Quotulatiousness

September 17, 2022

In the wake of the Russo-Ukrainian war, Europe’s cold winter looms ahead

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

Andrew Sullivan allows his views on the fighting in Ukraine to be a bit more optimistic after Ukrainian gains in the most recent counter-attacks on Russian-held territory around Kharkiv:

Approximate front-line positions just before the Ukrainian counter-attack east of Kharkiv in early September 2022. The MOD appears to have stopped posting these daily map updates sometime in the last month or so (this is the most recent as of Friday afternoon).

As we were going to press last week — I still don’t know a better web-era phrase for that process — Ukraine mounted its long-awaited initiative to break the military stalemate that had set in after Russia’s initial defeat in attempting a full-scale invasion. The Kharkiv advance was far more successful than anyone seems to have expected, including the Ukrainians. You’ve seen the maps of regained territory, but the psychological impact is surely more profound. Russian morale is in the toilet — and if it seems a bit premature to say that Ukraine will soon “win” the war, it’s harder and harder to see how Russia doesn’t lose it. By any measure, this is a wonderful development — made possible by Ukrainian courage and Western arms.

Does this change my gloomy assessment of Putin’s economic war on Europe, which will gain momentum as the winter drags on? Yes and no. Yes, it will help shore up nervous European governments who can now point to Ukraine’s success to justify the coming energy-driven recession. No, it will not make that recession any less intense or destabilizing. It may make it worse, as Putin lashes out.

More to the point, the Kharkiv euphoria will not last forever. September is not next February. Russia still has plenty of ammunition to throw Ukraine’s way (even if it has to scrounge some from North Korea); it is still occupying close to a fifth of the country; still enjoying record oil revenues; has yet to fully mobilize for a war; and still has China and much of the developing world in (very tepid) acquiescence. Putin is very much at bay. But he is not finished.

Europe’s scramble to prevent mass suffering this winter is made up of beefing up reserves (now 84 percent full, ahead of schedule), energy rationing, government pledges to cut gas and electricity use, nationalization of gas companies, and billions in aid to consumers and industry, with some of the money recouped by windfall taxes on energy suppliers. The record recently is cause for optimism:

    The Swedish energy company Vattenfall AB said industrial demand for gas in France, the U.K., the Netherlands, Belgium and Italy is down about 15% annually.

But the use of gas by households is trivial in the summer in Europe compared with the winter — and subsidizing the cost doesn’t help conservation. Russia will now cut off all gas — which could send an economy like Italy’s to contract more than 5 percent in one year. There really is no way out of imminent, deep economic distress across the continent. Even countries with minimal dependence on Russia, like Britain, are locked into an energy market with soaring costs.

That will, in turn, strengthen some of the populist-right parties — see Italy and Sweden. The good news is that the new right in Sweden backs NATO, and Italy’s post-liberal darling, Georgia Meloni, who once stanned Putin, “now calls [him] an anti-Western aggressor and said she would ‘totally’ continue to send offensive arms to Ukraine”. The growing evidence of the Russian army’s war crimes — another mass grave was just discovered in Izyum — makes appeasement ever more morally repellent.

So what will Putin do now? That is the question. His military is incapable of recapturing lost territory anytime soon; he is desperate for allies; and mobilizing the entire country carries huge political risks. It’s striking to me that in a new piece, Aleksandr Dugin, the Russian right’s guru, is both apoplectic about the war’s direction and yet still rules out mass conscription:

    Mobilization is inevitable. War affects everyone and everything, but mobilization does not mean forcibly sending conscripts to the front, this can be avoided, for example, by forming a fully-fledged volunteer movement, with the necessary benefits and state support. We must focus on veterans and special support for the Novorossian warriors.

This is weak sauce — especially given Dugin’s view that the West is bent on “a war of annihilation against us — the third world war”. It’s that scenario that could lead to a real and potentially catastrophic escalation — which may be why the German Chancellor remains leery of sending more tanks to Ukraine. The danger is a desperate Putin doing something, well, desperate.

I have no particular insight into intra-Russian arguments over mobilization, but there seems to be zero point (other than for propaganda … and that cuts both ways) to instituting a “Great Patriotic War”-style mass conscription drive at this point. The Russian army could absolutely be boosted to vast numbers through conscription. Vast numbers of untrained, unwilling young people with little military training and no particular passion to save the Rodina this time, despite constant regime callbacks to desperate struggle against Hitler in 1941-45. Pushing under- or untrained troops into battle against a Ukrainian army equipped with relatively modern western weaponry would be little more than deliberate slaughter and I can’t believe even Putin would be that reckless.

September 15, 2022

The promise of grand “green” plans versus the reality when the plans are implemented

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

Elizabeth Nickson on the contrast between how things like the “Green New Deal” are represented by their proponents and the media and what their actual real-world outcomes are like:

“Forest fire” by Ervins Strauhmanis is licensed under CC BY 2.0 .

Ever wonder what happens to a region once it is “preserved”? Right now, all through the US and Canada, governments are taking giant bites of land, and locking them down under the guidance of the UN’s Agenda 2030, which means a full 30% of the land and waters will be “saved”. If anyone notices, the local media preens and praises itself. Aren’t we all so wonderful and enlightened and caring, the PR says, and the newspapers copy it line-for-line.

No, it’s terrible. It is possibly the very worst thing ever. Set-aside land degrades. There aren’t enough bureaucrats in the world to take care of it. Besides out in the forest or up on the ranges is decidedly not where a civil servant wants to be. As a result none of them know what they have done. It’s a loop, politicians, stupid women and beta males, civil servants engaged in a masturbatory celebration of their goodness and triumph over commerce. From hipster neighborhoods all over North America a song of self-praise rises like smoke into the air.

Except now, right now, I sit in a smoke haze courtesy of the set aside forests in Washington State which are burning. Look, this is simple to think through. In the early 90’s Clinton ratified the spotted owl preservation plan and hundreds of millions of acres of forest were left to themselves, no cutting, no grazing, no firewood collection, no thinning, no fire breaks, no removal of dead trees, especially not beetle-killed trees. In fact, no touch.

What happens when a formerly industrial forest is left to itself? A thousand tiny trees start to grow right up against each other. They grow like carrots that haven’t been thinned. They grow so thick they can’t get light. They draw all the water from the ground, they end up like tinder. Around them brush grows — it too cannot get light or much water so it too is desiccated. It grows up the trees, trying to get at the water in the trees, and acts as a fire ladder

Boom.

Massive canopy fires, which, since they decommissioned the roads into the forest, are very very difficult to either brake or put out.

On every single environmental metric, in every single system, these people destroy the land. What they do is exactly the opposite of what they claim. They take massive amounts of tax money to “save” land and then they destroy the resource. And the towns in the resource area. And the families, and the tax base.

I could go through every environmental goal, and tear it apart. None of them use science that is provable. It can’t be duplicated, its assumptions are wrong, its statistics fiddled. Tens of thousands of papers are used to create these policies, written by the environment movement through its NGOs, funded by rich morons from old families, most of whose ancestors created environmental devastation themselves. I can refute the math and assumptions of EVERY SINGLE ONE OF THEM given a maximum of four hours and one phone call. No one challenges these studies, and these abominations then become law. Law that destroys the water and land.

QotD: Protectionism

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

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

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

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

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

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

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

September 11, 2022

Are we looking at a modern equivalent to the Bronze Age Collapse?

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

If you’re feeling happy and optimistic, Theophilus Chilton has a bucket of cold water to douse you with:

Migrations, invasions and destructions during the end of the Bronze Age (c. 1200 BC), based on public domain information from DEMIS Mapserver.
Map by Alexikoua via Wikimedia Commons.

Regular readers know that I’ve talked about collapse (as well as the implied regeneration that follows it) on here a lot. In nearly all cases, though, I’ve discussed it within a specifically American context – the collapse of the present American system and the potential for one or more post-American successor states arising in place of the present globohomo order. However, we should recognise that collapse is a general phenomenon that affects any and all large nations eventually. Just as America is not a special snowflake who is exempt from the laws of demographic-structural theory, so also is she not the only one subject to them.

Further in this vein, we should recognise that no major nation is isolated from its neighbours. No matter how self-sufficient, sooner or later everybody gets hooked up into trade networks. As trade networks expand, you develop world systems that display increased international interconnectedness and interdependency. From a demographic-structural perspective, the interconnectedness of these global systems acts to “synch up” the secular cycles of the nations involved as “information flows” increase. The upside to this is that when one part of the system prospers, everyone does. The downside, of course, is that when one part collapses, everyone does as well.

There are several historical examples of this kind of interconnected system synching up and then collapsing. Probably one of the most well-known examples would be the Bronze Age collapse which occurred in the Mediterranean world system roughly between 1225-1150 BC. Likely due to several shocks to the system working in tandem (drought, volcanic eruptions, migrations into the Balkans from the north, etc.), a series of invasions of the Sea Peoples spread out across the entire eastern end of the Mediterranean, toppling Mycenaean Greece and the Hittite Empire, and nearly did the same to Egypt. From there, the shocks moved outward throughout the rest of Anatolia and Syro-Palestine and eastward into Mesopotamia, disrupting the entire interconnected trade network. The system was apparently already primed to be toppled by these jolts, however, due to the top-heavy political structures (elite overproduction) and overspecialisation in these empires that contributed to their fragility in the face of system shocks. When the first one fell, the effects spread out like dominoes falling in a row.

There is evidence that this collapse extended beyond the Mediterranean basin and disrupted the civilisation existing in the Nordic Bronze Age around the Baltic Sea. Right around the same time that Bronze Age Mediterranean society was collapsing, serious changes to society in the Baltic basin were also taking place, primarily due to the disruption of trade routes that connected the two regions, with amber flowing south and metals and prestige goods returning north. During this period, the population in the area transitioned from a society organised primarily around scattered villages and farms into one that became more heavily militarised and centred around fortified towns, indicating that there was a change in the region’s elite organisation, or at least a strong modification of it (remember that collapse phases are characterised by struggles between competing elite groups). A large battle that dates to this era has been archaeologically uncovered in the Tollense Valley of northeastern Germany which is thought to have involved over 5000 combatants — a huge number for this area at this time, indicating more centralised state-like organisational capacities than were previously thought to have existed in the region. All in all, the evidence seems to suggest that this culture underwent some type of collapse phase at this time, likely in tandem with that occurring further south.

Other times and places have also seen such world system collapses take place. for instance, when the western Roman Empire was falling in the 3rd-5th centuries AD, the entire Mediterranean basis (again) underwent a systemwide socioeconomic collapse and decentralisation. More recently, the entire Eurasian trade system, from England to China, underwent a synchronised collapse phase in the early 17th century AD that saw revolutions, elite conflict, decentralisation, and social simplification take place across the length of the continent.

The great irony of interconnectedness is that too much of it actually works to reduce resilience within a system. Because an intensively globalised world system entails a lot of specialisation as different parts begin to focus on the production of different commodities needed within the network, this makes each part of the system more dependent upon the others. This works to reduce the resiliency of each of these individual parts, and the greater interconnectedness allows failure in one part to be communicated more widely and rapidly to other parts than might otherwise be the case in less interconnected systems.

September 10, 2022

Magical Monetary Theory (MMT) – You’re soaking in it

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

At the Foundation for Economic Education, Kellen McGovern Jones outlines the rapid rise of MMT as “the answer to everyone’s problems” in the last few years and all the predictable problems it has sown in its wake:

“Inflation & Gold” by Paolo Camera is licensed under CC BY 2.0 .

Modern Monetary Theory (MMT) was the “Mumble Rap” of politics and economics in the late 2010s. The theory was incoherent, unsubstantial, and — before the pandemic, you could not avoid it if you wanted to.

People across the country celebrated MMT. Alexandria Ocasio-Cortez, the Democrat Congresswoman from New York heralded MMT by proclaiming it “absolutely [must be] … a larger part of our conversation [on government spending].” The New York Times and other old-guard news sources authored countless articles raising the profile of MMT, while universities scrambled to hold guest lectures with prominent MMT economists like Dr. L. Randall Wray. Senator Bernie Sanders went as far as to hire MMT economists to his economic advisory team.

The most fundamental principle of MMT is that our government does not have to watch its wallet like everyday Joes. MMT contends that the government can spend as much as it wants on various projects because it can always print more money to pay for its agenda.

Soon after MMT became fashionable in the media, the once dissident economic theory leapt from being the obscure fascination of tweedy professors smoking pipes in universities to the seemingly deliberate policy of the United States government. When the Pandemic Hit, many argued that MMT was the solution to the pandemics problems. Books like The Deficit Myth by Dr. Stephanie Kelton became New York Times bestsellers, and the United States embarked on a massive spending spree without raising taxes or interest rates.

Attempting to stop the spread of Covid, state and federal governments coordinated to shut down nearly every business in the United States. Then, following the model of MMT, the federal government decided to spend, and spend, and spend, to combat the shutdown it had just imposed. Both Republican and Democrat-controlled administrations and congresses enacted trillions of dollars in Covid spending.

It is not hard to see that this spray and pray mentality of shooting bundles of cash into the economy and hoping it does not have any negative consequences was ripe for massive inflation from the beginning. Despite what MMT proponents may want you to believe, there is no way to abolish the laws of supply and demand. When there is a lot of something, it is less valuable. Massively increasing the supply of money in the economy will decrease the value of said money.

MMT economists seemed woefully unaware of this reality prior to the pandemic. Lecturing at Stoney Brook University, Kelton attempted to soothe worries about inflation by explaining that (in the modern economy) the government simply instructs banks to increase the number of dollars in someone’s bank account rather than physically printing the US Dollar and putting it into circulation. Somehow — through means that were never entirely clear — this fact was supposed to make people feel better.

In reality, there is no difference between changing the number in someone’s bank account or printing money. In both cases, the result is the same, the supply of money has increased. Evidence of MMTs inflationary effects are now everywhere.

September 8, 2022

Surprise! Liz Truss can successfully locate Canada on a map!

Filed under: Britain, Cancon, Economics, Environment, Germany — Tags: , , , , , , — Nicholas @ 05:00

In UnHerd, Marshall Auerback details some of the Canadian connections of Britain’s new PM:

British Prime Minister Liz Truss, 1 May 2022.
Official portrait via Wikimedia Commons.

Faced with soaring costs of living, increased collateral damage from the war in Ukraine, and widening national inequality, Liz Truss seemed curiously optimistic in her first speech as Prime Minister. What could possibly be driving such bullishness? Absent any sign of a coherent plan of action, we might find her motivation in an Instagram post from 2018, where Truss cited the time she spent in Canada as a teenager as “the year that changed my outlook on life … #pioneercounty #optimism #maplespirit”.

As profound an impact as that year might have had on Truss’s optimistic psyche, she would do well to look more closely at Canada’s faltering “success story” in recent years. Today, the country is no longer the land of milk and honey (even if it does still produce a fair amount of maple syrup), but suffers many of the same problems as the UK, and a number that are significantly worse: rising inflation, profound income inequality, the challenges posed by climate change, and an increasing host of social problems — not least the mass stabbing spree last weekend in Saskatchewan that left 10 people dead.

However, to the extent that the Trudeau Administration has attempted to remedy some of these problems, there are clear lessons for Truss. Unlike in the UK, many of Canada’s energy problems are largely self-inflicted, a result of a progressive government ignoring its comparatively resource-rich environment, even as its European allies (including the UK) suffer severe consequences of being cut off from Russian gas supplies and the corresponding rise in energy prices.

A few weeks ago, German Chancellor Olaf Scholz visited Canada to secure more gas for his country. This being Canada, the German Chancellor was treated politely, but the underlying plea for Ottawa to increase liquefied natural gas (LNG) production to offset the loss of Russian gas was given short shrift. The Canadian government, one of the biggest producers of natural gas in the world, has misgivings about whether becoming an even bigger producer and exporter would actually be profitable.

Leaving aside the broader debate as to whether the dangers of man-made climate change have been confounded with natural weather and climate variability, natural gas, although a fossil fuel, emits roughly half the amount of carbon dioxide when combusted in a new, efficient natural gas power plant. This would suggest that Canada’s absolutist stance is not only a major geopolitical mistake, but also an economic own goal. The country is foregoing a major growth opportunity, which would both alleviate global inflationary pressures by increasing the supply of natural gas to the global markets, while simultaneously enhancing the prospect for a plethora of new high-paying jobs that would buttress Canada’s declining middle class.

Canada is also home to substantial supplies of copper, nickel, lithium, and cobalt — all of which will be essential to producing the infrastructure required to transition from fossil fuels to greener sources of energy, such as wind and solar. But mining itself remains a “brown” industry, one that creates substantial carbon emissions and environmental degradation. It seems conceivable, then, that the Trudeau government’s green energy purity could soon discourage the increased mining activity needed to facilitate this energy transition.

[…]

Yet in many respects, Canada’s problems are more easily resolved, given that so many are self-inflicted. And not only are there ample natural resources to offset the current energy crisis, but also broad institutional mechanisms to alleviate regional inequalities. Canada, then, cannot provide all the solutions that Truss needs. For all her boosterism, Britain remains a country fatigued by her party’s ongoing political churn and the non-stop travails still emanating from Brexit. If she is to succeed, Truss must begin by removing her rose-tinted view of Canada. The Great White North can certainly serve as an inspiration — but that is all. Canada may have changed Truss’s “outlook on life”. But if Britain is to “ride out the storm”, as she suggested yesterday, an entirely new approach is needed.

Liz Truss replaces Boris Johnson

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

In Spiked, Brendan O’Neill looks at some of the many, many tasks already piled on new British PM Liz Truss’s desk in the wake of Boris and the pandemic:

So it’s prime minister Truss. No big surprise there. What we need next, though, is something that would be very surprising, almost unfathomably so. We need a PM who can buck the crisis of political will and take clear, firm action to save the country from economic collapse and existential malaise. Is that Truss? I’m sceptical, but we shall see.

At first glance, Truss would seem to be singularly unsuited to the task at hand. That task is nothing less than a revolution of will, a rediscovery of the political mettle that has been glaringly absent in Britain these past few decades. We live under a political class that is cautious, bereft of daring; which is hyper short-termist, more concerned with dodging controversy in the present than laying out a plan for the future. The energy crisis is the bastard offspring of this evacuation of vision from politics.

And in Truss we seem to have a leader who is more technocratic than visionary, more given to following the political consensus than to shaking things up. As the Telegraph put it, Truss has been a “dutiful servant”. Despite being something of a Tory party outsider – considered by many insiders to be “a bit odd” – Truss has always “diligently backed the consensus within the party”. She seems overly media-oriented, too. She’s clearly had her gauche edges smoothed by media training and she devotes a lot of energy to “savvy social-media use”. A politician who prefers consensual calm to bold action, and who is more concerned with virtual likes than real-world impact, is not what crisis-ridden Britain needs.

And yet, Truss is far from alone in lacking political audacity, in seeming to prefer the small bureaucratic task of managing public life rather than overhauling it. In this, she’s fairly typical of today’s managerial elites. Also, Truss’s political clarity seemed to improve during the leadership contest. She even became a little more daring in what she said – for instance, by bristling against Net Zero policies. No, this doesn’t prove she’s the leader we need, but it is a reminder that politicians often find themselves, and their cojones, in the heat of battle. Will the pressures of the crisis similarly bring out Truss’s slightly edgier side? We should hope so.

On that crisis, let us be clear: it is incredibly serious. It is the most serious crisis Britain has faced in decades. The political and media elites seem unwilling to acknowledge just how deep and menacing the crisis is. Even their focus on households’ rising energy bills suggests they do not appreciate the enormity of what is unfolding. Yes, millions are worried about how to keep the lights on this winter, but the impact of the energy crisis on business and industry will be graver still. Numerous businesses look set to go under, precipitating economic collapse and mass unemployment. Choosing between heating and eating will be a luxurious memory in the event of the joblessness and poverty that would follow such a calamity in British capitalism.

On a somewhat lighter note, it turns out that Liz Truss isn’t the same person as @LizTruss on Twitter:

September 5, 2022

We’ve somehow moved from “women who want to have it all” to “the servant problem” in less than a generation

Filed under: Economics, Health, USA — Tags: , , , , , — Nicholas @ 05:00

In Ed West’s weekly round-up post, he links to this article by Helen Andrews about the cultural shift for women since the sexual revolution:

People are always more likely to believe a lie if it’s plausible. The lie that women can have it all has as many adherents today as it does because it’s not obvious why it should be a lie. Have a career and a family: why not? There are enough hours in the day. The challenge of refuting the lie that women can have it all — that is, that they can prioritize career and family equally — lies in the fact that the trade-offs that make it impossible are hidden, not obvious, because mathematically it’s not something that should be impossible.

If only employers would do more to accommodate working women, if alternatives could be found to fulfill duties at home that mothers used to do for themselves, like childcare and housework. But the more you start thinking about those accommodations and thinking not just about what it means for any one woman to have it all, but for society to be restructured around women having it all, the more impossible those trade-offs start to seem.

Obviously there are women today in America who are trying to have it all, and many appear to be doing so successfully, at least insofar as they have both demanding careers and children. But look more closely at those households, and almost invariably you’ll see that behind every woman who is balancing work and family, there is an army of low-paid labor, immigrant cleaning ladies, nannies who are paid cash under the table, Door Dash delivery men who deliver the meals that mom never had time to cook. It’s no coincidence that the vast increase in female workforce participation has coincided with the reappearance of something that the more egalitarian America of the early 20th century did not have, and that is a servant class.

America today is more prosperous than it was 70 years ago, and yet it is no longer possible for an ordinary worker to support a middle-class family on a single income. The story of how that happened is bound up into a lie that has become gospel today, which is the lie that women can have it all. Undergirding that lie is a further lie that the Republican Party can have it all. The GOP has very much hitched itself to the idea that it can be the party of stay-at-home moms and girl bosses equally. Again, superficially this seems like it ought to be possible. Live and let live, it’s a free country. But this bargain is unsustainable in practice. We only have to look at the last 30 years to understand why.

The official position of the Republican Party today is that the government’s job is to make it possible for everyone to make the right choice for their family. This rhetoric of maximizing choice requires politicians to talk as if some women will choose to be moms and some will choose to be girl bosses, and it’s really 50/50 which one you end up being. You know, both are equally valid. Who’s to say one is better? But that’s just false, and it’s false according to women’s own preferences. The number of women who say they do not want to have children is very low, in the single digits, around 5% — and that’s just the number who will tell surveys that they predict they won’t have kids when their childbearing years are over. The number of women who actually reach old age and feel satisfied with their life, being just a girl boss with no children to keep them company, is even lower.

Squaring away all this family happiness is and ought to be a higher priority than maximizing women’s career success. It is also a more urgent priority. A woman cannot simply wake up at age 35 and decide she wants to have a family. Everyone says that the sexual revolution was brought about by the advent of the contraceptive pill, which was supposedly ushered in at an amazing new age of a new human experience thanks to science. But it actually changed a lot less than we think. We’ve gotten quite good at not having children when we don’t want to have them, but the science that gave us the pill has not made us very much better at making children arrive when we do.

September 3, 2022

The impact of the first wave of globalization

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

In the latest Age of Invention newsletter, Anton Howes considers the world in terms of trade before and after the transportation revolution which changed long-distance trade from primarily luxury goods to commodities for the mass market:

Long-distance trade has of course been common since ancient times. Archaeologists often find Byzantine-made glassware from the sixth century all the way out in India, China, and even Japan. Or beads from seventh-century Southeast Asia all the way out in Libya, Spain, and even Britain. Yet such long-distance trades often involved goods that were entirely unique to particular areas — gems, spices, indigo, coffee, tea — or were sufficiently valuable to make the high costs of transportation worthwhile, such as expert-made glassware, silks, and muslin cloths with impossibly high thread counts. Long-distance trade may have been ancient but was restricted to luxuries. It did not involve the everyday goods of life.

That all changed, however, when the innovations of the sixteenth to the nineteenth centuries caused transportation costs to dramatically fall. With better sailing ships, canals, and navigational techniques, followed by better roads, railways, refrigeration, steam power, and dynamite (which meant railways could cross mountain ranges, canals could link oceans, and new deep-water ports could be dug), it was soon profitable to transport even the cheapest and bulkiest of goods over vast distances — goods like meat, coal, and grain.

The entire world was brought into a single market, in which even the bulkiest commodities of each continent were suddenly in direct competition with one another. The decisions of farmers in Ukraine, for example, in the nineteenth century came to affect the farmers in America, China, India, or even Australia, and all of them vice versa. The prices of commodities all over the world thus converged to similar levels, falling in some places, but rising in the economies that had previously been too distant from the ready markets of the industrialised nations.

The result was what economic historians call a terms-of-trade boom, with the more agrarian economies’ commodity exports becoming more valuable relative to manufactured imports. Thus, their grain, raw fibres, minerals, and ores suddenly bought many more foreign manufactures like textiles. Countries that specialised in commodities thus specialised even further, devoting even more of their workers, resources and capital to extracting them. They were incentivised to extend their frontiers — to put more of the wilderness under pasture or plough, and to dig deeper for the mineral wealth beneath their feet.

Meanwhile, for the industrial economies, the opposite happened. By gaining access to many more and cheaper sources of raw resources and food, they were able to make their own manufactured exports cheaper too. And this, in turn, further exacerbated the terms-of-trade boom among their newly globalised commodity suppliers. As the great Saint-Lucian economist Sir W. Arthur Lewis put it, the world in the late nineteenth century separated into an increasingly industrialised “core”, fed by an increasingly farming- and mining-focused “periphery”.

Much has changed in the century that followed, and some of the old core/periphery distinctions have moved or entirely broken down. But the world has remained globalised. Even in periods of higher tariffs, like between the world wars, no amount of protectionism was able to counteract or undo the effects of the dramatic drop in global transportation costs. With the advent of telegraphs, telephones, fax machines, and now the Internet, even many services are becoming globalised as well — a process likely sped up by the pandemic. Those who can easily work from home will increasingly, like nineteenth-century workers the world over, find themselves either the victims or beneficiaries of global price convergence. (Incidentally, I’m not convinced that the very services-heavy economies of Europe or North America are even remotely prepared for this, to the extent that they can prepare at all for what is the economic equivalent of a planetary-scale force of nature.)

September 2, 2022

The winner in 1932 campaigned against high taxes, big government, and more debt. Then he turned all those up to 11

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

At the Foundation for Economic Education, Lawrence W. Reed notes that we often get the opposite of what we vote for, and perhaps the best example of that was the 1932 presidential campaign between high-taxing, big-spending, government-expanding Republican Herbert Hoover and Franklin Delano Roosevelt, who ran against all of Hoover’s excesses … until inauguration day, anyway:

Top left: The Tennessee Valley Authority, part of the New Deal, being signed into law in 1933.
Top right: FDR (President Franklin Delano Roosevelt) was responsible for the New Deal.
Bottom: A public mural from one of the artists employed by the New Deal’s WPA program.
Wikimedia Commons.

If you were a socialist (or a modern “liberal” or “progressive”) in 1932, you faced an embarrassment of riches at the ballot box. You could go for Norman Thomas. Or perhaps Verne Reynolds of the Socialist Labor Party. Or William Foster of the Communist Party. Maybe Jacob Coxey of the Farmer-Labor Party or even William Upshaw of the Prohibition Party. You could have voted for Hoover who, after all, had delivered sky-high tax rates, big deficits, lots of debt, higher spending, and trade-choking tariffs in his four-year term. Roosevelt’s own running mate, John Nance Garner of Texas, declared that Republican Hoover was “taking the country down the path to socialism”.

Journalist H.L. Mencken famously noted that “Every election is a sort of advance auction sale of stolen goods.” If you agreed with Mencken and preferred a non-socialist candidate who promised to get government off your back and out of your pocket in 1932, Franklin Roosevelt was your man — that is, until March 1933 when he assumed office and took a sharp turn in the other direction.

The platform on which Roosevelt ran that year denounced the incumbent administration for its reckless growth of government. The Democrats promised no less than a 25 percent reduction in federal spending if elected.

Roosevelt accused Hoover of governing as though, in FDR’s words, “we ought to center control of everything in Washington as rapidly as possible.” On September 29 in Iowa, the Democrat presidential nominee blasted Hooverism in these terms:

    I accuse the present Administration of being the greatest spending Administration in peace times in all our history. It is an Administration that has piled bureau on bureau, commission on commission, and has failed to anticipate the dire needs and the reduced earning power of the people. Bureaus and bureaucrats, commissions and commissioners have been retained at the expense of the taxpayer.

    Now, I read in the past few days in the newspapers that the President is at work on a plan to consolidate and simplify the Federal bureaucracy. My friends, four long years ago, in the campaign of 1928, he, as a candidate, proposed to do this same thing. And today, once more a candidate, he is still proposing, and I leave you to draw your own inferences. And on my part, I ask you very simply to assign to me the task of reducing the annual operating expenses of your national government.

Once in the White House, he did no such thing. He doubled federal spending in his first term. New “alphabet agencies” were added to the bureaucracy. Nothing of any consequence in the budget was either cut or made more efficient. He gave us our booze back by ending Prohibition, but then embarked upon a spending spree that any drunk with your wallet would envy. Taxes went up in FDR’s administration, not down as he had promised.

Don’t take my word for it. It’s all a matter of public record even if your teacher or professor never told you any of this. For details, I recommend these books: Burton Folsom’s New Deal or Raw Deal; Murray Rothbard’s America’s Great Depression; my own Great Myths of the Great Depression; and the two I want to tell you about now, John T. Flynn’s As We Go Marching and The Roosevelt Myth.

For every thousand books written, perhaps one may come to enjoy the appellation “classic”. That label is reserved for a volume that through the force of its originality and thoroughness, shifts paradigms and serves as a timeless, indispensable source of insight.

Such a book is The Roosevelt Myth. First published in 1948, Flynn’s definitive analysis of America’s 32nd president is arguably the best and most thoroughly documented chronicle of the person and politics of Franklin Delano Roosevelt. Flynn’s 1944 book, As We Go Marching, focuses on the fascist-style economic planning during World War II and is very illuminating as well.

Alliance For Peace (1951) North Atlantic Treaty Organization Promo Film

Filed under: Britain, Economics, Europe, France, Germany, Greece, History, Military, Russia, USA — Tags: , , , , , , , , , , — Nicholas @ 04:00

PeriscopeFilm
Published 14 May 202s

Produced by NATO and the Signal Photographic Service of the U.S. Army, this black & white film is about the formation of NATO and its importance in the defense of the free world. Copyright 1951. The film features a score by William Alwyn. The film dates from the time when Gen. Dwight Eisenhower was supreme commander of NATO (1950-52), a post he left in order to run for President of the United States.
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August 28, 2022

Why do millions of people try to get into the US from Central and South America?

Filed under: Americas, Bureaucracy, Economics, Environment, Politics, USA — Tags: , , , , — Nicholas @ 05:00

Elizabeth Nickson on what is driving so many people to leave their homes and trek north to the US (and, to a much lesser extent, Canada):

Mostly they are coming because Black Rock, the UN, the WEF are grabbing their lands, the more fertile the better, driving them from those lands and sticking them into tenement cities where they have to scratch like chickens for a living. Agenda 2030 is ravening under the radar in the US and Canada, where “civil society” in the pay of the government and environmental NGOs funded by oligarchs, is taking as much land and as many resources as possible out of the productive economy and shoving it into the land banks of BlackRock.

In the south, it’s not surreptitious. It is state policy to destroy their lives, to take their ancestral lands, whether it’s 40 acres or a half acre and leave them begging by the side of the road.

This piece was removed from the UN website within a day

Climate Change is a complex financial mechanism which under the guise of “saving the planet”, is meant to save the predator class.

Which is not only morally bankrupt, but is dealing with a level of government and corporate debt that they know they cannot sustain. In the healthiest economy in the world, the US, all profits now are coming from either some mechanism of government subsidy – the $6 Trillion of the Covid catastrophe – or Collateralized Default Obligations. For instance right now Penguin is in court attempting to buy Random House. Why? Because they can borrow money to do that, buy back some of their stock and pay their shareholders. It will mean middle managers will lose their jobs, and marginal books will not be published, but the ravening maw of Jamie Diamond and Larry Fink will be satiated. For the moment. There is no other reason. Growth, real growth has stalled in every single enterprise.

This is how it works at the top of the class pyramid:

Last week on my island we were treated to the spectacle of well-heeled, highly educated, well-spoken older men and women arguing that the impoverished elderly, the young, and families starting out should not have housing because of climate change. Our island is 74 square miles with 10,000 residents. That means we have one resident per five acres.

Our government, the trust, had proposed the use of accessory buildings, brought up to code, for long-term rentals.

The extreme form of land conservation we practice has meant that housing prices have skyrocketed, so only the rich and the well-pensioned can afford to live here. A thousand or so working age people manage to make a living, generally via remote work. We have no staff for the schools, hospitals, businesses, restaurants. They cannot afford to live here.

About 200 people on our islands, mostly in their 70s and 80s, tightly aligned with the hysterical wing of the environmental movement work the process to stop any growth. Every new resident who pulls a permit is visited and threatened by a by-law officer. The woman who instigated this specific weapon, a former enviro bureaucrat from LA, demanded full time by-law officers for years until she won, after which she fought for aggressive enforcement.

With this one act, she set islanders against each other, creating conflict where there was none. This too is deliberate. A community divided is easily controlled.

Ring any bells?

August 27, 2022

QotD: The key functions of cities in pre-modern economies

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

As modern people, we are used to the main roles cities play in the modern world, some of which are shared by pre-modern cities, and some of which are not. Modern cities are huge production centers, containing in them both the majority of the labor and the majority of the productive power of a society; this is very much not true of pre-modern cities – most people and most production still takes place in the countryside, because most people are farmers and most production is agricultural. Production happens in pre-modern cities, but it comes nowhere close to dominating the economy.

The role of infrastructure is also different. We are also used to cities as the center-point lynch-pins of infrastructure networks – roads, rail, sea routes, fiber-optic cable, etc. That isn’t false when applied to pre-modern cities, but it is much less true, if just because modern infrastructure is so much more powerful than its pre-modern precursors. Modern infrastructure is also a lot more exclusive: a man with a cart might visit a village where the road does not go, but a train or a truck cannot. The Phoenician traders of the early iron age could pull their trade ships up on the beach in places where there was no port; do not try this with a modern container-ship. Infrastructure is largely a result of cities, not their original purpose or cause.

So what are the core functions of a pre-modern city? I see five key functions:

  1. Administrative Center. This is probably the oldest purpose cities have served: as a focal point for political and religious authorities. With limited communications technology, it makes sense to keep that leadership in one place, creating a hub of people who control a disproportionate amount of resources, which leads to
  2. Defensive/Military Center. Once you have all of those important people and resources (read: stockpiled food) in one place, it makes sense to focus defenses on that point. It also makes sense to keep – or form up – the army where most of the resources and leaders are. People, in turn, tend to want to live close to the defenses, which leads to
  3. Market Center. Putting a lot of people and resources in one place makes the city a natural point for trade – the more buyers and sellers in one place, the more likely you are to find the buyer or seller you want. As a market, the city experiences “network” effects: each person living there makes the city more attractive for others. Still, it is important to note: the town is a market hub for the countryside, where most people still live. Which only now leads to
  4. Production Center. But not big industrial production like modern cities. Instead it is the small, niche production – the sort of things you only buy once-and-a-while or only the rich buy – that get focused into cities. Blacksmiths making tools, producers of fine-ware and goods for export, that sort of thing. These products and producers need big markets or deep pockets to make end meet. The majority of the core needs of most people (things like food, shelter and clothes) are still produced by the peasants, for the peasants, where they live, in the country. Still, you want to produce goods made for sale rather than personal use near the market, and maybe sell them abroad, which leads to
  5. Infrastructure Center. With so much goods and communications moving to and from the city, it starts making sense for the state to build dedicated transit infrastructure (roads, ports, artificial harbors). This infrastructure almost always begins as administrative/military infrastructure, but still gets used to economic ends. Nevertheless, this comes relatively late – things like the Persian Royal Road (6th/5th century BC) and the earliest Roman roads (late 4th century BC) come late in most urban development.

    6. Of course, all of these functions depend, in part, on the city as a concentration of people, but what I want to stress […] is that in all of these functions the pre-modern city effectively serves the countryside, because that is still where most people are and where most production (and the most important production – food) is. The administration in the city is administering the countryside – usually by gathering and redistributing surplus agricultural production (from the countryside!). The defenses in the city are meant to defend the production of the countryside and the people of the countryside (when they flee to it). The people using the market – at least until the city grows very large – are mostly coming in from the country (this is why most medieval and ancient markets are only open on certain days – for the Romans, this was the “ninth day”, the Nundinae – customers have to transit into town, so you want everyone there on the same day).

    (An aside: I have framed this as the city serving the economic needs of the countryside, but it is equally valid to see the city as the exploiter of the countryside. The narrative above can easily be read as one in which the religious, political and military elite use their power to violently extract surplus agricultural production, which in turn gives rise to a city that is essentially a parasite (this is Max Weber’s model for a “consumer city”) that contributes little but siphons off the production of the countryside. The study of ancient and medieval cities is still very much embroiled in a debate between those who see cities as filling a valuable economic function and those who see them as fundamentally exploitative and rent-seeking; I fall among the former, but the latter do have some very valid points about how harshly and exploitatively cities (and city elites) could treat their hinterlands.)

    Consequently, the place and role of almost every kind of population center (city, town or castle-town) is dictated by how it relates to the countryside around it (the city’s hinterland; the Greeks called this the city’s khora (χώρα)).

    Bret Devereaux, Collections: The Lonely City, Part I: The Ideal City”, A Collection of Unmitigated Pedantry, 2019-07-12.

August 26, 2022

The rise of “Davos Man”

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

Conrad Black on the early days of the World Economic Forum’s annual Davos gatherings:

… if any place could be identified as the birthplace of the Great Reset, it must be the small, drab, German-Swiss Alpine town of Davos, a center of contemporary anticapitalism, or at least radically altered and almost deracinated capitalism, and site of an ever-expanding international conference. (It grew exponentially and has spawned regional versions.)

I attended there for many years by invitation in order to ascertain what my analogues in the media business around the world were doing. The hotels are spartan and the town is very inaccessible. When I first attended nearly forty years ago, the Davos founder, the earnest and amiable Klaus Schwab, had ingeniously roped in a number of contemporary heads of government and captains of industry and leaders in some other fields and had sold huge numbers of admissions to well-to-do courtiers and groupies from all over the world, attracted by the merits of “networking”.

Davos, and its regional outgrowths across the world, gradually came to express a collective opinion of the virtues of universal supranationalism (the Davos variety of globalism): social democracy; environmental alarmism; the desirability of having a nonpolitical international bureaucracy; a public sector-reflected image of the Davos hierarchy itself (and in fact, in many cases, preferably the very same individuals); and gently enforcing a soft Orwellian conformity on everybody. It must be said that many of the sessions were interesting, and it was a unique experience being amid so many people capable in their fields, and this certainly includes almost all of those who were revenue-producing, “networking” spectators and not really participants.

Davos is for democracy, as long as everyone votes for increased public sector authority in pursuit of green egalitarianism and the homogenization of all peoples in a conformist world. It was the unfolding default page of the European view: capitalism was to be overborne by economic redistribution; all concepts of public policy were to be divorced from any sense of nationality, history, spirituality, or spontaneity and redirected to defined goals of imposed uniformity under the escutcheon of ecological survival and the reduction of abrasive distinctions between groups of people—such obsolescent concepts as nationality or sectarianism. (My hotel concierge stared at me as if I had two heads when I inquired where the nearest Roman Catholic Church was and was even more astonished when I trod two miles through the snow there and back to receive its moral succour; the parishioners appeared a sturdy group.)

The Covid-19 pandemic caused Davos Man to break out of his Alpine closet and reveal the secret but suspected plan: the whole world is to become a giant Davos — humorless, style-less, unspontaneous, unrelievedly materialistic, as long as the accumulation and application of capital is directed by the little Alpine gnomes of Davos and their underlings and disciples. This is a slight overstatement, and Klaus Schwab would earnestly dispute that the purpose of Davos is so comprehensive, anesthetizing, and uniform. His dissent would be sincere, but unjustified: the Great Reset, a Davos expression, is massively ambitious and is largely based on the seizure and hijacking of recognizable capitalism, in fact and in theory.

There has indeed in the last thirty years been a war on capitalism conducted from the commanding heights of the academy and very broadly assisted by the Western media that has been gathering strength as part of the great comeback of the Left following their bone-crushing defeat in the Cold War. As international communism collapsed and the Soviet Union disintegrated, it was difficult to imagine that the Left could mount any sort of comeback anytime soon. We underestimated both the Left’s imperishability and its gift for improvisation, a talent that their many decades of predictable and robotic repetitiveness entirely concealed.

August 23, 2022

QotD: The fate of suddenly poor Spartiates

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

What are affairs like for poor spartiates?

First, we need to reiterate that a “poor” spartiate was still quite well off compared to the average citizen in many Greek poleis – we talk about “poor” spartiates the same way we talk about the “poor” gentry in a Jane Austen novel. None of them are actually poor in an absolute sense, they are only poor in the sense that they are the poorest of the rich, clinging to the bottom rung of the upper class.

Nevertheless, we should talk about them, because the consequences of falling off of that bottom rung of the economic ladder in Sparta were extremely severe because of the closed nature of the spartiate system. Here is the rub: membership in a syssition was a requirement of spartiate status, so failure to be a member in a syssition – either because of failure in the agoge or because a spartiate could no longer keep up the required mess contributions – that meant not being a spartiate anymore.

The term we have for ex-spartiates is hypomeiones (literally “the inferiors”), which seems to have been an informal term covering a range of individuals who were (or whose family were) spartiates, but had ceased to be so. The hypomeiones were, by all accounts, mostly despised by the spartiates and the hatred seems to have been mutual (Xen. Hell. 3.3.6). Interestingly in that passage there – Xenophon’s Hellenica 3.3.6 – he lists the Spartan underclasses in what appears to be rising order of status – first the helots (at the bottom), then the neodamodes (freed helots, one step up), then the hypomeiones, and then finally the perioikoi. The implication is that falling off of the bottom of the spartiate class due to cowardice, failure – or just poverty – meant falling below the largest group of free non-citizens, the perioikoi.

Herodotus gives some sense of the treatment of men who failed at being spartiates when he details the two survivors of Thermopylae – Aristodemus and Pantites. Both had been absent from the battle under orders – Pantites had been sent carrying a message and Aristodemus had suffered an infection. When they returned to Sparta, both were ostracized by the spartiates for failing to have died – Pantites hanged himself (Hdt. 7.232) while Aristodemus was held to have “redeemed” himself with a suicidal charge at Plataea which cost his life (Hdt. 7.231). And as a side note: Aristodemus is the model for 300’s narrator, Dilios – so when you see him in the movie, remember: the Spartan system drove these men to pointless suicide because they followed an order.

But my main point here is that falling out of the spartiate system meant social death. Remember that the spartiates are a closed class – failing at being a spartiate because your kleros is too poor to maintain the mess contribution means losing citizen status; it means your children cannot attend the agoge or become spartiates themselves. It means you, your wife, your entire family forever are shamed, their status as full members of society forever revoked and your social orbit collapses on you, since you are cut off from the very ties that bind you to your friends. No wonder Pantites preferred to hang himself.

In essence then, the core of the problem here is not that these poor spartiates were poor in any absolute sense – they weren’t. It was that the difference between being rich and being merely affluent in Sparta was a social abyss completely unlike any other Greek state. And that abyss was completely one way. As we’ll see – there was no way back.

Our sources are, unfortunately, profoundly uninterested in answering some crucial questions about the hypomeiones: did they keep their kleroi? What happened to the status of their children? What happened to the status of the women in their families? We can say one thing: it is clear that there was no “on-ramp” for hypomeiones to get back into the spartiate system. This is made quite clear, if by nothing else, by the collapsing number of spartiates (we’ll get to it), but also at the inability of extremely successful non-Spartan citizens – men like Gylippus and Lysander – to ever join the homoioi. Once a spartiate was a hypomeiones, they appear to have been so forever – along with any descendants they may have had. Once out, out for good.

All of that loops back to the impact of the great earthquake in 464. It is likely there were always spartiates who – because their kleroi were just a bit poorer, or were hit a bit harder by helot resistance, or for whatever reason – clung to the bottom of the spartiate system financially, struggling to make the contributions to the common mess. When the earthquake hit, the death of so many helots – on whom they relied for their economic basis – combined with the overall disruption seems to have pushed many of these men beyond the point where they could sustain themselves. Unlike in a normal Greek polis, they could not just take up some productive work to survive and continue as citizens, because that was forbidden to the spartiates, so they collapsed out of the class entirely.

(As an aside – the fact that wealthy spartiates, as mentioned, seemed to prefer each other’s company over the rest probably also meant that the social safety-net of the poor spartiates likely consisted of other poor spartiates. Perhaps in normal circumstances they remained stable by relying on each other (you help me in my bad year, I help you in yours – this is very common survival behavior in subsistence agriculture societies), but the earthquake – by hitting them all at once – may well have caused a downward spiral, as each spartiate who fell out of the system made the remainder more vulnerable, culminating in entire social groups falling out.)

As I said, our sources are uninterested in poor spartiates, so we can only imagine what it must have felt like, clinging desperately to the bottom of that social system, knowing how deep the hole was beneath you. One imagines the mounting despair of the spartiate wife whose job it is to manage the household trying to scrounge up the mess contributions out of an ever-shrinking pool of labor and produce, the increasing despair of her husband who because of the laws cannot do anything but watch as his household slides into oblivion. We cannot know for certain, but it certainly doesn’t seem like a particularly happy existence.

As for those who did fall out of the system we do not need to imagine because Xenophon – in a rare moment of candor – leaves us in no doubt what they felt. He puts it this way: “they [the leaders of a conspiracy against the spartiates] knew the secret of all of the others – the helots, the neodamodes, the hypomeiones, the perioikoi – for whenever mention was made of the spartiates among these men, not one of them could hide that he would gladly eat them raw” (Xen. Hell. 3.3.6; emphasis mine).

Bret Devereaux, “Collections: This. Isn’t. Sparta. Part IV: Spartan Wealth”, A Collection of Unmitigated Pedantry, 2019-08-29.

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