About the ‘privatisation’ of Channel 4

So I hear the Conservative Party (aka ‘Tories’) want to privatise Channel 4.

Ostensibly it’s about future investment and economic sustainability… sounds very woolly to me.

More realistically it’s probably a politically-motivated ‘punishment’ for C4 in how aggressively it has been in its opposition to the government. Basically, it’s saying “cross us, and we will cut off your support”.

I’m not in favour of it. Why? There’s not sufficient justification for it. But, I’m also not overly against it. For the same reason: there’s not sufficient reason to oppose it. My main reason for opposing it is that I prefer publicly owned assets stay public, unless there was significant reason to change it, for example if it’s haemorrhaging public funds. So mainly my position is ideological, albeit rather weakly.

 I find it odd why a ‘conservative’ government would want to do this…  Though the Tories have a track record of privatisation (so did Labour when they were in government, but that’s another story), there’s nothing intrinsically conservative about privatising public assets. A truly conservative position would be to just maintain the status quo.

An ideology of liberalism, on the other hand, would favour liberalising companies from government control. So privatising Channel 4 would actually be a ‘liberal’ move.

The curious thing I find, is that the self-identified ‘liberals’ are the ones who are most outspoken against this move. The reasons I’ve seen revolve around editorial neutrality and the support of independent content producers that Channel 4 currently engages in. Here are a few more things that are odd…

  1. It is not a given that either editorial neutrality or support of independent content will disappear. A privatised C4 may still be bound by a charter to maintain its current public remit, and OfCom will also have the regulatory powers to enforce such a remit (regardless of whether or not such a  remit is in the charter).
  2. It is also surely more liberal for a broadcaster to not be bound by a government-created public remit? In a liberal market, independent content producers will attract broadcaster funding if they produce quality content that attracts viewers.

What does this all mean? Nothing good:

  1. Self-identified ‘liberals’ don’t know what liberalism is.
  2. The ‘Conservative’ party is not ideologically bound to conservatism.
  3. Political positions are not being taken on the basis of ideas, but about sectarian tribalism. Ie “as a leftie, I will oppose everything the Tories say or do”
  4. As these politics encroaches into more and more of society, people are becoming more partisan and hateful to those who disagree with them.

It’s a sorry sight to behold. I hope anyone reading this will take a look at themselves and the direction of society.

The golden rule is oft-said “do unto others what you would have them do unto you”. But Christ taught us: “Love your enemies, do what is good to those who hate you, bless those who curse you, pray for those who mistreat you.”

Fire and rehire

What is fire and rehire? And why does it happen?

What is the effect of banning fire and rehire? Bad policies can make a bad situation much worse – we have to be careful to not let good intentions cloud our judgement.

Driven by Labour MPs (of course), Parliament is now talking about banning the employment practice known as “fire and rehire” – a method for employers to reduce the wages they pay their employees, by releasing them from their current employment contract (fire), and then re-employing them under a new contract with lower wages (rehire). Sounds like a reprehensible tactic, doesn’t it? It’s unfair that employers can do this to their employees, right?

Why would an employer fire and rehire?

Sometimes businesses do need to reduce costs. Not just for the sake of profit, but it could be the difference between breaking even or unsustainable losses. Many big businesses will have bigger financial reserves, or are able to borrow money easier. But smaller businesses don’t have enough flexibility in their operational margins to weather losses for long periods.

Why would an employee accept fire and rehire?

If the employee can command a better wage elsewhere, why haven’t they gone to work for another employer, instead of coming back to their existing employer for a lower wage? Employees aren’t forced to stay with any employer. In a worst-case situation, the employee has to stay on the new lower wage only until they can find better employment elsewhere.

In most cases, unhappy employees facing an unfair reduction in wages should be able find another employer who pays them better. The only situations in which this is not true is if 1) there is a general economic downturn so wages are falling everywhere, or 2) the employee was being paid above market rate to begin with.

In both cases, why is it fair for any employee to get paid more for their work than everyone else on the market who does the same work?

What is the effect of banning fire and rehire?

Nevermind the issue of fairness. What’s more significant is the effect of banning fire and rehire on both employers and employees alike.

Without the ability to reduce employee wages, employers will not be able to reduce their operating costs as easily. More businesses facing financial difficulty will go out of business if they cannot lower operational costs whilst retaining the staff they need.

Alternatively, businesses can terminate existing staff, and hire new staff at lower salaries instead. This means existing staff are forced to become unemployed instead of simply having a lower wage.

It might feel unfair for an employee to be moved to a lower wage, but which is better, for employees to remain employed at a lower wage, or for the business to close down, rendering all staff and business owners without an income?

Bad policies can make a bad situation much worse – we have to be careful to not let good intentions cloud this reality from our judgement and decision-making.

What’s the harm in feeding the poor?

What’s the harm in feeding the poor? Why can’t we just print more money and make everyone a little bit richer?

What’s the harm in feeding the poor?

What’s the harm in regularly giving people money, with no strings attached?

Taking resources for granted

Was oxygen ever so scarce for you that you’ve had to conserve it, else you suffocate? Even though oxygen is a limited resource, our ready access to it means we don’t treat oxygen as if it is a limited resource. We not only consume as much of it as we want, we even indulge in escalating our consumption of it, such as when we participate in any form of physical exercise.

If a man had free access to money or food on a regular basis, it will no longer be a blessing, but an expectation. That means he becomes dependent on it, and perceives it to be a resource that he does not consider to be scarce. Have you ever had to work hard to receive your regular exposure to sunlight? Much as we take for granted that the sun will rise everyday to give us our daily dose of sunlight, if we get used to ‘free’ anything, be it food or money, we will start to take it for granted. Which means we will treasure ‘free’ resources less and not spend it as frugally.

The resources which supply welfare isn’t unlimited. Someone had to grow the food, and people have to work to produce and distribute goods and services.

Printing money does not create wealth

But what about money? Why can’t we just print more money and make everyone a little bit richer?

The problem is, money is just a medium of exchange. It is not a resource in itself, so producing more money does not produce more food or goods.

Let’s illustrate what this means: say you have a tiny economy that produces 100 bushels of food a year. In circulation in this tiny economy is exactly 100 silver coins. The people in this economy use these 100 coins to trade for the food each person produces, such that each coin buys exactly one bushel. So you can see that increasing the number of coins in circulation does not increase the number of bushels available to buy.

What happens if someone decides to create 100 additional coins for himself? With a total of 200 coins in circulation, this person will initially own 50% of all the coins, which makes this person able to buy 50% of all the goods available. But the number of bushels available to buy hasn’t changed, it is still 100 bushels. Now that 200 coins correspond to 100 bushels of food, someone who was once able to buy 10 bushels of food for his family with 10 coins, is now only able to buy 5 bushels of food, thanks to the money creation.

This person doesn’t create more wealth for himself, but by devaluing the coins that the others have, he actually steals the resources that other people have produced. This is the effect of printing money, a practice that many modern governments engage in, under the guise of “quantitative easing”. Sure, those who had more will have more taken away, but those who have little will have even less remaining.

Where does free food and money come from?

Coming back to giving people food and money for free. Since food and goods have to be produced through effort, the only way you can receive them for free is if somebody else sacrifices their payment for it. This is easy to accommodate if we are producing in surplus, but it is not safe to assume that production will always be in surplus. If a government creates more money than what is already in circulation, all it is doing is robbing from those who have, hitting the poor the hardest, adding to the numbers of those in poverty. To feed the new ones in poverty, the government can create more money, but the cycle then repeats, eventually creating a whole nation of poverty. This was the phenomenon of runaway inflation that plagued Zimbabwe and the Soviet nations.

But surely just as there will always be poor people, there will always be rich people? Not necessarily. The rich and poor aren’t two homogenous groups. People exist on a continuous spectrum of wealth, and individuals travel up and down it throughout their life. When government prints money to spend, all they achieve is to pull EVERYONE down. If they keep printing money, eventually even the wealthiest will be pulled down. By that point, everyone will be so poor that the resentment toward the few remaining wealthy will be overwhelming. It won’t take much for the remaining wealthy to be brought down by the force of mob rule – where will all the wealth come from then?

Modern methods of taxation are designed to ameliorate this. By taxing a proportion of people’s income and consumption, we mitigate the effect of reducing everyone’s wealth. But taxation has its limits: taxation will reduce a person’s income. So if a person’s income potential is so low they earn less than welfare payments, it makes little sense for them to be in paid work. The higher the levels of tax, the worse the problem gets. Likewise with the levels of welfare payments. This means that increasing tax beyond a certain level will actually reduce the overall tax take for the government.

Government does not have unlimited resources

All this is to say that government spending is not without limits – government can neither increase tax nor print money indefinitely. Which means the government has to choose to prioritise how it spends its budget.

In the UK, the two biggest spends for the government is 1) its national healthcare service, and 2) social welfare provision. With limited resources, increasing spending on one of these necessarily means reducing spending on the other. Yet socialists are perpetually calling for ever higher increases for spending on both the NHS and on social welfare benefits.

Sure, doing this bit by bit won’t immediately destroy your country – you’ll get away with raising tax a little bit, or printing a little bit of money every now and then. But every little bit adds up – when the movement is gradual, you don’t notice it happening.

Printing a little bit of money will not immediately cause massive inflation, but over time the cumulative effects of printing money means everybody’s spending power is gradually eroded: savings lose their value, those on low incomes will have even lower incomes.

In the same way raising tax a little bit might temporarily increase the tax take, until those who are just about managing to balance their bills find themselves with even less spending money, putting them below the breadline. This also applies to corporation tax: corporation tax is identical to income tax, except the income is a business’ profits. Businesses already struggling to break even will be driven to shut down.

As a socialist, you may think that your demand for increased spending won’t be enough to tip the whole edifice over, but how will you recognise the straw that breaks the camel’s back?

The push to spend more, to print more money, is precisely what leads to mass poverty. This has been the experience of every nation in human history which chose to indulge in socialist ideals.

Why shouldn’t we feed the poor?

Shouldn’t we feed the poor and hungry? But of course we should!

Unfortunately, any welfare system will create dependents, meaning it becomes unethical to reduce spending on welfare. Which means that the social welfare bill will only keep going up. At some point, somebody will need to say “no more”. Unfortunately, socialist ideologues will jump at this opportunity to condemn the ones who are brave enough to call for a stop to overspending.

The only way out of this trap is to not rely on government spending to feed the poor. Feed the poor yourself, out of your own surplus. Contribute to food banks, give the homeless a meal and a sheltered place to rest, and do your own part. Don’t rely on government spending to do it.

Have you heard of the saying “give a man a fish, you feed him for a day. Teach a man to fish, you feed him for life”?

In conclusion: If you want to feed the poor, do it yourself. And if you can’t keep it up indefinitely, then we should teach a man to fish, thus feeding him for life.

Opposition to the EU is not the rejection of Europeans.

When a country which evidently rejects racism has democratically elected to oppose a political institution, please accept the simple evidence – it is NOT because of racism or hatred of Europeans.

I have many friends who are European. I have even more friends who are pro-Europe. I too, am pro-Europe. I want the best for Europe, its people, and all its constituent economies.

Yet, as most of my European and pro-European friends know, I am vociferously anti-EU.

This might seem to be a contradiction to many people. But that’s only if you think that the European Union is the same thing as Europe. It shouldn’t surprise you that I don’t. Here’s the difference between Europe and the European Union:

Europe is a continent. Europe contains 48-51 countries (depending on how you count them), not all of them entirely in Europe.

The European Union (EU) is a bureaucratic supra-national institution. It is a political union of 27 countries, where laws, regulations, and treaties are created by bureaucrats and diplomats who are not politically accountable to a democratic process. In effect, it provides an avenue for the rich, powerful, and/or connected to exert their influence.

Opposition to the European Union is opposition to this lack of democratic accountability. And yes, it is also a rejection of the policy of open door immigration. But rejection of open door immigration is not the rejection of immigrants. Wanting a fair immigration policy is wanting to treat all immigrants fairly, rather than favouring immigrants depending on their country of origin.

Unfortunately, when one opposes the European Union, many immediately assume that it is because we reject Europeans.

Sure, I don’t deny that there are some who oppose to the EU and the policy of open door immigration on the basis of nationalism, jingoism or even outright racism. But it is extremely unfair to characterise everyone who opposes the EU this way. The evidence indicates that the vast majority of British people are accepting of immigrants and Europeans – racism is a relatively fringe phenomenon. Indeed, the popular opposition to racism is a powerful testimony to how opposed to racism the country is.

When a country which evidently rejects racism has democratically elected to oppose a political institution, please accept the simple evidence – it is NOT because of racism or hatred of Europeans.

I wonder how many of my European and pro-EU friends would even read this far…

There are of course other arguments for being a part of the European Union, namely economic and political reasons. I have of course considered these arguments already, but those are altogether separate subjects. Please do let me know if there’s any specific subject or argument you think I should explore.

Morality vs law/culture/individual preferences

What differentiates morality from law, culture, or even preference?

All of the above tend to overlap a lot, but not always. I think we can all identify laws, cultures, and personal desires which are immoral. Which means morality must be separate from law and personal preferences.

We know that laws are made by man collectively, imposed by the majority/powerful. Whilst preferences are personal to each individual. Culture values bridges these two, in the sense that it is not constructed, but evolved through the collective preferences of individuals.

Values which are individual = preferences

Values which are collectively constructed = law

Values which are collectively evolved = culture

If morality had the capacity to judge all of these, moral values must be separate from all of them. If moral values are man-made, then they lack the capacity to judge either one or more of the above (because they would equate to one of the above concepts).

To put that into a working example, let’s take racism. Some individuals are racist. I think we can judge that individual’s values regarding race to be immoral. Some laws are racist. We can also judge laws which discriminate based on race to be immoral. Some cultures are racist. I think we can judge cultural values which denigrate people based on race are immoral.

But if morality is man-made, it must be relative. If morality is relative, by what standard do you judge a culture to be immoral? With relative morality, if you are able judge the racism as immoral, racists have just as much right to judge your anti-racism as immoral. Which is how morality which is man-made is self-defeating (paradoxical).

Fun facts about Climate change

Over the years, I’ve learnt some interesting facts about the atmosphere and climate change…

Cloud cover

  1. Water vapour is evaporated from the seas , which covers 70% of the global surface area.
  2. The warmer air is, the more water vapour it can hold. [1,2]
  3. The more water vapour there is in the atmosphere, the more cloud cover exists.
  4. Cloud cover blocks sunlight, reducing global warming.

Conclusion 1: atmospheric temperature is naturally regulated by water vapour.

Plant growth

  1. Increased atmospheric water vapour increases precipitation (rainfall).
  2. Increased rainfall increases plant growth.
  3. Increased carbon dioxide concentration increases plant growth. [3]
  4. Increased atmospheric temperature ALSO increases plant growth.

Conclusion 2: “global warming” creates a greener planet. This is a good thing.

Arctic sea ice

  1. Arctic ice is floating sea ice
  2. Floating ice displaces the same volume as melted ice. [4]

Conclusion 3: melted Arctic ice will not contribute to rising sea levels.

Inland glacial ice

  1. The worst case scenario projections of global warming/climate change estimate that the atmospheric temperature will increase by 5C over the next 100 years. Most estimates indicate a 2C rise over the next 100 years. [5]
  2. Average coastal temperature of Antarctica is -10C. The majority of Antarctic ice is much further inland, where temperatures are much much colder (in excess of -50C). [6]
  3. Greenland’s ice sheet has an average temperature of -12C in summer. [7]

Conclusion 4: “Climate Change” will not melt either Greenland or Antarctic land ice.

Sea levels

  1. Increased atmospheric water vapour increases precipitation.
  2. Increased precipitation increases polar ice.
  3. Vast majority of precipitation water is evaporated sea water.

Conclusion 5: as “global warming” increases polar ice, it may even lead to sea levels falling.

Greenhouse effect of CO2

  1. The greenhouse effect of CO2 is logarithmic [8]: the atmospheric concentration of CO2 needs to DOUBLE for warming to increase by 1.5%.
  2. Global atmospheric temperature has risen by about 1C over the last 150 years.
  3. Over this time, atmospheric CO2 concentration has risen from 280ppm to 415ppm.
  4. If we consider the worst case scenario, by assuming that all of global warming is caused by the rise in CO2: then a rise of 3C over current temperatures would require adding another 800ppm to atmospheric CO2.
  5. But, we have only increased atmospheric CO2 by 135ppm since the dawn of the industrial revolution.
  6. At the current rate, it would take over 400 years for atmospheric temperatures to increase 3C.

Conclusion 6:  We are nowhere near to increasing the atmospheric temperature by 3C.

Greenhouse effect of CO2

  1. The greenhouse effect of CO2 is logarithmic [8]: the atmospheric concentration of CO2 needs to DOUBLE for warming to increase by 1.5%.
  2. Global atmospheric temperature has risen by about 1C over the last 150 years.
  3. Over this time, atmospheric CO2 concentration has risen from 280ppm to 415ppm.
  4. If we consider the worst case scenario, by assuming that all of global warming is caused by the rise in CO2: then a rise of 3C over current temperatures would require adding another 800ppm to atmospheric CO2.
  5. But, we have only increased atmospheric CO2 by 135ppm since the dawn of the industrial revolution.
  6. At the current rate, it would take over 400 years for atmospheric temperatures to increase 3C.

Conclusion 6:  We are nowhere near to increasing the atmospheric temperature by 3C.

Human emissions of greenhouse gases

  • CO2 contributes 26% to the overall greenhouse effect.
  • Human activity contributes only about 4% of global CO2 emissions (29 gigatons per year compared to 750 gigatons of natural CO2 emissions). [9]

Conclusion 7: Eliminating human CO2 emissions will reduce the greenhouse effect by only 1%.

The biggest greenhouse gas

  1. Water vapour is by far the most significant greenhouse gas, contributing an estimated 60% of the overall greenhouse effect. [10]
  2. There is no way to control the amount of water in the atmosphere.

Conclusion 8: Humans have very little control over global warming.

When did climate change start?

  1. Long before human activity, global temperatures have always been changing, millions of years before humans started burning fossil fuels. [11]
  2. In the prehistoric past, the world was a lot warmer but also a lot greener.
  3. In the relatively recent past (1600s), the world was a lot colder, where the River Thames in London would freeze over, an event almost unimaginable today. [12]

Conclusion 9: Climate change will occur even if all human activity never existed.

“Global Warming” vs “Climate Change”

  1. Global warming does not result in a uniform rise in temperatures – some places get hotter than others, and many places even get cooler.
  2. Climate change is often beneficial: Increased precipitation cools desert environments and warms arctic environments, greening both types of environments.
  3. Humans have always adapted to their environment: the desert nomads, the Inuits of Alaska, and the stormiest known place on earth – Kampala, Uganda… mankind have thrived and lived happy lives in these extreme climates.
  4. There is no optimum level of either CO2 concentration, or temperature for the global climate.

Conclusion 10: We shouldn’t fear changes in the climate unless it can be shown that we cannot cope with the adverse effects of change.

In summary

  1. Atmospheric temperature is naturally regulated by water vapour.
  2. “Global warming” creates a greener planet. This is a good thing.
  3. Melted Arctic sea ice will not contribute to rising sea levels.
  4. “Climate Change” will not melt land ice on either Greenland or Antarctica.
  5. As “global warming” increases polar ice, it may even lead to sea levels falling.
  6. We are nowhere near to increasing the atmospheric temperature by 3C.
  7. Eliminating human CO2 emissions will reduce the greenhouse effect by only 1%.
  8. Humans have very little control over global warming.
  9. Climate change will occur even if all human activity never existed.
  10. We shouldn’t fear changes in the climate unless it can be shown that we cannot cope with the adverse effects of change.

So what do you think? Does this make you feel less alarmed about climate change?

Feedback welcome.

References

[1] A closer look at evaporation and condensation

[2] Saturated Vapor Pressure, Density for Water

[3] Carbon Dioxide Fertilization Greening Earth

[4] Why does ice melting not change the water level in a container?

[5] 2014 Energy and Climate Outlook

[6] Climate of Antarctica

[7] Climate – Greenland

[8] The Logarithmic Effect of Carbon Dioxide

[9] How do human CO2 emissions compare to natural CO2 emissions?

[10] Climate Data Information – Gases

[11] Earth’s average surface temperature over the past 500 million years

[12] River Thames Frost Fairs in London

Wealth and Inequality

Equality – or the lack of it – should be judged over a lifetime. Young people on low incomes with low levels of wealth may think now that anyone richer should be taxed more. But they should be careful what they wish for. Age is a huge driver of wealth and income. And it comes to us all.

No one is born earning £80,000, earns it for 40 years and then dies. Our income starts low, rises with experience and seniority and often falls again toward retirement.

The other reason why those on high-ish incomes may not feel rich is lack of wealth. There has been much talk of rising wealth inequality in the US and Europe. But there has been very little discussion about the fact that some of it is the inevitable result of two modern demographic trends: rising education and older people living longer. The later you start work, the later you amass wealth; the longer your parents live, the later their wealth trickles down.

Although today’s older generations benefited from favourable conditions, notably the run-up in housing prices, we must be very careful about introducing policies that treat income and wealth as static. In fact, the picture is constantly shifting. But it is worth remembering that most people who end up rich start out asset poor. As they earn and save, that changes.

One of the very few careers, by the way, in which you do earn pretty much the same amount every year regardless of your experience or your success, is politics. All UK MPs earn £79,468 a year regardless of skill or time served.

This could go some way to explaining why it is that ideologically driven politicians with little experience of working in the private sector are so often surprised by the failure of the “poor” to vote for more taxes on the “rich”.

Text extracted from:
https://moneyweek.com/518997/what-level-of-income-really-makes-you-rich/

Parliamentary scrutiny and the Supreme Court

The principle of the tripartite separation of powers puts forward three branches of government: 1) the judiciary, 2) the legislature, 3) the executive.

The judiciary exercises the law, and binds the executive to prevent it from breaking law. The legislature creates law, but is bound by the agenda set by the executive. In other words, the judiciary has power over the executive, the executive has power over the legislature, and the legislature has power over the judiciary.

But this circle of power is not in uni-directional. The legislature has power to scrutinise law and limit the reach of the executive. The executive can influence the composition of the judiciary. The judiciary is responsible for interpreting the law, which might mean striking down laws which are unconstitutional.

This describes the checks and balances at play in the three branches of government.

The constitution of the USA abides by this principle:
The president and his cabinet is the executive.
Congress and the Senate combined is the legislature.
The Supreme Court is the judiciary.

However, the UK does not have such a clear-cut separation of powers. The executive, the prime minister and his cabinet, is made up of members of the legislature. In practice, this means parliament that the separation of powers is blurred, but the principle still works in the sense that parliament scrutinises legislation and the cabinet sets the agenda for legislation. In general. But it doesn’t always work this way. Members of parliament are able to raise motions to the speaker. And here is where things get interesting (and dangerous).

For the past year, parliament has been passing laws to limit the ability of the executive to take executive action, laws which apply only to the direction of the executive and not to the populace. This has given rise to the non-stop political turmoil and instability over the past 3 years, since the UK elected to leave the European Union.

Amidst all this turmoil, the Supreme Court of the United Kingdom sees itself fit to declare an act of the Prime Minister, the executive, to be unlawful.

This is possible because the United Kingdom does not have a written constitution. It has a system of common law, where judgements are passed based on the interpretation of legislation and precedent. Legislation are laws passed by acts of the parliament. Precedent are principles of interpretation that the court has historically abided by. Precedent is a key feature of common law because it is maintains consistency in judiciary rulings, which is a requirement for fairness.

However, this time, the Supreme Court has made a constitutional ruling without precedent. It has declared an action unlawful, despite no precedent or law preventing it previously. What this means is that the Supreme Court has created a constitutionally binding law, without public debate, without electoral mandate, without parliamentary scrutiny.

The Supreme Court has overreached. It is no longer interpreting law – it is now creating it.

The Supreme Court has set a new precedent. It now has unaccountable powers over the constitution.

But is this actually a problem? Don’t the courts set precedent anyway? The answer is yes, they do. The difference this time, is the kind of precedent that has been set. Some wealthy private individuals have taken the executive to court over an action they disagreed with. Despite this action being perfectly lawful previously, the court has now retrospectively ruled that the executive’s actions are unlawful. This means that the Supreme Court can retrospectively bind the executive. The only unelected arm of the government now has the highest uncontested power over the nation. This is the mark of a oligarchy, not a democracy.

I suppose we have Brexit to thank for unveiling this fundamental flaw in the institution. It has shown that the Supreme Court doesn’t work with the principle of common law.

How did this come about, how was this even possible? A bit of modern history: the Supreme Court is a relatively new invention in the United Kingdom. It was created in 2005. When Tony Blair was Prime Minister. The motivation for its creation was out of concern that the UK’s institutions of government did not conform to the European Convention of Human Rights, drafted in 1950 by the Council of Europe, the forebearer of the European Union.

Well.

Where do we go from here?

Free market vs socialism: supply and demand

In a free market, supply always rises to meet demand: If someone is willing to pay for it, somebody is willing to provide it. If too many people are providing the same, either prices drop, or suppliers need to develop a premium quality product or service to maintain their attractiveness. Either way, the consumer wins.

Under socialism, supply is controlled by the government. If demand rises, supply doesn’t rise unless the government takes notice. And the government only takes notice when it becomes critical – in other words, when it’s too late. That’s why the NHS is forever in crisis, public transport is always inadequate, and housing is always in short supply.

And under socialism, when demand falls, supply remains high, leading to overproduction, waste, and ultimately the collapse of the industry. This is why the UK coal and steel industries collapsed. This was why the Soviet economy collapsed, and why every socialist economy will collapse.

The worst thing about socialism is – the worse the problem gets, the more control the socialists demand. If the NHS is not meeting supply, the solution is always, “more government intervention”. If not enough houses are being built, the solution is also “the government must build more houses”. Both the Tories and Labour are guilty of this. All of mainstream politics is guilty of this. And they don’t care. Because the more they promise, the more power they get. The more power they get, the more they will get away with promising. It’s a self-perpetuating cycle. You will have never heard a politician say “there are not enough hospitals, let’s encourage the growth of the private healthcare industry.”

You might think: “house development is private!” or “the trains/buses have been privatised!”. Yes, but privatisation is not the free market. The housing and rail industries are still heavily regulated and controlled by the government. The industry cannot simply build houses or train tracks without government first mandating it. It is a crony industry, where developers chase profits on the tailcoats of government decisions.

To be clear: I am against privatisation. The free market approach does not require that government-owned assets or industries to be privatised. The free market approach only requires that government does not monopolise the industry. If the public provision of services has to compete fairly against the private provision of services, there will be a free market.

What is fair competition? No monopoly over industries, such as with GP services, house planning, and railway operations. Let market forces control supply, instead of using the government to regulate it. No taxpayer bailouts for failing companies, be it British Steel or Royal Bank of Scotland. No subsidies for unprofitable industries, be they farming, renewable energies, or even fossil fuels.

The end result of fair competition? Industries strive to serve the customer, rather than to court government officials for the next manufacturing licence or production permit. Industries compete on an equal footing regardless of ownership, so that efficiently-run private businesses are not strong-armed out of the industry by government fiat, or priced out of the industry by inefficient businesses which survive only because of subsidies. Encouraging competition in the industry means industries have to be competitive to thrive, which means customers get better service, lower cost, and improved quality.

I’ve seen it work. It works beautifully. Unfortunately, nobody shouts about it. That’s because nobody complains about something working well. When something works well, we tend to take it for granted. That’s just the sad reality of human nature.

“How do you reconcile polar opposites?”

Recently, a friend who disagrees with my politics felt the best course of action was to disconnect from me. For, he stated, the very pertinent question:
“How do you reconcile polar opposites?”

This appears to be a very common phenomenon. All too often, in today’s politically-charged world, we find ourselves in situations where we fundamentally oppose what someone whom we thought to be close friends believe. Is the friendship over? Is there nothing that can be done about it?

This was my answer to him…
It’s simple (though not always) easy to reconcile polar opposites, I do it fairly often. all it takes is a desire to understand the other person.

For example, you might ask me: “why do you hate Europe?” and I would answer, I don’t. I just think the European Union is damaging to Europe.

And then you could go “well, I think the European Union has been great for Europe”, and we could end it at there. Or you could take it further and find out in what ways you think it is great for Europe, and in what ways I think it is damaging Europe. And then we could drill down to identify both the common grounds as well as the irreconcilable differences. and then leave it at that. Friends can fundamentally disagree without becoming enemies.

The worst thing we can do is assume the worst of those who disagree with us. Because then we automatically make an enemy of them in our own perception, even if they are actually your friend who just has a different perspective.

What do you think?

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