Famine speculators – the Adam Smith view

In a time of plague or scarcity, there is little love for the speculator who raises prices, and often a call for the government to intervene. Adam Smith however had this in view and observed that government intervention does more harm than good:

The interest of the inland dealer, and that of the great body of the people, how opposite soever they may at first appear, are, even in years of the greatest scarcity, exactly the same. It is his interest to raise the price of his corn as high as the real scarcity of the season requires, and it can never be his interest to raise it higher.

By raising the price, he discourages the consumption, and puts every body more or less, but particularly the inferior ranks of people, upon thrift and good management. If, by raising it too high, he discourages the consumption so much that the supply of the season is likely to go beyond the consumption of the season, and to last for some time after the next crop begins to come in, he runs the hazard, not only of losing a considerable part of his corn by natural causes, but of being obliged to sell what remains of it for much less than what he might have had for it several months before. If, by not raising the price high enough, he discourages the consumption so little, that the supply of the season is likely to fall short of the consumption of the season, he not only loses a part of the profit which he might otherwise have made, but he exposes the people to suffer before the end of the season, instead of the hardships of a dearth, the dreadful horrors of a famine.

It is the interest of the people that their daily, weekly, and monthly consumption should be proportioned as exactly as possible to the supply of the season. The interest of the inland corn dealer is the same. By supplying them, as nearly as he can judge, in this proportion, he is likely to sell all his corn for the highest price, and with the greatest profit; and his knowledge of the state of the crop, and of his daily, weekly, and monthly sales, enables him to judge, with more or less accuracy, how far they really are supplied in this manner.

Without intending the interest of the people, he is necessarily led, by a regard to his own interest, to treat them, even in years of scarcity, pretty much in the same manner as the prudent master of a vessel is sometimes obliged to treat his crew. When he foresees that provisions are likely to run short, he puts them upon short allowance. Though from excess of caution he should sometimes do this without any real necessity, yet all the inconveniencies which his crew can thereby suffer are inconsiderable, in comparison of the danger, misery, and ruin, to which they might sometimes be exposed by a less provident conduct.

Though, from excess of avarice, in the same manner, the inland corn merchant should sometimes raise the price of his corn somewhat higher than the scarcity of the season requires, yet all the inconveniencies which the people can suffer from this conduct, which effectually secures them from a famine in the end of the season, are inconsiderable, in comparison of what they might have been exposed to by a more liberal way of dealing in the beginning of it the corn merchant himself is likely to suffer the most by this excess of avarice; not only from the indignation which it generally excites against him, but, though he should escape the effects of this indignation, from the quantity of corn which it necessarily leaves upon his hands in the end of the season, and which, if the next season happens to prove favourable, he must always sell for a much lower price than he might otherwise have had.

Whoever examines, with attention, the history of the dearths and famines which have afflicted any part of Europe during either the course of the present or that of the two preceding centuries, of several of which we have pretty exact accounts, will find, I believe, that a dearth never has arisen from any combination among the inland dealers in corn, nor from any other cause but a real scarcity, occasioned sometimes, perhaps, and in some particular places, by the waste of war, but in by far the greatest number of cases by the fault of the seasons; and that a famine has never arisen from any other cause but the violence of government attempting, by improper means, to remedy the inconveniencies of a dearth.

Adam Smith: An Inquiry into the Nature and Causes of the Wealth of Nations

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What about those who are immune?

Sitting, staring into eternity as everything closes down, forbidden to walk amongst humanity for another’s fear of my being infected or infecting another. Only the immune cannot be infected and cannot infect others. They are still under the same restrictions though.

We do not know how far the infection has spread across the nation. The high fatality rate bears no resemblance to that observed Germany – it is not that the Germans are any sort of master race (let that sort of idea get a hold and you never know where it will end), it just reflects that only the most serious cases have been diagnosed here, and we do not like to make a fuss.

How many then have passed through the disease? We do not know. There is no reason for them to be restricted: they can walk abroad in safety to themselves and others. There is no provision for this freedom in the rules though.

The authorities might issue certificates to those who are immune, to licence them to have the freedom that is our wont. Certificates though are easily forged. Let them come out somehow, for the sake of us all, and provide some custom for the shops and pubs. Someone has to be the forerunner of normality, to rescue the dying economy.

It could be most of us by now – have we thought of that? Until there are tests available, we are walking blind.

There are tests. The priority has been to distribute tests to see which coughs are COVID-19 and which are just coughs, antigen tests to find the active disease amongst those already ill. The test for immunity is an antibody test. That is a lesser priority for the medical profession, but for the survival of the economy and of society they will be vital.

Who will pay for antibody tests? Well, it may be those suffering most from the close-down, and they are running out of money.

Get us the numbers though, and release the individuals who have no reason to be imprisoned, and begin to reopen the joys of society.

COVID-19: a nation divided

Britain is in crisis: the nation is deeply divided with a virulence not seen in living memory – since January in fact. COVID-19 has riven the country into two opposing camps:

  • The terrified;
  • The fed up.

However a third camp is making its presence felt:

  • The bullies

Which faction is in charge of events? Take a guess – it is as it ever was.

This is a frightening time for all the timid, hypochondriacs and conformists, and possibly for everyone who does not wander about with his or her head in the sand (if that s actually physically possible). For the fed-up, ah – can we just get back to normal? It’s not the Black Death, so imagine how we would be if it were – a sense of proportion, please, and do something about that nasty cough of yours – here, borrow my hanky.

For all natural bullies though, for the bullies – this is a heaven-sent opportunity to tell other people what to do. Now they have an excuse to look down their noses as neighbours. They salivate over nailing planks over people’s front doors like in the good old days of the Great Plague of London – Defoe has been flying off the shelves in Hampstead. There is exquisite pleasure in gaslighting the reluctant into believing their are personally responsible for killing thousands. Never has there been an opportunity like this since Brexit.

How long can this go on? For the terrified and the fed-up, it cannot end soon enough. For the bullies, let the plague roll on.

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Competitive panicking

There is no other explanation for the cycle of shutdowns. It has grown into a peaceful form of mass-hysteria: typical mass-hysteria involves uncontrolled weeping and wailing, maybe breaking into violence, but today we have mass resignation or perhaps a mass flop. It is but the result of those giving advice and warnings.

It is competitive panicking. Each overreaction creates its own bubble of new normality on which the next feeds and steps up to exceed it in an endless cycle. It seems like a form of virtue-signalling: panic signalling perhaps. It has made the nation fall silent and stifled all other thought. A pall lies over the land.

It would be tedious to recite all the ideas and scares thrown into the air about the current epidemic. It is a regrettable characteristic of our media-led public culture that many commentators, whether they understand the topic or not, have a need to make themselves heard, and they will say whatever is needed to achieve publicity. It is not for the public benefit but for their own. It is a form of what Hobbes called a “generall inclination of all mankind, a perpetuall and restlesse desire of Power after power, that ceaseth onely in Death.”

You may contrast the meek, almost reluctant mien of the Chief Medical Officer as he stepped unwontedly before the cameras.

Into this then step the politicians, rather unwillingly at first as no one wants to be closely associated with a deadly disease. (It is a curse of the National Health Service that as the government has taken responsibility for the health of every citizen, they can be blamed for every cough and sneeze, or in this case for an epidemic. That is a little harsh – most of the nation are not as daft as all that – but when the system strains and buckles, the blame is not far behind.)

These last weeks we have seen society transformed in the twinkling of an eye. The streets and workplaces are emptied and events big and small are cancelled, whether there is risk or reason or none. In addition, the whole breadth of the commentariat is so concentrated on this one circumstance, the Wuhan pneumonia epidemic, a feeling like a fog is over the nation. It is hard to equal. When Brexit dominated every political discussion, the streets were not emptied and the nation did not stay away from work and talk of nothing outside that context. The very dominance of this apparent threat has placed a stop on normal life.

Panic feeds more panic. The schools were not meant to be closed, but commentators craving publicity demanded it for so long that it seemed inevitable and I started hearing “when”, not “if”. Ultimately it was not that which closed the schools but mass staff absence – but why would half the teachers in a school disappear when the known numbers infected nationwide is about 300 in total out of 60 million? That is mass, irrational panic.

London started emptying before the government suggested working at home. Now thankfully office workers have the tools to be able to work from home, but others cannot, and gig-economy workers, the ones who make modern life possible, cannot feed their children, and all for an infection which has barely brushed this land yet.

Events and meetings are cancelled across the board – I am surprised when I find them still on. An email came today that all Parkruns are cancelled – but of all things, this is an event in the open air attended only by fit people with no lung problems – can there be an event with less of a risk? Cancelling runs harms health.

The hope I have heard expressed from organisers of all sorts of events is that this will not last, and that into the spring we will be back to normal. No, the epidemic will not have gone then and might just be starting to roar. Perhaps though by then we will all have got fed up with it and be going back to normal life, taking it on the chin and dispelling the panic because it cannot be allowed to let us starve.

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The necessity of normality

Members of Parliament are fleeing into isolation. The House has vital business before it. There must be a temptation to take political advantage to bypass Parliamentary norms. More than ever that must not happen.

Jacob Rees-Mogg is taking a robust, parliamentary view, and thank goodness of that. It is in the time that the system comes under most stress and temptation that it must show its strength.

The chamber of the Commons is a close-packed place (when there is a whip out or a chance to be on the telly), and the members are in frequent physical contact with the wider public, so the risk of infection across the whole political class is real. Some members have contracted the Wuhan pneumonia, and many members are vulnerable to its effects by reason of age, infirmity, diabetes or otherwise. From the outside it is hard to see how the meeting of Parliament can continue. If even village-hall keep-fit classes are being cancelled, the expectation would be that the foetid cockpit of Westminster would disperse too.

However, there has just been a budget, and a Finance Bill has to be pushed through or all taxes will expire. At some point the Armed Forces Bill will have to be passed or the army will be disbanded. Parliament must sit to pass these, as well as its normal business.

There is talk too of emergency powers, which is worrying: Tony Blair gave himself extensive emergency powers, which Act is still in place, and those are frightening in themselves without adding more just to be seen to be doing something. (Imagine how the Civil Service will gold-plate any emergency measure they can get Parliament to grant them.)

With so many away and the arithmetic in the House changing, it would be very tempting to push measures through the House which would not normally pass, and to use the excuse to pressurise the Opposition to stop opposing, in the national interest of course. Because that temptation is there, the man in the street is entitled to worry that the crisis will be abused to strip out democracy. For that reason, there must be all the more emphasis on following proper parliamentary norms, all the more involvement of all sides in the house and all parties.

When asked about the emptying House, the Leader of the House, Jacob Rees-Mogg might have purred and called for the government to obtain an enabling act to operate without this lamed parliament, but he did not. He emphasised the use of the pairing system, whereby a member may agree with a sick member on the other side “You cannot vote so I will not”, so maintaining the balance. That is crucial.

He also addressed emergency powers. Instead of salivating over new power to be jealously guarded, he said without question that any emergency powers must have a sunset clause; that they should have a natural expiry. During the War (and we are nowhere near such an emergency) there were extensive emergency powers granted to the government, and the new Attlee ministry elected in 1945 was very reluctant to give them up. Attlee’s Labour Party believed in planning and control of minutiae, and those old wartime powers could be used for that purpose in peacetime. It was not until Churchill was re-elected in 1951 that wartime rationing was ended.

In times of stress, and in times of blind panic, that is when the voice of opposition is most needed. It is needed not just from the opposition benches but from critical members regardless of party. For most of the year one might sail through with the House of Commons as a mere theatre for pre-decided decisions, but when actual thought and consideration are needed, when many alternatives and nuances will make all the difference, in short when there is a need for actual live debate – that is the very reason for having Parliament as we know it.

It was thought when the election result was in and Boris had his stonking majority that it would be full steam ahead on whatever policies Number 10 had in mind. That is no longer the case, during the epidemic. Those members are needed.

In short, democracy must be done, and democracy must be seen to be done.

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