Economics Tim Worstall Economics Tim Worstall

This On Rock Or Sand book will be a bit of a disappointment

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I'll not argue theology with the Archbishop of York, coming originally as I do from the tran- not con-substantiation side of the argument. But when said Archbish strays over into Adam Smith and economics I'm afraid that it really is incumbent upon both I and us to point out to him the errors of his ways. There's to be a new book out, On Rock Or Sand, telling us all what's wrong with our country. And as far as theology goes well, theologians sound like the right sort of people to be telling us all about it. However, it would be helpful if, when those same theologians decide to tell us about economics, they have some clue as to the basics of the subject. This illustrates the problem nicely:

The book characterises the welfare state as the embodiment of the Christian command to “love thy neighbour” and warns that people should not rely on what the founding father of free-market capitalism Adam Smith called the “invisible hand” of the market to create a fair society.

Smith never said anything so drivellingly stupid. The one reference in Wealth of Nations to "invisible hand" is during a discussion of the general propensity to invest capital at home rather than abroad. The modern day usefulness of this being that, even in a world of perfect theoretical capital mobility, some incidence of a corporate profits tax will always fall on shareholders. This is something that is useful to know but it's going to be a very minor footnote in the recipe for a just society.

Which is why, of course, Wealth of Nations and Theory of Moral Sentiments are such agonisingly long books. For they're largely an exploration of when markets cannot be left safely to handle the creation of a just and or efficient society. Which is something we would hope someone desiring to comment upon them would know.

For example:

Dr Sentamu adds that a post-war vision through which the welfare state and NHS developed has “given way to an individualist and consumerist vision, with public goods such as health … and education … increasingly becoming privatised, where society has become a market society, with everything going to the highest bidder and the poor being left behind in the unceasing drive to increase the nation’s Gross Domestic Product.”

Smith discusses the very point of non-market access to education. And backs it, at least at the basic level. On the grounds (not that the phrase existed then) that being part of a generally literate and numerate society was indeed a public good. And we can go on, using the same logical structure, and argue that much of traditional public health is similarly a public good. Sewage, drains, the control of infectious diseases, the effects of vaccination, yes, these are indeed public goods. But the treatment of your or my cancer might well be good for the public, good public policy, publicly good even, but it's not a public good. As your or my university degrees are not a public good.

What really annoys is that Christian churchmen will be the first to agree that thousands of very bright people have chewed over the intricacies of theological debate for millennia. Even, that as a result some truths have been uncovered. And yet when it comes to economics they're unwilling to similarly agree that some thousands of very bright people have chewed over the subject for some centuries now and have uncovered some truths. Or if they are willing to accept that in theory they've apparently not bothered to find out what those truths are.

I've no idea as to whether tran- or con-substantiation is actually correct. And I'm also not all that interested to be frank about it. But I would make the effort to understand it all before pronouncing upon the matter. We'd all rather wish the Archbishop would make the same effort when he steps outside his own specialist knowledge base, eh?

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Education Ben Southwood Education Ben Southwood

Single sex schooling: three recent papers

Nearly all state schools are co-educational, but most independent schools are single sex. Three academic papers I came across in the last few months suggest that the education authorities might have something to learn from the private sector—all three find that randomly switching people to single-sex education leads to substantial improvements in their outcomes. The first, Lee et al. (2014) looks at random assignment of Korean youths to middle schools, comparing single sex classes in coed schools with coed classes in coed schools and single-sex classes in single-sex schools.

Male students attending single-sex schools outperform their counterparts in mixed-gender classes by 0.15 of a standard deviation. The significant impact of single-sex schools on male students’ achievement are not driven by classroom gender composition, but largely accounted for by increases in student effort and study-time. We find little evidence that classroom or school gender composition affect the outcomes of female students.

The second, Lu & Anderson (2015) looks more closely, at the effect in Chinese middle schools of being randomly assigned to sit next to others of the same gender. Contrary to the Korean paper, they find that girls do better if they sit near girls, but there is no effect on boys from who they sit near.

We exploit random seat assignment in a Chinese middle school to estimate how the gender of neighboring students affects a student’s academic achievement. We find that being surrounded by five females rather than five males increases a female’s test scores by 0.2–0.3 standard deviations but has no significant effects on a male’s test scores.

The third, Booth et al. (2013) looks at universities in the US, and does a true random experiment, again finding an effect on women but none on men.

We examine the effect of single‐sex classes on the pass rates, grades, and  course choices of students in a coeducational university. We randomly  assign students to all‐female, all‐male, and coed classes and, therefore, get  around the selection issues present in other studies on single‐sex  education. We find that one hour a week of single‐sex education benefits females: females are 7.5% more likely to pass their first year courses and score 10% higher in their required second year classes than their peers attending coeducational classes. We find no effect of single‐sex education on the subsequent probability that a female will take technical classes and there is no effect of single‐sex education for males.

Now these three studies are hardly conclusive—there's a big literature out there. And one of the things we really know well is that improving education is hardMost of the quality of private schools is in their students, teachers, facilities and parents. But perhaps it's no coincidence that private schools are mostly single sex, and perhaps a system with more parental choice would tend toward a system with different genders in different classes or different schools.

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Miscellaneous Nick Partington Miscellaneous Nick Partington

They must be mad, literally mad: to be lucky in one's opponents

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It is easy to take the view that we British defenders of immigration have never had a tougher time being heard over the omnipresent calls for restrictions, policy changes, and–most frequently–an “open and honest debate” on the subject. Issues of immigration and race relations have indeed increased in salience, but I remain bemused by (and somewhat thankful for) the sterility of the debate as it exists today. Opponents have got to the absurd point of having to pretend that it isn't immigration that they care about, but migration. To this end, they speak about net migration rather than immigration statistics, and give their pressure groups names like Migration Watch. In my view, this is quite transparently a PR move and nothing else. Migration Watch claim that their goal is ‘balanced migration’, though I doubt they would be delighted if tens of millions of Brits were replaced with immigrants each year. I am entirely willing to be convinced otherwise when the soi-disant migration sceptics urge the government to do everything it can to reduce net migration – including using state power to increase emigration (perhaps subsidies for yet more Brits to move to sunnier climes).

When one's opponents have to contort themselves in this way, resorting to the specious economics of the so-called lump of labour fallacy (which most good evidence seems to refute), one should be grateful. They are hobbled by their partial adherence to ideas of acceptable discourse set out by those who would see them silenced. They are less likely to be accused of racism while talking about pressure on wages or queues at the GP surgery than about the merits of multiculturalism.

Various arguments against immigration are unheard beneath this cacophony of mistaken economics. Speaking to the sense of insecurity–alienation, even–that some feel in response to the changing character of their communities, these points can be troubling when made with passion. Enoch Powell wasn't citing the fluctuation of net migration statistics in his Rivers of Blood speech. Neither was Robert Putnam (though not an opponent of immigration per se) in Bowling Alone when he reflected that the more diverse the community

…the less people vote, the less they volunteer, and the less they give to charity and work on community projects. In the most diverse communities, neighbors trust one another about half as much as they do in the most homogenous settings.

The observation that these arguments aren’t being made is less cause for optimism and more for wariness. For the moment, while our opponents for the most part refrain from basing their arguments on normative claims about the cultural effects of immigration, and focus on claims about economics, we can rebut, present evidence and, I hope, convince some people that they are mistaken. Indeed, when surveyed, people report that they are most concerned about immigrants’ effects on jobs, public services, and wages, rather than culture, so it might follow that they can be convinced otherwise by contradictory evidence.

However, if the point comes when those opposed to liberal immigration policy realise they are abiding by standards which restrict their side and weaken their argument, and stop doing so, those of us who want immigration (and lots of it) should be worried. The other day, Nigel Farage spoke about protecting our ‘Judeo-Christian’ culture, and yesterday of the moral cowardice of Europe: a taste of what we've avoided, or of something yet to come?

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Energy & Environment James Knight Energy & Environment James Knight

Why emissions tests are so exhausting

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One problem I have with carbon tax is that due to lots of asymmetry of information the setting of a carbon tax rate is almost entirely arbitrary. Still, despite this, carbon tax does some good for the following reason. People change their bad consumption behaviour to accord with differing incentives like price changes. So for example, a tax on carbon dioxide emissions of £50 or £60 a tonne would affect our consumption habits in relation to products and services associated with carbon dioxide emissions, whether it be driving, flying or whatever. If this tax enabled the government to reduce taxes in other areas, then the carbon tax would help us change our habits and at the same time bring about selection pressure in the market for us to be more mindful of the environment.This is part of a general law of economics - when prices go up or down, people change their buying habits. If the price of red grapes goes up by 40% and green grapes stay the same, people will buy more green grapes and fewer red grapes. Similarly, if the price of emitting carbon goes up, people will lower their CO2 emissions, which will place selection pressure on consumers and on eco-unfriendly businesses. This means that as carbon/pollution taxes endure, people will look for more ways to be greener, making us as humans more mindful of our environment.

Alas, the government isn't happy with mere carbon taxes - it places superfluous and hence unnecessary additional burdens on us. It does this because politicians usually do not know the correct rate in a cost-benefit analysis between the externalities we emit and the freedoms we enjoy. Let me give you a personal example of this - the MOT emissions test. I drive a high-emission Subaru, and in order to enjoy this I am penalised with a higher rate of car tax. I also have a higher fuel bill than most. But both of these measures are fine by me in a free market where free-choice rules: I enjoy my Subaru and its fast-driving capacity so I soak up the additional cost. In a free society you may prefer something similar, or something very different, like, say, a more efficient Nissan Micra. You'll pay less than me in tax and fuel (per mile) but I'll beat you off the lights every time and probably get to my destination quicker than you. As long as we're both happy with that arrangement (and our choices indicate we are) then all is fine.

The trouble is, emissions testing at the MOT centre means that it doesn't stop there. Drivers cannot get an MOT certificate if their vehicle’s exhaust emissions are too high. This has come at a considerable extra cost to me (and other drivers like me). I had to pay £650 to replace a perfectly good sports-cat because it couldn't lower the emission levels to below the legal limit, and I will have to do this every few years for the same reason. Add to that the fuel costs and wear and tear each year getting the sports-cat hot enough to pass the test, and the fact that many other parts (oil, filter, lambda sensor, valves, etc) need changing more regularly to keep my emissions low enough, and this amounts to an unnecessary set of costs that I have to incur on top of the carbon tax I already pay to run a Subaru.

These costs are unnecessary for two reasons: firstly because they are going to have no significant bearing on future environmental changes at all. And secondly, a carbon tax (on my car tax and my fuel buying) already does the trick without imposing all the additional MOT emissions costs on me. If I find I want to lower my tax and insurance and reduce my fuel bill I can choose to sell the Subaru to a buyer who wants a fast car. Through that transaction we both win. If I can't sell it due to no one wanting such expensive car bills then it's a signal that my next car should be a more environmentally friendly car. In each case, autonomous decision-making rules. With the MOT emissions problem I have to fork out hundreds of pounds just to keep my car on the road. The government is already getting its pound of flesh through my increased road tax and fuel bills, it's unnecessary and hugely damaging to my bank balance to add MOT emissions expenditure to the mix.

There's also the unpredictability factor which gives us inopportune bills for which it is hard to save - and this affects not just high-emission drivers - all drivers have the same issue here. When your car tax and fuel bill is consistent with the kind of car you drive you can plan your year around it, knowing roughly what your expenditure is likely to be. If you end up with a part fault you can replace it knowing that the part needed replacing. But with these emission laws, bills can come in not through non-functionality of parts but through cars not being able to get through the MOT emissions test without having them replaced. As I and no doubt many drivers have found, this frequently brings about unexpected bills of hundreds of pounds that we need to pay, not to make the car roadworthy but to make it MOT emissions-worthy (a very different thing).

If we think it's reasonable to pay a bit more to run gas guzzlers, then it's true we need some mechanism to know whether people are running high-polluting vehicles or not. But we already have this mechanism in the form of higher fuel bills for gas guzzlers and higher car tax to account for those emissions, which, to me, renders the additional (and superfluous for reasons I indicated) MOT emissions test unnecessary. I'm not saying we don't need an MOT test at all - we just don't need the emissions part.

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Healthcare Tim Worstall Healthcare Tim Worstall

There are some people we must prevent from working in public service

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Try this on for size:

Having spent years attempting to fix broken projects and teams within the NHS and local government, and also in the private sector, what I have learned is this: a public service and a business are inherently different beasts and asking one to behave as the other is like asking a fish to ride a bicycle.

The clue is in the name: the primary aim of a public service is to provide a service to the public – to protect crucial social utilities from the instabilities of capitalism and to avoid negative social impacts.

Public services are democratic. If a service fails to deliver our needs, we can hold those responsible to account at the ballot box. Important matters such as wages, pensions and working conditions are the result of negotiation, and subject to internal and popular support.

No, no, don't agree or disagree a yet, add this from the same piece:

Businesses are hierarchical, not democratic, and wages, terms and conditions are set by the executive and subject to the market. This can be mitigated to some degree by collective bargaining through unions, but the private sector has historically delivered lower wages and poorer working conditions for its employees.

And piece the two together. A public service really, really, is only there to provide that service. Yet it also pays its workers better than a private business. Therefore, the inescapable conclusion must be that a public service is more inefficient than a private business. Because, of whatever available resources there are to provide said service more of them are lavished upon the workers rather than the service provision.

Kerry-anne Mendoza is a former ­management consultant in banking, local government and the NHS, who left her job to join the Occupy protest.

Probably a good idea eh, as we almost certainly don't want her running a public service, do we?

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Planning & Transport Philip Salter Planning & Transport Philip Salter

Green Belts increase business rents too

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If you’ve picked up a newspaper or turned on a radio or TV today then the chances are you’ve read or heard about the Adam Smith Institute's latest research paper – The Green Noose: An analysis of Green Belts and proposals for reform. A section of the paper considers the impact of Green Belts upon businesses. As author Tom Papworth explains, increasing the cost of business premises increases the costs of running businesses, which pushes up prices. This reduces the real disposable incomes of households, while putting UK businesses at a competitive disadvantage by shifting production overseas.

A few years ago, I interviewed the inventor of the iconic Brompton bicycle. While visiting their factory in Wandsworth a couple of television crews from the BBC and ITV turned up to record the conveyor belts and workers in action. It turned out this was a common occurrence, principally because it's the only manufacturing taking place on that scale in London (and the television crews didn't want to travel any further). According to Papworth, London’s Green Belt could be the reason Brompton is that last factory standing:

Evans and Hartwich suggest that land-intensive industries, such as manufacturing, have declined rapidly, because many have fled the country to locate themselves in a country with lower land prices. If correct, this would be a major challenge to the conventional view that deindustrialisation was the result of supply-side reforms and monetarist policies in the 1980s, instead suggesting that our land use planning laws bore a substantial amount of responsibility for the decline of UK manufacturing in the past half century.

This makes sense. LSE Geography Professor Henry Overman cites some concerning research in an useful blog looking at the case for building on Green Belts:

“Green Belts increase office rents. Cheshire and Hilber (2008) carefully document how planning restrictions in England impose a 'tax' on office developments that varies from around 250 per cent (of development costs) in Birmingham, to 400-800 per cent in London. In contrast, New York imposes a 'tax' of around 0-50 per cent, Amsterdam around 200 per cent and central Paris around 300 per cent.”

If enacted, the paper’s suggested reforms would provide affordable housing to Generation Rent, more competitive business rents, and the possibility for more manufacturing entrepreneurs to run their businesses out of this country. What’s not to like?

Philip Salter is director of The Entrepreneurs Network.

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Healthcare Vishal Wilde Healthcare Vishal Wilde

Farage, ‘improper’ English and his inimical proposal

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Attacking people who “cannot speak English properly” with suggestions of unemployment is just the tip of the iceberg of inimical and inhumane anti-foreign and anti-immigrant policies that threaten to lead Britain into socioeconomic retrogression. Farage also claims that “middle management” would be his target in making cuts in the NHS and, though this aspect is justified and welcome, the fact that it’s accompanied by the aforementioned divisive rhetoric reveals the discriminatory sentiment and true roots of his policy suggestions. Of course, this proposal would only affect the NHS but the danger is that when such sentiments are formally empowered in elections, it will inevitably lead to similar regulations being extended to other spheres and, therefore, also inhibit the private sector’s ability to recruit talented individuals. The Entrepreneurs Network released a report showing how we are already failing international graduate students and, therefore, British businesses: “Although nearly half, 42%, of international students intend to start up their own business following graduation, only 33% of these students, or 14% of the total, want to do so in the UK” – current immigration policy is already unfavourable toward beneficial, legal migration.

Mukand (2012) found that “the globalization of labour could dwarf those from foreign aid or even the liberalization of trade and capital flows. For example, a decision by developed countries to liberalize immigration restrictions by a mere 3% could result in an estimated output gain of more than $150 billion”; simply put, the proposed policy road UKIP is signalling with its anti-immigrant, anti-multicultural and xenophobic rhetoric is poor Economics that will, undoubtedly, make Britain poorer.

The attraction for many Europeans to come here, instead of elsewhere, is to learn English; the best way to learn a foreign language is to speak it and live where it is spoken. A major reason why India has been particularly successful in exporting services is the workforce’s inherent, multilingual capabilities. The only way Britain will be able to compete effectively, develop and exporting more is to have more multilingual people and this will inevitably require native speakers of foreign languages. A hostile environment toward bilingual and multilingual peoples will exacerbate the pre-existing shortage in both the private and public sector (the military, for example, is facing a particularly acute shortage). Furthermore, if people are discouraged from coming to Britain in the first place, it will significantly diminish our cultural capital.

Finally, don’t make the mistake of thinking that the upcoming UK elections are only really relevant for Britain. Just because our economy and our armed forces make up a far smaller proportion of world output and military strength than they did previously does not change the fact that this election’s outcome will have profound, global implications. The whole world is watching closely, as was the case with Scotland’s independence referendum.

Though both Britain and the USA are doing comparatively well (growth, unemployment and all that), Britain has the added attraction of having a welfare state that Europeans (amongst others) love and, therefore, this means that many look here. The increase in migration (both perceived and actual) reflects Britain having fared better (probably also contributed to it having done better) and, thus, people the world over look to British public policy; hence, as the voting public, we have essentially been called upon to be global leaders and good leaders lead by example.

Farage has carefully exploited anti-foreigner rhetoric and UKIP is our (albeit more civilised and less extremist) version of the extremist parties that have gained popularity during these hard times. When we vote anti-foreign, it will encourage those who look to us to reciprocate. Subsequently, trade restrictions and currency wars will intensify alongside a myriad of other protectionist policies and international hostilities (all of which happened in the run-up to WWII).  We need to think carefully about the examples we set and the rhetoric we reward and, what's equally as important, the rhetoric we keep quiet about.

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Planning & Transport admin Planning & Transport admin

New ASI paper: the Green Noose

According to a new ASI paper, written by Tom Papworth, and entitled The Green Noose, we can blame the Green Belt for the UK's housing woes. It says:

• Despite academics, politicians, and international organisations recognising that the UK is facing a housing crisis, it is currently far less developed than many imagine, especially when compared to similar countries. Indeed, only two members of the EU 27 have less built environment per capita than the UK: the Netherlands and Cyprus. 90% of land in England remains undeveloped, and just 0.5% would be required to fulfil this decade’s housing needs.

• Green Belts are not the bucolic idylls some imagine them to be; indeed, more than a third of protected Green Belt land is devoted to intensive farming, which generates net environmental costs.

• The concept of ever-expanding urban sprawl is mistaken and pernicious. In addition, Green Belts can give rise to “leap-frog development”, where intermediate patches of land are left undeveloped due to restrictions, a phenomenon indistinguishable from what many understand urban sprawl to be.

• By encouraging urban densification, Green Belts take green space away from those places where it is most valued. Each hectare of city park is estimated to be of £54,000 benefit per year, compared to a mere £889 per hectare for Green Belt land on the fringe of an urban area.

• There are substantial welfare costs of Green Belts. They have made accomodation more expensive and smaller, increased costs for businesses (especially relative to other European cities), and have contributed to the volatility of house prices.

• The avenue of reform we favour is the complete abolition of the Green Belt, a step which could solve the housing crisis without the loss of any amenity or historical value – if only politicians and planners had the courage to take it.

• Failing this, we conclude that removing Green Belt designation from intensive agricultural land would also enable the building of all the housing required for the foreseeable future, and could help ameliorate the catastrophic undersupply of recent decades.

• In the short term, simply removing restrictions on land 10 minutes’ walk of a railway station would allow the development of 1 million more homes within the Green Belt surrounding London alone.

Click here to read the full press release.

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Economics Tim Worstall Economics Tim Worstall

A rousing defence of private property in The Guardian of all places

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This is all rather Dr. Johnson in a way, as with seeing a woman preacher. It's that thing with a dog walking on its hind legs: not to see the thing being done so well but to see it being done at all. So it is with Aditya Chakrabortty and his tale of how some council house tenants in East London are being railroaded.

What is powerlessness? Try this for a definition: you stand to lose the home where you’ve lived for more than 20 years and raised two boys. And all your neighbours stand to lose theirs. None of you have any say in the matter. Play whatever card you like – loud protest, sound reason, an artillery of facts – you can’t change what will happen to your own lives.

Imagine that, and you have some idea of what Sonia Mckenzie is going through. In one of the most powerful societies in human history – armed to the teeth and richer than ever before – she apparently counts for nothing. No one will listen to her, or the 230-odd neighbouring households who face being wrenched from their families and friends. All their arguments are swallowed up by silence. And the only reason I can come up with for why that might be is that they’ve committed the cardinal sin of being poor in a rich city.

It's as if the assembled plutocrats of the planet are descending to feast upon the bones of good honest working class Brits, isn't it? So, who are the villains here?

Sonia lives in one of the most famous landmarks in east London. The Fred Wigg and John Walsh towers are the first things you see getting off the train at Leytonstone High Road station; they hulk over every conversation on the surrounding streets and the football matches on Wanstead Flats. Since completion in the 1960s, they’ve provided affordable council homes with secure tenancies to thousands of families. Named after two local councillors, they are a testament in bricks and mortar to a time when the public sector felt more of a responsibility to the people it was meant to protect, and exercised it too.

And so they must go. Last month, Waltham Forest council agreed on a plan to strip back the two high-rises to their concrete shells, rebuild the flats, and in effect flog off one of the towers to the private sector. In between Fred and John, it will put up a third block.

Difficult to think of a more rousing argument in favour of private property and against council housing really, isn't it? If you owned the home you lived in, or if the tenants collectively owned the building (as is common enough in buildings of flats) then they, the people who lived in that housing, would be able to control what happened to that housing.

Given that they don't, that it is owned by the local council, they have no such rights. They are subject to the whims of whatever turnips in red rosettes the local Labour Party put up for election. This isn't an argument in favour of "democratic control" of housing or anything else, is it? It is however a very strong argument in favour of private ownership, that private ownership which protects property from such "democratic control".

Chakrabortty doesn't quite manage to spot that logical conclusion to his argument, so we cannot say that he's done it well. But it is still interesting to see this argument in The Guardian, as with the dog on two legs.

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Liberty & Justice Charlotte Bowyer Liberty & Justice Charlotte Bowyer

The dark threat of the Snooper's Charter

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Just hours after marching alongside world leaders in Paris in the name of liberté, David Cameron backed the revival of the Snooper’s Charter in terms little short of terrifying.  Free speech, it now seems, is only acceptable only when it can be accessed and reviewed by the state. Speaking to ITV, Cameron said:

…ever since we faced these terrorist threats it has always been possible, in extremis, with the signature of a warrant from     the home secretary, to intercept your communications, my communications, or anyone else, if there is a threat of terrorism. That is applied whether you are sending a letter, whether you are making a phone call, whether you are using a mobile phone, or whether you are using the internet. I think we cannot allow modern forms of communication to be exempt from the ability, in extremis, with a warrant signed by the home secretary, to be exempt from being listened to.

The Independent claims that restricting communication to interceptable channels would not just hit typically ‘nefarious’ spaces like the dark web, but any service that encrypts user’s data in a way which shields it from security services. This could include billion-dollar chat service WhatsApp, along with others like Snapchat and Apple's iMessage. Such companies would have to acquiesce to government requests for data and re-writing their software if required, or risk outlaw and the persecution of their users.

This would not be the first time that a government surveillance programme closed down commercial ventures. In 2013 Edward Snowden’s email provider of choice Lavabit chose to close its doors rather than be forced to install surveillance equipment on their network and hand over private encryption keys to the US Government. Silent Circle suspended their email service shortly after.

It’s difficult to predict the impact to the UK’s digital economy should Cameron press on in this vein. Compromising on privacy is something which WhatsApp in particular is unlikely to do. In November, it switched on end-to-end encryption for Android devices, with plans to extend this all 600m+ of its users. Growing up in communist Ukraine, for co-founder Jan Koum user’s privacy is not just a feature, but a defining characteristic of the product:

I grew up in a society where everything you did was eavesdropped on, recorded, snitched on….Nobody should have the right to eavesdrop, or you become a totalitarian state -- the kind of state I escaped as a kid to come to this country where you have democracy and freedom of speech. Our goal is to protect it.

Cameron’s newly- resurrected charter not only challenges a service used by hundreds of millions across the globe, but stands as a barrier to the very value of free expression western politicians profess to uphold. It is more than just a tool to listen in on ‘the bad guys’. And it doesn’t just affect the criminals and extremists, for it strikes right at the heart of our digital infrastructure and dictates exactly what channels of (monitored) communication British citizens are permitted to use to exercise our apparently hallowed right to free speech.

However, whilst the world’s typical, centralized communication industries are at risk from the government’s surveillance fetish, new forms of decentralized, distributed software and communication channels ­­­– which have no centralized store of user information or cryptographic keys to raid­– would be near impossible to bring to heel.

As ASI Fellow and COO of Eris Industries Preston Byrne explains:

David Cameron has said he wants to 'modernise' the law. I think he fails to understand just how out of date his worldview is. The only way you can shut down encrypted distributed networks today is to either arrest every person running a node and ensure that the data store containing a copy of that database is destroyed, or shut down the internet. Curtailing free association and private communications in the manner proposed is a battle the government is going to lose.

Banning end-to-end encryption will do nothing to prevent the technology from falling into the wrong hands - as any encryption technology worth a damn is open-source, and freely available to all - but will do a great deal to criminalise entirely reasonable measures taken by ordinary people to protect what private lives they have left.

To hang the case for a significantly reduced private sphere off the back of last week’s attacks is opportunistic, unpleasant, and distasteful. The tragedy in France has far more to do with issues of free speech, toleration and extremism than national security. The perpetrators of the French attacks were already known to intelligence officials, as was also the case in the 7/7 bombings and Lee Rigby’s murder. Hardly any acts of terrorism are by relative unknowns, who might have been identified were surveillance laws just that bit wider-ranging. Granting further powers and bigger budgets to security forces might show how ‘serious’ we are that ‘something must be done’, but arguably let agencies off the hook in terms of actually following up on already acquired intelligence.

No doubt Cameron has underestimated the scale, if not the significance, of what he proclaimed yesterday, and his attempt to create a surveillance-friendly communications ecosystem will be futile. But his words represent a threat in many ways much larger and darker than the terror he pledges to protect us from.

 

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