Liberal Vision

The Worst of It

I was recently asked to list my three least favourite government policies. As you can imagine, this was a tall order… But I’ve managed to narrow it down.

1. War

Governments kill in times of war but it’s never clear that they have reached their aims from an IR perspective. Apart from the the death and destruction there’s the awkward legislation that follows in times of war. Wars are expensive, your taxes rise to pay for them and they don’t come down once the war is over. Your civil liberties get eaten up and you never get them back. There is still legislation in the country which was made in World War One and is not getting repealed anytime soon. There are both selfish and selfless reasons to opposed war. The killing of innocent men, women and children and the fact that 10 years after Iraq they are still groping our b*llocks at the airport – nobody wins.

2. Agricultural Policy

I suppose we should be grateful that we have agricultural market at all since we have food and people in North Korea don’t. But distortions in the agricultural markets in the form of trade tariffs, subsidies and regulation (although I do appreciate that this is slightly simplifying things) are the reason some people on this planet still don’t have food despite the fact we have the capacity to produce more than enough for everyone.The food system isn’t fair and, sadly, the many meaningful efforts to make it more fair (e.g. Fairtrade) simply amount to more distortions.

Further more agriculture is one of the biggest polluters. Were the markets not so stilted I’ve no doubt that people in cities would be eating a greater variety of fresher produce grown in carbon neutral, pollution-free, super-efficient vertical farms by now. More importantly those who previously had no seat at the table would be able to eat at last.

3. School Policy

School choice, or lack thereof, is one of my biggest pet peeves. Not only that but schools in England are oversubscribed and over subscription is a problem you can solve very easily. Privatise all schools. Give parents vouchers so they can send their children to the school of their choosing. Government vouchers give poor people what rich people have – choice. New schools rise to meet demand and all schools compete for higher quality and better value for your voucher. You would slowly see greater plurality and innovation in the education sector.

So there you have it. What I consider to be the worst of it!

The Stacked Deck

There’s a great discussion regarding income/wealth equality over at Cafe Hayek and Bleeding Heart Libertarians:

I care – very deeply – whether the process for pursuing one’s life’s goals is fair or not.  I want everyone to have as fair a chance in the economy as is humanly possible.  I despise special privileges that stack the deck either in favor of Jones or against Smith.  (We can have a debate about what the details of “fair process” and “special privileges” look like, but this post is not the place for such a debate.)  But I do not care about differences in monetary income or wealth as such.

If (by whatever criteria) the process is fair, then the outcomes are fair.  If the process is not fair, then at least some outcomes are lamentable.  If those lamentable outcomes involve too little income for Smith and too much for Jones, then this income difference is evidence of the unfair or skewed or crony-fied process.  But the object of my concern in such situations isn’t the income difference as such; rather, it’s the unfair or skewed or crony-fied process that gave rise to it.

I’m all for correcting the process, and would be no less in favor of correcting the process if I were told that such a correction will increase income inequality as I would be in favor of correcting the process if I were told that such a correction will decrease income inequality.  Again, income differences can at best serve as evidence of a problem; the differences themselves – the income inequalities themselves – are not the core problem.

Interesting stuff.

Competing for a better Capitalism

What do rich people have that poor people don’t? I imagine that ‘money’ is the first answer that comes into your mind. Well, yes, but let’s break this down. What does money give you? It gives you choice.

Farmers began co-ops in the mid-19th century because they were being sold expensive, rotten food by private food sellers. Because co-ops were providing better produce at cheaper rates, other private food sellers had to up their game. Farming co-ops weren’t non-profits; they were a different type of capitalism. The free-market doesn’t just mean the consumer wins because they have a choice of products to buy; they have a choice between outlets which are structured differently. Different forms of capitalism compete to create better capitalism.

At the time of the financial crisis, I remember seeing very little analysis about how the Co-operative Bank fared in comparison to it’s shareholder counterparts (although, to be fair, the Co-operative bank is not a true democratic co-operative).  If we had a greater mix of co-operative banks and shareheld banks, with co-operative banks being perceived as being more ethical – the theory goes that a greater amount of customers choosing to bank cooperatively would signal to the shareheld banks that they wanted more ethical banking. The shareheld banks would have to get more ethical in order to compete. On the other hand, if a greater number of consumers perceived the shareheld banks as more efficient/cheaper, the co-operative banks would have to get more efficient/cheaper in order to compete. Thus, the pendulum would swing, increasing the efficiency, cheapness and the ethical credentials of banking.

What I’m arguing for is a greater plurality in the structures we interact with. In order for this to come about the State must recede. The main argument against greater marketisation of public services is the perception of capitalism as being unethical. A greater plurality could mean adding a dimension to capitalism that means organisations/outlets have to compete with each other on grounds of their ethical credentials as well as with prices, quality and providing shareholders with dividends. Most people don’t think about this dynamic between capitalist organisations when they think of the free-market.

The sector I fear for most is education. Classrooms don’t look that much different than they did in the 1930s. Even though almost every other area of our lives have changed our schools still look the same. Children don’t all learn the same, but we teach them all the same. Education does not seem to be moving with the times at all. I know no one who makes their living as a fine artist. I know a great deal who make their living using Adobe Creative Suite. Yet, I was taught fine art in school and I was not taught how to work any part of the Adobe Creative Suite.

Ultimately this rot is due to a lack of plurality ergo a lack of incentive to change and innovate. In my ideal world there would be three different types of school structure – schools run by private shareholder capitalist companies, schools run by cooperatively owned capitalist companies and schools run by private charities/non-profits. There would also be three types of funding – private funds, charitable donation and government vouchers. Vouchers give poor people what rich have. Choice. Were this the case education would look different in a very short period of time and unrecognisable after a long period.

This lack of choice is precisely why social democracy sucks. It sucks flexibility and plurality out of the system. The NHS, state schools and other public services are as good as they’re going to get. If that’s good enough for you, fine. But it may not be good enough in 50 years time. Changes in structure and competition change the game for the better, both ethically and efficiently. Embrace it.

Reform the Tax Code or Shut the F*ck Up!

It’s the nuanced political analysis that you’ve, no doubt, come to expect from Liberal Vision…

But seriously! Why would anyone or any corporation pay more tax than the government tells them they legally are obliged to?

Bashing corporations for legally avoiding tax is like bashing celebrities for wearing fur because it’s easier than persuading a motorcycle gang to give up leather.

The right thing to do is to make the badly needed changes to tax code. And yet our public servants don’t. Why? Because that would just be too hard for the little darlings!

I know that doing the right thing is tough. Doing the job that you’re paid to do and that you campaigned hard to be able to do in the last election must be so hard for you.

If it’s not obvious in the tax code how much more tax a company is arbitrarily meant to be paying then what exactly are the accountants meant to do? Just pull a figure from the sweet blue sky and pay that? That’s what Starbuck’s did.  It’s like ‘hush money’ – we’ll give you £20 Million and you kids leave us alone now. How on Earth is this a proper way for companies to function when it’s just not obvious how much tax corporations and wealthy individuals are meant to be paying?

And yet there are not truly meaningful efforts from the Lib Dems or the Tories to reform the tax code. So you can bash Google, Amazon and Starbucks all you want but they’re only following the law and the people who make our laws don’t seem to want to change them. This is a missed opportunity. Which is a shame; it’s needed now more than ever.

After the Welfare State

Social democracy has failed. The fiscal excesses of Welfare States all over Europe have come home to haunt them. My generation has to pay for those excesses and face poorer services than our parents enjoyed. Cradle-to-grave welfare has been an unsuccessful experiment and very few have been brave enough to articulate an alternative vision. One of these brave men is Tom Palmer and his new book, a collaboration with Students for Liberty, entitled ‘After the Welfare State’ is a must read – your future depends on it.

In ‘After the Welfare State,’ Palmer provides a compelling case for a return to mutual aid.  Destroyed in the social upheaval of the two World Wars, mutual aid organisations, also known as friendly societies, thrived in the 19^th and early 20^th Centuries. The narrative some would like you to believe is that the poor were helpless and bereft of the means to better their lot before the advent of the Welfare State. This is one of the most damaging historical falsehoods ever told. Indeed, the story of America would not be the same were it not for mutual aid. It’s demise was engineered by motivations that were sometimes rascist deliberately seeking to inhibit the self-sufficiency of immigrant and ethnic groups.

These remarkable organisations were vital to communities and provided many different products such as sickness benefit, health care coverage and pensions. Far from being powerless, friendly societies were an efficient, localised and voluntary solution to the everyday challenges facing the working class without interference from a higher class or power seeking to control or engineer outcomes.

Localised solutions beat top-down solutions every time. Despite the best of intentions, modern politicians still fail to do right by the body public because they do not really know ‘what’s best’ and they exist in a system that makes poor short-term decisions the most attractive option. Politicians borrow money to provide services (not to mention bailouts and subsidies); they literally buy the votes of one generation with money that their children pay back with interest. They have a caricatured idea of what it is like to live on a council estate or claim job-seekers allowance because so few of them have lived that life themselves. Despite this detachment they still feel qualified to dictate what is wrong with our personal habits or tastes and wag their finger in judgement.

Some say that people should be forced to help others and some say that individuals should only help themselves. Both have got it wrong. Human beings are simultaneously selfish and altruistic and individuals are happiest when they are helping themselves and others at the same time. This is why trade works so well and is so conducive to the wellbeing of mankind. By trading with someone you help yourself and him or her. The same is true of mutual aid. They are structured in a way that provides a massive incentive for the organisation to make sound long-term decisions and to self-police.

To my generation, I say this – government is neither the cause of nor the solution to all our problems. Not only will government not help you; it can’t help you – but we can help each other.

If you want to learn more about the mutual aid you can download a free copy of ‘After the Welfare State’ here.