The Pin Factory Blog

Greg Clark's recent book, Farewell to Alms, makes the argument that the Industrial Revolution happened because the bourgeois values necessary for it to do so were bred into the English population. It's an appealing argument to both Little Englanders and Great Britons, that there's something special about us: and indeed it's also true that since the IR did indeed start here there was indeed something different about our forefathers.

However, the perceived weakness in the argument has been over the transmission mechanism of those virtues.  Was it genetic? or cultural, memetic even? New research seems to show that it might have been a bit of both.

We find that parents who are more trusting and parents who are risk tolerant have children with similar attitudes. The correlation is strong with both mothers and fathers for risk; for trust, the mother plays a more important role than the father. Parents also tend to marry individuals with similar trust and risk attitudes. This reinforces the impact on the child; having one parent with a given attitude means that the child is likely to have a second parent with that attitude as well. We also find a role for environment, because child attitudes are similar to the prevailing attitudes in the local geographic region, even controlling for parental attitudes. Whether attitude transmission works through nurture, nature, or both is not clear, although several pieces of evidence suggest that nurture must play some role.

Trust and risk tolerance are of course cultural pre-requisites for any form of large scale trading economy. Whether it's directly genetic or more to do with nurture and education doesn't really matter for the purposes of Clark's argument. All that's necessary is that such attitudes were passed on by the part of society which was outbreeding the others, as his work on the bourgeois shows they were.

Another result of this research is that there are national differences in these levels of trust and risk tolerance, something which might aid in explaining why there are such differences in economic structure, the prevalence of entrepreneurialism and the rate of growth between nations.

Facebook is causing trouble left and right these days.

Londoner Mathew Firsht  is suing a former friend for creating a damaging false profile that revealed private details and wrongly indicated that Firsht was gay. Another woman, Kerry Harvey, has recently started receiving phone calls from strangers because they saw a fake profile that described her as a prostitute and gave out her private number.
 
Of interest to us at the Adam Smith Institute among the Facebook scandals is the recent alcohol ban in Torbay due to a "night of mayhem" beach party that is being advertised via Facebook’s event application. When officials caught wind of the event, which has over 7,000 confirmed attendees, they declared that as soon as the location is specified all pubs, bars and retailers in that area will be banned from selling alcohol.

Shutting down a region during the busy summer holiday weekends will be very damaging to business. And it's not just this constraint on trade that is worrisome. Intervention of this scope by the government is unexpected and unwarranted. While there are legitimate concerns for safety, forcing businesses to shut down a key aspect of their commerce is not the way to handle it. By all means be prepared to have extra security at hand or keep the number of people at a reasonable capacity, but imposing regulations on businesses that have every right to operate seems an unacceptable form of intervention. It sets a dangerous precedent.

More on the unveiling of that statue (what do you mean "which statue"?). And more here and photos too!

It's possible to be over-enamoured with Bob Geldof at times, then he comes up with a speech like this:

Liberty is always dangerous, but it is the safest thing we have.

On the subject of liberty: looks like the War on Drugs is still failing.

The government running databases of the citizenry doesn't seem to work all that well either.

Amartya Sen got his Nobel in part for pointing this out: famines often aren't about a shortage of food, they're about a shortage of purchasing power.

Yes, we really do need to use cost benefit analysis in measuring matters environmental.

And finally, protecting the American mud hut building industry.

These figures relate to the US rather than the UK, but I think it's likely that the effects of Tesco's and China have been similar:

Inflation differentials between the rich and poor dramatically change our view of the evolution of inequality in America. Inflation of the richest 10 percent of American households has been 6 percentage points higher than that of the poorest 10 percent over the period 1994 – 2005. This means that real inequality in America, if you measure it correctly, has been roughly unchanged. And the reason is just as dramatic as the result. Why has inflation for the poor been lower than that for the rich? In large part it is because of China and Wal-Mart!

Part of the reasoning is that the richer you are the more of your income is used to purchase services rather than goods: and goods are more likely to be traded internationally and thus to have come down in price as a result of globalisation. There is also another point, Baumol's one that we would expect services to be rising in price relative to manufactures anyway, given the difference in the way that labour productivity can be increased in each.

These different inflation rates do, as mentioned, have an effect on inequality. This means that once again we should not be measuring inequality as a function of income, rather as a matter of consumption. If we do measure that inequality correctly, it's effects on the actual living standards of real people, then we find that globalisation isn't increasing it at all.

Which leads to an interesting thought about that Joseph Rowntree Foundation figure on the amount needed to be not poor in the UK. If we really let globalisation rip, if we tore down the remaining trade barriers, we might actually find that the further cheapening of goods would reduce that amount, the income necessary to reach a particular level of consumption.

Back in the old days, dentists were paid a fee for each type of treatment they provided. After a contract change, dentists started receiving their income by doing a certain amount of work, known as “units of dental activity."

You can imagine the dentist: “I need to do 15 procedures to meet my weekly quota. I could fill all those cavities… but that takes a long time and requires numbing and filling materials. Or I could just pull the tooth out. It takes no time at all and requires no medicine or precious metals."

The NHS did not think about all this before implementing the new contract. But a damning new report from an influential MP’s committee shows how bad the situation is.

Dentists are extracting patients’ teeth rather than carrying out more complex repair work because NHS reforms have failed… The number of tooth extractions, many of them unnecessary, experts say, has risen since the new contract was introduced. At the same time, the volume of more complex work such as crowns, bridges and dentures has fallen by more than half.

The solution is not to reform the contract again, but to eliminate it altogether. We deserve health care that gets us the best treatment for our needs, but NHS contracts distort the incentive structure in such a way that dentistry works against patients. The NHS being inefficient, working against patients, and distorting the markets? Must be a slow news day if this is news.

The development of liberties in English law is very much the story of limits being placed upon state power. One element of those liberties is that there should be limits placed on the information which the state can demand from its citizens and keep on its files. ID cards are one major infringement of that principle, and a DNA database is another. The police have been empowered to collect and hold DNA samples from people who have not been convicted of any crime. Even suspicion can be deemed sufficient, and over-zealous police forces have developed the practice of taking DNA samples for quite trivial offences.

Some police officers have said that they wish the DNA database to include as many as possible, and some forces even have DNA samples held on file for thousands of children not even accused, much less convicted, of any crime. Our DNA contains much evidence about our lives, including our vulnerability to specific diseases, and even aspects of personality that is no business of the authorities. The widespread collection and retention of such information is an abuse of state power, and should be stopped. It is part of the creeping erosion of our liberties that police feel entitled to treat citizens as potential criminals, and collect and hold information on innocent people that they have no business with.

As below, the statue was unveiled today and here's a report of the debate that preceded that last night. And another report from the unveiling.

A slightly odd (but possibly valid in a way) theory that our loss of civil liberties is all to do with gun control.

An alternative (although not mutually exclusive) explanation: that it's badly drafted legislation rushed through in a panic that is to blame.

No, it's not very good but the real question is, is it art?

Reasons not to join the Pigou Club.

People not buying SUVs isn't a problem: it's the market helping to solve the problem.

And finally, imagining Gordon Brown in alternative occupations.