Wednesday, 16 January 2019

Like medieval citadels, great cities fuel social disharmony and division


I've talked before about how the big cities that, at present, drive economic growth, act to exclude people. Or, to put it another way, prevent people from being anything other than 21st century peons trapped in small, crowded apartments that eat up £4 in every £10 they're paid. And worse, unlike the past's rural peons, these new urban serfs cannot settle, opt out of having a family and live a sort of 'kidult' existence that is filled with ultimately unfulfilling fun.

The problem is that, when people travel away from the city so as to have a stake in the nation, settle down and raise a family, they find is difficult to maintain the work they had before and quickly discover that (outside the specially privileged world of public sector professionals) the opportunities in affordable places aren't there. This brings me to this quotation from French geographer, Christopher Guilluy:
All the growth and dynamism is in the major cities, but people cannot just move there. The cities are inaccessible, particularly thanks to mounting housing costs. The big cities today are like medieval citadels. It is like we are going back to the city-states of the Middle Ages. Funnily enough, Paris is going to start charging people for entry, just like the excise duties you used to have to pay to enter a town in the Middle Ages.
Guilluy uses this, in part, to explain the "gilets jaunes" protests in France but also transfers the effect elsewhere - to the UK's Brexit vote, to the election of Donald Trump, and to the new Italian government. While, Guilluy speaks most commonly of the working class, it's clear that the protest movements (whether on the streets as in France or in the voting booth as in Italy) extend to a wider group of those excluded from what I once called "The Great City of the West":
There's no actual reason, other than our sociable nature, for us to live in those 'Great Cities of the West'. Indeed, they're filled with untypical humans. There are the brave few who upped sticks and travelled thousands of miles to live poor quality lives on the fringes of the gleaming, sparkly city hoping for a lucky chance. We've the fortunate beneficiaries of inheritance or beauty who can skim across the surface of the city enjoying its lights and pleasures while affording the means to avoid its darkness. And there's a vast mass of clever, skilled, hard-working people who turn the wheels of the city's economy but can't get a stake in the city, can't find the means to settle and have a family, and who justify this on the basis that they can get to see the beauties in their plays, galleries and stadiums.
Out in the provinces - sneered at by the grand city folk - there's a different culture emerging. In part this is fuelled by anger at the denial of opportunities but it is also about the reforming of community and of a hope that politics will bring the cities to their senses and allow the idea of an inclusive democracy back into our culture. Meanwhile the wealthy elite call for the over 75s to have their vote removed or for people to have to take a test to earn the right to vote - the desire is to exclude the less educated, the old, the working class from power, to return us - in the name of progressive politics - to a world before the extension of the franchise to workers in 1918.

Just as, before the trade unions and their socialist and social democrat party offspring, workers lacked a voice, today people in small town England, in la France périphérique, rust belt USA and Italy's crumbling industrial cities lack a voice. Yes they are working class but it is broader than this, as Guilluy describes:
They tend to be people in work, but who don’t earn very much, between 1000€ and 2000€ per month. Some of them are very poor if they are unemployed. Others were once middle-class. What they all have in common is that they live in areas where there is hardly any work left. They know that even if they have a job today, they could lose it tomorrow and they won’t find anything else.
If the establishments of the west want to avoid upheaval, they need to find a way to respect - listen to, heed - the voice of these people. Above all we need to stop patronising them as the "left behind" or worse and to realise that the great cities of the west will need them. The great and good must stop making the city such a barrier to having a real, cash stake in society.


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Monday, 14 January 2019

No leadership, childishness and deception - how MPs are destroying the trust that's central to democracy


Trust. That's it, the central, essential requirement for democracy to work. People have to trust that their friends and neighbours will behave responsibly and that the people who we send to parliament as our representatives will do, more or less, what they said they'll do. I know, I know, I can hear you: "Simon, what are you drinking, people never trust politicians...": or words to that effect. I suspect, however, that this probably ain't so - there's always been a loud minority who thought politicians were selfish, on the take, charlatans but most people, if they ever gave the matter thought, saw politicians as grand but essentially decent folk.

Yesterday I concluded that we're pretty close to the point where this trust, always a fragile thing, collapses. Three things led me there - watching "Brexit: the uncivil war", seeing interviews with Harlow residents on Sky News and reading Dominic Grieves 2017 election statement. And before we start this isn't about Brexit right or wrong but about whether the people feel able to affect change in a democracy - can trust those they elect to respect how they vote.

I won't go into a whole review of "Brexit: the uncivil war" - suffice it to say that I enjoyed it but felt it was (other than a truly dire scene supposedly set in Jaywick - it's always Jaywick isn't it) too focused on the battle between teams of Westminster insiders rather than on an amazing campaign mostly conducted by regular voters without reference to politicians. It was also spoiled by a silly bit of text at the end suggesting the leave campaign did something evil and malign (it didn't).

Anyway, the important bit isn't the accuracy or otherwise of the drama but the final minutes set in a future inquiry where Dominic Cummings played by Benedict Cumberbatch rants about how nobody had the intelligence, initiative or aspiration to take hold of the 2016 vote and shape it into a real change for Britain. The Cummings character, close to camera, says that a vote to change how we did politics was seen as just something to be managed within the existing political culture. Politicians - leave and remain - were unable to grasp that voters, including scruffy ones in ramshackle shacks by the Essex seaside, were telling us the way we do politics needs to change and that maybe we'd get better government if we paid them some actual attention.

Meanwhile, Sky News had toddled off to Harlow - Essex again as it's not too inconvenient as they can get back to West London to take Jocasta to dance class - where they did vox pops with voters. Sophie Ridge, the presenter, shared clips on social media and these told the same tale as we heard from that end piece in "Brexit: the uncivil war". Politicians are useless buffoons, they need to get on with the job and stop behaving like children. And (trust me on this one) this sentiment is repeated everywhere by leave and remain voters alike. It's accompanied by a growing view that, not only will Brexit not happen but that people will have less power in future because they had the audacity to vote for something their lords and masters didn't want.

Yet despite this, MPs have, time and time again, voted (by slim majorities admittedly) to stop any resolution to Brexit that didn't conform to their view - incidentally, given they are mostly remain supporters, a view that is directly contradictory to the way the majority of the people voted. Every possible variant of legal and procedural sophistry has been employed, all with the intent of stopping the government from implementing the result of the 2016 referendum. And this brings me to the third thing from yesterday because it features Dominic Grieve, one of the leading confounders of that democratic vote in June 2016. There are plenty of others to choose from but I happened to read what Grieve had said to his electorate in the 2017 General Election - here's a chunk:
As someone who has always advocated a close relationship between the UK and the European Union, I accept the result of the 2016 Referendum. I therefore strongly support the Prime Minister’s determination to secure a negotiated arrangement for leaving the EU and for forging a new trading relationship for the future, providing certainty for trade and business whilst giving us control of migration and releasing us from the direct effect of EU Law. I also believe that the people of our country will benefit from a close continuing relationship with a strong EU and I will work to help build these important links for our future. I very much hope, therefore, that the Prime Minister will be able to achieve something close to the goals she set out in her speech at Lancaster House in February.
I challenge anyone to find in this, or indeed in the rest of Grieve's message, anything that justifies how he has behaved in parliament since that election. The address in question - especially given how clear the Conservative manifesto was on the matter - is a colossal act of deception because, as subsequent events have shown, Grieve had every intention of spending the forthcoming parliament manipulating rules and procedures to try and prevent Brexit.

These three examples all speak to the relationship between the electorate and their representatives with the public justifiably exasperated by what's gone on, irritated by the childishness of MPs (and their friends in the mainstream media) and desperate for somebody to grasp the opportunity of reframing the relationship between voter and politician in favour of the voter and away from the tribal elites in the Westminster bubble.

As I said at the start, trust is central to democracy. It seems that, unless something dramatic happens pretty soon, politicians in Westminster, by repeatedly ignoring voters concerns and interests, will finally have lost the last vestiges of respect as well as the public's trust. What will happen at this point isn't clear - I'm not expecting thousands to take to the streets as they have in France but I do expect a new sort of politician - blunt, cynical and populist - to arrive. And the first place they'll arrive is in local Conservative associations.

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Saturday, 12 January 2019

Quote of the day - tax incidence ain't what you think it is...


From John Cochrane's blog:
The top two things our politicians say they want to encourage are jobs and home ownership. Jobs are perhaps the most highly taxed economic activity in the economy, and by this calculation houses come in a close second
So, for all that we want jobs and homes, the tax system makes those jobs and homes more expensive. Cochrane also points out that the incidence of wealth taxes depends on the interest rate - where the level of tax equals the interest rate (or yield or whatever measure of return to property investment you're using) it's effective rate is 100%.

So it makes more sense to tax the returns rather than the sum invested (or indeed its actual, estimated or putative value) and, life being what it is, this is what we do most of the time. Now this might all seem a bit obscure but, if people respond to incentives (like the economists say) then it is the actual incidence of a tax that matters not the rate or the person who writes the cheque.

And, since I'm here and talking about taxes on property, let's talk about business rates. Any, even passing, conversation about business (and especially retail) ends up with a discussion about business rates. Just about everybody says that the tax is to varying degrees unfair, not flexible, and impeding investments. The problem is that every proposal for reform (like this one from Centre for Cities) amounts to tinkering rather than a change to the way in which businesses are taxed.

And we should remember that businesses want to pay less tax because they simply represent a cost to the business with the result that they either reduce returns (see above for why this matters), lower wages or raise prices. As Cochrane pointed out - we want jobs, business and a thriving high street but, at the same time, don't realise that the tax system reduces the incentive for people to do the things that make these investments happen.


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Friday, 11 January 2019

An elite educated bureaucracy makes places poorer...


Or so some research seems to show....
I use a natural experiment to show that the regions of China with over a thousand years of sustained exposure to state-building are significantly poorer today. The mechanism of persistence, I argue, was the introduction of a civil service exam based on knowledge of Confucian classics, which strengthened the social prestige of the civil service and weakened the prestige of commerce. A thousand years later, the regions of China where the Confucian bureaucracy was first introduced have a more educated population and more Confucian temples, but lower levels of wealth.
The crucial point here is about prestige - in a world where the high prestige professions are non-commercial, the endeavour of the brightest to secure that prestige undermines economic development.

Much might be said about the situation in Europe where, increasingly, high prestige jobs are to be found in non-commercial environments, what Deirdre McCloskey calls the "clerisy" - academia, medicine, think tanks, central bureaucracies and a host of grand jobs in what might be called the international third sector. Even within the world of commerce, the prestige lies either with performers or with the administrators of large business systems - we are encouraged to see the creators as the parasites not as the means to provide the goodies society wants.

Thus the debate around the rich and successful isn't, "wow, how can we get more people like that creating value for society" but rather, "why aren't they paying more tax so more of us in prestige jobs can have more power and money". We're more bother by the relatively unimportant question of whether entrepreneurial businesses are paying enough money to the state rather than how we can support them (and others) to deliver more social value through that enterprise, innovation and creativity.

The lesson from history - the Dutch republic, Britain in the 18th century, the USA after the civil war, and places like Hong Kong or Singapore today - is that when doing business is valued by society and those leading is have the highest prestige then economic benefit to everyone is greatest. Sadly, we're in a time where entrepreneurship is disparaged, doing business is characterised as exploitative and non-productive, non-commercial roles are seen as the most important, most privileged.

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Thursday, 10 January 2019

The Cheese Toastie - gateway drug to motorcycle gangsterism


I am grateful that Bristol Council is on the case - what would we do without such folk:
Cheese toasties have been banned from sale in a Bristol park amid fears a proposed hot food van could attract booze-fuelled antisocial behaviour and motorbike gangs.
Where would we be without the sort of councillor brave enough to face up to the Dark Evil of the Toastie. The nation would be riddled with booze-fuelled motor-cyclists and other ne'er-do-wells. Here is our heroic councillor Claire Hiscott:
“It’s right next to Orchard School, which is a challenging school that sometimes has a problem with keeping kids in school. They have to have patrols of staff to make sure kids don’t walk off site. The lure of a food concession may encourage kids to take a little walk. The school has made a lot of effort to encourage healthy eating. We have problems with childhood obesity. Historically we had antisocial behaviour, not just motorbikes, from young adults gathering with alcohol and causing a disturbance."
What a load of nonsense and typical of the attitude of too many councillors (and a fair few local residents) to young people. Do they really think that having a van selling cheese toasties is going to turn sweet innocent school kids into obese, booze-crazed motor cycle gangsters?

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Saturday, 5 January 2019

Don't lock 'em up - prison doesn't work


It is an understandable response to crime - lock 'em up, throw away the key. The problem is that this visceral desire to punish doesn't do much to deter and, so it seem, fails in its most obvious objective, reducing crime:
Current policy debates suggest that state prosecutors may have been a key force behind the historic rise in US incarceration. This paper investigates how state prosecutors of differing political affiliations influence county-level incarceration. Exploiting quasi-experimental variation generated by close elections, I find that Republican prosecutorial offices sentence defendants to longer incarceration spells as compared to their Democratic and Independent counterparts. This increase in incarceration length is driven by longer sentences for both violent and property offenses, and translates into a persistent increase in incarceration. These sentencing and incarceration enhancements do not lower crime at the county level, indicating that, in terms of public safety, the marginal return to the tough-on-crime stance may be close to zero.
OK, it's just one study (and one that's a little too politically-loaded for my taste) but it concurs with findings from less partisan studies that consistently show incarceration, "tough" sentence and rigorous sanctions regimes have negative effects on recidivism. Here's the UK government's findings:
Short-term custody (less than 12 months in prison, without supervision on release) was consistently associated with higher rates of proven re-offending than community orders and suspended sentence orders (‘court orders’)
For this group of criminals, prison just doesn't work. Indeed it doesn't just not reduce crime, it increases the chance that one-time criminals become career criminals. Norway has pretty much the world's lowest rate of recidivism (less than 20% compared to the UK's 70%). The Norwegian approach to imprisonment is part of the reason:
The thinking is that justice for society is best served by releasing prisoners who are less likely to reoffend. The Norwegian penal philosophy is that traditional, repressive prisons do not work, and that treating prisoners humanely improves their chances of reintegrating in society.7 This is achieved by a “guiding principle of normality,” meaning that with the exception of freedom of movement, prisoners retain all other rights and life in the prison should resemble life on the outside to the greatest extent possible.8 Within the walls of Halden, one of the newest maximum-security prisons in Norway, are cells with flat-screen televisions and mini-fridges, long windows to let in more sunlight, and shared living rooms and kitchens “to create a sense of family,” according to Hans Henrik Hoilund, one of the prison’s architects. Prisoners are not left to their own devices upon release, either. There is a safety net. The government guarantees it will do everything possible to ensure that released prisoners have housing, employment, education, as well as health care and addiction treatment, if needed.
I know you're all horrified but shouldn't we look to what seems to work rather than lock more and more young men up in overcrowded, ill-managed, drug-riddled prisons? If community sentences work (i.e. mean less recidivism, less crime and safer communities) we should use them more and, if short prison sentences don't work, we should use them less. We also need to create the space and time to straighten out those who we do lock up and if this means prisons being a more pleasant environment then that's what we should do.

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Friday, 4 January 2019

More on rural decline - Japanese style


Pop-up City report on the efforts of Japanese governments to respond to the challenge of rural depopulation (Japan has a declining population made worse my accelerating migration to the big cities - Tokyo is still getting bigger):
It’s nothing new that Japan’s rural areas are experiencing steady population decline. But the Japanese government’s new measure to fight this trend is as innovative as it is rigorous: giving away houses for ¥0.00.
Whether this will work rather depends on whether the people taking up this offer (and picking up the cost of renovation) are able to sustain their life away from the job (and culture) magnet of the city.

The article also reports on this, very Japanese and decidedly spooky, initiative:
Nagoro is a slowly shrinking village located in the valleys of Shikoku, Japan. Populated by creepy dolls, it might make you question the reality. Its inhabitants left the village in a search of employment or died. Eleven years ago, Tsukimi Ayano returned home to Nagoro. Faced with loneliness, she has populated the village with dolls, each representing a former resident. About 350 life-size dolls currently reside in the village.