Think of all the traits and characteristics, most of them negative, associated with the Millennials in the popular mind. They are said to be unrealistic and have both the inflated expectations of life and the inflated perceptions of selves. They think the world owes them a living – a good one too – though without necessarily too much effort. Things came very easily to them when they were growing up; when that suddenly stops – when the reality finally intrudes – they get angry, frustrated, lost: the world is deeply unfair and is conspiring against them. They are narcissistic, self-possessed and self-obsessed. They expect instant rewards and instant gratification. Having been told their whole lives how special they are, they tend to be over-sensitive and find it difficult to cope with criticism or obstacles. They’re lazy, flighty and easily distracted. Remember: these are all generalisations, but stereotypes stick because they ring true.
So no, no surprises here. Their collective personality makes the Millennials unusually suited for the flirtation with socialism. They are a great match; if this was Tinder, Marx would be getting super liked all the time.
Socialism is the response of a spoiled child when faced with the world that does not genuflect to its every wish the way their parents did – the world as it is must therefore be evil and has to be changed to something radically different. Gen Y, of course, did not just magically became the way they are – they were brought up like that, so we all bear the blame and the responsibility for a generation who resents not being managers in their 20s and not being recognised as special anymore by all their elders. Clearly, the capitalism has failed when I’m not showered down with money after I graduate from my double in media and gender studies.
Arthur Chrenkoff, “Socialism as a Millennial religion”, The Daily Chrenk, 2019-02-19.
June 14, 2022
June 11, 2022
QotD: Modern disposable clothing
Pietra Rivoli, The Travels of a T-Shirt in the Global Economy, 2015.
June 10, 2022
Don’t think of it as “Shrinkflation” … think of it as corporations helpfully trying to help you lose weight (at the same or higher prices)
Companies have several different ways to cope with rising input prices, including just swallowing the increases without passing them on to consumers … stop laughing, I mean it’s at least theoretically possible, right? They can also just hike retail prices, which we’ve seen a fair bit of already, but that sometimes agitates consumers enough to materially depress sales. A sneakier way, which we’re also seeing a lot of, is to shrink the product but sell it for the same price. Sometimes, it will take a while for people to notice they’re getting less than they used to:
Original image from www.marpat.co.uk
The rise in consumer prices has rightly received a great deal of attention, as inflation hovers around 40-year highs. Everyone can see that virtually everything is getting more expensive, but fewer have noticed that many items are also getting smaller.
On Wednesday the Associated Press ran an article under the headline “No, you’re not imagining it — package sizes are shrinking.”
The AP spoke to one shopper, Alex Aspacher, who does a lot of shopping for his family of four in Ohio. He noticed he was still paying $9.99 for Swiss cheese even though the package had shrunk from a pound to 12 ounces.
“I was prepared for it to a degree, but there hasn’t been a limit to it so far,” Aspacher told the AP. “I hope we find that ceiling pretty soon.”
This phenomenon — known as “shrinkflation” — is nothing new, of course. It’s just more pronounced now than in any time in recent memory because inflation is much higher.
But what exactly is shrinkflation? As economist Peter Jacobsen explained last year, it’s simply a different kind of inflation.
“Shrinkflation is a form of inflation because you’d have to spend more money to get the same quantity or quality as you did in a previous year,” he explained. “The prices have remained the same, but the products are worse.”
The only difference is, instead of raising the price of an item or service, businesses are reducing the quantity or quality of it while keeping the price the same.
Edgar Dworsky, a consumer advocate who has tracked shrinkflation for decades, told the AP shrinkflation is rampant at the moment because of the underlying economic conditions.
“It comes in waves,” said Dworsky. “We happen to be in a tidal wave at the moment because of inflation.”
June 4, 2022
Bill C-18 might as well be called the “Keep legacy media alive at all costs, even if nobody wants it anymore” act
The Line‘s Jen Gerson lays out the case against the federal government’s plans for permanent corporate welfare for the big Canadian legacy media organizations:
How Jen Gerson might visualize Torstar and Postmedia during the lobbying effort for Bill C-18.
“Zombie nuns” by Michael Cavén is licensed under CC BY-NC-SA 2.0 
This week, The Line signed on to a campaign put together by a coalition of independent media publishers calling for amendments to the panda trash fodder piece of legislation known as C-18. To be fair, I mostly signed on; my co-founder Matt Gurney had some reservations, and I figured it would be best to hash them out in full here.
The bill is a hot mess created by a clearly well-intentioned government that appears to have been bamboozled by a group of media industry lobbyists helmed by organizations like Postmedia and Torstar — companies that despite extraordinary history and resources have largely failed to sustainably transition to a digital media environment. These large outlets are now using the last of their dying power and influence to champion legislation that will force big technology companies like Facebook and Google to compensate them for linking to their content.
This is a straightforward case of regulatory capture, the very thing we would condemn in any other industry; big media companies are using their credibility and political power to pressure the government into forcing “Big Tech” to sustain their dying business models — the very “Big Tech” that they’ve spent years deriding and defaming in their very own newspapers and outlets.
This whole process is corrupt. I don’t say that lightly. Perhaps inevitably, I’ve grown totally disillusioned with the industry to which I have devoted all of my adult life. We used to consider journalism a calling or a vocation — manipulative terms that justified the low pay, harassment, and sometimes abusive management. How can the church of journalism and its holy mandate to preserve democracy continue to take itself seriously when the very catechism of the craft are nowhere present in its own self-created lobbying arm, New Media Canada?
I think the leaders of this initiative have convinced themselves that the business model they enjoyed in the ’80s and ’90s is so totally central to the survival of democracy and liberal values that they’ve committed to keeping it afloat by any means necessary regardless of the ethical and philosophical cost. In doing so, I believe that they’re only ensuring their own failure.
By driving legislation in this way, they are not proving their worth to the broader public. Rather, they are conceding that what they produce has so little value that they need to evolve into parasites of the state. It demonstrates that commitment to democracy and accountability is secondary to their primary functions; running a business. They have stockholders to please and interest on loans to pay. Big loans.
Meanwhile, the legacy media they have managed is little more than a zombie in nun’s drag. It is in a state of terminal decline, and keeping it alive poisons the earth for the generations to come after.
June 2, 2022
“Like many problems in American history, recycling began as a moral panic”
Jon Miltimore recounts the seminal event that kicked off the recycling pseudo-religion in North America:
The frenzy began in the spring of 1987 when a massive barge carrying more than 3,000 tons of garbage — the Mobro 4000 — was turned away from a North Carolina port because rumor had it the barge was carrying toxic waste. (It wasn’t.)
“Thus began one of the biggest garbage sagas in modern history,” Vice News reported in a feature published a quarter-century later, “a picaresque journey of a small boat overflowing with stuff no one wanted, a flotilla of waste, a trashier version of the Flying Dutchman, that ghost ship doomed to never make port.”
The Mobro was simply seeking a landfill to dump the garbage, but everywhere the barge went it was turned away. After North Carolina, the captain tried Louisiana. Nope. Then the Mobro tried Belize, then Mexico, then the Bahamas. No dice.
“The Mobro ended up spending six months at sea trying to find a place that would take its trash,” Kite & Key Media notes.
America became obsessed with the story. In 1987 there was no Netflix, smartphones, or Twitter, so apparently everyone just decided to watch this barge carrying tons of trash for entertainment. The Mobro became, in the words of Vice, “the most watched load of garbage in the memory of man.”
The Mobro also became perhaps the most consequential load of garbage in history.
“The Mobro had two big and related effects,” Kite & Key Media explains. “First, the media reporting around it convinced Americans that we were running out of landfill space to dispose of our trash. Second, it convinced them the solution was recycling.”
Neither claim, however, was true.
The idea that the US was running out of landfill space is a myth. The urban legend likely stems from the consolidation of landfills in the 1980s, which saw many waste depots retired because they were small and inefficient, not because of a national shortage. In fact, researchers estimate that if you take just the land the US uses for grazing in the Great Plains region, and use one-tenth of one percent of it, you’d have enough space for America’s garbage for the next thousand years. (This is not to say that regional problems do not exist, Slate points out.
The widespread imposition of recycling mandates across North America was probably an inevitable reaction to the voyage of the Mobro. For many people, this was the end of the story, as things that were previously just buried in landfill sites would now be safely and efficiently put back into the economy as re-used, re-purposed, or actual recycled products. Win-win, right?
Sadly, the economic case for recycling many items is weak to non-existant. The demand for recycled materials was lower than predicted and often only maintained through subsidies and hidden incentives that couldn’t last forever. Once the incentives went away, so did much of the created demand. Worse, the way a lot of the stream of recyclable materials was handled was by shipping it off to China or certain developing nations — in effect, paying them to take the problem off the hands of western governments. This resulted in even more problems:
Americans who’ve spent the last few decades recycling might think their hands are clean. Alas, they are not. As the Sierra Club noted in 2019, for decades Americans’ recycling bins have held “a dirty secret”.
“Half the plastic and much of the paper you put into it did not go to your local recycling center. Instead, it was stuffed onto giant container ships and sold to China,” journalist Edward Humes wrote. “There, the dirty bales of mixed paper and plastic were processed under the laxest of environmental controls. Much of it was simply dumped, washing down rivers to feed the crisis of ocean plastic pollution.”
It’s almost too hard to believe. We paid China to take our recycled trash. China used some and dumped the rest. All that washing, rinsing, and packaging of recyclables Americans were doing for decades — and much of it was simply being thrown into the water instead of into the ground.
The gig was up in 2017 when China announced they were done taking the world’s garbage through its oddly-named program, Operation National Sword. This made recycling much more expensive, which is why hundreds of cities began to scrap and scale back operations.
May 30, 2022
Technocratic meddling in developing countries at the local level
One of the readers of Scott Alexander’s Astral Codex Ten has contributed a review of James Ferguson’s The Anti-Politics Machine. The reviewer looked at a few development economics stories that illustrate some of the more common problems western technocrats encounter when they provide their “expert advice” to people in developing countries. This is one of perhaps a dozen or so anonymous reviews that Scott publishes every year with the readers voting for the best review and the names of the contributors withheld until after the voting is finished:
But even if the project was in some sense a “failure” as an agricultural development project, it is indisputable that many of its “side effects” had a powerful and far-reaching impact on the Thaba-Tseka region. […] Indeed, it may be that in a place like Mashai, the most visible of all the project’s effects was the indirect one of increased Government military presence in the region
As the program continued to unfold, the development officials became more and more disillusioned — not with their own choices, but with the people of Thaba-Tseka, who they perceived as petty, apathetic, and outright self-destructive. A project meant to provide firewood failed because locals kept breaking into the woodlots and uprooting the saplings. An experiment in pony-breeding fell apart when “unknown parties” drove the entire herd of ponies off of cliffs to their deaths. Why, Ferguson’s official contacts bemoaned, weren’t the people of Thaba-Tseka committed to their own “development”?
Who could possibly be opposed to trees and horses? Perhaps, the practitioners theorized, the people of Thaba-Tseka were just lazy. Perhaps they “didn’t want to be better”. Perhaps they weren’t in their right mind or had made a mistake. Perhaps poverty makes a person do strange things.
Or, as Ferguson points out, perhaps their anger had something to do with the fact that the best plots of land in the village had been forcibly confiscated to make room for wood and pony lots, without any sort of compensation. The central government was all too happy to help find land for the projects, which they took from political enemies and put in the control of party elites, especially when it could use a legitimate anti-poverty program as cover. In Ferguson’s words, the development project was functioning as an “anti-politics machine” the government could use to pretend political power moves were just “objective” solutions to technical problems.
A local student’s term paper captured the general discontent:
In spite of the superb aim of helping the people to become self-reliant, the first thing the project did was to take their very good arable land. When the people protested about their fields being taken, the project promised them employment. […] It employed them for two months, found them unfit for the work, and dismissed them. Without their fields and without employment they may turn up to be very self-reliant. It is rather hard to know.
Two things stand out to me from this story. First, the “development discourse” lens served to focus the practitioners’ attention on a handful of technical variables (quantity of wood, quality of pony), and kept them from thinking about any repercussions they hadn’t thought to measure.
This is a serious problem, because “negative effects on things that aren’t your primary outcome” are pretty common in the development literature. High-paying medical NGOs can pull talent away from government jobs. Foreign aid can worsen ongoing conflicts. Unconditional cash transfers can hurt neighbors who didn’t receive the cash. And the literature we have is implicitly conditioned on “only examining the variables academics have thought to look at” — surely our tools have rendered other effects completely invisible!
Second, the project organizers somewhat naively ignored the political goals of the government they’d partnered with, and therefore the extent to which these goals were shaping the project.
Lesotho’s recent political history had been tumultuous. The Basotho Nationalist Party (BNP), having gained power upon independence in 1965, refused to give up power after losing the 1970 elections to the Basotho Congress Party (BCP). Blaming the election results on “communists”, BNP Prime Minister Leabua Jonathan declared a state of emergency and began a campaign of terror, raiding the homes of opposition figures and funding paramilitary groups to intimidate, arrest, and potentially kill anyone who spoke up against BNP rule.
This had significant effects in Thaba-Tseka, where “villages […] were sharply divided over politics, but it was not a thing which was discussed openly” due to a fully justified fear of violence. The BNP, correctly sensing the presence of a substantial underground opposition, placed “development committees” in each village, which served primarily as local wings of the national party. These committees spied on potential supporters of the now-outlawed BCP and had deep connections to paramilitary “police” units.
When the Thaba-Tseka Development Project started, its international backers partnered directly with the BNP leadership, reasoning that sustainable development and public goods provision could only happen through a government whose role they primarily viewed as bureaucratic. As a result, nearly every decision had to make its way through the village development committees, who used the project to pursue their own goals: jobs and project funds found their way primarily to BNP supporters, while the “necessary costs of development” always seemed to be paid by opposition figures.
The funding coalition ended up paying for a number of projects that reinforced BNP power, from establishing a new “district capital” (which conveniently also served as a military base) to constructing new and better roads linking Thaba-Tseka to the district and national capitals (primarily helping the central government tax and police an opposition stronghold). Anything that could be remotely linked to “economic development” became part of the project as funders and practitioners failed to ask whether government power might have alternate, more concerning effects.
As we saw earlier, the population being “served” saw this much more clearly than the “servants”, and started to rebel against a project whose “help” seemed to be aimed more at consolidating BNP control than meeting their own needs. When they ultimately resorted to killing ponies and uprooting trees, project officials infatuated with “development” were left with “no idea why people would do such a thing”, completely oblivious to the real and lasting harm their “purely technical decisions” had inflicted.
May 26, 2022
Alex Tabarrok reviews The Parent Trap
At Marginal Revolution, Alex Tabarrok looks at Nate G. Hilger’s new book, The Parent Trap:
Hilger argues that the problems of poverty, pathology and inequality that bedevil the United States are not primarily due to poor schools, discrimination, or low incomes per se. The primary cause is parents: parents who are unable to teach their children the skills that are necessary to succeed in the modern world. Since parents can’t teach the necessary skills, Hilger calls for the state to take their place with a dramatic expansion of not just child care but collective parenting.
Let’s unpack some details. Begin with schooling. It’s very common to bemoan the state of schools in the “inner city” or to complain about “local financing” which supposedly guarantees that poor counties will have underfunded schools. All of this, however, is decades out-of-date.
A hundred years ago there really were massive public-school resource gaps by class and race. These days, however, state and federal spending play a larger role than local property tax revenue and distribute educational resources more progressively … In fact, when we include federal aid, 42 states spent more on poor school districts than on rich school districts in 2012. The same pattern holds between schools within districts
… The highest spending districts are large urban centers such as New York City, Boston and Baltimore. These cities spend large sums to educate rich and poor children alike. p. 10-11
Hilger is correct. No matter what you saw on The Wire, Baltimore spends more than sixteen thousand dollars per student, among the highest in the nation in large school districts and above average for the nation as a whole. Public schools are quite egalitarian in funding with any bias running towards more funding for poorer districts.
Schools, Hilger writes are “actually the smallest and most equalizing part of a much larger skill-building system.” The real problem, says Hilger, are parents.
But what about discrimination? When it comes to wage discrimination, Hilger is brutally honest:
If we compare individuals with similar cognitive test scores, Black college graduates earn higher wages than white college graduates. Studies that don’t control for test score differences but examine earnings gaps within specific professions — lawyers, physicians, nurses, engineers, scientists — tend to find Black workers earn zero to 10 percent less than white workers. These gaps could reflect discrimination, unmeasured skill differences, or other factors such as geography. In any case, such gaps are small compared to the 50 percent overall Black-white earnings gap and reinforce the idea that closing skills gaps would go a long way toward closing income gaps.
Hilger argues that racism does play an important role in explaining Black-white wage differentials but it’s the historical racism that made black parents less skilled and less able to pass on skills to their children. In the twentieth century, Asians, Hilger argues, were discriminated against in the United States at least much as Black Americans. But the Asians that came to the United States had high skills while the legacy of slavery meant that Black Americans began with low skills. Asians, therefore, were better able to overcome discrimination. The success of Nigerians and Jamaican immigrants in the United States also speaks to this point. (Long time readers may recall that in 2016 I dubbed Hilger’s paper on Asian Americans and Black Americans the Politically Incorrect Paper of the Year.)
May 25, 2022
QotD: The “social responsibility” of business
Milton Friedman, “The Social Responsibility of Business is to Increase its Profits”, New York Times, 1970-09-13.
May 18, 2022
From “Software as a Service” to “Property as a Service” then to “Hypercapitalism” aka Neo-Feudalism
Whenever I could, as the software I used to depend on switched from the old-fashioned “purchase a license” to “Software as a Service” model, I found something else to use or I didn’t bother “upgrading” from the last iteration before it went SaaS. My Microsoft Office installation is the 2007 version — after that I used Open Office (and now LibreOffice) for anything Microsoft-related. Even working in the software business, I hated SaaS and I try as much as I can to avoid products distributed that way. Imagine how I feel about the expansion of that toxic idea to other areas of life, as Chris Bray discusses here:
Twenty-two years ago, the economist and social critic Jeremy Rifkin warned about the emerging commodification of human experience. Markets have always exchanged private property, he wrote, and people have grown accustomed to the act of holding it personally – that is, of owning things. But in a new “hypercapitalist” world, he warned, ownership would be concentrated in a few corporate hands, and most people would pay to access property, “in the form of short-term leases, rentals, memberships, and other service arrangements,” rather than owning it. Remember that description about leasing all of your stuff in a series of service arrangements, because you’ll be seeing it again in a minute or two.
The man was not wrong about the degree to which businesses would aspire to turn one-time sales of stuff into endless monthly purchases of a service:
And then comes the politics:
The shift from a propertied regime based on the idea of broadly distributed ownership to an access regime based on securing short-term limited use of assets controlled by networks of suppliers changes fundamentally our notions of how economic power is to be exercised in the years ahead. Because our political institutions and laws are steeped in market-based property relations, the shift from ownership to access also portends profound changes in the way we will govern ourselves in the new century.
And this, and look closely for the most important sentences — two of them, short and adjacent:
In a society where virtually everything is accessed, however, what happens to the personal pride, obligation, and commitment that go with ownership? And what of self-sufficiency? Being propertied goes hand in hand with being independent. Property is the means by which we gain a sense of personal autonomy in the world. When we access the means of our existence, we become far more reliant on others. While we become more connected and interdependent, do we risk at the same time becoming less self-sufficient and more vulnerable?
The shift in the structuring of human relationships from ownership to access appears to invite a trade-off of sorts whose outcome is far from certain. Will we liberate ourselves from our possessions, only to lose a sense of obligation to the things we fashion and use? Will we become more embedded in networks of relationships, only to become more dependent on powerful networks of corporate suppliers?
Property is autonomy. That was a warning about your own life: less autonomous, more dependent. And it was, specifically, a warning about corporate capitalism on the subscription model, and the social and political effects of a concentration of property in increasingly few hands. Hypercapitalism would be the new feudalism, a system of lords and serfs.
May 11, 2022
City governments that can’t even set a budget want to spend, spend, spend to fix global problems
It’s one of my standard quips that the more government tries to do, the less well it does everything, but Chris Bray‘s city government shows that I’m being far too Pollyanna-ish:
We’ve built political systems that are astoundingly disconnected; they go where they go, and you can’t turn them, or even try to communicate with them. I just spent weeks trying to get basic information about the operation of the criminal justice system in Los Angeles County, where I live — a problem I started writing about here. Just as I was getting really frustrated that I couldn’t get anyone in county government to tell me anything about anything, I saw an interview with Sheriff Alex Villanueva, who says that he’s never met our district attorney, and has only managed to speak to him on the phone once. Then a staff member in the office of our county supervisor finally responded to my repeated questions about local criminal justice statistics with a quick message letting me know that, as Supervisor Barger’s criminal justice staff assistant, she doesn’t have local criminal justice statistics. So, no, you’re probably not going to communicate with your government; it doesn’t even communicate with itself. The sheriff has never met the DA. That’s the world we’re living in.
I live in a tiny suburban city, a little over three square miles. As I’ve written before, the city is a relentless shambles, constantly fumbling its simplest tasks while holding city council meetings to offer bold pronouncements on the city’s direct role in managing the climate of the planet. We went the better part of the last fiscal year without a budget, because the fifth finance director in two years screwed up the budget proposal so badly that the council couldn’t vote on the worthless thing.
Cities are supposed to regularly adopt an updated general plan that makes educated guesses about business and residential growth, so they can prepare for change around questions like do we have enough fire stations for the population we expect to have in five years? Our current general plan was adopted in 1998; the city is now in its sixth year of a fumbling effort to write a new plan, with no sign that it’s moving toward success. Meanwhile, our small-town city council is focused on getting electric patrol cars for the police department — to control the climate of the planet — and banning the sale of tobacco products, to take the fight to Big Tobacco. (Three square miles.)
I can’t get my city government to fix a bunch of basic and obvious problems, in a city where I pass members of my city council in the supermarket. I send out email messages to them, but nothing comes back from them in response. They go where they feel like going, endlessly pursuing lawn sign politics in a city government that struggles to complete budgets and basic planning documents; currently they’re signaling that their next interest is in developing a local mandate for residential greywater systems, and they won’t be talked out of it in favor of completing their endlessly incomplete basic tasks.
Now: Put your hands on the levers to stop the madness of the United States of America sending tens of billions of dollars to Ukraine. Right?
May 6, 2022
QotD: “… the Spartiates were quite possibly the least productive people to ever exist”
Bret Devereaux, “Collections: This. Isn’t. Sparta. Part II: Spartan Equality”, A Collection of Unmitigated Pedantry, 2019-08-23.
May 5, 2022
Paul Wells reviews Davos Man by Peter S. Goodman
Paul Wells — now on Substack — considers an unusual-from-a-Canadian-perspective critical book on the World Economic Forum and the people who attend their exclusive shindigs in Davos, Switzerland:
I’ve been reading Peter S. Goodman’s Davos Man, a tough, angry — not entirely persuasive — critique of the sort of people who get top-level access to the World Economic Forum in Davos, Switzerland. Because Goodman’s vantage point is left-by-centre-left, his book provides fascinating counterpoint to a polemic about the WEF that is, in Canada, the almost exclusive preserve of the right.
[…]
Politicians who make a show of having a problem with Davos should explain what the problem is; why they didn’t raise their concerns when cabinet colleagues were lining up to go; and what solutions, if any, they propose. Otherwise they might seem to be faking their indignation to lure a few votes.
Second, it’s easy to see why Davos catastrophism has taken root in some corners of the electorate. We are coming off a COVID pandemic, after all. Very early, only weeks into this historic disaster, the WEF was quick to start discussing visions of a green egalitarian future with prominent roles for green progressive governments and Davos regulars. This was the “Great Reset”, which I discussed here in a magazine. Soon Trudeau was on video calls saying, “This pandemic has provided an opportunity for a reset. This is our chance to accelerate our pre-pandemic efforts to reimagine economic systems.” Which was jarring. Still is. Soon people were digging up old video of Klaus Schwab, the WEF founder, bragging about “penetrating the cabinets” of Western countries with “Young Global Leaders of the World Economic Forum”.
People who didn’t like everything that’s happened since — vaccines, lockdowns, restrictions — started reading great significance into all kinds of perceived Davos connections. Often Trudeau has seemed eager to help. Replacing his finance minister with the only member of his cabinet who sits on the WEF Board of Trustees, while yet again blathering on about how “we can choose to embrace bold new solutions to the challenges we face and refuse to be held back by old ways of thinking” was … loopy, sure, but it probably only accidentally resembled the second act of a Bond movie.
Bringing an element of novelty to all this is Peter S. Goodman, the Global Economics Correspondent of the New York Times. Even if he were Canadian, nobody should expect Goodman to support Poilievre for Conservative leader. Davos Man is a furious diatribe, not against the WEF as an institution but against many of Davos’s richest regulars — and it’s written from a consistently social-democratic perspective.
From its subtitle, “How the Billionaires Devoured the World”, Davos Man relentlessly skewers some of the most glamorous Davos habitués — Amazon gillionaire Jeff Bezos, Blackstone founder Stephen Schwarzman, BlackRock CEO Larry Fink, banker Jamie Dimon, Salesforce guy Marc Benioff. And their, you know, ilk.
“Over recent decades, the billionaire class has ransacked governments by shirking taxes, leaving societies deprived of the resources needed to combat trouble,” Goodman writes. Davos Man — Goodman has borrowed the term from Samuel Huntington — “is a rare and remarkable creature, a predator who attacks without restraint … expanding his territory and seizing the nourishment of others.” Goodman’s language is consistently violent. The billionaires “eviscerate financial regulations”, “defenestrated antitrust authorities”, “squashed the power of labor movements”.
May 4, 2022
Good intentions to rectify problems caused by earlier good intentions in Charleston, South Carolina
Everyone seems to agree that affordable housing is a major need across North America … it certainly is in the Toronto area! In South Carolina, local politicians are doing what they can to make legal changes to encourage more affordable residences to come to market … even when the problem is at least partly caused by earlier attempts to encourage more affordable housing to come to market:
“A converted carriage house, Tradd Street, Charleston, SC” by Spencer Means is licensed under CC BY-SA 2.0
The City of Charleston is considering new legislation that would deregulate accessory dwelling units in hopes of increasing the supply of affordable housing in the city. Also known as carriage houses or mother-in-law suites, accessory dwelling units are small structures that are built in the backyards of homes, and they can be a great source of affordable housing for those in need.
The initiative, which was proposed by Councilmember Ross Appel two weeks ago, would remove red tape that is currently presenting a significant barrier for building this kind of housing. The ironic part is that the regulation which is primarily to blame for stopping the creation of these units was passed specifically to make these units more accessible.
“The city is looking at taking away a rule that requires these buildings to be affordable for 30 years,” WCSC reports, “which, Appel says, has been an obstacle for developers and homeowners.”
“We don’t want people to be artificially limited in terms of what they can charge,” Appel said. “The affordability requirement was a good-intended measure, but actually, that’s been currently in effect for the past year and a half, and we haven’t had a single accessory dwelling unit permitted since that time.”
Put simply, the affordability requirement backfired big time. Its goal was to make new accessory dwelling units more affordable, but by restricting the price people could charge it actually made them so unprofitable that people just stopped building them altogether. For all practical purposes, new accessory dwelling units might as well have been banned.
The implications are not hard to tease out. With no new accessory dwelling units to live in, people have been forced to bid up other kinds of housing, which has no doubt contributed to soaring housing prices. This is why Appel is eager to repeal this rule. He knows that building more supply is the key to bringing prices down, and he knows that regulations like this have been getting in the way of that process.
There’s a maxim in economics that this story highlights: the solution to high prices is high prices. The reasoning goes as follows. When a good like housing becomes scarce, prices naturally rise. But as prices rise, producers see an opportunity for profit and begin expanding the supply. Then, as additional supply comes to market, prices begin to fall.
May 3, 2022
England’s class system, as documented by George Orwell and Theodore Dalrymple
I occasionally run into articles online that are clearly written to interest someone like me, and this one in Quillette by Laurie Wastell had my full attention from the title onward:
Ever since Marx, the concept of class has been foundational to sociology — as well as to almost everything else. This would not have surprised the German economist, for class, as he saw it, determines all: one’s motivations, one’s social position, even one’s consciousness. Britain, where Marx’s Capital was written, has long been known for its intricate class system, and as such is the source of much writing on the subject. Two of the most acerbic English social critics of the past century, George Orwell and Theodore Dalrymple, take class as a central subject. Drawing on firsthand experience (Orwell as a journalist, Dalrymple as a prison doctor and psychiatrist), both document in detail the suffering and privations of the class below them. Both also contend that a central cause of this poverty is the indifference of the middle and upper classes, a conclusion Marx would surely have agreed with. Yet, despite this, their work stands in flat contradiction to Marx’s central dogma that the material conditions of a society determine everything about it, including class. In their literary journalism, the authors’ social commentaries and insights into the human condition far surpass Marx’s “scientific” analysis.
[…]
That class is a function more of outlook than income was clear to Orwell, as he explains in his 1937 book The Road to Wigan Pier, which depicts both the privations of working-class life and the British class system as a whole. Orwell describes how the “lower-upper-middle-class” (Orwell’s own), generally professionals in the “Army, Navy, Church, Medicine [or] Law”, understood and aspired to all the many customs of the upper classes (hunting, servants, how to order dinner correctly) despite never being able to afford them. Thus, “To belong to this class when you were [only] at the £400 a year level was a queer business, for it meant that your gentility was almost purely theoretical.” This same dynamic applies today (though the bourgeois values aspired to now are quite different): a poor librarian is far less likely than a wealthy plumber to have voted for causes like Brexit or Trump, which are both populist and, thus, lower-class.
Themselves men of letters, both Orwell and Dalrymple understand that this class distinction is frequently signalled through language. “As for the technical jargon of the Communists,” writes Orwell, “it is as far removed from the common speech as the language of a mathematical textbook.” Such contorted academic prose means little to the ordinary worker, for whom, Orwell argues, Socialism simply means “justice and common decency”. Indeed, Orwell laments that “the worst advertisement for Socialism is its adherents” because of their distance from everyday concerns and inability to speak plainly. Summarising the problem, he quips: “The ordinary man may not flinch from a dictatorship of the proletariat, if you offer it tactfully; offer him a dictatorship of the prigs, and he gets ready to fight”.
A lifelong socialist, Orwell was repeatedly frustrated by the symptoms of this intellectual snobbery — why do the revolutionaries have such disdain for the ordinary punter? Dalrymple, meanwhile, in his essay “How — and How Not — to Love Mankind”, takes aim at its roots. Here, Dalrymple compares the life and work of Marx to his now lesser-known contemporary, Russian novelist and playwright Ivan Turgenev. Though their lives closely resembled one another’s, Dalrymple argues, “They nevertheless came to view human life and suffering in very different, indeed irreconcilable, ways — through different ends of the telescope, as it were. Turgenev saw human beings as individuals always endowed with consciousness, character, feelings, and moral strengths and weaknesses. Marx saw them always as snowflakes in an avalanche, as instances of general forces, as not yet fully human because utterly conditioned by their circumstances.”
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Both writers criticise intellectuals’ pretentious jargon, but it is worth pausing over how each relates his own social position to their subject matter. In a telling passage of Wigan Pier, Orwell describes the working man who has made it into the middle class, perhaps as a Labour MP or trade union official, as “one of the most desolating spectacles the world contains. He has been picked out to fight for his mates, and all it means to him is a soft job and a chance of ‘bettering’ himself. Not merely while but by fighting the bourgeoisie he becomes bourgeois himself.” The scare quotes reflect Orwell’s mixed feelings about social class: does Orwell not believe that a middle-class career — such as his own — is an improvement over the harsh, backbreaking labour of the miners he so vividly documents? He has hit on a deep dilemma, born of a compassionate humanism that points in contradictory directions.
Ostensibly, Orwell chronicles poverty in order to change it, to shock the comfortable hearts of his readers into action. Yet, at the same time, (romanticising the poor against his own advice), he presents the dirt as liberating: squalor and poverty are in some sense more authentic, more real than bourgeois comforts. Thus, as literary critic John Carey argues, Orwell’s “phobia about lower-class dirt collides head-on with his determination to invest dirt with political value, as the price of liberty.”
May 1, 2022
The Victorian-era “guarantee fund” model for risky enterprises
In the latest Age of Inventions newsletter, Anton Howes wonders why we don’t have a modern equivalent to the funding mechanism that helped create the Great Exhibition of 1851 and other events that provided benefits to the public without government backing:
The Crystal Palace from the northeast during the Great Exhibition of 1851.
Image from the 1852 book Dickinsons’ comprehensive pictures of the Great Exhibition of 1851 via Wikimedia Commons.
As I’ve mentioned before, exhibitions of industry were not just celebrations of technological progress, but could become engines for progress as well. For the inventors, artists, and engineers who exhibited, the events were a direct inducement to improvement. And for the public who visited, the events exposed them to what was possible, encouraging them to raise their demands as both consumers and citizens, ideally inspiring them to become future innovators too.
But how was it all paid for? Unlike its national-level precursors in France, the Great Exhibition was not a state-run event. Even more remarkably, its organisers also failed to raise anywhere near enough private subscriptions to cover their costs. Instead, they used something that called a “guarantee fund”.
Instead of asking for donations from supporters up-front, the organisers asked them to commit to covering the exhibitions potential losses up to certain amounts — to be paid only if the money was required. Based on the security provided by this crowdsourced guarantee fund, the organisers then raised an ordinary bank loan in order to get the cash they needed to actually hold the event. Crucially, the guarantors didn’t actually have to spend anything unless the event made a loss, and if the event broke even or even made a surplus thanks to ticket fees, then they would never spend a penny at all. (Luckily for them, that’s exactly what happened in 1851, and for many later exhibitions too.)
What’s interesting to me about the guarantee fund is that I can’t quite think of anything quite like it today. There are perhaps more individualised versions of it, like when a neighbour or friend acts as a guarantor for a mortgage. And governments sometimes provide guarantees for certain sectors or industries too. There have also been a few profit-making versions of it in certain industries, where the guarantors potentially get some share of the upside too (“Names” at the Lloyds of London insurance and reinsurance market sounds similar, though even these are disappearing). But I’ve not seen anything like what the Victorians did, essentially using a guarantee fund to leverage philanthropy.
This is surprising to me. It seems like it has a lot of major advantages, especially for those who might want to replicate the exhibitions of industry today, or indeed for any kind of capital-intensive philanthropic endeavour that could eventually be expected in some measure to pay for itself. (I can’t help but think it would be useful in efforts to speed up the de-carbonisation of the economy, for example — a potential application that I’ve been exploring in my conversations with the people at Carbon Upcycling.)
Consider that with a guarantee fund anyone able to afford the risk could considerably increase the philanthropic value of their assets. Say that you could afford to donate £100 right away, but could donate three times that amount at a pinch (e.g. by having to liquidate some funds in shares). You could thus guarantee £100 each to three different causes, potentially without ever actually having to donate it, and knowing that in the worst case scenario you would never have to spend more than the £300 you can afford.
After all, those signing up to the guarantee fund essentially chose what their maximum liability would be if the event were to make a loss. If they were confident in the event’s success, then they probably believed that they would not have to pay anything at all. And if not, they had at least named the maximum donation they might eventually be asked to give.
