Young Writer on Liberty Competition 2015

 

The Adam Smith Institute invites the under-21s to enter our annual ‘Young Writer on Liberty’ competition.

This year’s theme is:
The road not yet travelled: Three paths the next government should take towards a freer United Kingdom

This is not a typical essay contest. Instead, entrants should submit three, ASI blog-style articles, each highlighting a different policy the incoming government (whoever they may be!) should adopt to make the UK freer, richer and happier.

You may argue to get rid of certain regulations, or a repeal a specific law. You might suggest reform of the banking system, the right to sell organs for money, or a move to direct democracy. You might even call to abolish politicians completely! No idea – however radical-  is out of the question.

We are looking for entrants who can think creatively and express themselves clearly and succinctly. As such, winning entries will be thought-provoking, well-argued, and suitably researched.

Prizes:
There are categories for the Under-18s and the Under-21s, with a winner and a runner-up in each.

The winner of the Under-18 category will receive £150 prize money and a box of liberty-themed books. They will also have their articles published on the Adam Smith Institute blog.

The winner of the Under-21 category will receive 2 weeks work experience at the Adam Smith Institute, £150 prize money, a box of liberty-themed books, and have their work published on the ASI blog.

Runners-up in each category will also receive a box of books, and have an article of their choice featured on the website.

How to enter:
You should submit your three articles using our Young Writer on Liberty submission form.

The deadline for entries is 11.59pm on Thursday, 30th April. Applicants must be under 21 on this date.

If you have any questions or queries, please contact schools@adamsmith.org

We look forward to reading your entries!

Economic Nonsense: 38. The market cannot produce art, music, literature & museums

The market actually does produce such things in some other countries.  What the market does best is to allow people to create the wealth that will fund cultural activities.  The United States has a strong tradition in which people who have done well in business support the arts.  Names such as the Guggenheim Museum or the Getty Centre remind us of the generosity of rich patrons.  Andrew Carnegie, who found fame and fortune in the United States, funded the provision of organs in many churches in his native Scotland, as well as numerous libraries.

In fact the arts have been funded by rich patrons through the ages.  It was often regarded as a sign of good character and culture that a wealthy person would support art, architecture and sculpture.  The emergence of modern economies since the Industrial Revolution has enabled wealth to be created on an unprecedented scale.  This, in turn, has allowed some people to become rich through business and become patrons, where previously it was mostly aristocrats and rich merchants who could afford to do so.

When Kingsley Amis wrote for the Adam Smith Institute opposing arts subsidies, his central case was that if government through its arts committees funded the arts, their output would be skewed towards the desires and tastes of the paymasters, rather than from the passion and inspiration of the artist.

It must remain a suspicion that the committees responsible for handing out public funds as grants to the arts will give effect to their own tastes, rather than those which the public might freely choose to support otherwise.

Some arts can be self-supporting through ticket or admission prices, but government can help through its tax laws, remitting all or part of the tax that would have been due on money donated to artistic institutions.  It does not itself need to dole out taxpayer-funded largesse,  The UK’s National Lottery has multiplied financial support for the arts without needing taxpayer funds.  The view that the market cannot finance the arts and that government grants are needed to sustain them is simply not correct.

Immigrants and institutions

It’s becoming increasingly difficult to be opposed to significant immigration for economic reasons. One of the more sophisticated arguments for restricting migration–proponents include Paul Collier, in Exodus: Immigration and Multiculturalism in the 21st Century, and George J. Borjas in Immigration Economics–concerns the socio-political baggage that immigrants bring with them; institutions, characteristics, and social norms which might even have had some bearing on the poverty of their countries of origin.

There’s a substantial literature to support the claim that institutions like secure property rights and the rule of law are by far the most important guarantors of long term prosperity and growth. If it were true that high levels of immigration could serve to undermine these institutions, (as Borjas hypothesises) significantly mitigating the vast welfare gains some predict immigration will bring, those who support very high levels of immigration might well reevaluate their position.

The newly updated version of a Cato Institute working paper, soon to be published in Public Choice, goes some way to looking at these claims empirically. They use data from the Economic Freedom of the World Annual Report to examine the effects of migration on the institutions such as property rights. The main finding of their analysis is that countries with a larger percentage of immigrants in their population in 1990 had a higher level of economic freedom in 2011.

Indeed, Clark et al. conclude:

Regardless of the immigration measure used or the precise regression specification, we have not found a single instance in which immigration is associated with less economic freedom. It does not appear that immigrants are bringing the poor economic freedom records of their home countries abroad with them.

and

Overall, we find some evidence that larger immigrant population shares (or inflows) yield positive impacts on institutional quality. At a minimum, our results indicate that no negative impact on economic freedom is associated with more immigration.

As the evidence around the economic case against immigration is weakened (I could have also blogged today about a recent CReAM discussion paper which concludes that low-skilled immigration to Denmark pushed up native wages, employment, and occupational mobility), we might wonder whether people have other reasons for opposing it.

It’s not entirely obvious that inequality is increasing

It’s a standard trope of our times that inequality is increasing beyond all reasonable levels. And it’s also true that this isn’t really quite true. Inequality within the rich countries has been increasing in recent decades, this is true. But global inequality has been falling. And now from Branko Milanovic (one of the major scholars on this subject) we get that chart above, and this:

…the noted convergence of countries’ inequality levels (see the graph, indicating that countries with higher inequality before 1980 had smaller increases or even declines in inequality since)?

He’s actually arguing about something else which is why the quote is so truncated. But this is interesting, don’t you think? While there has been rising inequality in some to many countries in recent decades those with the highest original inequality have seen, in some cases at least, falls. And that convergence does mean that the world is, at the country level, becoming equally unequal.

The standard trope of that increasing inequality has more than a few problems with it therefore: not just that decreasing global inequality but also this convergence of inequality. and that’s before we even get into things like trying to measure inequality of consumption, adjusted for price levels, at which point we’d be very hard pressed indeed to claim that there’s been any rise in inequality in the UK at all.

Economic Nonsense: 37. Government must act to redress trade deficits

No, not really.  People used to think so.  To some extent this is a hangover from mercantilist attitudes when people thought you needed a surplus of exports over imports so you could accumulate wealth.  In its primitive form of bullionism, people thought you had to sell more than you bought in order to build up piles of precious metals.  

When the UK had fixed exchange rates the balance of trade was regarded as vitally important.  Each month when the Department of Trade (as was) published the figures, people would fret about rising imports or reduced exports.  The “trade gap” would sometimes feature as the lead item on the evening news bulletins.  The significance was that if the imbalance were sustained over a period of time, the pressures on the currency would rise to the point where the pound might have to be devalued to a new fixed rate.  This was regarded as a humiliation, and made imports more expensive, increasing the cost of living.

Once the pound was allowed to float against other currencies, however, the issue lost significance.  If imports exceed exports over a period, the pound drifts down in value, making exports cheaper to sell and imports cheaper to buy, thus closing the gap.  Trade deficits are only a problem for countries with fixed rates of exchange.  And even here, while devaluation can redress them, other countries might also devalue, leading to “currency wars” as each tries to give itself a trade advantage.

Floating currencies solve the problem.  If a country is uncompetitive, buying more than it sells, its currency will go down, enabling it to sell more and buy less.  One of the problems with countries such as Greece has been that within the eurozone, they were not able to devalue or to drift down.  The value of the euro was not within Greece’s control.  Had they left the single currency and restored the drachma, a steep devaluation would have addressed their debts and their competitiveness.