Quotulatiousness

March 14, 2022

“Mister, we could use a man like Herbert Hoover Warren Harding again …”

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

Kind words for the oft-maligned 29th president of the United States? Daniel J. Mitchell is all over it:

Warren G. Harding, 14 June 1920.
Library of Congress control number 2016828156

Today, we’re going to celebrate the fiscal achievements of Warren Harding.

Most notably, as illustrated by this chart based on OMB data, he presided over a period of remarkable spending discipline.

Harding also launched very big — and very effective — reductions in tax rates.

And his agenda of less government and lower tax rates helped bring about a quick end to a massive economic downturn (unlike the big-government policies of Hoover and Roosevelt, which deepened and lengthened the Great Depression).

In an article for National Review last year, Kyle Smith praised President Harding’s economic stewardship.

    In a moment of national crisis, Warren G. Harding restored the economic health of the United States … America in 1921 was in a state of crisis, reeling from the worst recession in half a century, the most severe deflationary spiral on record … Unemployment, it is now estimated, stood somewhere between 8.7 and 11.7 percent as returning soldiers inflated the size of the working-age population.

    Between 1919 and August of 1921 the Dow Jones average plummeted 47 percent. Harding’s response to this emergency was largely to let the cycle play out … The recession ended in mid-year, and boom times followed. Harding and Congress cut federal spending nearly in half, from 6.5 percent of GDP to 3.5 percent. The top tax rate came down from 73 percent to 25, and the tax base broadened. Unemployment came down to an estimated 2 to 4 percent … Harding was a smashing success in a historically important role as the anti-Wilson: He restored a classically liberal, rights-focused, limited government, and deserves immense credit for the economic boom that kicked off in his first year and continued throughout the rest of the 1920s.

Smith’s article also praises Harding for reversing some of Woodrow Wilson’s most odious policies, such as racial discrimination and imprisoning political opponents (Wilson also had a terrible record on economic issues).

Of course, Harding’s term is much more often remembered for the scandals, and as most modern historians are far more interested in Woodrow Wilson’s bold progressivism they almost always decry Harding and then Coolidge for dismantling a lot of Wilson’s more enthusiastic progressive projects. Even H.L. Mencken — very much not a Wilson fan — found Harding to be not to his taste in turn:

On the question of the logical content of Dr. Harding’s harangue of last Friday, I do not presume to have views … But when it comes to the style of the great man’s discourse, I can speak with … somewhat more competence, for I have earned most of my livelihood for twenty years past by translating the bad English of a multitude of authors into measurably better English. Thus qualified professionally, I rise to pay my small tribute to Dr. Harding. Setting aside a college professor or two and half a dozen dipsomaniacal newspaper reporters, he takes the first place in my Valhalla of literati. That is, he writes the worst English that I have ever encountered. It reminds me of a string of wet sponges; it reminds me of tattered washing on the line; it reminds me of stale bean soup, of college yells, of dogs barking idiotically through endless nights. It is so bad that a sort of grandeur creeps into it. It drags itself out of the dark abysm … of pish, and crawls insanely up to the topmost pinnacle of posh. It is rumble and bumble. It is flap and doodle. It is balder and dash.

March 10, 2022

QotD: Orwell on Capitalism, Socialism, and Fascism

Filed under: Economics, Germany, History, Politics, Quotations, WW2 — Tags: , , , , — Nicholas @ 01:00

Socialism is usually defined as “common ownership of the means of production”. Crudely: the State, representing the whole nation, owns everything, and everyone is a State employee. This does not mean that people are stripped of private possessions such as clothes and furniture, but it does mean that all productive goods, such as land, mines, ships and machinery, are the property of the State. The State is the sole large-scale producer. It is not certain that Socialism is in all ways superior to capitalism, but it is certain that, unlike capitalism, it can solve the problems of production and consumption. At normal times a capitalist economy can never consume all that it produces, so that there is always a wasted surplus (wheat burned in furnaces, herrings dumped back into the sea, etc., etc.) and always unemployment. In time of war, on the other hand, it has difficulty in producing all that it needs, because nothing is produced unless someone sees his way to making a profit out of it. In a Socialist economy these problems do not exist. The State simply calculates what goods will be needed and does its best to produce them. Production is only limited by the amount of labour and raw materials. Money, for internal purposes, ceases to be a mysterious all-powerful thing and becomes a sort of coupon or ration-ticket, issued in sufficient quantities to buy up such consumption goods as may be available at the moment.

However, it has become clear in the last few years that “common ownership of the means of production” is not in itself a sufficient definition of Socialism. One must also add the following: approximate equality of incomes (it need be no more than approximate), political democracy, and abolition of all hereditary privilege, especially in education. These are simply the necessary safeguards against the reappearance of a class-system. Centralized ownership has very little meaning unless the mass of the people are living roughly upon an equal level, and have some kind of control over the government. “The State” may come to mean no more than a self-elected political party, and oligarchy and privilege can return, based on power rather than on money.

But what then is Fascism?

Fascism, at any rate the German version, is a form of capitalism that borrows from Socialism just such features as will make it efficient for war purposes. Internally, Germany has a good deal in common with a Socialist state. Ownership has never been abolished, there are still capitalists and workers, and – this is the important point, and the real reason why rich men all over the world tend to sympathize with Fascism – generally speaking the same people are capitalists and the same people workers as before the Nazi revolution. But at the same time the State, which is simply the Nazi Party, is in control of everything. It controls investment, raw materials, rates of interest, working hours, wages. The factory owner still owns his factory, but he is for practical purposes reduced to the status of a manager. Everyone is in effect a State employee, though the salaries vary very greatly. The mere efficiency of such a system, the elimination of waste and obstruction, is obvious. In seven years it has built up the most powerful war machine the world has ever seen.

But the idea underlying Fascism is irreconcilably different from that which underlies Socialism. Socialism aims, ultimately, at a world-state of free and equal human beings. It takes the equality of human rights for granted. Nazism assumes just the opposite. The driving force behind the Nazi movement is the belief in human inequality, the superiority of Germans to all other races, the right of Germany to rule the world. Outside the German Reich it does not recognize any obligations. Eminent Nazi professors have “proved” over and over again that only Nordic man is fully human, have even mooted the idea that non-Nordic peoples (such as ourselves) can interbreed with gorillas! Therefore, while a species of war-Socialism exists within the German state, its attitude towards conquered nations is frankly that of an exploiter. The function of the Czechs, Poles, French, etc., is simply to produce such goods as Germany may need, and get in return just as little as will keep them from open rebellion. If we are conquered, our job will probably be to manufacture weapons for Hitler’s forthcoming wars with Russia and America. The Nazis aim, in effect, at setting up a kind of caste system, with four main castes corresponding rather closely to those of the Hindu religion. At the top comes the Nazi party, second come the mass of the German people, third come the conquered European populations. Fourth and last are to come the coloured peoples, the “semi-apes” as Hitler calls them, who are to be reduced quite openly to slavery.

However horrible this system may seem to us, it works. It works because it is a planned system geared to a definite purpose, world-conquest, and not allowing any private interest, either of capitalist or worker, to stand in its way. British capitalism does not work, because it is a competitive system in which private profit is and must be the main objective. It is a system in which all the forces are pulling in opposite directions and the interests of the individual are as often as not totally opposed to those of the State.

George Orwell, “The Lion And The Unicorn: Socialism and the English Genius”, 1941-02-19.

March 7, 2022

QotD: Historical fiction and fantasy works usually leave out the vast majority of the people who did all the work

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

… there is a tendency when popular culture represents the past to erase not merely the farmers, but most of the commons generally. Castles seem to be filled with a few servants, a whole bunch of knights and lords and perhaps, if we are lucky, a single blacksmith that somehow makes all of their tools.

But the actual human landscape of the pre-modern period was defined – in agrarian societies, at least – by vast numbers of farms and farmers. Their work proceeded on this cyclical basis, from plowing to sowing to weeding to harvesting and threshing to storage and then back again. Religious observances and social festivals were in turn organized around that calendar (it is not an accident how many Holy Days and big festivals seem to cluster around the harvest season in late Autumn/early Winter, or in Spring). The uneven labor demands of this cycle (intense in plowing and reaping, but easier in between) in turn also provided for the background hum of much early urban life, where the “cities” were for the most part just large towns surrounded by farmland (where often the folks living in the cities might work farmland just outside of the gates). People looked forward to festivals and events organized along the agricultural calendar, to the opportunities a good harvest might provide them to do things like get married or expand their farms. The human drama that defines our lives was no less real for the men and women who toiled in the fields or the farmhouses.

And of course all of this activity was necessary to support literally any other kind of activity.

Bret Devereaux, “Collections: Bread, How Did They Make It? Part III: Actually Farming”, A Collection of Unmitigated Pedantry, 2020-08-06.

March 2, 2022

QotD: George Orwell was a dedicated socialist

Filed under: Britain, Economics, History, Quotations, WW2 — Tags: , , — Nicholas @ 01:00

I began this book to the tune of German bombs, and I begin this second chapter in the added racket of the barrage. The yellow gun-flashes are lighting the sky, the splinters are rattling on the house-tops, and London Bridge is falling down, falling down, falling down. Anyone able to read a map knows that we are in deadly danger. I do not mean that we are beaten or need be beaten. Almost certainly the outcome depends on our own will. But at this moment we are in the soup, full fathom five, and we have been brought there by follies which we are still committing and which will drown us altogether if we do not mend our ways quickly.

What this war has demonstrated is that private capitalism – that is, an economic system in which land, factories, mines and transport are owned privately and operated solely for profit – does not work. It cannot deliver the goods. This fact had been known to millions of people for years past, but nothing ever came of it, because there was no real urge from below to alter the system, and those at the top had trained themselves to be impenetrably stupid on just this point. Argument and propaganda got one nowhere. The lords of property simply sat on their bottoms and proclaimed that all was for the best. Hitler’s conquest of Europe, however, was a physical debunking of capitalism. War, for all its evil, is at any rate an unanswerable test of strength, like a try-your-grip machine. Great strength returns the penny, and there is no way of faking the result.

When the nautical screw was first invented, there was a controversy that lasted for years as to whether screw-steamers or paddle-steamers were better. The paddle-steamers, like all obsolete things, had their champions, who supported them by ingenious arguments. Finally, however, a distinguished admiral tied a screw-steamer and a paddle-steamer of equal horsepower stern to stern and set their engines running. That settled the question once and for all. And it was something similar that happened on the fields of Norway and of Flanders. Once and for all it was proved that a planned economy is stronger than a planless one.

George Orwell, “The Lion And The Unicorn: Socialism and the English Genius”, 1941-02-19.

March 1, 2022

Genocide in Ukraine: The Holodomor | Into Context | War in Ukraine 01

Filed under: Economics, History, Russia — Tags: , , , , , — Nicholas @ 06:00

TimeGhost History
Published 28 Feb 2022

What do you get when you combine vigorous grain-tax policies, bad harvests with Stalin’s fear and animosity for the rural population of Ukraine? A man-created murder famine, designed to kill millions of Ukrainian men, women and children.
(more…)

February 28, 2022

QotD: Passengers versus freight in railway efficiency terms

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

First, consider the last time you were on a passenger train. Add up the weight of all the folks in your car. Do you think they weighed more or less than the car itself? Unless you were packed into a subway train with Japanese sumo wrestlers, the answer is that the weight of the car dwarfs that of the passengers it is carrying. The average Amtrak passenger car apparently weighs about 65 tons (my guess is a high speed rail car weighs more). The capacity of a coach is 70-80 passengers, which at an average adult weight of 140 pounds yields a maximum passenger weight per car of 5.6 tons. This means that just 8% of the fuel in a passenger train is being used to move people — the rest goes into moving the train itself.

Now consider a freight train. The typical car weighs 25-30 tons empty and can carry between 70 and 120 tons of cargo. This means that 70-80% of the fuel in a freight train is being used to move the cargo.

Now you have to take me on faith on one statement — it is really hard, in fact close to impossible, to optimize a rail system for both passengers and freight. In the extreme of high speed rail, passenger trains required separate dedicated tracks. Most rail systems, even when they serve both sorts of traffic, generally prioritize one or the other. So, if you wanted to save energy and had to pick, which would you choose — focusing on freight or focusing on passengers? Oh and by the way, if you want to make it more personal, throw in a consideration of which you would rather have next to you on crowded roads, another car or another freight truck?

This is why the supposedly-green folks’ denigrating of US rail is so crazy to me. The US rails system makes at least as much sense as the European system, even before you consider that it was mostly privately funded and runs without the subsidies that are necessary to keep European rail running. Yes, as an American tourist travelling in Europe, the European rails system is great. Agreed. I use it every time I go there. I have to assume that this elite tourist experience must be part of why folks ignore the basic science here.

Warren Meyer, “A Reminder: Why the US Rail System Is At Least as Good As the European System if You Care About Energy Use”, Coyote Blog, 2018-05-25.

February 16, 2022

Germany’s dual economy during WW2 (and why Himmler would have succeeded Hitler if the Nazis had won WW2)

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

At Founding Questions, Severian looks at the way the Nazi economy was actually two entities — the “wartime” economy and the effectively separate SS economy under the control of Heinrich Himmler:

Reichsführer SS Heinrich Himmler, 1938.
German Federa Archive via Wikimedia Commons.

Here’s where the Nazis really blew it. “Nazism” should really be called “Hitlerism”, as it was a true cult of personality; there was no ideology without the specific individual man. That’s the tension at the heart of any collectivist ideology — somebody’s got to be The Boss, however temporarily — but Nazi Germany suffered it worse than most. Had the Nazis won the war, the bloodbath at the top would’ve been as spectacular per capita as the war itself. As thoroughgoing Social Darwinists, they only had one possible principle of succession …

Let’s provisionally call that the first consequence of an ideology in power: The personal is the political and vice versa. That seems trite, I realize, but I’m putting it here to emphasize its literalness – in an ideological state, building your own “affinity”, Bastard Feudalism-style, just IS politics. There’s no other possible political activity. And as much as the Nazis seemed to have screwed it up by going all in on the Fuhrerprinzip at the very top, their out-and-proud Organizational Darwinism (for lack of a better term) made them super-efficient at the lower levels.

Let’s bring Khrushchev back in. In many ways, he’s the Soviet Himmler. He was one of Stalin’s right hand men throughout the war, but somehow didn’t get tagged as a major player in the succession crisis until it was too late for all the other contenders for the purple to take effective countermeasures. In the same way, Hitler did announce a successor, sort of. In fact he did it twice: Before the war, it was Rudolf Hess; during the war, Hermann Goering. Neither of those guys had anything approaching the power Himmler had, but like Khrushchev, his personality was such that the other bigshots couldn’t help overlooking him. Just as the rest of the Politburo couldn’t wrap their heads around the idea of this uncouth quasi-Ukrainian peasant being a major threat, so the rest of the Nazi leaders couldn’t help seeing Himmler as this fussy little file clerk.

It’s a hell of a trick, and I’ll admit, I’m buffaloed. Even if Himmler (Khrushchev) was one hell of an actor, and the egos on the other top Nazis (Soviets) were gravity-defying, they still should’ve been able to see that this fussy little file clerk had some seriously hard boys working for him. Reinhard Heydrich was as ruthless a fuck as was ever born, and Himmler kept him in check. Ditto barbarians like Odilo Globocnik and Erich von dem Bach-Zelewski — they don’t come any nastier than those two, yet Himmler managed them easily. What other conclusion can you possibly draw about Himmler, other than that he was nastier than all of them put together? And yet, apparently, nobody did …

The only explanation for this that I can think of is the Nazis’ ideologization of governmental structures. As opposed to the Soviet experience, where the Party and the Bureaucracy were supposed to be, and often actually were, distinct. After some disastrous experiments with demoting technical experts to field hands, and vice versa, the Russian Communists learned that ideological correctness and “soviet power” does not, in fact, obviate the need for stuff like math. (See also: Mao’s backyard blast furnaces). So the Soviets made sure to separate what they called the “technical intelligentsia” from the Party. The head honcho at Gosplan, Gossnab, etc. would be a Party hack from way back, of course, but the actual brainworkers wouldn’t be. I don’t know just how many of them had Party membership cards, or if any of them did, but nobody I know of rose through the Party’s ranks via Gosplan.

Once a Gosplanner, always a Gosplanner. The technical intelligentsia got all kinds of perks in the Soviet system, but one thing they did not do was get perks inside the Party. You can be a technical expert, or you can be an up-and-coming Party man, but you can’t be both.

The Nazis did the exact opposite of that. The way the Third Reich actually functioned is still opaque in a lot of ways (especially to non-specialists), and of course the pressures of wartime forced a lot of ad hoc measures, but it seems like the SS was supposed to be a sort of All-Purpose Expert Corps. Not only did they have their own army and intelligence service, but they had their own economy — the brief history of the Third Reich makes a lot more sense when you realize that half or more of the official Reich economy was hamstrung by the informal but very real SS economy, operating largely (but far from exclusively) through the labor camps.

Indeed, the SS had their own administration. As incredible as it seems, the Nazis had no grand plan for what to do once they’d conquered Europe. Himmler did, at least as far as the East was concerned, and he tried his damnedest to put it into action in Poland (which is why the General Government was so legendarily brutal). Hitler apparently thought in terms of Germany’s lost late 19th century colonies, when he bothered to think about it at all … which wasn’t often. In his typical Fuhrer-riffic style, he just ignored the problem, trusting to Organizational Darwinism to sort it out …

… which is where the All-Purpose Experts of the SS stepped in. The General Government, for instance, was headed by a civilian lawyer, Hans Frank, but the day to day governance largely fell to the SS, because that’s who stepped up. Poland was an occupied zone, with vital war industries, but it was far behind the front for most of the war; the army couldn’t waste vital manpower garrisoning it. Thus the SSPF (the SS and Police Leader) stepped in, drawing manpower as needed from a wide variety of sources — the camp guards, the Wehrmacht (when garrison troops were available, and when they could wrangle them from the various army commanders), the civilian police, the “General SS”, and so on.

The details aren’t nearly as important as the big picture, which is: Unlike the technical intelligentsia in the Soviet Union, members of the SS could climb to the highest ranks of the Party. Indeed they were expected to: the SS was rapidly becoming a Party-within-the-Party at the outbreak of the war, not least because Himmler awarded a “ceremonial” SS rank to anyone who mattered politically in the various departments. The savvier guys refused the “honor,” of course, because they didn’t want to be subordinate to Himmler, even ceremonially, but many didn’t. Which meant that had the Nazis won the war, not only would Himmler have been the next Fuhrer, but the SS would’ve closed ranks, essentially taking over The Party — they’d be the Inner Party, as opposed to the “mere Nazis” of the Outer Party.

February 13, 2022

QotD: Marx’s labour theory of value gets tenure

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

According to the Collge Fix, labor-based grading “involves assigning grades based on the ‘labor’ students put into their assignments, rather than the grammar, style and quality of their work.”

At last, we know the answer to the question almost no one was asking: What happens when Karl Marx’s labor theory of value gets tenure?

The labor theory of value is very popular on the Left, probably because it makes no sense. Marx — who never labored once in his entire life — proposed that “labor” has inherent value, that “if we disregard the use-value of commodities, they have only one property left, that of being products of labor.”

I assure you it sounds even stupider in the original German.

The short version is that “labor” determines a product’s value, not the competitive marketplace.

It’s a crackpot theory, easily demolished.

Take the example of a skilled pastry chef and … me.

Give a few dollars worth of flour, sugar, butter, etc., to that chef and after a couple of hours of his labors, he can sell you a gorgeous and tasty cake that you would be happy to pay a lot of money to buy.

I don’t bake and have no interest in baking. Let me labor on those same ingredients for the same two hours, and you’ll get a hot mess worth less than the value of the ingredients that went into it.

(Apologies: This is not my example, but I can’t find an online resource listing the original author. [I first encountered this in a Robert Heinlein novel, but he may have been paraphrasing someone else])

It’s not the “labor,” it’s the results.

Now we’re supposed to apply this same thinking to grading English papers.

We’re supposed to accept that one student’s craptaculently-written essay has the same value as another student’s beautifully written paper because they both put the same amount of labor into writing them.

What Inoue wants college instructors to do is apply crackpot Marxist theory to those who will be disadvantaged the most if they aren’t taught proper English.

Stephen Green, “Fight ‘White Language Supremacy,’ Prof Will Grade on ‘Labor’ Not Results”, Vodkapundity, 2021-11-10.

February 9, 2022

QotD: Paper or plastic?

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

In his Nobel Lecture, The Pretence of Knowledge, Friedrich Hayek told us that it was never going to be possible to centrally plan an economy for economies are big, complex, even chaotic, things. That centre can never gain enough information in real time to be able to make decisions which bear much relation to reality. We can also run his logic backwards, if we do insist upon planning then we can only have a simple economy – all the knowledge we have allows us to plan – and simple economies are poor ones with poor people in them. Planning and poverty or market chaos and wealth: take your pick.

This point is illustrated in microcosm by those trying to get rid of single use plastic bags. The 5p charge for plastic bags has meant the sale of billions of so-called bags for life, which use twice as much plastic as the cheaper alternative. All those bags for life mean we use more plastic than we started with and even, possibly, more bags themselves. This was something that was warned about before the plastic bag charge was introduced, with some observing that even “single use” bags did tend to get used more than once.

So far, then, we have learnt that the planning deployed to reduce plastic has had the opposite effect. That, however, has not stopped the central planners from redoubling their efforts. The necessary charge for a bag is to double, the system is to be expanded to the tens of thousands of small shops that don’t currently have to charge. “It doesn’t work, let’s have more of it”, the cry of bureaucracies through the ages.

But this is the blending of government planning with the fashionable nostrums of our day so of course it gets worse. It’s not even true that the bags for life – and especially not the cotton ones, even less so the organic cotton – are more environmentally friendly than the single use ones. Even recycled ones use more resources than single-use ones – for yes, recycling is an industrial activity using energy and other resources.

We can even construct a little spectrum here. How many times do we need to reuse a bag for it to have as little resource use – and thus environmental effect – as just the one use of those thin single use plastic ones? Obviously enough, the single use that we’re told not to use has a value of one here. The bag for life must be reused 35 times. A bag for life from recycled plastic 84 times. A paper bag must be reused 43 times – yes, paper. A cotton bag 7,100 times and an organic cotton? 20,000.

Which is the environmentally friendly option here? Clearly and obviously the one that everyone insists we must not use. So much for fashionable nostrums then.

Tim Worstall, “Plastic bags and the problem with central planning”, CapX, 2019-01-02.

January 30, 2022

“I stand corrected. All retail sucks, not just book retail”

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

Following up to the issue of book store-to-publisher returns last week (here), Kenneth Whyte discovered that other retailers are not that different from the book business after all:

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

Last week I wrote about the horrible, wasteful publishing-wide policy of booksellers returning unsold books for full refunds rather than putting them on sale. Some 30 percent of books in stores are sent back to publishers who bury, pulp, or remainder them. I compared this practice to other retail sectors:

    If I were in the ugly sweater business, I’d sell 500 ugly sweaters to Saks at $200-a-piece. Saks pays me 500x$200=$100,000, marks the ugly sweaters up to $500, and lays them out on tidy glass shelves under track lighting. Whatever is left after the Christmas season is marked down to half price on crowded sales racks. If Saks still has some ugly sweaters in January, it will ship them to the outlet store where they’re offered at still greater discounts.

Our friend, author and regular SHuSH reader Ken McGoogan, sent my comments to a mature student he teaches. She comes from the fashion industry and says it’s not so simple:

    The reality is, if Saks cannot sell that ugly sweater, they will ask for mark-down money from the brand (the wholesaler) who sold them that ugly sweater. If the brand is not willing to give Saks that mark-down money, they will never carry anything from the brand again. Is mark-down money better than returns? Honestly, it’s not that much better. The amount of the mark-down money is an often shocking figure. And this is not just for Saks, all big retailers do it, without exception.

    Barnes & Noble or Chapters are just like department stores. The business model is the same. The only thing is, if the readers found out how much waste the book returns are generating every year, it’ll be a big turn off for the customers. They’d rather force themselves to read e-books or audio books than be part of the wasteful culture. Especially for the younger generation, they are buying less garments because of the fashion industry’s wasteful level. Fyi, a lot of new clothes and unsold inventories are burned every year as they are running out of storage spaces.

I stand corrected. All retail sucks, not just book retail. And the book industry had better sort this out before the aforementioned younger generation begins to focus on it.

January 25, 2022

The fantasy of a modern economy without money

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

Jon Hersey and Thomas Walker-Werth consider the claim that we’d all be better off without money in a truly modern, egalitarian society:

Capitalism, to the extent it has existed, has been incredibly successful at lifting most of humanity out of poverty, incentivizing the creation of incredible, life-enhancing technologies, such as those Maezawa used to make his fortune — not to mention, travel to space. But it’s long had its critics, and he is far from the first to propose a sort of Garden-of-Eden world where everything is plentiful and free. Karl Marx envisioned a similar utopia. Communism, he said, ultimately would bring about a world without money:

    In the case of socialised production the money-capital is eliminated. Society distributes labour-power and means of production to the different branches of production. The producers may, for all it matters, receive paper vouchers entitling them to withdraw from the social supplies of consumer goods a quantity corresponding to their labour-time. These vouchers are not money. They do not circulate.

And although “society distributes labour-power” — meaning government planners tell people what to do to ensure that things (such as “free” Ferraris) get made — workers could also all pursue whatever hobbies or occupations strike their fancy. “[I]n communist society,” Marx explained,

    where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, to fish in the afternoon, rear cattle in the evening, criticize after dinner, just as I have in mind, without ever becoming hunter, fisherman, shepherd or critic.

[…]

Although Marx considered himself a social scientist and economist — and although his ideas are still some of the most widely taught — they aren’t much taught in social science or economics departments, except as foils. That’s because virtually all of Marx’s hypotheses have been debunked. For one, who’s going to build the free Ferraris that Maezawa has dreamed up, never mind tackle more mundane tasks, with no incentive? But for those who don’t find such commonsense thought experiments convincing — or who think, as Marx did, that human nature will somehow mysteriously change — the impracticality of Marx’s moneyless state was demonstrated by what Austrian economists have come to call the calculation problem. Ludwig von Mises once explained the problem as follows:

    If a hydroelectric power station is to be built, one must know whether or not this is the most economical way to produce the energy needed. How can he know this if he cannot calculate costs and output?

    We may admit that in its initial period a socialist regime could to some extent rely upon the experience of the preceding age of capitalism. But what is to be done later, as conditions change more and more? Of what use could the prices of 1900 be for the director in 1949? And what use can the director in 1980 derive from the knowledge of the prices of 1949?

    The paradox of “planning” is that it cannot plan, because of the absence of economic calculation. What is called a planned economy is no economy at all. It is just a system of groping about in the dark.

In short, without prices, people have no relatable, quantifiable means of comparing and contrasting options about how to spend time and capital, which is vital for determining how best to use these naturally scarce resources. “New Scientist magazine reported that in the future, cars could be powered by hazelnuts,” said comedian Jimmy Fallon, in a skit that captures this point hilariously. “That’s encouraging, considering an eight-ounce jar of hazelnuts costs about nine dollars. Yeah, I’ve got an idea for a car that runs on bald eagle heads and Fabergé eggs.”

January 23, 2022

The oddity of the bookselling business

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

Unlike so many other retail operations, book stores have a different sales cycle because they can generally return unsold books (in good condition) to the publisher for a full refund. This means that 30% or more of the books on the shelf at Christmas will be shipped back to the publisher early in the new year, only to appear again on the discount shelves a year or two later for a fraction of the original retail price (and often in rather worse shape for all the additional handling). In the latest SHuSH newsletter, Kennethy Whyte calls this the worst problem in book publishing:

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

Book publishing doesn’t work like most other retail businesses. If I were in the ugly sweater business, I’d sell 500 ugly sweaters to Saks at $200-a-piece. Saks pays me 500x$200=$100,000, marks the ugly sweaters up to $500, and lays them out on tidy glass shelves under track lighting. Whatever is left after the Christmas season is marked down to half price on crowded sales racks. If Saks still has some ugly sweaters in January, it will ship them to the outlet store where they’re offered at still greater discounts.

What happens to them if they don’t sell at the outlet doesn’t interest me because I’ve got my $100,000. If Saks ordered far too many ugly sweaters, that’s Saks’ problem.

In the book world, I sell 1,000 copies of a book to a retail chain like Barnes & Indigo for $15-a-piece, half the retail price. Barnes & Indigo pays me 1,000x$15=$15,000 and maybe puts some of the books on a front table, or maybe buries them on a bottom shelf in the darkest corner of the store. I might sell a two hundred, four hundred, or six hundred copies.

Let’s be generous and say 600 sell at Barnes & Indigo through the autumn and over the holidays. Come January, the store doesn’t put the remaining stock on sale: it packs up the unsold 400 and ships them back to me for a full refund. The 400 returns, or at least those of them that aren’t crumpled or coffee-stained, go back into the warehouse, which charges me fees to process the returns and more fees to store them. Sometime later, I get a notice of the returns and regret that extra glass of wine I ordered at dinner the night I thought I sold Barnes & Indigo $15,000 worth of books when, in fact, I only sold $9,000 worth of books, perhaps leaving me under-water on that particular title. I also regret boasting of the $15,000 sale to the author, who probably did some royalty math in his head and thought he was getting 40% more than he’ll actually receive.

Returns at publishing houses run somewhere between 25% and 30% annually, across all titles. That’s despite Amazon with its ruthlessly efficient algorithms seldom buying many more copies than it needs, and despite ebooks and audiobooks (which amount to a quarter of sales for many publishers) having almost zero returns.

Millions of books are returned to publishers at this time of year. Sales are slower in January and February, so bookstores hurriedly return all their remaining holiday-season stock and whatever else hasn’t moved to keep themselves in cash. Some of the returns go back into storage. Eventually, most are remaindered, or pulped, or buried. It’s a colossal waste of paper and ink, a headache in terms of shipping/handling/accounting, and dispiriting as heck. You might think you had a great year, hit all your sales targets, exceeded them, even, and then in about the third week of January begins the drip drip drip of returns, and it continues steadily through March. That’s if you’re lucky and it’s drips, not waves. And while the returns are concentrated in the first quarter, your books are returnable year-round, so even a pleasant summer afternoon can be ruined by the unexpected arrival of a pallet of unwanted stock.

January 18, 2022

Decadence

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

In the latest Libertarian Enterprise, Sarah Hoyt considers the old Soviet put-down of all of western culture (especially the American one) … that it was decadent:

“The Consummation of Empire” from the painting series “The Course of Empire” by Thomas Cole (1801-1848).
New York HIstorical Society collection via Wikimedia Commons.

Yes, sure. I hear any number of you gnashing your teeth on that side of the screen: the soft living, the snowflakery in — mostly — our universities, the demands that everyone cater to them, people being completely terrified of a bad cold. Oh, yeah, rampant crime and bad sexual morals. We’re OBVIOUSLY decadent. How can I make fun of it?

Very easily.

For one your gnashing of teeth rhymes eerily with Romans gnashing of teeth for millennia, long before Rome was anywhere near ripe to fall, and in fact while Rome was the bad ass of the world. Second, it echoes even more eerily all of the Christian explanations of why Rome fell, which curiously also echoed the Christian beliefs in the loss of paradise.

“Decadence is sinfulness, and then comes the end and only G-d can save you” is the narrative there. Which is fine, in a spiritual sense, and completely bonkers insane when it applies to cultures and history. But it served the nascent theocracy that replaced Rome quite well. One of the things it served was to explain why life was now much, much harder. Because you know, abundance is what leads to decadence. Life is too soft, you don’t work hard enough and … bam! suddenly you’re in the middle of an orgy or worshiping a goat or something. Never you mind that the Romans pretty much did that all along, even when they were the badasses of the world. It’s really easy to shape the history of a fallen civilization so it suits the purposes of its successor.

Which brings us to the fact that Communism is a Christian heresy, complete with paradise — the supposed egalitarian and property-free pre-history (it’s also really easy to shape a period that left no account of itself that we can find) — until greed — and in one version PATRIARCHY and in another “whiteness” WTF that means — kicked us out of it. Now we must force the perfect human (Homo Sovieticus!) to emerge, so we can go back to living in caves in (sing it) perfect harmony. (Yeah.)

The complaints of decadence I heard as a young woman were mostly Soviet Agit Prop. Yes, yours were too. They ranged from incoherent to frigging insane. Some of it was a very old rhyming chorus: Americans were decadent because they were too rich. They had too many choices. They were too immoral. They never had enough, and would commit crimes to be richer. They ate too much, drove too much, slept in too comfortable a bed, and in general were DECADENT. Just like Rome before it fell. (If you realize the actual structure of Imperial Rome was closer to the Soviet Union’s, a plunder culture that could only survive by stealing, the whole thing will take your breath away with its chutzpah.

The fact that our (even though at the time it was your, as I was a foreigner at least in some ways) entertainment and art echoed these crazy accusations only made the whole thing stick, so even the right, American loving side (which anyway always has a vast side of puritanism in America. And speaking of puritans, let’s talk about what some of them did to … turkeys? If weird sexual kinks are a sign of decadence, we’ve never been non-decadent) bought into it. I mean Spartacus (the novel) portrait of the decadence of Rome was meant to echo how bad America was. What’s that I hear? The author was a communist? You. Don’t. Say. I think I sent my shocked face out to be mended, but I won’t be a sec while I retrieve it.

In a more personal sense, my own family told me Portugal too was decadent. Why, unlike mom, I didn’t have to walk beside the train line to pick up enough coal for the family to cook. We had butane bottles delivered, even if they were super expensive, so we often cooked on a petrol lamp in the patio, if the weather was fine.

Decadent and soft living, I tell you. Sure, the bathroom was outside, but it was a bathroom, with running water included. JUST like Rome before the fall. How much longer till we started screwing Nightingales’ Tongues, eating Bear Sausages and electing horses to congress (I think in America we’ve been doing that all along, too. Though I’d prefer if every now and then we elected the front half of the horse.)

January 16, 2022

QotD: Once “discovered”, colonization of the Americas was inevitable

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

Another major structural issue is this: what precisely would our pious anthropology professors have had Europeans do with the New World once they found it?

This is not a joke. Political reality has a way of crashing in on the pipe dreams of liberal academics. The reality is, if the English had not colonised, then the French or the Dutch would have. If the Spanish had not colonised, the Portuguese would have. This would have shifted the balance of power at home, and any European country which had not colonised, would have been relegated to secondary status. And it is easy to overestimate the amount of control that European governments actually had. As soon as the New World was discovered, many fisherman and traders sailed across the Atlantic on their own, in hopes of circumventing tax authorities and scoring a fortune. Long before colonies were established in most regions, the New World was crawling with Europeans whose superior technology gave them an edge in combat. Nonetheless, it was extremely dangerous for Europeans to provoke fights with Native Americans, and most of them tried to avoid this when possible. In retrospect, one could in theory be impressed that so many European governments showed a genuine concern to rein in the worst excesses of their subjects, with an express eye to protecting the Indians from depredation. The logic was simple: they attempted to protect their subjects at home, in order to secure good order and a better tax base. So they would do the same to their subjects in the New World. For a long time, few Europeans harboured any master plan of pushing the Native Americans out of their own lands. In more densely populated regions such as Mexico, such an idea must have seemed an absurdity. Reality tends to occur ad hoc. Boundaries often took generations to move, and would have seemed fixed at the time. For several centuries, many Europeans assumed that they would long be a minority on the North American continent. In Mexico and Peru, they always have been.

Population density mattered, a lot, when it came to pre-modern global migrations. China and India were “safe” from excessive European colonisation because they had the densest populations in the world, and they were likewise largely immune to any diseases brought by Europeans. SubSaharan Africa had a lower population density depleted by slave raiding, but they still outnumbered European colonists by a large margin throughout the colonial era — again because European contact did not decimate their numbers through disease the way it did in the Americas. It is worth noting that no one claims that Europeans committed genocide in India, Asia or even Africa, although their technological advantages gave them every opportunity had they actually been of a genocidal mindset (as were for example the Mongols). In fact, the European track record shows them to be almost shockingly un-genocidal, given their clear technological advantages over the rest of the world for a period of several centuries. Few other civilisations, given similar power over so much of the world’s people, would have behaved in a less reprehensible manner. This is not to give Europeans a pat on the back. Rather it is to point out that Europeans are regularly painted as the very worst society on Earth, when in fact they had the power to do far, far more evil than they actually did. Let us at least acknowledge this fact.

Jeff Fynn-Paul, “The myth of the ‘stolen century'”, Spectator Magazine, 2020-09-26.

January 15, 2022

The futility of “ethical” divestment agitation

Filed under: Business, Cancon, Economics, Education, Environment — Tags: , , , — Nicholas @ 05:00

In C2C Journal, William McNally explains why activists are demanding that university investments be moved away from fossil fuel companies in favour of “green” investment, and why it won’t work the way they expect:

A recent press release announced that 100 faculty and other staff at three Ontario postsecondary institutions have petitioned the University Pension Plan (UPP) to divest from the fossil fuel sector. The UPP manages the pension funds for over 30,000 employees at the University of Toronto, Queen’s and Guelph. The press release was issued by Shift Action, an organization that helps activist pension members agitate for divestment from what it calls “high-carbon, high-risk fossil fuel investments” such as oil producers and pipeline companies, and shift investments to a “decarbonized” portfolio focused on climate solutions.

I highlighted the UPP petition to draw attention to its activist source, but it is not unique, as it reflects a broader trend of politically driven or, as proponents prefer, “ethical” investing. The motivating claim for divestment in the Shift press release is that we are experiencing a “worsening climate crisis”. That too is a common sentiment nowadays. Because it is a crisis, we have a moral duty to mitigate the threat. The underlying reasoning is that divestment will starve fossil fuel companies of capital and less capital means less production which, in turn, means less CO2 emitted and ultimately slower climate change.

All campaigns of this sort trigger some immediate questions, such as, why choose a strategy as indirect as divestment? Why not reduce fossil fuel use in one’s own backyard, in this case the universities? Looking more broadly, Shift’s argument is more wishful thinking than sound economic analysis. Investors should feel free to hold any portfolio they want, but they should do so without illusions. In particular, they shouldn’t expect divestment to influence climate change by starving oil and natural gas companies of capital.

The first thing wrong is the underlying motivation: there is no climate crisis. As well-known author Bjorn Lomborg states in his most recent book, False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet: “Climate change is real, but it’s not the apocalyptic threat that we’ve been told it is.” One of the clearest ways to see this is through climate economics. Scenarios set out by the Intergovernmental Panel on Climate Change (IPCC) forecast that over the next 80 years worldwide GDP per capita will likely increase to 450 percent of today’s level.

Lomborg estimates that climate damages will reduce this anticipated increase to 434 percent. Climate change is a problem. Accepting all of the assumptions that went into this modelling, climate change is likely to leave us somewhat less well off than we otherwise would be, by modestly slowing humanity’s overall progress. But judging by these figures, it is not a crisis.

H/T to Robert at SDA for the link.

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