Tuesday, 27 September 2011

Portrait of Mother and Child, by Gustav Klimt

Gustav Klimt (1862-1918).  Mother and Child (2)

Wondering about that European bailout?

Then here's a graphical summary by the boys at Macrobusiness:


Don’t like drugs? Then legalise cannabis.

Cannabis is supposed to be a “gateway” drug? The drug that leads people on to harder drugs?


What makes harder drugs so prevalent is Prohibition. If you don’t believe me, then just ask  thousands of current and former members of law enforcement who support drug regulation rather than prohibition—including Scotland Yard’s former head of drug policing.

  • Prohibition doesn't get drugs off the street. The government can't even get rid of drugs in the controlled environment of a prison, so they certainly can't get rid of them from the relative freedom of our streets. Which means….
  • Outlawing drugs doesn't make them go away; it simply puts them in the hands of outlaws, and in the hands of the soft targets on whom the outlaws focus. Which means…
  • Prohibition limits demand a little, but it limits supply a lot -- as every economics student knows, this pushes up prices a lot, and gives remaining dealers a profit on a plate.
  • Prohibition means people don't stop consuming drugs they just change the drugs they're consuming.

Which means there is what Milton Friedman called an “Iron Law of Prohibition” (yes, ACT members, that Milton Friedman) which says that the more you actively prohibit drugs, then it is the more virulent drugs you actively encourage.  Which means instead of the relatively benign drugs like cannabis, alcohol and tobacco being easily available and sold by friendly pharmacists, it’s the nasty stuff instead—and peddled by fearless gang members.   Johann Hari summarises:

_Quote_thumb[2][5]‘You are not mistaken in believing that drugs are a scourge that is devastating our society [said Friedman]. Your mistake is failing to recognize that the very measures you favour are a major source of the evils you deplore.’
    Friedman proved, for example, that prohibition changes the way people use drugs, making many people use stronger, more dangerous variants than they would in a legal market. 
    During alcohol prohibition, moonshine eclipsed beer; during drug prohibition, crack is eclipsing coke. He called his rule explaining this curious historical fact “the Iron Law of Prohibition”: the harder the police crack down on a substance, the more concentrated the substance will become.
    Why? If you run a bootleg bar in Prohibition-era Chicago and you are going to make a gallon of alcoholic drink, you could make a gallon of beer, which one person can drink and constitutes one sale – or you can make a gallon of pucheen, which is so strong it takes thirty people to drink it and constitutes thirty sales. Prohibition encourages you produce and provide the stronger, more harmful drink.
    If you are a drug dealer in Hackney, you can use the kilo of cocaine you own to sell to casual coke users who will snort it and come back a month later – or you can microwave it into crack, which is far more addictive, and you will have your customer coming back for more in a few hours. Prohibition encourages you to produce and provide the more harmful drug.
    For Friedman, the solution was stark: take drugs back from criminals and hand them to doctors, pharmacists, and off-licenses. Legalize. Chronic drug use will be a problem whatever we do, but adding a vast layer of criminality, making the drugs more toxic, and squandering £20bn on enforcing prohibition that could be spent on prescription and rehab, only exacerbates the problem. ‘Drugs are a tragedy for addicts,’ he said. “But criminalizing their use converts that tragedy into a disaster for society, for users and non-users alike.’

It’s not complicated.  If you don’t want gangs deciding what drugs your children are going to dabble with, because they will, then end the War on Drugs now.

If you do want a legal, transparent, accountable market for drugs, rather than an illegal, secretive, unaccountable one, then end the War on Drugs now.

If you want police cracking down on real criminals instead of spending time frisking people harming only themselves, then end the War on Drugs now.

Because if you can’t even keep drugs out of prisons, then you sure as hell can’t keep them off the streets.

How could you end Prohibition easily? Well, here’s a simple proposal: just start by unbanning all the drugs less harmful than alcohol. (According to Britain’s widely respected Lancet journal of medicine, that means we could immediately legalise for recreational use (in decreasing order of harm): Buprenoprhine, Cannabis, Solvents, LSD, Methylphenidate, Anabolic steroids, GHB, Ecstacy, Alkyl Nitrites, Khat, and di-hydrogen monoxide.) On what rational basis could anybody object? Especially if they’re an alcohol “user” themselves?


NB, for those not familiar with Uncle Milt’s Iron Law of Prohibition, here’s a handy summary:


ECONOMICS FOR REAL PEOPLE: What is Money? [updated]


Here’s this week’s update from our friends at the UoA Economics Group:

Hi all,

What is money? What are these bits of paper we carry in our pockets, or these days is reflected digitally in our bank accounts? To understand this we need to look first at its historical context and how it has evolved over the centuries.
An understanding of the nature of money is important for any serious student of economics since money forms one half of every transaction. If the quality of an economy's money is undermined then that economy will experience difficulties.
This week we shall discuss some historical cases when the quality of money was undermined or even destroyed. What can we learn from these episodes, when today we see monetary inflation rising to levels not seen for many years?

    Time: 6:00pm
    Date: Tuesday 27 September
    Location: Case Room 1, Level 0, University of Auckland Business School

Look forward to seeing you tonight.

UPDATE:  So you think that money is the root of all evil … ?


_richardmcgrathYour weekly prescription of headline dissection from Libertarianz leader Dr Richard McGrath.
This week, The FrACTured Party.

THE DOCTOR SAYS: Oh dear. The ACT Party have discovered renewed energy in their frantic attempt to self-destruct.
    Don Brash dips his toe into the water with a suggestion that cannabis be decriminalised (for which I give him enormous credit, even though it is only an incremental move in the direction of freedom and full recognition of the right to self-medicate). But before you know it, toys are being ejected from cots by the president of ACT and the two Johnny Bs.
    Boscawen simply packs up his things and walks into the sunset, while Banks bares his authoritarian fangs. Meanwhile, Party president and gutless wonder Chris Simmons undermines Don Brash by saying even this first baby-step away from prohibition is "a step too far." Gee, Chris, if you don't like frightening the horses, why didn't you join the National Party? 
    Is there anyone in the allegedly "Liberal" Party that supports Don Brash on this one? Anyone at all? Anyone else in ACT anywhere in the world who believes in the concept of individual sovereignty?  Speak up, because both John Campbell and Don Brash want to hear from you!

What the hell is happening to ACT? 
    As of right now, ACT's website still has John Boscawen as number 2 on the party list (who does Number 2 work for now, I wonder?). So the photos next to numbers 2 and 3 on the ACT Party list will shortly both be blank silhouettes—which probably reflects what’s inside their heads. (For God's sake, Don, if Catherine Isaac doesn't want to stand for ACT, stop pissing around and just move everyone else two up the list.)
    The website also contained a link to something called "Principles." You know, the common link which is supposed to determine ACT policy on each issue. The sort of thing you might think its MPs and candidates might read from time to time. Shared values, that sort of thing. And what are the very first two principles that ACT is supposed to uphold? Why, this:

  • that individuals are the rightful owners of their own lives and therefore have inherent rights and responsibilities; and
  • that the proper purpose of government is to protect such rights and not to assume such responsibilities.

So if John Banks doesn't believe in the concept of individual rights, then what the hell is he doing in ACT?

And what of Sir Roger Douglas, Heather Roy, or for that matter Rodney Hide? Why aren't the other ACT MPs falling in behind Don Brash and taking a principled stand on this?  Anyone? Anyone at all? Why, where there should be a loud and principled “Huzzah!” behind their leader is there the sound only of Banks blowing hard and tumbleweed being blown around.
    Any chances ACT may have had of winning a seat at the coming election are now finished. They stand about as much chance of fielding an MP in the next parliament as the Libertarianz Party does. (And I do say that with great sadness.)
    However, long ago Libertarianz pulled this debate in the direction of personal liberty  by making drug legalisation something that could be discussed and argued about. Libertarianz activists, once again, have been Radicals For Freedom. What have ACT been? Nothing but a huge disappointment. Compulsion-touters, as one of their speech-writers once used to call them. Simmonds, the president of this so-called “liberal party”, even went as far to say that decriminalisation of cannabis, a class C drug, wouldn't be ACT policy for at least six years. How then, Chris, if one acts according to principle, should lawmakers deal with alcohol, which has been estimated in terms of harm to be a class B drug, more harmful than cannabis? 
    Simmonds should probably stop wearing his suit to bed and re-read that page of his party’s principles.

Incidentally, in the same news item reporting Brash’s “musings,” you will also read that Phil Goff is a wowser unequivocally opposed to decriminalising cannabis possession. All you members of NORML out there who vote Labour, your party leader has just come out against even decriminalising dope, let alone legalising it. How could you possibly vote Labour again?
    And you can’t vote Green, because they’ve given up altogether on the issue that they once tried to make their own.

There is only one political party in this country that can see the forest through the weed plants - that sees free choice and personal responsibility as two sides of the same coin. That party will shortly be announcing its list for this election, and will be fielding at least six electorate candidates. That party believes in maximal individual freedom and minimal government interference in the lives of New Zealanders. That party - Libertarianz - believes the state should respect the choices of adults. Including the choice to possess and use cannabis in one's home and elsewhere as permitted by private consent, and to sell industrial quantities of it on TradeMe.
    Something for which John Banks would have you lined up against a wall and shot. Especially if you were gay. 

See you next week!
Doc McGrath

Monday, 26 September 2011

Three logicians walk into a bar … [updated]


Think about it.

Hat tip Gene Callahan.

And to Julie Sedivy, who can put you out of your misery if your thinking machine is causing you trouble.

Debt Crisis? Presidential candidates? WWARD?

Everyone worldwide with more than $100 in their bank is talking about the  multi-trillion Euro plan to bail out debt-ridden European banks and governments; a plan that has already failed before it has begun – a plan that asks taxpayers to take the hit for stupid loans made by stupid banks.

And everyone with any interest at all in what goes on in the world wants to know are there any US presidential candidates worth a damn?

Since every candidate for the coming presidential election so far is so poor, and since every answer the mainstream alleged experts come up with to solve the debt crisis is always reliably worse than the last, some on The Street are asking What Would Ayn Rand Do?  How would Ayn Rand would approach deficits, the debt crisis, selecting presidential candidates?  Here to answer the question on  The Street is Yaron Brook, head of the Ayn Rand Institute:

Don, John and the right to take a toke [update 2]

Good news from yesterday’s speech by Don Brash, with two announcements from an ACT leader that are long overdue: that he thinks folk have the right to defend themselves and their loved ones, and the right to ingest cannabis if they so desire. [Full speech here.]

That it has taken this long for an ACT leader to state the bleeding obvious is tragic, especially since there’s little chance of any ACT MPs being returned next election—and if there are, then little chance of any ACT MPs or board members voting to make either policy their party’s policy.

Can you see John Banks (potentially their only MP) promoting your freedom to put into your body what (and whom) you see fit? Not a chance. [UPDATE: See.]

Can you see him attacking the police for victimising crime’s victims instead of the perpetrators of said crimes? Not a hope. No more than he can credibly promote the party’s position on fiscal responsibility after leaving his Auckland City Council over $800 million in debt under his stewardship.

So this is what it appears to be then; a trial balloon released just to attract attention, without any  commitment as to policy. What’s surprising about this tepid non-announcement however is how surprised the commentariat is that an ACT Party leader would (gasp) muse aloud about policy positions like this, because policies like this always should have been firmly in ACT’s territory.

Even if the country’s clueless, calcified commentariat is unable to see the connection between the right to pursue your own happiness and the right to defend your own life—two rights which are linked as one in freedom—if ACT ever had a reason to exist then it was to promote the policies of freedom and individual rights, i.e., policies like this, while all around them parties were peddling the opposite. That they’ve rarely if ever done so has led them to the place they are now: which is to have made themselves completely and deservedly unelectable, and incapable of promoting the very policies their party’s leader (and many of their members) would like them to promote.

Mind you, at least the party’s other John is leaving. That can only be good news for ACT’s few remaining freedom-lovers who do want to promote the right thing in a party committed to principles, not just politics. I do genuinely wish them good luck.  (One John down, one more to go?)

UPDATE 1: And here’s another John, and this one’s talking gibberish.

UPDATE 2: Eric Crampton makes some excellent points:

… ACT would do best to return to its classical liberal roots - that there's an unserviced space that's relatively liberal on economic and on social issues. As a right-wing rump to National, more liberal on economics but conservative on social issues, they'd be bound in the spot occupied by the Greens on the left - forever taken for granted by the dominant coalition partner because they couldn't plausibly bring down the government in favour of a coalition led by the main party on the other side. And, I've also thought that staking out a position on marijuana legalization could be a good way of signalling a move to that space. It would confound the usual narrative dominated by right-left thinking and, in so doing, bring a lot of positive press for ACT as it moves into a different space.
    So I was really pleased to hear Don Brash musing about marijuana decriminalization over the weekend. Sure, decriminalization hardly goes far enough: if the trade remains illegal but possession legal, production remains split between informal household production among those into gardening, friendly informal supply among friends (albeit with risk that comes with growing more plants than is needed for personal use), and the gangs. Cactus Kate is right: full legalization is better.

…Brash [has] tried to pull the Party to the liberal side - a move that makes sense, but is hard given ACT's starting point. It wasn't made easier by that a bunch of people who claim to support marijuana decriminalization started piling on making fun of Brash's policy move. Yeah, you know who you are. It's all hip to make fun of the 70-year-old who's obviously hardly come within smelling distance of pot and pretend that he's a dope-head for advocating policy change….  
    If the result of pushing for rational policy discussion is to be made a laughingstock even by those who purport to support rational policy, it ain't hard to figure out the likely effect on the supply of rational policy discussion… There's no way that the politicians will lead public opinion on this one, but there's good chance they'd follow. [However] if even the pundits who agree with legalization make fun of the politicians who support it, no chance of any kind of policy move until there's obvious public support…
The issue's now dead. And ACT probably is too.

Government favours, government failure

This is how phony-crony public-private bullshit-business works. The government announces a scheme costing you and I nearly half-a-billion dollars.  Moochers and looters graciously assemble to hoover up riches they couldn’t earn honestly. And when all begins to go pear-shaped, honest businessmen and women are left to pick up the pieces.

Latest example: the Key/Green home insulation subsidy, set up to buy votes by throwing pork at insulation installers. The collapse of Wellington-based Energy Smart shows the sort of vermin schemes like this attract—i.e., people unable to make an honest buck—and the consequences of their foray into the wider business world.

Energy Smart (sic) was set up to suck up taxpayers money by city councillors from Hutt City, Wellington and Greater Wellington, and a former chief executive of the Public Trust. Moochers all of them. But even when taking money straight from the trough, and “having carried out five per cent of the 115,000 retrofits across the country since it began in June 2009,” they couldn’t make their “business” work, leaving suppliers from Auckland to Christchurch out of pocket by a seven-figure sum.

Such is the way these schemes work. Such are the scum they attract. Sure, this is not as bad a result as Australia’s insulation subsidy scheme, that cost several people their houses and four installers their lives. But not having killed anyone is not a good enough standard by which to judge the dispensing of taxpayers’ money and government favours.

Best just to not dole them out at all, eh.

[Hat tip for the story to commenter Tribeless]

A great weekend for the pointy ball

It’s hard to talk about the unsavouriness of politics after such a ripping weekend of glorious finals footie, and some pretty good World Cup Rugger.  If you’re a fan of pointy-ball sports, this was a weekend to savour.

It started for me 9:30 Friday night, watching Hawthorn do their very best to knock of Collingwood’s inbreeds for the right to play my Geelong Cats in next week’s AFL final. It came down to one kick in a terrific Prelim Final to next week’s main event, with Collingwood just coming out ahead in a thrilling finish that could have gone either way—but with enough bruised and battered Pies’ bodies to make a Cats fan optimistic for next weekend. (Especially since the Cats beat these deadbeats by 96 points just a few weeks ago.)

Saturday’s couch-surfing epic started for me mid-afternoon, watching Geelong beat a tired West Coast by 60 points to confirm our own place in next weekend’s AFL final. (Top effort that. It’s looking good for three flags for Geelong in five years.) I left all the other members of the Auckland Geelong Supporters Club to party on his own, then motored over to watch the All Blacks thump France with a knowledgeable rugby crowd. And wasn’t it great to see the number one team finally out on the track and playing together for the first time. What a coaching master stroke. And how emotional seeing such an ill Jock Hobbs presenting Richie McCaw with his hundred-mission cap. A great moment.

Two games down, two resounding wins for my teams.  A great night. To celebrate, I dropped everything to race down the road to watch the second half of the league with a garden-shed-ful of Warriors fans. Who would have thought they could play finals footie with that intensity?  Or a garden shed could contain all that excitement when the final whistle went and the Warriors went through to the final!

(And how strange to see champion Collingwood coach Mick Malthouse taking the night off by watching this game over the road from the MCG, where the night before he had cried in the coaching box at his team’s narrow escape—and how strange to see former All Blacks coach John Hart in the Warrior’s coaching box at the same stadium, at the same time as the ABs were redeeming themselves against the team who once made Hart’s ABs, and the entire country, cry.)

Hearing Argentina knock off Scotland yesterday was almost an anti-climax after that. But Scotland have been pathetic at this tournament, and Argentina deserve to go through again. And knocking off a “Home Nations” team has always been good for footy.

So what a great weekend for pointy-ball sports. And for my teams, of course.  Smile

Friday, 23 September 2011

100,000 green jobs from $2.5 billion of green pork? Who are they kidding. [UPDATED]

Russel Norman’s Green party issued a report this week claiming they can add 100,000 “green jobs” to the economynew jobs created by taking $2.5 billion away from an existing group of producers and giving it to a new group who will vote green—“green jobs” created out of renewable energy technologies, i.e., energy that would not be economic without a government subsidy. New green jobs “created,” if they are at all, by taking away existing jobs., somehow, by spending $2.5 billion

Haven’t we heard this before, somewhere?

Yep, in Spain: where each “green job” costs taxpayers around $752,000 to $800,000 each in subsidies, and entails the loss of 2.2 other jobs, resulting in a subtracted of around 110,000 jobs from elsewhere in Spain's economy.

Great result.

And where else have we heard it before? That’s right, in the US: where the White House sank half a billion taxpayer dollars into Solyndra, a company it knew was failing—but whose owner happened to be a large Obama donor famous for saying on Zero’s election “we’re trying to get as much stimulus money as we possibly can.”

What’s the bet Russel has people in the wings thinking along the same lines as George Kaiser.

Now don’t get me wrong. There’s clearly scope for alternative technologies—it’s unlikely we’ll be using the same energy sources one-hundred years from now as we do today. But the chances of a government selecting today which out of the many thousands of alternatives might be successful tomorrow, and then shovelling our money at them in the expectation of, in Russel Norman’s words, “capitalising on the growing international market for clean energy technology”? About zero too, I’d say.  (If you must have a political party picking winners, then at least have the sense to simply give your champions tax cuts instead of just throwing pork at them.)

Mind you, Russel’s report really is a great looking piece of work. Great report. Great cover. Serious typeface. Important-sounding numbers. It weighs about the right amount. It just doesn’t even begin to hold water. It looks like it was put together not by a team of employment and energy specialists, but by a public relations expert only in weighing words by the dollar. In fact, I reckon this (from Aussie TV show Hollowmen) is how they put it together:


[Hat tip Offsetting Behaviour]

UPDATE: Watch the story of the US’s poster child for “green stimulus”—“demonstrating,” said Zero, when announcing the pork, “that the province of green energy is not just an article of faith.” Yeah right.

[Hat tip Daniel B.]

GUEST POST: The Naked Central Banker

Guest post by Murray Dawes from Money Morning Australia

Well it looks like Bernanke has finally given up.

Operation ‘Twist in the Wind’ couldn’t jump-start a Honda Civic.

Delivering lower long-term interest rates won’t inspire crippled banks to lend or indebted consumers to borrow. The unintended consequences of this new plan are the Fed will increase its risk at the long end of the yield curve while bond prices are at the highest in a generation.

So who’s going to bail out the Fed if bond prices crash?

Oh that’s right, they’ll just print their way out of trouble.

What will printing do? Ultimately it will feed into higher inflation which should make long-term interest rates go up, not down.

But it’s not just what the Fed has said it will do. You can read a huge amount into what the Fed didn’t do.

There are internal splits within the Fed on the issue of money printing.

The market was hoping for some more candy from the Fed but got none. That is big news. The Fed is basically saying it won’t bail out the market right here. That’s bad news for the share market.

The only reason shares have been holding up lately is because of the fear or hope that the Fed might print more money to keep markets afloat.

Without that crutch, the market is faced with an economy that has stalled and a European Union that is cracking wide open. Based on that, why would you buy the stock market?

For all of the talk about how cheap the market is, you have to remember that the cheapness is derived from bottom-up forecasts [Ed note: analysts who look at individual stocks are called bottom-up analysts, analysts who look at the broader economy and then select stocks are called top-down analysts]. And they are looking decidedly optimistic based on where most economic indicators are currently pointing.

And as those forecasts ratchet down the market won’t look so cheap.

On a technical note, we have rarely seen so many charts resting on the precipice as they are now.

There is very little support beneath current levels. And Bernanke revealing himself as the king with no clothes should be enough of a catalyst to cause a stampede out of stocks.

In the latest YouTube free market update we said Bernanke needed to surprise the market to engineer a rally. He didn’t. He moved the deckchairs on the Titanic and shrugged his shoulders!

Look at this chart of the ASX 200:

ASX 200 daily chart

ASX 200 daily chart[Click here to enlarge]

You can see that over two years’ worth of buying is now out of the money.

I assure you most of these buyers have not hit the sell button yet. If we get another bad night tonight in the US then you could feel very confident that the S&P/ASX 200 will revisit the August low of 3765… and perhaps fall lower. [Update: there was a bad night. And the ASX went as low as 3880 and is now at 3906.]

The key level to watch in the US is 1155 on the S+P 500. This is the ‘Point of Control’ of the most recent distribution (we explain this in the latest free market update, click here to watch now).

If the market busts under there, then it’s odds on the S+P 500 will move down to 1100 points [Update: as of writing it is at 1129 and falling] . And if the market falls below that level, what then?

Below there it gets really scary.

Murray Dawes
Slipstream Trader

Related Articles at Money Morning Australia:

Thursday, 22 September 2011

Expanding ‘Explaining Postmodernism’


Here’s a new re-issue of a recent book, an important bo0k, an essential book—this expanded second edition of which offers even more philosophical self-defence than the first. Allow me to just quote what I said about the first edition, which itself went through ten printings in the seven years since its release, and all of which I would only say again (but in much pithier fashion) about this new Expanded Edition:

This [small] book should be in every student's backpack. In the post-modern intellectual battleground in which each student find himself submerged - and sometimes drowning - this book offers essential intellectual self-defence for every student who still cares to think. No matter if you already know every answer to all the sundry irrationalities you face every day - herewith is a comprehensive summary of your intellectual enemy that for the first time clearly and comprehensively puts each of the post-modern heroes in their place.
    Why is that so important? Well, what do you feel when you watch a butterfly emerge from its chrysalis? You watch it greet the sun, spread its wings and almost give thanks to existence for its rebirth. Imagine then another human being gleefully stamping their boot on that reborn butterfly, smilingly stamping the life out of it. Such is the situation in many places of academe. This book gives a defence to the fragile butterfly of the intellect.
    One of the worst periods of my own life was spent at Auckland's Architecture School where I found myself being taught by intelligent human beings, many of whom seemed somehow intent on using that intelligence to snuff out young students' sense of certainty and their joy in learning about ideas and creating great art. I watched as many students became either irrational automatons emulating the noises made by these lecturers, or gave up in disgust - often questioning themselves and their own ability. They were crushed. That situation was not unique to my own alma mater - it pertains to nearly every grove of academia in the Western world. This book explains the mentality of scum who earn a pay-cheque by gleefully crushing impressionable young minds, and the strategies they employ to do it.
    The book is a "great but very scary read." Written like an adventure story, it guides the reader confidently and clearly through the intellectual history of the last three-hundred years in order to explain why the `new intellectual age' we find ourselves in is in most respects a toxic Age of Crap.
    My only gripe is that the adventure story does not end with a happy ending - although Ayn Rand and the Objectivist antidote to this intellectual poison are implicitly present on every page, where I expected their explicit appearance at the conclusion Stephen delivers only the truism that "what is still needed is a refutation of these [post-modern] historical premises, and an identification and defense of the alternatives to them."   
    Here would have been an obvious opportunity to send the reader to cleaner Objectivist pastures elsewhere in which this work is being done. A recommended reading list would have been a welcome addition - perhaps he intends to set up such a thing online? *
    In any case, as with the recommendations given by others, this is "not a book review but a flat-out endorsement." In many respects Stephen's book is a much-needed update of Rand's essay "For the New Intellectual” but this time expanded and with footnotes - it is like seeing the `director's cut' of Rand's earlier essay. It is that good.
    Buy one for a student today. You might just save their life.

Buy it at Amazon in either Kindle or hard cover.  Or, if you really are a poor student, read the first edition online in PDF at the author’s website.

NB: The expanded edition also includes Hicks’ essays Free Speech and Postmodernism and From Modern to Postmodern Art: Why Art Became Ugly. Images of the art works discussed and referred to in the latter essay are available at a dedicated page at his website.

* A recommended reading list?  Here’s one. And here’s another.

Yes, we’re small-minded.

How small-minded are New Zealanders?

At a time when the world is collapsing in an orgy of European and American debt, our second-largest city lies in ruins and the Rugby World Cup has arrived on our shores to lift our spirits, most New Zealanders are eager to find enough time amongst it all to get incensed about a comedian impersonating an airline pilot. (“Send them to jail!” “A serious security threat!” “I need to get a life!”)

If you’re one of those people, please ask yourself: “Is this really the best thing I can be doing with my time? Seriously?” After all, nothing came or was likely to come of it, and if anything it showed airport security was working well enough to stop him before he tried to fly your Grandma to Timaru. 

Aren’t there enough real things to get irate about, without creating them out of nothing?

Even with the Rugby World Cup right here in front of us, instead of just getting enthused about the tremendous outpouring of excitement we have seen, too many people are concerned instead about too many other people being out enjoying themselves, about the state of the trains, and about England players (gasp) having a few beers after a game—not to mention the colour of their jerseys during it. 

“My God! They’ve stolen our jersey!” “They shouldn’t be allowed to disrespect our jersey!”  Etc. Ad nauseum. It seems both the English, with their black jerseys at this World Cup, and the French, with their dark-dark blue at the last, both spotted how easy it is take a small-minded NZer’s eye off the ball.

As have the Australians in times past. Just remember how incensed everyone got when David Campese had the temerity to disrespect the haka!  Yes, folks, that was right before he helped his team dismantle our team at another World Cup while you were out filing a complaint with the Race Relations Commissioner.

And Lord knows there’s enough hakas around to disrespect right now. You can’t turn a corner for the sight of someone slapping their thighs, rolling their eyes, and bellowing incoherently into some imagined opponent’s face.  Since this is rapidly becoming our default form of greeting visitors, seemingly spilling over now into even less savoury forms of sledging,  it’s no wonder some of our cousins over the ditch are starting to get concerned about us.

It has always been this way. We focus obsessively on the small and unimportat while the large goes on around us unnoticed.  Just ask Alasdair Thompson, or Paul Henry --- both of whose employment status instantly became a Matter of National Importance when they … when they what? Can anyone even remember now what seemed so important then? 

Our penchant for small-mindedness while the world burns around us is perhaps our small country’s way of handling being small in a world where bigness seems to count. But it’s not one of our most attractive traits.

There ought to be a law against it.

Tuesday, 20 September 2011

ECONOMICS FOR REAL PEOPLE: History of Business Cycles


Here’s the news about tonight’s session from our friends at the UoA Economics Group:

Hi all,

    In recent weeks we examined the causes of the booms and busts that seem to be becoming more frequent. We spent time examining the Great Depression and the role of the Central Banks at that time.
    But a good question asked by some in those seminars was whether there were booms and busts before central banks were created.
    The answer to this requires a study of history and specifically of the history of business cycles in the United States. So in tonight’s seminar we will look back in time to see what we can learn from the past. While the examples will be based on US history, virtually all the same things can be said about the UK and NZ etc. We will discuss what lessons we in New Zealand can take from the US experience.
    Look forward to seeing you tonight.

    Time: 6:00pm
    Date: Tuesday 20 September
    Location: Case Room 1, Level 0, University of Auckland Business School

Key Government overturning Supreme Court, and principles of good law [update 2]

The Key Government seems to have learned nothing from the many mistakes of the Clark Government.  Instead of avoiding them, it is repeating them. Virtually all of them.

Perhaps the two highest profile judicial mistakes of the Clark Government’s last term, with the biggest consequence for the Government itself, was (first) its overturning of the Appeal Court’s decision allowing iwi to take cases in common law arguing for their ownership of specific parts of foreshore and seabed, and (second) its passing of retrospective legislation covering its arse over the pledge card.

The Clark Government’s first intervention didn’t just overturn the judiciaries’ independence, one of the bulwarks of Objective Law, it politicised a decision that would have been far better taken through the courts in common law—without all the screaming and shouting, and the resignations of ministers and formation of new parties. (Wooh, talk about unintended consequences!)

Its second intervention, passing retrospective legislation to protect itself from the consequences of its own law-breaking, overturned yet another bulwark of Objective Law: the principle that, to be objective, law must be known in advance.

In every regard, the law must be adapted to its essential goal: predictability. "[M]en must know clearly, and in advance of taking an action, what the law forbids them to do (and why), what constitutes a crime and what penalty they will incur if they commit it."

A bad habit of changing law retrospectively, just because it doesn’t suit the government, is hardly the mark of good predictable law.

But does this National-led Government learn? No way. It’s just announced it plans to pass law overturning the Supreme Court decision disallowing the Supreme Court’s decision in the case of the police surveillance of the Urerewa 18 17 15 4.  At a stroke, overturning virtually all the principles of good Objective Law–and all because the government wrote bad law in the first place.

Maori Party MP Te Ururoa Flavell is absolutely right.

"It appears that what the National Government will ask us to do, is to suspend the law temporarily - to condone the unlawful act by the Police; and then to add fuel to the fire by introducing legislation to make the 'unlawful' lawful. What sort of justice system do we have if the upholder of the law is allowed to break the law and get away with it?”

Fair question? It’s certainly not one that’s worthy of respect.

UPDATE 1: Speaking of Objective Law  and the separate arms of government being independent, I just heard the Prime Minister tell Leighton Smith “I’m not going to allow these people to walk free.” With the clear implication he will change whatever law  is necessary to do that.

There was a time in  history when the superiority was realised of “a government of laws, not men.” Feel free to write whatever opinion you like about whether this still exists.

UPDATE 2: Dim Post on John Boy’s Bureaucratic Capture:

“John Key isn’t an intellectual … [which]  makes him vulnerable to mistakes like this decision to retrospectively validate illegal activity undertaken by the New Zealand police. The bureaucrats embarrassed by the Supreme Court’s finding that the police acted illegally can argue that it would be awfully practical and convenient for the state to pass legislation dumping the Supreme Court’s interpretation of the law, and the Prime Minister doesn’t have the intellectual clarity to say, ‘Hold on a minute. That violates almost every principle my own party is supposed to stand for!’”

Monday, 19 September 2011

A Puritan World Cup?

After another weekend of great games and celebrations, the puritans want to take the city back. “Auckland’s party mood worries officials” reports a po-faced Royal NZ Herald this morning, with stories not about the thrill of seeing smiling, happy faces filling the city but instead of meetings, concern and  “urgent talks” about the phenomenon.

Remember Mencken’s working definition of  Puritanism:

The haunting fear that someone, somewhere, may be happy”

That’s exactly the type of thing worrying these “officials.”

Here’s some good advice fro them: “Chill out: it’s a party.”

Christchurch property-owners shrug

It looks like the rebuilding of Christchurch will happen, if it happens at all, without the folk who built it in the first place--“as quake-weary CBD property owners start using their insurance money to buy new buildings in Auckland and overseas.”

And why wouldn’t they? For one year they’ve been kept from their buildings and treated like mushrooms—allowed to visit to extract the important tools of their business only for ten minutes at a time, and only after loud and repeated protests; not even given the courtesy of consultation about the demolition of their own bloody buildings; and then told by the ruling junta what grand plan they intend to impose on property-owners’ property, with or without their consent.

So why would property-owners stay and re-invest there, now that they’re newly liquid?

It’s terribly sad. But I did say this would happen.

Friday, 16 September 2011

John C. Pew house – Frank Lloyd Wright


FLWPew3FLWPew2Elevated on its site to overlook Lake Mendota (". . .probably the only house in Madison, Wisconsin,” said Wright, “that recognizes beautiful Lake Mendota, my boyhood lake") this is a relatively early house in Wright’s mature “Usonian” style.

FLWPew4Built by Wright’s Taliesin Fellowship in 1940 for John and Ruth Pew using lapped cypress boards and local stone, it cost just US$7,850 (around US$120,000) in today’s diluted money).

They finally sold it in 1983, and it was sold again in 2006 -- for US$1.5 million.


Auckland Art Gallery

To my shame, I’m still yet to visit the new Auckland Art Gallery a week after its opening.

Everything I’ve seen about it suggests its one of the best uses of taxpayers’ and ratepayers’ money since, well, ever.  (You know, if you are going to steal money out of people’s pockets, at least when you get a result like this you can’t grumble about the quality.)

The ‘lost’ individual right

imageA guest post by Gen La Greca and Marsha Enright on “the ‘lost’ individual right.”

Constitution Day (September 17) commemorates the 1787 signing of the document that established the United States of America. But like the victim of a terrible accident, the government that was formed that historic day in Philadelphia is hardly recognizable today, and the heart that propelled it — the principle of individual rights — is on life support.

Ironically, what started as a government of radically limited powers now mandates that the nation’s schools “hold an educational program on the United States Constitution” on the holiday of its signing.

In fact, the best “educational program” comes from James Madison, the man who scoured political thought and history to create the blueprint for our government, earning him the title “father of the Constitution.” He has a crucial lesson for us on property rights.

To prepare for his lesson, let’s contrast today’s treatment of our First Amendment rights with that of property rights.

People would be shocked if the president of the United States said: “I do think at a certain point you’ve made enough speeches,” or “you’ve given enough sermons” or “you’ve authored enough books.” Virtually all Americans would protest such remarks and boldly assert that it’s a free country, so they can say, preach or write whatever they please.

Yet the president can get away with saying: “I do think at a certain point, you’ve made enough money.” And he can get away with seizing and redistributing our money in order to “spread the wealth around,” with only a minority shouting in disbelief at the outrage. These dissenting voices have been unable to stop a century-long growth of the welfare state.

Consider the onslaught against property in recent years: The city of New London, Connecticut can seize Susette Kelo’s house and land to sell to a shopping mall developer. Congress appropriates billions of our dollars and redistributes them to the companies of its choice, including failing banks, auto manufacturers and solar panels producers. And businesspersons like Warren Buffet blithely suggest that the wealthy be taxed more.

Are these attacks on our possessions accepted because the right to property is a lesser right, one that isn’t inalienable like the others?

In his article “Property,” Madison emphatically says no. He explains that our right to property is as untouchable as our freedom of speech, press, religion and conscience. In fact, he views the concept of property as fundamental, pertaining to much more than merely our material possessions.

In the narrow sense, Madison says, “A man’s land, or merchandize, or money is called his property.” But in a wider sense,

“A man has a property in his opinions and the free communication of them … in his religious beliefs … in the safety and liberty of his person … in the free use of his faculties and free choice of the objects on which to employ them.”

He then concludes:

“[A]s a man is said to have a right to his property, he may be equally said to have a property in his rights.”

This statement represents a profound expression of the individual’s sovereignty over his possessions of every kind: spiritual, intellectual and material. According to Madison, a human being is master of his mind and body, his beliefs and possessions, his person and property. It is all the province of the individual to create and control.

Madison argues that there is no parceling of rights. Our rights to life, liberty and property are indivisible. The reason for this was explained with unusual clarity by Ayn Rand two centuries later:

“The right to life is the source of all rights — and the right to property is their only implementation. Without property rights, no other rights are possible. Since man has to sustain his life by his own effort, the man who has no right to the product of his effort has no means to sustain his life.”

Government, according to Madison, is “instituted to protect property of every sort,” and is judged solely by this yardstick:

“If the United States mean to obtain or deserve the full praise due to wise and just governments, they will equally respect the rights of property, and the property in rights.”

But what does our current government do? Instead of respecting our material property at least as well as it does our other rights, its redistribution of wealth, strangling regulations on business and deeply ingrained entitlement mentality are blatant assaults on our right to property. As Ronald Reagan famously remarked:

“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

It’s as if Madison looked into the future as he observed:

“When an excess of power prevails, property of no sort is duly respected.”

That is precisely our current situation.

Today, the huge onslaught of regulations such as Dodd-Frank, Obamacare and the EPA’s controls on energy production has brought us almost to the point of economic paralysis. Buying and selling homes, as well as autos, has all but halted. Companies are hoarding cash and not hiring as they fearfully watch the latest attempts by government to control them. The stock market is epileptic, with seizures up and down triggered by the latest political and economic news. With these curtailments on our right to acquire, use and control our property in the economic realm, the very essence of our liberty — the right to free action — is lost.

Even worse, government’s violation of property rights isn’t limited to the economic realm. Because our rights are interconnected, it’s spreading to all aspects of life.

Consider the trial balloons we’ve already seen to limit free speech, such as the so-called “Fairness Doctrine” or “Net Neutrality.” Or consider the expanding government grip over deeply personal areas of our lives, such as regulations on what fats or sugars we eat, what physicians we see, what health insurance we buy, what treatments or drugs we’re allowed to have — and what our children may bring to school for lunch.

Because our rights can’t be divided, if we lose one, we could lose them all. That’s why we have to fight against government intrusion in the free market with the same moral certitude — and the same fire-in-the-belly — that we’d have if the government invaded our homes without a warrant, or forbade us to peacefully assemble. We have to treat the government’s encroachment on the economy as we would an encroachment on our opinions, beliefs and conscience.

On Constitution Day, let’s remember Madison’s lesson on the full meaning of property — and fight for our right to property as if our life depended on it, because it does.

Gen LaGreca is author of Noble Vision, an award-winning novel about the struggle for liberty in healthcare today. Marsha Familaro Enright is president of the Reason, Individualism, Freedom Institute, the Foundation for the College of the United States.
This post originally appeared at The Daily Caller. It appears here by permission.

Record covert taxes

Receipts from two of the government’s covert taxes have gone up in record numbers.

In 2009 they gave the courts power to confiscate property from folk before them, even without a person being  convicted. In the two years since they have taken from people art collections, vintage cars, homes, jewellery, boats and farms. $48 million worth of people’s assets stolen from them by the agency—i.e., the government—supposedly devoted to protecting them from theft.

And a few years before the government gave the police power to set up hidden speed cameras, which they’ve done in record numbers in a record number of places where speed has never been a factor in an accident. No surprise then that  in 2010, nearly 628,000 speed camera tickets were issued, almost twice as many as the year before. No surprise either that although National considered speed cameras to be revenue collection before the 2008 election, now they’re  the recipients of record revenues they’ve resiled.

Taxation is theft. Covert taxation is covert theft.  Just more examples then of a government (and a police force and justice system) more interested in doing us over than protecting us.

America Invents No More

“Sure, free riders can have a great run, up to the
point that they run out of creators to steal from.”
- Lawrence Ebert, IPBIZ blog

You might be aware that the American Senate recently passed what it calls the “America Invents Act”—more accurately described by some as the America Invents-No-More Act, “which will stifle U.S. innovation, growth of new American businesses, and long-term job growth in America.” In short, it is a disaster.

This legislation should more appropriately be called the ‘Leahy-Smith Trade Secret Protection Act of 2011,’ because it will encourage and reward keeping America’s innovation and new discoveries secret.  This concept of secrecy attacks the very foundation of our patent system put into place by our Founding Fathers.

In response, our regular Guest Poster and patent specialist Dale Halling explains what real patent reform would have looked like, and why.

I have written a number of times on what real patent reform would actually accomplish.  One of the major problems with our patent system is that your rights stop at the border.  This is different than any other property right.  For instance, if I drive my car across the border into Canada, I still own my car.  If I drive my book across the border into Canada I still own both the physical version of my book and the copyrights to my book.  But, if I drive my invention across the border I no longer own my invention.  This situation existed for copyrights 150 years ago and it was recognized that there was no logical reason for copyrights to end at a countries border and it discouraged the publication of domestic authors.  The same is true of patents.

I suggest a system of reciprocity in which an inventor who obtains a patent in Canada, for example, has patent rights in the U.S. and vice versa.  This would decrease the duplication of efforts across patent offices around the world and significantly reducing the present backlog in the U.S. patent office.  More importantly, it would increase the value of a patent and increase the chance of obtaining funding for technology startups.

A friend of mine, Jim Lauffenburger, explains in practical terms why this important.  His company has found trade secrets to be a much more useful tool, because of the lack of patent reciprocity.

It is interesting that in my company, EM Microelectronics, the best method for protection is definitely keeping a secret, not filing for patent protection. (And keeping those secrets is extremely challenging and difficult.)

Why, you ask?
Because we are unable to enforce patent protection in Asia, and unable to prevent literal copying.

We spend man-decades of highly skilled (and expensive) engineering time to design a new IC. The IC goes into mass production in some successful product. It gets rapidly reverse engineered in Asia. Nearly direct copies of the part soon appear, and can be priced at only silicon-cost, without the huge development costs.

We visited several of these Asian “design centers” to ask them how they do it, under the guise of possibly utilizing their services. But even that guise was not really necessary, because they were proud of their “design method”: They do a layer-by-layer stripping and micro-photographs, and create a direct schematic from that. They convert the digital logic into standard cells, and then re-Place-and-Route using “their own IP” (the standard cells). For the analog portions, they use the layers as-is, but rotate or flip them 90 degrees so that it looks different. Then end result is what they claim is their own IC and their own IP, and it looks quite a bit different from our ICs. But, during that entire process they were simply “turning the copy crank”; not actually designing anything from concept.

Fighting this copying at a trademark level won’t work (it looks different). Fighting this at a patent level is extremely time consuming and expensive.

Thus, the only way to fight it is to try to hide features and make very special implementations that don’t work correctly in a layer-by-layer copy. (This of course, is very difficult, and expensive, and MUST be kept fully secret.)

This shows (to me) once again, that most of our law (and society) only works if the we all generally agree on the moral and ethical basis undergirding our actions and laws. Once that is lost, chaos follows. (And “messes get created” by all the reams of laws generated to try to make up for the lost ethical basis.)

While Jim’s company has made a logical decision under the present law, part of the reason for having a patent system is to encourage the spread of technical information.  Trade secrets inhibit this dissemination of technical information and slow down technological and economic progress.  The America Invents Act does nothing to solve this problem.

Nobel Prize winner resigns–global temperatures "amazingly stable"

A Nobel Physics Prize winner has resigned from the American Physical Society over its decision to officially back the  warmist fiction promoted by assorted ragtag Nobel Peace Prize winners. Said Norwegian physicist Ivar Giaever in his resignation letter:

"In the APS, it is okay to discuss whether the mass of the proton changes over time and how a multi-universe behaves, but the evidence of global warming is incontrovertible?"
    "The claim (how can you measure the average temperature of the whole earth for a whole year?) is that the temperature has changed from ~288.0 to ~288.8 degree Kelvin in about 150 years, which (if true) means to me is that the temperature has been amazingly stable, and both human health and happiness have definitely improved in this 'warming' period."

Hard to argue with any of that.

In addition to Giaever, other prominent scientists have resigned recently from APS over its attempted of warnism from hypothesis to new religion. See: Prominent Physicist Hal Lewis Resigns from APS: 'Climategate was a fraud on a scale I have never seen... This is not science'

[Hat tip Jeff Perren]

Thursday, 15 September 2011

The Spirit Level delusion: It’s not about the evidence

Whether you’ve noticed it or not, the chattering classes have been all abuzz over recent months about a book called The Spirit Level purporting  to demonstrate, by statistics aplenty, that places with less difference between the “haves” and the “have-nots” are happier places—where everyone lives longer, has better health and happiness, and has far more sex on Sundays.

The conclusions have been embraced here in EnZed.  “An unequal society is a sick society. It’s a simple, powerful idea,” enthuses the Double Standard: “These people’s work can not be dismissed,” says a hopeful Grant Robertson at Labour’s other blog. “It is important!” pontificates Scott Yorke at his. “It's to ideological politics what An Inconvenient Truth is to climate change,” assesses Tim Watkin accurately at the Pundit blog.   And Colin James, the country’s most stale pundit, wonders if the 300-page tome might not become  “a sort of guidebook for the next Labour ministry,” should there ever be one.

Now, the figures on which these hopeful conclusions are based have been solidly debunked as cherry-picking in books and reports like The Spirit Level Delusion: Fact Checking the Left's New Theory of Everything,  When Prophecy Fails: The Spirit Level and the Illusion of Scientific Socialism, The Spirit Illusion and Beware False Prophets.  As Luke Malpass  at Australia’s Center of Independent Studies point out,

the income statistics are faulty … the authors ignore some key countries which don’t fit their hypothesis … [and] ignore social indicators where equal countries tend to perform badly…
    The authors present a series of graphs plotting the income distribution in each country against selected social indicators, and in each case they claim to show problems getting worse as we move from less to more unequal countries.  In fact, however, most of their graphs show no such thing

Despite the huge disparity however between what the authors claim and what they can actually prove, the book has taken the whole world by storm, with one uncritical Guardian journalist, Polly Toynbee, calling co-author Richard Wilkinson “the 21st Century’s equivalent of Charles Darwin.” Charles Darwin!

In a sense however, Polly is right. Darwin used the evidential methodology of his day (observation and integration) to replace previous bogus theories with sound science. And now Wilkinson and his co-author are using the methodology of the post-modern age (fiddle and fudge)  to do the reverse.  As Chris Snowdon points out in his own book on the delusion, both Spirit Level authors have prior form in generating crap statistics to bolster shoddy politically-driven arguments. About which, and about the bogus figures, the chattering classes have no apparent interest.  Which is really the leitmotif of our postmodern 21st Century age, isn’t it: never mind the quality of the research as long as your conclusions are supported by those who can shout the loudest.  (Of such “research” are this century’s “Charles Darwins” undoubtedly going to be made.)

Or to put it bluntly, it’s not about the evidence. Because if it were, a few other things would arise.

Just consider for a moment an observation made by Ludwig von Mises:

"The European worker today lives under more favourable and more agreeable outward circumstances than the pharaoh of Egypt once did, in spite of the fact that the pharaoh commanded thousands of slaves, while the worker has nothing to depend on but the strength and skill of his hands."

Now any honest commentator would notice that, wouldn’t you think?  And anyone truly concerned with lifting up the “have-nots” would be trumpeting the system that raised from them and all of us from dirt-poor slavery to a time when virtually anyone can live better than the kings, pharaohs and pashas of the past ever did.  Even a day labourer these days has the capacity to live well, eat well, and have at his or her command a library of the world’s greatest books, a collection of the world’s greatest music, access to enjoy the greatest sporting contests on the planet, and the ability to sip ice-cold martinis while flying at enormous speeds ten-thousand feet above the Tasman. And that process didn’t happen because Karl Marx and his confreres got hold of the economy’s commanding heights.

So if its not about evidence or helping the “have-nots,” then what is it all about?

imageSimple. It’s about politics. And morality. It’s about using sacrifice to power politics, and the have-nots to build a power base.

The point was made by Andy Kessler in an interview about his book Eat People, when asked to explain why he repeatedly slams Obama’s hero Saul Alinsky:

Saul Alinsky was a community organizer who, in the early 70s, built a movement based on the disparity of the haves and have-nots, then have them elect someone to office who would take from the haves and give to the have-nots.

It’s not complicated. It’s not about evidence; it’s not about research; it’s certainly not about facts: it’s about building a power-base on the morality of sacrifice. (And as Yaron Brook and Don Watkins argue, “no system that treats you as other people’s servant can be called moral.”)

Because if it were really about helping the “have-nots,” the chattering classes wouldn’t be so excited about fudging figures about haves and “have-nots,” they’d be asking instead how someone becomes a “have” in the first place—which, if he does it right, is by driving productivity and thereby making us all wealthier—and doing everything they can to turn today’s “have-nots” into tomorrows “haves.”

But we see, however, by their embracing of bad statistics and their resolute intent to keep educational standards low (“Labour would ditch national standards” is this morning’s unerringly accurate headline), that helping have-nots become haves is not any part of their project.

Because if they got rid of the “have-nots” altogether, what then would happen to their power base?