Against reform of the House of Lords

This probably won’t be all that popular among those who insist that democracy is the be all and end all of a political system. But we think that the current proposals to reform the House of Lords are a bad idea:

Rogue peers should be subject to immediate suspension from the House of Lords when scandals break, a senior Labour peer has said.

Lord Soley, a former chairman of the Parliamentary Labour Party, made the call in a letter to Lord Speaker Baroness D’Souza in the wake of the allegations against Lord Sewel.

Well, no. we don’t kick an MP out of the House of Commons because a scandal has broken. They do have to leave if they are found guilty of a criminal offence and are then sentenced to more than a minimum amount of jail time. And then there’s this:

Peers should be forced to retire when they reach old age to ensure the House of Lords remains “fit for purpose”, the Lord Speaker has suggested as she ordered a review into the code of conduct.
Writing in The Daily Telegraph, Baroness D’Souza warns reform is “vitally necessary” if the body wants to retain public support in the wake of the Lord Sewel scandal.

Again, no, we are not persuaded.

It’s entirely possible to have a very different conversation about whether there should be a House of Lords at all, we should have a unicameral system, one with an elected second house, one selected by sortition, any number of variables. But the real point of a second house at all is to have one that acts as a limit upon the enthusiasms of the mob that directly elected politicians are subject to. And for that limiting to be effective there must be no way to remove those not convicted of some criminal offence of some specific level of gravity. For, given how many things are illegal these days there’s absolutely no one who cannot be accused of breaking some law or another. And wouldn’t it be remarkable if it were those who were being particularly bloody minded about opposing the executive of the day who were so accused?

After all, at least part of this outrage about Sewel was that he was doing something entirely legal: consorting with ladies of negotiable affection. Something that really is entirely legal in this land, however much it might not be to your or our taste.

Being able to throw peers out because they were a bit doddery, or because a newspaper disapproved of their activities, would greatly weaken the House’s ability to be independent of the whims of the passing society. And given that that’s what they’re there for, to limit the impact of passing fads, we oppose such a change.

Young Writer on Liberty 2015 Winners

We’re delighted to announce the winners of our 2015 Young Writer on Liberty competition, and will be showcasing some of their work in the coming days.

The theme of this year’s competition was ‘The road not yet travelled: Three paths the next government should take for a freer United Kingdom’. Entrants wrote three, 400-word articles on this theme, each outlining a policy proposal to make the United Kingdom richer, freer and more prosperous.

We received dozens of entries and competition was fierce with incredibly high standards. This year for the first time, entries were spilt into ‘Under-18′ and ’18-21′ categories, with a winner and a runner-up in each.

The runner-up of the Under-18 category is Alan Petri, and the winner of the Under-18s is Theo Cox Dodgson. The runner-up of the 18-21 category is Tamay Besiroglu, and the category winner Theo Clifford.

Runners-up will have one of their entries showcased on the ASI blog tomorrow, and category winners will have all three of their pieces posted over the week.

Category winners will also receive £150 prize money, whilst both winners and runners-up will receive boxes filled with liberty-related books.

Check-in next week to read the entries!


What a pity Professor Krugman doesn’t explore this logic completely

We have long been making the point that there’s two aspects to Paul Krugman. The outstanding economist and excellent essay writer, then there’s the New York Times columnist rather in the tank for one specific political view of the world. that second world being where government tells people how to live their lives better. But there’s still flashes of the underlying economist around:

Politicians who preside over economic booms often develop delusions of competence. You can see this domestically: Jeb Bush imagines that he knows the secrets of economic growth because he happened to be governor when Florida was experiencing a giant housing bubble, and he had the good luck to leave office just before it burst. We’ve seen it in many countries: I still remember the omniscience and omnipotence ascribed to Japanese bureaucrats in the 1980s, before the long stagnation set in.

We see this in the development economics of Ha Joon Chang and others too. S Korea grew so therefore the policies that we like that they followed must be implemented elsewhere so they can have growth. Our point is that the reality is rather different:

This is the context in which you need to understand the strange goings-on in China’s stock market. In and of itself, the price of Chinese equities shouldn’t matter all that much. But the authorities have chosen to put their credibility on the line by trying to control that market — and are in the process of demonstrating that, China’s remarkable success over the past 25 years notwithstanding, the nation’s rulers have no idea what they’re doing.

We tend to think that no government ever knows what it is doing. This is partly Hayek, pointing out that it can never have enough information to plan things, partly our own observations of how governance actually works in detail. We know lots of the people who do actually run the government. Some of them are even very nice people but we’d not describe any of them as the Wise Solons who know the answer to every, or even any, of the nation’s problems.

So what have we just learned? China’s incredible growth wasn’t a mirage, and its economy remains a productive powerhouse. The problems of transition to lower growth are obviously major, but we’ve known that for a while. The big news here isn’t about the Chinese economy; it’s about China’s leaders. Forget everything you’ve heard about their brilliance and foresightedness. Judging by their current flailing, they have no clue what they’re doing.

China’s stunning growth since 1978 is not an illusion. The country has gone from being roughly as rich as England in 1600 (as measured by per capita GDP) to about the UK in 1953, 1955 or so. That’s pretty good for simply stopping the adherence to Marxist and Maoist idiocies. But that’s what it was: the rulers stopped following idiot policies.

And thus why we are minarchists. There are indeed some things that both must be done and must be done by government. But given the paucity of knowledge, of competence, among those who would govern that’s all that government should attempt to do. The only further ambition they should have is to not do stupid things. Which, given those who become the governors, means nothing over what must and can only be done by government.

Yes, we really do need to start paying kidney donors

We have long been pointing out that the solution to the shortage of kidneys available for transplant is to offer to pay those donors who might be willing to donate one. Adter all, it’s not exactly a new insight that increasing prices brings forth more supply. And the sort of levels of payment necessary are in fact cheaper than the cost to the NHS of dialysis. The New York Times has a nice piece on how this works elsewhere:

Iran’s system has many deficiencies — not least that the very idea clashes with ethical norms observed in many other countries — and the program varies greatly from region to region. But its chief advantage is this: People who need kidneys get them rapidly, rather than die on the waiting list.

In the vast majority of cases, donors know in advance what they will be paid and receive appropriate screening and good medical care before and during the operation. And by getting patients new kidneys instead of keeping them on dialysis, the society saves a lot of money and avoids much misery.

Whatever anyone’s doubts about whether people ought to be paid for organ donation there’s no doubt that it does actually work.

“We should ask ourselves why some people find accepting money to donate a kidney and save a life repugnant, but accepting money for being a policeman or miner or soldier — all of which are statistically riskier than donating a kidney — is O.K.,” said Mohammad Akbarpour, a research fellow in the Becker-Friedman Institute of the University of Chicago. “Is there a fundamental difference?”

It could be that people simply don’t understand how low that relative risk is.

Commercializing kidneys calls up images of a filthy, makeshift clinic, a rich traveler with a wad of cash, a desperately poor donor tricked into selling an organ, and a broker who keeps 90 percent of the money. India, Pakistan, the Philippines, South Africa and Indonesia, among other countries, are known for this type of trafficking in organs, and wealthy Americans, Israelis and Europeans are known for buying them.

But in Iran, the legal market pre-empts these abuses. To prevent kidney tourism, recipients in Iran have to share the nationality of their donors, and Iran recently banned kidneys for all foreigners except refugees in Iran from Afghanistan. “The rate of people who die in surgery is much, much lower in Iran than in other developing countries — all the transplants are under supervision,” said Farshad Fatemi, an assistant professor of economics at Sharif University of Technology in Tehran, who studies the kidney market. “If this regulated market weren’t in place, we might have organ trafficking here. We might be more like India or China and have illegal clinics, a black market where nobody looks after patients and donors.”

And there we have something that we have again been saying repeatedly. Markets are going to exist where human desire is great enough. It happens with sex, it happens with drugs, it is happening with organ transplants. In all three we argue that said market will be safer, will work better, if the activity itself is legal so that regulation, if that’s necessary, is possible. Insisting that these things are illegal is part of what makes them so dangerous.

So, given that we’ve got the example of the one and only place in the world where people do not die waiting for a transplant, when are we going to institute our own paid market in them? For it really is true that people die, in great pain, each and every year simply because of some squeamishness about introducing filthy lucre into the proceedings.

As ever, there really are some thing so important that we must have markets in them.

Milton Friedman – a birthday tribute

Milton Friedman was born on July 31st 1912.  He was one of the two most influential economists of the 20th Century, the other being John Maynard Keynes, and he promoted monetarism as an alternative to Keynesian orthodoxy.  His economic scholarship was unimpeachable, and won him the award of the Nobel Memorial Prize in Economics in 1976.

He was no less influential in promoting free market economics as an alternative to the once fashionable mixed economy consensus that prevailed in the post-war era.  He did this at a popular, as well as at a scholarly, level, with a series of articles in Newsweek and other popular journals.  He was an excellent communicator, able to explain complex ideas in simple, easily understood language.  His “Capitalism and Freedom” remains a classic to this day, still relevant, still persuasive.

His TV series, “Free to Choose,” together with the book he co-authored with his wife Rose, were immensely popular, and were hugely influential in gaining popular support for the economics of free enterprise, choice and incentives, and a widespread skepticism of government intervention.

He pioneered many ideas that eventually gained traction, including an end to military conscription in the US, floating exchange rates, and school choice amongst many others.  His monetarist views influenced the Federal Reserve’s response to the 2008 financial crisis.

He was a supporter of the Adam Smith Institute and took a keen interest in its work in translating sound economic ideas into viable policy options.  He addressed ASI meetings, and regularly chatted with its members at meetings of the Mont Pelerin Society, which he continued to attend until his death in 2006.  He went out of his way to help others, to support student groups and to lend his wisdom and advice to free market organizations.  He even acted as my referee when I applied to Cambridge, with a hand-written note endorsing me.

He was engaging, personable and likeable, nearly always with a smile on his face and a twinkle in his eye as he corrected economic nonsense from his opponents.  Happy birthday, Milton; we miss you.