If only Paul Mason understood social mobility

Paul Mason tells us that we should have more social mobility. Hmm, OK, but the problem is that he's misunderstood what it was that actually happened. This was not the cause of that great shift in the 1950s and 60s

My father lived through the thing that terrified Richard Hoggart, in The Uses of Literacy, and then Eric Hobsbawm: the decline of the implicitly brutal and subliterate “proletarian way of life”. Watch a movie such as Saturday Night and Sunday Morning or This Sporting Life to understand the yearning for improvement, non-brutality, tenderness and advancement that gripped working-class people in the 1950s.

This, in turn, had material roots: cheap rents, free education, aggressively interventionist social work against dysfunctional families, TV stations run by philanthropists rather than, as now, people determined to promoting ignorance.

If I wanted to save capitalism, I would tell Theresa May to implement all this urgently – and more.

No, really, that's not what happened. We agree entirely that this was not unusual:

I know this kind of social mobility is possible because I am a product of it. My paternal line on Ancestry.co.uk reads: hatmaker, hatmaker, hatmaker, miner, miner, economics editor of Newsnight.

The paternal line of a lot of us is very similar. It is of this writer for example even if shifted by a generation.

What did actually happen is something that even Polly Toynbee occasionally manages to get right. The British class system is not purely economic - everyone should know that. Further, there's a very strong tone in it of manual labour being working class, indoor work no heavy lifting being middle class of one sort or another. So, what is it that happened over the decades of that burst in social mobility?

We moved from a society in which a goodly percentage of the population, 30, 40, perhaps 50% dependent upon date, did manual labour to one where some 10% do now. The percentage of the population engaged in agriculture fell at the same time, near everyone works in some form of services these days. That's that indoor work no heavy lifting which our class system defines as middle class of some form or other. We're not going to have a similar movement again in the future as there just isn't that portion of the population to move out of manufacturing and manual labour.

It's worth noting that Mason is one of those who complains bitterly about the fact that we've no longer got all those manufacturing jobs. Exactly the change which caused, not just allowed, the social mobility he's celebrating. After all, if 50% of the people still need to report to a production line each day then we're not going to have a great deal of that class mobility away from working class jobs, are we?

 But by far the most embarrassing point we can make about Mason's argument is that he's not grasped something which even Polly Toynbee can.

Really, less perceptive than Polly? It's not a recommendation, is it? 

MPs need to be more enterprising to win the hearts of innovators

Facebook picked Britain as the location for its largest engineering hub outside the US. A Facebook spokeswoman said we were chosen due to our “entrepreneurial ecosystems and engineering excellence”. Making Britain the best place to start and grow a business and attracting big tech companies, is part of the answer to solve our productivity problem and boost dreary growth forecasts. 

The Entrepreneurs Network, in a survey conducted by YouGov and released today, asked MPs which policies would encourage and help entrepreneurship in the UK: Conservative MPs reckon a ‘hard Brexit’ will help founders, while Labour MPs think we’d be better off stopping Brexit altogether;  Labour are less keen than in previous years to lower business taxes; and all of Westminster are warming to the idea of making it easier for highly skilled workers to venture to the UK.

A majority of the entrepreneurs in our network voted to remain, and business polls pre-referendum showed most businesses felt the same way. Conservative MPs don’t share the same sentiment: a healthy majority of 66% of Conservative MPs want a ‘hard Brexit’ compared to only 8% of Labour MPs, when asked what would be best for UK entrepreneurship. In a similar vein, 71% of the Labour Party think remaining in the EU would be best for entrepreneurial activity in the UK, compared to 10% of the Conservative Party. If the Conservative Party want to remain the party of business, they will need to find other ways to appeal to entrepreneurs.

Perhaps one of these other ways could be in their continued support of low personal and business taxes. Our entrepreneurs will be pleased to hear that 91% of Conservative MPs think lowering personal taxes would be good for entrepreneurship, compared to just 26% of Labour MPs. Corbyn appealed to entrepreneurs and small business owners in his manifesto with penalties for late payments and scrapping quarterly reporting for businesses with a turnover of less than £85,000. Corbyn must drop his ‘tax ‘em high’ mindset, if he wishes to have continued support from these groups. 

For our entrepreneurs, both main parties are like one of those sweetened vitamin tablets: they might be sweet on the outside, but they leave a nasty taste in your mouth when you get to their core. Vote Conservative and you might get a Hard Brexit but low taxes, vote Labour and you could get a soft Brexit or even remaining in the EU but with higher taxes. 

The Parliamentary Snapshot did find something for every entrepreneur to smile about: MPs are increasingly open to the idea of welcoming highly skilled workers into the UK. Conservatives went from 40% to 50% from 2014-2017 and Labour, 53% to 70% in the same time frame. Despite differences over taxes and Brexit, MPs open minded attitude towards immigration of high skilled workers serves as an antidote for entrepreneurs. 

Our parliamentarians are increasingly aware of the issues facing entrepreneurs and are increasingly willing to help. But there is some way to go yet, too often tax relief and investment schemes that remain highly prized by innovators but unknown and undervalued by elected officials.

At least MPs are beginning recognise the importance of skilled talent, both to brand UK and to solving our productivity crisis. So, if they want more successes like Facebook, they should listen to what entrepreneurs are saying would be good for them. 

Time for our biannual complaint that British rail tickets are too cheap

One of our little modern rituals is to point out twice a year that British rail tickets are too cheap. Once when the amount they will rise by is announced, sometime in the summer, and once when they are about to rise, at this time of year:

Rail passengers will be hit by the largest fares hike in five years next month.

Average ticket prices across Britain will go up by 3.4 per cent on January 2, industry body the Rail Delivery Group (RDG) said.

It is the sharpest rise since 2013, when fares increased by 3.9 per cent.

Passenger watchdog Transport Focus compared the news to "a chill wind" blowing down platforms as many passengers' incomes are stagnating or falling.

Contrary to much wibbling around the place the British system of railways is not notably more expensive than those of other countries. Rather, the difference is in who pays for it all. Here, passenger ticket prices pay for some 99% of operating costs. In many other countries there is a substantial contribution from the general taxpayer. That's what explains the difference in ticket prices.

We think it's just fine that those doing the travelling pay for the travel to be done. We do not see the point of taxing the dustman so that the Duke may go shooting.

There are parts of the network which really do need subsidy - the commuter lines around the largest cities. They also get that subsidy. Other parts of the network make a profit and the two largely balance each other. This might not be perfect but we do indeed insist that it's better than a general levy upon non-travellers to pay for those who travel.

That tickets are still too cheap is proven by the manner in which only operating costs are being covered - capital costs still largely devolve to the taxpayer. This should not be therefore tickets should cost more. 

Why is the government dumb on health?

All Whitehall departments want more money than is good for them but they cannot all have a bigger share of the pot. The bigger the spenders, notably Health and Defence, the more they demand. And, of course, the bigger the spender, the more they waste because, primarily, they have the money to do so.

In this autumn’s budget season, the clamour to increase the NHS England budget, sizably and immediately, has been intense, not just from the NHS but from almost all interested parties such as the chairman of the Commons Health Committee, the King’s Fund and the professions. In the event, the Chancellor provided about half the amount demanded but without any rationale for his decision. In the previous week, The Times had led us to expect the Chancellor to require that the NHS make good their promises of savings before they should expect their claims to be met. In riposte, NHS England asked which targets should be abandoned but they did concede that the NHS bill could be reduced by £200M p.a. if doctors stopped prescribing medications available over the counter. But we have heard that many times before - in 2012 for example. GPs are not employed by the NHS and are pretty much free to prescribe what they like.

No solid estimate exists for waste in the NHS. It could be as much as 10%, i.e. over £10bn p.a., but no one really knows. NHS England particularly do not want to know as it would undermine their case for more funding. The curious thing is that, after the Chancellor’s challenging words before the budget, there was no sign of them in his budget, no attempt to justify what most see as a miserly and inadequate handout. Why dumb?  Why is the Chancellor shutting up without putting up?

The public deserve the truth. Waste in the NHS is in nobody’s interest. There have indeed been genuine improvements in the use of resources, such as reduced stays in hospital. There have also been unmet claims of increased future “productivity”. The Chancellor should insist upon a priced list, audited by the NAO, of the savings that can and should be made. As the Russians say “Doveryai, no proveryai” (trust, but verify). The waste within the Department of Health, those 30 or so quangos outside the purview of the NHS itself, would be quite a good place to start.

To help things on their way, here are a few examples of waste:

  • Professor Briggs and his team “found huge variations in the cost and quality of common treatments, with low-performing hospitals routinely ignorant about superior methods adopted elsewhere. The NHS could save hundreds of millions, if not billions, a year if the best and most efficient practices were applied across the country.” And “More than 300,000 patients a year are needlessly admitted to emergency surgery beds when they do not need an operation.” Their report did not total its examples but it reveals billions rather than millions of waste.
  • The under-use of expensive facilities such as operating theatres. The surgeons are willing but the bureaucrats are not.
  • Anything that takes doctors away from the treatment and cure of patients is, prima facie, waste. Clinical Commissioning Groups are an example. There are far simpler and fairer ways of allocating funds to GP practices which would involve GPs is far less admin.
  • Bed blocking. Adult social care is under-represented in the upper levels of the Department of Health and perhaps as a result the NHS gets more than its fair share. As a direct consequence, inefficiencies are introduced into the NHS. Having the value of the blocked beds, for example, passed to the adult social services would not reduce NHS capability whilst also providing more relevant help to the elderly.
  • The NHS should focus on the treatment and cure of individuals and not distractions such as general health. Of course prevention and dealing with epidemics are important but the Department of Health has the 5,500 staff in Public Health England to do that.
  • Similarly, the NHS should not duplicate the well funded Medical Research Council with its own National Institute for Health Research at a cost of over £1bn.
  • Bureaucracy is endemic throughout the primary and secondary NHS: “Bureaucracy takes up 3-4 hours [a week], of which maybe 50% is of any clinical value”according to one experienced GP practice head. Bureaucracy is compounded by having too many targets.
  • The number of managers, long a matter of complaint, has reduced somewhat but there are still layers of hierarchy in hospital trusts which may give respectability but do little for patient care.  Budgets are not set by boards but by battling consultants.  The NHS would save a lot by recognising reality.
  • Anyone who has spent time in a public ward will get the impression that medical staff spend more time nursing their computer terminals than nursing their patients. Of course each shift needs to brief the next but this misalignment aggravates shortage of nurses. On 22nd October 2017, in the otherwise excellent Frimley Park hospital, a 97 year old in a six patient ward was reportedly dead for up to three hours before the staff noticed.

The Chancellor has not made the case for his funding decision and he will not satisfy public opinion if he remains dumb. Likewise, the government has rejected Norman Lamb’s request, supported by 90 MPs, for a non-partisan, cross-party strategic review of the NHS to cover, inter alia, what it should fund and the extent to which patients should contribute, as we do with dentistry and prescriptions.  Again, no rationale has been provided. Surely a Tory government should be glad to get the topic off the table?  Dumb and dumber.

Sadly, it's true, environmental regulation kills people

Today's reminder of the basic economic lesson, that here are no solutions only trade offs, comes in the fled of environmental regulation. It is most certainly true that at least some such saves lives. But also, near all regulation is also going to cost lives as well. It is the net position that needs to be calculated and taken into account over any specific action, not the gross in one direction or the other.

We have a report on the general circumstance:

Regulations frequently aim to reduce mortality risk, and many of them may succeed to varying degrees. But regulations can also increase mortality risk in various ways owing to unintended consequences.

One of the general observations should be that yes, forcing people to do whatever in a more expensive manner may will save the lives of some of those doing it. But doing things more expensively also means resources that cannot be devoted to other activities, some of which might save more lives. Again, this is just a statement of an obvious economic truth, resources are scarce.

But we can be more specific too, as this example about Bangladeshi ship breaking yards points out. Regulation means that using rich country breaking yards is more expensive. This could be justified, might not be, that's not the point. That point being that there's a reaction to that extra expense:

 More than 800 large ships are broken up each year, the vast majority on Asian beaches. Owners can earn an extra $1m to $4m (£740,000 to £2.96m) per ship when selling to Asian yards via cash buyers, instead of opting for recycling yards with higher standards, says Jenssen.

In that more general sense that's $1 to $4 million per ship broken which cannot be devoted to other matters, resources really are scarce. In the more specific the higher standards at those rich country yards mean more breaking is occurring in these poor country ones. Quite possibly (no, not certainly, jut possibly) leading to an overall increase in danger and death rates than is the rich country regulation were weaker and thus cheaper - but still higher than those poor country yards.

No, this isn't an argument against all an any regulation anywhere. It's only one that insists we do not have solutions, only trade offs. As such our decision making has to be about those trade offs, something all too absent from all too many such discussions.

We agree that falling life expectancy is an economic problem - just a different one

The Office for National Statistics tells us that lifespans aren't going to increase as we once thought they would. We agree entirely that this is an economic problem. It isn't, however, the one that such as Danny Dorling are screaming about.

Since we launched BRAVE NEW EUROPE we have stressed the violence of austerity. In 2013 David Stuckler and Sanjy Basu wrote a convincing book entitled “The Body Economic – Why Austerity Kills” concerning the short term effects upon health of austerity. In this article Danny Dorling and Stuart Gietel-Basten present arguments of how austerity kills long term.

Changes in life expectancy which are coincident with austerity (not that the UK has actually had any, government spending continues to rise in real terms) are not necessarily caused by austerity. This should be clear to any user of the scientific method - a group which may or may not include human geographers and sociologists.

What the ONS has actually said is:

Antibiotic resistance has caused a fall in life expectancy for the first time, the Office for National Statistics has said. 

Life expectancy in future years has been revised down after the statistics authority said that "less optimistic views" about the future had to be taken into account. 

Opinions on "improvements in medical science" had declined, it said, and fears of the "re-emergence of existing diseases and increases in anti-microbial resistance" meant people would not live as long as was previously expected.

We agree entirely that antibiotic resistance is an economic problem. In fact, it's a regulatory problem, we've got the regulations working against economic reality. We should thus change them in order to get them aligned of course.

The standard drug development incentive is the patent system. This is an economic solution to an economic problem, it costs a $ billion (less perhaps for an antibiotic) and a decade to get a new drug approved and once it is then anyone could (and would) copy it. Who would do this for no potential profit, it's a classic public goods problem. The answer is an artificial monopoly in the guise of that patent which protects for a decade of commercial life (20 years in full, minus regulatory approval time). Agreed, not a perfect system but a logical at least reaction to the basic public goods problem.

This does not work for antibiotics. For once a new one is developed we do not allow it to be widely used. We insist, instead and probably quite rightly, that it be held in reserve to only treat those infections which do not respond to the older treatments. That way we delay any build up of resistance to the new drug. But, obviously, we also deny the developers of the new antibiotic their chance to make their money back by widespread use of their new product.

Therefore few to no one develops new antibiotics. The problem here is in our economic system to deal with the public goods problem. We thus need a new one. No not for the entirety of the drug development system, just one to deal with this specific subset of it.

Purely by chance another discussion of the same basic point appeared concerning phages:  

If you want to know why phage therapy has problems evolving in the US, the answer is just three letters: FDA.

As phages are in a continuing red-queen evolutionary game (running as fast as you can to stay in one place) with evolving bacterial defenses and specific phages can be specific to sub-species of bacteria, there is no way of making money in this game if you have to prove “efficacy” to the FDA before you sell your specific phage for a specific sub-species of bacteria that are continually evolving.

To play this game, we will need an automated system to speed up the evolutionary selection of lytic phages as the bacteria evolve with hundreds of variations on the shelf to cover the evolutionary options open to the bacteria. All these variations need instant approval, but that would create a finite risk that the zero risk tolerant FDA won’t allow.

In a Petrie dish of E. coli, you can add a lytic phage that will kill 99.9999% of the bacteria in a few hours but by the next day, the bacteria have evolved resistance to that phage. This is what that CRISPER cas9 gene editing system is all about as the bacteria evolve to cut up the virus meanwhile the phage is mutating and evolving methods of countering the defense.

This does not fit the FDA model for a simple specific chemical and billion dollar decade-long approval systems for each chemical. Changing the US FDA appears to be a near-impossible task and our only hope is that bacteria control system based upon phages will evolve with animal culture in some other country, without FDA interference, and then move to humans outside the US and then, after massive numbers of people go somewhere else to treat multi-drug resistant bacteria, we will consider real change.

Quite possibly an extreme view but note the basic underlying point again. Our regulatory structure, set up to deal with that economic public goods problem, isn't appropriate for the economic incentives in this specific space. The answer thus is to change the regulatory structure to more closely accord with economic reality, isn't it? 

We could even say that, as with Danny Dorling, government action is necessary. But it isn't thus true that the answer is for government to be spraying yet more on the welfare state, is it? Government just needs to be doing what it is doing rather better instead. Sadly, a much harder task.

The clear and obvious merit to offshore banking

That offshore banking is one of the very terrors of the modern world is one of those things widely accepted. Yet it's possible to rework Joan Robinson's observation that the exploitation by capitalists is nothing compared to the misery of not being exploited by anyone. The existence of offshore banking does indeed limit the depredations that domestic governments can make upon our wallets, something very much better than there being no such limits to what they can do.

As Tyler Cowen points out:

Given this background, I’d like to speak up for offshore banking as a significant protection against tyranny and unjust autocracy. It’s not just that many offshore financial institutions, such as hedge funds registered in the Cayman Islands, are entirely legal, but also that the practice of hiding wealth overseas has its upside.

He then gives the example of Saudi Arabia where all the rich people have been locked up in a hotel until they "voluntarily" hand over some goodly portion of their wealth to the State. Then:

A recent study shows which countries are most likely to use offshore banking,......The top five countries on this list, measured as a percentage of GDP, are United Arab Emirates, Venezuela, Saudi Arabia, Russia and Argentina, based on estimates from 2007.

We do generally think that - as Adam Smith pointed out with his invisible hand comment in WoN - that domestic employment of capital is a jolly good idea. Offshore provides the escape hatch by which capital so deployed cannot simply be abstracted by said State. Thus reducing the risk of such deployment, thereby increasing the amount of it.

Precisely because offshore reduces the ability of the State to tax - in however a democratic or authoritarian manner -  it makes us richer. Which is a fair old justification for an economic practice really, us all getting richer being the point of having an economy in the first place.

Precisely because offshore provides a protection of sorts against confiscation that limits the amount of confiscation which is even attempted. Limiting the power of the State isn't the flaw, it's the point.

The tragedy of the £80,000 broadband connection bill

There's a reason economics is called the dismal science - it makes clear some uncomfortable truths. For example, this complaint about an £80,000 bill to be connected to broadband. If it's not worth paying that cost for the benefits to be gained then it's not worth the cost for the benefit, is it

The owners of one of rural Scotland’s most popular hotels for walkers and climbers has attacked the dire speed of broadband it can access after being asked to pay £80,000 to get a good connection.

Lesley McArthur, a partner in the Glen Clova Hotel in Angus, said it is forced to make do with an internet speed of only 0.5mbps and the connection disappears altogether if more than one guest decides to log on.

She argued that the remote hotel, which attracts hill walkers across the UK, makes a significant contribution to the local economy but in September was quoted the “absolutely ridiculous” sum of £80,000 by BT for a fibre-optic line.

Although Nicola Sturgeon has pledged that every premises will have superfast broadband with a speed of 30mbps by 2021, she said that the hotel could have lost “a lot of business” by the time this happens.

Let us make the - possibly unwarranted for who knows about BT's pricing but this is going to be true of at least some isolated places within our islands as it is true of electricity supply, piped water or sewage connections - assumption that £80,000 is the true cost. 

The hotel is stating that it's not worth their paying that bill for the economic benefits it brings. There is no spillover effect here, no value of a connection which they cannot capture. Thus, if it's not worth their paying the bill it's not worth anyone else doing so either.

That is, we've not changed the cost benefit analysis by suggesting that the taxpayer should pick up the bill instead. Or BT shareholders perhaps, through a universal service provision. Running broadband, with current technology, to every place out in the boonies (and looking at the map, this really is the boonies) simply isn't worth it. It makes us all poorer, the value added is less than the cost.

So, let's not do it, whoever is paying for it and however. Why would we want to make ourselves generally poorer? 

Down with the killjoys!

Public health campaigners are in many ways the modern version of religious puritans. Or at least, that’s the case according to Christopher Snowdon in his new book Killjoys, published earlier this month by the Institute of Economic Affairs.

In the book’s opening chapters, Snowdon outlines the philosophical basis for opposing paternalism of all varieties. He begins with a brief exposition of John Stuart Mill’s utilitarian ‘harm principle’: the idea that the only justification for interfering with the liberty of others is in order to prevent harm to others. It thus follows that coercing someone purely for their own good is unwarranted, according to Mill. There are various arguments used to defend the harm principle, ranging from the idea that “promoting liberty will foster originality” to the claim that “paternalism drains people of their vitality by making decisions for them.” But, in Snowdon’s view, these are not the strongest arguments for adopting a classical liberal view of paternalism:

Mill’s simplest and strongest case for individual liberty arrives...when he writes that a person’s ‘own mode of laying out his existence is the best, not because it is the best in itself, but because it is his own mode’. Since people have different tastes and preferences, it is undesirable for others, even if they are the majority, to impose foreign preferences upon them.

The vast majority of economists lie in the same utilitarian tradition as Mill, and many accept the importance of individual freedom—not paternalism—as a means of maximising overall wellbeing:

...economists believe that markets produce the best outcomes if competition exists and if choices are voluntary. For this, consumers must be reasonably well informed and reasonably rational. Like John Stuart Mill, mainstream economists assume that the average consumer is basically rational, which is to say he generally acts in accordance with his preferences.  

The majority of Killjoys applies this classical liberal approach to contemporary paternalism and the justifications employed by the killjoys who support it. It tackles soft paternalism (sometimes called ‘nudge’ policy), hard paternalism, and finally the most prominent form of paternalism in the contemporary world: “public health” paternalism.

‘Nudge’ paternalism

Snowdon’s evaluation of nudge policy (first popularized by Richard Thaler and Cass Sunstein's 2008 book Nudge) is fairly positive, despite his misgivings about some of work in behavioural economics underpinning it. He appears cautiously optimistic about efforts to correct our cognitive biases by altering ‘choice architecture’ (e.g. adding organ donation questions to driving licence forms or ensuring faster payment of income tax by reminding taxpayers that their money goes to public services). After all, this is simply applying common private sector practices to the public sector in order to make it more effective:

When government action is required for the nudge, it is when the government is already involved. Tax collection, organ donation and driving licences are all within state control. If they can be made more effective and efficient by using the same persuasive techniques  that are second nature in the private sector, why not do so?

However, Snowdon also highlights a key reason to view such soft paternalism with a critical eye. Since “most governments are more paternalistic and less libertarian than the nudge theorists”, there is a serious possibility that such interventions form the basis for a slippery slope into more coercive forms of paternalism.

‘Hard’ paternalism

Unsurprisingly, Snowdon views hard paternalism in a far less positive light. Using Sarah Conly’s unusually candid book Against Autonomy: Justifying Coercive Paternalism as a foil, he demolishes the arguments of those who would ban cigarettes, ban trans fats, increase required savings and even potentially ban soda. Conly’s key argument rests on the idea that humans all share certain universal goals: namely health and financial security. Think like an economist, and you recognize this as a nonsensical justification for coercive paternalism:

If we judged people’s desires by their behaviour – as economists do – we would not conclude that pristine health is their only goal. Even stated preferences do not imply that people prioritise a long life over all other considerations. When The Who sang ‘I hope I die before I get old’ in 1965 they were reflecting a stated preference for living fast and dying young that is not uncommon. A young man who leads an unhealthy or risk-taking lifestyle while claiming to have little or no interest in getting old is being consistent in his stated and revealed preferences.

Conly recognizes the existence of such trade-offs, qualifying her paternalism with the idea that the benefits of an intervention must exceed the costs. But, as Snowdon highlights, her cost-benefit analysis is vague and arbitrary. Like many paternalists, subjective valuation trumps consistent application of her principles:

The more one reads of the paternalism literature, the more one is struck by ad hoc exceptions being made to supposedly universal principles. That these exemptions tend to reflect the public mood of the day only confirms Mill’s fears about the tyranny of the  majority. Smoking and eating dominate both Against Autonomy and Sunstein’s Why Nudge? as if they were in a separate class of risky pursuits. When it comes to activities that pose an acute risk of death at a young age, such as motorcycling and mountaineering, paternalists have little to say other than that participants should, perhaps, be forced to wear a helmet. There must be a suspicion that dangerous sports get a free pass because they are seen as daring, unusual and physically demanding whereas drinking, smoking and drug  taking are undemanding, common and intoxicating.

Snowdon concludes the chapter with an defence of ‘slippery slope’ concerns, using mandatory seatbelt laws as one such example. Such minor infringements of the harm principle aren’t particularly destructive in themselves, but they do “change public perception about the objectives of criminal law.”

‘Public health’ paternalism

According to Killjoys, the modern ‘public health’ lobby is just an updated form of the groundless puritanical moralism that Mill sought to combat in his day. Snowdon describes it as “quasi-utilitarian” in its rhetoric, but decidedly not utilitarian in practice. After all, a philosophy that aims to maximise the length of our lives is not the same as one that aims to maximise satisfaction of our rich tapestry of individual preferences:

...‘public health’ paternalism cannot be justified by welfare economics or utilitarianism. It is simply a form of ends paternalism in which health and longevity are assumed to be overriding goals.

The case for public health interventions is clearly strongest when there is no alternative to collective action: “tackling health risks in the share environment which cannot be controlled by the individual, such as air pollution, or those involving people (or animals) who carry infectious diseases.” But the public health lobby has experienced significant mission creep in recent decades:

Since the 1970s...the scope of public health action has moved beyond hygiene and contagious disease to target self-regarding personal behaviour. As Richard A. Epstein explains, the modern ‘public health’ movement ‘treats any health issue as one of public health so long as it affects large numbers of individuals’.

Snowdon is at his strongest when analyzing the politics of public health paternalism. He reveals the different strategies used to curtail individual freedom in the name of keeping us alive longer:

Being a political movement, the literature of ‘public health’ paternalism differs from that  of the academic texts discussed in earlier chapters in two important respects. Firstly, it tends to focus on short-term policy objectives rather than present a full vision of what it thinks society should look like. Long-term objectives are rarely made public, perhaps because the logical outcomes are so extreme that they would alarm the median voter. Only recently, for example, has the goal of cigarette prohibition been openly discussed in the ‘public health’ literature despite it being the only natural conclusion of the anti-smoking crusade.

Appeals to compensating for negative externalities are also exposed as creeping paternalism:

That negative externalities are used by paternalists as an excuse for interference can be  seen in the way they demand taxes be set far higher than the Pigouvian rate [the rate at which the cost of negative externalities are compensated for] and demand excessive regulatory responses to questionable externalities.

He also tackles anti-advertising crusades based on general anti-capitalist hostility to free markets, and various other methods employed by the public health lobby to forcibly impose their own vision of the good life on the rest of us. If you’re going to read just one chapter of the book, make it this one.


Following a section exploring the harms of paternalism—higher costs, substitution effects, black markets, in some cases unintended consequences of poorer health—Snowdon devotes the final chapter of Killjoys to describing effective, welfare-enhancing, classical liberal alternatives to paternalism. More education, Pigouvian taxes, and creating an environment conducive to innovation in harm reduction are all key pillars of this strategy.

Although I didn’t explicitly call myself a libertarian until I was 16, I first felt libertarian after thinking about the smoking ban when I was a lot younger. Back then, my views were based on a purely instinctive disdain for those who think they know how I should live my life better than I do. Many others share this attitude towards different forms of paternalism, and Killjoys gives them the intellectual ammunition to resist modern-day puritans. It’s also a solid introduction to applied economics and looking at the world through utilitarian lens.

You can read Killjoys on the IEA website here, or order the book here.

As we've been saying, there is no Brexit divorce bill

As we've pointed out before there is no such thing as the Brexit divorce bill. This is not to take sides in the current argument - although some of us are known to be highly partial, even prejudiced, upon the subject - it is to point out a basic economic, even accounting, point.

Sunk costs are sunk costs and they do not and therefore should not influence our decisions. This is akin to probability. Before we throw a normal die there is a 1 in 6 chance of any one number. After we have done so then the result has a probability of 1. It has happened. So it is with sunk costs.

Whatever the number is, whether it's €100 billion or whatever change we deign to toss into into the EU's will politic for food begging cup, this is still the wrong answer

But those remainers who feel no obligation to defend this government have every right to be as appalled by this £50bn bill as Farage and co. They – we – can see that it’s necessary for a club member to honour their debts as they leave after 44 years of membership. But, boy, what an unforgivable waste of money.

For let’s remind ourselves of the basic truth here. We’ll be paying this money for the privilege of not being in the European club.

This is not true in the slightest. Recall what the EU's position is. You have agreed to pay this as a part of your membership. If you leave you should still pay the amount you agreed to pay.

OK. Or maybe not OK to taste. But quite obviously, if we pay whether we go or stay then it's not a cost of either going or staying, is it? It's a sunk cost, a result of decisions taken in the past and decisions made now won't alter it in the slightest. 

It is true that leaving means we're not signing up to a continual stream of such future payments. But meeting our current contractual obligations is a sunk cost, one that we'll have to pay whatever. It's thus not a useful fact to include in our decision process, just because the decision either way makes no difference to us.

Yes, really, sunk costs are sunk costs.