Simon Jenkins-rage

Some time ago I was concerned about where the Guardian managed to find people to write articles quite as poorly argued and illogical as fill their pages. However, when they turned a Nobel winning economist into a Chinese Communist Party sap I should have seen the writing on the wall; the Guardian makes them.

Simon Jenkins used to write sensible articles about changing standards in the NHS and the success of the Thatcher reforms. Now he produces this drivel.

"They include movies by Oliver Stone and Paul Greengrass, and American and British 9/11 specials from stars such as Harvey Keitel and Kevin Costner called The Millionaire Widows, The Miracle of Staircase B, On Native Soil and numerous variants on twin towers. There are comic strips and videos and where-was-I-then memoirs. The weekend is to be wall-to-wall 9/11. Not glorifying terrorism? You must be joking."

Hmm... the Miracle of Staircase B certainly sounds like it is a fearful cry of anguish doesn't it? Or, perhaps some coverage of 9/11 is actually about commemorating the heroism of those who fought to save innocent lives?

What about the film Pearl Harbour? Released decades after the actual event and yet criticism of the film usually centers on the direness of Ben Affleck's "acting" and not its glorification of Japanese militarism.

"The favourite line from the war on terror's military-industrial complex is that in 2001 Osama bin Laden "changed the rules of the game". (Forgotten is that he attacked the same target in 1993, his only error being one of civil engineering.) "

Simon Jenkins in "thousands of people dying can make people respond differently" scoop.

"George Bush repeated the change thesis again on Wednesday in confirming his secret interrogation camps and excusing the five-year delay in bringing al-Qaida suspects to justice. Tony Blair cites the change with every curb on civil liberty. The "new" terrorism requires a new approach to public safety. The security industry cries amen."

I love that lefty conspiracy nuts (like Simon Jenkins) can combine this particular theory with their fanciful estimates of the collosal financial cost of the war on Iraq. Surely the vast right wing conspiracy would have chosen a conflict with less capacity to endanger the financial stability of their low tax economy if they were to choose an evil right wing revenue generator?

A more intelligent analysis would confirm that something clearly has changed post 9/11 to make Bush move from being focussed primarily on the emerging challenge from China to being focussed upon militant Islam. The question is whether his response is the correct one not whether you can pretend this was all some kind of invention.

"Forty years after Alfred Nobel's invention of dynamite, Russian terrorists tried to pack a plane with the stuff and fly it into the tsar's palace. In 1883 Chicago-financed Fenians exploded bombs on the London underground, leading the Times to wonder if the tube could ever be safe. There has been little change in the preferred weapon of terror, the explosive device, or in the psychopathology of the bomber. The causes remain the same: separatism, and religious nationalism dressed up as holy war."

Okay. So in the first attack no one died (maybe the plotters but I don't know the history here) and in the second probably dozens. This change in "degree" to thousands would seem important.

"What has changed, grotesquely, is the aftershock. Terrorism is 10% bang and 90% an echo effect composed of media hysteria, political overkill and kneejerk executive action, usually retribution against some wider group treated as collectively responsible. This response has become 24-hour, seven-day-a-week amplification by the new politico-media complex, especially shrill where the dead are white people. It is this that puts global terror into the bang. While we take ever more extravagant steps to ward off the bangs, we do the opposite with the terrorist aftershock. We turn up its volume. We seem to wallow in fear."

Isn't Simon Jenkins such a brilliant philosopher king? While all us mortals are being weak and getting scared by people bombing us he's here to remind us that the problem isn't people dying but, rather, us being so damned pathetic about it.

Strange then, that all us pathetic proles with our hysterical media haven't stopped riding the tube or flying. Surely that should have been our first step in manifesting our grotesque fear?

"They drove the Taliban back into the mountains, restoring the latter's credibility in the Arab street and turning al-Qaida into heroes. "

I bet they're loving it. Woo! I'm getting a daisycutter dropped on my head.

Actually, from demonstrations in the less savoury parts of the Muslim world (as opposed to official pronouncements given to the Western media) we can tell that Al Qaeda became heroes to the unstable lunatics who use Islam as cover the moment they hurt America.

After this Jenkins goes on a little circular trot around pretending he wants to censor but not really because he's a good little liberal. This serves to do nothing but show that he does not think about the complexities of the debate over the best way of defending our values but prefers the simplicities of being holier than thou. There are important questions over infringements on liberty such as the suspension of habeas corpus or a free press and whether or not those libertys will be better defended in the long term by being limited or by being defended as an absolute. However, he doesn't address this at all and I've given more than enough time to this column already so I won't either.

Taxing shares and Selling Airbus

Should we be worried about British Aerospace selling its stake in Airbus to its continental partners? Or about the Pacific & Orient being sold to a firm from Dubai?

People rail at the injustice of foreign firms, with government support or protection from takeover, taking advantage of our liberalism and buying up British firms. Whether icons or not this grates at the nerves as something British becomes something French or otherwise foreign. There are also concerns that higher value investment will be channeled to where the investors are although the data does not appear to support this hypothesis. However, even if such a relationship did hold true this would not be a reason to fear corporate sales to foreign owners.

If a company is sold to a foreign owner and its management is reasonably competent it should not be seriously undervalued. If it is being taken over by a foreign company able to do so thanks to state aid then it will often be overvalued. This will mean that money will flow into the UK economy to the value of the company. In turn this money will be reinvested, either directly by the company of by shareholders after a dividend, into strengthening the British ownership of other British companies or allowing them to invest abroad in return.

As such, a problem of insufficient ownership of companies by Britons arises not thanks to the decision to sell or not sell any company but thanks to the collective decision on how much to save and invest and whether to do so in companies or in government debt. It is this which fans of UK PLC remaining in British hands should be worried about as the amounts we save and invest could clearly be higher.

Key is to reduce the taxes which make saving expensive. Thankfully the Conservatives appear to be proposing quite an appropriate measure to achieve this end. They are proposing to do so by scrapping stamp duty on share trading. This is not only a good thing to encourage and support the efforts of those saving and strengthening provision for increasing numbers in retirement but also a great idea in that it is a scrapping of a tax. Every tax scrapped simplifies the tax system and reduces compliance costs.

Friends I have spoken to seem unsure about the politics even if they accept the economic logic of this move. I would point to a few factors which make this a good political move as well as eminently sensible economically as described above:

1. Legitimate worries about the value of pensions are only going to grow more pressing as more final salary schemes are replaced and the demographic changes facing the UK become more obvious.
2. It allows for the Conservatives to make the point about Brown undermining the UK's almost uniquely sound pension provision when he entered power with great force as they have a practicable scheme to improve the value of private pensions rather than simply being in a contest to spend more and more taxpayer money on the state pension.
3. It is a tax cut that people will notice the value of quickly if we win power and are elected. Money given back to share traders (pension funds are the biggest but others as well) will quickly find its way back to the stock market and this will, other factors held equal, lead to a steady rise in the FTSE index over the Conservative time in office. Thanks to the role of expectations in setting stock prices this will happen quickly. Such a rise could create a valuable feel good factor if we are put in the fortunate position of having a new Conservative government.
4. It would give us something sensible to contribute when a British company is sold abroad rather than trying to balance between attacking Labour and and avoiding ugly econ-nationalism.

A good policy. If backed up by a reduction in corporation tax it would be even better.

Pakistan

Why is Pakistan important?

Combine the death and protests at the death of a Baluchi warlord, a father absconding with his daughter and its connection to the airline bombing plot and recently Pakistan has been all over the news. There are obvious and less obvious reasons why what happens to Pakistan should concern us.

1. The Global War on Terror - Pakistan as an ally matters. Its troops are fighting our enemies and its potential as an enemy is vast. As a nuclear power with the ability to raise hell in India and Afghanistanand a sizeable population it would make an unpleasant enemy.
   
2. The Domestic War on Terror - Plots to commit terrorist attacks have been stopped thanks to intelligence uncovered in Pakistan. When terrorists flee our shores it is often where they wind up and are extradited from. Were Pakistan to move from being a friend to an enemy this would make the management of the terrorist threat to Britain significantly more challenging.
   
3. Immigration - it is common for political parties to behave as if they have far more control than they actually do over immigration numbers. Far more is down to external factors than they would acknowledge. Germany worries about Turkey's entry to the EU because there are many Turkish people in Germany and immigrants tend to go where others of their nationality can be found. Britain faces a similar prospect with instability in Pakistan; an increase in the numbers wanting to come here with genuine claims for asylum which will greatly complicate our immigration decision.
   

For these reasons Pakistan is the country, more so than Iraq or Iran, which Britons, in particular, should be watching for instability and fracture.

What is happening in Pakistan?

In Pakistan political power is widely dispersed among varying elites with differing priorities. These can be separated, broadly, into landowners, the military, national politicians, Islamists and a rising business elite.

Landowners hold all the cards in terms of power on the ground thanks to holding the allegiance of large bodies of the rural population. For this reason they are crucial to success in the formation and survival of any political system in Pakistan. Any democratic party must have their support to secure votes which are cast along lines of feudal loyalty. Military regimes will tread carefully as they are the key to the 'popular' feeling which any military dictatorship must necessarily fear could overthrow its rule. The main limitation of the power of the landowners is division and a lack of aspiration to lead. They are the body from whom the important supporters of other leaderships are drawn rather than adopting such a leadership role themselves and making Pakistan truly feudal.

The national political class is thoroughly weak and is currently in a vague alliance with the Islamists. Since their replacement by Musharraf as the national leadership they have failed to articulate a coherent alternative as an opposition. The business elite are still somewhat of a nascent force and too few in number to constitute the kind of middle class, interested in stability, which holds so many successful states together.

That leaves the two groups who are, most actively, vying for real power in Pakistan. Islamist groups are still marginal in Pakistan and confined largely to the rural backwaters, however, they are clearly the group most hostile to Western interests and with a steady increase in support are the main challenge to military rule.

The Pakistani military is, by developing country standards, highly professional. This reputation combined with a widespread perception of incompetence on the part of national politicians has led to there being only limited opposition to military rule. The plan appears to be to attempt a similar settlement to that in Turkey where a limited democracy is allowed with the military as a self-appointed guardian of its wellbeing. However, the ability of the military to set this up is highly contingent upon the continued presence of Pervez Musharraf. Should he fall from power or die there is no institutional framework in place for the military to transfer power to a new President. If an attempt at assassinating him succeeds (there have already been attempts) then the military's scheme will quickly be derailed. The military also lost a lot of its credibility as an effective manager through a slow response to the earthquake.

An uncomfortable result of all this is that the military dictatorship of Pervez Musharraf is the best guard against Pakistan becoming a big problem; a nuclear armed Islamist state. This implies accepting a dictatorship and an abandonment of democratic principle. It is, perhaps, the best realist counterexample to the neoconservative ideal of a foreign policy based around democracy as a panacea.

House Prices

As the BBC reports, house prices are rising solidly. The stagnation that was big news around a year ago was never likely to be prolonged thanks to the strength of demand in a market with inelastic supply. However, I think the importance of this rise is probably overrated. The rise isn't dramatic enough to justify worries about a bubble and already high levels of house prices relative to income will magnify the impact of recent interest rate changes. With the somewhat precarious nature of the rest of the economy's recovery it would seem that another interest rate rise might not be necessary soon although interest rate futures have risen as the market prices 5% interest rates in.

Blair's Succession

The leak of documents suggesting a date to the Sun would appear to be a means to combine satisfying the Brownites that Blair will go with time left for Brown to settle in before the next election with avoiding the precision that might make Blair's last months more about his successor than his own glorious exit.

It would seem unlikely to satisfy either objective as the deadline is not early enough for the Brownites to fight the next set of elections (local and council elections) on their own terms as they would like and have decided they are entitled to. Equally, the speculation over the actual date will probably be all the fiercer for knowing a rough estimate of the date and the Sun's prediction. Blair cannot escape the trap that Dave Cole describes him creating for himself.

The reality, which unfortunately (or fortunately) the Labour party hasn't realised, is that the date is relatively unimportant. It might actually be in Brown's interest to take over significantly closer to the election. Brown's big advantage will be that he can dissociate himself from the gripes that build up with ten years in power and his own mistakes. The greater the period of time between his taking over and the general election the more likely it will be that the gloss will fade from shiny new Prime Minister Brown.

The biggest question that Labourites should be asking is not when Blair will leave but what kind of leadership contest they'll have after. Whether they'll have a contest like Davis-Cameron which leaves the party stronger or a contest like Clarke-Davis which fails to air the important issues and does not feature a shining performance from either candidate. Some have realised what this requires; more than one credible candidate.

The problem with arranging this for the Labour election is the widespread perception that Brown is sure to win. No politician aspiring to high office will risk setting himself up in opposition to Brown in the leadership election unless he thinks he has a chance of winning. Unless some kind of coalition can build very quickly and very effectively around an alternative the Labour party has no chance of an open debate over the leadership and instead simmering resentment on the part of those in the Labour party who want someone else. The other problem with arranging a decent multiple candidate race is that the parliamentary Labour party is so shockingly low on talent that isn't associated with some kind of sleaze or incompetence.

Returning

As must now be brutally obvious this blog has been on something of a hiatus. This was enforced by the need to work at my Master's dissertation but now that I need not focus my intellectual energies on the effects of budget deficits to the same degree I can engage with a broader perspective and this blog again. Apologies for my absence but consider me returned.

Authoritarian Russia

The New York Sun blog is discussing American responses to the slide towards dictatorship in Russia. However, I think Freedman is mistaken in aiming his analysis primarily at what we can for Russia itself. It is unlikely we can do a lot to change the policy of a state far too powerful for us to meaningfully threaten in militarily. Equally, sanctions are never going to pass against a permament member of the Security Council. Unilateral sanctions or harsh words are likely to do little but drive the Russians, thanks to the media control Freedman mentions, closer to the regime. Short of a new Cold War Russia's fate is its own. Given the massive demographic problems in Russia and the economic frailty outside of the oil sector it has enough problems that causing us trouble should be the last thing on its mind.

Of course there are externalities to an authoritarian drift in a state with such military, and increasingly thanks to oil, economic power. First, the possibility of nuclear weapons leaking. However, this problem has largely been contained by the sensible if philosophically uncomfortable strategy of the US in paying for the security of the Russian nuclear force. Second, the effect of Russia meddling in the affairs of nations it still sees as part of its sphere. This is where we can be more useful. Through vocal, economic and diplomatic support for former Eastern Bloc countries trying to break away and establish properly democratic and economically liberal regimees, and the promise of EU membership where possible, we can achieve something genuinely important. The improvements in the Eastern European countries which have recently joined the EU are a cause for celebration which has come about through sustained Western intervention. This is a better way for the West to spend its time than in a wider, futile, confrontation with Russia.

Becker-Posner on Latin America

Becker and Posner comment on Latin's leftward drift. Becker is probably right that the trend won't last but is overoptimistic is his belief that it won't matter. Chavez and Morales will leave their economies weakened and future right wing governments with more work to do which will only increase the painfulness of reform and lay the foundations of the next lurch left. Equally, the Lula phenomenon of left wingers softened by election would seem to be a risky one as it constantly risks being "discovered" by its own supporters.

Weber's work, which Posner spends some time discussing, is an oversimplification but it does seem possible that Catholicism is contributing to the problem. Posner's explanation is quite different to Weber's original thesis but is, perhaps, stronger than he makes out. Italy and Spain may be exceptions as successful Catholic economies but they are hardly the most stable of the European capitalist nations. He skips over the historical explanation of the cultural differences between North and South America, though, which might be more significant. Landes describes how these nations were formed by colonial powers far more interested in their resource endowment than in forming durable nations. While Latin America would appear to have had plenty of time to overcome this historical disadvantage, Eastern Europe has been more dysfunctional more recently, its importance cannot be discounted.

A New House of Lords

My case for electing life peers, including some ideas for how they might be elected, has been posted on Conservative Home .

American Political Parties

Reading Jonathan Gradowski's disagreement with the founder of the Daily Kos I entirely agreed with his sentiment but the main impression his piece left me with was the difficulties for a party out of power that the US system creates with its lack of an opposition hierarchy.

I understand that the weakness of parties was a specific objective of the US founding fathers and it does make sense to limit their power to control political debate. However, when someone wishes to know the opinion of the Conservative or Liberal Democrat parties they can ask them and a failure to answer properly is the only reason to suspect that policy is not properly formed. If you want to know education policy ask the Shadow Education secretary; we have a Leader of the Opposition. Such a thing simply isn't possible for the Democrats. Equally, if someone wishes to change their party's policy they need to win specific debates and either leadership contests or the support of the leadership.

By contrast neither Jon nor Markos Moulitsas have any recourse besides attempting a steady conversion of the rest of their party. Outsiders face as hard a slog in obtaining the audience which gives them the ability to influence party policy as they do in gaining party influence in the UK. I guess this is something of a free market in party control versus the hierarchy approach in the UK. The question therefore is whether the transactions costs are greater in the lack of clear parameters and party line in the US system or in the potential to exclude outsiders in the UK system. So long as the British parties stay open I think the British system is probably the more effective.

Brian Haw

The government has won its appeal against the judgement that its law requiring police approval for protest cannot be applied to Brian Haw and it is to be expected that he will shortly be asked to leave.

I think George Monbiot's concern over the effects of this new law is overstated. Clearly the right to protest cannot be an absolute right. If people are running around airbases they are a danger to themselves and others. If a protest goes on for five years then it has created a shanty town which defies attempts to properly order an important public environment. The savagery of much animal rights protest is a genuine challenge to the rule of law in this country and deserves no legal defence.

Monbiot appears to be surrendering to the classic trap of thinking too highly of the importance of laws and not nearly highly enough of the importance of society's values. Try to set up a perfect legal defence of the right to protest and you will only succeed in defending the indefensible. So long as every Briton holds the right to peaceful and timely protest dear no democratic government will be able to prevent them exercising that right. For this reason threats to freedom of speech which sap the public's will to express themselves are far more dangerous than new powers for the police. That is why censorship of South Park and the Danish cartoons controversy worry me so much.

Racist toddlers

Sometimes the world gets really, really silly. A former chairman of the Commission for Racial Equality is now worried about racist parents raising angry little racist toddlers; three year old racists. Lord Ouseley recommends that staff intervene if they see a lack of interethnic bonding in their charges.

I honestly don't have the knowledge to challenge the empirics here but while there may be some racist toddlers out there I doubt that their numbers are particularly large. Now, every so often groupings that look racial will appear entirely at random. Suppose a nursery took Lord Ouseley's advice and intervened to ensure greater racial mixing. Couldn't that actually lead to a large number of entirely bemused toddlers being introduced to racial distinction thanks to the advice of a former chair of the CRE?

I think a more sober analysis comes from Margaret Morrissey, of the National Confederation of PTAs.

"In all the time I have been involved in nursery education, since about
1975, I have never seen children segregating to play,"

Spreading the word

I've signed this blog up to the RightLinks banner exchange. As the site isn't sufficiently well defined to be summed up in a picture I decided to cop out and use a painting from one of my favourite artists, Salvator Rosa.

Latin America

One of the many problems with reactions like the Guardian's to the news that Bolivia is going to join the Latin-populist-screwAmerica crowd is that it sees the continent's left wing drift as something new. It isn't. Latin America has always been something of a sucker for the latest left wing thinking on how everyone else is responsible for its woes.

Being on the Gold Standard was a good idea before the First World War when it acted as a commitment mechanism demonstrating and encouraging budgetary restraint. This kept interest rates down and allowed the growing Latin American economies to borrow from the developed world and particularly Britain. Unfortunately, it was never possible for South America to reap the full benefits as the commitment was constantly under threat from political pressure from farmers. Such protest was common in the States as well but never caused such intractable problems to a much more stable polity.

Still, in the 19th century it was widely expected that Argentina, with its vast wealth of resources and before oil had become crucial, would become one of the richest states in the world. Indeed, by the start of the First World War its per capita income was similar to that in Germany or France. Things went wrong with the collapse of the world economy during and after the war but this was true elsewhere, certainly in Germany. The new scheme for becoming an industrial giant (because industry creates power, not because it necessarily creates wealth) was to place tariffs on your infant industries. Unfortunately, the lack of competition that tariffs created meant that the new industries remained costly and ineffective. Latin America steadily fell further and further behind European progress as it burdened the rest of its economy with tariff protection for the industries it was trying to develop.

With each generation the region appears to find new justifications and strategies for failing to implement the policies which are creating such success where they are deployed in the rest of the world. Usually the trigger for a renewed experiment with socialism is some kind of macroeconomic crisis. After the Asian financial crisis it was widely accepted that old methods of doing business (relation-based transactions) were making modernisation a source of instability and a process of quiet reform was begun. The response to crises in Latin America, such as the Argentinian collapse, is almost inevitably to give up on the whole project and hope that government can save the day.

South America has many of the advantages in resources that North America has. It also started off wealthier; North America was third prize in the Imperialist landgrab after the Caribbean and the South. The contrasting fortunes of the two regions, the fact that one now has the wealth and power to be the new "imperialist" in the Left's story of victimhood, suggests that the US instinct to trust the individual and enterprise is far more conducive to national success.

Winning here...

Congratulations to Melissa Davey who has replaced the Liberal Democrat councillor for Letchworth South West. It took me a while to find this result but it makes the effort of travelling back from London the day before an exam seem particularly worthwhile. She won by quite a solid margin as well - 1471 votes to 832 for her nearest rival.

Mission: Impossible 3

** Spoiler Warning - This film's plot isn't exactly important but if you do want to be surprised I'd skip over this review - then again, a better solution is to read the review then watch a better film **

This film was awful. Not just slightly awful, full on Batman-and-Robinesque hideous.

First, the action: It wasn't actually that good. It seems that substituting for any actual sense of drama is shaking the camera uncontrollably. This gives the impression of speed but, unfortunately, that is all it can give. Most of the set pieces sound impressive when they are described e.g. the part where Mr. Cruise swings between two skyscrapers. However this just turns out to be pictures of Cruise falling and hitting things without the slightest sense of grandeur. This means that the event becomes part of the background buzz of emotionless physicality to the film. Never will it make your spine tingle like good action should.

The location work on the film was unfortunately hackneyed. It started out with a decent picture of China with Shanghai lit up as the metropolis it is but then this film's stupidity kicks back in and the next seen reverts to a vague image of the Chinese suburbs with everyone dressed like extras from The Last Emperor and going about their vaguely agricultural business or playing Mah Jong. They change from slightly active players to being props for the Western story to fly past.

The film's bad guy is suitably nasty and pleasingly competent but, unfortunately, this is ruined by the final sequence in which he suddenly decides to give up all of his earlier caution and confront Mr. Cruise alone and relying upon a shock collar style device whose effectiveness clearly hasn't been properly tested. This means that the great achievement of beating him looks less genuine, he wasn't beaten at his prime, and the story's climax is a joke. Then again perhaps I just felt cheated because I really wanted him to win?

The love story is lame largely thanks to a combination of Cruise being utterly insipid and his love interest reminding me of Michael Jackson.

Finally, the shock twist was so poorly developed that it actually made me laugh out loud in the cinema. One character suddenly announces he is actually a horrible neo-con with a plot to fool his country into thinking an Arab state has weapons of mass destruction and needs to be attacked. Around a minute later he is unceremoniously shot and that entire story line is abruptly forgotten about. At the end the film tries to pull the Ronin trick of never telling you what the item was that its protagonists had struggled for only it couldn't quite pull it off due to the brief foray into politics making it clear that this was a NBC weapon of some kind; if you're going to have a mystery make sure you haven't told your audience the answer.

Don't go and see this film. It'll only encourage whoever pays to make this rubbish.

The local elections

Good times. The sun is shining and Conservatives are getting elected. The number of seats we won was important in terms of local governance but essentially a sideshow in terms of national politics as the benchmark for success is highly subjective. More significant is the proportion of the vote. It is best to be careful when predicting general elections from local polls but a few of the reasons why we had to suspect previous polls cannot be attached to this one.

The protest vote: When the Labour vote crashes it can just mean that people are vaguely pissed off rather than that their preferred government is changing. These votes, however, generally go to the Liberal Democrats or some other, nastier, minor party. People don't, or at least didn't, tend to protest by voting Conservative as we are still a party of the political establishment.

Transient issues: I don't think this election is simply a response to the specific charges of sleaze and incompetence surrounding Prescott and Clarke. Again the vote would probably go to minor parties. Also, we have specific poll evidence that the Conservatives have a leader and political platform which people are responding to; Cameron's high approval rating among the general public is particular evidence of this. Finally, a protest vote would see Labour hurt equally across the board whereas they were actually hurt most in the areas where you would expect a revival in response to new Tory support, i.e. not the northern cities.

It's no good so long as we aren't succeeding in the northern cities: It is important that the Conservatives become a political prescence in the entire country again but that is a long term project. Winning elections requires us to start winning the areas which deserted us in 1997 and probably relies more upon improving our desperately poor showing the large ABC1 social grouping than improving it among northern workers.

This is just a vote on European issues: This isn't a European election.

Conservatives should be genuinely pleased with this result. There is still plenty of work to be done but this is a good start.

The Decision for the EU

The European Union's decision to end talks on membership with Serbia in response to its failure to produce indicted war criminal Ratko Mladic is a reminder of the positive role it can play in the world. Offering the carrot of EU membership has led to many countries adopting policies which have allowed them to emerge with liberal democratic traditions they might otherwise not have developed. Turkey has improved its treatment of the Kurds. Eastern Europe has emerged as one of the most economically successful regions in the world with massive growth and stable democracies, particularly by contrast with a return to authoritarianism in Russia.

Allowing the Common Agricultural Policy to stand in the way of the completion of the Doha trade round is an example of where the EU fails the world's disadvantaged. Equally, there are countless examples of where it fails its own people, from plain corruption to over-regulation to a lack of respect for the will of those who wish to limit infringements on their sovereignty. However, the success of helping Turkey avoid the fate of Pakistan or the Arab states counts for a lot. Helping the Eastern European nations emerge into prosperity is equally a legacy to be proud of. It is a record in building nations that makes US power look shallow and destructive.

The role of prospective EU membership for states like Turkey is similar to the role of Marshall Aid for Western Europe at the end of WWII. Both Turkey and Western Europe faced difficult political choices. Marshall Aid mitigated against the short term costs of choosing a liberal form of economic organisation for Western European nations. Prospective EU membership similarly alters the political balance and makes it far easier for those in favour of liberalisation to establish the necessary consensus for lasting reform. While there are economic benefits to becoming a member of the EU or receiving Marshall Aid the benefits of the liberalisation needed to join or receive that aid are usually more significant.

The problem is that as the EU grows ever larger and more diverse it becomes ever more difficult to continue the other European project; closer union. More states mean a greater number of conflicting objectives and make the task of forming policy to fit all the different circumstances increasingly daunting. This is why Britain, as a eurosceptic nation, has spent so much time successfully pushing for further expansion. New members make it more and more likely that the EU will have to remain closer to its original nature as a free trade zone.

For some time the issue has been fudged. New nations were admitted, Turkey was told to wait a little longer for decades and always did. Eventually, though they will give up on prospective membership leading anywhere and the EU will lose its ability to help further states along the path to membership. Of course, this had to happen eventually but it would be a shame if Turkey, with all of its strategic significance as a large Muslim state which might act as a model for so many others, was the state the EU gave up on.

Europe, therefore, faces a decision. It can admit Turkey and maintain its role as a promoter of human rights and liberal democracy or it can sacrifice the tremendous potential of Turkey as an EU member on the altar of the false dream of ever closer union.

The BBC's biased account of bias

Only the BBC could look at its coverage and conclude that the most worrying bias was a lack of coverage of the power imbalance between Israel and the Palestinians. That imbalance is suspect as Israel is surrounded by the vastly more populous Arab states who cannot be considered neutral bystanders. Besides, Mr. Eugenides notes that at least one BBC news correspondent has demonstrated a massive pro-Palestinian bias.

The report, unfortunately, appears to have dismissed the wider problems of bias in the BBC. Their local government coverage a few years ago was a particularly awful example. Under Iain Duncan Smith's leadership the Conservatives had just won a huge number of council seats; clearly Labour was the party with questions to answer about its performance. However, the coverage, with Michael Howard as the lone voice in support of the Conservative party's performance, managed to turn the success into abject failure by focussing on the misgivings of one, previously unknown, member of the parliamentary Conservative party.

These examples show just why enforcing objectivity in TV news is such a bad idea. Everyone has there own sense not only of how to interpret facts but also of which facts are important and which are open to debate. The limitations of having this decided by a regulator can be seen in the case of the Fox News description of the BBC as 'left wing' getting it into trouble with the UK regulator. A free market in ideas and journalism as seen in the newspapers could lead to a more varied and fair TV news output.

J. K. Galbraith

The Guardian has managed to, inadvertantly, get the central point right in their account of J. K. Galbraith's life and legacy. A lot of what they said was the usual rubbish:

"A third was the convenient view, so entrenched in the 1980s, that while the rich ought to be given more to make them work harder, giving more to the worst-off would only make them work less. Hypocrisy will sleep more sweetly tonight for the knowledge that Galbraith is no longer around to look down from his very great height and skewer it."

Even the most basic understanding of incentives can tell you why jobs which very few people can do and which need to be done well pay far more than less skilled work for which there is less demand. This is the market's method of allocating scarce labour to the tasks which the economy needs done. It is not hypocrisy. That passage highlights where the Guardian's analysis of Galbraith was stronger:

"Consistently in his lectures and writings he put great themes into the language, themes which lit up the study of economics for those who had never been taught it."

His work on 1929 is a perfect example of this. The story of an irrational free market getting its inevitable comeuppance is a story which has wide currency in the wider world but can't survive economic and empirical analysis. Galbraith was a superb writer but a non-economist's economist.

Compulsory Voting

The new proposal from the ippr, which is attracting support from some ministers, to make voting compulsory is a dreadful infringement of liberty. Basic rights such as the freedom of thought and conscience are infringed by forcing people to endorse the political system by voting. Even with an option of none of the above the powerful signal that people simply do not care about politics is an important message and one they should be free to send by ignoring the polls. If local politics really is less important to most people than Big Brother (it currently isn't... the statistic that more votes are cast in Big Brother relies on that system allowing multiple votes where elections do not) then something has to be done to reform local government to make it relevant rather than forcing people to cast a meaningless vote on an issue where they do not care a jot. Election day is the time to be really careful about infringements of liberty.

If politicians want to combat falling turnout they should be working at explaining to voters why their party is worthy of the effort of a vote. To remove this responsibility can only lead to a reduced effort at keeping the attention and loyalty of voters and a less responsive electoral system. It is relevant that this proposal is being supported by ministers in a government which is clearly failing to enthuse the electorate and only being elected thanks to the prolonged crisis of the Conservative Party, thankfully this finally appears to be coming to an end. If Labour's crisis of imagination and talent means that the most positive reason to vote for them is Dave the Chameleon that does not suggest that turnout in their favour deserves the defence of the legal system. As the parties become more worthy of public support it seems entirely possible the decline in participation will cease.

I also have a problem with the philosophical premise of this report. By introducing a fine for failing to vote this move would remove the one element of sacrifice, a small amount of time, that is still involved in voting. Given the amount that has been sacrificed in order to uphold our right to vote and the gravity of the decision we are contributing to the idea of forcing anyone to take part seems morally indefensible. If someone does not wish to be involved in the electoral decision then they can accept the judgement of the wiser souls who are willing to do their part. I can't find my copy of the book in order to quote properly but the rough substitute used from the film Starship Troopers is enough "When you vote, you're exercising political authority. You're using force. And force, my friends, is violence, the supreme authority from which all other authority derives." What kind of society would force people to exercise such authority?

My MP, Oliver Heald, is opposing this report. Good work; he doesn't need to force me to vote for him.

May Day

May Day is always frustrating; London fills up with hippies on bicycles. I walked into university having to pass legions of vague idealists with unwashed hair and only the slightest grasp of reality never mind politics or economics. Can't we come up with some kind of capitalist solution here? The old Celtic festival of Beltane was a fire festival, surely such a thing could be corrupted into a frenzy of gift giving or fireworks?

When I get home I'm going to have to respond in the only sensible way. Drinking a Coke, eating a Mars Bar and watching the South Park episode Die Hippie, Die.

Becker on Inequality

I've been sending this article all over the place recently as it is one of the best explanations of why trends such as globalisation and increasing income inequality should be seen as an opportunity rather than a threat. Becker has responded to some of the comments.

Are Europeans becoming extinct?

Many different ideologies find the idea of vast falls in the European population due to declining fertility convenient. It is a favourite of Mark Steyn who uses it as a device in 'warning' the US to avoid the cultural decadence which is destroying the old continent. Equally, it is a favourite of those who support unrestricted immigration, as seen in the comment on an earlier post on this blog. For this reason the idea often goes unchallenged. Fortunately, like most predictions of apocalypse, the evidence for a collapse in population is rather shaky.

Michael O'Hara is almost hysterical based on observations like the lack of children in Milan (people don't like to raise children in cities). While others make use of 'projections' for population to 2050. If you had projected what would happen to the British economy from 1972 to 2016 you would have honestly believed that we were staring down the barrel of an income around that of Malawi. Clive Davis challenges an overconfidence in predicting over such long time spans. This challenge is particularly important as changes in population are extremely likely to be self-regulating. If population falls too low then the chances of those children gaining a good income rise (labour shortages) and this could lead to more children.

The reason why people use predictions for 2050 is that if you look at the predictions for 2025, as noted by Joshi in Coleman's Europe's Population in the 1990s, it is for a fall in the European population from 0.5 to 0.49 billion. This hardly sounds like a catastrophe in a continent far more densely populated than similar areas like North America, let alone an apocalypse. For this reason commentators looking for a crisis are forced to rely on sketchy projections to 2050.

Early evidence suggests that the trend is likely not to be maintained into mid-century collapse. Calot and Blayo, in the journal Population Studies, describe how the common pattern across Europe has been for a fall in fertility since the Post-War high that has levelled off and/or slightly reversed since the late seventies. Equally, Baines in Schulze's Western Europe describes how a large part of the change has been a compression of family creation into a shorter period once the prospective mother's career has been established. This compression would create a temporary overestimation of declines in population.

Always best to be cautious when predicting the end of the world as we know it. Many have been wrong before and, while you only need to be right once, the world keeps on spinning.

Debating the House of Lords

Yesterday I was chief adjudicator for the Bristol Open. Only a small tournament but it had some first class speakers which made it a great experience for a judge. It was a lot of fun and gave me the luxury of setting motions which I knew I would see discussed in full. The motions set were the following:

1. This house would drop the requirement for neutrality in private television.
2. This house would introduce compulsory fat camp for obese children during the school summer holidays.
3. This house would assassinate Mugabe.
4. This house would make the House of Lords 100% elected with life terms.

Final. This house would admit temporary guest workers.

The competition was won by Matthew Kirk and Danny Riley. Congratulations to both.

Seeing the idea I put forward a month or so back on this blog for reforming the House of Lords debated was very interesting. Essentially the idea is to balance the House of Commons, which has all the advantages and disadvantages of being extremely accountable, with a body which is utterly unaccountable in order to avoid problems of pork and majoritarian stamping on civil liberties. That and the discussion I had with Dave Cole on the original thread suggest to me that the following are the biggest criticisms of the plan, none of which seem critical:

1. It would remove the bishops. If a bishop really wants to run for this position then they are not prevented from doing so but I do not think that, with Church of England attendances so low, they deserve special treatment.
2. It would remove the 'experts'. When electing a politician with limited powers, they would still only be able to temporarily block the Commons, and a long stay in office I think that people might be more inclined to favour less presentational candidates. Even if this isn't the case I think that the term expert is extremely subjective and they are rare enough in the Lords that democratic will should prevail.
3. It would remove the Law Lords. I agree that this is an issue and I would suggest that as there are very few of them they could be tacked onto the system; i.e. 99% elected for life, 1% Law Lords.
4. We might elect an utter lunatic (Galloway or the BNP) and wouldn't be able to get rid of them. Individual mistakes are one in over six hundred Lords and the errors of each generation would have a limited effect on the parliament thanks to the glacial rate of change.
5. It would make the parties more powerful. I would actually think that those who needed to be elected once would be less dependent upon parties than those who were entirely appointed by the parties or who required regular re-election.
6. The Lords do no work when unnaccountable. Other bodies without re-election like the Supreme Court in the US can hardly be accussed of slacking. The reason for the current low turnout in the Lords would seem to be that many of them never ran for election and wanted a legislative role but were given it as an honour.
7. There would be a gridlock/a challenge to the primacy of the House of Commons. First, there clearly needs to be more of a challenge to the executive than there is now where there is very little to prevent rampant intrusions on civil liberties. Second, the change is limited as the Lords power itself is limited by current devices like the Parliament Act.
8. Without accountability we lose one of the great assets of democracy in our ability to select for good leaders over time. We would retain the House of Commons that will remain accountable to popular views of the moment. Having another, less powerful, body not governing at the whim of the majority would seem a valuable safeguard.

One of the best arguments in the debate was raised in a Point Of Information supporting the motion which asked how this was different to a president in his second term. The answer was that such a president would generally want to secure a legacy and ensure that his party did well in future; of course both these objectives could also be true of the Lords and this provides a sound reason why the system would not produce a lazy or idiotic chamber. The difference to a president in his second term is that there would be no certain end date for them and, as such, they would not lose influence as a President does once people know he will soon no longer be a fount of patronage.

I think that my plan stood up well.

BP

I was recently asked by the LSE Student Newspaper, the Beaver, to write an article defending BP from its critics (a critical piece was written for the same issue). As the editor didn't know the precise line of attack from the critical piece I responded to a couple of the most common critiques of BP. As the Beaver does not have an online edition here is the article:

Carnegie’s charitable endeavours have left libraries and cultural centres of various kinds all over America. However, his greatest contribution to the welfare of the rest of the United States and the world probably came not from this act of kindness but from while he was building his own wealth through industry. Innovation in the production of inexpensive steel to form the tracks for the railways played its part in making America a cohesive nation, created huge savings for passengers and, through savings in freight costs, savings in the costs of all manner of products for consumers. His work helped make the skyscrapers which crown New York. Similarly, those looking at the profitable corporation that is BP right now should be aware that its corporate activities have positive impacts which, while less obvious than handouts from governments or charity, are, nevertheless, massively important.

When listening to Gordon Brown’s complaints about how oil prices are hurting the UK economy it is important to remember that we have only just become net importers of oil and our net imports are negligible. The only way that high oil prices can cause trouble for the British economy is if they crash other economies, like the US, which are genuinely dependent upon imports of oil. As the US economy is still importing Britain’s economic sluggishness cannot be blamed on the oil price. This means that the effects, in the UK, of a high oil price are to shift income from motorists to the shareholders of oil firms like BP. Concerns about whether it can be fair for BP to be making so much profit, $22.3 billion last year while British motorists are facing stiff rises in the cost of petrol don’t stand up to scrutiny. BP dividends make up around 17% of the entire income of UK pension funds. When the introduction of means testing and tax raids on pension funds have led to a reduced incentive to save and a fiscal crisis looms on the horizon thanks to too many pensioners relying on tax income to provide for them in their, increasingly, old age increasing the income of pension funds has to be a good thing. A shift in income from motorists to pensioners cannot be seen as an injustice. Oil profits, which some commentators seem to view as money lost to the ether, actually help us get away with policy mistakes that discourage proper provision for old age.

BP’s environmental record is a bad one if compared with the environmentalist idyll of people giving up on foreign holidays and driving to work. However, if the reality that the world currently runs on oil is accepted as beyond BP control their record starts to look very good. Their investment of $8 billion over 10 years in alternative energy is a vast amount of money. It is also money being spent by a company interested in making alternative energy a practical and economical proposition rather than on basic research with only the vaguest of expectations that it will result in workable solutions. If hydrogen cars and solar power become a reality it will, most likely, be a result of investments by energy companies like BP, along with other big investors in alternative energy like Toyota. Equally, BP’s work on reducing emissions has been hugely successful, meeting its target of a 10% reduction eight years ahead of schedule, and has also been hugely beneficial to the company. BP has saved $600 million through the efficiency gains that have created this fall in emissions. Achieving significant cuts through emissions through this sort of efficiency provides a practical way forward, with current technology, in efforts to combat climate change.

The environmentalist movement can be its own worst enemy. Condemning BP is to attack on of the best hopes for improvement in the way we treat our environment. Equally, the Chancellor can be the worst enemy of the British economy. By putting in place windfall taxes on oil profits from the North Sea he hurts investment there and hastens the day when Britain’s economy can genuinely be wrecked by increases in the oil price. Taxing the profits which provide the incomes of pension funds further undermines any effort to overcome the economic challenge of our ageing population. British Petroleum is a company to be proud of.

David Miliband and the Vast Right Wing Conspiracy

Is there actually anyone competent left in the Labour party? Currently David Blunkett (twice), Hilary Armstrong, Estelle Morris, Peter Mandelson (twice), Keith Vaz, Stephen Byers and more have already been forced to resign. Tessa Jowell, John Prescott, Charles Clarke and Patricia Hewitt have disgraced themselves enough to warrant resignation if the allegations that Prescott did more than just sleep around are true.

That leaves Tony Blair (who's promised to leave), Jack Straw (why?), John Hutton (who Brown clearly dislikes), Margaret Becket (why?), Alistair Darling (dull), John Reid (should really be a bouncer), Geoff Hoon (demoted for a reason), Peter Hain (dull), Ruth Kelly (hasn't there been an education scandal yet?), Hillary Benn (is the country ready for another Benn yet?) and Des Brown (who?) in the Cabinet and not proven liabilities. Hardly the most inspiring of lists.

Perform a similar experiment for the end of the Major years and you had Ken Clarke, Michael Howard, Michael Portillo, Malcolm Rifkind and William Hague all left with sufficient credibility and substance to later make leadership challenges. Like them or loathe them they were national figures none of whom had done anything worth resigning over. Probably the closest to such notoriety was Michael Howard thanks to the Paxman interview but I doubt that any of the current Labour scandals will be looked back on as such non-events. Perhaps Alistair Darling could mount a John Major style dark horse ascent but I doubt it. None of the names in the Labour list look like they are going anywhere despite their being ministers and, hence, those you would expect to become national figures during Labour's long stay in government.

Given that we still, theoretically, are a country of cabinet government where a Prime Minister is only the first among equals it is important that Brown have impressive figures around him. He is hardly the magnetic political personality required to carry a government alone. How on Earth are the Labour party going to build an impressive government with such an unimpressive set of ministers? Granted there are Brownite back-benchers sure to be promoted but they will be establishing their national reputation pretty much from scratch.

Of course there is one name in the Labour cabinet I haven't mentioned yet. Ask a Labour supporter to name someone impressive in the parliamentary Labour party and they will almost certainly give you one name; David Miliband. David Miliband is apparently a "thinker" and the great hope of those still attached to the Labour party. This Observer article gives a decent account of what the Blairites think of him.

What does this mean for the Tory party and blogosphere?

We have ourselves a target... being local government minister hasn't he, just once, offered to alter the funding formula in favour of the local council which paid the most into his Tuscany fund? Being a Labour minister surely he's paid an illegal immigrant he met in a Carphone Warehouse to come back to his house and choke him while he touches himself?

We need to find out... get to work people.

Brown's Advice to the World on Oil

Over at the ASI Tim Worstall is explaining why a lack of oil supply is due to intervention in the oil markets in the new oil demanding countries as much as it is to any failure of the free market. What he doesn't mention is that we can find such unfortunate intervention far closer to home than Mexico.

The free market response to rising oil demand is that it will increase prices which, in turn, will incentivise new investment and make new fields profitable. It's no co-incidence that North Sea oil came online not long after the last oil price shock. This mechanism is ruined, however, if you take the opportunity, as the Chancellor has done, to place a windfall tax on oil profits as this endangers the market signal that increased investment in oil will be rewarded.

This harms investment in the North Sea and is likely to hasten the UK's move away from supplying most of its own energy needs. This will make the UK more vulnerable to oil price shifts and make the oil prices a more credible excuse for incompetent Chancellors in the future. At the moment a rise in the oil price is no direct concern for the United Kingdom, particularly if countries like the US which genuinely depend on oil grow more robustly.

The Safety Elephant fails to keep us Safe

Charles Clarke is currently trying to separate himself from the utter mess that is allowing hundreds of foreign nationals who should have been considered for deportation to remain in the UK after completing their sentences. Even after this problem coming to light there is mounting evidence that the response has been slow enough to allow hundreds more after the Home Office was aware of the problem. All this makes the concerns over reducing compensation to victims of mistakes by the Home Office even more salient. Is this a department we want to give immunity to compensation claims?

Iain Dale doesn't explain his mystifying personal attachment to a Home Secretary who has spent his time restricting civil liberties, freedom of speech and is now failing to fulfill his basic duties of administration but still comes to the correct conclusion; Charles Clarke should clearly resign.

The Conservative Movement and the Democrat 'netroots'

A broader conservative movement beyond the Conservative Party will play a key part in making the renaissance in British right wing politics become a lasting change. As such the multitude of blogs and campaigning organisations currently forming have to be a source of hope. However, at this, relatively early, stage there are choices which have to be made about the kind of movement that we want to be.

Last week's Economist contained an article about the failure of the Democratic party to take advantage of the weaknesses created by Republican incompetence on major issues. The article made it clear that the Democratic Party's 'netroots' can create problems by preventing the party sticking to the center and expecting the Democrats to focus upon their pet causes (indicting Bush is a favourite):

"The embrace is awkward, though, because the netroots are always goading
the party to get as angry as they are. They tend to favour the most frothingly
anti-war, Bush-bashing candidates, who usually lose at the polls."

I think that the Conservative Movement has the potential, and is likely to be, a huge boon to the Conservative Party but it will need to avoid the temptation to force its priorities, from Europe to Immigration, on a party that needs to appeal to a broader mass of voters. Disagreeing with the party is part of a debate in any mature political movement but that debate has to keep the political reality the parliamentary party is facing in mind.

Layard makes me less Happy

Layard's book on happiness is out in paperback and continues its inexorable march to the forefront of left wing economic thought. His work has always upset me (I'm not the only one) as I have a feeling that he, as an LSE academic, reduces the value of my degree every time he further embeds us into the socialist ferment. The precis of his argument that is contained in the New Stateman article published on his page at the Center for Economic Performance is more than sufficient to allow you to understand what he is getting at and why he is wrong so I wouldn't recommend buying the book unless he actually convinces you with the article and you want to implement his awful ideas. If someone tells me the book has seen him perform a U-turn then I might consider reading it, however, I doubt that is the case and as every page of the New Statesman article leaves me less convinced I don't think a book length dose of Layard will leave me converted.

He leads into the article, and I presume the book, with the fact that survey evidence suggests no increase in happiness since the 1950s despite vast increases in income. This is, as he notes, due to the fact that people's aspirations also change over time in line with their incomes; the ability to own a TV made you a king in the past but now seems dull and ordinary. He then argues that the rise in aspirations means that there are externalities to being rich which deserve high marginal taxation in order to reduce their numbers and compensate for the "pollution". Layard has, therefore, justified the crudest kind of old socialism which explains why he is being published so widely in founts of common sense like the New Statesman. Flaws with Layard's work in no particular order:

1) His study of happiness is vulnerable to the Lucas critique. While the notion that only relative changes in income matter may be true now if the engine of steady increases in income stops this result could certainly change. Perhaps people only treat incomes as a relative quantity when rising absolute amounts are a given and they have the luxury of comparison? Perhaps the steady state happiness with no growth is a lower amount?

2) He assumes that global governance can be established. Were high marginal rates adopted in Britain we would be able to compare ourselves with the French and everyone else we had become poorer than. We would also suffer a chronic decline in national power. People like their team to be winning and would be unhappy to see our collective status so diminished.

3) He assumes that income comparisons are made between a person and the mean income. More likely people compare to their peers (those at a similar status to themselves). I find it credible that seeing richer students around me makes me feel poor and inadequate. However, Bill Gates is simply outside my frame of comparison at the moment and I would expect this is true for nearly every person who isn't incredibly rich. This suggests that reducing the number of rich people won't make much difference to the happiness of the middle classes or poor.

4) He first argues that comparing yourself with those around you is an inescapable part of human nature and then almost immediately that performance related pay is dangerous because it encourages you to compare yourself with those around you.

5) He dismisses the connection between high levels of legal protection of job security and unemployment despite the simple logic that making people hard to fire makes them far more risky to hire and the evidence available from a cursory examination of the results in the continental European states. He does this by arguing that there are unnamed "exceptions" and claiming a lack of welfare to work is the problem. Given that welfare to work only affects the willingly unemployed is he arguing that there are plenty of job opportunities available in Germany and France right now? That the unemployed of the banlieues are all choosing to remain on benefits because the income from working isn't worth the effort?

6) He uses the data on the decline of trust in others as evidence for a general moral decline rather than using the simpler explanation that people spend more time dealing with those they don't know and should be careful about trusting.

7) His logic extends to other activities besides getting rich which have implications for the happiness of others. Ann Coulter probably upsets far more people than she enthuses. The clear implication from thinking in happiness terms is to censor her. Equally, some people are real misers and will bring down those around them; thinking in terms of happiness suggests shunning them or worse. Without liberalism the kind of crude utilitarianism Layard is proposing requires some fairly unpleasant behaviour; if Layard is willing to admit liberalism in cases of free speech then surely he has to extend it to free economic activity?

8) He ignores the Brave New World critique. For someone who wants to establish "happiness" above all else this is surely a massive failure. If we all want to be really happy why not just drug ourselves silly? His section on Mental Health sounds positively sinister in this light.

I'm sure there are plenty more reasons why Layard is wrong; that's just a quick survey. In the end he has chosen a measure of human progress (happiness) which sounds inoffensive but which is used as a blunt tool to attack human progress on the grounds that keeping up is stressful. This is a part of the intellectual tradition that has us drugging our poor until they can't feel the pain any more. This is the latest manifestation of the Left's ability to find a new way to be wrong with each passing generation.

Immigration Policy and the Points System

Eventually the Conservatives will have to form an immigration policy. I am entirely with the Cameron strategy of spending as little time talking about immigration as possible. The political benefits of increasing the enthusiasm of a few core voters can't be worth trading for losing the chance to fight our reputation as the nasty party. Equally, the argument that we need to focus on immigration policy in order to undermine the BNP seems to be predicated on the idea that the BNP are highlighting reasonable concerns about immigration; they are not. The proper response to the BNP is to explain why they are wrong rather than attempting to reassure people that mistaken notions of our country being swamped are being taken seriously. However, it is still important that the Conservatives have a policy offering on such a contentious issue. To be without a convincing policy on immigration would be a dismal failure of imagination.

A few axioms from which policy formation can begin:

1) Immigration is generally good for the economy as it alleviates skills shortages in key sectors of the economy.

2) Too much immigration places a strain on the ability of any society to integrate the newcomers and ensure smooth community relations.

3) We have a moral duty to provide safe haven to those fleeing persecution abroad.

With axiom 3) in mind it is pretty clear that leaving the 1951 convention would be a dereliction of duty. We do not take a particularly high number of asylum seekers relative to the rest of the world so have no substantial grounds to complain. There are justified complaints about the failure to deport those who are judged to not be genuinely seeking asylum but other than that complaints about asylum seekers are morally bankrupt.

With 2) in mind it seems sensible to have some kind of limit on the numbers of economic migrants allowed in. I am not sure of any way of 'automating' this decision so I think it is probably necessary to set a limit for total immigration of X thousands. The number of economic migrants allowed would then be X - asylum seekers. If asylum seekers exceeded X then some flexibility could clearly be shown as that would probably mean an exceptional humanitarian crisis.

2) also begs the question of how we deal with those with no desire to integrate and form a constructive member of British society; the Germans have a, fairly radical, solution that I mentioned in a previous post.

The final question is therefore how to allow for 1) and ensure that economic migrants are allowed in who provide the greatest benefit to the UK. The problem with using a points system, as we have recently introduced, is that we are relying on the government to predict and ration out a valuable economic resource. Government is very bad at this and makes mistakes, as it has in Australia, which leave sectors of the economy without the workers they need and others oversupplied with immigrant labour.

The best solution would seem to be to auction off slots for economic migrants to employers who wish to employ migrants. Once a company has bought a slot that entitles it to bring in an economic migrant and it should advertise for migrants abroad as it would for workers in the UK. This would ensure that the migrant slots are allocated to where they are most needed. As the total number of economic migrants would be determined by the exogenous variables of the political target and asylum applications economy wide skills shortages would still increase the general price of obtaining a worker and the incentives to develop the skills of current citizens would not be significantly endangered. The money raised would also be something of a fiscal boon in place of the administrative cost of a points based system.

The basics of a conservative immigration policy?

The NHS

Tim Worstall links to an article by Simon Jenkins which provides a brilliant history of exactly why the NHS is needing to go through so much painful reform now and exactly why the idea of Labour saving the NHS from the Conservatives was always a joke.

It also explains exactly why Mr Eugenides is having such trouble adjusting to Hewitt's analysis of the state of the National Health Service.

A few choice selections from the Jenkins article:

"Yet as a recent report for auditors KPMG by Rupert Darwall — a director of
the Reform think tank — has shown, Thatcher’s fundholding yielded a more
dramatic fall in waiting times than did Labour’s extravagance."

"When Blair came to office in 1997 he wrecked this structure out of sheer
political vengeance. His health secretary, Frank Dobson, dismantled fundholding
and the internal market and reduced the NHS to administrative chaos. "

"After a further doubling of health spending Blair has returned to where
Thatcher was in 1987, with fundholding, trust hospitals and internal markets.
This time he appears to mean it, but he will need to keep his nerve."

"GPs should go back to the arrangement before the war, under the wing of elected local health committees. They were cheap and they worked. There will be “postcode lottery” rows. But democratic accountability will be clear, as in Scandinavia, Germany and other countries where healthcare contrives to be better than ours yet is not “nationalised”. In Denmark just 5% of patients need treatment that cannot be supplied within the remit of their elected county health authority."

The Economics of getting fat at the cinema

Apparently childhood obesity is rising at something of a shocking rate. I don't honestly think there is much the government can do about this even if it wanted to regulate what is a lifestyle choice. With the amount of heavy people around it is somewhat disingenous to claim that people do not know that obesity is a possible result of eating too much and not exercising. Equally, while the details of the health implications may not be understood the social consequences of being fat are regularly brought home by media and peer pressure; unlike cigarettes, obesity really isn't cool. A fat (fatty food) tax necessarily means taxing the poorest people most and only strength of anti-corporate feeling stops even the left dismissing it on those grounds. My own experience is that I took up sport as soon as I hit sixth form and didn't have the school minimum forced on me so I am suspicious of government programmes to get the nation exercising.

What I am currently struggling to understand though is the change in the size of drinks at cinemas. When I first headed out to the States I was amused that all of the portions were a size or two up from what I expected in the UK. Now it is safe to rely on a small being what used to be a large and when I ask for a small it is almost certain that I will be told a large can be mine for a negligible increase in price. My best understanding of the economics behind this is that the increase in cost to the cinema of increasing the size is insignificant but that an increase makes people less likely trouble over paying extra. Despite this it would seem that the cinemas probably cause some people with appetites less formidable than mine to either not buy a drink or share it between two or three people. This would seem to be quite a risk as this halves the cinemas income from the sale and therefore offsets a lot of marginal rises in price. The effect of all this on me is unambiguous though, I order a small and drink more than I did before when I ordered a medium.

That I am talking about the old days at twenty two worries me. Only trying to relate to myself before the existence of the Internet and e-mail gives me a similar shock of modernity.

On another note popcorn's margins are some of the highest of any product; less profitable than Kalashnikov's but without the risk.

The BNP and the Left

Alice Evans is perplexed by Lord Tebbit's description of the BNP as left wing and cites the letters in the Telegraph today in response to Tebbit's argument.

Objectively and thoroughly assessing this view is clearly difficult because the definitions of right and left wing do not properly capture the subtleties of political belief but I think Tebbit's analysis is an entirely sensible one. There are two plausible definitions of the right wing which have value in making our assessment of the BNP's leanings:

1. A belief in the value of free markets and distrust of the constructive value of state power: This fits with the modern conception of the right wing's views on economics. When Stiglitz describes a "market ideology" as a great evil he is clearly positioning himself on the 'left'.
2. A distrust of radicalism: Right wing parties have always had a belief in the value of tradition as a social glue and a repository of collective experience in making uncertain policy choices.

As Tebbit points out that the BNP is clearly on the socialist side of the economic debate. Opposition to globalisation, belief in nationalising services considered important and a suspicion of the interests of capital are the mark of the left. On one of the key battlegrounds of modern politics the BNP clearly cannot be described as right wing.

Equally, the BNP shows little attachment to incrementalism. A conservative, right wing, response to concerns over immigration, which are widely held, is to take action to reduce new immigrant numbers and encourage integration. A classic right wing response to immigration is the one put forward by Krauthammer recently. Radical responses such as repatriation advocated by the BNP cannot have much attachment to those with an interest in social stability and suspicious of radical panaceas.

The two letters responding to Lord Tebbit's both miss the point. The first sees the sum of the right wing in authoritarianism. Tebbit has already answered this point: As the most authoritarian states of the 20th century were clearly left wing (Maoist China, the GDR with the Stasi, the USSR) this cannot be a preserve of the right. To identify all those who believe in maintaining the state's authority as right wing is clearly mistaken.

The second letter argues that as the Nazis were right wing the BNP must also be. This would work if the other fascists were objectively right wing but they are not. The Nazis also believed in state control of industry, autarkic trade policy and a radical's break with tradition. This is why they were called the National Socialist party and why supporters so regularly moved between the Nazis and the Communists. Mussolini was a notable transfer from Socialism to National Socialism and saw little contradiction.

Tebbit is clearly correct that the BNP as fascists do not fit on the right wing of the ideological spectrum.

Dave the Chameleon made easy

The "Dave the Chameleon" attack ad is funnier with a few modifications by Tim Ireland.

Dalrymple on lawless England

Dalrymple is one of the most powerful moral commentators writing today and his new piece for the City Journal is no exception. He discusses the modern trend towards public policy being focussed upon managing people's thoughts and private behaviour rather than preventing genuine acts of violence and criminality; lenient towards violent crime but hard on smokers. This suggests a move from the night watchman state to the parallel opposite of one that enjoys its nannying reponsibilities but finds maintaining the peace an encumbrance. Such a move is an abandonment of the traditional virtues of the English nation.

I do not see a desire for this move in the public; people favour a more forceful approach to maintaining law and order and view intrusions into their ability to make their own decisions with derision at best. However, it is generally true in a democracy that a public gets the leadership it deserves. Pretending that Chirac, Sarkozy et. al. are failing France neglects the reality that had Thatcher been borne French she would probably have wound up a frustrated councillor at best. This tendency means that I cannot dismiss the idea that we are not being led astray by our political class but actually want a state telling us what to do and giving those who leave someone permanently disabled in a vicious assault a token sentence. What I'm having trouble working out right now is why.

A Tory Reshuffle?

ConservativeHome is being briefed by anonymous sources that George Osborne may be replaced by William Hague as Shadow Chancellor. I think that if this happens it could well prove to be an unfortunate mistake. When Osborne spoke to the LSE Conservatives he was reassuringly confident and his grasp of economic policy impressed all those present. Despite him being in a room with many well trained non-Tory economists he left little doubt of his command of the fiscal options available to the Treasury. By comparison Hague's past form is to be incredibly impressive in minor roles and then fail to control a larger brief (the leadership).

Whoever the anonymous contact was didn't help his case by describing how campaigning on immigration and law and order was necessary to do well in the local elections. As David Davis is currently the Shadow Home Secretary it seems unlikely that this is due to not having right wingers in the right places. Cameron has maintained a tough stance on crime and the lack of material on these issues is a result of the long policy formation schedule as much as anything.

The main rationale appears to be that by appointing a right winger as Shadow Chancellor Cameron can assuage the fears of the right wing of the Conservative Party on the central issue of taxation. I am sceptical of the foundations of this fear as it is based on the statement that tax cuts would not be prioritised ahead of economic stability. This is an ultra Conservative statement (Herbert Hoover among others would be proud) if you read it literally as a statement that if the public finances make cutting taxes an imprudent risk you will not countenance them (Keynes criticised Hoover for prioritising a balanced budget over fiscal stimulus). An awful lot of unfounded speculation is required to take it as suggesting that Osborne is a Keynesian.

New Design

The amount of black on my blog was becoming oppressive. The new design makes the site a much easier read I think. I hope you all like it.

The Hidden Costs of Charity Parachuting

Buried away in a tiny Telegraph column this week was a reference to one of the best academic studies to emerge in a long time. Doctors in a Scottish hospital have looked at the hidden costs of charitable parachuting, to the health service in particular, and published the results in the journal Injury (the link is to the abstract unless you or your institution subscribe). They found that the injury rate was 11% and the serious injury rate 7%. Minor injuries cost the National Health Service £3751 on average and serious injuries £5781.

As the average parachutist raised all of £30 (this is just a day out after all) each pound raised for charity cost the NHS £13.75. Every one of the charitable types who feels terribly virtuous raising money for charity in this way is actually preventing the health service treating the sick.

Dave the Chameleon

The new Labour party political broadcast is so bad it actually hurts to watch it. It cites as contradictions in Cameron's political views not beliefs he has actually changed but the statements that he wants to be leader of the Conservatives, is the heir to Blair and is a liberal Conservative. As he is a liberal leader of the Conservatives who could yet succeed Blair as Prime Minister this is only a contradiction in the Labour Party's tiny collective mind.

If Labour really regard Cameron's adoption of policies associated with other parties as dismissable on grounds of inconsistency alone doesn't this suggest that they are approaching policy formation as an exercise in dogmatic rigidity. Accusing someone of being open minded can surely backfire. Charging Cameron with being superficial when your broadcast is of an animated chameleon and his is focussed on the environmental record of various Tory councils has to ring hollow.

Dave Cole is a friend of mine from the LSE and the Labour council candidate running in St James ward in Westminster and, in his newly revived blog, utterly condemns the broadcast which is supposed to be supporting his election. When even the most ardent of Labourites is put off by their election material surely it is time for a rethink at Labour HQ?

Stiglitz demeans the Nobel Prize

Stiglitz has demonstrated without a doubt that it is possible to be a very successful academic with the intelligence of a massively overweight domesticated cat. His article on China for Comment is Free is one of the most poorly argued and substantiated pieces I have ever read.

He notes that China has seen massive growth in recent years. He then notes that China has often upset the West and Washington in particular. He connects the two to establish that China's success has come from its plucky rejection of the Washington Consensus. Apparently the reason for its success in raising GDP is that it hasn't focussed on GDP but instead on the environment.

Of course this is complete rubbish. The Chinese state is massively concerned with GDP with internal fears that if growth slips below 7% there will be serious social unrest as discussed in this Deloitte report (PDF). By contrast all they have done to justify Stiglitz's optimistic account of their environmental policy is make sure that the "new plan places great emphasis on the environment". Taking statements of benign intent from a Communist state as gospel is surely a mistake the Left should have left behind some years ago after the Soviet growth miracle turned out to be fool's gold. The actual picture, as chronicled by Jasper Becker in The Chinese, is that the Chinese environment is one of the most heavily damaged in the world with collosal pollution problems in the cities and water shortages in vast swathes of the country thanks to Mao's grand schemes gone wrong. It's plans on global warming will not make much of a dent in the amount put out by the hundreds of new coal power plants it is planning.

Equally he is incredibly sanguine about the prospects for the new Chinese plan for education. Again the reality can be seen in this report by Becker for the South China Morning Post: The Kuomintang in 1936, in war time, spent 3.6% of GDP on education. This had fallen by 1992, in peace time, to around 2% of GDP. Becker notes that Tony Benn and J. K. Galbraith were making the same mistakes as Stiglitz back in the seventies and trusting the absurd story put out by the Communist party of superb new education schemes. Of course things are improving with rising incomes but the reality is that Chinese education is paid for by fees at school and university level. Chinese public services generally have far less state support than those in the West and certainly look nothing like Stiglitz's visible hand guiding the market.

That the Chinese state is a great force fighting inequality is palpably absurd. It's officials enrich themselves by taxing the poor to the point of rioting and, as reported recently on Sky News, confiscating their homes without compensation. A massively corrupt state means that property rights cannot protect those who have fallen prey to bureacrats on the take. By contrast government officials in expensive cars with tinted windows roaring around Chinese cities symbolise the wealth of the civil service elite. The grand plans that impress Stiglitz so much should come second to the state ending its role as an active promoter of inequality.

Finally the idea that the state is responsible for rapid growth and maintaining economic stability is absurd. As reported by Allen, Qian and Qian, the growth rate of the formal (mostly state led) sector has been around a quarter of growth in the informal (private) sector despite the huge advantages in financing and legal protection secured by state power. Equally, the potential for instability comes from the massive bad debts contained in the state led financial system and from intervention in its currency encouraging unprofitable industry rather than from unmanaged capitalism.

Fortunately, the Chinese don't take people like Stiglitz seriously. Marginal Revolution reports that the Chinese were the most likely of several countries surveyed to agree with the statement that the best system is the "free-market economy" (more so than the Americans). While the statement is likely to mean different things to the different groups interviewed support for it among the Chinese does suggest they have seen the difference between the socialist and capitalist parts of their nation and know which they prefer. Anyone who has been to Beijing's Silk Market or wandered the streets of any of the bustling cities will see that the Chinese can make superb capitalists if their state gives them the opportunity.

"Big Nuclear"

Greenpeace have rebutted a report from the Chernobyl Forum working for the IAEA, WHO and a number of other organisations and UN agencies. While I do not have the means to establish whether Greenpeace or the Chernobyl Forum are correct in their assessment of the death toll from the nuclear disaster one particular piece of logic infuriated me:

"[the nuclear industry have a] vested interest in playing down Chernobyl because it's an embarrassment to them".

Given the membership described above it hardly makes sense to describe the Forum as part of the nuclear industry but even if it was couldn't a similar statement be made about the Greenpeace rebuttal?

"Greenpeace have a vested interest in playing up Chernobyl because it helps their fundraising and campaigning against the modern nuclear industry".

Wouldn't it be easier if everyone debated the issues rather than their opponent's character?

Cameron's Dog Whistle

Margaret Hodge believes that there is going to be a big rise in the numbers voting for the BNP in her constituency and others like it. Apparently concerns over housing combined with an influx of immigrants have proved fertile ground for an anti-immigration challenge in Labour safe seats.

It should not be too much of a surprise that it is Labour dominated areas which are seeing the rise of the BNP. Immigration is an overwhelming economic good but it has to be accepted that there are winners and losers. Increased competition for low skilled work threatens those who are already poor. These people are generally Labour voters. Conservative voters are concerned about immigration but are mostly better off and, hence, for them immigration is a far more abstract issue. They do not live in the areas immigrants move to and do not work in the sorts of jobs that immigrants generally compete for. Equally, they are not in competition with immigrants for housing and other limited resources. Instead they have the luxury of worrying about more distant issues such as the environment.

This logic raises some interesting questions about whether David Cameron is really attempting to convert enemies who will never vote for him. Environmental issues and the other elements of being a 'nice' party matter most to the middle classes for whom other issues, like immigration and social breakdown, are less pressing. Talk of the 'metropolitan elite' who the Conservatives cannot recruit from misses the simple point that it is the votes that the Conservative party most needs to win, the swathes of the middle classes who did not return to the fold at the last election, who will base their vote most upon a broad conception of whether a party is one they would invite for dinner. Of course, issues like tax and the management of public services will still form the central battleground by the time of the election but while those policies are still being formed and the election is years away changing the perception of the party such that we cannot be dismissed as nasty is a fine way for Cameron to be spending his time.

Of course, this focus upon becoming acceptable to the middle class who have deserted the party since we last won elections does not mean that our long term fight for the votes of the northern cities needs to be sacrificed. Talking about the environment is a dog whistle which those who spend their time worrying about immigration will not hear. As we are still committed to maintaining a tough stand on issues like law and order we will retain the policies required for the slow struggle to revive our presence in the north.

Cameron using dog whistle politics to pursue Conservative core voters? More plausible than it sounds.