Tuesday, 26 June 2012

It’s John Key’s “John Major” moment

If folk wondered/hoped/were frightened that John Key’s second term would see him unleash the hounds of radical reform, with yesterday’s  announcement of a ten-point five-year plan—one complete with “Key Performance Indicators” ranging from the fantastic to the fatuous—we all now have our answer: He’s not Margaret Thatcher, he’s her wet-bus-ticket successor John Major.

Major defined dullness and lack of imagination. Comparing him to Mrs Thatcher, one wag pointed out that at least with her there was a character to assassinate. To call him grey, said another, would be an insult to porridge.

Ask Major “what’s your big idea,” and like Key his answer would be “ I haven’t got one.” After Major found the Prime Ministership thrust upon him however, this grey shell of a man struggled to find something, anything, with which to define the  premiership he’d found himself in. And in 1992 he found it: in the depths of recession with millions unemployed, his “big idea” was a so-called “Citizen’s Charter”—complete with “Key Performance Indicators” ranging from the fantastic to the fatuous.  Things like a formal public promise to signpost toilets. Performance targets for late trains. And a “cones hotline” complete with quotas for road-cone reduction on highways.

Much like John Key’s bold promises of yesterday, really, and just as easy to fudge.

So we could say yesterday was John Key’s “cones hotline” moment—the defining moment of his premiership.

Which is not intended as a compliment.

FREE Decline & Fall [updated]

If you’ve been enjoying the Guest Posts that have appeared here from Dale Halling  on Intellectual Property, then you’re going to love this special offer, a FREE  Kindle version of his book explaining how the US has lost its innovation engine – The Decline and Fall of the American Entrepreneur: How Little Known Laws and Regulations are Killing Innovation.  

This offer is valid for one week only.  Sadly, this offer has just expired—but you can still pick up the Kindle version for the giveaway price of just USD4.99!  At that price it’s still a snip.

The book provides simple, inexpensive suggestions for how to rev up the innovation engine, along with explanations of the little-known laws passed within the last decade that have crippled America’s innovation, resulting in the stagnation in median family income that was a major contributor to the housing crisis. 

What reviewers are saying about The Decline and Fall of the American Entrepreneur:

“Dale Halling’s Decline and Fall of the American Entrepreneur makes a compelling case for the need to reform regulatory and other policies that hamstring entrepreneurial innovation in our country. Everyone concerned about the decline in American innovation should read this book.”
David Kline, co-author of Rembrandts in the Attic and Burning the Ships

I do not review books on the ‘net unless I find them well-written and especially informative, which certainly applies to Dale B. Halling’s The Decline and Fall of the American EntrepreneurMr. Halling is a physicist, lawyer and an expert on patents and entrepreneurship, all of which comes through in his book. This author delivers the goods…
He demonstrates in clear terms the linkages between economic growth, productivity, and income. And he lays out how technological advancement has always been the American advantage in global competition, an advantage that the U.S. is squandering…
In sum, this is well-written, jargon-free, 137-page book that is a quick read. It evidences smart and practical thinking by an author with real world experience. I highly recommend it.
Dr. Pat Choate, economist, former Vice Presidential running mate of Ross Perot 1996, Director of the Manufacturing Policy Institute, PhD. Economics University of Oklahoma.

The Decline and Fall of the American Entrepreneur presents the issues facing technology start-up companies in today’s environment.  The book sheds light on the underpinnings of these issues and is enthralling.  Halling’s tight, accessible and personal style make this a fast and compelling read.  His book is a political clarion call that should be heard now.
Greg Jones, former President Ramtron International (RMTR) and CEO Symetrix Corporation. 

This book conclusively establishes the link between innovation and per capita income, and shows that we have recently entered into a time in which innovation is under assault.  This assault has resulted in a predictable loss of income and contributed significantly to the economic woes we are experiencing right now.  The book’s sound policy recommendations suggest a way to turn the economic ship around to set a course for a return to prosperity.
Peter Meza, Patent Attorney – Counsel Hogan & Hartson, Attorney for Alappat –  In re Alappat

I am familiar with some of the sharp criticisms that have been made of patents by the likes of Stephan Kinsella, Tom G Palmer, and Timothy Sandefur… But I had a nagging worry about how, exactly, would a world without IP operate? Despite the claims from Kinsella and others that innovations would proceed happily without IP and have done so, the facts that I can see don't quite back this up. Consider, that during the 1980s and 1990s, we have seen the rise of biotechnology, the Internet, nanotechnology, and commercial space flight (developing as I write these words). I just don't see how patents and copyrights have stymied any of these industries. Of course, we'll never know for sure whether innovation would have been faster or slower in the absence of IP. However, if we look at parts of the world without secure legal systems and property rights, the evidence is that innovation tends to be less, or non-existent.
What is effective about the book is how Halling shows that the combination of developments such as attacks on IP, stock options and IPOs (Sarbanes Oxley) have been so ruinous. And there are powerful lessons here not just for the United States, but for Europeans and others as well.
Thomas H. Burroughes

The history of world production, in three graphs

Yes, GDP is a very imperfect measure, but look at this graph showing GDP (as a proxy for production) over the last two millennia:


You should read this in the context of the graph below showing how the world changed for the better around two-hundred years ago—from being a flat line for most of world history, production all of a sudden shot up out of nowhere to support a rapidly growing population.  What a great thing. At least this is what happened in the parts of the world where the Age of Enlightenment happened—that remarkable period in human affairs when human beings began applying reason to understand the world around them, and in the ensuing Industrial Revolution to transform it.

But as we can see above, China and India, were excluded from this happy state of affairs, at least until very recently (being a logarithmic graph the last few decades are as prominent as the first few centuries). And in Africa and the Middle East, have still yet to enjoy it.

And just ignore the big grey slug that is Russia. They were lying about their production figures long before the Bolsheviks came along.


Practice Good Theory has more thoughts.

And in case you don’t think production and wealth is such a good thing, Stephen Hicks has a neat graph showing the relationship between wealth and life expectancy.   If you’re over 45 or so, you should take it seriously.


Young Martyn

Reading the blogs this morning I stumbled across someone describing Martyn Bradbury. Yes, it’s true. Answering a question at the Laissez Faire blog, Don Watkins quotes the perfect description:

Q: Taran asks, “Socialists continue to espouse socialism in the face of all evidence that it simply does not work. How do we explain their continual support for a system that is responsible for the deaths of tens of millions? And by extension, their hatred of a system that is responsible for lifting people out of subsistence living?”
A: Few people espouse socialism today (although many in Europe continue to call themselves socialists). Those who do are typically either young and ignorant, or [think[ they are intellectuals, [or both]. Ayn Rand has a definite view of what motivates socialist intellectuals. As she writes in the essay “The Monument Builders” in
The Virtue of Selfishness, “What, then, is the motive of such intellectuals [those who support socialism]? Power-lust. Power-lust—as a manifestation of helplessness, of self-loathing and of the desire for the unearned.”

Ignorant, self-loathing and oozing with a desire for the unearned. Yep, that’s “Bomber” Bradbury to a tee.

But not young.

Monday, 25 June 2012

Cunliffe recycles Norman

Martyn Bradbury has taken time out from his new career to talk up David Cunliffe’s weekend speech to a lingering band of those who can stomach his company. Say’s Bradbury to his own dwindling band of readers:

Cunliffe's third True Labour speech has gone far further than the Greens have in highlighting the looming environmental crises of living beyond our biosphere’s ability blah, blah, blah…

Actually, it does nothing of the sort. In fact, it reads like nothing so much as Russel Norman’s own conference speech from a couple of weeks ago—in short: what about the dolphins; we’re all going to die; population growth is a curse; capitalism is to blame; government must pick winners; “green technology” is the way of thee future etc.., et., etc.

So rather than fisking Cunliffe’s doppelganger of a speech, another pig-ignorant cry for attention--another example of recycling masquerading as original thinking—let me just direct you to my reviews of Norman’s original.

I’ve changed my mind about the Euro

imageShould the southern Europeans and Ireland withdraw from the European Monetary Union and go back to their drachmas and punts? Should Germany and the northern Europeans quit paying the southerners’ bills and coalesce around either a new mark or a revival of the thaler, the currency of the late Holy Roman Empire and old Hanseatic League?

Until the weekend, I thought reviving the mark or the thaler was the best approach. But I read an article over the weekend that changed my mind.  I think.

By Spanish economist Jesus Huerta de Soto, author of the excellent book  Money, Bank Credit, and Economic Cycles  , the article is called “An Austrian Defense of the Euro.” Something I hadn’t thought was possible.

De Soto argues, first of all, that all good Austrians should be in favour of fixed, not floating, exchange rates.  This might come as a shock. He argues however that the fiscal discipline required by fixed exchange rates is at least something like the fiscal discipline required by the classical gold standard, which puts a check on governmental plans for easy money.  He quotes Hayek from 1975:

It is, I believe, undeniable that the demand for flexible rates of exchange originated wholly from countries such as Great Britain, some of whose economists wanted a wider margin for inflationary expansion (called "full employment policy"). They later received support, unfortunately, from other economists[4] who were not inspired by the desire for inflation, but who seem to have overlooked the strongest argument in favour of fixed rates of exchange, that they constitute the practically irreplaceable curb we need to compel the politicians, and the monetary authorities responsible to them, to maintain a stable currency
I do not believe we shall regain a system of international stability without returning to a system of fixed exchange rates, which imposes on the national central banks the restraint essential for successfully resisting the pressure of the advocates of inflation in their countries — usually including ministers of finance.

So supporters of fiscal discipline should be in favour of fixed exchange rates-on the understanding that the self-correcting mechanisms for within this system are similar to those of the classical gold standard, and the resulting restraints on government therefrom are a feature, not a bug.

And as he points out, the EuroZone is nothing if not a a zone within exchange rates are fixed—the consequence now being that those economies and those governments who displayed insufficient rectitude are now seeing their fiscal chickens come home to roost.

This, he argues is not a bad thing. It’s not even a good thing. It is, he says, a great thing.  Because, like a mirror, the discipline of the EuroZone reflects back to players the consequences of their own actions.

The arrival of the Great Recession of 2008 has even further revealed to everyone the disciplinary nature of the euro: for the first time, the countries of the monetary union have had to face a deep economic recession without monetary-policy autonomy. Up until the adoption of the euro, when a crisis hit, governments and central banks invariably acted in the same way: they injected all the necessary liquidity, allowed the local currency to float downward and depreciated it, and indefinitely postponed the painful structural reforms that where needed and that involve economic liberalization, deregulation, increased flexibility in prices and markets (especially the labour market), a reduction in public spending, and the withdrawal and dismantling of union power and the welfare state. With the euro, despite all the errors, weaknesses, and concessions we will discuss later, this type of irresponsible behaviour and forward escape has no longer been possible.

For instance, in Spain, in just one year, two consecutive governments have been forced to take a series of measures that, though still quite insufficient, up to now would have been labelled as politically impossible and utopian, even by the most optimistic observers:

  1. article 135 of the Spanish Constitution has been amended to include the anti-Keynesian principle of budget stability and equilibrium for the central government, the autonomous communities, and the municipalities;

  2. all of the projects that imply increases in public spending, vote purchasing, and subsidies, projects on which politicians regularly based their action and popularity, have been suddenly suspended;

  3. the salaries of all public servants have been reduced by 5 percent and then frozen, while their work schedule has been expanded;

  4. social-security pensions have been frozen de facto;

  5. the standard retirement age has been raised across the board from 65 to 67;

  6. the total budgeted public expenditure has decreased by over 15 percent; and

  7. significant liberalization has occurred in the labor market, business hours, and in general, the tangle of economic regulation.[7]

Furthermore, what has happened in Spain is also taking place in Ireland, Portugal, Italy, and even in countries which, like Greece, until now represented the paradigm of social laxity, the lack of budget rigor, and political demagoguery.[8] What is more, the political leaders of these five countries, now no longer able to manipulate monetary policy to keep citizens in the dark about the true cost of their policies, have been summarily thrown out of their respective governments. And states that, like Belgium and especially France and Holland, until now have appeared unaffected by the drive to reform are also starting to be forced to reconsider the very grounds for the volume of their public spending and for the structure of their bloated welfare state. This is all undeniably due to the new monetary framework introduced with the euro, and thus it should be viewed with excited and hopeful rejoicing by all champions of the free-enterprise economy and the limitation of government powers.

There is more, much more, and all of it worth thinking through—especially the motivations of those who both oppose and support the  present set-up, and its collapse: on one side the Europeans who purposely set up a system in which more profligate countries got to use the money and the credit rating of Germany—and on this side too those Americans who realised that as long as it was set up that way the Euro would never take over Reserve Currency status from the US dollar.

And opposing the Euro are the Keynesians who complain about the Euro’s straitjacket, not allowing within the EuroZone to push monetary stimulus at a time (like now) of economic crisis.

As Margaret Thatcher famously pointed out, one primary problem with socialism is you eventually run out of other people’s money. De Soto argues the European Monetary Union makes the running out crystal clear, and requires honest means by which to repair the situation—and as such advocates of freedom and sound money should support it.

It’s worth thinking about: “An Austrian Defense of the Euro.”

Friday, 22 June 2012

FRIDAY MORNING RAMBLE: The Montessori edition

Sorry I’m late.  I spent the morning observing at a Montessori school—something everyone should try to do themselves at least once in their life.  Anyway…

Overseas this week there’s been murmurings about mutterings in Rio, more Euro-calamities, and the future becoming steadily less bright throughout the Middle East. So at least some folk have enjoyed had some soccer to watch.
Locally we’ve been hearing legerdemain about league tables, sop on superannuation, mixed messages around mixed ownership, and about the full-on FUBAR that is ACC—surely the least responsive health insurance monopoly anywhere on the planet.
Oh, and Anne Tolley crushed a car.

On with the show:

Cactus Kate points out a few home truths about National’s mixed ownership models, partial privatisations and the dogs and dogs’ breakfasts to which any money from the partial privatisations will be directed.
Asset Sales Bogey Needs Picking – CACTUS KATE

David Farrar disagrees. But David Farrar blogs for the National Party.
Fisking Cactus – KIWIBLOG

State super “is a six-generational Ponzi scheme” says visiting academic.
Larry Kotlikoff talks to Interest.co.nz about The Clash of Generations, a six-decade generational Ponzi scheme, and why John Key should take notice – INTEREST.CO.NZ

In central Christchurch what you own is threatened by government confiscation. And in outer Christchurch what you own is barred from being developed at all by government bans. No wonder it’s becoming the worst Christchurch winter in living memory.
But it’s not hard to fix…
Whoa.....are these guys slow learners ! - Hugh Pavletich, CANTABRIANS UNITE

The need for real RMA reform? Desperate. The chances of it ever happening under the Blue Team? Remote.
Maimai reflections – RMA reform remote – STEPHEN FRANKS

So if Kiwisaver is such a gosh-darned success, how come nearly half are not actually contributing to their accounts?
KiwiSaver membership approaches 2 million mark; Close to half aren't contributing. – INTEREST.CO.NZ

Once youngsters realise they’ll be paying for their elders’ debts for the rest of their lives, you’d think they’d be embracing austerity, no?
Young should embrace austerity now – WHALE OIL

Oh, the difference that an S makes!
I Love Hores Too – NOODLE FOOD


Two most likely outcomes in Egypt? Either sharia or civil war. Certainly not the Arab Spring many were hoping for.
Egypt: Generals say they'll "hand over power to the elected president at end of month" – Robert Spencer, JIHAD WATCH

Journalists have been interviewing their typewriters about how new Fairfax owner Gina Rinehart is going to “destroy” the business. Message from Planet Earth: only in the fevered imagination of journalists do businessmen and women buy businesses to destroy them.
Why Would Rinehart Do Any Worse Than Fairfax? – DAILY RECKONING

Waiting for QE3? Turns out the Federal Reserve may never stop monetizing!
As Part Of Its NEW QE Q&A, Goldman Warns Of Possibility For $50-$75 Billion "Flow" Program 

Yes, it’s true. We’ve witnessed twenty years of phony growth.
The Disconnect Between Household Wealth and GDP Growth – Bill Bonner, DAILY RECKONING

Before George Carlin, there was Lenny Bruce:

I really don’t think you can credibly argue that feudalism was good for property right, could you?
When are ‘secure’ property rights bad for growth?MARGINAL REVOLUTION

Pete Boettke calls it "the best blog post ever written." And apart from some ethical confusion [WARNING: Contains Kant] it's, well, it's not bad.
Factual Free-Market Fairness – Deirdre McCloskey, BLEEDING HEART LIBERTARIANS

James Lovelock isn’t worried about sea-level rises. So why should you be?
I’m not worried about sea levels, says climate change expertJUNK SCIENCE

A lot of people say they can’t succeed because they face impossible barriers. You know what? That’s bollocks.
Whether You Fail Or Succeed, It’s Your Fault: An Interview With Brian Tracy 
– Don Watkins, LAISSEZ FAIRE

Why does McDonalds food always looks less visually attractive on your plate than it does in photographs? Because it is, that’s why.
Behind the scenes at a McDonald's food photo shoot – KOTTKE.ORG

Here’s something else I bet you didn’t know: NASA took Playboy Playmates to the moon!
NASA Astronauts Took Playmates to the Moon – DISCOVERY NEWS

This is what I tell my clients: “Nature has a myriad of incredible positive effects demonstrated by research”:
6 reasons why a better life is just a few steps away – BARKING UP THE WRONG TREE

Christian charity in action here from the US: Atheists should get the hell out, says friendly local pastor.

But isn’t America a Xtian nation? Um, no. It’s not.
Is the United States a Christian nation? – Diana Hsieh, PHILOSOPHY IN ACTION RADIO [AUDIO]

Grammar gaffes invade the office in the age of e-mail, texting and Twitter…
This Embarrasses You and I* – WALL STREET JOURNAL


That picture above by Georgia O’Keefe? It’s an orchid, isn’t it. Yes, of course it is.
Erotic Symbolism in 21st Century Painting – Michael Newberry, NEWBERRY’S BLOG

“A research study has concluded that contrary to the belief that great art is often born from intolerable mental suffering, deliberately torturing an artist can actually lead to a marked deterioration in the quality of their output.”
Tortured artist ‘didn’t produce any better art’, reveals torturer – NEWS BISCUIT

So what exactly is craft beer anyway?
Of rooms and the elephants who dwell therein – Greig McGill, BREWRACRACY

You know what it’s like when you have a song in your head for weeks … like this one, Born Again Idiot, The Verlaines:

If you missed NZ Opera’s Rigoletto recently, you only have yourself to blame. Here’s a lesser performance from Siena of the famous Quartet, in which young Gilda realises she’s been betrayed:

Bugger. Deborah Voigt has cancelled her Australasian shows in July, to be replaced by Christine Brewer. Who? Christine Brewer, that’s who:

It’s Jumping at the Woodside, with Count Basie and Oscar Peterson!

[Hat tips and thank yous to Diana Hsieh, Geek Press, Home Paddock, Robert Wenzel, Lyndon Hood]

Thanks or reading,
Peter Cresswell

Thursday, 21 June 2012

The “Great Moderation” has been robbing us blind

Recently a slew of commentators and Reserve Bank governors have been heard praising the Reserve Bank arrangement in place since 1992, put in place to moderate things on the basis of “a little bit of inflation does you good.”  Over those last twenty years, our Reserve Bank and every other central bank in the developed world praised each other for “conquering inflation” and producing “price stability”—a conquest overcome by the simplistic stratagem of encouraging a certain amount of inflation every year.  (Not so much these days however about how they conquered the business cycleI wonder why.)

Anyway, even if we don’t talk about the malinvestments caused by the deluge of counterfeit capital with which the developed world’s central banks flooded the place over most of the 2000s, the “gentle inflation” they unleashed has been destructive enough.

It’s been a killer. A silent killer.

The Silent Killer
Guest post by Jeffrey Tucker

I WAS JUST READING about how the median American wage is lower today than it was a decade ago, and the median net worth no more than two decades ago. Ouch. The cause, says the US Federal Reserve itself, is inflation.

Inflation? That's interesting. Hardly anyone talks about that anymore. I can't remember the last time I read a mainstream article that so much as mentioned it as a problem. There is public consciousness about rising prices in specific sectors like education and health care. But is there really a general problem with inflation?

The central bank spokesmen all speak about a different thing: the great fear of deflation. So long as that monster is kept at bay, we are all supposed to sleep soundly at night.

Yet the data are in: Inflation is killing wages, one grueling step at a time.

So let me ask you the following: How much is the US dollar worth today compared with the year 2000? These are years in which inflation has been supposedly crushed. What's your best guess?

The answer is 75 cents. Imagine that. For every four quarters you owned, one was stolen in secret over the course of the last 12 years. Keep in mind that this is a period in which the price of many things we love like computers and software have dramatically fallen in price.

Falling prices for things mean that the value of the dollar has increased. We see this in only a few sectors. Rising prices for things mean that the value of the dollar (its purchasing power) has fallen, and we see this in most sectors. A total inflation rate averages out both trends.

Yes, this is methodologically suspect. What can it mean to average the falling price of one good and the rising price of another good? Well, the method does illustrate the big picture trend: toward a relentless decline of the dollar.

Let's extend it further back in time, to, say, 1980. Today, the dollar is worth one-third of what it was then. Going back further by another 20 years, we find that the dollar today is worth only 13 cents today compared with 1960.

Inflation is adding to the growing despair in the American workforce. Wages are falling. College has become unaffordable; forget working your way through school. Net worth of households is falling in real terms. There is no relief in the terrible employment situation, and there is plenty of misery aside from what the numbers reveal.

People are experiencing a job lock, unable to exercise their basic human right to leave a bad job for a good one, simply because they fear the effects of losing health care and losing whatever financial security they have.

This is why we are seeing ever fewer people quit their jobs, no matter how bad they may be and no matter how despotic their bosses become or how dreary their work lives. This is not a functioning, competitive market. This is a major source of human misery, and one brought on by bad monetary policy.

The money people do have earns next to nothing at the bank, and the value is being stolen bit by bit every day. It's become nearly impossible for people to stay ahead, which is why half of Americans today believe that the future is going to be worse than the present.

In the 1970s, there was near panic about 4% per year inflation. I don't get why extending the effects of that rate over 18 or 24 months somehow means that the problem has gone away. It hasn't. It's just been slowed, like a knife that goes in slowly, instead of all at once. It is still a disaster and nothing that a real free enterprise system can really tolerate. Sound money is as much a pillar of freedom as private property.

And money is not sound. It is nationalized and wrecked by the central bank and its money creation powers. 

The relationship between higher prices and money creation is not difficult to understand. Murray Rothbard liked to use the analogy of a tooth fairy who tried to help the world by doubling the money stock and putting the new money under everyone's pillow. It seems like a wonderful idea, until you realize that every existing unit of money would become worth half of what it used to be. The people would be no better off than they were before.

Analogies like this are useful. Think of a children's party in which there is only enough lemonade for 10 kids. Thirty kids show up, so the host waters down the juice. Have you really made more lemonade? No, you have just divided the lemonade among more people, giving each kid more water and less flavor.

I would like to make a book recommendation that addresses this very point. Hans Sennholz's Age of Inflation is the first book I read on this topic. It blew me away. If you haven't read this book, I urge you to do so.

SO IF A FALLING dollar kills the economy, why does the Fed do it?

It's not rocket science. The money enters into the economy through a circuitous route, starting with the government's favored bond dealers and then through the banking system. The main beneficiaries are the government's friends, while the rest of the population pays the price.

And rising prices are not the only consequence of bad monetary policy. There are other effects, such as booms and busts, massive government debt, the leviathan out of control and the enslavement of the working class to debt and economic cycles.

There was a time following the great double-digit inflation of the late 1970s that there was a new awareness of the inflation threat and its cause. All throughout the 1980s, traders watched money supply data to assess the risk going forward.

This often happens after inflationary disasters. In Germany after Weimar and the war, an ethos of sound money was everywhere alive in Germany. Even today, Germany maintains a more sound policy than other European states, for fear of ever repeating that mistake.

But today in the U.S., it is widely believed that new money creation is the solution to all problems. This is Ben Bernanke's religion. He believes that the whole of the Great Depression was caused by tight money, and he is determined not to repeat that supposed experience (actually, he is wrong even about the policies of the 1930s, but that's another subject).

The worse the economic data, the more the prospect of even more reckless Fed policy. Retail sales are falling again, and rather than reassess the whole "stimulus" idea, the Fed is expected to unleash even more hell and try to convince us that this is good for us.

Inflation is the silent killer of economic recovery, the quiet source of death for the American middle class. Yet what do the market watchers recommend? More of the same.

You know this quote: "Insanity is repeating the same mistakes and expecting different results." It is wrongly attributed to Albert Einstein. It is actually from the 1981 basic manual for Narcotics Anonymous. That's fitting: Inflation is nothing if not a failed form of economic narcotic.


Jeffrey Tucker
Executive editor
Laissez Faire Books
Primus inter pares, Laissez Faire Club

P.S Future generations will be amazed, observing that while inflation ate away our currency, our elites worried about stopping deflation! It's nuts and a diversion.

Helen Clark: “Western Nations 'Don't Need More Cars, More TV, Whatever'”

Happy with her own lot, our former Aunty Helen thinks “we,” i.e., everyone else, could do with less.

Attending the eco-gathering in Rio in her new guise as United Nations Development Programme head, Aunty Helen told media

frankly human development in the West -- we don't need more cars, more TVs, more whatever. Our needs are by and large satisfied, although the recession has put a lot of strains on that.

It sure has. As have earthquakes, tsunamis, tornadoes, bushfires, and bullshit from the likes of her. Tell someone in Christchurch East or elsewhere struggling to make ends meet or to find affordable housing—or to pay their eco-inflated power bills—that they don’t need more “whatever.”

Clark and her fellow would-be world leaders are meeting in Rio to devise new eco-ways by which to bankrupt us, both Clark and her boss Ban Ki-moon saying “moving toward a green economy can be a source of growth, much-needed jobs, investment and export.” Yeah right.

It’s easy to dismiss the eco-fest (sucking in squillions of tons of the earth’s resources) as “cheap New Age green mysticism,” especially when the you read the public “final draft document” for the conference, released not at the end of the conference when you’d expect it but just as the conference is starting (another absurdity in a conference full of them).

Read the final draft document of the Rio+20 conference. You will be astonished by its utter vacuity. It is 49 pages of pap, expressing nothing but platitudes and mawkish sentimentality, with a dose of health-spa green religion. The only thing to interrupt the droning is the occasional vigorous shake of the collection tin for the United Nations and its army of bureaucrats. And prime ministers are sitting there, nodding, clapping and signing this drivel?

Yes, they are.  And because they do think it’s just cheap vote-buying drivel, they’re signing up to much more as well. Which is not just drivel:

It is known that the Rio text includes several items dropped from the Durban text, including proposals for the UN to levy a 2% tax on all financial transactions worldwide, which would cripple the financial markets by imposing costs many times the profits on each transaction…[and other] strange proposals in the Durban text – which gave “Mother Earth” the right to sue Western nations in a new “International Climate Court”, and suggested that CO2 concentration should be halved (which would wipe out most plant and animal species on Earth).

So the figleaf* of “sustainable development” is still with us, even if “a good portion of the activists attending this time are not at all happy with the concept of sustainable development anymore,” and even if the claims for calamity—the desperate pleas for urgency repeated at this conference’s opening yesterday by Wellington teenager and green shill Brittany Tilfordall of which were so prominent at the first Rio Summit 20 years ago have all been proven moot by their non-arrival. Largely absent from the conference this time, for example, is widespread fear-mongering about global warming.

Perhaps because they’ve realised, like former warmist and green religionist James Lovelock, that these fears like all the other fears are just meaningless green drivel.

But dangerous drivel.

* * * * *

* "Sustainability" Chris Trotter reminds us is not just a meaningless feel-good buzzword, it has "revolutionary social and economic implications": It means, he says “that private enterprise must acknowledge the need for restraint: for regulations that are no longer light-fingered but heavy-handed. Sustainability," he concludes, " isn't just a fast track to re-election, it's a clarion call for revolution.”

Wednesday, 20 June 2012

Why Bernanke and the Fed’s Keynesian ‘Paradox of Thrift’ is Bogus

Guest post by Doug French, contributing writer at Money Morning Australia 

U.S. Federal Reserve Chairman Ben Bernanke continues to stand on a stack of Lord Keynes’ General Theory and proclaim that the world needs low interest rates to “fill the gap” in aggregate demand and so bring prosperity to our times.

“The reason to keep rates low isn’t to accommodate congressional fiscal policy,” Bernanke responded during a recent congressional hearing. Consumers benefit from cheaper mortgages and lower interest rates which, claims the Fed head, helps to stimulate the economy,.

When Sen. Bernie Sanders launched into a stem-winding question about the “unequal distribution” of wealth in the U.S., Bernanke quipped, “It’s not so much a question about bringing down the 1%, but bringing up the middle class.”

Right. Only a guy who has spent a lifetime in academia and now government would think he’s smart enough to pull the right monetary levers and push the correct policy buttons to make the middle class richer. His economic worldview even doubts that a richer citizenry will get us out of the great recession.

A few of Dr. Bernanke’s legion of Ph.D. economists have turned out the June issue of the Federal Reserve Bulletin. Inside, you’ll find that the median net worth for Americans fell almost 39% from 2007 to 2010. Of course, “median” means the drop was worse for half the population and better for the other half.

Either way, most Americans are poorer. According to the Fed’s figures, Americans are right back where they were in 1992. GDP went up. Real wages did not. And family debt stayed the same. But what everyone thought were their personal ATM machines back in 2007 – their homes – plunged in value.

For all the hand-wringing and shocked faces this story has inspired, what everyone forgets is that for net worth to rise, people must save more, pay down debt or enjoy increases in the value of their assets.

To Save or Spend

But the good Keynesian Dr. Bernanke knows the central tenet of the Keynesian school is the paradox of thrift, which states that if everyone saves more money during a recession then “aggregate demand” for goods and services will fall. This will lead to more unemployment, which in turn will mean even lower savings.

In the end, the Keynesians believe that this great paradox unleashes a vicious spiral that will take us back to the Stone Age.

The last thing Dr. Bernanke wants is a mass outbreak of thriftiness. The Fed chair wants people to spend and borrow. To buy new TVs. Even bigger houses. New smartphones. Anything, really. And he wants government to do the same. That’s the ticket! That’s progress.

If Keynesians believe their own theory, they should take the fact that net worth has dropped as a positive sign that Americans are doing all they can to spend us all out of the recession.

Boobus Americanus hasn’t pulled in his spending horns. His house may have crashed in value, but he’s still doing his part. He’s keeping his debt level held high. His spending habits firm. Keynesian heroism in light of the fact that, according to the Fed survey, incomes fell from 2007 to 2010.

According to the Fed’s report, the proportion of families reporting that they had saved anything the previous year fell from 56.4% of families in 2007 to 52% in 2010. “That decrease pushed the fraction of families reporting saving to the lowest level since the SCF [Survey of Consumer Finances] began collecting such information in 1992.”

But the Fed’s zero interest rate policy has banks and the government offering mere basis points to savers. Sub-1% interest rates on accounts and CDs have many wondering what’s the point?

Life coach and author John Strelecky urges people to spend the money. To “live your bucket list now.” The interest you would have earned on the money you spend is not enough to compensate a person for the lifetime of memories missed.

“No matter when that two-minute warning ticks off, you could say you did what you wanted to do with your life,” Strelecky says. “Don’t wait until you’re 65 to start spending your money to live a rewarding life.”

James Livingston, author of Against Thrift: Why Consumer Culture Is Good for the Economy, the Environment and Your Soul, claims that under-consumption caused the 2008 meltdown, and that consumers aren’t spending enough to get us out of it. “I’m saying that we need to lighten up and spend more, for our own good,” writes Livingston, who teaches at Rutgers. “If we don’t, we sacrifice ourselves on the altar of productivity and meanwhile sentence our children to a future of pointless repression, denial and delay.”

Economists like CNBC’s Steve Liesman think there is too much saving going on. So does the Chicago Fed’s Charles Evans, who said not too long ago:

It seems to me if we could somehow get lower real interest rates so that the amount of excess savings that is taking place relative to investment is lowered, that would be one channel for stimulating the economy.

Of course, as F.A. Hayek showed, the paradox of thrift is nonsense. Savings provides capital. It is that capital that makes labor more efficient. As capital is accumulated, its cost falls. Entrepreneurs then reorganize capital into more productive capital-intensive uses.

In other words, as people save more and spend less, capital is shifted into building factories, rather than tennis shoes. Labor and prices shift accordingly. Instead of collapsing into depression, the entire system reaches a new equilibrium at a higher savings amount by means of adjustments in labor, capital, prices, quantities, production and consumption.

It is savings and capital (not borrowing and spending!) that create prosperity for both individuals and societies. Chairman Bernanke is doing all he can, and the banks are cooperating, to entice you into giving up on earning decent returns and just buying a new boat or big screen.

Don’t fall for it.

I urge you use your savings to grow (not reduce) your net worth.

Author Image for Douglas French

Doug French is president of the Mises Institute and senior editor of the Laissez Faire Club. He received his master's degree under the direction of Murray N. Rothbard at the University of Nevada, Las Vegas, after many years in the business of banking. He is the author of two books, “Early Speculative Bubbles and Increases in the Supply of Money,” the first major empirical study of the relationship between early bubbles and the money supply, and “Walk Away,” a monograph assessing the philosophy and morality of strategic default. This post posted by permission of Money Morning Australia.

Tuesday, 19 June 2012

Don’t sell the power companies—throw money my way instead [updated]

_NOrman"Selling our power companies is the worst way to go,” says Green co-leader Russel Norman. “ They should instead be supercharged,” says Norman, “so they can develop clean, green energy technology we could sell around the world."


Dr Norman says “"smart, green economics" is the way to go because the international market for sustainable products and clean energy technology is growing rapidly.”

Really? Is that right?

Well, no.  It’s not. Like virtually everything else the Ginger Whinger says, it’s not right. Not right at all. The international market for “clean energy” is bankrupt.  Not just struggling. Not just a little bit bankrupt. It’s completely, wholly and abjectly bankrupt.

imageIt’s bankrupt in Spain where 12 billion Euros were spent in 2009 alone, €571,138 creating each “green job,” and with each “green” megawatt installed destroying 5.28 jobs on average elsewhere in the Spanish economy.

It’s bankrupt in Germany, where even with subsidies 300% higher than conventional electricity generation consumers pay nearly ten percent more—and carbon abatement costs at $1,000 per ton for solar power are roughly fifty times the European price for carbon.

It’s bankrupt in the Netherlands, the home of the windmill, where after billions of euros of subsidies, most going outside the Netherlands, Prime Minister Mark Rutte now recognises today’s “windmills turn on subsidies.”

It’s bankrupt in the United Kingdom, where it raises the cost to consumers by £1.1billion; where for every job created in the United Kingdom in “renewable energy” 3.7 jobs are lost; and in winter (when they’re needed most) Britain’s forest of wind turbines consumes more power than it produces.

So where is Norman getting his news from? Certainly not from Europe. And not from the States either, where despite the combination of Obama’s windy rhetoric and billions of dollars of subsidies “sustainable energy” is still not sustainable--where the White House sank half a billion taxpayer dollars into Solyndra, a company it knew was failing, and did--where the companies Ener1 and A123 Systems floundered after sucking another half-billion from taxpayers--which are dwarfed by the failure of company Solar Trust of America, which failure on its own leaves US taxpayers on the hook for a further $2.1billion!

And these are  just the headline failures. Sterling Burnett lists the whole sorry mess of America’s green energy’s bankrupt blackout, first, the bankruptcies:

    • Beacon Power Corp: Received $43 million in federal loan guaranteed in 2009 and also received $29 million in PA grantsBankrupt in October 2011
    • Ener1 (parent company of EnerDel): Received $118.5 million in federal loan guaranteesBankrupt in January 2012 – has since exited bankruptcy
    • Evergreen Solar: Received $58 million in MA loan guarantees (an undisclosed portion sourced from federal ARRA block grant)Bankrupt in August 2011 with $485.6 million in debt
    • SolyndraReceived $535 million in federal loan guarantees in 2009 and $25.1 million in CA tax creditBankrupt in August 2011
    • SpectraWattReceived $500,000 in federal loan guarantees in 2009Bankrupt in August 2011
    • Babcock and Brown: Received $178 million in federal grants in December 2009 (4 months after it went bust)Bankrupt in early 2009
    • Mountain Plaza Inc.: Received $424,000 in federal grants through TN Department of Transportation in 2009Bankrupt      in 2003 and again in June 2010
    • Solar Trust of America (parent company: Solar Millennium from Germany): Received $2.1  billion loan guarantee in April 2011Bankrupt in April 2012

And the other subsidized “Green Energy” companies in decline:

    • A123: Received $300 million in federal grants and $135 million in MI grantsDeclining orders and have forced multiple layoffs
    • Amonix, Inc.: Received $5.9 million in federal tax credits in 2009 through  ARRALaid off 2/3 of work force
    • First Solar: Received $3 billion in federal loan guaranteesBiggest S&P loser in 2011, CEO fired
    • Fisker Automotive: $529 million in federal loan guaranteesMultiple 2012 sales prediction downgrades for first car release, delivery and cash flow troubles;Assembling cars in Finland
    • Johnson Controls: Received $299 million in federal grants in 2009Low demand caused cancellation of a new factory, operating at half capacity
    • Nevada Geothermal: Received $98.5 million in federal loan guarantees in 2009Defaulting on long-term debt obligations, 85% drop in stock value
    • Sun Power: Received $1.2 billion in federal loan guaranteesDebt exceeds assets; French oil company took over last fall
    • Abound Solar: Received $400 million in federal loans in 2012½ work force laid off
    • BrightSource Energy: $1.6 billion federal loan approved in April 2012 – loan obtained through political connections with the administration; absent the loan, Brightsource’s solar power purchase would have fallen through.

That’s the record so far, and by year’s end once tax breaks on this madness lapse fully one-half of the industry’s jobs will be gone—gone because without the special favours these “green energy” “innovators” absorb more resources than they produce.

So that’s how well “green energy” is doing.  This really is “the worst way to go.”

“Sustainable energy” is not sustainable—not even with subsidies. “Renewable energy” is not renewable—not even by  leaving the taxpayer on the hook for billions.

So why does the media not challenge Russel Norman for continuing to pretend he owns the source to some economic magic bullet?

UPDATE: Liberty Scott makes an excellent point about the Ginger Whinger’s taxpayer-funded referendum:

If the parties that lost the last election can demand that the Government seek an additional electoral mandate to implement the policies National stood on in its 2011 manifesto, then surely the same applies in reverse.
Every time the state buys something with taxpayers' money, it should ask permission…

Scarcity and Intellectual Property, 3: Empirical Evidence of Adoption/Distribution of Technology

Guest post by Dale Halling from the State of Innovation blog.

A NUMBER OF ALLEGED SCHOLARS suggest the logical basis for property rights is scarcity[1], since property rights efficiently allocate these resources and avoid conflicts.  These alleged scholars argue that ideas and inventions are not subject to scarcity and therefore intellectual property rights should not exist.  These arguments seem to be particularly prevalent among Libertarians, particularly those at the Cato Institute and Von Mises Institute, and among the open source community.

In this third article we will examine whether there is a lack of scarcity in the adoption and distribution of new technology.

According to this theory, property rights inhere only in the tangible property rights in land and buildings and personal property rights in things like cars and furniture.  Tangible or physical property is scarce since it can only be owned by one person at a time and it takes resources to create.  According to this theory however, intangible or intellectual property such as patents and copyrights (and software in the case of the open source community, is not scarce) so is not property.  Multiple people may own intellectual property without excluding others from the property.  According to Tom G. Palmer a proponent of the scarcity theory of property:

It is this scarcity that gives rise to property rights.  Intellectual property rights, however, do not rest on a natural  scarcity of goods, but on an “artificial, self created scarcity.”[2]

If Mr. Palmer is correct we would expect that in the absence of intellectual property rights new technologies would be instantly and universally adopted. Let’s examine that.

SCIENTIFIC PRINCIPLES ARE NOT subject to intellectual property rights.  Calculus was discovered over 300 year ago and is not the subject of intellectual property rights.  Despite this even in the most advanced economies only a small percentage of the population understands it.  Even though books on the subject can be reviewed for free at many libraries, those people that do understand calculus generally paid an instructor to learn this area of maths.  Almost everything a student learns through formal education, even in graduate school, is information that is readily available.  Even if the text book is copyrighted, the information is usually available in a non-copyrighted form or available for free from a library.  Despite this the U.S. spends over $500 billion a year on all forms of education.  Clearly, the cost of adopting and distribution ideas including inventions is not free and is subject to scarcity.

According to venture capitalists, most start-ups will spend 2-10 times the amount on marketing their inventions than on developing them.  If the distribution of ideas was free, not subject to scarcity, this would clearly be unnecessary.

University professors, doctors, lawyers, engineers, judges, marketers, sales people and computer scientists are mainly in the business of distributing or implementing known information.  If distributing information is free, not subject to scarcity, then all these people should either be thrown in jail for fraud or paid less than the average day laborer.

The U.S. has historically provided the strongest legal protection for inventions.[3]  The U.S. is not only the leader in the creation of new technology, but has had the fastest adoption and diffusion of new technologies.  Countries that had or have weak patent laws are associated with the slowest adoption and diffusion rates for new technologies.  This is in complete contradiction to the expected result predicted by advocates of the scarcity theory of property.

Those libertarians and open source advocates are clearly incorrect that inventions and ideas are not subject to scarcity.  This scarcity is not artificially induced, since strong patent laws are associate with greater rates of technology adoption and diffusion, not less.

Advocates of the scarcity theory of property are correct that two people can understand the same idea (calculus) without diminishing the supply of the idea.  However, this is not the same thing as both people being the inventor of or discover of the idea.  Just because I understand calculus does not make me the discoverer of calculus any more than understanding how a steam engine works makes me the inventor of the steam engine.  If I were to conceive special relativity without any knowledge that Einstein had already discovered special relativity, this would not make me the discoverer of special relativity.  I did not add any information to the store of human knowledge by my independent discovery.  The same is true of inventors, just because someone independently comes up with an idea after the inventor, does not make them an inventor.  An inventor is the person who adds to the store of human knowledge.  Being second, even without knowing that you are second, does not add to the store of human knowledge or make you an inventor.  The patent laws require the inventor to be the first in the world to create an idea.

THE DEBATE OVER WHETHER property rights are conceptually based on scarcity or based on the right of a person to their labor both physical and mental is not just an academic exercise.  Failure to provide strong legal protection to inventors has severe consequences for our wealth and well-being.  The U.S. in particular does not have the luxury of just adopting other countries’ technology to produce an increasing standard of living for its citizens, it must innovate.  By denying the value of intellectual labor, libertarians have more closely aligned themselves with Marx’s labor (physical) theory of value than with the free market. 

Adopting their approach will result in the same disastrous consequences as has occurred to countries that have adopted Marx’s ideas in other realms.

Dale Halling is an American patent attorney and entrepreneur, and the author of the book “The Decline and Fall of the American Entrepreneur: How Little Known Laws are Killing Innovation.”
Read his regular thoughts at his
State of Innovation blog.

[1] Kinsella, Stephen, Against Intellectual Property  and Palmer, Tom G., “Are Patents and Copyright Morally Justified? The Philosophy of Property Rights and Ideal Objects”, Harvard Journal of Law & Public Policy, Vol. 13, No. 3, Summer 1990, pp. 817- 865.
[2] Palmer, Tom G., “Are Patents and Copyright Morally Justified? The Philosophy of Property Rights and Ideal Objects”, Harvard Journal of Law & Public Policy, Vol. 13, No. 3, Summer 1990, p. 865.
[3] Khan, Zorina B., The Democratization of Invention: Patents and Copyrights in American Economic Development, 1790-1920, Cambridge University Press, 2005, p. 298.

Monday, 18 June 2012

ECONOMICS FOR REAL PEOPLE: “The Incredible Bread Machine”

Yes, it might be exam time, but our friends at the Auckland Uni Economics Group still have a light programme over the exam period. Here’s what’s on offer tonight:

Hi Everyone,
This week we will view and discuss a short film that a former US Treasury Secretary once called "probably the finest effort at explaining in lay terms the economic facts of life..."
This short film, The Incredible Bread Machine, slays a number of economic myths that still exist today, 40 years after the film and book were released, and integrates a number of the ideas we have already looked at this year.
Where: Case Room 3, Level 0, Business School Building
When: Today- Monday, 18 June.
Time: 6pm
Look forward to seeing you there.
Check us out on the web at Facebook & our blog.

Principals Association concedes on league tables for schools?

I found it fascinating this morning listening to Principals Association head Patrick Walsh decrying that parents are taking their children out of “lower decile” schools in favour of “higher decile” schools--with the implication being parents if parents are going to act “selfishly” by using the “decile” rankings to avoid doing as they are told by zoning regulations, then the “decile” ranking should be abandoned.

This is the same Principals Association that objects to the “blunt instrument” of league tables being drawn up by the media based on National Standards. Yet Walsh was willing to concede that if parents are going to have the temerity to judge where they send their own children for eight hours a day, the best thing on which to rely is schools’ reviews by the Education Review Office.

So perhaps now he’s given his imprimatur, league tables could be drawn up by the media based on schools’ ERO Reports? Except, of course, that the ERO Reports are full of mush.

Now that’s what I call a test match!

Some questions arise from that great test match on Saturday night:

How much better is a proper three-test series than yet another round of same-as Tri-Series boredom?

Is that the first time you’ve seen someone felled by a meathead’s challenge (come in Israel Dagg) get up and smile?

If Jonathan Sexton had nailed that last kick, would he ever have had to buy himself a pint again?

Why do coaches feel the need to substitute players just when the team is in the groove and those substituted are going well?

Does Ali Williams have a brain? And how does he still get a game?

Does Piri Weepu have a pass? And why does he deserve a game?

Can Sonny Boy Williams ever tackle with his arms?

How good was it to see a losing captain absolutely gutted, instead of smiling and laughing and talking up “things we can work on”?

Was that one battle enough to redeem Brian O’Driscoll after his disgraceful whinging when he was here as Lions captain?

How many more test matches does Richey McCaw have in him?

If the game was played in the afternoon instead in sub-Arctic conditions at night, would more players manage to hold on to the ball?

Given the means by which the last-second victory was achieved, wouldn’t it have been good to have some brains around the ball in the last few minutes just a few Quarter-Finals ago?

Are you tempted now to try and get hold of a ticket for the last match in Hamilton?

Greeks, French, vote for Germans to keep picking up their tab

Do you want an opinion on the second round of Greek elections?

Oh, go on then.

Well, with two-thirds of the vote counted it seems the New Democracy Party can command about 130 seats in the 300-seat Parliament.  New Democracy is for bailouts and the Eurozone and living beyond their means, but wants to “renegotiate” what it owes and to slow down what it pays back.

New Democracy could technically go into coalition with any of the other top four, either Pasok, Syriza or Independents. Pasok also wants to stay in the Eurozone, also wants to live beyond its means, and also wants to renegotiate the bailouts. But Pasok won’t go into a coalition without Syriza (who oppose bailouts, oppose paying anything back, and want to the Eurozone to keep paying them to stay in), and Syriza won’t go into coalition with New Democracy.


Which seems to mean that there will be a third round of elections sometime not very soon (and maybe a fourth or never-ending round), and all the while and whatever the result Greece’s debts will continue growing, its repayments will continue shrinking, and the Eurozone will continue its collapsing. But by the time of that third election (and maybe fourth) election, there will be bigger disasters that Greece for Europeans to worry about.

They’re called Spain and Italy.

And maybe France, if the newly elected Socialist government really does pursue its own policy of faking reality and sending German taxpayers the bill.

And why wouldn’t they, since it’s worked so well for Greece.

The problem with socialism, as Margaret Thatcher famously observed, is that eventually you run out of other people’s money. But when other people’s money is offered to voters, especially the money of another country’s taxpayers, why wouldn’t taxpayers vote to keep taking it?


imageThis Saturday the 16th of June was Bloomsday—a commemoration and celebration of the trail taken around Dublin by the characters in James Joyce’s novel Ulysses, the events of which all take place in the day and evening of 16th June 1904, mostly through the eyes and interior monologue of Joyce’s greatest creation, Leopold Bloom.

Hence, Bloomsday.

There were celebrations this year from Montreal to Buenos Aires,

imageeven Bloomsday breakfasts featuring Bloom's favourite, "grilled mutton kidneys which gave to his palate a fine tang of faintly scented urine.”
    Manager of Dublin's James Joyce Centre Mark Traynor said tourists would be descending on Dublin to follow in the footsteps of Joyce's most famous protagonist. "What people really want to do on Bloomsday is dress up, read aloud and drink lots of Guinness," just like Bloom himself, who enters a Dublin pub with the words: "I was blue mouldy for the want of that pint. Declare to God I could hear it hit the pit of my stomach with a click."

James Joyce once said his novel Ulysses was meant to provide a picture of Dublin so complete that if the city suddenly disappeared, it could be reconstructed through the book. But Joyce said many things, only some of them seriously.

Ninety years after its first appearance (and seventy after its last ban), Joyce’s novel still divides opinion.  Defending one of my own favourite novelists, Ayn Rand, Objectivist intellectual Harry Binswanger  calls it “trash,”

Joyce's style [alternates] between gibbering wordplay ("mellow yellow smellow") and ponderous, woozy abstractions ("tentative velation"), the style conforming to Plato's dichotomy between perceptual concretes and ineffable abstractions.

Yet another of my favourite novelists, Anthony Burgess, reckons Joyce wrote it “not just to rival classical achievement but to contain it.” Not to dismiss romanticism but to extend it. Not to give meat to cloistered pedants and “bloody owls,” but

to entertain, to enhance life, to give joy… Ulysses is a great comic novel..it is part of a total, cosmic laughter that takes in drains, love, politics, and the deathless gods, and feels guilty about nothing.  Joyce…accepts the world as it is and relishes man’s creations (why, otherwise, glorify and art or science in every chapter except the last?). 

imageIt is ultimately an affirmative journey (the book ends with a "yes", indeed a whole series of them).  Burgess maintains Joyce offers us a challenge, and as Ulysses’s Molly Bloom asserts at the end of the novel, part of being fully aware, fully alive, is saying “yes” to that challenge: “when we have read Joyce and absorbed even one iota of his substance, neither literature nor life can ever be quite the same again. We shall be finding an embarrassing joy in the commonplace, seeing the most defiled city as a figure of heaven, and assuming, against all odds, a hardly supportable optimism.”

A challenge  like that I found too hard to resist, and too resolving the apparent contradiction between the opinions of Burgess and Binswanger, both of whom I respect. So a few years ago I took it up.

It’s not a quick read. And nor would you want to hurry. One reader recounts the challenge:

I first started reading Ulysses in the late 1990s, as an undergraduate at University College Dublin. It seemed so vast to me, like something I'd never be able to crack. There it was with its sepia and green cover, with an image depicting the River Liffey. It was almost as if its size and physicality were mocking my love for the instant gratification provided by frivolous computer games (and my comically short attention span).
    But I dived in. I read it with expert annotations, read it with friends, read it alone, gave up, started again, laughed, cried, and then gave up once more. It became like a friend, though. One I felt I partially understood, and yet would probably never fully know. To this day, I have not read it through over a continuous period. Instead, I have digested it in parts over about five years.

But I have to say, having just started a similar journey, I’m with Burgess. Ulysses I’ve discovered is nine-hundred pages of brawling, sprawling, fabulous, crapulous, life-giving reflection and rambunctiousness.  I hope, like Atlas Shrugged, to enjoy reading and re-reading it for the rest of my life. 

And I look forward to joining a Bloomsday celebration somewhere next year—maybe like the one I missed this year. Bugger.