The government is killing 80,000 people a year apparently

And it's all because of austerity, privatisation and the distressing lack of Environmental Health Officers. No, really, that is the claim:

Thousands of people are dying each year because of the government’s failure to tackle food poisoning, health and safety breaches and pollution, a thinktank is warning.

A new report from the Centre for Crime and Justice Studies (CCJS) claims that lax regulation and weak enforcement are failing to hold businesses in check and are tantamount to state-facilitated “social murder”.

The report, by Professor Steve Tombs, head of social policy and criminology at the Open University, claims that some 29,000 deaths in the UK are attributable toairborne pollution alone. A further 50,000 people die as a result of injuries or health problems originating in the workplace. Each year food poisoning results in 20,000 people being hospitalised and 500 deaths.

The report itself is here. There's ever so slightly a logical problem with the claim though. Let us assume that the evidence presented to us is correct. There are fewer inspections being carried out by those Local Authority employed EHOs. There is also that number of deaths from those causes. This is the result of Tory austerity and Yah! Boo! How Terrible!

However, the important thing we need to consider is whether this change in the regulatory regime is leading to more deaths from these causes or fewer. It is possible that having more private sector inspectors, more industry involvement and less LA, is improving the system, not making it worse. We don't say it is doing so you understand, only that it is at least potentially feasible. Just as the case being made, that less LA involvement is making the system worse is feasible. But that is the case that needs to be studied. Is the new system increasing or reducing the number of people dying from these causes? 

We don't know and on a Sunday morning we're not inclined to go look it all up. Which is why we would rather hope that a report trying to make the case one way or the other would provide some evidence. Which this report does not. It doesn't even begin to discuss the subject. It simply states that there's less LA and EHO involvement and also that this number of people are dying. There isn't even a start to an examination of whether those numbers of deaths are rising or falling.

The paper thus fails the most basic logical test of its own assertions. We're not very interested (not unless we're the union that EHOs belong to) in how many EHOs there are: we're interested in how good the regulatory regime is. Which is the one thing not considered in the slightest here.

Seriously, measuring the effectiveness of regulation by the number of bureaucrats employed to regulate isn't the way to do it. Must try harder, F - is your grade, see me after class.

The appalling effects of the buy to let boom

We have to admit that we think that this is a bit of a strange thing to be complaining about:

Buy-to-let landlords blamed for decline in DIY among under-30s

Figures suggesting spending on DIY among ‘generation rent’ has fallen by third since 1996 coincide with report showing age of first-time buyers still rising

We could understand that a retailer of materials used to do the DIY might complain a bit and the providers of the same materials to the professionals celebrate a tad, but we're really rather struggling to see the wider significance of this.

Credit card provider MBNA said spending by the under-30s on DIY had fallen by a third since the mid-90s. It blamed the rise of buy-to-let landlords.

We can understand why buy to let landlords might be the cause of this but again are struggling to see where the blame is, or how any blame is justified.

Mark Elliott, of MBNA, said: “Generation rent is usually barred from making home improvements by clauses in their tenancy agreements. Although [overall] DIY spending has grown by 42% in real terms since 1996, an increase in the proportion of people renting in the UK could impact the sector’s growth in the future.”

Landlords are required to let their properties in a lettable condition. That is, not requiring the tenants to start grouting the bathroom. Thus the rise in rental properties leads to a fall in the number of people having to grout their bathrooms. Yes, we get the picture, the chain of logic. But why is this a bad thing?

That cars are more reliable these days and thus we spend fewer rainy afternoons hitting them with hammers is a good thing. That supermarkets present food in easier to cook versions saves us time in the kitchen, a good thing. That landlords provide property that doesn't require we mash our thumbs to make it habitable is a good thing, no? 

But that really does seem to be what they're complaining about. Buy to let produces habitable dwellings: we must complain about this.

People don't get it on CEO pay

Recently I debated executive pay on Twitter with the FT's Kadhim Shubber, The Times's Daniel Finkelstein and others. I had written a letter to The Times arguing that according to a preponderance of evidence, CEOs are actually worth their huge salaries. Indeed, they probably create, and sometimes destroy, firm value worth orders of magnitude more than they are paid.

I used the example of Thomas Cook boss Harriet Green, whose £3m salary was dwarfed by the £400m wiped off the market capitalisation of her firm when she left. Shubber argued she was a bad example, because her departure was accompanied by worse forecasts that also hurt the firm. This is probably fair—perhaps the portion of the loss down to Green herself was small enough that she really wasn't worth it, though I doubt it.

But Shubber went on to argue that it was bad in general to use share price movements as evidence of executive performance, because departures are associated with uncertainty. It is true that investors are likely to value firms lower if the variance of their expected returns—the spread of possible profits and losses—is higher, even if the average returns expected are the same. This is rational given risk averse preferences. But there are a few reasons why this probably isn't the only, or even the main, factor driving the equity movements we see when bosses move.

Firstly, it has a hard time accounting for cases when shock CEO deaths or departures raise the stock price. When poor Steve Ballmer announced his resignation as Microsoft chief the company instantly got around 7.5%—or billions of dollars—more valuable. The stock price rose 39% in the year following. Sometimes executives are having a huge impact, but a negative one. Despite the uncertainty, markets rise.

Secondly, it's not just the stock price that reacts. When there is a shock death of a CEO, or even of a member of a CEO's family, this hurts profitability, investment and sales growth, particularly if the boss is relatively long-tenured, or if the family death is their spouse or child (not so much if it's their mother-in-law).

Thirdly, it's not just death or departure that hurts or improves prices. CEO hospitalisation dramatically hurts firm outcomes, particularly if the executive is young, highly educated, and if the firm is in a rapidly growing business environment—exactly when CEO influence would be expected to matter the most. Similarly, when the boss has more invested in the firm, or when they are measured as putting in more effort, the firm does much, much better. And when firm control is "inherited"—when CEOs dictate the choice of successor to a relative or friend, firms do substantially worse. All of this points to CEOs mattering a lot.

If this is all true, Shubber asks, then why has CEO pay risen so much over past decades. For a while, we only had hypotheses, suggesting that firms were growing ever larger in size, wider in scope, and more complex and globalised in organisation, making the decisions at the top ever more important. But a recent swathe of papers seem to confirm our intuitions and guesses: 1. CEO deaths, always a cost to firms, have become ever more costly recently; 2. bigger firms have always had more expensive CEOs; merely applying this relationship to the growth in firm size 1980-2003 is enough to explain the average pay rise for bosses.

Boards may use rules of thumb to decide on executive pay, but the reason these rules (and the firms using them) survive, is because they are adaptive for firms; they are good ways of setting pay. Small differences at the top end of talent make large differences for firm bottom lines, especially nowadays. Firms lose a lot when their star performers go, and when they don't bid for the best possible boss. People just don't get it: CEOs really matter!

Why are people complaining about what we positively want to happen?

There's a value to things like brands. Obviously, because we will buy things adorned with brands that we know, recognise and trust. Therefore they are valuable to their owners and they strive mightily to protect that value by making sure that the brand and products adorned with it can be trusted. This thus is a very odd complaint:

Doctors warn of big tobacco firms entering e-cigarette market

Royal College of Physicians report says companies may seek to rehabilitate ‘pariah industry’

Well, yes, the replacement of a product that please people but kills them with something that pleases them but does not kill them would appear to us to be a pretty good method of rehabilitation.

But there's a larger point here too. We positively desire those large companies, with their brand names to protect, to be in this market. For their own self-policing will lead to consumer protection. We would illustrate this with reference to the heroin market.

Imagine that we all did the sensible thing and just legalised the stuff. No, not just decriminalised it, made it simply legal. there would then be companies using those standard branding techniques (there are already illegal dealers who do this on a modest scale) to reassure users. Of the purity, dose size, absence of talcum powder ans so on in the formulations. For example, the biggest cause of opiate overdoses in the US these days seems to be the cutting of heroin in fentanyl, another opiate. One with a very much smaller margin between bliss and death unfortunately. A known and legal brand would not survive such cutting and contamination: thus a known and legal brand would not allow it to happen.

And so it is and will be in the vaping market. The economics do not change because of the legal status. Large companies moving into the market with their brands to protect will lead to greater consumer protection over quality issues. That's what brands are, what brands do.

We don't want to be concerned about the giants moving into this territory, we want to encourage them.

The return of class origin to the BBC

We did rather think that Britain had got over this sort of nonsense these days. It's no longer necessary to have an accent that makes the Queen sound positively estuarine in order to get onto the radio these days for example. And yet we seem to be getting back this idea that class origin should be the (or at least a) determinant of who reads the footie scores out to us:

BBC staff will be asked to disclose details of their family income and upbringing, as part of new plans to ensure that the corporation is not dominated by the middle classes.

The BBC will announce today that all new employees will be asked to answer a range of questions about their socio-economic background, including whether they were entitled to free school meals as a child, which the broadcaster says will allow it work out whether its workforce reflects modern Britain.

It's most certainly different from Reith's initial conception of what the BBC was to be for, which was rather to teach everyone to be middle class. But that's not the only historical echo we hear: half of Europe was ruled for generations on the basis that class origin determined near all. A background in the bourgeoisie condemned one, decent proletarian roots promoted though the ranks of the society. It has to be said that the experiment didn't work out well. So we're rather puzzled as to why people are so keen to repeat the error.

We would propose something perhaps a little to novel for most tastes. Hiring and firing of staff based upon their competence. If someone, yes, even a white upper class elderly male, turns out to be good at interviewing people sitting on sofas then hire them and a sofa. If there's a QQ (as we understand the acronyms these days, "queer, questioning" is a possible combination) who's a dab hand at sorting out radio interference then hire them if radio interference is the problem to be solved. Class, gender, sexuality, race and yes, class origins, just aren't to us the correct criteria to be hiring people upon.

And if the BBC really is concerned about diversity then perhaps they might like to pay attention to the only sort that does actually matter, intellectual diversity? A few more people who think a little further out of the usual soft left establishment box perhaps? 

We do wonder about MPs at times you know

Well, everyone wonders about MPs at times. Where do they find them? How on earth does anyone end up voting for them? You know, the basic questions that anyone would ask when actually confronted with a few specimens of the beast. And then there are those specific specimens that really puzzle us. To take this from Siobhan McDonagh MP. She tweeted out the letter she had sent to Azzurri, the owners of the Zizzi chain of restaurants.

They have just announced that their workers will no  longer get a freebie choice of meal during a shift, it will all be much more limited and they might even have to pay some nominal sum towards their food. At which point our MP asks:

"I would like to enquire as to why you have felt it necessary to cut back your staff's perks and pay,....."

 To which we can say at least one thing is right there. Perks are indeed pay, they're part of the total compensation for performing a particular job. And as Adam Smith pointed out the wages for jobs of a certain level are going to be pretty much the same. Total compensation that is will be much the same. Noisy or smelly work will get higher wages, pleasant and cheerful work lower, the various conditions all balancing out. 

But knowing that also tells us what is wrong with that question. Because of course George Osborne has just increased the wages of all of those waiters and staff. And so their perks are being cut so as to try and leave total compensation unchanged.

We are not seeing a cut to pay and perks at all. We're seeing a cut to perks as a result of an increase in pay.

And how else does anyone think it will be? There is a certain value to the employer of employing those staff. That does not change because the Chancellor says those staff should get more money. Thus the non-cash elements of their compensation are going to fall. And the intention at least of those employers will be that total compensation will be entirely unchanged. Making that insistence upon higher cash wages something not really all that worth doing.

Happy birthday, TMS

Today, the Scottish thinker Adam Smith (1723-1790) is best known for his pioneering work of economics, The Wealth of Nations (1776). But the book that actually propelled him to fame was The Theory of Moral Sentiments, published on this day in 1759.

Moralists had been struggling to work out the principles that made some actions morally good and others morally bad. To churchmen, the answer was obvious: it was the word of God. Skeptics speculated about whether we had a sixth sense, a ‘moral sense’ that would guide us towards good.

Smith’s breakthrough was to identify our moral judgements as a matter of human beings’ deep psychology as social creatures. Human beings, he argued, have a natural ‘sympathy’ (today we would say ‘empathy’) for others. That enables them to understand how to moderate their behaviour and preserve harmony. It is the basis of moral judgements about behaviour, and the source of human virtue.

Writing exactly a century before Charles Darwin’s The Origin of Species (1859), Smith was not sure why such social behaviour should prevail. He put it down to providence: today we would put it down to evolution. 

The book was an intellectual sensation. Churchmen, of course, did not like it very much, but it caught the eye of Charles Townsend, an intellectual and senior member of the British government, who was highly impressed and sought an introduction to Smith through their mutual friend, the philosopher David Hume (1711-1776). Townsend immediately hired Smith, on a salary of £300 a year for life, to be tutor to his stepson, the young Duke of Buccleuch. It was a fortune – and it gave Smith the independence and experience to start writing the work for which he is remembered today, The Wealth of Nations.

People are still haring off in the wrong direction

That the population in general is getting fatter is true. The western world is rapidly becoming one of fatty lardbuckets as far as the eye can see with distressing aesthetic results. However, it's very important indeed to understand that this is not because we are all eating more:

If you want to see how inflated our portion sizes have become, don’t go to the supermarket – head to an antique shop. You spot a tiny goblet clearly designed for a doll, only to be told it is a “wine glass”. What look like side plates turn out to be dinner plates. The real side plates resemble saucers.

Back in a modern kitchen, you suddenly notice how vast everything is – 28cm has become a normal diameter for a dinner plate, which in the 1950s would have been 25cm. Just because we are eating off these great expanses of china does not of course mean that we have to serve ourselves bigger portions. But as it happens, we usually do.

Well, no. This simply is not true. we are not eating more than our forefathers, not at all. As Chris Snowdon over at the IEA has been pointing out so admirably, it's not even remotely true.

The ration for a British soldier in WWI was some 4,300 calories a day. OK, that's living in a hole in a field where one might expect a certain effort necessary to both keep warm and dodge bombs. In WWII those running the civilian rationing system noted that when people consumed less than about 2,900 calories a day they lost weight. We might also assume some effort being put in to dodge bombs.

Today's average UK consumption is some 2,300 calories a day. We're simply not eating more food. And given that we're not eating more food then all attempts to understand why we're all blowing out like Mr. Creosote which start with the assumption that we are eating more are doomed to failure.

The truth is that we are expending less energy these days than our forebears, not that we are eating more than they did. We ourselves think that it's central heating which is the cause here but that is as yet unproven while there are indications that it could be true. After all, the major mammalian use of food energy is in regulating body temperature. Seems logical enough to us.

But it really is important to start such debates from the correct set of facts. That vast numbers of us are wreathed in gobbets of fat is true. But that the population in general is eating more is not, that second thing is not even remotely true. Thus everyone eating more cannot be the cause of that aesthetic pain we feel when surveying the crowds on the High Street, can it? 

Owen Paterson's Brilliant Brexit Patter

Former UK cabinet minister Owen Paterson has just delivered the most intelligent case for the UK leaving the European Union that I have ever heard. His basic point is that the EU is not the ‘status quo’ but something that is rapidly moving to destinations that are uncertain and dangerous, particularly for the UK; and that being outside is the safer, more stable option.

Take the eurozone. It is rapidly becoming one country, says Paterson. In order to deal with the imbalances that the fixed currency has only exacerbated, it needs to centralise decision making on budgets and bailouts. Plans for this are well advanced, eurozone sovereignty is being pooled, members’ discretion over their own budgets is being curbed and the eurozone will in effect be its own political union by 2025 – just nine years away. That is a very different kind of EU that is being envisaged, and not one that strikes a chord in the UK.

The UK government says that the UK will have ‘special status’ outside this and the other centralising tendencies. But how? There is no binding agreement that grants the UK any special status: the only sort of special status around seems to be a Norway-style outer circle. Not in the euro, not at the core, out on the fringes – it is clear that the UK’s influence could only diminish. The UK would still be outvoted, still overruled by the ECJ, still expected to chip in to eurozone bail-outs (as it was with Greece), but even less able to do anything about it.

Then there are security issues, with five new countries, 87m new potential EU citizens, waiting to join. Such as Turkey, with its leaky 700-mile border abutting a war zone. Once migrants make it to Germany or the other countries that are supposed to share them out, before long they become EU citizens and able to travel and work in their destination of choice – the UK. And we have no say in it. Migration, as ASI has shown, is generally beneficial: but far more so if it happens at a manageable rate.

Paterson’s vision for a UK outside these uncertainties is one of a self-governing, free-trading nation, a true part of the global family, its international trade and participation no longer absorbed into the EU. And as for trade deals, the EU is far weaker than the UK would be alone, each member having its own interests to throw into the horse-dealing, and proceeding only as fast as the slowest and most intransigent. The UK could do deals with China, India – and indeed the US, far quicker. It would also have greater representation on trade and other international bodies such as the WTO, where currently it is represented by the EU.

Leaving the EU is not an instant commitment, but a process. There would – and certainly should – be a long process of discussion before the formal commitment to withdraw (and the two-year i-dotting period that follows it) is given. In the meantime, the UK would continue to trade with the EU – something that 5m EU jobs, and EU supply chains, depend on. But meanwhile, we could be opening up better relations with the rest of the world.

There is no status quo. If the UK remains in the EU, it will be a second-class citizen, and the EU’s political centralization will continue, dragging the UK along with it. The eurozone, politically integrated by 2025, will dominate the rest. Outside, the UK could at least control its borders, its budget, its national debt, its public services, its international trade. What’s not to like?

Perhaps the 1% improve poor peoples' health?

A rather interesting little finding from over The Pond concerning the connection between inequality and the health of the population. Over here we've had Michael Marmot insisting for decades that health inequality is to be explained by economic inequality. And Wilkinson and Pickett have been shouting that they are not just connected but economic inequality is the direct cause of ill health for all. At which point we get the American study into health and inequality and we find something a little different:

Income inequality (as measured by the Gini index) was not statistically correlated to life expectancy, but it was in a positive direction (greater inequality correlated with higher life expectancy) and approached significance.

It is of course wrong to take a result which is not statistically significant and then claim that this is a significant result. Except, again of course, unless you make the correct claim about what is significant.

If it were true that economic inequality does indeed lead to the population keeling over like mayflies then we would expect to see it as a significant result of such a study. For they really were looking at the lifespans of rich and poor in the various different population centres of the US and seeing whether the local inequality affected those relative lengths of lifespans. We can't claim, not with any power at least, that inequality increases those poor lifespans for that result is not significant. But we can claim that the opposite, that inequality shortens those lifespans, is somewhere between not proven and wrong.

If it were true it should show up in this evidence. It doesn't: not proof perfect but highly indicative. Which is an interesting finding, no?

The big causes of variance in lifespans were the ones we might think of: smoking, obesity and exercise. Economic inequality just doesn't seem to be enough of a cause to create a statistically significant effect.