Saturday, 23 October 2010

Littlewood: the Spending Review could have been far more radical

At ConservativeHome, Mark Littlewood writes,
The Coalition seems to have accepted the basic parameters they inherited from the previous administration and sought to make savings within them rather than fundamentally recasting the way the public sector works.

The impression given is that the Coalition would rather not be making any cuts at all. These are, we are basically being told, difficult and unpleasant decisions for troubled times. One is left with the nagging impression that if the public finances were in a healthy state the Government wouldn’t see fit to cut back anything much at all.
Littlewood also notes that high public spending is only part of the problem:
The Coalition has really only addressed one side of the equation so far – public spending. It needs to swiftly turn its attention to liberating the private sector. The fact that British tax legislation stretches to 8,000 pages – several times the length of War and Peace – costing businesses up to £20 billion a year just in compliance costs is madness. The recent equalities legislation will deter employers from expanding their payrolls, as would an extension of maternity leave. The national minimum wage should not be considered sacrosanct either.
I recommend the whole article.

Hat tip DK.

Tinkering with the welfare state

On Thursday, I highlighted an article by Tom Clougherty at the ASI. Later that day, he wrote another excellent piece for The Telegraph

There’s no doubt that the Comprehensive Spending Review contains severe cuts. But it is misleading to focus too much on specific areas of spending, while neglecting the bigger picture. Overall spending is only going to fall by 2 or 3 per cent in real terms, returning us to 2008 levels of spending. It’s hardly the public sector apocalypse that some commentators would have you believe.

Indeed, there is a case for saying that George Osborne should have gone further. The Labour government increased spending by almost 60 per cent between 1997 and 2010, so there remains plenty of waste to target. Nevertheless, efficiency can only take you so far. Even if you trimmed every ounce of fat from the public sector, governments would still struggle to keep spending under control, because demographic changes mean that the burden of the welfare state is going to grow unbearably large in the years ahead.

Clougherty rightly observes that Osborne "failed to question the fundamental assumptions behind the modern welfare state":

I’m not talking about free schools, or the NHS internal market, or even Iain Duncan Smith’s welfare plans, welcome as all those things are. What I’m talking about is abandoning the comprehensive, universal, free-at-the-point-of-use ethos that formed the basis of the post-war settlement.

We can’t continue paying today’s pensions with today’s tax revenues, for example – the sums just don’t add up. We need to move towards a fully funded model like Chile’s, where people have to save for their own retirements, and the sooner we do so the better. We can’t afford to make the NHS sacrosanct either: we must learn from Singapore, where people have to put money aside for their health costs, and government support is targeted only on those who can’t take care of themselves.

These are just two examples, but their guiding principle can be applied across the board: government should always act as a safety net, but nothing more. In the long run, that mature reassessment of the welfare state is the only way we will avoid fiscal calamity.


Friday, 22 October 2010

Puppies suffering, call in the government!

In addition to the usual coalition-bashing and 'cuts' hysteria on the BBC this morning, there was a segment about some truly appalling conditions on Welsh 'puppy farms'.

Predictably, the solution being proposed is greater regulation, which would impose unnecessary bureaucracy on hundreds of small breeders who treat their dogs well.

I couldn't help thinking about the contrast between the knee-jerk reaction to poor conditions on some puppy farms ("something must be done"), and the general lack of interest in conditions as bad or worse at intensive livestock farms across Europe.

We should decide what standards of care our society expects for animals, and crack down hard on those few who show callous disregard or outright cruelty.

More regulation is not the answer.

Tebbit on Osborne's CSR

Yesterday, Lord Tebbit shared his thoughts on George Osborne's Comprehensive Spending Review.

I have taken a little time before commenting on yesterday’s statement by the Chancellor. It is all too easy to become fixated on one aspect or another of his plan to get us out of the ruinous situation created by Tony Blair, Gordon Brown and their friends.

The first thing to understand is that “we could not go on like that”. We have a structural annual deficit of over £100 billion. That is, even if the economy was in good shape, with low unemployment, we would be piling up another £100 billion a year of debt.

Our debts are already costing us £43 billion a year. That no more benefits us as a nation than the interest on credit cards benefits an indebted individual. The Labour government which piled up these debts had no realistic plan to deal with either the deficit or the debts that they had run up.

Yet despite all the fulminations about “savage cuts”, the Chancellor will not reduce public spending, either this year, or in the future. He will spend £651 billion next year, then £655 billion, £679 billion and £693 billion in 2014/15. Even in the Labour Party, someone must see that those numbers are rising, not falling. Of course, they are not adjusted for inflation, but right now there is not much of that.

I still haven't found time to properly review the Chancellor's proposals, but I wasn't too surprised: it was a start, but not an especially bold one. Returning us to 2008 levels of spending is not going to help very much.

I expressed my dissatisfaction in the comments:
I wish Osborne had gone further, of course, and without affecting prisons and defence. With the relentless coalition-bashing from the BBC, it's very difficult to know what the public really think. I wish it could be put to a referendum, though I'm not sure how you'd phrase it ... "Should the government live within our means?" ... "Pain for you, or pain for your grandchildren?" ... "Cuts or tax rises?". More seriously, the government could ask which year we'd like to roll spending back to. I doubt many people would be foolish enough to say 2009, but it would be interesting to see.
"Of course, they are not adjusted for inflation, but right now there is not much of that."
Not much by historical standards, perhaps, but already on the rise.

According to the ONS, CPI was 3.6%, while RPI & RPIX are 4.6%.

As soon as the banks start lending again, the impact of the QE programmes will be fully felt. I expect massive inflation over the coming years, in line with the massive expansion of the monetary base.

This is good news in terms of making Osborne's cuts real, but it's bad news on every other criteria. Stealthily, inflation will cause far greater misery than the headline 'cuts'.
I've previously written about the impact various rollbacks would have on the deficit and taxation, and what it would take to bring government down to the size recommended by the Rahn Curve (15-25% of GDP).

Thursday, 21 October 2010

Clougherty: Reflections on the spending review

Last night I caught the end of a BBC interview with Tom Clougherty, and was pleased to see him stressing that government doesn't have any wealth except that which it takes. Stimulus in one place means de-stimulus in another. The government can borrow, but this crowds out private sector borrowing.

This morning, Mr Clougherty wrote this article for the ASI:

First up, let’s give credit where credit is due. George Osborne stuck to his guns yesterday, and achieved with the Comprehensive Spending Review what he set out to achieve, outlining £81bn in savings that the government would make between now and 2015. If these savings are realized, the government will hit its spending targets and take a big step towards balancing the cyclically adjusted current budget by the end of the Parliament. It took political courage to do this in the face of widespread special interest opposition and a generally unfriendly media.

But we do need to keep things in perspective. As the chancellor admitted in his speech, we are only going back to 2008 levels of real terms spending – so this is hardly the fundamental re-imagining of the state that some of us were hoping for. Indeed, if you assume two percent a year inflation, total spending will only fall by a couple of percent between now and 2015 – despite admittedly severe cuts in some specific departments, and particularly in capital budgets.

The reason for this is largely down to three things: health, welfare, and debt interest payments. Debt interest payments are set to skyrocket over the next five years, rising by 35 to 40 percent in real terms, and will end up costing us more than the entire education department. Welfare spending is going to remain more or less the same over the next five years, while health spending will rise in real terms by 4 percent or so. Together these three things represent almost half of total public spending, so the lack of savings counterbalances cuts elsewhere.

Read more.

(hat tip to Guthrum at LPUK)

Tuesday, 19 October 2010

BOM: So What Happened To Those 25% Cuts?

Very little time for blogging at the moment, so here's something from Tyler at Burning our Money:
As we blogged over the weekend, the noises off suggest that all that macho talk of 25% spending cuts was way off the mark.

We learned in June that George's cuts were never going to deliver more than a 4% overall reduction in real-terms spending over 5 years (ie a 9% increase in cash spend against 13% projected inflation). And although the ill-advised ringfence around the NHS and overseas aid budgets suggested that cuts in other departments might still be much higher, it now seems that even those cuts have been trimmed back. The big spending departments seem to have diverted any real pain into the welfare area.

Can that be right?

Sure, we know the difficulties. We know that even Mrs T never actually managed to cut overall spending - she only managed to restrain its growth.

But Mrs T was not wrestling with the kind of horrific government deficits and debt we currently face. Even in the annus horribilis of 1980-81, public sector net borrowing was only 4.8% of GDP, with public sector net debt a mere 46%. Compare her stroll in the park with our current predicament, where we have government borrowing over 10% of GDP, and debt already through 60% and rising fast.

In the circs, you have to wonder why we're not sticking with the original idea of 25% cuts. Surely after those huge budget increases under Brown, all departments must have a great wobbling midriff of blubber just crying out for emergency liposuction.
I hope to find time to verify the figures at some point, but I'd previously estimated that we'd need inflation of more than 2.9% per year to deliver real terms cuts, and that accords with the 13% over the course of the parliament that Tyler quotes. But perhaps the government is planning inflation far in excess of 13%. That Osborne has given the green light to further quantitative easing is certainly cause for concern.

Friday, 15 October 2010

Paying for this generation’s mistakes

Nick Clegg, in a recent speech:
Tackling the deficit means wiping the slate clean for the next generation. It means ensuring that our children do not pay the price for this generation’s mistakes. And their future must be at the heart of every decision we take along the way.
I wonder if Clegg realises quite how disingenuous he is being?

Even if the Coalition were to grow some balls and eliminate the deficit, rather than simply reducing it, the next generation will still be stuck with our debt.

Officially, the gross national debt recently passed the £1 trillion mark. It's hard to conceive. Art Cashin gave it a good shot:
Numbers like billions and trillions tend to numb the mind. They are too large to grasp in any “real” sense. Thirty years ago an older member of the NYSE (there were some then) gave me a graphic and memorable (at least for me) example. “Young man,” he said, “would you like a million dollars?” “I sure would, sir!”, I replied anxiously. “Then just put aside $500 every week for the next 40 years.” I have never forgotten that a million dollars is enough to pay you $500 per week for 40 years (and that’s without benefit of interest). To get a billion dollars you would have to set aside $500,000 dollars per week for 40 years. And a…..trillion that would require $500 million every week for 40 years. Even with these examples, the enormity is difficult to grasp.
The true national debt, however, is much worse.

Even Clegg seems to understand that thinks can't carry on like this:
The amount the country is losing in interest payments alone is a national scandal. We are going to spend £43bn on debt interest just this year. That’s £830m per week. Just under £119m a day.

For that money, we could build a new primary school every hour. We could buy a new Chinook helicopter every day. We could take 11 million people out of paying income tax. We could triple the number of doctors in our hospitals. We could spend twice as much on education every year.
And yet, the cuts currently being proposed by the Coalition won't come close to reducing the debt; all they'll do is reduce the rate at which it grows. We can and must cut much more aggressively. Government debt is deeply immoral — it is the only kind that passes from father to son.

Commons debate on increasing the EU budget

I haven't had time to properly follow the debate in the House of Commons on the draft EU budget.

The original motion by Justine Greening was
That this House takes note of European Union Document No. SEC(2010) 473, Statement of Estimates of the European Commission for the financial year 2011; and supports the Government's efforts to maintain the 2011 EU budget at the cash levels equivalent to the 2010 budget, while ensuring better value for money in EU expenditure.
It seems that Douglas Carswell would have changed it (via "amendment b") to
That this House takes note of European Union Document No. SEC(2010) 473, Statement of Estimates of the European Commission for the financial year 2011; is concerned at the above-inflation increase being made to Britain’s EU budget contribution; believes that, at a time when the Government is poised to make reductions in public spending elsewhere, it is wrong to increase that contribution; and calls on the Government to reduce Britain’s EU budget contribution.
This amendment was defeated — Ayes 42, Noes 252 — but William Cash apparently succeeded in getting a sentence added (via "amendment a")
That this House takes note of European Union Document No. SEC(2010) 473, Statement of Estimates of the European Commission for the financial year 2011; and supports the Government's efforts to maintain the 2011 EU budget at the cash levels equivalent to the 2010 budget, while ensuring better value for money in EU expenditure; and calls on the Government to reject European Parliament proposals to increase the budget.
Cash appears to have been aiming to make the best of a bad situation:
I agree very much with the sentiments that lie behind the amendment tabled by my hon. Friend Mr Carswell.
I went ahead with my amendment, because I have to recognise that the Government are about to engage in some incredibly important negotiations. They have to achieve a blocking minority, which I shall explain in a moment. That is not just a technical question, but a question of whether the Government can, first, get enough people to vote on the conciliation agreement, assuming that we reach such a point, and then achieve a blocking minority so that the Commission has to propose a new budget. That is what we are fighting for.
Of the MPs who supported Carswell's amendment, 2 were DUP, 5 were Labour, and 35 were Conservative. True to form, there was no support at all from the Lib Dems.

Wednesday, 13 October 2010

One year on

One year ago today, I started blogging.

My first substantive piece was a review of The Death of Politics by Karl Hess. According to Google Analytics, it's been read by a grand total of 33 people.

My most popular piece wasn't about politics. I guess it had some good Google fodder.

My most politically incorrect piece was probably this one, or perhaps this, or this.

The most time-consuming piece to produce was my write up of Nick Griffin's appearance on Question Time. Published five months after the event, it's had a grand total of 5 page views, so probably not the most effective use of my time!

I'm very grateful for the few readers who seem to return on a regular basis, and I'm encouraged whenever I see a new location pop up. I've had visits from 40 countries, but the vast majority have been from the UK.

In the UK, there have been visits from 77 cities, but Oxford tops the list, which rather suggests that Google is counting my own visits.

But if it is true that a large chunk of the visits are from me, that's not such a bad thing. I write partly because my thoughts become clearer as I put them in writing (at least to me), and partly so that I'll have a nicely cross-referenced collection of thoughts and links to look back on. What was I thinking in 2009-10? Most of it is here.

Over the course of the year, I've followed a variety of blogs, but a few stand out:
All have offered interesting reading, but it is Tom Paine who I most often agree with, and who provides the greatest inspiration.

I've read a fair bit of Rothbard, and agreed with much of it, but not all. A year ago, I hesitated to call myself a Libertarian. Now I find that that label fits better than any other. My pragmatic side still opts for minarchism, despite the purist appeal of anarcho-capitalism.

I've dabbled in gold and silver, and I even got as far as setting up a BullionVault account, but I haven't yet caught the bug. If I do, I hope it's not too late to benefit.

On the 29th of June, I finally caved in and signed up to Twitter. The 113 tweets so far suggest that I've been wasting far too much time in the Telegraph blogs comments section.

Quite by chance, this is post number 300, so I haven't quite managed a post a day. For the year to come, I will try to put aside my daily rage and produce more posts that I can be proud of, even if that means producing fewer overall. I'll try to read more books — I still haven't found time for The Welfare State We're In, which supplied the title for my third post, much less the classics by Mises and Hayek. And I'll try to avoid repeating myself, even as our enemies explore the limits of proof by repeated assertion.

Thanks again to those who've taken the time to read here, and especially to those who have commented.

Should we fear the RAF cuts?

The Telegraph reports:
In a private speech for MPs on Monday night, the RAF leadership challenged the Prime Minister’s criticism of “Cold War” fighter jets and questioned the decision to favour the Army in the Strategic Defence and Security Review.

Whitehall sources say the intervention may have come too late. At a meeting of the National Security Council yesterday, the Navy won its battle for two new aircraft carriers. With the Army facing only modest cuts, the RAF is now in line to bear the brunt.
I have to say that faced with a choice, I think we're better off with the two carriers.

Air Marshal Anderson made some absurd suggestions:
“Without such an air defence capability, the UK would not be able to guarantee security of its sovereign air space and we would be unable to respond effectively to a 9/11-style terrorist attack from the air.”
If the far more advanced and numerous US fighters were unable to prevent a 9/11 style attack, how would the RAF would be able to stop one? The USAF can't say that the event was entirely unpredictable; Tom Clancy wrote about a very similar scenario in 1994.

More plausibly, Anderson noted that
“The high level of investment in high-end combat aircraft and air defence systems by, for example, Russia and China … indicates that the essential requirement for control of the air has not been lost on nations whose future interests and political orientation may not necessarily be well disposed to the UK.”
But do we realistically think that invasion of Britain by either of these countries would not escalate to nuclear war? To meet these threats, I'd rather cut the air defence fighters entirely, and build up our Trident fleet.

Moreover, we're not proposing to buy the top-of-the-line F-22; the Americans are keeping those to themselves. Meanwhile, the Russians and Chinese are busy developing jets to rival it. Would the F-35 really be up to the task of stopping them?

I fear that the greatest threat to the UK actually comes from closer to home: the EU. If we continue to run down our defences, a military conflict is not inconceivable, but at the moment it looks like we're going to give up without a fight.

Tuesday, 12 October 2010

Hannan: European Parliament demands a higher EU budget

Daniel Hannan writes:
Euro-MPs want Brussels to have a direct revenue stream, so that it is no longer dependent on contributions from the member nations. However, as the MEP in charge, a former French minister called Alain Lamassoure, slyly puts it: “It must not be called a ‘European tax’. Once you mix the words ‘Europe’ and ‘tax’ in the same sentence it becomes explosive.”

Explosif, Alain? Eh bien, je jamais! Perhaps European taxpayers, struggling to find savings at home, are fed up with paying more and more for Commissioners’ entertainment allowances and extra staff for MEPs.
Hannan notes, as he has done before, that though our net contribution to the EU is rising "from £6.4 billion this year to £8.3 billion in 2011-12", we should focus on the gross figure, because the money the EU spends in the UK rarely goes to things we would have funded ourselves.
Our gross contribution is rising from £14 billion to £19 billion – enough to cut council tax by half, take fourpence off income tax or pay of our Olympic debt in a single year.
In the comments, I pointed out that 42.5 million of the EU's UK spending recently went to Oxfam, an unashamedly fake charity that is campaigning for European taxation!

Of course, there are some benefits to EU membership, but they are far outweighed by the costs.

Global warming is 'pseudoscientific fraud'

The Register reports:

A heavyweight American boffin has apparently dubbed the global warming movement "the greatest and most successful pseudoscientific fraud I have seen in my long life as a physicist", and resigned in protest from the American Physical Society, saying that the society has deliberately stifled debate on the subject.
In [his resignation letter], physicist Harold Lewis (emeritus prof at the University of California) writes as follows:

It is of course, the global warming scam, with the (literally) trillions of dollars driving it, that has corrupted so many scientists, and has carried APS [the American Physical Society] before it like a rogue wave. It is the greatest and most successful pseudoscientific fraud I have seen in my long life as a physicist. Anyone who has the faintest doubt that this is so should force himself to read the ClimateGate documents, which lay it bare ... I don't believe that any real physicist, nay scientist, can read that stuff without revulsion. I would almost make that revulsion a definition of the word scientist.

Monday, 11 October 2010

Should government spending grow with GDP?

A commenter on the Telegraph blogs recently suggested that if government spending had only grown with inflation since 1997, we wouldn't need to pay any Income Tax at all. I decided to check the numbers.

According to, total public spending was £318 billion in 1997. Run this through an RPI-based inflation calculator, and you come up with a figure of £450 billion in 2010

The actual expenditure for 2010, according to, is estimated at £661 billion. That's a difference of £211 billion, more than the 2010/11 expected take for Income Tax and Corporation Tax combined (£188 billion).
Of course, Gordon wasn't concerned with antiquated notions like living within our means, so we're currently facing a deficit of £167, expected to drop very slightly to £163 billion in 2010/11.

So, if spending were rolled back to 1997 levels, we couldn't really afford to do away with Income Tax, but we could entirely eliminate the deficit and still abolish Corporation Tax.

To abolish Income Tax, we'd have to roll the clock back to 1992, when public spending was £236 billion (equivalent to £350 billion today).

National Insurance is really just Income Tax by another name. To eliminate it too, while balancing the books, we'd have to roll the clock back to 1970, when the government spent £22 billion (equivalent to £260 billion today).

How low could it go?

In 1900 the government spent £265 million, equivalent to £24 billion today. If spending had been kept at those levels, council tax would suffice to cover it. We'd have to pay for more of our own education and healthcare but we'd have plenty of money with which to do it. And without VAT, Corporation Tax, employers NI, and excise taxes, all of the goods and services we currently enjoy would be significantly cheaper.

Policing expenses may rise as the population grows, but national defence costs the same whether we have 38 million people to protect or 65 million.

Does it really make sense for government spending to rise as the country gets wealthier? Or should the tax take be fixed in real terms, to cover the essentials, with increasing wealth kept by those who generate it?

Saturday, 9 October 2010

A government in exile, waiting for the usurpers to fall

I can't say how pleased I am that Tom Paine is blogging again:
Does anyone remember as much attention being paid after Blair's historic (and catastrophic) victory in 1997 to the Leader of HM Opposition's choice of Shadow Cabinet members? The BBC seems to operate under the impression that the Labour Opposition is a government in exile - kings over the water waiting for usurpers to fall. Odd Ed's political antics to put his true enemies (in his own party) in their place are of little current relevance to the nation. If he had immediate plans to return to power, he would hardly have chosen a barely-numerate ex-postman to be the Shadow Chancellor, would he?

Wednesday, 6 October 2010

Rule Britannia

I recently purchased a few Silver Britannias.

Each contains one troy ounce (31.1g) of fine silver, and has a face value of £2.

The Royal Mint sells them for £22.50.

There's a long history of currency debasement in this country, and though Sterling silver is well defined (92.5% pure), the weight of the "pound" itself has changed over the years, so the definition of Pound Sterling has shifted. I'll do some calculations when I've got a bit more time.

Tuesday, 5 October 2010

The Road

Last night I watched The Road.

It puts things in perspective.

I'll continue to fight Leviathan, but we certainly don't want a State of Nature. There is so much we take for granted.

Monday, 4 October 2010

A fair approach to child benefit

Earners over a certain threshold will soon have their child benefit removed.

The BBC presenters asked whether it's fair that a single-income household bringing in £50,000 should have their benefit withdrawn, while a household with two incomes of £25,000 will keep theirs. Clearly not.

Here's a fair solution: nobody should receive child benefit. I should not be forced to subsidise other people's lifestyle choices. Those who struggle to afford the inevitable expenses of parenthood should not have children.

And who is most likely to be affected by the removal of the natural financial disincentives? Are their children going to be the leaders of tomorrow? Or the next generation of welfare recipients?

If we want to help the poor, we should reduce their tax burden. Child benefit is social engineering of the most dangerous kind.

OFGEM: £32bn rewiring and new regulation

On BBC Breakfast this morning, Alistair Buchanan from OFGEM proudly explained how they had "ratcheted down" profits for energy companies over the last 20 years, and that consumers would therefore have to pay for an upcoming £32 billion 'rewiring' of the national grid.

There will also apparently need to be new 'smart' regulation to cope with the new 'smart' grid.

And why do we need a smart grid? To meet 'green targets'.

How to avoid strikes

According to The Telegraph
The Conservative mayor of London has called for ministers to raise the legal threshold for triggering a strike, threatening to undermine the Prime Minister’s attempts to avoid confrontation with the unions. Writing in The Daily Telegraph, Mr Johnson accuses the trade unions, with Labour support, of pursuing a “nightmarish return to the politics of the 1980s” with “wave after wave of debilitating strikes”. “The government should consider a law insisting on a minimum 50 per cent participation in a strike ballot,” he writes.
The libertarian perspective is much preferable: workers should be free to strike, and employers should be free to sack striking workers. The government shouldn't intervene on either side.

Incidentally, there was an interesting quote attributed to an anonymous cabinet minister: "At the end of the day, we have to be able to rule this country". Was this cabinet minister real? Did he really say this? Either way, it's telling that The Telegraph quoted it approvingly.

Sunday, 3 October 2010

Japan's fat police

Thanks to DK, I learned of the Japanese government's efforts to get 'their' citizens to slim down. It turns out it's an old story, reported in the New York Times on 13 June 2008:

Summoned by the city of Amagasaki one recent morning, Minoru Nogiri, 45, a flower shop owner, found himself lining up to have his waistline measured. With no visible paunch, he seemed to run little risk of being classified as overweight, or metabo, the preferred word in Japan these days.

But because the new state-prescribed limit for male waistlines is a strict 33.5 inches, he had anxiously measured himself at home a couple of days earlier. “I’m on the border,” he said.

Under a national law that came into effect two months ago, companies and local governments must now measure the waistlines of Japanese people between the ages of 40 and 74 as part of their annual checkups. That represents more than 56 million waistlines, or about 44 percent of the entire population.


To reach its goals of shrinking the overweight population by 10 percent over the next four years and 25 percent over the next seven years, the government will impose financial penalties on companies and local governments that fail to meet specific targets. The country’s Ministry of Health argues that the campaign will keep the spread of diseases like diabetes and strokes in check.

One of the best arguments against public healthcare is that it can be used to justify such meddling.

UPDATE: On reflection, one of the most disturbing aspects of this story is that the Japanese government chose to hold corporations responsible, rather than individuals. They blurred the line between private companies and government agents.

Corporate Social Responsibility is a dubious enough concept when it is undertaken by company executives, as explained so eloquently by Jamie Whyte and Philip Booth; it is a truly ghastly notion when imposed by the state. Managers who should be looking after the interests of shareholders, by delivering products valued by customers, are diverted from this productive activity to act as spies and enforcers. The horror of the government imposition is masked by a level of indirection; employees feel that it is their employer, rather than Big Brother, who takes such a keen interest in their eating habits.

Watch the CNN report about the steps taken by NEC, and weep:

I like to think that the British are a less pliable people than the Japanese, but we're not the country we used to be. I wish I could be sure it couldn't happen here.

Hannan on Democracy

Daniel Hannan explains his commitment to democracy:

Voters, being human, can make mistakes. But it doesn’t follow that a class of experts would have made a better decision. Just think about some of the positions that “the experts” have taken down the ages. In the 1920s, they were for returning to gold at the pre-war rate. In the 1930s, they were for appeasement. In the 1940s, they were for nationalisation. In the 1950s they were for state planning. In the 1960s, they were for mixed-ability, child-centred teaching. In the 1970s, they were for price controls. In the 1980s, they were for the ERM. In the 1990s they were for the euro. In our own decade, they were for the bail-outs and stimulus packages.

A random cross-section of the population will almost always have more collective wisdom than a group of self-selected and necessarily self-interested experts.
To that I would add (and I'm sure Hannan would agree) that coercive power, even when moderated by democracy, should be as limited and as distributed as possible. Democracy, as a system of government, may be better than "all those other forms that have been tried from time to time" [1], but government should still be kept to the absolute minimum.

The freedom we enjoy in the market (as individuals, to buy or not to buy) is far preferable to the tyranny of a majority. The more (purchasing) power left in the hands of taxpayers, the better.

[1] Churchill, November 11, 1947

Friday, 1 October 2010

A dark day for equality

This morning, BBC Breakfast gleefully reported that Harriet Harman's Equality Act has come into force.

They ran a segment on a woman who felt that the law firm she worked for had treated her unfairly, because they didn't grant her flexible working arrangements to care for her disabled son. Even under the old laws, The European Court of Justice (the highest court in our land) ruled that she'd been discriminated against. The new Equality Act will apparently make it much easier for such cases to be brought.

Even without knowing all the details, it is clear that a gross injustice was committed ... against her employer. It might not be her fault that she has a disabled son, but it's certainly not her employer's fault. What matters to them is that she does her work. If she's a great worker, it may be in their interests to giver her flexible working arrangements, irrespective of her personal situation. Or it may be that she's just an average worker, in which case she shouldn't expect equal pay for unequal work (her employer clearly judged that her caring duties impacted her performance). Perhaps she was a terrible worker, insubordinate and unpleasant. Can we know? Who should decide?

If her employer was being genuinely discriminatory — if, given flexible working arrangements, she would still have been the best person for the job at the salary she was paid — then surely it would be her employer's loss. A more enlightened law firm would be able to out-compete her employer by tapping into talent such as hers. Indeed, a group of 'disadvantaged' people could club together and start their own law firm. If the only thing holding them back was discrimination, we'd expect their venture to be a massive success.

Fundamentally, nobody has a right to work, only the right to seek it. There are two parties to an employment contract, and neither hand should be forced. This isn't the first time the government has interfered with the voluntary relationships between employers and employees, but their diktats are increasingly bold.

If I were an employer, I'd be very wary of hiring under these conditions. I would need to consider not just the basic salary and NI expenses, but also the risk that one of my employees would turn to the Equality Act as a defence against under-performance. If I faced a decision between hiring and capital expenditure (more machines, computers, and software), my choice would be skewed towards the latter. Whatever work couldn't be automated, I'd seriously consider outsourcing to India. There are millions there who would be grateful for the opportunity; do the socialists think it is right to deprive them of it? That would surely be racist.

As usual, a superficially noble government intervention turns out to be deeply immoral in principle, and counterproductive in practice.

All citizens should be equal before the law. In the Britain Harriet Harman has crafted, some people (those in New Labour's favoured groups) are more equal than others.