Blogroll: Adam Smith Institute

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Updated: 1 hour 22 min ago

Venezuela Campaign: Hungry for change & hungry full stop

7 hours 54 min ago

Since Hugo Chavez declared his ‘Bolivarian Revolution’ in 1999, Venezuela has become entirely dependent on imported food. In 2014, it was estimated that 70% of all goods, including food, were imported from abroad. Several years’ mismanagement of Venezuela’s key oil industry has crippled the country financially, especially since oil prices halved in 2014. Price controls on basic foodstuffs, as well as strict controls on the ability to convert bolivars to dollars, has made food unaffordable for most Venezuelans. Many Venezuelan companies cannot afford to produce food for the price set by the state, and have simply gone out of business.

As an example of just how severe the crisis has become, the monthly minimum wage can feed a family for less than a day. Around 10 million Venezuelans, or a third of the population, are on the minimum wage. Even for those who earn more, living has become a daily struggle: one would need 55 times the minimum wage to feed a family for month.

The impact on the country’s health has been devastating. Venezuelans reported losing an average of 8kg in 2016, and 11kg in 2017; more is expected as hyperinflation destroys Venezuela’s currency. Around 8 million Venezuelans only eat two meals or fewer a day. Children under 5 are most at risk during this crisis: the charity Caritas have estimated that half are suffering from malnutrition or are at severe risk. In 2018 alone, 300,000 child deaths have been linked to malnutrition.

Most Venezuelans are now anemic as their diet lacks the iron usually found in meat, green leafy vegetables and maize flour, which have all become increasingly scarce. Medical conditions linked to malnutrition are on the rise, and Venezuela’s hospital’s are unable to cope as they too suffer from shortages made worse by an embargo on international aid.

This is happening now. The Venezuelan people are running out of ways to cope with the severe lack of food. Whatever needs to be done, must be done soon.

More information on the Venezuela Campaign can be found on their website

Categories: Current Affairs

If only people bothered to check the facts

10 hours 6 min ago

Rhiannon Lucy Cosslett, writing in The Guardian, wants to tell us all that having a child in today's Britain is a very difficult thing. House prices, low wages, the cost of childcare, the list of reasons not to goes on. This leads to our low fertility rate:

 These are quite some mixed messages. The Office for National Statistics reports that the birthrate has reached a 12-year low as couples have fewer children or defer having them until later. It has been falling since 2012, while the average number of children expected to be born to each woman (called the fertility rate) has fallen to 1.76. This, the Times reports, “coincides with a long squeeze on wages and weak pay growth after the 2008 financial crisis, and is likely to reflect sustained pressure on household incomes”.

There is, we are told, a solution to this. What we shouldn't do:

Brexit is only likely to decrease workers’ rights. There is so much focus on emulating and trading with the US, but doing so is hardly likely to improve our birthrate. It’s one of the worst countries in the world for maternity law.

The US fertility rate is almost exactly the same as that in the UK. And what we should do:

At the same time, we should recognise that in terms of supporting and encouraging would-be parents and new parents, the UK remains well behind other European nations. It is by following their models that we will see families thrive.

Well, yes.

In 2016, the total fertility rate in the EU-28 was 1.60 live births per woman

The UK's (and that of the US) fertility rate is above that of the rest of the EU, that place we're supposed to emulate so as to make it easier for people to have children and thus raise our fertility rate.

We really are liberals around here and we're entirely fine with people having different opinions to our own. But we begin to object when they decide upon a different reality.

Categories: Current Affairs

More than just a linguistic point, optimum means best, not fastest

Sat, 21/07/2018 - 07:01

This is very much more than just a linguistic little quibble, this is actually a vital point about the economy and the world. Optimum does not mean fastest - nor highest, cheapest, flattest nor any other -est than best.

Just 44 postcodes out of 1.7m are using optimum broadband speeds, Ofcom figures show.

Analysis of internet speeds suggests that a tiny minority of British households are accessing the "gigabit speed" broadband, which is more than 20 time faster than the current average. 

Best here meaning the least bad combination of the various different attributes of whatever it is that we're talking about.

Yes, the FT's map of broadband speeds is interesting. But to say that gigabit speeds - meaning fibre to the door - is optimum is to miss entirely that meaning of best.

What is the cost of gigabit speeds? What is the value of having gigabit speeds? Equally, what are the costs of having slower speeds - say using ASDL - and the benefits of doing so? Actual research here seems to be a bit (sorry) out of date here but we can show that 2 Mbits definitely increases economic growth, anything more than that we're just projecting the effects from that earlier proof.

The larger point of course being that in the economy, as with life in general, we've always got some number of competing interests. Price/performance being only one such but an important and obvious one. That McLaren  is definitely faster than the Fiesta and definitively more expensive. It's not obvious that either are optimum - depends upon the task. One would be better for doing the shopping, the other perhaps to impress.

So it is with broadband. Faster is nice, sure, but we've still got to ask ourselves what the marginal benefit is as compared to that marginal cost. That's the only way we can work out what is the optimal solution. To forget this would mean that we'd festoon the country with fibre to no very good gain.

And no one would want to do that, right? 

Categories: Current Affairs

The National Health Service: A Cultural U-Turn

Fri, 20/07/2018 - 14:32

Contemporary Britain has redefined and extended the roles of the National Health Service from simply treating illness to its prevention, educating the masses and extending life. In its plight to meet all of these criteria, or face torrents of criticism, the NHS has reached a stalemate on its 70th anniversary. Despite receiving £116.4bn in funding (2015/16), it is under fire for shortages of staff and beds as well as prolonged waiting times.

Now, there are calls to modify the NHS from the likes of Mark Pearson (the OECD’s Deputy Director of Employment, Labour and Social Affairs). Others, such as Dr Kristian Niemietz of the Institute of Economic Affairs, have advocated the complete discontinuation of the NHS and its replacement with universal healthcare. The latter may not be necessary if significant changes are made to British attitudes towards health and the norms and practices within medicine.

Increasing the accountability of British citizens by adopting an insurance-based healthcare system is a possible solution to the high demand hospitals face, especially the pressures felt during the winter months. If people have to make insurance payments to receive treatment, the financial commitment is likely to cause a shift in British attitudes towards health, i.e. people will be more compelled to maintain their health without professional medical intervention.

Lifestyle-related illnesses in particular would see a significant decrease. Giving people more personal responsibility for their health could be the key to increasing general health by establishing a more health-conscious culture in Britain, reducing long-term costs to the NHS.

Switzerland exemplifies this: each individual pays insurance premiums worth up to 8% of their annual income. As of 2014, Swiss people are spending an average of 6% of their income on healthcare (this is predicted to increase to 11% by 2030) compared to 5.7% of taxable income in the UK. The system is aimed at promoting health, reducing costs, and encouraging each individual to be responsible for their own health.

Right now the NHS is hampered by the mantra that it is truly “the envy of the world” and any reform from its current model would amount to dismantling Nye Bevan’s legacy.  If this idea is maintained, an insurance-based system will be politically infeasible.

This is not to say that paid healthcare, co-pay or insurance systems would result in a utopian society in which nobody is sick - for instance, diabetes is equally prevalent in Switzerland and the UK (approximately 6%).

But sustaining life is arguably the most vital function of health services, and it appears to be a greater strength of insurance-based healthcare. Switzerland has one of the highest life expectancies in the world and one of the lowest mortality rates in Europe. Notably, the 2015 Euro Health Consumer Index described Swiss healthcare as excellent.

In light of this, the extent to which the NHS can be considered “the envy of the world” becomes questionable. Comparisons with Switzerland and other European nations suggest that British healthcare may not even be the envy of the continent, let alone the world.

At this point in time, the state of the NHS is undeniably inadequate and therefore cannot continue; adult five-year cancer survival rates in the UK are often lower than the European average. For colon cancer, rates were up at 58% by 2007, whereas in the UK, rates were at 52%. Even if sweeping reforms currently lack support from the government, the question of the possible changes that could be implemented in the meantime remains. There are various incremental reforms that could significantly improve outcomes. A starting point for this could be rectifying attitudes and practices deeply ingrained in clinical settings.

Perceptions of accountability must be revised among medical staff. Matthew Syed’s Black Box Thinking addresses the issues of failure and blame at length. Syed makes pertinent comparisons between the industries of healthcare and aviation. While the Aviation Safety Network has reported 2017 to have been the safest year in aviation history with only 44 fatalities in 10 airliner accidents, a report has found that medication errors alone could be causing over 22,000 deaths in the NHS as of 2018.

Syed attributes this difference to the stark contrast between the procedures following accidents in the two industries. When a patient dies unexpectedly, this is met with blame and back-covering; Syed used the real-life story of a woman who died in a routine operation as an example of this. When a plane crashes, while the media reacts with blame and outrage, the aviation industry itself responds with a full analysis of the jet’s black box and body. In fact, Syed goes as far as to suggest that aviation investigators welcome mistakes, which might sound morbid, but he is referring to the opportunity to improve a system when its flaws are exposed.

Elsewhere this approach is going to become more and more important. When cars crash because of human error the tragedy is personal but few people learn lessons from what went wrong. When an automated car crashed in February killing a pedestrian the entire fleet of self-driving cars learned lessons.

This is applicable for our healthcare system; the NHS needs to establish a climate in which staff are able to come forward with their errors. Those very same mistakes, if exploited fully, are the route to improvement. But only if the incentives are right.

Another area for cultural reform in the NHS is the need for an openness to openness, if you will. Interdisciplinary collaboration can prove to be crucial in the progression of any organisation. For instance, the use of graded assertiveness, also known as the P.A.C.E. model of communication, is now commonplace in nurse training. P.A.C.E. (which stands for Probe, Alert, Challenge, Emergency) addresses what social psychologists call the legitimacy of authority - in the hierarchy of staff in a hospital, nurses are liable to see doctors as superior to them and therefore obey them unquestioningly, irrespective of what they think. Graded assertiveness provides them with a method of communication that can enable them to overcome the intimidation they may experience when attempting to express themselves with urgency in high pressure scenarios.

Introducing P.A.C.E. required honesty from the healthcare industry regarding the existence of a hierarchy and the fact that under pressure, doctors can become error-prone. Similarly, a candid evaluation of the predictive value of the NHS is required.

Open Healthcare has been proposed as a method of increasing the predictive abilities of patient records by combining them with data from healthtech companies and giving patients greater access to their personal records. It is thought that patterns can be drawn from the collated information, giving a greater insight on the causal relationships between genes, lifestyle habits, and illnesses, which could better inform future diagnoses and treatments. We could live longer and happier lives. With the ONS estimating 24% of deaths could be postponed through lifestyle choices, Open Healthcare (and openness in healthcare) could be key to allowing people to make better informed decisions over their own lives.

Spending more and more on an inefficient system in the hopes of achieving miraculous change is comparable to adding water to embers and expecting an inferno. Funding is imperative if some semblance of the NHS is to continue, but there has to be difference in the way everyone (from patients to bureaucrats, from doctors to contractors) approaches healthcare in the future.

Nonetheless, the necessary change may not be as drastic as some suggest, particularly critics advocating the total dissolution of the NHS. It is more than likely that the seemingly insignificant things, like nurse-doctor interactions, can collectively overturn an entire system, yet leave the elements people want – free services at the point of use – intact.

Fadekemi Adeleye is a research intern at the Adam Smith Institute.

Categories: Current Affairs

In Defence of Uber

Fri, 20/07/2018 - 13:08

It hasn’t been a great 18 months for Uber. Both Transport for London and Sadiq Khan indicated that they would prefer unions in the ongoing dispute; even the European Court of Justice waded in with attempts to regulate the disruptor.

Despite the fact that Uber had been used over 2 billion times by the end of 2017, policymakers seem determined to inhibit the company’s growth.

However, regulating Uber will not only have a detrimental effect on consumers, but also on its workers and the future of the gig economy in general. The ASI’s Sam Dumitriu opposed regulating Uber even before the feeding frenzy, warning that calls to treat drivers as employed staff rather than self-employed sole traders would harm those who are “looking for increased flexibility, the ability to be their own boss, to choose their own hours, and to be able to reject any job” – and that’s not to mention consumers who often rely on Uber’s lower pricing and tracking tech to ensure a safe ride home from work or a night out.

Among those who criticise Uber, there is often a lack of consistency in their arguments. It is unreasonable to complain that Uber (or similar gig economy disruptors) are working to the detriment of workers’ rights. As I’ve previously mentioned, drivers have increased flexibility and set their own terms. They dictate their own office space – you won’t see Uber drivers working 15-hour days in dubious conditions unless it’s their choice to do so, and if it is, they can earn an average of £16 an hour for it. Some may claim that leaving Uber unregulated has led to an increase in sexual assaults – this is not true. Despite some issues, Uber is the safest way to travel on the road and has been linked to reductions in assault and the harms of drink driving. Even pro-green campaigners struggle to make complaints – Uber tends to fill its cars, meaning less congestion and less pollution. Additionally, Uber plans to send a fleet of electric cars into British streets in the near future.

Essentially, Uber epitomises disruptive technology and the gig economy, which we should be welcoming, not rejecting. The benefit of a free market is that it allows companies like Uber to innovate and drive up standards through competition.

Green, profitable employment and higher standards of consumer safety: the fact that all this is available for a lower price than that of a black cab is proof that the gig economy (and, whisper it, capitalism) is still working – provided we let it. The government should do so, and listen to ordinary taxpayers and workers rather than taxi unions.

Matt Gillow is runner-up of the 18-21 category of the ASI's 'Young Writer on Liberty' competition. You can follow him on Twitter here.

Categories: Current Affairs

Good intentions and the road to hell

Fri, 20/07/2018 - 11:34

Saint Bernard, the 12th Century Abbot of Clairvaux in France, is cited as saying ‘the road to hell is paved with good intentions’. Legislators often forget (or ignore) this saying when they introduce regulation and legislation, often as a knee-jerk reaction to some perceived problem.

Regulation is often the result of good intentions: the apparent need for legislators to send moral messages and to save people from themselves and their own choices.

A stark example of ill-considered regulation is from America’s attempt to prohibit alcohol in the early 20th Century. Urged on by the Temperance Movement and the Anti-Saloon League, who perceived alcohol and drunkenness as a national sin, the United States banned the production, movement and sale of alcohol. Within minutes of prohibition taking effect in January 1920, armed criminals started raiding warehouses to steal whiskey.

Americans discovered that there was a big difference between using the law to prohibit something and actually enforcing that prohibition. The illegal manufacture and sale of alcohol boomed. Criminal gangs expanded, corruption blossomed with police and politicians being paid to turn a blind-eye to various profitable, illegal activities.

As Mafia-style gangs expanded, so did their criminal activities, including prostitution and gambling. Al Capone was estimated to be earning $60 million a year from his criminal operations.

As the profit of criminals went up, revenue to the government decreased significantly. Washington State University estimated that in 1914, the government income from alcohol tax alone was $226 million. Rather naively, it was believed that the reduction of revenue from alcohol would be offset by increased sales of soft drinks. This never happened.

Alcohol production had been a big business in America, with factories and large workforces employed. Overnight these factories closed and thousands of workers were made unemployed. The negatives significantly outweighed the positives and prohibition itself was abolished 13 years later.

The lessons from prohibition do not seem to have been learnt. The UK’s Misuse of the Drugs Act 1971 has not prevented the large scale misuse of drugs. It has allowed untaxed and unregulated substances to be consumed by vulnerable people. The State of California estimates that it could raise $643million annually following its recent legislation of recreational cannabis. However, in the UK, drug supply is now often just one source of a vast income enjoyed by high-level criminal organisations.

Nobody would suggest that it would be wise for crack cocaine to be freely available to be consumed by all. But generally speaking, governments need to trust their citizens to do the right thing.

Emmie Lowes is runner-up of the Under-18 category of the ASI's 'Young Writer on Liberty' competition.

Categories: Current Affairs

Lord Blencathra is only half right here

Fri, 20/07/2018 - 07:01

It is obviously pleasing to be able to note a politician who is at least half correct - given, you know, the average propensity for truth and knowledge among that tribe. But it is still only half right, sadly:

He said: 'It is nonsensical to retain these grossly excessive calorie levels now. What's worse is they are being exceeded.'

He added: 'We seem to be waiting for a magic pill so we continue our gluttony and lazy lifestyle and hope that the NHS will fix it for us without having to change our behaviour one iota.' 

'If we scoff more calories than we burn off then we get fat and obese. Obesity is not an illness, it is a lifestyle choice.

 From Hansard, it's this part which isn't correct:

We are creating a nation of fat, idle people who will bankrupt the NHS, and we should have the courage to say so in blunt terms. Our strategy must be threefold. First, it must tax excessively sugary foods—all of them, not just some—and penalise excessively large food items. Secondly, calorie intake guidance must be revised downwards to recognise our indolent, lazy lifestyle. We need constant campaigns on that. Planning guidance should force councils not to have high streets full of takeaway food shops; research suggests that locations with supermarkets provide better diets than streets without such shops. Thirdly, we must have a uge campaign to get the whole nation exercising. Exercise alone does not compensate for overeating but it has a part to play. I too commend the Daily Mile initiative, which gets children exercising for a mere 15 minutes per day. It should be compulsory in all schools. My wife has tried to force me to do it as well.

There is no easy answer, but at the moment I do not think we are even asking the right questions.

That list of what must be done follows from the incorrect assumption being made. That obesity costs the NHS money. It doesn't. As we've pointed out before:

The researchers found that from age 20 to 56, obese people racked up the most expensive health costs. But because both the smokers and the obese people died sooner than the healthy group, it cost less to treat them in the long run.

On average, healthy people lived 84 years. Smokers lived about 77 years and obese people lived about 80 years. Smokers and obese people tended to have more heart disease than the healthy people.

Cancer incidence, except for lung cancer, was the same in all three groups. Obese people had the most diabetes, and healthy people had the most strokes. Ultimately, the thin and healthy group cost the most, about $417,000, from age 20 on.

The cost of care for obese people was $371,000, and for smokers, about $326,000.

Yes, those are American numbers but they apply here too.

We thus have the proof of Hayek's contention, that government provided health care will mean government trying to run our lives so as to suit the government health care system. But worse than that we've also got the basic arguments being based upon untruths. Fatties save the NHS money, thus trying to reduce the number or wideness of fatties to save the NHS money just doesn't work. That even despite whatever concerns we might have about healthcare serfdom.

Categories: Current Affairs

Young Writer on Liberty 2018 Winners

Thu, 19/07/2018 - 16:26

We're delighted to announce the winners of our 2018 Young Writer on Liberty competition, and will be showcasing some of their work in the coming days! The theme of this year's competition was 'Ideas for a Freer, Better, Richer World'. Entrants wrote three, 400-word articles on this theme, each focusing on one of the ASI's three areas of policy priorities for this year: boosting productivityinnovation without permission, and practical liberalism.

As usual, we received many entries and competition was fierce. There were categories for the Under-18s and the 18-21s, with a winner and a runner-up in each.

The runner-up of the Under-18 category is Emmie Lowes, and the winner of the Under-18s is Caitlin Keenan. The runner-up of the 18-21 category is Matt Gillow, and the category winner is Adelina Fendrina.

Runners-up will have one of their entries showcased on the ASI blog tomorrow, and category winners will have all three of their pieces posted next week.

Category winners will also receive £150 prize money, whilst both winners and runners-up will receive boxes filled with liberty-related books.

Keep an eye on the blog to read their entries!

Categories: Current Affairs

There's a reason that wages are as they are

Thu, 19/07/2018 - 07:01

Quite why wages are as they are seems to mystify some people. Why isn't it true that the people doing every and all jobs get to live rich and fulfilling working lives? The answer being, well, let one of those who stands around gape mouthed in amazement at the workings of markets take up the story:

Aqueue was already forming by the time Isaac Oti turned up for work before dawn that May morning. He came back a couple of hours later and – “boom!” People were spilling out of Queen Mary college, past the gates, past the engineering faculty. They were standing out on the road three or four deep, almost reaching the tube station.

“It was crazy.” Even 10 years later, Oti’s eyes shine at the memory. “CRAZY!”

Those excited masses were not lining up for a house, the latest iPhone or a glimpse of Beyoncé. They were waiting for the chance to be a cleaner at Queen Mary University of London (QMUL).

This was pre-crash, pre-Brexit London, in its days of pomp and prosecco, those days when it felt like you could score some kind of job in the capital just by leaving the house. One solitary post on the small-ads website Gumtree had drawn this huge crowd to the East End – for cleaning jobs. But these positions were no ordinary cleaning jobs. They were what Oti calls “gold standard”. The lucky few successful applicants would start on the London living wage; at a full 30% above the minimum wage. Equivalent positions paying that rate were rarer than hen’s teeth. Not only that, but rather than working for some cowboy contractor, they’d be university staff – earning a decent pension, good holidays and sick pay.

Add in those benefits and a reasonable guess is that those jobs were paying 60% above market wages for those cleaning jobs.

Meaning that the students - in our loan financed system - are having to pay more for their education than if the cleaners were being paid the market rate. Or in a tax financed system, the taxpayers would be fleeced even more to pay for it all. Making things more expensive isn't quite the way to raise living standards now, is it? 

But there's more to it than that. Note the entire missing of the more basic point about why we use markets and prices in the first place. We desire to arrive at the market clearing price for whatever it is. Here, the price at which the desired amount of cleaning takes place, all those who desire to clean for a living being able to do so. That's what the market clearing price actually means, that we're matching supply with demand.

Which is, of course, why we use markets and the price system more generally. Because if we don't, as here, then prices and market clearing still happen, we've just replaced the clarity of money with the miasmic effects of queues. This is not an improvement in matters as the Venezuelans trying to use the supermarket have found out.

We positively desire employers to pay market prices as wages just as we want all markets to clear. Because the systems which don't are worse. 

Categories: Current Affairs

An interesting view of how government works

Wed, 18/07/2018 - 08:01

Apparently we're all right to be sceptical of how that 0.7% of everything everyone does is spent. That official development aid budget is indeed wasteful, even corrupt. This is something admitted by the bloke in charge of spending the cash extracted from us.

Well, that's nice, so, what are we going to do about it? Reduce the amount? Do it better? Stop wasting it? Ah, no, that's not how government works, is it?

Public criticism of foreign aid spending as "corrupt" and wasteful is "valid", the civil servant in charge of the International Development department has admitted.

Matthew Rycroft, Dfid’s Permanent Secretary, also suggested that politicians are out of touch with ordinary people by not being more sceptical about the aid budget.

Dfid is so concerned that it is trialling a new programme which involves British aid workers telling their own stories in local papers about the value of their aid work.

Not wasting money isn't what government is for. Instead, we should up the propaganda so that money can continue to be wasted upon corruption.

Which is an interesting thing to know about government, isn't it? 

Categories: Current Affairs

Systems have to be good enough, not perfect

Tue, 17/07/2018 - 07:01

One of our bedrock beliefs around here is that humans are fallible, so therefore will be any system for anything built, run and maintained by humans. It's one of the reasons we're so in favour of market solutions, markets containing the feedback mechanisms to kill off the truly dreadful mistakes in a manner that planning - with its fondness for reinforcing failure - just doesn't.

We're thus entirely fine with systems which are just good enough, not perfect. Sure, we struggle more, search for ever less tolerance of failure the greater the stakes at issue but still, we've got to accept that we should only struggle so far.

Tens of thousands of EU migrants could lose their right to be in the UK after Brexit - and the authorities will not know who they are, a new report warns.

EU citizens must register using an online system to secure "settled status" when the UK leaves next March.

The government has said it expects about 3.5m applications.

But the Migration Observatory said ministers had no precise figures for how many EU citizens were living in the UK and how many plan to stay.

The think tank, which is based at Oxford University, has previously warned that thousands of EU citizens could inadvertently become illegal residents in the UK after Brexit despite meeting the required criteria to stay.

The claim is that we must now go and find who these tens of thousands are and, well, do something. Our reaction is rather different. Objectively, asking people to use an app, upload a photo and pay a reasonable processing fee seems reasonable. And an error rate of tens of thousands among 3.5 million sounds remarkably close to perfection for government work. We'd suggest that this is about as good as it gets, better left well alone in fact.

That idea that the perfect is the enemy of the good applies here. For how intrusive would the State have to become to approach solving the last 0.8% or so of the problem? We don't even manage that for investigating murders, do we?

Categories: Current Affairs

At least some of what we needed to do about house prices has already been done

Mon, 16/07/2018 - 07:01

That British house prices are too high is one of those generally accepted parts of the political conversation. It's even one where we agree that something must be done. The part where we might disagree with the consensus is over what must be done. For - OK, part of at least - what must be done has been done.

House prices are too high, something must be done to lower them. Great:

The value of Britain's housing market has fallen by £26.9bn, or 0.33pc, since the start of the year, as growth in the North East and Wales has failed to counteract falling prices in many other regions across the country.

The nation’s homes decreased in value by an average of £927 each between Jan 1 and June 30 this year, and are now worth a collective £8.2 trillion, according to figures from property site Zoopla.

Something has been done therefore. Whether enough has is still open to question, certainly, although it's worth noting that those are nominal prices, we can add another percentage point or two to the decline for general inflation. So too to affordability, given that while real wages aren't rising strongly they're not falling much either.

Housing is becoming more affordable.

This rather means that we don't need to nationalise the entire housing stock (something we've seen suggested in The Guardian), nor use taxpayers' funds to build 300,000 council houses a year, as seems to be the official policy of more than one political party. In fact, it means that something which needed to be done has been done.

As our own analysis of this problem, repeated ad nauseam, has been, the problem is not the price nor cost of houses, it's the value of the planning chitty to allow a house to be built. We're not short of land, we're short of land which can be built upon. The solution is therefore to issue more such permits.

Policy in recent years has been to issue more permits. Not in the manner we would prefer, the destruction of the structure of the planning system itself, but more have been issued and in areas people might actually want to live in too. As we can see, prices are becoming more affordable.

As we say, something needed to be done and something was done. Remarkably for government action the right something was done too. As ever with government action the right thing being for government to do less. Stop banning people from building where people desire to live and house prices will come down. We did, they have, why not do more of what works?

Categories: Current Affairs

This isn't really quite what free speech means, nor a free press

Sun, 15/07/2018 - 07:01

Ofcom has decided that we all need to be protected from ourselves:

Most people reading news on unregulated platforms such as Google and Facebookcannot tell the difference between it and other content, Ofcom has warned.

The regulator said the reason was because social media, often accessed on smartphones, ‘blurs the boundaries’.

This has a ‘detrimental’ impact on how users question the world around them and ‘important implications for our democracy’.

The answer being, of course, that an organisation - say, Ofcom - should take responsibility for managing what is fake news and what is not-fake. How surprising, a bureaucracy arguing that it should be paid to extend its tentacles.

The underlying problem here though is rather more serious than just that burst of realism about tentacleness. It is, well, which news is fake? And who gets to decide? 

Imagine that we did have some arbiter of what was true, what was not. Then the definition of truth will be whatever the consensus is, wouldn't it? Something which might well benefit those who agree with that status quo in beliefs but does rather militate against the basic ideas of either free speech or a free press.

Yes, of course, actual free speech and press is messy, chaotic and not as many would like. But that's rather the point, so is liberty those three things. Trying to limit that press and speech will be a constraint upon that liberty too.

Categories: Current Affairs

Venezuela Campaign: Forgotten Refugees

Sun, 15/07/2018 - 06:41

South America has a new refugee crisis. Nearly a million Venezuelans have left their home country in the last 2 years, some claiming that the number may be as high as 4 million. On the 12th of March 2018, the United Nations High Commissioner for Refugees stated that a very significant proportion of those who had left were in need of international protection.

Venezuela’s refugee crisis is driven by the implosion of its economy and the collapse of law and order in the country. Since August 2017, 250,000 Venezuelans have surged into Colombia. In recent months, more than 70,000 have entered Brazil, triggering a state of emergency in Roraima state.

There are warnings that the Venezuelan refugee crisis could surpass Syria’s in scale and speed. The number of Venezuelans leaving their own country could exceed the 1.5 million who left Cuba during Castro’s rule, and has already exceeded the half million who fled El Salvador’s war during the 1980s.

Venezuelans have scattered as far as Colombia, Panama, Peru and Brazil. In January 2018, the Venezuelan government blocked all traffic to and from the islands of Aruba, Bonaire and Curacao in response to the numbers of fleeing Venezuelans. Polls have shown that over half of young Venezuelans remaining in the country want to flee abroad permanently.

These migrants are subjected to difficult conditions at home and little better awaits them abroad. 3,000 troops were deployed to northern Brazil after two buildings housing Venezuelan migrants were burned down. Refugees now represent 10 percent of the population of Roraima’s capital, Boa Vista, putting immense pressure on public services. In Colombia, authorities are conducting operations to severely limit the numbers crossing the border. Guyana has already imposed border controls in response to civilians and military units crossing over in search of food and supplies. Panama deported 308 Venezuelans in January 2018, more than they had deported in the previous 6 years.

Venezuelans fleeing the disintegration of Venezuela face many of the challenges they faced in Venezuela: human rights abuse, poverty, and disease. Only a massive and coordinated response to this crisis will prevent this refugee crisis from spiralling out of control.

More information on the Venezuela Campaign can be found on their website

Categories: Current Affairs

To rather miss the point, we can, and have, shift the Phillips Curve

Sat, 14/07/2018 - 07:01

It's entirely true that unemployment has to be very much lower today than it was in the 70s and 80s for real wages to start to rise. This is an odd thing to complain about though, this has been the point of the labour market reforms we've carried out these recent decades. But still, Thomas Frank wants to complain:

According to Josh Bivens, of Washington’s Economic Policy Institute, you can trace the slow decline of US workers’ bargaining power in the historical statistics. As the years go by, it requires ever lower levels of unemployment to ignite the wage growth that was once the hallmark of good times. “The decades-long campaign by employers to kick away any sources of economic leverage enjoyed by typical workers seems to have worked,” he tells me. “These workers now get real wage increases only during white-hot labour markets.”

This is the central story of the last four decades, the vast social engineering project to which all our recent presidents and both parties have contributed. Next to this stupendous transformation, all the culture wars and flag-fights and stupid tweets fade into insignificance.

Vast social engineering might be overdoing it but yes, a bipartisan attempt to reform this part of the economy.

The why being that it is better for us all if this is so. Think about the business cycle for a moment. We have a boom, growth occurs, then inflation rears its head and we've got to slam on the brakes with an interest rate rise - what we might call an engineered recession. The faster the wages rises occur in said boom the faster we've got to slam on the brakes. So, change the manner in which those wage rises occur and we can let the boom run for longer.

Another way to put this is that Phillips Curve. The point being that we don't have to run along it, or only do so. We can also shift it by changing the underlying microeconomics of the labour market. So, we did.

The reason we did was because people noted that we had a ratchet effect going on. The unemployment level at which we had to raise interest rates kept rising every boom. The unemployment in each recession was higher again - and higher again every recession. We were ending up with an ever more significant portion of the population entirely locked out of the world of work - and the independence, self worth and income that goes with it.  

Thus, change the labour market so as to stop that portion being entirely locked out. The flip side of this is that wages rise only at ever lower levels of unemployment. Actually, the very thing we've been trying to engineer.

Frank is right in that this was planned of course. It's the basis of much of the work of Richard Layard for example. Dean Baker, Paul Krugman and Brad Delong have all been arguing that the Federal Reserve should delay raising interest rates precisely because this change has occurred, we're still not at that non-accelerating inflation rate of unemployment. But to complain about it does seem most odd. The aim has all along been to make sure that we don't have swathes of the population rotting away in permanent unemployment. Something we've achieved and now he's complaining? 

Categories: Current Affairs

Apparently the NHS is the world's largest buyer of fax machines

Fri, 13/07/2018 - 07:01

This might not be too much of a surprise, the National Health Service is, apparently, the world's largest remaining buyer of fax machines:

The NHS is buying more fax machines than any other organisation in the world due to a “stubborn” resistance to new technology, medical leaders have said.

A report by the Royal College of Surgeons (RCS) has revealed “farcical” reliance of the outdated equipment, with one hospital trust alone using more than 600 fax machines.

In total there at least 9,000 machines in service across the NHS through which doctors are forced to send crucial patient information.

One argument could be that the NHS is one of the world's largest organisations so it being a large buyer of any specific piece of equipment isn't that odd. But there's more to it here:

Currently, medics are officially required to contact each other by pager or fax.

There's that lack of productivity improvement, that failure to embrace new technologies, emblematic of centralised and planned systems. It has, for example, been near a decade now since it was possible to gain, for free, encrypted email and or messaging apps. 

You know, the apps which the actual doctors are already using, but they've just not got official permission for as yet?

Categories: Current Affairs

Can artificial intelligence in education improve social mobility?

Thu, 12/07/2018 - 11:33

Brendan Bracken must qualify as one of the most successful parvenus of his century. Born Irish and raised as a Catholic, he absconded from schools and was sent to Australia for 3 years of peripatetic existence and self-education. He returned and settled in Liverpool, pretending to be 4 years older to gain a teaching post. When he'd saved just enough to finance a singe term at public school, he pretended to be 15 instead of 19, and was admitted to Sedbergh. There he made establishment friends, some of whom moved in Winston Churchill's circles.

Befriending Churchill, he used his successful career in financial journalism to back Churchill's campaigns, and to help secure the latter's finances. Elected as an MP himself, he became Churchill's right-hand man, and entered the wartime government. He was a talented spin doctor decades before the term was invented. He was eventually admitted to the cabinet, and given a peerage. Lord Bracken had done quite well for an Irish nobody. 

His upwardly mobile career is an example of social mobility, though it took deceit on a grand scale to make it happen. One cannot imagine it happening in the days of social media; his fantasies would be tracked down and exposed. But he was perceptive enough to realize that the ticket was a public school education, one which he tricked his way into, albeit at a minimal level. A term at Sedbergh was enough to give him access to the prizes, and the contacts to pursue them.

Although some praise what they see as the increased social mobility of the modern UK, the Sutton Trust has revealed that those with a public school education, only 7% of the population, make up 74% of top judges, 71% of top military officers, over half of leading print journalists, and dominate most of the top jobs in influential sectors, as well as the well-paid ones. Recent disclosures have revealed that they even dominate the leading careers in acting. Not surprisingly, many parents consider the fees of a private education to be a solid investment in their child's future.

Although there are calls for diversity quotas, with posts set aside for those with state education, the obvious solution is to make state education of a sufficient quality that its students can succeed on merit, without needing special consideration and lower standards. Even then, though, critics point to the way in which a private education has the children of successful parents mixing with each other and forming the friendships that will see them in good stead for seizing life's opportunities. Elitism would be hard to eradicate, if it were a goal to achieve that.

Grammar schools are in the news again because they give chances to people from humbler backgrounds. The top judges who are not ex-public school are ex-grammar school. They were largely abolished by Labour governments because they were felt to give unfair opportunities to too small a proportion. Left-wingers claimed they took talent out of the working class and made it middle class. Labour similarly abolished the Assisted Places Scheme, which enabled large numbers of children from modest backgrounds to attend private schools, and which gave those schools a broader social mix.

Clearly, the creation of new grammar schools and the restoration of the Assisted Places Scheme would go some way to increasing social mobility, and access to the top posts and prizes to people from lower down social strata.  But more is needed if the UK is to become more meritocratic. It seems wasteful that people with talent and ability cannot develop these and express them to the benefit of their fellow men and women. This is not to back the unattainable goal of equality of opportunity, but it is to endorse more opportunity and to seek ways of achieving this. And it starts with education.

Technology might point the way forward, and it could be artificial intelligence that sets the pace.  Among the advantages that public schools offer is a staff to student ratio that allows each child to receive individual attention. It seems clear that intelligent programs now under development will allow each child to be educated individually, and at a pace suited to its own capability and progress. Not held back by a teacher having to attend to slower learners, or dispirited by its inability to keep up with the others, each child can be taken forward at a pace it can accommodate. It can be educated to the degree that its abilities will permit. If this becomes the norm in education, it achieves the educational ideal of "a log with a teacher at one end and a student at the other," or a staff to student ratio of one to one.

If technology can be applied to educate each child to the maximum of its ability, the question arises as to whether it can be used to address some of the other factors that stand in the way of social mobility. For example, one of the advantages of a public school education is perceived to be the self-confidence it develops in its students.  This is hugely advantageous in university and employment interviews, where the ability to articulate clearly and confidently conveys massive benefits to the candidate.  Many students from state schools do not have self-confidence developed to such a degree, and are therefore at a disadvantage.

With artificial intelligence being applied to boosting the quality of education, can it similarly be used to equip students with more confidence so they can perform better in interviews?  The odds are that it can, and that future programs will use psychological insights to develop a greater degree of self-confidence.  To some extent, the greater educational skills will themselves boost a child's confidence in its abilities, but additional programs can coach it through interview techniques and take it through mock interviews to give it the resources to make them less daunting to the candidate.  Other programs will probably be developed that can raise a child's self-esteem through role-playing virtual reality situations.

Of course, the teenage years are, and perhaps should be, a time of questioning as children work out their identities and form a view of their place in the world. They find out who they are, what are their ambitions, and how they will relate to their peer group and those outside it. Self-confidence can be overdone and can indeed be counter-productive, so a balance needs to be sought to impart enough of it without overdoing it.

The individual attention that artificial intelligence can give to each child will mark the end of the notion that mass state provision should strive to produce identical or broadly similar outcomes for the children who go through it. It will produce greater variety, and a greater range of choices for children. Just as factories now no longer mass produce identical products, but allow customer preferences to be incorporated, so state services will be able to apply artificial intelligence to produce a different outcome for each recipient, an outcome more appropriate than the "one size fits all" result sought hitherto.

The role of government will not be to force all schools to apply the same model, but to facilitate and encourage them to apply the new technology in different ways, learning from the example of the more successful ones.  The outcome will be that far more children will have access to opportunities that their social background previously made it difficult for them to seize.

There have been three landmark Parliamentary Education Acts in the UK, the Foster Act of 1870, the Butler Act of 1944, and the Baker Act of 1988.  All of them transformed education in UK schools.  Now artificial intelligence is about to achieve a transformation no less profound.  It will achieve more for social mobility than any laws passed by governments could hope to do.

Categories: Current Affairs

It would be nice if they did is not sufficient justification to force other people to pay your expenses

Thu, 12/07/2018 - 07:01

We're told that it's simply an iniquity that buses outside London are not subsidised in the same manner as those inside it. This is rather dressed up with complaints about privatisation, their not being planned and run by the local bureaucrats, but it's this lack of subsidy which is the real complaint here:

It’s not only Londoners who rely on buses and trains

Lynsey Hanley

Buses in the capital are fairly priced and frequent – and well used. Why has the rest of the country been left behind?

There's actually no evidence at all that buses anywhere are being fairly priced - nor unfairly. What we can see is that different people have to pay for them. For that's what "subsidy" does, moves the person bearing the cost away from the person doing the using.

Since deregulation, bus usage outside London has declined by more than a third, and fares in many rural areas are rising far above the annual rate of inflation. In the capital, however, usage has risen by 98% since 1986 – though it has fallen slightly in the last year – and passengers enjoy a stable flat fare of £1.50. (I pay £2.40 for a bus trip in Liverpool, where I live, a city with median earnings of £23,000 per worker, compared with London’s £35,000.)

What’s the difference? London’s buses are regulated, subsidised...

There it is. Other people manage to snag some portion of other peoples' money, why can't I? All of which is entirely understandable of course. It is nice if other people pick up part of your daily expenses. But there does need to be some reasonable justification for forcing them to do so through the tax system. Other Londoners - the taxpayer nationally in fact as well - pay that subsidy to London's buses. We're open to arguments that they shouldn't, equally to that they should. As ever, the answer is "it depends."

The argument in London being that 10 million people just aren't going to be able to move at all without some more general taxation paying for moving 10 million people around. Maybe it's a valid argument, maybe not, but that is the one here.

The justification for someone in Saffron Walden being taxed to subsidise buses in Liverpool is what? Other than it would just be nice?

Categories: Current Affairs

Do we really have to be subjected to these sorts of misunderstandings?

Wed, 11/07/2018 - 07:01

We agree that the European Union is an important trading partner for the UK. We agree that services are important to the UK economy, that services exports are too, even those to the EU. However, we really are also pretty sure that we'd all be better served by the commentariat - today's example being Polly Toynbee - being a little more informed on these subjects:

But take the other mammoth in the room: to escape the free movement rule, the plan omits services from any trade deal – and that casts 80% of our economy to the winds, a hard Brexit by any account.

Services are 80% of the total economy. International trade is not 80% of the economy. In fact, services exports (the only part to be affected by Brexit, we can do whatever we like about imports of them once out of course) are perhaps 8% of the economy. That's gross services exports too. Of which about half goes to the EU.

Yes, certainly, 4% or so of GDP is an interesting number. But it ain't 80%, is it? 

The 26 million people working in British services create a massive £28bn-a-year trade surplus with the EU,

Again, eyeballing the percentages, but 2% of GDP is an interesting number, not an economy defining one. And of course the 26 million are not working in service exports, they're working in services, the vast majority of which are - in common with every other large economy - domestic in both production and consumption.

They know the EU will never allow a single market deal on goods without services. How often must they repeat that the EU’s four freedoms of goods, capital, services and labour are indivisible?

Well, yes, except that that single market in services is, to put it as politely as possible, as yet an unfinished work in progress, not something that entirely and wholly exists today.

Please do note that the above is not an expression of our opinion. Now is it to insist that Brexit should happen, nor the manner in which it should. It's rather an insistence that those who would pronounce on it really have a duty to know more about it. As with the economy more generally - ignorance isn't a good starting point for a chain of evidence nor logic. 

As to opinions, we have 'em. Polly tells us of this:

Patrick Minford CBE, former Thatcher adviser and leader of Economists for Brexit, is willing to spell out to me what Brexit politicians dare not. Their goal is no tariffs, no barriers, no regulations, open free trade with the world. That, he claims, cuts 20% off food prices in tariffs and roughly the same again in removing all regulatory barriers. What of food quality? As long as it’s labelled, let the consumer decide. What of farmers bankrupted by cheap imports? Big farmers will do more efficient biotech farming (GM, etc); small inefficient farmers will go to the wall or be paid to protect the environment.

What of manufacturing, facing a tidal wave of cheap, imported, unregulated goods? That’s an insignificant 10% of our economy, so let cheaper countries do the “metal bashing”, as we import cheaper cars: we will do high-value intellectual work. And what of all those “metal-bashing” jobs? Here he uses a favourite phrase: the “reallocation of labour”, just like all those “reallocations” of the 1980s on which he advised Thatcher, when unproductive mines, steel works and shipyards closed. Look, he says, over those years most of the 35% employed in manufacturing have been “reallocated”, with a growth in city financiers, consultants and all other services. But what of the people and the places destroyed in the process?

Yes, he admits, the 1980s was a “big shock”, but it rid us of “hopelessly uncompetitive” industries. That’s what unilateral open free trade would do again, clearing out overprotection from global competition with, he claims, a huge economic boost. Short-term pain means long-term gain: a second coming of Thatcher’s 1980s.

That’s the vision that dare not speak its name among Brexiteer MPs – for good reason.

As an aside, we'd note that the clearing out is what moved people into those services which export so much that even Ms. Toynbee is impressed.

But as to not speaking its name - we agree thoroughly with Minford here. It's all rather the point of Brexit itself in fact, that we can go and do all of those things which will make the economy so much larger, make our children so much richer. That is, the point of leaving the European Union is so that we can stop doing all the things they insist upon, all the things which progressively impoverish those who will come after us, and make the lives of the little ones so much better. Yes, absolutely, Brexit is for the children.

Categories: Current Affairs

You don't like what we produce? You'll just have to work harder at it then

Tue, 10/07/2018 - 07:01

This is the cry of the producer interest over the ages. We're producing what we desire to produce, if you don't like it well then, you'll just have to work harder at it, won't you?

In the face of plummeting sales of literary fiction, the writer Howard Jacobson has declared that the novel is not dead: the problem is the modern reader, who apparently lacks the attention span to enjoy the intellectual challenge of reading.

He actually goes so far as to say that the reader is the problem. But nthen that's that producer interest, as we say.

The NHS isn't competing for our money so we get whatever it is they desire to allow us to have, not what we might want. Mixed sex wards don't exist in the private sector, they do in the NHS.

BT, when nationalised, wasn't exactly swift at installing that basic desire we have from a phone company, a phone line.

It's true, obviously it is, that literary fiction does at least try to sell us a copy or two. But the ecosystem is also buoyed, kept afloat, by that river or ocean of public and grant money. That is, the practitioners don't have to pay all that much attention to what the readers might actually want.

So, obviously, they don't. And when they don't they get told it's their fault. Such is the cry of the producer over the centuries. And it's only market competition that deals with it too. The genre novels are doing just fine....

Categories: Current Affairs


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