This picture is illegal in California

Or rather, the action being performed in that picture is illegal in California. It’s not that the lettuce is not organic or anything. It’s that it is evidence of someone working during their lunch break:

I mentioned earlier that we had struggled to comply with California meal break law. The problem was that my workers needed extra money, and so begged me to be able to work through lunch so they could earn a half-hour more pay each day. They said they would sign a paper saying they had agreed to this. Little did I know that this was a strategy devised by a local attorney who understood meal break litigation better than I. What he knew, but I didn’t, was that based on new case law, a company had to get the employee’s signature every day, not just once, to avoid the meal break penalties. The attorney advised them they could get the money for working lunch AND they could sue later for more money (which he would get a cut of). Which is exactly what they did, waiting until November to sue so they could get some extra money to pay for Christmas bills. This is why — believe it or not — it is now a firing offense at our company to work through lunch in California.

Eventually a system becomes so encrusted by such nonsense that nothing useful can ever be done and all that can be is to chase the paper around in ever decreasing circles. That is arguably what happened to the Ottoman Empire, various incarnations of the various Indian and Chinese empires and so on and on. It’s one of the reasons that we here shout so loudly about regulation and the necessity of a bonfire of much of it.

We do not say that there should not be regulation, not at all. But we do say that we need to carefully consider who is doing the regulating. There are times and circumstances when it does need to be the bureaucrat or the politician. But far more often tasks that they take upon themselves will be better regulated through what we might call simple market processes. Markets are, after all, just the interaction of voluntary behaviour and surely we can trust two adults to agree between themselves about whether someone might usefully check a spreadsheet, or not, while munching on a salad?

It’s the absence of markets that causes poverty

There’s an excellent discussion of a recent finding in development economics over here.

If markets are missing completely, or so unreliable as to effectively be missing, then household separation fails. The extreme case is easiest to think of. If a household is completely autarkic, and can trade with no one else, then it can only consume what it produces. The two decisions are inseparable. If they want a new TV, then they’d better have a source of rare earth elements in their back yard and a passion for soldering.

The importance of knowing if household separation holds or not is that it tells us something fundamentally important about why a developing area is poor.

What’s being looked at is that horrible, $1 a day, poverty that far too many of our fellow humans are stuck in. The big question being, well, are they stuck there because of the way that markets operate? Perhaps “the market” means they can’t get enough fertiliser for example. Or is it that markets simply do not exist and thus they cannot reap the benefits of the division and specialisation of labour and the subsequent trade in the increased production?

The answer appears to be the absence of markets rather than any failure in them. Which leads to an interesting thought about what should be the right way to aid them.

Instead of sending money with which to buy them stuff we should be trying to work out how to create markets. And the most important part of that is in fact information. Not from us to them, but within such communities. And that ties in neatly with something that is becoming apparent from another part of the literature. It may well be that the mobile telephone is the greatest poverty reducing technology of our times. Simply because it does do exactly that, allow the spread of the information that enables markets to do their wealth creation thing. As this excellent paper makes clear.

It’s not quite as simple as “make sure there’s a phone network everywhere and the poor will get rich” but we’re increasingly coming to the view that that’s a damn good start to solving the problem.

Nationalising the railways might be popular but perhaps not for the reason people think

Owen Jones tells us that Labour should, to beat the Greens, announce some really popular policy like re-nationalising the railways. And this might well be popular but perhaps not for the reason that people are assuming:

But there are three clear commitments Labour could offer to win over Green defectors. First, renationalise the railways. It would cut through like few other policies, and probably prompt some voters to break out in spontaneous applause. Polling demonstrates a publicly owned railway has near-universal appeal, winning over well-heeled Tory commuters and Ukip voters alike. But it also has a totemic quality about it: a clear demonstration that Labour has taken a decisive stance against the untrammelled market in the era of market failure.

The real complaint, we feel, about the railways is not over who owns and or runs them. It’s over the price of them.

It’s common enough to see people complaining that UK ticket prices are among the highest in Europe. And they are, as a result of a deliberate political decision. More of the revenue to keep them running comes from ticket prices and less from direct subsidy than in most other countries. And that’s the correct decision too. There’s Britons who don’t use a train from one decade to another: difficult to see why they should be taxed to provide cheaper transport for others.

And that’s why nationalisation won’t make much difference. Because doing so isn’t going to reverse that decision that, by and large, people who use trains are the people who should pay to keep trains running. The only way ticket prices will come down is if the taxpayer gets dunned for it. And why should we?

Another strange idea to reform the housing market

It does continue to amuse us, watching the contortions that people twist themselves into in their attempts to reform the housing market. As opposed to, you know, just getting on with issuing more planning permissions so as to bring down the price of housing. The latest one is that self-builders should be treated as special little snowflakes with their own, special snowflake, planning permissions system:

But we also need to reform the land market, to make it dramatically easier for those without much capital to buy a plot of land and commission their own homes – either individually or as a group. All political parties pledge theoretical support for custom and self-build, and the government’s “Right to Build”, which allows people to buy council land on which to build their own houses, is a first step. But systemic change is needed to create a market providing land specifically for custom and self-build housing.

Let’s create a new land use class in the planning system “C5 Custom build”. In effect, that would create a parallel land market that differentiates between a house built as a speculative asset, and a house built as a place to live. Let’s create space for both, and see which works.

There’s only one problem with this suggestion. Which is that we don’t in fact want a special class of planning permission for self builders. What we actually want is simply the issuance of more planning permits. For as is entirely obvious to everyone the price of housing in the UK is determined by a shortage of said planning permissions. So, therefore, we don’t want the creation of a special system for special snowflakes, we simply want the loosening of the planning permission system as a whole. And then indeed self builders can run alongside more commercially minded organisations and may the best man win.

Celebrating the success of the free school system

This is a welcome success in the free school system that we should celebrate:

The government’s flagship free schools programme has been dealt a blow with the announcement that a third school is to close after a damning Ofsted report found that leadership, teaching, pupil behaviour and achievement were all “inadequate”, the lowest possible rating.

Durham Free School, which has a Christian ethos and opened in September 2013, has had its funding agreement terminated after being put in special measures by the schools watchdog, Ofsted, after an inspection in November.

It follows the closure of the Discovery New School in east Sussex, which was forced to shut last year because of poor standards, and the partial closure of Al Madinah in Derby, the country’s first Muslim free school, which had to close its secondary school after a critical Ofsted report.

No, we haven’t gone mad. We really are using the failure of a school or three to celebrate the success of the system. Because this is actually the point of said system. People get to try out new things. Some of those new things will succeed, others will not. But this is exactly what we desire to happen. To have people try new things so as to see what will succeed and what will not.

This is also the defining feature of this capitalism/free market hybrid that should be the prevailing ethos of our society. That failure quickly becomes obvious and thus fails and fails fast. All experimentation will produce failures and without experimentation there will be no advances. So, we desire a system that experiments and one that quickly identifies those inevitable failures, closes them down and gets on with another round of experimentation.

TYhis is just what the free school system does: it’s therefore a success story that a failure has been spotted and dealt with. Because that’s the damn point.