Adam Smith Institute

As the largely unwarranted festivities around the 60-year birthday of the National Health Service are dying down, the actual state of healthcare is once again hitting the headlines. Last week the British Medical Association (BMA) called for a thorough and independent review of NHS patients topping up their care. However, the report will not be ready until summer next year.

According to a BBC article on the issue, at present you have two choices. You can either pay for health care that would normally be free, or go without drugs that could help extend your life. They are in fact wrong. For many people the choice has already been made by the state because they cannot afford the first option. At present, lifesaving drugs are cut off from many who cannot afford to pay for healthcare outside of the state system.

Slowly, but too slowly, the ideological disgrace of denying top-up treatment is being realised. The BMA debate was a reaction to a woman dying of cancer who was denied free NHS treatment in her final months because she had paid privately for a drug to try to prolong her life. This is not a health service that that is the envy of the world.
 

I love discovering new or novel applications of property rights that make everyone better off without government interference.  A New York Times article charts the rise of so-called “community-supported agriculture,” in which families buy shares in local farms in exchange for a proportion of the meat and produce that is made. The families value locally produced, organic produce and are willing to spend a bit of extra money for the convenience and quality of the produce, in addition to whatever satisfaction they get from knowing that there is a successful old-fashioned, small-scale farm nearby. Because they are paying for a percentage of the produce, not a set amount, they have an extra incentive to help the farm succeed, and many of them even do voluntary fieldwork.

When small farms go out of business, so many people are quick to say that the solution is government subsidies. In contrast to government solutions, this system does not burden taxpayers who get no benefit from the farms, yet it still mitigates the risks of crop failure and market uncertainties that are inherent to small farms. Moreover, thousands of families get the benefit of fresh produce delivered to their door each week. In the lasts 15 years, the number of farms with this style of financing has grown from less than a hundred to over 1,500, and the trend continues to grow. Once again, the private sector solves a problem all by itself, and thousands benefit!

The end is nigh for the sandwich board...

A really rather important point about reductions in emissions: the targets must be time flexible. This means that the current UK idea of mandatory cuts each and every year is a very bad idea indeed.

If you'd like to know why government is so expensive, well, here's a little hint.

One for the brave: how to short the oil market.

A not very good restaurant is in fact a symbol of how far we've come.

And that journey was of course started by the invention of beer.

Yes, taxes on capital really are different from taxes on incomes.

And finally, Netsmith must apologise. This was one of the first (note, one, not the) places to point to the blog Wife of the North. It all might be going just a tad too far.

I've been banging on for some time now about how various people seem to massively misunderstand green taxes. Most especially, the way in which everyone seems to think that the green taxation of petrol should mean higher taxes than we already pay. As I've said repeatedly, if you work through the numbers from the Stern Review ($85 per tonne CO2-e)  you end up with the correct emissions taxation of a litre of petrol being 11 p. We already pay north of 50 p a litre. Yes, there are other things that need to be paid out of that: the cost of roads, noise and particularate pollution and so on, but the fuel duty escalator has, since 1993, added 23 p a litre in tax to pay specifically for the costs of those carbon emissions. There may be reasons to raise the tax on petrol (Gordon's spent all the money?) but greenery isn't one of them.

Now I see a report from the IFS that says the same thing:

The authors note that road fuel duty is much higher in the UK than the environmental cost of vehicle emissions would appear to justify.

Excellent, it was getting rather lonely out here, being apparently the only person in the country arguing that petrol taxes should fall.

There's a larger point to be made here. Whenever someone comes up with an argument that implies an optimal level of taxation (and this could be for green reasons, for equity, for moral purposes, whatever) it's always worth examining exactly what that optimal level is in relation to the taxes we already pay. For yes, there will of course be an outcry that this optimal level means we should increase taxes: but the truth is that as often as not we're already paying higher than that optimal level.

As we are here. Anyone who was honest about green or Pigou Taxes would be arguing that petrol tax should come down in the UK.

Yes, I can hear the crickets chirping too.....

Benjamin Disraeli, Prime Minister in 1868 and then again from 1874-1880, famously described Britain as:

Two nations between whom there is no intercourse and no sympathy; who are as ignorant of each other's habits, thoughts, and feelings, as if they were dwellers in different zones, or inhabitants of different planets. The rich and the poor.

Increasingly, that seems to be as true now as it was then. Fraser Nelson picks up on the same point in an excellent blog over at the Spectator CoffeeHouse, writing about 'Prime Scotland' and 'Third Scotland':

Prime and Third Scotland are half a mile apart in some places, but the two nations don’t interact. Somehow along the way, we – as a country - learned to look the other way: to worry about climate change, but not the poverty just a few miles down the road. To think that the taxes Labour charge somehow promotes a more cohesive society, when in fact it’s pouring petrol on the flames. State handouts may have been the cure to post-war poverty, but it’s the cause of 21st century poverty as we see in Glasgow East.

That really gets to the heart of the issue. It is years of socialist-inspired policy that has that has created or, at the very least, accentuated these problems. Welfare handouts and punitive income taxes have robbed people of the will to work and destroyed their self-sufficiency and self-respect. State education has left generations of children unable to read or write properly, and with little ambition and even less opportunity. Poorly designed council estates have descended into crime-ridden slums, with ordinary people terrorized by gangs as the police stand idly by.

I fear it's going to take real commitment and many years of hard work to turn things around.

We are living in a material world, and I am a material girl, or uh… MEP?

David Cameron’s decision to expose the expenditure of his MEP’s has been met with mixed reactions. Some Conservative MEP’s have allegedly reacted badly. In a publication that was leaked to the BBC, they outlined what they thought of Cameron’s desire to seem more transparent. Apparently, the expenses plan would be “counterproductive” and break European Parliament rules.

If Cameron’s proposal were carried out, Conservative MEP’s would have to publish a full account of their expenditure to an independent accountant under European Parliament allowances, twice a year.  Moreover, Conservative MEP’s would have to reveal the names of any members of their family that are employed by them, their salaries and publish details of any other staff paid from public funds. Also, they would only be able to receive bonuses that add up to less than 15% of their annual salary and they would have to repay any surpluses from their own salaries. This does not seem like a lot to expect.

Our MEP’s are elected to influence policies in Europe for their party; they are not elected to use taxpayers' money to pay for lavish dinners, hotel suites and their staff. The fact that a minority of Conservative MEP’s are daring to complain about these measures is outrageous. It is totally hypocritical. Public funds should be spent on worthwhile schemes rather than to ensure MEP’s can fly first class.  The government continually increases taxes; there may be less need to if our taxes were prevented from going towards paying for your MEP’s second home in Brussels. David Cameron's plan will make it much harder for MEPs to abuse their constituents in this way.
 

Perhaps this pub has a too unique selling point.

There's good and bad things about the thoughts and writings of Joe Stiglitz.

Mirroring our own ID cards situation, a problem from the United States.

It's certainly a little odd a member of Hamas trying to sue a British blog for libel. What reputation are you concerned about sir?

Exploring the inconsistencies of mandatory volunteering.

An updated version of don't send your daughter on the stage Mrs. Worthington (or for those a little younger, replaying a scene from Spinal Tap).

The world's number one tip on how to succeed at gambling.

And finally, what Pixar's been working on.

Yesterday, the should-have-been scandal of President Bush’s warrant-less wiretapping program reached its sad and anticlimactic conclusion. The FISA Amendments Act of 2008 passed easily. It retroactively legalizes the warrant-less eavesdropping on US citizens that has occurred under the Bush administration since 2005.  The act effectively grants immunity to the telecom companies who complied with the President’s program in spite of explicit privacy laws designed to prevent precisely such intrusion, and those whose privacy was intruded upon will no longer be able to sue the companies that handed over their data.

According to the previous FISA act, the president had to seek approval in a FISA court before proceeding with wiretapping. That court has granted almost every single warrant it has been asked for; the question, then, is why the administration decided it was necessary to skip that crucial step. The administration has not yet produced a single piece of evidence that this program actually helped to prevent any attacks. Moreover, the very Congress that is voting to legalize the whole affair has not been given details regarding exactly what transpired or why the government failed to get the easily-acquired warrants; they are voting to look the other way without even knowing exactly what they are condoning.

The only thing more frightening than this amendment is the lack of a public outcry against it. The move of the government to legalize warrant-less wiretapping should be a big deal, but it barely seems to be causing ripples. After the Constitutional Convention in 1787, Ben Franklin was asked whether the new government was a monarchy or a republic; his immortal response was "A republic, if you can keep it."  Here’s hoping that the American public wakes up and regains the nerve to do what it takes to keep it.

It has emerged that the government’s proposed changes to Vehicle Excise Duty (VED) bands will leave 9.4 million motorists worse off by 2010. Approximately 8.4 million people will pay out around the same as at present, while only 1.4 million are set to benefit financially. This is a retroactive tax that will penalise some of the poorest people in this country.

In these tough times it is wrong for the government to increase the tax burden, especially for those worst off. This is especially grating because Prime Minister Brown promised that this tax will decrease the tax burden. The Shadow Chancellor, George Osborne, claims that Labour is walking into another ten pence tax fiasco; however, this will ultimately depend on how the leadeship and Labour MPs react to the news.

My suspicion is that the leadership – for fear of dithering – will not back down on any policy until the election. While Labour MPs – increasingly resigned to the fact that they can’t shake off Gordon Brown – will cower behind their embattled leader, biding their time until forced to crawl meekly into their 2010 valley of death.
 

In certain quarters people keep arguing that the surging oil and food prices are caused by speculative international investments in these commodities. People who understand how the market is working have always maintained that the principle effect of commodity futures is beneficial because they smooth extreme swings of prices that tend to hurt consumers. A fairly convincing case can be made for this with regard to the market of the one commodity which has been exempted from the future markets: onions.

• Onions are the only commodity for which futures trading is banned.
  
• Back in 1958, onion growers convinced themselves that futures traders (and not the new onion farms sprouting up in Wisconsin) were responsible for falling onion prices.
  
• They lobbied Gerald Ford to push through a law banning all futures trading in onions, and the law still stands.

As a result of that we have seen extreme swings in onion prices over the last two years. Whereas oil prices have risen 100 percent and corn 300 percent - thanks to the future markets - the volatility in onion prices was even more extreme: they soared 400 percent between October 2006 and April 2007, only to crash 96 percent by March 2008 and then rebound 300 percent,

...reinforcing academics' belief that futures trading diminishes extreme prices, says Fortune. The volatility has been so extreme that many onion growers now believe the onion market would operate more smoothly if a futures contract were in place.

Yes, we've got another suggestion that the internet here in Europe should be censored. But there's more to it than meets the eye.

Another little limitation upon freedom from the same source.

Not that things are that much better in the US, although they at least have a free speech protection in The Constitution.

Thorstein Veblen knew why the G8 had to have multi-course banquests while discussing global hunger.

You can go on soaking companies for the tax money until you reach a tipping point: but it's very difficult to get them back again once they've left.

An excellent response to a grasping taxman from Paul Hogan.

And finally, well, thank goodness someone has worked that out.

This week’s Economist contains some sad figures about my home country, the United States. Only one third of Americans believe free-trade agreements are good for the economy, the lowest figure in the developed world. On the other hand, a famous study in 1992 by Alston, Kearl and Vaughan (google: “Is There a Consensus Among Economists in the 1990's?”) found that 93% of economists support free trade. Why is there such a discrepancy, not just in America, but worldwide?

Economics, in general, is not exactly intuitive. Most people don’t naturally come to the same conclusions that Ricardo and Smith came to without instruction and explanation. It is much easier to comprehend, "We should have tariffs because if we don’t, people will buy sugar from Jamaica instead of America. Plus — it could be contaminated since it comes from a developing nation."

The problem is that most people never really learn economics. Some high schools offer one course as an elective class, but most students go through high school knowing nothing of supply and demand and absolutely nothing of comparative advantage. In university, students generally only take economics if it is a required course — meaning many students graduate college without ever studying economics — even those who aspire to be high school teachers. If high schools did start to offer economics, who would be qualified to teach it?

The general lack of understanding carries grave implications. If voters oppose free-trade agreements, then politicians will certainly pander to fill their need. The doors open wide for demagoguery —meaning free-trade advocates are portrayed as insensitive and greedy.

It could be people never learn because they don’t have the opportunity. Perhaps though, it’s just because the OK! Magazine special of Wayne Rooney’s wedding is just so much more interesting than The Economist…