We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.

Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

Of competition, rent seeking and the UK government broadband project BDUK

A comment piece over at the Guardian has compelled me to write my first post on this fair blog. I have been mulling over the idea about writing something about rent seeking and fixed lined broadband rollout in the UK for some time, but BT’s great broadband scam has pushed me over the edge finally.

The Guardian writer blames the market, competition and Margaret Thatcher for the fact that BT has won all of the government contracts to build fixed line broadband in the UK.Though most Guardian writers blame this triumvirate for most things, this writer makes a tenuous link between BT and competition ultimately calling for the renationalisation of broadband in this country. (He sounds much like Susan Crawford over in the US, but that is a post for another time) But what he gets so very wrong about blaming competition for the inability for the government to rollout broadband is that it is BT’s rent seeking behaviour coupled with a centrally planned project that has contributed to the so far unsuccessful UK broadband rollout project called BDUK.

There are so many reasons that BDUK has not succeeded that it hard to know where to begin. But for the purpose of this post it is important to understand that the broadband targets and rules for entering into procurement as a provider changed over the course of the last three years. Initially, the project was to provide next generation access (NGA) to 100% of the UK by 2015 and now it may only succeed in delivering 90% by 2017. Fibre to the home (FTTH) was the initial target and eventually fibre to the cabinet (FTTC) became the final and less optimal solution. The regional areas that divide up the entire BDUK project into smaller, sub-project areas were far too small to achieve economies of scale. The list goes on, but changeable rules against which companies and consortia were to pitch to be on the ‘approved’ list meant only risk and uncertainty for those businesses. In the end only BT survived and thus BT became the monopolist provider.

But if I ran BT I would make sure that I was the only procurer on that list through whatever means possible, including rent seeking. And that is precisely what they did. OFCOM, the telecoms regulator, DCMS, the department responsible for BDUK and BT have a cosy relationship with advisors and consultants making the rounds in contracts and positions among all three. But BT has a massive incentive to ensure that their fixed line broadband network became the only networked used to rollout new broadband services. If other vendors were chosen for BDUK then this old network, made up of traditional copper lines and some fibre, would be completely bypassed thereby rendering the network useless. Quite high stakes if you are that behemoth BT. Even an outsider’s attempt to petition DCMS to include wireless in its definition of ‘next generation access’ failed because it would mean using a new and probably non-BT network. Not allowing wireless as one of many ways to achieve rural broadband access is essentially absurd in this day in age. But the BDUK project stipulated only fixed line Internet access at delivery.

So while we do indeed have competition in urban areas and many rural areas for broadband access services (as most services like TalkTalk rent BT lines at wholesale prices) we have very little competition in broadband infrastructure and that is an important difference. BT has played their cards well in a centrally planned system created by civil servants who have made policy in order to achieve the delivery of fixed line broadband Internet access. No one person is to blame, but through bad policy making, EU regulations, rent seeking by BT, and no comprehensive oversight, we have a project that will be delivered well over time and budget and paid for by the taxpayer. True competition in services, diversified Internet access types, and infrastructure would have delivered far richer choices. Currently BDUK remains Hayek’s worst nightmare.

Samizdata quote of the day

Central banks cannot solve the problems they created any more than an arsonist makes a good firefighter.

Steve Baker MP remembers the words of Steve Horwitz, to help him explain why he is not impressed by the latest doings of Bank of England Governor Mark Carney.

The IEA is not happy either.

Bravo Marmite

Marmite… a dark pungent paste in a jar that has been separating men (of all ages) from mere boys (of all ages) since 1902… has once again shown they are The Food of the Gods.

Marmite TV advert draws widespread complaints. A “high volume” of complaints was received after the advert aired on Monday. A TV advert in which a spoof rescue team saves “stricken” jars of Marmite from homes where they have been neglected has prompted 278 complaints.

Some 250 complaints were received by the Advertising Standards Authority in just 24 hours, following the advert’s debut on Monday evening. Those who objected found the advert “offensive” and “in poor taste”, said a spokesman for the ASA. Viewers complained “it trivialises the work of animal welfare charities”.

Poor taste? Bah! Off with their heads! Often one can measure a person’s worth by who they piss off, be they Edward Snowdon (PBUHH) or… Mr. Marmite… it has to be Mr. as this is truly food-with-serious-bollocks.

So here you go, Marmite my mate, some free advertising by Samizdata.net.

Indeed some of us take our Marmite so seriously we have sterling silver lids to replace the ugly plastic ones that they have now rather than the earlier rather marvellous metal ones.

marmite_XO_co

I recommend the Marmite XO for that extra Marmite wallop of gastrogasmic goodness, ideally with some really robust Cheddar.

Yes Jimmy, ‘porn filters’ are ridiculous, but…

… this is not really about porn, other than very tangentially. And it is not even about pederasty or terrorism or any of those nasties that we tend to agree are Rather Bad Things and which get trotted out at the first sign of opposition to the rapidly coalescing Panopticon. No, it is about exactly the same things that induced the Chinese state to put the so called Great Internet Wall of China in place.

It is about political control, pure and simple, which a very substantial number of people support. Indeed most people who works in a government job think what they do is sufficiently important to justify having any information that they want about you.

So Jimmy, this is not really about porn at all.

Tory Peer gets it in the neck for stating the bleeding obvious

Top Conservative Lord Howell sparks fury over ‘desolate and uninhabited’ North claim

trumpets the headline in that paragon of Little England statism, the Daily Express. This is because Lord Howell thinks fracking for gas in the north of England would actually be a good idea given that most of its inhabitants are goats and seagulls.

As a quick glance at this map indicates, he called the North of England ‘desolate and uninhabited’ because it is, er, desolate and pretty damn uninhabited.

Jude Leitch, of Northumberland Tourism, said the North East was known for its spectacular scenery, and although it had a history of heavy industry, those areas were concentrated and relatively small. She said: “It’s not hard to refute what he said. He’s probably never been up here in his life.”

Well I have no idea if Lord Howell has ever been up north but I have and yeah, it is desolate and uninhabited for the most part and many of the inhabited bits are ugly as hell. So I am very much in favour of fracking the fracking hell out of it.

Government minister wants British firms to be charities, apparently

This is the headline from today’s Daily Telegraph:

Training and employing British workers is more important than a firm generating profit, business minister Matthew Hancock has indicated.

In the article, the wretched individual goes on to state that his comments should not be seen in the same light as Gordon Brown’s infamous nonsense in favour of “British jobs for British workers”. Well, it certainly looks to anyone with a grasp of language that this man is stating that national origins should count for a lot in hiring, and goes to the extent of saying that choosing a Brit is more of a factor in hiring than whether that person will increase the prosperity of a firm, which is normally why people get hired in a free market.

Ah, I mentioned the term “free market”. Silly me.

Here is some background from his website:

Matthew John David Hancock grew up in Cheshire. He attended Farndon County Primary School, West Cheshire College and The King’s School, Chester. He studied Philosophy, Politics and Economics at Exeter College, Oxford, and gained a Master’s Degree in Economics from the University of Cambridge.

So he read economics, and thinks he knows better than commercial organisations as to whom they should hire.

Matthew’s first job was with his family computer software business.  Later, he worked for five years as an economist at the Bank of England and in 2005 moved to work for the then Shadow Chancellor of the Exchequer, George Osborne.

Blow me down – the man had a stint in the private sector! But that did not last long and soon enough, he was working for the Old Lady of Threadneedle Street, which is now run by a Canadian governor, so presumably he disapproves of his government’s own decision to take a chance on hiring a foreigner.

This man represents a safe-ish seat in West Suffolk, which is near where I come from originally; he loves horse racing and in many ways I am sure he is a splendid chap, a bit of a Tory “knight of the shires”, as he hopes. But the thudding ignorance of his claim that firms should hire Britons first rather than take the “easy option” of hiring foreigners ignores the reasons why firms are doing this. I assume he realises that firms hire foreigners not just because of costs, but due to issues such as behaviour, character, work-ethic, and so on.

We should of course recall that the Tory party – as it used to be called – was the more protectionist force in the past – as demonstrated by the ruckus caused when Sir Robert Peel scrapped the Corn Laws in the 1840s, triggering a split in his party, and at the early part of the 20th, the attempt to re-impose tariffs caused a similar uproar. On immigration, the position has altered over the years: during Maggie’s time in office, and after, Tories were sometimes (unevenly) quite keen to stress how welcoming the UK is to certain people from overseas, not surprisingly perhaps given that several members of the Cabinet and parliamentary party were the descendants of immigrants (Nigel Lawson and Michael Portillo). It is a shame to see zero-sum thinking return to the party under the patrician, “nudging”, government-knows-best approach of David Cameron.

I hope businessmen give this minister a sharp kick in the shins. Better still, it would be no great loss to see his department closed down.

David Botsford, RIP

A few days ago, while I was on holiday in Santorini – one of the Greek islands – I was contacted to be told that one of my oldest friends, David Botsford, had died. He was only 49 years old.

David, a graduate of King’s College, London, is someone I first got to know back in 1988, when he was working at the time for an outfit called Outlaw Films. David was part of that libertarian circle of friends in London that I hung out with (Brian Micklethwait, Antoine Clarke, Tim Evans, Chris Tame and Kevin Macfarlane, among others) in that time. David was not the most high-profile libertarian activist, maybe, but he was certainly one of the most prolific, and insightful, in terms of the material he produced.

In the early 1990s, David decided on a change of career: he entered the field of psychology, and studied fields such as hypnotherapy, using his skills to treat people who wanted to give up smoking, beat stress or eating disorders. Shortly thereafter he went to the US – he held a dual British-US passport – and worked for a while in Los Angeles. He returned to the UK a few years later to develop his work in the UK, and spent a long time living in the Notting Hill area. I spent many happy hours in his company – David seemed to know just about every cool restaurant in the area and, given his interests, he also had a wide circle of friends. (One of them invited me – to his perhaps regret – to play in his cricket team). David was a stage performer. On one memorable night, he gave a stage hypnotism performance in deepest Soho and he also performed such acts in the US, such as Las Vegas, and gave talks to various groups and appeared on television.

His essays for libertarian publications on issues such as gun control, the arts, foreign policy and education stand the test of time. David was also a kind, generous and funny person to know and he was very dear to me and my wife. He will be greatly missed. Later this year, some of us who knew him intend to go to a restaurant and raise a glass or two in his memory.

Put the boot in, Guido!

When I read this

THE country’s top political blogger, Paul Staines – better known as Guido Fawkes – has threatened to sue Tory MP Claire Perry after she alleged he had “sponsored” a hack attack on her website.

… I was moved to say that this Perry is very much in favour of Guido using the courts to kick the living hell out of that Perry, the thuggish ‘Honourable’ member for Devizes.

Put the boot in, Guido!

So I suppose we are about to see how credulous people really are

The dependably nauseating David Cameron is demanding a massive infrastructure for internet censorship… oh to protect the children, of course.

And also of course, this is not really about porn… that is a bare faced lie. It is about political control. The state wants to easily be able to log what you look at and to easily block access to whatever it deems ‘unacceptable. The notion any government can be trusted with the infrastructure to control what people can see is madness.

On the nonsense of corporate “duties” from a Tory MP

Great minds think alike: I had been meaning to fisk Jesse Norman’s recent defence of the idea that companies have wide social and other “duties” – not just to that nasty stuff about doing what the owners want – but Tim Worstall, at his Adam Smith Institute perch, beat me to the punch. (As readers might have noticed, my Samizdata productivity has been hit by my being very busy at work, and, er, lots of trips abroad lately.) Here’s Tim:

Well yes Jesse: but you’re a Tory MP, not a Labour one. You’re not there to defend the idiocies of the past Labour Government you’re there to try to correct them. This part of the Companies Act was deliberately brought in to try and appease the more drippingly social democratic parts of the Labour Party. Rather than now stating that this is the aim and purpose of a company you’re supposed to be shouting from the rooftops that they got this wrong. The point and aim of a company is the enrichment of its shareholders, nothing else. You should be agitating to get the law changed to reflect reality, not accepting the fantasies of your predecessors: otherwise what’s a Tory for if not to be a reactionary? Alternatively, if we’re to have Tory MPs being so drippingly wet what’s the reason for the existence of the Labour Party any more? Who would need them?

Here is Norman’s original article – in the Daily Telegraph – so readers can judge for themselves whether Tim Worstall has him accurately pegged. He has, in my view.

Companies have no broad “duties” if you believe in private sector, and in a civil society based on voluntary relationships. That means if I set up a firm, with capital of mine or entrusted to me by others with their consent, then apart from not breaking rules about force, fraud, etc, there is nothing else one is required to do. Professor Milton Friedman has this all understood years ago. The proper response to calls for “corporate social responsibility” is “fuck off”.

When Norman talks of a “corporate duty” in some broader sense, he makes no attempt, from what I can see, to validate that by reference any fundamental principles. He is, I see, the author of a new book about Edmund Burke, and he uses Burke quite clearly to push against all this terrible “individualism” (ie, belief in personal freedom) and suchlike that he sees as causing all our problems. Never mind that libertarians/classical liberals have plenty to say about the benefits of a community based on voluntary interaction, not coercion. (How many more times does this have to be explained to the dullards who keep banging on about how we are “atomists”?). It is also well worth remembering that Burke was not a “Conservative” in the sense people today understand it; he was “Old Whig” and friend of the likes of Adam Smith and David Hume, and had little time for economic intervention.

To get back on the nub of the tax/company issue, as Tim Worstall says, if big firms are able to use their accountants and advisors to get around onerous local tax laws, then perhaps Norman and his fellow MPs should consider whether to make local tax laws as simple, and as low, as possible. Another point he ought to consider is something that Worstall again writes about on a regular basis: tax incidence. Companies are not people: if you tax a firm’s profits, then those taxes are paid by people in some way. The taxes are passed on in the form of lower dividends, lower capital gains, crappier products, lower wages paid to staff, shoddier products and services, etc. Norman should consider the sensible ideas of the 2020 Tax Commission.

Norman is a member of a political party that, however dimly, ought to be aware of such basic facts. Yes, I know that many of the Cameroons are utterly useless, but there surely are enough bright Tory MPs who can take Norman aside and explain the basic facts of economics to him. I can think of several MPs well suited to the role. Does Norman have Steve Baker’s contact details?

Addendum: I suppose some on the libertarian camp might argue that calls for corporate duties are what you get when firms receive subsidies, privileges from the state of various kinds, soft loans from central banks, etc. But the solution is not to grant these things in the first place. Simple.

Extreme weather – and some thoughts about what publicity stunts do and do not accomplish

Earlier this year, we here in the UK had a spring that felt more like winter. Now we are enduring the frightful ordeal of a summer that is exactly like a summer, only more so. I don’t know about other UK-based Samizdatistas, but this current burst of local warming saps my will to blog. When it is this warm, my idea of fun is not sitting next to a typing machine that happens also to be a fan heater. But I will give it a go anyway, and in a way that doesn’t change the subject from the weather.

Last week, there was a publicity stunt by some lady mountaineers, who climbed up the Shard, to protest against oil and gas drilling by Shell in the Arctic. Measured with a tape measure and a stop watch, media reactions to this escapade say that it was a big success.

Nevertheless, the mainstream media angle on all this may have somewhat disappointed the lady mountaineers. It was: Does This Kind Of Thing Work? Does a bunch of women showing off their shapely bottoms on nationwide television by clambering up a rather irrelevant but shapely new London tower really do much to change opinion on such matters as Arctic oil and gas drilling? That was the BBC’s original slant on this, and I heard the same thing on the Channel 5 TV news in the evening. Maybe I am reading too much into this, but such questions suggest to me a slight pulling back from this argument on the part of the media people, a feeling that a whole generation of broadcasters is detaching itself from a previously definite point of view, the obvious truth of which would have been their starting point only a few years ago, but which they now regard as just another of those arguments that people have, which it is now their job to report rather than to take sides in.

The pessimistic line on this, from the anti-alarmist point of view, is that all that the media people were really asking was: How Can We Best Make Everyone Into Climate Alarmists? Will this stunt accomplish this, or do we need to try other methods? We. They are still all on side with the climate alarmists, but some of the climate alarmists, especially those in the media, are now starting seriously to fret about tactics. But even if there was a big whiff of that about the coverage of this stunt, does not the suggestion that these lady climbers might not actually have been persuading anyone to think differently at least suggest that maybe their team in this argument might be wrong about matters of far greater substance, such as – whisper it ever so quietly – the alleged scientific fact of forthcoming climate catastrophe?

What is not deniable, if you will pardon the expression, is that a libertarian, Simon Gibbs of Libertarian Home, was asked to join in the coverage and say what he thought about it all,. You can listen to what Simon said here, and read Simon’s further thoughts on all this here. It was an email from Simon Gibbs that alerted me to this story. He knows that I am fond of the Shard.

→ Continue reading: Extreme weather – and some thoughts about what publicity stunts do and do not accomplish

Samizdata quote of the day

We are contemplating sanctions for misbehaviour in the healthcare and banking sectors; why not in the energy policy sector?

– Professor Michael J. Kelly, “Prince Philip Professor of Technology”, University of Cambridge, in a letter to the Times yesterday, putting Britain’s energy decision-makers right down where they belong, alongside central bankers, bankers, NHS malpractitioners, etc.. The Times is behind a pay wall, but Bishop Hill picked up on this, and has the whole (quite short) letter.