Airbus A 380 cancellation just markets doing their stuff
One of us here has a sad about the cancellation of the Airbus A 380 having been in business life a supplier to Airbus. Even one to the experimental side of the organisation where they plan and plot their new products. Yet this is still just markets doing their stuff for us, that process of making us all ever richer:
Airbus has announced it will end production of its A380 superjumbo passenger jet after failing to secure orders – a move that puts UK jobs at risk.
The European aerospace group said it had made the “painful” decision to stop making the world’s largest superjumbo in 2021 after Emirates, the A380’s biggest customer, reduced an outstanding order for 53 planes to only 14.
Emirates will instead order 70 of the smaller A330 and A350 aircraft, underlining the trend towards smaller, more efficient aircraft that made the A380 unsustainable.
The particular thing here being, well, how do we want to fly? Vast numbers of us from one terminus to another? Perhaps with feeder flights into and out of those termini. What is often known as hub and spoke. Collect people from across northern Europe to, say, Frankfurt, then fly them all to Sydney, then disperse them on local flights. Or would we prefer to fly direct from Oslo to Melbourne, Cologne to Perth and so on?
If we prefer that second then we need what is known in the jargon as point to point flights.
Well, obviously, we’d prefer the p to p but at what price?
Boeing put their money on p to p, Airbus on hub and spoke. Which is where our market thing comes in. For before this all started we didn’t know. We didn’t know generally as a society, the people making the planes didn’t know, we passengers didn’t know. Various ideas and inclinations were there, obviously. And the two plane companies certainly tried very hard to find out which was going to be the right answer. That they came to different conclusions shows that there wasn’t any method of actually knowing ahead of time.
Which means doing that market thing. People try it out, suck and see, and then we all decide when we’re faced with real, actual, choices. That is, we’ve got to get to the point where revealed preferences are possible, not just expressed, before we can find out. The market thing being exactly that, people get to try stuff and we all give our verdict by doing or not as we desire.
Sure, the A 380’s a marvelous beast and it’ll be sad to see it go. But as it turned out that’s not what we all wanted, not enough to pay for it at least. That resources are no longer devoted to making what we don’t want means they’re available for something we do, making us richer.
Technology matters for trade freight transport
On February 14th, 1889, the first trainload of oranges pulled out of Los Angeles heading for the East. The first transcontinental railroad had been completed 20 years earlier, when the Union Pacific and the Central Pacific railroads were ceremonially linked by the golden "last spike." The new opportunities it brought for freight transport were immense. In the year of its completion the population of Los Angeles was only about 1,600, but given rail transportation it could grow and prosper. Its climate, with irrigation, was ideal for valuable fruit such as oranges.
Even before the transcontinental railroad's completion, when the line had reached Abilene, ranchers drove cattle that sold for $4 in Texas along the Chisholm trail to Abilene and thence by rail to Kansas and the Midwest, where they could fetch $40. An estimated 5,000,000 head of cattle passed along that route. The availability of low-cost and rapid transport has had a huge impact on the wealth-creating properties of trade, both within countries and internationally.
In Britain the railways facilitated the transport of millions of tons of coal from the pits of the Northeast in places like Newcastle, to the factories of its Industrial Revolution, and enabled the manufactures of those factories to be transported both to their domestic markets and to the ports for export to their international markets.
Internationally, the invention in the late 1800s of the double- and triple-compression steam engines, combined with the screw propeller to replace paddle wheels, led to the development of fast, efficient freighters to convey the grains of the American Midwest to hungry mouths in Britain and Europe. The free trade enabled by Britain's 1845 repeal of the Corn Laws needed the technology of better transport to make its impact in lowering food prices.
More recently Malcolm Mclean revolutionized freight transport in 1956 with his invention of the shipping container. Given its ease of loading and unloading onto ships, and its ability to travel on trucks and rail freight carriages as well, it dramatically lowered the cost of transport, and greatly expanded international trade. It gave landlocked countries access to international trade by enabling them to transport containers by land to ports beyond their borders. The invention of the container played a major role in the globalization of trade in the second half of the 20th Century.
The lesson today is that even as we liberalize trade by lowering barriers and tariffs through free trade agreements, we should also be making it easier for new transport technologies to facilitate international and domestic freight transport and lower its costs. The imminent advent of driverless trucks and ships, and of cargo-carrying drones, portend the continuation of evolving transport technologies that will decrease transit times and lower costs. That first trainload of oranges 130 years ago was but a landmark on a continuing journey.
It's not so much that Whitehall corrupts charities but that....
Ian Birrell talks at UnHerd about how Whitehall corrupts charities by showering them with cash. He’s right, that flood of money will stop mouths. But that’s not the true danger of the combination of the two. Rather, that comes when the charities in receipt of the cash lobby government back. For that becomes the bureaucracy itself using our money to pay to tell the bureaucracy what to do. Reasonableness, even value for money, is not going to get much of a look in in such a circular process.
As Chris Snowdon has been pointing out these years there’s little to explain the existence of of varied anti-smoking bodies other than the rivers of taxpayer cash sent in order to provide a merkin for bureaucratic justifications against smoking.
A baby step has been taken on this issue. Charities do have to curb their political campaigning but are still able to campaign upon specific issues. And cash sent to them by government isn’t restricted to not doing so.
The solution is that old one of sunlight being the best disinfectant. Perhaps we should revive an old idea of Chris Mounsey’s, the Fake Charities register. There, any organisation which received….well, the definition was:
If a charity receives 10 per cent or more of its income, or more than £1m a year, from the Government, and engages in lobbying or influencing policy, then it goes on the list.
That might be too restrictive a definition, might be too loose. We’re interested though in seeing a revival of the idea itself.
After all, as is the current mantra about Facebook and political advertising, if we don’t know who is paying for the propaganda then we don’t know how to weight it properly, do we? Quite how formal and funded such a listing should be, well, we leave that an open question. If the Fair Tax Mark can gain funding then why not the Fair Charity one?
A radically new approach to homelessness
A very interesting approach to homelessness in Finland has seen dramatic results. In the UK there were an estimated 7% more rough sleepers last year. Germany has seen an increase of 35% over the last 2 years, and in France over an 11-year period the numbers are up by 50%. In Finland over a 7-year period the number of long term homeless fell by 35%. There are almost no rough sleepers in Finland now, and their homelessness figures include people not sleeping rough, but staying long-term with friends or family because they have no home of their own.
The National Audit Office tells us that in Britain:
"There is a high prevalence of mental illness and alcohol and drug dependency among rough sleepers. Of the 70% of rough sleepers who had a support needs assessment recorded, 47% had mental health support needs, 44% had alcohol support needs and 35% had drug support needs."
This tells us that for most rough sleepers alcoholism, drug abuse and mental illness feature among the reasons for their situation.
Finland's policy, introduced in 2007, is called Housing First. Instead of requiring people to solve those problems before they are housed, as most countries do, it does the opposite, housing them so that they can better address those problems. The reasoning is that alcoholism, drug abuse and mental illness are all more difficult to solve for someone living on the streets.
Tenants are housed in apartments, entitled to housing benefits and pay rent. What they cannot meet out of income is met by local government. Crucially they receive support services to help with their difficulties. Trained personnel are available to help with financial problems, advice about housing and benefits, and to provide therapy for addiction and mental problems. Although the programme costs money, there are savings for government from lower use of emergency health services and from less involvement of the criminal justice system.
Finland has purpose built or converted premises into self-contained apartments, and has turned all of its homeless shelters into such accommodation. Some of these have communal areas where tenants can interact and form communities. An article in the Christian Science Monitor examined some of the costs. Between 2008 and 2015, 3,500 apartments were produced at a cost of £294m, or £84,000 each. Over that time the estimated saving to the medical and emergency services no longer required is put at £14,200 per previously homeless person per year. This suggests that the project's costs might be recouped over a 6-year period.
The results of the Finnish approach are remarkable, and they suggest that their alternative approach brings a viable solution to a growing and distressing problem. There is a very strong case for a detailed study of their methods and consideration given to trying a similar approach in the UK more broadly.
This isn't market failure Dame Frances, it's just you not liking the answer
That a free market doesn’t produce what you want isn’t a market failure. It’s just you not liking the answer that the calculating engine of that market is providing. It’s no more a failure than a calculator showing that you’re, at your current levels of spending, going to run out of wages before you run out of month.
Or, as we might put it, statements of reality are not failures:
Cairncross said that job losses at local newspapers meant there was a crisis in the coverage of democracy. “The cost of investigative journalism is great and rarely seems to pay for itself … given the evidence of a market failure in the supply of public-interest news, public intervention may be the only remedy.”
The complaint is that such journalism costs more to produce than people are willing to pay for it. That’s just the same statement as it costs more than it’s worth in those purely monetary terms. Given that the market is the calculating engine of what things cost and what they’re worth this verdict is not a failure.
The actual complaint here is about reality. Dame Frances Cairncross, along with some number of other people, thinks that we out here should all value that local and investigative journalism more highly. Which is fine, of course it is, it’s views which make a market in the first place. Yet that reality is that we don’t.
OK, we don’t value such journalism at the rate which Dame Frances thinks we should. What is the solution here?
The correct solution being that as we don’t then we don’t have to pay for it. For to be forced into paying for something we don’t value sufficiently to pay for it voluntarily is to make us poorer. Those, like Dame Frances, who do value it more highly can maximise their own utility by paying that higher price. We are all thus made as well off as current circumstances allow us to be. That Dame Frances, and those who think similarly, have the opportunity to dip into our money through the taxation system changes nothing in this argument.
We aren’t willing to pay the costs of production of this type of journalism. Therefore we shouldn’t pay for it. And that we’ll not pay for what you want is not evidence of market failure, it’s instead you disagreeing with revealed reality. To which the answer is - just as with the existence of opera, pink Ferraris and pumpkin spice lattes - you want it, we apparently don’t, so you pay for your desires not charge us.
Julian Simon, optimistic about humanity
Dr Julian Simon was born on February 12th 1932. I befriended him through the Mont Pelerin Society and hugely enjoyed his company. To say he was an optimist would be to understate it because he took the view that human creativity and ingenuity could solve all of its problems, and that gloomy forecasts of impending doom failed to take account of this.
Simon was of the Chicago School of Economics, and a friend of Milton Friedman and F A Hayek. His book, "The Resourceful Earth," was in response to the best-selling books "The Population Bomb" (1968) and "The Limits to Growth" (1972) by Paul Erlich. Erlich was high priest of the view that the explosion of the world's population would lead to catastrophe because the planet could not support the predicted numbers. He took the equally pessimistic view that people were using up the Earth's limited supply of resources, leaving none for future generations. These limited resources, said Erlich, would mean that economic growth could not continue.
Simon took the opposite view, arguing that although resources might be physically limited, they were not limited economically because technological progress and increased wealth enable them to be recycled, and develop substitutes that decrease the need for them.
He challenged Erlich in a 1980 wager that became famous. He asked Erlich to pick 5 raw materials that he thought would rise in price over the next decade. Erlich accepted, and chose tin, nickel tungsten, chromium and copper. When the decade expired, they had all fallen in price, so Erlich paid up, sending a cheque to Simon.
Simon published "The Resourceful Earth" in 1984, co-edited with Herman Kahn, in response to the doom and gloom of the "Global 2000" report. He argued that the prices of raw materials, especially metals, tended to be stable or to decrease in the long term, and that population, far from being a problem, was a solution because people are creative and innovative. His anti-Malthusian position has been vindicated by events. The world's population rose by 145% between 1960 and 2016, yet average world income per capita rose by 183% over the same period. Many analysts now think the world's population, currently 7 billion, will peak at 10 billion and then fall as people become richer and raise fewer children.
Julian Simon was a remarkable man, way ahead of his time. He provided an effective counterweight to the scare stories. After his untimely death in 1998, his last book, published posthumously with Stephen Moore in 2002, was "It's Getting Better all the Time: 100 Greatest Trends of the Last 100 Years." It shows in statistics and charts how much life has improved worldwide for most of humanity, despite all the scaremongering that says it is becoming worse.
It's an odd definition of austerity being used here
The Institute for Fiscal Studies is telling us that more money must be found and spent if “austerity” is to end. We find this to be an odd definition of austerity.
Philip Hammond must find an extra £5bn in this year’s Whitehall spending review to reverse planned cuts and meet his claim of ending austerity, a leading thinktank has revealed.
We obviously have views on how much government should be spending - less. But that’s not our point here:
Philip Hammond must spend billions extra to end austerity, says think tank the Institute for Fiscal Studies (IFS).
The report itself is here.
There are various ways we can measure how much government is spending. Pure cash for example - that’s obviously risen. We can measure it after inflation, that’s risen since those Glory Days of the Blairites.
The most reasonable one is to use portion of GDP. Gross Domestic Product is, after all, the measure of everything done by everyone. Percentage of GDP is thus how much of what everyone does is taken from them in order to be processed through government. We think that should be less for we believe that people dispose of their own resources upon their own needs rather better than some bureaucrat spending other peoples’ money on other people does.
Sure, there’s a minimum needed for as we’re not anarcho capitalists we do agree that a modicum of government is necessary. But less.
Government spending - and taxation - is currently higher than the average it was when Blair was Prime Minister. We find that a difficult definition of “austerity” to believe.
Seriously? Spending more of everyones’ everything than even Gordon Brown did is austerity?
Margaret Thatcher as Tory leader
On February 11th, 1975, Margaret Thatcher became leader of the Conservative Party. She had unexpectedly defeated the incumbent, Sir Edward Heath, in the first ballot a week earlier, leading to his withdrawal. A story that circulated later told that her supporters had persuaded some MPs to vote for her, expecting Heath to win, but wanting to humble him for his arrogant disdain by reducing his victory margin.
As Tory leader Margaret Thatcher led her party to victory in the 1979 election, and in the two elections that followed it in 1983 and 1987. She took over a country in deep malaise, one that had lost its self-confidence, one plagued by strikes and at the mercy of bullying union leaders. It was a country that looked enviously at others as its own economy languished and its inflation soared. It was a country called, even by itself, "the sick man of Europe."
She was a transformational prime minister. Under her leadership Britain went from having the lowest growth rate in Europe to achieving the highest. It went from the highest number of days lost through strike action to having the lowest. Ailing and loss-making state industries were privatized into profitable and tax-paying private companies, and it developed a world-leading financial sector.
In foreign policy she joined with US President Ronald Reagan in standing up to the Soviet Union, in countering its aggressive stance by deploying new missiles and modernizing the armed forces. The policy ultimately led to the collapse of what Reagan had called "the evil empire," as the populations of the communist countries one by one overthrew the tyrannies that had subjugated them for so long.
Although popular at the time, and applauded for the steadfast way she set about turning the country around, Thatcher has been subsequently vilified as a hate figure by left-wingers and their media sycophants. This is not surprising, since she took on and defeated left-wingers, internationally as well as at home. She is accused of hollowing out the North by "destroying manufacturing," whereas in fact manufacturing rose by 7.5% during her administrations. The rise of the service and financial sectors meant that manufacturing made up a smaller proportion of the economy, down from 17.62% to 15.18%, a smaller decrease than had occurred before she took office.
It is alleged that she took away the powers of the unions to protect workers' rights, but the reality is that she empowered the ability of their members to control militants. Secret ballots to elect their leaders and to decide on possible strike action led to more moderate leadership and less industrial unrest.
The left-wing chorus tells us that she cut taxes for the rich, but this is untrue. She cut the top rates of tax, but this resulted in the rich paying a greater, not a smaller, share of the total. The top 10% of earners had been paying 35% of the total, and this went up to 48%. The charge that she cut public services is similarly false because public spending increased by 17.6% over her period in office. It declined as a proportion of the economy only because the private economy grew so much.
She turned the country around and brought it back from stagnation and despair, and when she became leader of her party 44 years ago, it was one of the best things that happened to the country.
Obscenity law liberalised
Last week the Crown Prosecution Service published updated guidance for prosecutions under the Obscene Publications Act (1959). Legal campaigning has brought about a big change: the liberal tests of harm, consent and legality of real acts are now key parts of their working definition of obscenity. The CPS explain:
… conduct will not likely fall to be prosecuted under the Act provided that:
It is consensual (focusing on full and freely exercised consent, and also where the provision of consent is made clear where such consent may not be easily determined from the material itself); and
No serious harm is caused
It is not otherwise inextricably linked with other criminality (so as to encourage emulation or fuelling interest or normalisation of criminality); and
The likely audience is not under 18 (having particular regard to where measures have been taken to ensure that the audience is not under 18) or otherwise vulnerable (as a result of their physical or mental health, the circumstances in which they may come to view the material, the circumstances which may cause the subject matter to have a particular impact or resonance or any other relevant circumstance).
The guidance supports a realistic notion of consent which means that depictions of most safe, consensual activities under the umbrella of BDSM are unlikely to be subject to prosecution:
“Non-consent for adults must be distinguished from consent to relinquish control. The presence of a “gag” or other forms of bondage does not, without more, suffice to confirm that sexual activity was non-consensual.”
The CPS acknowledge the damaging impact on the rule of law when prosecutors rely on subjective notions when making charging decisions:
“An ill-defined concept of moral depravity or corruption does not provide for legal demarcation of sufficient precision to enable a citizen to regulate his or her conduct. However, where conduct or an activity is itself criminalised, that may be a clear indication as to its tendency to deprave or corrupt.”
This is a substantial improvement for the OPA which has previously been used to prosecute consensual sexual expression, including publications depicting and defending LGBTQ sexual practices.
For now, the guidelines relate only indirectly to decisions to prosecute for possession of Extreme Pornography (Section 63 of the Criminal Justice and Immigration Act 2008). They appear to clarify that prosecutors should not normally be targeting depictions or records of legal acts between consenting adults. This avoids the logical incoherence at the heart of previous obscenity definitions that meant people could be prosecuted for publishing or possessing visual records of practices that were perfectly legal to conduct, such as fisting.
This is good news for liberals and anyone with an interest in freedom of sexual expression. We have to remain vigilant to see how prosecutors use these guidelines in practice. But this is at least a substantial improvement on past definitions that provided little guidance for citizens, producers or prosecutors.
What is responsible for this surprisingly liberal turn? There is little we can say with absolute certainty other than that the CPS has wisely chosen to adjust its prosecution practice to better reflect contemporary public attitudes towards minority sexual practices and porn producers.
There are a few likely contributors to this reform. Various, sometimes overlapping, strategies formed an ecology of activism and advocacy that changed the legal and policy environment. Central to the story is the civil liberties group Backlash (declaration of interest: I have volunteered my research expertise at Backlash). It began as an advocacy group, campaigning against the extension of obscenity law to include possession of extreme images that the Home Office presumed to be a necessity in the Internet age.
After the law was passed despite well-informed opposition, obscenity lawyer Myles Jackman joined Backlash as legal advisor. In a switch in strategy, Backlash started providing legal advice and financial support to defend some criminal allegations that involved consenting acts between adults.
Juries tended to favor the defence in these cases that Backlash identified as consensual. Juries rejected prosecutions for the possession of erotic horror images, possession of fisting and urethral soundings, ‘twink’ porn, as well as the sale of fisting videos. These criminal cases couldn’t set legal precedents as they never got to the stage of appeal. Nonetheless, these failed prosecutions probably deterred the CPS from pursuing many future cases.
Meanwhile, other campaigners brought this issue to wider public attention. Jerry Barnett’s website Sex and Censorship and book Porn Panic helped to link the anti-porn agenda to a wider pro-censorship movement that is now prominent in some Internet political movements. Sexual freedom campaigner, Charlotte Rose, organized a ‘face-sitting’ protest outside Parliament aimed specifically at new media regulations and helped to raise the profile of sexual freedom more generally.
The protest attracted mainstream media attention. Pandora Blake used regulatory action against her website as a test case to quash some of the more subjective regulations. Blake then ran a campaign to show that it was the Obscene Publications Act, underlying these new inconsistent and censorious regulatory practices, that needed reform. The lost cases and reaction from vulnerable parties together prompted the CPS to consult on adjusting their guidelines to better represent what the general public evidently thought to be worthy of criminalization and censorship.
Obscenity and pornography regulation has attracted a great deal of scholarly interest. Initially, from critical supporters of the ban on extreme pornography from the field of feminist legal theory. Media communications scholars, especially Feona Attwood and Clarissa Smith, in the nascent porn studies sub-discipline, challenged the idea that porn had systematically negative impacts on culture, society and the status of women.
My article, ‘Millian Liberalism and Extreme Pornography’ showed that there was a surprising overlap between the interests of queer sexual politics, including the freedom to engage in transgressive expression and a right to establish safe spaces for minorities to support and cultivate their identities, and the classical liberal approach to freedom of expression and association. My Adam Smith Institute report, ‘Nothing to Hide’ argued for making consent to legal acts the primary way of judging the legality of sexually explicit images. It prompted LGBTQ media to highlight the risks of the law for their audience, and to start quizzing the Home Office about how they intended the law to be used.
Initially, academic feminist proponents of the extreme porn ban, including Clare McGlynn, sought quite a broad application. They argued explicitly that the law should not apply to a narrow notion of harm but also to ‘cultural harm’ or the imputed indirect, social impact of the availability of pornography, not just those participating in the acts themselves). More recently, these proponents have accepted a greater role for consent in defining the limits of image prohibition.
They now focus on the problem of ‘revenge pornography’ (the non-consensual sharing of sexually explicit private images). In contrast to ‘extreme pornography’ and obscene publications in general, ‘revenge porn’ constitutes a personal violation and severe social problem that both liberals and feminists agree requires civil and criminal remedies. Fortunately, there has been some degree of agreement on where future criminal justice activity needs to be directed.
Criminal obscenity law is just one strand in a tangle of issues threatening sexual expression and freedom of expression in the UK. This change doesn’t do very much to make the government’s age verification system and broader surveillance of Internet access safe. It only marginally improves the legal protection of sex workers who use or offer online services. So there are a great deal more liberal reforms needed. Nevertheless, this success shows that campaigning, through legal challenges, protests and informed scholarship, can lead to genuine reform. I see this as a model for future campaigns aiming for greater personal liberty.
Nick Cowen, Classical Liberal Institute, New York University School of Law
How can teachers educate the ignorant if teachers don't know stuff?
Teachers insist they are hard done by over pay as a result of these past few years. The argument that all have been hard done by they reject. But they do so on grounds that aren’t correct. And we really should be holding teachers to a high standard here. For they are, as they insist they are, the people who instruct the next generation in what is right and wrong, true and false. Thus we must indeed insist that they themselves understand this reality we’re all struggling with.
That understanding part being the test they are currently failing:
The admission comes in the Department for Education’s official submission to the School Teachers’ Review Body, which makes recommendations on pay deals. It states that pay is also lower than it was 15 years ago in real terms. “From 2002-03 to 2017-18, classroom teacher median salaries have seen a drop of 10% and overall teacher median salaries of 11% in real terms,” it says. It argues that the fall was smaller than that suffered by private sector graduates.
That all such salaries have fallen does seem relevant. Yet:
Mary Bousted, joint general secretary of the National Education Union, said: “We welcome the DfE’s admission that teachers’ pay has fallen so far in real terms. It is no good Damian Hinds trying to argue that this is the same for private sector jobs – those figures reflect the many graduates forced into low-paid, part-time, semi-casual jobs, whereas we are talking about the pay rates being offered to those joining a profession.”
Ah, no, that’s not how it works. At which point we’ll call into evidence Paul Krugman:
Wages are determined in a national labor market: The basic Ricardian model envisages a single factor, labor, which can move freely between industries. When one tries to talk about trade with laymen, however, one at least sometimes realizes that they do not think about things that way at all. They think about steelworkers, textile workers, and so on; there is no such thing as a national labor market. It does not occur to them that the wages earned in one industry are largely determined by the wages similar workers are earning in other industries.
It’s not just that private sector graduate wages are relevant it’s that they’re a major determinant. And yes, teachers should know this stuff otherwise why are we employing them to teach reality to the next generation?
We’re tempted to mark the report card “Must try harder” but we’d hope for some evidence of basic understanding first.