The absurd way we're ruled now

This caught our eye:

British households will need water butts in order to cut use by 20 per cent, says Environment Agency

The idea that we’re going to run out of water in a country as damp as Britain does raise an eyebrow. It’s to make the same claim that Italy is going to run out of excitability, or Finland stoicism.

The new National Framework for Water Resources, launched on Monday, warns that the average person needs to reduce their water use from 143 to 110 litres per day.

An Environment Agency spokesperson told The Telegraph this will include encouraging households to invest in water butts, dual-flush toilets and eco-friendly showers in order to cut waste.

The department has been working with NGO Waterwise to find ways the average person can reduce their water use.

Ah, Waterwise, that’s these people. Who state that their target is 100 litres per person per day. For no clear reason other than just, well, everyone should be smellier apparently.

As to facts:

The UK receives a large amount of rainfall, however there are limited natural or man made methods for water storage. This means that there is a relatively small volume of water available per person in the UK.

The solution is thus to build more reservoirs.

Apparently that’s not allowed these days. Despite the obvious point that we’ve already got a very useful, rather large and entirely efficient water recycling system in the country. It’s called “clouds”.

Leave all of that aside and assume that there really is the requirement to use less water. We have two methods in front of us. We can use the labour of an NGO, the government, society at large if you will, to hector the population into reverting to medieval practices instead of using modern technology to supply the desired resource. Rather than the efficient method of changing the price.

We desire to ration something, price is the efficient method of rationing. One of us lives where there is just such a system. A flat monthly fee - a low one - is paid for the usual reasonable supply for a household. As consumption rises above this the price per unit rises. A missinstalled stopcock led to a leak and a £600 monthly bill. People don’t - OK, people learn not to - waste water. And gardens simply are not irrigated with potable water, not at those prices they’re not.

That is, everything that is being said and done about water supply is, in this British scheme, wrong. There is plenty of water, we’re just not collecting it. Instead of collecting it the solution is to limit household consumption. But instead of doing that they efficient way - charging for it - we must be bureaucratically managed into the correct obsequies to the current religion.

This is absurd. And we should therefore stop doing it. Price water by level of consumption and leave the efficient method we’ve got, the market, to deal with the problem.

In praise of Budgens

Sadly, we think this is probably a mistake, just one of those things, rather than a planned response to panic buying. It’s still the right thing to be doing of course:

Outraged customers have threatened to boycott a UK supermarket after accusing it of hiking up its prices amid coronavirus panic buying.

British grocery store Budgens is charging £4 for a four roll pack of Andrex Supreme Quilts toilet roll, despite a £2.50 RRP sign on the packaging.

Sharing a snap of the loo roll from their local shop, one shocked customer tweeted: 'Disgusting behaviour at your Crystal Palace branch, raising the price of toilet roll. Anything to make a profit huh? #boycott #disgraceful.'

As the number of confirmed coronavirus cases in the UK has risen above 1,000, panicked Brits have stripped shelves across Britain bare of essentials, including toilet paper.

So, people panic. There is no shortage of toilet paper in any useful sense. However, people feel somewhat helpless, something must be done. Humans don’t always have to make sense and buying 6 month’s worth of loo roll today is something. So, that’s what is done - it’s something that actually is under the control of those who feel helpless in the face of the vicissitudes of the universe. Shrug.

But what is it that we want to happen with those smallest room supplies? We want what there is to be purchased and used by those who actually need it - preferably, need it for something other than the satisfaction of having done something in the face of the pandemic. Raising the price does that.

We can prove that raising the price does too - Budgens still have toilet paper on the shelves, the entire complaint here being that people won’t buy it at this price. Excellent, job done then.

That is, price gouging is the cure for panic buying. All hail greed and the price system.

We will admit that we’re not quite sure why this insistence on doing something, whatever, has fallen upon these particular supplies. That there’s going to be something, sure, we get that. But this thing?

Why? The Guardian’s still printing isn’t it?

We’d just add a comment seen elsewhere:

Customer: How come you’re asking £4 for loo roll, it’s only £2.50 at Tesco.
Shopkeeper: So go and get some from Tesco.
Customer: But Tesco haven’t got any.
Shopkeeper: Well when we haven’t got any it’s £2.50 as well.

Disturbing opinion poll findings about coronavirus

The Sunday Times uncovers something most disturbing:

By a margin of 52% to 26%, people say the government should declare a state of emergency; 63% support the introduction of food rationing, according to the YouGov survey for The Sunday Times.

It’s the 63% supporting food rationing that worries. Clearly, large numbers of people are less than fully informed.

Of course, if people mean that they want the Commissars to start insisting that each prole may only have one can of beans at a time then that’s alarming nonsense. That only 37% are against such is worrying.

But much worse is to take a step back from that and ponder the idea that 63% of the population don’t seem to understand that we’ve already got a method of food rationing. It’s called the price system. The important part here being that this idea that people front up their own resources in exchange for those of others is the only one that has proven to work. We’ve many thousands of years of experience of this too, everything from Diocletian’s price controls causing local famines through to observing Venezuelan weight loss plans under Maduro.

We have rationing, it works, why would we want to change that?

By all means argue for what you want matey

We regard this as a significant problem from the freedom and liberty point of view. Sure, of course, everyone is free and at liberty to argue and advocate for their preferred view of the world. And yet:

Henry Dimbleby: ‘We must turn down US trade deal if it means sacrificing animal welfare’

We disagree but of course that right to say it is to be defended.

He warns that imported meat can be of a lower standard. “There is no point in importing beef when we have higher standards of animal welfare or going abroad where there is a higher carbon footprint.”

Well, price might also be a consideration for people.

There being a trade off to be made there between those standards and costs.He thinks it would be “insane” to undercut British farmers by importing food that is produced to lower animal welfare or environmental standards. “It just doesn’t make any sense to me to create a world-class sustainable farming system in this country then import other food underneath.”

He points to American chlorinated chicken and hormone-treated beef. “It’s not right to do a trade deal with the States, where you let them import and sell us things that our farmers are not allowed to create.” Britain must also not lower its own standards to create a level playing field, he says.’

And there’s where we really disagree. “Must” isn’t arguing for liberty and freedom, is it? That’s a demand. That everyone else must be forced into the same trade off that this individual desires. At which point, well, who made you Caesar?

The Leon founder turned government food tsar

Apparently we have a system of governance where people are, quite literally, appointed as Caesars.

And to repeat a point we’ve made before. This insistence upon bans upon importation, the demand that such and such must be enforced, it’s the argument, the acknowledgement, that all don’t agree. For if all did indeed desire those higher standards, at those higher prices, then no one would ever buy the cheaper imports. To deny people the chance to make their own decision is that admittance that they would make a different decision. Thus the choice must be taken away so that the Tsar’s desires can be enforced.

And that, of course, is why trade actually should be free. For the restrictions are only the imposition of one set of desires upon all - that very tyranny of power which is the opposite of the liberty we’re straining to have.

This is just so terribly cute, don't you think?

As an attempt to make sure that nothing ever does happen this is pretty good. We have the precautionary principle, that nothing can or should be done until it has proven to be safe. And the cost and effort to prove safety is laid upon the shoulders of those who would do the thing.

Well, we disagree, but can see the concept. We run with the idea that everything should be tried - at small scale - except those things we already know to be damaging because that’s how civilisation advances. We find out what’s dangerous by doing those things and then stopping if they are.

But then we get this next constraint:

Revealed: Monsanto’s secret funding for weedkiller studies

The research, used to help avoid a ban, claimed ‘severe impacts’ on farming if glyphosate was outlawed

It’s not quite explicit as yet but it’s certainly implicit:

The secret funding of the ADAS studies was uncovered by a German transparency campaign group, LobbyControl. In December, LobbyControl revealed two pro-glyphosate German studies that were partly funded by Monsanto and published in 2011 and 2015 without the funding being declared.

“This is an unacceptable form of opaque lobbying,” said Ulrich Müller at LobbyControl. “Citizens, media and decision-makers should know who pays for studies on subjects of public interest. The studies also used very high figures for the benefits of glyphosate and for possible losses in case of a ban. These extreme figures were then used to spin the debate.”

The tendency of the results of scientific studies to favour their funders – called funding bias – is widely recognised in research on chemical toxicity, tobacco and pharmaceutical drugs.

That’s all getting very close to the demand that those who would do things not be allowed to fund studies showing the safety of doing things. That is, we’ve the demand that safety be proven but also that safety cannot be shown. Which will, of course, mean that nothing new is ever done. This will not be to the benefit of our future selves.

A value of independence is the ability to be independent

Whether or not the whole idea is worthwhile or not is up to the individual estimation of the balance. Views here about Brexit have varied as they have across the country. But there is an obvious point to be made, which is that independence does allow independent action. As the budget has pointed out:

The government will abolish the 20% “reading tax” on ebooks and online newspapers from December, although it is unclear whether publishers will pass the full saving on to customers.

Printed books and newspapers have always been zero-rated for VAT but until now their digital equivalents – such as books from Amazon’s Kindle service or online subscriptions to news websites such as the Times or the Guardian – have been subject to the sales tax.

It was the EU that insisted that digital versions must carry the tax, not being in the EU allows its removal. So too with this other announcement:

The chancellor confirmed in his budget that the government is to scrap the controversial tampon tax and abolish VAT on all women’s sanitary products from 2021.

Tampons and other women’s sanitary products currently attract 5% VAT. This will be dropped when the transition period for Britain departure from the EU ends on 31 December.

The decision marks a victory in the 20-year campaign by women’s groups against 50-year-old VAT rules that once categorised tampons as “non-essential, luxury items”.

Again, it was the EU that insisted the tax must remain - Gordon Brown even tried to gain permission to remove it and was told that he couldn’t.

We’d not claim that either of these are important in the macroeconomic sense, however much complaining either and both have led to. But it is nice to see that that independence does actually allow independent action, no?

We’ll also go on to predict an outbreak of cakeism. George Osborne tried to deflect the anger over the tampon tax by diverting the amount raised to a fund to “benefit women”. This was to be just a temporary measure while the work to convince the EU to allow the lifting of the tax bore fruit. Which, in these modern times, means funding those vocally active groups who claim they are representing women. Given the tax removal this fund, those grants, should obviously cease existence. There will be an awful lot of shouting about how executing that funding stream is proof that the government hates women. We can actually hear the sound of the indignant press releases being typed already.

For as Milton Friedman pointed out, there’s nothing so permanent as a temporary government program.

News Round Up: The ASI's response to the 2020 Budget

The Adam Smith Institute’s response to Chancellor Rishi Sunak’s first budget has featured in numerous publications, on television and radio. Some highlights include:  

City AM: The Adam Smith Institute called it “seriously concerning” and accused Sunak of being in danger of ripping up fiscal rules.

The think tank added: Spending like a drunken sailor will not create a thriving entrepreneurial economy. Expansive vanity projects won’t make us better off. Bureaucrats picking winners does not support risk-taking by entrepreneurs — the Government should be cutting red tape on innovation like limits on biotechnology, not presuming to know what is best.

The Guardian: The most savage attacks on Sunak’s debut budget came from the free-market think tanks, who view Johnson and his cabinet as being a return to Ted Heath and the budgetary laxity of the early 1970s. Matthew Lesh of the Adam Smith Institute warned that “spending like a drunken sailor” was not the way to create a thriving entrepreneurial economy”

This is Money : Matthew Lesh, at the free-market Adam Smith Institute, said: 'It is seriously concerning that the Government is looking at ripping up the fiscal rules. A Conservative government should not implement debunked Keynesian stimulus theories.'

He added: 'Spending like a drunken sailor will not create a thriving entrepreneurial economy. Expansive vanity projects won't make us better off.'

Politico :The extent to which the new approach tears up traditional conservative economics was perhaps best captured by the response of the Adam Smith Institute, a stalwart of the Thatcherite thinking that once defined Johnson’s party.

“A Conservative government should not implement debunked Keynesian stimulus theories,” said the group’s head of research Matthew Lesh. “Some infrastructure and public services spending, as well as supporting individuals and businesses during Covid-19, is necessary. But in the longer-run, spending like a drunken sailor will not create a thriving entrepreneurial economy.”

Other mentions include: The Metro, Daily Mail, BBC News, The Telegraph, The Independent, The Express, City AM (again), The Express (again), Politics Live,  Conservative Home, Morning Star, Breitbart, The Scotsman, as well as BBC national and local radio.

Michael Strain's "The American Dream Is Not Dead"

In response to those on both the left and right claiming the American working class is being robbed by China or billionaires Michael Strain’s book delivers a passionate defence that opportunity and meritocracy still exist in America. 

From longer holidays, to better cancer survival rates, to more affordable luxuries such as air travel, the standard of living of the average American has risen considerably since the 1970s and 1990s. He argues against the permanent hollowing out of the middle class by using Harry Holzer’s argument that a new middle class is emerging centred around jobs in healthcare, mechanical maintenance and some services. He also argues against the Conservative Populist argument that there are a record number of people being locked out of employment by showing that the long term unemployment rate (unemployment lasting for 27 weeks or longer) is back at pre-crisis levels (although 0.8% is still a lot of people to employed for over 6 months at a time).  

Furthermore, while there may be increased inequality, there are still considerable numbers of people that end up in different income quintiles to those that they grew up in (see figure 16). The ability to move up (and also down) different quintiles demonstrates meritocracy. 

While Strain says that he does not like the thought of more people falling down the scale, his argument that the American Dream ‘is the possibility - not the certainty - of going from rags to riches’, as well as potential costs, such as what this would mean for returns on investment, make a better case for why pursuing perfect mobility may not be a great idea.

What also helps is the inclusion of two chapters, one written by a progressive and the other an economic populist, arguing against Strain’s hypothesis. 

Conservative Populist, Henry Olsen focuses on how participation rates in the labour force among males is down 8% since 1960, as well as real wage stagnation for the bottom two deciles during mid 2000s. He links the shifts in these statistics to China’s accession to the WTO in 2001. 

Meanwhile, Eugene Dionne writes that Strain misrepresents Progressives as Luddites while they are in fact suggesting ‘that the fruits of this transformation should be distributed equitably, and that the bargaining power of Americans’ negatively affected by it should be enhanced.’ He also argues that since the 1970s, ‘the hourly inflation adjusted wages received by the typical workers have barely risen, growing only 0.2 percent per year’ which works out as an approximate 10% real increase. 

It’s this statistic compared with much of those contained within Strain’s argument which highlights the importance of using the difference inflation measures (PCE vs CPI). Strain argues that ‘a major advantage of the PCE is its more realistic treatment of how consumers respond to price changes’ compared to the CPI which Dionne uses.  As seen below, these two measures can yield considerably different conclusions and while both may be cherry picking, the discussion on which measure is right is too large for this post.

In simple terms, it would not be far off to claim that much of Strain’s argument relies upon the accuracy of PCE over CPI. In spite of this, the choice of using 1990 rather than 1970, which Dionne criticises him for, does seem justified. It would not seem sensible to allow those 20 years to distort the three decades of volatile, yet still reasonable, wage growth that have happened since.

Strain concludes by saying that although many may have been left out and require support, we should not forget that the current capitalist model has delivered prosperity for the considerable majority of Americans.  ‘We do need a stronger dose of ... stronger incentives in public policy to work and invest, more risk-taking, more basic research, more energy and dynamism.’ 

However, he admits that America needs a ‘strong safety net’ and also to address ‘deaths of despair’ and loneliness. However, he writes that the conversation of the latter needs to be more considered; ‘perhaps it is simply more enjoyable to order takeout and watch Netflix with your spouse than to go to dinner and a movie with friends. And if so, what’s the problem?’ 

The deliberate timing of Strain’s book makes it an important one for this US election. With Joe Biden likely to become the Democratic nominee he will be trying to make the case for the economic record of the administration of which he was Vice President. What may be more interesting, however, is how this will inform the debate within the GOP as they begin to contemplate which direction to take after Trump: loyalty to free-market principle or further down the route of conservative populism? 

There must be something different about the place

From the IA Richmond volume, “Roman Britain”, in the Pelican History of England Series:

The responsibilities of local government and increasing fiscal burdens tended in the later Empire to convert the decurionate, as membership of the tribal council was called, from an honour to an anxiety. But in the earlier Empire it was a prized distinction and an object of family rivalry and ambition. In Gaul, where such rivalry (aemulatio) laid the foundation of the French emulation, the effect was to run the committees into heavy expenditure upon building programmes, financed from both public funds and private pockets. In Britain there must have been something of this, but it cannot be claimed as an outstanding feature of Romano-British town-life. This contrast is plainly due to a different attitude in Britain towards Romanisation and its implications, and it has been held by notable authorities that it was based upon the relative poverty of British cantons as compared with the Gaullish civitates. But, if the Gallic manifestation of public spirit was due to an outlook characteristic of the province, it should not be forgotten that Tacitus cited certain points of view native to Britain; and prominent among these, no less clearly persistent than emulation, was the habit of acquiescence in taxes and demands so long as justice was observed. It may be asked what effect, as compared with Gaul, such an attitude may have had upon the relations between British landowners and their tenants, or upon cantonal taxation? If the exactions of the great Gallic landlords tended to provoke the tenantry to revolt and outlawry, British landlords were presumably held by public opinion to fairer conditions….

This was written in the 1950s about that period of time when Angles and Saxons were still the pirates one paid government for protection from. And yet it’s spooky how well it explains the gilet jaunes, isn’t it? What really was largely the same society, speaking the same Celtic language, worshipping the same Gods, of the same cultural expansion into Western Europe, was still this different across that mere division of the Channel. The British being more in favour of lower tax and less government aggrandisement of the two even then.

No doubt this is that cause for despair among Polly Toynbee and others who bemoan the reluctance of the British to be fully taxed - meaning about 25% more of everything than already happens - to provide for a proper social democracy. But we do tend to think that if the reluctance has been there this two thousand years, even despite the significant changes in the composition of the population, then it’s probably something embedded in being British really. We simply are a lower tax and less government sorta society.

The problem with alternatives to GDP

The OECD tells us that life is getting better in many ways. Which is true of course, life is getting better in many ways. But this report also shows the major problem with using any of the proposed alternatives to GDP as a measure of the economy.

But the report’s extensive data shows that not all aspects of well-being have improved: median household wealth and the performance of school students in international science tests have fallen, while housing affordability, voter turnout and income inequality have stagnated since 2010. People in the top 20% of the income distribution still earn over five times more than people in the bottom 20%.

Perhaps income inequality is a bad thing. Perhaps it’s a good thing. Whichever it is it’s a value judgement either way. Which is exactly the problem with these alternatives to GDP. Any and all of them smuggle in such subjective value judgements into something that is supposedly an objective measure of how we’re doing.

Yes, there are problems with GDP but it is at least objective - it’s the value added, at market prices, in the economy.

We think that GDP can be made better. That it should in fact be Net National Income we think is correct. But the extensions suggested beyond that are, we insist, a mistake. For they’re all attempts to smuggle into this meant to be objective measure entirely subjective value judgements. Like the merits or not of income inequality to mention just the one.