The Lord’s Digital Agenda

On Tuesday the House of Lords Select Committee on Digital Skills released the 144-page report ‘Make or Break: The UK’s Digital Future’. It’s a typical government report, calling for ‘immediate and extensive action’ in something or other — and in this case, unifying government’s current, disjointed digital initiatives with the launch of a grand ‘Digital Agenda’. (This masterplan includes such fabulous ideas as the middle-aged men in central government ‘future-proofing our young people’ through things like bolting-on a digital element to all apprenticeship schemes.)

One of the report’s most newsworthy findings was London’s poor broadband speed, comparative to other European capitals. In a ranking of their average download speed London came 26th — nestled between Warsaw & Minsk —whilst the likes of Bucharest, Paris and Stockholm topped the chart. London also came 38th in a rating of the UK’s cities’ speeds (although it’s worth noting that Bolton, the UK’s fastest city, would make the European capital ranking’s Top 10). The Lord’s report is also concerned with the persistence of internet ‘not spots’ in urban areas, universal internet coverage and the rollout of superfast broadband. In response, it calls on the government to classify the internet as a utility service, with the desirable goal of universal online access.

It goes without saying how vital digital connectivity is to the modern economy, as well as the importance of staying internationally competitive. However, a new, centrally-dictated ‘Digital Agenda’ is probably quite an ineffectual and expensive way of boosting the digital economy.

Despite the House of Lords’ fears about the speed of superfast broadband rollout, coverage has increased from 55-60% of the UK in 2013, to 70-75% in 2014. And, whilst the report holds up Cape Town as an example of a city providing universal broadband, this won’t be ready until 2030. In the time it takes for the state to roll out the chosen digital infrastructure, it may already be out of date. Whilst many are still choosing between regular or fibre optic broadband,  landline-free 4G home broadband is the latest offering to hit London. At the same time, eyes are already on  5G, and the new capabilities it can bring.

Treating the internet as a public utility is also problematic from a free-market standpoint. Doing so could, for example, lead to calls for more government involvement in the deployment and update of internet infrastructure. However, a study by the Mercatus Centre looked at American municipal government investment in broadband networks across 80 cities, and found that for the billions of dollars of public money spent, there was little community or economic benefit.

It’s also the type of thinking which has led to America’s ‘Net Neutrality’ debate, where, on the behest of Obama, the Federal Communications Commission has proposed to regulate internet service providers as ‘common carriers’, and in doing so, subject the net to a 20th century public utility law originally devised to deal with the telephone monopoly. Ostensibly designed to protect consumers from the creation of ‘anti-competitive’ internet fast lanes for big content producers, Net Neutrality legislation threatens not only the speed, price and quality of internet provision, but the autonomy of ISPs and investment at the core of the net.

Whilst the Lord’s proposed ‘Digital Agenda’ might seem far-removed from such heavy-handed state activity, a government who considers it their duty to take online and ‘digitally educate’ every single citizen risks heading down an increasingly interventionist and expensive path.

Liberty League Freedom Forum 2015

Tickets to this year’s Liberty League Freedom Forum are now on sale. Now in its fifth year, LLFF is the UK’s largest gathering of the next generation of pro-liberty enthusiasts. 2015’s Freedom Forum takes place between Friday 27th – Sunday 29th March, at Guy’s Campus, KCL, London.

The weekend will feature seminars with leading academics, activists and professionals, including the ASI’s Sam Bowman on What’s wrong with social democracy. Other sessions include:

  • Introductions to classical liberal, objectivist, anarchist and left-libertarian thought,
  • Panels on free-market feminism, current threats to liberty, and digital surveillance,
  • Magna Carta: Birth of democracy or historical fantasy?
  • Laissez-faire monetary economics, Bioethics, Bitcoin and much, much more.

Practical workshops will cover skills from campaign training to journalism, with evening socials to share many a drink with like-minded attendees.

A ticket to Freedom Forum covers speaker sessions, food, drink, and evening socials, with a limited number of hostel accommodation spaces available. Tickets start at just £25, but book before 8pm tonight (Weds, 11th Feb) to get 25% off  the standard price.

Full information about the conference, speakers and the schedule can be found on the LLFF15 website, and on the Liberty League Facebook and Twitter. Liberty League is a network for pro-freedom students and young professionals, but all ages are welcome at Freedom Forum.

The death of the Marine and General Mutual

An interesting little story of the transience of corporate life here. The country’s oldest company is about to disappear:

An insurance firm that can claim to be the oldest registered British company still in existence is about to disappear, following a takeover by Scottish Friendly.

Marine & General Mutual was incorporated in 1852 as a life insurance provider for teetotallers – who were considered a bigger than average risk at the time, given the dangers of drinking Victorian tap water.

M&GM, whose early customers include several passengers on the Titanic, has the company registration number 00000006. The five firms that were registered with lower numbers than M&GM no longer exist.

It’s not entirely what it seems, in that there are businesses still extant that are older than this. It’s partly a function of how late it was that it was possible to incorporate without a specific Act of Parliament to allow you to do so.

But even so it’s a nice example of the transience of corporate life. Paul Ormerod has done interesting work on this (as have others in the US) pointing out that the giants of one generation tend not to be the corporate giants of the next. Companies fail, are eclipsed, merged, bought and generally just disappear over time. The image that some to our left have of corporate power being unbreakable simply isn’t true in any manner.

Subsidising green tech could be self-defeating

One of the only arguably beneficial impacts of taxing petrol as heavily as the government does is, theoretically, to encourage the production of ‘fuel-efficient’ vehicles. A tax on fuel increases its price and consumers will seek fuel-efficient alternatives to current vehicles. This increased demand has encouraged car manufacturers to develop vehicles that are more fuel-efficient. Since subsidies are the inverse of taxation, the effect of subsidising green technology on innovation is inverted.

Subsidising green technology means that producers have less incentive to continue innovating and producing even more efficient technology since the government basically favours the status quo or a particular benchmark. If we must have subsidies, this benchmark (as in, a certain level of efficiency) must be constantly revised upwards so that: 1. We don’t subsidise as many firms’ products, 2. Cash transfers to firms require constant innovation and improvement. Cutting back subsidies for fuel-efficiency and green technology in conjunction with these high fuel taxes (let’s face it, they’re not coming down anytime soon) should encourage innovation whilst tackling the budget deficit.

A similar logic applies to subsidising solar panels, wind farms etc. because the government has essentially signalled to the producers that, although their inventions are not cost-effective, the remaining burden will be imposed upon the taxpayer. This means that these alternative energy sources will not be developed to their full potential as quickly as they would otherwise be.
Why delay innovation on the basis that we are happy with what we have compared to what we used to have? Surely, we should encourage the production of new, more efficient ‘green’ energy technologies sooner rather than later; this can be achieved by cutting subsidies for existing green technologies and thereby preventing such firms from being comfortable with inefficiency.

Minimum wages encourage hostility towards migrants

Having a minimum wage is what makes ‘illegal immigration’ feasible. Most illegal immigrants are unskilled, poorly paid workers; Epstein & Hezler (2013) say that “Minimum wages play an essential role since they put a limit on local workers’ and legal migrants’ wages. Thus, under certain circumstances, the probability of employing illegal workers is increased.” Incidentally, the authors also suggested that one way to reduce illegal immigration would be to increase legal immigration (assuming a constant minimum wage). According to a survey commissioned by the Migration Observatory at the University of Oxford, “Among respondents who want immigration reduced overall, 54% said that they would like reductions either “only” (28%) or “mostly” (26%) among illegal immigrants”.

Illegal immigrants fill a gap for employers who cannot survive by hiring people at or above the minimum wage and who also cannot attract legal residents that are willing to break the law and work for less than minimum wage. Firstly, if there were no minimum wage, then employers would have less incentive to employ illegal immigrants and would, instead, turn to legal residents to offer their labour for these rates. This would simultaneously empower the unemployed with more opportunities to offer their labour, make entrepreneurship increasingly feasible (especially that of the labour-intensive variety) and significantly reduce illegal immigration.

Whether the contempt toward illegal immigrants is from allegations of criminal activity, taking jobs, etc., this has a spill over effect on the perceptions of immigrants in general. There is an oft-documented tendency for people to stereotype and make sweeping generalisations (even if we are subsequently ashamed of doing so). Hence, any negative perceptions of illegal immigrants contribute to the general degradation of legal immigrants’ status in society.

Furthermore, and perhaps most importantly (depending on who you are), via a combination of both the inflexibility of the labour markets that it contributes toward (and, therefore, of price levels in various other markets) and the controversial illegal immigration that it makes feasible, the minimum wage is one of the greatest barriers to the possibility of free immigration and, therefore, of a world where greater understanding and co-operation between people flourishes.