Thursday, May 24, 2007

Frum on Mao

Frum reviews and defends Jung Chang and Jon Halliday's book on Mao. He is right to celebrate what is a massively important study. Without Chang and Halliday's painstaking research, and with so much evidence lost and those with first hand experience of Mao's crimes getting older day by day, the legends he created around his life might have been allowed to stand as history.

We might have forgotten the extent of Mao's crimes. A hideously effective, although now being slowly reversed, attack on the decency, history and people of the world's most populous nation. Many Western intellectuals, such as Nicholas Kristoff who Frum brilliantly skewers as practicing the "well Hitler did build the autobahn" approach to history, have given Mao far too easy a ride.

Wednesday, May 23, 2007

Praguetory on the DTI

The blogger Ghost Cabinet is a thoroughly good idea. Encouraging more policy debate in the blogosphere is a fine thing. In that spirit, here's a, hopefully constructive, response to Praguetory's piece on the DTI:

"The DTI manages government assets of £10 billion and performs sundry other tasks with 10,000 staff on a budget of £6 billion per annum. It is a department in crisis. In a classic sign of an uncertain organization the DTI recently conjured up the following statement of purpose."

That spending figure is actually a little out of date. It's the number that was bandied around a little while ago but this year the DTI spent £6,899,000,000 according to the Public Expenditure Statistical Analyses.

"“Working to create the conditions for business success and help the UK respond to the challenge of globalisation”.

Are they succeeding? Firstly, let’s measure business success by considering movements in the value of companies. Between May 1992 and 1997 the FTSE 100 index rose by 92% to 4500 when Labour took over. If Labour had managed to maintain that rate of growth the FTSE would stand at 16,532 today. It is 60% lower at around 6,600. So that’s a big black mark."

That's a little unfair. The DTI is only one government department with a very limited capacity to create a framework for business success. It has little control over regulation and none over corporate taxation. Also, FTSE performance is a pretty imprecise measure of corporate success.

"To measure how the UK is responding to the challenge of globalization we should examine the UK’s relative competitiveness. The World Competitiveness Yearbook shows that the UK has slipped from ninth place in 1997 to 21st in 2006. The World Economic Forum also compiles a global competitiveness league table. In 1997 we were 4th since which time we have dropped to 10th."

This is a better measure of the DTI's failure.

"In their latest report, an inadequately educated workforce was cited as the most problematic factor of doing business in the UK. Another major weakness is the inefficiency of the UK’s tax system. We were ranked 67th. Britain came 51st for its burden of government regulation down from 13th in 1997 and we dropped from 11th to 26th on bureaucracy. In sum, UK plc is not responding well to the “challenge of globalisation” either."

The DTI has very little power to affect most of these issues. The Department for Education and Skills is responsible for education. The Treasury controls the tax system. Regulation and bureaucracy is created by all government departments (a lot of regulation comes from the EU of course). This should highlight that the problem is less that the DTI is making poor decisions and more that it has no ability to put in place the policies that might improve the lot of business.

"It is hard to understand how bureaucracy and regulation could become so much more damaging over such a short period until we observe that Labour have brought in 15 new regulations every working day since taking office."

Doing something to curb this constant drive to regulate should be the key task for any reformed DTI that actually seeks to make government less of a hindrance to business.

"A Strong Voice For Business"

Praguetory doesn't offer any particular proposals for change. However, the best idea I've had would be to establish a new Regulatory Audit Office with a similar mandate to the, excellent if sometimes overly diplomatic, National Audit Office. While the National Audit Office attempts to highlight waste a Regulatory Audit Office might do the same for regulation that is counterproductive or harmful to business. It might highlight profitable areas of regulation to repeal or reform. Politicians would quickly become aware that new regulation faced increased scrutiny and might be more careful about the impact of its plans.

Of course, regulation emerging from the EU would be harder to tackle, we have a limited say over EU legislation. However, it would still be a fine thing to provide our government with detailed analysis of harmful regulation to present to other EU states and the Commission in negotiations.

I'm pretty sure that the National Audit Office is pretty inexpensive so a new Regulatory Audit Office would cost a tiny fraction of the amount the DTI comes to. It wouldn't tackle other business concerns like poor education or corporate taxation but I'd be wary of a generalised 'voice for business' that might just become one more PR machine. Instead, focus on the one issue that really requires both investigative resources and constant vigilance, an issue where a decent internal but independent auditor could really become influential and help government form policy more effectively. The cost of regulation. Let outside lobby groups provide a voice for business on issues like corporate taxation.

Tuesday, May 22, 2007

Teaching History to Boys

Fred Thompson and Ross Douthat make a sensible point I've heard before, and set as a motion for a debating competition. There isn't enough teaching of military history:

"I agree with the general point of Fred Thompson's defense of teaching military history, and the old Victor Davis Hanson column that he draws on, though I share some of the caveats expressed here. The best reason to teach military history, to my mind, isn't that the Battle of Gettysburg is necessarily more important than half a dozen other topics a student might study, but that it's more interesting, offering an exciting gateway - particularly for boys, whose progress through our educational system leaves a lot to be desired these days - into a subject that can easily become dry as dust. Plenty of people, myself included, have gone on to be interested in the Missouri Compromise, the tariff controversy, and Reconstruction because they first thrilled to accounts of heroism and cowardice, genius and incompetence, at Little Round Top and Marye's Heights and Lookout Mountain. I'm willing to bet the progression rarely happens in the opposite direction."

Education is dominated by left-libertarian academics who think that history's purpose is to 'understand people' rather than tell extravagant tales about ancient massacres. This means that even study about the Second World War becomes all about the Home Front. There's room for a lot of variety in such a varied subject and the basic skills can definitely be picked up through looking at battles, generals and the like. The focus on soft, emotion centred, subjects has turned boys off history. I read military history in my childhood and it seems highly plausible it played a substantial part in leading me to more general historical study. A serious attachment to military history is something that most young men should grow out of quite healthily but the phase is an important one.

While we're at it. The two Shakespeare plays I was introduced to most frequently in my education were Romeo and Juliet and A Midsummer Night's Dream. Neither has the Henry V quality that I think might appeal more to the young male juvenile mind.

I'm not in favour of lowering standards to keep children interested. However, I don't think it is really credible to argue that teaching military history or Shakespeare's histories necessarily imply a lowering of standards.

Finally a green article that isn't hysterical

If every green article were like this one from the Scotsman the green debate would be so much less infuriating. It manages to combine a non-hysterical account of expected harms from global warming with an acknowledgement of benefits. It then moves on to a discussion of how we might go about adapting (or in this case helping species adapt) to the changes global warming will bring.

As an alternative to the apocalyptic scare story chosen from the absolute extreme end of the futures envisioned by the scientific community, completely ignoring possible benefits and making a lame case for global socialism it's a real breath of fresh air. Brilliant and far more persuasive.

Tranzi Watch: Save the children by paying all of Africa's medical bills...

This is truly spectacular, tranziism in its postnational incarnation:

"LONDON (Reuters) - Gordon Browns across Britain are calling for leaders of rich nations to help African countries abolish healthcare fees when the G8 meets in Germany next month.

In a publicity stunt, charity Save the Children has dispatched a car to travel round the country and find 840 people with the same name as the next prime minister.

Save the Children is campaigning for the G8 to pay for the abolition of healthcare fees in Africa and hopes by getting all the Gordon Browns in Britain to sign up, it might influence the Brown in government."

Brilliant, let's reinforce in African leaders minds that their budget is purely there for the purpose of enslaving or massacring their people. Replicate the dependency of poor regions in rich countries on an international scale. Create yet more corruption that ruins the chances of poor nations building decent states.

I'm not saying there's necessarily no role for international aid. Clearly at times, during disasters in particular, considerations about incentives and corruption need to go out of the window. However, institutionalising global healthcare provision is a dismal idea.

Gideon Rachman on Pakistan

The title for Gideon Rachman's piece on Pakistan "The Talibanisation of Pakistan" isn't quite right. He's actually talking about the Talibanisation of border regions at the moment. That doesn't make the evidence any less alarming.

"Peshawar, the capital of Pakistan's north-west frontier province, is a depressing place to visit at the moment. Islamic militancy and violence are spilling over the border from Afghanistan. Suicide bombings used to be unknown in Peshawar. But there have been 16 since September. A bombing in January killed the local police chief, who had been cracking down on militants. Another bombing last week blew up a local hotel and killed about 24 people. This is following the pattern of Afghanistan itself. Suicide bombings did not happen there until 2005. Now they are a deadly, weekly occurrence in Afghanistan, and have spilled across the border into Pakistan.

The phrase "climate of fear" is a cliche. But it is an accurate description of the current mood in Peshawar. The American consultate - the last major western diplomatic representation in the city - is surrounded by Green-Zone style fortifications. Moderate Muslims are intimidated. Threats have been made to shops selling CDs, barbers who have the temerity to cut mens' beards and to girls' schools.

The threat of a "Talibanisation" of Pakistan is by no means confined to Peshawar. There is currently a dangerous stand-off in Islamabad, where a radical mosque - associated with suicide bombers - has kidnapped some policemen. And things are much worse in the wilder fringes of the country. Last week I met local journalists who said that it is now just too dangerous for them to travel freely in the tribal regions like Waziristan. This too is a relatively new development. The reporters who I spoke to say that as recently as last year they were prepared to risk it.

One of the sadder aspects of the whole situation is the extent to which the moderate majority are intimidated by the threat of militant violence. In Peshawar last Friday I went to a seminar on American foreign policy, at the local university. As one might have anticipated the criticism was pretty strong. But, beneath the surface, there was also clearly many students who are very frightened by their local militants. (In the audience, I would say there were about 30 female students - two were unveiled. Of the rest, about half wore a hijab - a veil covering their hair, and the other half had the niqab - a full-face covering, leaving just a space for the eyes.) After the seminar one of the students came up to me and said: "I'm a moderate. I don't have a beard. But if things go on like this in Peshawar, my family could end up being driven out or killed.""

His concludes by responding to some Pakistanis who blame the US for this process, for funding the Afghan rebels against the old Soviet Pakistan. I think he's right to note that Pakistan bears just about as much responsibility as its Inter Service Intelligence agency played a critical role in their rise to power. More than that, I don't think that the old Muhajideen that the US funded were quite as radical as the Taliban, they were predominantely the old guard that the Taliban pushed out.

I also don't think he does enough to point out that the problem of extremism in Pakistan shouldn't be solely explained as an import from Afghanistan. Pakistan has its own problems with religious extremism that emerge from a dysfunctional politics and a state founded in religious identity.

Monday, May 21, 2007

The Political Economy of Fiscal Transfers

Wat Tyler examines fiscal transfers. Using numbers for regional taxation estimated by David B Smith Tyler reckons that the South East is transferring about 8% of its GVA north each year. He then posits that this is some form of electoral bribe by the Labour party. It's a fun argument but I'm not sure that logic can hold.

If you're the Labour party facing a first past the post election system your objective isn't just to amass a massive total of votes at each election, it is to win a majority of seats. That requires some kind of dispersal of votes over a variety of seats. Given that Labour has a massive surplus of votes in many Northern seats and the major electoral battleground is the South of England Labour is either very clumsy in its bribing or it puts in place a regional subsidy for other reasons. Equally, if this was just a bribe to the electorate by the Labour party wouldn't we expect to see more of an attempt to end the subsidy during Conservative governments?

The subsidy won't have existed before the twentieth century as the North-South divide is a creation of twentieth century industrial decline. As the twentieth was a Conservative century can we really explain enduring patterns in public spending purely in terms of Labour electoral advantage?

I would think the problem is most likely a result of a poorly thought out, ad hoc, initial response to industrial decline which became entrenched through chronic path dependencies. At first politicians just couldn't face trying to sell the idea that the North needed private sector recovery and would have to accept a decline in traditional industries, migration to the south and some degree of impoverishment (which would provide the incentive to new industries and migration south) for a time.

However, the spending designed to prevent this hardship, while it masked the problems for a while, made the root cause, the moribund Northern private sector, worse. As the Northern economy fell further behind that of the South it became less and less practicable to reduce the fiscal subsidy being sent north. After all, if public spending were cut from the North now it would have extremely low incomes as private sector activity is very low indeed. A vicious circle.

Gracchi on Pakistan

Gracchi appears to have built a rather elegant house of cards in his analysis, on Bits of News, of US aid to Pakistan. He first points to the fact that much US military aid to Pakistan since 9/11 has been used to strengthen its armoury to confront India rather than to bolster its fight against our common enemy in the Taleban. This is undoubtedly true but, as Gracchi notes, is not a critical objection in itself.

With military aid to any ally there will be a certain amount of leakage to that ally's other objectives. Britain was undoubtedly a very good ally for the US during the Second World War. However, clearly we did at times direct US help towards safeguarding our remaining imperial objectives which distracted, at least a little, from the fight the US was interested in: beating Germany and Japan. That was despite Britain and the US both having rather similar interests in most respects. Winning the Second World War was a priority for both.

In a state with radically different interests that effect is bound to be magnified. Clamping down on the Taleban is something in which Pakistan has only a marginal interest. Pakistan's Inter Service Intelligence agency was involved in creating the Taleban in order to stabilise their Afghan border.

I'm not implying that Pakistan is still loyal to the Taleban. I'm pretty certain the military at least see the danger in a revolutionary Islamic state next door. However, clearly in a list of Musharraf's priorities fighting the Taleban is much lower down the list than in the list of our priorities for Musharraf's attention.

As such, we're 'paying' Musharraf to do what we want. If we were to pay him entirely in the tools to do the job we want him to do why would he bother?

Gracchi's objection to this is that it alters the balance of power against a democratic state in favour of a military dictatorship. What he's missed is that this balance of power is far from delicate. No amount of US military aid is going to give Pakistan a realistic chance of winning a war with India. Even leaving aside nuclear weapons India just has too many people and too much economic power. It will always win a war with Pakistan.

Pakistan's strategy has been to create as powerful a military as it can, and develop nuclear weapons, in order to increase the costs of an Indian attack so that India cannot use a credible military response to strengthen its hand in negotiations over issues like Kashmir. The balance of power in this region isn't going to change if Pakistan is sold a few more jets or artillery pieces. At the very worst we might make Pakistan a little more intransigent over Kashmir. Given that pretty reasonable progress is being made on that issue at the moment I wouldn't worry too much.

The only real danger is Indian hurt feelings but given that Bush has signed a deal to break the Non-Proliferation Treaty in order to provide them with nuclear energy technology I wouldn't let fears of Indian resentment keep you up at night.

Sunday, May 20, 2007

Sarko starts well

Mr. Eugenides sounded an important note of caution about Sarkozy when he was first elected. There is an unpleasant mercantilist strain to Sarko that the British right should be cautious of.

That caution is still appropriate but so far things have gone well. His choice for foreign minister is a socialist but a Christopher Hitchens-like hawk. His first 100 days priorities are inspired. Tax cuts including the near abolition of inheritance tax and an end to the 35 hour week. He's even planning on putting limits on transport sector strikes.

At the same time Sweden is abolishing its wealth and property taxes over the next two years. The two countries the left has used as its poster children for so long seem to want the economic dynamism of the Anglo-Saxon economies. Of course, there are things these countries do well, Swedish school choice and French healthcare (less socialist than ours and better quality). However, the people of France and Sweden have clearly understood that more economically liberal states provide a prosperity that an overactive state cannot match.

Burning our Money on Secondary Moderns

The LSE Library is, indeed, excellent. Wat Tyler has been searching through it for evidence on just why Secondary Moderns went as wrong as they did. What he has uncovered is that they were very poorly funded. If a grammar school system were to be revived today it seems unlikely that particular mistake would be repeated and that does suggest Secondary Moderns might fulfill their proper function. They might really prepare less academic students for practical careers.

I have a lot of conversations with a teacher friend in a hard, comprehensive, school. Those conversations confirm what we've read in Frank Chalk's book. That many children and parents utterly resent the education their children are expected to undertake. They resent it so much that they destroy teacher morale and the possibility of other children learning and waste vast amounts of expensive time in education.

Even those children for whom a higher education is probably not appropriate do need some academic training. They need to learn how to read and write at a basic level. They need to become somewhat numerate to function in the modern world. However, attempting to focus almost all of their attention on academic study for most of their youth is too much. Asked to study all day they become easily distracted and restless. If they were to spend most of their time acquiring practical skills they might be not only better engaged with their education in general but actually pay attention in the smaller periods they are required to study academic subjects. We would increase the productivity of their academic education by reducing the time spent on it. This effect could easily be sufficient to create a net improvement in the academic standards of the worst off at the same time as increasing their training in practical skills.

If the benefits of education become less esoteric parents might do more to help schools out. A parent from a non-academic background is unlikely to have much time for formal academic education but most have direct experience of the importance of having, or not having, skills. If this caused parents to become more supportive of education it could have a transformative effect on educational outcomes among the worst off. It also explains how secondary moderns might come to exist, with equal funding unlike in the old days, under a framework of parental choice.

Now, the case for allowing separate schools rather than streaming: It would seem that in a single school academic achievement will always push out practical skills as the main objective. Academic skills are the hallmark of the higher social strata in wider society. That means that the leadership both within a mixed ability school and the political leadership will be biased towards placing a higher value on academic achievement. It was what got them where they are. This means that schools will be judged by the criteria of whether they succeed academically. Practical skills will not be given the attention they deserve. A separate school might allow those teachers and pupils who see great benefits in a practical education to develop their own sense of pride in practical achievements and not be seen through the prism of how well they do academically.

If right-wingers want to argue successfully for giving schools the freedom to select by academic ability they need to do more than cite the benefits of grammar schools for bright children. It seems probable that you can get most of the benefits ascribed to grammar schools if you just stream every subject. It is rather counterintuitive to argue that poor educational performance somehow leaks through the walls. Arguments for grammar schools also suffer in the face of the 'worst-off test' that is applied by the current Conservative front bench. Grammars might help a small number of bright poor people escape the fate they face at the moment but Cameron's challenge for an educational policy is that it attempt to serve the interests of all students.

Instead of making the case for grammar schools yet again the right need to start making the case for secondary moderns. These schools might properly focus students time on skills that will be of use to them in later life and develop their own sense of pride in the development of hardworking and productive young people. In one of reality TV's few redeeming moments this was what was seen when underperforming students were given the chance at an old secondary modern education. Choice in education could give that chance to a vast number of young people we are currently letting down.