How to succeed in communism
Nicu Ceaușescu died on September 26th, 1996. He was the youngest child of Romania’s Communist dictator Nicolae Ceaușescu, and was a close associate of his father's political regime. He was being groomed to succeed his father eventually. While studying Physics at university, he became First Secretary of the Communist Youth Movement, and then Minister for Youth Issues when elected to the party’s Central Committee.
His career seemed to be going well, despite his reputation as a heavy drinker and his involvement in rape incidents and car accidents. But it was permanently derailed when his parents were executed on Christmas Day, 1989, as the Communist government was overthrown. He was accused of holding children hostage, and of misuse of government funds, and was sentenced in 1990 to 20 years in jail. He was released in November 1992 because of cirrhosis, a disease he died of four years later, aged 45.
He illustrates what is the central problem to every dictatorship, including Communist ones. It is the succession, the transition to another leader when the current one dies or retires. Somewhat surprisingly, one solution is inheritance, the same practice as the kings and emperors of old employed. Ceaușescu had planned to have young Nicu succeed him. Fidel Castro was succeeded by his brother, Raúl. More common is to have a ruling council choose a successor, as happened with the Central Committee of the Soviet Communist Party.
The transition from one dictator to another is always an edgy time, especially when the changeover is contested, or when the designated successor is not thought up to the qualities of their predecessor. It is common for violence to accompany the attempted changeover to the new regime, as often happened in ancient Rome.
The most successful formula used by some Roman emperors was for the ruling emperor to adopt as his son someone who could be trained to become the natural choice as successor. A string of stoic emperors gave Rome over 180 years of peaceful transition, as Nerva adopted Trajan, who adopted Hadrian, who adopted Antoninus Pius, who adopted Marcus Aurelius. Alas for history, the much-praised Marcus Aurelius nominated his own son, the depraved Commodus, to succeed him. The peaceful transitions and the absence of civil wars led Edward Gibbon to write in his “Decline and Fall of the Roman Empire,”
“If a man were called upon to fix the period in the history of the world during which the condition of the human race was most happy and prosperous, he would, without hesitation, name that which elapsed from the death of Domitian to the accession of Commodus.”
The other successful technique for transitioning peacefully from one ruler to the next has been democracy. Allowing the population to decide periodically who shall rule them enables a changeover to be made, and a replacement installed. It has the other great advantage that the knowledge that they might be replaced acts as a restraint on democratic leaders that is not there in dictatorships. To paraphrase Popper, it’s not the ability to choose leaders that is democracy’s great strength. It is the ability to replace them. It stops them doing too much damage.
The problem with Orkambi
Orkambi is a very expensive drug to treat a relatively rare condition, cystic fibrosis. Jeremy Corbyn is suggesting that a Labour government would break the patent and manufacture a generic version. There’s a problem with this idea:
Labour has pledged to create a publicly-owned company to make cheap versions of medicines the NHS needs but cannot afford, such as Orkambi, which is denied to thousands of children and young people with life-shortening cystic fibrosis.
The problem being exactly the argument that is being used in support of the plan:
Orkambi campaigners welcomed Corbyn’s speech. Christina Walker, Luis’s mother, said: “My child’s future is being put in jeopardy by the behaviour of one pharmaceutical company: Vertex.
“But it’s not the first or the last time that excessive profits have been put above patients’ health, and with 7,000 rare diseases currently without an effective treatment or cure, our situation could be replicated many times over in the future if the government doesn’t intervene now.
It costs up to $2 billion to gain approval for a new drug. That money has to come from somewhere, the current system is to give patent protection for a limited period so that the investment can be made back. Not, far from it, to insist that people have a right to a profit. But so that people are incentivised to invest in the next new drug to cure one of those 7,000 diseases.
So, we change the system so that the patent protection doesn’t work, money isn’t made back, what then happens to capital going into developing the next set of new drugs? That capital vanishes.
Ah, but, of course! Government can make the investment! But as ever Mariana Mazzucato is on the wrong end of this discussion:
Prof Mariana Mazzucato, director of the University College London Institute for Innovation and Public Purpose, said: “It is welcome that the Labour party is addressing key failures of the pharmaceutical sector.
“When the government funds the development of new medicines, it must do so in a systematic way to make sure that the benefits reach the patients who need them.
“Instead, we currently have a system where the risks of innovation are socialised, while the benefits are privatised through dysfunctional uses of intellectual property rights, a financialised business model and a pricing system that does not recognise taxpayer investment.”
Government doesn’t fund the expensive part of drug development, the clinical trials.
But let’s leave that aside and think of what an actual government run drug development system would be. Including the one vital number we’ve already got. The NHS, using the NICE guidelines, will only pay £30,000 per qualy - quality adjusted life year. Orkambi doesn’t have any known as yet effects upon life span. In fact, the benefits in general are regarded as marginal. There are some 5,000 sufferers from cystic fibrosis who may or may not gain those marginal benefits (the drug doesn’t work for all cases).
That’s, at very best, a marginal case for investing to create this drug, isn’t it? $2 billion spent to gain, at absolute maximum, £150 million a year of those qualys. Without taking into account any of the costs of failures and so on.
Now let’s do the same thing again for truly rare diseases. Where there are some few hundred who suffer. We’ve still got our budgetary boundary there imposed by the efficient use of public monies.
The problem with a government run drug development system is exactly the same as that with a public drug payment system. The costs of developing drugs for small groups of patients don’t pass the public spending efficiency test. This being nothing at all to do with profit, capitalism, socialism, business or government. Drug development is expensive therefore drugs for small numbers of patients are expensive per patient.
Or, as we should put it, a government drug development process will - righteously - never develop drugs for any one of those 7,000 rare diseases. Which really isn’t the nirvana we’re being promised by cutting the capitalists out of the deal, is it?
Tackling the ozone hole
It was 45 years ago, on September 25th, 1974, that scientists alerted the world to the environmental damage being caused by chlorofluorocarbons (CFCs). The 'miracle compound,' freon, representing several different CFCs, had been invented in 1928 for use in refrigeration and spray cans. It was regarded as safe because it was non-toxic, non-inflammable, and largely non-reactive, unlike dangerous alternatives such as ammonia.
The study revealed, however, that CFCs made their way to the upper atmosphere, where ultraviolet radiation broke them down and released their chlorine to attack the ozone layer. The Earth's high ozone later shields the surface from much of the ultraviolet radiation that might otherwise increase cases of skin cancer in humans and genetic damage to many organisms. Research showed this breakdown was indeed happening, with a hole in the ozone layer over Antarctica that was increasing in size.
The international community sprang into action in what is regarded as a successful response to an environmental threat. The Montreal Protocol in 1987 banned the production of CFCs, halons and other ozone-depleting chemicals, and took effect from 1989. Industry responded by developing ozone-friendly alternatives to CFCs, starting with hydrochlorofluorocarbons (HCFCs), one of which is now used in motor car air conditioners. Hydrocarbon refrigerants began to supersede CFCs in domestic and commercial refrigeration. The manufacture of new CFCs virtually ceased in 1994, though some are still used in aircraft halon fire suppression systems until a safe and effective substitute can be developed, and very small quantities are still permitted for some "essential" uses such as asthma inhalers.
The ban began to achieve the desired result. Ozone levels in the upper atmosphere had stabilized by the mid-1990s, and began to recover by the early years of the current century. The ozone hole was observed to be shrinking, and recovery is expected to continue over the course of the century.
What made the action effective is that it used technology rather than trying to impose behavior changes. People still used air conditioners, but now with safe alternatives to the freon they had previously used. People still used spray cans, but now many of them used hand pump action in place of gas pressure, and the ones that still used pressure relied on different and more environmentally-friendly gases. Industry and people readily turned to the new alternatives because they required no lifestyle changes.
This is something many environmental campaigners today fail to appreciate. Calls for us all to "live more simply" are likely to fall on deaf ears, whereas calls for new and more environmentally-friendly technologies to be adopted are more likely to succeed. The move to replace fossil fuel vehicles with electric ones is gathering pace, as is the switch from producing electricity from coal and oil to generating it from the much cleaner gas, or from cleaner still solar and wind produced energy. People are unlikely to stop driving or flying in response to hysterical cries of impending doom, but they are likely to drive and fly by very much more planet-friendly methods. As with the reduction in CFCs, nations are already responding with alternative technologies that cut the carbon footprint.
The lesson of the drive to replace freon with non-damaging alternatives is that technological innovation succeeded where exhortations to change behaviour would almost certainly have failed. The solution is not to live more simply; it is to live more cleverly.
We're quite taken with this idea of making ecocide a crime
Michael Mansfield has an idea for us all:
That late-night kebab might be considered a guilty pleasure, but could it one day be seen as a crime against the planet? Will the time come when the only means of procuring a slab of Aberdeen Angus is from a dodgy dealer with a cool box? The barrister Michael Mansfield has suggested that we should have new laws against ecocide – practices that destroy the planet – and that under them, meat could be targeted. “I think when we look at the damage eating meat is doing to the planet, it is not preposterous to think that one day it will become illegal,” he said.
The thought is that people who destroy the environment - that’s the ecocide - should be prosecuted and jailed, along the same lines as those who commit genocide.
We do see the merits to this. The environmental movement, en masse, backed the idea of first generation biofuels a couple of decades back. Even brought the practice to fruition. Leading to higher CO2 emissions, the ploughing up of the land to grow said crops, even to significant food price rises at the same time. So, we get to jail Friends of the Earth and Greenpeace then. Sounds good to us.
We’ve currently any number of people telling us that economic growth must stop in order to beat climate change. Yet our actual science on the subject has more economic growth in the emissions pathway where we beat climate change than there is when we don’t. So we get to jail everyone arguing for the cessation of economic growth then.
We could be a little more controversial and suggest that nuclear power is part of that climate solution therefore people who protest against nukes should be jugged.
The particular delight here is that if ecocide is to be an actual crime then of course any case will have to be judged, on the facts, in a court of law. Rather than through headlines in the court of public opinion. Thus the actual facts of each case will out and we will indeed be able to confine the guilty.
The thing is, given the idiocies that varied environmentalists urge upon us we’re unconvinced that they should be wanting this legal change. For it is those idiot ideas that would be prosecuted, no?
Even so, we do think the idea has merit. For example, the abolition of meat eating would lead to a significant decline in the planetary ability to practice organic farming - the manure is a vital input. Some would say this is good for the environment leading to more of the efficiency of factory farming. Others would say that this would be bad, they object to that efficiency itself more than anything else.
Oh well, the only way to resolve such a matter would be to have a court case about it. Is the abolition of meat eating a case of ecocide? Which would mean, presumably, prosecuting Michael Mansfield for the crime to be able to hear the evidence and find out.
And who doesn’t relish the idea of putting Michael Mansfield in the dock?
Cornering gold
The date September 24th, 1869, is known as Black Friday because of the panic caused in New York by two unscrupulous speculators, James Fisk and Jay Gould. They tried to corner the gold market on the New York Gold Exchange, and would have succeeded but for the personal intervention of President Ulysses S. Grant. Grant's post-Civil War policy was to pay down the national debt and stabilize the dollar by selling Treasury gold at weekly intervals.
The schemers behind the so-called Gold Ring established personal contact with Grant, and used it to persuade the President that selling gold was bad for farmers. As a result, the sales (which kept down the price of gold) were suspended. Fisk and Gould began buying gold at Gould’s New York Gold Room. The price rose rapidly, making huge paper profits for the Gold Ring, it accelerated as others bought in to gain from the seemingly irresistible price rises. Fisk and Gould were on the point of cornering the market in gold when President Grant realized what was happening and ordered the release of $4 million in gold on Friday 24th. The move drove down the price and stopped the Gold Ring’s attempt to corner the market.
There was panic on Wall Street as hundreds were ruined, unable to meet the obligations they had speculatively entered into. Share prices dropped 20% within a week, and the US went through months of economic turmoil. It bankrupted dozens of trading firms and hit farmers, who were 50% of the workforce, hardest of all. Wheat prices dropped by half, corn prices by a third, with steep falls for other cereals. Export goods could not be shipped amid the financial chaos. There were runs on banks, and economic decline in whole sectors, though the President’s action is reckoned to have averted what could have triggered a nationwide depression.
Fisk and Gould bought expensive lawyers and narrowly escaped prosecution. They had in fact engaged in bribery of the Assistant Secretary to the Treasury, and the attempted bribery of the President himself. Fisk’s career was documented in W A Swanberg’s biography, “Jim Fisk: The Career of an Improbable Rascal,” and in the 1937 movie The Toast of New York. The man himself was shot dead by a love rival in full public view in a hotel lobby.
Sone critics of free market capitalism claim that this is what capitalism is all about: swindling and speculation at the expense of honest labour. But the truth is that Fisk and Gould were an aberration. They abused a system, using loopholes in the rules to do so. Free market capitalism is not the same as laissez-faire, in that it requires intervention to ensure fair play. When parties try to acquire monopoly powers, or to use other methods to gain greater rewards than they would obtain in a fair and honest market, the behaviour is referred to as “rent-seeking.” It is perhaps an unfortunate term, because it has nothing to do with the price you pay to rent a car or a home. Instead it is a technical usage, and far from being part of free market capitalism, it is used to describe behaviour that seeks to thwart free markets via monopolistic or regulatory seizure.
When this happens, governments usually step in with new laws and regulations to close the loopholes that were used. Although they are normally one move behind, each abuse makes the system stronger in one sense because it exposes the flaw in the system and allows government to remove it. The behaviour of Fisk and Gould would not even get started under the current rules that regulate behaviour in financial and commodity markets. Free market capitalism adapts and changes. True, there are some who try to abuse it, but fortunately there are financial journalists and investigative bodies on the watch for such abuse, and who can urge the adoption of practices to curtail it.
Well of course building on the Green Belt will solve the housing problem
A sensible proposal here for dealing with the housing problem we have in Britain:
A thousand "commuter villages" providing 2.1 million new homes should be built in the green belt near train stations to help solve Britain's housing crisis, says a leading Government adviser and academic.
LSE professor Paul Cheshire, who has been a Government adviser for over a decade, said building the villages within 10 minutes walk of the 1,035 under-developed rail stations would offer easy and quick commutes to urban jobs while producing as many new houses as have been built in the last 15 years.
The idea that we should build housing where we know people desire to live seems to have a certain good sense to it.
How do we know people desire to live there? Because we’ve a law against people doing so. We wouldn’t have such a law against building in the Green Belt if we didn’t think that people would like to live in houses built in the Green Belt now, would we?
Therefore, obviously enough, we can solve the problem of building houses where people would like to live by building those houses where we know people would like to live.
The only flaw we see with the plan is that there are still restrictions being imposed. Why not just say that we’re going to blow up the Town and Country Planning Act 1947 and successors? After all, the very reason we’ve got the laws is to stop the development of housing where we know people would like housing to be developed. And why are we doing that?
Sánchez's not so Modest Proposal
In a bid to prevent the fourth election in Spain in as many years, the acting Prime Minister, Pedro Sánchez, and his party, PSOE (the Spanish Socialist party), recently released 370 policy statements under their Open Proposal for a Commun Progresive Programme. Their aim was to bridge the gap between the PSOE and Unidas Podemos (Spain’s other major left wing party). Since then Ciudadanos (a centre right party in favour of liberalism), has announced a plan to abstain from a vote with Partido Popular (a conservative right wing Christian party) which had previously prevented Sánchez from governing but failed to achieve the necessary support from the Partido Popular. Unless an arrangement is reached by 23rd September, it is back to the polls for Spain, and the policies of the PSOE will almost certainly be part of any ensuing negotiations.
The PSOE manage to say a lot (i.e. enough to make 370 statements) without saying much, achieved thanks in part to their repetition of policies, for example their plan to end forest fires (numbers 45, 272, 277 and 287). It’s easy to say you support a cause when it costs you nothing. The proposal was primarily meant for Podemos and so PSOE know that they can throw in support for any cause without being held to it by the general public.
The PSOE claim to care about women as seen by their attempts at inclusive language, for example ‘ciudadanas y ciudadanos’ (367). The term ciudadanos already refers to all citizens but the PSOE also use the redundant term ciudadanas to both include women and pander to them but, unfortunately for the PSOE, actions speak louder than words. While they are in favour of condescending female quotas (219), surely it would be better to have policies that work for all regardless of gender rather than pushing policies that only work for some, and retrospectively trying to bridge the gaps (e.g. 40).
The party claims to want to help solve the problem of Spain’s infamously high unemployment rates yet only puts forward policies that are likely to worsen it. They plan to increase workers’ rights (by implementing restrictive firing laws) but fail to see that the problem with Spain’s labour market is demand side, so these policies are not helping anyone. These policies manage to make employing workers less appealing to firms. Their policies aimed at improving working conditions are great for those already in employment - and yet do nothing to reduce unemployment, as the problem lies not in making work attractive for unemployed people but rather finding them work to do. The proposal of a higher ‘interprofessional minimum wage’ (13) will fail to reduce unemployment, as it is those at the lower end of the income spectrum who will become more expensive to employers - hurting the poorest rather than boosting their incomes. What’s more, the PSOE are trying to cut down on temporary contracts (44). This will deter employers from hiring new workers as it will be harder to fire them and harder to assess their value to the firm before hiring them long term - one of those ‘well-meaning,’ virtuous policies which actually hurts the unemployed rather than protecting workers. The plan to ease unemployment by creating jobs in the public sector (42) is only a superficial solution.
The party appear sheepish in their refusal to amend the constitution to allow for independence referenda - a decision which is tactically appealing but morally wrong. When discussing Catalonia, PSOE want to start the ‘dialogue’ between the Spanish government and the Catalan government (350) - an empty promise. From a liberal standpoint, it is clear that the Catalan people should have the right to a referendum whether or not independence is, in one’s opinion, ‘right’ for the region. The PSOE have no real interest in entertaining the debate.
And yet the PSOE didn’t shy away from certain topics, for example, calling for the EU to recognise the State of Palestine, saying that they will work to promote this (348). Or, indeed, wanting to exhume Franco’s body and converting the Valle de los Caídos into a public space.
Perhaps the boldest policy proposal is the party’s desire to legalise and offer euthanasia on the current National Health System. Given that Spain is often praised for being at the forefront of healthcare (due to its score of 92/100 in the Healthcare Access and Quality Index), maybe Britain should take note of ideas like this. Although it does read a little oddly, especially for a party that is often opposed to individuals having the right to their body. A key example of the PSOE denying women the right to their bodies is their opposition to surrogacy (75). After all, why should we allow women autonomy?! The party labels all surrogacy (paid and unpaid) as degrading - irrespective of personal choice. Their aim to ban surrogacy is hypocritical given their policy of assisting women with reproductive difficulties (74).
Another way in which the PSOE want to deny women autonomy is by abolishing prostitution (69). Although they claim to support/empower women, they pass judgement on their choices - choices which are surely none of the government’s business. They will also make the poorest women less safe.
They talk about wanting to boost the Spanish farming industry and wanting to boost production while also wanting to reduce the use of chemicals (272). How can you increase crop yield and be anti chemicals? If you want to increase crop yield, it makes sense to allow the use of regulated fertilisers and pesticides.
Many of the policies lack depth, such as the plan to limit the length of a police officer’s career, in order to prevent corruption (244). The policy may help the PSOE as they are seen to do something but simply limiting the length of a police officer’s career isn’t not going to solve the issue. Those who are particularly motivated to cheat the system will just find new ways of doing so.
Spain is being put through the wringer by a man who prioritises his political success (i.e. getting more votes in a subsequent election) by refusing any deal (even with the politically similar party Podemos) over working to provide a government reflective of Spain’s previous election.
Herman Hollerith began data processing
Herman Hollerith filed his first patent application on September 23rd, 1884. It was entitled "Art of Compiling Statistics," and was a description of how a machine could mechanically process at speed punched cards containing information. The idea was simple, but revolutionary. Data could be input by making or not making a hole in the card. Thus in one row, a hole might indicate married, whereas the absence of one might mean unmarried. In the next row a hole might mean North of England, while the absence of on might mean South of England. The cards, fed mechanically at speed, would encounter teeth that slotted them into appropriate columns. A pile of cards in one tray might contain all those registered as married, living in North of England.
The data could be registered on cards with electro-sensitive pens, to be sorted electromechanically. Hollerith gained his doctorate at Columbia University with his "Electric Tabulating System," and went on to found The Hollerith Electric Tabulating System which took the world into semiautomatic data processing. His Tabulating Machine Company merged with others to become the Computing-Tabulating-Recording Company, renamed IBM in 1924.
His system proved ideal for the US Census Bureau, and enabled them to process date two years faster than the previous census had taken. Census bureaux around the world leapt in to buy his machines, along with insurance companies and others that lived and traded on bulk data. Hollerith's machines were used for censuses in England, Italy, Germany, Russia, Austria, Canada, France, Norway, Puerto Rico, Cuba, and the Philippines, as well as in the US.
When my uncle was chief wages clerk at a UK steelworks, later wages manager, Hollerith punch card machines were still in use in the early 1960s, and I sometimes helped him enter data on the cards for subsequent mechanical sorting. Electromechanical sorting was eventually superseded by electronic sorting, and we are now in a world where computers do in seconds what took sorters and scribes years to do previously.
Big data remains a controversial field. In insurance it can enable companies to select out or charge high premiums to those whose data indicates them to be bad risks. Political campaigns can direct their messages to individuals based on what their data indicates will elicit a favourable response. Obviously, privacy is an issue, but the advantages of being able to process data rapidly seem much greater than any downside. Going through data at speed can help us to predict all kinds of unpleasant stuff that would previously have seemed to come out of the blue, and in predicting it, can perhaps enable us to avoid the unpleasant things we might otherwise have fallen victim to.
It seems unlikely that we'll ever be into the "psychohistory" of Isaac Asimov's Foundation, where algorithms based on vast numbers will enable us to predict specific future events in detail. This is unlikely, largely because human beings, unlike atoms and stars and rolling bodies, have minds of their own, and can change them. It is possible, however, that broad patterns might be discerned from the data. Humans are wonderfully creative beings, fortunately, and will no doubt find ways of using to advantage the data revolution that Herman Hollerith set in motion with his 1884 punch card machine.
Banning private schools, another archaic and foolish idea from Old Labour
You would think that this subject had been settled long ago but it has hit the news again recently with Old Labour recycling some of their 1970s ideas. A motion to abolish private schools and redistribute their assets, backed by John McDonnell and having been agreed upon this conference, will be Labour policy from now on. Unlike some, I do not agree that Mr McDonnell demonstrates a hypocrisy in the argument considering he went to a private school. Indeed, McDonnell, himself, may be a good enough argument to support removing private schools.
There are well worn practical arguments - such as the cost and the impact abolishing private schools would have on the state sector. I believe these still stand and have not been sufficiently challenged. But, willing to put a few more nails in the coffin of an idea that intellectually speaking was killed years ago, I will put forward some more arguments (skip to the final two of the four points if short on time).
Firstly, there’s an underlying principle which underpins the whole argument against public schools: that they simply aren't fair. Now if there is anything worse than an over-emotional and under-defined argument, it is one that is only applied to certain areas. For if being able to buy a better education is bad then there are other areas where this same principle would need to be applied.
A 2016 article reported that more than a quarter of 11-16 year olds in the state system have been privately tutored at some point. Yet the reaction has not been to ban private tuition but to consider how to increase access. The chair of the Sutton Trust, Sir Peter Lampl said, "no-one wants to limit parents doing their best for their children, but we need to ensure that extra tuition is as widely available as possible. Otherwise, it will continue to widen the attainment gap." This is the discourse we should be having when it comes to private schools rather than a blanket ban campaign.
Secondly, the fact that many privately educated children going to Oxbridge or Russell Group universities not inherently a bad thing. In fact, there is actually a sort of market mechanism operating beneath it. Private schools are motivated to maintain or improve their brand through sport, notable alumni, appearing charitable and, importantly, sending their students off to the best universities. In order to do this, they try to attract the best students and will be prepared to sacrifice lost fees in order to satisfy their goals in the long run. Scholarships are offered to the best applicants and generous bursaries are offered to ensure that the school can get the best and brightest who will achieve and reflect well on the school. These students' fees are paid for out of endowments, donations by alumni and current fees. Those paying full fees because they are not as high achievers but want to gain access to the brand are thereby subsidising the fees of their disadvantaged but more gifted peers. As a result, a hidden market operates where there is an indirect transfer from the wealthy to the less-wealthy that benefits both parties.
Thirdly, there are many inequalities within the state sector. In the amusing, if not always properly thought through, documentary “How the middle class ruined Britain”, the presenter-comedian Geoff Norcott talks about how parents seek to play the system to get the best for their children. However, we cannot really blame these parents (who come from across the income spectrum) for trying to get the best for their children. It is clear that a market-based system would be a better way to allocate these resources rather than a socialist-style strategy of who can best exploit the bureaucratic frameworks.
Finally and most importantly though, there is a better alternative to both the current system of schooling and also to the Labour plan - school vouchers. In a previous blog post, “A Third Way for Education” a school voucher system is proposed as a far superior alternative to both our current divided system and forced attendance at state schools. It is time that the government realises that it should not have a role in the production of education but only in ensuring its provision.
It is clear that banning private schools is the wrong reform to this issue and is a massive step in the wrong direction. The state should not be wasting its time in the day to day running of schools. It seems it knows this too, as it has already begun to increase the number of schools run on contract by private companies. However, we urge a better alternative to allow choice and competition to improve standards and reduce division. Abolishing private schools will in reality do little to reduce either of those goals.
The seeming absurdity of a Hayekian welfare state
Or perhaps not so absurd, this is a point that we’ve been making around here or some years now. There’s a difference between a high tax and high redistribution society and one in which government actually tries to do things. The second, once government goes beyond what really must and can only be done by government, doesn’t work well. The first is rather more to taste.
To explain the coexistence of economic freedom and big government, this paper distinguishes between big government in the fiscal sense of requiring high taxes, and big government in the Hayekian sense of requiring knowledge that is difficult to acquire from a central authority. The indicators of government size in measures of economic freedom capture the fiscal size but ignore the Hayekian knowledge problem. Thinking about government size in both the fiscal and Hayekian dimensions suggests the possibility of Hayekian welfare states where trust and state capacity facilitate experimentation and learning, resulting in a public sector that is big in a fiscal sense but not necessarily more vulnerable to the Hayekian knowledge problem. Pensions in Sweden are used as a case to illustrate the empirical relevance of the argument. The new pension system represents big government in a fiscal sense, but by relying on decentralized choice it requires relatively little central knowledge.
It is this which explains why those icy Nordic social democracies do in fact work. They’re not to our taste, we think they’d work better without the tax and redistribution but they do in fact work. But if we look at the usual sources - the Fraser Institute, Heritage Foundation rankings - we find that they’re rather more free market and capitalist than we in the UK are, more so even than the US along many axes. True, they then tax until eyes water but do so in economically efficient ways. Not on capital but upon income and consumption for example.
This all being rather important of course. For there are those who insist we should be more like Sweden. Very well Polly, let us be more like Sweden then. Government might move more money around but it does rather less all the same. On the grounds that government can move money around but we’ve a fair body of evidence showing that government’s not all that good at actually doing anything.
We’d even be willing to discuss the issue in more detail. While we’re not, as above, in favour of the high taxation and redistribution we’d still be interested in at least exploring laissez faire plus tax.