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GUEST POST: Murdoch and the Problem with Dinosaurs

By Tom Papworth
July 29th, 2011 at 11:55 am | 6 Comments | Posted in Uncategorized
This article is published on behalf of David M Gibson.
Watching a humbled Rupert Murdoch address the select committee earlier this week made me think of dinosaurs. The earliest of the ‘thunder-beasts’ were small, forgettable creatures, living in a dangerous world of high interspecies competition. At their peak, they had reached awe-inspiring heights, seemingly untouchable through their bulk alone.
By the late-Cretaceous era, the reality was that evolutionary arms race was being lost and that, despite their intimidating weaponry, real competition was going on underfoot, as smaller creatures feasted on their eggs and contributed to their fate. A similar cycle reoccurred post-mass extinction, when the world’s new megafauna were almost entirely eradicated by climate and mankind. It is likely that, one day, it will be the bugs and the bacteria that will do for humans in turn.
The problem is that big beasts do not adapt very well. Despite the (somewhat unfortunate) acquisition of MySpace, News Corp has a negligible online presence. Murdoch’s obsession has too often been his news media and it now appears that he may fall into the trap of clinging too hard to print media, even though it contributes a small part to his personal empire.
Assuming that the Murdochs were truthful in their testimonies to Parliament, their heads were too high off the ground to either willingly or effectively probe at the moral rot beneath. In hacking, blagging and bribing, severe risks were taken to get at the eaves of the tallest trees, seemingly without a sense of mortality. It should have been obvious that at some point this would all come out, especially with the planned BSkyB acquisition inflaming Murdoch’s opponents in the media.
Similar problems of corporate governance can be seen in the string of BP’s technical failures involved in the Deepwater Horizon oil spill and the development of dodgy investment packages at Lehman Brothers. All three had a presence in politics and were considered to be too big to fail [or at least, to take on – Ed]. The damage done by big beasts like these should remind us that it its dangerous to concentrate power. The rot of our almost uniquely unaccountable media has spread to our politicians and police. It has not just jeopardised the personal privacy of the famous, but of countless individuals the press has frenzied upon.
As round two of the phone-hacking scandal comes to an end, it is disturbing that so few voices are addressing the real problem. Prior to the scandal, three media companies controlled 80% of the purchased print media market. While a report by Ofcom noted that, in 2009, print media was the main source of news for only 8% of the public, it would probably rate far higher for opinion-shaping. Newspapers are more opinionated and partial than television and radio news, more esteemed than new media and more articulate than live debate. The political lesson of ‘Hackgate’  should be the need to prevent corporations from accumulating such influence.
Nick Clegg’s plans for better regulation of the media may help this, but this is about competition where, as in evolution, even the big beasts are not untouchable and a single disaster can bring them down. What Clegg’s measures lack are three things: an end to politicians having a say in commercial acquisitions, whether Jeremy Hunt or Vince Cable; effective independent bodies to prevent purposeful accumulations of large market share; and a reduction in any tax or regulation which significantly impedes entrance to the marketplace by new players.
Real competition would mean executives and share-holders keeping a close eye on their corporate culture. After all, we wouldn’t let dinosaurs evolve in our society, why let commercial monsters do the same?
David M Gibson is a classical liberal and a member of the Liberal Democrats. He is currently interning at the Freedom Association. A collection of his writings can be found at, as well as on the Freedom Association website.

"I'd just like to say one thing: This is the most humble day of my life."


‘Muscular liberalism’: how to make it work

By Simon Goldie
July 29th, 2011 at 11:18 am | Comments Off on ‘Muscular liberalism’: how to make it work | Posted in Liberal Democrats, Liberal Philosophy, Uncategorized

If Nick Clegg is to continue his pursuit of ‘muscular liberalism’ at the Lib Dem party conference there are two ways he can make it work.

While the term ‘muscular liberalism’ was used by the deputy prime minister to describe how the party would differentiate itself to its coalition partners, it is how that is done that will lay the ground for the party’s electoral proposition in 2015.

It is commonly accepted that there is a rough divide in the party between social and economic liberals. This is crudely seen as a difference of opinion between liberals who favour social justice over liberty and liberals who favour letting the free market work so that liberty and fairness are achieved spontaneously. Yet, both groups agree on some fundamentals about the concentration of power and the freedom of the individual.

Perhaps what really separates the two is how to tackle the problems of a modern society. For instance, the financial crisis has led to calls for greater regulation in order to ensure that the taxpayer doesn’t have to bail out a bank ever again. Government’s supporting banks, or any other business, goes against the liberal grain.  With an already complex, regulated system that gets price signals from a central bank the idea of putting in more regulation to deal with the problem seems very logical. This policy answer could well be part of Clegg’s ‘muscular liberalism’. This response is certainly part of a social liberal agenda.

But as the joke goes about asking directions, would you start from here? A liberal might prefer to be in a different situation in the first place. If there was a way of tearing down the barriers to entry for new financial organisations, freeing up the market so that when a bank failed it could fail and removing perverse incentives to borrow money when one shouldn’t be borrowing money, economic liberals would raise their hand and say yes to that. In fact, if such a system satisfied the policy objectives of the ‘social’ wing of the party, it is hard to see why they would object either.

Could this type of ‘muscular liberalism’ work? If Clegg and others decided that this was the liberal direction of travel they wanted to follow, they may still have to temporarily accept some form of regulation of the banks to deal with the current situation while working towards a liberal approach that John Stuart Mill would be comfortable with.

This approach could use Jock Coats’s ‘rigorous liberalism’ as its template.

What all of this comes down is making a choice between trying to make the economy and society more liberal by using policy tools that led to the current status quo or by using liberal mechanisms to achieve liberalism.


Guido is wrong on capital punishment

By Andy Mayer
July 29th, 2011 at 10:50 am | 7 Comments | Posted in Crime, Libertarians

The launch of the government’s new e-petitions service has inspired Britain’s leading political blogger and libertarian Guido Fawkes to launch a campaign for a vote to restore capital punishment for “child and cop killers”.

“We shall at least see which MPs believe salus populi suprema est lex, and those that put the welfare of child killers above the wider community. Let them be counted.”

He believes such a move would have popular support, and may well be right, instinctive sympathy for murderers is in short supply.

That though should not be enough for a populist liberal or libertarian commentator to reach for the noose.

The principle problem with the death penalty is that to be just it relies on certain guilt. A post-mortem appeal is of value only to the cause of history, not the accused. Life in prison, which should mean life for those Guido is targeting, at least carries some opportunity for compensation.

To believe in the death penalty one must either believe in the infaliability of the state justice system, I suspect Guido does not. Or like the former Conservative MP for Selly Oak, Sir Anthony Beaumont-Dark, a strong influence on my youthful liberalism, that:

“a few miscarriages here and there are worth the price of protecting the public” – 1989, at a speech to KES Birmingham

The few at that time were the recently released Guildford Four, wrongly convicted of 1975 pub bombings, shortly followed by the over-turning of similar convictions for the Maguire Seven and Birmingham Six.

I do not believe those lives are worth the limited comfort of knowing some genuine killers can never kill again. I certainly don’t believe the state can be entrusted to make those choices. Even modern forensic techniques have not eliminated injustices. The death penalty is a tool, open to irreversible abuse and error, not guarantor of individual liberty.

A second reason against capital punishment is deterrence. Perhaps Guido is more compassionate than I am, but I would rather a genuine child killer, like Anders Breivik, spent the rest of their long natural lives facing the consequences of their choices, rather than getting off on early release. Child killers in particular face potential terrors and threats in prison that can see them spend long periods in solitary confinement with only the ghosts of their evil for company. That should be a far worse deterrent than a six foot drop.

Where I would concede change in the current system is that those with no hope of release, should after a minimum sentence be allowed to request assisted suicide. It should though, as with assisted dying for the terminally ill, be their choice and humane. Surely that would be a better reform campaign for a lover of freedom than a returning powers to the state to act as the lynch mob of last resort.

The trouble with the Office for National Statistics

By Tom Papworth
July 28th, 2011 at 8:55 am | 1 Comment | Posted in Uncategorized

The Office for National Statistics is often, and usually unfairly, criticised as being a biased arm of government, massaging figures to suit government paymasters. Only when they publish bad news (as this week’s sluggish growth figures attest) are they considered to be impartial.

There is a real problem with the ONS, but bias isn’t it. Statistics is not an exact science, but it’s a science nonetheless, and witty aphorisms notwithstanding its practitioners are not in the business of lying.

The real problem with the ONS is that its outputs inevitable become justifications for government action. In a world where politicians must be seen to do things, and where every statistic can be turned into a Cause Célèbre, the collation of data and the publication of statistics becomes a motor driving the engine of government.

Fredrich Hayek said in his Nobel acceptance speech, “while in the physical sciences the investigator will be able to measure what, on the basis of a prima facie theory, he thinks important, in the social sciences often that is treated as important which happens to be accessible to measurement.” To put it more succinctly, That which gets measured matters, or as Tom Peters put it, “What gets measured gets done”.

Sir John Cowperthwaite, the Financial Secretary of Hong Kong credited by many as fostering that terrirory’s economic miracle, famously resisted requests to provide statistics to HM Government, lest they be used as ammunition by those who wanted more government intervention. It didn’t seem to do Hong Kong any harm.


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Tories call on David Brent to save the UK economy

By Tom Papworth
July 27th, 2011 at 8:12 am | Comments Off on Tories call on David Brent to save the UK economy | Posted in Book Review, coalition, Conservatives, Debt, Economics, Liberal Democrats, Liberal Philosophy

Politics makes strange bedfellows; coalitions especially. In the 1970s the Liberals made a pact with socialists despite socialism being the antithesis of liberalism; in 2010 the coalition finds us in bed with Conservatives despite the Tories opposing liberalism for centuries.

Coalitions therefore require us to remind the voters how we differ from the parties with which we are aligned in government. This week a new report from the Conservative-leaning think tank Civitas reminds us of one crucial difference: the Tories have always opposed free trade.

Reviving British Manufacturing: Why? What? How? appears to be a throw-back to a former time, when the Tories banned wheat imports to protect the interests of their landed backers. Between fawning praise for Margaret Thatcher (“No one doubts Mrs Thatcher’s commitment to a market economy, [Er… Yes they do – Ed] but she was no market fundamentalist and her pragmatic patriotism is often forgotten“) Civitas suggest that the UK should indulge in one of the most fundamental economic blind-alleys in the Handbook of Bad Government: protectionism.

The reason that Civitas cite for this bizarre and dangerous policy is the UK’s balance of trade deficit, which measures the net flow of payments for goods and services into/out of an economy. Civitas argues that “We already have a balance of payments problem… With the annual trade deficit in goods now at a new record of £97.2 billion… only radical Government action will prevent Britain’s permanent decline as an industrial society“.

In fact, they later admit that the real trade deficit is £46.2 billion, but that they are choosing to ignore the trade-surplus from services. This is an absurd confidence trick, which ignores the fact that the UK’s comparative advantage is in services (Yes, even financial services! – try to contain your disgust). This attempt to make us focus only on one part of the economy is risible: I suspect that if one ignored manufacturing and focussed solely on services one could argue that China is running a trade deficit; if so, the politburo do not appear too bothered.

Even accepting that there is a trade deficit, this does not matter. As Milton Friedman noted, £100 billion is only of use to foreigners because it enables them to buy £100 billion worth of British goods. The pounds themselves are useless to them: “they cannot eat them, wear them, or live in them. If they were willing simply to hold them, then the printing industry – printing [pounds] – would be a magnificent export industry… [that] would enable us all to have the good things in life provided nearly free by the” nations foolish enough to swap perfectly good goods and services for paper adorned with the Queen’s face.

In fact, many foreign nations seem quite prepared to do that, and worse: they then lend the money back to the UK. This has created twin problems: on the one hand, it enabled us to buy even more of the good things in life (such as the public services spending splurge from 2001 to 2010), but only by borrowing against our future and that of our children. Secondly, it kept our currency high and theirs low, thus making our exports less competitive and theirs more attractive, and so exacerbating the balance of trade problem.

The solution, one might therefore think, is to stop borrowing the money. If they can’t lend it to us, they will have to spend it in the UK, and so we will achieve equilibrium in our balance of trade (but with a weaker pound). However, if you are a Tory think tank, there is an alternative: protectionism.

“the Government should encourage an increase in manufacturing output by about £10 billion per year”, the report argues, (why not £11 billion? 12 billion? What’s so special about £10 billion?), but crucially, this should not be done through promoting exports (itself dodgy, but now is not the time), but by import substitution: “exporting is costly… in the short run … it will be much easier to focus on the home market and out-compete importers.”

Import substitution is economic madness: not even Labour recommends this sort of thing anymore. It completely ignores the Law of Comparative Advantage(aka. the Ricardian Law of Association) and indeed undermines the whole basis of trade, which is specialisation and the division of labour.

And what are the four industries that Civitas wants the UK to specialise in over the next few years? Where should we focus our efforts, expanding domestic supply by throwing up walls to prevent cheap foreign imports?

In a companion essay, Civitas cite four particular industries that might not strike the average reader as particularly promising: Paper; Glass; Steel and Motor Vehicles. Admittedly, we have some good companies operating in each of these industries, but the idea that Wernham–Hogg paper merchants will become engines of the British economy is hopelessly naive.

Add to this the suggestion that Britain should establish a “Ministry for Economic Growth, focused purely on reducing the trade deficit through increasing production” (where to begin with this one?) and a tacked-on side-swipe at the European Union and you have a classic piece of Tory wonkery.

In 1962 Milton Friedman argued that “It is not too much to say that the most serious short-run threat to economic freedom… is that we shall be led to adopt far-reaching economic controls in order to ‘solve’ balance of payments problems. Interferences in international trade can seem innocuous: they can get the support of people who are otherwise apprehensive of interference of government into economic affairs… yet there are few interferences which are capable of spreading so far and ultimately being so destructive of free enterprise.”