Could Michael Gove report for remedial education in sums please?
We have a summit, a government plan, thousands are to be mobilised to counter one of the terrors of our age:
Michael Gove has urged chefs, restaurateurs and hoteliers to help the Government end the “moral, economic, and environmental scandal” of throwing away food.
The Environment Secretary will host a summit next week when he will call on 300 organisations and prominent individuals to pledge to significantly reduce their food waste.
The pledge includes a commitment to checking the fridge before going shopping and always using a shopping list to better plan meals.
Every year approximately 100,000 tonnes of “perfectly edible” food - roughly 250 million meals - is thrown away and Mr Gove is urging immediate action to address the situation.
250 million does sound like a lot. But now do some basic sums. Even try to think a little bit. If we start at pixel time for this piece, 7.01 AM, that will take us through to about 9 am tomorrow morning. It’s around and about 4 meals per head of population that is, we get from before breakfast one day to after it the next.
For we’ve 65 million in the country, we eat 3 meals a day - we’ve heard of this food insecurity and don’t believe it for a moment - and there are 365 days in that normal year. That’s 71,175,000,000 meals a year to keep Britain off the Ex-Lax. The worry here is that there’s a 0.3% inefficiency in the system.
We would laud that as a marker of the efficiency of an unplanned and free market system. The application of that modern technology we call the supermarket with the associated logistics chain. Plus those fridges and freezers that adorn every home. Do note that the FAO, the food and agriculture bit of the UN, tells us that in poor countries, those without those hangars and temples to capitalist gluttony, lose some 50% of all food produced between field and fork.
On the numbers presented to us this is a problem we’ve already solved. For, seriously, who believes that any government scheme ever will operate with a mere 0.3% wastage rate? We are distinctly unconvinced that government has unlimited capacity and we’d thus suggest that this particular point be declared dealt with and that limited attention and competence be directed at more pressing concerns.
When for example, is someone going to solve Simon Cowell?
Fully Automated Luxury Vehicles
At a 1939 exhibit at the New York World’s Fair, American giant General Motors displayed their vision of what the world would look like in 20 years; a world brimming with self-driving vehicles and automated highway systems. However, 80 years on, this vision is yet to be fulfilled. Why is that after decades of innovation, we have yet to accomplish a dream envisaged almost a century ago? Perhaps we can help accelerate this dream into a reality, through the advocacy of effective free market policy reforms.
Crucially, one of the greatest barriers presented to the self-driving industry is the plethora of government regulations encompassing the development and testing of autonomous vehicles. Although numerous bills and acts have been passed in recent times, bestowing greater freedom for firms to test their vehicles, regulations surrounding the manufacture of cars still greatly discourage new firms from entering the market. In lifting such regulations, increased competitiveness between firms would be enabled, allowing for greater incentives to increase productivity and innovation.
Tax also presents itself as a critical hurdle. For instance, in the UK, the higher tax rate lies at a staggering 40%. However, by reducing income tax rates, it is likely that people will be incentivised to work harder, leading to greater productivity, and in turn, the swift development of self-driving vehicles. Furthermore, by reducing corporation tax, currently at 19% in the UK, this would encourage firms to reinvest larger amounts of their profit back into research and development.
Unfortunately, overregulated labour markets pose a hindrance too. For instance, in France, rigidities have been so vast such that the level of unemployment has soared at an average of around 10% over the past decade; 5 percentage points greater than that of the OECD average. However, by eliminating such regulations, firms would be enabled to more easily hire and fire workers, and by enabling zero hour contracts, firms would be allowed to employ workers when demand is greater, enabling greater productivity and innovation when a firm requires it most, as is currently desired. Such deregulation would enable firms to economise considerably, allowing for further investment into research and testing.
We are on the brink of making the vision General Motors once displayed into a tangible reality; let’s make the effective policy reforms now, to help us shift into the new, and exciting future.
Prerak Goel is the winner of the under 18s category in the ASI's 'Young Writer on Liberty' competition.
Channel tunnel link
The Channel tunnel is 25 years old. On May 6th, 1994, a year later than planned, Queen Elizabeth II and French president, François Mitterrand, met on trains that stopped nose to nose in the tunnel, and then officially opened the tunnel in a Calais ceremony. It was the culmination of an ancient dream for a land link between the UK and the Continent.
In 1802, Albert Mathieu-Favier, a French mining engineer, proposed to tunnel under the English Channel, illuminated by oil lamps, with traffic drawn by horse-drawn coaches, and an artificial island positioned mid-Channel for changing horses. Early proposals were rejected because of security fears that first Napoleon, then later Hitler, would use it to invade Britain.
It’s a rail tunnel of 31.35 miles linking Folkestone and Calais. At its lowest point, it is 250 ft deep below the sea bed and 380 ft below sea level. Construction began in 1988 and went 80 percent over its budget at £9bn. It takes freight and passengers, plus the occasional illegal immigrant.
It is a symbol of globalization. In January 2017, for example, the first goods train arrived through it from China, after crossing seven countries in 18 days and travelling 7,500 miles to deliver 34 containers of clothes and goods. It is also a symbol of the movement of peoples; we travel more than we did. The tunnel carries over 20m passengers a year.
The Channel Tunnel is but one of a series of fixed links built to facilitate and shorten travel times. The Øresund Bridge, completed in 1999, connects Copenhagen in Denmark with Malmo in Sweden. The Hong Kong-Zhuhai-Macao Bridge, finished in 2018, connects Hong Kong to Macau. Both save long drives or ferry crossings. The Amur Bridge joining China to Russia is due for completion next year,
Many more ambitious ones are planned, including one that will connect Japan with the Asian mainland. The granddaddy of them all, if it is ever built, will be the one that connects Russia and America via the two Diomede islands in the Bering Strait. There is a Chinese plan for a fixed link between China and the USA via Russia and using 200km of tunnels,
As with many of these ambitious ideas, the problem is not so much the technology as the funding. Engineers can solve the problems of drilling and spanning, but government ministers have first to determine how they might be financed, since like most big projects they will probably overrun on both time and cost. The dream of travelling from London to the US by train is a long way from becoming reality, but the opening of the Channel Tunnel 25 years ago was a significant first step along the way.
The data will see you now: Algorithms and the NHS
Much is made of the staff shortages that the NHS may suffer after Britain’s departure from the European Union. Whilst falling European migration is an issue that may be resolved by opening up to more global movement, simply providing more workers does not guarantee that public-sector jobs will be filled ahead of potentially more lucrative private employment. In the near future, technology may yet provide the answer to what seems increasingly to be a political and economic black hole of state-funded healthcare.
The solution could lie in partnerships with the private tech sector in order to utilise the potential of data with ‘virtual diagnoses’. The time and expense taken to train each human doctor is a major contributor to the shortage, and an integrated system would only require one large cash injection. Additionally, future processing power seems likely to surpass the human brain in making accurate decisions. Whilst a human conclusion will be reached by drawing on past experience, a data bank, when joined to advanced diagnostic algorithms, would be capable of accessing near-infinite information to inform a diagnosis, with the added benefit of removing issues like fatigue which might impair human decision-making.
However, this fails to take into account the innate ‘emotional intelligence’ required by many front-line medical staff. It seems that to fully resolve the issue, diagnostic technology would need to factor in the algorithms necessary to understand emotional responses. Incorporating the process that leads to human feeling would be crucial if, for instance, a data system had to make a direct diagnosis of a serious disease. Understanding emotional algorithms in humans would also enable investment in technology-related treatments for mental health, developing the best way to approach matters like mental trauma. Such systems could be refined to the smallest detail, even anticipating the human brain’s processing of the fact that a machine was treating it and acting to prevent this with semantic changes particular to the patient and diagnosis.
Adopting partnerships with the private sector, where technology is a major draw for funding, could help stabilise the state healthcare budget in the UK and address qualified staff shortages. The reduction in cost provided by what is effectively one ‘super-doctor’ could substantially reduce the heavy taxpayer burden of NHS funding. Ultimately, therefore, the medical profession might one day be able to reduce its numbers for the right reason.
Peter Wollweber is the winner of the 18-21 category in the ASI's 'Young Writer on Liberty' competition.
How can we tell whether the fracking earthquake limit is nonsense or not?
Fracking in the UK cannot continue if earthquakes of 0.5 or more are recorded. A break must be had if one is so recorded. This rather, as Sir Jim Radcliffe has noted - as the just resigned fracking “tsar” has done - puts the kibosh upon the use of the technology. That is, we’ve not actually banned fracking but we’ve put in place a rule which has that same effect.
Now, of course, it is possible that such a 0.5 limit is necessary. Don’t want to shake the country down after all. We have made obvious our views on this a couple of times. It is not a useful nor sensible safety rule it is, instead, an attempt to ban fracking on spurious safety grounds. But how can or should we try to prove this?
The Government has been accused of "blatant double standards" for allowing drilling in Cornwall that is able to cause stronger tremors than fracking.
The United Downs Deep Geothermal Project, in Redruth, Cornwall, is the UK’s first geothermal extraction site which opened in December 2018. It consists of two deep wells at least 2,500m in depth being drilled into the ground to extract renewable energy.
However, unlike fracking, tremors caused by geothermal drilling are not formally regulated by a national government body. This is despite the “seismic hazard” of the process which can cause earthquakes “magnitude four and above” that could be felt by up to 4000 Cornish homes,
If you are drilling for geothermal power, something environmentalists generally approve of, then you can cause earthquakes several hundred times more powerful - the Richter Scale is a logarithmic one - than if you are drilling for natural gas. The rules is therefore not a safety one, it’s a deliberate attempt to impose bureaucratic safety standards to ban fracking.
Thus, obviously, either ban geothermal drilling under those same rules or lift the allowable limit for fracking. For the imposition of different rules dependent upon whether some approve, or don’t, of the activity being undertaken is rule by caprice, not law.
The country is being shaken down here and it’s not by earthquakes.
The malign influence of Karl Marx
Karl Marx, born on 5th April, 1818, in Trier, Germany, spent much of his life in exile, finding it unsafe to live in Germany, France or Belgium. Britain provided a haven, though, and Marx spent much of his time in the reading room of the British Museum. He is famous for two principal publications. First came “The Communist Manifesto” in 1848, co-authored with Friedrich Engels, a textile magnate who supported Marx for 40 years out of the profits from his mills.
Second was “Das Kapital,” the first volume of which appeared in 1867. The two works are regarded as the foundation stones of Communism. Marx was undoubtedly a talented and original thinker, but his works were treated with a religious fervor that was unmerited, largely due to their appropriation by Lenin as the justification for the Bolshevik seizure of power and the establishment of the decades-long Soviet tyranny.
Marx saw history in terms of class struggle, and was Hegelian enough to think that history was working towards a foreordained conclusion. This would of course be the dictatorship of the proletariat to bring about the classless society. At which point history would stop. He sympathized with the plight of working people, and saw them as victims of capitalism and its lust for profit. He thought their labour was exploited, and that they were not given the full value of what they produced.
Some people still think this, but a more real-world picture might see capitalists as people who commit resources to produce what they think people will want to buy, and who do so hoping to gain a return thereby on their investments. In doing so, they provide working people with the chance to better their lives by earning money. On such a view the capitalists benefit both the people who buy their goods and the workers who earn wages producing them. The capitalists risk losing their investment if they guess wrong, and people don’t buy the goods.
The fact is that the socialism Marx wanted to replace capitalism does not work, and has never worked when it has been tried, even though millions have died while this truth was being made apparent. In the name of Marxism, lives have been blighted and terminated, misery, poverty and destitution have spread, and none of the results it claimed to seek have been achieved.
Despite his tunnel vision of history, Marx did make an important contribution to its study, recognizing that the productive technology of different ages has an influence on their ideas and their culture. He thought it determined them, which is too extreme, but his recognition of its influence is a useful one.
Marx was one of history’s most influential thinkers, but the crimes against humanity committed under the banner of his name will forever taint his record. Most of the influence he had was malign.
Venezuela Campaign: Cuba, hands off Venezuela
Recent events in Venezuela have demonstrated just how difficult it is to remove an established totalitarian regime. Despite poverty levels of over 90%, widespread hunger and malnutrition, absence of electricity and water supply, collapse of medical facilities and 3.4 million refugees, the regime is still holding onto power.
The Chavista regime has consolidated its power over the economy through nationalisation and price controls, and maintains an iron grip over the media and judiciary. Its extensive military forces are backed up by informal regime-financed gangs called collectivos who terrorise and murder at will.
The longevity of failing totalitarian systems is also evidenced by the case of the Cuban regime, now in power for over sixty years despite being an economic basket-case. Cuba maintains a deeply inefficient and corrupt Soviet-style economic system. State employees concentrate on just getting by by selling goods stolen from their place of work, or slipping away to do informal private jobs. The worsening food shortage means it is very difficult for Cubans to buy basic goods such as eggs, flour, chicken, cooking oil and powdered milk. Collectivised agriculture barely functions and Cuba has to import most of its food, which it cannot afford to carry on doing. Yet despite being unable to feed their people, the Cuban regime is firmly in power. Their expertise is in developing and maintaining a police state. They have eliminated all opposition and brutally repress all signs of dissent.
Cuba have exported their totalitarian expertise to Venezuela, where they designed the security apparatus they now oversee. In an interview with The Washington Post in March, one former lieutenant colonel in the Venezuelan army who has fled to the United States said Cubans dressed in civilian clothing acted as “our supervisors and decision-makers.”
But there is still hope for Venezuela. The Chavista regime is not as entrenched as the Cuban one, and has no external backers prepared to continue to bail it out financially. Juan Guaido’s recent attempt to persuade the military to switch sides wasn’t successful. However, the fact that the military sat on the fence all day, and that the head of the intelligence service, General Manuel Christopher Figuera, did switch sides and has now left the country, shows that military support for the regime is fragile and wavering.
The analysis of Admiral James Stavridis, former head of U.S. Southern Command, is instructive:
“I wouldn’t categorize it as a failure at this point. I’d categorize it as a near miss on a success. From where we were a year ago, the trends continue to diminish the chances of Nicholás Maduro remaining in power. The country is spiralling downward….I for one find credible the reports that Maduro was about to fold. I think the Russians stiffened his spine, and I think the presence of thousands of Cuban military and intelligence personnel was decisive. Despite all that, I think this one was right at a tipping point. I think the scene of action is shifting to Cuba. I think the next logical move for the Trump administration is applying pressure to Cuba.”
It’s primarily the Cubans who are standing in the way of Venezuelan freedom. As Luis Almagro, Secretary General of the 35-nation Organization of American States, has just said, “If we want to help Venezuelans, we must deal with the dictatorship in Cuba. The only military invasion of Venezuela that has occurred began slowly some 20 years ago & has been perpetrated by the armed forces & security, intelligence & counter-intelligence of Cuba.”
Once democracy is restored to Venezuela, Cuba will lose its main foreign subsidies of $2 billion to $3 billion per annum. We could very well see a domino effect. When the totalitarian regimes falls in Venezuela, the Cuban dictatorship may follow.
More information on the Venezuela Campaign can be found on their website.
So, how would we increase the adoption of innovation in the NHS?
Lord Darzi wishes to increase the adoption of advanced medical technologies in the National Health Service. This looks like a decent enough aim. After all, it is true that the NHS falls behind on such things:
In the UK we are world leaders in healthcare innovation. British doctors and scientists discovered DNA, pioneered the first heart and lung transplants and led developments in modern genomics. We are now on the cusp of a revolution in which novel diagnostic tests, digital tools and biopharma products are becoming available and British doctors and scientists are again leading the way.
But there is little point in our top doctors and scientists developing new drugs, techniques and devices if they are not adopted and used by the NHS. It deprives patients of what can be life-saving therapies and creates frustration for clinicians and innovators.
We don’t enjoy that any of that is true but we’re fine with it as an account of the current reality. And we’d all like to change it too. The NHS is, among rich world health care systems, particularly bad at preventing “mortality amenable to health care”. That is, it’s not up there on the cutting edge of how to save lives.
To speed this process up, a joint government-industry group, the Accelerated Access Collaborative (AAC), which I chair, was launched yesterday in an improved form as an umbrella organisation to promote innovation across the NHS. The group, first announced in 2017, will direct innovators to sources of support, search out the best ideas, and identify cutting-edge treatments to ensure they are fast-tracked to reach more patients more quickly.
In our first year we have identified 12 products in seven areas, ranging from a computer programme to detect heart disease without invasive tests to a simplified procedure for treating enlarged prostate glands in men on a day-case basis. We estimate these products could improve the lives of about 500,000 patients and save the NHS up to £30 million. We will fast-track the use of these products by identifying clinical champions, removing financial and procurement barriers, and ensuring their uptake is supported by national clinical directors, policy teams and programmes.
That’s not the something we would do about it though. A committee to promote central planning isn’t the way to advance innovation. Innovation here being the adoption of new technologies to do interesting things like cure patients. For central planning is famously slow to innovate. From the work of William Baumol we gain the insight that it is markets which promote such, not bureaucracy.
The way to get to Lord Darzi’s admirable goal is for there to be more competition in the NHS. It can all still be taxpayer funded, free at the point of use, even non-profit if that’s what people desire. But competition is what increases innovation so if we desire more innovation we must have the competition.
As ever there are some things too important for us not to use markets. And saving Granny’s life would strike us as one of those very areas of importance whatever the strictures of the national religion.
Forty years since Margaret Thatcher became PM
Forty years ago, on May 4th, 1979, Margaret Thatcher became Prime Minister. She has been demonized by the Left precisely because she was so successful. She turned Britain away from state ownership and controls, toward free enterprise and market competition and proved their worth by the success they brought about. A remarkable string of achievements left her country more prosperous, more confident, and a major player on the world stage. She was rated amongst the most influential figures of her century.
1. She was a woman with a science degree, and rose to become Europe’s first female head of government. She inspired women to think they could aspire to succeed in what had been the male-dominated world of public service.
2. She had shown her steel in the 1980 Iran Embassy siege, when she had sent in the SAS to rescue hostages after the terrorists had killed one of them. That same resolution showed in the 1982 Falklands War, when Argentina invaded islands they had never owned, and which were uninhabited when British settlers arrived. She sent a task force and recovered the islands.
3. Her 1980 Right to Buy Scheme allowed those living in council (social) housing to buy their homes at greatly discounted prices and become home owners. Over a million people did so.
4. Inflation, which had peaked at 26 percent in the 1970s was brought under control as her Chancellors increased interest rates and indirect taxes to slow the growth of the money supply.
5. She reformed the too-powerful trade unions by making secondary industrial action illegal, instituting secret postal ballots for union leadership, requiring unions to ballot their members before strike action, and by abolishing the closed shop. She defeated the Miners’ strike of 1984-85.
6. She privatized most of the state industries, turning them into profitable and successful private firms, and popularized share ownership by ordinary people as well as professional investors. She introduced competition into them, helping to lower prices.
7. She reduced barriers to entrepreneurship, lowering regulations and creating enterprise zones and freeports. In a single day in 1986, the City of London was deregulated in a ‘Big Bang,’ ending centuries of the old boy network and turning the UK financial sector into a world beater.
8. In the Kenneth Baker education reforms she transformed schooling by giving parents a choice of school, and by allowing state funding to follow the child to successful schools. This changed top down direction into bottom up control directed by parents.
9. She brought foreign investment flooding into Britain by repealing exchange controls and by lowering taxes on businesses and incomes.
10. By taking a firm stand against Soviet aggression and expansionism, and supporting President Reagan by deploying US missiles to counter Soviet missile deployment, she was instrumental in bringing the Cold War to its end in victory for the West and freedom for those who had suffered under Communist dictatorships.
It is difficult to convey to those not there the mood of Britain in the 1970s. There was a sense of hopelessness and helplessness. Things seemed shoddy and second rate compared with what we saw abroad. Public services were deplorable, and transport pathetic. Goods and services were renowned for their low quality and late delivery. The helplessness derived from a general belief that things could only get worse, and that nothing could be done about it.
Margaret Thatcher applied vision and determination, and Britain’s recovery was as fast as it was dramatic. It took only a few years to restore confidence and optimism. What had seemed impossible actually happened. Fortune magazine and Newsweek both ran cover stories on the theme “Britain is Back!” And it all started 40 years ago. May the 4th be with her, always.
Who was it that really benefited from the cotton mills?
Larry Elliott tells us that it was only the mill owners who benefited from King Cotton:
There is nothing surprising about the hollowing-out characteristics of markets because, left to their own devices, they work in uncompromising ways. Nor is there anything new at work because just as the rewards from the cotton mills in the early 19th century went to the factory owners, so the fruits from the platform technologies go to those running the mega-businesses of Silicon Valley.
Larry Elliott is wrong on this. As Brad Delong points out:
Moreover, there is another very important group who benefited mightily from North American slavery: consumers of machine-made cotton textiles, from peasants in Belgium able for the first time to buy a rug to London carters to Midwestern pioneers who found basic clothing the only cheap part of equipping a covered wagon. Slave-grown cotton could be produced cheaply, yes, but the cotton-growers did not collude and so sold their cotton at prices that incorporated only a normal rate of profit. Cotton could be spun and woven by machines at amazingly low prices, yes, but British factories did not collude and sold their garments at prices that incorporated only a normal rate of profit.
As has been pointed out, capitalism didn’t gain QE I her pair of stockings but those Satanic mills did gain the factory girl her choice of pairs.
So too the analysis of who gains from Big Tech these days.
As in previous industrial revolutions, the automation process substitutes capital for labour and that means greater efficiency and faster growth. But the gains from higher productivity will go to the owners of capital unless workers are strong enough to resist. In recent years that has not been the case, which is why average earnings have decoupled from per capita growth rates.
It’s entirely nothing to do with the workers resisting. It’s about competition and the consumer surplus, as William Nordhaus has pointed out. Near all of the benefit, well above 90%, flows to consumers. The only reason that we say average earnings have decoupled is because we’re not measuring that benefit.
As we’ve pointed out before, for several years - between the dropping of the $1 a year charge and before it carried advertising - WhatsApp was recorded in our economic statistics as being a fall in productivity and a net loss in GDP. This from something which gained some 1 billion people some or all of their telecoms needs for free.
Getting this basic analysis right is important. Even if the essential point - the capitalists taking all the gains - is true understanding the above also tells us the solution - more competition, more free trade to provide it. So that, as last time around, it is consumers who benefit.