The Pin Factory Blog

It's unfortunately rare but it does occasionally happen. Someone makes a sensible suggestion for a government policy (err, writing for a think tank perhaps that should be sometimes people not working for this think tank also make sensible suggestions...).

Cocaine addicts should be prescribed the drug by chemists and nurses to help them overcome the habit, the Government’s drug adviser said yesterday.

If we're not going to be able to make people see sense on the liberty front (your body, ruin it as you wish) can we at least have policies which reduce the harm to the rest of society, of which this is obviously one. 

The ACMD also backed a change allowing nurses and chemists to prescribe diamorphine, cocaine or dipipanone to addicts under licence from the Home Office, in a bid to manage their problem. Ministers will now consider the proposal. But David Davis, the shadow home secretary, said: “If Gordon Brown signs up to this, it would show yet again that Labour merely seek to manage drug addiction rather than end it."

So yes, the idea is that this will be, for addicts at least, legalisation of a sort and thus a way to end some of the worst effects, impurities, disease, overdoses and the lethality of the scramble for profit in the illegal trade (btw, I looked it up: diamorphine for an addict would cost about £20 a day. Vastly cheaper for us as a whole than the current idiocy of the War on Drugs.).

My apologies to David Davis on this one (he is rumoured, as an ex SAS Territorial, to be able to kill me with a plastic spoon) but you're at the wrong end of the argument here. We've shown over the past few decades that we cannot end drug addiction (even if we were to destroy every vestige of liberty, as Milton Friedman pointed out) so all that is left to us is the possibility of managing it. We can do that sensibly, by making clean and pure drugs available to those who would take impure and grossly expensive ones if those were their only option, or we can carry on with the current policies which a) don't work and b) kill people.

The Conservative Party plans to harden the line for welfare recipients if it wins the next election by requiring any able-bodied person on welfare who is under 21 and unemployed for three months to attend an intense work-training program. It is hoped that the proposed course would improve their work discipline and teach the skills necessary to obtain work.

Even better, they plan to "ask private sector companies and voluntary organisations to run the… centres." But what if they still don’t find a job? After a year of unemployment, they’ll be required to work full-time in community programme.

This proposal should increase productivity and decrease government spending on a deadweight program. By using private companies and charities, the worker-incentive program has a much better chance of being both effective and efficient.

As the party’s welfare spokesman Chris Grayling said, "Staying at home doing nothing will be a thing of the past."

It all fits in nicely with our line on welfare reform, which you can read more about in our 2007 report, Working Welfare.
 

Jack Straw, the UK’s Justice Minister, has proposed to introduce a new British Bill of Rights, which would establish ‘rights’ to education, housing, healthcare, and so on. Click here to see our latest think piece by Rachel Patterson, in which she examines the evolution of the ‘social rights’ myth, and concludes that while we do have rights to life, liberty, and property, the provision of public goods is simply a matter for the government of the day.

According to a front-page story in yesterday's Sunday Times, "A woman will be denied free National Health Service treatment for breast cancer if she seeks to improve her chances by paying privately for an additional drug."

Preventing patients from topping up their NHS care privately is standard practice in the UK, and in accordance with Department of Health guidance. The Department seems to think that you have to be either a private patient or an NHS patient, and that any mixing is unacceptable: "Co-payments would risk creating a two-tier health service and be in direct contravention with the principles and values of the NHS."

I find it sickening that the government persists in putting their Soviet-era ideology ahead of the health of patients (which is surely the ultimate principle and value of the national health service). Rather than challenging the wholly artificial and enormously damaging public/private divide in health services, they would rather we simply received a lower quality of care. Their position is immoral and impractical.

It is also incoherent. People can already pay for private rooms in NHS hospitals, and for other non-clinical benefits. If it's ok to pay extra for your own television set, why on earth should you not be allowed to pay extra for a better drug?

Most importantly, their position may be illegal. I was recently at a luncheon addressed by one of the UK's leading medical lawyers. His position was as follows: the NHS Act entitles you to receive care that you reasonably require. You can only be refused that care if there is some legitimate reason to do so. Limited resources is such a legitimate reason. But if you are willing to pay for an additional treatment yourself, resources are not an issue and no legitimate reason to deny the reasonably required treatment exists. Thus you should be free to top-up your NHS care with privately purchased treatment, without being forced to foot the bill for the NHS services as well.

Immoral, impractical, incoherent and possibly illegal. This is just the kind of thing we've come to expect from government.

A very interesting article in The Times here, on stripping the Bank of England of its power and letting the market set interest rates.

A new US Congressman's welcome banner. I wonder if any MPs would put up a similar sign in their offices...

(Hat tip: Club for Growth)

Sino-American relations have been fragile lately as American legislators levy accusations of unfair trade practices against the Chinese government. A certain amount of anti-China rhetoric always accompanies a new White House administration – in fact, the Obama administration has had relatively peaceful relations compared to the early Clinton years. And Treasury Secretary Timothy Geithner is well versed in Chinese affairs and has done what he can to avoid labelling China an official ‘Currency Manipulator”. But inevitably, and particularly with Democratic presidents, there is pressure from unions and economic nationalists to face down the perceived Chinese beast.

Of course, an appreciated Chinese currency would drive the prices of Chinese consumer goods up, which would in turn affect importers of Chinese goods. And of course, bilateral trade deficits are meaningless, given the multilateral nature of industrial inputs. But American politicians seem more interested in pseudo-populist rabble-rousing than in opportunities for growth.

The Chinese government does freely engage in protectionism, but the best thing the US government can do is to do nothing. Divisive accusations and tariffs will only create an escalating trade war that will hurt both sides. This is particularly true because the Chinese government is eager to appear independent of foreign influence before hawkish Chinese nationalists. China is less likely to appreciate its currency or take other steps to reform if it is being chastised. Both governments would do well to keep their hands off trade. Minimising petty recriminations and provocative rhetoric will make that more politically feasible.

Tom links up to a post with this graph about US poverty levels.

The thought is that since the war on poverty began there's been no decrease in poverty: thus the war on poverty doesn't reduce poverty, perhaps it even confirms it?

There's certainly the possibility of welfare dependency however, US poverty line statistics are such a mess that that's perhaps not the best explanation possible. What has really changed since the mid 1970s is that we've changed the way we measure the effects of trying to alleviate poverty.

Unlike the rest of the world the US does not measure poverty after all the things we try to do to alleviate it. UK poverty statistics, for example, give us the number of people still in poverty after we've given them money, cheap housing, tax credits and all the rest. US poverty statistics however used to do this but no longer do.

The reason is that the US numbers include the market incomes of the poor plus the direct cash transfers they get as welfare. They do not include Section 8 (our housing benefit), Medicaid, Food Stamps nor the EITC (tax credits to us). The EITC for example costs $80 billion a year, raises 5 million above the poverty line on its own (just the Federal one, most States have one as well on top) but none of the effect of that is in that graph.

When did the EITC start? In the mid-1970s. When did all the move from straight cash welfare, which is included in those poverty figures, to goods and services in kind, which are not included, begin? In the early 1970s: exactly when we see poverty flatlining.

It all sounds a bit odd, I agree, but there is a real answer to the question "How come the US spends hundreds of billions a year on alleviating poverty and doesn't seem to alleviate much poverty?". The answer is that no one is counting the poverty alleviated by spending hundreds of billions of dollars a year.

Strange but true.

It's a problem of the EU's own making, of course: had they tried to design the Euro as a stable and solid currency for the whole region, they would have just re-branded the Deutschmark, and they certainly wouldn't have let Greece in. Indeed, they probably wouldn't have let Italy in. But no, the Euro was designed not as a currency but as a testament of political faith in the Union.

The problem is that even if Greece is bailed out (and since the UK provides 20% of the EU budget, you know that we will be doing a good deal of the bailing, Euro members or not), Italy looks similarly shaky, and is an awful lot larger. Greece's debt is a tiny and manageable 4% of the total government debt in Europe, while Italy's is a huge and potentially disastrous 23%. And as Laurence Copeland of Cardiff University Business School points out, 'the difficulty is that Italy's the Euro zone's third-largest economic power, [and] has a debt-to-GDP ratio similar to Greece's'.

Copeland thinks it could play out two ways in the UK, Germany and other countries who will be forced to bail out their irresponsible neighbours. Nationalism and anti-EU parties could rise; or voters might support the same profligacy that they have seen in Greece, thinking that everyone else can darn well bail us out for a change.

Either way, it's bad news for the Euro, and a source of instability that the world financial system, already punch drunk, will have trouble defending itself from. Only urgent action to remedy the core problem – government overspending and overborrowing – will keep us upright.