Tabloid Edition

Weekend Competition Winners.

I have been grossly remiss in giving the winners of the competition from two weeks ago. Grovel, grovel, apologies all round.

Entries were for The Two Things About.

In the fun and non serious class two very good ones:

Francophobia:
1) It's a crying shame how much of the CAP/how long a lunch hour/how much sex with beautiful women in kinky underwear those smelly wankers get.
2) I wish I were living in France...

Katie

Philosophy

1 Think
2 Exist

Matthew.

In the serious class:

Computer programming:
1. Your program will spend 90% of its time in 10% of the code (Amdahl's Law)
2. Premature optimisation is the root of all evil (Knuth's Law)

David Gillies

and

Blogging:

1) me me me
2) me iraq me

Katie again.

Congratulations to those and thanks to everyone who entered. The Grand Prize Winner is Arthur’s Seat:

Accountancy
1. Balancing Items
2. Our fee note is payable on presentation

Oh, so true, so true.

Organise youself a party with lashings of ginger beer and a secret masonic handshake and a pat on the back from us.

Weekend Competition.

Soon, all your Europe will belong to us.

Some months ago Richard North began to refer to Margot Wallstrom as the Fragrant One. I stole borrowed the basic concept and expanded it into "The Ever Blessed and Fragrant" Margot, or TEBAF for short and then started using it here, at Techcentralstation and in the comments section at her blog.

Lo and behold, a speech by TEBAF yesterday:

But on my blog, which is open to anyone to comment on, some of the commentators call me other things.
[...]
….or with a changed tone of voice…. “the Ever Blessed and Fragrant Margot Wallström.” I would call that an example of the art of the subtle insult…

?????
I think we’re all in rather more trouble than we realised. One of those who run Europe actually thinks that Tim Worstall is subtle?

Still, now that we’ve managed to open the communication channel, got the Commissioner listening, chanelling our words even, a few more phrases that we could ask her to use in future speeches, some suggestions for the scribes:

1) Yes, you’re right, the whole EU was a bad idea.
2) We evacuate Brussels in 15 minutes.
3) All quotas and tariffs on imports are hereby abolished (it is a Commission sole competence so we can do that).
4) We’ve finally hired an accountant who can do double entry book keeping.
5) We won’t fire that accountant when they do double entry book keeping.
6) CAP is abolished.
7) Eurocrats (both politicians and employees) will pay full tax in the countries where they are resident.
8) Free trade (of goods, labour, capital and services) between Stockholm and Siena is a good idea. We now understand that free trade between Stockholm, Siena and Shanghai (and San Francisco, Soweto, Santiago and Sydney) is the same idea and is thus also good. So we have abolished the Zollverein.
9) That Constitution thing. Well, yes.
10) It really all was a bad idea, sorry it took us so long to realise. We’re outta’ here and sorry for taking the entire Continent for a ride for the past 50 years.

Further thoughts in the comments for our weekend competition.

Help Needed.

Dave over at Carbarfeidh is asking for some help. He’s preparing a vade mecum for teachers and wants suggestions on what should go into it. He’s already got quite a list but things that you think should go into it ...well, please go read what he’s got and see if you can think of additions.

I’m not sure that my immediate thought of a decent strap to discipline the little buggers would go over well.

Workplace Regulation.

Felicity Lawrence in the Groan on workplace regulation:

The social consensus near me is that we would like to reduce the burden - on cheap labour, rather than on business. We can see what less regulation means. What if a child did get tangled up with the cement mixer, or if one of those Hungarians fell? For us, better regulation would be the sort that makes sure our fears are never realised, though we may have to emigrate to France to find it.

There’s one thing that Ms. Lawrence has missed. Something rather important in fact (no, not that bit where she says that building is the most dangerous industry in the country when we all know it’s trawling on a per man hour basis). All and any regulations, be they safety measures, hours worked or whatever, have a cost. Don Boudreaux is good on this, what would happen if such things had no cost.

Now we might actually say that such costs are worth it, that the value of a life saved vis a vis production lost is worth it. And indeed that is exactly what we do do. But to do so we have to work out that value. How much is a life worth versus the lost production? And when we make that calculation (The Don again) we have to include the opportunity costs.

No, not just how much have we actually spent on that piece of protection, but also what would we have had if we had spent that money in another manner? Perhaps hard hats on building sites are as close to zero cost as we can get, rather like seat belt laws (although even there we need to factor in the reduction in organ donors as a possible negative), yet there are also quite clearly regulations that cost vastly more than any possible benefit...some of the rules on chemical pollution are estimated in the hundreds of billions per life saved.

Should there be, from where we are now, less regulation? Yes. Should there be, from where we are now, more regulation? Yes. For example, the mandatory separate collection and recycling of every metal halide light bulb in Europe (because of the mercury content) will cost far more than any possible benefit and thus will kill people via the misallocation of our limited resources. A regulation insisting that Grauniad columnists are at least familiar with the basics of cost benefit analysis would be an undoubted boon...quite apart from the fact that it will reduce the number of things I have to write about, something you are no doubt all eagerly awaiting. 

Nonsense.

A quite wonderful piece of nonsense in the Guardian today. Well, it would be wonderful if it wasn’t so disgustingly damaging.

If road building is posited as the solution to African poverty, we have learned nothing from history. For the past two centuries, Africa's roads have led to its impoverishment. Its earliest export was the indigenous population consigned as slaves to the Americas. The trade ended in the 1860s and was succeeded by a new wave of exploitation. European traders realised they could use Africa's cheap labour to extract its abundant minerals and grow cash crops to export to Europe. To this end, Europe had to control Africa, and so the colonial invasion began.

By 1900 conquest was complete. African labour was now used to create wealth from Africa's resources for the benefit of Europe. In his economic history of Africa, Walter Rodney describes how its transport infrastructure was built to that end: "Means of communication were not constructed in the colonial period so that Africans could visit their friends. Nor were they laid down to facilitate internal trade in African commodities. There were no roads connecting different colonies or different parts of the same colony to meet Africa's needs and development. All roads and railways led down to the sea. They were built to extract gold or cotton and to make business possible for the trading companies and for white settlers."

The improved transport system enabled foreign companies to make profits, but the companies preferred to fund the costs of construction through foreign loans, thereby putting in place the foundations of African debt.

After the demise of colonialism in the second half of the 20th century, the haemorrhage of African wealth continued. Africa was locked into a global economic system rigged by the rich countries. Trade barriers ensured that Africa was denied its share of the value added in the manufacturing process - not least because the commodity market was controlled by foreign companies, resulting in low prices for African exports but high prices for imports. Africa was locked into exporting more and more for less and less; its transport infrastructure proved inadequate and so its dependence on loans remained. Currently, transport accounts for more than 25% of World Bank lending to sub-Saharan Africa, around $5,367m in 2005. Most of this is for building roads.

We are now expected to believe that if Africa had a more efficient transport infrastructure it would be able to export more effectively to western countries and expand its economy. Lowering the cost of transport, we are told, would reverse the historical flow of wealth. The African economy would develop along the same lines as the carbon-hungry affluent world, but in a sufficiently sustainable way to save the planet. It is a tall order.

They’re right that the colonial era infrastructure was based on the idea of getting things down to the sea, not on trade within the regions. So what should we do about that? Obviously, help to build a transport infrastructure that does actually facilitate trade between the regions (we might also point out to them that lowering tariffs mutually would be a good idea...low or no tariff access to the rich world is all well and good but many of the gains from trade will come from regional and local specialization).

And what do these giant brains suggest?

Tony Blair and the Commission for Africa mistakenly believe that more road building will enable Africa's economy to prosper. However, reducing transport costs will, as the commission acknowledges, greatly increase traffic volumes, thereby worsening climate change. And Africa will experience some of its most severe impacts.

Contraction and Convergence changes the direction of policy from aid for road building to payments to the poor of Africa for their unused carbon rations. This process will enable the African economy to develop, but in a uniquely African way. The affluent west can and should repay some of the wealth it has stolen from Africa. Funding for healthcare, HIV prevention, education and security is urgently needed. But Africa does not need the crumbs from the white man's carbon banquet to build more roads.

Yes! Carbon Trading! The cure for all our ills!.

What they are actually suggesting is that Africa not develop a better transport infrastructure and we pay them not to do so. That is, that they should stay poor and stuck in misery because...well, because why?

This process will enable the African economy to develop, but in a uniquely African way.

God forbid that the happy darkies and dancing picanninies should actualy become capitalist, or wealthy, or be able to feed their children or anything. No, no, far better that they remain different, unable to follow the only method we have as yet found to create a modicum of material wealth, for they are different than we.

This is disgusting racist tosh and The Guardian should be thoroughly ashamed of publishing it. Whether Africa develops along individualistic lines, communal, social, tribal, whatever, they still need a transport infrastructure as it is the most basic necessity for such development. The one they have won’t do it. Whether such infrastructure should be funded privately, publicly, via aid or whatever is a different matter but to state that they shouldn’t have one because they’re different  is worthy of the most appalling racists...these Africans, hopeless, just can’t do a thing with them.

Free Schooling in Africa.

James Bartholomew on the aim of providing free schooling to all children in Africa:

One of the ways in which Gordon Brown and Tony Blair think they can help Africa is by offering free education to everyone. It sounds like an obviously good thing. Wouldn't it be marvellous if every young African could learn to read, write and learn much else besides, as well as coming out of poverty? Of course. But there is a problem.

Professor James Tooley of Newcastle University has done a study of schooling in Africa and discovered something that will come as a surprise to many. There are a huge number of private schools there catering for the poor that do not appear in official statistics. They are not regulated and inspected or anything like that. Yet many extremely poor parents in the shanty town of Makoko on the Lagos lagoon in Nigeria make great financial sacrifices to send their children to them.

The danger to Africa is that if Messrs Brown and Blair persuade other members of the G8 to give, say, $7 billion a year to Africa to promote free education, it will have an unintended consequence. Many of the poor parents who send their children to fee-paying, private schools will be tempted to send them to a vastly increased number of free state schools. In the process, the fee-paying schools will be driven out of business or dramatically reduced in size.

Now this should make uncomfortable reading for he is describing a classic case of crowding out...as he has done in his look at the State provision of schooling in the UK...if the private sector is already doing something as well as or, in some cases, better than, the State, why should we support greater State provision? Why send our money to undermine a system that already works?

(There is one part of aid to schooling that I am wholeheartedly in favour of which is the subsidy, even the free provision, of food to children attending. Raises their interest in being there, their parent’s interest in their being there and imrpoves concentration while they are there. Butthere is no particular reason why such subsidy must only go to State schoools.)

Free primary schooling has become one of the great mantras of the development bureaucracy....I’m not sure but I think it is even encapsulated in one of the fine declarations of human rights. To question it is to be marked as a screaming wingnut....but then as I am one of those I can...just why is putting education money through corrupt bureaucracies and crowding out private providers of something a good idea?

Blair on CAP

So The Maximum Tone starts to make the right noises about reforming  or dumping CAP:

Tony Blair and Gordon Brown turned up the moral pressure on European leaders to scrap the £33 billion-a-year Common Agricultural Policy yesterday by saying that over-generous subsidies paid to EU farmers were perpetuating mass poverty in Africa.

As Britain's prepares to take on the EU presidency tomorrow, and with the G8 summit at Gleneagles coming up next week, Mr Brown said developed countries could "no longer ignore" the "hypocrisy" of a regime that distorted world trade and held back Africa's poorest nations.

Unfortunately he’s still got the wrong end of the stick. As has been noted elsewhere (in a comment here by Jarndyce, for example) the export subsidies are in fact a subsidy from the European taxpayer to the non-farming sector of the countries that consume the goods. They are not an unalloyed evil...the total effect on the recipient countries depends upon whether the benefits to that urban population are greater than the disbenefits to the farming sector. As they are largely rural and even peasant farming societies this may well be true but it is an empirical question, not a moral one.

There is a moral point to be made about CAP which is thai tt is bad for us. That 50 squillion (plus the further 100 odd squillion extracted in the form of higher prices) is the gang rape of the taxpayers by a small interest group, that 2-3% of the population of Europe that are farmers. We should simply stop it in the name of the 97 % that are not.

There is a reason why such logic is not used by a social democratic politician. If one set of subsidies are viewed in such terms, discussed as bieng simply morally wrong, then what happens to all of the other such subsidies? Those to other favoured industries, occupations, companies and individuals?

That there should be no such subsidies at all is obvious, but if we abolish them then what will politicians do if they don’t have sweeties to give out to those who support them? If by bribing being nice to politicians we get nothing back, why would anyone be nice to them?

Quite. And that’s the beginning of public choice economics.

Lions Team for the Second Test.

Here’s the Lions team for the second Test:

15-Josh Lewsey (England); 14-Jason Robinson (England), 13-Gareth Thomas (captain, Wales), 12-Gavin Henson (Wales), 11-Shane Williams (Wales); 10-Jonny Wilkinson (England), 9-Dwayne Peel (Wales); 8-Ryan Jones (Wales), 7-Lewis Moody (England), 6-Simon Easterby (Ireland), 5-Donncha O'Callaghan (Ireland), 4-Paul O'Connell (Ireland); 3-Julian White (England), 2-Steve Thompson (England), 1-Gethin Jenkins (Wales).

Replacements: 16-Shane Byrne (Ireland), 17-Graham Rowntree (England), 18-Martin Corry (England), 19-Martyn Williams (Wales), 20-Matt Dawson (England), 21-Stephen Jones (Wales), 22-Shane Horgan (Ireland).

Weird selection there but I can’t believe that it will do worse than the last one.

Postrel on Kelo.

Virginia Postrel is appalled but not surprised at the Kelo v. New London verdict. She notes somethng I hadn’t thought about, just what is the definition of an externality:

While Kelo rightly sparks the immediate demand for political action, motivated by a visceral sense of injustice, over the long run a lot of intellectual work needs to be done. Kelo is the logical result of the argument that spillovers of any sort--in this case, the positive effects of business development--constitute externalities, and that externalities justify government intervention. What's wrong with that argument? If it's fine for air pollution (as I believe it is), why doesn't it apply to refusing to sell your house to a business that would enrich the local area? Why doesn't it apply to offensive speech?

These are not easy questions, and they need to be asked. As political scientist Aaron Wildavsky warned before his untimely death in 1993, "externality" (and even "pollution") is an elastic, socially constructed concept whose application depends on what you like or dislike. If spillovers are all it takes to justify government action, liberalism's most basic freedoms--from freedom of speech to private property--cannot survive.

This is really rather important. As Richard Layard has claimed in his lectures (.pdf, and the basis of his recent book, Happiness), my having higher earnings than you (or, as is more likely, vice versa) is a form of pollution which it is entirely right and correct that the Government should tax to remove. It actually provides half of his justification for 60% marginal tax rates, i.e. 30% marginal rates are justified by that (moral? spiritual?) pollution that income inequality creates. (The other 30% is justified by habituation.)

So it does indeed seem that we need to have a slightly more rigid debate about exactly what is and is not an externality...for in this argument it appears that envy is one.

Kelo and Options.

Voluntary Exchange has an interesting look at Kelo and the effect it might have on options.

I admit I’m not a lawyer but I don’t see the gap in his logic. If higher taxes is a justification for the exercise of eminent domain then I don’t see why insisting that people crystalize their capital gains and thus be taxed cannot be so justified.