So, voluntary cooperation works again then

There really is, as Garret Hardin pointed out, a problem called the Tragedy of the Commons. When a resource is exploited on an open access basis (ie, a Marxian one) and if demand on that resource is greater than the regeneration capacity then some form of management is required or the resource will be exhausted. In the modern era this means that the bureaucrats get to write lots of regulations. However, as Elinor Ostrom went on to get the Nobel for pointing out, it doesn’t have to be this way:

The local Vezo people subsist, on average, on $1.72 a day, well below the $2 a day official poverty line, and depend on fishing. After detailed discussions with the charity .and in village meetings, they decided to institute a series of two to three month closures of just a fifth of their octopus fishing areas, to give stocks time to recover. Just a single, experimental such closure, in 2004, has so far been followed by more than 100 others along the southwest coast.
The results, the study shows, have been dramatic. Octopus catches in the month after the closures – carried out under traditional laws, and enforced by the local communities themselves – are seven times as great, on average, as in the month immediately before them. Partly this is down to a big influx of fishers to the newly reopened areas, but – even so – individual catches almost doubled. Average incomes shot up by over 130 per cent, and did not fall significantly during the closure periods because the people then directed their efforts to the 80 per cent of their areas that remained open.

An octopus fishery is hugely well suited to such a system. Relatively short lived creatures (perhaps 6 months in the wild) and they usually die shortly after their one mating extravaganza. But Ostrom’s point was much more than that, it was that voluntary cooperation, in a group small enough to be able to cooperate properly (up to some few thousand people perhaps), can indeed solve these sorts of problems. Perhaps, as here, people might need to be told how to do it but that’s fine, none of us know everything.

Of course, as all three of Hardin, Ostrom and Coase have pointed out, not all problems of this type can be so solved. Which means that our necessary trick is to work out which ones can be and to leave those to voluntary cooperation to solve. Those that absolutely do require government intervention (which would need the cooperation of tens of millions perhaps, thus requiring that element of compulsion that only government does have) would, well, they’d need government action.

That is, we should be cutting government back to only those things which must be done and which can only be done by government. The rest of it, the stuff we can do for ourselves, we’ll get on with ourselves.

Notes from a ‘slum-dweller’

Yesterday was quite a heavy one for the ASI Twitter accounts, with what seemed like the world and his politically-correct wife piling onto one the student winners of our ‘Young Writer on Liberty’ competition for his suggestion that Britain could benefit from the creation of slums.

Clearly, ‘slums’ is an evocative and emotionally-charged word: As the author conceded, there probably wouldn’t have been any pushback if he’d just titled the piece ‘Britain needs more microflats for dynamic urban communities’. And perhaps the title was ultimately misleading, because the post didn’t actually agitate for open sewers, no electricity and dysentry for the UK’s most vulnerable, but instead relaxing restrictions on the type of homes which may be built. Still, the competition asked for bold and original thinking, and that’s exactly what we got.

A common response to the article was (in more safe-for-work terms) ‘Pah! I’d like to see the author actually live in the kind of odious accommodation he calls for!’, and other retorts based on the idea that living in a sub-regulatory optimal stock of housing would in fact be unbearable. So, at this point I’d like to take one for the team, and say a few words in defence of slums. For, you see, I’m something of a ‘slum dweller’ myself. (You know what, I very much object to suggesting that where I live is a ‘slum’. But it fits the definition by reference of the original article, namely housing which fails to meet ‘acceptable’/ legal living standards, and would be labelled as such by critics).

I’m part of a growing group of ‘property guardians’, who protect and look after a range of disused buildingsfrom houses to churches to schools and offices—while they’re unoccupied and waiting to be refurbished, demolished or repurposed. With the company I’m a guardian for, none of the properties have gas, and they have only limited hot water points. They’re unfurnished, often with stripped-out floors, walls and kitchen equipment.  When they first come to be occupied they’re usually grimy and dirty, with broken light fittings and rubbish left by the original inhabitants. And, perhaps most controversially, guardians only need receive two weeks notice before they can be kicked out of their current place.

Most people instinctively recoil when they hear all this. But in exchange for these kinds of conditions, guardians get a place to live at far-below market rent, often in a prime location, and with a amount of living space otherwise unobtainable.

I’m currently living in an old library-cum-theatre-cum-community space in South-East London (see picture above), which was initially inhabited by squatters after the council closed it down. The first guardians to move in reported mouse droppings (from cannibalistic mice, it turns out, for they proceeded to eat my taxidermy collection), people’s urine and general filth. It’s covered in warnings about the asbestos, and we wash in temporary showers by the old cubicled toilets.

There’s no way in hell that these kind of properties would get built for human habitation.

You wouldn’t be able to put a tenant in one, either: The property guardian business only works by circumventing all the regulations and restrictions which apply to the rental market, instead registering guardians as live-in security and granting them a ‘temporary licence agreement’ for a particular room.

But instead of being trashed as exploitative and unconscionable, these property management companies (rightly) win awards for the innovative and socially beneficial service they provide. In London, such schemes are so oversubscribed that prospective guardians sometimes literally race to a new property to claim a space in it. I genuinely love being a guardian.

I’m lucky: I could afford a decent room in a normal flat, but I’d honestly just rather not spend close to 50% of my pay packet on one. The people I live with range from students to freelance artists to young professionals, some of whom have also signed up for the ‘luxury’ of lower rent and the excitement of living in unique spaces. For others, the scheme has allowed them to move to London to study or set up their business; an opportunity they otherwise wouldn’t have been able to afford.

That’s the kind of chance we want more people to have. Property guardianship will only ever be a niche offering available to some, while the current system restricts the type and level of further experimentation that can be done with alternative living setups.

The point of this post isn’t to prove that those with lower incomes can get by in far lower living standards, thankyouverymuch. Instead, it’s to show that there already is clear demand for affordable housing which doesn’t conform to current rental standards, and which may fall below the ‘acceptable’ or accustomed living standard for much of the population.

There’s more than one thing we can can do to help the UK’s housing crisis, some of which are more long-term or politically palatable than others. Personally, I still think building over some of that damn green belt is the best way to go. But underneath the clickbait title of Wednesday’s piece, there’s more than a kernel of truth to the idea that given the choice, some will willingly tradeoff regulations and protection for rent. And I’m one of them.

This blessed isle, this England

Sometimes we forget how lucky we are to have so many keeping watch over us.  An elderly woman running a B&B up here on the Norfolk Costa Geriatrica has not been paying attention to this good fortune.  Someone comes in from the village to help with making beds and the like.  As an employer she should have been complying with the rules on Legionnaires’ disease but, and I know it is hard to believe, the guidance had escaped her attention.  Its six pages are merely an introduction to “the Approved Code of Practice (ACOP) and [the] Legionnaires’ disease: The control of legionella bacteria in water systems … technical detail.”

These rules apply to every employer. Specifically she should have been:

  • identifying and assessing sources of risk;
  • preparing a scheme (or course of action) for preventing or controlling the risk;
  • implementing and managing the scheme – appointing a person to be managerially responsible, sometimes referred to as the ‘responsible person’;
  • keeping records and check that what has been done is effective;

There are about 300 cases of the disease a year about 40% arising from overseas travel.  The UK cases arise in clusters, i.e. one faulty water system typically infects about 10 people who use it.  The numbers have been falling from a high of nearly 600 in 2006.  There are less than 20 cases a year in East Anglia which probably means, allowing for clusters and overseas travel, no cases in Norfolk at all.

This disease is clearly a local problem and, if regulations are needed at all, they should be local and focussed.

But the urge to regulate is a general UK problem not limited to health and safety.  It has grown massively since Margaret Thatcher invented regulators, originally for the utilities, in the 1980s.  We blame the EU but most of it is home-grown.

Universities provide a very different example.  Should they be truly independent as they were for hundreds of years?  After all, the whole point of a university is freedom to pursue knowledge unfettered by bureaucracy. And if they should be regulated at all, by whom?

If you were choosing a university for yourself or a loved one, which regulator would give most confidence in the integrity of that university?

The Open University proudly boasts, on its home website and emails “The Open University is authorised and regulated by the Financial Conduct Authority.”  No better guarantee than that.

Subverting the urge to regulate

Two golf clubs on the Costa Geriatrica north of London play by different rules. Club A pours out regulations and spreads little instructional notices around the course. The new health and safety leaflet is only picked up because it looks like a score card. No one ever reads it. The club even specifies the socks gentlemen are allowed to wear. Club B has none of that. If their Captain suggests a new rule, he is quietly taken to one side and urged to lie down in a dark room until the urge passes. No prizes for guessing which club is the more harmonious.

Brussels and Whitehall both trumpet the need for deregulation and then do the opposite. Last week’s Research Note “EUtopian Regulation” discusses whether total regulation could be reduced by competition between the three factories, global, EU, and member states, and concludes that competition might decrease or increase total regulation. It is not the mechanism that matters, i.e. who regulates, but the will to deregulate. We need to take a hard look at the fundamental causes of the urge to regulate and then consider how the vice can be cured.

Yes, it is a vice. For example, complaints about the NHS have grown proportionately to the increase in its “management”, while malpractice in the City has grown in proportion to the number of regulators. I’m not suggesting that correlation is causality, merely that rule-making has improved satisfaction neither in the NHS nor in the banks, nor in golf clubs.

The drivers of regulation are at least threefold:

Cause One is the rise of the lobby group. Unions, NGOs and save-the-worlders all claim to represent ordinary people in pressing for additional regulations. Alongside all those telling government how to spend other people’s money, are those telling government to stop us doing whatever we happen to be doing. In a democracy, we should be free to express our opinions but that is not the same as getting the law changed to remove our freedoms. We should be governed by those we elect, not by those who think they know better. They should be taxed, for a start, on their gross income in order to compensate society for the amount of governmental time they waste.

Cause Two is the excessive number of levels of law-making and law-makers at each level. Every single one of them, like the Captain of a golf club, wants to leave his or her mark on society, to be famous for some Anti-X Act. We even hand out CBEs to these controllistas. Much better would be to reserve medals and pensions for those civil servants who can show that they have simplified and improved our lives. Performance should be measured by outcomes, not activity, i.e. the net reduction of regulation they have achieved.

Cause Three is the excessive number of supposedly independent regulators who have become arms of government. Margaret Thatcher introduced regulators to provide proxy-markets where competition did not exist, e.g. telecoms. The idea was to benefit consumers. Some still push prices down from time to time but too many are now working against consumers, e.g. imposing “compliance” costs, in order to carry out the wishes of government. As government in other colours, we should insist that regulators are funded not by levies on the private sector, but transparently by the government they represent. The squeeze on public expenditure to balance the books would then help bring sanity to regulation.

How can we subvert the urge to regulate? These three solutions should help but we need a much bigger change in the establishment mindset than that. It happened when nationalisation was found to fail and it will happen one day when we recognise the dangers to innovation, entrepreneurship and competition created by these factories of regulation. Bring it on.

Five reasons to hate Sunday trading laws

  1. They’re inconsistent and arbitrary. If you’re a waiter, factory worker, nurse, construction worker, taxi driver, bus driver, security guard, journalist or even a retail worker at a small shop you can and often do work at any time on Sundays. The places that have to close at 6pm are ‘big’ shops. Bizarrely, ‘big’ is defined as being 281 square metres or bigger. That doesn’t make much sense and any argument that retail workers are ‘protected’ by Sunday trading laws would also imply that all those other workers are being exploited.
  2. Life isn’t nine-to-five, Monday-to-Friday, any more. Not that it ever was, really. Sunday trading laws inconvenience people who haven’t had time to buy their groceries during the rest of the week, and force them to rely on expensive local shops instead of cheaper supermarkets with more choice. For example, I like to do my shopping at my local Lidl. If I spend Sunday afternoon in the park with my friends instead of doing my shopping, and I need to buy something for that evening’s dinner, I have to pay twice the price for a smaller range of inferior products at the Tesco Express down the road instead. That’s annoying. If I had a family to feed, it would be expensive.
  3. The high street – and probably even small shops – will be better off. When Sunday trading laws were suspended during the Olympics, sales outside of London increased by 6.2%. They only increased by 2.8% inside London, probably because people were warned off the crowds. That’s good for smaller retailers too – no self-respecting retailer wants to exist just because her competitors are banned from trading, and more people out shopping means more customers to go round for everyone. They don’t seem to have suffered during the Olympics suspension. If you’re worried about online retailers destroying the high street, this is one way to level the playing field.
  4. Workers will have more hours available. It’s easy to talk about ‘protecting’ workers by stopping them from working on Sundays. But what about the ones that want to work then? Employers often end up having to pay workers more to work on Sundays – if you don’t think Sundays are sacred and want to earn a little more cash, the end of Sunday trading restrictions is good news for you. (Back when I was a teenage McDonald’s crew member, Sunday hours were a godsend.)
  5. Lots of people actually like shopping. It’s very common to enjoy trips to the high street or the shopping centre with some friends. If you are interested in food, big grocery stores like Waitrose, Asda and Whole Foods can be interesting places to explore. Browsing clothes shops and buying new things can be really fun. I’ve seen lots of people sneer at this on Twitter, and no doubt it’s terribly gauche, but government shouldn’t be in the business of forcing snobs’ tastes on the rest of us. Some of us actually like consumerism.