So you want to be a NIMBY? Cough up then...

So you want to protect that precious view? Right now what NIMBYs do is put pressure on politicians to stop developers building in that view. Perhaps the answer is that the NIMBYs should cough up?

Last week, The New York Times published a story about the residents of a 12-story loft building in Manhattan's Chelsea neighborhood who, faced with the prospect of a new condo building that would block their view of the Empire State Building, decided to bargain rather than litigate.

The building's inhabitants offered to buy the air rights from their neighborhood developer for $11 million. Residents on the upper floors paid up to $1 million, people on the lower floors paid less, and those on the bottom floor paid nothing at all. People who didn't have the cash to pay their full share relied on loans from their neighbors.

In return, developer Gary Barnett ceded his right to build anything other than a three- or four-story structure on his property.

It's long been true that the only way to save a view is to own that view and full marks to these New Yorkers for stepping up to the mark.

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Something happened - and that something was the free market

Man's natural state is grinding poverty:

Among economists and anthropologists, this is “settled science.” Economists left and right might bicker over minor details, but they agree that poverty is man’s natural environment. As economist Todd G. Buchholz puts it, “For most of man’s life on earth, he has lived no better on two legs than he had on four.” Nobel Prize–winning economist Douglass C. North and his colleagues write in Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History that “over the long stretch of human history before 1800, the evidence suggests that the long-run rate of growth of per capita income was very close to zero.”

For tens or thousands of years nearly all men lived in that grinding poverty. There were little flickers of light showing what was possible - in China, in Baghdad, in Florence - and then, bang, we suddenly and sustainably got rich, dragged ourselves out of poverty, and created the wonders of our modern world from dishwashers to the internet, from recorded music to space travel.

And that bang? It was the liberal enlightenment, the idea that creativity and innovation wasn't the preserve of aristocratic patronage but was for everyone. It was what we sneeringly called the middle class - whether suited banker or white van man - that made that great noise of human improvement. It wasn't government, it wasn't posh landowners, it wasn't socialism, it wasn't a cumulative process of incremental improvement - human betterment is a consequence of freedom - free speech, free enterprise, free assembly, free worship, free trade. Improvement came because we decided people shouldn't have to have permission from their 'betters' if they wanted to try something out.

So if you want to limit freedom - stop folk exchanging freely, prevent people from saying what they wish, halt people's right to gather together, limit what they can believe in and worship - any of these things and you offer future humanity a worse world. Above all, if you think free markets are a bad idea and need limiting, regulating and controlling by our betters, then you offer future generations a less wealthy, less healthy and less happy world.

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On the moral rightness of markets

This quotation comes, via Cafe Hayek, from Pope John Paul II's encyclical Centesimus Annus from 1991:

In this expanding economic community, the pope observed, a market system encourages the virtues of “diligence, industriousness, prudence in undertaking reasonable risks, reliability and fidelity in interpersonal relationships, as well as courage in carrying out decisions which are difficult and painful but necessary, both for the overall working of a business and in meeting possible set-backs.”

Too many people spend too much time trying to tell us that markets are some sort of moral vacuum and that, for all their usefulness, markets are essentially a necessary evil. Or even that they don't exist at all.

Truth be told markets are, as Pope John Paul II recognised, one way in which humans interact and for most exchanges in most markets the principle of the handshake applies. I recall a friend who provided legal support for the Showman's Guild describing a land deal between two showmen and how the seller, having spat on his hand and shaken with the buyer, would not even meet with another man who wanted to offer more money.

When I think of all the transactions and exchanges - whether or not money is involved - that rely on a high degree of trust in the other party (trust taken on faith not through some lawyer's contract), it seems to me that the market is a powerful force for goodness, for those virtues the late pope named. There are billions of exchanges and transactions every year, all taking place in a market, and a vanishingly small proportion of those events are corrupt, exploitative or unethical. It is, perhaps, this truth that we should focus on rather then the dry, utilitarian benefits of the market the economics text books speak of.

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Why we need faith in The Market

Now Thomas (also known as Didymus), one of the Twelve, was not with the disciples when Jesus came. So the other disciples told him, “We have seen the Lord!”

But he said to them, “Unless I see the nail marks in his hands and put my finger where the nails were, and put my hand into his side, I will not believe.” John 20: 24-29

This is the dilemma of faith. You will, I'm sure recall when Arthur Dent is introduced to the babel fish in Douglas Adam's 'Hitchhikers Guide to the Galaxy':

The speech patterns you actually hear decode the brainwave matrix which has been fed into your mind by your Babel fish.

"Now it is such a bizarrely improbable coincidence that something so mind-bogglingly useful could have evolved purely by chance that some thinkers have chosen to see it as a final and clinching proof of the non-existence of God.

"The argument goes something like this: 'I refuse to prove that I exist,' says God, 'for proof denies faith, and without faith, I am nothing.'

'But, says Man, the Babel fish is a dead giveaway, isn't it? It could not have evolved by chance. It proves you exist, and, by your own arguments, you don't. QED.'

'Oh dear,' says God, 'I hadn't thought of that,' and vanishes in a puff of logic.

'Oh, that was easy,' says Man, and for an encore goes on to prove that black is white and gets himself killed on the next zebra crossing.

And, as many have observed, faith does matter because it represents the unprovable premises on which we build our arguments. We are right to, as St Thomas did, doubt but if we only accept that which is before our eyes, what we can see, feel, taste or hear, then we deny things that are really important - love, honesty, creativity, hope.

Here, in a critique of something called 'neoliberalism' (the existence of which I doubt but that's another story) we see the denial of the transcendent, refusing to accept something exists because it is abstract, incorporeal:

The market, which is essentially a useful tool (and like all tools limited) has been converted into a false god The Market. Markets make poor gods for many reasons, but primarily because they don’t exist. A market is a space, not a thing; it is a vacuum; it is a space within which human beings trade stuff. Trading stuff is also useful preparation for doing other stuff, like making, healing, building, growing and creating. The market does not do any of those things - people do - but the market helps people by because people can use trade to get the useful things they need from others. Markets can help people be productive, but they are not productive in themselves.

So The Market exists because people want to exchange. The accumulation of all those exchanges, however conducted, is The Market. And the benefit we get from this exchange - trade as the writer rightly calls it - is that we can focus on the things we're best at, on what David Riccardo called comparative advantage. Here's Don Boudreaux:

...the only economic reason for trade is that each of us produces some goods or services at costs lower than the costs that our trading partners would incur to produce those same goods or services. That is, each of us has a comparative advantage in supplying the goods or services that we sell to others, and a comparative disadvantage in supplying each of the many goods and services that we buy from others.

So The Market does exist (whether or not you use capitals) even though we can't take your hand and plunge it into the spear wound so as to prove its existence. Even where, as with some very important things like health and housing, the state has tried to control (or even abolish) the market, The Market still exists. The best examples here are criminal markets. We have for all sorts of 'good' reasons made some products illegal yet there still exists a market for those products - this is the dilemma of public health's approach to smoking. We are nearing the point, may even have reached it, where further increases in the price of tobacco only act to increase the illegal part of the market - with all the risks associated with criminal markets (we see these with the market in illegal drugs, for example).

The question that our writer poses (although mostly fails to answer) isn't whether or not markets exist or even whether they are a good thing. Rather the question is whether we should 'worship' those markets. Since there is, so far as I'm aware, no actual ritual worship of The Market, I have to assume that this is meant metaphorically and refers to the viewpoint that The Market is the most efficient way to allocate scarce resources. But is the belief that the market, under most circumstances, is the fairest means to allocate resources an act of 'worship'? It may be faith just as a belief in the efficacy of democracy, government or the 'rule of law' is an act of faith but it is not worship.

The debate that prompted the comment about markets began with a simple question: if it wasn't the liberal belief in markets that led to the fastest decline in absolute poverty the world has ever seen then what was it? Inevitably this discussion became one about the UK rather than the world and, as these things do, resulted in the assurance that inequality and poverty are essentially the same, and that government is the primary agent of poverty reduction (more specifically that taxation is essential to poverty reduction).

As a conservative I am not a market fundamentalist but I do not believe that, in the long run, taking money forcefully off one set of folk to give it to another set of folk represents any sort of solution to poverty. I'm also a pragmatist and this means that, given the evidence, open markets deserve our support as they are better able to meet human needs than planned systems managed by government. This doesn't preclude regulation or even direct government provision, it merely recognises that we have to balance the social benefits of such actions against the disbenefits of interfering with the market.

We live in a world largely created by the action of markets, by that specialisation that is central to Adam Smith's ideas and to the concept of comparative advantage. The Market is not an end in itself worthy of worship but rather, for all its abstract nature, a means by which we make for a better world. Without our faith in the efficacy of markets there would be no specialisation, no free exchange and less innovation. Believe!

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It ain't broke, it just needs some love and attention: the case for more conservatism

I have heard it stated — and I confess with some surprise — as an article of Conservative opinion that paternal Government — that is to say, the use of the machinery of Government for the benefit of the people — is a thing in itself detestable and wicked. I am unable to subscribe to that doctrine, either politically or historically. I do not believe it to have been a doctrine of the Conservative party at any time. On the contrary, if you look back, even to the earlier years of the present century, you will find the opposite state of things; you will find the Conservative party struggling to confer benefits — perhaps ignorantly and unwisely, but still sincerely — through the instrumentality of the State, and resisted by a severe doctrinaire resistance from the professors of Liberal opinions. (Lord Salisbury, Speech to the United Club 15 July, 1891)

The central orthodoxy in European politics is that, while global markets can and do deliver improved lives for everyone, this only happens because of the benign guidance of non-market authorities, which most of the time means government. You can, I guess, call this the 'mixed economy' although this definition would be very different from the one I was taught in 'A' Level economics back in the 1970s. There is a dominant view that markets fail either by not providing for everyone or else through the money not 'trickling down' to the ordinary person (presumably because footballers keep their millions in a huge vault that they fill with golden bling).

Since this economic debate was conducted at the margins - on the basis of degrees of government or central bank interference in markets - the need for distinction in politics sought out other less economic and more social aspects of life. The only challenges to the economic orthodoxy came from the discredited Marxist left and a sort of grumpy old man tendency muttering how it was better when we actually made stuff. As a result the left/right distinction became more about what's now called 'identity' politics - in short the centre-right may have adopted centre-left economics but they're still racist, sexist pigs.

This was the reason for the decontamination that David Cameron commenced (prompted, in case we forget, by the 'nasty party' jibe from our current prime minister). Huskies and hoodies were hugged, ties were loosened, sleeves were rolled-up and Tories started talking about feelings. And it sort of worked as the party's leadership became less wooden, more urbane (and urban) and less obviously inspired by the golf club bore. The result of this was that the 'nasty party' attack could only attack marginal differences in tax rates, welfare policies and government fiscal strategy. In 2015, regardless of noises off, the Labour Party simply offered the same as the Tories but with a nicer paint job.

All of this is something of a roundabout way of saying that the issue with identity politics is that, as several people have observed, it created the strategy used by what's entertainingly and weirdly called the 'alt-right'. Spend five minutes with an open mind looking at 'alt-right' and 'neo-reactionary' comments and you'll see that it is based on grievance. It doesn't really matter whether the 'white working class' (I actually saw this made into the acronym WWC in a sociology journal) is justified in its grievances, they exist and are driving a political shift in politics. The noises say to the centre-right and centre-left - "look, you listen to black grievance, Muslim grievance, gay grievance, trans grievances - to a thousand different cries of pain about discrimination - when do white grievances get a hearing?"

The owners of identify politics - let's call them the 'cultural left' - respond to this voice with 'racist', 'xenophobe', 'mysogynist' (often with some justification) and accuse that voice of creating these feelings. And then stamp on anyone who suggests we might take a pause and look at whether what we're doing in social policy isn't bringing a lot of people with us or, indeed, making much sense. The centre-right, terrified by the return of nasty party allegations, rushes to line up behind the orthodoxy of identity politics with its 'protected characteristics' and strategies for 'inclusion' based on that Fabian mythology of group adherence.

This is the sort of myth-making that tells a black boy from Bradford's Buttershaw estate that he has more in common with a black youth in a Missouri suburb than with the white lads from the same estate. That somehow a false politics of demography matters more than a real economics of place. These myths mean that the white lads (not all of them, any more than it's all the black lads) look around for somewhere that gives them an identity, a group to join, a gang. Crypto-fascism - the "alt-right" provides just such an identity.

So long as this myth of identity - defined by manifest characteristics rather than the person - remains, we will see politics as a contest between identities, as a sort of equalities top trumps. Yet when we turn to the people who claim they study society, what we get is little different from the grievance-mongering that typifies more populist discourse. For sure it's mixed in with the left's favourite words - neoliberalism, capitalism, hegemony and so forth - but the thrust of modern sociology is entirely predicated on the idea of the group as society's building block. The students of society are no longer servants of human knowledge but campaigners promoting that same Fabian myth of identity - the progressive idea that we are defined by the groups we belong to, that we have little or no agency and that advertising, businesses and the media shape who we are.

The 'alt-right', the Trump campaign, UKIP, Marine Le Pen - these people aren't (as they claim) kicking out at identity politics but trying to sign the right up to that progressive myth of the group being more important than the person. And, in Fascism (proper Fascism not the left's preferred cartoon of Fascism), these people have a model - "everything within the state, nothing without the state" cried Benito Mussolini as he nationalised and protected industry, brought trade unions into government and championed the idea of a triumphant Italy. The central principles of Fascism - action not ideology and the corporate state - depend on the idea of society as a collection of groups not as a happy coincidence of individual interests.

If we want to combat this insidious repetition of early twentieth century progressive politics then we need more conservatives and more emphasis on the core ideas of conservatism in our examination of society. The idea of personal responsibility, the importance of family and community, and a belief in real voluntary action are the characteristics that define a response to crypto-fascism and the myth of progressivism. Sadly much official response to the racism and white supremicism of the 'alt-right' is to double down on multicultarism, to call for restrictions on speech or to try and get all those nasty voices safely banged up in jail. And this just won't work - just look at how doing this to Geert Wilders in Holland is fuelling his politics.

One criticism (especially from those who want the centre-right to be aggressive, interventionist or radical) of conservatism is that it's too accommodating, too malleable - 'Butkellism' they sneeringly called it, managed decline. But right now what's needed is to get the eggs to market unbroken rather than to get the eggs there quickly. Believing that sad little reactionaries with an internet connection represent an existential threat may inject a profound urgency to politics - especially if your progressive utopia seems shaky as a result - but a mature politics would see that the world isn't really threatened by a few folk with unpleasant ideas and snazzy flags. And the only mature politics on offer right now (at least in the form that meets the needs of the time) is conservatism meaning that, here in Britain, the Conservative Party needs to stick right with that idea, to keep it front of mind and not get sidetracked into protectionism, intervention and micromanaging the economy.

Voices from left and right try to tell us that the old model is dead - neoliberalism, globalisation, call it what you will. This argument is made without justification or much evidence and wider heads need to point out that this terrible policy platform has delivered rising wealth, increasing incomes and a billion fewer people in absolute poverty. The bus is in good order - what's needed is a little repair here and there, some fine tuning, a tweak or two, perhaps some bits of new upholstery and more polish, but it doesn't need a new engine or a new transmission. Doing this job is what conservatism does best - carefully adding small improvements while preserving the best of what's already there and recognising that people value, even love, the old tried-and-tested ways.

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If a Marxist can understand the difference between being pro-business and pro-market, why can't many Conservatives?

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I mean it's not hard is it? Here's Chris Dillow:

...we must distinguish between business and markets. Business is about hierarchy and control; markets are about dispersing power. Markets are about competition, whereas business tries to suppress competition and seek monopoly power; the last thing big business wants is creative destruction. A pro-business government would seek to protect incumbents through red tape that strangles small firms; tough copyright laws; generous outsourcing and procurement policies; and tax breaks. A pro-market government would do the exact opposite, and do everything it could to promote competition. Governments can - and should - be anti-business but pro-market.

I'm a marketer. My professional colleagues have a simple job - to assist our clients or employers in creating monopoly (or die trying). Sometimes the marketing budget is used to lobby governments or regulators to change rules to limit competition (agriculture, banking, energy) and sometimes the marketing budget is used to try and persuade consumers that there isn't any alternative to the clients product (food, detergents, beer). Trust me on this folks, the former is a hell of a lot easier than the latter.

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Rags, swag and pet food - Gentrification, markets and the grocery store...

Scott Beyer writes about gentrification:

If you’re an urban pioneer who settled in downtown Cleveland sometime in the past decade, you’re probably happy with the neighborhood’s progress. Even as the city as a whole has continued to lose population, the central area has revived thanks to an influx of young and educated newcomers. Downtown Cleveland right now has its highest-ever population, with more than 13,000 residents and lots of new housing developments on the way. There are more than 4,000 hotel rooms, with another thousand expected by 2016. And residents today enjoy a more walkable neighborhood, as new restaurants and bars open around old cultural institutions like the theater district. If you are looking for a large grocery store, however, you’re still out of luck.

Partly this reflects the high income of those gentrifying folk plus their preference for eating out - not so much at fancy sit down restaurants but at those street food places, coffee shops and bars that sell slices of cured pig. But it also raises a question about the economics of food retailing and the truth that retailers (especially convenience retailers) are entirely driven by 'counting chimneys' - or whatever the urban high rise equivalent of 'counting chimneys' might be. If there aren't enough people living in the area, there won't be a grocery store.

The response has been subsidy or financial incentive (or even worse - and UK planners are very guilty here - use class constraint). The problem with this approach is that it doesn't change the economic reality - if there aren't enough customers spending enough money then the store will close once the incentive dries up.

The answer - rather than chasing national retail chains or hoping for some hipsterish spin on the corner shop - may lie with something that can be great but is too often neglected by local authorities: the market. The problem is how to strike the balance between the municipal market's traditional customer base and the wealthier, trendier folk following in the wake of gentrification.

The commodification of the shopping experience, with its attendant fetishization of taste and provenance, is still in its early phase in Kirkgate Market, as indeed it is in other British markets. In this sense, Kirkgate and other similar markets are on the gentrification frontier.

Part of the irony here is that the 'hipster' is searching for authenticity, for the sense of discovery and difference, yet doesn't realise what is the authentic and genuine in an English municipal market (swag, rag and pet food as one trader described it to me a few years ago).  I have criticised Leeds Council's approach to Kirkgate - preferring long leases and high rents in the Grade I listed part of the market buildings thereby creating something of a false environment. This is not because I'm against long leases or higher rents per se but because it is very clear that this strategy doesn't work.

Given that markets are in publicly-owned spaces (whether open air or covered) and not operated for profit, there is the opportunity to both support the traditional low income customer base (who want swag, rag and pet food) and also to encourage new customers - whether from new immigrant groups or from those trendy gentrifying sorts. In and around Bradford's Oastler Centre (I still think I was wrong to agree to changing its name from John Street Market) we can see this mix in play as the old mix of stalls (meat, fish, greengrocery, clothing and cafes) is supplemented by stalls serving the new immigrant communities - the spice stall, the stalls catering for African, Philipino and middle-eastern communities. What has yet to happen is for new places to open that complement the customers served by the bars and cafes opening in adjacent streets.

But I'm not here to talk about Bradford's regeneration but to look more generally at how gentrification delivers both benefits and problems. The benefits come from the investment and from the spending power of a wealthier customer base -- no-one can deny that this can, and does, transform places. But the downside is that the improvements are all kecky-pooky. We get nice bars, cafes and specialist food or clothing retailers but the everyday stuff of the high street - grocery, hardware and so forth - doesn't arrive or at least doesn't arrive so quickly.

As Scott Beyer concludes (after two decades of gentrification) in Cleveland where the first general grocery, Heinen's, has opened:

Retail options are now focused around a few scattered nodes, namely the East Fourth Street pedestrian mall, the 5th Street Arcades and the Warehouse District. For the neighborhood to be truly livable, say Starinsky and others, the city will need to fill in the gaps with additional retail options. Attracting the right mix of stores will require continued focus by public officials and private groups alike. But downtown residents will no doubt look at the opening of Heinen’s as a crucial step in the right direction.

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In which I agree a little bit with Owen Jones

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It's OK folks, I've not turned overnight - as if in some Kafka-esque horror - into a socialist. But I think that Owen Jones, Boy Socialist has a point when he talks about the elite and what the Americans would call 'corporate welfare':

Who are the real scroungers? Free-marketeers decry 'big government' yet the City and big business benefit hugely from the state – from bailouts to the billions made from privatisation. Socialism does exist in Britain – but only for the rich

Now our youthful leftie then goes on to spoil his argument a little by missing out on some of the corporate welfare but his points have some merit. Indeed, I would go as far as to say that Owen's criticism of what he calls 'privatisation' also has merits.

The point however relates to a different cause than Owen suggests and the solution lies in less socialism not more socialism. The problem with what Owen calls privatisation is that it is nothing of the sort. Privatisation involves taking a state-owned monopoly and placing it - usually through sale - into an open market environment. We did this with telephones, gas, electricity and water with considerable success (although the state kept its fingers in the pie by fixing all these markets in one way or another - mostly to the benefit of businesses rather than consumers).

Issuing contracts to run trains on a state-owned rail network is not privatisation. Nor is outsourcing the collection of municipal waste or the commissioning of hernia operations. This is just the state opting to buy rather than do itself - for it to be true privatisation you have to change the customer - to have to have a system where consumers make choices in a free (or relatively free) market.

However, to return to Owen Jones, he is wrong when he argues that big business rejects 'statism' but right when he points to the benefits that the grandees of big business get from big government. The switch to a smaller state with more of what we call 'public services' delivered through the market simply doesn't suit those powerful businesses that deliver those public services on contract. Or indeed the equally large businesses that fund those businesses allowing them to compete for large public contracts.

However, the problem here isn't just the fact that public services are outsourced but that the market is, mostly because of regulation and legislation, seriously constrained. Owen points to the big public services contractors like Serco, G4S, Atos and Capita and makes reference to the 'Big Four' accountancy firms. What he describes here is a marketplace constrained by the scale of the contracts and by the specification of those contracts. While the Transatlantic Trade and Investment Partnership (TTIP) would partly open this market - and some of the regulations, its main outcome for public services would be opening up EU 'markets' to large US contractors (and vice versa).

The problem is that, so long as people like Owen insist that services are delivered through a planned system rather than a market, the producers - whether state employed management or the managers in private contractors - will fix the system in their own interests rather than in the interests of the consumer. And while there are areas - basic scientific and medical research, for example - where only the state will invest, in areas where a market can operate there will be more investment under capitalism than in a state-directed monopoly.

Owen Jones is right to identify corporate welfare as a problem but completely wrong in offering a 'solution' that merely transfers the self-interest to the managers of state enterprises. If Owen wants real change he needs a system where the self-interest is transferred to the consumer of the service - you and me, the public. And this system - in most circumstances - is called a free market.

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The case for cheap food...

The map above (you can view a bigger version here) shows the proportion of household income spent on food and the incidence of malnutrition in those countries. As a visual guide to the politics and economics of food it's pretty telling - simply put, places with the highest proportion of income spent on food are the places with the highest incidence of malnutrition.

The other stand out feature is just how little the UK and USA spend on food - less than 10% of household income (the difference between the UK and Scandinavia, however, can probably be explained by the latter countries taxing food). This is one of the greatest achievements of the past hundred years - from a situation where a third or more of income was spent putting food on the table to one where it costs less than a tenth of income. From a time when the diseases of malnutrition were commonplace to one where they are very rare.

There are two central features to this achievement. The most important is that we are, by every measure, significantly better off. The richest tenth of 100 years ago would be blown away by the wonders that are available to the poorest tenth today - things that we so take for granted we consider them essentials. This is what capitalism and free markets have brought - not just higher incomes but a bewildering variety of goods and services on which to spend those incomes. So when high-income left-wing writers attack neo-liberalism or 'market fundamentalism' they wish that future generations won't see progress and improvement. Worse George Monbiot and his sort would condemn billions living in those purple and brown circles above to a life of poverty with no prospect of escape. The choice for me is simple, you have free markets or you have permanent poverty for the mass of people.

The second feature behind us only spending a tenth of our income on food is the industry that makes and distributes the food. Those same high income left-wing writers will quickly condemn high volume food processing and sophisticated distribution for the terrible sin of bringing cheap food to people with less income. For that is what this industry does and it does it efficiently and effectively. When we look at nations with price fixing, over-regulated food retail and nationalised distribution we see people spending more of their income on food and many there being unable to get enough to stave off malnutrition. Think of India with its high skill industries, its space programme and it nuclear bombs, plus over 40% of its population suffering from malnutrition in some form. While levels of income partly explain this, the sclerotic and over-regulated retail distribution sector also drives up food prices for the poorest.

Perhaps in the UK we can afford food snobbery and the indulgence of expensive food but for much of the world the mass production of protein dense cheap food is essential. And this means a system of free markets and trade. The approach preferred by development organisations (and too many governments) of using subsidy to sustain subsistence farmers just above starvation is morally indefensible. Indeed, Oxfam and other development NGOs should be at the forefront of calling for more open trade, more free markets and less regulation. That these organisations aren't champions of neoliberalism represents a complete failure to meet their mission of alleviating poverty.

We do not get cheap food by digging wells for subsistence farmers, we get it by opening up markets to a sophisticated industry able to grow, process and distribute high quality food at a fraction of the cost the local, controlled and officious systems that dominate the sector across the parts of the world with the highest proportion of income spent on food. If you want less starvation, less poverty and healthier people everywhere then you want cheap food - and cheap food comes from free markets.

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A housing observation worth remembering: expensive markets build little housing

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Especially for people who think planning isn't most of the problem.

Although the real world is a lot more complicated than that, a simple scatterplot makes the point: expensive markets build little housing. Every metro where the median price per foot is over $200 has added housing at an annual rate of no more than 10 new units per 1,000 existing units since 1990. Conversely, no metro that builds a lot of housing is expensive. 

So the divide widens - wealthy New Yorkers (or Londoners, for that matter) use their position to elect people who promise to build absolutely nothing anywhere near them.

The whole review - loaded with interesting stats (if you like housing and/or the US economy) is well worth a read!

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A Hungarian market

Market Hall in Pest

Food markets are great places, filled with great smells and atmosphere. Plus of course the food! And the municipal market in Budapest (for purists, the market is in Pest rather than Buda) is a magnificent example, both for the building and for the produce.

Here's the entrance:

Nearly as good as Kirkgate Market in Leeds and, although you can't see from the picture the roof has the wonderful patterned tiling that is a feature of Hungarian buildings (known as Zsolnay). Inside is a world of paprika and vegetables worthy of a king:

And:

Do pay a visit!

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Food poverty is a failure of government. Capitalism is the solution.

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I'm a capitalist. A proud capitalist. I believe that, without capitalism, we'd be poorer, less healthy, shorter lived and less happy. The evidence of the past two hundred years tells me this is so.

The thing about capitalism, about those free markets, that neoliberalism is that it celebrates everything that is good about people. I know you've been told by your teachers and by the man on the telly that capitalism is all about greed and rapacious exploitation. But they are wrong - capitalism is about exchange, cooperation, creativity and, above all, foregoing something now in the anticipation of more tomorrow.

I am always curious when people seek affirmation of their mistaken belief about capitalism in what they term 'market failure'. By this, they don't mean that the market actually stopped working (markets just don't do this) but that the market didn't deliver the outcome they desire. So it is with food banks. We are told that these little local institutions are a consequence of capitalism's failure because it has failed to put food on the table of some families.

Except this isn't the case at all is it. Food banks are a consequence of the failure of government not the failure of capitalism or the market. Look at those figures from the Trussell Trust - over half of those arriving for support are doing so because the benefits system has failed them in some way. So the market (a generous, charitable market in this case) steps in to provide - for we should be clear about charity, it is a private matter driven by the energy of people who want to help not by the direction of the state.

The second important lesson in this is that people's generosity is made more effective by the success of capitalism. All those people can afford to forgo something in order to help others have dinner - if we'd not had that neoliberalism we would still help but the help would not be enough. Children really would go without rather than getting food.

We have still got poverty - and be clear that poverty is absolute material lack not some abstract measure of inequality. But we are able to respond to that poverty both by urging the government to act and also by doing something ourselves. Even if that something is as little as giving some tins of beans and a bag of pasta to the food bank. However, if we want to eliminate that poverty - not just through relief but forever - we need to support capitalism because that is the best, we could say the only effective, route from poverty to comfort.

In an inverted way the wealthy and powerful can afford to reject capitalism - they're already on top of the pile. For the poor, the market and its freedoms should represent the route out from not knowing where tomorrow's dinner will come from. Sadly, some of those wealthy and powerful protect their wealth and power by telling the poor their state is due to freedom and the market rather than the reverse. Yet every exchange in that free market adds value whether it's a gift freely given, a bartered exchange or a cash transaction. Those who try to stop this liberty are the true creators of poverty, people who have the good things using their power to prevent others using capitalism to getthose good thing.

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On liberty and poverty...

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We are frequently told that intervention by government is necessary for the elimination of poverty. And even that this poverty is a consequence of inequalities or other misfunctions of the market.

Here's a quote (via Don Boudreaux) that questions all this, rather suggesting that economic liberalism is the route to eliminate poverty rather than the mercantilist, directed economy preferred by our masters:

If bourgeois dignity and liberty are not on the whole embraced by public opinion, in the face of the sneers by the clerisy and the machinations of special interests, the enrichment of the poor doesn’t happen, because innovation doesn’t.  You achieve merely through a doctrine of compelled charity in taxation and redistribution the “sanctification of envy,” as the Christian economist the late Paul Heyne put it.  The older suppliers win.  Everyone else loses.  You ask God to take out two of your neighbor’s eyes, or to kill your neighbor’s goat.  You work at your grandfather’s job in the field or factory instead of going to university.  You stick with old ideas, and the old ferry company.  You remain contentedly, or not so contentedly, at $3 a day, using the old design of a sickle.  You continue to buy food for your kids at the liquor store at the corner of Cottage Grove and 79th Street.  And most of us remain unspeakably poor and ignorant.

This is the thinking that gives us the Oxfam approach to international aid - keeping subsistence farmers as subsistence farmers through grant aid. It also underlies the idea that rich people are rich because poor people are poor - therefore you remove money from the rich to give it to the poor and everything is fine. Markets aren't seen as social, engaging and cooperative things but as exploitative. But the examples cited - banks, farming, energy, housing, healthcare - are the very areas where government intervention and regulation is greatest (ergo where the efficient operation of the market is most compromised).

Hardly a day passes without a new call for regulation - to make prices lower, to protect inefficient distribution systems, to reduce competition, to do a multitude of things vaguely defined as 'protecting consumers'. And each of these intervention makes the market less able to work, less able to make its magic, ineffective at doing what it does best.

And the result of all this fussing, all this knowing betters, all these attempts to fix what isn't broken? Stuff is more expensive and because it's more expensive there is more poverty.

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Local multipliers are something of a myth

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Trendy regional economic development folk like to tell you about "the multiplier effect" arguing that buying locally means that more money "stays in the local economy". We are told - mostly without any real evidence - that this multiplier effect is the magic formula for making poor communities less poor, that it explains how paying higher benefits improves local economics and is the reason why inefficient traditional high streets are better than supermarkets.

Here's an example of this mythmaking from New Start magazine:

Working with the Centre for Local Economic Strategies, Preston Council is researching how much of the procurement spend of institutions – including Preston College, the University of Central Lancashire and Preston Council itself – actually stays in the local region.

‘The findings so far suggest that each institution spends less locally than you’d expect’, Whyte says. ‘There’s scope for us to improve that by looking at how to maximise local spend and supply chains and if there are any gaps in the local market, think about what we could do to fill it.’

The Evergreen model fills those gaps through a network of co-ops supplying food, energy and laundry services to local institutions. Preston Council is considering emulating this approach and has undertaken a number of initiatives to boost and expand local coops, including setting up a Co-operative Guild network.

Sound great doesn't it? But what it covers up is a fundamental factor about local preference - it distorts the market and, in doing so, it raises prices. If local suppliers in Preston know that they won't be squeezed out by a supplier from distant Burnley or, god forbid, Skipton then there will be no need for them to keep prices under control.

Thus we witness the essential fallacy of the local multiplier - the gain made in keeping money circulating locally is taken up in higher prices. It is, at the local level, essentially protectionism - great for the businesses that benefit but awful for the consumers who don't. The money may be circulating for longer but the buyers are paying more than they would be if the system were a free market. There is no gain.

And this is before we start talking about the opportunity cost of public spending:

It is quite misleading to leave public policymakers with the notion that their spending is not at the expense of the private sector because it may be autonomous or have multiplier effects

There may well be a local multiplier but these strategies to promote it are not only ineffective but probably damaging to the local economy (and certainly an impost on consumers).  Apparently though, this is "new economics" and we should be excited:

Until recently experiments in local economics were small-scale and peripheral. But the failures of orthodox approaches are leading even the most successful local economies to find new ways to boost jobs and revitalise communities. With a paucity of ideas and support from central government local areas are now abandoning laissez faire for more interventionist approaches.

Welcome to the latest in a long line of failed and failing regeneration strategies!

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A useful reminder of why we're so much better off than we used to be...

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It's those evil markets again:





With thanks to The Whited Sepulchre for the link.
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Why does Bradford Council want to close its wonderful market?

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It is pleasing to see - how rare this is - a national newspaper finding wonders outside of London and the Home Counties. And even more delightful when the wonder is in Bradford:

Oastler Shopping Centre, Bradford Bradford is a melting pot of cultures and the centre’s covered market reflects that; its stalls are packed with specialist foods from all over the world. There are cured meats and cheeses from Italy, Polish delicacies, jars of sauerkraut, Caribbean products such as yam flour and palm oil, and plenty of freshly ground spices at my favourite stall, Spice World.

Yes folks that's our market - what used to be John Street market, the place where Mr Morrison had his first stall. And it is a great place, filled with difference and interest - an escape from the sterilised sameness of the supermarket and the shopping mall.

Bradford should be proud of this market - it should be on the front cover of the glossy brochures. More than any other bit of our City Centre it tells the story of the town and holds out hope for the future.

So it will come as no surprise to my readers to hear that - just as was the case with Queen's Road Market at Upton Park - the Council sees the market as a development opportunity. The "preferred option" (what a deadening phrase) is that the two City Centre markets are merged. Not on the site of John Street but in the Kirkgate Centre. The land at the top of town between John Street and Hamm Strasse would land a great big "for sale" sign - ideal, say Bradford's regeneration, bosses for a supermarket or for housing.

In the 1990s Bradford Council - for no good reason - closed down West Yorkshire's last specialist food markets, Rawson Market and James Street Fish Market. They dumped the stallholders in a temporary market (having previously promised them a new market hall) and left them to struggle and for most to close.

It seems that the Council is set on repeating the error - of closing down something good and special on the promise of something better. But 'something better' this time is just a big supermarket!

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In which Bradford Council shows little interest in Bingley's future....

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Bingley Market has been struggling. Despite the location in the fine new square, the market has suffered from the lack of footfall in the town. And from Bradford Council's lack of interest in the market - indeed in the idea of markets as a permanent feature of a town rather than as a flashy gimmick for a festival day.

Some business folk in Bingley would like to take on the market - give it a real boost and try to make it work free from the attentions of council busybodies:

Richard Holmes, who manages the 5Rise shopping centre, design firm boss Richard Tempest and market trader Dean McNally had proposed running the setting-up of stalls and collecting of rents themselves as a means of securing the market’s future and saving the Council some £40,000 a year in costs

Great news surely? Local people keen to take control of a local facility and save the Council some brass? The Council have bitten these business folk's hands off?  Er..no:

‘Any relinquishing of the market operation would require a Council decision and would have to go out to tender rather than just handing the operation of the market to just one group’

What nonsense - the Council has no absolute requirement to put business of this sort out to tender merely to have identified particular reasons why not and to have explained how the market has been tested.

It seems the Council would prefer to see the market die a slow death rather than respond to a positive offer from local traders. Pretty typical. And rather sad.

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In which North Lincolnshire Council bans shouting in Scunthorpe Market...mad!

The "one pound fish" man is something of a market legend but the idea that traders call out their offers is as old as markets.

But over in Scunthorpe local council officers have sensitive ears. That calling out is now to be curtailed because apparently it is bad for us: 

...strict rules on 'calling off' detailed in a council traders' charter have led to a greengrocer being taken to court, banned from his market for three months and hit with a £980 legal bill. Simon Stanley's offence was to shout out his prices at his indoor market stall.

Apparently North Lincolnshire Council has been bunging out fines and warnings to traders because calling out might upset other traders! The offending charter can be read here - all I can find relating to calling out is this:

You (and your employees) must not:

• Engage in any banter with shoppers and colleagues that causes a nuisance or annoyance to other traders

There are no specific regulations regarding the pitching of prices or offers and it appears that enforcement is entirely at the discretion of Council Officers. The reports suggest that there are specific rules relating to individual markets but these are not available on the Council's website.

Unfortunately, North Lincolnshire Council have chosen not to explain their policies and the manner of their enforcement. The reports from traders appear to be that jobsworthiness has taken over from good management but this might just be the innate grumpiness of the market trader. If it isn't, perhaps the Council should apply the spirit of its Charter and work with traders rather than treating them as a management annoyance.

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Libertarianism is a political programme not a set of economic policy options

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The thing with criticisms of libertarianism is that people fail to understand that it is a political project - a desire to break the state and rebuild a free society - not an exercise in economic choice-making. Hence this:

...if Johnson had been president in 2008, he would have allowed the U.S. financial system to collapse and the country to fall into depression. And if he became president now, he would do his best to strangle the tepid recovery we are enjoying and turn it into another severe recession.

Perhaps but the author is trapped inside and can't see the label on the jar that says "Government Jam - contains no freedom". As with other proponents of national account mathematics as a replacement for economic thinking, this author cannot see that the supposed "solutions" from the US government (and for that matter our government here in the UK) merely stir the 'Government Jam'. Voices will say that lessons have been learnt and that the banks will be controlled but is this not simply to repeat past errors?


Firstly, why is it said that banks cannot be allowed to fail? Are these institutions of state or businesses? If they are the former then why were they allowed to operate outside the direct control of the state? And, if the latter, why are the rules different from those applying to other businesses? If we believe in a free system, then businesses - including banks - must be allowed to fail. Those who argue otherwise do not support or believe in freedom and might as well just toddle off and join the Marxists.

Secondly, when did we decide that the government's job was to "run the economy"? This viewpoint now dominates economic thinking - or rather what passes for it within the corridors or power (and the organs of crypto-fascists like Bloomberg). Again, if we believe in freedom then it is mistaken to believe that government can "run the economy" without curtailing that freedom. And, moreover, the idea that something as complicated as the US economy can be "run" by anything or anybody is hubris. Yet the view that the economy is an institution as opposed to a system still corrupts our thinking:

Speaking in purely descriptive and functional terms, the distributive institutions of society are what makes any given bit of money “your money.”

The flaw in this argument is the same flaw that drives the economic policies of national and international governments and organisations - that the economy is an institution to be managed not a system to be used.

Thirdly - and finally - this entire argument echoes this famous dictum:

"All within the state, nothing outside the state, nothing against the state."

Without the state there can be no freedom. Without freedom there can be no prosperity. Therefore the state must be everything. Today this is achieved through dominating consumption through public spending and through the exercise of regulatory control rather than through the more brutal methods preferred by the man whose words are quoted above. But the object is the same - a directed, corporate state under the control of technocratic experts.

In the end libertarianism is a political project setting itself against the established institutions. And it does so because those institutions corrupt the effective operation of the free system. For sure, the proponents of state orthodoxy claim that we are not to be trusted with free enterprise, free trade and free speech (merely moderated shades of these things).

If you reject this system of the world - controlling but failed once and failing again - then you must argue either for the forcible end of free markets or for the advance of liberty. There are some - proponents of the idea that all the money is government's bounteously scattered upon the infantilised masses - who want a totalitarian state of courageous proportions.

Libertarianism is a political idea not an alternative approach to the failed economics of the establishment. If people fail to appreciate this and treat it as just another set of policy options then they are missing the point. The banks should be allowed to fail because to bail them out is an act of corruption, the protection of the wealthy from the consequences of their mistakes. Government's exist as protectors - guarantors if you will - of rights and freedoms not as managers of the economy.

I remain sceptical of this creed - it tips a little towards an anarcho-capitalism I'm sure can't work - but I'd rather take the risk of heading this way than remain in the seemingly inevitable spiral towards state control that current policies imply. I do not wish to live in a world where liberty and choice are limited by government - doled out like sweeties as a way to keep us content but removed whenever those choices or liberties threaten the institutions where power sits.

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Crying foul at supermarkets won't save the High Street. Getting the offer right just might...

Skipton High Street - success in a small town with three supermarkets

In an article containing a vaguely linked set of slightly left-wing presumptions, John Harris in the Guardian explains how the High Street is “under attack”.

Now, dear reader, set aside images of tripod-like Martian war machines stomping into Cheam and Cheltenham or perhaps sinister masked ninja figures rolling grenades into Marks & Spencer and turning over benches or plant pots in the Arndale. No we’re talking here about those besuited plutocrats that the Guardian so hates (bejeaned, Tuscany-dwelling plutocrats are, of course, fine).

The truth is that big business has failed us, twice. First, while distant high street landlords endlessly put up rents, the boom years saw the accelerated replacement of independent shops with the chains whose names – Game, Peacocks, JJB Sports – denoted the stereotypical clone town. Soon enough, the same firms became bywords for the aftershocks of the crash – and left behind the retail equivalent of scorched earth.

Sadly for Mr Harris, the truth is a great deal more prosaic that this – the High Street is dying because people prefer to shop elsewhere. And where they don’t prefer to shop elsewhere, High Streets – or more to the point, town centres – are not dying.

Perhaps Mr Harris should take a trip to Keighley (I know John, it’s in the North) and walk around this pretty ordinary town counting the empty shops. Sadly for Mr Harris’s thesis he won’t find very many. Indeed, if he walks down Cavendish Street, he’ll see an eclectic mix of shops. For sure, there’s a ‘cash converter’ sort of place and a couple of charity shops. But in amongst there’s an old-fashioned cobbler, an independent toy shop, a gift shop or two, a hairdresser and – wonder of wonders – a hardware store run by a man who actually mends things!

All this in a town with three supermarkets (five if you include Aldi and Iceland, six if you include the wonderful Shaan’s Asian supermarket) – it seems that, if you get the environment right and the offer right, town centres can succeed. And that having supermarkets isn’t the death knell for the High Street either.

Mr Harris spends a deal of time championing negative campaign groups such as Tescopoly rather than asking what might be done to improve and develop – even save – the town centre. We should bear in mind that the fastest growing retail sectors are on-line and factory outlets. Even further from the town centre than the terrible Tesco or the sinister Sainsbury. Places that – despite Mr Harris’s worst fears haven’t killed his “adopted” home of Frome.

Frome has seven – yes folks, seven – supermarkets (Sainsbury, Tesco, ASDA, Somerfield, Iceland, Lidl and Co-op) as well as:

...a town centre that has the rare luxury of scores of independent shops.

The truth in all this is that not only is the negative impact of supermarkets overstated (there is a negative impact but it’s on jobs and secondary grocery outlets, the corner shop, rather than town centre comparison shopping) but this is yesterday’s battle. Today we should be thinking about the role of town centres where comparison shopping has moved on-line.

A while ago I wrote about how our view of town centres has to change:

The driver to the success of Main Street isn’t the shop – although to hear us talk about town centres you would think that – it is the relationship we have with that place and the space it provides for the events and activities of our lives. In Bradford, when Pakistan win at cricket, hundreds of fans head for the local centres. Not to shop but to share their happiness at victory.

Yet we distrust such a use for the spaces of our town centres. Many of us grumble about public drinking, about young people gathering together, about hen parties and stag dos. And we certainly dislike political campaigns and religious promotion (unless of course it’s an official and state-sanctioned occasion) – to the point of complaining about these activities.

To make town centres work we need to start thinking about them differently:

1. places of performance – planned or otherwise
2. centres of culture not temples to shopping
3. a locus for excitement and discovery rather than the workaday
4. as venues for communal celebration, sharing and festivity

In the end, town centres have to be wanted. Not because campaigners have driven away choice but because people want to go there – to shop, to eat, to promenade, to listen, to watch, to sing. The negative attitude of John Harris and his sort won’t change a thing. What will change the town centre is making them places that people – old, young, rich, poor – want to visit. Places of leisure and pleasure - centres of delight, the focus of fun.

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