Self-organising collaboration seems to offer the only way, he argues, out of our current impasse where the market has failed…
What an extremely strange thing for anyone to say.
Given that markets are self-organising collaboration……
Michelle Smith\’s got a new gig – and her boss found her from reading the Daily News
Astonishing, isn\’t it? Newspaper passes on useful information shocker……
From 1980 or so onward, however, that system gradually broke down, partly because of bank deregulation, but mainly because of the rise of “shadow banking”: institutions and practices — like financing long-term investments with overnight borrowing — that recreated the risks of old-fashioned banking but weren’t covered either by guarantees or by regulation. The result, by 2007, was a financial system as vulnerable to severe crisis as the system of 1930. And the crisis came.
Banking systems without deposit insurance are subject to runs. The modern banking system did not have deposit insurance on wholesale funding and as we found out, was subject to a run.
The solution to our problem is thus either having a system of deposit insurance for wholesale markets or….well, the only other alternative is to insist that there should be no wholesale funding.
And while I\’m well aware of things like moral hazard, not having wholesale funding looks like a much, much, more expensive proposition in the form of wealth not created.
Still, nice to have a Nobel Laureate on the liabilities tax side rather than the Robin Hood Tax side, isn\’t it?
Thousands of council tenants who make profits by illegally sub-letting their homes will face tough new measures to be announced by ministers this week.
No, it\’s not that bit although that does grate a tad. For as we all know social housing is the least liquid part of the housing market.
We know quite well that illiquid housing markets increase the unemployment rate. This finding is usually referred to when people want to argue against ever higher rates of home ownership. The pain and grief of having to sell up and buy again means that some number don\’t do so when offered a job at a distance. Thus an illiquid housing market leads to a more illiquid employment one, raising unemployment rates.
This is why Gordon Brown\’s stamp duty on houses increases unemployment.
However, among those who make this argument there\’s always a failure to extend the insight properly. Yes, the private rental market is more liquid than the owner occupied one….but the social housing market is *less* liquid than the bought and paid for one. Thus whatever is true of owner occupation is more so for social housing. The pain and grief necessary to move across local authority boundaries is such that it can take years. And yes, by the same logic this does indeed increase unemployment.
Thus these scamsters, while they are indeed stealing from the rest of us, are in doing so freeing up that market in however trivial a manner and making the unemployment rate (marginally) less than it would otherwise be.
But as I say, that\’s not what pisses me off. This is:
The cheats could be charging market rates up to three times council rents. In parts of Westminster, the rent for a three-bedroom council house would be £114 a week but the market rent for the same or similar property would be as much as £530 a week, netting the sub-letter as much as £21,600 a year.
No, not that on its own. Add in to that that report a few weeks back which breathlessly told us that the wealth gap between the 9 th decile and the 1 st decile was 100:1. In the wealth of those at the top were included such things as housing owned, private pension funds and so on. In the not wealth of the bottom were not included state pensions nor housing subsidies.
Yet here we can see what that housing subsidy is (OK, so it\’s Westminster, an extreme case but still). £21,600 a year for a household. A year. And yes, the decile figures were based upon households.
Now, £21,600 a year ain\’t chump change. Given that tenancies are for life (and even inheritable but we\’ll not go there) there\’s a considerable amount of wealth attached to the legal right to receive that sum. I can\’t be bothered to actually do the sums but current annuity rates are around £5,000 for each £100,000 put in the pot. So £20 odd grand a year is equivalent to wealth of £400,000. And given that such tenancies last many years longer than annuities typically do the capital value is much higher than that.
So, back to our two households, the 90:10 ratio. One has £880,000 in wealth as the report said they do (on average). The second, assuming they have a council tenancy in Westminster, does not have the £8,000 the report said they do. That council tenancy itself is worth perhaps £400,000. Thus we don\’t in this particular example, have a 100:1 wealth ratio. We\’ve a 2:1 wealth ratio.
And that\’s what really pisses me off. The country is nowhere near as unequal as is made out. For everyone has a goodly and decent sized chunk of wealth: it\’s called the welfare state.
It\’s just that when analysing wealth no one ever includes said welfare state. Which is wrong.
And yes, it does piss me off, right royally.
The government is to unveil radical proposals that would give football fans first option to buy their clubs when they were put up for sale and require clubs to hand over a stake of up to 25% to supporters\’ groups.
This is, quite simply, theft.
Liverpool, Arsenal, Man U, they\’re worth around the £400 million mark each aren\’t they? So the net effect of this is a forced transfer of some £100 million from those who currently have it to those who do not.
And yes, forced transfers of this kind can indeed be called theft, the law be damned.
I\’ve said this before but why not again?
Norwegian* has a lovely word, \”utepils\”.
It\’s that first beer outside of the spring. The first time that you can, without it being as cold as a witches tit, or perhaps more appropriately, as cold as a broomstick ventilated gusset, sit outside and actually enjoy a beer or two.
No, it\’s not particularly time change related. Just that this year, down here (here out west perhaps?) today was indeed the day.
I have utepilsed this year, have you?
*Norwegian also has another lovely word, jentelus (which now completes my knowledge of the language, all two words) which is analagous to the American \”cooties\” but for which there seems to be no English English equivalent.
Or rather, Labour\’s just made forcing people to recycle illegal. Via The Devil we get to the new act:
71Slavery, servitude and forced or compulsory labour
(1)A person (D) commits an offence if—
(a)D holds another person in slavery or servitude and the circumstances are such that D knows or ought to know that the person is so held, or
(b)D requires another person to perform forced or compulsory labour and the circumstances are such that D knows or ought to know that the person is being required to perform such labour.
(2)In subsection (1) the references to holding a person in slavery or servitude or requiring a person to perform forced or compulsory labour are to be construed in accordance with Article 4 of the Human Rights Convention (which prohibits a person from being held in slavery or servitude or being required to perform forced or compulsory labour).
(3)A person guilty of an offence under this section is liable—
(a)on summary conviction, to imprisonment for a term not exceeding the relevant period or a fine not exceeding the statutory maximum, or both;
(b)on conviction on indictment, to imprisonment for a term not exceeding 14 years or a fine, or both.
(4)In this section—
*
“Human Rights Convention” means the Convention for the Protection of Human Rights and Fundamental Freedoms agreed by the Council of Europe at Rome on 4 November 1950;
*“the relevant period” means—
(a)in relation to England and Wales, 12 months;
(b)in relation to Northern Ireland, 6 months.
Now there is a get out here. The imposition of involuntary, forced or coerced labour is allowed if it still conforms to Section 4 of the Human Rights Act which reads:
Article 4 Prohibition of slavery and forced labour
1 No one shall be held in slavery or servitude.
2 No one shall be required to perform forced or compulsory labour.
3 For the purpose of this Article the term “forced or compulsory labour” shall not include:
(a) any work required to be done in the ordinary course of detention imposed according to the provisions of Article 5 of this Convention or during conditional release from such detention;
(b) any service of a military character or, in case of conscientious objectors in countries where they are recognised, service exacted instead of compulsory military service;
(c) any service exacted in case of an emergency or calamity threatening the life or well-being of the community;
(d) any work or service which forms part of normal civic obligations.
These people aren\’t entirely stupid of course. Normal civic obligations includes the unpaid time we must use to fill in tax forms, the unpaid time we must use to fill in the Census, the unpaid time ….well, you get the picture.
However, the requirement to sort your rubbish is not a normal civic obligation. It\’s an attempt to create a new civic obligation. It\’s also labour and it\’s also performed under duress….don\’t do it and they\’ll arrest you, resist arrest and they\’ll use violence.
And this would hold true for any new service which the government would force us to provide unpaid and with the threat of punishment if we don\’t.
Isn\’t that fascinating?
The number of independent schools judged to have breeched minimum standards set by the Government has trebled, new figures have revealed.
It\’s \”breached\”….we\’re talking about breaking, not giving birth. But examples of those rules being broken?
School cooks have not been formally trained in child protection.
Pupils and parents had not been supplied with details about how to complain to Ofsted about the school.
Parents were not made aware that they can request sight of a copy of the school\’s plan to meet the requirements of the Disability Discrimination Act 2002.
Hang them, hang them all.
I hope Tim knew he was being absurd writing what he did, but all he wrote after the above suggested he did not. It’s unsurprising that throughout the entire left he is treated as a buffoon. Oh, a buffoon who knows economic theory quite well. But a buffoon because of his complete inability to exercise any wisdom when it comes to interpreting it, as this latest blog shows.
But if blogging about me keeps you happy Tim, keep going. It does amuse us that you waste so much time and effort getting things so spectacularly wrong time, after time, after time.
Naughty, naughty Timmy.
And the buffoonishness of my commentary is proved by my attitude towards the Washington Consensus of course.
Why? Because the reality is it’s been about destroying the state, opening up markets to unfair competition, moving to regressive indirect tax bases, denying resources to industries that need them, denying labour rights whilst enhancing capital rights, allowing the free flow of capital and denying that right to labour, undermining the property rights of onshore states and enhancing those of offshore, allowing unfettered finance rights over all else and so much more.
I suppose it\’s possible that that is indeed what it\’s about but, well, you see, proof is in the pudding. Leave aside both rhetoric and ideological positioning and ponder the important question:
Look what it’s done to Africa and you’ll know why.
So what has been happening to Africa?
The conventional wisdom that Africa is not reducing poverty is wrong. Using the
methodology of Pinkovskiy and Sala?i?Martin (2009), we estimate income distributions, poverty
rates, and inequality and welfare indices for African countries for the period 1970?2006. We
show that: (1) African poverty is falling and is falling rapidly. (2) If present trends continue, the
poverty Millennium Development Goal of halving the proportion of people with incomes less
than one dollar a day will be achieved on time. (3) The growth spurt that began in 1995
decreased African income inequality instead of increasing it. (4) African poverty reduction is
remarkably general: it cannot be explained by a large country, or even by a single set of
countries possessing some beneficial geographical or historical characteristic. All classes of
countries, including those with disadvantageous geography and history, experience reductions
in poverty. In particular, poverty fell for both landlocked as well as coastal countries; for
mineral?rich as well as mineral?poor countries; for countries with favorable or with unfavorable
agriculture; for countries regardless of colonial origin; and for countries with below? or abovemedian
slave exports per capita during the African slave trade.
Now I don\’t know about you but I regard that as very good news indeed. Hundreds of millions of our fellow humans are becoming better off. Absolute poverty is falling in Africa, just as it has fallen in Asia. And, given that we\’ve been \”imposing\” (in fact, what we\’ve been doing is saying that if you want our money we recommend that you follow some fairly basic \”good\” economic policies) the Washington Consensus in such places we should probably credit said Consensus with the results that are appearing.
Now I\’m sure that you can claim that it\’s not that Consensus which is causing that fall in poverty. But if you do then you\’ve really rather got to argue that the Consensus hasn\’t actually been imposed. In which case of course it can\’t be blamed for any of the bad things that have happened just as much as it cannot take credit for the good. But if you argue that it has indeed been imposed, if Africa is reeling under that imposition, then we need to look at what is actually happening in Africa under said imposition. And a general reduction in poverty is what is happening which, if you\’ll excuse me for saying so, is actually what we\’d rather like to be the result of a socio-economic system. Which brings me onto a further point:
Tim Worstall is a very strange man. As far as I can see he’s written 13 blogs about me – in the past fortnight. I call that an unhealthy obsession.
And despite his clearly being my biggest fan and #1 cheerleader he also gets me quite wildly wrong.
There is certainly a possibility of an obsession there I agree. But I don\’t in fact get Ritchie wrong, far from it. This is something I\’ve said many times before but people still seem to be not quite understanding it.
I\’m a lefty. No, really, I am. I\’m a liberal, a progressive and a radical. Liberals are, as the word itself suggests, concerned with liberty, as I am. Progressives are those who believe in the power of the State to make things better and I most certainly agree with that. Radicals are those who think that we cannot simply tinker at the edges, we need some fairly major changes. About the only way in which I disagree with the basic propositions as usually understood is that in terms of progressivism I think that one of the ways the State can make things better is to stop doing some of the damn fool things it\’s already doing.
So, as such a lefty, why am I so in favour of things like markets, free trade, capitalism and so on? Those things which are generally thought of as the preserve of the \”right\”? (Let us leave aside that \”the right\” ain\’t been a friend of free trade shall we?)
Because they work.
If what you want is that the poor get richer, if what you want is an improvement in general living standards, if what you want is that the absolutely poor become only the relatively poor, then capitalism, markets and free trade are the only games in town. The unique thing about this really rather strange economic system is that it is the only one which has produced a general and long lasting rise in the standard of living of the average chelovek on the Chelyabinsk omnibus.
Which is why I Rag on Ritchie quite so much. To the possible point of obsession. I do him the courtesy of assuming that he wants just what I do. A better and richer world for those currently stuck in the absolute poverty that has been humanity\’s historical lot. Certainly he works with a lot of organisations who claim that this is their aim (Action Aid, Oxfam I think, Christian Aid and so on). It\’s just that his actual suggestions of how to get from here to our jointly desired goal strike me as entirely wrong.
And as such, as suggestions which are entirely wrong, they should be critiqued in the hope that by doing so his suggestions can be improved. For we do both desire exactly the same thing. That those in Africa, indeed those anywhere, should become just as fat, rich and happy as we pinkish people who by historical happenstance were the first to leave the Malthusian world behind.
It\’s a simple and observable fact about the world around us that those places which have been roughly capitalism and market based for a century or more are places where people are rich, fat and happy. Those places which have been roughly capitalist and market based for mere decades are those places where people are becoming rich, fat and happy, in what has been generally noted as the greatest reduction in poverty in the history of our species. Those places which have only just adopted these twin capitalist and market based policies are those places where the first stirrings of becoming rich, fat and happy are starting.
Those places which have never been and are not even attempting to adopt the capitalist, market based, structure are those places where people are not and are not becoming, rich, fat and happy.
Thus, as a good little lefty, one who desires that all of humanity share our own good fortune in being rich, fat and happy, I recommend that all of humanity adopt the economic system which made us so and which is making those who do adopt it as rich, fat and happy as we are.
And the Ragging on Ritchie is that, while he claims to want the same things, his recommendations are not that those others adopt the system that worked for us and is working for those that do adopt it. That is, that his recommendations are wrong.
Which seems like something worth getting obsessed about quite frankly.
I have a feeling that Richard doesn\’t in fact understand what he\’s talking about here.
Has he learned nothing as yet?
This the old paradigm of the Washington Consensus writ large. Haven’t they noticed it was this that failed? It was this that created the crisis.
So, let\’s see what the Washington Consensus actually says, shall we?
The consensus included ten broad sets of recommendations:[1]
* Fiscal policy discipline;
* Redirection of public spending from subsidies (\”especially indiscriminate subsidies\”) toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment;
* Tax reform – broadening the tax base and adopting moderate marginal tax rates;
* Interest rates that are market determined and positive (but moderate) in real terms;
* Competitive exchange rates;
* Trade liberalization – liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform tariffs;
* Liberalization of inward foreign direct investment;
* Privatization of state enterprises;
* Deregulation – abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudent oversight of financial institutions;
* Legal security for property rights.
Now I cannot see there any policy proposal that I would argue against. In fact, I cannot see any policy proposals there that Ritchie would want to argue against.
I also cannot see anything in that which led to the current \”crisis\”.
Indeed, I can see that all of the varying (and entirely different) posited explanations of the causes of the crisis violate one or more of those suggestions.
If you go for the simple credit bubble leading to an asset bubble which then bursts explanation then that was in violation of point 4. If you go for the bankers getting out of hand one then that\’s a violation of point 9. If you go for Brown (or Bush, whoever) spending like a drunken sailor when the boom, according to basic Keynesian thought, should have been leading to fiscal contraction then that\’s a violation of point 1. If it\’s all about an overvalued dollar and an undervalued renmimbi then that violates point 5.
And so on, through the various different possible explanations of what actually happened.
So no, I don\’t see that the Washington Consensus can be blamed for what went wrong.
However, I can see that same consensus taking the credit where it was actually applied, in the developing nations….for yes, do note that the preachers weren\’t in fact following (as above) their preaching at home. Quelle Surprise. Jim Bakker and Jimmy Swaggart really were role models….
And what was the result of applying that Washington Consensus?
World poverty is falling. Between 1970 and 2006, the global poverty rate has been cut by nearly three quarters. The percentage of the world population living on less than $1 a day (in PPP-adjusted 2000 dollars) went from 26.8% in 1970 to 5.4% in 2006 (Figure 1).
Although world population has increased by about 80% over this time (World Bank 2009), the number of people below the $1 a day poverty line has shrunk by nearly 64%, from 967 million in 1970 to 350 million in 2006. In the past 36 years, there has never been a moment with more than 1 billion people in poverty, and barring a catastrophe, there will never be such a moment in the future history of the world.
I think I\’d call that a win really. Wouldn\’t you? The greatest reduction in poverty in the entire history of our species?
For the sake of Germany and the wider eurozone, Angela Merkel must stop playing domestic politics with the Greek issue.
German politician must stop doing what the German electorate want.
So much for democracy then….
To dismiss the implications of climate change based on an error about the rate at which Himalayan glaciers are melting is an act of astonishing intellectual legerdemain. Yet this is what some doubters of climate change are claiming. But the reality is that our understanding of climate change is based on a vast and remarkably sound body of science – and is something we distort and trivialise at our peril.
No, Pachauri is still not getting the point.
The point about climate change is not \”is it happening?\”. It is \”how bad is it going to be?\”.
It is the answer to that second question which determines how much effort we put into stopping/reversing it.
If the entire ecosystem is going to fall over and billions die then quite a lot of effort is justified. If it\’s just going to get a bit warmer and the latitiudes of various temperature bands move a couple of hundred miles north then not much effort is justified.
And the errors found so far in the IPCC reports are all about how bad it\’s going to get. And all those errors are pointing one way: the effects are being over egged. Genuine errors would be pointing both ways, some to worse effects, some to more minor. Thus the suspicion that there\’s a deliberate attempt to make the effects appear worse than they actually are.
That is what the problem is. The IPCC at least gives a damn good appearance of not answering properly the only question we\’re really interested in. How bad is it going to be?
So, amongst the vast readership of this site are there any chemical or mining engineers?
I\’m hoping to find someone who can give me a back of the envelope estimate.
I\’ve got a waste stream. Got a method of extracting the material I want from it. Know what that material is worth and the market for it.
Good Oh!
The one thing I\’ve not got a handle on is what the likely costs of that extraction process are. It\’s not a hugely complex process…could be done pretty much by swirling the waste in acid, even alcohol. Add a bit of sieveing maybe, get to a nice solution containing my desired bit and leaving the other 99% behind and from there on in it\’s even simpler.
I can argue from analogy (a different but related process) that costs might be $100 to $200 per tonne waste processed. But I really don\’t know whether costs for this specific process are likely to be £10 a tonne, £100 a tonne or £1,000.
So is there anyone who actually has a background in this sort of thing (Mr. Remittance Man perhaps?), you know, actually knows how to do stuff in the real world, who could cast a quick eye over the idea?
We get lots of stuff from various woo merchants about electrosensitivity.
You know the stuff, peoples\’ WiFi networks are making them ill.
Those wind farms….those great big magnets will create electro-magnetic turbulence (hey, don\’t ask me to be accurate about this, we are talking woo after all).
So, do we have anyone complaining about that? Or are windmills by definition green and good therefore the green types who complain about electro-magnetic pollution won\’t complain about them?