Showing posts with label Johan Norberg. Show all posts
Showing posts with label Johan Norberg. Show all posts

Friday, 5 December 2025

The open society is the successful society

"The most secure and prosperous societies did not hide from the world. They were confident enough to remain open to trade and ideas, allowing the new to challenge the known. Progress emerges when people experiment, borrow, and combine ideas in ways no planner could ever foresee; decline happens when fear overcomes curiosity."
~ Johan Norberg from his article 'From Athens to the Abbasids to today’s Anglosphere, creativity and commerce drive greatness.' in which he explores the central lessons of history’s real golden ages in his new book, Peak Human: What We Can Learn from the Rise and Fall of Golden Ages.

Friday, 11 July 2025

"This is also the reason why the olive branch became a symbol for peace"

 

"Athena, goddess of wisdom and war, was the guardian of the city [of Athens], and she had offered it the gift of the olive tree. Since it takes many years for olive trees to bear plenty of fruit, the planting of so many olive trees in Athens indicates that people had hope for the future and they had found ways to feed themselves until then.
    "This is also the reason why the olive branch became a symbol for peace. If it takes two decades for your trees to bear a substantial harvest, you are extra vulnerable to warfare that might wipe out all your investments in one moment. Therefore olive growers usually insisted on negotiations and reconciliation when city-states were at each other's throats, and the olive came to symbolise both commerce and peace."
~ Johan Norberg on free trade as a powerful palliative for conflict and war. From his book Peak Human: What We Can Learn From the Rise dnd Fall of Golden Ages [hat tip Tony Morley]

Thursday, 3 April 2025

Did you know you can see shit political economy from space? [update 2]

Auckland: Eden Terrace's workers' cottages on the right, Mt Eden's California Bungalows 
beginning over the railway line lower left. (Photo showing the area before the Dominion Rd flyover,
from the Sir George Grey Special Collections, Auckland Libraries, 580-9498']

Did you know you can see shit political economy from space? Here below is the Black Hole of North Korea at night, too poor to have enough lights to switch on.

And you can see shit political economy in Auckland too, in aerial photographs. To be accurate: you can see shit political economy in the form of the effect of tariffs. ...

Let me explain.

The first houses built here en masse were workers' cottages and then villas. When you fly over the city, you can see a ring of these villas around the inner parts of the city — especially so in Ponsonby and Grey Lynn — built right up until the First World War.

But after that war, something changed. It seemed to some that the United States had rescued Europe from its Great War, and had a lifestyle to which an increasingly prosperous population could aspire. It was the Jazz Age — the age of radio, electrification, automobiles, and the mass production (Fordism!) that made them affordable. In love with Americanism, in housing here it became the decade of the California Bungalow.

California Bungalow, Mt Eden

A villa is not a bungalow.  Like the California lifestyle it aped (and which the world would fully fall in love with after another war), the California Bungalow was freer than the more uptight Victorian villa, and reached out for sun and air. Their broad spreading gables form a second ring around the city in what we now call the "tram suburbs," a ring from Pt Chev through Mt Albert, Sandringham, Mt Eden, Greenlane, Ellerslie, and right around to the border of Meadowbank/Remuera.

Their popularity was immense. 

Their takeover seemed unstoppable. 

Until something happened.

That something involved a tariff. Brought in by US Senators Smoot and Hawley, their Smoot Hawley Tariff Act raised tariffs on imports by an average of twenty percent. Their intention (we're told) was to quarantine American manufacturers from the effects of the 1929 stock market crash. What it did do instead was to spread the misery and contagion around the globe, kicking off the Great Depression and all but shutting down international trade for nearly two decades.

John Bell Condliffe's "wagon wheel" showing the dramatic death spiral of world trade
following the disastrous implementation of the 1930 Smoot-Hawley Tariff Act

New Zealand economist J.B. Condliffe has a world-famous diagram describing the accelerating downward spiral of trade as every country and trading bloc in the world put up their own tariff walls in response. It was one of the most successful acts of intentional self-destruction in all modern history.*

Almost at a stroke, we fell out of love with the US.  In Britain, still the head of something called an Empire, an Imperial Preferences Act was swiftly passed making trade within the Empire roughly tariff-free — allowing many Commonwealth countries to escape the Depression first. (Not so the US of A, which had to wait until the death of a President and the end of a war to boom again.)

And trade amongst the Empire, rather than outside it, meant many more British goods replacing the previous love affair with American. Not least in housing. If the twenties was the decade of the California Bungalow, then the thirties was the decade of the English Cottage/English Revival. We can see these crabby, restrained offerings around the outer parts of the tram suburbs. (And you can see all these styles described in the Auckland Council's 'Style Guide,' pp 14-24)

In insulating itself from the world, America had not only shot itself in the foot economically, it also lost its influence with the rest of the world. 

Turned out it was a not-so-great way to Make America Go Away Again.

* * * *

* Until April 2, 2025, that is, with what Johan Norberg calls "the longest suicide note in economic history."


UPDATE 1: David Farrar notes that our average two-percent tariff rate (world's second-lowest after Singapore) becomes in the mind of the Toddler-in-Chief a twenty-percent tariff. (I use the word "mind" loosely.)

Johan Norberg has more on the effects of what he jokingly calls '"Liberation Day June 17 1930":




As he says, " I think the US was heading for trouble even before, but it certainly deepened the depression and spread it around the world, with devastating effects for European democracies. We would have had a depression anyway, but perhaps not a great one."

UPDATE 2
"Thomas Rustici identified the role of the Smoot-Hawley Tariff Act in exacerbating the Great Depression, particularly through its effects on trade, banking failures, and economic contraction. His seminal work, *Smoot-Hawley and the Great Depression: A General Equilibrium Analysis* (2005), presents a compelling argument that Smoot-Hawley initiated a trade war, triggered mass bankruptcies, destabilized the banking system, and led to deflation and depression. ... 
"Conclusion Rustici’s work provides one of the most comprehensive and rigorous explanations of how the Smoot-Hawley Tariff Act triggered a trade war, bankrupted farmers and businesses, destabilized the banking system, and created deflationary collapse. His analysis is central to understanding how protectionist policies can create economic catastrophe by disrupting credit, trade, and monetary liquidity. His insights remain critical in debates over trade policy and economic crises."

Thursday, 7 November 2024

It's mourning in America again


 Thoughts on US politics from Johan Norberg, in Sweden ...

So, it’s mourning in America again. Some thoughts: 
The real loser is Joe Biden and his advisors. Had he stepped down in time, he would have given Democrats time for a competitive primary to select someone who did not have such a dismal campaign record. History will not be kind. No American I’ve met outside of an organised event was excited by Kamala Harris. And in times of trouble, voters prefer “strength” to “likeability.” 
My hunch that she would nonetheless take this was wrong. I remind myself of a taxi driver in Pennsylvania who told me he had thought a lot about Trump’s comment that Harris did not use to be black and now wanted to be black. “He has a way of saying things that just sticks in your mind.” That is disturbing, but should also worry Republicans. They won’t find another bully with that kind of crazed, hypnotic charisma again. When J D Vance or Tucker Carlson say similar things, they just seem weird. 
After 2028 Republicans are probably in opposition again. They should prepare by limiting executive powers and strengthening checks and balances. I fear they’ll do the opposite, to unleash the Trump. 
And since inflation and high prices decided this election (3/4 of voters said it caused them hardship), perhaps not increase prices even more with tariffs and deportation of a large share of the workforce? 
US public debt is 100% of GDP and the government now spends more on interest rates than the military. Trump has promised to make this much worse. In 2050, debt will be 160%. This is an existential risk for the US and the issue’s total absence during the campaign make me think that nothing will happen until there is a catastrophic bond-market event. 
As for the Democrats, many claim that voters rejected Harris because of racism and misogyny. Stop it. Exit polls suggest that Harris got fewer female voters than Biden did, and Americans knew that Obama was black before they voted for him twice. Of course, there is a disturbing bias, but this is mostly a way of clinging on to a sense of superiority when you lose, and will only stop you from adapting your agenda to win the next time. 
It’s high time to abandon a woke, anti-business progressivism that has been rejected again and again by voters (and fix your cities). I fear that four years under a rude far-right Trump will have the opposite effect on Democrats. 
Europe can no longer take America for granted, and has to rebuild its military to provide for its own defense and to support threatened democracies like Ukraine. The right time to start is some 30 years ago. 
Trump’s tariffs will primarily hurt Americans. Europe should not respond by hurting Europeans with retaliatory tariffs, but by offering alternative deals that might tempt Trump, and deepen free trade with a global coalition of the willing. 
Finally, the silver lining is that Americans suddenly trust their electoral system again, and Trump supporters will not storm the Capitol. At least, that’s something. 
Update 1: (Oh, and one more thing: Voters really loathe chaos at the border. For those of us who think our societies thrive on openness, a more orderly, lawful immigration system is absolutely essential.)

Update 2: Foreign policy? Yes, it's scary for sure. The only thing I'd add is that his unpredictability will come into play ... He might hate seeming weak on Ukraine more than he loves Putin. We'll see.

 

Thursday, 29 August 2024

"My Conversion from Anti-Industrialist to Lover of Human Progress'"



"Sometimes when I talk and write about the importance of science, technology, and entrepreneurship to human opportunity and living standards, people ask me why I seem so obsessed with progress.
    "There is a simple reason: I did not use to believe in it.
    "When I was around fifteen, I shared many of the ideas of the people I now spend my time arguing against. I was very unhappy about modern, industrial civilisation. I looked upon highways, cars, trucks, and factories as blights on the landscape. I thought the hustle, bustle, and stress of consumerism and modernity were unnatural and unhealthy. ...

"I thought that there must have been a better time in the past, when we lived in harmony with one another and with nature. ... There, I thought, were the good old days. This view predisposed me to look at technology and construction and consumption only in terms of their negative impacts on traditional lifestyles, livelihoods, and the environment. ...

"I read the Existentialists, Arthur Schopenhauer, and Henry David Thoreau; I read Franz Kafka and plenty of other disturbing fiction, all of which reinforced my sense that something was seriously wrong with the world and humanity. It made me a pessimist, almost even a misanthrope. Such stupid people, to ruin their world like that!

"... I don’t think that I ever became clinically depressed, but as a friend of mine put it, I had made myself 'philosophically depressed.' The world and everything in it just seemed hopeless. And that became a self-fulfilling despair.
    "Two things began to lift me out of the intellectual hole that I had dug for myself: reading about history—boy, was that an eye-opener—and studying politics. ...

"Whatever period I read about, and whichever region I turned to, the 'good old days' were nowhere to be found. ... I found that the desperate struggle to find something, anything, to feed your family and stave off hunger for another few weeks was the defining experience of all previous eras. ... My ancestors in northern Sweden had not lived a good life; they had fought hard for food, shelter, and clothing, and when the weather was bad, the crop failed, and they starved. In bad times, they had to dry and grind tree bark into flour to prepare their daily bread. ...
    "Once I began to pull this thread, I found it hard to stop. I just had to find out what made the difference between their lives and ours. Why is it that for ten thousand years, people did not experience any lasting improvement in their material condition, and then suddenly, in the past five or six generations, we saw an explosion of wealth and technology?
    "For the first time, I started to actually think about the impact of railways, steamboats, international trade, corporations, financial markets, and so on. I had to ask myself: Where would I have been without them? Probably in the graveyard, or never born. ...

"This was the beginning of my obsession with human progress. I could no longer take modern civilisation as a given—or a curse.
    "Step by step, I realised that the modern world was not so bad after all. But my heart was not in it. ... Then some friends in [the freedom] community told me that I had to read Ayn Rand, whom I had never heard of. It happened at an important moment in my thought process. ... 
    "I had yet to experience, in visceral form, the meaning of industrialisation and commerce, and so I was left with a hollow, less-than-inspired ideal. That began to change when I read Atlas Shrugged and Rand’s nonfiction books.
    "For the first time, I read someone who talked about man as a heroic being, with happiness as his moral purpose, and science, technology, and industry his noblest activities. I was appalled. And deeply fascinated!
    "Rand had this annoying ability to get to the bottom of every question and challenge my every belief. ...
    "If scientists and entrepreneurs provide us with the knowledge and wealth that make the world an amazing place, why weren’t they the heroes in my story? And why were the whiners and moaners good guys—just because they dressed in black like me and had the better tunes? Previously, I had identified government intervention as a bad thing and had been involved in libertarian activism against it, but I had not clearly identified or articulated the good that deserved protection against it. Thanks to Rand, I began to shift from fighting against what’s bad to fighting for what’s good—for progress, and not just against oppression.
    "Interestingly, and perhaps ironically, the biggest impact of reading Rand was on my emotional outlook—the part of my personality that had not kept up with my intellectual transformation. She helped me see the beauty in exploration and achievement and that technology and innovation can be romantic adventures. I credit her at least partly with my bright sense of life, my belief in mankind, in progress and the future. In Rand’s novel 'The Fountainhead,' the sight of one man’s achievement provides a young boy with “the courage to face a lifetime.” In time, that’s what Rand’s works provided me.
    "This intellectual journey of discovery is why I am obsessed with progress. It is fueled in part by my gratitude for the people who keep on working and thinking and producing, even when people like my old self denigrate them. I had always taken progress for granted. I did not recognise it, and I did not understand it, and now I am trying to make up for it.
    "As a convert to the cause, I hope you will forgive my missionary zeal. You see, I am trying to get a younger version of myself to see the error of his ways."

~ Johan Norberg from his article 'My Conversion from Anti-Industrialist to Lover of Human Progress'. His most recent book is The Capitalist Manifesto – Why the Global Free Market Will Save the World

Tuesday, 12 December 2023

Defending Globalisation

 


The allure of economic nationalism, alas, isn’t only real, it’s also powerful. Even once-libertarians aren't immune. Yet as Don Boudreaux points out in this guest post, far from being imposed on us it's so popular that governments actively have to suppress it. Because globalisation, as he says, is a "fundamental human activity" that benefits us all ...

Defending Globalisation

Guest post by Don Boudreaux

THIS PAST SEPTEMBER, THE CATO Institute launched a major new initiative called “Defending Globalisation.” The brainchild of Cato’s prolific international-trade scholar Scott Lincicome, Defending Globalisation is a multimedia project designed to explain the benefits of what is described on the project’s website as “all aspects of the fundamentally human activity that we call ‘globalisation.’”

Many people, no doubt, will object to globalisation being described as a “fundamentally human activity,” a term that conjures images of a natural process that has long been familiar to humans. But the term is accurate. Globalisation is what happens naturally when individuals in modern society are left free from government restraint to trade – free to offer to sell, and free to offer to buy, with no one compelled to accept any such offers and, importantly, with no politicians or policemen obstructing the offerers and offerees.

Trading comes naturally to humans. The trading instinct is the root cause of great commercial cities, ancient and modern. In the past, when transportation and communications were very costly and time-consuming, the natural geographic range over which intensive trading regularly occurred was small. But as the costs of transportation and communications fell, and as each of these activities became faster (with the latter becoming instantaneous literally over the whole earth), the natural geographic range over which intensive trading regularly occurs grew. Today, that natural range for many goods and services spans the entire populated area of the globe.

The indisputable truth that today the natural range of trading activity is large – certainly larger than the area of any individual country – comes in an ironic form: tariffs and other government-erected obstructions on trade. Only because people are eager to trade with people in different countries do governments feel the need to suppress this trade.

Stated straightforwardly, this truth is undeniable. Nevertheless, it is denied by the many pundits and politicians who assert that elites impose globalisation on ordinary people. The implication is that globalisation is both detrimental to the masses as well as unnatural. Of course, if these pundits and politicians really believed that globalisation is unnatural (and, therefore, must be imposed) they’d be content simply to leave ordinary people free to trade, confident that no, or only minimal, cross-border commerce would occur. The very existence of government-erected restraints on international commerce proves that those persons who are responsible for erecting these restraints understand that what must be imposed is not globalisation – that would arise naturally – but economic nationalism.

The allure of economic nationalism, alas, isn’t only real, it’s also powerful. People in different countries and different eras have willingly embraced it. Just why so many people are so easily deluded into believing that they are made better off when their access to goods, services, and investment opportunities is restricted by elites has long been a mystery. This mystery is partly solved by public-choice economics: Voters are rationally ignorant, and disproportionate political influence is enjoyed by special-interest producer groups. 

Another reason is that we humans are likely evolved to see reality as a struggle between “us” and “them,” and therefore the interest groups who stand to gain from protectionism find success in portraying actions that benefit foreigners as actions that harm us and our fellow citizens while simultaneously enriching those who mean us harm. Relevant here is the fact that trade restrictions are invariably described by their peddlers as both “protection” of fellow citizens and “standing up to” or “fighting back against” foreigners.

Free trade and globalisation, although great benefactors of humankind, are not naturally popular. It might even be closer to the truth to say that free trade and globalisation are naturally unpopular. Thus they are forever in need of sound defense – which is precisely what is supplied by the Defending Globalisation project.

I ENCOURAGE YOU TO READ every essay in this project, many of which remain to be published. I’ve read each that has been published, and attest to their excellence. Here’s a small sample of what you’ll learn.

From Johan Norberg’s contribution, titled “Globalisation: A Race to the Bottom – or to the Top?
In his book 'Globalisation and Labor Conditions,' Robert Flanagan summarises the evidence: “Countries that adopt open trade policies have higher wages, greater workplace safety, more civil liberties (including workplace freedom of association), and less child labor.” Flanagan and Niny Khor also document this relationship in “Trade and the Quality of Employment: Asian and Non‐​Asian Economies,” in the OECD report Policy Priorities for International Trade and Jobs.

This would be extremely surprising if companies always scoured the globe searching for the lowest‐​cost country. But they don’t. If they did, 100 percent of foreign direct investment would go to the least developed countries, but in fact, no more than 2 percent of all foreign direct investment is heading in their direction. Most investment goes to relatively developed countries, and GDP per capita is the strongest influence on labour conditions. On average, richer countries have higher wages, safer jobs, shorter working hours, and stronger labour rights, such as freedom of association and less forced labor.

The race‐​to‐​the‐​bottom hypothesis got it wrong because it neglected half the cost‐​benefit analysis. If labour compensation (in the broad sense, including working conditions) were just a gift generously bestowed on workers, it would make economic sense to reduce it as much as possible, but in a competitive labor market, it is compensation for the job that someone is doing, and therefore there is a tight link between pay and productivity. Some workers might be twice as well paid as others, but that does not make them uncompetitive if they are also twice as productive.
From Daniel Drezner’s “The Dangers of Misunderstanding Economic Interdependence”:
While contemporary fears about excessive interdependence are real, that does not mean that these fears have been realised. Indeed, a quick perusal of the alleged downsides of interdependence reveal that much of what has been feared has not come to fruition.

For example, consider the allegations about how China gamed the liberal international order to serve its own revisionist ends. It is undeniably true that as China has grown economically stronger, it has also grown more repressive and more revisionist. Neither of these facts, however, falsify the liberal theory of international politics.
 
The liberal argument posits that interdependence constrains rising powers from pursuing more bellicose policies than they otherwise would have. It says next to nothing about interdependence triggering democratisation. It is possible that China can repress domestically while still acting in a constrained manner on the global stage. Most of China’s alleged revisionist actions have been exaggerated. For example, neither the BRICS (Brazil, Russia, India, China, and South Africa) bank nor the Asian Infrastructure Investment Bank have challenged the Bretton Woods Institutions. Claims that the Belt and Road Initiative is an example of debt‐​trap diplomacy have also been wildly exaggerated; indeed, if anything, China’s recent lending practices suggest that it will not weaponise debts from the Global South. While China has built new institutions outside the purview of the United States, none of them contradict the principles of the liberal international order.
And from Daniel Griswold’s “The Misplaced Nostalgia for a Less Globalised Past”:
Even these adjusted income data understate the gains enjoyed by American workers in our more globalised era. In 'Superabundance: The Story of Population Growth, Innovation, and Human Flourishing on an Infinitely Bountiful Planet,' Cato scholars Marian Tupy and Gale Pooley compare time prices (how many hours people must work on average to acquire various goods and services) across decades and find that American workers have experienced dramatic gains since the 1970s. 
In particular, they calculate that the number of hours an average U.S. blue‐​collar worker would have to work to afford a basket of 35 consumer goods fell by 72.3 percent between 1979 and 2019. For example, in 1979, a coffeemaker cost $14.79 while the average blue‐​collar worker earned $8.34 per hour, meaning he would have to work 1.77 hours to buy the coffeemaker. By 2019, a comparable coffeemaker sold for $19.99 while the average blue‐​collar worker earned $32.36 an hour, translating to a time price of 0.62 an hour — a 65 percent decline. 
Using the same methodology, the authors found similar improvements for other household goods: the time price of a dishwasher had fallen by 61.5 percent; for a washing machine, by 64.6 percent; for a dryer, 61.8 percent; for a child’s crib, 90 percent; for a women’s blazer, 69 percent; and for women’s pants, 44.6 percent.
Today's workers are better off than in decades past not only because familiar goods have become more affordable, but also because new types of products have come on the market and spread rapidly.

Again, the above selections are only a slim sample of the impressive abundance of wisdom, insight, and information that await you at “Defending Globalisation.” Embrace it.

* * * * 


Donald J. Boudreaux is a senior fellow with American Institute for Economic Research and with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University; a Mercatus Center Board Member; and a professor of economics and former economics-department chair at George Mason University. He is the author of the books The Essential HayekGlobalisation, Hypocrites and Half-Wits, and his articles appear in such publications as the Wall Street Journal, New York Times, US News & World Report as well as numerous scholarly journals. He writes a blog called Cafe Hayek and a regular column on economics for the Pittsburgh Tribune-Review. Boudreaux earned a PhD in economics from Auburn University and a law degree from the University of Virginia.
His psot first appeared at the American Institute for Economic research blog.

Tuesday, 28 November 2023

BOOK REVIEW: 'The Capitalist Manifesto: Why the Global Free Market Will Save the World,' by Johan Norberg




The IEA's Kristian Niemitz reviews Johan Norberg's important new book.

I first came across Johan Norberg almost exactly 20 years ago, when the German translation of his book In Defence of Global Capitalism came out. The book argued that globalisation was a success story. In large parts of the developing world, poverty, infant mortality and illiteracy were falling, life expectancy was rising, nutrition was improving, and democracy was spreading. These positive trends were, according to the younger Norberg, likely to continue, and they were not a product of chance. They were a result of the spread of capitalism.

At the time, this was considered an outrageous thing to say.... The almost universally accepted conventional wisdom of the day was that “globalisation” meant the exploitation of poor countries by multinational corporations, and that the world was going from bad to worse. ...

With his most recent book The Capitalist Manifesto: Why the Global Free Market Will Save the World, Norberg goes back to the beginning.... The era of “globalisation” is generally said to have started around 1990, so when In Defence of Global Capitalism came out, it was still in its relatively early stages. We now have three decades to go by. What happened in those three decades?

Quite a lot. 
  • Extreme poverty fell from 38% of the world’s population to less than 10%, 
  • child and infant mortality fell from 9.3% to 3.7%, 
  • global life expectancy increased from 64 years to over 70 years, 
  • illiteracy dropped from 25.7% to 13.5%, 
  • child labour decreased from 16% to 10%, and so on, and so forth. 
The countries and regions which performed best are the ones which did precisely the opposite of what the anti-globalisation movement wanted them to do, while the most spectacular counterexample is the movement’s erstwhile poster child of Venezuela. ...

There are genuine problems, though. In some Western countries, NIMBYism is driving up the cost of housing. This makes it harder for people to move to where the best job opportunities are, and it gives younger generations a worse deal. In addition, the extension of occupational licensing is erecting market entry barriers. None of this has anything to do with “neoliberalism” or “hyperglobalisation”, though – quite the opposite....

But have classical liberals benefited from this, in any way? Has being right made us more successful in winning over hearts and minds? Are there more people now who embrace free-market capitalism, or who at least accept that, even if they don’t like it, it is the most powerful motor of economic and social progress known to man?

Very far from it ... in addition to the anti-capitalist Left, we have also seen the rise of an anti-liberal Right. ... Where In Defence of Global Capitalism was able to concentrate on one enemy, The Capitalist Manifesto has to fight a two-front war. Some chapters are primarily aimed at the anti-capitalist Left, others are primarily aimed at the anti-liberal Right, and some could apply to both in roughly equal measure. ...
  • Chapter 3 concentrates on the ... misplaced nostalgia for the economic structure of the postwar decades ... Norberg shows that automation and productivity improvements have contributed far more to job losses in the manufacturing industries than free trade, and that ... the same processes that make some jobs redundant also lower consumer prices and thereby make us richer, [creating] demand for new jobs in other sectors ...
  • Chapter 4 addresses the old Marxist idea that wealth must be built on exploitation, but also some of the more recent literature on inequality, such as Thomas Piketty’s Capital in the Twenty-First Century and The Spirit Level by Kate Pickett and Richard Wilkinson. In market economies, people do not get rich by exploiting others. They get rich because they offer something that lots of people are prepared to pay for. Left-wing celebrity authors like Michael Moore and Bernie Sanders understand that perfectly well when it comes to their own book sales, but they are not capable of extending that logic to entrepreneurial activities. ...
  • Chapter 5 picks up another perennial Marxist theme: the idea that capitalism supposedly leads to greater and greater industry concentration over time. ... The best antidote to worrying too much about market concentration, though, is to read an article from 20 or 30 years ago that was worrying about the same thing. This is because a lot of the behemoths of yesteryear have since faded into obscurity. ...
  • If there is one thing those of us on the pro-globalisation side were wrong about 20 years ago (and in Chapter 7, Norberg is very open about that), it was our belief that freer trade and freer markets would lead to the spread of Western liberal values, and Western-style liberal democracies. In China, this has clearly not happened. Under Xi Jinping, China has gone into reverse, both in terms of economic and political liberty. However, none of this means that economic nationalists, who seek to decouple Western economies from China, are right.... 
  • One of the weirder phenomena of the past five years or so was the rise of a new wave of militant, anti-capitalist eco-movements: the Greta Thunberg movement, Extinction Rebellion, Just Stop Oil, and their various offshoots and counterparts in other countries. It is weird because it happened after the environmentalist side had already won the debate on climate change. ... On green issues, anti-capitalists are as wrong as they are about everything else. As Norberg shows in Chapter 8, market economies can and do address environmental problems very effectively.
All in all, the slightly older Norberg skewers the bad of ideas of the 2020s as effectively as the young Norberg skewered the bad idea of the early 2000s.
>> FULL REVIEW HERE: PART ONE  AND PART TWO.


Thursday, 2 November 2023

Johan Norberg: Bernie Sanders’ Vision of Sweden Is a 1970s ‘Pipedream’


It's been all too common for pro-socialist politicians here and elsewhere to talk up Sweden, to offer up it's "pro-socialist" policies and welfarate-state programmes as examples for us all to emulate. "Look," they say, "they have socialism and prosperity!" Problem is, as Swedish writer Johan Norberg explains in this guest post, that Sweden was most pro-socialist way back in the Seventies, when it was squandering the riches of a century, and it's only become prosperous as it's abandoned that notion, and embraced instead "a new period of liberalisation and of economic reform” ...

Johan Norberg: Bernie Sanders’ Vision of Sweden Is a 1970s ‘Pipedream’

When Senator Bernie Sanders and others like him talk about Sweden as a socialist paradise, they are promoting a tax‐​the‐​rich “pipedream” from the 1970s that never really existed, said Johan Norberg, a Swedish author, historian of ideas. Sweden today is a “much better and much freer place” than it was in the 1970s, says Norberg from his home in Stockholm.

“So today, if Bernie Sanders wants to imitate Sweden, he would have to reform Social Security, partially privatize it,” said Norberg in an interview with ReasonTV, a division of Rea​son​.com. “He would have to … abolish property taxes and inheritance taxes, and stuff like that, implementing national school voucher systems…. So, Sweden today is not what he remembers from the 1970s. It’s a much better and freer place than it was back then.”

Norberg, also a documentary filmmaker, earned his M.A. in the History of Ideas at Stockholm University. His latest book is The Capitalist Manifesto, which was praised by Elon Musk on X. During the ReasonTV interview above, Norberg was asked to respond to some of Sanders’ glowing comments about Sweden, which the self‐​described socialist had made during his 2015 presidential campaign.

In an inserted news clip, Sanders said, “In countries in Scandinavia, like Denmark, Norway, Sweden, they are very democratic countries obviously. Their voter turnout is a lot higher than it is in the United States. In those countries, health care is a right of all people. In those countries, college education, graduate school is free. In those countries, retirement benefits, child care are stronger than in the United States of America. And in those countries, by and large, government works for ordinary people and the middle class rather than, as is the case right now, in our country, for the billionaire class.”

Bernie Sanders: "Look, ah, Sweden!"

When news host George Stephanopoulos then said that Republicans would run an attack ad accusing Sanders of wanting to make America more like Scandinavia, the senator replied, “That’s right, that’s right.”

ReasonTV host Zach Weissmuller then asked Norberg to comment on Sanders’ remarks. Norberg replied,
"This is why Sweden is not a libertarian paradise. We might have free markets, but we do have a very generous welfare state. It’s true that many of these things are handed out by the government – it’s funded by the government at least through private providers. But the thing is we pay for these things ourselves. That’s an incredibly important point to make. Because there is this pipedream of Bernie Sanders and others that this will somehow be paid for somehow by the rich.”
Norberg continued:
“But Sweden learned in the 1970s. You can pick one: a big generous welfare state or you can make the rich pay for it all. You can’t have both. If you have a universal generous welfare state, and make the rich pay for it all, they will stop being rich. They will move. They will stop starting those businesses, the Ikeas of the future, and will move. Instead, you have to get most of the taxes from low‐ and middle‐​income households. That’s the dirty little secret of the Swedish welfare state.

“The socialists love the poor taxpayers because they are reliable, loyal taxpayers. They don’t dodge. They don’t move to Monaco. They don’t have tax attorneys. So we have the bulk of our government revenue coming from regional and local income taxes, which are flat. Income taxes are not progressive…. Also, things like a value‐​added tax at 25%, in general, on most goods. It’s obviously regressive. The poor pay as much as the rich when they buy food, in taxes.

“This means that when the OECD club of mostly rich countries look at different tax systems around the world, they say that the Swedish system is one of the least progressive tax systems of all. Much less progressive than the United States because America’s welfare state is so small, so you can rely more on the rich. Whereas here, we all have to pay for it.

“The Swedish welfare state mostly just redistributes over an individual’s life cycle. We get lots of stuff when we’re young, in preschool and school, and then we work hard and pay for it all, and then we get much of it back in health care and retirement benefits. Which mostly means, yes, we get lots of stuff but we pay for it all….

“It’s so interesting that socialists keep coming back to Sweden and I think that’s because all their favorite countries constantly fail. Every Cuba and Venezuela ends up with bread lines, millions trying to escape from that horror show. But they always have Sweden. It seems so friendly and successful and yet socialist.

“We have been socialist in Sweden and we have been successful but never at the same time. That’s what Sanders and the others fail to realize. We had that period in the 1970s and 1980s when Sweden was doubling the size of public consumption, raising taxes, regulating everything – price controls, what have you. This is the moment when Bernie Sanders and all those who are sort of stuck in the 1970s, this is what they still remember: ‘Look at Sweden! They’re socialist! But they’re also one of the richest countries on the planet! It seems to be working in Sweden.’

“The problem, of course, is that it’s like that old joke, how do you end up with a small fortune? Well, you start with a large fortune and then you waste most of it. That’s what Sweden did in the 70s and 80s. We were one of the richest countries on the planet before this experiment. And this was based on a 100‐​year period of limited government, free markets, free trade, as late as 1960. We had lower taxes than the United States and most European countries. This brought us all the wealth and all those successful international companies, the Ikeas and stuff, that brought us so much wealth that politicians thought they could just redistribute everything and begin to just jack up spending and taxes.

“Well, they couldn’t. Because the 70s and 80s, that’s the one period in modern Swedish economic history when we lagged behind other countries. This is the moment when we didn’t create a single net job in the private sector, and when entrepreneurs and businesses left Sweden. Ikea left Sweden. Tetra Pak left Sweden. Most successful entrepreneurs left because it was impossible to do business in Sweden. This all ended in a terrible financial crash in the early 1990s.

“So that was a brief period of time and it’s one that we don’t want to go back to in Sweden. Not even Swedish socialists – even they say, okay, we went too far. The Social Democrat finance minister at the time said it was actually absurd and perverse in many ways, what we were trying to do. Since then, Sweden has again become successful. But that’s based on a new period of liberalization and of economic reform.”
Perhaps that is the Swedish model policymakers should try to emulate.

* * * * * 

This post first appeared at the Cato Institute blog.


Tuesday, 21 February 2023

The Thin Line Between Tribalism and Human Flourishing




Musing about the death late last year of libertarian legend Walter Grinder, Barry Brownstein recounts for us the poetic wisdom imparted about the dangers of tribalism by Turkish-British novelist Elif Shafak ... dangers, as he recounts in this guest post, that should be a warning bell for us here as well.


The Thin Line Between Tribalism and Human Flourishing

Guest Post by Barry Brownstein

Walter Grinder, a grand champion of liberty, passed last December. [Obituaries here, here, and here.] In one of his emails, sent towards the end of his life, Walter wrote he had been “binging” the work of the Turkish-British author Elif Shafak. Walter marveled at “how well she sees into the human condition.”

Walter understood insights into the human condition are crucial to understanding the mindsets that foster or hinder human flourishing. On his recommendation, I read Shafak’s well-researched novel of the Cyprus Civil War, The Island of the Missing Trees. Using the device of a Greek-Turkish couple split apart by the war, Shafak imparts poetic wisdom about the dangers of tribalism.

Shafak’s novel relates the lush island’s descent into tribal hatred as the people made more and more primitive choices. Greek and Turkish tribal fanatics worked without mercy to instill tribal identities, even turning warmhearted neighbors against each other.

Tribalists would rather be a slave to their tribal identity than a member of a flourishing society. In his book Open: The Story of Human Progress, Johan Norberg quoted Peruvian novelist and essayist Mario Vargas Llosa:
The ‘call of the tribe’ – of that form of existence in which individuals enslave themselves […] is heard time after time by nations and peoples and, even within open societies, by individuals and collectivities that struggle tirelessly to negate the culture of freedom.” Authoritarian mindsets don’t end with tribal matters.
Norberg added,
My firm conviction is that it is precisely because we are so tribalist that we need an open, cosmopolitan world. If we did not regularly meet and communicate and exchange with individuals from other groups, they would forever remain the mysterious, dangerous outgroup, the barbarians at the gates.
In The Road to Serfdom, Friedrich Hayek pointed out “the primitive man… was bound by an elaborate ritual in almost every one of his daily activities… was limited by innumerable taboos and… could scarcely conceive of doing things different from his fellows.” The growth of civilisation, and thus human flourishing, depends on transcending such primitive limits.

Before tribal conflict erupted into civil war, Shafak described Cyprus as a society with a web of communication and exchange: “[T]hey used to say, Greeks and Turks are flesh and fingernail. You can’t separate your fingernail from your flesh. Seems they were wrong. It could be done. War is a terrible thing. All kinds of wars. But civil wars are the worst perhaps, when old neighbours become new enemies.”

As open conflict began in the 1950s, Shafak related, British “experts believed … there was no need to fear mayhem and bloodshed because how could there be a civil war on such a pretty, picturesque island of blooming flowers and rolling hills?” Those pundits wondered, how could “cultivated” and “civilised people… do anything violent?” The answers to such questions, as always, point to the inculcation of mistaken ideas.

Before the conflict, Shafak explained, Greek Cypriot Christians and Turkish Cypriot Muslims had actively worked together. That changed. “Political and spiritual leaders who reached out to the other side were silenced, shunned and intimidated – and some were targeted and killed by extremists on their own side.”

Greeks and Turks murdered thousands of ordinary individuals. “Death to traitors” signs appeared. Tribalism, Shafak wrote, triumphed: “The streets were not safe. Turks had to stick with Turks, Greeks with Greeks.” Commerce ground to a halt as people stayed home.

Shafak explored how tribalists erected barriers to peaceful cooperation: “Friends selling out friends. Now that’s a different kind of evil, one that we still haven’t come to grips with as humanity. It’s a difficult subject across the world – the acts of barbarity that happen off the battlefield.” Collectivisation around tribal identities fosters barbarism. Tribalists readily sacrifice themselves in pursuit of warped ideas.

When we exclude the “other,” we forgo the fruits of human cooperation. We are sure “they” are at fault, when our fanaticism is the cause of our suffering. When we free others from our hatred, we free ourselves.

Shafak wrote, “I think of fanaticism – of any type – as a viral disease. Creeping in menacingly, ticking like a pendulum clock that never winds down, it takes hold of you faster when you are part of an enclosed, homogenous unit.”

In 1964, the island was partitioned. Eventually, in 1974, the Turks invaded Cyprus, and the partition, including the capital Nicosia, became permanent. Shafak reported,
By the end of that interminable [1974] summer, 4,400 people were dead, thousands missing. Around 160,000 Greeks living in the north moved south, and around 50,000 Turks moved north. People became refugees in their own country. Families lost their loved ones, abandoned their homes, villages and towns; old neighbours and good friends went their separate ways, sometimes betrayed one another.
A buffer zone as much as four miles wide ran along the permanent partition. Buildings and shops within the zone went to ruin. Shafak described the distressing situation: “Roads were blocked by coils of barbed wire, piles of sandbags, barrels full of concrete, anti-tank ditches and watchtowers. Streets ended abruptly, like unfinished thoughts, unresolved feelings.” Commerce was destroyed, Shafak explained, as a “worldwide resort… became a ghost town.” She continues:
The beaches of Varosha were cordoned off with barbed wire, cement barriers and signs ordering visitors to stay away. Slowly, the hotels disintegrated into webs of steel cables and concrete pylons; the pubs turned dank and deserted, the discotheques crumbled; the houses with flowerpots on their windowsills dissolved into oblivion.
Tribal hatred ran through Turks and Greeks, but Shafak observed, “each side will tell only their own version of things. Narratives that run counter, without ever touching, like parallel lines that never intersect.” Insightfully, she reflected, tribalists see only their own pain: “People on both sides of the island suffered – and people on both sides would hate it if you said that aloud. Why? Because the past is a dark, distorted mirror… There is no room in there for someone else’s pain.”

When tribal hatreds take hold, there is no room to forgive, nor shed victim identities. Shafak told, “When elderly Cypriot women wish ill upon someone, they don’t ask for anything blatantly bad to befall them. They don’t pray for lightning bolts, unforeseen accidents or sudden reversals of fortune. They simply say, May you never be able to forget. May you go to your grave still remembering.”

In short, Shafak surmised, “Tribal hatreds don’t die … They just add new layers to hardened shells.”

Shafak reflected on how poor choices lead to unimagined ruin: “If someone had told us the island would be partitioned along ethnic lines, and some day we would have to look for unmarked graves, we wouldn’t have believed them.” Tribal hatred reset expectations for Cyprus: “Now we don’t believe it can ever be united again.” Yet, because the unimaginable ruin did happen, Shafak offered hope an open society could happen when people make better choices: “What we think is impossible changes with every generation.”

Walter Grinder would have agreed that the impossible is possible because of the power of choice. The light created by human cooperation is more powerful than the darkness cast by tribal hatred.

Partitioned Cyprus might seem light years away from the United States or New Zealand. Yet, Norberg warns: Human beings “are wired for both tribalism and tolerance, and the intellectual atmosphere reinforces different parts of this complex personality. A culture that says the collective is everything and the individual nothing will get the individuals it asks for.” As destructive as tribal Cypriot leaders then, current politicians, educators, and others encourage us all to adopt tribal identities. It ended badly in Cyprus. The outcome of tribalist mindsets dividing us may differ only in degree.

* * * * 
Barry Brownstein is professor emeritus of economics and leadership at the University of Baltimore.
He is the author of 'The Inner-Work of Leadership', and his essays have appeared in publications such as the Foundation for Economic Education and Intellectual Takeout.
To receive Barry’s essays in your inbox, visit mindsetshifts.com

This post previously appeared at the American Institute for Economic Research blog.

Thursday, 8 December 2022

"2022 was the year the people struck back against the despots"

"Ukraine defeating Putin's troops; Chinese students pressuring Xi to abandon zero-Covid; and now, Iranian women forcing Iran to dissolve the morality police. 2022 was the year the people struck back against the despots."

~ Johan Norberg, paraphrased*

NB: Norberg says, perhaps prematurely, "defeats" ... "pressure" ... "have forced" ... 

Monday, 22 August 2022

*Who* deserves better of mankind, and does more essential service to his country, than do the whole race of politicians?


"Whoever could make two ears of corn, or two blades of grass, to grow upon a spot of ground, where only one grew before, would deserve better of mankind, and do more essential service to his country, than do the whole race of politicians."
          ~ Jonathan Swift, from his Gulliver's Travels
Hat tip Johan Norberg, who points out, in his new(ish) book Progress, Ten Reasons to Look Forward to the Future, that "a hundred and fifty years ago it took twenty-five men all day to harvest and thresh a ton of grain. With a modern combine harvester, a single person can do it in six minutes." I wonder how many of you ever pause to give thanks to Hiram Moore, Alfredo Rotania, Hugh Victor Mackay, George Stockton Berry, and the Baldwin Brothers.

Thursday, 29 April 2021

"China’s future will depend on which tendency wins out in the end."


"Homo sapiens is a cooperative species. Compared to many other animals, we are not particularly strong or fast, we don’t have armour, we can’t fly and are not very good at swimming. But we have something else that gives us an overwhelming advantage: we have each other....
    "Man is a trader by nature. We constantly exchange know-how, favours and goods with others, so that we can accomplish more than we would if we were limited to our own talents and experiences....
    "Present-day globalisation is nothing but the extension of this cooperation across borders, all over the world, making it possible for more people than ever to make use of the ideas and work of others, no matter where they are on the planet. This has made the modern global economy possible, which has liberated almost 130,000 people from poverty every day for the last twenty-five years....
    "[A]uthoritarian China is not a counter-example to the case that progress depends on openness. When China was most open it led the world in wealth, science and technology, but by shutting its ports and minds to the world five-hundred years ago, the planet’s richest country soon became one of its poorest. China’s present comeback is the result of a new, partial opening since 1979, and it is doing spectacularly well in the areas that have been opened, and failing miserably in the ones that have not. Chinese businesses competing on world markets have lifted millions of workers out of poverty, but protected state-owned enterprises are destroying wealth in growing rust belts. When Chinese scholars work in areas the party approves of, they end up in prestigious science journals, but when they sound the alarm about a new virus or something else that embarrasses its leaders, they end up in jail. China’s Communist Party wants both the benefits of openness and the certainty of control. China’s future will depend on which tendency wins out in the end."
          ~ Johan Norberg, from his book Open: The Story Of Human Progress

Friday, 29 January 2021

#HumanProgress: 'Lowering the Drawbridge'



From the book review by The Economist:
... Human history, in Mr Norberg’s telling, is a cacophony of drawbridges being lowered and then raised. Mathematics and medicine flourished under the cosmopolitan Abbasid caliphate, but froze when religious conservatives won control. By driving out Jews, Muslims and heretics, he argues, the Inquisition helped impoverish Spain (between 1500 and 1750 the Spanish economy actually shrank). 
China’s Song dynasty, which welcomed Muslim traders, Indian monks and Persians, developed paper money, water-powered textile machines and the makings of an industrial revolution 400 years before the West. But later dynasties turned inward and stagnated. Ming officials smashed clever machines, banned overseas trade on pain of death and curbed movement within China itself. The Manchus were even worse: to prevent contact with the outside world, in 1661 they forced the whole population of the southern coast to move 30km inland. A century later the Qianlong emperor banned or burned any books that seemed sympathetic to previous dynasties, including a great encyclopedia of economic and technical matters. 
The author is often amusing as well as illuminating. Genghis Khan was a vicious warlord, but his domestic policies “would today open him up to accusations of being a politically correct, latte-drinking virtue signaller”. The Mongols practised ethnic and religious tolerance, which is one reason why they were so effective. They promoted skilled fighters, engineers and administrators of all backgrounds. Of the 150,000-strong horde that invaded Europe in 1241, only around a third were ethnic Mongols. Habsburg soldiers were surprised to find that one captured officer was a middle-aged literate Englishman, who had fled persecution for heresy at home and sought refuge among the more open-minded Mongols. 
All regions have had rulers who tried to preserve stability by shutting out foreign influence. The key to thwarting them has often been for the ruled to vote with their feet. Early modern Europe was no more advanced than China, but power was more dispersed, so thinkers who offended one prince could simply move. Hobbes wrote Leviathan while in exile in Paris; Locke and Descartes went to Amsterdam. Their books could always be printed somewhere, and so were impossible to suppress. 
Backlashes against openness are inevitable because they are rooted in human nature, Mr Norberg contends. Human brains evolved over millennia in which disruptive change often meant death; mutually beneficial exchanges with strangers were rare. If the past 300,000 years of history were compressed into a single day, it would not be until the final minute that steady material progress, fuelled by disruptive innovation, took off. Small wonder people’s instincts are so conservative. When threatened, they seek shelter within their tribe, which is why demagogues try to scare them. Fear wins elections. 
[Norberg's] book ends on an optimistic note. Populist demagogues eventually lose power because they are hopeless at governing. Four in ten wind up being indicted for corruption, by one count. Citizens get used to change: today American Muslims are as tolerant of homosexuals as the country was overall in 2006. The open society “may yet be saved,” Mr Norberg concludes. 
Mr Yglesias makes a bold case for openness in his own country. If America made both child-rearing and immigration easier, its population could in time swell to 1bn. It would thus remain the pre-eminent power, outstripping China and India. A bigger America would make for a more innovative and democratic world, he argues. 
But wouldn’t an America of 1bn people be horribly crowded? No, it would be as sparsely populated as France is now. Even popular cities could accommodate many more residents if building codes were less restrictive. Enlightened visa rules could revive declining towns. Congestion could be eased with policies that have worked elsewhere, from road pricing to better railways. 
Mr Yglesias is swimming against the tide, and knows it. He notes that a recent immigration bill backed by Donald Trump is so restrictive that it would not let Kazuo Ishiguro, a British Nobel prizewinner, apply for a work visa unless his job paid $240,000 or more. Yet as Mr Norberg shows, political tides can change. 
This review appeared in the Books & arts section of the September 10, 2020, print edition under the headline "Lowering the drawbridge." Hat tip Tony Morley