It's been a busy few days in the media for the ASI.
On Friday we released our paper entitled The Party is Over - A Blueprint for Fiscal Stability by Nigel Hawkins. This received coverage in the Guardian, Daily Express, Mirror and over 70 regional papers and websites! ConservativeHome also wrote a detailed piece on the report.
On Saturday, Tom explained in the Yorkshire Post why the NHS needs to make spending cuts and should not be ring-fenced.
Eamonn then told the Sunday Times that Britain's real debts are five or six times the official figure and suggested how the government could solve this. He also commented on the waste of taxpayers' money on daft jobs within local councils.
And today Tom explained why raising Capital Gains Tax is a bad idea in Dod's House Magazine.
The Stock Exchange paid its own tribute to Sir Terry Leahy, who has just announced his retirement from Tesco where he has been a lifer.
Following Tuesday’s surprise announcement, Tesco’s market value fell by over £750 million as investors fretted that the supreme management skills that have driven Tesco to the pinnacle of food retailing in the UK, Eastern Europe and parts of the Far East were being eroded.
Famously, as a teenager, Leahy worked as a shelf-stacker at Tesco. He became Chief Executive in 1997, since when Tesco has continued to prosper: its annual sales top £62 billion.
Currently, it has a near 30% of the UK groceries market; furthermore, it is estimated that one-eighth of all UK retail expenditure finds its way into Tesco’s tills.
Tesco has also performed impressively overseas, where other UK retailers – Marks and Spencer comes to mind - have struggled. In particular, it has built up a strong position both in Eastern Europe and in the Far East.
The Tesco story in recent years has centred around top-class customer service, backed up by strong marketing and ruthlessly efficient logistics.
Given Leahy’s exceptional skills, a top public sector chairmanship role would be an obvious step – Chairman of the NHS Board perhaps?
More generally, Leahy has amply demonstrated the importance of large businesses having quality management. Relatively few people object to high salaries if a business really prospers. However, large pay-offs for failure rightly attract far more opprobrium.
In the public sector, it is harder to measure achievement. Certainly, in the past few years, very large salaries have been paid to some senior people in organisations that are either highly inefficient or require little commercial – as opposed to administrative - ability.
Hopefully, with much tighter public expenditure constraints, such excesses will cease.
ASI and friends gathered yesterday to commemorate the birthday of Adam Smith, our favourite classical economist. The reception was held at St. Steven’s Club, followed by a lecture by Irwin Stelzer, business economist, columnist for the Guardian and the Sunday Times (among others) and the co-founder of The National Economic Research Associates. The topic of the speech was the relevance of Adam Smith’s teachings on modern economic policy.
Mr. Stelzer took an unorthodox approach in his lecture: assuming everyone on the audience was a free marketeer, he argued in favour of some government intervention, and attempted to define the proper role of government within the economy. He highlighted six key areas in which some intervention would be desirable:
Fostering competition
Regulating when necessary
Internalizing externalities
Offsetting market failures
Preserving Free trade
Ensuring fairness of distribution
Mr. Stelzer labelled his approach “neo-orthodoxy”: a free economy with minimal, but well thought-out regulation to counterbalance market imperfections. Referencing Smith, he asserted that if the incentives are chosen well enough, “much good will follow”.
Well, maybe. But I wasn't wholly convinced. As the ASI's Dr. Eamonn Butler pointed out during the question and answer session, many – if not all – of the market failures Mr Stelzer drew attention to have their roots in previous government failure or intervention. He argued that if we got the first point right, and ensured that markets were genuinely free and competitive, government wouldn't really need to concern itself with the five that followed.
Colette Bowe, Chairman of the phone and broadcasting regulator Ofcom, was our guest at a Power Lunch in Westminster this week. Her topic was Why regulate a competitive market? – which is a pretty good question. Back in the early 1980s, of course, when the ('Completely impractical, minister') idea of privatizing the telephone end of the Post Office was mooted, the market was of course very different. The monopoly incumbent – British Telecom, as it became known after privatization – then controlled 100% of the UK's telephone system, wires, handsets and all. It now controls less than 50% of the fixed-line sector, one of the lowest incumbent shares in Europe.
Plainly, regulation was needed at the outset to contain BT's monopoly power. Like most privatization, this one cut with the grain of the existing structures, and breaking up BT into little, competing segments would have been even more difficult than keeping it whole, which was hard enough (privatization was then a completely new and unknown thing). So is it still needed, now that BT faces such competition?
Competition, as the first telecoms regulator Sir Bryan Carsberg used to say, is the best regulator. And all regulators say that competition is what they want to encourage. The question is, how do they know when they have achieved that happy state, and can retire. They need to have some premonition of their own sunsets. That is not so easy for people who are deeply involved in the minutiae of regulatory questions, experts who often think they can 'improve' on markets. It is obviously a decision for the boards of the regulatory agencies. But again, are they detached enough?
I am not quite sure why we have so many sectoral regulators any more. What we need, I would say, is tough pro-competition policy – and that applies as much in the gas or water industry as it does in rail or telephones. We should promote competition as a matter of principle, not meddle in particular sectors in detail.
Freedom-loving writers published in print or online have until the end of June to enter the Bastiat Prize. The think-tank, International Policy Network, is accepting entries in the form of print or online articles and blog entries.
The Bastiat Prize was created to celebrate witty and original opinion journalism by those who defend the principles of a free society and the importance of liberty. The total prize fund is $18,000 and there are two competitions, one for journalism and one for online journalism.
The prestigious Bastiat Prize is now in its ninth year and former judges have included Lady Thatcher and the Nobel laureates James Buchanan and the late Milton Friedman. This year’s judges include John Stossel and Matt Ridley.
Submissions must be received on or before 30 June 2010. For more information on how to apply go to: http://www.policynetwork.net/bastiat-2010-announcement
As the trial of Stephen Griffiths, the “crossbow cannibal” accused of murdering three Bradford prostitutes unfolds, it is impossible not be appalled by the allegations. Like far too many similar incidents before it, this case shows all too clearly the failings of the UK’s sex industry.
While the act of prostitution is legal in the UK public solicitation is prohibited, making street prostitution and curb-crawling illegal. Third-party involvement in the act of prostitution is also prohibited, which makes it illegal to keep a brothel, ‘pimp’ prostitutes or control them through an agency. This current state of legality can make selling oneself in a safe manner rather tricky, especially for the vulnerable.
Setting aside the moral controversy surrounding the sex industry, it is essential that prostitution be completely lifted from the black market for the safety of those involved. In the USA, female street prostitutes are 18 times more likely to be murdered than other women of a similar age and race. As prostitution operates in a hazy legal field, sections of the market are tied up in further criminality, such as people trafficking and drug dealing. Those people who turn to prostitution face a stark choice: break the law by working in a brothel or through an agency, or ‘go it alone’ with next to no support or protection from the potential dangers of an unregulated profession. It is often those in severe financial straits or suffering with an addiction who find themselves exploited and abused, unable to seek help because of their position. A tough police stance on prostitution does little to help the welfare of sex workers, but much to put them at risk. A crackdown on activities like streetwalking simply encourages women to seek new locations from which to work, such as more obscure neighborhoods or those without CCTV.
Instead of the current system, prostitution should be treated like many other professions; legal and regulated, as is the case in countries such as the Netherlands, Germany and New Zealand. Allowing prostitutes the safety and security of a fixed workplace and network of co-workers would put them at much less risk. Evidence shows that the commercialization of prostitution would lead to better rights for workers, better working conditions and more established routes through which to seek help. A legal, competitive brothel or agency would have the incentive to make sure their workers are clean and well looked after - or risk losing business.
You cannot just legislate against a ‘problem’ to make it go away, and the age-old profession of prostitution is absolutely no exception. This case should act as a catalyst for reform. David Cameron has indicated that he will reconsider the UK’s current legislation, although there seemed no discernable conviction behind his statement. The legalization of prostitution in all its variants is needed to make Britain a freer and more importantly, a safer society.
The General Election might be over, but there's another important one going on. This is the election to the chair of Oxford Professor of Poetry, chosen by a vote of Oxford graduates and current academics. If you qualify, you must register to vote by noon on Friday June 4th. Best do it NOW!
Why is this important? It has been a controversial post at times – last year it was marred by a "dirty tricks" campaign of scurrilous accusations. This year, however, ROGER LEWIS, the author and biographer, is standing "to lead a rebellion against sour academics."
Roger Lewis has written widely acclaimed biographies of Peter Sellers, Laurence Olivier, Orson Welles, and Anthony Burgess. He also wrote the very funny "Seasonal Suicide Notes," which illustrates the impish side of his otherwise scholarly self. He is a decidedly non-establishment candidate, standing to blow away the cobwebs with a breath of refreshing clean, cold air.
He has been a friend of the ASI over many years, is decidedly liberal (small "l") and has attended several of our functions, so we are happy to publicize his bid. Stephen Fry has endorsed him wholeheartledly.
"Brilliant… quite brilliant. For the first time ever I’m almost wishing I was an Oxonian so I could vote for you… The “ticket” on which you are campaigning is one that should unite anyone who cares for literature, art, honour, humour, delight - all the proper virtues. Such a position is ... liberal and liberating, kind, wise, funny and alive to all the dark, strange, ludic and improbable glories that poems (and especially poets) should embody."
Roger Lewis deserves support. If you are an Oxford graduate or academic, you must register by noon on Friday, and then have a further 12 days before voting closes. Register NOW...
A local council at Tweeddale banned a children's sports tournament that has taken place for 40 years, reports Laura Pitel in the Times. The reason? "to protect young players from becoming upset if they lost." Sports development officers at the local council believed that primary schoolchildren on losing teams would suffer from "low self-esteem."
In fact this is what has always happened. Children play sports at school and learn how it feels to win, and how to handle defeat. They learn to stretch their performance against others and strive to excel, and they learn composure when they lose and how to move on. They learn how to work in a team to achieve a result.
The council's policy is apparently "trophy-free," to enable the children to express themselves "without the focus on the result." The world is not like that.
Part of life is about expressing yourself, certainly, but part of it is about results. Part of it is competitive, too, and school is a good place to learn the skills and the demeanor appropriate to that.
Some parents thought as much, and started a Facebook campaign to have competitive sports restored. Now the council has reinstated the inter-schools football and netball competition.
This is good news for the children. Not only will they have the fun of competitive sports, but their long-term interests will be enhanced as their characters take shape and prepare them for a life that is not wrapped in the cotton wool of education psychologists.
The Stock Exchange paid its own tribute to Sir Terry Leahy, who has just announced his retirement from Tesco where he has been a lifer.
Colette Bowe, Chairman of the phone and broadcasting regulator Ofcom, was our guest at a Power Lunch in Westminster this week. Her topic was Why regulate a competitive market? – which is a pretty good question. Back in the early 1980s, of course, when the ('Completely impractical, minister') idea of privatizing the telephone end of the Post Office was mooted, the market was of course very different. The monopoly incumbent – British Telecom, as it became known after privatization – then controlled 100% of the UK's telephone system, wires, handsets and all. It now controls less than 50% of the fixed-line sector, one of the lowest incumbent shares in Europe.
Freedom-loving writers published in print or online have until the end of June to enter the 
As the trial of Stephen Griffiths, the “crossbow cannibal” accused of murdering three Bradford prostitutes unfolds, it is impossible not be appalled by the allegations. Like far too many similar incidents before it, this case shows all too clearly the failings of the UK’s sex industry.
The General Election might be over, but there's another important one going on. This is the election to the chair of Oxford Professor of Poetry, chosen by a vote of Oxford graduates and current academics. If you qualify, you must register to vote by noon on Friday June 4th. Best do it NOW!
A local council at Tweeddale banned a children's sports tournament that has taken place for 40 years,