Elsewhere

Thus this solution. Some 70 odd countries have this already, it’s not one of the things that is hugely difficult to do. People get to keep their number when they switch network. That’s what this deal between BTRC and Infozillion is about, running the system which allows that.
I wouldn’t want anyone to go into an economics exam and use this as a direct example of ordoliberalism but it does rather neatly capture the basic concept. No one is saying that you must use this or that company, no one is demanding that privileges accrue to any particular supplier. What we are doing is changing one of the rules of the marketplace to make that market more efficient.
Once we’ve done that we’re not going to interfere at all. You want to take your number with you, you can. You don’t then don’t use the service. You don’t want to switch supplier, that’s fine, all we’ve done is make it easier for you to do so.
Some things the government must do, some things it is useful if it does.

Elsewhere

It is of course deeply diddums that someone producing in Kent might face higher labour costs as a result of Brexit. But the solution for all of us is as it ever has been. We can import that cheap labour, as we have for 70 odd years now, or we can just import the labour embedded in the fruit and veg we desire. No skin off our noses because free trade and unhindered markets do, no really I insist, work. Even to the point that if Kent is the right place to be producing these things then Kent is where we’ll get them from. Free trade even achieves that miracle.

Elsewhere

But here’s the catch – those numbers come from how the world was decades ago. Including the assumption that being on a train means being unable to do business, one can only sit there travelling to do business. No one who has actually been in a first class compartment in the past decade or two can possibly believe that this is how people work today. Mobile phones, then mobile internet (yes, trains do have it these days) have entirely changed that. Work is done on the move. In fact, scratch a regular traveller and you might well find an agreement that travel time is more productive these days.

Thus the major (and yes, really, it is *the* major) benefit in our cost benefit analysis of fast train sets does not exist.

That is, if we wire the country so that the internet is available anywhere and anywhen then we’ve entirely destroyed the economic case for fast train sets.

Timmy in Bangladesh

The Bangladeshi garment industry gives us an elegant example of the collective action problem. This is where it is generally rational for everyone to act together but individually rational for everyone, acting individually, to do their best to undermine that general action. An obvious example of this is taxation – sure, we’d all like better government services.

But we’d also rather prefer not to be having to pay for them ourselves. It might even be rational for us to vote for higher taxes but then we’ll all cheat (OK, “manage our tax bill”) so as to reduce the effect upon ourselves of what we’ve just voted for.

Equally, people in a cartel (when people cooperate to try to control prices) will find that perhaps they can indeed make an agreement to limit output, or to raise prices. But there will always be the incentive for the individual to cheat, to offer more than their quota, very slightly lower prices, so as to profit from the engineered solution.
Here we’ve something a little different. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) is arguing that the minimum wage for garment workers should rise.
This sounds like a slightly odd thing, that a producer should be insisting that one of their major costs should rise. However, I’ve met Mr Rahman who is arguing for this and he’s a smart chap, knows what he’s doing. The problem the BGMEA has to face is that there’s significant consumer pressure for wages in Bangladesh to rise.

Elsewhere again

The same is true of our environmental Kuznets Curve. Those developing countries are curbing pollution at earlier stages of economic growth than we ourselves did. Largely, I would argue, because they know how to do it now that the west has already done it — therefore it costs less in lost growth and so, as is true of near all things which are cheaper, they do more of it.

It’s entirely true that large parts of the developing world are foully polluted at present. Just as the similar stages of our own economic development were. The good news is that, firstly, this is evidence that they are getting richer; Secondly, that they’ll curb the pollution as we did as they get richer yet; and thirdly, they’ll do it faster and earlier than we did. The air in New Delhi, Dhaka, Jakarta, and Beijing is vile today, but it’s a sure thing that it won’t be in 20 years.

Elsewhere in The Guardian

Karl Jones tells us two things about Brexit, tariffs and imports (Letters, 8 November) in response to my own letter to you (6 November). These two are as follows: “True, charging zero tariffs on foreign goods should make them cheaper”; and “Imports alone do not generate wealth for any but the few rich importers.”

It is somewhat difficult to reconcile these two points. If you, I, or Mr Jones, pay less for the imports we desire and consume in the absence of taxation of them, then we are richer – by exactly the amount of tax that we’re not being charged on our consumption. We all do agree, at least we ought to, that a cut in the VAT rate will, considered alone, make us richer by leaving more money in our pockets with which to do other things. Tariffs are equally a tax upon our consumption. Lower that tax and we’re richer.
Tim Worstall
Senior fellow, Adam Smith Institute

Seriously, the idea that imports only benefit the firms doing the importing and not the consumers……

Are there really people who think this way?

I read with a sense of deja vu the letter by Tim Worstall (6 November) in which he suggested that charging zero tariffs on imports would make us richer. I’m still confused about how this might be the case.

True, charging zero tariffs on foreign goods should make them cheaper, provided that we ignore the drop in the value of the pound associated with Brexit (which, of course, makes imported goods more expensive), but how do we pay for these goods if other countries insist on tariffs on our products, potentially reducing our exports? Further, as tariffs are a form of tax, how might we compensate for the loss of revenue?

Surely zero import tariffs with existing export tariffs would adversely affect our trade balance, and make the country – or at least those of us who are not rich – poorer. Imports alone do not generate wealth for any but the few rich importers. Or is that the point?

It would seem to be logical that it is not imports that is the problem in post-Brexit British trade, but exports, with the tariff and non-tariff barriers to trade.
Karl Jones
Liverpool

Lowering tariffs makes things cheaper. The only people who benefit from this are the importers, not the consumers of the imports?

Mucho elsewhere

At Cap X

Mining the truth about minerals.

That’s why, if you go and look at mineral reserves, you’ll find we’re going to run out of everything in 30 – 50 years. And that’s because the best definition of a reserve is what we’ve prepared for us all to use in the next 30 – 50 years. To complain about this is like complaining that the food in the fridge is about to run out – without referring to the supermarkets and food production system which exists to fill up our fridges again.

It’s this mistake which leads to the insistence that we must recycle everything for we’re going to run out. We’re not. That underlying contention is simply wrong.

At the ASI:

How would a planned economy deal with this problem?

One of the sillier critiques of free market economies is to look at the conditions for perfect competition, note that perfect information is assumed and thus declare that of course a planned economy is better as we cannot meet the necessary conditions for a market one.

But, of course, if we don’t know then how can we plan?

Further, as Ridley points out, if we don’t know what the new technologies will or can do then how can we plan what to do with them? This accords well with William Baumol’s more formal investigations of invention and innovation. The state, planning, can indeed invent as can markets. But innovations are something the planned economy simply cannot handle while they seem to be the very essence of market systems. That is, innovation appears to be an emergent phenomenon from people playing around, as they wish, with those inventions. That playing around being something which a planned system cannot, by definition, do.

In The Times:

Offshore investments aren’t illegal so why the song and dance?

At heart, the objection to tax havens and competition is the desire that we be subject to monopoly control by a taxing institution. As everyone from Marx to Friedrich Hayek has pointed out, monopoly is injurious to all of us out here – hence why we want multiple jurisdictions so that competition reduces the injury to individualsand the wider economy.

The other extreme would be as with the recent Saudi Arabian confiscation of rich people’s assets, possibly just because it can be done. Competition in the rule of law is as with that in tax; something that protects us from the state.

Timmy elsewhere in The Guardian

Hard Brexit need not make us worse off
If we unilaterally declare free trade we will be richer, says Tim Worstall of the Adam Smith Institute

‘Brexit offers us the opportunity to charge ourselves nothing for our purchases of the goods and services of the world,’ says Tim Worstall. Photograph: Chris Ratcliffe / Rex Features

You report (4 November) on how Brexit will raise the cost of living by as much as £930 per year for a household, based on research published in the National Institute Economic Review. There is a certain logical problem with this assertion.

It is entirely true that under WTO terms we must charge the same import tariff to all other members of the WTO – essentially, the rest of the world. This is known as “most-favoured nation” (MFN) status. The WTO lays out the maximums these can be, any country being at liberty to impose something less, including a rate of zero.

Your report and the research it is based upon assume that we will charge the maximum permissible rates. But as this research points out it is we, as consumers, who pay such import tariffs. They increase the price of the imports we purchase – to the point that if we imposed maximum WTO tariffs then each British household would be as much as £930 a year worse off.

Yes, obviously, politics is involved here – but even so, why would we do something as blitheringly stupid as making ourselves poorer in this manner? The entire point of trade itself is to gain access to those imports of the things that foreigners make better or cheaper than we ourselves do. The only rational trade stance to have is thus unilateral free trade, which this country experimented with, most successfully, after the repeal of the Corn Laws. Brexit offers us the opportunity to do that again – to obey the WTO insistences on MFN status and charge ourselves nothing for our purchases of the goods and services of the world. As other research has shown, this will make us all richer, not poorer.

Tim Worstall
Senior fellow, Adam Smith Institute

A reasonable point I think?

We are imprisoning those who broke the law. Those who didn’t break the law are not in prison. That is rather how this is all supposed to work.

There’s nothing illegal about getting things wrong. Nor is greed, incompetence, or wasting rather than stealing money. It’s not even a crime to be drunk in charge of a bank.

With reference to Mr. G Brown this morning.

Elsewhere

The Union of Concerned Scientists (UCS), an American science advocacy group known for its stance against global warming, would like to inform us all of the dastardly behaviour of the fossil fuel companies.

The UCS’s recent paper links global climate changes to the product-related emissions of fossil fuel producers, focusing on the oil, gas and coal producers as well as cement manufacturers. The paper criticises those companies for their impact on climate change, such as the rise of sea levels and the increase in global temperatures.

The point of the paper is to assign responsibility – and thus the potential job of clearing it all up – to those who dug and pumped up those fuels.

The problem with this is that the basic contention is tosh. For whatever responsibility there is for emissions lies not with those who made the supply, but with those who demanded it. It’s you, me and our grandparents and our selfish desires for transport and warmth in winter to blame here.

Elsewhere

TECH GIANTS AND SOCIETY
Sir, Liam Byrne says that tech giants should be adopting policies from Britain’s glory days through such things as profit-sharing and worker ownership (Thunderer, Oct 10). In this manner they can take the high road and thus benefit the wider structure of society. I would hope that the shadow minister for the digital economy would have a working knowledge of the industry of which he speaks, but there is little evidence of it. The industry already works on share options and stock grants — the very method by which the profits and ownership are shared with the workers.
Tim Worstall
Senior fellow, Adam Smith Institute

Still not managed the last letter yet though, an ambition still to be achieved.

Elsewhere

Employment growth and technological change really do tend to come from new market entrants, not those already extant. And as with new ideas that advance one death at a time as the academic establishment winnows itself, so too with companies. When one firm optimised for a specific task finds that task no longer needs doing, then corporate death is the correct response. Distribute the assets again into new places so that other problems can, and will, be addressed.

Fun how the sums never do add up, isn’t it?

Simon Woolley and The Guardian are telling us all how appallingly white Britain’s elite is. This is rather a large campaign by them in fact. One part of which gives us our nomination for the most egregious piece of innumeracy to appear in The Guardian:

But right now, the path to power for minorities is strewn with rocks and hurdles. A BBC study last year – accompanying David Harewood’s documentary Will There Ever Be a Black Prime Minister? – highlighted the fact that 50% of the 2014 intake for Oxford and Cambridge University was taken from five private schools.

Surely one of The Guardian’s editors was going to catch that? After all, most of them did go to private schools and then onto Oxbridge. They’d thus have personal experience of the relative sizes of the various institutions.

On The Guardian’s the Colour of Power report

But their real error lies in their complete refusal to even engage with the subject of age cohorts. They draw their numbers for BAME Britons from the 2011 census. Which is the right source, it’s the best we’ve got, it gives us some 12.5 per cent of the population as such. But that same census also lays out that ethnic composition by age group. Among those over 85 – what we might call the top dogs of the last generation, or at least those they were drawn from – we’ve about 2 per cent BAME. Among those under 4 we seem to have some 21 per cent BAME. It’s a reasonable gradient between those two as well.

Large scale immigration is a fairly recent phenomenon. As such, the portion of BAME Britons declines as we work our way up through the age cohorts. Sure, we can all argue about which group we should be using as our proper comparator here, maybe it’s those past 50, or past 55, but we do start to get to groups which are some 7 and 8 per cent BAME when we consider those we think will have risen to float on the cesspool of national power.

It’s a truly terrible report.

Elsewhere

Anne Perkins manages that rarity in The Guardian: a piece with a headline which is true. She complains that Ryanair isn’t just an airline, “it’s a parable for our greedy times”. And indeed it is. Although not quite in the way she thinks, of course.

On that Brexit divorce bill thingie

This also means that whatever the bill ends up being, it is a sunk cost. We’d definitely have to pay if we stayed, we’re going to have to pay – preferably a figure at the lower end of the range – if we leave, thus the bill has no effect whatsoever on the decision to stay or go. That’s what we mean by sunk cost.

To put this another way, to remain would be to sign up to a never ending series of those €100 billion payments, to leave is to draw that line in the sand beyond which we can indeed spend the cash on the NHS if we so wish. Or even not tax ourselves and leave the money fructifying in our pockets.

There simply isn’t a Brexit divorce bill at all, there’s only a clarification of how much continued membership would cost us.