Quotulatiousness

April 14, 2020

Socialism and the environment

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

Luke Warren on the vast gulf between the “environmental consciousness” of fans of the socialist worldview and the real-world environmental impact of socialist policies:

Modern environmentalists often identify as socialists. Members of Extinction Rebellion, for example, often advocate tearing down capitalism and supplanting it with “eco-socialism”. Go to any “climate strike” or similar type of event, and you will see more hammer and sickle flags, raised fist symbols and Socialist Workers party posters than you can count.

Indeed, socialism and environmentalism are perceived by many as two sides of the same coin, and the idea that climate change is a “crisis of capitalism” has become conventional wisdom. It is now seemingly a contradiction to be both a capitalist and an environmentalist. This is not just a matter of rhetoric, but it is also reflected in the policy prescriptions of both environmentalists and socialists. Look at proposals for a “green new deal”, calls for large-scale nationalisation in the name of the environment.

Animated map of the shrinking of the Aral Sea between 1960 and 2008 (via Wikipedia)

But what is the story of socialism and environmentalism?

One only has to look back at the failed experiments of socialism to see just how environmentally catastrophic it has been. As the Soviet Union collapsed and the iron curtain was torn down, the rest of the world finally saw the environmental damage caused by socialist command economies. Economist Jeffrey Sachs stated that the socialist states had “some of the worst environmental problems on the entire globe” All of this, it is worth noting, occurred against a backdrop of a wide array of environmental laws and regulations that supposedly protected the public interest.

Air pollution provides an excellent example. Total greenhouse gas emissions in the USSR in 1988 equated to 79 per cent of the US total. However, the Soviet Union’s gross national product (GNP) was only 54 per cent of the USA’s, according to one very generous estimate (it was, in all likelihood, far less than that). This means that the USSR generated at least one and a half times as much pollution as the USA per unit of GNP (and again, in all likelihood, far more than that).

Accounts of those who travelled across the Soviet Union post-collapse recall swathes of the country where smog clung to the air. An article from Multinational Monitor in 1990 highlighted that 40 per cent of the Soviet people lived in areas where air pollutants, such as carbon dioxide, sulphur dioxide and nickel dioxide, were three to four times the maximum allowable levels.

The destruction of the Aral Sea, perhaps one of the worst environmental disasters, can be directly blamed on the process of socialist planning. In an attempt to make the USSR self-sufficient in cotton production, vast amounts of water were diverted to arid areas for irrigation. Much of the Aral Sea dried up, leaving port cities, Muynak for example, and fishing villages marooned miles from the shore. Worse, the exposure of the salty sea bed and extensive use of pesticides had catastrophic impacts on the health of the local population. Respiratory problems and lung diseases became widespread as people inhaled pollutants.

The Aral Sea in 2000 on the left and 2014 on the right. Photograph: Atlas Photo Archive/NASA

QotD: The Edict of Diocletian, 301 AD

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

The most famous episode of price controls in Roman history was during the reign of Emperor Diocletian (A.D. 244-312). He assumed the throne in Rome in A.D. 284. Almost immediately, Diocletian began to undertake huge and financially expensive government spending projects.

There was a massive increase in the armed forces and military spending; a huge building project was started in the form of a planned new capital for the Roman Empire in Asia Minor (present-day Turkey) at the city of Nicomedia; he greatly expanded the Roman bureaucracy; and he instituted forced labor for completion of his public works projects.

[…]

Diocletian also instituted a tax-in-kind; that is, the Roman government would not accept its own worthless, debased money as payment for taxes owed. Since the Roman taxpayers had to meet their tax bills in actual goods, this immobilized the entire population. Many were now bound to the land or a given occupation, so as to assure that they had produced the products that the government demanded as due it at tax collection time. An increasingly rigid economic structure, therefore, was imposed on the whole Roman economy.

But the worst was still to come. In A.D. 301, the famous Edict of Diocletian was passed. The Emperor fixed the prices of grain, beef, eggs, clothing, and other articles sold on the market. He also fixed the wages of those employed in the production of these goods. The penalty imposed for violation of these price and wage controls, that is, for any one caught selling any of these goods at higher than prescribed prices and wages, was death.

Realizing that once these controls were announced, many farmers and manufacturers would lose all incentive to bring their commodities to market at prices set far below what the traders would consider fair market values, Diocletian also prescribed in the Edict that all those who were found to be “hoarding” goods off the market would be severely punished; their goods would be confiscated and they would be put to death.

In the Greek parts of the Roman Empire, archeologists have found the price tables listing the government-mandated prices. They list over 1,000 individual prices and wages set by the law and what the permitted price and wage was to be for each of the commodities, goods, and labor services.

A Roman of this period named Lactanius wrote during this time that Diocletian “… then set himself to regulate the prices of all vendible things. There was much blood shed upon very slight and trifling accounts; and the people brought no more provisions to market, since they could not get a reasonable price for them and this increased the dearth [the scarcity] so much, that at last after many had died by it, the law was set aside.”

Richard M. Ebeling, “How Roman Central Planners Destroyed Their Economy”, Foundation for Economic Education, 2016-10-05.

March 25, 2020

QotD: The broken feedback mechanism that brought down the chain bookstores

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

… the push-model of book sales. Long before there was an Amazon, chain bookstores had cozy deals with publishers that sent most indie bookstores (now beloved in effigy by the left) out of business.

And then the left dominated publishing establishment had a brilliant idea. For decades they’d been trying to forecast failure and success, and failings. Books they pushed out the wazzoo (A river in Sundon’tshine) died on the vine when bookstores refused to stock them because the owners had read them. The books they had designated as to be ignored caught someone’s fancy, and suddenly were all over.

This was inefficient. It caused way too much printing that never got distributed, and much last minute rushed reprinting. (Even leaving aside how often people chose to read the WRONG things, something that started to matter more and more in the last two decades.)

So they came up with the push model. It was, from a certain perspective, brilliant.

That perspective is the one where the real world doesn’t really exist, so you don’t need to hear from it.

Because the managers of the big corporate bookstores ALSO didn’t read, they took instruction beautifully. So the publishers could say “you’ll take 100 of x and 2 of y” and they DID.

For a little while it worked beautifully, in the sense that there were no surprise bestsellers, (and publishing houses hated those. I know someone who unexpectedly sold out her print run in a week. The publishing house took the book out of print. No, seriously.) and the books that got seen and talked about were picked by the publisher. (BTW this wasn’t even always or primarily political. Sure, that existed too sometimes, but mostly it was the crazy fads that publishing convinced itself of. For instance, sometime in the mid two thousands they convinced themselves no one wanted historical mysteries — they weren’t selling, true, probably because they were on NO shelves — but everyone wanted “chick-lit mysteries” that had covers with lots of shoes and dresses and whose plots were “Sex in the City with murder.” I remember trying to find something to read, giving up and going to the used bookstore (then a hundred miles away in Denver) for my mystery fix.)

Of course, they sold less. In fact, as time went on and people got out of the habit of going to the bookstore, because there was never anything they could find to read. I mean, I remember being chased from Science Fiction to Mystery to finally History, to at last the sort of “utility” book you find in the discount bins you know “a chart of history” type of thing just to find something to buy on our bookstore night.

Then we gave up.

Eventually the broken feedback mechanism gave us the demise of Borders — and B & N is not feeling so good itself — and a yawning, desperate chasm in customers’ need for books that meant the way was wide open for Indie and Amazon. Even the early badly proofed indie books were like a breath of fresh air because for the first time I could read outside the trends being pushed.

Sarah Hoyt, “Breaking the Gears”, According to Hoyt, 2018-01-03.

January 4, 2020

QotD: “Starchitects”

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

In my school, the status of “Corb” (as we were encouraged to affectionately call him) as a hero was a given, and dissenting from this position was risky. Such is the power of group-think which universities are, sadly, no less prone to than anywhere else. To be fair, nobody was still plugging the megalomaniac aspect of their hero; his knock-down-the-center-of-Paris side. All those undeniably God-awful tower blocks for “rationally” housing “the people” that sprang up all over Europe in his name? Well, we were assured, they could not be blamed on Corb; it was just that his more pedestrian architectural acolytes hadn’t properly understood what he had meant. In addition to the persistence of Corb-hero worship itself, two cancerous aspects of its radical mindset have survived intact in our schools of architecture.

One is the idea that an architect aspiring to greatness must also aspire to novelty. It is this imperative to “innovate” that underpins the diagrammatic design concepts of the Deconstuctivists. There is of course nothing wrong with innovation per se; it is the knee-jerk compulsion to innovate, or “reinterpret” — as a kind of moral imperative — that is the mid-20th-century aesthetic legacy. To be fair to the profession, I would come to the defense of much innovative public and commercial architecture, most of it by architects that the public has never heard of. Tragically though, these unpretentious and unsung essays in steel, glass, and masonry have been eclipsed in the public imagination by the “starchitect” bling that is currently turning the centers of our great cities into a collection of (in James Stevens Curl’s memorable phrase) “California-style roadside attractions”.

The other cancer is the idea that building design has sociological, psychological, and macro-economic dimensions that the architect — simply by virtue of being an architect — is competent to judge. What really matters to your average architecture student is drawing — which is fine, and just as it should be, until the vain idea emerges that their drawings represent some kind of implicit vision for mankind. At my school, any student’s design presentation had to include a verbal rationale — often post hoc and invariably half-baked — of how the form, massing, and materials of the design are expressive of such imponderables as the supposed psychological “needs” and “aspirations” of the users and the wider “community” that the building is to serve. The students were simply reciting the bogus language of their tutors — in which buildings might be said to be “fun,” “thought provoking,” “democratic,” “inclusive” and other such nonsense.

Graham Cunningham, “Why Architectural Elites Love Ugly Buildings”, The American Conservative, 2019-11-01.

January 3, 2020

QotD: Against The Grain

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

Someone on SSC Discord summarized James Scott’s Against The Grain as “basically 300 pages of calling wheat a fascist”. I have only two qualms with this description. First, the book is more like 250 pages; the rest is just endnotes. Second, “fascist” isn’t quite the right aspersion to use here.

Against The Grain should be read as a prequel to Scott’s most famous work, Seeing Like A State. SLaS argued that much of what we think of as “progress” towards a more orderly world – like Prussian scientific forestry, or planned cities with wide streets – didn’t make anyone better off or grow the economy. It was “progress” only from a state’s-eye perspective of wanting everything to be legible to top-down control and taxation. He particularly criticizes the High Modernists, Le Corbusier-style architects who replaced flourishing organic cities with grandiose but sterile rectangular grids.

Against the Grain extends the analysis from the 19th century all the way back to the dawn of civilization. If, as Samuel Johnson claimed, “The Devil was the first Whig”, Against the Grain argues that wheat was the first High Modernist.

Scott Alexander, “Book Review: Against The Grain“, Slate Star Codex, 2019-10-15.

September 14, 2019

Stalin’s 5 Year Plan for Economic Mass Murder | BETWEEN 2 WARS I 1932 Part 1 of 4

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

TimeGhost History

Stalin has to deal with the consequences of forcibly changing the Soviet Union from an agrarian economy into a modern industrialized society as his first five-years plan reaches its final year.

Join us on Patreon: https://www.patreon.com/TimeGhostHistory

Hosted by: Indy Neidell
Written by: Spartacus Olsson and Naman Habtom
Directed by: Spartacus Olsson and Astrid Deinhard
Executive Producers: Bodo Rittenauer, Astrid Deinhard, Indy Neidell, Spartacus Olsson
Creative Producer: Joram Appel
Post-Production Director: Wieke Kapteijns
Research by: Naman Habtom
Edited by: Daniel Weiss en Wieke Kapteijns
Sound design: Marek Kaminski

A TimeGhost chronological documentary produced by OnLion Entertainment GmbH.

From the comments:

TimeGhost History
1 hour ago (edited)
Debating the concepts, definition and framework of Marxism, Communism and Socialism is something that historians don’t seem to get enough of, much like applying these theories to historical and contemporary phenomena. The study of how these theories turned into ideology and what effect that had on nations, cultures, peoples and wars is a very interesting field of history, which can be debated to great lengths, which we ourselves also like to engage and participate in. However, we want to once again emphasise that we will only allow debate within the generally accepted rules of academic debate. Keep it civil, substantiated, name your sources whenever possible and stay away from pseudo-science and contemporary politics. We are fierce believers in the benefits of academic debate and don’t want to resort to turning off the comments, as other channels might do when talking about subjects like the 5-year plan or the Holodomor.

Cheers, Joram

August 29, 2019

“‘Neo-liberalism’ is actually little more than … ‘market socialism'”

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

Peter Boettke responds to a New York Times opinion piece by Binyamin Appelbaum, blaming economists for the state of the western world:

A Mises Institute graphic of some of the key economists in the Austrian tradition (Carl Menger, Ludwig von Mises, Friedrich Hayek, Murray Rothbard, and Hans-Hermann Hoppe.
Mises Institute via Wikimedia Commons.

But the problem is deeper than economists, it is ANYBODY put in this position of power and prestige, and to do so is fundamentally anti-democratic as was argued by Frank Knight in various writings, and then by Vincent Ostrom in The Intellectual Crisis of American Public Administration, and more recently in David Levy and Sandra Peart’s Escape from Democracy. We cannot fix this problem by replacing one set of “experts” with another set. We have to stop thinking of the relationship between economics and public administration along these lines altogether.

I try to lay out the argument in my SEA address on “Economics and Public Administration“, which also served as an attempt to summarize two decades of research that several of us have undertaken in this spirit. The critical argument in that text for this issue is that I argue that economics is a derived demand, if we conceive of the task of public administration one way, that will shape not only shape the supply and demand of economists, but dictate what it means to produce an economist — and thus, what is means to be an economist.

The problem with narratives like Appelbaum’s isn’t that he is suspicious of the pretensions of economists, it is that he is blaming the wrong culprit for the mess we’re in. Here it is important that everyone of these critics read Gregory Mankiw’s very important piece, published BEFORE the financial crisis, on the macroeconomist as scientists (read Chicago New Classical and Monetarists) and the macroeconomists as engineers (read MIT/Harvard Keynesian and New Keynesians). The Chicago folks — and the Austrian, Virginia, UCLA, etc. folks — did not go to DC, did not write laws, didn’t attempt to orchestrate economic miracles abroad, or stimulate growth at home. They taught, they lectured, the researched and wrote papers in journals and published books, and a subset of them wrote opinion editorials and did interviews in various forms of popular media. In short, they were teachers and students of society. They did not get paid to be experts for the government in general. They were not advisors. But others were — from Keynes to Larry Summers — the line is long. Just look at the number of central bankers that were PhD students under Stan Fischer at MIT. Can you trace that same lineage to Milton Friedman? How about to F. A. Hayek? Mises? Right, I didn’t think so.

“Neo-liberalism” is actually little more than an effort to bring neoclassical models of efficiency into the operation of governmental agencies — that in another era was called “market socialism” — just look at Abba Lerner’s The Economics of Control. He actually thought he had found the right way to combine socialist aspirations with the teachings of economics so he could ensure microeconomic efficiency and macroeconomic stability and provide economists with the tools to successfully steer the economic ship. That basic idea from mid-20th century to today has never disappeared in those halls of power — what has appeared is a waffling between liberal (in the American sense) Keynesianism, and conservative Keynesianism, but Keynesianism exists throughout. The Samuelsonian Neo-classical synthesis achieved the status he hoped for it … and provides the meaning behind his statement in the teachers manual “I don’t care who writes a nation’s laws … if I can write its economics textbooks.” Samuelson knew that if he could wrest control of the tacit presuppositions of public policy functionaries, then there thoughts and actions would be guided by what he taught about market failure, macroeconomic instability, and government as a corrective to our economic woes. It’s an amazing achievement what he did. For at least a generation, perhaps two, he controlled both the introduction to economics market, and the advanced training of PhD students in economics market.

Thinkers rose up in opposition to this hegemony from the older generation such as Knight, Mises and Hayek, but also among his contemporaries such as Alchian, Coase and Friedman, and of course a younger generation such as Becker and Lucas, but also Demsetz, Kirzner, etc. But, look at those names … they did not go to Washington DC to work for domestic policy agencies or the international agencies in economic policy. They were content in their jobs as economic scholars/teachers. They were humble students of society, and some among them rose to the status of social critics and intellectuals. But again none were master manipulators of the organs of power to try to shape the economy into the image of their ideal.

August 10, 2019

QotD: Progressives and spontaneous order

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

I suspect that the single biggest factor that distinguishes “Progressives” from libertarians and free-market conservatives is the simple fact that “Progressives” do not begin to grasp the reality of spontaneous order. “Progressives” seem unable to appreciate the reality that productive and complex economic and social orders not only can, but do, emerge unplanned from the countless local decisions of individuals each pursuing his or her own individual plans. Therefore, “Progressives” naturally adopt a creationist view of society and of the economy: without a conscious and visible (and well-intentioned) guiding hand, society and the economy cannot possibly work very well. Indeed, it seems that for many (most?) “Progressives,” the idea that a spontaneously ordered economy can work better than one directed consciously from above – or, indeed, that a spontaneously ordered economy can work at all – is so absurd that when “Progressives” encounter people who oppose “Progressive” schemes for regulating the economy, “Progressives” instantly and with great confidence conclude that their opponents are either stupid or, more often, evil cronies for the rich and the powerful.

Conduct an on-going experiment: whenever well-meaning “Progressives” (of which there are very many) propose this government intervention or oppose that policy of reducing government’s role in the economy, ask if these “Progressives'” stated reasons can be understood to be nothing more than a reflection of a failure to understand the power and range of spontaneous-ordering forces in private-property settings. The answer will almost always be “yes.” Very often, no further explanation for “Progressives'” policy stances is necessary.

“Progressives” simply don’t “get” spontaneous order in human society. They see a problem and leap to the only conclusion that for them is sensible – namely, that that problem’s only realistic “solution” is that it be directly addressed by government officials. Indeed, even “Progressives'” frequent misdiagnoses of the results of trade-offs as being “problems” (or “market failures”) reflect a failure to understand spontaneous-ordering processes. Many phenomena and patterns that “Progressives” assume to be problems – for example, increasing inequality of monetary incomes – are often the benign results of the countless and nuanced individual trade-offs made by individuals. For “Progressives,” though, these “outcomes” are often assumed to be the consequence of sinister designs.

Don Boudreaux, “Bonus Quotation of the Day…”, Café Hayek, 2017-06-24.

June 26, 2019

QotD: “Right-wing central planning is as foolish as left-wing central planning”

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

It is the old familiar dream of the central planner, an orrery economic universe in which things move in predictable and comprehensible patterns. That model of the economy has no relationship to reality. A million different things might become of any given laid-off steelworker; predicting what would happen to an entire industry’s work force (or even a small portion of it) in the absence of a certain protectionist policy is not economics — it is speculative fiction. For the most part, we do not have a very good record for predicting the effects of policies; trying to build a set of policies on an intellectual framework consisting of imagined counterfactuals will fail for the same reason that wage and price controls fail, agricultural-market management fails, and those highly targeted “investments” every president proposes in every State of the Union address fail: Human civilization is not an ant farm that can be viewed in cross-section and comprehended in total.

The real world is populated by politicians and lobbyists rather than philosopher-kings, but a government of philosopher-kings that tried to micromanage the economy in the way Beattie suggests would fail, just as all similar attempts at putting the economy under political discipline have failed. Right-wing central planning is as foolish as left-wing central planning.

Kevin D. Williamson, “Right-wing central planning is as foolish as left-wing central planning”, National Review, 2017-06-12.

April 24, 2019

QotD: The Utopia of Damned Fools

Filed under: Government, History, Politics, Quotations, USA — Tags: , , , , — Nicholas @ 01:00

The money began to pour out on November 16, 1933, to the tune of a deafening hullabaloo. By December 1 more than 1,000,000 were on the CWA [Civil Works Administration] pay roll; by January, 1934, the number reached 4,100,000. Press agents in eight-hour shifts worked day and night to tell a panting country what it was all about. The Depression, it was explained, was being given a series of adroit and fatal blows, above, below and athwart the belt. In six months there would be no more unemployment, the wheels of industry would be spinning, and the More Abundant Life would be on us. Brains had at last conquered the fear of fear.

What actually happened belongs to history. By the opening of Spring [Harry] Hopkins had got rid of his billion, and the whole thing had blown up with a bang. More people were out of work than ever before. The wheels of industry resolutely refused to spin. The More Abundant Life continued to linger over the sky line. There ensued a pause for taking breath, and then another stupendous assault was launched upon the taxpayer. This time the amount demanded was $4,880,000,000. It is now in hand, and plans are under way to lay it out where it will do the most good in next year’s campaign.

Go back to the clippings and read them again. Consider well what they say. Four preposterous nonentities, all of them professional uplifters, returning from a junket at the taxpayer’s expense, sit in a smoking car munching peanuts and talking shop. Their sole business in life is spending other people’s money. In the past they have always had to put in four-fifths of their time cadging it, but now the New Deal has admitted them to the vaults of the public treasury, and just beyond the public treasury, shackled in a gigantic lemon-squeezer worked by steam, groans the taxpayer. They feel their oats, and are busting with ideals. For them, at least, the More Abundant Life has surely come.

Suddenly one of them, biting down hard on a peanut, has an inspiration. He leapt to his feet exultant, palpitating like a crusader shinning up the walls of Antioch. How, now, comrade, have you bitten into a worm? Nay, gents, I have thought of a good one, a swell one, the damndest you will ever heard tell of. Why not put everyone to work? Why not shovel it out in a really Large Way. Why higgle and temporize? We won’t be here forever, and when we are gone we’ll be gone a long while.

But the Leader? Wasn’t he babbling again, only the other day, of balancing the budget? Isn’t it a fact that he shows some sign of wobbling of late – that the flop of the NRA [National Recovery Administration] has given him to think? Well, we can only try. We have fetched him before, and maybe we can fetch him again. So the train reaches Washington, the porter gets his tip from the taxpayer’s pocket, and the next day the four brethren meet to figure out the details. But they never get further than a few scratches, for The Leader is in one of his intuitive moods, and his Christian Science smile is in high gear. Say no more, Harry, it is done! The next morning the money begins to gush and billow out of the Treasury. Six months later a billion is gone, and plans are under way to collar five times as much more.

Such is government by the Brain Trust. Such is the fate of the taxpayer under a Planned Economy. Such is the Utopia of Damned Fools.

H.L. Mencken, “The New Deal”, The Mencken Chrestomathy, 1982 (article originally published 1935-05).

April 21, 2019

QotD: High Modern city design as a tool to control the populace

Filed under: Architecture, Europe, France, Government, History, Quotations — Tags: , , , — Nicholas @ 01:00

Scott notes that although citizens generally didn’t have a problem with earlier cities, governments did:

Historically, the relative illegibility to outsiders of some urban neighborhoods has provided a vital margin of political safety from control by outside elites. A simple way of determining whether this margin exists is to ask if an outsider would have needed a local guide in order to find her way successfully. If the answer is yes, then the community or terrain in question enjoys at least a small measure of insulation from outside intrusion. Coupled with patterns of local solidarity, this insulation has proven politically valuable in such disparate contexts as eighteenth-and early nineteenth-century urban riots over bread prices in Europe, the Front de Liberation Nationale’s tenacious resistance to the French in the Casbah of Algiers, and the politics of the bazaar that helped to bring down the Shah of Iran. Illegibility, then, has been and remains a reliable resource for political autonomy

This was a particular problem in Paris, which was famous for a series of urban insurrections in the 19th century (think Les Miserables, but about once every ten years or so). Although these generally failed, they were hard to suppress because locals knew the “terrain” and the streets were narrow enough to barricade. Slums full of poor people gathered together formed tight communities where revolutionary ideas could easily spread. The late 19th-century redesign of Paris had the explicit design of destroying these areas and splitting up poor people somewhere far away from the city center where they couldn’t do any harm.

Scott ties this into another High Modernist creation: the collective farms of the Soviet Union. This was a terrible idea and responsible for the famines that killed millions (tens of millions?) during Stalin’s administration. The government went ahead with them because the non-collectivized farmers were too powerful and independent a political bloc. They lived in tight-knit little villages that did their own thing, the Party officials who went to these villages to keep order often ended up “going native”, and the Soviets had no way of knowing how much food the farmers were producing and whether they were giving enough of it to the Motherland.

The collectivized farms couldn’t grow much, but people were thrown together in artificial towns designed to make it impossible to build any kind of community: there was nowhere to be except in bed asleep, working in the fields, or at the public school receiving your daily dose of state propaganda. The towns were identical concrete buildings on a grid, which left the locals maximally disoriented (because there are no learnable visual cues) and the officials maximally oriented (because even a foreigner could go to the intersection of Street D and Street 7). All fields were perfectly rectangular and produced Standardized Food Product, so it was (theoretically) easy to calculate how much they should be producing and whether people were meeting that target. And everyone was in the same place, so if there were some sort of problem it was much easier to bring in the army or secret police than if they were split up among a million tiny villages in the middle of nowhere.

    Confronting a tumultuous, footloose, and “headless” rural society which was hard to control and which had few political assets, the Bolsheviks, like the scientific foresters, set about redesigning their environment with a few simple goals in mind. They created, in place of what they had inherited, a new landscape of large, hierarchical, state-managed farms whose cropping patterns and procurement quotas were centrally mandated and whose population was, by law, immobile. The system thus devised served for nearly sixty years as a mechanism for procurement and control at a massive cost in stagnation, waste, demoralization, and ecological failure.

Scott Alexander, “Book Review: Seeing Like a State”, Slate Star Codex, 2017-03-16.

March 13, 2019

QotD: Le Corbusier

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

Le Corbusier was challenged on his obsession with keeping his plan in the face of different local conditions, pre-existing structures, residents who might want a say in the matter, et cetera. Wasn’t it kind of dictatorial? He replied that:

    The despot is not a man. It is the Plan. The correct, realistic, exact plan, the one that will provide your solution once the problem has been posited clearly, in its entirety, in its indispensable harmony. This plan has been drawn up well away from the frenzy in the mayor’s office or the town hall, from the cries of the electorate or the laments of society’s victims. It has been drawn up by serene and lucid minds. It has taken account of nothing but human truths. It has ignored all current regulations, all existing usages, and channels. It has not considered whether or not it could be carried out with the constitution now in force. It is a biological creation destined for human beings and capable of realization by modern techniques.

What was so great about this “biological creation” of “serene and lucid minds”? It … might have kind of maybe been evenly-spaced rectangular grids:

    People will say: “That’s easily said! But all your intersections are right angles. What about the infinite variations that constitute the reality of our cities?” But that’s precisely the point: I eliminate all these things. Otherwise we shall never get anywhere.

    I can already hear the storms of protest and the sarcastic gibes: “Imbecile, madman, idiot, braggart, lunatic, etc.” Thank you very much, but it makes no difference: my starting point is still the same: I insist on right-angled intersections. The intersections shown here are all perfect.

Scott uses Le Corbusier as the epitome of five High Modernist principles.

First, there can be no compromise with the existing infrastructure. It was designed by superstitious people who didn’t have architecture degrees, or at the very least got their architecture degrees in the past and so were insufficiently Modern. The more completely it is bulldozed to make way for the Glorious Future, the better.

Second, human needs can be abstracted and calculated. A human needs X amount of food. A human needs X amount of water. A human needs X amount of light, and prefers to travel at X speed, and wants to live within X miles of the workplace. These needs are easily calculable by experiment, and a good city is the one built to satisfy these needs and ignore any competing frivolities.

Third, the solution is the solution. It is universal. The rational design for Moscow is the same as the rational design for Paris is the same as the rational design for Chandigarh, India. As a corollary, all of these cities ought to look exactly the same. It is maybe permissible to adjust for obstacles like mountains or lakes. But only if you are on too short a budget to follow the rationally correct solution of leveling the mountain and draining the lake to make your city truly optimal.

Fourth, all of the relevant rules should be explicitly determined by technocrats, then followed to the letter by their subordinates. Following these rules is better than trying to use your intuition, in the same way that using the laws of physics to calculate the heat from burning something is better than just trying to guess, or following an evidence-based clinical algorithm is better than just prescribing whatever you feel like.

Fifth, there is nothing whatsoever to be gained or learned from the people involved (e.g., the city’s future citizens). You are a rational modern scientist with an architecture degree who has already calculated out the precise value for all relevant urban parameters. They are yokels who probably cannot even spell the word architecture, let alone usefully contribute to it. They probably make all of their decisions based on superstition or tradition or something, and their input should be ignored For Their Own Good.

And lest I be unfair to Le Corbusier, a lot of his scientific rational principles made a lot of sense. Have wide roads so that there’s enough room for traffic and all the buildings get a lot of light. Use rectangular grids to make cities easier to navigate. Avoid frivolous decoration so that everything is efficient and affordable to all. Use concrete because it’s the cheapest and strongest material. Keep pedestrians off the streets as much as possible so that they don’t get hit by cars. Use big apartment towers to save space, then use the open space for pretty parks and public squares. Avoid anything that looks like a local touch, because nationalism leads to war and we are all part of the same global community of humanity. It sounded pretty good, and for a few decades the entire urban planning community was convinced.

Scott Alexander, “Book Review: Seeing Like a State”, Slate Star Codex, 2017-03-16.

March 9, 2019

Old posts (from the old blog) about Chinese official economic statistics

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

This post at Continental Telegraph a few days back reminded me I wanted to get around to gathering some of my older posts about the reasons to take the official GDP numbers from the Chinese government with more than just a pinch of salt. Here’s my very first rant on the topic from 10 August, 2004 (original expired URL – http://bolditalic.com/quotulatiousness_archive/000323.html):

On my way in to work this morning, I heard a stock advisor doing his best to make reasonable assumptions about what the average listener needed to know about the economy. This guy has been pretty level-headed in the past, but this morning’s talk just got my head ready to explode.

The topic of discussion was the Chinese economy and how the Chinese central bank was having to take greater efforts to rein in economic expansion. He talked about how many different sectors of the North American economy were, to greater or lesser degree, depending more and more on Chinese growth to increase their own investments and output. The idea that the Chinese economy was "overheating" was bandied about. He closed by indicating that a slight drop in the official growth rate from 9.8% to 9.6% showed that the Chinese central bank was seeing some results from their intervention in the economy.

There are so many things wrong here that I’m almost at a loss where to start. While there is no doubt that China is a fast-growing economy, the most common mistake among both investors and pundits is to assume that China is really just like South Carolina or Ireland … a formerly depressed area now achieving good results from modernization. The problem is that China is not just the next Atlanta or Slovenia. China is still, more or less, a command economy with a capitalist face. One of the biggest players in the Chinese economy is the army, and not just in the sense of being a big purchaser of capital goods (like the United States Army, for example).

The Chinese army owns or controls huge sectors of the economy, and runs them in the same way it would run a division or an army corps. The very term "command economy" would seem to have been minted to describe this situation. The numbers reported by these "companies" bear about the same resemblance to reality as those posted by Enron or Worldcom. With so much of their economy not subject to profit and loss, every figure from China must be viewed as nothing more than a guess (at best) or active disinformation.

Probably the only figures that can be depended upon for any remote accuracy would be the imports from other countries — as reported by the exporting firms, not by their importing counterparts — and the exports to other countries. All internal numbers are political, not economic. When a factory manager can be fired, he has his own financial future at stake. When he can be sentenced to 20 years of internal exile, he has his life at stake. There are few rewards for honesty in that sort of environment: and many inducements to go along with what you are told to do.

Under those circumstances, any growth figures are going to be aggregated from all sectors, most of which are under strong pressure to report the right numbers, not necessarily corresponding with any real measurement of economic activity. So, if the economic office wants to see a drop in the economy, that’s what they’ll get.

Basing your own personal financial plans on numbers like this would quickly have you living in a cardboard box under a highway overpass. Companies in the soi-disant free world have shareholders or owners to answer to. Companies in China exist in a totally different environment.

I returned to the same topic on October 25, 2004, triggered by yet another talking head on the radio under the heading “More Economic Voodoo — or is that Feng Shui?” (original URL – http://www.bolditalic.com/quotulatiousness_archive/000580.html):

Again this morning, I was listening to my local jazz radio station on the way in to work. As usual, they had a broker from CIBC Wood Gundy giving portfolio advice at about 9:20 a.m. Today’s talk was about investing in China, and how the markets have been reacting to the recent small drop in the official GDP growth figures released by the Chinese central bank.

This time, the emphasis was on the idea that in spite of the breathtaking growth figures, Chinese firms still are not particularly profitable and that therefore there are better ways of investing your money to benefit from all that growth. Unlike the last time I addressed this issue, this time I thought that the advisor was actually making pretty good sense. The incredible transformation of China from a pure command-driven economy to a mixed economy will certainly provide lots of opportunities for people to get rich; it will also provide even more opportunities to lose big money.

Much of the problem is that even now, the Chinese economy is not particularly free: the official and unofficial controls on the economy provide far too many opportunities for rent-seeking officialdom to play favourites and cripple antagonists (and for once, "cripple" is not just a bit of hyperbole). Any numbers provided by the Chinese authorities cannot be depended upon, and should probably only be viewed as an indication of what the Chinese government wants the outside world to believe.

Even in a relatively free economy like Canada, the underground economy can be huge, with plenty of economic activity happening out of reach of the taxman. In China, where everybody was raised in an environment where providing the "wrong" answer to your leader could get you imprisoned (or executed) as an economic criminal, the numbers upon which the bankers and financial officials depend can only be described as extremely unreliable.

Update 26 October: The Last Amazon asks a highly pertinent and pointed question:

    In the past week, the Globe and Mail has been featuring the economic engine that China has become. Its economy is thriving so much so that Chinese government owned companies like China Minmetals Corp (which had revenues in 2003 of USD$11.7 billion) is currently negotiating to buy outright 100% of the stock of the Canadian mining corporation, Noranda Inc. The total stock is estimated at approximately CDN$6.7 billion.

    If the Chinese government can afford to buy Noranda Inc. why hasn’t anyone asked when China will reimburse the overburdened Canadian taxpayers of this fair land for the Cdn$65.4 million that has been given to China as foreign aid?

I managed to stay away from the topic until April 13, 2007, when I posted “The Chinese Economy”, which largely quoted from my first two posts (old URL – http://bolditalic.netfirms.com/quotulatiousness_archive/003649.html):

Everyone must have heard many different variations on how incredible the Chinese economy is: spectacular growth, innovations galore, etc., etc. And there’s much truth to it — China has been industrializing at a mind-croggling pace. At least, the visual evidence says so. The economic data coming out of China is, to be kind, not as dependable as similar data from most other countries. […]

Three years on, I must retract a tiny bit there … Enron’s and Worldcom’s figures, while deliberately misleading, were refutable (and the culprits taken to court). […]

Samizdata links to a brief Tyler Cowen post which includes this quote:

    …of the 3,220 Chinese citizens with a personal wealth of 100 million yuan ($13 million) or more, 2,932 are children of high-level cadres. Of the key positions in the five industrial sectors – finance, foreign trade, land development, large-scale engineering and securities – 85% to 90% are held by children of high-level cadres.

That’s even higher than I expected. But it’s an excellent example of what I originally wrote about back in 2004: the economy isn’t free, and the beneficiaries are disproportionally those who are politically well-connected. Caveat investor.

And that was when I discovered that my “full” backup of files from the old site is actually missing nearly a year of posts from May 2008 to May 2009 (when I moved to the current site). I vaguely recall that Jon (my former virtual landlord) was having problems with limited storage on that site — I was just a freeloading guest — so perhaps one of the things we lost was the auto-archiving after we reached a certain capacity.

Thanks to the Wayback Machine, I found a couple of other entries but they were often just rehashes of the first two posts interspersed with quotations from articles I felt were being too Pollyanna-ish about the Chinese economic numbers, like this one from May 2, 2008:

Those untrustworthy Chinese economic numbers

Regular readers will know that I’ve been a long-term skeptic about the economic figures reported by the Chinese government (for example, here and here back in 2004). As a result, this post at the Economist is not very surprising:

    As China’s importance in the global economy increases, investors are paying more attention to its economic numbers. Yet the country’s official statistics are notoriously ropy. Some commentators accuse China’s government of overstating GDP growth for political reasons, others complain that the official inflation rate is fraudulently low. So which data can you trust?

    One reason to be suspicious of GDP figures is that China is always one of the first countries to report them, usually only two weeks after the end of each quarter. Most developed economies take between four and six weeks to produce them.

However, The Economist still feels that the Chinese economy is larger than reported. My sense of distrust in the figures argues for it being neither as big nor as robust as the reported figures indicate. They’re professional economic reporters … I’m a guy typing a blog entry. I wonder what the long-term odds are for either of us to be closer to the truth?

It’s tough to disagree with this, though:

    The prize for the dodgiest figures goes to the labour market. The quarterly urban unemployment rate is meaningless because it excludes workers laid off by state-owned firms as well as large numbers of migrant workers, who normally live in urban areas but are not registered. Wage figures are also lousy. There has recently been much concern about the faster pace of increase in average urban earnings. But this series does not cover private firms, which are where most jobs have been created in recent years.

    Now that China is such an engine of global growth, it urgently needs to improve its economic data. Only a madman would drive a juggernaut at full speed with a faulty speedometer, a cracked rear-view mirror and a misty windscreen.

By this point, Jon was referring to my obsession with bogus Chinese economic statistics as my “hobby horse” … yet it wasn’t unknown for him to send me links to articles on that very topic. Here’s another post, courtesy of the Wayback Machine, from January 23, 2009:

China’s economic situation

There’s an article at The Economist today that shows a touching belief in the magic of the Chinese economy. The reported Gross Domestic Product has fallen to “only” 5.8%. The Economist‘s writer spends much of the article worrying about this gloomy report:

    New figures show that China’s GDP growth fell to 6.8% in the year to the fourth quarter, down from 9% in the third quarter and half its 13% pace in 2007. Growth of 6.8% may still sound pretty robust, but it implies that growth was virtually zero on a seasonally adjusted basis in the fourth quarter.

    Industrial production has slowed even more sharply, growing by only 5.7% in the 12 months to December, compared with an 18% pace in late 2007. Thousands of factories have closed and millions of migrant workers have already lost their jobs. But there could be worse to come. Chinese exports are likely to drop further in coming months as world demand shrinks. Qu Hongbin, an economist at HSBC, forecasts that exports in the first quarter could be 19% lower than a year ago. 2009 may well see the first full-year decline in exports in more than a quarter of a century.

    Economists have become gloomier about China’s prospects, with many now predicting GDP growth of only 5-6% in 2009, the lowest for almost two decades.

I’ve blogged about the Chinese economy on a few occasions (most recently here), generally with the same concern: that the numbers reported cannot be relied upon. The same is true here. Interestingly, the Economist article I linked to back in May makes this point quite well, yet today’s article appears to treat the Chinese government’s numbers as solid.

China has changed substantially from twenty years ago, and in many ways for the better. Most ordinary Chinese today are more free — economically anyway — than they were a generation ago, and there is a lot more opportunity for individuals to set up businesses and to succeed without needing Party connections. All this is indisputable … yet vast swathes of the Chinese economy are a legacy of the worst command-and-control period. It’s not an exaggeration to say that we can expect to discover the “official numbers” have absolutely no relationship to reality, because the numbers are compiled from various sources including both free-r quasi-capitalist companies and tottering government-owned (and often People’s Liberation Army-owned) conglomerates which cannot be depended upon to report anything accurately.

An example from this article: “a fall in electricity output of 6% in the year to the fourth quarter, down from average annual growth of 15% over the previous five years.” That’s not just a reduction in the rate of growth, that’s a reported drop in output of 6%. Imagine what the state of a European or Japanese/Korean economy running at only 94% of electricity … it’d be something you’d only see at times of severe economic contraction, not as a sign of a slow-down in growth.

Finally, on May 22, 2009, a final post on the topic at the old blog:

Official Chinese statistics

If you’ve read the blog for a while, you’ll know that I’m pretty skeptical about how believable the official statistics coming from the Chinese government may be. The Economist is somewhat undecided on the matter … sometimes publishing articles that treat the official numbers as legitimate and other times, showing more doubt:

    Part of the recent optimism in world markets rests on the belief that China’s fiscal-stimulus package is boosting its economy and that GDP growth could come close to the government’s target of 8% this year. Some economists, however, suspect that the figures overstate the economy’s true growth rate and that Beijing would report 8% regardless of the truth. Is China cheating?

    Economists have long doubted the credibility of Chinese data and it is widely accepted that GDP growth was overstated during the previous two downturns. In 1998-99, during the Asian financial crisis, China’s GDP grew by an average of 7.7%, according to official figures. However, using alternative measures of activity, such as energy production, air travel and imports, Thomas Rawski of the University of Pittsburgh calculated that the growth rate was at best 2%. Other economists reckon that Mr Rawski was too pessimistic. Arthur Kroeber of Dragonomics, a research firm in Beijing, estimates GDP growth was around 5% in 1998-99, for example. The top chart, plotting the official growth rate against estimates by Dragonomics, clearly suggests that some massaging of the government statistics may have gone on. The biggest adjustment seems to have been made in 1989, the year of political protests in Tiananmen Square. Officially, GDP grew by over 4%; Dragonomics reckons it actually declined by 1.5%.

Of course, The Economist doesn’t want to lose sales in China, so the last paragraph of the article blithely re-assures readers that things are improving and that the official numbers are much harder to fudge now than they used to be. That may well be true (I rather hope it is), but in the same way that you can get much more impressive growth from a very small base, you can become much more honest with your numbers when you’re starting from pure fiction.

[…] Let’s just say that I’m still unconvinced.

After that, my hobby-horse rides can be found by searching for “china economy” (or just click this link) on the current blog, or you can just peruse the China category.

QotD: “Scientific” urban planning versus messy, unscientific, evolved town growth

Filed under: Architecture, Environment, Government, History, Quotations — Tags: , , — Nicholas @ 01:00

Natural organically-evolved cities tend to be densely-packed mixtures of dark alleys, tiny shops, and overcrowded streets. Modern scientific rationalists came up with a better idea: an evenly-spaced rectangular grid of identical giant Brutalist apartment buildings separated by wide boulevards, with everything separated into carefully-zoned districts. Yet for some reason, whenever these new rational cities were built, people hated them and did everything they could to move out into more organic suburbs. And again, for some reason the urban planners got promoted, became famous, and spread their destructive techniques around the world.

Ye olde organically-evolved peasant villages tended to be complicated confusions of everybody trying to raise fifty different crops at the same time on awkwardly shaped cramped parcels of land. Modern scientific rationalists came up with a better idea: giant collective mechanized farms growing purpose-bred high-yield crops and arranged in (say it with me) evenly-spaced rectangular grids. Yet for some reason, these giant collective farms had lower yields per acre than the old traditional methods, and wherever they arose famine and mass starvation followed. And again, for some reason governments continued to push the more “modern” methods, whether it was socialist collectives in the USSR, big agricultural corporations in the US, or sprawling banana plantations in the Third World.

Traditional lifestyles of many East African natives were nomadic, involving slash-and-burn agriculture in complicated jungle terrain according to a bewildering variety of ad-hoc rules. Modern scientific rationalists in African governments (both colonial and independent) came up with a better idea – resettlment of the natives into villages, where they could have modern amenities like schools, wells, electricity, and evenly-spaced rectangular grids. Yet for some reason, these villages kept failing: their crops died, their economies collapsed, and their native inhabitants disappeared back into the jungle. And again, for some reason the African governments kept trying to bring the natives back and make them stay, even if they had to blur the lines between villages and concentration camps to make it work.

Why did all of these schemes fail? And more importantly, why were they celebrated, rewarded, and continued, even when the fact of their failure became too obvious to ignore? Scott gives a two part answer.

The first part of the story is High Modernism, an aesthetic taste masquerading as a scientific philosophy. The High Modernists claimed to be about figuring out the most efficient and high-tech way of doing things, but most of them knew little relevant math or science and were basically just LARPing being rational by placing things in evenly-spaced rectangular grids.

But the High Modernists were pawns in service of a deeper motive: the centralized state wanted the world to be “legible”, ie arranged in a way that made it easy to monitor and control. An intact forest might be more productive than an evenly-spaced rectangular grid of Norway spruce, but it was harder to legislate rules for, or assess taxes on.

The state promoted the High Modernists’ platitudes about The Greater Good as cover, in order to implement the totalitarian schemes they wanted to implement anyway. The resulting experiments were usually failures by the humanitarian goals of the Modernists, but resounding successes by the command-and-control goals of the state. And so we gradually transitioned from systems that were messy but full of fine-tuned hidden order, to ones that were barely-functional but really easy to tax.

Scott Alexander, “Book Review: Seeing Like a State”, Slate Star Codex, 2017-03-16.

February 6, 2019

The “Green New Deal” of Alexandria Ocasio-Cortez won’t work

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

Tim Worstall predicts — well in advance of hearing any details of Alexandria Ocasio-Cortez’s Green New Deal — that it won’t work:

Alexandria Ocasio-Cortez speaking at the Reardon Convention Center in Kansas City, on 20 July 2018.
Photo by Mark Dillman via Wikimedia Commons.

Alexandria Ocasio-Cortez is to reveal the details of her Green New Deal in the next few days – the one thing we absolutely know about this being that it won’t work. This isn’t a commentary upon climate change nor the desirability of doing something about it. This is just a simple statement of fact about the universe we inhabit. As with the climate the economy is a complex, even chaotic, thing. Plans to substantially reform it therefore don’t work, no matter how egghead the planners nor pure in motive the instigators.

All of this being why the very reports which tell us we should do something about climate change – say, the Stern Review – tell us that we shouldn’t try to have those detailed plans for what we’ll do and how we’ll do it. Instead we’ve got to use the only management technique we’ve got for something this complex, markets and prices. Which is why near every economist who has even thought about the problem advocates either cap and trade or a carbon tax.

This is, of course, just a rerun of Friedrich Hayek’s point in his Nobel Lecture, “The Pretence of Knowledge”. That universe out there is a complicated place. There’s just no manner that the planner can gain enough information about it, in anything like real time, to be able to plan it. We’ve thus got to use other methods to bend that reality to our will. We can jam a crowbar into prices with a carbon tax for example, but we can’t start planning who should be taking how many car journeys in what sort of vehicles powered in what manner.

So, the Green New Deal from Alexandria Ocasio-Cortex, it fails at this first and basic hurdle. She’s using the wrong method to try to solve the agreed upon problem. Central planning just doesn’t work.

[…]

The reason we want cheap solutions to climate change is that this justifies producing more of a solution. Again, the justification of doing something about climate change is that it will be expensive. So, we should spend up to the amount of the damage to prevent it. Say it will cost $100, then we’re willing to spend up to $99.99 to stop it. This makes us one cent better off. We’re not willing to spend $200 to stop those $100 damages, that would make us poorer.

And more – we should spend that $99.99 as efficiently as we can because that means we’ll stop more climate change for our dollars. That also makes us richer.

Don’t forget, we’ve all already agreed that we’re going to have some climate change. Our arguments are over how much and how much are we willing to do to stop how much of it?

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