The Pin Factory Blog

Tim Taylor has a nice piece about the extension of human lifespans. Mortality has, as we know, fallen dramatically (or lifespans have extended, same thing) since the hunter gatherer days. We all know they exercised regularly, had no chemicals, little pollution and ate organic food. And were all dead by 35. We have all of the chemicals, lots of pollution, eat polluted chemical muck and live into our late 70s. But here's the fascinating fact:

The bulk of this mortality reduction has occurred since 1900 and has been experienced by only about 4 of the roughly 8,000 human generations that have ever lived.

This life extension has not been evenly distributed over time. The two countries studied are Sweden and Japan and they really only climbed on board this capitalism, markets and industrialisation train at around and about 1900. There's a very clear link between the two therefore.

That is, Swedes in 1900 had mortality profiles closer to hunter-gatherers than to the Swedes of today. This relative difference between Swedes recently and those 100 y ago has emerged in a rapid revolutionary leap, as this distance is far greater than that between hunter-gatherers and chimps. The recent jumps in mortality reduction are remarkable in the context of mammal diversity because age-specific death rates for hunter-gatherers are already exceptionally low, probably among the lowest of any nonhuman primate or terrestrial mammal (especially if body size is controlled for), and lower than even captive chimpanzees at all ages.

Of course, I don't actually believe that a system of economic organisation has directly extended human lifespans. Not even the most miserablist Marxist would claim that we all live longer so that we've longer to be oppressed by the capitalists. However, this strange trio, the capitalism/markets/industry thing, is the only economic system that has ever produced a consistent surplus over and above subsistence for the average person. Everywhere there was economic growth before it was swallowed in Malthusian growth, in the growth of the population.  And I would argue that it is the production, consistently, of that surplus that has led to the extension of lifespans.

Or if you like, an old riff of mine: the good old days are right now. We've never had it so good, we've never been as rich, worked less hard nor had so many years of life to enjoy it. Which is a pretty good result of a method of socio-economic organisation, isn't it?

David Cameron is doing something very important at the United Nations. Well, as far as anything a politician ever does is important. He's talking about what is necessary to aid development in the poor countries. I thought it would be interesting to look at what a development expert thought about what Cameron was saying. Worth reading this in full if you're into this sort of thing. But here's the two highlights from my point of view:

It helps to remember: every economic marvel of its day–from the US to China to (dare I say) England — were paragons of corruption. Few can match Tammany Hall or the Chinese Communist Party in their ingenious machinations. It’s not clear this is a hindrance to development. Taking the long view, corruption may even be part of the glue that keeps societies from falling apart in the midst of transformative economic change–like it or not, elites need something to compensate them for losing their influence, or the’re unlikely to let go without a fight. My feeling: Anti-corruption is a 20th century Anglo-American fetish, important, but nowhere near as important as political stability or basic property rights.

This would mean that all that lefty bleating about transparency, tax dodging and all the rest is, at the very most, a minor problem. And it gets better too:

What’s astonishing to me is that the UN can spend two decades setting the world’s development agenda and never utter the words “industrialize”, “firms”, or “exports”. This op-ed was no exception. I have not done the math, but here’s a conjecture: unless you are sitting on a billion barrels of crude, it’s practically impossible to become a middle-income country without an industrial sector. Simple arithmetic with national accounts should tell us the following: to get the GDP, wages, and consumption of a middle income country, you need to produce high-value goods and sell them to other countries. In most places, agriculture and minerals don’t cut it in terms of value-added production. ... What would I like to see? At the heart of the post-2015 agenda, a recognition that low income countries need industry first and foremost, and that this will require a radical rethinking of governance, trade and aid. Buying things other than corn and cotton from poor countries is part of the deal. In the midst of a rich-world depression, however, where jobs overseas are antithetical to re-election, poor countries are very much on their own where it matters most.

Why do I say better there? For this implies that that lefty bleating about tax dodging is really irrelevant. An industrial revolution is the only thing that we've ever found that substantially increases, permanently, the living standards of the average man or woman. Aiding the poor countries to industrialise is therefore the only way to permanently defeat poverty. And the way we can aid in that is by investing in those countries. We've got capital, they haven't, and capital is what is needed to drive industrialisation. Whether someone's dodging taxes on the profits made from such investments is a triviality compared to the importance of the question of whether capital is being invested or not.

As it happens, the gross (over) estimate is that $150 billion a year or so is being sucked out of poor countries through that tax avoidance, evasion and corruption sort of stuff. Much of which is to do with minerals and oil, not the more regular sorts of trade. Africa alone receives in some $500 billion of private sector investment each year. The numbers are working the right way to aid development.

And the final point, that the other part of such an industrialisation drive is that we should be willing to purchase the products is just as we've been saying here for years. The way to defeat poverty is to buy things made by poor people in poor countries.

It's worth considering the Chinese example. In 1978, at the end of the Maoist stupidities, China was as poor as the UK was in 1600 AD. A GDP of around $1,000 per capita: the average income in the $2 to $3 a day range. Yes, this is inflation adjusted and yes, it also takes account of price differences. Today that country is around where the UK was in 1948. They've done 350 years of economic development in 35 years. Wouldn't it be wondrous if the smaller population of Africa could manage the same trick in the next 35 years? Which they could of course: if they industrialised and if we bought what they produced.

Harry Teasley* spent his life confronting the behaviors of bureaucrats and defined a list of rules covering their modus operandi. You can see these rules operating in government departments, corporations and with politicians themselves. Using these rules, examine bureaucratic behavior and see if the underlying rules and behavior are driving the situation.

The Rules:

Harry Teasley's Rules of Bureaucratic Behavior:

Rule #1: Maintain the problem at all costs! The problem is the basis of power, perks, privileges, and security.

Rule #2: Use crisis and perceived crisis to increase your power and control.

Rule 2a. Force 11th-hour decisions, threaten the loss of options and opportunities, and limit the opposition's opportunity to review and critique.

Rule #3: If there are not enough crises, manufacture them, even from nature, where none exist.

Rule #4: Control the flow and release of information while feigning openness.

Rule 4a: Deny, delay, obfuscate, spin, and lie.

Rule #5: Maximize public-relations exposure by creating a cover story that appeals to the universal need to help people.

Rule #6: Create vested support groups by distributing concentrated benefits and/or entitlements to these special interests, while distributing the costs broadly to one's political opponents.

Rule #7: Demonize the truth tellers who have the temerity to say, "The emperor has no clothes."

Rule 7a: Accuse the truth teller of one's own defects, deficiencies, crimes, and misdemeanors.

Look at this example with the rules placed in brackets next to the relevant comment:

In mid September European Commission President Jose Manuel Barroso  called for the European Union to be turned into a 'federation of nation states' (2, 5), a vision he said would require an overhaul of the Lisbon Treaty.

Mr Barroso also set out plans for a single supervisory mechanism for all banks in the eurozone. He called the plans a "quantum leap... the stepping stone to the banking union".

The European Central Bank would get much greater powers of oversight and regulation of Europe's 6,000 banks under the plan. Mr Barroso said eurozone countries should not rely on bailouts from the ECB, saying the bank "cannot and will not finance governments" (1, 2, 4, 5).

"But when monetary policy channels are not working properly, the Commission believes that it is within the mandate of the ECB to take the necessary actions - for instance, in the secondary markets of sovereign debt," he added (6).

Chris Morris BBC News, Strasbourg writes “this was a very federalist speech. Mr Barroso made it clear that the creation of a single banking supervisor, and moves towards full banking union, are just a first step. He wants the EU to become a federation of nation states.

No-one will be forced to come in, he said, but the speed should not be dictated by the slowest or the most reluctant. Before the next European elections in 2014, the European
Commission intends to put forward explicit ideas on how to change EU treaties to reflect moves towards closer political union (2, 4).

There will be huge arguments ahead - there are big differences within the Eurozone about the pace of political change. But countries like the UK, which don't want to take part in any further integration, are going to have to work out how best to protect their interests as other EU member states pool more of their sovereignty.

"If Greece banishes all doubt about its commitment to reform, but also if all the other countries banish all doubts about their determination to keep Greece in the euro area, we can do it," he said to applause from MEPs (2A).

Mr Barroso said he was not calling for a "superstate", but rather "a democratic federation of nation states that can tackle our common problems, through the sharing of sovereignty" (4, 4A).

Harry Teasley’s Rules of Bureaucratic Behavior show in this announcement how rules 1, 2, 2A, 4, 4A, 5 and 6 are being used to slowly push the EU bureaucratic agenda. Since this is a major announcement by a major player, many of the behaviors have been engaged.

The Game

Play ‘spot the rule(s)’.

See which rules are being invoked any time a politician or bureaucrat announces something or a report is released.

At a meeting? Observe whether rules are being used by individuals at the meeting. If it’s happening in your business, you know your business has a problem.

Watching television or reading a newspaper? Look for comments used to perpetuate the behavior.

Keep a set of rules on hand as a ready reckoner! 

And finally, have hours of free fun playing this simple but tragic game.

Try spotting the rules in this YouTube video where MEP Nigel Farage names EU bureaucratic behaviors.

* Harry Teasley is retired only as a professional business executive. He is otherwise engaged constantly in thinking, writing pithy letters to the editor, and supporting liberty through his time, advice and philanthropy. It was people like him that I’m convinced Jefferson had in mind when he urged, “Enlighten the people generally, and tyranny and oppressions of body and mind will vanish like evil spirits at the dawn of day.”

Despite all the scare stories, I'm optimistic that the next generation will live on a planet that is cleaner and greener, and probably nicer to look at.

10.  Environment

Claims are made that our cities, rivers and coasts grow more polluted by the day.  In fact some areas have improved considerably.  The streets of late Victorian London were awash with horse manure, with children standing at street corners to clear a path in exchange for a small coin.  City air was more polluted when nearly all homes burned coal fires.  The London smog of 1952 killed an estimated 12,000 people in a fortnight, with theatres closed because audiences could not see the stage.  It prompted the Clean Air Act of 1956.

In the late 1970s most London buildings were black, including Westminster Abbey, the Palace of Westminster and Whitehall.  They were cleaned up only when the air became sufficiently soot-free to make it last.  The Thames, once toxic to fish, now bears stocks of several species.  Other rivers and coastlines are much cleaner than they have been.

Even air pollution from industrial activity is diminishing in Britain and most advanced economies.  New technology makes this possible, and it is the poorer and up-and-coming countries that find it too expensive.  China is building new coal-fired power stations at a rate of more than one a week, and plans to do so for at least a decade.  It will make sense to develop the technology for cleaner burning so that it becomes affordable.

In fact one of the biggest aids to reducing pollution is the switch to natural gas-fired power stations, since it burns much cleaner.  With maybe 100 or more years of gas reserves now extractable, the switch from coal to gas will have a major impact on pollution.  The switch to electric vehicles charged from gas-fired power will dramatically cut the pollution caused by engines burning petrol or diesel. 

The second Green Revolution in agriculture will increase yields from acres under cultivation and bring hitherto marginal land into use.  This will give the rainforest more protection than all the pledges and treaties that have hitherto been resorted to.

In all of this it is technology, rather than behavioural change, that is making the difference and which will bring results.  We do not have to live more simply, just more cleverly so that we can achieve our aims while leaving a smaller footprint.  I have confidence in our ability to do this.

It is claimed in some circles that educational standards are falling, that it is being dumbed down, and that our successors will be less educated than ourselves.  I disagree: I think education will be better.

9.  Education

Education used to be only for an elite; now it is for the many.  Across the world more and more children are being brought into education.  Many of the world's top academic institutions are now found in the Far East, in countries that were recently poor.  The education offered in such places is of a standard that leads on to research and eventually to Nobel prizes, while at a lower level children are in school instead of in the fields.

In the UK since 1950 we have seen higher education spread from covering one in twenty of the population to nearly one in two.  Obviously the average standard is lower with more people given the opportunity, but the top 5% are no less well educated than were the previous top 5% when they alone had that chance.

Aristotle defined a university as a log with a teacher at one end and a student at the other, and it is true that almost everyone can benefit from education.  It enhances and enriches life as well as opening doors to more of its opportunities.  And this is not just for an elite.

One reason for my optimism that education will be better is that I think we are rapidly coming out of the notion that education should be about social engineering rather than about learning.  When schooling was treated as a vehicle to promote equality, standards suffered.  If universities are forced to take less able students to promote equality, standards will inevitably fall.  I see many signs in the UK that people now want their children to receive a good education rather than one used to promote social equality.

Education is about striving and attainment, about being stretched and having one's talents and abilities developed to the full.  When parents are given a choice, they choose schools which succeed in doing that, and part of my optimism comes from a belief that more of them will have that choice and will make it.

Another good portent, especially on the world scale, is the spread of computer-aided learning, including distant learning.  This provides access by poor countries to some of the world's best teaching conducted over the internet.  Even in developed countries, the development of machine intelligence could bring the ultimate one-for-one teacher-student ratio of Aristotle's log.

In his report today, former UK Deputy Prime Minister Lord Heseltine makes 89 recommendations aimed at stimulating growth in the regions. Some of them are good. Most of them are bad. And some of them will never happen.

Some are even a mixture of all three. One of Heseltine's key aims, for example, is to move £49bn from central government to the regions to help local leaders and businesses. Well, yes, there should be more devolution of decision-making and spending to grassroots levels. Local people know better what is needed than do distant civil servants. Will it happen? I cannot see the big Whitehall departments parting with that sort of cash without a long fight that eventually wears out the other side. And would transferring that money do any good anyway? Probably not: it would just go on the sort of top-down grandiose projects and boards and committees that Heseltine is demanding.

Lord Heseltine says that 'growth funds' should be allocated through the new £1bn Local Enterprise Partnerships that are being set up in England. Growth funds? You tax businesses, then give them the money back and call it a growth fund? Is it not better to leave the money in the pockets of businesses and their customers, so that they can decide how to spend and invest it? Their judgement is likely to be far more tailored to the local circumstances than any official's – or even any committee made up of local officials and local businesspeople who happen to have time on their hands.

Lord Heseltine wants to see greater priority given to infrastructure projects like airports, rail and motorways. Well quite, we need more airport capacity: but the decisions are always political, and it can take decades to get such projects through the planning process, never mind build them. It's our planning system that's at fault, and which needs to be opened up to business-creating development, not just the priorities of the politicians. Even then, are politicians' priorities the right ones? Look at the billions we are wasting on HS2. Governments, and Lord Heseltine, like grandiose projects, even if their benefits do not cover their costs.

Another plan is to increase investment funds by, basically, telling pension funds how to allocate their investment funds. If you want to get people saving, a much surer way is to raise interest rates and make it worth people's while. Of course we do not do that because it would cause problems for overstretched homeowners and overstretched businesses. Some economists would argue that neither have really felt the pain that is needed to get out of our present problems. The capital misallocations of the boom years need to be liquidated and put to better use, but that won't happen as long as it is possible to keep going because of artificially low interest rates. First things first, Lord H.

The proposed public interest test for foreign companies wanting to buy UK businesses is hugely dangerous. One could see politicians blocking takeovers just because they might play badly in the media, especially if jobs or domestic businesses were threatened. One of the UK's assets as a place to do business is precisely that it is so open and so international. We need to preserve that, not open ourselves up to nationalist protectionism.

Tax credits for R&D? Research and Development sound like good things, but many firms just do not need them. No one-size-fits-all policy like that can steer resources to where they are best used. Business people can make their own decisions about whether to invest in these things or not.

So how do we stimulate growth in the regions?

Planning: yes, that has to be reformed, particularly so that major infrastructure projects become viable again. Education: it is already being reformed, and I think a much less monopolistic education system will contribute massively to future growth. But these things are long-term.

I would start by lower, simpler taxes. Particularly on business. If every small business took on one extra person, there would be no unemployment in this country (except maybe for the Business Department, who could all be sent home). It is not just the cost but the complexity of things like National Insurance and PAYE, not to mention VAT and the rest, that discourages people from hiring. I would also have a real assault on workplace regulation. The idea of workers getting a stake in their business by giving up certain protections seems promising. But why don't we just exempt all small businesses from many of the rules? The huge boost to employment that this would generate is real worker protection.

Some people suggest that people will be less healthy in the future because they lead unhealthy lifestyles and eat the wrong foods.  I rather think people will be healthier in future, and I think so because of developments taking place that should bring it about.

8.  Health

Vast amounts of government money is spent on making us feel miserable about our health.  Advertisements bombard us with messages that treat salt as a kind of poison, and sugar as almost as bad.  We are warned off fatty foods like butter and cream, and urged to cut alcohol consumption.  Shrill tones blare the dangers of obesity.  The message is to treat food as medicine. 

All of this probably has the effect of making life more stressful by having people worry about what they are eating and drinking, and stress is undoubtedly a factor in many illnesses.  Despite all of these daily dangers we are told about, life expectancy is rising, and healthy life expectancy along with it.

People are healthier than they were.  Children are not disfigured by smallpox or polio, and tuberculosis can be treated.  Most of the illnesses which were regarded as acts of nature are now avoided by efficient sanitation and hygiene.  Typhoid no longer threatens us, and such outbreaks as there are of virulent diseases are quickly contained and brought under control. 

It is true that we have faced new ailments such as BSE and HIV, but we have mobilized resources rapidly and developed preventive measures or treatments.  I have no doubt that the remaining big killer, malaria, will be conquered and will be made as extinct as smallpox.

Fewer of our children die in infancy, and fewer mothers die in childbirth.  The same progress that enabled us to deal with life-threatening conditions is still being made.  Indeed, it is accelerating.  The decoding of the human genome will being in its wake a new series of tailor-made treatments aimed at specific genetic conditions, and the ability to manipulate stem cells will enable replacement organs to be made and substituted for defective ones.

Along with all of this comes a greater awareness among the population of what it takes to stay healthy.  People know the health risks of smoking cigarettes, and alter their behaviour in the light of knowledge.  They are beginning to learn the value of exercise.

The future will see more diseases conquered and life expectancy prolonged.  People will be healthier for longer, and we can only hope that they worry less about it.

This week the UK former deputy prime minister Lord Heseltine will present a report on boosting economic growth in Britain's regions. The fact that the report is 80 pages long and has taken six months to compile is surely evidence that its analysis and conclusions are far too complicated. It is actually pretty obvious what is holding back growth, not just in Britain's regions, but all over.

Lord Heseltine, who as a business minister promised to 'intervene before breakfast, dinner and tea' is expected to propose the following.

1) Tax credit changes to encourage businesses to spend more money on research and development, and on developing skills.

Here we go again. Experienced business people make perfectly rational decisions on how much to invest in their future products, based on the cost of that investments and their predictions of its likely effectiveness in winning new business – but politicians tell them they are wrong and that they ought to spend more. It seems so obvious: how can anyone be against spending more on research and skills development? But the fact is that these things have certain costs and uncertain benefits, and business people have to make their own judgement about whether the risk justifies the cost. And the fact is that companies right now are sitting on cash and not investing it for perfectly sound reasons – they cannot see where the new business is likely to come from. Economic growth in Europe is flatlining. Consumers are doing what governments ought to do and are paying down their debt rather than spending like they did before. It is wrong to use the tax system in an attempt to suspend reality.

2) A big boost to the £1bn Regional Growth Fund, set up by the present government to help regional businesses.

And funded by whom? From the taxes, of course, paid by individuals and lots of other businesses in those same regions and elsewhere in the country. And as those taxes rise, business people find their budgets being squeezed as demands come in for VAT, national insurance, PAYE, the rates and all the rest. At best they decide not to hire any new people: at worse they have to lay workers off; at worst they cannot make the books balance and the business closes. But of course everyone sees the grants and loans made by the public bodies, while nobody notices the hundreds and thousands of small businesses crippled by over-high taxes. The policy is like quietly drawing water out of one side of lake, taking it round to the other side (spilling some on the say), and throwing it in with great fanfare, crowing about how much you are raising the level.

3) A wider role and more funding to Local Enterprise Partnerships, bodies comprised of business people and local authority officials.

You do not need vast funds to make local authority officers get up from their desks and find out what local businesses actually need. Nor to get business people to represent their concerns to local authorities. All top-down, enforced 'partnerships' are the same: they become a talking-shop between people who have the time and patience to talk. Most business people, however, are far too busy for such bureaucracy. The old Regional Development Authorities were a case in point. Everyone engaged in them thought they were wonderful, and enjoyed spending the taxpayers' money. Most others thought them a complete waste of time and energy. This policy will do no good at all.

4) Scrapping dozens of district councils in order to simplify local government.

An odd policy, given the government's aim of getting decisions made more locally than they are at the moment. It is a return to (or perhaps an extension of) the existing centralism and giantism that exists in local government – a trend consolidated by the creation of super-authorities in the early 1970s. But larger local government bodies do not mean greater efficiency. Rather, they mean more distant decision making by people who inevitably, because of the size of the organisation, think more bureaucratically and less locally. There is a case for shedding a tier of local government, certainly: the present structure is confusing and allows many a buck to be passed. But with today's technologies the case is to have smaller authorities, not larger ones. Small organisations can still do big things, if they do them together. The trouble with big organisations is that they are very bad at doing small things or dealing with individual cases.

So what, then, do we really need to pull Britain's regions out of the doldrums?

We could start by lowering taxes on businesses – things like national insurance, company and capital taxes –and lowering them for good. Some people say that this would be folly because the government is already spending more than it rakes in through taxes. But you do not lower a deficit by raising taxes: that just smothers trade and economic growth. As the Nobel economist Milton Friedman pointed out, governments spend everything they collect in taxes, then as much as they can get away with. Higher taxes just mean bigger government and less careful spending – as well as more grandstanding politicians and more interventionist reports.

A second growth strategy is to slash the regulation on businesses – particularly regulation on small businesses and particularly all the workplace regulation that has been imposed in the last fifteen years. Perhaps the easiest strategy would simply be to exempt small businesses from it all entirely. The trouble is that workplace regulation like the Social Chapter provisions, the working hours rules, and maternity and paternity conditions have been imposed largely as the result of EU directives and regulations. So those who want to reduce workplace regulations in the UK find themselves hitting the brick wall of the UK's EU membership. And there are, of course, many positive benefits to EU membership. Yet the weight of this regulation has, in recent years, arguably turned the balance negative. It is another good reason (along with the banking and budgetary integration that is the only way to hold the euro together) to renegotiate the UK's relationship within the EU – something that Lord Heseltine would hate. But there are signs that such a renegotiation may not be far off.

Some people, including Tyler Cowen in The Great Stagnation, think we are running out of big ideas that can improve things.  I disagree.

7.  Ideas

The pessimist's thesis is that we are wringing smaller and smaller gains from our past breakthroughs in science and technology.  Tyler Cowan says we picked the low-hanging fruit of things like education, putting into universities those who previously might have been out in fields.  There are no similar future gains to be had, he suggests.

I think we are actually just at the beginning of what the communications revolution will bring us.  The fact that we can communicate rapidly on a global basis multiplies the number of interactions we can have.  If we look at the Enlightenments and Renaissances of previous ages we finds a pattern in which relatively isolated societies were thrown into sudden contact with many others.  It was the silver empire of Athens, the merchant princes of Italy, or the Scottish traders given access to the British Empire by the Treaty of Union.

That relatively sudden extensive contact brought comparison and contrast with other cultures, which proved fertile ground for creativity, and an explosion of talent followed.  The communications revolution brings that on a wider scale than previously, and it is happening quickly.

For creatures who evolved to run and throw things and occasionally to shout at each other, we have done some pretty cool stuff like sending machines down through the clouds of Titan or landing roving laboratories on Mars.  Our brains have moved further to understanding how the universe works than nature might have intended us to.

We do not know what insights and ideas we might have in future.  They are among Donald Rumsfeld's "unknown unknowns."  I doubt if anyone before Newton realized that they didn't know about gravity.  Nor do we know what conceptual breakthroughs and insights might come.  What we do know is that the conditions in which they flourish are advancing.

We can also be reasonably confident, for example, that biotechnology and nanotechnology will bring great advances in our ability to target and fine-tune our abilities in such areas as medicine and materials.  We know, too, that advances in artificial intelligence will enable us to attempt tasks hitherto thought impossible.  It took decades to apply the fruits of our previous industrial revolutions, and we are only at the beginning of this one.

I am optimistic that the planet's greatest resource, human creativity, will not fail or fall short.