Academic freedom needs to be protected

6527

academic-freedom-needs-to-be-protected

The London School of Economics doesn't care about academic freedom. This is the only conclusion that I can draw from its reaction to the LSE academic who wrote a blogpost for Psychology Today suggesting that “black women are... far less attractive than white, Asian, and Native American women”, and that there was an evolutionary reason for this. Satoshi Kanazawa is being “investigated” by the university authorities and the LSE students’ union has called for him to be sacked.

Kanazawa isn't being attacked for distortion or plagiarism – true academic crimes – but for being insulting. This Guardian piece criticises him for relying on surveys to “show” that black women are less attractive. Very well, but this is a criticism of academic psychology in general, not Kanazawa himself. I suspect that his methodology would have fewer critics if he had been arguing that tall men were more attractive than short men. (Though, as a short man, I strongly dispute this assertion.) 

For what it's worth, I think Kanazawa misunderstands evolutionary theory: attractiveness is shaped by the people doing the sexual selection, so it makes no sense to ask who is "more" attractive – the question is, "to whom"? Beauty is in the eye of the beholder. 

The second most-read story on the Telegraph’s science section yesterday was “Women who lose weight more attractive than their slim counterparts”. Where was the uproar about this? There is no substantive difference between making a claim like this on the basis of weight and on the basis of race. The crime that Kanazawa committed was to talk about the "off-limits" topic.

Why is this so important? Because it shows that the LSE is intolerant of politically sensitive research topics and will “investigate” and possibly sack an academic who does academic work that is offensive or unpopular. What's the point in a university if it isn’t a place where academics and students can be controversial and say things that insult people? Evolutionary psychology, especially, is an extremely controversial and relatively new field. It is critically important that we protect it from people's feelings. 

Kanazawa may well be wrong, but that is beside the point. If academics aren't free to study and write about unpopular things, their value is greatly diminished. And for what – to spare people offence? Sometimes those unpopular things are both correct and important, and it isn't worth losing those just to avoid insulting people. Unfortunately, the LSE’s disregard for academic freedom has sent a warning to any future academic who considers talking about a controversial topic – "watch your back".

Oxfam is wrong about food prices

6525

oxfam-is-wrong-about-food-prices

Questioning Oxfam is a bit like questioning Bambi. But if its claims risk creating hunger, they need to be addressed. In its new report, Growing a Better Future, Oxfam pleads for more government intervention to alleviate rising food prices. It predicts food demand will increase by 70% by 2050, and food production only by 1% by 2020. Throw in global warming and you've got enough cataclysmic predictions to make a few headlines.

Predictions linking scarcity to calamity are old hat – the Club of Rome’s 1972 Limits to Growth report springs to mind. As a good Catholic boy I was taught this by my Religious Education teacher in school. (I also know all about the ringing success of Julius Nyerere’s communist villages from the same source.) The Limits to Growth predicted the imminent collapse of life on earth because of rising demand and no production increase. Sounds familiar? It even came up with years in which certain raw materials would run out. Didn’t you know that oil ran out in 1992? Today’s report by Oxfam proves that doomsday neo-Malthusianism has not gone away.

Contrast the prophets of doom with the progressive optimism of free marketeers. Leaving people free leads to ever greater inventions, ever increasing production, and an ever improving standard of living for the multitudes. And yes, it applies to food production, too.

The free market feeds the world. Market prices are key: when food prices go up, people switch to alternatives or re-arrange their priorities; and investors are incentivised to increase production. It is the best method to allocate scarce resources in the most efficient manner for the greatest number of people. Yes, it is as simple as that.

Drought? The market ships the food. Poverty? The market produces cheap food in abundance. Increased food prices? Entrepreneurs all over the world jump on the band-wagon and increase food production to make some money, which makes the price go down.

Oxfam believes government intervention can do better. State intervention in food production has been tried before – in Soviet Russia and Mao’s China, where it was not exactly a roaring success. But when interventionists are on the attack no historical facts must stand in the way. Oxfam pleads for more state aid to small farmers. They seem uninterested in such trifles as economies of scale or efficiency. But they should be: relying on small farmers to provide the world with food guarantees worldwide hunger.

The Oxfam report calls for transparency in commodities and regulation of futures markets. But futures markets are precisely where farmers can insure themselves against a bad harvest! Commodities markets are where enterprising individuals take risks and make or lose money in the business of providing food when and where there is demand. Multiple producers guarantee that there is never a monopoly.

The report calls for controls on the fluctuation of prices. Price controls have never worked, and always create shortages: producers are simply not incentivised to produce anymore. Price controls dry up supply and create a black market where the poorest are even worse off.

However, on one point Oxfam is right: it wants to end policies promoting bio-fuel. This is a form of government intervention which subsidizes one sector, energy, at the expense of another, food. This state intervention should indeed be abolished, so we can return to the only successful method to feed the world: the free market price mechanism.

It’s sad that people whose business it is to alleviate hunger and poverty hark back to the failed interventionism of yesteryear. There is an alternative: freeing up people by introducing free foreign ownership, allowing free trade, and abolishing all agricultural subsidies.

Asking questions about minimum wage

6524

asking-questions-about-minimum-wage

Bryan Caplan asks two questions to minimum wage supporters:

1. If the minimum wage is a good idea, shouldn't unpaid internships be illegal as well? If not, why not?

2. Name the main arguments in favor of the legality of unpaid internships. Aren't all of them equally good arguments for allowing people to work for wages greater than zero and less than the minimum wage?

I suspect that quite a few minimum wage supporters actually do oppose unpaid internships. The nonmonetary returns from work – experience – are intangible, leading many to assume that one party is being exploited. This is incorrect. Wages are a product of skills, so if an unpaid intern gains valuable skills they may be increasing their future earnings. Consider how competitive unpaid internships with financial companies are – getting one almost guarantees high earnings in the future.

To Bryan's questions, I would add two more:

– An excess of supply in labour is usually called unemployment; minimum wage supporters deny that minimum wage laws create unemployment. What other goods can have a price floor set above the market price without creating an excess of supply?

– Why don't you want minimum wage to be £20/hr, or £100/hr, or £1,000/hr? If wages can be set by government without any ill effects, why not solve poverty simply by raising the minimum wage?

Tax Freedom Day 2011

6522

tax-freedom-day-2011

Today is Tax Freedom Day – the first day of the calendar year that Britons stop working for the state and start working for themselves. This year, we've worked for a full 5 months this year to pay their taxes, with every penny earned in the UK between January 1 and May 29 taken by the taxman to support government expenditure.

· Britons have worked 149 days to pay their taxes in 2011 – three days longer than in 2010.

· Regional figures reveal that Londoners have to work the longest to pay off their income tax burden (51days) whilst the Welsh spend the least time paying their income tax (35days)

· UK income taxpayers would have to work for almost a year and a half with all their money going to the government to pay off our national debt.

This means that Tax Freedom Day, the day when people stop working for the government and start making cash for themselves, will come on May 30 in 2011 – 3 days later than in 2010. The main reason for this is that the government has raised VAT, in order to help reduce the UK’s record budget deficit.

New calculations by the ASI also reveal the worrying extent of the UK’s debt. Our burden of debt is so great that UK income taxpayers would need to work for nearly a year and a half (525 days) - with their entire wage packet going to the government, and not a penny being spent on public services – to pay off the national debt.

Dr Madsen Pirie, President of the Adam Smith Institute, identified the linkage between the lateness of Tax Freedom Day and the government’s attempt to tackle the deficit and UK debt: “The last government left an appalling legacy. Its reckless spending has driven Britain into record levels of debt that threaten the lives and happiness of future generations. Bringing down that debt has to be an absolutely urgent priority. However it isn’t enough to merely cut spending. We need targeted tax cuts to encourage economic growth.”

Sam Bowman, Head of Research, added: “Tax Freedom Day underlines the huge burden of government on working people’s lives. For five months of the year, we are slaves to the state. No wonder growth is so slow – we need robust tax reform now, bringing lower, simpler, flatter taxes. The government should resolve to make Tax Freedom Day something we can celebrate earlier and earlier each year.”

Note: Using the Treasury's most recent revised figures, Tax Freedom Day was revised back to May 28th in 2011. These revisions are unavoidable and we always strive to use the most recent official data available.

It's the liberty, not the spending, Stupid!

6519

its-the-liberty-not-the-spending-stupid

There are times when quite wonderful, quite delightful, little papers happen to fall into our laps. This is one of them.

As we're all well aware there're a number of people out there claiming that the reason poor countries are poor is beause they don't tax enough. They don't do enough income redistribution, there's not enough government spending, they're not, in short, sufficiently like our own large government states to be able to develop.

And then along comes the World Bank to entirely destroy that contention:

Reviewing the economic performance -- good and bad -- of more than 100 countries over the past 30 years

Oooh, excellent, we're looking at reality then.

...new empirical evidence supporting the idea that economic freedom and civil and political liberties are the root causes of why some countries achieve and sustain better economic outcomes. For instance, a one unit change in the initial level of economic freedom between two countries (on a scale of 1 to 10) is associated with an almost 1 percentage point differential in their average long-run economic growth rates. In the case of civil and political liberties, the long-term effect is also positive and significant with a differential of 0.3 percentage point.

So economic liberty leads to economic growth and civil liberty leads to it as well, even if at a lower rate. But what about that government spending, those entitlements?

In contrast, no evidence was found that the initial level of entitlement rights or their change over time had any significant effects on long-term per capita income, except for a negative effect in some specifications of the model.

Ah, those go from no effect on growth to a bad effect on growth. The conclusion?

These results tend to support earlier findings that beyond core functions of government responsibility -- including the protection of liberty itself -- the expansion of the state to provide for various entitlements, including so-called economic, social, and cultural rights, may not make people richer in the long run and may even make them poorer.

Which leads us to our policy prescription. Yes, of course we should help and aid the destitute, feed the starving, clothe the naked. But beyond such emergency aid what we should really be doing is insisting that poor countries enact proper economic and civil liberties. That's the way they'll stop being poor.

Sounds a bit familiar actually. Take it away, Adam:

Little else is required to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes and a tolerable administration of justice.

Strange the way we have to keep repeating things we've known for 235 years really.

We didn't beat the unions just to have the guilds back

6516

we-didnt-beat-the-unions-just-to-have-the-guilds-back

This little image ought to seriously worry us all:

It's for the US economy, but the situation here in the UK is similar, and it's drawn from this paper.

Now there's nothing wrong with unions as unions: the right to free association is just as important as the right to free speech. What worried about union power was the ability to collect rents, to unfairly divert income from the populace to those unionised producers. We've, to a large extent, managed to beat that particular problem over recent decades. Yet this has been replaced by the need to have a licence to do so many different jobs and trades:

Our multivariate estimates suggest that licensing has about the same quantitative impact on wages as do unions -- that is about 15 percent,

We've the same amount of rent seeking going on, just in a different manner. No, this isn't an advance. In fact, it's a retrograde step, we're moving back to the world of the medieval guilds, that model of socio-economic organisation that Adam Smith himself so railed against.

I will admit, I'm happy enough with some licensure: that a doctor can prove he's been taught that homeopathy is bunkum works for me even if our current system of licensure doesn't actually manage this. But only a licensed electriction can change a plug or socket in a kitchen? No, this is restrictive practices, rent seeking, just by licence instead of union.

And just as we had a decades long struggle to free ourselves from the rent seeking of the unions we are going to have to go through all this again over those who would reimpose the guild system upon us. Fortunately it's easier this time: we can simply deregulate, abolish the licences and restrictions that allow this theft from our pockets. Perhaps one for the liberals, if not the Liberals, in our current government?

The NHS is a socialist relic

6521

the-nhs-is-a-socialist-relic

Здравствуйте! It's 1972 and you're in Russia, in case you were wondering. So I understand you want to buy a car? Here, take this brochure. It shows you all the cars on offer. No - you haven't misread it – you can have a Lada, or a Lada, or a Lada. Which would you like? The Lada? Excellent choice. But please, take your time over the decision, there's no rush – getting any of the fine range of shoddily-built cars will take a wait upwards of five years.

And therein lies the problem of monopolies. They allocate resources inefficiently and react poorly to customer demand. When you're the sole provider of a service, there is little incentive to provide a decent service to your customers. By privatising firms, you make once publicly funded, clinically obese organisations compete on a for-profit basis with other firms and, ceteris paribus, the service improves. It's pretty basic stuff.

Why, then, do people fight so passionately for the last few state monopolies today in Britain? This weekend, UK Uncut have organised the 'occupation' of 30 high street banks in protest of proposed NHS reforms. Ignoring the fundamental flaws (PDF) of many of UK Uncut's arguments, it is unclear why they demand the perpetuation of a health system that fails the population of various accounts.

The NHS is, as of last year, the third largest employer in the world. Britain, by contrast, only has the world's 22nd largest population. Perhaps this discrepancy is due to the fantastic healthcare we receive? Alas, no: compared to other similar countries, it under-performs in a wide range of key areas, notably cancer survival rates (PDF).

Sadly, these statistics are not merely academic – they describe real-life outcomes that have irrevocable consequences to the people involved. For every percentage point that the NHS under-performs, people die. For every vested interest in the NHS protected against patients' interests, people die.

To end on a personal experience: I went to hospital a few months ago. I spent 11 hours sitting in a waiting area, without any food or drink facilities, sporadically being told that I might be seen soon. Eventually I was seen. Thankfully I was okay. However, given the choice, would I go back to this hospital? No. Do I have a choice? No.

Much of the problem lies in the public's 'it'll do' attitude towards the NHS. In my own minor experience it did'; but nothing more than that. We should all demand better.

Hurrah for solar power!

6515

hurrah-for-solar-power

And Ya Boo Sucks to the lies told about it.

Here's the good news:

 Solar photovoltaic (PV) power is set to achieve the environmentalists' holy grail of grid parity – the same cost price as fossil fuels – across the European Union by 2017, according to a UN expert.

How excellent! Low carbon energy becoming cheaper than high carbon such. Isn't that just what everyone is delighted to have? If you accept the IPCC's views on climate change then this is truly excellent and even if you don't then it's still nice to have, isn't it?

But now for the lies that are told about it:

 But Sven Teske, a contributing author to the Intergovernmental Panel on Climate Change (IPCC)'s recent report on renewable energies, also warned that progress could be endangered by market uncertainty over the future of feed-in tariffs. These tariffs are subsidies allowing fledgling renewable industries to compete with fossil fuels that receive up to 10 times more state aid.

There are two in just that one short paragraph. The first is over those subsidies to fossil fuels. The article's own link is to here, which gives the IEA as the source. The IEA's report can be seen (partially) here. Solar power is not competing with subsidised fossil fuels at all. The subsidies for fossil fuels are all in places like Iran, Russia, Saudi Arabia. No, not for their export, but for their local consumption. The subsidies to solar and renewables are all in places like the UK, Spain, Germany and so on, where far from subsidising fossil fuels we tax them heavily.

This is, I'm afraid, the lie indirect. That there are subsidies to fossil fuel consumption, that they are larger than the subsidies to renewables, is correct. But they're not competing with each other as they're not being done in the same markets or places. They're just not competing. However, it's very useful to be able to say that "they're getting money so we should too" and this only works if you elide over the people and places where the subsidies are taking place.

Then we come to the second lie, the more direct one. For we have this rapid approach of grid parity as being the argument in favour of continued subsidy: when of course it is exactly the opposite. For if in 2013 (for some parts of Europe), or 2015 (South of England) or 2017 for all of Europe, it's all going to be cost competitive without subsidy, what on earth are we doing signing people up to 25 year plans of subsidies at four times the going rate for electricity?

Further, if Spain and Germany and China are splurging such sums on subsidies, what should be our reaction here? To add to such? No, of course not. It's to wait three or four years then install the systems that actually make economic sense.

That solar PV will be imminently cost effective is not an argument in favour of 25 year subsidies, it's an argument against them. Wait, do nothing, then everyone will naturally install this new cost effective technology the moment it beomes cost effective.

Time to ban feed in tariffs above the market rate altogether I think.

Clouds over Hong Kong

6520

clouds-over-hong-kong

Hong Kong gets hazier every time I visit. There has long been bad air pollution here, but it accelerated after relations opened up with China. Hong Kong was better at innovation, design, logistics, finance, marketing, while China was cheaper for manufacturing. So factories sprung up just over the China side of the border, supplying the Hong Kong entrepreneurial machine. And with that came a big rise in air pollution. Curiously, the world's economic problems have seen those Chinese factories close by the thousand, but somehow the air pollution still hangs around.

The place also gets less British every time I visit; there are fewer Western faces, and the Cantonese signs get bigger while the English ones get smaller. This is is actually more concerning than the air quality. Hong Kong was, and is, a territory with nothing in the way of natural resources. It made its fortune – and it is one of the richest places on the planet – through international trade. Recently, though, the focus has switched to China. There are the historical, family and linguistic ties, of course. And China has been a huge and growing market. And Hong Kong wants to keep its mainland big brother sweet. So Hong Kong entrepreneurs have switched their attention more and more to serving the China market.

I get the feeling here that I get in Scotland when I pick up the Scotsman or the Herald. These papers are obsessed by events in Holyrood; it is as if the rest of the UK are foreign countries. Devolution has produced a sad introspection in Scotland, which used to be one of the most outward-looking parts of the UK, its inventors, academics and professionals spreading and known all over the world. It would be a pity if Hong Kong, once so much an entrepot for world trade, became equally introspective.

Edinburgh's Millennium Dome

6518

edinburghs-millennium-dome

Visitors to Glasgow taking a taxi should be carefully about commenting on local football matters. But, in Edinburgh, the great no-no for taxi drivers is the shambolic tram project that began in earnest in 2009.

So far, it has cost c£440 million, it has defiled the world-renowned Princes Street and is years away from becoming fully operational – even along a much truncated route. Like several notorious and highly ambitious projects - the East African groundnuts scheme, Concorde and the Millennium Dome come to mind - things seem to have gone from bad to worse.

Long before Edinburgh’s tram project was given the go-ahead, there were serious doubts as to whether it was really needed. After all, a high-quality bus service currently plies the route between the airport and Waverly Railway Station. Relations between Transport Initiatives Edinburgh (Tie) and the infrastructure contractor, Bilfinger Berger and Siemens (BBS) have often been fraught. But, having got so far – at such massive cost - what does Edinburgh City Council do now?

On May 11th, it confirmed that various works will be undertaken over the next eight months to deal with the most urgent road repairs. Beyond that, it is doubtful whether – and when – Edinburgh’s tram system will be completed. Furthermore, the obvious route – the airport via Princes Street down to Ocean Terminal/Newhaven – seems likely to be curtailed.

And, of course, considerable additional funds will be needed. To date, some 80% of the £545 million projected cost has already been spent – and the project is nowhere near being 80% completed. No doubt, more than one party should shoulder the blame for this fiasco. Surely, though, 160 years after the completion of the legendary Isambard Kingdom Brunel’s pioneering Great Western Railway, we should be capable of laying a few miles of tramway and supporting equipment without all the grief that the Edinburgh project has thus far encountered.