F2T: Petition against green protectionism

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We call upon the World’s leaders to resist calls for green protectionism. Trade enables specialisation, which results in the development of new technologies and leads to the creation of wealth. In the past two decades, trade has enabled over a billion people to escape poverty. Trade is the most powerful weapon in humanity’s armoury to fight poverty and environmental ills, including climate change. Trade restrictions are not desirable, nor are they an effective means of addressing climate change.

Click here to find out more.

Chris Mounsey on Friendly Societies

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The first thing to be pointed out is that libertarianism is not about leaving people in the street to die. Libertarianism is, first and foremost, a philosophy based on personal liberty—the central crux of which is the non-aggression axiom...

And so begins an expansion of the excellent speech given at the ASI's recent TNG meeting. Click here to read the full text.

East Coast nationalised

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Compared to the banks, it's pretty small beer, but now the government has nationalised the east coast rail franchise, National Express has given up on it, and it has been excitingly re-named East Coast, and the equally excitingly, the transport minister Lord Adonis is now running it. Otherwise, it's the same timetable, prices and routes.

This is, of course, exactly how rail franchising is supposed to work. Services are put out to tender, and are run by private companies, but if one of them comes a cropper, the government steps in until another provider can be found. The only trouble is that the government has been stepping in rather a lot lately. Not because the private sector is inherently flaky, but for a couple of other reasons. First, the government screwed the operators down too hard on price. Many of them already had made considerable investment in the rail industry and were not prepared simply to write it off. So they paid over the odds. Then boom turned to bust (thanks, Gordon) and their figures started to look a bit sick. Second, the government drew up its franchise agreement so ineptly that when the chips are down, it is far cheaper for an operator to fold than continue operating a service. Step forward, the taxpayer. Frankly, it's no way to run a railroad.

Also in this weekend's news, Stephen Byers, the transport minister who bankrupted the private rail infrastructure company Railtrack, saying it was too inefficient and expensive – only to replace it with Network Rail, which is even less efficient, completely unaccountable, and forty times as expensive – is stepping down at the next election. Thank goodness. There are very, very few people I take a dislike to, even if I disagree with them politically. But this over-promoted polytechnic teacher and political careerist is one. Roll on the next election, I say.

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

Just what it is that this capitalism thing is good at?

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Putting aside my usual insistence that capitalism and markets are very different things, a quick question on what is it that the system we commonly call capitalism is so good at? What, really, is the benefit that it brings to us all?

For $70,000 (£42,000), it may not seem like a very good deal: all you get is a polished silver box containing a USB drive on a black velvet tray.

What you get is your personal genome. So, is capitalism simply good to provide exclusive trinkets for billionaires? There are those who say that it is of course, but that would be to grievously misread what is happening here.

The cost of the procedure is dropping fast, and while $70,000 is a significant expense by even a Wall Street banker’s standards, it seems inconsequential when compared with the $3 billion cost of decoding the very first genome — a project that was completed in 2003, after 13 years. Today the same process takes six to eight weeks. By 2015, says Mr Conde, personalised sequencing is likely to cost under $1,000, and take only days.

From $3 billion to $1,000 in only 12 years: yes, the thing which capitalism is so good at is making things cheap.

This is why it works as a socio-economic system. Leave aside all the morality plays of exploitation and the like for a moment and think purely as an entirely hard hearted pragmatist. We've got cheap food now, we can all fill our bellies at the expenditure of trivial, by historical standards, amounts of labour. Cheap clothing: it's within the memory of those alive that Sunday Best really did mean one's second and only other set of clothing. Even housing which seems so expensive has increased in quality so much that it is cheap by any long term comparison. Add medicine, transport, heating, alomst any sector of the eonomy or consumption that you wish to mention. All are incredibly cheap by the only standard that really matters: how long and how hard must we labour to get them.

As that hard headed pragmatist you would note that the capitalism/markets thing is the only system which has managed to achieve this. No other system that we've ever tried has done that truly remarkable thing, offer a sustained, long lasting and general rise in the standard of living: the reason being that no other system comes remotely close to capitalism's ability to make things cheap.

Not bad for a system derided (wrongly) for being based upon nothing but greed, is it?

Taxing out talent

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Talent is being forced out of Britain by the twin blows of a levy on non-domiciled individuals and by the impending 50 percent tax rate on incomes above £150,000. The latest to go is reported to be David Landau, a philanthropist who made his fortune selling the advertising paper Loot, and who has given several millions to charitable causes in the arts and education. He has left for Italy. He will not be the last.

George Bull, head of tax at accountants Baker Tilly, warned that half of his US clients were considering leaving Britain because of the "double whammy" of the non-domicile levy and the new 50 per cent tax rate.

The Chancellor, Prime Minister and the Treasury blithely behave as if their new taxes on high achievers will yield the expected revenue without triggering any behavioural changes. They just cannot seem to get their heads around three very simple words: TALENT IS MOBILE.

Governments can tax land which is impossible to move. They can tax factories which are difficult and expensive to move. But when they try to tax talented people they run up against that mobility. The plain fact is that many high-earning individuals are able to move to a friendlier jurisdiction which does not take away most of what they have earned.

Guy Hands, the British head of private equity company Terra Firma, which owns EMI, relocated to Guernsey earlier this year. Many more have threatened to go, including Sir Michael Caine, Tracey Emin, Hugh Osmond – the entrepreneur behind Pizza Express – and Peter Hargreaves, founder of the investment company Hargreaves Lansdowne. Premier League football players including Liverpool's Xabi Alonso and Arsenal's Andrei Arshavin have also identified Britain's tax regime as a problem, raising fears of an exodus of top talent.

High earners do more than create wealth and help generate and sustain jobs; they act as role models to young people, and inspire them, too, to greater ambition and effort. Without these achievers Britain will become a duller, more mediocre place, as those who want to achieve things themselves and to make good in the process will go to do it elsewhere.

The pity of it is that it will all be for nothing. The Treasury will almost certainly raise less revenue, rather than more, as a result of its twin attacks on high earners.

Dr Madsen Pirie has recently authored "101 Great Philosophers".

Immigration policy is a mess

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Funny how politicians leap on bandwagons before an election - first bank bonuses, now immigration. After a few soothing words about how important migrants were for the UK economy, Gordon Brown went on to outline lots more controls to stop them. Should play well among all those Labour voters who defected to the BNP.

The reality is that immigration has shrunk. All those Poles are going home, now that the streets of Britain are no longer paved with gold. Not that Gordon Brown's new 'tough' policy could prevent EU citizens from working here anyway. Migration has contributed billions to the UK economy. Migrants are 60% less likely to draw state benefits.

Home Secretary Alan Johnson admitted that Labour's immigration policy is a mess, and he's right. It has chased one headline after another, ending up with a dog's breakfast of a 'system' that is neither efficient nor just. Immigrants and their families can be detained indefinitely, are not allowed to work or draw benefits – so they end up being exploited in dangerous and underpaid illicit jobs.

The new points system is supposed to rationalize all this; but it has already proved damaging. We do actually need unskilled migrant workers in our businesses and public services. Overseas students are stymied with all sorts of paperwork and no longer feel welcome, choking Britain's reputation in international education. Companies complain of visa bottlenecks and having to advertise for chief executives in job centres so as to prove that no native person can do the job. The Tories want the same, but with caps on. It will be a relief when the election is over and we can (briefly) discuss this subject rationally again.

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

Can Britain learn from China?

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Slowly but surely, economic and demographic pressures, combined with a decline in scientific and educational achievement, will condemn Europe to becoming first a military, then an economic, then an educational backwater, and finally even a cultural backwater. Remember, academic and scientific excellence soon follow economic prowess and China already produces 3 million graduates a year, 250,000 in engineering. In Britain, we can’t even find enough people to teach physics in our schools.

Andrew Neil, 'Britain can learn from China', The Specator (2005).

Cheering news on the gender pay gap front

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There are two ways to take this little snippet of news:

The average pay gap between men and women continued to decline last year, falling by 0.4 percentage points, but still leaving a 12.2 per cent difference, according to the Office for National Statistics.

If that gender pay gap is something you worry about then that is good news: it's getting smaller. As it has been for decades. You can also complain about it, as some did:

A spokesman for the Equality and Human Rights Commission said: “The improvement in the gender pay gap is something to be welcomed and we hope this trend will continue.

However, he added: “If this rate of decline continues it will be another 17 years before women and men will be earning equal pay."

But then I would also say that this was good news for those who worry about the gender pay gap. Only 17 years to close something which has been with us for millennia? How wonderful that is in this world that is simply getting better by the day!

But beneath that snark and flippancy there is a much more important point. Solutions and corrections to the perceived problems of said world do not pop up overnight. Even if we hit upon the magic set of actions they still take time to work through society. So the call to action should not be based solely upon the existence of a problem: it should be based on whether that problem is already in the process of being solved or not before we insist on yet more actions to solve it. So it might be with these gender pay gap figures: whatever it is that we needed to do we've already done, the problem will be gone in a couple of decades and Hurrah! let's go and worry about something else.

We might apply the same logic to other problems: recent decades, those recent decades of that hated globalisation and "neo-liberalism", have seen the greatest reduction in human poverty in the history of the globe or our species. Huge great plans to "solve poverty" are thus not needed: we just need to continue doing what we're doing, trading with our fellow humans as we have been and the problem will solve itself. We have, if you wish, already alighted upon the solution and simply need to carry on as we are.

This isn't, of course, a popular thought amongst those who insist that we must do something, now, to solve all the ills of the world but it is a general truism. Many of the perceived problems are already being solved it's just that time as well as solutions are needed.

Tories getting there on education

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It does not really matter what colour of government reforms our schools, but it must surely be the number two priority after putting the economy to rights. It begins to look as if it might be the blue party that does it. Having embraced the Swedish model, they seem to have quietly dropped the idea of excluding for-profit schools in the mix.

Now comes an announcement from Michael Gove, shadow Schools Secretary, that groups of teachers will also be allowed (and he suggested 'encouraged') to start their own schools. He has been looking at the successful US experience of the Knowledge Is Power Programme (KIPP), which has seen several new schools started by teachers.

We meet quite a few teachers in the Adam Smith Institute through the ASI's programme of school visits, 6th form ISOS seminars, and even our Power Lunches. There is practically a unanimity that talented teachers have their time wasted and their enthusiasm blunted by the acres of paperwork which flow across their desks, and by the need to comply in detail with minutiae set by civil servants who have not entered a classroom since they were children themselves.

It is reported that the recently-formed New Schools Network has already been contacted by significant numbers of teachers keen to take advantage of the new opportunities.

Education will be the key, and new schools are an essential part of its ability to open new doors of opportunity and quality education, especially for students in deprived areas. Some of the current failing schools might well reform and improve once parents can exercise choice of schools, and direct state funds to those they have chosen. Many, though, will fail and pass unmourned into oblivion. Their place will be taken by high quality new schools. Some will be started by entrepreneurs, some by parents, and now, we are told, some by teachers. They bring a knowledge and a commitment that are needed.

This is a very welcome move, and one that suggests that the Conservatives finally have the right policy on schools, and might just have the nous to implement it.

Madsen Pirie's new book "101 Great Philosophers" is now available.

Graduate nurses

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It is the mark of the increasingly backward system of healthcare that we practice in this country that the Department of Health has decided that all nurses need to be qualified up to graduate level from 2013.

The recommendation was made by the regulatory quango, the Nursing and Midwifery Council (NMC) with the Royal College of Nursing backing the move, On the one hand, NMC's defence of this move is certainly surprising in as much as the union are supporting the government determining the qualifications of nurses, circumventing the unions relations with hospitals, their direct employers. Yet on the other hand, the union may be banking on this restriction to nursing decreasing competition and thus increasing wages and the Union’s bargaining position vis-à-vis their indirect employer, the government.

UNISON takes a different line than NMC is worried about this move, for perfectly practical and sensible reasons:

Our concerns throughout have been to make sure that the profession, whether you're a nurse or a midwife, that we're actually reflecting the society that we care for and I think one of the concerns that colleagues have had is about making sure the right emphasis is placed on the care and compassion that nurses give and that shouldn't be solely based on their level of academia.

But for the big picture, Dr Helen Evans of Nurse for Reform articulates the attendant problems of grade inflation, increased costs and decreasing standards:

In further nationalising the labour market on the front line of patient care, ministers and the Royal College of Nursing will simply end up sucking in tens of thousands more ancillary workers and lowering standards on wards still further.

The next government has plentiful reform to undertake; it is looking increasingly unlikely that they are not up to the task, but given rising costs and slipping standards, their hand might well be forced.