Friends of the Earth takes a baby step forward: when will they take the big one?

Tears in heaven etc as Friends of the Earth finally agrees with scientific opinion on nuclear power. Yes, they've admitted that actually it's rather safe. Which it is: deaths caused by power generation per terrawatt produced are lower than any other method of electricity generation. Yes, really, more people fall of roofs installing solar than die from radiation from power plants. Which is good, that's a baby step forward. Even George Monbiot changed his mind on this when Fukushima showed that no one at all is killed by radiation even when three plants meltdown after a very large earthquake indeed and the associated tsunami (which in itself killed tens of thousands).

So, what's the remaining problem?

When the presenter asked him to explain the group’s opposition to nuclear power stations he got this reply: “The biggest risk of nuclear power is that it takes far too long to build, it’s far too costly, and distorts the national grid by creating an old model of centralised power generation.”

Well, certain of us think that centralised power generation is just fine: we might even say that we're rather fond of the idea of being able to turn the lights on without having to check our watch to see if we're able to.

But the next, and larger, step in this is that we need to examine why nuclear is so expensive, takes so long to build?

That would be because the hippies have been screaming blue bloody murder about the radiation problem all these decades. So, now that we can all agree that the radiation isn't a problem the hippies will, at least we can hope they will, stop that screaming and we can dial back the public inquiries, the planning appeals and the monstrously overdone safety regulations so that we can have cheap, as well as that safe, nuclear power generation.

Well, in a rational world we would but that ain't our one, is it?

Well, yes, this is rather the point about fees for filing tribunal claims

How lovely to see public policy working well for once:

The number of aggrieved workers bringing sex discrimination claims to employment tribunals has tumbled by 90 per cent in a year since claimants were made to pay a fee.

It appears that the prospect of forking out in advance – and losing the money if their case fails – is deterring many of those who may be tempted to use a tribunal to make their employer pay compensation.

But Labour business spokesman Chuka Umunna has promised to abolish the fees, claiming they are unfair.

Chuka, as ever, is missing the point here. The aim and purpose of the fee is to reduce the number of claims. The fee has been instituted, the number of claims has dropped: public policy is actually working. Would that everything done by government worked so well.

The point is not though to make sure that those cruelly done down by t'evil capitalist plutocrats have no recourse: discrimination law still exists and still operates in the normal manner. Those with a good case will happily pay the small fee, those with a frivolous one won't. The impact of this modest fee therefore tells us something most interesting: the number of former claims that were indeed frivolous, or at least highly unlikely to succeed. But if trying it on costs nothing then why not do so?

There's an interesting parallel here with another thing that the British courts get right. In, say, a patent case, the loser pays everyone's court costs and legal fees. In a similar US case the each side pays its own costs, whatever the outcome of the case (except in truly, truly, egregious cases). It costs perhaps $500 to file a suit alleging patent infringement and up to $2 million just to prepare the defence for a trial. The incentives there are obviously for many trivial suits to be filed in the hopes of getting a bit of cash as a settlement to bugger off and stop bothering everyone.

It's worth noting that the US courts are full of patent troll cases: the UK courts have nary a one.

You know, the first thing everyone should know about economics? Incentives matter.

When proven cases of real sex discrimination bring (righteous) damages of tens to hundreds of thousands of pounds the idea of a small fee as a gatekeeper to deter frivolous cases seems both sensible and not a barrier to those real cases moving into the justice system.

When science tells you something you've got to take the rough with the smooth

We've a lovely little example today of where so many environmentalists go wrong on this climate change thing. As always around here we'll take the IPCC seriously as a matter of exposition of logic. So, The Guardian's running a column in which sure, the IPCC is right about the dangers of climate change, about the way that they prove that something ought to be done. However, they're entirely wrong about what should be done (ie, get markets and private money involved in changing the world) because, well, you know, that's just neoliberal economics and that can't be right, can it?

The IPCC report has done a wonderful job at alerting the global public opinion about the urgency to prevent, or at least limit, climate change. Also, it has correctly identified the growing pressure climate change will put on public finances, thus worsening the crisis of the state. But when it comes to finding solutions, it has not escaped the neoliberal zeitgeist, and especially the tendency to see in financial markets an answer, rather than a source of social problems.

This is indeed a small example of a larger problem. People taking the IPCC seriously on climate change, the need to do something, but then insisting that this means the IPCC supports their own plan for whatever should be done. As, for example, we note around here often enough the Greenpeace and the like plan to move forward into the Middle Ages in response to it all.

Here's the problem with these projections. The very proof that the IPCC uses that something is worth doing, that doing something will be, in the end, less costly than doing nothing, is entirely based on that neoliberal economics. More specifically, that we use the most efficient methods of mitigating climate change (ie, a carbon tax, not any of this regulatory rubbish and most certainly not a retreat to feudalism).

Both William Nordhaus and Richard Tol have done a lot of work on this. Leaving out their differing numbers the logic is: it's worth spending $x to avoid damages of $x or more than $x. If $y is greater than $x then it's not worth spending $y to avoid damages of $x. They both go on to point out, at various times, that the most efficient method of spending to avoid damages is that carbon tax. Thus spending $x in a carbony tax sorta manner can be justified if we're reducing future damages by $x or more. However, because other methods (regulation, law, targets, micromanagement) are less efficient then that is akin to trying to insist that spending $y is worth avoiding damages of $x (where y is still larger than x).

Note that none of this depends upon whether the IPCC is correct in its science about climate change at all. This logic is internal to the system. The IPCC has only, using neoliberal economics, shown that responding to climate change in the most efficient manner possible (ie, using neoliberal economics) is worthwhile. This means that you cannot then project your own desired, less efficient, solutions onto the world using the IPCC as your justification.

So ideas like the one quoted above just don't fly. You can't reject the neoliberalism of the IPCC solutions because they are integral to the argument that anything at all should be done.

Rowan Williams falls into the old climate change logical trap

For someone who trained as a theologian and philosopher this is rather sad: Rowan Williams has, in his retirement, fallen into an all too common logical trap in discussing climate change and what we ought to do about it. His piece is here and that trap is that while it's entirely possible to prove that climate change is a problem that we should do something about (a view largely held here at the ASI) that is not the same thing as saying that because climate change is a problem we should do anything about it. Anything here meaning not that we should do nothing, but that we end up giving credence to the more ludicrous suggestions about what we should do. This is an extremely important point and it's one that is desperately misunderstood too.

OK, so climate change is a problem and we should do something about it. Please, no, let's just take that as a starting assumption for the rest of this discussion. Excellent, does that mean we should follow Greenpeace and abolish industrial capitalism? That would be to embrace the "do anything" option and it would be ludicrous. The costs in human tragedy of starving a few billion of us as we return to an agrarian feudalism would be worse than anything that climate change could possibly foist upon us.

That is, the merits of doing whatever to deal with climate change depend not upon the merits of beating climate change but upon the merits of doing that particular thing.

And that's where this pernicious logical error comes in. That some things might or should be done to deal with climate change is, in our opinion, entirely true. But this does not then mean that every brainspasm that issues from a politician or environmentalist is worth doing due to the threat of climate change. We have to go through each and every suggested action to see whether it does make sense, or not, given the costs and benefits of that action.

The past year has seen the obstacles blocking action on climate change beginning to crumble. Opposition on scientific grounds looks pretty unpersuasive in the light of what has come from the experts on the Intergovernmental Panel on Climate Change. Their seven-year study states that they are now 95% certain that human activity is a significant and avoidable element in driving climate change around the world. Predicted changes in the climate are now being observed in the most vulnerable countries, confirming the predictive models that have been used.

The suggestion that action on this would have too great an economic cost is likewise looking increasingly shaky.

No, absolutely not. Proof that some action is required, proof even that some actions would be justifiable, is not proof that all actions are desirable or justified. It depends upon the economic cost of each action itself to determine that.

Or, to put it in a shorter and simpler manner. Just because climate change might be real it doesn't mean that the world of Caroline Lucas, George Monbiot or Bob Ward makes any sense. We're not entirely sure that a world that contains Bob Ward makes sense come to that.

Learning from history

In the Keystone Cops comedy that is the contending parties in the Scottish Independence referendum campaign, it seems that the Scottish No team have been making all the same mistakes that Canada's No team made on Quebec independence back in 1995. True, the Quebec referendum campaign ended in a narrow No decision – but so narrow that it kept the independence issue alive and grumbling. Next week's Scottish referendum has become too close to call, but most polls are predicting a No majority - though again, one so narrow that it keeps the independence issue alive and grumbling here too.

It seems the No team have learnt nothing from Canada's experience of nearly twenty years ago. Andrew Coyne of the National Post lists the similarities:

• The same early complacency in the No camp.
• The same unbridled panic as the Yes side surged in the polls.
• The same unappealing mix of threats and dubious accounting claims.
• The same blurring of the issues (devo-max, keeping the currency).
• A charismatic Yes leader and a seemingly distant No Prime Minister.

As in Canada, says Coyne, an unwarranted legitimacy was conferred on the separatist project; then came attempts to pacify it with more powers and more money, only to see it grow more ravenous in response. And once again,  a Yes vote is probably forever, while a No vote just marks the start of fresh campaigning.

It all looks like one of the slow-motion car crash in those early comedies. Except this particular farce is deciding the UK's future political and economic reality.

Strange fruit

Vishal was the 2014 winner of the Adam Smith Institute’s Young Writer on Liberty competition.  The free trade of all goods and services seems likely to be optimal—however, given that there are countless lobbies and political pressures that make this situation currently infeasible, I will argue for the abolition of tariffs and restrictions on the trade of fruits and vegetables.

A global abolition of import tariffs and restrictions on fruits and vegetables would, on a static analysis, reduce tax revenue derived from them and increase demand for fruits and vegetables as their prices decreased. But dynamically, reducing the revenue derived from tariffs on fruits and vegetables may well be more than offset from the gains in labour productivity and the increase in national income (and tax revenues) that may result.

David Blanchflower, Andrew Oswald & Sarah Stewart-Brown (2012) found that, after controlling for various other factors, individuals who eat 7 fruits and vegetables a day are found to be significantly happier than those who do not. They further found that this improvement in psychological well-being is nearly as much as the increase in happiness from being employed versus being unemployed!

On top of psychological well-being, greater fruit and veg consumption may also improve general health—itself a benefit—and potentially freeing up healthcare funds. Furthermore, Andrew Oswald, Eugenio Proto and Daniel Sgroi (2009) found that there is evidence to suggest that happiness does raise productivity.

An increase in happiness would also be amplified by the dynamic, contagious effect of happiness: it would spread through the population, further amplifying the economic gains from the easing of import tariffs and restrictions. This phenomenon has been well documented, including in James Fowler & Nicholas A. Christakis (2008).

Some countries already have low import tariffs on fruits and vegetables (in the US tariffs on fruits and vegetables average less than 5% according to Renée Johnson (2014)). But there are several economies where the tariffs are substantially higher; more than three fifths of EU and Japanese tariffs on fruit and veg are between 5-25% and nearly a fifth exceed 25%. Other countries with relatively high import tariffs on fruits and vegetables include China, Egypt, India, South Korea and Thailand.

Perhaps most importantly, the abolition of tariffs and import restrictions on fruits and vegetables would be a big boost to society's least fortunate, a group particularly hard up during an economic crisis like that from which we are only just recovering.

The abolition of tariffs on fruits and vegetables would reduce their price and increase their consumption. The initial drop in tax revenue would be offset by both the direct improvement in psychological well-being and its contagion that would work to enhance labour productivity, national income, health and happiness. Let's pick the low-hanging fruit!

Some evidence that sweatshops are good for Bangladeshi women

I recently read an interesting paper by Rachel Heath and A. Mushfiq Mobarak, of the Universities of Washington and Yale, which looks at the impact that the garment industry has on young girls and women in Bangladesh. 

The results are quite amazing. According to the study, girls in villages close to garment factories (or sweatshops, as they are sometimes called):

1. Delay marriage. On average, a young girl living near a garment factory was 28% less likely to get married in the study year than the average Bangladeshi girl. This effect was strongest among 12-18 year olds.
2. Delay childbirth. On average, a young girl living near a garment factory was 29% less likely to give birth in the study year than average. Again, this effect was strongest among 12-18 year olds.
3. Are much more likely to go to school. Exposure to garment factory jobs was associated with a 38.6% increase in school enrolment rates. Broken down, this translated into a slightly lower enrolment rate for 17-18 year old girls, who presumably were more likely to be in work, and a considerably higher enrolment rate for girls younger than that.

According to the study’s authors, these findings are probably due to some combination of wealth effects (richer families need to marry off their daughters less early, and can afford to send their daughters to school for longer) and the fact that garment factory jobs reward skills, increasing the value of education.

The paper is an important reminder that sweatshops may provide significant benefits to their employees and the places they are located. They are by no means all good, but they are not all bad either, which well-meaning campaigners against sweatshops would do well to remember. A working version of the whole paper can be accessed here.

It's a good policy but it's not enough

Around here we welcome good policy whoever suggests it. So, given that this is a good policy we welcome it but would also insist that it doesn't go far enough:

 The Liberal Democrats are looking at the decriminalisation of all drugs for personal use and allowing cannabis to be sold on the open market.

Launching his party's draft election manifesto, Nick Clegg, the deputy prime minister, said the party would consider such options after they were advocated in a policy paper due to be discussed at the Lib Dem conference next month.

The paper said the Lib Dems "will adopt the model used in Portugal, where those who possess drugs for personal use will be diverted into other services". The southern European country decriminalised personal possession of all drugs in 2000.

The document also said the party "welcomes the establishment of a regulated cannabis market in Uruguay, Colorado and Washington state".

That we should end the entirely ludicrous policy of jailing people for ingesting their substance of choice into their own bodies is obvious. Government should no more be regulating this than it should be regulating the ingestion of cake, apples and pan haggerty (not that that stops the usual fruits and nuts from arguing that it should of course).

However, simple decriminalisation is not a sufficient policy: for markets do of course require regulation. No, regulation is not "what government does", it's entirely possible for markets to self-regulate. However, for them to do so it's necessary for there to be (in this case at least) brands.

For one of the great problems with drugs being illegal is that no one ever quite knows what they're taking. That heroin might be cut with icing sugar in which case little harm is done. It might be cut with rat poison in which harm is done: and they might have run out of both and not cut it at all in which case you'll be dead soon after injecting. The same is true of all of the other drugs that people like to take (that they like to take them being, obviously, the reason why they should be allowed to take them, it's their life, their body, not yours). Inconsistent quality.

And we saw this before, with the industrialisation of food back in the 19th century. Yes, from the 1870s on (with some very small baby steps a couple of decades earlier) we did have a series of laws about what could be put into what form of food. Alum into bread, that sort of thing. However, by the time the laws came into being the regulation was already happening. By people branding their products so that people could decide for themselves who they trusted to provide a decent and consistent quality. This was in fact the original purpose of manufacturer branding: not to feed excessive consumption but to identify those feeds that wouldn't kill you. As you would know by still being alive a week after you'd had your last portion of that nourishing beef broth from Rat and Catcher's Patent Manufactory.

That is, to regulate product quality, something we desperately desire in this field of currently illegal drugs, we need one of two things. Either legislation providing a testing system (something that's simply not going to happen) or freedom of supply as well as consumption. For only with that freedom of supply will there be that branding and thus regulation of quality that we need.

Decriminalisation is better than the current situation (and your humble author does live in Portugal and has done throughout the decriminalisation process) but it's not enough, we need to move to full legality. Controlled distribution, fine, taxed, fine, limited, fine, but regulation of quality must be done in some manner. And the best way is for producers to compete on quality just as was done 160 years ago with food.

Do we need state children's services?

Our children need care and protection from abuse.  The question is whether the responsible bureaucracies give value for money, or indeed provide that care and protection at all.  Following each scandal, we are told that no one is to blame: the problem is systemic.  Then we are told that the bureaucracies will work better together in the future.  Then history repeats itself.  Rotherham should be a wake up call. In fact, the problem really is systemic and it needs a systemic solution. It is not a question of money. From 2001 to 2010 English and Welsh councils’ child social care expenditure nearly doubled from £4.7bn to £8.6bn at 2010 prices (while the number of under 15s fell slightly). Would anyone suggest that the quality and extent of childcare has doubled?

Of course the problem is hugely complex and there is no single, simple solution but surely one factor is the excess of bodies paddling in the same swamp: Local Authority children’s services, schools, doctors and hospitals, police and charities such as Barnardo’s and the NSPCC.  Each case is like Gerard Hoffnung’s performance by solo violin and massed conductors.

Serious child abuse of any form is a crime.  Where a teacher, doctor or any social worker believes that a crime may have been committed, or may still be in progress, then that should be reported to the police like any other possible crime. The police should investigate without fear, favour, concerns for being branded racist or other politically correct excuses for doing nothing – or passing the buck to social services.

The bigger question is then whether children’s services are necessary at all.  If the current Local Authority bureaucracies did not exist, what would we put in their place?

Rotherham demands a systemic solution and that in turn suggests we start with a blank page.

Clearly we need the youth justice system and adoption facilities alongside those offered by the voluntary sector (e.g. Barnardo’s).  But Local Authorities’ manifest incompetence in adoption suggests maybe that should be turned over to the voluntary sector and perhaps arrangements for fostering too.

If taxpayer value would be improved, as it is being for schools, by channelling taxpayer funding through the voluntary sector, then why not?  Equally well if something like the existing services can be radically rebuilt to give our children the protection they need, then so be it. But if we just go on tinkering and adding more boxes to tick, more Rotherhams could follow.

So the State schools can't manage to teach the kiddies to read then, eh?

So here's a little fining that adds to the shine of our glorious state. Despite the fact that we spend some 5% of all of the value created in the country on education each year that glorious state school system can't actually manage to teach the kiddies to read:

The fear that 1.5 million British children will reach the age of 11 unable to "read well" by 2025 has prompted the launch on Monday of a new campaign backed by a coalition of businesses, charities, bestselling authors and teaching professionals.

The Read On. Get On campaign is aimed at making a radical improvement in reading standards one of the central goals of politics and education in the next decade. It is being spearheaded by Save the Children, the CBI and the Teach First charity and is unusual in the diversity of its supporters – they include authors JK Rowling and Michael Morpurgo plus a host of book publishers, the Sun newspaper and the Premier League.

One aim is to get the main political parties to include in their 2015 manifestos a commitment to improving the reading of the most disadvantaged.

So let's attempt to draft something for the manifesto of any party that wishes to pick it up shall we?

How about: "Schools that do not manage to teach children to read within a year of that child's entry to that school will be closed and all of the teachers fired"?

Or perhaps "Schools will teach children the value of self-structured play after they have taught them to read"?

Possibly even: "No teacher will receive a teaching qualification until they have demonstrated that they can teach a 5 year old to read"? With the obvious proviso that all of those who currently have a teaching cert must prove this over the next school holiday?

Something needs to be done after all: that education system does get 5% of everything and the State does claim a rightful monopoly on education (sure, they let a few slip away but they still claim that they should be educating everyone). So why on earth are we letting them get away with not performing their most basic duty?

After all, the Church schools of more than a century ago managed it, why can't "highly trained well resourced professionals" manage it? Education systems in other countries, many of which get considerably less money, also manage it.

Could it, possibly, just maybe, be because the current school system just isn't very well run?