Saturday, April 28, 2012

ECONOMICS FOR REAL PEOPLE: Planning without central plans

And in other news…

… Monday evening will see the second meeting for this semester of the Auckland Uni Economics Group. Here’s their note advertising the show:

ECONOMIC HARMONIES, IV: Planning Without Central Plans

It’s said that the market can’t plan; that without a central planner no planning can get done.

But as Stalin’s Great Grain Famine demonstrated, central planning couldn’t even produce grain—a simple commodity complex neither in production nor distribution.

It’s a mystery to many people how the market feeds people—feeds them, clothes them, houses them, provides them with iPads, iPhones and the collected works of One Direction—but just because they can’t see the planning themselves doesn’t mean there’s none there.

The market has a plan. It’s called the Price System.

The Price System is the means whereby hundreds of million individual decision-makers can coordinate their plans without ever having met each other.

This is the “Visible Hand” of the market that is all but invisible to those who can see only central planning, and not the products of the millions of interactions that ‘are the products of human action but not of human design’ representing the ‘spontaneous order’ of the market.

So this Monday at the Auckland Uni Economics Group we discuss the Price System and Economic Coordination—offering:

  • a horse auction,
  • answers to many questions, including
         * price signals: what exactly do they communicate?
         * who exactly sets prices?
          * on costs of production (and how so few economists understand their import)
          * if price reflects value, then why are diamonds (which merely glitter nicely) more expensive than
             water (which is the very stuff of life!)?

All this and more, including five simple principles to  help you understand how the market almost automatically coordinates the economic activity of every person on the planet, and why the result is order rather than an “anarchy of production.”

Come along and be both entertained and educated!
Riko Stevens
UoA Economics Group 

PS: Note that due to popular demand all meetings are now being held on Monday evenings instead of Thursday evenings. We hope to see you there!

PPS: Many of you have been asking if you can bring friends along, especially friends who are not students—or not economics students. Our answer: of course!  The more the merrier.

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Logic!

After weeks of talk, we've decided to kick off a course on Logic tomorrow morning in Mt Eden.

The course is Leonard Peikoff's Introduction to Logic, a four ten-lecture series featuring sessions on Basic Logical Theory, Informal Fallacies, Deductive Reasoning and Inductive Generalisation, Definitions and The Aristotelian Syllogism.

Yes, it's late notice. Sorry. But there it is.
[If anyone’s especially ken we can quite happily repeat the sessions at a more convenient later date.]

Sessions starting tomorrow will be at my office in Mt Eden, Level 1, 236 Dominion Rd: just down the road from Eden Park. If you're keen to join us at 10:30am tomorrow, or on subsequent Sundays, either call or text Riko Stevens, 0277 487021. ]

What: Introduction to Logic lecture course (four audio lectures in total)
Where: Organon Architecture offices, Level 1, 236 Dominion Rd (just down the road from Eden Park)
When: Tomorrow, Sunday, 10:30am

See you there!
PC

PS: I’ve corrected the course content now. Sorry If I’ve created any confusion.

Friday, April 27, 2012

FRIDAY MORNING RAMBLE: Anzac Week edition

It’s Friday. It’s the ramble. You know the drill.
But first, the quote for the week.

No concept man forms is valid unless he integrates it without
contradiction into the total sum of his knowledge.
- Ayn Rand

Think about it. Now, on with the show…

The Murdoch-bashing of the smart set who believes he ‘controls Britain’ has crossed the line from rational inquiry into David Icke/Ian Wishart territory. As Tim Abrahams observes, "Murdoch is only as powerful as politicians have allowed him to be."
Is Murdoch really a lizard in a suit? – Brendan O’Neill,  S P I K E D

Despite the journalistic buzz about Murdoch in the dock, the Leveson Inquiry is the enemy of a free press not its saviour, a show trial which found the tabloids guilty long before it started.
Is the Leveson Inquiry becoming an attack on the fundamental freedom of the press? 
– Mick Hume,  C I T Y   A . M .

The NZ Herald is to become a tabloid. Isn’t it already?
NZ Herald downsizing to tabloid? – N B R

The new campaign to force cigarettes into plain packets is driven by an old and ugly Prohibitionist zeal. And despite anti-smoking activists’ claims, a fancy fag packet does not turn us into 20-a-day nicotine fiends…
Monkey see, monkey smoke? – Patrick Basham,
Old moralism in new packaging – Chris Snowdon,
Plain packaging is a free speech issue – H A N D S  O F F   O U R   P A C K S  ( U K )

“I’m hearing increasing talk about managing the economy…”
The government illusion -  Matt Nolan,  T H E   V I S I B L E   H A N D

John Banks won his seat with the help of a small band of committed youngsters. Now he tells them to go to hell, their response should be…
Freedom, Choice and John Banks – C A C T U S  K A T E

The problem with student loans isn't the interest. It's the principal.
- David Burge

David Farrar blogs on Labour’s leadership and lack of ideas then claims “This is the problem you get when Labour doesn’t know what it stands for.” The National Party blogger fails to see the irony.
The unfortunate experiment -  K I W I B L O G

For the irony deficient like David, here’s one observation out of many that could be made, this one by Berend: “Interest free student loans, no raising pension age, but scrapping of military bands will bring the savings!”
Scrapping military bands 'a national scandal' – N Z   H E R A L D

“Among the Labour Party’s objections to increasing GST from 12.5% to 15% was that GST is, in their view, regressive…I shall be interested then to see their views on the Ministry of Health’s notion to increase the tax on tobacco to the point that cigarettes cost $100 per packet.”
Our unsung regressive tax Apr – N Z  C L A S S I C A L  L I B E R A L

Some people call them Pull Peddlers. Ayn Rand called them The Aristocracy of Pull. I just call them scum, and they infest the corridors of Parliament buying and selling favours. Secretly.
Name the lobbyists, Lockwood. – Duncan Garner, T V 3    B L O G

It’s not art, but it is cool; a “sculpture” showing all the boards that can be cut from one log :

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The United Nations—home of Food for Oil, the IPCC and Helen Clark—is going to build a machine of 4.5 billion people "in which resources are infinitely reusable and there is no adverse byproducts. Oh, and which refutes the Second Law of Thermodynamics.
Isn’t it amazing what “sustainability” can do?
UN to Spend Trillions Trying to Create a Perpetual Motion Machine 
– Dale Halling,  S T A T E   O F   IN N O V A T I O N

image’Allo, ’Allo! Cowardly broadcasters are blacklisting TV classics like It Ain’t Half Hot Mum for fear of causing offence.
Will it be au revoir to ’Allo, ’Allo? -  S P I K E D

Why don’t the rich get richer and the poor poorer? The answer, dear reader, is “churn.” 
Do the Rich Really Get Richer and the Poor Get Poorer?
-  Burton Folsom, B U R T   F O L S O M . C O M

Android vs iPhone: The Battle to the Death? Well, maybe not.
Android vs iPhone: The Battle to the Death! (Or Not) – V O D K A   P U N D I T

Are these the world’s two perfectly-matched towns?
 Scottish village of Dull seeks ties with Boring -  I N Q U I R E R

"Government-funded medical science is becoming increasingly corrupt. And this may corrupt medical practice."
Why Science Whistleblowers Are Ignored – Paul Hsieh, We Stand FIRM

“There is some satisfaction to be had in no longer having to identify Nancy Pelosi as US House Speaker. I never liked seeing her wield that gavel. Someone once remarked that a hammer in hand causes one to search for nails to pound in, and she was always searching for nails. She specialized in coffins."
A Renewed Assault on Freedom of Speech – Edward Cline,  R U L E   O F   R E A S O N

"See the Florentines argue for their freedom!”
Guest Post by Florentine signory from 1340 – Darius Cooper,  P R A C T I C E  G O O D  T H E O R Y

And still, after all these years, “there is still no convincing evidence that mobile phones can adversely affect human health.” There is abundant evidence however that believing every scare story you hear will.
 ‘No evidence’ of mobile phone cancer risk – I N D E P E N D E N T  ( U K )

Q: Do businessmen suppress innovations?

Britain’s Royal Society reckons you should stop spending, Africans should stop breeding, and we all should be grateful for their racist paternalism. “Vile, reactionary arguments disguised as science” reckons Claire Fox.
World needs to stabilise population and cut consumption, says  Club of Rome  Royal Society 
– J U NK   S C I E N C E

Hasn’t it been fun watching “the dwindling band of climate alarmists distance themselves from Gaia hypothesist James Lovelock, now he’s admitted he and his fellow alarmists over-egged the pudding on global warming.
Lovelock hemlock to climate alarmists – Miranda Devine,  T E L E G R A P H

No, the Islamist threat to the west hasn’t disappeared. You’ve just got better at ignoring it.
Fifty U.S. Terror Plots Foiled Since 9/11 -  H E R I T A G E   B L O G

Who’s Alex Epstein, what is his Center for Industrial Progress, and why did he “occupy” Occupy Wall Street?
Interview with Alex Epstein, Founder of Center for Industrial Progress – O B J E C T I V E   S T A N D A R D

Yes, Sweden is still overtaxed and over-regulated. But unlike most other places in the world, the direction is the right one—and the results are plain.
Sweden and the Recession – W H A L E   O I L

Pity the poor professional asset manager in these times, in needing to navigate not just irrational markets but to cater to clients hungry for performance and intolerant of the bad kind.
Party On – Tim Price,  D A I L Y   C A P I T A L I S T

A UK game show (featuring a strangely desiccated Jasper Carrot) uses the famous Prisoner’s Dilemma to provide a gripping finish. Here’s what usually happens:

And here’s how one smart fellow solved the dilemma:

The Keynesian theory of stimulus is elegant, eloquently argued, and widely held. It’s also complete bollocks.
Does Stimulus Grow the Private Economy? – Megan McArlde

The central bankers are finally realising “gold is quietly becoming a core banking asset for collateral purposes, at a time when the alternative, sovereign obligations, are becoming dangerously unstable as a bedrock of value.”
A plea for sanity -  C O B D E N  C E N T R E

Economic debunker Steve Keen, who famously called the crash, reckons, "Ultimately the Euro has to fail and the longer we continue the farce of believing we can make it function the larger the ultimate crash will be."
Steve Keen On Europe's Delusion And Why The Entire World Is Turning Japanese -  Z E R O   H E D G E

Keen makes one serious error however.  He says “when the crisis hits, European governments will be forced into imposing austerity on countries that desperately need a stimulus.” But with all due respect, Mr. Keen, isn’t this the same thing as saying that, “when the delirium tremens hits, the medic will be forced into imposing sobriety on a patient who desperately needs a fifth of vodka?”
Open Letter To Steve Keen, Who Says Stimulus Is Necessary -  Keith Weiner,  D A I L Y   CA P I T A L I S T

What he and his colleagues are looking for, and are all at sea without, are the insights of Jean Baptiste Say: “What he needs, as does everyone, is an understanding of where demand at the aggregate level comes from.” And where it comes from was first outlined by Monsieur Say 193 years ago.
John Taylor may I introduce you to J.B. Say – Steven Kates,  C A T A L L A X Y  F I L E S

Giving money and power to government is like giving
whiskey and car keys to teenage boys.
– P.J. O'Rourke

It’s still all Greek to the poor central bankers. “The current annual rate of contraction (-19%) of the Greek money supply guarantees many more eruptions from that Balkan nation.”
Greece Is Imploding -  Steve Hanke, C A T O   @  L I B E R T Y

“Q: Why do Japanese investors keep buying their own public sector debt, which is racing to 250% of GDP by 2015, twice the level that got Greece in trouble? A: Part of the explanation is what we call financial repression, where the government puts pressure on domestic institutional investors, frequently through regulations. But much of the explanation is likely deflation, which creates acceptable real return to bonds, that are not taxed. The eventual JGB crisis must await 2015 or later…”
One reason why Japan allows deflation – Tyler Cowen,  M A R G I N A L  R E V O L U T I O N

“Here is a puzzle for Keynesian and other neo-classical economists.
    When a consumer buys something, he must choose; and if he increases his purchase of one product, he must reduce his purchases of other products by the same amount. In other words he cannot buy both. This must be true for whole communities as well. How then can you have [the economic growth supposedly measured by GDP]?
It is of course impossible without monetary inflation….
Understanding these dynamics is central to a proper understanding of our economic condition…”
The paradox of choice – Alasdair MacLeod,  C O B D E N  C E N T R E

Where does paper money come from? In two words: from debt. 
Money As Debt – Tyler Durden,  Z E R O   H E D G E

Q: Would school vouchers improve education?

imageWhy do Montessorians use the word "work" instead of "play” for what children do?"
"Work" in a Montessori environment – Ana Amiguet, M A R A  M O N T E S S O R I . C O M

We need a more robust definition of autism, otherwise we risk it losing all sense as a diagnosis.
Is autism just another identity? – Sandy Starr,  S P I K E D

You might think designing a kitchen is all about aesthetics, ergonomics and craftsmanship. But you’d be wrong. It’s more about your happiness.
Psychology of the Kitchen -  Johnny Grey, G R E Y   M A T T E R S

Don’t eat this. Ban that. John Stossel reckons the Food Nazis should go to hell. “I don't suggest that we ignore the experts and eat like pigs. But the scientific question should not overshadow the more fundamental issue. Who should decide what you can eat: you? Or the state? …The moral issue of force versus persuasion applies even if all the progressives' ideas about nutrition are correct.”
Stossel on the Food Police – G U S  V A N   H O R N

The government sucks - but it sucks less than governments
that don't allow you to say 'the government sucks.'

- Penn Jillette

Fact: People who hate beer must also hate civilisation itself.
How Beer Created the World -  Eric Crampton,  O F F S E T T I N G   B E H A V I O U R

imageIn 450BC, noted toga-wearer Sophocles philosophised that the best diet for the Greeks was bread, meats, various vegetables and beer  (the last of which they called Zythos).Good enough reason then for Epic brewer Luke Nicholas to launched his latest hoptastic creation…
NEW BEER: Epic Zythos IPA – Neil Miller,  E P I C   B L O G
Epic Zythos – Joel McFarlane,  B R E W   N A T I O N

“You can count on my support.”
“It wasn’t my fault.”
“You’re next in line for a promotion.”
Really?
12 Ways To Spot A Liar At Work – Carol Kinsey Goman,  F O R B E S

Lasse Hallström’s film of Salmon Fishing in the Yemen serves up an appealingly fishy main with a side of political satire…
Audience charming in the Yemen – S P I K E D

How do you get big stuff done? SF author Neal Stephenson has some answers.

What does the universe look like? Go ahead, take a look.
Astronomy Picture of the Day: March 12, 2012 – N A S A

Lawyer Dog is the hot new dog meme. He didn't go to law school but he still passed his state bark exam with flying colors. Keep him in mind next time you need beagle representation.”

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Cheers, and thanks for reading
Peter Cresswell

PS: Hat tips and thank yous to Thrutch, Geek Press, Noodle Food, Junk Science, Ayn Rand Revolution , Cathie George, Kiwiwit, Claire Fox, Berend de Boer, Karl Sharro, Spiked Online, “Maria Montessori

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Thursday, April 26, 2012

ANZAC Day AFL in Wellington, 2013

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A sight for Wellington eyes: St Kilda’s Nick Riewoldt marking over Gold Coast Suns’s Karmichael Hunt (which he’d do all night if Karmichael keeps jumping like that)

It was reported first by Rod Shaw on the World Footy News blog, and now all but confirmed today that as of next year the St Kilda and Brisbane Lions AFL teams will play an Anzac Day AFL premiership game at the Wellington Cake Tin—as a complement to the regular Essendon-Collingwood Anzac Day thriller at the MCG—with plans still afoot for St Kilda to play up to four “home” games at the Wellington stadium every year for the indefinite future.

Apparently Councillor John “Mystery” Morrison was part of a delegation of Wellington councillors taking the trip to the MCG this year to join 86,900 fans cheering on the game that has become an Anzac Day tradition in Melbourne, won this year in a breath-taking finish by Collingwood. Unavailable for comment after the game (rumours that the hospitality proved too much are hereby confirmed as being totally unfounded), before leaving for Melbourne, Morrison and businessman John Dow – a key figure behind Wellington hosting three pre-season AFL games between 1998 and 2001 – told the Dom Post:

It's still got a fair way to travel but we've had positive talks about St Kilda being associated with Wellington and looking to play up to two, maybe even three, major club games against opposition like Collingwood, Essendon or whoever.
    So the two factors make it pretty interesting, that we've got a club who wishes to be in partnership with us and we've got the governing body. We're talking about this partnership arrangement kicking off next year with an Anzac Day game here. I think that's a particularly good marketing ploy.

This is magnificent news for New Zealanders keen to follow the world’s most libertarian sport, fantastic news for those working on the game at grassroots level here, great for Wellington (the Hawthorn club’s similar involvement with Tasmania has proved highly beneficial for both), great for fans like myself who will be making the pilgrimage from all over,* and furthermore it’s just what the stadium was built for. (Yes folks, the AFL played a part back at the design stage in making it the oval it is.) And as NZ-born Brisbane Lions’s chief executive Malcolm Holmes points out, for teams like theirs the travel time is comparable to that of visiting Tasmania or Perth. So no travel problems either for the teams. Everybody wins!

Can’t wait!

imageThis year just the MCG on Anzac Day, next year Wellington as well!

* Which, to be fair, may not be entirely beneficial for Wellington. Although I’d expect the Malthouse at least to prosper.

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How to look after high-tech guests without the hassle

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Looking after guests staying over these days is more complicated than just leaving out some linen and pointing them to the end of the hall where the bathroom lives.

Joelle Alcaidinho and commenters at the Apartment Therapy blog suggest a few tips to help the stay of your high-tech visitor be a happier one, including:

  • leave them a USB docking/charging/whatever-the-hell-it-is station for their exclusive use
  • leave your WiFi password on the fridge so they can easily connect—and you can find it yourself when you forget it for the fourteenth time
  • leave them a large plug box with multiple overseas adapters
  • if you have one of those fancy schmancy digital locks, set the guest up with their own code on the front door so they don’t need to be given a key to lose
  • keep an extra local SIM card so overseas friends don’t have to waste time looking for one themselves
  • and if you’re really keen, “programme a ‘Goodnight’ button in the living room that will arm/lock/turn off all the lights if they stay up later than you do.”

Any other essentials to help look after high-tech guests without the hassle?

UK Recession: “If you do not change direction, you may end up where you are heading.” [updated]

Overnight we heard news the UK is “back” in recession—back in recession because it recorded an “official” decrease in GDP for the quarter of 0.2% after a contraction the previous quarter of 0.3%.

What I find astonishing is anyone thought the anaemic, malinvested, over-taxed, over-regulated, flatlining place was ever out of recession. You know, seriously out of recession. Did anyone believe it apart from Keynesian money manipulators and the few people who still take government GDP numbers seriously?

The measurement of so-called Gross Domestic Product doesn’t measure production at all, it measures spending. And it doesn’t even measure all the spending in an economy—it pretty much just measures consumption spending.  Which leaves largely unmeasured (except by the tax men) all the spending on production that actually keeps an economy going.

So the measurement of Gross Domestic Product is more accurately a measure of Net Domestic Consumption. Something with which governments can too easily fiddle, either by boosting their own spending or encouraging their central banks to “ease” quantitatively.

That the UK’s figures for this fiction are still flatlining despite all their fiddling is a measure of just how anaemic, not to say non-existent, the UK’s recovery really is.

But despite five years of increasingly desperate fiscal and monetary irresponsibility, some folk are still saying the real problem is the UK government hasn’t been fiddling enough.  Their QE programme should have been even more profligate, say numbnuts about the programme that has left the UK another year poorer and deeper in debt. “Their austerity measure didn't work,” bleats the likes of Scott Yorke and sundry other commentators like Bryan Gould et al whose knowledge of economics could almost fill the head of a pin.

Well, as Murray Rothbard, used to say (in so many words) , it’s no crime not to know anything about economics, but it’s pig-ignorant to comment as if you do.

Austerity? The only governments in Europe attempting anything remotely like austerity are Norway, Sweden, Switzerland and Estonia (whose government currently has the only balanced budget in the Eurozone). These are the few Europeans who are doing even relatively well

As for the UK government itself, despite the political rhetoric Cameron and Osborne have imposed the very opposite of austerity.  For the past five years their deficit has been between two to five times that of New Zealand. And…

…despite some very modest spending cuts [records Sean Rosenthal at the Mises Daily], it is now taxing more and spending more than it ever did. Although British spending as a percent of GDP fell mildly from 51.1 percent in 2009 to 49.8 percent in 2011, this level still signifies a massive increase in spending from 2007 levels of 43.9 percent of GDP. Similarly, although the British deficit as a percent of GDP fell from 11 percent in 2009 to 9.4 percent in 2011, this deficit still amounts to a huge surge compared to the 2007 level of only 2.8 percent and, with the exception of this recession, exceeds all other deficits in Britain since World War II.

The British government is spending more than it ever has. It is taxing more than it ever has. And its deficit is more than it ever has been—except for the depths of the war that virtually bankrupted it.

And it hasn’t worked. And why would it? As Tory MP Daniel Hannan vainly tried to tell then-PM Gordon Brown back in ‘09, “you cannot spend your way out of recession or borrow your way out of debt.”

So as the Chinese philosopher LaoTse sagely observed, “If you do not change direction, you may end up where you are heading.”

It’s time, in other words, for current PM Cameron and his Treasurer George Osborne to try something else.

They could do worse than try the same approach that saw the British economy regain its previous peaks just four years into the Great Depression of the 1930s (even while the deficit-spending US was about to go into another trough).

But that would be precisely the opposite of the profligate approach both Labour and the Tories have taken in the five years (and counting) of this Depression.

UPDATE: And in related local news:

There has been a billion dollar deterioration in the NZ government's forecast financial position in just two months, with a 2014/15 surplus of NZ$370 million picked in February now projected to be a NZ$640 million deficit…
   
Despite the new forecasts however, English said the government was still committed to reaching an operating surplus before investment gains and losses in the 2014/15 year…

Yeah right.

And he proposes to do that not by cutting his spending but by increasing it.

So if you believe in that 2014/14 operating surplus, I have a building full of printing presses to sell you.

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Do high taxes & prosperity go hand in hand?

Tuesday, April 24, 2012

ANZAC EVE: Reflections on war

Anzac Eve is the perfect time to reflect on the reality of war. And I do. Every year.  Here’s how I began last year’s written reflection:

War appears to be as old as mankind, but peace is a modern invention.
      - Sir Henry Maine (1822-88)

Charles Sargeant Jagger's Royal Artillery Monument at Hyde Park Corner, London

“It is well that war is so terrible,” said General Robert E. Lee after the slaughter at Fredericksburg, “otherwise we should grow too fond of it.”

But fond of it humans have been for most of our history. For thousands of years war has been an intrinsic part of the social and political order. For most of human history, armed  conflict has been the accepted method by which ambitions are achieved. It took more than mere wishes to change that tragic history. It was not simple pacifism that did it. It was only the realisation (developed over many centuries) that the interests of human beings are essentially harmonious that eventually allowed the “invention of peace”—however sporadic has been its application.

Wars are not natural events or accidents, like earthquakes, landslides or hurricanes. No, like economic depressions, totalitarian dictatorships and murder by concentration camp, wars are neither acts of nature nor 'Acts of God': Wars are acts of man -- of men who seek to achieve their values by violence, resisted by those who rise to defend their own lives, their values, and their sacred honour.

Wars are the result of aggression by those who see value only in force, and who see other human beings as chattel…

Click here to read more…>>

Austrian-born economist Ludwig Von Mises saw more than his share of war and its results. The invention of peace, he wrote in 1949, can only come about with the rejection of the roots of war. Which is to say, to reject the spirit of conquest and the notion that values can be attained through aggressive government action; which is to say, to reject statolatry—which is to say, to reject the warrior code and embrace the code of the trader…

Total War:
The market economy involves peaceful cooperation. It bursts asunder when the citizens turn into warriors and, instead of exchanging commodities and services, fight one another…
War and the Market Economy:
Of course, in the long run war and the preservation of the market economy are incompatible. Capitalism is essentially a scheme for peaceful nations. But this does not mean that a nation which is forced to repel foreign aggressors must substitute government control for private enterprise. If it were to do this, it would deprive itself of the most efficient means of defense. There is no record of a socialist nation which defeated a capitalist nation. In spite of their much glorified war socialism, the Germans were defeated in both World Wars.
    What the incompatibility of war and capitalism really means is that war and high civilization are incompatible. If the efficiency of capitalism is directed by governments toward the output of instruments of destruction, the ingenuity of private business turn out weapons which are powerful enough to destroy everything. What makes war and capitalism incompatible with one another is precisely the unparalleled efficiency of the capitalist mode of production.
     The market economy, subject to the sovereignty of the individual consumers, turns out products which make the individual's life more agreeable. It caters to the individual's demand for more comfort. It is this that made capitalism despicable in the eyes of the apostles of violence. They worshiped the "hero," the destroyer and killer, and despised the bourgeois and his "peddler mentality" (Sombart). Now mankind is reaping the fruits which ripened from the seeds sown by these men…
The Futility of War:
What distinguishes man from animals is the insight into the advantages that can be derived from cooperation under the division of labor. Man curbs his innate instinct of aggression in order to cooperate with other human beings. The more he wants to improve his material well-being, the more he must expand the system of the division of labor. Concomitantly he must more and more restrict the sphere in which he resorts to military action. The emergence of the international division of labor requires the total abolition of war. Such is the essence of the laissez-faire philosophy...
    This philosophy is, of course, incompatible with statolatry. In its context the state, the social apparatus of violent oppression, is entrusted with the protection of the smooth operation of the market economy against the onslaughts of antisocial individuals and gangs. Its function is indispensable and beneficial, but it is an ancillary function only. There is no reason to idolize the police power and ascribe to it omnipotence and omniscience. There are things which it can certainly not accomplish. It cannot conjure away the scarcity of the factors of production, it cannot make people more prosperous, it cannot raise the productivity of labor. All it can achieve is to prevent gangsters from frustrating the efforts of those people who are intent upon promoting material well-being.
    The liberal philosophy of Bentham and Bastiat had not yet completed its work of removing trade barriers and government meddling with business when the counterfeit theology of the divine state began to take effect. Endeavors to improve the conditions of wage earners and small farmers by government decree made it necessary to loosen more and more the ties which connected each country's domestic economy with those of other countries. Economic nationalism, the necessary complement of domestic interventionism, hurts the interests of foreign peoples and thus creates international conflict. It suggests the idea of amending this unsatisfactory state of affairs by war. Why should a powerful nation tolerate the challenge of a less powerful nation? ….
    Such was the ideology of the German, Italian, and Japanese warmongers. It must be admitted that they were consistent from the point of view of the new  teachings. Interventionism generates economic nationalism, and economic nationalism generates bellicosity. If men and commodities are prevented from crossing the borderlines, why should not the armies try to pave the way for them?
    From the day when Italy, in 1911, fell upon Turkey, fighting was continual. There was almost always shooting somewhere in the world. The peace treaties concluded were virtually merely armistice agreements. Moreover they had to do only with armies of the great powers. Some of the smaller nations were always at war. In addition there were no less pernicious civil wars and revolutions.
    How far we are today from the rules of international law developed in the age of limited warfare! Modern war is merciless, it does not spare pregnant women or infants; it is indiscriminate killing and destroying. It does not respect the rights of neutrals. Millions are killed, enslaved, or expelled from the dwelling places in which their ancestors lived for centuries. Nobody can foretell what will happen in the next chapter of this endless struggle.
    This has little to do with the atomic bomb. The root of the evil is not the construction of a new, more dreadful weapons. It is the spirit of conquest….
    Modern civilization is a product of the philosophy of laissez faire. It cannot be preserved under the ideology of government omnipotence. Statolatry owes much to the doctrines of Hegel. However, one may pass over many of hegel's inexcusable faults, for Hegel also coined the phrase "the futility of victory" (die Ohnmacht des Sieges).
    To defeat the aggressors is not enough just to make peace durable. The main thing is to discard the ideology that generates war.

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Guards of the Dead by Austrian sculptor Franz Metzner, in the Crypt of the Monument to the Battle of the Nations created to commemorate the battle that was the beginning of the end for Napoleon’s dictatorship, after whose fall Europe enjoyed nearly a century of (almost) laissez faire and its longest interlude of peace ever … before the rising tide of statolatry and aggressive nationalism combined to create another bloodbath.
Ironically, the monument itself was built to commemorate the victory of the people over an oppressive ruler —but in commemorating the victory of ‘Der Volk”  it became for some a commemoration of the maturation of the Germans as an organised ethnic group, and hence was to become the locus of the same aggressive nationalism “the people” had opposed, but this time in German garb.
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Man who invents Gaia backtracks on warmism: I was too ‘alarmist,’ says Lovelock.

It was in the 1960s that chemist James Lovelock first offered up the ‘Gaia’ hypothesis, i.e., the notion suggesting “all organisms and their inorganic surroundings on Earth are closely integrated to form a single and self-regulating complex system, maintaining the conditions for life on the planet.” A notion that in hippier hands became the speculation that “Mother Earth” isn’t just a metaphor but a reality, and she is out for revenge.

Despite his impeccable scientific credentials, Lovelock went on to embrace any amount of silliness himself. In his 2006 book, The Revenge of Gaia: Why the Earth is Fighting Back, he turned full-on catastrophist, arguing  our “lack of respect” for Gaia is already testing her capacity to minimise the effects of our addition of greenhouse gases to the atmosphere, making it inevitable that most of the earth will rapidly become uninhabitable.  (In his most recent book, "The Vanishing Face of Gaia", he reckoned human civilisation will be hard pressed to survive at all.)

In that same year he told The Independent newspaper “billions of us will die and the few breeding pairs of people that survive will be in the Arctic where the climate remains tolerable.”  In 2008 he told The Guardian “By 2040, parts of the Sahara desert will have moved into middle Europe.”  And in 2010 interview he told The Guardian that democracy would have to be "put on hold" to prevent the coming calamity:

Even the best democracies agree [sic] that when a major war approaches, democracy must be put on hold for the time being. I have a feeling that climate change may be an issue as severe as a war. It may be necessary to put democracy on hold for a while.

In short, Lovelock was your regulation big-government, deep-ecology, celebrity climate alarmist talking up catastrophe and hanging out with the Al Gores, James Hansens and Tim Flannerys of the celebrity warmist world .

But that was then.

Now he’s saying something more inconvenient for them.

In a telephone interview with msnbc.com says he now thinks he and the other “alarmists” (his word) had been “extrapolating too far.":

The problem is we don't know what the climate is doing. We thought we knew 20 years ago. That led to some alarmist books – mine included – because it looked clear-cut, but it hasn't happened. The climate is doing its usual tricks. There's nothing much really happening yet. We were supposed to be halfway toward a frying world now. The world has not warmed up very much since the millennium. Twelve years is a reasonable time... it (the temperature) has stayed almost constant, whereas it should have been rising -- carbon dioxide is rising, no question about that,” he added...

Asked if he was now “a climate skeptic,” Lovelock said:

“It depends what you mean by a skeptic. I'm not a denier.” He said human-caused carbon dioxide emissions were driving an increase in the global temperature, but added that the effect of the oceans was not well enough understood and could have a key role. “It (the sea) could make all the difference between a hot age and an ice age,” he said…
As “an independent and a loner,” he said he did not mind saying “All right, I made a mistake.” He claimed a university or government scientist might fear an admission of a mistake would lead to the loss of funding.”

James Lovelock has had an epiphany.

Time for those administering our Emissions Trading Scam and doing out the funds to fellow warmists to do the same.

[Hat tip Climate Depot and Leighton Smith]

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James Cameron: Hypocrite

It’s nice to know the calibre of some of the folk moving here, isn’t it. While the Prime Minister flatly tells people showing incredible gumption to piss off, we get this flatulent hypocrite flying here to tell us that we should live with less, while he…

PS:  Proposition 23, to which the aging hippy is donationally opposed, would suspend California's Global Warming legislation requiring energy companies to do the impossible by reducing their carbon output to 1990 levels.

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And it’s true for New Zealand as well…

Monday, April 23, 2012

It’s not the helicopters you have to worry about

Listen up all you folk opposed to “The 1%.” And all you others opposed to rent-seeking and privilege.You need to know who it us you really oppose.

Mark Spitznagel, founder of “black swan” hedge fund Universa (where Nassim Taleb among others shares a desk), points out your enemy: it’s the central banks, and the means by which the expand the money supply—as they’ve been doing relentlessly in recent years.

[Central banks don’t]t expand the money supply by dropping cash from helicopters. It does so through capital transfers to the largest banks.
    A major issue this year … is the growing disparity between rich and poor, the 1% versus the 99%..
    The source is not runaway entrepreneurial capitalism, which rewards those who best serve the consumer in product and price (Would we really want it any other way?) There is another force that has turned a natural divide into a chasm: [central banks like] the Federal Reserve. The relentless expansion of credit by “The Fed” creates artificial disparities based on political privilege and economic power.
    David Hume, the 18th-century Scottish philosopher*, pointed out that when money is inserted into the economy (from a government printing press or, as in Hume's time, the importation of gold and silver), it is not distributed evenly but "confined to the coffers of a few persons, who immediately seek to employ it to advantage"…
    The Fed doesn't expand the money supply by uniformly dropping cash from helicopters over the hapless masses. Rather, it directs capital transfers to the largest banks (whether by overpaying them for their financial assets or by lending to them on the cheap), minimizes their borrowing costs, and lowers their reserve requirements. All of these actions result in immediate handouts to the financial elite first, with the hope that they will subsequently unleash this fresh capital onto the unsuspecting markets, raising demand and prices wherever they do.
    The Fed, having gone on an unprecedented credit expansion spree, has benefited the recipients who were first in line at the trough…

Do we really want it that way?

[Hat tip Daniel Gross]

* Yes, that David Hume. Poor philosopher, sound economist.

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Smile & Wave at the Passionless People

After the weekend’s polls, poor old Scott Yorke is wondering what his Labour Party has to do to get a break.

Asset sales, the Crafar Farms issue, the Sky City pokies deal: every time there's a poll on these issues (however unscientific), the results are damning.
So if people hate these policies, why do the polls say it's business as usual for National?

Scott offers five suggestions to explain this apparent conundrum. Let me offer one more.

The clue to this one was supplied by thinking about the release of Gordon McLauchlan’s Passionless People sequelIf McLauchlan is right, then NZers would generally rather sit down to a nice tea than take an abstract idea seriously—even one to which they are supposedly violently opposed.

"New Zealanders don't give a stuff about anything too much,'” he says with just a bit too much relish.

New Zealand has become "a broken country, and no-one wants to fix it.” And New Zealanders have lapsed "into a lack of passion bordering on inertness.” If a New Zealander feels a bout of passion coming on, "he goes and paints a roof.”

So a smile and a wave and a relaxed backroom deal or two is apparently the right approach for folk like this.  You don’t want to overbalance on the roof.

Mind you, there is another answer that Scott doesn’t really canvas either. It is that , bad as this lot are, we are so scarred by nine years of Helen Clark that anything that comes in her colours is going to take years to trust again. (Which is why so many of even Smile and Wave’s detractors are now supporting the Greens’s Ginger Whinger instead of Labour’s Mr Invisible.)

You could object that Smile and Wave has failed to overturn anything that was introduced by Helen Clark—even things to which he was previously “passionately” opposed—so is no different to her in substance. But that would be to take ideas seriously.

PS: There is actually one other possibility to consider.

“There's no question that the Key government has been taking a hammering in the media,’ says Scott.  But I wonder if NZers truly take their piss-poor media seriously any more?

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Sunday, April 22, 2012

ECONOMICS FOR REAL PEOPLE: Monday, Monday, Monday!

Here’s the note on this week’s discussion at the Auckland Uni Econ Group (which, by the way, has now switched to Monday evenings for the rest of the year):

Hello All,

First off: We have changed our meetings to Mondays at 6pm, due to there being a lot of other events on Thursdays.
This week we continue looking at the Economic Harmonies with Part III of our series, asking: What Really Makes the World Harmonious?

  • Remember how economics teaches us The General Gain From the Existence of Others?
  • Remember how the Division of Labour makes us all more productive?
  • Remember how Comparative Advantage and the Pyramid of Ability show us we all have a place in production … how trade raises the value of everything … do you remember the lesson of The Double Thank You Moment?
  • Remember the Miracle of Breakfast--and how Paris  (and New York) Gets Fed?

These were all the lessons of the Economic Harmonies—the greatest lesson that philosophers could learn from economics (and economists should learn from their own science).

Well, this week we look at the foundations on which the very existence of all of the these miracles rest—the six institutions that underpin all the Gains From the Existence of Others, without which human economic life would be characterised less by harmony and more by plunder!

Come along this Monday to continue your exploration of economics, and hear about these very special six things.

    Date: Monday, 23rd April
    Time: 6pm
    Where: Seminar Room 219, Level 2, Auckland University Business School Building (Owen G. Glenn
                       Building)

We look forward to seeing you there,

Riko Stevens
The UoA Economics Group

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