Shahbaz Baloch joins the ASI

3881
shahbaz-baloch-joins-the-asi

As a keen economist (free market economist of course!) I consider it a great privilege to have the opportunity to work at the Adam Smith Institute. I look forward to this week at the ASI and hope to learn a lot about economics and politics. Besides Economics I recently sat AS exams in Politics, Maths and Physics. My main interests lie in political economy and I hope to apply to read Philosophy, Politics and Economics at Oxford University. To me these are the subjects that really govern our lives, day in and day out, and only by studying them can we truly understand not only the workings of a society but also of human nature itself.
 
There has been a lot of cynicism and criticism surrounding the capitalistic system which I myself hold dear, but the thing these critics fail to realise is that long-term prosperity sometimes requires short-term losses. All Gordon Brown’s ‘cushioning’ of the economic cycle during the Blair years did was to prevent those losses from happening naturally, so that they gradually built up into much larger problems – as is evident in today’s political economy. So let's not look at this crisis as a systemic failure of the free market but of an economic trough, which has been magnified by poor governance.

Living in a police state?

3872
living-in-a-police-state

Speaking at an ASI event earlier this year, David Davis posed an interesting question: "How do you know you are in a police state?" It is becoming an increasingly pertinent point. Accepting that we are not in a police state, at what point does it become one?

Of course, it is a question of semantics and one that may be a matter of opinion. Yet increasingly, perfectly sane and respectable people are using the term 'police state', a point of view that I am starting to have increasing sympathy with.

Living in London I would have imagined that it is a largely metropolitan dilemma; one that the shires would have escaped from. Yet reading the indomitable Henry Porter brings to our attention this case in Chatham High Street. The worrying trend of the state keeping increasing tabs on us, while we can’t even take a photo in public is profoundly worrying.

The slope is slippery and we must be watchful. The machinery for a totalitarian state must not be in the hands of even a benign power. As Andrew Porter states: "What is needed now is clear statement from the home secretary on the rights of photographers and the limits of police surveillance". It would be interesting to know where Alan Johnson and Chris Grayling stand on the matter.

Pondering on democracy

3873
pondering-on-democracy

On the surface of it, democracy appears to be a fair, agreeable way to run a country. But is it really as wonderful as it’s made out to be? The first thing to be contested with democracy is that it is as good as two wolves and a sheep voting on what to have for dinner. Perhaps from a utilitarian perspective, this would still be an idyllic system, but for lots of us (particularly the sheep) this is far from ideal.

It is, however, the nature of democracy, to be flawed on other levels. It is bound to be governed by short-term agendas. When a government comes into power, they have one term to impress the citizens. Any long-term policy will go unnoticed by the population. Similarly, governments will not have to suffer the long-term consequences of short-term policies. In fact, it is their opposition that is likely to suffer the consequences. Such a dynamic clearly does not operate in the interests of the country.

On this basis, it could be argued that government terms should be far longer than they are, arguably 20 or 30 years, so that they can implement, and see through long-term sustainable policy; although imagine the state of this country if the present lot remained in power for another ten years. Short of his ideal anarcho-capitalist state, Hans-Hermann Hoppe has argued that a monarchy would be better than what we have now: “Assuming no more than self-interest, the ruler tries to maximize his total wealth, i.e., the present value of his estate and his current income. He would not want to increase current income at the expense of a more than proportional drop in the present value of his assets." Indeed, a prosperous and secure society will raise the value of the king’s estate, so it is very much in his interest; but who is to say that the monarch would be so rational?

Unfortunately, every system of government tried has its flaws. I am quite undecided as to what is the best system. What I would argue is that to limit the flaws of any system in place, particularly those of democracy,  the power of the government ought to be kept at a minimum level. The less power the government has, the less propensity there is for them to make erroneous decisions.

Charity, private schools and the public benefit

3877
charity-private-schools-and-the-public-benefit

It's entirely possible to argue with a straight face that private schools damage the nation. I may disagree with you, think your contention that everyone should be forced into the failing State sector absurd, but that would be my opinion, not an objective fact thrown up by the universe to frustrate you.

However, if we were to try and discuss the costs and benefits of there being a private school sector, we would at least agree that parents paying more money to have their children educated, money over and above the taxes they have already paid the State to educate their children, is a public benefit. No? Saving the State billions which it can spend upon other things is indeed a public benefit? Sure, maybe it's one we might need to offset against other things, but it is a benefit?

Not, apparently, if you are the Charities Commission:

David Lyscom, the chief executive of the Independent Schools Council, has tried, without success, to convince Leather that billions of pounds of taxpayers’ money that is saved by schools educating children privately is a “public benefit" in itself.

However, this is not the worst of what the Commission is no doing as it looks at the charitable status of all those private schools. This is:

The commission have not told us what the test we have to pass is.

When a bureaucracy will not tell you what the law is, when they insist that everything is simply to be left to their discretion, then we have left the rule of law far behind. Indeed, I would argue that in this situation we have left the governance methods of a civilised society far behind.

Apologies for my fundamentalism in such matters but just as I'm sure there are both costs and benefits to having a private school system (and on net, benefits) there are also costs and benefits to having a Charities Commission. If such Commission is going to start using Kafka as an operations manual then, on net, we'd be better off without it. Abolish it and force Dame Suzi Leather to work for a living for a change.

New Labour score an F

3871
new-labour-score-an-f

Every year the marking, administration and validity of the SATs examinations seem to turn into a greater fiasco than the previous. This year thousands of papers will be sent back to the examiners due to sloppy marking. There are reports of students losing marks for spelling despite having no mistakes, and examiners taking marks off for undotted ’i’s whilst ignoring similar mistake on other candidates' papers.

The debate regarding the SATs is an ongoing saga in New Labour’s education policy and the lgonger it goes on, the more damaging it will be to young people. The validity of the grading system has been brought into question and people have naturally lost confidence in it. In time the system will become obsolete - how can teachers and schools authorities continue use the results of SATs to rate students and make important decisions on their futures if they cannot be certain the results are accurate?

We need to encourage more choice and diversity within our public examination system, rather than top-down control from the government who have their eyes set on headline statistics, and not the education of young people. A greater degree of privatization and autonomy would allow students to pick examination boards that had the best reputations for accuracy and exams that were tailored to their needs. In turn, employers would seek staff with qualifications from the most reputable and challenging exam boards.

This lack of confidence in our current qualifications system is already being seen with a growing number of candidates and schools opting to take the International Baccalaureate as opposed to the A-Level, which is all-too-often viewed as a ‘dumbed down’ or grade-inflated qualification. Clearly Labour are yet to fulfil their pledge on "education, education, education" – and they won’t as long continue to meddle in the system.

Measuring inequality

3876
measuring-inequality

It's almost impossible to open a newspaper these days without being reminded that inequality has grown in recent decades. The reactions to the stated rise do vary, that is true: from it being an unfortunate side effect of growth or globalisation in general to proof positive that we'll all be murdered in our beds when the rabble realise how badly they're being treated.

Will Wilkinson at Cato has a paper out which covers much of the extended conversation and I think's he's right in that inequality simply hasn't grown as much as some say:

To put if more breezily, if cheap stuff gets better faster than expensive stuff, the gap between cheap and expensive stuff narrows, which in turn narrows the gap in the quality of life between rich and poor.

There's a great deal to this: as he says, there's a difference between an expensive car and a cheap one but that gap is as nothing to the one between having a car and using Shank's Pony. Or between an expensive fridge, a cheap one and none.

It's very definitely true that income inequality has risen in recent decades: but much much harder to insist that consumption inequality has done. As an example, there are certainly differences in diet between the rich and the poor in the UK: but it's only in the last 50 years or so that all, of whatever station in life, are financially able to eat a full and balanced diet. We no longer have the height inequality we did (reflecting again nutrition, where the rich were substantially taller than the poor), nor the health care inequality and while education is rightly a bone of contention we've certainly advanced from the medieval idea that only the male rich or the clergy might be literate or numerate.

What makes this oversight from certain on the left so puzzling is that they are exactly the people who have been telling us for years that there is much more to life than simply grabbing for the filthy lucre. That health, enjoyment, leisure are also important, perhaps more so than money. Anyone with an adult and rounded view of life would have to agree with that sentiment, that there's more to it all than simply pilng up the pounds. Which makes it all the more puzzling that there is so much vituperation over inequality rising in that most trivial of things, mere cash, while all the other historically extant inequalites have been shrinking.

Unions need to look forward

3874
unions-need-to-look-forward

On Friday 12,000 postal workers from the Communication Workers Union (CWU) took part in strike action across the country over a row about jobs, pay and services. The Royal Mail claims this has not affected the mail service, but even if that rings true, there are clearly long-term issues coming to the surface.

The Royal Mail has been massively damaged by the rise of modern technologies that they cannot compete with. Since firms and individuals can now send and receive emails within seconds, the delivery of letters has started to become obsolete. Internet technology has produced an information highway with unprecedented capacities. The Royal Mail has failed to advance and keep up with modern communication. Unless they take action to modernise, they will be reduced to delivering Christmas cards and junk mail. The unions are acting as a massive barrier to any modernisation, failing to see that cuts need to be made if the Royal Mail is going to survive.

As we are currently in a period of rising unemployment, it makes sense that the greatest job losses in the economy should come from the most inefficient sectors. The interference of the unions in the efficiency of the postal service means the Royal Mail will remain stuck in this rut until it fails. A privatization of the service would allow cost-cutting and a readjustment to suit the modern technological age.

This is a clear example of union interference resulting in a loss for society and the economy. They cannot hope to seek immunity from the current recession; if they continue to throw their weight around, the fall will be all the harder in the long run.