Boris Johnson is London Mayor

I stayed up last night to follow the results of the mayoral elections in London. I had quite an interest in the election being somebody who will be living in London over the next few years but also as someone who had previously met Boris.

Both Boris and outgoing mayor Ken Livingstone gave really good speeches when the results were announced. I was quite impressed at how Boris planned to work across party differences, and it almost seemed like he offered Ken and Liberal Democrat candidate Brian Paddick a job in his administration.

It’s an important job and I believe this appointment makes Boris one of the most senior Conservative politicians in the country. The BBC has a short biography of Boris which I felt was really interesting. I really recommend “Boris: The Rise of Boris Johnson” by Andrew Gimson as a more complete biography of our new mayor.

I met Boris at a networking event last year. In typical Boris style, he turned up about half an hour late but nobody seemed to mind. He was the main attraction of the evening. Boris spoke about his political career and about some of the controversies he has been involved politically. He was the friendly personality that you see on television and I think he’s a genuinely nice guy. People have publicly wondered whether he is competent for the job because of the number of gaffes he has made. I gained the impression that he was just very upfront and much more willing to have a laugh than most politicians were. It is true that the way he acted on the London campaign trial could be described as “new Boris” so it’d be interesting to see what happens when he starts on Monday!

I think the Boris Versus Ken contest has given the Barack Versus Hillary contest some competition for most interesting political battle of the year.

Boris Johnson: "Is Fatboy Slim a DJ?"

Tory MP for Henley and Mayor of London candidate Boris Johnson is set to release a single called “Is Fatboy Slim a DJ?”. The producers of the single say that the single will be released sometime after the election for Mayor of London (1st May). A video is currently in production but you can listen to a snippet from the dance mix on the Borisborisboris.com website.

I met Boris last year and he is a really lovely person. He talked about his career in politics and many of the controversies he’s been in. and I was also lucky enough to ask him a few questions about education & young people and get an autograph. I wish Boris the best in the Mayor for London elections next month and in hitting the number 1!

If you’re a fellow Boris fan, I strongly recommend reading his biography!

Iraq War: $25,000 per US household

The Economist reports on a study by two economists on the costs of the Iraq War for American households. The study wasn’t simply a look through the government balance books to look for direct financial costs: it also looked at the knock-on impact on oil prices, number of deaths or injuries caused (and perhaps controversially putting a financial value on these lives), bonuses paid to recruits who were put off by the war and also the opportunity cost (see my previous post on cost-benefit analysis).

The opportunity cost is the benefits to the USA which would have been gained if it didn’t go to war in Iraq: for example the money which went to the war might have funded better education or healthcare insurance.

The study was carried out by Joseph Stiglitz, a Nobel prize-winner in economics and Linda Bilmes, budget and public finance expert from Harvard. They found the total costs were $3 trillion. The Economist asks:

SUPPOSE that, five years ago, George Bush had asked every American household to stump up $25,000 to pay for an imminent war on Iraq. How would they have responded?

Of course, this study doesn’t conclude that the Iraq War was a bad idea. To weigh that up, you need to look at the benefits which were gained. We now know Saddam doesn’t have weapons of mass destruction. Is that knowledge worth $3 trillion?

What I really want to get across is this: economics and cost-benefit analysis offers a much better way of analysing whether government policies have been successful. It’s great to have an opinion based on what is published in the media but things are not always as they seem. Cost-benefit analysis offers a logical method to evaluate the consequences of a policy.

Globalisation of Football

The British tabloid, Daily Mail, earlier this week published an opinion piece talking about the commercialisation and globalisation of football. The article highlights the performance of British clubs in the UEFA Champions League:

You may not have noticed, or even care, that out of the eight clubs that have just made it into the last round of the European Champions League, four are English.

That may not sound like a big deal.

But if one considers that clubs from dozens of European countries are eligible, and that these countries collectively speak for hundreds of millions of people, it is interesting that half of the finalists should come from a single country – England – with a population of only 50 million.

Germany has one team out of the eight, Spain another. Italy and Turkey account for the other two. (France, note, has none.)

It then goes on to talk about how football in Britain has been transformed in the last 25 years with higher attendances; racism has been stamped out; stadia are now state-of-the-art.

If that’s not enough evidence of the commercial nature of football, England’s failure to qualify for Euro 2008 is believed to cost the British economy £1billion.

My interest in football is only really a passing one but what I found really interesting was how this article looked at football from an economics viewpoint and then argues for protectionist policies.

To take some of the Daily Mail’s articles in turn:

Protectionism – Protecting British footballers 

In the same year that four “English” teams have made it into the last eight of the Champions League, England’s national team has failed to qualify for this summer’s European Cup.

The article argues that because so many foreign players are playing in British sides, British players never get the opportunity to reach the top flight. This is a parallel argument to trade barriers in international trade. Some countries argue that if they import lots of food from abroad cheaply, domestic farmers will never be able to develop and would have to shut up shop.

According to economics, protectionism is a very bad thing. Let’s take tea: in Britain we import our tea from countries such as India. Why? Because they’re better at producing tea. They can produce more tea, and sell it for less. We could impose some trade barriers and encourage British tea growers. But our climate and weather just don’t suit growing tea. So we use greenhouses and contribute to climate change and our tea costs more to produce. Or alternatively, we could stick to producing something that we’re good at (e.g. financial services). If we trade our financial services for tea from India, then both countries benefit.

Bringing this all back to football, does foreign players playing in British clubs really damage the chances of British footballers? I don’t think so. Football brings a lot of money into Britain; money which then goes towards academies and training for youngsters. A substantial number of young people in Britain do play football in their school breaks.

A loss of national identity

And yet this loss of local or even national identity in the Premier League is an extreme version of what has happened in our country. Mass immigration is justified on the grounds of greater economic efficiency. One consequence, though, is the weakening of a sense of belonging.

An interesting way of arguing against immigration, a favourite topic of the Daily Mail. But of course immigration has brought huge benefits for Britain. Migration-friendly policies mean that companies situating in the UK have access to the best workers from all across the world. These companies and workers contribute to the economy through taxation as well as greater efficiency.

Of course, there has been a homogenisation of city centres across the world. You’ll find a McDonalds in almost every large city across the world. But what is happening is that we’re all gaining from being able to experience more cultures. Visiting a typical city centre, you might have a choice of Japanese sushi, Italian pizza or American hamburgers. Are we really losing our identity or are we just benefiting from access to more?

The free movement of labour has also done wonders to for tackling world hunger and poverty. We might have nurses come to Britain from poor African countries; they earn money here and send it back home. They may, at a later date, take those skills home. Indeed, it is believed that globalisation and trade has done more for the third world than handouts ever have.

Similarly in football: who’d have expected some of the poorer third-world countries to participate in the World Cup? Skilled footballers playing for British clubs gain experience; this benefits their national side in the World Cup.

Globalisation is a win-win situation. It makes no sense to argue for protectionism: everybody loses out. That applies both to international trade and to football.

Anti-terrorism costs 10x the benefits

The Economist reports on a cost-benefit analysis of anti-terrorist spending. Economists at the University of Texas found that the benefits gained by tackling terrorism have been a tenth of the costs.

For those of us who don’t study economics of pretend to know anything about it, cost-benefit analysis is a method used to make decisions between competing choices, or to determine whether a decision was beneficial.

What is cost-benefit analysis? 

Let me indulge you with an example: The building of Terminal 5 at London Heathrow airport. When the government decided whether to build Terminal 5, they would have used a cost-benefit analysis.

The first step is to list all the costs: this would include the cost of the building materials and workers, upgrade to surrounding infrastructure and increased security. As well as the direct financial costs, effects such as greater noise pollution are quantified and someone must make a judgement – something like “the greater levels of noise caused to residents by Terminal 5 equate to £1bn of damage”.

After listing all the costs to society, the benefits to society are then listed. For Terminal 5, this would be time saved for travellers in airports, jobs provided to local residents and so on. After completing the cost-benefit analysis, we then look at whether the cost or the benefit is greater. If the benefits are greater than the costs, it is a good decision: if we spend £5bn and get a return of £10bn, we’re £5bn better off. But if costs are greater than the benefits, we are all made worse off by the building of Terminal 5.

Anti-terrorism

Economics lesson over… The study found the US has spent $65billion on homeland security since 2001, or $200bn if this is broadened to include the “War on Terror”. By my own calculations, that is $110 per person in the USA per year.

Anyway… the study found terrorism only reduced economic activity by $17 billion. So fighting terrorism cost $200 billion and only $17 billion of benefits were gained, the benefits are about a tenth of the costs. Or in other words, the country is $180 billion worse off.

The Economist adds:

In 2007 Britain’s prime minister, Gordon Brown, said his country had disrupted 15 al-Qaeda plots since 2001. Yet so big is counter-terrorism spending and so limited is terrorism’s economic impact that, even if 30 attacks like the London bombings of July 2005 were prevented each year, the benefits would still be lower than the costs.

Now of course, there are a lot of criticisms to looking at anti-terrorism measures in such a way. Many people argue that the value of a human life is infinite or very high; it doesn’t matter if we spend millions to save a small number of lives. Additionally, there is the psychological effect: would we all be as happy as we were if the government did nothing about terrorism and just let it happen?

I think this study really highlights some great points. I feel that perhaps the government has been curbing too many civil liberties and freedoms lately under the guise of anti-terrorism measures. Take ID cards in the UK… very expensive, liable to data losses and presenting fairly small benefits.

I don’t think anybody should take this study to say that we shouldn’t try and fight terrorism, but perhaps, let’s reconsider just how we do it and make sure that we’re not harming ourselves more than the terrorists have.

Cyber Warfare

Just a few musings:

  • if a country launches a cyber-attack on another country is it considered a declaration of war? A cyber-attack could arguably have more damage than conventional weapons: it could take electricity and security systems offline which could endanger lives.
  • Is a country attacked by electronic means allowed to respond using conventional bombs?
  • Given the amount of danger a cyber-attack could cause, should it be added to the list of prohibited weapons which currently include biological, chemical and nuclear weapons?

Are Particle Accelerators Worthwhile?

In particle accelerators such as those at CERN in Geneva, Switzerland and Fermilab in Chicago, IL, scientists accelerate particles to high speeds with huge amounts of energy, colliding particles, to probe the building blocks of matter – the quarks, bosons, leptons, the neutrinos.

Just recently, scientists at the Tevatron in Fermilab, Chicago believe they have finally found the elusive Higg’s boson, the one member of the standard model of particle physics which, to date, hasn’t yet been found. The Higg’s boson is believed to be the particle which gives particles mass.

Large Hadron Collider

Right next to Geneva airport in Switzerland, sits CERN. It’s a huge particle physics research laboratory with a massive particle accelerator. CERN is funded by the 20 countries which are signatories of the CERN convention.

CERN 

The picture shows a circular ring which is the particle accelerator at CERN, and Geneva Airport is in the foreground. The Large Hadron Collider, as it is now known as is located about 100m underground and has a circumference of 27km. It even crosses the border between France and Switzerland; several times!

The Large Hadron Collider is set to go through engineering tests next month and to open later this year. It cost around $2.5billion USD to build. Considering that one of the reasons the LHC was built was to look for the Higgs boson, the Europeans will surely be pretty pissed if the Americans pipped them at the post with a fairly old piece of kit.

The Future?

Although the LHC isn’t even yet complete, scientists are already planning upgrades and improvements.

Physicists are already campaigning for a successor to the LHC – the International Linear Collider (ILC). The cost is estimated at $10bn with an aim to develop a Grand Unified Theory of everything combining the forces of nature: electromagnetism, gravity and the nuclear forces.

Is it worth it? 

Though I personally think it’s be great to develop a unified theory, I do wonder whether it’s worthwhile to spend $8.2billion on a particle accelerator. It might tell us a little bit more about why there is so much matter and so little antimatter around, and the conditions in the first seconds of our universe, right after the Big Bang.

But is there any use in knowing that? I certainly understand the desire simply to discover and to find out something, simply for the knowledge. But at the day, how do we benefit from understanding sparticles, muons or string theory?

At the same time, $8.2billion could do so much good elsewhere. Maybe we can develop treatments for cancers or AIDS, which could save millions of lives. We could find a solution for global warming: a problem which will affect each and every one of us, every day.

So I suppose I’d like to put out this question:

Is it worth pouring over $8billion into a project which ultimately will not lead to any practical benefit or technology? Should we be putting so much money into a new particle accelerator when we’ve just built one at great expense, even though it turns out that we may not have needed it after all?

Edit: This article originally incorrectly stated $2bn was spent on the LHC. The actual figure is closer to $10bn according to The Economist. 

Bush and Clinton

BBC News reports that Hillary Clinton is due to stand for US presidency in 2008. If she succeeds in the presidency race, she will become the first female president of the US.

This is what she said:

"The stakes will be high when America chooses a new president in 2008

"Only a new president can regain America’s position as a respected leader in the world.

"This is a big election with some very big questions. How do we bring the war in Iraq to the right end?" she asked, in addition to mentioning several domestic issues, including health care, the environment and "energy independence".

She is of course the wife of the 42nd president, Bill Clinton. If she does succeed in the race, the list of presidents would go a little bit like this…

41. 1989-1993 George H. W. Bush

42. 1993-2001 Bill Clinton

43. 2001-2009 George W. Bush

44. 2009- Hillary Clinton

Most interestingly George’s smaller brother Jeb Bush, currently governor of Florida, has said that he won’t run for president in 2008. However, he could run in 2012. George has said Jeb would make a great president. Senior Bush wants Jeb to run. Washington Post:

In May 2005, King asked the senior Bush if he wanted Jeb Bush to run for president.

"Someday I would, yes," George H.W. Bush said.

"Is the timing wrong now, though?" King asked.

"Yes. The timing’s wrong," Bush said. "The main thing is, he doesn’t want to do it. Nobody believes that, but . . ."

If Jeb does indeed run in 2012 (or even 2016 if Hillary gets two terms), five presidents in a row would have run in the Bush and Clinton families. Potentially, the Bush-Clinton families could be in power for 36 successive years.

Just a thought.