William Burroughs

vollmerLast week would have been the 99th birthday of William Burroughs. A great writer (in patches) and a key member of the Beat Generation Burroughs was also infamous for killing his wife, apparently accidentally, in a drunken reenactment of the old William Tell trick but with a pistol.

I loved all things Beat Generation as a teenager but it’s difficult, looking at it now, not to feel sorry for the women like Joan Burroughs who were caught up in it. None of them achieved the artistic success of the men, Burroughs, Jack Kerouac, or Allen Ginsberg. Reading Kerouac’s books now you wonder if that wasn’t because they were too busy doing all the cooking and cleaning for their oh-so-creative menfolk. The women in Beat novels are generally maids or whores, preferably some convenient combination of both. Those who aren’t, who want something more for themselves and the children the Beat writers occasionally father (and generally abandoned) come out of the Beat novels as pushy harridans cramping the guy’s creative style.

So, as I got older, one of my favourite pieces of Beat writing became Allen Ginsberg’s poem Dream Record: June 8, 1955. It is one of the few looks at and acknowledgements of the women behind the Beat Generation, who fed and watered the men, almost always anonymously and often at great cost. I figured Joan Burroughs “leaning forward in a garden chair, arms on her knees” deserved remembering today just as much as the famous man who killed her.

A drunken night in my house with a

boy, San Francisco: I lay asleep.

darkness:

 

    I went back to Mexico City

and saw Joan Burroughs leaning

forward in a garden chair, arms

on her knees. She studied me with

clear eyes and downcast smile, her

face restored to a fine beauty

tequila and salt had made strange

before the bullet in her brow.

 

      We talked of life since then.

Well, what’s Burroughs doing now?

Bill on Earth, he’s in North Africa.

Oh, and Kerouac still jumps

with the same beat genius as before,

notebooks filled with Buddha.

I hope he makes it, she laughed.

Is Huncke still in the can? No,

last time I saw him on Times Square.

And how is Kenney? Married, drunk

and golden in the East. You? New

loves in the West–

 

      Then I knew

she was a dream: and questioned her

–Joan, what kind of knowledge have

the dead? can you still love

your mortal acquaintances?

What do you remember of us?

 

      She faded in front of me–The next instant

I saw her rain-stained tombstone

rear an illegible epitaph

under the gnarled branch of a small

tree in the wild grass

of an unvisited garden in Mexico.

– Allen Ginsberg

This article originally appeared at Middlebrow Magazine

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Three questions about North Korea

Kim Jong Un

Kim Jong-il, former leader of North Korea and, since his death in 2011, Eternal General Secretary of the Worker’s Party of Korea, was generally considered a wily, if oppressive, old fox. When, inevitably, North Korea’s communist economics periodically led to famine, Kim II would rattle his sabre just enough to prod the West to buy him off with a little aid. As weird as he might have looked and as twisted as the society he ruled may have been, Kim II could be seen in this light as a rational actor on the diplomatic stage.

As his successor, his equally funny-looking son Kim Jong-un, engages in a prolonged and particularly bellicose bout of belligerence, the first question is whether that assessment also applies to him. Is Kim III a cynic or a lunatic?

It’s a question we can ask about North Korea more generally. When Kim II died in December 2011 many in the West giggled at the bizarre scenes of hysterical grief among the citizenry captured on camera and beamed around the world. Surely, we thought as we saw North Koreans bashing themselves over their heads and howling, they were doing it for the benefit of the gun-toting guards just out of shot. Maybe they were. But there’s a scarier possibility: they actually meant it.

North Korea, not Sweden, is the ultimate welfare state; no government promises to be so all-encompassing in providing for its people. Beyond its borders, so North Koreans are constantly told from birth, lie Yankee Imperialists and their Japanese and South Korean lackeys who are hell-bent on crushing North Korea and liquidating its people. The state, controlled by the Workers Party of Korea, and headed by Chairman of the Central Military Commission, Supreme Commander of the Korean People’s Army, First Chairman of the National Defence Commission, First Secretary of the Worker’s Party of Korea, and Supreme Leader Kim Jong-un (ably assisted by his dead father and grandfather who is Eternal President of the Republic), is all the protects them from annihilation.

North Koreans also depend on the beneficence of the State, Party, and Supreme Leader for their daily bread. From the moment they are born they are taught that they are clothed, fed, and housed at the “grace of the Chairman”. The state is the only guarantor of the welfare of North Koreans, from cradle to mass grave.

So to the average North Korean the death of Kim II probably did represent a calamity of existential proportions. These are people who have been reduced to a state of total, helpless, physical and psychological dependence on the unholy trinity of State, Party, and Leader which, like the Holy trinity, are actually all the same thing. North Koreans were suddenly faced with what they had been told was impossible, life without the Supreme Leader, and, like dependents everywhere, they collapsed mentally.

Whether Kim III is cynic or lunatic, the key to dealing with him lies with China. Without Chinese military intervention in the Korean War in 1950 North Korea would have been strangled at birth. Mao Tse Tung called the relationship between the two countries “as close as lips and teeth” and it is widely thought that what passes for North Korea’s economy is entirely dependent on Chinese aid.

If this is so, China can flick the switch on Pyongyang’s life support whenever it likes. And, if that is so, you have to wonder why they don’t, why they continue to tolerate North Korea’s behaviour.

A North Korea which is pliant to Beijing but plausibly dangerous to everyone else could actually work quite well for the Chinese. If the United States ever feels compelled to resolve the North Korean issue with a degree of finality it will need Chinese assistance or, at the very least, approval. The more dangerous North Korea is deemed to be the more Beijing can ask in return for giving it up. Is it a coincidence that North Korea is kicking off just as tension mounts between China and Japan?

This, however, all hinges on the answer to the second question: how much control does the regime in Beijing have over the regime in Pyongyang? It’s possible the answer is none or less than we think and that North Korea truly is a rogue state. Then we return to the first question: is its leader cynic or lunatic?

Either way the road to Pyongyang runs through Beijing. The third question is what will be the toll?

This article originally appeared at The Commentator

In defence of Reinhart and Rogoff

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Facepalm, as they say

Academic economic papers rarely receive the sort of mass reception that brings coverage in the Guardian and the Telegraph so by the standards of its field ‘Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff was something of a blockbuster.

The eponymous Carmen Reinhart and Kenneth Rogoff are economists who, in a 2010 paper,  ‘Growth In a Time of Debt‘ found that “whereas the link between growth and debt seems relatively weak at ‘normal’ debt levels, median growth rates for countries with public debt over roughly 90 percent of GDP are about one percent lower than otherwise; (mean) growth rates are several percent lower.”

These results, fleshed out to book length for the successful ‘This Time Is Different’, have been quoted by George Osborne, Paul Ryan, and Olli Rehn in support of their measures to get spiralling government debts under control.

Last week’s paper by Thomas Herndon, Michael Ash, and Robert Pollin of the University of Massachusetts Amherst claimed to have proved this wrong. They had recreated Reinhart and Rogoff’s results and found that the pair had reached their figure of a GDP ‘growth’ rate of -0.1 percent per annum for economies with government debt of over 90 percent of GDP thanks to “coding errors, selective exclusion of available data, and unconventional weighting of summary statistics.” Most embarrassingly, the ‘coding error’ was a proper schoolboy error; Reinhart and Rogoff missed some of the numbers out of their calculations.

In truth the idea that there was an Iron Law such that an economy would shrink as soon as it’s government debt hit 90 percent of GDP, the ‘strong form’ of Reinhart and Rogoff (pushed more by the political practitioners than them it ought to be said), was always iffy. It smacks of the sort of bogus causation derived from correlation which is the basis for much modern macroeconomics.

There are, for example, different types of debt. Advocates of higher spending often point to the 260 percent of GDP the British government owed in 1816, the 180 percent it owed in 1919, or the 220 percent it owed in 1945. This, they tell you, proves that Britain’s economy can bear an even greater burden of debt than the 70 percent of GDP it has doubled to in the last five years.

But you don’t have to be David Starkey to know that in 1816, 1919, and 1945 Britain had run up that debt to pay the cost of defeating a tyrant and as soon as that was done we stopped. It was an expense we had to meet and defray over time, the wartime borrowing was classic ‘consumption smoothing’.

To put it another way, when the British government started spending heavily in 1792, 1914, or 1939 there was a definite endgame for this spending: the restoration of the Bourbon monarchy, the defeat of the Kaiser, the overthrow of Hitler. The very moment those goals were accomplished spending would fall rapidly.

Our current level of government spending, by contrast, is not being undertaken to safeguard this country and its neighbours from conquest but to maintain a public sector and welfare state grown fat on borrowing and tax revenue from an unsustainable bubble in the absence of that bubble and those tax revenues. We are not smoothing consumption, we are sucking it out of tomorrow. And, unlike Pitt the Younger, Herbert Asquith, or Neville Chamberlain, present day advocates of higher spending cannot give an endgame for their proposed accrual of debt.

The point of this for evaluating Reinhart and Rogoff’s work is to note that one load of debt is not necessarily the same as another. There ought to be a little nuance to the picture, there are no magic numbers.

But even with that said it can still be argued that Reinhart and Rogoff have been hard done to this last week. They are, as they say in ‘This Time Is Different’, involved in the on-going process of growing their data set (which, rather unwisely, they have been quite proprietary about) and since 2010 they have revised their conclusions in the light of new data which Herndon, Ash, and Pollin had access to.

As Reinhart and Rogoff wrote in the Wall Street Journal, in a 2012 paper with Vincent Reinhart they found GDP growth rates of 2.4 percent for economies with government debt over 90 percent of GDP, pretty close to the 2.2 percent calculated by Herndon, Ash, and Pollin.

Indeed, and despite what some excitable commentators have proclaimed, Herndon, Ash, and Pollin have not found no correlation between high debt and low growth. They have found a weaker one than Reinhart and Rogoff in 2010 and about the same as they found in 2012, but they have still found one.

As page 21 of their paper states: if debt is below 30 percent GDP growth comes in at 4.2 percent, if debt is between 30 percent and 60 percent of GDP growth comes in at 3.1 percent, if debt is between 60 percent and 90 percent of GDP growth comes in at 3.2 percent, and if debt is over 90 percent of GDP growth comes in at 2.2 percent. Even on Herndon, Ash, and Pollin’s figures higher debt is correlated with lower GDP growth.

And there is perhaps a more profound point to note. Reinhart and Rogoff have fessed up to the coding error but the “selective exclusion of available data, and unconventional weighting of summary statistics” which Herndon, Ash, and Pollin accuse them of is, in fact, the very stuff of modern macroeconomics.

The ‘facts’ which dominate and guide our economic lives such as GDP, the CPI, or even unemployment, are not objectively given but are constructed using just such subjective methods, a prime example are the nonsensical unemployment figures of the United States. If this furore provokes a little scepticism so much the better, but it should spread much further than one paper.

This article originally appeared at The Commentator

Party over? It never got started

Insensitivity: An effigy of Lady Thatcher is paraded through Trafalgar Square during a party held after the death of the former British Prime Minister

The lady’s not for burning

I was wrong.

It does a man good to say that once in a while, so there you go.

Coming from Sheffield I’d always heard that when Margaret Thatcher died “they’ll have to install a turnstile in the graveyard due to the amount of people entering it with their dancing shoes on”. Then came the internet.

The Facebook page ‘We’re having a party when Thatcher dies‘ has over 6,000 likes and another, ‘Is Margaret Thatcher Dead Yet?‘, has nearly 40,000. Given this I’d come to think that the day after Lady T popped her clogs I’d be picking my way to the tube station in the morning stepping over people passed out in party hats. I wrote that “people in places like Sheffield will be celebrating Margaret Thatcher’s death”, even that “the streets of Sheffield will flow with ale.”

And they didn’t. Instead 800 trouble makers, that’s 800 nationwide, many of whom wouldn’t have known Maggie Thatcher from Teri Hatcher, smashed some stuff up.

In Brixton ‘revellers’ trashed a branch of that well known exploiter of the workers, Barnardo’s. Last weekend saw a party in Trafalgar Square which, especially given the anticipation over the years, was a total washout. The revellers brought an effigy but couldn’t manage to set it on fire prompting the wonderful observation: “The lady was not for burning.” And Sheffield was quiet.

I should have suspected that the promises of wild celebrations were overdone. After all, I’ve written before about how Thatcher is actually the most popular post war British prime minister. The Guardian reported that “On the day of her death, half of all respondents, 50%, told the pollster that they look back on her contribution as a positive one for Britain. That is 16 points more than the 34% who say she was bad for the country.” (Ouch, that must have hurt!)

A YouGov poll found that “Opinion gradually becomes less positive as you go northwards, but not drastically so – even in the North 49% have a positive opinion of Thatcher, 35% negative.”  28 percent regarded Thatcher as a “good Prime Minister” and 21 percent as a “great Prime Minister” (the best laugh I had all week was a northern leftie I know explaining that these people meant great in the sense of important, not ‘really good’). The finding is repeated across the country, according to YouGov “Only in Scotland is the balance of opinion negative”.

The YouGov poll found that Thatcher is regarded as “the greatest British Prime Minister since 1945” in every region except Scotland and London where she is pipped by another Conservative, Winston Churchill. It also found that in every region except Scotland more thought that “Margaret Thatcher’s period as Prime Minister” had been “Good for Britain” than thought it had been “Bad for Britain”.

Again, in every region except Scotland more thought that Thatcher’s period as Prime Minister had left Britain “Economically better off”. In every region the most popular view was that she had left Britain “More respected in the world” and a place with “More opportunities for women”.

In the Commons Glenda Jackson blustered “A woman? Not on my terms!” But then the question of whether you’re a woman isn’t decided on Glenda Jackson’s terms and, as the YouGov poll also found, most women disagree with her: 51 percent of women said that Thatcher left Britain a country with “More opportunities for women” against just 14 percent saying “less”.

There was some mixture in the picture. In every region the dominant view was that Thatcher had made Britain a “Less equal society”. This is undeniable. People at the top got very much better off and people in the middle got a bit better off but people at the bottom also got better off, just not by very much. When Simon Hughes put this charge to her in her bravura farewell performance as Prime Minister in November 1990 Thatcher replied:

“People on all levels of income are better off than they were in 1979. The hon. Gentleman is saying that he would rather that the poor were poorer, provided that the rich were less rich. That way one will never create the wealth for better social services, as we have. What a policy. Yes, he would rather have the poor poorer, provided that the rich were less rich. That is the Liberal policy.”

As I wrote last week: “Those who profess to hate Thatcher have committed the error of taking something they believe (or claim to, I’m not convinced many of them are actually serious), repeating it loudly and often to other people who also believe it, and assuming from this fusillade of confirmation that everyone else thinks it as well”

It would be wrong to say that there aren’t people out there who deeply loathe Thatcher and all she stood for. But it certainly seems that my friend’s dance floor won’t need waxing so often.

This article originally appeared at The Commentator

Pounds and pence

This meme popped up on my timeline yesterday…

Photo

I’m not a fan of state spending generally but I have found it rather difficult to get my knickers in a twist about the cost of Maggie Thatcher’s funeral. Not because I liked her, I did, but because of things like the fact that

“Trade unions received £85.8 million from public sector organisations in 2009-10. That is made up of £18.3 million in direct payments from public sector organisations and an estimated £67.5 million in paid staff time.

The total is up 14 per cent from 2008-09, when trade unions received £76.1 million from public sector organisations.

Direct payments include a total of £13.0 million in 2008-09 and £14.9 million in 2009-10 paid by the Department for Business, Innovation and Skills through the Union Learning Fund and the Union Modernisation Fund.

2,493 full time equivalent public sector employees worked for trade unions at the taxpayers’ expense in 2009-10.”

So, going back to the meme, £10 million could buy 1,190 nurses, 1,411 teachers, or 2,040 soldiers, or it could buy 2,493 union jobsworths.

Welcome to public sector Britain.

The left hated Thatcher because she thrashed them

Margaret Thatcher, 1925 – 2013

On Gee Street in London there is a Stafford Cripps House named after the post war Labour Chancellor. In Fulham there is also a Stafford Cripps House which contains a Clement Atlee Court named after his boss. In East London there is the Kier Hardie Estate, named after the first Independent Labour MP. In Clapton there is a Nye Bevan Estate named after the former Labour minister.

So I was baffled when, today, my various inboxes, feeds, and walls were swamped by left wing friends asking how bothered I was by the passing of Margaret Thatcher. One or two seemed rather put out when I responded that I wasn’t massively. As someone who could be considered a ‘Thatcherite’ I believe in the individual not an individual. I’ll leave the veneration of Dear Leaders to the left with their crumbling municipal buildings.

At 87 Margaret Thatcher lived a long life. Insofar as we can tell about the private life of this most resolutely political of people it was also a rather happy one. The daughter of a provincial, middle class shopkeeper, born during the Depression, she went to Oxford, became a chemist, and then became a lawyer. Elected to Parliament in 1959 after a decade of trying she rose against incredible odds to become the first female leader of a major British political party in 1975 and Britain’s first female Prime Minister in 1979. She was accompanied every step of the way by her beloved husband Denis.

Her period in office was marked by internal division and conflict of a degree not seen under any other prime minister of the century. Thatcher took on the Labour Party (three times), the Argentines, the National Union of Mineworkers, and crushed them all. By the time Thatcher left office even the Soviet Union and its miserable communism were history.

But in 1988 Thatcher gave her famous Bruges Speech in which she stated “We have not successfully rolled back the frontiers of the state in Britain, only to see them re-imposed at a European level with a European super-state exercising a new dominance from Brussels.” For the European federalists, including many in the Conservative Party close to Thatcher’s predecessor Ted Heath who had never forgiven the grocers daughter for beating the grocer, this was a step too far.

In 1990 Thatcher was finally brought down, not by a bunch of troublemakers rioting in Trafalgar Square, but by her own Europhile backbenchers, angered by her refusal to sign up to a single European currency. History has proved Thatcher emphatically right.

She brooded on this betrayal in retirement but, judging by her memoirs, she was fully aware of just what she had helped achieve, even if she was typically modest about it. She had taken Britain from an increasingly chaotic, sclerotic, and socialist place, to a place which was on the up again. Internationally she had restored some of Britain’s old standing and seen off the communist threat.

Both in Britain and abroad, with the help of her great ally Ronald Reagan among others, she had shown that the inevitable, onward march of socialism was nothing of the kind.

And, perhaps most uncomfortably for her detractors, she was popular and remains so. She won three elections on the trot. In 2011 a YouGov poll for The Sunday Times placed her firmly at the top of a list of post-war British prime ministers with a whopping 27 percent, more even than Winston Churchill.

The sainted Clement Atlee, architect of the welfare state, nationaliser of industries, and namesake of a court in Fulham, limped home with just 5 percent of the vote behind Tony Blair and, mysteriously, Harold Wilson. The much-vaunted street parties celebrating her demise might be rather more thinly attended than the guests have convinced themselves.

Those who profess to hate Thatcher have committed the error of taking something they believe (or claim to, I’m not convinced many of them are actually serious), repeating it loudly and often to other people who also believe it, and assuming from this fusillade of confirmation that everyone else thinks it as well.

These people can often give you a list of reasons they hate Thatcher, lists which are often so suspiciously similar that you have to question how many are the product of original thought and how many are just being parroted to feign an opinion. Most of them, from the mass unemployment to her supposed destruction of Britain’s industry, are easily dealt with.

But the truth is that she would have been disliked intensely no matter what she did. Owen Jones wrote recently that “Thatcher hate is not kneejerk anti-Toryism, after all, there will be no champagne corks popping when John Major dies, and there was no bunting on display to celebrate the deaths of Ted Heath, Alec Douglas-Home, Harold Macmillan or Anthony Eden.”

But remember that in 1948 Nye Bevan, one of the most venerated and overrated figures in British political history, said, “No amount of cajolery, and no attempts at ethical or social  seduction, can eradicate from my heart a deep burning hatred for the Tory Party.  So far as I am concerned they are lower than vermin.”

Remember also that Bevan didn’t say that about a Conservative Party containing right wing ideologues like Thatcher, Norman Tebbit, or Keith Joseph. He said it about a Conservative Party which contained such Keynesian, welfare-state-loving, consensus-supporting politicians as Harold Macmillan, R. A. Butler, and Alec Douglas-Home.

The left disliked Thatcher because she was a Conservative. It hated her because she thrashed them.

Margaret Thatcher is one of only two British prime ministers to coin an ‘ism’ and unlike the other, Blairism, Thatcherism actually meant something. This is why whether alive or dead she will live on. Her ‘ism’ will be a much more permanent monument than the grey, decayed concrete boxes named after various Labour no marks.

This article originally appeared at The Commentator

Heavens on Earth: Exploiting human ingenuity

The social sciences provide few controlled experiments; there is no Cern Laboratory for sociology or economics. But the 20th century provided something rather close.

The impoverished, war-torn Korean peninsula was split in two, the North trying communism and the South opting for capitalism. After 60 years South Koreans are on average three inches taller than North Koreans and live 12 years longer.

Germany and its capital city were split down the middle in 1945, the west going capitalist and the east going communist. The architects of the Workers’ Paradise in the east had to build walls to stop the unappreciative proles escaping to the west to be exploited. And then the Workers’ Paradise collapsed.

The results of these experiments have proved problematic for statists. In recent years the economist Ha-Joon Chang has become popular on the left for arguing that the economic success of West Germany and South Korea relative to their eastern and northern neighbours is not because of a lack of state intervention but because they had just the right kind of intervention in just the right amount. For Chang there is nothing inherently wrong with a Gosplan, you just have to make sure you have the right boffins drawing it up.

In his new book, Heavens on Earth, JP Floru utterly rejects this argument. He takes eight case studies, from Britain’s Industrial Revolution of the 18th and 19th centuries to Singapore’s journey to prosperity, and argues that the spectacular results achieved came from the release of market forces. Where Chang prescribes intensive government involvement in the economy, Floru recommends that politicians and bureaucrats set up a solid legal framework then get out of the way.

Economically speaking, the source of the increase in wealth these countries experienced was increasing productivity, the production of as much with less or more with as much. The increase in the quantity of goods and services available for consumption which this permits is the essence of increasing wealth.

The Theory of Comparative Advantage, outlined by David Ricardo 200 years ago, extends this worldwide. As a unit a country will grow rich if it produces goods or services for which the inhabitants of other countries are willing to exchange the goods and services they have produced. And countries will see their terms of trade improve the more efficient, or productive, they are.

Floru’s argument echoes that of Douglas Carswell’s recent book The End of Politics, its central feature the ‘Hayekian Knowledge Problem’. Economics is, as Alfred Marshall wrote, “a study of mankind in the ordinary business of life. It examines that part of individual & social action  which is most closely connected with the attainment and with the use of material requisites of well-being”.

It is not, as much mainstream neo-classical economics would suggest, the study of the allocation of given resources among known ends via some identified production function. It is, in fact, the study of the process of the discovery of all these things; resources, ends, and means.

The knowledge of how best to produce cars, linen, or financial services does not exist in some one place where one of Ha-Joon Chang’s Platonic philosopher kings can simply go and get it prêt-à-porter. It is lurking somewhere, probably dispersed, in the vast collective brain made up of each individual in the wider economy, and it has to be discovered.

A free market economy is far better at tapping this collective brain and efficiently discovering and coordinating the hidden, dispersed information it contains than a state command system which relies on the brains of a handful of experts. That is the lesson of Korea and Germany.

There is an incredible amount of economic gloom as debts rocket, growth stagnates, and incomes fall in the developed world. But, as the United Nations recently reported,

“The world is witnessing a epochal ‘global rebalancing’ with higher growth in at least 40 poor countries, helping lift hundreds of millions out of poverty and into a new ‘global middle class’. Never in history have the living conditions and prospects of so many people changed so dramatically and so fast”.

Thanks to free market capitalism more people are living better than ever before.

Since at least 1798, when Ricardo’s friend Thomas Malthus predicted a destiny of misery for mankind, there have been people warning of an imminent end to our material progress. But whatever the situation with regard to his material resources, one truly inexhaustible resource man possesses is his (or her) ingenuity, or human capital in the economists’ terminology. A system which allows for the maximum exploitation of this ingenuity, of its discovery and coordination, remains humanity’s best hope for the ever more prosperous future which is on offer.

In 1776 Adam Smith wrote that “Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice”. JP Floru’s excellent new book performs the vital service of reaffirming this fundamental lesson.

This article originally appeared at The Commentator