Mr. Chakrabortty rather misses the point here

There are those who think that government should be more involved in the planning and development of the economy. The wisdom, perhaps, of those attuned to social returns beating the grasping nature of the capitalists - or some such construction.

Aditya Chakrabortty tells us of events in Manchester:

The report says that nine sites were sold to the sheikh at a fraction of their value, and well below what other plots nearby fetched (the council says it used independent experts using standard valuations, although it won’t give any more details). They were on leases lasting 999 years, well beyond the norm. And the fund shifted what had been public assets to companies registered in Jersey.

That walk along the water from New Islington into Ancoats now passes blocks of privatised land owned in an offshore tax haven, which yields millions upon millions for a key member of the wealthy elite running a surveillance state halfway across the globe. One of the greatest cities in the world has sold itself to a senior figure in a brutal autocracy – and not even for a good price.

Chakrabortty goes on to suggest that the council would have done better to do it itself, rather than selling these assets to the capitalists. Which is indeed one way of reading it, we agree.

We also take the opposite view. This is proof that politicians, with that eye to the social values, not financial, aren’t in fact very good at matters economic. In fact, they’re terrible at it.

Which is why we don’t use government to do that economic planning and development - not if we’re sensible about it. On the grounds that government just isn’t good at planning and development. The proof being these complaints about what happens when government tries it.

The purest piffle about aviation and climate change

We’ve touched, recently, on the subject of aviation and climate change emissions. There’s now someone in The Guardian spouting the purest piffle on the subject:

Britain is boiling – and the government wants to dramatically expand UK aviation

Leo Murray

Its ‘jet zero’ strategy relies on the invention of pie in the sky technologies to tackle dangerous airline emissions

The first point is about scale. Currently aviation is some 2% of emissions. The UK’s share of that is about the same as that of global GDP. 2% or so, around and about. Us all going to Benidorm is perhaps 0.04% of the global problem. This is a rounding error. Even if we accept that in the future aviation might become 20% of all emissions that’s because all other emissions decline by 90%. Making the effects of the residual, again, a rounding error.

Aviation simply isn’t an important part of the problem, however much weight we might want to put on there being a problem in the first place.

This doesn’t stop people like Mr. Murray aiming to ration flights so that we all gain less of what we desire. Presumably to provide some sort of bansturbation pleasure from doing so. As one of us put it a couple of decades back in The Times:

One candidate is the verb “to bansturbate” (origin, Harry Haddock, who blogs at nationofshopkeepers.wordpress.com). The word – a fusion of “ban” and the term for self-abuse – refers to both the public abuse of the rights of the citizenry as things that some people simply disapprove of are made illegal, and the near-sexual frisson of pleasure gained by those who pass such laws.

But while such sumptuary laws might give that sexual frisson to some - and who are we to argue with how some gain their jollies these days? - the real problem is that it’s based upon gross, gross, ignorance:

Then there’s so-called “sustainable aviation fuels” or SAFs. These are usually nothing of the sort – because burning huge amounts of biomass or waste is also extremely detrimental to the climate. The “jet zero” strategy also relies heavily on greenhouse gas removals to balance the books. This concept would allow airlines and airports to continue polluting for decades, putting off real action to cut emissions now with the hope that unicorns will arrive some day to suck those millions of extra tonnes of pollution out of the sky and store it underground.

The truth is there is only one method for reducing aviation emissions that we know works, but the government refuses to do it: reduce the number of flights.

No. We already know how to make sustainable aviation fuels. Not already know, people (our example here is Shell but they’re not the only people) are already doing it. If you’ve got green hydrogen, which renewables and electrolysis can easily - if not as yet all that cheaply - provide, then the chemistry of moving up to synthetic jet fuel is not just simple it’s been known for a century.

The Stern Review tells us not to try to plan, in any detail, our response or solution to climate change. This is wrapped up in the usual economic strictures about the paucity of information available to the planners, the inefficiency of central direction as compared to market forces and so on.

What is actually meant is that we don’t want planning because we’ll end up with plans of the most perfect piffle as a result of the gross ignorance of the planners.

Mr. Murray, the door is over there. Don’t let it tap your tushie on the way out.

Madam, this is the argument in favour of tax cuts

We do realise that the IPPR is well to the left of us. Vastly more statist, prodnose and interfering. But is it really too much to ask that they actually understand the arguments?

Perhaps most importantly, permanently cutting taxes has consequences – and would require a scaling back of the state.

Yes, that’s right, that is the argument in favour of tax cuts. That it would mean that the state must become smaller. It is possible to run the argument the other way, we should shrink the state in order to be able to have tax cuts. Which is attractive as an argument but it is not in fact the full pith and pit of the logic.

Liberty is when we get to do what we want. The limit to this is the damage our doing so might do to the rights and abilities of others to do the same. JS Mill is hardly a new entrant in these definitional stakes.

So, the liberal society is one in which that liberty, that freedom, is maximised. Government is indeed necessary - we are not anarcho-capitalists - but should be limited to only those things which both must be done and can only be done by government. All else is, as one constitutional document from another place puts it, to be left to the people.

Scaling back the state to accommodate tax cuts is not a problem in the slightest. Cutting taxes so that the state has to shrink is the actual argument in favour of removing the state from our wallets in the first place.

Nobody knows anything

We’re not convinced that this is the whole of the truth, the entirety, but let’s go with this as a working assumption:

Venture capitalists are clueless – the likes of Klarna and Uber prove it

As values crash, it's becoming clear that many VC firms simply got lucky once and have coasted ever since

Having the clueless spraying around societal resources doesn’t sound like all that good an idea if we’re honest about it. It would also seem to be a verification of William Goldman’s line, “Nobody knows anything.” Which also leads to the follow up “not one person in the entire motion picture field knows for a certainty what’s going to work”.

We are willing to agree, entirely, with that second version of the point. Also, to believe it about the wider society and economy. Varied people might have some ideas of what might happen, try to position themselves to take advantage of it, but no one is certain about what will work.

But if having the VCs spraying those resources around isn’t entirely optimal then of course this suggests that some different method will do better. Which is where those economic planners make their entry. If we use the very bright people - those Rolls Royce minds - who populate the Civil Service (and, to be even more ludicrous, the less RR minds that constitute politics) to decide upon what everyone else must do then resources won’t get wasted, will they?

Except, of course, the entire point of planning is that there will only be the one way that anything gets done. But we’ve all just agreed that no one knows what will work. So deciding upon just the one way takes us further away from other discovery of any of the ways that might work. For we’ve concentrated the decision down onto the one single method which is no more - or to be fair, less - likely to work than any other.

The VCs directing matters from Mayfair isn’t, we’re aware, all that appealing. There are those who would prefer the Civil Service to be doing it just down the road in Whitehall.

But the actual point here is that VCs is plural, meaning many experiments, “the” Civil Service is singular, meaning just the one essay at an attempt. And in the fog of ignorance which system is more likely to luck into something that works? The one with multiple attempts of course.

Or, as has been pointed out more formally before, markets are the way in which we experiment to find out what works, something that planning doesn’t do nor even allow.

All of this long before we consider whether today’s Civil Service or politics does in fact contain the Rolls Royce minds of our generation where finance does not. We ourselves know large numbers of people in both of those sectors, we’d need more than just a certain amount of convincing of that contention.

Sadly, John McDonnell appears not to know what poverty is

One of the little difficulties possible is that if a weird, or odd, definition of something is used then folk might forget what that definition is. Thus they end up spouting nonsense because they use numbers as defined but forgetting why the definition used militates against their proposed policies. This has just happened to John McDonnell on the subject of poverty:

There are 14.5 million people in poverty in Britain, including 4.3 million children. Two-thirds of those children are in a household where someone is in work. If you are in work, even if your company is booming, you have little say over whether you will benefit from its profits. If your landlord increases your rent or threatens eviction, or if your mortgage company fails to pass on interest rate cuts, you are largely powerless.

The prices of the basic goods you need to live on are set by a small group of multinational companies that between them carve up the market and set the prices to profiteer. So it’s a statement of the obvious that poverty is caused by the combination of low incomes and high living costs faced by many British people. But what brought this about?

That is, we’re afraid, abject nonsense. Not because it disses our favoured neoliberalism, nor because it’s against our beloved markets. But because it doesn’t understand the definition of poverty being used.

Which is living in a household on less than 60% of median household income, adjusted for size, after housing costs. This measure of poverty is one of relative poverty - having less than others. Carving up markets, profiteering, have nothing to do with this whatsoever. This is about the distribution of incomes, not the prices of goods and services.

Think on it - if every income in Britain doubled tomorrow then the poverty level would be exactly the same as it is today but living costs would be remarkably more affordable. If every income halved then inequality in income distribution would be exactly as it is today and therefore so would poverty - while living costs would have become remarkably less affordable.

The poverty level claimed is all entirely nothing to do with high living costs at all. Because of that original definition of poverty being used - one of inequality, not absolute standards of living.

The problem with forgetting - if ever even known in the first place - the definitions created to show how appalling the modern world has become is that by forgetting one misses what has in fact been defined. Therefore any proposals to fix the problem fail given the lack of knowledge of what has originally been defined.

Or, you know. GIGO. Garbage In, Garbage Out.

McDonnell’s original statistic is about inequality of incomes, his subsequent burbling is about the absolute level of prices. These are entirely different things. He’s therefore wrong because he’s forgotten how his original numbers were compiled and defined.

Net zero doesn't mean that aviation needs to be zero

There’s an horrendous logical mistake being made over climate change and emissions. Ah, yes, we might say several but just stick with this one for the moment. Take this net zero idea as a goal - no, just assume that to begin with and let us then explore.

We then get told that individual sectors, or actors, or activities, must then become non-emittive. Which isn’t the point of net zero at all, rather, society as a whole should create no net emissions.

This does matter:

Where are we with emissions? The IBA consultancy ran a webinar last week looking at just that question. Since 2018 the average amount of CO2 produced per seat flown has fallen by nearly 6 per cent. But total emissions are due to increase, thanks to commercial aviation’s steady growth. Next year we are forecast to be back roughly where we were before the pandemic struck, with 900 million tonnes of CO2 produced by airline fleets. After running through the various new technologies available, IBA concludes: “There is no readily available technology to radically decarbonise aviation.”

The industry has a goal of reaching net-zero emissions by 2050.

But the industry shouldn’t be trying to reach net zero - it’s the whole society which has that aim. The entire point of the “net” part of the phrase is that there will be emissions, somewhere in some corner of the economy, and that those will be outweighed by negative emissions elsewhere. This does - logically and obviously - mean that we’re fine with there being positive emissions somewhere, in some corner of the economy.

Net zero doesn’t mean that all activities must be non-emittive, it means, by definition, exactly the opposite.

Now we have our suspicion - and it’s no more than that - that the way aviation will work out is cheap solar to electrolysis, green hydrogen through Fischer Tropf to jet fuel. That would be a zero gross emissions process.

But we do still insist upon this basic logic. The very fact that the rallying cry is “net zero” emissions includes, as a logical certainty, that we’re fine with certain activities creating emissions. Simply because if we weren’t then the cry would be “zero” emissions, not “net zero”.

Zero emissions having a certain problem to it, as with humans and other mammals continuing to breathe.

But why do we want to entice people out of their cars?

Something we don’t understand:

After two years of Covid-driven decline in public transport use and increasing automobile traffic globally, what can governments do to entice people out of their cars?

Why would we want to do this?

Yes, of course, we understand the climate change argument about emissions. We grasp the one about urban pollution from tailpipes too. We’re not sure we wholly agree with either argument but we do grasp what they are. We’re also absolutely certain that folk like autonomous transport, that which allows the ability to travel from anywhere to anywhere, anywhen.

So, assuming we can solve those two claimed pollution problems then why would we want to get people out of cars?

And society does at least claim to have a method of solving those two pollution problems, electric vehicles. Which is where we get confused. If we’ve already got that solution which we’re paying billions upon tens of billions to put into effect then why is there also this push to solve that problem already solved at such expense?

Of course, no one would possibly be using climate change, or urban pollution, as some excuse to remake society in some collective direction. It would be absurd to place the entire mobility of society in the hands of public sector unions, of course it would, unless there was no other possible solution to our problems.

So, given that no one would hide their motives, nor deliver us into economic bondage, in that manner just why would we want to tease people out of their cars? We’ve already solved the problem with EVs.

What is it that we’re not grasping here? If EVs don’t solve the problem then why are we bothering, if they do then why do anything else?

Adieu ASI!

Today marks my final day as part of Team ASI. My stint at this gilded institute has been defined by opportunities I truly could never have imagined and meeting the kind of people that would make any nineteen-year-old politics buff tremble at the knees.

Since first entering the imposing wooden doors I was instantly struck by the energy oozing from each corner of the building. The rich ensemble of classical liberal memorabilia adorning the walls and bookshelves to the archives of research papers chronicling the history of the free-market revolution over the past four decades. But the true excitement is in the people here. It has been a delight to meet the wide range of characters that come to our events and feel a real sense of growing camaraderie with the regular attendees. 

Yet my experience would have been far diminished if not for the Adam Smith Institute team. Being at first nervous in moving hours away from my quiet Cheshire family home, the superbly talented ASI staff were instantly hospitable and warm, and soon my initial worries disappeared. 

In my time here I have been exposed to a wide range of duties. Regular intern responsibilities involve maintaining a clean upkeep of the office and scanning documents when called upon. Yet this was not all I did in order to receive the monthly stipend. I have been eager to immerse myself in the esteemed ‘wonk’ side of the Institute, something I’ve found the ASI to be more than receptive towards. This has led to me producing a wide-range of internal research papers, co-authoring the influential briefing paper ‘Pulling Out All the Stops’, having work I’ve produced on childcare being forwarded onto MPs as well as being the focus of a roundtable discussion for Parliamentarians. This comes alongside countless articles I’ve written for outlets including CapX and 1828, having discovered a real passion for writing.

But don’t be mistaken in thinking the ASI is all work and no play. I have been greatly fortunate to attend two staff trips: a week in blistering hot Gran Canaria, and jetting off for lunch in Copenhagen (yes, lunch), besides a five-day excursion to Colorado for a conference with the Objective Standard Institute. A highlight of mine was in turning a year older on a particularly, uhm, ‘blurry’ night this May, surrounded by friends from the ASI in the classic Westminster establishment, Players Bar. But if there is one memory that time will endure, it would be our July ‘The Next Generation’ event. Twenty minutes before being set to take the stage, our speaker (Sajid Javid) resigned from the Cabinet. Few moments in life will match the exhilaration in being surrounded by a troupe of journalists as the Government began crumbling. It was the Westminster circus on go – and I had a front row seat to the entire performance. 

A quiet moment of introspection soon reveals the extent of my growth this year. I first arrived as a fairly naive teenager indulged in a lifetime of his mother’s cooking and lavender-scented pillowcases. Now I stand before you, an independent young man with a quiet confidence in his ability and a marked optimism about the future.

I’ll always maintain a soft spot for the ASI for how they treated me. Since joining I have felt nothing but respect, trust, and above all else, being a valued member of the team. My patron saint once exclaimed there was no such thing as society, which now I begin to doubt. What I have felt at the Adam Smith Institute is a close-knit community bonded together by a solemn fondness like that of a family. When even being sat in the office in complete silence (which as any team member would confirm, is a rare phenomenon), you can’t help but feel that you are part of a mission much bigger than your mere self.

The past nine months have been an enlightening time where I have learned much about the world and myself. With the Institute bustling with talent, flair and passion, the ASI is well-positioned for an immensely successful future. 

I do not know when I’ll be next at the ASI. Whether soon or in years to come. But one thing for certain is that returning will always feel like greeting a long lost relative. 

It's called the market George, the market

George Monbiot has a solution to the lack of democracy he perceives in the current political set up:

Society is a complex system, and complex systems can never be sensibly and benevolently controlled from the centre. A centralised, hierarchical system means concentrated power, and concentrated power favours concentrated wealth. Systems like ours are easy for billionaires and their media empires to co-opt.

The human urge to take back control, loudly promised by governments that have done the opposite, is real. To a far greater extent than has been permitted in our recorded history, we should be allowed to manage our own lives.

All of this is entirely true, of course it is. But he then goes on to suggest that the complex system should be controlled by politics - just local politics. The actual answer is that the system shouldn’t be controlled by anyone as no one is able to control it. That is, leave as much as is possible to markets, using politics and governance to do only those things which absolutely must be done through that process.

Unlike classical anarchists, Bookchin proposed a structured political system, built on majority voting. It begins with popular assemblies, convened in opposition to the state, open to anyone from the neighbourhood who wants to join. As more assemblies form, they create confederations whose powers are not devolved downwards but delegated upwards. The assemblies send delegates to represent them at confederal councils, but these people have no powers of their own: they may only convey, coordinate and administer the decisions handed up to them. They can be recalled by their assemblies at any time. Eventually, in his vision, these confederations dislodge the states with which they compete.

No, really, just leave people be to do as they wish. Their interactions then become the system itself.

For, given that we’ve all accepted the predicate, that complex systems cannot be controlled from the centre, why are we then arguing about how that centre should be constituted which cannot, by definition, manage that complex system?

The answer is, instead of complaining about the selection method of the managers, to simply stop the management.

Finally Some Good News About Child Care

With the final refinements of this article complete, I reclined in my chair with a wry smile. The clock positioned imposingly above the desk confirmed my mission was a success: finishing before the workplace’s adjournment at 5:30. Thirty minutes later and the Government was collapsing.

Needless to say it was unfortunate timing. The speaker at our monthly ‘The Next Generation’ event was now, well, no longer in a job – making things quite difficult as he was set to take stage within the next twenty minutes. But also now it meant the gaze of public attention was casted far from an article on child care deregulation written by a nineteen year old policy wonk. But with the real worry that by the time this article was posted the children which were intended to benefit from it would have begun sprouting facial hair and socialising over a bottle of raspberry-flavoured vodka at the local park, I am much relieved in a degree of political clarity being restored. 

Amidst all the recent carnage with the leadership election, there is some timely news for families. The Department for Education (DfE) has finally come forth and provided solutions to fix the ‘broken’ child care system. 

Faced with some of the highest costs in Europe, new-time parents are regularly required to fork out a higher proportion of their income on child care costs than their mortgage. As was expressed in our briefing paper ‘Pulling Out All the Stops: How the Government Can Go for Growth and Cut the Cost of Living’, this is primarily due to child:staff ratios in the United Kingdom – that being the number of infants each individual child care worker can look after – being some of the most stringent in the world. With an estimated 77% of child care costs going towards the overheads of care centres, relaxing the burdensome child:staff ratios will allow this cost to be spread across a wider population, and so reduce the amount paid by each individual family. 

Needless to say we weren’t overly optimistic. The Government has so far addressed the cost of living crisis with the quiet stolidity of a taxidermied moose. Yet by no means were we the lone patron genuflecting at the deregulating altar. The Centre for Policy Studies and CapX’s Deputy Editor, Alys Denby, has been rallying the cause in all corners of discourse, including a scathing piece in the New Statesman which concluded ‘I thank Boris Johnson for trying to tackle this problem. After all, if he can have seven (or eight) kids, why shouldn’t a professional childminder look after a few more?’

In hindsight our worries proved unfounded. The DfE indeed have shown their capacity to listen, recently deciding to relax child:staff ratios for two year olds from 1 to 4, to a now looser 1 to 5. Meaning one staff member can now look after an additional child from what they could previously.

Irrespective of our recommendation being watered-down further than the Pimms served at a sixth-form prom, we greatly welcome the direction set out upon. Strict child:staff ratios are a poor method of mandating quality within care centres, with one study finding that ‘variations in [child:staff] ratios have small, if any, associations with concurrent and subsequent child outcomes’. They have also been seen to bring undue harm through forcing families into using cheaper alternatives, such as non-relative home care, which has been found to regularly fall short of that given by a care centre. 

Relaxing child:staff ratios has proven itself as the surest way to reduce child care costs. An investigation into such ratios found that loosening by just one child is estimated to reduce cost by 9-20%. The Government have taken a more modest line, predicting that their change will bring a £150 reduction in costs for families each month. A sizable amount amidst the troubling times we find ourselves in, with the squeeze on household incomes currently the worst in three decades. 

And yet, the Government must still go further. Bringing our child:staff ratios inline with that of Austria and Portugal (currently pegged at 1:7) would offer further relief for families, and lift a real burden off the back of many who find their pockets cash-stricken.

The relaxation of child:staff ratios appears as a repressed memory of how a policy ought to be – employing reason, rationality, and above-all-else common sense in solving the problems facing the nation. It has a proven track record of success and gives little reason to be feared. The next Government, whatever form it may take, would be well-advised to maintain this momentum and loosen child:staff ratios still further.