Another attempt at rampant illogic over health inequality

This does not bode well for the standards by which the NHS, or any other part of the health care system for that matter, might be managed. For those who would run it seem capable of the most glaring illogic. We have further findings, perhaps mining of the figures, over inequality of lifespan over the economic spectrum: 

The health department data shows that in key areas the gap has widened since 2010 after narrowing over the previous decade. Seven years ago life expectancy for men in England’s most deprived areas was 9.1 years less than for those in the richest areas. By 2015 the figure had risen to 9.2 years. The equivalent gap for poor women also grew over that time, from 6.8 years to 7.1 years. The stark statistics are contained in the health department’s annual report, published this summer.

They have been seized on by David Buck, a senior fellow at the King’s Fund health thinktank and a leading expert in public health and health inequalities. Buck told the Observer: “These are shocking figures. It’s shocking that we live in a developed country where inequalities in health are so wide and are getting worse.

Buck's findings, in detail, are here. Note what is being talked about, the figure being highlighted. It's life expectancy at birth. And no one at all is in fact measuring how long the lives of those born today will be. What is being measured is what's the average age of death of those born in or around 1940? OK, we can widen that time a bit if we like, say 1930 to 1950. Because this is indeed how we do it. We look at the average age of death of the generation just died and then say we think that's what the lifespan at the generation just being born is going to be.

It's important that we do understand how this statistic is being produced - just like we need to understand the detail of every statistic to understand what it is actually telling us. 

Some other information Buck points us to but doesn't particularly highlight might be useful here:

Looking at all the evidence, it does appear that there has been a flattening off of the fall in mortality rates since 2011, which is not consistent with the trend in falling rates seen in the 10 years up to 2011.

But there is no evidence to suggest that the long term downward trend has reversed (in other words that rates are increasing).

Well, which do we want to worry about, absolute levels or inequality? Further:

The increase in mortality rates in 2015 was not limited to England alone. It was seen across Europe on a comparable scale. The six biggest countries in the European Union (France, Germany, Italy, Poland, Spain, UK), all saw a fall in their life expectancies for both sexes.

Compared with 2014, in 2015 female life expectancy at birth fell in 23 of the 28 countries in the EU and male life expectancy at birth fell in 16 EU countries.

Something obviously happened in that single year of 2015 and it most certainly wasn't related to any domestic UK policy, was it? And do note again that this doesn't in fact tell us anything at all about expected lifespans of those born this year, it tells us something about who died in that year. One suspected culprit being a particularly nasty 'flu epidemic. And we're really most unsure that one of those is going to happen in 2094, aren't we?

We've got to understand a statistic and its composition before we try to make decisions based upon it. And given what's happening here that doesn't bode well for attempts to manage matters, does it?  

Well done, they've missed the largest working change of the past century

We would not normally look to Julie Bindell quoting Bea Campbell for enlightenment but this is a remarkable glossing over of reality even by their standards:

When it comes to household chores, women’s time cleaning up children’s’ poo and vomit is not so much undervalued as dismissed altogether. But men who stay at home to look after kids, or turn up at the school gates, are seen as selfless gods. These days, after decades of feminism, men do more chores and childcare – but not much more, and still far less than women. According to research by the feminist writer Beatrix Campbell, over the past three decades, the time that men dedicated to childcare rose at a rate of about 30 seconds per day, per year. Their contribution to housework rose at a rate of one minute per day, per year.

This is to entirely miss the greatest change in work over the past century. What both Ha Joon Chang and Hans Roslin referred to as the "washing machine," the stand in for all domestic labour saving technology. 

When we look at how working hours have changed the one that people concentrate upon is the rise of female participation in paid, market, work outside the household. Male such has fallen, male unpaid work inside the household has also fallen. But by far the largest change has been the fall in female, unpaid, household work. 

One estimate that we've seen, quite possibly a little overcooked, says that over the past century the time required to run a household has fallen from 60 hours a week to 15. The childcare part is of course a little different as yes, mothers do still tend to be the primary childcarers, something we don't consider all that odd in a viviparous species.

That is, the biggest change a century of mature capitalism hath wrought in working habits has been to alleviate the drudgery of that traditionally female work. Yet near every vocal feminist we know of declares loudly that capitalism must be overthrown in the name of liberating women. Odd that. Haven't they noticed that this past century has been that very liberation? 

Sometimes we do wonder what people use in place of logic

The news is that NHS waiting lists are up, to their highest for a decade:

About 4m people were waiting for National Health Service treatment at the end of June — the highest figure for almost a decade — according to the latest official data.

This is, apparently and according to one distinguished academic, proof of the iniquities of the Tories and of austerity:

It was bankers who created the Crisis. It wasn’t Labour. It wasn’t excess spending. If either had been true it would not have started elsewhere and been global. Excessive banking practices, deliberate deception and a far too relaxed attitude to regulation, based on neoliberal thinking, was what created the Crash.

Discussion on the anniversary has noted all too often how banking has recovered and is now robust and ready for the next downturn, which few now deny is on its way. I agree with the latter, I am not sure banking is that much stronger (time will tell) and like many I remain quite appropriately aggrieved at banks’ and bankers’ near risk free recovery.

But what has been too little noticed is the effect. The lost wages. The growing inequality. The creation of insecurity for most people as the price of strengthened bank balance sheets.

And NHS waiting lists: the sign that the state has shrunk under a wholly unnecessary policy of austerity that has let the neoliberals win and cost us all, dearly.

Umm, yes. Note that the complaint is that NHS waiting lists are now as high as they were near a decade ago, that's actually in Dec 2007. That's before the crash, in fact that's still when Brown was shovelling ever more into every public service he could find.

Logic therefore tells us that this intervening decade of Tories, of austerity, of the slaughter of everything social democracy holds holy, has in fact reduced NHS waiting lists. 

We'd love to know where they buy their logical arguments really. We can spot a business opportunity there in competing with their current supplier.

An udder shambles no more

According to the Humane Society, 2.6 million cows and 10 million pigs are slaughtered each year in the UK. Any culture of common decency must demand reasonable standards of welfare for these animals.

Michael Gove, the environment secretary, has introduced mandatory CCTV in all slaughterhouses where live animals are present. Veterinarians from the Food Standards Agency would also be given unrestricted access to footage of any areas of a slaughterhouse that livestock could be in. Any breaches may result in slaughterhouses receiving a welfare enforcement notice, suspension of staff licenses or even a criminal investigation.

Being the first in the world to implement laws protecting animals (Act to Prevent the Cruel and Improper Treatment of Cattle) the U.K. has a pretty good history of supporting animal welfare. However, especially in light of recent events - such as the case involving Owen Nichol who was filmed attacking cow and calves - there is far more to be done. Between 2009 and 2017, Animal Aid secretly filmed thirteen randomly chosen UK slaughterhouses and twelve were found to be breaking animal welfare laws. Nonetheless, according to the Food Standards Agency 50.7% of red meat slaughterhouses and 29.6% of white meat slaughterhouses in England and Wales do not yet have some form of CCTV in use for animal welfare purposes. That is 50.7% and 29.6% of slaughterhouses too many.

Not only is this reform a constructive step toward pragmatic progress on animal welfare, but this would pave the way for the U.K. to be an example for other nations to follow. Gove emphasised this, claiming that “as we prepare to leave the EU, these measures provide a further demonstration to consumers around the world that our food is produced to the very highest standards”. 

The reassurance of adequate animal welfare may be advantageous for British farmers looking to export internationally. Overseas supermarkets and high-spending consumers will be assured that British animals will have been treated with the highest possible standards. The mark of quality as we open up new markets could bring in vital new revenue. With Brexit looming and new trade deals with developed markets like the United States being talked up, having a comparative advantage to drive home in a new market will be key. 

Support for this particular measure is, importantly, widespread. In June 2014, a YouGov poll found that 76 per cent of those asked said the government should make CCTV mandatory for slaughterhouses. You need not be a social justice warrior, militant vegan, or career campaigner to appreciate and want to bolster decent animal welfare standards. It is hoped that this will be a precedent for further progress on standards of animal care, as well as hygiene and safety standards. Britain's animals deserve to have the best possible treatment throughout their lives and consumers deserve to know they are receiving it. 

Migration and that North/South death rate difference

We've another of those terrifying facts detailing the gross inequality of the UK:

The effect of this economic dereliction is far deeper than simply a clunky rail service, however. This week, researchers from the University of Manchester and the University of York warned that the rate of premature death in people under 45 was falling in the south, but stagnating in the north. In 2015, the number of premature deaths of people aged 35 to 44 was 50% higher in the north than the south. Since 2008, the regional death gap has widened alarmingly, bucking a decades-long trend. Life expectancy is already lower in the north; now, if you don’t live in the south, your chances of dying young have increased.

As with all the other studies and claims about regional inequality the bit that no one is taking account of is migration. Bournemouth, for example, regularly appears near the top of longevity lists. That it is, to some extent, a retirement town, where people move in their 60s, is the explanation. People who are already in their 60s quite naturally have a longer expected lifespan than those who have already died at this age.

Similarly with the Appallachia story in the US. The region is depopulating. Those who leave are the young and educated, exactly those we expect to have the longer lifespans. We do not claim this is all of it, only that it is some of it - even if overall rates of drug death, suicide, alcoholism, don't change at all, if that portion of the population least prone to them leaves then the recorded rate in an area will rise.

British internal migration is not so extreme perhaps but it does happen rather more than in most other European countries. And as the ONS tells us the internal migrants are more likely to be North to South, young, healthy and male. Each of those things, men more than women, the young more than the old, healthy more than unhealthy.

At which point we do again insist that this is some part of what is causing that divergence of death rates. And also we insist that we're not going to pay much attention to figures presented which don't at least attempt to quantify the extent to which the recorded numbers are simply a product of such migration patterns.

Balearic Islands score an own goal

Another day, another counter-productive economic measure brought in by a left-wing government. 

This time it’s in the Balearic Islands, where a coalition of socialist parties has announced plans to cap the number of beds available for tourists and are introducing serious penalties to those using sites like AirBnB without a license (including fines of up to €40,000 for the individual listing and €400,000 for the company holding the advert).  

This isn’t a tourist tax; they’ve had a tourist tax since 2016. That tax is quite modest, with a maximum charge of €2 a room per night for the most expensive classification (applicable to hotel chains and individuals using gig economy listings). No, this is a full licensing system for both the formal and informal tourism sector. 

Given that UK visitor numbers rose throughout the economic downturn, and have continued to go up through recovery and during the recent period of stagnant purchasing power - even after the introduction of their tourist tax - you would be right in thinking that British tourist numbers to Spain and the Balearics are pretty inelastic. If you were a left-wing government looking to raise revenue to provide services you would think you would be pretty enthusiastic about a source of income that seems guaranteed.

Indeed the evidence for tourist taxes is pretty positive for those that want to control numbers. When Malaysia introduced one they found the tax was paid where the burden really should fall: by tourists (89% in the short run and 74% in the long run) with the revenues raised being quite predictable.

The reason that these taxes are quite a good idea isn’t purely because they can raise money but because they also correct externalities. Tourists can often come with externalities, like alcohol fuelled crime and anti-social behaviour, congestion and pollution. It makes sense to charge for costs incurred. 

But no. Instead the Balearic Islands’ government will hit the supply side. No new licenses will be issued from this year for at least twelve months, with almost 70% of the beds on the isle of Mallorca and over half in large chain hotels. The aim being to reduce the number of beds listed in the islands by 120,000. 

It will hit all manner of Mallorcans and Minorcans. It will hurt those now forced to apply for licences to list their spare rooms online or risk exorbitant fines. It will force restaurants and bars to adapt to reduced revenue from lower tourist numbers. And it will curtail innovation as large established hotel chains seize control of bed licences. Not to mention, of course, that a reduced number of beds will lead to a reduced revenue take from their tourist tax. 

The Balearic Islands have fared better than the Spanish mainland during the long recession the country has endured but the number of businesses there has only this year risen above its 2008 peak. Its citizens are looking for a way to profit from the huge interest in visiting its sunny shores and it’s reasonable to suggest that a tourist tax may help distribute the proceeds of visitors quite equitably. 

Instead of being reasonable and increasing taxes to fund programmes that the government wants to run, while letting the economy and incomes of its people grow, the socialists want to plan. Who would have guessed? 

--------

Thanks to Ananya Chowdhury, an intern at the Adam Smith Institute this week, for the help with the research!
 

The Bank of England’s incredible stress tests

The Bank of England’s 2016 stress tests are literally incredible. Of the seven big financial institutions covered in the exercise, only one (RBS) failed and that only by a narrow margin.

So what is wrong with the stress tests? Well, one problem is that the Bank used book values instead of market values. It should have used market values (for reasons explained here) and if one uses market values instead of book values, then four of the biggest five banks fail the test.

Another problem is the existence of a lot of hidden leverage associated with positions that do not appear on banks’ balance sheets, such as derivatives positions. The result is that no one can tell from banks’ published financial statements how leveraged the banks really are.

But perhaps the biggest problem is inadequate accounting standards. The weaknesses of IFRS accounting standards have been well-documented: they include the overvaluation of retained earnings, asset values and profits; and inadequate provisions for expected losses. To quote a recent letter in the Financial Times:

better forecasts and better weatherproofing both depend on a deeper problem being resolved: the poor quality of the numbers we are relying on to tell us what banks’ capital actually is. Is the stated “capital” in fact capable of absorbing lending or trading losses that inevitably come in a downturn?

At the heart of the crisis would appear to sit faulty accounts and unreliable audits. In the EU alone, between September 2008 and the end of 2010, more than 300 banks went cap in hand to governments for support—in the form of capital injections, asset relief, liquidity aid or debt guarantees. Few banks [had been] identified as having insufficient capital [prior to September 2008].

All of these banks had previously been signed off as capital adequate by their regulators. That is some regulatory failure.

Nor is it just reported asset values that are the problem. If retained earnings or profits are inflated – and the IFRS rules give bank management give plenty of scope and incentive to game these figures – then inappropriate distributions of dividends and bonuses will be made, which will have the effect of secretly depleting bank capital and inflating reported capital figures – and once again, you cannot tell from the reported figures what the true situation actually is. Indeed, one cannot even tell from the reported figures whether a bank is even solvent.

For more details, see my longer article here.

The thing about that Google diversity memo was that his science was right

Watching the firestorm over that Google diversity memo and flap has been illuminating for it would appear that large parts of the world are unable to comprehend fairly simple ideas. Or perhaps it's that large portions of people simply do not wish to comprehend. Owen Jones denouncing it all as sexism for example, but he's by far from the only culprit.

The important point here being that that memo did get the basic science right. As scientists in the field point out here, as is exhaustively discussed here and as even The Guardian was willing to print 12 years back.

Across the populations of men and women there are differences in the propensity for, interest in, certain jobs - even, certain interests in life in general. This tells us absolutely nothing useful about any individual as individual variation is far greater than this difference in general propensity. In very loose terms here the claim is that any individual man or woman, or any other variation, may or may not have the talents and interests that lead to being a good engineer. We would also expect to find more such among men than among women. And that's it really. This is also the result of the best science we've got at the moment so it would be worthwhile to understand it as we consider the world out there.

The implication of this is that people who hire for a certain specific talent may well find that their available hiring pool skews one way or the other on gender. That would, not unnaturally, lead to a skew in the workforce.

It's entirely true that it doesn't have to be this way. People can always, if they really want to, hire on strict 50/50 gender grounds although we would point out that in most places this is illegal, it's discrimination upon the grounds of gender.

However, we would go on and point out that all of this is also true of the gender pay gap itself. This exists not because men and women doing the same job are differently paid, but because there's a certain self-selection into different jobs. That gender pay gap is only going to disappear when all jobs, at all levels, are done by a gender balanced workforce. This is a point we've made many a time before.

And that's the really important point about this, why it's so important to understand the science rather than rail about it. At least some of this disparity of outcome - we would claim much of it but that's not necessary for the argument to work - is coming from self-selection, not the imposition of discrimination from the outside. Or, as we might put it, the outcome is a result of people deciding how they'd like to live their own lives.

And why are we complaining about that? 

The Psychoactive Substances Act Is A Failure

The Psychoactive Substances Act—which pre-emptively banned new psychoactive drugs (NPS) in the UK—came into force over a year ago. Critics of the legislation are already beginning to see their predictions about the law’s harmful effects being confirmed, but the government has recently doubled down on its defence of the Act. Last week, a Home Office spokesperson stated:

Since we introduced the Psychoactive Substances Act we have seen use of these substances fall significantly, hundreds of retailers shut, and the first offenders convicted.

The use of NPS has indeed fallen from 0.7% to 0.4% among 16- to 59-year-olds since the ban. Although a report released earlier this year by drug treatment charity Addaction suggested that some users are substituting NPS use with more traditional drugs post-ban, few contest the idea that criminalization reduces overall drug consumption to some extent. But the total number of NPS users is only part of the story.

Back when the Psychoactive Substances Act was being debated in Parliament, I highlighted two major reasons for opposing the law: negative impacts on vital scientific research into psychoactive substances and more dangerous NPS consumption.

Those working on developing psychiatric medicines have seen their fears realized. This morning, I spoke to Alex O'Bryan-Tear who works at the Beckley Foundation, which was founded and directed by Amanda Feilding to lead research into psychedelic substances. He explained that:

Research into psychedelics such as LSD and DMT has been tightly regulated since the seventies, requiring stringent safety and ethical approval. But research into all psychiatric medication has been dealt a significant blow by the Psychoactive Substances Act, which makes it possible to commit a serious drug production offence without having any idea, and impacts research into any new medicine.

Candidates for psychiatric medicine get produced and tested in animals to see how they interact with the brain's neuroreceptors. Scientists in the field say that if a new chemical is shown to activate one receptor in particular, the serotonin 2A receptor (formally, 5-HT2AR), that chemical gets shelved immediately. Why? Because it's this receptor that's known to be activated by classic psychedelics, meaning this new chemical could also have psychedelic properties and therefore be illegal to produce. The flaw in this reasoning is that countless chemicals activate the serotonin 2A receptor - including, of course, the brain's naturally-produced serotonin. We don't yet understand why psychedelics have their effect, while other 2A receptor agonists don't. Many classes of medication, such as antidepressants, act on the serotonin system too, so it's vital that we work to understand this system and develop drugs that manipulate it effectively. But the result of drug scheduling laws is that we senselessly discard hundreds of potential medications that could have valuable therapeutic properties.

It also seems as though the NPS varieties available following the ban are, as predicted, more dangerous for users: both in terms of the drugs themselves and the context in which they are taken. With many retailers (head shops) being closed down as a consequence of law, users are left without guidance on safer usage and estimated dosage. Josie Smith, head of the substance misuse programme at Public Health Wales, told The Guardian last week that:

What we’ve seen particularly with the synthetic cannabinoids [a category of NPS] is a reduction in the range that appear to be available on the market, and those that are available are stronger and more dangerous – potentially fatal…

This suspicion that NPS are getting more dangerous is backed up by hard evidence. After a string of incidents in Manchester involving spice—a popular NPS—tests revealed that recent post-ban batches of the drug were ten times stronger than usual. The harms associated with unpredictable, often higher doses of spice have also affected violence in prisons, where the drug is especially popular. This comes as no surprise. Higher potency drugs tend to increase their market share in line with stricter enforcement, since the fixed per-unit costs associated with illegal consumption apply equally to all drug strengths and make high-potency varieties relatively cheaper.

This whole mess could be avoided if politicians took a sensible approach to drug policy by legalising safer, better-understood drugs such as cannabis and MDMA. In the meantime, repeal this wrongheaded law before it can wreak more havoc on young people, the homeless, and prisoners.

Turns out Hayek was right about climate change too

As Hayek's Nobel Lecture pointed out to us, we simply cannot know enough about the economy, in enough detail, to be able to plan it in any detail. The only method we've got of even calculating it is the very markets which make it up.

It turns out that this applies to climate change as well:

Potent, climate warming gases are being emitted into the atmosphere but are not being recorded in official inventories, a BBC investigation has found.

Air monitors in Switzerland have detected large quantities of one gas coming from a location in Italy.

However, the Italian submission to the UN records just a tiny amount of the substance being emitted.

Levels of some emissions from India and China are so uncertain that experts say their records are plus or minus 100%.

The problem here being:

Among the key provisions of the Paris climate deal, signed by 195 countries in December 2015, is the requirement that every country, rich or poor, has to submit an inventory of its greenhouse-gas emissions every two years.

Under UN rules, most countries produce "bottom-up" records, based on how many car journeys are made or how much energy is used for heating homes and offices.

But as Hayek pointed out, we just cannot know the economy at that level of detail. Now, of course, we have our doubts about whether climate change really is the threat to civilisation that some claim. But why is it that those who do make the claim, who really do argue that this is an existential matter, why is it that these very same people have insisted upon using methods that we know can never work? Simply because we cannot, ever, know the economy in the level of detail their plans demand?