Tuesday, 18 March 2008

New parties to split the silly vote

Fans of Monty Python that also read sites such as mine should be familiar with the fantastic Election Night Special.

If so, they may recall my favourite moment, when a rival “Very Silly” candidate splits the “Silly” vote.

Voice Over: Hello, from Harpenden. This is a key seat because in addition to the
official Silly candidate there is an independent Very Silly candidate (in large
cube of polystyrene with only legs sticking out) who may split the silly vote.
Officer: Mrs Elsie Zzzzzzzzzzzzzzz... (obvious man in drag with enormous
joke breasts)
Voice Over: Silly.
Officer: 26,317... James Walker...
Voice Over: Sensible.
Officer: 26,318.
Voice Over: That was close.
Officer: Malcolm Peter Brian Telescope Adrian Umbrella Stand Jasper
Wednesday (pops mouth twice) Stoatgobbler John Raw Vegetable (sound effect of
horse whinnying) Arthur Norman Michael (blows squeker) Featherstone Smith (blows
whistle) Northgot Edwards Harris (fires pistol, which goes 'whoop') Mason
(chuff-chuff-chuff) Frampton Jones Fruitbat Gilbert (sings) 'We'll keep a
welcome in the' (three shots, stops singing) Williams If I Could Walk That Way
Jenkin (squeker) Tiger-draws Pratt Thompson (sings) 'Raindrops Keep Falling On
My Head' Darcy Carter (horn) Pussycat 'Don't Sleep In The Subway' Barton
Mannering (hoot, 'whoop') Smith.
Voice Over: Very Silly.
Officer: Two.
Voice Over: Well there you have it. A Sensible gain at Driffield

Which is why the London elections are proving to be a joy to behold.

The BBC lists the following candidates for Mayor:

  • Alan Craig - Christian Peoples Alliance & The Christian Party

  • Boris Johnson - Conservative party

  • Brian Paddick - Liberal Democrat

  • Chris Prior - Stop The Congestion Charge party

  • Damian Hockney - One London party

  • Dennis Delderfield - New Britain

  • Gerard Batten - UKIP

  • Ken Livingstone - Labour party

  • Lindsey German - Left List party

  • Matt O'Connor - English Democrats party

  • Richard Barnbrook - BNP

  • Sian Berry - Green Party

  • Winston McKenzie - Independent

So we’ve got One London splitting the UKIP vote, The Left List scrabbling with the (rosy-) Greens for the disaffected socialist vote, both of whom are also fighting Galloway’s Respect on the GLA list (“The Unity Coalition”? You couldn’t make it up!), more Fascists than you can wave a stick at, and Winston McKenzie, who seems to have been through just about every political party except the Liberal Democrats.

Only Christians and Liberals appear to have remained united (thank God and Gladstone!).

You’ve gotta’ smile.

( “#'We'll keep a welcome in the'#” [three shots, stops singing] )

Friday, 14 March 2008

Why freedom matters

When I decided to attend a discussion of Why Economic Freedom Matters at the International Policy Network, I had no idea that I was going to meet one of the most important figures currently influencing the debate between liberalism and the managed economy. Robert Lawson is not a household name, but his Economic Freedom of the World project, published by The Fraser Institute, is one of the most powerful arguments in favour of economic freedom.

Lawson explained that the idea was born in the hot and alcohol-fuelled debates of his undergraduate days. He was an early adopter of liberal economics, citing Smith and Friedman in the face of his friends’ Marxism and Keynesianism. The result of these debates was one familiar to many of us: not once did he recall changing anybody’s mind, nor did he ever question his convictions. For all the wonders of abstract philosophical debate, none of it proved much.

As a professional academic, his solution to this problem has been empiricism. Rather than debate what the effects of different economic policies should be, he has looked at what they actually are. Unable to conduct laboratory experiments, he has instead gone about grading the countries of the world against 42 different economic indicators in five broad categories

Size of government (the level of tax, government expenditure, state enterprise etc.)
Legal structure and security of property rights (including the rule of law, independence of the judiciary and the role of the military in government)
Access to sound money (mainly the avoidance of inflation, but also freedom to hold foreign currency)
Freedom to exchange with foreigners (tariffs, capital controls, regulatory burdens, black market exchange rates)
Regulation of credit, labour and business (how much government meddles)

The results are quite fascinating, and also quite telling. The ten most free economies in the world are

1. Hong Kong
2. Singapore
3. New Zealand
4. Switzerland
5. United States
6. United Kingdom
7. Canada
8. Estonia
9. Ireland
10. Australia.

By comparison, Germany is 18th, Sweden 22nd and France 52nd. The highest African country is Botswana (38) while the lowest is Zimbabwe (141st), the bottom of the league (with the remaining 50 countries providing too little data for Lawson to make an assessment). Venezuela, which was 11th in 1975, is now 135th. Interestingly, China is only 86th, but Lawson explains that while the Special Economic Zones by the coast (some of which are huge: Hainan is larger than Belgium) are probably the freest places in the world, the hinterland is as backward and restricted as ever.

All interesting stuff, and there were some fascinating case studies, but the real fun starts when one compares the index to other indicators. Firstly, income: there is a clear trend of greater freedom translating to greater income (measured per capita at PPP, for the economists among you); each quartile contained populations approximately twice as wealth as the quartile below. The pattern with regards growth was less clear: while the lowest quartile hardly grew at all, the third and first quartile outperformed the second; the presence of China in that third quartile may have played a part there, however, and its economic status is unclear, as noted above.

Perhaps the most interesting findings relate to the relationship between freedom and poverty, however, for the critics of liberalism usually blame it for impoverishing the poor. This is not what Lawson found, however. Proportionally, the share of national wealth owned by the poorest 10 per cent of the population rose ever so slightly as freedom increased, but not evenly: again, the third and first quartile were more equitable than the second and fourth. But if one looked at the overall wealth of that poorest 10 per cent, it was dramatically apparent that it is better to be the poorest among the rich than the poorest among the poor. While in the poorest economies the average amount held by the poorest 10 per cent was just $905, in the third quartile it was $1,545, in the second $2,656 and in the freest economies even the poorest 10 per cent had $7,337 to call their own. As noted above, these are PPP figures; the extent to which a dollar stretches in each country has been evened out.

A few other factors are worth noting (though many follow from the above): life expectancy and access to clean water and sanitation rise in line with economic freedom. Meanwhile, incidents of tuberculosis decline as economic freedom rises, and so, intriguingly, do abuses of civil rights. For it appears that Hayek was right; economic freedom is directly related to political freedom. It may be that the command economcy needs political oppression to make it work (to silence the critics of failing policies), or conversely that a lack of political freedom stifles economic freedom (who can do business without the rule of law?) but socialism and tyranny go hand in hand.

Finally, and also contrary to popular belief, it appears that economic freedom correlates with care for the environmental. This is again the reverse of what is often said – that without regulation unscrupulous countries will dump their waste on society; and that fast-consuming capitalist societies are raping the planet. If one compares environmental performance indicators (local air quality, water quality and so forth) to economic freedom it is again the free who come out best in a clear ascending curve.

Liberals have long maintained freedom was not merely an end in itself, but a means to help achieve better outcomes for everybody in society, to free everyone to maximise their own potential and gain most out of society. Their “discontents” have countered that liberalism (or “capitalism”) exploits the working masses to benefit a privileged few and that it would be fairer and better for all if the economy were managed, businesses regulated and money-supply served the goal of full employment. They are wrong, and the Economic Freedom of the World project proves it.

If greater wealth, health and prosperity are exploitation, I wish the bosses would come for me!

Monday, 10 March 2008

Lib Dem’s turn to have Darling steal their policies

The great policy thief looks like he is about to strike again!

Alistair Darling, Labour Chancellor and policy plagiarist, is rumoured to be about to “unveil a host of new measures in his first budget on Wednesday aimed at cutting carbon emissions” in what is to be billed as “Labour’s greenest [budget] to date.”

Should we be surprised? Of course not. In his first pre-Budget report, Darling ditched months of Labour plans in a naked attempt to out-Tory the Conservatives by offering an Inheritance Tax cut that Nick Clegg argues will help just 6 per cent of the population. Nick suggests that these are richest 6 per cent, though the most South Easterly 6 per cent might be nearer the mark!

Now, Darling appears poised to out-Lib Dem the Liberal Democrats by finally addressing Climate Change in his budget. Naturally, however, the real motivation is not the global but the financial climate, as he faces a hole in his budget that will require tax rises of £8 to £9 billion a year

In truth what we can look forward to is a token gesture on the environment in a budget that will not satisfy environmentally or equitably.

The Liberal Democrats have proposed a massive shift of taxation from income to pollution. Lib Dem proposals would seek to raise (if I remember correctly) £18bn a year from new environmental taxes, with which we would finance a massive tax cut off the basic rate, reducing it to the lowest level since… well… the last time the Liberals were in power. The personal allowance would soar to well over £7,000 a year, so that those on very low wages would pay almost nothing. And the Council Tax would be abolished forever – a long overdue measure.

By comparison, we can expect a rather lukewarm series of ill-thought-out measures from Darling. For example, the rumoured "showroom tax" of £2,000 on the price of the most gas-guzzling cars may indeed discourage consumers from buying them, but it is not the purchase of these cars but driving of them that is the source of pollution: this measure will not only unnecessarily penalize those who drive very short distances in very flash cars, but will also create no incentive to those who have already bought such a car, or who choose to do so despite the new tax, to economise on fuel. Indeed, perversely, economic theory suggests that if the car is more expensive, the owner needs to drive it more to ensure that they get their money’s worth!

By far a more effective means of tackling carbon emissions would be to abolish all taxes on the purchase of cars, and raise the money instead by increased in fuel duties. As somebody who has become painfully aware of the cost of petrol recently, I can attest to the fact that there is nothing more effective at encouraging economic use of fuel than seeing the counter on the petrol pump spin round.

Sadly, while it is unlikely that Darling will satisfy anybody with his budget, it is equally unlikely that the media will recognise that he is beginning to accept the wisdom of Lib Dem policy. And with a General Election probably two years away, we are saddled with Labour incompetence for some time to come.