It's the way that you tell em'

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The era of big government is over.

Bill Clinton, State of the Union Address, January 23, 1996

Children of the state

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We have all heard the old adage, ‘It takes a village to raise a child’, but the government has taken the village to mean the state. Unfortunately we live in a world where there are people who seek out children to exploit children, but does it take the government raising our children in order to prevent it from ever happening? The government has now taken steps to ban parents from entering play areas, and in some cases even banned parents watching their own children play, unless they have been vetted.

It feels as if we elected nannies instead of public officials. First parents were banned from ferrying their children to sports activities and then two police women almost lost their jobs over sharing child minding duties. Now parents can’t even watch their own children play without submitting to criminal background checks. How long will it be before you have to submit to a background check before you allowed to have a child? I know it sounds outlandish now, but if you told my parents 15 years ago that they couldn’t watch me while I played in a playground they would have thought you were crazy.

We have already given up so many of our natural rights to government that we almost don’t notice when we lose another. The real danger is that we are allowing our children to grow up under government control. Children will grow up thinking that ‘government knows best’ if they continually see their own parents undermined by government regulation and intervention. The government is practically teaching children that they need to be protected from their parents. If public-run institutions are any indication of how well things turn out under government control, then I’m afraid families don’t stand a chance.

Spencer Aland blogs regularly here.

England's lost liberty

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A couple of weekends ago I read an old paper I found on the Libertarian Alliance’s website – ‘How English liberty was created by accident and custom – and then destroyed by liberals’, which was written by Sean Gabb in 1998. I found its thesis fascinating.

To simplify somewhat, Sean contends that even as English liberalism reached its zenith in the Victorian era, it was being undermined from within. The reason for this was that English liberalism was not based on liberal philosophy so much as it was the fortunate result of a historical and cultural accident – the ‘administrative vacuum’ of the 18th Century, which followed the Glorious Revolution of 1688.

During this period, any growth of government was severely hindered by strict adherence to traditional customs and the rule of law, which allowed for no administrative discretion, and no assertion of administrative necessity. As Sean points out, England did not, at this stage, even have a professional civil service. Certainly, plenty of people were granted sinecures and fancy titles – but they didn’t actually do anything. It was, he says, close to ‘administrative anarchy’. The English people have never been freer.

The thing that brought an end to all this was that the late 19th Century liberals, in rationalizing and harmonizing the laws and administration of England, effectively undermining the reverence of common law and custom and the absence of administration that had sustained liberty for so long. In a sense, they created government as we know it today, and in doing so they unleashed “the greatest illustration that history affords of public choice economics". Government, once it had the means to do so at its disposal, started to grow. It hasn’t stopped since.

This error, Sean says, was compounded by three defects in the liberals’ reasoning: (1) they relied too much on economic arguments, and thus allowed liberalism to be caricatured as heartless and calculating; (2) the labour theory of value that Smith and Ricardo subscribed to played straight into collectivist hands; and (3) they were too quick to make exceptions to the general rule of laissez-faire.

I’m not a historian, so I’m not in a position to critically assess Sean’s analysis of 18th and 19th Century political history. Suffice it to say that I found his arguments convincing as I encountered them. I’d certainly recommend reading the whole paper.

Public opinion on global warming

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Is the tide turning?

Royal Mail – Industrial relations from another era

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The current postal strike brings back bad memories. The union-dominated economy of the 1970s was – with a few exceptions – laid to rest by the Thatcherite view that customers were paramount. What should be done as Royal Mail, like the coal industry of the 1980s, inexorably declines on the back of competition for the delivery of mostly unwanted junk-mail and by the surge in e-mail?

Yet, Royal Mail has access to c.27 million addresses – no other UK company can boast such customer access. Surely, even the Royal Mail’s management should be able to run a decent business from that legacy. Once another ‘solemn and binding’ agreement has been cobbled together, privatization of Royal Mail should proceed apace.

Central to any valuation is the Universal Service Obligation, parts of which date back to the venerable Rowland Hill of 1840s Penny Black fame. The principle of the geographic uniform postal rate that he set still endures. Even the Hooper Report failed to recommend its abolition. Why should letters posted in say Penzance for Helston cost the same as those posted in Penzance but destined for the Shetlands Islands?

Surely, some type of simple zoning charge could be introduced to reflect much higher transport costs to faraway places. After all, charges for water – arguably a more vital product – vary substantially throughout the country as South West Water’s customers know only too well.

Full privatization of Royal Mail would attract interest despite the combination of the march of e-mail and ongoing industrial relations problems, not forgetting the infamous c.£10 billion pension deficit. The latter – by comparison quite small beer - should be added to the existing £1 trillion plus public sector pension deficit. Certainly, Holland’s TNT and Germany’s Deutsche Post would be interested along with some private equity funds.

Is public patience for Royal Mail finally running out?

Proceeds of crime

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Good old Labour. In an attempt to make Britain a safer and better place to be, they have devised yet another way to terrorise the public into ensuring that we never, ever commit even the most minor of crimes. Beware you fare-dodgers and council tax shirkers, for under an extension of the Proceeds of Crime Act you too can join the ranks of Drug Baron and SuperPimp by having your home raided, cash confiscated and assets frozen. However, it won’t be the bobby breaking down your door, it will be a new army of power-crazy councils, quangos and agencies.

Alan Johnson is expected to announce the measure next week. Sneaking it in through a Statutory Instrument, there will be no need for MPs to debate the issue, and so bodies such as Local Councils, TfL and the Royal Mail can expect to use these powers independent from police control fairly swiftly.

However, Labour instructs us not to panic. Each empowered body will receive ‘financial investigators’ trained and monitored by a quango. This is a very good thing apparently, because they become “less reliant on more traditional law enforcement agencies" like the pesky police. Quite right, why should someone trained in upholding the law decide when the right time to confiscate somebody’s wealth is, when a faceless bureaucrat would do so much more eagerly? We are assured that this extension shall not be exploited or abused; presumably in the same way that anti-terrorism legislation has not been used to rifle through bins and deny school places. The move will also boost the fight against crime and free up police time, although the memo neglects to mention if it will also increase bureaucracy, direct resources towards hunting petty offenders and increase paranoia amongst citizens every time they fail to ‘touch in’ with their oyster card.

It would be quite easy to assume that most bodies given these new powers will scarcely use them, deciding they should focus on their real jobs and that if a criminal deserves to have assets frozen that is a matter for the police. However, the promise of a cut of the confiscations may just be alluring enough to encourage use of the POCA left, right and centre.

These new measures are draconian, invasive and rather unnerving, threatening each and every one of us with having our means of survival cut off for the slightest misdemeanor. It seems that no act is too low, no sum of money too small for Labour to try and plug the deficit with it.

Defying logic

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Germany plans to do it, Japan has already done it, France plans to do it,  and even the states where the only true alternative to a de facto social democratic government is a pure socialistic one – Denmark and Sweden – are at it too. I am here referring to the fact that these countries are all cutting or intending to cut taxes as a way of boosting domestic production and employment rates. By lowering taxes the government lets taxpayers keep more of what is theirs, while also promoting private investments. In contrast, the British government has found its own way to 'boost' productivity: unlike everybody else, it is hoping to do so by increasing income taxes.

Either the British government has defied logic and found that the optimum of the Laffer curve is attained by increasing (already high) taxes, or it has begun digging its own fiscal grave. By and large, the tax increases are the result of the British government’s inability to prioritise among public expenditures, as well as to satisfy notions of economic “justice". This is not the time for such fancies.

It is highly unrealistic of the British government to believe that people who are set to be hit by this tax will sit back and do nothing. People earning the kind of money required to pay 'super-taxes' have one striking thing in common: they are extremely mobile, not only domestically, but globally. The lucky winners of one of the highest marginal taxes in the world would probably not mind paying it for a year or two, but after a while they will start to look around to find better offers. Britain is looking like an increasingly bad choice.

Why Europe is going to the dogs

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[W]e may have to temper on-going tax competition between some states which tilts the balance; where capital in mobile sectors pays less and less and labour is hit more and more.

Mario Monti, Former EU internal market and competition commissioner, 'Europe warned on tax in single market drive', Financial Times

The antidote might be found here.

Stop outlawing jobs

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The Trade Union Congress (TUC) is calling for the UK national minimum wage to be increased to £6 an hour from October 2010. In Scotland a government committee suggests the public naming and shaming and an increase in fines for employers who break the minimum wage. While in Jersey the Employment Forum has outlined plans to increase the minimum wage to £6.20. The sound of breaking windows fills the British Isles.

The timing of this is awful - not that there ever is a good time to outlaw jobs - but with unemployment set to continue to rise into next year, those at the margins will of course be adversely affected by restrictions on employer and employee. There is no getting around the fact that minimum wages create unemployment; there are few more obvious truths in economics. Murray Rothbard retorted to those that suggested the minimum wage has no effect on employment to ask why they didn't put it up significantly higher; their lack of response was telling. The marginal level that we live with discriminates against the most vulnerable, forcing them into the disabling clutches of the state.

Pushed as it is by unions, the minimum wage is a mask for special privilege. And as such it was infuriating to hear the ludicrous assertions a couple of months ago on the BBC Radio 4 programme Where did it all go Right? that the national minimum wage has been an unqualified success. To have to listen to Michael Portillo and Boris Johnson turning their backs upon logic in favor of a populist bandwagon was too much. In a time of high unemployment combined with dispendious welfare, to suggest that the national minimum wage is having no effect is fantastical.

It is about time a politician or two stood up for sound economics. Given the state of this nation, perhaps we could do with a British Warren Harding to lead this country. Any idea who could rise to the challenge?

US embargo on Cuba

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The UN general assembly is expected to overwhelmingly condemn the US economic embargo against Cuba today, adding pressure on the Obama administration to abandon its 47-year-old policy.

Since 1960, Americans have been barred from trading with, investing in, or traveling to Cuba. The embargo may have possibly made sense before 1991, when Castro served as the Soviet Union's proxy in the Western Hemisphere, but all that changed with the fall of the Soviet Union. Today, more than a decade after losing billions in economic aid from the Soviets, Cuba is only a poor and dysfunctional nation of 11 million people who pose no threat to America or any other country.

More recently some officials in the Bush administration charged that Castro's government may be supporting terrorists abroad, but the evidence is pretty shaky. It is much more likely that the Bush administration simply wanted the Cuban vote in Florida, than it really believed Cuba was paying the bills of terrorist. As a foreign policy tool, the embargo has aided Castro’s government authority by giving him an excuse for the failures of his socialist programs. He can, and has, railed for hours about the suffering the embargo inflicts on Cubans, even though the damage done by his domestic policies have been far worse. If the embargo were lifted, the Cuban people would be a bit less deprived and the Cuban government would have no one else to blame for the shortages and stagnation that will persist without real social reforms.

If the goal of U.S. policy towards Cuba is to help its people achieve freedom and a better life, the economic embargo has completely failed. The economic effects have made the people of Cuba worse off by denying them low cost food and other goods that could be bought from the United States. Given the current economic situation, lifting the embargo could create just the jump start that the US economy needs. Open markets are the best real way to encourage more personal freedoms and government reform.

Spencer Aland blogs regularly here.