Winter followed Prague Spring
April 17th, 1969, marked the final end of Prague Spring when Alexander Dubček was forced by the Soviet authorities to resign as the Czechoslovak Communist Party's first secretary. It had begun with promise when he had first been elected to the post in January 1968, and ushered in a period of liberalization. The press had been allowed more freedom from state control and censorship, and victims of previous purges under Stalin had been rehabilitated.
Dubček described his policies as “socialism with a human face,” and proposed a new constitution to guarantee civil rights and liberties, together with more genuine democracy. The Czechoslovak people were optimistic that their national identity could flourish, once liberated from the shackles of Soviet Communist conformity. Cinematography boomed with its "New Wave" of independence.
Other Communist governments looked with alarm at these events. This did not conform with how they thought the Communist grip on power should be maintained. Dubček told the Soviet and satellite governments that he could control the process, but they grew increasingly alarmed, and in August 1968, invaded Czechoslovakia and reimposed hard line controls. Dubček urged his people not to resist, but the brief scent of freedom was gone. It would be another 20 years before the country could be free again. Dubček was expelled from the Communist Party the following year, and was only rehabilitated after the 1989 overthrow of the communist regime, to be made Chairman of the federal Czechoslovak parliament.
The repression of the Czech bid for freedom had not been as brutal as the savage repression of the similar Hungarian attempt in 1956, largely because the people did not resist, but it was as thorough. The liberalizations were reversed, and the iron hand of Communism once more gripped the daily life of the people.
The lesson is that Communism and liberty do not mix. Socialism as an economic system simply does not work, and people will, if given the chance, replace it with one that does. That is why Communist governments maintain a monopoly of power that permits of no possibility of replacement. People have to endure the shortages, the shoddy goods and the deprivations because they have no alterative. The system maintains itself with the barrels of its guns.
There is now a Museum of Communism in Prague. I visited it recently and can recommend it. There are reconstructions of life under Communism, including some of its repression, but the mood is not dark. It is more mocking, making fun of Communism and its failures. There is a mock-up of a shop from that era, with an amusing commentary explaining how corruption was used to circumvent the system and its shortages. It would be useful if those advocating Socialism today were to visit it to see what it was like in practice. But of course, they would say that this "wasn't really Socialism." No real-world example ever is, because they all fail in practice.
The fracking earthquake rules aren't a mistake, they're the point
Jim Ratcliffe at Ineos is threatening to take his ball home over the rules about earthquakes and fracking. As of course he’s every right to, if the conditions for investment are unattractive then entrepreneurs can indeed go and do something else and elsewhere. This being one of the points that sensible people continually make, make taxes too high, regulation too restrictive, and new things won’t be appearing any time soon. Over time the country will be poorer than if taxes were lower, regulation less restrictive, as a result of that onward march of the application of technology which doesn’t happen.
With respect to fracking though this is the point of the regulatory regime:
Sir Jim Ratcliffe's Ineos has launched a stinging attack over the way fracking is being regulated, claiming the industry "is being stopped from moving forward".
The petrochemicals and energy giant, owned by Britain's wealthiest man and one of two companies with the right to undertake fracking in England, has threatened to walk away from operations unless regulations are loosened.
Fracking must be halted if tremors of 0.5 or more on the Richter scale are triggered - a limit Sir Jim's company wants revising to a more "sensible" level.
The point being that there are those who oppose fracking on basic, even philosophic, grounds. They were able to get that 0.5 limit put in place. Not because it’s a sensible number or anything, but so that it’s an entire and complete barrier to anyone doing any fracking. By their lights this is a Good Thing. Britain is left poorer by not being able to use a cheap and abundant energy source.
As to proof that it’s not a sensible number, the British Geological Survey lists recent earthquakes. In the first 15 days of this month there were quakes over that 0.5 limit in Silecroft, Middlesbrough, Newdigate, Blairlogie, Hodnet and County Donegal. Two of those were felt by no human being at all or whatsoever. Fracking is, under the law, banned in those places for some number of days this month. No one has been fracking in any of those areas.
Ratcliffe is stating that this 0.5 limit precludes anyone fracking effectively or economically. Yes, he’s right. But to those who instituted the limit that’s the very point. They positively insist that we must all be poorer.
Kingsley Amis opposed public funding of the arts
One of the English language’s most talented writers of the 20th Century was Sir Kingsley Amis, born on April 16th, 1922. Out of his 20 novels and 6 poetry books, he was most famous for his 1954 first novel, “Lucky Jim.” It was a best seller in the UK and US, perhaps because it captured the postwar mood. It earned Amis a place among the “angry young men” who railed at the inadequacies and injustices of life in Britain.
Amis was a Communist at Oxford, but gradually swung right, as did so many of the writers and artists of his generation. He wrote the essay, “Lucky Jim Turns Right” in 1967, citing the Soviet 1956 invasion of Hungary as the final nail in the coffin.
He spoke at an ASI lunchtime conference, and published an essay with us, republished in the Daily Telegraph, opposing public funding for the arts. His basic case was that public funding, administered by civil servants and quangocrats, corrupts the arts. Instead of producing what they are impelled to produce, or what they think will sell, artists and writers direct their output to what will tick the bureaucrats’ boxes and attract grants from public funds. This was not what art should be about, he said. Nor was it the job of public servants to promote their version of what art should be, and foist it on the public at taxpayers’ expense.
Amis was a real character. He drank and smoked heavily. At the ASI luncheon, when offered red or white wine, his face fell and he said, “Oh, isn’t there any real drink.” A triple neat Glenlivet mollified him, and he had two more of those before lunch. He once wrote, “The words I most dread to hear are ‘Shall we go straight to the table?’”
He had a strict self-disciplined schedule that separated his writing from his drinking. He wrote in the mornings, with a target of 500 words minimum every day. Only at lunch did his drinking day begin.
He wrote light-hearted books bout booze, and famously declared, “No pleasure is worth giving for the sake of another two years in a geriatric home in Weston-Super-Mare.” He was spared that fate when he died following complications from a fall and a stroke at the age of 73. His reputation has lasted well.
How to reduce available rental housing and push up rents
The terms upon which a contract is struck do rather change the price at which it is concluded. We just say this with the Stagecoach/Virgin negotiations over a rail franchise. Being left with unknown and possibly open ended charges to fill a pensions deficit meant that no price could be reached at all.
Which is the sort of thing that should be kept in mind when contemplating this:
Landlords will no longer be able to evict people at short notice without good reason under plans to create “open-ended tenancies”.
Theresa May will bring an end to "no fault" evictions which give tenants as little as eight weeks' notice after their fixed term contract has come to an end.
Landlords will instead have to take tenants to court and provide “legitimate reasons” for removing people from their properties.
The Government said it was taking action to end no-fault evictions because it is one of the biggest causes of family homelessness.
Back when tenants could only be got out for reasons to be proven in court we had pretty much no private rental market. It was the introduction of assured shorthold tenancies which recreated this vital part of the economy. What this change does is take us back to those bad old days - some of recall trying to find somewhere to live in them - when it wasn’t rent which was the problem, it was finding physical space available at all.
This will reduce the number of properties put on the rental market, that will lead to higher rents. For whatever the contract says we’re still not changing the laws of supply and demand.
There is a much easier method of gaining the same professed goal. Just allow those extant contracts to be for longer periods of time. Those who desire the greater certainty will be able to get it by paying for it. And if that’s what they actually want then they will.
How the UK Government is trying to close the door to asylum seekers
Ever since the end of the Second World War, the UK has always been known for its welcoming and supportive attitude towards those who have been displaced from their own countries. This tradition of accepting asylum seekers, however, is now being undermined in a number of different ways by the UK Government. According to official Home Office statistics, the success rate for asylum applications was 11% lower as of the end of March 2018 than in the previous year.
Fostering a culture of resentment and suspicion
Despite claims for asylum in general being significantly lower in the UK than in Germany, Italy or France, there is a rising feeling of hostility towards asylum seekers in Britain. Sajid Javid has taken a hardline approach since his appointment as Home Secretary and the tabloid media regularly suggest that Britain is overwhelmed by the amount of people arriving in the UK to seek refuge.
The Government’s ‘hostile environment’ policy that was enforced in 2012 attempts to actively discourage illegal immigration and prevent those with no genuine right to claim asylum from remaining in the UK. The problem is that Javid has cast doubt on those with valid cases for asylum, as exemplified by his decision to depict the arrival of 200 small boats from France carrying asylum seekers over the Christmas period as a “major incident”. The Home Secretary publicly questioned whether people making this dangerous and desperate journey were actually genuine, which is a far cry from the UK’s longstanding stance of being a nation that openly accepts and accommodates those in need.
Red tape and “spying” claims
The Government’s continuing hostile agenda is also evident in the revelation that the Home Office is tracking asylum seekers’ whereabouts. Asylum seekers are currently entitled to £37.75 per week while their claim is being processed in order to buy basic items such as food and toiletries, which is allotted through Aspen debit cards. According to leaked information, the Government is using transaction information on the credit cards to monitor the movements of asylum seekers and subsequently penalising them if they travel beyond their ‘authorised’ city, even if their journey is absolutely essential such as a court date or attending a funeral. The Times Scotland reported on the issue and found in a report by the Home Office that 186 asylum seekers had their support halted last year “as a result of a referral regarding the Aspen card usage”.
Asylum seekers are also being subjected to “unacceptably high delays” in the processing period for their claim, during which time they are left in limbo and unable to build a new life for themselves in the UK. Official Government guidelines state that claims should be resolved within 6 months, but in reality, the waiting time is considerably longer, and it has been revealed that as many as 1,600 asylum children have been kept waiting for over a year before receiving a decision.
Amidst this administrative minefield, even asylum seekers who are ready, willing and able to contribute to the UK economy are not permitted to work and are being criticised for the additional strain they are putting on public services. This is despite the fact that it is the Government who imposes restrictions on their movements and activities, subjecting them to an inordinately long wait for a decision on whether they will be permitted to stay in the UK.
Post-Brexit changes to legislation
The Home Office relies on legislation otherwise known as the ‘Dublin Regulation’ in order to justify their hostility towards asylum seekers. This EU law allows member states to return asylum seekers to the first EU country they entered: Javid has asserted that “the widely accepted international principle is that those seeking asylum should claim it in the first safe country that they reach.” After Brexit, however, this particular law may no longer apply. This means the Government will have little choice but to accept every genuine asylum seeker in post-Brexit Britain because the UK will be bound by international human rights laws and will also be unable to return asylum seekers to any of its former European counterparts.
The UK Government’s current reluctance to accept asylum seekers is in complete contrast to the welcoming attitude Britain has previously adopted towards those fleeing danger and persecution in the past. The potential removal of certain EU laws after Brexit, however, could oblige the Government to alter its approach and be more open to asylum seekers. This in turn will hopefully see the return of a less hostile and more empathetic attitude: encouraging the Government to make changes to expedite asylum claims and place less restrictions on asylum seekers, allowing them to integrate and build a new life for themselves in a safe and welcoming environment.
This guest post has been written by Joanne Starkie who is a specialist content writer and commentator for the Immigration Advice Service – an organisation of leading immigration solicitors (@IASimmigration).
Leonardo da Vinci - polymath
Leonardo da Vinci, born on April 15th, 1452, is arguably the most talented human being who ever lived. Famed as a painter and a sculptor, his expertise extended to architecture, science, music and mathematics, and to anatomy, geology and botany, as well as to engineering, astronomy, palaeontology and history. He was also an inventor, and drew plans and detailed drawings of an ornithopter and a proto-helicopter. He was the epitome of Renaissance man.
Leonardo was lucky to live in Renaissance Italy, an age of genius in which people no longer thought of themselves as inferior to the great figures of the Classical world, but could aspire to equal and even surpass them. It was an age of unbounded optimism and a belief in human capabilities. They admired and competed with each other for attention and recognition. Michelangelo was Leonardo’s contemporary, and the two undoubtedly struck sparks off each other.
One of the lessons from Leonardo’s achievements is that it doesn’t do to box people in, to think of them as one thing or another, but rather to give them space to develop in as many directions as they wish. In his day knowledge was in its infancy in so many areas that an intelligent and enquiring mind could make discoveries and progress in many of them. Knowledge today is so specialized that it would be difficult for a latterday successor to master so many of them.
Leonardo reminds us that equality is a false god, and that people are not born equal and cannot be made equal. His genius set him apart, just as special talents and abilities set people apart today. What we can do, though, is to insist that people have equal rights, that they are equal before the law, and have equal claim on its protection. We can also work to ensure that people have access to opportunity. We cannot secure equality of opportunity because some parents will be more loving or more caring than others, or go to greater lengths to develop the latent talents of their offspring. But we can work towards ensuring that everyone has the opportunity to develop and to better their lives.
Leonardo lived in an age of city states, of dukes and princes, many of whom were anxious to enhance their prestige by acting as patrons to creative artists and writers, and by sponsoring works of art. We can, if we wish, today provide incentives that encourage wealthy people to sponsor and support talented people. We can, if we wish, work to provide people, especially those from disadvantaged backgrounds, with access to the stimuli and the environment that can encourage them to explore and develop their latent talents, and to achieve their potential. We are unlikely to produce another Leonardo, but we can hold him up as an exemplar of what human beings can achieve.
Venezuela Campaign: How Chavez destroyed accountability
It is a common feature of totalitarian regimes that their leaders face no accountability. In order to exercise total control over a state, totalitarian regimes systematically erode financial, judicial, and political systems designed to check the power of the executive. Such regimes also seek to establish a monopoly on information. Venezuela is no exception to this rule.
Venezuela’s state oil company, PDVSA, is both the primary earner of foreign currency in Venezuela and the primary source of government revenues. While its earnings were previously passed to the Ministry of Finance, Chavez decreed that the spending would be done directly by PDVSA under his personal control, with no accountability or transparency over how the funds were spent. On Chavez’s instructions PDVSA stopped publishing its consolidated financial statements in 2003.
This began a period of theft and graft almost unmatched in the modern era. Without published financial data, it was impossible to track where PDVSA’s (and by extension Venezuela’s) money was going. By 2006 $22.5 billion had been transferred to overseas accounts, of which $12 billion was entirely unaccounted for. Chavez is suspected of either stealing this money outright or using it to buy political support abroad. Of course, this sum does not include the billions in subsidised oil funnelled to Cuba to pay for intelligence and other services.
Chavez was also an early adopter of the fraudulent development bank idea that would be made famous by the 1MDB scandal. In 2001 Chavez set up BANDES, a development bank, and FONDEN, a development fund. Billions of dollars of oil money were washed through these institutions over the years, and in 2011 it was discovered that $29 billion had gone missing from FONDEN. Nobody has heard of FONDEN, but by comparison the 1MDB scandal that has captured the attention of the global media involves a paltry $4.5 billion. It is a depressing reality that Chavez was ahead of the curve in his corrupt financial schemes, and that the rest of the world is behind the curve in bringing the Chavista regime to account.
Chavez also ensured that his government was no longer accountable to the judicial system. Independent and honest judges were replaced with regime stooges. This resulted in the farcical spectacle of the Supreme Court judges singing the Chavez campaign song “Uh, ah, Chavez no se va” (Chavez is not going) at the end of their inaugural session in 2006. Chavez issued orders to judges, treating them as subordinates. When a judge released an illegally detained prisoner, Chavez had the judge arrested, despite there being no legal basis for doing so. Consequently Chavez, Maduro, and other regime leaders act with total impunity. In 2003, Chavez dismissed 18,000 PDVSA workers for striking, something not only outside his authority but also a breach of Venezuelan labour law.
Chavez also ensured an absence of electoral accountability by rigging the electoral system. The members and staff of the Venezuelan National Electoral Council, which runs elections, are all committed Chavistas. As early as 2004-5 the electoral register was extensively corrupted, as it contained almost 17 million registered voters; mathematically impossible in a country with a population of 26 million, 60 percent or more of whom were too young to register. Moreover, the Electoral Council collected information on how individuals had voted and allowed the Chavista government to access these lists. Of course, this resulted in Venezuelans who had voted “the wrong way” losing their jobs, being refused identity papers, or being otherwise discriminated against. Without a secret ballot, Venezuelans are afraid to vote against the regime, ensuring that it could cling to power on the back of fraudulent elections.
The media is not able to hold the government to account as it is now under the total control of the regime. In 2004 Chavez enacted the ‘Law on Social Responsibility of Radio Television’ giving his regime the authority to control radio and television content, these restrictions being extended to the internet in 2010. These controls have been applied both by brutal censorship and closure of independent TV and radio stations, but also through the regime using corrupt funds to buy up independent media.
Lastly, Venezuela has become a country about which accurate data is no longer available. Basic data such as official figures for GDP, imports and inflation were last published in 2014, poverty statistics in 2013 and health statistics in 2015. When the health minister in 2017 released data showing a 66% jump in maternal deaths she was promptly fired. By controlling data, the regime is able to deflect criticism that suggests the country has experienced an economic collapse such as that of Zimbabwe in the 1990s.
It would not have been possible for Venezuela to have experienced such a total socio-economic collapse without the complete erosion of oversight and accountability. Without accountability, Chavez and Maduro have been able to enrich themselves and their followers, turn Venezuela into a Cuban proxy state, and cause the deaths of thousands and exodus of millions of their countrymen. Resolving this situation will rely on the restoration of proper checks and balances, as without them any future regime may stray down the same path. One must hope that soon Venezuela can overcome these obstacles and shine as an example of stable governance for Latin America.
More information on the Venezuela Campaign can be found on their website.
A certain failure to grasp the basics here
That there is a long line of people desirous of social rentals is taken to be evidence that there’s a shortage of social rentals. Demand far outstrips supply that is. Well, yes, but that is to miss that very basic point about the trifecta of demand, supply and price. Of course there are many people desirous of something at half market price:
Yet, according to housing charity Shelter, there are there are more than 1.1 million households on social housing waiting lists in England. Fewer than 273,000 homes at social rents, which are typically half of market rents, were made available in 2017/18 – a difference of more than 840,000 homes.
That market rent is the price of providing that housing. Including opportunity costs of course and if we’re not going to consider opportunity costs then whatever it is we’re doing it’s not economics. Provision of anything at half that market price will create queues. That’s just how those supply and demand curves work, price being the variable here they’ll meet. Move the price and they’ll not meet - there will be queues either side. Raise it and properties will wait for tenants, reduce it and tenants for properties.
This is not some neoliberalism, a result of neoclassical or even classical economics. There is no heterodox deus ex machina to get us out of this corner. This is just reality.
The question being what do we do about it? We’d all, quite obviously, prefer that the poor be well housed, none are into the idea of recreating Victorian or even Georgian rookeries.
So, yes, build more housing so as to increase the supply and thus reduce prices. As we’ve been saying for decades, issue more planning permissions so that the supply increases.
Which leaves only the social or market provision? There being only one of the two which does indeed aid us in taking account of those opportunity costs. Below market rents - whatever that level of market rent - come with said opportunity costs. Exactly and precisely the amount by which they are below market. We are adamant that such costs - subsidies to the poor if you wish - be openly visible in our taxation, expenditure and national accounting systems. Quite apart from anything else we need to be able to see it so that we can work out how well or how much we’re raising the living standards of those poor so we can decide to do more, less, the same.
So, market provision of houses. Many, many, more houses. With housing benefit being used for those who cannot take the strain even of the more reasonable rents brought about by greater supply. That is, don’t bury the reduction in inequality in the unrecorded opportunity costs of social housing but make it all open and explicit in the HB bill.
In the meantime, just marvel and wonder at that discovery by Shelter. Something on offer at half market price has a long queue to gain access to it. Well, yes?
Returning to currencies with hard anchors?
After years of discretionary management of monetary policy by the Federal Reserve, there is a strong case for re-fixing our fiat currency system to a hard anchor. Though the dollar was far more stable under the gold and gold exchange standard era than after it’s delinking from gold in 1971, those systems came with significant weaknesses that contributed to their ultimate abandonment. To avoid these, three key elements of the Fed’s operation should be modified. These are: 1. The monetary policy rules determining how currency fixed to a hard anchor is issued and redeemed; 2. The monetary anchor itself; and 3. What the currency is issued or redeemed for.
Monetary Policy
Because of loose adherence to strict gold standard rules, the U.S. no longer had enough gold to honour its redemption commitment by the 1960s. On Aug 15, 1971, Nixon ended the U.S. commitment to buy and sell gold at its official price and in 1974, President Ford abolished controls on and freed the price of gold, which rose to a high of $2,128 in February 1980 before falling back to $1,293 on March 29, 2019.
Under a strict gold standard, the central bank would issue and redeem its currency whenever anyone bought it for gold at the official price of gold. In fact, however, by actively buying and selling (or lending) its currency for other assets whenever it thought appropriate, the Fed’s monetary liabilities (base money) were partially backed by U.S. Treasury bills and other assets. In addition, the fractional reserve banking system allowed banks to create deposit money, which was also not backed by gold. The market’s ability to redeem dollars for gold kept the market value of gold close to its official dollar value. However, the gap between the Fed’s monetary liabilities and its gold backing grew until the market lost confidence in the Fed’s ability to honour its redemption commitment and President Nixon closed the “gold window” in 1971 rather than tighten monetary policy.
A reformed monetary system should require the Fed to adhere strictly to currency board rules. Such rules oblige a central bank to buy and sell its currency at a set price in response to public demand. Under the Gold Standard, the price of the currency was set as an amount of gold (a gold anchor). For existing currency boards, the price is typically an amount of another currency or basket of currencies. The Fed would provide the amount of dollars demanded by the market by passively buying and selling them at the dollar’s officially fixed price for its anchor. All traditional open market operations by the Fed in the forms of active purchases and sales of T-bills or other assets or lending to banks would be forbidden.
The Anchor
Another weakness of the gold standard was that the price of the anchor, based on one single commodity, varied relative to other goods, services and wages. While the purchasing power of the gold dollar was relatively stable over long periods of time, gold did not prove a stable anchor over shorter periods relevant for investment.
Expanding the anchor from one commodity to a basket of 10 to 30 with greater collective stability relative to the goods and services people actually buy (e.g. the CPI index), would reduce this volatility. The basket would consist of fixed amounts of each of these commodities and their collective market value would define the value of one dollar. There have been similar proposals in the past, but the high transaction and storage costs of dealing with all of the goods in the valuation basket doomed them. However, with indirect redeemability discussed next, the valuation basket would not suffer from this problem.
Indirect redeemability
Historically, gold and silver standards obliged the monetary authority to buy and sell its currency for actual gold or silver. If the dollar price of gold in the market were higher than its official price, people would buy gold at the central bank increasing its market supply and reducing the money supply until the market price came down again. These precious metals had to be stored and guarded at considerable cost. More importantly, taking large amounts of gold and silver off the market distorted their price by creating an artificial demand for them. A new gold standard would see the relative price of gold rising over time due to the increasing cost of discovery and extraction. The fixed dollar price of gold means that the dollar prices of everything else would fall (deflation). While the predictability of the value of money is one of its most important qualities, the stability of its value, such as approximately zero inflation, is also desirable.
Indirect redeemability eliminates these shortcomings of the traditional gold standard. Indirect redeemability means that currency is issued or redeemed for assets of equal market value rather than the actual anchor commodities. Market actors will still have an arbitrage profit incentive to keep the supply of money appropriate for its official value. As the economy grows and the demand for money increases, this mechanism would increase the money supply as people sell their T-bills to the Fed for additional dollars at its official price.
Towards a global anchor
The United States could easily amend its monetary policy to incorporate the above features – a government defined value of the dollar as called for in Article 1 Section 8 of the U.S. Constitution and a market determined supply. The Federal Reserve would be restricted by law to passive currency board rules. Additional financial sector stability would be achieved by also adopting the Chicago Plan of 100% reserve requirements against demand deposits.
The gold standard was an international system for regulating the supply of money and thus prices in each country and between countries and provided a single world currency (via fixed exchange rates). Balance of trade and payments between countries was maintained (when central bank’s played by the rules) because deficit countries lost money (gold) to surplus countries, reducing prices in the former and increasing them in the latter. This led to a flourishing of trade between countries. This was a highly desirable feature for liberal market economies.
The United States could adopt the hard anchor currency board system described above on its own and others might follow by fixing their currencies to the dollar as in the past. The amendments to the historic gold standard system proposed above would significantly tighten the rules under which it would operate and strengthen the prospects of its survival.
However, there would be significant benefits to developing such a standard internationally as outlined in my Real SDR Currency Board proposal. One way or the other, replacing the widely fluctuating exchange rates between the dollar and other currencies would be a significant boon to world trade and world prosperity. Replacing the U.S. dollar as the world’s reserve currency with an international unit would have additional benefits for the smooth functioning of the global trading and payments system. Embedding the system in the governance structures that already exist in the IMF's Articles of Agreement would elevate monetary policy rules to the constitutional level recommended by James Buchanan.
Warren Coats retired from the IMF after 26 years service in May 2003 to join the Board of Directors of the Cayman Islands Monetary Authority. He was chief of the SDR division in the Finance Department of the IMF from 1982–88 and a visiting economist to the Board of Governors of the Federal Reserve in 1979. His latest book is One Currency for Bosnia: Creating the Central Bank of Bosnia and Herzegovina, which chronicles his work in establishing the CBBH, a currency board, in 1997. He has a PhD in economics from the University of Chicago.
DNA is finally sequenced
On April 14th, 2003, a hugely ambitious project announced a successful conclusion as the human genome was finally sequenced. It was the world’s largest collaborative biological project, involving thousands of people at 20 universities and research centres in the US, UK, Japan, France, Germany and China, and costing billions of dollars. It was formally launched in 1990 with funding from the US National Institute of Heath and various charities and other groups around the world.
Its goal was to determine the sequence of nucleotide base pairs that make up human DNA, and of identifying and mapping all of the genes of the human genome. It was necessarily a massive project because the human genome has approximately 3.3 billion base pairs. A similar, privately funded effort was launched by Craig Venter at Celera Genomics, and there were fears that he might try to patent the information if he succeeded. However, President Clinton announced that this would not be permitted, and in the event Venter made public his information.
The sequencing of DNA offers the prospect of understanding and treating the causes of diseases, but it raises the possibility of uses in a range of other fields, including forensic applied sciences, biofuels, agriculture, and animal husbandry, among others. It also raises ethical, legal and social concerns if information about the DNA of individuals becomes publicly available. One fear is that employers and insurers might refuse to deal with people if health concerns are indicted by their DNA.
The movie “Gattaca” was set in a future world where the top slots, including space travel, were reserved for only those with superior DNA. The US Health Insurance Portability and Accountability Act protects against the unauthorized release without consent of individually identifiable health information to any group not actively engaged in the provision of healthcare services to a patient.
I was one of the early customers of 23andMe eleven years ago, when I had parts of my genome mapped. This uses genotyping rather than sequencing, but can provide useful information about the proportion of certain genotypes that are associated with different conditions, including illnesses. Three weeks ago I finally had my own DNA fully sequenced, all 3.3bn base pairs. The Human Genome Project, completed on this day in 2003, after 13 years of work by thousands of people, cost $2,7 billion. I had mine done at a much more affordable price. It has taken a mere 16 years for a miracle to become commonplace.