Left - Right / Open - Closed
James Kirkup over at the Telegraph has an article on how the Left-Right divide no longer seems to apply to the UK’s political parties. We should expect Left-wingers to be hostile to free markets and big business, he argues, and Right-wingers to embrace them. However, reality is far less clear-cut. UKIP is increasingly honing an anti-corporate edge, criticizing both the European Commission and the Labour party for being in bed with large, multinational firms with little regard for 'the national interest'. UKIP are simultaneously daubed ‘more Thatcherite than Thatcher ’ – and indeed, plays up to this when useful – yet considered left of the Conservatives by voters.
Kirkup also notes that whilst Labour, UKIP and parts of the Conservative leadership are busy immigrant-bashing, a ‘curious band of political actors’ are fighting the immigrant’s corner, including ‘nasty party’ London Mayor BoJo, the ‘old lefty’ Vince Cable, and (apparently, shock horror!) the ASI.
Libertarians have long claimed that the Left/Right distinction is largely redundant, arguing that the Nolan chart – which plots support for economic & political freedom across two axis – yields far clearer understanding of political ideology. Today, variations of such political quizzes and graphs abound, including the somewhat absurdist 5-axis offering.
Kirkup's analysis is simpler; that politics is no longer about Left or Right, but whether we should be an open or closed nation.
This certainly makes some sense in the current political climate. UKIP isn’t really left or right, but ‘closed’ – looking inwards for a sense of ‘Britishness’ and for British values we may or may not have ever possesed. The distinction can be broken down further, with individual policies analyzed the same way. Conservatives are, for example, typically open to business, but closed to immigration. You could widen the definition of ‘open’ and ‘closed’ out, too – for example, the Lib Dems are open to the issue of prison and drug law reform, whereas the Tories are far more closed. They're open to things like NHS and schools reform, though – whilst Labour tend to be closed to such possibilities.
It might then be a useful strategy not to consider whether a party is Left or Right wing, but whether individual policies are broadly open or closed. Disregarding the left/right stigma could help individuals focus upon what it is they actually care about. Clearly, this dichotomy doesn’t work for everything – monetary policy, for example, or attitudes towards the EU – although you could argue that openness generally correlates with a preference for smaller government.
Certainly, openness is a defining characteristic of the ASI. We favour openness in terms of international trade, the movement of people, competition, experimentation in the public sector, and social attitudes.
In this context, open policies reflect the freedom of individuals to make their own choices without unnecessary restriction. They encourage new ideas and welcome change. In contrast, closed policies seek to restrict potentially disruptive activity and unwanted influence, in an attempt to maintain some status quo or protect particular interests. This tendency cuts right across the political spectrum, but, as a think tank, is one that we endeavour to avoid.
One reason why we get bad policies
If the What Works Centre for Local Economic Growth didn’t exist someone would have to invent it. It analyses policies to see which are the most effective in supporting and increasing local economic growth. Although its focus is local, most of its findings have national implications. So far, the centre has looked at a number of policy areas. A theme cutting across all of its findings is that to a large extent we don’t really know what works. Too often, the evidence is inconclusive or lacking.
- We found very few studies that look at the impact of schemes on both access to finance (direct effect of the scheme) and on the subsequent performance of firms (indirect effects of the scheme).
- While most programmes appear to improve access to finance, there is much weaker evidence that this leads to improved firm performance. This makes it much harder to assess whether access to finance interventions really improve the wider economic outcomes (e.g. productivity, employment) that policymakers care about.
- As with other reviews, we found very few studies that gathered (or had access to) information on scheme costs. As a result, we have very little evidence on the value for money of different interventions.
On business advice:
- There is insufficient evidence to establish the effectiveness of sector specific programmes compared to more general programmes.
- We found no high quality impact evaluations that explicitly look at the outcomes for female-headed or BME businesses.
- We found two high-quality evaluations of programmes aimed at incubating start-ups. Both programmes were targeted at unemployed people and show mixed results overall. However, there is a lack of impact evaluation for Dragons’ Den-type accelerator programmes that aim to launch high-growth businesses and involve competitive entry.
- We have found little evidence which provides robust, consistent insight into the relative value for money of different approaches. Most assessments of ‘cost per outcome’ fail to provide a control group for comparison.
- We found no evidence that would suggest local delivery is more or less effective than national delivery.
As the above suggests, on key areas of government policy we lack evidence of what works, particularly when it comes to determining value for money. Given the billions spent on various schemes this simply isn't good enough.
The way to move forward from this is to work backwards, ensuring that a robust framework of analysis is build into each and every government programme so that we can know how successful (or otherwise) each intervention is. Crucially this should be done in a way that lets it be compared by the same metrics also being measured in other schemes trying to achieve similar outcomes.
Residing in the economic departments of our universities are the brains to do exactly this – to date though, policymakers have lacked the gumption to systematically experiment, measure and evaluate what works. Until they do we will just keep getting ad hoc policies with enough Rumsfeldian known unknowns to make an economist cry.
Philip Salter is director of The Entrepreneurs Network.
Osborne scraps the worst tax in Britain – the ASI's reaction to the Autumn Statement
Here are our comments on today's Autumn Statement: Stamp duty:
Head of Research at the Adam Smith Institute, Ben Southwood, said:
The old stamp duty slab system was one of the worst taxes Britain had, and we welcome the Chancellor's radicalism in abolishing it, rather than simply tinkering around the edges.
According to the best economic research, raising £1 through stamp duty imposes £2-£5 of cost on the economy. Though it will still, as a transactions tax, cost the economy heavily, the reform will reduce the economic cost substantially. This is a tax cut for the squeezed middle that will make a big difference to a lot of people's lives. Politically, it could be a game-changer.
Business rates:
Deputy Director of the Adam Smith Institute, Sam Bowman, said:
A cap on business rate rises is welcome but the rates system itself needs more fundamental reform. The longer rates take to be revalued, the more distortionary the system is, penalising firms located in areas that have done badly since the last valuation. The longer the gap between rates revaluations, the greater the penalty for businesses in poorer areas and the effective subsidy for businesses in richer ones. Ideally the government should move towards a system of constantly rolling rates revaluations. If Zoopla can judge land values accurately on a rolling basis, so can HM Treasury.
Road infrastructure:
Head of Research at the Adam Smith Institute, Ben Southwood, said:
Infrastructure investment, especially into congested roads, is bound to pass a cost-benefit analysis. The problem is that we had to wait this long. If private firms could build roads, funded by tolls, then we'd likely have all of these roads already. As well as providing funds for investment, and making sure the investment goes to the most in-demand areas, pricing roads also means they get used more efficiently.
Pensions: 55% tax, tax-free inherited ISA
Director of the Adam Smith Institute, Dr Eamonn Butler, said:
The Chancellor is right to kill off the iniquitous 55% tax on inherited pensions, as well as the tax on inherited ISAs. If people have saved for their retirement but die before exhausting their nest-egg, it should go straight to their dependents, not to the Chancellor.
NHS Spending:
Communications Manager at the Adam Smith Institute, Kate Andrews, said:
The Conservatives, along with the opposition parties, are playing politics with the NHS budget. Everyone is vying to be seen as the 'party of the NHS' but no one is willing to have a serious conversation about the reforms that could make the NHS financially viable for the next ten years, let alone for future generations; like charging small fees for non-emergency visits.
It's been estimated that the NHS could fall into a budget crisis as early as 2015, which could result in cuts to core staff, longer patient waiting lists, and a deterioration in the quality of health care. While the extra £2 billion per year proposed by Osborne today will offsets short-term worries, it merely kicks the can down the road for a little while longer. Serious proposals to address the spending and demand that comes with free care ‘at the point of use’ could not come soon enough.
Personal Allowance rise:
Deputy Director of the Adam Smith Institute, Sam Bowman, said:
The Adam Smith Institute has called for the personal allowance to be raised to the full-time minimum wage rate for over a decade and it is welcome to see the government move in this direction. But the National Insurance Contributions threshold has been left untouched, which costs full-time minimum wage workers £667.68 a year. To really help low-income workers the Chancellor should make raising the National Insurance threshold one of his top priorities.
Capital gains tax on property for foreigners:
Head of Research at the Adam Smith Institute, Ben Southwood, said:
Capital gains taxes are some of the worst ones on the statute book, making society poorer by reducing the efficiency of investment and its total amount, but if we have to have them then everyone should pay them.
This is not just because of fairness, but because it causes massive distortions when different groups face different tax rates. In this case it's likely to both lead to excessive foreign ownership of property—both by favouring foreigners over natives in property taxes and by favouring property over other assets for foreigners.
Masters degree loans:
Director of The Entrepreneurs Network, Philip Salter, said:
By extending Entrepreneurs’ Relief and R&D tax credits George Osborne is backing Britain’s entrepreneurs. However, the government’s intervention in the postgraduate student loan market risks crowding out private sector solutions. Banks already provide Professional and Career Development Loans, and entrepreneurial companies like Future Finance, StudentFunder and Prodigy Finance are responding to the demand for loans for postgraduate studies. We are on the verge of the equivalent of the funding revolution we are seeing in SME finance but this intervention risks stymieing it.
The deficit:
Deputy Director of the Adam Smith Institute, Sam Bowman, said:
The deficit is still enormous and much higher than anybody expected at the beginning of this Parliament. We are borrowing £100bn this year, both because planned cuts to the welfare budget have not taken place and because the growth we have had has not translated into much extra tax revenue. But as high as this is, the Chancellor’s plans to reduce the deficit still seem credible – financial markets are lending to the country at unprecedentedly cheap levels and once productivity eventually does start to recover, things should begin to look considerably better.
Notes to editors:
For further comments or to arrange an interview, contact Kate Andrews, Communications Manager, at kate@old.adamsmith.org / 07584 778207.
The Adam Smith Institute is an independent libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.
This is a bit of cheek from Tessa Jowell, isn't it?
One of the reasons that we around here aren't in politics is simply because we've not got the cheek to be a politician. This doesn't seem to be true of Tessa Jowell (who, we might recall, resigned from her family to spend more time in politics) as she shows here:
Now Labour MP Tessa Jowell is launching a campaign to cap excessive charges on money transfers, saying remittance companies have become “the international Wonga”, referring to companies that charge exorbitant interest rates on short-term loans. She says the “transfer tax” can add £20 to a payment of £100, especially in the case of money sent to sub-Saharan Africa. Fees to countries in Asia and Latin America are also high.“Many people who are trying to support friends and family abroad are being ripped off. Instead of their hard-earned money going towards medical bills, books or to cover the cost of failing crops, huge amounts are being creamed off by the giant money transfer companies who have cornered the market,” said Jowell, who will launch a campaign to “Stop the Transfer Tax Rip-Off” in Brixton on Sunday.
We're almost rapturous in our applause for the effrontery of this. Tessa Jowell has been in Parliament since 1992. She has held ministerial office in a government that increased the costs to such money transfer firms by tightening up all of the money laundering and know your customer rules. Now that she's leaving Parliament she's setting herself up to run a campaign to undo the evil effects of those very laws she voted for while in Parliament.
It's quite a cheek really, isn't it? Earn your pension crust by campaigning against the things you did while still employed by the electorate?
No, no, we here at the ASI do think ourselves quite brazen, have no illusions about our own chutzpah, but we really cannot rise to this sort of level. Which is, as above, why we're not politicians. Just can't do it.
The winds of political change
UK by-elections (like last week's in Rochester and Strood, where the UK Independence Party gained its second MP) have always been an opportunity for electors to vent their contempt for the national politicians, before things return to normality at the general election. By-elections generally do not matter; general elections do. So voters' actions are perfectly rational. But few people, even the pollsters, are predicting that things will return to normal at the general election in May 2015. Though Scotland did not vote 'Yes' to independence in its recent referendum campaign, the performance of Labour, the main 'No' campaigners, was humiliatingly poor. But the Scottish National Party is now piling on support. It now has 90,000 members – roughly half the number that the Conservative and Labour parties are able to achieve, even though their UK-wide base is twelve times larger than Scotland alone. Again, the SNP has often done well in by-elections, but never managed to break through in UK national elections. But now there is a real feeling that normality will not return this time, and that the SNP will steal anything up to 40 Westminster seats from Labour.
The Liberal Democrats, the Conservatives' coalition partners in government, are meanwhile being humiliated just about everywhere. In the Rochester and Strood by-election, they lost their deposit for the eleventh time running, polling just a few hundred votes. Their core supporters think they have sold out to the Conservatives, while voters who want to send a rude message to Westminster have thought UKIP a much better way to do that. In the past they voted for the LibDems, but now the LibDems are part of the Westminster establishment that they despise.
The main parties, then, find themselves no longer leading the agenda; what will decide the election is how these minor parties fare in May 2015. But this phenomenon is not unique to Britain. All over Europe, minority parties are shaking the political class and winning footholds in the legislature.
What is going on, and why? Perhaps we have to look outside the political process to understand. In commerce, for example, traditional business models have been fundamentally disrupted by the internet. Retailing in particular has been rocked by new suppliers, new ways of shopping and new delivery systems. With things like Amazon Click & Collect, why do we need a Royal Mail – even a private one, as it is now. And much the same is happening in politics too. Small communities can find each other, and organise and mobilise, and cause real problems for the traditional parties.
Given today's technology, there is no reason for people to settle for off-the-peg goods and services. They can be made to your specification, and shipped direct to your door. Barriers to entry have been swept away, as new suppliers with new ideas and not much more than a website can suddenly enter the market and challenge the incumbents.
It is the same in politics. When people have a choice of umpteen different TV or phone or utility packages, they become increasingly contemptuous of national and local government 'take it or leave it' services. When Air B&B or Über enables people to access services in an instant, they wonder why they have to fill in forms and queue up in council offices. What is the point of a Met Office when you can get the weather on your phone from countless other providers?
And national parties find it harder to dominate the national debate, as newspaper sales have been falling, because more and more people get their news from online channels – and not necessarily from the traditional media companies, but from a huge number of new media channels, plus (increasingly) social media and other sources. Activist groups can find each other and mobilise. The domination of traditional media and traditional parties is being eroded by people power.
Through internet and communications technology, we can also bypass government services more easily. Telephones were a nationalised industry thirty years ago, but nobody even thinks about re-nationalising them today. And given the new multiplicity of information and entertainment channels, more and more people are asking why we really need the BBC – that one-time flagship of the British establishment – as a state broadcaster.
The internet also makes it easier to find a private doctor or a private tutor, or indeed to find a job and an apartment. Self-help groups provide help to patients or parents that the lumbering government systems simply cannot provide. Who needs government?
Not many of us, any more. Nearly as many people in the UK (176,632) told the census that their religion was Jedi than there are currently members of the Conservative Party. With falling memberships, party candidates are becoming increasingly irrelevant to most people. They are chosen by a dwindling core of of grey-haired Conservative activists or hard-line-socialist Labour ones, with outdated, intolerant or patronising policies to match.
The politicians' response has not been to understand these new trends (their attempted use of social media is, as we have seen recently, usually disastrous) but to insulate themselves. Politics is no longer something that successful people in other fields did for a few years as a service to their country, but a full-time career, carefully preserved as such.
No wonder people are upsetting their applecart. And no wonder that they cannot understand why.
The point about visa systems is that they are reciprocal
We don't do party political partisanship around here so allow us to tip toe very gently through this latest proposal from the Labour Party over visas, tourist taxes and waivers. There's a significant problem with what is being suggested: the end result will be a tax on British people who decide to go to other countries. The proposal is the following:
Labour will seek to beef up its pitch to voters on immigration with a pledge to pay for 1,000 extra border guards by imposing a charge on visitors from the US and 55 other countries.
Yvette Cooper, shadow home secretary, will criticise other parties for engaging in an “arms race of rhetoric” on the issue, which has been thrust to the centre of political debate by the rise of Ukip.
But she will accept that the opposition “needs to talk more” about public concerns and will say action to restore public confidence that illegal entrants are being caught and dealt with is “vital for a progressive approach”.
Under the proposals, nationals in countries enjoying a “visa waiver” system of fast-track permission to enter the UK will be hit with a charge of around £10 per visit, which the party said would more than cover the £45m cost of the additional staff.
Leave aside what the Tories say about it (roughly speaking, "Yah! Boo! Sucks!" as far as we can see) and leave aside the silliness of such hypothecating of taxes (the amount that we should or desire to spend on one particular thing has absolutely nothing at all, whatsoever, to do with how much we can raise in taxation from either that or any other specific thing. All taxation should be flowing into one pot to be distributed. Think, for a moment, if such a visa tax reduced the number of people arriving legally. Would that reduce our need for more immigration officers to deal with people arriving illegally? Not obviously, but under a hypothecated tax system it would reduce the budget for them).
And consider simply the fact that all visa arrangements are reciprocal. If we demand a visa from the citizens of Dystopia then Dystopia will demand visas from Brits. If we offer a visa waiver scheme for visitors from Utopia then Utopia will offer a visa waiver scheme for Brits going there (Utopia, obviously, being that mythical place where the NHS works).
If we impose a charge on people from 55 countries for a visa waiver then those 55 countries will impose a charge on Brits going to those 55 places. And one more thing: we think we're right in stating that more Brits go to other places than people from other places come to Britain.
So, the net effect will be a transfer of money from Brits to foreign governments. As more of us will be paying to go to 55 countries than citizens of those 55 countries will be paying to come here.
Making foreign governments richer is a very odd indeed method of increasing revenues to pay for services in the UK.
As at the top there this isn't party political partisanship. It is instead a call for all politicians to understand Chesterton's Fence. If you see a fence somewhere you shouldn't pull it down until you've worked out why someone built it in the first place. Only when you've understood the original reasons, then ensured that they no longer apply, should you proceed with destruction.
Why do we have visa waiver schemes with no charges? Because visa systems are always reciprocal. We charge them and they will charge us, not obviously to our benefit.
This isn't about the Labour Party this is about a politician not bothering to think.
Banning Blanc from Britain stifles free speech
Sky sources have learned the so-called pick-up artist Julien Blanc will not be allowed to enter the UK.
The decision to deny Julien Blanc's entrance into the UK has set the precedent that freedoms of speech and expression can be criminalised, if and when enough people sign a petition.
Blanc's comments are socially reprehensible and offensive to both men and women, but if we do not respect the rights of the offensive, we start risking the safety of any minority viewpoint.
Those upset by Blanc's remarks have the opportunity to push back in cultural and social spheres; they do not need to call on the government to ban things they find socially disturbing. Private event businesses can take after EventBrite and deny him platforms, people can boycott his events, and viewers can turn their televisions off when he is on-air voicing his opinions.
The market has ways of listening to the moral needs of its customers, and while it is not a perfect system, it can serve to bankrupt those who are morally reprehensible without criminalising them for non-criminal behaviour.
Surely, we must recognise that there is a fundamental difference between the private sphere taking away one man's platform to be noticed, and the state taking away every person's platform to speak freely without threat of punishment or criminalisation.
This ruling should not just be a wake-up call to public hysteria, but also a reminder of how flawed the UK immigration system is. The Home Office can legally deny anyone entrance to the country if their character or opinions are not deemed conducive to the ‘public good'.
This is Big Brother at its worst - 'protecting' the people from speech criminals, who are a danger to the moral good; let any who speak out be at the mercy of mob rule, and the Home Office.
Mazzucato versus Worstall and Westlake
Marianna Mazzucato’s 2013 The Entrepreneurial State is the most influential book on innovation. Although Mazzucato’s arguments in the book and beyond are many and varied – for example, I’m particularly sympathetic to her scepticism of the uncritical financial support for small businesses – the arguments gaining the most traction are the least convincing and potentially most damaging. In short, Mazzucato’s thesis is that the state has been the key driver of “innovation” and should therefore take a more active role than they currently do. Central to this, is the policy suggestion that government agencies that fund this innovation should take a cut of the profits from the inventions. Two writers have convincingly unpicked this – the Adam Smith Institute's Tim Worstall and Nesta’s Stian Westlake.
First, on the point about states driving innovation, Worstall cites William Baumol, who makes the crucial distinction between innovation and inventions. In reference to Mazzucato’s observation that the key technologies that went into making the iPhone were state funded Worstall explains: “Baumol's point is that the private sector could have come up with these technologies, even though it was the state that did. But only the private, or market, sector could have come up with the iPhone.”
To put it another way, the iPhone is more than the sum of its parts. In an excellent article (worth reading in full), Westlake cites the work of Jonathan Haskel, which “suggests that for every £1 that British businesses spend on R&D, they spend £8 on other intangible investments of the sort that Apple used to make the iPod a success: design, new business models, marketing and software development.”
But perhaps Mazzucato’s biggest mistake is one of policy. As Westlake explains elsewhere, in The Entrepreneurial State Mazzucato suggests that “the state should find ways to share directly in the profits of companies that benefit from government innovation spending. A repayment system needs to 'reward [the government for] the wins when they happen so that the returns can cover the losses from the inevitable failures.'”
Westlake outline three convincing reasons why this wouldn’t work: “it would be nightmarish to administer; it imposes costs on exactly the wrong businesses, creating both a presentational and a practical problem; and it’s worse than an already existing option – funding innovation from general taxation.” Westlake's last point cuts to heart of the problem. As Worstall has pointed out in a response to Mazzucato’s response to his criticism of her work:
That governments sometimes produce public goods should not be a surprise. That’s what governments are for in fact. To provide collectively those things that cannot be provided through voluntary cooperation. To then complain that government doesn’t get extra rewards for doing the very thing we institute it for seems most odd. That’s why we pay our taxes in the first place: in order to get those public goods. Why should there then be some extra appropriation when all government is doing is what we asked it to and paid for it to do in the first place?
Philip Salter is director of The Entrepreneurs Network.
The deep web, drug deals and distributed markets.
On Thursday a conglomeration of law enforcement agencies including the FBI, Homeland Security and Europol seized the deep web drug marketplace Silk Road 2.0, just over a year after the takedown of the original Silk Road site. San Franciscan Blake Benthall was arrested as site's alleged operator (under the alias ‘Defcon’), and charged with narcotics trafficking as well as conspiracy charges related to money laundering, computer hacking, and trafficking fraudulent documents. The authorities allege that Silk Road 2.0 had sales of $8million each month, around 150,000 active users, and had facilitated the distribution of hundreds of kilos of illegal drugs across the globe. The bust formed part of ‘Operation Onymous’, a ‘scorched-earth purge of the internet underground’ which led to the arrest of 17 people, the seizure of 414 hidden ‘.onion’ domains, and the shutdown of a number of other deep web markets. Law enforcement unsurprisingly refuse to reveal how they managed such a raid, leaving to some worry that they have been able to bypass the protections of the anonymizing software Tor, which is used to access deep web sites and to obscure users' identities and location.
Despite the success of Operation Onymous, many deep web markets remain online. Activists liken the shutdown of hidden marketplaces to a hydra: every time a site is taken down others spring up in their place, and thrive from the media publicity of busts. Indeed, the number of drug listings on hidden marketplaces has grown significantly following the takedown of the original Silk Road. Regardless, law enforcement is determined to stamp out the sites, with a representative from Europol warning “we’re a well-oiled machine. It won’t be risk-free to run services [like these] anymore’.
But what if there was no-one responsible for running such services? Sites like the Silk Roads met their demise because they have a centralized point of failure — get to the server and you can seize the site. Allegedly, cryptographic chunks of Silk Road 2.0’s source code had been pre-emptively distributed to 500 locations across the globe, to enable the site’s relaunch in the case of a takedown. Given the far-reaching impact of Operation Onymous, whether this happens or not remains to be seen.
To be truly immune to government takedown, a marketplace would have to have a decentralized, distributed structure, much like torrent networks and the bitcoin protocol. Enter OpenBazaar, which uses peer-to-peer technology to bring 'secure, decentralized markets to the masses.' In running the OpenBazaar program, each computer becomes a node in a distributed network where users can communicate directly with one another. A reputation system will allow even pseudonymous users to build up trust in their identity, and naturally, all transactions are done in bitcoin.
The biggest issues plaguing hidden marketplaces are those of trust and enforcement; if goods or payment fail to materialize, you can hardly just contact the authorities. Some sites get around this problem by offering an escrow service, with the money being centrally held until a buyer confirms their goods have arrived. The problem with this approach is that it leaves customer's money vulnerable to scams, hacks, and state seizure. With a decentralized system like OpenBazaar, no such central escrow system is possible. Instead, buyer and seller nominate a third party 'arbiter' (who could be another buyer, seller, or a professional arbiter for the site) to preside over the transaction. Payment is initially sent to a multi-signature bitcoin wallet, jointly controlled by the buyer, seller and arbiter. Funds can only be released from this account to the seller when 2 of the 3 signatories agree to it, allowing the arbiter to adjudicate any dispute.
In such a distributed system, there’s no central body to authorize posts and transactions. There’s also no central server to target. Law enforcement would have to go after all buyers, sellers and computers running the OpenBazaar software to bring the system down.
OpenBazaar is still in beta mode, with a full release expected in early 2015. Teething problems are likely and the design could prove problematic; even within highly decentralized systems there’s a tendency towards the concentration of power, and whilst robust, decentralized networks are often inefficient and expensive to maintain. There's no doubt the authorities are watching, though, and it will be interesting to see their reaction should OpenBazaar succeed.
The software is a re-work of the edgier DarkMarket concept developed at a Toronto hackathon earlier this year, and its developers are keen to highlight its use for selling things like outlawed books and unpasteurized milk over drugs and guns. Certainly, there's value in any global bitcoin marketplace which avoids punitive exchange rates and transfer fees, and like the Lex Mercatoria, can be relied on to provide a level of transactional security when state institutions can not. However, whatever its legitimate uses no state will be comfortable with the idea of a censorship-proof site. The problem for them is that they might just have to get used to it.
A blagger's guide to the US midterm elections
Tomorrow's midterm federal elections in the United States will determine the political landscape of President Obama's final two years in office, and even though he's not up for re-election, his policies 'are on the ballot'. Here’s a quick breakdown of the game-changing races, the political mood across the swing states, and what to look for on Tuesday night.
Currently
As President Barack Obama resides over the White House, the legislative branch is operated by a divided Congress, with the Republicans in control of the House of Representatives (233/199 with John Boehner as Majority Leader) and the Democrats in control of the Senate (55/45 with Harry Reid as Majority Leader).
On Tuesday
The House of Representatives will remain firmly controlled by the Republican Party, whose historic sweep to victory in 2010 took 63 seats away from the Democratic Party. Even if the Democrats managed to win all 26 swing-elections this year, enough seats securely lean GOP to give the Republicans a comfortable majority (218+ seats).
It also appears the GOP will retain the majority of Governorships, though a few key races–like Governor Scott Walker’s (R) highly contested race in Wisconsin–threaten to throw GOP darlings out of office, who otherwise would be strong presidential candidates in 2016.
The real toss-up tomorrow will be which party controls the Senate for the next two years. And looking at the polls, it’s the Republican’s election to lose.
The Breakdown
Republicans have to gain 6 seats in the Senate to have a clear majority - if they take 5 and leave the Senate 50 / 50, Vice President Joe Biden gets the tie-breaking vote, meaning Democrats would retain control of the Senate regardless of any other race won.
Currently, the GOP is set to pick up three ‘easy’ seats in West Virginia, South Dakota and Montana: traditionally red states on the state and national level; not to mention areas where President Barack Obama lost badly in 2012.
That leaves the GOP in need of three more wins in the swing states, of which there are roughly 7 or 8, depending on your source: Alaska, Colorado (leans GOP), Georgia, Iowa, Kansas, Louisiana, New Hampshire, North Carolina.
The Republican advantage
The GOP has small, built-in advantages to any mid-term election, though this year is looking even better for the party than usual. Unlike the House, where each elected representative is up for re-election every two years, Senate seats are elected every six years on a rotating basis. This year, it just so happens that more Democrat-held seats are up for re-election, and they’re up for election in areas that aren’t considered ‘safe seats’ or ‘strongholds’.
It’s also the case that significantly less people show up at the voting polls for mid-term elections than for presidential elections (roughly 37.8% in 2010, compared 56.8% and 53.6% in 2008 and 2012); and those who do show up tend to lean Republican.
Interesting race to note: Kansas and 'The Establishment'
“Why Kansas Senate race could decide everything” –No pressure, but the traditionally red state that should be a safe seat for GOP candidates has been upset by Democrat-mascarading-as-Independent Greg Orman, who is running against establishment GOP candidate Pat Roberts.
Orman is, for all intensive purposes, a left-wing candidate (left-wing enough for Kansas Democrats, at least, who pulled their candidate off the ballot to give Orman a better shot at the seat). He’s shown commitment to Obamacare and campaign finance reform, and hasn’t ruled out caucusing with Reid and the Democrats, even as an Independent, to give them the 51-majority-mark to retain control of the Senate.
But as opposed as Kansas voters are to Orman's policies, they're potentially more offended by Robert's status as a 'Washington insider'. This rebellion is not just a trend in Kansas, but rising up across the entire country, as the majority of Americans now claim they don't trust the Federal Government. The Tea Party movement capitalised on this sentiment in 2010, and even 2012, but has done little to convince Kansas voters that Roberts isn't part of the structural problem.
Interesting race to note: Colorado and the 'War on Women(?)'
Colorado’s Senate race between Cory Gardner (R) and Mark Udall (D) was thought to be a swing race until very recently, when polls started indicating that the race was leaning red.
Traditionally a semi-swing state, with strong recent ties to the Democratic Party (Colorado voted for President Obama in 2008 and 2012), all signs indicate that it is not necessary the Democratic Party’s platform, but rather their political tactics, that have put left-leaning voters into the opposition’s camp.
Mark Udall (nicknamed Mark Uterus by journalists) used and abused the ‘war on women’ rhetoric to the point where it has become a joke, not just in Colorado, but throughout the entire country.
And unlike 2010/2012 elections, when it was politically popular and beneficial to use the phrase, Colorado Democrats are watching it backfire, as the gender-voting gap (for women, not for men) shrinks between Gardner and Udall.
It’s important to note the tide isn’t simply turning because of Democrat error. The GOP has finally gotten some sense on the issue, and Gardener has been campaigning to make birth control over-the-counter, non-prescription drug. A politically smart tactic on multiple levels: not only does it relieve fear that he is an anti-reproductive rights candidate, but making birth control over-the-counter is a step past what Democrats can offer women; Obamacare relies on birth control being provided via insurance policies.
If Udall loses tomorrow night, the Democrats would be unwise to see it as any kind of fluke. The ‘war on women’ has always been based on inaccuracies and lacked substance or evidence, and may not continue to sway voters as it once did.
Why is the Senate a game-changer?
Who controls the Senate for the next two years will not only have a deep impact on the end of Obama's presidency, also on the 2016 elections, when several prominent Senators will be looking to claim both the Democrat and GOP nomination.
Over the past four years, Harry Reid's policy of obstruction has stopped major legislation from being voted on in the Senate, protecting Democrats and the President from having to state their opinions publicly (by casting their vote or being put in the situation to veto legislation). If Republicans take control of the Senate, new Majority Leader Mitch McConnell (R) will most certainly hold the Senate to votes on legislation from the House; come 2016, ambitious Senators will be running on their voting records, not just their political promises.
Early signs on Tuesday night
If North Carolina and New Hampshire, which are thought to be leaning ever-so-slightly blue, come out early for the GOP candidates, we are probably looking at a sweep across the board, with a strong majority of GOP reps taking the Senate.
Likewise, if Montana, South Dakota, and West Virginia–all leaning red–turn out to be tight races with close vote counts, the GOP could be looking at a long night of close races and very possibly a crushing defeat.
If neither scenario plays out, anything goes. There's no doubt that the GOP will be taking seats away from Democrats on Tuesday night–but if they fall short of 6, even by 1, it's at least two more years Harry Reid and political gridlock, Not to mention an even tougher hill to climb come next fall. As if Capitol Hill weren't elevated enough.