It would be very good news for California if Arnold Schwarzenegger becomes their new governor after October 7th. Good news for Madsen Pirie, of course, because I stand to win a bet placed three and a half years ago with William Hill, Britain's leading bookie. Good news for California because he offers a new way.

Arnie holds an economics degree and reveres Adam Smith and Milton Friedman. Moreover he knows how economies work and what motivates people. Millions of Californians face a three-fold increase in car taxes next week, but Arnie plans to lower taxes. He intends to ride the Laffer Curve so that more business comes in, more start up, and more jobs and wealth are created. That means more prosperity and more revenue generated by the new economic activity.

The 1980s tax cuts by Reagan in the US and Thatcher in the UK both brought in more revenue at the lower rates, and both saw the richest ten percent paying a higher proportion of the income tax total. Hey, lower taxes, more to spend and the rich paying a fairer share? He'll be returned.

Is the Lord of the Rings the most boring series of films ever? I sat through the second in the trilogy, The Two Towers, and just wanted to go to sleep. The pointless dialogue, endless battle scenes and lack of a story made this quite possibly the worst film I have ever watched at the cinema.

I asked Madsen Pirie what he thought of the Two Towers. It turns out that he refused to see it until it came out on DVD. He wanted a fast-forward button. "That button was a godsend. I used it at least twenty times during the movie."

Yet the Lord of the Rings films have netted lots of money. Bad films, making lots of money. Is this an example of market failure?

Well, no. Because lots of people really like the movies. An important part of the free-market economy is that it recognises that different people like different things. Instead of a bureaucrat - who "knows best" - deciding what people will like, it lets individuals themselves make their own choices. And that is a wonderful thing.

Britain's free national health system is the most socialist model of healthcare in the world. Countries that are far more left-wing than the UK have a much greater mix of public and private sectors.

Their experience tells them that you need public involvement, through funding, to make sure that everyone has reasonable access to health care. But you also need the economic viability that comes from competitive provision of services. And the responsibility that comes from people paying at least part of their health costs.

But wouldn't it be easy enough to do all that in the UK? The government's 'foundation' hospitals and privately-run walk-in clinics are a (feeble) first step to diversity provision. Couldn't we then go on to divide the NHS into a series of competing German/French/Dutch-style 'sickness funds' and let people choose between them on the basis of what value for money they provided? And just cover basic services in that system (like those three countries again) but expect people to pay top-up insurance or top-up charges for more exotic treatment?

Despite its socialist NHS, the divide between the treatment which the richest and the poorest get in Britain is bigger than in any of these other countries. If you want equality in healthcare, use the market.

Any document headed 'strategy' should be torn up, and the UK government's new National Skills Strategy is a case in point. Alarmed that 40% of kids leave school at 16, never to return - among developed countries, only Greece, Turkey, Mexico have lower rates - Whitehall wants to do something about it.

So we're going to have a raft of new initiatives to get people up to 'Level 2' (ie no more than a basic set of 5 GCSE school-leaving exams), create new training qualifications, and to 'join up' education and training agencies.

All garbage. It's just an attempt to correct, in the workplace, what our rotten state education system hasn't done at school. If instead of a failing state monopoly, we had diversity and competition in schools, then maybe educators would give kids what they really need to get on in life - and enthuse them in the process.

And why do we need new government-run vocational qualifications when independent agencies already provide them? We should let employers decide what they need in the market, not force them into something they might regard as no good.

And joining up the agencies is a laugh. England has 9 Regional Development Agencies, 47 Learning and Skills Councils, government departments for skills, education, work, who knows what, plus a zillion other work and training quangos. You couldn't even get them all in the Albert Hall, never mind getting them to agree anything.

No, in this case, government is the problem, not the answer. The way all this costly regulation is going, the only people who're going to need skills anyway are those who work in the unemployment offices.

Instead, we should get to the core problems. Free our schools from centralized state bureaucracy. Free our training market. Sweep away the costly quangos and cut tax and regulation on business.

Actually this is my second worst nightmare: my worst nightmare is not for gentle and sensitive readers. But trust me, this is insomnia inducing enough.

What if Tony Blair is not re-elected? Break out the Champagne? Well, perhaps. But take a look at what the opposition parties are offering. There's Ian Duncan Smith, a man with the charisma of a snail, then there's Charles Kennedy with his rich tea biscuit version of Marxism. But this is not the stuff of nightmares, no my secret horror is more visceral than any damage those two nonentities could do to this country on their own.

Imagine that Tony's public ratings slide even further. Labour panic. He is replaced, in a depressingly familiar coup d'etat, by his rouge rival Gordon Brown. Labour then proceed to lose the general election. But they don't die. Glassy-eyed and incoherent, they somehow stagger on in an unholy alliance with the Liberal Democrats.

The horribly realistic scenario that awakens me in the dead of night is of a political Frankenstein's monster, a lumbering lobotomised creature lurching from one crisis to the next, pulled in different directions by irrational demands from hysterical pressure groups.

In this atmosphere of anarchy and abnegation the electorate would feel disenfranchised. Extremists would therefore have a field day polarising public opinion. And meanwhile one concession after another, handed down from a parliament bereft of principle and buried in compromise, would irresistibly increase the power of the unelected and the unaccountable.

In other words, our government would be just like those on the Continent. Our assimilation into the European Collective would be complete, and without even joining the Euro.

Adam Smith gave us the analogy of the market's invisible hand. Now Arnold Schwarzenegger has given us a complementary economic analogy - the government's heavy fist:

I have often said that the two people who have most profoundly impacted my thinking on economics are Milton Friedman and Adam Smith. At Christmas, I sometimes annoy some of my more liberal Hollywood friends by sending them a gift of Friedman's classic economic primer, Free to Choose. What I learnt from Friedman and Smith is a lesson that every political leader should never forget: that when the heavy fist of government becomes too overbearing and intrusive, it stifles the unlimited wealth creation process of a free people operating under a free enterprise system.

Sound stuff, or what?

I recently travelled around the Americas. I went from financially ravaged Argentina to third world Nicaragua and the subsistence economies of the Bolivian and Peruvian Andes. One passes through different booths to get different stamps and photocopies as well as paying an entrance fee to get into Nicaragua or Honduras. Everywhere I saw antiquated bureaucratic practices. I have never, however, been to a more over-regulated, paper-happy country than the United States, or one more mindlessly subservient to bureaucratic minutiae.

On entering the country, with no matter what passport, you are treated like a criminal or socio-economic migrant. Several forms need to be filled in, many of their requirements duplicated, unnecessary and arbitrary. This practice doesn't stop at international boundaries. There are occasional police checks on interstate roads, and even occasionally at state borders. Post 9/11 fear is all encompassing.

Rights are being eroded and regulations piled on like cheese and freedom fries at a burger joint. It seems that obesity and laughable laws have a bizarre relationship. In America, you can die for your country at 18, but you can't buy a beer until you are 21. In America you can kill on the roads with reckless driving at 15 in some states, but experienced drivers usually have to stay below 55 miles per hour or risk a ludicrously overpriced speeding ticket.

California is the worst state for this sort of thing. Their claim to liberalism extends as far as a blanket ban on smoking in public places, highly subsidised but under-used public transport, and ecological policies whose costs greatly out weigh their benefits. Their sales tax is one of the highest in the land, their public schools amongst the worst.

Much regulation is a deterrent to independence and enterprise. Liberty is not the freedom from (pollution or second hand cigarette smoke) but it is a freedom to make one's own choices (like how fast to drive, or what and when people are allowed to consume on your business premises. The American Land of the Free should look to more laidback, more liberal countries to see how it should be done.

A man walks into the Alternative Bookshop (a libertarian bookshop of the 1970s and 80s). He shows the staff a book he has written and says they should stock it. The staff take a quick look at the cover and reply that it's not sort of book they want to stock. "But you haven't read it. You can't judge a book by its cover!" he says. Yet the staff are insistent that they don't want the book: "Considering that we're not going to read it," they answer, "how else do you propose we should judge it?"

Judging a book by its cover is a very rational way of deciding whether it is good or not. Whose imprint is on the cover? If a major publisher has invested in getting a book to print, you know that a serious player takes the book seriously. The back cover normally gives some idea about content. If the design looks professional, it indicates that a lot of care has been put into making the book. In fact, there's a great deal of information conveyed by book covers.

This brings me to Brian Micklethwait's Education Blog, which has just been redesigned. Some people really like new design, others don't. This is of secondary concern. The important thing is that its new design says to visitors: "This blog has been professionally designed. Therefore whoever is behind this blog takes it seriously. It is worth reading." And, of course, Brian understands these things: it was a young Brian Micklethwait working at the Alternative Bookshop who judged books by their covers.

Two recent referenda in the Baltics showed that the Estonian and Latvian peoples want to join the European Union - and that their countries will do so as planned. The decisions followed an earlier one in Lithuania which also endorsed EU membership.

At best, all this may be seen as an embrace of West, or rather a symbolic turn away from the former Soviet East. At worst, the EU's Brussels may take on the role that Moscow had in the Soviet days: an interfering statist outsider.

With a flat-tax system in Estonia that the Economist calls "stunningly simple" and "remarkably successful", replicated in Latvia, we've got to ask whether it was wise for these Baltic states to join the EU at all. In the Baltics, regulation of industry is low, and the rate of inflation is very low, although the Estonian crown is pegged to the euro.

Maybe full independence from the EU would have been a good idea, but this could have simply led to a drift back towards Moscow. Perhaps Brussels is the lesser of two evils.

A UK government report says that alcohol abuse costs the country £20bn a year. Half the streetcrime is alcohol-related, as is much of the absenteeism from work. And excess alcohol causes 22,000 early deaths a year.

Excess alcohol drinking may be a problem, but it's nothing compared with excess government - which costs the country more like £500bn a year, a staggering 42 percent of everything we earn.

Too much crime is government-related too. Prostitution's a crime only because politicians think it's infra dig. Employers become criminals when they accidentally breach any of the 15,000 new regulations brought in since 1997. So do people who can't afford to dispose legally of their old car or old fridge under the new environmental rules. And anyone who dares smoke in public-sector buildings. 661 new criminal offences have been created since 1997. Excess government is turning us all into criminals.

Government's a major cause of absenteeism. Workers in our big ministries take off 9.5 days a year, 50 percent above the national average, costing taxpayers £640 per civil-servant.

And premature death? 5000 people a year die from infections they pick up in our filthy NHS hospitals, and they are the ones lucky enough to get into hospital before they drop dead or become inoperable anyway. Need I go on?

When Gordon Brown announced the biggest bung in history to 'invest' in the improvement of public services, we sighed sorrowfully and predicted that 70 percent would be wasted without showing visible improvement. Now it seems the public has come round. The latest YouGov poll shows large majorities who think the same. The think tank Reform has played a key role here. No doubt we will continue to read politoins telling us that all is well; but we know it isn't.

The expensive lesson is that the system has to change. You cannot provide decent, efficient services centrally financed and directed. They will be captured by producers and vested interests. They will be over-bureaucratized, inefficient and insensitive. Consumer choice, by way of education vouchers and health passports, could bring in some competition and efficiency by making the producers independent. But these are halfway houses.

The model that works is probably one which allows people to seek their own provision for these services, via savings accounts or insurance schemes, and which concentrates the state's role to ensuring that no-one is denied decent services because of poverty. It has cost us huge tax increases, and an erosion of Britain's competitive position to learn that lesson.

Socialized medicine has betrayed its original aims. Far from providing free care to all, it can't even provide them with free dignity any more - as Britain's National Health Service shows.

Take Air Marshall Sir Patrick Dunn, the 90-year old World War II hero, who fell recently at home. His 92-year-old wife called the emergency number. But the paramedics who arrived left him on the floor begging for help, saying that 'regulations' forbade them lifting him.

Why? Because the NHS authorities don't want to face lawsuits from staff injuring themselves when lifting heavy patients. Sir Patrick, though, weighs less than 140 pounds. But under socialism, rules is rules.

Poor Lorraine Wolsenholme, an MS sufferer, weighs even less. But she's had to sit, eat - even sleep - in a wheelchair for the last 15 months because nurses are banned from lifting her into bed. She reasonably complains that she's being treated worse than an animal.

Quite right. Next time I'm sick, I'm not going to a state-run hospital. I'm going to the vetinary. Vets at least treat their patients as valued individuals, and treat them with some dignity. That's because their livelihood depends on it. But when people's livelihood depends on complying with bureaucratic rule-books, don't expect much in the way of service - or even animal levels of dignity.

Cancun on the rocks would be a good name for a drink to celebrate reform of WTO. Like its predecessor GATT, it has failed to make progress towards genuine free trade. Its approach leaves a regulated system rightly deemed to be biased in favour of Rich Countries.

WTO can never succeed while it confounds free trade and fair trade. There is no such thing as regulated Fair Trade. Only a willing buyer meeting a willing seller is sustainable. Fair Trade is a concept conjured up by anti-capitalists, anti-globalists, politicians, lawyers and socialists. Their definition of 'fair' might not be widely shared. But free trade benefits those who engage in it.

A large share of blame lies with the rich countries. Anxious to protect their farmers, they deny poorer countries the right to sell in their markets, and dump subsidized goods onto world markets to undercut farmers in poor countries. France takes a large share of blame, but so do Germany and America. WTO should be banging their heads together and demanding no subsidies and open markets. Instead it has become a bureaucrat's pantomime. Hope for future liberalization of trade probably owes more now to bilateral deals than to the hitherto sustainable WTO circus.

I can't comment on the case of Margaret MacDonald, on trial in France accused of running a network of 500 call-girls. But in a country where - thanks to press censorship - half the politicians (and no doubt half the judges) are bonking mistresses, prostitutes or both, it seems pretty odd.

What harm does high-class prostitution do anyway? Willing, wealthy buyers; willing, streetwise sellers; good pay rates... Where are the losers? Maybe a few femi-nazis who say it demeans women (or bear a grudge that this market would never clear their particular shelves anyway).

The problem is at the other end. Where girls from poor countries are lured to rich ones, and effectively imprisoned in brothels either because they're hooked on drugs or they know that they're working illegally and fear imprisonment or deportation.

And again, the only answer to that is legalization. Sure, we might not like all the consequences: more women in prostitution, more in-your-face brothels and advertisements, more widespread health risks. But in a legal market you can tackle stuff like that. And at least violent thugs would no longer be able to prey on the fears of young girls.

As I have said before, this government has no feeling for the rule of law. It has systemically violated the principles which protect us from over-mighty and arbitrary power. Now it moves spitefully to strip Lord Archer of his peerage by retrospective legislation. He is the only one affected by this vindictive extra clause. Losing his peerage was not a punishment when he committed his crime. His prison sentence might have been lighter if it had been.

Lord Falconer said that banning those sentenced to more than a year in prison "brought the Lords in line with the House of Commons." Not true. An MP who is banned can be re-elected, but a Lords ban is for life.

The government thinks, not necessarily rightly, that Lord Archer is unpopular and widely disliked; but this no reason to undermine the principle that a person should know the legal consequences of a crime at the time it is committed. It will serve the government right if their new law is subsequently overruled because it violates an important human right.

We could make a modest contribution to the UK housing shortage by encouraging people to increase the living space of their existing homes. If we reduced the 17.5% Value Added Tax to zero on attic or basement conversions, or on conservatories, many people would choose to expand their houses. There would be extra space for granny, enabling many of them to stay out of institutional care. There would be space to give the teenager some privacy at home, instead of having to move out.

It should be popular with conservationists because it would reduce the pressure on land for new building. It would generate huge numbers of jobs in the building trade, for carpenters, glaziers, electricians, plumbers and decorators. The Labour Government should adopt it as policy. And if not, the Conservatory Party should use it to attract support.

I attended a Spiked debate last night on blogs. An issue brought up by James Crabtree of the Work Foundation was whether adding millions of new blogs to the current "blogosphere" would have a positive or negative effect. My take on this is that increasing the number of blogs will be good. But not all current bloggers will like it.

It does not matter if there are 40,000,000 poorly-written blogs. The blogosphere is good at filtering content, and will cope with this. There are already hundreds of thousands of blogs which are largely ignored. In the future, for a blog to get linked to by the biggest read blogs, a higher standard of content and design will be required. This is because there will be more material to play with.

Some bloggers will feel that the blogosphere is not as good as it used to be before the masses joined it. They will complain that there is too much power held by the top blogs like InstaPundit and Samizdata. Of course, the only power they have is that they consistently provide what their readers want.

Nevertheless, this is all good for readers of blogs - because the quality of items they are pointed at will go up. Many have praised blogs as a medium because there are virtually no barriers to entry. That is true, but you still have to have a good product.

With UK local authorities threatening council-tax rises of up to 25 percent, British government ministers say they'll move to cap the rises. They're in a real fix. They say they believe in local autonomy, but they know that huge local tax bills will anger the public and hit them in the polls.

The snag is that most of what councils do is dictated by the central government - which has been setting them ever-more jobs to do, ever-more targets to meet, ever-more inspections to do. Council tax raises only a quarter of what they spend, so unless Westminster agrees to fork out more (which it won't), then each new burden means huge rises for council-tax payers.

It's time to take tax powers away from central government and let local people decide what they want to spend, locally.

But how? Council tax is done for. It's assessed on property, but people in big houses aren't necessarily wealthy - many are pensioners who don't want to leave the home they've always had. Try marching a few of them off to jail and see what happens to public opinion.

Time then for a local income tax? Or bid farewell to VAT (whatever our EU colleagues say) and have a local sales tax? Or just give citizens back their money and let them spend it on what they - and not the bureaucrats and politicians - really want?

A new Heritage Foundation survey has found that four times as many Members of Congress use private schools as the American public. In the survey, 42 percent responded that they use or have used private schools. Only about 10 percent of US students are in private schools. Similar surveys in 2000 and 2001 turned up the same results.

Despite the popularity of private schools among Members of Congress, many of the same policymakers who exercise choice in their own children's education have voted to block legislation that would have given poor families the same range of options. In fact, had every Member of Congress voted in a way that was consistent with their private practice, every piece of voucher legislation voted on in the past three years would have passed. Perhaps the survey should have asked these leaders another question: can you spell h-y-p-o-c-r-i-s-y?

Nevertheless, redemption is at hand. Members of Congress will soon have the opportunity to approve legislation that will grant low-income families in the nation's capital the chance to choose where their children attend school. If every Member of Congress who uses private schools votes to give disadvantaged D.C. families the same access, the legislation will pass. Will Congress make the grade in compassion? Consistency? Would MPs do any better? For more information on the study click here.

Many voters in the EU take it as an article of faith that their governments should be striving to reduce the level of poverty in the developing in world. However, some of the policies of their leaders might actually be acting as a death sentence on millions of small subsistence farmers throughout the world according to the Centre for New Europe.

The argument is simple - as a result of huge European Union agricultural subsidies, many poor farmers around the world are unable to compete fairly with the smothering combination of EU dumping activity and high tariff barriers to the European market. The CNE's take on the issue brings home the human cost of the EU's agricultural prolificacy: one person, they claim, dies every 13 seconds somewhere in the world because of the EU's refusal to rescind its subsidies. Bearing in mind the fact that farmers constitute a huge proportion of developing country populations, the ramifications are disturbing.

The US is also guilty. Bush's Farm Bill, with its hand-outs to American farmers, is massively damaging to poor farmers in the developing world. But it is also damaging to America's economy. It forces Americans to buy more less efficiently produced and more expensive American produce, skewing the economy away from its potential. This means lower economic growth and lower standards of living. Supporters of the Farm Bill say that it is good for America as a whole. In reality, it is only good for special interest groups.

A common economic misunderstanding is the belief that a country should export as much as possible, while importing as little as possible.

This neo-mercantilist view may sound plausible but it is flawed. Firstly, it assumes that trade is a zero-sum game – that one person benefits, and the other loses. But when two parties trade, both expect to benefit. When a car mechanic works for Joe Public, the mechanic values the money he receives as being more useful to him than his time. Joe Public places a higher value to having a functioning car than the money it costs to fix it. Both parties benefit.

Secondly, the opposition to imports assumes that there is a fixed quantity of wealth in the world. Trade, it is assumed, is about winning a bigger slice of the economic pie. The reality is that trade is really about increasing the size of the pie - and imports are just as important as exports.

Finally, it is based on economic illiteracy surrounding the term "trade deficit". As the Concise Encyclopaedia of Economics points out:

Few subjects in economics have caused so much confusion - and so much groundless fear - in the past four hundred years as the thought that a country might have a deficit in its balance of payments. This fear is groundless for two reasons: (1) there never is a deficit, and (2) it wouldn't necessarily hurt if there were.

Stephen Pollard, author of the ASI education report Customers not bureaucrats, now has a much easier to use blog. It's at the same address, but has been graphically and technologically overhauled. He has a good post on competition in education, and puts forward the view that vouchers improve education. Even Sweden, he points out, has adopted them.

The Office of Fair Trading is currently investigating into whether the fees charged by Britain's private schools are rigged. Some believe that private schools are guilty of acting as a cartel, conspiring against parents to raise prices above the market level.

For the moment, let's say this belief is correct. Who are the victims? The parents. So if there is compensation to be had, they are the people who should get it.

However, if the schools are fined, it seems that the money would instead go to the government. Such action would be the worst possible outcome for parents. Having paid higher fees, they would not even benefit from their children's schools buying better facilities. The money would be instead be wasted on unreformed public services. In other words, a fine would simply be a tax on private education.

Moreover, the evidence that private schools are conspiring against parents is weak. Private schools are charities, not profit-distributing companies. They provide education that on average costs less than in the state sector. The best private schools could afford to significantly increase their fees and still fill all their places. They do not do so because they want to keep their academic standards high.

Among London private schools, where the prices are high compared with the rest of the country, there is a diversity in the school fees charged: £3,410 at Dulwich College, £4,770 at Wesminster, and £2996 at Trinity School per term. This diversity does not seem to suggest a great deal of actual price fixing.

If the state is really concerned about there not being enough competitive forces in education, it should free state schools from government control, giving parents education cheques to spend where they choose. It should let new schools open more easily, let failing schools fold, and enable everyone benefit from the invisible hand of the market.

So we should clamp down on white collar crime? It turns out that the top social groups are more prone to embezzlement and fraud. The bottom ones seem to prefer mugging and burglary. Shouldn't we be equally ruthless against both groups? No we shouldn't.

These types of crime have a different impact on their victims. Burglary, mugging, rape and murder all have a devastating effect on individuals. They traumatise and leave lasting injuries or destroy lives.

Shoplifting and embezzlement often have more anonymous victims. The crimes are spread out so that many people pay their costs. The burden on each individual is usually small. To have one's valuables stolen, one's home wrecked, or to be crippled by a street thug is not the same as paying half a penny extra for a light bulb.

We do not walk the streets at night in fear of being embezzled. People want the priority to be on the crimes which have shocking impact on their victims. The police prefer to pursue middle class motorists and white collar criminals. Let shops deal with shoplifting, companies handle embezzlement and fraud, and the police deal with the stuff that destroys lives.

The drums beat louder in the ritual war dance of pay bargaining between Royal Mail and the Communication Workers Union. The last official strike was seven years ago at a time when e-mail was embryonic. Today we all have e-mail and can send documents of 100 pages in a a minute or two at no cost.

The main effect of a strike will not be to stop communications but to halt the flow of second-class mail ("junk mail" to many). The direct mailers could suffer, but ordinary citizens may heave a sigh of relief. Overall, a postal strike will make us realise that letters are less important than ever.

Financially a strike will be bad for both Royal Mail and CWU. It will cost Royal Mail £23m per day in lost revenue, and sharpen its determination to slim down the number of postal workers and so cut down its wage bill.

If Postcomm (the regulator) suspends all restrictions on carrying mail during the strike, it will not stimulate much competition. Instead Postcomm should inform Royal Mail and the CWU that if the strike lasts for more than one week, Postcomm will lift all restrictions on carrying mail completely and permanently. At that point serious competition should enter the market.

If President Bush really wants to help Africa, he should look at what market-oriented policies are doing in Tanzania.

Once a sad backwater, now it's privatizing everything. About 300 underperforming state enterprises have been sold and the results have been dramatic. Reformist president Benjamin Mkapa recently cut the ribbon on a new highway being built solely with tax revenues paid by privatised companies - former loss-makers all. Not many African states build new highways without foreign loans or grants.

Along Dar-es-Salaam's exotic seafront, workmen swarm over the eyesore Kilimanjaro Hotel, newly privatised. Sixties concrete, and government-run until this year, it summed up everything wrong with the Tanzanian economy. Not any more. Next June it reopens as the country's first five-star.

The national airline, the brewery, telecoms, the container terminal, the water company and other big concerns are already in private hands. Electricity should follow soon.

With Mkapa required to step down next year, some people fear that Tanzania may not continue its reforms. That would be a pity, since Tanzania is so close to complete success. And it shows Bush exactly how to spread peace and prosperity - trust the market, not state control.

Sweden is currently the centre of world attention for two reasons. First, the murder of Foreign Minister Anna Lindh. Whilst tragic, there is nothing to indicate other than that she was a random target by a bag snatcher or drug junkie and fought back. But although this means that Sweden heads the sad list of cabinet ministers murdered in democracies in the last 20 or so years (Britain 1, Israel 1, Sweden 2), the political effects are likely to prove minimal.

Second, Sunday's referendum on euro membership. A yes upset cannot be excluded. But if, as expected, Swedes vote no, it puts paid to the idea that the euro is somehow inevitable (you know, like the victory of Socialism or Nazism). It makes permanent a bloc of three successful large economies inside the EU, outside EMU. they may be joined by some of the candidate countries. After all, who would, on mature reflection, want to tie their economy to a sclerotic low-growth area like Euroland?

Britain's Conservatives are getting themselves together at last. Their champagne bash in London last week sparkled with lots of celebs (er... and me) - just like New Labour before its election landslide in 1997, though with fewer non-white and non-middle-aged faces. (Still a bit of work to do there, then).

But now their Policy Unit have produced a super book, Total Politics, showing why politicians run too much of our lives, and how to stop them. Authors Greg Clark and James Mather say there's too much central control over public services: too many Whitehall targets, too much centralized funding and decision-making.

The solutions? Well, their words are different, but basically it's vouchers. A 'passport' so people can go anywhere for their health care. 'Scholarships' to let parents shop around between schools. Cutting national taxation and leaving the funding of police, transport, etc to local people.

Hooray! At last, someone's realized that, even if services are paid for through taxation, the state doesn't have to run them (ie mess them up). Leave the choices to the local community - or better still, to individuals themselves. Britain's next privatization revolution?

Kofi Annan said this week that:

"There are too many barriers that stunt, stifle and starve... These barriers and subsidies in developed countries must be phased out, as fast as possible, for the sake of humanity."

Mr Annan is correct to oppose to protectionism by the developed world. Yet many people believe that only rich countries should open up. Poor countries, they think, would be better off keeping their trade barriers. This view is mistaken. When poor countries open up to imports, they grow faster.

For example, in the 1970s and 1980s, the average growth rate of an open developing country was 4.5%, compared with 0.7% for a closed developing country. And, as Johan Norberg points out, 24 of the developing countries grew 5% a year in the 1990s. It's the ones that haven't read the Wealth of Nations that stay poor.

Governments have tried many schemes to raise the living standards of the poor. Milton Friedman said they are like throwing dollars at a barn door in the hope that a few will go through the knot-holes. Indeed, if the welfare budget were simply divided up between the poor, they would all be rich.

The best welfare scheme ever devised is called a paying job. No government scheme has ever approached it. It brings not only income, but self-respect and a life outside. A single parent who stays home on welfare is a poor role model. Children might grow into 'inherited dependency.' A self-supporting parent who makes sacrifices for children is more likely to raise good citizens and achievers. A parent might prefer to stay at home, but cannot really expect others to pay for that preference. Taypayers might willingly pay to provide affordable child care, however.

Instead of raising taxes to pay for more welfare, government should be lowering them to create more jobs. A dramatic cut in the top rate would paradoxically help the poor more than the rich. The flood of new jobs it would create would do more for them than any welfare programme yet has.

The Cato Institute has launched an online debate on globalization to coincide with the World Trade Organization meeting this week in Cancun. Arguing in favour of globalization is Johan Norberg, the Swedish author of In Defence of Global Capitalism. Against is Robert Kuttner, co-founder and co-editor of The American Prospect.

Many people enjoy reading Naomi Klein's No Logo. Others may regret buying it, believing that the content is not as good as they had hoped. The Economist says that her book provides "a wholly misleading account" of how brands work.

Ironically, Ms Klein has a strong, internationally recognised brand. The UK edition of No Logo is published by an imprint of HarperCollins, a multinational company. No Logo is a market leader. However, anti-globalization campaigners often argue that product quality is not why people buy products, but marketing and brand image. Since the Economist disagrees with Ms Klein's analysis, perhaps there needs to be a remedy to discourage people from buying her books. How about a tax on them?

The problem with this sort of authoritarian meddling with the marketplace is that it is oppressive. Why should people who like Ms Klein's books be made to pay an extra tax? The reality is that different people have different preferences and needs. People make subjective choices about what to buy. They weigh up the options: whether to keep the money, whether to spend it on No Logo, or whether to spend it on something else. The virtue of the free market is that it leaves people to make their own choices, rather than imposing the will of politicians who "know best".