Austrian Economics: Why it matters

I believe that the best long-term remedy for the economic catastrophe that has been plaguing us these past four years is the adoption one simple strategy: the government should largely step back from trying to 'manage' the economy and allow market forces to play the primary role in its management, so that resources would be diverted, by these market forces, into the most productive outlets. That in a nutshell is what "Austrian Economics" is all about. Think about the real reasons the housing price boom which preceded the current prolonged recession occurred - I would say it was because interest rates were artificially maintained at too low a level by government intervention, so that it became too easy to borrow money, much of which was not employed in genuinely productive investments, but instead was used by many individuals as seed-money for investment property portfolios, which itself of course fuelled the building of property to meet the increased demand for property. Now the government tells us it must keep interest rates low so as not to cause a downturn and to stimulate spending, even if it requires the printing of more money without any backing. It is like pouring petrol on a blazing fire! The net result of this kind of madness is the inflation which we are now seeing beginning to gather pace, after having been told every month for the past four or so years that the rise in inflation was only 'temporary' and would soon be reversed - that reversal has of course not occurred yet. The "Keynesian" model that is being followed is not working, and never worked (nor could it ever work), but governments and central banks (in our case the Bank of England) are loath to accept this - because the conventional wisdom is that the "Keynesian" policy of interventionism is the correct path to follow, when empirical evidence points in a completely different direction.

This is just a small example of the fundamental differences in ideas which separate "Austrian Economics" from the "Keynesian" philosophy of economics which many western countries have followed far far too many decades. The video-clip below is well-worth watching in full - it is quite lengthy - as it discusses very clearly and I think pretty objectively the rationale which lies behind "Austrian Economic" theory:



- this is taken from the an article in the blog of the Ludwig von Mises Institute whose website is here.

If you are not familiar with "Austrian Economic" theory, then I urge you to become so - for then you will, I hope, begin to understand why the "Keynesian" economic theories which our and many other governments have been following for so many decades is so counter-productive in the longer-term and that there is another better way of conducting our economic affairs.

"Everybody Hurts" - a very professional amateur choir performs

I just came across this extremely professional 'cover' version of the REM song "Everybody Hurts", sung by 32 High School kids from schools in Chapel Hill NC (USA) - it seems the REM group are just as impressed by their fine performance. Enjoy!



(Spotted in the Kenneth in the (212) blog here - "Glee!" indeed.)

A German journalist gives his views on the English/UK rioting

Thomas Kielinger has been a London correspondent of the German newspaper Die Welt for over twenty years, has been made an OBE by Her Majesty the Queen and has been interviewed by German broadcaster Deutsche Welle.

I think his views are worth listening to because they are from an interested and probably pretty knowledgable 'outsider' who has never seemed to me, whenever I have read his writings or seen him on various television programmes in the past (mainly on the BBC News channel, where he often in the panel on the programme Dateline London, but occasionally in other situations, too) to have any particular axe to grind. I don't necessarily agree with everything he says in the interview, because it is clear that whilst many (perhaps most) of the persons involved in carrying out the recent rioting and looting have been 'black' mainly Afro-Caribbeans (hardly any 'Asians' were involved at all, so far as I understand, although a number were certainly victims), there have also been a significant number of 'white' youths and children of both sexes who have been actively involved. Nevertheless I think Kielinger's views do merit careful consideration; let's hope he is correct in his comments about Germany.

I don't have any useful comments to make about the underlying causes of what has happened in various large urban settings across England; there are people much more competent than me who can perhaps comment sensibly. All that I will say is that I am thankful that this contagion has not spread to major Scottish cities such as Glasgow, Edinburgh, Dundee or Aberdeen and it is pleasing to have seen that some police personnel have been sent to assist their English colleagues in various parts of the country with restoring and maintaining law and order - last night seems to have been considerably more peaceful with no major incidents reported.

Now I am watching the emergency debate in the House of Commons. I have so far heard the Prime Minister, David Cameron, make a statement, followed by the response of the Leader of the Opposition, Ed Milliband. Both have spoken well and I think broadly constructively, although there are perhaps too many 'platitudes' from the Labour leader and the PM is not entirely guilt-free in this regard either - now I am listening to Daviod Cameron making his follow-on comments. That's really all I've got to say for the present. Perhaps there will be more later.

Petition to retain the ban on Capital Punishment

I support the principle that capital punishment, which in plain language is judicial killing by the State, is wrong in all circumstances. The State should not be in the business of executing people. Crimes for which people are convicted according to law do require punishment - that punishment should be strict, but humane. Some will argue that persons convicted of certain particularly heinous crimes (wilful murder, torture, rape to take a few) deserve no compassion and no rights. I don't necessarily disagree with either argument, but it is not the 'immortal soul' (if such exists) of the convicted person which concerns me, rather what it says about the societies and people who sanction judicial killing. Do we really wish to liken ourselves not just to the US's of this world, but to the Irans and Chinas, too?

A number of people convicted of murder in recent years have had their convictions overturned; in some cases they have been exonerated completely and in other cases new evidence has come to light which has cast sufficient doubt upon the original conviction for it to have been suspect. Were investigative processes always completely accurate during the period when capital punishment was still in force? Forgive me, but I simply do not believe it. What is completely certain, however, is that once someone has been executed, the punishment (as distinct from the conviction) can never be retracted.

I do believe, however, that a term of punishment should be observed strictly - a sentence of 'life imprisonment' should mean precisely that. There should be no parole, ever, under any circumstances, unless new evidence comes to light casting doubt upon the original conviction. So someone suffering from a terminal illness and who was serving a term of life imprisonment would die in prison - there should be no nonsense about allowing someone home to die.

It is on this basis that I have signed the e-Petition for the retention of the ban on captial punishment. If you share this basic view and if you wish you can sign the petition here.

Sainsbury's Nairn - first visit

(Please see UPDATE at end)

OK folks, today was the big day when Sainsbury's came to Nairn - yippee!

I decided to go along late-ish in the morning, possibly not one of my more brilliant ideas, because of course by that time the decent-sized car park was completely full- after driving round a couple of times I decided to cut my losses and drive out - in the the event I drove back into town and around the building where I live, then back up to the supermarket. After 'kerb-crawling' around the car park for a second time I was able to wait for a family about to leave and get into their spot. Success!

The trolleys are the kind where you have to put a £1 (or a €1) coin in the slot - fair enough, lots of supermarkets do that now, although Tesco doesn't. The petrol station seems conveniently-positioned and although I didn't use it today (my tank is almost full at present), I have no doubt I will use it very frequently in weeks/months to come.

Anyway, on to the 'shopping experience'. I'll write a few words at the end about some trends I've noticed at many supermarkets over the past few years, but for the present I'll write about Sainsbury's Nairn specifically. A pretty conventional lay-out, with open ducting and pipework visible above your head - a bit like Asda or Homebase with its 'warehouse' feel), unlike Tesco where the ceiling is enclosed with a false-ceiling. However, the lighting at Sainsbury's is bright, without being in any way 'harsh', so quite pleasant. To the left there was a counter/kiosk (presumably for the tobacco addicts amongst us - I didn't really look), with newspapers on a walk-around rack nearby, including the local 'rag' The Nairnshire Telegraph (a weekly publication), then to the left an aisle of magazines including 'Attitude' I was pleasantly surprised to see (the sub-header for this blog will enlarge on why this is important for me); I used to buy this from the big Tesco outlet in Inverness, although I don't think their Forres outlet stocks it - however, I now get it by subscription as it costs less that way. but it it still very pleasing to see it stocked in a local store - the Co-op in the town of course never did; if it is still stocked here when my current subscription expires I may choose to purchase it locally, even at greater cost, to express my pleasure at this welcome change.

The fairly usual lay-out continued at the left with aisles of women's, children's and men's clothing, then household goods and some small electrical household items. Not as extensive, of course, as in the larger Inverness Tesco, but much more than in the Forres branch of that chain - I'd say the store in Nairn is about 1/3 bigger that its Forres 'cousin'. It was in this area that I made my first purchases - although I really don't need more towels, they had some really attractive colours on offer so I had myself a large bath sheet and a matching bath-mat in a particularly bright colour which was labelled 'teal' - a sort of very deep turquoise.

Actually I had done a pretty big shop a couple of days ago in Tesco at Forres so didn't 'need' to buy too much, but I had a good look at the meat and fish counters and bought something from both and a few items from the salad vegetable area - all seems of nice quality and attractively-presented. Prior to my visit I had a good look through my jars of dried herbs - I have quite a large selection at home, but I expect like most people some get used fairly infrequently so have been in my herb/spice racks for 'some time' and I thought they probably needed 'updating' - doing this gave me a chance to check the range on offer at Sainsbury's and I'd say it is pretty good, although I noticed a few gaps - in any case I got two of the three I was looking for (the missing one was the classic 'fines herbes' mix which I always use in omelettes) and an extra one because it seemed a good price, although the existing jar I have is almost full and pretty new, but I use it quite a lot.

I enjoyed having a look at the display of sherries - I drink this quite a lot - very unusually for a supermarket there were two different kinds of own-brand Amontillado, a 'pale dry' and a 'medium' version; as I usually only see the 'medium' locally I decided to give the 'pale dry' version a whirl and I had a glass a short time ago and can report it is pretty good. I also got a bottle of their fino, although I haven't tried it yet. In addition I got a couple of reds - an 'own label' Claret from Bordeaux (i.e. France) and a Merlot (not 'own label') from Carcassonne in Provence (i.e. also in France). Big supermarkets do have skilled wine-buyers so I have no doubt both will provide a good glass, well worth the relatively modest prices paid.

Again, as with the towels, I didn't really need more eggs, but I use a lot so bought some of their 'free range' as this is what I always buy.

The staff seemed pretty 'on the ball', and I did ask one for some help in the salad area, and although he didn't know the answer himself he was very pleasant and immediately went off to find out from someone who did and was back in a few moments directing me to the right shelf area and he led me there. So full marks for that. A couple of other staff also asked me how I was getting on, one seemed to be a more 'senior' person given his different attire. Obviously the whole place was very busy, as lots of people were 'milling around' getting to grips with the layout, but overall I was pretty impressed by the general 'body language' of staff, busy yes - but never abrupt or harrassed-looking. The Tesco in Inverness (and indeed in Forres, also in Eastbourne in a very large store, as well as in Perth, all of which I have shopped in recently) always seems to me to have staff who look 'busy and harrassed' and more senior people who tend to stride around and barge past paying customers, doing whatever they are doing (i.e. maintaining their positions in the 'corporate chain', somehwat self-importantly). Tesco is obviously a big, successful supermarket chain, which provides decent quality at a relatively-decent price, but it is all pretty 'soul-less' and one never feels particuarly 'valued'. I'd have to say that on its opening day the Nairn Sainsbury's, even though very busy, provided a rather more 'civilised' shopping experience. Interestingly, and carrying on this 'theme', I'd have to say that Asda in all its stores I have ever visited seems to have particularly friendly, helpful and well-trained staff, even though it is usually regarded as a 'value' brand, if not exactly 'low cost' in the Lidl or Aldi mould.

Pricing. I'd say Sainsbury's here is generally a little more expensive than Tesco, but certainly much better value than our local Co-op, but on the other hand as I don't need to drive 12 miles (to Forres) or 15 miles (to Inverness) to shop there, or spend the petrol doing so, there is no contest! Sainsbury's here seems to have a sufficiently large range of goods on offer to make it perfectly well able to cater for most of my weekly shopping needs, even if I may still make the trips to Inverness, Forres or Elgin occasionally. I cannot say I will never darken the door of the Co-op in Nairn ever again, but if I do it will certainly not be very often, unless I wish also to visit one of the shops in the High Street. That's the reality and I daresay I'm not going to be specially unusual in that blunt analysis.

Now, and finally, to return to the general layout matters I referred to near the beginning of this article. Entrances - why do most large supermarkets now have 'foyers' tacked on to the front of their premises with pretty restricted areas for traffic to flow in and out of the store?! Sainsbury's is just like Tesco in this respect. I expect it has to do with 'security' to make it easier for shop security staff to apprehend pilferers from making-off with merchandise without paying for it, and I can hardly blame them for that. However, for whatever reason, and probably to do with deep matters of human psychology, people tend to 'loiter' at these entrance, or in the 'foyers', and generally make it an obstacle course to get in or out of the place! This applies to Sainsbury's, Tesco, Morrisons and to Asda - the four UK-based superkarkets I have recent experience of (we will never, unfortunately, have a Waitrose in this area, I expect, but I can dream, can't I?), I'm sure there are better ways of organising things. And of course there are - any branch of Lidl, the 'low cost' German supermarket chain I have ever visited (in the UK or Spain) has a segregated entrance and exit - whatever other faults that brand has (and there are a number), neither the entrance nor the exit is ever an obstacle course!

To end this extended review on an overwhelmingly positive note, however, I must record that the new Sainsbury's in Nairn will be of huge benefit to Nairn residents and indeed those from the surrounding area - I am completely certain that many of the shoppers I saw at the store today came from well outside Nairn, probably from a radius such as Elgin, Grantown-on-Spey and Inverness or perhaps further. I have no doubt that things will settle down in a few days and whilst it is likely that people from the towns and areas nearby will continue to visit our new Sainsbury's in Nairn, from time to time (and with a bit of luck some of the other retail outlets in Nairn, too, if the latter are wise and 'embrace' this new magnet to our town, rather than continue the negative mantra that typifies this rather inward-looking little town - yes, this is as positive as I can bring myself to be as a reaction to some of the attitudes here, sorry, one of which I listened to with barely-suppressed irritation from a fellow Nairn resident, like myself an 'incomer' although one who has lived here much longer than me, even if she hails from a much farther-distant part of the UK than I do, when relating my experiences today after my first Sainsbury's visit). So a big 'thumbs up' to Sainsbury's!! Welcome!

PS/ Having just read the 'pap' that passes for comment in another Nairn blog, I must report I forgot to mention the issue of Gaelic signage - it is very irritating that the Gaelic versions are printed above the English in many of the major signs near the entrance, no doubt to appeal to the local 'Gaelic mafia' contingent, so one (and undoubtedly most customers, too) has to do a double-take to understand what the sign is saying, but after my initial irritation with this 'pandering' to the sensibilities of a [very] small minority, it is pleasing to report that once one proceeds into the shop this nonsense is quietly fortgotten and the language that the vast bulk of customers have as their first language, English, reigns supreme! I am of course Scottish and very proud and happy to be so, but I am primarily British and my first language is English, just like most people here in Nairn and elsewhere in Scotland and of course throughout the UK. I have no objection to catering for minority languages, for that is what Gaelic is, indeed I am very happy that effrots are made to accommodate it, but I really do object to it being giving precedence over the language of the vast majority of people even in what is laughably called 'Gaeldom' - although I can well appreciate the delicate path that Sainsbury's has had to tread to establish its presence here. Now, having got that off my chest, let me reiterate how happy I am to see Sainsbury's here in Nairn.

UPDATE: (Friday 05AUG11 20.01 BST) I posted a comment in one of the other Nairn blogs (My Nairn, relevant article here) earlier today and quote it here for completeness: "I had my second visit this morning – it was easy to park this time, although there were still quite a few people. Altogether very pleasant. I seem to recall the lack of an in-store cafe/restaurant was part of the planning conditions, perhaps to try and protect the numerous low-cost tea-shops and restaurants in town. Personally I shall still have to go to Inverness (Tesco or Boots) for a few items Sainsbury’s don’t stock, but for almost all my needs it will suffice and I will in any case be going in the direction of Inverness every so often, so it is no hardship."