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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

Quote of the day

Written by Wordsmith | Monday 10 March 2008

Everything government touches turns to crap.

Ringo Starr

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Blog Review 531

Written by Netsmith | Sunday 09 March 2008

An interesting idea for making schools better: increasing the number of children in a class.

An extraordinarily bad idea about schools from California: 


A primary purpose of the educational system is to train school children in good citizenship, patriotism and loyalty to the state.

Meaning that there is no constitutional right to home schooling.

The London Development Agency seems to be about everything (indeed anything) except economic development.

The secret of real development is now known: The Age of Friedman has been good to the world.

Just how badly has Cuba done over the decades?

And just what are the "right safeguards " on the information the government keeps on us?

And finally, an accurate definition of "politics".

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Know no economics

Written by Tim Worstall | Sunday 09 March 2008

We love the new economics foundation around here. No, really, we do, how can you not take to your heart those suffering from the Great Capitals Shortage of the Noughties? Further, how can you not have affection for those who, while attempting to believe in "economics as if people and the planet matter" find it so difficult to get the most basic grasp on the subject?

Andrew Simms, one of the nef's wonks, has a piece over at CiF arguing that the UK should have something like Norway's Oil Fund. Instead of spending the revenues from North Sea oil on the concerns of the present, as we do through the Treasury, he suggests it should be an investment fund. The money saved and used for the future sort of thing. That part is at least arguably a good idea or a bad one, although I don't see the current crew of drunken spendthrifts being all that keen on allowing a cashflow to escape their clutches.

However, where the idea rather falls over is in what he wants the fund to spend the money upon:


An Oil Legacy Fund could for example, be used to invest in a fund for
innovation; development and the promotion of micro, small and
medium-scale renewable energy technologies; help for local planning
authorities with the complexities of managing new, decentralised
renewable energy services and technologies; expanding the use of school
buses to tackle both congestion and energy-inefficient private-vehicle
use on the school run; lowering the age for free public transport, and
allowing adults with children to go free on public transport, making
household-energy-monitoring devices available in order to increase
awareness of current energy use and to make people aware of
opportunities to improve; tackling fuel poverty, and much, much more.

That last is especially note worthy: we should subsidise those we have driven into poverty by the taxation we impose upon them. But much more important than that, Simms has missed the vital point about the Norwegian fund (and indeed, others around the world, like all those soveriegn wealth funds): they don't invest at home.

The fund invests all its money abroad to avoid stoking the
economy...

Somewhat sad, isn't it? Vaulting ambition brought back down to earth by a trivial point. The major point of such tax funds is to isolate the natural resource revenue from the domestic economy so as to avoid the pitfalls of the Dutch Disease. It's this sort of thing that makes the nef such a favourite with us: rather like a particularly cross-eyed kitten really. Ineffably cute and when they launch themselves off into the void their vision makes it impossible for them to land upon the intended target. Yes, cute, but also very funny.

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Common Error No. 56

Written by Dr Madsen Pirie | Sunday 09 March 2008

56. "Maximum working hours are needed to protect workers' health and fitness."

It surprises many to learn that health and fitness go with wealth; the more money you have, the more you are likely to be fit and well. By limiting working hours we are denying people in the lower economic strata the chance to improve their lot by working more.

In the lower economic bands people are paid by the hour and earn more by working more. It is not as true of many middle class jobs, where people can be required to work late without consequential increases in salary. A working hours limit is not what it seems, either. It rarely puts a limit on the actual hours worked; more commonly it requires that all hours worked beyond a set level shall be paid at overtime rates. This, in turn, can make employers less ready to offer those extra hours, since they can cost too much.

The result of a maximum working hours limit is to restrict the income that people can earn, which matters most to those lower down the economic scale. Of course, most people will choose to achieve a sensible work/life balance, allowing appropriate time for rest, leisure activities, and family life. It should be their choice where possible, however, because they know their own circumstances and priorities more than outsiders can. Employers, too, have an interest in ensuring that the hours worked do not undermine the safety and efficiency of their employees.

A working hours limit increases the costs of business and the price of its goods and services. It can mean that extra staff are required, which involves the extra administrative costs and benefits required for each extra employee. And it can require a trade off between extra job opportunities and lower productivity, resulting in less successful and even less viable businesses.

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The sad truth about 24-hour drinking...

Written by Tom Clougherty | Sunday 09 March 2008

... Is that is doesn't exist. That was Mick Hume's take in Friday's Times, and I think he gets it about right:


If there is indeed a problem with our late-night drinking laws, it is that many of us, on the rare occasion we get out, still cannot enjoy a pint after midnight at the weekend. That's what I call antisocial.

He cites the government's official review, which showed that the introduction of '24-hour drinking' two years ago has extended average Saturday opening times by just 21 minutes. Certainly this chimes with my experience: for all the tabloid furore about the liberalization of the licensing laws, I am constantly frustrated by how hard it is to find a late-opening pub or bar, even in central London.

Indeed, for many pub landlords this 'liberalization' has been nothing of the sort. Licensing was pretty simple in the old days – you just turned up at the Magistrates court every so often to renew your alcohol license. The process was cheap and easy. But now councils employ full-time staff to oversee the new licensing laws. And bureaucrats inevitably make trouble, insisting on endless inspections and paperwork.

Add this to the smoking ban, and is it any wonder that 1,409 pubs closed down in 2007 (compared with just 102 in 2005)? If only the government would just leave us alone...

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Quote of the day

Written by Wordsmith | Sunday 09 March 2008

A little government and a little luck are necessary in life, but only a fool trusts either of them.

P.J. O'Rourke

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Blog Review 530

Written by Netsmith | Saturday 08 March 2008

It would appear that it will be the Lords, rather than the Prime Minister, who will decide the date of the next General Election.

Inside the bureaucracy. Not a pretty sight.

This is seriously disgusting. What's the point of having an asylum system at all if someone who seriously needs asylum can't get it? 

Another way of disproving the labour theory of value: production which is value subtracting.

Doing serious economics on a blog. This one made Netsmith's brain hurt: perhaps you can do better. 

If baseball were subject to the political rhetoric that trade is. 

And finally, Hillary and Barack negotiate over who should take the VP slot. 

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The Waste of Nations

Written by Tom Clougherty | Saturday 08 March 2008

waste_of_nations_cover.jpg
The ASI's latest publication, The Waste of Nations by Gordon Hector (reported here in the Daily Telegraph), calls for the introduction of pay-as-you-throw (PAYT) waste charges as the best way to encourage less waste and more recycling. Research from the US suggests a move to PAYT would reduce landfill by 16-17 percent, increase recycling by 50 percent, and lead to a source reduction in waste of around 16 percent. That would reduce the need for unpopular landfill sites and incinerators and could prompt emissions savings of millions of tonnes a year.

Importantly, the report stresses that PAYT must not be used as a 'bin tax' and that its introduction must be accompanied by a corresponding fall in council tax. Evidence from Holland, Ireland and Germany suggests that PAYT would not increase household bills – rather, it would offer an opportunity to reduce them.

The report also calls for the full liberalization of the refuse collection sector, so that private companies would have to compete for customers. Such a move would keep prices down and increase customer satisfaction. It would also lead to innovation and encourage refuse collectors to recycle more waste.

The final section of the report argues that recycling should be put on a commercial footing. Recycling facilities and providers should be allowed to merge and consolidate, and the free movement and trade of recyclables should be established. This would allow economies of scale to be established, bringing down the cost of recycling and recycled goods, and ensuring a market for commercially viable businesses in the long run.

In recent days, the government has pulled back from its earlier plans to hold widespread trials of PAYT. But the reason the government's proposals for variable waste charging have run into widespread opposition is that they are half-baked and ill thought out, relying on 'punishing' people who don't recycle. The proposals outlined in The Waste of Nations are very different: liberalizing refuse collection and introducing pay-as-you-throw charging would dramatically increase recycling and help the environment, but it would also be an opportunity to reduce taxes, save money, and increase the quality of a vital service.

Download the PDF here.

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Common Error No. 55

Written by Dr Madsen Pirie | Saturday 08 March 2008

55. "When people are accused of serious crimes, they should have no right to remain silent."

The reason why people were allowed to remain silent was that one of the law's principles maintained that no person could be forced to testify against themselves. It is a defendant's choice whether to go into the witness box and face cross-examination; they cannot be forced to. The right to silence is part of that principle, and no jury was allowed to count it against an accused if that right were exercised.

The principle is a serious disincentive to torture. If people cannot be forced to make statements or to give evidence, the authorities have much less reason to use torture to make them incriminate themselves. The police in many countries, including ones where torture is banned, have used bullying, intimidating techniques, and what amounts to psychological warfare to secure 'confessions' of dubious value – people will do anything to stop the oppression. The right to silence was an important part of protection against that kind of treatment. If people cannot be required to testify against themselves, it throws suspicion on 'confessions' which might have been extracted under duress.

This right to silence has now been modified to allow prosecutors to invite juries to draw inferences about it. In other words, if people choose to remain silent, it may count against them in court. It crucially modifies the presumption of innocence which has been a cornerstone of justice. By remaining silent, an accused could demand that the prosecution must prove their guilt. Now a jury might be asked to hold it against an accused that they did not choose to prove their innocence.

It also increases police powers to subject innocent people to questioning. Even if they have done nothing, a refusal to answer police questions might subsequently be used against them in some future charge laid against them.

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The future of food

Written by Dr Eamonn Butler | Saturday 08 March 2008

wheatcrops.jpg
There's been a lot written recently about the world's growing demand for food and the issue of food security. Magnus Linklater wrote about it in the Times last week, and of course Michael Jack MP raised the same subject at our Power Lunch a couple of weeks ago.

Now the new Chief Scientific Adviser to the government, Professor John Beddington, has got in on the act, saying that the middle class are responsible for damaging the planet because they consume more energy-inefficient food such as cheese and meat.

Gimme a break. Where does the government dredge up these platitudinous advisers? My colleague Dr Madsen Pirie has already exploded the 'energy intensive food' argument in his book Freedom 101. Put simply, livestock can be raised on land that's no good for arable crops – look at all that mutton and venison wandering Scottish hillsides that would never sustain even a blade of wheat or barley – so meat and cheese doesn't somehow displace 'energy efficient' crops.

And don't try to make me feel guilty, either. It's not the Western middle classes that are raising the demand for food, it's all the billions in emerging economies who are at last edging out of absolute poverty and starting to consume more food – a point that Michael Jack made to us.

And good luck to those emerging food consumers, I say. I'd like to see them all better fed, even though it does certainly mean that food prices for the rest of us will go up – until, of course, we overcome our enviro-mental block against GM and start using it to increase yields, at least.

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