A Plague on the Petty Politics which Impede Progress
Last week the four main candidates for the north Norfolk constituency held a husting to debate the climate emergency. They quickly agreed the problem was too big for party politics: the parties should cooperate to find and implement the best national strategy. Two minutes later they were squabbling over cheap party shots. No sign of any strategy. No comment from the floor because voters are inured to this behaviour. The Supreme Court may regard the parliamentarians as the bastion of democracy but many are beginning to doubt it.
In its lumbering way, parliament does many small things well enough but when it comes to major national issues such as the climate emergency, the NHS, adult care or transport infrastructure, party game playing ensures that little or no progress is made, especially when it puts votes at risk.
The last Labour government’s constructive proposals for funding adult social care were labelled a “death tax” by the Tories and no more was heard of them.[1] Seven years later, Theresa May’s similar proposals were branded a “dementia tax” by Labour and nearly lost her the election.[2] The adult care green paper is over two years late and has missed so many deadlines that they have stopped issuing them: “A Department of Health and Social Care spokesperson said: ‘We will set out our plans to reform the social care system at the earliest opportunity to ensure it is sustainable for the future.’”[3] It has probably been written but its publication is delayed perhaps for fear of the negativity it will receive.
The House of Lords Economic Affairs Committee’s July report[4] in July called for urgency, £8bn. in additional funding (para. 41) and, importantly, consensus across political parties (para. 19). John McDonnell appeared to agree with this last point at Labour’s 2019 conference but MPs in other parties believe he was being economical with the truth; it may be just an electoral ploy. The Shadow Health and Care secretary, when approached, did not appear to indicate any willingness to cooperate and nor has the current Secretary of State.
In March 2018, almost 100 MPs “called on Theresa May to establish a cross-party commission to address the crisis in the NHS and in social care. A letter sent to the Prime Minister calls for a parliamentary commission and signatories include 21 select committee chairmen and 30 former ministers.”[5] Given the current Parliamentary arithmetic, why should the government reject the only plausible way forward?
Norman Lamb and Lord Saatchi have long pressed for a cross-party approach to long-term strategy for the NHS. We know it is massively wasteful and, with an ageing population and above inflation costs of medicines, technology and staff, it will become unaffordable. Chucking another £20bn at the problem from time to time does nothing to address the reform it needs.
In its 70 years the NHS has been subject to only one strategic review: the Royal Commission set up by Harold Wilson in 1975. Too big, unfocussed and cumbersome it may have been but many of its recommendations are relevant today. For example, the Commission considered the NHS too big. To stop politicians meddling, it should be divided into autonomous regional public corporations and not remain part of the Department of Health. Such regions would each still be twice as large as NHS Scotland and four times larger than NHS Wales. Each would better match resources with local needs. Strange as it may seem, the 1979 Secretary of State did not agree. A pity.
The Commission and Labour opposed prescription charges. The then Health Secretary, like the current one, thought otherwise: (Hansard 1805): “When we debate the problems of the drug industry we are told that it is responsible for forcing large quantities of unnecessary drugs on patients who do not need them. When we impose a disincentive to that [prescription charges] we are told that people will be deprived of care that they need. Labour Members cannot have it both ways.”[6]
Back in January 2018, The Guardian was the only voice raised against a new commission on the grounds that it would take too long and we already had all the answers.[7] That non-sequitur escaped them. In any case, we need cross-party consensus so that NHS reform has continuity through changes of government. As the last Commission pointed out, political meddling is a large part of the problem. The differences between the 1975 Royal Commission and the convention we need now are speed, focus and composition. Clearly a neutral chairperson will be needed but the rest should be the same MPs who will have to enact the results – not a large club of elderly experts, however wise.
The electorate is right to demand that parliament delivers. Politicians must cooperate to do so. Luckily three of these challenges, the NHS, adult social care and transport infrastructure, are for England only: Scotland, Wales and Northern Ireland must find their own solutions.
If political parties cannot deliver on the major issues of our time, the people will demand the leadership who can. Without greater responsibility by our politicians, our democracy itself is at risk. To take a rule from the Rugby World Cup, they must use it or lose it.
The space age began the space race
On October 4th, 1957, the USSR launched a satellite into Earth orbit as part of International Geophysical Year. Sputnik 1 was not the first man-made object to reach outer space; that feat was accomplished by Wernher von Braun’s V2 rocket in World War II (in 1944 a vertically launched one passed the internationally accepted Kármán Line of 100km, and one launched in 1943 had reached Richard Branson’s redefinition of space as 85km). But Sputnik was the first to attain Earth orbit.
It was a polished sphere 23 inches in diameter, with 4 trailing antennae broadcasting radio pulses. The famous “beep, beep, beep...” could be heard by radio amateurs, and the satellite’s 65-degree inclination meant it could be heard almost in almost every inhabited part of the world. Travelling at 18,000 mph, it took 96.2 minutes to complete each orbit.
The rocket that carried it was derived from an R-7 Semyorka ICBM designed by top space scientist Sergei Korolov, whose very existence was not admitted by the USSR until after his death. Sputnik 1 was surprisingly heavy at 184 lb, but surprisingly primitive, in that 112 lb was its power supply of three silver-zinc batteries. The West gleaned more scientific information from Sputnik 1 than the Russians did, because their tracking technology was more accurate, so they could study the orbital decay in more detail. The satellite burned up on re-entry 3 months later.
American officials had known about the impending launch, but were totally surprised by the public reaction to it. To the American public is seemed like a defeat. They had been beaten into space by what they had thought of as a relatively backward country. The Soviets had not initially thought of milking the launch for propaganda, but when they saw the America reaction they began crowing about their more advanced technology, demonstrating, they said, the superiority of socialism.
Ironically, von Braun had been itching to launch a satellite with his Redstone rocket topped by a revolving cylinder of Sergeant missiles to fire it to orbital velocity. President Eisenhower would not allow it, however, because he wanted space to be a civilian domain, and thought a military rocket ‘inappropriate.’ The USSR had no such qualms. When America’s civilian rocket Vanguard crashed in flames on the pad in December 1957, Eisenhower finally gave the go-ahead to von Braun’s team. They had made preparations in secret, hiding their satellite in a car boot to escape detection. They were thus able to launch Explorer 1 into orbit by the end of January, 8 weeks later. It discovered the van Allen radiation belt almost immediately.
President Kennedy was not going to have America beaten, and issued his famous challenge. If the USSR wanted a race, they could have one. In less than 12 years after Sputnik first went into orbit, Americans were walking on the moon, a feat that it is reckoned contributed to a steep decline in Soviet morale, one that ultimately hastened the USSR’s demise.
There’s an epilogue, in that exactly 47 years after Sputnik achieved orbit on October 4th, 1957, SpaceShipOne won the Ansari X-Prize on October 4th 2004 by becoming the first private, non-government vehicle to go into space twice within 2 weeks with passenger-carrying capability. Sputnik 1 started the space race, but the modern version seems to be not USA versus USSR, but private versus government.
The entirely trivial effect of formula milk on climate change
We’ve much huffing and puffing about the costs of formula milk. That, instead of the human draught kind, creates the emissions that damage the environment when used to feed babies.
Breastfeeding for longer could help save the environment, scientists have said as they reveal Britain’s poor rates cause the equivalent of 77,000 cars worth of damage.
Experts at Imperial College London have for the first time calculated the harm to the planet from infant formula.
They found that, not only does it produce significant amounts of greenhouse gas due to the in creates for dairy cows, but it also depletes water and electricity, as well as producing waste.
Everything has costs as well as benefits. The important question is what’s the balance between them?
The Imperial team calculated that breastfeeding for six months would save up between 95 and 153 KG of carbon dioxide per baby.
Ah, the costs are entirely trivial. Ludicrously minute that is.
The Stern Review told us that the social cost of carbon - the damage it does - is $80 per tonne CO2-e. Bottle feeding a baby for 6 months thus has a cost - tops - to the environment of $12. Against which we can and should set the benefits.
Not all women produce enough milk to feed their baby. Bottle feeding aids in any quick or immediate return to work. Some simply prefer it. That last being the most important point. Our task, as ever, is to maximise human utility over time within the constraints imposed by reality upon us.
Does bottle feeding produce more than $12 of benefits in the eyes of those who do it? Yes, of course, they pay more than that for the formula. Therefore the practice, among those who do it, is adding to the utility and wealth of humanity. Long may it continue.
Further, could we all stop worrying about trivialities here?
Politicians, public servants, and James Buchanan
I knew James Buchanan personally, largely through the Mont Pelerin Society, in which he served a term as President. He was born on October 3rd, 1919, one hundred years ago. He lived to be 93 years old, and changed economic thinking. He was awarded the Nobel Memorial Prize in Economic Sciences in 1986.
He went through university in Tennessee, his home state, by living at home and working on the farm. His war years were spent under Admiral Chester Nimitz in Honolulu, after which he went to do a doctorate at the University of Chicago under Frank Knight, who also taught Milton Friedman and George Stigler. Buchanan had not realized how free market-oriented the economics department there was, but it converted him from being a youthful socialist to becoming a fervent and lifetime advocate of market economics.
He is most famous for the book he co-authored with Gordon Tullock, “The Calculus of Consent,” which introduced Public Choice Theory to the world. Until then, most economists had blithely supposed that politicians and civil servants worked dispassionately for the public good, and could be relied on to bring corrections when needed to instances of market ‘failure,’ or where markets failed to deliver what were thought desirable outcomes.
Not so, showed Buchanan and Tullock. Their research and analysis showed that politicians and bureaucrats behaved like other economic players, seeking to maximize their self-interest. This need not be economic. Politicians might act to increase their chances of re-election or promotion, and bureaucrats might behave so as to increase the size and importance of their department. But the notion of dispassionate, public-spirited behaviour was not supported by the evidence.
The principles that govern behaviour in economic settings also apply in fields such as voting, lobbying or campaigning. People’s first instinct, Buchanan showed, was to make decisions that accorded with their own self-interest. Actions that are alleged to be “in the public interest” usually conceal the self-interest of those advocating them. The claim might be to help others, but the covert reality is in fact to help those making the decisions. Buchanan argued that understanding this fact enabled one to predict the behaviour of voters and politicians.
This rather displaces the pretended idealism of ‘public service,’ and replaces it with a rational self-interest. Most people do not like their alleged motives being undermined by this unforgiving analysis, but it proves a good tool for predicting outcomes. Politicians who advocate low rents for tenants of public housing might claim to favour the interest of those tenants, but in reality they are often bidding for the votes of those tenants in order to augment their own power.
Buchanan’s argument influenced the founding of the Adam Smith Institute. His analysis was largely a critique of the behaviour of legislators and public servants, but we speculated whether there might be a creative counterpart to that critique. Could we devise policies that would flow with the self-interest of politicians and civil servants, instead of being thwarted by them? Could policies by constructed such that their success would help politicians to be re-elected, and public servants to be promoted?
Promoting and proselyting free market ideas is worthwhile, of course. But we thought something else was needed - policies constructed to enable those free market ideas to be applied in practice, and in ways that work to the advantage of the legislators and public servants who might implement them. Building on James Buchanan’s analysis, a new type of think tank opened its doors.
Censorship powers will be used to censor, obviously enough
As the folk wisdom has it, be careful what you wish for because you might get it.
A common enough refrain these days is that people really shouldn’t be allowed to say that. The “that” changes with the person doing the insisting but transphobia by misgendering, climate denial, absolutely anything at all that can be twisted into a definition of racism and so on. Those who use their Twitter, or Facebook, other social media accounts, to do so must be purged from that town square.
To the point that some are insisting that the platforms must be out under strict responsibility to make sure that such things cannot be said on them. Be careful:
Singapore’s new law to combat “fake news” has come into effect despite criticism from tech giants and activists, who labelled the tough rules a “chilling” attempt to stifle dissent.
The law gives government ministers powers to order social media sites to put warnings next to posts authorities deem to be false, and in extreme cases get them taken down.
Once such powers exist then of course government is going to use them. Why do you think people go into government if it’s not to have power over people and society?
And there’s absolutely no certainty whatsoever that those exercising power are going to do so in ways that you like.
Which brings us back to the standard warning about how to maintain a liberal and plural society. Never allow anyone - certainly not government - a power over society that you wouldn’t want your enemy exercising.
ASI at Conservative Party Conference
After some great events at both Labour and Liberal Democrat Party conferences, we at the ASI have just wrapped up conference season with the Conservatives.
On Monday we launched the Neoliberal Manifesto, a collaborative project with opinion platform 1828. An agenda for a freer, more prosperous Britain, our Head of Development Morgan Schondelmeier took to the stage alongside the Telegraph’s Helena Horton (chair,) London Assembly Member Andrew Boff, Head of Research at the Entrepreneurs’ Network Sam Dumitriu and founder of 1828 Jack Powell for a discussion on the manifesto - and the ideas we put forward. You can find the manifesto here.
At 4pm, our Head of Research Matthew Lesh chaired a fascinating discussion on the future of aviation with John Penrose MP and representatives from Heathrow West, Virgin Atlantic and Rolls Royce. In our recent report Ready for Takeoff.
We rounded out Monday with a great discussion on Housing. Our Deputy Director Matt Kilcoyne chaired ‘Build Our Way Out.’ Thanks to LondonYIMBY’s John Myers, Fingleton Associates (and ASI’s) Sam Bowman, Marc Vlessing of Pocket Living and Andrew Carter of Centre for Cities.
We kicked Tuesday off by Giving the Green Light to Legal Cannabis. If a legal cannabis market is the way forward - what exactly would that look like? Chaired by Volteface’s Lizzie McCulloch, our audience were treated to great insights from our Head of Programmes Dan Pryor, MP for Reigate (and Chair of the Conservative Drug Policy Reform Group) Crispin Blunt, CEO of CDPRG Rob Wilson, and George McBridge of Hanway Associates. Loads of interesting questions - enthusiasm for a regulated market is growing!
At 4pm, we said No to the Nanny State. We laid on a gourmet feast for our audience of haribo and wine and Philip Davies MP, Andrea Jenkyns MP, our Dan Pryor and Professor Peter Hajek of Queen Mary University London railed against the encroaching nanny statism under the watchful eye of Hugo Gye, Deputy Political Editor at the i paper. Queues out the door for this one!
And our panel series was wrapped up by our own Matt Kilcoyne at 6pm. Dan Hannan MEP, Ted Bromund of the Heritage Foundation, High Commissioner for Singapore Foo Chi Hsia and High Commissioner for Australia George Brandis laid out the case for free trade in the post-Brexit world to a packed room. Thank you to all who came!
Away from the Chester Suite of the Midland Hotel, Matt Kilcoyne was up bright and early on Monday for breakfast with Julia Hartley-Brewer - talking about the issues of the day. Our Senior Fellow Tim Worstall has the Times’ Thunderer today - making the case for lower taxes for workers. Our Research Associate Matt Gillow hosted a housing debate in the exhibition hall with youth group Blue Beyond, Dan Pryor talked medical cannabis to Conservative Health, Matt Kilcoyne spoke to Transport for the North on how to do devolution right. Our incoming Head of Government Affairs, Charlotte Kude, spoke to the Telegraph about how the Conservatives can win back the youth vote.
Thanks to everyone who came to see us in the Chester Suite in the past few days - some brilliant free-market solutions to the pressing problems of the day.
Redesigning the car, Issigonis style
We said goodbye to Alex Issigonis, who left us on October 2nd, 1988, but not before he had revolutionized motoring for millions of us. Sir Alex Issigonis, CBE, FRS, RDI, was the son of Greek and German parents, born into the Greek community of Smyrna, the Ottoman, now part of Turkey. He moved to the UK in 1923 after being evacuated to Malta by Royal Marines when the Turks captured Smyrna. He studied at Battersea Polytechnic, now part of the University of Surrey, and went into the auto industry working for Humber and competing in racing events.
He was very proud of the part he played in developing the Morris Minor, but he leapt to fame when Sir Leonard Lord, head of the British Motor Corporation, tasked him with designing an ultra-small car following the fuel rationing that resulted from the Suez Crisis of 1956. He had prototypes running the following year, and the car was launched in 1959
The car, launched originally as the Morris Mini Minor and the Austin Seven, was a sensation. It was revolutionary, with front wheel drive, a transverse engine, 10-inch wheels, and managed to fit 4 adults into a very small car by making efficient use of space. It had a few teething troubles, such as a pull-cord door handle on the inside that many owners replaced with a lever handle. It tended to accumulate condensation in the door well, leading to rust, but this was rectified in later models.
It gained immediate cult status, with the basic model selling at just under £500. A hotted-up version by Cooper featured amazing acceleration and grip, and began winning rallies all over the world, prompting one cartoonist to remark that “if God had meant it to go that fast, he’d have given it bigger wheels.” The cars became known simply as minis.
It became the best-selling car in British history, with 5.3 million units being produced. I owned two myself at different times - a second hand red and black version I bought as a summer runaround, and later a mini Traveller, like a tiny estate car. I found both of them to be reliable and fun, though being so close to the road took some getting used to.
In 1999 it was voted the second most influential car of the century, after the Model T Ford. The Volkswagen Beetle, whose original drawing specifications, penned by Adolf Hitler, are still in a safe deep within their HQ, came 4th in that poll, and was not as revolutionary as the mini. It democratized motoring, as the Model T and the Beetle had done earlier, bringing car-ownership within the range of humble pockets. For many people, it brought a new freedom to explore the countryside and to travel. It opened up opportunities.
When people look at the hard facts of wage levels, they often forget that those wages buy things that were unavailable previously. Inventive and innovative business introduces products that make wages go further in terms of what they enable people to do. The iPhone did that, and half a century earlier, thanks to the brilliance of Alex Issigonis, the mini did the same.
Worth pondering what actually would make us bad ancestors
An argument being deployed to insist that we must do everything, right now, to beat climate change:
Bad ancestors: does the climate crisis violate the rights of those yet to be born?
Our environmental vandalism has made urgent the question of ethical responsibilities across decades and centuries
An interesting question to ask and one that deserves an answer. A compete and correct answer including all the other things we might do for our descendants. For example, we might bequeath them a much larger economy so that they are richer. Being richer is generally thought to lead to living a more comfortable life after all.
We can also look back and think of what we’re happy we have been left by our own ancestors. Most of us here in the UK are pretty happy with the idea that absolute poverty - that $1.90 a day kind - was finally abolished in the 1930s at the latest. In the way is still hasn’t been in some countries, in the way it wasn’t for 40% of humanity as recently as 40 years ago.
We could even be extreme and welcome the manner in which we’re that much richer as a result of past efforts that we’re on the right side of the environmental Kuznets curve now - we’re rich enough to be worrying about and spending upon that environment.
We could even look at the IPCC’s own economic models. If we tangle with climate change carefully and correctly then our descendants will be up to 11 times richer than we are and also enjoy a cleaner environment without that climate change by 2100. Do it badly and they’ll be perhaps 3 times richer on a dirtier, warmer, planet. The nice thing about those IPCC models being that globalised free market capitalism - you know, neoliberalism - is not just a part of that better solution, it’s integral to it.
That environmental question, what do we owe the future, is entirely valid. It’s just that most of the answers environmentalists give to it aren’t valid.
The People’s Republic at 70
Chairman Mao Zedong declared China to be a Communist People’s Republic on October 1st, 1949, 70 years ago. The small triumphal parade then will be dwarfed by the modern one. Tanks, planes, missiles, and thousands of marching feet will parade through Tiananmen Square, watched over by the current Communist Party leader, President Xi Jinping. They will celebrate 70 years of Communist Party rule, demonstrating China’s power, wealth and status.
Mao Zedong will be honoured for his founding role. What will not be mentioned is that he was a disaster for China, holding back the talent and enterprise of her peoples, and it was only after Mao died and was replaced that China began the achievements that are being celebrated. It was only when the party abandoned collectivism, central planning of all economic activity and the prohibition of private ownership, that China’s forward surge began. It was not achieved under the total control of the party; it happened only when the party loosened its grip on the economy.
Mao’s first disaster was the Great Leap Forward from 1958 - 1962. It was designed to lift China rom being an agrarian society into a modern industrialized socialist state. Collectivization and industrialization were the key elements, with backyard furnaces turning valuable metal tools into worthless pig iron, and collective farms falsifying their miserable output figures. Tens of millions died from starvation; Chinese historian Yu Xiguang suggests the death toll might have been 56 million.
Stalin was right about one thing: “a single death is a tragedy; a million deaths is a statistic.” Yet each one of those tens of millions was a son, daughter, brother, sister, parent, husband, wife, lover. Each death blighted the life of loved ones. The grief that Mao unleashed is on an unprecedented and incomprehensible scale.
Far from learning from his mistakes, 5 years later Mao unleashed the Great Proletarian Cultural Revolution to purge China of the remnants of traditionalist and bourgeois capitalism by insisting on purity of thought, Mao Zedong’s thought. From 1966 - 1976 it set loose a reign of terror and murder. So-called ‘renegades’ were beaten to death, their bodies dumped in ditches. The death toll again ran into millions, each one a life, each one a person.
Fortunately for China, Mao died in 1976, and Deng Xiaoping outmanoeuvred the ‘Gang of Four’ who wanted to continue Mao’s madness, and he became China’s Paramount Leader. It is from then that China’s progress dates. The abandonment of collective farms vastly increased food production, making China self-sufficient. The establishment of special economic zones brought in investment and growth. Allowing private businesses to set up and prosper brought an economic boom that still continues. China under Mao killed tens of millions, post Mao it has lifted more than a billion out of subsistence and starvation.
Yes, let us celebrate China’s achievements, but let no-one suppose they are down to the Communist Party. They were accomplished once it allowed independent activity not directly under its control. And while they parade on their 70th anniversary, let us recall the Soviet Union’s 1987 October Revolution parade in Red Square, celebrating the 70th anniversary of their 1917 Revolution. Communist Party General Secretary, Mikhail Gorbachev, and other members of the Politburo, were on the grandstand of Lenin's Mausoleum in Red Square. They celebrated then, as the Chinese do now, 70 years of Communist rule that had seen millions killed. Two years later, the Soviet empire was crumbling into dust, blown away on the winds of the world…
Why you might not want to get your economic analysis from the New Statesman
There are limits as to how far into the wilds even we’re willing to go in order to study economic incomprehension which is why we’ve only just discovered Grace Blakeley, economic correspondent at the New Statesman.
Her analysis of what ails Britain makes the usual British left wing mistake of confusing the capitalism/socialism divide with that of markets and planning. The first is about who owns and there’s no doubt that swathes of the economy do work better if it’s the people doing the actual work. What is self employment, or even a partnership, other than worker ownership? Equally, the workers in a steel plant or oil refinery are going to have serious trouble in raising the capital for the tools they work with. Outside capital is a necessity and that’s capitalism. The second is really about the information flow in the economy. Who makes what, how, where and at what price? To be against markets is to claim that John McDonnell, or Sajid Javid, know all those answers better than the people who actually do and desire things. A difficult contention to support.
But there’s that lovely signifier of someone who doesn’t know what should happen - they don’t know what has happened.
This inherently unsustainable system collapsed in 2008. The economic malaise we have experienced since the crash – characterised by stagnant wages, falling investment, the growth of international monopolies, rising consumer debt and huge increases in inequality – simply represents a deepening of trends visible before it.
Inequality has decreased since 2008. This is obviously true globally as the higher growth of the poor countries compared to rich ensures it. It’s also true within the UK.
Income inequality has increased by 1.3 percentage points over the past three years. However, despite this small rise, it remains lower than the 34.1% it reached just prior to the economic downturn in FYE 2007.
It shouldn’t be difficult to understand this. Inequality does fall in recessions. Profits and capital incomes fall faster and further than labour incomes, both more than benefits. Thus a recession is associated with a compression of inequality.
We’ve not had huge increases in inequality, we’ve had a reduction in it.
And if your economic analysis starts from facts that just aren’t so then it’s going to be terribly difficult to navigate through to a useful prediction for a path for future policy.
We’re left therefore with merely wondering at how there can be such an echo chamber of groupthink leading to substantial numbers of people gaily repeating as facts things that simply are not so. Not in this universe at least.