Most fun at CiF

Writer complains about having paid off all her debts by winning literary prize. Why oh why are such prizes funded by large corporates? And why will Costa Coffee open in Totnes when 75% of those polled said no to Costa Coffee?

CiF regulars ask:

1) So you\’re handing back your prize money in protest are you?

2) If no one wants Costa in Totnes then Costa in Totnes will go bust. Markets being this democracy thing, one pound one vote.

Recycling rare earth metals

Usual ill informed rant at The Guardian about the recycling of electronics and rare earth metals. My reply in the comments there.

Oh dearie me. This is just the standard rant about mining and recycling with \”rare earth metal\” dropped in every so often.

There\’s absolutely no understanding at all about what a rare earth is, why they may or may not be recycled, what other metals are or are not recycled and why.

The rare earths are the lanthanides, Cerium to Lutetium (sometimes we add Sc and Y as well). These tend to be used in tiny quantities. For example, a computer might use 6 grammes of neodimium in the magnets in the hard drive. That means that if we collect 1 million computers, extract the hard drives, take them apart and extract the correct part of that drive then we\’ve accumulated 6 tonnes of neodimium.

If we had 6 tonnes of brand spanking new neodimium, ready to be used to make magnets again (some processing would be required to get our scrap to this point) then the value would be around $1.8 million at today\’s prices.

So, why don\’t we recycle the magnets from hard disk drives? Because, even if we had a pile of 1 million computers, the cost of taking out the magnets from the hard drives would be more than $1.8 million.

It takes time to extract them, you see? Human labour time. Labour that has to be paid for from the amount we get from recycling those magnets. And the value of the metals recycled is lower than the value of the human labour we have to put into it.

Please note, this is using the vastly inflated prices of the current bubble in rare earths. A few years back and a few yeasr in the future, the value of that neodimium was/will be more like $180,000. At which point it\’s not even certain that we\’d cover the energy costs of re-smelting the Nd, let alone the labour costs. (We can\’t just melt down the magnets and recast them. We\’ve got to extract the Fe, the Nd and the B separately and then recombine them again, sorry, but we do).

Now, when we\’ve a windmill motor magnet, which might have 600 kg of Nd in one motor alone, oh yes, believe me, we do recycle it.

Just as we recycle the lutetium from an MRI machine, as we\’ve a nice 50 kg crystal there. But not the Tb from the inside of a cathode ray tube as we might have 2 grammes there.

The great problem of recycling anything is that whatever it is that you\’re after might be extremely dispersed. You can end up epending more energy, more labour, in trying to oncentrate it enough to recycle it than you would expend by simply digging up some new stuff.

Other metals in computers we do recycle. The copper and gold on the motherboards for example, I could walk you through dozens of plants in Europe which recycle these. And yes, some of this waste does get exported to places where children scramble over it to extract them.

The reason? The regulations in Europe make it very expensive to do this extraction. The more you try and make recycling perfect, make sure there is no pollution at all from it, that everything, not just the stuff rich in metals, is recycled, the more the temptation there is for crooks to side step that recycling system.

No, I\’m not defending the crooks, just pointing out the obvious. What we actually want is to be treading that very fine line, recycling as much as we can but making sure that recycling is profitable. That hunger for profit will mean that people will actively seek out ways of recycling equipment here in Europe. Weirdly, if we relaxed the recycling standards, we\’d probably see more recycling.

But back to the basic error in the piece. No understanding is shown of the problem of dispersion. And dispersion is the basic underlying economic problem of all recycling.

When our metals are in tiny amounts, dispersed through hundreds of millions of tonnes of material, that material spread out all over the place, it costs more to collect and process the material (that is, we use more resources to do this) than simply going and getting new stuff.

When the metals are more concentrated then it does make sense to treat them as a resource that we can extract metals from. An old car is at least a few hundred kg of steel, maybe 40 kg of copper etc, worth recycling for the metals content. Old mobile phones are worth grinding down and using as a tantalum ore (yes, this is done, Ta ore is currently $120 per lb Ta2O5 contained). Old windmill magnets, 600 kg of NdFeB on the hoof, yes, recycled. Old disk drives, 6 g of FeNdB? No, dump it, we\’d use more resources than we get trying to get it.

Sorry greenies, but until you start looking at the economics of metals recycling you\’re just not going to understand why some things get recycled and others don\’t.

Fun at CiF

The Guardian ensures that purported authors at least read and approve of what goes out under their names.

Rilly?

I myself have ghosted pieces for this very newspaper when working as a press officer. When Mr. Seaton was running CiF in fact.

And while I\’d have been caught very quickly indeed if I\’d said something out of line, there wasn\’t in fact any formal checking process that I recall.

Umm, did you check that fact with the Guardian editors before you wrote the piece?

Whining about American taxes

Writing from NYC we get some woman complaining about how low taxes are in the US. My response there.

Yes, the federal income tax rate is 35%. Add the NY State income tax of 8% and the NY City rate of 4% and you\’re at 47%.

This isn\’t a low income tax rate by anyone\’s standards.

It puts NYC in the top 10 (ish, there\’s a lot of countries on joint 5th at 50%) of 90 odd countries for marginal personal income tax rates.

All of which means is that it\’s not the taxation system which is your problem. It\’s the structural side, the way you spend the money which is. The way you spend the money some of the highest income taxes in the world get you The Bronx. Or Brooklyn.

You need to be looking at the other side of the ledger.

CiF of the day

So what starts out as The G telling us all how appalling private rentals are (using the experience of a post-grad student who in no historical circumstances whatsoever would have got council housing) turns into, in the comments, a \”You what?\”.

Quite fun actually.

Mature students struggle to find suitable, affordable accommodation – the choice is either share with younger party people or rent a flat with someone your own age. It\’s just that people my age don\’t usually rent – they own, and lodgers who wish to occupy a flat over summer and even Christmas holidays are undesirable (I was denied a room for the latter reason on more than one occasion).

Eh?

I moved to London for 10 months (about the time span of a post-grad course, no?) when I was 45. Took a week of sofa surfing to find it, yes, but I did find a room in a two bed flat at a reasonable rent and 15 minutes (OK, maybe 20) walk from the office in Westminster.

The whole piece is more of a whinge than anything else.

Guardian editorial on how appalling it is to measure the value of nature

My response there:

Blimey.

No one is in fact saying that a nightingale\’s song is worth £5.

What we\’re trying to get to is a set of relative values.

So, we start with, well, people act as if a nightingale\’s song is worth £5 to them. They also seem to act as if their own lives are worth around £2 million (not that far off the real figure). Bluebell woods at £300. Salt water marshes at £1,5 million.

Etc, etc.

Absolutely no one is saying that you can sell the marshes for £1.5 million. Take the nightingale\’s song to the bank and get a fiver.

However, now that we\’ve got some numbers, these valuations of what people seem to value things at by what they do, now we can begin to make trade offs.

To be absurd, imagine that 1,000 nightingale songs would cure a child of cancer. Five grand? It\’s a bargain, start liming those twigs so we can capture them.

Now let\’s not be absurd. Those salt water marshes near Cardiff, they\’re worth £1.5 million as the home of those wading birds. They\’re also worth £1 billion as the shores of the Severn Barrage (note, please, these are imaginary numbers, just for illustration).

So, do we build the barrage or do we keep the home for the birdies? And is our decision different if the tweeties\’ mudflats are worth £1 billion and the energy system £1.5 million?

We aren\’t at all saying that any of these things are worth £x. We are saying that people seem to value that over there at x times what they value that over here, or some /th of what they value some other thing at. £ is only used so that we have one unit to play with.

Now that we know the relative values (note again, not the absolute values) we can begin to make decisions. So, what do people actually want? Bluebell woods or houses for the homeless in a former bluebell wood? Oystercatchers or energy?

To try and approach this problem any other way would be insane.

Those lovely Guardian commentators

On an article discussing Sakharov\’s 90 th birthday, including how the zeks returned from the Gulag, we get this delight:

Dekulakisation was a necessary strategy moving forward. If you will not play ball, then consequences must be suffered. Stalin understood that the Dictatorship of the Proletariat was in actual fact not an option, particularly when trying to achieve Socialism in one country and dictated himself.

Words fail…..

BP should be forced to….

At The Guardian:

But if these corporations really are part of Britain\’s industrial fabric then it is time to press them into \”greener\” action, too: encourage BP to rebuild its UK carbon capture and storage interests

Erm, you do know why BP gave up on those? They were going to take natural gas, strip out the C, burn the H in a power station and then pump the CO2 down into old oil fields. This would force up the last of the oil in those fields and also store the CO2.

In order to make the scheme work financially, they didn\’t need a subsidy. All they needed was a lower royalty/tax rate on the oil that was pumped up. After all, if they don\’t pump the CO2 down the oil will never come up so no tax at all will be paid.

Gordon Brown said no. Even though it would have been extra money to The Treasury, he said no.

Forget \”pressing\” them into action. Why not just undo one of the more lunatic decisions of the Labour years?

Whining about the cooption of the counter culture by the mainstream

My response there:

Err, this is how markets work.

So there\’s a whole bunch of experimentation out there as people try different ways of doing things. Some of these are entirely crap and reach three and a half people. Some of them are pretty darn good and snowball into wider popularity.

This is as true of music styles, bands, as it is of bars of chocolate or newspapers.

Recall, This very newspaper, The (Manchester) Guardian was founded to fight for free trade, against the Corn Laws. Very much a minority pursuit at the time. Joseph Rowntree (and some of the other Quaker chocolate families) decided that a different version of capitalism might be worth a try. Worked pretty well.

Mozart/Beethoven/Louis Armstrong/Charlie Parker/BB King/Chuck Berry etc etc etc all started out using a very much minority taste or style and because it appealed to people it became more widely popular.

As I say, this is just how markets work.

Experimentation and then the spread of the good experiments and the extinction of the bad. In music, products, methods of organisation, whatever.

Quotas for women on boards

From The Guardian\’s comments section, of course:

It\’s also difficult to show that the females made the companies more profitable.

Not so much actually.

http://www.theglasshammer.com/news/2010/03/11/is-norway-working-the-case-for-women-on-boards/

Dittmar and Ahern’s study found that when a board had a 10% increase in the number of women, the value of the company dropped. The bigger the change to the structure of the board, the bigger the fall in returns.

An excellent result, don\’t you think?

Andrew Simms: still not getting supply and demand

in which rising demand departs from flattening supply,

This is impossible.

After that, the gap between demand and supply inexorably widens.

So is this.

There is no such thing as \”demand\”.

There is no such thing as \”supply\”.

There is only demand at a price and supply at a price.

For example, there are all sorts of people who would like to buy oil at $7 a barrel. They\’re rather out of luck though. There\’s also all sorts of people entirely happy to sell oil at $700 a barrel. They are also rather out of luck.

What we actually live in is a market system where prices change so as to balance supply and demand.

Anyone at all who makes a statement so blindingly stupid as \”the gap between demand and supply\” or \”rising demand departs from flattening supply\” without pointing out that prices will adjust to make such impossible needs to be sent back to the London School of Economics to finish his degree.

Yes, this probably will get modded out but really Simms, really.

Responding to Will Straw

Will\’s got a new little book out telling us all how \”smart government\” will save us all.

My response at CiF:

An alternative approach is needed that understands the role of smart government in promoting growth.

Well, yes Will.

The question is, how do we get the smart people to go into government?

Further, how do we get over the impossibility of anyone at the centre ever getting enough information to be able to actually plan the economy.

Finally:

\”Author: Edited by Will Straw
Contributors: Philippe Legrain, Duncan Weldon, Gustav Horn, Richard Seline, Charles Leadbeater, Kitty Ussher, Adam Lent, Gerald Holtham, Andy Westwood, Stian Westlake, Anna Turley, Tony Dolphin \”

You\’re seriously putting these people forward as the \”smart\” people who know how the other 65 million of us should earn our living, run our economy?

*Seriously*?

In turn, you\’ve a eurocrat, Hattie\’s recent economic advisor, another (ex) eurocrat, the \”White House Liaison to the Persian Gulf Task Force at the U.S. Environmental Protection Agency\”, the \”devisor\” of Bridget Jones\’ Diary, Virginia Bottomley\’s niece, a TUC apparatchik, a hedge fund guy, an education bureaucrat (GuildHE even!), another quangocrat, another quangocrat, a wonk from the wonkery that published your pamphlet…..and, of course, you, a SpAd.

You are really willing to stand up and insist that these ever so bright, incredibly \”smart\” people know better how to run the fifth largest economy in hte world better than the other 65 million of us do?

It is to laugh.

And if you\’re going to say that no, no, it\’s government that should be smart, not the writers of this book: well, have you actually looked at them? And the alternatives?

Seriously? John Denham\’s the man to run the UK economy? Ed Balls?

Another comment

At CiF:

\”He doesn\’t say that moving things about isn\’t wealth creation. He says that moving money about isn\’t wealth creation.\”

Which is a blindingly stupid thing to say.

Moving the short term deposits in our bank accounts (the little amounts that vary over the month in our current accounts for example) into long term investments in mortgages, companies and other investments: you know, fractional reserve banking and maturity transformation, this is very much creating wealth.

Like, for example, banks using the money in our accounts to lend it to Rolls Royce so they can make jet engines?

Comment on a Guardian editorial

\”Then there is the small print: the lending \”will be subject to its normal commercial objectives … as well as the availability of the required funding\”, while that £190bn will only be lent \”should sufficient demand materialise\”. Nor is there any way of enforcing this target.\”

How could it be any different?

No, seriously, think about it for a moment.

How can you enforce a lending target if sufficient demand doesn\’t materialise? And why on earth would you want banks to lend without it being subject to normal commercial objectives…..like the borrower being able to repay the loan?

Seriously? You\’d like the banks to be just shovelling the money out the door any old how, to anyone at all, whether they can repay or not? You know, so that we can rescue the banks again in a couple of years\’ time as £190 billion of loans don\’t get repaid?

And you have noticed that the corporate sector is sitting on more cash than it ever has done before, yes? That by and large companies don\’t need to borrow as they already have stacks of cash to invest?

CiF can be glorious!

So, Jagdish Bhagwati, an eminent economist, writes a piece on the myths and costs of protectionism. In the comments we get:

Professor Bhagwati is an economist, of course, and his views should therefore be taken with a very large pinch of salt.

That is, we shouldn\’t listen to an economist talking about economics because….he\’s an economist.

This is also good:

Jagdish Bhagwati has academic tenure, and therefore a job for life, with zero risk of being replaced by some academic from the third world who is prepared to do the job for a fraction of what he\’s paid.

The Good Professor of course being one of those academics from the third world.

Something for Mr. E

It is Mr. E who tells up about the doings of Councillor Terry Kelly isn\’t it? Yes, I think so.

On one of CiF\’s regular columns about how Cuba isn\’t really badly off you know, it\’s just a different set of priorities, the distinguished Councillor has made a number of comments. All of which have been expunged by the moderators.

I recall the general tenor of them from before they were so removed. Fidel\’s a great man, Cuba\’s the business, you\’re all ghastly baby eating fascists for not liking it and so on.

Not really all that different from the drivellings of Richard Gott and other fellow travellers, although obviously with Our Terry\’s unique lack of intelligibility, spelling or grammar.

Which makes me wonder why they have been wiped out? It couldn\’t be that such support from such a quarter was simply too embarrassing could it?