A truly great man. The world is poorer (in every sense) with his passing. Russ Roberts was fortunate enough to interview him only a few months ago - his brilliance shone through even at the age of 94. From another interview in 2004:

There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost. Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch! Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government. And that’s close to 40% of our national income.

Update: The New York Times has a detailed story and biography.

Firstly we learn that owning knives in Hampshire is wrong. Or maybe it isn’t; but the police only seem interested in gathering them anyway. Then we discover that the police are targeting signs that others find offensive. I’m not convinced this is a good use of my tax money.

But accordingly, I would like to politely request that Hampshire Police remove the following signs across the county, which I find offensive:

• ‘Please wash before exiting rest room’ (the facilities in my office)
• ‘Baby on board’ (still seen on the occasional car)
• ‘Defacing council property will result in the police being called’ (Job Centre, Winchester)
• ‘We will not sell Eggs or Flour to under-18s’ (seen in Sainsbury’s, see attached photo)

I hope Hampshire police get cracking with this; there’s nothing like a muted, inoffensive society to inspire us to greater wealth and knowledge.

Anyway, enough frothing at the mouth - I’m beginning to sound like The Devil’s Kitchen, with a little less of the adult language. Time for a Valium, perhaps.

For anyone who hasn’t heard, there are new EU-wide regulations on hand baggage - which have the effect of slightly relaxing the rules that were in place at UK airports (although there are still plenty of awkward gotchas). The implication of this, of course, is that either the original terrorist threat has subsided (although it would be nice for the security ’services’ to explain why), or that they panicked and couldn’t handle the situation they suddenly found themselves in. Either way, I suspect the next knee-jerk reaction isn’t far off. In the meantime, maybe this will reduce the number of annoyed executives having to check in an overnight bag.

Incidentally, any particular reason we can’t have a free market here? I’d happily pay less for less ’security’.

A little practical experiment:

I was listening to a podcast by Bruce Schneier the other day on the topic of privacy. I found his speaking to be a little less powerful than his blog. However, although I didn’t always agree with his proposed economic or legal solutions to problems, primarily because we have a differing political perspective, he is good at explaining security principles and how they apply to real life.

If you’re like me, when discussing privacy with people, you sometimes get frustrated by people who use the mantra ‘What are you scared of? I have nothing to hide.’, or some variation. I find this a hard argument to win. Bruce gave a simple reply which I’m betting is 90% effective.

If you genuinely feel you’ve got nothing to hide, please append your salary and your name as a comment to this posting. If you don’t (and I suspect you won’t), it probably means you have something to hide. This doesn’t mean you are a bad person. It doesn’t mean you’ve committed a crime. It just means you have good reasons not to fully disclose everything about your life. This is what privacy is about, and is why some people get upset when it’s taken away.

From time to time I listen to RadioEconomics. It’s not quite as interesting to me as EconTalk, partly because it doesn’t have the same focus on liberty, but an interesting discussion the other day with Dr. Diane Coyle from Manchester University brought me to two conclusions:

1. Developed countries will suffer from increasing inequality if the current trend of outsourcing increases. Creative ‘knowledge’ work is becoming the province of a large proportion of the population in places such as the US and the UK. However, there are still fundamental limitations on transport and technology that mean that labour-intensive jobs, from train driving to fruit stacking in Tesco, aren’t going away any time soon. A gap in the middle will begin to form, where the medium-skill jobs once were, that are now being increasingly fulfilled by folks in India and other places. This is probably inevitable. Maybe this seems like an obvious point to some people, but I think it is crucially important to keep this in mind to evaluate the promises of those who would like to be in the position to form public policy (in short, election candidates). Whether income inequality is a problem is a question for another time.
2. Dr. Coyle asserted that she was a centrist, and was suspicious of those with ‘extreme’ political views (I suspect that by her definition, that includes me). This was because, apparently, we tend to ignore evidence that disagrees with our views. I would agree with her that it is human nature to do this (as I’ve briefly discussed before). I’m not convinced that being centrist and moderate means that one is immune to such problems, though, and it brings a host of problems itself (in particular, the danger of compromising on important points). However, there is a more fundamental problem - many ‘extreme’ people, like libertarians such as myself, hold our views for moral reasons, not just practical ones. I, like other libertarians, believe that taxes are essentially theft. For myself, this normally overrides practical concerns such as whether they are spent well and have the desired effect (although, for the record, I also believe taxes and large government suffer from practical problems too). Some people don’t believe morality should override practicality in this way, but this is an arbitrary judgement, and in some way is also a manifestation of one’s moral beliefs. Dr. Coyle didn’t seem to acknowledge this fact.

Last Tuesday, I attended Bill Clinton’s ‘Leadership for the Future’ seminar at the Royal Albert Hall. Although I don’t necessarily agree with his politics (he obviously sits somewhere around the centre-left and I’m some undecided variety of libertarian), I couldn’t pass up the opportunity to see a former world leader speaking. The tickets (£60 - £300) weren’t cheap for the hour and a half’s presentation, and the occupancy of the hall seemed to suffer accordingly, but it was worth it. The Royal Albert Hall, which glittered more than I remembered it from my graduation, was a suitably impressive but slightly gaudy venue.

A large majority of the presentation was dedicated to a speech by Clinton, with the remainder being pre-vetted questions. My heart sank when I saw what appeared to be some Powerpoint slides ready and waiting as I entered the hall, but fortunately he didn’t use the projector. He appeared to being using some notes, which was a surprise, but they didn’t intrude too much into the presentation. He was a clear orator, and delivered plenty of soundbite-worthy phrases - his eloquence and fluency wasn’t quite up to the standard of a legend, however.

His speech focused around four main questions:

1. What is the fundamental nature of the 21st century?
2. How would you like to change the 21st century?
3. What steps are necessary to move from (1) to (2)?
4. Who’s supposed to do it?

Each of these questions had detailed answers, and it was here that I began to deviate from the president’s view. His basic premise was sound - the world is increasingly interdependent, and this has both good and bad effects. He focused a lot on security, however, and appears to believe in the current worldview of terrorism (large, complex networks with vast power), whereas I am doubtful (and of course am in the minority). As some compensation, though, it’s good to see him recommending the use of intelligence agencies as the primary weapon against this problem, as Bruce Schneier has recommended many times in the past. Clinton is obviously in favour of income redistribution, and made it sound impressively appealing to me, despite my moral objection. He’s obviously also a competent businessman - his discussion of the return on investment of war, and his wry observation about a country’s budget being controlled by what it spent last year (as is the case in most organisations) betrays his business knowledge. He spoke with admiration about a recent initiative to teach entrepreneurship in Scottish schools - I also believe this should be encouraged.

Clinton’s answer to the fourth question, ‘Who’s supposed to do it?’, was where we deviated most. It’s clear he thinks everyone has a duty to act through democracies, NGOs, and so on, to make the changes they believe are necessary for the world. Irrespective of whether you believe this is an effective method (I think its success is less than overwhelming), this has shades of Kennedy’s famous quote: ‘Ask not what your country can do for you - ask what you can do for your country’, but with the USA replaced with the world. As Milton Friedman explains in his introduction to Capitalism and Freedom, this is hardly the rallying cry of someone pro-freedom. Although I don’t think it’s fair to accuse Clinton of being illberal, I drew the conclusion from this and other comments that he cares more about equality than freedom.

It was quite obvious that Clinton now feels that he is able to speak his mind, having left his presidency. He was asked at one point which world leaders he had met whom he admired, and his passion about three of them (Nelson Mandela, Yitzhak Rabin, and King Hussein) was plain to see. He does seem to be as honest a man as one could reasonably expect in such a position, and I admire him, even if I don’t agree with him.

I’m currently podcast-less, due to the continued incompetence of PlusNet, and so am reading Milton Friedman’s Capitalism and Freedom (at Richard’s suggestion). So far it’s an excellent book, and everything I expected.

It’s interesting how the power of the market might surprise even Friedman himself, however - given that the book was originally written in 1962. On page 30 Friedman discusses the use of tolls on roads, and how they are ineffective in the general case, because of the high costs of administering them on most roads. This is an example of a ‘neighborhood effect’, one of only two types of market failure he identifies. From this, the implication is that a petrol tax is an effective solution.

However, it seems obvious that a technological solution to this problem is not too far away, despite probably being unforeseeable in 1962: it will soon be possible to track people’s exact road usage for a reasonable cost, probably using some radio-based system. Such systems already exist in some restricted areas.

This still doesn’t overcome the local monopoly problem that Friedman also identifies (what happens when there is only one reasonable route from A to B?), but it could certainly shift the balance in favour of some road-use charging, which interestingly even the sluggish UK goverment is investigating.

It appears that there are increasing numbers of customers revolting against bank charges which they deem as ‘unfair’. It appears that the law states that these charges are indeed illegal, because they cover more than just the costs the banks incur. In other words, banks are not allowed to make a profit on these charges. This is awkward because it artifically distorts the marketplace. It would be useful for banks to put in place high charges to discourage customers from using unauthorised overdrafts, keeping too small a balance for regular transactions, etc. There are already regulations in place ensuring that charges have to be clearly laid out in account terms and conditions, so this isn’t ‘unfair’.

There is also the potential that this may hurt those with the self-discipline to keep our accounts in order. Inside Money hypothesizes that this may result in banks imposing general charges for banking, essentially meaning that those who don’t keep their accounts in order will subsidise those who do. Perhaps it isn’t an area in which it’s healthy for government regulation to intervene. Unfortunately, the law in question here is not specific to banking, but seems to cover contracts in general. I would guess it might be some time before this will change.

It looks like ASLEF are going ahead with three days of strike action on South West Trains‘ services. I went to their website to look for an mention of it but could find none. The same was true of the RMT, who are also taking part. Meanwhile, South West Trains have put up notices in stations indicating that ASLEF has announced these strikes because SWT managers drove trains to alleviate recent strike action. As SWT put this, ‘we think this is good customer service’. Well, quite. I would support any measures by SWT to reduce union membership amongst their employees if this is what results.

The irony is that I was discussing Shaving and Carry-on not that long ago - it turned out then that I was being over-cautious - but it now seems I was being naïve. It turns out that the UK government thinks that we should be forbidden from carrying pretty much anything on planes because of a ‘critical’ threat (Bruce Schneier has written about the stupidity of these threat levels before). All I can say is, don’t believe everything you are told. When we can hold the government accountable because they actually give us some concrete information, that might change things, but I don’t think we should expect that any time soon. This is why I’m a libertarian.

Update 10:21: One of the links above goes to a downloadable copy of the BBC documentary ‘The Power of Nightmares’ on archive.org. It looks like the site is currently overloaded, but it’s well worth watching when it comes back online.

Update 13:59: The link now seems to be working again.