Immigration is key to solving the productivity crisis

Productivity across the UK is stalling and until recently inflation was outpacing real wage growth. People have been facing worsening living standards, as people have less real income. Currently the UK falls significantly behind the levels of productivity in similar countries. Between 1997-2007, average productivity grew by 2.1% each year: only 0.01% behind America. But from 2007-2017, the UK has only experienced an average of 0.2% productivity growth per year, falling behind America, Germany, France and more. The financial crash of 2007 is partly to blame for a decrease in productivity, as experienced by all countries worldwide, however the UK has not recovered as well as other countries and this can be put down to poor policies which do little to boost our productivity.

An example of how much the UK is trailing behind Germany in terms of productivity is that in Germany, people clock off on a Thursday afternoon but still produce the same amount as people in England doing a full week’s work.  This shows how vital it is for the UK to boost productivity, and unless we do this the only way to raise incomes would be to increase people’s hours of work: something no one wants.

Immigration is a key policy area which will need to be addressed to increase productivity. Many overlook the advantages of skilled migrant workers in an economy as it is argued that they “steal jobs” from UK citizens. It is also claimed that migrants are a burden on our economy and welfare system. In reality, migrants do not crowd out employment (the so-called 'lump of labour' fallacy) and many take up lower-skilled jobs that UK citizens do not want to carry out.

Furthermore, migrants pass on knowledge to native workers and are often extremely hard-working – they want to earn a good living just like anyone else. On the whole, the economic impact of EU migrants on the UK has been positive. Freedom of movement has increased income for the vast majority of workers and in 2011, EU migrants paid £1.5 billion more into the public purse than they took out, unlike the average British citizen who was a net drain.

Therefore it is clear that migrant workers are a vital part of our economy. We must ensure that during Brexit negotiations we keep this in mind. Foreign workers cannot be deterred due to mounds of bureaucracy nor can foreign students be penalised. Policies need to be put in place by our government to allow free movement to continue if our economy is to become more productive. Also we need to allow workers to come into our economy to fill occupational shortages. If we have occupational shortages and no migrants fill the places due to government policies creating a barrier to their entry, we will have failed in boosting productivity and becoming a more diverse, rich society.

The bottom line is that a boost in productivity will increase our living standards and immigration is a key factor to helping us along the way. Skilled migrants do contribute to the economy and to a much larger extent than many are willing to accept.

Caitlin Keenan is the winner of the Under-18 category of the ASI's 'Young Writer on Liberty' competition.

After all this time we still don't seem to be getting sex right

To get the joke out of the way, if we're not getting sex right we should speak for ourselves, everyone else seems to be enjoying it all immensely. But that's not quite the point we wish to make. We, societally, still aren't getting the times when sexuality matters, and when it doesn't, quite right.

Civil servants overseeing a controversial policy which forces doctors to ask all patients about their sexuality are unhappy answering the question themselves, Government documents show.

From April next year, all NHS doctors and nurses will have had to enquire about their patient’s sexual orientation, regardless of its relevance to the illness.

The policy has been criticised on the basis it risks making people uncomfortable and damaging the doctor-patient relationship.

Now, a report by the Department of Health and Social Care (DHSC) reveals that more than a third of officials did not feel able to disclose their own status when asked.

The point here being that sexuality does matter at times - and not just when looking for a date. Certain forms of penetrative sex - whatever the sex of the recipient - is useful medical information. Being a lesbian might lead to a certain efficiency in the use of birth control. None of which has any relevance at all to how well the claims clerk at the welfare office deals with matters.

The same is true of such matters as race. The melanin enrichment of our accountant matters not a damn, a West African genetic inheritance is most useful to know when investigating sickle cell anaemia.  

That is, we're getting it all wrong about sex, gender, race and the rest of the distinctions we obsess over.  In vast areas of life none of them matter. Thus the counting of them in those areas is not just unimportant but shouldn't be done. On that Cowperthwaite basis, that if the information is collected then some damn fool will just try to do something with it. Yet at the same time there's a prissiness about collecting relevant and useful data about differences when they do matter.

Civil servants are quite right to insist that private matters are private matters. We're not enhancing the efficiency of doctoring by insisting upon the same point.   

Still failing Chesterton's Fence over plastics

Varied of the environmentalists are still not grasping the basics of matters. Here it's Lucy Siegle talking of plastics:

The injustice is not only to the planet. Ninety per cent of the cost of disposal of plastic is borne by consumers and just 10% by the manufacturers and retailers that impose it on us in the first place.

There's no one here but us humans to be carrying the costs of anything at all. If we mandate, as an example, a tax upon the production of plastics then that is in the first instance paid by those manufacturers. But of course that all then becomes incident upon consumers as prices rise. No, not because manufacturers raise prices to pass on that cost, but because those that don't go bust.

But this is the real error:

It’s pretty clear to everybody that plastic is a dumb material to pick for everyday use.

So why are we so using it then? Why is it that since their inventions plastics have been used to do near everything? To replace paper, cardboard, wood, metals as the material of choice? 

Chesterton's Fence is to insist that unless you know why something was done you cannot know whether it should still be done. Without asking why we all use plastics, why we started to, we cannot answer the question of whether we should still be using them.

Sure, plastics have costs but then so does getting up in the morning. What we need to know is what are the benefits? Further, do they outweigh the costs? Until we know that last we've no idea at all whether the crusade against them is worthwhile or even useful or not. 

Venezuela Campaign: Hungry for change & hungry full stop

Since Hugo Chavez declared his ‘Bolivarian Revolution’ in 1999, Venezuela has become entirely dependent on imported food. In 2014, it was estimated that 70% of all goods, including food, were imported from abroad. Several years’ mismanagement of Venezuela’s key oil industry has crippled the country financially, especially since oil prices halved in 2014. Price controls on basic foodstuffs, as well as strict controls on the ability to convert bolivars to dollars, has made food unaffordable for most Venezuelans. Many Venezuelan companies cannot afford to produce food for the price set by the state, and have simply gone out of business.

As an example of just how severe the crisis has become, the monthly minimum wage can feed a family for less than a day. Around 10 million Venezuelans, or a third of the population, are on the minimum wage. Even for those who earn more, living has become a daily struggle: one would need 55 times the minimum wage to feed a family for month.

The impact on the country’s health has been devastating. Venezuelans reported losing an average of 8kg in 2016, and 11kg in 2017; more is expected as hyperinflation destroys Venezuela’s currency. Around 8 million Venezuelans only eat two meals or fewer a day. Children under 5 are most at risk during this crisis: the charity Caritas have estimated that half are suffering from malnutrition or are at severe risk. In 2018 alone, 300,000 child deaths have been linked to malnutrition.

Most Venezuelans are now anemic as their diet lacks the iron usually found in meat, green leafy vegetables and maize flour, which have all become increasingly scarce. Medical conditions linked to malnutrition are on the rise, and Venezuela’s hospital’s are unable to cope as they too suffer from shortages made worse by an embargo on international aid.

This is happening now. The Venezuelan people are running out of ways to cope with the severe lack of food. Whatever needs to be done, must be done soon.

More information on the Venezuela Campaign can be found on their website. 

If only people bothered to check the facts

Rhiannon Lucy Cosslett, writing in The Guardian, wants to tell us all that having a child in today's Britain is a very difficult thing. House prices, low wages, the cost of childcare, the list of reasons not to goes on. This leads to our low fertility rate:

 These are quite some mixed messages. The Office for National Statistics reports that the birthrate has reached a 12-year low as couples have fewer children or defer having them until later. It has been falling since 2012, while the average number of children expected to be born to each woman (called the fertility rate) has fallen to 1.76. This, the Times reports, “coincides with a long squeeze on wages and weak pay growth after the 2008 financial crisis, and is likely to reflect sustained pressure on household incomes”.

There is, we are told, a solution to this. What we shouldn't do:

Brexit is only likely to decrease workers’ rights. There is so much focus on emulating and trading with the US, but doing so is hardly likely to improve our birthrate. It’s one of the worst countries in the world for maternity law.

The US fertility rate is almost exactly the same as that in the UK. And what we should do:

At the same time, we should recognise that in terms of supporting and encouraging would-be parents and new parents, the UK remains well behind other European nations. It is by following their models that we will see families thrive.

Well, yes.

In 2016, the total fertility rate in the EU-28 was 1.60 live births per woman

The UK's (and that of the US) fertility rate is above that of the rest of the EU, that place we're supposed to emulate so as to make it easier for people to have children and thus raise our fertility rate.

We really are liberals around here and we're entirely fine with people having different opinions to our own. But we begin to object when they decide upon a different reality.

More than just a linguistic point, optimum means best, not fastest

This is very much more than just a linguistic little quibble, this is actually a vital point about the economy and the world. Optimum does not mean fastest - nor highest, cheapest, flattest nor any other -est than best.

Just 44 postcodes out of 1.7m are using optimum broadband speeds, Ofcom figures show.

Analysis of internet speeds suggests that a tiny minority of British households are accessing the "gigabit speed" broadband, which is more than 20 time faster than the current average. 

Best here meaning the least bad combination of the various different attributes of whatever it is that we're talking about.

Yes, the FT's map of broadband speeds is interesting. But to say that gigabit speeds - meaning fibre to the door - is optimum is to miss entirely that meaning of best.

What is the cost of gigabit speeds? What is the value of having gigabit speeds? Equally, what are the costs of having slower speeds - say using ASDL - and the benefits of doing so? Actual research here seems to be a bit (sorry) out of date here but we can show that 2 Mbits definitely increases economic growth, anything more than that we're just projecting the effects from that earlier proof.

The larger point of course being that in the economy, as with life in general, we've always got some number of competing interests. Price/performance being only one such but an important and obvious one. That McLaren  is definitely faster than the Fiesta and definitively more expensive. It's not obvious that either are optimum - depends upon the task. One would be better for doing the shopping, the other perhaps to impress.

So it is with broadband. Faster is nice, sure, but we've still got to ask ourselves what the marginal benefit is as compared to that marginal cost. That's the only way we can work out what is the optimal solution. To forget this would mean that we'd festoon the country with fibre to no very good gain.

And no one would want to do that, right? 

The National Health Service: A Cultural U-Turn

Contemporary Britain has redefined and extended the roles of the National Health Service from simply treating illness to its prevention, educating the masses and extending life. In its plight to meet all of these criteria, or face torrents of criticism, the NHS has reached a stalemate on its 70th anniversary. Despite receiving £116.4bn in funding (2015/16), it is under fire for shortages of staff and beds as well as prolonged waiting times.

Now, there are calls to modify the NHS from the likes of Mark Pearson (the OECD’s Deputy Director of Employment, Labour and Social Affairs). Others, such as Dr Kristian Niemietz of the Institute of Economic Affairs, have advocated the complete discontinuation of the NHS and its replacement with universal healthcare. The latter may not be necessary if significant changes are made to British attitudes towards health and the norms and practices within medicine.

Increasing the accountability of British citizens by adopting an insurance-based healthcare system is a possible solution to the high demand hospitals face, especially the pressures felt during the winter months. If people have to make insurance payments to receive treatment, the financial commitment is likely to cause a shift in British attitudes towards health, i.e. people will be more compelled to maintain their health without professional medical intervention.

Lifestyle-related illnesses in particular would see a significant decrease. Giving people more personal responsibility for their health could be the key to increasing general health by establishing a more health-conscious culture in Britain, reducing long-term costs to the NHS.

Switzerland exemplifies this: each individual pays insurance premiums worth up to 8% of their annual income. As of 2014, Swiss people are spending an average of 6% of their income on healthcare (this is predicted to increase to 11% by 2030) compared to 5.7% of taxable income in the UK. The system is aimed at promoting health, reducing costs, and encouraging each individual to be responsible for their own health.

Right now the NHS is hampered by the mantra that it is truly “the envy of the world” and any reform from its current model would amount to dismantling Nye Bevan’s legacy.  If this idea is maintained, an insurance-based system will be politically infeasible.

This is not to say that paid healthcare, co-pay or insurance systems would result in a utopian society in which nobody is sick - for instance, diabetes is equally prevalent in Switzerland and the UK (approximately 6%).

But sustaining life is arguably the most vital function of health services, and it appears to be a greater strength of insurance-based healthcare. Switzerland has one of the highest life expectancies in the world and one of the lowest mortality rates in Europe. Notably, the 2015 Euro Health Consumer Index described Swiss healthcare as excellent.

In light of this, the extent to which the NHS can be considered “the envy of the world” becomes questionable. Comparisons with Switzerland and other European nations suggest that British healthcare may not even be the envy of the continent, let alone the world.

At this point in time, the state of the NHS is undeniably inadequate and therefore cannot continue; adult five-year cancer survival rates in the UK are often lower than the European average. For colon cancer, rates were up at 58% by 2007, whereas in the UK, rates were at 52%. Even if sweeping reforms currently lack support from the government, the question of the possible changes that could be implemented in the meantime remains. There are various incremental reforms that could significantly improve outcomes. A starting point for this could be rectifying attitudes and practices deeply ingrained in clinical settings.

Perceptions of accountability must be revised among medical staff. Matthew Syed’s Black Box Thinking addresses the issues of failure and blame at length. Syed makes pertinent comparisons between the industries of healthcare and aviation. While the Aviation Safety Network has reported 2017 to have been the safest year in aviation history with only 44 fatalities in 10 airliner accidents, a report has found that medication errors alone could be causing over 22,000 deaths in the NHS as of 2018.

Syed attributes this difference to the stark contrast between the procedures following accidents in the two industries. When a patient dies unexpectedly, this is met with blame and back-covering; Syed used the real-life story of a woman who died in a routine operation as an example of this. When a plane crashes, while the media reacts with blame and outrage, the aviation industry itself responds with a full analysis of the jet’s black box and body. In fact, Syed goes as far as to suggest that aviation investigators welcome mistakes, which might sound morbid, but he is referring to the opportunity to improve a system when its flaws are exposed.

Elsewhere this approach is going to become more and more important. When cars crash because of human error the tragedy is personal but few people learn lessons from what went wrong. When an automated car crashed in February killing a pedestrian the entire fleet of self-driving cars learned lessons.

This is applicable for our healthcare system; the NHS needs to establish a climate in which staff are able to come forward with their errors. Those very same mistakes, if exploited fully, are the route to improvement. But only if the incentives are right.

Another area for cultural reform in the NHS is the need for an openness to openness, if you will. Interdisciplinary collaboration can prove to be crucial in the progression of any organisation. For instance, the use of graded assertiveness, also known as the P.A.C.E. model of communication, is now commonplace in nurse training. P.A.C.E. (which stands for Probe, Alert, Challenge, Emergency) addresses what social psychologists call the legitimacy of authority - in the hierarchy of staff in a hospital, nurses are liable to see doctors as superior to them and therefore obey them unquestioningly, irrespective of what they think. Graded assertiveness provides them with a method of communication that can enable them to overcome the intimidation they may experience when attempting to express themselves with urgency in high pressure scenarios.

Introducing P.A.C.E. required honesty from the healthcare industry regarding the existence of a hierarchy and the fact that under pressure, doctors can become error-prone. Similarly, a candid evaluation of the predictive value of the NHS is required.

Open Healthcare has been proposed as a method of increasing the predictive abilities of patient records by combining them with data from healthtech companies and giving patients greater access to their personal records. It is thought that patterns can be drawn from the collated information, giving a greater insight on the causal relationships between genes, lifestyle habits, and illnesses, which could better inform future diagnoses and treatments. We could live longer and happier lives. With the ONS estimating 24% of deaths could be postponed through lifestyle choices, Open Healthcare (and openness in healthcare) could be key to allowing people to make better informed decisions over their own lives.

Spending more and more on an inefficient system in the hopes of achieving miraculous change is comparable to adding water to embers and expecting an inferno. Funding is imperative if some semblance of the NHS is to continue, but there has to be difference in the way everyone (from patients to bureaucrats, from doctors to contractors) approaches healthcare in the future.

Nonetheless, the necessary change may not be as drastic as some suggest, particularly critics advocating the total dissolution of the NHS. It is more than likely that the seemingly insignificant things, like nurse-doctor interactions, can collectively overturn an entire system, yet leave the elements people want – free services at the point of use – intact.

Fadekemi Adeleye is a research intern at the Adam Smith Institute.

In Defence of Uber

It hasn’t been a great 18 months for Uber. Both Transport for London and Sadiq Khan indicated that they would prefer unions in the ongoing dispute; even the European Court of Justice waded in with attempts to regulate the disruptor.

Despite the fact that Uber had been used over 2 billion times by the end of 2017, policymakers seem determined to inhibit the company’s growth.

However, regulating Uber will not only have a detrimental effect on consumers, but also on its workers and the future of the gig economy in general. The ASI’s Sam Dumitriu opposed regulating Uber even before the feeding frenzy, warning that calls to treat drivers as employed staff rather than self-employed sole traders would harm those who are “looking for increased flexibility, the ability to be their own boss, to choose their own hours, and to be able to reject any job” – and that’s not to mention consumers who often rely on Uber’s lower pricing and tracking tech to ensure a safe ride home from work or a night out.

Among those who criticise Uber, there is often a lack of consistency in their arguments. It is unreasonable to complain that Uber (or similar gig economy disruptors) are working to the detriment of workers’ rights. As I’ve previously mentioned, drivers have increased flexibility and set their own terms. They dictate their own office space – you won’t see Uber drivers working 15-hour days in dubious conditions unless it’s their choice to do so, and if it is, they can earn an average of £16 an hour for it. Some may claim that leaving Uber unregulated has led to an increase in sexual assaults – this is not true. Despite some issues, Uber is the safest way to travel on the road and has been linked to reductions in assault and the harms of drink driving. Even pro-green campaigners struggle to make complaints – Uber tends to fill its cars, meaning less congestion and less pollution. Additionally, Uber plans to send a fleet of electric cars into British streets in the near future.

Essentially, Uber epitomises disruptive technology and the gig economy, which we should be welcoming, not rejecting. The benefit of a free market is that it allows companies like Uber to innovate and drive up standards through competition.

Green, profitable employment and higher standards of consumer safety: the fact that all this is available for a lower price than that of a black cab is proof that the gig economy (and, whisper it, capitalism) is still working – provided we let it. The government should do so, and listen to ordinary taxpayers and workers rather than taxi unions.

Matt Gillow is runner-up of the 18-21 category of the ASI's 'Young Writer on Liberty' competition. You can follow him on Twitter here.

Good intentions and the road to hell

Saint Bernard, the 12th Century Abbot of Clairvaux in France, is cited as saying ‘the road to hell is paved with good intentions’. Legislators often forget (or ignore) this saying when they introduce regulation and legislation, often as a knee-jerk reaction to some perceived problem.

Regulation is often the result of good intentions: the apparent need for legislators to send moral messages and to save people from themselves and their own choices.

A stark example of ill-considered regulation is from America’s attempt to prohibit alcohol in the early 20th Century. Urged on by the Temperance Movement and the Anti-Saloon League, who perceived alcohol and drunkenness as a national sin, the United States banned the production, movement and sale of alcohol. Within minutes of prohibition taking effect in January 1920, armed criminals started raiding warehouses to steal whiskey.

Americans discovered that there was a big difference between using the law to prohibit something and actually enforcing that prohibition. The illegal manufacture and sale of alcohol boomed. Criminal gangs expanded, corruption blossomed with police and politicians being paid to turn a blind-eye to various profitable, illegal activities.

As Mafia-style gangs expanded, so did their criminal activities, including prostitution and gambling. Al Capone was estimated to be earning $60 million a year from his criminal operations.

As the profit of criminals went up, revenue to the government decreased significantly. Washington State University estimated that in 1914, the government income from alcohol tax alone was $226 million. Rather naively, it was believed that the reduction of revenue from alcohol would be offset by increased sales of soft drinks. This never happened.

Alcohol production had been a big business in America, with factories and large workforces employed. Overnight these factories closed and thousands of workers were made unemployed. The negatives significantly outweighed the positives and prohibition itself was abolished 13 years later.

The lessons from prohibition do not seem to have been learnt. The UK’s Misuse of the Drugs Act 1971 has not prevented the large scale misuse of drugs. It has allowed untaxed and unregulated substances to be consumed by vulnerable people. The State of California estimates that it could raise $643million annually following its recent legislation of recreational cannabis. However, in the UK, drug supply is now often just one source of a vast income enjoyed by high-level criminal organisations.

Nobody would suggest that it would be wise for crack cocaine to be freely available to be consumed by all. But generally speaking, governments need to trust their citizens to do the right thing.

Emmie Lowes is runner-up of the Under-18 category of the ASI's 'Young Writer on Liberty' competition.

Lord Blencathra is only half right here

It is obviously pleasing to be able to note a politician who is at least half correct - given, you know, the average propensity for truth and knowledge among that tribe. But it is still only half right, sadly:

He said: 'It is nonsensical to retain these grossly excessive calorie levels now. What's worse is they are being exceeded.'

He added: 'We seem to be waiting for a magic pill so we continue our gluttony and lazy lifestyle and hope that the NHS will fix it for us without having to change our behaviour one iota.' 

'If we scoff more calories than we burn off then we get fat and obese. Obesity is not an illness, it is a lifestyle choice.

 From Hansard, it's this part which isn't correct:

We are creating a nation of fat, idle people who will bankrupt the NHS, and we should have the courage to say so in blunt terms. Our strategy must be threefold. First, it must tax excessively sugary foods—all of them, not just some—and penalise excessively large food items. Secondly, calorie intake guidance must be revised downwards to recognise our indolent, lazy lifestyle. We need constant campaigns on that. Planning guidance should force councils not to have high streets full of takeaway food shops; research suggests that locations with supermarkets provide better diets than streets without such shops. Thirdly, we must have a uge campaign to get the whole nation exercising. Exercise alone does not compensate for overeating but it has a part to play. I too commend the Daily Mile initiative, which gets children exercising for a mere 15 minutes per day. It should be compulsory in all schools. My wife has tried to force me to do it as well.

There is no easy answer, but at the moment I do not think we are even asking the right questions.

That list of what must be done follows from the incorrect assumption being made. That obesity costs the NHS money. It doesn't. As we've pointed out before:

The researchers found that from age 20 to 56, obese people racked up the most expensive health costs. But because both the smokers and the obese people died sooner than the healthy group, it cost less to treat them in the long run.

On average, healthy people lived 84 years. Smokers lived about 77 years and obese people lived about 80 years. Smokers and obese people tended to have more heart disease than the healthy people.

Cancer incidence, except for lung cancer, was the same in all three groups. Obese people had the most diabetes, and healthy people had the most strokes. Ultimately, the thin and healthy group cost the most, about $417,000, from age 20 on.

The cost of care for obese people was $371,000, and for smokers, about $326,000.

Yes, those are American numbers but they apply here too.

We thus have the proof of Hayek's contention, that government provided health care will mean government trying to run our lives so as to suit the government health care system. But worse than that we've also got the basic arguments being based upon untruths. Fatties save the NHS money, thus trying to reduce the number or wideness of fatties to save the NHS money just doesn't work. That even despite whatever concerns we might have about healthcare serfdom.