We cannot cure old age

The 2019 Conservative manifesto committed to building “a cross-party consensus to bring forward an answer that solves the problem, commands the widest possible support, and stands the test of time. That consensus will consider a range of options but one condition we do make is that nobody needing care should be forced to sell their home to pay for it.” (p.17) Such a policy is constructive if a bit thin on specifics.  It follows Norman Lamb’s proposal to take the NHS and social care out of politics, something Mrs May had rejected for three years. Progress. We must get away from each party tarring and feathering each other’s proposal as a “dementia tax” or “death tax” or some such. Any strategy for the NHS or adult social care needs to survive changes of government.

In 2011, the government rejected the independent Dilnot Commission report and has produced no Green Paper since. Ironically, the main objection to the Norman Lamb proposal has been that it would take too long.  This paper shows how cross-party consensus could be achieved and a Green Paper (for England) published within three months.

Adult social care, unlike the NHS, currently assumes funding by those who need it, with local authorities paying for what they cannot afford.  Today’s basic problem is that local authorities cannot afford to do so either. According to the BBC Reality Check, in 2015, 30% of those needing help received none, family and friends helped 37%, 12% paid some or all and 21% were helped by local councils. In 2015-2016, 57% of the 1.8m requests (28% from 18-64 year olds and 72% from those older) were rejected.

The Ministry of Housing, Communities & Local Government (MHCLG) “alongside the council tax precept, gave local authorities an additional £0.4bn in 2016/17, £2.3bn in 2017/18 and £3.4bn in 2018/19, and will give an additional £3.9bn in 2019/20. These temporary grants made up 8.9% of adult social care spending in 2018/19.” But as they were temporary grants, the ability of councils to plan ahead was limited. In any case they were far too small.

Estimates of Local Authority costs are consistently around £20bn towards adult social care in  2016-17 but according to the NAO, the public purse was also responsible for £34bn and £120bn for “Incapacity, disability and injury benefits” and “total health spending” respectively  The last figure lies within the NHS costs and implies that two thirds of the NHS budget is devoted to care, not cure. This is clearly debatable but, with NHS bed occupancy at over £1,000 per treatment day and £300 per recovery day, compared with £70-80 per day in an LGA funded care home, limiting the NHS to cure would release serious money for care being provided by local authorities. Delayed discharges from hospital is a well-known problem that has received some attention and improvement, e.g. through the Better Care Fund arising from NICE guidance in 2015, although this could be seen as excessively bureaucratic.  In 2016, the NAO estimated the annual England and Wales cost at £0.8bn.  Of course the problem has been created by the cuts in adult care funding reducing the adult care beds available. Over half of all hospital beds were occupied by those aged over 65 but no records appear to exist to distinguish between those where cure is feasible and those simply requiring care.  Given the huge disparity in costs per bed, this is the key question any strategic review needs to consider, namely how to limit the NHS to “cure” and provide the resources for local authorities to deal with “care”, and, indeed, how the two should be distinguished.

It has been argued that, due to their overlap, the NHS and adult social care should be integrated. The trouble is that NHS England is already five times as big as it should be.  As and when NHS England is reduced to manageable units (the size of NHS Scotland say), that could be considered. Meanwhile integration might be considered for Northern Ireland and then Wales.

Finally, the current funding arrangement has taxpayers’ money doled out by the Ministry of Housing (MHCLG) whilst policy and strategy are allegedly set by the Department of Health and Social Care (DHSC). This makes no sense and adds to the perception that the NHS is favoured at the expense of adult social care to the disbenefit of both. So, what is to be done?

1. The Dilnot, and other such committees, have been made up of experts: not the politicians who have to live with what is agreed. The three main (English) parties need to feel they own the result.

2. The three party leaders du jour should agree a one-per-party triumvirate to resolve, i.e. take out of party-politics, adult care strategy, future funding formulae and the role of the DHSC.  It should also have a neutral chairperson and handful of expert advisors.

3. Since this is similar to the Liberal Democrats’ own proposals, it is hard to see how they could refuse.  A Plan B will be required if Labour does.

4. On the day of the announcement, the terms of reference (“Who pays?”) should be published and the door opened (for two weeks only) for proposals of 1,000 words, or less, to add to the Dilnot and other proposals already being considered.

5. Party leaders should be able to replace their representatives where they wish so to do.

6. The committee should list solutions they consider feasible and score them against (weighted) criteria such as cost.

7. By the end of month two, preliminary conclusions (green paper) should be published.

8. By the end of month three: a Government White Paper—acceptable in principle to the three parties, but capable of fine-tuning by Parliament—should be published.

Simples!

Recycling and carbon emissions

One of the things which significantly irritates is how the general fashion is unable to connect the dots. Here the specific example is the idea that recycling is good as a method of reducing carbon emissions. It isn’t:

Oxfam has calculated that carbon emissions produced by the world’s wealthiest 10% are equivalent to those of the poorest half. Today, we publish new research showing that the average Brit will emit more carbon in first two weeks of 2020 than the citizens of seven African nations emit in an entire year.

The good news is that there are increasing signs that the public is ready to act. As many as four in five Britons said they are likely to take one of a number of actions this year to reduce their carbon footprint. More than two-thirds (68%) said they were likely to use energy-efficient products or utility providers and 79% of people said they were likely to recycle more.

Of course, we understand how the position is reached. It is a general assumption that reducing carbon emissions is a good idea. It is equally generally thought that recycling is a good idea. But that does not mean, as is asserted there, that recycling reduces carbon emissions.

Goodly portions of recycling cost more than the landfill of old and the creation of new from virgin materials. That greater expense is evidence pure and simple that more resources are required to recycle than to not do so. One obvious resource that more may - note, may - be needed of is energy. Recycling can therefore increase, not reduce, emissions.

That is, it isn’t true that this general ragbag of all the things people think are nice produce the desired or even claimed outcome. It is necessary to be specific about the outcomes of specific policies, not just assume that if it’s fashionable the outcome will be as desired.

As we've been known to say about property rights

A report from Liberia, about the spread of palm oil plantations. There are good things to say about this of course. Useful economic development in that poor benighted country, a lifting of at least some of the pressure on those Malaysian and Indonesian areas that home pongo pongo and all that. And yet there’s a problem:

Several miles farther on, past endless rows of carefully cultivated palm trees, it’s a slogan that bears little relation to reality. Gbenee Town is a small huddle of huts surrounded by a plantation more than six times the size of London’s Richmond Park.

The townspeople say that the benefits of the plantation’s expansion have passed them by and they have been duped by a government that took the land they were living off and gave it to foreign investors.

The base problem being that these people didn’t own the land. The government could therefore assign it as the government wished. The solution has already - for the future at least - been enacted:

The Land Rights Act, which was passed last year, is key to that effort. It gives communities ownership of ancestral lands, allowing them to make demands of firms that want to exploit it.

Quite so, people who won things get to say what is done with those things. Both the definition and point of ownership. Something worth recalling when people here start to demand that land ownership should be in the hands of the state, eh? When that happens we will only be the occupiers, at Whitehall’s whim, rather than the owners of our own fate.

As we’ve been noting over the years private property rights are the foundation of that freedom from the whims of the state and its governors.

Reasons for government not to do things

Here’s an arm, the list is as long as that and longer. But a crucial component of that list is that government isn’t very good at doing things. As this example shows:

A false claim to the NHS is the only way to avoid a fine

Filling out a form about free NHS prescriptions the wrong way can lead to a fine. As has in fact happened here. It is also not possible to fill out the form correctly:

You are the latest of a number of readers to have fallen victim to indefensible bureaucratic turpitude. Six years after universal credit was introduced, there is still no corresponding box on many NHS forms. The NHS Business Services Authority (NHSBSA) website – responsible for verifying eligibility for free NHS treatment – instructs dental and pharmacy staff to ensure that universal-credit claimants tick the allowance box until the form is updated. Patients who are not informed or, like you, are unwilling to sign a false claim, face fines of up to £100 plus the treatment or prescription charge. Another £50 is added if they don’t pay within 28 days, hence your latest bill.

This is the health care system that is the very Wonder of the World. It cannot furnish the correct box to tick given a six year head start.

This is the point at which we’re all supposed to invoke Kafka but there is no malice here. Just the incompetence of any large bureaucratic machine. Which is, of course, why we shouldn’t use large bureaucratic machines to run our lives.

65 million people simply cannot be run from the centre. Therefore we should not be trying, should we?

If not HS2 then what?

A claim is being made - as we’ve been noting ourselves - that HS2 isn’t worth the candle. So, what instead?

HS2 is a super turkey. Let’s invest in northern rail instead

That is not the correct answer. For it is to make the claim that there is some pot of money which should be spent upon transport. Or that there is some pot of money that government should be spending. Upon something or other.

Neither of which is true. We have a long list of things that the resources of the nation can be spent upon. That list being, quite literally, everything. Money is after all fungible, it’s something that can be devoted to any end.

That a specific transport idea isn’t worth doing - as HS2 isn’t - does not then mean that some other transport project must be done. Or even that anything to be done by government should be done as a substitute. Once we kill one allocation of resources off we need to go back to the beginning again and think through all of the alternative uses of that money, those resources. Then see which one comes top of our new list.

Which could be northern rail. Might be protecting the lesser wagtail (if such a thing exists, creating it if not). Or boosting education, a decent movie about punk rock or a memorial to the Unknown Taxpayer. Or whatever the heck 65 million individuals might decide they’d like to spend their own money upon.

The best manner of deciding between these alternatives is to leave the price fructifying in the pockets of the populace. For it is indeed true that some forms of collective action justify picking those pockets. But each and every such proposal must pass that test of justification. That the wallets have been vacuumed for some other purpose which we now abandon doesn’t mean that some other form of government - or transport - spending now passes that justificatory test.

That government shouldn’t be doing HS2 is entirely true but that doesn’t mean that government must be doing something else. Our default option must always be that if government shouldn’t be doing this one thing then government should be doing nothing with this money. Even, not having the money at all.

So this new technology stuff works then

We’re told that streaming has increased the consumption of music:

The consumption of music in the UK is now higher than in any year since 2006, when the industry was being powered by the downloadable mp3 file. Thirteen years ago, Crazy by Gnarls Barkley became the first song to get to No 1 on downloads alone as consumers switched over from CD singles and filled up iPods with individually purchased tracks (and, possibly, pirated ones too), while still purchasing plenty of CD albums.

Given, as Adam Smith pointed out, that the purpose of all production is consumption this should be welcomed. We all get to consume more music than we did, we’re richer. New technology works therefore, it achieves that goal of increasing our wealth.

There is one little fly in this ointment. Which is that it is conceivable that the turnover of the music business has declined at the same time. Much of this streaming is, after all, available to the consumer for free. This means that GDP will have declined at the same time as we’re all becoming richer.

As many have pointed out there are problems with the manner in which GDP is calculated but this is one that’s given too little weight to our minds. Some at least - we would argue much to all - of the seemingly languid economic growth of the past decade and more is a result of this quirk of how we’re counting.

Our specific example would be WhatsApp. There was a period when it was not charging that $1 a year fee and also was not carrying any advertising. Facebook had a couple of hundred people developing and operating it. Standard GDP calculations included the costs of those engineers and yet applied no value at all to the output or consumption. WhatsApp, in the official way we count these things, therefore turned up in the economic statistics as a decline in global productivity. Which is absurd for a system providing some 1 billion people with some to all of their telecoms needs off the work of 200 people.

Punch an economist hard enough and they’ll agree that this is happening to some extent. We’re outliers here in insisting that much of the modern world can be explained in this manner rather than it being just some fringe issue. But then sometimes outliers are in fact correct….

Truth in advertising - whose truth?

A current insistence is that things said on social media - Facebook, Twitter and the like - must be true. Sometimes this is insisted upon just about commercial advertising, sometimes about political such and, appallingly, at times about any statement whatsoever. The appalling coming from the fact that freedom of speech does indeed include the freedom to be wrong, even to lie.

The problem with this is the same one we’ve got about any declaration of what is the truth - sez ‘oo? As an example:

Facebook has quietly removed false and misleading ads about HIV-prevention medications after months of pressure from LGBTQ+ and health organizations.

Fifty organizations including Glaad and PrEP4All started a public campaign in December, arguing that the social media platform was putting “real people’s lives in imminent danger” by refusing to remove targeted ads containing medically incorrect claims about the side effects of HIV-prevention medications such as Truvada.

The ads highlighted by the campaign were largely run by personal injury lawyers seeking potential clients, and falsely claimed medications like Truvada could cause severe kidney and liver damage.

But “PrEP is safe and generally well-tolerated,” Trevor Hoppe, a sociologist of sexuality, medicine and the law, previously told the Guardian. “Any misinformation to the contrary is likely bad for public health, especially communities hardest hit like gay men in the US.”

That PrEP is generally safe and well tolerated is true. But then so is penicillin and that will still kill some people. Vaccines are generally safe and well tolerated and yet they kill perhaps 1 in a million given them - which is why we have vaccine compensation funds in this country and the US.

Just for the avoidance of doubt we’re all in favour of things like Truvada. People like having sex, the drug reduces the ill effects of their doing so. We like things that reduce the ill effects of what people enjoy doing - statins allow palatable diets into our dotage too, why wouldn’t we be in favour?

But we do get, along with this insistence that we can only handle the truth, this problem of whose truth? For Truvada can indeed cause liver problems:

Truvada can cause serious, life-threatening side effects. These include a buildup of lactic acid in the blood (lactic acidosis) and liver problems.

That’s the US Government and this is the Mayo Clinic:

Two rare but serious reactions to this medicine are lactic acidosis (too much acid in the blood) and liver toxicity, which includes an enlarged liver. These are more common if you are female, very overweight (obese), or have been taking anti-HIV medicines for a long time.

So now the pursuit of truth in advertising leads to the banning of people stating a truth - Truvada can cause liver problems. True, we’re not greatly worried that ambulance chasing lawyers get their business model curbed and yet, actually, we are.

For we come back to this basic point. Who gets to define that truth that is all that can be said - or advertised? The only answer we can come up with which is consistent with maintaining freedom and liberty themselves, let alone freedom of speech, is that no one should have that power because no one is to be trusted with it. As here, activists in favour of the prescribing of Truvada insisting that plain and simple truths may not be stated.

We wouldn’t trust ourselves with that power either - the philosopher kings capable of righteously ordering society simply do not, never have done and never will, exist.

We might even start off the new year with some ancient wisdom - quis custodiet ipsos custodies? For this current idea that what we may say publicly is to be determined by every grouping with a grudge or an agenda is going to mean that we’ll only be allowed to say what is approved of by those with a grudge or agenda.

Rhode Island’s wage and price controls

On December 31st, 1776, Rhode Island introduced wage and price controls. They limited the wages of carpenters to 70 cents a day, and those of tailors to 42 cents a day. These were price ceilings, and it was illegal to set wages or prices higher than the government stipulated levels.

The law fixed maximum prices for items “necessary for existence.” 7s 6d was the maximum for a bushel of wheat, and fourpence-halfpenny a pound for “fresh pork, well-fatted, and of a good quality.” A gallon of New England rum could be sold for no more than 3s 10d, 10d a pound for butter, 8s for a pair of shoes, and 30s for a barrel of blubber.

Other states joined in the “Providence Convention” that sought relief from “the exorbitant prices of goods.” Delegates from Massachusetts, New Hampshire, and Connecticut joined those from Rhode Island in recommending maximum wages and prices that were then enacted by state legislatures.

It didn’t work, of course; it never does. Nor did it last; it never does. Within months the ceiling prices were raised, then abandoned. It never works because wages and prices are signals of supply and demand. To fix them by law at arbitrary chosen levels is to deny the ability of supply and demand to determine the levels of wages and prices. It is roughly akin to bunging up a thermometer in an attempt to control temperature.

My colleague, Eamonn Butler, co-authored a book entitled “Forty Centuries of Wage and Price Controls,” detailing every instance in the 4,000 years since Hammurabi of ancient Babylon in which rulers have tried to set wages and prices by law. Many were governed by the false notion that there could be a “just price” for things.

Yet even in Eamonn’s lifetime (and mine), the Heath government in the UK, and the Nixon administration in the US, introduced wage and price controls. They never work, and they didn’t work then, either. They commonly set prices too low to make it worthwhile for producers to bring goods to the market, or set wages too low to make the activity worthwhile. They do not deliver stability, and never have. What they deliver in spades is shortages, and it is the shortages that cause the suffering that eventually makes people rebel against them.

Present day advocates of rent controls should note that they will cause the supply of rental accommodation to disappear, and make it not worthwhile to maintain existing rentals to a high standard. The answer to “exorbitant” prices is to let those prices lure other suppliers into the market in order to profit from them. The increased supply lowers the price more effectively than government laws can.

If Willy Hutton can't get the past right how can he manage the future?

As we all know Willy Hutton has a plan for us all and our society. Which is that it should be managed by people like Willy Hutton. So that we all do what people like Willy think we ought to be doing.

There is a certain problem with this and it’s not just that perhaps we’d prefer not to be doing what we’re told to. The little niggle being that if the planner doesn’t even know what happened in the past then how can they direct that future? Today’s example:

The financial crash of 2008 was the consequence of hyper-deregulation, following the palpably absurd rightwing faith that markets were magic.

The thing being that we didn’t in fact deregulate the financial markets. Far from it in fact. The 1998 Bank of England Act increased the power of the Bank to regulate. Then the 2000 Financial Services Act centralised and strengthened regulatory control again - distinctly stronger regulation than under the 1988 Act.

It’s entirely true that both of these have been superseded by new acts - in 2016 and 2012 respectively - but it’s simply not true that the Blair years brought deregulation of finance let alone hyper- anything.

It is possible that those years brought bad regulation of those markets but that’s rather another matter isn’t it? And one which does rather undermine the idea that the bureaucratic classes - or even Willy Hutton - know what they’re doing and thus should plan matters for us.

Which does lead to that problem about any such set of plans. If the people making them don’t even know what has happened then how can they lay out that future?

Robert Mugabe’s paper money

Robert Mugabe, who had been a terrorist, became Prime Minister of Zimbabwe in 1980, and on December 30th, 1987, became the country’s President by pushing through a constitutional amendment. The new post made him head of state as well as head of government. He was also commander-in-chief of its armed forces, and could stay on indefinitely as President, and declare martial law and dissolve Parliament if the mood took him.

His policies were disastrous for his country. He favoured his own tribe and stirred up violence against others. He encouraged blacks to seize white-owned farms by violence. Many so seized ceased to produce, and food production declined, causing famines. The economy collapsed. By 2000, living standards were below those when he took office in 1980. Wages were down, and unemployment had rocketed; by 1998 it was almost 50 percent. And by 2009, most of the country’s skilled workforce, some 3-4 million citizens had voted with their feet and emigrated.

Mugabe’s re-election campaigns attracted worldwide derision and condemnation, marked as they were by fraud, ballot-rigging and violence. He was widely condemned for violating human rights and ordering summary execution of opponents. He formed a view that he was the victim of an international gay conspiracy, and pursued a violently anti-gay policy in his own country.

He will be remembered for hyperinflation on a Weimar scale, as well as for his abuse of power. He printed money on a massive scale to finance his activities. An accurate measure is difficult because his government ceased filing statistics at the height of inflation between 2008 and 2009, However, it was estimated that at its peak month it ran at 79.6 billion month on month, and for the year on year in November 2008, it peaked at 89.7 sextillion percent. Eventually the country could no longer afford the ink to print currency with. By then people were using the currency of other countries.

I was given a hundred trillion-dollar banknote which by then would probably not even buy a coffee. There were stories that notices in toilets forbade the use of banknotes instead of toilet paper (they were cheaper). It is an object lesson that never seems to be learned. In a straight line from Weimar through Zimbabwe to Venezuela, excessive printing of money has resulted in hyperinflation and brought savings and investment to a standstill. It is a small irony of history that the same firm that printed the Weimar banknotes also initially oversaw the printing of the Zimbabwe notes.

Adam Smith famously observed that:

“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.”

He might have added sound money as a further requirement. Zimbabwe under Mugabe had none of these, and its citizens paid the price.