Friday, June 27, 2008

What is a nation state good for?

Chris Dillow asks a good question.

After all, most sensible Britons are localists now. Confident that significant amounts of power currently in the hands of the central state should be handed back to individuals or local communities. On the other hand, the tranzis want to remove substantial amounts of authority for 'bigger' problems out to supranational institutions (a mistake, in my view, but that's beside the point of this post). For what activity is the nation state suited? Are we just clinging to them out of status quo bias?

My answer would be that nation states are the best ultimate guarantor of individual rights.

Nation states are better at that task than local communities. The relatively dense social networks of local communities - while an asset in other areas - make them too easy to bias and sway unfairly. By contrast, as nation states are bigger even if one dense social network does take over (a family, for example) there is more likely to be a sufficient number of other people who can control them. Even when Britain was ruled by an aristocracy they were kept in significant check by the knowledge that there was a great mass of Britons out there who could only be pushed so far. A genuine tyranny of the majority usually involves too many people to really hold together.

Nation states are also better at defending rights than supranational organisations. Those organisations lack legitimacy as they lack history and have, instead, been superimposed on better established communities. A nation state's legitimacy is rooted in its history and, usually, a common stand against some adversity (wars build nations as well as destroying them). Supranational institutions never have that as they are superimposed and never command enough loyalty to take a serious common stand against serious adversity.

While people do appeal to the European Court if they think there is a slim chance they'll get the 'right' answer no Briton really expects that the EU is where they should appeal for help if they are being mistreated. Most important rights cases are decided by British courts. When there is a supranational input (such as the ECHR) it is resented and enjoys little popular support. By contrast, despite China having a much larger population and the current regime being even less democratic than the EU Beijing is still where a Chinese person with a grievance will take his or her petition. This has carried on through decades of Communism to the astonishment of outsiders. That means that China is a legitimate authority where the EU is not, even if China is currently run in an undemocratic way.

What that purpose means is that a nation state should be bigger than any one local community but seen as a natural authority to appeal to if your rights are infringed. Of course, that means nations can fail, in light of my definition of their purpose, for two reasons:

1) They become captured by a certain group within the nation who fail to respect the rights of other citizens.

2) They are not seen as a legitimate authority to appeal to if your rights are infringed.

It also means that those who bash nationalism out of a cosmopolitan sense of superiority are playing with fire. If I'm right, and nations are the best guarantors of rights, undermining nationalism risks creating a very dangerous world.

Thursday, June 26, 2008

Bob Ayling

I'm not sure if I have a clear answer to the question of whether Heathrow should expand. There is a reasonable case to be made that Heathrow itself might not be the ideal place to expand. However, I have no sympathy whatsoever for hysterical and joyless campaigns against flying itself and am well convinced that more capacity in the region is necessary. As such, the proper question is whether you have a feasible alternative in mind. Vague speculation about new airports in Kent just isn't good enough. No responsible conservative should make the same mistake Labour made over energy and road building; using green politics as an excuse for failing to confront difficult questions until a crisis is at hand.

The coalition opposing the new runway is an uncomfortable one. It is split between those wanting new airport capacity elsewhere so they do not have to face aircraft noise and those who want to inconvenience people into taking fewer flights. If the Conservatives oppose the runway they will have to, if they form a government, dissapoint one of the two groups who will either resent poor service and delays at the airport or accuse them of green heresy. Opposing the third runway without a clear alternative, set out in advance, is risky.

What really worries me is the possibility that the party is taking Bob Ayling's opinion on the matter seriously:

"The Conservatives have moved more firmly against a third runway after the former BA chief, Bob Ayling, came out against the big increase in transfer passenger[s] for causing "Heathrow hassle"."

The man responsible for the disastrous 'dirty tricks' campaign against Virgin, the ethnic tailfins which infuriated British and North American customers alike and a failed merger with American Airlines. He was then forced to resign as head of the company running Millenium Dome because of a poor performance controlling costs. He's the private sector's answer to Sir John Gieve.

Wednesday, June 25, 2008

The great fashion divide and Thorstein Veblen

Each day my computer starts up and MSN tells me what's really important. Today, I'm getting "30 skills every man should master", "Wimbledon fashion" and "Boy falls into wolf enclosure" among others.

Yesterday (a few hours ago), one of the pieces highlighted Sadie Nicholas, writing in the Daily Mail, arguing that there is a North-South fashion divide and that Northerners dress more glamorously. Her evidence is largely anecdotal and it's all pretty complex but her article, roughly, boils down to these two paragraphs:

"And the key differences between women in the North and their fellow fashion lovers in the South-East?

'In London,' says Justine, 'women will dress down their Louboutin heels with skinny jeans or leggings and less-is-more hair and make-up, which they see as being very cool.

'In Liverpool, that would be criminal: the girls here make sure the rest of their outfit is as glam as the shoes themselves.


My own view is that Northerners are finally asserting themselves when it comes to what they wear. We love glamour and we're no longer afraid to flaunt it."

Funnily enough, I've recently come across a theory that can explain this, a refinement of Thorstein Veblen's Theory of the Leisure Class. Here is Virginia Postrel, setting out that the 'bling' phenomenon isn't illusory - despite being poorer African Americans do spend more of their income on clothes, cars and jewelry - and explaining why.

"On race, the folk wisdom turns out to be true. An African American family with the same income, family size, and other demographics as a white family will spend about 25 percent more of its income on jewelry, cars, personal care, and apparel. For the average black family, making about $40,000 a year, that amounts to $1,900 more a year than for a comparable white family. To make up the difference, African Americans spend much less on education, health care, entertainment, and home furnishings. (The same is true of Latinos.)


"So the researchers went back to Thorstein Veblen, who coined the term conspicuous consumption. Writing in the much poorer world of 1899, Veblen argued that people spent lavishly on visible goods to prove that they were prosperous. “The motive is emulation—the stimulus of an invidious comparison which prompts us to outdo those with whom we are in the habit of classing ourselves,” he wrote. Along these lines, the economists hypothesized that visible consumption lets individuals show strangers they aren’t poor. Since strangers tend to lump people together by race, the lower your racial group’s income, the more valuable it is to demonstrate your personal buying power.

To test this idea, the economists compared the spending patterns of people of the same race in different states—say, blacks in Alabama versus blacks in Massachusetts, or whites in South Carolina versus whites in California. Sure enough, all else being equal (including one’s own income), an individual spent more of his income on visible goods as his racial group’s income went down. African Americans don’t necessarily have different tastes from whites. They’re just poorer, on average. In places where blacks in general have more money, individual black people feel less pressure to prove their wealth.

The same is true for whites. Controlling for differences in housing costs, an increase of $10,000 in the mean income for white households—about like going from South Carolina to California—leads to a 13 percent decrease in spending on visible goods. “Take a $100,000-a-year person in Alabama and a $100,000 person in Boston,” says Hurst. “The $100,000 person in Alabama does more visible consumption than the $100,000 person in Massachusetts.” That’s why a diamond-crusted Rolex screams “nouveau riche.” It signals that the owner came from a poor group and has something to prove."

There we go, an explanation!

Northerners are, on average, significantly poorer than Southerners, particularly Londoners, and people generalise and assume they all "get up in the morning at ten o'clock at night, half an hour before I went to bed, eat a lump of cold poison, work twenty-nine hours a day down mill, and pay mill owner for permission to come to work".

The signal that dressing glamorously sends is, therefore, more valuable to Northerners.

Tuesday, June 24, 2008

Why I do not want Obama to win

Douglas Carswell writes that he wants Obama to win. I find the idea horrifying and think that McCain would make a far better President. I'll try to set out why by going through Obama's positives, as set out by Douglas and, earlier, Dan Hannan and then briefly discussing McCain's negatives before describing what I see as the big divide between Obama and McCain.

Arguments for Obama

Douglas argues that Obama's refusal of public money to fund his campaign should count heavily in his favour:

"Does Obama believe in small government? As with McCain, I really don't know. But I do know that last week he became the first Presidential candidate since Nixon to refuse public money to fund his campaign.

Instead of relying on State handouts, Obama's campaign will be funded by millions of people each giving small on-line donations. In the primaries alone, the $133 million spent came via 1.5 million web donors. That's less than $100 each.

Sounds pretty Edmund to me."

I think that the motive this implies just isn't there. Obama originally committed to take public funding and accept limitations on his fundraising but changed his mind when his campaign proved better able to raise funds than expected. We shouldn't - as some Republicans are - get in a hissy fit about his u-turn, to expect him to hobble his campaign out of some sense of chivalry would be silly, but it is clearly not an act of Burkean principle. McCain is dreadful on campaign finance reform but his differences with Obama are only as old as Obama's fundraising success. As such, I don't see how this can be a critical issue unless you think, and I guess Douglas does, that there aren't significant other issues that make McCain the better candidate.

Dan Hannan's suggestion that electing Obama would be a great idea because it will repair America's reputation is unrealistic. America's friends are dismayed by foreign policy incompetence and there is little sign that Obama will improve things on that front. America's enemies take their hatred of the country rather too seriously to be convinced by the election of a black man. Those Europeans impressed by Obama's election will return to their anti-American ways the first time he makes a decision that doesn't fit their tranzi agenda (if he doesn't make such a decision we have bigger problems). There is also the rather unfortunate likelihood that if Obama is elected it will probably be with a white majority voting against him (the Republicans usually have a majority among whites) which will be prime fodder for the US bashing BBC and America's domestic race industry.

The problems with McCain

McCain's support for the EPP is lamentable and foolish. American right wingers have long assumed that a more united Europe, and a more united European right, will make both easier to rally as allies for the United States. Only now are they realising their error; that submerging proud nations in transnationalist, supranational slush makes them weaker in themselves and as allies. Fortunately, the EPP is one issue on which the American President doesn't really have much influence. The question doesn't come up for Obama so a comparison is hard to draw. McCain's soundness on the UN suggests that his instincts are in the right place on the tranzi institutions, even if his judgement is out on the EU. I don't think that the issue can be critical to our assessment of McCain as a Presidential candidate.

McCain has been on the left of the Republican Party on a host of issues such as tax cuts but, with our current binary choice, that is pretty irrelevant. As the debate stands right now he is the one defending the Bush tax cuts and calling for a ten per cent cut in corporate tax rates. That ten per cent corporate tax cut would do great things for America's competitiveness and might even finally convince our politicians that the time has come for serious tax cuts. To describe McCain as "high tax and spend" in that context is bizarre. In fact, I think that the corporate tax cut proposal already puts sufficient clear blue water between McCain and Obama to justify supporting the Republican.

The big difference between McCain and Obama

I'll largely leave aside foreign policy as I don't want to talk past Douglas. Suffice it to say that I think McCain's suggestion Obama is running for Jimmy Carter's second term has an awful plausibility to it. On a broad range of domestic policy issues Obama has proven himself a friend of protectionist, big state special interests while McCain has shown admirable economically liberal principle. Of course, the big example is the attack on NAFTA but here are a few you might not have heard of:

Agriculture subsidies

David Brooks, writing in the New York Times, summed up a new bill ramping up agriculture subsidies: "The $307 billion farm bill that rolled through Congress is a perfect example of the pattern. Farm net income is up 56 percent over the past two years, yet the farm bill plows subsidies into agribusinesses, thoroughbred breeders and the rest." The bill was so bad, such pure pork, that it attracted bipartisan scorn in the press; the New York Times called it "disgraceful" and the Wall Street Journal called it a "scam". Despite that the bill passed with Obama's support. By contrast, Brooks sets out how "John McCain opposed the farm bill. In an impassioned speech on Monday, he declared: “It would be hard to find any single bill that better sums up why so many Americans in both parties are so disappointed in the conduct of their government, and at times so disgusted by it." Quite right.

Class action reform

This may seem like a minor issue but it matters a lot in the States where their class action system is wide open to abuse. Ted Frank, at the American Enterprise Institute, sets out the problem and Obama's dismal response:

"CAFA came about because trial lawyers had been abusing the class action mechanism by filing dozens of class actions in different states seeking to certify a nationwide class. In a game of "heads I win, tails don't count," if the trial lawyers lost in one jurisdiction, they would merely proceed with an identical lawsuit in a more favorable jurisdiction until they found a judge receptive enough to sign on to the most meritless of lawsuits.

As a consequence, the notoriously plaintiff-friendly Madison County, Illinois, ended up with hundreds of lawsuits seeking to dictate consumer law nationwide, and defendants were forced into countless extortionate settlements.

CAFA simply undid this upside-down federalism by establishing that lawsuits alleging a nationwide class belonged in a single federal court rather than the most favorable magnet jurisdiction in state court that trial lawyers could find.

This is entirely sensible good-government legislation, which is why the bill passed by such a large margin. But the bill passed in the form it did in spite of Obama's efforts, not because of them.

While CAFA was under consideration, Senators Ted Kennedy, D-MA, Mark Pryor, D-AR and Dianne Feinstein, D-CA, proposed amendments that would have eviscerated CAFA; Senator Feinstein's proposed amendment likely ran afoul of constitutional due process requirements set forth by the Supreme Court in a 7-1 decision in 1985. Each amendment failed by large bipartisan majorities, supported only by Democrats; each time, Obama voted with the trial lawyer lobby.

These votes were not outliers. Obama also voted to filibuster medical malpractice reform and to kill an asbestos reform bill in 2006, each time providing a critical vote for a minority of senators that blocked tort reforms from achieving a three-fifths supermajority. That is hardly reaching across the aisle, much less showing a willingness to flout a Democratic special interest."

The U.S.-South Korea free trade agreement

From the Wall Street Journal:

"Here's one "change" presidential candidate Barack Obama apparently believes in: higher prices. Witness his letter last week urging President George W. Bush not to submit the U.S.-South Korea free-trade agreement to Congress for ratification.

Mr. Obama's objection, as stated in his letter, is that the deal "would give Korean exports essentially unfettered access to the U.S. market and would eliminate our best opportunity for obtaining genuinely reciprocal market access in one of the world's largest economies." In other words, ordinary American consumers would get too good a deal.

For an idea of how good, look at automobiles, about which Mr. Obama professes particular concern. The free-trade agreement would eliminate America's 2.5% tariff on most Korean car imports. Even better, it would phase out the 25% tariff on pick-ups and light trucks. Overall, the Korean trade deal would boost the U.S. economy by $10 billion to $12 billion.

Mr. Obama thinks this benefit to U.S. consumers isn't worth the risk that South Korea might not live up to its promise to eliminate its own 8% tariff on U.S. autos and cut its bewildering array of nontariff barriers, such as arcane safety standards. This despite the fact that the deal includes enforcement provisions if Korea backtracks.

On the record so far, Mr. Obama is the most protectionist U.S. presidential candidate in decades."


In the end, economic hard times reveal two kinds of politicians. On the one hand there are those who will offer the fools gold of endless subsidies and protections from foreign competition to buy the support of particular communities and industries. The subsidies distort the economy and hurt the chances of a genuine, lasting recovery while protectionism makes most people significantly worse off. On the other side there are those, Margaret Thatcher being the most brilliant example, who make the case for real reforms that can improve the long term prospects of the economy.

In the coming US election Obama is the protectionist throwing subsidies at interest groups, McCain is the reformer promising aggresive action to curb wasteful and distorting subsidies while cutting corporate tax rates. With that choice, I'll support McCain without hesitation.

Re: The Wisdom of Crowds

Two points on Peter and Peter's debate on whether the Observer poll suggests that crowds are wise. First, on the philosophical debate, Peter Franklin says:

"I'm concerned that the wisdom of crowds meme, like some crowds, is getting out of control. Obviously, anyone who believes in democracy has to have trust in his or her fellow citizens; but surely, as Conservatives, we should also expect a degree of trust in those who, by virtue of merit, can speak with authority in certain fields of human endeavour." [emphasis mine]

Why? That sounds like pretty much the opposite of what we should believe as conservatives. Whether it is Burke calling for caution to those who would set our private stock of reason above age old traditions, Hayek describing the importance of dispersed information or the religious among us who prefer age old moral wisdom to contemporary theory. Sometimes we might need to set conservatism to one side but it is not an ideology that should ever imply trusting experts and their 'authority'.

While science has a good record of delivering technological advances and pushing the boundaries of the human experience that does not mean that the opinions of scientists should always be taken at face value. A fascinating report for the International Policy Network by Professor Jim Chin shows how the prevalence of AIDS was massively overstated by UNAIDS, leading to poor targetting of the response; a mistake they are only now, in the face of overwhelming evidence, accepting. UNAIDS had a noble goal, trying to increase the resources available to combat AIDS, and their bias was probably not conscious but their errors clearly demonstrate how science can be distorted once it is enlisted to a political movement like environmentalism. Of course, that doesn't mean we should discount scientific opinion, just that we cannot concede our judgement on such important matters to scientists alone.

One final point, I thought Mori's poll was desperately shoddy. The proper question to test whether the public think the sceptics are a significant group isn't really whether they believe that "many scientific experts still question if humans are contributing to climate change". That humans are making no contribution isn't the position of most scientific sceptics. Also, the "still" is leading. If you asked some variant of whether "many [or most] scientific experts argue that the amount of climate change we should expect human activities to cause will not be enough to constitute a 'crisis'" that might be more meaningful.