The World Economic Forum meeting last week was interesting in that, for the first time, some dissent appeared to the WEF’s party line. That party line is not “corporatism” which requires private property (albeit owned by corporations). With its slogan of “You Will Own Nothing and Be Happy” the WEF negates private property and represents Communism pure and simple. Far from being exterminated in 1991, that pernicious doctrine has advanced to take an ever-greater hold of the world’s central institutions. Eliminating them is our most important ideological task today. Continue reading →

There is a central contradiction in modern capitalism. Markets have become concentrated in a few ultra-large companies, which then attempt to broaden their spectrum of employees through “diversity” initiatives. Yet the oligopoly of large companies diminishes competition and harms consumers, while “diversity” weakens trust within the corporations and increases communication costs. How much better was the traditional capitalist model, in which firms were small and oligarchic, with senior employees from a narrow social and geographic background! In such a system, trust is high and communication efficient, while the plethora of competitors ensures consumers of all types and backgrounds are optimally served. Continue reading →

Mexico appears to face a dismal future after its election on 6 June this year. The leading candidate Claudia Scheinbaum is a devoted follower of current President Manuel Lopez Obrador, and according to current polls is likely to win and thereafter follow his hard-left policies. The opposition candidate Xóchitl Galvez combines the forces of both previous governing parties, the PRI and the PAN, but appears distressingly moderate (and unlikely to win). Of all the nominal democracies in the world that in practice have entrenched socialism, Mexico most needs the breath of fresh air that the new President Javier Milei represents in Argentina. Continue reading →

The interminably prolonged era of zero-interest-rate “funny money” in 2010-21 produced an unparalleled tsunami of “malinvestment” – investment that was not economically justified in normal conditions – in both the United States and throughout the world. This tottering ziggurat has held up in 2022-23, despite soaring interest rates. But there are signs that, as 2024 begins, asset holders’ ability to prop up their crumbling portfolios is reaching its limits. Providing the Fed and other central banks don’t wimp out too quickly, the collapse of asset prices may finally occur this year. It will be very welcome. Continue reading →

The wooly-headed economist Henri de Saint-Simon (1760-1825) divided humanity into two classes: the laboring classes (which included merchants and industrial management) and the idling class, who should be suppressed. Investors were included in the idling class, as Saint-Simon failed to recognize the importance of capital allocation in economic development. Keynes, with his “euthanasia of the rentiers” had a similar blind spot. It is time to refute these deluded thinkers: investors have a key role, even the most important role in the economy, and their intelligence and knowledge cannot be assumed and must be worked for. Continue reading →

The Biden Administration’s Lina Khan, head of the Federal Trade Commission, is one of the administration’s very few bright spots, intellectually speaking. She has overthrown the existing merger jurisdiction, set up by the late great Judge Robert Bork in the 1980s, to question why the FTC should let through mergers as a matter of course. It is a very good question; countless studies have shown that most mergers destroy value rather than enhancing it, reliably enriching only the top managements of the companies concerned. Should the default position not be to ban mergers, and how different would the world look if we followed that approach? Continue reading →

It was French President Charles de Gaulle who in 1965 referred to the dollar’s position as the world’s leading international reserve currency as conferring “exorbitant privilege” on the United States. De Gaulle’s words represented his usual mixture of deep and subtle wisdom and fierce resentment of the Anglo-Saxon powers. For forty years after he spoke, the “exorbitant privilege” seemed real and unassailable, with huge benefits to the U.S. economy. Now thanks to a succession of inept administrations and the missteps of President Biden, it is fast disappearing. There are limited possibilities to replace it; but replaced it will be. Continue reading →

Much has been written about the end of the bond bull market of 1981-2021 and the return to higher interest rates in the future. In this environment, conventional long-term bonds are a poor investment – their value is eroded by inflation and their prices will fall if interest rates rise. However, there is now an alternative, available in large quantities: Treasury Inflation Protected Securities (TIPS) and their equivalent in Britain and several other countries. Their pricing eccentricities have only recently established themselves, and there are some investment rules that may be helpful. Continue reading →