Liberal Polemic

Change you can believe in?

2009-01-20T00:43:00.003Z

Barak Obama asked us “to believe not just in my ability to bring about real change in Washington, but to believe in” the ability of the American people to do so.

So what exactly will the election of President Obama change?

Not the face of administration, clearly!

European Parliamentary Party expects Lib Dem activists to listen and learn

2009-01-16T17:44:00.003Z

What an organiser writes bout the event they are organising says a lot about them and how they view their audiance.

Consider the break-out session at tomorrow’s One Day Policy Conference being run by the Liberal Democrat European Parliamentary Party entitled The European Dimension. Unlike the other five sessions, which set out the broad parameters of the issue they would seek to discuss and then propose some questions, the description of The European Dimension consists of a very long paragraph extolling the virtues of the European Union. This seems to be a case of preaching to the converted at a Lib Dem conference, but may be designed to deter any doubters from attending.

There follows a paragraph in which we are told that “Three of our MEPs will speak about their work and that of the ALDE Group in the European Parliament… This workshop will tell you why and how Europe matters to Liberal Democrats” (emphasis added).

Note who is doing the talking here, and who is expected to listen and learn. Pity the naive activist who thought that policy conferences were an opportunity for the grass roots to influence policy.

Fortunately, the rest of the sessions appear to have been organised by more concensual bodies. From taxing women to the Home Affairs team on drugs, it looks like being an interesting day.

Taxpayer loans to people who want new cars: Labour's latest bail-out wheeze

2009-01-15T21:53:00.006Z

When I find myself in agreement with both Friends of the Earth and the Church of England I know that something truly bizarre is happening.

And bizarre is the nicest word I can find for the Government’s plan to lend taxpayers money to private citizens so that they can buy new cars.

Apparently, the British borrow a staggering £20 billion a year to finance the purchase of new cars. And with credit drying up and sales down 36.8% on the previous year, motorcar manufacturers have been left with thousands of unsold (some might say “unwanted”) cars.

Step forward Lord Mandleson, scourge of savers and friend of the spendthrift.

The Times reports that car-buyers are to receive loans from the taxpayer: finance companies linked to the auto industry will be given access to the Bank of England’s special liquidity scheme so that they can continue to offer loans.

It is bad enough that the government intends to underwrite mortgages at a time when the assets underpinning them are falling in value. At least a house will continue to have some value; few houses will not cover the majority of a person’s mortgage. Cars, by comparison, are not assets but consumption goods, and lose value from the moment they roll off the forecourt. What is more, the collapse in new car sales has been shadowed by a parallel collapse in the sale of second hand cars that has pushed down the price of used cars and so will hasten the depreciation of the value of new cars.

Where is this madness to end?! Will the government soon be offering interest free credit at Dixons? How long before one can sign up for an HM Treasury credit card (26.5% APR and balance transfers of up to the sum of your mortgage, interest free until the next financial year).

The fact that Britons were borrowing £20 billion a year to finance the purchase of new cars is not an admirable state of affairs to which we should be aspiring, but a symptom of the extent to which the UK had become a buy-now-pay-later culture. As the government held down interest rates so as to stoke an unsustainable boom, saving became unattractive while borrowing was made all-too-easy. The result was that economic growth and personal consumption were based on unsound foundations. The dangerous credit bubble that was created has now burst, throwing millions out of work and causing the economy to shrink by over 2% in just six months, and we cannot avoid these tragic consequences by trying to recreate the failed system.

The solution to the current crisis, and the way to avoid returning to boom and bust, is not to pour millions of pounds worth of taxpayers’ money into the hands of people who want to buy a new car. That the car manufacturers mistook inflationary demand for real demand is a tragedy, and reality will hit shareholders and employees hard. But restoring the credit flow will only push them back into fantasy, while depriving the taxpayers of the money that they would otherwise spend on other things, saving or creating other jobs. If the only way to maintain a car industry at the size it operated in 2007 is for consumers to borrow £20 billion a year, then the car industry will have to contract.

There is a recession on. People are right not to buy new cars. If the need to replace their cars, the second hand showrooms are full of good cars at great prices. If they really must buy new, they should be willing to pay the market rate of interest – which in these uncertain times is suitably high. For the government to deny this is unbelievably stupid. But then, what did I expect?

Making the civil service more businesslike

2009-01-10T14:18:00.002Z

This is all the more amusing for having been written in the 1930s!

Officialdom classifies activity according to the capacity for undertaking it formally acquired by means of examinations and a certain period of service. 'Training' and 'length of service' are the only things which the official brings to the 'job'. If the work of a body of officials appears unsatisfactory, there can be only one explanation: the officials have not had the right training, and future appointments must be made differently. It is therefore proposed that a different training should be required of future candidates. If only the officials of the communal undertaking came with a business training, the undertaking would be more business-like. But for the official who cannot enter into the spirit of capitalist industry this means nothing more than certain external manifestations of business technique: prompter replies to inquiries, the adoption of certain technical office appliances, which have not yet been sufficiently introduced into the departments…, the reduction of unnecessary duplication, and other things. In this way 'the business spirit' penetrates into the offices of communal enterprise. And people are greatly surprised when these men trained on these lines also fail, fail even worse than the much-maligned civil servants, who in fact show themselves superior at least in formal schooling.

It is not difficult to expose the fallacies inherent in such notions. The attributes of the business man cannot be divorced from the position of the entrepreneur in the capitalist order. 'Business' is not in itself a quality innate in a person; only the qualities of mind and character essential to a business man can be inborn. Still less is it an accomplishment which can be acquired by study.... A man does not become a business man by passing some years in commercial training or in a commercial institute, nor by a knowledge of book-keeping and the jargon of commerce...

When these obvious truths became clear in the end the experiment was tried of making entrepreneurs, who had worked successfully for many years, the managers of public enterprises. The result was lamentable. They did no better than the others; furthermore they lacked the sense for formal routine which distinguishes the life-long official. The reason was obvious. An entrepreneur deprived of his characteristic role in economic life ceases to be a business man. However much experience and routine he may bring to his new task he will still only be an official in it. It is just as useless to attempt to solve the problem by new methods of remuneration. It is thought that if the managers of public enterprises were better paid, competition for these posts would arise and make it possible to select the best men. Many go even further and believe that the difficulties will be overcome by granting the managers a share in the profits… But the problem is not nearly so much the question of the manager's share in the profit, as of his share in the losses… To make a man materially interested in profits and hardly concerned in losses simply encourages a lack of seriousness…

(Ludwig von Mises, Socialism, pp215-7.)

Peter Riddell slams Labour and Tory “peripheral initiatives” on economy

2009-01-08T22:54:00.007Z

Peter Riddell is the doyen of Times columnists and his insights into politics are usually pretty spot-on. It was therefore gratifying to see him arguing in yesterday’s column that the “irrelevant initiatives and hectic trips around the country” of Gordon Brown and David Cameron are merely a substitute for action, and that their many and varied proposals are economically flawed and designed to buy-off political constituencies rather than achieve macro-economic recovery.

Brown's pledge to create 100,000 jobs and Mr Cameron's new savings package do not address the cause of the deepening recession: the lack of credit. Everything else is secondary… [T]he job and savings initiatives are distractions. They address symptoms not causes…

Both the Brown and Cameron initiatives are about political positioning: to demonstrate their concern about the recession and to show they are doing something. The most damaging charge now is of inaction. The plans are also aimed at potential supporters, with Mr Cameron generating a positive response from Tory websites and activists seeking tax cuts, even though he has been criticised by independent commentators.”

Riddell is entirely correct. The only way this recession will end is if the equilibrium between borrowing and lending is established, and preferably at a level that sees interest rates reflecting real time preferences, rather than being massaged down by governments in an effort to stimulate short-lived but vote-winning “booms” (today rebadged as “soft-landings” and even “recoveries”).

I am not entirely sure I agree with his thrust that this should be achieved by the Government pumping vast sums of extra money in to the banking sector: today’s Times headline brings tears to the eye. Excess credit expansion is what brought us to this sorry state and further credit expansion is only going to bring us her again in the future (‘If you are in a hole, the first thing to do is stop digging’). However, whether one accepts that the economy needs to go through a period of readjustment or you believe that masses of liquidity needs to be pumped into the banking sector to stop an outright collapse, the fact remains that bail-outs for car companies, government make-work schemes and financial gestures are not only going to fail in their objectives, but will in the process make the situation a lot worse.

Riddell is not nearly firm enough in this, however, and occasionally lapses into Keynesian fantasy. “Bringing forward capital projects makes sense,” he claims, before admitting that it “is unlikely to have more than a marginal impact.” Similarly, he thinks that “There is a case for boosting saving in the long term, but not in the short term when the need is to raise spending,” ignoring the fact that money saved equals money spent: banks can’t hang onto money for long, and sooner or later it has to be invested in businesses or – as the result of more misguided government intervention – used to buy government bonds, which means that either way it ends up in the “real economy”. One man’s saving is another man’s (or company’s) borrowing and spending.

He also gives his blessing to the idea of extended state guarantee for loans that has been proposed by both the government and the Tories. But this is an extremely dangerous proposal for two reasons. Firstly, businesses are currently going bust because lenders are not willing to extend credit to them for fear that they will go bust anyway and thus default. If government guarantees these loans, banks will have no reason to exercise one of their primary roles – as arbiters of who is credit-worthy and who is not – and will be inclined to loan money to all and sundry, knowing that the bank is shielded from loss. The result will be that the government will end up with huge numbers of loan defaults to cover.

And that creates the second problem, which is the moral hazard facing the government as a result of these loans. According to Riddell, “The answer is not unconditional bailouts, as in the 1970s, but some way of breaking the credit logjam”. But once a firm that has outstanding loans backed by government guarantee is faced with bankruptcy, it will have a far more powerful hold over government when it seeks a bail-out. The argument that a subsidy of a few million will avert a collapse and default that saddles the taxpayer with a debt of tens of millions will be hard for government to resist. Conversely, the flood-gates of industrial policy will be open as government will expect influence in return for its largesse: as Riddell himself admits, “the larger that government guarantees become - and they could be enormous - the greater the demand for specific commitments in return.”

Haven't I already said all this?

2009-01-07T17:26:00.002Z

This all sounds very familiar!

In the words of Ludwig von Mises, "a government can spend or invest only what it takes away from its citizens... Its additional spending and investment curtails the citizens' spending and investment to the full extent of its quantity."

A few words from Gordon Brown

2009-01-06T23:45:00.002Z

"Under this Government, Britain will not return to the boom and bust of the past."
Pre-Budget Report, 9th November 1999

"Britain does not want a return to boom and bust."
Budget Statement, 21 March 2000

"Mr Deputy Speaker, we will not return to boom and bust."
Budget Statement, 7 March 2001

"As I have said before Mr Deputy Speaker: No return to boom and bust."
Budget Statement, 22 March 2006

"And we will never return to the old boom and bust."
Budget Statement, 21 March 2007

Hat-tip to Eamon Butler for pulling all these together. I'm sure that there were more!

Che: the prequal?

2009-01-06T18:13:00.006Z

It might be worth watching this before indulging in any two-part encomiums for Che Guevara.

Not sure about the diversion into Mao, but the theme song's pretty funny, too.

Another reason to like Paul Walter

2008-12-25T13:53:00.001Z

Perhaps we should set up a small factory making these.

The pot calling the kettle black

2008-12-24T15:58:00.002Z

According to the Daily Mail, the Pope has been accused of spreading fear about homosexuals.

Imagine!

Are our leaders misrepresenting Keynes?

2008-12-24T15:54:00.002Z

Central Banks appear to be citing Keynesian monetary policy as a reason for pushing down interest rates to dangerously low levels.

Yet it is far from clear that the dead economist would himself have approved of low or no interest rates.

According to his General Theory of Employment, Interest and Money, when the "rate of interest has fallen to a certain level… almost everyone prefers holding cash to holding debt which yields so low a rate of interest," as a result of which central banks can "lose effective control over the interest rate" (p. 207).

The problem, as I have noted repeatedly, is that if interest rates are low, there is no incentive to lend money, thus furthering the very “liquidity trap” that the Central Banks believe they have to resolve. As Keynes understood, people have no incentive to hold bonds (or deposits) rather than cash. In fact, the rational investor would shift their money abroad.

Rather than resolving the problem, today’s low interest rate policy is sowing the seeds of the next economic crisis by encouraging further credit expansion which, in turn, will lead to further misallocations of resources and requiring future punitive interest rate rises.

The role of the economist as policy advisor

2008-12-24T00:02:00.007Z

Economists are not traditionally popular as policy advisors. Economics teaches that resources are limited, that choices made imply opportunities forgone, that our actions can have unintended consequences. This is typically not what government officials want to hear. When they propose an import tariff to help domestic manufacturers, we economists explain that this protection will come only at the expense of domestic consumers. When they suggest a minimum-wage law to raise the incomes of low-wage workers, we show that such a law hurts the very people it purports to help by forcing them out of work. On and on it goes. As each new generation of utopian reformers promises to create a better society, through government intervention, the economist stands athwart history, yelling "Remember the opportunity cost!"
Peter G. Klein: Why Intellectuals Still Support Socialism.

The Green Road to Nowhere

2008-12-22T09:23:00.003Z

History is repeating itself, though whether as tragedy or farce awaits to be seen. As our economy enters another of its periodic recessions, caused as ever by government meddling in the economy, politicians race to solve the problem with further doses of the same poison.

Sadly, in an age where politicians fear differentiating themselves from one another and parties squabble over a consensus they disingenuously call the middle ground, there seems to be no real debate over how best to ensure that the recession that we are now in is as brief as possible. Just as President Hoover’s failed interventions were succeeded by President Roosevelt’s even greater interventions, so today politicians seem to be in a bidding war to intervene in the economy.

The latest dose comes from the Liberal Democrats, who have joined the chorus with their latest call for action. Nick Clegg has announced a Green Road Out of the Recession that is built on the same errors that underpin Labour’s proposals and the $4.61 trillion US bailout.

It is a simple error, summed up by Henry Hazlitt when he notes that “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.” It is the error of looking at the immediate results of what one does but not the damage that doing it causes; specifically, of believing that one can utilize a resource (in this case, money) for one purposes without denying it to another.

So let us be utterly clear: when the Lib Dems say “Now is the time for big investment to get the wheels of the economy turning again”, any rational observer should immediately ask “From where is the money coming, and what will be sacrificed so that this investment can be achieved?”

It is an impressive list the Lib Dems have compiled: new trains; new railways; new track; social homes; insulated lofts; smart meters. It will “create jobs and ensure that once this recession is over, we have something to show for the money we borrowed.” All of which is true, but what it does not show is all the jobs that will not be created because the money that would have been spent creating those jobs has been siphoned off by government to pay for its own projects.

There is absolutely no reason why government spending of £12.5 billion (as the Lib Dems propose) should create more jobs than private spending of £12.5 billion. On the contrary: while markets operate specifically to maximise economic efficiency – by, for example, allowing people to spend money on projects that will maximise their own utility – government’s have no such built-in discipline and no means of weighing the efficiency or efficacy of different projects. In fact (as the sorry litany of failed government projects demonstrates) governments all too often blow vast sums of taxpayers’ money on projects that promise big benefits but deliver dubious or disappointing outcomes.

I should add that this is not a criticism of any individual project and certainly not of the environmental (“green”) thrust of the proposals. That the “road out of recession” is “green” is irrelevant. We could as easily talk about the white heat of technology or indulge in some blue-skies thinking. The point is that this is being sold on economic, not environmental, grounds; if the Lib Dems were as keen on agriculture as we are on environmentalism, we could as easily advocate policies akin to President Hoover’s New Deal farm programme, and the proposals would be no less flawed. Government cannot spend the country out of recession.

The reason for this is that government money must come from somewhere, and not matter what its source, it merely transfers money from one use to another. If we spend £12.5 billion on new trains to “create jobs” and “stimulate industry” then the money, workers and materials that are diverted to those ends are no longer available to make shoes, televisions, meals or whatever else we might buy. The net effect in jobs created, wages spent and economic activity stimulated is zero.

Indeed, while we may scoff at the 2.5% cut in VAT and say that the £12.5 billion could be better spent insulating lofts, it ignores the fact that the £12.5 billion would otherwise have been spent by consumers on (for example) carpets. The criticism that the VAT cut would not in fact encourage people to buy is valid in as far as an individual price reduction of 2.13% is not going to make a product hugely more attractive to buy. But the fact that the money remains in people’s pockets means that it will eventually be spent somewhere. It will still represent an increase in consumer demand and so will stimulate growth.

Thus the one part of the Green Road Out of the Recession which is sound is the bit that promises “big, permanent tax cuts”. It is the bit that has been policy for over a year and upon which conference voted. It would transfer spending from inefficient governments to efficient consumers and so allocate resources in the marketplace (that is to say you and me and our respective savings) most efficiently.

A couple of additional points need to be made, to head off possible comments (welcome though all comments are, of course!). Firstly, it makes no difference if the government gets the money through taxation, inflation or borrowing. Borrowing has exactly the same effect as taxation in as much as it diverts savings from being invested in industry and instead invests it in public services; there is still no net gain. It also lands future taxpayers with a bill, so diverting money from future generations to the present. Inflation is effectively a flat tax: if we “print” an additional 1% of money, we are reducing the value of everybody’s savings and wages by 1% - an “inflation tax” that falls as heavily on the poor as it does on the rich (except that rich people are more likely to own commodities or foreign assets that are inflation proof, so inflation may actually be regressive). It also creates imbalances in the economy that will lead to further crises in the future.

Secondly, it makes no difference that this is supposedly “investment” rather than mere “spending”. It is certainly true that this sort of government spending will ensure that “once this recession is over, we [will] have something to show for the money we borrowed.” I have a house to show for the money I borrowed in December, but it does not follow that I made a sound “investment”. Had my internal chancellor not borrowed and spent, my internal taxpayer would not now be saddled with debt.

As Adam Smith noted over two centuries ago, “What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom”. What is more, the fact that we can see what the borrowing has financed should not blind us to the fact that we cannot see the things that the borrowing has denied us: other investments will have been sacrificed. And finally, even spending on consumer fripperies stimulates long-term investment: if demand for MP3 players and trainers increases, so does investment in the production and retailing of these (so creating jobs) and in the infrastructure needed to move them about. Indeed, as taxes/inflation/borrowing tend to make it particularly hard for new businesses to arise, because capital formation (i.e. saving) is harder and credit is absorbed by government, new start-up businesses such as those marketing new solutions to environmental problems struggle to get off the ground. Big government spending may therefore be counter-productive even environmentally!

I also ought to add that members of other parties shouldn’t’ take too much pleasure in seeing me demolish my own party’s latest policy initiative. Neither Labour nor the Conservatives have exactly covered themselves in glory during the present economic crisis and both are participating in the flawed concensus politics outlined above. This article focuses on Liberal Democrat policy only because errors are doubly galling when they come from within one’s own camp and I would like to see the Lib Dems taking a braver, more distinctive and more honest approach to the current crisis that did not argue that more government can get us out of a problem that government made in the first place. The alternative norm of passing money through the hands of politicians instead of citizens has been Labour and Conservative policy for the last century and it has been a tragic disappointment.

Gordon Brown: Superhero!

2008-12-10T13:49:00.003Z

Gordon Brown saves the world!

Tories: if it’s fun, ban it; if it delivers papers, spy on it!

2008-12-10T13:46:00.001Z

The Conservatives sometimes like to think that they believe in freedom. I’m not entirely sure where they get this delusion, but I am always assured that sooner or later they will expose themselves as the paternalistic autocrats that they naturally are.

So a hat tip to Conservative Home for highlighting

The generosity of T-Mobile and other retailers

2008-12-09T17:35:00.001Z

I received an email from T-mobile today telling me that they were kindly passing the 2.5% cut in the VAT rate on to their customers and I would see the reduction in my next bill. They are not the first to make this statement.

Excuse me, but is somebody a bit confused here?

T-mobile is not my bank. Nor are any of the retailers now offering to pass the VAT cut onto customers.

The 2.5% cut in the rate of VAT is not a shift in the rate at which they buy energy from the government, which they may then choose to pass on or not depending on their own whim and the details of my contract.

VAT is a tax on consumption of luxuries (at least in theory). In fact, at the bottom of every receipt it says how much of the bill is tax. Therefore, a cut in VAT should automatically be passed onto consumers.

In fact, it is not the phone company or the retailer that is charging me the 17.5% (or now 15%) VAT in the first place. It is government. So for the retailers to “not pass it on” they would have to raise their prices by just under 2.5%.

So let us thank T-mobile and other retailers for not taking the opportunity of a reduction in VAT to raise their prices in a manner that would either have left them individually less competitive or collectively guilty of operating a cartel.

CEBR forecast 30% rise in property prices

2008-12-09T00:45:00.004Z

Like second marriage, this looks like an example of hope triumphing over experience!

Why the Government’s plans to rescue the economy don’t seem to be working

2008-12-09T00:13:00.008Z

The Times captures the mood perfectly: “The economy is plunging deeper into recession despite emergency tax cuts and the multibillion-pound bank bailout, the Bank of England said yesterday.”

What it fails to mention is that this is all utterly predictable and indeed inevitable. The reason that “Cutting the base rate to its lowest level in more than 50 years, the Bank said the outlook now was worse than a month ago, with manufacturing and consumer spending in sharp decline” is that cutting the base rate is not going to have much impact.

The base rate is just one driver of credit, and it is not by far the most important. What is more, it does not address the real problems in the economy, which is that the credit expansion of the last decade has fooled entrepreneurs into thinking that investments were viable when in fact they were not. In some cases, whole businesses will now need to be liquidated as reality crashes in on those who had been fooled by artificially-low interest rates.

Reducing interest rates again cannot solve the problem. Just as the first rule when one finds oneself in a hole is to stop digging, so the first rule when one finds oneself facing the inevitable crash following an inflationary spike is to stop inflating. Further interest cuts (as preached by all political parties) are simply attempts to stimulate more credit expansion, which means further inflation. This will lead to more poor decisions by entrepreneurs and more unviable businesses being created, expanded or propped up. That can only lead to an even bigger crisis in the long run.

“The Bank of England pinned much of the blame for the economy’s slide on the borrowing drought that high street banks have inflicted on consumers and businesses alike” according to The Times, but in doing so the Bank misses the point. The borrowing drought is the result of banks making sensible economic decisions in avoiding making the same kind of loans that got us into this mess in the first place.

For let’s be clear about this: the loans that the banks are currently proving reluctant to make are those that they fear may not be repaid; those that, in American parlance, are “sub-prime”. In a market where asset prices are falling, many homeowners are in negative equity and many businesses are destined for bankruptcy, further lending would not only be stupid, it would be irresponsible.

Far from cutting interest rates, the Bank of England should be raising them so as to reduce the demand for credit and increase the desire of savers to provide it. In doing so, it will not only redress the massive imbalance between saving and borrowing that has led the West to borrow trillions of dollars of the (thrifty) Asians as well as creating money through government-backed central banks, but it will also accelerate the reallocation of “factors of production” between unviable and viable industries. As a result, it might just make this a sharp but short recession, instead of another painfully-drawn-out one.

Henry Hazlitt on the so-called “free market”

2008-12-08T15:01:00.004Z

I have recently been reading Economics in One Lesson by Henry Hazlitt, and this section from the end of Chapter XVI particularly caught my attention:

[B]y the greatest miracle of all, this postwar world of super-international controls and coercions is also going to be a world of "free" international trade! Just what the government planners mean by free trade in this connection I am not sure, but we can be sure of some of the things they do not mean. They do not mean the freedom of ordinary people to buy and sell, lend and borrow, at whatever prices or rates they like and wherever they find it most profitable to do so. They do not mean the freedom of the plain citizen to raise as much of a given crop as he wishes, to come and go at will, to settle where he pleases, to take his capital and other belongings with him. They mean, I suspect the freedom of bureaucrats to settle these matters for him. And they tell him that if he docilely obeys the bureaucrats he will be rewarded by a rise in his living standards. But if the planners succeed in tying up the idea of international cooperation with the idea of increased State domination and control over economic life, the international controls of the future seem only too likely to follow the pattern of the past, in which case the plain man's living standards will decline with his liberties.

So much for “peak oil”

2008-12-08T14:58:00.006Z

It seems a long time ago, now, but just prior to the recent recession the price of oil reached new heights and wild predictions of $200 a barrel and more were flying around. At the time, many energy- and environment-pundits, including some among the Liberal Democrats, believing that we had now reached “Peak Oil”, that mythical time when the increase in our rate of consumption outpaces the increase in our rate of discovery and so initiates an accelerating decline in supply until the oil runs out and civilisation as we know it ceases to exist.

Those who talk about it often have a slightly excited look upon their faces, as though they cannot wait for the final cataclysm to come so that they can say “I told you so” as the cities begin to go up in flames and people collect together in small bands to try to eke out some semblance of survival in the mountains.

They appear to have gone rather quiet recently, however. Once again, “peak oil” has turned out to be nothing more than a foothill in the great undulating range of energy prices. Oil prices have fallen by two thirds in the past six months to end up $100 a barrel below their Summer peak at just $50 a barrel.

Of course, peak oil is nonsense anyway. Firstly, it is based upon a deliberate obfuscation of known, economically viable reserves on the one hand, and what is in fact under the crust on the other: oil companies only list the reserves that they have so far identified, and they do not list reserves that are, at current prices, too expensive to be viable, while at a higher price they would be worth drilling for. As Russell Lewis explains,

Oil reserves are never remotely equivalent to all the oil in the earth’s crust.
The proven reserves are what the oil companies have decided to look for and
which are known to be exploitable under prevailing technical and economic
conditions. They are designed to provide the oil industry’s working inventory of
oil stocks. There is a limit to the amount of money the oil companies can spend
on searching for more or deeper wells because prospecting and drilling are
expensive, and there are other competing obligations which affect their
long-term profits, such as advertising, marketing, research, building refineries
and distribution. The best indicator of whether oil is getting scarcer is its
price, and though prices have risen sharply in the last two years [and bearing
in mind that this was written before the collapse in prices in the last six
months], that fact does not necessarily point to a long-term upward trend.

This does not mean that oil could never run out, however. That is left to the price mechanism. As the supply of oil diminishes, the price will inevitably rise. This will not, however, trigger a mad rush to capture ever shrinking reserves until the oil economy collapses; rather, it will lead to a steady rise in prices that will encourage greater efficiency, spur research into make alternatives more cost-effective. For example, if fossil fuels quadrupled in price, wind turbines would be able to generate electricity more cheaply and so they would become a viable alternative. The increase also pushes up the cost of high-energy products and services (such as flights) and so discourages consumption. And finally, as we have already seen, rising fuel costs encourage consumers to pay more attention to the miles-per-litre that their car can achieve and so encourage producers to invest in more efficient engines.

In fact, this last points to another flaw in the peak oil theory: it ignores human ingenuity. Even accepting that there is a set amount of oil, it is irrelevant to our ability to produce power from it. By inventing an engine that is twice as efficient, or a new means of producing plastics that requires half and many hydrocarbons, we have effectively doubled the amount of fuel available even if we have the same number of litres. If we invent alternative technologies, lakes of oil are made available for the remaining needs. In truth, we will never run out of oil, because before that ever happens human action and rising prices will have rendered oil surplus to requirements.

So the next time you see that fuel prices are rising and hear somebody mutter about peak oil, you can rest assured that new research is underway that will soon bring prices back down, and that there is plenty of oil left under the ground. More, in fact, than we will ever need.

Queen's Speech a textbook example of meddling and failure

2008-12-03T14:16:00.003Z

Today’s Queen’s Speech is another fine example of government meddling and failure.

One Bill after another is being introduced to interfere with people’s legitimate freedoms and try to paper over the cracks in their interventionist system.

I have recently written on the phenomenon that government intervention is doomed to fail and that in doing so it encourages further intervention as governments try to repair the unintended consequences of their own legislation. Clear examples of this are to be found in the Queen’s Speech.

There is too much in the speech, and there is too much as yet unclear, to make a comprehensive attack on the Labour agenda for 2008-9, but the following is an analysis of some of the problems raised.

Business Rate Supplements Bill

The proposals to enable upper tier local authorities and the Greater London Authority to levy a supplement on their business rates, and use this to promote economic development, have a certain charm in that they restore a tiny modicum of tax-raising discretion to local authorities (though not, infuriatingly, to the 32 London Boroughs!).

Of course, any wise local authority would exercise the better part of discretion and not exercise the power. Increasing business rates by up to 2p in the pound will simply squeeze business profits, putting some out of business, driving others away and reducing the ability of the remainder to invest in capital goods (including training) that improve their productivity (and thus the wages of staff). The money raised will never achieve the level of “economic development” that would otherwise be achieved by individuals allocating resources based on their own priorities (a level of information detail that no government can hope to emulate) but will instead be wasted on schemes that appeal to legislators and those who are best able to influence them. It will replace the freedom, efficiency and effectiveness of the market with imperfect politicised outcomes.

Interestingly, the Bill makes provision for allowing businesses to vote on any proposals. It must be assumed that this vote will not be extended to those businesses (with rateable values of less than £50,000) that will not be taxed, as representation without taxation would just allow them to pillage the profits of their more-successful rivals.

It does raise an interesting question, however: why not allow Council Tax payers a similar freedom: a plebiscite enabling them to veto any council policy that would be funded primarily by local taxation. That would certainly put the wind up spendthrift officers and councillors.

Local Democracy, Economic Development and Construction Bill

The devil is in the word “Construction”. Little detail is available on this one, but it does appear to include provisions for a more level playing field for construction businesses, particularly smaller local ones, in construction contracts. Whether this is more anti-success regulation is unclear, but considering the onerous costs that businesses and authorities already have to incur putting tenders through OJEU and other legal competitiveness tests, this can only be detrimental to business. Fairness is best achieved through a free market, where those that discriminate against providers for any reason other than efficiency will be forced to pay higher prices for poorer goods or services and so will see their businesses suffer.

Saving Gateway Accounts Bill

The government’s plan to establish a Saving Gateway scheme, administered and approved by HMRC, with the government “matching” every pound saved with 50p from government up to a maximum of £300 (not the “matching” that Anglophones will be familiar with!), is old-fashioned redistribution of wealth with an added paternalistic twist: the poor must “do the right thing” – by which Labour means save money in bank accounts – to earn their redistributed wealth.

Glossing over questions about the sense of or justification for transferring wealth, this is bad legislation for two reasons: firstly, because it creates a massive dead-weight cost in that the government will have to pay people who would have saved the money anyway; and secondly because it will encourage rent-seeking as people make arrangements to borrow-to-save, for example by borrowing on credit cards (at rates of, say, 25% or 30%) knowing that there is a guaranteed profit of 50% in the first year.

Children, Skills and Learning Bill

The Children, Skills and Learning Bill promises to enforce compliance with the Standard Teachers’ Pay and Conditions Document. The very existence of this document is a problem, as the setting of national standards across England ignores the different costs of living and levels of supply and demand, and further undermines educational independence. At worst, it could see pay and conditions set at too low a level to attract staff to some areas, while being unnecessarily generous (with the resources of local taxpayers) in others.

It also creates a statutory entitlement to apprenticeships for all those suitably qualified by 2013. Unless the meaning of “apprenticeship” has changed, this is idiotic. Apprenticeships involve qualified individuals working for established providers so as to learn on the job; the government cannot increase the number of apprenticeships beyond the demand among qualified workers for apprentices. The proposed duty on the Learning and Skills Council to provide apprenticeship places may easily morph into the provision of further course-based training, which would defeat the supposed purpose.

Policing and Crime Bill

A bill to protect vulnerable groups, particularly women and children, may seem welcome at first. But one has to wonder at a government that considers 51% of the population to be a “vulnerable group” simply because of their gender!

The main problem with this bill is the plans to tighten regulations on lap dancing clubs and the sale of alcohol. Lap dancing clubs are places where consenting adults go to watch other consenting adults perform erotic dances; it should have nothing to do with the government what these individuals (or groups) choose to do. Similarly, government has no business interfering with the right of businesses to sell, or adults to buy and consume, alcohol. As I have noted before, this kind of legislation is never directed at our claret-swilling elites, but at those whom they see as they look down their wine-flushed noses.

Where there are ancillary problems (for example, anti-social behaviour in the environs of the club or pub) they should be dealt with in their own right,

Marine and Coastal Access Bill

The Marine and Coastal Access Bill continues the assault on private property by forcing property owners to allow trespassers to walk over their land simply because they happy to have bought property adjacent to the sea. If the proposal was applied to all properties, so that ramblers may cross anyone’s land at will, it would be fair, but it would also be as welcome as the Poll Tax.

Constitutional Renewal Bill

Finally, something good in the government’s proposals. Thank heavens they are finally repealing their own, oppressive legislation. One law down, 10,000 more to go!

I’m inside so shut the door

2008-11-30T15:56:00.002Z

I was saddened to read comments today by the Indian-born entrepreneur Sir Gulam Noon.

According to the Daily Mail, the “controversial Labour donor” has called for a ten year ban on immigration to the United Kingdom so as to give time for the current immigrant population to settle in and integrate and to make sure that there are enough jobs to go around.

In his modestly titled autobiography, Noon, with a View: Courage and Integrity, the so called ‘Curry King’ writes “Bluntly, I think we are self-sufficient now. We should wait for five or ten years, until all the newcomers have been properly integrated and assimilated into the country. Until then we should just shut the door.”

This is a shame, as Noon is a perfect example the benefits of immigration to the UK economy and society. Arriving in 1966 with just £50 in his pocket, he has since made a fortune of £65m, employed thousands of people and satisfied many thousand more customers. He has contributed hugely to the economy and (through taxation) to the funding of public services. A few more Noons (Labour donations notwithstanding) would be welcome.

However, it a sad example of double-standards, he would now seek to deny that opportunity to other would-be immigrants and entrepreneurs.

His thinking is clearly flawed, resting on common errors such as the idea that the UK is ‘full’ (we in fact have far lower population density that the Netherlands, Belgium or Taiwan and approximately the same as Germany) or that there are only so many jobs to go round.

He also cites the rise of the British National(ist) Party as an example of the dangers of “disturb[ing] the balance and upset[ing] the … host community”, as though those fascist thugs represented mainstream opinion. Sadly, his comments are more likely to play into their hands – I can already imagine them reproducing his words on their literature.

The truth is that the quantity of work available in an economy adjusts with demand, so that the more people one admits the more work is needed. Of course it would be harmful to the economy if immigrants did not work, but the suggestion that immigrants arrive to take advantage of our welfare state and live I life of idleness is simply not born out by evidence. Many immigrants pay several thousands of pounds to reach the UK, which they would hardly do just for the privilege of living off £60 a week.

There is a regrettable tendency among some immigrants to wish to close the door after them, stemming the competition from the next wave of immigration. It seems that Sir Gulam has decided to throw his lot in with those who oppose immigration even though he is himself a prime example of how it benefits the UK . It is both ignorant and hypocritical.

An eerie echo of the past

2008-11-25T22:51:00.012Z

Earlier on I set out how 80 years ago an Austrian economist predicted the ineffectiveness of current efforts to intervene to improve economic conditions.

I have since been directed to an interview with another Austrian economist (this one also a British citizen) that - aside from the poor quality and the stilted voices - could have been recorded yesterday.

In it, Nobel laureate Prof. Friedrich von Hayek explains that inflation is always the result of government action, is the great evil against which we need to battle, and that efforts to intervene to prevent recessions that follow from periods of government-led inflation are doomed to failure.
The part of the inteview from 14.00 minutes to 16.50 minutes is particuarly chilling!

The following is a summary of what he says (I have slightly augmented it with my own understanding of his take on economics, though where possible I have enclosed these additions in square brackets):

Germany out-performed the UK in the three decades after WWII because the German trades unionists remembered that inflation is the enemy of the working man;
If people do not recognise the danger of inflation they will continue to believe that it can be used as a short-term solution to economic problems, as a result of which inflation will continue to wreak havoc upon the economy;
Unemployment results from inflation, which encourages the misdirection of labour [because easy money is made available to enterprises that would not, under normal conditions, be viable, allowing them to offer higher wages than would be possible if the easy money had not been thrown into the system by Government], so it is wrong to suggest that in the long term one needs to tolerate unemployment to curb inflation;
Curbing inflation will cause short-term unemployment, but this need only last a year or so [before the market re-asserts itself and labour is employed once again];
As Jeffrey Tucker notes, the “hilariously naive and idiotic” line of questioning demonstrates how “people really believe that policy makers can manipulate the economy like a machine, trading off unemployment for inflation and back again, with no trouble”
Non-compulsory planning will have no effect and so can do no harm [or, indeed, any good];
“Stopping the printing presses” is a euphemism as the real cause of inflation is credit expansion rather than the actual printing of hard money;
“All inflation is ultimately the problem of activities which government determines and can control. And all inflations have been stopped in the past by the governments stopping creating money or preventing the central bank from creating more money” [thus putting the lie to the government’s suggestion that inflation is caused by outside factors such as rises in the cost of commodities];
A tax cut will not work to stimulate the economy because deficiency of aggregate demand is not the problem. Rather, the problem is that the boom and employment that has been created by the previous inflation can only be sustained by further inflation [which, if perpetuated, would lead to hyper-inflation and ultimately a crisis];
If government continues to inflate to sustain the boom it may have to try to ameliorate the effects by imposing price controls which will lead to the imposition of a planned economy [i.e. socialism];
Political freedom exists hand-in-hand with economic freedom and the former cannot exist without the latter;
The power of labour unions and corporations does not lead to inflation unless that power is used to encourage inflationary policies;
Wages/Prices/Incomes policy is utterly ineffective except as a means of managing in the very short term the period of deflation/restoration;Not all problems are solvable in the short-term and trying to do so may cause more harm than good;
Equities remain a good investment in the long term;
“Inflation is like over-eating and indigestion. Over-eating is very pleasant; so is inflation. Indigestion comes only afterwards and so people do not see the connection”;
Economists are intellectually attracted to the concept of a system that they can control and therefore are instinctively opposed to free markets and non-intervention;
Continued government-induced inflation and subsequent intervention by government will inevitably destroy capitalism [as Karl Marx predicted and hoped for].

Hat tip to Kit for drawing it to my attention, and to mises.org for hosting it.

Forced bank lending the latest instalment in Labour’s doomed spiral of intervention

2008-11-25T18:17:00.017Z

Alistair Darling appears set to commit an 80 year old mistake. In his misguided attempts to control the UK economy and force businesses to conform to New Labour’s agenda, he is again going to intervene between banks and their customers.

He has already intervened countless times over the past year, but this latest intervention is pitifully predictable. Indeed, as was explained 80 years ago, it was inevitable that his previous interventions would have unintended consequences that would be the opposite of what he intended, and that to counter those consequences he would be obliged to intervene again and again to ever greater degrees.

Published in 1929, just as another depression was about to rock the world economy, Ludwig von Mises’s Critique of Interventionism demonstrated that as soon as politicians began to intervene in the economy, they would have to continue to do so until ultimately the entire system came under their control. According to von Mises, interventionism was simply unsustainable: either one accepted the laws of economics or one was forced to implement socialism.

We can see how this works if we consider price controls – an example that has striking relevance to Mr. Darling’s current dilemma.

If government tries to fix the price of a commodity, it will not be able to sustain prices below those that the unhampered market would set. This is because with price controls:

"Sellers are forced to sell their goods at lower prices, so that proceeds fall below costs. Therefore, the sellers will abstain from selling and hold on to their goods in the hope that the government regulation will soon be lifted. But the potential buyers will be unable to buy the desired goods."

The result, therefore, will not be the increasing availability that the government sought but a reduced availability of the good resulting from suppliers having no wish to supply at such a low price. To raise supply to the level the government desires at the price the government has mandated, it must therefore intervene again to force suppliers to supply the good: “…it tends to supplement the price ceiling with an order to sell all goods at this price as long as the supply lasts."

However, as the good is now on sale for below its real value, far more customers will emerge than would do so if the good was priced naturally. And since the price is "below that which the unhampered market would set, the same quantity of goods faces a greater number of potential buyers who are willing to pay the lower official price. Supply and demand no longer coincide; demand exceeds supply, and the market mechanism, which tends to bring supply and demand together through changes in price, no longer functions."

There is still not enough of the good to go round, but now it is not because of suppliers reticence but excess demand caused by under-pricing. Government has prevented the price mechanism from operating to prioritise this demand. Therefore another means must be found to decide who gets what, which leads to the third wave of intervention: Rationing.

"Of course, government cannot be content with this selection of buyers. It wants everyone to have the goods at lower prices, and would like to avoid situations in which people cannot get any goods for their money. Therefore, it must go beyond the order to sell; it must resort to rationing. The quantity of merchandise coming to the market is no longer left to the discretion of sellers and buyers."

But why, if the price is below that at which suppliers can make a profit, would they produce the good at all? Only if the government intervenes to force the production of the good. Consequently, the fourth intervention takes place:

"When that is exhausted the empty inventories will not be replenished because production no longer covers its costs. If government wants to secure a supply for consumers it must pronounce an obligation to produce."

And how can this be achieved when costs are below prices? Only by driving down costs, which requires government to intervene to set the prices of the factors of production that go into producing the good. Ergo, "it must fix the prices of raw materials and semi-manufactured products, and eventually also wage rates, and force businessmen and workers to produce and labor [sic.] at these prices."

But what, you may ask, has this to do with Mr. Darling? If one considers money and borrowing to be commodities, the answer is everything.

Government has long been intervening to keep the cost of borrowing below the market rate. This is the role of central banks: they enable governments to control the supply of money by forcing lending rates down below the market rate, so stimulating artificial and unsustainable booms that keep the voters sweet until the next election. The Bank of England did this again last month. Under normal circumstances, a “credit crunch” should result in an increase in the cost of borrowing. This would result in more saving and less borrowing until a new equilibrium was reached. However, the government has intervened to keep the cost of borrowing low.

As von Mises predicted, however, this has had unintended consequences. The government may have wanted low interest rates, but the banks were still inclined to set interest rates based on risk: as default is more likely now than it was a couple of years ago, the cost of borrowing is raised to take an actuarial account of risk. Also, as the banks have limited capital, they are bound to lend to the most profitable borrowers: those who will pay higher rates. So inevitably the government is again inclined to intervene to force banks to lower rates.

The predictable result is that banks won’t lend. They’d rather buy government securities or look abroad for more valuable investments than lend to businesses and householders at rates that are no higher than inflation or make a tiny real return but involve huge risk (companies will go to the wall; mortgagees will default). So the third intervention comes, as Darling forces the banks to lend.

Not to everybody, mind. Already the rationing is appearing: the BBC suggests that the intervention will be for favoured groups, which at this stage consists of “Small businesses” (which means it might be time to sack that 50th employee and cut one’s borrowing costs!).

One can only begin to guess at what the unintended consequences of this latest intervention will be. However, the two things of which we can be sure are that further interventions will inevitably follow as long as Labour ministers believe that they can over-ride the laws of economics, and that these interventions will continue to have unintended and negative consequences for all of society.

Have our leaders been drinking?

2008-11-11T17:16:00.007Z

Ask yourself the following question: if you discovered that a sector of the economy had been colluding with one another to agree a minimum price for a good, rather than competing with one another, would you not be angry? Would you not accusing them of “price gouging” their customers? Would this not be a flagrant violation of competition law that ought to be investigated by the competition authorities?

Of course. It hardly takes a degree in economics or a sharp eye for injustice to see that.

Unless, apparently, the good is alcoholic. Then, apparently, the customer can go to hell, because what our beloved political masters want to intervene to raise the prices of alcohol.

And which political party is in the forefront of this paternalistic policy. I can barely bring myself to say it!

The Liberal Democrats have brought out an utterly illiberal policy that includes a proposal that we “Stop irresponsible drink promotions by introducing a minimum price for alcohol.”

Now price controls are a particularly pernicious tool with which to shape drinking policy. It is not, note, an increase in the cost of alcohol. Oh no! There will be no need for our beloved leaders to pay any extra for a bottle of Chateau Neuf de Pap. They can quaff all the Isle of Islay they like as they fashion ever-more-restrictive policies for the hoi polloi. Indeed, one has to wonder if they had consumed one too many bottles of Verve Clicquot before stumbling stupidly on this particular policy.

Because price controls will only affect those buying cheap alcohol. It is a policy deliberately targeted at the poor drinker; s/he who feels the need to avail him/herself of the three-bottles-of-white-for-ten-pounds offer at the local corner store, or those who cannot afford to drink anywhere except The Goose or a Westherspoon.

This policy means only one thing: to our political masters, it is poor people who are the problem. The wealthier classes never get drunk and cause criminal damage.

And it is not just some poor people. After all, if it were just some poor people that were causing the problem, the solution would be to target criminals and those who behave anti-socially. Price controls target everybody. The responsible father of two who wants to pop into the local for a swift pint on his way home to (Oh, lets rub this in!) cook a dinner for his hard-working wife and loving children will have to pay (Extra salt into wound!) more of his minimum wage income to unwind a little after his hard day.

But it’s good for him, right? After all, these poor people need nice, high-minded politicians to make moral judgements for them, to cajole them into behaving responsibly. It’s for their own good.

Frankly, it’s enough to drive one to drink!

How Labour caused the economic crisis

2008-10-20T20:56:00.012+01:00

Four weeks ago I demonstrated how the current financial crisis was a disaster of government's own making. However, most of that was focussed on the American government. In so doing I failed to point out how Gordon Brown (as both Chancellor of the Exchequer and Prime Minister) created the problem.

It is true that the US governmetn deserves much of the blame for forcing banks to lend to un-creditworthy (sub-prime) borrowers and (through the para-statal company Freddie Mac) inventing the practice of securitizing the debt.

But the main source of the problem has been the massive expansion in credit - and indeed money - over the past decade. And while the American government has been as guilty as any of inflationary policies over the past decade, it is Labour that has led UK investors up the garden path with dangerously loose monetary policy.

Having spent ten years allowing Gordon Brown to fan the flames of in an inflationary boom, we are now reaping the whirlwind.

But, I hear you cry, has inflation not been running at around 2%? Isn't that very low>

Well, yes, but only if you look at consumer/retail prices. Sadly for us, economic inflation isn't caused by inflation in the price of consumer goods, which have in fact been falling in real terms since China got its act in gear in the 1990s. Inflation is caused by loose money, which floods through banks, via loans, to be invested in (particularly) capital-industry and land. So the important measure of the inflation isn't CPI or RPI but the money supply.

And how much has the money-supply been inflating over the past decade? The Market Oracle provides this handy chart, which suggests that over the last 5 years the quantity of money swirling around in our economy has doubled.

And where has all that spare cash, utterly un-backed by a corresponding doubling of growth (see GDP figures for 2002 and 2007), gone?

It has been used to bid up the prices of property, shares and capital goods.

However, as demand for them is not actually changed by the new banknotes (electronically) manufactured by the Government, the inevitable "readjustment" is at last taking place as the cost of these goods begins to fall, reflecting their real, non-inflated, value and the cost of consumer goods begins to rise to accomodate the new money in the economy.

As I mentioned a three days ago, further inflation, interest rate cuts and borrowing cannot stop the recession. They can perhaps delay it, and certainly extend it, but in the long run recession is inevitable. We have Labour to thank.

Gordon Brown and the financial crisis: a 1 minute comparison

2008-10-17T17:09:00.003+01:00

Three ways to worsen a credit crunch:

1. Lower interest rates: this discourages saving because one gets little reward for delaying one’s gratification (in economic parlance, time-preferences are undervalued), while at the same time encouraging borrowing, thus further reducing the supply of credit relative to demand;
2. Allow inflation to escalate: this also discourages saving because the nominal reward for saving (the amount one’s money goes up) is eroded by the fall in the value of money (what your savings are actually worth), and for the same reason encourages borrowing: at present, the Bank of England base rate is lower than inflation which means that savings are worth less with time (in economic parlance, interest rates are negative);
3. Increase public borrowing: This takes money out of the credit markets: money that is being saved and would be invested in profitable businesses is now diverted into Government bonds and then invested in businesses that are not creditworthy (if they were, they would not need a Government bail-out).

Government policy:

1. Lower interest rates
2. Allow inflation to escalate
3. Increase public borrowing

Remember than the next time somebody tells you that Brown is having a good crisis.

A jolly morning's voting

2008-10-11T12:50:00.003+01:00

An unexpected treat landed on my door courtesy of Electoral Reform Services.

Yes, it's Party election time!!

No sign of the one we've all been waiting for, but in the meantime an excellent opporutnity to support old friends, laugh at people's artwork and make instant and probably utterly-unfair judgements about people.

My favourite was the chap who was standing for the peers list who wrote "60 years a liberal" at the top. How can one resist?!

Two names did jump out and me that deserve a vote:

Jock Coats for Federal Policy Committee: Jock is known to many of you through his blog. He has an excellent graps of policy and has an answer for almost any problem (the same one, admittedly ;o) and would be a real asset to FPC, fighting for sound liberal economic and social policy and fending off the errors of interventionism;
Tony Vickers for the peer's list: Tony is Chair of ALTER and a long serving Liberal Democrat councillor.

I should hasten to add at this point that I am not a member of ATER and my internal jury is still out (if an internal anything can be out) over LVT. But it has been a party committment for a century and yet the policy establishment have brushed it under the carpet in the Cowley Street boardroom every time it has come up.

There are also dozens of other people I know on the lists, but I can't sit here listing everybody and their attributes. That is what your artwork was for!

Anyway. Enough of all that. I've seen a photograph of a women in a barbour so I'm going to send her to Europe!

Dee Doocey is right for all the wrong reasons

2008-09-30T17:41:00.001+01:00

The body fascists are out in force again.

Dee Doocey has been pressuring the Mayoral administration to remove London Development Agency funding from London Fashion Week. That’s fine in itself: I can see no reason why London’s taxpayers should be subsidising the fashion industry, let alone why Bromley residents should be paying for fashion shows in the West End.

Sadly, Doocey seems to have no concern for taxpayers subsidising special interests. Rather, she is jumping on a social-conservative bandwagon that aims to dictate how models, fashion houses and the organisers of sartorial trade fairs should market their goods.

This is, in fine social-conservative tradition, all about protecting patronised groups from themselves by dictating to third parties whom the supposedly-weak willed might emulate. In this case, thin girls are seen as at risk of emulating thin women. Doocey notes that “1 in 40 women suffer from an eating disorder, [that] the numbers are on the increase [and that] the girls are getting younger”, all of which is undoubtedly a tragedy. That the solution is censorship does not automatically follow, however.
On a very fundamental level, censorship is always the wrong solution to a problem. Neither the models nor their employers are doing any direct harm to girls who choose to emulate them, any more than Richard E. Grant and Paul McGann can be blamed for causing harm to my liver just because I occasionally like to order “Two large gins and two pints of cider (ice in the cider)”.

As I noted the last time this issue came up, “Perhaps (radical suggestion, I know!) people are making their own decisions based on a multiplicity of information and imagery. Should we control all information, vetting it to ensure it promotes only a benign or (in our opinion) positive image?“

Of course not. If we tried to order our society in a manner that prevented anybody from unwittingly influencing others in a negative manner, we would face an insurmountable censorship burden. Should we allow dangerous sports on the television? What about fat people?

In passing, one cannot help wondering whether the fact that we are concerned simultaneously by obesity and anorexia suggests that our society’s problems with eating are to do with something other than the effects of London Fashion Week.

It is also worth noting (again!) that “Size 0 models” are actually Size 4 models, but it sounds so much more dramatic to disingenuously use the American numbering. Firstly, it implies that there are twelve full sizes between a “normal” girl and one of what Doocey calls these “skeletal models”; in fact, there is only four sizes between them (unless you know where one can buy odd-numbered sized clothes). Secondly, there is a subliminal sense that Size 0 must equate to nothing. This is not ever stated, and nobody would suggest this consciously, but subconsciously Size 0 has a particularly ghoulish resonance.

Opposition to the employment of thin models will do little to help girls with eating disorders. They are surrounded by examples of norms of beauty (and behaviour) that only a draconian censor could prohibit. Their problems are psychological and so require treatment rather than censorship. And it is not clear that any government intervention is going to prevent the problem.
But it is an example of the conservative tendency to use government as a vehicle to protect people from themselves and to use the coercive power of the state to shape society (an in this case, women) in their own (unflattering) image.

If Dee Doocey wanted to strike a blow for freedom, she would object to the LDA’s funding of London Fashion Week because it was a misuse of taxpayers’ money. By allowing this subsidy to pass as long as it promotes her view of how women should look, she is striking a blow against it.

A real economic roller-coaster

2008-09-30T00:55:00.004+01:00

Ever wondered what it would be like if the housing marked really was a roller-coaster ride?

Well, some clever wag has created a roller-coaster using Roller Coaster Tycoon 3 and using a graph of US house prices since 1890 as the shape of the track.

An amusing graphic to demonstrate the madness not only of the bubble that has just burst but the overall picture over the past 118 years.

Enjoy!

Real Estate Roller Coaster

Sub-prime, securitisation and how government caused the financial crisis

2008-09-29T23:16:00.011+01:00

The bogeymen-of-the-moment are clearly bankers. Photographs of bankers with their heads – or boxes of their possessions – in their hands are commonplace. The sympathy for the former Lehmans employee does not appear to match that felt for the unemployed docker or miner. Schadenfreude is de rigueur at the moment. And if the banker is the bogeyman, the free markets is the wicked system that is now being exposed for what it is (if only!).

But are our current problems really the fault of capitalists and bankers? There is an altogether different narrative that points the finger in an entirely different direction: the sub-prime and securitisation crises were created by government.

The sub-prime problem begins with the US government's 1977 Community Reinvestment Act (CRA), which allowed the Federal Reserve and other US financial regulators to pressure banks into making loans to less-than-creditworthy borrowers. Far from greed driving bankers to offer 100% loans to unreliable borrowers, this position was forced upon them by government.

Thomas DiLorenzo explains the problem:

When the CRA was created during the Carter administration, the administration also funded with tax dollars numerous ‘community groups’ that have helped the Fed, the Comptroller of the Currency, and other federal regulatory agencies to enforce the act. Under the CRA, if a bank wants to make virtually any change in its business operations — merging, opening up a new branch, getting into a new line of business — it must first prove to regulators that it has made "enough" loans to the government's preferred borrowers. The (partially) tax-funded ‘community groups’ like ACORN (Association of Community Organizations for Reform Now) can file petitions with regulators that stop the bank's activities in their tracks, perhaps defeating them altogether. The banks routinely buy off ACORN and other ‘community groups’ by giving them millions of dollars as well as promising to make even more dubious loans.

Not only is the sub-prime market the result of Federal legislation that forced banks to lend to un-creditworthy borrowers, but the practice of dicing up debts and selling them on in chunks that mixed prime with sub-prime loans was also the creation of a Government body.

In order to try to diversify the risk of these loans, the Federal Home Loan Mortgage Company (‘Freddie Mac’) pioneered the ‘securitization’ of bundles of these high-risk loans so that they could be sold on secondary markets. Such ‘securitization’ exploded during the 1990s as a result of government regulation. As Fed Chairman Ben Bernanke himself stated in a March 30, 2007 speech entitled The Community Reinvestment Act: Its Evolution and New Challenges,
Securitization of affordable housing loans expanded, as did the secondary market for these loans, in part reflecting a 1992 law that required the government-sponsored enterprises, Fannie Mae and Freddie Mac, to devote a large percentage of their activities to meeting affordable housing goals.”

The deregulation of banking in 1994 led to banks to elevate their CRA activities so as to avoid objections by these ‘community groups’ to their business activities. Meanwhile, in 1995 the US Treasury Department created the multibillion-dollar Community Development Financial Institutions to pour taxpayers’ dollars into subsidising sub-prime loans.

Indeed, from 1995 banks were pressurised to make loans “without the benefit of many traditional credit-worthiness criteria, such as the size of the mortgage payment relative to income, savings history, and even income verification! Instead, the Fed told banks that participation in a credit-counseling (sic.) program, many of which are federally funded, could be used as ‘proof’ of a low-income applicant's ability to make his mortgage payments. In other words, federal bank regulators required banks to make bad loans based on nonexistent credit standards.” One cannot help but think that participation in a credit counselling programme suggests that the borrower has had credit trouble in the past and may not be an ideal customer.

Though largely a US based problem analysis has three significant messages for our current situation.

Firstly, the eagerness with which journalists and politicians have blamed bankers is misguided. While there is no doubt that bankers can be and have been greedy, the sub-prime mortgage problem was forced on banks by the US government, while habit of ‘securitising’ debt began with a US government housing agency. This is a problem created by government, not greed.

Secondly, for the above reason, the eagerness with which we look to government to solve the problem is equally misguided. Our faith in more regulation to resolve the current mess is misplaced. To my knowledge HM Government did not force bankers to lend to less reliable borrowers, but the excess of credit in the marketplace as a result of Government’s toleration of inflation in the pursuit of low interest rates meant that banks had to look further down the pecking-order of borrowers to find people to whom to lend. Had money been tighter, there would have been a duel break on the problem as borrowers were more cautious due to facing higher repayments and banks were less eager to accept any borrower due to credit being limited. There might have been fewer 100% mortgages to those with poor credit histories or people who were “self-certificating” (a practice known colloquially as the “Liar’s mortgage”).

Finally, the troubles resulting form the US government’s intervention in housing markets and the deliberate policy of encouraging those on low incomes with poor credit histories to borrow against property casts a cold light upon the Labour government’s proposals to give first time buyers cheap loans, ease the payment of mortgage interest using income support and allow council’s to offer cheap mortgages. This last is particularly pernicious as it opens up the possibility that, in the future, councils will be in the invidious position of having to foreclose on defaulters and repossess their houses (which the defaulter would probably then stay in, now as a tenant of the council!).

Much of the current economic mess has been caused by governments, with the US government to blame for the specific trigger and our own to blame for the underlying mess. Our headlong rush to solve this government-made problem with more regulation risks turning a brief if sharp recession into a long depression. But right now we seem stuck with the mindset that “Something must be done”.

An insight into bloggers and their bitter little battles

2008-09-29T17:34:00.007+01:00

My sister is reading Immortality by Milan Kundera and Peter Kussi and came across this passage:

Don’t tell me that two men who deeply disagree with each other can still like each other; that’s a fairy tale. Perhaps they would like each other if they kept their opinions to themselves or if they only discussed them in a joking way and thus played down their significance…But once a quarrel breaks out, it’s too late. Not because they believe so firmly in the opinions they defend, but because they can’t stand not to be right. Look at those two. After all, their dispute won’t change anything, it will lead to no decision, it will not influence the course of events in the slightest, it is quite sterile and unnecessary, confined to the cafeteria and its stale air, soon gone when the cleaning lady opens the windows. And yet, observe the rapt attention of the small audience round the table! Everyone is quiet, listening intently, they even forget to sip their coffee. The two rivals now care only about one thing: which of them will be recognized by the opinion of this small audience as the possessor of the truth, for to be proved wrong means for each of them the same thing as losing his honour. Or losing a piece of his own self. The opinion they advocate is itself not all that important to them. But because once they have made this opinion an attribute of their self, attacking it is like stabbing a part of their body.

It strikes me that it casts a piercing light onto the bitterness with which many bloggers and those who leave comments on websites fight their corners. Very quickly so-called debates descend into slanging matches as one or both parties become more interested in “winning” or slapping the other down harder then they (think they) have been slapped.

In the process the valuable exchange of ideas and the thought that we all might benefit from a healthy debate is lost.

The Revolutionary Conservative Party and other oxymorons

2008-09-27T13:34:00.005+01:00

There is and have always been concern within the Liberal Democrats that we are not as liberal as we ought to be; that our party too often looks to the State to solve problems and is willing to curb individual liberty to achieve social goals.

It has long been a criticism of New Labour that they have abondoned their roots in the labour movement and spent too long playing court to big business rather than worrying about the working man.

Now David Cameron has decided to steal Barak Obama's clothes and take 'Plan for Change' as his party conference theme.

I have long maintained that the names of the political parties have a lot more to do with their roots than with any actual reflegion of their current policies or the philosphies of their members. But when faced with illiberal Liberals, Labour capitalists and revolutionary Conservatives a start to wonder whether the parties' names are supposed to be ironic!

Horray for the end of capitalism as we know it

2008-09-25T17:46:00.005+01:00

Is this the end of capitalism as we know it?

Eamonn Butler, of all people, hopes that it is. Once he explained his reasoning, however, I could see his point.

"Capitalism as we know it is a creature of the regulatory authorities, who've messed it up good and proper" he argues. But frankly, that's just the start of it. Our supposedly capitalist system often looks more like Corporate Statism than any free market that our liberal forebears in the C18th and C19th would have recognised or welcomed. Big businesses larded with subsidies; investors insured by the taxpayer against bad investment; bankers bailed out to the tune of hundreds of billions of pounds.

The sooner that that sham capitalism is swept away and replaced by free exchange of goods, services, capital and labour without interference, impedence or assistance from politicians the better we will all be.

I would like to see Government's role in the economy limited to three things: ensuring the rule of law; protecting property rights (which as Tristan reminds us, includes one's own person); and providing sound money. In fact, make that two things.

Why the poor need tax-cuts for rich people, too

2008-09-22T23:58:00.014+01:00

There has been a lot of (welcome) talk recently about the Liberal Democrats’ pledge to cut taxes for low- and middle-income earners. This has been broadly welcomed in the party, though many have only accepted it as long as it is accompanied by a promise that the overall tax-take will remain the same, and that richer people should shoulder more of the tax burden.
This kind of “redistributionist” approach is always very popular, as most people are in the poorer rather than the richer category. It is easy to take from the minority to give to the majority, and there is no minority less sympathetic than the rich.

A counter argument might be that the only fair thing to do (and “fairness is something that the Liberal Democrats claim to take very seriously) would be to cut taxes for everybody if we are cutting them for some. But that kind of fairness - that everybody be treated equally no matter how wealthy they are - generally only cuts one way.

However, economists such as George Reisman make a far more startling claim: that it is tax cuts for rich business people and for corporations that are in the long-term interests of low and middle income wage earners; more so, in fact, than tax cuts aimed directly at the poor themselves.

Reisman’s initial point is a simple one, but one that is too often forgotten: that human society enables one to benefit from other people’s success. “The view of redistributionists…” he explains, “is that the only wealth from which an individual can benefit is his own…” The redistributionists are mistaken, however: “in order to benefit from privately owned means of production, one does not have to be an owner of the means of production… one benefits from other people’s means of production – [not only] every time one buys the products of those means of production [but] also as a seller of labor (sic.).” Capitalists invest in improving the efficiency of production so that they can enhance their profits, but in the process they make the goods we buy cheaper and make our labour more productive, so increasing real wages.

The reason that redistribution looks so attractive is because one tends to think of redistribution in terms of individual sums being transferred from a rich person to a poor person; and there can be little doubt that £1,000 is more valuable to a poor person than a rich person. But it does not follow that £100 billion is worth more in the hands of poor people overall than in the hands of rich people overall.

The problem is that “most people tend to think of themselves as members of the class of wage earners rather than separate individual wages earners, and to think of their interests as indistinguishable from the interests of other wage earners.”

In fact, while it is more in my interests that I have £1,000 than that Richard Branson does, it is no more valuable to me that a poor man in Liverpool has that £1,000 than Mr. Branson. And it is far more likely to serve my interests that a few rich people have £100 billion than huge numbers of poor people, even if £1,000 of that £100 billion ends up in my hands. The reason for this is that poor people spend a greater proportion of their money on consumption, and are more likely to consume than to invest additional sums. As Nick Clegg said in a recent interview with The Times, "give tax cuts to the better off [and] they will just save them. You have to give [tax cuts] to people on lower incomes who will transfer them into consumption on food and fuel.”

This is ceertainly true and is entirely predictable: those on the breadline would be happy for the opportunity to buy new shoes, while those who already own a yacht are free to invest extra money in their business. This is especially true for businesses themselves: business taxes leach away the money that would either be invested in improving productivity or would be paid out in the profits that attract further investment.

There is a point here that Reisman does not fully draw out, but which we can recognise today after a decade of Labour economic mismanagement. Money in the hands of the poor would create greater wealth in the short term, as a result of a consumer boom. But these consumer booms are unsustainable: buying more clothes and electronic goods does not make their production significantly more efficient. Investment makes them more productive, but this requires an investment boom. In fact, during the past decade the consumer boom has been accompanied by a dangerously low and shrinking savings rate: the West has saved almost nothing. Consequently, productivity has not risen as it should have done, which is one reason why real wages for less skilled workers (which are set by their productivity and thus by the investment in them and in the tools that they use) has not risen. Simply taking the money that would be invested in businesses and giving it to others to consume is “eating the seed corn.”

By comparison, “A tax reduction on businessmen and capitalists will promote capital accumulation, far, far more than a tax reduction on the mass of the individual wage earner's fellow wage earners. The average businessman and capitalist will save and invest the taxes he no longer has to pay, in far greater proportion than would the average wage earner, [and the businessman] will be induced to introduce more improvements in products and methods of production, which are also a major cause of capital accumulation…” In addition, “cutting the taxes of businessmen and capitalists [will] significantly … raise the demand for labor and … reduce or eliminate unemployment”. The result of increased innovation will be to enhance “the ability of upstart new firms to grow rapidly and thus to challenge old, established firms.”

Overall, “The effect of this combination is … a continually rising productivity of labor… and thus prices of consumers' goods that are progressively lower relative to the wages of labor, which means progressively rising real wage rates, so that in not too many years the average wage earner is far ahead of where he would have been on the strength of a cut in his own taxes.”

So ironically, it seems that cutting taxes for the labourers makes capitalists rich in the short term, whereas cutting taxes for the capitalists makes labourers rich in the long term.

The reason that Reisman’s argument is so challenging is that it seems to suggest that tax cuts for the poor are not in their own best interests. This isn’t mere sophistry. If productivity does not rise, real wages cannot rise. All “labour” can do is fight with “capital” and “land” for the share of wealth. This seems to be the be-all-and-end-all solution for redistributionists, who argue that the poor can only benefit at the expense of the rich. This would be true in a static economic system. But they forget that economies are (or at least should be) dynamic. The route to prosperity is through economic growth: “The average standard of living would double in a single generation if economic progress at a rate of just 3 percent a year could be achieved. Such economic progress would also mean a halving of the average wage earner's tax burden in the same period of time — if government spending per capita in real terms were held fixed.”

Consequently, the long-term prosperity of the average worker is best served by capitalists who invest for their own benefit. In seeking to further increase their own profits, capitalists invest extra money in improving productivity, which they do by buying new and better plant machinery, "upskilling" their staff and employing new and better business systems. Improvements to productivity in turn push up real wages and so benefit labourers far more than tax cuts on their own wages would. If Government can avoid the urge to “share the proceeds of growth” then wage earners will see their taxes fall anyway – not in absolute terms, but as a proportion of their rising incomes.

If there is a problem in Reisman's plan, it is that in advocating this policy of easing taxes on business and high incomes first, he overlooks the political economy of the 21st Century. No matter how correct he may be about the long term economic effects, it would be impossible to implement such tax cuts in the face of the vast majority of voters who will understandably ask why their taxes are not being cut while those of £billion businesses and rich oligarchs are. What is needed, therefore, is a sort of liberal realism that recognises that lowly paid workers, who form the bulk of the electorate, will want to see some of the short-term gain that their richer peers will enjoy as they wait for the longer term growth-benefits to kick in. One might suggest that a little honey today will keep them sweet until tomorrow’s jam arrives.

Thus if the Liberal Democrats really want to improve living standards for those on low incomes, we need to look not just to redistribution but to cutting the overall level of taxation in the economy. And we must do this by reducing taxes on businesses and among those wealthy enough to invest as well as those who will feel the benefits most in the short term. This is not about larding the rich for their own sake; it is about recognising a fundamental lesson of liberalism – that we all benefit from one another’s success – while also understanding that it is investment, not consumption, that makes future prosperity possible.

Reisman concludes that

Of course, in a further display of their ignorance and blindness, members of the Left will undoubtedly characterize the line of argument I've presented in this article as the "trickle-down theory." There is nothing trickle-down about it. There is only the fact that capital accumulation and economic progress depend on saving and innovation and that these in turn depend on the freedom to make high profits and accumulate great wealth. The only alternative to improvement for all, through economic progress achieved in this way, is the futile attempt of some men to gain at the expense of others by means of looting and plundering. This, the loot-and-plunder theory, is the alternative advocated by the redistributionist critics…. It is time to supplant it with ... sound economic theory….

When Donald Rumsfeld Makes Sense

2008-09-08T08:51:00.001+01:00

There is something disturbing about Donald Rumsfeld.

Despite all the execrable decisions that he has taken in his life and the disasters he has caused, he is by no means an idiot. At times he makes a lot of sense.

I have always thought it rather odd that people mocked his “Unknown Unknowns” comment, which actually makes perfect sense if you bother to read it.

Here is another comment he made on the issue of global poverty:

I was involved in the so-called war on poverty here in the United States and I've traveled the globe and seen just terrible poverty. I had a friend once and he was asked to chair a commission, an international committee, and the title of it was What Causes Poverty. He declined. He said “I will do it but on one condition. The condition is that we change the title and I'll chair a committee on What Causes Prosperity.” The reason he said that was, the title What Causes Poverty leaves the impression that the natural state of the world is for people to be prosperous and that for whatever reason there are prosperous people running around making people poor when you say what causes poverty. He looked at the world the other way. He said the natural state of people is to be relatively poor and that there are certain ways and things that can be done that can cause prosperity. They can create an environment that's hospitable to people gaining education and people gaining investments and people finding ways to contribute in a constructive way.
There are big portions of our globe that are so far behind the rest of the world that it is a dangerous thing. It is an unfortunate thing for those people. It's a heartbreaking thing.
The task for the developed world is to see that we do not just salve our consciences by finding ways like Lady Bountiful, we can give some country this or some country that which then is gone and disappears. But to the contrary, that we find ways to
encourage countries to take the kinds of steps that create an environment that's
hospitable to enterprise and to education so that the nation itself can do those things that will begin to ameliorate the kinds of terrible poverty that we see around the globe.

Earlier this week I noted that Colonel Gaddafi was saying the right things. Now Donald Rumsfeld is making sense.

How long before Hugo Chavez and Polly Toynbee start sounding rational.

Maybe it’s been too long since I had a holiday!

Who is the latest convert to the small state and school choice?

2008-09-02T18:24:00.004+01:00

Yesterday, I asked you which mysterious world leader or politician it was who it was who had decided to return billions of dollars to the people to take it out of the hands of corrupt Government officials and allow parents to control their own children's education.

The rather surprising answer is Muammar al-Gaddafi, dictatorial ruler of Libya since 1969.

Who would have thought it!

Quote of the Day?

2008-09-01T19:02:00.000+01:00

Today’s it’s-easy-if-you-cheat competition for which there is no prize is….

Guess which politician or world leader said the following recently:

"The money that we put in the education budget, I say let the [people] take it…

"Put it in your pockets and teach your kids as you wish. You take responsibility.

"As long as money is administered by a government body, there would be theft and corruption".

Sounds like common sense to me.

What one innocent sentence tells us about Government

2008-09-01T18:11:00.011+01:00

Today I was obliged to read a document published by the Cabinet Office. The first line read

The Commission on the Future of Volunteering was set up by the England Volunteering Development Council after the 2005 Year of the Volunteer.

It seemed that so much of what is wrong with Government was encapsulated in that one sentence.

The proliferation of Quangos; the spurious Year of Action; the Government’s belief that society – even civil society in the private realm – can be made better by Government intervention.

Not to mention the endless production of utterly pointless and vacuous reports. The money wasted. The manpower wasted. The unbelievable hubris.

There is just no understanding in Government circles that endless talking shops do not achieve anything useful. Or that civil society emerges from below, as individuals come together spontaneously to work together.

The Swedish Model I: Why the Stockholm underground is so great

2008-08-29T17:37:00.003+01:00

During the two years I lived in Sweden I lost count of the number of times ex-pat friends extolled the virtue of Swedish public transport and compared it favourably to its British counterpart.

The Stockholm underground, as every resident and visitor knows, is clean, cool, on time, and runs until 3am on Fridays and Saturdays. What is more, one can get a mobile phone signal deep in the underground stations (not surprisingly, one might think).

My friends were right of course. The Stockholm underground is far superior to London’s and it is about to get even better. The reason for this, however, is probably quite the opposite of what they would have guessed. As Fraser Nelson explains:

Stockholm’s privately-run underground is about to go 24 hours, the latest
innovation from Connex (now renamed Veolia). Privatising the underground is seen
as too right wing for Britain , but not Sweden which is perhaps the most
socialistic country in the world... If London Underground ran all night, I
imagine that night time attacks on women would go down dramatically. Ken
Livingstone jacked up black cab fares in the evening so more drivers now work,
but while there are now more taxis on the street few can afford them. Every
night in London , you can see women ushered into the cars of strangers shouting
‘minicab’. If Boris could get London ’s tube running till 3am, never mind 24
hours, he’d score a great victory for street safety.

Indeed. Perhaps he’d best start by privatising the Tube.

A fantastic metaphor for the economy

2008-08-22T18:17:00.002+01:00

Llewellyn H. Rockwell Jr. may be focussing on the US Federal Reserve, but he could just as easily be talking about the UK when he writes

The current economic crisis “stems from… a Fed-driven banking system that turns
credit on and off like a monkey playing with a fire hydrant…”

What does the National Curriculum have to do with a Mao Tunic?

2008-08-22T18:06:00.006+01:00

Jerry Kirkpatrick explains that

"The concept of [a] core curriculum is a product of education czars who think they know what is best for everyone. The government today does not run the clothing industry, but if it did, the "core curriculum" in clothing would probably be the Mao tunic. Instead, our free market in clothing performs extremely well in getting our bodies covered and it does so in a bountiful assortment of styles, colors, and prices."

If only we could have "a bountiful assortment of styles, colors, and prices" in education.

Make it Happen the musical?

2008-08-21T00:11:00.002+01:00

Andy Mayer asked tonight whether Make it Happen had been made into a song, yet.

Apparently the answer is yes!

How can we lose?

Watch out for the Locavores!

2008-08-20T17:43:00.009+01:00

There's a lot of rubbish talked about food and the environment.

One current fad is to source all one's food locally so as to reduce one's "carbon footprint". The suggestion is that by reducing all those "food miles" one reduces the negative impact of shopping on the environment.

Is it true? And if so by how much?

The findings of two researchers suggest that the answer to the latter is "not much". According to Christopher L Weber and Scott H Matthews in their paper Food-Miles and the Relative Climate Impacts of Food Choices in the United States,

Despite significant recent public concern and media attention to the
environmental impacts of food, few studies in the United States have
systematically compared the life-cycle greenhouse gas (GHG) emissions associated
with food production against long-distance distribution, aka "food-miles." We
find that although food is transported long distances in general (1640 km
delivery and 6760 km life-cycle supply chain on average) the GHG emissions
associated with food are dominated by the production phase, contributing 83% of
the average U.S. household's 8.1 t CO2e/yr footprint for food consumption.
Transportation as a whole represents only 11% of life-cycle GHG emissions, and
final delivery from producer to retail contributes only 4%. Different food
groups exhibit a large range in GHG-intensity; on average, red meat is around
150% more GHG-intensive than chicken or fish. Thus, we suggest that dietary
shift can be a more effective means of lowering an average household's
food-related climate footprint than "buying local." Shifting less than one day
per week's worth of calories from red meat and dairy products to chicken, fish,
eggs, or a vegetable-based diet achieves more GHG reduction than buying all
locally sourced food.

So instead of buying locally, we could just eat like Catholics and make a far larger contribution to reducing carbon emissions than by buying locally.

In fact, Weber and Matthews' findings are only half the story. The real measure should be the total environmental cost of local production verses most-efficient production. The point of trade, after all, is that is allows products to be produced where the production is most efficient. As Art Carden explains,

One of the "key elements" of economics is that trade creates wealth. Wealth is
whatever people value, but trade allows us to produce either more material goods
with the same resources or the same material goods with fewer resources. While
it does not profit a man to gain the world but lose his soul, trade increases
our ability to produce goods and services and therefore increases our range of
opportunities.

By producing food where it is most efficient to do so (i.e. where more foodstuff is produced per acre, per man-hour, per tonne of water, per combine harvester etc.), we actually reduce agriculture's impact upon the planet. Taking just carbon emissions for now, if 83% of food emissions result from the production of food and only 11% from transport from the farm via the factory to the shop, it is clear that improving the efficiency of production is a more effective means of reducing carbon emissions than buying food that is produced locally and less efficiently.

But why must local production be less efficient? There is no reason that it should (someone must live locally to the most efficient production, after all) but because greater efficiency equates to lower costs, the easiest way to measure the efficiency of production is to look at the price label. If it is worth importing goods from foreign countries it must be because they produce the goods more efficiently.

I realise that locavores are motivated by more than just the environment, of course. Mrs. Polemic has a whole Good Life thing going on! Carden himself notes that home-produced or locally-produced products may win on quality (though often the reason that commercially-produced food tastes so bland is the fault of Government regulation).

However, the environmental motivation for eating locally produced food is one of the main reasons many locavores advocate it, yet it may in fact be increasing carbon emissions.

So the next time you deliberately buy locally sourced produce, you can console yourself with the thought that though a Third World farmer has not enjoyed your patronage today, it doesn't matter, as his farm has probably been swallowed by the desert anyway!

Does it help the poor if you clear your own table?

2008-08-20T17:43:00.001+01:00

A great example of how the minimum wage destroys jobs, courtesy of Art Carden at Division of Labour.

I was at a coffee shop yesterday when I noticed a sign saying "please bus
your own tables" (I paraphrase). I saw a similar sign at an ice cream place last
week; I interpret both as examples of the deadweight loss from the state's $8.00
per hour minimum wage. Someone somewhere might be willing to bus tables at
coffee shops for $7.00 per hour, but they are prevented from doing so by state
law.

Granted, cleaning my own table at a coffee shop is at best a trivial
inconvenience, and it's something I usually try to help with anyway. However,
when you add up the number of possible mutually-beneficial trades that are ruled
out by government fiat, then you're dealing with potentially substantial
leakages from the prosperity pool.

More bone-headed nonsense from Johan Hari

2008-08-18T17:48:00.003+01:00

I don’t usually read The Independent, and Johann Hari is one of the reasons why (though he is more a sympton than the cause). However, Free Think Blog has drawn my attention to today’s typically bone-headed article.

Mr. Hari thinks that democracy is not working properly in the UK, and makes three suggestions for how to improve and reform the system. Each is paternailstic, expensive and illiberal, and at least one is self-serving. Lets look at them in turn.

Proposal 1: Deliberation Day, would “Declare every general election a national holiday, and offer every citizen £150 to take part… in a day of debate”. Assuming an adult population of c.40 million, this could cost up to £6 billion per election not including the cost of administration. In addition, the extra day’s holiday would reduce GDP, so dealing a double-whammy in that the extra taxes would be taken from a smaller pot. Of course, not everybody would attend, so the cost would not be as high. But it is likely that those attending would be the politically active middle classes, while those not attending would be the politically inactive underclass. So one can see which way the tax pounds are flowing there!

Mr. Hari may think this worthwhile because “The national political debate would then no longer consist of10-second soundbites… We could … to a more rational discussion of the evidence. To Independent readers, this might seem unnecessary, but two-thirds of British people tell pollsters they have not had a single conversation about politics in the past two years.” Pomposity about the readers of his employer’s paper aside, it is at least as likely that the groups would be dominated by the loudest voices and the pushiest opinions, and that many would not discuss politics at all but just claim to have done so for the cheque. Nobody could check up on you, after all, unless millions of moderators were employed to report on the content of the break-out sessions (approximately 2.6 million) to be precise.

Proposal 2: Banning opinion polls during elections, is an assault upon freedom of speech. Mr. Hari may believe opinion polls undermine the political process but he cannot prove it, and in the meantime he would be limiting people's freedom to ask other people how they will vote and then publicise the results. I would prefer a Freedom Bill to his Democracy Bill: one that makes attacks on freedom of speech illegal.

Proposal 3: "a law requiring universities to add a small amount to their students' tuition fees, to pay for a daily newspaper subscription of the student's choice", is an idea so absurd that it is hard to know where to begin. Increased tuition fees would undoubtedly discourage some pupils from studying, though this may be no bad thing as it would be those who value their education least and so probably those that are going to get the least out of it. It would be a colossal waste of money, of course, as many of these compulsory papers would not get read: there are, one might note, plenty of text books and course papers that don’t get read, and these at least contribute to one’s final grade. It is also incredibly patronising and paternalistic: young adults being forced to buy newspapers by Mr. Hari and his peers, who believe that they are not well enough informed. Why not just lock them in a room with a copy of Das Kapital and have done with?

However, the ill-informed nature of today’s youth is not Mr. Hari’s real concern. This he reveals in two statements. Firstly, he notes that “being a newspaper journalist can feel like being a coal-miner in 1985.” His suggestion, therefore, in parallel to his analogues of 23 years ago, is a massive state-enforced subsidy for journalists.

But mere rent-seeking is not the limit of Mr. Hari’s concern. He also wishes to use state power to shape public discourse. If students were forced to buy newspapers, he suggests, "papers would be pressured to be more progressive, since this new student market tilts left." So he is deliberately trying to use the law and taxation (which this effectively is) to influence the media and so shape, rather than merely deepen, political debate in this country. A Ministry of Truth would not be far off.

The sad truth is that Hari is right that our democracy does not work as the idealists would hope. Some people infuriatingly refuse to take any interest; some cannot find a political party that represents their views; some are too busy with other things.

What Hari fails to realise is that the problem here is that democracy fails because it tries to achieve too much. The alienation of people from politics is in part the result of an inevitable convergence between the major political parties. But it is more to do with the fact that people are no longer enamoured of collectivist solutions to problems. They would prefer to earn money and solve problems in a market where they can find solutions tailored to their particular needs, rather than vote once every four years for a one-size-fits-all answer to their problems. Hari recognises this implicitly when he bases his first proposal on bribing people to vote, but he misses the main lesson.

I have discussed the problems with democracy before, and also discussed some proposed solutions. But the solution is to focus on a Government that does less, better, and leave as much control over their lives as possible to people. Then we don’t need Deliberation Day; we just need to make our minds up.

My Best Bits for self-indulgent narcissism

2008-08-14T00:06:00.001+01:00

The bloggosphere’s favourite Dr. Who fan, Alex Wilcox, has come up with an interesting idea, which is that each of us “read back through the last year on your own blog and pick out your favourite pieces you’ve written” so that these can then be considered by the judges of the Best Blog Posting category of the Lib Dem Blog Awards.

Of course, I doubt that any of my posts have a chance of winning. Even if there was a prize for the longest posting, Alex would have it sown up (this and every year). But it does allow one to take a trip down intellectual-memory lane, and indulge in a degree of narcissism indulgent by even blogging standards.

It also surprises one (well, me anyway) how long ago the last Autumn Conference was. To think that ten months ago there was a leadership contest in full flood.

A good place to start, perhaps? It certainly highlights one problem, which is that rather than a sole posting I have a series of themes. I wrote six articles on the leadership contest, of which my favourite highlighted the depressing lack of a real debate in the contest.

I also wrote two contiguous articles on how choice in education is a vital tool in providing a decent education for young people, part of a long-running theme that dates from before September 2007.

And then there were three one-off articles about significant current issues, namely our party’s illiberal and knee-jerk opposition to GM crops, a better and more liberal approach to road transport that may have especial relevance with our new transport policy paper up for discussion, and a critique of politicians self-serving approach to state funding of political parties.

I expect nothing less than ten prizes, each of which will be paid in cash to the Swiss bank account of my choice.

Or failing that, a free glass of wine while I watch Alix pick up a prize.

PICS serves up egg for our collective faces

2008-08-13T19:19:00.005+01:00

PICS, the Liberal Democrat central policy resource, has offered up a standard press release on the Policy Exchange report Cities Unlimited: Making Urban Regeneration Work, which has been exercising politicians and bloggers throughout the day.

The basic tennet of the argument is that Policy Exchange is "David Cameron's favourite Think Tank", set up in 2001 by Michael Gove, and that we can therefore use it to bash the Tories for abandoning the North and giving up on poor struggling towns.

It is a fundamental mistake, and one that has prompted me to (unusually) reply to PICS suggesting that they may want to re-think it.

There are two significant problems with this line of attack:

David Cameron has already come out and condemned the report in very strong language, saying that the report was"complete rubbish" and that its ideas were "insane". To attack him (by association) now would be ludicrous and would open us up to accusations of opportunism, disingenuity and possible outright lying.
The report is co-authored by Tim Leunig, a Liberal Democrat member and economics professor at the London School of Economics. So if parties are to be condemned by association we are as guilty as the Tories.

Irrespective of the merits of the report (and I've made my comments, and recieved abuse accordingly, elsewhere) it is a fundamentally bad idea to try to use it as a weapon to bash the Tories.

What is more, it is depressing that we would rather do so than discuss the merits of the report in its own terms. Political debate is cheapened when we look upon innovative ideas (even flawed ones) as weapons with which to bash our opponents rather than stimulating suggestions which can trigger informed debate.

This is not a Liberal Democrat problem; it's a disease that has infected the entire body politic. Nonetheless, this latest PICS offering ought to be hastily retracted.

Lying in the national interest

2008-08-12T23:05:00.006+01:00

The BBC has expressed shock and sadness at more lying from the Chinese Olympic organisers.

This time, they have admitted that the charming little girl who awed viewers of the opening ceremony with her singing was actually miming to the voice of another, less photogenic child.

Asked why, the "show's musical director said Lin [Miaoke] was used because it was in the best interests of the country".

Well, that explains it, then!

At least, it explains the socialist/conservative mindset that pervades China and most of the rest of the world.

It is surprising how often the "National Interest" corresponds with what is easiest for a politician at any given time. One would never guess, with sober analysis, that a nation's interests were best served by caving in to foreign blackmail to stop a fraud investigation, driving the most productive sector of an economy to ruin, or demonstrably faking the greatest show on earth. If the leaders say it's good for us, it's good for us, right?

One might be forgiven for wondering if there really is a "National Interest" at all, rather than the interest of politicians who are afraid that they will be found to share culpability with an Arab defence minister, need to buy off the electorate in the short term, or have discovered that their big plan doesn't work.

I'm not one for banning things, but I wonder if the world wouldn't be a better place if we banned the use of the terms "national interest" and "public interest" and required our politicians to explain just what it is that is so wonderful about the self-serving policies that they keep enforcing on us.

Inflation hits where it hurts

2008-08-06T23:35:00.002+01:00

Having just been to Earl’s Court to worship at the temple of hedonistic binge drinking, I am horrified to discover that inflation is really beginning to hit where it hurts.

According to CAMRA (one of the few special interest groups with which I have some sympathy), by the time the Olympics arrive a pint of beer will cost £5. By beer they mean the usually-cheaper foamy stuff such as bitter and ale, of course; the story will be worse for larger.

Indeed, “By the end of this year the cost of a pint will have risen by an inflation-busting 25 pence”, and in London they have found beer for sale at £3.70 a pint.

(Amateurs! I was in the Bunch of Grapes in Borough a couple of weeks ago and was charged £3.95!).

Of course the price has already been way above that in clubs, bars and swanky outlets, but in the traditional (and not so traditional) British pup one had hoped that reality would not bite. But with the cost of fuel, agricultural produce and potentially labour on the rise, it won’t be long before we reach the next horrendous milestone.

Do we live in an Orwellian future?

2008-08-06T09:02:00.001+01:00

What would George Orwell and Evelyn Waugh have made of our modern society? A fascinating article in yesterday’s Times gives us some insight.

In the form of a review of a new book by David Lebedoff entitled The Same Man, Cristina Odone seeksk to answer that question.

I am always very cautious when people lay claim to Orwell. Generally seen as a figure of the “Left”, he was clearly strongly influenced by writers such as Popper and Hayek and it was not for nothing that the political ideology that reigned in Oceania was still called “English Socialism”. Yet he was certainly no respector of class or tradition and it would be absurd to suggest he was of the “Right”. It would be nice to suggest that that makes him a liberal, but that would just be claiming him for ourselves.

Perhaps the best thinkers really are the hardest to pigeon hole. What is most striking about Odone’s article is her statement of the distopia that both Orwell and Waugh most feared:

Orwell and Waugh feared the appearance of a new elite made up of the so-called
educated classes. They predicted that a New Boy Network based on test-score
merit rather than lineage would sprout, which would wield power and influence
with a still greater disregard for the “common people” than their predecessors
had shown.

Then, strikingly, she goes on to observe that

This lot would conduct themselves not in accordance to a traditional moral code.
Rather they would be regulated by the opinion of their own group, that inner
circle of, in Orwell's words, “scientists, technicians, teachers, journalists,
broadcasters, bureaucrats, professional politicians”. Members of this elite
would dread nothing more than failure to conform to one another's views and
behaviour.

Does that sound familiar? You only need to tell people you shop at Tesco, leave your mobile phone charger plugged in and can’t see the problem with GM food to get an idea of how this new moral conformity works. What matters is what one’s peers think matters; if you want to be a part of the new elite, you must think like the new elite.

The problem is not the individual beliefs, but the fact that they are founded not on a coherent logic but seem to emerge: like God before the, they are begotten not made.

The reason this is dangerous is two fold. Firstly, as Odone notes, this results in (or is it from?) a moral relativism that in the days or Orwell and Waugh saw intellectuals fighting over whether Stalin or Hitler were the more misunderstood, and which today sees the bookshelves of the university educated middle classes groaning under the morally-vacuous weight of Noam Chomsky.

Equally dangerously, by creating that new class with its unique moral code and intellectual arrogance, we recreate the divisions that so blighted the previous class-system. And just like that previous class, the new class beguiles outsiders with the lie that all can join in if only they come up to scratch. Sadly, like the grammar school oiks who could never actually change their ancestry, the modern outsiders cannot join in unless they can change who they really are. It is a closed shop for the right thinking.

The evil face of genetic research

2008-08-05T22:30:00.005+01:00

Witness the evil face of cloning.

See the terrible effect it can have on human beings!

This evil must be destroyed.

Particularly the little ones!

Snipers take aim at Lib Dem head

2008-08-05T18:31:00.005+01:00

The Lib Dem snipers were out again, yesterday, and as usual its our own generals that are receiving a withering “friendly” crossfire.

As usual the man on the roof with a mail-order hunting rifle is Lib Dem Blogger of last year James Graham, with a grumpy one-line of support from Jonathan Calder.

According to James’s Comment Is Free column, he has “been struck by how many people [he has] spoken to over the past few weeks – candidates, councillors and activists alike – who appear to be either demoralised or disenchanted with Clegg's leadership.”

One source of this disaffection appears to be the recent survey of 12 candidates conducted by Lib Dem Voice. As a statistical aside, a “survey of 12 people” is not a robust sample of any group; not one containing hundreds (PPCs) of people and certainly not one containing thousands (activists) or tens of thousands (members) of people. Indeed, if it is that first post (of a series of four) about PPC's views on which James was basing his opinion, it should be borne in mind that the subject of that particular entry was The three worst things about being a Lib Dem PPC. One might refer James to the The three best things about being a Lib Dem PPC by way of contrast.

Strangely, James himself points out that:

The polls are looking OK…. Clegg's attempt at repositioning the party by pledging tax cuts for middle and low-income earners seems to be reaping rewards... Even his "summer message" seems to have gone down quite well.

Yet this does not stop him blaming Clegg for the Lib Dems alleged misery and drift. Rather than elaborate on the above counter-evidence, he fires a couple of shots at the Lisbon Treaty policy (that was a long time ago and ranks no. 18 in the electorate’s list of things they care about) and the proposed restructuring of the party machine (which is long overdue, though the proposals strike me as rather anaemic) and so paints a picture of failing leadership. More objective evidence would suggest otherwise.

I realise that all is not well in the camp at present, and it is certainly true that there is depression and lethergy in many localities. I also agree with James about the poor state of communication between the troops and the generals, though I would ask him "Was it not always thus" (at least in the days since we all fitted in a taxi)?

As I've pointed out to Jonathan Calder, the depression among Lib Dems has more to do with the sudden and seemingly inexorable rise of the New Conservatives than with Nick's leadership.

Our problem was not that Nick took over at all, but that he took over too late. Had we done all this 18 months earlier (without the unfortunate Ming interlude) we would have reaped enormous benefits from advocating polices that chimed with the feelings of a British public sick of having their money confiscated in ever greater quantities to pay for faceless government to regulate upon ever more minute areas of their lives.

Neither were we ever likely to make that break through that Nick speaks of by continuing with this "Anti-establishment party" nonsense. Either we are a serious party of Government or we are not; if we are not, what is the point of voting for us? You can give the other main parties a much more meaningful kick by voting for UKIP, Galloway or some other extreme form of what they used to stand for.

If there is a real sense of de-motivation and depression in the party - and there is no doubt that in many quarters there is - then the cause is closer to home. Frankly, we activists need to stop sitting around moaning over our organic, Fairtrade, decaf coffees and get on with selling our party to the electorate.

Nothing creates enthusiasm like activity; and nothing breeds success like success.

Michael Gove attacks lads’ mags and steals the Pupil Premium

2008-08-04T22:35:00.004+01:00

Earlier today I attended a speech by Michael Gove at the Institute of Public Policy Research (IPPR). Loosely entitled Liberty, Equality, Family? Why Conservative social policy delivers progressive ends, it was in fact a statement of the Conservative view of how policy toward the family, children and education can create a more harmonious society with more social mobility and better outcomes for the most disadvantaged.

Coverage in the press has mainly focussed on his attack on the objectification of women in “Lads Mags”, notably Nuts and Zoo. He was condemnatory, but it was interesting that he condemned without threatening action: the most he proposed was to “ask those who make profits out of revelling in, or encouraging, selfish irresponsibility among young men what they think they're doing.” (IPC and EMap must be quaking in their boots!) This is a shame, because this was not the most interesting or important part of the speech, but it seems that near-naked ladies on the covers of magazines, even when they are merely the subject of Tory criticism, are more interesting to journalists than school pupils graduating without any valuable qualifications.

Gove speech was another step in the attempt by the Conservatives to paint themselves as a modern, progressive party (indeed, as the modern, progressive party). He began with a (rather tired) discussion of “Ubuntu”, a Bantu word which, broadly translated, means "I am because you are". Bill Clinton famously used it a lot (notably in his speech to the Labour Party conference) and it was consequently a bit of a buzz-word in 2006, but I surprised Gove dragged it up again in 2008. However, it provided an opportunity for him to discuss Social Capital and the role of the voluntary sector and community politics. “One of the most profound, but under-appreciated, changes that David Cameron has brought to Conservative politics is a determination to put the strengthening of relationships at the heart of policy,” he explained.

Under Labour there is really only one relationship which matters. The relationship between the individual and the state.
The Labour conception of society is a thin, and impoverished, one in which there appear to be only two primary centres of decision-making, the central state organises and the individual is expected to respond appropriately.
Individuals are assessed by the State as economic units in need of upskilling, taxing, monitoring or redeploying as appropriate - according to priorities set, and policed, centrally.

Gove went on the criticise the Government’s depletion of social capital; its closure of post offices and GP practices because of a focus upon a “narrow cost efficiency over enriching personal intimacy”; the excessive regulation that has stifled “autonomous institutions which help bind communities together”. This is all startling stuff from a Tory, and shows how far they are prepared to go to distance themselves from the Thatcher era. It was summed up in one sentence of Gove’s that must have required the most enormous amount of gall: “for Gordon Brown, there really is no such thing as society - only the individual and the State.” So now it is Brown who is the heir to the hated Thatcher (hence, perhaps, that rumoured state funeral!) and the Tories who are committed to the “cause of social justice and the drive to make opportunity more equal”.

And then, while the audience were reeling from that act of repositioning, Gove reached out and deftly plucked a key plank of Liberal Democrat policy:

There is one specific intervention, however, the central State will make which is different from now, and which goes to the heart of one aspect of David Cameron's thinking on relationships which has been under-appreciated.
We're explicitly committed to the creation of a premium to be added to the per pupil funding children from disadvantaged backgrounds receive. We want to ensure educational resources are targeted more effectively on those in need. And we want to create a dynamic by which schools are incentivised to take children from more challenging backgrounds and new providers are explicitly incentivised to locate in areas of greater disadvantage.

I’m not sure how new this is for the Conservative Party, but it is certainly very familiar to Liberal Democrats. Nick Clegg made this a key platform of his leadership campaign in Autumn 2007, reiterated it in his 2008 New Year message and in June wrote an article for the Guardian all about it.

Asked (by the author) to explain how his pupil premium “differed from that which Nick Clegg and the Liberal Democrats have been advocating for over a year”, Mr. Gove denied that it was Nick Clegg and David Laws who invented it, saying that it originated with David Willitts or Julian Le Grand. I'm not the first blogger to notice this, and David Laws and David Willitts have had this debate before, on the floor of the House. However, the fact remains that Willitts did not introduce it as policy and that Gove is bringing the Conservatives rather late to the Pupil Premium party.

What is frustrating is that it is highly likely that the Liberal Democrats will get none of what economists call “first mover advantage”. In other words, the Lib Dems will not get the credit for this policy: rather, it will be touted as a new Tory innovation with little reference to the fact that Clegg and Laws have been vocal advocates for this policy for over a year.

Gove went on to argue in favour of increased parental choice, a policy that this blog has long advocated:

We will make schools accountable to parents by allowing parents to choose the school they want for their child. We'll give every parent the right to take the money currently allocated to their child's education and then deploy it in accordance with their priorities, not the Government's.
We'll make it easier for new providers to enter the state system, reforming planning and other laws to increase choice and diversity. Parents will be empowered to
choose the school with the pedagogy, the disciplinary approach, the ethos
and the philosophy they believe in….

Again, Clegg and Laws have argued this case before. So far (and in my view, erroneously) the Lib Dems have been reticent is in including private schools within that choice and allowing parents to top up the public funding. Gove was equally vague: it remains unclear whether one can use one's (lets say it!) "voucher" to fund whatever education one feels is in one’s child’s interests, even where those providing the education might profit therefrom.

What this speech clearly reinforced was Michael Gove’s status as one of the most impressive members of the Conservative front bench. I first had a chance to hear him speak in January 2006 when he debated Vince Cable on the question of whether the Liberal Democrats or the Conservatives were the true heirs to Gladstone. Neither dealt a knock-out blow but I was impressed even then by how eloquently he spoke and how reasoned his arguments were. He has since become a regular guest on Question Time.

It is unlikely that Gove will suffer from having blatantly plagiarised Lib Dem policy. Rather, he will have demonstrated once again that in the coming electoral battle, the squeeze is going to be on, and the challenge for the Liberal Democrats is to make sure that they have a strong, distinctive voice and innovative policies. The pupil premium was to be one of those. Michael Gove may very well have shot that fox.

The hopefully-welcome return of Liberal Polemic

2008-08-04T17:46:00.003+01:00

To (belatedly) celebrate the new version of Lib Dem Blogs, and also because I've actually got something to write about, I've decided to take Liberal Polemic out of it's Summer hibernation and post something. Consequently, I've re-opened it to access. It's just a shame that there isn't a new version of Blogger too!

For those of you (singular) who were missing the wit and wisdom (or, more accurately, the long economic monologues) therein, I must caution you that I cannot promise the daily updating that was previously my routine.

But I'll try to add something whenever I can.

In the meantime, enjoy. Or failing that, pretend.

New parties to split the silly vote

2008-03-18T15:30:00.006Z

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] )

Why freedom matters

2008-03-14T08:13:00.004Z

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!

Lib Dem’s turn to have Darling steal their policies

2008-03-10T17:04:00.004Z

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.

Lessons from Rwanda VI: Account of the genocide

2008-02-25T00:42:00.003Z

A while back I wrote several accounts based on Shake hands with the Devil: The failure of humanity in Rwanda, an account of the Rwandan genocide by Lt. Gen. Romeo Dallaire. For some reason I never got round to posting this final extract.

In the previous five posts, I had only mentioned the horror in passing, partly because the true enormity of the horror was hard to describe. Instead I offer this extract as a microcosm.

The following is the account that Colonel Isoa Tikoca, the Fijian Chief Military Observer, gave of the situation in Gisenyi, a border town on lake Kivu opposite the Congolese town of Goma:

“…by noon on the 7th [the first day of the genocide] they were going from house
to house… they killed some people on the pot but carried others away to a mass
grave near the airport where they cut their arms and legs and finally massacred
them, as observed the by UNMOs [UN Military Observers]. The [Rwandan] Army and Gendarmerie did nothing to stop these killer-groups… they closed the border with Goma, Zaire. The UNMOs were threatened and they regrouped at the Meridien hotel where foreigners were massing for protection. Stories of massacres all over the
region were reported by these eyewitnesses. A priest assembled in the church with about 200 children for protection, after prayers the killers opened the doors and massacred all of them… another chapel was burned with hundreds of people inside. Children between the ages of 10 to 12 years old killed children. Mothers with babies on their backs killed mothers with babies on their backs. They threw babies into the air and mashed them on the ground. At Rsumbura, 3 Belgian teachers, 2 males and 1 female, and 3 local priests were killed. On the night of the 8th, an expatriate convoy was allowed passage to Goma. On the 10th, Madame Carr, famous because of the movie Gorillas in the Mist left her house for the first time. She has been in Rwanda for more than 45 years. The 85-year-old woman said that what she saw was terrible…
“Were able to conduct some patrols but the streets too littered with roadblocks and dead people. Ordered to evacuate on 13th, spent two nights between Rwandan and Zaire border posts. Finally made way to Mkumba and moved to Kigali. Communications very bad.” (Shake hands with the Devil: The failure of humanity in Rwanda, Lt. Gen. Romeo Dallaire, pp313-4)

The slaughter covered the whole country and lasted three months. The above describes one town over a single week.

Urban Planning in the absence of a Land Value Tax

2008-02-09T09:23:00.000Z

In the rarefied atmosphere of the Institute of Economic Affairs (IEA), “planning” is generally considered to be a rude word. The patron saint of the IEA wrote his most famous book attacking economic planning and the IEA has generally adopted a libertarian position on most things since then.

Yet few would argue that towns could exist without planning. So Wednesday’s panel debate on Urban Planning was an unusual affair in which the speakers generally accepted that planning was necessary, but sought to root it in market principles and so enable it to work more successfully.

The problem cannot be denied. The UK is building tens of thousands few houses than we need each year; Council’s see little gain and significant costs (both financial and political) in allowing increased urbanisation; the quality of the homes we are building are poor by European standards.

As Dr. Oliver Marc Hartwich noted, in every other walk of life our increasing prosperity has led to our being able to afford more and better, but in housing we have seen regress: houses are getting smaller even as we get richer. Real house price inflation has averaged 4.1 per cent since 1971; if only wages had done the same! Yet planning alone was not the problem: Germany is so regulated that it drove Dr. Hartwich to move to England (had he heard of Gordon Brown?!), yet German cities manage to plan successfully. The reasons are simple (and go beyond urban planning): fiscal federalism and tax competition between authorities led them to compete for citizens, increasing their tax bases so as to reduce individual tax rates. Germans cry out for more housing so that more shoulders will bear the tax burden.

Dr. Hartwich’s comments about shrinking homes echoed two of the four false beliefs about Britain that Professor Alan Evans highlighted:
1) Britain is not overdeveloped – only 10 per cent of the UK is urbanised (less than, say, The Netherlands);
2) “Brownfield” land in the UK is not former industrial land but any land that has previously served an urban purpose, meaning that in many cases regulation to build on “brownfield” land actually means building on gardens, allotments and sports fields;
3) High density housing does not – as commonly believed – reduce fuel consumption; and
4) People do not want to live in flats – despite the planners’ desire to cram us all into flats, around 60 per cent of the population wants to live in a dethatched house with a garden.
In this respect, Urban Planners are like economic planners: they seek to tell us what we should want, rather than give us what we do want.

Dr. Richard Barkham alone focussed on something other than housing. He noted that while industrial and agricultural rents have fallen over the past 30 years (as supply has outstripped demand) residential and retail rents have risen because of supply constraints. This had forced retailers to be more productive – which in itself is no bad thing – but that had driven small, marginal retailers out of business and fuelled the rise of the out-of-town shopping centre and the Clone Towns. Those who would like to “Save our town centres” and preserve independent retailers may wish to take note: the only solution other than harmful subsidies may be to free up retail development.

The problem, noted Professor Stephen Nickell, was the Derek Hatton effect: for a quarter of a century, central government has not trusted local authorities to raise or spend their own money. This was unlikely to change, an the result was that we would continue with a Stalinist approach of top-down solutions to planning.

Which is a shame, for Dr. Timothy Leunig had a perfectly good solution to the problem. This is in fact already Liberal Democrat policy, appearing in two separate policy papers. However, the policy paper that addressed it specifically (rather than instituting it as part of another policy) was referred back to the Federal Policy Committee by the September conference – a sign, noted Dr. Leunig, of the confusion and illogic that characterises the policy making process of the party to which both he and I belong. Dr. Leunig’s plan is to capture planning gain (the unearned wealth that accrues to land purely as a result of its being re-classified by local authorities from, say, agricultural to domestic). Local authorities would be given a monopsony on buying land for development, and would then sell that land on to developers. By using sealed auctions by both sellers and buyers, the local authorities could buy land cheaply (for, say, five times its current value) and then sell it expensively (for a large part of its new value after the council had granted planning permission). The result would be more land available for development, local authorities with an incentive to build (because they would make a LOT of money) and Nimbies turned into Imbies because of the benefits local people would gain from seeing tens of millions pouring into their local authorities’ coffers (such as a six year moratorium on Council Tax or an enormous urban renewal programme). One could even literally bribe the electorate to accept development: build a million homes around Cambridge and one could probably give each existing household hundreds of thousands if not of pounds compensation.

As Dr. Mark Pennington noted, this is a far more effective way of measuring people’s priorities than simply asking them. Ask anybody if they’d like to see fields or flats outside their window and they will say fields; “preserving the greenbelt” is an easy sell when there is no opportunity cost. But offer them thousands if not tens of thousands of pounds in return for agreeing to develop green-field sites that are not in direct line of sight and they will probably jump at the chance – and if they don’t, if they really want to protect the green spaces so much that they will forego wealth to do so, then they would remain free to do so. Dr. Pennington also argued in favour of private property rights, noting that private landlords (such as at Bluewater, the Grosvenor Estate and other planned communities) could attach conditions to the sale of property to regulate planning without the need of government.

There was one gaping hole in all this, however (or two, if you count the empty chair from which the Rt. Hon John Gummer MP was supposed to speak): not one of the speakers mentioned Land Value Taxation. Unable to believe my empty ears, I raised this with the panel. It received almost no response except for the repetition of two common criticisms, both expressed in one sentence: “It doesn’t work in practice” said Dr. Barkham (who has clearly not been to Denmark, Australia, New Zealand, the Baltic States, Jamaica or Hong Kong); “It is not politically possible” said Prof. Evans (which is probably what they said about denationalisation or controlling inflation 30 years ago).

Not satisfied with these answers I took this up again in the reception afterwards. I am not a committed Land Value Taxer: I consider it to be an interesting and intriguing idea that appears to have merit, and I have yet to hear a truly killer argument against it (despite Dr. Hartwich’s best efforts), but I remain open minded. However, within the halls of the IEA the idea was universally reviled (proving, if ever there was doubt, that the IEA really does not have a corporate view on anything). Whether or not Henry George was right about other issues of Land Value Taxation, in one respect he was clearly correct: the ranks of the economic establishment are clearly lined up against it.

Lessons for an Archbishop in the Rule of Law

2008-02-08T17:05:00.000Z

Serendipity is a wonderful thing. I have recently taken up The Road to Serfdom again, and happened in the last couple of days to be reading the chapter entitled “Planning and the Rule of Law” when the Archbishop of Canterbury, Dr. Rowan Williams, made his comments about the adoption of Sharia in the UK being “unavoidable”

Sharia is an emotive topic, tapping in to British fears of public beheadings and the ill-treatment of women. Consequently, much of the commentary around the subject has been rabid, suggesting that Dr. Williams is opening the gates to the barbarians. In fact, he is making a subtler but no less flawed point: that the law should take account of the personal beliefs of individuals.

This flies in the face of Western legal tradition, in which laws are supposed to be blind to the circumstances of the citizen.

Laws do not exist merely to stop people doing things that are harmful to others. Laws act as signposts, guiding us through life. At each fork in the road, the signposts tell us what we may expect and what the consequences are of our actions. But these guidelines only work if they apply equally to all, because otherwise life is entirely unpredictable.

It is the law of this land that drivers drive their cars on the left (Savoy Court aside). There is no moral purpose to this; it is entirely practical. It makes it possible for traffic to move safely. But it only works because it applies equally to all. If I am driving and I see a car approaching in the distance, I do not need to worry about what side the other driver will attempt to pass; I can plough along at the speed limit, confident that s/he will do the same and will fly past my right wing-mirror with a few inches to spare.

Similarly, if I do business with somebody, I know exactly what will happen to them if they seek to defraud me. This helps facilitate business. However, if I had to worry about what jurisdiction applied to my partner, it would make the practice of doing business more difficult. One need only look at the complexities of trading (particularly in services) internationally to see the difficulties that can result from trading in two legal systems. But at least a company is France is predictably bound by French law, even if it differs from UK law. The same would not be the case if different legal codes applied to individuals in Britain, or if the law was applied differently based on individual circumstances.

Yet this was exactly what obtained in previous times. One of the characteristic features of medieval society was differing jurisdictions: the clergy were subject to cannon law, even in civil matters; townsfolk were subject to royal and municipal law; peasants to manorial and feudal law. As (despite legal strictures) a cleric might not actually dress as a cleric, one could find that a person with whom one had entered into a contract was able to resort to an entirely different laws and courts from those one would have predicted. Not only did this make society very unpredictable (and thus less safe) for all concerned, it was also the cause of constant strife. Bluntly speaking, wars were fought over the primacy of a single font of the law.

As for the suggestion that judges should take into account the views of individuals (or, for that matter, their circumstances or how “deserving” they might be) when applying the law, this undermines the very principle of the Rule of Law, for it makes the application of laws arbitrary.

In mitigation, this does not entirely exclude some of the things that Dr. Williams was suggesting. There is no reason why Sharia courts could not dispense divorces if both parties were willing to subject themselves to the courts, in the same manner that two parties to a contract dispute might accept binding arbitration rather than go through the long and costly process of litigation. There should be nothing in the law that prevents free individuals entering into contracts bound by different rules, just as I am bound by the rules of the various groups and societies to which I belong (such as those of the Party and of my employer). Sharia or other courts or tribunals could retain the right to dispense punishment (such as expulsion, exclusion or even – if the subject were willing to accept it – more strict, physical or material penalties). But the individual should always have recourse to the law, to seek protection from the binding ties of conformity. And similarly, victims should have the right to demand that the same law applies to their persecutors as applies to all people.

Equality before the law is fundamental to our society. The threat to our society from Dr. Williams’ proposal would be hard to exaggerate, for the Rule of Law is probably more fundamental to freedom than any other institution, including democracy. As both Voltaire can Kant (quoted) observed, “Man is free if he needs to obey no person but solely the laws.”

Why we don’t need women-only or BME-only shortlists

2008-02-08T01:28:00.000Z

The statement that “Parliament should reflect the society that it seeks to govern” is a commonplace one, but that does not make it correct. As with all jobs, parliament should be filled with those best suited to legislate.

This is not to say that parliament should be made up of lawyers (in fact, it would probably benefit from fewer lawyers, given the propensity of “learned members”) or other types of expert; we do not want a technocracy. But is should be made up of intelligent, talented individuals with an understanding both of what makes good law and what their constituents want.

Recent comments by Philip Davies MP that having BME-only shortlists or women-only shortlist would be the equivalent of having criminal-only shortlists are confused. As Linda Jack points out “YOU DIDN'T CHOOSE THE COLOUR OF YOUR SKIN, OR THE IMPACT IT HAD ON YOUR LIFE CHANCES...........IF YOU ARE A CRIMINAL, YOU MAY HAVE HAD A MODICUM OF CHOICE IN BECOMING ONE”. This is a liberal distinction that is often lost on Conservatives.

However, in criticising Davies, Linda appears to make a different but no less significant error: that factors that are not the result of choice should be discounted. The role of legislator is filled in the here-and-now, not in the past. If one person is less suited to job than another person, they should not be given the job, whether their inferior skill results from personal choices or factors beyond their control. After all, intellect is as much a function of biology as are race and gender, yet one would not suggest that parliament should reflect the full intellectual range of society, nor suggest shortlists confined to those with IQs less than 100.

(Insert jokes here).

The point about race and gender is not that parliament should reflect society as a whole – heaven forbid! It is that there is no link between race or gender and one’s ability as a candidate or parliamentarian. Thus any discrimination against BME or female candidates (as opposed to discrimination against stupid or antisocial candidates) is unwarranted.

If, however, a particular BME candidate is less suited to the job than a white alternative because of disadvantages inherent in their race (for example, the fact that black families tend to be poorer and therefore black boys tend to perform less well at school) they should not be given an unfair advantage in a particular selection so as to redress the balance. This can only result in a less talented group of MPs. The solution is to break the link between (in the example cited above) economic status and race, and academic performance and race, so that in future this problem does not arise.

Furthermore, even if women and those from ethnic minorities are as likely to make good candidates and MPs but are still not being chosen by parties, this does not automatically justify dedicated shortlists. Society is a self-regulating mechanism, after all, and the system will police itself. Parties that fail to promote BME or female candidates because of prejudice will have a smaller pool of good candidates to choose from, which will make it more difficult for them to win votes. Furthermore, if they discriminate against people with any regularity, they will be seen to be prejudiced, which will further hurt them at the polls.

The real reason that there is a lack of BME candidates for parliament is that there is a lack of BME members of political parties; there are some, just as there are some candidates and even elected officials, but the ranks of all three parties are not reflective of our society as a whole. The answer is not some form of positive discrimination, however, but more open and imaginative efforts to attract members. As a Lib Dem Council Group leader recently remarked to me, too many of our social events (for example) centre around alcohol, which may discourage (for example) Muslim members from joining. Ultimately, if we attract intelligent and talented people into our party, we will get intelligent and talented candidates – no matter what their race or gender.

Duncan Borrowman, MP

2008-01-29T18:35:00.001Z

The BBC has just had an interview with "Duncan Borrowman, MP" to discuss the Derek Conway scandal.

Now I know that things are bad for the fiddling Conservative, but I didn't realise he'd already lost a by-election!

Bromley Tory councillor publicly spanked

2008-01-24T18:35:00.000Z

Well, it’s not often I return home to be asked “Do you think I’m sexy?” while being confronted by one of Bromley’s Conservative Councillors.
I should have seen it coming, of course. All the signs were there. The furtive emails, phone calls to people I knew, whispering and pointing. But at last the truth (and Councillor Gordon Jenkins’ secret) are out, splashed all over the front page of the local paper.

Jenkins is, or rather was, a Facebook flirt. The Tory from Bickley’s Facebook page – now sadly not available, having been removed and replaced by a very dull alternative – was a victim of that most virulent form of cyber disease (the online equivalent of Avian Flu), Application Addiction.

You know the sort of thing: there are zombies, pirates and vampires; top friends, hot friends, who-knows-what friends; there are geography tests, IQ tests and all manner of patience tests; and then there’s the sexy stuff. Jenkins’s own vice was risqué elements: Kinky Poke, Orgasmic!, Panty Raid and Massage Me applications abounded; we were asked to rate his body, consider whether he was flighty or frigid and even consider (Oh! I feel queasy just saying it) what sex toy he would be if he were a sex toy. Jokes abound.

That being said, finding his face plastered all over the cover of the Bromley Times this evening seems a bit cruel. Being a liberal myself, I really don’t care who wants to spank Cllr. Jenkins – though his ward colleague, the devoutly Christian and small-‘c’ conservative Portfolio-holder for Public Protection and Security may not be as open-minded. I don’t care if he has been rated as a hunk by the blue-rinsed members (dare I say “members”?) of the Bromley Conservative Association, or if somebody he met at conference wants to tweak some part of his body (electronically, of course, which now I say it doesn’t sound particularly pleasant either!). The truth is, he’s done nothing wrong, morally. Rather, he has succumbed to the temptation to get into a new internet fad and to get carried away.

Frankly, if there is any real criticism due to Gordon Jenkins, it is that he has been silly. My own Facebook page is far more prosaic. A couple of photographs taken while drinking and a lot of silly video clips from Pauline are about the limit of how foolish it gets. It’s not that I’m more prudish than Cllr. Jenkins (well, maybe a bit!) but that I’ve not got the time for Knight’s Names and Rate-a-mate. There simply aren’t that many hours in the day. But if Gordon has time to kill – his casework not withstanding – then who are we to judge.

There are plenty of reasons for voting out Tory councillors in Bromley. Above-inflation Council Tax rises; doubling of fees for adults in need of social services care in their homes; a widespread belief that they ignore the areas of the borough that present real challenges, such as Penge, the Cray Valley and my own ward of Crystal Palace. So many of the Tory councillors are either related to or married to another councillor it’s beginning to look like a family business! Fear of crime is rife, money is wasted on poorly-managed projects and their hypocrisy over the Green Belt is about to be tested.

However, having a bit of a risqué Facebook page is not one of them. If Gordon Jenkins has ever stood on a platform of traditional family values; if he has ever condemned others for their behaviour; if he has ever sought to use his office to impose his moral code or to point an accusatory finger, then he should not only be ashamed but should step down. If, on the other hand, he has always been open-minded in himself and in his conduct as a councillor, then the most he deserves is a few days of feeling like a bit of a prat. In fact, he probably doesn’t even deserve that.

Four swords of Communism

2008-01-20T17:42:00.000Z

Is this the saddest communist fan-site in history?

What socialism and fascism have in common, and why its always more popular to sling mud at the enemy

2008-01-19T16:27:00.002Z

John Dixon has written about one particular example of the crass habit of hyperbole that pervades political commentary: the equating of socialism with liberalism and the use of terms such as “liberal mafia” and “liberal fascism”, particularly in America (where they confuse “liberal” with socialist).

One reason, as John rightly notes, is that extremism sells, though I would take issue with his statement that for “some reason extremism sells well in America”, as though the rest of the world were so much more measured and rounded. Extremism sells everywhere. Most of those reading or watching political polemics are not auto-didacts but consumers, mixing politics and entertainment. This is not inherently a bad thing, but does explain why Morgan Spurlock is more popular than serious works of dietary science. Similarly, it is easier to call the Democrats "liberal fascists" than to explain why both individuals and society benefit from greater individual freedom.

It's a shame, but in an era where people like to take bite-size chunks and move on, it's inevitable.
Nonetheless, there is a genuine criticism of the politics that would-be President Clinton (the subject of the “liberal fascist” claim that so irritated John) and her misnamed "liberal" associates espouse, which he accurately sums up when he says "...it merely means that the state treats you in a patronizing way... [T]hat's socialism." Indeed it is. Socialism (at least, State-Socialism) is based on the premise that Government is better placed to make decisions than individuals: so, for example, the Government knows better than I do how to educate my children, or what pension arrangements I need. This is patently false.

Similary, if John’s tongue was not firmly in his cheek when he wrote "I order you to watch" the interview in which the claim was made, it, too, would be an example of the socialist mindset: we will make you do what (we think) is good for you – as the Government is attempting with its new "lifestyle politics".

Ultimately, the link between socialism and fascism is that both are willing to use coercion to force individuals to comply with a set of rules aimed at achieving the philosophical aims (be they egalitarian or nationalist) of the ruling party. Nazism was also styled National Socialism, note. By comparison, liberalism (which has little in common with the philosophies and policies espoused by Democrats) tries to create a system that enables every individual to pursue their own goals, only circumscribing individual action where it would impede the freedom of others.

The main reason why socialism has not had the bad press that fascism got (being on the winning side of WWII notwithstanding) is that it has generally been implemented in a more dilute (Social Democratic) format, rather than full-on. This is the “Third Way” of which John says he is “a dedicated enemy”, and while it is clearly not as bad as it’s extremist (aka. Communist) variant, it remains fundamentally flawed because it is based on the principle that individuals are not as good at making decisions for themselves as are the elite, and that coercion should be used to bring them to heel.

Is this Tristan Mills dark secret?

2008-01-18T19:31:00.000Z

Perhaps this explains how Liberty Alone is funded?

If so, it should make the Autumn conference more amusing!

Privatising the roads? - why roads are not a public good

2008-01-18T17:27:00.002Z

At the special Manifesto Conference on Saturday, I muttered to a colleague that rather than continue with the congestion charge, we might be better off simply privatising the roads. While this was meant to be deliberately controversial, his response was quite surprising. “They are a public good” he replied, to which I responded “No they’re not.” It being a whispered conversation in the margins of a meeting, it could only continue along the lines of “Yes they are”/”No they’re not” until there was a real danger that the audience were going start joining in or we were going to be joined on stage by a pantomime dame.

Not being one to let things drop, however, I find myself needing to explain why roads are not a public good, both because it highlights errors about transport policy and because it highlights misunderstandings about other public goods.

Before we look at what a public good is, we need first to dispel one myth and so clear up what a public good is not. Public goods are not merely goods from which we all benefit. After all, as Adam Smith made clear, we all benefit from the activities of a baker (he provides us with bread thus obviating the need for us to learn to bake, build an oven etc.), but baking is not a public good. In the same vein, just because the economic activity that roads facilitate benefits us all does not make them public goods. Neither does the fact that they are free at the point of use make them a public good, for this would be to put the cart before the horse; just because things are provided in the manner of a public good does not mean that this is the right or best means of doing so.

The Economist defines a Public good as one which is available to all or to none: they are non-rival, non-excludable and not-rejectable. Dr. Paul M. Johnson adds that they “cannot practically be withheld from one individual consumer without withholding them from all … and … the marginal cost of an additional person consuming them, once they have been produced, is zero”.

Tellingly, none of these applies to roads. Indeed, the first highlights the key problem facing road-users today: roads are extremely rivalrous. There is a very limited amount of space, and so use by any one individual is at the expense of others (expressed through traffic congestion and so loss of both time and temper). This is of course the logic behind the congestion charge.

Roads are also excludable, though in practice this option is not often exercised. Users of the M6 will be well aware that it is possible to exclude drivers from sections of the road dependent upon whether they pay a fee. The template for road privatisation is the service provided by Dulwich College: in 1789 John Morgan built a road from the top of the hill to fields he rented from Dulwich College, charging a toll on people who passed through his land, and on their animals.

Roads are also rejectable, in that one does not have to drive. One may walk or take trains; I know of many environmentally-minded people who have chosen to forgo the car, as well as urban residents that cannot face the horrors of road travel. Yet they are still taxed to pay for a commodity that they do not use.

Dr. Johnson’s points are actually covered by the above: tolls do enable one to withhold the service from some but not others, while congestion means that the marginal cost of an additional road-user is not zero; it is merely defrayed across other road-users by increasing their journey times and frustration, as well as on the general citizenry through pollution and eventually demands for extra roads. And so the cycle continues.

Nonetheless, the arguments that Adam Smith and others used to justify the funding of public goods through taxation are often applied to roads. This is most easily described as the “free rider problem”: to wit, everybody benefits from the building of roads yet without taxation individuals cannot be forced to pay. This is patently not true: not every taxpayer benefits from the building of a road from Henley to Oxford, and through the use of tolls free-riders can be excluded.

In fact, the arguments for funding even some classic public goods are flawed. Adam Smith himself used the example of the lighthouse, arguing that because all shipping would benefit from being warned of the reefs but no private lighthouse keeper could exclude those who did not pay from receiving the warning, nor force them to pay a toll, those who built lighthouses would bear all the costs individually while the benefits would be spread broadly. Yet this does not mean that no private interest will build a lighthouse. One or two shipping magnates may decide that their own losses from shipwrecks are so great that they would personally benefit to such a degree from the building of a lighthouse that they are willing to bear all the costs even though others might benefit. This logic was applied by the Roman and British empires which, in suppressing piracy, gained so much from facilitating trade that they did not mind the fact that others benefited from safer seas without contributing. Similarly, rich burghers who wish to live in beautiful cities may choose to build great public works at their own expense. Thus, depending on one’s viewpoint, there is either a fine line between enlightened self-interest and philanthropy, or Smith’s “Invisible Hand” was a better guide to individual action than even he realised.

This might apply equally to roads, for two reasons. Firstly, because the benefits of road-use are not equal, those who benefit most may wish to build roads from which others may benefit. An example from Hong Kong is instructive: when business leaders approached Sir John Cowperthwaite, Financial Secretary, to argue that the government should build a bridge linking Hong Kong island to Kowloon Bay on the grounds that it would boost business in the colony by billions of pounds, he responded that if it was so valuable to them then they should build it themselves. After a long and hopeless battle they eventually did, to their own and everybody else’s benefit. Similarly, one might expect freight hauliers and other big businesses to pay for improved roads so as to reduce the costs of transporting goods.

The real value from infrastructure, however, lies in the boost they give land values. A (less happy) story from London is equally instructive: when Canary Wharf was being built, the developers offered to spend £300 million to build a brand new railway line linking Waterloo and London Bridge to the Isle of Dogs and then gift it to the nation, because they knew that by making it easier for commuters to reach their offices, the rental values of those offices (which they were building) would be raised by billions of pounds. Instead, a combination of rent-seeking by Members of Parliament (who wanted stations in their constituencies) and bureaucratic protectionism (as London Transport sought to protect its monopoly on the building and managing of tubes in the capital) led the Conservative government to look this gift horse in the mouth and instead build the Jubilee Line extension entirely at the expense of taxpayers, many of whom have never used it but have paid vast sums to help wealthy bankers to get to work more easily.

Thus roads, like railways, are best funded not through general taxation but through a combination of land-values and user pricing. This could be achieved in either of two ways: one would be to levy a general land value tax to pay for infrastructure, and to introduce road-user pricing to pay for upkeep and to control congestion; this would maintain the government’s road monopoly (which those who distrust private markets might prefer). Alternatively, we might allow private investors to build and maintain roads, which they would do in the hope of gaining profits from the land they own, the charges they levy and the reduction in costs of other business activities.

I actually remain quite agnostic about these two choices (though as Tristan Mills has pointed out, the latter avoids the increasingly apparent problem that Government cannot be trusted with the vast amount of information that nationwide road-user charging would generate about individuals private movement). What is clear is that the current habit of treating roads as though they are a public good that must be funded from general taxation is not only theoretically incorrect but also leads to a “tragedy of the commons” expressed through congestion and pollution, causes roads to be built where political forces rather than demand dictate, and raises levels of economically-damaging taxation. Whether the shift is from state to private or merely from taxing the general public to making the beneficiaries pay, it is time to start treating roads as a very private good.

Centre Forum nearly right about new Lib Dem education policy

2008-01-15T17:46:00.000Z

Serendipity is a wonderful thing. Having written yesterday about how choice drives up standards in education, a new report landed on my desk today providing further support, and calling upon the Liberal Democrats to adopt education policies that see the money following the pupil.

A liberal education policy, from the think-tank Centre Forum, notes that

Choice is one of the key freedoms in a liberal society. It is also one of the
best ways of driving up standards. Opponents of choice based systems claim that
“people just want a good local school”. True. But that leaves unaddressed the
issue of how these good local schools are to be created. Advocates of choice
systems argue that the exercise of parental choice leads to the creation of more
good local schools by forcing poor schools to ‘up their game’ in response to
competitive pressures. But does this work in practice?

Which was, of course, exactly my point. The authors then go on to add the findings of the Institute of Fiscal Studies:

A recent IFS paper had this to say on the matter: “Is school choice a tide that
lifts all boats? The evidence from the USA suggests that it might be, as it
seems to increase school quality across all schools that face
reasonable amounts of competition. This is what we would have
expected, given what economic theory tells us about the role of competition.
Evidence from the UK is much patchier. This may be because competitive pressures
are limited (school numbers and funding vary little from year to year).
Therefore, it seems to be the case that school competition can be a tide that
lifts all boats, but only if its effects bite financially.” (emphasis
added).

The report goes on to propose that “a greater proportion of education funding … ‘follow the pupil’, either through a system of vouchers or entitlements (the difference being purely administrative).” However, astonishingly it then throws a spanner in its own works by pandering to producer interests in the public sector, massively undermining the drivers that would generate improved quality, when it adds “So as to strengthen, rather than undermine, the state education system, such entitlements should not be redeemable at fee charging schools”.

As I made clear in yesterday’s post, any limitation by government on the freedom of parents to provide the best schooling for their children is iniquitous. As with any other industry or service, if the state sector is not able to provide the best product or service, users should be free to go elsewhere. To force parents to continue to use inferior schools in a misguided attempt to protect the state sector is as flawed as the 'infant industries' theory: rather than “strengthen… the state education system”, as Centre Forum would have it, such a policy would merely insulate it from competition from private, voluntary, commercial, charitable and other alternative providers, which would suboptimal standards and systems to perpetuate.

The only way to ensure that everybody has access to a “Good, local school” is to give everybody unfettered choice to educate their children wherever they see fit.

As Centre Forum themselves note, in Edmonton, Canada, the “the exercise of parental choice has so strengthened the public school system that there are now no fee charging schools left in the city”. Why Centre Forum does not trust the British public sector to respond as positively to competition as their Canadian colleagues, and why the authors think that we should therefore protect the state schools at the expense of the pupils whose choice Centre Forum would limit, is a mystery.

How we can get that “Good local school” everybody wants

2008-01-14T19:55:00.000Z

I don’t usually do requests, but I received a message from dreamingspire asking me to clarify Andy Mayer’s report of my comment that people may not want choice, but choice is the means to give them what they do want, which is good local services.

My comments came in response to a doctor and Lib Dem councillor who commented firstly that the next nearest schools to her were 11 and 12 miles away respectively, so that her choice was in fact limited; and that most people did not want choice, they just wanted “A good, local school.”

In this latter point she was, at least in part, correct – choice is not an end in itself, but a means. The point of choice (and competition, and markets, and all those other scary things that cause Social Democratic stomachs to knot in fear) is that it is the most effective driver in improving standards.

The reason for this is simple, and one that liberals should consider to be a matter of fact: monopolies do not serve their customer’s interests. By comparison, nothing encourages providers to satisfy their customers more than competition, or “freedom of exit” as one might also put it. It is the fact that I can take my money and spend it elsewhere that makes those firms that I patronise continue to struggle to provide the best goods and services available; while others struggle equally hard to woo me with better offers. So for example, my employer has recently expressed its dissatisfaction with the supplier of sandwiches for lunch meetings by switching to another supplier, which is far easier and more efficacious than trying to make the previous supplier change their methods.

And here is where my frustration with the Defenders of the State(/us quo) begins. For the opposition to choice in public services is in the end a belief that citizens should be obliged to utilise public services that are delivered by pubic servants and managed by the government even if that provision is inferior to alternatives that are on offer. Lest my publically-employed readers and colleagues move to quickly to jump to the defence of the public sector, I should add that nothing in that statements implies that public services do or must deliver poorer outcomes for citizens. What I am saying is that if a patient or parent believes that they can access better healthcare or schooling elsewhere, it is the height of arrogance to deny them their freedom to do so.

This was clearly why Nick Clegg told the Manifesto Conference on Saturday that “every patient should have a guarantee of treatment within a specified waiting time - and to drive the NHS to deliver that, everyone should have the right to receive private treatment, paid for by the NHS, if the waiting time’s not met.” This need not divert a single penny of taxpayers’ money from the NHS, if only it is able to deliver prompt treatment, but if the NHS is unable to deliver on that simple requirement then patients should be free to get their treatment elsewhere, rather than being compelled to wait for months or years (often in acute pain or with consequent deleterious effects to their health and wellbeing) for the NHS to be able to deal with them.

Of course, choice will not be exercised by every citizen, and one of the greatest concerns of those opposed to choice is that it will benefit the articulate and the pushy at the expense of the marginalized. But this is not in fact the case at all, for the choice of some is beneficial to all. If I continually go to the same electricity provider or supermarket without ever exercising choice, I still benefit from the freedom of others to choose, which drives all providers to aim to deliver the best. This is so common in private markets as to go largely unremarked. Yet evidence from districts where parents have been given school choice suggests that the same applies to public services, too: the standards of public schools did not fall when the ambitious parents exercises choice and moved their children to private schools; rather, the public schools responded by “upping their game”, improving their own teaching in an attempt to limit the exit of their citizen/customers.

Hence my interjection at the Manifesto Conference: choice raises standards across the board, not just for those exercising their freedom.

But what of our doctor and councilor who lives so far from other schools that she fears that choice in her village is meaningless? Real choice in fact still exists, because she can exit. The example of the Elmgreen School is instructive: dissatisfied parents, rather than tolerating inferior education for their children, exercised their freedom to exit the public system by taking their public money and financing an entirely new school. In their case, it was a novel idea that required the local authority’s permission, but in theory any group of parents could do just that, using their public money to home-educate, or pooling their resources to set up a local school or merely hire teachers to visit them at key times to teach their children.

Choice is too often seen as a Trojan Horse for privatization, but that is a lie spread by those for whom individual as opposed to collective solutions are anathema. Real choice may very well be private, but it just as equally may be public, voluntary, charity, religious, co-operative, self-help or any of a host of other possibilities. As Clegg went on to say, “the state must oversee core standards and entitlements. But once those building blocks are in place, the state must back off and allow the genius of grassroots innovation, diversity and experimentation to take off”

And as for the much-stated assertation that voters do not actually want or care about choice, I will conclude as I did at the conference by reminding readers of what David Bell, the Permanent Secretary at the Department for Children, Schools and Families, once commented: people may say that they do not care about more choice, but just try taking away the choice that they have already been given!

Is "neoliberalism" a real ideology?

2007-12-18T12:30:00.000Z

A ‘neo’ is someone who pretends to be something, someone who is at the same time inside and outside of something; it is an elusive hybrid, a straw man set up without ever identifying a specific value, idea, regime, or doctrine. To say ‘neoliberal’ is the same as saying ‘semiliberal’, or ‘pseudoliberal’. It is pure nonsense. Either one is an favor of liberty or against it, but one cannot be semi-in-favor or pseudo-in-favor of liberty, just as one cannot be ‘semipregnat’, ‘semiliving’ or ‘semidead’. The term has not been invented to express a conceptual reality, but rather as a corrosive weapon of derision, it has been designed to semantically devalue the doctrine of liberalism.

Mario Vargas Llosa, “Liberalism in the New Millennium,” in I. Vasquez, ed. Global Fortune: The Stumble and Rise of World Capitalism, Cato Institute Washington DC, 2000, p16.

State funding of political parties both wrong and dangerous

2007-12-07T18:06:00.001Z

Following on from Geoffrey Payne’s article about state funding of political parties, I’ve written a rather vast fisking. So lengthy is it that is enables me to trim it down to form a new article all of its own about that most hideous, awful and self-serving of ideas: state-funding of political parties.

State funding of political parties simply ingrains existing power and privilege. It is the ultimate reward for incumbency. What is more, it is a classic subsidy, with all the negative effects that result. If a politician suggested that Morrisons should receive state funding because they have fewer customers than Sainsbury’s, Tesco and Asda they would be laughed out of The House. Yet these self-same politicians that object to subsidising private companies are far more enthusiastic about subsidising their own organisations. One might think that this exposed a conflict of interest!

If a political party can’t attract the necessary pounds to operate then it deserves to go to the wall. Surely the demise of failing parties is creative destruction, and a failure to attract donors and members a sign that the rot has set in to a failing party. What is more, it is extremely dangerous. Forty years ago Labour and the Tories competed to lard business with subsidies with the effect that they ruined our economy. Do we really want to do the same with out politics?

If it seems that all politicians are self-serving, then it is equally hard to shake the feeling that the Lib Dems support for this is related to the fact that they feel hard-done-by in the donation game. Yet ironically the evidence suggests that we do well as a party despite our relative poverty. The fact is that in 2005 the Labour and Conservative Parties spent £18m each on the election while the Lib Dems spent a paltry £4m, yet the votes that were cast for the Labour and Conservative Parties were only 8m each compared with 6m for the Lib Dems. That says to me that money has a lot less to do with results than people think.

In fact, I would go further. Our support for proportional representation is based on the fact that we get a lot of votes but not many seats. Our concern about funding marches uncomfortably next to this, because our argument for PR is based on the evidence disproving the suggestion that the other parties are gaining unfair advantage from their donors.

There is often an attempt to use the freedom of speech argument here, and it usually revolves around the BNP. High-minded as liberals are, we have always been willing to support the right of those with whom we disagree to voice their opinions and stand for office. But to go from that to state funding is grotesque. If the BNP have support then they should be able to survive on donations. If they cannot garner that funding, then their support is clearly (ballot) paper-thin. People may as well spoil their ballot paper or – if they really want a thug for a councillor – put up a candidate themselves (it is free, after all!).

Taxes should pay for public goods because they are the most efficient means of doing so. By comparison, individuals should pay for individual goods on a user-pays basis. While political parties are undoubtedly necessary and inevitable, that does not make them public goods in the economic meaning of the term. Rather, they are like the Church: it may save us all from damnation, but its funding should still come solely from the believers!

So there you have it: my usual critique. But just for fun I’m going to do that all-too-rare thing and propose an alternative. I should add that I came up with this on the back of a fag packet this afternoon (figuratively, of course, as I was in a public place at the time!) and I’m putting it up for comment and debate rather than tabling it as a policy motion. But here’s a thought:

How about all donations being channelled though the Electoral Commission so that all are anonymous. Of course one could say one will donate half a million quid in exchange for a peerage or a British passport or an exemption for my sport to continue to advertise tobacco, but as long as the party to whom one has made the promise receives more than half a million pounds in the year, they’ll never know whether one was telling the truth or lying through one’s back teeth to curry favour. So much for the power of patronage!

Lessons from Rwanda V: Recognise a mistake and react quickly

2007-11-30T19:25:00.000Z

When Gen. Dallaire was first sent to Rwanda to plan the UNAMIR mission, he was told by Maurice Baril, the senior military officer at the UN Department of Peacekeeping Operations (DPKO), not to recommend a brigade-sized deployment (4,000-5,000 personnel). The UN finally settled on 2,500, but it took many months to approach full strength, and even then the quality of the troops was mixed and lacked logistics support – they had too few vehicles, almost no working Armoured Personnel Carriers, only a couple of helicopters for only a part of the mission, and no heavy lift capability. As the war recommenced and the genocide began, rather than reinforce the mission, the UN wound it down.

A fortnight after the bloodshed had begun, and with tens of thousands already slaughtered in the streets and tens of thousands more cowering in UN compounds being protected by lightly-armed troops and unarmed military observers, Gen. Dallaire again reported to the DPKO:

“I received no solace when I raised the reinforcement option. Maurice [Annan and
Riza] simply responded that I should not expect anyone to wade into the mess in
Rwanda. The reinforcement option would never see the light of day, and that was
it… Early in the morning of April 22, [my military assistant] brought me… Security Council Resolution 912. The Council had finally voted for the skeleton force option. The resolution’s phrases were pure UN-ese: ‘…having considered…express regret… shocked… appalled… deeply concerned… stressing… expressing deep concern… concerns… strongly condemns… demands… decides… reiterates… reaffirms… calls upon… invites… decides to remain actively seized of the matter.

“As I write these words I am listening to Samuel Baber’s Adagio for Strings, which strikes me as the purest expression in music of the suffering, mutilation, rape, and murder of 800,000 Rwandans, with the help of the member nations of the only supposedly impartial world body. Ultimately, led by the United States, France and the United Kingdom, this world body aided and abetted genocide in Rwanda. No amount of its cash and aid will ever wash its hands clean of Rwandan blood.” (Shake hands with the Devil: The failure of humanity in Rwanda, Lt. Gen. Romeo Dallaire, pp322-3)

The slaughter would go on for 100 days, yet 15 days in the UN passed up the opportunity to save hundreds of thousands of lives. Both Dallaire and Colonel Luc Marchel, the Belgian contingent commander, are clear that with four or five thousand well-equipped troops they could have imposed order on the warring parties and intervened to stop the slaughter. Marchel goes further: had the NATO nations that evacuated their troops in the second week then transferred the 1,500 well-equipped Belgian, French and Italian troops (plus 250 US marines to which Dallaire refers), “It was enough people to cease the situation inherent and to save the peace and to save the life from thousands of human beings.” (Frontline: The Triumph of Evil, interview with Col. Luc Marchel).

Marchel’s solution (I have not yet reached the conclusion and established whether Dallaire agrees) is “to have a standing force ready to move and ready to be on the ground as soon as possible.” But as even he admits, “we need a political will.” It is unlikely that national governments will hand their troops over to the UN with a clear writ to use them as they will, but if they would at least be more willing to deploy them when emergencies arose – be more willing to expend “blood and treasure” for the sake of peace and humanity – such terrible crises could be avoided in the future.

Lessons from Rwanda IV: force discipline is essential

2007-11-28T20:39:00.001Z

In any multinational mission, it helps if there is a clear chain of command and all the national forces are singing from the same song-sheet. Sadly, that all too often fails to happen. UK and Canadian and Dutch troops in Southern Afghanistan have taken the brunt of the fighting there because other NATO nations refuse to deploy their forces to the South, to engage in peace enforcement or (in the case of the Germans) to leave their compounds after dark.

One particular problem is when national contingents contact their home nations to seek clarification of (or over-ride) the orders of their commanders. This, and some simple cowardice, hamstrung UNAMIR’s efforts in the opening day of the Rwandan genocide:

“[Brigadier General] Henry [Anyidoho, deputy force commander of UNAMIR,] was totally frustrated with the Bangladeshi troops. Their APCs [Armoured Personnel Carriers] were either mysteriously breaking down (we later found out that the crews were sabotaging the vehicles by placing rags in the exhaust pipes) or they couldn’t be reached (a confirmed tactic by some of the crews was to move a short distance from the headquarters, shut down the radio and return later, claiming they had been held at a roadblock.) Those who actually arrived at the place to which they had been sent exhibited a lack of zeal in pursuing their missions.

“A mob of angry locals, fired up by extremists, were blocking the entrances to the Amahoro Staduim complex [which was the UNAMIR force HQ and main base, and] to which thousands of Tutsis and moderate Hutus were attempting to flee. Henry kept urging the Bangladeshi [contingent of UNAMIR] to clear the area, but their commander was not responding to his orders and was seeking direction from Dhaka. The couple of APCs that had returned to the stadium were sitting idle while Kigali Sector was pleading for them to respond to calls for help from other UNAMIR personnel and Rwandans at risk. I ordered Henry to inform the Bangladeshi commander that he was contributing to the potential deaths of Rwandans and UNAMIR personnel and that he would be held accountable. That night I found out that he had received direct orders from his chief of staff in Dhaka to stop taking risks, stay buttoned down, close the gates and stop carrying Rwandans in the APCs. He did exactly as he was ordered, ignoring the UNAMIR chain of command and the tragedies caused by his decisions.” (Shake hands with the Devil: The failure of humanity in Rwanda, Lt. Gen. Romeo Dallaire, pp243-4)

Lest the reader think that this was a problem among the developing nation’s troops alone, however, Dallaire was equally scathing of aspects of the Belgian forces that were his most capable troops. Upon arrival the Belgian Para-Commandos, fresh from Somalia, were caught “bragging at the local bars that their troops had killed two hundred Somalis and that they knew how to kick ‘nigger’ ass in Africa” (p112). Later, during a visit from the Belgian army’s inspector general and the commander of the Para-Commando Brigade from whom the troops were drawn, Dallaire “broached the serious deficiencies in leadership, discipline and training of the Belgian battalion… Belgian soldiers were often frustrated by the patient negotiations required of peacekeepers… They saw themselves as the crème de la crème, as vastly superior soldiers to their UNAMIR colleagues. They seemed to view the mission as a sort of Club Med assignment…

“There had been dozens of incidents of disciplinary infractions. The Belgians were constantly being caught out of bounds in nightclubs that had been restricted for their own safety. They drank on patrol and got into barroom brawls…dancing and drinking in… the local hot spot, with their personal weapons… The Belgians often refused to salute or pay proper respect to officers of other contingents, especially officers of colour. There were Belgian soldiers who went absent without leave to Zaire and got up to heaven knows what until they were detained by the authorities…
“At the beginning of February, on of my Belgian patrols had roughed up [a senior Rwandan army officer and leading hard-liner, and later a] group of Belgian soldiers in civilian dress forced their way into the home of one of the heads of the extremist CDR party… assaulted him in front of his family… and, just before they left, one of them aimed a gun at his head and warned him that if he or his party or the local media ever again insulted or threatened Belgium, Belgian expatriates or the Belgian contingent of UNAMIR, they would return and kill him.” (ibid. p182-4)

Later, these men would order the murder of ten Belgian prisoners.

These contingents were not uniformly terrible: he describes both the Bangladeshis and the Belgians as “immensely impressive” for an operation they conducted before the conflict began (p195); Colonel Luc Marchal, the senior Belgian officer and Kigali sector commander, “understood and lived the mission” and stayed on for an extra six months following Dallaire’s personal request to the Belgian defence ministry (p205-6); and the Belgian troops who died during the mission “were and remain heroes of Rwanda” (p240).

But all too often a failure to treat the mission and its commanders with the same military professionalism that soldiers and officers would automatically show in a national operation hamstrung the mission, undermined the safety of UN personnel and abandoned Rwandans to their fate.

Not candidates but leaders: The London leadership hustings

2007-11-28T02:41:00.000Z

Tonight’s London hustings were excellent, and there is no doubt that the Liberal Democrats, no matter what their individual views, can rest assured that their next leader will take the party forward into a positive future. Having lured many bloggers to the pub, I’m hoping that at lest some of them will have taken the night off and not blogged yet, so I’ll get my comments in first. (Fat chance!).

The more interesting part of the evening was undoubtedly the speeches; the answers to questions from the floor (and this blogger was cruelly ignored) were less (though still) edifying.

Chris Huhne “won the toss” and got to speak first, and started with a (populist, if only because I’ve heard it so often in the last few weeks) “Draft Vince” gag – which, to be (un)fair, is an easy crack once nominations are closed. He then proceeded to give one of the best speeches I’ve ever heard him make, and easily the best I’ve heard this campaign.

Chris started by stressing his liberal values and the need to set the tone for C21st; the Tories and Labour having no big ideas or radical solutions. Brown was the “Patron saint of tax accountants”; Labour had required real talent and hard work to engineer the first bank collapse in 140 years; Labour are a corrupt party, every one of their >£1n donors having received a peerage or a knighthood; he emphasised the David Abrahams case. As for the Tories: David Cameron was a career politician with no background outside politics, unlike Chris, who has an extensive pre-politician career; and Labour and the Tories were now one-and-the-same, and what Britain needed was “not a third conservative party but a first radical party.” He emphasised that a rich society should be a fair society, and that tough choices were necessary (such as abandoning Trident so as to fund our armed forces better). He stressed the need to end child poverty which blights the future chances of all the 3.8m children born into poor families. Sadly, he then re-used a tied old Huhne line: “Not just the open road…. but the fair start.”

Here a pause is required. Both Nick Clegg and Chris Huhne were guilty of re-using old lines. I joked to Mrs. Polemic that Nick would begin his speech by saying that “I want to lead the Liberal Democrats because I want to live in a more liberal Britain” but he surprised me by leaving that quote to the end. Chris cited not only the above well-used line but also the old chestnut (re-cycled from his last bid for the leadership) about changing “not only the faces in the back of the ministerial limo” but also the whole nature of politics.

Chris also pushed the anti-school choice and anti-social insurance line, one which I must admit makes me cross. He stressed “If I am elected leader there will be no question that journalists will be confused about where I stand”. This is a reference to articles about Nick in certain newspapers. Ignoring my own proclivities, this is a clear attempt (used by Chris before) to position himself as opposed to something of which he has accused his opponent, but which Nick has consistently denied supporting. It is therefore a false issue that he is using as dog-whistle politics, and it makes me very uncomfortable.

Chris went on to emphasise his belief that climate change is the “greatest challenge of our time”, and that we were mortgaging our children’s future by ignoring it; it was the central theme of his political life. He noted that the Lib Dems had been setting the political agenda and winning the4 argument on this issue for some time. To conclude he stressed his ambition willingness to take risks, (confusingly) that “boldest measures are also the safest” (I really have no idea what that means) and reiterated (with that limo comment) the desire to change the system.

It was the best I have ever heard his speak, and as I noted to Mrs. Polemic as Nick stood up and had to wait for the applause to die down, “That wasn’t a candidate’s speech; that was a leader’s speech”. I felt like it was Thursday at the Autumn conference. As somebody who was previously strongly in the Clegg camp, I was genuinely impressed and thought that that was going to be a hard act to follow.

So when Nick stood up to speak (without notes), and had to wait for the applause do die down, I did think that something more than the average was going to be called for. What we were then treated to was the most passionate, most impressive and most convincing speech that I’ve heard from any would-be or actual leader (and I attended the leadership hustings in the same room nearly two years before).

Nick started by using the “Friends” line (all speakers at conference seem to address their audience as “Friends” or “Conference” and I suspect that there is a code to it that is lost on me, though I wouldn’t be surprised to discover that one hails from the Liberals and the other from the SDP – if others can correct me I’d welcome the knowledge) and warmed the room with a couple of jokes. He was altogether more jovial, though an MP noted to me afterwards that joking at the expense of the journalists wasn’t his cleverest move.

But, having clearly learned from his Question Time experience, he then launched directly into the passionate politics that has previously served him so well in this campaign. Some of it was a bit familiar, but what was clever was his deliberate use of London as an example: replacing his already-used example of the 14 year life-expectancy gap between Sheffield’s richest and poorest with Newham’s 16 years; the third of London’s children in workless families; and yet the amazing diversity in London (he also referred to the “arrogance about what is wrong” which I totally failed to understand). He was ambitious for our party, and wanted within two years to break the two party grip on elections. But we needed to start from where people were, not where we though they should be; we needed to be a party of hopes and dreams; of ideas and genius.

He then when to define five key policy areas that would shape the future. These were:

1) The “Epidemic of Powerlessness” that saw people shut out by the giganticness of both government and business; where (doing a classic Clegg and citing a personal example to highlight a point) he described the elderly couple that had struggled just to have a phone line in their house moved; where government advises us to shred our bank statements and then loses 26m people’s bank details; and (most importantly) where power should be handed not just “from Whitehall to the Town Hall” but also beyond to individual
2) “Social stagnation and exclusion” that led to unequal life expectancy and school performance based upon starting circumstances, that (and here I confess I’m sharpening his sound-bite) state schools “suck up the disadvantaged kids and pit out disadvantaged adults”; he would spend more money on less advantaged children to ensure that all got a decent education.
3) “Fear”, an issue the Lib Dems may have neglected and which affected the poorest most of all; and which required us to find practical solutions to real day-to-day problems
4) the environment (spreading good Lib Dem policies among Vince Cable and Norman Baker as well as Chris Huhne, diluting his opponent’s record), where we had spent too much time hectoring individuals while business, government and local authorities had to take a lead; and
5) Globalisation, which he noted (correctly) brought both positive and negative effects but which he (wrongly) would seek to “limit and control”. He was correct to note, however, that unaddressed, globalisation could lead to disenfranchisement, thence to apathy and so open the door to extremism. This had to be countered.

Nick concluded by noting that “Liberalism was the creed of our age”, that he was proud of our past but wanted a better future, and stressed that third place was not good enough. It was a winning speech, and the applause was deservedly prolonged.

Inevitably, after two such good speeches, the question-and-answer session was less good, and undoubtedly both need to learn to tighten up their answers. Having waxed above already I may leave that until tomorrow, but the Q&A did not change the overall sense of success – though it helped clarify particular policy issues. It was Nick’s night – no doubt about it – but whoever wins, the Lib Dems will have an excellent leader. Neither of them sounded like candidates this evening; they both sounded like leaders.

Lessons from Rwanda III: A crushing lack of political will

2007-11-27T08:40:00.000Z

“Rwanda was on nobody’s radar as a place of strategic interest. It had no natural resources and no geographical significance. It was already dependent on foreign aid just to sustain itself, and on international funding to avoid bankruptcy. Even if the mission were to succeed, as looked likely at the time, there would be no political gain for the contributing nations; the only real beneficiary internationally would be the UN. For most countries, serving the UN’s objectives has never seemed worth even the smallest of risks. Member nations do not want a large, reputable and strong United Nations, no matter their hypocritical pronouncements otherwise. What they want is a weak, beholden, pathetic scapegoat of an organisation, which they can blame for their failures or steal victories from.
"Worst of all, I suspect that some of these powerful nations did not want to get involved because they had a firmer grip on the threats to the Arusha Accords than did the rest of us… [T]he permanent five of the security council, all had fully equipped and manned embassies in Rwanda, including both military and intelligence attaches… [T]hese nations either new in detail what was going on or were totally asleep at the switch. I firmly doubt they were asleep.” (Shake hands with the Devil: The failure of humanity in Rwanda, Lt. Gen. Romeo Dallaire, pp89-90)

This is a damning assessment. Rwanda was so unimportant that even though the leading nations in the international community knew what was brewing, they did nothing to bolster the UN peacekeeping mission. Rather, they continued to starve the UN of the resources and political will it needed to do its job properly, primarily because a successful UN is a strong UN, and a strong UN not in these nation’s interests.

Dallaire was, of course, a long way from New York, and can only guess at the motivations of the great powers or their knowledge or motivations. But it is pretty clear that he was never given the resources he needed to do his job; not one whole battalion of troops was contributed by any nation, and one cannot simply add units from different nations to make up a whole. While the nations may not have known the full extent of the horror planned, it is clear that they were playing fast and loose with African lives. Eight hundred thousand of those lives would be lost.

What I believe in a (slightly spooky) nutshell

2007-11-24T00:10:00.000Z

Sometimes I struggle to explain why I am a liberal and what it is all about.

That might sound crazy, but the conversation almost always either gets lost in blue-skies philosophical maxims ("the greatest amount of individual freedom possible that does not constrain the freedom of others"), or else becomes bogged down in specifics (school choice; welfare reform). I guess the fact that I'm usually in a pub does not help, but the simple explanation has always failed me.

Thanks to Rob Knight (who takes his lead from The Devil - read into that what you will!) I am remineded that at the heart of liberalism is self-ownership: "I own my life and all that results from it. Therefore nobody may take my life or its product from me, nor impose their will upon me; neither may I do so to others." Tristan Mills mentioned this six months ago, but it seems it takes a cartoon to help me remember.

This 8 minute Flash film sums it up brilliantly. Sadly, it is also slightly spooky: as I commented to Rob,

"I agree with everything they say, but I do feel like a 6 year old in Brave New
World, getting my latest lesson in how to be a constructive citizen. Pass me the
Soma!"

Still, it's a good basic introduction to the premis of liberalism. Having explained the bases, it should be easier to move on to the specifics without assuming I'm mean, selfish or a Tory.

Praise doesn't pay for flak-jackets, Gordon.

2007-11-23T19:08:00.000Z

"I have nothing but praise for our armed forces..." said Gordon Brown today, responding to criticism of his miserly defence budget.

I'm sure that the army will welcome the praise, but it would be nice if he had explained where they can trade it in for the equipment that they so desperately need. Not at the MoD, obviously.

Perhaps if he had said "I have something other than praise..." the army might have felt a little less abandoned.

Lessons from Rwanda II: A half-hearted commitment gives a half-baked outcome

2007-11-23T18:02:00.000Z

Too often we hear the cry that "Something must be done", but all too often what we do is more about making ourselves feel better than allieviating the problem. We want to feel that we've done out bit, but we lack the necessary committment to do it properly. We do a half-harted job, and when the chips are down, we run away.

Thus, while the UN were planning their mission to stabalise Rwanda and uphold the peace, the member states were not really committed to the task.

'...the hard-liners I had met on my reconnaissance of Rwanda had attended the same schools that we do in the West; they read the same books; they watched the same news; and they had already concluded that... the West did not have the will, as it had already demonstrated in Bosnia, Croatia and Somalia, to police the world, to expend the resources or to take the necessary casualties. They had calcultated that the West would deploy a token force and when threatened would duck or run. They knew us better than we knew ourselves.' (Shake hands with the Devil: The failure of humanity in Rwanda, Lt. Gen. Romeo Dallaire, p79)

Lessons from Rwanda I: "Situating the estimate"

2007-11-22T17:54:00.000Z

I have started reading Shake hands with the Devil: The failure of humanity in Rwanda, by Lt. Gen. Romeo Dallaire. As head of the United Nations Assistance Mission for Rwanda (UNAMIR), he was the man who was left holding the ring while the UN and its member states turned their back on the Rwandan genocide.

Having skipped over the fist half century of his life at a mercifully brisk page a year, on p56 he describes how from day 1 his peacekeeping mission was hobbled. He was asked to prepare an assessment for a mission to support the newly signed Arusha Accords, but describes how the head of the Military Division of the Department of Peacekeeping Operations

'...told me not to come back to him with a request for a brigade sized mission.
His words were roughly "This thing has to be small and inexpensive, otherwise it
will never get approved by the Security Council." I was taken aback. He was
asking me to "situate the estimate," as we say in the military, to design the
mission to fit available resources rather than to respond to the actual demands
of the situation we were being sent to assess.'

I've several hundred pages left to read, but I already know that Gen. Dallaire spent six weeks during the genocide begging his superiors to give him just a single brigade, with which be believed he could stop the slaughter and save hundreds of thousands of lives.

Sadly, the United Nations does not lend itself to swift, decisive action. For that, nation states are still required, perhaps forming (none-too-fashionable) "Coalitions of the willing".

And as George Santayana noted, "Those who cannot remember the past are condemned to repeat it."

Lib Dem drinks: leadership hustings debriefing

2007-11-22T17:48:00.000Z

Lib Dem leadership hustings debriefing

...because when it’s all over bar the shouting, where better to shout than The Prince Arthur.

Tuesday 27 November, after the leadership hustings and round the corner from the Friends' Meeting House.

Whether you are a Cleggite or a Huhnie, undecided or disaffected, if you can fight your way past the LDYS kids handing out badges and avoid the unprecedented approachableness of the two candidates in the lobby, come to The Prince Arthur at 80-82 Eversholt Street, NW1 1BX and discuss the leadership, the future direction of the party and our electoral chances…

…or, alternatively, house prices, I’m A Celebrity and England’s new footballing lows.

(When I write “footballing” the spellchecker tries to change it to “mothballing” – now there’s an idea!).

Newsnight: Head-to-head with Clegg and Huhne

2007-11-21T01:03:00.000Z

One of the downsides of being married is that one is never the first person to post about a recent event. (There are fringe benefits, however). So I imagine that the LibDemosphere is already awash with accounts of tonight’s Newsnight, however, where Nick Clegg and Chris Huhne battled it out in a leadership special.

It began pretty painfully. Having shunted us to second billing after Alistair Darling lost the personal and bank details of half the British population, we were then met by the two contenders failing to agree on who should start, so that Jeremy Paxman was obliged to ostentatiously “toss the Euro” to see who should begin.

Chris won, and began with his one minute speech in which he stressed the need to be radical, to give away power, to decentralise, to be “Fairer and Greener” (remember that one!), and stressed his ability to get our message across. He appeared a little hurried; a little tense. Nick was calmer and better prepared, and began by explaining that he did not want to be leader because it was an end in itself, but because he wanted to be part of a liberal society, “to make politics less boring” and to “speak like a human being.” Oh, and make Britain “fairer and greener”. I feel they rested my earlier case!

On the question (so oft repeated) as to whether anybody should care, Chris pointed out quite fairly that his background in economics is extremely germane; we are undoubtedly entering into a period of economic stability where are leader with a sound understanding of economics will be needed. Nick, on the other hand, emphasised the need to reach out to the non-voting 40 per cent, a plea that carries much emotional but little practical weight (remember, three quarters of them weren’t voting 30 years ago, either).

Paxman then resorted to his favourite leadership head-to-head tactic (and one I actually enjoy) which was to ask for straight answers to straight questions: the “yes or no” round. I preferred Nick’s answers for the same reason that I preferred Alan Johnson’s in Labour’s deputy leadership: he gave the succinct answers requested. Nick categorically ruled out in one word adopting school vouchers (the fool!), while both agreed to rule in Trident “right now”, but Huhne waffled whereas Nick was succinct. On tax, Chris stressed the desire to see “broader shoulders bearing more of the burden” (which one assumes is not-very-complex code for more “progressive” taxation) while Nick emphasised the reduction of taxes on income and the shift onto environmental taxation (which some might argue was Huhne’s home ground).

On immigration, however, Nick put a ball firmly in the back of my net and that of many Liberal Democrats: asked whether there had been “too much immigration into Britain” he stated categorically no. He is of course correct. But I was very disappointed by Chris’s answer, that while immigration had been good overall, some communities had suffered from too much, too quickly. It was particularly worrying that he cited workers in his Eastleigh constituency that had had to deal with increased competition, as though they should be protected from outsiders coming into their town to compete with them for business. This had the whiff of protectionism about it, and contrasted with Nick’s explanation that the problem with immigration was that resources were not provided to local authorities by government (which is too slow to recognise population shifts in towns and districts), that they were not required to learn English, and that a lack of exit controls meant that we had a distorted image of who was in our country.

On the Euro, both agreed that Britain should not be a member now – which is orthodox Lib Dem policy – and neither wanted to get dragged into discussing future coalitions. Chris suggested that electoral reform would lead to a more sensible approach to partnership politics, while Nick got a little shirty with Paxman (which I quite enjoyed).

To conclude, both said that they liked each other personally and, when pressed, Nick said that the “Calamity Clegg” dossier was mean but that he could put it behind him, while Chris said that he took full responsibility, that he apologised, but that it had been drafted by a junior member of his team. Both promised a place in the future shadow-cabinet to his opponent.

While not hugely informative on substance (a couple of issues aside) it nonetheless was clear who won on style. This was summed up best by Mrs. Polemic – so far a Huhne fan – who was fairly frank towards the end in recognising that “Clegg’s wiped the floor with Huhne, hasn’t he?” The question was rhetorical, and justifiably so. I don’t know if this performance alone will have swayed her, but it may have swayed some. I’m looking forward to the hustings more and more.

Grab a cigarette paper, I think I can see a gap!

2007-11-20T18:02:00.001Z

Yesterday, the BBC published a round-up of the policies of the two Lib Dem leadership candidates. I was surprised at quite how close they are to one another. Indeed, it reminded me of John Major’s quip following Tony Blair’s statement that his three priorities would be “Education, education, education”, that the Conservative government of the time had the same three priorities, but in a different order.

So for example, under the rubric Constitution we read that Nick Clegg “Believes coalition government is only possible after electoral reform [and would introduce a] Freedom Bill to roll back ‘unnecessary, outdated and illiberal’ legislation like ID cards…” and would enable parliament to set aside time to consider petitions. By comparison Chris Huhne, along with enabling petitions to trigger referendums, believes that “Proportional representation [is a] prerequisite for any talks about partnership government [and would introduce a] Freedom Bill to repeal ‘unnecessary and illiberal legislation’.” Oh, and they both support a fully elected House of Lords.

And under Housing Huhne believes “Councils should be allowed to build more houses ... Three million homes should be built in next 10 years”, in stark comparison to Clegg’s desire to “Free councils to build 100,000 affordable homes a year, pushing up total housebuilding [sic.] to 3.3 million in 10 years.”

Well that’s helped me make my mind up. I’m off to man the barricades for whichever one has the warmest handshake at the door outside the hustings.

They both also support more money for schools (which makes a pleasant change from the platform of “Less money for schools” which every other politician has cried during their election campaigns) and to reach out to uncommitted voters (the willow-the-wisp of that elusive 40 per cent, the lumpen masses who could sweep us all to power if only they could be motivated by an inspiring leader).

Even where there are differences, they are more minimal than the various camps are suggesting. Nick believes that we need to maintain our nuclear arsenal as a bargaining chip in future multilateral disarmament talks (and he should know, having been a negotiator in previous talks), while Chris believes that we should maintain “a minimum nuclear deterrent...” while at the same time “rejecting Trident” because it would “tie us irreversibly to dependence on the United States”. The BBC list (itself probably drafted by the two camps following a request from the Beeb) places the importance of localism in tax-raising for Clegg and planning for Huhne.

On only a couple of areas do big differences appear to emerge. Nick has already fathered a policy that commits the Lib Dems to more “managed migration” [sound of head thudding repeatedly against wall], Chris appears to have been far stronger is suggesting that he would be tougher on non-EU immigration if it could be shown that this was leading to rapid short-term effects. So shocking do I find this that I feel the need to point out that I have not seen this policy first-hand from the Huhne camp; I am willing (almost eager) to believe that his position has been misrepresented.

But basically the two are disturbingly close together. This was summed up on Question Time when a member of the audience asked what the differences were between them on tax, to which they replied there was none. That was the end of that discussion. Both have of course explained that they are standing for the leadership of the same party and as such are bound to have much in common, but personally I have been frustrated by the lack of really radical thinking and genuine debate. In part I blame this on Chris’ apparent tactics of attempting to undermine Nick by demonising him and those around him for having dangerously liberal ideas: this has forced Nick back towards the party’s comfort zones; back towards the median voter. But I also suspect that even without the alleged dirty-tricks campaign there would have been an inevitable self-censorship by both potential leaders, recognising the sad reality that it is easier to alienate a voter than enthuse one.

The result is that we have missed a golden opportunity to have what the Liberal Democrats sorely need: a real debate about the soul of our party that would clarify that much-needed narrative that we are trying to formulate. Instead we must resort to looking for differences between the two large enough to slip an voting paper into.

Calamity Clegg?

2007-11-18T13:56:00.000Z

To my intense irritation, I managed to miss the first ten minutes of the Politics Show, which meant that I missed the first half of the Liberal Democrat leadership special, where John Sopel spoke to both Nick Clegg and Chris Huhne in a head-to-head. Others will have to tell me whether I missed the best bit, but the half I saw was interesting enough.

I came in just before Sopel produced a document entitled Calamity Clegg, that he claimed was an attack sheet produced by Huhne’s office in which it accused Clegg of flip-flopping, saying different things to different audiences and of failing on key policies. Chris of course denied any knowledge of it, but then proceeded to argue that much of what it said was true. What is noteworthy is that he did not say “I’ve no idea what that is, John, but it is not something I commissioned, I have nothing to do with it, and as such I have no intention of discussing a document I have not seen and for which I bear no responsibility.” Perhaps that is because he couldn’t. There ensued the bitterest argument between the two that I have yet heard.

Chris accused Nick of being vague on Trident and of refusing to rule out European social insurance and school voucher models. Nick rebuffed these accusations extremely strongly, arguing that Chris’ own stance on Trident was unclear (he suggested Chris supported building an new missile system) and said that he had been entirely clear on the question of social insurance and vouchers, neither of which he proposed. Notably, Nick mentioned at least twice that he had explicitly ruled these out the previous day (Saturday 17 November) in a private conversation with Chris, but that Chris was deliberately ignoring this; Nick also said that he was clear about this on his website and in other sources.

I think this is a shame. Partly, this is because I believe that social insurance and particularly school vouchers are worth examining, so it is frustrating to hear policies that I believe would improve services and empower individuals being dismissed by both potential leaders. Others however might be relived, so what individuals think about the specific policies is not so important. What is a tragedy is that Chris, by using the suggestion of liberal alternatives to state provision as a weapon with which to beat his opponent, has made it now impossible for either leader to ever consider them. Whether or not the policies would benefit people, it behoves our leaders to be open-minded and willing to examine new evidence as it comes in. By closing down even consideration of alternatives because it serves their personal ambition and vanity does not do any favours to the leadership, the party or the people we are hoping to serve.

Nick’s counter-attack was equally ruthless, it must be said. He accused Chris of deliberately inventing non-existent differences between them so as to create avenues for attack: in effect, lying about Nick’s beliefs or campaign. This follows Chris’ efforts on Thursday to damn Nick by association, suggesting that because one of Nick’s main supporters was David Laws, Nick could not be trusted. Interestingly, the document had been produced just after Sopel had asked Chris whether Nick would be a good leader, to which Chris replied “Yes, but not this time.” As a result of this argument, Nick escaped ever having to answer that question.

Overall, Nick was far calmer and in control of the situation today, while Chris looked more on the back foot than he had on Thursday’s Question Time. However, this was at least in part because it was he whom Sopel had accused of underhand tactics. Chris came out of it looking shifty, underhanded and bitter – perhaps because most of the senior party figures and the press favour his opponent. Nick by comparison looked like he was frustrated by the cheap tactics that the Huhne camp was employing and would rather get on with the important matter of… well… leading the party.

Overall, Chris appeared focussed on undermining Nick; and in the process did harm to our reputation as a party. It is interesting that on Thursday David Dimbleby asked Nick Clegg how he would respond to the reputation of the nasty party. Had I been in Nick’s shoes I would have replied “Not being a Conservative I cannot comment on their reputation”, but if Nick’s answer was less quick and less witty it might be because he was painfully aware that after losing (ejecting?) two leaders in two years, and with David Cameron doing so much to appear cuddly that I expect him any day to dress up in a bear costume, that reputation is passing our way. Today, Chris appeared to be pouring fuel on that fire.

If there is truth in Sopel’s accusation, and that document is real, or is indicative of the campaign the Huhne camp is leading, then the calamity Clegg presents is one for Chris Huhne alone, whereas the tactics Chris is employing to win the election render him a liability.

Fascists for freedom

2007-11-17T12:04:00.000Z

Okay. This is weird.

I was just checking out the Stormfront website (as you do!) and at the bottom I saw a banner advertising Ron Paul for President.

Now, as I understand it, Ron Paul is a Libertarian. As a libertarian, Mr. Paul would undoubtedly uphold the right of bigots, fascists and neo-nazis to shout whatever they want as loudly as they want, to preach hate to their shrivelled hearts' content.

He would also strip away border controls and allow millions of hard working hispanics into America, along with anybody else who could afford the airfare, didn't expect any welfare on arrival and were willing to pay some very low taxes. I've not looked to closely into Mr. Paul's campaign (I'm as far away from Texas as he is from the presidency) but he would probably also slash defence spending, and he would certainly not pass any laws banning inter-racial marriage. Indeed, he would uphold the freedoms of people of all races.

Now, we know fascists are idiots, but advertising their worst nightmare on their own website takes the biscuit!