It's a good policy but it's not enough

Around here we welcome good policy whoever suggests it. So, given that this is a good policy we welcome it but would also insist that it doesn't go far enough:

 The Liberal Democrats are looking at the decriminalisation of all drugs for personal use and allowing cannabis to be sold on the open market.

Launching his party's draft election manifesto, Nick Clegg, the deputy prime minister, said the party would consider such options after they were advocated in a policy paper due to be discussed at the Lib Dem conference next month.

The paper said the Lib Dems "will adopt the model used in Portugal, where those who possess drugs for personal use will be diverted into other services". The southern European country decriminalised personal possession of all drugs in 2000.

The document also said the party "welcomes the establishment of a regulated cannabis market in Uruguay, Colorado and Washington state".

That we should end the entirely ludicrous policy of jailing people for ingesting their substance of choice into their own bodies is obvious. Government should no more be regulating this than it should be regulating the ingestion of cake, apples and pan haggerty (not that that stops the usual fruits and nuts from arguing that it should of course).

However, simple decriminalisation is not a sufficient policy: for markets do of course require regulation. No, regulation is not "what government does", it's entirely possible for markets to self-regulate. However, for them to do so it's necessary for there to be (in this case at least) brands.

For one of the great problems with drugs being illegal is that no one ever quite knows what they're taking. That heroin might be cut with icing sugar in which case little harm is done. It might be cut with rat poison in which harm is done: and they might have run out of both and not cut it at all in which case you'll be dead soon after injecting. The same is true of all of the other drugs that people like to take (that they like to take them being, obviously, the reason why they should be allowed to take them, it's their life, their body, not yours). Inconsistent quality.

And we saw this before, with the industrialisation of food back in the 19th century. Yes, from the 1870s on (with some very small baby steps a couple of decades earlier) we did have a series of laws about what could be put into what form of food. Alum into bread, that sort of thing. However, by the time the laws came into being the regulation was already happening. By people branding their products so that people could decide for themselves who they trusted to provide a decent and consistent quality. This was in fact the original purpose of manufacturer branding: not to feed excessive consumption but to identify those feeds that wouldn't kill you. As you would know by still being alive a week after you'd had your last portion of that nourishing beef broth from Rat and Catcher's Patent Manufactory.

That is, to regulate product quality, something we desperately desire in this field of currently illegal drugs, we need one of two things. Either legislation providing a testing system (something that's simply not going to happen) or freedom of supply as well as consumption. For only with that freedom of supply will there be that branding and thus regulation of quality that we need.

Decriminalisation is better than the current situation (and your humble author does live in Portugal and has done throughout the decriminalisation process) but it's not enough, we need to move to full legality. Controlled distribution, fine, taxed, fine, limited, fine, but regulation of quality must be done in some manner. And the best way is for producers to compete on quality just as was done 160 years ago with food.

Do we need state children's services?

Our children need care and protection from abuse.  The question is whether the responsible bureaucracies give value for money, or indeed provide that care and protection at all.  Following each scandal, we are told that no one is to blame: the problem is systemic.  Then we are told that the bureaucracies will work better together in the future.  Then history repeats itself.  Rotherham should be a wake up call. In fact, the problem really is systemic and it needs a systemic solution. It is not a question of money. From 2001 to 2010 English and Welsh councils’ child social care expenditure nearly doubled from £4.7bn to £8.6bn at 2010 prices (while the number of under 15s fell slightly). Would anyone suggest that the quality and extent of childcare has doubled?

Of course the problem is hugely complex and there is no single, simple solution but surely one factor is the excess of bodies paddling in the same swamp: Local Authority children’s services, schools, doctors and hospitals, police and charities such as Barnardo’s and the NSPCC.  Each case is like Gerard Hoffnung’s performance by solo violin and massed conductors.

Serious child abuse of any form is a crime.  Where a teacher, doctor or any social worker believes that a crime may have been committed, or may still be in progress, then that should be reported to the police like any other possible crime. The police should investigate without fear, favour, concerns for being branded racist or other politically correct excuses for doing nothing – or passing the buck to social services.

The bigger question is then whether children’s services are necessary at all.  If the current Local Authority bureaucracies did not exist, what would we put in their place?

Rotherham demands a systemic solution and that in turn suggests we start with a blank page.

Clearly we need the youth justice system and adoption facilities alongside those offered by the voluntary sector (e.g. Barnardo’s).  But Local Authorities’ manifest incompetence in adoption suggests maybe that should be turned over to the voluntary sector and perhaps arrangements for fostering too.

If taxpayer value would be improved, as it is being for schools, by channelling taxpayer funding through the voluntary sector, then why not?  Equally well if something like the existing services can be radically rebuilt to give our children the protection they need, then so be it. But if we just go on tinkering and adding more boxes to tick, more Rotherhams could follow.

So the State schools can't manage to teach the kiddies to read then, eh?

So here's a little fining that adds to the shine of our glorious state. Despite the fact that we spend some 5% of all of the value created in the country on education each year that glorious state school system can't actually manage to teach the kiddies to read:

The fear that 1.5 million British children will reach the age of 11 unable to "read well" by 2025 has prompted the launch on Monday of a new campaign backed by a coalition of businesses, charities, bestselling authors and teaching professionals.

The Read On. Get On campaign is aimed at making a radical improvement in reading standards one of the central goals of politics and education in the next decade. It is being spearheaded by Save the Children, the CBI and the Teach First charity and is unusual in the diversity of its supporters – they include authors JK Rowling and Michael Morpurgo plus a host of book publishers, the Sun newspaper and the Premier League.

One aim is to get the main political parties to include in their 2015 manifestos a commitment to improving the reading of the most disadvantaged.

So let's attempt to draft something for the manifesto of any party that wishes to pick it up shall we?

How about: "Schools that do not manage to teach children to read within a year of that child's entry to that school will be closed and all of the teachers fired"?

Or perhaps "Schools will teach children the value of self-structured play after they have taught them to read"?

Possibly even: "No teacher will receive a teaching qualification until they have demonstrated that they can teach a 5 year old to read"? With the obvious proviso that all of those who currently have a teaching cert must prove this over the next school holiday?

Something needs to be done after all: that education system does get 5% of everything and the State does claim a rightful monopoly on education (sure, they let a few slip away but they still claim that they should be educating everyone). So why on earth are we letting them get away with not performing their most basic duty?

After all, the Church schools of more than a century ago managed it, why can't "highly trained well resourced professionals" manage it? Education systems in other countries, many of which get considerably less money, also manage it.

Could it, possibly, just maybe, be because the current school system just isn't very well run?

Another reason the Home Secretary can go hang

  No one actually does manage to serve as Home Secretary without the innate authoritarianism of the department infecting their views. We could have Peter Tatchell there in office and within months he'd be demanding that we lock 'em all up. But despite our knowing this, despite our understanding that the greatest threat to civil liberty is that very department tasked with overseeing law'n'order, there's still times when it's necessary to point to excesses too great even for them. This is one of them:

Failing crime tsars could be sacked by the Home Secretary under radical plans to rescue the Conservatives’ tarnished law and order policy.

No, absolutely not:

Granting the Home Secretary the power to sack PCCs in extreme circumstances, such as in South York-shire where Mr Wright is clinging to his job despite key figures insisting his position is untenable.

No way.

We simply do not have, and should not have, a system in which one part of the governing apparatus gets to fire an elected official.

It's fine to have basic rules about what might happen if someone were convicted of a crime: an MP has to go if they get sentenced to a year and a day in prison for example (think that's right). But we absolutely cannot have a system whereby one group of politicians, or one officer of the state, can decide that an elected official must go simply because they're a bad'un.

The Home Secretary does not have the power to sack an MP: because we elect MPs. The Home Secretary does not have the power to sack the First Minister of Wales: and it is right and proper that she doesn't.

It might be that we should have PCCs and it might be that we shouldn't. It might be that they should be appointed and it might be that they should be elected. But given that we do have them and that they are elected.....well, it's us that hired them by voting for them and it'll be us that fires them by not voting for them and the Home Secretary can go hang.

Imagine if someone suggested that at some future date a Labour Party Minister should have the ability to sack the duly elected Member of Parliament for Maidenhead? Theresa May would be first upon the barricades protesting this vile intrusion into the democratic process. Which is a useful point for all to remember. When in power never try to claim powers that you really wouldn't want your opponents to have next time around.

Explaining (part of) the UK labour productivity puzzle

Apologies, this is slightly wonkish....one of the puzzles of the current economic recovery is that labour productivity appears to be falling. This just isn't what we would expect to happen at this point in an economic cycle. Yes, we do expect it to fall substantially in an actual recession: employers lay off workers more slowly than output falls, meaning that each worker is producing less (the reason for the slowness of the layoffs being that firing someone now and rehiring in the good times costs money, there's stickiness in what happens here). And productivity we expect to grow strongly in the early stages of a recovery as people sweat that labour they've got as output increases rather than immediately going out to hire more people.

So we can happily explain much of what's happening in that chart using our standard assumptions. Then we get to 2011 and beyond and we're not sure what is happening there. We really don't expect to have falling labour productivity at that point. So what is happening?

We can't tell you exactly and precisely what is happening here: we can't even tell you how important this next point is to what is happening. But we can tell you that this is absolutely one of the things that is going on. Public sector wages are falling relative to private sector ones. That is part of the cause of that fall in labour productivity.

Here we enter a rather Alice in Wonderland area of economic statistics, the measurement of  public sector labour productivity. In the private sector this isn't actually easy but it is at least logical. Stripped to its essence we add up the value of what is produced, look at the number of hours of labour required to produce that and divide one into the other. If there's more production from the same number of hours then labour productivity has risen. Obvious, really.

The important part here being that that "value" is "at market prices". But we cannot use this method for estimating public sector output. Because most of what the public sector does doesn't have market prices: how can we "value" the output of a diversity adviser?

Therefore we don't even attempt to do this. The output of government is defined as what we spend in order to gain this output. Thus public sector labour productivity is equal to, exactly the same as, the wages we spend on public sector labour.

This has, obviously, perverse effects. If we pay a nurse £25 an hour then we record her output as being £25 an hour. If we double her wages to £50 an hour then her output doubles: even as she ignores the same number of patients to do her paperwork. And note what happens to her productivity: it's just doubled just because we are paying her more.

There is no difference whatsoever in the output: but because of the odd way (through necessity) that we measure labour productivity in the public sector that productivity has just doubled.

This effect will also obviously operate in reverse as well. If we cut public sector wages then we will be cutting public sector productivity. It might be that we get the same actual output in terms of government from those newly more lowly paid civil servants. And that would normally be regarded as an increase in labour productivity: we're getting the same output for a smaller input. But this method we use to measure public sector labour productivity means that we actually record the opposite effect: lower public sector wages means we are spending less on government and thus we record that value gained from that labour as having fallen. We record labour productivity as falling when we cut public sector wages.

And what has been happening since 2011? Yes, that's right, there's been a deliberate attempt to reduce, relative to the private sector, public sector wages. As ONS tells us:

The average pay difference in favour of the public sector has narrowed since the year 2010, which in part reflects the restraints on public sector pay over this period

And we can look in more detail here (page 19 of the .pdf on that page). By the (controversial) way that ONS measures public sector pay (controversial because while it tries to measure qualifications, organisation size etc it's not adding in pensions accruals and job security etc.) this was lower than private sector in 2001 or so, grew higher than private through the years of the Brown Terror and now there's a deliberate attempt to manage it down again.

Whether you think those actions of the Brown Years, or the current ones, are justified or not is entirely up to you. But the implication of this for our recorded labour productivity figures is that some portion of that growth in labour productivity over the period 2001 to 2010, and some portion of the fall in it since, is simply the result of the boom and then restraint in public sector pay.

It is, in short, a measurement fault rather than an actual description of anything that is actually happening to labour productivity.

As at the top, we can't tell you how important this is: that would require a great deal more research. We can however tell you that this absolutely is at least a piece of the puzzle. Why is UK labour productivity falling? Simply because we measure public sector labour productivity by the amount we pay them in wages and we're deliberately squeezing those wages currently.

My thanks to the prolific commenter Luis Enriques for sparking this line of thought.

Sir Paul Nurse has finally decided to fire Paul Ehrlich from the Royal Society

We have to say that we're not quite sure whether "fire" is quite the right verb for getting rid of a Fellow of the Royal Society. But given the manner in which Paul Ehrlich has been wrong in every single prediction he's ever made about human beings, population levels, wealth, the economy or the environment it is about time that Britain's leading scientific organisation dispensed with his services. So we can only say Hurrah! to this statement from Sir Paul Nurse, the leader of that most prestigious of Britain's scientific organisations:

Britain's most senior scientist has launched a fierce attack on influential figures who distort scientific evidence to support their own political, religious or ideological agendas.

The president of the Royal Society, Sir Paul Nurse, said scientists must challenge serial offenders from all spheres of life who continually misused science to support their preconceived beliefs.

Speaking ahead of an inaugural speech he will give next week as the incoming president of the British Science Association (BSA), Nurse said it was not enough for scientists to sit on the sidelines and sneer when public figures expounded unscientific nonsense.

Quite right too and we might even add to that Hurrah! with a "Well done Sir Paul" and even an "about time too".

We could mutter something about why on earth was he there in the first place, possibly even grumble about it taking so long to do the right thing, but as the Good Book tells us more joy in heaven over one sinner that repenteth etc. So we should simply rejoice.

Apparently Owen Jones doesn't know what socialism is

This is a slightly strange error for Owen Jones to have to cop to. The One who would lead us all to the sunny uplands of a socialist economy doesn't seem to know what socialism is:

"The urge to punish all bankers has gone far enough," declared a piece in the Financial Times just six months after the crisis began. But if there was ever such an "urge" on the part of government, it was never acted on. In 2012, 2,714 British bankers were paid more than €1m – 12 times as many as any other EU country. When the EU unveiled proposals in 2012 to limit bonuses to either one or two years' salary with the say-so of shareholders, there was fury in the City. Luckily, their friends in high office were there to rescue their bonuses: at the British taxpayers' expense, the Treasury took to the European Court to challenge the proposals. The entire British government demonstrated, not for the first time, that it was one giant lobbying operation for the City of London.

Bankers are employees of banks. The employees of an organisation having an ownership right in the profits of that organisation is a form of socialism. In a capitalist organisation the profits would flow, uninterrupted, to the shareholders, not the employees.

The current structure of banking pay in London, with those bonuses, is more like the profit share at John Lewis, of the divvie to the customers at the Co Op, than it is to anything reminiscent of hard line capitalism.

Socialism, despite what Jones may think, is not just whatever he approves of just as the definition of capitalism or free markets is not the same as whatever we approve of here.

By the way, shouting about how 12 times more bankers got big paychecks in the UK than the rest of the EU is simply evidence of the fact that the European finance (indeed, the largest portion of the international, global) industry is largely based in London and The City. It's no more surprising than finding out that the majority of people paid to make Parma ham are in Northern Italy, the majority of those making Stilton are somewhere north of Watford Gap or that there's a definite shortage of those paid to herd reindeer in lands where olive trees thrive.

Good grief, even Karl Marx managed to get to grips with the implications of Ricardo and comparative advantage. Might be worth Jones giving that a crack.

David Attenborough has decided to nationalise your garden

Isn't this nice of David Attenborough? He has decided that your garden is no longer your property, for you to do as you wish with, he has decided that your garden, the one that you bought, you maintain and you pay the taxes upon, is now to be used as he wishes:

Nature reserves and national parks are not enough to prevent a catastrophic decline in nature, David Attenborough has told politicians, business leaders and conservationists, saying that every space in Britain from suburban gardens to road verges must be used to help wildlife.

Britain’s leading commentator on wildlife called for a radical new approach to conservation which did not bemoan the past but embraced the changes brought by climate change and a rapidly growing human population.

“Where in 1945 it was thought that the way to solve the problem was to create wildlife parks and nature reserves, that is no longer an option. They are not enough now. The whole countryside should be available for wildlife. The suburban garden, roadside verges ... all must be used”.

In other walks of life we call this theft.

If a wealthy octogenarian wishes to improve the life opportunities of hedgehogs then he can donate some portion of his substantial fortune to St. Tiggywinkles. This naked grab to nationalise (or Attenboroughize) our property for his purposes should not and cannot be allowed to stand.

The entire point of private property is that we get to use it and dispose of it as we wish. You do so with yours Sir David and we'll do so with ours.

Do we need Children’s Services?

Of course our children need care and protection from abuse. The question is whether the responsible bureaucracies give value for money, or indeed provide that care and protection at all. Following each scandal, we are told that no one is to blame: the problem is systemic. Then we are told that the bureaucracies will work better together in the future. Then history repeats itself. Rotherham should be a wake up call. In fact, the problem really is systemic and it needs a systems solution. It is not a question of money. From 2001 to 2010 English and Welsh councils’ child social care expenditure nearly doubled from £4.7bn to £8.6bn at 2010 prices. Would anyone suggest that the quality and extent of child care has doubled?

Of course the problem is hugely complex and there is no single, simple solution but at the root is the excess of bodies paddling in the same swamp: Local Authority children’s services, schools, doctors and hospitals, police and charities such as Barnardo’s and the NSPCC. Each case is like Gerard Hoffnung’s performance by solo violin and massed conductors.

Serious child abuse of any form is a crime. Where a teacher, doctor or any social worker believes that a crime may have been committed, or may still be in progress, then that should be reported to the police like any other possible crime. The police should investigate without fear, favour, concerns for being branded racist or other politically correct excuses for doing nothing – or passing the buck to social services.

The bigger question is then whether children’s services are necessary at all. If the current Local Authority bureaucracies did not exist, what would we put in their place?

Rotherham demands a systemic solution and that in turn demands we start with a blank page.

Clearly we need the youth justice system and adoption facilities though those are also offered by the voluntary sector, e.g. Barnardo’s. Given Local Authorities’ manifest incompetence in adoption maybe that should be turned over to the voluntary sector and perhaps arrangements for fostering too. If taxpayer value would be improved, as it is being for schools, by channelling taxpayer funding through the voluntary sector, then why not? Equally well if something like the existing services can be radically rebuilt to give our children the protection they need, then so be it. But if we just go on tinkering and adding more boxes to tick, more Rotherhams will follow.

Yes, the Club of Rome and Limits to Growth is still piffle, why do you ask?

Perhaps because The Guardian seems to be giving the piffle another run for its money:

The 1972 book Limits to Growth, which predicted our civilisation would probably collapse some time this century, has been criticised as doomsday fantasy since it was published. Back in 2002, self-styled environmental expert Bjorn Lomborg consigned it to the “dustbin of history”.

It doesn’t belong there. Research from the University of Melbourne has found the book’s forecasts are accurate, 40 years on. If we continue to track in line with the book’s scenario, expect the early stages of global collapse to start appearing soon.

Yeah, real soon now.

There's two very basic logical and or evidential flaws in the original study, ones that continue into the various updates that Graham Turner (a physicist, just the person you want to be pronouncing on things like resource availability, eh?) has spent the last few years turning out.

Firstly, they talk about the availability of minerals. And they manage to get this entirely wrong. They start by saying that mineral reserves are x. OK, that's cool enough. Then they compare reserves to annual usage, add a bit for growth in usage as the economy grows and that's fine enough too. They also (and here they're better than many that do this exercise) tell us that of course mineral reserves are not all that matters. There's mineral resources out there too, things we know about that we can convert to those reserves. All of this is fine so far.

Except they then assume (yes, this is a specific assumption they make, one they tell us they make) that mineral resources are ten times mineral reserves. So, if we've got mineral reserves of 30 years then we've got resources for 300: then we run out, civilisation collapses and AIEEE! We! All! Die!

This is complete and total piffle. There is absolutely no relationship whatsoever between reserves and resources. Running from memory here but mineral reserves of potassium are of the order of 60 years or so. Resources are 13,000 years' worth. Reserves of aluminium are around 30 years and resources will last us until the heat death of the universe. There are no reserves nor resources of tellurium anywhere on the planet. Yet we still manage to produce the 120 tonnes a year we use quite happily and can continue to do so for hundreds of thousands of years yet.

There simply is no connection at all between these two definitions of minerals available to us, not in the quantities that belong in each category.

Their misunderstanding gets worse too. It costs a lot of money to convert a resource (something we know where it is, what it's made of, that we can process it using current technology at current prices and make a profit doing so) into a reserve (exactly the same except that we have proven all of these points to certain technical and legal standards). There's a nickel mine out there that is currently producing large amounts of nickel. But it's not making a profit: so the ore that it is mining is still a resource, because it's not been proven yet that the new extraction method is profitable. It's just not a reserve yet even though it is producing. And it's taken $4 billion to get to this point too.

So, if converting a resource into a reserve costs these sorts of sums then people only do it when they're about to start actually mining it. Which means that reserves, for obvious economic reasons, tend at any one point to be some 20-50 years' worth of usage. Why spend $4 billion *proving* something now when you're not going to dig it up for half a century?

Now we can see the piffleness of their assumption. If, for economic reasons, reserves are only say 30 years' worth of minerals then assuming that resources are ten times reserves means that whenever and whatever else you do with your calculations then we run out of minerals in 300 years' time and AIEE! We! All! Die!

The basic assumption that the Club of Rome started with means that, inaccurately, the answer to Limits to Growth is always going to be that we run out of minerals in a couple of hundred years. It's simply not true and it's not true because one of their basic assumptions is piffle of the highest, almost Boris-like, pifflyness.

Turner then makes another hilariously piffly assumption. It's detailed here but essentially he says that we cannot substitute for fossil fuels. We'll not be able to use aluminium, or steel, or silicon, instead of coal and oil:

To account for substitutability between resources a simple and robust position has been taken. First, it is assumed here that metals and minerals will not substitute for bulk energy resources such as fossil fuels.

This is piffle of such magnitude that it ascends nonsense and rises to the level of argle bargle. Consider what is a windmill: it's the use of aluminium, rare earths, steel, concrete, as a substitute for fossil fuels. Solar cells are the substitution of silicon and gallium for fossil fuels. Tidal power is the substitution of concrete and turbines for fossil fuels.

In fact, all renewable energy technologies are the substitution of metals and minerals for fossil fuels.

So, he's telling us that we can't have energy because we can't use renewables and he's also telling us that we don't have enough minerals anyway. But both of these statements are wrong. No, not just mistaken, not arguably a bit extreme, not even well meaning errors. They're out and out fabrications stemming from the piffle nature of the original assumptions. Those two, entirely incorrect, assumptions make the Limits to Growth calculations always turn out this way. That in 300 years' time AIEE! We! All! Die!

Start again with the correct, non-piffle, assumptions, that we've plenty of minerals and we can use metals and minerals to substitute for fossil fuels and all the problems fade away. For if we have metals, minerals and energy then we don't all end up dying (AIEE! etc.) in 300 years' time from a lack of energy, metals and minerals, do we?

I've the notes around to do an entire book on this point but I've never actually bothered to sit down and scribble it out. Surely no one actually believes this piffle anyway so why bother refuting it? I might have to reconsider that.....