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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

The problem with the Olympics

Written by Eben Wilson | Thursday 17 April 2008

While the proximate cause for the rising distaste for the Beijing Olympics is the way that China treats Tibet, I think there’s something else. My local market stallholder expressed it the other day as "all those Chinese in rows and ranks of uniforms – makes me shiver".

What he pictured was an old cliché of Maoist uniformity. I rather liked the “rows and ranks" which I think was expressed tautologically, but actually captured the sinister uniformity and hierarchical inequality of communist China rather well. Today, the cultural mores of post Mao capitalistic China are quite different, with the creative chaos of Western clothes and accessories prevalent. But he did bring back to me the scene when London’s 2012 Olympics were announced. The British delegation leapt in delight and hugged and wept, but what struck me then was the contrast of their individual abandon with their corporate uniformity. If my memory serves me right they were all uniformly dressed in formal business suits in a rather drab beige.

For me, this is the lurking cultural mistake behind the Olympics. Sports people suffer from some of the blind intensity of totalitarians. Sure, they celebrate excellence, but it is not a spontaneous excellence, rather a planned excellence that is generated by a rigorous collective effort. This deliberate construction of performance has strong echoes to the way it is achieved through the controlled statist methods of the communist regime. As such, it becomes culturally unreal, a freak show that ordinary mortals see through.

All over Britain teenagers – most between 15 and 20 - are being recruited into our Olympic effort for 2012. These half-formed athletes will be sponsored and trained up to excel on our behalf in the Stratford wasteland. What a contrast with the ideal of individual self-discovered excellence – spontaneous achievement by those who take part because they have found that they can excel. [Click read more to continue]

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Common Error No. 93

Written by Dr Madsen Pirie | Thursday 17 April 2008

93. "Some businesses deliberately build obsolescence into their products to force people to buy more when they wear out."

Some might economize on longevity where there's a demand for a cheaper product. If people want durability, they pay for it. If you recognize that fashions change and technology advances, you might opt for a cheaper product with a shorter life span. The pace of innovation is accelerating, and most customers seem to want the latest product. It depends on what you're buying.

There are products, such as houses, which people expect to last. Builders do not deliberately build houses which will fall down after a few years to force people to buy new ones. Instead they recognize that the market there is for durability.

For mobile phones and iPods, on the other hand, most customers would not want a product to last for decades. They prefer not to pay the extra costs of achieving this quality, and settle for one which will last them until they are ready to move on to a more up-to-date version.

There's a sort of urban myth that companies spend millions designing products that will fall apart or otherwise cease to function just three days after their warranty expires. This would cost extra, be difficult to achieve, and would probably result in customers buying a rival's product next time because the first one turned out to be no good.

More commonly there's a trade-off between durability and price; you can pay more for a product that will last longer, but you might not want to. Attics and garages are full of junk that people don't use any more. Waist high fax machines and desk top calculators are museum pieces now. Businesses don't deliberately equip their products with termination dates or auto-destruct mechanisms. They want them to last about as long as people expect them to. And for some of today's products, this is not very long.

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As Pope declares his Catholicism...

Written by Philip Salter | Thursday 17 April 2008

Michel Barnier, the French Agricultural Minister, has called upon Europe to increase protectionism in the face of rising food prices. On French radio he stated "We cannot and we must not leave food for people to the mercy of the rule of the market alone and to international speculation." Framed as a humanitarian gesture, it is nothing of the sort. The position is an attempt to upload France’s national policy to the European level, protecting their own uncompetitive farming industry in the face of increasing pressure as the biggest receiver of EU subsidies.

Concerns from many about the price of staple foods have long been on the agenda for a while. However, the argument used to be that the price of food was too low, and that this was having a negative impact upon farmers. Now it is being acknowledged that rising food prices are impacting upon the wider population in developing countries, with serious effects.

Barnier's solution is the wrong way out of the situation. In fact, it is a thinly veiled cover for what he perceives as France’s self-interest. He is wrong even about France’s own self-interest. The appalling impacts of protectionism (on consumers at home as well as on producers abroad) have been clearly acknowledged by any self-respecting economist.

Rising food prices are a real problem. However, looking towards the Europe Union for reasonable solutions is like consulting Robert Mugabe on improving the economy. The ludicrous goal of having 10 percent of transportation fuel made from biofuels by 2020 is still sadly in effect. This Brussels backed initiative is exacerbating the high food prices. The International Food Policy Research Institute in Washington suggests that biofuel production accounts for a quarter to a third of the recent increase in global commodity prices. It is about time the plug was pulled on this harmful policy.

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And another thing...

Written by Junksmith | Thursday 17 April 2008

Hillary Clinton attacked Barack Obama, called him 'elitist,' and said he was out of touch with poor people. Later, Bill Clinton gave a speech on the subject, and charged a million bucks for it.

Jay Leno

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Blog Review 569

Written by Netsmith | Wednesday 16 April 2008

Lord Forsyth appears to have been reading one of our pamphlets again. Yes, of course raising the personal allowance is better than reinstating the 10 p band of income tax.

New words being invented. "Lukewarmer" rather describes Netsmith's view of this climate change thing.

Interesting responses to questions about where the tax money goes. "The Sheriff's Office will not grant interviews to explain....because officials say discussing the program fuels criticism." Not really an answer to that, is there?

I'm sure it's not quite what he meant: but George Monbiot seems to be calling for an end to organic farming.

A brief review of "Sex, Science and Profits". It's going to cause some controversy, arguing as it does that scientific research isn't a public good.

Oh dear. Paul Krugman hoist on his statistical petard. When looking at unemployment and economic participation, you do have to adjust both for gender differences and retirees.

And finally, the banking crisis reaches Japan.


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Don't blame the adverts

Written by Tom Bowman | Wednesday 16 April 2008

The tabloid newspapers are greatly enjoying the story of Natasha Farnham: "Drunk at 12, liver failed at 14, now rehab at 18", as yesterday's Metro put it.

The young lady in question apparently began drinking at 12 and was drinking six bottles of wine a day by the age of 13 (well, at least she had some class). After a three-day bender aged 14, in which she consumed 16 bottles of wine, cider and spirits, she was diagnosed with liver failure. Now – to her credit – she is warning other children not to repeat her mistakes.

The most telling part of the story were the comments of Natasha's mother, Michelle, who said "irresponsible advertising" was to blame. Yes, that's right, her 13 year old daughter drank 6 bottles of wine a day (Did she notice? Did she care?), and it's all down to advertising!

The abdication of parental responsibility must surely be behind many of Britain's social ills. Yet in this, as in most other things, government is not the solution to the problem. Indeed, to a great extent, government is the problem. It is the long years of welfarism and the nanny state that have told people we depend on politicians, not on ourselves, for our wellbeing. It's a sorry state of affairs.

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Power lunch with Andrew Sentance

Written by Dr Eamonn Butler | Wednesday 16 April 2008

Dr Andrew Sentance clearly relishes the difficult jobs. By day, he's the Chief Economist of British Airways, which of course has been in the thick of it recently. And by night (well, the odd Wednesday at least), he's a member of the Bank of England's Monetary Policy Committee (MPC), in charge of setting interest rates. He came along yesterday to share his thoughts at a Power Lunch here at the Adam Smith Institute.

As usual, the lunch was off the record, though I can reveal that the economists around the table disagreed on pretty much everything, as of course you would expect. But they did seem to agree that the MPC is sailing through relatively uncharted waters. Global forces point as much to inflation as they do to downturn. The financial sector is in crisis but other parts of the economy still seem robust.

Still, after some years of over-easy credit, particularly in the United States, and government profligacy, particularly in the United Kingdom, I reckon it would be daft not to expect some 'adjustment' as economists call it. The interesting question is whether the MPC can manage things so that everyone gets back to normal without going into a blind panic because the value of their home is falling while their mortgage costs are going up. At least the banks are using the MPC's interest rate cuts to strengthen themselves a bit, so while that's no short-term succour to borrowers (or Gordon Brown) in the long run it at least makes further banking panics less likely.

Trouble is, the government share of the economy has been growing fast, while it's the rest of us who have to take the strain of all the past policy mistakes and the current policy prescriptions. Mind you, Andrew and friends wouldn't want life to be easy, would they?

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Last chance to stop the EU Constitution

Written by Blog Administrator | Wednesday 16 April 2008

Our friend Stuart Wheeler sends us the following message, which may be of interest to readers of this blog:

My Legal Case to Force a Referendum on the Lisbon Treaty 

I believe that there is an overwhelming moral case for a referendum on whether the UK should ratify the Lisbon Treaty because:

  • The Labour Party, as well as all major parties, promised a referendum and they should keep that promise.
  • The contents of the Treaty change our constitution so fundamentally that, irrespective of whether one is for or against ratification, one should be allowed a vote.

Fortunately there is a legal, as well as a moral, basis for demanding a referendum and I have instituted proceedings against the Prime Minister and the Foreign Secretary, in which I seek a judicial review and a declaration that the refusal to hold a referendum is unlawful. The case goes to the High Court on 22 April for a crucial preliminary hearing in open court.

The Liberal Democrats, who were instructed by their leader to abstain in the House of Commons on the question of a referendum, are to be instructed in the House of Lords to vote with the Government against a referendum. This will make it very hard, though not impossible, for an amendment in favour of a referendum to be carried.

The only other chance of a referendum in the UK is in my case. It will not be easy to win it but, if I do, and if the referendum is then won by those who oppose ratification, we may well have saved for our country its right to govern itself. We shall also have changed the course of European history because the Treaty cannot come into force unless every one of the 27 members of the European Union ratifies it.

I have a website about the case - - and it will be updated as necessary.

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How wealth is created

Written by Dr Madsen Pirie | Wednesday 16 April 2008

Unless you realize how wealth is created, you’ll fret about how to distribute it more equally, thinking the only way the poor can become richer is by receiving some of the wealth the rich have. Wealth is not created by industrialization, though it can be helped by this. It is created by specialization and trade. At the GI blog Tim Worstall draws attention to the wealthy trading towns of the Roman period. He cites the discussion on Marginal Revolution about the drop in living standards between Roman times and the 18th Century. The reason is the cutback over the intervening years in specialization and trade. It’s a timely reminder that while the application of potent energy sources to mass production assists this process, wealth was being created in the ancient world long before water and steam mills proliferated. It reinforces our determination to increase the wealth of poorer peoples by making it easier for them to specialize and to trade.

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And another thing...

Written by Junksmith | Wednesday 16 April 2008

Lyric from a popular new song called "Place In My Heart" by David Jordan:

"I step out of my element
To see what's going on in my neighbourhood
A message from the government
Gonna spend all your money cause it makes them feel good"

He's just released his debut album and he reminds some people of a young Michael Jackson...

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