Why we don't want the government running food banks

There is, as we all know, a certain argument going on about food banks and their usage in the UK. It's most certainly true that the number of food banks, the number of people using them, has expanded considerably in recent years. This is used as an argument to insist that there's a gap in the welfare state: and that argument is also entirely true. That, in turn, has led to the argument that government must take over to fill that gap in said welfare state: that is lunacy of the highest order. Because:

People are at risk of going hungry and losing their homes because of avoidable delays to benefits, a cross-party committee of MPs has said.

In a damning report, the Commons work and pensions committee called on the government to work harder to cut delays to payments and set a new target to help reduce mistaken underpayments.

Hmm, bureaucracy is not swift and efficient, who knew?

Under the current regime, the committee said, advisory organisations such as Shelter and Citizens Advice reported that benefit underpayments left some individuals vulnerable and facing difficult decisions over whether to pay their rent or provide essentials such as food, gas and electricity for their household. Others found that individuals could become reliant on food banks as a result of underpaid benefits.

Actually, other figures show that from many to a majority of food bank users are there because of that noted efficiency of the state in processing the money to which they are entitled.

Which is why we're just copacetic with the idea that a smaller, nimbler, organisation like the Trussell Trust should handle that provision of food: something which does need to be done on a timely basis. Not because the State should not be involved in making sure that the poor have food to eat, but because the State is, provably, incompetent at making sure that the poor have food to eat. Thus it seems logical to have a private sector provider, one that is actually competent to perform the needed task, perform said task.

We are utilitarians here, we have no problems with, indeed desire it to, the State doing what it is better at. But obviously we don't want it doing what it is worse or incompetent at. True, that leaves us with a pretty small, minarchist even, government at the end of the consideration of what the State can do well but that's fine, so be it.

In memory of Jimmy Hill, let's stop calling for maximum wages

Vale Jimmy Hill: and in his memory perhaps we can stop this incessant whining for maximum wages emanating from over on the left. Before his campaigning footballers were the hired helots of their clubs: after it they became the major beneficiaries of the money flowing through it. All rather Marxist, and why not, the profits and value of the business flowing to those working by foot and head:

In 1957, Hill, then a bossy midfielder with Fulham, was elected chairman of the Professional Footballers Association (PFA), the players’ union. At the time the maximum weekly wage for footballers was capped at £20, although the best teams could draw crowds of 60,000 every Saturday afternoon. Stars such as John Charles were being tempted to leave the British game for Italy, where there were no limits on pay, while some clubs were paying illicit bonuses to players to persuade them to stay. The confrontation between the Football League and the PFA began when the former suspended some Sunderland players suspected of taking under-the-counter payments. Hill worked successfully to have them reinstated, and then challenged the League to end the wage cap and to allow footballers to move freely when their contracts ended. Astutely using television to win over public opinion, Hill – who always had something of the barrack room lawyer about him – took his union to within four days of an all-out strike in January 1961 before the League was forced to capitulate. The lid of Pandora’s Box had been forced open, and football would never be the same again.

British football is certainly different and almost certainly vastly better for the change. It would certainly be difficult to see what would be left of it if wages were still capped at around those of a skilled working class job.

This is not just about footballers of course: parts of Wealth of Nations are Smith railing against the wage and price fixing of the medieval guilds, and how those distort an economy to the detriment of the consumer.

We do not want to have price fixing of any kind, because prices are signals about how scarce resources should be used to best effect. If that means that rare skills, from nutting a leather ball to running a 100,000 person corporation bring in large incomes (and the two are, these days, comparable in amount) then so be it. As long as the result comes from a free market in skill and talent and not from rent seeking then that's the best allocation of talent we're going to get.

The financial ignorance of the British left

We shouldn't let these things surprise us but, if we're honest, we have to say that every time it does it surprises us. Such a thing being that we find ourselves in disagreement with someone over some point or policy: that's fine, there's many different ways of looking at the world and we wouldn't claim a monopoly on all of the good ones. But as we examine the disagreement we find that it's not one about morals, or end goals, or a conception of the world that we don't share. It's based upon the sheer deluded ignorance of the person disagreeing with us. As you might imagine this happens when discussing matters economic and financial with the British left. Such a case is here, from Compass:

Key British assets which bring in millions of pounds worth of profit and provide incalculable social benefits are to be sold soon if the chancellor gets his way. Buried within the recent Spending Review are plans to sell off billions of pounds worth of public assets: the Land Registry, National Air Traffic Services (NATS), the Green Investment Bank, bailed out banks RBS and Lloyds, and the student loan book amongst others.

OK, we agree, there can be differences of opinion on such things. You could, for example, be a union leader who thinks that your members will get an easier deal in the public rather than private sectors. And given that that's what you're there for, to get the best deal for your members, we wouldn't blame you for making some sort of argument. Disagree with you, obviously, but not blame you. But that's not the argument that is being made, instead we get this delusion:

The other assets up for grabs are making a profit in public hands and would continue to return money to the public purse for years to come. NATS returned £82 million back to the public last year. Through Britain’s 49% stake in the service, we sell services to airports and airlines in 30 countries, generating £157 million in pre-tax profit in 2014. The Land Registry currently has a 98% customer satisfaction rating, and returned £100 million to the Treasury in 2013. Ordnance Survey made £32 million profit in the past year, and its data underpins £100 billion of the economy.

If these assets are sold, it doesn’t take an economist to realise that future governments will face a significant loss of revenue, thereby making it harder to invest, protect its citizens, plan ahead, and keep to a sustainable economic path.

Perhaps an economist should have been consulted before that statement was made (perhaps a financier too: who would buy Land Registry in order to stop producing the data that underpins £100 billion of the economy?). For of course the government is considering the sale of these assets, not their gifting to someone. And the persons they are sold to will, to introduce a new word, "buy" them from the government. That is, they will hand over a capital sum now in order to be able to enjoy those incomes into the future. And government will gain a capital sum now instead of the income streams off into the future.

And the price at which this bargain is struck will be at or around the net present value of those future income streams. Just because that's how assets are valued in this world of ours.

What worries is not that people differ with us on the advisability of this idea, it's that the people complaining have no clue what the idea is in the first place.

The contention is that we convert a future income stream into a capital asset now, that value being that of the net present value of the future income. Or is that too complicated for the British left to understand?

Good, glad that's settled then, UK levels of inequality don't matter

Even as an entirely utilitarian classical liberal it's possible to, in theory, be worried about economic inequality. If a society is so unequal that we don't have, nor cannot have, equality of opportunity then this isn't a society that's living up to the liberal ideals. We might therefore want to do something about said inequality. For example, imagine a society in which large swathes of the population are inadequately fed in childhood, leading to stunting and possibly a diminution of their IQ, meaning that they're most unlikely to pass by their richer and better fed contemporaries. This is of course what has been true across vast swathes of the world throughout time and is still true in the poorer places. We would therefore argue that something must be done in order to improve matters: which is what we do do, it's imperative that those poor areas be able to experience economic growth sa a result of some judicious dollops of capitalism and free markets.

But imagine that this was still true in a rich society: like, say, the UK of today. In fact, that's what part of the argument from our current left actually is: that the poor of our society are not able to deploy their God given gifts as a result of the poverty in which they grow up.

But is this allegation true?

Research suggests that genes and environment both play a critical role in shaping a person's intelligence. A longstanding hypothesis in the field of behavioral genetics holds that our potential intelligence, as set by our genes, is more fully expressed in environments that are supportive and nurturing, but is suppressed in conditions of poverty and disadvantages. While some studies have provided evidence supporting this hypothesis, others have not.

A reasonable statement of the question at issue. The answer?

The researchers found that the relationship between genes, socioeconomic status, and intelligence depended on which country the participants were from.

"The hypothesis that the genetic influence on intelligence depends on socioeconomic status was not supported in studies outside of the US," says Tucker-Drob. "In the Netherlands, there was even evidence suggestive of the opposite effect."

Importantly, the meta-analysis did not show any evidence that other factors -- such as age of testing, whether the tests measured achievement and knowledge or intelligence, whether the tests were of a single ability or a composite cognitive measures -- influenced the results.

That is, UK levels of inequality don't matter. We've got that basic floor to the welfare system that allows full human flourishing of those given gifts and that's all we need to do.

Given that equality of opportunity is the aim and that's what we've achieved in terms of basic living standards (although obviously, not necessarily so in terms of access to decent education and so on) then on that issue we're done. We just don't need to collapse economic inequality any more than we already do.

Why you should never give your money to a foundation

Some advice for those lucky enough to enrich the species with a decent idea and thus gain possession of some portion of that wealth created: never donate that wealth to a foundation. Because such, over time, always but always end up being run by the same social justice warriors that caused the problems of poverty in the first place. Entirely fine to spend the money in the manner you think best, of course, but spend it, don't leave it as a pot for subsequent generations of bureaucrats to gorge upon. As here with the amazing piece from the head of the Ford Foundation:

This new gospel might begin where the previous one fell short: addressing the underlying causes that perpetuate human suffering. In other words, philanthropy can no longer grapple simply with what is happening in the world, but also with how and why.

Feeding the hungry is among our society’s most fundamental obligations, but we should also question why our neighbors are without nutritious food to eat. Housing the homeless is an imperative, but we should also question why our housing markets are so distorted. As a nation, we need more investment in education, but not without questioning educational disparities based on race, class and geography.

To discuss why housing markets are distorted is important, of course it is: the answer being that not enough chittys are being given out enabling people to build houses. And that's what is wrong with this sort of musing:

In other words, “giving back” is necessary, but not sufficient. We should seek to bring about lasting, systemic change, even if that change might adversely affect us. We must bend each act of generosity toward justice.

We, as foundations and individuals, should fund people, their ideas and organizations that are capable of addressing deep-rooted injustice. We should ensure that the voices of those most affected by injustice — women, racial minorities, the poor, religious and ethnic minorities and L.G.B.T. individuals — help decide where and what philanthropy puts money behind, not in simply receiving whatever philanthropy decides to give them.

Nonsense. The larger question is as simple as the housing one.

Those places that have been roughly capitalist and roughly free market for more than a few decades are rich places, the inhabitants of them rich by any global and or historical standard. Those places that have not been roughly capitalist and roughly free market for a few decades are not, are still stuck in the immiseration of the absolute poverty of peasantry. The answer is thus clear: more capitalism tempered by that free market red in tooth and claw and she'll be right.

Adam Smith pointed this out over two centuries ago with that bit about barbarism to opulence requiring only a bit of law, reasonable taxes and that economic liberty.

So, if you should happen to profit in this world, it obviously being impossible to take it with you to the next, don't set up a foundation to employ people to whine about inequality. Spend the money here on bringing more people up out of poverty. T%hat being done, obviously, by producing more of value that poor people can then consume.

Our Children need Safeguarding from Regulators

The scandals of Rotherham, Oxford, Hackney etc. have finally alerted government to the need for something more than reviews and reports. Ofsted, after turning a blind eye for years, have been told to get tough. On 14^th December the Prime Minister announced that Sunderland children’s services will become a voluntary trust and new service leaders will be appointed to step in and tackle failings in Norfolk and Sandwell children’s services. Of course local authorities could, and should, do better. They see themselves held back not so much by budget cuts, as workloads and the calibre of their staff. The elephant in the room is that both of those problems arise from the bureaucratic, complex and cumbersome system imposed by Whitehall itself. Form-filling comes before child welfare. Child workers are judged on how they spend their time not on the outcomes they achieve. Lord Laming pointed that out in his report to government back in 2003 yet the Department for Education continues to point the finger rather than reform the system and the regulators.

If the system were streamlined, higher calibre staff could be recruited, morale would improve and outcomes enhanced. For example, Amanda Kelly, of iMPOWER, has shown that Ofsted is more part of the problem than part of the solution (http://www.impower.co.uk/insights/a-brave-new-world-is-inspection-improving-childrens-services).

The government chose Norfolk Children’s Services to be a whipping boy on the basis of the Ofsted October report. It makes interesting reading: many improvements are cited as well as faults. The casual reader would not be able to conclude whether the progress is, or is not, good enough. Ofsted, however, labels almost everything as “inadequate” without any evidence of that. No performance measures are reported still less comparisons with prior years, other local authorities or standards that should be met. There are no measures of achievements, i.e. outcomes, because Ofsted, as usual, is preoccupied with leadership and how child workers spend their time – not that there are any measures of that either.

The head of Essex Children’s Services has been appointed to clean out, within three month’s, Norfolk’s alleged Augean stable. Clearly Essex is deemed “best practice”. Put the latest Norfolk and Essex Ofsted reports side by side and something interesting emerges. There are no performance measures in the Essex report either. Some areas of improvement are noted along with some faults. The only substantive difference is that the word “inadequate” in the Norfolk report is replaced by “good” in the Essex one. No measurement of what is achieved versus what should be achieved.

With regulators like this, is it any wonder that our children are being failed?

Could someone let us in on what the problem is here?

That people, of whatever background, chromosome arrangement, melanin enhancement or any of the other ways that we distinguish between people, should be both allowed and encouraged to do what they want with their lives we consider to be the basis of a free and liberal society. Not just the basis, but essential to having that freedom and liberty in fact. But we do find ourselves rather puzzled at times:

Women still face unfair barriers to reaching senior levels of the Labour party, according to the Fabian Society, which found that just one in 10 of the party’s top staff and one in six of its council leaders are female.

The leftwing political thinktank said women make up 36% of Labour’s councillors, 30% of constituency party chairs, 16% of council leaders and 11% of the most senior Labour staff – defined as the executive directors, regional directors, the general secretary, and the leader’s chief of staff.

Labour has increased its proportion of female MPs to 43% through the use of all-women shortlists. But the Fabian study found that in areas where there is no positive discrimination, representation of women falls away.

In a survey of members, the researchers discovered female respondents reporting higher dissatisfaction with intrusion into their personal life and high costs of standing for office.

Just what is the problem here?

An MP earns three times the median wage. We know of no job in the UK which pays three times median wage which is not difficult to gain. Any and every job which offers such rewards takes effort and determination to ascend to. And if people decide that that effort isn't worth it, that there's other things to do in life rather than try to grab the brass ring then so what? That's the mark of a free and liberal society that everyone gets to make that decision for themselves.

Yes, Polly's spouting nonsense again

So once again Polly Toynbee steps into the breach to tell us all about the gender pay gap. And at one point she's spouting simple nonsense:

Latest figures from the Office for National Statistics show the gap for median hourly earnings standing at 19%.

No, they don't. And Polly has been told this many a time. By Sir Michael Scholar no less. To mix the part and full time pay rates to gain a general gender pay gap is a "misleading quantification" which "may undermine public trust in official statistics".

The full time pay gap is 9.4%, the part time pay gap is a negative 6.5%.

However, Polly does in fact get one part of it correct:

A bigger question is why is it still women who do most of the caring?

That is indeed the cause of the gender pay gap that we can see, something more properly known as the motherhood pay gap. And we agree that we're not scientists or biologists but we do have a small sneaking suspicion that this might be to do with humans being a dimorphous and viviparous mammalian species. Sometimes this doesn't matter at all, as with who we decide should be bus drivers. At other times it matters rather a lot, as we decide who should bear a child to term. And we don't insist at all that it does matter when considering the question of who cares for children and families. Rather, we just note that the vast majority of human beings act as if they do think it matters. And that's the thing that will have to be changed if that gap is to disappear.

Which, given that the gap is thus the outcome of how people prefer to organise their lives, means that we think the remnant gap is of no importance at all.

The ASI's best of 2015

Madsen Song: Easy Love by Sigala.

Musician: Charlie Puth.

Movie: The Martian.

Book: Chavs (updated edition) by Owen Jones.

Restaurant: East India Club Dining Room.

Cocktail Bar: Ozone Bar of the Ritz-Carlton, Hong Kong.

Article: The New Statesman's piece on the mountain Labour must climb to regain power.

YouTube video: Anton Howes on Innovation & the Industrial Revolution.

Political moment: Waking up to learn I'd won my election bet.

Toy: Phantom 3 drone.

Eamonn

Song: Well it sure ain’t The Writing’s On The Wall by Sam Smith.

Album: I suppose after all the hype it has to be 25 by Adele but it’s pretty dreary stuff.

Musician: Neither of the above, sadly.

Movie: Paddington - one of the funniest films of all time, surely (OK, it came out in November 2014, but I only saw it in on the way to Peru in March).

Book: Am I allowed to say Magna Carta – A Primer by Eamonn Butler?

Restaurant: La Rosa Nautica, perched on a pier in Lima – with the Jumbo floating restaurant in Hong Kong a close second.

Article: Matt Ridley: ‘The Climate Change Agenda is a Conspiracy Against the Poor’ in The Spectator.

Political moment: The look on David Dimbleby’s face when he opened the envelope containing the UK general election exit polls and realised the Tories had won.

Person: Charlotte Bowyer – a hole opened up in the office when she moved on

Sam

Song: Run Away With Me by Carly Rae Jepsen (My top 63 list is here).

Album: E•MO•TION by Carly Rae Jepsen – one of the best pop albums of all time, in fact, up there with ABC's The Lexicon of Love.

Musician: Carly Rae Jepsen (surprise surprise).

Movie: Inside Out.

Book: The Man Who Would Be Queen: The Science of Gender-Bending and Transsexualism, by J Michael Bailey – essential reading to understand one of the major debates of the year. Or the Life-changing Magic of Tidying Up by Marie Kondo – I just need to apply it to my desk as well as my house!

Restaurant: The floating restaurant Jumbo in Hong Kong, followed by Megan’s Kitchen in Wan Chai, which did a (delicious) hot pot broth so spicy that I wept and spent most of the day doubled over in pain. Totally worth it.

Article: Has to be my own posts on StraightUpLondon.com, which Ben, Philip and I have set up to review London’s restaurants and (eventually) cocktail bars.

Political moment: Ireland legalising gay marriage in a referendum – the first country to do so by popular vote.

Person: Rachel Dolezal.

Hunter

Song: Justin Bieber - What Do You Mean (a triumph for tropical house and beliebers across the globe)

Album: The Mars Volta - De-loused in the Comatorium (terrified warblings from ‘03)

Musician: Carly Rae Jepsen (my introduction to pop music)

Movie: Mad Max: Fury Road (if only for the Fallout 3 nostalgia)

Book: Albert Camus - The Myth of Sisyphus (assuaging my existential doubt in the least philosophically robust way possible)

Favourite sports moment: Chelsea’s decline (and, by extension, Jose Mourinho in all his petulant glory)

Political moment: Dave and Xi chillin over a pint.

Person: Donald Trump (for taking it upon himself to berate a Saudi prince over twitter).

Ben

Song: Frank Fiedler - Transhimalaya (full list here).

Album: DJ Richard - Grind (full list here).

Musician: Tuluum Shimmering - eight or nine albums in one year, all very good, is pretty impressive.

Movie: Queen of Earth (Alex Ross Perry).

Book: Dictator (Robert Harris) or Blindsight (Peter Watts).

Restaurant: Shotgun, Soho.

Article / blogpost: Would cracking down on guns in the US really reduce violence? (Robert VerBruggen).

Political moment: Madsen's correct prediction of the general election.

Person: Donald Trump.

Annabel

Song: Wild Beasts, Wanderlust (it's 2014 but I think I only first listened to it in 2015).

Album: Maccabees, Marks to Prove It.

Musician: Laura Marling.

Movie: Slow West OR Mad Max: Fury Road.

Book: Miriam Toews, All My Puny Sorrows.

Restaurant: Murano. Italian posh nosh. What more could you want?

Article: Hugo Rifkind: My Week: Robert Peston.

Political moment: Miliband doing "mockney" during Brand interview/Miliband pledge stone.

Person: Wiggo, for breaking the hour record.

Kate

Song: White Lightning – The Cadillac Three.

Album: Cold Beer Conversation – George Strait.

Subbing Musical for Musician: Hamilton.

Movie: TIE! Mad Max: Fury Road / Inside Out.

Netflix Original Series: Narcos.

Book: Yes Please – Amy Poehler.

Restaurant: The Dairy (Recommendation: Ben Southwood)

Article: A Bow to Charleston – Peggy Noonan, WSJ.

Political moment: Mitt Romney 2016 (any day now...)

Person: This angry patriot.

Holly

Song: House Every Weekend, David Zowie. My school leavers’ trip to Zante (aka Baes Abroad 2K15) would not have been the same without this song.

Album: If You're Reading This It's Too Late, Drake. All songs make for excellent taxi music, relaxing music, or even telephone holding music if you’re cool enough.

Musician: The Weeknd.

Movie: Straight Outta Compton

Book: Girl on a Train

Restaurant: Oblix at The Shard. Tasty food with an equally tasty view.

Article: “The Dalai-Lama is as sexy as a fungal nail infection”, Rebecca Reid. (Discussing the hypocrisy of the Dalai-Lama saying his successor should be an ‘attractive’ woman)

Political moment: When Kanye West announced that he’s going to run for president in 2020. Iconic.

Person: Shigetaka Kurita (The man who created emojis)

Quis Custodes NAO?

The Auditor General has reported that the £113.5 million “Britain is GREAT” advertising campaign already achieved a £1.2 billion payback with a further £0.5 - £0.7 billion to come in the next five years. In other words, for every £1 we taxpayers invest, we can expect at least £17 back. The National Fraud Office is forever telling us that if an investment looks too good to be true, then …….

It is indeed sensible for 17 departments/quangos to share a single campaign with clear objectives, rather than each do its own thing. Furthermore the campaign appears to be creative and well executed.

The NAO comments buried in the review wisely indicate concerns with the methodologies. For many of the FCO/UKTI performance measures, for example, it says something like “Difficult to link directly to GREAT campaign particularly if UKTI has a long-standing relationship with that company.”

The amateur nature of the review is indicated by the lack of understanding of technical terms such as return on investment (ROI), metrics, and brand equity. ROI, for example, is the cash received from an investment as a percent of the cash invested. It cannot usually be applied to advertising without considering its effect on the underlying asset, generally called “brand equity”, a term misused here to mean the value of an ad campaign.

The review ignores the voluminous academic literature on “country of origin effects”, i.e. the impact of the country’s name on economic choices by the target market. At the very least, the specific performance indicators should be reported with “after” compared with “before”. Instead we get broad generalities such as “3.9 UKTI and FCO have a five year target for return on investment for several of its metrics.” We are not told what changed by how much nor the methodology for transposing those changes into cash returns.

A key performance measure for VisitBritain was all the people indicating an intention to travel to the UK whether they saw the campaign or not. That was translated into, for 2012–2014, “£360.3 million validated by the Cabinet Office and included in ROI figures.” The NAO notes a concern with that but still accepts the Cabinet Office “validation”.

Finally, one must have misgivings from all the data for this report being collated from those who spend the money and who have clear self interest in wishing to spend more. Most advertisers I know research the target market directly.

Overall, the role of the NAO in this review reads more like that of a cheerleader for government expenditure rather than a rigorous audit of value for money. For an organisation that generally does such a thoroughly good job, that is disappointing.