Blogroll: Adam Smith Institute

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Orwell and the Left

Tue, 25/06/2019 - 12:01

Eric Arthur Blair was born on June 25th, 1903. The world knows him by his pen-name, George Orwell, named from the Suffolk river not far from where he'd lived. He is best known today for his two satirical novels, Animal Farm (1945) and Nineteen Eighty-Four (1949), both critiques of the brutal Stalinism that ruled the Soviet Union in the 1930s.

Orwell wrote much more than those two works, however. In addition to them he wrote four more novels, three non-fiction books and literally dozens of essays and newspaper columns. His style is distinctive in that he speaks in plain, everyday language, avoiding any pretentiousness or jargon. He tells things as they are, with a searing insight and honesty.

To find out what life was like for the poor, he took to living rough, like a tramp, first in London, then Paris. He describes how putting newspaper inside your shirt keeps out the cold of winter nights. While discarded cigarette ends can be reassembled into cigarettes, matches to light them with are rarer, and become a valuable currency on the streets. His experiences formed his first book, "Down and Out in Paris and London" (1933).

His "Road to Wigan Pier" (1937) describes what life was like in the North of England, the daily struggle, the occasional sense of hopelessness, and the minute details of the shabby furniture and the plain diet that was all they could afford. It brought home to his educated readers how the majority actually lived, in a way that Cobbett's "Rural Rides" had done in the early 1820s.

Orwell fought in the Spanish Civil War and was wounded. He chose to join the POUM, a Workers' Party of Marxist Unification, and described the chaotic and under-supplied struggle against Franco's forces. His book, "Homage to Catalonia" (1938) caused disquiet on the Left because he described how the Communists had denounced the POUM as Trotskyists and betrayed them.

Orwell's disenchantment with the Soviet Union reached breaking point when the Nazi-Soviet pact was signed in 1939, paving the way for Hitler to wage war in the West. He reviewed Arthur Koestler's "Darkness at Noon" (1940), which covered Stalin's 1930s show trials, and remarked, "What was frightening about these trials was not the fact that they happened – for obviously such things are necessary in a totalitarian society – but the eagerness of Western intellectuals to justify them."

Orwell was very English. He was a heavy smoker, rolling his own from strong tobacco. He liked strong tea, beer, roast beef, kippers and marmalade. He wrote about the mythical ideal English pub, "The Moon Under Water," and had a deep affection for the patriotic and unpretentious English working class. He wrote, "people can be trusted to behave decently if you will only let them alone."

He led a full life, working at times as an empire policeman, a teacher, in a second-hand bookshop, for the BBC, and as a full-time writer. His experiences come through and colour his writing. Several of his essays achieved legendary status, and some feature in school syllabi today. He set out the rules of good, precise, clear writing:

* Never use a metaphor, simile or other figure of speech which you are used to seeing in print.

* Never use a long word where a short one will do.

* If it is possible to cut a word out, always cut it out.

* Never use the passive where you can use the active.

* Never use a foreign phrase, a scientific word or a jargon word if you can think of an everyday English equivalent.

* Break any of these rules sooner than say anything outright barbarous.

He is still highly relevant, rewarding us not only with his fluent prose, but with his honesty. He self-identified as a socialist and a man of the Left, yet he saw and wrote about what people actually did in the name of socialism. His refusal to excuse the cynical brutality of those who claimed to carry its banner but betrayed all of its ideals, made him many enemies on the Left. If Orwell were alive today, he would have no time for the squirming around the brutality and squalor of the anti-Western regimes and movements that many on the Left are so ready to act as apologists for.

Categories: Current Affairs

The value of charging university students for their education

Tue, 25/06/2019 - 07:01

There’re a number of justifications behind charging university students for their education. One being that such a qualification is likely to lead to a higher lifetime income. Therefore why shouldn’t those who gain the privilege pay for doing so, rather than our taxing the lower incomes of the general public to finance it? We can also consider the choice of courses. An economic decision made where there’s real money at stake should lead to better decision making. We can hope therefore that fees will lead to more engineers and less grievance studies.

One more - fees make the universities accountable to the students:

A university has apologised to students after a review found teaching on a health and safety course fell "short of the standards" expected.

The errors were serious:

An investigation found a lecturer got "very basic scientific information" wrong - for example he claimed that bleach was an acid when it's an alkaline, says the Times.

He also said that "voltage" was named after Voltaire, the French philosopher - when it's in fact named after the Italian physicist Alessandro Volta.

Perhaps not such very great terrors.

The inquiry found the lecturer, who was teaching safety and business risk modules, suggested that oil could be heated to 360C - when it can actually catch fire at 250C.

Ah, no, that is serious.

At which point we could say that this should never have happened and that this shows that we’ve done something wrong to the universities. Which is to be in error for mistakes - and incompetence - are always going to happen. What matters is the response to such, the incentives in place to at least try to avoid:

The students affected were studying for a masters degree in safety, health and environmental management.

The university said it offered students the chance to repeat or substitute the affected modules at no cost - so their qualification wasn't affected.

It also offered compensation - thought to be around £2,000 - to students because of the inconvenience.

By paying the students have become customers. By being a producer taking consumer money the university is at the very least bound by normal contract law concerning the quality of the goods provided.

That is, both sides now have real money at stake. We can expect the decisions on both sides to be rather better. At least, the incentives are there and they’ll no doubt work through the system in time.

Categories: Current Affairs

Our online freedom is under attack

Mon, 24/06/2019 - 15:30

State control of the internet is no longer a foreign reality, a distant intrusion reserved for the Chinese and Russians. It is about to start happening right here in the UK.

The Government’s Online Harms White Paper proposes the most comprehensive regulation of online speech in the Western world. The Government is placing legal responsibility on social media platforms, and any other websites with user-generated content, like search engines and web forums, to curate the content posted on their site and to eliminate what they loosely deem as “harmful”. This is being called “duty of care” and will require all companies to make huge, costly changes to avoid fines, jail time, or even website blocks. It also calls for the creation of a new regulator, who will have the extraordinary power to decide what is harmful and when websites are failing to comply.

These heavy regulations are prompted by what the Government has called “harmful content” on the internet, such as child exploitation, terrorist material, and promotion of suicide. But the White Paper goes much further by targeting a very wide array of “harms” - raising the question: what is harmful?

The White Paper itself qualifies harms necessitating regulation as legally clear and unclear. For instance, harms with “less clear legal definitions” include “intimidation,” “trolling,” and “coercive behaviour”-- who will define the intimidating and coercive or trolling and how dependent will this qualification be on the majority power in Parliament?

The threat to free speech is palpable. This proposal stands to name the government as the arbiter of acceptability online. But, what’s more, the White Paper’s proposals will block out small competitors from challenging Big Tech.

The Adam Smith Institute’s new paper, Safeguarding Progress: The risks of internet regulation, explains that this regulation is not only a serious threat to free speech, it is also disproportionately costly to start-ups, hurting competition and innovation.

The “duty of care” will require a large number of personnel, costly automated technologies, and sizeable funding for algorithm redevelopment. The capital required for this overhaul is conceivable for big companies like Google or Facebook, but start-ups just don’t have the resources and could be crowded out of the market. No wonder Facebook founder Mark Zuckerberg came out in support of state regulation of social media in his Washington Post op-ed. In it, he writes that the government needs to play a role in defining and enforcing the limits of free speech. And what is he doing to uphold these proposed regulations? Companies like Facebook and Youtube are currently employing thousands of people (Facebook currently boasts 50,000) dedicated to monitoring posts and comments, deeming them as acceptable or unacceptable based on company policy. Small start-ups surely lack this capacity, and should regulations be mandated be imposed, they would be scrambling for resources.

Furthermore, the rules companies like Facebook have been providing content monitors are complicated and often criticized (undoubtedly foreshadowing shady government rules). Facebook has over 1,000 pages of guidelines dedicated to outlining what is “unacceptable” speech. These guidelines are by no means comprehensive and are often contradictory. They are, most problematically, often subjective in interpretation. Many feel Facebook has taken too much control and is becoming authoritarian. Critics like Ben Shapiro on the right, for example, feel that their content is being pushed out by a liberal agenda in Big Tech speech policies. Therefore, if the government provides the guidelines, fingers won’t be pointed at Big Tech anymore, they’ll be pointed at policymakers.

But we must also remember that the actions of the technology companies do not sit in a bubble. The increased harshness of their speech policies - which are of course their own private business choices - come in the context of growing state pressure to censor the internet. “PC culture” and the implications it has on companies’ reputations come at the cost of overly cautious censorship.

The choice looms ahead: either accept the offensive pockets of the internet or regulate Big Tech into stagnancy while pushing speech limitations to the point of censorship. Eliminating “the offensive” comes at the steep cost of freedom of speech and innovation.

Categories: Current Affairs

The Berlin Airlift countered the Soviet blockade

Mon, 24/06/2019 - 12:01

The postwar allied occupation of Germany saw the country divided into 4 zones, one each run by the US, the UK, France and the USSR. Its capital, Berlin, was divided into 4 similarly controlled zones. On June 24th, 1948, the Soviets suddenly blocked access routes across East Germany to West Berlin. They cut off road, rail and water-borne transport and traffic. It was a response to the introduction of the Deutsche Mark in West Germany and West Berlin.

The Western allies were reluctant to force a land corridor through to West Berlin for fear it would provoke a conflict in a theatre in which the Soviets had massive military superiority in conventional forces. Rather than give in to Soviet blackmail, they decided on an airlift to ferry supplies into the besieged city. It was a huge undertaking calling for high-level logistical planning.

Several air forces took part, including those of the US, the UK, France, Australia, New Zealand and South Africa. It came to involve hundreds of flights a day into the city’s two airports. Initially they used mostly C-47s, the military version of the DC3 Dakota, but later added the heavier C-54s. They soon exceeded the estimated 3,475 tons of supplies a day it would take to sustain the population. Indeed, by the time the airlift ended a year later, they were flying in more food, fuel and supplies than had previously been coming in by rail.

To cut down on the time the crews needed for refreshments, the overall commander had jeeps equipped as mobile snack bars to refresh crews on the runway while their planes were unloaded. Allied pilots noticed that German children would crowd the flight lines below them to watch the stream of planes coming in, and took to dropping sweets and chocolates to them, a gesture much appreciated given the rationing then in place.

In one year over 200,000 sorties were flown, one every few minutes in a constant line of landings and take-offs. On May 12th, 1949, the Soviets realized their bullying tactic had failed, and lifted the blockade. By then the Deutsche Mark had established itself as one of the hardest currencies, and the German Economic Miracle was under way as free markets and deregulation worked their magic. The Airlift was not without cost. There were !01 deaths during the operation, including 40 British and 31 American airmen, mostly killed in non-flying accidents. The financial cost was estimated at between a quarter and a half million US dollars, perhaps just over $5bn in today’s money. It was worth it, in that West Berlin survived as a free city. There are monuments in the city to those who died to save it.

Wars are often caused by uncertainty. When potential aggressors do not know if they will be met by force, they might be tempted to try it. If they are made aware in stark terms that force will be responded to in kind, they are usually deterred. The Berlin Airlift made it abundantly clear to the Soviets that the Western Allies were not prepared to lose West Berlin. It was a measured response, in that an attempt to force open a land route might have provoked war, but an airlift was not aggressive.

The lessons of the Berlin Airlift remain. Enemies must know that acts of aggression against us or our allies will be met with a measured but forceful response. Jeremy Corbyn might want to leave NATO and renounce our nuclear deterrent, but these, not the goodwill of the Soviets or of Russia today, are what has kept the peace these past decades. Corbyn seems ignorant of the most basic rule of defence: "si vis pacem, para bellum."

Categories: Current Affairs

What a very French approach to cannabis legalisation

Mon, 24/06/2019 - 07:01

Yes, of course, we Britons do tend to tease our closest neighbours simply because they are our neighbours. But isn’t this a delightfully French approach to the question of cannabis legalisation?

A government-tasked commission has advised France to legalise cannabis to “take back control” of the black market, calling prohibition an abject “failure”.

Of course, entirely so, we agree with the basic sentiment. Of course there should be legalisation.

State-controlled cannabis stores would be the best way to control drug trafficking and “restrict access” to younger would-be users, they argued.

By their calculations, cannabis could bring up to €2.8 billion (£2.5bn) per year into state coffers and create up to 57,000 jobs.

Good points no doubt.

Part of the revenues could be channeled into “town and educational policies in sensitive urban areas”, the wrote.

Hmm, well.

The French debate appears to be about the efficiency of control, the tax revenue that might be raised, how that could be spent. All useful contributions to the discussion of course. But there seems to be no reference at all to the issue we think most important, freedom. Liberty if you like. That a consenting adult should indeed, absent third party harm, be able to do or ingest as they wish.

Which is odd really, when you think of how the triplet goes, Liberté, Égalité, Fraternité. The liberty bit being one of the things we’ve rarely seen mentioned in debate across the Channel. But then as we know, political slogans usually mean their opposite.

Categories: Current Affairs

It’s not “Special,” It’s Socialism

Sun, 23/06/2019 - 12:03

I still remember my childhood trips to Venezuela and long what I left behind. Caracas was a vibrant city, filled with nice restaurants, busy malls, and close to gorgeous beaches. Weekends on Venezuela’s main vacation island - Margarita - were identical to days at upscale resorts in Florida or the Carribean. It was metropolitan and very wealthy nation - not far off from some of our Western democracies.

During the period I visited—throughout the early 2000s—Chavez’s welfare reforms won him reelection and the poor, as well as Labour politicians, worshipped him. The working class flocked to his rallies and faithfully turned out to vote. Poverty rates went down and support soared, but one thing was clear - the center could not hold much longer. Not as Chavez’s nationalized industries shrank oil production and national revenue dropped.

Throughout his time as president, Chavez had some key victories for his socialist cause. For one thing, he succeeded in banning term limits on his presidency. Though not an explicitly socialist policy, it broadened his reach to promote his brand of Chavismo - a wholly socialist vision. As for the poor, Chavez indeed decreased poverty rates and raised literacy and health statistics among the poor. And he did so by nationalizing private industries.

Free education, sweeping healthcare benefits, food subsidies, and nationalized industry—it should all sound familiar. It might conjure pictures of Bernie Sanders or Jeremy Corbyn, of happy students and excited voters. But what do we get in the end? Hungry children and congested hospitals—pictures are not reality.

Chavez pursued - wait for it - social welfare policies. Venezuela was not an outlandish, utopian state, as many Labour or liberal pundits would have us believe. It was a mainstream case of democratic socialism. And this worked. For a little bit.

These changes—though temporarily positive—were built on a shaky platform. Chavez funded his social programs with national oil revenue from PDVSA, Venezuela’s state oil company, nationalized in 1976, and secondarily from revenue gained by nationalizing 1,168 companies, spanning from agriculture to petroleum, from 2002 to 2012. What’s more, in 2003, Chavez took away PDVSA’s largely autonomous status and replaced tens or thousands of workers with loyalists. Now, cash was available for the government to spend, but what would be the fate of these state industries? In the words of Juan Carlos Hidalgo, a Latin American policy analyst at Cato: “Most of them were run into the ground due to sheer incompetence, sleaze and negligence, decimating Venezuela’s productivity.”

The plan initially worked twofold: Chavez could be praised for his generous welfare and progressive thinking while also benefiting from the corruption and mismanagement of the oil industry that cost the country billions and enriched its leaders. PDVSA itself claims that its main end is to enrich the people and the nation: it is a company “subordinated to the Venezuelan State and profoundly engaged with the genuine owner of oil: The Venezuelan People”. And for a time, this was true. According to the World Bank, poverty dropped from 54% in 2003 to 26.4% in 2009. Chavez was elected to office in 1999 and replaced PDVSA engineers and employees with loyalists throughout 2002. At the same time, his most loyal supporters were being enriched with billions of dollars and Chavez, himself, was living in luxury.

The hoax of socialist policy is such: you can immediately deliver on your promises. Until the money runs out, you can spend it, and you can spend it on helpful measures. But what happens when the money ends? What happens when these programs do not have another source of income? What happens when you drain your country to its last drop?

All of a sudden, in 2007, after a major loss of professions in the petrol industry following Chavez’s mass-firing, oil production went plummeting. According to a BP review, production went from just under 3.5 million barrels a day to about 1.5 million a day in 2017 under Maduro. Yes, PDVSA may have been “profoundly engaged with the genuine owner of oil: The Venezuelan People”, but it also fell victim to “sheer incompetence, sleaze and negligence” under the control of self-enriching, underqualified Chavista cronies.

PDVSA (being a nationalized company) could not keep up with the global oil market. It failed under Chavez and thus, the welfare programs that depended on its revenue also failed. In the face of these inefficiencies and government price controls, poverty rates skyrocketed to 82% in 2017.

What’s more, a nation that had briefly experienced the benefits of a robust welfare state was immediately left with nothing. The centre fell through and left a disaster: no welfare and no competitive oil industry to salvage the economy.

Is this a detached reality for places like the UK, where socialism is becoming the mainstream? Is Western socialism more “sophisticated”? Well, for one thing, these places are not that different from Venezuela. Venezuela is not a “special,” “off-brand” form of socialism. It is true that it is a country plagued with corruption - but that is inevitable when all power has eventually been usurped by one entity - the government. Venezuela was once the gem of South America and a very rich nation - one where Europeans settled and entrepreneurs flocked. Today, still sitting on one of the largest oil reserves in the world, it stands decimated.

Yes, we may be rich, and yes, we may have good intentions, but how far can these factors take us? Venezuela was primed for success, and within a decade, not-so-utopian socialist reforms destroyed the country and left its once-poor people, even poorer.

Categories: Current Affairs

Independence Day - 3 years on

Sun, 23/06/2019 - 10:01

Parliament contracted out to the people of the UK the decision as to whether the UK should leave the EU or remain a member of it. The promise to hold that vote was in the Tory manifesto for the 2015 election. When they won that election, Cameron duly delivered, and the referendum was held on June 23rd, 2016, exactly 3 years ago. Political leaders on all sides pledged to deliver the result that people voted for.

The electorate was given a clear choice, to Remain in the EU, or to Leave it. On the day of that people’s vote, the people voted by a clear margin that they wanted the UK to leave the EU. According to the pollsters, immigration was an issue in that campaign, with even those who support a generous immigration policy unhappy about having to accept unrestricted immigration with no choice in the matter.

Sovereignty was the most cited issue, with people preferring the laws that apply to the UK being made in the UK by people answerable to the electorate. Brussels was seen as remote, bureaucratic, and prone to have its agenda too easily captured by lobbyists and special interests. Furthermore, people pointed to a democratic deficit within the EU, with too many powers exercised by non-democratic bodies, and with unanswerable officials setting its rules and regulations.

The UK political establishment was shocked by the result. The élite who thought themselves enlightened shared a pro-EU outlook. The CBI, the BBC, and the majority of MPs and Lords all took the view that the EU was our comfort zone, and couldn’t imagine a life for Britain outside it. The government spent £9.3m printing and distributing a leaflet on why it recommended staying in the EU. This did not count as campaign spending by the Remain campaign, because it was “government.”

The feeling among the élite was that the people who voted Leave were “stupid,” “uneducated,” and “lacked knowledge of the issues.” A more likely alternative, and one borne out in polls, is that they were fed up of being bossed around by foreign bureaucrats in Brussels. In the words of the Leave campaign slogan, they wanted to “Take Back Control.”

Despite promises to respect the result, a significant number of MPs, probably a majority, want to subvert it by any means they can. With a biased Speaker on their side, they have deployed, and are deploying, every Parliamentary trick of procedure to make sure the UK remains within the EU, despite having voted to leave it. Calls for a second referendum show how much they have absorbed the EU culture of making people vote again if they got it wrong the first time.

Trust in Britain’s political process, and respect for it, has diminished since people see their elected Members of Parliament trying to thwart the clearly-expressed opinion they were asked to give. Whether it’s leave with a deal, or leave on WTO terms, people do not want any more dithering, prevarication and uncertainty. Three years after that historic vote for independence, they want the UK to leave that narrow protectionist trading bloc, the one that tries to protect its industries from world competition by tariff walls. They want to step into a wider world, and will reward anyone who shows the leadership to do just that.

Categories: Current Affairs

George Monbiot's misunderstanding of mass transit

Sun, 23/06/2019 - 07:01

George Monbiot wants us all to know that the car is the great threat to urban civilisation. It’s even possible that he’s got the beginnings of a point concerning urban air pollution and the internal combustion engine. As long as we ignore the pollutants - horse dung say - that accompanied every other previous technology.

However, it’s in the prediction of what must be done about it that Monbiot really fails.

Neither electric cars nor driverless cars will solve our problems. They take up as much space as fossil-powered vehicles. Electric cars are already triggering a series of environmental disasters, due to the rush for lithium, cobalt and nickel required to make their batteries. Driverless cars are likely to exacerbate congestion and accelerate climate breakdown, because of the energy demands of the data centres required to control them.

It makes far more sense to build electrified mass transit.

By electrified mass transit he means trams, light rail and full on trains of course. Which is really just an illustration of how conservative the right on are these days. Why would we want to use a 19th century technology in the 21st? Well, if it was still the best option then that would be fine. But what if we’ve developed something else, better?

Like, say, fleets of autonomous electric cars? We now no longer have terminus to terminus travel, we have point to point. Any point to any point. Electric means the emissions, whatever they still are, take place outside that urban centre. We seem to have ticked the boxes. So why, other than just an innate conservatism, the objection?

Or to put the point another way, what is it about a fleet of autonomous electric cars that makes it not electric mass transit?

Categories: Current Affairs

Galileo was forced to recant

Sat, 22/06/2019 - 12:01

On June 22nd, 1633, Galileo was shown the instruments of torture by the Inquisition and threatened with their use unless he recanted his expressed view that the Earth revolved around the Sun, instead of the other way round.

Galileo had seen the moons of Jupiter and the phases of Venus through his telescope. When he published “The Starry Messenger” in 1610, he endorsed the heliocentric theory of Nicolaus Copernicus. He proposed a theory of tides in 1616, attributing the motion of the Earth as a cause of them. In 1632 he published his “Dialogue Concerning the Two Chief World Systems,” again implying heliocentrism, which the Inquisition had formally declared to be heretical in 1616, banning books that supported it.

At his trial he was found "vehemently suspect of heresy", banned from holding or teaching heliocentric views, and was sentenced to life in prison. He was a frail 69-year-old, and the sentence was commuted on the following day to house arrest. He spent the remaining years of his life under house arrest at his villa near Florence, until he died aged 77.

The Catholic Church and its Inquisition claimed the right to insist that it alone knew what was God’s will, and persecuted those who resisted their dogma and who sought to investigate themselves what the universe might be like. It is doubtful if the Bible decreed that God’s universe was geocentric. There are passages which declare the Earth to be fixed. 1 Chronicles and Psalm 96.10 both declare, “The world is firmly established; it cannot be moved.“ Psalm 93:1 tells us, “The world is established, firm and secure.” And Psalm 104:5 says, “He set the earth on its foundations; it can never be moved.”

All of these can be taken as expressions of how things look to us, rather than how they might be literally true. We speak of sunrise and sundown, without supposing it is the sun that goes up and down. The Church in Galileo’s day chose to insist upon a literal interpretation. It was not because scripture demanded it; it was a question of authority, and they had the power to torture old men into submission, or to burn at the take those who questioned that authority.

The Church apologized in 1992, pardoned Galileo somewhat tardily, and took his works off the Index of banned books. It reminds us of a time when we had to believe, under pain of death and suffering, what those in authority demanded we believe, or at least pretended to believe. Similar requirements have been made by totalitarian dictatorships, Nazi and Communist, and even today social media lynch mobs will howl in pursuit of those who dare to say how they think things are, rather than utter the anodyne platitudes of political correctness.

Galileo had the last laugh, albeit posthumously. A few months after he died, over in England Mr and Mrs Newton decided to christen their newborn son Isaac…

Categories: Current Affairs

Central bank independence, inflation and political power

Sat, 22/06/2019 - 07:01

Just a small observation, not particularly original to us. Politics has only controlled the value and quantity of money for a short period of history, roughly WWII through to the 1990s. Perhaps, for purists, really only the 1970s through the 1990s. The period of fiat currencies and government control of central banks.

Before that period we generally had currencies based, however tenuously, upon specie. After we’ve had those independent central banks able to kick back against government policy. Which makes this long term chart of inflation in the UK interesting.

There were inflations - Henry VIII debased the silver coinage for example. There were deflations, QE I tried to restore the value. But to get to consistent inflation we had to wait for politicians to control both fiscal and monetary policy, something that really only did happen post WW II.

One way of looking at this is that the more power politics had the worse matters got. Another, less cynical, is simply that the move to central bank independence from the 1990s onwards was well rooted in empirical justifications.

Our general view around here is that the correct question concerning politics is whether we’re being cynical enough. We’d thus take this record as being a warning about allowing politics, and politicians, to control too much. Or even much.

Categories: Current Affairs

Going into space privately

Fri, 21/06/2019 - 12:01

On June 21st, 2004, SpaceShipOne, a launch system designed and built by private sector engineers and entrepreneurs became the first non-government manned vehicle to reach space. Later that year it won the Ansari X-Prize by reaching space twice within a 2-week period, carrying the equivalent weight of two passengers.

It clocked up several records during its development, including one for the first privately built craft to achieve supersonic flight, which it did on December 17th, 2003, exactly 100 years since the Wright brothers’ first flight. Unlike many of its rivals for the prize, it never had to pause during development to attract more funding. This is because the entire costs, estimated at $25 million were met by Paul Allen, the co-founder of Microsoft.

Burt Rutan, head of Scaled Composites, was the designing genius behind it. Carried aloft to be released from its mother ship, White Knight, SpaceShipOne was a rocket powered aircraft that could make a sub-orbital flight into space, reaching over 100km, the internationally accepted Karman Line regarded as its boundary. Instead of a conventional heat shield, the back half of the plane lifted up to provide a “feathering” motion that provided enough drag to lower the speed to a safe landing level.

Virgin Atlantic’s Richard Branson was not involved at all in the project. After the prize-winning flights he formed a joint venture with Burt Rutan to develop a system for commercial spaceflights. The company, Virgin Galactic, plans to use second generation craft, SpaceShipTwo and White Knight Two, to carry paying passengers on suborbital flights.

These will not be the only private spaceflights. Elon Musk’s SpaceX has already flown its Dragon capsule to resupply the International Space Station, and a manned version is expected to carry first astronauts and later private passengers. Jeff Bezos’ company, Blue Origin, has its New Shepard system designed to take a passenger-carrying capsule for space tourism, while Boeing’s Starliner capsule could, like the Dragon, carry astronauts initially, and then private customers. In addition, Sierra Nevada is developing its lifting body, Dream Chaser, as a mini successor to the Space Shuttle.

All this private activity, some of it NASA-funded, indicates that space is no longer the sole prerogative of nation states. The private sector is developing many different and novel approaches simultaneously, testing which ones are viable, both scientifically and financially. This is what the private sector does well, and what governments tend to do badly. A strong part of that is motivated by profit. The unabashed desire to make money helps to motivate private entrepreneurs to experiment with previously untried ideas, and to test novel and less costly ways of achieving success. This has meant that the costs per kilogram of space launches have been driven down, and competition will doubtless drive them down further.

That said, profit is only part of it. Many of these space entrepreneurs are driven, as other businessmen and women are, by a desire to succeed, to overcome the difficult and to solve problems, and to achieve something they think worthwhile. Long may people continue to do so. Burt Rutan started something 15 years ago, something that will continue until space becomes commonplace.

Categories: Current Affairs

A new way to cut taxes

Fri, 21/06/2019 - 10:01

Rory Sutherland, in his Spectator column of June 8th, says something novel about cutting taxes. Instead of discussing how much taxes might be cut, he considers how they might be cut. He says, as an alternative to simply cutting the rates:

“More interesting would be to hold the tax rate constant, but to refund tax cuts annually in a lump sum. It would then be valued year after year, rather than becoming invisible.”

This brings psychology into the picture. The theory is that if government cuts tax rates, it earns gratitude for a couple of years, then the new rate beds in and people get used to paying less per month in PAYE. On the other hand, an annual rebate keeps oncoming and keeps on earning gratitude.

Suppose, for example, that government decided to cut the basic rate from 20% to 18%. Obviously this would have to be funded by spending cuts, efficiency savings, tax rises elsewhere, or through economic growth. A cut of the top rate from 45% to 40% would probably not have to be funded, in that the lower rate could well yield more revenue by making avoidance less attractive and by stimulating investment and growth.

A cut in basic rate from 20% to 18% could be done by a straight rate cut, or it could be implemented by having people continue to pay at 20%, and giving them an annual rebate of the difference between 20% and 18%. In crude terms this combines a tax cut with forced savings. There is evidence that people would like to save more, but find it difficult. This would give them a helpful nudge.

I have lived in the US and paid taxes there. Many people choose to overpay somewhat, preferring to receive a refund every April rather than a bill. Advertisers know those cheques are entering postboxes at that time, and promote their wares accordingly. The same would happen in the UK. Knowing those refunds are landing on doormats would encourage advertisers to plug products. Those lump sums might be used to help children with university and college fees, or toward a deposit for a mortgage, or maybe a new car or a foreign holiday. It would be like a second Christmas coming to boost the economy with extra spending.

It would incorporate some flexibility, too, in that people would mind receiving a lower rebate, if this were necessary, less than they would mind a tax increase. The rebate could, if this were thought desirable, be linked to the state of the national economy. Rebates can be tweaked in innumerable ways.

There is no reason why this need would to impose additional bureaucracy costs. A conventional cut from 20% to 18% would have to be calculated so that lower PAYE rates could be applied. The rebate system would involve the same calculation, but have it paid as an annual rebate instead of by lowering monthly payment rates. Indeed, the Treasury might prefer it because they could benefit from the interest they would earn on the money until it was repaid.

The Chancellor who introduces the rebate system of lowering taxes might well incur the gratitude of taxpayers, those who would like receiving lump sums ever year. And the investment and spending they would stimulate could give the economy an extra little kick every year.

Categories: Current Affairs

We can't see it ourselves - Facebook's Libra

Fri, 21/06/2019 - 07:01

As is so often true we find ourselves echoing Craig Pirrong here. We can’t really see what problem it is that Facebook’s new Libra solves. There being, to us at least, two major problems with what Libra actually is as well.

It’s a stablecoin - that is, it should have a fixed and static value. This is most useful if we’re to regard it as a method of payment. Except the valuation is to a basket of currencies. Which means that when compared to any one currency it is of course not a stablecoin at all. That translation into real world currency value is thus always changing. Not a useful attribute of a means of payment.

The other is the risk of temptation:

I note in passing that low interest rates destroyed the traditional FCM model which relied on interest income from customer margins as a major revenue stream (as Facebook is proposing here). Ask John Corzine about that, and look to the experience of MF Global.

If there’s a pool of funds which the operator of the pool keeps the interest from there’s always that temptation to chase returns on that pool. Higher returns meaning either greater risk of less liquidity. Which is indeed what happened at MF Global and could be said to be the problem that Neil Woodford’s funds are suffering from.

That we don’t know whether a new adventure will solve a problem or not is precisely the argument in favour of markets and entry into them so we’re obviously not saying that Libra should not happen or not be allowed. But it is true that we can’t quite see what problem will be solved here.

Categories: Current Affairs

Two technological leaps

Thu, 20/06/2019 - 12:01

The date of June 20th marked two major technological breakthroughs. On that date in 1819, the steamship Savannah completed the first ocean crossing by a steamship, pointing to a future of fast sea transport. And on June 20th, 1840, Samuel Morse patented the telegraph, heralding the dawn of accurate long-distance communication.

The Savannah, built in New York, was fitted with a small steam engine and a supply of pinewood fuel to power it. She actually spent most of the voyage under sail during her 24 day journey, but pioneered the practicality of steam power for ocean voyages. When she appeared off the Irish cost, a fast cutter sped to her rescue, thinking the plume of black smoke from her funnel indicated that she was on fire.

The compression steam engine, used from the 1870s, had a closed cycle of retained water instead of seawater, and meant that less coal was used and needed to be carried. This brought efficient long-haul cargo vessels into use and opened up the first era of globalization as cheap US food and raw materials could flood into English ports.

Samuel Morse's telegraph sent electrical signals down wires. They carried information in the form of a code he invented in which each alphabet letter was assigned a combination of dots and dashes. This made virtually instant long-distance communication possible. Long distance wires were laid in the UK and the US, held aloft on what are still called "telegraph poles" in the UK. The British used the telegraph to communicate in India, and it played a key role in overcoming the Indian Mutiny. "It saved India," said Sir Robert Montgomery, Judicial Commissioner of the Punjab.

In 1861 the first US transcontinental telegraph link was completed by Western Union, linking America's East and West coasts, and providing communication to otherwise-isolated settlements in between, communities that had previously been reliant on services such as the Pony Express. When Marconi pioneered a wireless version of Morse's telegraph, it was fitted to the transatlantic ships, and was instrumental in enabling the Carpathia to pick up 700 survivors from the Titanic disaster in 1912.

Both these technological advances contributed to the globalization we take for granted today. The advent of container ships from 1956 transformed the economics of ocean-going freight, and the advent of mobile cell phones has enabled instant communication in most parts of the world. This globalization has done more to lift the world's poor from subsistence and starvation than anything else that humankind has otherwise achieved. It has enabled vast increases in the trade that generates wealth, and made the poorer countries a vital part of the economy of the rich ones, narrowing the gap that previously separated them.

There are those who oppose this, who talk of domestic self-sufficiency and food miles, and who object to the pollution caused by long-distance freight transport, but it is the wealth enabled by that trade that funds the research to develop and use more efficient and less polluting forms of transport. The steamship and the telegraph were but steps along the way to a more integrated and richer world. Both have been supplanted by more efficient successors, but each constituted the beginnings of a revolution that has continued and is continuing.

Categories: Current Affairs

Why do the French distrust government? Perhaps it's the amount they have...

Thu, 20/06/2019 - 07:01

The particular observation here is about trust in vaccines across countries. Large numbers of people don’t think vaccines are safe. In which, of course, they are correct. Getting out of bed in the morning isn’t safe either - and nor is staying in bed. Nothing is safe, it is always relative risk that we should consider. At which point vaccines are vastly safer than non-vaccines.

However, the observation about vaccines maps over something rather more interesting:

France is more sceptical about vaccine safety than any other nation, research suggests. A third of French people disagree that vaccines are safe, according to the Wellcome Global Monitor survey.

This scepticism over vaccinations reflects the public’s comparatively high distrust of politicians, say experts on France’s anti-vaccine movement. The Wellcome study found France had among the highest levels of distrust of government.

Well, why would the French distrust government? This not being something that can just be blamed upon Macron, it’s rather more deep rooted than that. A useful observation is that the French have more government than just about anyone else. We do generally believe that experience matters, that humans learn through their mistakes. Lots of government leads to a certain dissatisfaction with government.

Aiding us in this analysis is the manner in which Eastern Europeans are also deeply dubious about both vaccinations and the merits and value of government. They, of course, having had lots and lots and lots of government from 1945 or so to 1989.

The thing that truly divides us humans from the other animals - in fact it’s a useful definition of intelligence itself - is that we’re able to learn from the mistakes of others. It’s not necessary for us to make our own errors to get the lesson.

Lots of government makes people unhappy with government. The answer being, therefore, to not have lots of government.

Categories: Current Affairs

Edward Heath's "Conservative" government

Wed, 19/06/2019 - 12:01

On June 19th, 1970, the Conservative Party, led by Edward Heath, was declared the winner of the General Election, and asked to form a government. The result was an upset because previous polls had given Labour, led by Prime Minister Harold Wilson, a comfortable lead. A poll on election day, however, showed a small Tory lead, and the Conservative Party, which the included the Ulster Unionists, gained a majority of 31 seats.

Their term in office under Heath was not a comfortable one. The had been elected on the "Selsdon Manifesto," a radical free market agenda that repudiated the post-war consensus. Soon after taking office, however, Heath abandoned the 1970 manifesto in the face of bitter opposition from the trade unions. He concluded that free market ideas were simply not appropriate in the modern world. His Chancellor, Anthony Barber, attempted a Keynesian-style "dash for growth," printing money like there was no tomorrow, stoking up a massive inflation that provoked union militancy.

The unions never accepted Heath's 1971 Industrial Relations Act, and staged a series of crippling strikes. Heath U-turned on his pledge not to bail out failing businesses by doing precisely that. Government spending increased far ahead of revenues, and he failed to modernize the outdated and relatively unproductive UK economy. The result was a new phenomenon: high unemployment combined with stagnation, or "stagflation." He introduced wage and price controls, both disastrously ineffective.

Heath undermined Britain's relationship with the US and its former dominions by taking the UK into the European Economic Community, not recognizing its ambitions to become a political entity. His downfall was his inability to cope with the 1973 oil crisis caused by the OPEC embargo. He instituted a 3-day week for offices, factories and public buildings, and saw frequent power cuts as militant unions went on strike to bring down his government. The economy went into recession. He called an election in February 1974 asking the electors, "Who governs Britain." They replied, "not you," and removed his majority. Labour formed a minority government, and the following year Heath was ousted as Conservative Party leader by Margaret Thatcher.

It did not help Heath that he was widely regarded as arrogant and rude. He went into a massive sulk that lasted for years, refusing even to mention the name of "that woman." Meanwhile Margaret Thatcher adopted the free market policies Heath had discarded, and from winning the 1979 election, used them to take Britain to renewed growth and prosperity. She succeeded where Heath had failed in taming the unions. She abandoned controls that he had brought in and that Labour had continued. Britain boomed, taxes were lowered, jobs were created, and people who had been dependent on the state now bought their own homes and often shares in the newly-privatized state industries. The ones that Heath had needed to subsidize massively now became profitable private businesses that paid taxes instead of consuming them.

History has not looked kindly upon Edward Heath and his administration, and is unlikely ever to do so. Even the museum at his home, to which he left the vast bulk of his estate to establish in his memory, failed to attract enough visitors, leading the trustees to seek permission to close it down and sell off its assets to other charities. A compromise was reached in which it remains open for part of the year as a centre for charitable activity related to Heath's interests, principally yachting and music.

Categories: Current Affairs

Listeria's not a reason to bring NHS catering in house

Wed, 19/06/2019 - 07:01

Listeria’s an excellent excuse to bring National Health Service catering in house, it’s just not a good reason to do so. But that seems to be the way Matt Hancock is taking matters:

Eight NHS hospitals have been hit by the listeria outbreak which has killed five patients, the Health Secretary has revealed.

Matt Hancock made the disclosures as he said he was keen to see the health service take NHS catering back in-house, in a bid to improve safety.

The Health Secretary on Monday named six NHS hospitals which have been hit by the outbreak, linked to pre-packed sandwiches and salads, as he vowed to “take the necessary steps” to restore trust in hospital food.

That sandwiches are made by this group over here, rather than that group over there, doesn’t particularly increase nor decrease the risks of food bourne illnesses like listeria. It’s possible to argue it either way in fact. Centralisation might mean higher standards but greater damage if and when they’re breached, while decentralisation out to each individual hospital would mean any particular outbreak being less damaging but it could raise the number of them.

Mr Hancock has now set out plans for a “root and branch” review of hospital food, to improve its nutrition, as well as its safety.

And he said he would be keen to see an end to outsourcing of hospital food.

He told the Commons: “There are dozens of hospital trusts that have brought their catering inhouse and found that you get better quality food more likely to be locally produced and better value for money by bringing the delivery of food services in house. And that is something we are going to be examining very closely because i am very attracted to that model and it also has the potential to reduce the risk of safety concerns like this.”

Clearly he already wants to do this anyway. Listeria is an excuse, not a reason.

Categories: Current Affairs

Waterloo – the victory that set the future of a continent

Tue, 18/06/2019 - 12:01

It was the battle that determined the shape of Europe for decades, and which led to the UK's hegemony on the world stage. It was fought on June 18th, 1815, at Waterloo. Wellington had, as always, inspected the battlefield beforehand, noting which low rises would conceal troops of his Anglo-Dutch army, and decided to give battle at the Mont-Saint-Jean escarpment. Napoleon had performed his usual manoeuvre of rushing his troops forward to attack his enemies one by one before their forces could combine. He defeated Marshall Blücher's Prussians at Ligny, before they could combine with Wellington's forces. Crucially, however, he overestimated his victory, and underestimated the moral courage of Marshall Blücher.

Blücher had retreated in good order and promised Wellington that the Prussians would join him at Waterloo before the day was out. Given that pledge, Wellington committed to battle and withstood repeated French attacks throughout the afternoon, with both sides sustaining heavy casualties. Realizing that the Prussians were approaching, Napoleon committed his Imperial Guard, the "Immortals," in a desperate last attack. Never before repulsed, the Imperial Guard retreated under heavy fire, even as Blücher's Prussians entered the field, with General Bülow breaking through on the French right flank. Wellington counter-attacked, sending the French into headlong retreat.

Blücher had delivered on his promise, and his entry onto the field late in the day, swung the battle. Napoleon fled in his carriage, leaving his personal possessions as well as his troops, bringing an end to French dreams of ruling Europe, and closing the page on the years of constant war that had followed the French Revolution. On 21 June, 1815, at London's East India Club, Major Henry Percy presented the Prince Regent with four captured French eagles and Wellington’s victory despatch from the Battle of Waterloo. The news was then announced from the balcony to the crowds that had gathered below. The room where this took place is now known at the Club as the "Waterloo Room".

Four decades of comparative peace ensued, marked by scientific and technological progress and economic expansion. The UK gained most from the victory. It put an end to centuries of Anglo-French warfare, and left Britain's navy ruling the high seas, protecting a worldwide empire "on which the sun never set." The Industrial Revolution, briefly interrupted by the needs of war, now accelerated, bring unparalleled material prosperity to the nation. Britain became, for a time, the workshop of the world, exporting the machines that powered the industries that other nations were developing in her wake.

Wellington himself, the last non-royal person awarded a dukedom, became a successful Prime Minister, helping to usher through the major reforms that transformed Britain into a modern power. At the Great Exhibition of 1851, the one that showed off Britain's technical, scientific and manufacturing expertise to the world, it is reported that the loudest cheer from the crowd was for the 82-year-old warrior himself. When he died the following year, Queen Victoria insisted on a lavish state funeral. Napoleon, meanwhile, had died in 1821, a solitary prisoner on the Atlantic island of Saint Helena.

It could easily have gone otherwise. Wellington said, "It has been a damned nice thing — the nearest run thing you ever saw in your life," (often summarized as "a damn close-run thing"). In his official dispatch, Wellington wrote that victory would not have been possible without the timely assistance of Marshall Blücher. It was the battle that day which determined that liberal Britain, rather than autocratic France, would come to dominate world culture, and that English would become the lingua franca of the modern world.

Categories: Current Affairs

The entirely ghastly idea of National Service

Tue, 18/06/2019 - 07:01

To be of service is of course entirely normal - it’s the way we all make our living, producing something of value to others. National has its value too but the idea of National Service becomes repellent. For it’s the forced theft of the time and effort of the individual. As is conscription itself.

Thus this is an horrific idea:

Earlier this month, though, some of his growing fan club were aghast that he had taken leave of his senses. In one of his social media salvos, Stewart announced that if he were to become prime minister, he would introduce compulsory national service for every 16-year-old. Cue horror: compulsion? Service? Marching jackboots and itchy blankets? Even though Stewart made clear this would not be military service, the Twitter hordes were up in arms.

But national service is an idea whose time has come (again). Bear with me. I know that this is a proposal fetishised by a certain kind of person; the kind who thinks life was better when teachers could wield the cane, when men were men and women wore skirts, when bad people swung from the gallows. Yet strip national service down to its bones and what is it but a collective endeavour for all young people, a mixing of tribes, a rite of passage into deeper patriotism? And this — in these rancorous, anxious times — is exactly what our country needs.

It always is something imposed by those too old to have to undergo it. We’d have rather more sympathy - more but not enough - if it were politicians insisting that politicians must lose some years of their life to the State’s force, or columnists ditto. That other people, those too young to be able to successfully complain, must do so isn’t, we think, quite fair. Actually, it’s repellent.

It’s also true that for any parent who wishes to so encourage their child, for any child who so wishes, there is already that option. Over and above Scouting and Girl Guides there are varied forces related cadet forces, The Woodcraft Folk, Pathfinders, HaNoar HaTzioni, Habonim Dror and the Boy’s Brigade - which we’re pretty sure includes girls at this point. And that’s just from a idle scan of Wikipedia, we’re sure there are many more out there.

That is, everyone who wants to do such a thing may. The only addition that National Service would bring is the power of the State to force. And that’s what’s so repellent about the idea of course.

Categories: Current Affairs

When Lady Liberty arrived in New York

Mon, 17/06/2019 - 12:01

It was on June 17th, 1885, that 200,000 people went to the docks at New York to greet the French steamer Isère as it arrived with the Statue of Liberty. The statue was not in one piece. Having been put together in France, it was disassembled and put into crates for its transatlantic voyage.

The statue, made of copper sculpted by Frédéric Auguste Barthold clad onto an interior framework built by Gustave Eiffel, was a gift from the French people to those of the United States. Based on the Roman goddess of liberty, she holds a torch in her right hand and a tablet in her left hand, inscribed with the Roman numerals that represent July 4th, 1776, the date of America’s Declaration of Independence. At her feet is a broken shackle and chain to denote the recent abolition of slavery in the US.

Visitors can climb inside it via 2 spiral staircases leading to an observation deck in her crown. Lifts were installed during renovations. Access to the torch via a long, narrow ladder is now restricted to staff, but originally the public could ascend. There is a brass plate, originally mounted inside the pedestal, but now in the museum in the statue’s base, that contains the famous words of “The New Colossus,” a sonnet by Emma Lazarus.

"Keep, ancient lands, your storied pomp!" cries she

With silent lips. "Give me your tired, your poor,

Your huddled masses yearning to breathe free,

The wretched refuse of your teeming shore.

Send these, the homeless, tempest-tossed to me,

I lift my lamp beside the golden door!"

Generations of immigrants were inspired by the sight of Lady Liberty as they sailed into New York, though some might have felt misgivings at being described as “wretched refuse.” She has been a powerful symbol of freedom ever since she arrived there herself. She reminds us to keep aloft the light of liberty, and to value the constitutions that protect it.

Her fame is such that she has appeared in many movies. The torch was the location of the climax of director Alfred Hitchcock's 1942 movie “Saboteur.” The statue’s most famous appearance was in the 1968 picture “Planet of the Apes,” in which it was seen at the end, half-buried in the sand. It was toppled in the science-fiction film “Independence Day,” and in “Cloverfield” it was beheaded by the monster.

The Statue continues to inspire to this day, and sees troops of schoolchildren and tourists visiting her to learn about the value of liberty and the need to guard it. Some think democracy is an end in itself, but the statue reminds us that it is a means to an end, and that liberty is that end. The US is not a democracy, though democracy is embedded in its fabric. It is instead a Republic, one whose Constitution was designed to protect the liberty the statue represents.

Categories: Current Affairs

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