Back in the days when I was a callow undergraduate, many of my close friends were devout Christians, as indeed were many people on campus. There were days when I could go from sunrise to its set without ever encountering a pair of wrists naked of the near-ubiquitous What Would Jesus Do? bracelet.

WWJD? was supposed to remind His followers that they should strive to imitate Christ in all their words and actions. Although I never sported the WWJD? jewellery, I was always impressed by its effectiveness and simplicity. There was no uniform consensus about what, specifically, Jesus might do, but at least you could be sure that none of these WWJD? subscribers believed stealing your stuff, plagiarising your work, or snaffling your boyfriend was Something Jesus Would Do. That made campus culture rather pleasant. And of course the WWJD? bracelet was a perfect tool for social accountability, as none of its wearers ever wanted to do things that would cause non-believers to point sardonically at the bracelet with cocked, disbelieving eyebrow.

This came to mind today while I was reading Gordon Brown’s piece on CiF, entitled ‘Markets need morals.’ Why? Because it seemed to me as if he had publicly donned a What Would Adam Smith Do? bracelet. Observe:

I have long been fascinated by Adam Smith, who came from my home town of Kirkcaldy, precisely because he recognised that the invisible hand of the market had to be accompanied by the helping hand of society. He argued that the flourishing of moral sentiments comes before – and is the foundation of – the wealth of nations. In other words, markets need morals.

Somewhere along the line, Gordon Brown realised that Adam Smith holds the same position in the minds of sensible economists as Jesus holds in the minds of campus Christians. When in doubt, the sensible economist turns to his bible to discover What Would Adam Smith Do? And if the answer may not be found therein, the economist will use his knowledge and understanding of Adam Smith to speculate on what Adam Smith might have done. Like Jesus, Adam Smith operated according to a set of general principles from which we may derive his likely conclusions about modern questions of economics.

So Gordon Brown has looked at the condition of Britain today and consulted his WWASD? jewellery. And he has determined that the foundation of wealth is the moral character of the wealth-creating society.

But is he right? Or has he confused Hume’s is and ought?

I am not an expert on the WWASD? question, but I think Smith was simply stating an is. The operation of the market and economy is simply a reflection of the moral values of the society. If a society views freedom, free will, and mutual self-interest as moral goods, its economic exchanges will tend to be free, voluntary, and mutually beneficial, because the moral code to which the people adhere will inform how and why they make economic exchanges. If a society views security, equality, and the common good as moral imperatives, its economic exchanges will reflect those principles instead. The state, which like it or not has the power to regulate economic exchange, also reflects the moral values of its people, and will regulate economic exchange so that it conforms to the prevailing moral character.

Gordon Brown has misread this idea as an ought: economic exchanges ought to conform to morality. Our moral code demands good outcomes for all, so our market must be designed to produce good outcomes for all. But Gordon Brown has gotten his cart and horse mixed up. The fact of the matter is, the condition of our ‘market’ does currently reflect our moral character.

What does our society consider moral goods these days? Allow me to make a list.

  • freedom
  • security
  • free will
  • regulation
  • self-interest
  • the common good
  • hard work
  • work-life balance
  • purchasing power
  • anti-consumerism
  • a minimum standard of wealth for all
  • a maximum standard of wealth for all

If this seems a rather schizophrenic and internally contradictory list to you, as it does to me, then it should come as no surprise that, as Adam Smith’s is predicts, our economic conditions are equally schizophrenic and internally contradictory. Particularly difficult to reconcile are the ideas that we want to generate enough wealth for all to have a decent standard of living, but we encourage people to purchase less, consume less, work less, invest less, and spend less. On the one hand, material wealth is vital because we consider those with little of it poor, and poverty is a moral evil. On the other hand, material wealth is wicked because we consider those who pursue it greedy and destructive, and greed and destruction are moral evils.

‘Give the poor purchasing power!’ we cry. ‘They are deprived of their material needs!’

‘We are purchasing too much and becoming soullessly materialistic!’ we cry. ‘We do not need stuff!’

And so we end up with a moral culture that sets a minimum level of wealth below which there is poverty (a moral evil) and a maximum level of wealth above which there is greed and consumerism (moral evils). Then we demand of the ‘market’ that it confine itself to the space in between.

Economic exchange proceeds accordingly. Some economic actors direct all of their considerable effort toward generating enough wealth to avoid the lower limit. Unfortunately, this drives certain sectors above the upper limit, so we require other economic actors to direct their resources toward driving wealth-generation down again. Back and forth, back and forth, boom and bust, extreme wealth and extreme poverty, like a giant economic pushme-pullyou.

And Gordon Brown says ‘markets need morals.’

Gordon, the market has morals. It has our morals, and it reflects them accordingly. And your ‘enabling state’ reflects them too: it encourages business, it restricts business; it removes wealth, it grants wealth; it helps individuals at the expense of the community, it helps the community at the expense of individuals; it seeks wealth, it condemns wealth generation.

And you complain that the results are imperfect? The results are a perfect reflection of our moral values.

So to return to the question – What Would Adam Smith Do? – I doubt he would argue that we should change effects to fit causes. If he could see the flawed reflections of our moral code, he would advise us to search out the flaws in our moral code.

WWASD? He would say to us, ‘Stop putting garbage in, and you’ll stop getting garbage out.’

Nef is not calling for sudden or imposed change, but for a slow shift across the course of a decade or more. Wage increments can gradually be exchanged for shorter hours. There will be time to adjust incentives for employers, to discourage overtime, reduce costs per employee, to improve flexibility in ways that suit employees, and to extend training to offset skills shortages. There will be time to phase in a higher minimum wage and more progressive taxation, to change people’s expectations, and to adjust to low-carbon lifestyles that absorb more time and less money.

This plan makes no sense. Why do we need a higher minimum wage if we’re going to be spending so much less money on stuff? Where are the extra jobs going to come from if people are purchasing fewer goods and services? How many businesses will be available to hire people after you’ve bankrupted a bunch of them by forcing them to pay their employees more money for less work and by discouraging people from consuming the goods and services they produce?

In short, how stupid and totalitarian are you, really?

Seriously, just go away. Go away and stop telling me what to do.

People of Britain, do you want fewer teachers? Do you wish to have teacher:pupil ratios of 1:45 across the land? Do you wish for huge schools operated by huge education authorities and staffed by teachers in huge teachers’ unions who can command ever higher and higher salaries and perks for their members as there is more and more work to go round and not enough teachers to do it?

If you answered yes to all of those questions, then good for you: because that’s exactly what you’ll get.

Earlier this year, the General Teaching Council expressed its wish that all teachers, whether in state or independent schools, be required to have a teaching certificate. This would entail a year of post-graduate education for all teachers, creating further cost to the taxpayer and further debt for the teacher-in-training. Further costs are a barrier to entry to the profession, and will result in fewer teachers.

Now David Cameron has said he would deny state funds to teachers-in-training whose undergraduate degrees were ranked third-class or below:

Under a Conservative government, according to Mr Cameron, no one with less than a 2:2 degree would be granted taxpayer’s money for postgraduate teacher training. It builds on a Tory plan announced last year to raise the entry qualifications for primary teachers.

Look, Camerhoon: the reason we have state funds for teacher training at all, and the reason for golden hellos, student loan discounts, and easier immigration requirements for teachers of certain subjects is because there are not enough teachers, good, bad, or otherwise. The financial incentives exist to attract people to what the government officially classes as a shortage occupation. Teaching is no easier than any other job. The salary it commands, in general, is lower than other professions that require a post-graduate degree. It is a job that few people are prepared to do, for one reason or another, and it is a sad fact that in this country the perception of teachers is that they went into teaching because they could not do anything else useful. (In some cases, that may be true, of course, and there are certainly a fair few teachers out there who are crap at their jobs.)

But the main point is that the vast majority of people do not choose to be teachers. The government’s policy is therefore to bribe the ones who can be bribed with financial perks. The message, so far, has been clear: ‘Please be a teacher! We will give you money!’

Now, suddenly, we are getting this incredibly stupid message: restrict the supply further! Only this will give the teaching profession status!

Britain can learn from Finland, Singapore and South Korea, who “have some of the best education systems in the world because they have deliberately made teaching a high prestige profession. They are brazenly elitist, making sure only the top graduates can apply.”

I’ve got news for you, dude. Teaching is a high-status profession in other countries for two primary reasons: first, lots of people want to be teachers. They are over-supplied. When lots of people want a particular job, employers naturally take only the best. Teachers have a high status in these places because their populations place tremendous value on the quality of education. Here in Britain, where there aren’t enough teachers to fill the positions that exist, we can’t really afford to be so picky. And, plainly, the value people place on quality of education here is minimal. Why do I say this? Because in Britain, a politician can be credibly attacked for having attended a top-quality school. Because in Britain, universities are encouraged to deny places to applicants from top-quality schools. Because in Britain, the ‘professions’ are told to deny entry to pupils from top-quality schools. Because in Britain, clearly, quality of education takes a serious backseat to social justice and equality.

The other reason for the popularity of teaching in many other countries is that teachers are seriously protected from market forces. In Spain, for example, it is virtually impossible to sack a teacher. Many teachers never leave the profession, and young people who want to teach are often obliged to wait years for a position to open up (years which many of them spend, according to my anecdata, working in tapas bars and living with their parents). Teachers are paid an enormous amount of money relative to most other jobs in these places; they have excellent working conditions, a great deal of disciplinary freedom, and good facilities available for their use. In short, these other places spend a huge amount of money on education, and they are willing to pay top dollar for top-quality educators.

Britain… does not. Education is, by comparison, underfunded; teachers’ pay scales are not linked to quality, but to seniority and certificates; facilities are poor, discipline is lax, and graduates with good degrees can earn far more money in other jobs. National pay scales mean that teachers in parts of the country where cost of living is high are short-changed compared to teachers in other places. And the state sets a maximum salary for teachers who do not have a teaching qualification (£25,000 pa full-time, for the curious), meaning that pay is not even related to the amount of work one does or time one spends on the job, much less the quality of that work.

So: in a country where people don’t want to be teachers, quality of education is not a priority, and historically the government’s stance on the profession is to bribe people to enter it, the solution is to make it even harder to become a teacher?

Good luck with that, Dave.

UPDATE: Iain Dale has posted a hefty extract from Camerhoon’s speech:

We’ve made our teachers lives more difficult, undermining their judgement, curbing their freedom, telling them what to do and how to do it. We send them into some chaotic environments with little protection or support, leaving them feeling demoralised and under-valued.

That’s right – you’ve made teaching a very unattractive profession. People with the ‘best brains’ look at this litany of woes and think, why in the name of sweet Jesus would I want to do this job? And then they go do something else.

If we’re only going to let the best brains teach, and most of the best brains don’t want to because

people with a good degree who would make great teachers think instead about the civil service, the BBC, maybe the Bar

then we’re not going to have very many teachers at all, are we?

Now. How do we make teaching more attractive than the civil service, the BBC, and the law? For a start, the state could stop undermining teachers, telling them what to do and how to do it, protect them from abuse, support them on matters of discipline – pay them according to effectiveness and skill whilst leaving them free to find the best path to effective teaching.

If you want the best brains to teach, make teaching attractive to people with good brains. What do people with good brains find attractive? Freedom to find the best way to do their jobs, opportunities to be creative, fair rewards for outstanding job performance, and the ability to be a mover and shaker in their profession.

At the moment, if you’re a twenty-something or thirty-something who has made it in another career but fancy giving teaching a go, the bureaucratic-odds are stacked against you.

And not just that. Most of them would be taking a drastic pay cut and surrendering all personal autonomy on the job, not to mention running the gauntlet of the CRB system to prove they’ve never so much as looked at a child cross-eyed. Anyone who’s been successful in a non-teaching career and wants to become a teacher should be hired on the spot, qualification or no, because nobody who wasn’t passionately dedicated to the art of pedagogy would do such a personally disadvantageous thing. Who cares what kind of degree they received?

We’re going to change all that and give high-flying professionals a fast-track into teaching. We will replace the Graduate Teacher Programme with a new one – Teach Now. Modelled on Teach First, it will be a one-stop-shop for people who want to transfer into teaching.

No, no, a thousand times no! Waive the qualification requirement entirely.

In fact, do that across the board. Far more people would go into teaching as a result, and there’d be so many that schools might actually be able to sack and replace the crappy ones.

We need much greater flexibility than currently exists – flexibility over rewarding the best and yes, getting rid of the worst. So we will free schools to pay good teachers more. With our plans, head teachers will have the power to use their budgets to pay bonuses to the best teachers.

And because the evidence shows that schools that have the greatest impact in poorer areas are the ones that extend their hours into evenings and weekends, we will also give them the flexibility to reward teachers for longer hours.

This is good, actually.

But we also give head teachers greater powers in the other direction. Today, it’s far too difficult for them to fire poorly performing teachers.

This is not. I’m all for schools being able to sack bad teachers, but this is only a useful tactic if you can hire a new one. And there aren’t enough teachers to go round.

We’re going to say to our teachers, if you want to search for and confiscate any item you think is dangerous or disruptive- you can. If you want to remove violent children from the classroom – you can. And if you want protection from false allegations of abuse that wreck lives and wreck careers – we’ll make sure you have it.

How? Are you going to repeal some legislation? If so, what? Are you going to use the criminal justice system to crack down on dangerous students? If so, how will you force the judges to issue harsher penalties? Will you use legislation to ensure that false allegations are expunged from the records? Will you get rid of the ISA, which includes hearsay, rumour, and false allegations as ‘evidence’ in its vetting scheme? Where are the details, dude?

Anyway. This is all just to reiterate my point: restricting teacher training to people with good degrees will simply worsen the teacher shortage, because most academically successful people (‘best brains’) don’t want to become teachers. It’s an unattractive profession to people who value creativity, resourcefulness, and freedom to innovate. And even if the best brains did become teachers, there’s no guarantee they’d be good. Many academically gifted people have trouble communicating the subject of their expertise at a level that is accessible to schoolchildren anyway; and probably the core skill involved in teaching is being able to synthesise patiently, to simplify complex ideas, to keep what you’re saying on a level kids can understand and in a way they can tune into.

Finally, I will say this. I teach Latin. I am not an expert in the subject, nor do I have a degree in it, nor do I have the faintest clue where my American university degree would fall on the degree-class scale used in the UK. I do not have a teaching qualification. And yet every time I apply for a teaching position, the school falls all over itself to hire me and to pay me well above the going rate for my services. I can’t be the only teacher like that. David Cameron’s plans will, by and large, make it harder for people like me to get teaching jobs. And for what? So that a bunch of smarty-pants graduates with 2:2s or better can have a ‘high-prestige’ career.

Camerhoon, school is not about teachers. It’s about children. And anyone who wants to teach, and can demonstrate that they do it well, should be encouraged to do so, whether they have fancy papers to qualify them or not, and whether they have the biggest brain in Britain or just a mediocre brain that happens to be full of passion and love of learning and dedication to showing kids how amazing the world they live in is.

UPDATE 2: Yes, and many more times yes, from the BHS:

For the Conservatives, we need to restrict the pool of applicants to one which is ‘brazenly elitist’, in the hope that by only recruiting the very best graduates, you’ll recruit only the very best teachers. There are two major problems with this. First, we still have a teacher shortage, as evidenced by the fact that there are some substantial rewards for people training to teach subjects like science and maths. Second, quite apart from the fact that there are scores of people with mediocre qualifications who are exceptional teachers, there’s no guarantee that someone who graduated from Oxbridge with a first in Mathematics is going to possess the people skills needed to succeed in a classroom. It’s quite possible that the Tories’ plans would not only lead to fewer teachers, but fewer good teachers as well.

DK rips into a leftie who appears to be claiming that raising the minimum wage to £7/hr (a ‘Living Wage’) will be good for workers and good for businesses. Like, automatically. Always. ‘Cause it’d sure be stupid to do it if it would make some people worse off.

Let’s experiment, shall we?

I own a widget factory.

I have 100 employees turning out widgets for £5.80/hr, 40 hours/wk, 52 weeks per annum.

My wages bill is thus £1,206,400 per annum. Add in Employers’ NICs, and that wages bill becomes £1,287,667.

Let’s pretend my factory is very cheap and costs me £25,000 per annum to operate.

Each of my widgets costs £1 to make; I sell each widget at £1.20 for a 20% (entirely reasonable) profit.

Fortunately I sell 1,500,000 widgets per annum, leaving me with a nice profit of £487,333 per annum. I share this equally with my three business partners, giving us each a yearly income of £121,833.25. Once I’ve paid Employers’ NICs, my own NICs, and income tax on this sum, I’m actually taking home £70,031.

Suddenly, the law demands I pay my employees £7/hr.

Now my wages bill is £1,569,216 per annum (including Employers’ NICs) plus £25,000 overhead.

Selling 1,500,000 widgets per annum, now my profit has shrunk to £205,784 per annum, which I share equally with my three business partners, giving us each a yearly income of £51,446. Once I’ve paid Employers’ NICs, my own NICs, and income tax on this sum, I’m actually taking home £32,800. In raising my employees’ wages by £1.20 each per hour, my own income has shrunk by more than half.

If my widget sales fall, my income becomes even smaller. If my overhead rises (energy bills go up, you know), my income becomes even smaller. If I want to offset this by raising the price of my widgets, my customers’ business costs rise (at a time when they have already risen, because they too have to pay their employees more); alternately, sales of my widgets fall. I realise I can earn more than £32,000 as a school teacher.

Best-case scenario, my business becomes more expensive to run, my customers’ businesses become more expensive to run, the prices of our products rise, and our incomes shrink.

Worst-case scenario? My partners and I sack our 100 employees and sell the factory. My employees are now earning £0/hr. My partners and I go off to teach maths to left-wing dunderheads who, despite our efforts, will never understand that occasionally, just occasionally, raising the costs of a business means it is no longer worthwhile to operate that business.

Tax figures found here.

ILU Milton Friedman:

I was standing at the counter in the chemists’ over the road this afternoon when my eye was drawn to a shiny leaflet displayed there. For a moment, I daydreamed, admiring the design and the pretty colours, the words ‘Brixton Pound’ turning my thoughts to a possible new club or home for rescue dogs.

Then, with an actual, physical start of surprise, I noticed what it was really advertising. The Brixton Pound.

Once I’d paid for my goods, I snatched up a copy of the leaflet and went out to the pavement to read it. Here is what it says:

WHAT?

The B£ is a local currency launching in autumn 2009. It’s a practical way for Brixton residents to support local traders and boost Brixton’s economy.

The B£ will work alongside pounds sterling – but can only be spent with independent local businesses within Brixton. Brixton will be the first urban centre in the UK to have its own currency.

WHY?

Your money goes further:

  • Rewards and special offers for using the B£
  • The B£ keeps circulating within Brixton – local people benefit each time you spend one

Good for the local economy, community and environment:

  • Supports independent shops and local jobs under threat from the recession and larger chain stores
  • Maintains the diversity and character of Brixton
  • Localising trade helps cut carbon from transport

The B£ is secure:

  • Printed on watermarked secure paper
  • Backed by sterling held by Lambeth Savings and Credit Union

WHO?

The B£ is being launched by a group of local volunteers in partnership with:

  • Transition Town Brixton (Community-led vision and action on Climate Change)
  • Lambeth Savings & Credit Union (Lambeth’s financial cooperative)
  • nef (economics as if people and the planet mattered – Lambeth-based economic think-and-do tank)

Please show your support by joining the B£ 1000 club. Membership is free and you will be one of the first 1000 people to use the B£ when they are launched. Visit www.brixtonpound.org to sign up.

Several questions leap to mind.

First, what is the exchange rate between B£ and £ to be?

Second, how exactly is that going to be determined?

Third, most traders in Brixton purchase their goods from outside of Brixton (I would guess). If the B£ is worth less than or as much as the £, how is it going to help them?

Fourth, most residents in Brixton earn their money in £. If the B£ is worth more than the £, how is it going to help them?

Fifth, if the B£ can only be spent within Brixton, the ‘diversity and character’ of what Brixton residents buy is going to shrink. You can’t buy a drink at a pub in Streatham with your B£. You can’t take a bus to Stockwell with your B£. What, in fact, will your B£ buy you? Locally-sourced goods from local traders. Which, in Brixton, is basically drugs. Hello, black market!

I’m not suggesting that alternative currencies are a bad idea in and of themselves; in many circumstances, I would argue, they’re necessary, especially when hyperinflation for example has devalued the official currency. They probably do this in Zimbabwe. But an alternative currency in a location like Brixton, that produces few truly ‘local’ goods and where most of the residents are earning their money outside of Brixton in pounds sterling, is at best pointless, and at worst, damaging to local traders.

I haven’t actually worked through it all in my head yet, however, so I’m willing to be told differently. I just thought it might be interesting for other libertarians to hear about this. Especially Tim Worstall.

Y’know, amongst all of this drama about banking and debt and monetary policy, I’m surprised no Catilina has turned up. He campaigned, unsuccesfully of course, on a platform of tabulae novae: that is, a general cancellation of debt. The proposal was, although manifestly stupid, very popular with a vast number of Romans.

The crisis of 63 BC was in part precipitated by Pompey’s re-opening of the markets in Asia Minor, two results of which were that debts in Rome were suddenly called in by creditors, and cash moved out of the city to places like Pergamum. This is, of course, one of the problems with the gold standard: how do those people advocating the gold standard now answer this dilemma?

Over on the Devil’s gold post, commenter Revolution Harry questions fellow commenter Ian B’s assertion that ‘getting more stuff is a Good Thing’:

Economic growth on its own is fine, though I take issue with your idea that ‘getting more stuff is a good thing’. Depends on the ‘stuff’.

Ian B’s riposte is a thing of sheerest beauty:

No it doesn’t. People getting more of what they want is a Good Thing, period. If you have more stuff than you want, fine, get rid of it or even better give it to me. If you think there is some kind objective method of deciding what stuff people should have, and that they shouldn’t be allowed to have stuff that others decide they shouldn’t have, then I think that’s reprehensible.

Getting more stuff is what the western world and free markets are all about. Stuff is great.

I concur wholeheartedly: Stuff is great.

I must say also that the discussion taking place over that particular post is possibly one of the most interesting I’ve read in a good long while. I highly recommend it.

My own view of ‘money’ has always been extraordinarily simplistic. As I understand it (and please, no flaming: I admit in advance to ignorance and silliness), this is sort of where money comes from:

I make baskets. You make shoes. We decide, mutually, that two of my baskets are worth one pair of your shoes. When I need shoes, I give you baskets according to this formula, and the same holds true when you need baskets – you give me shoes.

Mordred breeds cows. You need Mordred’s cows to make your shoes; Mordred needs my baskets for feed. I give Mordred ten baskets; he gives you one cowskin; you give me five pairs of shoes. So far, so good.

But I don’t need all of these shoes, or at least not at the moment, and you need more cowskins than Mordred needs baskets from me. Not to mention that there’s also Lancelot the chicken-farmer, Guinevere the prostitute, and Gawain the lumberjack to add into the equation, which makes it all hopelessly complicated.

So together we agree upon a unit of substitution for all of this stuff, and call it a squeed. Every item we produce is worth so many squeeds – perhaps my basket is now worth 10sq. Now, however, I decide I’d quite like not only a pair of shoes, but also a half-hour with Guinevere. So I sell my baskets for 11sq – after all, I’m the only basket weaver in town – pocket my 1sq profit, and save it up to pay Guinevere 5sq for my half-hour on Thursday. Then Guinevere spends 3sq on a handful of eggs from Lancelot, and saves the remaining 2sq toward a nice pair of shoes.

The situation becomes even more complex, however. Supposing Mordred puts his prices up too, because he also fancies Guinevere and wants to purchase some of her time. Realising that she’s now in demand, she too can charge more. What if another basket-weaver arrives and sets up shop? Not everybody can weave baskets, true, but lots of people can be prostitutes – so Guinevere’s prices might come down again when Elaine comes onto the scene. All of these things change the value of my baskets, as well as how much my squeeds will buy me.

Finally, and most importantly, what is a squeed, and how many are there? If the supply is finite, it will recirculate stalely amongst the community and quickly accumulate in certain spots like scum on a pond; if it is possible to increase the supply, that too will affect squeedal value and the price of goods. Ideally, squeeds should be an item we can’t really use (why waste something useful?), and relatively rare, although not too rare; also, a squeed should be something we can get more of, but not easily. Gold is, therefore, a good substance from which to make squeeds.

On the other hand, gold is heavy, and the village over the hill uses it for roofing tiles. They might come and forcibly relieve us of the contents of our over-burdened pockets! Better to agree on an amount of gold to represent 1sq, create a worthless (to the other village) paper 1sq note, and keep all of the gold squeeds in a safe place, like under the mattress. As long as we always have enough gold to back up most of our paper squeeds, we should be fine.

And there, my friends, we must cease Bella’s Theory of Money, because we enter the world of fractional reserve banking, which is where my limited and child-like understanding of the monetary system ends. I hope you have enjoyed today’s episode of Arthurian Village Economics.

UPDATE: Ian B continues froody:

And thirdly, it is common to glibly say we’ve had enough growth now and we bally well ought to stop. Well, you might think you’ve got enough stuff, but I haven’t got enough stuff and the average subsistence farmer in Africa hasn’t got any fucking stuff at all, and it is reprehensible to tell him he can’t have any because of an imaginary infinitude on a misunderstood graph. We have vast potential for improving our productivity, absolutely vast. We’ve only been in the industrial revolution for about three centuries, not even that. There is shitloads left to discover and invent. How dare you tell people on the breadline they’re rich enough?

Staggering.

A sample:

And in these terms, a moderate, U-shaped recession is, frankly, boring. As a Slate colleague said to me, there’s no glory in just having a couple of banks fail. We want history. We want to go where no generation has gone before. We want to bounce grandkids on our lap and tell them folksy anecdotes about 70-percent-off sales, the Dow being 50+ percent off its all-time high, and the day print media died.

In the abstract, the prospect of a Greater Depression is intriguing. Over the past 80 years, we have successfully mythologized the 1920s and ’30s. Now it seems as if it would be an exciting time to live through, if only to be a witness to history.

He’ll be all right, jack:

Disclaimers are, of course, in order. I’m an urban, middle-class young person with a full-time job. I don’t have a mortgage or any investments to speak of; the Dow’s drop doesn’t kill my retirement fund, nor does the real estate panic chip away at my home equity. This is a symptom of youth, just like the aforementioned desire to be part of a new Great Depression. I am an outlier, existing on an atypical fringe of American society. That I’m a journalist doesn’t help—the more dramatic the narrative, the more exciting my job. Eventually, I will be just as much of a cheerleader for the Dow’s historic rebound rise as I was for its awesome fall.

I’ll admit, I’ve always been a bit thrilled by the idea of being part of a revolution (though not, ideally, a bloody and violent one), but I’m realistic enough to know that a revolution would be a dreadful, messy upheaval that’d squash that excitement sharpish – which is why I’m not out fanning the flames of discontent.

Poor Chad, on the other hand, is too young to understand that, even if the downturn gets no worse, it’s already history. If he wants stories with which to regale his grandchildren, better that he should recount that telephones used to have cords, and once upon a time there was no Google.

Here.

Great commentary at 18.14 from ianrthorpe:

I don’t see how Queen can be blamed, Freddie is dead and Brian May is an astrophysicist now.

As to the article itself – yea, verily, I loathe the Guardian. There is no more to be said.

The pithy Tim Worstall makes my heart happy. Of John Harris, ignorant twat, he says:

For just as using a plough rather than a stick to scrape the earth for our food frees up labour to do other things, like wipe babies’ bottoms, treat cancer or go on Celebrity Big Brother, so reducing the number of jobs in retail frees up people to go and write fatuous columns for the national newspapers about how they misunderstand the basic concepts and tenets of the real world.

Via the ASI blog, its daily blog review always a source of good stuff, I have come across this explanation of why Valentine’s day is rational from an economic standpoint. No. 4 appears to me to be the most convincing:

4. Rationality as counter-signalling. If a woman is looking for commitment, she’ll not want a narrow utility maximizer, because such a man will leave her the moment a better offer comes along.

The prospect of being traded in for a better model is the source of most people’s insecurity in romantic relationships. I speak from experience as a maximizer of utility.

Just happened across an amusing fantasy in the Daily Mash, my favourite part of which is this:

But last night chancellor Alistair Darling was like: “Hang on a minute, how come it’s always us?…What does IMF stand for anyway? International Mother Fuckers?”…

An IMF spokesman said: “Do you really want to know why? Fine. Your banks were the entire basis of your economy and now they’re shite. Your currency is used bogroll, you don’t make anything of any value, you’re governed by clueless arseholes and 99% of your population is up to its tits in debt. That’s why.”

Mr Darling added: “Yeah, fair enough.”

I recalled suddenly that last night I had a dream about loss of supply, complete with a vision of Brown and Darling standing open-mouthed at the dispatch-box, staring at one another in horror until one of them says, ‘Automatic dissolution? That can’t be right! How come nobody told us…?’

But never mind; we must square our shoulders bracingly against the winds of ill fortune. Worse things happen at sea. And all is not lost: my father has just sent me an email that says, in its entirety, ‘I read this morning that the pound increased in value against the dollar; that should help you some.’

[bella goes away to ponder whether weak dollar at all related to this]

The amazing Megan McArdle links to a fascinating post by a university professor about the expectations of men and women regarding childcare roles. It looks at the heteronormative divison of labour in families and examines whether this is a product of the socialisation of women as carers.

The post is very anecdotal and not in any way actual proof of anything, but it relates closely to my remarks about the constraint of women according to their biology.

And some of the comments are…thought-provoking.

Via Tim Worstall (yes, again), I find this piece in the Telegraph, in which the General Teaching Council for England indicates that it would very much appreciate it if all private school-teachers acquired an official teaching qualification as teachers in the state sector are required to do.

Such a qualification can be obtained on a one-year post-graduate teaching course, a one-year qualification-cum-experience course, or a degree in education.

Tim rightly takes issue with the box-ticking, hoop-jumping nature of this sort of requirement, labelling it ‘part of the spread of the hateful credentialism of our times.’

My own criticism is related to something else entirely, and not in any way influenced by the fact that I myself am an unqualified private-school teacher. According to the UK immigration website, teaching is a shortage occupation. Which means – I think I’m right in saying this – that there aren’t enough teachers.

So the solution to the teaching-shortage problem is to make it even more difficult for people to become or remain teachers. Riiiiiiiiight.

Highlighted by Samizdata.net, this op-ed by Paul Krugman of the New York Times makes me wonder whether he is actually an idiot, or just a disingenuous fucktard.

The lovely peeps over at Samizdata flag up his logical and mathematical nonsense much better than I could, but I do want to take issue briefly with the question of how much the jobs created by the stimulus will cost.

Krugman says:

First, there’s the bogus talking point that the Obama plan will cost $275,000 per job created…The true cost per job of the Obama plan will probably be closer to $100,000 than $275,000 — and the net cost will be as little as $60,000 once you take into account the fact that a stronger economy means higher tax receipts.

The post over at Samizdata points out:

What about Krugman’s own estimate of $100,000 per job if you look at the program in a multi-year basis? He claims this cost from the extra millions of new jobs that would be created after the first year. As the cost of the program is $820 billion, this implies that he believes that the Obama plan will actually create over 8 million new jobs. If this is true, why is the White House claiming only 3 million new jobs from the plan? Making arguments based on the official claims of its government proponents, as the critics have done, are not deceitful as implied by Krugman. Well, not quite as deceitful as calculating costs based on an extra 5 million jobs that do not appear in the program.

So yes. There’s something dodgy with Krugman’s maths.

He needn’t have bothered, though; not being an economist, I’m not entirely certain of what he means by ‘cost per job created,’ but he makes a stupid mistake by engaging with this criticism in the first place. After all, is not the point of a fiscal stimulus to spend lots and lots of money? Does it really matter what it gets spent on or how much that thing costs?

To be absurdly simplistic: if the US government really wanted to, they could divide up this proposed $1 trillion and give an equal share to everybody. According to my handy calculator, and assuming I’ve done all the zeroes correctly, that comes to about $3300 for every man, woman, and child in the US. Exclude the children, and that equal share goes up. Stimulus accomplished. (I should point out that I’m not actually advocating this plan.)

And, contrary to what Krugman apparently believes, people do apportion their own money more efficiently and usefully than the government does. So every one of those $3300 apiece would be well spent.

But my knowledge of economics is minimal, and my mathematical skillz permanently arrested at the level of a 14-year-old, so I’ll leave the rest of Krugman’s article aside for now.

Except for this, which is the part that bugs me:

As the debate over President Obama’s economic stimulus plan gets under way, one thing is certain: many of the plan’s opponents aren’t arguing in good faith. Conservatives really, really don’t want to see a second New Deal, and they certainly don’t want to see government activism vindicated. So they are reaching for any stick they can find with which to beat proposals for increased government spending.

(1) ‘Conservatives really, really don’t want to see a second New Deal.’ The way this statement is phrased makes it sound as if the New Deal saved the nation; conservatives don’t want it; ergo they don’t want the nation to be saved. Presumably, in Krugman’s mind, this is not because they have anything against the idea per se, but because they don’t want the credit for doing it to go to Obama. Is this ‘arguing in good faith’?

(2) ‘They certainly don’t want to see government activism vindicated.’ Naturally they don’t. Once the power and reach of the government grows, it’s very difficult to scale it back again; doing so takes someone like Margaret Thatcher, and observe how beloved she is by the British! Observe how long her achievements lasted! Any American conservative who truly believes in limited government (and there are few of them these days) must oppose the stimulus, whatever its plausible merits, on principle, because it extends the competency of the federal government far beyond what it ought to be.

There is a third problem with his remarks, and that is the latent advocacy of bipartisan consensus. In times of crisis, supposedly, partisan squabbling weakens a nation and saps its confidence. Whatever their opinion of the stimulus, Krugman seems to imply, its critics should suck it up and present a unified front with Obama, because to do so will improve the mental outlook of the country and bolster confidence in its public servants.

As my brother would say, fuck that shit.

I want partisanship. I distrust consensus. I want the party without power to throw every question, argument, and criticism it can come up with, no matter how sly, at the party in power. I want debate – robust, contentious debate. Why? Because without it, the electorate are deprived of choice. And times of crisis are precisely when conflict and argument are most necessary, as crises are exactly when governments are most liable to implement the most illiberal policies.

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