Quotulatiousness

February 20, 2013

Incentives matter (a lot) — the growth of “Disabled America”

Filed under: Economics, Government, USA — Tags: , , , , — Nicholas @ 09:40

Colby Cosh discusses the rise and rise of “Disabled America”, the increasing number of adults of working age who are claiming disability support:

Just looking at fiscal and demographic stats from California will cause a cold, invisible hand to clutch at one’s throat, but talking to an endless series of seemingly able-bodied people who casually disclaim any capacity for honest work is even more chilling. When I got home I found out it’s not just California’s problem. In the OECD’s 2010 “Going for Growth” report, the percentage of the working-age labour force (20 to 65 years) receiving any kind of disability benefit or worker’s compensation is estimated at around 5.1 per cent for Canada. For OECD nations as a whole, the figure is 6.7 per cent.

Northern European welfare states, amiright? But for the super-competitive U.S.A., land of the proudly threadbare social safety net, the number was 9.2 per cent.

[. . .]

There is a handful of economists working on the problem without ever gaining much traction in the popular press; the atmosphere of general crisis hasn’t made it any easier for them to be heard. Reading their papers and seeing them plead for the same reforms every few years is almost as depressing as contemplating Disabled America itself. Just as social security for the aged was devised at a time when workers could expect only a few years of life after clearing 65, social security for the disabled was conceived at a time when manual labour was the norm and “disability” denoted identifiable, incapacitating physical injury. No one envisioned a world in which clerical and “knowledge” work had taken over, but the number of people judged totally unable to work had skyrocketed, owing to vague musculoskeletal disorders, unverifiable chronic pain and an astronomical expansion in the definitions of mental illnesses.

If the system is set up to provide more income through disability payments than through a paying job, there will be a tendency for minor ailments to be parlayed into a disability. When the incentives are rigged to encourage a certain kind of behaviour, people will adapt to take advantage of those incentives. If the system will effectively reward you for being “disabled”, it should be no surprise that we get more people applying for disability support.

Even if the economic climate was better, it’s not likely that governments will crack down on those abusing the system for a couple of solid reasons. First, it’s a public relations nightmare waiting to happen and every government worker knows that you never want your name to appear in the media in this kind of context. Second, people on the disability programs don’t count as unemployed and therefore reduce the pressure on the government to “do more” about jobs. And third, it’s easier to just go with the flow and not try to create any ruckus.

January 11, 2013

In praise of mergers and takeovers

Filed under: Business, Economics — Tags: , , , — Nicholas @ 11:15

In The Register, Tim Worstall points out that most mergers lose money, but that they’re good for the economy anyway:

The final one of the four is the vital part that takeovers play in the clean up of the economy’s failures. Take a company that goes bust. The whole point of bankruptcy proceedings is to make sure that its assets aren’t then left, orphaned, or chained to an unpayable debt. The idea is to get them off into someone else’s hands where they might be put to good use. This is true of contracts, or the workforce, of the land and any other asset. It might be that the machinery is worth most as scrap. Or the factory is worth most as a supermarket. Or it could be that the OS coders and their desks would be best put to writing games: but under different management.

And it’s this last part of the whole system that our economists think is the most important. When failure happens, the vital thing is to clean up the mess and quickly. Don’t leave potentially useful assets orphaned but auction them off and get them working again. The price that is realised doesn’t matter very much at all: from the view of the entire economy, getting people and assets back to work pronto is the vital part. So important is this that we’re urged to overlook all of the above problems with takeovers and mergers to allow this part of it to function as efficiently as possible.

Yes, most takeovers lose money for the shareholders of the company doing the buying. This is often because the interests of the management diverge from those of those owners. Similarly, many companies are kept running longer than they should be for those selfish management reasons. But we put up with all of that (although try to constrain it) so that the scavenging upon the assets of the bankrupt can be as efficient as possible. For this is the very heart of the success of capitalism: Not how the successful make profits, but how the system deals quickly and cleanly with failure.

Public choice theory is neither Left nor Right

Filed under: Bureaucracy, Economics, Government — Tags: , , , , — Nicholas @ 00:01

In his obituary for the late James Buchanan, Radley Balko debunks the meme that public choice theory — of which Buchanan was one of the founding fathers — is by nature anti-left:

The discrepancy struck me at the time, and has stuck with me ever since. Buchanan’s work is often seen on the right as a critique of the left’s faith in public service. He showed that like everyone else, public servants tend to serve their own interests, not necessarily the interests of the greater public good. When a new federal agency is created to address some social ill, for example, there’s a strong incentive for the employees of that agency to never completely solve the problem they’ve been hired to solve. To do so would mean there would no longer be a need for their agency. It would mean layoffs, smaller budgets, even elimination entirely. In fact, there’s a strong incentive to exaggerate the problem, if not even exacerbate it. The agency itself is never going to get blamed for the problem. So exaggerating it helps the agency argue for more staff and a larger budget. (Thus, Milton Friedman’s axiom, “Nothing is so permanent as a temporary government program.”)

It doesn’t even need to be a deliberate thing. When your livelihood, your self-worth, and your career depend on things looking a certain way, there’s always going to be a strong incentive for you to see them that way.

Conservatives have always bought into public choice theory when it comes to paper-pushing bureaucrats. But when it come to law enforcement, they often have the same sort of blind faith in the good intentions and public-mindedness of public servants that the left has for, say, EPA bureaucrats. But public choice problems are as prevalent in law enforcement as they are in any other field of government work. And you could make a strong argument that it’s more important that we recognize and compensate for the incentive problems among cops and prosecutors because the consequences of bad decisions can be quite a bit more dire.

If we reward prosecutors who rack up convictions with reelection, higher office, and high-paying jobs at white-shoe law firms, and at the same time provide no real sanction or punishment when they break the rules in pursuit of those convictions, we shouldn’t be surprised if we start to see a significant number of wrongful convictions. If we reward cops who rack up impressive raw arrest numbers with promotions and pay raises, and at the same time don’t punish or sanction cops who violate the civil and constitutional rights of the people who live in the communities they serve, we shouldn’t be surprised if we start to see a significant number of cops more interested in detaining and arresting people than in protecting the rights of the citizens they encounter on their patrols. We can certainly hope that a sense of civic virtue and veneration for justice will override those misplace incentives, but it would be foolish — and has been foolish — for us to rely on that. Incentives do matter.

Any time I link to an article, it’s assumed that I suggest you read the whole thing. In this case, it’s a very strong recommendation that you read the whole thing.

November 4, 2012

Rethinking software patents

Filed under: Business, Law, Technology — Tags: , , , , , — Nicholas @ 00:01

Software patents are becoming a clear and present danger to innovation:

The basic problem being that there are so many patents, covering so many things, that the system is in danger of eating itself like Ourobouros.

    When Dan Ravicher of the Public Patent Foundation studied one large program (Linux, which is the kernel of the GNU/Linux operating system) in 2004, he found 283 U.S. patents that appeared to cover computing ideas implemented in the source code of that program. That same year, it was estimated that Linux was .25 percent of the whole GNU/Linux system. Multiplying 300 by 400 we get the order-of-magnitude estimate that the system as a whole was threatened by around 100,000 patents.

    If half of those patents were eliminated as “bad quality” — i.e., mistakes of the patent system — it would not really change things. Whether 100,000 patents or 50,000, it’s the same disaster. This is why it’s a mistake to limit our criticism of software patents to just “patent trolls” or ”bad quality” patents. In this sense Apple, which isn’t a “troll” by the usual definition, is the most dangerous patent aggressor today. I don’t know whether Apple’s patents are “good quality,” but the better the patent’s “quality,” the more dangerous its threat.

It’s near impossible to develop new software when there are so many such patents out there. Further, even if you tried to get clearance (or signed up to licenses and so on) to use them it would be near impossible.And we do need to recall what the purpose of a patent system is. No, it isn’t to provide and income to those who create inventions. That’s only the proximate aim: the ultimate aim is to maximise the amount of invention and innovation.

The economics of patents accepts that there is a tradeoff here. Yes, we’d like people who come up with useful new things to make money. Because that incentivises people to work on coming up with interesting new things to all our benefit. However, we also want people to be able to create derivative innovations and inventions. If our protection of the original inventors is too strong then we limit this. What we want is a system that hits the sweet spot, of encouraging the maximum amount of both, original and derivative. The problem of course being that to encourage one we weaken the incentives to do the other, either way around.

April 7, 2012

Rationing is not the optimal solution to shortages

Filed under: Britain, Bureaucracy, Economics, Environment — Tags: , , , , — Nicholas @ 10:36

Tim Harford on the recently imposed “hosepipe bans” in parts of southern England:

But it was chucking down with rain this week. It was snowing, too. How can we be talking about drought?

Water isn’t like electricity: it can be stored, within limits. You don’t get a water shortage if you have a dry week and you don’t cure a water shortage with a few April showers. You get water shortages after a couple of years of low rainfall.

And how do you cure water shortages?

Hosepipe bans, apparently.

Is that a good idea?

Probably not. It’s appealing for the water companies because the revenue they receive is capped by the regulator. They can’t make more money by supplying as much water as possible to as many joyful customers as they can reach. It’s easier to just yell at customers to stop watering their lawns. It might be annoying but the water companies don’t lose much as a result.

[. . .]

You’re not suggesting a “flushing the toilet ban”?

I am not suggesting any kind of ban. It’s the idea of the ban that’s problematic. A new article by economists Jeremy Bulow and Paul Klemperer analyses the advantages to consumers of rationing schemes rather than simply raising the marginal price. The bottom line: the advantages are typically illusory. Rationing reduces supply, relative to what could be provided if prices were higher. It also misallocates resources — there’s no reason to expect that the people who get the scarce product are the ones who value it most. And rationing encourages all kinds of fun and games to try to get around the rules.

So you just want water to become more expensive.

I hope water will become cheaper, on average. But I certainly want it to be expensive to use lots of water at a time of shortage. We want everyone to have an incentive to save some water and the obvious way to do this is through water metering.

January 14, 2012

Making the War on Drugs even more dangerous

Filed under: Cancon, Health, Law, Liberty — Tags: , , , , , — Nicholas @ 11:25

Colby Cosh points out that the recent spate of deaths from ecstasy overdoses in western Canada is at least as much a result of the way the so-called War on Drugs is being prosecuted:

In recent weeks, it seems, adulterated ecstasy (MDMA) has left Alberta and B.C. with a sizable heap of young corpses. A tragedy has thus come home to roost in the West: namely, the tragedy of policy that incentivizes adulteration of drugs that, if manufactured in the open and checked for purity, would kill hardly anybody. Pure MDMA has a larger “therapeutic index” — a wider safety margin for overdose — than alcohol. It would probably make a pretty reasonable substitute for alcohol in many settings if we were to sit down and rebuild a drug culture from scratch. But over the past ten years or so, both Liberal and Conservative governments have worked to increase penalties for and monitoring of the flow of “precursor chemicals” used in the manufacture of MDMA.

It has been their goal to make pure MDMA more difficult to manufacture; when precursors are seized it is hailed as a triumph. But illicit drug factories never do put out the follow-up press release announcing that they’re putting less MDMA in their “ecstasy” and replacing it with other party drugs that have much smaller safety margins, or with drugs that interact dangerously with MDMA. And when rave kids die as a result, the RCMP chooses not to pose imperiously alongside the body bags giving a big thumbs-up. They are eager to take credit only for the immediately visible results of their work.

[. . .]

The debate over “harm reduction” in Canada has, for the past year or so, revolved around the Insite clinic in East Vancouver. That debate has been fraught with as much confusion and misinformation as drug moralizers could possibly create, but the core message, I think, has gotten through to Canadians, and certainly to the gatekeepers of their media. The message is this: we have only meagre power to stop people from abusing heroin if they are determined to do that. We do have, however, significant ability to protect people from the problems of a poorly-titrated or actively adulterated supply of heroin. The morbidity and mortality burden from the actual addiction itself, compared to the burden resulting from the drug’s illegality, is both modest and intractable. Insite is basically designed to yield the benefits that allowing heroin to be issued by prescription would bring.

Canada is apparently too under-equipped with libertarians to see that the logic extends to ecstasy, which about a million adult Canadians have used at least once. Yet rave-scene users have already been implementing “harm reduction” philosophy on the dance floor for decades. They react as best they can to adulteration risks by sharing information about dealer reliability, and they mitigate the most important medical peril of MDMA — the possibility of hyperthermia, i.e., internal overheating — by making sure ravers have access to cool rooms and plenty of fluids.

No government of any ideological stripe has ever successfully kept intoxicants away from eager customers: not the US government in Prohibition, not the Soviet government (on-the-job drunkenness was endemic), not even modern day prison authorities (drugs are plentiful behind bars). The “War on Drugs” has — predictably — failed. The question should be how to minimize the harm to drug users and society at large, because drug prohibition is a massive failure.

December 9, 2011

Basic rule of political economics: subsidies result in higher costs

Filed under: Economics, Education, Government, USA — Tags: , , , — Nicholas @ 00:03

Virginia Postrel explains how federal funding to university students has created price inflation among universities:

As veteran education-policy consultant Arthur M. Hauptman notes in a recent essay: “There is a strong correlation over time between student and parent loan availability and rapidly rising tuitions. Common sense suggests that growing availability of student loans at reasonable rates has made it easier for many institutions to raise their prices, just as the mortgage interest deduction contributes to higher housing prices.”

It’s a phenomenon familiar to economists. If you offer people a subsidy to pursue some activity requiring an input that’s in more-or-less fixed supply, the price of that input goes up. Much of the value of the subsidy will go not to the intended recipients but to whoever owns the input. The classic example is farm subsidies, which increase the price of farmland.

[. . .]

This doesn’t mean that colleges capture all the aid in higher tuition charges, any more than capital-equipment companies get all the benefit of investment tax credits. But it does set up problems for two groups of students in particular. The first includes those who don’t qualify for aid and who therefore have to pay the full, aid-inflated list price. The second encompasses those who load up on loans to fill the gaps not covered by grants or tax credits only to discover that the financial value they expected from their education doesn’t materialize upon graduation.

That’s the situation many young people find themselves in today, which is one reason for their anger. The other is a widespread feeling, which the recession has intensified, that higher education is unfairly insulated from the everyday competitive pressures most people have to cope with. Instead of having to find ways to operate more efficiently and deliver ever-more value without raising costs, the way private-sector managers do, college administrators seem able to pass higher and higher bills on to their customers and the public.

October 21, 2011

Incentives matter, police edition

Filed under: Law, Liberty — Tags: , , , , , , , — Nicholas @ 10:00

Jonathan Blanks explains that the incentives provided to police officers clearly do influence their behaviour:

Last week, former undercover police officer Stephen Anderson told the New York State Supreme Court that planting drugs on innocent people was so common that it didn’t even register emotionally to him. The story is starting to get traction in the media as an egregious example of police corruption, but it’s notable only because of the admission to the practice in open court. Each year, there are hundreds of cases in which police officers are caught stealing, using, selling, or planting drugs or pocketing the proceeds from drug busts. Despite the obligatory PR protestations that any given instance of corruption is an isolated case, the systemic, legal, social, and economic incentives in every law enforcement agency in America combine to make police corruption virtually inevitable. And with no other category of crimes are these incentives stronger than with drug crimes.

Anderson testified that drugs would be seized from suspects at a given bust, divided, and then used again as evidence against other people on site (or at a time later) who had nothing to do with the initial arrest. This was, in part, due to established drug arrest quotas the officers needed to meet. As public servants, police departments face the same budgetary pressures as any other government entity and thus their officers are required to meet certain benchmarks set by the powers that be. Added to the normal budgetary justification, however, many police officers are in the position to confiscate cash and property that can be sold at auction thanks to civil asset forfeiture laws. Many departments across the country keep a percentage or the entirety of forfeiture proceeds, so pressure to maintain a certain level of drug arrests is something straight out of Public Choice: 101.

October 12, 2011

The “Ontario education system [is] a remarkably clean and ongoing experiment in the effects of school choice”

Filed under: Cancon, Economics, Education, Government, Liberty — Tags: , , — Nicholas @ 08:22

Stephen Gordon explains why Ontario’s two parallel school systems are helping to prove the efficacy of school choice:

Public funding for the Ontario separate school system is sometimes a controversial topic for reasons I won’t get into here. But by offering one set of parents with the choice of which school they can send their children, the Ontario education system has set up a remarkably clean and ongoing experiment in the effects of school choice. Catholics have the choice of sending their elementary-school aged children either to separate or to public schools, and non-Catholics do not have this choice.

Elementary school administrators in the two systems face very different constraints:

  • Public schools have a monopoly on non-Catholics who can’t afford private school.
  • Separate schools face a clientele that always has the option of switching to the public school system.

Of the two, separate school administrators have the greater incentive to provide higher-quality education: if the separate system were widely known to be dysfunctional, it would likely disappear.

Basic economics would predict that the competitive pressures on separate school administrators would provide stronger incentives to provide better education outcomes. And that seems to be just what is happening. A recent study (pdf) by McMaster University economists Martin Dooley and Abigail Payne in collaboration with UC-Berkeley’s David Card that examine these effects finds “a statistically significant but modest-sized impact of potential competition on the growth rate of student achievement.” In a related study using similar data, a CD Howe study done by Wilfrid Laurier’s David Johnson finds that of the 13 ‘above-average’ school boards, 11 are in the separate school system, while none of the 10 ‘below-average’ school boards are.

June 26, 2011

Skype’s PR problem over their sneaky options plan

Filed under: Economics, Law, Technology — Tags: , , , , , — Nicholas @ 13:35

Over my career in the software industry, I’ve worked for several companies who provided a stock option plan as part of their employee compensation scheme. Exactly one of those companies’ programs ever provided me with any actual tangible benefit (the company was bought, and the options were bought back at market rate). It netted me a couple of thousand dollars. Options may have been a way to get rich in the early 1990s, but they’re pretty much a longshot lottery ticket now.

Skype has found a sneaky way of making that longshot chance even more unlikely to pay off:

Employees aren’t even able to keep the vested portion of their stock options. The vast majority of stock options granted to startups have a vesting period, typically four years, with chunks of those options becoming vested during that four year (or whatever) period. If options are vested you can exercise them, pay for the stock and own that stock. At least that’s the way things have been done over the decades.

Skype did things differently. With Skype stock options the company has the right to not only terminate unvested options, but also vested ones. And any vested options that you’ve exercised (meaning you paid cash for them) that were turned into actual shares could simply be bought back by the company at the price you paid, regardless of their current value.

Turning your potentially lucrative stock holdings (if the value was higher than your strike price) into a mandatory zero-interest savings account. Nice.

The fact that Skype adopted this plan in the first place isn’t in itself “evil.” But they’ve done two things wrong from what I can tell.

First it appears that employees had no idea what they were signing and they probably expected it would be a normal stock option type deal that everyone in Silicon Valley has done for decades. If Skype wasn’t crystal clear with them, and explained it in normal human language that they understood, then these employees were intentionally misled. Skype had an incentive to make things unclear, because employees would demand far more compensation if they had understood. The fact that employees are so surprised that this is happening suggests that they didn’t understand the agreement. This is what lawyers call fraud.

The second thing Skype did wrong was not to waive this clause with the looming acquisition. The company can deny all day long that they fired these employees for cause, not to save a few dollars on stock options. But the appearance is the exact opposite.

May 26, 2011

Here’s a different way to pay for socialized medicine

Filed under: Economics, Government, Health, USA — Tags: , , — Nicholas @ 09:35

Kevin Drum has an interesting proposal in Mother Jones:

So here’s an idea: why not reform Medicare by means testing it? Conservatives should love this idea.

Here’s how it works. Basically, we leave Medicare alone. Oh, we can still go ahead with some of the obvious reforms. Comparative effectiveness research is a no-brainer for anyone who’s not part of the Republican leadership. Ditto for some of the delivery reforms on the table. Or allowing Medicare to negotiate for lower prices. It would be great if that stuff works. But if it doesn’t, then people will need to pay more for their care. So why not have dead people pay? They don’t need the money any more, after all.

So Medicare stays roughly the same, but every time you receive medical care you also get a bill. You don’t have to pay it, though. It’s just there for accounting purposes. When you die, the bill gets paid out of your estate. If your estate is small or nonexistent, you’ve gotten lots of free medical care. If it’s large, you’ll pay for it all. If you’re somewhere in between, you’ll end up paying for part of the care you’ve received.

Obviously this gives people incentives to spend all their money before they die. That’s fine. I suspect they wouldn’t end up spending as much as you’d think. What it does mean, though, is that Medicare has first claim on their estate, not their kids. But that seems fair, doesn’t it?

It has the virtue of acknowledging that free healthcare isn’t actually “free” at all.

October 1, 2010

Freakonomics trailer

Filed under: Economics, Humour, Media — Tags: , , — Nicholas @ 16:23

Since reading the book(s), I often find myself in discussions using the term “incentives” (especially in the sense of perverse incentives: those which produce the opposite of the desired effect). I think there’s much value in this approach to problem solving, and I’m looking forward to seeing the movie.

Update: I guess I’ve gotten out of the habit of seeing movies at all. Freakonomics is in the theatres now, but I seem to have uninstalled the movie theatre information app on my iPhone . . . it figures: it doesn’t appear to be playing anywhere near here.

September 22, 2010

NFL still not setting the right example for concussed players

Filed under: Football, Health — Tags: , , — Nicholas @ 07:20

Gregg Easterbrook shows that the NFL’s thoughts about the proper way to address concussions still haven’t changed:

The core problem is that football coaches at the high school, college and professional levels are rewarded for winning games but not penalized for allowing their players to be harmed. A coach who sits a player down out of concern for the player’s health may pay a price, if a game is lost. A coach who sends a concussed player onto the field may never be penalized in any way if that player suffers another concussion. Human beings respond to incentives, and right now the coaches’ incentive is to be irresponsible with players’ health.

Yes, the culture of football macho contributes to the problem: Many players ask to return to action when battling injury, including neurological harm. But coaches are the ones who make the decisions. They’re the adults in charge. And their incentive structure is all wrong.

Coaches receive money and accolades if they mistreat players and win; they are not disciplined, or seemingly even criticized, if players are harmed. Same for the front office in the NFL, the athletic department in college and the athletic director in high school. If the team loses, the fans and boosters are furious. If players suffer harm, there are no consequences whatsoever for the people making the decisions. And at the high school level, legally they are caring for children!

August 27, 2010

Uncertain economic conditions mean weak growth

Filed under: Economics, Government, Politics, USA — Tags: , , , , , — Nicholas @ 09:01

As I’ve argued before, the economy won’t start to really recover until the political situation stabilizes. In an article from earlier this year, Robert Higgs makes this point very well:

The explosion of the federal government’s size, scope, and power since the middle of 2008 has created enormous uncertainties in the minds of investors. New taxes and higher rates of old taxes; potentially large burdens of compliance with new energy regulations and mandatory health-care expenses; new, intrinsically arbitrary government oversight of so-called systemic risks associated with any type of business — all of these unsettling possibilities and others of substantial significance must give pause to anyone considering a long-term investment, because any one of them has the potential to turn what seems to be a profitable investment into a big loser. In short, investors now face regime uncertainty to an extent that few have experienced in this country — to find anything comparable, one must go back to the 1930s and 1940s, when the menacing clouds of the New Deal and World War II darkened the economic horizon.

Unless the government acts soon to resolve the looming uncertainties about the half-dozen greatest threats of policy harm to business, investors will remain for the most part on the sideline, protecting their wealth in cash hoards and low-risk, low-return, short-term investments and consuming wealth that might otherwise have been invested. If this situation continues for several years longer, the U.S. economy may well suffer its second “lost decade” for much the same reason that it suffered its first during the 1930s.

Unfortunately, the incentives for politicians are biased toward meddling, so don’t anticipate a slowing down of political “fixes” any time soon. If the US mid-term elections later this year return a “gridlocked” government, the economy might start to adapt to the current conditions and only then will any significant growth begin to take place. Given a relatively static political situation, businesses can at least make some plans based on their regulatory/legislative conditions as they are. Until some kind of stability is established, no businessperson in their right mind will take on major new plans: entrenching your existing business is far safer, while trying to do something radically different incurs too much risk. Risk, that is, over and above the “ordinary” risk of expansion, launching new products, or entering new markets.

April 13, 2010

Expect to read more stories like this

Filed under: Britain — Tags: , , , , , , — Nicholas @ 12:01

Britain’s welfare support system was originally designed to provide temporary assistance — at barely-above-survival-levels — to workers and their families until the primary wage-earner could find new work. It wasn’t intended to provide this kind of support:

The Davey family’s £815-a-week state handouts pay for a four-bedroom home, top-of-the-range mod cons and two vehicles including a Mercedes people carrier.

Father-of-seven Peter gave up work because he could make more living on benefits.

Yet he and his wife Claire are still not happy with their lot.

With an eighth child on the way, they are demanding a bigger house, courtesy of the taxpayer.

Hard to blame ’em, really: if you can get substantially more through welfare support than you can by working, what’s the incentive to keep that job? Once upon a time, it was shame that would provide that extra spur to keep people in marginal economic circumstances from claiming welfare or other social benefits, as friends and neighbours would disdain them. These days? They’re probably envied by the next-door and down-the-street folks still dumb enough to get jobs.

At their semi on the Isle of Anglesey, the family have a 42in flatscreen television in the living room with Sky TV at £50 a month, a Wii games console, three Nintendo DS machines and a computer — not to mention four mobile phones.

With their income of more than £42,000 a year, they run an 11-seater minibus and the seven-seat automatic Mercedes.

But proof that material wealth does not translate directly into happiness, the Daveys still yearn for things they can’t yet have. But at least they’re not feeling burdened by feelings of guilt or shame:

She added: ‘I don’t feel bad about being subsidised by people who are working. I’m just working with the system that’s there.

‘If the government wants to give me money, I’m happy to take it. We get what we’re entitled to. I don’t put in anything because I don’t pay taxes, but if I could work I would.’

[. . .]

Mrs Davey, who spends £160 a week at Tesco, says she does not intend to stop at eight children. Her target is 14.

And she adds: ‘I’ve always wanted a big family — no one can tell me how many kids I can have whether I’m working or not.’

It’s true: in spite of all the other intrusions into everyday life by the British and European bureaucracies, there are still things they can’t tell you.

H/T to Jon (my former virtual landlord) for the link.

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