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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

China comes in from the cold

Written by Alex J. Williams | Tuesday 13 November 2007

It’s been hard times in Beijing for those who feel the cold, as it emerged this week that the nation’s heating is only switched on centrally by the government today. It's interesting that just as many in this country are arguing for greater state control over such electrical consumption as domestic heating, the highest polluting nation shows the inability of central state-driven controls to cope with the real world.

Isn't socialism stupid?

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What's cooking on the ASI site?

Written by Anonymous | Tuesday 13 November 2007

Sorry for the lack of blogging over the last couple of days. For technical reasons beyond our control our website went down on Monday night. However, we are using the opportunity to redevelop the site which will, over time, enable us to add a greater range of features. Regular blogging will continue while work is carried out, but please bear with us while we are working.

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The Swedenization of America

Written by Dr Fred Hansen | Wednesday 14 November 2007

USAFollowing the failure of George W Bush’s social reform – labeled the "ownership society" – there is one question that conservatives cannot escape in the run up to the presidential election. Is there any prospect of reclaiming limited government again? An interesting debate getting started.

Military spending is not the problem. Despite Iraq and Afghanistan, defense spending accounts for only 20 percent of the federal budget or 4 percent of GDP – lower than during Jimmy Carter's presidency. Driving big government has been the 65 percent of the federal budget (or 13.1 percent of GDP) spent in 2003 for "human resources" - the budget category including Social Security, Medicaid, Medicare, Veterans programs etc.

At least overall spending has slightly improved: from 22.2 percent of GDP in 1981 to 20.3 percent now. But despite two decades of the conservative think tanks churning out concepts for shrinking the welfare state, federal government is bigger and more influential now than in1980, when Reagan famously said: "government is not the solution to the problem, government is the problem".

Unfortunately it seems much harder for conservatives to dismantle the welfare state than for 'liberals' to build it. As the New Republic stated, celebrating the 10th anniversary of a rare conservative victory, the abolishing in 1996 of the Aid the Families with Dependant Children:

Welfare bashing has lost its political resonance…(and) welfare reform has expanded the constituency for activist government. Democrats now have more political room to fight Republican austerity – and to propose, in its place, a stronger safety net.

If American conservatives where not able to use the prosperous past decade in power as an opportunity to reduce the public sector, what can they possibly achieve in the more difficult years of retiring baby-boomers that lay ahead?

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Politics and the police

Written by Tom Clougherty | Wednesday 14 November 2007

PoliceAccording to a six-month review carried out by the Police Federation, detectives are being taken off serious cases to clear up minor crimes so that government targets can be met. Members of the public are being advised to report missing items as 'lost' rather than 'stolen' in order to keep theft figures low. Police are forced to focus on 'easily solvable' crimes rather than serving the public interest.

Why am I not surprised?

Whenever a public service is controlled by politicians, it will be run for political purposes – to provide good headlines and statistics for the government to show off about. As long as the service remains under political control there is no way around that – it's the nature of politics.

What's the answer? Since policing cannot easily be privatized, the best option is to make the police directly accountable to the communities they serve. Directly elect police commissioners in each constabulary and give them control of the police budget, directing operations and setting priorities.  

With accountability at such a local level, the police would quickly stop persecuting motorists and start focusing on the crimes people really care about. The Conservatives' police reform commission, to their credit, proposed just such a scheme earlier this year.

Another problem highlighted by the police federation is the amount of paperwork with which the police are burdened. Much of it can surely be eliminated but why not employ civilian staff to do what remains? It seems ridiculous to have untrained special constables patrolling the streets while real police officers sit inside doing paperwork.

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Driving down the gas tax

Written by Rachel Patterson | Wednesday 14 November 2007

Petrol pumpThe disaster of the Minneapolis bridge collapse this summer brought the usually mundane topic bridge safety and construction to the front of national discussion. As the National Center for Policy Analysis reported in October, the Chairman of the House Transportation and Infrastructure Committee, Jim Oberstar (D-Minn), has proposed a 5 cent/gallon increase on gas taxes in order to finance increased federal works projects on bridges. The NCPA rightly points out that if the committee were instead to cut out the $24 billion in pork projects from the Highway Trust Fund budget, they could easily finance the increased projects Oberstar wants without the tax hike.

Alternatively, freeing up the 30 percent of the highways budget that goes to mass transit projects, rather than actual road works, would surely free up some of the money needed for safety improvements. Currently, only 60 percent of the Highway Trust Fund budget, funded by gas taxes, actually finances the building of bridges and highways.  The rest are earmarked for pork or mass transit systems meant to alleviate busy roads.

A gasoline tax to finance the construction of highways makes sense – it charges consumers for a service they require. A gasoline tax to fund public transit is an abuse of government power in which the authorities use their taxing power to punish actions they disapprove of, in this case driving a car, in order to finance activities they deem more suitable, like taking mass transit. If the government truly wants to fund more highway projects it should reallocate the money it already has, rather than demanding more from people it already overcharges for manipulative policies.

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Joke of the Day

Written by Jokesmith | Thursday 15 November 2007

Evidence has been found that William Tell and his family were avid bowlers.

However, all the Swiss league records were destroyed in a fire, and well never know for whom the Tells bowled.

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Defensive Discussions at the Arbuthnot Power Lunch

Written by Dr Eamonn Butler | Friday 16 November 2007

James Arbuthnot MP was our guest at a Power Lunch in Westminster this week. He began by pointing out that Britain's defence forces are something of a victim of their own success. With the Soviet threat gone, and the situation improving in Northern Ireland, British governments decided to scale back the forces and enjoy the peace dividend. But they moved a bit too quickly - and now we have other threats for which the armed forces are stretched to deal with.

A lot of the discussion focused on Gordon Brown's new policy - to concentrate on homeland security even (it appears) if this is at the expense of dealing with threats overseas. It appeals to the vote motive: people are instantly alarmed when bombs explode on London buses, or car bombs are driven into Glasgow Airport, but Iraq and Afghanistan are far away ventures for most of the UK population. 

And yet, there is still plenty of inefficiency to be squeezed out of the ministry of defence, and out of defence proocurement – which seems to move slower than the technology it is procuring. Time, really, for a high-level think-tank of leaders from the public sector, the defence contractors, procurement experts and finance to get together and devise a better system that would be faster and less wasteful.

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Politicians & Football Don't Mix (3)

Written by Steve Bettison | Friday 16 November 2007

A dusty bandwagon that has been rolling along has recently had the accumulated dust shaken off it by a new person jumping on it. The Prime Minister, Gordon Brown has recently furthered his idea of “British jobs for British workers” by expressing his support of quotas in the Premiership. It is a support offered in the belief that if imposed then the pool of home–grown talent would grow and the English national team would succeed.

This bandwagon was rolled out of the Geneva recently on suggestions by both the President of Uefa and the President of Fifa that the imposition of player quotas would be the best way to revive the talents of home grown players in the face of the influx of cheaper (and in most instances better) foreign imports. (Ed: I think we can all see where this is going). If imposed quotas would be nothing more than a protectionist measure against the failing market that is: the development of quality national football players.

If you examine recent transfer prices of those that are regularly in the English national team (and many who aren’t) you will find that they are exceedingly high, especially when compared to the talent that is available on the Continent. The simple reason for this is that good English players are in short supply (thus high prices), and with a global economy it now means that we can import English speaking foreigners cheaper, and they are usually better football players.

The burden of player quotas on English football would not improve the current situation. That will only be achieved if we allow our children to be free to choose sports at school, and we also allow parents to be free to coach and train them without the heavy hand of the state stopping them for fear of prosecution. Until we have large numbers of quality football players we shall continue to import. If this is stopped through protectionism then we can watch money drain from the game as can the Treasury from its coffers.

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Joke of the Day

Written by Jokesmith | Friday 16 November 2007

There's a knock onthe door, but when the woman answers it, there's only a snail. She picks it up and throws it across the yard. Two weeks later, there's another knock on the door. The woman answers the door, and there's the snail again. The snail says, "What was that all about?"

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LA Dinner: The Relevance of Adam Smith

Written by Blog Editor | Friday 16 November 2007

Adam Smith Institute Director, Dr Eamonn Butler, spoke last night at a dinner of the Libertarian Alliance, in Westminster. His theme was 'The Relevance of Adam Smith'.

Smith is very much in vogue - a statue of him will go up in Edinburgh this summer, and he is on the English £20. The former is down to us, but the latter may be down to Gordon Brown, who also hails from Smith's home town of Kirkcaldy and who is a Smith fan. Well, in a way: he has been trying to reinvent Smith as an early Scottish socialist. And that, Butler told the Libertarians, does not work.

Certainly, Smith was a critic of businesspeople - but largely because of the monopolies and favourable regulations that the politicians were prepared to give them. He did not think, as Brown does, that politicians are right to intervene morning, noon, and night in the economy. Certainly, he was no defender of laissez-faire. But he understood the dynamism of free exchange and how it spread benefit quickly and widely. And he realized that it needed a framework of rules to maintain that highly beneficial system. Certainly, he thought that there was a role for government in things like public works and education. But he thought that because he wanted to make sure that the market exchange system had the infrastructure to travel on - not just the physical infrastructure, but the human capital too.

Butler joked that Smith told us not to choke off the dynamism of the free market, not to kill enterprise through high taxes, and not to trust politicians who want to re-shape the world - but the EU isn't listening to the first point, the Conservatives don't seem to bothered about the second, and Brown is a prime example of the third. So maybe Adam Smith has no modern relevance at all! And yet:

Though the profusion of government must, undoubtedly, have retarded the natural progress of England towards wealth and improvement, it has not been able to stop it.
 - The Wealth of Nations, Book II, Chapter III

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