There but for the Grace of God

I catch the flight home in half an hour but I must say seldom has any trip of mine been so complete. All my interests – economic, political and historical – came together so seamlessly that I only wish life was always like this.

Economically, the meeting on J.-B. Say and the Entrepreneur was an outstanding success. This being the first such meeting, it is of major significance that there is a casting about for some kind of successor paradigm to the fault-ridden neo-classical synthesis so accurately represented by Paul Krugman and Joe Stiglitz. As just a minor point, what became evident is that economists are useless at predicting the future so have substituted GDP estimates for actually knowing anything at all about the economy. If I tell you that Australia over the past twenty years grew by 50% and China by 150%, you would not have any idea about what either was really like, the kinds of economy each is or what is actually going on. Economists have substituted statistics for actual knowledge. It is all pretty useless, but if your aim is to pull wool over people’s eyes about what is taking place, GDP is a great number since it is almost meaningless as a statement about anything of significance.

Politically, it has been amazing to be here for the transition to a more market-oriented socialist Prime Minister. Every country is a hopeless case since the freeloaders have now overrun the productive. But if you are trying to manage the place, even the most dense political leader trying to re-engineer a recovery cannot help noticing that only those who make a net contribution to output actually create more value than they use up. A tremendous amount of capital to run through in our Western economies, but we are managing to do it. Fascinating to see it all in action in a place you would not normally expect it.

Historically, there are two sides to it. In relation to why I am here, I am part of a group that is trying to save Jean-Baptiste Say’s factory in Auchy-les-Hesdins for posterity. There are not many – any – places in the world that are actually historical sites in which economic issues are at the forefront. Auchy is astonishing in that it combines an ancient cotton mill – where the waterfall that ran the mill can still be seen – with the writings of one of the greatest economists of all time. If you are in France in the north-west around Calais or Normandy, and you have any interest in these things at all, you must come visit. The website I am told is coming but you should see it for yourself. The best way to describe the positioning of Auchy is to note that it is half way between Azincourt and Crecy. See all three, but if you have an interest in economics and its history, this place will astonish you. There is nothing like it on the planet and, as with everything related to Say, is only now in the process of being rediscovered.

Lastly there has been my following the trail of historical battles, with the last few days on the WWI battle fronts. Went to Villers-Brettoneaux yesterday which is the Australian Vimy Ridge. Very moving places both of them. Two things I found particularly noteworthy. The first was the direction finder in the tower pointing out various places of significance on the Somme battle grounds. But amongst the 20 miles to this and 30 miles to that was the arrow that pointed to 14,235 miles to Canberra. It was a long way from home for those young Australians who lie buried in the fields of France.

The other was a grave to some young lad who died on this battlefield in 1918. His name was S. Keates. It was quite a strange moment. It is truly the case that there but for the grace of God go we all.

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19 Responses to There but for the Grace of God

  1. Ant

    “Every country is a hopeless case since the freeloaders have now overrun the productive. ”

    “Above this race of men stands an immense and tutelary power, which takes upon itself alone to secure their gratifications and to watch over their fate. That power is absolute, minute, regular, provident, and mild. It would be like the authority of a parent if, like that authority, its object was to prepare men for manhood; but it seeks, on the contrary, to keep them in perpetual childhood: it is well content that the people should rejoice, provided they think of nothing but rejoicing. For their happiness such a government willingly labors, but it chooses to be the sole agent and the only arbiter of that happiness; it provides for their security, foresees and supplies their necessities, facilitates their pleasures, manages their principal concerns, directs their industry, regulates the descent of property, and subdivides their inheritances: what remains, but to spare them all the care of thinking and all the trouble of living?

    Thus it every day renders the exercise of the free agency of man less useful and less frequent; it circumscribes the will within a narrower range and gradually robs a man of all the uses of himself. The principle of equality has prepared men for these things;it has predisposed men to endure them and often to look on them as benefits.

    After having thus successively taken each member of the community in its powerful grasp and fashioned him at will, the supreme power then extends its arm over the whole community. It covers the surface of society with a network of small complicated rules, minute and uniform, through which the most original minds and the most energetic characters cannot penetrate, to rise above the crowd. The will of man is not shattered, but softened, bent, and guided; men are seldom forced by it to act, but they are constantly restrained from acting. Such a power does not destroy, but it prevents existence; it does not tyrannize, but it compresses, enervates, extinguishes, and stupefies a people, till each nation is reduced to nothing better than a flock of timid and industrious animals, of which the government is the shepherd.”
    ― Alexis de Tocqueville, Democracy in America

  2. I am the Walrus, Koo Koo K'choo

    Great stuff Steve, thank you.

  3. blogstrop

    economists are useless at predicting the future

    Garnaut certainly is.

  4. .

    economists are useless at predicting the future

    Yet, we are expected to do so. We are even paid quite well to do so.

    What I do at work, perhaps with a Mad Monday get up:

    http://dogsmom.files.wordpress.com/2011/09/cat-in-crystal-ball.jpg

  5. Alfonso

    ‘The other was a grave to some young lad who died on this battlefield in 1918.’
    As great grand-dad, 12th Light Horse, Cairo to Damascus, the destroyers of the Ottoman Empire, said in answer to a query about any possible historic Light Horseman’s prayer….” God, if you aren’t going to help me, don’t hinder me and we’ll get on just beaut”.

    My philosophy entirely.

  6. Roger

    I catch the flight home in half an hour but I must say seldom has any trip of mine been so complete. All my interests – economic, political and historical – came together so seamlessly that I only wish life was always like this.

    There with the grace of God you went, Steve.
    James 1:17. Give thanks.

  7. Mick Gold Coast QLD

    From Alfonso at 7:37 pm:

    ” ‘The other was a grave to some young lad who died on this battlefield in 1918.’
    As great grand-dad, 12th Light Horse, Cairo to Damascus, the destroyers of the Ottoman Empire, said …”

    I heard about that stuff too Alfonso, during my teenage – mucking about in Cairo, off to Gallipoli unexpectedly as reinforcements, back to Egypt when it was done to recover their horses, ride around Jordan for a bit and off with Chauvel up into the Holy Lands (alongside T E Lawrence’s irregulars and Auda ibu Tayi’s Howietat).

    My story teller was my father. :)

  8. Rafe

    Thanks Steve!

    GDP is easy to predict using the previous GDP which usually correlates 0.9 or better which is sensational in terms of statistical association in the social sciences.

  9. Steve-I mentioned on your previous post that the word ‘entrepreneur’ is being hijacked to have nothing to do with free enterprise and everything to do with coming up with new ideas to finally achieve Equity for All. The RSA in the UK is particularly on this bent and it’s troublingly influential. http://www.rsablogs.org.uk/2014/uncategorized/bad-idea/

    Those of us on the Bad Ideas Patrol know it is ludicrous to tell young people, especially ones who K-12 has deliberately kept ignorant, that there is no such thing as a bad idea. Worth keeping an eye on from Down Under as well.

    Love your point about adding Value. It’s a crucial aspect of the Minimum Wage/ Living Wage debate that so few grasp.

  10. Rococo Liberal

    even the most dense political leader trying to re-engineer a recovery cannot help noticing that only those who make a net contribution to output actually create more value than they use up.

    But haven’t you heard Steve that societydeserves all the credit for those who succeed in life? Success is only due to inheritance or luck.. That is what the lefties constantly tell us. The whole of life and social provision must therefore be based upon the ‘poor.’ We must not strive to be better or to make beautiful things or enjoy anything good that the government didn’t provide, because that would be ‘greedy.’

  11. Peter from SA

    Yes, terrific post Steve, thanks.

    casting about for some kind of successor paradigm to the fault-ridden neo-classical synthesis so accurately represented by Paul Krugman and Joe Stiglitz.

    A couple of decades ago, the school of “economic rationalism” advised how to create a more productive economy. Since that time mainstream economics seems to have become a whole lot more left wing … e.g. the idea that climate change can be tackled by using “market” mechanisms is testimony to this. But it is an artificial market, created by the state. The belief in state-mandated solutions trumps the market every time.

  12. Gab

    e.g. the idea that climate change can be tackled by using “market” mechanisms is testimony to this. But it is an artificial market, created by the state.

    Yes but my favourite is the “when you’ve amassed a great amount of debt, borrow and spend more”.

  13. .

    But haven’t you heard Steve that societydeserves all the credit for those who succeed in life? Success is only due to inheritance or luck.. That is what the lefties constantly tell us. The whole of life and social provision must therefore be based upon the ‘poor.’ We must not strive to be better or to make beautiful things or enjoy anything good that the government didn’t provide, because that would be ‘greedy.’

    That’s such bullshit. Most on the BRW Rich List are self made.

    Which is a bloody credit to them…considering how hard the government makes it to invest, start a business etc along with protecting established, well connected firms.

  14. Rococo Liberal

    Yes, Gab, that is is a strange urge that our left-wing friends can’t resist. You see there’s all that ‘equality’ to promote and you have to care about ‘the poor.’

  15. Rococo Liberal

    You are right Dot.

    The problem with the left is that they are burnt up with envy. Envy in fact is the most evil thing in society.

  16. Token

    The problem with the left is that they are burnt up with envy. Envy in fact is the most evil thing in society.

    It is also the easiest base emotion for demogogs to use.

  17. Tel

    economists are useless at predicting the future

    I predict the Keynesians and Statists will do their level best to start another war, just like what happened to young Keats.

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