The Pin Factory Blog

On July 4, 993, Saint Ulrich of Augsburg was canonized. Well, that too, but perhaps slightly better known is the adoption of the Declaration of Independence by the Second Continental Congress in 1776. Yesterday America celebrated the anniversary of her self-rule, recalling her struggle for liberty.

A great irony and pity, then, to read this story in the weekend’s New York Times. On June 24, New York became the latest American state to legalize same-sex marriage, to the joy of proponents of individual liberty everywhere. As supporters clinked champagne flutes outside the Stonewall Inn, though, the four Republicans who voted for the bill doubtless brooded on their political futures. The NYT article ponders the same, describing staunch conservatives’ vows that the four will never be re-elected. Michael R. Long, chairman of the Conservative Party, says that none of the men will receive the party’s endorsement. The National Organization for Marriage, an anti-gay marriage pressure group, claims it will spend $2 million in an effort to defeat the legislators at the next election.

That’s fine. Mr. Long and his party are under no obligation to support senators who take positions with which they disagree. The NOM may campaign against people it considers unfit for office. But how horribly dispiriting it is that there is still such fervent opposition to gay rights in America. Senator Roy J. McDonald, one of the Republicans who voted for the bill, responded to a reporter’s question with, “Well, f--- it, I don’t care what you think. I'm trying to do the right thing”. Senator Steven M. Saland justified his “aye” vote in similar terms, saying, “I must define doing the right thing as treating all persons with equality”.

This, I think, is the heart of the matter. A Catholic priest should not be forced to marry a gay couple, but nor should Catholicism, or any other personal belief or doctrine, be used to bar that couple from marrying. Good on New York, fingers crossed for the rest of the Union.

Over in the think pieces section of the site, you can read Karthik Reddy’s analysis of the UK’s aviation industry and his recommendations for improvement of the industry. Karthik says that among the biggest problems facing the industry is the fact that the government allocates airport take-off and landing slots to airlines based on perceived need rather than on the ability of these airlines to pay.

As with many government schemes that try to allot scarce resources along supposedly ‘just’ lines, the airport slot system is rife with negative unintended consequences. Because airports slots are taken away from airlines which don’t use them enough, airlines are often forced to fly nearly-empty (sometimes completely empty), loss-making flights in order to maintain usage and meet the targets needed to maintain possession of the slot. Remedies to these problems, like requiring a certain number of passengers on flights, have led to ridiculous situations like the airline Flybe hiring actors to fly between Dublin and Norwich to meet numbers. The problem with government targets like this is that the market is necessarily ingenious at getting around them.

The government’s attempts to be judicious with scarce airstrip slots has in fact created even more of a scarcity, by forcing airlines to fly unwanted flights at the expense of passengers for flights that are in demand. Karthik recommends that this scarcity be eliminated by auctioning off the slots to the highest bidder and allowing them to be used in the way the market deems to be the most efficient. (Note that, as well as airlines and other businesses, bidders could include local residents who want to avoid the 6am wake-up call from the local airport – if they are prepared to put their money where their mouths are.)

As well as landing slots, Karthik discusses the regulation of airports themselves that has created poor services and a shortage of airports around London (and arguably a surplus of airports in the rest of the country due to political concerns). The think piece shows that many of the worst inefficiencies in the aviation sector come from artificial scarcities created by government. As Karthik says, we should give everybody a breath of fresh air and set Britain’s aviation industry free.

The Guardian has published many silly pieces in its time, as have other papers, but today it published a piece by Lynsey Hanley that must rank as one of the most breathtakingly silly of all time. The article claims that raising the income tax threshold to £10,000 patronizes the low-paid. Moreover it "disenfranchises 3 million people":

More fundamentally, it suggests that people on low wages are effectively earning pin money, not "proper" money that requires being taxed, and therefore that the low-waged aren't full citizens. The article goes on to say that if people don't pay towards public resources, they lose their perceived entitlement to them.

Where to start? First of all, low-paid people pay a great deal in taxation, especially in VAT, and many of them pay taxes on alcohol, tobacco and petrol, plus dozens of other unseen taxes. The £10,000 threshold only exempts them from income tax, which is quite reasonable when you realize it is below the minimum wage. If people are not earning the minimum, it makes no sense to take some of their money away from them. They still pay the other taxes. Secondly, if paying no income tax makes you lose your "perceived entitlement" to public resources, doesn't paying less tax than someone else give you less entitlement to them?

Lynsey Hanley claims that "a fundamental component of citizenship, however, is paying towards the ongoing work of building and maintaining resources for everyone to use." In her disoriented world people on pensions, or disabled people supported by the state would not appear to be full citizens. I disagree.

In her world "Tax cuts are always a sop, no matter who you're giving them to." Again, I beg to differ. When the state takes less of our money it isn't "giving" us anything, certainly not a sop, because the money does not belong to the state. She wants the poor to pay taxes to make them full citizens. "To tax only the rich, or the better off, is madness. It's disenfranchisement by any other name," she says. No it isn't. It is taking money to support public resources from those who can afford it rather than from those who cannot. The rich should pay the taxes for the same reason that gangster Willie Sutton robbed banks, "because that's where the money is." I like it when we succeed, by lowering top tax rates, in having the rich contribute a greater share of total taxation. That's what should happen.

I wonder how many of the low-paid would agree with her that they should be paying more income tax? I suspect you could count them all on the one finger they would use to indicate their opinion.

Terrorists plan to plant bombs in tins of alphabetti spaghetti. They reckon that when one goes off, it could spell disaster.

I received an interesting pamphlet yesterday from the Society of Conservative Lawyers. Entitled A Modern Bill of Rights, it contains extracts from the work of various Conservative lawyers on whether Britain should have a 'Bill of Rights' to replace the Human Rights Act (something David Cameron has pledged to do) and on what form such a bill should take.

The problems with the Human Rights Act (HRA), which incorporated the European Convention on Human Rights into UK law, are encapsulated rather well by Jonathan Fisher QC in the pamphlet's preface:

In some instances the recognition of the Convention rights had led to absurd outcomes, whilst in other cases the Convention showed itself to be an inadequate protection against the anti-libertarian tendencies of an authoritarian government.

In a subsequent section, Martin Howe QC elaborates on the Convention's deficiencies. Since it is based on very broadly defined rights and exceptions, he says, with some rights conflicting with others (like privacy with freedom of expression), the Convention requires British courts to make political value judgements. This is anti-democratic (political judgements should be left to elected officials), and also threatens to politicize the judiciary, eroding its neutrality.

They build a good case against the HRA. But how should its replacement, the British Bill of Rights, be drafted? A written codification of our traditional liberties and common law rights (habeas corpus, trial by jury, etc.) would probably be the best option. As Dominic Grieve MP suggests, it should be exempted from the Parliament Acts, so that both Houses' approval would be needed to change it. All legislation would be have to be interpreted in accordance with it. Unavoidably incompatible secondary legislation would automatically be struck down, while primary legislation would be subject to judicial 'declarations of incompatibility' (as is currently the case under the HRA).

Such a system would protect liberty far more effectively than the present arrangement. And because those traditional liberties are so clear, well established and understood in English law, the courts would no longer be forced to make political judgements or encouraged to deliver perverse outcomes. That would be a definite improvement.

David Cameron has said that the government will establish a commission to consider a ‘British bill of rights’, according to PoliticsHome. On the face of it that sounds like a good thing – after all, we could certainly do with a bit more protection from big, intrusive government, keen as it always is to restrict our liberties and interfere in our lives.

And while the US Bill of Rights may not have protected Americans from the massive expansion of the federal government, it has at least ensured that considerations about liberty are always part of the debate. How nice it would be to having something similar here.

But I’m skeptical of Cameron’s plans on two counts. Firstly, this idea seems to have been brought forward in response to the Supreme Court’s decision that sex offenders should be able to appeal against being kept on the sex offenders’ register for life, with Cameron saying, “I think it's about time we started making sure decisions are made in this parliament rather than in the courts.” So this Bill of Rights may be more a sop to the populist press than a binding, principled commitment to liberty and the rule of law.

On the other hand, there’s a real danger that any Bill of Rights drafted today would be hijacked by the left-wing human rights lobby, which is seemingly incapable of differentiating between genuine rights (which ensure one’s freedom from arbitrary, tyrannical government) and social entitlements (which demand that wealth be transferred from others to oneself). But as Jacob Mchangama pointed out in his excellent briefing paper, The War on Capitalism, there’s a huge difference:

The ideological bias in favour of central planning and against capitalism of much of the human rights movement is a serious impediment to the effective promotion and implementation of human rights. If human rights become part of partisan politics they lose their moral power as generally recognized norms, which serve to restrain governments from arbitrary and authoritarian practices and to shame governments that engage in such actions. That is precisely the function of freedom rights and is what makes these rights capable of judicial and universal application regardless of whether political power is held by social democrats or classical liberals.

Social rights, on the other hand, institutionalize a vision of society based on a specific political agenda, which excludes political pluralism and undermines the rule of law and separation of powers. Moreover, rather than restraining government action, social rights require governments to take prime responsibility for large parts of human life that would otherwise be left to the individual. Ultimately, therefore, social rights endanger the freedom secured by freedom rights. Such a development is unacceptable and represents a huge step backwards from the hard-won liberty enjoyed by many people all over the world. It is therefore high time that advocates of human rights resist their politicization and focus their energy on fighting for the right of everyone to live in freedom. To that end, freedom rights should be embraced and social rights rejected.

To sum up, a British Bill of Rights devoted to the protecting the individual against the state would be a very good thing. But a Bill of Rights designed to make political populism easier, or to constitutionally entrench the welfare state, would be a strike against liberty and very much a step in the wrong direction.

New York has changed astonishingly in recent years. New Yorkers used to go round in despair about the crime, the grafitti, the vandalism, the run-down building, the gum on the filthy streets. People on those streets looked stressed, workers in shops and service industries were surly. All that has changed. The place is far cleaner. Even the subway trains, once totally covered in graffiti, now have next to none. The streets don't have gum and litter on them like London's. The car drivers don't seem so determined to run you down any more. Sure, New Yorkers are still New Yorkers, but they now seem more polite, they shout less, and use far fewer profanities than the folk you see on Britain's city streetst. They're even quite cheery, and the fear of crime is far, far less.

Much of change is attributed to Police Commissioner Bill Bratton, and his 'broken window' approach. He believed that it was no good just despairing about crime and vandalism. You had to start, where you could, right away. Fix the broken windows and clean up the grafitti, so the place doesn't look so run-down, and people might start to care for it a bit better. Introduce neighbourhood policing so that citizens know who's supposed to be protecting them, instead of regarding the police as distant, donut-chomping layabouts who flash past in noisy squad cars.

It's a policy I would recommend for Britain's public finances too. Don't get overwhelmed by the (seemingly overwhelming) size of the deficit and the debt. Fix the broken windows of inefficient, top-down- control public services. Clean up the sticky mess of quangocracy and regulation that gets under the feet of enterprise. Introduce neighbourhood policing of public spending and politicians by posting all government expenditure and all proposed legislation online for the public to scrutinise. Return control of public service to local communities – and better, to the people themselves. Do that, and not only will we get Britain out of its debt malaise more effectively. We might even end up with a better society, too.

It's Budget day in Britain. We've a new Chancellor, but one under the shadow of his predecessor, Gordon Brown, who is now Prime Minister. That's a pity, because the public finances need repair. Spending and debt have both soared, to levels that the current economic climate makes unsustainable. It's not a problem that you can solve in one day – particularly with the markets so jittery. It needs maybe a five-year programme of reconstruction, at a pace that taxpayers and investors can afford. A new start. But we won't get it.

Ten years ago, UK public spending was lower than the (roughly) 40 percent of GDP that the OECD averages. Now it is much higher, at 45 percent. And as spending has grown, the government has consistently been on the over-optimistic side of prudence. Receipts have been overestimated, and spending underestimated, in almost every Budget.

And what has the extra money bought us? The NHS budget has almost doubled. Education spending is up by around 50 percent, as is policing. But our health, education, and crime figures just aren't keeping pace.

Many economists believe that countries prosper more when their public spending is less. And they certainly prosper more when business is not facing the constant assault of regulation and taxation – and of the uncertainty that goes with both. That's why we need a long-term programme to reduce the burdens, not fickle, headling-grabbing stunts like the assault on non-doms.

We need policies such as an annual phasing down of corporation tax, right down to the Irish level of 12.5 percent – which would create more investment, employment, and wealth. And getting a year-by-year better grip on spending by not replacing civil servants who retire. And a genuine strategy to reduce the cost of regulations – not just talking about it.

In the private sector, many people are now struggling to pay off the debts they accumulated in the good times. In the public sector, the government now faces exactly the same problem. Over the boom, when it should have been building up a cash chest that would help us all through the bust, it has carried on spending and borrowing. Like those private borrowers, it needs to take a long, hard look at its future finances and produce a long-term plan to get itself out of the hole. We need a new beginning. How sad it is that the political realities make that impossible.

According to the FT, Alistair Darling’s aides are "privately calling the April 22 statement a 'Budget for jobs'". Well, nice idea, but I'm sure they'll mess it all up by (a) coming up with some expensive and ludicrously complicated scheme for the private sector, while (b) boosting public sector employment at the unavoidable expense of lost jobs in the productive part of the economy.

Of course, if the Chancellor really wanted to do a 'budget for jobs' he could do so very simply by abolishing the employers' national insurance contribution. It's a perverse tax on jobs even at the best of times, but in a recession when unemployment is skyrocketing, it's just plain stupid.

In theory, of course, the abolition of employers' NIC would be a costly tax cut in terms of lost revenue. But in practice, I doubt the Treasury would lose very much at all. By effectively cutting labour costs by 12.8 percent, getting rid of employers' NIC would save countless jobs, and correspondingly reduce the amount being paid out in benefits. It would also make British companies far more competitive internationally, and in doing so help the economy to recover.

The cyclone in Burma reminds us of the misery inflicted by human disasters as much as natural ones. The (all too common) human disaster of totalitarian governments leaves people trapped under regimes which think that they know best. They know best how to plan and run the economy, they know best where people should live and what they should do, they know best how people should conduct their personal, cultural and spiritual lives, and they know best how to meet what nature throws at them.

Except they don't. They don't have a thriving economy because, as Hayek showed us, information is over-concentrated at the centre, and decisions are out of date or just inappropriate by the time they get out to the sticks. And they are unable to deal with natural disasters for much the same reason: information is slow to get to the decision-making centre, slow to be processed by the bureaucracy, and slow to get acted on. Economic backwardness, and the fact that capitalism is seen as a threat means that there is less capital – trucks, helicopters, cranes, hospitals, utilities – that can be focused on dealing with natural disasters.

Richer countries, by contrast, can build more strongly, defend themselves from storms, floods and earthquakes more effectively, and repair the damage more quickly. There is more capital to throw at the problem, more decisions are made locally, and more people are willing to get stuck in without waiting for the government to tell them what to do. If you want an example, remember the Hurricane Jeanne in 2004 that killed over 3000 people in poor Haiti but only 5 in rich Florida.

And yet, some people seem determined to compound the misery by keeping poor countries poor – refusing their imports in order to protect our own manufacturers, or demanding that they rein back industrial development in case it pollutes the atmosphere. If you really want to help the planet and the lives and welfare of all who live in it, my prescription would be liberal democracy and free trade. That's the best form of aid we could give to anyone.