What they're really doing with the limitations on political party funding

There is, as we all know, a move afoot to try and ban the spending of large sums of private money on the pursuit of politicas. Specfically, on the donation of large sums of money to a political party. We will then be forced to cough up for the poltroons through our tax bills rather than in a voluntary manner by our donations. This, in itself, is good enough reason to condemn the proposals.

But Don Boudreaux points out what makes it all very much worse. It isn't just about making, say, Labour less beholden to the unions. It's about creating a cartel:

If executives for profitable and established companies such as Apple and Wal-Mart persuaded Congress to cap the amounts that banks, venture capitalists, rich uncles, and other financiers may invest in private firms, including upstarts, this restriction would be widely seen as an anti-competitive and unjust scheme to stymie economic competition. New rivals would be disproportionately bridled in acquiring the means – money – to buy the inputs necessary for competing successfully against incumbent firms.

This is what is being proposed here in the UK. Instead of people deciding they might want to give some money to a politician or political party they'd like to support the money will be doled out from the State. One the basis of previous election support, obviously. Meaning that there's a very large barrier put in place against the rise of a new political party.

It is, quite simply, the creation of a cartel.

One other point that Boudreaux alludes to. Let's say your a staunch Labour guy and you're outraged by the way that the Big Business money flows to the Tories. The way to stop this is to change the incentives for Big Business. Strip the government, the State, of the ability to create rent seeking opportunities and no business would ever bother to buy a politician. For the politician wouldn't be able to create that super-profit for the business in return.

Or as I would put the solution. Don't stop people from buying politics, stop them from being interested in purchasing politics.

Making the US Govt shutdown seem worse than it is

It's always the same, any bureaucracy under attack will cut the most obvious, public and desired of its services when the budget is under attack. It's never the paper shufflers who are asked to cut back but the library hours that are reduced. Or the parks are closed rather than the diversity advisers getting it in the neck. So it is with this latest shutdown of the US Govt.

NATIONAL PARKS: National parks have been closed to new visitors, and park roads, concessions and other facilities are now being closed. Overnight visitors have been given two days to depart. This will mean a loss of 750,000 daily visitors and an economic loss to gateway communities of as much as $30 million for each day parks are shut, according to the non-profit National Parks Conservation Association.

That might all seem logical enough. The non-essential bits of the government are being closed down and while parks are nice they're not really essential. Except that's not what they actually mean by "concessions". This is what they do mean:

The US Forest Service, under pressure apparently from the White House, has reversed both its historical precedent as well as its position yesterday and will close over 1000 public parks and campgrounds that are operated by private companies without using one dime of public money. Why does the fact that our landlord the US Forest Service is going on an unpaid vacation mean that tenants of theirs have to close up shop too? We have no idea.

A concession is where a private company operates the park, the Forest Service being merely the landlord. And as you might expect, the money flows from the concessionaire to the Forest Service, not the other way around.

So, in order to make the government shutdown more painful to the populace the US Government is cutting its own revenue by insisting that private businesses which pay it rent must close down.

I can never remember whether we're supposed to flog bureaucrats before or after we hang them.

Bleeding heart libertarianism and British politics

I have a chapter in a new publication by Liberal Reform, the classical liberal movement within the Lib Dems, in which I make the case that non-libertarians and libertarians may find a surprising amount of common ground if they put their differences of opinion about wealth and income redistribution aside. (Unfortunately, you have to sign up to Liberal Reform's mailing list to read that piece. You use my email address to login instead: sam at adamsmith dot org)

Basically, the chapter is an attempt to sketch out a British political economy of Bleeding Heart Libertarianism, the movement that has sprung up around American philosophers like Matt Zwolinski. The main areas I identify are immigration reform, drugs legalization and 'modern mercantilism' (a broad term for corporate and middle-class welfare).

I do think there's a lot of common ground between libertarians and people on the left, but for a serious dialogue to work I propose that libertarians shift their focus from opposition to wealth and income redistribution to a single-minded focus on the regulatory apparatus of the state:

I suggest that libertarians concerned with the plight of the poor should abandon their opposition to wealth redistribution in practice and focus instead on the regulatory state, where we have a much greater degree of certainty about the harm caused. For libertarians who wonder if they are BHLs, the question might be: If libertarian institutions existed and serious, significant poverty persisted, would state action be justified in acting to relieve at least some of that suffering, if we had a pretty good reason for thinking that that action would work?

I think that it would, and if you have a serious commitment to welfare so should you. The only problem should be an empirical one, which I cannot say is strong enough to reject all wealth redistribution. While I am extremely confident about the benefits of liberalising planning to allow new homes to be constructed in the UK, I feel less confident about saying that all redistribution is harmful.

So I propose a compromise: a ‘libertarian welfarism’. This might see us reform tax credits and the welfare system into a combination of universal basic income and a ’negative income tax’ that acts as a top-up to people’s wages, adjusted to give a little more to people in low-income jobs and the unemployed. The details of this approach to income redistribution are not important for now: what matters is the idea of a simple, cash-based redistributive mechanism. I find myself very comfortable with this kind of redistribution; other libertarians will be less so. But perhaps they could accept it as the cost they have to pay to persuade others about the other, much more important, things they have to say.

I expect many people to find this kind of thinking quite outrageous, but to me the really strong arguments for libertarianism are based on our beliefs about ignorance and incentives, not justice, so they should only preclude redistribution of wealth as a matter of pragmatism. There's no intrinsic reason you can't combine those ideas with "left-wing" beliefs about what a good world looks like any less than they can be combined with "right-wing" beliefs about the kind of world we watnt. I don't know if libertarians will ever be able to have the same influence on the left that we've had on the right, but it's worth a try.

An open letter to the government on the Lobbying Bill

The government's Lobbying Bill is a serious threat to free speech and will curb the activities of think tanks, charities and other groups whose participation in political debate is vital for the political system to work openly. That's why we've co-signed the letter from other think tanks, below, urging the government to drop this bill.

We wish to highlight our grave concern about the Government’s Lobbying Bill, a piece of legislation that poses a significant threat to legitimate campaigning freedom of speech, political activism and informed public debate.

Part II of the bill threatens the ability of charities, research and campaigning organisations to inform the public debate, fulfil their missions and raise awareness of important issues. The current drafting would capture a huge number of organisations who would not presently be considered as relevant to electoral law and who do not receive any state funding. It also threatens to dramatically expand the range of activity regulated far beyond any common sense understanding of commercial lobbying.

We do not regard the Cabinet Office’s assurances as sufficient given the widespread legal doubts expressed from across the political spectrum. It cannot be a prudent approach to legislate on the basis of assurances that enforcement will not be to the full extent of the law. The exceptions offered are unclear and unconvincing.

The lack of clarity in the legislation further exacerbates its complexity, while granting a remarkably broad discretion to the Electoral Commission. The potential tidal wave of bureaucracy could cripple even well-established organisations, while forcing groups to reconsider activity if there is a perceived risk of falling foul of the law. This self-censorship is an inevitable consequence of the bill as it stands.

We urge the Government to reconsider its approach and to urgently address the fundamental failings in this legislation.

Yours Sincerely,

Mark Littlewood, Director General, Institute for Economic Affairs Simon Richards, Director, The Freedom Association Tim Knox, Director, Centre for Policy Studies Matthew Sinclair, Chief Executive, Taxpayers’ Alliance Jo Glanville, Director, English PEN Emma Carr, Deputy Director, Big Brother Watch Eamonn Butler, Director, Adam Smith Institute

The merits of ocean fertilisation

I've written here and elsewhere before about the potential merits of ocean fertilisation. Assume that climate change is a true problem (as I do) and that we'd like to do something about it (as I do). The question then becomes what should we do? And we know that there are certain areas of the ocean (quite a lot of them actually) where there is insufficient iron in the water to allow algae to grow. Add iron to these areas (as winds blowing Saharan dust sometimes do, as volcanoes sometimes do) and we get an algal bloom. This increases the supply of fish, which is nice, and some portion of those algae, when they die, fall to the ocean floor and end up as the next layer of chalk. We're thus extracting CO2 from the atmosphere and incorporating it into rock, this is true carbon sequestration.

We know all of this, we know all of this is true. The bit we don't know is quite how effective or efficient it is. Just not sure how much of that CO2 ends up in rock and how much just gets recycled around through the circle of life. Here's one claim from someone who has tried to perform the experiment:

estimates that its experiment absorbed 5 million metric tons of carbon dioxide.

That experiment costs $2.5 million to perform. We've thus the claim that sequestration of a tonne of CO2 costs 50 cents. Which is a pretty reasonable price when you think about it. Lord Stern told us that the social costs of one tonne of CO2 is $80. We're thus $79.50 better off for each tonne we turn into chalk in this manner.

Now it is true that others dispute these costs. But we've only had a couple of tests. This particular, not very well monitored, one and one other recently in the Southern Ocean. Given the claims being made here this would seem to be an obvious no brainer to test further. It's possibly extraordinarily cheap to do and it's certainly extraordinarily cheap to test it to see whether it is cheap. Compared to spending $100 billion on the bloody windmills at least.

So governments and scientists are rushing to perform those tests aren't they? We've matelots hurling iron powder over the bulwarks all over the place?

No, no we don't:

They wanted to see if the iron would cause a bloom of algae that could promote fish numbers and absorb the greenhouse gas carbon dioxide from the atmosphere. Instead, in March, they were raided by Canadian officials for illegal dumping at sea.

Eh?

Environment Canada, the nation's environment ministry, said the experiment was illegal under Canadian law and violated the U.N. Convention on Biological Diversity (CBD) and the London Convention, which governs dumping at sea. World leaders at a U.N. Earth Summit in Rio de Janeiro last year urged "utmost caution" in ocean fertilization due to worries that it could disrupt marine life. Many scientists remain skeptical about whether any form of geoengineering will solve climate change. Allowing research, they argue, may detract from efforts to reduce emissions from cars, power plants and factories.

You what?

The ETC Group, a Canada-based non-governmental organization opposed to geoengineering, said even research is risky. "The moment you accept that geoengineering is a Plan B it will become Plan A for some governments," executive director Pat Mooney said.

Shouldn't we try to find out whether Plan B is going to be better and cheaper than Plan A?

Criticism of HSRC included a statement of "grave concern" last November by the 87 nations in the London Convention, which regulates dumping at sea. "Ocean fertilization has the potential to have widespread, long-lasting and severe impacts on the marine environment, with implications for human health," it said.

Err, yes, that's what we're trying to find out. If it doesn't have large effects then it won't be worth doing. If it does then we've solved our largest environmental problem.

The draft report by the U.N. panel of scientists says ocean fertilization can have unknown effects. Added iron might create algae locally but rob nutrients, such as nitrogen and phosphorus, from other areas. Extra iron could also produce greenhouse gases such as methane in the sea and increase acid levels in the deep oceans as the waste decays.

So, err, shouldn't we do the experiments and find out?

But as you can see, that's not the way that many, including officialdom, are working. It's not just that it might not work out the way we'd like it to. It's that if it does work out as a cheap way to sequester CO2 then that in itself would be a bad thing. As would lots of cheap fish presumably.

I've long said that there is indeed a climate change conspiracy. But it isn't about its existence, not about the science at all. It's about what is the correct response to that science. There's a definite blocking off of the various technologies and policies that could in theory deal with the problem for us: we're not even allowed to do the research to find out whether it's actually necessary to stop using fossil fuels or not. Because it seems that it's already been decided that that is the only possible manner of dealing with the problem, the elimination of the use of fossil fuels. Even if that's not the best way to deal with the basic underlying problem.

And if I'm honest about it that makes me extremely angry. I don't know whether ocean fertilisation will work or not. I've had emails from researchers arguing both sides of it. But I'm incandescent with rage at the argument that we shouldn't go and find out the truth because said truth might be that it does indeed work.

Skwire's First Law

I would like to introduce you to Skwire's First Law:

Politicians are asshats.

We should note that there is no Skwire's Second Law.

In somewhat more detail:

And I want to talk about how Skwire’s law—though simply expressed—is not merely a sigh of exasperation, a political version of “boys will be boys.” It’s a manifesto condensed into three words.

Saying that politicians are asshats means that you acknowledge the deep truths of public choice theory. It means that even if the occasional politician supports a policy you like or gives a speech you admire, you know enough not to turn him or her into a hero. We can debate, as my friends and I have on Facebook, whether asshats become politicians or politicians become asshats. I don’t think that debate much matters, because I think both parts of it are true. Politics is a machine that turns good people and good ideas into bad ones, and turns bad people and bad ideas into worse ones.

Politics is a system that attracts not only people who want to help, but people who want to control. And once those people—good or bad, helpful or controlling—are in the system, they use it to further their ends. And that means that they will take money from people most of us wouldn’t shake hands with. And that means that they will tell us that they do not believe in spying on the American people or in a government that operates in secrecy, while they continue spying on the American people and locking up or hounding anyone who questions that secrecy. And that means they will tell us they want to help care for the helpless while they make it illegal for charities to feed the starving. And that means they will tell us they are deeply concerned about unemployment while they raise more and more barriers to entry-level jobs. And on and on.

None of this is accidental. None of this is a flaw in the system. This is how politics works. And this is why politicians are asshats.

This is clearly and obviously true in its entirety. However, we do have this problem that there are some things that must be done. There are even some things that must be done that must be done by government: they simply require the monopoly of force and legal pressure that government alone can provide. There are even some thing that it is highly desirable that government should do: the provision of certain public goods comes to mind, the intervention necessary to deal with certain externalities perhaps.

But the fact that governments are led by politicians, that politicians are asshats, means that we want government only to be doing those things that both must be done and can only be done by government. We'll get on with the rest of our lives, that vast majority and very extensive part of the rest of our lives, entirely free from the influence of asshats.

If you would be so kind that is.

It's been remarked that pre-1914 the only regular contact with the State the average Englishman had was with the local bobby and the postman. Sounds about the right sort of level really, although now that we know how to privatise the postman perhaps even that was too much.

Stupid, stupid, people

The question for today: are we actually ruled by fools?

Half a million households in flood-prone neighbourhoods will see annual insurance bills rise by up to one third, even after they have been subsidised by policyholders across the country. Ministers have reached a new deal with insurance firms they claim will protect hundreds of thousands of people whose homes are at risk of severe water damage, and who struggle to afford insurance on the open market. When the new scheme was first announced in June, householders were promised that there would be no increase in bills in general. But an analysis of the new plan, conducted by government officials and independent experts, has found that every home insurance policy holder in Britain faces increased bills.

Yes, it appears that we are ruled by fools.

There is no sensible argument that supports the idea that I, living one hundred metres above the flood plain, should subsidise the flood insurance of someone dim enough to live actually on the flood plain. Their tootsies are going to get wet every few years, mine are not. This is because they have decided to live where there is a risk of flooding and I have decided to live where there is not.

We want insurance costs to act as an incentive. Young drivers pay more in insurance that those mature in years like myself: those young drivers are more likely to have an accident and cost the insurers money. Convicted arsonists are quite likely charged more for their fire insurance: we want people at higher risk of flooding to pay higher premiums for flood insurance. Mainly to stop people being so damn stupid as to build houses where there is a high risk of flooding.

What is it about this extremely simple idea that seems to have beeen missed by those who claim the right to dispose of 50% of everything that the country collectively produces? And perhaps more to hte point why do we allow them to take 50% of everything when they're quite clearly off their collective rocker?

But this is the basic problem with government doing things

Philip Johnston has an interesting piece here. It's interesting both because it's perceptive and also almost willfully blind at the same time. Which is pretty good when the two are on precisely the same subject.

What do the following have in common: the poll tax, the Exchange Rate Mechanism, Individual Learning Accounts, the Assets Recovery Agency, the Child Support Agency, the NHS patient data system, ID cards, HS2 and Universal Credit? They were all policies to which ministers stubbornly stuck despite warnings that they would fail – until they did, whereupon they were either abandoned or salvaged only at vast cost to the taxpayer.

This is obviously true: and something all too rarely stated. That the problem usually isn't with the things that government tries to do it's with the things that government won't stop doing. So that's the perceptive part: but then there's the unperceptive part. Johnston goes on to wonder is this is something peculiar to the British political system. Or whether our political class is particularly blind to the warnings of experts (another name for which is poeple who actually know what they're doing). And the reason that that is unperceptive is that it's nothing at all specific to the British system.

It's a general failure of attempts to use politics to do things rather than markets. Just for the avoidance of doubt here I should point out that some things really do need to be done by politics. But the problem with doing so is that there is no kill switch.

It takes great effort to get government to do anything. And that great effort comes from the intertia of the system: meaning that it takes great effort to get something started and an equal amount of effort to get something stopped. This is in contrast to the market where yes, it takes great effort to get something working. But the system does contain that kill switch: bankruptcy. If something's not working then it doesn't take great effort to stop it. It just runs out of money and stops.

And that, I am afraid, is one of the reasons why politics is a bad way to get things done. Simply because they won't stop doing things even when it's obvious that they are the wrong things to be doing.

No taxation for representation

Yet another call for the political classes to tax us yet more in order to pay for the political classes:

And that makes the search for an alternative more plausible. Both Sir Hayden and, more recently, Sir Christopher Kelly, chairman of the committee on standards of public life, proposed additional taxpayer funding to make up the shortfall from a donations cap. Politicians ritually argue that the public will not like forking out for a system it does not trust. This now beginning to sound like an increasingly flimsy excuse – and a circular one. The present system actually fuels that distrust. Nor are the sums large: Sir Christopher proposed a £10,000 donations cap and an increased state contribution of £23m a year over five years – the cost of a first-class stamp for every taxpayer.

No, just no.

A political party is simply a private association of individuals banding together for mutual benefit. As such there is no call whatsoever for the taxpayer to fund them. The Conservative Party has no more claim on tax revenues than the Co-Operative does, Labour no more than Littlewoods. All four of those being private associations of individuals banding together for mutual assistance.

If the parties cannot raise the money they think they need (or more accurately, the cash they desire) from those who support them then they've no more right to everyone else's money than I do. Which leads to my proposed slogan: no taxation for representation.

Now, given that that's not actually going to go anywhere a more modest proposal. Let's really sell those titles, as we used to back when we did rule the world. And we've one beneift today as well: we can confer an hereditary peerage without that giving rise to the right to sit in the House of Lords. It would still be necessary to win an election (yes, I know, to foreigners this will sounds very strange but the only people who are actually elected to our upper house of the legislature are the hereditary peers) for such a creation to get there. So, offer each and every political party a settled number of titles to auction off. A couple of Earldoms, a handful of Viscountcies and a slew of Baronages. They cost absolutely nothing at all to make, can be sold for very good prices indeed and, as long as we make them all hereditaries, do not give the holder any power over the rest of us at all.

Why not? Lloyd George was a Liberal so this must indeed be a good and liberal policy, mustn't it?

Government in doing something sensible shocker

Sadly though it's not the government that we groan under the yoke of, but the Australian one that has just done something extremely sensible. You may or may not recall that a few weeks back various Oz MPs were getting very hot under the collar about why various tech products cost a lot more there than they do in other countries. They called in the execs and had at them and various fairly weak justifications were offered. Transport costs, small market, high costs of infratstucture and so on. No one quite had the chutzpah to point out that they were simply profit maximising businesses. They charged more in Australia because they could charge more there and that's simply it.

It does appear though that the MPs uderstood what they weren't directly told, for:

Acknowledging that companies have the right to decide the pricing of their own products, the committee made a number of recommendations to address the price of goods in Australia.

Ooooh! What?

It wants the import restrictions in the Copyright Act, 1968 removed and add a clause to allow consumers to circumvent geoblocking to ensure they're getting the best price. It also wants to teach Australian consumers how to get around geoblocking and provide more access to technologies that allow them to do so. Needless to say they will also need educating on how far Australian Consumer Law allows them to go on this.

• If companies do not agree to lift geoblocking, or to give consumers the tools they need to circumvent it, the committee recommended enacting a ban on geoblocking "as an option of last resort". It also recommends voiding any law which seeks to enforce geoblocking.

Blimey, can I emigrate? Politicians make recommendations, based upon the evidence and further, recommendations that will actually solve the problem?

For the companies charge higher prices because they can. Remove their ability to do so by removing the artificial restrictions upon consumers and they will no longer be able to charge those higher prices. Thus they won't.

Isn't this so joyfully different from our own dear Margaret, Lady Hodge, and her practice of offering soundbites without demonstrating any understanding of the basic underlying problem?