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Posts from the ‘The Economy’ Category

2016 – A Review

Somewhere or other (you don’t get proper footnotes at this time of year) Karl Popper urged anyone masochistic enough to be reading his stuff to guard against the fashionable disease of our time, viz.- the assumption that things can not be taken at their face value, that an apparent syllogism must be the rationale of an irrational motive, that our choices necessarily conceal some self-seeking ghastliness. It’s a reasonable guess that this warning was part of his well-known criticism of Freudian psychology as bad pseudo-science, and in the year of Brexit and Trump it assumes a particular relevance, as the usual carnival of commentators, analysts, pundits, think-tankers and other ‘experts’ queue up to add their own fluid ounce of pseudo-science to the already deep and sulphurous ocean of jejune rationalisations which, we suppose, keeps them and their kind in lucrative employment.

The British voters wanted to leave the European Union, and their American cousins wanted Donald Trump to be president. Just that. They were not expressing a complicated series of half-understood emotional responses to globalisation or economic change or multiculturalism or anything else – emotions which, lest they fall easy prey to something called ‘populism’, call for urgent analysis by credentialed social psychiatrists who have brought themselves to believe that observing and analysing their fellow citizens like specimens in a vivarium is somehow a legitimate form of intellectual inquiry, as opposed to (a) a bloody impertinence and (b) a manifestation of precisely the kind of social order which is being emphatically rejected. Read more

The Croaking of a Boiled Frog

The European Union, an enormous and dysfunctional agglomeration of squabbling nations with less in common than the average cast of I’m a Celebrity: Get Me Out of Here, has a north-westerly sort of province called the United Kingdom. About this place the other provinces know little and care less, but they have a nebulous idea that it is inhabited by an uncooperative, usually inebriated and almost completely irrational collection of hideous-looking savages who apparently gave up on evolution after the invention of the deep fat fryer. Mysteriously, however, not only have these people somehow managed to be a bastion of freedom, pluralism and liberal democracy for centuries, but have even been responsible for either restoring or introducing those things to the rest of Europe, frequently after emerging victorious from yet another horrific war started by the other provinces themselves. Naturally, those other provinces chafe at any sense of obligation and relative failure vis-à-vis a people whom so many of them despise, but what appears to make some of them angriest of all is that many Brits seem to find the idea of living in a political union with other Europeans to be about as alluring as sharing a toilet cubicle with a rabid dog.

In fact, they are about to have a vote on whether or not to leave the Union! Just think of it, one imagines Guy Verhofstadt muttering to himself as he fiddles with the nightly dental floss: these greedy vulgarians are actually spurning us! Can you even conceive of the sauciness of a people like that deciding that they would be better off without being joined at the hip to Luxembourg and Bulgaria? In the interests of the eternal rightness of things, and also for their own good, they must be brought to see that they need to share a polity with the rest of the continent, through whatever trickery, bullying and bare-faced lies may be necessary. But fear not, Euro friends, for you have forgotten one important thing: these people are as insane as they are repulsive, and therefore will vote to remain in the EU even though they know perfectly well that it is a corrupt, undemocratic and remorselessly anti-British racket run by bungling nobodies whose institutional framework appears to have been designed by Coco the Clown. The JWC is here to reassure you about just how insane they really are. Read more

General Election 2015 Special

“I doubt if history can show, in any country, at any time, a more greedy form of government than democracy as practised in Great Britain in the last fifty years… The common man has held the voting power, and the common man has voted consistently to increase his own standard of living, regardless of the wider interests of his children, regardless of the wider interests of his country… No despot, no autocratic monarch in his pride and greed has injured England so much as the common man. Every penny that could be wrung out of the nation has been devoted to raising the standard of living of the least competent elements in the country, who have held the voting power. No money has been left for generous actions by Great Britain, or for overseas investment, or for the re-equipment of our industry at home, and the politicians who have come to power through this system of voting have been irresponsible and ill-informed, on both sides of the House.”

So wrote Nevil Shute in 1953, having shrewdly legged it to Australia three years before. This passage appears in a novel set in the 1980s – then a generation in the future – in which he imagined Britain as a doomed socialist craphole being sneered at by its more prosperous sister nations, Canada and Australia, who were encouraging the Queen with word and gesture to do a Nevil Shute and sneak off to the Dominions, implying that she might leave a note pinned to the throne saying, “Call me when you’re fit for human consumption.” Read more

Patent Nonsense

Since the first unlettered hominid used a twig to extract termites from a dry log, nervously yet inquisitively watched by another hominid who shrewdly discerned that using the same method would allow him to increase his own termite intake to a more satisfactory level, human innovation began to spread from individual to individual until we reached such a plane that even undergraduates can open tins of spaghetti hoops. Innovation without imitation is a fine motto for any intelligent species out there in the cosmos which is content to progress no further than nudity and raw termites.

Many people, however, now unquestioningly accept the relatively recent notion that an innovation is the intellectual property of the person who first devised it – or, rather, who first registered it with some bureaucrats and paid the government a fee, in exchange for which the state enforces a monopoly of the idea. Nevertheless, it remains controversial: after all, anything capable of inspiring the fanatical support of both Ayn Rand and the kind of corporatist rent-seekers whom she tore to pieces in Atlas Shrugged must logically be subject to some muddled thinking somewhere. We are grateful, therefore, to Elon Musk, whose announcement that he will not sue anyone who uses his electric automotive technology gives us this opportunity to consider the principles behind copyright and patent law. Read more

Robin Hood is back, and this time he has stochastic modelling

So the Financial Transaction Tax is back in the headlines, with the European Court of Justice dismissing the British government’s legal challenge on the frankly not unreasonable grounds that the FTT does not exist yet and therefore that there is nothing for the UK to be challenging at the moment. No doubt the lawyers still got paid. All we have to go on is the European Commission’s October 2011 draft directive, titled in fluent Eurospeak ‘Proposal for a Council Directive on a common system of financial transaction tax and amending Directive 2008/7/EC’ (COM/2011/594), which would apply to securities trades where at least one of the contracting parties is in the EU.

The so-called ‘Robin Hood Tax’ is advertised as a revenue measure, which is hardly surprising given that it was put forward in the midst of the Eurozone crisis brought about by unfunded government spending commitments. Indeed, the very first paragraph of the proposal states that, “There is a strong consensus within Europe and internationally that the financial sector should contribute more fairly given the costs of dealing with the crisis and the current under-taxation of the sector.” As usual with EU proposals, then, the problems start to appear from the first sentences and pile up from there. Read more

The Death of Money by James Rickards – a Review

In his 1976 essay Criticism, the musician and broadcaster Hans Keller wrote that, “in order to prove its phoniness beyond reasonable doubt, a profession has to create grave problems which it then fails to solve.” Since he had been active in most of the professions which he then proceeded to demolish by setting out the false and often self-serving assumptions on which they are based, we found ourselves thinking of Keller when we read James Rickards’ excellent new book The Death of Money, for this is a financier’s deconstruction of much of the general thinking about finance, much of it mistaken and sometimes wilfully so.

Could there be a more phoney profession than monetary policymaking – that High Priesthood of the Age of Finance Socialism? Perhaps only its devoted acolytes, the private-sector investment advisers and financial pundits who profess the ability to read between the lines of the policymakers’ public statements and thereby predict their next move. Or worst of all, those academic economists who so perfectly fit the second part of Keller’s definition: “[a]ll phoney professions…stand or fall with their capacity to criticise somebody or something or both – to criticise both negatively and self-righteously, with moralising aplomb.” Fortunately, we have The Death of Money: an essential manual for understanding the dangerous undercurrents of the monetary system and the world economy by a real as opposed to a phoney professional. Read more