It's Shitty Anniversary time

A year ago, Donald Trump stood in the Rose Garden, surrounded by charts nobody understood, and declared war on mathematics. One year later, not even the Rose Garden remains.

It's being called "The Greatest Economic Own Goal in Living Memory" -- and that was before the same goal-scorer launched a war without a strategy that's locked up twenty percent of the world's traded oil behind the mullahs' missiles. 

This, above, was one year ago today when Donald Trump stood in the White House's Rose Garden to shoot himself and world trade in the foot. 

Today, we 'celebrate' the anniversary of  one man's gut feelings over economic reality...

One Year On: The Greatest Economic Own Goal in Living Memory
by Gandalv 

One year ago, Donald Trump stood in the Rose Garden, surrounded by charts nobody understood, and declared war on mathematics. He called it Liberation Day. 

The Financial Times, along with every economist who has read more than a bus ticket, is marking the anniversary with a verdict that should be carved into marble: it failed. On every single front. Spectacularly. Completely. Embarrassingly. 

Let us be precise about this. 

Measured against Trump’s own three stated goals, making foreigners pay for doing business with America, narrowing the trade deficit, and punishing China, the tariffs have clearly failed. Not partially failed. Not failed with asterisks. Failed the way a man fails when he drives a Reliant Robin the wrong way onto a motorway and acts surprised when it rolls. 

And everyone said so. Economists said so. Trading partners said so. His own party said so. The entire field of international trade theory, developed over roughly two centuries by people who actually read things, screamed it from the rooftops. [Even this humble blog said so.] But Donald Trump, a man whose relationship with economics appears to consist entirely of gut feeling, cable television and 6 casino bankruptcies knew better. 

The average American household paid an extra $1,700 due to tariffs. Over 65 percent of Americans reported that everyday goods became significantly less affordable. This is what happens when you run the world’s largest economy on instinct and vibes. 

One year after the Rose Garden ceremony, factory jobs are down and inflation is up. The precise opposite of what was promised. And promised with extraordinary (and wholly unjustified) confidence. 

Then the lawyers arrived. 

The Supreme Court found that Trump had exceeded his authority, ruling that the declared emergency bore no rational connection to the trade measures imposed. In other words, the legal foundation was nonsense. The government had collected $166 billion in tariffs from over 330,000 businesses on grounds the Supreme Court found unconstitutional. The refund process is now underway.  One hundred and sixty-six billion dollars. Collected illegally. From American businesses. 

The financial markets, bless them, responded with the only appropriate tool available: mockery. The meme “Trump Always Chickens Out” refuses to go away, and the TACO index is now actively used by analysts to price in the president’s chronic habit of retreating. 

Every serious voice warned this disaster would happen. Trade economists. Former Treasury secretaries. The IMF. The WTO. The EU. Canada. Japan. Basically anyone who had spent more than forty minutes studying how global trade actually works. The man who ignored all of them had previously run a casino into bankruptcy and considered that a learning experience. He was not, it turns out, a fast learner. 

One year. 

Zero of three goals achieved. 

One Supreme Court ruling. 

One $170 billion refund. 

A world economy paying more for everything and making less of it. 

Liberation Day. What a name for it.

Who's to blame for high power prices? It's the usual suspects, of course.

"[I]it frustrates me that our politicians have become victims of short-termism and tribalism. ... But those with the biggest chequebook in town are still responsible for the decisions they make. And this includes 100% responsibility for our high power prices.

"Why are politicians to blame? Because they retain 51% public ownership - and 100% control - of our three biggest power companies - Mercury, Genesis and Meridian.

"And, since they were listed on the stock exchange, no subsequent Government, blue or red-led, has allowed the gentailers to raise the money required to meaningfully expand the supply of power. And this has meant higher power prices. It’s a simple supply and demand thing. ...

"[S]uccessive Crown Ministers have become addicted to the juicy gentailer dividends. Treasury estimates them to have been a combined $5.4 billion since listing. Quid quo pro. And successive Governments have (cunningly) left any political fallout from higher power prices to be their successors’ problem.

"There is a horrible irony in all this. Politicians, with 51% ownership and 100% control of the gentailers, get to blame their management and directors for our high power prices. But, as the majority owners of the gentailers, it’s actually their fault. It’s like your manager making a mistake, but publicly shaming you.

"And there is only one loser in all this: everyone who pays their power bill. ....

"[We have neither] 100% Government ownership of our power companies ... [nor] 100% private ownership. ... Instead, we have a horrible middle ground. 51% ownership by the Government -- with 100% control -- yet starving them of the capital to increase power supplies. Yet, if you were to believe the politicians, high power prices were the greedy gentailers’ fault. Rubbish. ...

"Make no mistake, high power prices are 100% the fault of our successive governments, blue and red. They’ve been starving our power companies of the food they require -- capital -- while also milking them for dividends. Ask any dairy farmer how that works out."

~ Sam Stubbs from his op-ed 'Who should we blame for high power prices?' [Emphasis mine]

AUT's dean steps down to go away and work quietly in a corner [updated]

Legal battles can be very personal, but arguments about the law less so. Yet when barrister Gary Judd criticised the impetus from AUT's law school dean Khylee Quince to "embed tikanga" in students' first year -- to be taught that tikanga is "the first law of the country" -- her reply was that Judd, a King's Counsel (KC), should "go die quietly in a corner."

Judd is fortunately still with us. And Quince, still unapologetic, is now stepping down as dean to go away and work quietly in a corner. Her legacy however remains: that those wishing to take up law as a reasoning discipline should try to find a university with a faculty whose leadership has greater respect for that argument.

And issues remain. As Samira Taghavi says (a barrister and practice manager at Active Legal Solutions and a member of The Law Association’s council and Criminal Law committee), 

Khylee Quince’s belittlement of Judd KC raises important questions about the lessons we impart to the next generation of lawyers. Are we equipping them to confront and counter challenging viewpoints effectively? Or are we teaching them to resort to personal attacks?

So let's leave the personal and look at law. As Judd pointed out, quite simply: tikanga cannot be "first law" because tikanga is not law at all, it is a collection of beliefs; to tell students it is law is cultural indoctrination.

[T]ikanga” ... is a set of beliefs, principles of a spiritual nature, a way of life (“the right Māori way of doing things”). When beliefs result in people consistently behaving in a certain way, the behaviour may become customary. Then, in certain carefully confined circumstances, customs may attain the status of law.
    If “tikanga” were confined in its meaning to customs which had attained the status of law, there would be no problem. Introducing a regime which would impose beliefs, principles of a spiritual nature, a way of life of some of our people, on the nation as a whole is a completely different proposition. Beliefs and principles of a spiritual nature are not law. The way of life of some is not part of the law of the land. ...

Where tikanga beliefs have been acted on, they may have given rise to customary behaviour and those customs might [mature] into a species of customary law applicable for specific purposes, for example for determining who owns Māori land, but [one cannot simply declare] that tikanga [is] first law.
Calling tikanga something which patently it is not, not only offends reason but undermines the value of what it actually is. Making a falsehood a fundamental part of the description of its nature is not a good way to ensure its survival. ...
Beliefs, even if common to the entire population, are not law. However, beliefs may cause people to act in a certain way. Those actions may become customary and may even mature into customary law.

But they are not yet law, let alone first law. And hissy fits still won't change that.

UPDATE: Her time is up, literally -- her five-year term has expired. But judging by the results of last September's AUT staff survey, it looks like few of her colleagues will be mourning. Kiwiblog reported:

I have been leaked a copy of the latest staff survey from AUT Law Faculty and it is very clear that it is a very unhappy place. Here are some of their results:Would recommend AUT as a great place to work 45%

• AUT is in a position to succeed 42%
• Have confidence in senior leaders at AUT 35%
• AUT has a thriving research culture 35%
• Am comfortable reporting inappropriate behaviour 30%
• Workloads are divided fairly 25%
• Innovation is recognised and rewarded 20%
• At AUT we are good at learning from our mistakes 20%
• The right people are recognised and rewarded 20%
• If someone is not delivering in their role we do something about it 5% ...

As you can see [in the above Powerpoint screenshot] the results for the Law Faculty are much much lower than AUT as a whole. So this would suggest the major issue is not the central administration, but the faculty management itself. I [David Farrar] am told by sources that everyone knows what the major problem is, but people are too scared to say so.

Chloe Swarbrick's Green Party are promising a 2 percent annual cap on rent increases. At first glance that might sound compassionate, but as Matthew Horncastle observes, "In reality it is a textbook example of bad economics."

As virtually every economist has told us for decades, “In many cases, rent control appears to be the most efficient technique presently known to destroy a city except for bombing.” Politicians keep promising the same thing not so they can actually fix the problem -- even the most inept political reptile is aware of this -- but to win votes from people who still think that emotions can trump the reality of a rent cap.

As Marcos Falcone points out in this guest post, it's not even necessary to understand the reasons for rent control being do destructive. In contrasting the experience of Spain and Argentina, where xxx, he shows what the Greens and Green voters should realise before helping to destroy rental accommodation here...

Rent Control Always Fails—Argentina Shows a Better Way

by Marcos Falcone

On Friday, March 20, in light of the Iran war, which has pushed up energy and other prices, Spanish Prime Minister Pedro Sánchez announced measures to lower the cost of living. Rent control was included among those measures, even though it is already failing in Spain.

Reportedly under pressure from one of its left-wing coalition partners, Sánchez decreed a nationwide contract extension at current prices for rentals about to expire, effectively amounting to a rent freeze. He has also instituted a 2 percent annual cap on rent increases through the end of 2027, which will apply to existing contracts currently indexed to inflation.

Ironically, a report published by the Instituto Juan de Mariana the same week as Sánchez’s announcement shows the extent of the harm that various forms of rent control are already causing in Spain. Following the introduction of rent caps in the region of Catalonia in 2024, the supply of rental housing has declined by 23 percent. Even more dramatically, the city of A Coruña and the region of Navarra saw rental supply fall by 44 percent and 51 percent, respectively, only six months after they designated certain areas as “stressed” housing markets and also imposed rent caps. 

In a country with an estimated deficit of 700,000 housing units, rent control is making things even worse.

Rent control in Spain not only cuts supply but also fails to improve conditions for renters. As the Instituto Juan de Mariana shows, wherever rent control has recently been introduced, average rental unit space has decreased, and prices per square meter have either stayed the same or increased—in Barcelona, for example, prices reached a record high in the third quarter of 2025.

The Spanish experience contrasts sharply with Argentina’s, which has adopted the exact opposite approach since Javier Milei became president in December 2023. 

Before then, listings had plunged by a massive 53 percent following the passage of a rent control law in 2020. But after Milei repealed it ten days after taking office, supplies rose by a staggering 180 percent less than a year and a half later. (My colleague Ryan Bourne and I documented that extensively here). 

As of December 2025, rental prices in the city of Buenos Aires were still almost 30 percent down in real terms from two years before, and supply has not declined.

Rent control does more harm than good, as Ryan Bourne explains in The War on Prices. Hopefully, Spain will correct course as Argentina did before things get much worse.

* * * * 

Marcos Falcone is a policy analyst focusing on Latin America at the Cato Institute’s Center for Global Liberty and Prosperity. His research interests range from contemporary public policy in his home country of Argentina to the history, theory, and language of classical liberalism. His essays have received awards by the Mont Pelerin Society, Caminos de la Libertad, and the European Center for Austrian Economics, among others. His columns appear frequently in Argentine and US media.

His post first appeared at the Cato at Liberty blog.

The fuel crisis delivers a chance for genuine political leadership

"New Zealand does not possess the people, the capital, or the institutional settings to maintain our first world status. We are moving from the bottom of the OECD to the top of the developing world.

"[It's a] problem [when] ... the price of construction is the highest in the OECD, more than double the average, and ... the cost of capital formation '…which covers machinery, equipment and construction -- is 70% above average in New Zealand and also the highest in the OECD.'

"Meanwhile, global rating agency Fitch confirmed [this] gloomy assessment by downgrading the outlook for New Zealand from dismal to hopeless. I am paraphrasing. They noted that our promised return to fiscal surplus is perpetually delayed due to weak economic growth and expenditure proving more persistent than anticipated. ...

"[T]his [fuel] crisis [however] represents a greater opportunity [for real leadership]. It is chance for the Prime Minister to explain that we cannot borrow our way out of every economic shock. That the path back to fiscal solvency and economic vitality lies not in leveraging the sliver of headroom on the Crown’s balance sheet to avoid addressing our structural deficiencies but in aggressively dealing with those deficiencies.

"I do not mean to diminish the real progress his administration has been achieved but the underlying structural issues of over-regulation and lax fiscal discipline mean all we are doing is slowing the rate of decline.

"Leadership is about telling the electorate what they do not want to hear but need to understand; and that extends well beyond the prospect of a temporary fuel shortage."

~ Damien Grant from his column 'Is this moment that the PM forces me to eat my words? I hope so'

When the “junk heap” is steadily deteriorating

Wastewater analysis suggests increasing recreational drug use among New Zealanders. (Although there are some problems with the data.) But this isn't an issue confined to our small islands.

This is of course when recreational drugs are illegal. So drug consumers are willing to pay more to gangs for a riskier product to get their chosen high.

Two questions always come up when one advocates for drug legalisation. 

The first is that legal drugs will make drug consumption more prevalent and more sordid. This goes against both evidence and theory: Milton Friedman for one arguing that the Iron Law of Prohibition actively encourages the escalation of more virulent pharmaceuticals, to make any drug problem worse.

But the other question is this: 

Why do many people want to abuse drugs and alcohol? Why is this such a persistent problem in our culture — and would it still be a problem in a more rational culture?

Good question. And Stewart Margolis takes a good stab at answering it, beginning by drawing a distinction between drug use and drug abuse. Because clearly there are many well-functioning adults happily consuming recreational drugs including opium, alcohol and caffeine -- and if we trace the history, have been doing so since the first fermented berries were found several thousand years ago.  Indeed,

Archaeologists have found evidence of opium use in Europe by 5,700 BC, and cannabis seeds have been found at archaeological digs in Asia from 8,100 BC.

So it seems at least some adults have discovered a rational way to use mind-altering substances. A decent martini before dinner for example being one of the best ways to shake off the cares of the day.

There may be some that are simply too dangerous to ever be used, but that would be a scientific question rather than a moral one. 

But some adults won't, can't or don't want to be rational about it. If we discount the obvious (that some people are prone to addiction; that there might be genetic factors increasing susceptibility to substance abuse) we're left with the nagging idea that there might be more to it than that. 

Margolis makes the case that the problem is fundamentally philosophical:

Of course, a worldwide problem like this undoubtedly has multi-factorial causes, but I think at root drug abuse is an attempt to escape reality. 

Materially, the world has never been richer, so what are so many people eager to escape from? Despite our affluence, I think we are experiencing a philosophical crisis. 

Ayn Rand pointed out that humans need a philosophy in order to live. In “Philosophy: Who Needs It,” she wrote, 

“Your only choice is whether you define your philosophy by a conscious, rational, disciplined process of thought and scrupulously logical deliberation — or let your subconscious accumulate a junk heap of unwarranted conclusions, false generalisations, undefined contradictions, undigested slogans, unidentified wishes, doubts and fears, thrown together by chance, but integrated by your subconscious into a kind of mongrel philosophy and fused into a single, solid weight: self-doubt.”

 I think Rand was spot on, and the increase we are seeing in drug abuse is the result of the self-doubt brought on by people who have assembled a “junk heap” of often contradictory ideas. This has always been a huge problem, and has always resulted in a tremendous amount of suffering. So why does it seem to be worse now?

I think it’s because the quality of the ideas in the “junk heap” has been steadily deteriorating. 

When ... [common sense and] enlightenment ideas were widespread in the culture, average, unthinking people could randomly pick up a pretty workable set of ideas, which would allow them to prosper and attain a measure of happiness. They were not as happy and prosperous as they could have been, had they done the work of choosing and integrating the right ideas, but they could do all right.

But today, many of the ideas floating around in the cultural are anti-enlightenment. If you unthinkingly accept a collection of these ideas, you are unlikely to prosper or find happiness.

It's perhaps also the case that governments' increasing  economic mismanagement has been making it increasingly difficult for younger folk to get ahead economically -- they can sense that even if they can't see that explicitly -- so that there's part of of them ready to give up on the "old" idea that hard work will pay off.

You [might] notice that you’re not doing as well as your parents did, either economically, romantically, or socially. As a result, you will be filled with doubt, with dread, with a sense that something is wrong with the world — but you don’t know what or how to fix it. I believe this is the feeling that people desperately want to escape — and so they turn to drugs that numb or relieve these feelings, at least temporarily.

While I’m sure there are benefits to be found in a variety of drug and alcohol treatment programmes, I don’t think we’re likely to make much progress on substance abuse until people deal with the underlying philosophical crisis driving the abuse. 

In the meantime, though, making drugs legal would provide a huge benefit, both to those struggling with abuse issues, and more importantly, to those of us who don’t use drugs or who are able to use them responsibly.

Inequality

“In order to make people equal, you have to treat them differently. If you treat people alike, so far as government is concerned, the result is necessarily inequality.

"You can have either freedom and inequality, or unfreedom and equality.”

~ Friedrich Hayek

Taking a stand, living in truth

"[Let's look at] the example of the greengrocer, living in an authoritarian state [who] habitually puts a sign 'Workers of the world, unite!' in his shop window each day even though he doesn’t believe the slogan but understands it is necessary to demonstrate his loyalty to the regime and ensure he stays out of trouble.

"One morning he decides he will no longer put out the sign .... His seemingly trivial action enables him to live more honestly even if he risks official penalties. ... 

"Czech playwright Václav Havel ... who became President of his country in 1989 after the Soviet-backed, communist government collapsed. ... argued that private individuals [lie our greengrocer] can help overturn repressive systems simply by refusing to participate in expected rituals of obedience, no matter how minor.

"And random acts of resistance like the greengrocer’s can give courage to others similarly tired of enforced conformity in totalitarian states — or in liberal democracies. ...

"What Havel saw so clearly is that totalitarian systems don’t primarily run on violence — they run on the complicity of the population. Each person who goes along with the ritual reinforces the illusion that the ritual reflects genuine consensus. Each greengrocer who puts up the sign makes it harder for the next one to refuse.

"New Zealand’s version of this operates through social rather than state coercion, which in some ways makes it harder to name and resist. ... The country is small and the networks are tight; the social cost of being known as a dissenter is higher in a place where everyone knows everyone.

"The result is a kind of pre-emptive self-censorship that Havel would recognise immediately. ... The New Zealand consensus is not a single monolithic ideology but a cluster of positions that have achieved a kind of sacral status ...

"Some of the most charged include the application of Treaty principles across virtually all public policy, certain framings within debates about Māori sovereignty and co-governance, consensus around specific approaches to climate and housing policy ... To question them is to be located, socially and professionally, as the kind of person who questions them, which is itself a disqualifying mark.

"Havel’s prescription is deceptively simple and genuinely demanding: live in truth. ... It means saying plainly, in your own sphere, what you actually think.

"The greengrocer who refuses to put up the sign does something that seems trivially small but is in fact a profound disruption — he breaks the illusion of consensus ...

"In a New Zealand context this looks like the scientist who publishes findings that complicate the preferred narrative, even knowing it will generate institutional discomfort.

• It looks like the journalist who covers a story the consensus would prefer left alone.
• It looks like the professional who declines to sign the ritual statement and explains why calmly and without apology.
• It looks like the historian who prefers to deal in objective facts rather than subjective “stories” and won’t bow to a critical theory neo-Marxist dialectic.
• It looks like the council member who won’t participate in a prayer (disguised as a karakia) before a meeting because of its religious significance.
• It looks like your author who will not use Aotearoa for New Zealand or insert te reo words into a narrative written in English.
• It looks like the ordinary person who says at a dinner table, 'I don’t think that’s quite right,' and is willing to sit with the social discomfort that follows.

"What Havel emphasises is that this is not heroism in any dramatic sense -- it is simply the refusal to participate in the agreed-upon falseness. And its power is precisely that it is available to anyone. You do not need a platform or an institution or a movement. You need only the willingness to say what you see."

~ David Harvey from his post 'Above the parapet'

Are human rights a gift from government?

"Roy, a commenter on my 'Lessons from Iran,' says there is no such thing as human rights: 'Human rights [he says] are given and allowed by Governments.' ...

"If Roy is right, it means that the Iranian people do not have the right to life or liberty because the government of Iran has not given and allowed them to have those rights. By way of an opposite example, it also means that New Zealanders have those rights only because the government has given them to us or allowed us to have them. ...

"John Locke (1632-1704) produced the rationale for certain rights to exist independently of any expression of them in government legislation or the common law. I go into detail below, but the essence is that human beings have certain characteristics which differentiate them from other living things, characteristics which demand of each person that they allow every other person to live their own lives without forcing them or attempting to force them to act or not to act in a particular way.

"That means each person has the right to be left alone and each person has the reciprocal obligation to leave everyone else alone.

"This is a moral imperative, and humans may occasionally or habitually refuse or fail to act in that way. That’s why we have laws proscribing certain conduct. ...

"Humans cannot sustain and live their lives in the uniquely human way unless they are free to do so. Freedom is the fundamental ‘human’ right. It subsumes the right to life because if the individual’s freedom is respected, so also his life will not be in jeopardy from others’ aggressions. It subsumes the right to pursue happiness because if the individual is free, he is free to pursue happiness so long as in doing so he does not trample on others’ freedom.

"The caveat “so long as in doing so he does not trample on others’ freedom,” is vital. It is why so many so-called rights are bogus because, for example, they involve taking from others thereby violating the others’ right to be free."

~ Gary Judd from his post 'Human rights: are they real? Or are they just a gift of the government?'

"This is what Israeli intelligence penetration of Iran actually looks like in practice: millions of Iranians who want this regime gone and are willing to risk everything to make it happen."

"Israel is not just targeting Iranian Revolutionary Guard commanders. They are specifically going after the officers who killed protesters -- the people who ran checkpoints and shot Iranians in the streets during the January uprisings when the regime massacred thousands of its own citizens. 

"And they're calling them first. Victor David Hansen described one exchange [in the video from 10:03]: an Israeli contact reached an IRGC officer and told him he was a dead man. The officer's response: 𝘠𝘦𝘢𝘩, 𝘐'𝘮 𝘢 𝘥𝘦𝘢𝘥 𝘮𝘢𝘯 𝘸𝘢𝘭𝘬𝘪𝘯𝘨. 𝘉𝘶𝘵 𝘐 𝘥𝘪𝘥𝘯'𝘵 𝘥𝘰 𝘢𝘯𝘺𝘵𝘩𝘪𝘯𝘨 𝘸𝘳𝘰𝘯𝘨. He did do something wrong. He killed protesters. And Israel knows exactly who he is, where he is, and what he did -- because Iranians inside the country are feeding them the intelligence. Cell phones. Starlink. A population that hates this regime so deeply that ordinary citizens are calling in GPS coordinates of checkpoints from their apartment windows. 

"This is what Israeli intelligence penetration of Iran actually looks like in practice. It's not just satellites and signals. It's millions of Iranians who want this regime gone and are willing to risk everything to make it happen."

~ Michael Rothman

UPDATE: Is this wishful thinking, below? I hope not. Remember, when collapse happens, as Vaclav Havel used to say, the crack are see first from below:

Super-abundant economic progress

EVER SINCE THE INDUSTRIAL  REVOLUTION in the nineteenth century and ever-increasing global freedom in this one, human progress has been on a roll -- so says author and rational optimist Marian Tupy. He outlined his arguments and data a few nights ago at an enjoyable NZ Initiative presentation.

Tupy is the editor of HumanProgress.org, the world's most comprehensive database tracking improvements in human wellbeing, a senior fellow at the Cato Institute, and co-author of the acclaimed book Superabundance: The Story of Population Growth, Innovation, and Human Flourishing on an Infinitely Bountiful Planet.

He's one of the good guys.

Miserabilist Thomas Malthus famously expressed the idea that while resources would only expand at a linear rate, population will expand exponentially -- a disaster waiting to happen. But Malthus was writing about rabbits, or animals without the brain that humans have; and he was writing before the industrial revolution, when that brain was put to powerful practical use. Malthus was not just wrong, but spectacularly wrong, as Tupy's data abundantly proves.

Take that Malthus!

In just the last four decades alone, commodities across the board have become more abundant thanks to globalisation and increasing freedom. Even in sub-Saharan Africa, long a source of concern, the average calorie intake is now ticking up to 2,500!

Take that Paul Erlich!

THAT FAMOUS PANGLOSSIAN THOMAS BABINGTON Macaulay talked in the nineteenth century about the inevitability of progress: “In every age," said Macaulay, "everybody knows that up to his own time, progressive improvement has been taking place; ... On what principle is it that with nothing but improvement behind us, we are to expect nothing but deterioration before us?” It's still possible to remain optimistic even with the many steps backwards anti-freedom forces insist we take.

I was reminded of Peter Boettke's analogy of the horse race between Smith, Schumpeter, and Stupidity -- the progress of Smith's Division of Labour and Schumpeter's progress in technology (well explained by our presenter) has to continually stay ahead of the various degrees of Stupidity inflicted on us all. It's a tribute to human reason and the power of human freedom to wield it that we have to thank for continuing and ongoing progress.

OUR PRESENTER DID GET A LITTLE  pushback from a questioner who interrogated his concept of abundance. Is abundance always good, asked his questioner? A super-abundance of nuclear weapons, for example, or opioids, is hardly a good thing for human progress, he maintained.

It's a fair point, and it resonates with those who argue that to expect infinite growth on a finite planet you must be either insane or an economist. For both points, I think, economist George Reisman makes a profound point in response: the loss of the concept of economic progress.

Tupy still talks of human progress but of economic growth. Reisman (a student of Von Mises) would suggest he'd be better to combine the two to answer both objections: i.e. to talk of economic progress rather than economic growth.

Growth is a concept that applies to individual living organisms. An organism grows until it reaches maturity. then it declines, and sooner or later dies. The concept of growth is also morally neutral [the point made by our questioner], equally capable of describing a negative as a positive: tumours and cancers can grow. Thus the concept of growth both necessarily implies limits and can easily be applied negatively.

In contrast, the concept of progress applies across succeeding generations of human beings. The individual human beings reach maturity and die. But because they possess the faculty of reason, they can both discover new and additional knowledge and transmit it to the rising generation ... with each succeeding generation receiving a greater inheritance of knowledge than the one before it and making its own fresh contribution to knowledge. This continuously expanding body of knowledge, insofar as it takes the form of continuously increasing scientific and technological knowledge and correspondingly improved capital equipment, is the foundation of continuous economic progress.

Progress is a concept unique to man: it is founded on his possession of reason and thus his ability to accumulate and transmit a growing body of knowledge across the generations. Totally unlike growth, whose essential confines are the limits of a single organism, progress has no practical limit. Only if man could achieve omniscience would progress have to end. But the actual effect of the acquisition of knowledge is always to lay the foundation for the acquisition of still more knowledge. Through applying his reason, man enlarges all of his capacities, and the more he enlarges them, the more he enlarges his capacity to enlarge them.

He notes here that it Ludwig Von Mises who had first alerted him to this vital distinction.

The concept of progress differs radically from the concept of growth in that it also has built into it a positive evaluation: progress is movement in the direction of a higher, better, and more desirable state of affairs. This improving state of affairs is founded on the growing body of knowledge that the possession and application of human reason makes possible. Its foundation is the rising potential for human achievement that is based on growing knowledge.

While it is possible to utter denunciations of too rapid "growth" as being harmful, it would be a contradiction in terms even to utter the thought of too rapid progress, let alone denounce it. The meaning would be that things can get better too quickly -- that things getting better meant they were getting worse. [Capitalism, p.106]

FYI, Professor Reisman has kindly made his book Capitalism: A Treatise on Economics (in which you can read all his arguments) freely available for reading, saving, and printing. Download the link here.

Was there a strategy?

UPDATED 8:53am: We said last week the risk, once started, is Trump chickening out. As of this morning our time, Trump chickened out. Trump always chickens out (TACO). Which, here, long term, is disastrous.

"President Trump has created the conditions for another quagmire in the Middle East, and the question is whether American military excellence can rescue him from his own impulsiveness and incompetence.

"Here is the present situation, in a nutshell: The United States and Israel have established absolute air dominance over the nation of Iran. ... The intention of the air campaign is clear: to destroy the regime’s capacity to harm its neighbours while also creating the conditions for a revolution on the ground. ...

"So why, then, is Trump lashing out at American allies? Why was he 'shocked' that Iran struck Saudi Arabia, Qatar, the United Arab Emirates and Kuwait in response to American attacks?

"Perhaps the answer lies in a Wall Street Journal report from last Friday. According to The Journal, Gen. Dan Caine, the chairman of the Joint Chiefs of Staff, warned Trump that Iran might attempt to close the Strait of Hormuz and Trump shrugged off the threat and launched the attack anyway. ...

"But Iran did not capitulate. ... Instead, it has effectively closed the strait, and it’s reportedly done so without choking off its own oil exports. In other words, while other nations can’t ship oil through the strait, Iran still is.

"Iran ... could well emerge from the conflict with its regime intact (and perhaps even more hard-line) and its power over the world economy undiminished. ...

"Trump launched a major war on his own initiative while announcing competing and potentially contradictory war aims. Is the goal regime change? Unconditional surrender? Or is it much narrower — the destruction of Iran’s missile and drone forces, sinking its navy, stopping its nuclear programme and destroying its ability to wage war through its proxy forces, including Hezbollah, Hamas, the Houthis and the kaleidoscope of allied militias in Syria and Iraq. ...

"Even when wars are carefully planned, with allies brought on board and a majority of the public in support, they are still highly volatile and unpredictable. ...

"My great concern is that Trump has [instead] created the conditions for failure. ... And now, dismayed that the war has not resulted in the regime’s immediate capitulation or destruction, he’s flailing about, once again threatening the viability of NATO if our allies don’t come and bail him out from a war they did not start and did not ask for.

"As an American, I want our forces to succeed, once they are committed. I want to see the military open the Strait of Hormuz as quickly and painlessly as possible. I want to see the Iranian regime collapse and replaced by a democracy. That regime is loathsome. It’s an enemy of the United States. It deserves to fall. If it does, I will cheer its demise.

"At the same time, however, my patriotism can’t blind me to reality. This is not how our democracy should go to war. Trump is not the right man to lead our nation into battle. People I respect applaud Trump for his courage in taking on Iran. But I don’t see courage. I see recklessness. I see thoughtlessness.

"I see a man who plunged a nation into a conflict without fully comprehending the risks. I see a man full of hubris after achieving success in much more limited military engagements. And he’s now counting on two of the world’s most competent militaries to essentially bail him out.

"He’s counting on them accomplishing a mission without clear precedent in military history: destroying a hostile regime and forcing its compliance entirely from the air and sea, and to do so quickly enough that the economic pain doesn’t overshadow the military gains. ...

"Trump has only himself to blame. He led America into an unconstitutional war. And now he’s compounding that sin by proving to be every bit as reckless a commander as he is a president."

~ David French from his column 'Trump Has Only Himself to Blame' 

"Either Donald Trump holds his nerve, crushes the Iranian regime, rides out the oil shock and reopens the Strait of Hormuz, or he and America are finished, exposed as unserious, fickle and incapable of forward planning, a superpower manquée felled by drone-wielding barbarians."

~ Allister Heath from his column 'This is a turning point in history, the moment the West could be lost'

"Morally it was entirely justifiable to attack the Islamic Republic of Iran. ... Whether or not it was tactically correct [or strategically mapped out] ... only history will tell.

"As much as those against the war will be wanting Trump to lose, to embarrass him, this is a very narrow and suicidal position. ...

"Overthrowing the regime would be a success; weakening it so it falls due to domestic pressure (including from the Kurdish north) would be a partial success --- but emboldening it even if its ability to project abroad is significantly weakened, would be ... a victory for the regime, and a victory for its proxies.

"For it would embolden Iran and its proxies to attack not just in the Middle East, but beyond ... This would make us all less safe, it would embolden Islamists across the world to promote their ideology, and for a few to be willing to use force to terrify us all. ...

"At this stage the biggest risk is that Trump chickens out, and wants a 'deal.' There is no 'deal' with those who want you dead, who want your country dead and another dead. As much as the international law purists want pontification from the Western world about the legality of the war on Iran ..., that horse has bolted."

~ Liberty Scott from his post 'Whether your agree with it or not, the US has to win in Iran'

"But as with Bush II's Iraq War, the question to come is: do they know what the hell they're going to do next. With this administration, that's unlikely .... So it will need every circumstance to go the way of those Iranians celebrating [in these photos]. As Eliot Cohen says, 'Something of an exercise in ambivalence here. I would like to see the Iranian regime go down hard -- and am not confident Trump knows what he is doing.'

"Let's [still] hope with crossed fingers for a lion of freedom to arise from the attacks."

~ PC from the 2 March post Iranians: Yearning to breathe free!

UPDATE: Posted last night from the White House press corps, and now going viral on Twitter:

 

Treasury's Chief Strategist doesn't understand inflation

Sadly, it seems the NZ Treasury's Chief Strategist Struan Little doesn't understand inflation.

Speaking to the NZ Capital Markets Forum, he gave the audience a helpful rule of thumb for fuel price rises here: 

[E]very US$10 increase per barrel of oil roughly translates to 10 cents a litre extra for New Zealanders at the petrol pump. Therefore, prices at around US$100 a barrel mean a 40 cents a litre increase in New Zealand.

That's helpful. The conclusion he drew from that however is not:

In that scenario [he said] ... the impact on CPI [i.e., of the official inflation figure] would be around 0.5 percentage points – that is around 3.1 – 3.2% instead of 2.7% in the baseline in the year to June 2026.

This is nonsense.

Yes, there will be a rise in the specific price level of oil. But unless there is a concomitant rise in the local money supply, there is no way that can cause a rise in the general price level, which is what the CPI is supposed to measure.

In fact, in the absence of a concomitant rise in money supply, the impact on the general price level will be precisely zero because to spend more on fuel means having to spend less on other things. 

Yes, the price rise for oil does affect almost every thing in the economic system. Which makes a problem for all of us. But the only way for all those other things to rise in price as well is for there to be an across-the-board increase in monetary demand. And the only way that can be possible is for there to be an increase in the supply of money available -- the most likely cause of that in the present environment being governments continuing to borrow too heavily.

Little's error is an example of what economist George Reisman calls the myth of Crisis-Push Inflation -- a subset of the myth of so-called Cost-Push Inflation. It's usually a way for politicians to deflect attention for  their profligacy in borrowing.

At least Little does call that out, even if he falls prey to that other error. 

Freedom is a nation's greatest resource

 "Countries are well cultivated, not as they are fertile, but as they are free."

~ Montesquieu from his 1748 book The Spirit of Law [hat tip FEE]

'Nature-al’ Entrepreneurship: Being Green Without the State | Timothy Terrell

If you want to go green, you should do so without the state’s coercion, says Timothy Terrell at the Mises Institute conference in Oklahoma just last week. In this guest post, based in a lightly edited transcript of the talk, he explains how entrepreneurs and property rights can protect forests, wildlife, and open spaces better than bureaucracies, using real-world examples of “enviropreneurs”....

'Nature-al’ Entrepreneurship: Being Green Without the State

by Timothy Terrell

I subtitled my talk being green without the state, but I'm not trying to put some sort of free-market twist on a lecture about how you need to use an electric lawn mower or recycle or something like that. I'm in fact going to try to avoid pushing my preferences about uses of the environment altogether. That's not really my point here. 

People have different ideas about what is good and about what is useful. And I like the many useful things that we can make with the resources we extract from the environment. 

Many people like me also enjoy wilderness land and views of wildlife. I like forests and rivers. I like knowing that some species of antalope or rhinoceros are still with us, even if I'm not actually going out and looking at it myself. 

What I want to do is show that entrepreneurship is compatible with those goals. 

Entrepreneurship and the environment

An entrepreneur is a person who anticipates a future consumer demand and tries to adjust the factors of production to accomplish that, for the consumer, in search of a profit. For many people, this seems just diametrically opposed to the idea of solving problems related to the use of the environment. I'm going to suggest it's not only not incompatible, that it's essential that we think of things this way. 

We tend to think of entrepreneurship as being separate from the natural world, or at least just making goods that require extracting some substances from the world and then manipulating them into some product. What I'd like to do here is make the case that entrepreneurs can do this with nature as well, creating goods in a sense that have nature in its natural state, or at least something close to it. 

Environmental resources have value that is determined by the goals of the customers. The entrepreneur must satisfy those customers to earn a profit. So we say that environmental value is imputed -- that is to say that the value of the resource in the environment is derived from the value of the product that's made from that resource. 

An environmentalist of the anti-capitalistic type however, which is a very common type, might protest. Um, wouldn't we say that elements of the environment have some sort of value apart from whether they can be turned into a toaster or turned into a fur coat? And uh, you know, they might say, well, do we have to make everything uh into some kind of raw material for a factory? And I would say, well, certainly not. We have to think more broadly about what customers really want. 

Entrepreneurs respond not only to people who want goods that are manufactured out of the environment. They respond to people who value the natural world as more than just a source of calories, minerals, or fibre. 

Many people want goods and services that are the products of factories. We all do that to some extent, but we also value goods and services that are best provided by an environment in its natural state. So, people want the same kinds of things I want when I head out to the wilderness, as I like to do and don't get to do as much as I'd like. 

Maybe some people just want the knowledge that there is a place where land and wildlife exist without human contact. Even if that means we're not necessarily going to go and visit that place. Many of us just like knowing that there is such a place and providing those things is not outside the realm of entrepreneurship. 

Value? Whose value?

But I think we need to clear up something first. Some environmentalists want to separate the idea of value from a valuer. And I think that's a that's a serious problem. 

Utilitarianism is bunk

"[Utilitarians], in the fashion of [Jeremy] Bentham, pronounce the greatest happiness of the greatest number to be the social end, although they fail to make it intelligible why the happiness of the greater number should be cogent as an end upon those who happen to belong to the lesser number."

~ Felix Adler from his essay “The Relation of Ethics to Social Science,” in H.J. Rogers, ed., Congress of Arts and Science (Boston: Houghton Mifflin, 1906), vol. 7, p. 673 [cited in Murray Rothbard's article 'Utilitarian Free-Market Economics']

"The Maori seats encourage people to ghettoise themselves"

"It has become starkly obvious that the Maori seats are being used by activists to [ghettoise Māori: to isolate them, separate them, cut them off, according to a cultural identity]. ...

"Ghettoisation can be done to a person or group, or people or groups can do it to themselves. ...

"Israr Kasana, a Pakistani Muslim immigrant to the Canadian city of Calgary, explains why he and his family rejected the temptation to adopt the comfortable way of establishing themselves within a Pakistani community. He says 'Ghettoisation or marginalisation of any kind is bad for society. It creates exclusion, imbalance, envy, anger, ignorance and, more importantly, distrust.' ...

"The Maori seats encourage people to ghettoise themselves according to cultural identity, whereas what we must surely want is a society in which people of all races are able to coexist together in peace and cooperation as equal citizens under the law." ...

"[Then National leader Bill] English said [in 2003] the National Party 'stands for one standard of citizenship for all.' ... 'That’s why a National-led Government will abolish the Maori seats.” Of course, it did nothing of the sort when National came back into government in 2008 under John Key. Instead, the Key government abetted the infiltration of all parts of New Zealand society by elements who would substitute authoritarian tribal rule for a free and democratic society, a process which was accelerated by the Ardern/Hipkins governments. ...

"Under pressure from ACT and New Zealand First, the coalition government has walked this back a bit but not to the extent needed to offer meaningful restraint of the authoritarian tendencies which unthinking acquiescence by most of us has unwittingly allowed. ...

"Leadership is needed. We need a Prime Minister who will say loudly and clearly what English said in 2003 ... Today, when NZ First has advanced a Bill for a referendum and ACT says get rid of the Maori seats now, the opportunity is ripe for that sort of leadership.

"Getting rid of the seats, especially by or endorsed by referendum to show it is peoples’ will, would not only remove an anti-democratic excrescence, but also be a signal that enough is enough and that henceforth we shall be a 'multiracial society [where] people of all races are able to coexist together in peace and cooperation as equal citizens under the law.'

"Yet the National Party is silent. ..."

~ Gary Judd, composite quote from his posts 'Ghettoising the mind' and 'National could signal its support for democracy'

SOME HISTORY: 

"[T]he Māori seats were created to bring Māori into the parliamentary system and guarantee representation, rather than exclude them.
 

"By 1867, when the Māori Representation Act 1867(1) passed, Europeans outnumbered Māori roughly four to one. ...

"The Māori seats addressed a real problem: under the New Zealand Constitution Act 1852 [2] voting required individual property or household qualification. Most Māori land was communally held, leaving Māori largely unable to meet the franchise. ...

The Māori electorates solved the voting problem by granting all Māori men over 21 the right to vote, decades before universal male suffrage applied elsewhere in New Zealand [3]. Far from limiting Māori rights, the law expanded them. ...

"The seats also guaranteed meaningful participation. Four electorates—three in the North Island, one for the South—were superimposed over existing electorates. Māori with qualifying property could still vote in European electorates, giving many a dual vote. [4] Officials went to extraordinary lengths to ensure participation: in 1890, a returning officer undertook a six-day trek through dense Urewera bush to establish a polling station at Maungapōhatu. [5] Such efforts are hardly consistent with a strategy to suppress Māori voices. ...

"Seats were originally intended as temporary until Māori qualified under the general property franchise [6] ...

"While Māori were under-represented by modern proportional standards [when the Māori seats were created in 1867, each European electorate represented roughly 3,500 people, while each Māori electorate represented around 12,500 people [7]], the four seats ensured guaranteed parliamentary representation, at a time when European immigration was rapidly outpacing Māori numbers. This was enfranchisement, not suppression.' ...

"However today the original rationale for the Māori electorates has disappeared. In the current Parliament 33 MPs identify as having Māori heritage — about 27% of the House — far exceeding Māori’s roughly 17% share of the population. Even without the seven reserved seats, Māori representation would remain substantial, the historical purpose of the Māori electorates has now been fulfilled and, consistent with the 1986 Royal Commission on the Electoral System and with Article 3 of the Treaty of Waitangi, they should now be abolished in favour of equal representation for all voters."

NOTES

1. New Zealand History, “Setting up the Māori seats,” https://nzhistory.govt.nz/page/setting-maori-seats

2. New Zealand Parliament, “History of the Electoral System,” https://www.parliament.nz/en/visit-and-learn/how-parliament-works/history/history-of-the-electoral-system/

3. New Zealand History, “Setting up the Māori seats,” https://nzhistory.govt.nz/page/setting-maori-seats
4. McRobie, Alan, Electoral Atlas of New Zealand, GP Books, 1989.
5. New Zealand History, “Polling in isolated Māori communities,” https://nzhistory.govt.nz/page/setting-maori-seats
6. Ibid.; New Zealand History, “Setting up the Māori seats,” https://nzhistory.govt.nz/page/setting-maori-seats

7. Te Ara, “Māori representation,” https://teara.govt.nz/en/nga-mangai-maori-representation

It's the mind that creates value

The 'Amazing Physics' account observes:

This is a 1000-gram [steel] bar. 

In its raw form [as a steel billet], it’s worth around $1.

If it’s turned into horseshoes, its value rises to about $100. 

If it’s made into sewing needles, its value jumps to roughly $500. 

If it’s crafted into watch springs and gears, it can be worth around $100,000. 

And if it’s transformed into precision laser components, like those used in lithography, its value can reach $10-50 million.

What gives escalating value to the simple raw material is the mind. It is the mind that transforms the value of a metal bar into the value of those horseshoes, needles, watch springs, and precision labour components. 

Have you ever looked for the root of production? Take a look at an electric generator and dare tell yourself that it was created by the muscular effort of unthinking brutes. Try to grow a seed of wheat without the knowledge left to you by men who had to discover it for the first time. Try to obtain your food by means of nothing but physical motions—and you'll learn that man's mind is the root of all the goods produced and of all the wealth that has ever existed on earth.

That was Ayn Rand, writing in answer to the question: "What is Capitalism?" 

Rand was almost unique in writing about the role of the mind in man's existence; about its role in invention and production and valuing. "It is the mind," her novel Atlas Shrugged illustrates, "that is the root of all human knowledge and values -- and its absence is the root of all evil."

Read more here, in two parts:

• Atlas Shrugged on the Role of the Mind in Man’s Existence, Part 1: The Human Form of Consciousness: - Greg Salmieri, NEW IDEAL
• Atlas Shrugged on the Role of the Mind in Man’s Existence, Part 2: The Valuing Faculty - Greg Salmieri, NEW IDEAL

[Note: I have corrected the values shown in the original post.]

"Too often ‘multiculturalism’ is mistaken for ‘multiracialism'"

"Too often ‘multiculturalism’ is mistaken for ‘multiracialism,’ when the two could not be more different. A multiracial society is one in which people of all races are able to coexist together in peace and cooperation as equal citizens under the law. A multicultural society is one in which people are encouraged to ghettoise themselves according to national or cultural identity."

~ Andrew Doyle from his book The End of Woke: How the Culture War Went Too Far and What to Expect from the Counter-Revolution [hat tip Gary Judd]

Paul Erlich is Dead, his Environmentalism is (still) refuted

Environmentalist Paul Erlich alarmed the world back in 1968 predicting a "population explosion" which forecast “the greatest cataclysm in the history of man” -- food shortages escalating hunger and starvation “into famines of unbelievable proportions.”

In the obituary for the 93-year-old doom-monger, who died this week, the New York Times called his predictions "premature." But they weren't even wrong. They didn't happen, and they never will. (See above for how cataclysmically wrong the catastrophiser really was.)

Some of his other failed and frankly nasty predictions:

• "In the 1970s hundreds of millions of people will starve to death in spite of any crash programs embarked upon now. At this late date nothing can prevent a substantial increase in the world death rate."
• "In ten years [this was 1970] all important animal life in the sea will be extinct. Large areas of coastline will have to be evacuated because of the stench of dead fish."
• "By the year 2000 the United Kingdom will be simply a small group of impoverished islands, inhabited by some 70 million hungry people.If I were a gambler, I would take even money that England will not exist in the year 2000."
• “Sometime in the next 15 years the end will come, and by ‘the end’ I mean an utter breakdown of the capacity of the planet to support humanity.”
• “Giving society cheap, abundant energy at this point would be the moral equivalent of giving an idiot child a machine gun."
• “By 1985 enough millions will have died to reduce the earth’s population to some acceptable level, like 1.5 billion people.”
• "We must have population control at home, hopefully through a system of incentives and penalties, but by compulsion if voluntary methods fail."

Yet despite being wrong about everything, the failed forecaster made a million and was showered with awards.

He never recanted.

Doom sells. Sadly. Still.

He was a gambler. A few years back, I wrote about a famous bet, for which this is the winning cheque:

Several decades ago, gloom-monger Paul Erlich and techno-optimist Julian Simon had a bet.

Erlich was certain resources were running out and humanity was doomed. Simon asserted they weren't and wouldn't be. The bet was that, by the end of that decade, a basket of resources chosen by Erlich would cost more to buy — more, said Erlich, because by then those resources would be running out. Less, said Simon in reponse. (Simon, you see, was confident that the ultimate resource, from which all others derive, is the human mind — a machine for turning shit into useful stuff.) 

Simon won. 

Resources weren't running out. 

They still aren't.

The "Simon Abundance Index" (SAI, below),which measures the relative abundance of resources since that bet, now stands at 609.4. Meaning that in 2023, the Earth was 509.4 percent more abundant in 2023 than it was in 1980!

How astonishing is that! World population since 1980 has almost doubled; while resources produced by human beings have multiplied by more than five times!! 

Turns out that as global population increases, that "virtually all resources became more abundant. How on earth (literally) is that possible?"

Unlike Erlich and the sundry other doom-sayers who litter the planet today, Simon recognised that without the knowledge of how to use them, raw materials have no economic value whatsoever. They are just so much stuff. What transforms a raw material into a resource is knowledge — knowledge of how that stuff might satisfy a human need, and how to place it in a causal connection to satisfy that need. (The great Carl Menger explained this process way back in 1870!) And since new knowledge is potentially limitless, so too are resources.

 Infinite, because the ultimate resource is the human mind.

In this sense, as George Reisman puts it, environmentalism is refuted.

The Simon Abundance Index: 1980-2023 (1980=100)

Marian Tupy points out some interesting parallels with other catastrophisers:

1. Malthus published his book on English overpopulation and overconsumption in 1798. Thereafter, the population of England rose, and the prices of wheat fell relative to wages.
2. Marx published 'Das Kapital' in 1867, arguing that workers' wages would be squeezed to zero by capitalist competition (based on a much-debated and probably incorrect "Engels' Pause"). Thereafter, English wages skyrocketed.
3. Ehrlich published his book about coming global famines in 1968. Thereafter, global famines collapsed, and standards of living across much of the world rose.

Forget these failed forecasters. Sign up to Tupy's Human Progress agenda instead.

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