February 23, 2011

Yesterday, I attended an event ran by the Centre for Sustainable Energy, an organisation intended to expand the use of renewable energy technology. Ostensibly, they’re on the same side as me, that side being Windmills Now! or similar. However, I left the day with something of a bitter and resentful attitude – even more so than normal.

It related to the people I’d met there that day, who all seemed to work in some sort of worthy Government-funded agency revolving around community development, community sustainability, community communising and so on. They were the producers of ‘resources’, of ‘toolkits’, of ‘guidelines’, and other ingenious ways that the Government has found to take the fun out of doing anything for yourself. They were the sorts of folk that are currently dismissing the Big Society as pointless without additional Government funding  -the sorts of folk making the same mistake as Labour.

They used the word ‘community’ a lot. This is a current vogue-word, like ‘progressive’ inasmuch as it admits of no real interpretation, but rather mutates to fit whatever its current user happens to require. The Coalition uses it extensively, ‘communities’ being the new thing that Government does. I’m all onboard with localism, powers being devolved to the local level being a great thing (although not enough people are talking about pushing responsibilities downwards for my liking). But to immediately follow that rush of powers with a rush of people whose job it is to tell people how to use those powers smacks to me of a misunderstanding of the point of localism.

Setting up local energy projects is both fun and exciting, at least until you encounter the planning system. It’s fun because it’s something that’s yours, something that’s the initiative of you and your fellows. It’s the consequences of your judgements, of your decisions, and of your actions. If you’re successful, then you’ll know it’s the result of your work.

However, if the Government – however well-meaning – decides that people need to be told how to do these things or otherwise they won’t happen, they’ll remove some of that sense of accomplishment, and some of that sense of developing one’s own judgement. They’ll be actively hampering the development of that person or peoples’ well-being. This is not something we want the Government to be doing.

Now, the obvious parallels here are with education, but that’s not quite accurate – education is broadly concerned with the principles underlying much of society – the scientific method, the structure of language, history and so on. Education shouldn’t involve being told precisely how to do something – rather, the general principles should be given to you, and the scope to work it out for yourself is where you have the opportunity to develop judgement. It is the case that in matters outwith energy projects on which the ‘Community’ people I refer to above may be working there may be ‘barriers’ to that working out which need to be surmounted – but I’m willing to bet that the extent to which to those barriers are real is less than the extent to which they have ‘Community’ people working on them.

I am concerned that this ‘Community’ attitude could infect the Big Society project. This remains to be seen, but I would hope that – quite ironically – that the cuts will help kill it.

I have an Idea for a Business

February 21, 2011

I am a great believer in spending decisions revealing what people actually think. For example, as a proportion of my income, I spend significantly more on alcohol than I do on giving to charities. This allows one to draw the conclusion that I care more about getting drunk than I do about charitable endeavours. Whatever my protestations to the contrary, that would be a fair summary, if I did not devote any time to actually working for said charities. Similarly, one can judge how much you care about people in the developing world in relation to your relatives by comparing the proportion of your income that goes to charities focused at that aim compared to the amount you spend on gifts for said relatives. It turns out that I care more about my sisters than the entire continent of Africa, for example.

The best-known example of this ‘actual thinking revelation’ or ‘revealed preferences’ in action is the market, wherein people spend their money in such a way as to reveal what they really think about the product on offer – or, in the case of the futures, equities, and other financial wizardries markets, what they think about the future of a given commodity or company.

I can see a way of harnessing this phenomenon to produce a win-win outcome for myself. I’m pretty sure climate change is a real thing, mostly because carbon dioxide causes radiative forcing, and any reduction in the ice caps will lower the planet’s albedo and thus increase heat absorption. The extent to which it’s happening is something about which I am uncertain but entirely content to leave in the hands of climate scientists, who seem like a relatively good bunch of chaps, albeit testy in the manner of academics. If someone put out some kind of global warming investment product, which would produce returns as the planet got hotter, I would buy it.

The inverse holds true for climate sceptics. If they really don’t believe the planet is hotting up, then they’ll be willing to buy a product which cashes this claim out. Therefore, I have an Idea for a Business.

What happens if the planet gets hotter? The ice caps melt, and sea levels rise. As a consequence of the latter, land values of low-lying coastal regions decrease, because now they’re underwater. If it doesn’t get hotter, the value of the land under consideration will remain the same, or perhaps go up.

Therefore, I would like to create a business that sells what I call the ‘Climategate Bond’. I will purchase significant tracts of land in areas of the developing world under threat from global warming, and rent them out to local farmers or other land users. I will package up the debt I used to buy the land up with a coupon comprising a portion of the rents extracted from the users of the land, with the remainder going to myself as an operating expense. I will market these bonds in the pages of the Telegraph and the Mail, with perhaps some space on libertarian blogs and Watts up with that.

Assuming I structure the bond in such a way as to ensure the liability lies with its purchaser rather than myself, I will have no worries if my investors’ money ends up, shall we say, underwater. They will make a tidy return on the backs of impoverished farmers in a world of rising food prices, and I will make a lot of money. Of course, if global warming is actually happening, they’ll lose their investment. I’ll make less money, but be proven right.

So, who wants to give me the initial capital I’ll require to get this idea (copyrighted to me forever) off the ground?


I remember the joy of student protesting; possessing an ineffable ‘ironic’ righteousness against systems which transparently (at least as far as I could see at the time) wasn’t working in the way it should. It was only later on, when I’d had the chance to understand the position my proto-opinions took in the great sweep of argument that is our nation’s political discourse; that those notions were informed not wholly by my own judgement but by the aggregate of opinion within that discourse along with my own economic position.

It is that positioning within the greater narrative which has relevance here today. The condemnation of Barclays for their minimal tax rate is the product of a particular worldview from which most lefties would instinctively recoil: that of New Labour.

I have previously written about how New Labour was based upon a subtle moral repositioning, away from the notion of all working for the common good which is the foundation of socialism, and towards a worldview in which capitalism is virtuous inasmuch as it produces profits which can be put to use for that same common good. Capitalism is moral inasmuch as it services that common good, and is immoral if not.

This moral distinction lies at the heart of the Tax Justice movement – at the heart of the work of people like Richard Murphy, UKuncut, and elements of the New Economics Foundation. I’m sure they believe that they are at the vanguard of an exciting movement for social change, when in reality they are the end product of a shift in the discourse of the Left effected by the progenitors of the New Labour project.

Somewhere, Tony Blair is laughing at people who profess to despise him while simultaneously doing his bidding.

Global Warming is Bad News

February 17, 2011

I’m surprised that I even need to say this, but global warming is a bad thing that we don’t want to happen. This simple message appears to have been lost as a consequence of the rise of climate scepticism. And so, when we get further confirmation that a bad thing looks almost certain to happen, our response shouldn’t be to be ever so slightly smug that it looks like we were right about the bad thing happening. It certainly shouldn’t be:

“…we can say, with an even higher degree of confidence than before, that climate change makes extreme events more likely to happen.”

It should be:

“…we can say, with an even higher degree of despair than before, that climate change makes extreme events more likely to happen.”

I’ve been bashing Labour for quite a while, and so it’s time to pick on some of the stupidity coming from the Right. I don’t normally have a lot of time for Prince Charles, but his speech to the Low Carbon Prosperity Summit was bang-on. He argued that our long-term prosperity is threatened by a combination of rising temperatures and ecosystem degradation, and that decoupling economic growth from business-as-usual consumption was essential to maintain that prosperity into the future. In a particularly stirring section, he condemned climate sceptics in no uncertain terms:

“I wonder, will such people be held accountable at the end of the day for the absolute refusal to countenance a precautionary approach for this plays a most reckless game of roulette with the future inheritance of those who come after us?”

Of course, such forthright views almost instantly attracted the vitriol of right-wing jester James Delingpole and the at least internally consistent libertarian writings of Dan Hannan. Both of them have lambasted Charles for attempting to send us into a dark age of economic stagnation. Unfortunately, the text doesn’t really bear that out – they both appear to have seen this part of the speech:

“There is, surely, no way round the fact that we have to move away from our conventional economic model of growth, based, as it is, on the production and consumption of high-carbon intensity goods.

“We need to meet the challenge of decoupling economic growth from increased consumption in such a way that both the well-being of Nature’s ecology and our own economic needs do not suffer.”


No. He’s condemning carbon-intensive consumption, which is different from, well, low-carbon consumption. The clue is his use of the word ‘decoupling’, which is used in economics to indicate the separation of production from increasing pressure on the environment. This is a relatively common position for environmentalists to take – that we can have the benefits of economic growth while safeguarding the natural world as long as we have an appropriate policy framework in place. It is, in fact, perfectly compatible with liberalism, as it typically requires additional payment for externalities. This can take the form of a carbon tax or subsidies for low-carbon electricity generation paid for by energy users.

Both Delingpole and Hannan appear to have convinced themselves that no-one arguing for environmental impact considerations with regard to economic activity can possibly be in favour of prosperity. This is quite a severe case of (a) stupidity and (b) setting up strawmen. It’s also dangerous – reducing the impact of the biosphere to sustain us will impact on our future prosperity, and so it needs to be a factor in our economic calculations. Both right-wingers appear to be advocating a rather naive version of libertarian economics that appears to deny the existence of any possible externality. On the other hand, at least Hannan is emphasising the importance of private property, so hopefully he’ll get around to campaigning against the planning system.

Addendum: Another spectacular example of right-wing stupidity at the Telegraph, where Ross Clark is arguing that since localism is hard we should stop doing it. What a brave man you are, Mr Clark.

A Porrittbear’s picnic

February 9, 2011

I have a lot of time for Jonathon Porritt, not least because he has the best voice in the environmental campaigning business. Never underestimate the importance of a good voice in this podcast-driven age. But I worry that in his most recent blog post he’s failed to confront the reasons why many top-rank environmental NGOs have not campaigned on what’s mooted as the sell-off of all our forests to the dreadful wizards of the private sector.

Porritt argues that these NGOs are failing in their duty to their membership by not actively campaigning against the sell-off. What’s interesting is the language in which this is couched – not ‘preventing damage to the environment’ but ‘letting down ordinary supporters’. Surely, given that these organisations exist to protect the environment, the former should be the main reason for criticising their inaction, rather than the latter. And yet it’s not. Why is that?

The answer lies in what Porritt isn’t saying, which is that the central bodies of these NGOs are staffed by people who do things like actually read the blasted consultation document and discover that the relative environmental impact of these proposals will be minimal at worst. Heritage forests can’t be sold to malicious wood-hungry developers, only to organisations that will safeguard them as a public benefit. Only large-scale commercial forest (i.e. vast pine plantations) can be sold commercially. Our glorious English woodlands are still safe. But the media narrative that’s developed around the sell-off is reliant upon media consumers not doing that sort of research and simply swallowing opinions from their chosen news teat without question. As a consequence, members of these organisations and the general public are getting all annoyed at something that isn’t actually happening, providing an opportunity for environmental campaigning organisations to position themselves at the vanguard of public opinion. Which hasn’t happened for a very long time.

The absence of Friends of the Earth et al. from this piece of public space has allowed other campaigning organisations like 38 Degrees (motto: ’38 Degrees brings you together with other people to take action on the issues that matter to you and bring about real change, just so long as isn’t anything beastly like bringing back hanging’) to take the lead, missing out on an opportunity to enthuse a new generation of environmental campaigners. It’s this last point which I suspect lies at the root of Porritt’s criticism of the broader environmental movement: they’re being unpragmatic by not campaigning on a populist issue which they know to be wrong, but which could nonetheless net them significant ongoing support.

On this score, I think Porritt is wrong. The environmental movement has not succeeded by being populist, it has succeeded by being right – by utilising science to demonstrate the impact of man’s activities upon the biosphere. To put aside an evidence-based approach for a few brief moments of populist approval would be to betray this heritage, and significantly reduce its credibility in the future.

Inequality & Crises

February 4, 2011

Via Stumbling & Mumbling, we learn of a fascinating column on vox which appears to provide a convincing argument that the origins of the financial crisis lay in rising inequality. I’m betting it’ll be seized on by the Left as this year’s Spirit Level*, so let’s have a look at what Kumhof and and Ranciere are saying.

The argument runs that increasing levels of inequality lead to the accumulation of capital by the top strata of a given society. The more capital possessed by the top strata, the less wealth they use for consumption. Something has to be done with this outstanding wealth, and so it’s reinvested – in physical assets, or in financial products. The rich don’t just leave their wealth under the bed; they want it to be working all the time.

This increased demand for financial products leads to the expansion of the financial services sector, who endeavour to meet this demand with the creation of new investment products. Once the given level of investment opportunities available in the economy is exceeded by the amount of capital seeking returns, products which package up consumer credit become more widespread.

At the same time as this expansion in consumer credit commences, restrictions on worker bargaining power mean that the share of GDP that goes to workers decreases, reducing their social status. To reclaim this social status, they access newly cheap credit, which they use for consumption rather than investment. Since their share of GDP continues to decrease, the ratio of workers’ wages against the amount by which they’re leveraged continues to increase. This is clearly not a sustainable situation, and eventually defaults begin. This suddenly slashes the amount of wealth available to the top 5%, who become suddenly much more frugal with their money via their intermediaries, the financial services. Cue a credit crunch.

This is, of course, broadly what happened: toxic mortagages from the US poisoned much of the credit system. The authors predict that without some way of ensuring that workers are able to pay their debt, the result will be another financial crisis. They advocate increasing the bargaining power of workers to achieve this.

We’ll skip over the colossal irony that debt-fuelled expansion was Labour’s economic policy and appears to remain Labour’s economic policy. Let’s focus on the implications of this study. If the modelling carried by Kumhof and Ranciere is correct, the origins of the economic crisis lay not in Thatcher’s relaxation of regulation of the financial sector, but in her tightening of legislation around union activity. The implication of this is that the current furore around bank regulation is misplaced: Government should instead relax union regulations to avoid another crisis.

I have some sympathies with this view – as a Liberal, I don’t believe the State should be regulating the activities of individuals except inasmuch as they impact on the rest of society. Union activity in the private sector, where excessive demands can cause a business to fold, has typically only private consequences. Union activity in the public sector can have implications for everyone else, as Bob Crow appears determined to prove. There’s a strong case for separate bodies of regulation for unions in industries with multiple providers and industries with a single provider, which would enable proper disputation between workers in the former industries. Unfortunately, no-one’s advocating that at the minute – certainly not the Labour Party, who’d be crucified by their public-sector paymasters, and certainly not the Conservatives, who view any union activity as a constraint on their chums in big business. This is something Liberal Democrats should be unafraid to work for.

*for any outstanding believers, do read Christopher Snowdon on this, he’s very good.

Today I attended a rather fascinating discussion at the Green Alliance conference on the subject of the Big Society. Paul Twivy, Chief Executive of the Big Society network, laid out in relatively clear terms the shape that the Big Society is intended to take; or at least the policy levers the Government is using to try to implement it.

Broadly, the Big Society is going to be a patchwork of geographical areas known as Square Miles – you’ll  be hearing more about Your Square Mile in the near future. They’re a construct intended to represent the fact that the actual inhabited land area of the UK is around 8,000 square miles – a relatively small proportion of the entire land mass. These will form the basic unit of Big Society initiatives, and will typically be around the size of a couple of council wards in urban areas. To these will be allocated community organisers, whose role will be to enable residents to identify how they wish to shape their area, and to provide them with the tools and expertise they need to do it. On a voluntary basis, of course. They’ll work to identify community ‘anchor’ buildings that can be used as hubs for volunteers who need a space for particular purposes, and build on those anchor buildings to ensure that people are aware of what they can achieve in a given area.

So far, so non-specific. I haven’t really given the discussion justice, but there’s something here that I’d like to elucidate. The aim of this is to develop communities, promote social cohesion and give people a strong sense of responsibility for their local area – and generate happiness on the back of this. You can, from the above, begin to see how this will be achieved – not by asking people to do something for their area, but by asking them to think about how they want their area to be and giving them the tools to achieve for themselves. The obvious example in the short term will be community green space – after cutbacks, if you want nice neighbourhood gardens, you’ll be able to organise a gardening team with your neighbours and sort it out for yourself. It’s not about saying that services have been cut so volunteers should step in to replace them – but rather asking people what they want and getting them to take ownership of that vision themselves.

Of course, this all sounds a bit wanky, but there are important parallels with something I’ve been banging on about for a while now, which I’ll discuss in a moment. It’s something with important political consequences, as it’s becoming rapidly clear that Labour, at least its statist variants, do not understand what the Big Society is about at all. This was brought up by a question from a representative of Oxfam, who argued that our present individualised, atomised society is not suitable for this sort of endeavour, and it would require a society-wide change in our values towards a more collectivised society, a more co-operative society, and a society more focused on the common good in order to achieve it.

The gentleman was correct – the Big Society does require a shift in our values, but not in the way in which he expects. This is because of a hidden assumption I’ve seen evidenced on left-leaning blogs for some time, which is that a common good can only come out from values which prize collective work and the sublimation of the individual  to the group(okay, a slight exaggeration for effect). Broadly, it’s the claim that such public spirit can only come about from us all working together. This is a mistake.

Transcendental Liberalism, the thesis that the role of society is to facilitate the development of excellence in judgement by the individual by removing the chance-based barriers to their achieving such, is something I’ve been pushing for quite some time now. It has bearing on this subject, as it identifies that a clear goal of the individual is to develop phronesis, or practical wisdom, as it leads to happiness. This practical wisdom doesn’t simply cover employment, but social interaction and all spheres of life – it is excellence in judgement of the particular borne of self-identified principle. It’s clear that the scope for doing so is diminished in contemporary society –  if your scope to employ your judgement is limited by the fact that your job is repetitive and mindless, then you’ll be less happy. It is the role of the State to ensure that individuals have the space necessary to develop phronesis.

Now, it’s clear that the output of developing excellent judgement is excellent judgements – great decision-making, great endeavours and great art, to name a few. It’s also clear that the individual who works towards this is of benefit to society. If one has scope to practice judgement, one will benefit anyone who engages with instances of that judgement. If, say, one wishes to develop excellence in gardening, anyone who encounters that garden will benefit. We can therefore say that the Big Society provides space for the individual to achieve that – without requiring a commitment to collective action. That’s not to say that collective action cannot be an output from developing good judgement – there will be many cases in which you correctly identify that working with others will achieve a greater excellence than working by yourself. Excellence in social judgements – e.g. sharing the proceeds of work appropriately – will facilitate the achievement of excellence in an appropriate task.

It is this space for individual phronesis (individual virtue one could say, if one wished to take the Aristotelian content of Transcendental Liberalism all the way) that the Big Society will facilitate. Mandated collective action is not necessary, and indeed would be anathema – mandated action removes individual judgement. It is this facilitation of phronesis and the rejection of state control it engenders which will prove telling on a Labour Party unable to handle such a move – indeed, one could argue that it is the whole point.

Such a move is not without risk. The true threat in value terms to the successful implementation of the Big Society (perhaps better labelled as the Phronesis Society) comes from the pusillanimity engendered by decades of excessive state control – people now wait for Government to take the initiative rather than viewing their own development as their responsibility. This is evidenced by phrases like, ‘The Big Society is about Government shirking its responsibility’  – to do what? Tell you how society should look? It’s evidenced by a reluctance to make judgements about others beyond legal guidelines – the insidious nature of Anti-Social Behaviour Orders was evidenced by their name, as they called on the Government to validate individuals’ judgements of others rather than asking the individual to have the confidence of their own position. It is this kind of abrogation of the relationship between the self and others in favour of the State taking responsibility that leads to an atomised society – why deal with others, why co-operate with others, when the State does it for you?

However, it remains a strong theme in British public life – later in the debate, someone genuinely asked how people were supposed to volunteer without a framework being given to them. These were middle-class, well-educated people, and they were afraid to act on their own judgement without guidance. This is the risk attached to the Big Society, and by extension the Coalition’s political project.