It's fun how the Venezuela explanation has changed, isn't it?
Those of us rich in maturity will recall when Venezuela was the next great hope of the progressive left. David Sirota, Mark Weisbrot, Owen Jones, Jeremy Corbyn, Syriza, the Podemos lot, all were united in insisting that this vastly greater government control of the economy and the distribution of its rewards was the way forward for us all.
That has, to be fair to all of them, rather run into that brick wall of reality. They’re no longer all saying that we all should be doing it that way.
But the explanation now is that obviously, that’s not socialism nor even progressivism. The story now is that it’s simply a kleptocracy.
Well, OK, that at least has the merit of being true.
But it then runs smack into that brick wall of reality again. So, we grant the government vastly greater power over the economy and the rewards available in it. How do we stop that becoming a kleptocracy? The answer that we are pure as they are not does not work. For the moment we do grant that power then the kleptocrats will infiltrate and then become the government, won’t they?
Think of this the other way around for a moment. All such progressives do indeed insist that if and when the capitalists gain control then they are akin to kleptocrats, the monopolists will simply rip off the people. We liberals agree actually, which is why we’re so insistent upon there being competition to limit if not expunge that ability.
OK, if people gain the power to rip everyone off then they will. Or, the power to do so will be colonised by those who wish to.
Thus that argument that the Bolivarian Revolution has been colonised by the kleptocracy isn’t a useful excuse, for it’s the original granting of that power to government which causes the kleptos to colonise said government.
Don’t want the government to be run by thieves? Then don’t grant government that power that thieves find so attractive that they’ll work to become the government. This works whichever brand of thieves you care to worry about, crony capitalists or socialists.
Mssrs. Sanders and Varoufakis want to tell us where it all went wrong
Bernie Sanders and Yanis Varoufakis are insistent that the entire global economy took a serious wrong turn some 40 odd years ago. Therefore progressives must gird their loins and fight to overturn the extant world order.
We disagree, obviously enough, for we’re liberals and that world out there took a more liberal - classically liberal - turn those decades back. We disagree on theory that is.
However, we also disagree on the basis of empirical reality. The great claim of the progressives was always that they cared about, concerned themselves with, poverty in a manner in which classical liberals did not. We were the ones accused of preferring theory about liberty and freedom over the pernicious effects they had as a result of an uncaring attitude towards reality.
Well, yes, except think of the effects of that last 40 odd years of this New World Order. Absolute poverty has fallen from some 40% of humanity to under 10%. The best predictions we’ve got are that it will entirely vanish by 2030. This has indeed been brought about by that neoliberal globalisation which is being so complained about.
We do think the grand problem is and has been that absolute poverty. We revel in the fact that is has fallen and is falling. The idea that we should change horses just as the finish line comes into sight strikes us as absurd.
Global economic policy of the past 40 years, that system so being whined about, has just produced the greatest fall in human poverty in the entire history of our species. We cannot see that this is a failure requiring a change in policy. Mssrs. Sanders and Varoufakis disagree - what say you?
The ASI at Tory Conference: Rebooting Consumer Capitalism, Cannabis and Saving 1 Million Years of Life
As usual, the ASI will be tackling vital but often neglected issues at this year’s Conservative Party Conference in Birmingham. We're hosting three events inside the secure zone (that means to attend you'll need a conference pass): one on Sunday and two on Tuesday.
Our Sunday panel (4pm-5pm in Exec Room 2 of the ICC) asks what lessons the UK can learn from abroad on reforming our approach to cannabis. With the coming legalisation of medical cannabis following public outcry over the plight of children being denied access to life-changing treatment, Canada legalising recreational cannabis, and increasing calls for the UK to follow suit, we’ll be examining the arguments for parting ways with prohibition that international experience provides.
The UK’s prohibition of cannabis jeopardises children’s safety, encourages gang violence and leaves millions in the dark about what they’re taking. This approach has failed and the public know it. More Britons support a legal, regulated cannabis market than oppose it. We will ensure evidence, not hyperbole, guides the debate around recreational and medical cannabis legalisation. Chaired by our resident vice expert Daniel Pryor, our speakers are George Freeman MP, Crispin Blunt MP, VolteFace’s Paul North and Hanway Associates’ George McBride. For more info, click here.
On Tuesday, we’re spoiling you for choice by having two panels occurring simultaneously from 4pm-5pm. First, we’re partnering with Octopus for a session on rebooting consumer capitalism in the ICC’s Executive Room 8. There is growing public sentiment that the retail energy market isn't working, water firms aren't delivering, rail franchising is failing, and broadband availability is too low. These industries affect nearly everyone in their daily lives. Competition should be at the heart of any solution. Streamlining the sector regulators could minimise producer capture, cut bureaucracy and simplify regulations. The innovation spurred on by Open Banking could spread to other sectors if consumers are given more power over their data. Various reforms to the rail franchise system can promote a greater role for on-track competition, delivering on the promises of choice and better service.
We will discuss the most effective reforms that could restore the public’s trust in these vital sectors, and consumer capitalism at large. Chaired by our Head of Research Sam Dumitriu, speakers include John Penrose MP, Chris Hulatt of Octopus, Bim Afolami MP, Fingleton Associates’ Eleanor Mack, and Oliver Wiseman (Editor of CapX). For more info, click here.
The second Sunday panel focuses on Britain’s vaping revolution and how we can save over one million years of life with the right policy reforms. Vaping is at least 95% safer according to Public Health England, and current evidence suggests that it doesn’t act as a gateway to smoking. But reduced-risk nicotine products could be even better. Whatever your view of Brexit, it presents us with an opportunity to become a world-leader in liberalizing e-cigarette and reduced-risk tobacco products regulation.
Right now, the EU’s Tobacco Products Directive limits choice, drives up costs, and severely restricts the ability of vaping companies to advertise their products. Current advertising restrictions are especially harmful: many smokers simply haven’t been exposed to what vaping actually is, or readily accept the myths that surround it. Plain packaging rules prevent firms from inserting information on switching to less harmful products into cigarette packets. All of this is up for debate and has the potential to be changed. At Party Conference, we would therefore aim to discuss the arguments for taking a liberal regulatory approach to e-cigarettes and reduced-risk products for the sake of public health, as well as consumer choice. Confirmed speakers include Martin Cullip of the New Nicotine Alliance, UKVIA’s John Dunne, the ASI’s Daniel Pryor (author of our recent “One Million Lives” report) and Ems Barr of the Centre for Policy Studies (chair). For more info, click here.
Be sure to join us for what promises to be a fantastic conference!
Adult Care: Please don’t complicate things further
The Commons’ Health and Local Government Select Committees got together to help Whitehall address one of its favourite areas for prevarication: namely what to do about adult social care. Their joint Report, “Long-term funding of adult social care”, was published at the end of June but widely ignored by the media. The Minister, Caroline Dinenage, responded with an undated letter indicating they had nothing to say until their Green Paper appears this autumn.
The Report has six pages covering 33 conclusions and recommendations. Nine key issues emerge:
Surprisingly, the shortfall is modest relative, say, to the NHS: “£2.2–£2.5bn.” in 2019–20. (para. 20). But far more funding will be needed in future. (paras.73 and 88).
Care should be available for all adults, not just the elderly. (para 38). Also surprisingly, about half the adult care budget goes on those of working age.
We should aspire “over time towards universal access to personal care free at the point of delivery.” (para. 42) But “accommodation costs should continue to be paid on a means-tested basis.” Needless to say, the Citizens’ Assembly (big focus groups) favoured “free at the point of delivery”. Furthermore, the need for personal care now should be extended to include “preventative” social care. (para 77).
“Risk pooling—protecting people from catastrophic costs, and protecting a greater portion of their savings and assets.” (para. 44). This is widely agreed in principle but no one has yet found a viable solution. This Report trails a few ideas but comes to no conclusion.
“People are generally willing to contribute more [in taxes] to pay for social care if they can be assured that the money will be spent on this purpose.” (para. 46 and 93-95). This assertion is fallacious as the TaxPayers Alliance has demonstrated. “Earmarking”, as hypothecation is called here, is not acceptable to HM Treasury but it does seem to work, in the form of insurance, in Germany.
The cared-for should be able, as in Germany, to elect to receive cash to distribute to carers rather than the funding going to the caring organisations. State-funded caring should be extended to voluntary, usually family, carers. The cost of this is not quantified. (para. 78).
Paras 89-91 make suggestions as to how local authorities can develop new income streams to provide plenty of money for social care and everything else.
At the national level too, the Report’s proposals would make things more complicated: “Much of our evidence suggested the need for national revenue raising options to be considered alongside, or instead of, existing or reformed local government funding arrangements. Given the scale of the funding challenge facing social care, many submissions also argued that a combination of different revenue-raising options will need to be employed.” (para. 84) Some may regard these local and national money trees as optimistic.
“Given the interdependencies between the provision of health care, social care, and also public health, we recommend that in its discussions of future funding settlements the Government should consider all these in the round.” (paras. 100 - 107). “The concept of a cross-party parliamentary commission currently has the support of more than 100 MPs from all English political parties.” (paras 119-132).
This last conclusion is really the most important. Whatever the Green Paper will say, the debate will degenerate into party politics and it will not include the NHS. Above all, we need a non-partisan, intelligent analysis of health and care provision, taken together, balanced against what we can afford.
Good as this Report is in a number of respects there are three major concerns:
Armies of carers will be needed to cope with the much wider, but undefined, provision of care recommended by this Report, e.g. all age groups, preventative, free at the point of delivery. Given today’s staff shortages, low pay and unemployment, and reducing immigration, the Report should have addressed how many are needed. That said, there are ten times more people employed in the NHS than in adult social care, so switching resources from the former to the latter is worthy of consideration. And the Department of Health and Social Care has not published any strategy on the topic since 2009.
Add to those new carers at higher pay rates, the proposal to pay voluntary (family) carers. How many elderly couples now get along only because one cares for the other? The Report does consider financial sources but, somewhat naively, accepts the Citizens’ Assembly view that people will happily pay more provided it is earmarked. The UK, with 23 different kinds of tax already, is at a 50 year high level of taxation. As the TaxPayers Alliance has demonstrated, when citizens say they’d be happy to pay, they mean for others to pay. The TPA demonstration took the form of asking passers by to put a ball in the “yes” box if they agreed that they should pay more tax or put the ball in the “no” box otherwise. Those putting their balls in the “yes” box were then offered mobile phones connected to HMRC so that they could increase their contribution immediately. None did.
Whilst the Report makes interesting suggestions for increasing the funds available from local authorities, it would be much simpler to abolish the involvement of the Ministry of Housing, Communities and Local Government, which plays no part in social care, and put funding with policy in the Department for Health and Social Care. The Department for Education pays for schools so why shouldn’t the Department for Social Care pay for social care? Sharing those costs with local authorities is complex, would it be better to pick up the whole bill unimpeded by the ‘Office for Health and Care Sustainability’ recommended by the House of Lords? That would make the necessary interchanges with NHS England far simpler. Furthermore, the individuals’ contributions to their own care costs would need to be consistent across England and therefore set by the DHSC.
In conclusion, this Report further complicates what is already a very complicated matter. It hits the nail on the head when it says: “Given the interdependencies between the provision of health care, social care, and also public health, we recommend that in its discussions of future funding settlements the Government should consider all these in the round” (para. 107), i.e. the DHSC should do what its title suggests.
Yes Mr Jones, this is how democracy works
Owen Jones is complaining about how democracy works. This perhaps isn’t all that great an attribute in someone operating as a political activist.
Since the Tory government’s imposition of austerity a decade ago, councils have lost about half of their central government funding. As supposed compensation, they have been allowed to keep more of their own revenue. Planned changes may give prosperous areas a huge advantage over poorer communities by allowing them to raise more money through council tax and business rates, while having fewer social needs.
Assume that this is correct - not usually a pass we’ll give Owen. OK, what would we expect under a Tory government?
Yes, quite, we’d expect such an election result to favour those who voted for it. That’s really rather what democracy is about isn’t it? That those who gain power as a result of votes hand out sweeties to those who voted for them?
Thus a Tory government leads to those Tory areas coughing up a little less in taxation to pay for those traditionally Labour areas. Shrug.
Further, it’s not obvious that this is unfair even if it is democratic. Because one of the grander moves of New Labour, under Blair and Brown, was that those traditionally Tory areas should be handing more substantial amounts of their tax revenue over to those traditionally Labour voting areas. Those who gain power hand out sweeties to those who vote for them.
Under Labour local government finances were indeed reorganised in favour of those poorer areas. An election happens, the people have changed their minds, the policy changes. And what else should be one when the people have changed their minds in this manner?
Certainly, there are entirely useful arguments against such policy changes. But they all contain that underlying distaste for the people changing their minds - you know, hope to negate the democratic bit of democracy?
Why we might not want the State to be running things
The British state has been in charge of basic schooling for well over a century now. The grip upon the university sector has been tightening over this time period. This may not have been a good idea:
Andreas Schleicher, OECD's director of education and skills, said that while young people in England are increasingly entering the jobs market armed with a degree, many graduates remain unable to cope with even “basic” maths.
"Some people with degrees don't have the right skills - numeracy and literacy,” he said.
"You would label them as overqualified, but they may not be overskilled." Mr Schleicher went on: "I am not talking about somebody doing advanced mathematical analysis or reasoning, these are pretty basic numeracy skills.
"And you ask yourself a: how people could leave the school system with those skills, and b: then how can they make their way not only into, but even out of, higher education with a degree."
No, this isn’t about private schools and all that, the split in the British education system. Rather, we’ve a system in which the State has people in its educational clutches for 16 years and they leave unable to do sums. Yes, 16, because we start at 5, you’ll be 18 leaving school if you’re going on to university and then 3 years there.
From which we can draw one of two conclusions. The first being that, well, if after 16 years these people cannot do sums then they’re really not cut out for any form of academic education in the first place, are they? Meaning that the expansion of the universities wasn’t that good an idea, nor perhaps the raising of the school leaving age from 13 if we’re to be reactionary about it. Or, the only other alternative, if the raw talent is there but after 16 years the State can’t manage to foster or fertilise it then we’d better get some other education system pretty sharpish, hadn’t we?
Yes, sure, there are arguments in favour of the State provision of education. But all of them do rather rest upon the assumption that said State will possess at least a basic competence at the task to hand. Given the absence of any evidence to this effect all of those arguments do rather fail, don’t they?
A government insistence that education must be gained seems reasonable enough, possibly tax financing of it. But given that government seems to fail that very test of education being gained perhaps not direct provision of it. After all, vouchers for everyone might gain us university graduates who can do sums, an advance upon the current situation.
The astonishing idea that the NHS brand should be marketed abroad
It’s not April 1 so we’ve got to take this story seriously. We can see merit in the export abroad of the skills inside Britain’s medical sector - after all, it’s something that happens already, large numbers of foreigners do come to private hospitals here for treatment. But the export of the NHS itself, well
The NHS is to be exported across the world as part of efforts to boost investment in Britain post-Brexit, under controversial new Government plans.
Hospitals and heath watchdogs will be encouraged to set up franchises in dozens of countries, with profits ploughed into supporting the health service.
The NHS will be asked to target up to £7bn of opportunities a year over the next decade, in a bid to share expertise and increase investment in frontline services.
Officials hope to turn the UK's national health service into a global brand, in the same way that the BBC gains significant income from its commercial BBC Worldwide arm.
We think that people might be believing their own propaganda here. That the NHS is a world beating health service, the Very Wonder Of The World.
Actually, as all of the varied rankings show from the Commonwealth Fund through to WHO, it’s a pretty average to bad health care service. Here in Europe it’s one of the worst when we consider avoiding “mortality amenable to health care.”
What pushes the NHS up the rankings is the way the rankings are constructed, offering high marks for equality of access, free at the point of use, equitable financing and so on. The rankings reflect, as they always will, the prejudices of those constructing the rankings.
But all of that which is considered admirable about the NHS is based upon the idea that it is health care free at the point of use funded by the British taxpayer. Everything else about the NHS, standards of treatment, effectiveness of them, waiting times and so on are lower than average to pretty bad at best.
What’s the one thing we cannot export? Or at least we rather hope no one tries it - that funding to provide health care free at the point of use using the resources of the British taxpayer. So, what is this NHS that we’re going to be exporting then? There’s not really an NHS to be exported, is there?
We can hope we suppose. That this is all a plan. Within that financing structure there are dedicated and skilled people doing excellent work. By exporting those skills and expertise to where the financing structure cannot exist we should be able to prove that, somewhere, within the NHS is an actually world beating health care service.
Then all we’ll need to do is free those skills and expertise from that straitjacket of that financing and management system and we too will have an excellent health care service. For we’ll have in front of us how good British health care can be when operating in competitive markets abroad.
Sadly, however good this idea we don’t think that there’s anyone Machiavellian to have thought this through properly. Instead they really do think that foreigners will line up to gain access to NHS treatment even if they’ve got to pay full market prices for it. Not a bet we would count on ourselves.
Even High Street retailers don't think there should be an Amazon tax
As we're all aware there's a campaign going on to tax physical retailers more lightly, to tax the internet ones more heavily. This is dressed up as being levelling the playing field, the reality is that the High Street landlords would prefer business rates to make less of a dent in the rent they can charge. It's purely a special interest pleading that is.
Not even all High Street retailers agree with it:
The chairman of John Lewis has rejected growing calls for online retailers to be hit with a so-called “Amazon tax”, instead urging traditional players to adapt more quickly.
Sir Charlie Mayfield said he “struggled” with the belief that internet companies should be penalised because they have managed to carve out a leaner business model.
Quite so, Internet retailing is using less of that scarce resource that is high footfall retail space. Quite why they should be taxed more because of this is unknown. Unless, obviously, you're a landlord watching your rents go down.
After all, if a new technology means you need less steel to build a car - something that's been happening for decades now - we don't then insist that you should pay more tax because you're using less steel, do we?
Further, our entire aim in this economy of ours is that all business models become leaner over time. That's how we advance, by being able to produce the things we desire while using fewer resources to do so. That meaning that we've now the resources to do new and extra things - we're richer in short.
Business rates reform in the face of internet retailing isn't in fact about retailing at all, it's about landlords and their rents. Let's not forget that while this campaign continues.
Killing the planning system will indeed save the High Street
There is, obviously enough, a certain amount of special pleading here but they're right all the same. Our problem being that we face uncertainty and therefore planning simply cannot be the solution:
A coalition of retailers, landlords, councils and pubs has called for planning laws to be torn up so that abandoned shops can be turned into cafes, galleries, gyms and other businesses that could help rejuvenate Britain’s decimated high streets.
Empty units in the middle of towns and villages are often hard to let because it can be difficult and expensive to get permission to change their use. For example, a unit used as a hairdresser’s needs permission to be changed into a nail bar.
As we may have noted the basic technology of retail is changing. Instead of the footfall on the High Street being the determinant of success it's that traffic to websites which is. Some 16
% or so of retail sales now take place on that there internet rather than through physical shops. We might thus reason that we've an excess of those physical shops for our retail needs.
So, what should we do? Those High Streets, to what use should they be put? Which is where the problem is. We don't know. No one knows, there's not a single person with even a hint of a Scoobie. No entrepreneur has cracked it, no expert has been able to tell us all what to do next.
Which means that asking the bureaucracy for permission to do whatever is ludicrous. For if the people who actually do things don't know then the paper shufflers are going to be entirely clueless, aren't they? Given that we really don't know then what criteria can possibly be used to allow or not in conformity with some plan? For what the heck is the plan itself?
We've only the one method of dealing with said uncertainty. People go try stuff and see what happens. Much of it will be dire, some if not most will fail but through that process of experimentation we'll find whatever match there is between those physical assets and the desires and wants of human beings. Maybe it's that people go live in all those buildings and buy online. Perhaps it's services which are notoriously difficult to feed down a fibreoptic cable. Could be we just stick holograms of people in the streets and call it thriving.
That is, our only possible response to uncertainty of what to do is a free market. For that's the only system which does allow that experimentation which zeroes in on that match between assets and desires.
We don't know what to do, you don't know what to do, the bureaucrats haven't a clue. So, while we all try to experiment to find out why are we asking the bureaucrats for permission?
Venezuela Campaign: a state of ill-health
Hugo Chavez talked a lot about caring for the poor and sick, enshrining the right to free healthcare in the constitution and spending large sums on importing Cuban doctors into new healthcare facilities. The initial impact was promising: life expectancy rose, and infant mortality declined. But this did not prove sustainable. From 2008 onwards the inefficiency and corruption associated with the new programmes, combined with wider economic problems, would reverse these small advances, with the situation getting worse year by year.
This year, a report surveyed more than 100 private and public hospitals in Venezuela and found them in shocking condition. 79% have no access to water. 14% of intensive care units have been shut down. More than 80% cannot perform ultrasounds, X-rays, or CT scans. None of the hospitals surveyed had a working laboratory. Failures in infrastructure mean that hospitals regularly have buckets of water on hand, and doctors are forced to use their phones for light because of faulty bulbs or the unreliable electricity supply.
Venezuela’s health crisis is also impacted by the exodus of health professionals from the country. Somewhere between a third and a half of all doctors in public hospitals have left since the crisis began. They are leaving because of rampant violence, hyperinflation and their pitiful salaries of around £10 a month. Even Cuban doctors, who are loaned to Venezuela by Cuba’s government and are paid almost nothing, cannot be relied on. Thousands of them have fled Venezuela alongside normal medical professionals.
Nationwide, 85% of medicines that patients need are in short supply. For those who are suffering from cancer or HIV/AIDS, the number is closer to 90%. Along with their own medicines, hospital patients are also required to bring their own bandages and surgical gloves. Operating without painkillers is common and necessary, as medicines are prohibitively expensive and are usually only available on the black market, at a huge mark-up. Maura, a woman in her 60s who lives on a pension of less than $1 a month, spent around $21 dollars on medical products, including antibiotics for her daughter. Maura and many others have had to ask family and friends for help.
Even being in hospital is no guarantee of safety. Nine-year-old Cesar Torres was admitted to hospital with diarrhoea, but while inside developed several other infections. Due to food shortages and poor hygiene, eating in hospital can also be a health risk. 40-year-old Carla Lopez was being treated for diabetes, but her condition worsened due to her diet of pasta and rice, which was all the hospital could offer. Mothers frequently feed their babies with un-sanitised bottles. Cleaning, insofar as it is done at all, is carried out with water and rags as no soap is available.
Medical conditions linked to malnutrition are on the rise, and Venezuela’s hospitals are unable to cope. 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. This year, 300,000 children are at risk from death due to malnutrition, according to humanitarian organisations.
Although NGOs such as Healing Venezuela are succeeding in delivering some aid, the government has refused aid from foreign countries, citing security concerns. Venezuela’s Vice-President Delcy Rodriguez has denied that there is a humanitarian crisis, as she claims that this could justify ‘foreign intervention’. Meanwhile, Venezuelans die in droves. Ships sending aid have even been turned back by the authorities.
Venezuela’s current crisis is so immense that it is hard to imagine how deep the suffering goes. When it comes to the country’s health crisis, the scale of this calamity is even more heart-breaking. Although conveyed mostly through numbers and figures, the crumbling of Venezuela’s health system is still a story of individuals, communities and entire cities, swept up in this all-engulfing catastrophe.
More information on the Venezuela Campaign can be found on their website.