Britain during the summer is wonderful to visit, and is especially so when the weather is good as it was from mid June to mid July 2003. It is always a pleasure to enjoy free time, to reflect, to read, spend time over newspapers, play golf on new courses, have a few drinks (but never ever to smoke in public), and speak to strangers.
Impressions about the economic and political state of a country are often deceptive, especially when on vacation and you are playing good golf. That being said, the impression I had of UK was that there was oodles of hard evidence that the market economy was delivering the goods. Restaurants were full, cars were new, stores were crowded, the countryside was neat and attractive, house prices were soaring all over the country and people were smiling at their good fortune. The bad news was nearly always about the failure of government to deliver what had been promised. Educational standards are falling, the National Health Service is anything but a service, crime is a constant worry (you are twice as likely to be robbed in Britain than in the US), uncontrolled immigration, asylum seekers, genetically modified crops, and the Iraq War dominate the news.
Government failure is no surprise to libertarians for it is not in the nature of bureaucratic management (and socialism) to serve the needs of customers because it is largely isolated from the consequences of its failures. Indeed, failure is usually seen as a reason for more funding, more power, more control, and more taxation – the failure of airport security prior to 9/11 is a good example. Public schools are bad precisely because they are the biggest socialist enterprise and have no incentive to respond to the wishes of parents.
It is an old story. Capitalism delivers the goods, government provides a thousand excuses for non-performance and its programmes rarely operate in the way they are supposed to run. Capitalism's main strength is precisely that it functions better than all of its rivals when people pursue their individual self-interest. Economic systems that rely on noble purposes and people to be virtuous, socially responsible, and more mindful of the common good than that of their own, will at best bring about mediocrity and stagnation, at worst poverty, disappointment, loss of freedom, repression and grief. Politicians have a tough time understanding this fact of economic life.
Most days I was up early and read exhaustively the varied newspapers that characterise UK. I had a passing knowledge of the most important stories but having time allowed one to read in greater detail about what was going on. Time also allowed me to do things that were a little out of character. For example, in a place called Kenmore in the Highlands of Scotland (highly recommended), after a great round of golf at Taymouth Castle, and enjoying a glass of wine I watched a bunch of ducks at the point where the River Tay leaves Loch Tay. There must have been 50 or so birds, proud mothers and fathers, and lots of ducklings. Occasionally, a seagull swooped down to get one of the babies but was fought off by alert parents. No doubt the same thing happened if rats or cats tried to launch an offensive. No nonsense about weapons of mass destruction here.
A second glass of wine (or was it a third) gave me what really was a common sense insight – ducks are remarkably good and capable parents. They protect their young who are happy to follow in long line swimming proudly behind dad and mom. Now ducks are usually regarded as having inferior intelligence to humans but my wine coloured insight reached the opposite conclusion. Ducks do not require a bunch of bureaucrats to organise their lives; they happily swim or waddle along under their own steam and are contented.
Humans on the other hand, are constantly told by their political masters that they can never be in control of their own lives. Sure, they can buy a car of their choice, watch television, are permitted to buy wine – except before noon on Sunday, and take trips abroad. But the real critical decisions of life – educating children, making provision for old age, deciding which hospital to go to for an operation, whether to extend their house, even how much of their income they can keep – is made by someone else, someone they will never know and over whom they have minimal influence.
Heretical thoughts probably started from reading about an appointment to the Cabinet made by Tony Blair at the end of June. Margaret Hodge was appointed as "Minister for Children" but in the early 1990s, when a local council leader in London, she had presided over a social affairs department that became a front organisation for child abuse and exploitation. Most of the nauseating detail had been exposed by the press at the time, her response being that journalists are low-minded reptiles of the gutter. She was also fond of flying the red flag over Islington Town Hall, keeping a bust of Lenin in her office, and revelled in her nickname "Enver" after the Albanian dictator. In 1996 she wrote a letter to The Times newspaper stating "the early years of a child's life have been seen as the private concern of the parent." Clearly parents, unlike ducks, are not up to the job of raising their own children and needed the sensitive hand of Enver Hodge. When confronted with her appalling record of neglect she confessed that mistakes had been made and lessons had been learned. Many commented on the fact that mistakes always seem to be made in the abstract, and if lessons had been learned who were the people who learned them. I doubt if Margaret Hodge was one of them.
A criticism of longer standing was that pensions were in crisis. Companies were closing their final salary schemes, replacing them with defined contribution arrangements, because the Chancellor of the Exchequer had imposed huge stealth taxes on the funds to the extent of 100 billion pounds. Social Security taxes had been raised and with the decline in world stock markets many people who had looked forward to reasonably prosperous retirement were becoming apprehensive about the future. A proposal to raise the mandatory retirement age from 65 to 70 ostensibly in order to defeat ageism was greeted with suspicion because voters believed this was trick by lying politicians to raise the state pension age because social security costs were ballooning out of control. By some strange co-incidence, politicians had voted to increase their own pensions by 25%. Rarely did the pensions debate get anywhere close to tackling the fundamental problem – how is Britain going to support its ageing population?
Whilst pensions are a hot-button issue, the icon of the National Health Service always seems to be at the top of the list of voter concerns. The Chairman of the British Medical Association stated that doctors are compelled to manipulate politically imposed targets to the detriment of patients. Such targets were inspired by the desire to show that increased taxation was providing an improved medical service and not disappearing down a rat-hole. Unfortunately, queues for hospital beds grew ever longer. Long queues exist because the British health care system is constructed on foundations of sand. It violates the elementary economic principle that medical care provided at below market rates creates shortages, and shortages are simply another name for queues.
Whilst protection of children, pensions, and medical care are critical issues it was something of a surprise to learn (or maybe it wasn't) that Parliament decided to spend a huge amount of time debating a ban on fox-hunting, a tradition of the British countryside for centuries. Left-leaning labour townies go into fits of rage when country people do things that do not meet with their approval. As F.A. Hayek put it so pithily: "A society that does not recognize that each individual has values of his own which he is entitled to follow can have no respect for the dignity of the individual and cannot really know freedom." Traditions of toffs on ponies cannot be tolerated under any circumstances and this is not a bad way to divert attention from failing hospitals and schools.
One British tradition that shows no sign of being ended is that of high taxes. Tax Freedom Day fell on June 2, 2003 and is likely to be June 7 in 2004. Tony Blair who promised that Labour would not increase taxes has somehow managed, by means of fiscal stealth, to increase by a million the number of Brits who pay the top rate of income tax of 40% (much lower than the 59.6% in France, or 48.5% in Germany). Teachers, dentists, pharmacists, and engineers who believed the promises of the Prime Minister now find themselves in the tax brackets of movie stars and financial tycoons. It was not meant to be like this when the Labour Party promised that: "there will be no return to the penal tax rates that existed in the 1970s." Well surprise, surprise. Politicians hate the idea that the only way to prosperity is to save and invest and pay attention to sound financial principles such as low taxation – they long for magical and painless short cuts in order to create an earthly paradise for their supporters such as subsidies, cheap money, borrowing and the idea of spend spend spend.
Unlike River Tay ducks, many Brits hand over an ever increasing chunk of their incomes – approaching 50% – to a benevolent government who then spends it, after taking out a hefty handling fee. They are given pocket money, much like a seven year old, and allowed to buy beer, or clothes, or washing machines, or a million and one other gadgets and conveniences of modern life that are in great abundance, thanks to the miracles of the free market economy. The really critical purchases of education, health, or safety are simply too complicated for ordinary people to be trusted with. What is the State for if not to act as your kindly yet firm teacher, health instructor, personal trainer, financial adviser, and nanny? Leaving the individual freely to make decisions for himself is not appropriate as he needs the guidance and instruction from his betters because he is not competent or intelligent enough to run his own life.
Of course, criticism of the appointment of "Enver" Hodge, pensions, the National Health Service, complaints about taxes etc., are merely pinpricks compared to the pounding Tony Blair took, and is still taking, about the reasons for going to war with Iraq. Blair bashers focussed on the so-called "dodgy dossier" (dodgy is English slang for mendacious). Did the Prime Minister and his Machiavellian director of communications, Alistair Campbell, "sex up" intelligence reports in order to con Members of Parliament to vote for war? He convinced Parliament that Iraq would be able to summon up Weapons of Mass Destruction (WMD) in 45 minutes and attack UK. Everyone and his dog is desperately looking for them, and any army private who does will immediately be promoted to general. The UN weapons inspectors spent 111 days searching for WMD, and the allied forces are now approaching 130 days without any success.
Like his namesake at the New York Times, Jason Blair, did Tony Blair lie to the British people and to Parliament about the reason for going to war with Iraq? Increasingly, it looks very much like he did, and the beleaguered Labour Government resembles a gang of shifty crooks caught in an act of burglary. The needless deaths of many in the military, and the suicide of a public servant caught in the web of mendacity simply underscores how tragic this whole misadventure is. Denis Healey, a former Foreign Secretary and Chancellor, has publicly called on the Prime Minister to resign if WMD are not discovered. The longest-serving Member of Parliament, Tam Dalyell, has proposed his impeachment. Even the former actress Glenda Jackson has called on him to quit. Six months ago, Tony Blair was unassailable; today few people trust his word and his Government.
Amidst this political turmoil, Tony Blair took off for Washington to address Congress and receive a Congressional medal. He was also going to plead for the extradition of two English prisoners held at Guantanamo Bay, although few thought he would be successful. It was likely that, for the first time in history, extradition would be refused by the United States government, on the grounds that the detainees are likely to receive a fairer civilian trial abroad.
In UK, I discovered that sound economic reasoning creates opposition and generates insults from political hacks who promise paradise to voters but can never deliver what is promised – too often they produce the exact opposite of what they promise. When political promises clash with economic principles and economists point this out, they are depicted as being hostile, antagonistic, and hard-hearted ogres who fail to understand the benign motives of the political class, and they are accused of being totally opposed to proposals that will make the life of the underdog better. It is fruitless to point out that a government determined to meddle, to keep the lid on information and debate, guarantees incompetence in the provision of public services.
What was needed in UK, I pompously thought, was to separate appearance from reality, and mendacity from truth. Above all people needed to grow up and be more like ducks.
July 23, 2003
