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Interesting aside - the Matt Ridley who wrote was chairman of the Northern Rock bank in the UK when it became the first British bank to suffer a run for 150 yea

by ranko 10y ago

Interesting aside - the Matt Ridley who wrote was chairman of the Northern Rock bank in the UK when it became the first British bank to suffer a run for 150 years. Perhaps when it was nationalised in 2008 he said something like "it takes a government to rescue a failed bank".

justin66 10y ago
Pretty sure you've got him mixed up with someone else, I went to a review of his book and saw this: "Matt Ridley is a zoologist by training and a disciple of Richard Dawkins."
- CalChris 10y ago
  Not mixed up with someone else. https://en.wikipedia.org/wiki/Matt_Ridley https://en.wikipedia.org/wiki/Matt_Ridley He was made a board member because his father had been a board member. And then he was promoted to chairman of the board. His academic training was in zoology but he wrote for the Economist.
  - pjc50 10y ago
    > He was made a board member because his father had been a board member How amazing that the free market in employees would produce such a coincidental result! That the most economically efficient person would be a relative of another board member!
    - RobertoG 10y ago
      Yeah, similarly amazing, in my opinion, is that we are informed that: " [..] authoritarian, top-down rule is not the source of order or progress, but a hindrance. [..]" by the 5th Viscount Ridley.
    - nickik 10y ago
      That the bank failed seems to be a indication that it was not economically efficient and the market correctly removed it. That seems to be the exact thing that we want. For some (easy to understand) reason government have taking into their heads to 'save' these institutions, but you can hardly blame that on the market as a organisational principle.
      - CalChris 10y ago
        The government did not try to 'save' this bank. The government tried to stop its contagion from spreading. Hoover had allowed that sort of contagion to spread in 1930 to ill effect. Also, you are ignoring the Major Major Major Major who ran this bank and now lectures us about economics. If Hayek is the marginal figure he is, it is partly because of the Ridleys championing him.
        nickik 10y ago
        This 'Hoover let it continue'-story is partly correct but it ignores the larger and far more important story. The bank failed because there was a liquidity crunch caused by a badly implemented gold standard and a even more badly manged Fed that failed to do its job. Its not the banks fault that there is a massive liquidity crunch. Its also not the banks fault that they have been legally restricted from note issue. In Canada (with no central bank) no banks failed in the same period, but the economy of Canada was hit almost as hard. By the way the hole argument that you are making goes back to a British guy 100 years ago (Walter Badget, often called "Lender of last resort"). You would be to discover that this guy was actually against the idea of saving bad banks, and even more he was against central banks in general. His argument was that if banks can not expand liquidity themselfs as they did before central banks, then the central bank must do it, BUT ONLY TO GOOD BANKS AGAINST HIGHLY SECURE ASSETS AT HIGH RATES. Sadly his arguments have been turned around into something different by people who don't want to read his point for political reasons or simply don't understand them. Now its, 'if you let any bank fail, a domino-effect will destroy everything', this is simply false, most of the time, most banks are good. The problem is liquidity, and the central bank is in control of that, that its job. The domino effect only happens if the central banks fails, as the Fed did in 1930 and 2008. I'm not in detail informed about this particular case in England. I made a general point about markets and governments.
- ranko 10y ago
  I used to think they were two different people, as chairing a bank and being a science writer are not normally found on the same CV. However, it seems that he's just one person (https://en.wikipedia.org/wiki/Matt_Ridley https://en.wikipedia.org/wiki/Matt_Ridley).
  - justin66 10y ago
    Really interesting. Thanks.
- irickt 10y ago
  Perhaps adding to the confusion, an unrelated science writer with a similar name, writing on some similar topics: https://en.wikipedia.org/wiki/Mark_Ridley_(zoologist) https://en.wikipedia.org/wiki/Mark_Ridley_(zoologist)
nickik 10y ago
I am pretty sure that he would not sign the statement that states 'have to' save failed banks. You seem to indicate that he only said 'it takes' and that means something different. If he would disagree and argue that government should save failed banks, then he would not be a Hayekian at all. I have heard some interviews with him, and that's my interpretation.

by ranko 10y ago

justin66 10y ago

Pretty sure you've got him mixed up with someone else, I went to a review of his book and saw this: "Matt Ridley is a zoologist by training and a disciple of Richard Dawkins."

CalChris 10y ago
Not mixed up with someone else. https://en.wikipedia.org/wiki/Matt_Ridley https://en.wikipedia.org/wiki/Matt_Ridley He was made a board member because his father had been a board member. And then he was promoted to chairman of the board. His academic training was in zoology but he wrote for the Economist.
- pjc50 10y ago
  > He was made a board member because his father had been a board member How amazing that the free market in employees would produce such a coincidental result! That the most economically efficient person would be a relative of another board member!
  - RobertoG 10y ago
    Yeah, similarly amazing, in my opinion, is that we are informed that: " [..] authoritarian, top-down rule is not the source of order or progress, but a hindrance. [..]" by the 5th Viscount Ridley.
  - nickik 10y ago
    That the bank failed seems to be a indication that it was not economically efficient and the market correctly removed it. That seems to be the exact thing that we want. For some (easy to understand) reason government have taking into their heads to 'save' these institutions, but you can hardly blame that on the market as a organisational principle.
    - CalChris 10y ago
      The government did not try to 'save' this bank. The government tried to stop its contagion from spreading. Hoover had allowed that sort of contagion to spread in 1930 to ill effect. Also, you are ignoring the Major Major Major Major who ran this bank and now lectures us about economics. If Hayek is the marginal figure he is, it is partly because of the Ridleys championing him.
      - nickik 10y ago
        This 'Hoover let it continue'-story is partly correct but it ignores the larger and far more important story. The bank failed because there was a liquidity crunch caused by a badly implemented gold standard and a even more badly manged Fed that failed to do its job. Its not the banks fault that there is a massive liquidity crunch. Its also not the banks fault that they have been legally restricted from note issue. In Canada (with no central bank) no banks failed in the same period, but the economy of Canada was hit almost as hard. By the way the hole argument that you are making goes back to a British guy 100 years ago (Walter Badget, often called "Lender of last resort"). You would be to discover that this guy was actually against the idea of saving bad banks, and even more he was against central banks in general. His argument was that if banks can not expand liquidity themselfs as they did before central banks, then the central bank must do it, BUT ONLY TO GOOD BANKS AGAINST HIGHLY SECURE ASSETS AT HIGH RATES. Sadly his arguments have been turned around into something different by people who don't want to read his point for political reasons or simply don't understand them. Now its, 'if you let any bank fail, a domino-effect will destroy everything', this is simply false, most of the time, most banks are good. The problem is liquidity, and the central bank is in control of that, that its job. The domino effect only happens if the central banks fails, as the Fed did in 1930 and 2008. I'm not in detail informed about this particular case in England. I made a general point about markets and governments.
ranko 10y ago
I used to think they were two different people, as chairing a bank and being a science writer are not normally found on the same CV. However, it seems that he's just one person (https://en.wikipedia.org/wiki/Matt_Ridley https://en.wikipedia.org/wiki/Matt_Ridley).
- justin66 10y ago
  Really interesting. Thanks.
irickt 10y ago
Perhaps adding to the confusion, an unrelated science writer with a similar name, writing on some similar topics: https://en.wikipedia.org/wiki/Mark_Ridley_(zoologist) https://en.wikipedia.org/wiki/Mark_Ridley_(zoologist)

nickik 10y ago

I am pretty sure that he would not sign the statement that states 'have to' save failed banks. You seem to indicate that he only said 'it takes' and that means something different. If he would disagree and argue that government should save failed banks, then he would not be a Hayekian at all. I have heard some interviews with him, and that's my interpretation.