Venezuela Campaign: Individual tragedies lie underneath refugee statistics

Individuals stories should always be at the centre of reporting on humanitarian and social catastrophes. Venezuela is no exception. Staggering numbers of people have left the country, at least 2.3 million in recent years and up to 4 million since the election of Hugo Chavez in 1999. Early emigrants tended to be those who had suffered discrimination or persecution at the hands of the regime. In the last 5 years, however, many ordinary Venezuelans, including a large chunk of its young people, have fled the country as its economy and social fabric is falling apart. Here we will consider some of the stories of those who have left:

Yerilin & Richard

Yerilin and Richard are a young couple. They fled to Brazil when Yerilin was 8 months pregnant. They chose to have the baby in Brazil as Venezuela suffers from acute food and medicine shortages. Describing Venezuela, Yerilin says: ‘It was awful. Sometimes we’d eat just one meal a day, or sometimes we just ate rice and tomatoes, or salad and that’s all we could get.’ She says she was anaemic for months because of her poor diet and couldn’t get the necessary vitamins. Like hundreds of other mothers, Yerilin came to Brazil to have her baby in a safer country. She hopes her child will get Brazilian nationality, but their main concern is bringing up little Max in a refugee tent on the edge of Brazil. Despite the mosquitoes and the heat, however, the couple agree that it is much better than back home.

Sex workers on the border with Colombia

Two Venezuelan women sell sex on the streets of Cucuta, a town on Venezuela’s border with Colombia which is now home to tens of thousands of refugees. The women insist on keeping their identities secret. One of them has left her children behind in Caracas, while the other has brought her baby with her. ‘I can’t really tell anyone about my work, because people just discriminate against you,’ says one. ‘Most people just won’t understand that this is a huge sacrifice that I do for my family.’ The other also admits that being a sex worker is far from ideal. ‘I don’t really feel good about this work,’ she says. ‘Because you have to cope with a lot of horrible stuff, and I don’t sleep very well. But I have children and a family and I have to deal with it.’ Trapped and powerless, these women sell sex as they are unable to get a job in Colombia, a precarious situation which leads towards exploitation by gangs.

Curaçao

In January this year 18-year-old Jeanaury Jiménez was travelling to the island of Curaçao for the second time, having been deported back to Venezuela once before. This time, however, her fragile boat capsized, leading to her death and ten others’ who had made the journey in search of a better life. Jeanaury left behind two newborns, who are being cared for by their grandmother in a country where baby formula is all but unaffordable. Jeanaury’s family, like almost every family inside Venezuela, wonder where their next meal will come from. 20% of Venezuelans rely on CLAP, a government-run food distribution system which, in the absence of other sources of food, assures their compliance to the regime. Around 3 million Venezuelans receive money from abroad, mostly in dollars. Since the regime is greedy for cash, it takes a cut from all foreign transfers.

As should be clear by now, the Venezuelan government has no interest in the welfare of its citizens, at home or abroad. This tragedy can be met with determined action from the international community to help those who have fled Venezuela – and push for Venezuela to end its embargo on international aid, which is still in force and worsening the crisis there.

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

Market efficiency is market efficiency even when it's Albanian cocaine gangs

We’re not as coy as this:

“They have a long-term approach to success. They have got rich slowly. They now dominate drugs market prices by selling at the lowest price. They don’t impact upon purity by adulterating it — they make relationships upstream and establish staging posts through Europe and they have done everything in a slow, efficient, sustainable way.

“If they weren’t doing what they are doing, you’d take your hat off to them and say this is a fantastic business model.”

As is well known we’ve argued that such drugs should be legalised along with all of the associated branding, quality assurances and so on that would come with it. At the very least there should be decriminalisation.

And yes, market efficiency is still market efficiency and to be admired for that alone even when it is Albanian cocaine gangs. They’re providing people with what they desire at lower prices - leave aside that little difficulty over law breaking and that is indeed a Good Thing.

The point to this story though is this:

Saggers said the Albanians were so successful that they had “individually and systematically brought the price down from over £45,000 a kilo five years ago to about £30,000 a kilo now”.

OK.

One kilo of cocaine can be bought for as little as £3,800 in the jungles of Colombia

Right.

“I don’t think there is another commodity on the planet that generates that sort of difference between production and retail value,” he said.

We’re not entirely sure about that. These prices are rough estimates, but. Wheat is around £150 a tonne. Bread is in the £1 to £2 a kg range at the supermarket. That’s around a ten times price difference for the basic ingredient and the finished product. £3,800 to £30,000 is around ten times….

Yes, yes, yes, man does not live by toot alone and all that. But a ten times multiple from raw ingredient to finished product price isn’t that unusual.

It's not that the NHS won here, it's that drug regulation lost

This is being written up as the NHS having won a victory over the Big Bad Pharmaceutical Companies. When in fact it’s a failure of the Big Bad Pharmaceuticals Regulation System

.The NHS has won a landmark battle against drug giants paving the way for the health service to save millions by prescribing cheaper medicine.

Bayer and Novartis brought a High Court action against 12 NHS clinical commissioning groups (CCGs) in the north of England, relating to a drug to treat the biggest cause of age-related vision loss in the UK.

The companies challenged the lawfulness of a policy adopted by the groups which prescribed Avastin "as the preferred treatment option" for wet age-related macular degeneration (wet AMD).

Avastin, which costs around £28 per injection, is widely used around the world. However, despite being recommended by the World Health Organisation, it is only licensed for cancer treatment in the UK.

Yet the NHS groups were offering it as a course of treatment for patients with AMD alongside drugs called Lucentis and Eylea - drugs licensed for eye treatment.

Novartis and Bayer manufacture the two more expensive licensed drugs - Lucentis which costs £561 and Eylea which costs £800 a time.

Pretty much everything we know about Avastin does tell us that it’s just as good as the more expensive drugs. There have been proper tests of this contention.

However, it is not licenced for the treatment of this eye disease. It’s got all the documents and permissions to be used against certain cancers, but not in the eyes. Lucentis does have that eye licence. And it cost some hundreds of millions upwards to gain that licence for use in the eye as well. We’ve two different drugs (although we can have the most lovely arguments about how different they are) equally effective at treating this eye disease, one is licenced and expensive, the other is not for this purpose and is cheap.

This is Big Bad Pharma or a problem with the licencing system?

If government starts with a logical failure then they're not going to get the solution right, are they?

The government has decided to turn its attention to female entrepreneurship. What excellent news that is. However, if they start with a logical error - even an empirical one - they’re never going to find a solution to the problem they identify, are they?

The complaint is that fewer women than men start businesses. OK, but the important question then becomes, well, why?

The UK is virtually unrivalled as a place to start and grow a business. Today there are nearly six million of them, a 25 per cent increase since 2010.

Yet, shockingly, only one-fifth of these businesses are run by women – even though there are almost one million more women than men living in the UK. Men are twice as likely as women to be entrepreneurs.

OK, then the error - or what should be perceived as one:

“The fact that Britain is home to so many new, innovative businesses is something to be proud of,” said Mr Jenrick. “But the fact that so few of them are started by women is shocking. This is not because of a lack of talent or appetite.

“Therefore, it’s vital that we identify the barriers that are hampering entrepreneurial women from securing the backing that businessmen have taken for granted.”

That error is in that assumption about appetite. For we do have substantial research into patterns of male and female entrepreneurship. If we think of the spectrum, from self-employment to trying to found the next Google, we find that for many women it’s self-employment and the manner in which that mixes well with family responsibilities which is a driver. Female owned businesses tend to be smaller, depend less upon outside capital and are less profitable. As an EU funded study tells us:

Women accounted for only 29% of the 40.6 million entrepreneurs in the EU in 2012. Women entrepreneurs tend to operate in smaller businesses; usually go solo; tend to concentrate on sectors that are considered by financiers to be less profitable; tend to have lower growth and turnover compared to male-owned businesses. Women entrepreneurs tend to self-assess the level of innovation of their own business lower than male counterparts. They tend to start off with less capital, borrow less and use family, rather than debt or equity finance. Domestic circumstances often force women into periods of intermission; this hinders their ability to accumulate social, cultural, and financial capital, and constrains the generation of a respectable credit history. Women entrepreneurs are more reluctant to assume a position of debt compared to men. This is down largely to lower levels of self-confidence in their business. Women entrepreneurs generally have less powerful professional networks, compared to men.

Note that all of this is, of course, on average. That there are female entrepreneurs as rapaciously accepting of risk as any male counterpart is entirely true. Just perhaps not of the entire population - which accords well with our more general observations about risk appetite across gender.

We do know that male and female entrepreneurs are different along some axes, that the businesses they found are. Crudely, but not entirely inaccurately, women tend to found something which is either self-employment or a small step up from it. Men are more likely to try and hit that six out of the ground.

Which brings us to our question - why? It could be because societal expectations or structures are that women have a harder time accessing finance, mentoring and so on, thus the government’s attention to such things will be welcome. Well, in the manner that anyone from the government claiming they’re here to help might be. It might also be that the appetite for high risk billions or bust start ups is higher in men - on average again - than women.

Which is where the error is. The government is already ruling out that second possible explanation. But that’s the very question we want answered first, isn’t it? If people don’t want to do summat then that’s that, isn’t it.

We need to find out why female entrepreneurship is different from male before we go to try and cure whatever ails it. For it might be that nothing ails at all, it’s just a matter of personal preferences - and why should we be trying to change those?

A useful example of why we're liberals not socialists

Owen Jones tells us what socialism really is:

Socialism is the democratisation of every level of society, or it is nothing. It is based on an understanding that the concentration of wealth and power leaves democracy hollowed out, and that simply trooping to a polling station every few years is an insufficient counterweight to the behemoths of global capital. Under the prevailing system, the same vested interests remain in power whoever is in office, which is why a transformative government must seek to democratise the workplace, the economy and all of society’s pivotal structures, from the media to local government.

We’re agin this. We’re rather in favour of certain types of socialism - you want to set up a commune, a workers’ cooperative, a Friendly Society, you go right ahead. That sort of voluntary cooperation without the capitalist ownership structure, why wouldn’t we be in favour? Our only objections to such things are when they become compulsory.

But this idea of total democracy, sorry, no. Certainly, that democracy is a necessary and desirable method at times. Working out which group of poltroons get to set tax rates for the next few years, well, all other methods of deciding this seem to devolve down to heads on pikes at some point. But all of society? All of the time?

As all of us with any knowledge of either large organisations or student politics know that voting on everything all the time really means rule by that small number of people who run the agenda subcommittee. And as Mysterioso’s formulation of Worstall’s Law has it:

Any large organisation ends up being run by the kind of perverts who enjoy committee meetings

This isn’t something we would wish upon society as a whole. As PJ O’Rouke has pointed out if we all vote on dinner then every meal is pizza. But given the cranks who end up doing that voting it’ll be organic vegan pizza free of cruelty to tomatoes. You know, toast.

Which is where the liberal vision of society diverges from the progressive. Other people get to determine, vote upon, our behaviour only when that’s entirely necessary - Mill’s harm to third parties. Other than that we all get to partake of that stately progression to the grave on our own terms.

Everyone voting on everything all the time is simply the institutionalisation of the tyranny of the majority and why would any liberal want that?

Hancock's half hour

You will have by now noticed that the role of the Secretary of State for Health and Social Care is not to do anything important, like sorting out the NHS, but to provide gentle amusement whilst in transit.

Social care is a favourite. According to Richard Humphries of the King’s Fund, the last 20 years has seen a dozen consultations and green and white papers on how social care should be improved, and funded more fairly, but nothing has actually happened.

The present incumbent has now come up with the bright wheeze that "workers could have their pay docked to pay into a new social care fund". "People who made payments could either have all their future care costs met by the fund or, more likely, would benefit from a cap that would mean they did not have to pay care bills above a certain level."

Workers would be free to opt out of the scheme but those who did would get no benefits. Mr Hancock suggests that "auto-enrolment" for social care would just be a simple extension of "auto-enrolment" for pensions, introduced in 2012 and proving more successful than sceptics expected. But that was because employees got the benefit of employers' contribution. That would not be the case here.

Presumably workers, and everyone else, would be allowed to opt in and out according to their financial pressures at those times. Keeping track of what individuals have contributed, their entitlements, and the entitlements of their partners, would clearly be difficult. Maybe Mr Hancock, who must believe history repeats itself will come up with stamps as the solution.

A person’s entitlement, and that of their partner, would be calculated from the value of stamps purchased and when (because inflation will need to be taken into account). Just imagine how many civil servants will be needed to do these individual calculations on top of tax and pensions.

National Insurance was set up in 1911 with much the same mission, except it included pensions. They wanted to keep it simple with every worker (and employer) making the same contribution pro rata to wages. Mr Hancock no doubt has the same simplicity in mind. But his freedom to opt in and out will complicate matters. In pensions this became “Class 1” and then it dawned on the government that the self employed had to be treated differently so Classes 2 and 4 were born. Class 3 is for voluntary contributions. Labour governments are especially fond of complicating further – notably in 1948 and in the 1990s.

107 years on, HM Treasury are still fiddling with it. Class 2 is merging with Class 4 and white van man is unhappy: he thinks he is paying too much whilst others think he gets off lightly.

The key point here is that the handing out of benefits based on stamps (contributions) was deemed discriminatory. National Insurance is now simply a tax and benefits are part of state welfare available to all according (in theory) to need rather than contribution.

In short, National Insurance is a mess and it should be merged with Income Tax. But that won’t happen soon.

Mr Hancock wants to do it all over again. It will fail (if it ever happens) for the same reasons. The poor will opt out because they cannot afford the contributions but, when the time comes, will demand the benefits in the name of fairness. And based on all evidence of recent history, they will be right to assume government will capitulate and pay.

The rich do have an obligation to take care of the poor when social care is needed. There is a need to redistribute in an advanced economy that can afford it. And it is all becoming a great deal more expensive with longevity, increasing mental health problems and social care increasingly needed by those of working age: “It is notable that over half of these additional cost pressures arise from care and support to meet the needs of working age adults.”

Mr Hancock is wrong though to believe that his department, or local authorities or any other part of government, can run insurance schemes better than the free market can. Insurance companies have looked at this problem and walked away: too expensive as a whole. But the upper end of it, just like BUPA, could well be handled by the free market and that would have a small benefit for social care as a whole just like private healthcare has on the NHS.

The simple and effective way to enlarge the private social care insurance market would be to make the premiums tax deductible. What HMRC loses in tax, government saves on welfare. Then treat social care similarly and in harness, but not merged, with the NHS. Simples.

Girl Guides are becoming more unhappy - this isn't a surprise

We’ve a survey telling us that Girl Guides are becoming more unhappy as time passes. That is, the newer generations are more unhappy than the older age cohorts were. This is not a surprise, at least some of this will come from the economic and social emancipation of women.

The survey:

There has been a sharp decline in happiness among girls and young women in the UK in the last decade, with the majority of them blaming exams and social media for causing stress, a major survey has found.

Just one in four (25%) girls and young women between the ages of seven and 21 described themselves as “very happy” in the latest girls’ attitudes survey for the Girlguiding organisation – down from 41% in 2009.

This is not an isolated finding, Stevenson and Wolfers have found the same to be true - to some extent - right across the rich world.

The question is, well, why? The answer being that old economists’ favourite, opportunity costs. It has always, for as long as we’ve been measuring such at least, true that men report being unhappy at higher rates than women. The decline in female happiness is really bringing their rate down to that of their male contemporaries. So, why?

It’s hardly controversial that men historically had more life choices than women, that this inequality is either well on the way to being or entirely wiped out now. This should make women unhappier.

Yes, unhappier. For the cost of anything is what is given up to gain that thing. The more choices one has the more is given up by choosing any one mode or method of life. As women’s choices have expanded their levels of reported happiness have declined to those of the men who have always had such a palette of shades to life.

No, this doesn’t mean that any increase in unhappiness is from this cause. But it does mean that we’ve got to be careful about the attribution of any change in these levels of happiness. Strange but true, some of it will be coming from the way the world is getting better.

Bernie Sanders and his very silly Stop Bezos Act

Bernie Sanders has proposed an Act of Congress whereby companies get charged a tax equal to the amount of welfare their employees receive. We’re even seeing admiring glances at this idea here in the UK - when a more silly and counter-productive idea is difficult to envisage.

The major effect here will be that those who might gain welfare payments will not get hired. Which really isn’t the point at all now, is it?

Sanders has also been highlighting some of the 19th-century working practices used by Amazon to control and discipline its workforce inside of its fulfilment centres. Sanders’ bill – the Stop Bad Employers by Zeroing Out Subsidies Act, or the ‘Stop Bezos Act’ – would tax employers like Amazon when their employees require federal benefits.

The Senator is right to push Amazon on this.

No, he’s not, it’s a very silly idea indeed. Here’s the write up, here’s the bill itself.

If an employee of a large company gets welfare then the company is charged that welfare bill. Idiocy.

First, the assumption is that SNAP (food stamps), Medicaid, school lunches and Section 8 housing (the programs mentioned) are subsidies to the employer. They’re not, all are paid upon the basis of income, not work status (some SNAP excepted). Thus they don’t lower wages and cannot be subsidies to employers. Quite the contrary, they raise the reservation wage and thus are anti-subsidies to employers. A simple test of this, abolish those benefits and wages will rise will they?

It’s also true that such benefits are granted upon household circumstances, not individual. So, that single mother of the sick child is never going to gain employment if an employer is on the hook for the Medicaid bill, is she?

But as ever weirdness and foolishness cross the Atlantic so it won’t be long before we have more applauding this idea. Better to stamp on it right now than wait. It’s a very silly idea indeed - but then we’ve election season over there which is why it’s being suggested in the first place.

But the BBC shouldn't be competing with Amazon and Netflix

The BBC is gearing up for another raid upon our wallets:

The BBC is fighting against American streaming giants with "one hand tied behind its back", Lord Hall will say, as he as he warns of a future of television without British shows.

The correct answer is that the BBC can go boil their heads.

Outlining the scale of competition, he will reference studies which found Netflix is spending $8bn a year on content, Amazon is spending $5bn, and Britain’s public service broadcasters combined, including the BBC and Channel 4, are spending £2.5bn.

“Beyond the steps the BBC may take, Britain also needs to do more to support the broader PSB ecology,” Lord Hall will say.

“It cannot be right that the UK’s media industry is competing against global giants with one hand tied behind its back.

We pay taxes so that the BBC can make all those programmes. There is an entirely respectable theory behind this idea, that of public goods. For complex reasons, but reasonable ones, markets unadorned don’t produce perhaps enough of such public goods. That’s the argument in favour of government either promoting their production or actually producing them.

And yes, that actually is the argument in favour of the BBC and its tax funding - yes the licence fee is a tax, Gordon Brown finally admitted it. It’s also the only valid argument in favour of the BBC and its tax funding.

The argument being put forward here is that those market actors are producing lots and lots of what the BBC would or could produce. The BBC should therefore gain more resources (oh yes, this is leading to an insistence that they should gain more of our money) so as to be able to compete. But that’s a violation of our original justification for the BBC, isn’t it? That we’ve a public goods problem here, that the market isn’t producing enough.

We cannot say it’s a public good, therefore tax financing, and also say that we need more tax because the market is producing lots of those now no longer public goods.

Yes, quite, the BBC can go boil their heads.

And to think that some want the utilities to be renationalised

Dependent upon who we decide to listen to we’re told that somewhere between many, most and all of the people would like to see the utilities renationalised. This might well not be a good idea. As our examplar we’ve Stornoway. An area sufficiently remote that it has only the one energy supplier.

You know, a place with, inside our national at least vaguely competitive market, that monopoly that nationalisation would bring:

Smith says that every year he called his supplier, Scottish Gas, to get a better deal, and each time was told that there was only one standard tariff in his area.

Their predicament highlights the obstacles faced by energy customers who want to switch, despite rules to open up competition.

The Smiths, and some other residents in the Scottish town of Stornoway, have been trapped on a single, pricey, standard tariff for years after wrongly being told they neither qualify for cheaper deals nor have the option of changing providers, because Centrica – which owns British and Scottish Gas, and supplies one third of British households – is the only gas supplier to the island.

As we continually point out it is that very competition between suppliers which lowers prices and thereby insists that suppliers are unable to exploit consumes over much. And as we see here in the absence of such competition there is the claim of over much exploitation.

At which point there’s not a great deal left to the case that we should insist upon the one monopoly supplying all the tens of millions of us in order for us to gain a better deal, is there?