Thursday, January 03, 2013

Foreign aid? It's a cynical, ruthless and self-indulgent con job says scathing British study

David Cameron’s controversial foreign aid target is a costly ‘con job’ designed to make the Conservative Party seem more caring, a study warns today.

In a scathing assessment, the respected centre-Right think tank Civitas accuses the Prime Minister of using billions of pounds of taxpayers’ money to ‘rebrand his party and cement the coalition with the Liberal Democrats’.

The study warns that the wasteful Department for International Development is almost beyond reform and suggests it should be effectively shut down.

It says future aid spending should be handled by the Foreign Office, which takes a broader view of Britain’s interests, including trade.

The study suggests that a third of Dfid’s vast budget should be handed to the Ministry of Defence to pay for ‘dual use’ equipment such as helicopters and ships that could be used in emergency relief missions as well as combat.

And it calls for Mr Cameron’s ‘exorbitant and self-indulgent’ target to spend 0.7 per cent of Britain’s income on aid to be scrapped, saying there is no evidence it will help the world’s poor.

The findings come as ministers prepare to increase the aid budget by a staggering 30 per cent in the coming year in order to meet the Prime Minister’s target.

Total aid spending will rise from £8.65billion in the 2012-2013 financial year to £11.3billion in 2013-2014 – an increase of £2.65billion.

Today’s 250-page study will make uncomfortable reading for Mr Cameron, who has stuck to his pre-election aid pledge despite imposing austerity measures on virtually every other area of public spending.

The book, by journalist Jonathan Foreman, questions both the value of the extra spending and Mr Cameron’s motives for ordering it.

Mr Foreman says increased aid spending has been used by the Prime Minister to ‘detoxify’ the Tory image, describing it as ‘one of the most expensive marketing campaigns in history’.

He accuses Mr Cameron of ‘taking advantage of the real generosity of the British people’, adding: ‘A set of policies trumpeted as manifesting generosity is in fact a cynical, ruthless and morally reprehensible con job pushed by marketing gurus for whom their real-world effects in the underdeveloped world are largely irrelevant.’

Mr Foreman also suggests that Britain’s political elite, who all back the aid increase, are more interested in helping the poor abroad than at home. ‘Such people are perhaps more likely to engage with poor Africans and South Asians on their holidays than they are to encounter needy people in their own country,’ he writes.


Loan sharking: A brief defence

by Sean Gabb

The British Government has announced it will cap the rates of interest on the loans people take out to tide them over till payday. It will amend the current Financial Services Bill to give the planned Financial Conduct Authority the power to limit charges.

Now, some of the interest rates charged do look astonishing. The loan companies that advertise on Channel Five all charge about 2,000 per cent. Others are said to charge as much as 4,000 per cent. The last time I borrowed money, I paid five per cent. I avoid going into debt on my credit cards, because of the 22 per cent charged on them. It may seem heartless to defend the right to charge very high interest rates - especially as these are charged to the very poor, who then have trouble getting out of debt. However, limiting the rate of interest they can be charged is not the way to help the poor. Let me explain.

I will assume a reasonably open market in loans. We do not presently have a completely free market - lenders must be registered under the Consumer Credit Act 1974, and this Act and the common law do not allow complete freedom of contract. Even so, there are many lenders, and there is no evidence of systematic collusion. This being so, the analysis of interest rate formation given in the textbooks does apply fairly well to the actual world.

The demand for loans is determined by a combination of forces. At the commercial end of the market, there are calculations about the marginal productivity of capital. At the consumer end, there is how badly people want the things that loans will buy.

The supply is also determined by more than once force. Most fundamentally, there is what the Victorian economists called the “price” of money, and is nowadays called time preference. Even assuming zero risk, people will tend to give up present use of their money only if they can look forward to a return on it. For example, seen from today, £100 is worth more to me today than a year from today - I might be dead in a year, or the pleasure I can buy next year might seem rather shadowy compared with what I can buy now. If an extra £5 is the minimum that will persuade me to defer use of my £100, then the price of my money is five per cent. There are other considerations. This price of money will be different according to how much present use is being deferred. Also, most people will save something even without a positive return. And, of course, in the absence of a proper gold standard, and often for long periods, the monetary authorities are able to create loanable funds out of thin air. But price, or time preference, is an important underlying determinant.

We must then take account of risk. The reason I can borrow at about five per cent is because I have a known record of paying my debts. And, if I cannot pay them in future, I have assets that can be seized after the appropriate legal action. The reason other people are charged much higher rates is because they have a poor credit history. Or, if they have no history, they fall into one of the categories of people who cannot easily be made to pay their debts. These categories include the young, those without assets, habitual defaulters, those who are able to move about the world or to disappear without trace, and the generally feckless.

Loanable funds are perfectly mobile. A lender can do business with people like me, or with young men without assets who have already been made bankrupt at least once. He will expect to walk away from either class of deal with the same overall return. If lenders can make more overall from this second group, they will compete with each other for business, until the rate of return has fallen to the same as can be earned on loans to the first group. Therefore, someone who is charged 1,000 per cent on a loan is not necessarily being exploited. He is being charged a premium that takes into account his perceived risk of default.

Therefore also, any cap on interest rates to those at high perceived risk of default will result in a drying up of loanable funds. As said, these funds are mobile. They will move out of markets where overall returns are lower than elsewhere. If some people cannot be charged 1,000 per cent on loans, they will not be able to borrow at all.

Or they will be able to borrow - but not from people in suits who try to collect unpaid debts through letters sent in brown envelopes and through the courts. When these people vacate a market, because of legal caps on rates of return, their place will be taken by real loan sharks - the kind of people who collect debts by threats of violence, and who, because of the risk of punishment, and the limitation of competition, will charge more than the lenders they have replaced.

For this reason, limiting interest rates will not help the poor. Indeed, even without the criminality of the loans markets that emerge in the shadow of interest limitations, this kind of law is bad. A loan is an act between consenting adults. It is of exactly the same nature as any other financial or other transaction. Any restriction in one area on freedom of association will, by example, encourage restrictions in others. It will encourage further state socialism or moral authoritarianism.

This is not to say that all is for the best in the best of possible worlds. The case made above is general. It applies to any particular state of society. But not every society has to be one in which large numbers of poor people are encouraged to get into debts they cannot pay. In England, we have an established church. Its ministers would do more to justify their privileges if they stopped arguing about woman bishops and canting about racial equality, and began preaching the virtues of thrift and sobriety. In other times and places, the poor have borrowed chiefly to cope with natural disaster or to pay grasping tax collectors and landlords. In modern England, they borrow to buy things they cannot normally afford, or are not willing to buy after saving up for them. So far as they do not spell out the obvious truths of life, the religious and moral leaders of this country - and not only in the Church of England - are failing the poor.

Then there is real action the authorities can take to reduce dependence by the poor on credit. In this country, tax is payable on incomes of just a few thousand pounds. Shelf-stackers in Tesco pay income tax. VAT at 20 per cent raises the price of all taxable goods and services. So do excise duties and tariffs. So called product safety and other regulations generally increase prices, and work in much the same way as a tax.

Worse, there is government rigging of the energy markets, which raise electricity, gas and petrol prices directly, and which - because energy is one of the main costs of bringing goods and services to market - raise virtually all other prices.

According to Christopher Booker, writing, in October 2012, in The Sunday Telegraph:

"Over the next eight years, we need to spend £100 billion on building 30,000 useless, unreliable and grotesquely subsidised wind turbines…. [F]urther billions will need to be spent on new gas-fired power stations - not only to fill the gap left by all the coal-fired and nuclear plants that are due to close, but also to provide ever more expensive, “carbon”-emitting back-up for the times when the wind drops and our turbines are scarcely functioning…. [T]he declared purpose of George Osborne’s “carbon tax”… [is to] double our energy bills."

Giving up on the fraudulent claims about man-made climate change would allow millions in this country to lead something like the lives shown in television advertisements without having to go into debt.

Or there are various forms of corporate welfare, and a tax and regulatory system, that effectively prevent millions of people from running little businesses that would lift them out of poverty. For example, no one nowadays can become a - legal - minicab driver without spending thousands up front on licensing fees and regulatory compliance. Again, no one can become a - legal - childminder without OFSTED registration that closes that occupation to everyone without high standards of literacy and administrative skill.

Or there are the effects of state-sponsored mass immigration. In a free society, there would be few border controls, and there would be some movement of people across borders. What we have at the moment is a system in which, since about 1990, upward of twenty million unskilled and often illiterate - and even violent or subversive - aliens have been encouraged to settle among us. If they work, they drive down wages at the bottom end of the employment market. If they live on welfare, they add to an increasingly regressive tax bill. Whether they work or claim, they raise housing costs by the pressure of their additional demand in a market characterised by both natural and state-made inelasticity of supply.

I repeat, it is not a desirable state of affairs in which large numbers of people borrow at very high rates of interest. But caps on interest rates do not even begin to address this problem. We can accuse the politicians behind this plan of stupidity, or of a cynical shifting of blame for a situation they have done most to bring about. Most reasonably, we can accuse them of both.


Brief Argument for English Independence

by Sean Gabb

The normal English response to Scottish nationalism is to ignore it, or to see it as an irritation, or to try shouting it down with reminders of all that shared history, or to point out the value of English subsidies and to wait for common sense to win the argument. None of these, I suggest, is an appropriate response. None takes into account that England and Scotland are different nations, and that the loudest and most energetic part of the Scottish nation has decided that the current union of the nations is not in Scottish interests. This does not make it inevitable that the union will be dissolved. It does, however, make this desirable. Scotland may or may not have suffered from the union. But the union has done much to bring England to the point of collapse, and it strikes me as reasonable to say that England can never be safe while there are Scottish members in the Westminster Parliament.

Let us take the New Labour revolution as evidence for this. Since 1997, England has been largely remodelled. There are few institutions, or administrative and legal forms, or even assumptions, from before 1997 that now make sense to anyone who has grown up since then. The gutting of the House of Lords, the altered functions of the judges, the laws to regulate political parties, and that allow unelected officials to supervise and even unseat elected representatives, the new criminal laws and new modes of criminal and civil procedure, the appointment of commissar units in every government agencies and most private corporations to impose the totalitarian ideologies of political correctness – these and many others combine to make present life in England very different from anything known before. There is also our continued and even accelerated integration into the European Union. And there has been the state-sponsored settlement of England by millions who are alien in their appearance and their ways. Every thread of continuity between the English present and past that could easily be snapped has been snapped.

Of course, this creeping revolution did not begin in 1997 – it became undeniably evident when Margaret Thatcher was in office. Nor has it been confined to England – every other civilised country has fallen into the hands of a totalitarian elite. There is an attack on bourgeois civilisation in every place where it exists, and the attack is led by those who were young in the 1970s, and has the support of a mass of economic and other interest groups. But, this being said, just think how many of the Labour ministers were Scottish. There was Tony Blair and Gordon Brown, Robin Cook, John Reid, George Robertson, Wendy Alexander, Yvette Cooper, Doug Henderson, and so on and so forth. Below the leadership, an astonishing number of Labour members of parliament or Labour Party officials had Scottish accents. The Labour Party that emerged from its troubles of the 1980s was disproportionately Scottish – and assertively Scottish. Their political ambitions lay in the Labour Party, and not in the Scottish National Party. This did not give them other than a very weak sense of British identity, and gave them no observable understanding of or liking for the English.

Now, the central fact of Scottish history has been English domination. Since the eleventh century, England has been a rich and powerful and unified nation, loyal to a government that, broadly speaking, has been accountable to it. For most of the past thousand years, Scotland has been sparsely populated and without trade. Its people have been divided by language and culture, and by political allegiance, and sometimes by religion. It would be a miracle had Scotland ever managed real independence in these circumstances. It almost never has. The 1707 political union put Scotland under an almost purely English Parliament. The 1603 union of the crowns gave Scotland, after one reign, an English King. Even before then, the most important commoner in Edinburgh had almost always been the English ambassador. Even when there was no English army stationed there, Scotland was subject to varying degrees of rule from London.

In no meaningful sense, therefore, can Scotland be independent so long as it has England as its neighbour. And this is the main significance of the New Labour Revolution, and of the disproportionate Scottish contribution to New Labour. Undeniably, this was part of an overall project to destroy bourgeois civilisation, and understanding it requires a reading of Karl Marx and Antonio Gramsci and Louis Althusser and Michel Foucault, and all the others. At the same time, it was an attempt to make Scottish independence possible by destroying England. Divide England into half a dozen Euro-regions; set these in competition with each other for money and privilege from Brussels; fill the country with ten or twenty million aliens; make it illegal, or at least in poor taste, to refer to an English identity – and the way is cleared for Scotland to be as independent as any other small nation can be.

This would explain the rising levels of Scottish hatred seen by many English visitors. When I visited Glasgow in 1994, there was much good-natured mockery of the English. When I was there again in 1997, I was driven from a coffee bar by the hostility even of the staff. In 2000, a taxi driver had the nerve to claim he was unable to understand my accent. In 2002, when I replied to hatred with hatred, another taxi driver tried to get me arrested for unspecified drug offences. Scottish politicians and administrators cooperate in discriminating against the English. The Scottish lower classes are best avoided.

The reason is simple. If you hate someone, you may want to destroy him. But, if you want to destroy someone, it is nearly always necessary to hate him. The Scottish claim to hate us for what we have done to them. In truth, they hate us for what they want to do to us. Bearing in mind that the Labour Party remains a Scottish front, and that the Conservatives might lose the next election, the 1707 union is actually more dangerous for England than membership of the European Union.

I will ask in passing why so many English Conservatives disagree with this analysis. One reason is a sentimental attachment to facts that have ceased to exist. This leads to what I find the most bizarre claims from Conservative supporters– for example, that the European Union wants to dissolve the United Kingdom in order to absorb England, whereas the European Union is simply part of the Scottish attack on England. A less creditable motive is that many of the Conservative leaders are themselves Scottish, and an ending of the union would reveal them as foreigners in England, and confirm them as unelectable in Scotland.

Most importantly, there are the electoral considerations. In the short term, removal of the Scottish members would bring about a Conservative domination of Parliament. In the longer term, however, removal of the Labour threat would mean that English conservatives were no longer locked into voting Conservative. I do not believe that many of those who voted Conservative in 2010 felt the slightest enthusiasm for David Cameron and William Hague and George Osborne. These got into office only because a majority of the English people feared and hated the Labour Party. Take away the Labour threat, and there would be the freedom to vote other than Conservative in general as well as in European elections. Obviously, union with Scotland benefits the Labour Party. But it also benefits the Conservatives by keeping alive the Labour bogeyman.

I say, then, that the union between England and Scotland should be wholly severed. I say that there should be no customs union or common currency, no rights of movement or of settlement, no shared head of state, no coordination of foreign policy or defence. Scotland and its citizens should become as alien, under English law, as Uruguay now is.

England requires no less. Perhaps, all things considered, Scotland deserves no less.


The Hopes and Fears of All the Years

A good sermon from the Christmas season

At some point, sooner or later, all new parents experience that moment when they realize that this new little life is their unique responsibility. It can be a bit surreal. Holding your little one, it strikes you that a tremendous gift has been given to you, a gift that brings with it significant and life-altering responsibilities. I, who am a bit slow on the uptake, took some weeks to realize that I was not only able but also allowed to bundle up my tiny son in his car seat and take him out of the house to run errands.

For mothers like Mary, I imagine the realization hits home a bit sooner. What a morning it must have been the day after Jesus’ birth! Were the new parents awoken after the excitement of the previous night with the squalling cry of the newborn babe? Did the wonder of the evening before seem like a dream? Or were they too excited to sleep at all, spending the night instead intently watching their son doze peacefully? Much like my wedding day, I remember smiling so much at the birth of my children that my face actually hurt.

There has been some significant and ongoing conversation about the meaning of marriage and family in today’s society, as well as serious worry about economic and demographic trends. These topics are timely and important, but one of the perennial lessons we must take from the birth of Jesus Christ is that God is radically invested in this world. His care, to the point of sending his Son to be born, live, die, and rise again, provides us with a model for dealing with our own hopes and fears in a world so often full of despair and darkness.

One of the common concerns that drives prospective parents to put off having children is economic, specifically that they won’t have the financial resources to support a growing family. This is a worry that’s been around as long as there have been families. The complaint was prevalent in Martin Luther’s time, and he called it “the greatest obstacle to marriage.” Luther, in perhaps one of his less pastorally-sensitive moments, didn’t give much thought to such worries, but instead denounced this objection as showing “lack of faith and doubt of God’s goodness and truth.” After all, he argued, marriage and family are ordinances of God’s grace, and someone tempted to doubt that God provides for persons in this estate must instead realize “first, that his status and occupation are pleasing to God; second, that God will most certainly provide for him if only he does his job to the best of his ability.” It’s an old adage, and yet a true one, that if you wait to have children until you can afford them, then you will never have any.

Having children is, in this way, fundamentally an act of faithful hope in the face of sometimes overwhelming fearfulness about the brokenness and corruption of this world. We don’t need to look very far or very long to see stunning illustrations of human suffering and evil. It was right into the middle of this fallen and seemingly hopeless mess that the Christ child was born. Thus the classic carol, “O Little Town of Bethlehem” rings true: “The hopes and fears of all the years are met in thee tonight.” Where evil leaves us speechless, God speaks the Word of hope and salvation.

In the same way that God sent his Son through the power of his Spirit to live, work, and die in the midst of the dust, dirt, mud, and muck of this world, we too are called to “be fruitful and multiply” (Gen. 1:28) in patient expectation and hopefulness for God’s purposes in this world. To the extent that we shirk this calling, unwilling to sully ourselves with the troubles and cares of parenthood, it shows a fundamental lack of faithfulness and hope, or as Luther puts it, is evidence of a people who “trust in God as long as they know that they do not need him, and that they are well supplied.”

Arthur Brooks, the president of the American Enterprise Institute, put it this way in a lecture earlier this year: “As you get past a certain level of prosperity, it will become not cost-effective to have children. If you don’t have beliefs that transcend your life you won’t have [children] anymore.” Brooks describes instead a society in “which people dedicate themselves to a higher purpose, most notably to God,” and in which therefore “people will live on into the next generation. The future of a prosperous society depends on a lot of things, but the fundamental currency of the success of any society is people, is humans. When you stop having the humans, your life is limited and your prosperity is doomed.”

Not everyone is called to have children themselves, of course. God has a plan for each individual, just as he has guidelines for how marriage and family are to be arranged. But as Christians within a larger society we are called collectively to promote the cause of life and flourishing. For many that will mean having children in a committed, two-parent household. For others it will mean the struggles of single-parenthood. So too it will mean for many the adoption and integration of those who need parents into a loving home, a particularly powerful way of modeling God’s love. For those who do not or will not have children themselves, it means offering support to those in their own families and communities that do bear and nurture children.

But key to all this is recognizing the critically important place that families and children play in the broader health of a society, and therefore the significance they have for God’s work in this world. “From generation to generation and from century to century,” Dutch theologian Herman Bavinck wrote, “the struggle against sin must be continued, and the spiritual and moral nurture must begin afresh with each person.”

Given the complex of relationships we are each born into, the family is the bulwark of civilization in this sense, and on that basis Bavinck expressed the hope that “from the family outward, blessing and prosperity will once again spread across all the nation.” This is a hope that we too ought to share in fear and trembling, as it echoes across the centuries from that little manger in Bethlehem.



Political correctness is most pervasive in universities and colleges but I rarely report the  incidents concerned here as I have a separate blog for educational matters.

American "liberals" often deny being Leftists and say that they are very different from the Communist rulers of  other countries.  The only real difference, however, is how much power they have.  In America, their power is limited by democracy.  To see what they WOULD be like with more power, look at where they ARE already  very powerful: in America's educational system -- particularly in the universities and colleges.  They show there the same respect for free-speech and political diversity that Stalin did:  None.  So look to the colleges to see  what the whole country would be like if "liberals" had their way.  It would be a dictatorship.

For more postings from me, see TONGUE-TIED, GREENIE WATCH,   EDUCATION WATCH INTERNATIONAL, FOOD & HEALTH SKEPTIC, AUSTRALIAN POLITICSDISSECTING LEFTISM, IMMIGRATION WATCH INTERNATIONAL  and EYE ON BRITAIN (Note that EYE ON BRITAIN has regular posts on the reality of socialized medicine).   My Home Pages are here or   here or   here.  Email me (John Ray) here


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