Rather missing the point about public service broadcasters

Of all the puzzling things to demand:

An influential cross-party group of MPs and peers has called on the government to guarantee parliamentary time to create new laws to ensure shows made by the BBC and other public service broadcasters (PSBs) do not get buried on the streaming services of big tech and pay-TV giants such as Netflix and Sky.

In a rare alliance across the political spectrum, nine MPs and peers – including deputy Labour leader Tom Watson, Liberal Democrat baroness Jane Bonham-Carter and the Scottish National Party’s Hannah Bardell – have written to the culture secretary, Jeremy Wright, arguing that if the government is willing to stand up to the tech giants over tax then it also needs to act to protect Britain’s public service broadcasters.

“The digital revolution has brought greater flexibility and choice but if we are not careful the enormous power of the global internet giants is going to sweep traditional PSB television away,” said the letter, timed to mark the joint birthday of the BBC and Channel 4.

The purpose of public sector broadcasting is to produce and provide what the market unadorned will not. That such production is being “swamped” by that market unadorned production shows that we don’t in fact need that public service broadcasting, doesn’t it? People are already able to gain their fill of uplifting documentary and woke agitprop.

Thus this claim for special protections - hmm, what’s that? You say this is ageing bureaucracies, or series of them, demanding privilege, protection, from the upstart whippersnappers who risk showing they’re now irrelevant? Oh, well, that’s fine then, that all makes sense.

Carry on.

Freedom's Fighters with Tim Worstall

Every month the Adam Smith Institute hails one of those who have fought the good fight for freedom over the decades. In this month's Dr Madsen Pirie interviewed our blog maestro Tim Worstall, who visited the UK for the occasion from his rather sunnier climes in Portugal.

Give it a watch now 👇

This is quite true and shouldn't this be a possible choice?

It’s possible to make he Lake Wobegon point here, that we can’t all be at or above the average. Rather more seriously, perhaps this is just the choice that we want to make?

The NIESR’s analysis published on Wednesday suggests the UK has usually opted to spend less on public services and bring in less from taxation as a proportion of GDP compared to other major advanced economies.

It does depend upon which major economies we compare ourselves to. We process very much more of everything through government than the United States does, less than say Sweden - although insisting that, with their populations of the order of the size of London, the Nordics are major economies is a bit rich.

To which the correct response is so what? We are indeed n a democracy, we the people get to choose how we;d like things to be run. And our choice seems to be that we run less of everything through government than some other places.

Quite why, well, one place to go look would be the quality of those who claim to run government for us but that would just be rude, wouldn’t it? Perhaps instead we’ve some cultural attachment to the idea that we should run more of our own lives, they less of our lives. But whatever the reason, the observation is indeed true.

The British have never supported nor been happy with the sort of tax rates, percentages of government in GDP, that applies in some other places. Well, this is simply a fact about the British, isn’t it. A constraint to be worked within rather than something to be overcome perhaps.

Medical cannabis is now legal, roll on recreational legalisation

Following relentless campaigning by countless individuals and organisations from across the political spectrum, medical cannabis has today become legal in the UK with overwhelming public backing. It will take time to ensure adequate patient access but it’s heartening that the traditionally prohibitionist Conservative Party is open to change: spurred on by the bravery of the Home Secretary.

The tide is turning on this issue around the world, with solid evidence that medical cannabis reform not only helps hundreds of thousands of potential patients: it also disrupts drug trafficking and reduces opioid and heroin overdose deaths. Today we join Canada, 31 US states, Australia, Israel, and many European countries in taking this important step.

The same shift is happening with legalisation of cannabis for recreational use. Yesterday saw Mexico’s Supreme Court rule that an absolute ban on recreational marijuana use is unconstitutional; now Mexico’s lawmakers will have to go back to the drawing board to devise a sensible system of regulation. Last month, Canada became the first G7 country to legalise and regulate recreational cannabis, following in the wake of nine U.S. states and Uruguay. There’s popular appetite for change here: a Populus poll released this week found that the general public is now almost twice as likely to support the legalisation of cannabis in the UK than they are to oppose it. Support is strongest among young people, who are some of the biggest victims of criminalisation.

In the coming months and years, we’ll be at the forefront of ensuring the momentum towards more sensible drug policy continues. From packed rooms at party conferences and university talks, to newspaper op-eds and in-depth research papers, we’ve been fighting the good fight for decades. We’re confident that recreational cannabis legalisation will be a reality in the UK. Let’s make it sooner rather than later.

Madsen Moment — Housing

In this week's Madsen Moment it's all about housing. Dr Pirie looks at our new Flexible Right to Buy policy, at how building on the green belt can end the housing crisis, and at whether we should experiment with scrapping the Town & Country Planning Act altogether.

A new record for ending the housing crisis?

Within twelve months, the core of one out of two main proposals in our August 2017 YIMBY report with the Adam Smith Institute is in force as national planning policy. That may be a record for a first report by an author.

The YIMBY campaign found several villages who wanted to have affordable housing or cottages on a piece of land. But permission was blocked by a higher authority because the land was technically green belt.

That made no sense. We said local people should be free to approve new homes if they want to.

Clearly the government agreed: the new National Planning Policy Framework now says exactly that. A parish or neighbourhood forum can approve new homes on a piece of green belt, so long as the layout is open, not creating a new town. It’s called a ‘neighbourhood development order’ in paragraph 146(f).

We already know at least one village working to use that rule. We’re looking forward to meeting people in their new homes when they’ve been built. It’s exciting to have achieved change so quickly.

It turns out that if you find popular reforms, it isn’t hard to persuade politicians to adopt them. Who could ever have guessed?

We’re now pushing for the second idea, Better Streets. We say residents of a single street should be able to vote to set a design code and give themselves permission to extend or replace existing homes – with rules to protect the neighbours.

That would add more homes, make housing more affordable overall and make those homeowners better off, while creating more attractive, more walkable places with more people to support local shops and pubs.

Most people love it, and we still haven’t found anyone who strongly objects. People are mainly affected by building work on their own street. Why not let them approve it if they want to? That could add millions more homes over time, while boosting wages, fairness and growth.

How soon will it be adopted? Encouragingly, the new consultation on building upwards launched with the Budget cited our report.

The biggest obstacle to fixing housing is politics. That’s why we’re promoting popular solutions that get support from local communities.

John Myers is co-founder of London YIMBY and the national YIMBY Alliance, grassroots campaigns to end the housing crisis with the support of local people.

It's not capitalism that fails from its own internal contradictions

So, what does happen to the euro if Italy continues it’s decades long no economic growth, something rather caused by the inability to have the correct monetary policy for that economy? As with the Spanish and Irish property booms, the desperate slumps there and elsewhere when monetary policy was again inappropriate for the varied economies?

ECB heading for 'Titanic iceberg' as Italy crumbles and eurozone slows to five-year low

That might be a little dramatic as a mental image but there’s an underlying truth there. As Herb Stein pointed out, things that can’t go on forever won’t.

The euro is, by definition, the imposition of a single monetary policy upon the varied economies of the eurozone. We can mutter about benefits of such but there are also costs to it. This is what the subject of optimal currency areas is all about. That the peoples of one village use the same currency to transact has obvious benefits, subjecting the entire world to one monetary policy has equally obvious costs. Where’s the sweet spot inbetween?

Obviously, we can all argue about where the euro is on that spectrum. But we’re interested in a rather deeper point.

Marx told us that capitalism would fail because of its own internal contradictions. We’re, to be mild, unconvinced of this. But we do agree that many socio-economic systems do indeed fail for exactly this reason or reasons. The Latin Monetary Union perhaps, the gold standard if you like, the Soviet ruble post there being no Soviet nor Union and so on.

The unifying factor behind those failed systems appearing to us to be when constraints are placed upon that capitalism and free markets. That being what fails, those internal contradictions. When the law, or “the system” imposes too binding a set of constraints upon economic activity then it will be the law, or the system, that eventually breaks.

That is, it’s not capitalism that falls over, it’s those attempts to constrain it too rigidly.

We’d hesitate to insist that this is a law or anything, just an observation. Human behaviour will out and if the State or bureaucratic constraints upon it cannot go on for ever then they won’t.

Blaming capitalism for the failures of the state

They say that an economist is someone who has had human beings described to them but has never actually met one. In which case an Oxbridge economist must be someone who has had capitalism described to them but has never actually experienced it. One such is Oxford economist Sir Paul Collier, who in a recent book aims to instruct us on The Future Of Capitalism. It’s hard to figure why someone who’s never worked outside the state sector is qualified to pontificate on that subject. But having kissed the ring of Oxford, one is apparently entitled to deliver ex cathedra statements on any subject.

Collier has plenty of complaints about capitalism—or about what he thinks capitalism is—that should really be laid at the feet of state interventionism, of the sort that he favours. To him, 1945-70 was a ‘glorious period’ with the creation of the NHS, state welfare, etc., etc. No mention of the strikes, the crippling losses and dismal public service in the nationalised industries, the inflation, the dependency, the taxes, or the economic failure that threw us sobbing into the arms of the European Community.

To him, again, Milton Friedman’s rabid free-marketism, insisting that firms exist only to make profits, eroded the civic responsibility of companies, robbing managers of a social purpose and making them focused on short-term, selfish incentives rather than doing good; and globalisation has made businesses rootless, reducing their civic responsibility even more. No mention again of all the corporate law that drained power from business owners and, perversely, put it into the hands of executives—the ‘principal agent’ problem. No mention of the fact that these days, most businesses are small and SMEs deliver create most of our national product and employ most of our workers. They have a keen sense of responsibility to their community, suppliers, employees and customers. What gets in the way of that is state regulations telling them how to run their businesses and state taxes eating into their ability to generate wealth for all those groups.

London, thinks the prof, absorb too much of the national product; they should be taxed more so that capital is shifted to the regions. One reason for this spatial disparity, he suggests, is rent-seeking by the City and big business. No mention that the bigger the state has grown, the more opportunities for rent-seeking there are. No mention of the fact that the state itself is a centralising force—only praise for ‘state investment’. And that government towns, like London, never suffer economic downturns, but just grow and grow—at taxpayers’ expense.

As for benefits, Collier is shocked that the good old universal benefits created in the ‘glorious’ postwar period have become replaced by targeted benefits, and the idea of whether people deserve (and can benefit from) state help or not has been lost. No mention of the point that while Beveridge had a clear and quite liberal view on such subjects, the politicians who turned his blueprint into deliverable laws did not; nor that state welfare utterly eclipsed charities and friendly societies, working class welfare systems that were highly focused on delivering help to those who really needed it, rather than those who ticked bureaucratic boxes.

Yes, there are a lot of unjustifiable inequalities and unfairnesses around. But is more state intervention and ‘maternalism’ the answer? No, sadly it has been the cause.

Declare victory and yet once more into the breach dear friends

Perhaps a decade ago we started making the point that if you’d like the low paid to have more money then just stop taxing them so damn much. An example from the middle of the campaign of insistence here.

The background was the beginning of the living wage campaign. The idea that the minimum wage - something we shouldn’t have anyway but - didn’t produce the desired lifestyle, therefore everyone should pay more than this. We kept pointing out, along with annual calculations to show it, that if the minimum wage were not taxed then that post-tax income would be the same as that living wage taxed under the current system. So, to achieve that living wage just stop taxing the minimum wage. The personal allowance should be the full year, full time, minimum wage.

At which point, yesterday’s Budget:

The 20% tax band currently starts on earnings above £11,850, and when that rises to £12,500 next year someone earning around that mark will be better of by £130.

Another way to put the same point is that the personal allowance will rise to £12,500. Which is how we can date this pledge. For back when we were shouting about this - and we can track who we convinced, how the proposal moved through policy making committees and into manifestos - that full year full time minimum wage was some £12,500 a year.

Thus victory, do the Happy Dance etc.

Except, of course, time has moved on, the value of money declined as it does. The aim was not that the personal allowance be raised to £12,500, rather the moral point that if there’s some irreducible minimum that someone must be paid for their labour then that amount should not be taxed. If the minimum wage has risen then that personal allowance should also.

We’d also add that national insurance allowances should be raised to the same amount.

So, yes, victory, Happy Dance, but also once more into the breach. It is righteous and just that we wish the poor to have more. The simplest method of which is to stop taxing them so damn much. The income tax and national insurance allowances should be set at the full year, full time, minimum wage. Until they are then we’re over-taxing those low paid. And why the hell do we want to do that?

Some people are just never satisfied, are they?

We’re not wholly convinced by the original pollution complaint here. Our opinion - and it is merely opinion - is that the claims of atmospheric damage done by high sulphur fuels in shipping are rather over cooked. But, you know, the world disagrees, so there must be less sulphur emitted by ships at sea. This could mean using expensive low sulphur fuel or it could mean the less expensive process of scrubbing the exhaust of the sulphur.

We tend to think that getting rid of pollution at lower cost is better than getting rid of it at higher. Apparently some disagree:

Thousands of ships are set to install “emissions cheat” systems that pump pollutants into the ocean to beat new international rules banning dirty fuel.

The global shipping fleet is rushing to meet a 2020 deadline imposed by the International Maritime Organization (IMO) to reduce air pollution by forcing vessels to use cleaner fuel with a lower sulphur content of 0.5%, compared with 3.5% as currently used.

The move comes after growing concerns about the health impacts of shipping emissions. A report in Nature this year said 400,000 premature deaths a year are caused by emissions from dirty shipping fuel, which also account for 14 million childhood asthma cases per year.

But the move to cleaner fuel could see harmful pollutants increasingly dumped at sea.

Assume that we agree with the initial effects - we’d certainly like to miss out on 14 million cases of childhood asthma. And at the lowest cost.

The complaint is that they’ll not put the sulphur into the air by the clever trick of putting it into the water instead. Fine by us. But not, as is apparent here, by them.

Quite why we’re not sure. The Atlantic Ocean apparently contains some 7 billion tonnes of just the one form of sulphur. In general the oceans are 0.1% sulphur. The volcanoes of the Mid-Atlantic Ridge pump out enough sulphur that there’s an entire ecosystem that lives on the stuff. The amount that ships don’t put into the air isn’t going to make the blindest bit of difference to these numbers.

Either some people are just never satisfied or, more realistically, some people want to insist that no one may do anything, ever.