Governments win ISDS Cases often enough - therefore ISDS cases are bad

As we all know there’s a significant movement insisting that investor state dispute settlement systems - ISDS - in international treaties are a bad idea. For what they are is an insistence that there should be an independent court of law able and willing to rule upon the manner in which states live up to - or don’t - their contractual promises. And for those in favour of untrammeled state power who wants that?

As we’ve pointed out before such ISDS provisions do indeed mean that companies and individuals can sue governments. But then so does the European Court of Justice and even the European Court of Human Rights. None of those complaining about ISDS provisions going on to complain about those two.

What does amuse is that even when governments win such ISDS cases this is still taken to be proof that the system shouldn’t exist:

A US energy company’s controversial and unprecedented attempt to sue the Australian government has collapsed, leaving taxpayers with a $44,000 bill.

In 2017 Florida-based APR Energy became the first company to attempt to sue the Australian government under the Australia-US free trade agreement, demanding $344m in compensation for Australia’s treatment of its gas turbines.

The action was made possible by deeply controversial provisions contained in many trade deals – known as investor-state dispute settlement, or ISDS – that allow foreign corporations to sue a government for actions or policies that hurt them commercially.

No, no one gains the right to sue for commercial harm. People only, ever, gain the right to sue for government breaching contracts or terms they have already agreed to. And holding government to account is rather a useful function in a society, no?

Despite the case’s relatively short and uneventful journey, taxpayers have still been charged tens of thousands of dollars to defend it.

Documents obtained by the Centre Alliance senator Rex Patrick show the total legal bill to Australia was $44,000.

The bill is small but Patrick says it is further evidence that ISDS provisions leave Australia vulnerable.

“These are the dangers,” he said. “The matters have been discontinued but it has cost the taxpayer. Last time it was $39m, this time it was $44,000. Who knows what it will be next time.”

$44,000 to uphold the rule of law? Seems rather cheap at the price. What next, complaints about the cost of trying someone who turns out to be innocent? A demand that trials not be held because innocence might be proven?

420 - Cannabis Culture day

Every culture has its founding myths, distorted by telling and by time, and the truth of them sometimes matters less than the legend. Cannabis culture is associated with “four-twenty,” and since 4-20 is the American way of expressing April 20th, that date is celebrated as Cannabis Culture Day. It may be true that some high school students who called themselves the Waldos met at 4.20pm to seek out an abandoned cannabis crop, but the story racks more of lore and legend than it rings of reality.

Either way, on April 20th there are gatherings across the world centred around cannabis. Some are calls for legalization, but as more and more countries and states legalize it, many of the gatherings are simply celebrations of victory. When Washington DC’s Initiative 71 succeeded in legalization in 2014, the Mayor gave its leader the licence plate number 420 in celebration.

At the heart of it lies the desire of some people to consume substances that give them pleasure, a category that includes alcohol and nicotine. Others who disapprove have in the past used laws against such activity. They do not consume it themselves, and they want to prevent others doing so. It may be that the substances have harmful effects, but the choice of whether to accept the risks of what might follow is a choice that those of a liberal persuasion believe should be made by the individuals concerned. It is fine for them to be made aware of the possible consequences, but the choice should still be theirs.

The harmful effects of criminalization were vividly revealed in America’s period of Prohibition. It led to criminal gangs corrupting the police and the judicial process and to murdering competitors in turf wars. The illegality made it profitable for bootleggers, and turned ordinary citizen into law-breakers at odds with authority.

The illegality of narcotics leads to the rise of criminal gangs. Their actual production cost is tiny; it is their illegality that makes them expensive. Their manufacture, transport, distribution and sale all carry the risks of fines and imprisonment, and these risks have to be paid for. Were the drugs legal, none of these attendant risks would be carried, and the prices and profits would plummet.

Rival drug gangs in South America bury hundreds of victims in mass graves, while their bosses put billions into bank accounts. Teenagers in Britain murder each other on the streets in turf wars to decide who gets to tap the local income stream that illegal drugs generate. The huge profits made are magnified by being untaxed. Legal drugs would be cheap, controlled in quality, regulated in advertising and sale points, and have their profits subject to taxation.

With legalization would come control. Crime rates would plummet, including violent crimes. The prison population would be dramatically reduced, and the drain on police and court time spent on dealing with narcotics would end, leaving them far more able to deal with crimes that mattered.

As we mark Cannabis Culture Day, therefore, we should redouble our efforts to bring about the end of the perverse prohibition that casts such a blight on our society.

How terrible to demand actual facts

One of the minor amusements of current UK political life is the shrieking going on over the number of people rough sleeping - the truly homeless. There’s, if not an industry then certainly an interest group, a section of the NGO world which insists that the problem is massive, terrible, the economy must be radically changed to deal with it. This might not be a quite accurate description of reality.

So, what should we do about this? Well, one obvious idea is that instead of relying upon estimates from those inside the system we should go and do a direct count. For yes, those in the industry may well know lots - Hayek’s local knowledge - but there’s also the mildest of possibilities that they could harbour the tiniest piece of bias.

Claims that rough sleeping is falling in England should not be trusted until the government has explained how an emergency funding scheme for the worst-affected areas might have skewed the latest figures, the chair of the UK statistics Authority (UKSA) has said.

Sir David Norgrove’s comments are the latest development in a row over the apparent 2% fall in rough sleeping in England in 2018, which ministers said was a sign the government’s Rough Sleeping Initiative (RSI) was tackling the homelessness crisis.

The specific and detailed complaint here is that incentives have changed so don’t trust the numbers before and after that incentive change. Which is fair enough.

However, there’s also complaining about this:All councils recorded significant falls in rough sleeping from 2017 to 2018 after switching from an estimate to a count, which critics said occurred because of the methodology change and did not reflect the reality on the streets.

Well, no, not really, because the incentives didn’t change everywhere. At least some of the change therefore really being that the estimates were a tad too high. But given that admitting this means the government could claim to have reduced rough sleeping that can’t really be admitted.

Ourselves we prefer the actual count. Not because of anything specific about homelessness but just because of our general and long running insistence. Unless you know what reality is it’s rather difficult to change it.

Venezuela declared home rule from Spain

On April 19th, 1810, Venezuela overthrew its Spanish colonial masters and established a Junta Suprema de Caracas to take power, beginning a war of independence. There were reverses and reconquests along the way, but the incident initiated a train of events that led to full independence from Spain. Venezuela was the first Spanish colony in America to declare independence.

The country is well situated and exported agricultural crops including cocoa and coffee. Oil was discovered in the early 20th century, and Venezuela was found to have the world's largest known oil reserves. From the 1950s to the early 1980s, the economy saw steady growth and achieved the highest standard of living in Latin America. It ranked close to West Germany.

I went there a couple of times in the 1980s and was impressed by its natural beauty and obvious vitality. It was a country on the rise, with a vibrant business sector creating both wealth and jobs.

Hugo Chávez was elected in December 1998, and used oil revenues to boost welfare and social spending. Prices were fixed, and the leader's cronies systematically looted the economy, a policy continued under his successor, Nicolás Maduro. The oil industry was crippled by replacing its skilled staff with regime supporters, and using its revenues to buy voter loyalty rather than investing in its future.

This mismanagement resulted in hyperinflation, economic depression, and shortages of basic goods, coupled with increases in unemployment, poverty, disease, child mortality and malnutrition. Inflation has exceeded 1.3 million percent. Three million people have emigrated, and those who remain have to cope with lack of medicines and water, and frequent power cuts. Venezuela faces the worst economic crisis in its history. None of this is caused by sanctions, which mainly target individual corrupt officials. It is caused by mismanagement and criminal corruption.

There seems to be a pattern sometimes when a country sees economic growth. A populist leader is elected to divert the increased wealth to social and welfare programmes, and to take over successful industries, allegedly to have them serve the people, but in reality to make them tools of a government anxious to reward its cronies and supporters. The economy is run into the ground. Hyperinflation increases the prices of goods dramatically, so these are fixed by law, resulting in shortages when they cannot be produced at those prices.

It is a depressing cycle. Even more depressing is the adulatory support given to such governments by left-wing intellectuals in developed countries. They hail the birth of a bold new experiment in socialism, go quiet when it crumbles apart, and then announce afterwards that it was "never really socialism."

The terrors of British land ownership

A report trying to warn us about how unfairly, terribly, land ownership is distributed in Britain. Why, the place is still owned by aristocrats!

Half of England is owned by less than 1% of its population, according to new data shared with the Guardian that seeks to penetrate the secrecy that has traditionally surrounded land ownership.

The findings, described as “astonishingly unequal”, suggest that about 25,000 landowners – typically members of the aristocracy and corporations – have control of half of the country.

To claim that corporate ownership is a problem is itself problematic. For what do we mean by a corporation?

The list is headed by a large water company, United Utilities, which said that much of its land consisted of areas immediately surrounding its reservoirs.

UU is ultimately owned by millions of pensions and other individual shareholders. That land is owned collectively is a problem to whom? But is is this which really caught our eye:

Shrubsole writes that the bulk of the population owns very little land or none at all. Those who own homes in England, in total, own only 5% of the country.

How excellent, housing, including all those gardens, covers some small fraction of the country. That means there’s plenty of room to buy land off the aristocrats and plonk housing - under that individual ownership - on it. We’ve not, that is, got a shortage of land to build upon.

All we need do therefore is allow people to indulge in that voluntary cooperation that is mutual exchange and we’ll have solved the housing problem. That is, the solution to a problem is, as so often turns out to be true, stopping government from preventing people from solving problems on their own. We even have empirical evidence. The last time the private sector built 300,000 houses a year was in the 1930s, before the Town and Country Planning Act stopped the industry from building houses people wanted to live in where they’d like to live.

The day nothing happened

Nothing at all happened on April 18th, 1930. There was no news at all. The BBC announcer for the 8.45 pm radio news bulletin announced to the nation, "Today is Good Friday. There is no news." The rest of the 15-minute bulletin was filled by piano music, until the BBC resumed with a broadcast of Wagner's opera, Parsifal.

The BBC took itself very seriously in those days, with a self-imposed mission to use its broadcasting monopoly to uplift the nation morally. The newscaster would be wearing a dinner jacket to read the news, even though no-one outside the studio could see him. The point was that he could see himself, and be aware that the news was a very serious matter, something to be treated with dignity.

On that Good Friday, the BBC thought there was nothing worth reporting. In more modern times, with better, more rapid communications, they might have reported that Indian rebels led by Surya Sen attacked and burned the Chittagong armoury in Bengal, part of the Indian Empire. It took martial law and British troops to restore order. The BBC might have covered the church fire in Contesti, Romania, when candles set fire to church fabrics, or maybe covered the typhoon that struck Leyte in the Philippines. But they didn't.

They showed bias, of course, not in the way they covered the news, but in deciding what counted as news. They do this currently every day, picking the stories to cover that fit in and support the BBC's world-view. In modern times they have added bias to promote their agenda in the way they report events, as well as in deciding what events to cover. An earthquake might have killed hundreds in Asia, but if someone has made some unfounded criticism of President Trump, the natural disaster will rank low on their agenda, hardly competing with the interviews and speculation as to how much the criticism will undermine Trump's presidency.

Similarly, the murder of dozens of Christian worshipers in Africa is unlikely to feature if a new scare story of the impending Brexit disaster has been contrived. For the most part it is unlikely that the BBC staff even think of this as bias. To them it just reflects how the world is. They nearly all share a common outlook that to them seems like common decency. Those not sharing this view are disregarded as some kind of extremists, there to be mocked if they are mentioned at all.

This is all done with public money, with funds extracted from the people whose views they disdain. These days they would never announce, "There is no news." They would just manufacture some.

Our bet is that this study about ocean plastic pollution will be misused

A new study talking about plastic pollution in the oceans. This is about “macroplastic”, the bits that can be seen and felt. We would lay good money at even odds that this study will be misused by campaigners:

Plastic pollution has got 10 times worse in seas around Britain since 2000

Sounds bad:

Plastic in the North Sea is 10 times worse than at the start of the century, a study by British scientists has found.

Researchers looked at records from a plankton sampling mission which has been trawling the North Atlantic and surrounding regions since 1957.

They found that before 2000, the little torpedo shaped collection device would become snagged on large bits of plastic rubbish on fewer than one in 200 outings.

But now researchers are forced to untangle plastic bags, fishing equipment and other debris after one in 20 trawls.

The misuse will be “untangle plastic bags, fishing equipment and”. For here’s the study itself:

A similarity percentage (SIMPER) analysis19 determined that the percentage contribution between the litter types to the change in macroplastic counts over time were 44.86% due to fishing related plastics, 44.67% due to other (fishing not specified) plastic types, and 10.48% due to plastic bags.

It’s almost entirely down to fishing gear. Those plastics first being used in fishing gear in the 1950s. As to the plastic bags:

There is also evidence of a decline in the entanglement records of plastic bags since 2000

2000 is a decade, decade and a half before the battle against single use plastic bags was even started. Well before any government action like compulsory charges and so on.

So, our evidence says that plastic bags are a small part of the problem, one that is declining anyway even in the absence of government action. And our prediction is that this will be misused to argue that ever greater efforts must be made to phase out the plastic bags which aren’t causing the problem.

Winter followed Prague Spring

April 17th, 1969, marked the final end of Prague Spring when Alexander Dubček was forced by the Soviet authorities to resign as the Czechoslovak Communist Party's first secretary. It had begun with promise when he had first been elected to the post in January 1968, and ushered in a period of liberalization. The press had been allowed more freedom from state control and censorship, and victims of previous purges under Stalin had been rehabilitated.

Dubček described his policies as “socialism with a human face,” and proposed a new constitution to guarantee civil rights and liberties, together with more genuine democracy. The Czechoslovak people were optimistic that their national identity could flourish, once liberated from the shackles of Soviet Communist conformity. Cinematography boomed with its "New Wave" of independence.

Other Communist governments looked with alarm at these events. This did not conform with how they thought the Communist grip on power should be maintained. Dubček told the Soviet and satellite governments that he could control the process, but they grew increasingly alarmed, and in August 1968, invaded Czechoslovakia and reimposed hard line controls. Dubček urged his people not to resist, but the brief scent of freedom was gone. It would be another 20 years before the country could be free again. Dubček was expelled from the Communist Party the following year, and was only rehabilitated after the 1989 overthrow of the communist regime, to be made Chairman of the federal Czechoslovak parliament.

The repression of the Czech bid for freedom had not been as brutal as the savage repression of the similar Hungarian attempt in 1956, largely because the people did not resist, but it was as thorough. The liberalizations were reversed, and the iron hand of Communism once more gripped the daily life of the people.

The lesson is that Communism and liberty do not mix. Socialism as an economic system simply does not work, and people will, if given the chance, replace it with one that does. That is why Communist governments maintain a monopoly of power that permits of no possibility of replacement. People have to endure the shortages, the shoddy goods and the deprivations because they have no alterative. The system maintains itself with the barrels of its guns.

There is now a Museum of Communism in Prague. I visited it recently and can recommend it. There are reconstructions of life under Communism, including some of its repression, but the mood is not dark. It is more mocking, making fun of Communism and its failures. There is a mock-up of a shop from that era, with an amusing commentary explaining how corruption was used to circumvent the system and its shortages. It would be useful if those advocating Socialism today were to visit it to see what it was like in practice. But of course, they would say that this "wasn't really Socialism." No real-world example ever is, because they all fail in practice.

The fracking earthquake rules aren't a mistake, they're the point

Jim Ratcliffe at Ineos is threatening to take his ball home over the rules about earthquakes and fracking. As of course he’s every right to, if the conditions for investment are unattractive then entrepreneurs can indeed go and do something else and elsewhere. This being one of the points that sensible people continually make, make taxes too high, regulation too restrictive, and new things won’t be appearing any time soon. Over time the country will be poorer than if taxes were lower, regulation less restrictive, as a result of that onward march of the application of technology which doesn’t happen.

With respect to fracking though this is the point of the regulatory regime:

Sir Jim Ratcliffe's Ineos has launched a stinging attack over the way fracking is being regulated, claiming the industry "is being stopped from moving forward".

The petrochemicals and energy giant, owned by Britain's wealthiest man and one of two companies with the right to undertake fracking in England, has threatened to walk away from operations unless regulations are loosened.

Fracking must be halted if tremors of 0.5 or more on the Richter scale are triggered - a limit Sir Jim's company wants revising to a more "sensible" level.

The point being that there are those who oppose fracking on basic, even philosophic, grounds. They were able to get that 0.5 limit put in place. Not because it’s a sensible number or anything, but so that it’s an entire and complete barrier to anyone doing any fracking. By their lights this is a Good Thing. Britain is left poorer by not being able to use a cheap and abundant energy source.

As to proof that it’s not a sensible number, the British Geological Survey lists recent earthquakes. In the first 15 days of this month there were quakes over that 0.5 limit in Silecroft, Middlesbrough, Newdigate, Blairlogie, Hodnet and County Donegal. Two of those were felt by no human being at all or whatsoever. Fracking is, under the law, banned in those places for some number of days this month. No one has been fracking in any of those areas.

Ratcliffe is stating that this 0.5 limit precludes anyone fracking effectively or economically. Yes, he’s right. But to those who instituted the limit that’s the very point. They positively insist that we must all be poorer.

Kingsley Amis opposed public funding of the arts

One of the English language’s most talented writers of the 20th Century was Sir Kingsley Amis, born on April 16th, 1922. Out of his 20 novels and 6 poetry books, he was most famous for his 1954 first novel, “Lucky Jim.” It was a best seller in the UK and US, perhaps because it captured the postwar mood. It earned Amis a place among the “angry young men” who railed at the inadequacies and injustices of life in Britain.

Amis was a Communist at Oxford, but gradually swung right, as did so many of the writers and artists of his generation. He wrote the essay, “Lucky Jim Turns Right” in 1967, citing the Soviet 1956 invasion of Hungary as the final nail in the coffin.

He spoke at an ASI lunchtime conference, and published an essay with us, republished in the Daily Telegraph, opposing public funding for the arts. His basic case was that public funding, administered by civil servants and quangocrats, corrupts the arts. Instead of producing what they are impelled to produce, or what they think will sell, artists and writers direct their output to what will tick the bureaucrats’ boxes and attract grants from public funds. This was not what art should be about, he said. Nor was it the job of public servants to promote their version of what art should be, and foist it on the public at taxpayers’ expense.

Amis was a real character. He drank and smoked heavily. At the ASI luncheon, when offered red or white wine, his face fell and he said, “Oh, isn’t there any real drink.” A triple neat Glenlivet mollified him, and he had two more of those before lunch. He once wrote, “The words I most dread to hear are ‘Shall we go straight to the table?’”

He had a strict self-disciplined schedule that separated his writing from his drinking. He wrote in the mornings, with a target of 500 words minimum every day. Only at lunch did his drinking day begin.

He wrote light-hearted books bout booze, and famously declared, “No pleasure is worth giving for the sake of another two years in a geriatric home in Weston-Super-Mare.” He was spared that fate when he died following complications from a fall and a stroke at the age of 73. His reputation has lasted well.