The Pin Factory Blog

Hopefully, David Cameron’s summer vacation takes him over the Dartford Crossing over the Thames River downstream from London. With luck, the toll queue on the Queen Elizabeth II Bridge will let the Prime Minister take in the stunning views in all directions - the panorama will instil more pride in the nation and inspiration for new policies than the opening ceremony of the Olympic Games.

That ceremony might have encouraged Mr Cameron to return us to a rural idyll that never was, to imprison all wealth-generating industrialists, to beatify the NHS as the country’s official religion and to ban all culture except pop. The Dartford Crossing, though, is the real-world antidote to that view of Britain and suggests some good ideas to restore the economic growth needed to pay for the flights of fancy on show at the Olympic Stadium.

Start with the sheer volume of traffic that is utterly breath-taking – thousands upon thousands of cars, vans and trucks streaming across in both directions heading to all points of the compass. Mr Cameron should take pride in the fact that the majority of the world’s major carmakers – Ford, General Motors, Toyota, Honda, Nissan, BMW, Tata - continue to  make their cars in this land and that those cars are good enough to export anywhere. And he should be proud that so many of the lorries are registered in lands as far away as Turkey, hauling goods to and from every nook and cranny of the nation.

However, Mr Cameron should also recognize that Britain’s roads are far more critical to the economy’s health than any prestige rail projects like the high speed link from London to Birmingham and Manchester. A crowded Britain will live or die by an efficient road network where the vast majority of economic traffic isn’t between the centres of big cities. Road infrastructure offers many opportunities for creative thinking - privatisation of major trunk routes, tolls and road pricing where the money stays within the industry for consistent upkeep, modernisation, expansion and even dismantling as required by a dynamically changing economy. Handle this right and little taxpayer funding will be required.

Mr Cameron should also recognize that Britain’s historic economic success is so clearly underscored by those foreign-registered lorries – foreign trade. At every summit, at every meeting with every foreign dignitary, at every trade show on every continent, Mr Cameron must shout out the virtues of trade, starting with the EU’s own reluctance to implement the directive on free trade in services. Conveniently, such evangelism doesn’t need any additional taxpayer funding.

Just upstream from the Dartford Crossing is the sprawling Littlebrook Power Station and another testament to Britain’s strengths and weaknesses. The nation has a proud history of energy innovation and development with its skills in the field exported around the world. Littlebrook is oil-fired, though, and incessant dithering about long-term energy supply is bordering on the criminal. So let’s cut through the crap and dash for gas to exploit the nation’s skills, significantly reduce if not eliminate carbon emissions and secure energy supplies for the foreseeable future. It’s another opportunity to enhance growth prospects without hitting up taxpayers.

Downstream from the Dartford Crossing is the Thames Estuary, the proposed dream site of a new futuristic airport for London and there’s no escaping the need for more airport capacity in the southeast if Britain has any intention of sustaining economic growth in the decades ahead. An airport in the Estuary would be a huge challenge but Britain’s engineering industry is second to none in the world. The country’s problem isn’t building things – it’s being unable to decide to build anything. So, Mr Cameron, push the button for this airport if you want a real legacy, especially if you can finally get Whitehall to negotiate proper public-private financing initiatives.

Let’s hope the Olympics opening ceremony was the last hurrah of New Labour’s delusions and that Mr Cameron can recognise it as such. For a sense of the real world, he should spend £1.50 for the adrenalin rush of the Dartford Crossing.

So some swarthy foreigner sidles up to you and offers a deal on something you desire. A very good deal, real cheap. Clearly the correct response is to take the deal: you're getting what you want cheaper than you can elsewhere and are thus being made richer. If this swarth foreigner was an agent of the Sultan of Constantinople and was being subsidised by hte Sultan in order to create work for his subjects to do: the answer is still the same. Take the deal for it is a deal. Your own resources have been increased and you are richer.

Your delight at being offered such an opportunity would be even greater if it was being offered on something that you just must have. Imagine, for example, that the oceans would boil and Flipper be left floundering on a desolate shore if you did not immediately install solar PV in order to generate the electricity you need (need note) to be able to watch a Simon Cowell program for the opportunity to sneer. One would, and one would expect our politicians to agree, take such an offer in an instant and be very happy with it. So what's happening here?

Solarworld AG (SWV), Germany’s biggest solar-panel maker, led a group of manufacturers asking the European Commission to investigate whether Chinese competitors dumped their products on the region’s market.

The so-called EU ProSun group filed the anti-dumping complaint in Brussels after a similar request in the U.S. resulted in duties on solar imports from China. The group has 25 members including companies from Italy and Spain, and Germany’s Sovello GmbH, EU ProSun President Milan Nitzschke said today.

“A majority of the European solar industry backs the complaint,” Nitzschke said by e-mail. “Chinese companies are offering their products below manufacturing costs despite their own massive losses.”

Strangely, I was in the Solarworld offices a few weeks back but I didn't need to be in order to work out what is happening here.

As Adam Smith pointed out the purpose of all production is consumption. We the consumers desire cheaper solar panels and if we're to get them by bankrupting Solarworld and sucking subsidies out of the Chinese taxpayer then that's all well and good. We're better off and the Chinese government is foolish for gouging its own citizens to make us so.

What is going on here is that trade policy is being made to suit the interests of the producers, not the consumers: and that ain't the point of it at all. The correct response to this "suit" is to reject it with the words "Tough luck Sonny". The aim and point of trade policy is to improve the life of the consumer, yea even if that means accepting foreign subsidies.

That it won't work out this way we also know but then that's what's so wrong with the trade policy we have. In fact, that's what's so wrong with any trade policy other than unilateral free trade: we're trying to make life better for you and me and all who want to buy things, not the producers of anything at all.

One of the things that people often miss (or at the very least, underappreciate) is how the mechanisation of daily tasks in the past century has made us both hugely richer and also increased our leisure time. Further, it's less the mechanisation of industrial tasks that has done so: the mechanisation of the household has probably had more to do with it than anything else. In one of the few things that he's observably got right even Ha Joon Chang has cottoned on to this. That possibly the greatest labour saving device, the greatest contribution to female emancipation, has been the domestic washing machine.

Now, the thing is that these machines do depend upon the basic infrastructure of our society. Electricity, piped water and so on. They're also, while incredibly cheap for the time they free up, expensive for people in the poorer parts of the world. Which is where this little invention comes in:

"The GiraDora is a blue bucket that conceals a spinning mechanism that washes clothes and then partially dries them. It’s operated by a foot pedal, while the user sits on the lid to stabilize the rapidly churning contents. Sitting alleviates lower-back pain associated with hand-washing clothes, and frees up the washer to pursue other tasks. It’s portable, so it can be placed nearby a water source, or even inside on a rainy day."

The freeing of the distaff side from the monotony of hand washing clothes is quite possibly an even greater contribution to human utility than the concurrent freeing of men from those boring and repetitive tasks in a pin factory. Mechanisation of such routine tasks leads to the ability to do something more interesting and more remunerative with ones' time.

The London 2012 Olympic Games have been a triumph of wastefulness, nannying government, corporatism, deceit and incompetence. Our writer Lawsmith asks, how could our political class have gotten it so wrong?

The first and only time I've met Boris Johnson was when we were on our bicycles at the traffic light at the bottom of King William Street in the City. I stammered: "Uh, good morning, Mr. Mayor." Play it cool. After a brief (and awkward) exchange, he pushed off, away from my sight and into eternity.

Months later, as the tangible effects of the Olympic Movement's month-long occupation of central London started to make themselves felt, my thoughts once again turned to my cycling buddy. After reminding yourself for a moment that Boris once gave some constructive criticism to the city of Portsmouth by saying it was "too full of drugs, obesity, underachievement and Labour MPs," and that barely two months ago he referred to the BBC – which, like that brainchild of the Blairite Labour Party, the 2012 Olympics, is state-run – as “corporatist, defeatist, anti-business, Europhile and… overwhelmingly biased to the Left”, I take the view that BoJo -- currently the Games' biggest cheerleader -- would be doing one thing, and one thing only if he were in opposition (if he were so inclined).

He would tear the government, the media, and anyone even remotely associated with bringing the Olympics here to shreds.

In his absence, others have tried. Most have failed to make a dent. Dominic Lawson, writing for the Independent, fired the opening salvo of reason against Olympics fever last month — writing a fairly broad-brush piece which covered most of the general criticisms of this circus (cost, inconvenience, armed police), he scored his best points at the ‘leftist’ BBC's expense: "[news coverage of the Games] really does make one feel as if this is North Korea,” he wrote, “rather than a country supposedly characterised by individualism and nonconformity."

Read this article.

Let’s say that I’m a manufacturer of any product. Let’s take pins, as a good Smithian example. There is an oversupply of pins in the market, due in part to domestic and overseas producers being able to manufacture pins more efficiently than before. As a result, prices for pins fall. This means that consumers are able to buy pins more cheaply. Because many pins are used in further stages of manufacturing such as clothes production, prices of clothes fall as well.

This means that consumers are able to buy more or better quality clothes or, by keeping their spending on clothing the same, divert the surplus into other areas of consumption or better yet, to save the surplus thus generating capital formation and future growth.

Some pin manufacturers will find that their concerns are no longer profitable at the new price level. This means that they must either reduce their own costs of production or go out of business. However, pin manufacturers going out of business should not be looked upon in a negative light as their resources can be redeployed more efficiently elsewhere and to satisfy other demands for consumption. If the reductions in cost are caused by foreign producers able to supply pins more cheaply, we should see this as a demonstration of comparative advantage and the benefits of free trade to all.

It may well be that the overseas pin manufacturers are in developing countries which benefit enormously from the additional employment and economic growth created in their economies. Of course, this is only the case if overseas pin manufacturers weren’t subsidised and protected by their own governments but the fact that they may be does not justify my government in doing so.

Let’s take another situation. I’m a dairy farmer, and the price which buyers are willing to pay for my milk falls. I realise that I can no longer make a profit in dairy farming. Do I accept that I should redirect my land, capital and labour into another area where I could make profit? No, it seems instead that I should exploit a bizarre political situation where farmers are somehow held up as sacrosanct and in which many people believe that we need to be self-sufficient in food production (as if the UK is somehow preparing for a future autarky).

Instead, I disrupt the supply chains of dairy processing plants and launch a campaign attacking supermarkets and other purchasers of milk in an attempt to force them to either reduce their profit margins, punishing their shareholders who are likely to be the pension and insurance funds of British savers, or – more likely – pass the additional costs of artificially increasing the price of milk onto consumers via other means.

Moreover, instead of accepting that I am imposing a cost on all consumers which they may not all wish to pay, I protest and instead revert to using political and lobbying techniques in an attempt to coerce purchasers of my milk to raise prices. Fortunately, politicians have so far resisted the temptation to interfere too far, or rather too much further, into the marketplace. Instead of redirecting resources to different forms of production which consumers may now be able to afford, I attempt to redirect their spending decisions whether they like it or not.

It must be added, of course, that there are gross distortions in the marketplace. Interventions in the shape of the CAP on the supply side and the various mechanisms by which government drives integration in the retail sectors on the demand side must be viewed as contributors to the way in which the industry is structured. As we must continually point out, if there is not a free market then there cannot be a market price reflecting supply and demand – in other words a ‘fair’ price.

Nevertheless, the attempted use of political means to artificially inflate prices above the market rate – to create an ‘unfair’ price rather than accept that rate is a troubling and problematical response. What makes farmers special and privileged above other producers in the economy? Farmers must recognise that they must serve consumers and not the other way around. 

Next month the ASI hosts its annual event, The Liberty Lectures on the 23rd August from 2-6pm. An afternoon of lectures for students only [but we'll be putting everything on Youtube as well — ed.], that aim to introduce them to big ideas they might not otherwise encounter. This August, the conference will cover economics, history and politics, with lectures on four big ideas that can help how we view the world.

'Only Individuals Choose' – Dr. Anthony J. Evans

A discussion of the use of individualism as an approach to social sciences. As opposed to a conventional perception of Economics as being something akin to Newtonian Mechanics, Anthony will put the case for doing away with an overreliance on models.

'Public Choice Theory' – Dr. Mark Pennington

Going within the black box of government, Mark will put forward the Public Choice School case for considering the role of incentives in public institutions.

'History as the Story of Liberty' – Dr. Stephen Davies

Eschewing the conventional narrative of history, Steve persuasively argues for a conception of history as a struggle between ruling and ruled classes.

'Causes of the Next Financial Crisis' – Jamie Whyte

Many see us as in a post-crisis state after the turmoil of 2007. Rather than just being in a slump, Jamie will argue that we are merely in the eye of the storm. The solutions to the last crisis which politicians are now putting in place are setting us up for an even bigger fall.

If you would like to attend, or you know a student who might be interested, please RSVP to events@adamsmith.org.

We look forward to seeing you there!

UK unemployment is falling, hours worked are increasing, while output is still stagnant (or even decreasing). What does all this mean? How can the private sector create more jobs, while the total output it produces is still stagnating or even decreasing? Some economists seem puzzled by this saying that one set of data in this case is wrong. Even though this might be true as one of the two parameters is misleading, there are deeper explanations for this prevalent occurrence in the past few months.

It is not surprising that the first reaction on the market is a decrease in productivity (see graph below) as more people employed are actually producing less. This can partially be explained by an increase of hiring due to the Olympic Games, since none of these people are creating value or output growth for the economy, but nonetheless have paying jobs.

Source: ONS, Labour Market Statistics, July 2012, pg. 8

Lower wage growth would suggest that unit labour costs are decreasing which is making workers cheaper and more likely to find work. However, looking at the graph this doesn’t seem to be the case. But the question still remains: what is driving productivity down?

If we turn to statistics, we can blame the faulty data reporting and faulty measures of economic activity such as the GDP, or the way we define employment. However, we always use this data and if it serves as a sort of a benchmark in good times, there is no reason why not use it in bad times. The efficiency and precision of the indicators is a debate for itself, but I leave this for another time.

As for employment, personally I would always rather look at the employment-population ratio, an indicator that paints a much more precise picture of economic activity since it takes into account people leaving the workforce, which usually biases the unemployment figures downwards. In that perspective, the labour market isn’t improving, it’s still in distress.

The second explanation for a temporary drive in employment compiled with a stagnating output can be seen in the manifestation of the government’s job policies. While the British government is going head over heels to try and bring more people into work, their programs of incentivising employers to hire more workers are an example of a severe labour market distortion. No wonder productivity is rapidly falling. Employers hire people only to get the government benefit. There is no economic incentive for an employer, apart from the government subsidy he receives. The additional worker won’t create new value; his or her marginal product is very likely to be diminishing.

And since these programs are only at their beginning stages, productivity is likely to become even worse in the years to come. So what’s the point of the policy? Simple, it shows good numbers and thus relaxes the pressure on the government. The fact is that this is just another ‘Potemkin village’ designed to skew the public opinion into showing that the government is actually doing something to help the economy. But here’s the catch – whatever it does, it only hurts the chances of recovery.

The public is bemused into thinking that the government must address the market failures created by reckless bankers or the finance industry. That wasn’t the issue at all; market failures were in that particular case created by a series of government initiated policies.  Ranging from the distortions on the housing market, the credit market, the banking risk, the overall systemic risk and even the European contagion – all these areas were cramped by excessive risk taking which was supported by the regulatory environment and policy decisions.

The market (i.e. the people engaged in interactions and decision-making) simply reacted to the vastly distorted signals sent to them. So the proper way of fixing this can only lie in the market itself, as long as its recovery signals aren’t being distorted. Having the government subsidize employers to hire more people simply to increase head count, or having the government force banks to reach lending targets to SMEs or pre-determined ‘winners’, are exactly the type of wrong and distorted signals that are preventing the recovery.

One is leading to rapidly declining productivity, and the other is making banks lend money to businesses which already have enough of it, thereby completely excluding the ones that actually need it to expand their productive activities. To paraphrase Arnold Kling and Nick Schultz from their excellent book From Poverty to Prosperity: “markets often fail, that’s why we need markets.” 

There is only one way of resolving the issue of declining productivity and competitiveness, and it’s not an employment subsidy, it’s a labour market reform.

George Osborne’s announcement that laws banning Sunday trading will be suspended for 8 weeks is a welcome one, and he is right to point out that this will be beneficial to business. It will be convenient for consumers and create jobs for the unemployed. But he should be making them permanent.

Many arguments to protect Sunday trading laws have rested on the notion that they protect worker’s rights. Opponents of repeal have stated that employers will force existing labourers to work extra days. This assumes that the supply of jobs is fixed, and longer shifts must be filled by the same stock of employees. But there is no reason this should be the case - more shops being open for longer would mean more employment opportunities, particularly of benefit for students in full time education. This would allow them to gain experience and supplement their income. When youth unemployment figures are looking ever more depressing, now seems a better time than any to support a permanent suspension of the law.

A revolution in internet shopping (which is available 24 hours, every day) has put bricks-and-mortar shops on an increasingly uneven playing field. What the internet can not offer, is the sort of convenience that the local high street can.  Claims that we already have enough time to shop will fall upon deaf ears amongst those who work unconventional hours and can find it hard to get shopping done around their jobs. Those with less flexible schedules, often the sort of things these laws are said to protect against, are the greatest victims in this case. Reform can mean that customers can tell businesses when they want to shop, not politicians.

If there is to be a loser from these changes, it will be small, independent stores. This may be the case, but that does not justify the government stepping in to protect them, when consumers would prefer to do business with larger stores, which often offer a better range of products at lower prices. What smaller stores can offer on a Sunday is a shopping experience. While other forms of entertainment are not prohibited under trading laws, shopping is, and this is to the detriment of those who enjoy shopping as an experience.

Many, including the Adam Smith Institute have been arguing to let shops open on Sundays for decades (one report is nearly as old as I am). Politicians should not allow law to be dictated by scripture or by those who wish to put protecting the currently employed before the needs of those who have no jobs at all.

The Financial Services Authority is due to pass into oblivion at the end of the year and not before time.  Now according to Patrick Jenkins and Caroline Binham (Financial Times 19th July), goaded by public furore, it is going to step up its investigation into Libor manipulation. Some may think that is better late than never. The FSA is now, finally, about to pursue more companies and “more individuals will also be studied as a result”. This is the wrong way round.

Conduct is a matter of personal responsibility: penalties for malpractice should fall on culpable individuals. Only then should their employers be considered for further penalties. The public has been outraged by the lack of personal prosecutions in the banking sector. As our report “Simple Rules for Complex Systems: Streamlining the UK’s Financial Regulation Regime” published last week, puts it: “There is the confusion over whether individuals should be penalised, or their employing firms. In the Libor case, for example, the Barclays fine really only hurts the shareholders, who are completely innocent; whereas the wrongdoers retain their bonuses and, in many cases, their jobs. Penalties would be much more effective if they were targeted at individuals and not firms, except where the regulators and prosecutors can show that almost all the management were involved.” 

Fining the Royal Bank of Scotland, as seems likely, would be especially ridiculous as it would merely transfer funds from one public purse to another.

It was only on the 6th July this year that the Serious Fraud Office decided to investigate whether any crimes had been committed.  In other words, they have finally got around to investigating whether they should investigate.

All this is more than a little late.

The FSA failed to intervene and detect the manipulation in 2008 when the British Bankers Association was sufficiently worried to conduct an investigation.  That turned out to be a whitewash with Barclays’ compliance people not bothering to show up.  The point, though, is that the FSA should have conducted the investigation then, not the bankers’ trade union.

In 2011, the FSA reassured Bob Diamond, we are told, that they had been looking into Libor since 2009 and there was nothing much to worry about.  We now know that the 2008 “investigation” and the eventual revelations this year were all down to digging by US and Canadian regulators, not the FSA.  Note that the Barclays fines by US regulators were twice as high as those imposed by the FSA.

The FSA grumbled about Barclays management style but that is beside the point.  Clearly the Libor rigging required more than one bank so the management style of any one of them is neither here nor there.  Indeed, a sensible regulator faced by an uncooperative regulatee would immediately suspect that said regulatee was hiding something and redouble its enquiry.

The FSA’s approach to bank regulation has been useless.  They have only come to life when prompted by public opinion or North American regulators.  Chairman Lord Turner of Makebelieve was appointed to invigorate the FSA following its dismal lack of performance in the run up to the 2007 financial crisis.  In all fairness some improvements have been made and that includes personal prosecutions for insider trading, but not in the banking sector.

In the new, post-FSA order, the Bank of England with its subsidiary the Prudential Regulatory Authority, will recover responsibility for policing the banks.  Sir Mervyn King will be leaving and Lord Turner has been rumoured to be his successor.  Heaven forbid.

To date, many of the arguments for increasing parental choice in education and allowing a diversity of provision have focused on a number of practical arguments such as the need to improve the performance of failing government schools, the need for additional school places and the general desire to ensure that all children can benefit from the best schools available, irrespective of income or location. These arguments originate from the “what matters, is what works” school of politics where ideological principles are no longer relevant.

However, while this evidence, results or outcomes-based approach can be very persuasive, it may not be sufficient if the proposed reforms are to win widespread support amongst both politicians and the general public. According to Nobel Laureate James Buchanan, evidence of “what works” must be supplemented with a vision of the liberal ideal that attempts to capture the minds of people.

Consider, for example, the suffragettes who were campaigning for the right to vote at the start of the twentieth century. Their case for reform was not based on any evidence which showed that extending the right to vote to women would guarantee a better election result than the existing voting system. In fact, many opponents of the reforms (mostly men, but not exclusively) warned of the perverse consequences and the chaos that would follow if women were allowed to vote on the important and complicated matters of national government.  Instead the suffragette movement were campaigning for a fundamental freedom and a basic human right – the freedom and right of women to vote. A voting system based upon universal franchise was therefore deemed to be superior to one which was based upon a restricted franchise, irrespective of the results or outcomes of subsequent elections. In this example the evidence-based approach was clearly of limited use and, in fact, it could be argued that those who attempted to appeal to evidence had completely misunderstood the nature of the problem and the key issues at stake.

This same line of reasoning could also be applied to the current debate in education. An education system in which all parents have the freedom to choose would be deemed to be superior to the current system which continues to restrict these freedoms. Any appeal to evidence or what works would therefore be dismissed as irrelevant.  Buchanan refers to the repeal of the corn laws in the 19th century as a successful example of when evidence was supplemented with a vision of the liberal ideal to help gain support for proposed reforms. If we were to heed his advice then a national campaign for the repeal of the school laws, which restrict freedom in education is now required.

A campaign for freedom in education would be based on the principle that it is parents and not politicians who are ultimately responsible for their children’s education - a responsibility which can only be carried out if parents are free to choose the nature, form and content of education which their children receive. Parental choice or freedom in education therefore is not desirable simply because it may help to improve the efficiency of failing government schools. Nor is parental choice in education simply the latest policy reform that will go out of fashion in a few years’ time. Instead, it is important for the same reasons that religious freedom or freedom of the press are important - because they are both recognised as basic human rights or fundamental freedoms, which deserve to be respected and protected at all costs.

A vision of the liberal ideal in education would therefore recognise that the responsibility for educating children cannot be transferred to others; nor can it be side-lined or placed behind other considerations. Instead, it is the key principle upon which the whole education system is based. This means that governments must not in any way restrict, undermine or distort this important relationship between parent and child and the natural growth and development of education. As a result, it will not be the role of politicians to dictate which schools children should or should not attend or how much parents should invest in their children’s education.  This will, once again, be the responsibility of parents. Nor will it be the role of politicians to dictate who can and cannot set up and manage a school.

The liberty to teach and the freedom to educate must be respected and it will ultimately be parents who decide if a new school will flourish or not.

While politicians have previously argued that education was far too important to be left to ignorant parents and the chaos of the market, they must now be prepared to admit that education is far too important to be left to politicians. Politicians must have the humility to recognise that their own personal views on what works on education are completely irrelevant. After all, what does any politician know about the detailed and very specific circumstances of each and every pupil and parent across the UK?

Therefore, a future education sector where the rights and responsibilities of parents are both respected and protected will not be planned or directed by central government, nor will it be used to achieve any “national” objectives. Instead, it will consist of a variety of different national and international private, independent, autonomous, for-profit and not for-profit institutions, each with their own specific missions. The needs and desires of parents (and not politicians or governments) will be supreme and the government will be restricted to establishing a regulatory framework that will encourage a variety of different institutions to compete and flourish on a level playing field.

According to Buchanan a vision of the liberal ideal would also be based upon our desire to be free from the coercive power of others, combined with the absence of a desire to exert power over others.  Another Nobel Laureate, Milton Friedman, helps to explain:

Willingness to permit free speech to people with whom one agrees is hardly evidence of devotion to the principle of free speech; the relevant test is willingness to permit free speech to people with whom one thoroughly disagrees. Similarly, the relevant test of the belief in individual freedom is the willingness to oppose state intervention even when it is designed to prevent individual activity of a kind one thoroughly dislikes.

Therefore, this provides a useful test to all those who continue to view parental choice or increasing diversity in the provision of education as an unnecessary evil. Do they have the discipline to place their personal views to one side and recognise that the rights and responsibilities of individual parents must always come first? If they do, then they should be willing to oppose the existing government restrictions which prevent profit-making companies from managing state-funded schools, despite the fact that they may not want their children to attend such a school. From this perspective, a vision of the liberal ideal should be seen as much less self-obsessed and instead much more compassionate towards the private beliefs and the opinions of those who are directly responsible for children’s education – their parents.

For those politicians concerned with the “vote motive”, the fact that most parents are also voters might imply that reforms that increase parents’ freedom to choose in education have a good chance of gaining electoral support if the case for reform is communicated and presented in the correct way.  The time may also be right to launch a campaign for freedom in education because a vision which is based upon liberty and democracy is currently a common denominator of both the Conservative and Liberal Democratic Party. There can be nothing more liberal and democratic than extending the right to choose to all parents, irrespective of their income or location. The following advice from Bastiat should therefore appeal to both parties:

Away, then, with quacks and organizers! Away with their rings, chains, hooks, and pincers! Away with their artificial systems! Away with the whims of governmental administrators, their socialized projects, their centralization, their tariffs, their government schools, their state religions, their free credit, their bank monopolies, their regulations, their restrictions, their equalization by taxation, and their pious moralizations!

And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty.