How to make everybody richer

The World Bank have released a report looking at how 100 countries have performed economically in the last 30 years. Which is useful; there are lots of ideas about how to grow economies, so let’s see which ones work best:

“this paper finds new empirical evidence supporting the idea that economic freedom and civil and political liberties are the root causes of why some countries achieve and sustain better economic outcomes… These results tend to support earlier findings that beyond core functions of government responsibility — including the protection of liberty itself — the expansion of the state to provide for various entitlements, including so-called economic, social, and cultural rights, may not make people richer in the long run and may even make them poorer.”

So economically, its free markets, low taxes, and small government which makes us all richer. Good to know, eh?

The bewildering thing is that people have argued this for a century and a half, and this is not the first piece of evidence to support the argument, not by far. And yet lots of people (mostly in the Guardian, it seems…) will still argue against this, will argue against the evidence.

So much for pragmatism, I guess.

Posted In: Politics Tagged: Economics • Facts • Liberalism FTW! • Politics | 5 Comments

Holy crap, the Guardian have published something worth reading!

About the government’s health reforms. I’ve mentioned in the past that some of the arguments against the proposals seem somewhat blinkered. The Guardian published an article today which looks at those arguments in a similar sort of way:

“The media debate has ignored the most obvious evidence: the fact that almost everywhere where they have been tried, market approaches work better than centrally planned government ways of running the same activity. Not all markets work well, but even the bad ones seem to do better than central planning.

Many arguments against competition in the NHS seem stuck in a 1930s time warp and ignore 80 years of world history that have taught even the Chinese Communist Party that planned economies are a failure – and this is true even when compared to very imperfect market ones.”

I still don’t understand why people think that healthcare should always be provided by the state. As far as I can see it, such strict adherence to state provision is the answer to a question that no-one is asking. The basic desire – that I think most people can agree on – is to have a good service, for the best value for money, which is accessible to everyone. In that case, as long as the government pays for the treatment, does it really matter who provides it? Shutting out providers other than the NHS simply means that we’re excluding providers who might, potentially, be able to do something better, cheaper or quicker than the NHS can. Can anyone explain why this is a desirable thing?

Some people will say “ah, but we don’t want to be like America, do we?!”. No, and the proposals do not mirror the American system. The American private insurance system, which means that some people simply can’t afford care, is not good. And that’s also not what’s being proposed. The market bit of the American system works well, and it’s notable that countries like France – which has private providers and a public insurance scheme – generally have better health systems than our own. The evidence stacks up, and as far as I’m concerned that trumps any ideological misgivings.

Posted In: Politics Tagged: Grauniad • Liberalism FTW! • NHS • Politics | 5 Comments

Proportionality

Looking at the results in the AV referendum so far, something occurs to me.

At the moment, it’s running at 32% in favour of AV, 68% against. The regional results are somewhat interesting though: 7 for, 314 against.

In this case, the regional results are not important. The winning side will be whoever has over 50% of the vote, which is as it should be. If, though, this was for representatives, the picture would be different, because the votes of 32% of people would amount to 2% of the representatives.

Nothing new, and I have no idea whether the regional boundaries used here are the same as those used for normal elections. But it’s yet another illustration that electoral reform is desperately needed.

AV wouldn’t have solved this issue, but it would’ve been an improvement on FPTP. The fact that so much of the population has rejected it – and therefore bought into the propaganda from the No campaign – is somewhat concerning actually.

People moan about politics and politicians, yet rejected a system which would’ve made them more accountable. Very odd.

As an aside, I’m even more amazed at the general backlash against the Liberal Democrats, but not against the Tories – or Labour, whose actions in government have fundamentally caused much of the mess that the Coalition Government are trying to fix. Do people really have such a superficial grasp of politics? How depressing.

Posted In: Politics Tagged: AV • Electoral Reform • Politics | 1 Comment

This is worth a listen

This is a BBC radio programme from last January, called “Are environmentalists bad for the planet?“. I heard it quite a while ago and meant to put the link up here, but forgot. Luckily it’s still online, so I thought I’d do so now. The argument is that green movements are trying to use climate change and other sustainability issues, in order to push their own political motives. Which perhaps explains the reasoning behind some of their solutions.

It’s only 30 minutes long, so worth listening to if you have time.

Posted In: Engineering • Politics Tagged: Politics • Sustainability | No Comments

It’s Almost As If One of Them Had a Rich and Powerful Lobby Pressing for its Introduction…

A couple of years ago, an independent review of the regulation of the water industry – the Cave Review – was published. This review was done for DEFRA, and looked at ways of altering the current regulatory mechanisms in order to improve the way the industry works. To promote innovation and efficiency, and to change the cost of abstraction and discharge licensing to reflect real environmental costs. As an example of thinking through sustainability, it’s exemplary.

Last year, the Labour government passed the Flood and Water Management Act. Reading some of the responses to the review, you repeatedly see it noted that: “These reforms will need legislative change. For this, the Flood and Water Management Bill, currently in draft, represents a very important opportunity” (from the Ofwat response). Great. So did they do it?

Well, the FWMA was passed last year. In the wash-up period. So no, of course, none of the Cave Review got put into legislation (instead FWMA covers stuff from the Pitt Review, which looked at the 2007 flooding. Not read it, but I probably will at some point). Despite there being the opportunity to do so, and despite the government paying for the bloody thing to be done in the first place… nothing.

Sigh.

For contrast, the Cave Review was published in April 2009. The Digital Britain report – which forms the basis of the Digital Economy Act, also passed in the washup last year – published June 2009. Pardon me if I think water resources are more important than screwy copyright legislation and the role of Channel 4.

Sigh sigh sigh.

I suppose we can only hope that this bunch do something positive. From the quick look over some of the stuff there, doesn’t look like it.

Sigh ad infinitum…

Posted In: Engineering • Politics Tagged: Engineering • Politics • Water | 1 Comment

UK Uncut Revisited

In a previous post, I mentioned UK Uncut, the activist group that campaigns against tax avoidance. It was mostly a rant, because of a particular protest that seemed idiotic to me.

Today, a report has been published which looks at the 4 main victims of UK Uncut, and what the actual situation is. In each case, UK Uncut’s argument is incorrect, and often contradictory. The report also briefly looks at the economics of taxation, and suggests some ways to reform the tax system.

I think it’s well worth reading, to understand a little bit of the nuance that’s been so crassly ignored by the protests.

Posted In: Politics Tagged: Economics • Politics | 17 Comments

Is it just me or does this not make sense?

On the Lib Dem conference this weekend:

“The motion calls for the “complete ruling out of any competition based on price to prevent loss-leading corporate providers under-cutting NHS tariffs”.”

If we can buy healthcare (of the same quality) from someone other than the NHS, for less than the NHS can provide it, why on earth wouldn’t we? Why is this so inherently wrong?

Seems odd to oppose the reforms on those grounds, really.

Posted In: Politics Tagged: i don't understand this • Politics | 7 Comments

Taxing my Patience

If you’re lucky, you won’t have heard of UK Uncut. If you haven’t, they’re an activist group who basically want businesses to volunteer to pay more tax than they legally need to, and who also dislike banks (for reasons which aren’t entirely clear to me).

So. In the last week, the Royal Bank of Scotland have announced that they lose £1.13bn in 2010. They’ve also announced that in the same year, they’ve paid £950m in bonuses to their staff.

UK Uncut don’t like this. I can’t for the life of me work out why; they don’t like banks, and this one just lost over a billion pounds. They want businesses to pay lots of tax; this one just paid out £950m in bonuses. Bonuses on which there will be an associated tax bill. So RBS will end up paying more tax than if they didn’t pay their employees. Excellent!

Okay, if I’m being slightly less facetious, bonuses with a loss might not make sense if you only take a superficial look at the headline figures. They lost £150bn, then paid bonuses of £950m; what gives? Well, it’s a large company, made of lots of different components. Some of those made money. The people who made money for the bank are then entitled to their bonus. This is not a tricky concept.

UK Uncut protest by staging sit-ins in banks. This is really, mind-numbingly stupid. I used to work for RBS Retail, so I know that the RBS staff being inconvenienced by UK Uncut are not the greedy bankers that they want to target. They’re people who aren’t paid a great deal in the scheme of things, trying to do what can be a pretty stressful job. On a Saturday. They don’t need a bunch of ignorant halfwits coming in to make their lives more difficult, and it doesn’t actually achieve anything.

I don’t mean to stick up for RBS in particular, or banking in general. The things they did prior to 2008 were fucking stupid, and it’s an absolute failure that they are such crucial businesses that the state was unwilling to let them fail. The real – bloody scary – issue here, that people like UK Uncut fail to address, is that very little has been done so far to stop banks from abusing this position again. Governments are too scared to have tighter regulation, because they don’t want to drive banks away from the country and lose the massive tax revenue they bring. Focussing on pay or taxes is a mere distraction, to focus attention on really trivial things instead of the real systemic issues.

If they don’t like certain banks, fine. Don’t use them. If they want businesses to pay more tax, fine. Campaign outside HMRC to get the tax laws changed. But misconceived, ill thought-out, stupid protests like this are just a waste of time.

Posted In: Politics • Rant Tagged: Economics • Liars • Politics • Stupidity | 9 Comments

China and Stuff

I watched this TED talk the other day (which is always a great way of killing some time), and thought it was really quite fascinating:

I don’t think it’s a completely bad thing that things like this are happening. China was poor, it’s getting richer. This is good. If that happens, it’s also sort of predictable that China will grow big, considering the population.

The thing is, we need to be aware this is happening. I think there’s a sort of implicit complacency in the Western world. We assume we’ll be at the cutting edge, that we’ll always hold all the power; we’re the most advanced now, so we must always be the most advanced nations in the world. But that’s not true. In many ways, it sort of feels to me that we’re already starting to almost stagnate in many ways. Things like the green movement are really dangerous for this. Because that movement is all about trying to reverse development, to eschew technology to take us back to a supposedly “sustainable” way of living – these are the real conservatives. Except the only way to truly be sustainable is to embrace that technology.

Look at where most of the big engineering projects happen now: the middle and far east. They seem to have the same zeal for those projects as we had back in the Victorian era. It’s great. And where are we now? Protesting against High-Speed Rail, because it’ll go through a field a mile away from my house and it’ll spoil my enjoyment of the 6 o’clock news. We’re campaigning* against things like the Severn Barrage – successfully, as it turns out – because yes we need the electricity and of course it’d be great for flood control, but it might endanger the habitat of this group of birds which don’t actually live anywhere near the proposed site. And on the subject of protests; in Egypt, they’re protesting to overthrow the government, for free elections. This weekend in the UK, (mostly stupid) people were protesting to get companies like Vodafone to volunteer to pay more tax – and I do wonder how many of the protesters do likewise. It’s mad!

Anyway. I sort of got off-topic and started ranting. Do watch the video, it’s interesting.

–

* From the site – “The expert charged with silt modelling and tidal impacts, has his post sponsored by Halcrow. How could his evidence ever be independent?” – that expert taught me fluid mechanics, and was my undergraduate personal tutor. I find it stupid that whoever wrote the site accuses him of bias.

Posted In: Engineering • Politics • Rant Tagged: China • Economics • Engineering • Politics • Rant | 10 Comments

The Politics of Blah Blah Blah

You may have noticed that the tuition fees fracas has provoked a certain amount of ire on these pages. Well here comes some more.

I’ve been angered by a lot of the opposition to the increase in fees. Now, that’s not to say that I think that there are no good arguments against them, or even that I completely agree with what the government is doing. What’s annoyed me are the specific arguments that have been used by most of the opposition, led by the NUS and Labour. The repeated misconceptions, half-truths, and downright lies that have been put forward and then regurgitated by – it seems – the majority of the student population. The irrational, unreasonable, illogical attitude that’s been prevalent is the absolute worst kind of politics, yet is sadly the most common.

What am I talking about? Take the argument that fees will make it impossible for poorer students to go to university. Does this actually hold water? Well, as with the present system, the fees will be partnered with student loans. The loans are available to all undergraduate students, and cover the full costs of fees as well as living costs. Students from poorer backgrounds will receive grants to help them with their studies (and lets not forget that it’s these grants that the NUS proposed should be cut, instead of increasing the fees. Make things better for the middle classes, to the detriment of poorer students. And yet they drone on about fairness). There is absolutely no reason why anyone will be financially incapable of going to university, so when they claim this the NUS are either being massively stupid, or deliberately lying.

A further claim is that graduates won’t be able to afford the crippling debt, but that doesn’t really hold much water either. The loans are designed so that this will never be the case. Graduates repay only when they earn over £21,000 (£6k higher than the threshold the NUS propose, by the way). Above this level, the repayments are set at 9% of earnings – the same as the current rate. Additionally, it gets written off after a certain number of years. I absolutely reject the argument that this is unreasonable, especially when it’s actually more generous than what’s proposed by the NUS!

The NUS and Labour both back a graduate tax (here are the proposals favoured by the NUS). If implemented, a graduate tax would actually work in much the same way as the fee & loan system (from the point of view of graduates, anyway). In fact in many ways the government’s system is better, when things like the higher repayment threshold and the benefit of direct payments to universities – rather than to the Treasury’s coffers – are considered. Now, I’m not arguing that this is the best thing to do. In fact it probably isn’t. But to oppose the government whilst supporting a graduate tax is simply the most bizarre and inconsistent position to hold on this issue.

And yet, this does seem to be the position of a lot of people. I’m not entirely surprised at Labour; their lack of principle and their unreasonableness are well documented. But I’m so angry with the NUS, the body which is meant to stick up for students, for absolutely failing to represent their best interests.

I mean, the education system in the UK – not just universities – is broken. For instance, there was an article in the Guardian the other day about the low number of black students accepted to Oxbridge. Now, the paper implied it’s racism. It isn’t, but it does highlight an issue which is arguably even worse. That is, that kids from poorer backgrounds tend to have access to poorer schools. The education they receive is not up to scratch, so they have little chance to earn a place at a prestigious university. Unlike many, I don’t have a problem with inequality of wealth; but I do have a massive problem with inequality of opportunity. I don’t care if there are some people in society who are vastly richer than others, as long as everyone has the opportunity to try to do that.

For all their efforts during their 13 years, Labour utterly failed to improve this situation; in fact by many measures, their actions made things worse. So frankly I have no time for them or their supporters when they unthinkingly oppose all that the coalition does, and I will not abide them pretending that they are the party of “fairness”. It simply isn’t the case. As for the NUS, their opposition to fees seems to be more to do with concern for “the squeezed middle classes” than any real concern for improving access to universities. If they genuinely cared about that, they would’ve been running campaigns to change the perception amongst the worse off that student debt is bad, and they wouldn’t have opposed the grants available for those people.

There’s more to all of this though, when you consider what this debacle tells us about the state of politics in the UK. And yes, this is where I become hugely biased, but hopefully not wrong…

Next year there will be a referendum on the alternative vote, but I would wager that many of those who were present at the protests against the fees would actually support full proportional representation. Which would have the effect of making coalition governments ever more likely.

The thing about coalition governments is that they involve compromise. That means that the parties involved may not always be able to do everything they said they would in their manifesto, and in fact may have to support stuff they oppose in order to get stuff they like. Over the last few months the Liberal Democrats have seen this happen quite often, to the extent that it seems that Nick Clegg has been elevated to the level of a sort of hate figure. The Lib Dems are lambasted for selling out, for backing things they didn’t support in their manifesto, and mostly for propping up Those Bastard Tories (and by the way, the persistent insistence by many that the Conservative party are evil toffs who take great delight in fucking over the poor and who only care for themselves… It’s stupid. Mind-numbingly ignorant, and hugely tedious. It’s so childish to pretend that those you disagree with are in fact out to do bad. Ever thought that they want to make things better too, just that they disagree with how to do it?)

Well guess what? That’s the price of coalition. The Lib Dems are compromising, yes. But so are the Tories. There really is a lot of good stuff being done by the government (and bad stuff that’s not been done!), that’s been influenced by the Liberal Democrat ministers. That’s meant Conservatives and Liberal Democrats reneging on some manifesto commitments.

As it is, people have chosen not to recognise this. Coalition government – especially in an economic climate such as this one – is nuanced. It requires people to look at the detail, to be pragmatic as well as idealistic. It’d be great if we could make university free, charge no taxes to anyone, and give everyone a mansion set in acres of gardens. But sadly we have to live in the real world, to balance conflicting needs to come up with a solution with the best compromise. Unfortunately our political discussion seems to have dissolved into extremes; into black and white, us and them. The forces of good against the forces of evil. This inability or unwillingness to accept compromise is pathetic, divisive, and ultimately damaging. And looking at the student protests, that’s what’s pissed me off so much.

Posted In: Politics • Rant Tagged: fees • Liars • Politics • Student • Stupidity | 3 Comments