Why the British NGOs are so bad at fighting absolute poverty

That there's still near 10% of the human species out there languishing in absolute poverty is true. That we'd like to get that number to 0% and sharpish is also true. There are organisations here in Britain which ask you to send them money so that they can aid in this process. An idea and intention which we fully and entirely support of course, who wouldn't want to see the destitution of peasant poverty disappear?

It's just that at least some of them appear woefully misinformed about the subject under discussion. This is from some fool at Health Poverty Action:

Here’s the (heretical?) rub: it is understandable if people are losing faith in aid agencies and even in the idea of “development” itself. Because, broadly speaking, it hasn’t worked. We clearly haven’t solved the problem of poverty. Yet we’ve misled the public for years that poverty will end, if only they’ll give us £2 a month.

The main reason poverty thrives is that we haven’t addressed the interconnected, structural issues that create and maintain it: unjust trade deals, climate change, tax havens, the failed “war on drugs” and the lack of public services. Without tackling these issues (and those responsible for them) it is nigh on impossible to achieve social and economic justice.

Note the claim that poverty is created. It is repeated:

Stories about multinationals, tax havens, and the privatisation of public services would demonstrate that people around the world are victims of the same process of poverty creation and systemic injustice as we are here.

The idea that poverty is created is one of such drivelling inanity that it's remarkable that one who is literate can hold it. For we in fact know one thing about such absolute, extreme, poverty. As Angus Maddison pointed out, this has been the norm for almost all humans throughout all of recorded history. GDP per capita in the $500 to $800 range, annually, translates through into that $1.90 a day of absolute poverty (annoyingly we're using $ from different years as measurements there but the basic point stands, this is after inflation etc, changes in prices across geography). That's just what history was until the Industrial Revolution. Generation after generation, millennia after millennia, of what we now regard as the utmost destitution.

The thing which is created is the wealth which abolishes poverty. Only if we are to grasp this simple truth can we possibly craft plans, policies, to reduce said poverty.

This will sound dismissive, possibly even rude, but then it's meant to be both. You'll do better to reduce absolute poverty by randomly mailing your £2 a month to anyone on the planet. At least there you've a 10% chance of it aiding a poor person, a rather better opportunity than cycling it though an organisation as hopelessly misguided, ignorant even, as Health Poverty Action.

Of course, there's also the truly effective method, buy stuff made by poor people in poor countries. That is the method of this past generation, the one which brought absolute poverty down from 40% of all people to that just under 10%. You know, the one that works, the one that drove the biggest reduction in poverty in the history of our species, that neoliberal globalisation.

It’s Adam Smith’s birthday!

At least, we think it is. We know when his birth was registered at the local church in 1723, and the presumption is that he was born a couple of days earlier. Then you have to add on a few days for the calendar change that happened in 1750, and you get 16 June.

After a mostly uneventful childhood in Kirkcaldy, on Scotland’s east coast (although he was briefly kidnapped by vagrants) Smith entered the University of Glasgow, then went to Bailliol College, Oxford—where he found that the professors had “given up even the pretence of teaching” because they got paid whether they taught or not.

Returning to Scotland, he joined the staff at the University of Glasgow, where he wrote a book on ethics, The Theory Of Moral Sentiments (1759). It brought him instant fame. Enlightenment thinkers sought a firmer foundation for ethics than the dogma of clerics and commands of kings. Some sought ‘rational’ alternatives. Smith, however, identified morality as a feature of human social psychology. We have a natural sympathy for others. Their pleasure or pain affects us; and we like to act in ways that please them. As the book begins:

How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.

This natural sympathy binds and benefits the whole human species.

The book’s success prompted the Duke of Buccleuch’s stepfather to hire Smith, on a pension for life, to tutor the young Duke. Taking him on the Grand Tour of Europe, Smith picked up endless facts about different systems of commerce and regulation. He started writing The Wealth of Nations, weaving current and original ideas into a new, systematic, modern approach to economics.

The book debunked mercantilism, the prevailing system by which countries tried to boost their cash resources by selling as much as possible to others, but buying as little as possible from them. So they subsidised exports and raised resisted imports.

Smith, however, showed that both sides benefit from trade, not just sellers. The sellers get cash, but the buyers get goods that they value more than the price. What makes a country rich is not its gold reserves, but vibrant trade and commerce. Wealth came from liberating commerce, not restricting it.

The huge productivity gains made possible by the division of labour boost that wealth even more. Specialist producers may be thousands of times more productive than amateurs. They can produce surpluses that they can sell, giving them funds to invest in capital equipment—raising their productivity even more. This they do to benefit themselves, but their actions actually benefit everyone:

Every individual... neither intends to promote the public interest, nor knows how much he is promoting it... he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.

Another unplanned benefit of commerce is that it automatically steers resources to where they are needed. Where things are scarce, consumers will pay more, so suppliers produce more. When there is a glut, prices fall and producers switch their effort into more profitable lines. So, without any regulation and planning:

[T]he obvious and simple system of natural liberty establishes itself of its own accord. Every man...is left perfectly free to pursue his own interest in his own way.... The sovereign is completely discharged from a duty [for which] no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society.

This liberal system benefits the poor most. Smith railed against merchants using their political influence to win monopolies, tax preferences, controls and other privileges that distort markets in their favour—what today we call crony capitalism. He concluded that government must be limited to its core functions of providing the defence, justice and infrastructure that is needed for commerce to succeed. Leave people free, end cronyism, and the results will amaze you.

Smith’s ideas were highly influential. The great free-trade era they ushered in, and the enormous rise in wealth it created—particularly for the poor—did indeed amaze the world.

Happy birthday, Adam Smith!

Another campaign issue turns out not to be true

It's not unusual for an issue to become a public truth, simply because so many people state it so often, but for us to then find out that it might be public but it's not a truth. The interesting thing is how may people then follow Keynes and change their minds because the facts do? 

Not all that many is our own observation:

The "buy-to-leave" phenomenon in housing has come into question after a report commissioned by the Mayor of London found that almost no homes in London owned by overseas buyers are being left empty.

The research, by the London School of Economics, found that "there was almost no evidence of units being left entirely empty - certainly less than 1pc". 

Foreign buyers are indeed purchasing properties in one of the great global cities. But they're not leaving them empty, they're either using them or renting them out. Thus the entire idea of said foreigners hoarding those scarce London dwellings seems to be false.

Sadly, we don't expect any of the campaigners to change their minds. that's not how politics works, is it, it's not an evidence based process?

Which is, of course, why politics is a markedly bad manner of managing lie except for those issues which can only be solved by politics. Far better to leave everyone alone and let them get on with it, eh? Given that politics isn't based upon either evidence nor logic, neither being useful attributes in a management system.

Questions to which the answer is no

The answer here is no. The Institute of Metals wonders whether rising prices and a market shortage are going to stymie technological development.


The BBC wonders whether whether we might have to worry about smartphone rationing:

Could you cope with smartphone rationing?



A number of metals are crucial components in a range of technologies, from smartphone batteries to electric cars. So could a market shortage and spiralling prices put the brakes on the global tech industry?


Firstly we've the obvious point that rising prices are the solution to a "market shortage," rising prices make market shortages go away. Suppliers are induced, by their lust for lucre, to produce more, users are, by their distaste for having to part with pelf, persuaded to use less.

Prices are the damn rationing system that is.

We've also dealt with this at near book length. There simply is no mineral or metal we're going to run out of in anything like a human timescale. Sure, we might have to spend a little more digging up some bits of rock, might face variable prices while we attempt to incentivise people to do so but there simply isn't a shortage, isn't going to be a shortage, of anything we use to build our civilisation.

The answer is just no.

Sure there're more fat people around - ain't that great?

The New England Journal of Medicine tells us both that there are more fat people around and also that this is leading to a rise in certain diseases. To which our response is, ain't that great?

The prevalence of overweight and obesity is increasing worldwide.

That's their opening line and we can't see anything to argue with there. They also tell us that the more developed a place the more likely it is to have a lot of fat people:

In 2015, at all SDI levels and for all age groups, the prevalence of obesity was generally higher for women than for men, with the highest prevalence among women between the ages of 60 to 64 years living in countries with a high SDI (Figure 1). In general, the prevalence of obesity among both women and men increased with the increase in the SDI across all age groups.

That SDI is the sociodemographic index and yes, it reads that a higher number means a more economically developed nation.

All of which we would say is greatly cheering. Certainly, there are aesthetic reasons for not desiring too many fat people around but the basic underlying story here is that we've solved the great and original human problem. How do we produce enough food to keep everyone alive? 

For we note that before about 1820, just as the Rev Malthus sat down to write it all out, the major limitation upon population size (in both senses, number of people and size of people) was the ability to produce enough food. People really did drop dead from lack of it. As Amartya Sen has pointed out modern famines are more about politics and inadequate - even purposefully so - reactions to dearth but there were millennia upon millennia where people really did starve down to skeletons then die through no one's fault nor intention.

That the world is now roamed by those too large for yoga pants might indeed be a problem of sorts but it's a very different one, it's one that stems from our having solved the basic and long running human problem of what's for lunch. The solution brought to you, of course, by private property, trade, free markets and capitalism.

This also illustrates a core contention of economics, that there are no complete solutions, only a series of trade offs. We are where we might have to worry about the prevalence of diabetes, rather than which one of our children, or even all of them, will starve in the next couple of years. We can't help thinking that this is an advance in the human condition.

At which point of course The Happy Dance even if the size and weight of us all makes it an unedifying sight.

This seems like an entirely sensible taxation decision to us

Private sector, or at least charitable status, schools receive a discount upon their business rates bills:

Private schools are set to get tax rebates totalling £522m over the next five years as a result of their controversial status as charities, according to a study of local council records.

Charitable organisations in England and Wales are entitled to relief of 80% on the business rates payable on the buildings they use, and some of the country’s best-known private schools qualify under the rules.

State sector schools do not. But then of course that's just a budget merry go around as the local authority handles the funding for said schools and then collects the money back again through the budget process. Yes, it is right that things owned and run by the state pay such taxes, just as we charge the Armed Forces for the spectrum they must have. Just the budget line, even if it is just shuffling, does concentrate minds on whether quite so much of something is needed.

But we do think this is a good idea this discount:

CVS said Eton College, whose former pupils include David Cameron and Boris Johnson, would have faced a bill of £4.1m for business rates over the next five years without its charitable status, but instead it would pay just £821,040.

Dulwich College in south London, which educated former Ukip Leader Nigel Farage, will only pay £786,752 out of its £3,933,760 five-year bill under the tax regime.

Leeds grammar school, which offers extensive sports facilities on a campus of nearly 60 hectares (140 acres), will only pay £826,016 out of its £4,130,080 five-year bill.

There is just that basic rule of law idea of course. If charities don't pay full business rates then charities don't pay full business rates. Such deals, breaks or subsidies do not apply just to those charities which you approve of nor should they be denied them because you don't. If x structure or activity is to be taxed in y manner then x structure or activity is taxed in y manner, whatever the hell you think about it, that's what the rule of law means.

But we would add one other point. The Grammar School at Leeds, as it is now, educates some 1,500 pupils a year. That relieves the local authority of, at the roughly about right £5,000 a year per pupil cost of state schools (that price is arguable, as the usual calculation doesn't include either the capital budget nor the pensions), costs of some £7.5 million a year. Or, over the 5 year period being talked about, £37,500,000. That seems worth a less than 10% of the savings break on the tax bill, doesn't it?

At which point we should note that the state makes a vast, gargantuan, profit out of the existence of private schools. So why are people whining about the trivia of the tax bill?

Close run thing

Labour under Jeremy Corbyn did not win the election, but they came perilously close to it, and hardly anyone saw it coming.  They might have won but for two things that contributed to their failure. The two terror attacks during the campaign received extensive media coverage. This meant there was less space for election coverage of Theresa May’s wooden ineptitude or Jeremy Corbyn’s cornucopia of goodies.

Fatal to Labour’s hopes, however, was Ruth Davidson’s achievement in Scotland. The additional 12 Tory seats saved not only the government, but the Union itself.  The SNP’s price for supporting a Corbyn led coalition would have been a second referendum. That will not now happen.  And the 12 extra Tory seats take them over the threshold needed to govern.

The arithmetic is now this:  With Sinn Fein not taking their seats and the Speaker not voting, that leaves 642; so 321 are needed to govern.  The Tory 318 and the DUP 10 make 328, giving a working majority of 14, close to that of the previous parliament.

The idea that young people turned out in droves to back a hard left agenda is not supported by the figures, which show that only 9% of Labour’s vote came from the 18-24 group.  A larger share was from the 35-45 group.  Furthermore, the seats which had a higher than average population in the 18-24 age group did not perform much better for Labour than the others.

The result was partly caused by a worthless Tory manifesto which gave people no reason to vote for them.  Conservative statism offered nothing, not even vision. And the Conservatives alienated their own power base among the elderly by pledging to dissipate their assets and the value of their homes to pay for social care.

There was an assumption in Downing Street that the election would be about Brexit, but it was about traditional issues of housing, education, health, transport, pay, etc.

It is not true to say that half the country suddenly decided to vote for Venezuelan-style socialism.  It is much more likely that they voted for goodies offered by Jeremy Corbyn rather than the empty platitudes offered by Theresa May.

A few percent more of young people voted for a £10 minimum wage, affordable housing and free university education.  A few percent more of older people voted against losing pension rights and forfeiting their assets and much of the value of their homes to fund social care.  This is enough to explain what happened.

Labour came close to snatching a surprise victory, but they lost, and the Tories will learn the lesson and behave differently in future.


Tax Freedom Day is here!

Yes—the day you've been waiting for is finally here.

For every day of 2017 up to and including most of June 11th, every pound the average Brit earned went to Philip Hammond and the government. June 12th is the first full day where the national income is being paid into your pocket, and not to the taxman.

To learn more about Tax Freedom Day—how it is calculated, how it has changed over time, and what it really means, go to our Tax Freedom Day info page or read my CapX essay explaining it in detail.

And for more info on why we at the ASI think too much tax can be damaging, read my explanation of the ASI's tax research and priorities—there are many links there to info and arguments about taxation in the UK and around the world.

Well, there's your problem then

True to form Philip Blond, he of "Red Toryism," is calling for more of what just did not work. That is, the way to win the hearts and minds of the British people to to offer a milquetoast version of what others are offering the full fat version of:

“Thanks to Jeremy Corbyn Red Toryism is needed now more than ever, because it is the only thing that the party has in the box to match it.”

We do not, of course, agree with this analysis indeed we've been somewhat impolite about Blond before now. Nick Timothy's ideas o seem to run in this vein though and this is as neat an encapsulation of them as we've seen:

Timothy presumably believed that he had found an electoral sweet spot, marrying together a more leftwing, interventionist approach to economics with a more rightwing socially conservative vision.

An encapsulation which we entirely disagree with. For a leftwing, in what is absurdly called "liberal" these days, economic policy is indeed more interventionist. And so is a socially conservative set of policies, it's more interventionist. As in the economics the interventions being no, you must not do it that way, don't do what you wish as long as you're not harming others, you must, under the pressure of the law, do it this way. So it is with socially conservative policies, they are interventions insisting  no, you must not do it that way, don't do what you wish as long as you're not harming others, you must, under the pressure of the law, do it this way.

It is we neoliberals, we happy few, this band of siblings, who keep the true liberal flame alive. Do as you wish as long as you're not damaging the the rights of others to do the same. That is, a less interventionist set of policies on both economics and society.

Wouldn't it be interesting if a political party went to the country on that manifesto?

So that's another problem pretty much solved then

We don't have to go too far to find the miserablists who insist that we're all doomed, doomed I tell 'ee, because the human population is growing uncontrollably. Half the environmental publications on the planet harp on about this. And near every piece anyone at all writes on the subject of growth, or environmental limits, will have someone pop up in the comments insisting that we just must stop the peasantry having so many damn children. 

What this misses is that we've already solved this problem. And yes, it has indeed been solved by that heady mixture of free markets and capitalism, that thing we call neoliberal globalisation. This little snippet proves it:

Three men who have fathered nearly 100 children among them are doing their bit for Pakistan’s skyrocketing population, which is being counted for the first time in 19 years.

But in a country where experts warn the surging populace is gouging into hard-won economic gains and social services, the three patriarchs are unconcerned. Allah, they say, will provide.

Pakistan has the highest birth rate in South Asia at around three children per woman, according to the World Bank and government figures, and the census is expected to show that growth remains high.

That really is patriarchy of course. But what drives population size is not how many wives a man might have but how many children per woman, it is that 9 months in the womb which is the bottleneck. Two children per woman and the population falls over time - after the demographic effect of increasing lifespans - and 3.8 means a doubling every generation. Assuming that all children survive of course.

Historic fertility rates have been up at 7 and including pregnancies, still births and so on higher again. That is what led to Malthusian growth of course, the productive capacity of society was the limiting factor in how many did survive. When that capacity expanded then more survived and growth became an expansion of the population living at the same old standard rather than an increase in the level of living.

Shifting a society over to where most to all children survive, in itself a measure of increased wealth, means that people entirely voluntarily have fewer children. There are other things to do in this life after one has ensured the existence of grandchildren, after all. And this has happened where those free markets, that capitalism, have taken root. And so an increase in the productive ability of society starts to lead to an increase in living standards instead of an increase in population.  

That is, Garrett Hardin was wrong to apply the Tragedy of the Commons to population, even as his analysis of the basic problem itself was correct. Neoliberal globalisation reduces population growth.

Sure, a fertility rate of 3 does mean that population is still growing. But note that's the highest in South Asia. It's also fallen considerably in only a generation and the only way any of us see it going is further downwards.

There is no rich country anywhere near that replacement rate of 2.1, absent immigration. Poor countries are all approaching it from the upside. To the extent that human population growth is a problem it's one that we've already largely solved.

So, what's the next thing this neoliberal globalisation is going to solve? Even the UN is saying that it will solve absolute poverty within the next couple of decades. So, what then after that?