To Regulate or Not to Regulate?

I have heard it said that governmental regulation is neither appropriate or desirable. That the state has no right to butcher the freedoms of the market under any circumstances, presenting it to the world as some kind of sacred cow. (Perhaps bull would be a more appropriate anthropomorphicism?) On the other side of the coin, many on the left of the spectrum argue for more regulation, particularly within the financial markets. I don't consider myself to the left by any stretch, nevertheless in my opinion, regulation is a necessary evil since without it there could not exist a free market.

Allow me to explain; the free market cannot survive in isolation and whilst I don't believe that the state should be involved in setting prices or any long-term subsidy of business, as such policies only encourage inefficiency, regulation is necessary to maintain competition. If we may look to the fundamentals of the cornerstone of market economics, the Wealth of Nations, it becomes clear that Smith was not against governmental regulation. Quite the contrary.

Adam Smith argued that through the division of labour and specialisation, an industry could realise an enormous increase in productivity, and realise significant economic growth through an absolute advantage. However, the natural conclusion of an absolute advantage is a monopoly. Because a monopoly interferes with the ability of the invisible hand to find an equilibrium of prices, "the price of monopoly is upon every occasion the highest which can be got." Without the invisible hand, the free market could not exist and without government intervention, through anti-trust laws to prevent monopolies, the market would exist, but it would not be free.

Thus when we speak of government intervention in the markets, let us not speak of it as if it is some kind of taboo against nature, but judge each and every regulation on it's own merits as to whether it's purpose is justified.

Great Scot

The Daily Record and STV are seeking nominations for the greatest Scot, to be announced on STV on St. Andrews Day. Whilst the panel have included Edinburgh Festival director Jonathan Mills and Record editor Bruce Waddell, two people I've never heard of, they've chosen to leave out Mary Queen of Scots. However, regardless as to whether some of the people who are on the list actually belong there, for me the question of who was the greatest Scot does not require too much of an inquiry.

Adam Smith, who thankfully has been nominated onto the list, and as the founding father of capitalist economics is the Scot who has had the greatest effect in world history. Smith's promotion of the division of labour, an idea which was exported around the world, drove the industrial revolution. For without the division of labour, the industrial revolution could never have happened, and the raising of standards of living to the levels they are today, along with it.

It is Smith's an Inquiry into the Nature and Causes of the Wealth of Nations, which espoused the division of labour to maximise efficiency and criticised the corrupt system of govenment sanctioned monopolies within the mercantile system of the day, and not James Watt's steam engine that was the greatest driver of industrial growth. To Smith, an individual acting in their own interest and selling and buying freely, would lead to the most efficient economic system. Prices would reach an equilibrium, being led by the invisible hand of the market, through supply and demand, and competition between enterprises.

However Smith was not overly right wing, he saw Government regulation as necessary to prevent monopolies and conspiracies which would stifle competition. Furthermore he was, unlike many of his class of the day, concerned with the problems of poverty. Smith argued that it "is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion." An idea which most modern readers will subscribe to, but which, at the time, made his ideas, considering his target demographic, revolutionary to say the least.

Smith also espoused universal education as a bulwark against what Marx would later call alienation through the process of the division of labour, and it's soul destroying monotony. At the time of writing Scotland was unique in the world, in that every Church parish, under the reforms of John Knox, employed a teacher to educate boys of all classes, and the four Scottish universities of the time took educated young men of any class, with scholarships and charitable foundations to assist with the cost. Smith was uniquely placed therefore, to see the advantages to society of universal education first hand.

In short he is the Scot who has the greatest effect on world history, for there is not a corner of the world untouched by his ideas, and he deserves a good deal more credit than to be the first Scot to grace the back of an English banknote.

Al-Megrahi, Oil and the SNP

Jack Straw's admission that the Westminster government had opened a prisoner transfer agreement (PTA) with Libya to bring an oil deal on stream has lead to the SNP Government in Holyrood being tarred with the same brush. The inference that Kenny MacAskill's decision was based upon an oil deal with Libya is not only not based upon fact as the files will evidence, it is completely devoid of common sense.

Whilst Brown and Co. would apparently have happily handed over Abdelbasset Al-Megrahi for black gold, this was upset by circumstances in Holyrood, namely the election of the SNP administration in June 2007. The SNP have re-iterated that they would not agree to the PTA, and have continually stressed that they are happy for the files to be released detailing the decision making process. A Labour administration in contrast, would have been expected to tow the party line in honouring the PTA.

Instead Kenny MacAskill considered realeasing terminally ill Al-Megrahi on compassionate grounds, something which is enshrined in Scots law. This decision left him with nothing to gain politically, and was clearly a very difficult decision to make. Advice was sought from a number of officials including the Chief Inspector of Strathclyde Police, before coming to the decision.

Whilst personally I think that Al-Megrahi's conviction and the evidence used to secure it was highly suspect, and I question his guilt in the first place, see USS Vincennes. I don't think that this did play a part in the decision making process. The corrospondence is there for all to see. Neither do I think that it should have. Guilt or innocence are a matter for appeal. The likelihood that Libya would have given him a hero's welcome on his return to Tripoli should not have been a matter for consideration either. Assurances were made and these were not kept. MacAskill cannot be held responsible for that.

The idea that MacAskill was insensitive and inconsiderate in granting compassionate release does not take into account how strongly the sensitivity, of what is a very difficult issue, was considered. Advice was sought from the UK Government regarding agreements that were made with the US on where Al-Megrahi was to serve his prison sentence. Westminster regrettably decided not to issue this advice. In further support of the SNP administration's sensitive approach to the issue, Alex Salmond wrote a letter to Gordon Brown dated 25th October 2008, where he highlighted the sensitivity of inviting Colonel Gadaffi to an oil sumit 2 days before the 20th Anniversary of the disaster. If anyone is guilty of insensitivity therefore, it is the Labour government.

The inference that the SNP were involved in a shady energy deal is put simply proposterous. An SNP government, which would seek independence for what is an energy rich Scotland, would have little to gain out of a foreign oil deal, unlike London. Especially when you consider that a newly independent Scotland would find it most prudent to sell oil and gas to it's energy hungry neighbour south of the border.

The Right Stuff

An opinion poll in Sweden has predicted that the parties in the centre-right Alliance for Sweden are pipped to receive the largest share of the vote for the first time since 1914. This would be a huge victory for Freidrik Reinfeldt, the Moderate party, and the ruling coalition and would likely result in calls for the embattled Mona Sahlin to stand down as leader of the Social Democrats, and the opposition Red-Green coalition. For Frederik Reinfeldt the victory would lend considerable momentum to the party as Sweden takes over presidency of the European Council from Jan Fischer and the Czech Republic on the 1st July.

Sweden's presidency is likely to concentrate on the environment, through renewable energy and efficiency targets. Sweden is one of the few countries in the world that has succeeded in increasing economic growth whilst reducing CO2 emissions. This has led to Sweden being considered world leaders in climate change strategy and Sweden will represent the EU at the climate change summit in Copenhagen in December. Reinfeldt recently congratulated Barack Obama on what was a complete sea-change in environmental policy after he assumed office. Such a victory, in providing added confidence and impetus to Friedrik Reinfeldt therefore, may prove to not only be good for Sweden, but good for the world too.

The far left Vänsterpartiet, and eurosceptic Junilistan, are also set to lose their vote share reducing the seats that they hold from two to one. Neither parties would garner much sympathy from me, one was formerly called themeselves communists, and both are endemically eurosceptic and isolationist, both of which I consider foolish, particularly in today's economic climate.

However the biggest gains of the election may be the, until recently unheard of, Pirate Party who are set to capture a respectable share of the vote, having become the fourth largest party in Sweden almost over-night. The popularity of the party soared after the four founders of the Pirate Bay were sentenced to a year in prison on April 17th for running the world's largest file-sharing website. Perhaps most worrying about this trend is the fact that the party has very little in the way of policy on anything other than civil liberties, copyright law and the internet. Do Swedish citizens really want e-privateers, who have no clear policy on trade issues, or the environment, representing their interests in Brussels? I for one would not. One cannot have representatives who stand for nothing. I say let us not foolishly raise the Jolly Roger in Brussels.

The Myths of the Griffin

With just a few days left until the European elections, I think it is of paramount importance that we step up the campaign against the fascist BNP. You may have seen their recent party political broadcasts with Nick Griffin using the themes of the Battle of Britain, Winston Churchill and "traditional Christian values" to try and legitimise his racist views. This comes a week after Nick Griffin called black and Asian Britons, "racial foreigners" who should be "repatriated back to their own countries."

Unfortunately many people may be nievely taken in by this shallow attempt at associating all things British with the racist BNP, and with the recession affecting people's livelihoods, many people are looking for somebody to blame. Some are laying the blame firmly at the foot of the politicians by not voting at all. Some are going as far as to blame immigrants for all the problems in this country. Whilst I shouldn't need to go into the reasons why the latter is completely unreasonable and unjust, a protest of no vote because you believe that politicians are corrupt, plays into the hands of the BNP. The motto of "use your vote, or someone else will" rings true. Make no mistake, the election of a BNP MEP would be far worse than an MEP of any other political party. Full stop.

Therefore we all must make sure and use our vote on June 4th to deny the BNP a seat. If they were to win even one seat, the increase in funding they would receive will allow them to step up their advertising campaign, put a glossy leaflet through every door in Britain, and legitimise themselves still further. That is why they must be stopped now before their diseased hatred and lies is allowed to spread. We have already seen a so called "freedom march" in Luton on the 24th May, which BNP activists were involved in, and where many showed their true colours with Nazi salutes. We don't want to find ourselves in the same situation as Austria or France where openly neo-fascist and racist parties, whom incedentally have links with the BNP, are considered legitimate, receive state funding, and consequently a worrying share of the vote.

Interesting Times

A recent poll published in the Times on voting intentions in Scotland on June 4th made for interesting reading. Whilst it showed an increase in support for fringe parties, these gains are unlikely to translate into a seat. The article focused on Labour's fears of an election catastrophe, and whilst the election may turn out to be just that elsewhere, I for one don't think that Labour will find themselves unseated in Scotland.

The poll quotes a senior Labour spokesperson as saying that there "is a lot of concern for us. We think we might manage to keep the second seat but it's going to be very close." Now by taking the projected vote as published, with the SNP on 37%, Labour on 25%, the Tories on 17% and the Lib Dems on 12%, and working that into an expected low turnout, the results couldn't be further from the truth. The turnout in 2004 was 30.9% mustering 1,176,817 voters, but in 1999 it was only 988,310 with a shoddy 24.7% showing up at the polls.

It is generally accepted that low turnout is to be expected, due in no small part to the expenses scandal. If we transpose the poll onto the 1999 turnout therefore, we see 435,422 votes to the SNP, 294,204 to Labour, 200,058 to the Conservatives and 141,218 to the Liberal Democrats. Under the d'Hondt method this would deliver the 1st seat to the SNP, the 2nd seat to Labour, the 3rd seat to the SNP, the 4th seat to the Tories, the 5th seat to Labour and the 6th seat to SNP.

The poll was correct on it's assertion, and on the basis of their projections, that the SNP could capture enough votes for 3 MEPs. However in order for Labour to lose Catherine Stihler MEP, either Labour would have to hemorrhage a significant number of voters to the Lib Dems, there would need to be an enormous swing to the SNP, or a much larger than expected turnout. All of the above are somewhat unlikely, if you want my very humble opinion, it's George Lyon and the Liberal Democrats who should be considering a plan B.

I think that the allocation of seats in Northern Ireland will be all the more interesting. Sinn Fein essentially unseated the SDLP in 2004, as they had been anticipated to do, to take what is seen as the Nationalist seat at Brussels. They may see their political fortunes in Northern Ireland revived further. The Democratic Unionist Party (DUP), who have been the strongest Unionist party in Ulster for over a decade, may see their fortunes decline somewhat due in no small part to Jim Allister MEP, the man whom they selected as a candidate to replace Ian Paisley in the European Parliament. He left the party and formed Traditional Unionist Voice in 2007, over his anger at power-sharing agreements agreed to by the DUP and Sinn Fein, “No power sharing with terrorists” is his motto. Once loyal DUP voters could vote for a man whom they have seen work hard for them in Brussels, thus splitting the vote. To add salt to the wound, the Ulster Unionist Party, tired of seeing their fortunes wane, have forged an alliance with the Conservative party and David Cameron, giving them a stronger voice, and making them more electable.

Whilst this may give the DUP cause for concern, as the Irish Times shows, neither Jim Allister or the UUP are likely to garner more votes than the DUP's candidate, Diane Dodds. However Northern Ireland politics are a partisan affair, and there are only so many unionist votes, just as there are only so many nationalist votes. The effect of this, and my prediction, will be to split the unionist vote, which could result in Sinn Fein winning the first seat, the DUP the second, and the SDLP the third. After all they lost out to the UUP for third place by only 4,000 votes in 2004. This would be the first time in Northern Ireland that nationalists have topped the polls, and profess a total sea-change in Northern Irish demographics.

Electors Count

The expenses scandal has dominated the news over the past week. Tory MP Anthony Steen's schizophrenic diatribe, in which he claimed that the public had no right to interfere in his private life, after he had claiming questionable expenses from the public purse, has perhaps been the most astonishing. He went on to criticise the Government for introducing the Freedom of Information Act, which he blamed for catching him out in the first place. I guess accountability and transparency are not the sort of the things that he values in a democratic society. At least not the kind of transparency that leads to him being held accountable.

One benefit which has come of this entire scandal, is that the debate on our constitution and parliamentary system has been revived. We are starting to question things which have remained unchanged for centuries, yet are completely inappropriate within a 21st Century democracy.

The idea that an ombudsman could hold a degree of power over parliament in the administration of expenses claims would have been impossible a few decades ago, because it seems to go against the doctrine of parliamentary sovereignty. Yet the policy has been rushed through parliament, to restore the public trust, without so much as a whimper of dissent.

The expenses scandal is of course just the tip of the iceberg. The idea that we need a codified constitution is not new, but I believe that it is important. One of the reasons why this expenses scandal has occured, apart from the obvious flaws within human nature, is because the rules around parliament are contained in abstract concepts of convention and the Royal prerogative. Is it not time that these rights and responsibilities were enshrined in the law?

Is it not time that the House of Lords, an arm of the legislature which is entirely made up of un-elected hereditary and life peers, were elected by the people? I have heard it said that the House of Lords is an important check on the power of Government, because it is not dominated by any political party. The natural conclusion therefore, is that it should be elected by proportional representation through a list system. This would make it both democratic, accountable and allow for no significant political majority. More importantly, in light of the effect that the expenses scandal may have on the far right vote, it is entirely possible to ensure that no extremists are given a mandate by the setting of a quota. Sweden operates a 4% quota, yet is considered by Transparency International to be one of the least corrupt countries in the world. We may never reach such heady heights, but such a reform is a step in the right direction.