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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

And another thing...

Written by Junksmith | Monday 26 May 2008

With news that a political party in Mumbai is getting into the fast-food business, will be too long before we see a Brown Burger or Cameron Kebab? Lets hope not.

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Blog Review 608

Written by Netsmith | Sunday 25 May 2008

We don't normally do investment advice around here but this might be an opportunity that you'll want to miss. Almost an object lesson in how not to do it.

Yes, it's true that many who have turned out to be right were first dismissed as crazy. As the intellectual prophet of econoblogging indeed was. (No, this argument does not work in reverse, remember that your being called crazy could in fact be because you are.)

Another example of technological change beating regulation.

On the comparisons between Gordon Brown and Hillary Clinton. One unfortunately made it, the other fortunately won't.

Unpicking the latest Greenpeace hysteria about the environment.

Larking about.

And finally, quite uncanny the similarities between the present and certain historial episodes.

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What would we like in a school system?

Written by Tim Worstall | Sunday 25 May 2008

Seriously, start with a blank page and ask yourself what we actually desire in a school system? This would be a good start of course:

The country that came top of the Unicef report and did consistently well in the international league tables was...

Yes, all in favour of that, being one of the best in the world means that you're at least doing things better than many, perhaps as well as it can actually be done.

But what it really means is that parents don't snare themselves in mortgages to get into catchment areas they can't afford, or pay expensive school fees or face the humiliation of having to rediscover a lapsed faith.

Yes, that sounds like something to be desired as well: not having to face financial ruin simply to educate the ankle-biters would appeal to most.

There is choice though, and ... children are in the upper quartile of the international tables, which might help explain why the ... is rated as the best place for a child to grow up in the developed world.

Oh, my, yes, that does sound like a good idea. So, how is this done then? What's the magic secret here? Clearly it's going to cost a fortune, yes?

If we want better schools for our children we need to spend more money, don't we? Well actually, no.(....) The surprising answer is that their results have nothing to do with money – in fact, they're spending quite a lot less than we are.

Really? Better schools, better education, the best place in the world to grow up, and it costs less money? Where? How?

They can choose whichever school will suit their child best. Not all parents make an active choice but enough do to influence the standard of schools everywhere. All this is based on the fact that parental choice in education is a part of the Dutch constitution. It assumes that one size does not fit all.

Yes, it's Holland, the Netherlands. The how is that they have a variation of the voucher system that we argue for here at the ASI. The parents choose the school, any one of them that they wish subject to minimal licencing requirements and the government pays the bills. Yes, top up fees are allowed, parents making that decision for themselves as well. We might also note that the Netherlands is a great deal more egalitarian than the UK and I wouldn't be surprised to find out that it has greater social mobility as well (for those who worry about such things).

Engineers have a saying that you can have "better, faster, cheaper, pick any two" for you can't have all three. But it appears that we run our current education system so appallingly badly that we can indeed make it better, fairer and cheaper.

So why is there anyone at all who opposes such voucher systems?

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Love Capitalism

Written by Philip Salter | Sunday 25 May 2008

Across the pond at the Mises Institute, Llewellyn H. Rockwell, Jr. has written a succinct defense of free-market capitalism entitled Everything You Love You Owe to Capitalism. Rockwell argues that:

The whole of our world is covered with lessons about the merit of economic liberty over central planning. Our everyday lives are dominated by the glorious products of the market, which we all gladly take for granted. We can open up our web browsers and tour an electronic civilization that the market created, and note that government never did anything useful at all by comparison.

However, as the size of government and still limited freedoms both sides of the Atlantic shows, the lessons of history have not been heeded. Rockwell puts this down to ignorance, suggesting that most people accept the existence of wealth in one place and poverty in the other as a given.

Using the painfully authentic scenario of a group of self-proclaimed socialists having a luxurious lunch, while criticising capitalism in isolation from their present surroundings. The solution of this ignorance for Rockwell is for economic education. His own elightenment came from reading Henry Hazlitt’s 1946 classic Economics in One Lesson. Still as true as the day it was written.


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Health and safety in sunny Dubrovnik

Written by Dr Eamonn Butler | Sunday 25 May 2008

Earlier this week I was at a two-day conference in sunny Dubrovnik, on the coast of Croatia – a country that used to be behind the Iron Curtain but which is now a candidate for European Union membership.

Hosted by the Stockholm Network, an umbrella group of European think-tanks, the conference went into the art and science of running a think-tank and making a difference to events. It was certainly refreshing to see so many talented people committed to the free-market cause and committed to changing reality in so many countries.

We were staying, appropriately, at the Libertas hotel. Liberty is a key principle here, a country which has come through the bitter war of the early 1990s when the beautiful old walled city of Dubrovnik, the Pearl of the Adriatic and a magnet for tourists, was shelled and laid waste. But now it's flourishing again, restored (apart from a few poignant bullet-holes) in just a few years, largely thanks to Unesco and its World Heritage Site programme. Perhaps Unesco has its uses.

The city had been destroyed before, in the earthquake of 1667. Among other things, this catastrophe brought on a new regulation, banning balconies on the grounds that many people had been killed by falling masonry during the tremor. My friend and fellow delegate Jose Pinera, the man who privatized Chile's pension system (and who is doing his best to privatize everyone else's) was scornful. Typical, he said: you get an earthquake only every 400 years or so, but still the bureaucrats rob us of the pleasure of sitting in our balconies, just in case.

Sounds like absurd Health and Safety rules are nothing new...

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Dumb Quote of the Century

Written by Wordsmith | Sunday 25 May 2008

“If I were a gambler, I would take even money that England will not exist in the year 2000."

Professor Paul Ehrlich, 1970, (Al Gore’s inspiration)

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Blog Review 607

Written by Netsmith | Saturday 24 May 2008

If the Crewe result were repeated nationally, a list of those who would lose their seats. More links to comments here.

Department of the unbelievable: how can people both believe that raising wages by imposing a minimum wage will not reduce employment while believing that raising the price of alcohol will reduce the quantity demanded?

Possibly the most ludicrous example of the intersection of public choice theiry and tariffs.

The point of education is indeed to educate: the point of markets in schooling is to allow people to pick and choose amongst the different meanings of "educate".

A simple plan: let's not tinker with CAP, let's just close it down.

The FLDS sect in the US. Yes, it looks like the authorities have in fact no evidence at all.

And finally, explaining the activities of politicians.


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Is Brown finished?

Written by Tom Clougherty | Saturday 24 May 2008

This week's Crewe and Nantwich by-election marks a big change in British politics. After running a truly nasty, class-based campaign, the Labour Party lost heavily in what was previously considered a safe seat, with an 18-point swing to David Cameron's Conservative opposition. If those results were replicated in a general election it would give the Conservatives a majority of more than 300, reducing the Parliamentary Labour Party to just 100 or so MPs.

Coming after catastrophic local elections and the loss of the London Mayoralty, Gordon Brown's future is looking very shaky indeed – to the point that many people, including the impeccably well-informed Ben Brogan, don't think he'll make it to the next election.

Could it really happen? Personally, I'm not so sure. The formal procedure required for the Labour Party to remove a sitting leader makes a coup unlikely, so Gordon Brown would have to step down voluntarily – which I can't imagine. Having wanted to be PM for so long, he'll prefer to cling on as long as possible.

More to the point – would anyone else really want the job at this stage? Ambitious politicians will want to wait until after the next election, rather than take over a sinking ship and captain it to a landslide defeat (a sure-fire way to end a career in Westminster). Any new leader would probably be forced into calling an early general election – the public would not take kindly to having a second unelected prime minister imposed on them in a single parliament – and would have almost no opportunity to turn things around.

I may be wrong, but I think we’re going to have to put up with Gordon Brown for a little while yet.

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Book of the week

Written by Booksmith | Saturday 24 May 2008

This week I recommend The Logic of Life: Uncovering the New Economics of Everything by Tim Harford (£12.53 + postage).
Harford's The Undercover Economist  showed how ordinary economics explained everyday curiosities, such as the outrageous price of a cup of coffee and the traffic jam on the way to the supermarket. His new book shows how the new economics of rational choice theory explains much, much more. Drug addicts and teenage muggers are rational. Suburban sprawl and inner city decay are rational. Endless meetings at the office and the injustices of working life? Rational. Economics explains why your boss is overpaid, and whether we should build more prisons, even whether to have sex, take drugs, and be honest. Racy stuff.

Buy it here from the ASI bookstore.

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Lets tackle gangs

Written by Dr Eamonn Butler | Saturday 24 May 2008

Britain's newspapers this week report that the government is going to take on gangs. Well, they had to say something: Home Secretary Jacqui Smith had to give a speech to the Police Federation, and since she's not going to honour their pay agreement, they were in a nasty mood. So getting tough on young thugs was something that might cheer them up and deflect a bit of flack. Who says policy is made for rational reasons.

Mind you, there are a number of slightly older gangs that the government could usefully tackle. Like the legal profession, for example, which succeeds in extorting vast amounts of cash from their clients, making it impossible for people to get real justice these days, unless they are very rich (or very poor and eligible for Legal Aid). By restricting the supply of lawyers, they can charge what they like. And the fact that the courts are a state monopoly doesn't help either. Sure, you can go to arbitration on contract disputes. But if someone owes you money, for example, you don't have much choice.

Doctors are another gang that should be tackled. Again, they decide how many people should qualify as doctors. So they don't go out of their way to pass too many. And again, the medical system is a state monopoly. People might not have to pay cash, but they certainly do pay in terms of reduced access, poor service, and lower recovery and survival rates than in many other advanced countries (and some non-advanced ones).

I could go on. There's the Health and Safety gang, which cancels village duck races and stops firemen from using ladders. And another shady group, known as the Quangocracy, which has all sorts of powers to regulate and fine people, without any democratic control. Not to mention the Westminster Gang itself, which is adept and robbing ordinary people in order to line the pockets of their own supporters.

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