Wednesday, 28 February 2007

Mouths are for drinking, not just for ranting

Lib Dem bloggrr and conference virgin Alexander Kemp has raised the spectre of "bloggers drinks" at conference. "It would be nice to put a face to the rants, so to speak :o)" he comments.

I've heard of worse suggestions (such as the Together We Can Cut Crime policy paper!).

I shall probe my source and see what's planned.

Tuesday, 27 February 2007

"Together We Can Cut Crime": rejecting the policy paper

In four days time the Liberal Democrat federal conference will have the opportunity to debate and vote upon the law and order policy paper, Together We Can Cut Crime. This is a worthy attempt to tackle the perception of rising lawlessness in our society and to genuinely bring down rates of criminality and especially re-offending. Sadly, in the process it brushes aside too many of our fundamental principles and seeks centralising and patronising solutions. It needs amending. Failing that, it needs rejecting.

To be fair, the paper really isn’t that bad. It tries hard, and many of its suggestions are really rather good. So I will dwell first on these strong points. Section 3, on crime prevention, is really quite good: a review of ASBOs and a focus on establishing responsible behaviour contracts before behaviour deteriorates are long overdue – it is almost forgotten now that the police were originally set up to prevent crime, rather than catch offenders. Addressing repeat victimisation is sensible, as is boosting the capacity of police to recognise and deal with metal health issues and the proposal to appoint dedicated youth officers in each ward.

Similarly, section 4 on punishment, reform and rehabilitation is excellent. For too long the prison system has been viewed as a means of punishing offenders and protecting society rather than reforming characters and enabling criminals to lead constructive, law-abiding lives. Prisoners are the ultimate captive audience: they can be obliged to attend lessons to teach them literacy (only one in five can cope with an application form, according to section 4.2.10), numeracy and perhaps a trade.

But other parts of the paper are less strong, falling as policy papers all-too-often do into the traps of all governments-in-waiting: centralism and micromanagement.

Take, for example, section 2.1.4: “Licensing regimes should also be used to ensure responsible behaviour… We propose: Requiring local authorities [to] have regard to ensuring an appropriate ratio of seated to standing areas in all pubs, bars and clubs…” An ironic twist for a party that is promising a Great Repeal Act, a bonfire of the regulatory vanities. The same is true of the previous clause, to extend the House in Multiple Occupancy licensing regime to include minimum security standards. There may be evidence to suggest that these will reduce crime, but it is rather incongruous that these two proposals immediately follow the statement (2.1.2) that “We are reluctant to over-regulate, especially where stipulating design standards…”

Sadly, over-regulating is exactly what this is about. Local authorities are to be given the powers to tell publicans, private clubs and landlords how much floor-space must be set aside for seating and what types of locks must be used. Never mind that publicans are serving the publics desires, or for that matter that the amount of revenue they generate per square foot of floor-space depends on a goodly proportion of their customers standing. Their profitability, like that of so many small businesses, is to be sacrificed on the alter of the regulator. “Licence holders and their staff need to take the lead in promoting a responsible attitude to drinking…” says 2.3.4, but they are not to be trusted to do so without regulation.

Similarly, the ability of tenants to consider for themselves whether they wish to pay extra for heightened security features, or would like to go to a busy, lively venue where there is standing room only (or for that matter, dancing-room only) is not to be trusted; these poor fools don’t know what’s good for them!

If individuals are not to be trusted to make their own decisions, neither are local authorities. Councils are to be “required to have a designated website to allow local residents to express their concerns and review… progress” (2.1.7). This is not a decision to be taken by local councillors; neither are local electors free to choose whether this is a better use of council resources than care for the elderly or better recycling or even (heavens!) other crime-prevention initiatives. Government knows best. The decision to base PCSOs in schools (3.1.2) sounds like a good idea, but should this not be the decision of local authorities and local police boards, responding to particular needs, rather than a central government diktat that assumes that every area suffers youth crime?

Then there is the target setting. One of the greatest problems with the Labour Government has been its obsession with setting targets that reflect the views of bureaucrats rather than the needs of deliverers; that deflect service providers from responding to the needs of their patients or pupils or the citizens they serve. “Setting and average of 90 days between arrest and trial” (5.1.5) and dictating call centre response rates (2.4.7) is no different from the Blair/Brown target setting we have suffered for a decade: maximum waits become uniform waits, and attention to other, perhaps more urgent problems is subsumed by the desire to tick the Whitehall boxes. The faith in the national plan and the wisdom of departmental officials flies in the face of our commitment (in both policy papers and, more importantly, in our ideological foundations) to trust individuals, local providers and county and municipal authorities to make decisions in their own interests and that of their local area.

Finally, and most egregiously, there is the section on the victims’ compensation fund. Section 5.4.4 states that “Liberal Democrats sign up to the principle that victims of crime should be entitled to some compensation whether this is obtained from the perpetrator… or… is paid by the state…” This is absolute nonsense. While there is a compelling case for requiring offenders to make reparations to their victims (both as compensation and as a means of demonstrating to them the personal harm they caused their victim), there is absolutely no reason why the state should act as an insurer-of-last-resort, soothing with money the pain meted out by criminals.
Compensation is not a liberal principle. It is the offspring of a paternalism that believes that the state should be a shoulder to cry upon and a nurse-maid to provide a sticking-plaster for the poor, crying child that is the citizen. Of course we feel compassion for the victim; we would be heartless if we did not. But the victim’s financial losses should be met by offenders and private insurers. The state’s efforts should be devoted solely to ensuring that crime is prevented and criminals brought to justice. If there is a spare pound, it should be spent on the two, primary purposes of Government: to provide a stable legal framework in which we can all live peacefully, and to protect the citizen from harm. It is not to act as nanny.

This paper, in current form, is not worthy of being adopted by a liberal political party. It ignores the principles that the party has set out in other policy papers and the philosophical basis of our beliefs: that the individual must be free of meddling officialdom; that decisions are best taken at the most localised level, nearest the citizen; and that the state exists to protect, not to mother, the individual.

Together We Can Cut Crime is not a disappointment because it is entirely wrong. Worse than that, it is a disappointment because much of it is right. But it is marred by illiberal micro-management and patronising paternalism. It desperately needs to be revised. Until then, it must be rejected.

Monday, 26 February 2007

Let freedom, rather than envy, be our rallying cry

Cicero is calling us to the barricades again.

He is that rare type of blogger: one who can keep his readers' interest even as he approaches a thousand words.

Let me give you just a dozen of them:

"instead of talking about relative poverty we must talk about absolute freedoms"

It would distinguish us from the ideological uniformity of the market-tolerant Left and the big-state Right and give us a platform from which to launch a better society, founded on individual freedom and responsibility.

I like the sound of that.

Thursday, 15 February 2007

Unicef report may be flawed, but there is still much to worry about

The Unicef report on child well-being in rich countries caused an instinctively sceptical reaction in me, partly because of the known left-wing bias within the UN agencies and partly because of its reliance on relative income measures. As I commented to Cicero earlier today (I have since rectified the typos!):

I fail to understand how a poor child in Britain is worse off than an even-poorer child in Slovakia, simply because the British child is able to see a Porsche from her window rather than a clapped out Lada.
Having said that, I’ve decided it’s best to read the report before spilling too much virtual ink. Sadly (sic.), I’m about to disappear off to Cape Town (where the temperature is in the 20s and the sun sets late over the sea) and so won’t have time to read it and write about it until it is quite stale, so I’m going to make a few observations based on the very informative annex, which has the 40 separate indicators which led the report writers to their conclusions.

Having reviewed these, I remain very sceptical of the relative poverty issue. Furthermore, many measures are based on subjective reporting (“aspiring to low skilled work”; “finding their peers kind”; “agreeing with the statement that…”) and others are probably based on surveys that may not be entirely accurate (reports on how many books are in a house or how many educational tools – did the children consider the family computer an educational tool? Or a toy?).

Nonetheless, perhaps a third of the measures were clear, objective measures based on official statistics in which we ought to have at least some faith. The following stand out as cause for real concern:

· Above average infant mortality
· Above average number of births with low birth weight (they say “birth rate below 2500g” but I am inferring what they meant!)
· Below average immunisation against DPT3 and Polio, and significantly below average immunisation against Measles
· Above average number of overweight 13 and 15 year olds (according to BMI).
· Significantly below average participation in education among 15-19 year olds
· Below average number of 15-19 year olds in either education or employment
· Significantly above average number of children living in single-parent and step families
· Significantly above average adolescent (15-19 year old) fertility rate

(For statisticians among you, ‘Significantly’ refers to more than one standard deviation difference, which puts the UK into the bottom quintile).

No matter how you cut it, that means that the UK’s children are less healthy and dying more often than peers in less wealthy societies including the Mediterranean countries, the Czech Republic, Slovenia and Malta. They are not undertaking as much further study and are more likely to expect to work in unskilled employment – not a good place to be with a billion Chinese yet to join the global labour market. Traditional family structures are more fragile (though I hesitate to draw any conclusions from this).

I do not believe it follows that the solutions must be more Government intervention in family lives or massive statist structures institutionalising childhood. But there is clearly room for improvement in our public health and education, currently subject to two of the largest Government departments. A more thorough immunisation programme, better sex education and improved technical educational opportunities for non-academic school leavers would be a good start.

One thing is for certain: despite the instinctive scepticism and lingering doubt of myself and many liberal-minded colleagues, this report leaves no room for complacency.

Tell it how it is!

The UNICEF report into child well-being has acted as a lightning conductor for opinion across the political spectrum.

It has also generated headlines that in this one issue say so much about the various newspapers and their editorial stance. A comparison made me smile. If I’d not matched them up, I’m sure you’d have had no trouble guessing!

Independent: Our national disease is lack of parental time Independent: If we want to help children, the state has to step in. But will ministers dare advocate this?

Times: Blind feminism has hurt our children

Guardian: Give our children more respect, urge campaigners

Daily Mail: Blame game amid Britain’s child scandal
Daily Mail: The sick family of Europe

Telegraph: Children need stability and boundaries more than money

Express: When childhood really was tough

Newsnight plumbs new depths (an impressive feat!)

It was an impressive achievement, but Newsnight managed to plumb new depths last night. Its main article, devoted to questions surrounding companies that buy and sell national debt, repeatedly described them by the far-from-impartial moniker “Vulture Funds” and made no effort to give a balanced view. Rather, there was a disgraceful piece of polemic dressed up as journalism (I prefer my polemic naked). A less charitable viewer of Newsnight might say “business as usual, then”.

Third world debt is an emotive issue. Now that the West has largely put famine and pestilence behind is, we find it abhorrent that people should continue to suffer in conditions that we consider to be mediaeval, and we are understandably eager to do something about it. Thus we pick through Third World budgets, and particularly those that transfer money to the affluent West, and ask whether this expenditure would be better diverted to alleviating poverty. The money that Third World countries spend on servicing debt has become a totemic issue for many.
Meanwhile, for a very separate group of people, debt is a business, without which individuals, companies and countries would be unable to spend large sums of money that yield long-term benefits. If I could not borrow money I would forever be paying rent to a landlord instead of buying my own house; if our government could not borrow money it would not be able to build as many railways or hospitals; and if Third World countries could not borrow money they could not build the roads and ports they desperately need to trade their way out of poverty.

Sadly, the debt business is always viewed in rather emotional terms. “Never a borrower nor a git be,” as the witty wag, Stephen Fry, once said. Those who loan money are easily demonised, as Europe’s relationship with the Jews during the Middle Ages demonstrates. In fact, the trade in debt is not nearly the necrophagic business that anti-capitalists would like to pretend. In the event that a creditor is struggling to recover lent capital, it is entirely reasonable that they may accept a smaller sum to clear the business up quickly, and that a speculator might agree to take on the risk in the hope of recovering the full debt in the long run, and so make a profit over the knock-down price they paid.

To talk, as Newsnight did, of companies turning $5m dollar investments into $40m demands on Third World countries is disingenuous. The original debt would have been worth $40m whether or not it was sold on to a third party, but the original creditor had so despaired of ever seeing a return on their loan that they sold it on at a bargain price. The Third Word nation (in this case Zambia) did not lose out by seeing their debt sold on, except in as much as their original creditor may otherwise have despaired so utterly that the debt would never have been settled. The creditor (Romania, not exactly rolling in wealth and luxury itself) did not lose out, either, but rather judged that at the time it sold the debt, it needed the £5m more than it needed the hope of gaining the full value of the debt after a long, bitter and possibly hopeless battle. And the “Vulture fund” did not rip off the debtor, but instead met Romania’s need for a quick injection of cash and continued to pursue Zambia for an already existing debt.

The question remains, is it moral at all to seek to collect the debt when the average Zambian lives on a dollar a day? Sadly, the income of the average Zambian is beside the point, for the average Zambian is unlikely to see that $40m whether the debt is paid or relieved. Having visited Lusaka, I recall being told the story of how the president was unhappy with the size of the two swimming pools at State House, and so installed a third, grander one. It struck me that it would have been hard to find room for so many pools, as much of the grounds of this urban presidential palace were taken up by the president’s private safari park. It is also worth noting that Zambia’s defence expenditure has nearly doubled in less than a decade, from $68m in 1998 to $105m in 2005. While I am not usually enamoured of the “Defence money could be better spent elsewhere” argument, this and other discretionary expenditure does put paid to the suggestion that Zambia was unable to pay the debt, which has only mounted to $40m in 2007 because it has not be serviced for many years.

If we in the West believe that Third World countries should not be obliged to service debts their government’s incurred because there are better things for them to spend the money on, we should pay off their debts. Debts owed to other governments are easily forgiven, and have been. Debts to international organisations can also be relieved, but unless Western governments make up the shortfall, these organisations will not have money to lend to other needy nations.

But the debts resulting from private lending, or where private lenders have bought debt from other organisations, are now private property. Just as we would not countenance a government seizing a person’s house to build a road without adequately compensating them, so we should expect governments to compensate creditors – yes, even “vulture funds” – if they require them to forgive the debt. If government does not act, we may ask that the creditors show charity of their own volition, but we must be wary of tarnishing our request with a prurient distaste for the legitimate means with which they make their living.

My own prurient distaste for the way that Newsnight, et al, make their living, may be plain to see, but in my naivety I had expected a more elevated tone to its reporting than I was subjected to this evening.

Wednesday, 14 February 2007

The road-user pricing to serfdom

Gridlock is coming, is both a literal and a figurative sense, and only Douglas Alexander can save us. If that doesn't send a shiver down the spine (or perhaps send you off into peels of laughter), the alternative should cause you to break into a cold sweat.

The petition to “Scrap the planned vehicle tracking and road pricing policy” has now received over 1.4m signatures. It says something of the pace and popularity of this petition that the editorial in today’s Times referred to just 1.3m signatories. Like the proverbial snowball, this is gathering ever more size and momentum as it cascades downhill.

I have explained before that the thinking behind this petition is confused and wrong. At the time I also warned, in passing, that no government could ignore a petition that garnered more than 30m signatures: the majority would have spoken, and to deny it its head would be all but impossible. The question, however, is whether a government can even ignore one with 3m signatures, or (the imminent test) half that. The pressure is clearly great: how often have opponents of the war in Iraq – Liberal Democrats among them – argued that the government should have changed its policy when a million people marched through London on 15 February 2003. But where would such a policy lead us?

If just 3.5 per cent of the voting public – just 2.5 per cent of the population – can divert a democratically elected government from its course, is this a sign of direct democracy in action, or is the government caving into a well motivated and vocal minority. It strikes me as no surprise that millions of people object to this, or indeed any other, government scheme – especially one that involves taxation. Every change has winners and losers, and both winners and losers will be numbered in millions. The question should not be whether the losers bleat most loudly, but whether the overall social benefit is greater than the cost, and (for those of us of a liberal bent) whether the proposal represents an abuse of the minority by the majority. Where road-user pricing is concerned, it is clearly a case that the social benefit outweighs the cost without the minority being unduly coerced. The government (in the form Mr. Alexander) should continue to make the case for road-user pricing and face down the protest.

This move towards “Direct Democracy” is in fact a dangerous trend. There is a good reason why we practice an alternative, “Representative Democracy”. We cannot all be experts in every field; decision-making is a full time business, and few of us have read the parliamentary committee reports, research institute papers and academic studies that underlie much of the decision making of government. Government also needs to be strategic, whereas the will of the majority (an amorphous body, constantly in flux, the make-up of which is constantly changing as it coalesces around new ideas and opinions) is momentary and fickle, precisely because the majority has no permanence.

More sinisterly, it can be anti-democratic. As both public choice theory and the petition about road-user pricing tell us, it is easier for minorities to mobilise than for majorities. Because minorities are smaller, they are easier to pull together, while the benefits of successful lobbying are shared less widely, so for any individual the spread between cost and benefit is closer than for a majority, where the benefits are spread broadly and the costs of mobilising high. This is why single-issues of dubious popularity often capture the media’s attention and bend governments to their will.

But if Direct Democracy lends itself to minorities, it lends itself to populist demagoguery even more. Caesar dominated Rome through plebiscites, a practice that was aped my Mussolini. To this day the German constitution bans federal referenda because they were the tools of Nazism.

And here I can see the real nightmare emerging. If the government backs down in the face of opposition form just a tiny fraction of the polity, it will set a trend that will lead to more than just motoring gridlock. Almost all important government policy is controversial, and all controversial policy will be paralysed by petitions and polls. A situation akin to that in Switzerland, where votes for women were blocked until 1973, or the United States, where differently-constituted majorities simultaneously try to cut taxes and increase public spending, would be the least of our fears. A government unable to legislate has a certain appeal to the libertarians among us, but it would undoubtedly be only the beginning.

As important and popular social and economic reform was stymied, and the government was rendered increasingly unable to respond to real problems, a new popular opinion would rise: that a strong government, a strong leader, was needed to push through change; to break the gridlock. We have seen it before. Popular frustration leads to the election of a strongman who offers to over-rule petty objections and push through progress. At first it is welcome, and the benefits are tangible: Hitler built the autobahns and Mussolini made the trains run on time; no need for road-user pricing when you have slave labour and threaten to shoot the train drivers! The benefits of today are paid for tomorrow, as freedom is lost and democracy forgotten. It is the road to serfdom.

Monday, 12 February 2007

Another shocking statistic

I found this snippet in the Times:

One in three households across Britain depends on state benefits for at least half its income, according to a report released today by the right-of-centre think-tank Civitas. It says that the figure is far higher for single-parent homes, with 61 per cent relying on state support compared with 9 per cent of two-parent households

(The actual Civitas report says “some 30 per cent of households”, but the editors of the Times clearly feel that percentages are beyond their readership.)

While I have not had the chance to verify this, I find it deeply disturbing. As the welfare state expands, it begins to lose its original purpose of ensuring a healthy and cohesive society in which nobody need want for education, health care, nor for food and shelter if they are out of work. Instead, it has become a massive patronage system, whereby an ever greater proportion of society has become dependent on the state for their living.

At the very least, this places an increasing burden on the more productive elements of society, creating tension between those who pay taxes and those who receive benefits. The contributors become resentful, while the beneficiaries increasingly come to see benefits as a natural state of being – it becomes normal to go through life on welfare. The more people are beneficiaries of the state, the harder it is to reform welfare to reduce costs and encourage greater independence, as those with a vested interest in the status quo gain greater political clout.

More importantly, the creeping expansion of welfare undermines the autonomy which is an essential element of a free society. Instead of individuals being in control of their own destiny, making decisions about how they lead their lives that benefit both themselves and their neighbours, they become vassals of the state, infantilised by permanent paternalism.

The fact that a third of households rely on benefit for over half their income is not a sign of a prosperous society giving generously to the most needy. It is not a sign of the success of our welfare state. It is a sign of terrible failure that in one of the richest countries in the world, a third of households are reliant on hand-outs.

Friday, 9 February 2007

…and what should be done to tackle climate change.

The European Commission has produced another daft and damaging proposal in their efforts to combat climate change. This is regrettable both for the commission’s image and for the climate cause.

My efforts to comment on this have produced an essay, so I am going to post it in three parts, which readers may read from as they will. In Part 1, I explained why I believe that Europe is the right forum in which to address climate change. In Part 2 I looked at Wednesday’s announcement and explained why I feel it is misjudged. I also touched upon the failing of the EU’s existing cap-and-trade system. In this part I will offer a liberal alternative to the authoritarian socialism that has suffused much of the environmentalist debate.

The European Commissions proposal highlights a far broader problem that infuses the climate change debate: that it is a Trojan horse for authoritarianism and socialism. The commission’s plan is a classic example: to save the planet we are to be told how to drive. Other examples are legion: subsidies for favoured industries and technologies (wind power, trains); protectionism (dressed up as reducing “food miles”); rationing (aka. “carbon quotas”); population control (which needs no explanation); over-regulation (housing and vehicle standards). The list could go on. These methods may or may not curb climate change, but in the process they will curtail freedom and condemn millions – perhaps billions – to poverty.

The Left was quick to see the opportunities presented by global warming and environmental degradation, and have moved quickly to occupy the commanding heights of the debate, from where they will once again seek to control the economy and curtail individual freedom. Climate change may be the justification now, but the techniques are the same, and the desires within the rationalist-progressives are also the same, rooted as they are in a belief that a few intelligent people with the time to think it through can create and manage a better society than we all can as individual actors perusing our interests.

So what’s a liberal to do? Nobody wants to fiddle while Rome burns, but neither do we want to place our writs willingly in the state’s shackles and accept the slavery that we fought so long to resist. Fortunately, there is a liberal alternative. In fact, there are two.

The first, and one that appeals most to me, is a carbon tax. Rather than ration supply by issuing quotas, or picking particular egregious sources of emissions and stamping down on them, we set a price for carbon and let the individual decide how much to pay for. After all, there is nothing wrong with a 4x4 emitting exhaust, or with a skier jetting off to Aspen; what is wrong is the global excess of carbon emissions. Reducing the emissions produced by power stations is not an end in itself; the end is reducing all emissions. Focussing on individual types of emission is arbitrary, because it squeezes some more than others, and it also harms us all more than it needs to because uneven economic meddling reduces the efficiency of economic activity, which means less wealth to go round – wealth that may pay for my holiday, your school or a Gambian’s dinner.

A carbon tax, by comparison, allows us all to continue to make the same individual decisions in our own best interests that we have always done, but forces us to bear the cost of our pollution. If I drive inefficiently or fly to Aspen my activity carries a cost; if I fit solar panels to my house or buy a bicycle my carbon-tax bill will fall. It is easy to apply and hard to avoid (it would be like VAT). It would be easy to control emissions: if they are too high, the tax rises, if they are well within tolerable limits, it can be reduced. But most importantly, it would not hand power to state officials who are at best fallible and at worst arrogant, capricious or venal. Neither will it admit the command economy through the back door. At worst, there is a danger that it could simply be used as a new tax to fill the coffers of some grasping finance minister, but any government of principle would seek to make the change revenue neutral, and voters would be able to judge their politicians against their tax burden and the state of the world.

The alternative method, favoured in both Europe and the United States (due to the visceral reaction that the word “tax” engenders) is a “cap and trade” system, whereby companies buy permits to emit and then either use them – and hand the costs onto the carbon-consumer – or trade them on the market. While this has had some serious problems (caused in Europe by allowing national governments to issue too many permits, and by the decision to give them away rather than selling them – a licence to companies to print cash) it still has the merit that it leaves individuals in the position to allocate their resources as they see fit, perhaps by driving a big car (which they may need if they have a big family or a big farm) but never flying, or doing both but buying solar panels, or making any number of choices that would see their overall “carbon footprint” reduced, while allowing them to reduce it in the manner that best suits their needs and their lifestyle.

In a seminal essay, Friedrich Hayek explained that the bipolar view of the world as divided between Left and Right wings is inaccurate, a result of conservatives and socialists associating liberals with the other camp because liberals may share common ground with other groups on certain issues. The environment is a classic example of where liberalism is clearly distinct from the other two creeds.

For socialists, global warming requires interventionist measures, complex planning and more power to the bureaucrats. It provides the excuse that for a decade and a half they have lacked for implementing the policies that until the 1980s they advocated on the grounds of economic efficiency. Conservatives for a long time denied global warming; now their responses are typically authoritarian. Liberals are open to the evidence of global warming, but not to the autocratic solutions that most environmentalists propose. The solution is to encourage and enable individuals to find their own way of reducing the negative impact they have upon the environment, rather than force centralised solutions down from above. For liberals, a world in which we are subject to the state is not much better than one where we are subject to the elements.

…why the European Commission is doing more harm than good…

The European Commission has produced another daft and damaging proposal in their efforts to combat climate change. This is regrettable both for the commission’s image and for the climate cause.

My efforts to comment on this have produced an essay, so I am going to post it in three parts, which readers may read from as they will. In Part 1, I explained why I believe that Europe is the right forum in which to address climate change. In this part I will look at Wednesday’s announcement and explain why I feel it is misjudged. In Part 3 I will offer a liberal alternative to the authoritarian socialism that has suffused much of the environmentalist debate.

I have explained in a previous post (probably to the boredom of many of my readers) why economics compels us to treat carbon pollution as a European phenomenon (efforts to create a world-wide approach having failed). Sadly, European solutions are not promising.

The proposal announced by the commission on Wednesday is aimed at improving the efficiency of our driving. Apparently, we are all driving inefficiently, and this is causing our cars to emit more carbon-laden exhaust than is necessary to get us from A to B. Late gear changes, sloppy breaking, stop/start driving, the speed at which we drive and low tyre pressure make our driving inefficient. Something needs to be done.

In the worst traditions of untrammelled bureaucracy, the solution proposed by Industry Commissioner G√ľnter Verheugen is to micromanage our driving. Manufacturers are to be required to fit new cars with electronic stability control, emergency braking systems and warning lights that tell drivers when to change gear or pump up their tyres. The commission also plan to make it compulsory to use headlights even in broad daylight – a policy that might have some merit on grey days in northern Europe, but which will baffle Spaniards in the blazing sun of June.

The commission is not alone in this sort of enviro-economic engineering. Mayor of London Ken Livingstone is expanding his congestion charge by creating a Low Emissions Zone. Richmond Council is to penalise drivers of “gas guzzling” cars through a graduated price for parking permits. These, too, are blunt tools that unnecessarily obstruct freedom of choice. There is something particularly egregious about the European Commission’s plans, however.

While there is probably some merit in encouraging people to drive more efficiently, doing so in this interfering way is likely to generate anger and derision in equal measure. The car is a symbol of freedom for many, and its operation an art. To have it reduced to a science and guided by a bank of irritating lights on the dashboard is likely to infuriate drivers; rather than improving driving quality, it will simply cause drivers to curse the European Union while sticking black tape over the lights. The danger of flicking lights distracting drivers needs also to be considered – I would prefer drivers near me watched the road rather than the dashboard.

As I will explain in Part 3, there is no reason why efforts to curb carbon emissions need to involve bureaucratic control of the minutiae of decision-making. What matters is the aggregate amount of carbon mankind emits; individual decisions as to the source of those emissions are unimportant.

Ironically, the proper solution to car emissions – as a result of both the quality and the quantity of our driving – is revealed in the Commission’s own case. In response to industry criticism that the new bells and whistles may add up to £2,000 to the price of a new car, the Commission argues that drivers will save more in the long run due to lower fuel bills. If this is true then it is surely in the drivers’ own interests to drive more sensibly, in which case this intervention is not needed.

What is needed is a system that makes polluters aware of and bear the costs of their pollution, but one that does not arbitrarily punish some emissions or emitters over others, instead letting individuals continue to make decisions about how to allocate their resources (including the carbon they are prepared to ‘buy’) as they see fit. In Part 3 I will set out the options.

Why carbon emissions need to be dealt with at a European level…

The European Commission has produced another daft and damaging proposal in their efforts to combat climate change. This is regrettable both for the commission’s image and for the climate cause.

My efforts to comment on this have produced an essay, so I am going to post it in three parts, which readers may read from as they will. In this part, I will explain why I believe that Europe is the right forum in which to address climate change. In Part 2 I will condemn the announcement that was made yesterday. In Part 3 I will offer a liberal alternative to the authoritarian socialism that has suffused much of the environmentalist debate.

Let me be clear about where I stand from the outset. There are things which should be settled at a European level, and there are things which should not. One of those that should is carbon emissions.

Pollution is a classic “free rider” problem. Firstly, pollution is an “externality”, dull econospeak for a cost which an individual (business or person) can place on society while reaping the benefits themselves; I gain from driving my car, whereas the cost of the exhaust is shared equally by all of us. Secondly, reform costs the producer a lot and the benefits are shared across everyone; I give up a lot if I decide to forego the car, but the benefits are spread very thinly across lots of people. Consequently, as Jean Jacques Rousseau pointed out so eloquently in the C18th, the rational choice for the individual is to encourage others to do the right thing while being selfish oneself.

Producing energy from carbon is cheap, because the producer bears only some of the “social cost”, the rest being “externalised” to the wider population through pollution. If we are to curtail pollution, we must make individuals (be they businesses or people) bear the full social cost of what they are doing. However, national governments cannot be trusted to do this, again, due to the free rider problem: restricting activities that generate waste carbon dioxide will reduce short-term and localised economic efficiency, while the benefits are long term and widely distributed. Consequently, it is in any one country’s interests to let others confront climate change while the country in question carries on in the most individually-economically efficient manner; so China may burn coal like there’s no tomorrow, while hoping that the USA joins the EU in sweating about climate change.

The economic principle behind the European Union (not always treated with due respect by its member states) is that no country should seek economic advantage by trading unfairly. This is why we are faced with sometimes baffling European directives: it is only if a German customer knows what a Portuguese manufacturer means when they say “widget”, and what has gone into producing it, that the German customer can make an informed choice as to whether the Portuguese widget is worth buying in comparison to the (perhaps more expensive) German variety. Sometimes this goes too far: if the rules require that everything going into the widget be the same, including (for example) the cost of labour, then the Portuguese lose their competitive advantage and, potentially, if over regulated to the point of uniformity, the whole point of competition is lost. Thus not everything needs to be regulated at a European level.

Carbon emissions are one area where European collaboration is required. No individual nation-state can be relied upon to curb carbon emissions if it requires the government to cut off the nation’s economic nose to spite the world’s polluting face. In truth, as this is a global problem, this probably requires a global solution. The flawed Kyoto protocol aside, however, this remains a pipe-dream – or perhaps a nightmare, if too much universal government is the price that must be paid. However, in the absence of a global solution, a multilateral scheme among some of the world’s largest economy’s, which between them form the largest single economic union in the world, seems like a good place to start.

France (say) will never cut carbon emissions if it fears that Italy (for example) will thumb its nose at such efforts and gain an economic advantage by carrying on as normal. But if enough major economies take a stand, the costs will be spread, the benefits tangible, and other nations may just be shamed into pulling their weight.

Only through working together can climate change really be addressed. Collaboration is essential, but it alone is not sufficient. The right policies are also required.

Wednesday, 7 February 2007

Not "social"; not "economic"; just liberal

As so often, Tristan has written a post that has elicited an answer to lengthy not to add to my blog. This time, he is discussing “the difference between what people call Social and Economic Liberalism”.

I have often thought that the divide between economic and social liberals is a false one, whipped up by the media and swallowed by a few too many within our own party.

In my view there is only one form of liberal: one that believes that individuals should be free to do whatever they want as long as it does not impinge on the freedom of others. In that fine libertarian dictum, that means "freedom in the bedroom and in the boardroom".

Those who wish to constrain economic freedom in the pursuit of social aims may be deeply moral people, and may be fired by rational beliefs, but they are not liberals. Conversely, those who champion corporate freedom but take a prurient approach to private behaviour are not liberals, either.

However, I think this issue goes further than how much faith one has in the state. I think it boils down to the faith one has in rationality: in this case, whether one believes that a few right-minded, well-intentioned, rational people, with the moral authority of the majority, is able to create and manage a better society than would occur if decision-making were devolved to the lowest possible level (which is usually the individual).

Sadly, history is littered with the corpses of those who did not conform to their allotted role in the planned society, while wealth beyond imagination has been squandered or foregone as a result of the errors of state planners, both mistaken and venal.

I do not believe that platonic guardians exist, or that anyone is better placed to decide what is in a sane and mature person’s interests than they are themselves. On the contrary, I believe that those who seek to do so are either deluded or self-interested. Others may think that this puts me in the “Economic” wing of my party. I think it just makes me a liberal.

Spot the difference

UPDATE: British tyranny marches on

Last week I reported that schools had been taking fingerprints of children without the permission of the parents and storing them on databases. Liberal Democrat MP Greg Mulholland has raised the issue and forced the Government to issue guidelines to schools (which had previously been operating in a regulatory vacuum) but the practice continues. Lewisham Cllr. Brian Robson informs me that at least one Lewisham School is among the offenders.

I wrote to the Office of the Information Commissioner last week to check whether this was a breach of data protection legislation. Amazingly, they have told me that the Data Protection Act does not apply because “…biometric data is not considered to be personal data under the Data Protection Act 1998.” What can be more personal than my unique fingerprints (except, perhaps, my innermost thoughts) I do not know. The map of my DNA, perhaps?

Perhaps, but this too is not covered. Apparently, “when the school takes the finger print, the system changes the image into a series of numbers which you couldn’t use to identify an individual”, and as such it is not protected. That these numbers could be decoded to reproduce a unique fingerprint did not appear to be relevant or of concern to Data Protection Case Reception Unit.

Maybe this explains the Government’s insistence that it can keep the DNA records of children, even when they have committed no crime, and add them to its new central database.

Winston Smith is turning in his unmarked grave!

Tuesday, 6 February 2007

Our parents have mortgaged our future

It’s a good job my father doesn’t read my blog, because I’m about to point the finger of blame firmly at his and his parent’s generation.

Over Christmas I read Living with Leviathan: Public Spending, Taxes and Economic Performance, by David B. Smith, Visiting Professor in Business and Economic Forecasting at the University of Derby and a visiting lecturer at the Cardiff University Business School.

The book is a long and detailed investigation of the pernicious effects of high levels of taxation and public spending on the economy. There are many findings and quite a few prescriptions, some of which even the author recognises are not politically viable.

However, the one bit that sticks out is the results of a piece of econometric modelling in which he estimates that “If government spending, as a proportion of national income, had been held at the level experienced in 1960, econometric evidence suggests that output in the UK would, today, be nearly twice as high as current levels. Total public expenditure would then be higher, albeit as a lower proportion of a much bigger national output.”

This is a startling finding for two reasons. Firstly, the suggestion that the policies of successive UK governments have cost us £1 trillion of GDP per annum defies adjectives. Indeed, I struggle to imagine what this would mean for UK standards of living today. Suffice to say that we would be half as rich again as citizens of the United States, and somewhat higher than Dubai. David B. Smith notes that we could spend far more on public services and still have lower taxes as a result. I might go further and suggest that most, if not almost all, of us would be able to afford to buy private healthcare and education of higher quality than our present, tax-funded system can afford, and still have more left over for fun and frolics.

The second startling fact here is that this lafferesque story of counter-factual economic history does not require us to have foregone our welfare state. By 1960 the welfare state was over a decade old, public expenditure was a third of GDP and our hospitals and schools were in rude health. So the argument often deployed by people who oppose supply-side measures that those proposing them would condemn the poor to ignorance and disease simply does not hold up.

"What's the bleeding time?"
"Ten past ten, sir!"
Sadly, as is so often the way with bureaucracies, costs began to escalate. In the 1960s and 1970s welfare expenditure ballooned until by 1980 it reached nearly half of national output, and despite the “small state” rhetoric of the Thatcher/Major years, it stuck well over 40 per cent. Under Gordon Brown it has risen again to over 45 per cent and shows every sign of rising further.

This massively bloated welfare system has not created schools or hospitals significantly better than were enjoyed in the 1950s. Healthcare is of course better – it is not so clear that the same can be said of schools – but this is as a result of technological advancement and the increased wealth our nation has enjoyed. Indeed, this latter factor would have been far higher had our parents and grandparents show a little more restraint.

Voters since the 1960s have cost those leaving home today half the potential wealth they might have enjoyed, with the higher living standards that would have resulted. We would all be better off had they shown more prudence. It is not too late to learn that lesson and to adopt a growth plan for future generations.

Monday, 5 February 2007

Trust the (roulette-playing) people

It seems that Don Foster MP isn’t the only one with a paternalistic streak where gambling is concerned.

In what seemed at first to be support for a local employer, Adrian Sanders MP wrote a piece in his blog in which he demonstrated disdain both for the local business and for tourists and residents of his constituency, whom he feels are unable to make sensible decisions about how they spend their money.

It is a shame, because his original point was well-made: it is disgraceful that the government should set a new regulatory regime in place for new businesses when existing companies are expected to stagger along under more onerous regulation and so have to operate at a structural disadvantage.

In his posting On The Road To Ruin (the title of which should have forewarned me, of course), he writes:
If you ran a business and the Government licenced [sic.] a competitor in
your area who could operate under a different set of rules you would quite
rightly cry foul. That's exactly what's now happening with the licence for
a second casino in Torbay.

The company that runs our existing casino is contemplating taking the
Government to court to allow its existing business to enjoy the same light touch
regulation that the new licence will allow a new establishment to enjoy.

If the court agrees, instead of one new casino increasing gambling
addiction, household debt and crime in the area, we will have two!

Proponents of the new casino gloss over these social costs, but no one
can point to anywhere on earth where a new casino opened and the suicide rate,
household debt rate, divorce rate, crime rate and gambling addiction rate
fell. In all cases these costs fell on the local population while the
profits made from gambling left the town.

Fascinatingly, he does not suggest that “the suicide rate, household debt rate, divorce rate, crime rate and gambling addiction” actually rose. Merely that they did not fall. Of course the suggestion that all the profits leave town are nonsense, as a visit to Las Vegas or Atlanta will show. The jobs created in both the casino and in supporting industries (e.g. hotels, restaurants) are enjoyed by local people, or if they do draw in workers from outside those workers then earn and spend in the local community.

What is more, as with alcohol and drug addiction or the damage done to themselves by skiers, mountain climbers or marathon runners, the fact that some individuals suffer loss or harm is no reason to restrict – let alone ban – a pastime. It is wrong to restrict all gambling just because some people cannot gamble sensibly, and it is wrong of parliamentarians to step in and seek to constrain individual’s behaviour in a paternalistic effort to protect people from themselves.

To be fair, one cannot fault Mr. Sanders’ final prescription:
We need a debate and a referendum in Torbay [and presumably in other areas too]
where the public can judge the evidence put forward by those who see this as
economic regeneration, against the evidence of those who see this as social
That is right. I hope that all would-be nannies in parliament will restrain their legislative hands and allow local communities to decide. Perhaps while they are there they might take a moment to ponder Randolph Churchill’s exhortation to parliamentarians: Trust the people.

Privatised policing

Villagers in Dedham, Essex, are so fed up with vandalism and anti-social behaviour that they have decided to pay for their own policing.

At a cost of £15 per year per household (which the County Council adds to the precept, the Parish Council’s discretionary taxation appended to the Council Tax), the Parish Council will fund a Police Community Support Officer dedicated to the village.

Dedham is a picturesque Essex village

The privatisation of policing tends to cause a visceral fear in most liberals. The state’s monopoly on coercion and violence are rightly viewed as essential safeguards against the brutal anarchy that would ensue if private armies were allowed to proliferate. Yet on the other hand, hiring a bodyguard or security guard is only a natural extension of the individual’s right to self-defence.

This example is actually a half-way house, with the PCSO remaining an officer of the state, but financed and thus deployed by the local community. This is closer to Britain’s policing heritage than our current system; over the past 30 years successive Home Secretaries have extended centralised control over what were a plethora of local police services, developed from local watch committees. This centralisation has not been entirely positive.

Dedham is famous for Constable

Local policing needs to be rooted much more firmly in the community than is currently the case: at present there are Safer Neighbourhoods panels, and local commanders meet with councillors, but we have a far more centralised approach to policing than is common in Europe or America. Rather than having a local constabulary and a national gendarmerie, our police fall between two stools. As a result, they have lost that greatest of all British traditions, the local bobby on the beat who knew his local area, chatted to the residents and deterred crime. The new Safer Neighbourhoods initiative is an attempt to return to community policing, but local elected officials should be given much more control over local policing than is currently the case.

This particular story does raise an issue of equality, however. While I can see no reason why a community should not be allowed to volunteer to pay for extra security, and while it may make sense for that security to be an officer of the state, I am concerned by the report on today’s Times (a column inch of which explains my unerring knowledge of the workings of Dedham Parish Council) that the Parish will only pay half of the costs of the PCSO, with Essex County Council or Essex police presumably picking up the rest of the bill. This raises the spectre of public resources being allocated to where communities are rich enough to bear part of the costs, but are unwilling to bear all. This is in effect a subsidy to the wealthier sectors of society, who can afford to vote for a £15 a year rise in their Council Tax, diverting resources away from poorer areas where money is tighter. What is more, it allocates resources based not on need, but on ability to pay: as Dedham Councillor Lyn West noted, ‘the village would [not] get "value for money" in view of the low level of crime in Dedham’.
There is clearly a middle ground in this issue, whereby communities would have more control over policing and would be able to buy in more if they chose, while poor areas did not subsidise the security of richer neighbours. This is to give more power over policing to local communities, allow them to vote for the amount of investment in policing to be derived from their own taxes, but not subsidise additional local policing from taxes from the wider community. Let the people of the county pay for the policing of county, which is distributed according to priorities set out by the County Council, while local parishes or wards control their own budgets, which they can augment as they see fit from their own resources. This would strengthen the link between the taxpayer and the public service, and ensure that county-wide resources were allocated according to need, and not ability to pay.
These days it's a different type that is getting them excited.

Thursday, 1 February 2007

British government timorous in the face of death

It is a truth universally acknowledged that the Labour government has no sense of principle or decency. Nevertheless, I am saddened to read that British diplomats have been ordered to torpedo plans in Europe to propose the abolition of the death penalty to the UN General Assembly.

That it would have been an example of gesture politics is without doubt. There is no likelihood that the General Assembly, where unanimity is required, would have passed such a motion. The death penalty remains popular in much of the globe; tyrannical regimes use it as the ultimate deterrent against dissent; and nations without a Christian heritage have entirely different underlying views of punishment, retribution and the sanctity of human life.

It is also true that the proposal has more to do with Romano Prodi’s efforts to shore up his fragile coalition than it does with evangelical zeal.

Yet neither of these are reasons not to promote our values abroad. While we may question the right of nations to dictate to one another by what standards they should live, spreading our beliefs by peaceful means is both a right and an inevitable consequence of interaction. There is an ocean of difference between the work of missionaries and that of conquistadors (to wit, the Atlantic!).

Slavery had a longer history in Africa and the Middle East than it did in Britain and America, but was largely stamped out when Britain and later America banned the practice (though even today there are thriving slave markets in Southern Sudan, among other places). And by-and-large, action on the international stage may be legitimised by international law or natural justice, but it is fuelled by the private interests of the actors: the efforts by 34 countries to liberate Kuwait in 1991 were no less justified because selfish interests motivated their involvement.

The case against the death penalty is strong, and we should consider it a duty to share that case with our neighbours. Admittedly, last month I sounded a note of caution around the time of the execution of Saddam Hussein. I argued that the moment when a nation emerging from tyranny executes its tormentor is not the best time to lecture them on the limitations of the state – the state did not appear very limited under Hussein! As Shami Chakrabarti has commented (in a different context), just because one has a right to say something does not mean one always should.

It does not follow, however, that because there are times when one would be wise not to hector a particular nation, one should hesitate to make a general point to a wide audience. It will always be a difficult moment for somebody. There is in fact a rather pusillanimous air to the government’s reluctance to bring this proposal to the General Assembly on the grounds that it might create difficulties for the Americans.

Britain should welcome an opportunity to advocate, along with our European partners, a noble cause. Sadly, the present government is suffering from a peculiar form of self-censorship: afraid to upset the American administration despite there being no indication from America that they do, in fact, object.

Anyway, the government should not be shaping its foreign policy purely on the basis of American opinion. As I have argued before, a true friend is one that tells you when you are wrong; we will not be doing either the United States or any other country a favour if we keep our counsel to ourselves because of concern that the truth might hurt. This takes courage, however, as well as honesty. Neither of these are virtues associated with the Labour government.