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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

A barrelful of rotten apples

Written by Dr Eamonn Butler | Monday 14 January 2008

hain.jpgIf your best mates clubbed together and gave you £103,000 when you needed it, you'd remember it, wouldn't you? Remarkable, then, that UK Work and Pensions Secretary Peter Hain didn't. He's accused of not registering seventeen donations towards his campaign for the Deputy Leadership of the Labour Party, totaling this amount. His forgetfulness is all the more astonishing when you consider that his campaign far outspent those of his rivals. So this was a large wodge of cash that public standards watchdogs weren't told about. Even Tony Blair, with his £500,000 salary from J P Morgan, his book deals and the rest couldn't simply miss £103,000.

Until Peter Hain went into Parliament, I always though him honourable. I opposed many of his views - and his abrasive ways of promoting them - but you can disagree with people and still think them principled. Politics of course forces people to compromise on their principles, so I've less respect for party politicians - but that's still no reason to accuse them of being crooked.

No, what's going on here is more subtle, and even more worrying. It's not that Peter Hain is a single rotten apple that can be ejected from the barrel and all will be well. No, they're all at it. Millionaire supporters funnel funds to the Labour Party through third parties who don't even know about it: half of Peter Hain's missing thousands is routed through some supposed think-tank; donors are attracted by the suggestion, however faint, that there might be a peerage in the pipeline.

What's wrong is that people in politics, both politicians and perhaps even more so their staff, think that they are above the rules. That their mission is more important than some tedious bit of book-keeping. That they can shuffle large sums around and nobody will notice. That how they raise and spend their cash is of little concern to the public.

Unfortunately, we live in an age of transparency, where every move that political folk make can come under the media spotlight. It means they have to be completely straight in how they conduct their business. The legislation to clean up party funding has been in place since 2000. It's truly alarming that so many politicians think it shouldn't apply to them.

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Blog Review 475

Written by Netsmith | Sunday 13 January 2008

Defending Peter Hain (we know, not the most likely of activities). What business is it of the State or the criminal law how a private organisation chooses its leaders, or how that process is funded?

Similarly, what business is it of the State or a Human Rights Commission what a magazine publishes (subject to libel and incitement to violence)? 

This also seems to be something of an intrusion into areas that should remain private, part of family life. 

A very clever piece of economics: and from politicians to boot. 

Normal service is resumed: a very stupid piece of economics from a bureaucrat. Another from a politician.

Celebrating the little guy: a selection of posts from lesser known blogs, the best of 2007. 

And finally, something you might care to support and more on the law of holes. When in one, stop digging, but if you don't, where will you end up? 

 

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Pass the cream...

Written by Dr Eamonn Butler | Sunday 13 January 2008

tonyblair.jpgIt's heartening to know that I'm not the only one sickened by the news that Britain's ex-Prime Minister Tony Blair has been snapped up by J P Morgan Chase on a salary of £500,000. For that, he's not even expected to pass his banking exams, merely advise them on the economic impact of globalization (something they'd be better just Googling) and introducing them to potential clients.

When the Blairs bought a £3.4m house, all the press wondered how they would pay the mortgage. Now we know. Even with tax rates of 40 percent, they could pay it all off in half the time it takes most people, and still have enough to live at twice the standards of most people.

I neither grudge nor envy Blair's money, and I'm sure that he's actually worth that to the bank. All he has to do is get some billionaire friend to sign up (and from his years of free holidays in the grand holiday homes of the rich and famous, he knows plenty of them) and he's earned his keep. What revolts me is the hypocrisy of it all. Politicians tell us how above it all they are, and then as soon as they leave office they get jobs with the industries that they were supposed to be regulating in a detached manner just a few months ago. There are rules to stop the most outrageous breaches, but if moving straight from being First Lord of the Treasury to being director of a bank isn't colourable, I don't know what is.

And I need hardly mention that Blair was a Labour prime minister. Aren't they supposed to believe in fairness and equality? Don't they tell us that the fatcats are appalling? Well, yes, they do. Until the cream jug comes round.

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Joke of the day

Written by Jokesmith | Sunday 13 January 2008

A redneck was learning to sky dive. The instructor told him to jump out of the plane and pull his rip cord. The instructor then explained that he himself would jump out right behind him so that they would then go down together. The redneck understood and was ready.

As the redneck was in the plane waiting to jump the instructor reminded him that he'd right behind him and everything would be fine. The redneck proceeded to jump from the plane and after being in the air for a few seconds pulled the rip cord. The instructor followed, and after a few seconds pulled his rip cord but the parachute did not open. The instructor, hurtled past the redneck. frantically trying to get his parachute open,

The redneck, upon seeing this, undid the straps to his own parachute and yelled, "So you wanna race, eh?"

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Cigarettes or Snus? They decide...

Written by Philip Salter | Sunday 13 January 2008

snus.jpgRichard Tomkins article in last weekend's Financial Times makes explicit that the various assaults on the act of smoking have not stopped people from lighting up. The article goes on to map out the various problems facing policy makers in trying to obstruct people from smoking.

The problem with the article is that it falls into the trap as many others on this issue. It follows the illogic of the public health agenda in assuming that the government is best placed to determine whether an individual should decide to smoke. This thinking echoes the Communist paradigm of false consciousness, in its belief that the people are blind to the "truth" and must therefore have their lives decided for them. Whereas, in the real world people smoke for a plethora of personal reasons and should be allowed to continue without a government led financial and moral tirade. Personally, I smoke to relax each month upon learning how much tax the government is taking; then once more to cope with the level I‘m taxed on my cigarettes.

In the same article, attention is also drawn to the potential of Snus, a moist powder tobacco product that is consumed by placing it under the upper lip for extended periods of time. It has been shown conclusively to be a healthier intake of nicotine than cigarettes. So, will the market offer consumers the choice of a healthier nicotine intake, if they so wish? Alas, no. The reason being that it is banned by European Law in an attempt to stop people smoking. Once again, the individual is being refused his or her right to choose how to live, healthy or unhealthy.

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Reverting to type?

Written by Steve Bettison | Sunday 13 January 2008

sarkozy.jpgIt's not taken long for President Sarkozy to resort to the age old practice of taxing the hardworking of France. His latest initiative, part of his "policy of civilisation", is to tax the revenues of the private broadcasting channels' advertising streams as well as revenues generated by internet access and mobile phone technology. This would allow the two public broadcasting channels to rid themselves of advertising and also free up the £598 million they previously earned in this way.

Frankly, it is about time all politicians set free "public broadcasting" and let it pay for itself. For it to be truly free and publicly owned it should take on the form of a non-profit organization funded by the donations of the watching public. Its funding revenues could be sourced in a similar vein to that thin slice of money raised from telethons or pledge drives that the American PBS channel utilises as a top up to its own government funding. Or, as the earnings of the French channels show, they could take advertising to pay for themselves. Whether a channel has advertising or not is increasingly irrelevant in the modern times of choice. It's the content that counts. And channels that provide poor content only have themselves to blame when the viewers switch over.

Mr Sarkozy is merely attempting to dress up a tax hike on the whole of France. It should be economically obvious that the tax rises, "no matter how infinitesimal", are passed down the financial chain to the consumers through higher charges. It may seem to the French President that he only taxing that most hated of entities in France, the private company, but in reality he is taxing the man on street. Could it be that Mr Sarkozy is the same as every other French President? Both publicly and privately...

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Blog Review 474

Written by Netsmith | Saturday 12 January 2008

Yes, this idea of extra education vouchers for disadvantaged pupils sounds sensible. But shouldn't we simply have vouchers for all pupils as well?

It might actually be true that the gender gap is caused by capitalism. Richer countries show greater sex differences in personality traits than poor ones. And we all know that only capitalism creates wealth... 

So just what is the appropriate amount of outsourcing to do, the right amount of insourcing? Ronald Coase had the answer and here's a good precis for those who don't want to read the original. 

Wondrous! Passing a law that insists that business must do what another law makes it illegal for them to do. 

Absolutely so! Adam Smith's writings and suggestions were a great deal more subtle than the cardboard cutout presented by his detractors.

At present this is still a little uncertain but...it looks like ID cards will be a European Union competence, not a Westminster one (ie, they decide whether we get them, not us). 

And finally, how The Guardian Leader columns are written and Wikipedia's lamest edit wars.  

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Common Error No. 7

Written by Dr Madsen Pirie | Saturday 12 January 2008

7. "True socialism has never been tried."

Neither has 'true' capitalism. If it was capitalism that has been tried in capitalist countries, then it was socialism that was tried in socialist ones. We compare like with like. Either we talk about the record of both capitalism and socialism in the real world, with all its compromises and imperfections, or we talk about some theoretical ideal of what each might be, if only the world and the people in it were different.

Too often would-be socialists want to compare capitalism in practice with some idea they have of what a socialist utopia might be like. The truth is that socialism was tried in many countries in different forms and had a deplorable record in all of them. It was characterized by suffering, shortages and the suppression of human freedom. In most cases it was accompanied by mass murder.

This is no accident of a revolution betrayed, but an inherent flaw in the idea itself. It seeks to make men and women into something they are not and do not want to be. It seeks to make them conform to the socialist's vision of what he or she thinks they ought to be. Since real men and women are self-motivated and have their own desires and preferences, in a socialist state they must be forced to behave differently. Compulsion is thus at the very core of socialism.

Capitalism, with its free markets and free choices has, for all its warts, proved more successful, more efficient and more humane. It delivers the goods far better than do socialist economies, and it manages to do so while allowing a far greater range of freedoms. It goes with political freedoms, free media and freedom of association, employment and travel, all of which are denied in socialist countries.

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Joke of the day

Written by Jokesmith | Saturday 12 January 2008

A man joined a dating agency and went out on plenty of dates all of which didn't work out.

He went back to the woman who ran the agency and said: "How you got someone on your books who doesn't care what I look like or what job I have and has a nice, big pair of breasts?"

The woman checked on her computer and said: "Actually, we do have one, but unfortunately its you."

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Leave the touts alone

Written by Steve Bettison | Saturday 12 January 2008

touts.jpgNever depend on common sense from politicians; it's not their strength. But in rejecting the idea of a ban on secondary online ticket sales by both touts and bona fide organizations the Culture, Media and Sports Select Committee has come close to showing something akin to sense. While their criticism of the rogue elements of the ticket touting world is justifiable, they are right to ignore those calling for a levy on secondary ticket sales.

The entertainment industry should provide solutions to the problems of its own creation and desist in seeking government intervention. In attempting to squeeze more cash out of the punters through a further levy they are merely trying to keep their up-front ticket prices artificially low.

Within each segment of the entertainment industry, from sport to music, through to such things as opera, ballet and musicals, each has its own individual economy; yet touts appear regardless. The touts may have purchased tickets and be looking to sell for a profit, perhaps cashing in on sold out shows and the increased demand upon a scarce resource or they may be selling on the tickets of those who couldn't attend. Either way all the tickets have been legally purchased from the seller, so the seller should have maximised their profit from the event, in which case what happens to the ticket after that point is irrelevant.

The under-pricing of tickets creates an unnatural scarcity which is reflected in the prices paid to ticket touts. We should leave the touts alone, and start suggesting that the producers and entertainers charge the real market value of their product. They will know when they've succeeded in this – the touts will only ever be able to garner face value prices for the tickets in their hands.

And for those that can't afford the real prices, the providers should find a way of redistributing the wealth within the prices they ask.

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