As we've been saying, there isn't really a gender pay gap
But there is a motherhood pay gap. Interesting research:
Studies from countries with laws against discrimination on the basis of sexual orientation suggest that gay and lesbian employees report more incidents of harassment and are more likely to report experiencing unfair treatment in the labor market than are heterosexual employees. Gay men are found to earn less than comparably skilled and experienced heterosexual men. For lesbians, the patterns are ambiguous: in some countries they have been found to earn less than their heterosexual counterparts, while in others they earn the same or more.
The results for the UK are that gay men earn less than hetero, lesbians more than hetero women. In fact, lesbians earn around what men do and gay men earn around what hetero women do.
We could, as this report does, speculate about societal standards, the idea that lesbian women have, in some manner, "male traits" which lead to that higher pay.
A much simpler observation of the evidence would be the influence of children. We know that fathers earn more than non-fathers among hetero men (yes, even after adjusting for age and education etc). Also that mothers earn less than non-mothers. Gay men tend not to be fathers (this is not being categorical of course, "tend") as lesbians tend not to be mothers.
If the so-called gender pay gap were simply the influence of children upon earning patterns, as we largely think it is, then we would expect to see what we do see when looking at the earnings of non-hetero society. This does not prove we are correct of course, but it is supportive of our view.
‘Radical’ policy, electoral cycles, protests and term-length
Implementing ‘radical’ policy carries risks. Abolishing marriage law, scrapping the minimum wage or converting a central banking system into one of free banking carries the inherent risk of ‘shocking’ the population, to put it mildly. There are remedial measures that can be taken but rigid electoral conventions and the length of governments’ terms makes their implementation more difficult. For example, suddenly abolishing the minimum wage would likely cause immediate harm to those on it (or being paid close to it) if it were done in an improper, ‘shocking’ manner – and that’s not even considering the long-term sociological impact of the resulting aversion to ‘free market’ ideas involving ‘liberalisation’ and ‘deregulation’. Putting aside the long-term individual, communal and intergenerational psychological impact of poorly managed liberalisation policies, the immediate harm is mainly caused by the fact that the affected individuals have little time to prepare for it and, therefore, any immediate harm can be mitigated if policy is announced well in advance.
On the 9th December 2010, the House of Commons voted to raise the tuition fees cap. By then, so many students had already applied to university and were due to start in 2011 (though, admittedly, the tuition fee rise would not be effective until 2012) and the students from the year below who had made plans based on previous estimates would feel the brunt of this. One and a half years is hardly enough for those students and their families to make suitable provisions for a 3 or 4-year, full-time course at Uni (which has increasingly become the preserve of the middle-class).
Furthermore, the sense of an impending tuition fee rise no doubt exacerbated the sentiments necessary for a strike. If, instead, they announced their plans at the start of the term but delayed actual implementation until mid-way or late into the term, any protests may actually be smaller since people would have had a longer time to lobby/reason with the government and, indeed, for the policy’s advocates to reason with and persuade the people.
Thus, when planning to implement such policy, an adequately advanced announcement ensures that those affected have time to make provisions and, therefore, significantly diminish any potential, immediate harm caused upon implementation.
The problem, however, is the phenomenon of behavioural changes during electoral cycles; politicians and governments behave differently before and after elections (think promises before and actions after elections as well as populist policies in the run-up to elections) – they want to win elections and, sometimes, expectations-stability when implementing radical policy is sacrificed.
One possible policy suggestion here is to allow the electorate to choose how long they would like the government’s term to be during the elections (by indicating a preferred term-length and then collating the results according to a collated ranking system or weighted average of some sort – of course, selecting the optimal social preference ordering methodology is controversial but that is beyond the scope of this blog post). If the electorate were to opt for a longer term-length, it would be a signal (quite possibly of confidence or of a desire for longer-lasting stability or simply a desire to delay future elections etc.) and this means that otherwise shocking policy can be implemented with less immediate harm. Conversely, shorter term-lengths will ensure that those governments with shaky mandates will be time-constrained in implementing their more extreme policy proposals.
Free movement and discrimination: the case of football
The more you open markets up, the less discrimination you get on grounds of 'taste' (racism). The stuff left over is usually 'statistical' (i.e. where certain groups are different in their average levels of job-relevant criteria). There was already a great paper showing this for the Fantasy Premier League (which I play avidly), but now there's also one for the real Premiership! Pierre Deschamps and José de Sousa look at the impact of the 1995 Bosman Ruling on the gap between black and white footballer wages in the English league. They find that when only 20 clubs competed for their skills, black players were underpaid relative to white ones, indicating that owners were able to indulge their preference against non-whites (or indulge their fans' preferences).
But once the whole of Europe were effectively on an equal footing, blacks became highly mobile and garnered equal pay for their efforts:
This paper assesses the impact of labor mobility on racial discrimination. We present an equilibrium search model that reveals an inverted U-shaped relationship between labor mobility and race-based wage differentials. We explore this relationship empirically with an exogenous mobility shock on the European soccer labor market. The Bosman ruling by the European Court of Justice in 1995 lifted restrictions on soccer player mobility.
Using a panel of all clubs in the English first division from 1981 to 2008, we compare the pre- and post-Bosman ruling market to identify the causal effect of intensified mobility on race-based wage differentials. Consistent with a taste-based explanation, we find evidence that increasing labor market mobility decreases racial discrimination.
The figure below shows how the 'turnover' (i.e. churn between clubs) of black English players jumped when European markets opened up. Market freedoms; exit; a sort of 'voting with their feet', outperformed voice in bringing equality. And we know from ASI research that this did not harm the English national team.
This is in line with a lot of what we have been saying recently—markets are a good way to bring about justice!
Compulsory Education, Child Rights, and the Foundation of Society
Vishal Wilde's series of think pieces continues with a radical look at the role of government in education. Why, he asks, do we assume that both children and society are better off when we make education compulsory in childhood? He suggests that using state coercion in this way is reprehensible and unproductive. Instead, children should be liberated from the constraints the state currently places upon them, for their own benefit and ours. Everyone loves learning. The thing is that not everyone likes studying and what’s even more frustrating is being told how and why we should study. Making education available to everyone is benevolent but making education compulsory for everyone is something that we are so used to that we do not see the blatant problem with it – the deprivation of freedom that prevents the flourishing of precisely those who have the most potential in society; children. Children, when you think carefully about it, are the most oppressed people across all societies.
One might argue that we often only see the value of things once we have gone through them and we might not have realised that had people not guided us onto and through that path. There is, however, a distinction between gentle guidance and legal coercion via making something compulsory. Imagine if we made undergraduate degrees, master’s degrees and doctorates compulsory – this would, quite likely and certainly justifiably, result in public outrage due to the deprivation of civil liberties.
Of course, when children are forced to go to school, since they are unable to argue comprehensively against the injustice of the situation, we do not listen to their outcries. Now, there are children who enjoy going to school. What about those that really don’t, though? What about those who have genuine passions and interests outside of the syllabus and classroom? The crude manner in which we are organised according to our ‘ability’ or ‘academic potential’ from an early age is hardly representative and within each ‘ability set’, there is still a wide spectrum of potential with respect to the taught material and there is, therefore, an oft-documented tendency for some to feel bored and some to be left behind.
A way to handle this problem is reduce class sizes and one way to reduce class sizes is to make education non-compulsory whilst still allowing people to attend the classes that they want to, in order to attain the skills that they themselves think would be useful. For example, if a child realises that they’d like to learn how a computer works (whether this be in terms of software or hardware), they will quickly realise that in order to effectively learn about this (like many other things), they will need to learn become numerate and literate. Therefore they will, by innate means, come to value numeracy and literacy and, most likely, expend more effort in attaining the necessary level of proficiency in these skills as a means to their final end.
Furthermore, the way in which various subjects are taught in school is essentially a form of paradigmatic, scientific indoctrination. Yes, teachers are taught to be unbiased and impassionate when teaching subjects such as History and Economics, but this does not prevent the syllabus itself from being biased toward a particular methodology, ideology, interpretation or analysis. Thomas Kuhn (1962) argued in The Structure of Scientific Revolutions that sciences such as Physics, Chemistry and Biology are taught as if they had progressed in a linear fashion and the History of Science is completely misrepresented to students from a very early age. The education system is the method by which we are trained to think dogmatically under the rules of a specific paradigm rather than rationally and independently whilst being aware of the prevailing rules of the paradigm. Ultimately, this stifles the speed of articulation and shifting of these paradigms. The representation of ‘scientific’ knowledge that many are so quick to praise because of the rapid development it has enabled will also, in future, be deemed the dogma of our era, whose limitations were self-imposed, unnecessarily prolonged and continuously reinforced by means of compulsory education.
However, what would children do if they were not forced into education? Play? Work? Whatever they want? All of these might seem like horrifying propositions to some but this is because we have been conditioned into believing that education means being up to the standard of certain metrics, sitting in a classroom, being passively taught and raking in the qualifications that correlate with higher earnings. Making education non-compulsory does not mean that people would not learn, it would just mean that people would, from a young age, be empowered to learn how they learn best rather than be taught how they supposedly learn best; they would have a more holistic understanding of what constitutes an education and this would enable them to think more creatively with less regard to the standards currently imposed by civilisation.
What about those children who do not feel motivated to advance scientific knowledge and are, rather, interested in pursuing work opportunities? After all, not everyone is interested in working at the so-called ‘frontiers of knowledge’. The phrase ‘child labour’ appals people because it conjures imagery of children working in horrific, mind-numbing and often life-threatening conditions. I’m certainly not actively advocating that children should be sent up chimneys or work with dangerous, heavy machinery once more but I’m saying that children should be allowed to work non-life-threatening jobs that they feel they might get some valuable experience from. For example, if a child who has taken a particular interest in computer programming was allowed to do some coding jobs for a software developer, would it not be wrong to prevent them from doing so? Coding is not life-threatening, it pays well, the child might love it and indeed, the child may be able to think in ways that adults cannot and he or she may well be far more suited to the job than any adult.
Similarly, if a child had a passion for art and he wanted to work as an assistant or apprentice in an artist’s studio, why on earth would we deny them the opportunity and instead force them to go to a classroom to learn the things the government thinks they ought to learn? One of the arguments put forward is that children need to go to school in order to be economically productive in society and work well within it – however, if they find that they don’t need to go to school to do this or that only certain classes taught within school are worth attending to attain this end, then education cannot be made compulsory purely on this ground. In fact, studies, life experience and even common sense repeatedly reveal to us that much of what we are taught in formal education turns out to be of very limited use in the interests we choose to develop in future.
The gender differences in educational attainment (girls outperforming boys) and in pathways (boys being over-represented in mathematics, engineering and the sciences versus girls who are over-represented in the arts and humanities) may also possibly be addressed when individuals are able to express their passion for a subject in their own way.
Indeed, we might find far more passionate teachers outside of the classroom than in the classroom. By making education non-compulsory, children would be able to pick and choose their teachers and they would naturally gravitate towards those who complement their personalities and this would, in turn, naturally foster passion for their interests.
The gist of some of the arguments for compulsory education is that “since we went through it and it has done something good for us, they should go through it as well”. This logic doesn’t hold when we consider the example that something good, such as lessons learned with respect to what we should like to never repeat, might have come out of some appalling eras in History (Mao’s Great Leap Forward, Gulags in the Soviet Union, Hitler’s Third Reich) but we would certainly not wish them to be repeated again for the sake of the lessons being ingrained in us once more.
You might think that the three aforementioned examples were extreme comparisons but when you think about it and scrutinise education policy closely, they may still be apt comparisons – Mao thought that his reforms would do good for China, Hitler suppressed and slaughtered entire peoples because he thought the world would be better off without them and Stalin thought that imprisonment and forced labour was the optimal way to deal with political dissidence. There are many children who love going to school and get a lot out of it but what about those who don’t? When those children that love reading fantasy stories, learning about dinosaurs or ancient civilisations get told to put down their books, lay aside their passion and listen to what must be taught – is it not suppressing their thoughts, is it not the slow slaughter of the people they could be, is it not forced labour as punishment for intellectual dissidence?
Of course, we don’t see this when the child cries not to go to school because they would rather do something that we perceive to be unproductive. “But how will they learn the skills necessary for economic independence from their parents? How will they learn to be good, functioning members of society if they do not go to school with their peers?” Isn’t there more than one way to learn from and interact within society? Do we really want to teach a child that what really matters is how much they make from their education? Should education be viewed purely as a monetary investment?
Surely by telling children what they must learn and what is best for them without allowing them to think for themselves from a young age we are preventing them from thinking independently about how best to tackle the world – it is, after all, independent thought that is the necessary precursor for all other forms of independence (such as, but not limited to, the financial variety) and a vital ingredient for advancing civilisation.
Suppose they were granted the right to, when some children leave the classroom to embark on their own personal journey of learning, a high proportion of those who remain in the classroom will be composed mainly of individuals who see value in the taught syllabus, for one reason or another. This leaves together those who see value in what they are doing and the mutually shared interests of the class will enable all of them to collectively cover more ground and explore deeper questions. Incidentally, this would also cut the cost of education to the taxpayer since children would only learn what they want to and enrol in the classes that they’d like to even from the primary years.
Even though life expectancy has increased over the centuries, this does not give the State (or any other person, for that matter) the right to encroach upon and dictate what we do with our, on average, increasing amount of time spent in this world. Parents might say “but they are my children, I need to guide them” and no-one would deny them the opportunity to guide their children but you should never forget that though you might think of them as your children, their lives will never be your lives.
The government continuously inhibits children’s’ development, albeit with good intentions. By all means, let education be available and optional but enforced compulsion tramples upon that most powerful, cherished and important civil liberty – the freedom of thought, the foundations of a truly flourishing society. The panacea to this poison is to make our education system wholly optional.
Space disco, Kate Bush, and more: the ASI's best of 2014
Ben:
Song: #####.1 by #####Album: It's Album Time by Todd Terje
Musician: The Pizza Underground
Movie: Grand Budapest Hotel, but I'm ashamed to say I only saw five
Book: Pale Fire by Vladimir Nabokov
Restaurant: Rex and Mariano, Soho (runner up The Manor, Clapham)
Favourite article: I Can Tolerate Anything Except the Outgroup, by Scott Alexander
Favourite moment: #Gamergate
Favourite person: Scottish highlander on BBC Question Time
Kate:
Song: Wild Child by Kenny Chesney, with Grace Potter
Album: 1989 by Taylor Swift
Musician: Jason Aldean (for continuing his tradition of writing songs about trucks)
Movie: Magic in the Moonlight
Book: Goodbye, Mr Chips by James Hilton (1939)
Article: Bring Back the Girls - Quietly by Peggy Noonan (WSJ)
Political moment: #Bridgegate
Person: Senator-elect Cory Gardner, CO (I have now forgiven Colorado for their nightmare decision in 2012. Ohio, on the other hand, I am still not speaking to)
Charlotte:
Song: minipops 67 [120.2][source field mix] by Aphex Twin (because it only took 13 years to come out proper)
Album: Rivers of the Red Planet by Max Graef (jazz/hip-hop/house, good background music)
Musician: Kate Bush (the year I got round to listening to her albums)
Movie: Under the Skin (amazingly shot)
Book: Perfume: The Story of a Murderer by Patrick Suskind (one of the few I actually read)
Restaurant: Bone Daddies, Soho (who can't love a huge bowl of pig fat & garlic)
Article: The Socialist Origins of Big Data - The New Yorker (on Chile's project Cybersyn)
Political Moment: The world thinking Kim Jung Il's public absence was because he broke both his ankles because he ate so much Emmenthal (because obviously)
Person: Shia LaBeouf (for everything he's given us)
Sophie:
Single: Shake It Off by Taylor Swift (I do not enjoy this song but LOVE watching Charity, one of my best friends and Swift’s greatest fan, singing it)
Album: Artpop by Lady Gaga (the pop genius’s works are not only the epitome of freedom of expression and individualism but Gaga demonstrates the natural force with which the world sucks up anything walking into a gaping hole in the market)
Musician: Kate Bush (my eyes opened to her brilliance and creations this year by Sam, her sounds and voice open creative avenues in my mind)
Movie: La Grand Bellezza (released 2013 but watched this year, you MUST see this, it’s an indulgent party for the senses to devour)
Book: The Rational Optimist by Matt Ridley (only read this year though it was released in 2010)
Restaurant: Le Relais de Venise, Mansion House (holds fond memories of both an amazing steak and my first time dining with the ASI team)
Political moment: remaining a United Kingdom (were endless obscure and hilarious ones in 2014, though building up to the referendum for two years and the elation experienced at the result makes this undoubtably number 1)
Person: Malala Yousafzai (the 17-year-old global role model is courageous, ambitious and hard-working, existing to fight for others’ education—I was reduced to tears of inspiration when she spoke at my university)
Nick:
Song: Fancy by Iggy Azalea and Charli XCX (albeit for entirely non-I-G-G-Y related reasons)
Album: Kenny Dennis III by Serengeti (see No Beginner, Off/On)
Musician: Jonwayne (partly for being the neckbeardiest rapper/producer going - see Andrew, Be Honest)
Movie: Locke (of the four or so I watched)
Book: Time's Arrow by Martin Amis (1991) or The Rise of the Meritocracy (1958) by Matthew Young (honourable mentions to We by Yevgeny Zamyatin (1921) and Girl, 20 by Kingsley Amis (1971))
Restaurant: Jam Jar, Jesmond, Newcastle, if only for their Cow vs. Pig burger
Article: ‘Tories should turn their backs on Clacton’ and ‘Voters, not the politicians, are out of touch’ by Matthew Parris, King of trolls (Times)
Political moment: The UKIP defections and the resulting betting, which netted me a sum of no less than £10
Person: For me, 2014 was the year of the unimullet (s/o r/YoutubeHaiku)
Sam:
Song: Attachment by Hannah Diamond (My top 50 singles of the year are here, Youtube playlist link here)
Album: It's Album Time by Todd Terje (Thanks Ben for introducing me. I also enjoyed FKA Twigs's album LP1 and got into Susanne Sundfor in a big way this year)
Musician: AG Cook / the PC Music grouping in general
Movie: Interstellar (but I only saw about 5 films all year)
Book: Vanished Kingdoms by Norman Davies (Worth it for the chapter on the Kingdom of Dumbarton Rock alone. Matt Ridley's The Red Queen, on the evolutionary biology of sex, was a close runner-up)
Restaurant: Santana Grill (a burrito stand on Strutton Ground near the office—just delicious; I also ate at KFC at lot)
Article: An open letter to open-minded progressives, by Mencius Moldbug (I disagree with much of Moldbug's work, but I can't think of a more interesting contemporary political thinker)
Podcast: Serial
Political moment: Shinzo Abe storming to victory in Japan (also for his amazingly awkward handshake with Xi Jinping)
Person: Richard Dawkins (boring as an atheist, brilliant as Social Justice Warrior-bait)
Philip:
Song: Turn Down for What by DJ Snake and Lil Jon
Album: Syro by Aphex Twin
Musician: Matador
Movie: Guardians of the Galaxy
Book: Intuition Pumps and Other Tools for Thinking by Daniel Dennett
Restaurant: Gymkhana, Mayfair
Article / blogpost: How Farming Almost Destroyed Ancient Human Civilization by Annalee Newitz
Political moment: The landing of the Rosetta spacecraft's Philae probe on Comet 67P
Person: David Sinclair (for his work on lifespan extension)
Local government cuts needn't be the end of the world
Local governments are having their spending power cut by 1.8% in real terms next year. Local councils pay for things like social care, some education, public transport and roads, and some of the arts. So this cut is not so popular in some quarters.
I hate relying on ‘waste cutting’ as a way of making spending cuts, but local councils really do seem to waste a lot of money. Since 2010 they’ve made £10bn in efficiency savings, and a third of councils say they can make bigger savings. I’m sure at least some of the other two-thirds are just being shy. The Local Government Association estimates that local governments can continue making efficiency savings at between 1 and 2 percent per year. So that’s something.
The big spending items are social care and waste spending. Both of these can be reformed so that people who can afford to have to pay for themselves. Waste collection is often contracted out, and there is academic evidence that doing so results in significant cost reductions. (There’s an easy way for councils who do not already do this to save some cash.) But more significantly there’s no real reason that more of the actual payments for this should not be moved to private residents as well, at least those who can afford it.
Social care is much trickier and, as the population gets older and lives for longer, paying for it is becoming a bigger and bigger problem. Those people who can afford to pay for their end-of-life care should do so, but there is the problem that this disincentivises saving. Nevertheless it is hard to see a case for people who live in social housing and earn low amounts of money paying for the end-of-life care of people who own the big houses that they live in. Reforming this wouldn’t solve problems in the short run, but it might help stave off a bigger funding problem in the medium run.
Normally everyone focuses in on arts funding. In my view, there is no role for government in arts funding at all. I won’t convince you of this here, but Pete Spence might. And there are all the weird little things that local governments spend their money on that could be cut to save even a tiny bit of money. Where I live, in Lambeth, half the adverts I see seem to be thinly-veiled political campaign posters (paid for by me and my neighbours).
And, funnily enough, there’s one way councils could raise quite a lot of money and solve another problem in the process. The country needs a lot more houses, and planning permission is the main thing standing in the way. In some parts of the country, a piece of agricultural land that gets planning permission rises in value by one hundred times. Councils should be allowed and encouraged to auction off development rights for new houses. That would raise money for them and help tackle the housing shortage.
The problem here is that housing demand is not equal across the country, and it’s the richer places like London and the south east that would benefit the most from this. So there’s probably a case for some minority fraction of the money raised being redistributed to poorer authorities. In general I like the principle of council funding redistribution from rich to poor parts of the country, but that does reduces the incentive for councils to improve the economic prospects of their own areas. Though perhaps they lack the powers to do this anyway.
We have a government deficit that most people want reduced, some very large areas of central government spending that most people want increased (pensions, healthcare), and a general consensus that economic growth is a good thing (so tax rises are out). Something’s gotta give and there is almost nothing that can be cut painlessly. But given some willingness to reform alongside cutting, local government cuts could be the right way to go.
They're spouting rubbish about rubbish again
We're really got to get ourselves a new group of people running our public services you know. The current lot seem to have missed the point of the whole exercise. For, at root, the entire exercise of politics and state power is really a method of deciding who empties the bins. There are certain things that simply need to be done. There's also a group of things that can be done individually, one of those that can be done by simple voluntary cooperation and another group of things that can only be done by some fairly strong compulsion. And those that are properly the province of that state, this government idea, as those that must both be done and can only be done with that compulsion. And taking out the rubbish is one of those things that is both. Yes, a free market would indeed deal with most of it but the public health benefits of not having those remaining piles of stinking ordure mean that there's always going to be some state compulsion necessary.
At which point we get:
A town has been left overflowing with rubbish bags after binmen have refused to pick them up - because the sacks are the wrong colour.
Mountains of household waste is lining streets in Weymouth, Dorset, after residents were given blue bin bags as part of a new waste collection scheme rolled out in the town.
But some claim they did not receive the new blue sacks, and have continued to use the standard black ones - only for them to be left by the side of the road by binmen under strict orders not to take away the 'unauthorised bags'.
Piles of rubbish bags have been mounting up in streets around the town for the past two weeks, to the anger of residents.
What?
The council-run Dorset Waste Partnership said it is 'applying its policy' to limit residents to one household rubbish bag a week in the hope they will recycle more.
The loons have taken over the asylum. We need to fire these people and get a new set.
Please note this is not about party politics and it's also not about the "shortage of landfill". We don't have such a shortage. The country produces about the same amount of waste each year as the number of holes we dig each year for other reasons. The only shortage is in the licences to be allowed to put the rubbish into the holes we already have available.
What this is about is that we've simply got the wrong group of people ruling us and that needs to change. On the basis that government really is about deciding who take out the rubbish and if they can't even manage that then....well, why don't we try finding some people who can manage that minimal task?
Competing monetary rules: modern free banking possibilities
With the emergence of new digital currencies and, in particular, crypto-currencies (the most prominent of which, being Bitcoin), one can wonder how different Free Banking might look in the modern economy. In the past, monetary rules had been based on metallic content. Now, they are often focused on inflation-targeting, nominal-GDP targeting and so on. Though Free Banking would be desirable, Ben Southwood and Sam Bowman have previously argued for nominal GDP targeting in its stead, as the pragmatic, preferred alternative for monetary policymakers. Saying that, George Selgin argues that most free banking systems lead to effectively 0% NGDP targets.
Of course, the one thing that all these monetary rules have in common is their aim to foster expectations-stability. However, stabilising expectations with respect to one variable often still leaves unstable expectations with respect to another variable; modifications of the Taylor rule may stipulate that we should raise or lower interest rates according to the output gap, inflation rate etc. but this still does not mean that people will be able to forecast when or by how much the interest rates will rise in advance since one’s expectations with respect to other important variables are hardly stable.
Bitcoins have a monetary rule with respect to the rate of increase of the money supply that is determined by an algorithm that periodically halves the speed at which Bitcoins are rewarded to the successful miner (mining being the process by which they are created) and, furthermore, the number of bitcoins in existence can never exceed 21 million. However, Bitcoins still suffer from exchange-price volatility. Other crypto-currencies also have different monetary rules. So it’s quite clear that developments in the state of technology enable different types of monetary rules to be implemented.
In a modern free banking system, then, there would be competing monetary rules between the various different currencies (whether they are issued by banks or obtained through other mechanisms made possible by the state of technology). Since each monetary rule implemented hitherto attempts to stabilise expectations with respect to a certain variable, picking a currency would essentially involve each agent choosing between differing monetary rules and, therefore, independently and rationally stabilising their expectations according to their priorities.
Even Keynes wrote on the importance of understanding
The dependence of the marginal efficiency of a given stock of capital on changes in expectation, because it is chiefly this dependence which renders the marginal efficiency of capital subject to the somewhat violent fluctuations which are the explanation of the Trade Cycle ... this means, unfortunately, not only that slumps and depressions are exaggerated in degree, but that economic prosperity is congenial to the average business man.
So even in a Keynesian framework, modern free banking, through more diverse, competing monetary rules, could help ease the excessive malaises of business ‘cycles’!
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.
Professor Dennis O'Keeffe
We are sad to announce that Prof Dennis O'Keeffe has died. He was a very distinguished educationist who did original and influential research on subjects that included truancy and teacher training. He was Professor of Social Science at the University of Buckingham. He attracted national attention with his report on "School Attendance and Truancy (1995)," taking the view that truancy was an almost inevitable result of poor courses that failed to entice the attention of students. With the Adam Smith Institute he published "The Wayward Elite" in 1990, a major critique of British teacher-education, and sat on the ASI's Scholars' Board. He was a keen supporter of several of the Free Market think tanks in addition to the ASI, including the IEA, the CPS, and Civitas, and participated in many of their activities. His attendance was always appreciated at our lectures and lunches, as much for his goodwill and charm as well as for his considerable intellect.
