The Melangerie

A long time in politics

2012-01-28T17:14:00.001Z

Early this week, the bishops were telling the government not to cap child benefit (src).

"Right on," said the left, "It's great to have bishops who stand up for what they believe in and are willing to speak up against public opinion."

"Shut up," said the right, "It's not your place and the public are against you."

"Can't you lot quit meddling in policy and talk about Jesus?" I wondered.

Today, the Archbishop of York tells the government not to legalise gay marriage (src).

"Right on," say the right, "It's great to have bishops who stand up for what they believe in and are willing to speak up against public opinion."

"Shut up," say the left, "It's not your place and the public are against you."

"Can't you lot quit meddling in policy and talk about Jesus?" I wonder.

What is a question?

2012-01-25T22:14:00.000Z

The BBC reports that Alex ~~Turbot~~ Salmond knows what question he would like to ask:

The SNP leader said Scots would be asked: "Do you agree that Scotland should be an independent country?" in a ballot which he wants to hold in 2014. (src)

This is, of course, an immediate contender for a Rentoul: a Question to which the Answer is No. Indeed, like Lady Thatcher to another question, I would be inclined to reply, No, No, No.

(No man is an island, entire of itself -- or so we are told. But ask the SNP, and apparently this island is able to break a piece of itself off without damage to the whole. As an Englishman brought up in Wales, I have a firm appreciation of the benefits of the Union, and would mourn its passing.)

But apart from that, this question seems to me a prime candidate for a Formal Raspberry from the Electoral Commission, which Mr ~~Mackerel~~ Salmond says could oversee the referendum. For it contains an unnecessary frame around the question, which could far more simply and less suggestively be posed thus:

Should Scotland be an independent country?

I would be surprised, and not a little disgusted, if the Commission let this first, highly leading, proposal pass.

Is there too much money in the economy?

2012-01-16T22:07:00.000Z

This could, of course, be one of John Rentoul's famous Questions to which the Answer is No (link). Indeed, one of the redeeming features which partially prevents this is that I am not, and have neither a desire nor an intention to be, a writer for the Daily Mail.

However, this striking idea is suggested by the fact that the Treasury recently auctioned £700mn of fixed-rate bonds at a real interest rate of -0.116% (src). Of course this should be heavily caveated: not least, there is an assumption that inflation doesn't come down from its current level over the lifetime of the 35-year bond. If it does stay significantly lower for a prolonged period, then the interest rate will turn out to be positive in real terms, and it is quite possible that people in the bond markets are expecting inflation to come down eventually. [EDIT: I should have known better than to trust financial journalists. This was an index-linked bond.]

However, it does suggest that the Government's current economic strategy needs some fine-tuning. This bond issue of £700mn is several hundred times smaller than the Bank of England's total quantitative easing, which stands currently at £275bn. But it is beginning to look even more as though the Government is borrowing money on the markets and then putting the money back into the hands of its lenders, only to borrow it once more. It would be silly to do this and have to pay interest for the privilege: but it must be madness for the Government to get paid.

Yet this is the effect of policy: money gets put into the bond markets, but it doesn't even leave those markets. Instead, traders are now just queuing up to put the money back with the Government. So we return to the original question: is there too much money in the economy? Perhaps not; but may there be too much in the bond markets?

If this is true, then it suggests that the central bankers need to look at the structure of policy, rather than putting blind faith in the aggregates. Already there have been murmurings about a small-scale 'consumer stimulus' which might be achieved from redeeming the War Loan: this is mostly held by retail investors, who would be more likely to take some of the windfall and spend it. The money would not sit in the bond markets but would go out and do something different. [1]

Quantitative easing was the weapon of choice when interest rates had hit the zero bound. To push rates any lower would have been, in the central bankers' phrase, 'pushing on a string'. But could it be beginning to look as though QE, too, has hit its buffers and the central bankers are once again pushing on a piece of string?

[1] I'm not altogether convinced by this story, though I can see where it's coming from. However, I am convinced that the structure of policy is at least as important as the aggregates. One of the things which has frustrated me about QE is that central bankers seem to assume monetary velocity is effectively infinite, when we know full well it is not.

Predictable competition time!

2012-01-09T22:11:00.000Z

Easy rules: below the line, guess the newspaper and guess the, um, 'think tank' which generated this headline. (Anyone who listened to Start the Week is disqualified.) You have to post both correctly to win this [year's] quiz and carry the kudos of current quiz winner. I expect the first post to contain the correct answer.

Cut the working week to a maximum of 20 hours, urge top economists
Job sharing and increased leisure are the answer to rising unemployment, claims thinktank

For extra credit, explain which famous economic fallacy these 'top economists' (ho, ho, ho) have committed, and why they are obviously deranged.

Mr. Murdoch, tear down this paywall!

2012-01-03T11:14:00.000Z

Well, not quite. Though it may be a good idea: let me explain a few interesting little absences recently which I have noticed. I think they are rather telling of a couple of things.

Firstly, the Today programme ran an item a little while back about nominative determinism. Time was, the Times' Danny Finkelstein would have been all over a piece like that, as he is an avid collector of examples of the form. No-one even mentioned him.

Secondly — and perhaps there's an element of confirmation bias to this — I get the sense that the Telegraph is slowly becoming the paper which gets the 'jointly signed' letters. There's one in today's about care for the elderly, for example. In days gone by, it would have been the Times.

Thirdly, one sees and hears somewhat less in general of the Times' journalists and commentators, as well as its (distinctive) content. We don't know who's on staff any more; we don't know what they're saying. For example, apparently Alex Salmond was its Briton of the Year. This will doubly appalling for Salmond: firstly he doesn't want to be British, and secondly, since it was in the Times, he has gained precious little publicity out of it. (Alex Salmond's top ten political principles are publicity for Alex Salmond, nine times, and then Scottish independence — as a means to more publicity for Alex Salmond.)

I am getting the impression that putting the Times' whole content behind such a high paywall has done little good for the paper's involvement in and influence on national debate. Now, this is not particularly good for Britain: I think the Times' fairly mainstream, liberal centre-ground position is quite helpful. But it's also not so good, in the long run, for the Times. If it remains absent from the Internet, it is becoming clear that it will eventually be absent from everywhere, including the newsagents'.

One might cavil that the FT is holding its own, but of course, the FT has next to no competition in its corner of the marketplace. A better solution for the Times might be to lower the paywall: have some features which are permanently open, like Comment Central, one of the cartoons, the letters page; and also have a handful of articles each day which are free to access. Opening up articles after a period of time (say, a year) would also help the Times advertise its wares while providing subscribers with a distinct benefit.

That the Times is remaining resolutely closed off to non-payers suggests that Rupert Murdoch is not particularly bothered about using the Times to influence UK politics. (This may be a different story for the Sun.) Presumably, he sees the Times more as a money machine: but perhaps someone should warn him that geese which lay golden eggs need to be free-range for best results.

Needing fewer apologists, and more apologies

2011-12-19T22:27:00.000Z

"Say what you like about that Mr. Hitler, at least he made the trains run on time" is the stereotypical viewpoint ascribed to a closet Nazi. Certainly, there are people who try to argue that the Nazis were good for Germany's economy, although for nothing else. I deny even this: but then, I don't think GDP per capita is the be-all-and-end-all of the economy.

So imagine my surprise when I read over at the Guardian that Vaclav Havel was a wicked man for opposing communism (src, via). Clark claims that,

the regimes in Eastern Europe [had positive achievements] in the fields of employment, welfare provision, education and women’s rights.

For sure, everyone was employed: anyone unemployed was put to work burying the chap who arrived in the gulag just before him. And there was wonderful equality. It's easy to be equal when everyone is equally destitute. Women's rights were as far advanced as men's: nowhere to be seen. And as for education, don't let's get started: you were very well educated, if you didn't mind only knowing what the Party deemed necessary for you to know.

Imagine my further surprise when I discovered that the same writer had written in the New Statesman in January, praising the last dictator in Europe, Aleksandr Lukashenko, for little more than making the trains run on time (src). So here, again, is the Excors Utilissimus:

After last month's presidential elections - in which Alexander Lukashenko was re-elected to serve a fourth term with almost 80 per cent of the vote - the arrest of opposition candidates and hundreds of their supporters led to the reappearance of the old "last dictatorship in Europe" headlines. But shocking as the scenes of police beating protesters were, it would be a mistake to equate Belarus with Burma, or Lukashenko with Joseph Stalin.

"Hey, guys, I know it's Europe's last dictatorship, but the fact that he wins unbelievably high percentages of the vote, that he arrests political opponents, and that he gets the cops to beat up protesters is just a misunderstanding! I mean, keep a sense of perspective: it's not like this is Burma or anything, right? And he's not as prodigiously evil as Stalin, so just let him alone, won't you?"

You could re-write my opening quotation for your average Communist dictator, and this would be a decent enough summary of Clark's perspective on the world: Fraudulent elections? Who cares! Suppression of individual freedom? So what! Rejection of any sense of the private? A small price to pay! The gulags, the systematic murder of millions, collectivised slavery, liquidations of political opponents, social conformity to the Party's will? Bugs, not features!

It is an interesting thing to see that while an apologist for the Nazis would be excoriated, probably even in the Mail (okay, probably); even so, this apologist for Actually-Existing-Now brutal tyranny is invited to write for the Guardian. You can't praise the Nazis (a sound editorial policy), but praising Uncle Joe and his trigger-happy chums is just fine (not so sound editorial policy).

So, given Stalin systematically murdered millions; given Mao, Pol Pot and countless others were equally bad; given Kim Jong-Il starved his own country in his vicious and twisted ideological opposition to an economic private life; given the gulags, the collectivisations, the clamping down on any organisation independent of Party or State; given all that and more besides, why on earth do apologists for communism get a free ride from our media?

On the side of the ones and twos

2011-12-08T15:38:00.001Z

Yesterday upon the stair
I met a man who wasn’t there
He wasn’t there again today
Oh, how I wish he’d go away
(William Hughes Mearns, Antigonish; wiki)

Matt Ridley at The Rational Optimist makes an important point in his latest blogpost:

Lobbied by big companies, politicians do bonkers things like rewarding innovations that increase the cost of fulfilling a need — such as putting up the price of electricity to subsidise wind farms and claiming it “creates jobs”. Any hairdresser, unable to make a new hire because of his electricity bill, could tell them that it does the opposite. (src)

The jobs which are created in the windfarm and solar power industries are obvious. They are made in ~~marginal constituencies~~ depressed areas in large numbers, and of course one has to be glad for people who find a job.

But the jobs which are not created in other workplaces because of increased electricity bills are not obvious. They aren't created in ones and twos, rather than in large numbers. They aren't created across the whole country, rather than being concentrated in ~~depressed areas~~ marginal constituencies. The people who don't get the jobs which aren't created never even realise they didn't get them. They don't go on marches complaining that they didn't get a job which wasn't created. There isn't a trade union for people without a trade; there isn't a confederation for British industries-which-could-have-existed-but-don't.

Sticking up for the market means sticking up for the idea that the ones and twos matter. That's the difference between pro-market and pro-business. Last month, Simon Goldie at Liberal Vision argued that the Liberal Democrats should push hard on sticking up for the little people, and rightly too (src). They don't get much smaller or more local than the job which didn't happen because the government pushed up taxes, or forced electricity prices to rise sharply, or monkeyed about with interest rates.

There is, or can be, a rhetorical force to the argument that good things are not happening because government is interfering. Who will stick up for the business which never opened, or the job which was never advertised?

JC on JC

2011-12-03T19:54:00.001Z

Jeremy Clarkson this week attempted a joke about balance on the BBC. In order to make it, he necessarily embodied two opposed views on the strikes, with a segue between the two about there needing to be balance on the BBC. Apparently, it is offensive to trade unionists to satirise the BBC's apparent addiction to getting two people with opposed view to shout each other down and calling the result 'balance'. Who knew?

Yes, I heard Mary Bousted point out that in some parts of the world trade unionists are shot even nowadays; obviously that is a great wickedness to be deplored. And I know Jeremy Clarkson tries to get attention with idiotic and sometimes over-the-top insults. But equally, we all know what 'taking someone outside and shooting them' means and it's hardly 'Come the Revolution, comrades', and the people who were offended at this particular comment were mostly the people for whom Jeremy Clarkson is a bit of a hate figure anyway.

So to help us think through this one, here's someone else who is probably a hate figure for that sort of person. I've been reading through John Calvin's Institutes of the Christian Religion on my commute, and read the following passage in only the last week or so. It seems topical.

If from unseasonable levity or wantonness, or rashness, you do any thing out of order or not in its own place, by which the weak or unskillful are offended, it may be said that offence has been given by you, since the ground of offence is owing to your fault. And in general, offence is said to be given in any matter where the person from whom it has proceeded is in fault.
Offence is said to be taken when a thing otherwise done, not wickedly or unseasonably, is made an occasion of offence from malevolence or some sinister feeling. For here offence was not given, but sinister interpreters ceaselessly take offence.
By the former kind, the weak only, by the latter, the ill-tempered and Pharisaical are offended. Wherefore, we shall call the one the offence of the weak, the other the offence of Pharisees. (Inst. III.19.xi)

The question, I suppose, is whether offence was given or only taken? Put it another way: do those who are making the running out of being offended here sound more like the weak, or more like the Pharisees?

The Now Show's futurology

2011-12-02T19:12:00.001Z

There was an extended segment on The Now Show about how the Chancellor's 'cut' to fuel duty wasn't really a cut; it was just cancelling a projected increase. This is very true: presentation is always key. So presumably we'll not hear anything else from The Now Show team about the government's public spending 'cuts', given that they are merely reductions (and not even full cancellations) in projected increases.

I'm not holding my breath…

Damned lies at the Telegraph

2011-12-02T09:27:00.001Z

I allude, of course, to the famous categorisation of lies, damned lies, and statistics. Here is a Telegraph subheadline:

NHS doctors are failing to inform up to half of families that their loved ones have been put on a scheme to help end their lives, the Royal College of Physicians has found. (src)

Now, you might think that this was a widespread problem. But in fact, the sub-editor is lying prodigiously.

Firstly, the Liverpool Care Pathway is not a 'scheme to help end life'; it is a palliative care programme designed to give dignity to those who are dying. The sub-editor has phrased this to sound like some kind of crypto-euthanasia, when in fact it is quite the reverse. But what is worse is the blatant twisting of figures. The body text, on which the sub-editor is meant to base their top matter, tells us,

In one hospital trust, doctors had conversations with fewer than half of families about the care of their loved one.

'In one hospital'! A single datapoint! Writing the subheadline on the basis of one datum is not simply poor statistics, it is in fact lying: it is outright damned lying. You could take a single uninformed family and make the claim that up to 100% of families are not informed; or a single informed family, to claim that up to 100% are informed. It is every bit as (il)legitimate.

The real story is that on average no more than six percent of families are not informed. (Since the count is 94% of families are documented as informed, the figure could be lower than six percent.) That is still, clearly, six percentage points too high (xkcd) but it is nowhere near the 'up to half' claim. Still, what does the truth matter when you have a subheadline to write, eh?

Gordon Brown sighted!

2011-11-30T20:26:00.001Z

Consider the evidence:

a pre-Budget report which sounds more like a pre-Budget Budget;
endless leaking of the details prior to the report in any case;
shunting money between capital and current pots in order to sneak past a self-imposed rule;
a five-year industrial plan for the country;
locating spending cuts and other hard choices after the next election; and
shamelessly political budgeteering.

Yes, Gordon Brown is back in the Treasury. I'm surprised the Chancellor didn't declare that he was going to be ~~profligate~~ prudent for a purpose.

The Groan: still in touch with reality

2011-11-28T10:34:00.001Z

Someone at the Guardian — Nick Watt? it appears under his name — needs a lesson in thinking.

Redwood said: "The deficit reduction plan was the wrong way round. It was rear-end loaded instead of front-end loaded. When you do these things you have to do the reductions, or the freeze, up front. They decided to have the easy year the first year. The longer you leave it the more difficult it is, because the more it is your problem rather than an inherited problem."
Redwood's view is echoed by David Ruffley, a Conservative member of the Commons Treasury select committee, who served as a special adviser when Clarke was chancellor. "The chancellor should seriously consider having a new spending review to bring forward cuts due for later in this parliament to this year. We need tax cuts to increase aggregate demand and to get the economy moving." (src)

John Redwood says the Government should have cut faster and harder. I'm inclined to agree, for similar reasons to his: a government can get a lot done in its first year or two; it will get a lot less done in its last year or two. But it's the last year or two in which this Government hopes to get most of its deficit-reduction done. This is poor strategic planning. It's also poor financial management, since every year the deficit runs, interest payments rise and it gets financially harder to close the gap.

Ruffley, on the other hand, has not. He has been calling for unfunded tax cuts. I heard him on the radio yesterday saying, in terms, that the Chancellor should let the deficit widen in order to cut taxes. He was quoted in the Guardian itself only last week with a variation on the same theme, declaring that the markets wouldn't 'go haywire' over a looser borrowing stance from the Treasury. He thinks that the Government should be borrowing more to pay for a decrease in taxes.

So we have Redwood saying decrease the deficit through cutting spending and Ruffley saying increase the deficit through cutting taxes. And we have someone at the Guardian who cannot tell the difference.

The denationalisation of the conscience

2011-11-02T14:19:00.000Z

Lynne Featherstone, the Equalities Minister has announced that religious groups will be permitted, if they wish, to host same-sex civil partnership ceremonies (src). The news will be welcomed by liberal groups (such as the Quakers and progressive Jewish synagogues), while it is being cautiously viewed by mainstream bodies such as the Anglican church. I have little doubt that more traditionalist and conservative religious groups will be mortified.

I, though I would oppose any attempt to have our church building used for such purposes, support the freedom for others on classically liberal grounds. More on that later. However, it raises an interesting question about the functioning of the Equalities Act, on which I was ruminating the other day. It has a partial reference, also, to the bed-and-breakfast question which was debated prior to the election last year, and explains something of how freedom of expression functions in a liberal society. It is the following.

Suppose I own and manage a firm of printers. I don't run it as an explicitly 'Christian' printers' shop, but generally print most business that comes to me. One day, inexplicably, the Jehovah's Witnesses come knocking on my door. Not so much to convert me as because they want some work doing: a tract printing off. It's pretty stiff stuff, attacking the doctrine of the Trinity and claiming that mainstream Christians a polytheists who believe in false gods.

I refuse to print the tract because it is so pointedly written against my own beliefs. Most stuff doesn't cross any kind of line with me, but in this case I really am not happy with my printing press being used for such a purpose. They claim that this breaches their right to freedom of expression, and is unfair discrimination on the basis of religion. Should they be allowed to bring a case under either aegis?

No. Free expression does not require any individual to sponsor, host or publicise your expression. And surely I must be quite free to refuse to allow my printing presses to go to work in pursuit of a position with which I profoundly disagree.

For suppose that the government forced me to accept the business on the basis that to inspect the materials before agreeing to publication is discrimination on the basis of religion. My printing press has become somewhat less mine since the passage of such legislation. I can no longer decide what materials are printed on it: the government decides. To that extent, the government has become the owner of what was my printing press. To force me to do business is to nationalise my printing press.

Fast-forward, then, to an Act of Parliament which forces all business owners to do business with all comers without discrimination, even on grounds such as religion. This amounts to nothing more than a nationalisation of one aspect of the entire economy: no longer can business owners draw a line on matters of principle even where they are relevant; the government has made those decisions for them. It is milk-and-water socialism, in one bill.

And what then? By partially nationalising private businesses, the government has also arrogated to itself the right to decide what are matters of conscience. In short, it has not only nationalised businesses: it has nationalised conscience. We no longer enjoy the freedom of conscience which once we did.

Hence my title, and my welcoming of Lynne Featherstone's announcement. For conscience ought not to be nationalised, neither for private business owners nor for religious organisations. (Ed. - nor for private individuals, but I had thought this would go without saying.) The present situation is that the government has decided on behalf of religious organisations that they will not allow same-sex partnership ceremonies in their buildings. The situation, surely, must be that it is up to those organisations to make the decision.

Therefore, to announce that religious organisations will no longer be restricted is, in some small way, a success for the campaign to denationalise conscience. And so long as Harriet Harman's bill doesn't get drafted in to make what is permitted into what is required, we can hold onto one small area where conscience is private and free, rather than public and bound.

No, Benny, that doesn't help

2011-10-25T13:41:00.001+01:00

The words of a Vatican spokesman:

The time has come to conceive of institutions with universal competence (src, via)

But how times have changed! It used to be the case that a Vatican spokesman would have coughed politely after uttering that sentence.

So anyway, now there are going to be thousands of North American dispensationalists rushing to their Scofields, muttering darkly about the Antichrist setting up a world government. Could the Vatican possibly play more truly to the most nutty expectations of premillennial dispensationalists?

On Occupy St. Paul's

2011-10-24T11:59:00.000+01:00

Let's be clear and call the protest what it is, not what it claims to be. It's causing problems for St. Paul's, and this morning's news was reporting that small businesses like restaurants in the area have also seen trade drop off massively. This is hardly damaging the business of the stock exchange (not that I wish damage on the LSE either, of course), but it's immensely damaging to St. Paul's.
The health-and-safety point is probably over-done; they normally are. But even without the H&S busybodies, the cathedral was hardly going to be able to function normally, was it? This is why protestors camp outside the headquarters of large corporations or power stations to which they object: it stops them from functioning normally.
The protestors are, at least, being consistent. They're protesting against property rights, and to illustrate their point, they deprive the Church of England of the ability to use its property. As a side-note, may I point out that they are flagging up why property rights are necessary for a civilised society. Imagine living in a world where any idiot could camp in your home or your business, without any way for you to get rid of them. Or imagine a world in which the government trumpets its commitment to free speech but then allows anyone to stop any printing press they like. Property rights matter, because without them individual freedoms are meaningless.
On the other hand, they are also being inconsistent: I should expect most of them dislike collateral damage, and yet they are willing to impose it in the pursuit of their cause. There is a difference between killing civilians in the pursuit of a (just) military objective and inconveniencing tourists and Anglicans, of course. But there is also enough similarity to give any thoughtful individual pause for thought.
Some protestors say that they will park their own opinions and stay until a vote is taken to move off. To subject your own conscience to majority vote is insane. To require everyone else to subject theirs to majority vote is democratic tyranny. That, I believe, is what lots of the protestors genuinely want: a society in which morality and individual exercise of liberty are subject to majority vote. It's the elevation of democracy to the status of high principle. They think this will make for Paradise; I think it would be hell on earth.
Finally, although I expect that this is becoming a case of trespass, I could well understand it if the cathedral authorities didn't particularly want to go to law to sort this out; it looks as if they would prefer to use moral influence. The irony is that protestors of this ilk tend to trumpet their morality loudly to any poor unfortunate in the vicinity; and yet they are evidently not liable to moral suasion. To coin a phrase, they can dish it out, but they can't take it. What a surprise.

Making an e-reader compatible document in LaTeX

2011-10-21T11:20:00.000+01:00

A few of my readers, I know, are LaTeX users, and of course, Google often directs people towards things which are useful. For that reason, I thought I'd post here the document code I use to create e-reader compatible .pdf files in LaTeX.

\documentclass[11pt,oneside,reqno]{amsart} \special{papersize=90mm,120mm} \usepackage[papersize={90mm,120mm},margin=2mm]{geometry}

A few notes:

The option 11pt can be bumped up to 12pt if all your fonts can handle it. (I use the bbold font to get a nice blackboard bold 1; in turn, it screws up 12pt fonts. There doesn't seem to be a nice way to get everything I want…)
Overfull boxes will be the bane of your life for a few reasons. Firstly, the margins are necessarily set extremely narrowly: overfill by about 6pt and you're off the screen. Secondly, if you're producing documents in dual format (A4 and e-reader, for example), then you will get the boxes right for at most one of the formats at any one time, unless you put pretty much all your equations into display mode.
Generally speaking, .pdf documents cannot be scaled in e-readers, hence the need for a special setup. Until the ePub crowd get their mathematical act together, this is the best solution I have found.
It is designed to fit a 6" screen, which sits nicely between the 5" and 7" which are about the smallest and largest on the market. The fact that it is also the size of my e-reader's screen is entirely beside the point.

Occupy what?

2011-10-15T20:48:00.000+01:00

We shall occupy… something!

Demonstrators in London were planning to set up a protest camp outside St Paul's Cathedral in a move inspired by Occupy Wall Street, which has seen a large gathering of people camp in New York's financial district since September.
One protester, Peter, said: "We're occupying and opening up this space directly next door to an institution which gambled with our economy recklessly and criminally." (src)

Look, I know that in spite of its long association with London, the custodians and employees of so great and venerable an institution have not always been found acting in the better interests of either the city of the wider nation; indeed, that it has at times been a den of thieves and a nest of vipers. We understand these things. But I am really at a loss to understand what the Church of England has done this time.

Yes, Sir Humphrey

2011-10-12T14:36:00.001+01:00

Several countries, including the UK, [are] concerned that a wide-ranging debate on new EU treaties could lead to acrimonious fights within each member state that could destabilise the union. (src)

'Concerned'? I thought it was common knowledge that the raison d'être of UK membership of the EU was so that we could destabilise it from within:

Inside, we can make a complete pig's breakfast of the whole thing: set the Germans against the French, the French against the Italians, the Italians against the Dutch. The Foreign Office is terribly pleased; it's just like old times.

Which of course is why we needed the Poles, the Slovaks and the rest in before the current crisis:

The more members it has, the more arguments it can stir up. The more futile and impotent it becomes.

It's called diplomacy.

Peston: still an idiot

2011-10-03T10:54:00.001+01:00

Stamp duty raises an invaluable £3bn a year for the exchequer. (src)

Oh, Robert, Robert, Robert. There are just a few things wrong with this. Firstly, £3bn is not 'invaluable'. I can tell you what its value is: £3bn. Seriously. Almost anything else you can call invaluable, but money, by definition, cannot be invaluable.

Secondly, £3bn is less than a half a percent of the UK government's tax revenue. It's not even significant.

Thirdly, your datum is insufficient to deduce that the first derivative of revenue with respect to headline rate is positive. (I am not making the counterclaim, or indeed any claim other than a lack of information.)

Fourthly, you cannot know the counterfactual: what if scrapping stamp duty on shares resulted in an investment boom which raised revenues from corporation tax and income tax beyond the £3bn you so laud here? It's a possibility, and one which you cannot discount without evidence, if you want to be serious about this analysis.

Not another Ed photo!

2011-09-28T21:47:00.000+01:00

Okay, okay, I promise to stop after this one. It's more scary than amusing, in any case. Just imagine: one at Number Ten, the other at Number Eleven. And most of the rest of us out of the country…

So here's a pair who are as thick as thieves; well, as thick as something, anyway. For two Eds, as they ought henceforth to say, are worse than none:

It's the Ed Miliband caption competition!

2011-09-28T15:43:00.000+01:00

The man's the gift that keeps on giving, really."After hearing Ed's speech, the audience was relieved to see that his next appearance was as a mime."

You can do better, I'm sure.

Carry on, Ed!

2011-09-28T10:51:00.000+01:00

Did you know? The phrase 'squeezed middle' was not the first option discussed by Ed Miliband. He had initially suggested the 'pinched bottom'.Oo, matron!

But, but, but…

2011-09-27T10:54:00.000+01:00

[Ed Miliband] will draw a distinction between genuine wealth creators like Rolls Royce - which, he will say, should be championed and encouraged - and "asset-stripping predators" such as Southern Cross care homes. (src)

He was also being trailed on Today as going to say that we shouldn't be rewarding companies like Southern Cross. As if market participants haven't drawn a distinction between Rolls, which is a going concern, and Southern Cross, which most emphatically is not. As if going bankrupt is a prize to be attained! Moreover, as the chappie from the replacement company pointed out on this morning's Today, not a penny of taxpayer subsidy went into the reorganisation, and the new business model is far more sustainable. I don't think bankruptcy and the loss of your investment is a reward, is it? I'd hate to see failure, if it is.

The truth is that every system will experience failures and problems in some component parts. State control, free market, bureaucratic, you name it, problems will emerge. Corruption, business failure, paperwork bloat: to name but three which are distinctive to each respectively. The acid test is how well the system can cope with its problems.

We know the answer for market processes: bankruptcy and loss of investment, followed, normally, by a reorganisation of the assets. Again, the norm is that this is done by those "asset-stripping predators" Miliband so hates. They buy the assets at a distressed price and then put them to better use. In the case of care homes, there's not much you could do to change the use, so the acquirer simply tries to run them better than their predecessor.

We have seen the market processes in action quite effectively with Southern Cross. I would hazard to say that, in fact, so far from being a black mark against private-sector care, this is a positive sign, showing responsible error-handling by market participants.

One is left to wonder how Ed Miliband's preferred system would cope.

The cultural imperialists at the BBC

2011-09-26T10:10:00.000+01:00

The Daily Telegraph reports,

Guidance from the broadcaster’s ethics specialists suggested that the modern phrases “common era” and “before common era” should be considered as potential replacements for Anno Domini and Before Christ. (src)

I don't intend to suggest that this is political correctness gone 'differently sane', one Radio Four comic described a another story at the weekend. It's not politically correct at all: in some ways, it is far more 'Christian' than BC and AD. Let me explain.

BC and AD come, as we all know, from 'before Christ' and 'anno domini', referring to the period before the birth of Jesus of Nazareth and afterwards. The key point about the initials is that their full meaning has been generally forgotten. Anno domini means 'the year of our Lord': the problem is that not everyone would agree with the description of Jesus as their Lord. People may think they know what 'before Christ' means; though it is generally forgotten, I suspect, that 'Christ' isn't Jesus' surname, but rather a claim to a particular religious significance as the Messiah of Israel.

Since the meanings have been roughly lost, wider society tends to treat them as meaningless signifiers which allows us to locate events in history by appeal to a single event: the birth of Jesus of Nazareth. Saying 'AD' does not entail confessing Jesus as Lord, nor does 'BC' require an acknowledgement of him as Israel's Messiah.

Is it politically incorrect to do this? No more so for Western culture, deeply influenced by Christianity, than for Arab cultures to date things by Muhammad's hajj, or some Eastern cultures with reference to the Buddha. And it has the advantage over the latter of being a fairly incontrovertibly historical event which is reasonably well-placed in the timeline. Bear in mind that in locating events with respect to Jesus' birth, we do not make any claim about the importance of Jesus for any individual. At most, the claim is that his birth has been important for Western culture. The endurance of Christmas must surely put paid to any denials of that fact.

So what of the proposed replacement? The phrases '(Before) Common Era' still locate events with respect to the birth of Jesus: we all know this, even if the 'modernisers' try to deny it. But in replacing the phrases, they add something: his birth now marks the start of the 'Common Era'.

They claim that this event is common to all: whatever your creedal or cultural background. Well, good on the ethics unit at the BBC for asserting the universality of the gospel of Jesus Christ for every man, woman and child on the face of the earth. Good on them for asserting that each of us has a share in his birth—I await their similar announcement for his death and resurrection. Good on them for calling Muslims, Jews, agnostics and plain old atheists to acknowledge his importance to their own lives. But if you want to avoid religious or cultural imperialism, you might do better than, in effect, to declare Christ to be of such cosmic significance that he is common to us all.

Paging Mister Fahrenheit?

2011-09-24T23:30:00.000+01:00

Tim Worstall sparked an interesting discussion on yesterday's neutrino preprint, canvassing for opinions on whether the special principle of relativity will remain standing (link). The best bit of the discussion has to be the name given to one of the neutrino-capturing processes. (It's genuine. Read the discussion to find out.) The news story itself is fascinating, especially for me as it's well within my broader area of expertise and interest. (I'm a theorist, though, rather than an experimentalist, so I'm not even thinking about picking it over for potential sources of error.) I hope it will be interesting for my students, too: I start teaching our third year quantum mechanics class on Tuesday, so what a week to start out on the topic!

Anyway, I thought I'd reproduce here what I wrote (with some edits to explain references to preceding comments). The executive summary is that if I could find the right contract and liquidate my assets in due time, I would put every brass penny I have on the special principle of relativity emerging unscathed. Of course, I don't know how quickly this will happen, but I'm absolutely convinced it will.

Thinking about money, there is one other comment I thought I'd make. The difference between the neutrino speed and light speed was six times the estimated standard error : a 'six-sigma' result. The last time I saw a six-sigma result was the transition in the Swissie's exchange rate after the Swiss Central Bank announced it was ~~price-fixing~~ pegging to the Euro. We live in a world of 'fat tails', where six-sigma events can happen more often than naïve probability theory says they should.

The media, for once, are accurately reporting a potentially big story as a potentially big story. I’ll go on to explain why I think it won’t be, but they’ve got the potential magnitude about right.
I would bet heavily on current physics rather than anything new. That, not least because the special principle of relativity has stood up to every single test thus far. The ‘speed limit’ emerges straight from the special principle.
So what is it, if current physics (probably) still stands? [The extra dimensions idea, which would amount to string theorists smugly saying they'd told us so] is possible, and at the tail end this could be paradigm-shifting; but my prior distribution assigns the bulk of the probability to the dullest of the null hypotheses: systematic error of some sort or another.
Notwithstanding all of this, the one thing it is not about is frames of reference, pace the idiot editors at the BBC. They promoted to ‘Editors’ Recommended’ some below-the-line nutter who thinks it is to do with whether the speed of light is different when you’re on the earth. Twit. Even the other BTL nutters have given the comment -38 [since, it has declined even further]. Hanging’s too good for the lot of them.
Science is working, folks. The CERN crowd are doing the right thing by exhibiting scepticism themselves and trying to debunk their own result.

Oh, and the title? Trust Freddie Mercury to have got there before us. Sort of.

I'm a shooting star leaping through the sky
Like a tiger defying the laws of gravity
I'm a racing car passing by like Lady Godiva
I'm gonna go go go
There's no stopping me
I'm burnin' through the sky yeah
Two hundred degrees
That's why they call me Mister Fahrenheit
I'm trav'ling at the speed of light
I wanna make a supersonic man out of you (src; mp3)

A Yorkshireman writes in

2011-09-22T15:06:00.000+01:00

There's shale methane over them thar hills, so they say. But we already knew that Lancashire is full of gas (BBC).

It has to be extracted through a fracking process. Why they feel the need to be so rude about it, I don't quite know.

It turns out you smash a few rocks and extract the gas that way. It's controversial, with some people saying it could cause problems if we break the wrong rocks. Perhaps, but look on the bright side. If it all goes wrong, it's only Lancashire.

On the other hand, if it all goes right, Lancastrians could be rather better off than Yorkshiremen. And that can never do. The only solution is a peacekeeping force from Yorkshire to secure the Western petrochemical supply line. Who's with me?

Jules Verne on 'peak coal'

2011-09-09T09:33:00.001+01:00

From The Mysterious Island, ch. 33 (link). Spilett, the journalist, asks Harding, the engineer, whether he thinks industrial progress will be stopped when the coal runs out. Verne, through his hero Harding, gives the answer: fuel cells. Hydrogen and oxygen, separated and then recombined, to power vehicles and machines. Indeed, one might suppose that he comes as close as it was possible for a Victorian author to come to suggesting fusion power: nuclear fusion not yet being known, of course, but he correctly predicts that we will seek to use water as the source of fuel and to generate electricity from its constituent parts. (One shouldn't be too hagiographic. Verne appears to think that separating and then recombining water is going to be an energy-positive process, which is clearly not true. But it's clear that he was very good indeed, even allowing for the errors.)

It is amusing that it remains, generalising wildly, journalists and other artsy types who think progress will stop when the fuel runs out, and the engineers, scientists and economists who tend to be optimistic that we will simply find a new, better source of fuel. But enough from me: here's Verne.

It chanced one day that Spilett was led to say, "But now, my dear Cyrus, all this industrial and commercial movement to which you predict a continual advance, does it not run the danger of being sooner or later completely stopped?"
"Stopped! And by what?"
"By the want of coal, which may justly be called the most precious of minerals." …
"Oh! the veins of coal are still considerable, and the hundred thousand miners who annually extract from them a hundred millions of hundredweights have not nearly exhausted them."
"With the increasing consumption of coal," replied Gideon Spilett, "it can be foreseen that the hundred thousand workmen will soon become two hundred thousand, and that the rate of extraction will be doubled."
"Doubtless; but after the European mines, which will be soon worked more thoroughly with new machines, the American and Australian mines will for a long time yet provide for the consumption in trade."
"For how long a time?" asked the reporter.
"For at least two hundred and fifty or three hundred years."
"That is reassuring for us, but a bad look-out for our great-grandchildren!" observed Pencroft.
"They will discover something else," said Herbert.
"It is to be hoped so," answered Spilett, "for without coal there would be no machinery, and without machinery there would be no railways, no steamers, no manufactories, nothing of that which is indispensable to modern civilization!"
"But what will they find?" asked Pencroft. "Can you guess, captain?"
"Nearly, my friend."
"And what will they burn instead of coal?"
"Water," replied Harding.
"Water!" cried Pencroft, "water as fuel for steamers and engines! water to heat water!"
"Yes, but water decomposed into its primitive elements," replied Cyrus Harding, "and decomposed doubtless, by electricity, which will then have become a powerful and manageable force, for all great discoveries, by some inexplicable laws, appear to agree and become complete at the same time.Yes, my friends, I believe that water will one day be employed as fuel, that hydrogen and oxygen which constitute it, used singly or together, will furnish an inexhaustible source of heat and light, of an intensity of which coal is not capable. Some day the coalrooms of steamers and the tenders of locomotives will, instead of coal, be stored with these two condensed gases, which will burn in the furnaces with enormous calorific power. There is, therefore, nothing to fear. As long as the earth is inhabited it will supply the wants of its inhabitants, and there will be no want of either light or heat as long as the productions of the vegetable, mineral oranimal kingdoms do not fail us. I believe, then, that when the deposits of coal are exhausted we shall heat and warm ourselves with water. Water will be the coal of the future."
"I should like to see that," observed the sailor.

As should I. And given the way the research is advancing, I may yet live to.

What paucity of ambition!

2011-08-24T18:02:00.002+01:00

Councillor David Faulkner, former Newcastle City council leader, said: "I would have preferred a bold decision that made the entire region one big enterprise zone, so that we don’t just see jobs being relocated within the region, which is a risk. Instead, we could use the enterprise zone to see jobs being relocated from elsewhere in the UK." (src)

Dear me, Coun Faulkner, why set your sights so low? I would dispute strongly the zero-sum language of 'jobs being relocated', but the idea is sound: the enterprise zones will create some economic growth in and around the areas where they are set up. So I ask again: why such low ambitions?

Setting up enterprise zones suggests quite strongly that enterprise is in the doldrums, and that government is getting in the way. So let's make the whole country an enterprise zone. It's nice to see Lib Dems so persuaded about the benefits of supply-side reform in their region: time to see them apply the same reasoning to the entire UK.

Shock poll — 83% of Groan readers oppose capitalism

2011-08-19T21:36:00.003+01:00

Yes folks, it's true. I have the link to prove it (link).

The back-story is Stagecoach's £340mn distribution to shareholders. The company has generated a pile o' cash and has paid off a shedload of debt. More, in fact, than is fashionable, so it intends to shell some cash out to shareholders to make itself a bit leaner of balance sheet.

Of course, your average Guardian reader is utterly uninterested in the workings of the capital markets [1], and so does not realise that (for example) shareholders can elect to take their share of the distribution in any proportion of income and capital they wish (src). (Some have been calling it a 'dividend': for some this will be true; for others, less so. For holders in pensions or Isas, this will be irrelevant.)

Others, I suspect, do not quite comprehend what would happen if the payment were 'blocked'. This almost certainly includes the Guardian staffer who thought up this bizarre question. For the company would have access to borrowing facilities it wasn't using. (I thought current Guardian economic, um, 'thinking' was that companies' balance sheets ought to be stuffed to the gunwales with debt.) Now, the directors have a legal duty to use it to further the interests of shareholders, which would entail using those facilities expanding Stagecoach's market share and other activities I am quite certain the Guardian readers would dislike intensely.

It is one thing to question whether rail franchises should be, in effect, Crown monopolies. Some Groan readers seem perilously close to this view (I say perilously, since to hold it would imply supporting liberalisation, not nationalisation). But if the company has earnt its revenue legally by conducting itself in a commercially sound manner, with all due probity — if, in short, it has earnt it well — then why should Guardian readers object to its shareholders receiving their compensation as owners and suppliers of capital? After all, they would be most put out if its employees had their salaries blocked.

[1] I imply no slight. It is perfectly fine to be utterly uninterested in the workings of the capital markets; taking an interest is very much a minority sport. But if one is so uninterested, then one ought to avoid holding strong opinions on them, for fear of being caught believing something not only contrary to fact, but also to good sense.

I neither hold nor intend to hold shares in Stagecoach.

Why yes, Warren, there is a Laffer curve

2011-08-18T18:54:00.000+01:00

Warren Buffett wrote a column the other day. (Why he can't stick to being a fantastic fund manager, I'll never understand.) He made two rather curious claims. Well, curious when taken together. Watch.

Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends. I didn’t refuse, nor did others. …
Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent. (src, excerpted and re-paragraphed)

So in the first paragraph, he claims that the Laffer curve doesn't exist. But, um, what about the second?

Gee, even I can tell, without the aid of an electronic calculating machine, that 21% of $91bn is going to be rather more than 29% of $17bn. So they cut the rate and the receipts went up.

Of course, this needs caveating. The biggie, as usual, is that you can't say anything about causality. Moreover, there is an issue to do with netting off background growth over the period. But still, it is fairly clear: Warren, you just found yourself some prima facie evidence of a Laffer curve, and tried to use it to claim there is no such thing. Well done. Now, go back to identifying undervalued stocks. You're good at that; not so good at logic or economics.

Tim's idea: nice but dim

2011-08-18T09:35:00.003+01:00

Tim Montgomerie, of ConservativeHome, writes in the Groan:

My second idea would be to rebalance the tax system in a way that will be less comfortable for some Conservatives. Britain taxes income quite highly and wealth hardly at all. In other words we are taxing job creation more heavily than we are taxing inequality. (src)

Except that this isn't true, of course. Taxes on income are not taxes on job creation, since the burden is borne by the employee. Income taxes tax labour, decreasing the rewards enjoyed by employees for their toil. Raising income taxes decreases (at the margin) supply of labour, rather than demand.

However, taxing wealth would be taxing job creation. That is, unless you think that capital only ever lies unused and inert. When capital is deployed, it is used to employ people in pursuit of profit. The profits are then split between the provider of the capital and the provider(s) of the labour. If you tax wealth, you decrease the amount of capital available to employ people. This is exactly the definition of a tax on job creation — not to mention attacks on job creation. Cut into capital, and you cut demand for labour.

Sorry, Tim: economics says No.

Paying attention, Keynesians?

2011-08-15T17:40:00.004+01:00

This is where the paradox of thrift comes in:

Like most of sub-Saharan Africa, the informal sector is massive in Mozambique, but the profits are rarely deposited. The government says if they were that cash could help banks provide loans to other businesses, which could in turn create jobs. (src)

Even with the calamitous nature of the banking crisis in the West, I don't think our economic infrastructure has hit Mozambican levels. There's no paradox here between saving and economic growth.

For your added amusement, here (link) is Paul Krugman making a very similar point, back when he was a proper economist. Feel free to discuss answers to the following question: "Richard Dawkins is to biology as Paul Krugman is to what?"

From the pen of Matthew Norman

2011-07-20T20:19:00.003+01:00

[Boris] was once, for example, a dodgy News International journo himself, being fired by The Times for manufacturing a quote… (src)

And how thankful we are that the Independent is firmly ensconced atop the moral high ground on this matter! Assuredly, they would never wait for practically the entire media to drag one of their number kicking and screaming to admit his guilt before dealing with accusations of fabrication.

More capitalist exploitation

2011-07-11T19:48:00.004+01:00

This is a story in my occasional series from the wilds of wicked capitalist investment in the developing world. Before I begin, I'd like to advertise the DEC's Kenya appeal (donate here). We probably all have various views about why East Africa suffers famines regularly and how this could be made a less frequent occurrence. There are issues, both here and there, which need to be tackled. But at the moment, they need money to buy food.

Other parts of Africa, though, don't face such immediate problems. Instead, they need the more long-term kind of development work. Here is the story.

Alcohol is enjoyed all over the world — and it causes problems all over the world, too. Anyone with links to sub-Saharan Africa will know that this is every bit as true in countries like Uganda as anywhere else in the world. Poverty means that the most affordable beer, home-brew or cottage-industrial, poses health risks: sometimes produced in unsanitary conditions, often with unpredictable alcohol content, occasionally even lethal. Cheap, if you don't mind running an armful of risks.

SABMiller, partly encouraged by tax breaks from the Ugandan government, has been stepping into this market. It's clearly not very easy to do, since poor Ugandans are very price-conscious. But SAB developed a way to use sorghum in the production of beer. Using its technique, it has been building breweries in Uganda, taking in Ugandan sorghum and selling Ugandan beer to Ugandans. SAB's plants are offering Ugandans an alternative to the cheap-but-dangerous homebrew they used to drink: cheap-but-safe. In the process, it generates demand for Ugandan crops and provides jobs to Ugandan brewery workers.

Of course SAB turns a profit by doing business in this way. And it's listed in the London and Johannesburg (South African Breweries), so Western investors, who provided the capital, benefit along with Ugandan farmers, who provide the crop, and brewery workers, who provide the labour. Since SAB earns a profit, you'll never hear it lauded in any trendy development rag. But capitalist 'exploitation' is enriching the lives and pockets of Africans. After all, how many charities can you name who have set up breweries in Africa?

Source: Innovation brews in Uganda's beer; FT (video; subscription may be required).

(I own no shares in SABMiller, nor do I currently intend to do so.)

Respect and liberty

2011-06-28T11:07:00.003+01:00

Today's FT (£) reports that the Chinese premier is openly expressing his anger at the way the British government has expressed its concerns about human rights. What is interesting is the very Chinese way in which Premier Wen set out his objection:

On human rights, China and the UK should respect each other, respect the facts, treat each other as equals, engage in more cooperation than finger-pointing and resolve our differences through dialogue.

Respect, and the idea of losing (or retaining, or gaining) face, are very important to the way Chinese people deal with each other. Premier Wen is being extremely true to his cultural background — as, of course, the Prime Minister is in wanting to mark up the importance of respecting individual liberty and human rights. Not that these latter are purely cultural, of course, but it is fair to say that our culture has been more influenced by those ideas than most East Asian cultures.

And therein, I think, lies the point at which the government should press its case: laying emphasis on the respect, rather than, as at present, the liberty and human rights. Laying the emphasis, in fact, on respecting the Chinese people. This area is an important part of our relationship with China, and we mustn't get it wrong. So I would suggest tuning our message on human rights so that it resonates with the Chinese leadership in ways which mean it is hard for them to ignore it.

That may mean moving away from the language of human rights and liberty, as abstract principles, and talking instead about respecting the people of China. Talk about how the Chinese government should respect their opinions, respecting their property, respecting their beliefs. Talk about how it is more important for rulers to respect the people than vice versa.

Another important aspect of East Asian cultures, including the Chinese, is the respect for authority, especially established authority. This is part of the problem, of course: authority leads too easily to authoritarianism. But it can be a part of the solution, too. Government ministers could cite Chinese and British thinkers on the relationship between the rulers and the ruled in their speeches and public statements.

In short, at present our message is infuriating the Chinese leadership but probably not connecting as well as it could. Perhaps we need to turn the volume up, by adapting the way we present the message to fit better with Chinese culture.

This is rich

2011-06-20T23:11:00.004+01:00

(I know, blogging has been thinner than thin lately. I don't even have the excuse of being gainfully employed.)

A Guardian cartoonist accuses Michael Gove of trying to claim expertise in areas where he knows nothing (src). Mr. Pot, I wonder if you've ever met Polly Toynbee?

Oh, and another thing. We'll have to retire timeo Danaos et dona ferentes, if only because they clearly can't afford them any more.

Choices for the national patient

2011-05-12T11:47:00.000+01:00

The wicked old Tories want to abolish National Health, I hear. One would be made to think that they intend to replace it with National Sickness. The choice their opponents would set before us is the NHS or the US model. Left-wingers are often fond of accusing the US of forgetting about the world beyond its doorstep; it is ironic that those same left-wingers should forget about the Continent beyond our own doorstep.

So let's leave the angry hordes of British lefties for more Continental climes, and ask ourselves how some other countries organise their healthcare systems. I'm going to draw most of this from Wikipedia, but I'm sure it's basically accurate.

Bear in mind that the opponents of reform invariably cast their concerns in terms which imply that what they really want is a centrally directed healthcare system: one giant super-hospital, with multiple branches throughout the nation, paid for entirely out of taxation.

First on our round-Continent trip, then, it's off to Sweden, that social-democratic paradise so beloved of the left (W). It has, like us, what is termed a 'Beveridge' system, as opposed to the other three we shall inspect, which have 'Bismarck' systems (src). The national Ministry of Health sets general policy and provides funding. County councils commission care from private providers, and raise most of the funding from local income taxation (how very Liberal Democrat!). Every doctor's visit and prescription has a small charge attached, but there is an annual cap on the amount that patients pay.

Next off, let's go to the place where everything is always in order, Germany (W). Here, they have an insurance system, where the government offers a sort of basic insurance policy which you can take, or you can opt to take private insurance instead. 85% of Germans take the government plan. Co-payments are a feature of the system, and a little over half the hospital beds in Germany are provided by public sector hospitals (ppt), with the rest being a mix of charitable and for-profit private provision. The private provision is growing, while the public provision is shrinking.

Well, let's follow the historically-usual route out of Germany and skip past the Maginot line by heading into the Netherlands (W). The Dutch have a system of "social insurance", in which policies cannot be priced according to age, medical history or other factors; instead, insurers pool the risks and charge roughly the same premium. About half the finance for the system comes from premiums, with the other half coming from taxation. Most of the healthcare system, including the insurers and hospitals, is privately run on a not-for-profit basis. Interestingly, the Dutch allow opt-outs (some Christian groups object to insurance), and so have a small, parallel healthcare savings system as well.

Finally, we'll enjoy some of the finer things in life by visiting la belle France (W). Widely regarded as having the best healthcare system in the world, the French are required to buy insurance from a public insurer according to their income. Doctors mostly form private practices, while provision of hospital beds is about two-thirds public, a fifth profit-seeking and a sixth charitable. French people pay up-front for their healthcare and then get typically about 70% back from the insurer: so much for free at the point of use!

Four major European countries. Four different healthcare systems. But all far more similar to each other than to the UK system, and all have the following key points:

Private delivery ranges from being the norm (Sweden) to a minority but accepted element (Netherlands, France).
Sometimes a flat levy (Netherlands), at others strictly proportional to income (France), all systems but the Swedish have a direct contributory principle at their heart, in addition to taxation funding.
Co-payments are entirely common, with costs either co-paid on the spot (Sweden), or the patient's cost being defrayed later (France).
The multiplicity of providers ensures in all four systems that patient choice is real and occurs, from insurer where.

If anything, the Government's healthcare reforms will make us more European. So are you forward-looking, progressive, European in your outlook? Then for pity's sake, support the healthcare reforms. Let's leave opposition to the Little Englanders who think the United Kingdom so far superior to the Continent we can learn nothing from them, and the reactionaries who think that the late Forties are just the years for us.

That referendum

2011-05-04T09:25:00.003+01:00

Firstly, the usual call for voting. I don't go in for partisan calls to vote: just vote. On this point, I don't care how you intend to vote. And if you haven't thought about it, think about it and then vote.

To that end, I would like now to try and persuade you that the Alternative Vote system is an improvement on the existing system by putting forward two absolutely true facts which, for me at least, clinch it.

Fact the first: You can get the existing system back from AV.

This is the kicker. If you fill in your ballot with a '1' against your preferred candidate and no other, then it contributes to the poll in exactly the way that it would under the existing system. (Don't believe me? Think about it!) If everyone did that, then we would have first-past-the-post back: the bottom candidate drops out, no preferences exist to be redistributed so the next one drops out and so on, until the candidate with the most votes wins. So by opting for AV, we don't have to be opting against FPTP! In other words, supporters of FPTP can vote for AV and still have a first-past-the-post ballot, while permitting those of us with more than one preference to express ourselves more clearly.

Fact the second: AV means more choice without radical change.

Nick Clegg made this argument very briefly but very well yesterday morning when he said that it baffled him how the Conservatives, so long the champions (and I would add, rightly) of choice and competition in public services, are opposing a voting system which gives voters more choice. Instead of having to vote for a single candidate, I can list as many as I like in preference order. This reduces the need to think tactically, and it pretty much destroys vote-splitting effects. In sum, this is a point about free expression: FPTP needlessly restricts the amount of expression I have; AV is a refinement which increases that freedom.

As a sentiment additional to that second fact, I would point out that it is, curiously, the fissiparous and anti-consumerist 'left' which offers more choice than the supposedly pro-consumer 'right'. I am hopeful that AV will encourage a little more amicable break-up on the 'right', allowing especially those of us with more distinctive political tastes to vote for an Orange Booker, a liberal Conservative and maybe even a Blairite without needing to run the risk of getting John Reid, David 'Top Cat' Davies, or Simon Hughes.

So, the two killer facts which drive me to vote for AV tomorrow: AV contains FPTP as a simple, mathematical restriction; and AV allows us to express our preferences and choices more fully.

AV: tell them what you really think!

Evil speculators

2011-04-26T17:50:00.000+01:00

I'll bet that it is possible to find people asserting that speculation was anathema to the solid Victorian capitalist investors, who put their money into ventures looking for long-term dividends and profits. Moreover, I'll bet they say that speculation was bad for economic growth and deprived solid industries of capital. It would be dangerous for me to assign a political colour to that opinion, not least because anti-speculator populism can be found throughout the political spectrum.

Many Victorian investors, of course, were long-term in their point of view, and that investment theory has echoes in my own approach to investing which emphasises what one might term a 'get rich slowly' attitude: buy shares in good, reliable companies paying a decent dividend and wait for the money to roll in. Nevertheless, it is amusing to read the following conclusion of a review of investment in late Victorian mining stocks, given the evils which are laid at the door of modern speculators.

There is clear evidence in the mining sectors that as the metropolitan capital market emerged as a national and international force in the late nineteenth century, many of its leading players were more interested in the short-term manipulation of wealth, through speculation and share-dealing, than in long-term wealth creation, through careful investment in legitimate enterprise. (p. 731)

Truly, there is nothing new under the sun! Speculation has been in the capital markets for as long as they have existed (of course, the South Sea Bubble proves this amply well), and far from ruining us it appears to have been helpful. Certainly, it did no lasting harm to our industrial prospects:

Undoubtedly, far more money was lost in this [speculative] market than ever was made from it, but it was not necessarily lost to the industry. (p. 723, emph. orig.)

Speculators were, and remain, an important part of a well-functioning market for getting capital to enterprises. Mind you, as the latter quote makes clear, you have to be foolhardy to try it, but be glad! there is a market even for fools. For every so often, the speculator hits on a decent proposition and makes a small fortune. After all, this is pretty much the only way that speculators can be encouraged to enter the market; and without the speculator, far fewer investment propositions would be funded than are. We would have far fewer success stories without speculators and venture capitalists, and the stories of failure which accompany them are necessary by-products of the experimental laboratory which is the capital market.

So next time you read populist of left or of right bashing speculators for doing the economy down, remember: they may be fools, but they're the sort of fools we need.

Quotes come from "Segmented Capital Markets and Patterns of Investment in Late Victorian Britain: Evidence from the Non-Ferrous Mining Industry", Burt, R: Econ. Hist. Rev., 51/4 Nov. 1998, pp. 709–733. (link)

The liberal editors at the Guardian

2011-04-19T12:13:00.004+01:00

The other day, the Guardian ran a piece by Ha-Joon Chang and Duncan Green, arguing for the extremely bad idea of a financial transaction tax, and claiming that it is 'obviously' the right thing to do (link). The first comment below the line came from a commenter called SoundMoney, who raised some very powerful points. I shall replicate them in a moment, but for the moment, consider this. One of the commenters responded, saying

@SoundMoney
Thanks for that. It's good to see the counter-argument developed.
Hopefully an advocate of a FTT will respond to you at some point.

The response from the Guardian has been to make SoundMoney's comment to read, 'This comment was removed by a moderator because it didn't abide by our community standards. Replies may also be deleted. For more detail see our FAQs.' Comment is free?

For the record, here is a duplicate of the original comment, reposted later (src). It is rather baffling to me as to which community standards it breached. I assume, for the sake of charity, that the Guardian does not think disagreeing forcefully, with argument and reason, are breaches of community standards. It's worth reading and bearing in mind, since this idea still maintains some sort of zombified existence in the weirder fringes of leftonomics.

This argument is flawed beyond all reason. The two "main" objections you cite are minor ones. Complexity is indeed a non-issue.
Mobility of capital is a serious matter - not least because Obama has said America will have nothing to do with it. One major centre opting out will attract funds from all around the world. [The Glass Steagall Act post the Great Depression severely damaged New York as a financial centre and handed global dominance to London, where it remains. Food for thought for anyone crying "break up the banks"].
The remaining objections to a Tobin tax are:
1. It will raise nothing. Those millions of transactions per minute are generally computer generated - moving £1m from A to B overnight in search of 12p interest, then back again. A Tobin tax would take £500 on the move to B and £500 on the move back to A. So the transactions will never happen. And some retail depositors somewhere will lose 12p.
2. Whatever it does raise will be easily avoidable and/or will impact adversely on less sophisticated bank customers. A tax is a tax: it's not free money. Depositors will pay. The rich won't pay it; the small savers unable to arrange their affairs to avoid it will. It will increase inequity. It is, in fact, a Sheriff of Nottingham tax.
3. That bank paying an extra 12p overnight - it's offering it because it needs to borrow inter-bank funds. All banks do this to maintain liquidity: they can never guess with 100% accuracy how much cash to hold to meet expected withdrawals. Taxing the mechanism whereby banks maintain liquidity is dangerous and possibly suicidal. Lack of liquidity, more than lack of assets, is pretty much what nearly drove the entire banking system over a cliff in 2008. It is insane to increase the probability of a recurrence.
4. If a Tobin tax is introduced, arguably the Chancellor should in fairness repeal his new "windfall tax" bank levy (taxing bank profits being a far more sensible way of proceeding - and we have done so). You are not going to convince any sane Chancellor apprised of the facts that a Tobin tax will raise more money. Why throw away something workable, predictable, and only just introduced in favour of a chimera which will probably raise next to nothing?
5. There is no international body capable of requiring 200 nation states to introduce it. Those that opt out will perceive (probably rightly) some competitive advantage to be gained from not joining in. If you doubt that, consider the fact that there are more hedge funds in the Channel Islands than London. Regardless of any change of heart by America (none is now an offer), enough places will opt out to make avoidance easy and legal. My own self-administered pension fund can be offshored in a day.
6. The loss of business from Tobin-taxed Britain to opt-out jurisdictions will threaten Britain's pre-eminence in financial services, our largest source of taxes after retail, and threaten the 2,000,000 people whose jobs the sector maintains.
7. The "goodies for the developing world" argument is bullshit. The tax will go to national government who choose to impose it. Those governments may or may not modify their aid spending, but any decision to do so will have nothing to do with a Tobin tax. Very few transactions now take place in the developing world, so their own governments will gain little or nothing from the tax should they introduce it. Many developing countries do business in the major western financial markets however. They too will be victims of the tax. They will be funding, say, the UK's health service. Again, for them, it's a Sheriff of Nottingham tax; a (typical) smash-and-grab raid by the rapacious west on their fragile economies.
Now can we please lay this nonsense to rest?

Labour: only 95% as evil as the Tories

2011-04-05T21:25:00.005+01:00

It being May, there are council elections. It's the turn of the city of my choice to go through the rather bizarre ritual of seeing about a third of us vote in a popularity contest between the national parties, and locally, Labour is doing its level best to make the contest as national-popularity-ish as possible.

York is a very Lib Dem kind of a place, even though it doesn't have a Lib Dem MP. (York Outer was, supposedly, a hypothetical new marginal; but somehow the Lib Dems threw it away. It's probably a Zionist conspiracy [ref].) Notwithstanding, the outskirts are classic Lib Dem/Tory, while the inner bit is solidly Labour, as seen in the MPs for the respective constituencies. The local council is minority Lib Dem. This, of course, is where Labour as the second party comes in.

The great charge Labour wish to make stick is £21mn of cuts to local services, allegedly agreed by the Lib Dems and Tories, who between them just about have enough votes to keep control of the council. (York's situation is almost an exact mirror of Westminster's: the Lib Dems are the powerful force, with the Tories as a small supporting act.) That sounds like a lot, £21mn. Actually, it's about 5% of the 2009–10 expenditure (pdf). And if the council hadn't been running a surplus, the cuts would have been worse.

So that's the context. What is Labour's great claim for votes? They will rescue £1mn of York's public services. Or, put another way, Labour would cut £20mn of public services. In the context of a £444mn budget, that's scarcely worth sneezing over. But the problem is deeper than that. For York Labour want us to believe that cuts are wicked, evil, nasty things, and they'd make £20mn of them. Now, I don't agree with Labour's characterisation of public spending cuts. But let's take it at face value: York Labour's advertisement is that they are only 95% as evil as the Lib Dems and Tories.

Me? Well, as I say, I don't buy Labour's approach to the public finances. But even if I did, I'd have to wonder why I'd bother getting semi-skimmed when full-fat evil was on offer.

Another win

2011-03-22T15:37:00.003Z

At times like this, I can really get behind this government. There are a few policy ideas I have been a supporter of since hearing about them or considering them, but never expected them to see the light of day. Scrapping NI is one: apparently, this could now happen.

Here is another radically liberal plan which could make it into the Budget, according to the FT Westminster blog:

There will be a pilot project announced for councils to oversee a system of “land auctions” whereby they would effectively sell planning permission to developers – freeing up more land and driving down the price.

The source of this brilliant policy (and it really is quite brilliant) is CentreForum's Dr Tim Leunig; you can read the report at this link (src).

It is a way for councils to capture a large proportion of the uplift in land values which takes place when they add planning permission. Currently, you may be aware, the landowner or developer applies for planning permission, and the council either accepts or rejects. The uplift in value is shared by the landowner and the developer in some combination; none of the uplift flows to the local community as expressed in the local council.

This scheme would allow landowners to offer the council an option on a parcel of their land: a price, and possibly some conditions, would be attached to the parcel. The council would then choose which options to buy — that is, which parcels to accept — and would slap on whatever planning permissions they thought appropriate. The council then auctions off the land, and thus earn the uplift from the landowner's price to the developer's.

This is sensible because it is only the council which adds anything new to the process between landowner and developer, and yet the council does not see any of the uplift. Consequently, there is no incentive on council or local residents to agree to new developments. By aligning the pay-off with the agent in this way, local communities will have a reason to agree as well as reasons to disagree. Hopefully, this will result in lower land prices, cheaper housing, more development, better public services and lower council tax, to name but a few of the benefits.

A quick recommendation

2011-03-21T22:31:00.003Z

I don't have time to write much on this, but do read the blogpost which is the source for this quote. And, if you have the time and the inclination, the Hansard link as well. This is much in the same line as the Trafigura stuff; you may recall that then as well, I happily helped to throw stones at the walls of silence erected around the issue. But this time, it's lawyers and officials using threats to cow individuals into agreeing not even to talk to their MP about the problems they are facing.

Like I say, read the whole thing.

Mr John Hemming, MP for Yardley in Birmingham, rose to his feet and used parliamentary privilege to list some of the secret prisoners, the people who have lost their liberty in the UK behind closed doors; the court orders which … prevented the aggrieved citizen from appealing to their MP for help. (src)

It's another one of these stories that makes you unsure whether you live in the country you thought you did.

Words to ponder

2011-03-18T09:48:00.003Z

The use of this word ['inappropriate'] is a hallmark of a particular character that thrived under New Labour. It’s someone who is enough of a moral relativist not to want to use the terms “right” and “wrong”, but not so much of a relativist that they are prepared to forego the power and wealth that comes from passing judgment upon others. Egalitarianism only goes so far. (src)

It's a great insight into the way that people can use their words to undermine someone else's position and build up their own. One of the foremost ironies of this phenomenon is that postmodernists, so adept at identifying precisely this underhand and sinister use of words, are also among the chief exponents of the method. They can sniff out a special-pleader in an instant; dare I suggest because it takes one to know one?

However, I wouldn't, believe it or not, want to make such a strong link between this and the previous government as does Chris Dillow. Perhaps that kind of character did thrive under New Labour, but I think he is falling into one of the traps about which he rightly warns the rest of us: that of ascribing too much influence to a single individual or small group of individuals.

Sin, for that is what Chris is identifying even though he would doubtless dislike the word, is not a problem of politics but of human nature. So don't blame it on Labour, Chris, blame it on us.

This 'ex nihilo' fiction

2011-03-14T22:18:00.004Z

It's not a lie, if only because the people propagating it tend not to have the intellectual integrity to check their sources before trying it on. The claim is that the government's NHS plans are coming like a bolt out of the blue, without having been mentioned at all in any manifesto. Here, for example, is Michael Meacher, inhabiting his own little world where Labour is pure and the Tories come up with evil plans to ruin the NHS:

Leave aside there’s not an iota of mandate for [an “automatic right for private sector companies, charities and voluntary bodies to bid for public work”] from the Tory election manifesto last year. (src)

Reading manifestos is a pain, I know. I mean, I doubt Michael Meacher even got to the end of Labour's turgid effort in May 2010, never mind reading the manifestos of his opponents. But if he wants to claim that something does not appear in their manifesto, he had better try reading it first, or he might look a little silly.

Our public service reform programme will enable social enterprises, charities and voluntary groups to play a leading role in delivering public services and tackling deep-rooted social problems. (p. 37)
We will give every patient the power to choose any healthcare provider that meets NHS standards, within NHS prices. This includes independent, voluntary and community sector providers. (p. 45)
We will strengthen the power of GPs as patients' expert guides through the health system by giving them the power to hold patients' budgets and commission care on their behalf; … and putting them in charge of commissioning local health services. (p. 46)
(pdf)

Nope, the government's current plans for the NHS — plans, I would point out, which are intended to stop government from having Plans for the NHS — have come from absolutely nowhere and bear no relation to anything in either of the election manifestos of the governing parties; and the wider social policies of which they are a vanguard have no precedent on page 37 of the Conservative manifesto at all. GP commissioning is a complete surprise, opening up to private provision is something the Tories had given no thought to, and involving non-governmental organisations in delivering public sector work was seen by no-one. Specially me, because I don't clearly remember almost giving the Tory manifesto a standing ovation when I read the line on p. 45 which I quoted above.

I know it's fashionable to claim that the NHS plans are some sort of weird apparition which was not foreseeable in any sense, and that the idea of opening up the public services to non-state organisations is a magical arrival from another plane. Back in the real world, however, it is clearly also baldly, factually inaccurate. Do I expect Labour politicians to stop making this inaccurate claim?

Go on, guess.

Oh, how we laughed

2011-03-11T14:40:00.003Z

This time, it isn't the Australian subs who are causing problems at the Telegraph.

Clegg tells Cameron he's 'talking complete bilge' over AV
Nick Clegg told David Cameron that he was "talking complete bilge" over the proposal to introduce the Alternative Vote system in a comment that indicates the tension over the issue at the top of the Coalition. (src)

Oh noes! Politicians in government disagree with each other! It's the end of the monarchy and all that is right with Britain!

Except, um…

[Clegg] said: "We were very good humoured about it. We mutter to each other. We were just joking. We disagree on this one."

Yep, politicians at the top of government are able to smile and laugh about their disagreements. This isn't tension, it's actually very healthy.

Still, we learn that "a phalanx of some of Britain's leading historians warned a move to AV … could destroy the principle of “one man or woman, one vote”." Yes, the Telegraph names some of the historians:

The historians included Professor Niall Ferguson, Simon Sebag Montefiore, Dr David Starkey, Professor Antony Beevor and Dr Andrew Roberts.

It would be fair to say that the list includes some of the most right-wing historians currently operating in the United Kingdom. They're entitled to their opinions, as are we all, and I'm not criticising either the holding or the expressing of those opinions. But really, this is hardly an impartially-selected group of scholars expressing a nuanced, scientific opinion on a matter of bald fact.

Nevertheless, as cheerfully as the Telegraph named the historians, so strangely coy is it about the source for their quote: "In a joint letter to a newspaper, they wrote…" Not naming the newspaper, in the Telegraph, is as good as naming it: for to which other paper can they therefore have written than the old nemesis, the Times?

No, Andy Bloxham isn't a Journalidiot. He hasn't been trying hard enough for that coveted accolade. But I needed a good giggle. Thanks, mate.

You read it here first

2011-03-10T14:49:00.003Z

Well, okay, at the ippr, and it's been Ukip policy for a while, and Tim Worstall probably wrote about it too, and some other people have had the same idea. But (drumroll please):

National insurance and income tax should be merged, says chancellor's tax thinktank.
Office for Tax Simplification recommends radical structural change as distinction between national insurance and other levies becomes blurred (src)

Ooh, yes please. I did wonder about bunging a short position piece into the OTS asking them to consider scrapping NI, mostly for the reasons I gave a few days ago. Turns out I haven't had to bother!

A dud giveaway

2011-03-07T14:45:00.004Z

Various news outlets (1, 2, 3) have been running reporting of a CentreForum paper, under the name of Stephen Williams and with what might be euphemistically termed 'assistance' from Portman Capital [1], of a suggestion to give the taxpayer's stake in the part-nationalised banks to each taxpayer. Well, each voter, which is nearly the same right? Except for the taxpayers who can't vote and the voters who don't pay taxes; oh, and the voters who don't vote.

It has to be said that capitalism does work best when we all play. Getting more people to own shares or units in funds and trusts, to be using their laid-aside capital to involve themselves in the economy, is a good thing. But this is rather like convincing people to learn to swim by shoving — or should it be nudging? — them into the deep end of the pool; and the odds are that this pool may have the occasional shark lurking in it. Better to publicise the benefits of learning to swim rather than force people to do it.

And indeed, this plan would be a bureaucrat's dream, and a citizen's nightmare. How do you keep track of partial and full disposals, disposals below the floor followed by re-acquisitions above the floor, disposals by existing shareholders distinct from disposals of allocated shares…? This is, in the words of the FT's Bryce Elder, 'an unworkable proposal' (src).

But ignoring all those issues, the report contains a blinding error of fact which blows most of its democratising contentions out of the water and is recognisable by anyone who owns shares. It says,

At the time of distribution, the shares’ legal ownership will transfer to recipients, and their shares will be held in their name in a nominee account, in line with standard industry practice. As owners, recipients will receive dividends and have the right to vote at Annual General Meetings, giving them a direct role in the running of the banks.

The problem is that standard industry practice for nominee accounts is that the shares are aggregated in a single large account, and apart from in special circumstances the beneficial owners of the shares agree that they won't try to use their shareholder rights. This makes it cheaper to administer the shareholdings, which is arguably of more benefit to a small shareholder in such a very large company than being able to vote would be.

So if 80% of the shareholdings in RBS, or 40% of Lloyds, ended up behind such a wall, then the bank would become completely ungovernable. The Board would be answerable to next to no-one. It is possible that the bank could manage such a situation, but suppose it led to the share price stagnating. Since Williams/Portman propose that the Treasury would claw back some of the proceeds up to a certain price, if the share price never hit the floor then RBS would be effectively stuck: the lack of strong shareholders causing the company to flounder, the floundering dissuading small shareholders from selling their shares, larger shareholders unable to increase their shareholdings to increase their ability to give some direction to the bank.

Little wonder, then, that the Treasury described Williams'/Portman's proposal in a delightfully Sir-Humphreyesque tone as 'a welcome contribution to the debate'. Let's hope that's all it remains.

[1] Lesser mortals might suspect that Portman had a brainwave for getting their name into the media, and caught themselves a live one in a Lib Dem backbencher and CentreForum. But far be it from me to suggest such.

Disclaimer: I directly hold shares, through two nominee accounts, in Lloyds Banking Group.

Why put extra on income tax?

2011-03-02T14:27:00.002Z

In my last post (link), I proposed scrapping National Insurance contributions altogether, and replacing them with a budget-neutral increase in the rates of income tax. What benefits would this have? Let me detail some.

Decreased bureaucracy in employment. National Insurance creates bureaucratic costs for employers and employees, as well as diverting time and resources from more productive activities to accountants and financial advisors. Replacing NI with a far simpler system will result in better resource allocation. This is the chief benefit.
Simple honesty. NI has not been about funding the NHS or pensions since about two years after the National Insurance Fund was founded. General taxation has always been needed to make up a deficit. All we would be doing is making it quite clear that this is the case, and that the welfare state is another part of the government's programme just like the police or international aid. The NHS is enough of a national religion already, without having a nominally hypothecated tax behind it as well.
Increased public awareness. By uncovering the rates of tax that the State is actually levying, public debate around taxation will be far better-informed of the costs as well as the benefits of taxpayer-funded services. Even lefties must agree that a public better-informed about both the costs and the benefits is a good thing.
Lower effective headline rates. A side benefit of scrapping NI and replacing it with income tax is that income derived from financial capital is liable for income tax but not NI. Consequently, scrapping NI and replacing it with income tax will catch savings and (some) dividends as well. The effect is that a budget-neutral replacement would not need the headline rate to rise so high. Frankly, with interest rates so low currently, now is the time to do this since in all likelihood, most savers won't see an immediate difference.
Tilting taxation towards capital. As the preceding point suggests, the taxation of returns would have shifted a little away from labour and a little towards capital. Now, I really don't want to emphasise this point, because it is such a double-edged sword; indeed, the importance of this point is inversely related to the length of the paragraph. After all, enhancing labour with added capital is, in the long run, a very good thing for all of us and we don't want to discourage it. But there can be a couple of reasons for wanting capital and labour to face more evenly-balanced taxation. One is that since markets do not adjust immediately, the speed at which innovations are applied matters: slowing them down without killing them may, in certain circumstances, be justified. But I think that the big one is that in the very technical, taxation-related sense of the word, it is a progressive change: the poorest taxpayers would keep more of their money relative to the richest. That's good for the process of putting more money, and thus power, into the hands of the poorest and thus least powerful, without needing to engage in redistribution sensu stricto. One doesn't have to buy into the thesis that equality is good for everyone to believe that better enabling, or rather not so badly disabling, the poorest and least powerful to bat for themselves and their families is a good thing.

Scrap NI

2011-03-02T14:05:00.000Z

An odd employment situation has put me in the position of having to consider the most efficient way to arrange my affairs with regard to National Insurance. But while I was considering this, I had the misfortune to read the tables which are used to calculate NI liabilities. You can see the horror here (link), and I strongly encourage you to look at them. This is not simple, straightforward, easily-calculated taxation. Here are some reasons why I think NI should be scrapped.

The NI provisions come from quite literally another age. In the Forties and Fifties, many people especially on lower income were paid weekly. Nowadays, payment schedules are very different: for many people, they are monthly, while there are also far more irregularly-paid workers than there used to be. Having a weekly limit, rather than annual limits, catches out people whose pay is not regular and is a hangover from a bygone era.
The provisions are horrifically complicated. Four different classes, numerous different thresholds and rates: how can you work out what you should have paid? I think I can just about make my way through, and I am (thought I say so myself) very numerate. What about people who aren't so well-equipped to handle numbers? Often people with thin personal margins are in that position, one way or another, because they are not so good with numbers. Computers can work out our NI liabilities, but how does someone with less numerical nous tell if there's been a mistake?
The marginal rates are bonkers. Suppose that someone earns about £200 a week, but one week gets a bonus of £1000. It looks to me — and I am having to seek professional advice on this — that rather than averaging the bonus over a period of time, you pay NI on the £1200 as though you got paid £1200 every week, in effect. The curious thing is that because the marginal rate drops again, it looks like this is a more efficient way to get paid than getting the £1000 spread over a number of weeks. The marginal rates are mad (if I've got this right).
The incidences are misaligned. It is well-accepted by anyone who takes an interest in these matters that the burden of employers' NI is, in fact, borne by the employee. (If you don't believe this, consider that employers' NI is a cost of employing someone and the employer doesn't really care whose bank account gets the money: if not the Treasury, it can just as well be the employee.) By charging a separate employers' NI, a part of the burden that the State places on all our incomes is hidden.

I don't propose scrapping NI without replacement. I would suggest that a far simpler and more transparent system is the income tax system. I can't quite work out what the numbers would look like, but estimate that an extra twenty pence on the basic rate and an extra fifteen on the upper tiers would roughly replicate the effect of the NI, without its complications. I shall cover some of the benefits in the next post.

On quantitatitatitative easing

2011-02-26T18:50:00.005Z

Or 'Bimetallism', as the debate used to be in the days of precious-metal standards.

Bimetalism
Ben Bulger was a silver man,
Though not a mine had he:
He thought it were a noble plan
To make the coinage free.
"There hain't for years been sech a time,"
Said Ben to his bull pup,
"For biz—the country's broke and I'm
The hardest kind of up.
"The paper says that that's because
The silver coins is sca'ce,
And that the chaps which makes the laws
Puts gold ones in their place.
"They says them nations always be
Most prosperatin' where
The wolume of the currency
Ain't so disgustin' rare."
His dog, which hadn't breakfasted,
Dissented from his view,
And wished that he could swell, instead,
The volume of cold stew.
"Nobody'd put me up," said Ben,
"With patriot galoots
Which benefits their feller men
By playin' warious roots;
"But havin' all the tools about,
I'm goin' to commence
A-turnin' silver dollars out
Wuth eighty-seven cents.
"The feller takin' 'em can't whine:
(No more, likewise, can I):
They're better than the genooine,
Which mostly satisfy.
"It's only makin' coinage free,
And mebby might augment
The wolume of the currency
A noomerous per cent."
I don't quite see his error nor
Malevolence prepense,
But fifteen years they gave him for
That technical offense.
(Ambrose Bierce, Shapes of Clay, src)

No Dave, no Nick

2011-02-18T16:23:00.003Z

"If you vote for a mainstream candidate who is top of the ballot in the first round, your other preferences will never be counted," [the Prime Minister] said.
"But if you vote for a fringe party who gets knocked out, your other preferences will be counted. In other words, you get another bite of the cherry. I don't see why voters of the BNP or Monster Raving Loony Party should get their votes counted more times than supporters of the Conservatives or, for that matter, Labour or Liberal Democrats." (src)

Now, I've dealt with this issue before (posts passim), but it's only fair to have another bite of the cherry. (Sorry, couldn't resist.) Although actually, I'd like to take issue with the first part of the Prime Minister's statement, which is a new one from the 'No' camp. Because at least in theory, there is nothing stopping the candidate who comes top in the first round from eventually getting knocked out. So although your candidate comes top in the first round, it may still be that eventually some of your other preferences come into play. And even if not, your ballot has played a part numerous times (as I have explained before) in keeping your candidate in the race, which is in many ways nicer for you than seeing your preferred candidates keep getting knocked out of the process. So a supporter of the Big Three will see their first choice stay in the process longer (and thus have a better chance of winning) than someone who only supports fringe parties. To me, that seems completely unproblematic.

In the interests of an ostensibly balanced approach to the question, let me take issue with something the Deputy Prime Minister said as well.

"It is because there are so many MPs with jobs for life that there are so many who can take their constituents for granted,” [the DPM] said.
"And it is because there were so many MPs taking their constituents for granted that so many abused their expenses. When a person is corrupt, they should be punished. When a system makes corruption more likely, it should be changed."

In fact, there wasn't a very strong link between either the majority or the tenure of an MP and their likelihood to have abused expenses, except in the sense that longer-serving MPs had had longer to rack up dubious expenses claims. The original blogospherical study which claimed such a link was swiftly shown to have been a statistical artefact, and no further work, to my knowledge at least, has produced any kind of statistical link between any given property of an MP and their expenses claims.

Of course, in spite of my attempt to be balanced, readers will be aware that I do intend quite strongly to vote 'Yes' in the forthcoming referendum: I am all in favour of widening consumer choice, and cannot see why I should abandon that principle when it comes to the ballot box. It puzzles me that people who share my preference for wider choice are so frequently against changing to a ranked system, while people who tend to oppose wider choice are so often in favour.

Three interesting reads

2011-02-13T20:40:00.004Z

If you want to maintain a blogging career, I have learnt two lessons.

I can recommend a PhD: easy hours, regular pay, regularly thinking about all sorts of things anyway, and opportunities to chat with colleagues thus sharpening arguments and critical thinking are only a few of the benefits.
I can't recommend graduating without a proper contract of employment: working two jobs to keep body and soul in roughly the same location is not conducive to having the time to think up new and interesting things to write about.

However, I can give you a 'Stuff from around about which I have found interesting' round-up.

Andy Mayer at Liberal Vision picks up a very good quote from Nick Clegg. A Deputy Prime Minister who goes around warning that you can't even trust his own government is certainly a breath of fresh air. (src)

Mosab Hassan Yousef writes about the Egyptian response to the West's history of support for their little-lamented former president, and calls on Westerners at the grassroots to engage Egyptians in dialogue. A fair summary might be that we need Egypt to recognise that governments tend to side with governments, but the people side with the people. (src)

[Incidentally, reading a BBC interview by Lyse Doucet with Yousef was a less-than-enlightening experience. According to her, 'devout Christians regard [Jesus] as the son of God.' (src) I would have called that entry-level Christianity, myself.]

Finally, Dave K posts an excerpt from Ed Clowney's book on the Ten Commandments, summarising the commandments and celebrating the forgiveness we find in Christ. (src)

Save our forests

2011-01-29T13:12:00.002Z

By taking them out of the State's hands!

The British-political news this week has mostly been dominated by the government's proposals to sell off parts of the nationally-owned forests. The figures provided are only estimates, but the amount to be sold off is about 18% of the total State-owned estate (src), and sales may be less than that if the Government opts to franchise running of the forest, so retaining ownership but selling the right to profit from the forests for a period of time. It is by no means vast tracts of the countryside about which we are talking here.

Indeed, the figure is even lower when you consider that some two-thirds of the forested land in the UK is already in private hands (src). In short, the Government is proposing to change to private management about an eighth to a tenth of the total woodland area of the country. Suppose that every fear of the campaigners came true relating to this twelve percent: even so, it would hardly denude the nation of its tree cover.

But those worries are ill-founded. Consider that if private owners were to despoil and destroy their woodlands, the State would not own a mere one-third of the nation's woodlands, but that the private woodlands would have shrunk markedly, causing the State to own considerably more than that.

Forests can be managed responsibly by private individuals and companies: the continued existence of privately-owned forests proves this. As with the sale of British Aerospace, there are a few issues which need to be ironed out: then, it was national security; now it is access and replanting. Moreover, it is not being proposed and most of us would not support selling some of the most ancient woodlands which have an iconic, cultural status. Changing their ownership and management from the public sector would be far more tricky and not necessarily obviously a good idea. But the State has no business running or even owning ordinary, run-of-the-mill forested areas. The forests will be safer taken out of its hands.

Independent economics?

2011-01-24T14:58:00.003Z

At the Independent website, Sean O'Grady analyses a column in today's Mirror written by the man who would be Chancellor: Ed Balls (link). Most of it is pretty good once you get past the horrendous typos, but at least one sentence needs picking out as perilously unreliable.

If we do it monetarily, by seeing rates rise, then the biggest losers tend to be the richest – big mortgage holders usually.

This cannot be the whole story. For sure, the richest will have fixed assets purchased through secured credit. But on the other hand, they are often less exposed to interest rates as they are able to fix their rates for longer: secured credit, you see, is better than unsecured credit. So I would suggest that there are two other groups, who suffer negative effects and whom it is more worth considering here than the property-rich.

The first is the other end of the wealth distribution. The richest may have more debts, but as a rule on more favourable terms. The absolute poorest are in negative territory in balance sheet terms, and on the worst terms imaginable. Rising interest rates will hurt the poorest very hard. I would not like to speculate about the relative impact, but I would not so lightly dismiss the fact that there are a lot of people who are over-extended after the easy credit of the last decade. One may object that to a great extent it is their own fault, and I would be inclined to agree; but if we are going to do a distributional impact analysis, let us at least do it properly.

The second group is businesses, especially the small businesses about whom it is so often said that the banks will not lend to them. Rising interest rates will make such lending even less likely. And while business owners will suffer, so also will labour, through squeezed wages and frozen recruitment. Indeed, the Bank of England suggests that the share of profits between capital and labour is about 70-30 in favour of labour: if this is anything like a close estimate of the marginal rate of profits sharing, then labour will bear the majority of the pain in any interest rate hike. So higher interest rates (probably) hurt workers rather more than business owners. (And when was the last time a trade union pointed this out?)

Actually, neither of these stories is entirely right. Higher interest rates are not an alloyed good or bad: they would slow inflation down at the same time as slowing down the economy. The interest rate decision is a trade-off, and this is why I am not convinced that a price-guiding authority like the Bank of England is a good idea. But since we have one, let us at least acknowledge that their job is rather difficult instead of having a Shadow Chancellor who is set on undermining their role by ignoring interest rates whatever the cost.

How to make capitalism less efficient

2011-01-17T16:45:00.003Z

Proposals by the European Commission to ban execution-only services will drive up costs and limit choice, a trade body has warned. (src)

The distinction is between advisory brokerage, where people buying stocks and shares do so through an advisor (perhaps an IFA or a bank) which offers them advice on how to allocate their money and sometimes even manages the funds directly, and execution-only service, where the punter makes their own mind up, does their own research and takes on their own risks. Clearly the latter is cheaper, but it is also in many regards more responsible: that's no slight on IFAs or their clients, but an observation that taking hold of your own pension pot or ISA can be a liberating thing. I should declare an interest, as it is the model I follow for my own investments.

To be clear, this is not another 'straight bananas' Euromyth: there is a consultation document out there which contains this proposal. There is, though, a bit of politics. Some commentators suggest, and with good reason, that the rather bare presentation of this option as an alternative to a somewhat saner, if still fairly onerous, form of regulation is the Commission's way of setting out its preference with a nuclear option in full view in case the financial services industry does not comply. This sounds like a classic government strong-arm on the consultation, but nevertheless the Commission is probably, currently, less convinced about an outright ban on execution-only than it appears.

Nevertheless, execution-only needs to be defended, not least because some people will spy an opportunity to increase the monies which the financial services industry can manage. Although it is not a large part of the market by weight of money, it will account for many investors and particularly, many poorer investors. If we want a world where people take responsibility for their own financial arrangements, we need to have cheap ways for poorer people to access the most effective forms of saving and investment. An advisory service is beyond the reach of many people, and the FSA seems hellbent on making it more expensive yet.

Positively, some people with lower personal net worth find that they are entirely able to investigate and decide on the various options which the markets present them with, and invest their own money. Speaking from experience, I would say that they can even find they enjoy the process of research, analysis, assessment, making their own decision and bearing the consequences. Cutting them out of the markets because they do not go through government-approved channels (nor pay for the privilege) is a regressive step.

An easy sentencing decision

2011-01-12T08:50:00.000Z

MP Eric Illsley is under pressure to stand down after admitting he fraudulently claimed more than £14,000 in parliamentary expenses. … If Illsley receives a prison term of 12 months or more he will be disqualified from being an MP under the Representation of the People Act 1981. (src)

I await the sentence with interest. My own choice is really very simple: twelve months and a day. Even if the day is formally unnecessary (and the BBC's journalists appear uncertain on that point), it will make him wear the fact of having pleaded guilty without resigning.

However, it does seem wrong that a judge, and not the electorate, should hold the power of calling a by-election. In Barnsley Central, of course, it will simply be a chance for the voters to install their next Labour MP, but all the same a proper recall mechanism is needed so that MPs can be held to account by their electorates, and not simply by judges. The government's recall proposals go a little way in the right direction, but even they leave much to be desired.

Well done, that man

2011-01-11T09:15:00.003Z

There is a Telegraph article about Google Goggles, which does OCR on a variety of different things, and has been programmed automatically to solve Su Doku puzzles. The opening sentence:

The days of Sudoku could be numbered, thanks to Google. (src)

Well, yes, I think Su Doku's days were always numbered…

(I'm waiting for a Google app which can do OCR and automatically solve cryptic crosswords. That'll take proper artificial intelligence.)

Did the Tories really not decry the deficit?

2011-01-10T14:13:00.002Z

It's common to hear pundits saying that the Tories didn't say enough about the structural deficit before the banking crisis. And perhaps that is true. But it is certainly not true that they said nothing, as a few of their sterner critics allege. The following article from the BBC News website in 2006 makes that abundantly clear:

Shadow chancellor George Osborne said Mr Brown had "buried" the fact that he had downgraded his growth forecast for 2008. The chancellor's budget would leave the UK with the largest structural deficit of any major European economy, he added. (src, via)

It is also interesting to note that Gordon Brown was forecasting a budget surplus of £14bn by this year. A rather different outturn, of course, but I would challenge any Labour supporter who still thinks that Brown was not running a deficit to read what he himself was saying in 2006. He changed his tune in 2008, of course, and lied prodigiously about his history thereafter — I say lied because he must have known he was running a deficit before the crash but refused ever to acknowledge this — but he was running a deficit all the same. And even he recognised that running a deficit was not desirable at the time, as his crowing about a potential surplus shows.

Understanding the Tory right

2011-01-03T22:07:00.003Z

It's a common enough mistake among left-wingers. Life is too short to acquaint yourself with all the various factions in the Tory party, I know. But it really isn't too difficult to get this one right. I would say that it is entry-level political analysis, given that the main movers and shakers have been so important in recent British political history. Owen at The Third Estate writes, of the prospects for a Tory-Orange Book Lib Dem merger,

So where would all the disillusioned Thatcherites go? (src)

He suggests UKIP, but of course this is the wrong answer. The correct answer, for Thatcherites, is that they would have to go nowhere. They could stay, quite cheerfully, in a Tory party which had taken on board characters like Clegg, Alexander, Laws and Browne.

The clue, if you need one, is in Mrs. Thatcher's appropriation of Prof. Hayek and her approbation of Mr. Gladstone, and in the fact that Michael Portillo and Alan Duncan are arch-Thatcherites. Does anyone seriously think that either of them would be significantly perturbed by David Laws or Jeremy Browne joining the Tories? A figure like John Redwood may disagree with them on social matters, but the Redwoods of this world care very little for social policy anyway.

No, the people who would really be put out are the populist, illiberal, Taliban tendency. The Cornerstone Group is a congregating point for the 'nasty party' species of Tory, although the group is mixed with some who are less objectionable (e.g., the aforementioned former Secretary of State for Wales). Nevertheless, if you think of Philip and David TC Davies, Nadine Dorries and Philip Hollobone, you won't go far wrong. You know, the sort of Tory who thinks that bringing back hanging is far too liberal a policy or that our policy on Europe should be open nuclear warfare. They are the ones who would find their position difficult to sustain. And who would mourn their departure?

Compare and contrast

2010-12-30T22:13:00.003Z

It looks to me as though the Chancellor of the Exchequer has been moonlighting as an actor, playing Edmund Pevensie in the Narnia films:

It must be all part of the efficiency drive to send senior government ministers out to earn a few bob. And he did wonders with his voice for the part. Why he uses the other one for politics, I'll never know.

Shock news from a nef fellow

2010-12-24T16:35:00.004Z

This is Ann Pettifor in the Guardian in October:

In other words, pensioners, savers, companies, households and individuals are lending to the banks. (src)

Yes, she really has just told us all the shock news that savers are lending to banks. As though this was never the case before the credit crunch!

The reason Lib Dems stay in post

2010-12-21T20:11:00.003Z

After Norman Baker's high-profile wobble, Vince Cable totters (src), but ultimately carries on. I can't be alone in thinking that all these Lib Dems are hanging on simply because David Laws isn't yet able to take a place back around the Cabinet table.

After all, suppose that he were available to replace Vince Cable. What would a former vice-president of JP Morgan and head of a currency desk at Barclays know about business and the City? And quite how quickly do you think they'd have been able to make a new sign for the Secretary of State's door?

Thinking of the chilluns

2010-12-20T21:41:00.003Z

If patriotism is the last refuge of the scoundrel, I strongly believe that 'the children' must be the first. Whenever some imbecile wants to do something imbecilic, they always wheel out 'the children' as their justification. For example, here is how Miranda Suit of Safer Media defended the proposal to force Internet Service Providers [1] to make accessing pornographic materials an 'opt-in' rather than an 'opt-out':

What we are talking about is censorship to protect our children (src)

Now, I can see how this idea might appeal to the Cameroon tendency in government: indeed, it came from Ed Vaizey, who is very much in that political circle. It structures choices so as to dissuade people from pursuing a particular activity [2], without completely depriving them of the option. This is so-called 'libertarian paternalism', in the sense that it is neither very libertarian nor very paternalistic.

But it is also fatuous, and for two reasons. Firstly, because of the appeal to 'the children', which should mean almost immediate exclusion from the debate. Practically any lunacy is justified 'because of the children', and the state is interposed where parents would often be better placed.

Secondly and more importantly, though, is the simple fact that if it is technically feasible then there is no bar to this being done already. Why shouldn't Safer Media put their money where their mouth is, and set up an ISP? They can implement all the blocks they want, and will probably charge a slightly higher fee. Parents who want the service can buy it, and people who don't want it (or, which is the same thing, don't want to pay for it) don't have to. No coercion necessary, no force of law, no structuring of adults' choices. Only a freely-offered product which can be freely chosen or not chosen.

The difficulty is that campaigners don't see the world like this. The option they reject is Gandhi's wonderful description of 'being the change you want to see in the world'; the option they choose is enforcing the change by the law. I would prefer it if they tried to persuade us through the ordinary processes of everyday life, rather than through the peculiar process of politics.

[1] For Apprentice fans, you will notice that I know what ISP stands for, and the CEO of Viglen doesn't. Go figure.
[2] Perhaps I should clarify that I'm hardly banging a drum for the use of pornography, as regular readers will understand. Defending a political or civil right to do something is not the same as assigning it moral, aesthetic or cultural value.

Don't knock the Dawn Treader!

2010-12-16T12:54:00.001Z

One of the criticisms I keep seeing from Christians in the States about the new film (which I am hoping to see in a few days, so I'll shut up soon) is that Eustace's change comes after he does a load of good stuff to help people, beating a sea monster and the like. And they suggest that this changes Eustace's transformation from being an act of Aslan's grace for a penitent dragon into a works-based salvation.

I'm not convinced they've read the books recently. For if they had, they would recall what Lewis had written:

It was, however, clear to everyone that Eustace's character had been rather improved by becoming a dragon. He was anxious to help.

Lewis goes on to paint a picture of dragon-Eustace finding and despatching wild animals as food for the ship. He brought back a 'great tall pine tree' for use as a new mast. He was an excellent hot water bottle, and a very good means of transport for scouting parties. In short, it sounds as though the film is actually quite true to the book in painting a helpful dragon-Eustace who learns to enjoy being sociable and useful, rather than a 'useless Eustace'. If there is any squabble to be had on this, and I think there is not, then it must be had with Lewis and not the studio.

It may be possible to knock Voyage for other reasons. In fact, I rather fear it will be all too easy to do so. But in reality, this isn't one of them.

Three reasons to love the Dawn Treader

2010-12-15T20:54:00.004Z

The latest in the series of the Narnia films, Voyage of the Dawn Treader, is released in the UK today. With all the kerfuffle over whether they have made a reasonably faithful adaptation, or whether the film-makers have eviscerated a lovely story, I thought I might write a little about why the book is one of my favourites; indeed, probably my favourite of the seven. I should warn you that this is replete with spoilers.

The first thing I would point to is that Dawn Treader is basically a story of the Christian life, and the main character is, indubitably, Eustace. He is, after all, introduced immediately to us, with the immortal line, 'There was once a boy named Eustace Clarence Scrubb, and he almost deserved it.' And just as the book's title names one voyage, the book's plotline really details another voyage: that of the boy thus introduced, and of whom it was said in the concluding sentence, 'everyone soon started saying how Eustace had improved.' Not that Lewis is sentimental about the change in his main character. He writes,

It would be nice, and fairly true, to say that "from that time forth Eustace was a different boy". To be strictly accurate, he began to be a different boy. He had relapses. There were still many days when he could be very tiresome. But most of those I shall not notice. The cure had begun.

The change, of course, which was effected in Eustace is one only available at the hand, or more properly the paw, of Aslan, one which is not pleasant but is deeply necessary, and one which to boot comes with some heavy baptismal imagery.

So there is my first reason for loving Voyage: Eustace's voyage, and the things it teaches us about our own voyages.

The second thing I would point to is the solid and noticeable presence of Christ throughout the book: the more Aslan a Narnia book has in it, the more I love it as an almost certain rule. One of my favourite scenes from the whole of Narnia is found in Voyage, after Lucy reads 'a spell "for the refreshment of the spirit"':

She said, "That is the loveliest story I've ever read or shall ever read in my whole life. … I must remember it. Oh dear, it's all fading away again. … It was about a cup and a sword and a tree and a green hill, I know that much."

And she pleads with Aslan, who promises to tell that story to her for years and years to come. What story might it have been?

That is easily answered, for at the end of the book they meet a Lamb, who has prepared a breakfast of fish for them. (Remind you of anyone?) And they look to the Lamb, and soon see the Lion, who tells Edmund and Lucy that they are to learn to know Aslan by another name. The book makes it plain, plainer than in any other book, that this character we meet in Narnia called Aslan is intended to be none other than the Christ we know in this world. That is my second reason for loving Voyage.

And my third reason is for Lewis' wisdom. The major example, which has always stuck with me ever since reading it, is the words of Ramandu, the retired star:

"In our world," said Eustace, "a star is a huge ball of flaming gas."
"Even in your world, my son, that is not what a star is, but only what a star is made of."

To this scientifically-trained mathematician, more prosaic than poetic, it is an ever-present reminder of the limits as well as the strengths of my own vocation.

Labour shadow minister opposes redistribution

2010-12-13T10:43:00.002Z

John Denham has managed to see the light:

"It's a con, that's the trouble. I mean if it was new money going to the poorest pupils then I'm sure we'd be very pleased about it," he said. "But this is money that's already in the education budget simply being redistributed, robbing Peter to pay Paul." (src)

Well, okay, so maybe he wouldn't quite put it the way I did. But he's cutting off his own wider political position here: if redistribution is bad, then he's in real trouble. Because in the broadest sense, there is never any such thing as 'new money'. Money is always diverted by government from one activity or pocket into another, and is thus always redistributive. If Denham opposes all forms of redistribution, all forms of 'robbing Peter to pay Paul,' then hasn't he just admitted that Labour should stop bothering with politics?

Education policy

2010-12-11T12:39:00.004Z

A few thoughts for a Saturday morning, after the tuition fees vote and the debates in the country.

Read a "contented Lib Dem" (link), a blog I was pointed to by Tom King. The author is clearly thinking hard about government policy in this area and well able to explain and defend it, using both good argument and good evidence. It's very warming to hear a Lib Dem defend policies in terms which make it clear that the author is definitely no soggy social democrat. The blog has been added to the blogroll. (I find it interesting that the party-political blogs I put on the roll are almost always Lib Dem. Psychological analyses of this phenomenon are welcome in the comments.)
Why are the media so bothered about the Lib Dems' "three way split"? The Tories had a three-way split, although not a very big one. In government, Labour had numerous three-way splits. Surely — dangerous question though this is — the Lib Dems are not bound together by a collective brain cell?
It's a shame Norman Baker decided to vote with the government after all. I found myself hoping David Laws had some sort of an interest in trains.
The Lib Dems Chris Huhne would have voted for and Martin Horswood against had they not been in Cancun for the climate change conference. So they basically agreed to stay away since they would only have cancelled each other out anyway. Who says the pairing system (wiki) is dead? Although pairing within a party is certainly a novel approach to take.
Although I supported the tuition fees policy fully, I was somewhat heartened that some government backbenchers are willing to rebel this early. Even as a present supporter of the Coalition, I recognise that we need potential rebels, because no government is guaranteed to do the right thing forever.
Alan Johnson changed his mind recently, and declared that there was 'a strong argument' in favour of a graduate tax. The only strong argument I can think of is Ed Milibland threatening to sack him if he doesn't do what he's told. Internal party democracy is a wonderful thing.

Where is liberalism today?

2010-12-03T13:15:00.003Z

Frank Furedi gave a very good interview to the Independent on Tuesday about the state of liberalism in the modern West, with particular reference to the UK. He says,

Back in 1935, George Dangerfield’s The Strange Death of Liberal England attempted to account for the decline of the British Liberal Party. Today it’s not simply a liberal party that’s become marginal, but the fundamental ethos of liberalism itself. (src)

But that's not the best bit. I encourage you to read it all, and especially his answer to the question about the difference between moralism and a moral stance.

The definition of grim irony?

2010-12-01T12:27:00.003Z

At the Speccy's Coffee House blog, Daniel Korski relays news from the Guardian about anti-cuts campaign UK Uncut, that

In a sign of UK Uncut's expanding popularity, they have secured the backing of the Jubilee Debt Campaign, and of War on Want, two mainstream anti-poverty campaigns with almost 30,000 supporters between them. (src, via)

Korski suggests that as charities, these organisations should not be supporting a political campaign. This is actually a grey area: charities ought not to be partisan, but often their campaigns require calling for some political action.

However, I think there is a clearer reason to be highly disappointed by the Jubilee group's support of deficit denialism. The campaign grew out of a justified desire to see a lower burden on third world countries which were struggling under unsustainable debts. In the UK, we are by no means as badly off as the countries Jubilee sought to help, but nevertheless it is rather distressing that a campaign founded to oppose high debt (and therefore deficit spending) in the third world is opposing attempts to tackle public deficits in the first.

The Taiwanese take on Ireland

2010-11-30T19:01:00.004Z

Taiwanese animated summaries of news events have become something of an Internet meme. Naturally, this makes me reluctant to post them here. However, one which was produced on the Irish situation made me laugh for one good reason: watch out for the entirely gratuitous Father Ted reference at the end.(For those who aren't aware of the reference, you can see the relevant scene here.)

The left-wing case against the welfare state?

2010-11-24T15:49:00.004Z

Reuben Rosenberg at Third Estate makes a point, a very salient point, in attacking Nick Clegg's defence of government policy. Clegg pointed to NHS spending as an example of spending which goes mostly to poorer people and thus mitigates the effects of benefits cuts. Rosenberg writes,

The point, however, is that in this society, cash is special: It does not merely contribute to somebody’s material well being but confers a crucial degree of autonomy upon the individual, enabling them to excersise [sic] a bit of control over their day to day existence. Somebody trying to live on £200 a week in London will lack such autonomy, even if they enjoy access to a good library and hospital, and their neighbourhood is well policed. (src)

He is quite right: cash is special, because autonomy matters. Spending decisions which you make for yourself, with advice and help where appropriate, are generally better than decisions made by someone else for you. So why not roll up the welfare state, lock, stock and barrel, into a single cash payment to be used as the recipient sees fit?

So if you would prefer to supplement the portion of the money which used to be 'NHS' with some of your own for you healthcare then you have that choice. Or maybe you want to go cheaper and put the money into a pension or use it to save up for a house. I don't know about you, you don't know about me, and no-one in Westminster or Whitehall knows about either of us. By making the spending decision on all our behalfs, the government does not allow us the personal financial flexibility and power over our own lives which Reuben clearly wants us to have.

Of course, the government is not proposing this as a plan of action. But the Universal Credit is a weakened form of this thinking applied to other areas of welfare, and thus the same argument applies to it as to the idea of giving us our own NHS budget back. In other words, Reuben's argument against Nick Clegg's defence of the government's policies leads us, I would argue, to a deeper appreciation of what the Coalition government is aiming to do with its benefits policy and also a better understanding of how it could, and perhaps should, go further.

A handy hint

2010-11-20T10:35:00.004Z

After downloading a programme to watch through the BBC's iPlayer last night, I noticed that my computer had mysteriously lost a lot of free hard disk space over the past few months. I just spent the morning weeding out a load of programs (games, mostly) that I no longer use and freed up about 10GB before finding, on going to defragment, that the culprit was in fact none other than iPlayer itself.

It stores videos in 'My Documents\My Videos\BBC iPlayer\repository\', and I found 11.8GB of old television programmes lying around which iPlayer had decided it wasn't going to bother deleting. I couldn't watch any of them, of course, but that did explain the mystery of the disappearing hard disk space, and they were deleted forthwith, with no ill effects on iPlayer's running. If you're watching telly through iPlayer, it may be worth checking that it hasn't done the same thing to you.

[EDIT: Thanks to Mr Potarto in the comments who recommended a slightly different piece of software, I discovered Scanner (link), which is an absolutely tiny bit of freeware. It tots up and displays your folders in their various sizes on a 'sunburst' chart, kind of like a pie chart but then with sub-folders displayed at higher radii. I squeezed another 8GB out by using it to find my large folders and then deciding what I could painlessly lose.]

That picking winners thing

2010-11-17T21:55:00.002Z

I'm currently reading Ben Graham's Intelligent Investor, and he makes the point, not often enough made, that even expert businessmen and financial analysts are not always able consistently to pick winners. The application to government's inability to pick winners should be obvious: if the experts cannot be consistent, what hope politicians?

Today, as if we need it, here is another example, courtesy of the BBC:

Millions of taxpayers' money has been funnelled into projects that did not seemingly take on board the the fact that hydrogen power would remain costly and polluting for some time to come. (src)

I could have told them that. But government is government, and politicians are not exactly the world's experts at running businesses. (If they were, they'd be doing that, rather than politics.) Of course government can pick winners, in much the same way as a stopped clock can be right. But in neither case would you triumphantly declare that the mechanism was in sound working order. Better to leave the picking of winners to people who are risking real money, often their own: they still get it wrong from time to time, but there is a very great incentive on them not to.

The world, gorn mad

2010-11-15T21:42:00.003Z

Pestowire can exclusively reveal that:

Britain's biggest banks are talking to each about whether and how they can reduce the total amount of bonuses they would pay in the upcoming bonus season. (src)

Left-wingers will, no doubt be jumping up and down with glee. But wait a minute, isn't this a conspiracy of capitalists to deprive the workers of the fruits of their labours? Isn't this akin to the kind of thing Smith had in mind when he warned about men of a business meeting together? I mean, I don't mind all that much: I hold shares in a British bank and wouldn't mind more of the earnings staying my pocket rather lining a banker's, if all else remains the same. But I predict that you will find the unions fighting the capitalists' corner on this one against the employees. A curious alliance, if ever there was one.

Meanwhile, in better news, Unilever has announced that it will be putting social and environmental responsibility at the heart of its agenda (src). Of course, it is probably fair for people to file this in the "Believe it when I see it" category, but nevertheless it is encouraging to read ideas like:

change the hygiene habits of 1bn people in Asia, Africa and Latin America to help reduce diarrhoea – the word's second biggest cause of infant mortality. Unilever will push sales of its Lifebuoy soap brand and teach consumers when to wash their hands to achieve this aim.

As a shareholder, I quite like the idea that my company will be making a profit by helping people to live healthier lives. It's a better way to earn a crust than killing them, that's for sure. But there is a section of society which is fundamentally opposed to turning a profit. Yes, it's the staff, and some of the foaming below-the-line commentators, at the Guardian. In Guardian-land, it is wrong to profit from killing people and it is wrong to profit from helping them to be healthier. Of course, in Guardian-land it is also wrong to make a profit selling newspapers, which explains an awful lot about their corporate accounts.

Nevertheless, soap manufacturers need to make money somehow too. Better, surely, to have stable companies which promote good hygiene and make a reasonable profit (where reasonable is defined in the market, not by the Guardian) by producing and selling products which contribute towards that goal. Funny, how profit is often a motive towards doing the right thing. If I were at the Guardian, I wouldn't complain too hard. People might just become bankers, instead.

A spiky view on creation

2010-11-14T21:00:00.001Z

Spiked is not a magazine brimming with love for Christianity or the view of the world which Christians have. However, it can come up with some really quite surprisingly 'Christian' descriptions of some things. Brendan O'Neill, for instance, writing about the old Malthusian error (to which, proving that Christians have ever been wont to get things wrong, Tertullian was an adherent) and its deeply anti-human view of humanity, says this:

This popular depiction of mankind as gorging on nature’s fragile resources is not actually based on scientific fact or hard proof of widespread resource depletion. That is clear from the fact that even water is now included in the list of resources we should use rarely and sparingly – only a mad person could believe that water will ever run out. No, this view is based on a profound, philosophical shift in our attitudes towards ourselves, a shift from viewing humanity as the tamer of the planet and the creator of society, towards viewing humanity as a plague on the planet and the destroyer of our surroundings.
It is a spectacularly one-sided view of people. Because we don’t only use resources; we also create them. We are not only consumers; we are also producers. In fact, I would argue that we have realised the potential of this planet. Without us it would just be another ball spinning through space stuffed with useless coal and pointless uranium. We extracted that coal and uranium and made something amazing with it: modern human society. We created the social conditions in which the Earth’s resources could be used to their full potential; we created the means for extracting and transforming those resources; we created cities, workplaces and homes on the back of those resources; and every time, we managed to get more and more stuff from fewer resources and created new resources along the way. (src)

It is couched in a lot of the language of the modern atheist, but the idea is as old as Genesis itself: 'Fill the earth and subdue it.' It is a part of human nature at its deepest and oldest to shape the earth from something wild and unruly into something useful and beautiful. For sure, we get it wrong: Genesis 1 is followed by Genesis 3, after all. But we still carry out, in a flawed way, that original mandate as we develop the earth with respect for its own integrity. And as we turn the earth's naturally-occurring substance into useful resources, we are doing what was intended, not despoiling what was perfect. It was 'very good', but it was not unsusceptible of improvement: that was the purpose of humans.

As I say, Spiked is hardly an in-house magazine for Christians. But even an old revolutionary Marxist turned techno-libertarian, it seems, still relies on the cultural legacy left by generations of people who believed that we have been made stewards of the earth, to improve it. It would be nice if people in the church realised the assonance between the cultural mandate and this positive vision of humanity's influence on the earth, too.

Reformed catholicity

2010-11-14T08:28:00.000Z

It is often said that the old joke, 'Is the Pope a Catholic?' was the live issue during the Reformation. Charles Hodge, replying to a general invitation from then Pope Pius IX to a council, explains why it was then and is still now the view of catholic Reformed Christians that the Pope is not catholic. Here is a taster; you can read the whole thing at the Banner of Truth website (src, via):

To Pius the Ninth, Bishop of Rome,
By your encyclical letter dated 1869 you invite Protestants to send delegates to the Council called to meet at Rome during the month of December of the current year. That letter has been brought to the attention of the two General Assemblies of the Presbyterian Church in the United States of America. Those Assemblies represent about five thousand ministers and a still larger number of Christian congregations.
Believing as we do, that it is the will of Christ that his Church on earth should be united, and recognizing the duty of doing all we consistently can to promote Christian charity and fellowship, we deem it right briefly to present the reasons which forbid our participation in the deliberations of the approaching Council.
It is not because we have renounced any article of the catholic faith. We are not heretics. We cordially receive all the doctrines contained in that Symbol which is known as the Apostles' Creed. We regard all doctrinal decisions of the first six ecumenical councils to be consistent with the Word of God, and because of that consistency, we receive them as expressing our faith.

Nobel prizewinner backs Browne?

2010-11-13T10:12:00.004Z

Andre Geim, one of the UK-based physicists who shared this year's Nobel in physics for synthesising and studying graphene (wiki), was interviewed for this month's issue of the Institute of Physics' house publication, Physics World. In the context of the debates about university funding and the response of academics as well as students, I think it may be worth hearing what a Nobel-winning physicist has to say about the place of research and teaching. Geim comments,

The system puts pressure on vice-chancellors to appoint people who are good at research and then teaching becomes a secondary issue. … This forces people who are great teachers — who would rather teach a hundred percent of the time — to try to do quasi-research or whatever it takes. …
An immediate and possible solution is to remove incentives for low-ranked universities [in research terms, presumably–PJW] to do research. Instead, such universities need incentives to concentrate on teaching. We should make it economically devastating for such universities to do research. … I do not have any disrespect for people working in low-ranked universities. Indeed, good people working at such universities could benefit from such reforms. People who want to teach could remain, whereas people who want to do research and are good at it would be able to move to top universities to take advantage of greater opportunities there.

I think that this is all absolutely spot-on as an analysis of the way the academy's structure is misaligned, and of course it is exceptionally sound economics. Universities should play to their (comparative) advantages. In some, research is easier to produce than in others: so they should be research-led while others should be teaching-led. Presently, the system tries to squeeze every university into a single mould: the output and incentives for research correlate much more strongly, and are remuneratively, then the teaching quality. Only by encouraging universities which want to focus on teaching to respond to student needs, and by staking teaching funding on teaching quality, can the system be placed on a sounder footing.

When anarchism isn't

2010-11-10T22:21:00.004Z

I notice that at today's spectacle (Streets of Paris, showing in London for one day only), the anarchists were out in force. On some television news reports, the sprayed 'A' could clearly be seen on a building, and the presence of young men in black masks destroying the property of others is normally a dead giveaway.

Well, I have a fairly simple confusion, which I'm sure someone can clear up for me. Anarchists are against any and all rulers, including the state. So why are they protesting about government cuts, and protesting in favour of state spending? A proper anarchist, surely, would be rubbing his bomb-throwing hands with glee at the prospect of decreasing the size of the state by whatever means possible. Relatedly, surely the Socialist Workers, alongside whom the anarchists were protesting, must be every bit as offensive to them given that socialists are really very keen on authority structures generally and the state quite particularly. Yet the government, committed to making the state spend less, is attacked while the socialists, committed to making the state vastly bigger, pass untouched.

Or perhaps they're not really anarchists at all; just your common-or-garden anti-police thugs spoiling for a fight?

Honourable members

2010-11-09T11:10:00.005Z

I have been meaning to post a list of names for a while: a call of honour, if you like, for the government backbench rebels who voted to force the government to reduce the payroll vote at least in line with the reduction in the number of MPs. (The vote was on the 25th of October.) There were twenty-one rebels: twenty Conservatives and (can you believe this) a single Liberal Democrat. Most of the Tories were what you would call the usual suspects: Carswell, Brady, Davies, Tyrie and so on, but there is at least one high profile new recruit to the benches, Zac Goldsmith, who plucked up the courage to defend the backbenches against the front. The full list is:

Steven Baker (Wycombe, Con)
Peter Bone (Wellingborough, Con)
Graham Brady (Altrincham and Sale West, Con)
Douglas Carswell (Clacton, Con)
Christopher Chope (Christchurch, Con)
Philip Davies (Shipley, Con)
Michael Ellis (Northampton North, Con)
Mark Field (Cities of London and Westminster, Con)
Zac Goldsmith (Richmond Park, Con)
James Gray (North Wiltshire, Con)
Philip Hollobone (Kettering, Con)
Bernard Jenkin (Harwich and North Essex, Con)
Anne Main (St Albans, Con)
David Nuttall (Bury North, Con)
Mark Reckless (Rochester and Strood, Con)
Peter Tapsell (Louth and Horncastle, Con)
Andrew Turner (Isle of Wight, Con)
Andrew Tyrie (Chichester, Con)
Martin Vickers (Cleethorpes, Con)
Charles Walker (Broxbourne, Con)
Adrian Sanders (Torbay, LD) (src)

The government's line of defence was that the motion would only force them to do something which they intended to do anyway. Why this was an argument against passing the motion, instead of in favour of passing the motion, I could not quite see. It was defeated by a reasonable majority (290–238), but this was the biggest rebellion the government has yet faced, and on one of the right issues.

The House of Commons can easily be smaller: Germany has 622 seats for a population of about 80mn, France has 577 for about 60mn, Italy 630 for about 60mn, and the US of course has 435 for about 310mn. So a reduction to 600 is hardly a great assault on democracy in itself. However, the positive developments in parliamentary democracy have always been a story of asserting parliamentary sovereignty over the executive, whether that executive was monarchical or democratic. The size of the government payroll must be reduced at least in line with the reduction of the House of Commons, and good for the twenty-one government backbenchers who were willing to say so.

Ooh, I can solve this one

2010-11-04T15:53:00.004Z

The ~~Chief Exec~~ (ed: Chairman) of Redrow, a listed housebuilder, made the headlines today by blogging out loud during his AGM. He gave investors an ear-warming over practically everything from banks to governments, blaming them for problems in the housing market. I can, however, exclusively suggest an alternative. He said,

Every week we are forced to turn away potential purchasers simply because they do not have a deposit of 25% or more; people with excellent jobs who under normal circumstances would easily qualify for a mortgage. (src)

Here's my suggestion: if people can't afford houses at current prices, maybe they need to be cheaper.

Not what the bosses of housebuilders want to hear, I guess — and hopelessly unrealistic given that what really costs is planning permission — but all the same, that really is the only long-term solution. After all, even a 5% deposit on the average house now amounts to about £10,000, and a more reasonable figure of 15% is about £30,000. So how about it? Reform planning permission and make housing cheaper. Someone? Anyone?

Overheard

2010-11-03T10:35:00.003Z

Regular readers will know I work in a university. You get to hear some of the ground-level opinion on things from students, including about tuition fees. One student I heard asking his seminar leader to be allowed to change group one week because he was attending a march in London against higher fees. Another commented, "£9,000 a year [tuition fees for Oxbridge]? It's not worth it!"

Perhaps not. But if it is not worth it, it isn't worth it whether you are the one paying (eventually) or whether it is other taxpayers whom you are forcing, through the political system, to pay for it. I could understand someone saying, "It's worth it but I cannot afford it: someone else should pay." [1] However, that was not the position being taken. If you believe that the cost of a degree is not worth it and deduce that someone else should pay for you, surely that is not a position which is morally tenable.

[1] I would understand, but disagree. You don't have to have been here long to know that, as a graduate with a student loan of my own, I support the principle of graduates paying for their degrees.

Pentaerythritol tetranitrate on a (freight) plane

2010-10-30T18:20:00.003+01:00

When it comes to matters of security and intelligence, it is hard for me to believe in coincidences. Nevertheless, in this instance I suppose we ought: a couple of days ago, bosses at both British Airways and the British airports operator, BAA, were commenting on the unnecessary and intrusive security measures which have been progressively introduced at our airports, ostensibly to make us, the travelling public, safer.

On Friday's Any Questions?, responding to these comments, Peter Hitchens was deliciously fulminatory in tone, attacking the security-political complex (my term, not his) for its desire to impose ever greater burdens on us and ever more demeaning procedures, all in the name of counter-terrorism, but which in truth cause more terror and do more harm than a bunch of beardy nutters [1] ever could. It was the very first question, and his was the very first answer: I recommend you listen to it, if you have not yet (link).

We awoke this morning to hear that a plot to blow up planes by putting bombs through the international post had been foiled (src). (The addressee was a synagogue in Chicago. We can only presume that a plan to post bombs to synagogues in Manchester was called off after the plotters realised that it was 50-50 at best that the Royal Mail would not deliver them to a mosque by accident.) Is this a reason to discount the opinions of the airline and airports chiefs?

Not at all. The intrusions remain as intrusive, and the pointless inspections remain as pointless. Most of these plots are foiled long before they arrive at the airport: only a tiny proportion actually get to the screening section of the terminal. I would hazard to guess that of the proportion of plots which get to the airport, a comparatively large proportion get through, precisely because all the real work is done before plotters get to the airport.

In other words, the security measures at airports are more for show than for safety. And what do they show? Police with submachineguns don't make me, or most British citizens, feel any safer: almost uniquely in the Western world, we prefer our police to be unarmed. And 'porn scanners', which can electronically strip-search someone without removing any clothes, are not devices designed to enhance human dignity. No, the show is a show of force by the security-political complex over the public at large. The greatest irony, perhaps, is that by locating all our security in an overweening state, we destroy all our security by placing all those eggs in a single basket. Security policy at present is anti-democratic and illiberal, and we should be clear in saying so.

And just as with previous plots, so also with this one. How was it foiled? By a tip-off to an SIS officer from a local, and presumably trusted, source (src). Not by scanning every piece of ail which passed through the border. Not by trying to listen to every conversation in the Middle East. Not by any of the high-profile and intrusive measures which our lords and masters wish to use, but by good, old-fashioned intelligence work, cultivating sources, using assets, assessing tip-offs, and acting sensibly.

I much prefer the old way of keeping us safe over the new way of putting us at the mercy of the government.

[1] Having realised this could be ambiguous, I should clarify that I do not mean the Liberal Democrats. Although until May, no-one suspected that that particular rabble of beardy nutters would ever be capable of doing much damage to the UK either.

The Prince of Liberals

2010-10-24T08:47:00.000+01:00

Paul Helm, writing on the Reformed distinction between the roles of the church and the state, tells me something which I certainly never knew. Having speculated on the possibility of Ryle's political Liberalism, which would be very interesting in an Anglican, I discover that Spurgeon had evident political leanings:

It is uncalled-for for the church to take any particular political stance, just as it was impudent and out of order for C.H. Spurgeon to advise his hearers at the Metropolitan Tabernacle to vote Liberal at a forthcoming election. What has that to do with him? As a minister of the gospel, it was none of his business. (src)

Spurgeon really was a supporter of the Liberals, and even an activist, engaged in that most traditional of Liberal political activities: leafleting (src). I agree with Helm that commending the Liberals and attacking Disraeli from the pulpit was an abuse of the position, and I would encourage Christian readers especially to read Helm's whole post as it is an excellent summary of the issues at stake. Nevertheless, from an historical perspective it is quite nice to discover that the Prince of Preachers was also a firm Liberal and a political admirer of Mr. Gladstone's.

Lucasian economics

2010-10-23T09:09:00.002+01:00

I have a shocking revelation. But in order to get there, I have to relay something which Caroline Lucas came out with on this week's Question Time. It goes like this.

Apparently, we can't sack 490,000 civil servants because it will cost more in terms of lost tax revenue and unemployment benefits than it would raise in terms of salaries lost. She may also be counting in some second-round effects in terms of VAT on spending and so on, but of course there would be second-round effects from spent unemployment benefit so it probably isn't a fair comparison to count in the second round.

In any case, surely this cannot be right, if you consider the implied microeconomic situation. For if the government saves net salary but loses unemployment benefit and the total is negative, then the employee's calculation is identical but with a minus sign attached: in other words, the employee would be better off being sacked and going onto benefits. Of course, in the famed 490,000 there may be some for whom this is not true; but if Lucas is right, then there must be a great number for whom it most certainly does hold. But then, what to make of the fact that we do not see masses of public servants spontaneously deciding that they would be better off out of work?

This enjoins upon us a choice. Either Caroline Lucas' economics is wonky, or as many as 490,000 public servants are deeply irrational, or both. The shocking conclusion is that, on the basis of Occam's Razor (and past performance), I am willing to make a charitable assumption of the half million, and question the economic prowess of the individual. Yes folks, the shock conclusion is that Caroline Lucas is not the world's most trustworthy source for matters economic.

Know thy place, peasant

2010-10-22T16:29:00.005+01:00

One of the more topsy-turvy aspects of our political discourse is the way in which the trade unions can manage to make themselves sound about as out-of-touch as the worst of the nineteenth-century industrial barons. For example, Iain Duncan Smith made the eminently reasonable point that people who are out of work may have to move house to find it. The unions' response has been ferocious. Here is Len McCluskey of Unite:

While Iain Duncan Smith has been presented as the Government's Mister Nice, he cannot shake off the vicious Tory determination to make the poor suffer. (src)

Naturally, they raise the spectre of Norman Tebbit. But the content of what Smith and Tebbit said (as opposed to the framing of it) is not only entirely reasonable, but desirable. To demonstrate this, let me put it another way, which I think may be more congenial to a left-wing mindset. Please note, there is no difference of analysis, content or implied policy proposals here: merely a different way of framing the same problem.

"One of the benefits that the middle classes enjoy is the ability to move to where there is work for them. Through a moderately flexible housing market and demand for professional skills, you can find girls from Canterbury working in Scotland and guys from Tyneside working in the City. A part of the poverty trap is that poorer people do not move to where the work is, and thus they find themselves caught in a cycle of out-of-work benefits when they could be in employment.

"The question we need to address is why they do not move as often: is it fundamentally a lack of ambition or a lack of assistance? Knowing the answer to that, what is the best way for public services to be formed so as to enable and encourage poorer people to use and enjoy something like the ability that the middle classes have to move to where the work is?"

You see, opposing worker mobility, as the unions and some other left-wingers do almost unthinkingly, is truly reactionary. It is they who say 'Know your place' to the poor, by telling them that their 'place' is stuck in a council house on the dole, rather than encouraging them to look for a place with a job. Whereas we say we don't know what their place is, but we certainly hope it is somewhere far better than to be left on the scrapheap of benefits dependency.

Not only is it reactionary, but it is also hypocritical: for how many of the screeching unionists benefited from labour market mobility? Almost all, I would expect. Most of the work in London. Most of them have regional accents. They enjoy salaries far higher than their parents. They enjoy salaries far higher than the industries which they left to become trade unionists! They have benefited from mobility, and they would deny it to others?

And it is also counter-productive, since labour mobility and prosperity both personal and in aggregate, are broadly correlated. Which society is the more prosperous: the medieval, agrarian society where most of the population is legally bound to one farm, or the modern society where people can move to find work to which they are best suited? And when the Industrial Revolution, which is arguably the great source of our wealth, arrived, what happened to labour market mobility in the UK?

Opponents of extending labour market mobility down to those who currently do not take advantage of it are reactionary, hypocritical and counter-productive. Well, I think that just about covers it.

Well, that was quick

2010-10-20T15:47:00.002+01:00

The Telegraph reports,

Every email, phone call and website visit is to be recorded and stored after the Coalition Government revived controversial Big Brother snooping plans (src)

I can't say I disagreed with those who predicted that eventually some of the worst policies from the Home Office vampire would be back in business under the Coalition. I must confess to having expected it to come rather closer to the end of the parliament than this. I think we can hold the government's feet to the fire on this one: the Lib Dems are meant to be Parliament's civil-libertarian conscience, and the Coalition agreement mentions the issue quite explicitly. If you have a Government MP, and lots of us will, write to them.

Make better distinctions

2010-10-18T10:57:00.005+01:00

That's all I really have to say about Bruno Prior's piece at the IEA blog today (src). He needs to distinguish 'efficient' from 'less inefficient', and he perhaps needs to bear in mind why we fund education for children. After all, if it were purely a matter of economic efficiency, we wouldn't do that, either: but we recognise that there are some benefits to having educated children which go beyond pure economics, and so we pay. We pay for every child (in principle) because the education is compulsory.

On the other hand, not every young person goes to university, so it is right that they should eventually bear some or much of the cost. But since there are benefits to having a decent number of university graduates beyond the purely economic, we subsidise an element of that cost. The Browne Review is quite a good way to provide this subsidy while ensuring that graduates bear most of the costs themselves in a fair way.

All of which goes to show that we want nuance in thinking through these issues. Because while issues of allocative efficiency are always present and must be borne in mind while structuring policy, there are more things in heaven and earth than are dreamt of in a purely economistic philosophy.

Please tell me they got this wrong

2010-10-14T11:36:00.003+01:00

Because it would be a major mistake:

To make the shrinking business more attractive, the state will take over Royal Mail's £8bn pension black hole, assuming the fund's future liabilities of £34bn, but gaining assets of £26bn, which may be sold off to reduce the budget deficit.
(src)

As I say, I hope the Indy is at fault here. Because, although I fear in this instance it is unlikely, the prospect is that someone in the government is not thinking clearly about how you manage public sector liabilities and pensions.

Firstly, the accounting position is not clear. Not everyone counts in pensions (assets and liabilities), but if you do (and I would argue you ought), as a liability of a fully state-owned enterprise it probably ought already have been accounted for. So it wouldn't really have changed hands at all.

Secondly, if you count in the pension assets, you should certainly count in the liabilities. It's no good setting money aside and counting it on your balance sheet to meet a certain obligation, but then conveniently forgetting to put the obligation on the other side of the balance sheet.

Thirdly, even if you do this very dodgy manouevre of counting the assets but not the liabilities, you don't do much for the deficit by flogging off the assets: this would be a one-off bonus, rather than a reduction which recurs year to year. There would be some recurring effects as interest payments would be lowered, but on the other side the assets' income would be foregone. If the government suppressed its issue of gilts by £26bn at 2.2% interest, and sold £26bn of FTSE100 trackers to do this (for the sake of approximation), then the dividends lost would exceed the interest saved by some £260mn per annum — and dividends go up over time.

Fourthly and finally, selling the assets would entail the government (in effect) selling some stocks and shares and buying gilts. This is not normally considered the most effective deployment of pension funds over the long term. I don't advocate the government borrowing to invest in the stock market as a general rule, but when it comes to public-sector occupational pensions, these should be funded: I know, for example, that this is true of the Teachers' Pension Scheme and the Universities' Superannuation Scheme. It is sensible for the Royal Mail pension scheme to be funded through assets which will generate a decent return, as opposed to effectively sinking the fund into gilts.

Over all, I do hope that this is not the plan. Sticking another £34bn of unfunded pension liabilities onto the taxpayer's books, and doing so by selling productive assets in order to buy gilts, would be an incredibly dopey way to handle the public finances in what are tough circumstances.

Isn't it curious?

2010-10-11T15:59:00.000+01:00

Earlier on in the year, when Ireland was engaged in stark measures to cut its deficit in the face of market discipline, the left was telling us all that it was profoundly unfair to compare the UK's situation with Ireland's, as we have our own currency, we are a much larger economy, we are more diversified and so on. If a right-winger said that Ireland demonstrated the dangers of failing to come clean and engage honestly with the issue of expenditures exceeding revenues, some left-winger could be relied upon to tell the waiting world that the comparison was intellectually unjustifiable.

And now?

Pointing to the Irish Republic's descent back towards recession, [Alan Johnson] said: "We don't have to look far to see what the effect can be of cutting too deep too soon." (src)

Never mind, of course, that Ireland's problem is almost certainly that they have had to fire yet more rounds of hard cash into their banks, causing their deficit for this year to balloon again. Never mind that this demonstrates that the austerity side of the argument remains correct. Just focus on this: while Ireland was thought to show our side of the argument was correct, it was an unjustifiable comparison; now that Ireland can be argued to be evidence in their favour, the comparison is suddenly legitimate. Curious, isn't it?

It's the government's responsibility!

2010-10-11T09:16:00.000+01:00

Members of the public, when questioning policies aimed at permitting greater involvement by local communities in their schools, hospitals, police forces and so on, can frequently be heard declaring that it is the government's responsibility to educate their children, or to heal the sick, etc.

It is not.

Legally, and I would argue morally, it is and has ever remained the responsibility of the parents to educate their children. There is a reason why teachers are described as acting in loco parentis, after all: when the children are attending school, parents have delegated their responsibility to the teacher; at no point have they handed it over to politicians. I should think that the thought of a lot of dull MPs in close proximity to their little darlings would give even the hardiest of parents a nervous breakdown.

Politicians are actually responsible for very little: merely ensuring that every parent can procure for their child an education of a standard with which they are satisfied. That is to say, with which the parent is satisfied, although since we are paying, taxpayers have a right to set some fairly broad and minimal standards as well. Similar terms apply to other services which are funded by the taxpayer, and if we bore this in mind, we would save ourselves an awful lot of political grief.

Putting it that way reminds me of a nice quote, defending the thesis that the government doesn't need to run schools or hospitals. It was John Stuart Mill who once wrote,

If the government would make up its mind to require for every child a good education, it might save itself the trouble of providing one. It might leave to parents to obtain the education where and how they pleased, and content itself with helping to pay the school fees of the poorer classes of children, and defraying the entire school expenses of those who have no one else to pay for them. The objections which are urged with reason against State education, do not apply to the enforcement of education by the State, but to the State's taking upon itself to direct that education: which is a totally different thing. (On Liberty, ch. 5; src)

Bang goes the graduate tax

2010-10-10T16:13:00.005+01:00

I can't say I'll shed any tears for the policy (src). To be honest, it was a bit of a mystery why Liberal Democrats supported it in the first place: the graduate tax proposal was mathematically equivalent to the current system, with fees taken to be "infinite". As Nicola Dandridge of UUK, answering public suggestions, put it, "In my view the current system has many of the advantages - without some of the major disadvantages - of a graduate tax." (src) I really cannot see how one could oppose a higher cap on fees, but support (in effect) taking the cap off altogether, without some horrendous inconsistency.

The other suggestion which sounds likely to make it to the light of day is charging higher earners a higher rate of interest on their loans, subsidising the loans made to students who go on to become lower earners. I would want to see some details before declaring myself entirely happy with such a system, but in principle I can see its benefits. It sounds like the government's universities policy is going in broadly the right direction.

Imagine it

2010-10-09T16:07:00.003+01:00

A nightmare scenario occurred to me today. Imagine living under a regime which insisted that all accounts, whether business or personal, had to be administered by a nationalised accountant. You couldn't have an immediate overview of your financial situation: instead, you have to go to a nationalised accounting service with all of your receipts and payslips, all your bank statements and invoices, and then a bean-counter, paid from the public purse, will produce a set of accounts for you.

It would probably take rather a long time to get around to producing a set of accounts for you. If a wait of a few months were fine, then you may just about be content, but if you were in trouble with a credit card and needing urgently to review your personal accounts, it could be an expensive proposition.

And the advice you would get from such an accountant would probably be distinctly unhelpful, if you were lucky enough to get it. For instance, he may very well try to advise you on how to maximise your tax liability. He wouldn't much care about whether he could identify areas of over-spending, or ways of increasing your earnings. He may very well not even have the expertise to tell you how you could improve sales or manage your overhead more effectively. But you don't get a choice: your accountant is chosen for you, remember. Of course, it's "free" — which is to say, paid for generally rather than specifically — but it's rotten.

Did I call it a nightmare? Just think about how GPs' surgeries and PCTs relate to each other. Or how schools and LEAs relate to each other. If they have no choice about accounts and management expertise, is it any wonder that the public finances are a waking nightmare?

On apologising properly

2010-10-02T09:20:00.000+01:00

While I'm on the subject, spot the similarity between the two sentences:

Many people found the resulting film extremely funny, but unfortunately some didn't and we sincerely apologise to anybody we have offended. (src)
I can understand how our inclusion of Joel Osteen’s book in our stores may not please some people, but many people claim these books are helpful in their Christian journey. (src: private communication)

Readers who know me in person may be able to guess at the provenance of the latter sentence. In both cases, the person wants to portray the complainant as part of a minority, a way to set themselves in the majority. I'm hardly a rampant postmodernist, but even I can see that this is a simple play for power using words: 'I have many people on my side; you only have some.' It doesn't matter that the video was clearly a dopey thing to put out, or that Joel Osteen's books are so devoid of any distinctively Christian content that even Wikipedia lists his major book as 'Self Help' (src): 'many' are on our side, but 'some' are on yours. And so even some Christian bookshops now appear to think that truth, taste, decency are all matters of majority vote.

The 'many … some …' construction is a wonderful way to puff yourself up and to paint your position as more defensible than really it is. In fact, if you find yourself feeling a need to use it in order to locate yourself in the majority, the odds are that you're the one in the wrong. So let me encourage you, when you apologise (yes, when), not to use it. Apologise graciously, rather than attempting to justify your position by the back door.

Is this what they mean by 'watermelons'?

2010-10-02T08:48:00.001+01:00

You know: green on the outside, red on the inside. (Viewers of a sensitive disposition are warned that this video features supposedly 'comic' gore.)
(via)I'm waiting for them to produce a version where dissidents are forced to walk to their new homes in Siberian camps, where they must work without electricity or labour-saving devices. Because that would be humorous too, right? The video's publishers, 10:10, retracted it shortly after its release yesterday (src).

Videos of a genuinely alarmist nature have been a staple of the extremer end of the environmental movement for quite some time. You may recall the 'our children are all going to drown!' video that DECC put out a while back. I think they got a rap on the knuckles for that one. But even by the standards of climate change videos it's perhaps going rather too far to start blowing up dissenters. The context determines how a message is received, and what is acceptable in a Monty Python film does not translate at all well into a campaign video. One might have thought that a successful television comedy writer would be aware of that kind of issue, but there we go.

The underlying message is also not pretty. I don't know enough about the theories of comedy, but I know that all forms of communication aim to deliver some kind of truth, or truth-as-we-perceive-it-to-be. I don't think a viewer would be being unreasonable, or particularly uncharitable, if she concluded that 10:10 believes anyone dissenting from their view of climate change deserves some kind of punishment. Perhaps she would be inaccurate, but she can hardly be blamed for a reasonable conclusion drawn from their publication.

And so what purpose does this kind of crass output serve? It perhaps amuses some of those who are already fully sold on the watermelon environmental ideology, but it alienates blue greens and environmental capitalists. If they were as concerned about the environment as they claim, they would be less keen to alienate friends and co-belligerents from other political stables, and rather keener to find ways to reach out with a message which is underneath it all not unhelpful, environmentally: you can change things in your own life. Moreover, it gives succour to those who want to argue that the whole thing is a huge scam perpetrated on the rest of us by scientists eager for government funding.

It is completely counter-productive, and it is a shame that 10:10 could only bring themselves to acknowledge that it 'offended' some people. The offence hardly matters in the grand scheme of things. What they should be really concerned about are (a) the implied view of dissenters which the video attributes to them, (b) the alienation of potential friends and co-belligerents, and (c) the undermining effect that it has on their overall case. None of those things appears to have registered with them yet.

Now, this is interesting

2010-10-01T17:55:00.000+01:00

(src)It's worth reading Sumner's post: he uses this graph to point out the silliness of Rawls' maximin principle, which if you're Rawlsianly-inclined may be worth thinking through. Basically, he points out that at the very bottom of the income spectrum, Thatcher-Major were better for the poor than Blair-Brown. Clearly, the effect reverses very rapidly, but Rawls' criterion is expressed very rigidly and doesn't allow for that kind of judgment. As Sumner drily comments,

Rawls would clearly vote Conservative, but for the wrong reason.

Another interesting thought experiment is to think about what would happen if the income distribution were acted on by a process with one of these profiles indefinitely.

Burke and the Revolution

2010-10-01T14:26:00.004+01:00

Let me commend Amol Rajan's reflections in the Independent on Burke's liberal-conservative legacy (src), and how his writings are the best touchstone for the current government: from the "Big Society" to the "little platoons", with a rhetoric which focusses on what we will leave to future generations. Along the way he makes several very good points, noting environmentalists' unwitting dependence on Burke and how a Burkean government would be suspicious of any claim to be philosophically grounded even in Burke.

However, he does manage, I think, to spoil it on one point: Burke's opposition to the French Revolution, and particularly the Jacobins. Rajan writes,

Five "great, just and honourable causes" were the object of his devotion – not four, as David Marquand, the brilliant Left historian, put it in a superb essay for Prospect last week. First, the emancipation of the Commons from George III and the "King's friends"; second, the emancipation of Ireland; third, the emancipation of the American colonies; fourth, the emancipation of India from the corrupt and venal East India Company; and fifth, opposition to the Jacobinism of the French Revolution. In all but the final case, he was, in other words, clearly on the side of the oppressed, and against tyranny, colonialism, and the exercise of arbitrary power.

I'm just not sure we can criticise, as Rajan appears to, Burke's opposition to the French Revolution (and, contrariwise, I don't think we should excuse Paine's defence of it). Even if it stuck out relative to his other positions, it doesn't seem clear that we should treat it (as Rajan does) as an outlier. For as Rajan goes on to say,

Warning that the new regime had destroyed something precious in French society, and would unleash horrors then unknown, his book was an immediate best-seller.

Now, Burke was writing in 1790. Maybe I need only say the name «Robespierre» to conjure up the scenes which followed during la Terreur three years later; and even after the Revolution, the French were left with Napoleon. Given that Burke's direst warnings appeared to be fulfilled, would it not be safer to conclude that he had very good reasons to be profoundly sceptical of the French Revolution?

Miliband minor, closet Marxist?

2010-09-28T21:21:00.005+01:00

On Saturday, Milibland minor told the nation that he 'gets it' (src) and today, that he is of a certain generation (src). Apparently, this means that he is going to support our civil liberties, despite having voted for every piece of Labour anti-terrorism legislation during his parliamentary career (src) and for ID cards (src). It means that he will make leftish overtures on Trident, despite voting for replacing it (src). It means that he understands the loss of trust which Iraq created, despite having voted to obstruct an investigation into the conduct of the government at every step he could (src). And it means that he realises that the last administration became a tired, clapped-out Labour government, despite having been ultra, ultra-loyal, even as a back-bencher (src).

On many of the major areas of policy, Ed Miliband was agin it before he was for it, or for it before he was agin. He makes John Kerry look positively consistent.

So I think we are entitled to ask of the new Labour leader when he 'got it' and what made him 'get it'. In particular, I think we are entitled to know whether he 'got it' before Labour was delivered such a bloody nose at the polls. Because I suspect that he is really a Marxist: 'Those are my principles, and if you don't like them… well, I have others.' (src)

Setting the record wonky

2010-09-25T22:05:00.005+01:00

Chris Mullin, for whom I have more respect than for the average former Labour minister, tries to undermine a 'lie' he accuses the government of propagating with another set of untruths in today's Independent. He begins by smudging the history of the recent financial crisis by telling us,

Point one – and this is so obvious that one should not have to make it, but alas memories are short – is that the crisis is global. (Even the Americans agree it started in America.) (src)

Fair enough, the banking crisis did begin in America. But if we're going to look at that side of things, it didn't begin with the banks. It began with an American administration — in fact, a succession of administrations — which were keen to encourage higher home ownership among people who, to put it very bluntly, couldn't afford it. So they meddled in the mortgage market using financial quangos like Fannie Mae and Freddie Mac. Eventually, this meddling blew up in their faces as the banking sector passed the risks around like a hot potato on the assumption that Uncle Sam was going to bale them out. As, indeed, he did. If this is a failure, it is a government failure. This is not the best ground to be arguing from, if you want to defend an activist role for government.

Mullin continues,

Point two: most of the deficit was incurred while rescuing the economy from the folly of the bankers, derivative traders and hedge funders, few, if any, of whom are Labour voters.

All very nice, except it's not true, is it?

For the most part, the bale-outs did not require huge injections of cash: the Government simply promised to underwrite certain institutions, being good for the cash if it ever came to it. Moreover, if the bale-outs had caused the deficit to rise substantially, then the deficit would have decreased naturally now that no further bale-outs are being undertaken. Instead, the deficit is still with us, which puts paid to the notion that it was mostly incurred as a one-off payment.

No, the deficit really is Labour's fault, and the figures bear this out. Gordon the Prodigal was running a deficit well before the financial crisis, and while the slight decrease in GDP will have reduced tax revenues while exacerbating the scale of the deficit, it was not incurred 'rescuing the economy'. The exact date that Labour's surplus turned into a deficit depends on your definition, but public sector net debt as a proportion of GDP began to rise in 2001 and hasn't fallen back since (src).

But there is more!

"Light-touch regulation" was the mantra of the hour. … Quite apart from which, no amount of regulation would have protected us from the tsunami that came from America.

So, let me get this straight: the problems we got from America were caused by heavy-handed government meddling in the market, and no amount of regulation could have saved us from them. But we need more heavy-handed regulation here in the UK because, um, [argument goes here - Ed.].

Chris Mullin understandably wants to dissociate the government of which he was a part from the problems we now face. The difficulty he has is that they are indubitably tied up in them, and it is not just good politics but necessary to remind the British public of that fact.

In which the Indy abandons the scientific method

2010-09-24T18:10:00.006+01:00

Einstein's theory is proved – and it is bad news if you own a penthouse
Scientists use atomic clocks to show that time moves faster at altitude, even on Earth
By Steve Connor, Science Editor (src)

If I were Steve Connor, I would find out who wrote that headline and… well, let's say they wouldn't be associating my name with any dubious headlines again.

For Einstein's theory is not and can never be proven. Ever. At all. In any way. It's a scientific theory, and as such the best we can say is that Einsteinian relativity has passed another test. (I now get to say this with my magic PhD-in-Theoretical-Physics hat on.) Perhaps you could get away, through journalistic licence, with saying that it has been affirmed: that is, another experiment's results are consistent with the theory. But never that it has been proved. In any case, we're quite certain that general relativity isn't quite right somewhere, so proving it true when in fact it's not quite right would be a bit of a sticky point.

And these experiments are old hat. We've been doing them with aeroplanes and even mountaintops for ages, and GPS has relativistic corrections built into its calculations. If Connor wants a really fun story, he could tell a nation agog how their sat-navs 'prove' Einstein was right.

The Independent has form on this. They did it a while ago with climate change: 'Now we know climate change is true' ran the headline, and the subheadline used the word 'proved'. Whoever thinks that scientists 'prove' anything needs a refresher, if not a first course, in the scientific method, and is thus an anonymously-inducted Journalidiot.