We can answer Owen Jones' question

With respect to Philip Alston’s report for the UN on British poverty Owen Jones asks us the following:

How did Britain in 2019 – one of the wealthiest societies that has ever existed – end up being damned by a United Nations report for condemning the poor to lives that are “solitary, poor, nasty, brutish and short”?

The report was produced by using a propagandist who then ignored any actual evidence and thereby was able to paint that picture.

These are the words of the 17th-century philosopher Thomas Hobbes; another British literary great conjured up by Prof Philip Alston – the UN’s special rapporteur on extreme poverty and human rights, and a bete noir of our crumbling government – is Charles Dickens and his vivid description of the 19th-century workhouse now being brought back in “a digital and sanitised version”.

Anything like Dickensian poverty simply does not exist in Britain today. Henry Mayhew’s work on the London poor which did so much to inform Dickens - and others - should perhaps be read again for moderns to see what that poverty actually was.

Britain most certainly has inequality, some have much more than others. But actual poverty? Real destitution, that modal experience of humanity over the millennia? Absent significant addiction or mental health issues - even there the UK doing very much better than some other rich countries - it simply does not exist. As Barbara Castle pointed out back in 1959:

The poverty and unemployment which we came into existence to fight have been largely conquered

That’s how Britain is so described - by ignoring reality.

No to No-Platforming

Universities are institutions dedicated to academia, intellectual enlightenment and cutting-edge research. Such goals can only be achieved in a climate of free discourse, debate and disagreement. However, as of late, it has become clear that there is a growing prevalence of intolerance on university campuses, with student bodies campaigning against academics such as Noah Carl, as well as prominent public figures such as Milo Yiannopoulos. This has resulted in University faculties cancelling talks and fellowships, and promoting a policy of 'no platforming'; whereby individuals holding views deemed offensive or unacceptable are prevented from contributing to a public debate. The case for free speech has been made time and time again, but in the current climate, we would do well to reiterate such arguments in order to prevent the degeneration of our higher education system, which would be to the detriment of both students and society at large.

I am no fan of Milo; agent provocateur and internet antagonist that he is. His views on several issues are misplaced, and personal attacks on individuals such as Leslie Jones are cruel and unnecessary. Yet hypothetically speaking, even if his views were supported by no one other than himself, would we be justified in silencing such views? Shutting down ideas cannot be justified simply by reference to their complete lack of support. To think otherwise is to assume our own infallibility. To silence an argument is to pre-suppose its failings. Only the airing of such views, and their rigorous interrogation would truly discredit them. Vocalising such views would ensure that those opposed are forced to reiterate and refine their arguments against; arguments that wouldn’t be made if such views were simply silenced.

With reference to the current ‘no-platforming’ that is currently taking hold of university campuses, it is clear that this basic principle is being forgotten. It can certainly be shocking to hear radical, extreme views we haven’t been subject to before - but this is simply all the more reason to hear them. Not least because to make a rational, well-thought-out decision on important issues we have to hear all sides of the argument.

University can be one of the most informative times for individuals, and thus when students are formulating their views on a range of issues, across a wealth of disciplines, it is imperative they have the tools with which to do so. Any argument to the contrary resting on the idea that students should be protected is misplaced; university should widen horizons not narrow them. Universities should actively be inviting academics and intellects who possess radical views to discuss them. They should be at the forefront of questioning the boundaries of the Overton window. This may result in issues that are lacking in evidence or sound arguments being publicly undermined – e.g. racism – yet wouldn’t this be a refreshing change? Sunlight is the best disinfectant. From seeing speakers who possess these views spout uncontested drivel on the internet with no accountability, to challenging them critically on a public platform. Inviting such speakers would allow reason to hold them to account and undermine any legitimacy their authors claim to possess. Such evidently misconceived arguments will fall prey to sound logic and evidence in opposition, yet this would not be possible when such arguments, speakers or ideas are not given a platform with which they can be interrogated on.

A popular argument against letting prominent academics or personalities speak is that giving them a platform would legitimise their views, with negative consequences. Simply letting them speak – so the argument goes - with no ability to retort, rebut or question their argument provides a mechanism with which to spread unsound arguments and ideas. I have a degree of sympathy for this argument – yet there is an obvious solution. Rather than, or alongside, universities providing a platform from which to simply give a speech, universities should require speakers to partake in genuine discourse alongside other academics, personalities or students who possess a wide variety of views on the issue being discussed. The likely outcome is a desired one; people developing ideas, promoting well-reasoned thought while simultaneously questioning hidden assumptions and logical fallacies of faulty arguments, allowing students to hone their positions on interesting issues.

If students who are at the heart of this endemic backlash against free speech cannot get behind this policy, we should question why? Are they not willing to have their views questioned, probed and tested? Surely they wouldn’t want to give credence to that accusation and would vehemently deny it, ensuring they are held to the same standards as those they oppose. They should relish the opportunity to highlight the erroneous views of speakers they disagree with. Or so we hope. To do otherwise is to admit the weakness of their position. Inviting a plethora of speakers, with diametrically opposing views, in the format laid out above, would allow contentious issues to be discussed at length and examined rigorously.

This does admittedly only serve to eradicate de jure ‘no platforming’, and would do little to eradicate de facto ‘no platforming’ which results from the intimidation and social stigmatisation that proponents of radical views from all sides of the political spectrum are subject to (think Pankhurst, King and countless others). However, big changes all need to start somewhere. Ending ‘no-platforming’ would be that start. A penchant for ignorance over knowledge shouldn’t be defended, least of all by institutions dedicated to the pursuit of such knowledge.

The Wealth Explosion: The Nature and Origins of Modernity by Dr Stephen Davies, a review.

Throughout human history, the Industrial Revolution stands out somewhat. From millions of years of subsistence existence, a few thousand of basic civilisation with widespread poverty, suddenly an explosion of wealth that at first glance comes from nowhere. It is economic history’s ultimate child prodigy.

As a person, it would be the woollen jumper-clad, floppy-haired and bespectacled young individual who single-handedly makes Esperanto the world’s mother tongue, builds a time machine and solves Brexit all in the same evening. Or at least we think - time travel, remember.

Dr Stephen Davies’ latest book examines how this bright young thing came to be and how it created what we call ‘modernity’. So, what is ‘modernity’? Davies attempts to provide some clarity.

He makes clear that one of the defining characteristics of modernity is innovation, a familiar echo of the ideas espoused by the likes of economic historian Deirdre McCloskey. Nonetheless, he is quick to point out that while McCloskey claims it was a culture of entrepreneurship that brought about the Industrial Revolution, such high regard for business was not exclusive to 18th century Britain.

Exclusivity to 18th century Britain is a natural line of inquiry for anyone reading about this phenomenon and most history books on this topic are based on the question of why Britain and why the late 18th century.

His focus on the ruling class makes clear and reminds us that for most of history, those who ‘gain resources through predation of various kinds’ often rule over those who ‘gain resources through production or trade’. This distinction is seminal to the whole book.

Necessary, but not sufficient.

It is not an easy task to get one’s head around one of the most important historical phenomena in history, but by using the idea of the nuclear reactor The Wealth Explosion provides a rather accurate analogy.

Only once there is enough fuel will a chain reaction occur, and control rods exist within to manage the rate of reaction. This analogy can be extended to the Industrial Revolution insofar as fuels are the contributing factors, and the control rods are the various ‘checks’ which prevent sustained economic growth, a key tenet of the Industrial Revolution. But unlike a nuclear reactor, removing ‘control rods’ would not result in a nuclear meltdown. Instead, we would experience sustained economic growth which would be, well, rather nice actually. The reason why sustained economic growth was able to continue unchecked was because 18th century England did not suffer from these ‘checks’ that similar societies with the necessary conditions did.

You may be thinking, isn’t this tautological - surely sustained growth means there were no countervailing forces? While it is easy to think that the way things happened was the way they had to happen or at least that the actual outcome was the overwhelmingly likely one, this is not the case. Once we put aside metaphysical caveats, we realise that ‘what ifs’ are a large part of what history is all about.

What if other societies in another part of the world, at a different period in history, had the necessary conditions for sustained economic growth and at least started to make the revolutionary progress we did in the 18th century? Davies makes some claims of the necessary conditions (uranium in the nuclear reactor for example) that are required for a society to become something like the modern economy we have today. Among these are a sufficiently large population and density in a significant part of the planet, a system of trade and division of labour that covered a large enough portion of the planet, and a population with an integrated economic activity in that area.

Nonetheless, this is not sufficient. Strikingly, this is illustrated by the problematic case of 13th century Song China which, according to current historical evidence, was not so different from 18th century Britain.

Song China - a sweet, sweet tune.

12th century Song China had surprisingly sustained economic growth. Agricultural output more than doubled from 96 to 1260, surviving restaurant menus offered a wide range of cuisine. This was bolstered by peasants being given full property rights (including the right of sale) by the previous Taizu and Taizong rulers leading to specialisation in producing various cash crops and even eventual commercialisation of agriculture.

It was a monetised economy based on markets rather than subsistence, taxes were paid in money rather than forced labour. The number of coins minted per year went up more than sevenfold in 88 years and, since this was not accompanied by inflation, the assumption is that it was matched by an impressive increase in production.

Song China had rapid and sustained technological innovation (e.g. mechanical spinning of silk and an advanced windmill) centuries before the  18th century. Most remarkable was the scale of manufacturing; as early as 1078 China produced on average at least 127,000 tonnes of iron per year, a level that would not be reached anywhere else until 18th century Britain.

Internal and external trade was both extensive and intensive; the lifting of internal controls brought about economic integration and made it the largest market in the world at the time. Chinese merchants’ supreme naval fleets (mostly privately owned) were sophisticated well beyond anything in the world for several hundred years, which led to trade as far as Africa, India and the Middle East.

All this was made possible due to the fact that by 1190, the population of China was 73 million and urbanisation was rapid and extensive. More people meant more innovation, production and wealth, rather than just more mouths to feed.

Get checked, get rekt.

Why did this fail to continue in the long term? Davies explains that certain checks prevented the revolution of modernity. Confucianism's unmeritocratic, hierarchical limitations on social organisation, the lack of access to energy to fuel mechanisation and the worldwide slump in economic activity in the 14th century are reasons put forward by economic historians for the lack of progress. Another (rather unconvincing argument) is that Song China had reached a ‘high equilibrium trap’ where supply met demand and there was no incentive for further innovation. This would have been only likely for a small sliver of time from the 14th to the 18th century.

The most plausible, however, is that it was the invasion of the Mongols by Genghis Khan in c. 1205. This scarred the society in a material and psychological way. The entire way of life including the rapid and extensive growth of Song China was associated with defeat and a new set of rulers took power which sadly halted growth.

The Military Revolution and The European Divergence.

Perhaps surprisingly, Davies argues that it was the 16th century military revolution that changed international relations catalytically to produce the revolutionary growth of the 18th century. ‘Gunpowder’ empires, the increasing use of infantry, artillery, and decline of cavalry led to powerful empires and military powerhouses.

Hegemonic powers such as the Ottoman, Chinese, and Russian empires didn’t exist in Europe. The Habsburgs failed, the French started warring over religion and the Dutch revolted. No country in Europe gained a decisive advantage early enough so, through competition, the powers were broadly balanced.

Therefore, in Europe, the ruling classes were incentivised to acquire greater resources. Consequently, these states now had a powerful incentive to actually encourage innovation which was bolstered by the citizenry who benefitted from the increase in innovation.

In the 18th century the changing of incentives (to win wars and emerge victorious from conflicts with other ruling classes), as well as the looming Malthusian conundrum, encouraged - or at least allowed - innovation. Davies argues: ‘simultaneously powerful social interests that gained from innovation were able to win the intense political conflicts that this caused and so the process was not aborted but sustained’.

Other arguments for the supposed ‘European exceptionalism’ include slavery and institutional factors from the Glorious Revolution of 1688 which were conducive toward innovation. The former can be debunked by the fact that no more than 10 per cent of the capital invested in early industry came from the slave trade, trade with India was more important as a source of capital and most profits came from saved profits via domestic agriculture. The latter is an insufficient explanation since most of the institutions mentioned in the analysis have been around for hundreds of years prior. Such explanations are used more as political weapons for the left and right, respectively.

Are we still living in Western Civilisation?

Davies posits a question which is both relevant in the sweeping culture wars between the left and right and the more academic areas of philosophy, theology and, of course, history. Despite its fairly academic nature, The Wealth Explosion is highly relevant to the cultural debates which often litter contemporary magazines about western civilisation and its supposed ‘Judeo-Christian values’, sadly often equivocated with modernity.

Indeed, the world today may be profoundly different from the way it has been for most of recorded history but does this amount to another civilisation, starkly different to the world before the Enlightenment? Progress as we understand it in the context of modernity evidently does not necessitate religious values but that doesn’t mean modernity has brought with it an inescapable Faustian pact, as Davies points out. Though there are some inescapable costs.

It is a testament to Davies’ intellectual honesty that he concedes some forms of human good and excellence are lost forever as a result of the modern world and its nature, much unlike many contemporary optimists such as Steven Pinker.

Is modernity fundamentally incompatible with human nature? Some, such as those subscribers to the Olduvai Hypothesis (which argues that the conditions of life for humans will revert to what they have been for most of human history) take the extreme view that it does indeed. There is always the possibility that it will, but the exciting thing about history - and economic history in particular - is that we are are the subject of our own study. So it is up to us to continue the promising trajectory and welcome modernity wherever it may lead us, albeit with a pinch of salt.

Socialism’s Great Leap Forward

One of the greatest tragedies of modern times began on May 23rd 1958, when Mao Zedong, Chairman of the People’s Republic of China, launched the Great Leap Forward. It was meant to turn China rapidly into a modern industrialized state. Instead it saw the production of much relatively worthless pig-iron and a drastic decline in agricultural output that precipitated a famine that killed millions. The lowest estimate is of 18 million deaths, but many, including Chinese historians, put it closer to 60 million.

The move was implemented by coercion. Peasant farmers were forced into collectives, while vast resources were diverted from agriculture to industrial operations. Peasants were forced to attend lengthy political meetings, and many were beaten into submission by zealous party cadres. Everyone competed to lie about production in order to please party bosses, with collectives sometimes quoting figures that were ten times those actually achieved. Believing the figures, central planners ordered more food diverted to the cities, leaving the rural population to starve.

To achieve the target for steel production, Mao ordered “backyard furnaces” into production. To fuel them, localities were stripped of trees, and wood from peasants’ doors and furniture was used. Agricultural implements were used as scrap metal to go into them, as were the pots and pans people used to prepare food with. As with food production, there was a mass cult of lying about steel production, with regional leaders telling the central rulers what they wanted to hear.

To instill revolutionary fervor into the masses, their local lifestyle was banned, derided as “feudalism.” Traditional ceremonies such as weddings, funerals, local markets and festivals were banned, replaced by party meetings and indoctrination sessions. Much that gave meaning to life in rural China was ruthlessly expunged. Many agricultural workers were diverted to steel production, as were those in many factories, schools and hospitals.

The violence intensified over time, as malnourished workers had to be forced to work punishing hours in the fields. Those who failed to meet standards were ritually humiliated or beaten. Many were simply murdered by being buried alive or thrown into ponds and rivers. Some estimates by historians suggest that, in addition to the deaths from starvation, at least 2.5 million people were beaten or tortured to death and one million to three million committed suicide.

The Great Leap Forward into socialism was in practice a great leap backward, as both agricultural and industrial output declined dramatically. Mao’s power within the party was diminished, and only reasserted in 1966 when he initiated his Cultural Revolution, a second tragedy in which millions more died. China’s agriculture and industry only accelerated after Mao’s death and the imprisonment of the Gang of Four by Deng Xiaoping. Deng’s abandonment of the collective farms and introduction of free markets and enterprise into the economy rapidly achieved in practice what socialism had failed to deliver. That so many lives were destroyed or blighted before the lesson could be learned was a tragedy for China and a lesson to the world.

If you tax everyone, send all the money through a bureaucracy, then....

…then you seem to get less of the output that you were originally trying to engineer in the first place. Leading to the conclusion that perhaps government and bureaucracy aren’t the answer to every problem:

Apprenticeships are falling despite the Government’s introduction of a new levy, the Public Accounts Committee has found. The number of apprenticeship starts dropped by 26 per cent after the apprenticeship levy was introduced, the report said.

In the 2017/18 academic year, there were 375,800 apprenticeship starts, compared to 509,400 in 2015/16, the last full year before the apprenticeship levy was introduced.

The apprenticeship levy forces companies with a wage bill of more than £3 billion to pay 0.5 per cent of it to the Education and Skills Funding Agency (ESFA), which is part of the Department for Education (DfE).

The companies have until April 2019 to draw down the funding, which they must use to take on new apprentices, or train existing staff.

The DfE has failed to make the progress it predicted when it reformed the apprenticeships programme two years ago, according to the PAC report.

It didn’t work under the first set of bureaucratic rules, it didn’t work under the second set of bureaucratic rules as reformed. Perhaps the problem is with bureaucracy and tax as a solution?

Which is to ask Thomas Sowell’s question again. “Compared to what?”

Perhaps it is true that there are insufficient apprenticeships in the country. This might be the manner in which all the Technical Colleges, which used to do the day release schemes, are now universities doing full time grievance studies courses. It is, theoretically at least, possible that the helping hand of government has been giving insufficient bureaucratic support to the endeavour to train Britain’s young.

Once you’ve stopped laughing at the back there we might just try observing reality. More government here has led to a worse outcome. The solution therefore is to have less of that government.

We’re often accused of having a slash and burn approach to government itself which is fair enough for we do have a distaste for it as an institution. Sometimes it’s necessary and we’ll put up with that. But we do also insist that the other side of the idea be given more of a hearing. Sometimes - often - government just isn’t the manner of gaining the end goal. Assuming that the goal isn’t just more government. Thus there are myriad tasks and problems we shouldn’t apply the government solution to. This apparently including how to teach the young of the nation to do something useful.

That is, the Telegraph article should read “Apprenticeships are falling because of the Government’s introduction…”

Intellectuals and Property - a non-rivalrous rivalry?

While property is often a defining topic in the centre right, in some cases, it also divides free marketeers and libertarians. This is most clearly manifested by the rivalrous debates on (the non-rivalrous) intellectual property. The Adam Smith Institute’s contribution is the paper ‘Patently Good’ by Ben Southwood which astutely outlines the liberal case for intellectual property.

The most ardent anti-intellectual property regulation ideologues are often driven by the premise that ownership derives from ‘mixing one’s labour’ with the land (homesteading). The argument goes, 'ideas are in essence free goods and, therefore, common property', in this context common property is equated not with collective ownership but with unrestricted access.

Thus if intellectual property is given the same protection under the law as tangible property (at least in principle) it binds all third parties thereby, preventing others from using their property. So, it is a violation of property rights based on the idea that one cannot have a right to the value of one’s property, only its physical integrity.

The issue with this line of reasoning is that the premise of this kind of ownership sounds awfully like the labour theory of value. Which means it sounds awfully wrong. Ownership does not and ought not to arise from one’s material relation to a good or the labour they put into its creation. If it was, we’d be having workers co-operatives left, right and centre. Did someone say proletariat revolution?

Property ownership arises from intersubjective claims on a good such as land. This is evident by the history behind English common law which was shaped by the feudal system of property where all land theoretically belonged to the monarch. Ultimately, property was indivisible in theory but it had several owners and could be bought and sold without altering the property itself. This led to a system which allowed intangible entities such as copyrights and patents to be recognised as forms of property today.

While the idea of ‘property’ is not malleable or an empty vessel it is the end purpose that matters. Its sole purpose is to make lives more prosperous by excluding others rather than being a static bundle of incidents of ownership, thus politics based on ‘public interest’ is not entirely vacuous. This is supported by the consensus that as long as property rights are ‘exclusive, universal, and transferable, they will form the basis of free markets leading to ‘socially optimal outcomes in the aggregate’.

When this purpose of property rights (which works pretty well) becomes blurred, it becomes open to slippery slopes by the political class.

Nonetheless, how do we know what is ‘socially optimal’? First, it is important to note, new ideas are usually great; the total benefit to society of an extra pound of research and development is four or more times the benefit to the firm. But how do we know how much patent strength is most conducive for innovation?

Let me present, your new sick obsession, the Tabarokk curve:

Here, it is important to distinguish between barriers to entry and costs to entry. The former generally discourages innovation while the latter allows economic rents to be reaped. Patents are not strictly a barrier to entry, for a number of reasons.

In medical research, patents provide an incentive to create and trial drugs which usually take an extended period of time. However, paradoxically, such laws often lead to a ‘tragedy of the anticommmons’ as discovered in biomedical research ‘more intellectual property rights may lead to paradoxically fewer useful products for improving human health’.

This is why the Tabarokk curve is a curve and not a straight line. Whilst restricting patents would cause firms to lose some of their monopoly rights, they would also gain the opportunity to use the innovations of others. Furthermore, without patents or copyrights, firms would have an incentive to be secretive and keep crucial information from the scientific and research community, inhibiting further research.

Why not use prizes to incentivise innovation? Well, empirical evidence reveals that they are unsystematic and unpredictable and since they are ex ante rewards, they did not correlate with how useful or popular an invention or innovation was. This proposal seems more motivated by dogma than evidence.

Property, for economists, is too normative and for politicians, it sullies their election victory. It isn’t the sexiest of topics. Nonetheless, it is not a black and white issue. Intellectual property laws, like all laws, exist to be conducive to a prosperous society and they should not be shunned under the pretense of some arbitrary libertarian creed.

Piracy and smuggling helped spark Britain's Industrial Revolution

Why did the Industrial Revolution begin in Britain and not elsewhere? Was it because Britain was an empire with resource-rich colonies? The economic liberalism of the British? Or factors “at home” like institutions, property rights, private property and abundance of coal mines in the North?

All of these factors contributed some extent. But if we think of other places or times with similar underlying features, such as Florence during the 16th century or Holland during the 17th century, we can see that the Industrial Revolution did not develop for these reasons alone. So, there must be more to the story, something that - together with the other factors - produced the Industrial Revolution.

A crucial, underappreciated factor was American demand from the Spanish territories and the associated piracy and smuggling in that part of the world. Without smuggling, the Industrial Revolution may never have happened.

Despite their historical reputation, most pirates did not live off hunting and pillaging ships. Pirates were largely dependent on attacking ports and settlements and facilitating illegal trade. Piracy was very profitable during the 16th and 17th centuries. But, once the British colonies flourished, piracy started being prosecuted more systematically. Traditional piracy declined by the end of the 17th century, leading the pirates to refocus their efforts on the booming smuggling industry. This lead to the Golden age of smuggling.

After the Treaty of Utrecht (1713), Britain was issued an Asiento licence by the Spanish Crown, allowing them to trade with Spanish territories through the South Sea Company - with 4,800 slaves annually for 30 years, and one cargo ship per year. Jamaica was the principal base for operations. This English company was quite profitable, even more so when it was done illegally. It was thought to control as much as one-third of the contraband in the Americas.

Precisely measuring the amount of smuggling is impossible - but historians have estimated that illegal trade by the South Sea Company reached at least 5.5 million pounds between 1730 and 1739. Additionally, there are the unknown figures of what was smuggled by third parties (directly or indirectly related to the South Sea Company), which would increase the total numbers. This is an extraordinarily high amount of money: 5.5 million pounds in 1713 is equivalent of 150 billion pounds today. So we can see the huge impact on the Spanish/American economy as a direct consequence of the contraband of a company like the SSC.

But let’s also consider the economic impact for Great Britain.

What happened when the SSC lost its right to trade in the Spanish territories? Well… the smuggling continued. The area between the Campeche Bay and Costa Rica became a home for illicit trade. It was in the region of Mosquito: 50 to 60 vessels annually sailed from Jamaica towards Belize and during 1762, the year when La Habana was occupied by the British, 96 merchant ships docked there instead of the 3 as was usual. Additionally, the Río de la Plata and the route of Buenos Aires were identified as an ideal way to introduce English manufactures, that would easily reach Peru and Chile.

So while Spain based the commerce between the peninsula and the American provinces in a monopoly system that benefited the monarchy, Sevilla and Cádiz but not much more, Great Britain looked to satisfy the American demand through legal trade, but also more profitably through smuggling.

Between 1740 and 1760, we already find the beginnings of the Industrial Revolution. But in the same time frame, there were other contributing factors:

• The Seven Years War (1756-1763), that meant Great Britain annexed Canada from France, and the decline of the French presence in the Caribbean.

• The opening of four free British ports in Jamaica in 1765.

• The American War of Independence (1776-1783), which meant for GB the loss of the colonies.

• The publication of An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith in 1776 and the spread of economic liberalism.

Taking into account this context, if the Industrial Revolution was already ongoing when commerce started being “liberalized” with America opening ports, and when the colonies took their independence, then it doesn’t appear that the Industrial Revolution was caused by economic liberalism alone (even if, for sure, the ideas contributed to its acceleration). Nor is it accurate to say that the Industrial Revolution was caused by the circumstances of the colonies in the north.

So, then, why did the Industrial Revolution happen in Great Britain? Of course, contributing factors as already mentioned as well as money from America used to invest in industries/machinery are to be taken into account. But, above all, it was because Great Britain was the nation that answered most effectively to the existing American demand.

Great Britain detected the growing unmet demand and responded, and it was through regular smuggling that the demand could be fulfilled. This commercial opportunity, provided by the market and the smuggling, led Britain to develop production capabilities and capacity that was essential for the Industrial Revolution.

Dr Lorena Carrasco is at the Universidad Francisco Marroquín (UFM) in Guatemala. She has a PhD in Medieval History and is a member of London Royal Historical Society and Asociación Española de Amigos de los Castillos.

The Great Society

Fifty-five years ago, on May 22nd, 1964, President Lyndon Johnson announced his Great Society program at Ann Arbor, Michigan. Its scope was breathtaking, aiming at nothing less than the total elimination of poverty and racial injustice in the United States.

Fundamentally, it came down to a series of spending programmes that aimed to tackle shortcomings in education, healthcare, transport, and the problems faced by people in cities and rural areas. Johnson had small working parties of about half a dozen people, working in secret so their initiatives would not be “derailed by criticism.” This meant that shortcomings, which might have been recognized and addressed as the programmes were being planned, were not identified and rectified.

In practice this involved vast spending schemes. The “war on poverty” started with a $1 billion appropriation in 1964 and then another $2 billion in the following two years. It involved dozens of programs such as the Job Corps, to help disadvantaged youths develop marketable skills, the Neighborhood Youth Corps, to give poor urban youths work experience, and the Economic Opportunity Act of 1964, designed to help young people from poor homes gain access to job training and higher education.

Its well-meaning, but ill-thought-out, idea was but to help the poor better themselves through education, job training, and community development, and to have them participate in the development of the programmes designed to help them.

It did food stamps, Medicare and Medicaid, and granted billions of dollars for states to spend on everything from educational research to library books and school buses. It provided money for slum clearance and urban regeneration. It tackled every perceived problem by providing vast sums of money to address it. While it undoubtedly achieved some positive results, critics pointed out that its biggest achievement was the creation of a giant bureaucracy that attempted to step into every aspect of American life, and to guide and steer it. They further claimed that the results it achieved were tiny compared to the input of effort and resources. Milton Friedman famously described such state welfare progammes as akin to throwing silver dollars at a barn door in the hope that some would slip though the knot-holes.

Critics from the Left suggested that its shortcomings were down to not enough money being spent, and blamed its failures on the Vietnam War sucking up the funds it needed. In retrospect it was a much-hyped failure, big in intentions, but poor in its outcomes. The monies diverted to fund it could almost certainly have achieved more in terms of economic growth and the opportunities this brings for advancement of poorer and underprivileged people, including ethnic and racial minorities.

The lessons are perhaps that big often doesn’t work, and that small-scale, carefully targetted efforts involving voluntary and private sector participation can be more efficacious. The legacy of the Great Society is with America still, in the form of costly entitlements that cannot be funded in the future, and which all politicians kick down the road for the next generation to solve.

The Greenpeace protestors rather misunderstand the purpose of a company like BP

There’s always an amusement to watching those who have no clue trying to discuss a technical subject. It’s that old joke about the typist trying to use tippex on the screen come to life. So it is with the Greenpeace activist trying to tell us all what should be done with BP. Or what BP should do perhaps:

So what should BP do? It should go 100% renewable, starting with abandoning all of its fossil fuel exploration plans, today, and become part of the solution to the catastrophic problem it has caused.

This is to entirely fail to understand Coase on the existence of the firm - as well as other bits and bobs of economics.

The firm exists to perform a task. The form of that firm will depend upon the task to be undertaken and the technology and structure of the economy around it. Whether a firm even exists - instead of a shifting network of contractors - depends upon those things.

All of which means that if we change the task then that current firm becomes an irrelevance.

We can approach the same point from the other way. BPs varied assets are optimised to the extraction of, transport, refining and marketing, of fossil fuel products. These are all done in markedly different manners than anything to do with renewables. We shouldn’t, wouldn’t and can’t repurpose them to building, say, solar panels. To think that “energy provider” equals “energy provider” is to think that the toy scooter maker should be building jumbo jets - they’re both transport, right?

Further, all that implicit and explicit knowledge within the company is about those fossil fuels. BP actually sold off the division that knew anything about polycrystalline silicon decades back.

If we have some new task that needs to be done then we need that new organisation, in whatever different form, to do that new task. The idea that oil companies should up and build windmills is absurd.

An important day for women

May 21st is an important day for women in the US, because it was on that date in 1919 that the 19th Amendment, extending votes to women, was introduced to the House of Representatives. It passed by 304 to 89, well above the two-thirds required. It passed in the Senate two weeks later, by 56 to 25, two votes over the required two-thirds. It then went to the states for ratification, requiring three-quarters of them to assent before it became part of the Constitution.

Its passage was uncertain, largely because most of the Southern states opposed it - indeed, many rejected it. By March of 1920, 35 states had approved it, one short of the three-quarters needed. It came down to the wire in Tennessee where state legislators were split 48 to 48. The casting vote was left to 23-year-old Harry T. Burn, a Republican. Although initially opposed, it is reported that his mother persuaded him to “do the right thing.”

The Amendment was declared carried in August, and US women finally acquired the dignity of becoming full citizens after decades of campaigning by fearless leaders. Some 8 million women voted in the elections in November.

Women in the UK acquired similar rights in stages. The Representation of the People Act 1918, passed by a coalition government, extended the franchise to all men, and to women over the age of 30 who met minimum property qualifications. In 1928, a Conservative government finally passed the Representation of the People (Equal Franchise) Act giving the vote to all women over the age of 21 on equal terms with men. Women, who had been second-class citizens in almost every culture in history, could now have their say in who was to represent them in the governments of the US and the UK.

May 21st saw another symbolic event for women. On that date in 1932, Amelia Earhart landed in Northern Ireland, having flown solo from Newfoundland. In doing so, she became the first woman to repeat Charles Lindbergh’s epic achievement of 5 years earlier. She had intended to fly to Paris, but a petrol leak forced her to land in a small field in Donegal. It’s reported in the Irish Press that her first request was for a glass of after, after which she casually mentioned, “I have just flown the Atlantic.”  

There have been women members of the Senate and Congress, and of the Commons and the Lords. There have been women Presidents and Prime Ministers in several countries. There have been women high achievers, like Amelia Earhart, in many fields and, except in a few countries yet to embrace the modern world, no-one thinks anything of it. But that date, May 21st, marked a symbolic early step.