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It's been a busy summer thus far, culminating in a hectic few days of booking flights to DC, finding an apartment to live in once there, booking a wedding venue, etc, etc. Tomorrow morning Faith and I embark on a tour of South-West France, culminating in 2 weeks at the beach with my family.
I shall be without iBook, concentrating firmly on embarassingly English traits such as wearing socks and sandals, and playing cricket on the sand.
See you in three weeks.
14th-19th August 2005
The Filter^ is delighted to announce that we have joined forces with the Liverpool Schola Cantorum (LSC), and will act as official media partner during their forthcoming trip to Riga.
The LSC is a chamber choir founded by Musical Director Andrew Mellor, a regular contributor to The Filter^ REVIEW.
His efforts with the LSC are a testament to entrepreneurial vision, passionate determination, and a desire to redefine the boundaries of the arts: the singers are all young people from a variety of backgrounds, and are a grass roots organization. They are a perfect arts movement: rich in ability and delivery yet unpretentious and far reaching. The LSC provide an eclectic blend by reinvigorating classical works as well as championing contemporary unknown composers.
The Filter^ is a similarly organic example of volunteerism, and will look creatively to how best we can assist the LSC’s various ambitions, and to ensure that their tour is a success.
Riga 2005 Blog Throughout the tour Andrew will be joined by other LSC members to write regular updates here on The Filter^, within the “Riga 2005” category. We can expect details of their program and reception, cultural tales and anecdotes.
Tour CD The LSC are accepting pre-orders of the tour CD. The Filter^ will offer free samples of their output via MP3 files, but for the tidy sum of £5 you can order a definitive collection of their exploits. All sales will provide a real and appreciated impact on their travels, and here’s the email address for orders.
You can use the button on the top right to get the direct LSC information so stay tuned and enjoy.
Andrew Mellor and Anthony Evans, discussing the LSC and The Filter^
Last weekend Two weekends ago I was walking through Speakers Corner, and hearing how a free and open democracy should process such a horrendous attack: with reason, with debate, and with ideas. Alas, the ideas were odd. When I read Marx, I try to put myself in the context of his time, but this strategy conflicts with hearing a contemporary speaker reciting it as if it’s still valid. He lambastes “the capitalists”; ok, that’s to be expected. He then takes on “the bankers”; I can see how that can resonate with people, just…. but then he attacks “the landlords” – what a joke! Do people on the streets of London really think that landlords are evil? Surely we all know that the chance to rent a property rather than have to buy it outright might help some people, and might help some poor people? Most people in London probably are landlords these days. It’s ok I thought, surely no one buys this.
And then we see that Marx has been voted the Greatest Philosopher. What’s that all about? Was he a philosopher? Was he even right, or is his influence only a self-fulfilling prophecy fuelled by mixed up loudmouths?
So I’ve been thinking back to the guy in Speakers Corner, and if that’s the reason Marx is taken so seriously. Something he’s saying, must be resonating. One of the things mentioned was how financiers “gamble on the stock market” everyday. Is that novel?
I was under the impression that the very point of a stock market is to gamble, and to bet. Isn’t that why it’s good? Of course it’s a rhetorical ploy to compare it to a Casino, as if “the house” always wins, and the innocent get taken along, and exploited, and abused. But uncertainty abounds, and we need to reduce it. That can be done when people assign probability to potential events, and transform that uncertainty into a risk, which can be traded. Some people expose themselves to high risk, but they’re the ones who might get the big payout. Whatever your preference, you can use financial institutions to either borrow against the future, or earn a return on your savings. Do people really want to use their pillowcase?
I bought an iPod shuffle recently, because "I like uncertainty" - not at all, I know full well that there's a 5/63 chance that the next track will be S Club 7. It's not random, it's not scary... it's quantifiable, and tradeable.
The stock market is great because it is a mechanism to quantify uncertainty. It helps us to plan, and to calculate. And it’s made (relatively) efficient because of those arbitragers who spend their lives buying low and selling high and ensuring that the capital needed to expand is generated. Pity the countries without means to do this, stuck with the value of their mortar and little more. Betting markets are awesome generators of information, because people have a financial stake in their actions. The old “put your money where your mouth is” is an effective means of predicting the future. You think that X will happen? Bet on it, because if you’re not willing to risk a few quid on being wrong, why should I listen? Talk is cheap, and in the real world action means exposure to risk, and means to deal with that.
Few people keep making stupid bets, but alas many people keep saying stupid things.
Yes, the stock market does resemble a betting market. That’s the whole point, and that’s why it’s good. So shut up.
Since it is a muscle like any other, the brain requires attention and exercise. Sudoku is a game of reason and logic, deceptive in it's simplicity and contagiously addictive. The rules are simple:
Fill in the grid so that every row, every column, and every 3x3 box contains the digits 1 through 9.
P.S The Samurai Su Doku is bloody hard. No chance...
Economics is about how social phenomena can lead to unintended consequences, asking which means might be most appropriate for the attainment of a given end. Charity is about trying to help people, or to promote projects. So the role of economic theory with regard to charity, is to ascertain whether our heads agree with our hearts: will the things that make us feel good, actually work?
Whilst in Cluj, we ate at several pleasant restaurants. I often encountered high quality service amidst a delightful atmosphere and wanted to tip heavily. Surely the waitress would appreciate a 30% tip, and to me that amounts to a tiny fraction of what a similar standard of meal would cost in the US or UK. But who else might be affected by this incident? This practice might well lead to a rise in the price of restaurant meals, forcing local people to switch from the nicer places to ones more affordable. Perhaps a divide will emerge between lavish visitors in the town centre, and residents moving toward the outskirts. My intention was not to displace those who for which this was home.
Also a large tip will increase the incentives for people to work in the hospitality industry. At one level, this might just lead to an increase in jobs, as previously unemployed people find work in expanding restaurants. However a more problematic outcome might be that previously employed locals switch jobs in response to the change in relative wages, and we see a diversion of labour from industries such as teaching or nursing toward bar staff. That might sound a little hypothetical, but I know that it happens.
I didn’t want to raise prices for local diners, and I certainly didn’t want to make it harder for schools and hospitals to attract staff.
With the best possible intentions, bad outcomes can emerge.
In the wake of the Tsunami last year, many people lauded the generosity of private donations to charities directly involved in the relief efforts. I expressed reservations (here and here) about those charitable donations, on the grounds that micro-management tends to be a bad thing. My local grocer is good, because he filters out inefficient and wasteful suppliers to offer me a restricted, yet high quality menu of choices. He concentrates on reducing my transaction costs of search, and this specialization underpins prosperity.
When it comes to charity, it is a sign of an underdeveloped, and inefficient market if private citizens channel donations to small-scale projects.
Surely we’d be best making a sustained subscription to reputable agencies like Medicin Sans Frontier, or Amnesty International, or the Red Cross (or I dare say just sit back content that our taxes fund the UN…) and allow those experts to divide up the funds. The worst thing would be to let media sensationalism divert scarce funds from where it’d better be spent.
But how able are those agencies at allocating donations? They all appear to be “not for profit”, and that worries my instincts. I recently spoke to a Romanian chap involved in the privatisation of their old industry, and he put it quite well. He said that you shouldn’t put jobs before profit, else you’ll go bankrupt. Profit before jobs, is the only way of providing either.
And my reservations about the organisations that channel charity have some genuine grounding – there are tales that Tsunami money is yet to be spent, and many aid agencies can struggle when their resources exceed their planning.
To wrap things up, then, I’ve expressed concerns about the efficacy of the donor deciding just how their donation will be spent, and I’ve also raised doubts about the ability of larger charities to cope and prosper as financial institutions. Does that mean I’ve merely justified abstention? Am I saying that our efforts are futile?
No. Charity should be promoted, championed and encouraged where possible. It should be monitored by the donor to ensure efficient use of funds, and that’s best done when the donor pays directly – with their private money, and voluntarily. And to whom should we donate? In a free market system we can be confident that the largest firm is providing a pretty good service. In a more regulated state, the visible firms might merely be those most acquitted at circumventing regulations. In the charity market - where firms profess a desire to be as least market driven as possible – it’s all the tougher. For a more concrete recommendation/suggestion of who to support, stay tuned….
We returned to London on Sunday morning, for Faith’s (successful) US visa interview. Obviously there was disruption on the tube, but we were neither fazed nor daunted by passing through Edgware Rd to our hotel in Paddington. As the tabloids splashed tales of precedent, my overwhelming impression of the atmosphere in London was one of defiance, and normality. It appears that England has now encountered suicide bombers on home soil, but I fail to see how life has changed in any fundamental sense. We have not become exposed to a new type of terror; regardless of the destiny of the bomber, every vehicle, rubbish bin or building is (and for a long time has been) a potential target. We sat for a beer outside Alexander Fleming’s local, wondering if our sense of safety was any less than it had been back on Wednesday. A quick memory of Admiral Duncan, and of course nothing has changed. We - a free and open society – will always be targeted, and we will always persevere.
As most Filter^ readers will know, I am a passionate advocate of free trade, and that means that I believe people should be free to cooperate with others regardless of their nationality. Any form of managed trade will inevitably attempt to shift wealth from some groups to others – whether that group is defined by occupation or nationality – and burden the importance of nationality and borders. Free trade campaigners see borders as nothing more than arbitrary political fault lines, and that characteristics of individuals should be treated with more attention than the characteristics of groups. In other words, that human rights should take precedence over national interests.
I say all this to underline my concept of nationality. “Britishness” to me means nothing more than a sort of soft patriotism we feel at a school sports day: cheering for someone - or something - is fun in itself, but we should never attach more significance to it than that. And we should certainly be open minded as to who belongs to this “Britishness”, and the terms within which we define it. I have a varied cultural background, and feel at ease dabbling with different patriotisms (some have called me a mongrel), so when we’re dealing with a “nation”, I have a very flexible conception.
Over the last few days I’ve received messages from friends in America and Romania, sending me condolences. It’d be brutish and churlish to not play along, but by accepting gestures of goodwill, on behalf of England, I’ve been feeling very unlike my usual position. When this is coupled with the fact that I’ve spent the last few weeks living in Bucharest – a city without much cultural diversity – I found myself encounter an obscene and embarrassing frame of mind, which I shall share.
On Monday morning I went into a corner shop just yards from Travestock Place to buy a few items, and was served by Muslim lady. My initial reaction was to go into mourning mode, and graciously accept her sympathy for what had happened to my country. Fortunately it only took a millisecond to realise that I’d been suffocated by how the media has been mutilating our “national sympathy”, and had been momentarily transformed from a multicultural humanist into an ignorant bigot. She was clearly a Londoner – someone who lives in the city, works there, and was maybe even born there (but that’s wholly irrelevant.) I was trespassing on her grief. I’d been duped into thinking that because I was born on this island, and am white, that somehow I was somewhat affected. The fact - and this is a beautiful fact – is that millions of people live in and visit London: it is one of the most cosmopolitan, diverse, lively, I dare say free cities in the world. All sense of nationality becomes obsolete. Pausing at one of the bombsites to read messages and gaze at photos of the missing one is struck by the almost perfect political correctness of the victims. Advertisements all tend to make sure that they have each and every minority represented, lest they be accused of racism. We’ve all become happily immune to the oddness of seeing a white man, and black man, a women, an asian, a homosexual and a rambler…. all acting as best mates and wearing nice sweaters….
But the photos of the missing actually do provide a pretty spectacular cross section of society. The victims are indiscriminate, bound purely by their location. The bombing, apparently, backfired.
A three part series on Channel 4 is looking at the issue of class. On Sunday Michael Collins looked at the Working Class, and how they’ve turned from “salt of the earth” to “scum of the earth”. I found his analysis unconvincing.
Collins is a native Londoner, and felt sufficiently grounded to offer his perspective from the inside. We were constantly reminded how “they” portray the working class somewhat from a distance, whereas here we were hearing the views of a genuine member. This (supposedly) wasn’t Pulp’s “Common People”, and it wasn’t Polly Toynbee going off to live as a poor person for a while, just so she understands what it’s all about. Bollocks; I couldn’t even grasp who “they” really are. Surely it’s the media? And isn’t Collins a member of that class? I’m not sure he’s an insider at all.
I suppose it depends on what your conception of class really is. Are we referring to a socio-economic status, the occupation of your parents, or merely a frame of mind?
For a genuine analysis of class in Britain the series should look at how accurate the working/middle/upper distinction really is. To accept that trilogy as the categorization of the series merely ignores the issue at hand, and permits pretentious media-types to offer facile and egotistical opines about society. By definition, the working class can never be narrators on film.
Faith and I flew into Heathrow on Wednesday afternoon, and faced the unenviable trek of crossing rush hour London with a heavy load. The combination of the Olympic decision and the start of the G8 summit meant that due trepidation was given to engaging in such a terrorist target, but needs must. Through central London and up to Euston for an evening train to Liverpool.
For the last two weeks in Bucharest our apartment has been without hot water – all adding to the experience, and nothing to complain about – but it felt homely to arrive at a friends in Rock Ferry for a shower and beer before bed.
It was weird, to watch the newsflash announcing the carnage that was erupting in the very places we’d travelled through the day before. That irrational uneasiness about using the tube had become very real.
My initial and lasting reaction to watching the days events unfurl was “is that all you’ve got?” Without making light of the loss of life, (for any casualty in any war is to be mourned,) we have been waiting for this, and I for one feared worse. About 4 years ago I was in the toilets of the National Theatre, during the interval of a play about an American plane crash. A rumour circulated the room, and a text message from a housemate alerted me to a serious and defining moment but it was only after the play finished and I saw a copy of the Evening Standard that I realised that two planes had been hijacked and flown into the World Trade Centre. That day, back in September 2001 I made my way through the city amidst armed police and worried civilians, straight to Waterloo for a train home to the New Forest. I was thinking that London will be hit, sometime, somehow, and it will be similarly huge. Today wasn’t a patch on 9-11. It would be an insult to the people of New York to claim parity, and that London suffered a smaller hit gives me hope. Over thirty people have died, and the entire public transport system was suspended but the extent of the attack was 4 bombs. No more than the IRA have done previously, and no more than any committed and intelligent group of people could inflict should they desire.
If this was the best they could do, then we are winning. Their “attack” was lame, and shall be soon surmounted.
One final point.
Whenever I visit London I do my best to walk. On Wednesday our heavy luggage dictated our mode of transport, but ordinarily I’ll travel a pied. It gives one a perspective of a city, and permits us to piece together. On the tube a few days ago I saw a sign about Covent Garden, urging passengers to walk from close stations rather than add to the crowds at the nearest. There was also a map of the line with caricature pictures of local landmarks, showing you just what you were travelling underneath. Clearly London Underground has the same thought that I do – people become dependent on the tube to the extent that they forget what lies above. They think so fully in the iconic tube map that they lose all perspective of genuine distance. Yesterday, when forced to abandon the tube it was interesting to see how stranded people were – even though they could clearly walk to their destination. Will Self made this very point on This Week, commenting on a women who spent 4 hours stood at a place just half an hour from her destination. Mass transit is always going to be a target, and we should learn two things from today. If this is their best, then we are winning; and don’t become passive to the risks of public transport, or the delights of perambulation through the organic and leafy streets of the greatest city on earth.
I remember a wave of bush fired sweeping through Queensland, the last time I was in Australia. (I was staying with family in Perth, just Southeast of Yorkshire….) The searing summer sun had left woodland dry as kinder, and several carelessly disposed cigarette buts had wreaked untold damage. The Chief of the local Police force was on the Channel 9 news, saying something to the effect of:
“If anyone sees any person throwing a cigarette out of their car then you have my support in doing whatever you want to them. I’ll promise to make sure any laws get passed so that you won’t go to jail for giving them a kicking”
In an Economist article called Murder and Market Forces we see a similar example of Australian culture. A spate of killings has turned Melbourne into a battleground between drug lords, and reprisals and retaliation mean that many big name criminals have been murdered. The Office of Police Integrity has been set up to look into matters, but supervisor George Brouwer doesn’t seem too perturbed. He sees the gang murders as:
“an example of unbridled market forces at work”
As I hinted at it in my recent post, Austrian Economics has been most recognized in two areas: the socialist calculation debate, and business cycle theory. A nice example of the latter can be found in a leader in last weeks’ Economist:
“No wonder that the Federal Reserve is starting, belatedly, to fret about house prices. By holding interest rates low for so long after equities crashed, the Fed hoped to inflate house prices. This prevented a deep recession, but it may have merely delayed the needed economic adjustment.”
One can push down on an airbed to suppress it, but you only create a bigger pocket of air elsewhere.
Austrian Business Cycle theory is not a complete explanation of macro management. But when house prices begin to really fall, and people lose a lot of wealth, I am sure there’ll be much criticism of “capitalism” or “the market”. Be very warned that the real reason behind the house price bubble is the engineering of those too stubborn and controlling to leave free the complex economic ecosystem. Prevention may be impossible, but delay is not a cure.
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