Written by Dr Madsen Pirie
Most people are not like Rowan Williams' caricature of consumers who find no room for life's finer experiences
The Archbishop of Canterbury has urged families to get in touch with "the natural rhythms of the seasons," and have "a sense of connectedness to natural processes." Instead of a consumerism which "treats each person as essentially a hole that you have to keep stuffing things into," he urges "a life that is balanced, that is at home with its material and human environment." These are fine sentiments, in that most of us would want balanced lives rather than unbalanced ones, and most of us would rather be at ease with the world than at odds with it.
The good bishop moves onto more controversial territory, however, when he mentions specifics, in that he seems to have bought the entire agenda of "token environmentalism". This is where green lobbyists pick out token targets to vilify, regardless of the actual degree to which they affect things.
So-called "food miles" provide one example. Dr Williams urges us to grow food in our gardens and on allotments rather than importing foodstuffs from places like Kenya. Many of the foods we import could indeed be grown at home, but with much more energy use than is required in warmer countries. Kenya, for example, is effectively exporting sunshine with its food crops.
Furthermore, many foodstuffs are more expensive to grow locally, so we would be banning cheaper foods from poor countries that are desperate to sell us them, simply to tick off token environmental boxes.
Dr Williams also appears to have taken on board the notion that air travel should be avoided to save the planet, and tried to make his own last year flight-free. In fact flying makes a much smaller contribution than do ocean or surface transport. It just makes an easier target for the tokenists. Budget airlines, which they denounce, in fact fly greener by using newer aircraft with engines that use less fuel, and by flying with fuller passenger loads.
Even the bishop's notion of consumers as holes to stuff things into is a caricature. We all have our values and our priorities, and we express these in terms of the things we spend time and money on. The time spent working for the school bazaar cannot be spent on reading or listening to opera. The money we spend on music cannot also be spent on clothes.
Every action is a trade-off against the things we could have done instead. Of course we look down on people driven by a crass materialism which finds no room for life's finer experiences, but most people are not like that. They express themselves through their choices, in lives that do indeed balance aesthetic and sensitive experiences with material comforts.
Published on Telegraph.co.uk here.Read more...
Written by Dr Madsen Pirie
The Government's asset sales will provide a year of bounty but doesn't address the British state's excessive spending.
First there was "borrowing our way out of debt" which raised the eyebrows of sober-minded accountants. Then there was "printing our way out of debt," as quantitative easing magically created money out of nowhere. Now the latest round is "selling our way out of debt," as the Prime Minister announces the sale of £16bn worth of state-owned assets.
First will come the Tote, the Thames Dartford Crossing, the Channel Tunnel rail link, and student loans. The sale of the state's 33 percent stake in Urenco, the uranium enrichment company, will follow. There are good and bad features of the sale. The good point is that most, if not all, of these will sit happily in private ownership. It has never been clear why the state should be involved in race-course gambling, while transport crossings and loan agencies are often handled elsewhere by private firms.
The disappointing feature is that these are all to be done by private sales. The sale to a single private buyer is the easiest and quickest to implement, but does least to secure public support or to secure improvements to the industry or service.
Many of the 1980s privatisations (now called by the mellower name of "asset sales") featured public offerings with discounted shares available to workers so they could become part-owners of the new enterprise. Significantly, the Government has already tried a private sale of the Tote, but was rebuffed by the European Court as representing poor value for the public. It would have been bolder (and better) to involve employees and the public in the new round of sales.
Secondly, it is by no means clear that the proposed sales will actually be used to reduce the Britain's huge debt burden. It is quite legitimate to use capital sales to reduce capital debt, and the sales would deserve support if that were the case. But this looks like the Government's way of postponing reality until after the election.
Britain has to cut its spending, and that will involve some hard and unpleasant decisions. Asset sales are a one-off. They might be used to fund spending programmes but only for one year. Crucially, that one year will see a general election, and the suspicion arises that the sales revenue will be used to continue with spending that really should be cut until after the election.
The Government has not come up with realistic proposals to cut spending to what can be afforded. Nor has anyone else, to be fair. The budget deficit (£220 billion this year) means that debt is increasing. Asset sales are not, and should not be, a way to sustain high spending; they should be a means of reducing debt.
Published on Telegraph.co.uk here.Read more...
Written by Madsen Pirie
A judicial review of Britain's liberties would give the Conservatives a programme of reforms and help David Cameron establish his pro-liberty credentials, says Madsen Pirie.
Over the last few years, many traditional liberties which protected our way of life have been removed or compromised by the Government's initiatives. In the name of taking more effective action against terrorists, drug dealers or paedophiles, customs and practices that shielded the citizen from arbitrary abuse by authority have been over-ridden or subverted.
We used to enjoy the protection of habeas corpus, and no detention without trial. We used to have the right to remain silent without it counting against us, or be forced to testify against ourselves. We could demand trial by jury, and once acquitted, need not face the ordeal of a retrial. We enjoyed the presumption of innocence, and could not be punished or have our property seized without conviction in a fair trial.
All of those liberties and many more have been eroded or abolished in a flurry of government and official zeal to crack down on possible law-breakers. Almost every day we read of incidents in which people are bullied or harried by police, not for criminal activity, but basically for doing things the authorities dislike. It will be difficult to regain ground lost for liberty, given a now-entrenched official culture unsympathetic to it.
It is fanciful to suppose that a consolidated repeal bill could be passed to reverse at a stroke all of the illiberal measures of recent years. There is, however, an effective measure that an incoming government could take. David Cameron should announce his intention to establish a year-long judicial review into the state of British liberties. Presided over by a senior and respected judge, the review body would hear evidence in public concerning the degree to which traditional liberties have been eroded.
Crucially, the review body would be empowered to make recommendations at the end of its enquiry, recommendations of measures to restore and entrench the freedoms needed to protect citizens from abuse at the hands of an arbitrary and oppressive authority. While the Conservative Government would not be compelled to implement its findings, there would be a moral pressure on it to do so. Through its year-long inquiry, the review body would raise awareness of liberty issues, and publicize the degree to which it has been lost or threatened. A culture of liberty would gradually supplant the illiberal culture that currently prevails. It would be difficult for government to resist its recommendations.
The announcement now of such a review would enable Mr Cameron to establish the pro-liberty credentials of himself and his party. It would not impose any great costs, nor commit his government to any specific pledges. What it would do it establish a momentum of liberty, and secure carefully thought-out and well-drafted proposals to restore our freedoms to their respected place at the heart of British law and tradition.
Dr Madsen Pirie is President of the Adam Smith Institute and author of the newly-published '101 Great Philosophers'.
Published on telegraph.co.uk here.Read more...
Written by Kristy Dorsey
Others, however, are not convinced there is much substance behind the rhetoric. Tom Clougherty, executive director of the Adam Smith Institute, was at last week's Labour conference. He points out that there is no way to significantly expand the Post Office's financial activities without substantially increasing its subsidy from the government, money the Exchequer simply doesn't have at this point in time.
"This looks like a crowd-pleasing announcement that can bring a cheer at the party conference, and that's about it," Clougherty says.
Published in Scotland on Sunday here.Read more...
Written by Martin Waller.
A new phrase has entered the economic lexicon — “fiscal alcoholic". It emanated from the Hungarian central bank and has been introduced into the UK by Eamonn Butler, of the Adam Smith Institute. It is defined as “someone who knows that they should be giving up their reckless spending and borrowing habit, but is addicted to it." “My name is Gordon, and I am . . ."
Published in The Times here.Read more...
Written by Rob Langston
Political think tank Adam Smith Institute claimed the regulator had failed in its supervision, which was compromised, plus its inability to recognise that it was responsible meant it could not learn lessons for the future.
Published in the Financial Times here.Read more...
Baroness Scotland should not lose her job for the mere technicality of failing to take a photocopy of her cleaner's identity documents. But she should lose her job for pushing this law through parliament. Plainly, it is a law with regulations so complicated that even the UK's top law officer cannot follow them. And a law which empowers a quango – the UK Border Agency – to issue large fines that could ruin unsuspecting, struggling small businesses.
Dr Eamonn Butler
Director, Adam Smith Institute
Published in The Guardian here.Read more...
Written by Tim Worstall (Fellow, Adam Smith Institute)
GDP is not the be-all and end-all of our existence; it talks of value added to economies but has little to say about anything else.
Richard Layard and Joseph Stiglitz (one a Nobel Laureate, the other one of those who tried to jam some economic understanding into my brain) rightly tell us that gross domestic product isn't in fact the be-all and end-all of how we should be measuring life, the economy and everything. They also, again correctly, point to various alternative ways in which we might measure, thus set as our target, things which are more important than merely the value added in an economy.
What is always interesting is to take such suggestions and follow them to see where they lead: so let's do exactly that with the proposal from the professor at the old alma mater, my Lord Layard.
So I propose a campaign for the Principle of the Greatest Happiness. This says I should aim to produce the most happiness I can in the world and, above all, the least misery. And my rulers should do the same.
Sounds like a plan, so, using only the professor's own work, where will this lead? Specifically, where will this lead us if we try to design a tax system which accords with this principle (that's the "rulers should do the same" bit)?
Vital clues can be found in his book Happiness, something which if you haven't read you probably ought to. There are two major points made about the taxation of incomes in it and we'll add just one commonplace observation from the world around us to reach what we must assume will be the taxation system that will produce the maximal amount of happiness: the top fluffy kitten count, if you will.
The first point is that happiness does indeed rise with income – but only to a certain point. That point varies a little, dependent on where you are and with exchange rates and so on, but a reasonable estimate is about £15,000 a year. Less than that and earning more money makes you happier simply because you're earning more money. More than that and you might be happier or not, but it's not the extra money that's making you so.
Excellent. So the first and most obvious principle of our high kitten-cuteness tax system is going to be that we're not going to tax incomes below £15,000. This would clearly make people less happy, as it would take them below that number where higher incomes make them happier.
The second point is a little more complex. The contention is that when we earn more than £15,000 we create a kind of pollution. It's never quite really nailed down: one way of describing it would be jealousy, the green-eyed god, over the fact that others have more than we do. Layard's description is more gentle, in that others having more impels us to emulate them; we try to keep up with the Joneses. In doing so we strive for higher incomes, despite the way that these will make us no happier, at the expense of the many other things that will make us happier – time with family, with friends and so on.
Thus those earning more than £15,000 are imposing an externality of unhappiness on those around them: and we all know what happens to such negative externalities in welfare economics. We tax them! This is exactly the same economic argument behind carbon taxes, the congestion charge and air passenger duty. The polluter must pay the social cost of their pollution. Turning the argument around the other way, that positive externalities should be subsidised is exactly the economic argument used for tax contributions to basic science and such things as universal primary schooling. There's nothing odd or strange about the economics here, only the aspect of life to which it is being applied.
Layard's estimate is that the unhappiness caused by those on higher than £15,000 incomes is some 30% of the amount of those higher incomes. Someone on £1,015,000 a year is causing £300,000 of unhappiness elsewhere while someone on £45,000 is causing £10,000s' worth (umm, OK, I'm using one third not 30%, but you get the picture). We should thus tax the two, respectively, £300,000 and £10,000 for the externality of the non-fluffy kitten time they are imposing on those around them.
Our third point is simply the commonplace that people do not like to pay taxes. Yes, yes, I know, there are endless screeds here at Comment is free insisting that no, really, offering up the sweat of our brow to the state is such a pleasurable experience that we'd all do it willingly, without the compulsion of law. Actually, this seems not to be the case. Last time I got the figures from the Treasury (for the tax year 2005), it turned out that only five people across the entire nation had voluntarily paid more than was their legally demanded due – and four of those were dead. So if we adopt the entirely uncontroversial economic idea of revealed preferences (don't look at what people say but what they do) we can be sure that for the vast majority of the population taxes are not something paid for the joy of them. They are, in fact, something which make us unhappy.
This now gives us the details which we need to build our tax structure for optimal happiness. We can and should tax those who cause unhappiness in others by the value of the unhappiness they create through their higher incomes. We should not tax more than this for we will be creating unhappiness by doing so. Finally, we should not be taxing incomes below £15,000 a year because taking money below that sum will again increase unhappiness.
So our tax system with the highest fluffy-kitten count, the one that will "produce the most happiness" as our rulers should strive to do, just as we ourselves should, is a flat-tax system of 30% with a high personal allowance of £15,000 a year.
While this is, of course, very different from our current tax system, it is still progressive (yes, it is: work out the maths for yourselves – as incomes rise so do the portions of those incomes paid in tax) and it ticks all the boxes that will lead to maximal happiness.
In the UK, the US and Germany, happiness has been stagnating for decades. A civilisation based on the Greatest Happiness Principle would be a great improvement. Yes, indeed it will, as long as we actually accept the implications of that Great Happiness Principle as laid out for us by one of the great researchers into that principle, Richard Layard himself.
The only conundrum left is that there are only two organisations that I know of (that I am a member of both of them is entirely coincidence) which actually have as suggested policy anything close to this top cute-kitten system: Ukip and the Adam Smith Institute. But then the reason that I am a member of both is because they are both well ahead of the progressive crowd, in so many important ways.
Published on guardian.co.uk here.Read more...
Written by Dr Madsen Pirie
Ben Bradshaw, the Culture Secretary, has stepped into a simmering row about the BBC's expansion policy. He says it is "at the limits of reasonable expansion." Set up originally by six private companies to broadcast radio programmes, and nationalised in 1927, the BBC has been a public body ever since. Although it attracted praise for the quality of its commercial-free broadcasting, the BBC has tried throughout its history to monopolise broadcasting by squeezing out competition.
It opposed the introduction of ITV in 1955 and of commercial radio subsequently, following the success of the offshore pirate stations. The BBC has never hesitated to use its publicly-funded clout to compete with private ventures dependent on commercial finance. Local radio stations, set up to fill a gap in the market, soon found themselves in competition with BBC versions, financed out of the licence fee, which cut into their audience and the commercial finance it brought.
The BBC looks at what others are doing commercially, and copies them, trying to maintain its dominant position by undercutting commercial operations with its "free" licence-payer-funded alternatives. The BBC has no need to finance such operations by market share because it has the compulsory licence fee behind it. Everyone who uses a television has to pay it, and bullying big brother tactics and intimidating commercials ensure that most of them do.
Part of the problem is that with media diversification in the internet age, the BBC still wants to do everything. It fears its dominance will be undermined by new technology unless it keeps a finger in every pie. This is very evident in its news services. Seeing the news audience move from broadcast news to internet coverage, the BBC has responded with "free" internet news to compete with and undercut those who need a market share and commercial backing to sustain their own news output.
In response to a proposal to award a small part of the licence fee to local news alternatives, Sir Michael Lyons, Chairman of the BBC Trust, has urged a cut in the licence fee rather than see any of it go to help competitors. Mr Bradshaw's intervention is timely. Just occasionally, in the way the BBC treats its prima donna celebrities, do people glimpse how their licence fees are splashed around. Less visible is the ruthless way they are used to squeeze out commercial media competitors.
The BBC is rightly praised for some of its output, but it has traded on that goodwill to distort the media market to maintain its own dominance. It is time that its use of licence fees was subjected to close and independent scrutiny, and that alternative funding models were explored.
Published on Telegraph.co.uk here.Read more...