This being the basic problem with international negotiations

Asked whether the EU would use its power to switch off the City’s ability to serve European clients to gain leverage in the coming negotiations with Britain, Plenković said: “I wouldn’t go into the vocabulary of weapons but what I have learned in international and European negotiations [is] that all arguments and considerations are treated as political.”

The aim here is to try and come to the correct economic decision. Yet the criteria to be used are the political ones.

We’re most unlikely to get to the right answer therefore.

This always being the problem with all of these international negotiations. It’s the politicians sitting around the tables discussing what would be good for politicians. With trade this problem is especially stark as the correct answer is that politics should play no part in why may trade what with whom.

But that’s the way it’s done and is the reason why international trade doesn’t boost our lifestyle as much as it should - political interference in who may trade what with whom.

Our perverted measures of affordable housing

A useful example of how polluted, perverted even, political language can become. We’ve a claim here that creating more housing reduces the amount of affordable housing there is. This is also being said with an entirely straight face, despite the obvious point that increasing the supply of housing by just the one unit makes every single unit of housing in the country that infinitesimal fraction of a percent more affordable:

Office buildings being converted into flats is driving the shortage of affordable homes, local government officials have warned.

Town hall leaders claim that more than 13,500 affordable homes have potentially been lost across England over the past four years due to rules allowing offices to be converted into housing without needing planning permission.

The Local Government Association (LGA) looked at the number of office conversions carried out under the permitted development right, which allows homes to be created without going through the planning system.

If you go through the planning system then in return for being granted the permission you must build - or reserve from those built - some units of affordable housing. The definition here being below market price. So, if people are allowed to just build housing without going through the planning system then there’s that shortfall of below market price housing being produced.

Which is, of course, the real complaint here. That bureaucracy isn’t gaining those new assets to have control over, that “affordable” housing to be allocated by the bureaucracy.

The solution also becomes obvious. Bin the entire system of “affordable” housing and get on with building more so that all housing becomes more affordable.

Which is where that perversion lies. We don’t want to build below market price housing in the slightest. We want to lower the market price of housing. Which building more does and building more without paying a tithe to the local housing department still does. The only reason this isn’t starkly clear being the manner in which political language has perverted this obvious truth.

As Kingsley Amis did point out, more means less. Greater supply means a lower price.

Quite so, this is rather the point of doing Brexit in the first place

The UK’s regulation of The City should be whatever is best for the UK:

City heavyweights rowed in behind Bank of England Governor Mark Carney and former Chancellor George Osborne by calling on the UK to distance itself from Brussels after Brexit.

The UK should “move as far away as we can” from EU rules without losing access to European markets, said Nigel Wilson, chief executive of FTSE 100 insurer Legal & General.

This being rather the point of it being our government, it rules us and it should do so in whatever manner is best for us.

The benefit of access to The City’s financial markets is something that accrues to the Europeans who gain that access of course - it is the consumer who gains from trade. But even if we’re to think about the value to the producer we still want to think about this properly. Following EU rules and regulations would harm our own domestic economy by how much? And limit our exports to other non-EU jurisdictions by how much?

The entire point of Brexit itself being that we can, once again, make such calculations and take such decisions. Diverging from EU regulation is not some problem with the process, our very ability to do so is the point of it.

Whatever decision is taken may or may not be a good idea but that we can is the benefit of leaving.

The Case for Legal Organ Sales

The shortage of organs poses the great threat of preventable deaths. This is not just an issue in the UK but worldwide. An immediate solution? Legalise the sale of organs.

Legalising the sale of organs will increase the supply of organs. This means shorter waiting lists for those waiting for donations. It means that more people will be able to receive life saving transplants. If you allow a private organs market to coexist with a system of donations, it also means that those least able to afford it will have greater access to organ donations, as the more wealthy pay for the luxury of a not having to wait for a state sourced organ. A private market will mean new sources of supply as those who do not currently donate for altruistic reasons are encouraged by the profit motive.  The majority of those who have currently opted to donate their organs will likely continue to do so regardless of the possibility of financial rewards. This will result in organs donated in an altruistic manner reaching more of the most vulnerable in society.

A private market for organ sale may even lead to a decrease in organ trafficking. As with any market, an increase in supply (caused by the legalisation of organ sales) will force the market price down. This phenomenon has been seen in perhaps the most unlikely of places: Iran. Not a country with many policies we ought to adopt, Iran takes a surprisingly liberal stance on the sale of  kidneys. Iran’s higher supply of kidney has kept prices relatively low. The increased supply of organs in Iran meant that by 1999 there was no one left on the waiting list for kidney transplants. The high supply and fall in demand led to  a fall in the incentive to traffic organs into Iran and would have the same effect if introduced internationally. The UN estimates that currently 5 to 10 percent of all kidney and liver donations worldwide are derived from trafficking. Victims of organ trafficking will also be able to seek help from the police without fear of arrest. The increased threat of investigation will also discourage organ traffickers due to  the likelihood of getting caught and prosecuted.

Some object to organ sales believing it will oblige the poorest in society into selling their body to exploitative third parties. While this is horrific, some people facing extreme poverty already resort to selling their organs on the black market despite the illegality. When doing so, they risk unsanitary procedures performed by potential unlicensed surgeons and the possibility of not even being paid. Indeed some groups steal organs. At least with a legal market, these groups could be held accountable. In Iran, the Iranian Patients’ Kidney Foundation arranges kidney transplants, removing the role for an intermediary broker. The Iranian Ministry of Health prevents the sale of kidneys to foreigners, in turn preventing organ trafficking, in order to sell kidneys to foreign demand. Combined, these two factors have led to the eradication of organ trafficking in Iran.

The legal sale of organs will also lead to a decreased strain on the NHS. While awaiting kidney transplants, patients require dialysis, an expensive daily treatment costing the NHS. It has been calculated that each kidney transplant saves the NHS over £200,000. The greater the number of kidney recipients, the fewer dialysis treatments need to be performed. Individuals will also be motivated to keep themselves healthy in order to secure a higher price for their organs. Not only does this benefit the individual (in the form of both health and financial benefits), it also benefits the country as a whole as fewer preventable illnesses will need to be treated on the NHS such as obesity or illness related to smoking. 

Not all organs are vital for a good quality of life. Many people do not object to a legal market for blood, eggs, or sperm, but there are other organs which the body can live without. Humans can survive with one lung, part of your liver or part of your kidney. The sale of organs need not be seen as an exploitative practice that will ruin the donor’s life. Although it may not be desirable, organ sales do offer a source of money for those battling extreme poverty. While some view the introduction of a opt out donation system (similar to that which we will have in Britain in spring of this year) as a more pleasant answer to the shortage of supply, it is not. It depends on donors of very specific physical traits having died. If you take organs from living people there is not such a long wait. 

A legal market for organs is the way to go. It is an effective solution to the shortage of organs needed for transplants and will help deal the with the issue of human trafficking. By legalising organ sales, you can help to protect the most vulnerable who pursue the sale of their organs (legally or illegally). Governments can protect potential donors with bodies performing the same functions that the current organ registry does, bar the procurement of organs. There is a cost to inaction. For far too many on a waiting list that cost is pain and suffering — or the loss of a loved one. There’s a solution out there ready to be tried. We need to jettison the ideologues that reject organ sales because they come with a price tag, and realise it’s worth potential backlash in order to save a life.

Retail landlords should be paying much of the business rates bill

A complaint here which really doesn’t stand, is rather missing the point of the system:

BRC chief executive Helen Dickinson said retailers had been scarred by the shift of sales online, prompting a wave of restructuring, as well as increasing caution among shoppers amid the uncertainty of a potential no-deal Brexit and a general election. Firms are also battling with high rent and business rates.

Ms Dickinson called on the Conservatives to fulfil a pledge to cut rates, adding: “It is essential the new Government makes good on its promise to review, and then reform the broken business rates system."

She said that 25pc of all rates are paid by retailers, even though they make up just 5pc of the economy.

Tenants- and thus retailers - hand over the cash for business rates to be sure. But the economic incidence is upon landlords. This is not well known but is well proven. Thus rates are a tax on landlords.

Which is what rates are supposed to be as well. Some people own land - and the tax feeds through to land itself - in locations where it has a lot of value. As the location of a piece of land is rather happenstance, so too is its value. This is thus a good thing for us to be taxing.

Retail is both the reason for those high values and also the major user of that high value land. So, landlords of retail properties is where a tax on high land values is going to fall. That such landlords pay that large portion of business rates is not a failing of the system it’s the point of it.

It is, obviously, possible to make the system better. Which we should do in fact given the confusion that the current system produces. Move the responsibility for handing over the cash from the tenant to the landlord. That’s where the economic incidence is anyway and thus nothing else will change. The total occupancy cost of any site will be just what it is today.

The advantage would be that no one would be able to obfuscate, as above, about the system. We’re trying to tax high land values, we are, and under such a system still would be. All we’d be getting rid of is the ability of retailers to bleat about it all.

Ship Money and National Insurance

Much ink has been spilled over the long term causes of the English Civil War (starting 1642). The Whig school of history has for a long time cited the constitutional infringements conducted by Charles I in his “eleven years tyranny” when he ruled with no parliaments, the most discussed one being ship money. 

Ship money was a prerogative tax/rate (so not approved by parliament) which was levied on coastal counties and towns in order to help fund the Navy in times of war. However, not only was Charles collecting this in peace time but he also extended it to all English counties, in 1635. While Charles claimed that it was being used to pay for measures to protect southern England from Barbary Corsairs, much of it was not and was siphoned off into the treasury. 

What is surprising, however, is how most opposition to the tax arose after it had been phased out in 1640. The future parliamentarian leadership, in the Grand Remonstrance passed in November 1641, complained about how, despite paying large sums, the piracy problem had not gone away. Despite much drama arising from the issues of ship money during Long Parliament and after, it had not remained a prominent issue at the time and encountered very little opposition. In 1635 only 2.5 per cent of the sum requested failed to come in. Even Oliver Cromwell paid his Ship Money on time. The one notable opposition was the prosecution of John Hampden in 1637, a man who would go on to propose the Grand Remonstrance, who was taken to court and in a moral if not legal victory only lost by seven judges to five. But even then, over 90% of the money was still collected. Collection only ran into problems when Charles decided to wage war on his Scottish subjects in 1639-40 when the amount paid fell quickly to 20%. 

So what has this got to do with National Insurance (NI)?

Firstly, they are both claimed to be collected for something they are not. Ship Money was supposed to fund the Navy and national defences against Barbary pirates who were enslaving Englishmen and Women along the coast of southern England. But instead it was mostly used to fund the normal functioning of the government. 

Likewise, NI is supposed to be funding primarily our pensions as well as healthcare services through the National Insurance Funds. However, these have been in surplus for over 20 years and their surpluses are growing. As a result, the money is loaned back to the central government meaning that National Insurance is really nothing more than direct revenue to the treasury. National Insurance is not specifically going into your pension pot but is just an income tax under another name, except it is also an exceptionally badly designed one. 

Secondly, it is likely to enjoy the same popularity fall when it is eventually removed (please let it be this year). While it would be a stretch to describe ship money as popular, it was nowhere near as unpopular as Long Parliament MPs or Whig historians would have you believe. As they analysed it in retrospect surely it must have been widely unpopular. 

I can imagine that we will have a similar situation in the future with national insurance. Currently 53 per cent of people support raising the basic rate of NI to 13% (from current 12%) if it went towards the NHS. Not only would this harm those on the lowest incomes much more than if it was a 1 percentage point rise in income tax (which only gets 43% approval) but again this would still essentially go into the central treasury pot. 

NI currently enjoys the relative obscurity and good branding that ship money did before the Long Parliament in 1640 and the Civil War starting in 1642. It has only survived because of its current lack of unpopularity . It either needs to be scrapped or seriously reformed to address the current failures of the system. 

As George Monbiot points out, technology will save us

We’re perhaps not quite as gape mouthed in awe as George Monbiot is here on the idea of lab or vat grown food:

It sounds like a miracle, but no great technological leaps were required. In a commercial lab on the outskirts of Helsinki, I watched scientists turn water into food. Through a porthole in a metal tank, I could see a yellow froth churning. It’s a primordial soup of bacteria, taken from the soil and multiplied in the laboratory, using hydrogen extracted from water as its energy source. When the froth was siphoned through a tangle of pipes and squirted on to heated rollers, it turned into a rich yellow flour.

This flour is not yet licensed for sale. But the scientists, working for a company called Solar Foods, were allowed to give me some while filming our documentary Apocalypse Cow. I asked them to make me a pancake: I would be the first person on Earth, beyond the lab staff, to eat such a thing. They set up a frying pan in the lab, mixed the flour with oat milk, and I took my small step for man. It tasted … just like a pancake.

But pancakes are not the intended product. Such flours are likely soon to become the feedstock for almost everything.

That this specific adventure will succeed, well, that’s where we’re less than that awed. That something like this will we’re certain of. As with near every other invention we’ve had over the millennia we’re at about the point where it’s simply going to happen. All those supporting technologies are there and someone is going to crack the roll out of industrial sized applications. There’s very rarely a single point for an invention, rather more a miasma, a cloud, of possibility at this time which someone then crystalises out.

The company itself doesn’t say that this is a genetically modified product and even if this one isn’t then the probability is at least 1 that others occupying the same technological space will be.

Which is interesting, don’t you think? We’ve now one of the arch environmentalists making the same claim we have been for decades. Technology will save us and it’s highly likely to be a GM one too.

No no, that’s OK. No need to pat us on the back for being so perceptive. But we would like you to ascribe a little more weight to what we currently say about the future as a result of our having been, once again, proven correct.

Do drug consumption rooms increase drug consumption?

In today’s Prime Minister’s Questions, SNP MP Tommy Shepphard raised the long-standing campaign from across the political spectrum to pilot overdose prevention sites in the UK. The most pressing need for such a trial exists in places like Glasgow City, where the drug death rate from 2014-2018 was 1227% higher than the 2017 European average. Scotland as a whole has the highest drug death rate in the EU. As the Adam Smith Institute has previously argued, these facilities—which exist in countries like Germany, France, Canada, and Australia—reduce drug-related deaths, alleviate health burdens, decrease syringe litter and engage marginalised populations with drug treatment, healthcare and other services.

The Prime Minister’s response was certainly more encouraging than the previous Government’s attitude. However, he raised the oft-repeated concern that these facilities could increase illicit drug use, echoing previous objections to their introduction. Common sense suggests that very few people would be swayed into cultivating a heroin addiction simply by having access to a place where they were less likely to die from it, but we needn’t rely on assumptions.

Perhaps the only benefit of the UK lagging behind the rest of the developed world in adopting harm reduction approaches to drug policy is that there’s international evidence to test that claim. A 2014 systematic review of 75 articles concluded that “no study found any increase in the total number of local PWID [people who inject drugs], irrespective of the SIS [supervised injection service] studied.” 

This is hardly surprising for anyone who has studied the evidence on how wider drug policy affects how many people use drugs: there doesn’t appear to be a strong relationship between the degree of prohibition and levels of use. The Home Office admitted as much in 2014, citing a “lack of any clear correlation between the ‘toughness’ of an approach and levels of drug use”. 

More recent studies looking specifically at cannabis have come to similar conclusions. Using data from 38 countries, one study found no statistically significant association between policy liberalization and higher odds of adolescent cannabis use. Another analysis concluded that “available European data suggest...moderate changes in statutory penalties have not been shown to be associated with changes in cannabis use prevalence.” A paper on cannabis decriminalisation in Massachusetts, Connecticut, Rhode Island, Vermont, and Maryland (USA) “did not find any increase in the prevalence of youth cannabis use during the observation period.”

Of course, even if these overdose prevention sites did increase illicit drug use, there would still be a strong case for introducing them. Drug use levels are not the only way to measure harm—and arguably not the most important. If one extra person started using drugs but two people who would have otherwise died from an overdose did not, we’d obviously consider this an overall reduction in harm and suffering. But if the Government’s rationale for holding back life-saving overdose prevention sites is that they may increase drug use, they have nothing to fear. The evidence shows that they don’t.

Comparative advantage is indeed difficult

Comparative advantage is the one non-trivial and non-obvious finding in all the social sciences. That it’s non-obvious is shown by how many otherwise apparently bright and educated people manage to get it wrong.

As here, with reference to the City Corporation’s announcement of how much tax the wholesale finance industry pays. Lots and lots. That haul coming from the manner in which the industry is decently profitable and also from the manner in which it pays rather higher salaries than other Britain based economic endeavours.

So, we’ve got something in which Britain has that comparative advantage. We’re better at this than other things. Or, to aid in understanding, we’re less bad at this than we are at other things - for the real lesson of comparative advantage is that we should all be doing what we’re least bad at and swapping the resultant higher production.

At which point we’re told this:

Henry Parkes, senior economist at the Institute for Public Policy Research, said the report suggested the UK economy is “overly hooked on the finance sector”, however, and needs to “diversify”.

Eh? We’ve found what we’re least bad at therefore we should do less of it? We should deliberately go off and do more of what we’re worse at?

Yes, obviously, comparative advantage is difficult but can’t we at least hope that senior economists manage to grasp the basics of the concept? Apparently not but that does rather colour whatever else the IPPR has to say about economics, doesn’t it?

What's it got to do with you, Matey?

We find it difficult to understand this mindset:

Senior executives in the UK’s top 100 companies took just 33 hours to be paid more than the typical worker’s annual salary, according to data that unions say should be a “source of national shame”.

Well, OK, perhaps not all that difficult. We’re aware that jealousy is a constant in human affairs. But why is what consenting adults do with their own property a matter for shame in the slightest?

Such senior executives are the employees of the shareholders in those companies. The shareholders own the things after all - that being the definition of both ownership and shareholding. If people decide that their employees should be well paid then why is that a matter of shame? Why, even, is it a matter for the TUC to comment upon?

There are a number of subsidiary arguments of course, efficiency wages, the rarity of the required skills, punishing work weeks and all that. But the base and root question here is what’s it got to do with you, Matey?