We do not, for a moment, believe these wealth figures

The admirable Timothy Taylor has a piece looking at the racial wealth gap in the United States. We disagree, vehemently, with it. Not with what Taylor is saying, he’s outlining the current accepted wisdom. But with that current accepted wisdom. We’d probably want to mutter something about single parent incidence being an obvious enough thing to look at when considering inherited wealth for example. Something that none of this literature, to our knowledge at least, does do. Children who inherit from two parents are likely to have more wealth than those who inherit from one.

But our real disagreement is in the definition of wealth that is used in all of this literature. Which means that we disagree, vehemently, with this conclusion:

There’s a lot that can be said about all this, but I’ll limit myself to the obvious: Four decades–call it two generations–of no progress on the white-to-black wealth ratio is a long, long time.

We disagree that that is true.

Now, given what is measured it is true. But our disagreement is that what is measured isn’t the correct thing to be measuring. Wealth is measured as the stock of what can be sold off, for cash, over and above any associated debt. So, housing equity, private pensions provision and the two very much smaller categories of financial investments and personal possessions. That’s pretty much what does make up the wealth being considered. Those are, after all, the four groups that household wealth is normally broken up into.

We insist this is the wrong measure. The policy important - assuming that we are trying to craft some policy here - measure is a wider definition of wealth. Which we’d put at something like the ability to consume without having an income. No job, no labour income, yet still being able to consume - that’s wealth.

Now to be naughty and switch to UK figures - just because the Office for National Statistics does calculate this, in a way that Census, BEA and BLS seem not to.

Taxes and benefits lead to income being shared more equally in financial year ending 2021

In the financial year ending (FYE) 2021 which covered the first year of the coronavirus (COVID-19) pandemic, the median household income in the UK before taxes and benefits was £34,000, increasing to £37,600 after taxes and benefits. The richest fifth had an average income before taxes and benefits of £107,600, over 13 times larger than the poorest fifth (£8,200).

After cash benefits and direct taxes, the richest fifth of people had an average disposable income of £78,100, 5.9 times larger than the poorest fifth (£13,200). After considering all taxes and benefits, this gap reduced to 3.7, with average final income of £79,200 and £21,400 for richest and poorest people, respectively.

We often do calculate (as the Americans often do not) income inequality after taxes and those cash benefits. The point we insist upon is that it needs to be after all benefits. The NHS may not be the finest health care system in the world but the access of all to its ministrations is worth something. State schooling isn’t - Lord Knows - perfect but free at the point of use is worth something.

Given that those two - and many other things - are the ability to consume without a labour income then those are also wealth. Wealth being a stock which allows consumption without a labour income. So, given that healthcare, education - and many other things - can be consumed in the absence of a labour income thanks to the Welfare State then the Welfare State is a source of wealth.

Having made the point using UK figures we’d go on to point out that yes, the US does have a welfare state. They spend $trillions a year on it in fact. Everyone in the US does get healthcare treatment, for example. It’s healthcare insurance that’s patchy and even there the poor do get that too - Medicaid and CHIPS. It’s the poor to middling who fall into the insurance gap, even as turning up at any hospital in the country gains treatment. American schools are indeed free at the point of use. There’re Section 8 vouchers (largely equivalent to Housing Benefit) and on and on to including free cellphones for some - all the ability to consume without the possession of a labour income. They’re wealth that is.

Now, that the black part of the population relies more on the welfare state part of that wealth than the white does could indeed be an historical crime calling out for reparatory vengeance. But, we insist, it’s not actually a wealth inequality. Or, at least, wealth inequality isn’t as wide as portrayed, simply because things are already done to lower both income and wealth inequality.

To put this all another way. There are those who insist that we must plan society in order to make it better. Could be, could be, although we’d be willing to have a stand-up screaming match about even that assertion. But if we are to plan society hadn’t we best understand how it currently works, first? Work out how much actual income and wealth inequality there is before trying to change it?

And a third way to make the point. If we don’t include the effects of government policy upon the wealth distribution then how can we employ government policy to change the wealth distribution?

Solving budget problems - Cancel HS2 now

As has long, long, been pointed out the basic cost benefit analysis of HS2 is fatally flawed. The benefit is that those business class - first class - passengers get to their destination faster. That time saved is valued at their pay rate. An entirely normal manner of calculation by the way.

But that case contains the terrible flaw that we’ve invented mobile internet. Therefore time spent on a train is not valueless in terms of work done, the assumption made. In fact, given the interruptions of modern office life the time lost to Gavin announcing that the train will be departing soon is less, umm, interrupting than being in said office. Given the dependence of the HS2 numbers on that value of first class passengers’ time this blows that hole in that cost benefit analysis.

We can also do something entirely different and look elsewhere for guidance. Given that so many things do start in California, to then spread, their experience:

The infamous, $113-billion-and-counting California high-speed rail line between San Francisco and Los Angeles, which was supposed to be completed by 2020 for a cost of $33 billion yet has only begun tinkering on a 171-mile stretch in the Central Valley, is not really "an existing project," says former California High-Speed Rail Authority (CHSRA) Chair Quentin Kopp. "It is a loser."

Added ex-chair Michael Tennenbaum: "I don't know how they can build it now." And California State Assembly Speaker Anthony Rendon (D–Lakewood): "There is nothing but problems on the project."

Quite. Given that California is indeed providing that experience of the future to us we really should be taking note.

Government needs - so it says - to find significant savings in spending currently. Great, cancel HS2. It always was a dog of an idea and it’s time to put it down.

We can even approach this in a third manner, one that’s wholly, exactly and entirely conclusive. Back 12 years George Monbiot was able to spot the economic flaw in the plan. And let’s be serious about this, wholly, exactly and entirely. If even George Monbiot can spot the error in your economics then you’re really howling at the Moon.

Save money, kill a train set today.

No, a public information campaign is not 'nanny-statism'

There seems to be a common misconception that free-market neoliberals must be firmly against the idea of a public information campaign on saving energy, on the basis that this is pure nanny-statism. In fairness, this is a view which has been propagated by our Prime Minister, who is said to be ‘ideologically opposed’ to the idea, and the Minister for Climate, who reminded Sky News that they are ‘not a nanny-state government.’

It’s worth quickly setting out here why they are wrong- and why Liz Truss’ announcement at PMQs this week that BEIS will be looking into a public information campaign after all is welcome news. 

1. Information Campaigns are not a symptom of a nanny-state

It’s hardly a secret that the Adam Smith Institute is no fan of the nanny-state. Fundamentally,  the nanny state materially impacts the ability of individuals to make choices. However, it is not nanny-statism to offer public advice. In fact, one of the central principles of a free market economy is that consumers should be fully informed in order to make decisions which are most appropriate to their individual needs. 

2. It makes economic sense

Another criticism of the proposed information campaign is that £15 million is a waste of taxpayer’s money, which could be better spent during a cost of living crisis, a view exemplified here by Maria Caulfied. Whilst it is fair to question where taxpayer money is going, this misses a key point. Household energy bills are being subsidised by just under a third, at cost of approximately £150 billion. The public would not have to reduce their energy consumption by much in order for the information campaign to save the Government money. Anyway, compared to £150 billion, £15 million is hardly a small drop in the ocean. 

3. It will help people to reduce their energy bills

There are surely few people who believe that Brits aren’t sensible enough to cut back down on their energy consumption. However, the Government’s communications around the energy price guarantee have been woeful. On her now infamous local radio round, Liz Truss asserted that no-one will be paying over £2,500 for their energy bills- when in fact the energy price guarantee is simply a price cap by another name, meaning that the typical household bill will come to around £2,500. At the end of September, polls suggested that two in five households thought that the guarantee prevented bills from going over £2,500 and the Government has done little work to correct this. 

4. It is necessary to prevent blackouts

As many free-marketeers have been at pains to point out, one of the principal problems with Liz Truss’ energy subsidy scheme is that it has distorted the price signal. Freezing energy bills at a lower rate has created an artificial price signal for users, reducing the incentive to reduce consumption to a level optimal to prevent energy blackouts this winter. Moreover, considering that well-off households will be getting the largest subsidy and will be using the most energy, reminding them that, even if they are financially cushioned from the energy price rises, they still have a part to play in preventing blackouts is surely sensible. 

Tsk, see, we can't rely upon altruism

Not that we’d want this to be taken entirely and wholly seriously:

Hospitals have been told to cancel thousands of operations as blood supplies threaten to run dry.

After years of rejecting donors, NHS Blood and Transplant (NHSBT) issued its first ever amber alert status on Wednesday - meaning there are just two days of some types of blood supplies across hospitals in England.

The agency asked all existing donors who are types O negative or O positive to come forward and book an appointment to give blood.

But if this were a paid market - say, energy, food, trains, housing - then you can imagine the calls that this must be removed from being a paid market and made something different, reliant upon government or altruism or summat.

Because any stutter in a paid market always does lead to such calls. So, here we've an altruistic market which has a stutter - logical fairness requires us to insist that it can no longer be an altruistic market, right?

The not seriousness of the comment - except as a logical point - is that we've actually tried paid and altruistic markets here. At least, the US has. And the voluntary donations vastly outcompete the paid ones for whole blood. The consumer preference is overwhelming. So, altruism in whole blood it is then.

Not because there's any a priori proof that this should be so. Or that paying for whole blood is immoral - despite what many will say. But because we used the market system properly. To test, try out and find out which arrangements do work.

That is, we use that free part of free markets to find out whether cash on the nail markets work here. That use leading us to the finest solution we have in these specific circumstances. Which is the part that does need to be taken entirely and wholly seriously. This whole concept of free markets is, in one way of looking at it, a method of evidence gathering and decision making. At the start we don’t know. So, what is our method of finding out?

The value of using this method rather than - say - some insistence that money and body parts must not be mixed is that a purely altruistic system for blood products does not work. Certainly, as the continuing scandal over haemophiliacs and HIV infections shows, a paid market can have its problems here. But there is no country that successfully relies upon an altruism only collection system for blood products like plasma. Everyone, but everyone, relies at least in part upon a payment to the donors system - largely the US one.

That is, without the cash based collection system people die for lack of plasma. We can even go on to think that this is less effective than an altruism based system. Or that voluntary donations of plasma lead to higher quality - as with whole blood. Even, that it’s still immoral, money for bits of humans - as long as we’re willing to accept the cost of that moral imposition, death for some.

Again, this is the value of the free part of free market. We’ve two very closely related products and markets here, whole blood and plasma (or blood products, if preferred). In one altruism outperforms cash. In the other cash creates the supply that altruism doesn’t. And that’s the value of that free part. Without actually trying this out we’d not know that, would we? And we’re now able to manage our world because we do know.

Having plucked the logically important part out of this of course the lesson is of wider import. Only one country in the world has payment for kidney donation. Only one country doesn’t have a queue of people dying while awaiting a kidney. It’s possible to supply a part of your liver and recover just fine - as is the person it’s implanted into likely to recover just fine. Gametes, surrogacy, can be both donated and bought - well, which system actually works, in the sense of producing the optimal, even maximal, amount of bouncing babies?

Shouldn’t we find out, rather than allowing the self-appointed to determine our morals for us? After all, once we have found out then at least we’d know what those morals are costing us. Or even, what their morals are costing us.

It's too little free market, not too much

That perennial whine, housing and rentals. We’re told that:

It’s the crisis Thatcher built. It started with the “right to buy” in 1979, which eviscerated the country’s social housing stock. It was followed by Tony Blair’s private finance initiatives, or PFIs, which fragmented local services. And it has been compounded by austerity, which finished local services off. The result of 40 years of free-market extremism is visible all around us: in tent cities, food banks and record-breaking numbers of homeless deaths, which continue to rise every year. Meanwhile, private landlords swim in cash.

The problem here is not enough free market extremism, not too much. We have a national plan for how much housing should be built. We have very strict limitations on who may build what where. We’ve lines on the map insisting that no one at all can build houses Britons want to live in - the absurd idea of minimum density at 30 per hectare - anywhere near where Britons actually want to live - the Green Belt.

These are the reasons that housing is expensive in Britain. For the cost of building a house is very much the same as it is anywhere else. In the £120k to £150,000 for a nice little 3-bedder. All of the rest of the price - and this can be checked by looking at how much the insurance company will pay out if your house were to suffer a sudden dematerialisation event - is the scarcity value not of the land even, but of the pieces of paper that allow you to build a house on a specific piece of land.

So, the solution is to issue more pieces of paper. As with the way government issues money itself: print more, each piece is worth less.

The Conservative party are already subsidising people’s housing costs through housing benefit, much of which is paid into the pockets of private landlords. Wouldn’t it be more efficient to spend that money on building long-term, affordable social housing, rather than empowering landlords who have no interest in meeting the needs of the poorest renters?

It would in fact be more sensible to go all free market in a properly vicious and regulation slashing sense. Blow up the Town and Country Planning Acts 1947 and successors. Proper blow up, kablooie.

Force suppliers - landlords - to chase consumers - renters - just as Tesco, Morrisons, Waitrose, Aldi and the rest have to chase our custom for their baked beans. A proper free market will have prices at around the cost of production of the marginal unit or so. Because that’s how markets work. Second hand will be cheaper as that’s also how markets work.

The solution to the fundamental problem in the British housing market is, at bottom, not to try and tone it a bit with some twerking here and there, it’s to get all Adam Smith on its arse. Viciously so.

Kablooie.

The Department for Health Insanity

We all know how profligate the government can be with our money but this item coming right after a mini-budget calling for spending cuts is not without irony. The Department for Health and Social Care has just announced it will finance £50M on research into health inequalities. £50M on doing something about them might be excusable but giving £50M to academics to find the answers we already have is just throwing our money away. For starters, the DHSC could look at Scambler (2011) and Thomson et al. (2006)

Don’t get me wrong. Many local councils are impoverished and bunging them the occasional £50M is no bad thing, especially as the DHSC does not seem to need it. But they should be sent the money to spend on what they are good at – social care for example – not something for which they have no relevant skills whatever. No less than 13 local authorities will get about £4M each to do their own things: there will no learning from each other. Instead “every collaboration will be set up in partnership between universities and local government, capitalising on the world-leading experience and skills of the academic community.” We do not know how the 13 were chosen but it seems unlikely that the 13 universities in question are all “world-leading” in this particular field.

Of course, when they have spent the £50M on research, there will be no money left to do anything about the findings. Another £50M on adult social care or persuading NHS doctors to remain in post would have been money really well spent.

The announcement is unclear whether the £50M comes from the National Institute for Health Research (NIHR) or the DHSC itself. The NIHR has not got around to publishing an annual report since their 2019/20 one. They spent over £1bn on a miscellany of UK research projects plus £120M overseas. In addition, the Medical Research Council spent £886M, including £19M overseas, in 2021/22.

I have no idea how much the UK, or England, should spend in total on medical academic research nor how they make their decisions nor what methodology for decision-making has been shown to be the most productive. I am pretty sure the NIHR and MRC do not know the answers either because, if they did, they would tell us.

I was once involved in an application to the MRC for research support. About a year later they turned us down on the basis that the research could not possibly work, i.e. it could not be done. Luckily, we had got the money from somewhere else and it had all worked out fine.

These two bodies should be merged and introduced to the real world.

We might not like the answers but prices are information

Today’s harsh proof of the truth - we may well not like what prices tell us but they are still information.

Florencia is being forced to make a maddening choice between working and staying afloat. She and her husband employ a nanny to look after their two-year-old daughter, who has special needs, while they both work. “With the spike in costs, we can no longer afford [the nanny] so I have decided to take time off,” she tells me.

The labour of one woman is being used to look after the child, whichever way around this is done. Quite why there’s a societal interest in whether it’s Florencia doing the childcare or the nanny is something we don’t quite grasp. Or even, we’ve a way of working out what the societal interest is here. If Florencia’s non-childcare income is high enough to pay the costs of the childcare then that’s a net plus for society as a whole. If it isn’t then it isn’t. For, again, the starting set up is that the child requires the full time labour of one adult to care for it. The only question is whose - what is the societal interest in whose, that is?

“People still do not grasp this notion that if you invest in the childcare sector, you’re investing in the economy, because it enables people to work,” says Brearley. “What they think is: ‘My taxes are paying for your children.’ And that’s not fair.”

But run that through the Florencia Filter again. You are taking people away from other work to care for these children. In order for people to go out doing other work than caring for children. Only if the work being done not-caring for children is of higher value than the work being done caring for children is this a net plus for society. How do we work out what is higher value work? The income gained from doing the work. If that income supports the childcare then we have our proof that it is societally value add. And, in that cruelty of prices, if it doesn’t then we’ve our proof that it is not.

I know I’m not the only one who compares my wages each month with the cost of childcare, and wonders if the stress of juggling both, only to be barely breaking even, is worth it.

Those prices might well be saying that it isn’t.

But ask any expectant parent about the state of British childcare and you will settle upon a seemingly universal understanding: the system is woefully unfit for purpose.

After a Brexit exodus decimated staffing levels in nurseries, the pandemic quietly pushed the early years sector past the point of no return, and this winter promises even more hardship. Deliberate underfunding means providers have little choice but to charge astronomical fees, which have increased at a rate that far outstrips wages, to cover their own sizeable outgoings. And as energy prices rise, so too will costs.

That’s getting dangerously close to a claim that Brexit must be reversed in order to solve the servant problem. Which has, we agree, been something people have been complaining about for well over a century - the servant problem we mean, Brexit’s a little more recent.

We do entirely agree that there is a childcare “problem”. Children require care, so the problem is who should provide that? We also entirely agree that there’s no reason at all why it should necessarily be the mother that does so. But we do need a structure, a reasoning method, inside or with which to make the decision.

Where the work being done outside the nuclear family covers the cost of importing the childcare into the nuclear family then perhaps this should be done. Where it doesn’t it shouldn’t. As with absolutely any other discussion about home as opposed to market production of anything at all - cooking, laundry, floor sweeping, button sewing, lawn mowing, gutter clearing and all of the rest.

One added little extra piquancy here. It does seem to be those who demand more household production of all sorts of things - sew, make and mend rather than buying fast fashion, grow our own veggies on the allotment, slow cook at home rather than use the supermarket chiller shelf and on and on - who also demand that childcare should not be part of the household sector of production but must be moved over into the market sector. Which does strike us as odd, as the very reason for the household’s existence being the human economic unit is children and their long, long, raising periods.

But leave that grumpiness aside. We may well not like what prices tell us but they are information all the same. For some parents caring for their own children is higher value work than whatever it is they do in the office. Society as a whole is therefore richer - as it always is - if they do that higher value work.

We’ve our decision making structure that is - prices. We should use it.

How to solve climate change

Ms. Thunberg has invited some friends to tell us all how to deal with climate change. As we’d expect there’s very little actual thought here, more the repetition of previous positions. Very much a set of calls to do what the individual wants whether climate change exists or not, whether it’s a problem or not and whether that action would solve climate change or not.

Ms. Klein tells us to beat transnational capital (now, there’s a surprise, right?), Mr. McKibben to stop using fire. The health care guy says health care should be green, Mr. Piketty says tax the rich, a couple of climate justice folk say equity and justice is the solution and Mike Berners-Lee (no, not Tim, but Mike) says honesty in politics would be a good idea. We agree with that last one, obviously, even as we think it’s the least achievable of those desires.

None of these are specific to climate change. Mr. Piketty says tax the rich as the solution to the Sun rising in the East each day. Ms. Klein has become a transnational brand by railing against the brands created by transnational capitalism. And so on.

Our real ire, rather than just snide observation, is reserved for this from Greenpeace:

In our throwaway society, it feels as if we’re facing an avalanche of disposable plastic. One simple idea holds the key to turning this around: reuse. The practice was embedded for generations in so many cultures across the globe, yet the corporate world has made us forget those traditions and the value we place in objects that have taken natural resources and energy to produce. We need to shift to reusable packaging that stays in circulation – used, washed, reused and, crucially, out of the environment. The status quo simply isn’t working: we need to embrace the innovations that will allow reuse to flourish in the modern world.

This is not just the repetition of what Greenpeace would be saying anyway - recycle more! - whatever the subject under discussion it’s also, with climate change, often counterproductive. Assume, as they do, that we need to reduce resource use. OK, therefore we should recycle where that reduces resource use and not recycle where recycling increases resource use.

For example, we recycle must of the world’s usage of aluminium metal. Not because the ore, bauxite is particularly scarce, nor because alumina is difficult to source. But because that process of transforming alumina (Al203, or aluminium oxide) into aluminium metal uses some $1,000 per tonne or so of electricity. Remelting already extant aluminium uses perhaps $50 of electricity. So, what is actually recycled is that $950 per tonne of electricity.

Also, we calculate this by seeing that secondary aluminium - what the recycled stuff is called - is cheaper than primary. That it is cheaper shows us that fewer resources are being used. This is also why people like scrap merchants will pay for aluminium to be recycled. That is, our price system already tells us what to do here.

Just as we do not recycle the neodymium from hard drive magnets. Each hard drive might contain a few grammes of that rare earth metal, each magnet might therefore be worth - as pure metal value - twenty or thirty cents. The costs of a) pulling the magnet out of the hard drive and b) collecting enough of them in the same place to recycle them (we’d want perhaps one such plant per continent, continents are large places) are higher than that metal value. This is also - prices work, d’ye see, they’re information - proof that recycling hard drive magnets uses more resources more than digging up a bit more of Gaia to make primary neodymium.

So, recycle aluminium, don’t recycle hard drive magnets. We’ve already got that selection method of how to organise the world so as to minimise resource use.

Recycling those things that use more resources than starting afresh would do is known as being more wasteful of resources. But Greenpeace urges us to be more wasteful of resources in order to solve climate change. Not because it will solve climate change, but because Greenpeace always says we should recycle more - as with Mr. Piketty that’s their reaction to the Sun rising in the East each morning.

As to Mr. Piketty, of course he’s wrong here. The solution to climate change is innovation. Just everyone is saying that we need to change the way we do things. Great, that’s what innovation is. People who successfully innovate get very rich. This logic works the other way too - in order to encourage innovation we want to allow people to get very rich by successfully innovating.

It might even be true that taxing the extant rich is a useful place to go get money. But that inevitably damages the incentives to try to get rich by innovating. So, higher taxes on those getting rich by that desired green innovation is counterproductive, it militates against solving climate change.

But then we did pretty much insist, up at the top there, that everyone is talking their own book, promoting the bees buzzing in their own bonnets rather than actually trying to solve climate change, didn’t we?

Maybe Ms. Thunberg should have stayed in school so that she was informationally equipped to evaluate the ideas of her friends a little more?

In the end the bacon sandwich always wins

Ed Miliband clearly sees himself as the Rev Audrey’s Fat Controller. The working parts of the economy are to be moved around at his insistence and desire:

Last month, Labour’s shadow climate change secretary, Ed Miliband, called for such a cap in the Commons, citing the figures from the Tony Blair Institute and Onward. “Why would we leave this money in their pockets when it could help pay for the action on energy?” he said.

This is with reference to the profits currently being made by the renewable energy companies. One possible reason for not being all Fat Controllerish over these profits is that “their” there. It’s their money, not some giftie to be allocated as Mr. Miliband desires.

But then we agree that private property is such an antiquated, even archaic, notion these days. So we’ll need to go one step further in our explanation. The truth here being that someone famously outwitted by a bacon sandwich might not have quite enough - we emphasise the quite, for it is only a falling short, not an absence of - intellectual capacity to organise, manage and design something as complex as the economy of an entire nation. We would also emphasise, as with Hayek, that no one has that sufficient intellectual capacity. The best that can be done is to set up the system, not direct the details. Or, in the end, the bacon sandwich always wins.

So, the system. As Caroline Lucas has told us renewables are now nine times cheaper than fossil fuels. As we emphasied only yesterday, capitalists are both greedy and lazy. They’ll go for the easy profits every time. So much so that when large profits are available they’ll over-invest in an activity or sector, thereby destroying the profits and moving the value add over into the consumer surplus.

What is it that we actually desire to be happening here? In fact, what is it that Mr. Miliband desires to be happening? That folk move away from fossil fuels, that much, much, more capital be invested in renewables.

This being why we use marginal pricing of course. It is true that the costs of producing renewable energy have not gone up in tandem with the costs of producing fossil derived. Yet the sales prices have followed, leading to those massive profits. Which is exactly as we desire it to be of course.

To set up a little model - as with all models it’s illustrative, not correct. We have two ways of doing something, System A and System B. At one set of prices they’re about equally profitable to the capitalists. Now the production costs of System B rise, considerably, output prices from both System B and System A rise. Because we’re using that marginal pricing - all output is priced at the level sufficient to produce that last unit, here from that now much more expensive System B.

What happens now? Producers using System A gain vast, humongous, profits. Which, given the greed and laziness of the capitalists leads to a surge of investment in new System A production. So much so that eventually we gain all of what we desire from System A, everyone using System B goes bust and leaves the marketplace. The marginal producer is now a System A one and prices, determined by that marginal pricing system, collapse.

This is what all desire - or all putting heads above the parapet at least. More renewables, more investment in renewables and consumer pricing to reflect that reduction in cost. Great, leaving those - admittedly humongous - profits with the renewables producers achieves exactly that. In fact, our experience of human nature over time tells us that this is the most efficient method of gaining that desired outcome. Allow the capitalists to gorge on profit and watch as it gets competed away.

The only reason this won’t work is if renewables are not nine times cheaper than fossil fuels. But that can’t be true because Ms. Lucas has told us. Or, perhaps, one other get out, that given irregularity of output some portion of the system must always be fossil fuels - but then both Ms Lucas and Mr. Miliband assure us that that’s not true either.

So, we’re left with that intellectual outwitting. We’ve already set up the system - one with profits and market prices - to deliver the desired outcome. We’ve also harnessed human nature to gaining it. The only possible reasons for this not to work are because the would be Fat Controllers are wrong in their assertions.

Which does, of course, mean that we should ignore the Fat Controllers and depend upon the system that works.

Chief People Person

70 Whitehall

“Good morning, Humphrey. I see we have a new Chief People Person.” [1]

“I believe her title is Chief People Officer, Minister, and an excellent appointment it is too, if I may say so.”

“Have you met her?”

“Ms Ryland has a long line of people clamouring for her availability.”

“Her predecessor, Rupert McNeil, had the job for six years so I expect you know him well?”

“Well, I am sorry to admit to this but I have never met him either. The joke at the Oxford and Cambridge Club was that he never existed. Not, Minister, a very good joke.”

“Well, you are not really a people person, Humphrey.”

“Very droll Minister. Heading up HR for the whole of the civil service is critical for the whole future of our country. We have, as I am sure you acknowledge, the finest civil service in the world.”

“Of course, of course. Will our new Ms Ryland have charge of quangos too?”

“I take it you are referring to Non-Departmental Public Bodies? They are independent and employ public, not civil servants, so we have no responsibility for them. That would contaminate our core values which are, as you well know and admire, Minister, are ‘integrity, honesty, objectivity and impartiality.’ One way we achieve that is to get the incoming minister to reverse the decisions of his predecessor. That preserves the balance for which we are famed.”

“I’ve been looking through the Centrica annual report, Humphrey, and there are two whole pages reporting their Chief People Officer’s achievements. The 282 pages of ours do not even mention that we have a Chief People Officer.”

“Discretion, Minister, is the better part of valour. Senior civil servants do not appreciate self-aggrandisement.”

“You could have fooled me, Humphrey. Antonia Romeo seems to win promotion by flaunting her credentials. Anyway, I don’t understand why a Chief People Officer isn’t chief of the people; the Cabinet Secretary is.”

“Well yes and no, Minister. He or she may be but ‘the Civil Service Board (CSB) is responsible for the strategic leadership of the Civil Service’ and that is chaired by the Chief Operating Officer for the Civil Service.”

“OK but the Chief People Officer must be on that Board and driving things from there.”

“Well actually, under the civil service grade system, he’s not senior enough to be on the CSB but he does get a seat on some junior board reporting to it. He did read PPE at Oxford albeit at St Catherine’s. Good enough for the Club though.”

“And Fiona Ryland?”

“UCL, I fear, Minister. Nothing we can do about that but she has a challenge on her hands. Our press release said ‘Fiona will be leading our HR function at a time of huge change, as we work in partnership with Ministers to equip our people to deliver Civil Service reform.”

“Well, there are two things wrong with that. If the Civil Service is all you crack it up to be, why does it need reform? Secondly, as you so frequently remind me, civil servants do not report to ministers; the buck stops with permanent secretaries. And that’s you Humphrey.”

“Well, the last Chief People Officer never bothered me and I do not suppose this one will. As we say at the Club, ‘plus ça change, plus the same shows.’”