Thursday, 28 February 2013

Who comes first? Shark or man?[updated]

Poor Adam Strange was killed yesterday at Auckland’s Muriwai Beach by a White Pointer shark.

Despite police firing shots at the shark after it had killed Mr Strange, the man-eating White Pointer is a protected species in New Zealand, and has been since 2006.

As I said when Chris Carter so cavalierly added the Great White to the Department of Conservation’s list of protected species, this policy conserves everything except human life.  But in that, it is part of a much wider context that

directly pits the anti-concept of 'intrinsic values'-- which environmentalists employ to say things should be protected 'as is, where is'—against real human values, such as the value of human life: from which all real value is actually derived.
    This isn't just a semantic argument, as you’ll soon discover if one of these protected Great Whites starts chewing through your surfboard. Or your arm. Or your loved one.
     A similarly stupid three-decade Australian ban on hunting crocodiles has seen numbers jump from 5,000 to 70,000, and an increase in savage croc attacks.
    David Graber, research biologist with the US National Park Service, once declared on behalf of mainstream environmentalism that “We are not interested in the utility of a particular species or free-flowing river, or ecosystem, to mankind. They have intrinsic value, more value—to me—than another human body, or a billion of them... Until such time as Homo Sapiens should decide to rejoin nature, some of us can only hope for the right virus to come along.” City University of New York philosophy professor Paul Taylor adds: "[T]he ending of the human epoch on Earth would most likely be greeted with a hearty 'Good Riddance.'"
    Graber gives the game away by declaring the notion of 'intrinsic values' itself to be valuable to him: as trees, rocks and mud puddles can’t speak for themselves, environmentalists like Graber must be paid to do it for them. (Idiscussed this phenomenon the other day.) Responding on behalf of human beings, Glenn Woiceshyn argues:

While extreme, these anti-human sentiments are logically consistent with environmentalism's "intrinsic value" philosophy: Since man survives only by conquering nature, man is an inherent threat to the "intrinsic value" of nature and must therefore be eliminated. Environmentalism makes man the endangered species. The only antidote to these haters of mankind and their anti-human philosophy is to uphold man's right to pursue his own life by means of his productive activities.
The real endangered species, says Michael Berliner, is us:
There is a grave danger facing mankind. The danger is not from acid rain, global warming, smog, or the logging of rain forests, as environmentalists would have us believe. The danger to mankind is from environmentalism.
    The fundamental goal of environmentalists is not clean air and clean water; rather it is the demolition of technological/industrial civilization. Their goal is not the advancement of human health, human happiness, and human life; rather it is a subhuman world where "nature" is worshipped like the totem of some primitive religion.

    The history of how a love of nature has turned into a preservationist religion is traced briefly here by Robert Bidinotto. Chris Carter's announcement is just one more example of that policy: Protecting a killer as some sort of 'totem' is a clear threat to the rest of us.
    Fortunately, one person at least came out against Carter's stupidity. Me.

Of course, few listened. The shark was protected as an intrinsic value, and human beings were placed second

But there are good folk about arguing that a love of nature can be put in its place—which has to begin by abandoning the phony notion that pristine nature is sacred, that is has intrinsic value, i.e., value in and of itself regardless of who is around (or not) to value it.   Which means (as I also argued back in 2005) repudiating the “deep ecology” insanity that puts humans at the bottom of the totem pole, and embracing instead an environmentalism that accepts humans as first in the hierarchy of nature. 

That’s not easy, not when

fully a fourth of all Americans "see nature as sacred, want to stop corporate polluters, are suspicious of big business, are interested in voluntary simplicity, and are willing to pay to clean up the environment and stop global warming." That's one quarter of Americans who see nature as sacred, just as the deep ecologists do.
    It's true that there is now a growing tension between those who sympathise with the view of the deep ecologists--what you might call the 'romantic' or 'religionist' environmentalists-- and a growing minority who have reversed their views on issues of population growth, urbani­zation, genetically engineered organisms, and nuclear power (as I discuss in a previous blog called 'Religionists for Nuclear.'), but this latter group is not yet in the environmental mainstream, although they do deserve to be.
    On this question of who comes first, consider the case of Florida boy Jessie Arbogast, whose arm was bitten off by a shark. It's easy to agree (or to maintain a discreet silence as animal rights activists did) with the shark being shot so the arm could be retrieved and successfully reattached (but do note that such an action might now be illegal if the shark was one of Chris Carter's protected Great Whites) . That's an easy case with which to agree, and the justice of shooting the shark and retrieving the boy's arm should be obvious, as Tibor Machan quite properly points out:

Few among us would have hesitated at this choice: boy's arm versus life of shark. Of course the boy's arm is more important, and so the shark had to go. Yet, there are millions of animal-rights advocates around the world, many of them Hollywood celebrities with easy access to talk shows and news reporters, who have remained completely silent about their professed view—namely, that human beings are not more important than non-human animals.
But consider Tibor's further point. An environmentalism that honestly puts humans first would go further and apply the same principle applied correctly to secure the boy's survival and well-being to all the day-to-day activities human must undertake to secure their livelihood: Rather than seek to shackle human production and fecundity, they must recognise that the unique nature of human beings requires that they use, alter and sometimes despoil nature in order to maintain their lives and to produce wealth: no other means of livelihood is possible to the human animal.
    Supporting human life means opposing the 'religious' environmentalism that is often economically devastating to farmers, fishers, miners, loggers, and others who necessarily 'despoil' untrammeled nature in the necessary pursuit of their, and our, livelihood.
    So that's the challenge I put to you: do you agree that humans should be put first in the hierarchy of nature? And if so, do you agree with my conclusion here; that is, in an "environmentalism ... that...eschews any idea of 'intrinsic values' or deep ecology, and embraces instead the idea of seeking and advancing those environmental values that support and enhance human life."

This is not a “pave the world” argument, it is moving from the extremism saying (to borrow from Monty Python) that:

Every tree is sacred,
Every bird is great,
If a dune is built on,
Greens get quite irate.
Every bush is wanted,
Every swamp is good,
every shark is needed,
in your neighbourhood.

Are there really and truly environmentalists that don't put humans first, I hear you ask? that put bugs, rocks and mud puddles ahead of human beings? Well, yes there are. I quote two above. I quoted many more here.

As I say here, I'm sure we can all embrace an "environmentalism ... that...eschews any idea of 'intrinsic values' or deep ecology, and embraces instead the idea of seeking and advancing those environmental values that support and enhance human life."

A property-rights based environmentalism putting humans first is such a beast.

Good reading on this important subject here:

Bubble Trouble: Is There an End to Endless Quantitative Easing?

imageGuest post by Detlev Schlicter

The publication earlier this week of the Federal Reserve’s Federal Open Market Committee minutes of Jan. 29-30 seemed to have a similar effect on equity markets as a call from room service to a Las Vegas hotel suite, informing the partying high rollers that the hotel might be running out of Cristal Champagne. Around the world, stocks sold off, and so did gold.

Here are two sentences that caused such consternation:

_bernanke-helicopterHowever, many participants also expressed some concerns about potential costs and risks arising from further asset purchases [the Fed's open-ended, $85 billion-a-month debt monetization program called 'quantitative easing']. Several participants discussed the possible complications that additional purchases could cause for the eventual withdrawal of policy accommodation, a few mentioned the prospect of inflationary risks, and some noted that further asset purchases could foster market behavior that could undermine financial stability.

Loosely translated:

Guys, let’s face it: All this money printing is not without costs and risks. Three problems present themselves:

1) The bigger our balance sheet gets (currently $3 trillion and counting), the more difficult it will be to ever load off some of these assets in the future. When we start liquidating, markets will panic. We might end up having absolutely no manoeuvring space whatsoever.

2) All this money printing will one day feed into higher headline inflation that no statistical gimmickry will manage to hide. Then some folks may expect us to tighten policy, which we won’t be able to do because of 1.

3) We are persistently manipulating quite a few major asset markets here. Against this backdrop, market participants are not able to price risk properly. We are encouraging financial risk-taking and the type of behaviour that has led to the financial crisis in the first place.

All these points are, of course, valid and excellent reasons for stopping “quantitative easing” right away. You may not be surprised that I would advocate the immediate end to “quantitative easing” and any other central bank measures to artificially “stimulate” the economy.

_BenIn fact, the whole idea must appear entirely preposterous to any student of capitalism. First, a bunch of bureaucrats in Washington scan an incredible amount of data, plus some anecdotal “evidence,” every month (with the help of 200 or so economists) and then they “set” interest rates. Next, they astutely manipulate bank refunding rates and cleverly guide various market prices so that the overall economy comes out creating more new jobs. All the while, the officially sanctioned devaluing of money (meaning your dollar is worth less today than it was just a year ago) unfolds at the regularly scheduled “harmless pace” of 2%.

There should be no monetary policy in a free market, just as there should be no policy of setting food prices or wage rates, or of centrally adjusting the number of hours in a day.

But the question here is not what I would like to happen, but what is most likely to happen. There is no doubt that we should see an end to “quantitative easing,” but will we see it anytime soon? Has the Fed finally — after creating $1.9 trillion in new “reserves” since Lehman went bust — seen the light? Did they finally get some sense?

Maybe, but I still doubt it. Of course, we cannot know, but my present guess is that they won’t stop quantitative easing anytime soon; they may pause or slow things down for a while, but a meaningful change in monetary policy looks unlikely to me.

The boxed-in central banker
I think that the financial markets and media overestimate the degrees of freedom that central bank officials enjoy. I consider central bankers to be captives of three overwhelming forces:

1. Their own belief system, which still holds that they are the last line of defense between dark and inexplicable economic forces and the helpless public, and that therefore, whenever the data or the markets go down, it is their duty to ride to the rescue. Thus, when the withdrawal of the Cristal dampens the party mood, the Fed will soon feel obliged, by its own inner logic and without any motivation from outside influences, to open another bottle. Just wait until the present debate about an end to QE leads to weaker markets and until, in the absence of the diversion from rallying equity markets, the almost consistently uninspiring “fundamental data” become the focus of attention again, and we will witness another shift in Fed language, again back to “stimulus.”

We had these little twists and turns a couple of times without any major change in trend. Anybody remember the talk of “exit strategies” in the spring of 2011?

Of course, like most state officials, central bank bureaucrats are largely preoccupied with the problems of their own making. It is precisely the Fed’s frequent rescue operations that have created the excessive leverage that causes instability and repeated crises in the first place. However, there are no signs anywhere that, intellectually, the Fed is willing and able to break out of this policy loop.

2. After years of Greenspan puts, Bernanke bailouts, and zero interest rates, the size of the dislocations may be as large as ever. The Wall Street Journal reported that total borrowing by financial institutions is down by about $3 trillion from its all-time high in 2008. That’s the widely heralded “deleveraging.” But does that mean that the current level of about $13.8 trillion is a new equilibrium? The Fed’s balance sheet expanded by almost $2 trillion over the same period, and super-easy monetary policy has provided a powerful disincentive for banks to shrink meaningfully. What is truly sustainable or not will only be discernible once the Fed stops its manipulations altogether and lets the market price things freely. My guess is that we would still have to go through a period of deleveraging and probably of headline deflation. This would be a necessary correction for a still unbalanced economy addicted to cheap credit, but nobody is willing to take this medicine.

3. Politics. Falling stocks, shrinking 401(k) plans, and shaky banks don’t make for a happy electorate. Additionally, the state is increasingly dependent on low borrowing costs and central bank purchases of its debt. The chances of the U.S. government repairing its own balance sheet are slim to none. So dependence on ultralow funding rates and the Fed as lender of last resort (and every resort) will likely continue.

Look at Japan
When it comes to any of the major trends in global central banking of the past 25 years, Japan has consistently been leading the pack. In the mid-’90s, Japan had set the fed funds rate to 1%, which at the time was deemed exceedingly low compared with other countries, like the U.S. The global community still looked upon these rates with disbelief and growing annoyance at the small payoff in terms of real growth.

Japan was the first to have zero policy rates and the first to conduct “quantitative easing.” Albeit, Japan’s version of QE was on an altogether smaller scale than some of the Western central banks have, to date, managed since 2008. Now the country seems to point the way toward the next phase in the evolution of modern central banking: the open and unapologetic politicization of the central bank and the demotion of the head central banker to PR man.

Any pretence of the “independence” of central bankers has been unceremoniously dumped in Japan. Ministers take part in central bank meetings and give joint statements with central bank governors afterward. New Prime Minister Shinzo Abe has made it very clear what he wants the central bank to do (print more money faster, devalue the yen, create inflation), and to that end, he is looking for a new central bank governor. Of course, only accredited “doves” need apply. A few days ago, Mr. Abe also spelled out what skill set he is really looking for: good marketing skills. Salesmanship:

_Quote_IdiotSince we all have our national interests, sometimes there will be criticism about the monetary policy we are pursuing.
The person needs to be able to counter such criticism using logic.

The course of monetary policy is pretty much fixed. Now it is all about marketing.

In the meantime, the debasement of paper money continues.

Sincerely,
Detlev Schlichter

Paper Money Collapse bookcoverDetlev Schlichter is a writer and Austrian School economist who has spent nearly twenty years working in international finance, including for Merrill Lynch, J.P. Morgan, and Wester Asset Management. 
    His book
Paper Money Collapse conclusively illustrates why paper money systems—those based on an elastic and constantly expanding supply of money as opposed to a system of commodity money of essentially fixed supply—are inherently unstable and why they must lead to economic disintegration.
   
Paper Money Collapse shows that the present crisis is the unavoidable result of elastic money; and that the continuous money production to stimulate the economy could lead to a complete collapse of the monetary system.

This post first reappeared at Laissez Faire Today 

Marriage, under government

What’s the role of government in marriage—what is its legitimate role?

Note that I’m not asking what’s the role or position of marriage itself; I’m not asking what marriage is, nor with whom one should be allowed to get married. What I’m asking is: "what is is government’s proper place in the process?

Understand that marriages (however you might personally might choose to define them) pre-dates government recognition of the phenomenon. In fact, the institution of marriage pre-dates government altogether, so historically it’s not a matter of government defining marriage, but recognising it. Governments saw what people were up to, and thought they could take a cut.  (As, incidentally, did the church.)

And what were people up to? They were making agreements between themselves, mostly about co-habiting. As far as the government was legitimately concerned, what they were recognising that people were making these agreements—and it was the government’s job to protect them.  In this sense, in this particular context, the marriage contract is no different to any other contract the government agrees to protect.

Every contract protects an agreement.  You and I can make a contract with whomever we like, agreeing to anything at all, just as long as what we’re agreeing to do is not illegal. You agree to deliver the goods and I agree to pay you. That’s a contract. You agree to deliver a service and I agree to pay you. That’s a contract. You  agree to love, honour and obey, and I agree to give you half of everything I own when we divorce. That’s another contract—what we choose to call a marriage contract. We agree on that deal (maybe after a little negotiation on the details) and the government registers and prepares to defend the contract if necessary.

That’s their job. Our job is simply to live up to what we’ve agreed to (while keeping out of other people’s similar agreements).

And we can agree to anything we like, just as long as what we’re agreeing to do is not itself illegal.

So where does this put gay marriage, and government’s role in it?

Well, what do you think? 

It seems clear enough to me.

Meanwhile, back in the United Police States

Some Americans are still not sheeple.  And I love principled civil disobedience. 

But I wish it were not necessary.  From Reason.Com:

Enjoy This Montage of People Refusing to Cooperate with DHS Checkpoints:
Here’s a crew of folks refusing to submit to questioning at Department of Homeland Security immigration checkpoints that aren’t actually at the border (and one case of a driver refusing to cooperate with one of California’s produce checkpoints as an employee hilariously thinks he can make him leave the state).

[Hat tip Daily Pundit]

Wednesday, 27 February 2013

Calling all beer historians

KauriPaleAle

Calling all beer historians: What do you know about Kauri Pale Ale, which appears to be a brew produced by a Woodville brewery in the 1930s.

All information gratefully received—good people want to know.

“I want to be a crony”

Vote over at the Economic Freedom blog for the finalists in the Best Liberty Video for 2012.

Here’s my favourite, one I’ve shown here before:

Why be a taxpayer, when you can be a tax spender?

[Hat tip the very discriminating Dr. Marc Street, at his On Liberty Street blog.]

Portugal ended the War On Drugs, and the results are in

Portugal Decriminalized All Drugs Eleven Years Ago And The Results Are Staggering: On July 1st, 2001, Portugal decriminalized every imaginable drug, from marijuana, to cocaine, to heroin. Some thought Lisbon would become a drug tourist haven, others predicted usage rates among youths to surge.  Eleven years later, it turns out they were both wrong.”

The results are in, and they’re clear:

  • a drastic reduction in addicts, with Portuguese officials and reports highlighting that this number, at 100,000 before the new policy was enacted, has been halved in the following ten years;
  • Portugal's drug usage rates are now among the lowest of EU member states;
  • a lot fewer sick people. Drug related diseases including STDs and overdoses have been reduced even more than usage rates.

What’s more, criminal gangs are left without the windfall profits from drugs they enjoy in every other jurisdiction. “The worst thing that can happen to the gangsters and organized crime is for marijuana or other drugs to be legalized.”

Freedom works. Prohibition still doesn’t.

“China Has Its Own Debt Bomb” [updated]

This excerpt from the Wall Street Journal was sent to me by a reader with the comment, “This is very telling”:

China Has Its Own Debt Bomb”: … Even if China dodges a financial crisis, then, it is not likely to dodge a slowdown in its increasingly debt-clogged economy. Through 2007, creating a dollar of economic growth in China required just over a dollar of debt. Since then it has taken three dollars of debt to generate a dollar of growth. This is what you normally see in the late stages of a credit binge, as more debt goes to increasingly less productive investments. In China, exports and manufacturing are slowing as more money flows into real-estate speculation. About a third of the bank loans in China are now for real estate, or are backed by real estate, roughly similar to U.S. levels in 2007...

“And how much of this is "sunk" in inflated land prices?” asks my correspondent.  Probably a fair proportion, would be my answer—perhaps because in China, even more than elsewhere, more savings are held in property as property is one of the chief ways in which savings are thought to be secure.  Just one reason so much Chinese money is finding its way into NZ real estate.

Which means the Chinese credit bubble is also our own credit bubble.

UPDATE: “As Goes China, So Goes The World And Definitely Australia

QUOTE OF THE DAY: How to handle exploding govt debt

“What about defaulting on [exploding government] debt? San Jose State University economist Jeff Hummel has written that government default would be ‘a balanced budget amendment with teeth’ because it would be hard for the [government] to borrow after stiffing their creditors. Bruce Bartlett argues that default ‘would constitute a grossly immoral theft of trillions of dollars from those who loaned money to the federal government in good faith.’ Really? It’s worse to default on creditors who took a risk than to forcibly take money from taxpayers who have no choice?” [emphasis added]
             - David Henderson, “Bartlett on Tax Reform

[Hat tip John Cochran]

Tuesday, 26 February 2013

SUMMER SNIPPETS: ‘The Mystery of Capital’

More snippets from some of my summer reading, this time from Peruvian economist Hernando de Soto’s 2003 classic The Mystery of Capital, the work that brought home to all those who read it that what the have-nots have not is at root property rights, without which they will forever remain without.

The major stumbling block that keeps the rest of the world from benefiting from capitalism is its inability to produce capital. Capital is the force that raises the productivity of labour and creates the wealth of nations. It is the lifeblood of the capitalist system, the foundation of progress, and the one thing that the poor countries of the world cannot seem to produce for themselves, no matter how eagerly their peoples engage in all the other activities that characterize a capitalist economy.”

Even in the poorest countries the poor save. The value of savings among the poor is, in fact, immense: forty times all the foreign aid received throughout the world since 1945. In Egypt, for instance, the wealth that the poor have accumulated is worth fifty-five times as much as the sum of all direct foreign investment ever recorded there, including the Suez Canal and the Aswan Dam.
    “In Haiti, the poorest nation in Latin America, the total assets of the poor are more than 150 times greater than all the foreign investment received since the country’s independence from France in 1804. If the United States were to hike its foreign-aid budget to the level recommended by the United Nations – 0.7 per cent of national income – it would take the richest country on earth more than 150 years to transfer to the world’s poor resources equal to those that they already possess.
    “But they hold these resources in defective forms: houses built on land whose ownership rights are not adequately recorded, unincorporated businesses with undefined liability, industries located where financiers and investors cannot see them. Because the rights to these possessions are not adequately documented, these assets cannot readily be turned into capital, cannot be traded outside of narrow local circles where people know and trust each other, cannot be used as collateral for a loan and cannot be used as a share against an investment. In the West, by contrast, every parcel of land, every building, every piece of equipment or store of inventories is represented in a property document that is the visible sign of a vast hidden process that connects all these assets to the rest of the economy.”

One of the greatest challenges to the human mind is to comprehend and gain access to those things we know exist but cannot see. Not everything that is real and useful is tangible and visible. Time, for example, is real, but it can only be efficiently managed when it is represented by a clock or a calendar. Throughout history, human beings have invented representational systems – writing, musical notation, double-entry bookkeeping – to grasp with the mind what human hands could never touch. In the same way the great practitioners of capitalism, from the creators of integrated title systems and corporate stock to Michael Milken, were able to reveal and extract capital where others saw just junk by devising new ways to represent the invisible potential that is locked into the assets we accumulate.”

imageThe proof that property is pure concept comes when a house changes hands; nothing physically changes. Looking at a house will not tell you who owns it. A house that is yours today looks exactly as it did yesterday when it was mine. It looks the same whether I own it, rent it or sell it to you. Property is not the house itself but an economic concept about the house, embodied in a legal representation. This means that a formal property representation is something separate from the asset itself.”

For [Adam] Smith, economic specialization – the division of labour and the subsequent exchange of products in the market – was the source of increasing productivity and therefore ‘the wealth of nations’. What made this specialization and exchange possible was capital, which Smith defined as the stock of assets accumulated for productive purposes. Entrepreneurs could use their accumulated resources to support specialized enterprises until they could exchange their products for the other things they needed. The more capital was accumulated, the more specialization became possible, and the higher society’s productivity would be. Marx agreed; for him, the wealth capitalism produces presents itself as an immense pile of commodities…
     “It is, as it were, a certain quantity of labour stocked and stored up to be employed, if necessary, upon some other occasion.’
    … “What I take from [Smith] is that capital is not the accumulated stock of assets but the potential it holds to deploy new production. This potential is, of course, abstract. It must be processed and fixed into a tangible form before we can release it – just like the potential nuclear energy in Einstein’s brick. Without a conversion process – one that draws out and fixes the potential energy contained in the brick – there is no explosion; a brick is just a brick. Creating capital also requires a conversion process.
    “This notion – that capital is first an abstract concept and must be given a fixed, tangible form to be useful – was familiar to other classical economists. Simonde de Sismondi, the nineteenth-century Swiss economist, wrote that capital was ‘a permanent value, that multiplies and does not perish . . . Now this value detaches itself from the product that creates it, it becomes a metaphysical and insubstantial quantity always in the possession of whoever produced it, for whom this value could [be fixed in] different forms.’ The great French economist Jean Baptiste Say believed that ‘capital is always immaterial by nature since it is not matter which makes capital but the value of that matter, value has nothing corporeal about it’.
    “This essential meaning of capital has been lost to history. Capital is now confused with money, which is only one of the many forms in which it travels…”

As Aristotle discovered 2,300 years ago, what you can do with things increases infinitely when you focus your thinking on their potential. By learning to fix the economic potential of their assets through property records, Westerners created a fast track to explore the most productive aspects of their possessions. Formal property became the staircase to the conceptual realm where the economic meaning of things can be discovered and where capital is born.”

The genius of the West was to have created a system that allowed people to grasp with the mind values that human eyes could never see and to manipulate things that hands could never touch.”

Formal property is more than a system for titling, recording and mapping assets – it is an instrument of thought, representing assets in such a way that people’s minds can work on them to generate surplus value. That is why formal property must be universally accessible: to bring everyone into one social contract where they can cooperate to raise society’s productivity.”

imageA good legal property system is a medium that allows us to understand each other, make connections and synthesize knowledge about our assets to enhance our productivity. It is a way to represent reality that lets us transcend the limitations of our senses. Well-crafted property representations enable us to pinpoint the economic potential of resources so as to enhance what we can do with them. They are not ‘mere paper’: they are mediating devices that give us useful knowledge about things that are not manifestly present.”

The capacity of property to reveal the capital that is latent in the assets we accumulate is borne out of the best intellectual tradition of controlling our environment in order to prosper.”

The philosopher John Searle has noted that by human agreement we can assign ‘a new status to some phenomenon, where that status has an accompanying function that cannot be performed solely in virtue of the intrinsic physical features of the phenomenon in question’. This seems to me very close to what legal property does: it assigns to assets, by social contract, in a conceptual universe, a status that allows them to perform functions that generate capital.”

Throughout history people have confused the efficiency of the representational tools they have inherited to create surplus value with the inherent values of their culture. They forget that often what gives an edge to a particular group of people is the innovative use they make of a representational system developed by another culture. For example, Northerners had to copy the legal institutions of ancient Rome to organize themselves, and learn the Greek alphabet and Arabic number symbols and systems to convey information and calculate. And so, today, few are aware of the tremendous edge that formal property systems have given Western societies. As a result, many Westerners have been led to believe that what underpins their successful capitalism is the work ethic they have inherited, or the existential anguish created by their religions – in spite of the fact that people all over the world all work hard when they can, and that existential angst or overbearing mothers are not Calvinist or Jewish monopolies… Therefore, a great part of the research agenda needed to explain why capitalism fails outside the West remains mired in a mass of unexamined and largely untestable assumptions labelled ‘culture’, whose main effect is to allow too many of those who live in the privileged enclaves of this world to enjoy feeling superior… 
    “This is not to say that culture does not count. All people in the world have specific preferences, skills and patterns of behaviour that can be regarded as cultural. The challenge is fathoming which of these traits are really the ingrained, unchangeable identity of a people and which are determined by economic and legal constraints. Is illegal squatting on real estate in Egypt and Peru the result of ancient, ineradicable nomadic traditions among the Arabs and the Quechuas’ back-and-forth custom of cultivating crops at different vertical levels of the Andes? Or does it happen because in both Egypt and Peru it takes more than fifteen years to obtain legal property rights to desert land? In my experience squatting is mainly due to the latter. When people have access to an orderly mechanism to settle land that reflects the social contract, they will take the legal route and only a minority, like anywhere else, will insist on extra-legal appropriation. Much behaviour that is today attributed to cultural heritage is not the inevitable result of people’s ethnic or idiosyncratic traits but of their rational evaluation of the relative costs and benefits of entering the legal property system.
    “Legal property empowers individuals in any culture, and I doubt that property per se directly contradicts any major culture. Vietnamese, Cuban and Indian migrants have clearly had few problems adapting to US property law. If correctly conceived, property law can reach beyond cultures to increase trust between them and, at the same time, reduce the costs of bringing things and thoughts together. Legal property sets the exchange rates between different cultures and thus gives them a bedrock of economic commonalities from which to do business with each other.”

And so formal property is this extraordinary thing, much bigger than simple ownership. Unlike tigers and wolves, who bare their teeth to protect their territory, man, physically a much weaker animal, has used his mind to create a legal environment – property – to protect his territory. Without anyone fully realizing it, the representational systems the West created to settle territorial claims took on lives of their own, providing the knowledge base and rules necessary to fix and realize capital.”

Monday, 25 February 2013

Responding to the Census demand.

Guest post by Sam Pierson

Census demanders will shortly be knocking on your door demanding you respond. Here's one idea for a principled, gentlemanly and appropriate response.

1.  Write a letter to the Government Statistician in the next few days that goes something like this:-

        Geoff Bascand, Government Statistician
        PO Box 2922
        Wellington 6140

        Dear Sir,
        I wish to let you know in advance that I will not be filling out the census forms I have received.  I
        understand that this is against the law.

        I will expect to be prosecuted as per the law.

        Yours sincerely,
        [Name, Address, Sex, Age]

2.  When the collector comes, return the blank forms explaining that you have not filled them out, that you have let Mr Bascand know. and that you expect to be prosecuted.  Be polite.  Be courteous. Be brief.

3.  Within a month or so following the census, write to Mr Bascand referring to your original letter, and asking when you can expect prosecution proceedings to commence.

4.  If you get a fine in the mail, seek to go to court.

5.  In court, make a clear and concise statement explaining why you disagree with the law in principle. Do not try to get out of it. Openly accept that under the law you should be prosecuted for your offence and agree you have broken the law.

6.  If you hear nothing at all, go to the Statistics Department office in person & turn yourself in to Mr Bascand.

In all dealings be the model of polite & cheerful.  This is important.  Don't try to convert or convince anybody over the rightness of your cause.  Don't grandstand or seek attention.  Other than in court, and even then, be of few words.  The line is: 'I did not fill out my census form and I expect the Department to do its job, under law, and prosecute me.'

Within government & popular opinion, the census is seen as a minor imposition for the greater good of gathering the data to make 'better' public policy decisions in a 'modern' nation-state.  The aim of this response is to register dignified, civilised disagreement to all that: disagreement to the imposition & disagreement to the idea that the data collected for the state planners is good for us & our fellow countryfolk.  (See Doc McGrath's post here for more, and for his alternative response.)

As we also believe in the rule of law, we believe laws that are made should be followed.  Hence the request that the department do its lawful job & prosecute.

You'll probably need be prepared to spend $500, maybe some more—hard to tell.  We'll have a pub meetup a little while after the census to exchange stories & progress for those interested.  This is an individual by individual response, but no one will get left behind.

Do it with low to no expectations, in a breezy spirit. 

Good luck.  
Tallyho!

UPDATE: And in Northland,

Party rebels over 'intrusive' Census
Libertarianz Northland coordinator Helen Hughes will be holding a party on Census day - March 5 - to "responsibly" destroy her form with others opposed to the information gathering exercise.
Ms Hughes admits it's exhorting people to take part in a mass form of civil disobedience, but said many didn't like the intrusive nature of the Census and don't trust the Government.
"Nobody should destroy their [census] forms unless they know what they are protesting against. Yes, it's urging people to break the law, but when the law is wrong then protest is absolutely necessary."

The Biggest Crisis to Hit the Stock Market Since the Last One

Guest post by Kris Sayce from Money Morning Australia 

The Biggest Crisis to Hit the Stock Market Since the Last One

What did we tell you a few weeks ago?  It’s impossible for the stock market to move up or down until the Wall Street whiz kids and mainstream media create a new catchphrase.

‘Debt ceiling’, ‘fiscal cliff’, ‘credit crunch’, and ‘Grexit’.  You’ve heard them all.  Each time one of those terms rears its head, the market falls. Then soon enough someone finds a ‘solution’ and stocks roar again.

Well, it looks as though we’ve got a new excuse for stocks to fall. And this one is the scariest of all.

It’s ‘The Sequester‘.

What does it mean and should you worry about it?  For an explanation of The Sequester, here’s the Washington Post:

The sequester is a group of cuts to federal spending set to take effect March 1, barring further congressional action.
    The sequester was originally passed as part of the Budget Control Act of 2011 (BCA), better known as the debt ceiling compromise.
    It was intended to serve as incentive for the Joint Select Committee on Deficit Reduction to come to a deal to cut $1.5 trillion over 10 years. If the committee had done so, and Congress had passed it by Dec. 23, 2011, then the sequester would have been averted.

In short, the US Congress and Obama Administration need to agree to cut a bunch of government spending, raise taxes, or both. If they don’t then it means a total of USD$85.4 billion in mandatory cuts spread across defence, discretionary spending and Medicare.

So, they’ve got just about a week to figure things out. Will they? Or will you see history repeat itself? Here, let us explain…

Stocks Fall Again, Will They Rise Again?

Last Thursday the Australian share market dropped 118.6 points…or 2.3%.  Investors are worried. They’re worried the US Federal Reserve may turn off the money tap. If that happens the stock market will have to fend for itself.

Add that to The Sequester and you’ve got a recipe for a stock sell-off.

As we said at the start, the market and mainstream investors are so insecure that they can’t buy or sell anything without an excuse. They need a big macro-economic disaster…and they need to give it a name.

They’ve done that before. So many times we’re bored of it. Here’s a chart of the US S&P 500 going back to 2007. We’ve overlaid data from Google Trends. The marks on the chart indicate the point at which each phrase reaches the peak in news headlines:

Click here to enlarge
Source: Google Finance, Google Trends

You remember the ‘Credit Crunch’. Headlines containing that phrase peaked in October 2008. The fear of a Greek exit (‘Grexit’) from the European Union peaked in May 2012.

And the Fiscal Cliff hit a crescendo in December…just before US stocks bagged a 9% gain in four weeks!

Each of these phrases has something in common – a short shelf life. The media reaches a frenzy,stocks sell-off and then…that’s right, politicians reach a bogus deal and the crisis is over…until the next crisis arrives.

That’s where we are with ‘The Sequester’…

That’s where we are with ‘The Sequester’. Use of the term has gone sky-high since the start of the year. Check it out for yourself on Google Trends (and sign up for Google+ while you’re there so you can follow our commentary throughout the day).

But we’re prepared to bet that you’ll see another eleventh-hour squib of a deal and they’ll avert the crisis…until the next time anyway. And you can guess what will happen then: stocks will take off, as we dare say part of the deal will involve more spending and/or more money printing.  And if we’re wrong? That’s why we hold dividend-paying stocks for income, cash for safety and gold for insurance. This volatility and fake crisis solving is why we’ve gone on so much about spreading your money around into various asset classes.  If you’ve followed this advice, then yesterday you should have just sat back and enjoyed the view.

Just because politicians and everyone else is irrational, doesn’t mean you have to be.

Cheers,
Kris
Kris Sayce is an Investment Director for Port Phillip Publishing and an editor for Money Morning Australia.

Friday, 22 February 2013

State-owned companies in the REAL world

Via Dim Post:

Solid Energy is at a crisis point, with a Government bailout almost inevitable, mine closures possible and further job cuts likely in another restructure to try to salvage the debt-ridden coal mining company.
   
The state-owned enterprise yesterday revealed it was in talks with its banks and the Government over its future after its debt rose to $389 million and a further “significant loss” would be in its half-year result.
   
The company posted a $40 million loss last year
     Solid Energy’s financial condition has deteriorated over the past two years, a slump it attributed to a 40 per cent fall in coal prices and low returns on investment attempts in areas such as biofuels.

So state-owned Solid Energy geared itself for debt which it used to pay massive salaries to its executives and boost dividends to the state. Now it’s collapsed and the taxpayer will bail it out.

Good old long-suffering taxpayer.

I guess that’s the advantage of having your companies state-owned: they bring the benefit of government monopolies and freedom from commercial imperatives to bear on steadily and progressively diminishing the value of the assets they oversee—transforming their capital over time from assets into dead losses.  And all the losses they make every year are socialised.

Good old long-suffering taxpayer, who loses twice over—once in the blundering mismanagement of assets ever-dwindling in value; twice in the losses for which he is always and every time on the hook.

Meanwhile, dullards scream for more companies like this, the lietmotif of all such entities being that they produce fewer resources than they consume.

And this is supposed to be an era that values “sustainability.”

[Hat tip, sort of, to Dim Post’s post]

The Rebuild(TM): Tell us your story [updated]

DSC_0061

It’s now exactly two years since the big earthquake that tore Christchurch apart, two-and-a-half years since the first large shake, and despite lots of talk about The RebuildTM, there’s been precious little rebuilding and lots and lots of hindrances and prohibitions on any building at all.

Perhaps because all the talk has been about The Rebuild—a phrase revealing the top-down thinking of central planners, who move with glacial pace their wonders to under-achieve--rather than about rebuilding—a word describing a process in which people just get on with it.

Which is why when I hear the grey ones talking ad nauseum about The Rebuild I want to scream.

So on this inauspicious anniversary, when we commemorate how government both central and local has managed to do to the city what the earthquake couldn’t quite manage, rather than me saying again what I’ve said umpteen times before about The Nonbuild (see below), why not take this chance, Cantabrian readers, to tell us what’s been happening to you.

Tell us your story.

JUST SOME OF THE STILL-RELEVANT POST-EARTHQUAKE COMMENTARY
THAT’S APPEARED HERE AT NOT PC:

UPDATE: I can’t resist fisking John Key’s media release to mark the second anniversary (Key’s coments are in italics):

Rebuilding Christchurch is one of the four priorities my Government has for this term in office…
…and it looks like a disaster. Still, with two of the other three “priorities” (stronger economy and responsible finances) looking worse by the month, and the fourth (asset sales) all blown out of the water, at least they’re all of a piece.  And at least he said “rebuilding.”

The destruction in greater Christchurch means we're facing unprecedented circumstances, but each time I visit the city I am staggered by the progress that has been made.
Progress? What progress?  Let’s see what he can spin to find something to boast about….

The land zoning process is pretty much complete.…
My god, is this really achievement number one?!   The planners, who have been active (for two frickin years!) drawing lines on paper prohibiting folk doing what they wish with their own property, are almost finished! Two years of folk knowing not what they might or might not be allowed to do!!  But cheer up, this process is now “pretty much complete.”

…and by the end of the year more than 50,000 house repairs are expected to be completed under the EQC managed repair programme. 
I really don’t think “managed” is the word to use for anything related to EQC. And this 50,000 figure is not “progress that has been made.”  It’s progress promised “by the end of the year,” promised with a smile and wave, with no care and every little responsibility because a meagre 13,000 houses is all that the “the EQC managed repair programme” has actually managed to repair in two fricken years! Not exactly progress. And not much to boast about.

The CBD red zone is decreasing and we expect the cordon to be gone by the middle of the year. 
Translation: The cordon around the city for the last two years keeping land and business owners from their property in the CBD might be taken down in a few months. It might. But only if, by then, we’ve turned the entire CBD into a carpark, with or without the permission of property owners.

Economic activity is improving, with latest figures showing 7.5 per cent growth in the region year on year, and
over 16,000 more people were employed in Christchurch last year.
”Last year”: i.e., a year in which economic activity was only just beginning to recover from being blasted to hell and back.   And while 16,000 more is better than 16,000 fewer, overall employment levels are still well below pre-earthquake employment levels.

In other words, don’t believe a frickin’ thing these bastards say.

Thursday, 21 February 2013

Calling all beer lovers

I have need of your assistance.

Help!

My local tennis club is changing its beer supplier to DB, who are putting money into the bar in return for an exclusive supply agreement. Result being that the only beer the bar can stock is a DB beer—which is to say either a DB or a Tui or a Monteith’s. And after a decent run around the tennis court (my standard of tennis meaning I’m the one usually doing the running), a man is desperately in need of a decent drop.

I do have the opportunity to recommend something drinkable out their range to come out of the club’s taps or beer fridge, but I fear there’s nothing there to recommend.  Unless one of you can?

D.I.Y. complaining

The Herald this morning has a special supplement on building and renovating, with a cover story wringing its hands about NZers love for Do-It-Yourself—the basic tone being, “how dare they!”

Former Labour Prime Minister Norman Kirk famously built his own home back in the fifties, “Big Norm” even casting his own bricks. Nowadays, Big Norm would be arrested, fined, and his house probably demolished, being doing it yourself is mostly illegal. DIYers these days are restricted by law (both National’s and Labour’s) to doing bugger all around their own house. Anything more than a bit of painting, or knocking up a few shelves inside your own home—or something a little more aggressive outside it—is almost immediately going to have some nosey parker poking his nose over your fence going “I hope you’re allowed to do that.” 

Most of the nosey types have been interviewed for the Herald article, discussing in calamitous tones how frightful it is that home owners are actually allowed to build their own retaining walls, or knock up a pergola.

Far and away the most egregious of these low-lifes is lawyer Paul Grimshaw (famous for making more out of leaky home cases than home owner themselves). Grimshaw is a 'Vholes,' the kind of lawyer Dickens describes as "always looking at the client as if he were making a lingering meal of him with his eyes as well as his professional appetite."

imageThis particular Vholes emphatically declares that allowing you and I and any other prospective home builder or re-modeller to do anything at all is a big mistake, least of all be allowed to do any building or remodelling without asking permission first from the grey ones. “We should be making it as difficult as possible to obtain a building consent,” says the maggot.

Oscar

This Oscar Pistorius story is all a bit strange, isn't it?  There must definitely be more to it.  He seemed so happy just the other day, he had such a spring in his step…

Yes, it was only minutes after Oscar Pistorius’s arrest that the jokes began … all taking the Pistorius.

His lawyer's got a hard job ahead of him. Realistically, it looks like Pistorius hasn't got a leg to stand on.

Oscar clearly misunderstood when his girlfriend told him that on Valentine's Day he had to take her out.

Oscar Pistorius is pleading not guilty due to temporary diminished responsibility.  He claims he was legless at the time of the incident.

blade

Whatever happens in court, he still has a career. The IOC say he’s a front runner  at the next Olympics for pistol shooting.

Police reconstruction indicates that Pistorius lost it when, for his Valentine's Day gift, his girlfriend gave him a pair of socks.

New Valentine’s Day card: “Roses are red, violets are glorious.  Never creep up On Oscar Pistorius.”

Too many Oscar Pistorius jokes already. Trying to come up with a new one is like taking a shot in the dark.

Looks like he has an expensive lawyer. I hope he can foot the bill.

Otherwise, the Oscar goes to........................Jail !!

New evidence has been found outside the Pistorius home that completely acquits him of his girlfriend's murder................ Footprints!

She didn't notice Oscar sneaking up behind her. It was the silence of the limbs.

I see what Pistorius is doing. He is going to jail for 25 years and when he gets released... Bam! President of South Africa. That's how it works over there, right?

When Oscar Pistorius said he wanted to be just like able-bodied athletes, who knew he meant OJ Simpson?

Surely Oscar Pistorius isn't the first man to wake up legless during Valentine's night, then shoot all over his partner whilst imagining she's somebody else?

First Tiger Woods, then Lance Armstrong, and now Oscar Pistorius. I think Nike should start telling their athletes " Just  Don't Do It."

Hollywood are doing his life story; it's now going to be called Blade Gunner.

If found guilty he's gonna have to take it on the shin.

And finally,

Anyone making jokes about Oscar Pistorius is just prosthetic!

This means you.

PS: So what’s wrong with cheap, dirty jokes. I never said I was tasteful.  And on some stories, you have to go out on a limb….

Wednesday, 20 February 2013

“You should be forced to buy this book”

The title of this post comes from Stephen Hicks, who blogs on a new book by aspiring philosopher-queen Sarah Conly defending paternalistic laws;

conly-aathat is, laws that make you do things, or prevent you from doing things, for your own good. I argue [says the bossy bitch] that autonomy, or the freedom to act in accordance with your own decisions, is overrated … we need the help of others—and in particular, of government regulation—to keep us from going wrong.”

To which busybody-babble Hicks drily responds:

Rumour has it that contrarian paternalists disagree violently, arguing that Conly should have been prevented by force from writing the book.

What does she miss? Many things, including this: “To be fully human is to make one’s own decisions and initiate one’s own actions in life.”

Sarah Conly is not fully human.

Or wishes not to be.

SUMMER SNIPPETS: ‘Wolf Hall’ by Hilary Mantel

More snippets below from my summer reading…

While we’re talking about figures  undeservedly maligned by history – possibly --  allow me to introduce to you (if you haven’t already been introduced) a new view of Thomas Cromwell—a man for the modern age.

Who?

An apprentice to Cardinal Wolsey, the sometimes benevolent sometimes bullying Thomas Cromwell (right, in a classic painting by Holbein) was the advisor to King Henry VII through one Reformation, three marriages and many royal successes (and successors).  He is a villain however in Robert Bolt’s Man For All Seasons, and hence—for the generation that venerated that play—a villain in real life.

Hilary Mantel sought to overturn that notion in her novel, Wolf Hall, the first of a first-person trilogy portraying a worldly-wise master technocrat-–the crafty, capable power behind Henry’s middle-period throne. Our Cromwell has read his Machiavelli, Mantel tells us…

He has got Niccolò Machiavelli's book, Principalities; it is a Latin edition, shoddily printed in Naples, which seems to have passed through many hands.

…and the layers of meaning in that sentence tell us much about both men—and about Mantel’s multi-layered writing.  But Mantel’s Thomas would have much to teach Machiavelli …

Mantel’s Cromwell is himself a self-made success, rising from his poor beginnings as an oft-beaten blacksmith’s son in the quickest way possible in Tudor England: through business success and marriage, in Cromwell’s case both combined .

When he got back to London he knew he could turn the business around. Still, he needed to think of the day-to-day. ‘I've seen your stock,’ he said to [his future father-in-law] Wykys. ‘I've seen your accounts. Now show me your clerks.’ That was the key, of course, the key that would unlock profit. People are always the key, and if you can look them in the face you can be pretty sure if they're honest and up to the job. He tossed out the dubious chief clerk – saying, you go, or we go to law – and replaced him with a stammering junior, a boy he'd been told was stupid. Timid, was all he was; he looked over his work each night, mildly and wordlessly indicating each error and omission, and in four weeks the boy was both competent and keen, and had taken to following him about like a puppy. Four weeks invested, and a few days down at the docks, checking who was on the take: by the year end, Wykys was back in profit.
    “Wykys stumped away after he showed him the figures. ‘Lizzie?’ he yelled. ‘Lizzie? Come downstairs.’ She came down. ‘You want a new husband. Will he do?’ She stood and looked him up and down. ‘Well, Father. You didn't pick him for his looks.’ To him, her eyebrows raised, she said, ‘Do you want a wife?’ ‘Should I leave you to talk it over?’ old Wykys said. He seemed baffled: seemed to think they should sit down and write a contract there and then. Almost, they did. Lizzie wanted children; he wanted a wife with city contacts and some money behind her. They were married in weeks. Gregory arrived within the year. Bawling, strong, one hour old, plucked from the cradle: he kissed the infant's fluffy skull and said, I shall be as tender to you as my father was not to me. For what's the point of breeding children, if each generation does not improve on what went before?”

Mantel always likes to include a moral, or a quip.

“How simple it would be, if he were allowed to reach down and shake some straight answers out of Norris [, a king’s man come to threaten harm to Cromwell’s cardinal]. But it's not simple; this is what the world and the cardinal conspire to teach him.
    “Christ, he thinks, by my age I ought to know. You don't get on by being original. You don't get on by being bright. You don't get on by being strong. You get on by being a subtle crook; somehow he thinks that's what Norris is, and he feels an irrational dislike taking root, and he tries to dismiss it, because he prefers his dislikes rational, but after all, these circumstances are extreme…”

“He looks down  from a window [at the small groups of Londoners beginning to gather outside his gate], and feels he recognises them; they are sons of the men who every autumn stood around gossiping and warming themselves by the door of his father's forge. They are boys like the boy he used to be: restless, waiting for something to happen.
    “He looks down at them and arranges his face. Erasmus says that you must do this each morning before you leave your house: ‘put on a mask, as it were.’ ”

The hero of Man For All Seasons was Thomas More [right, in Holbein’s famous portrait, now curiously housed]—executed by Henry VIII (with the edge of an old axe) for refusing to countenance his (Henry’s) divorce. Mantel’s More is altogether less heroic, and more the sort of man to whose family he was dictator, and who as Chancellor would happily get hold of you and shut you in his cellar. “And all we will hear is the sound of screaming.”

“It is Christmas Eve when Alice More [Thomas’s widow] comes to see him. There is a thin sharp light, like the edge of an old knife, and in this light Alice looks old. He greets her like a princess, and leads her into one of the chambers he has had repanelled and painted, where a great fire leaps up a rebuilt chimney. The air smells of pine boughs. ‘You keep the feast here?’ Alice has made an effort for him; pinned her hair back fiercely, under a bonnet sewn with seed pearls. ‘Well! When I came here before it was a musty old place. My husband used to say,’ and he notes the past tense, ‘my husband used to say, lock Cromwell in a deep dungeon in the morning, and when you come back that night he'll be sitting on a plush cushion eating larks' tongues, and all the gaolers will owe him money.’ ‘Did he talk a lot about locking me in dungeons?’
    “ ‘It was only talk.’ ”

The asides can be wonderfully wise.

The English will never be forgiven for the talent for destruction they have always displayed when they get off their own island.”

There cannot be new things in England. There can be old things freshly presented, or new things that pretend to be old. To be trusted, new men must forge themselves an ancient pedigree, like Walter's, or enter into the service of ancient families. Don't try to go it alone, or they'll think you're pirates.”

Sometimes … he feels almost impelled to speak in defence of his [child-beating] father, his childhood.  But it is no use to justify yourself. It is no good to explain. It is weak to be anecdotal. It is wise to conceal the past even if there is nothing to conceal. A man's power is in the half-light, in the half-seen movements of his hand and the unguessed-at expression of his face. It is the absence of facts that frightens people: the gap you open, into which they pour their fears, fantasies, desires.”

“[Cardinal] ‘Wolsey always said that the making of a treaty is the treaty. It doesn't matter what the terms are, just that there are terms. It's the goodwill that matters. When that runs out, the treaty is broken, whatever the terms say.’ ”

It's all very well planning what you will do in six months, what you will do in a year, but it's no good at all if you don't have a plan for tomorrow.’

When you are writing laws you are testing words to find their utmost power. Like spells, they have to make things happen in the real world, and like spells, they only work if people believe in them.”

The blacksmith’s son threatens lords by pointing out where power lies in the modern age.

“‘My lord,’ he says. ‘You have said what you have to say. Now listen to me. You are a man whose money is almost spent. I am a man who knows how you have spent it. You are a man who has borrowed all over Europe. I am a man who knows your creditors. One word from me, and your debts will be called in.’
    “‘Oh, and what can they do?’ Percy says. ‘Bankers have no armies.’
    “‘Neither have you armies, my lord, if your coffers are empty… Let's say I will rip your life apart. Me and my banker friends.
    “How can he explain to him? The world is not run from where he thinks. Not from his border fortresses, not even from Whitehall. The world is run from Antwerp, from Florence, from places he has never imagined; from Lisbon, from where the ships with sails of silk drift west and are burned up in the sun. Not from castle walls, but from counting houses, not by the call of the bugle but by the click of the abacus, not by the grate and click of the mechanism of the gun but by the scrape of the pen on the page of the promissory note that pays for the gun and the gunsmith and the powder and shot. ‘I picture you without money and title,’ he says. ‘I picture you in a hovel, wearing homespun, and bringing home a rabbit for the pot. I picture your lawful wife Anne Boleyn [whom the king now covets] skinning and jointing this rabbit. I wish you every happiness.’ ”

The gentlemen of England apply for places in his household now, for their sons and nephews and wards, thinking they will learn statecraft with him, how to write a secretary's hand and deal with translation from abroad, and what books one ought to read to be a courtier. He takes it seriously, the trust placed in him; he takes gently from the hands of these noisy young persons their daggers, their pens, and he talks to them, finding out behind the passion and pride of young men of fifteen or twenty what they are really worth, what they value and would value under duress. You learn nothing about men by snubbing them and crushing their pride. You must ask them what it is they can do in this world, that they alone can do.”

PS: The double-Booker prize winning Mantel is currently making headlines, or having them made for her, for attacking the odious over-attraction to royalty, saying in a recent speech:

When [Princess Kate’s] pregnancy became public she had been visiting her old school, and had picked up a hockey stick and run a few paces for the camera. BBC News devoted a discussion to whether a pregnant woman could safely put on a turn of speed while wearing high heels. It is sad to think that intelligent people could devote themselves to this topic with earnest furrowings of the brow, but that’s what discourse about royals comes to: a compulsion to comment, a discourse empty of content, mouthed rather than spoken. And in the same way one is compelled to look at them: to ask what they are made of, and is their substance the same as ours.
    I used to think that the interesting issue was whether we should have a monarchy or not. But now I think that question is rather like, should we have pandas or not? Our current royal family doesn’t have the difficulties in breeding that pandas do, but pandas and royal persons alike are expensive to conserve and ill-adapted to any modern environment. But aren’t they interesting? Aren’t they nice to look at? Some people find them endearing; some pity them for their precarious situation; everybody stares at them, and however airy the enclosure they inhabit, it’s still a cage.