We're always insisting that things must be properly measured

There is Hayek’s point, that the central planner never can quite measure the world accurately enough to be able to plan things properly. We then go on to insist that even if we’re going to ignore that - because some things really do require management even if it cannot be done perfectly accurately - then we do have to devote a certain effort to trying to measure matters as well as we can.

For example, we insist that all measures of the wealth distribution are wrong because they, quite deliberately and openly, ignore the effect upon that wealth distribution of all the things government currently does to change it. We continually point to the manner in which estimates of climate change damage are vastly too high as they entirely ignore what has already been done to avoid those worst future projections.

We seem to have another example here with the Body Mass Index:

Growing numbers of women and men in England with eating disorders are being denied support because they are not considered to be thin enough to warrant it, a leading psychiatrist and other experts have warned in a briefing shared with ministers.

Against the backdrop of a fourfold rise in people admitted to hospital with eating disorders during the Covid pandemic, doctors said body mass index (BMI) was too often used as a blunt measure to decide whether someone should get treatment.

In some cases, women have not received an eating disorder diagnosis despite their periods stopping due to overexercising or restrictive eating.

BMI uses height and weight to calculate a healthy weight score. A normal body weight is considered to be between 18.5 and 24.9, and some doctors consider anything below this a signifier of an eating disorder.

The point here being that at least some people considered “normal” by that BMI are quite clearly too thin to be healthy.

It’s also possible to point out that those considered “overweight” and shading into “obese” - but not “morbidly obese” - by that very same BMI measure have better health outcomes. More years of life, more years of pain and sickness free life.

It would appear that we’ve pegged the definition of normal too low - or perhaps the definition of desirable.

All of which does play to our own insistence on counting things right. Once we do so solutions to the perceived problems become much easier. A more equal wealth distribution is achieved by counting what we already do to gain such. Climate change is at least in part beaten by how we’ve already made wind and solar power so much cheaper than they were. Britain’s obesity crisis can be lifted simply by shifting our definitions.

The current definition of “normal” weight is unhelpfully, often enough dangerously so, thin. So, rebase to normal being what is currently considered overweight, that BMI which is, in fact, healthier. At wihch point, largely enough, we’re done. No need to eviscerate commercial freedoms and civil liberties by banning foodstuffs, or advertisements for them, or supermarket placings. Unless, of course, the power to do those things is the point of the scares about BMI and obesity in the first place.

Reasons for optimism - Space

In 1956 the then Astronomer Royal, Sir Richard van der Riet Woolley, was widely quoted saying, “Space travel is utter bilge.” When the first artificial satellite, Sputnik 1, was launched a year later, he was asked if he stood by his remarks and replied, “It depends what you mean by utter bilge.” I forgave Sir Richard when he taught me to play croquet three years later, but I’m not sure the space industry ever did.

The conquest of space has enabled us to do things that were impossible or at least very difficult to do on Earth. Communication satellites that beamed television from fixed geostationary orbits were among the first big money-spinners. Although still classified to some degree, military reconnaissance satellites have given each side detailed information about the other, and have probably made the world a safer place. No more dangerous and provocative spy plane flights over hostile territory were needed, since the information could be safely gleaned from orbit.

Satellites have enabled us to gain information about the Earth below them and the universe beyond them. They have enabled us to map pollution and rainforest depletion, to measure icecap shrinkage and expansion, to track illegal shipping activity, and to monitor the progress by rogue states to develop nuclear weapons and missile capability.

The Hubble space telescope has given us more insights into the working of the universe and its early origins than Sir Richard could even have dreamed about when he made his comment 65 years ago. When the James Webb Space Telescope, planned to be launched in October, is operational, it will far exceed the capabilities of the Hubble telescope it will replace. 

Space offers the chance to step up communications by making high speed internet available in most of the world via hundreds of small low orbit satellites. Elon Musk’s SpaceX has already put more than 1,300 of his Starlink satellites into orbit, and plans rapid expansion of his 10,000 existing users. It is particularly useful in remote areas that would otherwise lack connectivity.

Intriguingly, space tourism looks set to become a significant source of revenue as costs and prices come down. The only non-government space travellers so far have been seven multi-millionaires sent by Space Adventures aboard Soyuz launch vehicles to the International Space Station at a cost exceeding $20m per trip. The SpaceX Crew Dragon and the Boeing Starliner have been approved to take private astronauts into orbit and to the International Space Station at much less cost, and even cheaper sub-orbital flights by firms such as Virgin Galactic are planned to give passengers the space experience for about $250,000.

Companies have been formed somewhat prematurely “to exploit the mineral resources of the asteroid belt.” While some asteroids are known to contain large deposits of valuable minerals, the costs of extracting and transporting them is currently far beyond any value that could be gained from such operations. More plausible, perhaps might be the future harvesting of ice asteroids to provide water for future space activities.

We can be optimistic that some means of reaching outer space by means other than rocket power might be developed to achieve dramatic cost reductions. There are proposals to site rail guns up mountain slopes to achieve the requited velocities using ground-based power. The ultimate prize would be the space elevator, with its cars ascending to the geostationary point 22,500 miles high. The materials with the necessary strength have yet to be developed, but they might soon be. It looks as though space will be an important part of human achievement and activity for decades, if not centuries, to come, and will continue to bring us new knowledge and new excitement.

Just how much should those other people be allowed to make?

It’s a standard joke - or observation of human behaviour - that those rich people over there who must be taxed much more are defined as being those earning 10% more than the person making the demand. Perhaps we should expand this to business matters too:

Channel 4 has urged the competition watchdog to broaden its crackdown on Google and Facebook to prevent broadcasters ceding millions of pounds in advertising income.

The Gogglebox broadcaster has called on the Competition & Markets Authority to rein in distribution deals offered by the tech platforms that demand a 45pc slice of the advertising revenue.

Is 45% too much? Channel 4 itself:

£985m total revenues in 2019

£660m total content spend

£492m spend on originated content

If we consider total content spend then Channel 4 charges, to feed its own costs, about a 33% - instead of the 45% of Google or Facebook - margin. If we consider the spend on originated then Channel 4 charges those who make their programmes more like a 50% margin to feed their own cost base. Or, if we wish to be naughty with numbers here, a 100% markup.

Which is too much? Well, actually, our faith in human nature is confirmed whichever the correct number ought to be. For the complaint is coming, as ever, from those making a little less than those they’re complaining about. So, that’s all right then, humans are still humans.

Will Hutton manages to ask a good question

Implicit in this is a question rather than assertion:

What amazes the party and commentators alike is why a 78-year-old moderate stalwart such as Biden has suddenly become so audacious. After all, he backed Bill Clinton’s Third Way and was a cheerleader for fiscal responsibility under both him and Barack Obama, when the stock of federal debt was two-thirds of what it is today. Now, the debt is no longer to be a veto to delivering crucial economic and social aims.

Why that change, why no longer?

What has changed is that quantitative easing has morphed into Modern Monetary Theory, that magic money tree. Or, as older language had it, monetisation of fiscal policy. Something which does rather lead to disaster, as Venezuela and Zimbabwe have recently shown.

Yes, of course, we agree that there’s a lot of ruin in a nation but it’s not an unlimited amount, as the Great Debasement shows in our own lands.

The politicians now all agree among themselves that anything desired may be had by printing the money to gain it. Thus that’s what is being done. Which is, has been all along, our complaint about MMT. We do indeed know that within the theory there is the solution, that when inflation arises taxes do to curtail it. But that’s not how politics works - spending is much more fun than taxing. Thus spending will rise and tax will not to offset as the theory states needs to happen.

Thus why politicians both here and in the US are having such fun in spending more than they’re willing to impose in taxation. We insist that this won’t work out well.

KPMG and the necessity of a circular economy for renewables metals

We have, some time ago, addressed the mistakes people generally make when considering the availability of metals and minerals. Mass confusion over what is a mineral reserve - the correct answer being something created by spending the resources to do so - leads to the usual insistence that a circular economy must be created. We have no problem with recycling of metals or anything else, we just keep pointing out that it’s justified only when a profit is made by doing so.

KPMG is the latest producer of one of these reports and, to be fair, it’s better than many. It does point out that the demand for interesting metals for the renewables revolution can indeed be found in them thar hills. There are still the mistakes though:

Not all theoretical reserves are technically or economically extractable

Nonsense. The definition of a mineral reserve is that it is technically and economically extractable using current technology, at current prices, and to make a profit while doing so. If we can’t do that then it’s not a reserve.

They also fall prey to a piece of environmentalist misinformation:

There are also ESG concerns associated with extraction. In Chile, lithium uses approximately 500,000 gallons of water per tonne extracted, which diverts away 65% of available water in some regions, causing adverse impacts on local farmers growing produce and rearing livestock

No, really, just no. The lithium is contained in brines. The extraction method is to evaporate the water away from the contained salts - once that’s done the lithium is extracted from the remaining sludge or powder. To say this “uses” 500k gallons of water is nonsense - we’re extracting from the water by extracting the water. Such brines would, if drunk, kill the cattle and ruin, through salinity, any farmland they were used to water. A much more realistic statement would be that we’re liberating the water into the clouds using the locally abundant sunshine to do so.

Once these sorts of misunderstandings are cleared up the base complaint left is that Johnny Foreigner might be beastly to us as we ask if we may have some more of their lovely minerals. At which point we get back to that insistence that we must have a circular economy and recycle everything.

Well, yes and no. As we’ve said, nothing wrong with a bit of recycling as long as a profit is being made. Those offshore wind turbines might have 4 tonnes or more of rare earth metals in them (more likely an overcount, as FeNdB magnets do contain that iron as well but still) and with neodymium at $40 a kg when reprocessed there’s a decent margin in there. So, as and when these are replaced we’d expect that concentrated store of value to be recycled. The gramme or two of the same magnet material in your hard disk drive (for those who have not graduated to SSDs as yet) is markedly less profitable to collect, extract and process. So much so that landfill is the useful destination.

The important underlying point to grasp here is that no policy decisions are required. The difficulty of extraction, geopolitical worries, resource availability, recycling or reprocessing possibilities, value in end us and all are already incorporated into market prices. We can thus leave greed and capitalism - in the Prime Minister’s words - or eye for the main chance if we prefer to deal with this. There is no need for a grand plan or a redesign of the system, enlightened self-interest, as so often, is already dealing with this for us.

Shops to houses conversions - a little ahead of schedule actually

We here at the ASI have long said that our job, duty, is to be those off howling in the wilderness with the odd ideas for how society can and should be improved. Start with an entirely contrary to accepted fashion proposal and then spend a decade seeing it move from absurd to thinkable through acceptable to policy.

The latest one seems to be a little ahead of schedule:

New rules allowing shops to be converted into homes to revitalise high streets

The logic being impeccable. Online shopping means we need a smaller retail estate. We do also tend to think that we’d like more residential estate in the country. Ease the rules to allow the conversion:

“We are creating the most small business friendly planning system in the world to provide the flexibility needed for high streets to bounce back from the pandemic,” Jenrick said.

“By diversifying our town and city centres and encouraging the conversion of unused shops into cafes, restaurants or even new homes, we can help the high street to adapt and thrive for the future.”

Back in August 2011 we pointed out that this was indeed the obvious and logical solution:

Or we could observe reality and conclude that with so much shopping now done by computer we simply don’t need as many shopfronts as we used to. As with manufacturing, we could turn those buildings we no longer need to other uses.

Anyone know how to convert a shop into affordable housing?

It was good sense then, it’s good sense now, it’s just that things seem to be speeding up - we’re still 5 months short of that decade. No, we don’t claim sole and whole ownership of the original idea but we would like to suggest that perhaps people should start listening faster.

The Guardian, Consumer Reports, and America's water

The Guardian has teamed up with Consumer Reports to have a look at America’s water supply. They say that the results are terrible. We would urge a little consideration of the details of what they’re saying:

Since the passage of the Clean Water Act in 1972, access to safe water for all Americans has been a US government goal. Yet millions of people continue to face serious water quality problems because of contamination, deteriorating infrastructure, and inadequate treatment at water plants.

CR and the Guardian selected 120 people from around the US, out of a pool of more than 6,000 volunteers, to test for arsenic, lead, PFAS (per- and polyfluoroalkyl substances), and other contaminants. The samples came from water systems that together service more than 19 million people.

A total of 118 of the 120 samples had concerning levels of PFAS or arsenic above CR’s recommended maximum, or detectable amounts of lead.

Umm, wait a minute. Above CR’s recommended limit? Yes:

In the early 2000s, the EPA considered a drinking water limit for arsenic of 3 ppb, before settling on 10 ppb as an amount that balances the costs for water system operators while reducing health risks. CR scientists have long said the EPA should set a limit of 3 ppb or lower, in line with what other health experts and environmental advocacy groups, such as the Natural Resources Defense Council (NRDC), have called for.

CR invents a limit of less than a third of what the government does then claims that water supplies exceed the invented limit. The same is largely true of their findings about lead.

It’s entirely possible that As and Pb levels in drinking water should, righteously, be lower than what they currently are. But that is the case that needs to be made, proven. Rather than just the creation out of thin air of some number and then the claim that it’s not being met.

This is, as with so much of the environmental scaremongering of our day, an attempt to pervert the measurement of pollution in what is, after all, one of the cleanest human societies that has ever existed.

30 percent more government doesn't do it, does it?

The IFS tells us that the Scottish Government spends rather more per person than the British - or, if you prefer, the English.

Nicola Sturgeon's spending on Scottish public services is 30 per cent greater than the equivalent funding in England thanks to the Barnett formula, according to a study published on Wednesday.

The impartial Institute for Fiscal Studies (IFS) found a growing cross-Border spending gap, with the SNP administration in Edinburgh having more than £1.30 per person to spend on public services for every £1 in England.

Almost all of this difference - 28.9p out of 30.6p - comes from the Scottish Government's block grant from the UK Treasury, which is calculated using the controversial Barnett formula.

Leave aside the grand proof here we have of Milton Friedman’s contention, that there’s nothing so permanent as a temporary government programme - this was, after all, a late 1970s political fix expected to last for a couple of years.

Think, instead, of what this tells us of the continual calls for just that little bit more of government that we are constantly assailed with. If that little bit more on this and that and t’other were to produce a better society for us all then Scotland would be that better society to which we should all be aspiring.

Is it?

There’s no actual evidence from any real numbers that it is. Lifespans, addiction rates, educational achievements, any other such measure we care to look at, do not skew Scotland’s way in the manner that such hugely greater spending suggests they should. Or, even, as those who insist England should be spending greater such sums insist would be the result of such taxpayer penury.

Which is the correct manner of looking at these numbers. We have just conducted an experiment, a real world one. That greater public spending does not create the nirvana that is claimed. Therefore our solutions to making the world a better place are going to have to come from a different set of actions.

As we’ve been saying for decades now, it’s how the money is spent, not the amount of it, that makes the difference. Thus it is the structure of public spending that needs the reform, not the amount.

No, really - which of Scotland’s socioeconomic achievements is it possible to point to which justifies a 30% expansion of the State? None? Then the putative expansion is not justified, is it?

Why should someone on less than median pay be able to afford the median house?

It’s very difficult indeed to work out precisely what it is that The Guardian is complaining about here:

Low-paid key workers on the frontline of the Covid-19 pandemic would not be able to afford to buy the average priced home in 98% of Great Britain, an exclusive Guardian analysis has found.

Years of rising prices have put homeownership out of reach of many key workers, who have also experienced pay freezes and had to channel their wages into paying high private rents, rather than being able to save for a deposit.

The Guardian’s analysis, which was based on the sums needed for a 90% mortgage, found that a nurse on the median wage of £33,920 a year would not be able to raise a big enough mortgage to buy the median-priced property in almost three-quarters of local authorities nationwide.

Yes, this seems obvious.

According to the Office for National Statistics, the median salary for a senior care worker in the UK stood at £21,243 in 2020.

Based on these earnings, with a 10% deposit to put down, a senior care worker would be able to afford the average priced property in just six council areas in Great Britain, locking them out of 98% of areas.

So does that.

Someone paid less than the average cannot afford the average. Seems simple enough to us. The nurse example, the first one, is only very slightly more complex. The median - even modal - UK household contains two earners. Therefore it’s not a grand surprise that the median - even modal - house costs more than can be afforded upon one income.

The correct response to this complaint is a shrug and “Yes, that’s how numbers work”.

The lower paid do not afford the average car, the average weekly food shop, the average clothing budget, this is what making less than the average wage means. Why would or even should housing be any different?

This is all entirely different from whether housing is too expensive - it is - or whether we should do anything about the price of housing - we should, build more of it. Or even our perennial suggestion, blow up the Town and Country Planning Act 1947 and successors. It is also nothing to do with whether care workers should be paid less than the average wage, nurses about spot on it.

Maths just does work out that those with lower than average incomes can buy less than the average. And?

Reasons for optimism - population

Some commentators, famously including Sir David Attenborough, are pessimistic about the world’s population, especially about what they see as its likely future population, and think the planet is headed for a catastrophe of unprecedented proportions. Stanford Professor Paul Ehrlich led the charge with his 1968 book, “The Population Bomb,” in which he predicted worldwide famines in the 1970s and 1980s because we’d be unable to grow enough food to feed the rising population. This is the argument by which Thomas Malthus predicted recurring world famines as food supply would necessarily fail to keep pace with rising numbers of mouths to feed. Paul Ehrlich in April 1970 predicted that: “The death rate will increase until at least 100-200 million people per year will be starving to death during the next ten years.”

It was not just famines that the increased numbers, some suggesting 50 million people, would bring. They would pollute the planet, consume its resources, degrade the environment. wipe out most species, fight over scarce water, and lack decent living space.

Ehrlich wrote just before Norman Borlaug’s Green Revolution turbo-charged the world’s food yield. In the years before Ehrlich wrote, the world’s rate of increase in population had itself been increasing, but just as his book was published, it began to decline. Ehrlich and others had missed out on two important things. They underestimated humanity’s capacity to solve problems creatively, and they failed to spot what happens to fertility rates as people grow wealthier.

People in poor countries need children to work to augment the family budget, and to support their parents in old age. But as countries become richer, they can afford to put children into schools instead of fields and factories, and can afford social welfare to support the elderly. This is why population increases have tailed off as wealth has increased. They are negative in rich countries. Fertility rates suggest that the world’s total of over 7 billion will perhaps reach no more than 10 billion, maybe by 2050, and then decline. This is happening because more countries are becoming richer.

The world can handle 10 billion. It has increased its food production, and new technologies including GMOs and cultured meats indicate that it can do so much more. It has developed ways to produce energy and to provide transportation with far less pollution. It can produce more food without depleting rainforests. It has found ways to substitute new plentiful resources for scarce ones, using carbon composites instead of steel, and fibre optics instead of copper. Julian Simon’s “Ultimate Resource” of human creativity has shown itself capable of producing innovative solutions to humanity’s problems.

Paul Ehrlich was systematically proved wrong in his predictions by events, as his pessimistic forecasts never came about. The world is already responding creatively to the challenges that an increased population will bring, but it will be nothing like the increase that a straight-line graph or a rising curve suggested. There is reason to suppose that the world can cope, aided perhaps by the addition of the new creative and better educated minds that are joining it. The outlook on population does not support the pessimism that doomsayers spread. On the contrary, it is grounds for optimism.