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The consequences of unintended consequences

By Simon Goldie
January 31st, 2011 at 12:33 pm | 4 Comments | Posted in freedom, Government, Liberal Philosophy, Policy

Policy makers often refer to the potential of unintended consequences when debating new legislation or regulation. Politicians from all political parties seem to realise that whatever you do something will then happen that is unexpected.

If we start to think about policy through the prism of the unintended, then our recent political history makes a lot more sense. Someone comes up with a brilliant solution to a problem, a majority back it, it is enacted and a little later a new problem pops up because of the solution to the first problem. A new solution then needs to be developed to deal with this unintended consequence.

There are different ways to respond to this.

Governments could try and gather together the best brains in order to ensure that every possible outcome is worked out. Arguably, this approach is already being done and yet we still seem to be unable to avoid problems coming from solutions.

Another option is to accept that this is simply part of political life. There will always be unintended consequences so one might as well be stoical about it and just find a new solution.

One of the issues is that policy changes can impact on a lot of people. If that impact is negative it will take a lot of resource to solve the problem. Not only that, but ethically one might ask what right do policy makers have to affect people’s lives in this way?

There is another path to take. If you step back and let people work out the solutions by relying on the wisdom of the crowd, you are likely to arrive at solutions that everyone thinks are workable. This is because ways of doing things emerge through co-operation and experimentation. Another way to describe this is spontaneous order.

The other advantage is that when lots of people try different things and one experiment has negative effects it is not going to impact on everyone, just the ones who are engaged with that particular solution.

The great thing about this approach is that policy makers don’t need to rush off and come up with a framework that enables this activity. We already have one: the free market. And where we think the market isn’t appropriate we can always disperse power to people.


A voluntary support system vs the Welfare State

By Simon Goldie
January 30th, 2011 at 10:37 pm | 5 Comments | Posted in UK Politics, Welfare State

Over at Lib Dem Voice, Mark Pack poses the question: Was Beveridge right to oppose the Welfare State?

This may seem an odd debating point as everyone credits William Beveridge with laying the foundation of the welfare system we currently have.

In fact, Beveridge laid out a liberal blueprint to tackle want, disease, ignorance, squalor and idleness.

The Labour Government under Clement Attlee took the report and responded by creating a centralised structure that became known as the Welfare State. The NHS, education system and social security system that many now see as representing all that is good about Britain was inspired by liberalism but built by Fabian social democracy.

It is impossible to know what would have happened if a Liberal Government had come to power in 1945 but it is likely that a support system would have been established that emphasised voluntary engagement and the decentralisation of decision-making.


They can’t sell the woods for the trees

By Andy Mayer
January 27th, 2011 at 6:33 pm | 3 Comments | Posted in Environment, Liberal Democrats

Final March of the Ents

This will not happen…

Around 18% of English woodland is state-owned. The rest is private and used for a range of commercial, agricultural, and other purposes.

After the government’s DEFRA consultation on the future of the Forestry Commission it is likely the public share will fall, in favour of the third sector and some commercial interests. There will be a range of regulatory changes to protect the minority of heritage forests that are principally used for tourism or are sites of special scientific interest.

Predictably a range of anti-market national and local campaigns have been set up, or upped a gear, to oppose what the National Trust are calling “exciting new opportunities” for communities, charities and business… and they are calling selling off “an important national treasure”.

This seems to echo the language of  “selling off the family silver” that characterised Labour attacks on privatisations in the 1980s. This was not a successful campaign.

Most people instinctively will think of forests as like national parks, whether or not they’re really just mono-cultures of limited value to wildlife, let alone humans without a logging company. Access campaigns are as old as the hills they set out to liberate. Land matters tend to excite liberal passions.

Tediously then many local Liberal Democrat campaigners will join the hysteria. The chance to dust off Focus leaflet templates, swapping the word Post Office for Forest, and predicting dire consequences for squirrels should one state-owned acorn fall prey to a marauding developer, will prove  irresistible.

It is unlikely further that the party leadership will want to rock this boat, given an already delicate entente following the tuition fees reversal and control orders compromise. Forest campaigns may well keep people cheerful who might otherwise be writing stiff letters about defending the jobs of BBC web developers.

This is a pity. This sell off is quite a good opportunity for Nick Clegg to articulate a case to focus the state on less. Outside national parks why on earth does the state own any trees?

Making the ‘private is not scary’ case though is something he and Cameron don’t do nearly enough.

Instead, by playing the ‘with regret’ line on cuts, or treating every sell off as a sad consequence of the national debt, the Coalition is not preparing the ground for lasting change. It reminds me a little of the Britain in Europe campaign that tried and failed to win the Euro debate without talking about the Euro.

We saw this last week on Question Time where questioner after questioner attacked the government for opening up the NHS to, horror of horrors, “private companies”, with the responses being far from a robust defence of their record.

We see it in the bank regulation debate where the government is torn between playing along with public anger, some need for regulatory reform, and worrying the banks might leave.

It’s as though the government wants the private sector to do more and keep up the good work, recognises this will be largely a good thing, but isn’t prepared to say nice things about the private sector, just in case it upsets people who don’t agree.

This is in part a consequence of Cameron’s triangulation strategy to detoxify the Tory brand. For Nick Clegg, the party ditched sterile monomania about public versus private ownership in services after the 2003 Huhne Commission. It just didn’t do very much about implementing it after that.

It is then very hard for Minsters to make their case.

Some logging of public sector myths is in order first.

If not, the Coalition may find they can’t sell the woods for the trees.

Another bit of the empire crumbles…

By Angela Harbutt
January 26th, 2011 at 6:23 pm | 2 Comments | Posted in Uncategorized

I have always been somewhat uncomfortable with the idea of BBC World Service.

On the one hand it sounds like a marvelous idea – spreading the message of freedom to those that don’t currently enjoy it; dispensing “truth” where news is otherwise suppressed or distorted; bringing the many joys of sport and culture to those currently deprived…

On the other hand – if the aim is to provide unbiased news, information and culture from the free world – why does America have its own world service (aka Voice of America)? Surely if this was just about getting accurate information into repressed nations, of getting banned literature, art and sport into countries where it would otherwise not be seen or heard, why isn’t there a more co-ordinated, joint effort from the free nations – say USA/UK/others ? Why the duplication? 

Presumably because a good deal of this is about BBC and Government egos? The former revelling in its revered status as broadcaster to the world (because only IT can do news properly) and British government seeking influence wherever it can find it – some throw back to its colonial past….. Jeremy Dear (NUJ) has today said as much “By cutting the service, the Government will cut British influence in the rest of the world, and cuts will also be deeply damaging for objective quality news services around the globe.” . Given how much trouble the desire for “British influence” has got us into in the last few years is it such a bad thing to curtail it somewhat? I doubt it.

One also has to look at the services to be cut … language services in Albanian, Macedonian, and Serbian, Portuguese outputs for Africa, and an English-language service for the Caribbean are those on the hit list. 

I am scratching my head somewhat. Albania, Macedonia and Serbia are all recognised as potential candidates for joining the EU. All these countries have good access to multiple media sources. Serbia has a several commercial TV stations (one was even set up by News Corp until they sold it a couple of years ago) , radio stations and wide internet access (over 50% ) with some 2 million on facebook. Albania and Macedonia both have media corruption issues ( neither as bad as Italy where the PM controls 90% it should be said). But, whilst Macedonia has three state channels it has a dominant commercial TV sector ratings-wise (and at least 50% of the population have internet access with no controls on access). Over in Albania, the national media is a bit of a mess (with business media and politics still too close for comfort), but then again many watch Italian and Greek TV via terrestrial reception or listen to Deutsche Welle, Radio France Internationale or Voice of America. There are also over 150 newspaper titles, including over 20 dailies. On top of that about 25% if not more regularly go on line.

It is still true that journalists face threats in all these countries but in all three the populations are not without options for their news whatever the NUJ in London chooses to think.

Moving the World Service out of the clutches of government (yes I know there was no “direct control” ) and into the public scrutiny of the taxlicence fee payer was an inspired move. Whether the BBC makes the right decisions on where it needs to cut is of course another matter. They look sound/overdue cuts but we all remember the BBCs’ utterly bizarre view that the radio service most deserving of cutting was 6Music.

So I am not going to shed a tear here. The World Service was created in 1932 to broadcast to English speakers in the outposts of the British Empire. Thanks to a world war and a bizarre funding system (which demanded that the people who paid for it (ie the foreign office) were kept at arms length from the operation it funded) , the World Service it has been allowed to grow unchecked into a huge monolith employing some 2,500 people, broadcasting in 32 languages, across all continents. But who has ever really scrutinised what it does, other than the BBC itself?  

I am not saying it’s all bad. Of course I am not. I am simply saying from where I am sitting it’s hard to see the good. And whilst the BBC World Service may remind some of some glorious past, when the map was pink and Britannia ruled the waves, this honestly looks like a dinosaur to me. Another part of the BBC empire crumbling? The heat under Mark Thompson has just gone up to gas mark 6.

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Beep, Beep

By Andy Mayer
January 26th, 2011 at 11:32 am | Comments Off on Beep, Beep | Posted in Economics, International Politics

I recall watching a cold war documentary about 15 years ago, where one of the Soviet survivors recalled Russian pride in 1957 when the launch of Sputnik 1 edged the USSR over the USA in development of Space technology. On that day he said he wandered around town cheerfully saying “Beep, beep” to anyone who would listen and yet avoided being sent to Siberia.

In the US the event precipitated the Sputnik Crisis, a series of policy responses that led to the formation of NASA, millions in investment in education, and the most earnest period of the Space Race, eventually ‘won’ by America when they put the first man on the moon in 1969. That and the effective bankruptcy of the Soviet state.

President Obama, has used this allegory in his State of the Union address to consider the USA’s relative disadvantage to India and China in many areas of technology. Like the Space Race, this is apparently a contest the world hegemon can win by outspending their rivals. Beep, beep.

The President perhaps should review the Space Race more critically. Sputnik 1 for example burnt up in orbit after 3 months. It was a Russian Millennium Dome.

The Space Race itself whilst producing many spin off innovations such as dried fruit and no-fog ski goggles, was principally about national pride. It simulated heavy investment in science programmes in schools but it is unclear today why 1,200 US high schools need their own planetarium.

The Space Race was also a narrow field. There were clear milestones and achievements where somebody could be first. It is unclear what ‘winning’ against India and China actually looks like, in which fields this is at all likely, or what it has to do with the infrastructure investment programmes launched in the same speech.

The big news in Space today is that private companies think they can deliver what governments used to do better, faster and cheaper, with fewer explosions.

It is also the case that the changing fortunes of the world’s most populous countries is largely a matter of history and trade economics. With low standards of living and cheap education systems, India and China currently have comparative advantage across a wide range of goods and services. As that advantage drives up growth and living standards faster than the rest of the world, costs will rise and the advantage will erode.

In 50 years for example we may well be discussing South Africa’s rapid development as a threat to Chinese leadership. Only 20 years ago Japan were the new kids in town who were going to end up owning California (still for sale). The economics of cost inflation and inflexibility caught up with them and they’ve been in a rut for most of the last two decades, despite large technology and R&D advantages that persist today.

It is not at all clear then that the US or any other power can seek to address those changes through policy and spending, or why it matters. 

In fact by making it a race rooted in the 1950s Obama I think misses a trick about how the world has changed. The Space Race could happen, in no small part, due to the geopolitics of fear and threat between two superpowers. Chinese growth conversely has happened, in no small part, due to the removal of that threat and opening up of world economies.

Innovation today involves global collaboration and information sharing that would have been called espionage in the 1950s. For Amercians to ‘win’, in the sense of seeing their opportunities and living standards rise, the more R&D that can happen where it is most cost effective the better. At the moment that is India and China, not Indiana and Chattanooga.

In a liberalised, globalised world, a new type of battery developed in Mumbai can create jobs in Memphis, technology nationalism becomes less important.

In the UK for example we bemoan our inability to take great British ideas such as the computer and jet engine to market, but we have still benefitted massively from American exploitation of both. We struggle with the notion that despite having the best wind and tidal resources in Europe, most of the gear is better made in Germany.

What America needs then is less another ‘Sputnik moment’ and more self-confidence in their ability to work within an open world of many winners. Being the first flag in the moondust isn’t much of a win if all you leave behind is a flag and dust.