On the silliness of Geoffrey Lean

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There are useful conversations and discussion we can have about matters environmental: perhaps, for example, it is right that we give up a little bit of material production in order to reduce pollution. As we do already. There are also conversations and discussions where nothing of use can be achieved: for example, when some insist upon grasping firmly the wrong end of the ordure stained stick:

Green technologies also seem to provide plenty of jobs. Exploiting renewables now employs 2.3 million people worldwide, more than the entire oil and gas industries, even though they contribute a small fraction of the amount of energy. They provide several times as much work per dollar invested than fossil fuels, with other green measures like recycling and saving energy proving even more job-intensive.

That is Geoffrey Lean who seems to have become the Telegraph's point man on matters environmental. Something which is not to the credit of that newspaper for while what he's noted is true he notes it with approval rather than the correct approach which is to use the very same facts as a rejection of such schemes.

Jobs, you see, are a cost: yes, I know I've said it before but apparently I need to continue doing so. Having more people labouring away to provide our energy is a bad thing, not a good thing. It stops people from doing other things rather than labouring away to produce our energy.

If by some mischance a Green reads this, a simple and basic example. Imagine an economy of 100 people. 80 of them must labour to provide the food for all 100. This leaves only 20 to do the arts, the crafts, the medical care, lawyering, defence, banking and manufacturing. Over time we get better at that farming thing. We now need only 20 to produce the food for 100, we have perhaps 50 doing manufacturing and 30 doing the services. Times and technologies move on again and we need only 2 to feed us all, 12 to make things we can drop on our feet and 84 can run creches, tend the sick in the NHS, write Grand Theft Auto and appear on the X-Factor.

Roughly speaking that is what has happened in the UK economy over the past couple of hundred years. We have become wealthier by reducing the amount of labour required to produce food and things and services meaning that we can produce more of all of them to share among us out of the labour we have available. We've even, over the same time span, gone from the majority of everyone's time being spent in labour to the minority of it.

A useful shorthand for this process is "we've got richer". We have done so by making all the tasks we face less "job-intensive". Mr. Lean, and he's not alone in this among the deeper green parts of the political spectrum, seems to believe that we'll get richer by increasing job-intensity rather than reducing it.

This is the economic equivalent of declaring that apples fall up to the tree. How can anyone have a useful conversation or discussion with someone promoting such nonsense?

Freedom, fundamentalism and Johann Hari

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In The Independent, Johann Hari sets out what he thinks a Tory win would "really mean". The first half is an uninteresting and unsubstantiated attack on bankers and the money that they give to the Conservative Party, while the second half is a bigoted attack on those he condemns as "religious fundamentalists".

The" religious fundamentalists" he is referring to are parents who want to set up their own schools. But it is not parents, disaffected by the sclerotic state system and wishing to find a haven for their children amid government failure, who are the real fundamentalists. It is the likes of Johann Hari himself. The kind of fundamentalism that Hari proffers is a political fundamentalism that denies the private sphere in toto. It is the mark totalitarianism in its denial of the freedom to choose and the resulting differences.

If imitation is the best form of flattery, I'll go one better and quote Mario Rizzo at length on this issue:

The market is the pre-eminent pluralistic institution. It enables Muslim, Christian, Jew, Hindu, Buddhist and Atheist to live in harmony with each other because each individual in these groups can engage in voluntary trades with willing partners. We cannot, however, trade with everyone at once. Specialization and cost-efficiencies mean that sometimes people will have to go elsewhere to get what they want.

Even more fundamentally, private property involves the right of private individuals to make decisions about resource use. And since some uses are incompatible with others, private property must imply the right to exclude. We cannot provide everything to everyone at every location at every moment.

I couldn't have said it better myself.

How to achieve a Digital Britain

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In July, the government released the ‘Digital Britain’ white paper: their vision for putting the UK at the “leading edge of the global digital economy”. Within this is a plan for every home to have access to ‘superfast’ broadband rates of 40-50 megabits per second by 2017. This aspiration would be achieved by government intervention, and – surprise surprise- funded through more tax. In this case, a 50p-a-month charge on fixed phone lines.

Plenty of government failures start off as honorable aspirations. It would be far better to let the public decide the technology they want (many people are happy without broadband at the moment), and let suppliers respond to demand accordingly. Instead, the government might implement a regressive tax in which the poor pay £12 a year for a service that the better off tend to consume.

The report is unclear on how exactly the revenue raised will achieve universal broadband. Team this with governments' general inability to plan and implement policy in an area they know little about, and it is unlikely the project will be finished on time, on budget or even at all. Nevertheless, the government wants this legislation to go through in the spring.

Such shambolic ideas often go down rather well in the Houses of Commons, but not this one. The proposal was roundly criticized by the Commons business, innovation and skills select committee this week as “regressive and poorly targeted”. They remarked that “early government intervention runs a significant risk of distorting the market”, and questioned the logic behind the spending commitment given the dire state of public finances. Instead, the committee recommended market-based reforms effective in spreading access to high-quality broadband, such as cutting tax on fibre-optic cables, and increasing competition amongst suppliers. While the committee doesn’t have the power to strike down the government’s proposal, they have recognized that the power of the market will achieve outcomes far cheaper and faster than government intervention.

They must have been reading Eben Wilson’s Digital Dirigisme.

PCS strike

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I was accused of trying to shoot fish in a barrel when I proposed a blog on the Public and Commercial Services (PCS) Union’s ballot for strike action by civil servants on Thursday. However, there is something more universal that is bugging me about it.

Mark Serwotka, the PCS General Secretary, argued that their members should be spared the ‘cynical attempt to cut jobs on the cheap’, because the union had proposed cuts and savings in other sectors.

As I mentioned in my blog post on the Unite and British Airways battle, this is a common tactic for trade unions. However it is not exclusively theirs. President Obama also did this in the earlier stages of the healthcare debate. He argued that Obamacare wouldn’t be as expensive as his critics said it would be, because savings could be made by reducing inefficiency in Medicare and Medicaid.

My problem with this sort of analysis is this: Why should the government’s duty to taxpayers to cut spending be ransomed against plans for more spending? Why cant they just cut all unnecessary costs as and when they identify them?

The solution is to both make the savings as the PCS Union identified them (if they actually are real savings) and then also cut the jobs and payouts of bureaucrats who do very little for the country’s productivity. I can see no earthly reason why we should be limited to one or the other.

Scrap renewable targets

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New forms of energy are great. I would love to see the day when electric cars run as powerfully and cheaply as petrol-powered ones. But that is very different from jacking up prices to consumers by imposing ridiculous targets for renewables, especially given the growing uncertainty surrounding mainstream climate change predictions. The only answer is to scrap the renewable targets and to find other, more efficient ways of meeting Britain’s energy needs. That will probably mean better gas-powered plants; it might even mean more nuclear. It certainly shouldn’t mean building thousands of expensive wind farms regardless of cost at a time when firms and families across the country are facing years of austerity.

Allister Heath, 'Green rules pushing up energy prices' CityAM

Private equity and Unite

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Unite, the union, argue that private equity should be much more heavily regulated or controlled by central government.

Clearly, the fact that these companies are ‘secretive’ offends the folks at Unite, who were so keen on lambasting British Airways for allegations about the privacy of its staff. We should do well to remember that privacy and secrecy will be the first things to be lost if the socialists have their way, and I am not only referring to the secrecy of the deals at private equity groups.

Private equity, like that other demonized aspect of international finance, short-selling, is very effective at streamlining companies and keeping them efficient. However, because transactions in private equity or short-selling are complex and some people can make large sums of money doing them well, the same tabloids and unions that don’t understand them kick up a big fuss.

However, there is definitely one aspect that I do think needs reform – the profit-making ability created for private equity firms by the complexity of the tax code, and it’s emphasis on debt. Therefore, I propose a deal to those of a socialist persuasion – help us to campaign for a simplified tax regime, with a £12,000 personal allowance and flat rate of income tax at 22% (or even better, no income tax at all), and we will ensure that private equity firms pay their “fair share”.

Re-Evaluate, Re-Evaluate, Re-Evaluate

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Tony Blair's 1997 election slogan was Education, Education, Education. Cameron's should be Re-Evaluate, Re-Evaluate, Re-Evaluate. There are just too many government programmes that have expanded, and lobbied for their own further expansion, and are now costing us a fortune while producing very little that we really need. The statue book is cluttered with regulations that either haven't worked, can't be understood, or contradict each other. It really is time to re-evaluate every single thing that government does, and whittle out the parts we really don't need all that much.

One expert at that is William D Eggers, Director of Deloitte's Public Leadership Institute. His new book, If we can put a man on the moon, examines 75 major government initiatives across several countries, trying to discover what makes them succeed or fail. Most governments, he concludes, do a really bad job of evaluating and re-evaluating their initiatives. Too often, politicians design things that seem fine to them politically, but which become a bureaucratic nightmare at the implementation stage. A bit of forward planning would save a lot of tears. And there is a tendency for governments to try to do everything themselves, on a grand scale – the NHS IT fiasco is an example – instead of simply buying the skills or IT from the cloud of non-government providers that are out there.

Eggars feels that sunset laws are a good way to force everyone into a re-evaluation of programmes and agencies, provided that those who are doing the sunset re-evaluation are genuinely independent, not involved in the implementation process themselves, and insulated from the blandishments of lobbyists. Making public data genuinely public – posting government cheques online, for example, so that everyone can see what is being spent in their name – is another important step. That, indeed, could bring forward a multitude of people who could show that they were able to provide the same or better service in another way and at lower cost. It's amazing that nobody thought of it before.