Quotulatiousness

September 28, 2020

What Happened After The Bronze Age Collapse?

Filed under: Economics, Greece, History, Middle East — Tags: , , , , — Nicholas @ 04:00

Epimetheus
Published 17 Jun 2020

What Happened After The Bronze Age Collapse?

This video covers the period of time from the Bronze Age collapse through the Near Eastern dark age and to the first Iron Age empire.

This video is sponsored by my Patrons over on Patreon
https://www.patreon.com/Epimetheus1776

From the comments:

Epimetheus
3 months ago
Additional info some might find interesting:

Although the Arameans emerged from arid Southern Syria (in a similar manner to the earlier Amorites, taking advantage of a power vacuum) it is debated whether or not they were originally from there, with some believing they came from the Zagros mountains to Syria, before re-entering Mesopotamia. Others believe they were related to the Amorites, essentially they were the Amorites that stayed behind. There is also some debate if Ahlamu (also from the same region) is a synonym for Aramean or if it was a more broad generic term for the nomads, outlaws and ruffians of the region. (For example the Suteans, Chaldeans and Arameans may have all been considered Ahlamu) It is also interesting that many fugitives from authority in previous centuries found refuge in the frontier Ahlamu regions of the south.

All of that more or less got cut out of the video, and I thought some of you would find interesting.

September 18, 2020

From innovation to absolutism — English inventors and the Divine Right of Kings

Filed under: Britain, Economics, Government, History — Tags: , , , , , , , — Nicholas @ 05:00

In the latest Age of Invention newsletter, Anton Howes looks at how innovations during the late Tudor and Stuart eras sometimes bolstered the monarchy in its financial battles with Parliament (which, in turn, eventually led to actual battles during the English Civil War):

King Charles I and Prince Rupert before the Battle of Naseby 14th June 1645 during the English Civil War.
19th century artist unknown, from Wikimedia Commons.

The various schemes that innovators proposed — from finding a northeast passage to China, to starting a brass industry, to colonising Virginia, or boosting the fish industry by importing Dutch salt-making methods — all promised to benefit the public. They were to support the “common weal”, or commonwealth. And to a certain extent, many projects did. The historian Joan Thirsk did much pioneering work in the 1970s to trace the impact of various technological or commercial projects, revealing that even something as mundane as growing woad, for its blue dye, could have a dramatic impact on local economies. With woad, the income of an ordinary farm labouring household might be almost doubled, for four months in the year, by employing women and children. In the late 1580s, the 5,000 or so acres converted to woad-growing in the south of England likely employed about 20,000 people. That may seem small today, but at a time when the population of a typical market town was a paltry 800 people, even a few hundred acres of woad being cultivated here or there might draw in workers from across the whole region. In the mid-sixteenth century, even the entire population of London had only been about 50-70,000. As Thirsk discovered, innovative projectors also sometimes fulfilled their other public-spirited promises, for example by creating domestic substitutes for costly imported goods, or securing the supplies of strategic resources.

But the ideal of benefiting the commonwealth could also, all too frequently, be elided with serving the interests of the Crown. Projectors might promise the monarch a direct share of an invention’s profits, or that a stimulated industry would result in higher income from tariffs or excise taxes. Increasingly, they proposed schemes that were almost entirely focused on maximising state revenue, with little evidence of new technology. They identified “abuses” in certain industries — at this remove, it’s difficult to tell if these justifications were real — and asked for monopolies over them in order to “regulate” them, then making money by selling licences. Last week I mentioned patents over alehouses, and on playing cards. They also offered to increase the income from the Crown’s property, for example by finding so-called “concealed lands” — lands that had been seized during the Reformation, but which through local resistance or corruption had ostensibly not been paying their proper rents. The projectors would take their share of the money they identified as “missing”. And they proposed enforcing laws, especially if the punishments involved levying fines or confiscating property. The projectors offered to find the lawbreakers and prosecute them, after which they’d take their share of the financial punishments.

Projectors thus came to present themselves as state revenue-raisers and enforcers, circumventing all of the traditional constraints on the monarch’s money and power. They provided an alternative to Parliaments, as well as to city corporations and guilds, in raising money and propagating their rule. Taking it a step further, projectors offered the tantalising possibility that kings like James I and Charles I might rule through proclamation and patents alone, without having to answer to anybody. They thus experimented with absolutism for much of 1610-40, only occasionally being forced to call Parliament for as briefly as possible when the pressing financial demands of war intervened.

In the process, with the growing multitude of projects — a few bringing technological advancement, but many merely lining the pockets of courtier and king — the designation “projector” became mud. It was as if, today, the Queen were to use her prerogative to grant a few of her courtiers monopolies on collecting all traffic fines, or litter penalties, to be rewarded solely on commission. Or if she were to award an unscrupulous private company the right to award all alcohol-selling licences (perhaps on the basis that underage drinking was becoming common). The country would soon be awash with hidden speed cameras and incognito litter wardens, and the price of alcohol would go through the roof. The people responsible would not be popular. A recent book by economic historian Koji Yamamoto meticulously charts the changing public perceptions of projects, describing the ways in which innovators then struggled, for decades, to regain the public’s trust.

September 15, 2020

When you mix up cause and effect

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

In the Continental Telegraph, Esteban remembers a Reagan bon mot that is still observably true today:

US President Ronald Reagan and Soviet General Secretary Mikhail Gorbachev at the Hofdi House in Reykjavik, Iceland during the Reyjavik Summit in 1986.
Official US government photograph via Wikimedia Commons.

Ronald Reagan once observed that “the trouble with our liberal friends isn’t that they are ignorant, it’s that so much they know isn’t so”. I am repeatedly surprised by Leftists’ ability not to just get something wrong, but to get it spectacularly, 180 degrees wrong.

First, a couple of examples from the archives – some years ago there was an article in the NY Times (or WaPo perhaps) quite distressed that even though crime rates in the U.S. were at historically low levels the percentage of the population in prison was quite high. “Why are we putting so many people in prison when the crime rate is low?” they wondered, seriously. Hmm, how about this – when we put more bad people in prison the crime rate goes down? Keep in mind that the crime rate is what’s happening now, the prison population is who we caught and locked up over the past several years.

Then we had an article in a West Coast newspaper wondering why the homeless population in San Francisco had grown dramatically in recent years despite all the wonderful things the city had done to help them – weekly stipends, free shopping carts, etc. Note that none of this assistance to the homeless enabled them to become independent or required them to better themselves, they were all handouts. How is it that offering lots of goodies to homeless people attracts more of them here?

My point in bringing up these old stories is that it seems impossible that someone could fail to see they had cause and effect reversed. How could someone intelligent enough to write a column get these stories so backwards. The only answer I can see is that their worldview, at least in these areas, flows in only one direction and the underlying premise can never be questioned – putting people in prison is bad, there can be no possible upside, giving homeless people stuff is good, there can be no downside. So, when things get worse it’s a mystery, we can’t reconsider our starting point.

QotD: Racism and the minimum wage

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

During South Africa’s apartheid era, racist unions, which would never accept a black member, were the major supporters of minimum wages for blacks. In 1925, the South African Economic and Wage Commission said, “The method would be to fix a minimum rate for an occupation or craft so high that no Native would be likely to be employed.” Gert Beetge, secretary of the racist Building Workers’ Union, complained, “There is no job reservation left in the building industry, and in the circumstances, I support the rate for the job (minimum wage) as the second-best way of protecting our white artisans.” “Equal pay for equal work” became the rallying slogan of the South African white labor movement. These laborers knew that if employers were forced to pay black workers the same wages as white workers, there’d be reduced incentive to hire blacks.

South Africans were not alone in their minimum wage conspiracy against blacks. After a bitter 1909 strike by the Brotherhood of Locomotive Firemen and Enginemen in the U.S., an arbitration board decreed that blacks and whites were to be paid equal wages. Union members expressed their delight, saying, “If this course of action is followed by the company and the incentive for employing the Negro thus removed, the strike will not have been in vain.”

Our nation’s first minimum wage law, the Davis-Bacon Act of 1931, had racist motivation. During its legislative debate, its congressional supporters made such statements as, “That contractor has cheap colored labor that he transports, and he puts them in cabins, and it is labor of that sort that is in competition with white labor throughout the country.” During hearings, American Federation of Labor President William Green complained, “Colored labor is being sought to demoralize wage rates.”

Walter E. Williams, “Minimum Wage and Discrimination”, Creators Syndicate, 2017-02-08.

September 13, 2020

QotD: Price controls versus reality

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

Economic reality is not optional. Government-imposed price ceilings and price floors — although believed by those who view prices as arbitrary results of bargaining or of “power” relationships as merely changing the distribution of economic gain or pain — distort people’s view of economic reality. Price controls prevent people as consumers (including as employers of workers) and as producers (including as workers) from seeing economic reality as clearly as possible. Blinded by minimum-wage commands and other price controls, people act in ways that are the opposite of the ways that those who support the price controls ostensibly want people to act. Rent control, for example, prompts landlords and potential landlords to offer fewer rental units on the market. Minimum-wage commands lead employers to employ fewer low-skilled workers.

Non- (and poor) economists, seeing only that which is in front of their noses, observe the government-controlled prices and conclude that the results of these controls must be just what the government publicly proclaims it wishes these results to be. “Look! Rents are lower with rent controls! Wages are higher with minimum wages! We have helped the poor!”

Those who fall for such superficial appearances, of course, do not grasp the nature of market forces and the role of prices. But the naiveté of such people runs much deeper: they are the sort of people who believe that if the messenger is forced to lie, the underlying reality changes, with the lie thereby converted into truth. Such people, in other words, believe in miracles. They believe that state officials performing incantations can miraculously change economic reality.

Don Boudreaux, “Quotation of the Day…”, Café Hayek, 2018-05-16.

September 5, 2020

Beginning the transition from personal rule to the modern bureaucratic state

Filed under: Britain, Bureaucracy, Economics, Europe, Government, History — Tags: , , , , , , , — Nicholas @ 05:00

Anton Howes discusses some of the issues late Medieval rulers had which in some ways began the ascendency of our modern nation state with omnipresent bureaucratic oversight of everyone and everything:

… the bureaucratic state of today, with its officials involving themselves with every aspect of modern life, is a relatively recent invention. In a world without bureaucracy, when state capacity was relatively lacking, it’s difficult to see what other options monarchs would have had. Suppose yourself transported to the throne of England in 1500, and crowned monarch. Once you bored of the novelty and luxuries of being head of state, you might become concerned about the lot of the common man and woman. Yet even if you wanted to create a healthcare system, or make education free and universal to all children, or even create a police force (London didn’t get one until 1829, and the rest of the country not til much later), there is absolutely no way you could succeed.

King James I (of England) and VI (of Scotland)
Portrait by Daniel Myrtens, 1621 from the National Portrait Gallery via Wikimedia Commons.

For a start, you would struggle to maintain your hold on power. Fund schools you say? Somebody will have to pay. The nobles? Well, try to tax them — in many European states they were exempt from taxation — and you might quickly lose both your throne and your head. And supposing you do manage to tax them, after miraculously stamping out an insurrection without their support, how would you even begin to go about collecting it? There was simply no central government agency capable of raising it. Working out how much people should pay, chasing up non-payers, and even the physical act of collection, not to mention protecting that treasure once collected, all takes substantial manpower. Not to mention the fact that the collecting agents will likely siphon most of it off to line their own pockets.

[…]

It was not until 1689, when there was a coup, that an incoming ruler allowed the English parliament to sit whenever it pleased. Before that, it was convened only at the whim of the ruler, and dispersed even at the slightest provocation. In 1621, for example, when James I was planning to marry his heir to a Spanish princess, Parliament sent him a petition asserting their right to debate the matter. Upon hearing of it, he called for the official record of parliamentary proceedings, personally ripped out the page with the offending vote, and promptly dissolved the Parliament. The downside, of course, was that James could not then acquire any parliamentary subsidies.

Ruling was thus an intensely personal affair, of making deals and finding ways to circumvent deals you had inherited. Increasing your capabilities as a ruler – state capacity – was thus no easy task, as the typical ruler was stuck in an essentially medieval equilibrium. Imposing a policy costs money, but raising money involves imposing policy. Breaking out of this chicken-and-egg problem took centuries of canny leadership. The rulers who achieved it most would today seem hopelessly corrupt.

To gain extra cash without interference from Parliament, successive monarchs first asserted and then abused their ancient prerogative rights to grant monopolies over trades and industries. They eventually granted them to whomever was willing to pay, establishing monopolies over industries like gambling cards or alehouses under the guise of regulating unsavoury activities. They also sold off knighthoods and titles, and in 1670 Charles II even made a secret deal with the French that he would convert to Catholicism and attack the Protestant Dutch, all in exchange for cash. Anything to not have to call a potentially pesky Parliament. At times, the most effective rulers even resembled mob bosses. Take Elizabeth I’s anger when a cloth-laden merchant fleet bound for an Antwerp fair in 1559 was allowed to depart. Her order to stop them had not arrived in time, thus preventing her from extracting “loans” from the merchants while she still had their goods within her power.

September 4, 2020

“They have insurance”

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

Brad Polumbo debunks the notion that it’s somehow “okay” to loot and vandalize businesses “because they have insurance” and that somehow means that nobody suffers.

A building burning in Minneapolis following the death of George Floyd.
Photo by Hungryogrephotos via Wikipedia.

Since the death of George Floyd in late May, violent riots and looting have broken out in many major cities, eventually overshadowing peaceful protests and calls for criminal justice reform. From Portland to Chicago to Kenosha, rioters have smashed windows, lit fires, attacked government properties, assaulted people in the streets, and looted storefronts.

In Minneapolis alone, vandals have destroyed at least 1,500 properties, many of them minority-owned businesses, and caused billions of dollars in property damage. Many people have been injured or killed during the chaos.

[…]

Even if all the affected property was fully insured — and it wasn’t — rioting has taken a vast human toll as well.

Consider that at least 15 people were killed during the initial riots after Floyd’s death, and that more have died in the unrest since. When arson and looting consume the streets, people inevitably get hurt and caught in the crossfire. That’s why the Minneapolis police found a burnt corpse in a pawn shop days after arsonists had passed through.

Insurance might fund that property’s restoration, but it can’t bring a dead man back to life.

[…]

Big companies like Walmart and Target generally have expensive, premium insurance plans. But many of the mom-and-pop enterprises and small businesses targeted in the riots didn’t have expensive insurance plans. In some cases, their more modest plans don’t cover damage from riots or don’t cover it in full.

“Situations where there’s a lot of devastation like this, a lot of times people find they’re underinsured and don’t have enough coverage,” Illinois Insurance Association Hotline President Janet Patrick told CBS Minnesota. “And so once the damage has been done, it’s too late. You can’t buy more coverage.”

According to Insurance Journal, 75 percent of US businesses are under-insured. And according to the New York Times, about 40 percent of small businesses have no insurance at all.

September 2, 2020

Cold War 2.0 — you’re soaking in it

Filed under: Cancon, China, Economics, Military, USA — Tags: , , , , , — Nicholas @ 03:00

Ted Campbell responds to a recent article in Foreign Affairs by Nadia Schadlow:

Dr Schadlow posits that “A new set of assumptions should underpin U.S. foreign policy … [and, concomitantly, the foreign polices of the US led West, including Canada’s, because] … Contrary to the optimistic predictions made in the wake of the Soviet Union’s collapse, widespread political liberalization and the growth of transnational organizations have not tempered rivalries among countries. Likewise, globalization and economic interdependence have not been unalloyed goods; often, they have generated unanticipated inequalities and vulnerabilities [and] although the proliferation of digital technologies has increased productivity and brought other benefits, it has also eroded the U.S. military’s advantages and posed challenges to democratic societies.”

After outlining the rosy assumption made by leaders and policy makers from Richard Nixon through Bill Clinton to Barack Obama ~ assumption which I shared, Nadia Schadlow says that “China had no intention of converging with the West [because] The Chinese Communist Party never intended to play by the West’s rules; it was determined to control markets rather than open them, and it did so by keeping its exchange rate artificially low, providing unfair advantages to state-owned enterprises, and erecting regulatory barriers against non-Chinese companies. Officials in both the George W. Bush and the Obama administrations worried about China’s intentions. But fundamentally, they remained convinced that the United States needed to engage with China to strengthen the rules-based international system and that China’s economic liberalization would ultimately lead to political liberalization. Instead, China has continued to take advantage of economic interdependence to grow its economy and enhance its military, thereby ensuring the long-term strength of the CCP.” Of course, from a Chinese perspective it might, very reasonably, appear that the liberal, US made (in the late 1940s) “rules based international system” was, in fact, designed to strengthen the US economy and enhance its military and ensure America’s long term strength … and that is not, many would say, a totally unreasonable view.

[…]

America’s allies, including Canada, need to step up and help the USA (and India) with the containment of both China and Russia in several regions: in Asia, Africa, the Middle East and Europe, too. Canada is a G-7 nation. It needs to start acting like one.

Australians, Brits, Canadians and Danes need not share Dr Schadlow’s Trumpian view of the world and of Cold War 2.0 to understand that:

  1. It is here. We are in it, like it or not; and
  2. Like its predecessor, it can turn hot if we do not manage it with care.

Now, at this time, the conventional wisdom is that foreign and defence policy must take a back seat to beating COVID-19 and restarting the economy. But, the Chinese and the Russians are not putting their plans on hold while they deal with the pandemic. (Maybe that’s why Justin Trudeau admires China’s “basic dictatorship” so much.) They will both be moving ahead with plans that aim to put the US-led West, including Canada, at a disadvantage. Additionally, now is a good time to announce plans to build more new warships ~ two or three large helicopter carriers, another supply ship (for a total of four) 16 major surface combatants (the new Type 26 ships) and a dozen smaller corvettes … can be and politicians should say will be built here in Canada, by Canadian workers. Defence related projects, when well conceived and directed, can be great long-term job creators. Canada can do both: speed up our recovery from the pandemic and strengthen our global position by making defence procurement a priority for the recovery.

An artist’s rendition of BAE’s Type 26 Global Combat Ship, which was selected as the Canadian Surface Combatant design in 2019, the most recent “largest single expenditure in Canadian government history” (as all major weapon systems purchases tend to be).
(BAE Systems, via Flickr)

September 1, 2020

“John from America” and the South Pacific cargo cults

Filed under: Books, Economics, History, Pacific, Religion, WW2 — Tags: , , , , — Nicholas @ 03:00

Steven W. Aunan responds to Vicky Osterweil’s recent book on the joy of looting (which was clearly informed by her almost total innocence of any economic understanding) and also tells the story of the perhaps mythical “John from America” and the cargo cults of islanders in the South Pacific during and after World War II:

Ceremonial cross of John Frum cargo cult, Tanna island, New Hebrides (now Vanuatu), 1967.
Photo by Tim Ross via Wikimedia Commons.

In 1940, or so goes the myth, a man who identified himself as “John from America” appeared in a native village in the New Hebrides Islands with a message: Rebel against the colonizers, their missions, their schools, their laws, and John would reward them with free housing, clothing, food, and transportation.

The result was the “John Frum Cargo Cult” that persists to this day in the modern-day South Pacific nation of Vanuatu.

Frum’s message was remarkably similar to Vicky Osterweil’s message: rebel against settler domination, against the history of whiteness, and someone will reward you with all the free stuff you need.

Like Osterweil’s chaotic myth of impossibly contradictory Marxist worlds, we can’t be sure who the mythical John Frum was, how or when he arrived, whether he was a man or a spirit-being, if he lived in the U.S. or in the island’s active volcano, or if he first appeared as a tiger on an island where no tigers live, as a black man with a moustache, or as a white man who magically spoke the native language.

You can pick your own truth about Frum, because Marxists will tell you it’s no better than anyone else’s truth.

And, like every other false promise spoken by the fork-tongued followers of the dead white male devil Karl Marx, John Frum brought with him a vision of the future in which the old social order is violently dismantled, a new world is born, and the people emerge with material wealth, happiness, hope, and success.

After Frum left the islands, large numbers of Americans in their flying machines immediately and miraculously followed, building military airstrips and bringing in enormous quantities of cargo. Everything came to pass just as John Frum had promised.

The residents of the islands, of course, did not understand modern manufacturing or transportation, or that World War II was underway. The cargo simply arrived at the airstrip in the jungle, apparently by magic.

Kind of like the Target stores around the country that are repeatedly looted only to be magically restocked by the invisible hand of an invisible genius named John Galt.

August 30, 2020

QotD: Capitalism

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

It’s entirely possible to muse on whether the cut has to be different to contain the dab dabs or summat but that’s not what is going on at all. Women will pay more for their t-shirts therefore the capitalists, the bastards, charge women more for their t-shirts. Just because they can.

The women who significantly object to this are already buying men’s version and so the bastards get to market segment. Between those who care more about money than cut – they’re paying the same as the men – and those who care more about the cut than the money are paying more. If all women cared more about the money then they wouldn’t be able to do this.

It’s exactly the same reason that causes pink razors to cost more than blue. People will pay the extra so why the hell not try it on?

Yes, this really is insisting that its women’s own fault. If some significant portion didn’t pay the extra then no one would try to charge it.

Capitalism really is very simple.

Tim Worstall, “Why Do Women Pay More For T-Shirts? Because Women Will Pay More For T-Shirts”, Continental Telegraph, 2018-05-25.

August 29, 2020

Recreating British Railways?

Filed under: Britain, Business, Economics, Government, Railways — Tags: , , , , — Nicholas @ 05:00

Adrian Quine looks at the long-term results of the partial privatization of British Railways, and the current British government’s options to address some of the problems:

Wikimedia caption – “This is the Bring Back British Rail, a reverse image of the old BR logo, (now used by the TOC’s) to show we are heading the wrong way with Rail in the UK”

If there is one thing free marketeers and large state socialists agree on, it would be the terrible state/private hybrid ownership structure of our railways currently supported by the government. While large state socialists won’t be happy until the private sector is squeezed out of the system, market liberals view the Conservative government’s actions as creeping renationalisation.

The private-sector entrepreneurs that built many of Britain’s railways in the 19th century had – through a process of market discovery – settled on vertical integration, with the same firm owning the track and operating the trains. But, when railways were returned to private sector in the late 1990s, the government created one national infrastructure company (Railtrack), 25 train-operating companies (TOCs), 3 freight operating companies, 3 rolling-stock leasing companies, 13 infrastructure service companies and other support organisations. The Office of Passenger Rail Franchising was tasked with selling franchises to the TOCs, while the Office of the Rail Regulator (ORR) regulated the infrastructure. This artificial and fragmented structure was designed to give the impression of competition.

Despite these constraints, in the early days of John Major’s flawed privatisation some of the more enterprising private train operators managed to bring innovation to the sector, including improved marketing and very low-cost “yield managed” advance fares. Where allowed, competition between different operators brought improved customer service, additional direct trains and lower ticket prices. However, the flaws in the initial privatisation soon became apparent with failed franchises leading to increased government intervention and renationalisation by subsequent governments.

While attempts were made to downplay the significance of July’s decision by the Office of National Statistics to put train operators on the public balance sheet, it is in fact only the latest in a worrying string of signals about the direction in which the railway and Boris Johnson’s government are headed. In June, the transport secretary Grant Shapps announced to a parliamentary select committee plans to introduce concessions across the rail network. Private operators will simply be paid a set fee to provide a basic service – another nail in the coffin for commercial investment or innovation.

Attention is now turning to what the government will do when the current “Emergency Measures Agreements” – hastily put in place to ensure trains kept running when passenger numbers nosedived by 95% as lockdown began – comes to an end in September.

An InterCity 125 power car in British Rail livery at Manchester Piccadilly in October 1976.
Photo by Dave Hitchborne via Wikimedia Commons.

August 27, 2020

QotD: Racism and the minimum wage

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

Minimum-wage laws can even affect the level of racial discrimination. In an earlier era, when racial discrimination was both legally and socially accepted, minimum-wage laws were often used openly to price minorities out of the job market.

In 1925, a minimum-wage law was passed in the Canadian province of British Columbia, with the intent and effect of pricing Japanese immigrants out of jobs in the lumbering industry.

A Harvard professor of that era referred approvingly to Australia’s minimum wage law as a means to “protect the white Australian’s standard of living from the invidious competition of the colored races, particularly of the Chinese” who were willing to work for less.

In South Africa during the era of apartheid, white labor unions urged that a minimum-wage law be applied to all races, to keep black workers from taking jobs away from white unionized workers by working for less than the union pay scale.

Some supporters of the first federal minimum-wage law in the United States — the Davis-Bacon Act of 1931 — used exactly the same rationale, citing the fact that Southern construction companies, using non-union black workers, were able to come north and underbid construction companies using unionized white labor.

These supporters of minimum-wage laws understood long ago something that today’s supporters of such laws seem not to have bothered to think through. People whose wages are raised by law do not necessarily benefit, because they are often less likely to be hired at the imposed minimum-wage rate.

Thomas Sowell, “Why racists love the minimum wage laws”, New York Post, 2013-09-17.

August 25, 2020

Berlin’s experiment with rent control has already made huge changes in the housing market

Filed under: Business, Economics, Germany — Tags: , , , — Nicholas @ 05:00

Sadly, for advocates of rent control in other cities, the changes are not positive for renters or landlords:

In the beginning of this year, the city government of Berlin brought in a rent freeze, a particularly crude form of rent control. Predictably, this led to calls from certain quarters for introducing similar measures here in London. I had several discussions about this, making the standard economic case against rent controls, but to no avail. I was told that I was blinded by neoliberal dogma, that the world is not as simple as my Econ 101 textbook, and that this was a brilliant and necessary measure to rein in the power of greedy landlords and speculators.

The first results are already in now, and they can be interpreted as the revenge of Econ 101. In Berlin, the supply of new rental properties coming on the market has fallen by a quarter compared to last year. No, this is not because of the virus: in other big cities such as Hamburg, Munich and Cologne, supply has increased by a third over the same period.

In fact, the one subsector of Berlin’s rental market which is exempt from the rent cap, namely new-built properties, is not that different from the rental markets of other big cities. In this subsector, the number of new rental properties coming on the market has increased by a quarter. Yet in the main market, where the cap does apply, supply has fallen by almost half – a drastic reduction, which more than cancels out any gains made elsewhere.

There has also been an increase in the number of properties that are up for sale, rather than rent, because while rents have been capped, sales prices have not.

So whether you compare the rent-capped part of Berlin’s rental property market to its counterpart in other cities, to its cap-exempt counterpart in Berlin itself, or to the owner-occupier sector – the result is always the same. The rent cap clearly is having a negative impact on supply, and this is happening astonishingly quickly: even I was not expecting to see any impact in this year, or the next.

None of the arguments against rent controls are new. You can already find them all in Verdict on Rent Control, a book which the IEA published in 1972. The book is actually a collection of papers on the subject, some of which are much older than that. It contains one paper by Milton Friedman and George Stigler on wartime rent controls in the US, which were still lingering after the war had ended. It was first published in 1946, but they were already having the same arguments then that we are still having today.

August 23, 2020

Trudeau’s hopes for re-election hinge on promising “an organic chicken in every pot and a solar panel on every shed”

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

The Line wonders who the hell the Liberals think they are:

It may have been easy to miss amid the news coming out of Ottawa, but as the government lost its finance minister, appointed Chrystia Freeland to yet another job, prorogued parliament, halted testimony into its latest scandal, prepared for the announcement of a new Conservative Party of Canada leader and braced for a likely second wave of COVID-19, the prime minister promised to announce a transformative agenda. One that promises sweeping social change, and a wholesale re-invention of our economy in line with the greenest ambitions. We here at The Line have but one question.

Who the hell do these people think they are?

It is obvious to anyone who has been reading the news and possesses even residual brain function why the prime minister would like to be talking about a plan for transformative change. Talking about all the amazing things he could do for Canadians with borrowed money beats talking about his government’s bumbling of the WE file and the departure of now-former finance minister Bill Morneau.

Promising an organic chicken in every pot and a solar panel on every shed is obviously more appealing to Trudeau than repeating the last month. But it is astonishing to us — as jaded as we have undeniably become — that the government is talking about this instead of the necessary steps needed to shore up this country ahead of a likely second wave of COVID-19.

This government has a mandate to respond to the emergency, by mere unlucky virtue of being in power at the moment the virus hit. It is the duty of every Canadian government to safeguard the wellbeing of the population, full stop. But the emergency, contrary to what you may believe if you’ve been reading Liberal Party HQ memos, is not over. We have an urgent need to secure more medical equipment, to harden our long-term care facilities, to prevent any further lockdowns from derailing a fragile economic recovery, to ensure the resiliency of critical supply chains, and to shore up our health-care system. This is what every Canadian official should be focused on right now.

[…]

But can anyone maintain faith that the Liberals will stick to their knitting when we hear buzzwords like “transformative” social change? Sweeping climate-change reforms? Engineering a new green economy? They are all fine notions — let’s put them to the people and vote on them. Until calling that election is feasible (mid-pandemic, it is not) this government simply does not have the mandate to undertake such far-reaching efforts.

It’s easy to forget now, but only nine months ago this government was reduced to a minority of seats in parliament. The Liberals lost the popular vote, and saw one million of their own prior voters abandon them. They are only in government because the Conservatives, to the surprise of no one, found several novel and exciting new ways to fail.

August 21, 2020

Geography works against CANZUK ever happening

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

Ted Campbell is a big fan of the CANZUK scheme (Canada-Australia-New Zealand-United Kingdom) to create an “anglosphere” power alongside the current economic big-hitters on the world stage like the United States, China and the European Union. I agree it has historical, nostalgic appeal, but as Aris Roussinos points out, geography is a big stumbling block to it ever being much more than an idea:

Since losing the empire, Britain has notoriously struggled to find a role on the world stage. Initial attempts to piggyback on the power of our successor as global hegemon, the United States, by acting as a guiding force — a Greece to America’s Rome, in Harold Macmillan’s phrase — faltered due to the total absence of interest ever shown in this arrangement by any American administration.

The subsequent attempt to remould Britain as a European power acting in concert with its continental neighbours through the European Union was an unhappy marriage, and has ended in a rancorous divorce whose final settlement is still to be determined. Adrift on the world stage, we are in need of good ideas.

Instead, we are offered CANZUK, a reheated Edwardian fantasy of a globe-spanning Anglosphere acting as a world power which excites the enthusiasm of a small coterie of neoliberal and neoconservative ideologues, if no one else.

In a recent piece for the Wall Street Journal, the historian and Churchill biographer Andrew Roberts argued that the CANZUK nations — Canada, Australia, New Zealand and the UK — ought to establish “some form of federation among them” as a “second Anglospheric superpower” combining “free trade, free movement of people, a mutual defense organization and combined military capabilities” , which would “create a new global superpower and ally of the U.S., the great anchor of the Anglosphere”.

One cannot fault Roberts for the grandeur of his vision, even if the details of how this would actually work are left to others to fill in. Instead, we are reassured, this would not be a centralising project like the hated EU; rather, “its program for a loose confederal state linking the Westminster democracies would be clearly enunciated right from the start.” Already, we see the harsh hand of reality ready to crush this initially appealing vision. On the one hand, CANZUK is a globe-spanning superpower ready to be born; on the other, it is merely a loose grouping of separate national governments, which would, like all national governments, act according to their own interests above all.

By totting up the different GDP figures of the various CANZUK nations, Roberts claims that his proposed Empire 2.0 “would have a combined GDP of more than $6 trillion, placing it behind only the U.S., China and the EU,” while “with a combined defense expenditure of over $100 billion, it would also be able to punch above its weight”.

Yet the flaws of this argument are obvious. As other critics have noted, only a minuscule proportion of the CANZUK nations’ trade is with each other, save New Zealand, an economic satellite of Australia. Australia is a great East Asian trading power, and will remain so. Canada is enmeshed in the greater North American trading sphere, as are we with Europe, whatever Brexiteers may wish. As always, the simple matter of geography trumps the affective bonds between far-flung kith and kin, whatever their emotional appeal.

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