The winds of change. We may soon be able to control greenhouse gases.
"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
The winds of change. We may soon be able to control greenhouse gases.
To celebrate World Environment Day, a list of things you really might want to think about doing to protect the environment. That list is both true and useful but more importantly it will enrage all the right people.
Netsmith does wonder how popular this idea will be: cutting MPs' pay might indeed be wildly successful with the electorate but unfortunately they're not the people who get to decide.
Another example of gross overspending of taxpayers' money. Central government just doesn't seem to be able to get value, does it?
Explaining the BBC's insistence that it does not overpay. Essentially, it's claiming that the BBC does not pay more than the BBC.
That globalisation, trade, release the handbrakes on the economy thing. Seems to be making the poor rich which is what we all want, yes?
For the Colonial Cousins, a possible reworking of the Pedge of Allegiance.
And finally, the real reason to have that Britishness day on different days in different parts of Britain. Well, someone's got to remain sober that day, don't they?
Who says you need a powerful, centralised state to run a country properly?
British politicians such as David Cameron are slowly catching on to the idea that centralized government is the enemy of innovation, efficiency and quality. But our cousins in Switzerland have been showing the way for decades.
Switzerland has emerged as a world centre for value-added industries such as pharmaceuticals and banking, and is in the global top 12 service exporters. Its GDP per capita, (estimated at $39,800 in 2008) is amongst the highest in the world. Its healthcare system is one of the top rated in Europe, and its transport system is legendary. Meanwhile, it is one of the few countries in Europe never to have had major social upheavals or revolution.
Much of this quiet success is due to the fact that, unlike Britain, the central government in Bern has very little power. Instead, Switzerland operates a system of direct democracy that gives individual citizens an unparalleled degree of political empowerment.
Decisions ranging from taxation through policing to taxi regulation are made at the local level. Through their local Canton, individuals can propose legislation, or oppose initiatives made at the federal level via referendums. Cantons also set corporate and personal tax rates, leading to a degree of tax competition that ensures pressure on taxation is down rather than up.
Imagine if Britain had such checks on central power. No longer would ambitious politicians be able to inflict their ‘visions’ on the country. Health bureaucrats, police chiefs and educationalists would be forced to look to the people they serve rather than to Whitehall. It’s also hard to imagine counterproductive ideological policies like tax credits being tolerated under such a system.
With England out of the Euro football champions this summer, there’s no question which team we should be supporting. Hopp Schwiz!
Yesterday Ben Bradshaw, the health minister, announced plans to allow the private sector to take over failing NHS hospitals. Gordon Brown backs the idea. On the one hand, this is a welcome development: the government is acknowledging that even in healthcare, private sector management can deliver better results at a lower cost. That realization bodes well for the public service reform agenda.
But the details of the plan are rather less appealing. The government will set a range of minimum standards that hospitals will have to meet. If they don't meet the standards, they will be given a deadline to turn things around. And then if they don't improve, management will be transferred to other NHS units or (potentially) to private companies operating under a franchise agreement (with lots more targets to meet).
Essentially then, this is about strengthening central control over the system. And, to adapt Reagan's line, central control is not the solution to the NHS' problems – it is the NHS' problem. Care is not focused around patients because management incentives all point in the opposite direction. Hospitals do not succeed by satisfying patients, but by meeting government targets. The targets are well intentioned, certainly, but they lead to bloated management, endless paperwork, creative accounting and distorted clinical priorities.
The NHS does need to be made more accountable – but to patients, not the government. Hospitals should be given their independence, and patients should be put in charge of their own care. That's the kind of 'privatization' I'd be in favour of.
Recent elections in the UK and the end of the American primaries prompt the question: what does the future hold for the two greatest Western powers?
For the United Kingdom, the future is bright, despite the somewhat pessimistic mood. The Labour Party, to the dismay of Polly Toynbee, at least recognises the need to cut taxes and haul in spending. The Conservative Party may campaign on (perhaps among other things) low taxes and smaller government. Either way, it seems friendly changes are on the way.
For the United States, it’s difficult to say. Over the last few years, the debate has been centred not on big government and high taxes vs. small government and low taxes; but on big government and high taxes vs. big government and low taxes. The second option, favoured by Republicans, obviously does little good for the economy. The first, favoured by Democrats, is obviously not ideal either but at least does not encourage debilitating debt.
Will Gordon Brown read the writing on the wall? Will David Cameron and his party exploit failed Labour policies that have raised taxes and spending over the last ten years? If elected, can John McCain resist the Republican trend to incur debt and grow government? Can Barack Obama resist his party’s inclination to subsidise, intervene and regulate?
In other news, there’s also this war…
On British governmental stupidity: the proposed Britishness day falls on different dates in England and Scotland.
Economic illiteracy does seem to be depressingly common, doesn't it?
On the modern relevance of Hayek and why the welfare state might eat itself.
And finally, it's the rich who benefit from high European petrol prices.
An article in the New York Times about Spain’s water crisis struck me as another example of the importance of incentives, the problems of bureaucracies, and the superiority of market-based solutions to even the biggest problems.
Basically, we see two sets of responses to the problem of water scarcity in the southern parts of Spain. On the one hand, a bureaucracy that tried to allocate water to different groups at different prices was created. Shockingly enough, this response has major problems. People manipulated the system, as resort owners and vacationers planted a few trees and claimed to be farmers to get lower prices. Meanwhile, farmers who had to pay very little for water began raising crops that needed more water. A trend that is a major cause of the desertification we’re now dealing with. While on the other hand, when costs and the decreasing availability of water actually had an effect, farmers moved towards more efficient irrigation methods and crops that required less water.
Incentives matter. Governments shouldn’t be subsidizing unsustainable lifestyles in arid locations, especially when that will only worsen the situation. If farming is only economically sustainable with subsidized water, people should not be farming there. Water should be more expensive where it’s scarce or hard to access, even if that means fewer farmers or a shift in population towards more fertile areas. As water gets scarcer, a more market-based system would surely also do more to encourage the development of private desalination plants and water-saving technology, as opposed to simply pouring billions of taxpayer dollars into such projects.
If farming isn’t working out, Spain should move towards less water-intensive industries in those areas and import crops from places with more adequate resources and a comparative advantage. Very high water prices would encourage even the resorts and golf courses to find ways to reduce water usage rather than search for bureaucratic loopholes. People find ways around bureaucracies, but it’s much harder to find a way around the market.
According to Polly Toynbee of the Guardian, we at the Adam Smith Institute are mistaken to question the amount we pay in tax. With disjointed logic, she suggests that we are not paying enough (some of us that is) and this impacts badly upon the poorest. It is a shame that she has not found the time to explore our website a bit further, as she may not have had to go to the trouble of writing the article.
At the Adam Smith Institute we call for the introduction of A Flat Tax for the UK. This proposal includes a tax-free personal allowance of £12,000 that will take the poorest out of the tax net. Also, a low flat tax will stimulate investment, make businesses more productive, and so boost jobs, pulling people out of poverty. The low-paid in work also benefit, for as more jobs are created and the demand for workers goes up, wages will rise.
However, Toynbee might well still disagree with us. In reality nothing short of full-blown Communism accords with Pollyland. Her statist utopia (dystopia) includes not a semblance of meritocracy or individual choice. She has no trust in the people to act for the good of themselves; this is why she and others in Polly's Politburo decide everything for us.
Toynbee fears that tax cuts will become a central policy for all three parties in the next election. Let's hope she is right…