The Bear’s Lair: China should adopt Song Dynasty virtues

China can claim to have invented in its Song Dynasty (AD 960-1279) the policy of easy credit that has led to its recent real estate debacle. Yet the Song’s use of paper money was much more careful than that of today’s China (or of its decadent Western competitors). In other respects: its respect for merit, its generally pacific nature and its technological and cultural innovation, Song China was a model, far ahead of its contemporaries. A return to Song virtues would be a Chinese development we could all welcome. Continue reading

The Bear’s Lair: Losers from higher rates

The August Consumer Price Index’s rise of 5.3% over the preceding year demonstrated that inflation is far from a transitory phenomenon. In these circumstances, it is likely that the Fed will attempt to hold rates close to zero for as long as possible, and then raise them too slowly to prevent inflation from accelerating further. This environment, of rising nominal interest rates and steadily or even increasingly negative real interest rates, is likely to have some anomalous market and economic effects. In this piece, I shall attempt to determine what those effects will be, as a warning to readers. Continue reading

The Bear’s Lair: 2019, 1999, 1928 or 1825?

It is becoming increasingly clear that, at some time before AD 5,000 humanity will enter another Dark Age, in which life will be “nasty, brutish and short,” living standards will be abysmal, and both human potential and human knowledge will be very limited. If we are very lucky, we will eventually emerge from that dark age. Looking back from the new era, using the best archaeological, historical and economic tools available, what year do we think will be seen as the absolute apogee of our current civilization, our “Age of the Antonines”: 2019, 1999, 1928 or 1825? Continue reading

The Bear’s Lair: Social media make crowds madder

Charles Mackay’s 1841 classic “Extraordinary popular delusions and the madness of crowds” established the truth that crowds communicating with one another through the media can make “mad” decisions, in investment and other areas. Modern social media have immeasurably increased the amount and intensity of such communication; there are clear signs that it has also increased the irrationality of investment and other decisions. Continue reading

The Bear’s Lair: The need for space travel is ever-growing

This planet is becoming dangerous and unpleasant. The Covid-19 pandemic appears very likely to have been the result of biological warfare experimentation (albeit possibly released by accident.) Nuclear proliferation is becoming increasingly a threat, as too many nuclear powers come to have lunatic allies. While global warming is only a minor threat at most, the policies to combat it proposed by ever more overweening governments are existentially threatening, as are governments’ intrusions on free speech through the tech giants. Humanity needs a new home where it can hide from this world’s multifarious perils – and fast! Continue reading

The Bear’s Lair: History shows infrastructure has diminishing returns

In my researches into the Industrial Revolution, I have been looking at British canal building. There were three “canal manias” in 1766-75, 1786-93 and 1816-25, but only the first yielded truly attractive investments and economic gains, while the last wave lost money in general. This decline in returns for the later investments has lessons for us today: over-investing in infrastructure density is a huge waste of money, especially if undertaken by the government, and a rocket to Mars is almost certainly a better investment than yet another high-speed train. Continue reading

The Bear’s Lair: With Coolidge principles, we can all keep cool

The Intergovernmental Panel on Climate Change’s Physical Science report AR6, released August 9, raised the usual calls for panic and draconian action from that majority of the media and the left for whom this is a religion. Yet on examination, its statistics were decidedly unalarming, and suggest we can easily address the modest long-term problem of global warming. A Coolidge-era approach, with minimal government, maximum market involvement and an absolute refusal to panic seems most likely to keep us prosperous and cool. Continue reading

The Bear’s Lair: Live like Whigs, think like Tories!

Several times this column has wished for a sharp decline in global population, which with the advent of superior robotics could lead all of us to live like 18th Century Whig lords, in lavish parklands manned by robot servitors. Yet I have now learned that the original Whig Supremacy of 1714-60 led to a half century of pause in the burgeoning Industrial Revolution, and today economic and intellectual progress is similarly slowed by wokery generated by a Whig-like elite class. I therefore propose a new and better Utopia for 2200: we should live like Whigs yet think like Tories! Continue reading

The Bear’s Lair: Cold Wars can be good for business

The chilling in relations with China since 2017 and the discovery that China may well have been responsible for the release of the COVID-19 virus is forcing the world to accept that the globalization and free trade world of 1991-2015 is no more. Instead, with China an authoritarian Communist society that seeks domination and does not play by the rules of international trade, we are back in a Cold War like that of 1945-91. From the last Cold War, we can learn important lessons to win this one and prosper while doing so. Continue reading

The Bear’s Lair: Atlas Has Developed Spinal Injuries

Ayn Rand’s “Atlas Shrugged” was published in 1957, yet its atmosphere is that of the late 1930s (when much of it may have been in first draft). Trains are the overwhelmingly dominant means of transportation and coal the main source of energy; everywhere outside the United States is run by dictatorships and the overall impression is of Art Deco rather than the brutalism of the 50s. Moreover, her businessmen are impossibly noble, with even the largest companies (run by good guys) dealing fairly with suppliers, competitors, employees and the public. Yet the overall zeitgeist of the book, with a mighty economic power running down slowly and inexorably until it comes to a standstill, feels remarkably appropriate today. Continue reading