CapX, London (2025)

20/12/2024

Our contributors have rounded up some of their favourite works, and whether you’re into political theory or video games, there’s something for everyone in CapX’s Books of 2024.

✍️Marc Sidwell, Joseph Dinnage, David Goodhart, Bruce Anderson, Sam Bidwell, Alys Denby, William Atkinson, Eliot Wilson, Tom Jones, Maxwell Marlow, Andrew Tettenborn & Philip Patrick

Our contributors have rounded up some of their favourite works, and whether you’re into political theory or video games, there’s something for everyone in CapX’s Books of 2024. Marc Sidwell For pure economic geekery, I’ve recently downloaded a free pdf of ‘The Socialist Calculation Debate....

20/12/2024

One of the worst things about having a public profile is that you tend to attract stalkers. But rarely are those stalkers credentialled academics with a six-figure following on social media.

Back in May, the Centre for Policy Studies – which I run, and which also owns CapX – published a major piece of work on migration by Robert Jenrick, Neil O’Brien and our own Karl Williams. We argued not just that migration was far too high, but that it was far too unselective: we were bringing in far too many low-wage, low-skill individuals (or even people who would not work at all), rather than scouring the world for the best and brightest.

Since then, we have endured a barrage of abuse from Professor Jonathan Portes. He insists that the new wave of arrivals are mostly higher earners who will benefit the British economy – which is why, in his view, people shouldn’t be nearly as worried as they are about the scale of the numbers arriving. He’s called our findings (and/or our staff) innumerate, absurd, spurious, laughably incompetent and obvious bu****it. He’s put snarky little quote marks around the words ‘research’ and ‘think tank’.

As with so many online obsessives, I’d decided that the best policy was just to ignore him, not least since Portes has also made serious and repeated misrepresentations about the contents of the paper in question.

But the root cause of our dispute speaks to a hugely important public policy issue – also addressed by the official Migration Advisory Committee in a new report this week. Namely, how much are migrants actually earning? And how can you actually tell?

And in investigating this issue, you come up against another, even bigger problem: that we don’t know nearly enough about who is in the country, and what they are doing.

✍️Robert Colvile

Bad data on who is in the country has turned migration policy into a guessing game

20/12/2024

**This is an open letter to Ed Miliband, the Secretary of State for Energy Security and Net Zero, organised by Emergency Reactor.**

Dear Ed,

For three days in a row last week, your morning cuppa was brewed with the sponsorship of the shale industry, as gas and firewood accounted for around 80% of electricity generation.

For the second time in a month, last week, Germany’s electric grid was hit by a wind drought, known in Germany as a Dunkelflaute. This not only put our energy security at risk, but the lack of wind sent Europe’s electricity prices soaring. In response, Norway announced that it wants to dismantle the undersea cables that connect its grid to mainland Europe to protect Norwegians from Europe’s volatile electricity market, and Sweden’s Deputy PM and Energy Minister has said that she is ‘furious with Germany’ for dismantling its nuclear power plants, causing a spike in energy prices in Sweden.

We are a diverse group of volunteers who care for the environment and are concerned about air pollution and climate change. We understand that nuclear energy is a core part of the solution to these problems, therefore we welcome the news that the operating licenses for four generating Advanced Gas Cooled Reactor stations have been extended so that Heysham 2 and Torness will keep producing power until March 2030 and Heysham 1 and Hartlepool until March 2027. We also celebrate the arrival of the unit 1 reactor at Hinkley Point C. But what comes next?

At present the UK’s clean energy policy relies heavily on wind and solar power. Hinkley Point C will play a small role in the future, but it will not replace the generation we will soon lose from old reactors being decommissioned due to their age – many of these will go offline before new nuclear power plants can replace them. In short, we are following in Germany’s footsteps.

On December 4, 2024 you tweeted ‘These sites power 1.8m homes and support 3,000 jobs in Lancashire, Teeside and East Lothian. Nuclear is at the heart of our mission for clean power.’

Nuclear is not the heart at the moment. That’s because ‘Net Zero’ has somehow come to mean ‘mostly wind and solar power’, but no large industrialised nation in the world has been able to decarbonise without a lot of baseload reliable clean energy, which is usually from nuclear energy...

✍️Zion Lights & Emergency Reactor

This is an open letter to Ed Miliband, organised by Emergency Reactor.

19/12/2024

Given the current state of the geopolitical landscape and the grave implications for minority religious communities, the reappointment of a special envoy for Freedom of Religion or Belief (FoRB) has felt a long time coming. Nevertheless, the government has delivered an early Christmas present in the announcement of David Smith MP to take on the role. The newly-elected MP, representing North Northumberland, is an extremely promising prospect.

Prior to entering Parliament in July, Smith, a professing Christian, served in senior posts within major Christian NGOs including Tearfund and the Bible Society. His experience will serve him well as he engages internationally, and as he navigates the broad civil society space that will be clamouring for his attention. His personal faith will no doubt equip him with a nuanced recognition of the dynamics and an appreciation for the cause.

Smith will enter the office to a full inbox. The Israel-Palestine conflict, the Russian aggression against Ukraine, and now the toppling of President Assad by Hay’at Tahrir al-Sham represent only the most prominent geopolitical convulsions with implications for religious freedom. In Syria, while the termination of a protracted conflict and a murderous regime is absolutely to be celebrated, and the leader of HTS, Ahmed al-Sharaa, has given assurances that engender hope, the picture for religious minorities, some of which lent support to al-Assad in exchange for their security, is precarious.

There are myriad other emerging challenges, as well as long-standing issues such as those in Algeria, China, Nigeria and Iran about which proper awareness and attention are required from the Government to grapple with the religious and ideological dynamics and implications for faith communities. Such considerations, as policy positions are developed and as diplomats seek to engage, are not simply a fringe humanitarian concern but are also vital to securing a serious understanding of the broader dynamics and for the pursuit of the UK’s strategic interests. Religious freedom, and its absence, have significant connotations for civil and economic stability, both regionally and globally.

✍️Miles Windsor

Britain's new special envoy for freedom of religion or belief has a daunting inbox.

18/12/2024

As the brilliant Thomas Sowell articulates, economists pride themselves, and rightfully so, on studying ‘the consequences of economic decisions . . . in terms of the incentives they create, rather than simply the goals they pursue. This means that consequences matter more than intentions – and not just the immediate consequences, but also the long run repercussions.’

The mantra in economics is ‘Incentives matter!’ And it’s true. Restaurateurs respond to increases in the minimum wage by adopting automated ordering systems. But economists tend to treat this mantra as akin to a basic cause-and-effect principle in natural science. Like Sowell, we may say it is not a matter of opinion that employers respond to rising wages by automating labour services, just as it’s not a matter of opinion that when an alkali metal contacts water, it causes an energetic explosion. But in an important way the restaurateur’s decision to automate in the face of increasing labour costs is not akin to a chemical reaction. The two phenomena are of distinct categories. The restaurateur’s decision exhibits intelligent action; the chemical reaction does not.

Both the restaurateur’s decision and the chemical reaction are intelligible. Chemists can use ultrafast photography to understand the generation of heat and electron transfer when an alkali metal contacts water. And economists can use the principle ‘Incentives matter!’ to understand why restaurateurs substitute physical capital for labour when wages increase. But neither of these intelligible explanations are themselves intelligent.

The categorical distinction is between understanding something as intelligent human action and understanding it as not. The principle ‘Incentives matter!’ doesn’t make the restaurateur’s decision intelligible in terms of why a human being does what a human being does. A human being understands the meaning of another’s action as purposefully chosen by someone who feels, thinks, knows and wants something to happen. Such feeling, thinking, knowing and wanting cannot be reduced to something else. Understanding intelligent human action cannot be reduced to an understanding of something that is not intelligent action itself. Thus, if we are to understand intelligent human action in economics, it cannot come from something, say a maxim or a model, that is not about intelligent action itself.

✍️Bart Wilson

A human choice shouldn't be analysed in the same way a chemical reaction

18/12/2024

The Online Safety Act is kicking in and the reality of having an internet governed by Ofcom is starting to materialise; no matter what the Act’s advocates say, this reality isn’t pretty. Regulations like the Online Safety Act make Britain a bad place to do business and to be online, with two recent stories illustrating exactly how.

The first is the news that Sam Altman’s OpenAI, the organisation behind ChatGPT, will not launch its new text-to-video AI tool, Sora, in the UK. Britain, according to OpenAI, is no longer a good place to operate AI technology, thanks to the Online Safety Act, which has given Ofcom huge powers to regulate online communications, including the use of generative chatbots, in which OpenAI specialise.

This puts Britain in the same sorry position as the European Union, whose strict AI regulations have had the double effect of suffocating any domestic European AI industry and deterring global innovators in AI from offering their products in Europe. This is more embarrassing as, only recently, Britain could boast that it had a more permissive regulatory regime for AI and this is why Google’s AI tool, Gemini, was available in the UK but not in the EU. Thanks to the Online Safety Act, we have lost this competitive advantage. We have chosen to leave the EU, then introduce regulations which keep us stuck in the Brussels quagmire.

The second case is smaller but could be repeated thousands of times over in the future. The manager of the London Fixed Gear and Single Speed forum announced that he would shut the forum because of the Online Safety Act. As the manager of an online forum with around 70,000 members, the new law means he is personally liable for the posts on the site, and the costs of complying with the new laws mean maintaining such a forum is simply not worth the time and risk.

✍️Fred de Fossard

The Online Safety Act is kicking in and the reality of having an internet governed by Ofcom is starting to materialise; no matter what the Act’s advocates say, this reality isn’t pretty. Regulations like the Online Safety Act make Britain a bad place to do business and to be online, with two rec...

18/12/2024

I sometimes wonder if the Prime Minister genuinely sees himself as a radical, decisive, high-minded leader with the ‘laser-like’ focus of which he speaks so often. Certainly he talks the talk: when he appointed Chris Wormald as the new Cabinet Secretary and head of the Civil Service earlier this month, Keir Starmer described his task as ‘breaking down silos across government to harnessing the incredible potential of technology and innovation… nothing less than the complete re-wiring of the British state to deliver bold and ambitious long-term reform’.

Wormald has picked up the rhetorical baton and run with it. This week, he issued an all-staff message in which he reminded his half a million subordinates that they would be expected to ‘do things differently – from working much more effectively across departments to taking advantage of the major opportunities technology provides’. The Cabinet Secretary is trying to paint a more positive vision of the Civil Service’s future after the Prime Minister’s weirdly aggressive and ill-judged speech unveiling the government’s ‘Plan for Change’. Starmer had repeated his zombie-like warning of ‘difficult decisions’, and astonished many by complaining that ‘too many people in Whitehall are comfortable in the tepid bath of managed decline’.

There is a lot of speechifying, but it is not clear that the Prime Minister or his chosen Civil Service chief really have ideas or willpower for anything more than modest, incremental nudges. Chris Wormald’s appointment in itself seemed significant.

Of the four shortlisted candidates to replace Simon Case as cabinet secretary – the others were Olly Robbins, Antonia Romeo and Tamara Finkelstein – Wormald was the unadventurous choice. An Oxford history graduate, he has been a civil servant for 33 years, all of them spent in Whitehall, and became a permanent secretary in 2012. For the past eight years, he has run the Department of Health, not regarded as an exemplar of efficiency or in the vanguard of change.

✍️Eliot Wilson

I sometimes wonder if the Prime Minister genuinely sees himself as a radical, decisive, high-minded leader with the ‘laser-like’ focus of which he speaks so often. Certainly he talks the talk: when he appointed Chris Wormald as the new Cabinet Secretary and head of the Civil Service earlier this...

17/12/2024

Confusion is worse confounded. As far as I can tell, no one foresaw the fall of Bashar al-Assad. So it is hardly surprising that no one has any clear idea what will happen next.

Some 20 years ago, I spent a bit of time in Syria in the days of Hafeez al-Assad. The country seemed stable, as one might expect in a well-run police state, and tourists had little to fear.

I remember one story. Driving through Damascus, a little guy in a beaten-up old Trabant was almost forced off the road by an enormous Cadillac. He leaned across and rapped his knuckle on one of the smoky windows. To his surprise, it came down a bit and a piece of paper fluttered out. He stopped to pick it up: a phone number.

The next day, the little guy went to a call box and dialled the number. A deep and sinister voice answered: ‘yes?’ Little guy: ‘Are you anything to do with that enormous car which almost shoved me off the road yesterday?’ Sinister voice: ‘Do you who you’re talking to?’ Little guy: ‘No.’ Sinister voice: ‘Hafeez al-Assad.’ Little guy: ‘Do you know who you’re talking to?’ Assad, sounding surprised: ‘No’. Little guy: ‘Thank God for that’ – and takes to his heels.

In those days, there was a Syrian commercial elite: men and families who looked as if they were used to soft living and were by no means uncorrupt. They probably resembled French Mediterranean politicians from the Fourth Republic. They wanted life to be comfortable. If the price of that was staying out of politics, so be it.

Then everything went wrong.

✍️Bruce Anderson

Confusion is worse confounded. As far as I can tell, no one foresaw the fall of Bashar al-Assad. So it is hardly surprising that no one has any clear idea what will happen next. Some 20 years ago, I spent a bit of time in Syria in the days of Hafeez al-Assad. The country seemed […]

17/12/2024

Now that the new Government has settled in, its intention to deliver fundamental changes to the education system is clear. However, it is crucial to distinguish between change and progress. In reality, some of Labour’s proposed reforms risk harming educational standards and diminishing opportunities for working-class children.

The proposed reforms fall broadly into three categories: governance and structural changes, regulation of education professionals and pay. Each of these areas presents challenges that could undermine the progress made over the past two decades.

The new Government’s decision to take on academisation — and by extension, school choice — marks a sharp departure from the past 25 years of established and well-evidenced education policy. Academisation has become the norm for secondary schools (over 80% of secondaries are now academies) and is increasingly prevalent in primary schools. Labour’s key proposal is to move away from academy orders being the default position and instead empower local authorities to retain control.

This approach presents two major issues.

Firstly, local authorities are set to undergo substantial restructuring. School improvement is a complex task that requires expertise, resources and accountability. Many local authorities lack the funding and in-house knowledge that successful Multi-Academy Trusts (MAT) like Future Academies, Harris and Star possess. If decisions about school governance are driven by politics rather than evidence, we risk ineffective pairings that hinder school improvement.

Secondly, these governance changes are being introduced alongside significant local government reforms outlined by Angela Rayner this week. As a result, some existing local authorities may not exist in their current form within 18 months. This upheaval will make it difficult for them to invest the necessary time and staffing to support struggling schools effectively. The combination of political restructuring and educational reform could create confusion and inconsistency, leaving vulnerable schools without the support they need.

Labour’s proposed changes to teacher regulation – including a ‘new induction period with QTS for all’ and reforms to teacher pay – are perhaps the most concerning...

✍️Callum Robertson

The education sector is already suffering from 'reform fatigue'.

17/12/2024

That call sent shivers down my spine. Although we knew it could happen, it doesn’t make it easier to pick up the phone and hear that your partner – in life and in the quest for democracy in Venezuela – has been detained.

On December 10, Jesús Armas was forcefully taken away from a café in Caracas by hooded men in a pickup truck without plates in the middle of the night. Ironically, Jesús, a 35-year-old engineer who, since his days as a student leader, devoted his life to trying to restore democracy and protect the rights of abuse victims in our country, was detained on Human Rights Day.

We have visited office after office, detention center after detention center, only to be told he is not there. Under international law, that constitutes an enforced disappearance. A high-level official confirmed on TV more than a day later that he was being held by Nicolás Maduro’s regime, but authorities have not allowed his family or lawyer to see him.

The regime has accused Jesús of participating in violent anti-government activities. The alleged source? An anonymous ‘cooperating patriot’ – a concept invented by the Maduro regime to fabricate criminal files against opponents in a country where the judiciary, which is an appendix of the executive branch, is used to prosecute and wrongfully detain opponents.

Jesús’ detention is receiving widespread international condemnation, given his multiple links abroad, including having studied at Bristol University with a Chevening Fellowship. But his case is far from exceptional. He is one of the over 1,900 political prisoners in Venezuela today. While some are released, at times conditionally and still subject to prosecution, others are detained, contributing to a revolving door that has been turning for years.

✍️ Sairam Rivas

That call sent shivers down my spine. Although we knew it could happen, it doesn’t make it easier to pick up the phone and hear that your partner – in life and in the quest for democracy in Venezuela – has been detained. On December 10, Jesús Armas was forcefully taken away from a café […]

16/12/2024

The events of the past week have shown what non-state actors, supported by aggressive states, can do. The terrorist group Hayat Tahrir al-Sham and a plethora of Turkish-backed militias shocked the world by taking over Syria’s largest cities in a matter of days and forcing its dictator, Bashar al-Assad, to flee.

There is no love lost between al-Assad and his people, or the international community for that matter. His bloody crackdown on opposition protests have led to the deaths of an estimated 500,000 civilians, while millions more left the country during more intense stages of Syria’s civil war and now live in refugee camps across the region.

If there is any bright light in all of this doom and gloom, it is the possible independence of the Kurdish-controlled areas in the North-East of Syria. The Kurds – the largest stateless people on earth – already have de jure autonomy in Iraq, in the form of Kurdistan Regional Government (KRG) and have been governing themselves as a de facto state within Syria following the breakup of the civil war there.

The world’s powers agreed to grant the Kurds that vision as part of the Treaty of Sevres in 1920, by allotting a significant portion of the South-East of what is today’s Turkey as a Kurdish autonomous state. Yet the Kurds have been abandoned then and several times since. This could be the right time to dust off that vision and go back to a more just and sustainable regional architecture.

Another nation has been left hanging by the international community. Armenia was promised an independent state, encompassing large chunks of historic Armenia, as part of the Treaty of Sevres and the US President Woodrow Wilson Arbitral Award. But the victorious allies allowed Turkey’s Ataturk and Soviet Russia’s Lenin to partition Armenia following an occupation by the Red Army in late 1920.

✍️Dr David A Grigorian

The events of the past week have shown what non-state actors, supported by aggressive states, can do. The terrorist group Hayat Tahrir al-Sham and a plethora of Turkish-backed militias shocked the world by taking over Syria’s largest cities in a matter of days and forcing its dictator, Bashar al-A...

16/12/2024

If you think you’ve had a tough year, spare a thought for Ayatollah Khamenei. Iran’s Supreme Leader has had a 2024 to forget, with his sulphurous statesmanship boosting opposition towards his regime at home and abroad, while allies fall by the wayside.

The speed with which Bashar al-Assad’s regime in Syria collapsed has shocked Tehran. As well as the collapse of overland supply routes to key proxies like Hezbollah, the demise of Iran’s longtime ally has demonstrated how 50-year-old dynasties can disappear within a fortnight. It was, however, only the latest setback to befall Iran’s leaders this year, with Khamenei’s ailing theocracy one of the biggest losers amid seismic geopolitical shifts reverberating across the Middle East and beyond.

The regime’s sponsorship of Hamas’ murderous October 7 attack was intended to humble Israel and its government. Instead, it has emboldened it. The resulting conflicts in Gaza and Lebanon have been catastrophic for both Hamas and Hezbollah, with their capabilities degraded and leadership killed. As a result, it has been Iran that has been humbled. The elimination in Tehran of Hamas’ political leader Ismail Haniyeh laid bare Iran’s determined stewardship of its proxy, and its commitment to destabilising the Middle East. The failure of retaliatory Iranian missile strikes on Israel in October – the second such attack – served only to demonstrate the recklessness of the regime, as well as its military impotence.

Ironically, Iran’s efforts to foment dissent beyond its borders have instead fuelled widespread opposition to the regime at home. Iran’s economy remains devastated by sanctions. Inflation is running perilously close to 50%, while the country’s poverty rate has doubled since 2018. At the same time Khamenei was ordering the price of bread to rise, his regime was also investing eye-watering sums propping up a vast network of dependent proxies. Recent revelations suggest that Iran spent as much as $30 billion to keep Assad in power, alongside more than $220 million gifted to Hamas between 2014 and 2020.

Perhaps unsurprisingly, public discord inside Iran is growing fast. The regime is viewed widely as neglecting what is essential – around a third of homes are frequently without power – while mandating what clothes citizens should wear and what websites they can visit.

✍️Dr Alastair Masser

If you think you’ve had a tough year, spare a thought for Ayatollah Khamenei. Iran’s Supreme Leader has had a 2024 to forget, with his sulphurous statesmanship boosting opposition towards his regime at home and abroad, while allies fall by the wayside. The speed with which Bashar al-Assad’s re...

16/12/2024

The debate about when ‘liberal’ first acquired a political meaning has been resolved. The answer is the 1770s, when the adjective ‘liberal’ became the name of the policy orientation against government restriction, government monopoly and protectionism, and in favor of individual liberty, premised by a stable, functional system of governmental authority.

This policy orientation was christened ‘liberal’ by Scotsmen Adam Smith, William Robertson and others. In 1776, Smith’s ‘The Wealth of Nations’ advanced the liberty principle as a policy maxim. That book built a case for a presumption of liberty. It was enormously influential.

In the decades that followed, the adjective ‘liberal’ was exported from Britain to the continent and gave rise to the nouns ‘liberal’ and ‘liberalism’. All of this has been established thanks to new analysis made possible by the digitisation of historic texts.

The first political liberalism, then, proclaimed the policy orientation of Adam Smith. But, 100 years later, ‘liberal’ began to acquire a meaning contrary to the original political meaning. That inversion began first in Britain and, in the early twentieth century, began to grow in North America, where the inverted meaning became pronounced.

These confusions about the true meaning of ‘liberal’ will not subside any time soon.

But consider a question that brings us back to the 1770s: how did liberalism’s Scottish vanguard decide on the name of their policy orientation?

For centuries, the adjective ‘liberal’ denoted aspects of liberality. To be liberal was to be generous, munificent, indulgent, as in ‘with a liberal hand,’ or open-minded, tolerant, free from bias or bigotry, and generally befitting a free man, as in ‘liberal arts’ and ‘liberal sciences’. These meanings were not political, and ‘liberal’ was not used to label a kind of politics.

Building on this traditional understanding, Smith and others started, when discussing policy and politics, to write of ‘liberal principles,’ ‘the liberal system,’ ‘the liberal plan,’ ‘liberal policy,’ ‘liberal government’ and ‘liberal ideas’.

‘Liberal’ was fitting, firstly, because ‘liberal’ and ‘liberty’ look alike. They share the morpheme ‘liber’. That likeness held potentiality for infusing ‘liberal’ with a strong link to liberty.

✍️Daniel B. Klein and Erik W. Matson

Fresh analysis of historical texts has revealed the origin of economic liberalism

13/12/2024

Founders have better things to do than care about politics. But what if government won’t let them get on with creating the future? We may be about to find out.

This week saw the launch of a new political movement for reviving economic growth in the UK. As previewed on CapX last week (a reminder that you should sign up to our daily briefing to stay ahead of the news), Looking For Growth, also known simply as LFG, wants to build a network to unlock Britain’s potential. Its message to Britain’s decline-managing politicians is simple: let us build. Or, in cruder terms: Let’s F***ing Go!

LFG’s analysis – that Britain is currently trapped in a growth emergency thanks to an inability to get vital projects off the ground – is hardly original. Its allies include all those, including CapX and our colleagues at the Centre for Policy Studies, who see planning reform and unblocking the building of housing and infrastructure as the key to restoring our economic dynamism. To some extent, even Keir Starmer and his Government accept the tenets of Yimbyism and the need to get Britain building again.

The trouble is, it’s all far too slow. Endless consultations and Nimby complaints mean that even those who see the problem haven’t been able to break the deadlock. Today’s news that the UK economy contracted by 0.1% in October was a fresh sign of our continuing stagnation.

Enter LFG, a group of entrepreneurial, can-do innovators, who refuse to put up with this any longer. Their mission is not so much to diagnose the problem and offer solutions, but to apply the necessary pressure to get much-needed change to actually happen. It is headed up by, among others, Dr Lawrence Newport, who succeeded in getting XL Bully dogs banned and is currently also leading the Crush Crime campaign to impose longer sentences on serial offenders.

✍️Marc Sidwell

A new movement wants to fix our dysfunctional politics and unlock growth

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