The perennial Bush-bashing target has been the climate issue - with the enthusiastic participation of UK chief science adviser Sir David King ("Global Warming is a greater threat than terrorism"). Now the New York Times has arranged to interview a notorious global warmer, Dr James E. Hansen, director of the NASA Goddard Institute for Space Studies in Manhattan. He criticizes White House climate policy, claiming the "Bush administration has ignored growing evidence that sea levels could rise significantly unless prompt action is taken."

He apparently bases this assertion on his own publication [Proc Nat'l Acad Sci 2004] that to preserve global coastlines, global warming must not exceed one degree celsius. As sole support for this unusual claim, he cites there his recent article in the popular Scientific American vol 290, pp 68-77, 2004. But all evidence shows sea levels rising steadily - by about 400 feet in the past 18,000 years, since the peak of the most recent ice age. Significantly, the measured rate of rise did not accelerate during the substantial warming of the early 20th century.

In addition, as is well known, prompt policy action (by cutting emissions of greenhouse gases in accord with the Kyoto Protocol) would lower the calculated temperature rise for 2050 by at most a tiny one-twentieth of a degree C - too small to even measure.

Further, Bush did not "withdraw" from Kyoto - as his critics claim. While he has not submitted Kyoto for ratification, neither did Clinton - probably because the US Senate in 1997 had voted unanimously against such a treaty - including also Senator Kerry.

Many politicians believe they know how to run our lives better than we do. They think that they are better able to spend our money than we are. They think it is their duty to decide who may marry. They believe it is their duty to ban us from doing things we enjoy but which may be harmful to us. They feel justified in stopping us buying alcohol after 11pm or gambling. And they heavily tax anything they disapprove of.

On Samizdata.net I recently wrote: "Is it just me, or are taxes which attempt to change my preferences the most offensive? I really don't see why the state has any legitimacy in encouraging me to switch from gin to, say, orange juice. Should the tax system not try and be as neutral as possible, avoiding attempts to change my behaviour? Or are politicians really just better people than me, more competent in deciding my choices than I am? The government certainly appears to believe it is justified in subordinating my choices to its wisdom. Yet when I think about the nannies, two words come to mind: sod 'em."

So I'm pleased to see a new blog called Nanny Knows Best, which pokes fun at the nanny state. It describes itself as a "site dedicated to exposing, and resisting, the all pervasive nanny state that is corroding the way of life and the freedom of the people of Britain." Check it out.

The international ban on shooting black rhino has just been lifted. At its latest conference in Bangkok, the Convention on International Trade in Endangered Species (CITES), agreed to permit South Africa and Namibia to licence a limited amount of trophy hunting.

As we argued in Around The World in 80 Ideas, allowing well-heeled sharp shooters to track and kill a limited number of big game, such as rhino, should lead to a rejuvenation in the total population. How is this so?

In the past, the problem has been that no one has any property right to wildlife, such as black rhino. Consequently, they are often seen as little more than huge pests by local people. What is more, if they can make substantial amounts of money from poaching, for ivory or hides, then the wild population is likely to tumble. This is precisely what has happened with rhino in many parts of Africa.

The CITES decision to allow the annual killing of five black rhino in both Namibia and South Africa, should help with the conservation of the species. Licences will only be issued for older animals, well past breeding age.

Wealthy sportsmen are prepared to pay as much as £140,000 a time for the privilige of shooting a mature rhino. This money can be used to protect the wildlife population, and make it a sustainable resource. As the delegates from Southern Africa explained at the CITES conference, creating an economic incentive should both preserve and extend the rhino's habitat.

A similar policy might well help other endangered species, such as the tiger, whose numbers in the wild, according to recent press accounts are plumetting (see Sunday Telegraph, 'Western tourists to blame for slaughter of endangered tiger') .

Creating a market in wildlife, when managed skillfully, is one of the best way of preserving a host of endangered species. It will be instructive to monitor how this trial scheme fares.

Governments think they have to intervene everywhere to improve our lives and make us happier. But if legislation brings happiness, then we ought to have the happiest population on the planet, Brunel University Vice-Chancellor Professor Steven Schwartz told an Adam Smith Institute seminar last night.

Unfortunately, state intervention usually stops people from doing what they want to do - and ends up making them less happy. In a market economy, people exchange goods, services and money voluntarily because they believe they will benefit from the exchange. Swapping what they have for something they want more makes them happier. Where regulation thwarts free exchange, it eats in to our pursuit of happiness.

Of course, nearly all regulations have some justification. We don't want unsuspecting people buying electrical goods that are unsafe, for example. But much of the regulation that is justified in this way is actually an attempt by those in authority to stamp on everyone else their own view of how people live. We've seen that recently in the UK with all the dreary middle-class prattling about how those awful American-style casinos would corrupt us all if our 40-year-old gambling laws were liberalized. And there is no shortage of people who would like to modify our behaviour to fit in with their own view of how we should live.

Governments can't legislate us happy. "There have been many more bad governments in history than good ones," concluded Schwartz. "The benefits of freedom are under threat - from ourselves."

We have been saying positive things here recently about Linux, a competitor to Microsoft Windows. Should we not as free-marketeers rally around the market leader?

It is often the new entrants into the marketplace that radically change the way things work for the better. It is thanks to Amazon that I can buy books online easily - their website lets me read reviews from other customers and get suggestions of products I might like based on my past purchases. But Amazon is a new entrant in the book market compared with, say, WHSmith, founded in 1792, or Blackwell's, founded in 1879.

The market process lets new entrants, with new ideas, come into the marketplace and displace incumbents. This competitive process drives innovation and lower prices. New entrants are a good thing. The existence of Linux has already led to price cuts - large purchasers of Microsoft products to able to negotiate substantial discounts simply by threatening to use Linux.

It's exactly 75 years since the Wall Street Crash that brought the 'Roaring Twenties' to a close. So they say; but in fact the US stockmarket started to slide in June 1929, and had not bottomed out until many months later.

But, as Milton Friedman (pictured) shows in his Monetary History of the United States (written in collaboration with Anna Schwartz), the real catastrophe did not arrive until 1933, when a run on the banks precipitated a major banking crisis that ruined many businesses and families.

It was not helped, says Friedman, by the Federal Reserve Bank actually making credit more difficult during this downturn. Then, the world was only just moving off gold as its standard of value, and monetary management was much misunderstood.

Today, we would know how to deal with a downturn: flood the markets with cheap credit until everyone has the confidence to stop selling and start buying. That is exactly what Alan Greenspan and Nigel (now Lord) Lawson did in 1987, after 'Black Monday', where US and UK stockmarkets plummeted, and it worked. Sure, it's still hardly an exact science. Markets are fickle things, and you cannot predict their wilder ups and downs. But we can at least pick up some of the pieces afterwards.

And that is due, in no small measure, to the modern understanding of monetary policy developed in the '60s and '70s - against the fierce opposition of the prevailing Keynesian movement of the time - by Milton Friedman.

Today's Financial Times reports that the government is looking favourably at Linux and other open source software:

[The] Office of Government Commerce, which is charged with promoting efficiency and value for money, says in a report published today that open-source software is "a viable desktop alternative for the majority of government users" and "can generate significant savings"... "If commercial companies and other governments are taking it seriously, then so must we."

Linux offers a way of cutting costs for government computing, so taxpayers especially should welcome the OGC's report. Linux is not ideal for every computer user yet - for example, it doesn't run many computer games. But in terms of office software and the ability to connect to databases and the internet, it can offer much better value than Windows. There is a growing consensus that it is more secure than Windows, too. It thus right that the government is looking at Linux as a serious option.

UK Chancellor Gordon Brown made much of his "golden rule", that the only good reason for public borrowing was investment. But now he is going to have to break that rule by borrowing at least £3 billion more than he forecast. The public finances are in a dire state: the government borrowed £22.75 billion in the first half of the financial year, more than two-thirds of the £33 billion forecast for the whole year.

The Treasury blames 'lower than forecast tax revenues' as if it's our fault for not paying enough tax. Well, we're paying quite enough, thank you. Tax Freedom Day doesn't come until the end of May - though these new figures mean we'll be working a lot longer to pay off the deficit, too. And we paid 6.8% more tax in the first half of this financial year than we did in the same period in 2003-04. But Brown had hoped for a whopping 7.8% increase.

Income tax, capital gains taxes and company tax payments are all down on the Treasury's forecasts. Perhaps there is just a limit to how much British taxpayers are prepared to shell out, and they're staying at home rather than working and spending.

The economy may look pretty flat, but in fact it's as good as it's going to get in this economic cycle. At this point, Britain should be paying off debt, not increasing it.

The other EU countries are wallowing in debt too. The EU version of the golden rule, the Growth and Stability pact brokered in July 1997, is just as dead as the UK's. Portugal's borrowing breached it in 2001, then France and Germany smashed it in 2002. The EU Council 'suspended' the Pact, but the Commission challenged that and won in the Court. But nobody (of course) has been punished. Look forward to higher taxes - after the next round of elections, of course.

Former Environment Minister Michael Meacher has implied (in the Financial Times) that, if only there was not an America, the world would have 26 per cent fewer emissions - ergo end of global warming. The fact that the $5,000bn global economy would be nearly 25 per cent worse off and Europe on its knees seems to have eluded him.

He jumps to the further conclusion that if you are not supporting Kyoto, you are not doing anything for the environment. Wrong again. As governor of Texas in 1998, George W. Bush paved the way for the most successful, speediest and most economic policies for Renewables in the whole of America, if not the world. In fact, Texas will achieve 10 per cent renewables long before Britain. No mean achievement, considering that Americans use twice as much power (1.3 kilowatt demand per capita) as the average Briton!

It may suit Mr Meacher's Weltanschauung to blame everything on America. Not only is this approach ill-founded in fact, there is no way in which it serves Britain's national interest. Besides, it ignores the wider, benevolent commercial forces at work around the world. Companies such as General Electric are relentlessly driving down the costs of wind and solar power. And, ironically, America's problems in Iraq, which have admittedly helped to drive up the price of oil by 50 per cent, are stimulating the adoption of renewables even more.

Tom Steinberg - a third way left-winger who used to work for the Prime Minister's Strategy Unit - talks about Friends Reunited. This is a successful social networking website which connects people who went to the same schools or who worked for the same organizations. "Friends Reunited is a site both wildly popular and probably more condusive to social cohesion than any specific government intervention in that area," he says.

But rather than concluding that social networking should be left to the market, he says the success of Friends Reunited shows that government needs to be doing this sort of thing. He seems to think the government would be more efficient at running such a website - after all, the government's records tell it where we went to school and where we've worked. He also uses "government" and "low cost base" in the same sentence.

The government is, of course, already funding 'social networking'. But it is private projects that people actually use.

I met Steinberg once. We were at an event where the speaker was pointing to the success of another social networking website, Friendster. As you might have guessed, this site helps you keep in contact with your friends, and it's not funded by taxpayers. Friendster is a great idea, but soon after the event, people started complaining that Friendster wasn't scaling up to the demand - the site became very slow. Others complained that they didn't like how Friendster treated one of its staff. So lots of people switched from Friendster to newer rival called Orkut. (Friendster then got reprogrammed to be faster.) The market process means that new ideas and techniques compete, and it also means that taxpayers do not get lumbered by the bill. The government should leave social networking to the market.

In an article in the current Proceedings of the National Academy of Sciences (reported here), authors Robert Jackson and William Schlesinger of Duke University, ask how effective would be some of the alternative suggestions for the US to cut its greenhouse gas emissions.

If farmers stopped tilling all the cropland in the country, and either switched to alternative farming techniques or left land fallow, carbon emissions would drop by less than 4%, the researchers report. If extra trees were to be planted, they would have to occupy one-third of that land to reach a 10% carbon emission reduction.

On the other hand, Jackson and Schlesinger's estimates show that the US could achieve the same 10% reduction by doubling the fuel efficiency of all cars and SUVs. This could be done by switching to existing hybrid electric vehicles which run partly on electricity.

These vehicles currently cost more, as the authors concede, but their point is that relatively small technological changes "could make considerable dents in US emissions," as Jackson puts it. Any further oil price rises will make hybrid vehicles relatively more attractive, and could encourage more people to make the switch.

Of course none of this involves us "giving up on consumption," or "learning to live more simply," and may not appeal to those who want us to go back to nature (whatever that means). It does, however, suggest that technological fixes to our problems might be easier than some suppose, and that solutions could be brought by more technology, not less.

An engaging debate on liberty has been started by the UK's proposed new gambling bill. ASI President Dr Madsen Pirie was on BBC2's Newsnight on Tuesday October 19th, saying that a minority might be unable to handle the new opportunities, but that this is part of the social price we pay for freedom.

Lord Hattersley, former Labour minister, wrote an article in Monday's Guardian to oppose Madsen and claim that "John Stuart Mill would never have endorsed the gaming bill." Today's Guardian letters feature a reply from Madsen, and one from Eli Randolph which points out that "Mill, in On Liberty, explicitly allows individuals to gamble, be idle or drunk, if they wish."

The discussion on liberty and society transfers tonight to BBC Radio 3, in Nightwaves from 9.30pm to 10.15pm, with Madsen discussing with others the broad issues at stake. The proposed new gambling laws have raised public awareness once again of John Stuart Mill's landmark essay On Liberty.

I've been reading the journal, written in 1811, of a traveller in Britain, Louis Simond. Originally French, but having spent most of his life in America, Simond was an experienced and perceptive commentator on British customs, manners, and institutions.

Here he is, after two years touring the country, "waiting only for a change of wind to go on board the ship which is to carry us away, for ever perhaps," reflecting on what he has found:

If I was asked, at this moment, for a summary opinion of what I have seen in England, I might probably say, that its political institutions present a detail of corrupt practices, - of profusion, - and of personal ambition, under the mask of public-spirit very carelessly put on, more disgusting than I should have expected...

No change there, then.

The ASI held a celebration dinner 25 years after exchange controls were abolished, and in honour of those who did it. These included Lady Thatcher, who had to be persuaded at the time, together with Lord Howe (pictured) and Lord Lawson (pictured below), both of whom spoke at the dinner.

Exchange controls limited the ability of citizens to hold foreign currency, or to send or take Sterling (UK currency) abroad. They were designed to stop capital outflows and currency fluctuations. The Labour peer Lord Dalton described them as 'permanent' when they were introduced in 1939, and 40 years afterwards they seemed so.

What they did was to inhibit inward investment. Why should foreigners invest in Britain if they could not take home the pounds they had earned, or change them into other currencies? They also prevented Britain from investing overseas and earning money by doing so. British investors could not easily buy overseas assets or invest in foreign companies. The 'invisible earnings' which these days usually tilt the balance of payments into the black could not be built up while exchange controls were in place.

All kinds of market distortions resulted. Pension funds, for example, were over-invested in property, raising prices in that sector. Property often rises when equities fall, but so do many foreign equities and foreign bonds, neither of which was available until that 1979 day. On the morning of that day itself, Lord Howe noted that the 'dollar premium' stood at 20 percent. This was the extra you had to pay to buy dollar-designated items.

Holiday-makers suffered the humiliation of being allowed to take out no more than £50 at a time, and their passports were stamped accordingly. At the dinner Perry de Havilland (of Samizdata.net) told an amusing tale of smuggling currency out in his nappies, shedding a whole new light on the phrase 'dirty money'.

Lord Lawson pointed to what exchange control abolition had enabled Britain to achieve. The flexibility which their demise unleashed was spectacular, ushering in more than a decade of rapid growth and recovery, and setting in train the economic flexibility which now makes Britain the EU's pace-setter.

They were brave days, and brave people who did it. It was an honour to recognize and celebrate their achievement.

If you would like to attend, please e-mail blogevent@adamsmith.org in order to get a place. We have limited space, so it's important to book. The event will be followed by a champagne reception. Click here for a map.

Here's the blurb...

Much hype surrounds the internet's self-publishing phenomenon known as blogging. Many claim that the blogosphere - the community of millions of blogs - is the key to reinvigorating the political process. Some believe that, using blogs, politicians will better serve their constituents, the disaffected will become involved in politics, and public confidence in the ability of government to solve society's problems will skyrocket.

There are also those who fiercely believe that, if only MPs would all start blogging, public debate would be dramatically revitalised. Is this wishful thinking in the age of spin doctors and party whips? Would more conversation with the public encourage our MPs to follow better policies, or lead to governance by opinion poll?

Does the blogosphere really strengthen the political progress, or is it more anti-Establishment than the Establishment would like to believe? Should the unprecedented ability of citizens to spread criticism of the state, its actions and its employees be cause for governmental alarm? Can our political process withstand such scrutiny? And is the blogosphere the big, equality-driving democracy so many claim that it is, or is it really a meritocracy, where the most interesting, compelling, and worthwhile ideas rise to the top?

Regulation is not only Britain's biggest industry; it also gives people something to do with their time.

The Times reported on Monday that Rother District Council in East Sussex had ordered 1,000 'dangerous' gravestones in Bexhill and Rye to be pushed over in case they fell on people.

Now the council’s officers report that the flattened monuments are still a hazard "because people could trip over them." Sigh.

Many people have written pieces about the notion that the government has of cutting the size of the public services - based on Gershon's report on public sector efficiency, and followed up by David James. Currently analysts say that Brown's "golden rule" is threatened anyway, even on the assumption that the savings can be delivered.

The detail of how the government intends to implement cost savings is pretty obscure in the 2004 Spending Review. There's a good deal of smoke and mirrors involved in reclassification of jobs, confusion over treatment of relocations, and possible privatisations, even before we come to real savings.

This doesn't mean that savings can't be made; of course they can. Computers for instance are an area in which the government has had notably bad episodes. (And so do others - look at the Sainsbury's disaster). But it is essential that cost-savings are made without the the services that people really value deteriorating. But there is a lot of wishful thinking from the government here.

The civil servant with the job of making savings, John Oughton, is relatively junior against the serried ranks of Permanent Secretaries and Union General Secretaries. Government Ministers may well be very happy in principle with the notion of cutting staff and saving money, but equally they don't want to do it when it hurts the services they are responsible for, and finds them up on the Today programme the next morning.

Government waste, whether in education, health, police, armed forces or the civil service, should be trimmed - and Mrs Thatcher did it. But the trouble is that often one person's waste (or "nannying") is another person's good service. Cutting costs, and thus producing or at least restraining tax increases are fine. But in this day and age we actually want both tax restraint and improved services. Beyond hoping for better economic growth than expected, that's a dilemma that the government seems wary of getting to grips with.

It's official. Regulation is now Britain's biggest industry. David Arculus, the Chairman of Severn Trent Water and head of the government's Better [sic] Regulation Task Force, suggested last week that the cost of regulation to the UK economy was now more than £100 billion a year. That's more than a tenth of our gross domestic product (GDP).

That's bigger than tourism (£76 billion), or our much-vaunted financial services industry (£66 billion), or even the National Health Service (£67 billion and rising - and rising).

I no longer believe any of the politicians' promises to 'sweep away red tape'. Michael Heseltine, another businessman and self-made millionaire, tried it when Industry minister in the 1980s. His deputy, Neil Hamilton, headed up a commission to reduce regulation. Tony Blair has been talking about it for years. But the number and intrusiveness of regulation continues to grow.

One reason, says regulation-watcher Christopher Brooker, it that "for every single new law, however made, it is always possible to find some seemingly altruistic justification. Once health and safety, conservation, the environment or fighting discrimination has been invoked, no one seems capable of asking whether the law actually achieves its purposes." In other words, any time you suggest suspending a regulation, scores of people will cover you with contempt. And you will be blamed for anything that goes wrong without the aegis of this 'protection'.

The trouble is that, when you have tens of thousands of regulations, nobody can run a business free from the fear that they are transgressing some rule. So businesspeople waste vast amounts of money trying to find out what the rules are, and then making sure they have enough 'compliance officers' to stay on the right side of them.

Unless you have any ideas, Britain's biggest industry is going to carry on growing even bigger.

The British government plans to sell the Tote, the state-run bookmaking operation. But it is only allowing one customer to bid - a new 'Racing Trust' that has been specially created for the purpose.

Worse, this privileged buyer will enjoy the fruits of a seven-year monopoly on pool betting, not to mention all the strategically-placed kiosks that the Tote has at racecourse stands, bars, restaurants, and hospitality boxes (other bookmakers have to pay to stand out in the rain). And a network of around 475 licensed betting shops throughout the country.

That lot should be worth around £500m, say City analysts. But the Racing Trust says it can only afford around £150m. So it seems that taxpayers are facing a £350m rip-off.

That's all right, we're told, because the money will go 'into Racing'. Yeah, but Racing is booming right now, with more fixtures than ever before, and in any case, it is dominated by rich men who for the most part don't even live in the UK. We're just exporting taxpayers' cash to Dubai and the Bahamas.

I love privatization, but we've still asked the European Commission to block this sale as anti-competitive and an abuse of state aid. The Tote should be stripped of its monopoly privileges, and sold to the highest bidder in a free and open auction - not this cosy stitch-up with the Racing interests.

The BBC and most politicians argue that the technical nature of television mitigates against programmes of high educational quality in a purely competitive market. They say that some kind of government intervention is necessary to ensure that public service broadcasting happens.

But the BBC is not the only way, and therefore not necessarily the best way to deliver such public service broadcasting. It acts both as commissioner and deliverer of public service broadcasting. There is no way of telling if what we see on our screen is truly in the public interest, short of trusting the BBC and its board of governors.

An alternative would be to have a separate budget allocated to public service programming, financed from the licence fee, so that the money raised from TV watchers would be ring-fenced to be spent on public service broadcasting.

Some broadcasters, like now, would be obliged to meet certain public service broadcasting responsibilities. These would then bid for licence fee funds to make programmes which met those responsibilities. This would introduce competition for licence fee payers’ money as the best guarantor of value for money.

With licence payers’ funds being available to a multiplicity of bidders, what role would remain for the BBC? The logic seems to point to full privatisation, but there may be other options. The BBC might become a private non-profit corporation like the National Trust, for example.

There are those who argue that only the BBC is capable of preserving and reflecting cherished high standards of public culture and ethos. But such things are not best served by a raising one broadcaster to church-like status. Instead, they are a product of our education and civilisation at its broadest, and are preserved by factors way beyond the confines of television.

Samizdata has published some photos of our dinner last night celebrating 25 years since the abolition of exchange controls, held at Westminster's St Ermin's Hotel.

(Added 24/10) Dr Eamonn Butler writes "It was a splendid occasion, with 50 of the Institute's insiders coming together to hear Lord Howe (who announced the abolition of exchange controls to the House of Commons exactly 25 years ago), and Lord Lawson (his deputy at the time, and one of the intellectual forces behind the decision).

"What came over most strongly was the sense that these policymakers were sailing through uncharted waters at the time. Exchange controls had been in place so long that nobody could imagine the world without them. Indeed, it took a while before the press and politicians had come to realize exactly what Geoffrey Howe had actually said on that momentous day. People worried that capital flows would be uncontrollable. That huge amounts of money would leach abroad. William Keegan, the prominent financial journalist, predicted that controls would have to come back within a handful of years. They were all wrong.

"Samizdata's Perry de Havilland also gave a short talk: telling how his parents used to sneak money out of the country stuffed inside his nappies! It truly is hard to believe the crazy economics of the late 1970s, when income-tax was 98 pence in the pound."

Bjorn Lomborg, author of The Skeptical Environmentalist, was in London today, describing his Copenhagen Consensus attempt to prioritize the world's most pressing human problems, so that we can direct resources rationally towards solving them.

I went along to meet him (see picture) and found him on his usual good form. He told us that the Copenhagen Consensus harnessed the work of some of the world's leading economists, many Nobel Laureates, making an exhaustive cost-benefit analysis of issues such as climate change, malnutrition, communicable diseases, lack of education, poor sanitation, and corruption.

Their conclusion is that our top priority should be HIV/AIDS. About 28 million cases could be prevented by 2010. The cost would be $27 billion, with benefits almost forty times as high. Malnutrition is another issue we can tackle very effectively. Bringing clean water and sanitation to the world are also good in terms of bang-for-the-buck. But spending the huge amounts of money required by Kyoto in order to stave off climate change by a few years is, the economists concluded, very bad value for money.

I was also impressed that the Copenhagen Consensus economists put free trade high up on the list of worthwhile aims. "In anything you do, there will be winners and losers," explained Lomborg. "With free trade, you do have distributional issues, but the winners far outnumber the losers, both globally and in the developing world. Indeed, global free trade would lift 300m-500m people out of povery."

Challenging stuff. You can read it all in his new book, Global Crises, Global Solutions.

When I was in France in the summer there was a great fuss in the French newspapers about a threat by the German manufacturer Bosch to close down its French plant. Bosch warned that it would move operations to the Czech Republic unless the unions accepted an increase in the working week to 36 instead of 35 hours. The 35-hour week in France is a sort of totem for many: even Jacques Chirac called it a social right.

The Bosch affair reopened the whole debate about what the French were doing with a 35-hour week when unemployment was hovering around 10 per cent and jobs were being lost to developing countries where wage-rates were 80 per cent lower. In an angry editorial, The Figaro denounced the unrealism of the unions which it regarded as deep-seated. In a subsequent issue there was an article from Sorbonne History Professor, Jacques Marseilles. He denounced the 35-hour week as a law for an "imaginary" France. It sprang, he said, from the Left's Dickensian idea of the economy as an overwhelmingly manufacturing one in which masses of industrial serfs are exploited and oppressed by grasping capitalists. The reality, he said was that only 16 per cent of the economy was now industrial. Nearly all the rest was services in which it was essential that labour be adaptable not hidebound by draconian regulation. The popular cult of minimum effort, he said, could only impoverish the French people in an ever more competitive world.

Despite changes to its name and operations, the Royal Mail Group is still in trouble.

First class mail is in long term decline. Who writes a letter these days when you can send an e-mail? And the e-mail can have a 100 page report attached that is delivered in a few seconds. No contest.

Only direct mail - unkindly called junk mail - is on the up and it will continue to be used for many years despite competition from e-mail advertising and the worldwide web. That still leaves Royal Mail's core business changing from high value to low. There is still scope for considerable improvements in internal efficiency but there are no big technological changes even in sorting equipment that can revolutionise the letter service.

The same is true of parcels. Unforgivably, for the last 50 years the parcel service has made losses, subsidised by the profits on letters. Yet there are about six big parcel carriers that deliver nationwide and make profits or they would go out of business. There is no case for Royal Mail's letters to cross-subsidise parcels. Parcelforce should be compelled to make a profit or be sold off or shut down.

The network of post office counters used to be virtually an arm of government paying out pensions and other benefits, but the Department of Work and Pensions rightly has decided to make as many payments as possible electronically direct into people's bank accounts. Footfall in post offices is falling and the government has been forced to prop up Post Office Limited with an annual subsidy of £150m. That can’t go on indefinitely.

The solution: give each of the three businesses full independence to manage their own destiny, and abolish Royal Mail Group which sits on top of them as a large overhead.

There's a myth being put forward that government action - the Disability Discrimination Act - is making websites more accessible to the visually impaired. Politicians might like to take the credit, but they don't deserve it.

The organization doing the good work is the World Wide Web Consortium (W3C). This is a private sector regulator of web standards, set up by Sir Tim Berners-Lee - the British inventor of the World Wide Web. There's no legal requirement to follow W3C standards, yet people follow them. In doing so, it easy, and almost costless, for modern websites to provide versions for visually impaired people. Increasingly websites across the world are becoming more accessible - and it's thanks to a private sector standard setter.

The Dublin Economics Workshop in Kenmare last weekend made me understand just how committed to Europe are the Irish. Some love the EU for all those social funds (but they've added barely half a percent to Ireland's recent surge in economic growth). Or for all the farm subsidies (the country is certainly a patchwork of tiny fields like over-subsidized France, but in fact farming is now pretty insignificant in Ireland.

The Economist this week cites several structural an policy changes that have made sleepy Ireland now the Celtic Tiger. Of those, I'd say the huge tax cuts, particularly in corporate taxes, are what did it. Of course, if you cut tax and sort out your supply side, it helps to have a wider, single market on the demand side. So you can credit EU membership with helping, if not creating, the turn-around.

But now Ireland is in trouble again. The boom has left it a high-cost, high-wage economy: the manufacturers that came in because of cheap labour and zero corporate taxes are now drifting away again. And property prices have gone sky-high.

To me, that looks like the consequence of inflation. We had the same over-heating in the early 1970s in the UK, and property soared then too. And inflation, in turn, is a consequence of Euro membership: interest rates too hight for faltering Germany have been too low for booming Ireland. But love is blind, and in Ireland you feel rude if you even hint that something European might be the problem. I fear it will end in tears.

Over at IMAO, Frank J. helpfully supplies translations for some of the codewords in current use. His list includes:

the rich, the wealthy = you
e.g. "We’ll fund things by taxing the rich."

fair = huge, enormous
e.g. "Everyone needs to pay their fair share."

progressive (n.) = shrill left-wing nut
e.g. "Michael Moore is a prominent progressive."

progressive (adj.) = appallingly moronic
e.g. "We hope to get into law more progressive policies."

climate of fear = sense of reality
e.g. "Republicans are trying to win by creating a climate of fear."

His list features many more, and I’m sure our own readers can supply quite a few themselves. (Tip: keep 'em brief).

A new report says the Brits aren't saving enough for their pensions. Commentators have asked Tony Blair when he's going to put taxes up to pay for higher state retirement benefits, but he just grins. Not until after the election, anyway.

Britain's certainly in a much better position than much of Europe. According to Jeremy Clarkson - the motoring guru seems to be becoming an economic pundit too - in the Sunday Times:

Thanks to changes made by Margaret Thatcher in 1979 we’re going to fall short of the pensions bill by only 5%. In France they’ll miss it by 105%. In Germany it’ll be 110%. Then there’s the United States.

It's bad enough, though. But don't blame yourself, says, the ASI's own Dr Eamonn Butler, writing in The Business. Blame politicians. After all, they've 1) staged a £5b-a-year tax raid on pension funds, 2) systematically cheated on state pensions, 3) made it irrational to save because of means-testing, 4) made pensions too complicated, 5) not been brave enough to admit we have to work longer if we're going to be retired longer, 6) scrapped perfectly good savings schemes invented by their opponents, 7) mired pension planning in regulation. And 8) they've voted themselves and their officials cosy index-linked pensions, so couldn't much care.

So forget about higher taxes. The government should replace the state pyramid-selling pension with funded personal accounts like Chile did [PDF], admit we have to work longer (but we're fitter and living much longer anyway), and cut away the regulatory crap. Then it can just retire and put
its feet up.

For those of you who don't read the sports pages, there has recently been a row about David Beckham, the England football captain. In his latest match for England he deliberately fouled someone.

Why? Not because his team would gain any advantage.

He had sustained an injury to his ribs, so he knew he would be unable to play in the next England game. By fouling someone in the way he did, he knew he would get a yellow card. This would be added to the yellow card he had previously received in another match and the two together would cause him automatically to be banned from his next game. But that was fine, because he knew he could not play in the next game anyway. By getting himself banned for one game, he would wipe away the yellow card already on his record. He would then be able to play in the rest of the tournament with less risk of getting banned for a game.

David Beckham was being, as he put it, "clever". Of course Beckham is well known, despite his footballing talent, for not being an outstanding intellectual. But he is obviously bright enough to work the system (if not quite bright enough not to brag about it).

When soccer's governing body drew up the rules on fouls, did it intend to incentivise the England captain deliberately to foul someone?

No, of course not. The people involved surely thought they were creating rules which were fair. They probably felt they were writing rules which were the footballing equivalent of 'social justice' - a fair amount of punishment for a particular amount of crime. They assumed that behaviour on the football pitch was a given and that the rules should merely reward and punish in a "fair" way. They did not think that changing the rules would change behaviour. But, as Beckham has shown, the rules certainly did change behaviour.

This very same mistake is at the core of the failure of the welfare state. People - including all the famous politicians and many clever civil servants - have thought they could change the rules - even whole structures - without changing behaviour.

In 1948, Bevan nationalised the hospitals. He assumed that the standard of hospitals was a given. He assumed that the behaviour of doctors, nurses and administrators was fixed. They would not be affected by a change in the structure - in the rules of the game under which all those people were operating. They would perform just as efficiently, just as charitably.

Their time would be deployed without any change in the amount of time spent in bureaucratic work. The hospitals would be just as clean. The authority of the consultants would be just as great. Innovation would be just as notable as before. There would be just as many beds and just as many small, local hospitals. All would be just as good, regardless of a wholeseale change in the rules of play which resulted from changing from an independent, part commercial, part charitable structure to a state-owned structure.

They were wrong. In this case, as in many, many others, the creators of the welfare state fell foul of the Beckham rule. It can be defined thus:

If you change the rules, players will change their behavour.

Here I am in the Lansdowne Arms Hotel in the charming little town of Kenmare, on Ireland's rugged and spectacular south-east coast. I'm here to speak at the annual policy meeting of the Dublin Economics Workshop, and tell them why the Kyoto agreement is bad for the planet.

Coming here by Ryanair is an education in itself. The boss, Michael O'Leary, continues to strip out any cost he can. The new seats are leather, so they wipe clean, and they don't recline (reclining seats get broken, and that costs money). We landed at Kerry, a tiny Art Deco airfield which is still able to handle jetloads of passengers without apparent effort. Ryanair favours these smaller airports because they're much cheaper. But in fact, passengers love them - much less delay, crowding, hassle than Heathrow or Gatwick, and much less of a walk from entrance to plane.

O'Leary used to be a student of my good friend - and ASI author on aviation policy - Dr Sean Barrett, who obviously did a good job in teaching him transport economics. Sean tells me that before Ryanair, Ireland's aviation industry had 7000 staff and handled 2m passengers. Now it has 7000 stff and handles 40m. Aer Lingus stuggles to keep pace: it's just offered generous redundancy terms to 1,500 staff as it too strives to become a low-cost airline.

Jim Levi in the Telegraph’s Business2 supplement (Oct 14th 2004) identifies this as his non-job of the week.

The job: European Policy Officer

The salary: £22,500 - £25,407 + car allowance

The employer: East of England Regional Assembly (EERA)

The duties: To help create a European policy. To give "a strong authoritative voice to the region."

The role: To "help facilitate the delivery of the East of England Regional European Strategy and assist with the integration of European issues into the wider work of the Regional Assembly."

Taxpayers and small businesses will be enthralled yet again to see the creative use which government makes of their money.

No apology is needed for revisiting yet again that perpetually fascinating subject, PFI. It stays with us.

It's interesting to think that some 20 years ago Michael Heseltine produced the first PFI idea (although it wasn't called that then), to finance and build the as it turns out very successful QE2 Conference Centre in Westminster. The Treasury opposed this on principle (misrepresentation of public spend). It was about ten years later that the Treasury discovered they'd got it wrong, or so they thought, and PFI wasn't such a bad egg at all; indeed when times were strapped, and looking at it narrowly, the notion of keeping spending off the balance sheet, and at the same time seeking better to engage private sector management and expertise not to be found in the public sector, all seemed a good idea.

And of course so it was. But it risks going awry. "Keeping things off the balance sheet" has got near to getting out of hand; the recent budget red book notes that in the current financial year some £4 billion of signed deals exist, not sufficiently accounted for, or indeed not accounted for at all, in the Chancellor’s views of his borrowing requirements. Getting private sector expertise has to be right, but the deal has to be done correctly, both from the point of view of the private sector contractor and the public sector purchaser - and here things haven't always gone right, especially in the IT realm. And there have been other factors at work - for instance the Trade Unions and similar who see this as a back door to what they call privatisation. And lack of expertise, particularly on the public purchaser side.

But if and when it works, which in many cases it certainly does, it is the right way forward. There will always be mistakes, but when it works it works well. And when it doesn't, it's not clear that conventional means would have done better. PFI stays but it's still got rough edges and it needs constant care and attention.

At a London reception last night to promote private spaceflight, I met Dr Norman Thagard (on the left), who flew five missions, four aboard the shuttle, and one Soyuz flight to the Mir station. He has joined with Space Adventures to push the notion that space is for everyone. They have already sent Dennis Tito and Mark Shuttleworth to stay on the International Space Station, and also offer zero-g experience, flights on the Mig-25 and Mig-29, and have signed up several people, including me, for sub-orbital flights like those which won Burt Rutan the X-Prize on Oct 5th.

Details on all of this can be gained from Wildwings of Bristol, who handle UK bookings. The message was that the past few decades saw space as the preserve of governments, but it is rapidly opening up to private citizens. While the price is pretty steep at present, it will come down very quickly as new technology comes on line. Good thing, too. Leaving the planet at least once, like leaving the country, can be a mind-expanding experience.