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Written by Tim Worstall
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Tuesday, 13 March 2007 |
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As with Harry Truman's request for a one handed economist, would it
be possible for us to have a one handed government? Not just because
such a unimane would be less able to grasp our hard earned wealth but
also one hand might know what the other is doing. The Financial Times:
A European summit agreed to toughen regulations against
old-fashioned incandescent bulbs by 2009 as part of a bid to cut
greenhouse gas emissions. But earlier in the week officials from trade
ministries rebuffed attempts by the European Commission to end
five-year-old surcharges on imports of energy-efficient bulbs from
China.
The 66 per cent duty was imposed in 2002 after European
manufacturers complained of dumping by the Chinese. It expires in
October but Siemens of Germany, which owns the Osram brand, is pushing
for an extension. The other big makers, Philips of the Netherlands,
which pays a 33 per cent tariff, and GE of the US, disagree. Ending the
duty would cut prices to the level of conventional bulbs.
It might also be worth noting that on matters either (or both) trade
and the environment, the European Union is indeed our government.
Further, that such import duties, while collected by the national
governments, are in fact paid directly to the EU coffers: it's the only
form of taxation they actually control the rate of. So if one were
exceptionally cynical one could say that the recently decided ban on
incandescents was simply a way to force us to buy the higher taxed
items.
No one would be that excessively cynical, of course, for that
would be assuming that everyone involved actually knew what they are
doing.
(Disclosure: my day job means that I will benefit from the ban on incandescents and I still think it's a bad idea.)
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Written by Dr Madsen Pirie
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Tuesday, 06 March 2007 |
My colleague Dr Eamonn Butler spoke at a reception for The Next Generation
last night. He took as his theme the three most important things said
by Adam Smith (on whom he has just completed a short book for the IEA).
Number one was that Smith exploded the notion that people could only
enrich themselves at the expense of others. Not so, said Smith. Wealth
is created by specialization and exchange.
Number two was the invisible hand, that spontaneous ordering of
society which means that when we act in our legitimate self-interest,
we often benefit countless others we shall never meet. When we buy we
unwittingly create employment and pay wages. When we sell we provide
other people with goods they value more than the money they part with.
Number three, from the Theory of Moral Sentiments, is that the
most striking characteristic of humankind is our propensity to
empathize with our fellow men and women, feeling sadness at their grief
and pleasure at their happiness. The three points, taken together,
amount to a powerful social philosophy and gave the world not only the
scientific study of economics, but an understanding of how human beings
interact with each other. Truly a powerful contribution.
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Written by Dr Madsen Pirie
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Thursday, 01 March 2007 |
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I was speaking on BBC4's World TV programme about capitalism and
globalization. Tony Benn deplored how undemocratic it all was, with
WTO, World Bank and others not directly elected by the people. I said
that it wasn't supposed to be democratic.
The idea that something so
vast as a complex global market should be directed by a few elected
politicians was laughable. It has billions of inputs which produce an
unplanned social and economic order more intelligent and flexible than
anything which human minds could direct.
Professor Jagdesh Bhagwati of
Colombia University made several valid points about how poorer nations,
including India, had thrived and prospered once they had entered that
global market-place. He sided with the achievements of capitalism and
trade, which I pointed out had lifted more people out of poverty last
year than ever before in human history. I do hope and believe they will
continue to do so.
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Written by Dr Madsen Pirie
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Tuesday, 27 February 2007 |
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At the opening of Fair Trade fortnight we were guests of Cambridge fair
trade supporters for a debate on whether or not fair trade was a moral
obligation. We spoke under the watchful eye of Lord Keynes in his
eponymous hall in King's College. With me on the platform were Ceri
Dingle of WorldWrite and Mischa Balen of Pembroke College. Our case was
that it is trade which enables people to climb out of poverty – more
last year than ever before in human history. Instead of trying to
manage that to benefit selected producers, we should abolish all
subsidies and tariff barriers in the developed world, and buy as much
as possible from poorer countries. Wealthy countries can afford decent
standards for their workers, and we can help them to get there by
buying their goods.
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Written by Tom Bowman
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Monday, 26 February 2007 |
Whitehall's grip on infrastructure funding and delivery is killing off sensible bus and tram schemes across the country, says a parliamentary report.
Sadly for many the mere mention of 'transport' induces deep yawns and
boredom, but without proper transport provision Britain faces a bleak
future of overcrowded trains and jam-packed roads. The reality is that
we would do much better if Whitehall didn't have so much control.
The problem lies with central government's grip of power over transport
funding and delivery. Most people think inept local authorities are
unable to deliver transport services, but actually the reverse is true.
Local authorities across the country want desperately to improve
transport but are straight-jacketed by Whitehall controls, layers of
government bureaucracy, and red tape. Since only 7% of local authority
spending is raised from council tax, local authorities are powerless
to fund infrastructure schemes and are dependent on central government
grants which are all ring-fenced for central government priorities
(health, education etc.).
To pay for transport schemes, local authorities must bid for funding
from central government. These bidding processes are time consuming,
complex, require expensive studies costing millions – and ultimately
there is no guarantee that funding will be granted. Manchester
Airport's Interchange (report pg. 14) took six years to complete
because Whitehall Mandarins required endless studies despite general
support for the scheme. And it isn't just one funding pot; centralised
funding involves a baffling array of funding bodies. Liverpool alone
uncovered over thirty different funding agencies (report pg. 18) which
makes it extremely difficult to cobble together cash for one project
since each has Quango has different time-scales, requirements and
targets.
The answer? A courageous political party needs to devolve financial
powers to local authorities. In America and Australia local government
uses Tax Increment Financing
which use the expected growth in property tax revenues from a
designated geographic area to finance bonds used to pay for
infrastructure. The Conservatives could counter Gordon Brown's
centralising trend and support financial devolution to the local level.
By empowering local government David Cameron could sweep away the
multiple layers of regeneration Quangos that Whitehall has created
because of its distrust of local government to deliver. Then local
people could be in charge of their own destiny, not unelected
bureaucrats – and by devolving power, local government would be more
accountable. Sure, some local authorities will get it wrong, but it
will be better than the present system, and those that get it right can
be a beacon for the rest. Some say Margaret Thatcher killed local
government, but the time has come for David Cameron to resurrect it.
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Written by Dr Madsen Pirie
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Sunday, 25 February 2007 |
Whatever else he will be remembered for, pensions are certainly
included. He took over Europe's best pension regime and ruined it
spectacularly. The final salary schemes were the best-funded in Europe.
Brown hit them as an easy tax target, and has taken over £100bn from
them, and continues to deplete them every year. His complex regulations
have hit equities as an investment, further lowering the value of
pension funds. The result is that those employer-provided final salary
schemes are closing fast, as employers see no prospect of being able to
fund them.
There is one privileged group, as Jill Kirby points out .
The public sector pension schemes now totally outclass anything that
business and industry can afford. Generous final salary schemes plus
early retirement create a new divide between those who sup at the
public trough and the poor souls who labour to fill it. Meanwhile,
Through a lethal cocktail of tax-grabbing and
overregulating, the government has destroyed faith in private schemes
yet tried to wash its hands of all responsibility.
But it won't wash. Brown will be remembered, all right. He'll be cursed by those whose hope of a decent retirement he ruined.
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Written by Tim Worstall
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Saturday, 17 February 2007 |
As we're all aware (after all, we're constantly bombarded with the
propaganda) we should be fleeing the supermarkets and purchasing our
foods at Farmer's Markets. Something to do with food miles I believe,
although the logic of buying food in a different place from the other
necessities of life, meaning two trips rather than one, rather escapes
me.
But I wouldn't want anyone to think that I am against Farmer's Markets:
I'm a proud native of Bath, the city that hosted the first one in this
country (and which I have of course patronised) and I've been an
enthusiastic seller at one of the oldest American ones, in San Luis Obispo
. If you wish to purchase direct from the producer, well, that's simply
an extension of consumer choice and so to be heartily welcomed. In
fact, I think the idea should be extended and developed, as this story
in The Guardian indicates it is:
But nor is it your average farmers' market. This is a
venture that aims to provide all the quality and reliably sourced food
of other farmers' markets but without the draughty surroundings and
temporary stalls. More ambitiously, the three founders, Jana Satchi,
Stephen Wilkinson and George Beach, say they want to redefine food
shopping.
"Jana and I were at Borough Market in London one day and it was
freezing," says Wilkinson, a former food and wine buyer for Marks and
Spencer. "It was at that point we thought: wouldn't it be great to do
something like this but indoors?"
An excellent idea indeed although our budding entrepreneurs seem to have missed one trick:
"It's not what we sell, it's what we don't sell," says
Beach. Nothing is packaged or manufactured. There is no bleach, toilet
roll or microwave meals.
Add those other items in and people would be able to do all (or at
least a majority) of their shopping at one time, reducing transport
miles further. Such a good idea it's amazing no one's thought of it
before really. So what would we call such things? Farmer's Market
already has its own meaning, large market, indoor market, they don't
quite get across how wonderful, spiffy, shiny shiny even, this new
retailing invention is.
Could I suggest that we start calling them "supermarkets"?
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Written by Fred Hansen
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Saturday, 10 February 2007 |
Last month, California’s Governor Arnold Schwarzenegger presented his
proposal of universal health care for the Golden State, which would
offer health cover for all uninsured people including illegal
immigrants. Although he and Republican Presidential candidate Mitt
Romney from Massachusetts have become media darlings for their sweeping
health care reforms, the consequences of these programs, once
implemented, would be disastrous, says David Henderson in the Wall Street Journal .
Gov. Schwarzenegger would require employers with 10 or more
workers to provide health insurance or pay a 4% tax on all wages
covered by Social Security…(He) would throw in a 2% tax on doctors and
a 4 % tax on hospitals to help fund Medi-Cal, California’s name for
Medicaid. And he would expand Medi-Cal to adults earning as much as
100% above the poverty line and to children, even those here illegally,
in poor and middle-income families. He hopes by doing this, to shift $5
billion of Medi-Cal’s annual cost to the federal government.
Schwarzenegger seems to have forgotten the lesson we learned with the
failure of HillaryCare, another universal coverage scheme, two decades
ago. The Clinton Administration engineered its implementation on a
small scale in Tennessee. TennCare’s universal health coverage policy
led not only to an explosion of enrolees – in short order one quarter
of the state’s population was on TennCare – it also attracted fraud of
all sorts, reports Patrick Poole.
Almost daily, news stories would run about the rampant
fraud within TennCare – enrolees living in a Trump Tower penthouse in
Florida, Fortune 500 CEO’s flying their ailing children to Tennessee on
their private planes to get qualified for TennCare and to receive organ
transplants, and thousands of enrollers whose only connection to
Tennessee was a P.O. box located in one of the many border cities
around the state…
As a result in the six years of TennCare, health care quality in
Tennessee plummeted because doctors left the state in droves and a
dozen hospitals closed – most of them in underserved areas. At the end
only a taxpayers' revolt of sorts finally terminated the programme in
2000.
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Written by Tim Worstall
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Thursday, 08 February 2007 |
To my mind the most important point that the late, great, Milton
Friedman made was that intentions don't matter, outcomes do. It's at
the heart of many of my own arguments with those calling themselves
liberals who fail to see some of the points made by classical liberals:
yes, we all want the poor to be richer, for example, it's just that we
disagree on the best way to encourage that outcome.
Unfortunately, Friedman's point doesn't seem to have reached everyone, as Oliver Walston tells us in The Independent
. Having thought up an intriguing way to raise money from the farming
and supermarket sector (on an entirely voluntary basis) to spend on
development in poorer countries he contacts Oxfam and gets a response
he really didn't expect:
After a few days the reply came in the shape of a
telephone call. The answer was eerily familiar: "Thanks, but no
thanks." Their reasoning was as simple as it was surprising. They were
unwilling to accept any money from supermarkets and thus, with great
regret, they had to refuse my offer.
Had I challenged the crack cocaine dealers or the child pornographers
to match the farmers' funds, I could, perhaps, have understood Oxfam's
refusal. But to suggest Tesco and Sainsbury and Waitrose are so tainted
that any money they provide is dirty money is unjust, unbelievable and
(if you happen to be an African farmer) unhelpful. Meanwhile, Oxfam
preserves its purity and the Third World pays the price.
Personally I would happily take money from crack cocaine dealers in
order to alleviate destitution for pecunia non olet * but obviously
Oxfam thinks that ideological purity is more important than that.
* Yes, I did have to look it up.
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Written by Dr Madsen Pirie
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Wednesday, 07 February 2007 |
African scientists feel neglected by their politicians, reports the Economist.
This may be true, but the article goes on to record some
ground-breaking work done in that continent to deal with some of its
special problems. Rift valley fever, for example, blights the life of
nomadic herders in Djibouti, Eritrea, Ethiopia, Somalia and Sudan. They
could use a vaccine.
This is what Felicity Burt, of the University of the Free
State, in Bloemfontein, South Africa, is trying to create. She has
taken a virus called sindbis, which does not cause serious symptoms,
and swapped the genes that code for its protein shell with a selection
of those that do the same job for the rift-valley-fever virus. When her
vaccine is injected into an animal, it causes the production of
rift-valley viral proteins without the associated fever. The immune
system can then learn to recognize those proteins, so that it can react
rapidly if it encounters real rift-valley viruses.
So far it works on mice, and causes sheep to produce the appropriate
antibodies, though it's yet to be discovered if it protects them.
In another encouraging development Jennifer Thompson and Edward
Rybicki, of the University of Cape Town have worked out how to combat
the maize-streak virus which in bad years can wipe out an entire crop.
Dr Thompson and Dr Rybicki's trick was to insert a modified
viral gene into the maize. This gene encodes a mutated version of one
of the proteins that the virus needs to copy itself. When expressed at
high levels in a plant infected with maize-streak virus, the modified
protein outcompetes the normal version, throwing a spanner into the
works of viral assembly.
So far it's been tested in greenhouses, and the trait has successfully
passed itself on through four generations. If field trials repeat the
success, it bodes well for the countries affected. This kind of work
helps confront the image of Africa as a helpless and dependent case. It
will be sad if predatory NGOs, anxious for scare campaigns to boost
membership fees, try to ban trade in the African livestock and crops
involved, as part of a blanket campaign against genetic modification.
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Written by Fred Hansen
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Thursday, 25 January 2007 |
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Some people suggest that the most pressing issues that threaten
western health economics, such as chronic disease or the obesity
epidemic, may vanish with the emergence of new technologies .
These five areas of rapid innovation are likely to be molecular
medicine and biometrics, nanotechnology, wave technology, fabricators,
and robotics and simulation. Soon to be realized applications are:
- Instant remote diagnosis and treatment
- Fat zapping
- Customized replacement of body parts
- Remotely activated drug dispensing
- Smart nappies
Read the following scenarios carefully. They would instantly make
redundant brigades of health pen pushers and health targets
administrators.
John, who is 25 lb overweight, walks through a device
that looks like an airport x-ray scanner. When he emerges, about 5 lb
of fat tissue has been "fried" by a laser. Through the normal purging
processes, the fat will be gone from his body in about three days. He
repeats the process every two weeks until all the extra weight is gone.
No side effects are seen apart from resizing of his wardrobe.
Jane, who has hypertension and diabetes, has a barely visible radio
frequency chip implanted just below the skin on her upper arm. This
chip simultaneously monitors and transmits data on her heart rate,
respiratory rate, blood pressure, and concentrations of blood sugar.
The data received in two places – a remote monitoring station in her
general practitioner's office, and an implanted pump that is linked to
her circulatory system and to an external reservoir of drugs that can
be drawn down as clinically indicated.
Previous startling technologies have been aspirin (patented 1899)
and x-ray machines (patented 1900) followed by immunizations and
antibiotics in the 1950s. The article gives other examples of amazing
new devices. It also provides you with some fascinating Web links for
more technological innovations to come:
Diane Sawyer's heart
Stereolithography
Dextroscope
DaVinci
LifeShirt
There's still one unknown question, though, regarding the effect of
these technologies on our health economies – and that is obviously the
price tag.
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Written by Blog Editor
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Sunday, 14 January 2007 |
The nternet television station, run from Central London and
involving Iain Dale, Tim Montgomerie and Stephan Shakespeare, has
already made a reputation for intelligent and lively discussion on
public policy and politics – even though it has been going only a few
months. And it is not just a video broadcaster – 18DoughtyStreet
maintains a family of politics-related blogs too.
Following feedback from viewers and bloggers, it is making the
site easier to navigate and adding extra useful content. From now on it
will be possible to replay just about all of the video content on the
station, so that if you miss a programme one evening you can watch it
another day.
Another initiative from the same stable is the launch of a new
blog, centreright.com – which will be a kind of bulletin board for
think-tank ideas, events and publications, and for links to articles
that thinkers on the centre-right find interesting or useful.
We wish them well. The face of political discussion and debate is
changing, and new media like 18DoughtyStreet are breaking the
heavyweight (and state subsidized) broadcasters’ monopoly and showing
what can be done. Watch this space; watch it now.
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Written by Tim Worstall
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Sunday, 14 January 2007 |
The Telegraph
runs an interesting and comprehensive report on the effects the banning
of advertising junk food to children will have. TV company profits
down, very little change in junk food consumption and a reduction in
innovation in the sector. As is said, why design a new product if you
can't tell anyone about it?
Reactions to this will rather depend upon an individual's view of
advertising. Is it all manipulation, persuasion, or is it simply
information? That different ads (even the same ones at different times)
can be either or both is often missed. There's also something quite
delightfully British about the actual bureaucratic decision itself.
Because the measurements of salt, sugar and so on are made using a 100
gramme sample (around 3 oz in real money) such products as raisins,
Marmite, and olive oil are also banned. The Man in Whitehall can't even
do censorship properly.
But the article also asks what the effect of the ban will be on
the food manufacturer's profits. I think it might actually be positive,
as the ban in the US on tobacco advertising was to the cigarette
companies. Much of such advertising is not so much "Try a burger" type,
but of the "try our burger, not our competitor's" type. The more of
this there is (or was) then the more the ban will increase proftis
across the sector rather than diminish them. It rather sets in stone
the current market shares, those shares that the companies currently
spend so much to defend.
I think we really should all thank our lucky stars that we are
governed so that we have just a little censorship here and there,
increasing the food company profits, in the name of protecting the
little children.
Which, by the way, it will do very little of:
One FSA study estimates that advertising has a 2 per cent influence on people's food choices..
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Written by Dr Madsen Pirie
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Sunday, 07 January 2007 |
It's introduced as a concept car, but this sometimes foreshadows a
production model, and in the case of the Volt this looks likely.
Unveiled on Sunday at the Detroit Motor Show, it marks GM's re-entry
into the electric car field after it abandoned its EV1 in the 1990s.
Ray Hutton tells us
it could be on sale by the end of the decade. It uses an all-electric
drive to do 0-60 mph in 8.5 seconds, with a top speed of 120 mph. Its
limited range of 40 miles, enough for most commuter journeys, is
augmented by a one-litre petrol engine for charging the battery. The
petrol engine does not drive the car, as do current hybrids such as the
Toyota Prius.
The Volt is "a family hatchback built on the platform to be used for
the next Vauxhall Astra," and will be much cheaper to build than the
hand-built EV1. The model is taken to indicate GM's commitment to more
environmentally friendly transport, since electricity can be generated
from many energy sources, including ones independent of fossil fuels
and with benign emissions. Its E-Flex propulsion system "can be adapted
to use bioethanol fuel or have a diesel engine or a hydrogen fuel cell
as the generator of electricity."
One rather nerve-racking feature of electric cars, including hybrids,
is their silence. Those accustomed to crossing roads by taking quick
glances and factoring in the noise of traffic can be surprised by one
of them up close and dangerous. People will have to relearn their
street awareness.
There was a documentary movie last year called "Who Killed the Electric
Car," which claimed that GM scrapped the EV1 only because of pressure
from business interests including oil companies. If that were true, it
seems strange that GM should now be unveiling what might be a more
valid and popular successor.
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Written by Fred Hansen
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Sunday, 03 December 2006 |
By the end of this month, all general practices in England are
expected to commence practice-based commissioning (PBC), which involves
the purchase of hospital care and community services. However, GPs’
response to the government scheme has been lukewarm, because it is
perceived as over-bureaucratic. To some it appears that the main
purpose is to shift responsibility to GPs in times of a financial
crisis of NHS budgets. (Though GPs absorbed a huge amount of Gordon
Brown’s spending spree of the last four years, lifting the average GP
income from 55k in 2002 to 90k in 2006.)
Others argue
that PBC looks much like a return to the GP fundholding arrangements
brought in by the Conservatives; that it does not solve any of the
problems in that system; and so it will probably lead us back to the
primary care groups model that was introduced to address those problems
– another circle.
Certainly, the additional administrative workload will be huge,
and practices will have to employ new financial managers or retrain
administrative staff. Practices will not necessarily have to
commission/purchase all the services. Primary Care Trusts, which hold
the actual money, can do this for them. But by the end of Year 3, GPs
will eventually be responsible for the expenditure of the whole budget.
Another issue could be missed appointments. The latest Developing
Patient Partnership (DDP) survey shows DNA (did not attend) numbers
have increased to eleven million for doctors and five million for
nurses in the last year to July – up one million from previous year.
This could have a knock-on effect for PBC. Since PBC will mean more
expensive procedures happening in primary care, a correspondingly
larger waste of resources would result from missed appointments.
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