Adam Smith Institute

An interesting list which informs the decision to go for nuclear. With the plants closing down, there really seems to be no choice.

More to the point on climate change. Those eeevil denialists have received how much in comparison to Greenpeace over the years? 

One simple way to sort out the mess of the welfare state. Of course, it would require leaving the European Union for the distinction between "British" and "EU" citizen is not allowed in the way necessary.

Using the techniques from Moneyball and its analysis of baseball we can now reveal that the greatest ever cricketer was SF Barnes. Definitely not Don Bradman. Shush, don't tell the Aussies.

Why we should support Tony Blair's new job. If people can get rich leaving British politics, perhaps more will leave British politics? 

On American politics: the source of the Ron Paul letters is revealed (and yes, that headliine is a ghastly pun. Shame!)

And finally, for a slow Friday afternoon, extreme hangman. 

Should we be worried that the price of oil is over $100? Of course, dollars aren't worth very much these days, so the price is illusory. But it's still high. In the 1970s, when the oil price quadrupled overnight (but that's government cartels for you), the shock to the developed economies was enormous. The current price rise is more down to markets - like strong demand from China - but still alarms many people.

However, high oil prices make it worthwhile to invest in other sources of energy such as solar, wave, and wind power. (So why, you may rightly ask, do government feel they have to subsidize such alternatives?) Higher oil prices induce consumers to cut back - to install more efficient domestic boilers and move to lighter, more fuel-efficient cars, to turn down the thermostat a notch, or to car-pool to work.

And high prices make it worth looking for more oil - which exists in sands and shale all over the place. And even the Middle East, which has 70 percent of known oil reserves, it relatively unexplored. Only 3 percent of the world's oil exploration has occurred there, according to Pete Geddes of the Foundation for Research on Economics & the Environment. Fewer than 100 new wells were drilled in the Persian Gulf between 1995 and 2004, compared with 15,700 in the United States (which has very much leaner reserves). And apart from the North Sea and a few other places, hardly any of the world's ocean floor is explored at all.

The trouble with oil is that 90 percent of it is controlled by non-democratic governments. It's not a market at all. And the existing producers have every incentive to keep the price up, and no incentive for new exploration. The only answer to the world's energy needs is to create an oil market - which can't happen until democracy and private enterprise is spread much more widely around the planet.

As we know there's a lot of screaming and shouting going on about how Gaia is about to kill us all and that in order to appease her we should be burning taxpayer's money at the shrine of renewable energy sources. Given that in the day job I might benefit from such sacrifices made by you all I thought I'd better check in with Jeremy Leggett, the doyen of those running companies which would benefit from subsidies and also calling for greater such. Sadly, I find that his arguments actually prove that I shouldn't get rich at your expense.

Second, subsidies for renewables, or their policy equivalent, are not needed for long. Costs for renewables are generally falling, just as the costs of traditional power are rising. When the two trends cross for a particular technology, in a particular market, a mass market will emerge, and dynamic new industries with it. The timing for this is measured in years, not decades.

The issue is whether UK plc will be a player, with strong domestic industries and domestic job creation, or miss out, having to import everything and support overseas jobs. As things stand we are set to miss out.

Mercantilist arguments for public subsidy were never going to make someone at the Adam Smith Institute all that excited but even when I might be a beneficiary of them I still need to point out that they actually prove the opposite, that we should stop all such subsidy immediately.

Sigh, I'll just have to find another way to shake you all down, won't I?

A virtual pantechnicon has delivered a new 2008 delivery of virtual books to our online bookstore. A title that caught my eye was How to Get Seriously Rich While Failing in Business: A Fat Cat's Guide to Management by Philip Sadler. You can buy it at a knock-down £5.99+pp (the normal price is £9.99 so that's quite a saving).

Looking at the vast pay-offs that go to FTSE-100 managers when they get fired, it certainly seems that you don't need talent to pocket the odd half million. But there's an art to it: you have to be sneaky and negotiate a package of perks and bonuses that will leave you rich without you having to do anything to justify them.

The Sunday Times called this witty commentary on business life 'A book dedicated to the not always popular themes of greed... and good old-fashioned fat-cattery.'

Buy it here, from the ASI bookstore. 

This idea of training Ministers won't work: it ignores incentives and the economics of structure.

Another way of looking at things. If fuel poverty is when more than 10%of income is spent on fuel, then are we all tax poor because we spend more than 10% of our incomes on tax? 

Perhaps we should ask the same question of Gordon Brown here. Which of his Cabinet should have got a 5 year jail sentence for smoking pot? If none, why should the drug be reclassified? 

Looking at the news that people actually read , rather than what they are presumed to want to read, or ought to read, leads to the conclusion that William Boot should have been working for The Daily Bestiality.   

Things are still grim up north. 

Things are not all they seem in the arguments about the UK, trade and the EU. Well, OK, we knew that, but wouldn't it be interesting if a Minister were actually to use the proper facts?

And finally, the only sporran of its type in the world. 

Today the UK government is expected to announce that it will resume the building of nuclear power stations. This is good news for the environment. Nuclear power plants are very clean. They produce very little of the carbon dioxide that fossil fuels produce. In emissions terms, one nuclear power station replacing a conventional one is the equivalent of taking thousands of cars off the road. Almost all the waste is recycled. A well-designed nuclear plant actually releases less radioactivity into the atmosphere than a coal-fired plant.

The bad news is it will take several years to get them up and running, and in the meantime Britain is increasingly dependent on foreign gas supplies. There could well be an energy crunch before the new plant is ready to take the strain.

So the question is: why has the government allowed this to happen. And the answer is: a bit of political ideology and a lot of political cowardice. Nuclear plants produce over a fifth of the UK's electricity, but many are getting old and inefficient. So they are being shut down, and by 2023 - under the policy up until now - only 4% of the UK's electricity would come from nuclear energy. Any sensible approach would have had new building programmes in place so that the power would be there long before the lights start going out.

But this is politics. Energy ministers like Michael Meacher were delighted to consign nuclear energy to oblivion: they hate it just as they hate nuclear weapons, and they loved the thought of wind and wave power doing the job instead. Which it can't. The political cowardice stems mostly from planning. Politicians fear that local people would object to new nuclear stations being built on their nice coastlines. Maybe they would. But the fact is that nuclear stations have a great deal of support from places that already have them, where they provide much-needed jobs. So rebuild and refurbishment on the same sites would not have been unpopular.

Now, however, the damage has been done. If the global warming scaremongers are right, maybe by 2015 we'll all be sweltering on a Cambridge beach rather than turning up the heating, so there won't be an energy crisis. But I'm not so sure.

I saw a woman wearing a sweat shirt with "Guess" on it.

So I said "Implants?"

She hit me.

6. "Nuclear power is uniquely dangerous and should be banned."

Most forms of energy production are dangerous. The number of deaths or serious injuries caused by the generation of nuclear power is very limited, even including those caused in the Soviet state-sector Chernobyl disaster. The numbers which result from other power sources are documented.

Coal mining, for example, kills several hundred each year throughout the world in mining accidents. It kills thousands of miners from lung diseases. It kills hundreds of thousands from its acidic and polluted smoke. Oil and gas kill their numbers in fires and explosions, and from suffocation. Hydro-electric power claims its victims as dams burst upon villages. The generation of electricity kills by the air-pollution which power stations cause, however they are fired. If solar power, wind power or wave power ever could be developed to supply a sizable fraction of the needs of an advanced economy, no doubt they, too, would claim their victims in various ways. Remember: wind power is not pollution free. It takes energy and materials to make and install those windmills.

Nuclear power may not be 100 percent safe. It is not, however, uniquely dangerous, and is safer than many of its rivals. It offers a relatively clean, cheap, and safe source of power. It is, in the form now being used, a renewable source. The new reactors use fuel more efficiently and are safer, and new and more secure methods of waste disposal and storage are continually being developed.

It would take many, many mishaps for nuclear power even to approach the coal industry in terms of damage to life and health. And nuclear power could never have the environmental impact caused by the burning of coal, especially of the dirty coal which is easier for developing countries to afford. Fusion power is probably the best future possibility, if it can be done, but until then nuclear power is a relatively clean and safe option.

"Economic growth imposes a hectic form of life, producing overwork, stress, nervous depression, cardiovascular disease and, according to some, even the development of cancer."

– from Histoire du XXe siècle, a three-volume set of texts memorized by French students preparing for university entrance exams.

Hap-tip to Stefan Theil in Foreign Policy magazine. 

And he's back! The NHS Blog Doctor that is, and with a very scary quote from a Professor of Paediatrics:

You know, if I were suddenly taken ill, I would be terrified to be admitted to a British NHS Hospital.

"You mean they actually vote for the lizards?"

"Oh yes," said Ford with a shrug, "of course."

"But," said Arthur, going for the big one again, "why?"

"Because if they didn't vote for a lizard," said Ford, "the wrong lizard might get in."

Geothermal energy seems like something for nothing. But as a mining engineer points out, that's something you only get very rarely. 

There are payday loans and Payday loans, but the logic is the same in each case. 

The WalMart model really was different, right from the very beginning. It started with logistics. 

And finally , time travel with the aid of your wi-fi router. Really, no, it's possible. 

One idea which pops up a lot these days is that the government should be motivated by 'quality of life' in its policymaking, and not just economics. Some even say that gross national happiness should be the aim, rather than gross domestic product.

Well, it’s a nice idea, but why do people always think a higher quality of life requires more government? In their recent report for the Conservatives, Zac Goldsmith and John Gummer even suggested that our 'quality of life' would be improved by compulsory parking fees at supermarkets. Hardly.

The thing is, quality of life means very different things to different people. The one common theme, however, must surely be the freedom to pursue your own idea of happiness – and that means less government, not more!

My quality of life would be much higher if only the taxman didn't steal so much of my income, for instance. If I was ill, I would be much happier knowing I could choose which hospital or doctor I went to. If I had children, I would be happier knowing I could choose their school.

As a Londoner, however, the biggest changes to my quality of life would probably come about if the trains were deregulated and the tube privatized, and I could get into work more easily. Of course, if only central London wasn't ringed by hideous tower blocks (built by the government), and if only our land-use planning system wasn't so restrictive, I might just be able to live closer to the office.

Policies aimed at making us freer and wealthier increase our choices, and give us a better opportunity to pursue our own idea of a good life. Whatever government does, that should be the aim.

The taste

5. "Prices of essential goods should be controlled so that the poor can afford them."

Price caps are one of those things that sound fine in theory but are disastrous in practice. Prices are signals which tell about supply and demand, like the markings on a thermometer tell about temperature. And just as you can't control temperature by bunging up a thermometer, you can't control supply or demand by fixing prices.

When the price rises for scarce goods, it tells people to consume less and maybe switch to alternatives. It tells others to produce more of them because there are profits to be made. The combination of less consumption and greater production acts to redress the scarcity. But it only works if prices can send their signals. If they are fixed by law to shield poorer people from their effects, there is no disincentive to consume, nor any reason to switch to alternatives. Nor is there any incentive for producers to bring more of the goods to market.

If the price of bread is fixed because of rising prices in a shortage, there is no incentive for people to turn to alternatives like other grains or potatoes. Nor is there any incentive for farmers to bring more wheat to market, or for foreign merchants to bring in their wheat to take advantage of the greater returns. There is no signal telling farmers they could profit by planting more wheat next year.

All that happens when prices are fixed by law is that the supply dries up, usually because no-one can make money by selling at the fixed price. Then the state steps in again to ration the scarce goods "fairly", and passes new laws to stop black market dealing in them. We see this happen for bread, fuel, and rented accommodation. Ultimately, the outcome is clear: if you fix the price, you only succeed in choking off the supply and making the shortage even worse.

America seems to be drifting back in history in a sort of time machine. The backlash against admittedly rather limited free market reforms by George W. Bush, exerted by the status quo left, is gaining momentum. If the polls in the run up for the presidential elections are correct, the 'ownership society' could soon be hit by a severe blow. If one of the Democratic hopefuls gets elected, Santayana’s rule is unlikely to be escaped: those who ignore historic failures are prone to repeat them. Such is the case with the old whore of universal health coverage, favoured vigorously by Hillary Clinton, John Edwards and only haphazardly rejected by Barack Obama.

Remember, this is a policy introduced in Britain in 1908 at a time when socialist movements were surging through Europe. Leading Democrats are advocating this concept hundred years late. Is this what Americans get from the collapse of the Soviet Union? The current concept seems even more collectivist than the collapsed HillaryCare of 1993, which nearly derailed her husband's presidency.

Compulsory and comprehensive health insurance for everyone is expensive and would likely deepen the financial crisis in health care even further. It is also inadequate in times when Americans are in perfect control of up to 50% of their health risks, which renders comprehensive insurance obsolete. What is really needed is catastrophic, no-frills health insurance for everyone. That's the kind of safety net the late 19th century European reformers had in mind. And it would be much cheaper and therefore more affordable for consumers.

However, in the freest country in the world compulsion is unlikely to work. Look at car insurance: Despite being compulsory up to 15% of drivers in the US – depending of the state, but higher in the West – don’t care about car insurance. Ironically that is about the same percentage of 'free riders' in the yet not compulsory US health system!