Kristian Niemitz: Free markets, NIMBYs, British stagnation, colonialism and the NHS

Dr Kristian Niemitz is Head of Political Economy at the Institute of Economic Affairs. Our conversation covered his many works including "Socialism: the failed idea that never dies", "Imperial Measurement: a cost-benefit analysis of western colonialism" and "Universal Healthcare without the NHS". 

We discussed his journey from "teenage Commie" to classical liberal, why Britain is stagnating and what to do about it, the battle of ideas more broadly, religious influences on economics, socialism's cultural dominance, the failure of politicians to implement good policy, and whether Javier Milei is an exception to this.

Like many good Germans he's a beer connoisseur (he even has a Substack on it!). He describes Twitter as containing "the daftest opinions expressed with extreme confidence" (good thing he doesn't spend too much time on LinkedIn) and enjoys the traction he gets from gently mocking those opinions.

You can find Kristian here: https://x.com/K_Niemietz, read his longer form writing at the IEA website: https://iea.org.uk/publications, and his Substack on Beer here https://kristianniemietz.substack.com/.

Chapters

• 0:02 Can you instinctively be a classical liberal?
• 10:29 The sixteenth century Spanish schoolmen - proto-free marketeers?
• 12:59 Is Marxism a branch of Christianity?
• 18:23 Has true Socialism ever been tried?
• 24:36 Economics - a pale imitation of phsyics
• 36:30 Socialism: The failed idea that never dies
• 42:21 Western Colonialism: A cost-benefit analysis
• 53:12 How to Fix Britain's economy?
• 1:06:00 Georgism and a land value tax
• 1:16:22 Do we need the NHS?
• 1:27:05 How to move away from an NHS model
• 1:29:44 What Kristian thinks of politcians
• 1:32:49 What Kristian thinks of Javier Milei
• 1:40:06 Trolling on Twitter
• 1:46:19 The Long Bet - ending the left's cultural dominance

Transcript

Amul Pandya: 0:02

Hello and welcome to Meeting People with me, Amul Pandya. Meeting People is a podcast where I have long conversations with rebellious, adventurous and sometimes courteous free spirits. Herr docteur Niemitz, thank you very much for sparing the time, or Christian, as both people know you by.

Kristian Niemitz: 0:23

My pleasure.

Amul Pandya: 0:24

I thought we would, before we get into the meaty stuff, just start with a little bit on your journey. So you're an economist by training you went to university in Berlin. Yes, how have your economic views shifted over time? Or have you always been a kind of purist free marketeer from from?

Kristian Niemitz: 0:46

no, I don't think anyone was um, being a free market here is very much an acquired taste, and that's where free marketeers, classical liberals, differ from people elsewhere on the ideological spectrum. You can be instinctively a socialist I guess most people are instinctively socialist you can be instinctively conservative. You cannot really be instinctively liberal. It's something that you have to learn about. It's a much more cerebral ideology and that's because it doesn't unlike other ideologies. It doesn't have a basis in evolutionary psychology. You know we have evolved as tribal creatures and a lot of our moral intuitions are wired in that way, whereas classical liberalism and free market economics requires you to think more abstractly about how an economy works, how society works, things like market exchange that's something which our primitive ancestors 100,000 years ago wouldn't have known. Things like the rule of law that you have, say an independent judiciary where you are innocent until proven guilty, and all that.

Kristian Niemitz: 1:57

These are relatively recent innovations in human history, and that is all counterintuitive. Our instinct tells us that if somebody has done something wrong, we want to crush the bad guy, or if we see somebody having much more wealth than somebody else, want to take it from the one who has it and give it to the other. So our intuitions are not easily compatible with classical liberalism. That's why it's always a journey, but it has the the advantage that if you ask a liberal, a free marketeer, how did you develop those views, they can tell you something about a journey, whereas a socialist would mostly just tell you well, I've always felt that way, and then at some point I found a book that articulated what I've always believed. So in my case, I was initially a typical teenage commie, meaning I was sort of left wing, but I was more into the aesthetics, but didn't really know anything about it, even though I did have the collected works of Marx and Engels and Lenin, but didn't really read it except for a couple of pages, and I thought well, this is unpleasant.

Amul Pandya: 3:01

Love it, but I'm not going to read it.

Kristian Niemitz: 3:03

Yeah, drawn to the aesthetics, the vibe of it, rather than the content really, and just realized over time actually I quite like the market economy. So I've read something when I was maybe 17 or 18. A short book by an economics journalist who described concepts like the invisible hand of the market in very simple terms. So just the idea that in market exchange.

Amul Pandya: 3:27

What's the book? Sorry.

Kristian Niemitz: 3:30

Well, I don't think it's ever been translated into.

Amul Pandya: 3:32

English, oh, it's German, okay.

Kristian Niemitz: 3:33

So it would translate as something like the market economy as a goodie bag and, yeah, it's aimed at a beginner's audience, very simple terms but it's all about stuff that you would now think, well, that's totally trivial, but at the time when you, when you've never really thought about how the economy works, uh, it's mind-blowing the idea that you can have people who are maybe not particularly altruistic, might not care about your well-being per se, but they nonetheless offer you goods and services that you want and are prepared to pay for and act as if they were good people, act as if they were interested in your well-being.

Kristian Niemitz: 4:14

That was mind-blowing. At the time, I never thought about it in that way and it explained how, in market competition, you have different providers who, um, who compete with each other and try to convince the customer buy our stuff, not theirs. And I just started applying that to things I saw around me and started to see that pattern in the real world, where I had previously just not thought about it at all before that. You would go into a supermarket. All the shelves are full, uh, all nice stuff, uh, most of it reasonably priced and, um, I had, just prior to that, never thought about why that happens. It's all.

Amul Pandya: 4:54

The stuff is just somehow there so there's a story, isn't there, about I think it was boris yeltsin, when he was in the before the wall came down and he was visiting Texas as part of the kind of easing off and he visited a supermarket it was either him or Gorbachev.

Amul Pandya: 5:13

But he visited a supermarket and was just like, oh wow, like a tear came to his eye. The propaganda that they'd received was that the Americans are kind of living in apart from a few elite corporate bourgeoisies they're living are kind of living in apart from a few elite corporate bourgeoisies they're living in kind of poverty, just like us. And then he realised that kind of the game was up.

Kristian Niemitz: 5:32

Yeah, there's that famous photo of him standing there throwing his hands up and looking delighted.

Kristian Niemitz: 5:39

It's not even a particularly nice supermarket, it's a fairly well, probably it's a canaldi or something, I guess, yes, nice supermarket, it's a, it's a fairly, uh, well, probably a canal day or something. Yeah, I guess, yes, but nonetheless, I I guess, yes, if you're, if you come from the eastern block. That must have been mind-blowing. For me it was kind of the opposite, uh, whereas for him, visiting a supermarket was, um, a formative experience, I guess, or something that shocked him at that stage, for me it was growing up in the West. I just took it all for granted. I just took wealth, widespread availability of great goods and services, took that completely for granted, never once thought about why this happens.

Amul Pandya: 6:22

Was the generation above you in Germany a bit more attuned to that? Because there was that kind of perfect experiment East between West, where one side people are trying to escape desperately and the other side has no interest in going to the other side. Obviously, not everyone in Germany is a free market capitalist.

Kristian Niemitz: 6:41

No, very much not.

Amul Pandya: 6:43

But did that inform your kind of perspective that the older generation were much more attuned to this sort of age of plenty that they'd come into?

Kristian Niemitz: 6:51

I think that was, uh, even for so I'm late, generation x, born 1980. I think even for uh, gen xs, that was still a thing, that, uh, even in the 90s, or or perhaps more so, because even though the GDR obviously no longer existed as a state, as a country, in a sense, unification made it more visible. It was now basically in the newspapers all the time that there were transfers of billions from the West to the East, and that was all because of the legacy of socialism, the legacy of the planned economy. In a way, reunification made that more visible because it was now the West that had to clean up the legacy cost of socialism. So, yes, that was definitely a thing.

Kristian Niemitz: 7:41

If you were politically aware, if you thought about these things, which until I was 17, 18, I just didn't do. But once I got into thinking about economic life in such terms, yes, that also was an influence that you would constantly have. Well, and also at the time, if you traveled, you could still absolutely see the difference between East and West with the naked eye. You didn't have to know the GDP figures between east and west. With the naked eye you didn't have to know the gdp figures. But when I then later moved to berlin and I lived in the east for um for most of that period, so 2001 to 2007. At that time, you could still absolutely see the difference between east and west berlin. It was very easily visible, or?

Amul Pandya: 8:20

was that cheaper rent?

Kristian Niemitz: 8:21

well, that was one of the positive side effects of it yes.

Kristian Niemitz: 8:27

But it was also cheaper for a reason, and a lot of it still looked very commie. It had parts that looked dystopian, you could say, although I loved the dystopian vibe as well. The Soviet monuments are still there and if you have these extremely grim, dark great tower blocks all around, so it still has that a bit of an Orwellian 1984 vibe to it. So for someone who's interested in the ideology in that regard, a great place to live, because I had a weird fascination with socialism. Even though I hated the ideology at that stage, I was still fascinated by the vibe of it.

Amul Pandya: 9:14

And that's partly because you could feel the human appeal. As you said, your evolutionary inheritance appeals to a confiscatory approach or a kind of violent approach or kind of playground fairness approach, to kind of looking at the world. And so you almost, when you're studying socialism, you kind of go. I could be like this.

Amul Pandya: 9:38

I can see the feel, the attraction here, and I have to override it almost with my prefrontal cortex and my more rational brain to kind of yes, it's a bit like I guess you know if someone in your family was a victim of a brutal crime. All of a sudden your kind of your liberal instincts about capital punishment or prison conditions kind of go out the window right, and then you have to sort of re-ground yourself in the principles and go yeah, yeah, the very principle that even that person still deserves a defendant and that there should be an independent judge, rather than you going in with a baseball bat.

Kristian Niemitz: 10:17

Of course, yeah, that takes some, some restraint and that's why, um, in a, in a state where, uh, in an emotional state, where you're heavily invested in an emotional state, where you're heavily invested in an outcome, you shouldn't be the one making the decisions.

Amul Pandya: 10:29

So after Berlin, I didn't, you went to Salamanca.

Kristian Niemitz: 10:35

That was during Berlin.

Amul Pandya: 10:37

That was half a year abroad, so I recently read Hayek's Nobel Prize lecture, the Pretense of Knowledge, which I know you've written. I recently read Hayek's Nobel Prize lecture, the Pretense of Knowledge, which I know you've written on quite recently as well, and he mentioned the Spanish schoolmen in this lecture, I think it was 1974, wasn't it?

Amul Pandya: 11:01

So, yeah, we just had the 50th anniversary last year. The Spanish schoolmen who I knew nothing about, so I I looked them up and then I saw that you know, in preparation for this, that you'd been there. So can you to salamanca? Can you just explain who they are, what the kind of legacy of salamanca university is for, um, for the ideology that you kind of are?

Kristian Niemitz: 11:24

Yes, so the idea was. Up until that point I thought that economics in the modern sense that it all started with Adam Smith and that he was the first to describe the principles of market exchange. But then I realized I can't remember where I've where I saw this first that he had. There were precursors, there were people talking about this um in pre-capitalist, pre-industrialization times and the salamanca school where I guess among the first um they they talked about market exchange under, from our perspective, simple, primitive conditions. And, yes, they were proto-liberals. I guess you wouldn't call it that under those circumstances, with liberalism being more of a modern ideology.

Kristian Niemitz: 12:17

But yeah, early days predecessors, and that was a reason for applying for that to do the semester abroad there. It's just if you do that you will end up disappointed because it's not. It's not that you see much of the legacy around it, it's not that the you're not feeling it in the library, you're not just not feeling it. You also, the, the professors aren't going to mention it it's not that they will, they will say, okay, here we are.

Kristian Niemitz: 12:43

We obviously we're in the tradition of the old salamanca scholars. It it's not that they will. They will say, okay, here we are. We obviously we're in the tradition of the old salamanca scholars, and here's what that means. So I think one professor mentioned them once briefly, and that was about it so okay, so it wasn't a legacy, that was being no.

Amul Pandya: 12:58

Um, what was interesting about that school was it was a deep kind of about that school was it was a deep kind of catholic or christian or some, some a kind of branch of christianity that, um, that these were all kind of monks or, or you know, deeply christian thinkers. Um, recently listening to um tom holland and dominic sandbrook talk about marxism and they well, tom holland makes the argument that marxism was effectively another branch of christianity. It was a confiscated, that kind of utopian uh element to it, from pelagius to thomas moore, and that kind of confiscatory element came from christian text. So the first should be last, the last should be first. The meek shall inherit the earth and beware of wealth and all that kind of stuff. And Marx basically just used science as a tool rather than God as a justification.

Amul Pandya: 13:57

And so what Tom Holland argues is that Marxism versus capitalism is basically a continuation of Christian wars of religion. Is that oversimplifying? It, would you say, argues. Is that marxism versus capitalism is basically a continuation of christian wars of religion, would you. Is that oversimplifying?

Kristian Niemitz: 14:08

it, would you say whether it's specifically christianity, I don't know, but there is definitely a moralistic impulse, uh, which marks and? And uh. Well, marxists in general to this day disguised by saying no, we're just doing science. Uh, we're just uh like physicists or uh, or chemists. Um, we're not dealing with moral judgments, we're just analyzing things the way somebody might analyze the, the constellation of the stars or whatever, an astronomer. And that is clearly not true.

Kristian Niemitz: 14:41

Marxists are clearly driven by a moralistic impulse. They are at a visceral level disgusted by capitalism and they try to come up with rational sounding explanations for that. But the emotion is clearly there first. And it's also true in Marx himself that he wrote the early revolutionary texts much earlier than he wrote the more analytical parts. So Das Kapital, the first volume, came out in the 60s, communist Manifesto in the 1840s. So clearly the more political stuff is there first, and then the analysis comes later. And there is I can't remember his name. Now there is a book, um, called why we bite the invisible hand on the psychology of anti-capitalism, and the author also goes through um marx's own writings over the course of his lifetime and shows right from the start to put the policy conclusions. That was all there from the very beginning and the analysis all came much later, to justify a conclusion that he had already reached, and that's not the way. In that way it's very much not scientific.

Amul Pandya: 15:58

So the reason I find that kind of yeah, it's definitely a religion masked in scientism or the language of the scientific method. The reason I find that argument has an appeal is because and we'll talk about I want you to expand on this now but the reason why Marxists or socialists believe that true Marxism or true socialism has never been tried is if you asked a Christian, true Marxism or true socialism has never been tried is if you asked a Christian, has true Christianity ever existed in the, in the? You know, has there been a purist or any religious person? You know, has there been a pure, pure manifestation of your creed? And they would always say no. You know this wasn't true Christianity or this society. You know the Roman Catholic Church isn't real Christian. You know behavior, and that's what we see now with socialism, where that idea never dies because it's such a religious one. Would you, would you agree with that?

Kristian Niemitz: 16:51

well, I'd say, with most religions, they would say we cannot reach perfection in this life, that's for the afterlife. We can only strive, uh, to live in accordance with our moral values, and we will often fail, and that's, that's fair enough. That's why I don't really have a problem with religion outside of fundamentalist sects that try to impose their moral preferences on others but religion in general, as long as it is mostly about timeless moral principles, no problem with that.

Kristian Niemitz: 17:22

They're not trying, nowadays at least, to build that utopia in this world. But of course in the middle ages there were and I'm guessing that's probably what I didn't listen to, that tom holland episode that you mentioned, but I'm guessing that was what he was basing this argument on that in the middle ages you had religious sects in Europe taking over cities and trying to build religious Christian utopias, and they were also very proto-socialists. That would involve abolition of private property and market exchange and they would in that sense be like early socialists. And well, if it's at the city level, fair enough, you can just escape. But if you then try to extend that to a wider society, a wider geographic area, and especially when you then try to make it impossible to escape, then you have a problem do you find it.

Amul Pandya: 18:23

Frustrating, therefore, that people believe that socialism has never been tried. Okay, put it, let me put it other has socialism, true socialism, ever been tried?

Kristian Niemitz: 18:31

yes, many times. Um it's. When people say real socialism hasn't been tried, what they mean is that it hasn't delivered the outcomes that they would like to see, the outcomes they would expect from a socialist society. But that doesn't mean that there haven't been honest attempts to try it.

Amul Pandya: 18:50

I'd say Sorry, is it more selfish than that If? I was in charge as a socialist, then it would have been real socialism. It's just the wrong people were doing it, whereas I'm such a good socialist. Therefore I have that ability to kind of plan people's outcomes.

Kristian Niemitz: 19:09

It essentially boils down to that, because the people who present that case nowadays that would be, say, socialist publications like Jacobin magazine in the US or Current Affairs magazine, or here in Britain Novara Media would be an example, and also some people who write for the guardian, so it's. It's also very much in part of the mainstream media landscape. Those people would distance themselves from all the earlier socialist societies usually, but not from the idea they will say proper socialism would be completely different, but it will not be able to say what exactly they would do differently. They would just say, well, just trust me, it will be different. I just know that somehow. And that, yes, in a sense does boil down to well, if I was in charge, it would be brilliant.

Amul Pandya: 19:56

Yeah, and so they don't understand human nature, which is the moment you centralize power too much. You're just going to get a misallocation of resources and and excessive hierarchy and unfairness or basic economics.

Kristian Niemitz: 20:10

That there are reasons why economies cannot be planned, why democratic planning is, is a nonsense idea. But that's basically what it is, the the real socialism fallacy I mean this is, I guess, a version of the the no true scotsman fallacy, uh, where you say no true scotsman would commit a murder, but then you're already defining a scotsman as somebody who doesn't murder others. So by definition at the moment, a scotsman murder, someone ceases to be a scotsman by that definition.

Kristian Niemitz: 20:42

So you're putting, you're projecting an outcome already into the definition of the thing that you're talking about. And that's what the so-called the modern day socialists, the democratic socialists, do. They say well, socialism is a society which is democratically organized. The economy is democratically organized. The people, in a non-hierarchical way, run the economy. The problem with that is nobody has ever come up with a way to do that. If you have a society, a large-scale society of millions of people, how can they all democratically plan their economy? There's just no realistic mechanism to put that into practice. In practice, it can only mean a small group of technocrats. There's no realistic mechanism to put that into practice. It can only mean a small group of technocrats taking charge of things, planning the economy.

Amul Pandya: 21:39

And that's how socialism always ends up, even if that's not the intention. Is there an expert fallacy involved as well, where that kind of lack of distrust of the wisdom of crowds and the belief that a few very intellectual people can, in Whitehall or wherever it is, can guide economic behaviour because they are smarter and more intellectual and they've got better degrees and all the rest?

Kristian Niemitz: 22:02

That was true of some of the early socialists that was the period of the man in Whitehall really does no best. So the kind of thinking that was well in Britain at least fashionable from well, it was definitely in the 30s, 40s, 50s probably fizzled out a bit later. Nowadays, though, socialists self-described socialists would say that they are very anti-elitist. So they would say their version of socialism wouldn't involve centralizing power in Whitehall or wherever the Whitehall equivalent of the.

Kristian Niemitz: 22:37

Socialist People's Republic of Britain would be. So they would say our kind of socialism is explicitly non-hierarchical and decentralized. So they would no longer put the trust in experts in the way that earlier waves of socialists would have done. But I've just reviewed something for our blog because, as it happens I was at a W Weatherspoons the other day, where you know Weatherspoons has some of them have shelves of old books. I pulled one of them out and it happened to be a socialist book from the 30s where somebody it was called the First Workers' Government where somebody describes a future socialist Britain that is so from his perspective, near future envisages a socialist revolution in 1936 and then talks about a couple of decades later, looking back.

Kristian Niemitz: 23:28

This is how that happened. And this author, the future Labour MP, somebody who would become a Labour MP in the 40s he clearly does have this idea that capitalism is chaotic, it's unplanned, it's haphazard, you have people doing lots of people doing different things, nobody's in charge of all, nobody coordinates this. If only you had a group of wise men in his case they are literally based in whitehall planning things then all would be well, and that's why he describes so he describes a wave of nationalizations and then, uh, all these nationalized industries in his example in his book become much more productive than they were under capitalism because you now have somebody in charge who can come up with an overall plan. So he still had this naive belief in in planability and does that stem from your fellow countryman?

Amul Pandya: 24:26

Nietzsche talked about the decline of God or decline of Christianity, and therefore, as that decline happened, the explanatory load, let's say on science or rational thinking or the scientific method, was so great when it came to the social sciences, economics in particular, so that no longer was complex human behavior and in multi, multi-million interactions between market participants allowed to be put into the realm of.

Amul Pandya: 25:03

You know, that's just kind of god's realm, or we don't. Whatever it is, you know, the realm of we don't understand, yeah, once that upper upper limit was was removed, of like we just there's certain things we just can't understand. Therefore, science was then asked to do too much to try and explain. Well, we can come, using spreadsheets and data, to what the right price of coal should be. Do you think? Yeah, did the decline of religion in some ways kind of bring the appeal of Marxism up, even though it was religious in its own sense?

Kristian Niemitz: 25:42

I don't know if that's the reason, but it's certainly true that you had say if you think back late 19th century, victorian age or early 20th century, you have this explosion of knowledge in the natural sciences, in physics, in chemistry, biology, history, biology and I guess it seems natural that you would then think okay, these are areas where, rather than accepting the blind forces of nature, we are applying conscious, rational thought, we are planning things rationally and we are using nature to our advantage rather than treating it as something that is God-given. That you would then extrapolate from that and think why not organise society in that way? Why not organise economic life in that way? Why not apply the same principles? And that's what Hayek is criticising, that applying the scientific mindset in the wrong area. So Hayek, obviously, being a classical liberal, was extremely pro-science. It's just that everything has its place, everything at the right time. So when it comes to to physics, chemistry, biology, then obviously the scientific method is exactly the way to go and you want to apply rational principles. It's just that when you're dealing with individual people, then that's a very different story and people who have a volition of of their own, unlike inanimate objects and particle matters who are just subject to, to blind forces of nature. So that was his criticism.

Kristian Niemitz: 27:30

I don't think it describes the left of today. So today's left, if you look at Extinction, rebellion and Justs of Oil, okay, they say, listen to the science, meaning climate science. But even then they don't really do that because climate scientists are not saying, okay, they're saying climate change is a problem, we should do something about it, but they're not usually saying we should drop everything else and dedicate all our energy and resources just to decarbonization. So that's not science, that is a hyper-alarmist misrepresentation of the science that an actual scientist would dispute would say no, no, that's not what I'm saying. So today's left is mostly, at least at that extreme end, is very post-science and post-rational.

Amul Pandya: 28:23

So let's take the left maybe, who are greater in number and a bit more like if you use the left-right spectrum, whatever believe in some sort of need for intervention, but they're probably not going so far as to say switch off coal, switch off fossil fuels tomorrow, like the Gretas that kind of middle of the bell curve and I believe the centre-right are guilty of this as well kind of believe in economics as a science rather than as a hard science, rather than a social science. And one of the things I really liked about that Hayek lecture was that he splits out in physical sciences or hard sciences, you've got a small number of variables and you can therefore put those variables in and predict the output, predict the outcome. With social science and economics, you've got a loads of variables, but b the variables interact with each other, and so what you end up is making predictions that are based in nothing. Yes, based you know. Basically, I think you know you can be precisely wrong.

Amul Pandya: 29:40

Yeah, because of x thing let's say brexit or whatever tariffs, gdp in three and a half years time will be down. Yeah, 2.874 percent. Um, and here's my model to show that. Do you are free market economists as guilty of that and playing that argument back and forth. No, no, you're wrong. It won't be down 2.47%, it'll be up 3.2% because of this extreme increase in trade or kind of better allocation of labor markets or whatever it might be. So is a scientistic behavior. Are we playing their game on their turf rather than going look, you can't predict this, just let resources be allocated how they should be.

Kristian Niemitz: 30:24

Yeah, so it's generally true that economics nowadays is trying to imitate physics. I mean, that's not new. It's been that way for over half a century. That's why, even though I studied economics, I don't think I would do it again. I didn't enjoy it. It's mostly mathematical modeling, and this isn't a left-right thing. So my economics professors in Berlin were not lefties.

Kristian Niemitz: 30:50

Most of them were the sort of people who would probably think it's lowbrow to have a political opinion or to describe your political opinion in any terms. They would say no, I'm a scientist, leave me alone with your political rubbish. They would think that's a lowbrow, low-status thing to do. They would think that's a low-brow, low-status thing to do. So this is generally true, that economics has turned into this pale imitation of physics, the big difference being, as you said, forecasts never work In physics. They do. You can.

Kristian Niemitz: 31:22

Obviously, there's always going to be some mistakes because something unexpected happens. But you can model physical outcomes in a way that you can't with economic outcomes, and that's why most economic forecasts turn out to be wrong or not. Much better than complicated guesswork. And that's, yes, true of some of the economic schools of thought that would I guess they wouldn't call themselves that, but that somebody could describe as neoliberal or free market leaning. But it depends on which schools we're talking about. So there is the Chicago School, the Milton Friedman, gary Becker School. They are very mathematical, they are in that mold, yes. But there's also the Austrian School of Economics, an older free market school of thought. They've always rejected those methods, so the criticism would not be true if you apply it to them, but it would be true of a standard mainstream economist.

Amul Pandya: 32:20

And are you, the Kristian Niemitz school of your own school, kind of finding your way, or would you find yourself part of one tradition versus the other?

Kristian Niemitz: 32:30

I simply don't know enough about it to firmly say I'm in this school or that school. So I'd say, as a general way to think about economic life, economic principles you're probably better off with the Austrian school, economic principles you're probably better off with the Austrian school. But some, some of them are a bit too extreme in rejecting empirical methods entirely. So while it's true that forecasts are usually wrong, that's not what economists should be, should be obsessing about. There are some questions that you can only really work out empirically. So let's say the effect of minimum wages. Okay, you can say in principle, we know that if the price of something goes up, demand for it will go down. But then the question becomes how big is the effect going to be? And is it maybe if you have a large number of people being better paid and a very small number of people either lose their jobs or don't get a job in the first place? Is that maybe a trade-off worth making? There you have to put numbers on it, there, you just have to study these things empirically.

Kristian Niemitz: 33:36

And that's what these studies do. They look at. I can't remember which the states were, but there were two neighboring states in the US. Remember which the states were, but there were two neighboring states in the US. One of them either introduced a minimum wage or went above the. Well, there is a federal minimum wage, but states can go above. One state did that and the other one did not. And then the economists look at what happens at the state border. If you have, say, employers that are relatively similar one is on this side of the border, the other one on that side what sort of differences do we observe? And that's something that you can only work out empirically, and that's where the Chicago School clearly has a point.

Amul Pandya: 34:11

Yeah, so there's kind of observational differences in the moment that you can make, even if over the long term, let's say, a minimum wage is introduced somewhere which at the same time sees a huge boost in productivity from an extraneous factor, whatever it might be sorry, exogenous factor, or the right term is. You know they start, you know unlocking new technology or there's, you know, there's this cheaper energy that comes in. So all of a sudden, all else being equal is a problem with the Austrian school and so far that, all else being equal, if you introduce a minimum wage and then unemployment will go up, but most of the time in life all else isn't equal. Other things are happening at the same time. So it's it's, it can be done, but it's hard and you have to be cautious about it. But it doesn't lend itself to kind of political commentary because you hear people arguing about. You know, last month, last quarter, our GDP was the highest in the G7 this quarter. So it's tricky kind of setting the boundary of where empiricism can help and not.

Kristian Niemitz: 35:20

Yeah, it's normally useful when you're dealing with magnitude. So it's one thing to identify a cause and effect relation, to say that this causes that, but sometimes you also need to know, ok, how big is the effect, and especially compared with other things that may be happening at the same time. And these are things that you usually can only work out empirically, and that's why a lot of economic papers just take the form of comparing US states. That's where federal systems are brilliant that you have.

Kristian Niemitz: 35:51

You can have neighboring states. They're very similar in most regards, but they just have a policy change. One of them introduces a policy, the other one doesn't. And then you can say let's have a look at what happens in that state compared to the other one. Let's look at the can say let's have a look at what happens in that state compared to the other one, let's look at the difference in differences. That's when you want to know for, say, if you put a tax on labor or something. Of course you can tell in advance. If you tax something you will get less of it. But if you're interested in how big is the effect and does it matter in the grand scheme of things, those, then you need empirical modeling so one thing we can maybe empirically put to bed and we've talked about earlier.

Amul Pandya: 36:30

So you've got holding up a copy of your book here, a nice weighty number called socialism, the failed idea that never dies. Um, we've acknowledged that true socialism has been tried. We've put that to bed, despite what many modern believers of socialism will say. It has been tried many times. Is that fair? Has it worked? Has it empirically worked?

Kristian Niemitz: 37:00

It has always ended in varying degrees of failure. So there is not. You could of course say, going back to what we talked about earlier, east Germany was not, in absolute terms, a desperately poor society. You would probably be, so that's why they had on a much smaller scale than West Germany, but they had some immigration, even from other socialist states, or people from first Vietnam and then Cuba, mozambique, angola. For them, I guess it wouldn't have felt poor, they would have thought well, this is a developed society, but it's always, if you compare it to a realistic, counterfactual. Then if you compare any socialist economy to a realistic, it doesn't even have to be capitalist, but let's just say mixed economy, market-based economy, counterfactual. It's always the more capitalist one that does many times better. And we're not talking about, as with brexit, a difference of maybe four percent or five percent of gdp, but we're really talking about multiples.

Kristian Niemitz: 38:02

In the german case, the difference was that west germany was about three times richer than east germany in per capita terms, despite the fact that there the division only lasted four generation really, um, and that's just always true. Where, wherever we have these easy comparisons, uh, these um, plausible comparisons, where uh say north and south korea, where it's basically like a natural experiment taiwan versus mainland china in the maoist period and cuba. You could compare to some of the caribbean islands around it, puerto rico so it started from a, from a similar economic base, but then puerto rico being an overseas US territory, they have basically the legal framework of the United States and it's just always. When you have comparisons of that nature, it's always clear that the more capitalist one, the mixed economy system, is always at least three times richer than the socialist one, in some cases a lot more than that. And if it lasts for long enough, that division and those different economic systems, it will also filter through in differences in in life expectancy and pretty much anything else that you may care about, even even environmental measures, things that the modern left claims to be so passionate about.

Kristian Niemitz: 39:30

So West Germany, partly by virtue simply of being much richer, was able to introduce environmental protection relatively early on, and they had the concentration of toxic substances in the soil, the water, the air was much lower than it was in the East. And partly because they could afford to make that trade-off, they were able to say, well, okay, we may sacrifice a percentage point of GDP here, but actually our quality of life will be higher, so will make that trade-off. We're happy to do that, whereas in in the east, well, if you have, if you're at the level of development where people want to escape because they'd be richer on the other side, you're not so easily placed to do that, and that's just always the case. So if we treated this as, as something that's empirically verifiable, then it's. The results are crystal clear and very unambiguous.

Kristian Niemitz: 40:27

That's what makes this special, this comparison of capitalism versus socialism, where, with everything else, if we compare, say, denmark, sweden to the United States, there, well, it depends on what you're interested in. It's not that one is obviously better at everything than the other. If you're interested in equality, or that, say, peace of mind of having universal health care, then fair enough. Then it's true to say, scandinavia is probably a better place for you than the US. But if it's capitalism versus socialism more broadly, it's completely unambiguous. It doesn't matter what you prioritize, whether that's economic, material factors, material living standards, whether that's social factors.

Amul Pandya: 41:16

Do you look into death as well, the death toll of socialism, or are you trying to take it from a purely economic data perspective?

Kristian Niemitz: 41:26

trying to take it from a purely economic data perspective. Um, I've limited it to the economic data, but that's uh partly because, uh, the socialists would of course say, well, the deaths, that's got nothing to do with us. Uh, that's so because, if they're not real, socialism um factor and, and there you could get into a, a kind of tally match where they would say, ah, but capitalism caused the First World War, or capitalism caused colonial exploitation and all that. Where I'm more interested in the economic logic behind it, I would say I'm sure you can find regimes that had a capitalist economy and that also committed horrific atrocities. I would just say they didn't depend on that. In their case, it was a political choice. They made bad choices and they could also not have made them.

Amul Pandya: 42:17

It wasn't inbuilt into the ideology.

Kristian Niemitz: 42:19

Yes, whereas with socialism it very much was.

Amul Pandya: 42:21

So you touched on the colonial side of things. With socialism it very much was. So you touched on the colonial side of things. Maybe it's a good time to pivot to your latest piece of writing, um called imperial measurement, which I'm holding up uh, for people listening, a cost benefit analysis of western colonialism. So you've again taken this from a very economic rather than a moral perspective. Is, is that?

Kristian Niemitz: 42:44

right.

Amul Pandya: 42:44

That's right, yes, and what made you want? Well, what are the conclusions? Let's say, as you know, let's start with what made you want to write this, and then we can talk about it.

Kristian Niemitz: 42:52

Yeah, so this was purely a response to this BLM mania that we saw in 2020-21, that we just copied and pasted an American culture war and it was just transcribed onto British soil and continued here treating Britain again as the 51st state of the US.

Kristian Niemitz: 43:15

But then that quickly became a kind of soul-searching exercise of British history. You had this group of activists in Bristol, topp, toppling the statue of the uh of robert colston, was it? Yeah, who was a merchant but also involved in the slave trade and that's where he made a lot of his money. Um, and I just uh realized that these people, uh, you know, some people were treating this as a pure culture war phenomenon and saying we as economists, we shouldn't even talk about this. This is separate.

Kristian Niemitz: 43:46

This is just none of our business. But I paid attention to what these people were saying and how they justified their actions and realized that actually they were making an economic argument, not in the sense that they would have an opinion on the latest inflation forecasts or the latest obr forecasts on on the deficit or the debt to GDP ratio. But the argument they were making is that these atrocities, the slave trade, colonization that these were not just bad choices, bad political choices inspired by a form of atavistic nationalism, which is how I would describe them, but that those were. That this is how the wealth of the Western world was built, that we grew rich on the basis of plundering the rest of the world.

Amul Pandya: 44:37

So basically they came.

Amul Pandya: 44:39

It reminds me of the conversation I had here with Chris Snowdon, where he said, basically the the health campaigners came onto his turf by talking about the impact of smoking or drinking or whatever it is, on um the economy, and so therefore he felt compelled to respond and then they kind of you know, it's very, it sounds very heartless, but if you look at it in economic terms, then smoking is very good for the economy because people die just as they retire and the you know, old people are very expensive.

Amul Pandya: 45:14

So if you're going to come onto my turf, let's have the argument on our terms, yeah, in economic terms. And, um, you want people to die as soon as they start working. Is is what's good for the economy. So you're basically, yeah, you're stepping back from the kind of emotional or the moral arguments about colonialism or imperialism and going actually the West, or the colonizer, the recent colonizers, because colonialism has been a feature of history, going back for most of our existence as a species, but the wealth has actually not been built from extraction or plundering, but from capitalism and innovation and technology. Is that fair? That's it, yes.

Kristian Niemitz: 45:56

So, yes, it's very much like in Chris Snowdon's case. It's not a debate that I chose, it's the opponent started the, the culture war, made it about the economics, so then I had to respond and they started it, and then this is my response to that. So if, if this had been purely a debate about was colonialism bad, was the slave trade bad, well, that would be kind of pointless. It's not as if anyone today defends the slave trade. It's not as if anyone says, okay, there are people who say the empire wasn't all bad, but even they wouldn't say that Britain should go around today colonising other parts of the world. So there is no neocolonialist movement. There's nobody who would say Britain should recolonise India or wherever so. And if it's purely about the moral aspect, there isn't really a debate. If it were just that, it would all be kind of pointless. It's an area where there is already universal agreement, um, but it's. It's precisely that.

Kristian Niemitz: 47:05

The, the argument of blm and and the, the various spin of movements, was precisely that. This isn't just something where we can say, okay, well, in the past, the past has some dark chapters, shame, but we can't change it anymore, um to to saying, no, actually, this isn't about the past. This is very much about the present. The wealth that this country enjoys today was built by colonial plunder, by enslaving people, and we can't just brush that aside, according to them, by saying, oh well, this is the distant past, we've changed our ways, we don't do that stuff anymore. So therefore, today, today, everything is fine, they'd say. No, this is the very foundation of the West's wealth, and I'm just looking at the numbers, to the extent that that's possible. Of course we don't have complete records, it's all rough estimates. But it's just very implausible to say that the colonies, that the empire, that that uh, is what made britain rich, because the numbers are just not big enough to to justify such conclusion?

Amul Pandya: 48:14

how? How conclusive are the numbers? Was it a net loss for the west to be or britain, let's say, to run an empire, was it just more expensive versus what it generated? Again, talking coldly, in economic terms rather than moral ones. But is the data slam dunk on that, or is it at?

Kristian Niemitz: 48:36

least debatable. It is debatable, but within a fairly narrow range, and that is a range around the number zero. So it is just about possible that it made a small positive contribution. I think it probably didn't, but that I can't completely rule out. That's still a legitimate reading of the numbers. It is also possible if we look at the lower end of the I mean it's all a spectrum of numbers rather than definitive numbers uh for, say, the amount of of money that came in from from the colonies, uh, so we have an upper end and the lower end.

Kristian Niemitz: 49:15

And then we have to estimate again, okay, how much of that was because of colonialism. So you could say, um, if you had people traveling to India and buying some spices and tea and whatever, bringing it over here, not all of that happened only because India was a colony.

Kristian Niemitz: 49:35

Yeah, so it was some trade predating it. Some of it, you could say well, there was trade with Brazil as well, even though it wasn't a colony, so on a smaller scale maybe. Though it wasn't a colony, so on a smaller scale maybe than it otherwise would have been. So some of it can be attributed to the fact that India was a colony, some of it cannot, but we can't say exactly. Ok, 45% would have happened anyway, 55% is specifically empire.

Kristian Niemitz: 50:01

But yeah, so you're working with a spectrum of possible outcomes upper limits, lower limits where you can say, well, it cannot have been more than that, it cannot have been less than that. But with that spectrum, where you end up is you get a range of possible outcomes around the number zero, just about possible that the empire was a small net gain, also entirely possible and more plausible in my view, that it was a net loss. That at least compared to say, if the alternative had been you dissolve the empire, you grant the colonies independence or, better still, never colonize them in the first place, but you have then lower administrative and military expenditure you use that for, for tax cuts or for productive investment and and yes, and you go for a policy of free trade, uh, ideally with everyone, with the neighbors, but also with the uh, well, the not colonies anymore, uh, the newly newly liberated or never colonized uh territories.

Kristian Niemitz: 51:03

If that had been the alternative, then I'd say it's fairly clear Britain would have industrialized even faster.

Amul Pandya: 51:08

So all the wealth, to summarize it very quickly, all the wealth that we see here relative to many countries, prior colonies, is, um, not the function of extraction. Um, that extraction was kind of net, you know. Rather, um, we're kind of net neutral, basically, versus getting extremely rich off the back of colonialism that's the fair summary.

Kristian Niemitz: 51:35

Yes, what's?

Amul Pandya: 51:35

the what's the response been to this.

Kristian Niemitz: 51:42

What's the response been to this? Well, hostile, as you would expect, but in a strange way. So there has been a leftist academic from somewhere who said you're just doing this to fight a culture war. I'm saying no, no, no, the culture war already started. I didn't start it, I didn't start the fire. I'm just responding to it, I'm just not. What happened for the first year or so of the whole BLM madness was that the BLM left, the woke left, were pretty much the only game in town and they completely monopolized various issues. It's only when somebody fights back.

Amul Pandya: 52:24

Including the economic ones.

Kristian Niemitz: 52:26

Yeah, that's when this accusation comes up. So I don't accept that. It's the other side that started the culture war, and well then, if they want a culture war, happy to take part in it.

Amul Pandya: 52:40

Yeah, so, okay. So the accusation accusation has been well, you're just trying to kind of build a profile by being. You know, going on about how awful wokeness is is kind of no one's looked at the arguments and gone. Actually, if you take this data and look at that this way, then actually you're wrong, that it's been much more playing the man rather than the ball yes, mostly.

Kristian Niemitz: 53:01

Yes, there has been some attempts of of nitpicking here and there, but yeah, all I'd say done in bad faith, okay.

Amul Pandya: 53:12

So obviously you've got a stack of other books here that you've written. Why don't we kind of zoom out and go to kind of a blank sheet of paper? We'll give you a blank sheet of paper or a blank canvas. You've been living in Britain for a long time, so let's use Britain as our test case. What's Britain's economy like? Does it need fixing, and how would you fix it if it does need fixing?

Kristian Niemitz: 53:44

Well, that's the frustrating bit In most of the rest of the world whenever you look at troubled economies. In most cases fixing them would be very difficult. It would require some difficult institutional reforms that nobody quite knows how to do.

Kristian Niemitz: 54:03

I'd say Britain's case is, in a way, frustratingly simple, because the fundamentals are in place. Britain has still a decent institutional framework and that's a legacy, something that's existed for a long time, and I guess that's why, going back to this, why the Industrial Revolution started here Britain was just already, at an early stage, quite well developed when it comes to protection of property rights, rule of law, freedom of contract, the fundamentals that make an economy wealthy. Okay, so let me frame it then.

Amul Pandya: 54:43

That's quite useful. So there's a great foundation which makes any kind of repair fairly straightforward, because you're not building the rule of law from scratch. That's right. Yes, let's take inflation, for example. So ostensibly we've just come out of what had been described as an age of deflation or, you know, a low inflation period for 20-30 years. Now, that is looking at an aggregate index number of, let's say, cpi, rpi, whatever you want to call it. So within that, goods inflation is, yes, absolutely because of globalization. Or, or, you know, the market and trade and infrastructure got cheaper. But if you take things like health care, education, government services, housing, let's take those four things, they, I would argue they've got a much more expensive and be much shitter in the last 20, 30, 40, if you pick your timeframe.

Amul Pandya: 55:50

And they are the things that are as important as cheap TVs and plastic party balloons that you can get made in China and delivered to you next day by Amazon, which is great. I'm not knocking that importance, but you know, I see a book here on healthcare, for example. So would you agree with that framing of the economic malaise that we are in?

Kristian Niemitz: 56:17

Essentially yes. So I'd say healthcare is a bit of a special case. Let's maybe leave that for later, but all the other ones. There is definitely a pattern that the sectors where we've seen the biggest cost increases are the ones that are either provided directly by the state or where the state controls a key input. So housing that's also one of my ongoing obsessions and I may have written about this already when you were here. One of my ongoing obsessions and I may have written about this already when you were here, and I've been returning to this on an on and off basis ever since the inability to build anything. That is the main problem that Britain has. It really is as simple as that. It's about. Other economies may have the problem that they try to attract investors and the investors are reluctant and don't want to invest. Britain has the situation where you have investors queuing up, knocking on the door, begging, basically, please let us invest here, and we're telling them no, go away. You just can't get permission for anything.

Amul Pandya: 57:18

It's such an example. We've got such a simple problem. Yeah sorry, we've got. We've got like a technology like small modular nuclear reactors, which I believe a lot of it was developed here. We've got the ability to do that, to get to net zero very quickly with cheap, clean, abundant, broadly abundant nuclear energy. Um, so all the building blocks are there but we're buying coal from Norway off the grid to kind of stop blackouts. Is that a political problem or an economic problem or an economic misunderstanding?

Kristian Niemitz: 57:51

It's an economic problem that's politically caused, because you just don't get permission to build anything, whether housing or offices or retail space or manufacturing sites or the infrastructure for energy and energy generation and transmission. There's always some resistance and you first get the purely political problem of NIMBYism, of MPs, especially in marginal seats, being terrified of local NIMBYs because they're politically active. And then also the judicial process that obstructionist groups, nimby groups, would use the judicial process with well, launching bad faith lawfare and thereby blocking or at least slowing projects down. Vexatious complaints, uh, in the same way that we get for uh when it comes to free speech um, that also happens. Or politically, um, motivated vexatious uh complaints that also happens when it comes to shutting things down and an economy that doesn't build stuff doesn't grow. That's why it's so frustratingly that's why I say that it's frustratingly simple that this isn't an economy where you have to somehow lure investors in and try to convince them to invest here. No, they are coming voluntarily, they want to do stuff and we're just telling them no. So I remember I did a tv interview once on this where uh, where it was well, my presence was kind of pointless because they had given the answer already.

Kristian Niemitz: 59:32

They showed a news segment where you had one mp boasting about how, uh, how, they had blocked um, I think it was a film studio. Somebody wanted to open a film studio, uh, on a, I think, a disused quarry, and there's always examples like that, something totally ridiculous. It's not even about preserving beautiful nature or anything. It was often some disused car park or whatever. An MP boasting about I've shut this down. Another MP boasting about how they had shut down a housing project. Another MP boasting about how they had shut down a housing project, another MP boasting about how they had shut down something else and even things like water reservoirs, and there's always somebody against it blocking it and MPs then boasting about it. And they had. They showed that news segment about how politicians were blocking things, and and then the question to me was why does the economy not grow?

Amul Pandya: 1:00:23

I said well, you've just given the answer here, my job is done. So is there a challenge? I'll pose a cultural question which you can not answer if you will stick to the economics. But in Europe, at least, europe's kind of starting to become a bit of a laughingstock. There was a clip recently of a German finance minister trying to become a bit of a laughingstock. Um, there was a clip recently of a german finance minister trying to smash a bottle of champagne on a ship. Have you seen this? No, so there's an e-regulation that has stopped, um, champagne bottles being thrown onto a new ship. It has to be winched on, it has to be kind of smashed with a safe handheld device that is attached to the ship, and it wouldn't work. And this guy was trying to like smash it and then it yeah, and it was a kind of demonstrative of how we've chosen safety over efficacy or outcomes versus the us which is much more go, try, fail doesn't matter.

Amul Pandya: 1:01:22

If you failed like go again it's. You know failures to be applauded and you know innovation, technology, that that kind of frontier spirit Britain is sort of was the old US in many ways. From that perspective, um, and we we're kind of culturally fatigued with going out and we prefer welfare and comfort to. Yeah, we, we we're happy to cap the upside if, as long as the downside is kind of with welfare and regulations, no risks are taken that is generally a difference between the us and and europe.

Kristian Niemitz: 1:02:01

but I'd say, even with the block everything mindset that we have here, I'd say, even if, even from a perspective that prioritizes safety over dynamism and long-term prosperity, you wouldn't, even if you take that as given for a moment, you wouldn't end up with the system we have, because quite often newer forms of energy can be safer than old ones. New houses, new buildings can be safer than old ones that they replace. So we're not even prioritizing safety over dynamism. We just mindlessly block stuff. And some of it can be perfectly safe stuff.

Amul Pandya: 1:02:41

So let me, because it's not a cultural problem or it could partly be contributory. But uh, I can. I put another theory to you then, and what you describe as nimbies, or voters particularly in sort of powerful voters very much in the haves versus the have-nots. So they've got housing, they don't want anything to rock the boat around them, they're the beneficiaries of development around them and an improvement in infrastructure, population growth, technology, but they are effectively those NIMBYs, are effectively rent seekers.

Kristian Niemitz: 1:03:21

Yes.

Amul Pandya: 1:03:22

So here we go. Is the issue that, um, it's not a capitalism problem, it's a, it's a land problem and you're, you're, you're a nimby because your wealth is tied to your ownership of land. And if we can just unlock that by removing the benefits of land speculation, we can disincentivize people just doing stopping anything that might risk the value of their properties I used to think that, uh, initially when I started uh, looking into those issues.

Kristian Niemitz: 1:03:57

But I think that's um an economist fallacy to project your economic logic into a NIMBY. I think NIMBYs, from having looked at how they behave, are much less rational than that. They are not rational property wealth maximizers. A lot of them would even deny that their supply side deniers. They even explicitly argue that supply of housing has nothing to do with the price and that prices are somehow magically determined and they they're determined by vibes. So they, they don't see it that way. They don't. They wouldn't say well, um, I know that this means other people will be stuck in overcrowded accommodation, but I don't care, I wouldn't, I only care about my property. Well, they wouldn't. They would never say it like that and probably even to themselves would would. Even if, if they're behind closed doors, I, I don't think you will you would hear them say okay, now the cameras are off, the microphones are off, now we can admit all this environmental stuff, landscapes that we talk about obviously rubbish. We're just talking about our housing wealth. I don't think that's how they roll.

Kristian Niemitz: 1:05:03

I think it's, uh, it's, it's something much more more visceral. They are just annoyed by signs of um economic life things happening around them. They just feel entitled to keeping the area as it is now and at a purely emotional level, I kind of get it when I see there's often construction around here and it is irritating sometimes and you think, well, why are they doing this? And you sometimes do wonder if I have the power to shut it down. Sometimes I'd be tempted to use it, I guess, especially because then you also you don't see much of a benefit and quite often you don't even realize. It's not clear to you what this is all for and you just have to have that impulse, um, and I think nimbyism is much more visceral, emotional, um, it's about stopping and annoyance so my, my, my response to that we don't need to kind of disagree too much on this because I think we're broadly aligned.

Amul Pandya: 1:06:00

But, like the, the visceral, it's an it's, it's a subconscious calculation of your, of your wealth or any risk to it, like any change to your surroundings, is a risk, even if it's better for the economy as a whole or better for younger people. And I think the kind of economic we, we are, the location rents are an issue. So for young people to live and work in london, they'll spend most of their salary effectively on rent and commuting. And not only just this, not just renting, but the fact that the cost of getting a coffee in london is going to be two or three pounds more than it is somewhere else because that cafe has to charge you more. Yes to and this is ricardo's, you know law of rent effectively.

Amul Pandya: 1:06:52

Um, I'm in a real kind of georgism phase of my life and I want to use this opportunity to kind of either you, you know, depress you on that, and you know, I see the kind of I'm seeing a holy grail solution to kind of our economic malaise being over time, over five years, reducing all tax on capital and wages and increasing taxes on land values as a way out of this issue, because then land can because of the price and elastic nature of land, you can then unlock land that that is currently being held for speculative purposes to be used for what it should be used for, whether it's building, housing or laboratory space or warehouses, whatever it might be, rather than, rather than um, just being, you know, sat on yeah, I don't think that's what really happens in in britain and uh, it's, it's not that that you have the land available with planning permission and somebody just holding it, um.

Kristian Niemitz: 1:07:54

So okay, there is the issue of land banking, but that is in it. That is in itself a consequence of the planning restrictions. If you think about, say, you're a developer and you have a certain amount of land with permission, but you have no idea what's going to happen in five years, whether you will still secure more land with permission. So you have to kind of spread that out because you have other uh costs, you have your, your workforce, your machinery, and that you can predict in advance. You will still have that next year, in two years time. Uh, it's the land that that is the bottleneck and uh, that you uh, you spread out um over the years. But it shouldn't say what, um, what that means Land banking isn't that somebody just withholds land and never does anything with it.

Kristian Niemitz: 1:08:46

They might put it to use, say, two years or three years later than they otherwise would, but that wouldn't explain. What I'm looking at is say things like if you compare the total housing stock per thousand people, number of housing units per thousand people here, versus the EU average here, versus the OECD average here, versus some other economy, britain is just doing very badly on those comparisons. And it's not that the other places have Georgia's land value taxes. So when it comes to explaining the difference between, so this is something that Britain is doing particularly bad at. When it comes to explaining the difference between an economy where that problem is very, very stark to economies that are much less affected, the issue of land taxation doesn't really come into it either way.

Amul Pandya: 1:09:36

So it's lower hanging fruit. You can basically ease planning restrictions and that will enable kind of new supply to come to the market, even if, down the line, uh, that all ends up in uh landowners pockets, um, but there's, there's benefits that can happen in the nearer term without having to kind of go down the land value tax route well.

Kristian Niemitz: 1:10:00

I think it's not going to end up all in the pockets of landowners. There is still competition among landowners in that nowadays we are much more mobile than in the days of Henry George and different sides do compete with each other. I'm not opposed to a land value tax. I'd say, especially as a way, if you could replace council tax and business rates with a land value tax, that that would be a much better solution because of the incentive effects that you would specifically not charge it on the improvements. So you preserve all the uh, all the incentives to improve the land that you have and do something useful with it, put it to valuable use, and that's all great. Those are all attractive features of a land value tax.

Kristian Niemitz: 1:10:53

So I'm not against it. It's just I think Georgists become quite quickly sucked into it and become single issuers and then start writing about how your dating life would be better if we had a land value tax. They become almost like socialists who put everything. Everything leads back to this one thing yeah, it's a grand unifying theory that you kind of, and you get that.

Amul Pandya: 1:11:20

If only we had the gold standard. Or if only you know there's always something that causes the root. It's all about money supply, or? But um, so do you from an economic theory perspective, do you not? There, do you?

Amul Pandya: 1:11:39

The classical, classical school of adam smith and and dave ricardo would argue that you know, land is a separate factor of production which is very price and elastic. It's what gets paid first before capital and labor gets paid, and therefore you're always going to get in privately owned in in economies with land as private. You know where the rent can be delivered to the landowners. You're always going to get this big transfer.

Amul Pandya: 1:12:07

So the one compelling argument I heard of this I don't know if you're familiar with Peter Thiel, but he would say you know, in the 80s we got this supply-side revolution, this kind of one-off deregulatory impulse, which was great, but then that ended up eventually being passed to to kind of that wealth ended up, the wealth creation that came from that over time got concentrated into location rents. And then you had this sort of globalization trend in the 90s and noughties which created a lot of wealth and prosperity but that also ended up ultimately going into landowners' pockets and therefore we could just double down, triple down and argue for more deregulation, more supply-side reform which is great lower taxes, cleaner but that's only ultimately just going to push up land prices unless you address this kind of land issue.

Amul Pandya: 1:13:00

So, you're not as seduced by that kind of Georgist argument as I am.

Kristian Niemitz: 1:13:06

No, I think that's a fair description of what happened here in this country, but that's simply because we've constrained the supply of land that you can use, and that's a much bigger factor than the total availability of land. So Georgists and well, they're not the only ones. There are people who go on about how land is finite and therefore supposedly the land market is so totally different from anything else. But it's not. The total amount of land is that's not even a constraint. There is so much land that isn't being used right now and that is never going to get used. The total supply is completely irrelevant. We're using such a tiny fraction of the of the land other than for for agricultural purposes that I'd say that's just really not an issue.

Kristian Niemitz: 1:13:52

And talking about the us, where at least most states have a more flexible housing market, it would not be true to say that all the gains from Reaganomics have been capitalized into land value rents.

Kristian Niemitz: 1:14:09

You do get increases in median incomes and the median income earner is not some super landlord who just owns tons of inner city land and otherwise does nothing.

Kristian Niemitz: 1:14:24

It's true that in Britain, if you constrain the amount of land that you can effectively use, that is effectively available for economic life, for residential or for business purposes, if you constrain that while you have a growing economy. If you constrain that while you have a growing economy, then yes, that's a windfall gain to the people who already own land well, land with planning permission, people who already own business premises or residential houses. So here it has absolutely happened that there was this mock calculator on the BBC website where you can work out, if you're a homeowner, whether your home earns more than you do. You just put in your postcode and your salary and it would calculate how you can expect to get a pay rise of this much and, based on the development and property prices in that area, your house is going to gain that much and it's quite easy to be in a position where the house does earn more than you, but that's not a georgist issue.

Kristian Niemitz: 1:15:32

That's because we're not building anything and we've still got this ultra constrained housing supply. Nothing wrong with a land value tax, but it's neither necessary nor sufficient okay.

Amul Pandya: 1:15:44

So unlock some supply, that's one solution. Build some more stuff whether it's infrastructure or nuclear energy, I don't know what we feel how big into energy you are, but you know or some decent energy that isn't sort of a 14th century hamster wheel. What about healthcare? How would you, with a black sheet of paper, design a healthcare system? Or what examples would you use in the world to kind of create a healthcare system that was effective?

Kristian Niemitz: 1:16:22

Well, in the healthcare book I'm talking about the private insurance systems in the Netherlands and in Switzerland primarily. There's some other examples as well, but these are the easiest for explanatory purposes. So these are broadly market-based systems. Healthcare is mostly privately provided and if you need to see a healthcare provider, your health insurer would pay for you for most of it, maybe minus a deductible, rather than paying out of pocket. So it is a market. You can choose among private insurance companies, you can choose among private healthcare providers, but it does have a safety net, which has two components. One of them is there's a premium subsidy. If you can't afford your health insurance premium, the state would pay it for you. But also there is a regulatory system under which health insurers are not allowed to discriminate on the basis of health status. So that's what makes it different from the private health insurance that exists in this country.

Kristian Niemitz: 1:17:34

On top of the NHS or besides the NHS, you can get private health insurance here.

Kristian Niemitz: 1:17:38

It's just that they will charge risk-equivalent premiums, meaning it's only really profitable, probably if you're relatively healthy and relatively young. And in the systems that I'm talking about, health insurers cannot vary premiums in that way. They have to for a given insurance product, they have to charge everyone the same premium and they then have a system where the insurers that end up with a lot of the good risks the kind of people that you uh ideally, I guess, want to have, uh, the, the people who are in great health, uh who who rarely um need to use health care, the people that cause you low costs, these insurers, the ones that are lucky, in that sense you have to compensate the ones that have the higher risks, the more complicated cases and that have higher expenditure, and the result of that is simply that, from an insurer's perspective, it doesn't matter to you whether somebody is 20 years old and in perfect health or whether someone is 80 years old and needs ongoing medical treatment. Both are equally profitable. So you get that universality.

Amul Pandya: 1:18:51

Yes, so, by definition, your answer has not been. I would create some sort of national health service that would be free at the point of use and, you know, run by the government. Why? Why not? Can you give? I've seen data around used by defenders of the NHS to say that it is the best functioning. I can't remember it, so maybe it's not very good data, but can you, can you, can you explain why you wouldn't carry on with the National health services?

Kristian Niemitz: 1:19:22

it is well, I'd say healthcare is ultimately not that different from other goods and services.

Kristian Niemitz: 1:19:27

It's basically a sector of the economy like any other and it would be very strange if you said, well, in this sector, all the standard economics, everything that I normally believe in, that competition is a good thing, that consumer choice is a good thing, that consumer choice is a good thing, that that somehow no longer applies.

Kristian Niemitz: 1:19:45

It's basically a market like any other and if you have a state monopoly provider, you are losing a lot of the benefits that you get in a competitive sector, and that's also true in health care. It's not that different and we see that in the data that the NHS insofar as we have measurable healthcare outcome data the NHS is clearly quite far behind the systems that I'm comparing it to. It has worse clinical outcomes and longer waiting times and and that was just never very different. So we have time series, series going back for quite a while and for as long as we have data. That's always been the case. We make the mistake of unduly focusing on this one outlier system, which is the US, when there are really good examples of functioning private health insurance systems.

Amul Pandya: 1:20:40

And the US is not a private health insurance system. It's very state-involved. Is that right?

Kristian Niemitz: 1:20:48

Well, it's basically every kind of mechanism to deliver health care exists in the US, so they have really multiple parallel systems. They have a private insurance sector that covers about 60% of the population, so mostly that's the working age, the non-poor working age population. They have private insurance, so they have that. But they also have state insurers Medicaid and Medicare so they would not provide their own health care but they would be monopolists for a particular group. So if you're poor and you're entitled to Medicaid, you can't choose an alternative health insurer For you in that situation. They are a monopolist.

Kristian Niemitz: 1:21:39

So they have that and they also have for army veterans have that and they also have for army veterans. But in particular they also have state-run healthcare facilities, so they have like a mini and that would be like a mini NHS. You have state health insurers, like in Canada, and you have private insurance all side by side and none of those different parallel systems really work very well. So I think it's a bit of a red herring to just point at the private insurance part and say that must be the problem. That is the part that's not working. It's the whole system, even the more state-dominated parts, which has that problem even the more state-dominated parts, which has that problem.

Amul Pandya: 1:22:21

So it's a great PR coup for defenders of the NHS to, whenever an alternative is discussed, to bring images of people's minds of a certain subset of American healthcare and ignore or forego what is happening in Europe or Asia. Your solution is there an issue this comes up a bit in conversation with kind of healthier people. I know where there's a frustration with moral hazard where sort of bad choices, healthcare choices made by people, are paid for by, you know, a nationalized or universal healthcare system so if I smoke and drink and and eat junk food all day for 30 years.

Amul Pandya: 1:23:07

The taxpayer or the the health insurer has to put foot the bill. Is that something that you've thought about as an issue, or is it just?

Kristian Niemitz: 1:23:17

it's a minor issue compared to the state of health care at the moment, and most, mostly that I'd say it's true in principle, um whether you have a national health service or, um the kind of non-discriminatory insurance system that I'm talking about there. It's also true that if somebody smokes or eats fast food every day, the insurer couldn't say, ah well, we're going to charge you more. Now there's no risk surcharges. So it's also true in that system that the cost of that is collectivized. But I'd say two things. The first one is we've touched upon this briefly chris snowden's argument. He looks at lifetime health care costs and shows that it's really the people who live healthy lives who, over a lifetime basis, have the highest healthcare costs, simply because they are more likely to reach the age when you develop the complex chronic conditions that are very labor intensive to yeah well, it's not even treat, because you can't treat them in a sense and make them go away. You have to. It's more like an ongoing management thing.

Kristian Niemitz: 1:24:16

yeah, yes, and so there is that it's not really true that you impose costs on other people. But even if it were true, I would just say well, if we want a universal system, then that's something that we just have to live with. And that's an issue where I'm not a purist libertarian. If you're a purist libertarian, you're going to say I shouldn't be forced to subsidize other people's health care costs and if other people make bad lifestyle choices, then they should pay the extra insurance premium that you would have in a. In a pure market system where, unlike in my system, the premiums in my system the premiums don't vary between different risk groups, in a pure market system they would. So a more purist libertarian would want a system of that kind where there is no collectivization of healthcare costs except the unexpected ones.

Kristian Niemitz: 1:25:14

So that's, of course, the purpose of all insurance to collectivize costs that you cannot anticipate. So if you walk out of this building, you get run over by a car. Let's hope that doesn't happen, but that will be a purely unexpected risk. That's the purpose of insurance and that nobody can anticipate. But if, say, after walking out out of here, you go to the next kfc and buy three packs of of cigarettes on the way there. Okay, that's if you do that all the time. That is a predictable cost, at least in the short term. It might shorten your lifetime healthcare costs, but for now it's going to increase costs. That that is predictable. I'd say if we want a universal system where people with who are people in bad health can get healthcare coverage as easily as anyone else, we just have to accept that that also means there's going to be an element of free riding. Then if you want to cover the people who have higher healthcare costs for reasons they can't control and can't influence genetic factors, hereditary factors If we want those people covered, we have to accept that.

Amul Pandya: 1:26:25

There's going to be an element of socialization. Yeah, so are you interested in? In ideas, man? Are you interested in how to get from the NHS to universal healthcare without the NHS, which is the name of your book here Towards a Patient-Centred Health System? Are you just so interested in? Look, here's a solution. I don't care how you get there. It's up to media or podcasters or politicians or people like me to figure out the answer.

Kristian Niemitz: 1:26:52

No, I have a paper on this from last year where this is about the transition. This is you're starting where you are and you want to be there. How does that path?

Amul Pandya: 1:27:05

look like the denationalisation of healthcare. How to replace the NHS? How to replace the NHS with a social health insurance model. So you do care about the politics, pr, art of the possible shifting of the Overton window side of things, as well as the kind of economic theory.

Kristian Niemitz: 1:27:23

Yes, I do now. I didn't very much when I wrote the book because back then this is 2016 when it came out. Back then there was basically nobody else who talked about alternative to the NHS. That was such a. That would have been like talking about, say, what the Adam Smith Institute did privatising the moon an idea that is deliberately wacky and mostly to troll the Guardian. I guess it was very easy and it was just so out there that to talk about the practicalities what would that look like on a step-by-step basis, um, would have been a kind of an overkill, was just not necessary at that stage. Over the past two or three years, that's changed. You can now quite regularly see uh people in at least the right-wing press telegraph spectator criticizing the nhs at a fairly fundamental level, not saying we need a better health secretary or we need a better nsco yes but they would say no, there are systems elsewhere that deliver better outcomes.

Kristian Niemitz: 1:28:26

The one that we have here is rubbish. So that's become a much more acceptable argument, and now it makes sense to therefore go more into the practicalities and talk about what the transition would look like if that's what you wanted, because you could easily end up with. I'm guessing a lot of people who read these articles probably think, okay, this sounds plausible to me. If we could wave a magic wand and replace our system with the kind of system that they're talking about there, whether that is the Dutch oneutch one or or um, well, quite often they wouldn't even be that specific, but they would, in broad terms, talk about a social health insurance system, a universal health insurance system.

Kristian Niemitz: 1:29:09

Um, I guess a lot of readers of these articles will probably think this sounds good to me. If we could somehow make it happen, I'm all for it. But how, um, and and it is a fair question, because health systems are just, uh, very difficult to to change on a on a fundamental basis. So quite often it's a once in a lifetime, uh, choice, once in the lifetime of a nation that, fairly early on, you settle for a particular healthcare model and it just stays there and you get path dependency. I'm looking at some examples of where that has actually happened, so it's not completely unprecedented.

Amul Pandya: 1:29:44

Do you therefore kind of sat here in Westminster, you see politicians walking past or in the pub or coming to events here, the pub, or coming to events here how do you feel when you're kind of watching them, looking at them like little zoo animals talking to each other about you know, such kind of minor issues or kind of window dressing or things that are there to score points or win arguments rather than talk about ideas or find truth or find better outcomes? Is it just part of the nature of discourse and you just deal with it? Come on, guys.

Amul Pandya: 1:30:25

Or actually are they really willing to learn and listen and go? Actually, this is really helpful. Let me try and talk to someone in Whitehall or wherever it is about this.

Kristian Niemitz: 1:30:33

I don't really talk to politicians very much. I'm a more puristist ivory tower kind of guy. I write about my ideas. If somebody invites me to talk about them, um, I happily go there and and make the argument, happy to take questions and discuss it. But you care, right? You?

Amul Pandya: 1:30:50

don't you want this to happen, you know you're not writing this just for the sake of sort of mental masturbation it's kind of.

Kristian Niemitz: 1:30:57

It is a outcome no, absolutely what this?

Amul Pandya: 1:30:59

is to say ideally you must therefore get a sense of frustration reading a copy of a the mainstream newspaper or the bbc or whatever it is. When you look at the health discussion and it is about you know the spending is not enough or the wrong person's in charge, or they're not. Their procurement kind of needs tweaking, or they need better IT or whatever. Yeah, it must rankle you a bit.

Kristian Niemitz: 1:31:27

It did for a while. You just get used to it over time that on a lot of issues that you're thinking is just far removed from the mainstream. And that's just the way it is. And I guess if you expected to see policy changes because you've written a paper on something, then you would get frustrated pretty quickly. That's just not how it works. So if you want to be in the world of ideas which is what a think tank is then you just have to have that perspective and have a certain ideas purism and saying I'm saying what's right.

Amul Pandya: 1:32:59

So you've spent some time in South America. You worked at the Central Bank. Was it Paraguay, peru?

Kristian Niemitz: 1:33:07

It was the Statistics Office of Paraguay and the Central Bank of Bolivia, of Bolivia, sorry.

Amul Pandya: 1:33:13

So I've never been to South America, so I'm going to do an overgeneralization and faux pas by asking you about Argentina, even though you've not done any professional work in there. I'll chat about politicians and the kind of lack of first principles thinking and ideas and a greater emphasis on point scoring, winning arguments, popularity, profile building.

Amul Pandya: 1:33:38

I listened to Javier Milei on a three-hour interview with Lex Friedman. It was published two or three months ago and, even if you don't like anything that he's saying or what he's believing in, he explained his first principles. Thinking of this is what I read, this is what I believe, this is what I've experienced, this is how I've come to where I am now, and this is why I'm doing what I'm doing. Is that a? Are you excited about that or is this? Do you try not to get excited about things like that.

Kristian Niemitz: 1:34:12

I try not to because, uh, I simply don't know enough about the argentinian political system and whether he has a chance to keep going in the way he does. But I've seen some of those videos too and he is, yes, an absolutely. He's a very unusual politician. He's much more his mentality, he's much more like a think tanker. Yeah, he thinks about stuff from first principles and um thinks things through and and he can explain them very well. He explains them like, like an economist, and that's just very unusual. I think um, even thatcher and reagan were not quite like that. Even they, um, had to maybe mix their economic liberalism with something else and maybe appeal to a sense of nationalism as well, and maybe frame their ideas in such a way that somebody who isn't interested in classical liberal economics could still sympathize with them, simply because otherwise you won't get elected. Isn't it Not enough of them? Javier Milei is very unusual in that regard. I've never seen a politician explain economics in such a great way.

Amul Pandya: 1:35:23

And it's early days. Obviously it's only a year or so, but he's effectively carrying out a free market wet dream in terms of just ending departments, slashing spending. And do you find you kind of wake up here thinking I wish we would at least be talking about this here.

Kristian Niemitz: 1:35:51

Yes, absolutely yes, and ideally I'd love to have a political landscape where somebody like Millais can thrive. But then again it wouldn't do to just slack off. Politicians in Asia, like everyone else, respond to incentives, and they just had.

Kristian Niemitz: 1:36:13

So what I didn't know until Millais became president is that, in their case, he didn't suddenly come out of nowhere. It's not just that he did the chainsaw wielding and therefore, by being flamboyant and charismatic, that he's just a one-man show. They had free market think tanks. They're not internationally well-known, but some of them have, in hindsight, become a bit more well known because of people asking where does this suddenly come from? What this melee phenomenon?

Kristian Niemitz: 1:36:42

And they had, um, I guess you could say very iea like think tanks, uh, in buenos aires, where they prepared the ground by making arguments, I guess initially maybe to a small and nerdy audience, but then getting media exposure and explaining these things. They've obviously not persuaded everybody, but they have enough opinion formers on their side and enough people who kind of get it and are prepared to to give this a chance, and without that, he would just be some fringe outsider. So, um, so it would. It's. It is an example of where, uh, the ground has been prepared. You have people who understand classical liberal ideas properly, explain them well, and then you also have a sense of economic crisis and a sense of we have to try something else yeah, and then you and then also someone with a grounding and charisma to kind of execute that, and I've you know.

Amul Pandya: 1:37:42

Looking at recent politicians here, I think what I've learned is the messenger is is as you need the message, but the messenger is also very important.

Amul Pandya: 1:37:51

So how would I mean let's not talk about education or the education system, because I'm guessing it maps quite closely to how you view the healthcare system. In many ways it's the same issue, without there's no choice, state controlled. If you could and I know free market economists hate being given magic power to do what they want, but if you could impart economic knowledge to school children, what would you like them? What fundamentals or basics would you like them to know, or do you think they?

Amul Pandya: 1:38:26

only really experience it by going into the real world and kind of exploring ideas themselves.

Kristian Niemitz: 1:38:32

No, I don't think you do. You can have different people who have the same experience but nonetheless interpreting it in completely different ways and coming to very different conclusions. You still need some theoretical framework. And that's what I mentioned in the introduction, that when I became more appreciative of markets, of market competition, it's not that my life experience suddenly changed. What changed was the way in which I interpreted things.

Kristian Niemitz: 1:39:04

That that I saw, say, competition between, uh, two or three breweries where I would previously have just thought, oh, a new beer, great, I'll try that. Uh, and and whereas, and then afterwards I suddenly started to think, ah wait, I, I get what's happening here. This brewery launched a new beer. It's very popular, so the other brewery now has to respond to it and either come up with a, with a new product of their own, or lower their prices or do something else to attract customers. And it's that the theory that makes you interpret the things that you see around you in. In ways, the experience itself doesn't add very much. I've had that experience observing market competition and wealth generating activities all the time. Long before, even in the confused commie phase, I just didn't have the toolkit to analyze that stuff properly and and realize what's happening and, um, I guess a publication like that should maybe be available in schools and you're.

Amul Pandya: 1:40:06

you're very good at observing um the public zeitgeist on twitter or x? Um in a amusing way, so you'll kind of I recommend everyone follow you, and you do have a big following. What is your approach to that medium? What are you? Are you doing it? Is it just fun? Are you just trolling? I'm not calling you a troll, but are you just enjoying yourself on there? Or is it a way to get a message across through mockery or kind or kind of kind of display of inanity?

Kristian Niemitz: 1:40:41

uh, it's a lot of both. So, um, I mean, I I wouldn't mind being described as a troll. Um, there's some. Trolling can be a way of communicating and engaging in a in a humorous way, and and and trolling doesn't have to be vicious and personal. So I don't do that kind of trolling, but I do make fun of bad ideas and showing the absurdity, and if somebody wants to describe that as trolling, then fair enough. It is a very entertaining medium.

Amul Pandya: 1:41:16

What do you find?

Kristian Niemitz: 1:41:17

entertaining about it. Well, well, it's a bit of a freak show that you see, uh, the daftest opinions uh expressed with such supreme confidence. Yeah, um, and that's that's also what sometimes gets me. That's, uh, that's that's sometimes, uh, maybe the most annoying aspect of twitter that you have people who, uh, clearly have no idea what they're talking about but who are nonetheless super, super confident. That's maybe the worst aspect, that hyper confidence, and maybe that's where a bit of gentle trolling can be a bit of an antidote. But yes, I don't usually use it to talk about random stuff, although that might also happen when I'm on the district line and it's not moving. I might tweet about my frustration with that, but 90% of it would be, in the broadest sense, about political ideas.

Amul Pandya: 1:42:08

Looking at something that some socialist has said about Jeremy Corbyn or whatever it is.

Kristian Niemitz: 1:42:13

That can be a conversation opener and ideally it should work at at more than one level um yeah, twitter, so you can see the immediate uh, funny side of it. But then, if you're interested in it, there is also a wider set of ideas involved and, for those who are interested, in it.

Amul Pandya: 1:42:44

They can then go on um. Separate to economics, you're you're a researcher, you're Separate to economics. You're a researcher, you're looking at vast tracks of work by people like you know you yet, or are you trying to kind of in either kind of processing data, accessing information, kind of chucking in testing ideas? To give you an example, I kind of I put in to chat GPT, what should I ask K ristian Niemitz? And it came out with some not bad, not bad questions, none of which I've used, just in case anyone thinks I'm being lazy.

Amul Pandya: 1:43:20

But I kind of then asked it well, what would you know? Does he really believe this, or what's the source of that, where does this come from? Or what would he say if I said this. And it was quite a useful kind of idea testing mechanism. But also, you know, could it be useful for, like you've got this treasure trove of IEA work finding quick answers to questions. Have you found?

Kristian Niemitz: 1:43:44

it useful yet? Or are you not touching it? I haven't yet, but that's mostly my own fault, my own laziness, for not trying to figure out how it works. So I've so far only used AI for creating funny images quite often Well, at least funny to me, probably not to anyone else. But that doesn't mean I'll stop using them so as to illustrate blog posts. You have some economic idea that's embedded in it and you try to compress that into an image for for that. But that's more entertainment than actual research is kind of peripheral to it.

Kristian Niemitz: 1:44:17

Um, and I know a lot of people use it for, for routine writing, to get get rid of the, well, the annoying bits where you're just saying something that's, uh, it's, it's not about creativity or self-expression, but it's just some some routine chore. But where that doesn't, I mean I, I write every day, so, uh, that's, that's something where it wouldn't really make much of a difference. It's not that I have to that I'm ever sitting there looking at a blank screen and thinking, oh no, how should I say that? Um, that would be if. If you write all the time, that comes quite naturally. So on that side I haven't seen much of an advantage. But I'm sure for summarising things when you don't have the time to read a full publication. It must be massively useful, and it's mostly my own laziness for not having figured it out yet.

Amul Pandya: 1:45:13

So if you're writing all the time, you must be reading all the time. How do you choose what to read? Is it something that catches your interest? How much of it is sort of recent stuff versus kind of big heavy, you know?

Kristian Niemitz: 1:45:27

we are.

Amul Pandya: 1:45:27

Let's read wealth of nations again for the eighth time whatever it is, how do?

Kristian Niemitz: 1:45:30

you pick what to what to kind of put into your brain, to therefore spit out interesting stuff um, so I'm I'm not following current affairs very much, so if you ask me what's been on the news today, I have no idea. It's much more indirect that I find out about the stuff, and their twitter is extremely useful. That um, other people are much more plugged in into the political process and what's the latest policy proposal? And I find that out through, uh, through twitter. And then when I'm interested in something then, uh, before I do my own writing on it, then I would want to know, um, say, somebody comes up with a policy proposal I'd look at has this ever been tried before? Is there a pre-history? And then you might go back all the way to Adam Smith again yeah.

Amul Pandya: 1:46:19

So, as you know, I like to wrap these conversations up with something I call the long bet. So you, you've got a 10-year time horizon to make a prediction of something that you think will happen or would like to happen, and it's nothing serious, it can be anything. You want a bit of fun, and if we sit down in five years time again, we can kind of see how that prediction is going and um halfway through. So if you've got anything that you'd like to to predict, um, then yeah, now's your chance so is this about what I would want to happen or what I think will happen?

Amul Pandya: 1:46:55

Both you can do either both or I know economists have a kind of forecasting tendency. So why not get it out in a harmless setting where the impact is not going to be put into practice necessarily? So it's a way of kind of going to a football stadium and shouting at people and getting out that you know that, that kind of animal instinct.

Kristian Niemitz: 1:47:17

What I want to happen and what I think will happen are two very different things. I'm a massive pessimist when it comes to political developments. I think the world will, over, in overall terms, become a better place. Uh because uh well, going back to adam smith, there's a lot of ruin in the nation and nowadays there's a lot of ruin in the world. A lot of global trends on on prosperity and social outcomes indicators are improving, but mostly despite politics rather than because of it, and I think that will continue. And it's just difficult once you have a capitalist economy going, it's difficult to completely mess it up, even even if you have terrible politics and in most places politics is terrible. So I'm not hoping, holding out for a hundred malaise taking over everywhere and reforming things in a direction that I'd like to see.

Amul Pandya: 1:48:12

So is that? The beauty of the free market is that you don't need good leaders, whereas in an autocracy you kind of beholden to how good the you know yes, the leaders. The public needs to be paranoid and aware of a slide back to authoritarianism or kind of state-controlled planning. But as long as that paranoia is ever present, it'll stop you sliding there and in the meantime you can get incompetence, successive incompetence, and you'll still kind of carry on progressing.

Kristian Niemitz: 1:48:43

Up to a point. Yes, so you can definitely mess up economic life. You can definitely have politicians making terrible choices and messing things up. So a capitalist economy is fairly resilient. It can withstand quite a lot of bad policies, quite a lot of stupidity imposed on it, and it can still function, and that's one of the great things about it. You don't need, as you said, leaders in charge who perfectly understand the system and who get everything right, even some fairly badly governed places. I mean, italy has long been a byword for, for political corruption and, and Italians of most political persuasions hate their political class if if you talk to them are quite pessimistic and of course they have problems, but it is still it's. It's clearly not a hellhole and at least the north of the country is still very prosperous. So that shows there is some resilience in a market economy. It can withstand quite a lot of bad things happening. It can, however, also reach a stage where that's no longer true, what I've talked about in britain, where we have this nimby, nimbyocracy, nimbyism driving the political process. When that happens, then it can reach a stage where the market economy can just no longer function.

Kristian Niemitz: 1:50:06

I say here we have that issue. That's the reason why the economy just isn't progressing. We just have a political system that shuts down progress, and there there's just no way around that. That shuts down progress, and there there's just no way around that. What I would like to see going back to where you have two or three or four political ideological camps that are roughly of equal strength in. I'm not talking about political parties here, I'm not talking about a composition of the House of Commons or anything, but just you know, we had this issue during the last decade. We've had a conservative government the whole time, or conservative-led governments. It just didn't feel that way. It didn't feel like you live in a conservative, in a country that's governed in a conservative way or that's moving in a more conservative direction. You had a system where so is that Gramsci's?

Kristian Niemitz: 1:51:09

biggest success, I guess. Yes, you had a general left-dominated zeitgeist, the opinion formers, the intellectuals being mostly left-wing, all the political energy being on the left. You had, say, for a while, corbynism pretty much absorbed the entire political energy. All the enthusiasm was there.

Kristian Niemitz: 1:51:31

And then you had Theresa May okay, notionally in government but just absolutely zero enthusiasm about it, and then you just get um a right, a political right that is notionally in government, but uh, kind of suffering from imposter syndrome, thinking the whole country hates us. We shouldn't be here, we're on the wrong side of history, we're the baddies and uh, therefore they're just waving through net zero, um governing in a in a self-hating way. You can have that distinction. That's what britain was like in the last decade, um, and so far this one too. And I'd like to see just a competition of, um, of of ideologies, where you have several camps that are uh, where none completely dominates, where there is just a bit of an equilibrium. Um, it would of course, be even better if classical liberals won the upper hand, but that's, that's utopian. I'm not foreseeing that would happen, but if we just had a, a setup where different political, cultural forces more or less neutralize each other because none is strong enough to completely dominate the others, that could be a setting in which classical liberals have a role to play, because there we would be able to say well, on this issue, that side is right. On a different issue, that side is right. We're not really part of either camp, but we're sort of there in every debate and always somewhat represented. That would be a pretty good outcome. But what, uh? But it's not a forecast. It's not what I think will happen.

Kristian Niemitz: 1:53:05

I could quite easily imagine that we will see a repetition, something like the corbin project happening again, because we have seen that well would happen in 2015 was simply that enthusiasm that suddenly sprang up around him, this youth movement, seemingly completely coming out of nowhere. Suddenly he was all the rage and then you had people in Glastonbury chanting his name and this personality called him. This can absolutely happen again. So I would not too many people on my side of the or our side of the argument make the mistake of treating that as a freak event, as something that happened once in a lifetime, and now that he is gone or well, a backbencher that that has, that can never happen again. Now it took. I'd say the lesson that we should learn from this is look at how little it took, and Corbyn is really not a charismatic figure and certainly not a great thinker or anything. He was just a vehicle, an outlet for a latent demand that was already there, and if it took so little last time, it doesn't have to take a lot next time.

Kristian Niemitz: 1:54:17

So something like that can very easily happen again, so someone with a bit of charisma could be even more dangerous.

Amul Pandya: 1:54:22

I'm hoping, actually, with your prediction or what you'd like, with the improvements in technology or communication technology, it, that we're now a level playing field in terms of the media. So before there was a heavily gatekeepered, you know, um, institution legacy media that control the kind of pipe of ideas and discussions, and now with podcasts and and social media, you're going to see more camps, hopefully with different audiences, that kind of collide every now and then. So that could be something that does happen. Um, on your point about corbin, is it not just the case that the young affluent are just a bit lefty, like you were and you know, when they get kids and own a business or start paying tax, that'll kind of uh that's the whole problem.

Kristian Niemitz: 1:55:15

I've written about this here. That's left turn ahead. I'm going through a number of surveys because for every individual survey you could say well, maybe that's because of the way the question is faced, but what we see now, that young people are so overwhelmingly left-wing, it's not simply a repetition or a continuation of something that's always happened. It really is true that over the course of the last decade, the millennial generation has moved massively to the left in ways I wouldn't say it's unprecedented. But it's not been the case, say, with generation x and the 80s, is it?

Amul Pandya: 1:56:00

reactionary is that our prior generation was really kind of thatcherite. You know the 80s, you know the day of media and kind of the city and this, that and the other, and we're kind of a bit we're just reacting, rebelling against our parents a bit, who kind of did quite well out of Reaganism or Thatcherism.

Kristian Niemitz: 1:56:18

Well, but is it?

Amul Pandya: 1:56:20

I've got no data.

Kristian Niemitz: 1:56:21

It was more balanced in the 80s. It's not that the young were predominantly Thatcherite, it's just that being a young Thatcherite would not have been a super exotic outsider position. So even then with the exception of, I think, the 1983 election, it was always slightly the young were slightly more left wing. 1983 election it was always slightly. The young one was slightly more left-wing. Um, even then, it's just that in the 80s you could have said at university um, yes, I'm, I'm a thatcherite, and you would not have been the only one, probably. Whereas now, uh, the telegraph did a mini documentary about young conservative students and it was all about how they were basically the only ones and that everyone around them thinks that they're super weird. So that that really is a change. But the biggest change, I'd say, is that nowadays it's not the very young that we're talking about here, it's people in their, in their 30s, um, I guess now 40s as well, um, so you can no longer apply this logic of oh well, it's just teenagers, it's just like the young nimitz.

Kristian Niemitz: 1:57:20

Well, I was 17 at the time, so that's more uh. There it's more plausible to say that's, that's a face um, and he'll grow out of it, and I did. But if somebody is in their late 30s and there's massive corbinistas, they're not going to grow out of it if it hasn't happened by by that stage it's not going to happen.

Amul Pandya: 1:57:38

Is that partly because socialism is a history lesson now, rather than a living memory or a living competitive ideology that crumbled in the eyes of people in front of them, literally, in moral form, yes, whereas now it's a kind of it's just another thing that people don't know about in their own history, and so this idea is need to be retested. Re not socialism, but that kind of free market idea needs to be restated to save us having to go through that experiment again I think that is part of it.

Kristian Niemitz: 1:58:10

You definitely see, um, I mean, it's not that there's a break in the data, that there's one birth cohort that thinks completely different from the cohort just above. But you see, something of a turning point around the time where people still have memories of well, either the Cold War itself, maybe fall of the Berlin Wall, or at least the period immediately after. With this end of history, feeling the, the feeling that we've we've tested this to destruction and you just had a collapse of socialist systems around the world, and it was just in the 90s there was a sense of okay, we can disagree about lots of things, but a successful economy has to be mainly a market-based economy, and that's just something that left and right could agree on, even if, if, if there'd be differences in how they interpret that and what they want to do within a capitalist system, and that's something that is just no longer present today. Yeah, and I would add to that that even at the time, there were, of course and I remember this when I was at school, that's probably what I would have said as well there were people who said, well, they've just not done socialism properly, and that's the whole problem, but there is still a difference when, say, if you can still see the failed experiments with your own eyes in front of you, it's just a bit less believable If somebody says, but trust me, that doesn't mean anything, I will do it differently.

Kristian Niemitz: 1:59:41

That's a lot more plausible when they are distancing themselves from something that is already distant, if that makes sense, if you no longer have a visual reminder. This is how planned economies play out. And I think I guess, guess to my younger zoomer colleagues, for example, the idea that poland or uh, or lithuania, uh, are poor countries. To them that would sound weird. They would just think of them as holiday destinations, in the same way as they think about the mediterranean, whereas uh for for generation x, uh for my generation, yes, we would absolutely still have thought of Eastern Europe as poor.

Amul Pandya: 2:00:19

And so in communism we'd have that communist legacy would be hanging over them. Okay, so it sounds like the first place people should start if they were going to read your work in the threat of that is this one Socialism.

Kristian Niemitz: 2:00:34

That's what they're interested in, but you can't go wrong with that. Why don't?

Amul Pandya: 2:00:37

I focus on that one because we're finishing on that.

Kristian Niemitz: 2:00:41

So, Kristian Niemitz, Socialism, the Failed Idea that Never Dies.

Amul Pandya: 2:00:43

It looks very, very meaty and interesting. Where can people find you on X K? What's your handle?

Kristian Niemitz: 2:00:52

It's K underscore Nemitz. K underscore Niemitz N-I-E-M-I-E-T-Z.

Amul Pandya: 2:00:56

Great, and please check out the Institute of Economic Affairs as well, which is where you've worked for a while, and where that's all available for download. Brilliant. Thank you, Christian See you soon. Absolutely. This has been Meeting People. I've been your host, Amul Pandya. This is a podcast produced by Matt Cooper.