The Bear’s Lair: Extraordinary popular delusions and the madness of media

There are many factors that make rational economic decision-making difficult. One of them is that the media and educated opinion, mostly wholly ignorant of the laws of economics (or preferring to ignore them) often has violently misguided views on a subject, which it uses its intellectual power and marketplace megaphone to impose. William F. Buckley declared in 1963 that he would rather be governed by the first 2,000 names in the Boston telephone book than by the Harvard faculty; the problem with that solution is that even without appointing the faculty to govern, it still has an excessive influence on the views of the telephone book’s “Aardvark to Adamson” contingent.

A classic example for this was the agitation about the British “window tax”. Originally imposed in 1696, it was a tax on a dwelling’s windows, with no tax payable for dwellings with less than 7 windows. The tax endured for 155 years, with general approval from free-market economists like Adam Smith, who regarded it as relatively inoffensive since the taxman did not have to enter the dwelling to assess the amount of tax payable – in this respect, it was greatly superior to the previous “hearth tax” in which taxmen had to enter the dwelling to count the number of hearths.

Then in 1850, the media and intelligentsia got involved, spinning endless sob-stories about how the window tax was ruining the health of the working classes. No less a name than Charles Dickens — “Mr. Popular Sentiment” as Trollope called him in “The Warden” – mounted a campaign, denouncing the tax in the pages of his tame magazine “Household Words.” On the face of it, this was nonsense; houses with 6 windows or less were exempt from the tax, so that modest workmen’s cottages would not have paid it. The one potential liability for the poor came from tenements, becoming common in industrial areas; since the tax was levied on the entire building, a tenement with 12 windows could have subjected all of its perhaps 6 families living there to the tax. The tax was thus repealed in 1851 by Lord John Russell’s Whig government.

The irony is that, while the window tax did not significantly increase the health risks in early Victorian cities, there was one universal feature of the period’s housing that did cause health risks: the drains. These affected rich and poor alike; the wealthy and well-connected Harriet Arbuthnot, author of the period’s best Diaries, succumbed to cholera in 1834, at the age of only 40, leaving her (probably Platonic) admirer the Duke of Wellington and her much older husband Charles Arbuthnot to live together in lonely mutual consolation for the next 16 years, until Arbuthnot died in 1850.

The physician John Snow discovered the connection between cholera and inadequate waste-water systems in Soho in 1854; after the Great Stink of 1858 something was finally done about it, with Derby’s Tory government passing legislation that led to Joseph Bazalgette’s great sewer system, finally completed in 1875. That solved the cholera problem in London, although the jerry-built, corrupt and overpopulated New York was still suffering a significant cholera outbreak as late as 1910-11. Thus, the agitation against the window tax was not only misguided but diverted attention and resources from a far more serious health problem, about which nothing was done until several years later.

In our day, there are many examples where intelligentsia and media delusions are foisted on ordinary people, generally to their considerable cost. The most prominent of these is the climate change religion, believed in intently by most intelligentsia, backed rabidly by a coterie of well-paid “scientists” and treated with due skepticism and even hostility by most ordinary people who are discovering that their living standards are the designated victims of its galactic costs.

Moderate versions of climate change concern are firmly quelled by the media, moderate adaptive solutions to its potential impact, such as propounded by the Swedish environmentalist Bjorn Lomborg, are derided and rejected. Instead, the media/intelligentsia complex forces on us top-down dirigiste central planning that will do little to address any climate change that might occur, but is certain to upend everybody’s lives, forcing people to submit to the diktats of the climate commissars.

Depending on the political system concerned, media/intelligentsia agitation on climate change may leave citizens with no way of opting out. Boris Johnson, in Britain, was elected at the end of 2019 on a robust program of “Get Brexit Done.” Since his election he has dilly-dallied with Brexit while imposing absurd climate change targets, abolishing the internal combustion engine from 2035 which impose vast cost on his people, who have no alternative to vote for since the major opposition parties are even more lunatic on the subject.

In Slovenia, the not-very-ex-communist left competes politically by inventing a new party free from the corruption and chaos of their most recent government, which all the power of their one-party media is then devoted to boosting, in order to keep the admirable center-right Janez Jansa out of power. This time, even though Jansa has governed admirably for the last two years, managing Covid-19 well, boosting the economy, and removing some of the gigantic economic barnacles left over from Communism, he was defeated by another new party. This one has been in existence for less than three months and is devoted to combating climate change and “freedom” – the foolish Slovenian electorate will find out the hard way that the two are utterly incompatible with each other.

Another distortion produced by the media and the intelligentsia, though more by omission than commission, is their utter failure to propose reform of the U.S. charitable tax deduction whenever the fisc needs more revenue, which it does increasingly desperately. The media applies a thick layer of syrup to the concept of charities, implying that all charitable tax deductions are made with the most altruistic motives. It fails to note that of all the tax loopholes in the code, this one is most skewed to the ultra-rich, and since the tax reform of 2017, is the only major tax loophole that is not capped in some form.

Treat charitable tax deductions like mortgage interest, by all means allow the middle class to deduct their gifts to their church. But set a relatively low cap on the amount deductible, so that the very rich cannot acquire social status at the expense of ordinary taxpayers. Furthermore, many charities are either fronts for left-wing causes or outright scams; capping the charitable tax deduction would at least reduce the prevalence of these excrescences on the system.

Another area in which the media/intelligentsia was allowed to govern included Brexit, where it almost persuaded the British people to remain within a European Union that did little for Britain economically and was attached to an obviously tyrannical and destructive central bureaucracy (its current attempt to “punish” the democratic, recently re-elected government of Hungary being a case in point.)

Yet another was the Covid-19 epidemic, where the statist nostrums of public sector health bureaucrats, complete with wildly inaccurate computer models as in the “climate change” case were allowed to disrupt the lives of the world’s population for two years. China is a Communist dictatorship; if it wants to imprison its citizens and lie about the consequences of its actions, that is its prerogative, but no society that calls itself free should ever allow such a monstrous imposition again.

The intelligentsia and the media have firm, well-formed even rigid views on how the rest of us should be allowed to live. In a free society, these views are pernicious and destructive, and must be ignored.

(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)