If only our rulers understood the numbers they use to rule
This particular example is from Caroline Lucas but similar examples of not having a clue abound:
The UK is also host to grotesque levels of inequality. More than 4 million children are living in poverty. Two-thirds of the country’s highest earners live in London and the south-east,
The measurement of poverty is one of relative poverty. Less than 60% of median household income. But note, importantly, that it’s a measure of national income.
Yes, it’s entirely true that the high earners are concentrated where earnings are high. But it’s also true that costs are higher in that SE of England. On the general basis that people having more money puts up prices.
If we do as we should, which is measure the only sort of poverty that can be of any importance, that of consumption, we find that British poverty - and, if you wish to talk about the far less important inequality that too - significantly diminishes. Precisely because so much of both is measured using national numbers over a country which varies wildly in costs.
To illustrate, if Scotland became independent than English poverty would rise. The average income North of the border is lower than that South, meaning inclusion in the British average reduces it. Equally, if London left the UK then English poverty - despite the massive loss of tax revenues, of incomes - would fall. This is entirely unlike most European countries or the US, where regional inequalities match rather well with national. US state level Gini measurements are, for example, clustered around the national number, quite unlike our own such numbers.
A measurement of poverty where if the richest part of the country leaves poverty reduced is not a sensible measure of poverty now, is it? Equally silly is one where if a poorer area leaves then poverty rises. But those who would rule us do seem to keep using measurements which just don’t make sense.
Sticky mess at DCMS: When are the porn laws coming?!?!
The Department of Culture, Media and Sport (DCMS) are incapable of answering one simple question: when will they be blocking our porn?
Join The Campaign to Repeal the Porn Laws
The Adam Smith Institute has launched a campaign to Repeal the Porn Laws: the introduction of an age verification filter on adult content, which can only be bypassed by buying a porn pass from a local shop or entering credit card details or photo identification online. This seriously threatens our freedom, undermines our privacy and won’t even work.
But confusion has emerged about when this is happening.
Today an article in The Times was “amended to remove reference to an April 1 launch date for the new regulations (italics original)”. Meanwhile, numerous news sources reported today that the scheme has been delayed until the end of the year – which also appears to be untrue. (This was based on the misreading of a media release from last year.)
This has been a long-running affair.
This delay is thanks to repeated incompetence. It wasn’t until February 2018 that the government selected the regulator, British Board of Film Classification (BBFC). The BBFC then took until October 2018 to consult on and release guidelines for the scheme which were not approved by Parliament until December 2018. Peers even raised concerns about giving substantial statutory powers to the BBFC, a private company, and that one organisation would both make determinations and be responsible for appeals
Today a DCMS spokesperson told the Mirror that the rollout plans “will be announced shortly”.
The simple fact is: DCMS is a total mess. We don’t even know when we will find out when the porn laws will be introduced.
Perhaps it’s time to abandon this sordid affair and just: Repeal the Porn Laws.
International Whisk(e)y Day
I am never quite sure who it is that designates which days of the year are assigned to various celebrations. I note that June 4th is World Cheese Day, and July 7th is International Chocolate Day. On March 27th, however, we celebrate International Whisk(e)y Day. That peculiar spelling is there because Scottish, Japanese and Canadian whisky is spelled without an ‘e,’ whereas American and Irish whiskey does include one. Despite the intense rivalry between the different types of whiskies, we are meant to celebrate all of them on March 27th, and perhaps to hunt down the bars that are offering specials on the drink.
Whisky (or whiskey) is a distilled alcoholic beverage made from fermented grain mash. Several types of grain may be used, depending on the country and the style. It is usually aged in oak casks. The name derives from the Gaelic version of “water” or “water of life,” corresponding to the Latin “aqua vitae.” The drink itself is several centuries old in both Scotland and Ireland, but so, unfortunately, is the taxation that authorities extracted from its production. At one stage it was estimated that half of all whisky in Scotland was produced illegally in homemade stills, and done at night so the smoke from the stills would not be seen. This gave it the nickname of ”moonshine.”
While most moonshine has now disappeared, the tax that instigated it has not. The Treasury has discovered a delightful way to extract even more from it. First they put on an excise duty, then on top of that they levy VAT. This means that they impose a second tax upon the first tax. This brings the current tax to 74%, meaning that the government takes £3 out of every £4 that customers spend on whisky.
Intriguingly, there seems to be a kind of Laffer Curve that prevents revenues from whisky rising when the “spirit level” of tax increases. Revenues from it have dropped with budget increases. A 2% cut in spirits tax in 2015 produced a 4% rise in revenue, whereas it dropped more than 7% in the first quarter of 2017-2018 when taxes on it were increased, reversing a 7% increase in 2016 when the duty was frozen. Sales went down by a million bottles when the last increase was imposed. HM Revenue and Customs figures show that spirits duty receipts increased by £228 million to almost £3.77 billion between February 2018 and February 2019 - a 6.4% on the same period in 2017. This was after the tax was not increased.
The Scotch Whisky Association now has good empirical data to back up their case that more competitive tax rates, compared to other alcohol taxes, would boost Treasury revenues. When the tax is raised, people consume less, and the tax take declines. When the tax is frozen or reduced in real terms, sales go up and revenue increases. Obviously the nannies at Public Health England will not like where that leads, but the message that stands out is plain. If the Treasury wants more to spend on public services, they should cut the tax on whisky. On International Whisk(e)y Day we can all drink to that. Cheers!
Sit down, relax, you'll save the NHS money as you do so
It gets more than a little annoying having to keep pointing out the same basic facts about reality. Surely just the one exposure to our wisdom leads to the world changing its mind? Or perhaps not. The particular point here being that people dying young saves the NHS money, not costs it. This is true of smoking - not treating someone as they die of lung cancer is cheaper than another 20 years of hip implants followed by Alzheimer’s care. So too of obesity, heart disease and so on.
It is the chronic diseases of old age which cost the fortunes to treat, not the imminently life ending catastrophic ones. We have a health care system which at least claims to offer lifetime care thus dying young - although after retirement and that date when we stop paying into the NHS - and quickly saves the system cash.
Thus part of this is wrong:
Sitting or lying down for long periods during the day is not only bad for your health it could be the cause of almost 70,000 deaths and cost the NHS at least £700m a year, new research has revealed.
Scientists have previously flagged that sedentary behaviour increases the risk of a number of diseases as well as a premature death.
Now experts have looked into the financial burden of sedentary behaviour in the UK, revealing that sitting or lying down for at least six hours a day is behind £424m of spending on cardiovascular disease, £281m on type 2 diabetes and £30m on colon cancer alone.
“We don’t have clear guidelines [on sedentary behaviour] yet but any increase in activity is beneficial to your health,” said Leonie Heron, first author of the research from Queen’s University Belfast.
There are most certainly costs to you or we of not walking around. That sort of general fitness is valuable to us. And there’s serious weight put on the idea that the one physical activity we humans are really good at is walking. To the extent that some say homo sapien’s early hunting method was to walk the prey to death. We can happily manage 20 to 25 miles a day at a steady pace, whichever ungulate we were after having to stop for a serious breather over those sorts of distances.
But private costs to us in years not lived is not the same as cash costs to the NHS of our not doing so. The numbers run in the opposite direction. Our dying early and unfit saves the NHS money, not costs.
There is also that other issue, £700 million is real money, certainly, but it’s a rounding error in the £150 billion or so we spend on that NHS.
A new word for crooked politics
The word "gerrymander" was first used in the Boston Gazette on March 26th, 1812. It referred originally to the procedure by which electoral districts are redrawn to benefit the party in charge of the redistricting. Governor Elbridge Gerry of Massachusetts signed a bill that altered the district boundaries for the state senate election to the benefit of his own party. One of the districts had such a contorted shape that it was said to resemble a salamander. The paper christened it a "Gerry-mander." The hyphen was later dropped, and the word came to be used both as a noun and a verb.
There are two principal ways of altering boundaries to make elections unrepresentative of overall support. One is called "cracking," and involves setting boundaries that give one side a modest majority in every district. Thus, an area with 10 districts, where support is split 60-40, can be gerrymandered so that the larger party wins every seat by a similar margin, leaving the 40% without any seats at all.
The second is called "packing," and involves arranging it so that all of the minority party is concentrated in one district. They could win this with a huge majority, but lose all the other seats. In both cases the boundaries are set so that large numbers of opposing votes are wasted. California redrew its district lines to favour incumbents, so that only one seat changed hands in 10 years. A 2010 referendum entrusted an independent body called the California Citizens Redistricting Commission to redraw the boundaries more fairly. The result has been to give California several 'swing' districts in which the incumbent might be defeated. For the US as a whole, though, the proportion of incumbents returned to the House rarely dips below 90% and is often 98%.
Although gerrymandering originally referred to redistricting malpractice, the word has broadened to include other types of electoral fixing that, although legal, are designed to deprive some electors of representation. In the UK there is an independent review of Westminster constituencies that tries to keep roughly the same number of voters per constituency, with exceptions made for the more lightly populated areas of Scotland and Wales. While a party cannot set boundaries, it can vote not to implement a review before an election if it thinks it will lose out. The last review, which recommended cutting the Commons from 650 to 600 seats, has yet to be implemented because the Labour and Liberal-Democrat parties voted to postpone it, standing to lose more seats than the Tories.
The basic lesson to be learned from all of this is that politicians will gerrymander to their advantage if they can, and that independent bodies set outside the political process should be the arbiters of what are fair and reasonable constituency boundaries, and what count as legitimate tactics. Even this is no guarantee, however, as the UK’s Electoral Commission has shown. Charged with ensuring a fair vote in the 2016 EU referendum, it has been visibly and heavily biased towards the Remain side, pursuing alleged breaches of spending rules by the Leave side, while ignoring or glossing over those committed by the Remain campaigners. The behaviour of this supposedly impartial body could be interpreted under the broad definition as gerrymandering.
Incentives to house vulnerable people - if this is what it costs this is what it costs
A complaint that local councils are having to make extra payments to landlords to house vulnerable people:
Cash-strapped London councils are paying private landlords more than £14m a year in “incentives” simply to persuade them to house homeless people, the Guardian can reveal.
The sweetener payments of up to £8,300 each were made to landlords more than 5,700 times in 2018 to house people who were either homeless or considered at risk of homelessness, freedom of information requests have revealed. The payouts are made in addition to rent and have been branded as ludicrous by housing campaigners and intolerable by councils.
If this is what it costs to house people then this is what it costs to house people.
“It is ludicrous councils have to resort to handing out cash sweeteners to secure housing for desperate families, when there’s a much more sustainable solution: build social housing on an ambitious scale,” said Polly Neate, the chief executive of the Shelter housing charity, which is campaigning for a national social housing programme for 3.1m homes.
Building social housing doesn’t make those costs go away it just disguises them. For social housing is, almost by definition, at less than market rental. Meaning there’s an opportunity cost to the provision of social housing. There’s some amount that is the difference between market rent and the lower one being charged, money that could be but isn’t collected. That’s a cost to the system.
Sure, it’s possible to say that this isn’t a cost in the same manner but that is to ignore that very concept of opportunity costs. And whatever it is that we might be talking about while ignoring opportunity costs it’s not economics.
Our own preference, insistence perhaps, is that such opportunity costs should be made explicit. It’s far better that we pay for housing the poor openly, through housing benefit and such sweetners, rather than disguised in the opportunity costs of social housing. Simply on the basis that this way we can see quite how much it is costing to house the poor.
And if we see in the accounts that full and horrendous cost then that will increase the pressure to actually solve the problem properly - free planning permissions so that more houses are built and thus market rents come down. We actually need to see those proper costs so that we end up, eventually at least, doing the right thing.
Socialism – the Failed Idea That Never Dies
You might think that a book about Socialism, the failed idea, would detail the catastrophic results that attempts to build Socialist societies have achieved in practice. You would be wrong. In Kristian Niemietz's new book these are taken as read. The horrors of Stalin's gulags and mass murders are all assumed, as are the mass starvation and purges of Mao's China. The utter failures of North Korea, Albania and the others, up to and including Venezuela, are treated as fact, which they are. The book concerns itself with quite another question. Why, given the overwhelming evidence of what Socialism has achieved, have Western academics sought to deny that any of these examples featured it?
That they have denied every single example as "not Socialism" emerges overwhelmingly from the quotes Kristian cites. That they originally said each one was Socialism is equally shown. The leaders who introduced it thought and said it was Socialism, too. The pattern is one of enthusiasm that a great new experiment in living is taking place. True Socialism is being tried, and a society will live in fairness and harmony, with production in the hands of the workers. Western left-wing intellectuals rave about the wonders it is achieving. Some of them go as pilgrims and return to laud it.
They begin to distance themselves when problems emerge, as they always do. They do not initially denounce it; they just stop talking about it. Only finally, years later, do they shrug it off, claiming it never was 'real' Socialism. So the Soviet Union, China, Cambodia, North Korea, etc., were not socialist, none of them. The question is why did they first accept that it was and praise it, only to retract when its results were evident?
Kristian posits an intriguing answer. He highlights the Gary Lineker fallacy. Lineker jokingly defined football as "a game in which 22 men chase a ball for 90 minutes, and in the end, the Germans win." Fine, but what happens if a game takes place and the Germans don't win? Clearly, the game can't have been football, because Germans winning is part of its definition. The point is that the definition has included its outcome, not just its institutional characteristics (the rules of the game).
The left-wing intellectuals treat Socialism similarly, defining it by its outcome. If it doesn't succeed in bringing about the said fairness and harmony with production in the hands of the workers, then it can't have been Socialism. And out of the window goes the real world, the one we live in. If we were to say that Socialism seeks to achieve these goals, we'd be able to judge if it has ever succeeded to any degree. Because it never has, we'd be entitled to conclude that it doesn't work. Kristian says it's like performing a raindance. If it is done as an attempt to bring rain, we'd be able to judge how effective it was in practice. But if a raindance is defined as "a dance that brings rain," then any dance that didn't do that was clearly not a raindance.
Kristian asks why Socialism is so popular today, especially among young people. The obvious answer is that they lack experience of the world and are happy to dwell in a world of theory untempered by it. A less obvious answer, he tells us, is that socialism feels right. That stuff about equality and fairness appeals to our instincts. Capitalism, by contrast, feels wrong. It is a hard exercise to override those feelings and look at the facts of what each achieves in practice.
This suggests that much work is needed to put across that message, and we might start in academe.
Socialism — the Failed Idea That Never Dies is available to buy on Amazon, and can be found in pdf form on the Institute of Economic Affairs’ website.
The man who saved a billion lives
One of the most influential figures of the 20th Century was born on March 25th, 1914. His name hardly resonates with the man in the street, but Norman Borlaug, so-called "Father of the Green Revolution," was the agronomist whose work developing more resistant and high-yielding crop strains, combined with the use of new technology and techniques, virtually disproved the pessimistic thesis of Malthus single-handedly. In doing so, he also made the best-selling doomsayer Paul Erlich look even more ridiculously wrong than he already was.
As a child and teenager, he worked the family farm, and was taught in a one-room one-teacher school in rural Iowa. He went on to gain degrees in forestry, plant pathology and genetics. In Mexico he bred a series of high-yield, disease-resistant, semi-dwarf wheat, and took the best plants of each crop to develop properties that would make them more resistant to the plant pathogen, rust, and other parasites. By breeding dwarf crops, he made them waste less energy in growing long stalks, and less prone to fall over in the wind and rain. He was able to grow varieties that had larger heads with more cereal, and increase production per acre.
Under his team Mexico went rapidly from being an importer of wheat to being an exporter. He did this by introducing a double season for wheat, and by developing multiline varieties to grow together in the same field, to increase pest resistance through genetic variation.
Borlaug went on to Southeast Asia, introducing his strains and techniques to India and Pakistan and hugely boosting their crop yields. In his 1968 book, "The Population Bomb," Erlich had said that humanity was doomed to mass starvation. He said, "I have yet to meet anyone familiar with the situation who thinks India will be self-sufficient in food by 1971," and "India couldn't possibly feed two hundred million more people by 1980." It was, it did.
His team went on to develop high yield, semi-dwarf rice for use in China, boosting productivity per acre there as well, and developed and popularized the new crop varieties in South America and he Middle East. Food production was increasing, pace Malthus, faster than population was. The "Borlaug Hypothesis" suggested that increasing food production on current agricultural land made it less necessary to cut down forests in order to grow more food.
He criticized some Western environmentalists who favoured "traditional" (i.e. subsistence) agriculture, suggesting that if they were to spend a month on a poor country farm, watching the people there struggle each day to grow enough food to survive, maybe they would be more favourable to the use of modern farming methods.
Borlaug thought that genetic modification was the key to the next agricultural revolution, pointing out that humans have been modifying crop strains for millennia. He said that GM crops would enable the world to feed a population of 10bn, the level at which it is expected to stabilize.
Borlaug was awarded the Nobel Peace Prize in 1970, and subsequently the Presidential Medal of Freedom and the Congressional Gold Medal. He demonstrated, by the techniques he pioneered, that the people of the world can survive and prosper if they move on from the traditional ways to embrace the challenges of change. He is reckoned to have saved a billion people from starvation by his initiatives and his life's work. This is ten times the number that were killed by socialist regimes. As epitaphs go, that's one worth writing.
Well of course HS2 should be cancelled, it's a ghastly waste of money
The argument in favour of national, democratic and political, control of parts of the economy is that decisions can and will be made on more than purely private profit grounds. Things such as the public interest can and will be considered too. The argument against national, democratic and political, control of parts of the economy is that decisions can and will be made on more than purely private profit grounds.
Which is how we get HS2:
The Treasury chief who initially signed off on funding for High Speed 2 has called for the £56 billion project to be scrapped, saying that it would fail a "rigorous cost-benefit analysis".
It fails even a reasonable one. The sums depend upon the value of time saved by the faster train set. Which is calculated by assuming that people on a train can do nothing other than be on the train waiting to arrive. The mobile phone, mobile internet, means that this is an incorrect assumption. The cost benefit test is failed purely on this point.
Lord Macpherson of Earl's Court, who was permanent secretary at the Treasury until 2016, said the rail scheme "always had a low economic return compared to other transport projects" and was based on technology that was likely to look obsolete by the time it is finished in the 2030s.
Quite so, it’s a 19th century technology about to be entirely overcome by the 21 st century one of the driverless car. Other than the baying mob chasing the contracts to do so there really is no good reason to build it.
So, obviously enough, we should stop doing so.
Venezuela Campaign: Trading oil for repression
The Venezuelan and Cuban totalitarian regimes have built a symbiotic relationship based on oil, in which Venezuelan oil keeps Cuba’s centrally planned economy afloat, and Cuban military, intelligence, and political services allow Maduro’s regime to counter and suppress political dissent.
Every day more disturbing facts about the relationship between Cuba and Venezuela emerge. The New York Times has just published an exposé about how Cuban doctors in Venezuela are instructed to use the provision of medical treatment as a means of political control. This ranges from handing out medicine in return for sign-ups to the ruling socialist party, to outright denial of treatment to opposition supporters with life-threatening ailments.
Sixteen Cuban doctors have come forward to discuss these practices. According to one, “It became a form of blackmail: ‘You’re not going to have medicine. You’re not going to have free health care. You’re not going to have prenatal care if you’re a pregnant woman.” The doctors revealed that the Maduro regime established “electoral command centres” inside or next to clinics, with Socialist Party operatives dispatching doctors to pressure residents to vote for the ruling party. Another doctor, Yansnier Arias, told of how a 65-year-old opposition-supporting patient with heart failure entered his clinic urgently needing oxygen. “I argued with my colleagues over and over,” he said. “Yes, of course there was oxygen, but they didn’t let me use it.”
Despite the collapse of much of the Barrio Adentro health programme under which they were employed, there are still thousands of Cuban doctors in Venezuela, because their other main function is to make money for the Cuban regime. The doctors themselves are paid next to nothing, and even some of that is held back in Cuba pending their safe return. It is estimated that of every $100 Venezuela pays for their services, the Cuban state keeps $96. Billions of dollars have been paid to Cuba for these services.
Cuba is also paid for the 15,000 Cuban military and intelligence officers stationed in Venezuela. They play a vital role in maintaining the regime, and the details become ever more apparent. Ronald Dugarte, a Venezuelan navy lieutenant assigned to the feared counter-intelligence body DGCIM, took concealed video footage of torture being carried out on prisoners. He confirmed that Cubans control all the intelligence directorates and give orders to Venezuelan officials. “Cuban intelligence performs mixed operations between the Venezuelan and Cuban military. Their job is to monitor all the military units. The moment the Cuban intelligence militia enters, they give orders of how to perform the intelligence work”, he said.
And of course, the Venezuelan regime funds this brutal and horrific repression with oil. Highly subsidised oil shipments to Cuba previously exceeded 100,000 barrels per day. Recently the collapse of Venezuela’s oil industry has reduced this to some 55,000 barrels per day, which still accounts for some 40% of Cuba’s total oil consumption. Cuba has also received ‘investments’ from Venezuela, such as the billions of dollars paid to rehabilitate Cuba’s Cienfuegos refinery so it could refine up to 65,000 barrels per day of heavy Venezuelan crude for both export and domestic use. In 2017 Cuba simply confiscated Venezuela’s 49% stake in this refinery, apparently in compensation for Venezuela’s failure to deliver as much subsidised oil as anticipated.
The collapse of Venezuela’s oil industry is depriving the regime of its black gold. Without the means to fund brutal crack-downs on dissidents, it is surely an inevitability that the regime will collapse. Without access to subsidised oil, the Cuban regime may well follow. We must hope that the seeds for new democratic regimes in the Caribbean have been sown, and that successor regimes learn from the mistakes of their predecessors.
More information on the Venezuela Campaign can be found on their website.