To correct an historical misapprehension about the Indian economy

This is a common enough complaint. It’s also an odd one:

Politicians are a sorry excuse for historians

So Ben McIntyre, the historian, is going to put the politicians straight:

Take India. The British left much of value, including railways, laws and democracy, as well as a legacy of goodwill that a post-Brexit Britain would do well to cultivate. But the Raj also oversaw the destruction of Indian cultures, some appalling massacres and economic exploitation: in the 18th century India’s share of the world’s economy was equal to Europe’s; after two centuries of British rule it had plunged sixfold.

That claim about the Indian economy being a feature of a recent book by Shashi Tharoor MP. And one that does need correction by an historian, something we don’t get in The Times.

For of course the Indian economy did grow, substantially, over the period of Empire.

From Angus Maddison’s figures, the usual source, GDP per capita went from around $1,100 when Clive turned up to $1500 in 1945. And to about $1500 by 1994 too. Not a great increase in the average living standard of the average wallah to be sure.

The population of India moving from Clive’s 200 million or so to Nehru’s 400 million or so at Partition. And vastly higher in 1994 for we should add the population of Bangladesh, Pakistan, to India’s near billion.

400 million living at the same standard as 200 million is an economy which has doubled in size. an a billion doing so is a further increase of 2.5 x isn’t it.

That is, he Indian economy grew under Empire. Just as it did aterwards. The difficulty being that it was entirely Malthusian growth, more people at the same standard of living, not increasing standards of living.

You know, like everywhere grew, like everywhere does, without an industrial revolution and the accompanying (causative?) capitalism and free-ish markets.

The real point here being that what happened in India - economically, not politically - between Clive and 1947, between 1947 and 1994, is by historical and global standards just normal. The abnormality wasn’t there at all, it was that Britain, then other North Atlantic economies and now, finally, near everyone else, broke free from that normality.

The nutshell here being not what did happen to India but what didn’t?

Venezuela Campaign: reading into the schools crisis

Most Venezuelan schools are now empty of children and teachers, in a major crisis for the poverty-stricken country.

Former President Hugo Chavez used to boast that he was improving the education system, but his policies have had the opposite effect. The almost total collapse of the Venezuelan economy, caused by nationalisations, expropriations, price and currency controls, hyperinflation, mismanagement of the oil industry and abandonment of the rule of law, has ravaged the education sector.

The schools have been getting worse year by year. By 2016 about a quarter of Venezuelan school-age children were not enrolled. A study by Venezuelan universities at the beginning of 2018 revealed that out of Venezuela’s 8 million schoolchildren, some 3 million were absent. Fe y Alegría, a movement that provides free education in over 170 schools across Venezuela, reported a drop in student numbers of over 50% compared to 2017. As the economic crisis deepens, education is being affected more and more.

When the school term started this September, very few children came to school. In the poor community of Caucagua some 75 kilometres from Caracas, only three students arrived at the Miguel Acevedo public primary school out of 65 students registered. In the first week of classes, the turnout rate across the country was only 15-20%, the lowest in the previous century.

There are a number of inter-related factors in the collapse of the school system. One is the absence of many teachers, who are not being paid, or receiving enough to live on. “With my last pay check, I was able to buy a kilo of meat and a kilo of sugar,” said Roxi Gallardo, a 35-year-old teacher in the city of San Cristobal who, like many other teachers, is looking to leave Venezuela. The Venezuelan Association of Catholic Education reports that 3,500 of its teachers have quit their jobs, either to leave the country or to engage in informal work.

Another factor is that due to hyperinflation, basic items such as books, pencils and school uniforms are completely unaffordable. More importantly, many children came to school to receive free school meals. However, these are now rarely provided, and even then they are too small and lacking in protein to bother with. As the public transport system has collapsed, getting to school is much more difficult for children and teachers alike. Walking a considerable distance to school is difficult for children who are already under-nourished.

Children have been reported to become dizzy or faint because of lack of food. How can they learn when they cannot eat? “We were singing the national anthem and I felt nauseous. I’d only eaten an arepa (a local cornbread) that day, and I fainted,” reported Juliani Caceres, an 11-year-old student in Tachira state.

“Hungry people aren’t able to teach or learn,” said trade union leader Victor Venegas, president of the Barinas chapter of the national Federation of Education Workers. “We’re going to end up with a nation of illiterates.”

That Chavez made any improvements to education is largely a myth. The adult literacy rate was already 93% when he came to power, after decades of work by previous governments. Chavez sought to politicise the school system by turning it into a vehicle for his propaganda. Even Maths textbooks were turned into propaganda tools. Today’s absent schoolchildren will be spared the indoctrination, but the downside is that they are not being educated at all. Despite having the largest oil reserves in the world and having once been South America’s richest country, literacy rates risk a return to levels last seen in the 1920s.

More information on the Venezuela Campaign can be found on their website

To correct a commonplace error about Facebook

Not to pick upon one specific writer nor outlet here, but this is simply untrue:

Portal, which will go on sale next month in the US, is supposedly designed to make video chatting hands-free and immersive. A smart camera follows you around and ensures you stay in view while the system minimises background noise and enhances the voice of whoever is talking. “It’s like having your own cinematographer and sound crew direct your personal video calls,” Facebook says. It doesn’t mention the fact that said cinematographer has a history of flogging your personal information to all and sundry.

The selling data part that is. That’s not what Facebook - nor Google and so on - do at all. Certainly, they gain revenue from our attention. But that is a rather different matter:

Though Facebook doesn’t directly sell your information, it does “let businesses and organizations connect with the people who are most likely to be interested in their products and services,” as its ad education portal explained.

What they sell is advertising. That personal information not being sold to even sundry, let alone all. It being used instead to allow people to decide who to advertise to. Approaching any other media outlet - any one at all - will gain you a set of demographics of their customer base. So that you can decide whether you’d like to advertise to these people.

This is why Parturition Monthly will have piccies of babies and ads for nappies, why Mid Life Crisis Weekly articles about sports cars and ads for virility enhancers - where the two differ that is. Facebook et al are simply able to distinguish rather better among their users instead of delivering a total and undifferentiated bundle.

The importance of this is that it makes one set of demands out there ludicrous. That it’s our data, that the data is valuable and we should be paid for it.

At one level it’s already silly of course. Facebook makes perhaps - in revenue, not profit - $100 a year from a rich world user. 30 US cents a day. So, any system of paying us for that, well, how much is the accounting and distribution system for that sort of sum going to cost? As if any of us really care about that sort of sum anyway.

It’s also true that the data itself is valueless on its own. It’s the agglomeration of it, the slicing and dicing of it, which adds the value. That being exactly what Facebook is doing and it seems reasonable enough that the people adding the value get to keep it.

But now look again at the demand being made about that they pay us. What is sold is the ability to advertise to us. So, the demand is that we should be paid for being shown advertisements. And however tempting that is when shown yet another smiling, dry, baby or virility enhancer zooming along a mountain road we do all recognise that’s not quite how economic reality works out, don’t we?

In simpler terms the internet isn’t selling our data therefore there’s no money we can insist on having back from the sale of our data, is there?

Yes, yes, but how much?

We really do need to remind ourselves of Paracelsus - the poison is the dose:

'Huge concentrations' of toxins found in Grenfell soil, study finds

Exclusive: Public Health England has not acted on early findings of report warning of potential carcinogens

The question is the meaning of that word “huge” isn’t it?

Early results of the study by Prof Anna Stec prompted her to privately urge Public Health England (PHE), the Department of Health, the police and Kensington and Chelsea council to organise a range of tests to ensure any potential health risks can be properly assessed.

In briefings to senior health agency staff, Stec said she had found “huge concentrations” of potential carcinogens in the dust and soil around the tower in west London, and in burned debris that had fallen from the tower.

High levels of hydrogen cyanide were also present in the soil she analysed.

Well, what’s “high”?

HCN, prussic acid, hydrogen cyanide, being something that is produced in fires. It’s in cigarette smoke, car exhaust and absolutely every house or structural fire residue. Also almonds.

As a gas floating around it’s pretty dangerous. But the reason it wasn’t used for long as a WWI gas is because it’s rather light. It dissipates up into the atmosphere and with a boiling point just above room temperature it doesn’t lie resting around in the soil all that much either.

Sure, we’d like to know that it’s there. But the important thing we want to know is “how much?” For we know, absolutely, that there’s going to be some there just because humans have been burning things in London for some time now. We’re also interested in whatever additional amount Grenfell might have led to. But we are only interested as an intellectual exercise.

Without that dose information we’ve nothing but scaremongering on the back of that tragedy, do we?

Surely these people have actually been to Europe?

A line that rather surprised us:

Some people will victim-blame here, and say that these people should get off their lazy arses and cycle to the shops. But there are deep, systemic reasons for these problems. Travel to parts of Europe and you see the reliance of other cultures on the square – a place to meet, converse and for children to play, but also often containing a greengrocer and a bakery and a butcher. This side of Britain feels lost to the big supermarkets, our high streets rendered redundant by out-of-town shopping centres and internet giants. There could be radical architectural solutions, but with government investment in housing dispiriting at best, these are unlikely to take place any time soon.

That idea that people sell cauliflowers on the town square. Perhaps in a small village, where the square is the town. But not in anything of any size - the property is far too valuable to be trying to sell something as low margin as vegetables. Town squares are for the jeweller, the fancy fashion shop, the restaurants and cafes.

It’s as if these people haven’t actually been there to Europe despite that budget airlines revolution.

Such trivia aside there’s a deeper logical error:

Those of us who have ever had a “cornershop dinner” will know the sort of options available in food deserts: the only shops for miles around sell very little fresh food, so you’re left with a choice between meals such as dried instant noodles or pasta, tinned Scotch broth, and if you’re lucky enough to have a freezer cabinet, pizza. These small shops are also often very expensive, too, but in the trade-off between spending money on transport to the nearest big Tesco for broccoli or a filling, carb-heavy meal, it’s no wonder people opt for the latter.

What they’re calling food deserts now the rest of us would call the 1970s. Britain not exactly being well known as a mecca of fine foodstuffs easily available back then. It also wasn’t a nest of obesity back then either so there’s something else going on, isn’t there?

It might well be true that the future arrives unevenly over geographic areas. But that the vast majority of the country has had it, some small part remaining mired in the past, isn’t the cause of obesity.

A supposition most unlikely to be true about food prices

The Social Market Foundation tells us that poor people in Britain are obese because food for them in “food deserts” is so expensive.

More than a million people in the UK live in “food deserts” – neighbourhoods where poverty, poor public transport and a dearth of big supermarkets severely limit access to affordable fresh fruit and vegetables, a study has claimed.

Nearly one in 10 of the country’s most economically deprived areas are food deserts, it says – typically large out-of-town housing estates and deprived inner-city wards served by a handful of small, relatively expensive corner shops.

Public health experts are concerned that these neighbourhoods – which are often also “food swamps” with high densities of fast-food outlets – are helping to fuel a rise in diet-related conditions such as obesity and diabetes, as well as driving food insecurity.

As the report itself says:

Food is a key component of household budgets in the UK. Across the country, food accounts for about one in every ten pounds spent by households. For households in the bottom income decile (the poorest 10%), food accounts for about 15% of all expenditure and takes up about a fifth of household disposable income.

Just under a fifth (17%) of households surveyed as part of this research said groceries put a strain on their finances. For individuals with a household income of £10,000 or less, about two fifths (39%) said groceries were a strain on finances, as did about a quarter (23%) of those with a household income of between £10,000 and £20,000.

A strain on finances? Yes, obviously so, this is the definition of being poor, where everything is a strain upon finances.

But this idea that the expense of food - healthy food if you desire - is causing the obesity epidemic strikes us as most unlikely. For the remarkable thing about food in Britain today is how amazingly cheap it is by any historical or global standard:

Britons spend an average of 8% of their total household expenditure on food to eat at home. This is less than any other country apart from the US and Singapore, according to data from market research firm Euromonitor.

Food spending varies considerably around the world. Greeks spend 16%, while Peruvians spend 26%. Nigerians spend the most on food in relative terms - 59% of their household budget.

The full spreadsheet can be found here. That 15% of income for those poorer households puts them among Italy, Slovenia and Brazil as a portion spent upon food. Those three nations all suffering an outbreak of obesity? And, of course, that 15% is vastly lower than anyone in this country was spending a century ago when we were all worried about the malnutrition based stunting of the working classes.

We’re simply not willing to believe in this supposition that obesity is caused by the great expense of food in this country.

Madness behind the method in racial pay gap stats

Madness behind the method in racial pay gap stats

Yesterday the front pages were filled with the news that the Prime Minister was going force all companies with more than 250 employees to disclose how many of each census ethnicity they have, and what different ethnicities get paid at the median.

This builds on the gender pay gap stats that Kate Andrews at the Institute of Economic Affairs has so roundly rebutted before, but companies nonetheless have to report. A totally useless set of statistics used to bash businesses and one which does not solve the issues it purports to.

Leaving aside the fact that there is nothing to force employees to disclose their race to their employer, or that there is something weirdly sinister the government demand companies do so, I’m convinced this crude measure will add yet another unnecessary burden to business and do nothing but sow division without reason.

As Tim Worstall, a Senior Fellow here at the Adam Smith Institute, said in a letter to the Times today: these figures are “misleading because the age structure of the population differs by formally defined race. From the 2011 census, the whole population median age was 39, that of the white population 41, Asian, black and other, 30, 30 and 29 respectively, and mixed 18. Pay rises with age, as promotions to better-paid positions are earned through experience.”

To put it bluntly, in the United Kingdom we’ve seen a large change demographic change in the past 50 to 60 years. In the UK, you’re like to earn the most between the ages of 40 to 54. If the white population’s median age is at that point and at peak earning potential at present, while other groups are younger and so behind in peak income, then any figure that does not control for this but is used to highlight a supposed ‘gap’ will be misleading at best, or otherwise downright dishonest.

Ethnic pay gap reporting will be a misleading disaster

The Prime Minister has just announced that all companies and employers will be required to report the ethnic pay gap in their workforces. This is going to be a horribly misleading disaster - worse than the reporting on the gender pay gap has been.

All large employers will be forced to publish their "ethnicity pay gap" to help create a "fairer and more diverse workforce" under Government plans, the Prime Minister has announced.

Theresa May has launched a consultation on a new legal requirement for both public and private sector employers to publish the difference in pay between white and ethnic minority workers.

Quite apart from anything else the age profiles of the different ethnic groups are quite different:

This data uses the ‘median’ for working out the average age for each ethnic group. The median is the middle point of a range of numbers that are arranged in order of size from lowest to highest.

This data shows that:

at the time of the 2011 Census, the median age of the population of England and Wales was 39 years

the White ethnic group had the highest median age (at 41 years), and the Mixed group had the lowest (at 18 years)

the Asian, Black and Other ethnic groups had similar median ages at 30, 30, and 29 years respectively

As we all should know pay generally rises during a working life time. Older people get higher wages that is. Then we should add that confounding factor we found in the gender pay gap numbers - it tends to be the older people in the top and very well paid jobs. As some portion drop out of the workforce, as others dial back efforts to be part of the rat race, that average pay of women drops. Not because any one woman is being paid differently to any one man, but because of that difference in career progression - presumably freely chosen.

We found that at least one editor of a national newspaper wasn’t even willing to consider this explanation, let alone give it credence.

With the ethnic pay gap it will all be even more misleading. We’ve that same point, older people tend to be paid more, are further up the career ladder not through discrimination but experience. And yet the numbers will be presented raw, without correction fort this obvious point.

A population on average a decade younger than another will be earning lower wages. Ought to be earning lower wages. And yet that they are earning lower wages will become accepted evidence of gross discrimination.

The Prime Minster has just made a serious error here. She’s insisting upon the publication of figures that will only ever be used as a stick for her back. When all they actually will show is that mass immigration is a relatively recent phenomenon, which is why the ethnic age profiles are so different.

We’re reminded of Sir John Cowperthwaite. and the GDP figures in Hong Kong. Sometimes collecting the statistics is a bad idea because some damn fool will only do something with them.

We hate the smell of special interests in the morning

The agonising over the place of proper journalism in this digital age is, to us, the trashing of a superceded technology against that dying of the light. There’s nothing uncommon about this action of course. The question is whether we give in as with the man with the red flag in front of the motor car or not. Or more, with the demand that the people who make steering wheels must compensate those who make buggy whips. Both are means of directing transport, one is the new, the other the old, technology. And that is the demand, that the digital companies should pay for the old journalism ones.

This is a demand that should be rejected:

The head of a Government inquiry into the funding of high-quality journalism has travelled to the United States to gather evidence from tech giants and major newspapers.

Dame Frances Cairncross, an economist and former journalist, is this week on a fact-finding mission to both coasts as she prepares a report on financial pressures faced by publishers and newsrooms as a result of the online revolution.

An obvious point to be made. If the public desires or demands high quality journalism then some method will be found of getting the public to pay for high quality journalism. If the desire to pay doesn’t exist - in any form, through advertising, time, donations, subscriptions and the rest - then there isn’t that demand for that product, is there?

In near every other area of life we do just shrug and accept that some purveyors of whatever go out of business as new methods of sating desires arrive. The political problem we’ve got with this “high quality” journalism is that those who currently provide it, well, they currently dominate that public agenda precisely because they are the current suppliers. And boy aren’t they worried about that end to a comfortable life.

We should - must - reject these demands for subsidy. The basic contention is that the value received by the reading public from this high quality journalism is less than the cost of producing it. That’s why a new source of revenue must be found. That is, the entire process is value subtracting, it makes us poorer. So, obviously enough, we should stop doing it.

If it does add value then people will pay for it. So there’s no problem, is there?

We would point out that several of us produce incomes by doing this freelance journalism stuff. There’s no shortage of outlets, of places to say something. It costs spit to set up your own these days too. Thus we cannot say that there’s a shortage of supply of the thing being complained about. Rather, a threat to the current structures of doing that supply is what is really being worried about. And why on earth should we worry about who is supplying as long as there is supply sufficient for the demand?

Freedom's Fighters with blog maestro Tim Worstall

This time next week (Wednesday 17th October 6-7pm) we are delighted to host the next in our series of Freedom’s Fighters with our blog maestro and Senior Fellow Tim Worstall. The sessions are informal and exclusive and are opportunities to host discussions with key individuals promoting liberty within the United Kingdom.

Tim is a Senior Fellow at the Adam Smith Institute and has written for a multitude of publishers, including The Guardian, CapX, The Times and The Wall Street Journal. He writes on the subjects of environmentalism and economics, particularly corporate tax; in 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics. He currently runs Continental Telegraph.

We would be delighted to see dedicated and loyal blog readers at the event. Freedom’s Fighters are one of our smaller events, with just 24 guests. I know a great many of you will be interested in attending and as a blog reader we’d be delighted if you’d apply to join us. We would request you to do so by emailing events@adamsmith.org.

If you aren’t able to attend we’ll be filming the event and publishing these on our facebook and youtube pages. You can find our last one, with political strategist and former Vote Leave Chief Executive Matthew Elliot below (and links here to ours talks with Daniel Hannan MEP, Paul Staines from Guido Fawkes, economist Ruth Lea, and the IEA’s Mark Littlewood).