An excellent outlining of the problems with ethanol and biofuels. Of course, our Masters took the decision to insist upon them before they found out anything about them. Par for the course.
As, for example, with the proposed rules about ISPs and their policing of file sharing. Not technically possible.
Looks like the euro (if it doesn't collapse first) could supplant the dollar as the international reserve currency of choice in the next decade. Not that this actually means very much of course....
John Kampfner has recently been thrown out resigned as the editor of the New Statesman. My assumption is that even the highly partisan readership of that magazine got bored of being offered inaccuracies of the following sort:
It is strange to remember that a Labour government has presided over
the phenomenal transfer of wealth and assets into the hands of the very
rich.
I could understand if he said a transfer of resources from the productive, private, sector to the less productive State one, for taxation and government spending have indeed risen over the New Labour years. But a transfer of wealth from the poor to the rich? How does that work then?
Leaving aside the sarcastic point that the poor, by definition, don't have any wealth worth taking because, by definition, they're poor?
A requirement for this to be true would be that the poor now have less wealth (and we should distinguish between wealth, a stock, and income, a flow) than they did ten years ago. There's no evidence that this is in fact true: quite the contrary, every level of society is now wealthier than they were ten years ago. So there has been none of the transfer that he complains about.
What is true is that of the growth in wealth in the past decade more of it has gone to the top of the distribution than was formerly the case. But this is a function of the way in which the benefits of growth are distributed, not a transfer from one group to another. And even there it's hardly phenomenal: in 1999 the top 1% had 34 % of the wealth in 2003 they had, err, 34% (adjusted for housing, and yes, I'm cherry picking).
I've no objection to someone complaining about the distribution of newly created wealth (I might disagree but it's a legitimate concern) but I do have an objection to someone insisting that if some have become richer then others must have become poorer: that simply isn't true, the economy and the wealth it can create are not zero sum games. All can benefit, as they have been, rather than more for some having to mean a transfer to them from others of a set amount.
Now we've put him straight all we need to work out is why this guff is appearing in The Telegraph rather than tucked away in a magazine no one reads.
44. "Business should be forced to be socially responsible."
People in business have moral obligations to others, just as teachers and lift operators and everyone else does. Nothing about the activity excuses them from these, which include behaving in a responsible way to others, and respecting their rights, too.
Business people have the additional burden which trust imposes. They engage in transactions and contracts, and have a moral duty to keep their side of the bargain. Of course they have a legal duty as well, but that is not why they behave honourably.
They already perform services to society by making goods and services available, by creating employment, and by contributing to society's maintenance by paying the taxes and levies it imposes. Some suggest that they have the additional obligation of contributing to charities and the arts, to funding neighbourhood community schemes, and to supporting causes they deem worthwhile.
Some businesses engage in such activity to boost their public relations and their reputation. If being seen to do such things makes them sell more of their product, these are legitimate business actions, calculated to improve the financial position of the company. It can be good business practice to maintain excellent employee and community relationships.
People invest in companies, lending them money in order to generate a yield from it. It is a company's duty to use that money with due diligence for the purposes for which it was lent to them. If they misapply it to themselves, we rightly castigate and even prosecute them. If they apply that money to causes they approve of, perhaps because it makes them feel good, this can be a misuse of funds lent to them in good faith. It was not lent to them to support good causes, however noble. The lenders could have done that themselves. If it aids the business it is a valid use, otherwise it is not.
Yes, tax competition does pose problems for politicians who buy votes with other people's money. Tim Worstall points out on the GI site that "if people are able to pay lower tax rates elsewhere then they might just leave and go and do precisely that." Thus the presence of more tax-attractive places restrains the big spenders. More to the point, though, as Tim emphasizes, is that tax competition brings choice and with it the opportunity for people to satisfy different preferences simultaneously.
Some prefer the greater State services (however incompetently delivered) that higher taxation brings, there are even those who prefer greater regulation. Excellent, let those who desire such things have them. And thus the point and value of having competition in such tax and regulatory jurisdictions: people get to choose which they prefer.
Of course tax competition does tend to make one choice more difficult: that of living where there are high levels of state services, but where someone else pays the taxes to sustain them.
The group, Britain's fifth-biggest bank, has taken a £280m hit on risky sub-prime loans, but that is only a fraction of the figure suffered by rivals such as Barclays, which earlier this week revealed a £1.6bn write-down.
Chairman Sir Victor Blank said the bank had benefited from its cautious approach.
Leave aside the Chairmanspeak guff that follows about high-quality sustainable results and long-lasting relationships. Knights, let alone chairmen of major banks, are not supposed to do the happy dance, sneer at their competitors and scream "Who's your Daddy!" however much they would like to. For the simple truth is that Sir Victor and his team have done exactly what the shareholders are paying them for, investing their capital so that it fructifies in a satisfactory manner while the team at Barclays were perhaps less successful and at Northern Rock, well, not successful at all.
But that's how the system works: we've not found any method better than people doing as they wish wth their own money: hiring those stewards for it that they trust. Those who turn out to be worthy of that trust prosper as do the businesses they run and those who invest in them, waxing fat off the judgement of their servants and hirelings.
Those who are careless or foolish in where they invest stand to lose their money: exactly the tonic needed for people to be careful about where they do so. Harsh it may sound, but there's nothing unfair about capitalism in this manner.
The Stern Report described climate change as "the greatest case of market failure" the world has seen. In fact the market has not failed – there is no market at all. There is no market in war, either, which some think more devastating then climate change. Markets deal with transactions, not with human behaviour in general. Where there are no exchanges, there are no markets.
Markets can prompt and regulate human activity by signals they send about scarcity and prices. They allocate scarce resources in ways that encourage people to consume less of them and produce more of them. When some resources, such as air, water, and ocean fish stocks have no price on them, there are few restraints on their use. Sometimes production causes 'externalities,' such things as pollution and noise disturbance, and the depletion of resources.
The way to have markets protect the environment is to put markets into place. If some activities contribute to climate change, there should be a price to pay for doing them. The habit of environmental campaigners of picking out relatively trivial symbolic targets such as "food miles" or budget air travel obscures the fact that agriculture, industry, and power production are among the greatest emitters of "greenhouse gases."
Markets can be introduced by putting a price on previously unowned resources. Fish quotas can be set and then traded, giving the buyer ownership of the fish and an incentive to conserve them. Tradable emission permits can discourage emission by raising the price of doing it. They raise production costs to those who emit more, and reward efficient, cleaner producers.
Markets can be used to promote the development of clean technologies by giving them a price advantage, encouraging people to produce more cleanly by making it more attractive financially to do so. Markets can protect the environment if they're properly introduced.
The BMA report this morning is getting something of a slating for its, umm, how to put this, ignorance of some of the finer points of economic analysis. More here.
On the subject of bansturbation, the effect of the smoking ban on both Working Men's clubs and the variety circuit. Many more unintended consequences than we were told there would be.
Excellent fun about Jerome Kerviel. Apparently he was over €1 billion up at the turn of the year. Might his bonus have influenced him?
My, my. Given the choice it looks like people move to States with higher economic freedom and lower tax rates. More here.
Perhaps not all that surprising though: large numbers have been known to try and leave this country.
A description of how government actually works to spend that tax money: policy first, then evidence.
42. "A truly compassionate society would devote a much larger share of its wealth to the less fortunate."
Individuals show compassion, not societies. If individuals wish to give away a larger share of their wealth to the poor, this might be compassionate. It is not compassionate, however, to force others to do this.
Giving them a larger share of wealth is not necessarily the best way of improving the lot of the poor, because that wealth is not a fixed amount. Poor people might do better if the rich are permitted to get even richer, thereby increasing the total wealth available. It might be that a growing economy is a surer way of giving the poor access to betterment than any attempt to give them a larger share of a smaller pie. This would not please the poverty lobby, who try to define 'poverty' in terms of incomes below 60 percent of the average. This is inequality, not poverty, and can mean describing as 'poor' people who have cars and take holidays.
Many of us do not want to live in a society which tolerates deprivation, or is complacent about those who don't get adequate nutrition, healthcare, or education for their children. But having a sufficiency of such things is not about equality; it is about removing the causes of suffering and trying to redress the circumstances of inadequate provision.
The less fortunate might do better if society provides chances and opportunities for them to improve their lot, rather than turning poverty into pauperism by making them depend permanently on state handouts. A safety net to guarantee a minimum living standard is one thing. To redistribute more wealth from the successful to the less fortunate is another. It might not be the best way of helping them, and it might, in the process of trying, undermine the incentives by which people better themselves and their society.
The Institute of Chartered Accountants in England and Wales publishes a quarterly survey of business confidence, and the current report is the third in a row that makes rather depressing reading. Business confidence is, of course, down. In fact, it's the lowest it's been since the surveys started in early 2004.
The number-crunchers say that business confidence has sunk faster than the overall economy – which may just indicate the effect of a gloomy media, and the complete collapse of confidence in the financial sector. But however well the real economy is holding up, if people are too nervous to make investment decisions now, that can't be a good sign for the future. The accountants are predicting very low economic growth for 2008 – though they think that preparations for the Olympics, interest rate cuts, and consumers dipping in to their savings will spare us a true recession.
Genetically modified (GM) plants are helping to adapt to climate change. This is mostly because of drastically minimizing water use compared to non-GM plants. Worldwide 1.4 billion acres are already cultivated with DNA-modified crop varieties in 22 countries. However the same agency that took the lead in climate change alarmism is now seriously considering a moratorium on all field-testing and commercialisation of GM tress. This comes on top of already extant heavy-handed over-regulation that stifles innovation in biotechnology. According to a new paper from the Hoover Institution the UN may actually be worsening the global environment with its policy:
Irrigation for agriculture accounts for approximately 70 per cent of the world’s fresh water consumption… so the introduction of plants that grow with less water would allow vast amounts to be freed up for other uses. Especially during drought conditions…even a small percentage reduction in the use of water for irrigation could result in huge benefits, both economic and humanitarian.
GM crop varieties could accomplish exactly that if only the UN would give up its unscientific, anti-innovative approach to regulation of biotechnology. With its numerous policies and programs the UN inhibits the development of important tools indispensable for the adaptation to a changing climate. Finally, DNA technology does not require new resources. It’s all there. The UN needs simply to shed its hypocrisy, get out of the way of farmers and plant breeders, and hand the mettle over to the market.
With speculation about Tony Blair becoming EU President intensifying, it's time to take another look at William Hague MP's wonderful take on the subject. Junksmith is almost beginning to feel sorry for Gordon Brown...
Much is being said about the Granite securitisation and Northern Rock. Here's something actually sensible on the subject. And here's the FT taking that something sensible and expanding upon it.
Something else deeply unsensible: how can you write an entire chapter of a book on inflation without mentioning the two words "money supply"?
Yet more: moves afoot to harmonise EU taxation: the apparent logic is that having tax competition will, umm, allow people to compete.
Answering George Monbiot's accusations. If only George understood the subjects he was writing about...
The Precautionary Principle is often likened to Pascal's Wager: here's why it isn't.
Ever wondered why the amount ripped from you untimely in taxation only ever goes upwards? Because you're usually paying through the tax system for people who lobby for higher taxation.
The Adam Smith Institute is the UK's leading innovator of free-market economic and social policies. Politically independent and non-profit, the Institute promotes its ideas through reports, briefings, events, media appearances, and its website and blog. For further information, click here.
Join our email list
Keep up-to-date with the latest events, reports and information from the Adam Smith Institute by joining our fortnightly email list. It's free and you can unsubscribe at any point. Just enter your email address here:
The 
Genetically modified (GM) plants are helping to adapt to climate change. This is mostly because of drastically minimizing water use compared to non-GM plants. Worldwide 1.4 billion acres are already cultivated with DNA-modified crop varieties in 22 countries. However the same agency that took the lead in climate change alarmism is now seriously considering a moratorium on all field-testing and commercialisation of GM tress. This comes on top of already extant heavy-handed over-regulation that stifles innovation in biotechnology. According to a 
