Unprincipled politics

At a meeting of our Next Generation group this week, Sunday Telegraph columnist Iain Martin talked about the various failings of the Conservative Party. His primary criticism is that the Conservatives under David Cameron abandoned their principles in favour of telling people what they wanted to hear. That might have been a decent electoral strategy when the economy was booming, but once the financial crisis hit it left the Tories rootless and incoherent, so that no-one (least of all the Tories themselves) had a clear idea of what they stood for.

I more or less agree with that position, with the caveat I’m not convinced the Tories were that principled to begin with. Even a cursory look at the Conservative Party’s history will reveal that Margaret Thatcher’s reputed ideological fervour is very much the exception, rather than the rule. Indeed, many Tories will tell you that the rejection of hard and fast principles in favour of ‘pragmatic’, case-by-case managerialism is the essence of British conservatism. And as Sam wrote yesterday, the trouble with that mindset is that it leads inevitably to the persistent, piecemeal erosion of individual liberty.

After the speech, a few people asked me what I really thought about the coalition government. My honest response is not a terribly positive one. On education and welfare reform, their policies are generally pretty good. Their deficit reduction plan, while far less impressive than the chancellor’s rhetoric would suggest, is at least better than the alternative (I think that’s what they call damning with faint praise – ed.). There have been a few good moves on tax – like raising the personal allowance and cutting corporation tax – but it is hard to ignore the fact that they’ve has robbed Peter to pay Paul and skimmed off the top while doing it.

Beyond that, I struggle to think of anything nice to say. Certainly, when it comes to matters of personal freedom, this government borders on the fascist. The commitment to civil liberties that both parties claimed in opposition seems to have gone out of the window now they’re in government – the electronic surveillance powers trailed last week are even more despicable and grotesque than anything Labour managed to come up with. And when it comes to food, drink and tobacco, the government couldn’t be more in thrall to the bully-state establishment. To be blunt, they plainly care not a jot for individual liberty. 

I had hoped that coalition might mean the best of both worlds – that the Liberal Democrats’ civil libertarian, non-interventionism might be blended with the Conservatives’ fiscal conservatism and suspicion of state power.  That seems an increasingly forlorn hope.

Our road to serfdom

Reading the news this week, I have been reminded of FA Hayek’s classic essay “Principles or expediency?”.

The impossible task of liberals, said Hayek, was to argue for a general principle of liberty in circumstances where “pragmatists” wanted to give a little liberty up for some other direct and visible benefits. The benefits of liberty are unseen and indirect. They are sometimes hard to justify on a “pragmatic” case-by-case basis, but on aggregate are critical to a flourishing society. In Hayek’s words:

"it is not in our power to build a desirable society by simply putting together the particular elements that by themselves appear desirable. … If the separate steps are not guided by a body of coherent principles, the outcome is likely to be a suppression of individual freedom.”

So it is with the government’s plans to store every person's emails, search histories and social networking activities, and read them at will without a warrant.

Josh Lachovich has already highlighted the government’s hypocrisy in proposing this measure. The coalition parties’ manifestos and the programme for government all explicitly ruled out “database state” measures and, indeed, promised to roll back the surveillance state. Of course, these were all lies.

The depressing thing is how predictable all this is. “Pragmatic” erosions of our civil rights to date – CCTV cameras everywhere, centralized government databases of personal information, attacks on habeas corpus, covert surveillance operations by local councils and sundry encroachments onto people’s online privacy – have led naturally to this grotesque new plan.

Every new piece of authoritarianism has been justified as “counter-terrorism”. As Hayek would have recognised, the many freedoms we have given up “pragmatically”, ignoring the value of upholding the principle of liberty, have led to our current position.

Given the amount of our private lives that we conduct online, the government’s proposals are really just a modern updating of 1984’s telescreens, which videotaped the inside of every person’s home. If there is there any meaningful difference, I can’t see it.

The government’s new proposals are crass, authoritarian and stupid. All decent people oppose them, but they may go through nonetheless. When the principle of liberty is conceded in favour of false “pragmatism”, the great benefits of living in a free society go as well.

That is what Hayek meant by his often-misunderstood title, “The Road to Serfdom”. Each step along the way, giving up a little freedom, might seem expedient and sensible. By the time you’re in a country where the government indefinitely stores and can read your emails at will, it’s too late.

The ballad of Theresa May

By all accounts, this was a crappy week
for Mr Cameron and his Tories.
After taxing granny, pasties and the meek,
and seeing George Galloway crowned in glory,
the Home Office creates a scheme so fearful,
antithetical to liberal thought,
I'd pay a lot to give a great big earful
to a minister (shame they can't be bought-
that is, unless it's Dave that you'd like to see.
I wonder if George charges VAT).

The plan, we're told, is the implementation
(necessary for survival of the State)
of a GCHQ listening station
to stop these pesky terrorists of late.
We need this new system here and now!
But passage of the bill can wait till post-
the Games, as "Parliamentary time allows",
just exactly when we will need it most
"to obtain effective, real-time, viewing stats"
of web use (this includes photos of cats).

Never mind all the current legislation,
extensive in consequence and scope,
now laws that govern the British nation.
(They should not instil you with too much hope.)
I shall provide an example here for you:
see "section 58"! Ten years, for taking
a picture of a building in full view.
And if they can't prove you're below the board, Her
Maj can slap you with a Control Order.

They say stop-and-search mitigates the risks,
which as of the year two thousand and nine
meant none were arrested, six figures frisked
(the perps got away in the nick of time).
And remember that Libyan revolution
and how you took to Twitter fervently?
That's speech unsafe under our constitution
(you'll be needed at Belmarsh, urgently).
Want to tear down a foreign state? Well, this here's
unlawful, and will get you seven years.

When a book can be illegal and jail needs no charge,
the state has the tools it needs to play rough.
It's time to push back on Big Brother writ large:
we must say, and loudly, "enough is enough."
But I've now said plenty. Enough out of me:
time to get on the horn and call your MP.

Yes, Virginia, there is a slippery slope

A lot of people don’t like slippery slope arguments. To people who see themselves as pragmatic, slippery slope arguments are a convenient way for ideologues to rule out small reforms. As such, people who don’t already believe in the intrinsic badness of government are usually unmoved by the idea that a little reform they like might lead to a big reform they don’t like somewhere down the line, and dismiss the case altogether.

The worst thing about FA Hayek’s “The Road to Serfdom” is the name: many people who haven’t read it (and a few who have) assume that Hayek’s argument is that a state-provided safety net will inevitably lead to totalitarianism.

But slippery slopes really do exist. One good example is tobacco control. The health lobby tends to use tobacco as a testing ground for new pieces of authoritarianism, then extends them over the other things it doesn’t like.

When we released our Plain Packaging report on the latest anti-smoking wheeze thought up by health lobbyists, we warned that, if implemented, plain packaging laws would eventually be extended to things like alcohol. This was nonsense, said the health lobby. Tobacco is unique.

Well, yesterday the government released details of its alcohol strategy inquiry. Among the areas it will look at like “raising the legal drinking age” (because that works so well in the USA?), and “reducing the strength of alcoholic beverages” (like Iceland, which prohibits the sale of beer with more than 2.25% alcohol by volume strength), was this:

• Plain packaging and marketing bans.

Ah. Looks like tobacco isn’t as unique as they assured us it was. (Dick Puddlecoat also mentioned this on his blog yesterday.)

This shouldn’t be a surprise. As soon as Australia passed its plain cigarette packaging law, the health lobby moved on to alcohol. Winning the first piece of ground allowed them to move on to the next piece of ground. We saw this in the creep of “sin taxes” from tobacco and alcohol on to fatty foods and online gambling, and it’s happening again on the packaging front.

When some people make policy proposals, they think of themselves as all-powerful autocrats, supporting precisely the policy they themselves want, and able to limit governmental power along exactly the lines they think are appropriate.

But that’s deluded. The reality is that a government big enough to tax and control the things you disapprove of is big enough to tax and control the things you approve of, too. Slippery slopes are real, and they’re dangerous. 

The injustice of minimum alcohol pricing

I’ve struggled to write something about minimum alcohol pricing today. It’s a hugely important issue, and one I care deeply about. But I can’t help but be angry at the people who've proposed it, and the government made up of supposed “conservatives” and “liberals” who plan on implementing it. It's anti-individualism at its worst.

The “evidence-based” arguments made for minimum alcohol pricing are, in fact, based on distortion and bad science. The policy is paternalistic, indiscriminate, and only hits people who are frugal or on lower incomes. Slippery slope arguments are common, for good reason. But they’re especially appropriate here.

The idea behind minimum alcohol pricing is that all drinks must cost at least a certain amount per unit of alcohol in them. The figure being used right now is 40p per unit. On that 40p figure, the price of cans of (say) Becks would go up to at least £1, bottles of wine up to about £3.70, and so on.

If that sounds harmless, it’s because the temperance lobby have a clever strategy. Most people won’t oppose the principle of minimum alcohol pricing at such a low price level, because it won’t affect what they like to drink. But once the principle of minimum alcohol pricing is in place, the minimum price will climb inexorably upward.

The politics of this are straightforward but effective: target the most marginal, “problem” group – in this case, binge drinkers – with a low minimum price to pass an apparently-trivial law.

Once it’s in place, raising the minimum price is like boiling a frog. Bring the heat up slowly and steadily and, before people know it, they’ll be in boiling water. It’s what happened with cigarette duties: now taxes account for over 80% of the price of a packet of fags.

The justifications for this are completely, utterly bogus. Britain does not have a drinking problem: as ASI fellow Chris Snowdon has pointed out, we drink less today than ten years ago, less than a hundred years ago, and far less than we did before that.

Internationally, we are in the middle of the table in the European rankings, behind France, Germany and Spain, and far behind the Czech Republic and Luxemburg.

But what about binge drinking? In fact, the definition of “binge drinking” has been warped beyond all recognition. Three pints of strong lager in a day counts as a “binge” for an adult man, according to official definitions. A woman drinking two large glasses of wine is “binging” as well.

As Chris points out, the number of diseases defined as “alcohol related” has tripled in the last 25 years. When you change the meaning of words to suit your purposes, you can “prove” anything.

Minimum alcohol pricing is outrageously regressive, as are all “sin taxes”, only really affecting the behaviour of people who can’t afford expensive booze. In some ways this is Victorian-style paternalism, but the temperance movement of the 19th Century was about self-help and personal choice. Today’s anti-alcohol “health campaigners” are more akin to the American Prohibitionists. For them, the state is the ultimate weapon with which to impose morality on the masses.

And this, really, is why I hate minimum alcohol pricing so much. It’s puritanical fascism. That fear that someone, somewhere, may be having fun can finally be eliminated using the power and violence of the state.

All of the “evidence” in the world shouldn’t undermine the basic value we place on individual liberty. The case for minimum alcohol pricing is extraordinarily weak as it is, but nothing should undermine the right to choose our own poison.

A tale of two minimum prices

Consider two propositions. Firstly, that a minimum price on a unit of alcohol will reduce alcohol consumption by making cheap booze less affordable. Secondly, that minimum wage laws increase the price of a unit of labour, but do not lead to greater unemployment. 

These two statements are logically inconsistent and yet many people are able to hold both simultaneously. Some people take the opposite view: that minimum pricing won’t work, but that the minimum wage destroys jobs. They, too, seem to believe that employers respond differently to higher costs than drinkers.

There would be less disagreement if the minimum wage was raised to £50 an hour and the minimum price was set at £20 a unit. Clearly, there is a point at which the price exceeds what people are willing to pay. The only question is whether 50p a unit – as demanded by the ever-demanding British Medical Association – reaches that point. If 50p proves ineffective, we can surely expect campaigns for a 60p, 70p and 80p unit price in the years ahead.

Demand for alcohol is often inelastic, most obviously for alcoholics, but so is demand for labour. If a supermarket chain wishes to open a new store, it will have to employ shelf-stackers. The minimum wage might compel this employer to spend more on labour costs than would otherwise be the case, but at £6.08 an hour, it is unlikely to plunge him into bankruptcy. He might have to find savings elsewhere, but the store will still open. 

The situation might be different for the sole trader who is offered a contract to make a thousand widgets. The contract can be fulfilled, but only by taking on staff. If he pays £5.50 an hour, there is just enough profit to make the job worthwhile, but at £6.08 the margin is too tight. Deciding that the job is not worth the hassle, he turns down the contract and it goes to a company in China. We cannot know how often decisions like this are made, but it is doubtful that they are never made at all. The demand for labour may be relatively inelastic, but it is not totally rigid.

The minimum pricing of alcohol differs from the minimum pricing of labour only insofar as it is explicitly aimed at reducing consumption. The unintended consequence of the minimum wage is the intended consequence of minimum pricing and vice versa.

Ultimately it is a moral question. We might accept the loss of a few jobs for the higher goal of ensuring a higher wage for the low-paid, just as we might accept that forcing the majority to pay more for their beer is a price worth paying if a few problem drinkers cut down their consumption. The economics remain the same in both cases, but there is one significant distinction. Whereas the minimum wage compels supermarkets to give low-income workers more money, minimum pricing compels poor consumers to give supermarkets more money. No matter how noble the intention, that would be a peculiarly ignoble consequence.

Weekend notes

Detlev Schlichter is on typically forceful (and, yes, depressing) form over at Paper Money Collapse.

We should accept that deleveraging is ultimately unavoidable. If it comes with a period of deflation – so be it. But we will get neither. The system will be sustained at this stage of arrested collapse for as long as policymakers can get away with it. My outlook is that we will get even bigger central bank balance sheets (forget exit strategies! There is no exit!), we will get no sustained growth but inflation will creep higher.

The noisy advocates of easy money and of government stimulus always pretend to care for Europe’s unemployed youth. It is today’s youth that would have most to gain from a cleansing correction now, and it is those who already made their money and who sit on inflated assets and overstretched balance sheets that have most to gain from the central bank’s policy of extend and pretend. That is, until the whole thing goes pop anyway. Which won’t take too long.

In the meantime, the debasement of paper money continues.

Have you read his book yet? If not, get your copy here.

***

Charles Murray's new book 'Coming Apart: The State of White America, 1960-2010' seems to be stirring up a lot of debate. His thesis, as I understand it, is that the gap between a new upper class and new lower class of Americans is growing, but that it has far more to do with diverging values, cultures and behaviours than economics. I haven't read it yet, but David Brooks says he'll be "shocked if there’s another book this year as important". For now, I just like Murray's comment to the FT on the race for the Republican nomination:

I am really unhappy with Obama. I really think he's terrible, but Romney and Santorum as the alternatives? Don't even think about Newt… I'm in despair. I mean, I'm a libertarian. I will take Romney over Santorum. And both of them over Newt. That's not a ringing endorsement, I know, but what can you say about such a field?

***

On the other hand, for all his flaws (and they are many) Mitt Romney has at least said something exciting about tax - he plans to cut marginal rates by 20 percent across the board. As Fraser Nelson wrote in the Telegraph last week, Britain's Conservatives should take note. They won't win the next election by chasing opinion polls and running scared from the Left's renewed class warfare. They need to craft an aspirational agenda that is worth getting out of bed to vote for. As it is, all the Tory leadership is talking about is which taxes to raise to provide cover for scrapping the 50p tax rate (which isn't actually raising money anyway). They blame the Liberal Democrats, of course, but the real problem is that they are themselves completely unprincipled.

***

In happier news, I was delighted to see the Wall Street Journal's Mary Anastasia O'Grady endorse the legalisation of cannabis on Fox News. Ever so gradually, the tide of opinion is turning against America's deadly, destructive, disastrous war on drugs. There is even talk that Colorado voters will approve a ballot initiative to legalise and regulate the production, sale and consumption of cannabis this November. Now there's something I could bring myself to vote for.

Why drug legalisation probably won't increase drug consumption

We've long been in favour of drug legalisation around here. One obvious reason is that it's your body, you decide what you'd like to put into it, food, other people's (yes, even other peoples') body parts or interesting chemicals. A second is that legalisation cannot be worse than the current disastrous situation of gross coruption of the body politic and society.

But there is always that worry: won't legalisation increase consumption? At which point there's an interesting economic argument that no, probably, it won't:

Many people, on both the pro and con side, recognize that inelastic demand is the core problem with most drugs. Inelastic means not very sensitive to outside influences: illegal drug abusers can’t/won’t quit because their demand isn’t responsive to the usual laundry list of things that cause people to modify their other demands: price, income, and externalities like danger.
....
One of the prime tenets of economics is that demand is either elastic or inelastic, but it isn’t both (other than when we assume demand as a straight line because it allows us to use algebra). Demand can adjust, and become more elastic with the passage of time, but it’s still unlikely to go from inelastic to elastic.

The very problem we perceive with drugs is that people will do near anything to keep getting them. Which is simply another way of saying that demand is inelastic. If demand is inelastic then legalisation is unlikely to increase consumption very much.

Even I'm not sure that this is perfectly true but I do think it is generally so.

A private solution to state failure

It is often said that the first duty of the state is the protection of its citizens. The police force in the UK received a 47% increase in its budget between 1997 and 2008. Yet there has been for many areas of the country no noticeable decrease in crime or the fear of crime. When the police do venture into neighbourhoods that suffer from large amounts crime they are more often than not seen as an alien force, there to stop and search large sections of the community on the most frivolous of grounds doubtless invoking legislation intended for terrorists rather than youths on the high street. 

The ability of the police to help to defend the citizenry to the extent that all the population regardless of income may enjoy security from crime is a myth put about by the police federation, the policeman’s trade union and their political masters. However, law abiding citizens need not pay the price of the state’s failure to perform one its most basic function. Liberalizing the UK’s laws on firearms would provide immediate private protection where government protection fails.

Opponents of liberalising our gun laws claim that the more guns available the more homicide, burglary and violent crime. This is wrong. Switzerland has over two million firearms in private homes and has a homicide rate lower than the UK at 0.66 per 100,000. And readily available firearms for personal protection are not without precedent. In 1900 when the England had close to no gun control laws, the homicide rate was 1 per 100,000. It is now 1.66 per 100,000. 

The US is often used as an example of what happens when gun ownership is let loose. However, homicide rates in the US have very little to do with the availability of guns and are much better explained by cultural and societal factors. Over the last two hundred years, homicide rates in New York were five times higher than in London even when neither had gun control laws.

Private security in the UK is usually too expensive to be accessed by most small shops or residential areas.  Indeed, the capability of private security guards to deter and confront wrongdoers is limited by the amount of force they can exercise. Because of the state's monopoly on firearms, people are dependant for their security on a public body notoriously unresponsive to their interests, resulting in a poor quality service where police will arrive after a crime has been committed with almost no ability to actually catch the offender.

A citizenry which is armed would not disintegrate into a mass of homicide and armed robbery. Rather, it is one in which the law abiding majority feel that their property and persons can be adequately protected. In the UK, those who have firearms are either criminals or agents of the state. It's high time this was addressed in favour of the citizens wishing to live their lives without fearing outlaws or the inadequacies of government law enforcement.

Government should butt out of marriage and churches

UK Equalities Minister Lynne Featherstone want to legalise gay marriage. Fine by me: I don't see why gay couples should not be able to sign up for the same obligations, rights and benefits that heterosexual couples observe and enjoy.

She also wants gay couples to be allowed to marry in church, like heterosexual ones. Again, I have no problem with that, if the church is willing to do it.

The Church of England, typically, is divided on the issue. As the Established Church, they do pretty well out of their cosy relationship with the state, not the least of which is that two dozen of their senior executives, the bishops, sit by right in the House of Lords. So when ministers tell them to do cartwheels the Church of England normally swallow their principles, hitch up their cassocks and cartwheel.

The trouble is that some time ago, the state muscled in on marriage. Churches had been doing their own thing for millennia, but when the state started taxing rich folks and paying benefits to poor ones, it had to find some way of defining families so that it could establish the tax base and the appropriate unit to which benefits should be paid (two can live as cheaply as one, and all that). So they nationalised the whole business, and shoehorned everyone into a single set of regulations, as governments do.

But should we be so shoehorned? Maybe one of the reasons why the one-size-fits-all state-produced marriage contract has declined so much is that people today are more individual, and want to fashion their own ways of living, rather than have a standard, off-the-peg package of obligations forced on them. And so they should. People should be able to draw up their own lifetime contracts, accepting some bits of the present marriage contract, rejecting others and adding different ones of their own if they choose. Certainly, the state might insist on some minimum elements if people want to be taxed, and draw benefits, as a family. But apart from that, it should keep its nose out.

Likewise, Ms Featherstone should keep her nose out of what the churches choose to do. They too may have their own minimum standards for marriage, which couples have to sign up to before they can expect to be married on the premises. Fine. Churches are private clubs, let them get on with it. Personally, I would be campaigning for them to accept gay couples, but I wouldn't force church officials to betray their consciences. These are deeply held ethical positions. Churches have been thinking about the morality of lifetime partnerships a good deal longer than Ms Featherstone has.

I do wish politicians would buzz off and leave us all to our private sphere, allowing us to wallow in our own eccentric diversity rather than forcing us into tidy moulds. At this, rate, they will be demanding that the churches should not discriminate on the grounds of religion, and should accept other faiths into membership. I don't know what Cardinal O'Brien is going to make of it when he has to hand out wine and wafers to his first Satanist.

Correction: An earlier version of this post claimed that the government planned to force churches to perform gay wedding ceremonies. This is untrue. The post has been corrected.