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"Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice" - Adam Smith

Photos of the Adam Smith statue

Written by Blog Administrator | Friday 11 July 2008


As you may have noticed, we've created a new 'statue' section on the website to commemorate the unveiling of the Adam Smith Statue in Edinburgh last week. The section is still under construction, but you can see more pictures of the statue and unveiling events here. Courtesy of the ASI's Xander Stephenson, you can also see some pictures here.

Picture above courtesy of Eben Wilson

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Blog Review 654

Written by Netsmith | Thursday 10 July 2008

Yes, we've got another suggestion that the internet here in Europe should be censored. But there's more to it than meets the eye.

Another little limitation upon freedom from the same source.

Not that things are that much better in the US, although they at least have a free speech protection in The Constitution.

Thorstein Veblen knew why the G8 had to have multi-course banquests while discussing global hunger.

You can go on soaking companies for the tax money until you reach a tipping point: but it's very difficult to get them back again once they've left.

An excellent response to a grasping taxman from Paul Hogan.

And finally, well, thank goodness someone has worked that out.


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My Country, ‘tis of thee, knows little about liberty

Written by Jason Jones | Thursday 10 July 2008

This week’s Economist contains some sad figures about my home country, the United States. Only one third of Americans believe free-trade agreements are good for the economy, the lowest figure in the developed world. On the other hand, a famous study in 1992 by Alston, Kearl and Vaughan (google: “Is There a Consensus Among Economists in the 1990's?") found that 93% of economists support free trade. Why is there such a discrepancy, not just in America, but worldwide?

Economics, in general, is not exactly intuitive. Most people don’t naturally come to the same conclusions that Ricardo and Smith came to without instruction and explanation. It is much easier to comprehend, "We should have tariffs because if we don’t, people will buy sugar from Jamaica instead of America. Plus — it could be contaminated since it comes from a developing nation."

The problem is that most people never really learn economics. Some high schools offer one course as an elective class, but most students go through high school knowing nothing of supply and demand and absolutely nothing of comparative advantage. In university, students generally only take economics if it is a required course — meaning many students graduate college without ever studying economics — even those who aspire to be high school teachers. If high schools did start to offer economics, who would be qualified to teach it?

The general lack of understanding carries grave implications. If voters oppose free-trade agreements, then politicians will certainly pander to fill their need. The doors open wide for demagoguery —meaning free-trade advocates are portrayed as insensitive and greedy.

It could be people never learn because they don’t have the opportunity. Perhaps though, it’s just because the OK! Magazine special of Wayne Rooney’s wedding is just so much more interesting than The Economist

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Power lunch with Andrew Mitchell MP

Written by Dr Eamonn Butler | Thursday 10 July 2008

Andrew Mitchell, Shadow Secretary of State for International Development, was our guest at a Power Lunch in Westminster this week.

Adam Smith wrote that nothing was necessary to lift a state from the deepest 'barbarism' to an advanced society, other than peace, 'easy taxes' and 'a tolerable administration of justice'. Mitchell too recognizes the importance of conflict resolution in providing the right soil on which economic achievement can grow. States in political and military turmoil don't create or export economic goods – rather,  they export terrorism and desperate migrants. That is why Conservatives are going to integrate foreign, development and security strategies with the creation of the National Security Council. Under this joined-up policy, DfID would be more than just an aid agency: it would be a partner in development, trade and security.

Quite right. Development isn't just about giving people money. The Conservatives also intend to set up an evaluation agency to make sure that UK taxpayers' money is spent effectively and transparently, rather than ending up in the pockets of politicians and officials.

And, thank goodness, they recognize that the engine of growth is trade and enterprise. I feel that they rather like what Peter Mandelson has been saying – that EU farm subsidies and trade restrictions keep people in poor countries impoverished – which is hardly good for traders in the richer countries either. But I think that even with the formidable Mandelson on side, getting the EU to sort out its spaghetti of trade barriers is a pretty tall order.

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No-one will be safe…

Written by Kat Rolle | Thursday 10 July 2008

This week the House of Lords began debating the increase of the pre-charge detention limit to 42 days.  As the reign of the present government, the UK is increasingly coming to resemble a police state. The rights of British citizens are being eroded and the new counter-terrorism bill is a clear example of this.
Terrorism is a threat but the government is taking counter-terrorism to an unwarranted and extreme level.  There are no safeguards to protect innocent people. If this bill is implemented, anyone could be accused of being a suspected terrorist and, consequently, not see daylight for 6 weeks. Such a state of affairs is morally wrong.
Adding to these concerns, the government has revealed that the increase is not actually necessary at the moment. However, it has stated that the 42-day detention limit may be "needed" in the future. Yet this is not an adequate reason to implement the bill. It is unacceptable that the government are giving the police the authority to detain any citizen on suspicion of suspected terrorism without any hard evidence and when there is no immediate threat.
It is widely assumed in Westminster that the government's main objective with 42-days (how exactly did they arrive at that number?) was to make the Conservatives look "soft on terror". Such an abuse of power is shameful.

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And another thing...

Written by Junksmith | Thursday 10 July 2008

From the Telegraph website:

Abbie Hawkins, a hotel receptionist, thought her mobile phone was ringing when she felt vibrations coming from her clothes...

"When I was driving to work I felt a slight vibration but I thought it was just my mobile phone in my jacket pocket," she said.

It was not until her lunch break, at midday when she felt a strange movement inside her bra, which had been hanging on her washing line the previous night.

"I plucked up the courage to investigate and I pulled out a little baby bat."

That's right, a bat. I wonder if it was happy to be released back into the wild?


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Blog Review 653

Written by Netsmith | Wednesday 09 July 2008

The real news about the G8 summit. This is of course a cut out n'keep guide to all of these international meetings.

A raw (and most depressing) report from the wilds of Glasgow East: yes, this is what the Welfare State has created.

Support for abolishing part of that State from an unexpected but most welcome source.

Again we see that there are some things just too important fo us not to have legal markets in them.

That isn't to say that markets don't have their imperfections.

Counter-intutive but still possibly true. Use the smallest supplier to make sure that the service in question never becomes widespread.

And finally, entrants in the world's shortest short story contest.

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Responsibility — what’s that?

Written by Jason Jones | Wednesday 09 July 2008

David Cameron’s now famous speech in Glasgow on Monday essentially covered two topics: the need to accepting personal responsibility and the government’s role in judging moral behavior.

His first point is dead on. As he said,

Some people who are poor, fat, or addicted to alcohol or drugs have only themselves to blame… We talk about people being ‘at risk of obesity’ instead of talking about people who eat too much and take too little exercise. We talk about people being at risk of poverty, or social exclusion: it’s as if these things… are purely external events like a plague or bad weather. Of course, circumstances… have a huge impact. But social problems are often the consequence of the choices people make.

There is nothing that ensures someone will stay in a miserable state more than blaming someone or something else. Indeed, if the fat, the poor, or the addict does not take responsibility, then why would he or she do anything to fix the problem?

The second point Cameron makes is a bit trickier. He said that “society has been too sensitive in failing to judge the behaviour of others as good or bad, right or wrong, and [it is] time to speak out against moral neutrality."

This brings up an important question: when should the government make such judgments? Generally, the government should let people live their lives as they choose. However, the welfare and health systems as they are subsidize bad choices and unhealthy behavior. Perhaps it isn’t the government’s job to dictate our moral code, but it is certainly not its place to pay for our bad behavior with heavy social and fiscal costs.

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Let’s stop subsidising failing government healthcare in Africa

Written by Phil Stevens | Wednesday 09 July 2008

G8 meetings follow a predictable pattern. In the months beforehand, campaigners call for more aid to Africa to fight diseases of poverty such as malaria. G8 leaders make grandiose speeches, commit billions of their citizens’ money, which then pours into the coffers of African governments. The health of Africans stubbornly remains poor. Campaigners accuse the G8 of not giving enough, and so on.

The foreign aid situation is becoming increasingly farcical. As William Easterly, author of The White Man’s Burden put it: “The status quo — large international bureaucracies giving aid to large national government bureaucracies — is not getting money to the poor." As Prof Easterly intimates, the failure stems from the insistence of OECD government donors to give the lion share of aid directly to governments, who they then rely on to plan, manage and deliver healthcare.

The brutal truth is that most health ministries are not up to the job. They have almost no data to tell them if their work is effective and are riddled with corruption.

Donors, meanwhile, judge their own effectiveness by ‘input’ factors such as the number of bednets or drugs distributed, but they often have no information about whether or not health is improving as a result of their activities.

It’s time to scrap this system which is doing little for patients, other than enriching people lucky enough to have jobs in ministries. 

We could, for instance, insist that all British aid is henceforth spent on output-based competitive contracts for delivering healthcare, open to profit and non-profit groups alike. Where this has been tried, as in Cambodia, it’s been an immense success, and is particularly useful for getting services to groups that have been neglected by government provision, such as the rural poor.

The obvious advantage is that if the contract-holder does not deliver results, they don’t get paid.

DfID is currently moving in the opposite direction, increasing the amounts it pays to subsidise general government healthcare. Its blind optimism is rather touching, were it not taxpayers’ money being wasted.

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Just stop digging

Written by Carly Zubrzycki | Wednesday 09 July 2008

A government-sponsored report on biofuel policy has concluded that the UK’s current biofuels policy could plunge an additional 10.7 million Indian people into poverty, in addition to hundreds of thousands of people throughout Africa. Biofuel policies drive up demand and prices for food staples, and their environmental credentials are far from pristine. Besides distorting the market for food, government-induced demand for biofuels has led to an increase in the destruction of the rainforest, potentially offsetting most of the positive environmental impacts.  In response to the report, the government plans to slow its planned expansion into biofuels, at least "until controls are in place to prevent food prices from rising."  The plan, it seems, is simply to counteract one government intervention that had unexpectedly bad consequences with another.

Placing controls to artificially keep food prices low will only further distort the market in some of the most crucial commodities for people around the world. Subsidizing farmers in one part of the world will only put others out of business, and price ceilings will only restrict the supply. At the same time, we cannot push for biofuel policies just because they sound nice and clean if the actual impact is starvation and no tangible benefits for real people. Maybe if governments stopped interfering in the market, creating demand that would not otherwise exist for the sake of policies with questionable environmental outcomes, those 10.7 billion people would be a lot better off.

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