Quotulatiousness

July 30, 2020

Membership in the Laurentian Elite isn’t about intelligence, it’s about power and status

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

In The Line, Andrew Potter wonders why Canadian political elites tend to be so … dumb:

Typical image search results for “Justin Trudeau socks”

Recent events in Canadian federal politics have raised anew the familiar conundrum: why are high status people so stupid?

Anyone who has had much interaction with high status individuals is familiar with the phenomenon. It isn’t the shallow ignorance of the merely uneducated, or the malevolent brainlessness of the criminal class. It’s not even your bog-standard lack of intelligence. No, high class stupidity is of a very special type: A sort of studied lack of interest in facts, an offhand relationship with norms, an outright animosity to new ideas.

But it is important to specify just what we mean by “high status,” because status means different things to different people. (Indeed, how you define “status” is one of the key markers of class differences in Canada.) For some people status is defined by money or wealth, for others it is a function of education, while for still others it is a matter of taste. And even if you are sure it comes down to money, there are clear status differences based on how you got rich. Everyone instinctively understands the difference between the guy who got rich off a chain of used car dealerships and the one who made his bundle selling his dotcom startup, and there’s a reason why “nouveau riche” is a derogatory term.

And so the high-status individuals we are talking about here are the highest of high, the upperest of upper, the ones whose wealth is inherited, whose lives are defined by their privilege, and for whom the question of which rung of the status ladder they stand upon never arises, because there is no one above them.

Which brings us to the Liberal government, and in particular to Prime Minister Justin Trudeau, Minister of Finance Bill Morneau and the scandal over the sole-sourced contract (sorry, “contribution agreement”) with a branch of the Kielburger-led WE conglomerate. First, Canadaland broke the story two weeks ago that Trudeau’s mother and brother had received almost a quarter of a million dollars in speakers’ fees from the WE organization.

[…]

Trudeau and Morneau are both very wealthy men, and if they were going to get into the business of selling their offices it wouldn’t be to a children’s charity for penny ante sums. No, as a number of columnists have pointed out, what is at work here is not corruption, it is privilege: It probably never occurred to either Trudeau or Morneau that this sort of thing was wrong. And it didn’t occur to them, because they are the sort of people who have spent their lives not worrying about the comings and goings of money and how it may affect their lives.

That is why the defining feature of the WE scandal is not the corruption, but the almost deliberate stupidity that is on display — in particular the lack of interest in basic material facts or in following the rules that govern the lives of most people. Which brings us back to the question we started with.

Update: Corrected the attribution for this … Andrew Potter’s article appeared in The Line, not The Dominion. Apologies for the brain fart…

July 23, 2020

Justin Trudeau and the Overton Window

Filed under: Cancon, Media, Politics — Tags: , , , , , , — Nicholas @ 05:00

Ted Campbell explains how Canada’s mainstream media work so hard to move the Overton Window to benefit Justin Trudeau and the Liberal Party:

… this explanation from Politico might help:

    The concept of the “Overton window,” the range of ideas outside which lie political exile or pariahdom, was first batted around in a series of conversations by the late free-market advocate Joseph Overton in the 1990s. After Overton’s untimely death in a plane crash in 2003, his friend and colleague at the libertarian Mackinac Center, Joseph Lehman, formalized and named the idea in a presentation meant to educate fellow think-tank warriors on the power of consistent advocacy. Ring the bell loudly for your idea, no matter how unpopular, and back it up with plenty of research and evidence, so the thinking went. Today’s fringe theory can become tomorrow’s conventional wisdom by the shifting of the finely tuned gears that move popular opinion; to Overton and Lehman the role of the think tank was to at least familiarize voters with these ideas, giving them an institutional home when public opinion finally moved their way.

Or, and even more brief visual explanation is:

Anyway, I believe that the Liberal Party of Canada and its allies in e.g. the CBC, The Star, and amongst the others who speak for the Laurentian Elites are working very hard, right now, to move the Overton Window frame of one idea from “Unthinkable” to at least barely “Acceptable.” That idea is that Justin Trudeau’s personal corruption (I believe that’s the right word) is acceptable because the alternative is a Conservative government that is, by Liberal/Laurentian Elite definition, authoritarian (fascist), homophobic, militaristic, racist, and sexist.

That’s right, the Liberal/Laurentian Elites admit that Justin Trudeau is dishonest, that he, unthinkingly, breaks the rules, over and over again ~ because, you see, he’s a really nice person but, sadly, he’s just not very smart. I have even made that case for them. I suggested, almost a year ago, that Justin Trudeau is an intellectual lightweight who is in no way qualified to hold high office … but he has the “second hand” celebrity of a famous name and he’s photogenic, too, and so, in 21st-century Canada he’s electable.

July 9, 2020

Austin Bay on how Malawi fixed a crooked election

Filed under: Africa, Government, Law — Tags: , , , — Nicholas @ 03:00

At Strategy Page, Austin Bay recounts the efforts to overturn an election that was clearly fraudulent in the small land-locked African country of Malawi:

Malawi and surrounding countries in southern Africa.
Satellite image via Google Maps.

Since he retained the title of president, Mutharika believed he controlled the guns and the courts. The protests would fade.

He learned otherwise. Malawi’s military, the Malawi Defense Force (MDF) and the Malawi Police Service, watched the country carefully, keeping order but not taking sides. The opposition appealed to Malawi’s highest court, the Constitutional Court. MDF commanders made it clear their service, as protectors of the constitution, would protect the court’s justices and respect the court’s decision.

Ignoring intimidation and enticements (Mutharika offered splendid early retirement), in February 2020, the court annulled the 2019 results as tainted and ordered new elections in June 2020 — the Fresh Presidential Election.

MDF soldiers prepared to secure the FPE’s paper ballots. In a June briefing, an MDF general told motorists to “maintain a distance of at least one kilometer between them and vehicles” carrying ballots. Enter the security zone and get a warning, but “(overtly) following the vehicles can lead to loss of lives if one is not careful.” Beware political thugs — MDF weapons prevent ballot hijacking.

Voters need protection, too. On June 22, MDF soldiers in central Malawi detained 16 men local citizens identified as intruders seeking to disrupt the vote. When police officers questioned the 16, they admitted they worked for Mutharika’s governing Democratic Progressive Party.

On June 23, opposition leader Chakwera received 60% of the vote in the untainted do-over. Mutharika got 38%. An MDF contingent immediately began protecting Chakwera.

Voting irregularities occur in mature democracies. However, election fraud does severe harm to developing nations where the disenfranchised have little or no systemic recourse and free speech is risky. Hope and nascent civil participation give way to wrath and alienation, which produce violence and destruction, not stability and economic development.

In the six decades since decolonization, election rigging by sub-Saharan Africa elites has stunted economic and social progress in nations whose people deserve far better (see Ghana). Disregard of constitutional law and violent intimidation of opposition voters by the party in power inevitably accompany election theft. Burundi and Congo are examples.

March 25, 2020

Armchair History: The Borgia

Filed under: Europe, History, Italy, Politics, Religion — Tags: , , , — Nicholas @ 02:00

Overly Sarcastic Productions
Published 30 Jun 2015

CONTENT DISCLAIMER: This video no longer meets my standards of quality for historical research and presentation. I made this one in the days long past, when the question of “How do I make an entertaining and historically interesting video” was answered by “IDK, memes I guess?”. This video in particular was an experiment with a shorter format, and is by no means definitive history. Take the video above with a grain of salt and enjoy the jokes.

In what could be a landmark in terms of progress, Overly Sarcastic Productions has decided to start making SHORT videos as well as rather long ones.

The Borgias were one messed up family, I tell you what.

March 3, 2020

QotD: Public service and competitive private enterprise

Filed under: Britain, Bureaucracy, Business, Government, Quotations — Tags: , , , , — Nicholas @ 01:00

Anyone who deals with the general UK public (coercive) sector regularly, knows it is a cesspit of laziness, incompetence, arrogance and corruption, riddled with civil servants that are neither civil nor servants.

And I’m not suggesting that the levels of corruption and incompetence are comparable to those found in third world hellholes. A local official in your county council is very unlikely to demand a bribe and then have your daughter raped by his buddies if you decline. He’s especially unlikely to get away with it, and then douse your family in petrol and burn them alive if you complain – those are the levels of corruption found elsewhere in the world, so we need to retain some perspective here.

But those countries have not benefited from a thousand years of sacrifice to earn us a culture that has learned through bitter experience how to run a country. Our civil servants should be performing at the highest standard and be the best in the world, because what they inherited was a culture that conquered that world, and brought civilisation and progress (often at great cost) to every corner of it.

That they have fallen from these heights and now occupy such low places should be a matter for great national shame. And yet they continue to lord it over those they pretend to serve – try calling your local planning department if you want instruction in how supercilious a local functionary feels able to be when speaking to those he claims to serve. If you just want them to do their job, you better be prepared to beg.

Whereas on the flip side, we might agree that the private (voluntary) sector is largely filled with honest and hardworking people and entrepreneurs, but there are crony capitalists out there too.

Your local butcher and baker (those that have survived the regulatory avalanches under which the crony capitalists have begged their pet politicians to bury them) remain staunch servants of their customers (through regard to their own interests), whereas oligoplists (supermarkets, telcos, insurance companies, banks, energy suppliers or transport companies) deliver to us just what the monopolists of government do – an icy contempt that would soon turn to withering small arms fire if the laws allowed it.

Alex Noble, “Corruption In The Coercive And Voluntary Sectors: Rotten Apples? Or The Tips of Icebergs?”, Continental Telegraph, 2019-12-02.

March 2, 2020

Downfall of the Superpower China – Ming and Qing Dynasty l HISTORY OF CHINA

Filed under: China, Economics, History — Tags: , , , — Nicholas @ 02:00

IT’S HISTORY
Published 17 Aug 2015

With the dynasties of the Ming and the Qing came social security and flourishing international trade. The White Lotus Movement advocated progressive thinking in the time of the conservative Ming dynasty. In 1616 the Qing dynasty came to power. Also known as the Manchu dynasty, the Qing refused to open their borders to limitless trade which led to frustrated European merchants. This caused hostility and mistrust of the “barbaric Chinese”. Shortly thereafter China’s economy lost its race against European Colonialism and would lose military influence after gunpowder reached Europe. All about the fall of the former Chinese superpower in this episode on IT’S HISTORY!

» SOURCES
Videos: British Pathé (https://www.youtube.com/user/britishp…)
Pictures: mainly Picture Alliance
Content:
Twitchett, Denis and Loewe, Michael. The Cambridge History of China. Cambridge University Press.
Wilkinson, Endymion, Chinese History: A New Manual. Harvard University, Asia Center
Loewe, Michael; Shaughnessy, Edward L. The Cambridge History of Ancient China. Cambridge University Press
John M. Roberts A Short History of the World. Oxford University Press
Xu, Pingfang The Formation of Chinese Civilization: An Archaeological Perspective. Yale University Press.
Fairbank, J. K.; Goldman, M. China: A New History. Harvard University Press. ”

» ABOUT US
IT’S HISTORY is a ride through history – Join us discovering the world’s most important eras in IN TIME, BIOGRAPHIES of the GREATEST MINDS and the most important INVENTIONS.

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» CREDITS
Presented by: Guy Kiddey
Script by: Guy Kiddey
Directed by: Daniel Czepelczauer
Director of Photography: Markus Kretzschmar
Music: Markus Kretzschmar
Sound Design: Bojan Novic
Editing: Markus Kretzschmar

A Mediakraft Networks original channel
Based on a concept by Florian Wittig and Daniel Czepelczauer
Executive Producers: Astrid Deinhard-Olsson, Spartacus Olsson
Head of Production: Michael Wendt
Producer: Daniel Czepelczauer
Social Media Manager: Laura Pagan and Florian Wittig

Contains material licensed from British Pathé
All rights reserved – © Mediakraft Networks GmbH, 2015

February 7, 2020

QotD: The negative economic and human value of foreign aid

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

I’d like nothing better than to be proven wrong, but I’m gloomily confident that my prediction of failure will be verified. History and sound economics both warn that foreign aid is far more likely to harm than to help economies.

During the past four decades, Western governments have lavished on Africa nearly a half-trillion dollars in aid. But to no good effect. Everyone agrees that Africans remain desperately poor.

Academic studies confirm aid’s ineffectiveness. In his celebrated 2001 book, The Elusive Quest for Growth, former World Bank economist William Easterly carefully reviews aid’s history and concludes that it is one of abject failure.

Indeed, many studies find that aid harms economies. For example, University of Regina economist Tomi Ovaska, writing in the Cato Journal, finds that “a 1 percent increase in aid as a percent of GDP (gross domestic product) decreased annual real GDP per capita growth by 3.65 percent.”

The reasons for this dismal record should be plain to anyone with a rudimentary understanding of economics. Failure of economies to develop is not because of lack of resources. Instead, it’s because of overbearing and corrupt governments, as well as to the dysfunctional social and cultural institutions that keep such governments in power and that are themselves fostered by such governments.

As long as a country is cursed by a malignant government and dysfunctional institutions, no amount of foreign aid will help it.

Don Boudreaux, “Faulty Band-Aid”, Pittsburgh Tribune-Review, 2005-06-18.

January 11, 2020

The bubbly 1720s

Filed under: Americas, Britain, Business, Economics, France, Government, History — Tags: , , , , , — Nicholas @ 03:00

In the latest Age of Invention newsletter, Anton Howes looks at Britain’s volatile financial scene in the 1720s:

William Hogarth – The South Sea Scheme, 1721. In the bottom left corner are Protestant, Catholic, and Jewish figures gambling, while in the middle there is a huge machine, like a merry-go-round, which people are boarding. At the top is a goat, written below which is “Who’l Ride”. The people are scattered around the picture with a sense of disorder, while the progress of the well-dressed people towards the ride in the middle represents the foolishness of the crowd in buying stock in the South Sea Company, which spent more time issuing stock than anything else.
Scanned from The genius of William Hogarth or Hogarth’s Graphical Works via Wikimedia Commons.

Over in France, a Scottish banker named John Law had in the late 1710s overseen an ambitious scheme to reorganise the government’s finances. He ran the Mississippi Company, one of the many companies with monopolies on France’s international trade. His scheme was for the company to acquire all of the other similar monopolies, so that it could have a monopoly on all of the country’s intercontinental trade routes. By 1719, the Mississippi Company had swelled into a Company of the Indies, which in turn had purchased the right to collect French taxes, from which it took took its own cut. In exchange for acquiring these monopolies, Law’s new super-monopoly would buy up the French government’s accumulated war debts, allowing repayment on more generous terms. By allowing the state to borrow more cheaply, the scheme was to be a key plank in improving French military might.

Meanwhile, in Britain, a very similar project was afoot. Following the War of the Spanish Succession, one of the things Britain won from France was the asiento – the monopoly on supplying African slaves to Spain’s colonies in America. The asiento was given to the South Sea Company, which had the monopoly on British trade with South America, and which in 1720 began to follow a scheme similar to Law’s. Given developments in France, it would not do for the British state to be left behind in terms of its capacity to take on more debt for war. Thus, with political support, the South Sea Company began to buy up the government’s debt, persuading its creditors to exchange that debt for increasingly valuable company shares.

In 1720, both schemes came crashing down. In the case of Law’s scheme, he had printed paper currency with which people could buy his company’s shares, but in 1720 discovered he had printed too much. When he prudently tried to devalue the company’s shares to match the quantity of paper notes, the devaluation spun out of control. In the case of the South Sea Company, the causes of the crash were a little more mysterious, perhaps even verging on the mundane. One explanation is that too many wealthy investors simply tried to sell their shares so that they would have ready cash to spend on holidaying in Europe, precipitating a minor fall in the share price which then led to a more widespread panic. Regardless, it did not end well. The company itself continued for many years thereafter — it even got involved with whaling off the coast of Greenland — but the collapse of its share price ended its chance to restructure the government’s debts.

December 15, 2019

Policing London – The Bow Street Runners – Extra History – #3

Filed under: Britain, Government, History, Law — Tags: , , , , — Nicholas @ 06:00

Extra Credits
Published 14 Dec 2019

Henry Fielding was a dangerous man … with a pen. He had a razor-sharp wit and created the page-turner novel, but that’s not what we want to focus on here. Because Henry Fielding is also responsible for assembling London’s first organized police force. The Bow Street Runners were inspired by Wilde’s operation just … not corrupt. But Fielding quickly found that in London’s justice system, corruption was the assumed default, not the exception. He certainly had his work cut out for him!

Henry Fielding – Everything Wilde did but you know… without the whole… being morally bankrupt bit.

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December 14, 2019

Who will “Big Dairy” push as the next Conservative leader?

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

The Canadian supply management system is a classic case of concentrated benefits and diffused costs … all Canadians pay more for milk, cheese, and other dairy products, but the extra profits go to those who hold the quota allotment for production. During the last federal Conservative leadership race, the “temporary conservatives” were enough to push the Milk Dud over the top to defeat Maxime Bernier — because Bernier was outspoken in his opposition to the whole supply management cartel and threatened those guaranteed profits for the insiders. The Milk Dud has announced he’s stepping down, so who will Big Dairy choose to replace him?

Andrew Scheer, paid tool of Big Dairy, chugs some milk during a Press Gallery speech in 2017. I’ve called him the “Milk Dud” ever since.
Screencapture from a CTV video uploaded to YouTube.

To my mind the defining image of Andrew Scheer’s efforts to become prime minister of Canada, which officially came to an end Thursday, comes from the 2017 Press Gallery Dinner in Ottawa. “There’s some suggestion out there that I’m beholden to a certain group within the Conservative family,” he told the crowd, grinning. And then, dimples at maximum, he took a swig from a one-litre carton of Neilson two-per-cent milk.

It’s nice when politicians can poke fun at themselves. Most are really bad at it, betraying only their own ego. Scheer’s routine, by contrast, reportedly brought the house down. The problem is that, by all the evidence, Scheer was utterly beholden to the dairy industry. And absent the effects of alcohol, that’s not really very funny.

We knew at the time that, days before, Scheer had barely beaten Maxime Bernier in the party leadership contest with help from a few thousand votes from people whom Bernier not unreasonably called “fake Conservatives” — i.e., people who had purchased memberships for the sole purpose of voting for Scheer, for the sole purpose of maintaining supply management in the dairy industry (which Bernier opposes) intact.

We came to know later, thanks to a Dairy Farmers of Canada briefing book discovered by an aggrieved delegate to the 2018 party convention in Halifax, that the dairy lobby considered Scheer a “safety net.” Regardless of any vote by the party membership that might recommend freer markets in dairy, the book alleged, the farmers had Scheer’s commitment never to undermine supply management in an election platform.

Scheer denied any such deal existed, of course. But it seemed doubtful the dairy industry’s notoriously fearsome, professional and effective lobbyists could have been so misinformed.

It ought to have been a liability from the start: Here was the self-styled middle-class alternative to Justin Trudeau, the man who knows what it’s like to plan a family budget around the breakfast table, to scrimp and save, whose parents didn’t own a car, declaring his fealty to a cartel dedicated to inflating milk prices for the benefit of wealthy businesses. Har, har, har.

December 13, 2019

We won’t have the Milk Dud to kick around any more … eventually

Filed under: Cancon, Politics — Tags: , , — Nicholas @ 05:00

News of the moment in Canada is the sudden resignation of “Conservative” party leader Andrew “The Milk Dud” Scheer:

Andrew Scheer, paid tool of Big Dairy, chugs some milk during a Press Gallery speech in 2017. I’ve called him the “Milk Dud” ever since.
Screencapture from a CTV video uploaded to YouTube.

Andrew Scheer used money from the Conservative Party to pay costs of private schooling for his children, according to sources in contact with Global News. Some are suggesting this story might have ultimately let to Scheer’s resignation.

Scheer has since stepped down as leader of the Conservative Party, but he will not fully resign until the party has a replacement to fill the position.

According to some senior Conservative members, Scheer’s use of the Conservative Party of Canada funds was improper.

While in the House of Commons, Scheer said, “I just informed my colleagues in the Conservative caucus that I will be resigning as the leader of the Conservative Party of Canada and I will be asking the Conservative Party national council to immediately begin the process of organizing a leadership contest.”

“In order to chart the course ahead in the direction this party is heading, the party needs someone who can give 100 percent.”

Dustin van Vugt, the Executive Director of the Conservative Party of Canada wrote a statement saying, “All proper procedures were followed and signed off on by the appropriate people.”

Van Vugt talked about the party covering some of Scheer’s costs in the statement saying, “As is the normal practice for political parties, the Party offered to reimburse some of the costs associated with being a national leader and re-locating the family to Ottawa.”

Where, oh where will the “Conservatives” find a leader of Scheer’s “stature” to fill his dainty little shoes? Maybe Justin can spare one of his cast-offs…

December 9, 2019

Policing London – The Fall of Jonathan Wild – Extra History – #2

Filed under: Britain, History, Law — Tags: , , , — Nicholas @ 04:00

Extra Credits
Published 7 Dec 2019

Jonathan Wild had the whole crime system figured out. A man of justice by day, and leader of a criminal empire by night. But that is when Jack Sheppard came into his life. Jack Sheppard was a talented thief but an even more talented escape artist. And one of the last criminals in London who refused to bend the knee to Jonathan Wild. This was unacceptable. Jonathan Wild became obsessed. But obsessions can be dangerous. Every prison escape causes Sheppard’s popularity amongst the people, sick and tired of corruption, to grow. And the consequences may be deadly.

Join us on Patreon! http://bit.ly/EHPatreon

December 2, 2019

Policing London – The Thief-Taker General – Extra History – #1

Filed under: Britain, History, Law — Tags: , , , — Nicholas @ 04:00

Extra Credits
Published 30 Nov 2019

These days we kind of assume that police are a normal part of law and order. But that wasn’t always the case. In fact, it wasn’t the case for a lot of human history. So how did we start thinking of police as a natural part of a city? It all starts in London with the Thief-Taker General Jonathan Wilde, a man of two faces. Which one is real: valiant crime fighter or the puppet master of London’s underbelly?

Join us on Patreon! http://bit.ly/EHPatreon

November 18, 2019

The Opium War – Lost in Compensation l HISTORY OF CHINA

Filed under: Britain, China, Economics, History, Military — Tags: , , , , — Nicholas @ 06:00

IT’S HISTORY
Published 22 Aug 2015

The Opium War started as a dispute over trading rights between China and Great Britain. Regular trade between Europe and the Chinese had been ongoing for centuries. But China’s trading restrictions frustrated the British who were eager to supply the Chinese people with the increasingly popular narcotic opium. Circumventing the government’s attempts to ban opium trade by smuggling and bribery, China declared the death sentence on Opium smuggling and refused to compensate British tradesmen for any losses. Furiously, the Brits sent out a fleet to demand compensation and end the Cohong trading monopoly. Fierce battles and attacks on the Chinese coast were followed. Find out all about the First Opium War from Indy in our new episode of Battlefields!

» SOURCES
Videos: British Pathé (https://www.youtube.com/user/britishp…)
Pictures: mainly Picture Alliance
Content:
Lovell, Julia: The Opium War: Drugs, Dreams and the Making of China
Wei, Yuan: Chinese Account of the Opium War
McPherson, Duncan: The First Opium War – The Chinese Expedition 1840-1842
Merwin, Samuel: Drugging a Nation – The Story of China and the Opium Curse
Bernard, William Dallas; Hall, Sir William Hutcheon: Narrative of the Voyages and Services of the Nemesis, from 1840 to 1843.
Isabel Hilton (The Guardian): “The Opium War by Julia Lovell – review”
Perdue, Peter C. (MIT): The First Opium War http://ocw.mit.edu/ans7870/21f/21f.02…

» ABOUT US
IT’S HISTORY is a ride through history – Join us discovering the world’s most important eras in IN TIME, BIOGRAPHIES of the GREATEST MINDS and the most important INVENTIONS.

» HOW CAN I SUPPORT YOUR CHANNEL?
You can support us by sharing our videos with your friends and spreading the word about our work.

» CAN I EMBED YOUR VIDEOS ON MY WEBSITE?
Of course, you can embed our videos on your website. We are happy if you show our channel to your friends, fellow students, classmates, professors, teachers or neighbors. Or just share our videos on Facebook, Twitter, Reddit etc. Subscribe to our channel and like our videos with a thumbs up.

» CAN I SHOW YOUR VIDEOS IN CLASS?
Of course! Tell your teachers or professors about our channel and our videos. We’re happy if we can contribute with our videos.

» CREDITS
Presented by: Guy Kiddey
Script by: Dan Hungerford
Directed by: Daniel Czepelczauer
Director of Photography: Markus Kretzschmar
Music: Markus Kretzschmar
Sound Design: Bojan Novic
Editing: Markus Kretzschmar

A Mediakraft Networks original channel
Based on a concept by Florian Wittig and Daniel Czepelczauer
Executive Producers: Astrid Deinhard-Olsson, Spartacus Olsson
Head of Production: Michael Wendt
Producer: Daniel Czepelczauer
Social Media Manager: Laura Pagan and Florian Wittig

Contains material licensed from British Pathé
All rights reserved – © Mediakraft Networks GmbH, 2015

September 30, 2019

QotD: Oil price volatility

Filed under: Economics, Middle East, Politics, Quotations, Russia — Tags: , , , , — Nicholas @ 01:00

Why is the price of oil so volatile? I thought I knew the answer — scarcity and OPEC — till I read Aguilera and Radetzki. They make the case that depletion has never been much of a factor in driving oil prices, despite the obvious drying up of certain fields (such as the North Sea today). Nor did OPEC’s interventions to fix prices make much difference over the long run. What caused the price of oil to rise much faster than other commodities, though erratically and with crashes, they argue, was the result of one factor in particular.

There was a wave of nationalisation in the oil industry beginning in the 1960s. Today some 90 per cent of oil reserves are held by nationalised companies. ExxonMobil and BP are minnows compared with the whales owned by the governments of Saudi Arabia, Venezuela, Iran, Iraq, Kuwait, the United Arab Emirates, Nigeria and Russia. Post-colonial nationalisation affected many resource-based industries, but whereas many mineral and metal companies were privatised in the 1990s as their grotesque inefficiencies became visible, the same has not happened to state oil companies.

The consequence is that most oil is produced by companies that are milked by politicians, and consequently starved of cash (or incentives) for innovation and productivity. Lamenting “politicians’ extraordinary ability to mess things up”, the two authors note “the severely destructive role that can be played by political fights over the oil rent and its use”.

If politicians don’t get in the way, and we have two decades of relatively cheap oil it will be bad news for petro-dictators, oil-igarchs, ISIS thugs, and the promoters of wind power, solar power, nuclear energy and electric cars. But it is good news for everybody else, especially those on modest incomes.

Matt Ridley, “Low oil prices are a good thing”, The Rational Optimist, 2016-02-14.

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