Do you believe in magic?

Do You Believe In Magic?

Aurelien, April 30, 2025, via Naked Capitalism 05-01-2025]

…In one of my very earliest essays, I pointed out that the West has very largely lost its capability to think and plan in any kind of long-term sense. Thus, we are continually out-pointed and disappointed when dealing with states who at least make an effort to look to the future in an organised fashion….

Visions are easy, but the West has progressively lost the capacity to formulate and operate mechanisms for putting them into practice. In part, this is because there is very little inherited understanding left of the necessary practical steps. For example, re-shoring manufacture of some pharmaceuticals would involve activities that most politicians and pundits have never heard of, let alone be able to describe. Finding and importing supplies of chemicals, designing and building factories, recruiting and training skilled technicians and graduates in chemical engineering (having set up the necessary courses first, naturally), dealing with all the various health and safety hazards, setting up a distribution system for the products … I doubt if much of our current ruling class and its parasites has any idea even of the steps involved, let alone how to sequence them. By contrast, there’s a great deal of experience in closing factories, making workforces redundant and tying yourself to overseas suppliers….

The Anglo-Saxon (now more broadly western) fixation with archetypal heroic entrepreneurs and university dropouts has obscured the historical fact that no significant industry, and no key technology, has ever been developed without some level of planning and government encouragement. Very quickly, for example, states realised that iron ore, coal, and steel-making capability were important national assets, and acted accordingly. The modern idea that even strategically-important goods can come from anywhere so long as they are cheap would have seemed incomprehensible even half a century ago….

The British Conservative government elected in 1979 decided on an entirely different approach. Rather than imitating Britain’s successful competitors, it decided to do the opposite of what they did, and essentially to rely on magic. Now I don’t use that word idly. I don’t mean magic in the austere High Magic sense, but in the vernacular sense of rituals and spells which are supposed to bring about changes in the real world. Thus, all the government had to do was to create the right magical environment (low taxes, few regulations) and the “animal spirits” (interesting choice of words, that) of entrepreneurs would spontaneously do the rest, through the “magic” (interesting choice of words, that) of the “market.” The magician, however, having summoned up these powers, should make sure to stay well away from the working.

This ideology, entirely devoid of any empirical foundation at all, came to dominate quickly, because it was culturally acceptable in a country that disliked vulgar manufacturing, which preferred manipulation of abstruse symbols to actually doing real work, and which secretly hoped to find a magic lamp which would generate money without the need for actual effort. This was most obvious in attempts to control inflation, which, the government argued, was the principal obstacle to a national economic revival, because it “complicated the calculations” of businessmen, the poor things. Because inflation was believed to be a result of too much money in the economy, then the amount of money had to be reduced by making it expensive to borrow, hence high interest rates would bring inflation down, no matter how paradoxical it might seem to attempt to reduce prices by putting them up. But that’s magic for you. Of course, the rate of inflation could be measured in many different ways, and the flow of “money” in the economy depended on which definition you used. Nothing daunted, the government began to “target” the growth of M3, one of the definitions of money, convinced that through symbolic manipulation and the recital of incomprehensible formulae, the rate of inflation would come down. (Thus, the story of the dazed Conservative MP leaving the Chamber after one more jargon-infested announcement by the Chancellor, and muttering “I thought M3 was a Motorway.”)….

I dwell a little on this story because it was the first real sighting of the faith-based approach to government which has characterised the modern era. Instead of doing things, governments “create the conditions” for others to do things, and sit back in hopeful anticipation. Serial failures, in true New Age fashion, meant that the spell was not right, or more usually that it was not used with enough will and conviction. The idea that governments should actually do things is considered a quaint anachronism. The idea was to have a Court Magician who would make amazing things happen: the most recent incarnation is the misnamed AI, whose output can fool you into thinking it’s an oracle, if you don’t look too hard.

Meanwhile:

China unveils world’s fastest hard drive. Is ‘Poxiao’ the dawn of new flash memory?

Zhang Tongin, 18 Apr 2025 [South China Morning Post]

Rice-sized memory device breaks speed barrier once thought impossible, capable of erasing and rewriting data 100,000 times faster than before
 

...and...

[X-Twitter, via Naked Capitalism 05-03-2025]
Arye Lipman
@aryelipman
Highway 1 in Big Sur has been closed for 838 days. In that time China has built 3500 miles of high speed rail, and California hasn’t been able to fix a quarter mile of highway.

...but you knew that already, right?