Students for Freedom

Look at the Today programme’s website’s coverage of the government’s fascistic move to ban smoking, and you’d have thought that it was a thoroughly bad idea.  Of the four blog reactions, three are libertarians opposed to the ban!  Cast your eyes to the right of the mention of Donal Blaney’s excellent criticism of the tobacco companies reticence to stand up for freedom, and you see the one miscreant blogger that clearly likes the idea of a ban on smoking:

Err… really?  Whilst I don’t smoke, I thought my previous post made it pretty plainly clear that I was attacking the government’s authoritarian approach to smoking.  I know the BBC is just government propaganda, but this is just plain stupid.  Want to check how I previously tagged the post, Beebites?  “Smoking is healthier than fascism”.  Once more with feeling, methinks.

OK, in case anyone that cares about me is reading this, here’s what I want for Christmas.

The Encyclopaedia of Libetarianism?  664 pages of libertarian fun, available from all good book stores for the good price of £69.99.  Hell, yeah.

BTW, the almost the whole book is (for now) available to view online on Google Books.

So why the hell are idiots like Edinburgh student Lily Kember trying to sabotage the much-needed expansion of Stansted?  Without Stansted, Luton, and similar airports, there would be no low-cost travel.  Holidays would remain out of the reach of the poor - and I include the vast majority of students in that.  Kember is clearly not in that category.

Just imagine where we can go now for a fraction of the cost, thanks to Ryanair and EasyJet.  Clubbing in Ibiza, culture in Rome, golf in Faro, craic in Dublin, sun in Nice, bohemianism in Berlin: all are now well within reach of a student’s budget.  Foreign holidays, far from being the preserve of the wealthy as they were three decades ago, are now a staple part of a British student’s life: and that’s without mummy or daddy footing the bill or having to know what you get up to over there.

At the UCL Union AGM this year, I asked a very pertinent question about the Union’s recycling policy: shouldn’t our only concern be student welfare and education?  Isn’t that why the union exists, rather than to pursue its own narrow political objectives.  Sadly, at universities up and down the country, the “speaker from the far-right”, as I was referred to in that meeting, is usually marginalised.  So kudos to people like Harry Cole at Edinburgh for standing up for the interests of students and for exposing the stupidity and rank hypocrisy of people like Lily Kember: who’s rumoured to have flown down to the protest.

If they don’t want to take advantage of cheap flights, and a chance to see Europe before their clubbing days are over, that’s cool.  They can just stay at home: instead of flying down to Stansted to take part in an irresponsible, illegal, and hypocritical protest… against flying.  If you want to stand up for students, you have to stand up for Stansted.

Whilst defending the government’s push to ban the public display of cigarettes in shops, Mr Johnson went slightly further in revealing his preferred course of action on Five Live this morning:

Shelagh Fogarty: Wouldn’t it be easier just to ban smoking altogether?
Johnson: And I think the Department of Health wants to do that, but it wouldn’t be enforceable.

Good to see the Health Secretary holds personal choice so highly.  By ‘enforceable’, Johnson presumably actually means that it would be hard to find a group other than smokers from which it would be as popular to take £8.2bn a year in tax, or a group that would accept it as readily.  There’s no economic argument behind it (broken window fallacy?), but the consensus against smokers’ rights simply makes it politically convenient.

This is a typical “If I don’t smoke, nobody else should either” attitude that typifies bureaucratic ‘thinking’ (is that the right word?).  At least then-Health Secretary John Reid got almost-the-right-idea when he opposed the smoking ban because it’s one of the ‘few pleasures left to the working class‘.  Perhaps Johnson should remember that when he next spouts off about how he’s so downtrodden because he used to deliver mail to Dorneywood and stack shelves in Tesco.

If it’s just a matter of trying to ban what they don’t do themselves, the logical extreme holds some worrying implications.  For ten years, Johnson was a full-time trade unionist - maybe we should ban working?  He left school at 15 - so maybe we should ban higher eduation?  I don’t think anyone could say that’s in our interest, and I don’t think anyone could say that about banning smoking, either.

Here’s a clue, from the F.A. Hayek Professor at St Louis, Larry White, writing on Cato Unbound on the causes of and paths out of the financial crisis:

The housing-finance boom and bust are not the results of a laissez-faire monetary and financial system. We didn’t have one. The boom and bust happened in a system with an unanchored government fiat money and extensive legal restrictions on financial intermediation.
…
We should be guided by recognizing the two chief errors that have been made. Cheap-money policies by the Federal Reserve System do not produce a sustainable prosperity. Hiding the cost of mortgage subsidies off-budget, as by imposing “affordable housing” regulatory mandates on banks and by providing implicit taxpayer guarantees on Fannie Mae and Freddie Mac bonds, does not give us more housing at nobody’s expense.

Which is exactly the story as far as I understand it, too.  The whole thing is really enlightening, with lots of facts and figures, without going too far into inaccessible ivory tower thinking.  Tenure the Hayek Professor, I say.

Some fools at UCL, led by the usual left-wing brigade, have embarked on a campaign for “Free Education”.  My position on fees has been documented before: let universities charge what they’re worth.  Now, being an economist, I looked at that and was bemused.  Knowing only that, in a competitive market, price = marginal cost, that means that, given a price of zero, the amount of money the universities would spend on the education will be… zero.  Students campaigning for worthless education, eh?  Novel.

When I aired this opinion, I was told that progressive taxation levied on graduates would be the way forward.  OK, that’s exactly what I debunked before.  That means that students that work hard and get something out of their degree (i.e. the professionals and entrepreneurs hit by the progressive tax rise) will be punished.  Those that won’t get punished would be the people that go to university and do nothing with their degrees: drop-outs and lay-abouts.

So let’s look at the two countries in the developed world with the highest drop-out rates, Italy and France: where a whopping 66% and 45% of students don’t finish their degrees respectively.  What also marks these countries out?  That’s right, they have the lowest levels of OECD-recognised graduates in their population amongst the G7 (12% and 16% respectively), the highest taxes (54% and 49% of GDP), and not a single university in the top 25 in the world betwen them (the UK alone has six; the USA has fourteen).  Oh, yes, and both have open education: you apply, you pay a nominal fee, and you’re in.

The Facebook group has a seriously long-winded introduction that debunks and refutes none of these points.  It makes no attempt to answer criticisms of free education or argue for it except in the blandest of left-wing ideological tones:

Now is the time to ask questions about university and how we fund it. What is education? Can you put a price on learning? And is education really the right place for the market? Education is and must remain a basic and fundamental right which should allow the “full development of the human personality”, as enshrined in the UN Declaration of Human Rights. Education should be free and accessible to all students including international students.*

Those that can’t put a price on education don’t know its value, because they don’t get anything out of it.  The rest of us go to university with the primary purpose of making sure we realise the value of education.  The people behind these campaigns are ideologically-driven nut-jobs that don’t care about students’ welfare or education level: only about the content of the UN Declaration on Human Rights.  More than anyone, they’ve shown us just the sort of people that aren’t capable of benefiting from a university education!

* Does it need to be shown that international students have to pay fees? They’re frigging international: they’d come here for our “free” education, and certainly NOT stay for our exhorbitant progressive taxes!

Check out the Gender Analyzer, which predicts what gender the author of a blog is.  It’s quite accurate (most female bloggers that I’ve tested, who are obviously in a minority, are given as female).  Let’s see…

Well, the appliance of science to the blogosphere tells me that there’s a 100% chance that Students4Freedom.com is written by a man.

And to think I don’t even swear that much…

Over the past few weeks, my flatmates’ understanding of Austrian economics has improved immensely, as I’ve aired my grievances with, well, pretty much everything we study as economics students.  Friedrich Hayek, Ludwig von Mises, Murray Rothbard: Austrianism is one of the great strands on the libertarian movement.  It is also, as an economic doctrine that eschews complex and rarefied mathematics in favour of reasoning that anyone can understand.*

Anyway, I for one see most economic matters from an Austrian perspective.  One of them is the role of knowledge in the economy.  Basically, it’s a good thing, as it results in prices that reflect the value of investment at that time.  One of my flatmates, being new to Austrian economics, has set about trying to find exceptions to information being bad.  He gets a lot of ammunition, because he’s studying the economics of information.  So far, as with most economics, all of the ammunition has been duds.

Knowledge in the health insurance market, he says, would eliminate the market and make everyone worse off.  My answer was pretty obvious before he’d even finished: “The insurer might be worse off, but it’ll be a damn sight better for the guy that finds out he’s going to get cancer to spend his money on going to a doctor, rather than going to an insurer.”  That’s the best his lecturer could come up with.

Another issue he’s challenged me with is the so-called Hirshleifer Effect.  It’s an observable effect that states that the ‘parachuting’ of information into the money markets might lead to net welfare loss, because people can’t hedge against changes if risk of that change is already priced into markets.  Eh?  So what?!  If the risk is already priced into markets, that means that that market will be more efficient, because prices in the real economy, and hence welfare, will reflect actual future demand more closely.

Non-Austrians will point to the fall in values that sometimes occur because of the information being realised, rather than its content.  This was the case when the Bank of England announced rates cuts on a Tuesday in November, rather than the traditional Thursday.

But this observation could easily be explained by the risk introduced by the government in announcing rate changes early.  The market had previously used the information that interest rates were set on a Thursday to organise themselves and set prices (so-called “deadline effect”.  However, by announcing a rates decision on a Tuesday - whether it had been up or down - that information was destroyed, leading to information of the economy declining and welfare suffering as a result.

The extension of this is a repudiation of ad hoc government: the sort that plagues this country.  Instead of assessing policy properly, it is set on the fly as day-by-day responses to newspaper headlines.  This unnecessarily creates uncertainty, removes information, and has, obviously, led to some pretty darn stupid policies.  If only Gordon Brown listened more to the Austrians.  Here’s an idea, Gordo: if you can’t stomach the 1,300 page Human Action, how about a little Road to Serfdom?  But, please remember: it’s a warning, not a blueprint.

* For those that need a primer, the von Mises Institute has a mailing list that sends out a daily article from the Austrian perspective.

Can’t believe I missed this festive day last week, but, seven days late, I’m celebrating probably the most retarded idea I’ve ever heard: Buy Nothing Day.  Apparently, people are supposed to cast off the “corporate shackles” and not buy anything for a day.

Now, I’ve observed these people for years, and I’ll let you into a little secret.  Just before those protesters leave the Body Shop with their piece of mango-infused hypocrisy, and just after they give their hard-earned money to the shop attendant something amazing happens: both say ‘thank you’.  What the hell?  BOTH say thank you?!  But… that means that both parties did each other a good deed… at the same time.  How?!

Well, the customer wants the product (or smug satisfaction if they went to Body Shop) more than the money.  And the shop attendant would rather have the money than the product.  So, by engaging in mutually-consensual acts, all parties are happier as a result, otherwise they wouldn’t consent to it.  When a crook mugs you, you do not thank them, and when government mugs taxes you, you don’t thank them either.

On their website (I’m not fucking linking to it), they have a poster advertising their little protest:

Don’t know about you, but it looks like a dead-end to me.

With the maelstrom of the government’s recession raging all around, these idiots complaining of over-consumption (what would Keynes say, eh?) are drowned out by the sound of firms going under.  This Christmas, stop being so fucking selfish and go out and spend a lot of money buying stuff at the unseasonal sales - and you’ll make the shop owners a lot happier.  Then, you can give them as gifts to the people you love: another consensual act.  And that’s the message of capitalism.

Is it me, or do I miss the bloody point of these interest rates cuts when they’re coupled with the government’s “veiled” threats to nationalise the banks if they don’t pass on the whole of the cuts to mortgage borrowers?

The theory is that cutting interest rates will spur consumer spending to get us out of Brown’s recession.  That requires people that wouldn’t ordinarily borrow money to do so.  Those people are people to whom the cost of lending to is too high - after all, banks are always trying to sucker poor people into loans they can’t afford, right?  To a bank, the cost of lending is two-fold: the cost of their customers defaulting and the cost of getting the money.

Well, as more poor people are encouraged to borrow, the probability of customers defaulting increases.  Otherwise, the rates cut wouldn’t be achieving its goal of increasing demand.  That is, if the banks pass on the entire Bank of England base rate cut to their customers, their revenue will have decreased by the Bank of England rates cut and their costs will have decreased by the rates cut LESS the increased probability of people defaulting.  So… that’s the government telling banks to make a loss?!

But our political masters aren’t too worried about banks losing money.  After all, banks are swimming in it nowadays, aren’t they?  If I were cynical about the state, I’d say the government is deliberately making banks fail just so they can expropriate rescue them…