Monday, December 31, 2007

Grizzly Man

I watched Grizzly Man last night. Gracchi's review of the film is superb and there's not a lot I'd like to add to it. He gets to the core of the film with admirable clarity and perceptiveness. There's little sense repeating him except to confirm that this film is well worth watching.

All I'd add is that I found the footage of Timothy Treadwell (the Grizzly Man of the title) with the foxes more distinctive than either Gracchi or Werner Herzog (the filmmaker) did. The bears did seem totally uncaring with their only real reactions to Treadwell a hostility if he got too close and, finally, killing him when they were hungry. By contrast, I do think there was a genuine reaction from the foxes. They are animals with a social instinct that, as we do with dogs, humans can, I guess, become a part of. At times he did seem to have formed a connection with them more genuine than the one with the bears that were more central for the film and Treadwell himself.

I would guess that the foxes weren't enough because the relationship was more genuine. As Gracchi says Treadwell wasn't after an authentic, reciprocal relationship but something unreal. He found love that could not be requited safer. While the relationship with the fox was not real in the sense that human relationships are I still get the sense he preferred the complete fantasy of his relationship with the bears.

Sunday, December 30, 2007

The Closing of the American Mind

I've just finished reading Allan Bloom's The Closing of the American Mind - just twenty years after it was written. While its title and content is directed towards Americans Harry Mount is right to argue that the disease now afflicts us and all the Western nations.

Bloom's masterpiece is hard to precis. It begins discussing his students and how relativism has closed their minds; how a doctrine of 'openness' has perversely undermined serious dialogue between different opinions and cultures. It then goes on a tour of Western philosophical thought illustrating the struggles that brought us to where we are now. My understanding of his critique is that we have lapsed into nihilism without taking the condition seriously. We cannot take seriously old visions of the good life and have broken the processes and destroyed the environments in which new visions might flourish. He sees this as a broad problem for Western civilisation but sees the crucial centre of the problem in the decline of liberal education within the Universities.

This isn't a book to discuss in one post and I'm sure it will be brought up frequently on this blog in the coming months but what I thought I'd note right now is how it relates to Dalrymple. Theodore Dalrymple's social conservatism has been a frequent topic of mine over the last year and relates in a very interesting way to Bloom's work. Dalrymple discusses (most effectively in this essay - which I will keep linking to until I'm satisfied every one of this blog's readers has read it) how the relativism of the elite creates desperate social problems for the disadvantaged.
Dalrymple's work is excellent but if you only read Dalrymple and look at the problems of the poor it is as if you are studying an oceanic earthquake by measuring coastal waves and understanding the misery of those they make homeless. You need to understand the problem at its source. The source of the awful problems Dalrymple describes is in the elite and their intellectual decline. A philosophical decline in the West. Hopefully Bloom can provide a valuable first step in understanding that source of our problems.

Friday, December 28, 2007

The Economist on the changing nature of equality

This is brilliant. The whole article is worth reading but this section illustrates the point they're driving at:

"You can see this levelling at work in markets for transport and appliances. You no longer need be a Vanderbilt to own a refrigerator or a car. Refrigerators are now all but universal in America, even though refrigerator inequality continues to grow. The Sub-Zero PRO 48, which the manufacturer calls “a monument to food preservation”, costs about $11,000, compared with a paltry $350 for the IKEA Energisk B18 W. The lived difference, however, is rather smaller than that between having fresh meat and milk and having none. Similarly, more than 70% of Americans under the official poverty line own at least one car. And the distance between driving a used Hyundai Elantra and a new Jaguar XJ is well nigh undetectable compared with the difference between motoring and hiking through the muck. The vast spread of prices often distracts from a narrowing range of experience."

Combine this with the fact that the new income inequality is driven by differentials in skills, as set out brilliantly by Becker, and it should become clear that very different policies are in order. The Economist's arguments suggest that we can take a long-term approach to relieving poverty - there is not a driving need for relief right now. Becker's suggest that improving human capital can bring the poor out of poverty - there is not some other problem keeping the poor from improving their condition.

All that suggests that creating the social and institutional conditions for the poor to improve their human capital is the right way forward. Those who see benefit spending as the way to end poverty should think again.

Thursday, December 27, 2007

Misplaced self-righteousness

This, via Iain Dale, is full of misplaced self-righteousness. It assumes that fixed term parliaments can only be opposed by those who are "spineless and self-important".

"The Case" on the website of the campaign for Fixed Term parliaments consists of a single deeply flawed article. Unless there is some masterly treatise elsewhere that neither Iain Dale, the campaign for fixed terms nor the Our Kingdom blog have felt fit to link to we'll have to assume they don't have a better case. If they don't then they are astonishingly arrogant to think that anyone who disagrees with them must have some moral failing. Either that or Anthony Barnett's brain is on holiday.

Sad news from Pakistan

Benazir Bhutto wasn't perfect. There are few saints in any politics as troubled as Pakistan's. However, she was a democrat and a moderate and her murder by extremists is a blow to Pakistan's better nature. Her death marks a sad end to a troubling year for Pakistan.

Wednesday, December 26, 2007

In the end

I always find films and books concerned with the death of a society fascinating. One of my favourite histories is Runciman's description of the fall of Constantinople. I loved Children of Men as much as any film I've ever seen - although my interpretation of it might not be what the film maker intended. I think that when such stories are handled well the characters' responses can tell us things about how we respond to external social shocks. They also beg deep questions about the direction our own society is going in.

As such, the Telegraph's review of I Am Legend is dissapointing. It sounds like the film has a great start considering questions of what someone does if their society dies, how the bee copes without the hive, but then degenerates into an unspectacular zombie film. I'll still go and see it, though, and report back.

Update: The Telegraph's review is basically right. I think it makes too much of the difference between the early stages of the film and the end though. All the content, through to the end, relating to the disaster and his survival alone is good but never quite engrossing enough to be great. There isn't anywhere near the emotional power or incredible style of Children of Men but it's interesting and worth watching. The monsters are lame but they mostly function as a nameless and unseen threat so their offensiveness is limited. All in all, I'd probably be more positive about this film than the Telegraph was and it only really suffers when you compare it to the masterpiece that was Children of Men.

Tuesday, December 25, 2007

Monday, December 24, 2007

All our potential

Fraser Nelson has a brilliant post on the CoffeeHouse which sets out the tragic number of deaths among the old each winter. Excess mortality was 23,900 in 2006-07 and Norway - despite hardly being the warmest of places - typically has just over half the rate we do. There is a political conclusion that should be taken from this: measures like the Climate Change Levy, Emissions Trading Scheme and Renewables Obligation that increase the price of energy have a hefty human cost. However, I'd like to focus on a more philosophical question.

Nelson's central point is that we just don't give the deaths of pensioners the attention we should. I don't think this is merely a matter of fashion; it isn't just that other political issues have more partisan potential.

Instead, there is a cognitive bias created by the utilitarianism of the modern discourse. In modern politics we're all thinking in terms of the greatest happiness of the greatest number and approach each policy recommendation longing to ask 'how many utils?'

When we try to assess the value of saving a life we do the same and think in terms of the number of utils lost. Years of Potential Life Lost is the translation of this concept into terms that can be applied to healthcare debates. It is usually understood as the number of years that the deceased could - had they lived - have expected to live. It is the utilitarian opportunity cost to dying - the life you might otherwise have lived.

To make calculations simpler it is usually just life expectancy minus age at death. It is then often time discounted as years of life (just like monetary sums) are more valuable when we don't have to wait as long for them. Even if years of life in the future are discounted at 3 per cent - as the Americans apparently think it should be - the deaths of old people aren't going to be judged nearly as important as those of the young.

That might not seem outrageous. To a certain extent it reflects a quite ordinary moral intuition that it is somewhat more tragic when someone dies with their life ahead of, rather than largely behind, them. I think that Atonement did a great job of portraying an opportunity costs-based understanding of the tragedy of death (I'm worried I'm the only one who took that to be the film's central emotional message). Its final scenes portrayed what could have been if the couple the story revolves around had lived and this gave a real tragedy to their unnecessary deaths. However, in my view this principle is taken too far by the modern policy debate and explains the callousness with which the old are treated.

To get your around why this concept can be so toxic imagine applying it to another group: the poor. Someone living in Calton - near the centre of Glasgow - has a life expectancy of 54. I'm not sure what the life expectancy of someone from my socio-economic group is but it could well be over eighty. At 24 that means a significant difference in our Years of Potential Life Lost if we die. The utils cost if I'm allowed to die unnecessarily is significantly higher. I'm less likely to die at a relatively young age from some other cause and so have a greater expected life in front of me. I don't think that the ONS revision of its productivity figures for healthcare to take account of rising incomes is, in principle, very far from this at all.

Many economists are under the impression that policy makers don't really 'get' opportunity costs. I think that might be wrong. Perhaps policy is predicated on opportunity costs, combined with radical utilitarianism, far more than it should be?

Montaigne described the purpose of philosophy as being to prepare us for the horror of dying - a particular terrifying moment. He described this as an alternative to the viewpoint of Cicero who saw the purpose of philosophy in preparing people for death - the finality. Montaigne's view might provide us with an alternative reason why healthcare should try to avert death.

We should try to stop people dying because of the direct human tragedy of the process of death no matter how painless. While we will all have to die at some point there is still a very real imperative to spare people when we can. What happens next is a matter for fate, chance or God (take your pick).

If we can balance our opportunity costs understanding of death with a more humanitarian concern that people should avoid the mental horror of dying then we might, as a society, attach more priority to care for the elderly.

Saturday, December 22, 2007

Man of the Year

Iain is right, it should have been Patreus.

I don't think many of us really saw what has been a substantial turn around in Iraq coming. Who would have thought, before the surge began, that we could ever see a sub-headline like this one in the Guardian: "Attacks plummet as Shias join Sunnis in neighbourhood patrols to tackle militants and reunite communities".

Things aren't perfect. Political progress is elusive and there are still some very unpleasant sectarian confrontations going on. It could still go wrong but there is now a very real possibility of a decent outcome in Iraq. That's an amazing achievement.

Wednesday, December 19, 2007

Germany defends its carmakers

Aston20martin The BBC reports fury in Germany at EU proposals to restrict emissions from new cars:

"German Chancellor Angela Merkel has opposed European Union (EU) plans to cut pollution from new cars, saying it was "not economically favourable".

She said the move would burden Germany and its carmakers disproportionately."

It would be easy to get up on a high-horse about double standards and a German government unwilling to pay the price for action to meet international targets to cut emissions that they've been so active in pushing for. That would be a mistake, though.

The German government should be defending the German national interest. A democratic government should look out for the interests of its constituents. In fact, we should be asking very serious questions about why our government cares so little about our own interests.

There are two key examples here.

The first example is the Emissions Trading Scheme where countries were allowed to allocate themselves emissions allowances. This way of doing things obviously encouraged every country to set the highest allowance they could. Every country then did just that except for the UK. We set tough limits and Open Europe found (PDF) that we ended up paying £470 million in subsidy to other European states. No emissions were cut at all.

The second example is the EU Landfill Directive which was obviously going to hit disproportionately at Britain as we recycle less than other European states. Hated bin taxes are blamed on the European Union but our Government never seriously opposed the Directive that makes them necessary.

With our overly centralised politics public services monopolise the national debate and squeeze out foreign policy. As few votes are at stake politicians attend to their own foreign policy agendas rather than the priorities of the public. Being popular at international conferences makes them feel good but leaves us worse off. It would be better if our politics was a little more German in this regard, if we learnt from L'exception Francaise.

Cross-posted from the TaxPayers' Alliance blog.

Sinclair's Musings - pissing off all the right people since 2006

Well - it appears I've rather upset the MPAC. They don't link to my original fisk and have failed to respond to my charge that they are idiots who don't even know much about Islam itself let alone the wider world. Tony Sharp is also the target for some of their incoherent ire. Tony can handle himself but suffice to say that he is entirely correct that Policy Exchange's attempt to identify an extremist infiltration of British Islam does not constitute an attack on British Islam itself.

Let's go over their charges against my fisk:

"This level of ignorance is one thing but to step from that into the blatantly paranoid hysteria of some nut called Matthew Sinclair is another. The crazed lunatic, walking the streets of a major political party right now, actually claimed we were trying to ‘murder’ the 8 sufi ‘hate preachers,’ who were caught red handed forging receipts, by simply stating we wanted to know who they were!

If the Muslims have an extremist problem its nothing to the one going on within some segments of the conservative party! Or the one going on in this nuts head – now that’s extreme! He is not just a danger to the Muslims, the good standing of the conservative party but worse to himself. Any one who can read words to the effect of ‘let’s find these dodgy Sufi’s’ on a Muslim website, have a panic attack, have to change his underwear, and then start to dial 999 screaming ‘they are out to kill the Sufi’s’ to some poor police officer, is either on drugs or so out of his mind he should be sectioned!"

Lots of invective there. Very little argument - I certainly haven't even thought about calling the police, although I'd think about doing so for protection if I was one of the researchers - except that I shouldn't read their call to "find these dodgy Sufi's" to be an incitement to violence. The problem is that MPAC don't give any other reason why they want to know "every last detail" about these people.

If this happened in isolation it might be taken as innocent curiosity. That they called their attempt to find the researchers a "hunt" would raise some questions even then. However, they are calling for a "hunt" for researchers they accuse of trying "to destroy their own community" after a series of other frightening examples of extremists attacking people they perceive as critics of Islam. Soldiers in Windsor had their property damaged and been forced to move. Salman Rushdie and Ayaan Hirsi Ali are a couple of famous examples of people who have faced threats of death and attempted assasinations. Rushdie's Japanese translator and Theo van Gogh are famous examples of that threat being acted upon. There are many more examples out there. We cannot naively give the benefit of the doubt to people like MPAC when they go hunting their enemies.

There is a savage irony to their implication that I'm a coward. If I were easily scared I'd have kept quiet, they'd have silenced someone and infringed free speech. That's the existential challenge to our values that these people pose.

Misunderstanding Northern Rock

There are two points surrounding yesterday's events at Northern Rock that really need to be cleared up.

First, the BBC's Business Editor, Robert Peston, is very enthusiastic about Bradford & Bingley's offer to help out at Northern Rock:

"In the worst case of the Rock being nationalised, it could take assets off the Treasury's hands and lessen the very substantial burden and risks for all of us as taxpayers,"

So, Bradford & Bingley are going to take a load of the rather unreliable Northern Rock debt off the taxpayers' hands?  How good of them!  Should Bradford & Bingley shareholders be up in arms about their company's directors using company funds to bail out the Treasury?

Probably not.  The truth is that Bradford & Bingley's directors wouldn't be looking at buying Northern Rock Assets if that move didn't have the potential to be a good deal for the company.  Not because they're bad people but because they have a legal and moral duty to look out for the interests of their shareholders.  So, unless we think the Treasury has somehow outwitted them - an idea so far fetched it would have to be retrieved from the moon - the proper question to ask is:  how are Bradford & Bingley going to get value from a deal for Northern Rock assets?

The answer is obvious.  They'll take some of the best assets - the most reliable mortgages - at a low price.  We'll have a smaller liability but the range of assets that Northern Rock will be left with to pay off its massive debts to the taxpayer will be more than commensurately smaller.

This is particularly worrying thanks to the other big new Northern Rock story.  We've now guaranteed to wholesale lenders that they won't lose money on Northern Rock.  There are two important things to notice here:

1)  Taxpayers are now covering almost all the downside risk.  This is so close to nationalisation that the final taking of the bank into public ownership is increasingly of totemic, rather than material, importance.

Research into privatisation (PDF) for the Competitive Enterprise Institute by Eli Lehrer and Iain Murray seeks to redefine the concept of privatisation and nationalisation in terms of who bears the downside risk as the question "who will lose money if it goes under" is often more important to incentives and real control than nominal ownership.  If we accept Lehrer and Murray's analysis then Northern Rock is already pretty much nationalised.

2)  We've effectively been booted way down the queue of creditors looking to get paid in the event of Northern Rock going under.  When its assets are sold the wholesale lenders will now need to be paid, in order to satisfy the new guarantee, before we are.  With Northern Rock's mortgage book in doubt and plenty of existing claims on its assets - even before any Bradford & Bingley stripping - we should have very little confidence it will be possible to get taxpayers all of their money back.

All in all, the last forty-eight hours have brought a lot of worrying news for taxpayers.

Cross-posted from the TaxPayers' Alliance blog

Monday, December 17, 2007

Fisking the MPAC

This article (via ConservativeHome) made me more than a little angry:

"You would have to be sitting in a darkened room repeating the name of Allah since 7/7 to be unaware that the new front against Muslims by the Government is
being led by Sufi cults."

Since 7/7? Why exactly is that the date used here as the start of the "front against Muslims"?

Are they acknowledging that violent extremism is the root cause of the problems here, rather than some "Zio-Con" (their term, obviously not mine) conspiracy? If so then I'd congratulate them on the one statement in this entire article that isn't utterly absurd.

Referring to Sufism as a cult is so utterly offensive that if a non-Muslim said it there'd be understandable cries of Islamaphobia. Here it is though coming from the "Muslim" (which apparently means all the Muslims the author likes) Public Affairs Committee.

"It’s an old Russian trick, they used Sufi sects to pacify the Mujahadeen who were fighting for their freedom from occupation. These Sufi cults taught them to forget the world and be content sitting in darkened rooms repeating the name of Allah over and over and over again. The British used it in India too, creating groups who focused on every minor ritual and repeated the words ‘no politics’ over and over and over again…anyone guess who they are?"

Wait. So the same "cults" that are "leading the new front against Muslims" are in fact distinguished by a refusal to engage in politics? Congratulations you idiots you've just completely contradicted yourselves in the space of two pretty simple paragraphs.

The idea that the British "created" Sufism is hard to sustain if the Principles of Sufism were written in the 15th century. Is Wikipedia leading me astray or do MPAC actually know nothing about the history of Islam itself?

"The Sufi Muslim council are the recognisable face of the new Government appointed cults. However there are many Sufi groups operating throughout Britain doing work to pacify the Muslim mind."

The choice of the term "pacify" as their pejorative is unfortunate here. Isn't Islam supposed to be the religion of peace? Is the MPAC's criticism that the Sufis are making Muslims more Muslim?

"Recently these individuals belonging to these undercover cults took one step too far. They teamed up with Policy Exchange a pro Israel right wing, neo conservative think tank, which has gone out of its way to dig dirt on the Muslim community.

One of its attacks led to front page news and headlines across the UK when it claimed that a quarter of all mosques sold ‘hate literature’."

This is the real moment of close to clinical brain death stupidity. Are they seriously responding to a pretty centrist think tank's claim that British Islam has a problem with extremists by ranting about undercover cults co-operating with Zio-Cons? Perhaps they were upset that Policy Exchange were getting in the way of the MPAC's goal of becoming the number one body proving that British Islam has an extremism problem.

"However as we have been reporting on this website, Newsnight uncovered that these Sufi researchers had in fact forged the receipts to prove the case."

This article for the Guardian sets out the real extent of the possible problem with Policy Exchange's work. The allegations are serious but at most they suggest that 20 per cent rather than 25 per cent of mosques have a problem with extremist literature being sold on the premises. The core political message of the report still holds true and is proved prescient daily by the MPAC and their ilk anyway.

To be honest, I wouldn't have bothered rebutting these lunatics. Evolution clearly forgot them so I think it is fair enough that I should too. However, this section changed my mind:

"These Sufi researchers then fled the country to Mauritania for what the Zio-Con think tank called ‘religious purification’!

MPAC now wants to find out exactly who these Sufis are, who are working for the Zio-Con think tank. There were 8 Sufis who worked for them, and all apparently have gone abroad to hide while the storm is raging. They worked, according to Policy Exchange for over a year on the project, so some Muslim out there must have come into contact with them.

Who are they, what are their backgrounds … MPACUK will dig deeper and expose every last detail of the Sufis who tried to destroy their own community.

If you know who they are – please write in and we will expose these men and women for all the Muslim community to see. Write in now and let us do what the incompetent idiots in the Mosque should be doing, protecting our community."

This is a direct attempt to recreate the murder of Theo van Gogh. These people are not just wrong and ignorant. They're dangerous. Their nasty work threatens brave people with death. Of course, it isn't our job to enforce the law upon them if they have broken it by inciting violence.

However, some kind of campaign of peaceful resistance is in order. They've put their e-mail address there for those who wish to lynch by proxy. I reckon we subscribe them to some innapropriate newsletters.

Losing control of the public sector

I really don't think Mike is exagerrating at all here:

"Did you follow that? Cricklade residents (aka the customers) are angry because their local police station is closed- ie if you go there you find nobody manning the front desk, and even if you shout, nobody comes. But rather than putting it right, North Wiltshire's top cop advises them to pretend the station's functioning properly as it is. Otherwise, he says, it will be perceived the residents perceive it's closed, and it will be closed. Even though in real world terms, it's closed already.

Only in Stalin's Russia is such madness possible.

And there's no doubt Stalin would have approved of the commissars' programme to streamline policing by closing stations. As he would have appreciated, manned stations open to the public are a huge distraction for the police. Far more efficient if they concentrate 100% on their core function, which is to carry out orders from above."

Alright, we're not in Stalin's Russia. But there is something deeply dystopian about the mindset at work. Our public services are now beholden to a government machine with almost no connection to the public and their priorities at all.

If you think that we'll be alright because, while we have no direct influence, at least our MPs can hold the public servants to account you'd be wrong. The Government machine is tied up in trying to excuse itself from resigning for endless public service failures that they can't control but also can't disclaim responsibility for without wrecking the vision of an omnipotent state they are so wedded to. MPs outside of this structure struggle to hold it to account. Let's hear from one of those MPs, one of the best, Douglas Carswell:

"The House of Commons is a house of charades; Ministers pretend to make the big decisions and we MPs pretend to hold them to account. Voters give up.

Parliamentary procedure is partly to blame. Debating rules favour seniority over originality, ensuring those with something fresh to say speak last, if at all. It is a tradition for the Commons Speaker to defend the rights of the Commons – when in retirement. If only Mr Speaker was as fierce when in the job. Institutionally flat-footed, Parliament lacks punch.

Fresh into the Commons, and angry about what had happened to kids in my constituency forced out of their special school, I jumped at the chance of serving on the Commons Education Select Committee. Two years, three foreign trips and half a dozen reports later, how much has made any difference? Control over education lies not with politicians promising to improve it, but with unaccountable officials."

This lack of accountability to ordinary people or even the poor substitute of accountability to an adversarial and curious Parliament means endless failures in public sector performance: thousands upon thousands of children missing out on a quality education, thousands upon thousands dead who would have lived with a better health service and our national income being drained in a vain attempt to stop the rot. That's enough to make the state of our public services right now alarming but in the long term social decline - intimately tied up with public service failure - can lead to even darker places.

Saturday, December 15, 2007

Review after review after review

The number of reviews the Government has been announcing has been incredible. From Ben Brogan:

"Bloomberg news reported yesterday that Gordon Brown has ordered more than 30 reviews since he took over in June. In fact, it's a lot more - at least 49 by our count, and we may find others. That's two a week."

He posits a few explanations but I don't see dithering or some attempt to rescue a mess left to him by the Blair Government. Dithering implies that eventually these reviews will decide the issue. I doubt it. I think they'll be kicked into the long grass then released quietly on a busy news day. Equally, the Brown Government is full of old faces so the idea they're discovering a raft of problems left to them from Blair's time in charge seems implausible.

These reviews are a means to stall a decision for one of two reasons:

1) Media-grabbing policymaking without the hangover. There are a lot of policies from the Blair era that created trouble for his Government as they were clearly poorly thought out but were produced to support a particular media 'event': marching offenders to cashpoints, the NPfIT. Brown can get the same media buzz but without actually needing to do anything. The policies can be quietly forgotten without the risk of them coming back as a monstrosity like the world's largest and, perhaps, most out of control IT project. To this extent the flood of reviews is a good thing if it limits the number of poor policies seeing the light of day. I could be wrong but I suspect the review Balls announced of the junior school curriculum would definitely fit in this category.

2) To stall until the heat has died down and avoid Ministerial resignations. This was the case with the party funding and data protection reviews. It is a pretty shoddy practice. The question arising from the Abrahams affair isn't what new rules and funding should be in place and Brown's attempt to make that the 'real issue' in PMQs was obviously phoney. If people are breaking the current rules enforcement, and resignations or sackings, is needed rather than new rules.

This is part of the broad "I need to stay to set things right" defence which has largely destroyed what accountability there was in Government.

In trying to run public services from central Government politicians have set themselves an impossible task. Any one person sitting at the top of a huge, Byzantine organisation like the Health Service would have, at best, a very limited idea of what was going on. Add to that the fact that most Ministers are the last people you would pick to have a shot at that impossible task. After a life spent working in politics or the unions they are expected to walk straight in and work out how to manage these huge unwieldy organisations. They have to do that within the couple of years before they, almost inevitably, get moved to another department in the game of musical chairs that is the British system of government.

All this means that Ministers, and the organisations they are responsible for, regularly fail. They're failing particularly regularly at the moment thanks to the institutional stresses of a muddled and unstable programme of reform combined with stop-go financing on a vast scale.

Brown's slow destruction of the principle of accountability shouldn't surprise us. He needs to find some way of making the endless failures of politically managed public services less critical to his Government's fortunes. However, it isn't working - the Government's ratings on competence show that. Even if it does work in certain cases people will wise up to attempts to stall their judgement.

Hopefully politicians will eventually wake up and realise that the only way to stop having to take responsibility for failures you can't control is to stop trying to control the uncontrollable. Then they might end the monopolies, centralisation and political management that cripple public services.

Friday, December 14, 2007

Crozier vs. Garnier

During the research for a project I'm working on I found myself looking through GlaxoSmithKline's accounts. Remembering the debate over the Public Sector Rich List I got curious and wondered just how much JP Garnier - the reputedly well-paid boss of what is a huge company - gets paid. The figure is $5,413,000. That's a lot of money, not bad if you can get it. However, GSK are really massive and. I wondered how much more it was than the £1,256,000 that Crozier takes home in total remuneration and whether Garnier or Crozier make more per pound of their company's revenue.

I've done those calculations. They are entirely reliable with the proviso that the exchange rate is today's rather than last year's. Royal Mail revenue and operating profit figures are from their accounts:

(click to enlarge)

What that shows is that Royal Mail pay Crozier more compared to their profit and revenue than GSK pay Garnier. Adam Crozier is, at least compared to JP Garnier, well paid even relative to the scale of the company he is running. Even at the very top end the public sector now pays really well.

Given that public sector organisations don't depend on success in the market to attract customers or strong financial results to attract shareholders there is no reason to assume these salaries are likely to be justified.

Cross-posted from the TaxPayers' Alliance blog

The problem with ethanol

This is one of the most inspired political virals I've ever seen. Superb.

Wednesday, December 12, 2007

I go entire days without feeling the urge to beat anyone with a stick

Gracchi takes issue with my post defending the advertising industry from the National Union of Teachers' attempt to lay just about every problem in the modern world at their door. He puts a lot of words in my mouth.

I never lambasted parents at all and "morally flaccid" "liberal parents" are entirely his creation, not mine. Instead I argued that parents' will to resist their childrens' pestering is weak; very different to suggesting they are, in general, weak. I sought to explain why parents struggle to resist pester power. The explanation I settled on was not some deficit in parents, or any group of parents, but an intellectual climate that told them they shouldn't assert moral values.

Next, he accuses me of supporting parents assaulting their children. At this stage I was tempted to stop reading his post and blog. Apparently this is the natural conclusion of some deep-rooted love of authority that he has discovered in me. He even includes this ludicrous little section: "how can it be consistant to call hitting an adult with a stick assault and hitting a child with a stick discipline." I write a post that argues for parents "telling - for example - their nine year-old that dressing like Christina Aguilera isn't remotely appropriate" and he leaps from there to assault with a stick!

I'm not engaging in the corporal punishment argument. I don't think I'd support bringing it back. Those that do don't deserve his calumny though. He seems to have missed the difference between punishment and assault. Just as imprisonment isn't kidnapping corporal punishment isn't assault.

Before I move on I've just quickly got to deal with the idea that being inconsistent between adults and children is some kind of problem.

Children and adults are different and warrant different treatment. Very moderate people can see this. Those that believe in an age of consent, a minimum age for voting and for smoking and compulsory education among other things. They are all inconsistent impositions of adult authority upon children that are not visited upon adults and therefore fail Gracchi's test.

The argument that I'm really after 'authority' rather than morality is not only offensive when taken to the extreme he takes it but only remotely plausible if you entirely ignore the actual examples I used of immoral behaviour - which aren't just anything that the parent disagrees with. Let's return to the more moderate identification of the love of parental authority he claims to have discovered in my post.

"Lets start with the idea that the power of pestering represents the decline of morality- I think its worth distinguishing in this area two important concepts: morality and authority. The power of pestering represents the decline of the second of those concepts, but not the decline of the first. If for instance, as Chris Dillow argues, sympathy is the basis for secular morality (and Matt lest anyone need reminding is an avowed secularist- in that he does not decline his morality from theology) then acknowledging the power of the pester and relinquishing authority may be a moral response."

I'm not calling for a generalised imposition of parental authority on their children. Just in the cases where it is clearly needed. The consequences of pester power when it gets excessive weren't described in detail in my post as the NUT's case that I was rebutting was predicated upon them. Here are a couple of examples from the NUT study:

"Children are bombarded with "unrealistic and unachievable images" of what they should look like, leading to an increase in anorexia, bulimia and eating disorders.


The rise in childhood obesity and illnesses such as the early onset of type 2 diabetes"

If Gracchi is arguing that these are some kind of healthy expression that parents shouldn't be using their authority to quash then he's truly lost perspective. If he can see no reason beyond a blanket desire to enshrine parental authority behind my desire to prevent children becoming sexualised, obese or anorexic then I'm a little alarmed.

One can be entirely sympathetic with your children but see that overt sexualisation while they're young is awful. That their innocence is worth defending from the world. In fact, I'd suggest that to not see that what they want is not necessarily what is best for them - while they are a child, where paternalism is appropriate - is a failure to be truly sympathetic. It is just as unsympathetic to fail to see that they might have trouble controlling their weight and be grateful - either at the time or later - for parents being firm and saving them from obesity.

His final argument is that the ability of parents to control their children is undermined by advertising and other technological and social changes reducing inequalities of information between children and parents that are at the root of parental authority. This argument is more plausible but is what I set out to rebut in my last post. Contrary to Gracchi's assertion I don't actually think that declining parental authority is the problem. As such, children having more information than they used to isn't the problem either.

Instead, I think that parents need to use the authority they do have to prevent their children being exploited. All of the problems of 'pester power' that the NUT identified (Gracchi's analysis actually requires him to rebut them as well as myself) will evaporate if parents make clear that they will not allow their children to be exploited. This would, in the past, have been the most natural thing in the world. Unfortunately, any imposition by adults on their children is now conflated with tyranny by relativism, Gracchi provides a handy example of how that conflation proceeds.

Finally, I have to pull this paragraph out:

"Ultimately this reflects back on a much older process- the process by which the child converted from being unpaid labour on a peasant farm- to being a precious entity by which its parents are evaluated. In that change swinging through the centuries, we can see the roots of Matt's angst about declining authority."

I'm honestly baffled at the idea that my arguments were all masking an esoteric call to defend some lost pool of child labour.

The police pay deal

PolicewestminsterIf this were simply another case of public sector workers complaining about a poor deal from the Government because they weren't going to get another inflation-busting pay increase the TaxPayers' Alliance wouldn't be particularly sympathetic. Public sector workers have had a pretty good deal over the last decade and most have very little to complain about. Taxpayers have to foot the bill and are hard pressed as it is.

However, the debate currently going on over the police deal isn’t really about the money. The police themselves will tell you - if you push them on the subject - that they're pretty reasonably paid. Their deal is tough but in the harder economic conditions we're facing at the moment a lot of people are having to tighten their belt. This dispute isn't about pay restraint but about the way the Government went about securing pay restraint.

Essentially, the police pay deal is negotiated each year but often isn't negotiated in time. When that happens the pay is backdated so that the torturously slow process doesn't leave officers out of pocket. This year was particularly difficult and, in the end, went to arbitration. That means an external body taking over and, after both sides have made their case, deciding on what the final deal will be. The body in question is ACAS and their decision is binding upon the police - they have to accept it - but not legally binding on the government. The arbitration is not legally binding on the government but is clearly, in some sense, morally binding if the arbitration is not completely meaningless. The arbitration did not go the Government's way and they've responded by refusing to pay the backdated pay which means that the police will only get their rise for nine instead of twelve months this year. They understandably see this as a huge breach of confidence.

The way to avoid disputes like this isn’t to throw ever higher salaries at public sector workers. A deal that was financially identical but reached in a less dubious manner would not have gotten the police nearly so wound up. Instead we need to address the real problem which is that ministers without the management experience to run an organisation on the scale of the police service – Jacqui Smith was a teacher – made a complete mess of the negotiating process.

The police are quite reasonably paid but they see other public workers striking, the government backing down and those workers getting more generous deals. The classic example was the Warwick Agreement where they backed down on essential reforms to public sector pensions. At the same time their morale is sapped by targets that prevent them getting on with their job. Just today it was discovered that the police now spend barely one hour in seven on the beat deterring crime - "incident-related paperwork" is keeping them busy. The present crisis is a result of these problems and the mishandling of the negotiations. It is right that the Government should try to control public sector pay but it will take good management, which centralised politics cannot provide, to do this without compromising services.

Cross-posted from the TaxPayers' Alliance blog.

Tuesday, December 11, 2007

Don't blame advertising

Yesterday the National Union of Teachers launched a study attacking advertising and its supposed effects on young people. The union has utterly missed the point. Let's look at one example:

"There is a disturbing trend for pre-teenage girls to wear sexually provocative clothes and make-up."

Adverts selling sexually provocative clothes and make-up to children would, if they truly outraged the parents, be a terrible idea. Companies go to considerable lengths to build a positive public image and spend large amounts of time and money on corporate social responsibility and other such measures. The outraged parents have every ability to prevent their children shopping in those stores so the market would be small - restricted to those children sufficiently smarter than their parents that they can fool them - and not worth the public relations disaster.

Parents are only pestered because their will to resist their children is obviously weak - because they have no credibility that they will resist the pestering.

Parental will is weak because of relativism. Though they want the best for their children they feel guilty about placing any stricture upon their behaviour. They have spent a lifetime being told that to be judgemental is the worst kind of sin. In the adult sphere they are expected not to tolerate every moral choice but to go way beyond that bar and treat them as equal.

As a result they don't feel at all credible themselves when confronting their children and telling - for example - their nine year-old that dressing like Christina Aguilera isn't remotely appropriate. The language of 'appropriate' and 'inappropriate' feels archaic. When facing a pestering child parents who have lost the very idea of right and wrong have no answer to their claims that standing out will be inconvenient. They will choose the path of least resistance. As so many have chosen that path of least resistance being the exceptional parent becomes ever more difficult.

Increased commercialism isn't the important trend at work in the sexualisation of children or childhood obesity. Advertising is a product of the society around it and ours has a very hard time really condemning the sexualisation of children and treats those without the willpower to control their weight as victims. Laws to curb advertising are a lazy response to a serious issue and completely miss the point. They are an attempt to find a policy lever to address a problem created by cultural and intellectual change.

Saturday, December 08, 2007

Taxing talent, taxing height, taxing beauty

I'm pretty talented and reasonably tall. However, I'm not beautiful. Now that the debate over taxing good fortune is being broadened out hopefully my biases should start to be smoothed over.

Chris Dillow posted recently on a beauty tax, asking whether it was any more ridiculous than a tax on the rich. He supports a tax on the rich, in part, because of moral luck. Because you are lucky to be born talented or hard-working. Exactly the same logic can be applied to a tax on beauty, height, or much anything else.

Greg Mankiw applied (PDF) the logic of optimal taxation to height and found that it would imply significantly higher taxes for the tall. I think that the conclusion he takes from being able to draw this inference also applies to the argument Dillow makes:

The Times also quotes a critic:

Peter Diamond, an economist at M.I.T., says the paper’s basic mistake is the notion “that if you can draw a silly inference from an approach, then that discredits a model.” He comments: “I think there is probably no model that passes that test."

I wonder what Peter's alternative approach is. If economic theorists are allowed to embrace inferences from a model that they like and reject those that they consider "silly," what is the point of theory? That discretion gives the theorist the freedom to always confirm his priors. The economist ends up using theory like a drunk uses a light post--for support rather than illumination.

My Philosophy

First, let's clear up terms. When I say my philosophy I mean that spectrum of beliefs that constitute my vision of the good life rather than my political beliefs about the ordering of society, although there is almost certainly some interaction between the two. Political philosophy is important but I'll use the generic 'philosophy' for more internal thought for now. It'll make things easier.

I rarely write about my philosophy and only discuss it in earnest occasionally. By contrast, it is both my job, which I love, and my hobby to expound my political beliefs. I think this might partly be because my political views are well within the conservative mainstream whereas my philosophy is, as far as I know, absolutely unique. I follow Chris Dillow's advice and hold my most radical beliefs most lightly. There's more to it than that though. I think that if more people held my political beliefs the world would be a better place. I'm not so sure about my philosophy. What do you think?


I'd rather not know. I don't see much evidence for a God but I also don't see much evidence that there is no God. Dawkins' spaghetti monster analogy is misleading. In the absence of evidence to settle a question - whether it is the question of the existence of a spaghetti monster or a God - we resort to Occam's Razor and atheism is the result of Dawkins' answer to the question "what is the simplest explanation of the world around us". However, it is far from the only plausible answer. I don't feel the existence of a deity so don't consider myself to believe in God but I wouldn't rule it out as an atheist should.

However, I'm not quite an agnostic. I don't just not know whether there is a God. I don't want to know. In my present state of ignorance I can see two possibilities:

1) There is a God, but he wants me to think for myself. If God really wanted me to follow received wisdom then I really think he would have left a more thorough guide than a single - now rather opaque - book and a lot of often deeply flawed preachers. The Bible is an impressive work of literature but if you compare the work He has clearly put into that with the real marvel - the human brain and mind - it pales.

The human brain is the most complex arrangement of matter in the known universe and the mind an unparalled inspiration. As such, I think that if there is a God he hasn't given me my own moral judgement as some kind of afterthought or as a challenge to be overcome in order to follow true, received wisdom. I think God would want me to think for myself rather than follow a proscribed set of Commandments. I cannot imagine a God who was truly great, worth following who wanted me to do the right thing for fear of Hell or in the hope of being rewarded with Heaven.

If I knew that He existed I might be tempted to do the right or wrong thing in order to please him. Now, suppose he is wrong? Should I do the right thing because I'm afraid of Hell? Cowardice. Should I do the right thing in order to get into Heaven? I'm not opposed to the profit motive but I'm not going to trade my fundamental beliefs.

I think I'm best off not knowing.

2) There isn't a God. I'm left with the same question. How should I construct my moral code? The question of God's existence doesn't seem morally important.

How should I construct my moral code?

In this situation the important question is whether you wish to believe in nothing and either try to construct a rational belief system - unfortunately these can too often be a house of cards - give up on meaning, seek comfort and risk the sad fate of the last man or choose, for yourself, your beliefs without the crutch of deity or logic. I think the final one of those three options is the best. Rationality requires premises to work from and a life without meaning is a sad one.

"If we have our own why in life, we shall get along with almost any how"
- Friedrich Nietzsche, Twilight of the Idols

I need to work out what I value, my why.

What do I value?

The human mind. Mine and others'. Its creativity, ability to question, learn and relate. The mind is truly amazing. Exploring such potential, and creating a space for others to do the same, is great and requires no external justification.

If I have lived a life where I have seen where my mind can take me; had a full experience of the minds of others - high creativity from afar or good conversation up close; and defended a society in which the free expression and development of the product of the mind is not just permitted but encouraged that seems eminently worthwhile. I don't need more meaning than that.

The Stoics

"You desire to LIVE "according to Nature"? Oh, you noble Stoics, what fraud of words! Imagine to yourselves a being like Nature, boundlessly extravagant, boundlessly indifferent, without purpose or consideration, without pity or justice, at once fruitful and barren and uncertain: imagine to yourselves INDIFFERENCE as a power--how COULD you live in accordance with such indifference? To live--is not that just endeavouring to be otherwise than this Nature? Is not living valuing, preferring, being unjust, being limited, endeavouring to be different?"
- Friedrich Nietzsche, Beyond Good and Evil

Nietzsche wasn't terribly enamoured of the Stoics. For good reason: His philosophy is all purpose and drive; will. Theirs is a reconciling to nature, indifference. However, just as in political philosophy where liberalism and conservatism's alliance on the Right allows both to escape their weaknesses I see a similar, necessary, combination that makes both Stoicism and Nietzsche's philosophy functional.

I take from Nietzsche the essential challenge of the good life - to compose and live by a system of values that are my own and I can reconcile myself to (eternal recurrence is one test). However, how one lives up to that challenge is a question left largely unanswered by Nietzsche. How can a person resist the temptations of an easy, rather than good, life? How can you fight off the temptation to obsess about the qualities or opinions of others?

I can’t think of better guides than the Stoics. Here are a few samples, all from one – quite short – book:

"At dawn, when you are having trouble getting out of bed, tell yourself: "I have to go to work - as a human being. What do I have to complain of, if I'm going to do what I was born for - the things I was brought into the world to do? Or is this what I was created for? To huddle under the blankets and stay warm?

- But it's nicer here...

So you were born to feel "nice"? Instead of doing things and experiencing them?"

“When you run up against someone else’s shamelessness, ask yourself this: Is a world without shamelessness possible?

No. Then don’t ask the impossible. There have to be shameless people in the world. This is one of them.

The same for someone vicious or untrustworthy, or with any other defect. Remembering that the whole class has to exist will make you more tolerant of its members.”

“Remember: you shouldn’t be surprised when a fig tree produces figs, nor the world what it produces. A good doctor isn’t surprised when his patients have fevers, or a helmsman when the wind blows against him.”

“Remember that to change your mind and to accept correction are free acts too. The action is yours, based on your own will, your own decision – and your own mind.”

"If you do the job in a principled way, with diligence, energy and patience, if you keep yourself free of distractions, and keep the spirit inside you undamaged, as if you might have to give it back at any moment -

If you can embrace this without fear or expectation - can find fulfilment in what you're doing now, as Nature intended, and in superhuman truthfulness (every word, every utterance) - then your life will be happy.

No one can prevent that."
– Marcus Aurelius, Meditations

In my own way I have come to Nietzsche’s challenge – to build my own system of values from premises I am aware of and happy with. The teachings of the Stoics have not taught me indifference in general but, rather, indifference to those aspects of life that are – in the end – trivial but are always easy to obsess over.

Of course, all this is a vision – life is imperfect and I am no saint – but it matters nonetheless.

Friday, December 07, 2007

His Dark Materials

I haven't read Pullman's "His Dark Materials". This, brilliant, article makes me rather disinclined to change the situation, or go and see the new film:

"You see, the problem with the message method of storytelling is that you have to stop the story to preach the message. The STORY here required that God be an evil Tyrant, as evil (at least) as Sauron the Great, as cunning as Fu Manchu, as mad as Emperor Nero. The story required an all-powerful Goliath to be fought and overthrown by the bravery of a boy with a knife. The MESSAGE required that the Christian God be depicted, not merely as a tyrant, but as a false and shallow and idiotic creature: the Wizard of Oz, nothing more than a puppet-head and a loud voice controlled by a scared little carnival man behind the curtain.

So the story required that the god-killer be at least as impressive as Milton's Lucifer, who, no matter his flaws, certainly has the dramatic stature and the majesty to attempt deicide. Jack the Giant-killer is an impressive character precisely because Giants are big and impressive. But the message requires that God be not merely unimpressive, but despicable: he cannot be an honorable foe, or even a strong one.

Mr. Pullman started with a story, a Paradise Lost version where Lucifer was the good guy facing impossible odds by defying an unconquerable god; but he ended with a message, where there are no odds because there is no god, merely a drooling idiot. So all plot logic flies out the window: the drooling idiot cannot be and could not be responsible for Original Sin or the Flood of Noah, or the Spanish Inquisition, or whatever crimes God should have been accused of, because he cannot do anything, any more than the puppet head of the Wizard of Oz.

The story required that Asrael be guilty of terrible experiments on children, but that his crimes be necessary in order to discover the secret of the dust and undo the evils done by the Christian God, which have to be much greater than any merely human crime. But the message required that the human condition be merely materialistic, and that there could be no God, and therefore no crimes.

A good story would have shown all the innocent people from Ethiopia, Australia and China tormented in the fires of hell, merely for the whimsical violation of the Christian rule that they are sons of Adam not baptized by a messiah of whom they never could have heard. The writer would only need to show us one ghost, dead of sudden disease as a child one hour before his baptism, being crushed forever between the red-hot plates of a coffin of heated iron spikes, while crying for his mommy, in order to arouse the proper indignation. The crimes of God have to be, for such a story, cosmic crimes. Jehovah has to be shown as a being powerful enough to stop the wheel of reincarnation, which otherwise would have eventually saved all living spirits through many lives of learning and growing, in order to establish an arbitrary paradise and an arbitrary hell. The story of that crime ends when Christianity is overthrown, and the reincarnation cycle which will one day save all people from all suffering is reinstated. (Not to spoil the surprise ending, but this is not so far from the idea that Ursula K. LeGuin handled with such artistic adroitness in THE OTHER WIND, a sequel to her "Earthsea" trilogy.)

But the message cannot be Taoist or Buddhist or even New Age Spiritualism. Mr. Pullman's message is atheist. He cannot have a reincarnation be shown as a better alternative to hellfire, because he does not believe in reincarnation any more than he believes in hellfire. In order for his message to prosper, materialism has to be the order of the day. All the ghosts of the lordly dead, the honored ancestors to whom the pagan shrines are adorned, also have to be false. The ghosts in a Pullman fantasy world have to be bored, and dissolving back into matter has to be the only ecologically sound proposition. It is a boring and undramatic resolution, unconvincing to the point of idiocy, but it is the only one his message would allow.

The message did not allow Mr. Pullman even to list crimes of which the Christian God was accused. If there was a scene where this was done, I missed it. If Jehovah in the story had killed a child or kicked a bunny, I as the reader would have relished the scene of an overdue vengeance being visited on him: the Vengeance of Prometheus for the injustices of Heaven!"

Compare this to the picture of Tolkien's work built up here by Spengler in a superb review of Children of Hurin. I don't agree with the philosophy Tolkein is advancing - I actually think the West is missing pagan heroism and I'm not a Christian - but it has none of the narrow mindedness of the simplistic "there's no God, stupid!" atheism that Pullman appears to be advocating. Tolkein's work has far more depth to it which makes the fact that Pullman "once dismissed the Lord of the Rings trilogy as an "infantile work" primarily concerned with "maps and plans and languages and codes" rather pathetic.

Google Reader

I set up Google Reader last night and am finding it pretty useful. I now have both my favourites in the wider 'sphere and all of Blogpower feeding to it. Should broaden my reading quite nicely as I now give at least a quick read to everything posted.

Thursday, December 06, 2007

"I love thee like optical zoom, all others are mere digital"

At 23 I'm still pretty young. However, I already find the modern world's soullessness alarming at times.

Wednesday, December 05, 2007

The Coase Theorem and Green Taxes

The Coase Theorem explains - in terms that seem ridiculous until you really understand it, but painfully simple afterwards - why externalities don't inherently require state action to ensure an optimal supply. It explains why there is no inherent need to subsidise every public good, tax every negative externality. Too many nasty looking bikers? Pay them to leave. Trains setting your field on fire? Pay them to reroute somewhere else or stop running. Your child is going to have an abortion and you - as parent - don't like it? Bribe them, perhaps with offers of money for university. That final example is actually used in an academic discussion of the theorem, behind the academic firewall I'm afraid.

Of course, this only really works in the fictional land, populated by the imaginations of economists, where there are no transaction costs. In reality it would be a deeply unpleasant experience to negotiate over a pregnancy. All clubbing together and paying our 0.0000001 pence to a factory owner to attach a sulphur dioxide scrubber to his chimney just isn't practicable. We'd need to pay too much for it to be economical just to post him our tiny, fictional coins.

Coase wasn't ignoring this. However, if the problem is not an inherent market failure but, instead, a product of transaction costs making it impossible for society to come to a settlement through the market then negative externalities pose a fundamentally different challenge to the policy maker. After all, while transaction costs might make a market solution inefficient they are just as likely to make a mess of solutions relying upon state power. The case for Pigovian taxation is fundamentally weak.

Jim Manzi does a brilliant job of explaining how this relates to carbon taxes. Transaction costs make the obvious private sector solution to an alledged oversupply of carbon dioxide emissions, pay emitters to stop, impractical. However, there are also massive transaction costs to carbon taxes. He points to three important sources of transaction costs associated with a carbon tax. I'll paraphrase:

1. State intervention into major industries is extremely vulnerable to interest group lobbying. Oil and electricity generation companies have done quite well out of green politics so far. That isn't a freak accident. It's the result of the Logic of Collective Action: highly motivated minorities can exploit the use of state power even in a well-constructed democracy. This diversion of corporate talent to unproductive rent-seeking is wasteful in many ways.

2. We just don't have the necessary information to make an informed intervention in the market. We need to know what level to set the carbon tax. That should be the social cost but unfortunately estimates of social cost vary widely. If we get it wrong our policies will be too draconian or too lax.

3. Politicians don't use Pigovian taxes to correct for externalities but to raise revenue. They'll keep doing this and we'll wind up with higher taxes and the problems often associated with a high-tax economy.

Read Manzi's original post for a more scholarly explanation of each point.

I like to think that my report The Case Against Further Green Taxes is a part of the Coasean case against them. While Manzi can illustrate in theory the transaction costs associated with green policies you can see those problems in practice in Britain today. Corporate subsidy and green non-jobs wasting taxpayers' money, carbon taxes set too high and imposing an unpleasant, not to mention regressive, burden on ordinary taxpayers wanting to do socially useful things like get to work or move goods. The proper comparison to a free-market economy which emits too much carbon thanks to missing markets isn't an angelic, perfect government intervention but one with its own, often even more pernicious, flaws.

Tuesday, December 04, 2007

A practical example of the Coase Theorem

The Coase Theorem is the idea that a legal system would be unnecessary for the regulation of externalities in a world without transaction costs. A classic example is a train line that produces sparks that set off fires and destroy farmers' crops. If the damage to the farmer is worth more than the economic benefits to the train company the farmers will pay the train company not to run their trains. A rather odd example, from the very early days of this blog, is my consumption of Subway sandwiches.

Sweden has provided another example, via The Croydonian:

"A municipality in eastern Sweden paid a biker gang 200,000 kronor to move away from the region."

The national government could have intervened and used state power to get rid of the biker gang but it wasn't necessary. The socially optimal (presuming that the municipalities leaders are properly representing their constituents) solution won out without outside legal intervention. The bikers didn't want to stay more than the locals wanted them gone. The locals made it worth their while to leave.

Monday, December 03, 2007

The MCB and Holocaust Memorial Day

What's strange about Inayat Bunglawala's article supporting the decision of the Muslim Council of Britain to ends its boycott of Holocaust Memorial Day is that it reads like a case for the boycott:

"I have to admit that I have never been overly convinced as to the usefulness of such memorial events. The very first HMD event in the UK in 2001 was inaugurated by the then prime minister, Tony Blair. He looked typically sombre and determined during the televised occasion. "Never again," the world had said after the Nazi holocaust. But our Tony went on just two years later to give his active support to the criminal invasion of Iraq in which the dead now number in their hundreds of thousands. Never again, eh?"

Equating the Holocaust and the War in Iraq, eh?

This is almost too absurd for words. Anyone to whom the difference between a non-genocidal war fought against a brutal dictator which goes wrong and leads to substantial civilian casualties and an attempt to exterminate a race which leads to radically more deaths (regardless of whether you buy the Lancet's estimate of deaths in Iraq) isn't immediately apparent has no moral bearings at all.

"The British Muslim community was divided right from the outset over the issue of attending HMD. Some argued that the HMD would be misused by Zionists to try and garner support for the policies of the Israeli state."

Paranoia about 'Zionists' leading you to see a conspiracy in a memorial to an unparalleled historical tragedy? That's right - you're a crackpot.

"Others said that if there was to be a memorial day then it should be a more inclusive genocide memorial day. After all, had we not recently witnessed genocide in Rwanda and also of Bosnian Muslims in Srebrenica?"

This is ludicrous. It's a memorial to the Holocaust. It makes no claim to represent all genocides. There are 364 other days in the year on which one could hold a Srebrenica or Rwanda memorial day. Those tragedies have nothing to do with whether the Holocaust deserves a memorial of its own.

"During the Satanic Verses affair, the UK Muslim philosopher Shabbir Akhtar had warned that the next time we saw gas chambers again in Europe, it would be European Muslims that would be inside them."

a) What does this have to do with the matter at hand?

b) During the Satanic Verses affair? When Muslims were breaking the law calling for the death of someone who did no more than write a controverial book? When they weren't even punished for that crime, let alone persecuted in any way?

"Some others said that the reasons for non-attendance would not be properly understood and that it would cause unnecessary hurt to many in the UK Jewish community."

Yeah, they might think that it is putting petty political point scoring over a dignified remembrance of the victims of genocide. Or, they might think that those reasons are just a thin veil for community leaders seeking to appeal to anti-semitism.

"The MCB, with its several hundred affiliates, reflected those divisions. The only national poll that was carried out on this issue - it was commissioned last year by the Jewish Chronicle - found that 52% of British Muslims supported the MCB's hitherto position of non-attendance."

That's what worries me. That it isn't just a nasty minority and 52 per cent of British Muslims are willing take such an ugly stance. I really hope that they can be brought to see reason.

"So, this weekend's decision to attend will certainly have its detractors among British Muslims. Vikram Dodd in today's edition of the Guardian notes that some of the MCB's affiliates may even leave over this issue. On the whole, however, I believe the MCB made the right decision and it sends a welcome and positive signal about its commitment to a shared future in a multi-faith Europe."

This is the conclusion I'd have hoped for. It seems sad, though, that the only argument supporting it is that the boycott was a PR disaster. Bunglawala hasn't repudiated any of the logic that led the MCB to its rightly discrediting position.

Saturday, December 01, 2007

Competence in politics

The public are clearly rather unimpressed by HM Government (I doubt she's very impressed either).

The Telegraph have focussed on a perception of 'incompetence' as the main explanation of the Government's woes. Chris Dillow probably disagrees. He thinks competence is a political non-question as the opposition can't claim with seriousness that they will be more competent. In a sense he is right, no one could 'manage' an organisation like the NHS. For that reason there is little to be said for the poll question "A test of any Government is whether it is good at management: whether or not it provides the country with competent day-to-day administration. How would you rate the present Government's performance as managers in connection with each of the following?"

This question is either entirely meaningless, because no one can credibly claim that they can offer competent day-to-day management of organisations as dysfunctional as your average government department, or substantively meaningless as, while people might shift from party to party seeking elusive 'competence', every government will steadily prove itself 'incompetent' over time. They will slowly exhaust the public's patience.

The proper question we should be hoping people will ask is not "which party is more competent" but instead "which party will stop making ordinary people pay for their own hubris in imagining they can run politically managed services competently". On this measure I think there is some difference between the parties but Chris is entirely right that it isn't a lot.

The Telegraph asked another question: "Which of these statements comes closer to your view? Although it has had a fair amount of bad luck recently the present Government is basically competent and efficient. Or, the present Government is neither competent nor efficient: to put it bluntly, it couldn't 'run a whelk stall'." This opens our analysis up to a broader understanding of competence. I think there is another way of understanding competence and incompetence that is, perhaps, more enduringly relevant.

I think that competence in government isn't necessarily about managing, or mismanaging, anything. It can be understood as a purely policy phenomena. I would call someone incompetent if they make a policy decision that led to problems that could easily have been foreseen but that took them unawares (expected problems aren't incompetence, more often they are trade-offs). You can see this kind of incompetence in both of the major administrative scandals that are engulfing the Government. The tripartite structure's weakness in the face of serious pressure and the merging of HMRC combined with complicated tax credits and shortages of resources leading to administrative chaos and data protection failures.

I think that this is a key part of how the public understands political competence and incompetence. It essentially recasts competence as a simple question: how cautious is a politician of the possibility that their policies will have unintended consequences?

That seems relevant for even the least managerialist Government. The next thing that needs to be thought about is how a Government or opposition can make themselves more competent. An answer to this question is tricky but I think that subjecting their policies to a more severe 'trial by fire' within their party and movement would be crucial.

Thursday, November 29, 2007

'Liberals' conspire against the Public Sector Rich List

This post by Gracchi on the Liberal Conspiracy website attacking the Public Sector Rich List has plenty of phoney 'gotcha' moments. Fortunately, none of them remotely stack up:

"Firstly its noticeable that on their website, they claim the need for this survey because these public sector workers are paid so much more than teachers, soldiers and policemen. The politics of envy resurfaces and is evident in many of the comments! Such an argument presupposes a commitment of some kind to equality- and acknowledges the injustice of directors of the Royal Mail sitting in plush offices earning millions whilst soldiers sit in Basra risking their lives earning thousands. I’m not sure how that sits with the reductions in taxation that the TPA advocates elsewhere- nor am I sure that the only inequalities are within the public sector."

Let's look at the actual reasons why we said the Rich List was needed:

  • "Transparency. People and organisations that receive large amounts of taxpayers’ money should be accountable to the public they serve. Taxpayers should be able to judge for themselves whether the remuneration of senior officials represents good value for money.

  • Rewards for failure. People in the public sector should be paid well for good performance. But in far too many cases senior public sector officials are being paid over the odds for dreadfully poor performance, which in some cases would warrant a sacking in the private sector (see Table A1.2 for 10 examples)."

We did include the wages of soldiers, nurses and policemen in our report but as a comparison. Some of the bigger salaries are so high that the numbers can almost become meaningless. Just like the £101 billion of waste figure in the Bumper Book of Government Waste they need to be compared to something so that people can get their heads around them.

"Secondly they argue that the salaries of public officials should be justified- and they are right. Lets take Adam Crozier, chief executive of Royal Mail. He is paid a ridiculously vast amount of money, but he was recruited from being Chairman of the FA- and before that was a leading advertiser. If the TPA believe in the efficacy of private markets setting wages then Adam Crozier is probably being paid at about the market rate for a chief executive- and so are many others amongst these fat cats in the public sector. Ultimately the cause of the pay of the public sector fat cats is the pay of the private sector fat cats. If you want to get your hands on these types of people you have to pay these types of salaries. So if you want to take a look at public sector people being paid too much for these jobs, perhaps you have to either settle for rubbish directors (of which more in my third point) or you have to think about private sector pay scales."

Firstly, private sector Chief Executives often make far less than even the average in the Public Sector Rich List never mind Adam Crozier. This was pointed out by Chris Dillow in his response to a Comment is Free piece making a similar point to Gracchi's:

"The Institute of Directors reports (pdf) that the average managing director of a firm with turnover below £5m gets a basic salary of just £65,000. One with a turnover of £50-500m gets £141,440. These are decent professional salaries, but not a fortune. And the survey also finds that public sector bosses are already paid more than private ones, at least outside financial companies (which are managed so much better, of course)."

Of course, the Royal Mail is a big company and Crozier doesn't, necessarily, represent bad value. However, the Royal Mail's performance this year has been far from brilliant. Gracchi doesn't have the slightest clue whether he is being paid the right amount and the idea we should just trust the judgement of the Royal Mail's Remuneration Committee to get it 'right' is palpably ludicrous.

In the private sector when a senior manager is paid too much shareholders should be up in arms. The revolt over Jean Pierre Garnier's deal at GSK is a classic example that should be emulated more often. In the public sector the public need to fulfil that role. They need to fight the temptation for public sector organisations to be run for the benefit of management instead of the public. Our rich list allows them to do that.

"Thirdly, ah says my Taxpayers’ alliance friend- but the question is whether they have any impact on their organisations. But again that presents him with an ideological problem. Generally researchers for the TPA believe in hierarchy and hence in differentiated pay. There is lots of evidence, just have a look at Chris Dillow’s blog, that company directors don’t necessarily have an impact on their company stock’s performance- and its quite possible that the same thing applies in the public sector but again all the arguments in favour of or against hierarchy apply similarly in both sectors and hence all the arguments for and against large pay differentials and packets!"

The idea that because you believe some managers are good value you should believe all managers are good value is idiotic.

"The ultimate problem with this kind of Daily Mail politics is that in order to establish that well paid bosses don’t make the public sector any better off, the Taxpayers’ alliance would have to accept that well paid bosses don’t have any positive impact on any organisation. Otherwise they are arguing for poorer public services! (Or perhaps that equality is a moral good which trumps efficiency, but again is that a unique truth for the public sector!) All these arguments seem to me to rebound upon their owners."

This is full of non-sequiturs. Just because we think some public sector bosses offer poor value we don't have to be opposed to well-paid bosses in general. Equally, just because we find big pay packets in the public sector alarming doesn't mean we have to in the private sector. If a firm in the private sector pays its senior management way too much then they will be hurting their ability to compete in the market. Public sector organisations, by contrast, are often monopolies and are paid for by money taken from a taxpayer who has little say in the matter. They don't face the threat of creative destruction if they prove inefficient.

"In a sense this isn’t important- the list they did didn’t really make the national media."

This is utter leftie hubris. I'm afraid a little boasting will be necessary to refute it.

The report got excellent coverage in the national media. It was initially an exclusive for the Sunday Times who put it on the front-page, gave it two pages inside the paper and wrote a leader on the subject. It was then covered by Sky News, BBC News 24, the Mirror, the Express, the Scotsman, the Times, the Telegraph, the Financial Times and the Sun - in many cases quite prominently. It's hard to think of a recent thinktank publication that has had better national media coverage.

Finally, we had this in the comments:

"Of the top ten on the list, six cost the tax payer nothing at all.

Network Rail, Royal Mail, BNFL, and Channel 4 are not parts of the civil service. They are public owned market bodies. They earn their revenues from business activities, and they pay their from those revenues.

So what do they have to do with the tax payer’s alliance?"

These are organisations either owned or heavily subsidised and guaranteed by the taxpayer. If they go belly up we will wind up with a hefty bill to pay. Every penny the Royal Mail pays to Adam Crozier is a penny that will not contribute to the Royal Mail's return on the taxpayers' big investment in owning Royal Mail.

Gracchi's article is a mish-mash of simplistic assumptions and clumsy logic that can't stand up to the slighest scrutiny.

Cross-posted from the TaxPayers' Alliance blog

Wednesday, November 28, 2007

Putting a politician in charge of financial stability

Defending financial stability in an economy near you... soon...

Peter Franklin strikes again:

"Devoting a Cabinet minister to financial stability is no guarantee of financial stability, but it would help and, if nothing else, would send a message to the anxious savers and pension fund holders of Middle England that we take their concerns seriously."

At the moment no one has direct overall responsibility for financial stability. I think that just about the only way you could make things worse is to put a politician in charge. This isn't an area where there are many ideological issues at stake that should be decided democratically. It is, instead, an area that requires expert and experienced judgement.

Your ideal person to put in charge of financial stability is someone respected by the markets with a real knowledge of economics and how the system works. A non-politician. Make it a ministerial post and you're highly unlikely to wind up with someone qualified to oversee the financial system (of course the same can be true with the Civil Service - see Sir John Gieve). There aren't really people with those kinds of qualifications in the Commons - just a few ex-financial journalists and the odd banker.

You'll probably get someone who won't have real experience in anything but politics. Particularly given that it will be a job where people only notice the minister if things go wrong. Just like the Home Office at the moment it will be a poisoned chalice which will mean it won't even get the brightest ministers. Whoever got the job would just have to watch, fearfully, and hope things take care of themselves. If something went wrong there would probably be a carefully established media strategy but little idea of what to actually do about the problem. The stability of the British financial system would be further impaired and Middle England wouldn't be impressed.