wants what you have. Barter works for simple trades, but complex economic coordination becomes impossible.

Smart traders notice that certain goods get accepted more readily than others. Cattle, salt, shells, precious metals. These commodities share specific properties: durability, divisibility, portability, recognizability. Over generations, market participants gravitate toward the most marketable goods as media of exchange. No central authority decrees this. No committee meets to decide monetary policy. Individual actors pursuing their own interests spontaneously converge on the same solution.

Money emerges from voluntary exchange, not government decree. Every unit of money traces its value back through an unbroken chain of exchanges to its original commodity value. Gold became money because people valued it first as jewelry, ornamentation, and industrial uses. Its monetary premium built on top of that foundation. When governments later monopolized monetary systems, they parasitically appropriated this organic market institution.

You can observe this process today in Venezuela, Zimbabwe, Lebanon. When state currencies collapse, people don’t wait for permission to adopt alternatives. They trade cigarettes, rice, Bitcoin. Markets route around monetary failure because human cooperation demands a medium of exchange.

QotD: “The progressive is a walking paradox”

Filed under: Britain, Cancon, Economics, Europe, Politics, Quotations, USA — Tags: , , , , — Nicholas @ 01:00

In economics, we cut through noise with a concept called “Revealed Preference”.

If I loudly claim to love vanilla ice cream, yet every time I return from the Mr Whippy van I’m holding a choc-ice, my revealed preference is evidently for chocolate — not vanilla.

Thus the truth of a person’s preferences is revealed through their actual choices and behaviour, not by what they claim to prefer.

It’s unfortunate we can’t simply listen to their words, but they are so oriented toward the external, the aesthetic, and the performative (“Theater Kid Progressivism”) that we must instead look at their proximal behaviours — where they actually choose to live and raise their families, for example, to extrapolate backwards their true feelings on mass migration and its consequences.

This is the lens through which we should try to understand our Progressive class.

The bitterest irony, the irony of ironies, is this: progressives, especially those who voted for it, self-evidently do not feel at home in the societies they helped create.

If they were genuine believers, they would live contentedly amidst their new friends.

Instead, they scuttle off into the countryside, the leafy suburbs, or gated enclaves, abandoning the very demographic transformation they imposed on others.

It is often said that if liberals didn’t have double standards they wouldn’t have any at all, but while this is very funny (and true), there’s more to it.

It reveals a profound non-confluence between their stated attitudes and their actual behaviours, indicative of extreme cognitive distortion.

They protest performatively that open borders and rapid demographic change are a universal good, even moral imperatives and (admittedly less often nowadays) sources of strength.

Yet when it comes to their most intimate revealed preference — where they opt to live and raise their families — they consistently prioritise homogeneity, good schools, and cultural familiarity.

They lobby and vote without end for policies that maximise immigration into lower- and middle class neighbourhoods, then abandon those very communities for pastures anew, safely insulated by postcodes and house prices.

Their revealed preference is that do not want to live in the Canada (or Britain, or America, or Europe) they are busily helping to construct.

They enjoy the vibes, the moral status, the Instagram aesthetics, while quietly falling back to the leafy, high-trust environments their grandparents took for granted.

Progressives love to speak of taboos (indeed if there is a pastime more alluring and intoxicating to the progressive than “breaking taboos”, I am yet to come across it, but I digress) yet is the greatest taboo of all right in front of us after all, carrying a basket of organic fruit and veg from Waitrose?

To interrupt the Progressive in the midst of his communal dream state, to turn our collective eye away from the brave new world they are building for us and to instead look inwards, to look the Liberal cuckoo directly in the eye and put words to the disparity between their words and their actions …

The subject of lawful and legal deportations is increasingly mainstream, yet what of urban renewal and rewilding by means of progressive importations?

The Progressive is a walking paradox, he is both the centre of attention and the ghost at the feast all at once.

Æthelstan, The social media site formerly known as Twitter, 2026-05-14.

August 14, 2026

Ontario premier doubles-down on provoking Trump. What could go wrong?

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

At some point you have to ask yourself … if Canada was being run by people who wanted to destroy it, what would they have done differently in the trade negotiations with Donald Trump’s government?

Is Doug Ford the dumbest Canadian?

I know, it is a deep bench. But the tubby premier is extraordinary. You have to appreciate talent.

There are, apparently, two schools of Canadian thought on the trade fracas with the US. “Punch the bully in the nose.” and “For God’s sake get a deal already.” As I prefer a Canada with an economy, I pick door number 2.

Our Chief Trade Negotiator Janice Charette, is more combative. If Trump brings in his retaliatory tariffs in a week she’s packing up and going home. That’ll learn him.

The idle threat school of negotiation enjoys wide currency in both Ottawa and Queens Park. Meanwhile, Canadian businesses are looking [longingly] at the low tax, low reg world inside the Trump tariff wall.

I’m having a beer with a buddy who is in “founder’s mode” on a startup and, frankly, he’d be crazy not to be looking at domiciling his business in the States. Sure, have a Canadian sub, but why put your main business in Canada?

And decisions like this are being made all over Canada and, indeed, the world. People might hate Trump and all his works but the business attractions of Red States make Ontario and BC look pathetic.

You would think that after Ford’s Super Bowl ad fiasco he would have the wit to remain silent as his province’s fate is being negotiated. You know, avoid more damage. But no, the tubby premier likes to “talk tough”.

I actually feel a bit sorry for Carney having to deal with the fallout of this idiot’s remarks. Unless, of course, like the Super Bowl ads, Carney actually encouraged these remarks … In which case the competition for dumbest guy in Canada has tightened up.

August 13, 2026

QotD: Marx was right about “class consciousness”

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

Marx thought the Proletariat would develop class consciousness — that is, solidarity based on their mutual exploitation by the “capitalists” and “bourgeoisie” — and from that all else would flow. Lenin modified that, arguing that The Proletariat would never achieve class consciousness without a “Vanguard Party”. That’s why it’s Marxism-Leninism to this day. Lenin was closer to correct, but with this crucial difference: Instead of leading the Laboring Masses to Socialism, the Vanguard Party has decided “hey fuck the Laboring Masses, we’re getting ours“.

Marx called religion “the opiate of the masses” for a reason — by dulling their pain, it prevented them from realizing their true class position, thus achieving class consciousness, thus sparking The Revolution. What religion really does, of course, is satisfy a deep yearning in the human soul. There is more to life than shit, shoes, and bread. Karl Marx didn’t want to hear that, because his religious yearning was satisfied by his substitute god, Dialectical Materialism, and the half-assed (but very real) ceremonial it produced. Again, there’s a reason every Leftwinger practically from the French Revolution looked like [this]

I don’t know how you say “fake and gay” in Russian, but every single thing in that photograph is fake and gay. A pose. An affectation. And as with their look, so with their behavior. Leftwingers are, and always have been, famously boorish. They have no idea how longshoremen actually act, but they sure think they know, and so that’s how they act — like the worst caricature of a crude, illiterate, drunken longshoreman.

(I don’t know any longshoremen either, but I do know some folks who make a living from the sweat of their brows, and they’d turn Lenin’s head around for him if he came to their neighborhood and started acting like that. The Laboring Masses might indeed be “rude mechanicals” in Shakespeare’s sense — meaning, without too much formal education — but they’re surely not rude in the behavioral sense, because in their world, running your mouth gets you punched in it).

Dressing and acting like that is, quite literally, a religious ceremony for them … and ceremonial can only take place in a designated space, a liminal space that the community respects. A priest can indeed hold a mass on a street corner, but only if the passersby have enough residual respect for the institution of religion not to beat and rob the worshipers while their backs are turned.

The intelligentsia never understood that consciously. They sure as hell understood it unconsciously, though, which is why they immediately self-segregated — getting “sent down to the countryside, to reconnect with the laboring masses” was one of the worst punishments Mao’s boys could dish out to one of their mandarins, and again, there’s a reason for that. The upshot is, the intelligentsia, the Apparat, the Cloud People, whatever you want to call them, are the only ones who developed “class consciousness” in the Marxist-Leninist revolutionary sense …

… and their class consciousness is entirely oppositional. They are not us. That’s their sole criterion for virtue. Whatever we like, they dislike. Whatever we do, they must not do; and whatever we eschew, they must embrace.

Severian, “On Losing the Cold War”, Founding Questions, 2022-07-02.

August 12, 2026

“It might be Carney’s unconditional surrender to Trump, but it’d be worse under Poilievre”

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

I exaggerate a tad in my choice of headline, but Canada’s bought-and-paid-for relic media will always choose to present a spectacular Carney faceplant as being somehow better than any theoretical action by Poilievre. If Carney’s going to surrender to the Yanks unconditionally, it would obviously be far worse if the Leader of the Opposition had been PM instead. eLbOwS uP, everyone!:

The new Canadian trade flag – The Line

Well, it looks like our prime minister is losing his nerve, eh?

Reports are now leaking fast and furious that Trump’s surprise August 19 tariffs have worked to break our strategic patience. Canada is working to secure some kind of interim deal, and if the leaks are to be believed, we’re going to give the Americans essentially everything they want while they maintain most tariffs on us. It appears to be a shit deal for us, and one that puts us directly in the glide path toward vassal state.

Worse — and, to be frank, I do think this is the worst part of all of this — it’s the exact opposite of what we elected Mark Carney to do. When facing economic and political aggression from a neighbour and once-ally like the United States, surrender vs. resistance is a valid conversation to have. Given our circumstances, one could make a legitimate case for either choice. However, as a people, we did have that conversation, in the spring of 2025. We did make that choice. We chose resistance. We chose sacrifice. That was the premise of the last election, and that was the value proposition Mark Carney made for himself.

Instead, what we’ve actually done in the past year-and-a-half is a counter-productive middle path: yes, we’ve made moves toward strengthening our economy internally, and this is all to the good. But when it comes to measures that require a willingness to stand up to real power, all we’ve offered has been performative resistance in the form of angry social media sputtering and grandiose global speeches, followed in private by concession after concession. This has left us with the worst of both options. We’ve demonstrated that we lack the collective will to sustain real economic sacrifice. And we’ve just annoyed the Americans, which has clearly only increased their desire to make an example of us.

What we absolutely did not vote for was the prediction offered by Ian Bremmer of the Eurasia Group, a political risk analysis firm with long ties to Carney and the Liberals. Last year, Bremmer wrote: “Canadian leaders have a political incentive to put up a bigger fight because Trump’s threats toward Canada’s economy and sovereignty have sharply inflamed nationalist sentiment north of the border in the run-up to the April 28 elections. However, I expect Ottawa will quietly fold shortly after the vote to ensure that ongoing relations with the U.S. remain functional.”

Congratulations, Canada. You got punk’d.

In honesty, I can’t think of a worse strategy for achieving a remotely fair trade deal with the United States than the one Carney chose to follow. If he’d been dealing with George W. Bush, this plan might have worked, but I think that Bush was the last US president who would put up with the juvenile performative “strategy” Canada used. Barack Obama would have easily turned the tables, as the relic media loved (and still love) Obama more than they love maple syrup and oxygen. Even Joe Biden’s handlers could have highlighted just how J.V. Canada was acting. But for some reason, the Liberals decided that constantly pissing in Donald Trump’s cornflakes was a winning strategy. And now we’re looking at a maple-flavoured Appomattox Court House meeting … and Trump has no interest — quite the opposite, in fact — in being as generous to a defeated foe as Ulysses S. Grant was to Robert E. Lee.

“Hitler’s socialism wasn’t just an internal economic policy – it was the cause of the war”

Filed under: Economics, Germany, Government, History, Military, Russia, WW2 — Tags: , , , , , , — Nicholas @ 03:00

On the social media site formerly known as Twitter, Krzysztof Szczawinski explains why socialism — of the left (the Soviet Union) and the right (Nazi Germany) — was the economic driver that pushed Europe into war in 1939. German socialism (in one state) could only continue to grow by annexing resources and manufacturing capabilities from neighbouring states, and by August 1939 it was Poland’s turn:

Socialism was at the origin of the war. Not as a coincidence. As a necessity. The socialist economic model generates contradictions it cannot resolve internally – the calculation problem, the misallocation, the stagnation, the mounting failure. War is the exit. It provides the external enemy that explains the internal failure. It justifies the total mobilization the system always wanted. It consumes the surplus population the economy cannot employ. It redirects the resentment outward.

Does this remind you of anything?

The evidence is not subtle. The NSDAP program of 1920 reads like a standard socialist manifesto. The economic reality confirmed it – price controls, industrial planning, state allocation of raw materials, entrepreneurs reduced to government functionaries. Private property in name only. Mises called it Zwangswirtschaft – coercive economy. Hayek dedicated a chapter of The Road to Serfdom to the socialist roots of Nazism. Both writing from observation, not retrospect.

After 1945 the Soviet victors imposed their version and attached the capitalist label to every rival. Western textbooks followed. The lie became the curriculum.

The real divide has never been left versus right. It is collective control versus individual freedom. Once you place National Socialism correctly within the family of collectivisms, the political spectrum becomes legible – and the war becomes explicable.

When the system fails — and it always fails — it needs an enemy. The bigger the failure, the bigger the enemy required.

Imagine being Poland. Squeezed between two socialist systems, both searching for their enemy.

We were it.

August 10, 2026

Gresham’s Law and the Thirty Years’ War

Filed under: Economics, Europe, History, Military — Tags: , , , , — Nicholas @ 03:00

For one of the most destructive wars in European history (until the 20th century), most people know little or nothing about the Thirty Years’ War (which was a name applied later to a series of overlapping and interlocking conflicts that caused nearly 10 million deaths between 1618 and 1648). One of the many causes wasn’t so much religious or military, it was financial:

“Clipping coins in a Kipper mint”
Wikimedia Commons.

The Kipper und Wipperzeit of 1621 to 1623 [Wiki] was a direct consequence of princes and mints doing exactly what governments always do when they need money and cannot borrow it: they debased the currency.

The Thirty Years’ War started in 1618, and the Holy Roman Empire’s princes immediately faced a problem. War is expensive. Silver is finite. So the mints across the Empire began clipping, sweating, and debasing the small subsidiary coins that ordinary people used for daily transactions, flooding markets with copper-heavy pfennigs and kreutzers while hoarding the full-weight silver.

If you want to understand Gresham’s Law in its most brutal form, watch this play out. Bad money drives out good. People saved the honest silver and spent the garbage. Prices in nominal terms exploded. Contemporary accounts from Frankfurt and Augsburg document grain prices doubling and tripling between 1619 and 1623.

The real villain is the territorial mint system, which gave dozens of competing princes the legal power to set coin standards within their own borders. That fragmented monetary sovereignty created a race to the bottom. Each prince had every incentive to debase slightly more than his neighbor, because the first mover extracted real purchasing power before the market caught on.

This is currency debasement as taxation without legislation. The people who held wages and savings in subsidiary coin absorbed the loss. The princes who controlled the mints captured the seigniorage gain. No vote, no debate, no accountability.

Sound money advocates have been clear about the mechanism: when you hand governments monopoly power over coinage, they spend it. Every single time. The Kipper und Wipperzeit killed trade, wiped out savings across central Europe, and contributed to social instability that fed the war it financed. The policy destroyed the instrument it relied on.

Debasement never solves a fiscal crisis; it transfers it onto the population.

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.

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