Monday, November 10, 2008
Thursday, October 16, 2008
By 2050 Ed Miliband will be more than eighty years old and no longer in government. The new 80% target for greenhouse gas emission cuts is therefore not a standard that he will be judged by. It is just a way of striking a pose, and an absurd one. Since the Government came to power, and despite massive burdens being heaped on individuals and businesses, emissions have not fallen but increased by 1.6%.
The economy is in crisis with shares around the world still tumbling amid fears of a recession. Within Ed Miliband's own sphere of responsibility, Britain faces an energy crisis (PDF), with a huge gulf in capacity that will lead to blackouts unless urgent steps are taken. That the Government are still fiddling with meaningless targets while the economy burns shows how utterly broken our sytem of government is.
Cross-posted from the TaxPayers' Alliance blog.
Monday, October 13, 2008
We might have expected fuzzy concepts like 'happiness economics', and the idea that economic growth is overrated, would be dropped as the economic crisis bites and more tangible concerns return to the foreground of British politics. However, the BBC asks whether "with so many political certainties being shredded, perhaps there has never been a better time to take a long, hard look at what we want from our leaders."
The truth is that politicians can't deliver happiness. Even the smartest of academics don't really understand it. While some believe that it can be measured through surveys, which apparently correlate to certain activities in the brain, a study for the Institute of Economic Affairs highlighted how the results of those surveys don't just fail to correlate with income but also a range of other supposed social goods from longevity to gender equality to public spending and even rates of depresssion. They conclude that happiness data over time is "an extremely insensitive measure of welfare". This is because people are asked to rank their happiness in categories (from 'not happy' to 'very happy') that encourage an answer relative to other people around them and put an upper bound on each person's rating of their happiness while income is an absolute figure and can rise without limit.
If happiness can't even be measured reliably then trying to replace GDP with some measure of it is clearly a mistake. Politicians and bureaucrats will embrace all manner of measures to make us happier with no way of assessing results or understanding what really works. Dubious schemes will be supported with vast amounts of taxpayers' money, which it will be easy to justify taking on the grounds that people's money doesn't make them happy.
Of course, happiness isn't just a matter of what you are paid. However, money is the raw material that allows us to make all sorts of choices, including those that make us happy. The IEA study highlights the fact that more reliable, longitudinal data on happiness (that compares different people rather than different times) suggests that people are generally happier if they enjoy a stable family life, for example, and a comfortable income makes that easier.
In the end, the BBC's premise that we should think again about what we ask of our political leaders is a sensible one. However, instead of giving politicians an even broader mandate to try and make us wealthy or happy we should recognise that prosperity and happiness are things we have to build for ourselves. The ordinary taxpayer can use the money in their pocket to pursue wealth or happiness more effectively than politicians can on their behalf. We should stop asking politicians for more than any leader can deliver.
Sunday, October 05, 2008
Friday, October 03, 2008
At the Conservative and Labour conferences I spoke at events on the subject of food miles. The idea that consumers should pay great attention to the distance food has travelled from the producer to their plate. Food miles are one of those concepts that can sound important to some politicians and campaigners, who lack the experience and longevity in their posts to get to grips with the detail of issues like the environmental impacts of agriculture, as they make the complex issue of the externalities associated with producing food seem incredibly simple. In reality, things are more complex.
A study by Christopher Weber and H. Scott Matthews, at Carnegie Mellon University, describes how transport produces just a small portion of total emissions in producing agricultural goods. Transportation as a whole represents only 11% of life-cycle GHG emissions, and final delivery from producer to retail contributes only 4%. Other factors - from whether plants are grown in a heated greenhouse or under the sun to the amount of mechanisation needed - are far more important.
That is why Dr. Adrian Williams, of Cranfield University, described the concept of food miles as "unhelpful and stupid". Counting food miles will often mean getting your analysis of the environmental impacts of different products wrong. Air-freighted green beans from Kenya actually account for the emission of less carbon dioxide than British beans. Roses produced in the Netherlands and transported to Britain cause 35,000 kg of carbon emissions per 12,000 stems, against 600 kg of carbon emissions per 12,000 stems of Kenyan roses. The carbon footprint of NZ milk solids, lamb and apples (PDF) sold in the UK is up to four times lower than that of their locally produced equivalent, even if transport emissions are included.
The food miles myth endangers the livelihoods of many in the poor world. For example, according to the Kenyan High Commission in London, (PDF) the Kenyan horticultural industry supports around 135,000 Kenyans directly and many hundreds of thousands more indirectly, and the produce supplied to the UK alone generates at least £100m per year for Kenya. Organisations like Greenpeace that try to endorse the concept of food miles and fair trade at the same time are contradicting themselves.
It also hurts British consumers. Ordinary people are already struggling with rising food prices. These increases are, to a large extent, driven by hideously ineffective biofuel subsidies that have driven prices up by 75% according to the World Bank, costing $960 to $1,700 per tonne of CO2 saved according to the OECD. Consumers should not be asked to bear a further burden by ruling out the most cost-effective way of producing many foodstuffs (i.e. producing them abroad) which will further push up the price of food. Consumers health might also be put at risk if there is a smaller range of acceptable fruits and vegetables in many months where UK production is limited by our climate and consumption drops.
People who take food miles seriously risk hurting the interests of ordinary people here and in the Third World to little environmental end.
Cross-posted from the TaxPayers' Alliance blog.
Tuesday, September 23, 2008
"The writers revere Melville's original text, but their graphic novel-style version will change the structure. Gone is the first-person narration by the young seaman Ishmael, who observes how Ahab's obsession with killing the great white whale overwhelms his good judgment as captain.This change will allow them to depict the whale's decimation of other ships prior to its encounter with Ahab's Pequod, and Ahab will be depicted more as a charismatic leader than a brooding obsessive."Our vision isn't your grandfather's 'Moby Dick,' " Cooper said. "This is an opportunity to take a timeless classic and capitalize on the advances in visual effects to tell what at its core is an action-adventure revenge story.""
Saturday, September 20, 2008
"A few days ago I was presented with a report I'd asked for, a comprehensive audit, if you will, of our economic condition. You won't like it. I didn't like it. But we have to face the truth and then go to work to turn things around. And make no mistake about it, we can turn them around.
I'm not going to subject you to the jumble of charts, figures, and economic jargon of that audit, but rather will try to explain where we are, how we got there, and how we can get back."
In recent years spending, taxes and regulation have all increased and the money has been wasted on unreformed public services, long standing weaknesses in our transport infrastructure have not been addressed and we face an energy capacity crunch. All that left us chronically vulnerable with structural deficits and ongoing economic weakness outside the remarkably resilient financial services industry. A downturn in that industry has left us in huge trouble, the only major economy the OECD expects to see go into a recession this year, and likely to face a mushrooming deficit.
Curbing the rapid growth of public spending, the most important step to start addressing our long term economic problems, is going to mean treading on some toes. There will be many vested interests attached to our big state and overcoming them will require having the public on board. Making the scale of the challenge clear to the public but, at the same time, having a clear resolution to do something about the situation could earn a politician a lot of respect.
Friday, September 19, 2008
The calculator is attached to a report which goes through area after area showing that Gordon Brown's economic record has been utterly dismal. It should illustrate the context to the economic gloom and the OECD's prediction that Britain is the only major economy that will experience a recession this year. Brown hasn't been the unlucky victim of international conditions but the author of his own demise.
Sunday, September 14, 2008
The Sunday Times reports that Sharia courts are now in effect and their judgements are being enacted in British law. This is utter injustice:
"Siddiqi said that in a recent inheritance dispute handled by the court in Nuneaton, the estate of a Midlands man was divided between three daughters and two sons.
The judges on the panel gave the sons twice as much as the daughters, in accordance with sharia. Had the family gone to a normal British court, the daughters would have got equal amounts.
In the six cases of domestic violence, Siddiqi said the judges ordered the husbands to take anger management classes and mentoring from community elders. There was no further punishment.
In each case, the women subsequently withdrew the complaints they had lodged with the police and the police stopped their investigations."
These are not the fuzzy sort of judgements that apologists for the Archbishop promised would be the only ones Sharia courts could make. These are women being denied a fair share in inheritances or not having their complaints of domestic abuse followed up (after they have been pressured into accepting that they are not victims of a crime deserving of punishment). Even if their choice to use these courts was free they are signing away their legal rights as these judgements become binding and are enforced by conventional courts.
We have now created a situation where British Muslim women have to choose between their British rights or their Muslim ones. Anyone who has read the vital "Crimes of the community" (PDF) report by the Centre for Social Cohesion will know that such a choice is often far from free.
Equality before the law is dead. We might step in if some troublesome soul won't take no for an answer but otherwise many Britons now live by a different legal code to the rest of us. Such an important principle didn't die because the British public stopped caring about it or were too apathetic to make their voices heard. They reacted with utter fury at the suggestion that Sharia should be admitted as a part of British law. I'm not aware of any party manifesto ever having proposed integrating Sharia into the British legal system or even of any significant politician endorsing the idea in public.
It just sort of happened. Just like the recognition of polygamous marriages or countless other surrenders of our values that the British people never endorsed. It came about thanks to a combination of a lack of proper scrutiny of laws, this clearly isn't what the Arbitration Act was intended for, and a feeble establishment desperate for the false sense of security that can be had by appeasing those demanding Sharia.
We need a democratic revival or Britain's most cherished values are at risk.
Wednesday, September 10, 2008
Volvo estates are some of the hardest hit cars in the Government's Vehicle Excise Duty hike, Labradors are being turfed out of bed and breakfasts thanks to ludicrous EU food safety regulation and now Government reports are attacking our right to have gardens with lawns.
Our very identity is under attack.
Sunday, September 07, 2008
The Large Hadron Collider (LHC) begins operations this week. It has drawn criticism from Sir David King:
"The project has drawn more down-to-Earth criticisms too. Sir David King, the government's former chief science adviser, believes it diverts top scientists away from tackling the more pressing issues of the time, such as climate change and how to decarbonise the economy. In total Britain has contributed more than £500m towards the LHC project."
Okay, let's compare what we're spending and what we're getting for our money with the LHC and just one of the Government's flagship policies aimed at 'decarbonising the economy'.
Our spending on the LHC has been around £500 million over more than ten years, making up around 10% of the programme's total budget. For that money we make a vital contribution to this project:
"Beneath the rural tranquillity of the Geneva countryside, where ramshackle sheds dot the wide-open fields, scientists are getting ready for a trip into the unknown. Here, under 100 metres of rock and sandstone, lies the biggest, most complex machine humans have ever built, and on Wednesday they will finally get to turn it on.
For Cern, the European nuclear research organisation, it will mark the end of a lengthy wait and the beginning of a new era of physics. Over the next 20 years or so, the $9bn (£5bn) machine will direct its formidable power towards some of the most enduring mysteries of the universe.
The machine will search for extra dimensions, which could be curled up into microscopic loops. It might produce "dark matter", the unknown substance that stretches through space like an invisible skeleton. And it will almost certainly discover the elusive Higgs boson, which helps explain the origin of mass, and is better known by its wince-inducing monicker, the God particle.
At least that is the hope. For the machine to work a dizzying number of electronic circuits, computer-controlled valves, airtight seals and superconducting magnets must all work in concert.
The machine is called the Large Hadron Collider (LHC), and when working at full tilt it will drive two beams of particles in opposite directions around a 17 mile (27km) ring at 99.9999991% of the speed of light. Every second each of the beams will complete 11,245 laps of the machine.
At four points around the ring the beams will be steered into head-on collisions, causing the particles to slam into one another with enough energy to recreate in a microcosm the violent fireball conditions that existed one trillionth of a second after the big bang. Giant detectors, one of which is so enormous it sits in a cavern that could accommodate the nave of Westminster Abbey, will then scrutinise the shower of subatomic debris in the hope of finding something no one has ever seen before."
Absolutely remarkable. Up there with the Apollo programme and Concorde as one of the greatest technological achievements of mankind. Something that stands a good chance of providing vital insights into the nature of the universe and making possible huge technological advances.
By contrast, we spend around £1 billion every year on the Renewables Obligation (RO). A substantial burden on ordinary families paying their electricity bills. In return, we get unreliable windmills that contribute little to providing the generating capacity we need or reducing greenhouse gas emissions, as the quantity of power produced is so small and unreliable and back up capacity needs to get turned on and off, reducing its efficiency. The main effect of the RO is to turn ordinary people's money into bumper profits for the renewable energy companies.
Of course, this is just one part of the package of measures designed to reduce emissions. However, as a scheme which offers as expensive and poor value as the RO has been put in place the idea that greenhouse gas reduction policies are suffering because they aren't getting sufficient priority compared to the LHC seems somewhat absurd.
In terms of value for money, I'd take the Large Hadron Collider over the Renewables Obligation any day of the week.
http://view.break.com/565864 - Watch more free videos
"Campbell Dunford, a former international energy banker, now Chief Executive of the Renewable Energy Foundation, said:“There are two parallel debates here. On the one hand the energy experts tearing their hair out with anxiety, and on the other the bland Westminster discussion typified by the Prime Minister’s empty and trivial gestures. This must change. Only courageous leadership can prepare us for the gathering storm. Will Mr Cameron speak up and confront the realities, or will the realities get there first?”
Saturday, September 06, 2008
"Last night Charles Hendry, the Conservative shadow energy minister, accused the government of using the scheme as a "stealth tax" and warned it would further damage public confidence in environmental measures."
Friday, September 05, 2008
Tuesday, September 02, 2008
There are measures to help out some families facing repossession but the headline policy is that for a year the stamp duty threshold has been raised from £125,000 to £175,000. Stamp duty works on a slab basis so all this is meaningless for any home purchase outside that band (i.e. most homes in London and the South East). Putting this plan into action will cost around £600 million.
It won't do much to help the property market. There are too many other, much more important, variables at play. As Chris Dillow has shown Lamont's stamp duty holiday didn't do much for the market in 1992.
There is no particular reason why the Government should want to prop up house prices anyway. High prices that kept young people off the ladder were hardly a great social boon.
Does that mean pushing the threshold up is a bad idea?
Not really. This will, at a fairly low cost in the grand scheme of things, be a considerable boon to a lot of young families on the early rungs of the housing ladder. They will be able to keep £1,750 of their own money that the Government would otherwise have purloined. People in that situation often have a great many financial strains: taking care of a growing family or just furnishing their new home. £1,750 would make their lives significantly easier and helping them out is a legitimate social objective.
Nick Robinson asks "who pays?"
Well, at last year's budget public spending was increased by around £30 billion. There is a problem with the deficit but to ask "who pays?" about a puny little £0.6 billion tax cut when a spending rise that is around fifty times as large has been pushed through each year for the last five years clearly completely misses the point.
Some of that increased spending would be hard to avoid in an economic downturn, such as benefits, and inflation obviously pushes up spending as well. The main cause of increases in spending, though, is the decisions made in the various budgets and spending reviews. Those are the decisions that ate up economic growth and the proceeds of tax rises year after year and created the current deficits. Not the few shoddy tax cuts we've enjoyed. The Government can easily fund this tax cut if they stop growing public spending so quickly.
In the end, the problem with these tax cuts isn't that they won't do much to help the housing market or that they can't be funded. It's that this pissant tax cut doesn't even approach the kind of scale that would be needed to make a dent after a decade of rising taxes. That's the proper criticism of the proposal advanced today.
Monday, September 01, 2008
It spends a lot of time discussing the amount of information offered to consumers. The NCC want more and clearer labelling setting out the amount of salt, sugar, fat and other unhealthy things in each product. That is a reasonable thing to lobby for and if you look at the report cards you'll see that most of the supermarkets are making progress in the area - either in their colour codes on the front or in the GDAs on the back.
The negative headline on the report comes from their other priority, which is that supermarkets should stop making unhealthy products generally alluring. For that reason, they are opposed to promotions for unhealthy products and stores that stock sweets at the counter. Many of the shops are doing worse on that measure. They keep having the temerity to offer me half price Coke and offer sweets at the till.
That is where the contradiction appears. If you think that labelling is important then you are assuming that people are good at making decisions about the kind of food they eat. That they care about their health and, if properly informed, know how to eat healthily. Or, you think that people should be free to decide for themselves how important healthy eating is to them. That's why you value giving them information, it allows them to make as much use of their remarkable ability to decide for themselves as possible.
By contrast, if you think that having sweets at the counter, or offering people discounts, will cause them to want things they shouldn't, and we should intervene to stop that happening, then you don't really respect their ability to decide for themselves at all. You think they're simpletons who can't possibly decide for themselves or are so pathetically vulnerable to pester power that they will be terrorised unless you hide the jelly babies in the corner. When Sainsburys take a pound off the price of my Coke they make me worse off.
The report tries to take both positions.
Despite this report being a mish-mash of contradictions and dismal, patronising paternalism I paid for it, so did you. It's a quango. Just like the equally awful energywatch. Why can't these bodies be scrapped? If anyone really wants this bilge to be produced they can fund it themselves
The Daily Mash calls the report just right:
"BRITAIN'S supermarkets were last night accused of stocking the products their customers want to buy.
The National Consumer Council claimed the stores are deliberately selling a range of items that are not only competitively priced but tasted lovely.
"Meanwhile they go around filling their fruit and veg aisles with thousands of deadly scorpions. Probably."
A spokesman for Asda said: "The National Consumer Council seems to have confused us with something that is not a business."
Saturday, August 30, 2008
The first thing to note is that, while Western Europe is in an unenviable position relying on Russia for its gas, the Russian position isn't quite as strong as it looks. Each time oil and gas resources are used as a weapon they lose their impact. By making it clear that supplies aren't reliable you encourage your customer to put more effort into seeking alternatives or other sources of supply.
There is no doubt that recent Kremlin bolshiness has strengthened the case for Western Europe to revive its nuclear industry, for example, which could well mean threats to the gas supply are less potent next time around. We can only hope that there is someone in the European political elite with the basic strategic vision needed. Business, at least, will probably put more effort into exploiting alternative sources of hydrocarbons like Canadian tar sands.
The major problem with Leggett's article is that he sees renewables as part of the solution, rather than part of the problem. In reality, one of the reasons why Britain is in such trouble is that over the last ten years we've had a Government with a fondness for airy, unrealistic fantasies that renewables can provide a substantial portion of the electricity we need. Our energy policy has been based, for a decade, on the ludicrous idea that a combination of gas and renewable energy can provide the stable, affordable and secure capacity we need.
While renewables can provide power, albeit often at great cost, their unreliability means they can't provide significant capacity when you need it (peak load capacity). The situation is stated pretty clearly in this REF report (PDF, pg. 94). As such, their contribution to energy security is negligible. If Russia were to cut off the gas all the wind power in the world would do pretty much nothing stop the lights going out on a cold evening. Other renewables have, at present, a limited ability to provide remotely affordable power. Unless unreliable or exceptionally expensive electricity is felt to be acceptable renewables can't deliver energy security.
So long as politicians listen to people like Jeremy Leggett, and his renewable energy fairy tales, serious solutions like Enhanced Oil Recovery in the North Sea and building coal and nuclear capacity won't get the attention they deserve. By the time we wake up, it might be too late.
Thursday, August 28, 2008
The response to the study has generally been incredibly positive. However, there have been a few challenges on the blogs and on the media. I've responded to Friends of the Earth and the Treasury at the TPA website and to some critiques on CentreRight.Com on that website.
Wednesday, August 27, 2008
Tuesday, August 19, 2008
"Read my lips: there is no shortage of landfill sites. There is a shortage of landfill capacity, which is a wholly different thing. And that is entirely because of the EU's landfill directive which imposes severe constraints on the use of landfill as a waste disposal option.
We actually dealt with this issue in an earlier piece, where we relied on another blogger who had done the maths, demonstrating unequivocally that landfill sites are actually being generated faster than we could fill them.
That lack of knowledge also pervades the rest of his story. He writes uncritically of the government being "so confident that anaerobic digesters offer a realistic means of dealing with food waste that earlier this year it offered £10 million in grants to encourage the construction of further demonstrator plants. Plans for at least 60 are under way in Britain."
This we dealt with in a story last January when I set out a dire tale about how private enterprises had embraced anaerobic digesters as an admirable solution to organic waste disposal, only to have the economics of their systems wrecked by the dead hand of the Environment Agency.
The EA insisted on classifying these systems as "scheduled processes" – under an EU directive – and then charging exorbitant "authorisation" and "subsistence" fees which, with the stultifying and time-consuming bureaucracy involved, ensured that few digesters were installed. Those that were quickly became disused simply because, under the burden of regulation, they were too expensive to operate.
So, now that the government has effectively priced the system out of the market, it is offering public money – our money – to encourage the use of a well-tried and working technology that it, itself, has hamstrung."
Sunday, August 17, 2008
The recent instalment (PDF) of the Policy Exchange 'Cities Unlimited' series has provoked quite a reaction. There has been predictable fury from Northerners who don't take kindly to being told that we should accept their cities' decline. Southerners don't exactly see further expansion of the towns in their densely populated region as much of a reward for their economic success. Some of them rather dislike the idea of a deluge of Northerners. Those two reactions left little doubt about what the political response would be and sure enough both Conservative and Labour politicians have condemned the report in colourful terms.
Cities Unlimited deserves a more thoughtful reception. None of the 'rebuttals' offered by various politicians and commentators really stand up to scrutiny.
Some cite new investments as a sign that cities are regenerating. If they read the report they would see that the central case the authors are making is that investments haven't translated into lasting economic progress. An example they cite is the billions of pounds of Nissan investment in Sunderland. Citing more investments without showing those translating into increased prosperity, best measured through value added per person is pretty meaningless. All you're doing is strengthening the report's case that the cities have received substantial investment but failed to translate that into sustained greater incomes.
Others have pointed to an improving employment record in some areas, which creates more questions for the apologists for recent Northern economic performance than it answers. Why has a strong employment record not translated into higher incomes? An obvious answer would be that the employment is all being created in low value occupations, perhaps because the workforce in these cities doesn't contain enough high skilled workers. Unemployment figures are also easily distorted by the switch to incapacity benefit and employment figures by large scale immigration.
Challenging the report by arguing that regeneration policy has been a brilliant success isn't going to work. The empirical case in the report is solid. We've been spending a fortune for years and the income gap between the regions is expanding rather than contracting. There isn't really any way of talking around that.
To put all this in perspective, there is another case of a region that, over more than fifty years, failed to catch up with a richer rival's 25% greater income per head, with the gap actually widening to 27%. Eddie Hunt in 1986 studied historical pay for agricultural workers in different parts of Britain (the study is behind the academic firewall, I'm afraid). Agricultural pay isn't a perfect proxy but should give us a reasonable idea of general incomes in those areas as agriculture had to match levels of pay in other industries in order to attract workers. In 1976-1770 Buckinghamshire was 23% richer than Lancashire. With the advent of the Industrial Revolution, by 1794-1795, Lancashire overtook its Southern rival and between 1833 -1845 and 1898 the gap in incomes between poor Buckinghamshire and rich Lancashire actually rose by 4 s. 2 d.
Clearly something has changed the economic fortunes of the two counties not once, but twice. It certainly wasn't regeneration spending. First, Buckinghamshire lost its old lead with the advent of the Industrial Revolution and Lancashire was richer for the best part of two hundred years. After that, we know that Buckinghamshire joined in the success of the South East of England in the twentieth century while Lancashire became one of the poorer areas whose problems Cities Unlimited is addressing.
The report puts those changes down to economic geography. The period of Lancashire's success coincided with the importance particularly of coal and ports that could bring in cotton. Buckinghamshire now does well thanks to, particularly, its proximity to London.
The report establishes pretty conclusively that current policy isn't effectively addressing regional inequalities. Its case that some areas of the country have failed to replace the old staple industries is also clearly correct. The argument that new policies cannot be more effective in turning these areas around is, I think, less convincing. I don't think that the fortunes of areas are determined by the geographical hand they are dealt to the extent the report suggests.
Eastern Europe lost its old economic raison d'etre in the early nineties as the Eastern bloc fell to pieces and its manufacturing base collapsed. Estonia's success would, I think, be hard to predict from its geography. Equally, Ireland's economic geography hasn't fundamentally changed recently to turn it from a perennial no-hoper to the Celtic tiger. In both Eastern Europe and Ireland it isn't economic geography that has changed but policy. In particular, market reforms in Eastern Europe including the flat tax and cuts in corporate tax in Ireland (Benjamin Powell, for CATO, sets out how it wasn't EU subsidies that made Ireland rich). In 1993 GDP per capita in Britain was 28% higher than in Ireland, today the situation is reversed and Ireland enjoys a GDP per capita 20% higher than we do in Britain.
Those two examples suggest that it is eminently possible for policy reforms to turn regions around, even those like Eastern Europe with few obvious geographical advantages. In order for us to accept the Policy Exchange report's analysis that some regions decline is essentially irreversible we need to ask whether it is plausible that new policies can create a radical turnaround.
David B Smith, in a paper (PDF) for the Economic Research Council, sets out the status quo: Many of Britain's poorer regions can hardly be considered market economies. Public spending is 58% of the North East's GDP, against 31% in the South East. 24% of the workforce in the North East works in the public sector against 18% in the South East. Thanks to the black market it is thought that the state only controlled about 75% of the economy in the Soviet Union. In terms of the importance of public spending, Sunderland has more in common with the Soviet Union than Kent.
Other government policies also weigh more heavily on poorer regions. If you scaled the £5.35 minimum wage in 2006 to median earnings it would be £4.78 in the North East and £6.90 in London. This means that the minimum wage will have far more of an effect on employment in poorer areas. Italy's Mezzorgiorno and East Germany have had similar problems as labour market regulations and non-wage labour costs that richer regions can sustain do far greater harm in poorer areas.
Entrepreneurial activity is directed towards politics rather than capitalist enterprise. As David B Smith says, the high government spending regions "seem to produce large numbers of political entrepreneurs, who live off and lobby for a large state, but few of the traditional wealth creating kind".
Welfare dependency has nasty effects on people. Psychology has found it encourages the pursuit of instant gratification. This plays into high levels of drug and alcohol abuse in populations with large numbers of people on benefits. That might be one reason for the large number of incapacity benefit claimants in struggling towns.
Private sector employers have to compete with the public sector for staff. Centralised pay bargaining means that in poorer areas private sector firms struggle to compete with public sector salaries funded by the rich South.
Beyond that, the relatively high burden of personal and corporate taxes makes the North a more expensive place to do business. In particular, our corporate taxes are now above the average in the OECD. This stops the South, with its many advantages, fulfilling its full economic potential. Worse, it could clearly have a crippling effect on the North that more often competes with developing countries, which tend to have lower corporate tax rates.
The essence of the Policy Exchange report is that regeneration efforts have failed to resuscitate the economy in many old Industrial towns. That regeneration policy is premised on the idea that the market economy is failing, and needs help from the state. If we accept the reality of the situation, that a combination of massive state intervention and taxes that discourage private investment has left an economy that is more public than private sector, then we might start from a very different premise.
Cities Unlimited suggests that some Northern towns now don't have a raison d'etre. I disagree. There are plenty of ingenious people in even the most struggling towns and they'll find something to do, some reason to be. The problem is that the massive Southern subsidy, combined with taxes and regulations that choke business enterprises, channels the ingenuity of the North's brightest into lobbying for greater funds from the government. That is now the North's economic raison d'etre. A mind blogging array of government bodies has the ability to disperse lucrative grants and chasing them can be far more lucrative than plugging away at building a business. William Baumol wrote that the growth miracle of capitalism was founded on channelling entrepreneurship to productive ends, to enterprising activity that would make us all better off. An array of taxes, regulations and subsidies may have ended that in the North, is it any wonder that the region's economic performance has been poor?
If we want to see real improvements then we need to change that. Fiscal decentralisation, as the report recommends, could encourage regional self-reliance and, if done properly, allow enterprising towns to slash taxes and show others the way. You could scrap the RDAs (PDF) and cut 4% off the small business rate. That would do a lot of enterprising souls some good and make setting up a new firm seem like a significantly better idea. You could make phased, pre-announced cuts of 2% to the 12.5% corporate tax rate (PDF) they have in Ireland. The economic effects across the country would be incredible, boosting incomes, investment and, over time, even corporate tax revenue. The boost to competitiveness would be particularly welcome in poorer parts of the country. It would be a swine to get past the unions but ending centralised pay bargaining would save lives in the South and make it easier for the private sector to compete for workers in the North.
All those policies would create more room for the private sector to grow in the North. They would increase the rewards to enterprising souls who decided to found businesses instead of trying to seize on the taxpayers' chequebook. They might make it possible for the North to join the long list of regions from around the world that have turned their fortunes around and gone on to become incredible success stories.
The steady increase in population in the South and decrease in the North causes a series of strains. Political institutions can't keep up and various services wind up under or over resourced in different parts of the country. There is additional pressure on the countryside in an increasingly densely populated South of England which can only be partially alleviated by some of the sensible steps Cities Unlimited recommends, such as allowing industrial land to be used to build residential property.
No one wants to give up on turning around the decline of old Industrial cities if we don't have to. While the authors of Cities Unlimited have done a good job of illustrating the weaknesses of current regional policy, I'm not convinced that there aren't better policies that could see the Northern cities prosperous again.
Wednesday, August 13, 2008
"This is a divide that goes deeper than economics into the way people perceive the world. If you show an American an image of a fish tank, the American will usually describe the biggest fish in the tank and what it is doing. If you ask a Chinese person to describe a fish tank,the Chinese will usually describe the context in which the fish swim.
These sorts of experiments have been done over and over again, and the results reveal the same underlying pattern. Americans usually see individuals; Chinese and other Asians see contexts."
Brooks goes on to describe how there is a continuum and we Brits are right at the individualist end with the Americans.
It sounds like we are culturally hard wired to what Chris would, I think, describe as an egoist way of understanding the world; the belief that our individual choices, actions and qualities are a crucial determinant of group success. Previously he has described how he would like his epitaph to read "he made no difference." This might make sense to someone from a more collectivist culture. Brooks describes how "[people in collectivist societies] tend to underestimate their own skills and are more self-effacing when describing their contributions to group efforts."
By contrast, Anglos are apparently disposed to want to make all the difference, and believe that they can do so effectively.
All this creates a conundrum for someone like Chris who combines a taste for liberal policy with a dislike of the kind of egoism that we are predisposed towards. Individualistic (egoistic) countries aren't just generally more prosperous, they also "tend to put rights and privacy first". If it is our sense of self-importance that makes us more protective of individual rights then are our inflated egos worth the various social ills Chris blames them for?
Tuesday, August 12, 2008
Sunday, August 10, 2008
"After years of dereliction, when only a crash programme of measures could keep our lights on and our economy functioning, our policy has become so skewed by blinkered environmentalism and diktats from the EU that we are fast heading for the worst of all worlds - a near-total dependence on foreign sources of energy which will not only be astronomically expensive but which can in no way be guaranteed to supply all the electricity we need."
Read the rest of the article. If you want to learn more this article from John Constable is a good place to start, along with the REF's 2006 briefing in response to the energy review. EU Referendum and City Unslicker are also writing a lot on the issue.
Saturday, August 09, 2008
"Russia may have provoked this crisis, and one may be properly critical of, indeed deplore, many aspects of recent Russian policy in the Caucasus or the Ukraine, but the immediate responsibility for this crisis must be borne by Tbilisi."
On that logic you could hold Britain responsible for the 1939 outbreak of war with Germany after they invaded Poland. You might even hold us responsible for the Falklands. In both cases there were massive provocations, including the invasion of our sovereignty, but we were the ones who turned it into a war.
Edward Lucas, in the Times, characterises the current situation like this, and Alex doesn't appear to disagree:
"In short, it looks more and more as though Georgia has fallen in to its enemies' trap. The script went like this: first mount unbearable provocations, then wait for a response, and finally reply with overwhelming military force and diplomatic humiliation."
Svante Cornell, in the Guardian, provides a more detailed description:
"In recent years, the Kremlin had escalated its interference in Georgia's territories of Abkhazia and South Ossetia - bombing Georgian territory twice last year, illegally extending Russian citizenship to residents there, and appointing Russian
security officers to their self-declared governments. South Ossetia's government in particular is practically under Moscow's direct control, with little if any ability to act independently.
But this flare-up is a direct consequence of Russia's deliberate and recent efforts to engage its small neighbor in military conflict. In April, Russia's President Vladimir Putin signed a decree effectively beginning to treat Abkhazia and South Ossetia as parts of the Russian Federation. This land grab was a particularly galling move because Russia is in charge of both the peacekeeping operations in the conflict zones, and the negotiations over their political resolution. The mediator had now clearly become a direct party to the conflict.
Moscow then sent paratroopers, heavy weapons and other troops into Abkhazia. Although these measures constituted military occupation of Georgian territory, Georgia failed to respond militarily. Instead, with European aspirations in mind, Georgian leaders listened to western calls for restraint, and put their faith in half-hearted western diplomatic initiatives."
Of course, the immediate responsibility still lies with Georgia...
Also, there is this:
"As I say, there's plenty to dislike about recent Russian policy, but one thing might also be worth remembering: the Osettians (and the Abkhazians) want to be Russian, not Georgian. This may seem daft or incomprehensible to many people, but there it is anyway and one might think it something worth mentioning from time to time even if, clearly, it's also an inconvenient truth."
Russia isn't really looking to make them independent or a part of Russia. Keeping South Ossetia as a permanent thorn in Georgia's side, creating a permanent confrontation that prevents their neighbour saying no to Russia's "influence" is the objective. No side in this conflict is really fighting for South Ossetians' self-determination. Given the chaotic ethnic mix of many countries in that region, particularly Russia, it's questionable how such a principle could really function anyway.
Georgia is part of that grand sphere the Kremlin feels it has a right to control. South Ossetia and Abkhazia are the mechanism to exert that control. The two Georgian regions are being maintained in a permanent state of limbo, nominally still a part of Georgia but effectively controlled by a combination of militant separatists and the Russian military. That permanent instability makes it incredibly difficult for Georgia to engage independently with the outside world as Western nations with perilously little spine left are scared off engaging.
There have been steady attacks on Georgia from separatists, from the Washington Post:
“Georgia, meanwhile, said that its troops entered the South Ossetian "capital" in response to escalating attacks, which have been intensifying for a week -- and have been taking place for years, really -- as well as the Russian aerial bombardment of Georgian territory.”
The majority of Russian passport holders that we keep hearing about are no accident, from the Wall Street Journal:
“Russia in recent years has also granted citizenship to the separatists. That looks like premeditation now: Russian President Dmitry Medvedev pledged yesterday to “protect the lives and dignity of Russian citizens, no matter where they are located.”
It is hard to imagine how Georgia can come out of this current conflict well. The separatists will probably become even more secure in South Ossetia. Our vacillation has created an ugly situation that we will struggle to rescue. Anne Applebaum in the Washington Post concludes:
"In any case, the time to deal with this conflict is not now but was two, or even four, years ago. For a very long time it has been clear that there was a security vacuum in the Caucasus; that this vacuum was dangerous; that war was likely; that Georgia, an eager ally of the United States, would not emerge well from a confrontation; and that a successful invasion of Georgia, a country with U.S. troops on its soil, would reflect badly on the West. Cowardice, weakness, lack of ideas and, above all, the distraction of other events prevented any deeper engagement. And now it may be too late."
However, Georgia's cause is not one we should abandon, from the Washington Post:
“The principles at stake, including sovereignty and territorial integrity, apply well beyond the Caucasus. To abandon Georgia and its fragile democratic Rose Revolution would send a terrible signal to other former Soviet and Warsaw Pact republics that to Moscow's dismay have achieved or are working toward democracy and fully independent foreign policies. The West has made that sort of mistake before and must not do so again."
Tuesday, August 05, 2008
"Many have argued that capitalism does not offer a satisfactory moral message. But that is like saying that calculus does not contain cabrohydrates, amino acids, or other essential nutrients. Everything fails by irrevelant standards."
Monday, August 04, 2008
Saturday, August 02, 2008
"Among these treasures of our land is water - fast becoming our most valuable, most prized, most critical resource."
"Thousands have lived without love, not one without water."
"Glendower: I can call spirits from the vasty deep.
Hotspur: Why, so can I, or so can an man; but will they come when you do call for them?"
That burst of enthusiasm out of the way they get back to EU water safety law.
Friday, August 01, 2008
I've written a post for the TPA blog making the case against a windfall tax. Chris Dillow does the same, from a more left wing perspective, over at his blog, Stumbling and Mumbling. A windfall tax would hurt the incentive to invest in really important energy infrastructure and is an awful, awful idea.
Thursday, July 31, 2008
In 2007/08 the police recorded 1,899 incidents of rape of a child under the age of 13.
That's far higher than I would have expected, the high hundreds at most. At work, I asked around and everyone else was equally shocked. The number is particularly high when you bear in mind that it is recorded crime and, as we are talking about a sexual offence, almost certainly a severe underestimate.
Now, a common theory for why the public see crime as such a serious issue is that they overestimate its prevalence because of sensationalist news reporting. We see the reports and assume they represent a broader pattern, fall victim to the distortions of the availability heuristic.
If an entire office of people with plenty of exposure to the right-wing press could make the opposite error about a crime that is clearly, in a horrible way, sensational doesn't that raise some broader questions about that hypothesis?
Wednesday, July 30, 2008
In recent months there has been a lot of discussion about how the Government might help people facing high energy prices. The unions, politicians and various campaigners have called for a crackdown on energy companies they accuse of profiteering.
Yesterday, the Renewable Energy foundation revealed that the Government's own environmental policies are a major component of the price of energy:
Despite this massive cost the regulations are projected to achieve very little. The Renewables Obligation is expected to cut emissions by just 1.6% at an incredible cost of £400 per tonne of carbon emissions saved.
Most of these climate change policies, from the Renewables Obligation to the European Union Emissions Trading Scheme, have been introduced since the current Government came to power. They have been major drivers of the rises in energy prices. While politicians single out energy companies for criticism they keep quiet about their own complicity in rising prices.
With Ofgem confident that our energy market is reasonably competitive isn't hounding electricity companies just a crude attempt to displace popular resentment of high prices? If the Government were really committed to bringing down prices it could easily do so by scrapping some of these ineffective climate change regulations.
Cross-posted from the TaxPayers' Alliance blog.
Tuesday, July 29, 2008
One of his first posts is about the quality of Obama's oratory. Charles isn't impressed. I also felt a bit let down when I first watched an Obama speech at length and then saw his faltering performances in Q & As.
It might well be a difference in the style each nation expects. Obama is a superb example of the preacher-like style of American political speech. That style is forged as a way to deliver an uninterrupted speech heavy on moral content. By contrast, Britons are used to political rhetoric forged in active debate whether in parliament and the courts or in university sparring. That makes British political speech lighter footed and sharper but often less weighty.
Monday, July 28, 2008
"With less than two years remaining until the next general election, Britain’s Conservative Party has surged to an historic 22-point opinion-poll lead over the incumbent Labour Party. This turnabout has followed an energetic campaign by the Tory leader, David Cameron, to wrench the party out of its ideological comfort zone and overhaul its public image. Cameron has indeed handled many issues deftly. However, his initial attempt to spark a bidding war over climate alarmism backfired enormously, and it should serve as a warning to other Western political parties that are trying to burnish their green credentials."
Sunday, July 27, 2008
"Imagine writing this: “It is my belief we are standing on the very edge of history.” Having written it, what would a normal, sensitive, moderately intelligent person do? Well, 99% of us wouldpush the delete button with a faint shiver or tear up the piece of paper so that the young and impressionable couldn’t read it. We understand that it’s utter bilge, but, you see, that’s why we’re not scriptwriters. It takes a very special person to write that sentence and think: “Yes, high five, nice job, really profound! What shall I do next?”
Saturday, July 26, 2008
I'm no scientist but I know enough to be pretty confident this film isn't going to enlighten anyone. It dresses up the speculative fringe of climate science as the absolute truth. "Runaway climate change is upon us", apparently, if everyone doesn't sign up to 'Kyoto 2'. The only character in the film who is a scientist, an academic from Oxford, tells us that is because methane deposits are going to be released unless we meet a 5 to 10 year deadline for curbs in emissions.
Let's see what the Met Office's Hadley Centre, definitely part of the alarmist scientific 'consensus' says about possible releases of methane:
"Substantial quantities of methane are emitted naturally from wetlands, and this emission is expected to change as wetlands change. Changing rainfall patterns will cause some wetland areas to increase in extent, others to decrease, and increases in temperature will act to increase emissions from wetlands. One version of the Hadley Centre climate model includes a description of wetland methane, and this predicts an increase in natural wetland emissions by the end of the century equivalent to the amount of man-made emissions projected for that time, thus leading to a more rapid rise in methane concentrations, and hence warming.
On the other hand, the chemical reactions in the atmosphere which destroy methane are expected to become more efficient in future, largely as a result of increased water vapour. This will act as a negative feedback on methane amounts.
Methane is also stored in permafrost, and it is likely that some of this will be released as surface warming extends into the permafrost and begins to melt it.
Finally, huge amounts of methane are locked up in methane hydrates methane clathrates) in the oceans. They are currently at high enough pressures and temperatures to make them very stable. However, penetration of greenhouse effect heating into the oceans may destabilise them and allow some of the methane to escape into the atmosphere. The potential for this to happen is very poorly understood. There is concern that this may be another positive feedback not yet included in models, although there is little evidence for this from the behaviour of methane during the large temperature swings between ice ages and interglacials, and in particular over the last 50,000 years."
This bears no relation at all to the 'science' in Burn Up. There is no suggestion here that we face an imminent threat of runaway clmate change. Apocalyptic methane releases don't appear to have occured in previous, natural warmings. Most people watching Burn Up won't know how speculative the film's vision of imminent, methane-driven climate catastrophe is. No character in the film questions the idea.
Burn Up isn't really trying to enlighten people but, like Al Gore's film, to create an emotional reaction. To scare people so that rational and measured debate over policy can safely be avoided, so that proper scrutiny of policy can be written off as irresponsible and immoral.
In the first part of Burn Up, in particular, the Inuit are crucial to the story. A campaigner for their cause protests to the film's central character, Tom - head of Arrow Oil, and then, having lost in a legal case suing Arrow for climate change-related harms to the Inuit people, burns herself to death on the court's steps.
This is brutal stuff and , of course, climate change could create challenges for a people whose way of life is so intimately related to particular conditions. However, just a little research confirms that the film utterly distorts the true nature of the problems facing the Inuit.
There is little sign that the destruction of the Artic habitat is really taking place on anything like the scale that is being suggested. Polar bear numbers are still robust, this is from the Telegraph:
"A survey of the animals' numbers in Canada's eastern Arctic has
revealed that they are thriving, not declining, because of mankind's
interference in the environment.
In the Davis Strait area, a 140,000-square kilometre region, the
polar bear population has grown from 850 in the mid-1980s to 2,100
"There aren't just a few more bears. There are a hell of a lot more
bears," said Mitch Taylor, a polar bear biologist who has spent 20 years
studying the animals.
His findings back the claims of Inuit hunters who have long claimed
that they were seeing more bears."
Their numbers wouldn't be as strong if the number of seals was in serious decline. Life in the Arctic appears to be in solid shape at the moment.
I know Wikipedia isn't the most reliable of sources on this particular issue but it is probably correct when it suggests that the major problems facing the Inuit are those faced by many North American aboriginal peoples:
"Inuit communities in Canada continue to suffer under crushing unemployment, overcrowded housing, substance abuse, crime, violence and suicide. The problems Inuit face in the 21st century should not be underestimated. However, many Inuit are upbeat about the future. Arguably, their situation is better than it has been since the 14th century."
That is what makes all this focus on climate change so dangerous for peoples like the Inuit. They have huge social problems and it would be far too easy to forget the genuine issues in a mad rush to co-opt them into a grand narrative around global warming.
Once again, the idea that the number of hurricanes and other natural disasters is massively on the increase was brought up. It can't be repeated enough that increases in insurance industry claims are not necessarily a sign of increased damage but, more often, a sign of increased development (meaning there is more valuable stuff to be damaged) and increased take-up of insurance (the stuff damaged is more likely to be insured).
I've written before about the actual data on hurricanes and how the best indicators we have are that we are currently seeing particularly low levels of hurricane activity. Beyond that, Indur Goklany, in the excellent Civil Society Report on Climate Change (PDF), shows that deaths from natural disasters have massively declined over the course of the twentieth and early twenty-first centuries. Figure 6, on page 48, really says it all (the low numbers pre-1920 are almost certainly the result of poor data).
More prosperous, more technologically advanced and more democratic societies are better able, and have more of an incentive, to help those facing a natural disaster and they do a very good job. We do not have increasing difficulty coping with natural disasters and the best way to help the poor world enjoy the security we do is to promote the institutions that can deliver a prosperous and democratic society.
This film was shot through with anti-Americanism. The evil characters are portrayed wearing cowboy hats, getting teary eyed over faith healing TV and doing all the other things snobbish Europeans like to laugh at.
Their democratic process is portrayed as an utter joke. A Senate hearing falls to pieces in a flurry of sordid ad hominem. Their political parties have been bought by the oil firms. None of this reflects reality but it is a comforting way for Burn Up to write American resistance to the Kyoto-plus agenda off as venal. At the same time the programme potrays we British heroically promising to wreck our economy to satisfy the green agenda - at one point we even promise to send so much money to China that country will profit from restricting emissions.
There are a breathtaking number of conspiracy theories in this film. The Department of Defense have a study that they're covering up which shows the harms of climate change and plans to take water from the Mexicans. The Saudis are concealing the fact they've pretty much run out of oil. Americans are killing anyone, even on the streets of London or in a hotel at the centre of a major international conference, who might let out the Saudi secret to prevent an oil shock.
However, the mother of all conspiracy theories is only revealed at the end. Apparently the reason the Americans aren't acting on climate change actually isn't an attachment to economic prosperity or even petty venality. Instead, they're hoping that climate change will kill all the poor people and then that will leave the Americans in a stronger geopolitical position. While it will hurt them they'll be the last ones standing.
Just when you think the Americans can't get any more evil it turns out they're actively plotting ecopocalypse! This is absolutely mad.
The scientist is testifying before the Senate and is silenced by one of the Senators bringing up old, and false, accusations of sexual misconduct. This is a really perverse reversal of the reality that, while the greens are free to speak their minds, there are serious attempts to silence sceptics.
The charge that a scientist or other has, at some point, received funding from fossil fuel companies is just a lazy ad hominem. Most academic researchers get funding from all manner of sources and some of that, at some point, coming from industry doesn't imply they've been bought. However, that lazy ad hominem is used by Monbiot and countless others to try and prevent 'deniers' being heard. Burn Up reverses the situation and has the alarmists as the victims of mindless ad hominem.
There is never any question that renewables might not be able to effectively replace fossil fuels. Of course, within the craziness of this story that makes some kind of sense. People don't want renewables to work because then we wouldn't need to wreck the planet. Real world considerations such as providing an affordable and reliable supply of power aren't nearly melodramatic enough to fit in this silly story.
The creepy bits
From the polar bear, with "Extinct" written on it sitting incongruously in the middle of climate negotiations to the bizarrely precise "cut emissions by 90%" banner a protestor is holding. This film is trying to get a lot of messages across without ever openly confronting the audience with them.
At the start, the father can't drive to work because it is "Environment Week" and the kids have taken his keys. Isn't the idea of the children imposing the state's new moral code like that a bit Orwellian?
Burn Up is pure alarmist propaganda. If the Greens have such a strong case why do they have such a need to continually resort to such wild distortion?
Friday, July 25, 2008
Their treatment of the themes in the film was shallow. The film is evoking götterdämmerung and the idiot that Newsnight have got on can't see anything deeper than a small minded political allegory.
There was no serious discussion of the visual quality of the film, the pacing, the acting or the plot.
Isn't the point of the BBC supposed to be that they can do things like this well?
There is so much superb acting. Christian Bale is brilliant, holding the huge film together as a towering central presence. Aaron Eckhart as Harvey Dent is charismatic and convincing and makes a difficult transition very convincingly as tragedy overtakes him. Morgan Freeman and Michael Caine make what might have been mundane scenes clever and emotive.
Heath Ledger's performance is utterly incredible. He is portraying absolute chaos. Veering between merely unstable and genuinely terrifying. His character is never made human, remains a force of nature. Despite having no more technology than could be obtained at a hardware store there is no question in your mind that the Joker is utterly capable of destroying Gotham City and Batman. Utterly deserving of the Oscar.
The story dynamic is great. Slowly layering tension upon tension. The battle between chaos and law and order becomes an epic confrontation. Every moment of the film becomes a blow in that battle and has a deeper significance for it. The film addresses deep questions seriously and without talking down to the audience.
I won't say much more as I don't want to spoil it. Watch this film. More than once.