Gore on freedom

4727

gore-on-freedom

I believe we are on an irreversible trend toward more freedom and democracy - but that could change.

Al Gore Vice, 5/22/98

Chile vs. Venezuela

4726

chile-vs-venezuela

While Chile was being welcomed with open arms into the OECD, Chavez was busy devaluing Venezuela's bolívar fuerte. The lesson is unambiguous: free markets work, while planned economies fail. The Chicago Boys – protégés of the late and great Milton Friedman – deserve a great deal of the credit. Theirs were the policies that broke through under Pinochet’s dictatorship and have been continued and extended under Socialist governments since.

Chile is ranked 10th in the 2010 Index of Economic Freedom, ahead of the UK. By these measurements, this makes it the most economically free country the South and Central America/Caribbean region. Following the recent elections, Chile is now lead by the right-wing Sebastian Piñera. He was elected on a pledge to introduce more business friendly policies – an area in which there is certainly room for improvement.

Things have been looking good for Chile for a while, as Nick Reynolds points out for an article in The Globe and Mail:

From 1914 through 1980, Chile's economy grew at an average annual rate of 0.7 per cent. Since 1981, it has grown at an average annual rate of 4.2 per cent. Before the reforms of the Chicago boys, it took Chile 70 years to double its living standard; after these reforms, it took only 17 years.

Nestled in between Libya and Burma, Venezuela is judged to be the 174th most economically free country in the world, thus 28th out of the 29 countries in the South America/Caribbean region. And with that Constitutional Referendum passing last year, as low as Venezuela currently stands, Chavez is likely to only continue drive the country further into the ground in the coming year (or decades).

Silliest blog comment in the world...ever?

4728

silliest-blog-comment-in-the-worldever

i) As the production of goods and provision of services becomes less labour-intensive, economies need mechanisms to distribute goods and services to those no longer directly involved in production. At some point, state-mediated re-distribution of products and services grows. This leads to extended periods of education and retirement (to keep people out of the workforce), growing prison populations (to keep people out of the workforce), and the proliferation of law creation, law enforcement and law interpretation positions and professions. How will we provide income (a share of the economy) to the laid off police officers, prison guards, soldiers, bureaucrats, lawyers, judges, social workers, teachers, bankers, tax accountants etc. if we shrink government?

ii) In the cell biology analogy to an economy, only a small minority of genes and proteins are actually involved in metabolism (the equivalent of production of goods and services). Most genes and proteins (ca. 80%) are involved in monitoring the environment and regulating cellular activity. So, in a highly mechanized, capital intensive society, it is reasonable that most people are involved in monitoring or regulatory activities, rather than primary production.

Commenter on 'Stop' The Economist.

UK grocers: Recession, what recession?

4723

uk-grocers-recession-what-recession-

In anticipating a recession, discerning City investors normally adjust their portfolios in favour of defensive sectors – pharmaceuticals, tobacco, utilities and grocers. They recognise that these sectors will generally outperform a weak market.

This view continues to be vindicated by Thursday’s impressive sales figures from Morrisons, showing 6.5% like-for-like growth over the last six weeks to January 3rd, which capped a highly successful Christmas for UK grocers.

Tesco, with its 30% market share, reported underlying UK like-for-like sales growth of over 4% – after adjusting for the double vouchers offer. Sainsbury, which vies for second place with Asda, reported similar numbers. Up-market grocer, Waitrose, has also sparkled, partly at the expense of Marks & Spencer, whose food sales were lacklustre.

Of course, strong sales growth does not necessarily translate into higher profits. But, given these figures, is there really a recession on? Certainly, December was a very encouraging month for UK retail: the British Retail Consortium has calculated a like-for-like sales increase of over 4% compared with December 2008.

Before arguing that the recession is actually a fiction, six caveats:

• December 2008 comparators are very weak;
• Sterling’s decline has attracted tourists into the shops;
• January’s 2.5% VAT rise may have boosted December’s sales;
• Many special offers were available;
• Non-food retailers’ performances were far more mixed;
• Many former competitors, such as Woolworths, are no more.

The fact remains, though, that recession-driven Britain is still piling into the country’s top grocers, even if elsewhere on the High Street life is far more challenging. Both shareholders and customers are benefiting from the success of the UK groceries’ sector. And, in Tesco’s case, its very focussed export strategy is bearing fruit.

But, given the predictable failure of various Competition Commission enquiries, what, pray, will the proposed Supermarket Enforcer – nicknamed Offtrolley – bring to the party?

Dumping the Far Right with the tea

4725

dumping-the-far-right-with-the-tea

Many readers will be familiar with the worthlessness of political labels. Oh, Libertarian are you? So that’s the same as liberal? No? What’s that? A "classical liberal"? OK, so it’s conservative, but you’re not a huge fan of Cameron? But what, not Bush either? You get the picture.

But even among such confusion, there’s one thing everyone can agree on – they all hate the "Far Right". Naturally this political group is no less incomprehensible than any other – amorphous enough for conservative Americans to pin on Obama, and for him to return in kind. Makes you feel lucky to be in Europe where Jörg Haider, Nick Griffin and company simplify things by sticking to the "classical Far Right" model, no?

In the past, the privilege of branding opponents as "far right" in the US was the preserve of Democrats against Republicans. Therefore, as if by habit, Democrats last night lamented the triumph of Far Right politics as Scott Brown shook the political status quo by turning Massachusetts Red. But the easy marriage of this historically successful association is shrinking.

I wrote a while back that so-called "Far Right" social conservatism was giving way to libertarianism as the GOP’s most powerful weapon, led by the phenomenon of the Tea Party movement. Brown’s victory is yet another triumph for this perception. This new Republicanism is tough to discredit, as it’s peppered with that very American, and oh-so-un-Far-Right idea, "freedom".

Of course, the Left still tries. MSNBC’s in-house "firebrand" commentator Keith Olbermann provides a nice taster of current Democrat sentiment here, where the key outtake would be describing the Tea Party movement as:

…perhaps the saddest collection of people who don’t want to admit why they hate since the racists of the South in the 60s insisted they were really just concerned about States' rights.

Well Keith, isn’t it impressive what this mob of hick racists has achieved? Thanks to them, even as the numbers of self-proclaimed conservatives dwindle, it’s becoming harder and harder for left-wing Democrats to woo independents, leading to a tremendously entertaining political tussle.

Americans "left and right" seemingly still believe they have something to fight for, yet here in Britain we can barely summon an ounce of enthusiasm for an imminent general election that could turf out one of the most disastrously incompetent governments in history. And that’s a shame, because freedom isn’t just about practical measurements, it’s about the psyche a society fosters in its people.

data.gov.uk

4724

datagovuk

Following in the tracks of the USA, Australia and New Zealand, the government’s new website data.gov.uk has been launched today. Created with the help of internet mastermind Tim Berners-Lee, it is designed to make government information and statistics available and accessible to the public. Generating figures and statistics uses up time, resources and money. However, by making them available to the public, much more can be achieved than if they simply lay dormant in a department’s filing cabinet.

At the moment the website is still very much a work in progress; the data sets are rather limited, the website a little muddled and specific information hard to isolate. However, it is a step towards transparency, efficiency and the opening up of knowledge to businesses and individuals. The website invites you to make suggestions for ‘apps’ that utilize the information available - and allows you to upload your own creations. So far tools that allow you to check out your neighbour’s council tax band may not be revolutionary, but they could lead in a real change in the way people interact with public services and spending. As the minister for digital Britain Simon Timms notes, "by allowing industry to use data creatively they can develop new services and generate economic value from it."

The more public information made available through this website the better. George Osborne has pledged that a Tory government would put any government expenditure over £25,000 online. Posting such information along with data from local government could enable providers of services to compete with one another on price, delivering better value for taxpayers. The development of data.gov.uk would make scrutinizing the ‘success’ of policies in areas such as crime, health and education much easier, as well allowing the public to see just where their taxes go. If the concept of transparency and accountability really takes off in Westminster, perhaps the public will gain some political power, and the government will act like less of a ruler and more like the public servant it should be.

Tom Clougherty on business policies

4721

tom-clougherty-on-business-policies

Everyone's a fruit and nut-case

4720

everyones-a-fruit-and-nut-case

If one wants to understand people’s attitudes to economics, one could do worse that look at reactions to the announcement that UK confectioner Cadburys is to be bought by US counterpart Kraft.

“Cadbury Defends Sell-Out thundered the FT, leading one to wonder whether “Sell out" was a city term or another example of the FT’s flight from market economics. The Daily Express launched a “Crusade " to save the “historic British company". The Guardian spoke of “defeat" and “throwing in the towel".

Meanwhile, Gordon Brown has warned Kraft not to cut jobs at Cadbury....

It is all painfully predictable. The British press are widely hostile to the sale of what is seen as an iconic British brand to a foreign competitor. Economic nationalism abounds: For the socialist press, it was proof that Nothing... has really changed... the deal-makers are back [and] the dominance of the City over the economy remains unchecked.... For the nationalist press, it was “the end of an era". And for the politicians, the economy remains something that can and must respond to the politically-influenced will of powerful men. Plus ca change! Now, it is certainly true that (Toblerone notwithstanding) the Americans make chocolate almost as well as they make beer, and it really would be a tragedy if Kraft destroyed Cadbury’s products and filled our shelves instead with Hershy Bars. However, this is very unlikely. As long as Cadbury chocolate sells, Kraft will keep making it. They will only “strip the assets" if they can make more profit by deploying them elsewhere. As many of these assets are fixed (you can’t move Bourneville!) that would mean selling them on to people who valued them even more – i.e. somebody who was able to use them more productively. Those new owners would surely need workers, and if they were putting the workers to more productive uses, that would mean they would also pay higher wages. It may take a bit of time, but any “rationalisation" will benefit all those concerned (unless, of course, unions and governments conspire to keep wage rates so high that the unemployed cannot find work).

The choice for the country as a whole is even more stark: do we want an open economy or a closed one? Will we respect private property or not? The UK benefits enormously from inward investment (we have among the highest Foreign Direct Investment in the world), which underpins a lot of jobs including much of our remaining manufacturing industry. Britain’s car industry, for example, survives only thanks to FDI. This FDI is dependent to a large extent on foreign investors trusting that they will be able to get their money back. If we close our borders to foreign money, or stop them repatriating their profits, or interfere when owners seek to sell their property as, when and to whom they choose, we will have fewer jobs and be less prosperous.

This is a time of great uncertainty for Cadbury workers and we should be sympathetic. But neither political posturing nor media tub-thumping will help create the new and better jobs that they may, and two and a half million others definitely do, need.

A market for tigers

4719

a-market-for-tigers

The Telegraph reports that there are now fewer than 50 wild tigers left in China. We have banned the selling of tiger parts for many decades, yet tiger numbers continue to fall. The policy fails yet many persist in defending it. Tigers will only survive in the wild if we change our policy and trust the market.

Wild tiger extinction is demand driven. There is a huge demand for tiger parts in traditional Chinese medicine. Campaigns to reduce this thousand-year-old practice have failed. As there are fewer and fewer tigers, the price has gone up. Tigers live in poor countries. It is lucrative to risk being caught, and to bribe game wardens, officials and politicians. Because the price has sky-rocketed demand has gone up even further, as we see in the recent popularity of high-end tiger bone wine and tiger meat.

For decades environmental policies have focused on banning the tiger trade. This is doomed to failure, as the sky-rocketing price makes it impossible to police it. When trade is outlawed only the outlaws trade.

There is a market solution: the commercial farming of tigers. It is not difficult to farm tigers, and it is being done in many countries, including China and the USA. China has 5,000 captive tigers; the US 10,000. In fact these privately owned tigers may very well guarantee the survival of the species.

Economically and environmentally it makes total sense. The high demand is met by an increased offer. Therefore the market price for tigers goes down. If the price of a farmed tiger sinks below the price to poach one, poaching will disappear. In other words: farm tigers in captivity and tigers in the wild will be left in peace. It has been done before: widespread farming and internationally sanctioned trade rescued crocodiles from extinction.

The market can do even more for wild tigers, apart from farming them commercially. One fundamental problem with wild tigers (and wild animals in general), is that they are not owned by anyone. They are literally a free for all, which results in shortages, as is always the case where there is collective ownership. People are more protective of what they own privately than what they own collectively. Wild animals are greatly helped when their reserves are privatised. It can for example allow tourists to pay the cost of protecting the reserve. State owned tiger reserves bear a heavy responsibility for the killing of wild tigers.

The banning fails yet the environmental lobby persists in it. They rejoiced when CITES, the international organisation which regulates endangered species, misguidedly called for a phasing out of tiger farms in 2007. They attack the commercialism of farming, yet cannot come up with a rational alternative. They attack the cruelty of tiger farms, and perhaps rightly so, yet forget that we successfully ensure the welfare of many other farmed animals.

It's time for the environmental lobby to wake up, to realise the disastrous effect of its failed policy, and to use market mechanisms to achieve its goals.

JP Floru is a councillor in the City of Westminster and Director of the Freedom Alliance.

George Orwell - 60th anniversary

4718

george-orwell-60th-anniversary

Tomorrow marks the 60th anniversary of the death of George Orwell, best known for his novels 1984 and Animal Farm.

Orwell was a pen name: he was born Eric Arthur Blair in 1903, the son of a British colonial civil servant. He went to Eton, joined the imperial police in Burma, and in 1927, decided to become a writer. In the 1920s he had anarchist leanings, but before long he became attracted to socialism. In 1936 fought with the Republicans against Franco in the Spanish Civil War. In that conflict, however, his worst enemy turned out to be the Communists, who were backed by Stalin and were quite willing to put down anyone, including socialists like him, who might dissent from their ideology.

During the Second World War, Orwell worked at the BBC, and in 1943 (now a prolific journalist and author), he became literary editor of the socialist journal Tribune. His belief that Stalin had betrayed the ideals of the Russian Revolution came out in his short 1945 fable, Animal Farm – which became a huge success. Four years later, his hatred of Stalin's totalitarian state led to his publication of 1984. Though notionally set in the future, it was in fact a grim portrayal of the horrors of Stalinism: his description of Big Brother, for example, is a close description of Stalin, while the 'traitor' Goldstein shares features with Trotsky.

The two books remain as powerful descriptions of how revolutionaries, having torn down the old laws, often create a worse, inhuman nightmare of their own. They provide a strong warning against the concentration of power in a few hands. Against socialism, in fact.

See Dr Butler's new Alternative Manifesto here.