I know where the dinosaurs are hiding

When the media and the press talk about impending battles between the Left and Right within parties, they really are resorting to their comfort zones.

For one thing, dividing politics up into Right and Left is a tad narrow-minded. There are three distinct political traditions (socialism; conservatism; liberalism; with the possible addition of environmentalism as a fourth), and if one must divide politics along a single axis, that between authoritarianism and freedom is as germane as that between a planned or a spontaneous market.

But accepting that the press will never manage to handle something as complex as three – let alone four – dimensions, there is another reason why talk about great battles between Left and Right ring hollow. There really isn’t much of the old Left left.

At least that’s what I thought until I went to the Trades Union Congress to discuss child poverty.

The recent TUC event on the theme of “A Minimum Social Wage” was like a throwback to the 1970s. There were at least two speakers who argued that poverty was an essential tool of capitalism, necessary to force the labourers to work for their capitalist masters. They clearly had not heard of the four hundred million Chinese who were condemned to subsistence farming and occasional starvation under Socialism but who are now rich enough to know that they will never go hungry again. For these relics of a time thankfully past, the replacement of the Capitalist system with a Socialist alternative was something that we should all strive. I wondered whether any minute Tony Benn was going to appear, waiving a copy of the 1983 Labour Party manifesto and calling for the collectivisation of the commanding heights of the economy.The highlight for me, however, was when the representative of the National Union of Journalists addressed the audience. He stood to make a point of such crass irrelevance that it would have been silenced by any other Chair. Only in the TUC, in fact, could a speaker get away with beginning his remarks by reminding the room that pointing “This week marks the 25th anniversary of the murder of Comrade Che”.

And your point is? How exactly is the death of Che Guevara relevant to child poverty in the UK in 2007? Perhaps, just as Guevara shot those whom he suspected of treachery in the Sierra Maestra, and later led President Castro’s death squads after they came to power, the TUC would like to line those whom they blame for child poverty up in Bedford Square and finish them off. I don’t doubt for a second that many of the representatives at this conference would have been inspired by his period as Minister for Industries, during which he expropriated all private business (down to the smallest farm; the last shop). There is undoubtedly also a parallel between his luring thousands of young Latin Americans to their deaths in pointless revolutions, and the continued siren song of the hard-line socialists.

Fortunately, we have largely learnt to ignore these bizarre throwbacks to a bygone age. But we must still be on our guard. While their most extreme cohorts are too rabid to be taken seriously, the underlying themes they espouse are shared with more moderate voices that still affect the political discourse. Statism; syndicalism; paternalism; prioritising the collective over the individual; a willingness to use coercion to achieve their ends; the priority of equality at the expense of freedom: these trends are still dominant in our society, and it is the poorest that suffer, and their children who suffer most.

If we really want to help impoverished children, that might be a good place to start.

…and what should be done to tackle climate change.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Slightly less authoritarian than the Dalai Lama

I have been looking at the Political Compass website again. For those of you unaware of this interesting site, it asks the reader 64 politically-oriented questions and then tries to place him/her on a grid where the x-axis is a line between “left” and “right” (by which I expect they mean collectivism verses the market) and the y-axis represents liberty verses authoritarianism.

Jock Coats says in his blog that he feels that “some of the questions are a little awkward.” I think this is if anything an understatement, though having done quite a few of these questionnaires in my time (on occasions when I have been tempted to enter the Government bureaucracy) I recognise that they are always rather poorly phrased, and I suspect that they are difficult to get right.

· The very first statement one must assess is “If economic globalisation is inevitable, it should primarily serve humanity rather than the interests of trans-national corporations.” There is no option to point out that thriving trans-national corporations are our means of generating the wealth and jobs and transmitting the goods and services necessary to serve humanity.
· My favourite, however, is that “"From each according to his ability, to each according to his need" is a fundamentally good idea.” to which I always reply that I Strongly Agree. It’s a brilliant idea, but totally impractical in the real world. Thus the Compass erroneously pushes me slightly more towards the Marxist camp than I deserve.
· An even more extreme example is “A significant advantage of a one-party state is that it avoids all the arguments that delay progress in a democratic political system.” I strongly agree, but I also strongly believe that the negatives far outweigh the positives. However, I am now pushed towards the Fascist camp. I see myself landing next to Stalin at this rate.
· “Mothers may have careers, but their first duty is to be homemakers.” This is true. It is also true of fathers, but nobody asks about them!
· “Astrology accurately explains many things.” Yep! But not in the way they mean!
· “No one can feel naturally homosexual.” No matter what one thinks of this, it is irrelevant. What matters is whether you think those who feel homosexual (naturally or not) should be treated equally within society.

Nonetheless, I think overall the test works okay. In the end I appear to be a true liberal – as the Libertarians say, people should be free of Government both in the bedroom and the boardroom. Rather than rubbing shoulders with Stalin or Ghandi, I’m nearer Murray Rothbard. Readers may not consider this a good thing!

I think my wife got the best result, though. She turned out to be slightly less authoritarian than the Dalai Lama!

I urge you to give the test a go. It’s fun and enlightening at the same time, and that’s a rare and valuable combination.

The error of labelling

I have begun to realise that I made a tragic mistake this year. I took to criticising one of my friends for being too "left-wing".

(Those of you who have assumed that the use of "liberal" in this site is in the American tradition are probably feeling somewhat disabused at this point!)

Up until a few years ago, my friend had been one of those people who thought a newspaper was something that was used to wrap up fish and chips. Lest you think I'm being harsh, I should stress that he took a sort of nihilistic pride in not watching the news or concerning himself with current affairs.

All this changed in the last few years. He vocally opposed the war in Iraq, and began to voice opinions about Human Rights and Third World poverty. To be fair, some of this had been hidden away in there for some time (he has been a lifelong member of Amnesty International) but since Iraq (and I would hazard because of Iraq) he has begun to give vent to his opinions.

I took issue with some of his more radical views, notably what I perceived as anti-Americanism and anti-globalisaiton. Unfortunately, in looking for a short-hand to define his views, I fell to pigeon-holing him as a member of the loony-left. I think this has backfired. It certainly has not help dissuade him. Instead, it has given him a focus for his views. He has begun to identify himself with the very left-wing factions into whose orbit I was most worried that he would be drawn.

I shouldn't over-play my hand here; his views were already forming and he was already tapping into sources with a decidedly socialist agenda. But nonetheless I think that by pigeon-holing him, I have encouraged him to read all the mail in that pigeon-hole, not just that originally addressed to him. I fear that as a result he is likely to begin to link himself with opinions and views that perhaps he might otherwise have approached with a more open mind.

I hope I've learnt a lesson. By labelling him, I have driven him into the very camp I was criticising.