I was present in May 1978 when F A Hayek (pictured) delivered the Hobhouse Lecture to the London School of Economics. The room was packed with staff and students as Hayek delivered a paper entitled The Three Sources of Human Values, which was published as an epilogue to vol III of his Law, Legislation and Liberty.

Hayek explained that from the first source came ideas which were genetically determined and innate. The second source was the product of rational thought, the ideas we think up. These two were relatively minor. The third, and by far the most important, came by cultural transmission, the ideas passed on by society.

Part of his thesis was that human beings had developed their inherited moral instincts as hunters. As they later developed an extended society, interacting and trading, they had to learn culturally to subjugate the inherited instincts to the wiser and more rewarding morality of what he called The Great Society.

Hayek told his rapt audience that the old values of the hunting band still had their allure, including the urge to share everything when value could not be stored. Even with all that modern society makes possible, we still feel the inherited urge that we have learned to subjugate to the transmitted rules which make more worthwhile goals possible. The groups which learned to do that were the ones which survived and prospered.

Members of the audience actually gasped when Hayek referred to Socialism as 'atavistic' - the reversion to an older, more primitive form. Many of the students had thought that Socialism was modern and scientific, and could perhaps bring rational order to a chaotic and unjust world. Now here was Hayek equating it with a primitive instinct, inferior to the learned rules which had enabled human society to develop.

It was, perhaps, a defining moment. Socialism in Britain was at its high water mark, although it had visibly failed to meet worthwhile objectives. Already its confidence was ebbing, together with the faith that it delineated the path to a better future. Now here was an intellectual attack on its very claim to modernity and rationality. Less than a year after Hayek's lecture came the counter-revolution.

For some years observers have commented on the results of China's 'One Child' policy. ABC's Jane Hutcheon called them "the over pampered and over-fed offspring of China's elite." Jesse Zink, writing on the Acadia University page says that

the one-child policy has led to the rise of the so-called "little emperors" - only children who are spoiled, since their parents and grandparents have fewer people on whom to spread their largesse. Studies have shown that these children are less interested in tradition than their elders and feel compelled to quickly carve out a niche for themselves in society.

China's leaders introduced the 'One Child' policy for population control, never imagining children who would grow up as the sole centre of attention of doting parents and grandparents, and accustomed to instant gratification.

These solitary children carry the family's hopes and ambitions, too. Clay Chandler, in Fortune and The Business, reports that they are put through a daunting schedule of study, and are pressured to succeed.

Nanjing University's Professor Feng Xiaotian is quoted in the Straits Times questioning how different these children are from those of multi-child families. But most observers think they are already beginning to have an impact on the Chinese Society and economy.

The first wave of them are now in their 20s, and have decidedly uncommunist characteristics. They are very concerned about personal appearance, and spend freely on grooming products and designer wear. They assert individualism rather than collective values, and present themselves to the world through brand and lifestyle choices. They eagerly embrace new gadgetry, and seek to do things which mark them out as modern and different from their predecessors. They might be the ultimate me-generation.

In many ways their values and attitudes correspond with the high growth consumer society which China is fast becoming. They may lack the stoicism, restraint, and self-effacement which enabled their predecessors to survive the Great Leap Forward and the Cultural Revolution, but they are a generation more likely to make a success of China’s embrace of capitalism.

It is one of history's unintended consequences that Communist China's 'One Child' policy, designed to produce a more easily managed society, is fast producing a generation more suited to the spontaneous dynamism of a free-wheeling capitalist culture.

A welcome addition to the blogosphere is the new Civitas Blog. Civitas, a London-based think tank, examines topics related to 'civil society' like crime and welfare. If its early posts are anything to go by - such as Prison is a bargain - it will no doubt prove challenging.

Old Moonbat's at it again, ranting on about how the super-rich avoid taxes and that we should publish everyone's tax return just to shame them. Apart from the fact that this would provide a marvellous shopping list for potential kidnappers and extortionists, that idea is a solution to a non-problem.

Moonbat says the Inland Revenue wouldn't tell him what proportion of tax the super-rich pay. But I can tell him.

After Chancellor Geoffrey Howe cut the top rate of tax from 83% to 60% back in 1979, the Treasury actually got more money from the richest people, not less. When Nigel Lawson cut it from 60% to 40% a few years later, the Treasury raked in even more. The top 10%, who paid about a third of all income tax in 1979, now started to pay nearly half the total. As our Around the World in 80 Ideas site shows, the same sort of thing happened when Reagan cut taxes in the US.

Why is this surprising? When taxes are too high, people avoid them - by hiring smart accountants, moving their money (or themselves) abroad, or just quitting paid work. That's human nature. The solution to tax-avoidance is not to strengthen the tyranny of the majority yet further with all sorts of humiliations and punishments. It's to cut taxes to the point where they are not worth evading.

Update: Tim Worstall weighs in on Monbiot's article

It used to be quite simple. Government needed things done. Private companies would bid for contracts to do it. The competition was fair and open. The best and cheapest would win.

But now, Britain's burgeoning public sector has spawned scores of quangos. And these bodies have started tendering - to the same government departments that sponsor them and give them their core funding - against private companies for these same contracts.

It's a moot point whether a competition can ever be 'open' when one side is actually part of the organization that is making the choice. But it certainly cannot be 'fair' when one side gets core funding from the state. For then it does not need to put its overhead costs into a bid. And knows the government will underwrite any losses it makes. So there's no surprise that private suppliers are finding they can't win today's tender contests.

For the sponsoring department, this is great, because you can tell the Treasury you are saving money on contractors - even though you are doling out millions to the quangos behind the scenes. And since, in desperation, the private companies are rushing to form consortia with the quangos that win all the work, you can proudly boast how you have advanced the 'public-private partnership' agenda too.

But: fair and open? Best and cheapest? I don't think so.

We have uploaded what I think will quickly become a well-used blogosphere resource. It is an online edition of the The Book of the Fallacy, made available to read and link to at www.adamsmith.org/logicalfallacies. Like Samizdata's Blogging Glossary, it is designed so that each definition can be linked to directly. It is also quite funny. Go and check it out.

Stephen Pollard, writing in today's Times of London, discusses Christian Aid's campaign against free trade. He writes:

There are two possible explanations for Christian Aid's misguided campaign. One is that those behind it are so stupid that they simply do not know that free trade involves abolishing subsidies, pulling down trade barriers.

The other is that they know that full well, but have an anti-globalisation, anti-prosperity agenda that they are attempting to disguise with an apparent but misleading concern for the developing world.

A recent paper by the Centre for the New Europe calculated that one person dies every 13 seconds somewhere in the world - mainly in Africa - because of the EU's protectionism. The Christian Aid campaign's stated aim would make that figure even worse.

A new book called Bubbles and How to Survive Them is making waves. Written by John Calverley, Chief Economist at American Express Bank, it has a launch next week at the IEA.

Its challenging and innovative thesis is that the dot.com bubble and the housing market bubble (if it is one) are not one-off affairs, but part of what is now a bubble economy. People move their funds from one bubble to the next, with the smart investors trying to get into a bubble early and leave before it bursts. Calverley suggests that:

By cutting interest rates so dramatically, there is a danger that central banks have shifted the bubble from stocks to residential property.

The property boom, whose surge has swept through Ireland, Spain, the Netherlands and Australia, as well as the UK, is by no means the only asset bubble. Calverley looks from the stock market fall of 2000-2001 to price spikes in bonds, gold, copper, oil and art works.

We used to have a business cycle, he tells us, but central bankers have become quite good at smoothing it, holding both inflation and unemployment in check. But volatility has not been eliminated, he suggests, just transferred to asset prices. Worried by a possible collapse of any particular asset price, the bankers increase money supply in support, or to create a new bubble elsewhere.

Are we, then, in a period of managed volatility? The bubble economy might be less damaging, although scarier, than the troughs of boom and bust. Or we might be on a divergent harmonic whose swings will become too large to control. This new territory is not for those who prefer a quiet life.

In basic economics textbooks, students will normally be presented with a model economy where there is perfect information. This is where all consumers know everything about all the products available. Yet in the real world, perfect information does not exist. Some argue that the government therefore needs to step in to provide that information.

However, markets are rather good at helping consumers making choices, even though perfect competition is impossibile. When I buy a DVD, I lack perfect information about the movie market. The only way I could get perfect information is to watch every movie ever created. Fortunately, markets are good at filtering information for us. Amazon helpfully suggests DVDs that I might be interested in based on previous purchases. I can look on Orkut, a website that helps you network with friends, and find out what people I like regard as good films. Reviews in newspapers and word of mouth also help. Advertising also helps me make choices, and not necessarily to choose the film. I saw the trailer to the new Ladykillers movie and decided I should give it a miss.

Perfect information is just too time-consuming to get. Fortunately, we make good choices every day without it.

Andrew Bartlett writes:

Please explain the logic by which you argue privatization would improve the health service in Britain... Surely you can't be arguing for that competition will improve the services in areas where there can be no choice, merely the replacement of a single NHS hospital by a profit making hospital? Explain please.

I understand entirely why you might not like the idea a for-profit company acting as a local monopoly. But having a health service where the provision is not done directly by government does not necessarily mean that you have to make hospitals for-profit institutions. It may not be obvious but, for example, BUPA is actually a charity - the British United Provident Association.

Certainly in a number of very important areas, distance to the hospital is important. But for many treatments, the distance is less so. If a local hospital is failing to do the operations quickly, or to a sufficient standard, or has a large number of cases of MRSA infections, the ability of patients to choose to go elsewhere will act as an invisible hand to get the local hospital to pull its socks up. For money to follow the patient is essential.

I'm just back from a debate on the lunchtime Channel Four News about Christian Aid's campaign against free trade. They have been running adverts in the national press attacking free trade, saying that it causes poverty.

Unfortunately, their campaign is very confused. They attack the EU's protectionist farming policies - which lead to subsidised goods being dumped onto world markets - and call this 'free trade'. But far from being free trade, the EU's protectionism is an example of unfree trade.

Christian Aid does not think poor countries should liberalise. Yet it is precisely the countries which have liberalised that have got rich. India spent the first thirty years after independence engaging in protectionism. It stayed poor. It is only since India embarked on liberalisation that it has experienced high levels of economic growth. This has lifted millions of people out of poverty. Hong Kong in the second half of the 20th century adopted free trade and became a model example of how a country with low skills and very limited natural resources can become wealthy.

The problem is not that we have too much free trade: we have too little.

A new blog, The Road to Euro-Serfdom (a play on title of F. A. Hayek's most famous book), does not seem too impressed by Jaques Chirac's call for a global tax to relieve world poverty. Of course, such a tax is very unlikely to happen, so Chirac's call is a costless way of looking like he is doing something about poverty. But much better would be if Chirac became a campaigner against EU protectionism. If the EU stopped trying to be 'fair' to EU farmers and opened itself up to free trade, it would save the life of one needlessly poor person every thirteen seconds (source: Centre for the New Europe). Now isn't that something really worth doing?

Just as you thought it was safe to go back to Britain's Liberal Democrats, they go and blow it.

Looking at their Party conference this week, the bearded sandalistas seemed to have been seen off, and the smart suits seemed to be in control. Their policy paper Setting Business Free (PDF), for example extols the virtues of free markets and limited regulation - great stuff, most of it. But then they go and say we need to raise the top rate of tax from 40% to 50%, so as to generate extra revenue for pensions or somesuch.

Well, I've got news for them. The top rate of tax is already over 50% - because 13.8% National Insurance (which is really just a tax for social benefits) is charged on top, and on every extra penny you earn. Your employer pays 12.8% and you only pay 1%, but don't be fooled - it's a tax.

In ASI reports like It Pays to Cut Taxes and A Healthy Economy, we've demonstrated beyond doubt - with practical examples - that when taxes rise over 40%, less revenue is generated, because people decide to work less, to emigrate, to move their money to tax shelters, or even to cheat. The question for the LibDems ought to be, not how they're going to spend the extra money generated by a 50% rate - but how they are going to plug the revenue gap?

In the Economic Agenda of Monday's Times (not online), Gary Duncan reports that hundreds of bus drivers from Poland are being recruited to join the migrant workers, many from the new EU members in Central and Eastern Europe, on which the UK economy increasingly relies. These new migrants do not come to exploit our welfare system. On the contrary, they seem mostly young, hard-working and cheerfully optimistic about improving their chances in life. They improve our economy and our society. Duncan says:

An ill-informed few may voice suspicions over "stolen" jobs and harbour unjustified prejudice, but the truth is that we should cheer each time we hand our bus fare to a Czech driver, pay an Estonian barman for a drink or receive treatment from a Polish doctor.

Not only are these workers adding to the cultural richness of our country, the energy of our economy, and helping to deliver the services we need. They are reinforcing the performance of the jobs market, stemming wage pressure and thus ensuring that interest rates – and our mortgage costs – can remain close to their present levels.

The migrants are helping to keep wage inflation to fairly benign levels despite an unemployment rate nearly the lowest in three decades, and one which is the envy of our EU partners with less flexible labour markets. It seems as though the UK economy is in a mode where it can raise efficiency by outsourcing some jobs and giving others to migrants and, helped by this, achieve the growth and efficiency to create yet more jobs. Obviously, some people are trying to stop this...

If you go out in the woods today
You're sure of a big surprise.
If you go out in the woods today
You'd better go in disguise.

No longer is this a nursery rhyme but police advice to Alun Michael MP, the Minister of State for Rural Affairs, before his planned trip to the countryside at the weekend. We now have the absurd situation where the Minister whose brief is the countryside will not be visiting the countryside in the foreseeable future. He's being hounded.

Rose-tinted glasses are often used when looking at the communities in the past. Take the boy growing up in a mining community whose only apparent job choice is to become a miner. He is declared by some social scientists as experiencing much 'happiness'. I am not sure I would have liked to have been in his position. Communities of the past were often oppressive, restricting people from reaching their potential or dreams. The anti-globalizers seem to want to put us back in those communities, buying only from local producers, but I do not regard this outcome as favourable.

Whereas communities were once something we were born into, their existence are now based on usefulness. There is a thriving Turkish community in Croydon (in south London), where new immigrants are helped to find jobs and language schools. Minority groups often have very strong communities, within our society, because they find them valuable.

We travel further, working away from our homes, and interacting with people we work with rather than those who live near us. We have communities based on interests. Why should community be just about geography?

Yet sometimes geographic community is still very strong. I went to see a foxhunt a couple of years ago, and found that the local population came together, starting mid-morning with a glass of sherry or punch, followed by watching the hunt, following by a buffet lunch. It was a great social occasion for everyone local, rich and poor, and a valued geographic community event. It is not the market that is banning it.

Indeed, it could be argued that the state has been working throughout the last century to undermine geographic communities - by nationalizing responsibility and creating the often ineffective and poverty-sustaining monster called the Welfare State.

The foxhunting type of local community works because it is something people value. On the other hand, 'connecting' or 'engaging' with local authority politics is not my idea of fun. There are ways of bringing local communities together that work better than others. The mistake is to use force to make people more locally-oriented, as the opponents of the market want to do, or to get more subsidies for worthless local activity. The market system leads to a progression of communities based on the principle of 'what people value'. If local communities do not value 'thinking locally', how successful are attempts to force them going to be?

A Czech farmer's goat's cheese does not meet the rules imposed by the EU since his country joined it in May. The Telegraph today reports that it would cost him about £64,000 to build "a changing room, bathroom and lavatory, a cheese production room, a cellar in which to store the cheese as it ripens, and a packing room."

Since the farmer, Mr Haiek, makes about 3 or 4 kilos of cheese a day in his kitchen, leaving it to ripen in his cellar, his weekly earnings of about £97 hardly justify the investment. So he advertises that his cheese has failed to meet EU norms and sells it as animal fodder. Meanwhile,

Armies of health inspectors have taken to standing outside the farm, interviewing customers about what they plan to do with the cheese. One customer, a pensioner living in a one-bedroom flat whose only pet was a goldfish, denied eating it himself, saying it was for a neighbour's dog.

Presumably like other EU bureaucrats they have nothing better to do. Now the officials are trying to claim that because it is mixed with herbs and spices, the cheese is unfit for animal consumption either.

Those who can think of better things to do for the people who implement the EU's Common Agricultural Policy, and better ways of spending its money, are invited to make suggestions.

In 1997 Britain's pensions were in good shape. Unlike other EU nations whose pensions depended on extravagant promises drawn upon future taxpayers, British pensions were mostly funded. Our pension funds, invested and growing for their future recipients, were larger than those of all other EU nations added together. A diminishing proportion of those nearing retirement depended on the basic state pension; most others had an occupational or personal pension, or savings which included the popular personal equity plans (PEPs) and Tex exempt special savings accounts (TESSAs).

All of this has changed in seven years. In his first budget Gordon Brown taxed pension funds an extra £5bn a year. He sought admiration for the first of his 'stealth' taxes, but it meant that he took money from pensioners to spend on his priorities instead of allowing those who had saved it to spend it on their own. It was the first of many ways in which he made saving less attractive. He abolished the popular PEPs and TESSAs and introduced the over-regulated, unattractive, and unsuccessful Individual Savings Accounts (ISAs) in their place.

He made means-testing the basis of state retirement payments, so that those who had secured assets and income for their retirement were penalized, while spendthrifts were rewarded. The three-year trough in equity prices was made worse in Britain by a series of measures which hit business profits and therefore stock prices. Additional regulations and taxes combined to depress UK shares, and with them the value of pension funds.

There is now a shortfall between pension assets and liabilities. In the private sector this might be redressed by years of growth, careful asset management, and an easing of depredation by government. In the public sector, still characterized by unfunded promises unrelated to savings, the gap is immense. If properly accounted, it would raise the ratio of government debt from 33% of GDP to 85%.

Instead of funds for their retirement, people have paid for extra bureaucrats and government spending increases which have been largely dissipated in increased public sector inflation - not a good trade. Now we probably have to abolish means testing, and raise the basic state pension and the retirement age. Ultimately saving has to be made more attractive by protecting it from government. But after seven years of government folly, a skeptical public may take some convincing.

Thanks to the market economy, we are used to companies that appreciate our business. If a company doesn't seem to care about us as consumers, we can go elsewhere. Consumerism empowers us. Yet in the state sector, we are expected to be grateful for what we're given. We rely on the 'benevolence' of the National Health Service, and should be grateful for the treatment we get, accepting waiting lists and dirty hospitals. If a supermarket that was being inefficient told us to be grateful for what they give us, we'd be outraged. In the NHS, however, we're supposed to think that attitude is OK. It is not.

Yesterday I was at an IEA talk where former Daily Telegraph editor Charles Moore spoke on foxhunting. He made a rather point that the vast majority of those voting to ban foxhunting had refused to see foxhunting in action.

The MPs presumably did not want to be seen condoning the sport. But it is worrying that politicians are willing to ban things of which they have no experience. This is one reason why I am wary of attempts to get rid of MP's interests outside of Parliament. There are indeed risks from having MPs who vote according to their own financial interests, but the expertise from outside interests is something we would be foolish to lose. Maybe we need to ban MPs from voting on things they don't know about?

Wednesday's House of Commons debate on foxhunting will not be forgotten any time soon. The 10,000-strong protest outside, which led to violence between some protesters and the police, and the invasion inside the Commons itself are not everyday occurances. Anatole Kaletsky, writing in Thursday's Times of London argues that Labour will regret reigniting a class divide, and many people do indeed take the view that the anti-foxhunting vote was about hatred towards countryside toffs in their tweeds.

But there was a more important issue at stake on Wednesday. It was the question of whether democracy or liberty has the higher legitimacy. The Commons took the view that democracy is a higher principle - that it is legitimate for foxhunting to be banned because a majority of MPs say so. But those of us who believe that the democratic system should acknowledge the principle of liberty do not think that politicians should be taking decisions about foxhunting's future.

We do not have a codified constitution in the UK, but documents like the Magna Carta have recognised that we have rights which the state has no authority to remove. Yet the vote in the Commons showed contempt for the principle of liberty. They allowed themselves to engage in what John Stuart Mill described as 'the tyranny of the majority'.

Labour MP Barry Sheerman said during the debate, "I don't like communities that have a way of life and different values to me losing those rights and those values." The government talks about supporting communities, but time and time again the Commons seems to do the opposite.

In 1990 Brian Micklethwait wrote a Libertarian Alliance pamphlet called The Tyranny of the Facts. It is an odd piece because it is what I would have expected from a socialist outfit.

It is the 'tyranny of the facts' that makes the vast majority of people oppose communism. They see that in communist countries the ordinary people lived in poverty, they see that it murdered 100m people, they see that communism destroyed the environment, and they conclude that the facts are not on the communist side. They might consider communism to be good in principle, but recognise that the facts are not on its side. People support our side of the argument have not normally deduced it from logic. Micklethwait underestimates the importance of empirical evidence.

The facts about the NHS are what is making a health service based on the triple nationalization of funding, planning and provision an untenable system. Our government's second-term policy of simply spending more money on the NHS is an important experiment, and the facts that are coming out are firmly on our side. They are a 'tyranny', I suppose, if you are socialist.

Far from being a tyranny, the facts are really a blessing. They help us to select between competing theories about how government should be structured and what it should do. And they firmly show that choice, competition and markets promote the general good, and that government involvement and controls usually do not.

We're gradually scanning in our back catalogue of publications and putting them on the web. Newly online today are the 1990 publication Does socialism mean never having to say you're sorry? by Prof. Kenneth Minogue, The Green Quadratic from 1988, and Seize the initiative from 1996.

A new report from the World Bank, Doing Business in 2005, shows that poor countries impose on average three times the administrative costs and twice the number of bureaucratic procedures as rich countries. The current issue of The Economist picks out some of the striking contrasts.

For example, registering property requires one step in Norway, but 16 in Algeria. Incorporating a business takes two days in Canada, but 153 in Mozambique. Sacking a worker in Guatemala costs a firm three years’ worth of wages, compared with almost nothing in New Zealand…

In Haiti, for example, it takes 203 days to register a company, which is 201 days longer than in Australia. In Sierra Leone it costs 1,268% of average income, compared with nothing in Denmark. To register in Ethiopia, a would-be entrepreneur must deposit the equivalent of 18 years’ average income in a bank account, which is then frozen.

In Lagos, Nigeria’s commercial capital, recording a property sale involves 21 procedures and takes 274 days. Official fees amount to 27% of the value of the transaction. In Norway the task takes less than a day and costs only 2.5% of the price of the property.

Relief from poverty does not come from a few crumbs tossed from rich tables; it arises from domestic economic growth. It is difficult to force people to be entrepreneurial, but they can be encouraged to be so if it is both easy and rewarding. The burdens and the fees should be lower, not higher, in the poorer countries because they need the growth more.

It would be helpful if a model schedule could be drawn up setting out 'best practice' to be followed in encouraging small firms to become established and business deals to be transacted. Countries which signed up to that schedule would gain the benefits in both investment and growth, and their citizens would climb out of poverty.

I've just been on BBC TV arguing against some stooge from the dreary IPPR on whether the government ought to do more to improve our health. It was brought on by a poll commissioned by our state broadcaster which claimed that 70% of us want the government to wean us off cigarettes and alcohol, 65% want smoking banned in bars and pubs, etc etc.

Have politicians done such a remorseless job of nannying us all that now we're lost without nanny? Luckily, not: since 64% think that what we smoke is, frankly, up to us. Same with booze. And fat. So while we are concerned about Britain's health and want something done about it, deep down we don't actually trust politicians to do anything, and certainly don't want them lecturing us on how to live our lives.

And actually, government is the problem. As Radley Balko of the Cato Institute told the Beeb, "If the government is paying for my anti-cholesterol medication, what incentive is there for me to put down the cheeseburger?" Well, quite.

Brussels think-tank the Centre for the new Europe predicts that, whatever politicians say, Britain's crumbling National Health Service will end up as a mere regulator of private health services, not a provider of public ones.

Bravo. And to extend the process, the Centre has a nine-point plan:

1. Let private hospitals do NHS work as well as private.
2. Let NHS hospitals launch health plans in partnership with insuers.
3. Give people an incentive to insure their health.
4. Promote occupational health and rehab to keep folk fit and in work.
5. Help the development of long-term care insurance and savings plans
6. Incentivize unions, churches and other groups to insure their members.
7. Let doctors and hospitals advertise themselves.
8. Allow advertising and information on the value of prescription medicines.
9. Ensure that all healthcare suppliers publish performance figures.

Not bad suggestions: ones which would encourage everyone to insure their health - and indeed to live healthily - and which would extend the availability of competitive payment plans and the numbers of competing providers, and guarantee us good comparative data on performance. Just like any other market, really.

What could seem more sensible? Or more popular? Fix an interest-rate ceiling on commercial loans so that gullible people can be trapped into debts that they can never possibly repay. So the UK government set off on a long consultation exercise to justify this as a policy.

Unfortunately, they discovered that interest-rate ceilings in France, Germany, the US and Ireland have had the opposite effect. Their report, just published, admits that rate ceiling "limit low-income borrowers' access to credit, diverting them to less transparent and less appropriate products, or even to illegal loan sharks."

Well quite. There are a number of very reputable companies specializing in providing small loans to less-well-off households. Like Provident Financial, for example, which has been going for a century or more and has a loyal clientele among low-income groups. Their average loan might be just £100 or £200 towards a family wedding or other expense; and it's repaid by an agent (usually local and female) calling every week. Borrowers actually like the personal contact and the discipline of weekly repayments, but this system is costly to operate. If you recoup all that cost as interest, it gives you annual percentage rate figures that are very high. But then it's quite a different business from taking a £20k secured loan from a bank, which then doesn't have to do anything but wait. And of course, most banks wouldn't touch the Provi's kind of customers anyway.

For once it seems that the government might just back off and let the legitimate credit market handle something it's been handling well for years. But shouldn't they just know this stuff instinctively - or even by talking to the constituents who elect them?

The leading British newspaper columnist Simon Jenkins has written a piece in the Times which is one of the most important articles to appear in years. He claims that - in common with other ministers - Health Secretary John Reid has lost control of things. His high-profile visits to hospitals throughout the country is just 'spasm management', not the real thing.

Under pressure from both Labour and Tory reformists, Reid pushed through the 'Foundation Hospitals' plan, which was supposed to devolve management control to individual hospitals. But the centralizing tendency of government has re-asserted itself, and the whole idea has been emasculated by Treasury controls, a 'foundation hospitals regulator', and more central 'targets'. Indeed, says Jenkins, Reid imposed 60 new central targets at the same time as he was writing a writing a pamphlet on Localising the NHS. "He knows no shame," says the columnist.

The NHS, once the pride of Britain's public sector, is now rated one of the least popular health services in Europe... The NHS is politically unstable. It lurches from scandal to disaster... It has served its time and must be dispersed. Its hospitals must return to being charitable trusts and administration must be entrusted to democratic local government, as is the case across the rest of Europe.

If a heavyweight journalist like Simon Jenkins, in a heavyweight paper like The Times is now saying that the NHS must be 'dispersed', then I really think that the tide has at last turned.

The American bank robber, Willie Sutton, was asked why he persisted in robbing banks. "That's where the money is," he replied.

On Radio 4's You & Yours programme this Thursday, I'm going to suggest that Britain's museums suck up to politicians for the same reason - because that's where the money is. Indeed, members of the public can only be a nuisance to them, since the government has banned entry fees.

And so the museums come to reflect the values of their paymasters - elites who love big projects and big projects, preferably in London.

Where they've tried to spread the cash around, it's been disastrous: £11m of Lottery cash on a pop museum in Sheffield, another £9m on a visual arts centre in Cardiff - both forced to close within months.

We have too many marble palaces built on the sewer of public money - money that is forced out of us under pain of imprisonment. Isn't it a much more wholesome idea to make museums depend on access charges and voluntary donations? They they would have to engage with their real customers, and be businesslike about it.

Let's rid museum boards of the grandees who think that having to earn money from the public somehow taints their purity. As every business knows, the only way to survive and grow is to give your customers such a good experience that they come back for more. Don't we want our museums to be like that?

The ASI website was moved last week onto a more powerful server... or rather, a set of servers. Thanks to our web host Gradwell, it now runs on three web servers - known as a 'cluster' - each connected by a load balancer. All this means that if one server goes down, our website stays up with the other two servers serving our readers. The gigabytes of data downloaded from adamsmith.org each month keeps going up, and it's nice to know we have the infrastructure to cope.

I was on a train the other week, sitting near a dad and his two young children. He was helping them solve puzzles in an activity book, and explaining to them about electricity. I have little doubt that they will do well in life. Through good parents, we inherit talents and success. For example, children born into musical families tend to be the ones that do best at music, inheriting the musical talents of their parents. And children of small business owners learn about trade from an early age, getting a head start compared with other children.

Although some on the Left attack the idea of inheriting money, they rarely seem to mind the inheritance of talent. Yet the inheritance of talent may well be more important in deciding on a child's future than the inheritance of wealth. If inheriting talent is morally acceptable, surely inheriting wealth should be too.

The increased burden of taxation in Britain, which the Adam Smith Institute highlights annually when it calculates Tax Freedom Day, is summed up in an article in today’s Daily Telegraph.

A basic rate taxpayer on £25,000, which is close to the average wage, was paying 33% of their income in tax in 1997; now it is 38%. It is worse for higher rate taxpayers. Those on £40,000 a year now pay 50% in tax, up from the 35% it was 7 years ago.

This is very bad news for enterprise and economic growth. The UK was a fairly attractive place to establish or transact business in 1997, now it has lost much of its competitive advantage, tempting both talent and money to locate elsewhere. It is bad news for freedom, too. It means that the government is spending money earned by its citizens on its own priorities rather than theirs. Those government priorities include an inflated bureaucracy and public sector jobs of dubious value.

Every year The Sunday Times publishes the 100 Best Companies to Work For. What's interesting is that it's stuffed full of very successful national and multinational companies.

There's a view that companies need to treat their staff badly if they want to make a good profit. In reality, the most successful companies are the ones that look after their staff. Some people complained in the 1990s about 'sweatshop' labour by multinational companies, but it turned out they were wrong. Multinational companies get staff in poor countries by offering better conditions and better pay. As Johan Norberg showed on Channel Four last year, workers at Nike's 'sweatshops' are keen to get family members to join them because they have never before experienced such a good employer.

The worst employers have always been state industries. The true sweatshops were in communist countries where people's choices were dictated by the state. And Britain's post-war nationalizations were a disaster for labour relations. Today, Britain's private sector has vastly better labour relations than the public sector. That's why, for example, the average public sector employee takes about 50% more sick leave than someone in the private sector.

Treating staff well is good in and of itself - but successful firms know it's good for profits too.

I've just been on the radio telling the nation why supermarkets are a good thing. They're frequently knocked by the usual anti-capitalist mafia - on the ground that they pay slave wages, or screw down suppliers, or kill off small businesses, or are a blot on the urban landscape. All junk.

Supermarkets make us richer. They are hugely efficient, forcing down costs. Groceries - and now clothes and household goods - are now much cheaper than in the pre-supermarket age 40 years ago. That leaves us more money to spend on the things we value.

They enrich our choice too. The shelves groan with fruit and vegetables that were unknown forty years ago - or unknown in the winter, when they were out of season. Now we quaff New World wines, because they're better and cheaper than the French stuff - thanks to supermarkets.

Sure, they might be bad for inefficient grocers in their area. But they bring in huge footfall which actually helps other retailers. A new supermarket can actually revive a dead area of town.

They rank near the top in the Financial Times 'Best Workplaces' survey. They give their staff discounts on their shopping and on leisure activities, and offer share schemes and bonus systems. The Work Foundation praised them for the number of jobs they create and the flexibility of the working patterns they offer - one reason why they are huge employers of women with family commitments and the over-50s.

Consumers know all this. That is why we give supermarkets so much of our custom. And what's wrong with that?

One-time ASI scholar Adam Thierer (pictured) is among the contributors of a new blog, cheekily called The Technology Liberation Front.

Issues being discussed include the role of the state in protecting music copyright, digital rights management, increasing broadband usage, free speech and censorship, and solving spam.

The blog's writers include several prominent commentators on technology issues, so it should prove to be a useful resource.

Here's a link to the opening, introductory post.