A Place to Stand

Jerry Pournelle had a bit of discussion going on whether Obama's stimulus plan was worth trying because nobody knows whether it will work or not. I sent in this, which I have discussed before which he published:

You put this up previously so I am not asking you to do it again but the answer to Roy's question about experimental evidence for what economic policies work is in this statistical correlation of the world's economies & what correlates with growth.

http://brianmicklethwait.signal100.com/
podcast/HabitsofHighlyEffectiveCountries.pdf

I regard it as the last word on the subject until somebody competent does it again.

Their answer is economic freedom. More surprisingly to me it says there is little correlation between welfarism paid from high personal rather than business taxes & lack of growth - as someone surprised by this bit I find the finding more credible because they do not exactly aline with any political philosophy.

My previous article highlights these conclusions:

P9 "When published data for all countries has been analyzed the correlation between higher taxes & lower growth (which exists in OECD countries) is not found"

p 10 "During recent years, simple techniques have developed for predicting probable effects of individual measures. It should therefore be easy for all countries to prosper, yet very few do, which suggests that policy makers in most countries:

Adopt sub-optimal or counter-productive policies unwittingly;

Do not use readily available techniques to avoid, identify and correct mistakes, or

Have higher priority anti-growth objectives." (since this report was prepared for the new South African government it seems itself proof of government not making growth a priority - this suggests that what is needed to obtain growth is to put it higher on the political agenda - precisely my intent)

p12 "There is no evidence that foreign "aid" has the potential to "make poverty history". On the contrary, the evidence suggests that aid may be harmful......The aid paradox is that to be a positive incentive, aid would have to go to countries where it is not needed, that is, where governments adopt policies that
result in high growth." (I would point out that aid recipients are self selecting as failed states statistics shown a correlation between aid & failure may be because more aid is the effect rather than the cause)

p13 "What matters, as far as economic growth is concerned, is not the characteristics of rich countries, but of high-growth countries." (The fact that Ireland & Norway are richer doesn't matter. The fact Ireland is growing far faster than us should be a lesson)

p 25 "Everything gets better with growth....
few people realise how much faster countries become much wealthier if they achieve just slightly higher growth rates" (indeed few people understand in their bones how fast compound growth in anything works)

p40 "Most of the world's top 10 richest or highest growth countries never had
colonies"

p41 "welfare states under-perform on average, which could also be attributable to the fact that welfare statism tends to coincide with other policies which compromise growth, Sweden being the conspicuous exception, where the market has been characterised by regulatory liberalism and privatisation." (I would also hold up Singapore as having a cradle to grave welfare system, though one which is cost conscious, yet has an obviously high growth rate)

p 43 "The world's experience appears to support the view that economic freedom may be a necessary and sufficient condition for prosperity"

p50 "Firstly, China cannot be thought of as a single economy or even as a single country as far as its economy is concerned. The diversity of economic systems within China, from one province to another, is bigger than the diversity of economic systems internationally. Secondly, almost all its growth (industrialisation, investment, etc) is not only confined to provinces with high scores on the marketisation index, but to a few special zones. Thirdly, these zones have the freest economies on earth, if not the freest economies the world has ever known."

PP50 & 51 - China's 10% annual growth conceals even greater success. China is not an enormous free economy, it is a range of economies from Guandong province which is nearly as free as Hong Kong (& growing at about 20%) to Quinghai, which has an economically less free market than the world's least free independent country Burma accordingly China is "close to a controlled experiment in social science". An experiment which goes largely unnoticed here. This proves 2 things.

Firstly that 10% growth is not a maximum beyond which other countries cannot aim but merely an AVERAGE. If China has a province the size of European countries (85 million) growing at 20% then a mere 8% is indeed for wimps (granted internal movement in China means the population is growing far faster than anybody would for the UK as a whole & this probably considerably helps growth). Applying this to the Scottish example it suggests that we can continue falling behind England & continue to see the decline of Scotland's population if we choose to do nothing.

Secondly that the Chinese "bubble" is not going to burst, indeed because the faster growing provinces are becoming an ever larger proportion of the economy we should expect their 10% growth, which represents the average, to increase.

PP 54 & 55 - Countries with high taxation levels are not automatically going to have lower growth rates than those with high taxation. This comes as a surprise to free marketists & somewhat less so to me, who at one stage was a great supporter of the state capitalism which really did produce high growth in the early days of the USSR. The reason seems to be that if government spends the money as wisely as the free market it will achieve at least as good results. To spend effectively government should (!) build infrastructure especially transport, (2) provide services rather than regulate (ie the NHS rather than smoking police) (3) do things that don't merely duplicate what the market does (don't run the railways) (4) increase efficiency by outsourcing & privatisation. To extend my point about the early USSR I believe that where government is bad is in the long term - because it doesn't have the spur of bankruptcy an efficient government enterprise may start efficient but, over time, inefficiencies will grow. I believe that is what happened to NASA & the USSR, both government organisations which once performed spectacularly & over time became mired in bureaucracies. By comparison a Scottish executive which insists on spending 70% of its transport budget on outdated railways & prefers windmills to nuclear has managed to omit the first stage of the process.

P58 - Most studies find that less regulated countries out perform more regulated ones (unsurprising) & that regulations cost the people 20 times more than they cost the government (surprising).

p60 - "The relative size of education budgets does not significantly influence growth"

Obviously the same arguments apply to our own beloved leader's borrow & spend on government bureaucracy programme.

The entire pdf report is long but highly recommended http://brianmicklethwait.signal100.com/podcast/HabitsofHighlyEffectiveCountries.pdf - statistical correlation is applying the scientific method to economics which I think is a good idea.

The British media have not covered themselves in glory in their treatment of Alfie Patten, his girlfriend & her (& possibly his) baby. We have seen hypocrisy from them in saying how dreadful it is & in giving the young lovers so much money which is bound to encourage others, not realising that the next 13 year old father is not going to be so newsworthy.

Indeed it may very well be that Chantelle, who doesn't have quite as much visual appeal as Alfie, has chosen the official father with a bigger eye for the main chance than accuracy. If so she would not be the first but that does give concern.

Where the hypocrisy really shows is in the astonishment that such "children" are able to give birth. Throughout most of human history a 15 year old girl was a woman fully capable of being a mother. The Jewish Bar Mitzvah celebrates a boy becoming a man on his 13th birthday. This is because, back in ancient Israel, he was. Sometime ago I did an article on the benefits of teenage pregnancy & why it was so preferable to the tragedy of so many western women put off having children until it is too late, or at least until the chances of a Down's syndrome baby is greatly increased. I have somewhat changed from that, not on the fact that the teenage years are biologically the best for childbearing, which is a simple medical fact, but that it is less likely to produce a stable family & that family stability & in particular the presence of a father is vital to have a good chance of producing a child who grows into a competent adult.

Alfie, if he actually said, uncoached, what the papers say he did (always an open question) seems to be acting far more responsibly than our society as a whole. He says he wants to be a real father living with the mother. I'm not sure whether this will be "allowed" since they are both under the age of consent & it may thus be illegal but it would be obscene if the state were to thus prevent them having a chance at family life.

The social purpose of marriage is to care for children. As such it is not only a good but a vital institution. - all else is convention & history shows that the overwhelming majority of people who ever lived did so under patterns of successful marriage customs which differ enormously from the pattern of our tribe at this moment. I am ripping off a fair bit of this from Heinlein's Moon is a Harsh Mistress & Friday in which he predicted the evolution of all sorts of different family structures. Though we have seen the breakup of traditional family structures we have seen them replaced by nothing - a girl alone dependent on benefits is not a family. The fault for this is, I think, the growth of government, social work, a benefits system that actively prevents the birth of stable relationships with children, particularly non-traditional ones & a general prurience about telling other people how to live their lives (particularly by journalist & politicians who have no great record in such matters themselves).

I must admit I don't know exactly where to go from here but would incline to the state having a specific policy towards supporting children having loving parents & to benefits being paid not according to social circumstances but purely in the name of the child, but not much else. Adoption is being actively prevented by social workers.

One very traditional solution, never discussed, is of a child of very young mother becoming a "late baby" of her grandmother & sister of her natural mother. Among the numerous improbable accusations made against Sarah Palin was that her last baby was of that type. I doubt very much that it is true in her case (it would have meant she spent months as governor with a cushion up her jumper & nobody twigging) but it is clearly workable. It is also something which would send any social work dept into conniptions & quite conceivably get the grandparents arrested - certainly they would get far less money than a mother with no male parent in sight gets. Though technology gives us opportunities nobody in history has had before we are socially less free than the Victorians & many other eras.

I have previously listed this letter about the dissection by our Kosovo "police" as being unpublished by the entire British media. I apologise to the Scotsman newspaper who did indeed publish it on 9th April 2008 & have no idea how I missed it.

Buried deep in Carla del Ponte's book of her role as Yugoslav war crimes prosecutor, The Hunt: Me and My War Criminals, published last week, is an admission that, that because of information supplied by "reliable journalists" (ie western ones) she has known for years of the KLA, under the authority of the NATO occupiers, kidnapping at least 300 Serb teenagers and perhaps 1,300 of them, dissecting them and selling the parts to hospitals in the NATO countries. She did a very {cursory investigation which proved it happened & immediately stopped.}

Had this happened under the rule of Adolf Hitler, it would, correctly, be excoriated annually as one of the worst obscenities of the Holocaust. Had anything even remotely comparable been happening under Chinese rule in Tibet it would have had banner headlines in every western newspaper.

Though this has been reported by Pravda, among others and on the net, western written and broadcast coverage has been essentially limited to one small item on Fox news and a couple of mentions in the Italian press. The fact that this was carried out under the authority of our government and allies, with the knowledge of journalists and funded by western health services does not make it less newsworthy. The monolithic decision of our media not to report this is not to be commended.

The Scotsman thus becomes not merely one of the 3 British media entities to have, as far as I know, reported this but the first to do so. The others are a Guardian article written in a manner remarkably sympathetic manner to the owner of the building where this particular atrocity took place & one sentence by Mr John Pilger.

I would like to thank the Scotsman letter editor, Douglas Steele, for running this, which, as can be seen, makes him close to unique in the British media.

I remain of the opinion that, since the total number of Serbs missing & assumed murdered like this is, officially (Serb estimates are considerably higher), 1,300 this should by any objective standards, have received & be still achieving headlines far larger than the entire recent Gaza conflict for which Hamas claim fewer deaths (& the Israelis much fewer again though Hamas figure is usually reported).

By appointing the KLA as our "police" under their command authority & sending them out to carry out such atrocities our own & other NATO political leaders have, all, committed crimes against humanity in a way which del Ponte's "court" never approached being able to demonstrate against Milosevic. Since the body organs were flown out from Tirana airport & paid for I do not for a second believe that there would be any serious problem in tracing which hospitals received them & who they, in turn, paid.

This is one of the original reports of this (not in UK media.

This morning the BBC radio phone in was about a campaign for better rail being run by an organisation called Passenger Focus who complained that our train trips cost 50% more than those across Europe. Although the terms of reference put by the BBC were should we have cheaper train fares (paid for by the taxpayer) or should we have much cheaper ones. They said, before the programme started that they had had a lot of phone calls saying that the taxpayer was already paying to much but such callers were not well represented among those put on air. The Press have also been briefed on this public campaign:

Rail fares in Britain are on average 50 per cent higher than the rest of Europe, a study has shown, putting pressure on rail operators and the government to cut ticket prices.

....Ruth Kelly commissioned Passenger Focus, the consumer watchdog, to carry out the inquiry last year when she was transport secretary. She had noticed that customer satisfaction levels had not risen in line with improvements in train -performance.

...However, the Department for Transport said it would cost an extra £500m a year to bring UK commuter fares in line with those in more heavily subsidised European countries.

Well after all grassroots consumer organisations should sometimes get access to the media to put their points even if they are wrong. They are perfectly entitled to proselytise their customer's views that “Passenger Focus also recommends that Government reviews its intention to shift the cost of funding the railway from taxpayers to passengers". But hold hard & lets see what sort of grassroots consumer organisation Passenger Focus is. According to their website they are

"We are an independent public body set up by the Government to protect the interests of Britain's rail passengers." which seems to be a new use of the term independent "We have 14 board members and 40 staff working out of two offices"

So far from being a grassroots organisation whose appearance on the media shows what a free & democratic place it is this in fact turns out to be merely a quango set up by the government to promote & lobby the government for more taxes & a larger state sector being promoted by sleight of hand & sheer dishonesty as "independent". Faking grassroots is known in the trade as Astroturfing.

Cynics seeing the BBC interview somebody on the cause of the day may believe they are seeing a government journalist interviewing a member of the public with an axe to grind. In fact what they are seeing is two government propagandists talking to each other & the public (say in the form of the unsubsidised Taxpayer's Alliance) firmly not invited.

An ever increasing number of supposedly charitable or consumer or in international relations "non-governmental organisations" such as Human Rights Watch are in fact, wholly or in large part, government funded quangos in makeup paid to propagandise for more government spending & to lobby the government departments that set them up for that department to get a bigger budget. I have previously reported on this with respect to Friends of the Earth Europe & the Childcare Trust. Fakecharities have produced a listing of some of these including Alcohol Concern, Ash, Weight concern, Forum for the Future (eco-fascist), Child Poverty Action Group etc etc.

At the very least when reporting such things any journalist, particularly one working for a nationalised broadcaster, should report that this is government propaganda by a government quango. It is not only political bias to devote programmes overwhelmingly to regurgitating government advertising but it is dishonest to say or imply that it is not such propaganda.

A letter today from me in the Scotsman. Quite surprised at this since I have sent in quite a few lately & this is very far from being the most important.

Clark Cross (Letters, 17 February) calls for all participants in the debate on alleged catastrophic global warming to declare financial interests. I run a science fiction bookshop that receives no cash from any political source.
It has been regularly commented on that a remarkably high proportion of those scientists willing to put their sceptical heads above the parapet over warming are emeritus professors – thus not depending on approval or grants in any way.

A couple of years ago, the head of the Natural Environment Research Council (Nerc), the government's grant- giving body, publicly challenged sceptics to a public or online debate on warming, and though he ceased responding when his challenge was accepted by a number of sceptics and the debate never took place, it must be difficult for any scientist seeking funding to believe the £370 million Nerc dispenses will go equally easily to sceptics as to alarmists.

I have previously mentioned Alan Thorpe of NERC's call, published in the Guardian, for a debate & his subsequent disappearance.

Interestingly the online comments were, with the exception of one demanding sceptics prove a negative, uniformly sceptical. There are some very nice ones commenting on the accompanying letter which praises Vicky Pope of the Met Office for saying alarmists shouldn't got OTT. They provide a long list of previous comments of Ms Pope going OTT on the subject. It is clear that the warming lie has been overwhelmingly publicly rumbled & the perpetrators are jostling each other to get to the door.

John Redwood has an item today on making councils more efficient. He says council officers:

compile a list of “unavoidable” commitments to add to last year’s total. On goes the revenue consequences of last year’s new projects, the need to make crucial repairs to capital assets which they otherwise have not provided for, pay rises agreed, automatic bonuses, the consequences of government circulars seeking more actions by Councils (whether they are statutory or advisory), and any other item they can kitchen sink. They usually claim Council inflation is much higher than CPI inflation, and put a large figure in for that as well.

This produces typically the “need” for a 6-10% increase in Council Tax for a so-called “standstill” budget. If Councillors accept this work of fiction, they are on the hook for a bruising and ultimately unsuccessful budget process. If Councillors counter by saying they want to do something new in one or two areas, that is extra making the Council Tax increase even higher. If they request a reduction in the proposed tax increase – and they usually do – officers then come forward with “cuts”. These are usually carefully chosen to cause maximum political pain. They typically propose surrogate tax increases - higher car parking charges, planning fees, congestion charges and the like, and insensitive reductions in service, often aimed at the most vulnerable.

In the bargaining that follows the worst of the “cuts” are avoided, the fat in the budget is left untouched ...

So what should Councillors do? They should do what they do with their own family and business budgets. In tight years all items of spending are under review. The aim is to cut out the least desirable items, not the most sensitive, and to deliver the same or more for less by spending more wisely. To do this the first round of budget papers should n ot present existing spending as a given

I proposed (figures slightly edited for Scotland):

Central government could help by cutting ”government circulars seeking more actions by Councils (whether they are statutory or advisory)” - cutting not only new ones but duties under old ones would cut costs. I would also like to see a more open application of the rate support grant. Spread out it comes to about £2360* per head but is allocated according to “need” which in practice means according to what the council is spending now & its political pull. Currently the RSG accounts for 83% of spending & by rewarding high spenders ensures more of it. If the RSG moved, over several years to a per head rate or anything independent of spending then councils which could make 17% efficiency savings would see zero council tax & those who couldn't would find their minds concentrated wonderfully. 20% is not exactly an extreme figure - barely over 4% a year across a Parliament & something which real industries manage regularly.

Alternatives would include taking schools out of the council's remit & giving that money directly to the schools under a voucher system - something I have already supported. The same could be done with road maintenance since road traffic has, since the demise of the horse, been ever less local. These would mean, assuming all the money was still spent, which I think it should be, that council spending would be say halved & the grant reduced to 66% (33% grant left, 50% of spending left). This might make it more difficult to cut council tax to zero but equally more difficult to make it go sky high. On the other hand by taking out the areas where Holyrood circulars are most legitimate make it easier to get rid of the rest & thus cut costs even more.

There may also be a case for double counting pensioners, or children or some other group but I would have to be convinced of it & would prefer to keep the calculation of RSG as simple & open as possible & there is little more simple than councils get a flat amount per head.


* "I turn now to the detail of the Order. In 2009-10, we will provide local government with total funding of over £11.8 billion, an increase of £658 million or 5.9% over the comparable sums for 2008 09" John Swinney to Scottish Parliament which comes to £2360 per head

Mark Wadsworth has a post which inter alia says that council rubbish collecting comes to about £100 a year per famioly. One of America's old city bosses, Pendergast of Kansas City, allegedly had only 3 rules - keep the streets clean, don't touch the schools, don't kill anybody west of 15th St. Seeing how little of the money they get goes into the first 2 of these a little culling of council employees would have its benefits.

On the assumption that current growth rates will continue the worlds economies in 2050 will look like this.

China well in first place (currently 5th) with a $70 trillion economy, the US in second (currently 1st) with $40tn, India 3rd (13th) with $35 well ahead of the big 5 EU nations combined (2nd)at $24tn, then Brazil (11th) at $15tn, Russia (12th) just under $10tn, followed in close order by Indonesia (22nd), Mexico (16th), Britain (6th), Turkey (19th), Japan (3rd), France (7th), Germany (4th), Nigeria, Philippines, Canada (10th), Korea(14th).

This is entirely because of the effects of compounded economic growth. Japan was in zero growth for nearly 20 years but if it achieved the sort of growth it had up till then it would stay ahead of China so its presumed low place is not inevitable. With declining populations both Japan & Russia's per person performance is better than it appears.

Indeed none of it is inevitable. We know that developed countries are just as capable of maintaining high growth as the less developed, historically even moreso. Ireland has, without that much effort, produced 7% growth. Singapore, the Baltic states & Hong Kong have been doing even better. Britain's GNP has recently been passed by China's but even so, if we were to maintain the same growth rate we would not be far behind. If the US were to maintain growth above the world average it would not be pushed into 2nd place, at least not by 2050. Seeing what other countries have done there is no question that, if we stop accepting massive economically destructive regulation, a parasitic state sector on the order of half the economy & the restrictions & anti-progress activities of the Luddites, we could match them.

If we went for X-prizes & a commitment to technology we could go further.

PS Original figures via Next Big Future which I have added to the blogroll.

This is a satellite photograph of Ascension Island which I have previously suggested would be a very suitable site for a British spaceport. The US/UK airbase is visible on the bottom left (South West) corner. Clearly plenty of room for all.

Note that the wind appears to be from the South East & that clouds only form as the wet air is driven up the hills - there being no clouds at sea except where they have already passed over land.