Brexit: one year to go

It's clear, we're coming out. The UK is leaving the EU. In agreeing the transition terms (or most of them), the Prime Minister has managed to leave both sides of her party grudgingly accepting the deal. So what is next? 

Well, between now and the end of September (or, allowing for the traditional EU fudge), October or November, the withdrawal agreement will be strengthened, with more parts coloured amber and then green. The heads of terms for a free trade agreement with the EU will be agreed. That is because all member states actually want a free trade deal with the UK—in many cases their largest market—despite all the bluster about not getting away scot-free. From November to March 2019, it will be a case of dotting the i's and crossing the t's on that free trade agreement. Then from April 2019 until December 2020 will be a process of obtaining ratification of the deal from member states and subsidiary bodies. And meanwhile, the UK will be negotiating free trade agreements with other countries such as the US, Canada, Australia, New Zealand, and China. 

Suddenly, Theresa May—whatever you may think of her and her disastrous election campaign—is looking stronger, not just in terms of her own party leadership, but in terms of how the EU are treating her. Forget the newspaper babble about Barnier being intransigent, the UK being outgunned. The discussions have certainly been forthright, but both sides figure that the outcome so far has been fair, and they aim to keep it that way, given the considerable progress already made. It is true that issues like immigration and the UK's contribution to the EU budget have united the other member states against the UK. But now the discussion is turning to other issues where the other nations are divided, or where there are clear interests in reaching mutual agreement with the UK. Ireland may have been playing up the border issue for domestic political consumption but it is plainly in their interests to have an open border—and with modern technology there is no problem about doing that. As Norway, and any of the many other countries that have open borders with their neighbours, show. 

Sure, business doesn't like change. But it is actually adept at adapting to change. And remember, our future is not down only to the big firms of today: it will be made by the pioneers of tomorrow, firms that may not even exist right now but will grasp the post-Brexit opportunities. And twenty years ago, 60% of our trade was with the EU. By 2020 it will be 40% and still falling. The Treasury's 'gravity model' is less and less relevant in this era of truly international trade and ultra-cheap freight costs. Gravity is a proxy for these costs and services have few such costs. Remember, services have just overtaken goods as the UK's main export earner and there are disproportionate benefits to liberalising services trade with countries with similar legal systems and common languages (just as we are looking to do with the USA, Canada, Australia, New Zealand and Singapore). 

Yes, we will be accepting regulatory unity with the EU and a lot of deregulationists don't like that very much. But it certainly makes negotiations easier. We are not starting from a position where our laws and regulations are far apart. We are starting from where we are: with a large volume of EU-agreed common rules, and free trade between us. So reaching a future deal becomes that much easier. 

And sure, we have to plan for the possibility of no deal—that member states do not ratify what is agreed centrally. Frankly, the UK is strong enough to weather that, the economy has repeatedly outperformed the dire predictions of the Treasury's doom and gloom economists. There's no reason to expect this trend not to continue. And the UK has a history of doing the right thing, even if others don't. We can be, and will be, a new force for free trade across the planet. We know how to do that. We've done it before. We have nothing to lose but our tariff and regulatory shackles: we have the world to gain. 

Getting one thing right about plastics recycling

You'll have noted that around here we're pretty keen on the use of markets. That's because using markets works, it achieves the goal we've set out to gain. Thus there is a certain celebration at the manner in which the new plastics and containers recycling scheme is to be set up.

No, this is not to say that such a scheme must be set up. Only that if it is this is the correct way to do it:

A deposit return scheme for drinks bottles and cans will be unveiled by Michael Gove today in a major victory for the Mail’s campaign to slash plastic waste.

As well as plastic bottles, the scheme will cover aluminium cans and glass bottles, the Environment Secretary will say.

It is expected to involve putting a small charge on recyclable bottles and drinks containers. This deposit would be returned when empty bottles or cans are returned to a new network of ‘reverse vending machines’.

Place a value upon something and it will be valued within those markets. It's not that complicated an idea.

In more detail, a or the major cost in any form of recycling is the collection from individual hands those items to be recycled. A returnable deposit gives an incentive to do so and we'll see people organising themselves into making money from doing so. Again, perhaps this isn't a task which needs doing but if it does then this is the way to do it.

We can even call this pollution of the empties a market failure if we wish. Not quite true, because it's an absence of markets and their incentives. Great, so add in the incentives and let the markets do their work. Or, as we might put it, markets fail? Then use markets. 

The BBC should start fighting fair and drop the licence fee

Over the past couple of days I have been following a small but protracted twitter debate (read 'tagged in endless back-and-forth non-sequiturs') about the BBC licence fee, the obligations of the corporation and the content our public broadcaster provides.

Dino Sofos, the producer of the rather good and award-winning Brexitcast podcast for the BBC, took issue with the accusation by commercial podcast producers that a new podcast commissioner for the BBC might well undermine the private market, where the BBC's new entrants are already starting to dominate. Matt Chorley, of The Times Red Box fame, said it wasn't so much a complaint about the BBC being innovative, entertaining and information so much as a concern that 'anyone thinking of launching a podcast without a high profile will think twice when they look at BBC domination of charts.'

This caused the following retort from Ione Wells (of the BBC):

Where to start...

• The assumption that licence fee payers are happy at the moment? I imagine those people caught in the some 10% of criminal cases in England and Wales caused by licence fee issues might disagree...
• The presumption that the BBC wouldn't be able to keep up with private companies if it were itself a private company? 
• That fee payers would stop paying and then be sad that the service they're not paying for isn't performing as well as another service they're not paying for?
• The idea that the BBC is in the shadow of any private media company in the UK?

The thing with paying for a service is that you show how much you value it. If my value from the service drops below the amount I'm willing to pay for it, then I stop buying it. If it's set lower than my value then I get to keep the amount I would have spent on it, can spend that on something else and have the feeling that I've got a bargain. 

As Hussein Kesvani, the UK/Europe editor of MEL Magazine and a producer of private podcasts, shared on twitter:

Hussein went on to say that this form of media is regularly made by people that come from BME backgrounds and those who struggle to break into mainstream media producers. They often have to be made on a 'shoestring, competing with broadcasters who can make shows cheaply and without commercial metrics.' If the BBC uses its market power to produce these too, they end up shutting off another avenue to producers of content and channels of talent. And it is one hell of a market share that the BBC uses its privileged position to command. The two main sites of bbc.co.uk and bbc.com secured some 18.9bn page views in 2015 - more than three times the next competitor. 

There are things that must be done and can only be done by government and that only tax has the ability to pay for. Podcasts (and frankly radio, online magazine, and broadcast media) are not one of them. 

I get that journalists at the BBC want to produce cutting edge material. Of course they do. The people working there are ambitious and talented; and with resources to match. But they also need to understand the crowding out effect that the provision of public money, backed by criminal convictions for non-payment, has on the private market and viability of new innovators.

So what's the alternative? Well it's simple, we don't need to reinvent the wheel. Just implement a subscription model. 

When you pay you get access to the services, if you don't pay then you can't. For radio, you can use advertising. 

Thanks to the rise of providers like Netflix, Sky's Now TV, Amazone Prime, Apply TV, Apple Music and Spotify (to name but a few), we already know that subscriptions for high-quality services will be popular and affordable. They're popular across multiple formats too. People that like TV services can buy them for streaming or for playback, and those that like radio, music or podcast features can buy those. They can buy single programmes and continuous rolling payments for broader access. They can buy from one or many providers at their leisure.

Yes, I can imagine that if the BBC were to move to a subscription model that some stations, programmes or media will have to stop. And some really popular ones might get even more resources to meet market demand. That's a good thing. It's means that resources are being prioritised correctly. 

The BBC could even start providing to customers based outside of the UK (they already do, but only to Irish viewers, for free if it's watched live...). We even have estimates for how popular a service might be despite our current prohibitive approach. While at present, so as not to undermine the case for the licence fee at home, the BBC doesn't allow those living elsewhere to access the iPlayer service, over 65m viewers across the world access it via VPN or proxy servers. Make it available to subside to, and it's likely legal users will soar. The BBC is missing out on millions of potential paying customers by geo-restricting access, and we're all paying for it. 

If the BBC wants to dominate more markets, it can open up to the world, and it can start by fighting fair at home too.

Glory be, Paul Ehrlich is still wrong

We;re arriving at the 50th anniversary of Paul Ehrlich's megaselling panic book, The Population Bomb. Nothing predicted in the book has come true therefore it's still a bible to a certain sort of environmentalist. You know, those who insist that precisely because it hasn't come true yet it's obviously about to.

At which point the observation that Paul Ehrlich is still wrong. But not just wrong about what will happen, wrong about the solutions too:

Fifty years after the publication of his controversial book The Population Bomb, biologist Paul Ehrlich warns overpopulation and overconsumption are driving us over the edge

A shattering collapse of civilisation is a “near certainty” in the next few decades due to humanity’s continuing destruction of the natural world that sustains all life on Earth, according to biologist Prof Paul Ehrlich.

Well, if that's true then we've not got to worry about climate change, do we? For the very basis of any concern we might have over that is that industrial civilisation continues for the next century roughly as currently. If it's not then there won't be that climate change. Ehrlich doesn't argue that we shouldn't be doing something about climate change therefore either he doesn't believe his own argument or he's simply ignorant of our climate models.

But more than that he's wrong, even if we accept his predictions and concerns, about how to avoid the civilisational collapse:

The solutions are tough, he says. “To start, make modern contraception and back-up abortion available to all and give women full equal rights, pay and opportunities with men.

“I hope that would lead to a low enough total fertility rate that the needed shrinkage of population would follow."

Sure, those who desire to use contraception should have access to it. Sex is far too much fun for that not to be a useful goal in increasing human happiness. But the problem with Ehrlich's argument is that access to it doesn't have much effect upon fertility. The best guesstimate is that such access explains about 10% of the change in actual fertility - it's the desire to use it which explains the other 90%.

What is it that changes that desire? Richer people have fewer children. We've observed this absolutely everywhere that people have got rich, this isn't an arguable point. You want to reduce population then get people rich.

To be wrong in your predictions and also wrong in the solutions to your own predictions is pretty good going but then Ehrlich hasn't really changed these past 50 years, has he? 

Of course the aid NGOs are bureaucratic and inefficient

The Guardian's running a series about what it's like to work in the aid business. Apparently it's a nightmare of bureaucracy, infighting and inefficiency. This should not surprise us:

I recently resigned from my job with a non-governmental organisation in Africa. After years of working in the sector, I have been left disillusioned with the ethos and impact of these organisations.

The sector is filled with the wrong people with the wrong motivations and the wrong agenda. It is, after all, a business enterprise worth $27.3bn, at least in 2016. Missions in country are incentivised by money. The more you can raise, the happier your colleagues in the region and in headquarters because some of that money goes into paying their salaries and office rents – and your performance in the country is linked to that, rather than the quality of the programmes you are running.

In the eyes of senior management, a successful humanitarian operation is based on two key indicators: how much money you raise with the donors and how many beneficiaries you have reached with the aid money you have been given. However, in my experience, what is not measured is how well you have managed projects in addressing the real needs of the intended recipients, how accountable you have been to them, and how quickly you have been able to address their urgent needs in humanitarian emergencies.

Why shouldn't this surprise us? Because this is just what will happen if and when we measure success as we do. Think on how we do in fact measure overseas development aid, that levy upon our own tax payments so graciously sent off to foreign climes by the government.

We don't measure what is done with it. We don't measure the efficiency with which it is spent. We don't even, to any great extent, measure the effect it has. Instead we pat ourselves on the back - or perhaps those who send our money pat themselves on their backs for sending our money - for sending a certain amount of money. An amount that modern politics seems to think is inviolable.

We've a budget that must and will be spent with little to no attention paid to how or why it's spent? Who expects anything other than bureaucracy, inefficiency and infighting? Or, as we might put it, the gross wasting of that cash lifted from our wallets? 

Oh Dear, apparently Grant Shapps doesn't know what he's talking about

Someone, somewhere, needs to cover the costs of connecting people to infrastructure. Say it costs £50 to do so, someone will be making revenue of £20 a month by having done so, the connection needs to be made once and once only. We're pretty sure that some Coasean private sector bargain can be made to cover that. Perhaps a connection charge to the user, perhaps the supplier looking to that pelf and gilt that can be made and regarding it as an investment.

Now keep that monthly fee at £20 and posit that the connection charge is £50,000. The supplier won't make that back so there are only two viable options. The consumer coughs up or there's some subsidy arrangement.

Our general rule for all such things, broadband, roads, electricity, sewage and so on is that a charge is imposed upon the user. At times and in locations maybe the supplier will swallow it but significant distances from extant infrastructure are charged for, openly. Sadly, it seems that Grant Shapps is ignorant of this basic fact:

BT Openreach is charging rural residents more than £5,000 to connect their homes to the internet.

Some isolated villages can't get basic broadband because they are too far from the telephone exchanges owned by BT.

But, rather than extend its network, BT Openreach is telling communities they must raise as much as £58,000 among themselves to fund improvements.

Critics say that this is the equivalent of charging homeowners to install wires to carry electricity into their homes.

...

MPs say internet access is a vital utility and accuse BT of charging rural households for work it should be funding.

Grant Shapps, chair of the British Infrastructure Group of MPs (BIG), says: 'People in rural areas are being ripped off by BT. 

'It can't be right that having been denied proper internet access for years, the solution offered is for residents to pay for the infrastructure themselves.

'Nowadays, broadband is one of life's essential services, like electricity, and you'd never expect the public to pay for the wires to be laid to switch on the lights.'

Not so Mr. Shapps, not so. Here's Ofgem:

How do I get a connection?

The first step is to contact your DNO. Their websites will tell you how to reach them. You’ll need to provide details of your requirements. The DNO will give you a quote for the work. You don’t have to use your DNO for all connection services. You can go to an independent connections provider or IDNO for some services instead.

What will I have to pay for?

You’ll need to pay for the cost of the work in advance. The cost will depend on factors including where you’re located and the amount of electricity you will need. The price will cover:  the cost of assets solely for your use  a proportion of the cost of reinforcing the network, if needed. The DNO must calculate the cost of the work using its connection charging methodology. Each DNO publishes this on their website. We approve this methodology, but we don’t approve the individual charges it works out.

People are charged to be connected to electricity. As they are to water, sewage and, at times, the road system. Because someone, somewhere, has to pay those costs and it might as well be the people who will benefit, the people who thereby gain those services.

We have to admit that we don't mind lobbying, we've been known to make the odd suggestion or two to government ourselves. But we do think it preferable to make such suggestions from a position of some awareness of extant reality. Picky of us certainly, but you know....

We're going about this plastics in the ocean problem all wrong

It is entirely true that there are parts of the ocean where plastics congregate as if at a kaffeeklatsch. We'd probably prefer that they did not. It's also entirely true that we use rather a lot of one use plastics here in Britain, more generally upon land around the world. So, the modern logic goes that we should be using less plastic in order to reduce the amount in the oceans.

That does rather depend upon it being our land based use of plastics being the cause of that in the ocean patches. Something that we should perhaps test. You know, do some of that science stuff? For it is only, as we keep shouting, if we understand the cause of a problem that we can possibly hope to produce a solution to it.

At which point, some science:

Ocean plastic can persist in sea surface waters, eventually accumulating in remote areas of the world’s oceans. Here we characterise and quantify a major ocean plastic accumulation zone formed in subtropical waters between California and Hawaii: The Great Pacific Garbage Patch (GPGP). Our model, calibrated with data from multi-vessel and aircraft surveys, predicted at least 79 (45–129) thousand tonnes of ocean plastic are floating inside an area of 1.6 million km2; a figure four to sixteen times higher than previously reported. We explain this difference through the use of more robust methods to quantify larger debris. Over three-quarters of the GPGP mass was carried by debris larger than 5 cm and at least 46% was comprised of fishing nets.

There's lots of plastic out there. And some half of it comes solely from fishing nets. Not things which are known to have a great number of land based uses.

Our model estimates that this 1.6 million km2 accumulation zone is currently holding around 42k metric tons of megaplastics (e.g. fishing nets, which represented more than 46% of the GPGP load), ~20k metric tons of macroplastics (e.g. crates, eel trap cones, bottles), ~10 k metric tons of mesoplastics (e.g. bottle caps, oyster spacers), and ~6.4 k metric tons of microplastics (e.g. fragments of rigid plastic objects, ropes and fishing nets).

There's not there much evidence that any land based uses at all are contributing to the problem. And yet the political process keeps telling us that we must not have one use coffee cups, should ban plastic shopping bags, must do away with the idea of bottle water, in order to stop plastics accumulating in the oceans.

Given that it's not us on land causing the problem we on land changing our behaviour and usage isn't going to solve the problem, is it? Amazing stuff science, it can even be used to aid us in sorting things out. But only if we actually use it of course, rather than succumbing to whatever the modern equivalent of sacrificing virgins to bring back the Moon is.

Killing the case for comprehensive schools

Interesting new research rather kills the case for comprehensive schools - by killing off the underlying assumption made about children, society and academic success.

That underlying assumption is that the children are a tabula rasa. A blank slate which is then written upon by their education, perhaps also their socio-economic status. Danny Dorling, for example, has been most insistent that anyone could become a Professor of Social Geography, himself being a prime example of the contention, anyone has. This is not so:

However, once we controlled for factors involved in pupil selection, there were no significant genetic differences between school types, and the variance in exam scores at age 16 explained by school type dropped from 7% to <1%. These results show that genetic and exam differences between school types are primarily due to the heritable characteristics involved in pupil admission.

Intelligence - and let's side step the discussion of what that actually is - is heritable. Note that this doesn't mean that there aren't poor bright children, nor rich dullards, no one who has actually been to a school of any type would try to dismiss the existence of both.  What it does mean though is that equal education for all is still not going to lead to equal outcomes. And different education for all isn't going to change, except perhaps at the margin, outcomes.

At which point the argument for comprehensive education disappears, based as it is upon that tabula rasa argument. 

We could hope that this will therefore change attitudes and policy towards the school system. We'd not hold our breath over that given that the entrenched positions just aren't being driven by the science:

Educational achievement, and its relationship with socioeconomic background, is one of the enduring issues in educational research. The influential Coleman Report1 concluded that schools themselves did little to affect a student’s academic outcomes over and above what the students themselves brought to them to school—‘the inequalities imposed on children by their home, neighbourhood and peer environment are carried along to become the inequalities with which they confront adult life at the end of school’ (p. 325). Over the intervening 50 years,

We've known this for half a century but it's not changed policy has it? 

Our own view on the subject is really very simple. We are, after all, liberals. Children are a parent's most precious possession, they're actually what we do this whole struggle of life for. And, as with anything else, in the absence of significant third party damage people get to do as they wish. So, the school system should be what parents desire. Not parents desire as filtered through the tyranny of the majority,  but what parents desire for their own children. Subject, perhaps, to gentle oversight to weed out the Wackford Squeers but no more than that.

That is, we support the one solution that absolutely no one at all in the debate seems interested in.

It's amazing how everything, just everything, argues for an increase in the NHS budget

As we all know the National Health Service is the modern religion of Britain. As with any other religion it depends upon certain untested assumptions, ones which never should be argued over or tested in polite society. That one about it being the Wonder of the World amuses given that near no one else has tried to copy it. And the reaction among foreigners to that Olympics show was mystification rather than anything else. Sure, the British have hospitals and so do Bjorn, Hans, Jose and Hank. And?

Part of this religious backing is that whatever happens it is always an argument for an increased budget for the NHS. As with other religions of course. Plagues are upon the land, sacrifice another virgin. Plagues are not upon the land, sacrifice a virgin, the Sun has risen, sacrifice a virgin. With the NHS that it's Monday is an argument to be used for a greater budget. As is, remarkably, the existence of new treatments which will reduce costs to the NHS an argument for an increased budget:

Drugs to vaccinate everyone over the age of 50 against Alzheimer’s could be available within 10 years, but would cost the NHS £9 billion, a new report has shown.

New analysis commissioned by Alzheimer’s Research UK found that drugs to halt, slow or reverse the disease could be available in as little as three years with major vaccine and screening programmes possible within a decade.

A vaccine is the mechanisation of the previously treatment regime of being able to do nothing but basic personal care. Mechanisation of a task, as we've been showing this past 250 years, is cheaper than not mechanising it. Being able to inject people against Alzheimer's is going to be vastly cheaper than caring for people with the disease for up to a decade. 

The cost to the NHS of doing this is therefore going to be negative, not positive. As when aspirin replaced the temple wash with a cool cloth as a treatment for headaches.

The existence of such new drugs is an argument in favour of cutting the NHS budget not increasing it. Not that we expect rational responses to religious phenomena of course.

Sure, why not make social media like Wikipedia?

The basic idea here we're not just fine with we support it entirely. The tactics to gain it we're less enamoured of. Sure, why shouldn't social media be run as Wikipedia is? Why should, in that basic and essential sense, it be something produced by capitalist organisations?

But there are also ways to create alternatives from the bottom up. Governments and regulators could foster the conditions in which alternative networks with more democratic foundations could flourish.

One way to do this is to increase transparency and public participation around rule-making for digital platforms. For an example of what this means, we can look to Wikipedia. It has its problems, but it is a remarkable example of how to make decisions as a community, rather than a company. The method by which articles on Wikipedia are produced is governed by a set of rules that have been determined collectively, over time. There are arguments, there is consensus, and there is everything in between – all of which is documented for anyone to see.

Compare this with Facebook’s decree that its news feed would prioritise personal stories over media content, without any apparent indication that it considered the impact on journalism. Or its equally clunky attempt to survey users about who should decide whether child-grooming content should be permitted on the platform.

The Facebook executive team is clearly unaccustomed to managing democratic processes and genuine community collaboration. 

Note that Wikipedia didn't in fact need any changes from governments or regulators to foster anything. And they rather successfully saw off the challenges from more capitalist alternatives like Britannica or Encarta.

If people are unhappy with the gelt and pilf seeking ways of Facebook why not go off and do something else? Those annoyed with what they perceive as the right on attitudes of Twitter have made gab.ai. Something of variable interest to the rest of us to be sure but it exists.

Our point here is simply our basic and complete liberalism writ small for this sector of the economy. Great, consenting adults get on with it, why not? If enough people share your desires then you'll be able to create just those communities not infected with data sales that you desire. If the 2 billion current users of Facebook think the deal on offer to them is just fine then you won't. And the only way we'll find out which people prefer is to watch which they choose.

As long as you're not insisting upon any particular privilege for your method of doing it - that's the tactics part we disagree with - then good luck to all who sail in such adventures. We're not even being flippant, this is the only way we'll ever find out what it is that people do want.