It's a start on tariffs but it's not enough
We should, of course, take our good news where we can get it. So, this is good news but it’s not enough either:
The Government may cut up to 90pc of UK trade tariffs if Britain leaves the EU without a deal, according to reports from Sky News.
The Department for International Trade (DIT) is reportedly intending to slash between 80pc to 90ps of all tariffs on imported goods, with some being eliminated entirely.
Key items that will retain their protection include cars, beef, lamb, dairy and some textiles. But the component parts used to make cars, some finished food products and some farm produce including cereals would be scrapped.
The cuts, which have been agreed by the Cabinet according to reports, are intended to stop price increases and protect companies from overseas competition.
We should not be protecting producers from competition. As The Guardian, of all places, has just pointed out about the irruption of Aldi and Lidl into the British marketplace:
The British supermarket giants, whose 7% profit margins were the world’s highest,
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By sucking in shoppers and, as former Aldi UK CEO Paul Foley puts it, “sucking the profitability out of the industry” – profit margins of 2-3% are now the norm – the two German-owned companies have forced the “big four” supermarkets to take drastic measures.
That’s a simple transfer - and a large one - from the capitalists and producers to consumers. That’s just what competition does and is the value of it too.
So, why would we want to protect British producers to the cost of consumers? Why would we protect car and textile producers from foreign competition and not retail stores even?
Unilateral free trade, as in 1846, being the correct and only correct stance to take.
Sure, it’s going to be tough convincing people of this. There will always be those misguided enough to insist that this or that needs protection. Not all of them will be producers themselves to be protected either. The answer to which is to make that protection obvious and open. It must be a direct transfer from taxpayer funds to those producers instead of some indirect method like tariffs or other price rigging. For that’s the only way that the costs of the protection become visible. And as we humans work it’s only the visible things that we’ll really calculate the pros and cons of.
Sure, OK, hill top farmers will all go bust without subsidy. Make that subsidy a clear payment so that we can all see it and decide. Do we want to pay that subsidy or would we be happy to see the uplands rewild? The same is true of all and any other subsidies.
Tariffs and import quotas should be set, entirely and wholly, at nothing and infinite respectively. Any allocation of subsidy - something we oppose but realise not all do - must be made out in the open so we can all consider the value of it.
Ayn Rand's legacy
Ayn Rand died on March 6th, 1982, leaving behind a controversial legacy that still engages millions of people worldwide. Her book, "Atlas Shrugged," was voted the most influential in their lives by members of the Book-of-the-Month Club in response to a 1991 Library of Congress survey.
Although she wrote books such as "For the New Intellectual," and "Capitalism - the Unknown Ideal," her philosophy was accessed by many readers through her fiction writing. She left post-revolutionary Russia and settled in the US, where she began script writing in Hollywood. Her best-selling, "The Fountainhead," features a brilliant architect who refuses to compromise his principles, espousing a radical individualism central to Rand’s philosophy. The book’s success, and that of its movie adaptation starring Gary Cooper, projected Rand to a wider audience. Her later work, Atlas Shrugged (1957), depicting a mysterious strike by leading innovators and industrialists, still sells hundreds of thousands of copies a year.
She called her philosophy "Objectivism," supposing that reality exists as an objective absolute, independently of any conscious mind. She thought knowledge to be based not on faith, but on sense perception, the validity of which she considered axiomatic, and which was interpreted through reason.
In ethics, she argued for rational self-interest as the guiding moral principle, and said the individual should "exist for his own sake, neither sacrificing himself to others nor sacrificing others to himself."
Her political philosophy emphasized individual rights, including life, liberty and property, and she supported laissez-faire capitalism because in her view it was the only system based on the protection of those rights. This led her to oppose any government action beyond those needed to protect individual rights.
Controversially, she opposed altruism as a denial of rational self-interest, saying that no person should live his or her life for the sake of another. Although some deride this as "selfish," in her view there is no conflict of interests between rational individuals; they recognize the value of respecting each other’s rights consistently, sacrificing neither themselves nor others.
A biographer, Jennifer Burns, referred to her as "the ultimate gateway drug to life on the right," and it is true that she leads many, by justifying their belief in themselves, to support capitalism and to oppose all forms of collectivism. Rand has a huge following today, especially among young people, attracted by her philosophy of rational individualism, and by the way the Objectivist view of knowledge meshes in with its ethical and political stance.
She remains massively popular, even a cult figure in some circles, and has been featured in several documentaries. Her likeness even appeared on a 1999 US postage stamp. Each year the Adam Smith Institute hosts an Ayn Rand Lecture to commemorate her ideas.
The technological revolution will make the NHS cheaper, not more expensive
One of the tropes we see around often enough is that we must spend vast sums more, invest ever more heavily, in the National Health Service because new technologies are going to raise the cost of health care. This is not actually so for a fairly obvious reason. Why would we adopt more expensive methods of doing something?
Quite, we’ll only - as is true in all other areas of life - start to use a new technology if it is better or cheaper than the one we’ve previously used. Some of these new technologies being considerably cheaper too:
Smartphone apps are five times more effective at diagnosing serious heart conditions compared to standard tests, a University of Edinburgh study has found.
Better and also cheaper:
After 90 days, the smartphone device helped doctors diagnose 56 per cent of patients, in an average time of 9.5 days.
However, only 10 per cent of patients given standard care were diagnosed, in an average time of 43 days.
The technology also cut the cost of diagnosis from £1,395 to £474, researchers said.
That’s not an argument in favour of increasing spending upon the NHS now, is it? It’s quite the opposite, an opportunity to sniff around and see whether it needs quite so much of our hard earned.
This has also been true of all previous medical technologies too. Vaccines are cheaper than wards full of smallpox victims. Aspirin cheaper than leeches at curing headaches. What makes health care more expensive at times is the technology which allows us to cure something we couldn’t before.
The total cost of health care in the future is going to be the balance of those two plus whatever the demographics of the population being treated are. But it’s simply not true to go about insisting that advancing technology is necessarily going to make the NHS more expensive so open those chequebooks now.
Remembering Stalin
March 5th is a day that will forever be associated with Joseph Vissarionovich Dzhugashvili, known to the world as Joseph Stalin. It was on this day in 1940 that he and 5 other members of the Soviet Politburo signed an order for the execution of 25,700 Polish intelligentsia, including 14,700 military officers in what would later be called the Katyn massacre. It was a brutal attempt to suppress Polish culture in the land acquired through the Nazi-Soviet pact.
When Germany broke that pact and invaded Soviet territory, they found some of the victims' remains and told the world of the crime. After the war the Soviets claimed the Nazis had perpetrated the massacre, but the date confirmed it had been done under Soviet, not Nazi, occupation, and documents that emerged when the Soviet empire collapsed have confirmed their guilt.
It was also on March 5th, but in 1946, that Churchill made a speech in Fulton, Missouri, telling the world that “From Stettin in the Baltic to Trieste in the Adriatic, an iron curtain has descended across the continent.” Many Americans had been sympathetic to their wartime Russian allies who had borne such suffering, but President Truman wanted to alert them to what the Soviets were really like, and thought that they would take it better if it came from the man they regarded as a hero, Winston Churchill.
In that speech Churchill alerted them to the fact that half of Europe was now, in effect, a Soviet prison, with its peoples unable to leave, and forced to act in accordance with the instructions of their masters. Undemocratic puppet regimes, sustained by Soviet military might, stamped out free speech, a free press, and the rule of law. Furthermore, the failures of socialism doomed them to decades of want and poverty while the West streaked ahead in freedom and prosperity.
That "iron curtain" remained in place for decades, and marked the graveyard of thousands who tried to flee through it. No-one was ever killed trying to break into the Soviet bloc countries.
It was also on March 5th, this time in 1953, that Stalin died, having ruled the Soviet Union with an iron fist for nearly 30 years. Nearly 3 years after his death, his successor, Nikita Khrushchev, delivered a speech in secret to a closed session of the 20th Communist Party Congress, a speech that denounced Stalin, detailing some of Stalin's crimes and the "conditions of insecurity, fear, and even desperation" he had created. Stalin's mummified body, which had lain alongside that of Lenin in the Kremlin's wall, was subsequently removed and buried.
While some people today affect a respect for Stalin and his socialist system, most do so without any inkling of the utter evil he personified, or of the crimes he perpetrated that matched Hitler in their scale and savagery. A large part of the world lay under his thumb for decades, with its peoples denied the basic right to express themselves and to better their lives. Like Hitler and Mao, he is remembered as a monster, and when he died on March 5th, 66 years ago, the world started to become a better place.
Talking shops or Government
Adam Smith dismissed the idea in the Wealth of Nations that international success could be achieved by a “nation of shopkeepers”. Instead, government should be “influenced by shopkeepers”, i.e. business people. His point was that government should back practical business people to get on with what they do well and not indulge in talking shops producing “strategies” that never happen.
A fine example of that distinction is the Department of Health and Social Care (DHSC) announcement on 27th February of “a new National Genomic Healthcare Strategy”. Clearly mapping genomes to detect inherited (potential) health problems and finding ways to treat them even before the symptoms arise, is a great idea. The government is right to support promising research in this area. So what, you may wonder is this “strategy”? Read down to the end of the press release and it turns out that no such strategy yet exists. The Minister said: “In order to make this a reality, I am delighted to announce that we will be working with the National Genomics Board and the broader genomics community to develop a National Genomic Healthcare Strategy.”
The National Genomics Board has 26 great and good members albeit not great and good enough to report directly to the DHSC: “The National Genomics Board will report to the Life Sciences Council via the Life Sciences Industrial Strategy Implementation Board.” The Genomics Board has its own advisory panel and then , there is the Genomics England Board which also “has several independent advisory committees that report to the board.”
And one must not forget the also recently created UK Rare Disease Policy Board and Forum. Genomics and rare diseases are intimately bound up since the former is expected to provide the solution to the latter. The UK Strategy for Rare Diseases reads as follows: “Each country in the UK will take action and develop plans to implement the strategy that best meets their own health and care systems, but will work together where it makes sense to do so.”
While the DHSC has been busy building all these new talking shops, NHS England has actually been doing something. Last July, the Chairman of NHS England reported, inter alia: “The design of the new phase of roll-out of a genomic medicine service in the NHS in England, following the successful conclusion of the 100,000 Genomes Programme. We have been undertaking a procurement process to establish seven genomic laboratory hubs, building on the 13 Genomic Medicine Centres that we set up under the 100k Genomes programme, with a view to transforming the highly fragmented pattern of genetic testing in the NHS into a national network of regional provision, with standardisation of testing through the roll-out of a National Genomic Test Directory. Genomics England Ltd., a wholly Government-owned company, is our partner in procuring sequencing and analytics.”
This plethora of DHSC talking shops, many created recently, interferes with the ability of the NHS to do its job. Judging by the variety of figures it cites, one wonders whether the DHSC even knows how many it has. Take Health Education England, for example. It has 2,000 staff and a Chairman paid more than the Prime Minister. It claims to create new clinical staff and train the existing staff but in reality it does neither: it simply hands out the NHS’s money to the universities and professional trainers who do.
The NHS, like any other large organisation, would be perfectly capable of doing that for itself and the taxpayer would save £5bn. a year if it did. That’s a healthy sum to save.
Dating apps and the terrible difficulty of planning an economy
To an economist everything is substituitable. The implication of this is that everything we use is a substitute for something else. Where it all gets rather tricky is that technology marches on, what can be used as a substitute for whicht is an ever changing feast. It is this which makes any form of planning of the economy so difficult.
Dating apps are partly responsible for a significant decrease in 24-hour alcohol licences, new research has suggested.
The number of pubs, bars and nightclubs granted permission to serve alcohol round-the-clock has fallen by a fifth over the past year, according to commercial law firm EMW.
The company said expected demand for nightlife had failed to materialise, leaving 742 late night alcohol licences in 2018, down from 919 in 2013.
The increasing popularity of Netflix and dating apps has contributed to a "cultural" shift in how people socialise, thereby affecting demand of drinking in late night venues, the research suggests.
We don’t know whether this link is true or not but let us take it as so for the moment. The argument is that late night drinking and dating apps are substitutes for each other. Possibly substituitable methods of meeting the partner of your dreams, possibly simply of a rather more earthy form of leisure pursuit.
But think of the difficulty this provides for the planner. Sure, one could be Taliban in outlook and insist that cross gender contact should simply never happen outside arranged marriage. The Southern Baptist view that sex is to be abhorred because dancing may break out has its adherents. But in general the idea that consenting adults should get on with being consenting is how society works.
So, as that planner, one might in a technologically static society think that the provision of more late night drinking places will aid in this project. But when one does so it’s necessary to take account of simply everything else too. The military invented GPS to know where to drop the bombs - who knew that this would lead to proximity dating apps? Steve Jobs thought a touchscreen on a phone was a pretty neat idea - who knew this would lead to so much touching?
Yes, we could indeed predict that humans will use any new technology, at least test it out for its usefulness concerning, for sex because that’s what humans do. We’re all descended from those who found sex interesting after all. But how can that rational planner looking at opening hours hope to consider and predict the results of dateless nerds playing with code in San Francisco upon pub usage in Brentwood?
It’s not possible to consider all of these things which is why that planning is simply too difficult to actually do. We’re left with the chaotic experimentation of the market to sort it all out for us.
A red-letter day for liberty
On March 4th in 1789, one of the most significant events in the history of liberty occurred. The first Congress of the United States met in New York City to give effect to the US Constitution and to propose the Bill of Rights, the first ten amendments to the Constitution. Largely crafted by James Madison, the amendments add guarantees of personal freedoms and rights, limits on government powers, and specify that all powers not given to Congress by the Constitution are to be held by the states or the people. They were done largely to meet reservations by anti-federalists.
The First Amendment guarantees freedom of religion, free speech and a free press, and the right to peaceful demonstration.
The Second upholds the right to bear arms.
The Third bans soldiers being quartered in private homes.
The Fourth rules out unreasonable searches and seizures.
The Fifth protects against double jeopardy and self-incrimination, the one often claimed by gangsters. It also guarantees due process and compensation for any property seized.
The Sixth establishes the right to a speedy and public trial, to trial by an impartial jury, to be informed of criminal charges, to confront witnesses, to compel witnesses to appear in court, and to the assistance of counsel.
The Seventh guarantees jury trials in Federal cases involving over 20 dollars.
The Eighth prohibits excessive bail and fines, and "cruel and unusual punishments."
The Ninth states that there are basic rights that lie outside the Constitution.
The Tenth Amendment says that the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States, or to the people.
This is the one that is sometimes abused by withholding Federal funds from states that refuse to comply with Federal rules. This device was used to make them set universal 55mph speed limits until these were modified under President Reagan before their abolition in 1995, and is used to enforce a national minimum 21-year drinking age.
Taken together, the Bill of Rights amendments give written guarantees that US citizens can appeal to in court, and can be taken to the Supreme Court itself for interpretation. They have many times been used to strike down Federal or state laws that are judged to be in violation of them. They thus provide a model of written fundamental laws that protect the liberty of citizens from arbitrary abuse. They also protect individuals from new laws that would restrict hem, even if these enjoy widespread popular support. They put liberty ahead of democracy, which is where it should be.
What naughty boys and girls Facebook are
A quite wondrous complaint about Facebook from Carole Cadwalladr in The Observer here. If laws are not to Facebook’s liking then Facebook might not invest in those places where laws are not to Facebook’s liking. Isn’t that just the most horribly undemocratic thing for a private sector organisation to be doing?
Facebook has targeted politicians around the world – including the former UK chancellor, George Osborne – promising investments and incentives while seeking to pressure them into lobbying on Facebook’s behalf against data privacy legislation, an explosive new leak of internal Facebook documents has revealed.
The documents, which have been seen by the Observer and Computer Weekly, reveal a secretive global lobbying operation targeting hundreds of legislators and regulators in an attempt to procure influence across the world, including in the UK, US, Canada, India, Vietnam, Argentina, Brazil, Malaysia and all 28 states of the EU. The documents include details of how Facebook:
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Threatened to withhold investment from countries unless they supported or passed Facebook-friendly laws.
The complaint betrays an interesting mindset, doesn’t it? Investment is simply something that companies do. Ought to do in fact, it’s a right that sovereign nations have that foreigners should come and spend their money. To then be regulated and taxed and to threaten to withhold said investment as a result of the regulation or tax is some horror to be protested about.
Except, of course, every economic actor responds to the incentives in front of them. Change the incentives and you’ll change the behaviour. Set corporation tax at 120% and watch as no foreigner at all ever invests in that newly poorer country. Insist that a CEO is criminally liable for a racist joke made by a social media user and you’ll limit the amount of social media CEOs willing to enter that market.
This should be obvious to all and yet that very complaint shows that the logic has completely passed by. What our laws are, how welcoming or not we are of foreign investment, is going to determine how much foreign investment there is. How could it ever be different?
It might well be true that we should - or perhaps should not - regulate social media more or less. But to whine that doing so might have implications concerning the amount of social media we then get is ludicrous.
Venezuela Campaign: An environmental disaster
Venezuela is one of earth’s 18 megadiverse countries, home to many rare and unique species. It’s little known, but in 2016 Nicolás Maduro began to threaten that by designating around 112,000 square kilometres of pristine tropical rain forest as a mining belt.
The ‘Orinoco Mining Arc’ is home to 198 indigenous communities, jaguars, giant anteaters, 850 bird species, and a great many more species. All are now threatened by mining activity.
This plan was originally conceived by Maduro’s predecessor Hugo Chavez. As Venezuela’s oil industry slowly collapsed from the pressures of corruption and mismanagement, the regime sought alternative sources of funding. Venezuela is extremely rich in natural resources like gold, nickel, iron ore, diamonds, alumina, and coal, so mining was an attractive option for the cash-strapped regime. The environmental damage of mining operations was completely disregarded, indeed no environmental impact assessment was ever done.
Venezuela’s National Assembly explicitly voted against the plan, making the activity unconstitutional and illegal. Although Maduro proposed that the mining would be done by state enterprises in partnership with foreign investors, the latter have understandably declined to participate. In reality, criminal gangs and Colombian guerrilla groups carry out the mining under the protection of the Venezuelan military.
Dutch journalist Bram Ebus was financed by the Pulitzer Centre to investigate. He concluded that the official government policy was meant to “put a legal jacket on illegal mining called Arco Minero... run by illegal armed troops and state forces.” The International Crisis Group has reported that top military officers in Amazonas state receive $800,000 each in bribes each month to facilitate the illegal mining. This explains both why military postings in the region are so popular and why some officers are keen to perpetuate the Maduro dictatorship.
The subsoil and rivers have been heavily polluted by the mercury used in the mills to extract gold from soil. The effects on the indigenous populations have been very severe. A 2017 survey found that indigenous people living along the Guaina, Inirida and Atabapo rivers had 60 times the maximum recommended level of mercury in their blood. 92 percent of the indigenous women surveyed in the Caura river basin had mercury levels above WHO limits and 37 percent of Ye’kuana and Sanema people had childbirth problems due to mercury. This has led to some children being born with missing limbs.
The impact of mercury runoff on aquatic life can be felt throughout the Orinoco basin. Latin American scientists have highlighted the “evidence of the bioaccumulation of these toxins in fish and shellfish sampled thousands of kilometres away from the nearest mine”, and warned of the “larger regional threat” to the South-eastern Caribbean in particular.
Because the Chavistas have destroyed all independent institutions and centralised all power, there are no environmental regulatory agencies in Venezuela to prevent or limit the destruction of the Orinoco basin. Nor are the proceeds from the mining being used for any socially useful purpose. According to Ebus, “It’s stolen, absolutely stolen. The Government is not interested in cash for the good of the country. It is a kleptocracy. They are going to be thieving what’s left until they’re not in power anymore.”
This environmental spoilage will continue as long as Maduro and his cronies remain in power. The international community has turned a blind eye to years of human rights abuses and totalitarianism, and it seems determined to also ignore environmental abuse. Greenpeace and the WWF’s UK websites have only one search result apiece for Venezuela, a staggering lack of coverage of the despoliation of one of the precious few megadiverse countries on earth. It will be a tragedy of enormous proportions if Maduro is allowed to continue the environmental destruction of this precious global resource.
More information on the Venezuela Campaign can be found on their website.
The miners' strike that ended an era
On March 3rd, 1985, the National Union of Mineworkers, led by Arthurs Scargill, voted to return to work after a year-long strike, the longest and most bitter strike, and one that finished without an agreement. The NUM members put on a brave face, many marching back behind colliery brass bands, but they and everyone else knew that Britain's strongest union, the NUM, had been beaten.
There were many reasons why the 1984-5 miners' strike failed where previous ones had succeeded. Margaret Thatcher has seen how the 1974 strike had brought down the Heath government by shutting down power stations through picketing and secondary support by other unions, and was determined not to let this happen again. When a strike was threatened over proposed pit closures in 1981, she had backed down because she wasn't ready, with only six weeks of coal stocks.
By 1984 she was ready. Her union reforms had introduced secret ballots for leadership elections and before strike action, and secondary picketing had been made illegal, with the threat that court action could seize union funds. She had built up six months of coal stocks, made arrangements to hire non-unionized lorry drivers to move coal to power stations, converted some coal-fired power stations to heavy fuel oil, and ramped up the nuclear contribution to the energy supply.
NUM leader, Arthur Scargill, a hardline Marxist, was itching for a showdown to humiliate and bring down the government, as in 1974. The union had balloted its members for strike action in 1982 and 1983, but had failed to win a majority, let alone the 55% the rules required. In 1984, to avoid another ballot defeat, the NUM executive voted 69-54 not to hold a ballot, but to have some areas strike and picket others to stop them mining. The result was that some efficient and profitable pits, led by the Nottinghamshire ones, decided to keep working. Violent confrontations occurred as pickets tried to stop them, and mobile police units were established to bring in police from outside to thwart the flying pickets.
Nottinghamshire and South Leicestershire miners still working set up a new union, the Democratic Union of Mineworkers, and as the year wore on, increasing numbers of strikers began to drift back to work. Scargill drew fire for accepting a £1.5 million donation from the Soviet Union, and for opposing the Polish Union, Solidarity, as an "anti-socialist organization which desires the overthrow of a socialist state". The result was that Polish coal continued to be exported to Britain throughout the strike.
The defeat of the strike, on this day in 1985, ended the era of militant union domination in the UK. The political power of the NUM and other unions was much diminished, and union membership fell. It plunged from roughly 40% of Britain's workforce to barely 20%, and today barely 14% of private sector workers are union members.
That historic defeat help turn round Britain's economy. In 1984 the UK lost 27 million days of work to industrial action, the highest in Europe. By 2017 this had fallen to 276,000, about 1% of the number, putting the UK among the lowest. It severely damaged the unions' prestige and morale, as well as their influence. On the cultural front, it did inspire some movies, including "Billy Elliot" in 2000, "Brassed Off" in 1996, and "Pride" in 2014, based on the real-life LGBT group that raised money for the strikers. Funniest was "Strike" in 1998, which used the strike as backdrop to a savage satire on Hollywood.