We need more private schools, not less

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Can the Conservatives learn from Sweden's school voucher system?

Another blow for the left this week as the University College Debating Society threw out a motion calling for the abolition of private education. Camden LibDem candidate Jo Shaw and I, opposing the motion, expected to be defeated, but at the end of the debate our calm and precise arguments gave us a 2:1 majority.

Not that the argument is difficult. Scrapping private education would place a huge additional burden on the state – leaving it with larger class sizes, or leaving taxpayers with higher taxes – all to fund the education of wealthier kids who the rest of us aren't paying for right now. And why do it? Frankly we should be growing more independent schools, because they perform better. It's not just that they get brighter kids with more motivated parents. Or that they charge more than the state spends. The fact is that they make their budgets work harder. Pound for pound spent, private-school kids get more face time with their teachers than state school kids, as our report A Class Act showed. No wonder they perform better.

Sure, you have to be well off to send your kids to a private school: rich enough to pay taxes to support the state sector, and then pay for your private schooling. What I would like to do instead is make private schooling affordable for everyone – as they do in Sweden, or in Denmark. Sweden introduced a voucher system in the mid-1990s. It means that if parents take their children from a municipal school and move them to an independent school, that school gets the same money from the government that it would have spent on their state education. No fees, no top-ups, not even extra charges for sports kit are allowed. So all at once, the whole population of Sweden can exercise a choice. And around 1000 new independent schools have sprung up, bringing in new ideas and much more customer focus. Even the municipal schools have had to sharpen their act in the face of this new competition.

The Tories have seen the merit of this system. I hope they will be brave enough to let voucher schools go their own way and allow customers, not civil servants, to say how they want their schools run. For instance, we don't need a massive state curriculum, administered by thousands of bureaucrats – parents know whether or not a school is doing a good job, and if it isn't, they will move and take their voucher funding to another. In fact, we wouldn't need much of Ofsted's lumbering regulation at all. Let schools run themselves, and give parents the financial power to make their own choice. That would revolutionize UK education. for the better

Dr Butler's book The Rotten State of Britain is now in paperback.

More Stern words

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Lord Stern, author of the eponymous report on the economics of climate change mitigation, brings the zeal of the converted to this contentious debate. An interview with him is given a two-page spread in yesterday's  Times together with a front page story encouraging us all to turn vegetarian to save the planet. He claimed on the Today programme that such a headline was unfortunate and that it did not represent the main thrust of his interview. Nevertheless, it was said, and the contribution of farming to emissions of so-called greenhouse gases is likely to become a matter for high-profile debate following whatever fudge emerges from the climate change summit in Copenhagen in December.

In his interview, Stern calls for President Obama and other political leaders to attend this conference to ensure agreement is reached. There is little chance of this. The last time the President went to the Danish capital his presence did nothing for Chicago's bid to host the 2016 Olympics and the chances of a similar outcome are high, especially as the US will take no steps on climate change legislation until the top priority of healthcare reform is settled. It is far more likely that he will address the issue when he receives the Nobel Peace Prize in Oslo, following his ill-advised acceptance of this dubious honour.

In the Today interview, Lord Stern claimed that climate change 'deniers' were a small and declining group. Like many statements about climate change, this was put forward on the basis of no evidence. There are signs that the public is becoming increasingly sceptical (hence the government's decision to run the bedtime story propaganda ads on TV). This mood is only likely to strengthen if meat eating, energy and driving all become more expensive. And politicians are surely aware that unpopular policies do not lead to re-election.

Martin Livermore is the director of The Scientific Alliance.

Regulating hedge funds

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Businesses could be driven out of Europe because of hedge fund regulation, the European Central Bank (ECB) warns. The ECB reacts to the intentions from the European Commission to regulate hedge funds as the only region in the world. ECB is concerned that regulating funds in the EU but not anywhere else will give the funds incentives to go “country shopping" in order find the best place to be (with the least regulation). The paradoxical part of this argument is that funds can do this already... and many have decided that being in Europe is the best place to be, so why ruin a good thing?

The proposal from the European Commission covers all kinds of funds financing everything from creative entrepreneurs to big business. Driving these funds out of the European region and into the arms of more competitive countries will set back the European industry costing both wealth and jobs.

If the EU really was comitted to supporting productivity, research and innovation, eurocrats should maybe consider ways of easing administrative burdens for those driving progress and prosperity instead of finding ways of turning them away.

Hazlitt on aid

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Government-to-government foreign aid promotes statism, centralized planning, socialism, dependence, pauperization, inefficiency, and waste. It prolongs the poverty it is designed to cure. Voluntary private investment in private enterprise, on the other hand, promotes capitalism, production, independence, and self-reliance.

Henry Hazlitt

Osborne's plan to limit bank bonuses

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George Osborne's plan to limit bankers' bonuses...won't improve life for borrowers.

UK Shadow Chancellor George Osborne proposes limiting bankers' bonuses as a way of making more lending available to cash-starved businesses. He thinks that anything up to £10bn could be freed for lending if larger bonuses were paid in shares, rather than in cash. And it might focus bankers on long-term business improvement, rather than short-term deal-fixing.

I doubt it. In the first place, banks already pay their larger bonuses in shares, precisely because it keeps staff motivated and hooked into the business long term. We already have the most restrictive remuneration regulations in the world, and if people can't get paid what and how they want here, they can zip off to Switzerland, Asia or the Middle East no sweat. It's a very mobile market. Furthermore, if the banks pay in shares, who does that hit? Well, you and me, the taxpayers who are supposed to own the shares in these deadbeat high street banks. Frankly, I'd not like my shareholding watered down any further, thank you.

I'm afraid this plan looks like electioneering again. If there is one lot that people hate more than politicians, it's bankers, so they are easy targets. And yes, the bankers have paid themselves far too much, no question. But politicians should be explaining why, not just joining in the bear-baiting. They can't, of course, because they are complicit. When the Fed and the Bank of England were flooding the world with cash right up to 2007, business was never so good. Not surprisingly, everything you did succeeded, there was so much money around. So the banks paid silly bonuses in order to motivate people to do deals. When the music stopped, a lot of those deals turned out to be unsustainable, but the banks had been acting perfectly rationally, going after the money that the politicians were printing.

Another reason why bankers overpaid themselves is because there is far too little competition in banking. And the reason for that is that banks have to carry so many brain-dead bureaucrats. Regulation is a huge burden which stops new people entering the sector, and induces existing players to merge in order to spread the regulatory compliance cost. And the lack of competition is not helped by the likes of Gordon Brown forcing banks like Lloyds and HBOS to merge. We should actually be splitting banks up, not merging them – George O is right on that, at least.

People don't understand that bonuses are how up-and-down businesses (like banks) keep their wage overheads down. When things boom, you pay spectacularly. When they don't, you rein in – although with contracts in place, that might take a year or two. Frankly, with business in the state it is, I do not think that next year's bonuses will be anything like those of the past. So why not let the market do its job?

And as for all those folk starved of lending funds...well, it's not just that the banks are repairing the balance sheets. It's also that people right now are scared to borrow any more because they don't know what the future holds. Would all that bonus cash go into lending, then? As I say, I doubt it.

Dr Butler's book The Rotten State of Britain is now in paperback.

People used to believe this

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A recent column by Matthew Parris deserves even wider coverage than it received. He made the point that the atrophy in a disintegrating government is betrayed by the media's disregard for things it would once solemnly have reported. "We no longer bother to rebut the Prime Minister’s improbable claims," says Parris, "or dispute his wacky ideas. There’s no point."

And Gordon Brown, who always loved reeling out meaningless statistics to bully and cow his audiences into submission, is coming out with some real corkers. Parris cites two from Labour's recent conference:

“Starting now," said Mr Brown to his conference in Brighton three weeks ago, “and right across the next Parliament, every one of the 50,000 most chaotic families will be part of a family intervention project . . ."

It took hardly a nanosecond to realise that this was a ludicrous undertaking on many levels. It certainly wouldn’t be starting “now". What is this new “project"? Where did he get the figure of 50,000 “most chaotic families" from? Absurd.

Yet no-one mocked it or disputed it. They barely noticed it. They no longer either accept this sort of nonsense, or even think it matters. Parris gives a second one:

“From now on," Mr Brown told his Brighton conference, “all 16 and 17-year-old parents who get support from the taxpayer will be placed in a network of supervised homes." But this is astonishing, isn’t it? Where are these workhouses? Have you seen any young parents carted away yet?

At one time some serious voices in the media might have challenged fantasies like this, but no-one can any longer be bothered. Matthew Parris is the only commentator I saw even mention this, and then only to show that nobody even bothers to take it seriously any more.

The UK might indeed pull out of recession by the turn of the year. Let us hope so. But no-one gives any weight to the fact that the Prime Minister says so. If anything, that would make it seem more improbable. Like a busted bank, his capital of trust is gone, betrayed and squandered over the years.

Check out Dr Madsen Pirie's newly-published "101 Great Philosophers".

Tax, privacy and the state

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In Norway, an extreme intervention in privacy has become a deadly threat to respected and peaceful citizens, their families, children and spouses. This weekend a number of Norwegians received blackmail letters threatening them to hand over large sums of money to the offenders.

The offenders have used the publicly available tax database to pick out their victims. Each year the Norwegian government publishes all Norwegian citizens’ tax information on the internet for everybody to look at. From this database you can find out the income, paid tax and wealth of all Norwegian people and Norwegian companies. Offenders have picked out those most likely to be able to pay. The publishing of the databases was stopped for a short period, but reintroduced when the present social democratic government came into power.

The same danger is faced by Swedish taxpayers, where the government, like in Norway, exposures citizens’ private lives and incomes. The Danish government does not perform this kind of policy at the moment, but the Socialistic Peoples Party has proposed to introduce this legislation, if a social democratic government comes into power after the next election. The reason they give for this is to make it possible for people to keep an eye on each other to ensure everybody pays tax. Essentially they are encouraging people to spy on each other.

When facing absurdities like this the people of Scandinavia really need to ask themselves how much they really want to expose their private lives to public inspection. They also need to consider if it is proper that self-justifying politicians are able to give what should be private information to the world without asking first?

On a related matter, the ASI have an upcoming event entitled "Tax Competition: Economic Freedom and National Sovereignty". Click here to find out more.

Are these people for real?

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Could children perhaps become part of an adult's personal carbon allowance? Could you offer rewards: have one child only and you may fly to Florida once a year?

Alex Renton, 'Fewer British babies would mean a fairer planet' The Guardian

H/T Mark Steyn

Don't have nightmares.

Lord Stern is wrong: giving up meat is no way to save the planet

Dr Madsen Pirie argues that technological advances, not “live more simply” environmentalism, will deliver a greener planet.

Lord Stern, whose 2006 report set out the consequences and costs of various levels of global warming, has now called for humans to stop eating meat. His reasoning is that our farm animals, especially cows and pigs, expel methane, which is 23 times more potent than CO2 as a greenhouse gas, making meat-production account for 18 percent of all carbon emissions. He says that it will become as socially unacceptable to eat meat as it is to drink and drive.

The proposal is not surprising, since it is but the latest in a series of proposed behavioural changes which are claimed to be essential to the planet’s survival. People have been told they must eat locally-sourced food, abandon their cars for public transport, and drastically cut their air travel, among many other ‘essential’ changes. Giving up meat is only another step on the ‘live more simply’ road.

At the heart of the environmental lobby lies an unease at progress and change, and a veneration of a calmer, slower lifestyle. It goes hand in hand with a disregard for the material goods which extend choices in the rich nations, and even for the economic growth which offers the poorer ones a ladder out of subsistence. Although ‘saving the planet’ is advanced as the reason why these lifestyle changes must be implemented, it sometimes seems as if the simpler life is an end in itself, and that global warming is a convenient excuse to force acceptance of it.

Lord Stern, whose 2006 report set out the consequences and costs of various levels of global warming, has now called for humans to stop eating meat. His reasoning is that our farm animals, especially cows and pigs, expel methane, which is 23 times more potent than CO2 as a greenhouse gas, making meat-production account for 18 percent of all carbon emissions. He says that it will become as socially unacceptable to eat meat as it is to drink and drive.

The proposal is not surprising, since it is but the latest in a series of proposed behavioural changes which are claimed to be essential to the planet’s survival. People have been told they must eat locally-sourced food, abandon their cars for public transport, and drastically cut their air travel, among many other ‘essential’ changes. Giving up meat is only another step on the ‘live more simply’ road.

If we give up animal husbandry and eat the vegetarian diet Lord Stern advocates, it would be one devoid of milk, cheese and butter, and the world would have to get along without leather for its shoes or jackets, or wool for its clothes. This is not going to happen, any more than the other ‘essential’ changes.

What will happen instead will be new technologies that solve the problems without behavioural change. There will be emission-free transport, cleanly-produced energy, and minimal-impact production. Human ingenuity and resourcefulness are quite capable of achieving this, and can even be accelerated by suitable incentives.

It is highly likely that animals will be genetically engineered to emit less methane, and highly unlikely that human beings will give up a large part of their diet. The one is easy to do; the other is probably impossible, as well as undesirable. Some in the environmental lobby oppose this kind of technological change precisely because it will make behavioural change unnecessary. It will enable people to live as they want to live, rather than as others think they should live.

But technology will win, and the constricted lifestyles advocated by Lord Stern and others will lose. A look at human development suggests which course is the more likely.

Published on Telegraph.co.uk here.

So, what's it all about, this neo-liberalism stuff, then?

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So let's play a little game shall we? Yes, we are indeed the evil cabal that has imposed neo-liberalism upon the world in recent decades. Yes, it is indeed all our fault: the current recession, the globalisation, the insistence upon light regulation, privatisation, freer trade if no one is quite ready for free trade yet. Yup, it's us, the neo-liberals, teaming up with the Illuminati, the Rosicrucians and whoever Dan Brown is going to write about next to bend the globe to our will.

So what's it all about then? Other, of course, than the intense pleasure of the exercise of power over mere mortals?

This actually:

Via Bluematter, that's the result of a new paper.

• Defining poverty as less than $1/day, world poverty rates fell by 80% from 27% in 1970 to slightly more than 5% in 2006.
• The corresponding total number of poor fell from 403 million in 1970 to 152 million in 2006.
• Similar findings apply if other poverty measures are used ($2/day, 5$/day, etc)

We want the abolition of global poverty and we've been working towards it in our excessively evil manner. By pointing out that while poverty of the most gut wrenching sort might be the natural state of mankind it is indeed possible to do something about it. That something being the creation of wealth with which to alleviate that poverty which is why we've been shouting about the need for the globalisation, the insistence upon light regulation, privatisation, freer trade if no one is quite ready for free trade yet, even if there is the occasional hiccup along the way in the form of a recession or even two.

Being slightly more serious than the above jocular tone what the global economy has managed (and yes, much of what it has managed has been to do with that now most unfashionable neo-liberalism) over that 36 years is that our living standards have around about doubled, even while they've taken a 5% or so hit in these last couple of years, and global poverty has fallen by 80%. That's the largest drop in poverty in the entire history of our species, longer, since back before Lucy was a glint in her father's eye.

So if you do want to insist that the last few decades have been the triumph of neo-liberalism then just remember: it's been the best ride and the best bargain that humanity has ever had. Might actually be worth continuing it too.....