The remarkable thing is how little natural capital matters to the economy

We agree with varied environmentalists upon the idea that we've got to include natural capital in our calculations of how well the economy is doing. Not entirely for Gaia worship reasons, nor because of some insistence that only naturally produced items matter. We still agree upon the necessity of measurement simply because we want to know whether the system is working, is sustainable.

We've also always rather liked the finding that the rich country which is expending its natural capital at the fastest rate is Norway. Seems that social democracy is easier if you're floating on oil, who knew? 

We thus applaud the ONS and its attempts to make exactly these measurements. The result of which is that natural capital really isn't very important:

The ONS concluded that the parts of the UK’s “natural capital” that it was able to estimate contributed £16 billion to the economy in 2015. Their asset value, which is based on their contribution to the economy over the next 100 years, was estimated at £761 billion. That compares with UK GDP — the value of goods and services in the economy — of £1.9 trillion in 2015.

The number that will be splashed all over the place is that £761 billion and it will be compared to that GDP. Entirely incorrectly of course. Stocks of wealth should be compared to stocks of wealth so, at minimum, the £761 billion is to be compared to household wealth (some £10 trillion) or better some measure of national wealth including government holdings.

Or we can do it the other way and look at income streams. Which is that £16 billion and the GDP of £1.9 trillion.

Yes, we should measure natural capital and yes, we should at least estimate the contribution it all makes to our welfare. It is, after all, important to know what is going on. The answer being that it's not an important part of what creates our welfare.

Certainly, we'd miss it if it were gone, decidedly miss it. But the interesting outcome of this measurement of natural capital is quite how much of our living standards doesn't stem from it at all but instead simply from the collective efforts of us humans in adding to, rather than extracting from, the value of that natural world.

Food waste just doesn't seem to be much of a UK problem

Big numbers are big numbers. But numbers do always need to be put into context:

Occasionally a statistic emerges that makes you despair at human folly. Yesterday, there were two. The first was that Britons throw away the equivalent of 86 million uneaten chickens every year.


Of course, it is not just chickens, and it is not only young people. An astonishing two billion potatoes are among the seven million tonnes of food waste that we throw away each year, and everyone is guilty of excessive waste, myself included.

Total number of chickens for human consumption in the UK is up around 1.2 billion a year. Sure, we could talk about the avian massacre to fill our bellies but a wastage rate of what, 7% or so, hardly seems excessive. That's even before we wonder whether this number is achieved by adding up the weight of all those Parson's Noses going uneaten. Potato consumption is of the order of 100 kg a head and 30 potatoes each might again be in that 4 to 7% or so range.

Compared to the 50% or so of food that rots between farm and fork in those places without a supermarket logistics chain, as the FAO tells us, this seems positively frugal in fact.

We can check this another way too. A chicken and a few kilos of potatoes per year is what, £5? Just to make some sort of assumption at all. The average family is still that two adults, two children of the nuclear family, equal to perhaps 3 adults. So £15 a year in such wastage. The average family food bill is £50 a week. Or 0.6% of that food bill is this "excessive" waste.

Which really isn't quite how we'd describe quite such an absence of waste.

The point we would take from this is entirely the other way around. History - as Irish history especially shows us - is littered with examples of people actually dying for lack of potatoes. Chicken was a luxury item, very much more so than even beef, until well into the lifetime of the more seasoned in years of us. We've now a system in which several Sunday lunches' worth of exactly those foods for each of us is merely a rounding error in our food supply.

Hasn't the world got better recently? Not least in our having solved PJ O'Rourke's great existential question, what's for lunch?

Merkel, Macron and the Monster

The World Economic Forum’s annual flagship event in Davos came to an end last Friday. Davos is well known for being the mecca for movers and shakers of governments and big business around the world where they get to address some of the major issues facing the world today.

This year, the minds of Macron and Merkel were again centred around globalism, but this time not on the major benefits that globalisation brings with it. Instead, they raised concerns about a monster lurking just under the surface in countries all across the world – the spectre of populism.

Macron pointed to his rival Le Pen in the French General Election who, in order to appeal to voters in France, proposed to have less globalisation and more protectionism. Merkel warned about the poison of populism and the problems that may arise from generalising about different nations and cultures, especially in combination with high unemployment and increased immigration as a factor for growing and sustaining populism.

One of the major arguments made for the rise in populism is the ‘neoliberal’ argument. Rising inequality and more competitive labour markets, as a result of globalisation, are often claimed to be one of the main driving forces for people turning their backs on classic ideologies and looking for alternatives that populist politicians like Trump and Corbyn provide.

After the fall of the USSR and the triumph of capitalism in the Cold War there was a surge in levels of free trade and economic freedom around the world. At the same time, right wing populism began rising. In 1980 populism started off at a vote share of only 1%, according to data from Timbro’s Authoritarian Populism Index, and peaked in 2016 with 12.3%. Looking at these stats, you might suggest that privatisation, tax reforms and globalisation are pushing voters into the arms of populists.

A briefing paper by Epicentre tests this thesis and reaches the opposite conclusion. In fact, they find that through a 30-year period economic freedom correlates negatively with authoritarian populism. Therefore, increasing taxes or trying to “protect” jobs, as some propose as a solution to meeting concerns within the public, will at best be ineffective and at worst lead to policies that restrict our freedoms or destroy markets. We’ve seen what this looks like in the previous century - it’s not pretty and we don’t want a repeat of it.

Similar results are reached in the Fraser Institute’s Economic Freedom Index 2017. Immigration has attained a significant amount of attention as another reason for rising populism. Trump partly won the presidency on his tough rhetoric towards immigrants. Similar rhetoric was used during the EU referendum campaign in the UK.

The Fraser Institute contrast the neoliberal approach of liberalized migration and free markets with the anti-globalisation movement. Parts of the anti-globalisation movement suggest that neoliberalisation creates an anti-immigration backlash due to increased competition between natives and immigrants and a race to the bottom because the capitalists see it as an opportune moment to drive down wages for profits.

Another argument against the neoliberal approach is a problem not directly related to the free market. Rather, it’s a problem with immigrants who supposedly place a burden on the welfare state which leads to the natives blaming them for threatening their welfare, also known as “welfare chauvinism”.  

Using data from 27 OECD countries, their results do not show a direct effect between immigrant population share and support for populism. However, models show that in countries with higher social spending as a share of GDP and lower economic freedom, an increase in immigration may result in rising support for populist parties. This led them to the overall conclusion that there’s no justification for either the socialist argument or the mercantilist arguments – as set out above. There’s no direct effect between the size of immigrant population and vote-share of populist parties, nor are there signs of more economically free countries with high support of populism.

With all this in mind, it would be counterproductive when populists suggest that we need to restrict immigration and put an end to globalisation to protect the welfare of natives and it would result in increasing polarisation. Luckily, Merkel and Macron understand this. However, in the wake of Trump’s election and Brexit, the world looked to Germany as a potential new global leader, but Merkel hasn’t managed to live up to such expectations due to a lack of inventiveness.

Macron, however, has a good grip of what it takes to meet the concerns that produce rising populism. He understands that traditional welfare states have failed. They are no longer able to provide actual welfare and care for their citizens, instead they’ve crippled innovation and created polarisation which in the end has led to flourishing populism. Protecting jobs in the disruptive economy is pointless and it won’t do any good for the individual. Neither does a tax system that tries to reduce inequality but disincentivizes people from working instead.

Not only would these neoliberal reforms rebuke the populist movement that cries for more protection and less globalisation. They would remove the centre of the problem, effectively mitigating the polarisation that the welfare state has created.

Generational challenges at the MoD

Difficult choices will have to be made on existing equipment commitments and future priorities in order to balance the books. Rather than face up to new challenges, the retrospective response at MoD has simply been to maintain capability across a broad spectrum of programmes and just allow equipment service dates to slip. This usually adds cost rather than saves money.

The new National Security Capabilities Review might do well to engage the public in thinking about its role in protecting the UK in contrast to the traditional approach. Usually the Service Chiefs prefer to think about fighting foreign wars and conventional defence (against Russia, China etc.) rather than adjust priority to the new forms of attack,

A new generation of traditional capabilities is planned to be brought into service, including advanced armoured fighting vehicles, frigates, fast jets and maritime patrol aircraft. The costs of some of these have been negatively affected by changes in the sterling–dollar exchange rate. And the capital and in-service costs of the Carrrier programme for example, will eat into the budget for the next 40 years or so. The question has to be asked: is all this machinery now necessary?

What is absent is any meaningful conversation around our participation as a senior contributor to NATO; a realisation that there are emerging threats at home (especially from Cyber attack) and a focus on what UK is good at: namely, Special Forces capability and some parts of expeditionary warfare.

Over the past decades, the UK armed forces have largely been involved in counterinsurgency and related counter-piracy and counter-proliferation operations. Our activities overseas could be said to be behind some of the rise in risk from home-grown attacks, and states like Russia have raised the stakes of the Cyber warfare game.

Apart from the temporary deployment of armed personnel on UK city streets to protect key facilities under Operation Temperer, the criminalisation of domestic terrorism means this is largely distanced from the military effort. Similarly effort in support of cyber protection, which is best achieved by combining military, security and civilian resources, has been largely ignored.

Abroad, UK defence needs to focus on capabilities that are increasingly expeditionary in nature. Whether that is to contribute to international efforts to counter terrorism in Africa, the greater Middle East and elsewhere or to participate in deterrent efforts in Europe alongside NATO allies. At home, it needs to understand and react to the fragility of our communications.

It needs to ask serious questions about whether we continue to maintain capability from Trident to Typhoon. There can be no sacred cows when it comes to costly military hardware and their efficacy. 

In her Mansion House speech in November 2017, Prime Minister Theresa May reflected on Russia’s and others’ challenge to the UK. She noted the way in which the information age had provided opportunities for those who wished to destabilise the UK to do so remotely whether through interfering in political processes or indeed threatening critical national infrastructure through malicious activity in cyberspace.

This was also reflected in a later speech at RUSI by Chief of the Defence Staff Air Chief Marshal Sir Stuart Peach.

Elsewhere in Europe, states such as Sweden and Denmark are rediscovering the necessity and benefits of an integrated approach to defence with a focus on flexibility and strengthening of combined military and civilian effort.

There needs to be much more creative ways of thinking about how necessary capabilities are organised and delivered, recognising that we fight wars with Allies and need to complement our resources rather than duplicate them.

Learning lessons from others and preventing attacks on our way of life and economy at home should be the new priorities.

Some things that are not right about the Britain of today

There's a great deal that's good about modern Britain. We eat better food, most of us live longer, and we have neat gadgets with which to enhance our lives.  But there are some things that have been wrong for a long time and are still wrong:

1. The shortage of UK housing and the lack of affordability for first-time buyers is caused by a shortage of land on which houses can be built. The 1947 Town and Country Planning Act has strangled cities by its excessive restriction of new building. Non-green land within the green belt – distressed land and farmland - should be given building permission, and the 1947 Act replaced by a presumption of permission, with procedure for objections to be heard and ruled upon. Within cities rights should be given to add an extra storey to existing dwellings.

2. The tax code is absurdly over-complicated, serving only to keep tax lawyers and accountants in business, and even they don't understand all of it. It should be simplified, with a minimum of rate bands and an end to the complex exemptions and allowances. Income tax rates should be low enough to incentivize, both at top and bottom ends. Business taxes should be low, with investment in new equipment and machinery taken off taxable income to boost expansion and productivity.

3. National Insurance is a costly anachronism. It is income tax by another name, but governed by different rules, rates and thresholds. What is called the 'employer contribution' is a fiction, since it comes from the wage pool that would otherwise be available for employees. National Insurance should be made parallel with income tax, starting at the same threshold. If government shies away from revealing the true level of income tax by merging them, NI should be renamed 'Employment Tax' and levied alongside Income Tax and by the same rules.

4. The 'war on drugs' has failed. Prohibition promotes street crime and makes drugs expensive and untrustworthy. Teenage gang members kill each other in turf wars.  The prisons are packed with drug offenders. They overload the courts. The ban on cannabis and ecstasy sets millions of ordinary people at odds with the police. Legalization would enable quality control, better prevention of underage use, and it would augment tax revenues. It would save billions as it freed up the prisons and the courts, and would enable addiction to be treated as a medical, rather than a criminal, problem.

5. Energy policy in Britain is confused and incoherent. The EU Renewable Energy Directive requires us to reach 20% from renewable sources by 2020. This has led the UK to require companies to use expensive sources such as wind power, and has led to both businesses and private homes paying higher bills. The government wants to cap energy prices by law, and there is a real chance there will be insufficient energy to meet UK needs. In fact solar has been falling rapidly in costs, and fracked gas offers the chance to replace oil and coal for lower costs and far less pollution. Instead of capping prices, the government should give energy companies the freedom to innovate and remove barriers to new entrants wanting to compete.  

6. UK transport leaves much to be desired. We are spending billions on the High Speed Two rail links, and not enough on improving infrastructure elsewhere. Meanwhile road transport is headed for electrification and autonomy, and the UK should be accelerating the switch by promoting the facilities needed to support this, and by removing the regulations holding it back. Other innovations that need to be planned for and encouraged include the use of delivery drones and of people-carrying drones as urban taxis.

7. Departure from the EU will give the UK the chance to customize its immigration laws. The overall cap on numbers has been unfortunate in that, unable to restrict flows from the EU, the UK has made non-EU nationals bear the brunt. This has included students and much-needed skilled workers in order to bring down overall numbers. As we leave the EU and regain control of our immigration system, the UK will be free to consider removing limits on people from Canada, Australia and New Zealand (the CANZUK area), to exclude students, and to have a points system that favours skilled incomers from anywhere.

8. Education at school level is improving, thanks to the role of Academies and Free Schools in breaking up local authority control and in extending choice to more parents.  It provides a good basis for moving to a Swedish system where parents can choose between state and private schools, taking the state funding to the school of their choice.  The private schools can be both profit and non-profit ones, and the government should facilitate their establishment by removing some local authority obstruction and red tape.  At university level the loans system should be changed to one where the fees are paid by government, and the student signs an obligation to have repayments made when they are earning enough.

9. The National Health Service doesn't work. The model of free state universal care paid from taxation and controlled centrally does not work. Its founders blithely supposed costs would go down as people's health improved.  In fact the demand is potentially infinite. The overall budget makes it a zero sum game in which procedures have to compete for funds. Ones given what they see as insufficient priority will always wave shrouds on TV and demand more funds. The NHS should continue to be free at the point of use, but should be replaced by an insurance-based system serviced by private providers.

10. There should be a more flexible and encouraging approach to innovation. The Financial Conduct Authority's 'sandbox' approach allows firms designated within it to innovate financial products without the wide regulation that applies to larger, more established firms. A similar scheme should do the same for new technologies. Much of the future will be made by driverless cars, drones, aerial taxis, genetic engineering and other innovations, and it is important that government acts to prevent local authorities restricting new business models to protect existing businesses, and does not do so itself. The EU has shown itself unsympathetic to new models such as Google and Amazon, but a post-Brexit Britain should be more receptive to innovation, whether in machines, in medicine, or in business models.

Another day, another round of terrible science reporting on vaping

This week, several high-profile media outlets are reporting on a new study suggesting that vaping causes DNA mutations which lead to cancer. While some were more cautious in their reporting, the Daily Mail and Lad Bible both opted for the headline “Vaping causes cancer”. Such reporting is irresponsible, especially since it omits significant criticisms of the study’s conclusions. Responding to the study, Prof. Peter Hajek (Director of the Tobacco Dependence Research Unit at Queen Mary University of London) said:

Human cells were submerged in nicotine and in off-the-shelf bought carcinogenic nitrosamines. It is not surprising of course that this damaged the cells, but this has no relationship to any effects of e-cigarettes on people who use them.

In the other part of this study, animals [mice] were exposed to what for them are extremely large doses of nicotine and this also generated some damage, but this too has unclear relevance for effects of vaping.

No comparison with conventional cigarettes was made, but in the text of the article, the authors acknowledge the key bit of information that is of crucial relevance in this story: Vapers show a reduction in these chemicals of 97% compared to smokers. They should have added that his may well be the level that non-smokers obtain from their environment.

Let me put this plainly. This study does not show that vaping causes cancer. The animal component of the study is especially poor evidence for such a hypothesis. It doesn’t take a genius to realize that subjecting mice to human-level doses of nicotine at frequencies far in excess of even the most committed vaper’s behaviour (puffs of 4-second duration at 30-second intervals for 3 hours a day) is a poor indicator of whether vaping is carcinogenic to humans.

This isn’t the first time that ill-informed, sensationalist reporting of the health effects of vaping has poisoned public perceptions of these products, which are currently saving lives as smoking cessation aids. When I first started vaping, I was alarmed to read claims in major news outlets (such as NPR) that hidden formaldehyde in e-cigarette aerosols could increase lifetime cancer risk by as much as 15 times more than if I was a long-term cigarette smoker. Unlike this week’s articles, NPR at least included responses from people who were aware of some basic facts about vaping. The study’s conclusions were, if you’ll pardon the pun, a load of hot air:

The authors had constructed a battery and atomizer combination that, when operated at a higher voltage setting, would mean that the atomizer ran extremely hot and constituents in the liquid would create thermal decomposition products, including formaldehyde.

The fatal flaw in the [study’s conclusions] is that under these conditions the vapour tastes so acrid and harsh that human users will not inhale it—a widely known phenomenon known as ‘dry puff’. It means that calculations of human cancer risks are based on conditions that no human user would tolerate even momentarily, let alone over a full life-time.

One-sided clickbait scaremongering on e-cigarettes can mean lives lost. It puts people off switching from cigarettes to vaping alternatives, despite the latter being at least 95% safer according to Public Health England. As our former Executive Director has highlighted, many smokers are discouraged from switching due to misplaced safety concerns:

23% of smokers said they hadn't tried an e-cig because they were concerned about safety, and of people who had tried e-cigs but gave them up, 35% said that it was because e-cigs might not be safe enough.

This week’s reporting genuinely infuriates me. I work in a think-tank that, among other things, concerns itself with liberal approaches to harm reduction; I therefore have a strong incentive to dig deeper when headlines warn that vaping causes cancer. Many of my friends do not but do read Lad Bible and The Daily Mail; they are more likely to take such claims at face value and adjust their views on e-cigarettes accordingly. Sadly, politicians are often in the same situation. Reporting that omits the fact that vaping is significantly safer than smoking cigarettes will make it harder to pass the sort of liberal regulatory reforms that will save lives. 

Governments really just aren't good at maintenance

We're told that the estate of the US national park system is just rotting away. Not enough money you see:

At Zion national park, a popular trail has been closed since 2010. At the Grand Canyon, a rusting pipeline that supplies drinking water to the busiest part of the park breaks at least a half-dozen times a year. At Voyageurs, a historic cabin collapsed.

The National Park Service is the protector of some of America’s greatest environmental and cultural treasures. Yet a huge funding shortfall means that the strain of America’s passion for its parks is showing. Trails are crumbling and buildings are rotting. In all there is an $11bn backlog of maintenance work that repair crews have been unable to perform, a number that has mostly increased every year in the past decade.

“Americans should be deeply concerned,” said John Garder, senior director of budget and appropriations at the National Parks Conservation Association (NPCA). The National Park Service, he argued, is hamstrung by a lack of resources and is in “triage mode”.

There's a long time internet friend of ours who runs a company in exactly this field. Taking on contracts from those governmental peeps to run the facilities at such parks:

On several occasions, I have wondered why progressives continue to be so supportive of paying too many government workers too much at the cost of reducing the government services they seem so passionate about.  This is something I seen in the public parks world all the time.  Arizona State Parks, for example, has about half of its employees in headquarters buildings rather out in the field serving the public while at the same time paying these headquarters staff very high salaries.  This is despite the fact that the agency has tens of millions of dollars of deferred maintenance it refuses to address.

I see this story repeated over and over in the public parks world -- when forced to choose, government agencies will cut back on maintenance and services to protect total staffing numbers, pay, and benefits.

This is something of a corollary to Parkinson's Law (s) about bureaucracy. Politicians are never interested in maintenance because no one does get to cut a red ribbon every time the Forth Bridge is repainted. And a bureaucracy isn't interested as above, the concern of that organisation is the survival and pay of the organisation itself, nothing more.

The truth being just that the long term provision of goods and services, the maintenance necessary to make that happen, isn't a process well dealt with by government. There is a reason why the Eastern Block, entirely government run, looked so shabby and it wasn't just the poverty which a planned economy produces.

It's also why all PFI contracts have the maintenance costs written into them, so that they cannot be cut to suit the political wind.

Look beyond the Brexit forecasts

The leaked report from Britain’s civil service, apparently showing that the UK would be worse off after the country leaves the EU, can be quietly forgotten. It is based on out-of-date assumptions about a world that has long since moved on.

One might start, of course, by asking why the report has been leaked at all—when it is only a draft that is far away from being presented to ministers, if it should get that far at all. The answer is, of course, that it questions the wisdom of Brexit. But then Britain’s civil-service establishment—traditionally hostile to change, keen to keep the UK a big fish in small pools of any sort—is anti-Brexit to its core. Nothing new there, then.

The thing is, that there’s nothing new in the analysis, either. Whitehall, and its East End branch the Bank of England, are fixated with the current conception of the ‘gravity model’ of trade. This is the idea that the volume of trade a country can do is most strongly related to the size of its trading partners their closeness to it. Not surprisingly, this model concludes that our best bet is to hang in with the EU, because there are some very large economies there (Germany, France…) that are about as close as any country could be. QED.

But as leading economists (and ASI authors) including Professor Patrick Minford of Cardiff, Professor Kevin Dowd of Durham and others have shown, this ‘gravity’ model based on geographic proximity does not fit all the facts. A look over the UK’s trading history reveals that it is wrong, and getting more wrong by the day. In the 19th Century, the UK’s main trading partners were the US, Canada, the West Indies, Argentina, Brazil and China. No near neighbours in that lot. Nor, today, does the gravity model account for the huge surge in the UK’s export services, particularly financial services, all around the globe. Barriers must play a part, some of these were strict quotas and blocks, some others on cost. Costs have been brought down nearby, but have been kept up or expanded elsewhere and we still have substantial transport costs. Transport and related costs are a better prediction of trade potential as Tim Worstall has argued previously. 

And the gravity model does not explain well the fact that we do so much trade with Anglophone countries—even though the US and Canada are much further away than the EU, while Australia and New Zealand are about as far away as any country could be. Often the Anglosphere (and the Brexit analysis is guilty of this) ignores the potential of trade with these countries. Bringing down barriers in countries with a common language boosts trade and investment. Bringing down barriers so those that can speak our language can move, live and build businesses here increases trade (from the USA, to India, Ireland, and Australia). It’s part of the reason EU trade has grown so reliant on the UK: we speak English and they’ve learned it. Proximity as a measurement alone underestimates British and Irish trade by 5 times, and there’s good reason to think we might expect a greater than currently modelled boost in trade with the rest of the world. Our share of trade with the (much closer) EU countries has fallen, from 54% in 2006 to just 43% today and that’s before we’ve even begun making it easier to trade with the rest of the world.

In fact, the traditional model of trade works much better at explaining the flow of imports and exports. That is because it is based on solid realities like comparative advantage—whereby countries buy things from other countries that are comparatively better at producing them. And on historic, cultural, language and trading ties. And the fact that EU-style protectionism—yes, it’s supposed to be zero-tariff free trade, but look at all the regulatory and other barriers that EU countries erect to keep out others' goods and services—just gets in the way of trade.

Remember too, that as road, maritime and air transport get so much easier and more efficient, more entrepreneurs are going out to more distant countries to exploit those comparative advantages and round-the-world ties, while moving goods over long distances has become much safer and cheaper. Meanwhile, worldwide internet connections have made doing deals with and exporting services to people in faraway places very much faster and easier than they were in the days of fax machines. 

Ask a silly question and you get a silly answer. Ask a sensible question and feed it into Whitehall’s theory- (as opposed to reality)- based calculating machine and you will get a very silly answer indeed. Very much worth leaking if that’s your prejudice, because no media reports look beyond the bogus ‘worse off out’ headline. But not exactly QED, Sir Humphrey. 

Looking at the world through Neoliberal eyes

In my 2015 lecture to Brighton University, “Looking at the World Through Neoliberal Eyes,” I made the point that neoliberals tend to compare the present with the past, rather than with some hypothetical imagined future.

Many on the Left tend to imagine what the world could become by dreaming up an idealized image of what it might be like. They compare that vision with the current world, using it to point to what they perceive to be its inadequacies and injustices.

Neoliberals tend to look at what the world was like in the past, comparing it to the present world to point to the progress that has been made, and to incremental ways in which yet more progress might be achieved. They look at the improvements in life expectancy, in deaths in infancy and childbirth, in control of diseases, in living standards, and they identify what they see as the principal sources of these improvements.

Some of this is down to advances in knowledge, especially of scientific and medical knowledge, and some of it is down to changing attitudes as more becomes possible. But a large part is owed to the increased wealth created by trade and specialization, wealth that funds yet more research and its application, and that makes it possible to afford improved standards.

Neoliberals look to improvements, of course, but more often than not, by using methods that have been tested and seen to work in practice. This is part of the empiricism that characterizes the outlook. When new ideas are tried, neoliberals are usually cautious, testing them carefully, ready to incorporate modifications when necessary, and to abandon that which does not work in favour of that which does.

Some on the Left claim that “true” socialism has never been tried, pointing to some hypothetical version of what socialism might be like in the future. Neoliberals reply that it has been tried many times in the past by people who acted in its name and declared it was socialism they were implementing. They point out that socialist governments have always failed, producing shortages, shoddy goods and services, often starvation, and sometimes mass murder. It has been tried and found wanting, not in theory but in practice.

Nick Cohen proves Hayek's "Road to Serfdom" correct

One of Hayek's points in "The Road to Serfdom" was that a government health care service, one financed and provided directly, would lead to a dictatorship. Nothing produces more giggles on the left than this very idea, that "free" health care would make us serfs if not slaves. 

Except, of course, it's true:

If you imagine a healthy future for Britain, or any other country that has put the hunger of millennia behind it, you see a kind of dictatorship. Not a tyranny, but a society that ruthlessly restricts free choice. It is a future that views the mass of people as base creatures jerked around by desires they cannot control. Expert authority must engineer their lives from above for their own good and the common good.

That's just the bien pensants telling the rest of us how we must live of course, not a new phenomenon, but then:

Here’s my partial sketch of how Britain would have to change to limit the costs to the NHS that stunted lives and avoidable pain will bring.

Yes, we must change our behaviour in order to suit the NHS. Which was the very point that Hayek was making. Once we have an institution, one that in modern Britain is closer to a religion than anything else in the collective belief system, then we must alter ourselves to suit the institution.

We must not eat sugar because that costs the NHS money, we must not be obese, or drink, smoke, because that costs the NHS. That all save it money is true, for shorter lives lead to less health care expense, but still, the mantra is that we cannot, must not, live our lives as we wish, suffer our deaths at our pleasure, from those pleasures even, but must change our ways to be worthy of the State institution.

It is the Grand Delusion again, that the aim and point of this government business is to change humans into fitting the system, rather than the system existing to allow us to be human in all our messy glory. New Soviet Man, that non-human that would make centrally planned socialism work, is no different in basic philosophy from NHS Man, the thin lipped and hipped prude who does nothing fun in order to die unhappy but at the convenience of the government run health care system.

Hayek really did warn us about this however much it makes lefties giggle.