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"Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice" - Adam Smith

The pole or the dole?

Written by Karthik Reddy | Saturday 07 August 2010

Minister for Employment Chris Grayling said earlier this week that employers in the adult entertainment industry will no longer be permitted to use job centres to search for workers to fill posts involving “direct sexual stimulation.” According to The Telegraph, the restriction will apply to a broad variety of professions that will include strippers and topless female bar attendants. Mr Grayling stated that he issued the ban in order to protect the unemployed from “exploitation.” Mr Grayling’s decision is an unfortunate instance of legislated morality that will harm, not help, the unemployed.

Placing a job advertisement does not force anyone to do anything; a job advertisement merely relays to job seekers information about the different types of work for which people are willing to pay. If a person finds such work to be exploitative, as Mr Grayling does, they will simply not take the job. But if the person finds it to their advantage to be a stripper or topless bar attendant, the advertisement simply makes them, and their potential employer, better off by facilitating the transaction. The new regulation will merely make it less likely that such people find gainful employment in a timely fashion.

Though denying such employers from using job centres is admittedly quite different from an outright prohibition of such work, Mr Grayling’s decision is nevertheless a worrisome intervention. Government job centres essentially subsidise the distribution of job-related information in a community. All members of society, including owners of strip clubs and topless bars, pay for this subsidy. The prohibition on advertising certain types of jobs ensures that the subsidy is directed to certain types of work that Mr Grayling finds to be acceptable, and denied to other types of work that he personally finds to be “exploitative.” Not everyone agrees with Mr Grayling’s assertion that strippers and topless bar maids are exploited, and the ban consequently represents the arbitrary imposition of Mr Grayling’s personal preferences upon job seekers.

As long as an employer is looking for an employee to fill a legal job, he or she should be permitted to use government-funded job centres. Instead of helping workers, the ban will prolong the duration of unemployment for some merely to score points with voters who happen to agree with Mr Grayling’s concept of morality.

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Moving on up

Written by Karthik Reddy | Friday 06 August 2010

Some much-needed changes may soon arrive to council estates around the country, according to recent announcements by members of the government. The Prime Minister, speaking in Birmingham on Tuesday, explained his desire to transition to fixed-term council house tenancy in order to better accommodate the changing needs of tenants, as well as encouraging social mobility. Housing Minister Grant Schapps announced the introduction of a National Affordable Housing Swap Scheme, in which tenants in public housing who want to move for whatever reason may exchange houses with anyone in a similar situation in another part of the country.

The status quo is unfair to both taxpayers and residents, and causes considerable economic damage by reducing the flexibility of the labor market. Under the current system, council residents enjoy lifelong tenancy, and can even transfer council houses to their children. 1.8 million people are on waiting lists for social housing, and tenants’ ability to remain in social housing indefinitely seriously undermines any incentive for individuals to move out of subsidised housing, which in turn damages the government’s ability to provide for those who truly are in need and squanders taxpayers’ money. Moreover, despite the existence of some “mutual exchange” programs, many public housing tenants are still unable to move without giving up their house. The result has been an unreasonable system in which 234,000 units of social housing are overcrowded, while 456,000 others have excess capacity. Both the policy of lifelong tenancy and the difficulty of moving make it difficult for people to move to areas of the country where they may find better paying or otherwise more rewarding jobs. This not only harms the individual by preventing them from advancing themselves, but also prevents Britain from adjusting to new economic conditions in a swift manner. An end to lifelong tenancy would ensure that those who occupy public housing are those who need it the most, and the housing swap scheme would dissolve much of the rigidity present in the current system.

The discussion about social housing, however, must go further. A considerable proportion of Britons, approximately 13%, live in some sort of social housing, and demand for subsidised housing clearly exceeds the supply. Waiting lists and rationing are not an efficient way of allocating any scarce resource, housing included. More privatisation of the public housing stock and a more relaxed and realistic approach to housing and planning regulations would allow more people to make their own decisions about where they live, and would permit developers to step in and fill the demand for low-cost housing.

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Don't have a cow

Written by Karthik Reddy | Thursday 05 August 2010

The Food Standards Agency created a considerable row when it announced this week that meat from a cow born in the United Kingdom from the imported embryos of a cloned American cow was sold and consumed last year. British and European regulations prohibit the sale of products intended for human consumption from cloned animals without prior authorisation, which has never been granted. The discovery incensed animal rights activists, and public outrage has erupted due to deep mistrust of cloned and genetically modified food, as well as the failure of the Food Standards Agency to detect the products in a timely manner. Two lessons can be learned from the issue.

First, the issue highlights the inability of the government to regulate effectively, even in matters as trivial and simple as the one at hand. That the farmer involved in the controversy, Steven Innes, appears not to have tried to circumvent the law, further highlights the elusiveness of effective regulation. If the government is unable to draw up intelligible and enforceable regulations on mundane issues, it is unlikely that it will be able to fare much better with more complex regulatory schemes.

Second, it is high time that Britain and the European Union become more accepting of scientific advancements that have improved, and will continue to improve, agricultural productivity. Cloning of animals is one such improvement. Farmers and scientists in the United States have experimented with the cloning of animals in order to increase milk and meat production. Meat and other products from cloned animals have proven to be just as safe as products from naturally conceived animals, and the cloning of animals does not affect any other individuals other than those who choose to produce and consume such products. If the ban were lifted, those who do not wish to buy products derived from cloned animals would remain free to do so, the costs of related regulation would be eliminated, and agricultural productivity could improve.

The shock over the cloned cow should be over the observation that there was shock at all. That Britain outlaws a non-offensive and potentially productive enterprise that is successfully practiced elsewhere in the world without incident is unfortunate, and harms the country and its farmers.

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A win for the people

Written by Karthik Reddy | Sunday 01 August 2010

 The Coalition government should be lauded for Friday’s announcement of a plan to permit people to exercise control over inordinate council tax hikes that have increasingly squeezed the budgets of English households across the country. Local Government Secretary Eric Pickles announced his intention to allow people to decide through a referendum process whether to accept or reject council tax increases that exceed the rate of inflation. This is expected to be in place by March of 2012. Under the current system, Whitehall decides when an increase is “excessive” and must be capped. The move is positive for two reasons: it will likely arrest the dramatic increase in such taxes, and will allow people to better control their local governments.

First, the growth of council taxes, which has been unacceptably high, will at long last be controlled by the measure. Council taxes in England have nearly doubled over the last decade; the average council tax per dwelling in the country has increased from £656 in 2000 to nearly £1,200 today. Last year, the Telegraph reported that the increase in council taxes over the preceding decade outpaced inflation by a factor of four. That the referenda, which can be costly to administer, will be funded by the councils themselves will provide significant incentive for councils to make difficult budgetary decisions instead of irresponsibly raising taxes and further burdening families.

Second, the measure puts people back in control of their local governments. The central government is ill suited to make determinations about tax rates in local communities. Whitehall does not have sufficient knowledge of local concerns and cannot make appropriate determinations about which tax increases are “excessive” and which are acceptable. Such control belongs to the people, who know their communities much more intimately than bureaucrats in Westminster. Local government needs to be checked in some fashion, and it is only logical that such a check should come from the people most affected by its decisions.

The recent announcement is a heartening indication that the Coalition government has faith in the ability of communities to manage their own affairs. The referendum plan is a step in the right direction that further empowers the people, and simultaneously forces governments to make the crucial tradeoffs that English families must make everyday.

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Fixed retirement age to be scrapped

Written by Karthik Reddy | Thursday 29 July 2010

The government has announced that the default retirement age will be phased out by October 2011. The default retirement age permitted employers to retire workers at the age without justification, and is an exception to United Kingdom labor law, which prohibits employers from making employment decisions on the basis of age and forces them to provide justification for dismissing a worker. Personnel groups and those supportive of the elderly cheered the announcement, while business groups such as the Confederation of British Industry expressed concern about the law. There is merit in both reactions.

The decision to scrap the default retirement age reflects the growing need for Britons to continue working later, given that people are living longer and healthier lives. The average British male aged 65 today can expect to live past the age of 82, and the average 65 year-old female is expected to live even longer, until the age of 85. This is a full five years longer than elderly Britons lived in the 1970s. The retirement age, however, has failed to increase in commensurate fashion, and these lengthy retirements require substantial taxpayer support. In light of this problem, the spirit behind the decision to scrap the retirement age is encouraging, and the benefit it is hoped to bring to the strained public budget is welcome.

Yet there exists another side to the coin as well. The default retirement age allows for a certain degree of flexibility in that it permits employers and employees a chance to reevaluate the employment contract, and to terminate it if it is not beneficial to one party. The law does not force workers to retire, and is merely a mechanism that alleviates the burden of labor market regulations. When the changes go into effect, employers will be more constrained, and will be forced to undergo a costly firing process to eliminate redundant or underperforming elderly workers. The semblance of at-will employment that is permitted to exist under the current law will disappear.

Sixty-five is certainly an inappropriate retirement age for many Britons, but the law as it exists now encourages this. Yet instead of further regulating the market, the government could relax the regulatory requirements of firing a worker, whether they be elderly or young, which would, in turn, lessen the risk of hiring a new worker. The decision of when to retire could be made entirely by the individual, without any government interference that encourages sixty-five as the appropriate age. As we have discussed before, we could divorce retirement from the collection of state benefits altogether. In any case, the government’s changes are a welcome start to a much-needed national discussion of how to cope with Britain’s ongoing demographic shift.

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Against sin taxes

Written by Karthik Reddy | Monday 26 July 2010

Free societies are those in which government minimizes its intrusion into the lives of its citizens, intervening only to protect individual liberty. Such government makes no effort to use the force of law to impose upon individuals whatever system of values or concepts of morality it may happen to espouse. The British public is generally accepting of this doctrine of non-interventionism, most perceptibly in areas of civil liberties; the swarm of criticism of the recent French law restricting the Islamic niqab, along with Damian Green’s prompt rejection of such an “un-British” law in the United Kingdom, is merely one example of the persistent acceptance of diversity of belief and expression in this nation.

Yet even in the United Kingdom, such tolerance has stiff limits. It does not extend to economic freedoms, as the government regularly pushes us to live our lives in a manner more amenable to the opinions and beliefs of the majority. The British government accomplish this sly form of paternalistic regulation through the imposition of a number of sumptuary taxes that seek to discourage the purchase and consumption of goods that society considers to be undesirable, such as alcohol and tobacco products. The taxes are a popular way to raise revenue, as they are targeted at behaviour considered either unhealthy or otherwise disapproved of by the majority of the public.

While the ability to raise revenue and simultaneously achieve some communal goal such as improved public health may be appealing, sin taxes must be recognized as the social engineering projects that they are. Governments should not seek to discourage or encourage any activity, save for those activities that interfere with the rights of other individuals. If an individual voluntarily chooses to engage in a non-offensive activity, such as enjoying a glass of wine, the government should respect their preferences and refrain from “nudging” (or, after Alistair Darling’s 2008 dramatic sin tax hike, “shoving”) the individual to make a decision desired by the state. Writing a tax code that discourages the consumption of a particular good based on the sole virtue that one is considered “undesirable” is a dangerous step for any society to take, as it imposes communal values upon the individual. In the United States, for example, the discussion of sin taxes has gradually extended from alcohol and tobacco to dietary habits and pornography.

It would be quite controversial for the government to levy a special tax on the sale of the niqab, in order to discourage its use. Similar resistance to behavioural revision should be applied to sumptuary taxes on alcohol and tobacco, as well.

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EastEnders: A lesson in public broadcasting

Written by Karthik Reddy | Friday 23 July 2010

The recent controversy created by the BBC’s popular soap opera EastEnders highlights yet another problem with state run television. The BBC took hundreds of telephone calls and emails over a controversial scene in which a Muslim character, struggling to reconcile his faith and sexuality, slams a Koran on the floor. The scene was thought by some to be offensive to the Islamic faith. The incident does not mark the first time the soap has been the subject of public criticism. Over the course of its twenty-five year history, it has been variously accused on multiple occasions of racial stereotyping and insensitivity, promoting homosexuality, defaming the police, and anti-religious bias.

The seriousness with which these complaints must be addressed is peculiar to a system of heavily regulated or publicly operated media. As the government forces anyone with a television to fork over £142.40 for the BBC, the public broadcaster must attempt to avoid any and all offensive broadcasts. In a society as diverse in opinion as the United Kingdom, this is a nearly impossible task, and the government undoubtedly collects money from some individuals to pay for programming they find to be distasteful. Even if they do not watch EastEnders, Islamic viewers that found the Koran scene to be offensive must still pay for the content to be broadcast to their fellow citizens.

In a market system without a publicly funded BBC, however, viewers would have choice, and could vote with their money and attention, allowing broadcasters to compete for advertising and subscription revenue by creating content that viewers enjoy. If EastEnders were a privately created program aired by a private broadcaster, anyone who found the show to be offensive could simply change the channel to something more amenable to their tastes. This would be a more efficient and just system than the regulatory process overseen by Ofcom, and perhaps the NHS would could reduce its budget for hypertension treatment for Britons who would have no longer have reason to fume about the expenditure of their hard-earned license fee on content they find to be disagreeable.

While many Britons undoubtedly enjoy EastEnders and other BBC programs, the repeated grievances are an indication that the current system could be operated in a fairer and more appropriate manner that would allow viewers to choose where their money is spent.

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Theresa May and civil liberties

Written by Karthik Reddy | Sunday 18 July 2010

Home Secretary Theresa May announced in the House of Commons this week that the Coalition government would review invasive security legislation developed under the Labour government in response to terrorist attacks at home and abroad throughout the past decade. May stated that the government would work to “restore ancient civil liberties” that were increasingly at odds with Labour’s national security agenda.

A comprehensive overhaul of such legislation is badly needed, government power has increased spectacularly at the expense of civil liberties. Whereas prior to 2000 detention without charge was limited at twenty-four hours, the Terrorism Act 2000 permitted the police to detain any person without charge for up to seven days. This limit was increased to fourteen days in 2003, and to twenty-eight days, the longest of any Western democracy, with the passage of the Terrorism Act 2006. Parliament has also granted the police the right to stop and search any individual without cause, issue control orders, and exercise broad surveillance powers that extend to every type of communication. Britain has the highest density of CCTV surveillance cameras in Europe, and, with the power to forcibly extract and indefinitely hold DNA from anyone merely arrested on suspicion of having broken the law, the nation’s government maintains the largest DNA database in the world.

Though the review is ultimately meaningless without action, it appears that the Coalition government is serious about its commitment to restore civil liberties in the nation. Legislation scrapping the national identity card has been introduced, and May has pledged to better regulate information accumulated from CCTV cameras. The government will consider ending the use of control orders, twenty-eight day detention without charge, and stop-and-search. It appears that after years of suffering increased restrictions, liberty might finally enjoy some room to breathe.

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Don’t hide the tobacco

Written by Karthik Reddy | Saturday 17 July 2010

The Department of Health recently indicated that the government might overturn an anti-tobacco law passed by the Labour government during its last months in office. The law has not yet been implemented, but will prohibit cigarette vending machines in pubs and force retailers, including convenience stores, to remove displays of cigarettes. It was argued that the legislation would reduce children’s access to cigarettes and other tobacco products, as well as improve public health by reducing the rate of tobacco use in the general public.

The law, however, is unnecessary, and the recent news from the Department of Health is a heartening signal that the Coalition government may be willing to retreat from Labour’s regulation reflex. The United Kingdom does not need further legislation to prevent children from consuming tobacco products; existing law already prevents tobacco vendors from selling to those under the age of eighteen. Instead of merely enforcing the smoking age, the Labour law imposes needless costs on businesses, which would have to reconfigure their shops to accommodate the new regulations. Furthermore, the British government has already placed severe restrictions on the tobacco industry in an attempt to reduce smoking rates; the advertising of tobacco products was banned in 2003, and a ban on smoking in public was implemented in 2007.

More important than the regulatory costs and redundancy of the law is the paternalistic attitude that underlies this and the rest of the regulations that are the product of the crusade against tobacco use. Such paternalism is dangerous because it subverts self-determination and places in its stead values that are imposed by the government. British adults are not ignorant of the health effects of smoking and are fully aware of the consequences of their actions; those that choose to smoke merely choose to accept these consequences. For those who have supported restrictions on tobacco products, the health of the individual is of greater priority than his or her wishes and preferences. While improving health is certainly a noble goal, the substitution of communal goals and values for individual autonomy is a dangerous path for British society to walk along. It is time to stop and turn around.

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Jon Gaunt’s loss is Britain’s too

Written by Karthik Reddy | Thursday 15 July 2010

Freedom of speech in the United Kingdom suffered another blow yesterday when shock jock Jon Gaunt lost a legal fight with the regulator Ofcom, which had censured Mr Gaunt for having verbally attacked Michael Stark, a councillor from Redbridge who defended his borough’s decision to prevent smokers from being foster parents. Mr Gaunt’s rhetoric became increasingly heated during the interview, which took place in November of 2008, and he proceeded to call Mr Stark a “Nazi” and an “ignorant pig.” Mr Gaunt did, however, issue two on-air apologies during the same program.

The high court decision found that Ofcom was correct in taking action because Mr Gaunt “became increasingly abusive, hectoring and out of control,” and his use of “ignorant pig” had “no contextual justification at all and was said with such venom as to constitute gratuitous offensive opinion abuse.” Though Mr Gaunt was indeed vindicated for his use of the word “Nazi,” which the court ruled was protected political speech, the decision nevertheless begs the question of whether the regulation of speech by government agencies such as Ofcom is proper for a country that takes pride in its civil libertarian tradition.

Mr Gaunt was intolerant and rude to Mr Stark, but certainly his rhetoric did no measurable harm to Mr Stark, nor did his words incite violent behaviour or pose a threat to security. Listeners similarly do not need any protection from “offensive” content; those who did not appreciate Mr Gaunt’s behaviour retained the ability to switch to another station or simply turn off their radio.

The subjectivity involved in the regulation of speech to eliminate “offensive” or “indecent” content in a situation as harmless as Mr Gaunt’s renders the practice a dangerous enterprise for those concerned with free speech and expression. Nor is Mr Gaunt’s case exceptional; the British government imposes a great deal of restrictions on what may be said or written in the country. Ofcom prohibits news broadcasters from speaking their minds on the air, while broad interpretations of laws against incitement to racial and religious hatred have been used to bar people such as Dutch politician Geert Wilders and American talk-radio host Michael Savage from even setting foot in the country. Free speech implies the ability to utter unpopular or offensive statements, which is an important safeguard of liberty lest our own words someday be classified as such. Mr Gaunt is merely another victim of the government’s tight control over the airwaves.

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