Tuesday, 27 February 2018

You Know Reform Is Badly Needed When Things Like This Happen

Sometimes an argument you've been making for years deserves a rerun when something so ludicrous happens that could make even the most ardent sceptics stop and think "Hmmm… he may have been onto something all along".

The argument in question has been that the BBC licence fee is an outmoded, inefficient misallocation of resources that needs to be kicked to the curb right now. The aforementioned ludicrous occurrence that gives traction to that idea is the headline I read last night about how executives at the BBC are looking to spend £15 million of taxpayers' money on the set design of a mosque for the soap’s Muslim characters.

This, and many other things the BBC does, is not something on which the vast majority of people would voluntarily spend their money - but they are forced to do so because if they do not they face prosecution. This is no longer the way to run a service that ought to stand or fall on commercial demand, not on enforced confiscation. When taxpayers are faced with a £15 million bill to spruce up a television set with a mosque for its Muslim characters, you know there is something seriously wrong.

I have no interest in soaps, but I know many people do. Fine, then let them vote with their wallets and purses, not with a television tax. In this day and age, where digital television and voluntary subscriptions increase the width and breadth of television entertainment available, and improve quality by added creative competition, the BBC's licence fee system is anachronistic and inefficient.

There is a lot I like about the BBC - and the chances are, if it were to be offered on a voluntary subscription basis, like Netflix, Amazon Prime or a Sky package, I probably would pay the subscription costs. But for those for whom that arrangement would not constitute net value, they'd be free to spend their money elsewhere.

If viewers really do value what the BBC provides, then the BBC would continue to attract customers under a more competitive subscription system. But trying to justify a licence fee tax on the basis that there may not be healthy commercial demand for the programs and services if people were free to opt out, is no basis for retention of this arrangement.

Because one thing is fairly certain - if there was no such thing as the BBC, there is absolutely no chance that the vast majority of the public would want it invented in its current format. It is only because the BBC has been with us for so long that so few people seek to question its edifice. It needs reforming; the mandatory licence fee needs to be discontinued - and in its place a pricing model that stands or falls on the basis of commercial demand.

Sunday, 25 February 2018

A Little Perspective On The Wealth Gap - Seen Through The Eyes Of Henry VIII

As you know, there is a lot of complaining about the so-called injustices of the wealth gap, with everyone from Oxfam to Jeremy Corbyn to Bernie Sanders complaining that the wealth of the richest people keeps increasing while the poor do not benefit much from capitalism.

This is obviously a foolish assertion - but more than that: even those who acknowledge the benefits of capitalism are often guilty of understating the extent to which the poorer people in the UK and the USA have enjoyed pretty much all the beneficial things the rich have. So much so that the further back in time you travelled, the narrower the difference between today's rich and poor would seem.

To see why, let me run this thought experiment by you. At the time of his death, Henry VIII's wealth was thought to be around 300,000 British pounds. Adjusted for inflation, that would make him worth about £250 million today.

Suppose we resurrected Henry VIII and brought him and his adjusted wealth into the present day to spend a week following round Richard Branson - a man worth about 16 times more (£4 billion) than Henry would be worth. We'd find something quite astonishing. The things about Richard Branson's life that would be most coveted by Henry VIII would not be the luxury goods that make Branson stand out from the average earner of today - they would be the multitude of things that even most low income earners have at their disposal. 
What would impress Henry VIII most about today are things like: having access to such a rich variety of food and drink; clean, uncontaminated water; an extremely low chance of mothers and babies dying in childbirth; modern medicine and healthcare; refrigerated food; microwave ovens; cars; high speed trains; computers; televisions; washing machines; global travel in under 24 hours; much shorter working weeks; welfare; access to the entire world's knowledge through the Internet; and all this (and much more) in a world that has seen the virtual eradication of smallpox, polio, diphtheria and tuberculosis.

That is to say, Henry VIII would find the difference between Richard Branson and a low income worker infinitesimal compared with the monumental difference in quality of living between himself and a low income worker in the present day. The most astounding part of present day living for Henry VIII would be the multitude of present day advantages that many people take for granted, and yet still consider themselves poorly off despite having.

Given the foregoing, I find it remarkable that there are so many narrow-minded, short-sighted, entitled people in society who are obsessed with banging on about the inequalities that capitalism creates.

You may say that, for those suffering economic hardship, life is a daily grind - and I will not disagree with you. But as soon as you take your eyes off disposable income, and focus on the way society has been equalised materially in just about every other way, you'll see that instead of bemoaning the gross wealth stratifications in society, a more pertinent reaction would be to feel amazed that after 200,000 years of human history when just about everyone who ever lived was equally poor, we find ourselves living in a time when the majority of us are equally very rich.

Sunday, 18 February 2018

Put The Scandinavian Myths To Bed Now

You can't very easily claim to be a serious thinking person if you have been taken in by the widely promulgated myth that Scandinavia is both:

a) Some kind of empirically demonstrable example of the success of socialism in action.


b) What Jeremy Corbyn wants to create for the UK.

These contentions are so fatuous, that if they were a human being, they would be the illegitimate love child of Owen Jones and Angela Rayner. The reality is, every time the Scandinavian countries have weighed in too heavily in favour of socialistic models things have gone poorly - and every time they have weighed in heavily in favour of markets things have gone significantly better.

By and large, private individuals in Scandanavian countries have a relatively free rein in the means of production. Scandinavian countries do push the boat out a bit on welfare, but that is not the same as a Corbyn-esque command economy built on envy, price fixing and punitive confiscatory measures.

The much vaunted political aspects of social democracy that turn up in places like Norway, Sweden, Finland and Denmark are funded by everyone else's trade. To claim that Scandinavian social democracy is a good advert for socialism is a bit like claiming that opening bars and restaurants is a good advert for protection rackets.

Scandinavians embrace the fruits of the market as a means of providing welfare - it works in conjunction with markets, not in opposition to them. Scandinavian success comes in spite of a fattened up taxation system, not because of it. The fiscal redistribution policies happen because of flexible, lightly regulated markets and fairly substantial levels of economic freedom  

For further reading, I recommend this. Here's a summary.

Scandinavia’s success story predated the welfare state. Furthermore, Sweden began to fall behind as the state grew rapidly from the 1960s. Between 1870 and 1936, Sweden enjoyed the highest growth rate in the industrialised world. However, between 1936 and 2008, the growth rate was only 13th out of 28 industrialised nations. Between 1975 and the mid-1990s, Sweden dropped from being the 4th richest nation in the world to the 13th richest nation in the world.

• As late as 1960, tax revenues in the Nordic nations ranged between 25 per cent of GDP in Denmark to 32 per cent in Norway – similar to other developed countries. At the current time, Scandinavian countries are again no longer outliers when it comes to levels of government spending and taxation.

• The third-way radical social democratic era in Scandinavia, much admired by the left, only lasted from the early 1970s to the early 1990s. The rate of business formation during the third-way era was dreadful. In 2004, 38 of the 100 businesses with the highest revenues in Sweden had started as privately owned businesses within the country. Of these firms, just two had been formed after 1970. None of the 100 largest firms ranked by employment were founded within Sweden after 1970. Furthermore, between 1950 and 2000, although the Swedish population grew from 7 million to almost 9 million, net job creation in the private sector was close to zero.

Scandinavia is often cited as having high life expectancy and good health outcomes in areas such as infant mortality. Again, this predates the expansion of the welfare state. In 1960, Norway had the highest life expectancy in the OECD, followed by Sweden, Iceland and Denmark in third, fourth and fifth positions. By 2005, the gap in life expectancy between Scandinavian countries and both the UK and the US had shrunk considerably. Iceland, with a moderately sized welfare sector, has over time outpaced the four major Scandinavian countries in terms of life expectancy and infant mortality.

Scandinavia’s more equal societies also developed well before the welfare states expanded. Income inequality reduced dramatically during the last three decades of the 19th century and during the first half of the 20th century. Indeed, most of the shift towards greater equality happened before the introduction of a large public sector and high taxes.

• The development of Scandinavian welfare states has led to a deterioration in social capital. Despite the fact that Nordic nations are characterised by good health, only the Netherlands spends more on incapacity related unemployment than Scandinavian countries. A survey from 2001 showed that 44 per cent believed that it was acceptable to claim sickness benefits if they were dissatisfied with their working environment.

• Other studies have pointed to increases in sickness absence due to sporting events. For instance, absence among men due to sickness increased by 41 per cent during the 2002 football World Cup. These shifts in working norms have also been tracked in the World Value Survey. In the 1981–84 survey, 82 per cent of Swedes agreed with the statement ‘claiming government benefits to which you are not entitled is never justifiable’; in the 2010–14 survey, only 55 per cent of Swedes believed that it was never right to claim benefits to which they were not entitled.

• Another regrettable feature of Scandinavian countries is their difficulty in assimilating immigrants. Unemployment rates of immigrants with low education levels in Anglo-Saxon countries are generally equal to or lower than unemployment rates among natives with a similar educational background, whereas in Scandinavian countries they are much higher. In Scandinavian labour markets, even immigrants with high qualifications can struggle to find suitable employment. Highly educated immigrants in Finland and Sweden have an unemployment rate over 8 percentage points higher than native-born Finns and Swedes of a similar educational background. This compares with very similar employment rates between the two groups in Anglo-Saxon countries.

• The descendants of Scandinavian migrants in the US combine the high living standards of the US with the high levels of equality of Scandinavian countries. Median incomes of Scandinavian descendants are 20 per cent higher than average US incomes. It is true that poverty rates in Scandinavian countries are lower than in the US. However, the poverty rate among descendants of Nordic immigrants in the US today is half the average poverty rate of Americans – this has been a consistent finding for decades. In fact, Scandinavian Americans have lower poverty rates than Scandinavian citizens who have not emigrated. This suggests that pre-existing cultural norms are responsible for the low levels of poverty among Scandinavians rather than Nordic welfare states.

• Many analyses of Scandinavian countries conflate correlation with causality. It is very clear that many of the desirable features of Scandinavian societies, such as low income inequality, low levels of poverty and high levels of economic growth, predated the development of the welfare state. It is equally clear that high levels of trust also predated the era of high government spending and taxation. All these indicators began to deteriorate after the expansion of the Scandinavian welfare states and the increase in taxes necessary to fund it.

Thursday, 15 February 2018

Ask The Philosophical Muser: On Seatbelts

Here's my latest Q&A column - if you have any questions for me, you can message me on Facebook, or email them here j.knight423@btinternet.com

A Facebook friend made contact to query my claim that it's obvious that people drive less safely with seatbelts on. The query was along the lines of this: "I don't see why this is the case, surely even with a seat belt on people try to drive as carefully as possible because it's in their self-interest to do so?"

My answer: It seems obviously true, but like many supposedly obviously true things, it is false. To see why, you only need consider the statement when said this way - "If a driver has no seat belt he or she will drive more carefully" - a statement that is very obviously true, and one that no one has any issue with.

Consequently, saying "people drive less safely with seatbelts on" is just another way of saying "people drive more safely with seatbelts off". Both are equally true, they are just different words to say the same thing.

Saturday, 3 February 2018

The Liberty-Hating Feminists & SJWs Are Confused About What 'Societal Norms' Actually Are!

As a result of feminist duress, first the Professional Darts Corporation and then Formula One announced that they will be forcing walk on girls and grid girls into unemployment under the pretext that the tradition is "at odds with modern day societal norms".

As usual, the feminists and social justice warriors driving this are confused about what 'societal norms' are. Societal norms - a term that is problematic at the best of times - are created, not by top down hegemony, but by bottom up local decisions that result in net utility for the decision-makers.

The societal norm that means most of us don't drop litter, spit at one another or play loud music late at night is based on society's aggregation of revealed preferences. In other words, most of us don't like those things so we don't do them. It is the individual search for utility and the collective aspiration for cooperation that decides societal norms - and the irony being missed by those opposed to grid girls is that individual search for utility is far and away the most widespread societal norm that exists.

When feminists and social justice warriors tell us society should be opposed to something freely chosen because it departs from the rubric of 'societal norms', like jobs for women in sport, all they are really doing is forcefully imposing their own beliefs and views on people that have different wants, needs and priorities. They are doing the opposite of what they claim: they purport to be standing up for women, but what they are actually doing is trying to rob a proportion of women of something they value.

Madeline Grant makes an excellent point along those lines in this article:

"One great irony of the ongoing debate is the fact that, while the BBC and other employers are enduring a forensic examination over gender pay, feminist campaigners are backing moves to upset one of the few areas of economic life in which women have a clear advantage – the ability to trade on good looks – or “erotic capital”, to borrow Catherine Hakim’s phrase.

Jobs in pole dancing, high fashion, hostessing and the promotional modelling work, performed by the Formula 1 grid girls, all enable women to trade on their beauty. Often, the opportunities for beautiful women far outstrip those granted men. Fashion modelling, for instance, carries a female premium of anywhere from 25% and 75%."

This kind of short-sightedness stretches far beyond cases like this - the whole business is riddled with contradictions and inconsistencies, and most of them are based on one of two things: they either a) misunderstand how equality of outcome and equality of opportunity have to be traded off against each other, or b) fail to account for the factors surrounding revealed preferences and the liberty and freedom to enjoy them.

For example, they just cannot seem to grasp the basic principle that in a society in which everyone is totally free (within reason) to act in accordance with their preferences and priorities, the result will be a diverse assortment of highly unequal outcomes. Different people will trade on looks, on talent, on education, on risk, on unsociable hours, on physical strength, on interpersonal skills, on entrepreneurialism, and a whole range of other things that are valued differently in the marketplace, and that generate varying salaries accordingly.

Of course, when people are being unfairly treated, there is a human need to leap to their defence. How ironic here that the people being unfairly treated are those women who want to trade on their marketable assets but are being robbed of their income because of feminists' confusion about how societal norms are constructed.

Because, you see, it's the revealed preferences of individuals that make the trading on looks, on talent, on education, on risk, on unsociable hours, on physical strength, on interpersonal skills, and on everything else valuable in the marketplace, possible.

Feminists and social justice warriors need to wake up to the fact that these are the societal norms - and they are based on the fact that society is a multifarious mix of different people who want different things, and not always the same things feminists want or should feel entitled to demand to further their own narrow ideology.