Adam Smith Institute

In a recent article in the Sunday Times property section, Phil Spencer called for the barricades to be stormed. He took great offence (no pun intended) to the fact that communities were erecting security fences and creating their own private, secluded worlds seemingly cut off from the real world that you, he and I inhabit. What he fails to understand is one of the deep psychological underpinnings of human nature: the need to surround yourself with those of a similar mentality, especially with regard to such things as property, trust and respect. Some people feel the need to wall themselves off from the threats that the wider community now carries, and in a free sociey, why shouldn’t they?

Mr Spencer claims that these gated communities separate rich from poor, cut off once publicly accessible roads and undermine law and order. But the reason for cutting off these roads to public access is that many people are failing to respect the private property and the lives of others, while the state is failing in its primary duty to provide security and administer justice. Unable to rely on traditional institutions, the residents of gated communities choose to protect their personal domain in other ways.

Throughout our lives we consciously erect barriers to others based on previous experiences and similarly exhibited character traits. We do so to protect ourselves from wider harm, trusting those with an equivalent outlook. Attempting to create a free, respectful and trustworthy society of individuals through political interference steeped in the ideas of political correctness and multiculturalism has failed. The gated communities are the burgeoning pockets of resistance, the resting place of decent civil society free from the cloying fingers of statism. Society would be stronger now if political interference over the past 50 years had not been so pervasive.

A young brunette went into the doctor's office and told him that her body hurt wherever she touched it.
"Impossible," said the doctor. "Show me."
She took her finger and pushed on her elbow and screamed in agony. She then pushed on her knee and screamed, pushed on her ankle and screamed, and so on. No matter where she touched, her agony was apparent.
After some thought, the doctor said "You're not really a brunette, are you? You're really a blonde".
She sheepishly admitted that indeed, she was a blonde.
"I thought so," said the doctor. "Your finger is broken."

This post contains the speech that Alistair Darling should have given. Think how his popularity would have risen if he had told the simple, plain, unadorned truth?

As neat an explanation of the Law of Unintended Consequences as you are likely to see. Further discussion and what it means for policy decisions here.

For example, taxes don't stay where they're put. 

Was that huge Soc Gen loss really caused simply by a rogue trader? 

Why Bill Gates' speech at Davos wasn't just simplistic, but wrong. Wrong in analysis and wrong in suggestions for policy. 

So why is the US Government trying to offer everyone a payday loan?

And finally, why the Morning Star headlines get reviewed on the telly and  which would you prefer with your New Statesman subscription? The Chavez t-shirt or the Fidel book? 

16. "Equality is more important than freedom."

No. Freedom is more important. It is not a value which competes with others, but the source and condition of all values. Freedom gives people the chance to express themselves and their individuality. It is what makes them human. Animals can be cared for, fed and sheltered. Human beings are not pets or domestic livestock to be protected. They make moral decisions and act on them. They face the consequences of their actions and acquire responsibility and moral growth. All of this requires freedom.

People are not equal and never will be. Life would be dull if they were. They differ in strength, size and intellectual power. They differ in looks and in character. They differ in talent, and in athletic prowess and musical ability. They differ in the value of the services they can render to their fellow humans. If we pay them equally for services of unequal value, we lose the signals which tell people where to direct their efforts.

We can and should choose to make people equal before the law, and to say that they should all be treated equally by it. This expresses not a fact of life, but a determination on our part to create a just society and to respect the rights of all who respect the rights of others. The law looks at the criminal abuse of people's rights, rather than at the criminal, and prohibits it no matter who does it.

Some point to what they claim is a trade-off between people's freedom to live as they wish and their health and well-being. This is completely false, for without freedom there is nothing to trade. We might choose immediate pleasure at risk of long-term consequences, but that is not a choice between freedom and other things; it is a choice only made possible by freedom. Without that choice we are no longer autonomous beings.

The EU Commission has decided to increase the use of biofuels as part of Wednesday's €60 billion (0.5 percent of Europe’s GDP) plan to 'save the world'. The goal is that biofuels will account for 10 percent of all European energy needs by the year 2020.

Given the extensive bad press that biofuels have recived, this decision makes little sense. The environmental damage of biofuels is fast becoming clear. It often takes more energy to create biofuels than they produce – which means they create more emissions than they replace. They are also inefficient: the crops needed to fill the tank of a 4x4 with biofuels could feed someone for a year. Perhaps most importantly, biofuel production drives up food prices, worsening the plight of the world's poor.

The intransigence of the Commission in continuing to support biofuels in the face of the criticism is testament to its continued attachment to the European farm lobby, and its failure of it to engage with the outside realities of the world. This "Fortress Europe" mentality is also refelcted in its protectionist decision to inhibit the likely response of industries wishing to move out of Europe to avoid excessive EU regulations.

In sum, the Commission’s plan consists of limiting the opportunities for people in poor countries to work their way out of poverty, whilst continuing to undermine the possibility of Europe benefiting from free trade with them. Just as they are demonstrably damaging the environment they claim they are seeking to protect, the EU's member states are decreasing Europe’s economic potential through excessive taxation (thus making technological advances less likely). Saving the world? No, quite the opposite...

It's not just the population of the UK that faces the prospect of their private details being (mis)handled by the state machinery. Our American cousins are being harassed into accepting REAL ID, a standardization of driving licenses across the United States and the creation of an interlinked database with access enabled for all those who work for the various levels of all government within the US. In other words: a national identity card.

The recent pronouncements from the Department of Homeland Security make it very clear that unless certain actions are undertaken then access to services will be withdrawn. States have to apply for a waiver so that they can seek more time to comply with this unnecessary piece of tacked-on legislation from 2005. If States don't, then their residents will find themselves holding valid drivers licenses but unable to access federal services or, more importantly to the majority of Americans, to use their licenses' as identity when flying. The DHS will ensure that their employees will persecute any travellers who choose not to sign up to REAL ID.

If you give the keys of a brewery to an alcoholic there will be trouble, and with a government drunk on power there can only be trouble in store for Americans. As we Brits have clearly seen over the past 12 months the state is utterly useless when it comes to handling anything involving our private details is . Time after time they've lost documents, disks and laptops, compromising the personal data of their citizens. Yet if we hope to have any day-to-day functionality then we have to comply with crass legislation involving disclosure of more and more of our details.

Here's hoping that enough States stand up to this outrageous piece of legislation and protect their citizens from the overbearing federal government. The ACLU’s page can be found here: www.realnightmare.org.

With stock markets in decline all round the planet, now's the time to invest, and for that you need The Harriman Book Of Investing Rules: Collected wisdom from the world's top 150 investors by Philip Jenks and Stephen Eckett. At our online bookstore it's £13.99 + postage, nearly a third off the normal price.

The tactics, strategies and insights relied on by 150 of the world's most respected financial experts are revealed in this short, digestible book, which is a no-nonsense list of investment do's and don'ts from the investment elite. Good luck!

Buy it here from the ASI bookstore. 

Today's jaw dropper is the back and forth between Dan Hannan and The Devil (caution, very sweary indeed) and again on how those charities that *support* the Foreign Secretary on the subject of the EU constitution are all recipients of money from either the EU or the government which the Foreign Secretary is such an adornment to. We could do with Mandy Rice-Davies to tell us that thy would, wouldn't they? In fairness, EU Referendum had this story last week. The good news is though that our charities are indeed honest.

A plea for help: can someone plase provide the case in favour of the EU itself? 

In defence of high salaries. Someone really does need to remind certain economic journalists of the first word in their job description. 

Did you think that the NAFTA clauses concerning removal of the sugar industry protections were really going to be implemented? No, of course not, you're not that naive are you? 

If you want to know what the Federal Reserve is going to do next, try reading Ben Bernanke's old research papers.  

One slightly different method of solving the shortage of organs for transplant. 

And finally , political joke of the day and advice for budding luvvies (on which point Laurence Olivier made a film with Dustin Hoffman, who asked Larry for advice in portraying his character."Why not act?").

Dan Lewis of the Economic Research Council makes some good points about recession worries in the Yorkshire Post. The last time we were in this pickle, he says, was 2001 - but the then Chancellor of the Exchequer, Gordon Brown, had a full Treasury thanks to a long period of growth initiated by the Conservatives, and he used it to ride out the trough.

Fast forward to 2008, however, and we find ourselves in exactly the reverse position. Brown simply failed to turn off the public expenditure taps, so we have a budget deficit of 3.1 per cent of GDP – inexcusable after 15 years of growth. What this means is that there's just no money for a Keynesian expansion this time to stave off recession. Just a few days ago, we found out from the Office for National Statistics, that net borrowing in the financial year to December was running at £43.6bn – a staggering £11bn increase on the year before. 

It's worse than even that, Dan. By 2001, the UK's postwar economy - centralized, state controlled, bureaucratic, high-tax inflation-ridden - had been largely opened up to market forces by Mrs Thatcher's reforms. Lower taxes and greater growth enabled the national debt to be reduced. But now, after ten years of Gordon Brown, there's even more top-down centralization, business is strangled and controlled by a spaghetti of regulation, civil-servants intervene everywhere, taxes have risen hugely and inflation is on the way up.

Lewis might well be right that the UK can avoid a recession - two quarters of negative growth - and I hope he is. But I wouldn't start from here.

Recent official documents suggest that the UK government's unpopular Identity Card scheme will not come into effect until 2012, two years later than planned. That, of course, is comfortably beyond the date when the next election has to be called. And the way the economy is going, Gordon Brown is going to need all the time he's allowed before he goes to the voters.

It reminds me of a line from George Eliot:

"An election is coming. Universal peace is declared, and the foxes have a sincere interest in prolonging the lives of the poultry."

The most ridiculous story in the news has to be the move by councillors in the town of Rochdale to decrease the number of holes in saltshakers at fish and chips shops from 17 to 5. The move has been rightly condemned as a proliferation of the "nanny state" and a waste of taxpayer's money running to thousands of pounds.

Added to this is another important concern that should be raised: the risk of your chips going cold in the process of trying to get a decent amount of salt on them.

So, if you, as an employer, created an easy to read (even amusing) handbook on how everyone should behave in the worldplace (Rule 1: use your best judgement, Rule 2: see Rule 1), what do you think would happen next? Correct, you would expect to get sued, wouldn't you?

Four myths about the US stock market refuted.

50 things learnt in 50 years on the planet (Netsmith liked the idea that you don't argue with policemen but you can fight City Hall.)

Hillary Clinton v. Milton Friedman. Not all that difficult to see who was the liberal. 

A quick note on how TV journalism works and another on how politics does. 

Explaining the achievement gap in the US: blacks (are we supposed to say African- Americans still or has the style changed again?) are caught in a socialist economy and if they were brought into the capitalist one that whites inhabit the gap would reduce and or disappear. 

And finally, inflation is everywhere, even in Rambo films. And look! A graph! 

Liberal-Democrat leader Nick Clegg has declared that he and his party will NOT support a referendum on the Lisbon Treaty, the one declared by many to be almost identical with the EU constitution voted down in France and the Netherlands. This is hardly surprising since I remember him on television at the time saying the "no" votes didn't count "because polls have shown that the French and Dutch voters didn't know what they were voting about."

So fundamental a shift in power clearly requires the consent of the British people. The continental tradition has long been one in which the political class is left to the business of government, while ordinary people get on with their lives, occasionally rioting to draw their grievances to the attention of their ruling élites.

Britain, by contrast, has enjoyed a more vigorous democracy, aided perhaps by a voting system that makes it easy for people to turf out governments, but mostly because of cultural and historical differences. It is a pity that Nick Clegg has chosen to ally himself with the continental style of 'ruler knows best.' Some had hoped he might head his party back toward liberalism and away from the statism it has embraced in recent decades. Alas, it is not to be, and marks a lost opportunity. There's something about European political union that makes otherwise sane politicians lose their reason. And their values.

I share Madsen's disappointment with Nick Clegg's refusal to back a referendum on the Lisbon Treaty (or EU Constitution, as honest people call it). Internationalism may be an important part of the Lib Dem creed, but there isn't much in the treaty that I would describe as 'liberal'. And it's strange that while the Lib Dems rightly back devolving more power to local government and individuals, they also support giving Brussels ever greater control over our lives and the policies that affect them.

On the other hand, Nick Clegg also made a very promising announcement on the future of the NHS yesterday, saying he would replace central government targets with 'personal entitlement's to high-quality care. A 'patient contract' would guarantee service and give people the right to private treatment if maximum waiting times are exceeded. As he put it in a Telegraph article, "That's how it works in Denmark – not to undermine the public system, but to guarantee individual care."

Quite so. Public services, in a sense, represent a contract with the public. In return for paying taxes, you are entitled to certain services. The trouble now is that the contract is neither explicit nor enforceable. If you get shoddy service in the public sector, there is not much you can do about it. You are certainly not going to get your money back. An enforceable patient contract, with an escape mechanism to the private sector, changes things. It ensures a high level of service for the individual, and it forces the public sector to raise its game.

Of course, we have been advocating this kind of thing for years (see Blueprint for a Revolution, for example) but it's always nice when politicians realise you are right. David Laws MP, the man in charge of Lib Dem public service reform policy, has promised radical thinking across the board, so let's hope there is more of this to come...

Yet again, the state is trying to assume control over our bodies. Last week it was Gordon Brown’s 'presumed consent' for organ donation, this week it is 'specific consent' over tissue being used for stem cell research.

The Human Fertilisation and Embryology Authority's bill would require specific consent from those whose tissue would be used for stem cell research, regardless of the date of tissue donation. That may sound reasonable, but as a letter to The Times from twenty-nine top stem cell researchers (including three Nobel laureates) put it:

…many existing cell and tissue samples and cell lines were donated, for any research purpose, by patients (now untraceable) with particular diseases, before this sort of research was even imagined. These cells have been well characterised over many years, or have unique properties and may therefore be the best samples to use for the derivation of embryonic stem cells. Such stem cell lines would be of great value in understanding how diseases develop, as well in the search for therapies.

Clearly people donating tissue or their entire bodies are interesting in progressing science and healthcare for the sake of others, but HFEA's proposed legislation will require a new bank of tissue will need to be created, costing hundreds of thousands of pounds, and more importantly – time. The bill also blocks any donations from children, regardless of consent, which means that some scientists whose research has already been approved will not be able to proceed.

Baroness Royall has told the House of Lords that ministers will reconsider the bill, but that they could not accept the amendments put forth by Lord Patel of Dunkeld, the chairman of the UK Stem Cell Network Steering Committee:

We believe the use of their genetic material to create cloned embryos or human admixed [interspecies] embryos is exceptional and requires exceptional consent.

One week consent is presumed, the next it is specifically needed. It seems as though the government can’t make up their minds about anything.