Saturday, 23 February 2008

Astrology for Libertarians.

Imagine the utility we could derive from a market in markets. What we'd do is to create a market where people could trade in futures contracts about the future value of other markets. No longer would we have to appoint specialist advisors to warn us of potential crashes or booms: we could just sit back and let the market predict. The Stock Market Crash of 1929 surely would have been predicted by our market of markets, and so we could have avoided all of the deleterious effects with a little forward planning.

How about a market in disease? No longer would doctors have to spend millions of taxpayers' money to vaccinate entire populations: we could use the invisible hand of the market to predict which individuals would get SARS or AIDS, and then target them before the disease even has the chance to spread.

I'd like to see a market in people being struck by lightning. Even though relatively few people get struck by lightning, it would be useful to know when, where and who lightning will strike so that we can plan in advance to place mobile lightning-rods nearby: this is another market which will save countless lives.

So overall, I endorse wholeheartedly the plans of some of our tenured libertarian friends to construct an earthquake market so that we can predict earthquakes before they happen. I also find particularly interesting and useful the suggestion in the comments that seismologists should be banned from this market for having "inside information". As the Thatcherite/New Labourite/Cameronite project for markets in everything rolls on, I hope they will take into account the almost untapped predictive power of markets shown here.

Monday, 18 February 2008

Northern Rock Nationalisation: Statism, not Socialism.

So the government has made its move: Northern Rock is to be nationalised.

What are we to make of it? The (most recent) Tory line is that Labour dithered and dithered, costing taxpayers millions whilst making up their minds. But what seems to have happened is that the Labour Party were unwilling to nationalise Northern Rock if a buyer could be found on reasonable terms, but the jokers at Virgin wanted a ridiculously good deal, including protection from risk in case of the firm collapsing again.

In the government's favour, we are not simply socialising the risk and privatising the profit: instead both will now be placed in a half-way position. Commercialisation at arms-length is basically the same deal as devolution in Scotland: the firm does the business and we pick up some of the cheques at the end of the day. It's not socialism, which would demand that working people both within and without the company would have control over it. It's simple statism, and in the circumstances probably a good solution to a difficult problem.