Sweden's social welfare popularity

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Among the intellectual feast that was this summer's Stockholm meeting of the Mont Pelerin Society was a challenging and controversial paper on the popularity of Sweden's social welfare system [pdf here]. As Sweden has progressed from its outrider position on social democracy into a fairly mainstream OECD economy, the popularity of their generous and far-reaching welfare system has not diminished. Indeed, opinion poll evidence suggests it has increased.

The explanation was provocative. It is that Sweden is not a community paradise in which everyone accepts the state provision as fair and equal. Rather it is that changes to Swedish welfare have allowed people to tailor it to suit their own individual circumstances. The school reforms allow them to choose with state money the schools they would have chosen if they had had to pay fees direct to the school instead of via taxation. Similarly in areas like sickness and unemployment cover, people now routinely use private cover to top up the level of state provision to the degree of cover they prefer.

The rule is that it is easier for people to top up a modest state coverage than it is for them to sell off any surplus if the state coverage is more than they need. So topping up is now normal, allowing people to augment state cover to the level of welfare coverage they feel they need. The popularity of Sweden's system rests, it is suggested, on the fact that it provides through taxation something fairly close to what people would have chosen had they been spending their money directly.

The key to that is the scope for individual variation. In place of a one-size-fits-all blanket state coverage, there is opportunity throughout for it to be tailored to individual circumstances. It is a remarkable thesis, with lessons for the UK if it is borne out. Maybe we should be looking at ways that allow UK citizens to tweak and tailor our state services and welfare to suit their own individual needs?

Check out Dr Madsen Pirie's new book, "101 Great Philosophers."

Home education vs. the bully-boy state

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The presumption of guilt is eating it`s way into our lives: Home Education is the latest victim.

As a parent you are a suspect in the crusade against child abuse. That is the message to Home Education from this government.Through a staged Review and now onto a Select Committee, the drive has been to find ways to justify an assault on Home Ed., taking away parental rights, enforcing child interviews alone and invading the family in a way that singles out Home Ed. as a "prime suspect".

Yet the very idea that Home Education could be harbouring child abuse is one manipulated from Local Authorities because the Government wanted to hear something that would enable it to invade Home Ed. Certainly, cases like Baby P. have made the system determined to seek out and stamp-out child abuse whatever the cost, but such cases have not been anything to do with Home Ed., so why single out one group for inspection?

The drive to stamp out child abuse should not cause abuse of children, or their parents, yet this is what compulsory interviewing of childen will achieve. Home Ed. is a sanctuary of love and good education, it nurtures children and allows them to learn and develop at their own speed. Many children are bullied in school and parents deregister their kids to protect them from further harm. We can only imagine what harm will be done to these kids when they are forced into interview alone, not to mention the damage if the National Curriculum is imposed along with government educational standards.

Currently, Local Authorities are widely acting ultra vires in regard to Home Ed. They are lying to parents, purporting to have powers under the law that they do not have, trying to bully children into returning to school. This really is a bully-boy State.

101 Great Philosophers launch party

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altOn the 19th October the official London book launch of Dr Madsen Pirie’s latest work will take place. We are delighted to confirm that the Matthew Parris will be along to say a few words at the event.

101 Great Philosophers
is a concise and accessible guide to 101 of the greatest minds that contributed to the legacy of western philosophy. From the ancient Greeks to present-day thinkers, Dr Pirie employs concise entries, each limited to about 400 words, to give an overview of the contribution made by 101 key philosophers to the development of this fascinating subject.

Dr Pirie deliberately takes a broad view, including some from other disciplines who also have changed the way we think about ourselves, our society or our world. This book provides a sparkling insight into the lives and times of each philosopher covered - explaining just why what they had to say was so innovative and important.

If you are interested in attending the book launch, please contact Philip at philip@old.adamsmith.org.

Obama's acceptance speech

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"Before I go any further I just have to thank Barrack Obama for nominating me for this award. Without him I wouldn't have put my own name forward. Thank me. I am deeply humbled that the Norwegians have proudly seen fit to award me this prize for peace on the day we attempted to blow up the moon. Alas that proved to be unsuccessful, but we'll use the prize money to fund another shot at it. During the past 8 months, since my nomination, I've actively encouraged peace around the world. My fellow President Ahmadinejad has chosen to test fire rockets and continue with his work on nuclear physics. In the Pacific region my favourite little movie buff Kim Jong-il has been attempting to throw his rockets over Japan, luckily for us he throws like a girl. But he's continued with his pursuit of nuclear weapons. Allowable under my idea for a peaceful world where we are all armed equally, either with broken bottles or nuclear weapons. Or maybe even we can just play rock paper scissors at the future UN meetings, whatever we do we have to do it quietly.

It's not just overseas where my work has been blessed with healing hands. You could say that back in the United States I've gone down like Nobel's most famous invention and blown everyone away with how good I am at organizing this once great community. Peace is definitely the watch word of my administration and we will continue to promote that in America. Over the next few months we will be looking to replace everyone's car with a donkey and ending our dependence on oil as well as road rage. Guns will be exchanged for hot dog buns and free speech outlawed so no one can anything nasty to anyone else ever again.

Leaving those facts aside. It is fair to say that this award would not none have been possible without the good work of George. I owe him everything. I am indebted to him for the rest of my life and I dedicate this prize to him. Dubya! Thanks man."

The extraordinary efforts of Obama

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Obama took office on January 20. Gosh, it’s so long ago now. What “extraordinary efforts to strengthen international diplomacy" did he make in those first twelve days? Bowing to the Saudi King? Giving the British prime minister the Wal-Mart discount box of Twenty Classic Movies You’ve Seen A Thousand Times? “Er, Barack, I’ve already seen these." “That’s okay. They won’t work in your DVD player anyway.

Mark Steyn 'Who Really Won?' NRO.

The Archbishop of Canterbury caricatures consumers and fires at token targets

In this think piece, Dr Madsen Pirie makes the case that most people are not like Rowan Williams’ caricature of consumers who find no room for life’s finer experiences.

The Archbishop of Canterbury has urged families to get in touch with “the natural rhythms of the seasons,” and have “a sense of connectedness to natural processes.” Instead of a consumerism which “treats each person as essentially a hole that you have to keep stuffing things into,” he urges “a life that is balanced, that is at home with its material and human environment.” These are fine sentiments, in that most of us would want balanced lives rather than unbalanced ones, and most of us would rather be at ease with the world than at odds with it.

The good bishop moves onto more controversial territory, however, when he mentions specifics, in that he seems to have bought the entire agenda of “token environmentalism”. This is where green lobbyists pick out token targets to vilify, regardless of the actual degree to which they affect things.

So-called “food miles” provide one example. Dr Williams urges us to grow food in our gardens and on allotments rather than importing foodstuffs from places like Kenya. Many of the foods we import could indeed be grown at home, but with much more energy use than is required in warmer countries. Kenya, for example, is effectively exporting sunshine with its food crops.

Furthermore, many foodstuffs are more expensive to grow locally, so we would be banning cheaper foods from poor countries that are desperate to sell us them, simply to tick off token environmental boxes.

Dr Williams also appears to have taken on board the notion that air travel should be avoided to save the planet, and tried to make his own last year flight-free. In fact flying makes a much smaller contribution than do ocean or surface transport. It just makes an easier target for the tokenists. Budget airlines, which they denounce, in fact fly greener by using newer aircraft with engines that use less fuel, and by flying with fuller passenger loads.

Even the bishop’s notion of consumers as holes to stuff things into is a caricature. We all have our values and our priorities, and we express these in terms of the things we spend time and money on. The time spent working for the school bazaar cannot be spent on reading or listening to opera. The money we spend on music cannot also be spent on clothes.

Every action is a trade-off against the things we could have done instead. Of course we look down on people driven by a crass materialism which finds no room for life’s finer experiences, but most people are not like that. They express themselves through their choices, in lives that do indeed balance aesthetic and sensitive experiences with material comforts.

Published on Telegraph.co.uk here.

Public asset fire sale

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Gordon Brown's sell-off of public assets is too little too late.

The government is announcing a £16 billion sell-off of public assets. The include things like the Dartford Bridge, the student loan book, and the Tote – the UK state bookmaker.

Just on that point, we argued that the Tote should be sold off years ago. The government wanted to sell it cheap to a group of horseracing interests, a sale that ASI blocked by complaining to the European Commission – this is a business owned by the public, after all, not something in politicians' gift that they can transfer to a few rich, insider chums. After the EU had stopped all that, they could have auctioned the Tote and got a good price for it. Now, they will be lucky. Potential buyers like Ladbrookes are suffering in the recession.

I'm all in favour of privatization, and a recent ASI report by Nigel Hawkins identified £20 billion-worth. But this is the wrong time to sell public assets. Very few businesses, or even members of the public, have much cash to buy new businesses – especially badly-run state businesses which will need heavy investment to sort out. And everyone knows it's a fire sale – the government need the cash. Instead, the government should wait and sell these things when the time is right.

Gordon Brown sold the nation's gold reserves at a quarter of their value – they would have been worth billions at today's $1000-an-ounce price. He seems destined to sell things at the bottom of the market. He will be be lucky to get much of a price for the assets he is now grudgingly flogging off. And what's the point? That's the amount that the government overspends every month. Unless they cut spending, they will soon run out of assets to sell.

Dr Butler's book The Rotten State of Britain is now in paperback.

I realise that I'm blinkered but....

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Yes, I know, a shock isn't it, my admitting to being blinkered. But I am of course: the logic of unilateral free trade is unassailable so I never really understand those who would complicate matters. For example, there's a campaign going on about the GSP + access that Sri Lanka has to the EU. The essential point of which is that since, as is at least alleged, the Sri Lankan government is being beastly to at least part of the Tamil population then this special access to the EU market should be denied to all Sri Lankans.

All of which sounds really rather strange to someone like me. No, I understand the idea of having special access: it's not for any reasons of economic logic, it's all about politics here within the EU. There are enough lobbyists in Brussels to make sure that the EU will never become a free trader across the boundaries of the zollverien. Sad but true: the best that can happen is that some free traders can sometimes manage to have exceptions made to the rules that prevent the poor of the world from sending us their produce. Essentially this happens by pointing to a place which is so poor, so benighted, oppressed perhaps by the tricks of nature, and saying that you're going to impoverish these people just to please your industrial protectionists? These people? And so it has been with Sri Lanka.

But then we get to the part I really don't understand. Assume all the allegations are true. The Tamils, or some subset of them, are indeed being oppressed by the Sri Lankan government. Our response now is going to be to raise import duties and barriers to exports from Sri Lanka? Really? We're going to make ourselves poorer to protest the actions of a far away government? We're going to make the subjects of that government poorer to protest the actions of that government? Really?

In the name of protecting some of the poorest in the world we're going to make them even poorer? Surely the answer is to have even fewer trade restrictions so that we can continue to alleviate that poverty?

Food for thought

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The summer's Mont Pelerin Society meeting in Sweden featured some challenging papers, as you would expect. One of the most controversial suggested there is a trade-off between regulation and tax levels [pdf here]. Examining the countries on the basis of their economic freedoms, those high on the list also tended to have high levels of government spending as a proportion of GDP. This is not the expected result, and the claim was that the high 'freedom' score is gained despite this, with the other factors outweighing it. Furthermore, figures were presented which showed that high government tax share correlates positively with GDP per head and with GDP growth.

This runs counter to the general free market assumption that economic growth is hindered when government takes a large share of the revenues that could otherwise be driving innovation and expansion. The explanation offered was also challenging. It was that politicians want to run things; that's what they do. They can do this by high spending programmes or by regulation. The suggestion was that high regulation is more damaging to economic growth than is high government share of spending. Governments which regulate less are more likely to preside over higher growth, and will therefore have more to spend. In a sense they 'protect' their tax revenues by minimizing the regulation that would reduce them.

The view that regulation is an alternative to high government spending is certainly a challenging one, and might go some way to explaining why it is that some high tax economies are so prosperous. On the other hand, it does not seem to fit with recent trends in the UK, where an increased proportion spent by government has been accompanied by massive increases in regulation as well. If the thesis is sustained however, it will raise the prospect of governments being bribed to deregulate by the prospect of having more cash to spend…

Check out Dr Madsen Pirie's new book, "101 Great Philosophers."