Sugar is not uniquely bad

The government's new "sugar tax" is a bit of a mess. First of all, it's not a sugar tax—it's a tax on the sugar in soft drinks except fruit juices and those based around milk. Secondly, given that people can easily substitute into other sweet and calorific foods, a tax at the rate the government's proposing is expected to reduce calorie intakes by about 2 kcal each.

But I think that these are relatively minor concerns. After all, the government will probably follow up this baby step with more extensive measures, with a broader, more logical scope, and set at a higher level. The bigger issue is that a couple of papers in the latest issue of the International Journal of Obesity question the entire narrative that sugar is a unique, hellish, dietary evil.

Just as the diet-obsessed obsessively avoided fat in the 1980s (just read the book American Psycho—protagonist Patrick Bateman won't eat a single fried thing), those attempting to follow the best diet guidance avoid sugar today. The Harvard School of Public Health and the Swedish diet buraeu have set the trend. But what if the current anti-sugar crusade is just a rerun of previous dietary fads?

This seems at least possible, given these last two papers. The first, by Luc Tappy, argues that popular ideas about the especially bad nature of sugars in general and fructose in particular are based on misconceptions and misunderstandings:

In this closing perspective, the author exposes why targeting a single nutrient like sugar is in his opinion unlikely to be efficient in preventing obesity and metabolic diseases. He defends the proposal that the concept of fructose toxicity is based on major misconceptions of nutritional physiology. He specifically proposes that (1) sugar being a non-essential nutrient does not obligatorily imply that it has no beneficial effect; (2) alterations of blood triglyceride concentration and hepatic glucose production within the normal range may merely reflect adaptations to a fructose-rich diet rather than early markers of diseases; (3) overfeeding is a normal physiological response to exposure to an energy-dense, palatable nutrient rather than the consequence of ‘leptin resistance’; (4) we may presently overemphasize the role of biological regulations and of gene-related heredity when assessing the effects of fructose in particular, and the determinants of obesity in general.

The second, by Theodore Angelopoulos and James Rippe questions the validity and quality of most of the animal model studies that have been used to push the line that sugar is uniquely important in obesity or health (as opposed to over-eating in general). It says:

The effects of added sugars on various chronic conditions are highly controversial. Some investigators have argued that added sugars increase the risk of obesity, diabetes and cardiovascular disease. However, few randomized controlled trials are available to support these assertions. The literature is further complicated by animal studies, as well as studies which compare pure fructose to pure glucose (neither of which is consumed to any appreciable degree in the human diet) and studies where large doses of added sugars beyond normal levels of human consumption have been administered. Various scientific and public health organizations have offered disparate recommendations for upper limits of added sugar. In this article, we will review recent randomized controlled trials and prospective cohort studies. We conclude that the normal added sugars in the human diet (for example, sucrose, high-fructose corn syrup and isoglucose) when consumed within the normal range of normal human consumption or substituted isoenergetically for other carbohydrates, do not appear to cause a unique risk of obesity, diabetes or cardiovascular disease.

I am not an expert in nutrition, and I am not qualified to judge whether these papers are the best in the whole of nutrition. But the evidence on 'sugar is evil' seems far from clear. As such, even if the practical problems with the levy are solved, I don't expect the sugar tax to have many positive effects either on obesity or on health.

Sometimes we despair over this gender pay gap thing


So the Women and Equalities Committee has released its report on the gender pay gap:

The 19.2% gender pay gap that exists in the UK is much more than an equality issue. It represents a significant loss to UK productivity which must be addressed in the face of an ageing workforce, a skills crisis and the need for a more competitive economy. There is a clear case that tackling the underlying causes of the gender pay gap can increase productivity, address skills shortages and improve the performance of individual organisations.

It boggles that anyone could say that. Productivity is the measure of the value of output from an hour's work measured against the cost of employing someone for an hour. Thus the lower the pay on offer, holding output static, the higher the productivity is. The claim here is that women earn less than men but are as productive. The gender pay gap therefore increases UK productivity by the amount that women are paid less for their output than men are.

Fortunately the committee does get told the truth:

Professor The Baroness Wolf of Dulwich, from King’s College, London, told us there was little evidence that direct discrimination is a major factor in the gender pay gap today. However, she did acknowledge that discrimination had been an issue for older women in the past:

Among people under 40, in comparable jobs, with comparable time in the workplace, there is no evidence of continuing gender discrimination in pay. Among cohorts over 40, and especially those now over 50, we can still observe the impact of having started work in more ‘discriminatory’ times, but this is a carry-over.

Their major focus in this report was the pay gap for women over 40. That is part of the answer, this is the other part:

The Institute of Directors and Chris Giles suggested that, as younger, better educated women move through the system, we should see the gender pay gap fall. Mr Giles pointed to evidence that:

There is a generational shift … Women in their 20s closed the full-time pay gap in about 2004; in 2012, by the time they reached their 30s, it had disappeared. It has halved for women in their 40s since the data series began in 1997. In contrast, there has been no significant improvement for working women over 50.

That really is the answer. There most certainly used to be discrimination against women in career choice, working options after childbirth, education and so on. We've made the changes to society that take care of those: all we're doing now is waiting to see those changes pass through society along with the age cohorts. We're done.

Oddly enough it's a Guardian column that manages to get this right. There is still, even after all that education, change in social attitudes and so on, a pay gap. But it's not caused by employers at all:

Take a glance at the British Social Attitudes survey, and it might seem as if the British public still supports the traditional family model. But look more closely, and it’s clear that change is coming. When asked whether they agree with the statement: “A man’s job is to earn money; a woman’s job is to look after the home and family”, only 4% of men and women aged 18 to 25 agreed. There was little difference between the genders. Attitudes toward parental leave reveal a similar change. Asked whether paid leave should be divided between the mother and father, 44% of those aged 18 to 25, and 26% of those aged 26 to 35, agreed that it should, compared with just 13% of over-65s. Yes, baby boomers, your kids turned out all right. But we can’t start celebrating just yet.

The current ability to share parental leave comes from an analysis we published here: we know who picked it up, ran with it in policy circles and thus it became law. So we feel rather proprietorial about this point. Currently some majority of the population have those gendered opinions on who should be running the household and who should be providing for it. Our own opinion is that this isn't unusual in a mammalian species but we're perfectly happy with the idea that those attitudes will change at some time. It might well be this coming millennial generation that changes. Currently mothers earn about 10% less than non-mothers for each child they have. Fathers seem to earn (after adjusting for age and all that) some 6-8% more than non-fathers. American research shows that there is no pay gap for those with equal and equivalent familial duties. Primary carers of either sex earn less than primary providers of either sex.

If this is a problem then so be it, declare it to be a problem. But the solution is not in law nor is it with employers. It's with the attitudes toward family life of the population. And as the good little liberals we are we're entirely happy that people get to live their lives as they wish, make the decisions they wish to make. And if those decisions change then so be it.

As we have been saying for a decade now, and when we started saying it it was a very lonely thing to be saying, there are differences in the gross pay of men and women in the UK. The cause is not discrimination by the State, employers or the society at large, but discrimination by those who have children and how they wish to raise them. We might call it a caring pay gap, a motherhood pay gap, a child pay gap, but it is no longer a gender pay gap. We don't regard this as a problem that needs solving, you might. But given that this is the cause the only solution is however people decide to raise their children, something that's really rather up to them we feel.

How we end up with absurdities like the sugar tax


Quite how we end up with absurdities like the sugar tax is an odd one. From Osborne's point of view it is of course just pandering to whatever he thinks the chatterati are wibbling about this week. Rather than considering the economics of his action it's a bone thrown to the political dogs. Not really how we do want our economic policy to be determined. On the other side, from those pushing the policy in the first place, it seems to be simple and pure ignorance of the subject under discussion. Here is the leader of the campaign itself, Dr. Aseem Malhotra on the subject of sugar:

Sugar is NOT a “nutrient” so let’s not pretend it is

That's rather news to any- and every- one who has ever studied the subject of diet and what it is necessary for human beings to ingest.

For years spokespeople for the food and soft drinks companies have defended arguments calling for the regulation of sugar by saying we shouldn’t be singling out one “nutrient” when it comes to tackling Obesity. This was again repeated by the corporate affairs director of the Food and Drinks Federation in a debate I had with him on Channel 4 News last week. I pointed out that sugar has no nutritional value, has no biological requirement and therefore cannot be a “nutrient.”

No nutritional value? What?

Just to be clear the definition of nutrient is “a substance that provides nourishment essential for the maintenance of life and for growth”

Sugar contains calories. That's rather the point of the campaign that Dr. Malhotra is leading: the consumption of sugar leads to many calories being ingested. And we are really rather sure that it is necessary for human beings to ingest calories, they are indeed nourishment essential for the maintenance of life and for growth.

A crowd pleasing Chancellor listening to the gibberings of the grossly ill-informed. Now you know how we end up with absurdities like the sugar tax.

Doing a Harold Wilson


Just over three years ago coalition Prime Minister David Cameron promised there would be a referendum in the UK to remain in the EU or to leave it. He told colleagues that he was determined not to "do a Harold Wilson," referring to the previous 1975 referendum. On that occasion the Labour Prime Minister had negotiated meaningless and trivial "concessions" from what as then the EEC, but had claimed they represented a substantial change in the relationship the UK would enjoy with the rest of the EEC if it voted to stay. The UK voted heavily to remain, and the "concessions" were revealed to be inconsequential as the drive to concentrate more powers to the centre of the European project continued. UK voters thought they were voting to remain in an economic community, but they found themselves bound to what was increasingly a political union, indeed, one that changed its name to the European Union.

Despite his awareness of Wilson's action, and his determination not to repeat it, David Cameron appears to have done so. The renegotiation was not supposed to be about benefits and immigration, but about the fundamentals of the UK's relationship with the EU. It was supposed to be about the UK regaining ability to decide its own laws instead of having to accept ones decreed by the EU as a whole.

It is noticeable that the 'deal' - hailed at the time as an historic breakthrough - has scarcely been heard of since. Those campaigning to remain in the EU have hardly mentioned it, and the debate has simply been about whether the UK should remain within the EU as it is presently, or should leave. There is no status quo option. A vote to leave would engender some uncertainty, but so would a vote to remain. It would be a vote to remain within an EU committed to "ever closer union, with all the future uncertainties that this implies. The issue this time is not a vote about trivial "concessions." It is about UK sovereignty.

A fascinating question in The Guardian


A fascinating question in The Guardian to which we have the answer.

Where now are the earthly paradises from which an idealist can take hope?

Well, yes, where?

With Barack Obama on his way to a changing Cuba, the left is fast running out of countries to revere

In our lifetimes the answer, which country should the British left look to as the example of the good society, has changed. From the various Soviet abominations, through Nicaragua, some have more lately looked to Greece, to Argentina under the Kirchners, possibly to Brazil and Venezuela. There was a brief moment when Pol Pot was the man although that little embarrassment is generally smoothed over now. And of course Cuba's totalitarian poverty has always been there as a goal.

Yet if we were to rerun matters from when socialism was first thought of as a reasonable method of organising society, say the 1870s or 1880s, we'd have to admit that none of those places have done as well as the North Atlantic countries that almost all of us reading here inhabit. The largely capitalist, largely free market, economies are those that have delivered that list of wants and desires. Free at the point of use education, health care. Cheap food for all, the UK is currently falling down a bit on decent and cheap housing but most of Europe manages it. It is possible in our current day and age for a human to flourish as no other groups of societies have ever managed to permit, let alone allow or encourage.

That is, if we think of the stated goals then the road to that socialist paradise is some version of the capitalist free marketism. And we're really not all that sure how important the capitalist part is, even though we're entirely adamant that the free market part is vital. Because almost all of the disasters of those socialist attempts have come from the attempts to destroy markets rather than the simple nationalisation of the means of production.

There are of course possible variations within this system. The Nordics do rather more taxing and redistributing than we do for example. They are also notably more free market, robustly so, than the US or UK. But the end result of our 150 years or so of experimentation seems to be that if you want to make the common man better off then you're restricted to that narrow band of policy choices somewhere between classical liberalism and social democracy. We've tried almost all of the other schemes out there in one place or another and none of them have worked. Corporatist fascism doesn't, anti-marketism doesn't, the various flavours of socialism lite don't and the attempt to get to communism was a disaster everywhere.

That is, if you want to create utopia you really ought to have the gumption to note that by any historical or global standard, you are standing in it. Nope, it's not perfect, we too can find things that we think can be done better. We can even think of radical policies that we would hope to see enacted: but the basic underlying structure of a society that works seems to have been proven. Let the market rip and tidy up around the edges as much as you desire. Tax it more or less heavily as you wish to redistribute. We would tax less than others, they would redistribute more than we. But if anyone really does want to lay claim to the title of "scientific socialism" then it really is necessary that they take account of the evidence.

What actually can we prove works? A largely market, even free market, society with some level of taxation and redistribution on top of it. Nothing else does seem to.

So we don't need the BBC any more then?


We're being told that the BBC is really on a roll with their drama productions:

Whether it is down to Tom Hiddleston’s clean-cut good looks, John Le Carre’s scintillating plot, or the cinematic qualities afforded by its blockbuster £20 million budget, the show is a bona fide hit, to the delight of executives at Broadcasting House, the BBC’s central London headquarters.

Following hot on the heels of War and Peace, another lavishly-funded Sunday night epic, the corporation is currently enjoying a purple patch in drama, which insiders credit to a decision by Lord Hall of Birkenhead, the director-general, to raid tens of millions of pounds from the budgets of other departments, funnelling licence fee cash into the genre.

Super, isn't it lovely that the taxpayer is getting something for their scalping? However, not that this is what they think they're saying, even the BBC agrees that this is no longer necessary:

Lord Hall describes it as a “flight to quality”, and says that the corporation cannot hope to match the spending of an organisation such as Netflix, which plans to spend $5 billion (£3.5 billion) on original commissions this year.

“We can’t win against a Netflix or an Amazon, because their budgets are just so much bigger,” he says.

The argument in favour of the, or even a, BBC is that it provides something the market unadorned cannot or will not. Might be the scale, might be the type, but something that competition will just not produce. And here we have the BBC stating that not only can that market produce those goods, they produce them better than the BBC does.

At which point there is no argument for the BBC to be doing these things, is there? Or, perhaps, any things?

It's not obvious that the new Libor will be better than the old Libor


In a political sense it is obvious that the old way of calculating Libor had to change. But in the more economic, or even financial, sense it's not wholly obvious that this new method is going to be better. We've made this point before but there were actually two manipulations of that benchmark interest rate. One was varied traders trying to get their own bank to shade it one way or another in order to benefit their own trading books. This produced minor swings one way and another and the major losers were the trading books of other traders. Further, given that quite a lot of people were doing it the manipulations cancelled out to some extent (and if all had been doing it then there would have been no effect). The second was perhaps more serious although isn't what has been prosecuted. In the depths of the crash, when there wasn't in fact any interbank activity, Libor was still being reported as being reasonable. When, in fact, in the absence of there being any such lending, and no one would offer it even if someone asked (that being our entire problem, that the interbank market froze), the true Libor was somewhere up around infinity.

We're actually rather glad that second manipulation took place.

Still, politics being what it is the calculation method has to change:

Each day a group of banks publish the average cost at which they can borrow money from other banks. The measure was founded in the 1980s and grew in importance in the following decades.

But in 2012 it emerged that a series of banks’ traders had lied in their submissions, either to improve their own trading positions or to flatter the banks’ own financial position.

As a result the British Bankers’ Association surrendered its administration of the index, and the IBA took over.

The new system means the IBA’s computers are plugged directly into banks’ trading systems, and will record their transactions and so calculate Libor from actual market data.

The problem here is that not all of the banks on the reporting panel transact in all the Libor currencies and maturities on any particular day. They might well trade instruments, sure, but they don't all borrow across all those variants each day. There's thus something of a paucity of market information to be calculated. And if that interbank system freezes again, as it might well do in the next (yes, there will be another one someday) financial crisis then are we happier with the idea that reported rates will be soaring to infinity?

It's an interesting problem to which we have no ready answer. Is it better to rely upon the professional judgement of possibly corruptible experts or upon incomplete market information? If we had complete market information then it's obvious, but incomplete?

Of all the disability cuts, this week's may be the most sensible

Of all the disability cuts, this week's may be the most sensible

It is often baffling how some Budget measures cause outrage while others pass by barely noticed. We all remember the furore about the tax credit cuts. But how many people remember that the same cuts will be applied to Universal Credit, which is replacing tax credits? This week’s cut to the Personal Independence Payment (PIP) is another example. Jeremy Corbyn denounced it as punishing “the most vulnerable and the poorest in our society”. The ink had barely dried before Tory backbenchers made clear their disagreements with the Chancellor. But of all the cuts that the Conservatives have made to disabled people, the cuts to PIP may well be the most sensible. They are almost certainly the least damaging.

No to council housing, yes to housing benefit


That we have something of a housing problem in the UK is obvious. That we should be doing something about it equally so. However, those who tell us that we should be building more council houses are wrong. Yes, obviously, build more housing to bring the price down (by releasing more land to build upon) but housing on council tenancies is just the wrong way to go:

This paper provides new evidence on the effects of moving out of disadvantaged neighborhoods on the long-run economic outcomes of children. My empirical strategy is based on public housing demolitions in Chicago which forced households to relocate to private market housing using vouchers. Specifically, I compare adult outcomes of children displaced by demolition to their peers who lived in nearby public housing that was not demolished. Displaced children are 9 percent more likely to be employed and earn 16 percent more as adults. These results contrast with the Moving-to-Opportunity (MTO) relocation study, which detected effects only for children who were young when their families moved. To explore this discrepancy, this paper also examines a housing voucher lottery program (similar to MTO) conducted in Chicago. I find no measurable impact on labor market outcomes for children in households that won vouchers. The contrast between the lottery and demolition estimates remains even after re-weighting the demolition sample to adjust for differences in observed characteristics. Overall, this evidence suggests lottery volunteers are negatively selected on the magnitude of their children’s gains from relocation. This implies that moving from disadvantaged neighborhoods may have substantially larger impact on children than what is suggested by results from voucher experiments where parents elect to participate.

This is over and above the well known finding that labour immobility reduces employment levels. And in the British housing market there's nothing so immobile as a council tenancy.

We're always going to have some form of housing subsidy for those who simply cannot manage themselves. But it should be a subsidy simply paid out, not the creation of estates of immobile people.

Business rates are a tax on landlords, not on businesses

Business rates are a tax on landlords, not on businesses

There is such a thing as a bad tax cut, and business rates relief for small businesses is one of them. Despite what the Chancellor claimed in his budget yesterday, reducing rates will likely be a tax cut for landlords, not businesses. Business rates are a tax on non-domestic property, paid by the occupier rather than the owner and based on the property's rentable value. Since they are paid by the renting business, most people assume it is businesses who lose out because of them.