The Adam Smith Institute’s President, Dr. Madsen Pirie, recently spoke at the “Stop the Nonsense” evening by Forest, Parliament Street & Liberal Vision. You can watch his speech below.
In it he:
- Shows that many securities can hit yields below zero (such as, most recently, European governments’ bonds), implying that the Keynesian ‘Zero Lower Bound’ argument that monetary policy is impotent when rates hit zero is false or irrelevant
- Argues that we should favour monetary stabilisation of boom-bust because it allows us to have a small state, which we have other good reasons for favouring
- We have a nice natural experiment showing that monetary policy works—and fiscal policy is unnecessary—the Eurozone vs. the UK and USA. The former has not done QE and it has slumped continually; the latter have done QE and had moderate recoveries
A standard part of the standard Keynesian economics of our day is that fiscal policy becomes necessary at the zero lower bound. However, this standard part of the standard theory rather falls apart if we find that there is in fact no zero lower bound to interest rates. The case for fiscal policy, for stimulus, may therefore be rather weaker than its proponents suggest. And the thing is, we do seem to have evidence that there is no zero lower bound. This comes in two different forms: one that unconventional monetary policy can take the place of fiscal even at that lower bound, the other that, well, zero doesn’t seem to be the lower bound.
I hope you don’t mind a bit more of Tim, given that he already writes for us daily!
Local-authority-run public libraries are going the way of launderettes and video stores. Technology has swamped them, and they haven’t responded to the changing pattern of demand. We still have 4,145 public libraries in the UK, about fifteen times as many as we had in the 1920s, despite the fact that more and more of us access our reading material (and even our phone books, newspapers, dictionaries and encyclopaedias) in digital form, that over 84% of households have internet access (76% of us access the web every day) and pretty much all schools have and use the internet.
Bookshops have responded to these changes, bringing in cafe-style environments and organising events and book clubs that bring people into the shop, where they might just browse around and buy something. Libraries like to say they are doing this sort of thing, but it is half-hearted. Birmingham says its new library will only do events that are self-funding, for example: no concept of using events to bring more people in. That dearth of thinking is why Birmingham has discovered that the £10m-a-year cost of running its £188m spanking-new library (which of course won lots of architecture prizes) is unaffordable, given all the other urgent demands on the city’s budget.
It will always be like this. Local authorities have to provide life-saving services, social care, transport, roads, schools, you name it – libraries are always going to be something of a luxury, particularly when 70% of the borrowings are fiction, and much of the rest are about cookery, DIY and cars. Local authorities know this is not a debate about ‘public education’ but about free entertainment for largely elderly and middle-class users.
LSSI, a company founded by librarians, which works with 78 communities in the US, reckons it can cut the UK libraries budget by 35%, increase opening hours, raise the number of library users, and still spend ten times more on books. Frankly, it is about time we put libraries out to commercial tender. Let us specify what they are actually there for – not something that up to now there has been any public debate about – and the outputs we want, and then invite private, voluntary and charitable groups to make an offer. You can be sure of two things. Firstly, they would not build £188m white elephants, but would create libraries near to shops, schools and other places that people find local and convenient. And secondly, that the entire business would be revolutionised in short order, leading to everything that libraries are supposed to be there for being do cheaper and better.
Libertarians generally subscribe to several maxims. Here are two:
1) That everyone has the right to express their views, providing their expressions are within the law.
2) That it’s a good thing when people feel the effects of the social costs they impose on others.
A recent debate on Radio 2 – about street demonstrators possibly having to pay to protest after police look to refuse to close roads for them to demonstrate – pits these two maxims against each other. However misjudged I find the views of groups like “The Campaign Against Climate Change”, “The People’s Assembly Against Austerity”, “Global Justice Now”, and “Friends of the Earth”, there is clearly a case here of the immovable object of people’s freedom to protest coming smack bang against the irresistible force of valuable resources being exhausted by the presence of these demonstrators on our streets, in this case in the shape of exhausted police resources, blocked roads, temporary traffic regulations and potential disturbances of the peace.
On the one hand I suggest libertarians wouldn’t want a situation where people’s right and ability to protest was predicated on their ability to pay. But on the other I would prefer protesters to feel the costs of their actions. So while I am all for defending people’s prerogative in being able to demonstrate against actions they dislike – when those actions come at a social cost to others, some are arguing that it is not particularly unreasonable that they should pick up the bill for these negative externalities imposed on others.
It may not be unreasonable, but I don’t think it should be desired either. The state chooses to have a police presence at a demonstration (it is compulsory to notify the police of any planned demonstration), not the demonstrators. A very risk averse state apparatus operates under the ethos that modern life is safe but expensive. Any restrictions of this kind on the ability of people to protest legally is bound to restrict freedom of expression, and at the same time increase the likelihood of people protesting illegally – and that is not likely to make organised demonstrations any cheaper or safer.