Blog Review 905

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Yes, there are arguments for subsidising the production of public goods. But remember, education isn't a public good, even if it is publicly provided.

Most shocking: Ken Livingstone is actually correct on a matter more important than whether newts are cute.

The BBC definitely seems to be holding the law in contempt.

Why new regulation when the market itself just isn't going to make that mistake again?

As a little changes, some reasons for optimism.

Bankers aren't the only people getting rewards for failure you know....

And finally, meet Obama's teleprompter.

Free to sell, free to buy

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The Department for Culture, Media and Sport is currently undertaking a consultation on Ticketing and Ticket Touting. On their webpage the Department states, "The Government... does not favour legislation to prevent secondary sales.  But new laws cannot be ruled out if voluntary measures do not succeed and conditions for consumers do not improve. The consultation urges ticketing companies to tighten up sales of tickets if they want to prevent them being resold. "

However, polling by ICM for eBay has revealed that 86% of people think that they should be allowed to resell their own tickets if they can no longer attend the event. 83% of the public also show an understanding of property rights, agreeing with the idea that the ticket is theirs to sell on. 80% of people also believe that reselling tickets should not be against the law if they can no longer use it. And further evidence shows that 85% agree that the organizer, not the government, should ensure that tickets don't end up with touts. Over two thirds of people can also tell the difference between an individual selling their ticket and a tout, unlike the government and some event organizers who lump everyone together.

It is clear from this data that there is little need for the government to act. The event organizers need to implement a system that controls ticket sales so that the so called 'touts' aren't the ones purchasing tickets directly so that they may resell them on after events have sold out. One problem area highlighted by the polling data was that of the 13% who attempted to get a refund when they had unused tickets, only 42% were successful. If organizers were more willing to refund tickets then this would cut into the potential profits that touts could make and also offering a more secure environment for purchasing tickets. The answers to the problem of professional touts are straightforward and event organizers shouldn't be relying on/pressuring government to implement legislation that criminalises all merely to ensure their own profits on what is currently a bad business model.

One small step for Brown, one giant waste of time for the rest of us

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In the midst of a complicated recession, Gordon Brown proposed a small solution to improve the status of public service in the UK. Brown wants to integrate user reviews into the NHS system: “He proffered a vision in which patients choosing a family doctor or parents looking for child care could benefit from the same kinds of reviews and ratings that are now available for books and other products on internet sites like Amazon."

Gordon Brown wants the public focusing not on why they are jobless, but on a public complaint forum where citizens review NHS professionals, centres, and hospitals. The problem with this plan is that people simply do not have enough choice of where they can be treated in the first place. These reviews will simply bring people together to complain about the problems they face at NHS clinics. Why have information without choice? It is like living as a prisoner on bread & water exclusively, but if one day the warden decided to display menus for some fabulous restaurants in the mess hall. You can look all you want at restaurant menus and reviews, but meanwhile you know what’s going to be on your plate when you sit down to eat.

Migration tax planned

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News of yet more taxes seems to be a drop in the ocean these days, with few batting an eyelid. A tax of £50 for a UK work visa (£20 for students) may seem an insignificant amount, but it’s still a tax increase and it’s still a bad idea.
 
The issue of migrant work is clearly a contentious one when so many British workers are becoming unemployed, but in order to ensure the prosperity of Britain we cannot afford to forget the long-term. We cannot allow the government to drag us out of current difficulties at the expense of much greater, long-term, goals.
 
The labour market has been allowed to stagnate. A wave of regulation and taxation such as the National Minimum Wage and national insurance contributions have made the UK workforce uncompetitive internationally and has reduced competition internally. Hardworking migrants are an asset to our society, boosting economic productivity. We only attract unproductive migrants because of the welfare state the government has created. There is no utilitarian benefit in protecting unproductive British workers when there are others willing and able to do the same jobs from abroad – instead we should be incentivizing productivity to make our labour market more productive – a recession should be acting as a wake up call to our inefficient industries.
 
The introduction of such a tax may be a nifty vote-winner for the government, but it will be damaging in the long run. The fact cannot be ignored that migrant labour plays a large role in our economy. If we earn a reputation as isolationists, there will no doubt be some reactionary policies abroad. These would have major negative impacts on many of our geriatric industries.
 
The motive for this levy is to ‘raise £70 million over two years to help pay for public services’. Surely a simpler solution would be to reduce spending on public services by £70million?

Or as Alice Thomson points out, in The Times to pay for the work shy: Two nations: those who work, those who won't

Blog Review 904

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No, we really don't want children to learn poetry. We want them to enjoy it instead.

The reason no one spoke out about the Staffordshire Hospital is because the person who did was accused of being mad.

Against the stimulus. It simply takes a long time to spend a lot of money.

And it's not as if there aren't problems with economic statistics.

On bananananas and deflation.

Regulation doesn't always achieve its aim, for people will offset their behaviour.

And finally, something is wrong when lawyers are more highly paid than bankers.

Sign the Freedom to Trade Petition

Free Trade Is the Best Policy

The specter of protectionism is rising. It is always a dangerous and foolish policy, but it is especially dangerous at a time of economic crisis, when it threatens to damage the world economy. Protectionism’s peculiar premise is that national prosperity is increased when government grants monopoly power to domestic producers. As centuries of economic reasoning, historical experience, and empirical studies have repeatedly shown, that premise is dead wrong. Protectionism creates poverty, not prosperity. Protectionism doesn’t even “protect" domestic jobs or industries; it destroys them, by harming export industries and industries that rely on imports to make their goods. Raising the local prices of steel by “protecting" local steel companies just raises the cost of producing cars and the many other goods made with steel. Protectionism is a fool’s game.

But the fact that protectionism destroys wealth is not its worst consequence. Protectionism destroys peace. That is justification enough for all people of good will, all friends of civilization, to speak out loudly and forcefully against economic nationalism, an ideology of conflict, based on ignorance and carried into practice by protectionism.

Two hundred and fifty years ago, Montesquieu observed that “Peace is the natural effect of trade. Two nations who differ with each other become reciprocally dependent; for if one has an interest in buying, the other has an interest in selling; and thus their union is founded on their mutual necessities."

Trade’s most valuable product is peace. Trade promotes peace, in part, by uniting different peoples in a common culture of commerce – a daily process of learning others’ languages, social norms, laws, expectations, wants, and talents.

Trade promotes peace by encouraging people to build bonds of mutually beneficial cooperation. Just as trade unites the economic interests of Paris and Lyon, of Boston and Seattle, of Calcutta and Mumbai, trade also unites the economic interests of Paris and Portland, of Boston and Berlin, of Calcutta and Copenhagen – of the peoples of all nations who trade with other.

A great deal of rigorous empirical research supports the proposition that trade promotes peace.

Perhaps the most tragic example of what happens when that insight is ignored is World War II.

International trade collapsed by 70 percent between 1929 and 1932, in no small part because of America’s 1930 Smoot-Hawley tariff and the retaliatory tariffs of other nations. Economist Martin Wolf notes that “this collapse in trade was a huge spur to the search for autarky and Lebensraum, most of all for Germany and Japan."

The most ghastly and deadly wars in human history soon followed.

By reducing war, trade saves lives.

Trade saves lives also by increasing prosperity and extending it to more and more people. The evidence that freer trade promotes prosperity is simply overwhelming. Prosperity enables ordinary men and women to lead longer and healthier lives.

And with longer, healthier lives lived more peacefully, people integrated into the global economy have more time to enjoy the vast array of cultural experiences brought to them by free trade. Culture is enriched by contributions from around the world, made possible by free trade in goods and in ideas.

Without a doubt, free trade increases material prosperity. But its greatest gift is not easily measured with money. That greatest gift is lives that are freer, fuller, and far less likely to be scalded or destroyed by the atrocities of war.

Accordingly, we the undersigned join together in a plea to the governments of all nations to resist the calls of the short-sighted and the greedy to raise higher the barriers to trade. In addition, we call on them to tear down current protectionist barriers to free trade. To each government, we say: let your citizens enjoy not only the fruits of your own fields, factories, and genius, but also those of the entire globe. The rewards will be greater prosperity, richer lives, and enjoyment of the blessings of peace.

CLICK HERE to endorse this petition and add your support.

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The specter of protectionism is rising. It is always a dangerous and foolish policy, but it is especially dangerous at a time of economic crisis, when it threatens to damage the world economy. Protectionism's peculiar premise is that national prosperity is increased when government grants monopoly power to domestic producers. As centuries of economic reasoning, historical experience, and empirical studies have repeatedly shown, that premise is dead wrong. Protectionism creates poverty, not prosperity. Protectionism doesn't even "protect" domestic jobs or industries; it destroys them, by harming export industries and industries that rely on imports to make their goods. Raising the local prices of steel by "protecting" local steel companies just raises the cost of producing cars and the many other goods made with steel. Protectionism is a fool's game...

So begins the 'Freedom to Trade Petition', a joint initiative of the International Policy Network, the Atlas Foundation and its Global Initiative for Free Trade, Peace and Prosperity. The Adam Smith Institute has already signed up, and I strongly encourage all of you to do the same. You can add your names to the petition here. Click 'read more' to read the petition in full.

Kevin Dowd on free banking

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A couple of days ago, we recommended that readers of this blog should attend the Libertarian Alliance's Chris R. Tame Memorial Lecture, at which Professor Kevin Dowd spoke about 'Lessons from the Financial Crisis: A Libertarian Perspective'. In case you missed it, the video is now available online via the LA's blog. If you haven't got time to watch the whole thing, Samizdata's Jonathan Pearce has an excellent write-up here.

Sick man of the world?

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According to the IMF's latest forecasts, the recession will last longer in Britain than in any other major economy. They are predicting a 3.8 percent contraction this year, and another 0.2 percent contraction in 2010 – by which time every other major economic area will be growing again, apparently.

So much for Gordon Brown's claim that Britain is best placed to weather the downturn, and Alistair Darling's assertion (on which his pre-budget report figures were based) that the UK's recovery would begin in the third quarter of 2009. Oops.

So what are the implications of the IMF's findings?

First of all, the UK's tax revenues will be weaker than expected, while social spending will be higher (as more businesses close and more people lose their jobs). That means the government is going to borrow even more than it plans, and that Britain's mountain of debt will get even bigger. And with a general election coming up, it's hard to believe that the government won't pursue more bailouts and deficit-financed 'stimulus' packages, so there's really no limit to how bad the public finances could get.

Consequently whoever wins the next election is – to put it bluntly – going to have one hell of a mess to clear up, and will probably have very little choice about the policy agenda they pursue. The words 'structural adjustment' spring to mind.

Another implication is that the government's measures to fix the economy are not working. No surprise there. Their policy prescriptions – which basically amount to just throwing vast sums of money at every problem – would be ineffective at the best of times. Unfortunately, however, the government's modus operandi makes things even worse. By reacting to every headline with a new, half-baked initiative, which may or may not be implemented, politicians create an atmosphere of uncertainty and further undermine confidence.

It's precisely the opposite of what they should be doing.

Best placed

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Where’s the best place to do business in the United States? Texas. So say America’s CEOs, who get to see the effects of state legislation first-hand.

An annual survey from Chief Executive Magazine, entitled The Best and Worst States, asked over 500 CEOs to grade the states. Grades were based on, "proximity to resources, regulation, tax policies, education, quality of living and infrastructure". Providing additional insight to the evaluations, CEOs were also asked to grade each state based on the following criteria: 1) Taxation & Regulation, 2) Workforce Quality, and 3) Living Environment."

JP Donlon, Editor-in-Chief said, "Our survey, year-over-year proves that those states with the worst records continue to practice the same policies that alienate businesses. As the nation’s economic problems continue to snowball and an increasing number of states experience budgetary problems, state governments ought to take a hard look at their taxation and unionization policies if they want to turn the page and attract new businesses and capital to their provinces." As the article further states the GSP (Gross State Product) of Texas grew by 4.2% compared to 1.9% for the national economy.

This survey is a shining example of how the Union works with states competing against each other for business and how those with a lighter touch of taxation and regulation can be successful. One can only hope that the leaders of Michigan, New York and California read this, and rather than coming up with new taxes (as seen recently in New York), conjure up new ways of slashing their way through red tape and lowering their taxes.

While the financial sector, auto manufacturers and others are handed other peoples’ money in receipt of bailout funds, there are many out there who are just asking for an environment that is conducive to undertaking business. Sadly that plea is likely to fall on deaf ears. Politicians are just too busy pandering to the corporate failures holding out their begging bowls to do anything sensible.

Click here to see the survey's results in full.