Population and resources

Thomas Malthus, at the end of the eighteenth century, argued that increasing population must inevitably lead to disaster. We were going to run out of food. Malthus was wrong, but that has not stopped generations of neo-Malthusians from claiming that it was going to be true next time. In the 1970s, The limits to growth claimed that the world was going to run out of energy. It isn’t. What happens in an economic market is that as an item grows scarce, it becomes more expensive. As some sources of energy will become more expensive, we will be forced to switch to other sources. There is no point at which the last drop of petrol will ever be poured into the last car, while other drivers look on in fury. This is just not the way that the economy works.

The other side of the Malthusian argument is about population. Population does not grow exponentially: the birth rate falls as the economy develops. The reasons are complex. Part of the explanation is the changing role of women, who delay childbearing when they have options for education and employment. Some reduction may be attributed to contraception; some, perhaps, to the effect of urbanisation on the costs of raising a child. But a significant element must be the fall that most countries have seen in infant mortality over the course of the last forty years. The association is clear and strong (try this link, which opens a new window): once parents see that children have a realistic chance of surviving to adulthood, the number of children they have drops markedly. As an Indian minister once commented, “The best contraceptive is development”.

The age of austerity

Now that cuts in public spending are on the agenda, a parade of experts has been in evidence, arguing for a new kind of welfare regime. However, what they are arguing for looks a great deal like the policies the same people have been pushing for over twenty years – a programme of privatisation, individualised services, diversity and a withdrawal of the state from direct provision.(1)

Precisely because these arguments have been running for more than twenty years, we can form a pretty clear picture of what happens when services are based on these principles. The policies may seem in principle take expenditure off the books of the public services, but that is largely illusory: the most expensive services are nearly always paid for ultimately by government, and the costs are still largely held within the accounts. The central argument is that the private sector is supposed to be more efficient than the public sector. That efficiency is largely achieved, however, by adverse selection – refusing to do things that the public services are bound to do; and the main way that private services have reduced cost is simply by reducing labour costs. Partial provision by the private sector still leaves the public services to provide residual services. The appropriate comparison to make is not between public and private services, but between the total cost of services where there are different patterns of service provision and delivery. Taken in the round, the combined effect of expenditure in the private sector, the development of regulatory mechanisms in the public sector and the maintenance of residual public services has been generally more expensive than services were when services were planned, delivered and strictly rationed by a sole provider.

Personalisation, diversity and consumer choice are not cheap options. There are no good grounds for believing that such policies save money.

(1) e.g. R Hewit, Public service reform is the only way to avoid cuts, Scotsman 1.3.2010

Rationing and road pricing

The Times tells us: “there are only two ways to ration the space on the roads: by queue or by price” (Editorial, 31st October 2009). Rationing is about how resources are allocated. There are many other ways to ration besides queues or pricing. The standard approaches include service restriction, dilution, filtering and reallocation. This might mean e.g. restricting the class of vehicles or drivers able to use certain roads; redefining the use of the road space through line markings; reserving space for certain purposes (e.g. breakdown lanes, bus lanes, car sharing lanes); changing traffic flows (in the US they use gates to open or close road sections at different times for traffic moving in different directions); changing the rules of the road (should there be fast and slow lanes, instead of all outside lanes being for overtaking?); and redefining the use of existing roads (freight-only roads, motorways and ring roads are examples). I’m a specialist in social administration rather than transport, and I cannot tell which of the options is better; that needs evidence. Pricing may or may not be better than the alternatives, but we should never assume it is the only option.

Why cut?

All the main political parties in the UK seem to have reached a consensus, that the economic situation must mean cuts in public spending. This is alarming. Governments must understand that they cannot cut their way out of an economic depression; they have to grow out of it. The way to bring in higher revenues is for people to earn more, not less. If they cut, the reduction in demand will lead to lower tax revenues, and increasing costs through higher unemployment.

The government finances are certainly bad. It is not because of high spending on public services; it is because the government has bailed out the banks. The main way to recover that money is going to be from the banks, as they repay their loans. The idea that this has to be paid from tax or public spending cuts is a false choice. Either might be true in time, but this is not the time.

Financial socialism

There may not be much to chuckle about in the current financial crisis, but complaints in the US about “financial socialism” (e.g. in Forbes magazine) offer Europeans some wry amusement. The US has never really understood what socialism is about; it seems to be some kind of infection, where exposure to a mild but toxic measure, like a publicly funded library or a school, turns people into brainwashed automata. Socialism, in most of Europe, refers to forms of social organisation for collective benefit. Socialists like Robert Owen, R H Tawney or Richard Titmuss stood for principled, moral intervention in social and economic organisation. (I have been puzzled by the number of commentators – like Matthew Paris in the Times – who seem to think that this has something to do with Marxism. Marxism had no time for principled idealism, or for collective groups working together to improve things, or for the idea that governments should intervene to make economies work better. The socialist parties in most European countries had very little to do with Marx – marxist parties in Europe were “communist”, not “socialist”.) The Parti Socialiste Europeen, the largest bloc in the European Parliament, is committed to “principles of freedom, equality, solidarity, democracy, respect of Human Rights and Fundamental Freedoms, and respect for the Rule of Law.” In respect of financial markets, equality, solidarity and social justice implies much more than regulation for greater stability. Whatever one makes of the Paulson plan, “socialist” is not a word that springs to mind.

There is a different word for pragmatic intervention intended to achieve order and stability: that word is “conservatism”. The standard view in conservative thought was powerfully expressed by Edmund Burke (incidentally, as much a supporter of the American revolution as he was a critic of the French one). “Government”, Burke wrote, “is a contrivance of human wisdom to provide for human wants.” The idea that government should take action as needed to regulate, balance and protect people is fundamentally conservative, and it has been a cornerstone of the “christian democracy” of central Europe for sixty years.

Private information?

Another day sees another panic about the loss of “private” data. Today’s problem comes from the sale of a second-hand laptop containing data for a million banking customers; yesterday’s concerned the details of 33,000 people in prison. The personal details of millions of people can be copied to a hand-held device in less than ten minutes. The usual response in these cases is to cluck concernedly and say, “we have to keep personal data much more secure.” Every attempt to make things more complex – requiring more data, drawing on a range of data – can be compromised by error, omission or duplication. For example, biometric data may be difficult to reproduce; but the digital information which is used to represent them is not. There are no procedures which can guarantee the privacy of the data or protect data from loss.

It seems obvious that we can’t stop this kind of data from escaping. What is less obvious is the argument that we shouldn’t. What is so private about our personal data? Identities are not private: they are public. That is part of what having an identity means. Our names, addresses and ages are generally speaking a matter of public record. Birthdates are hardly confidential information: they are publicly celebrated, people advertise major ceremonies, and celebrities have them posted in newspapers). Criminal records are public, in their very nature; no democratic regime conducts its justice in camera. Our identities announce who we are to the world; that is what they are there for.

Something rather strange has happened. Because, in a cashless society, some people are able to defraud the banks, the banks have been attempting to shift the responsibility to their customers – telling them that their identity has been stolen. And increasingly, it seems, people have come to accept that this is true – that somehow, if they admit publicly to their name, their birthday or the details of their bank account, the subsequent confusion of financial institutions are their fault. We have all been told, for example, not to share details of our bank account, because it can be used fraudulently. But anyone who has ever issued a cheque has given at least as much information – the name of the account holder, the number of the account, the bank’s sort code, a copy of the signature and in all probability, because it was common practice until about five years ago, a personal address. The banks routinely use the mother’s maiden name: in many communities, this is a matter of public knowledge, and many public announcements of births, marriages and deaths include them.

For members of the public, there is an argument for ending the presumption of confidentiality on many details. Telephone numbers, addresses and dates of birth are widely available; some details (like credit card numbers and bank details) have traditionally been fully accessible to traders, though that practice has recently been circumscribed with the introduction of chip and pin technology; and there is an argument for saying that some issues, like criminal convictions and tax records, should also be fully public (as they are in some countries). The question that remains is how far there should be a presumption of confidentiality relating to collective data – the compilations of millions of names on electoral registers, benefit and pensions records or lists of customers. The problems that arise here are not so much about the existence of the data, as the uses to which people put them – mass mailings, farming names for marketing, or fraud. Those are the issues that really upset people, and those are the issues we should really be trying to deal with.

Rural Scotland?

Is “rural Scotland” the right focus for policy? The OECD report on rural Scotland  lumps three different parts of Scotland together. Part is the urban hinterland, described as “accessible” rural space. Part – the smallest part, in terms of the population – is the kind of area that is most often represented as “rural”, rooted in agriculture and the activities associated with the countryside. But in terms of the distribution of population and communities, the largest part of what the OECD is treating as “rural” is not agricultural, but coastal. Scotland’s coastal areas face a complex set of economic and environmental issues, that have little to do with conventional understandings of the rural environment. They take in issues like energy, mineral extraction, tourism, cultural activity, military activity and the ports. The largest single industry is the distribution network.

The key problems relate to isolation. The services and facilities in many coastal areas are often desperately inadequate. Communities need enough population to support basic services. People want access to shops, banks, post offices, schools and medical facilities; these facilities can only survive if there are enough people to keep them going.

However, development, which is difficult enough in isolated areas for practical reasons, is locked by a combination of opposition from landowners, exclusionary communities and planners. Much of Scotland is radically underdeveloped. The high cost of housing reflects a market in scarce supply – and where supply will always be scarce unless we take the fetters off. Where there is not enough housing, there are not enough people. We all want sustainable communities, but no community is sustainable if it is not also viable. If the coast is not built up, the communities will die.

Musical chairs

David Cameron, the leader of the Conservative party, is reported this week as saying: “We talk about people being at risk of poverty, or social exclusion: it’s as if these things — obesity, alcohol abuse, drug addiction — are purely external events like a plague or bad weather. Of course, circumstances — where you are born, your neighbourhood, your school and the choices your parents make — have a huge impact. But social problems are often the consequence of the choices people make.” In one sense, this has to be true. However, the sentiment Cameron is expressing invites condemnation of the poor, and for that reason it should be treated with great caution. Poor people do not have the choice of avoiding poverty; the nature of poverty is that it limits choices. Condemning people with very little choice for making the wrong decisions seems peculiarly callous.

I should explain the title of this comment, for the enlightenment of those who haven’t had the benefit of a merciless British education. “Musical chairs” is a children’s game. There are fewer chairs than children, the children run round the chairs in a circle, and when the music stops, they have to try to sit down. Those who do not sit down in time are out. Now of course it is true that those children who sit down tend to be those who are faster, bigger or quicker. The children who hesitate tend to have made the wrong choice, and they have probably reacted more slowly. But it would be ridiculous to blame the children who lose; the game has been designed that way. The same is true of poverty. People who lose out are often less well qualified, less connected, or slower. They may have flaws of character; they may not have responded to opportunities; they may have made the wrong choices. It does not follow that their poverty is their fault. It is more important to ask whether society shouldn’t provide a few more chairs for people to sit on.

Tackling poverty: a response to the Scottish "Government Economic Strategy"

I submitted a response to the Government Economic Strategy: a copy is available here, in PDF format.

Having made the effort to respond to the consultation, I was interested to see how the report on the consultation would represent the answers.  I was surprised to see the statement that everyone had approved the government’s priorities, when I had written that I did not; so I went back to the original submissions and compared the comments with the report on the consultation.

There were three significant differences.  First, the report claimed that everyone had approved the priorities; it was clear that many, like myself,  did not.  Second, the government had asked whether it had the balance of prevention and response right, and the report claimed that it did.  I had argued against the fashion for preventative work, but I was very much in a minority; the majority of other respondents took the opposite view, and felt the government had put too little emphasis on prevention.  Third, the report claimed that respondents favoured the government taking a leading role.  Most respondents argued against that, believing that change had to come from the bottom up.

The European constitution and the treaty

The European Union claims that the newly agreed treaty is not a revival of the abortive proposal to establish a constitution. A House of Commons Select Committee has complained that the new treaty has most of the same elements as the old, rejected one. They are both right.

The abortive attempt to establish a European constitution might be seen as a fundamental criticism of the character of the EU. I suspect the reasons for the treaty’s rejection in referenda is more pedestrian. The responsible committee, chaired by Valery Giscard d’Estaing, made a thoroughgoing hash of it, being unable to select the principles that mattered, and trying to include every aspect of EU policy. Even for those who (like myself) support the principles of the European Union, it was a thoroughly uninspiring document. The procedures for the French referendum made made the full document available to everyone – and the document, which is as hard to read as a telephone book, was unlikely to win any friends.

A constitution is a foundational statement. It needs to be communicative, transparent, and justiciable. Every constitution needs to set out the basic institutional framework. It needs to state primary legal rules – rules of recognition, change and adjudication. It should probably state fundamental principles, like the Bill of Rights in the US constitution. But it should not include policy. Instead of confining itself to constitutional issues, the “constitutional treaty” sought both to consolidate the content of previous treaties and to include substantial elements of previously agreed policy – issues like the environment, agriculture and fisheries, and commercial rules. However important these may be, they are not constitutional principles; and whatever the merits of the policies may be, it is very questionable whether the policy which is appropriate now should be expected to be appropriate a hundred years from now. More than nine-tenths of the constitutional treaty was clutter – although it may have contained important policy decisions, it should not have been in a proposed constitution at all.

At the same time, the constitutional treaty included many issues on which there were new agreements. Some of those agreements were fundamental, like agreements on the principle qualified majority voting. Some were not, such as the specific designation of voting arrangements in respect of different policy fields. The member states and the Commission are reluctant to lose sight of the areas they agreed; and so the proposals have been revived in the new treaty. In other words, the new treaty is largely made up of the clutter that should never have been in the proposed constitution. The new treaty does duplicate the constitutional proposals – but it is not a constitution.

Europe still needs a constitution – the specification of institutions, primary rules and basic principles. This treaty is not it. One has to hope that eventually, proposals will be made for a genuine, effective constitution – but it has to be done without elevating every policy area in the EU to the level of fundamental principle. As a modest proposal, there needs to be a word limit. The constitution should not be longer than ten pages; there should not be more than about seventy five clauses. It needs to be served up in plain language. Then, perhaps, it might be worth voting for.