Bloggertarians

The bloggertarian debate has gotten a little heated. It's made me think. First, about this question:

But - in passing - none of the Bloggertarians ever address the question of how you can have a CBI without ID cards?

Well, it's just one more benefit like the dozens paid right now to countless people without ID cards. It doesn't have any special quality that makes an identity card necessary. How can you have free museum entrance without ID cards?

Beyond that, it forced me to confront just how rare I am in being a non-libertarian blogger. There are left-liberals and dozens of libertarians but I reckon you could count the conservatives in the UK blogosphere on one hand. That isn't at all the case in the US blogosphere or in the broader movement here. The only other environment in which I've seen libertarians enjoy such an ascendancy among the Right was in the students' union.

I'm not quite sure what to make of that.

The unemployed and migration

Chris Dillow posts at Liberal Conspiracy lamenting the Left's unwillingness to challenge the tendency of right-wingers like me to "blame the victim" of unemployment.

This was a response to the comments on an earlier post of his where I argued that the important skills shortages aren't in occupational skills, the need for which is hard to predict, but basic social and intellectual skills. Chris responds that most unemployed people don't fit into that category at all. That I'm blaming the "genuine losers from the creative destruction that is inevitable in a market economy" for their hard luck.

I think he's missed the point. He is right to note that most unemployed, or economically inactive, people do not have the social problems I'm discussing but they aren't are victims either. From the Liberal Conspiracy post:

"3. Unemployment is not a “pool” but rather the difference between two quite fast-flowing rivers. In any one month, almost a quarter of the claimant count measure of unemployed leave or join the count (table 10). If they’re so idle, how come so many of the unemployed leave the register so quickly?"

I had a period like this after I left university (I didn't claim unemployment benefit but that's not particularly crucial to this debate). My skills would have been more than sufficient to secure a quite respectable job immediately but instead I was not employed for a bit and found a job I really wanted. I'm quite pleased with the way things have turned out. This is quite normal and the source of most unemployment (most of the unemployed could find "a job").

I wasn't a victim. Neither are most of the short-term unemployed. Short-term unemployment only becomes a real problem when a mess of a benefits system undermines the incentives that encourage people to be a bit flexible about the kind of job they will accept. That turns short-term joblessness into long term unemployment.

I still think I was focussed on the right problem in my original comment. Shortages of basic skills (those you can easily predict an ongoing need for) don't just create unemployment, after all:

1) They are spread out across the unemployed, those on incapacity benefit, those economically inactive and - more than anything - those in low value and patchy employment.

2) They have particularly pernicious effects. Young people have the potential to stay in long-term unemployment for longer, are more likely to have dependent children and are more likely to spend their free time making other people's lives a misery. I'm not saying unemployment among the over fifties doesn't matter. It does and we clearly need to do some serious thinking about how we improve opportunities for older people. However, long-term youth unemployment creates more problems for more people.

3) Long-term youth unemployment is the most relevant to demand for migrants. A failure to consider which shortages migrants can effectively fill is, I think, the big flaw with Chris's original post.

Most vacancies are just as temporary as most unemployment. How many of the vacancies that Chris used to justify an economic need for immigration would be filled within days, weeks or months?

Imagine what would happen if migration were used to fill short-term vacancies in a dynamic labour market:

Day One: Large number of vacancies. Immigrants respond to the demand and enter the UK labour market.

Day Two: Whole new load of vacancies. New immigrants enter the labour market. Immigrants from Day One and earlier run a similar risk of becoming unemployed to the indigenous population.

This process continues ad infinitum. If the labour market needed immigrants to fill short-term vacancies it would need immigration on an unimaginable scale. I doubt you could even get the immigrants here in time to significantly shorten the length of the vacancy.

Migration only really makes sense if it is responding to a medium to long-term demand for labour. Young people are the ones who really compete with long-term immigrants. It is their lack of basic skills that makes them unable to fill junior positions and creates a demand for mass-immigration. As such, if British young people were more employable there would be less demand for migrant labour. Some of the demand that migrants fill could be filled with domestic workers if they could be provided with skills that we can predict a need for.

None of this is particularly important to my own thinking on immigration. I'll set that out another time. However, I do think it is important to understand the trends driving economic demand for migrants and I'm not sure Chris's focus on shortages of occupational skills can facilitate such an understanding.

Rory Stewart

Rory Stewart's story is incredible. There's a good account from the National Geographic here. This is one of many fascinating sections:

"On a deeper level, however, his friend Martin is right. The people from whom Stewart draws inspiration spring from the dusty shelves of history, men such as Alexander, Babur, Lord Byron, and T.E. Lawrence. These figures not only achieved monumental things, but they did so according to a moral code Stewart finds irresistible, one that includes generosity, bravery, honor, greatness of soul, and magnificence in gesture.

Stewart has written quite a bit about heroes, and he maintains that past societies not only tolerated the vanity, violence, and godlike yearning of these men, but they viewed those qualities as necessary for heroism itself. For 2,500 years the notion of the superhuman hero shaped art, literature, and rhetoric and provided a model of how to live. But by the mid-20th century the social context had changed. Western society, with its industrialization, democracy, and new attitudes toward masculinity, stopped forgiving the ambition of would-be heroes. Today, Stewart argues, we are left with primarily one kind of hero, the "victim hero," an individual judged not on his accomplishments but on what happens to him, like the 9/11 firemen or like Pat Tillman, the football star turned Army Ranger who was killed by friendly fire in Afghanistan. Stewart, in a 2005 article he wrote for Prospect magazine, remains decidedly ambivalent about this evolution:

Nostalgia for dead tyrants and the longing for heroes are unhealthy and they can result in the deification of a Saddam as easily as a Havel or Mandela. But we shouldn't fool ourselves into thinking we have lost nothing. The drive to be godlike and do the impossible is gone and we will see this loss in music, in novels, in painting, in architecture and the way we shape our lives. September 11th has produced only miniature heroes because our culture has freed itself from many of the old, dangerous, elitist fantasies of heroism …. But in so doing we have not only tamed and diminished heroes. We have risked taming and diminishing ourselves."

I think there is a very, very profound thought behind this. It connects to the broad case set out in Alan Bloom's The Closing of the American Mind. The idea that we have lost contact with heroism itself - along with evil, the sublime and any other concept too deep to fit into an Oasis album.

Mark Steyn wrote a brilliant article recently on music, another side of the Bloom case. Our new, unshakeable, faith in relativism made it impossible for us to see that Shostakovich was more valuable than in Supergrass. Supergrass are easier, quicker and less effort; Shostakovich couldn't compete on artificial terms of equivalence; people stopped listening to classical music. We lost the vital inspiration and meaning that high culture used to provide.

Public service oddities: Scottish wolfman edition

As Tim reports on the TaxPayers' Alliance blog some councils spend far too much on formatting and printing their accounts:

"At a cost of £4 per copy, 1500 copies were produced, resulting in a bill to the taxpayer of £6000. As you can see above, it's clearly an expensive, hefty report. My source was sent 3 of these by post, at a cost of roughly £8 postage – odd seeing as the Trust could easily have emailed the report to our activist.

Seeing as the Trust didn’t send any by email, this resulted in a total postage bill for all posted reports of £21.20. That doesn’t sound that bad, but factor in that the Trust only posted 40 sets of accounts."

Others spend too little. These (PDF) were clearly scanned by a monkey with a soldering iron and are a year out of date. Then again, perhaps training a monkey to scan documents with a soldering iron is expensive? It is almost certainly time consuming.

Of course, neither expensive accounts nor monkey-embossed accounts are as frightening as the wolfman discovered by NHS Lothian!

(You've got to look at it right)

Finally, the Crofter's Commission website confuses me. I had no idea what Crofting was. Seeking an explanation I found this:

"What is crofting?

The Commission considers the meaning of ‘crofting’ to encompass the close and interlinked relationships between the land and the economy, agriculture, environment, heritage, culture and distinctive lifetyles of crofting communities."

What?

Wikipedia is more helpful.

Inayat Bunglawala is a fraud

Gracchi has a brilliant post up on Inayat Bunglawala's rather inconsistent attitude to free speech. Turns out he's all for defending people's "fundamental right to say that I want to bomb you, [their] fundamental right to download materials from the internet about bombing and to write poems about how nice your brains would look if only they were blown from your skull" but not so keen on allowing any criticism of Islam.

Combine that with Perry de Havilland's excellent fisk of Dr. Abdul Bari's interview with the Telegraph and you have a pretty decent primer on the MCB's contribution to the national debate.

For an examination of their more 'practical' contributions to extremism you'd need to watch the excellent Panorama on the subject (this is an online version but I think it is similar enough to the original broadcast). The programme doesn't follow its lines of inquiry through to their conclusion but it should be pretty obvious how deeply unsatisfactory Sir Iqbal Sacranie's answers are.

Public service oddities: local government edition

First, I love some of the front-covers that councils put on their accounts. Now, I've got family from Leicester and have quite an attachment to the place but this (PDF) seems a little... optimistic:


Lichfield's (PDF) is a masterpiece of political correctness. Look children, all the peas of different colours are in the same pod!
Next, Limavady have a web tool I've seen on a few council sites. Basically it reads whatever you mouseover. Who is that catering for? If you're a blind person surely you aren't able to mouseover things so that they are read to you. The only people I can think of who could use such a tool are the extremely dyslexic and illiterate. If anyone knows I'd love to know who it is targetted at.

In the meantime all manner of fun can be had pushing the button in the bottom left of the page and then mousing over various items (although it doesn't appear to work on this computer - consider it a kind of lottery). They're all quite upbeat apart from "Payments" which sounds a little bored.

Finally, Maidstone County Council have a web game that allows you to alter items in the budget to see if you can avoid having to raise council tax. Unfortunately they haven't included "Chief Executive's salary" or "the budget that was tapped to pay for this bloody game" which would, I believe, be most people's preferred targets for reductions.

One final thought: You see these budget games a lot. Sky had one recently where Adam Boulton delivered a news report summarising your achievements, one enterprising soul or another will usually set them up around the time of the Budget and I even remember being given such a game to play with at school. Don't they serve to indoctrinate people with a static view of the economy?

We need a supply-side game where you play new rounds set in five and ten years time and have pots more money to spend if you've put the right tax cutting package in place.

Lions for Lambs - a risk worth taking?

Gracchi thinks that Lions for Lambs is flawed but that it's central story (the Streep-Cruise showdown) is compelling. Normally I'd take his advice but these reviews are so utterly damning that I'm not sure. The Onion A.V. Club:

"Lambs' central chatterboxes function as bloodless abstractions—empty, unconvincing conduits for clashing ideologies. These aren't human beings; they're sentient position papers."

Dana Stevens:

"Meryl Streep tries to bring her "A" game to the scenes with Cruise, throwing in speech tics and bits of business to give her character some heft. But both politician and journalist are such cutouts (he spouts about the axis of evil, she sighs disapprovingly and scribbles on her pad) that they might as well be debating on Meet the Press. Cruise gets one juicy moment that recalls Jack Nicholson's iconic "You want me on that wall. You need me on that wall" speech in A Few Good Men. But he throws away the chance to embody the passion of the true believer; he never lets us forget that he's only pretending to be Republican."

John Podhoretz basically just describes the plot but, as Ross Douthat notes, that is pretty effective in establishing its ridiculous quality:

"After Cruise gets a phone call informing him that the new strategy is already a failure because Redford's two students are bleeding on the mountain, he turns to her and speaks the truth. He is tired of America being humiliated, he says. She leaves his office, begins to hyperventilate, and tells her boss that Cruise is going to become the next president and use nuclear weapons on unsuspecting Muslims. Her boss tells her to write up the news without mentioning the whole nuclear-weapons thing. She says she will not be a vehicle for warmongering propaganda the way the entire news media were the last time. He says she'd better, or Streep's sick mother will no longer be able to receive 24-hour care."

I'm half tempted to watch the thing just to find out if Gracchi has really got it so uncharacteristically wrong.

Being globally aware is bad for your health, wealth and freedom

Another day, another depressing headline. Yet another international league that Britain is at the bottom of:

"UK children aged 11 to 16 have the lowest international awareness among their age group in 10 countries, a British Council survey says."

The British Council receives £195,352,000 per year in government funding supposedly needed to "build mutually beneficial relationships between people in the UK and other countries and to increase appreciation of the UK’s creative ideas and achievements."

In order to do this they've come up with a study that shows us falling behind in our awareness of the world around us:

"British Council chief executive Martin Davidson said: "Our school children cannot afford to fall behind the rest of the world.

"For the UK to compete in a global economy, it is vital that we encourage our young people to have an interest in and engagement with the world around them."

Doees the evidence he has produced at all back that statement up?

Take a quick look at the ranking they've produced:

1. Nigeria 5.15



2. India 4.86



3. Brazil 4.53



4. Saudi Arabia 3.74



5. Spain 3.29



6. Germany 3.24



7. China 2.97



8. Czech Republic 2.51



9. USA 2.22



10. UK 2.19

To compete we apparently need to become more like Nigeria or India and less like the USA, Germany or China. Let's compare the British Council's index to a few key development indicators (click to expand any of these graphs, data is from the Economist World in Figures 2005):

So, more globally aware countries are poorer.

They're also less, economically, free. The economic freedom index gives more free economies a lower score.

Finally, they perform worse on the broad measure of the Human Development Index.

How can this be? Well, one of the questions asked gives a flavour of what the study was really getting at:

"Asked whether they saw themselves as citizens of the world or their own country, most saw themselves as global citizens - except in the UK, USA and the Czech Republic."

A genuine measure of international awareness would include measures like number of foreign holidays or ask questions about foreign customs, faiths and politics. On that measure the UK might do a lot better. However, this study isn't looking for that. The closest it comes is a question about whether people think they keep themselves aware of current events. Instead, it is looking for countries whose people do not consider themselves a distinct nation - it is looking for transnationalism.

Successful nations are built on a strong sense of national identity among their people. Thankfully - and despite the efforts of people like the British Council - we still have that in the UK. That national identity encourages co-operation, compromise and trust . Those describing themselves as international citizens probably don't feel any more attached to the people of the world than we do. They just don't feel a special attachment to each other. In Nigeria inter-ethnic wars show the horrible extremes such a process can reach when an absent national identity is replaced by other group loyalities such as tribe and religion.

Let's hope that unnaccountable quangocrats like those at the British Council don't succeed in convincing Britons that patriotism is some kind of sin.

Cross-posted from the TaxPayers' Alliance blog

Chavez and the King

The contrast between moderate decency and fanatical dehumanization could not be more acute than in this story:

"Mr Chavez called Mr Aznar, a close ally of US President George W Bush, a fascist, adding "fascists are not human. A snake is more human."

Chavez has clearly passed all the intellectual barriers to genocide. I suspect only the lack of an 'other' close to hand - too many of his enemies are foreign - has prevented him taking that final, unconscionable step. He is lucky that history has not afforded him the opportunity to join the ranks of the true dictatorial monsters. His regime is pathetic, illiberal and wasteful instead of genocidal and history's judgement will therefore be less emphatic. More on the Left's fringe might even be tempted to apologise for him as too many do for Mao.

Zapatero's response was - to his eternal credit as it must have been tempting to allow the slight to his old political rival to stand - just right:

"Mr Zapatero said: "[Former Prime Minister] Aznar was democratically elected by the Spanish people and was a legitimate representative of the Spanish people."

The King put the same message in less delicate terms:

"Mr Chavez repeatedly tried to interrupt, despite his microphone being turned off. The king leaned forward and said: "Why don't you shut up?"

Quite.

Why don't workers own and control the companies they work for?

The statist left, the left as most understand it, believe that government can make things better. That organisation by the state can outperform the chaos of the market. However, Chris Dillow is right to argue that this is not necessarily the logical conclusion of the Marxist call for workers to seize ownership from capitalists. He argues that for workers to own the firms they work for - within the market system - would be more just and for them to run those firms - from the bottom up - would be more efficient.

My father worked for a mutual and it seemed to work quite well. Largely as a result of that experience I'm quite open to forms of corporate ownership other than the public limited company. However, that is still the way most sizeable firms are organised (small companies often are owned by their workers - the corner shop is a classic example). Firms like John Lewis are very much the exception.

Why do we not have a John Lewis economy?

First, I will put a couple of reasons why workers rarely own the companies they work in. From there I will build the case as to why a hierarchy is necessary within most firms. Why do workers not own the firms they work in?

1. It is not in the workers' interest

According to Chris the managers are successfully rent-seeking at the moment so it seems unlikely that they would benefit from his new system. However, I also doubt the workers would stand to benefit from it either.

First, bear in mind that workers do own huge swathes of the corporate world. Pension funds are largely composed of their savings and have huge financial muscle. The question isn't "should workers own companies" but "should workers own the company they work for".

The next thing you must remember is that most people have the bulk of their wealth in the form of future income from labour. Their financial wealth generally has a much smaller present value, at least until they near retirement. Their expected future earnings are often tied up with the fortunes of their employer and their industry. It makes sense to use their financial wealth to diversify away so that if their employer or industry should suffer their fortunes will not be entirely ruined. To own the company they work for exposes them to greater risk and is not in their interests. That is why employees usually need to be bribed to take stock options.

What do they get in return? They get control of their workplace. Not much control though. In any firm of more than 100 employees they will, personally, have less than 1 per cent of the votes. Only if they think of themselves as part of the monolith 'workers' would 'they' really be in control. I'm not sure they do. I think the lack of class feeling among the workers has long been the downfall of Marxist analyses and undermines the idea of workers controlling their workplace as well.

Workers increase their financial risk and gain little but a symbolic power over their workplace.

2. It would stifle the economy's ability to respond to changing conditions

It is important that most large firms are owned by investors concerned, more than anything, with maximising their return. That interest means that they direct their capital where it is most valued. By contrast, workers cannot move freely between employers and industries. If workers owned the firms they work in they would not reallocate their capital if an opportunity for greater profit arose. New industries could be neglected as they are unable to build a critical mass of workers invested in them. In this way firms owned by workers would create the same sclerosis that many historians argue affected British corporate performance when it was dominated by family firms.

Only firms that exist will have workers attached to them. To quote Milton Friedman: "the interest-group whose self-interest is most aligned with the free market, isn't big business or small business, it's the businesses that don't yet exist". An economy dominated by worker co-operatives would make it hard for new industries, even if they were far more profitable, to attract capital and expand with new businesses and investment.

Making the economy less adaptable and hurting the financial security of the workers themselves seems, to me, to deal a serious blow to any case for workers owning their places of work.

Why firms usually operate as hierarchies

Chris argues that Hayekians, who are sceptical of government planning, should also be sceptical of planning by management within a firm. I don't think that really constitutes a case for worker control, bottom-up management. There is still planning whether that planning is done by one or a thousand people. Hayek saw the best system of organisation not as a democracy but a market. While more people making a decision might allow for more dispersed information to be used in decision-making the amount gathered in a corporate democracy would still be vanishingly small compared to the volume of information marshalled by the price system.

For firms - a space in which planning takes the place of the price system - to exist at all is a sacrifice of Hayekian principle. How they are organised is a trivial detail by comparison. However, Coase did a fine job of explaining why firms exist so that sacrifice in purist anti-planning principle should not be too galling.

Having external shareholders drives the need for a hierarchy. Shareholders need to be able to appoint someone who will manage their company for them. They then need to be able to hold that person accountable for delivering results. That really needs to be one person, to whom other employees are - in turn - responsible. Without the clear lines of accountability provided by a hierarchy there is too much opportunity for people to either avoid being held to account or be held to account for things outside their control. The skill of the manager is in ensuring those he manages know what they are responsible for, are only responsible for what they can control and are held properly accountable when they fail.

Therefore, Chris is right that corporate hierarchies are about power. However, that power is the legitimate power of a company's owners over all those who work for it.

P.S. I've only linked to the oldest incarnation I could find of Chris making this argument but have drawn on several arguments that he has made since. This has been such a theme at his blog that it would be more of an effort than I can manage right now to link to all his relevant posts on this subject.