Saturday, 29 September 2007


I know that we've got to say "allegedly" in these cases but this alleged attack allegedly took place in a courtroom!


Dollars and sense

I've mentioned these folks before but would remind readers that an excellent background to the weekend surfing is listening to the Financial Sense Newshour.

In particular I would recommend this week's Dollar Roundtable.

It's scary stuff but I expect that the problems here in the UK are at least as worrying as in the US.

Friday, 28 September 2007

Poverty of ideas

The latest issue of Economic Affairs features several articles on poverty. How about this from Chris Sarlo (of Nipissing University, Canada)?
Respondents were asked what poverty means to them and were given several statements to choose from. Almost 70% of respondents chose statements close to a "basic needs" concept of poverty: that is, they felt that poverty meant either, "not having enough to buy basics like food and clothing", or "having to struggle to survive each and every day". Only 1.8% selected an answer ("having a lot less than everyone else") which reflected a purely relative notion of poverty... while academics often prefer relative poverty measures, that preference' "does not always coincide with popular conceptions of poverty".
I'll say it doesn't always coincide. 1.8% to 70%!

It seems that academics almost invariably use the relative poverty concept that is rejected by most normal people. I suggest that most academics like the relative poverty definition because they themselves are usually welfare recipients who are defending their own class interest. In Britain, the exceptions would be those employed by the University of Buckingham.

A common measure of "poverty" used by academics and other members of the ruling class is 60% of median income. That produces some wonderful possibilities.

Let's imagine a community of three people. Their salaries are:

A 1,000
B 2,000
C 9,000
The average (or mean) is 4,000, but the median (middle value) is 2,000. 60% of the median is 1,200 - therefore A is in poverty. He is "deprived", even in the event of the unit of currency being tons of gold!

But it gets better. If C emigrates, the median falls to 1,500 (that's how the median of two numbers works out). 60% of the median is now 900 and lucky Mr A is now no longer poor. Yes, the departure of the richest member of the community results in poverty being abolished!

A thought occurs to me. Instead of sucking up to Scotland's millionaires like Tom Hunter and Tom Farmer why doesn't Alex Salmond kick them out of the country thus making us all so much better off?

29 again

I've been a bit under the weather recently - hence the lack of posts.

I'd like to thank Iain Dale (and his panel of judges) for this:


Number 29! Nae bad...

Saturday, 22 September 2007

An open letter to Alex Salmond

Dear First Minister,

We met briefly at the Edinburgh Book Festival last month and I mentioned that I was one of those former Conservative voters who had switched to the SNP.

I’d like to draw your attention to an opportunity for Scotland.

Over the last couple of days there’s been an unprecedented outburst of anger in the world of British political websites. What’s happened has united people across the entire political spectrum. The full details can be read:


and also:


Briefly, two bloggers wrote articles about the Russian/Uzbekh billionaire, Alisher Usmanov, and his lawyers successfully persuaded the hosting company to close down the two sites. But here’s the shocker – the hosting company also closed other sites on the same server even though the owners of those sites had never written a word about the issue at hand. Sites shut down include those of Labour councillor Bob Piper and Conservative mayoral candidate Boris Johnson MP.

The hosting company has clearly panicked in the face of Britain’s particularly harsh libel laws that strike at the heart of freedom of speech.

But of course we have a separate legal system here in Scotland and therein lies the opportunity.

The modern economy depends on freedom of communication and that is one reason why the United States is so predominant in the world of IT and other industries of the future. The First Amendment of the US Constitution protects freedom of speech. More recently, Section 230 of the US Communications Decency Act has added the following provision:

No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.

That seems fair to me.

Scotland can gain a competitive advantage by introducing robust laws that protect freedom of speech for both individuals and companies.

Why not go for it?

You wouldn’t want your website to be shut down like Boris Johnson’s.

With best wishes,

David Farrer

Friday, 21 September 2007

More numbers

I had a go at this quiz that I found on Megan McArdle's site.

I was quite pleased to get 54 out of 60 answers correct which is apparently much better than the typical Harvard man. Five of the six errors concerned fairly obscure questions on American history but the sixth was number 58:

"What is a major effect of a purchase of bonds by the Federal Reserve?"
Outrageous, I thought. I know I'm right! Just wait till I find the appropriate texts and I'll blast those damned Keynesians. But then I heard a voice from the past - always read the question. I'm afraid that I'd read it as a sale of bonds. Oh dear. I suppose that it was number 58 and I was getting tired.

Some of the comments were very interesting:

This Canadian scored 80%. I'll bet very few Americans would score that high on an equivalent Canadian test.
As others pointed out, Americans would know a lot more about Canada if the respective population sizes were reversed. It's not unlike the situation in the UK, I think.

Scots know far more about England than is the reverse. I'm constantly amazed about how many otherwise sensible English folk think that we all live in Glasgow (I love the place by the way), sound like Rab C Nesbitt, occupy a council house, are on the dole and have never paid a penny in income tax. Of course, the resource-rich Canadians are having a quiet laugh now that the value of their Dollar has overtaken the American one. Who knows what the future will bring here...


It was nice to read that F&W has been placed at number 7 in Iain Dale's list of Top Twenty Scottish Blogs.

Thanks to Iain but even more so to Grant Thoms of Tartan Hero who did the actual selecting.

Grant writes:

I have to say that the political alignments which were posted on Iain Dale's Blog are not mine.
I'd noticed before that Iain lists me under the Conservative section as well as the Scottish one on his blog. I am of course a libertarian rather than a Conservative. For the record though I had always voted for the Tories until this year. In May I voted Conservative in the Edinburgh City Council election but SNP for the Scottish Parliament.

Tuesday, 18 September 2007

Where's Gordon?

That's what everyone is asking.

It couldn't be, could it, that he's about to make a really big announcement?

Along these lines:

Some of you have been concerned about recent financial news. You may rest assured that I've been giving this matter my full attention.

I'm pleased to announce that I have come back from Frankfurt, with this bit of paper, signed by Herr Hitler Frau Merkel, in which she has agreed to the United Kingdom's immediate adoption of the Euro.

Don't worry; the pound in you pocket will not be affected. It will just have a new name. For one pound, you now have one Euro.

There's more good news. When the rest of Britain's gold is sent to Germany I have arranged for it to be shipped from Tyneside, not Tilbury. Those Labour-voting Geordies will need all the jobs they can get.

Thank you all. Good night and God save bless Britain.

Sunday, 16 September 2007

Rock of Ages

I'd noticed this too in Edinburgh:
The majority of people queuing were middle aged or retired.

(And "a bit boisterous" in Glasgow!)

On Friday an explanation might have been that younger depositors would be at work, but the same age profile could be seen on Saturday.

I then started to think that depositors would generally be older; their savings financing the mortgages of younger borrowers. That may well be the case. But is there another factor?

On Friday morning I risked my blood pressure by listening to the BBC's Today Programme. The fascinating part was when a reporter told us that he'd spoken to the oldest person in a City bank and even he couldn't remember a similar bailout.

The last one was in 1973.

Back in those days bank employees weren't usually graduates. Let's assume that most joined a bank at 18 although for some it would be at 16. That means that you'd now have to be 52 (or possibly 50) to have worked in a bank in 1973. And not a single person of that age could be found!

We all know that banks have a policy of getting rid of people older than 50 - except for the senior directors of course. Perhaps the chickens are now coming home to roost. Banks are staffed by youngsters who've never known tough times. Similarly, borrowers are all-too-often youngsters who probably don't even realise that credit cards and mortgages are normally financed by the wrinklies. The problem is that much of Britain's profligate borrowing and spending hasn't been financed from savings but by credit creation through the fiat monetary system.

Youngsters probably think that wealth is created free by nice, smiling politicians like Tony Blair and David Cameron or even by the no-longer-scowling Gordon Brown. The wrinklies are sufficiently in touch with reality to know that's not true and that's why they're getting their money out. It's a pity some of them weren't still employed by the banks.

Saturday, 15 September 2007


Mrs F&W asks an interesting question.

When Northern Rock phones the Bank of England for some of our dosh, will they be told: "That'll take three or four working days to be cleared into your account"?

Northern Rock

I'm dealing with the comments on the previous item in this new post.

Bill writes:

It would hardly be possible to run a modern society, whether 'capitalist' or 'soclialist' without the use of 'paper and bytes'
I agree entirely. The question is though: What do those papers and bytes represent? At present they represent the promises of politicians.

Bill also writes:

The gold standard whilst based on a finite resource was based on a commodity with little intrinsic value
I'm not suggesting that money be based on something having intrinsic value.

Why not?

Because nothing has intrinsic value:

The first step in understanding the Austrian concept is to realize that value is entirely subjective, rather than something objective. Value, therefore, is something that each individual person weighs on a purely private, not a public, set of scales. To try to find something akin to a yardstick for distance or a balance for weight, by which to measure value so that two or more persons can see and agree on a "just price," is futile. There is no such thing according to the Austrian concept of value. To try to find value that way is like trying to find the trail for an animal, and hence find the animal, when there is no such animal.
According to the Austrian premise, then, value is not intrinsic in the sense of being susceptible of objective measurement by any means whatever. Certain qualities of things are, to be sure, intrinsic and measurable, and affect value for this or that person. But they affect value in different ways for different persons and are at best only a part of the origins of value.
The reason that gold and silver became used as money was not because they have intrinsic value - they don't - but because millions of people over thousands of years and in all sorts of societies made individual decisions to value those minerals. Value is subjective.

Friedman argued in favour of a gradually increasing supply of (government) money - to keep pace with economic growth. But it's not turned out like that. The UK and US are "enjoying" monetary growth of around 13% PA. Hence the asset booms in housing and shares. We are now suffering the consequences.

More realistically, Hayek wrote in favour of a currency backed by a "basket" of commodities.

But I still don't trust any politicians having power over our money. I'm with Murray Rothbard:

The book made huge theoretical advances. He was the first to prove that the government, and only the government, can destroy money on a mass scale, and he showed exactly how they go about this dirty deed.

Rothbard shows precisely how banks create money out of thin air and how the central bank, backed by government power, allows them to get away with it. He shows how exchange rates and interest rates would work in a true free market. When it comes to describing the end of the gold standard, he is not content to describe the big trends. He names names and ferrets out all the interest groups involved.

James Higham is correct. The current system was set up by financial cabals using the power of the state for their own ends. I can see why some folk think that socialism is all about "the government helping the poor". In reality government spending is a case of someone living at the expense of someone else. The first "someone" is often richer than the second. And so I say to Martin that "immediately after the United Kingdom suffering a bank run" is exactly the occasion to examine the cause. And the cause isn't capitalism (free markets and property rights) but its opposite.

Friday, 14 September 2007

Crisis of socialism

For some extraordinary reason Chris thinks that this is a "crisis of capitalism"

Capitalism is not as stable and self-sustaining as it seems. It needs the state to step in sometimes to protect it.
On the contrary, we are seeing a crisis of socialism. The entire monetary system is the creation of politics with money being produced out of thin air. A capitalist monetary system would be based on real assets and not on a witch's brew of paper and bytes. Just because many of the beneficiaries of the fiat monetary system are rich and powerful doesn't make it capitalist. As always, the poor suffer most from socialism and its inevitable breakdowns.

Wednesday, 12 September 2007

Monday, 10 September 2007

Great chieftain o' the rugby race

Mrs F&W and I were married in Park City, Utah - by the Sheriff of Summit County, no less. We stayed in the Thatcher Room!

You can imagine our surprise when we read this in yesterday's Mail on Sunday:

It took a man from Park City Haggis rugby club, Utah, winning his first international cap, to complete a truly miserable night for English rugby.

Sunday, 9 September 2007

You'll have had your chips?

Earlier in the week I wrote a few words about Belgium:
It is made up of 60% Dutch-speaking, free-market oriented Flemings in the north and 40% French-speaking, predominantly Socialist Walloons in the south. The Flemish economic output per person is 124 percent of the EU average, and there is growing resentment that Flemish taxes are being used to subsidize the poorer French-speaking south, where economic output is 90 percent of the EU average.
I also mentioned that I'd have some more to say on the Cockpit of Europe for what's going on in Belgium may well affect us here in Scotland.

The ongoing political crisis in Belgium is caused by the deep divisions between the Dutch and French communities. And unsurprisingly France itself is taking an interest:

Yesterday the conservative French newspaper Le Figaro published a column by Alexandre Adler in which Adler urged the French President Sarkozy to prepare for the annexation of Wallonia by France. Adler said Sarkozy should not miss this historic opportunity “to govern an enlarged France.”
Were that to happen we could expect the Flemish part of Belgium to join the Netherlands.

There is a catch however:

For Brussels, “historically a Flemish, but today a predominantly French-speaking and simultaneously a European and cosmopolitan city,” Sarkozy envisions a new status as European Capital District. “This will allow Brussels to become a truly quadrilingual capital of a united Europe. Naturally the EU will provide Brussels with the necessary funds.”

Then there is the small matter of Brussels being close to 50% Muslim Brussels having such a sizeable Muslim population...

And just how does this mess affect Scotland? Consider this view of what would happen in the event of a simple split between Flanders and Wallonia:

The fact that there would be two new states instead of a united Belgium will simply increase the number of member states from 27 to 28
Which brings us back to when I asked whether an independent Scotland would be allowed to join the EU:
I think that it's inconceivable that the EU would somehow stop an independent Scotland from joining the club. It's not just the oil, the fresh water, the minerals and the renewable energy. What matters is that we're part of what the EU considers to be theirs.
Belgium, Wallonia, Flanders and Scotland: the EU wants all of them. I maintain that an independent Scotland would be strongly encouraged to remain in the EU. Whether we should want to is quite another matter of course.

(Incidentally, if all of the above comes about France would have a population 25% greater than that of England and Eurocrats would probably have to learn Arabic.)

Saturday, 8 September 2007


Russian Destroyer
Originally uploaded by David Farrer

In Ayr Bay yesterday in connection with the Varyag memorial event.

Some of the crew were in full buying mode in Ayr's new shopping centre. One particularly mean-looking officer who carried a large briefcase grunted when I said "hello". A junior sailor smiled and nodded to me.

I didn't see any of them in the pub...

Separated at birth?

Goodness me! Doesn't Iain Dale (the one on the right!) bear a passing resemblance to Jack McConnell?

Tuesday, 4 September 2007

Oh please

I've no objection to PR in principle, but why is so much of it nonsense?
A huge regeneration of Leith Docks featuring 16,000 new homes has been unveiled in the largest planning application in Edinburgh's history.

Forth Ports, which is behind the plans, hopes the 30 year project could create about 12,000 jobs and turn the city into a "world-class" destination.

Edinburgh is already a "world-class" destination. And when I read that "Parisian-style cafes feature heavily in the plans" for this new development, I want to throw up.

For starters one would have thought that local politicians and planners might have noticed that we don't enjoy Parisian weather. More to the point, one of the main reasons why we are already a "world-class" destination is that Edinburgh has a very large percentage of the world's finest pubs. So what does the Council intend doing about that?

Yep, destroy the character of those very same pubs:

and bars would be forced to provide seats for at least 50 per cent of drinkers.
Angry Steve gets it right and he's not the only one who's angry.

So few lampposts, so many traitors...

Monday, 3 September 2007

The Raj

One of Europe's countries is becoming increasingly divided. The north and the south are at loggerheads. The Monarch is concerned that the country may split. The most populous bit of the country favours markets and is recognised as one of the most prosperous parts of Europe. The other bit is dominated by socialists and has a higher percentage of public-sector workers. But here's the shocking thing. The socialist part, despite having fewer people, politically dominates the capitalist majority.

Yes, ladies and gentlemen, I'm writing about Belgium! Welcome to the Walloon Raj:

It is made up of 60% Dutch-speaking, free-market oriented Flemings in the north and 40% French-speaking, predominantly Socialist Walloons in the south. The Flemish economic output per person is 124 percent of the EU average, and there is growing resentment that Flemish taxes are being used to subsidize the poorer French-speaking south, where economic output is 90 percent of the EU average.
Back to local matters for the time being. (I'll have more to say about Belgium later.)

I've said before that Scotland's economic situation isn't nearly as bad as is assumed by many in the English blogosphere. The former Tory MSP, Brian Monteith, has drawn our attention to this fascinating bit of information from the National Statistics:

% of UK voters paying income tax: 64.6%

% of Scottish voters paying income tax: 65.34%

By the way, the percentage of Scots workers in the public sector is 23.5% (2005-06). But what about the perception? I've lost count of the number of folk down south who seem to think that no one works up here. The fact that the figures show that Scotland isn't a British version of Wallonia (economically) may not matter. When the Brown bubble bursts and TSHTF or it's even TEOTWAWKI, we may find ourselves ejected from the Union whether we want it or not. Just as Niall Ferguson suggested.

Sunday, 2 September 2007

UFOs over Edinburgh?

Festival Fireworks
Originally uploaded by David Farrer

Festival Fireworks
Originally uploaded by David Farrer

(Other photos are on Scottish Clouds.)

Craig Murray

Craig Murray
Originally uploaded by David Farrer

I forgot to write about my final event at the Book Festival.

Craig Murray was British ambassador in Uzbekistan until he fell out with the Foreign Office over his criticism of the Uzbek regime.

We heard some interesting stories. Like when Murray was offered the position of high commissioner in Malawi but turned it down as not being a good career move. Apparently the salary on offer was half that being "earned" by the new commissioner, who also may get a peerage. Now, why could that be?

Then we heard of Murray's visit to Buckingham Palace where he got better advice about his new posting from Princess Anne - who knew Uzbekistan from her Save the Children work - than anything offered by the Foreign Office.

Quite different from Jack Straw's message to Murray at the end of his ten-minute send-off chat:

"Well, when you get to wherever it is you're going, tell them that I'm often thinking about them"

Still spinning

Blair may have gone but the Blair Broadcasting Corporation is still spinning:
The Scottish Executive is to be rebranded as the Scottish Government, it has been confirmed.
No - it's already been rebranded, as we can see from the photo and as we can read about in the very same article:
A new Scottish government sign has been put in place outside its Victoria Quay building in Leith, replacing the existing Scottish Executive sign.
I always hated the Labour government's policy of leaking news to friendly journalists who could then write: "The minister will announce today..." How did they know that the minister wouldn't be struck down by a bolt of lightning before making his pronouncement? I suppose the weather's been nationalised just like the BBC. When journalists say that something will happen, the event should be in the future and should definitely occur.