We are not all that decadent
The Financial Times 28/12/05
I can grumble as well as anyone else about inconveniences of modern life. Whenever I hear the word "online" I feel like screaming at the organisations who try to bully one into doing everything from buying a train or theatre ticket to reading a government policy document in that way... Nor am I happy to see the disappearance of the adverb "well" and its replacement by the adjective "good" as in "How are you today?": answer: "good". I also mourn the disappearance of the accusative "whom" and its replacement by the ubiquitous "who"... But then I reflect that the English language was almost certainly changing far more quickly in Shakespeare's time. A casual inspection would suggest that there are more serious book shops than 50 years ago and more young people can be seen reading books in trains and buses to the detriment no doubt of evening paper sales. My own view is that for all the maddening irritations of computerised existence there has never been a better time in which to live...more |
A case for taxing land
The Financial Times 09/12/05
To my mind, the key to success on land tax is a degree of cross-party consensus. I am not one of those always calling for coalition or for parties to sink their differences in the national interest. Those who do so neglect the value of competition, which is as important in political as in commercial life. But there are certain structural policies that are only effective if they are expected to last. If the promised policy re-examinations of both opposition parties mean anything at all, they should be prepared to examine land taxation on its merits...more |
Here's to longer lives
The Financial Times 25/11/05
If we worry about the shrinkage of the denominator of the dependency ratio – that is, the number of people at work – we need to look at immigration. Possibly, immigrant birth rates will eventually fall towards those of indigenous populations. But the process will take several decades and allow OECD countries more time to adjust to changing age ratios. Of course, wider social considerations are involved here, but so they are in nearly all aspects of policy towards ageing.more |
Myth of the twin US deficits
The Financial Times 11/11/05
According to Will Rogers, the American humorist: "It's not what we don’t know that hurts us, it's what we know that ain't so." A striking illustration is the preoccupation with the twin US deficits; budget and current balance of payments. The conventional wisdom is that these are mirror images of each other. The payments deficit reflects an excess of investment above domestic saving and the budget deficit is one main source of negative saving. Alas, nothing is sadder than when a plausible theory is falsified by awkward evidence...more |
If we assume a ‘closed economy’...
The Financial Times 28/10/05
We are in the end left with a political paradox. Free trade still benefits the world as a whole, even if not all of it all of the time. The most likely losers are in the old industrial west, which means that the emerging world must be gainers by that much more. Yet the armies of anti-globalising protesters base their case on the supposed harm to poorer countries. There is something wrong somewhere...more |
Money makes a comeback
The Financial Times 14/10/05
Something is changing in policy doctrine. After a couple of decades in which the money supply almost disappeared from view it is now coming back. It is far too early to say exactly how or in what form. But there are numerous straws in the wind...more |
The problem with Tory ‘modernisers’
The Financial Times 30/09/05
When it comes to the likely main contenders we are left with Kenneth Clarke, warts and all. My main present disagreement with Mr Clarke has nothing to do with Europe. It is that I cannot fully share his admiration for the supposedly impartial civil service of pre-Blair days which was responsible for so many disastrous errors, especially in foreign policy. But I am not looking for a clone, simply someone who beats the alternatives...more |
Don’t beg Opec cartel for more oil
The Financial Times 16/09/05
The most important thing is for Group of Eight countries to avoid negotiating in a begging posture with Opec. Whatever the short-term attractions of such a course, it tends to legitimise the cartel, politicise the world economy even further and multiply all the difficulties we face...more |
Budget deficits and noble lies
The Financial Times 02/09/05
Having assailed the conventional wisdom on national savings on August 5, I now turn to the budget deficits which horrify so many orthodox commentators. This horror reached a peak in the UK in the recession of the early 1990’s when the high borrowing of the then chancellor Norman Lamont in the early 1990’s came under attack both from the puritan left and from the financial right. The issue came up again when the now defunct Growth and Stability Pact was negotiated for the European Monetary Union. Moralistic outrage is not enough. When large successful economies like that of the US run large budget deficits for many years critics can no longer get away with pretending that the economy will collapse every time the national finances go into the red. There is however a prevailing economic orthodoxy which purports to draw the safety limits of safe government borrowing...more |
Truth, bullshit and economics
The Financial Times 19/08/05
There have been two recent works by philosophers on Truth and On Bullshit. The first is by Simon Blackburn of Cambridge (published by Allen Lane) and the second by Harry G. Frankfurt of Princeton (published by Princeton University Press). Inevitably the bullshit book has attracted more popular attention, although the book on truth is more important...more |
Advice for Paul Wolfowitz
Contribution to International Economy Symposium
If I may add my own gloss, it is not only to refuse all aid to unnecessary arms programmes and prestige projects of all kinds such as dams, which often attracts an unholy alliance of self interested corporations and Third World lobbyists. But go further. It will mean not only refusing to finance such projects themselves, but cutting off governments who misuse development funds to divert money into these projects. This advice will not make you popular with business, but you will only have one chance...more |
The myth of national savings drives
The Financial Times 05/08/05
Since ancient Babylon, preachers, prophets, kings and politicians have been exhorting people to do other than what comes naturally; and often they are wrong. Today I want to tackle the myth of national savings, or our patriotic duty to consume less than we feel inclined to do. The present discussion is far too "micro" and excessively focused on pensions...more |
A Chou en Lai verdict on Gordon Brown
The Financial Times 22/07/05
I hate to disappoint political commentators who would like an analysis in terms of Gordon Brown's personality quirks or his relationships with Tony Blair, but the verdict of history on the Brown experiment is likely to depend on unforeseeable international developments. To take but one example: too big a fall in the oil price would put British overseas earnings at risk, while too large a further rise could jeopardise the chancellor's inflation target. And I have had no space at all to discuss the interaction with the dollar. Thus my verdict on Gordon Brown is similar to Chou en Lai's verdict on the French Revolution: "It is far too early to say" ...more |
An antidote to global salvationism
The Financial Times 08/07/05
The whole package is the accepted wisdom not only of pop stars but of most of the arts world as reflected in broadcast discussions and plays, films and novels. G8 leaders have been flirting with it; and many business leaders are afraid to criticise it. The Austrian-American economist, Joseph Schumpeter, wrote in the 1960’s of businessmen who were lions in the boardroom but lambs in the drawing room. He would now have to say that they were lambs on the platform or in television studios and often putty in the hands of their speech-writers...more |
China's currency is its business
The Financial Times 23/06/05
Western statesmen have every duty to remind Chinese leaders of their still appalling human rights record – from the Tiananmen Square massacre to the occupation of Tibet and the continued veneration of Chairman Mao, who has been exposed as a killer on the level of Hitler and Stalin. Unfortunately, they have gone quiet on these issues and have instead lectured the Chinese on the need to revalue the renminbi...more |
Expansion with a safety catch
The Financial Times 10/06/05
M le Président, Open letters are best avoided. Perhaps I can plead as an excuse our past friendly conversations in Paris and my belief that there is a modest way in which you can contribute to the strengthening of European institutions and the European economy after the "shock" of the rejection of the proposed constitution by two core members...more |
Britain's economy needs to cool
The Financial Times 27/05/05
The electorate probably values stability above rapid growth. But an attempt to maintain unvarying quarter-to-quarter advances risks putting the economy into a straitjacket and is at variance with the "flexibility" that the chancellor normally preaches. The last MPC minutes showed clear divisions of opinion...Some "doves" were clearly itching to get interest rates down. They should constrain their impatience and remain in the dovecote...more |
The cost of contentment
The Financial Times 14/05/05
Review of Rich is Beautiful: A Very Personal Defence of Mass Affluence
The novelty of Richard North’s book is that he embraces affluent mass society, knows what he is talking about and is highly entertaining to boot. The book has on its cover a photograph taken by the author entitled “Woman and Poodle at Motorway Services, France 2003â€. He celebrates the modern shopping mall and remarks that more people are better off and “working out how to respect each other†than at any time in history. He notes that “people do not seek happiness. If they have any sense... they seek drama, risks, inner peace, success, applause, wealth, power, goodnessâ€. To oppose this “seems curiously life-denyingâ€...more |
Democracy alone is not enough
The Financial Times 13/05/05
Ultimately what matters is not counting heads but a society where people are free to lead their own lives without fear of either the government or what their neighbour will say. This was labelled by Karl Popper as the Open Society - none the worse for being difficult to define precisely...more |
This demeaning race to the bottom
The Financial Times 29/04/05
One must pray that the Lib Dems will have the sense to use any leverage they may have in the next parliament for the only purposes that can unify the "social" and the classical liberals, namely civil liberties and electoral reform. If they downgrade the latter in favour of so called bread-and-butter issues they risk becoming just a dissident appendage of Labour, just as the National Liberals of the inter-war and postwar years became of the Conservatives...more |
Surfer's delight
Review of Promoting Income Security as a Right: Europe and North America
Citizen's Income Newsletter Issue 2, 2005
A rich and humane society can afford a minimum subsistence income for everyone without imposing conditions and obligations. If everyone has a basic sum on which he or she can fall back either in times of adversity or in order to withdraw partly or fully from the normal labour markets in order to engage in some less rewarded activity whether altruistic, artistic or personal, a few of the beneficiaries may well choose to become California surfers. I would argue that he or should be able to do so in a free society and that the cost of such dropping out to the rest of us is unlikely to be intolerable. But to say that the California surfer has a right to his activities is carrying the concept of right a bit too far...more |
Letter to The Spectator
The Spectator
It is a sound convention that authors do not take issue with reviewers. But part of the same convention is that reviewers refrain from inaccurate or misleading accounts of what the author has written...more |
A tax idea that cannot be buried
The Financial Times 15/04/05
No one should underestimate the hue and cry that the idea of a land tax - which would have to be brought in gradually - would provoke from thousands of vested interests. But this only makes it all the more desirable for advocates of this tax to avoid promising the moon and to link up with the general economic debate rather than forming a cult...more |
Best books
The Week 02/04/05
The Magic Mountain by Thomas Mann (June 2005: Everyman £14.99). Two characters battle in an alpine sanatorium for the soul of a young engineer. One, a would-be Jesuit named Naphta, believes in discipline, the renunciation of the ego, the curbing of the personality. His antagonist is an Italian liberal named Settembrini, who favours beauty, freedom, gaiety, the enjoyment of life...more |
Two different ideas of democracy
The Financial Times 01/04/05
There are at least two different concepts of democracy. One is that it is a balancing of interest groups. On this basis you need to bring together farmers, industrial workers, merchants, capitalists and all the other main actors in the economic game. Into this interest group conception "Social Europe" fits very well. The other conception of democracy focuses on the general interest. This need not mean the idea of Rousseau that there is some kind of superior general will over and above the will of individual citizens. What I have in mind is more specific. It is possible to have a "fair" balance between all the different interest groups and yet leave the consumer and the voter worse off. ..more |
The tax burden will rise anyway
The Financial Times 18/03/05
My first reaction to Gordon Brown's ninth Budget was relief at the restraint exercised in a pre-election period. It is for all intents and purposes a neutral Budget. Modest reliefs are paid for by bringing forward North Sea oil tax payments and tax avoidance measures. My second reaction was that the chancellor was passionately sincere in his desire to establish a more prosperous and a more equitable society, both here and abroad. He has not lost, however, his disinclination to give any credit to his predecessors...more |
The Bank should act soon
The Financial Times 04/03/05
If the Bank does not act next week it will find it difficult to raise rates in April, if it is to avoid the charge of undermining the government in the run-up to a May 5 election. But it will be difficult to raise them in May or June without being accused of deferring action to help Labour. No less an authority than Ed Balls, the chancellor's closest adviser, has given the green light for acting soon...more |
Why you should vote Lib-Dem
Based on article in Evening Standard 28/02/05
In going for the Lib-Dems I am under no illusion that they are the party of Gladstone and John Stuart Mill. But at least they are different from Labour and Conservative; and there is nothing wrong in voting for negative reasons. In the past I have shrunk from supporting them because they looked too much like the unreconstructed Old Labour of the 1980s. But since Gordon Brown’s large increases in public service spending, they have found less mileage in that direction; and the recent Orange Book from the still-too-small free market wing of the party suggests a move in the right direction, as does the appointment of the eminently sensible Vincent Cable as their shadow chancellor...more |
The spectre of intrusive regulation
The Financial Times 18/02/05
The Communist Manifesto of 1848 began with the words "A spectre is haunting Europe - the spectre of Communism." Today it is haunted by another spectre, that of excessive and over intrusive regulation...more |
 Against The Flow: Samuel Brittan's new book
Atlantic Books - Order through Amazon
"Samuel Brittan has been one of the Financial Times' leading columnists for nearly thirty years. He has also advised numerous Chancellors of the Exchequer on economic policy. Against the Flow collects the most important of his writings from the last three decades. Taken together the pieces in Against the Flow amount to a robust defence of classic liberalism"...more
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Why long-term bond yields are low
The Financial Times 04/02/05
The behaviour of bond prices is puzzling the financial markets. The US Federal Reserve has for some time been gradually raising the Federal Funds rate from the 1 per cent of a year ago towards what it regards as a more normal level, reaching 2.5 per cent this week. Yet, paradoxically, long term bond yields have continued to fall. In the US, they reached a high of 4.7 per cent last summer and have since dropped by about half a percentage point. There is little doubt that interest rates - international as well as US ones - are low for what is regarded as a recovery phase of the business cycle. Having at last abandoned their more unrealistic expectations about equities, some investors are unhappy that bonds do not offer a promising alternative...more |
A heretical view on the dollar
Financial Times 21/01/05
What then would I do? Stick to President George W. Bush's intention of gradually halving the US budget deficit, but no more than that. Meanwhile, the dollar should be left to its own devices unless there is such an overshoot in either direction that central banks are confident they can make a profit from intervention - an operation in which those responsible should be made to take a personal equity stake. But above all, stop the pressure to get east Asian countries to revalue...more
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The end of the cult of the equity
Financial Times 07/01/05
This is only the second time I have ventured into discussing the stock market, which is decidedly not my speciality. The first time was on May 13 1999, when I warned that most of the optimistic noises about the Wall Street boom of the time were “nonsense on stilts“. I do so again for a second time - and with a minimum of stock market technicalities - because I fear that the period of ultra-rapid equity growth is over and that this possibility should at least be taken into account by policymakers and investment managers...more
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