Elsewhere

So, they strengthened the headline a bit:

The BBC, not its presenters, is the real tax dodger

A bit stronger than me:

Some 100 or so of the BBC’s highly paid presenters and talent are said to have used such a scheme, on the grounds that the BBC encouraged them to do so. It’s employers’ NI which goes unpaid here, so who is the tax dodger? Possibly the employer, the BBC itself?

Sadly, they took out the reference to Richard Murphy, the man who recommended such schemes for nannies in The Observer.

Elsewhere

Again, I’d prefer the exorbitantly free market ethos of Hong Kong to the Nordic disposition. But it is still true that if you want that Scandi life then you’ve got to do it as they do. Very local government and taxation plus a distinctly less economically interventionist government – that’s the only way you’ll still gain the growth which allows all that welfare spending.

And my real point

This is the great argument against state or similar control of technological experimentation. Not that the state or similar body will be more or less efficient at producing an output. But that it will constrict the paths taken, and thus leave us poorer. Political direction leaves every maniac with a grudge the power to prohibit. While the market, on the other hand, lets the maniacs get on with seeing what works.

Stealing a point made here one again

That Elon Musk has stuck a used car up in the Van Allen belt is seen by those mature in the ways of business as a blindingly good piece of advertising.

The rocket had to be tested and no one’s going to put anything valuable on the first shot of a new lifting platform, so why not add $50,000 of old banger to gain worldwide exposure? Seriously, why not? Other such tests of other rockets have been, in the past, simply festooned with scrap metal – and no one watched a live stream of them.

To the sort of people who produce The Guardian, however, this is an outrage. They seem to see it as an argument that individuals, even rich ones, simply shouldn’t be the people off exploring space. That it is something that should be done by “states, communities and united peoples”, in common:

Elsewhere – and thanks to a commenter whose name I can’t recall

Her Majesty’s Revenue and Custom’s crack down on tax-dodging has brought in about one-third of the amount that it was predicted to raise. And HMRC’s estimate of the tax gap – the amount being dodged – is some one-third the amount that had been claimed by the more vociferous of the anti-tax dodging campaigners. It’s possible to think that there might be a connection between these two facts. Such as: perhaps the campaigners are simply wrong in their estimates?

Elsewhere

Yes, we agree entirely. So, where are those field trials? As one of us has pointed out half a decade ago, they’d be illegal. Dumping that waste product into the oceans, that waste that people will pay you to take and which will, as far as we know at least, be a partial solution to boiling those same oceans, is illegal. Even just a few thousand tonnes into empty water, something which might suck down a billion tonnes of CO2, two Britain’s worth.

The last field trials were in 2007. Positive results, it all looks like it will work, at low cost, and be that partial solution. But nothing is being done. No more research is being carried out.

The world simply isn’t serious about climate change, is it? And we’ll not believe it is until those field trials on this technology take place either.

Yet more elsewhere

The final piece from Monday’s blitz:

This conceit works the other way around, of course. It’s not possible for us to examine our supply chain. Because once we get past a level or two, that supply chain is the entire global economy. For example, if my hip replacement was done by the NHS with these child labor-derived tools, then your reading material (this article) used child labor in its supply chain.

The current movement that we should all be checking our suppliers fails for the same reason that central planning did last time around: We simply cannot examine the global economy in enough detail to find out who is doing what and where.

More elsewhere from yesterday

Bitcoin is, of course, a mania – a delusion of the sort that human societies are prone to. This is fighting talk from someone who declared in 2011 that bitcoin was all over. Being wrong is not interesting – it is rare things which are interesting, not common ones – but the psychology and economics here are important.

The classic text on this topic is Charles McKay’s Extraordinary popular delusions and the madness of crowds. Human societies are prone to manias which seem to defy any sense or reasonableness. Certainly markets can be so overcome, although the witch burnings show that it’s not purely an economic phenomenon.

Elsewhere

It is the Grand Delusion again, that the aim and point of this government business is to change humans into fitting the system, rather than the system existing to allow us to be human in all our messy glory. New Soviet Man, that non-human that would make centrally planned socialism work, is no different in basic philosophy from NHS Man, the thin lipped and hipped prude who does nothing fun in order to die unhappy but at the convenience of the government run health care system.

Elsewhere

At CapX:

Spotify is the very terror of the age apparently, as it means that we, the customers out here in the market, get masses of free (or at least very cheap) music, while the producers of it, the songwriters and bands, get fractions of a penny. Well done Mr. Harris over at The Guardian, this is the very point of a market economy in the first place. To be inelegant about it, sod the producers and look at the consumption.

In The Times:

Those sleeping rough can be broken down into two groups: the transient homeless who get picked up and placed in at least temporary accommodation quite quickly, and those for whom accommodation isn’t the problem at all.

Indeed, many of this second group, who suffer from a variety of illnesses, would still have roofs over their heads were it not for their distinct problems. The difficulty is not in finding them accommodation; it is in keeping them in it when they have it.

I get mail

From a large and decrepit building in SW1:

Re your CapX story, and speaking as a landowner and landlord,

I agree!!!

Concerning this:

All of which makes our post-Brexit farming subsidy system obvious enough. We can lower the cost of becoming a farmer by lowering that input cost of land. All we need to do is stop sending money to the people who currently own that land. Sounds like a bit of a plan, really. And given that this is pretty much all that we currently actually do to “subsidise” farming, doing away with this malpractice means that we’ll just stop subsidising the entire sector completely.

Britain’s future farm subsidy system should be not to have one. Precisely because of the new evidence on land prices, even thinking about that outcome lowers the price of farmland – and why on earth would we want that to be expensive in the first place? As long as we’re not landlords, of course.

Elsewhere

Some governments haven’t done this first and vital task. Some are even the cause of the lack of legal and economic certainty themselves. Economists may call this a lack of institutions, Mr Trump may call it being a s***hole. One is more polite than the other but both are true. Abject poverty is the result of government failure these days, nothing else.

Elsewhere

But then think about this in that historical sense, a GDP per capita of $600 a year. Or the current global one, something like $8,000 (depends upon who is doing the counting a bit for that one). That we’re worrying about $34,000 a year, that this is poverty, is exactly the example we need of how well that American capitalism has worked over those centuries.

That the poor of our nation live better than 90 percent of anyone only 100 years ago, better than anyone at all from more than 200 years ago, shows just how fabulous an economic system it is.

Sure, it’s not perfect, it could do with some revisions here and there, but this system — the rule of law, markets, and capitalism — delivers in the one thing that truly matters: raising the living standards of the people, most especially poor people. Even more, no other economic system has managed this at all.

Elsewhere, elsewhere

But let’s leave these mealymouthed quibbles aside shall we? And celebrate along with the High Pay Centre. Fat cat pay has gone down significantly, in the very recent past. Thus, given the apparent iniquities of such high pay, this must surely have made our green and pleasant land hugely and vastly better.

Well let me allow a little bit of that disinfectant of sunshine into this debate. We’ve not seen any improvement in the rest of society – not even the slightest change – as a result of this narrowing of the pay gap. So, in fact, all that whining about the pay of 100 people only tenuously, if at all, connected to our domestic economy, doesn’t matter a damn.

Good, glad we’ve got that settled, so what other Shibboleths will we manage to disprove in the next 12 months?

More, more, elsewhere

As William Shakespeare told us, there are ages, seven of them, to the life of man.

The idea is rather older than that, forming the basis of the Sphinx’s riddle as well. My point being that we all do, barring unfortunate accidents and circumstances, end up in old age. Given that we all do, there’s no economic problem here, for something that happens to all is quite easy to deal with.

However, increasing lifespans do mean that we’ve got to recognise that those different ages, old age itself, turn up at rather different ages these days. That does pose an economic problem and also a political one. For what is the correct age at which we now say that people are old? When they are due some privileges from the rest of us?

AMA Muhith has just suggested that in Bangladesh, this definition of “senior citizen” should change, from a general idea of 60 years of age to one of 65. This isn’t a hugely important change, as there’s not much that goes with being so called.

But it’s an illustration of something much more important — pensions ages and any other fiscal or state privileges we might grant to the old, and at what age we consider them old enough to gain such privileges.

More elsewhere

Yes, you’re quite right, CryptoKitties is entirely ludicrous, just absurd. CryptoKitties is also why economists insist that it really doesn’t matter if the robots come to steal all our jobs. No, this does not make economists absurd nor ludicrous, it’s just that they’re looking at the world with a slight list to their thoughts.

Yes, this quite possibly could mean a society in which absolutely everything is done by the machines except for the amassing of collectibles on blockchain. A CryptoKitty licking a human face, forever.

Elsewhere

Quite why this is so can be argued. It could be the patriarchy, the oppressions of capitalism, the manner in which we simply don’t have enough female politicians to sort things out properly. It could also be that this is just the way things work in a species that evolved as hunter gatherers.

An often monogamous and usually sexually dimorphic animal, one with an exceptionally long period of childhood helplessness, has a division of labour in the raising of offspring? Get away, it’s obviously ridiculous that hunters might provide a little more, gatherers nurture. Occam’s shaving kit does however insist that if we have two explanations which both explain all of observed reality then we should prefer the simpler.

Spotting the delusion in the wild

The IPPR is the latest groupuscule to insist that the capital share is rising:

And worse again. They actually give us no evidence that the profit or capital share is increasing. They simply tell us that the labour share is decreasing and the assumption made is that the capital share is the mirror image. It isn’t. Obviously, if we look only at the wage share, it isn’t, we must add back in the other costs of employment (yes, including increased NI contributions, taxes upon employment) to gain the true labour share. But even that’s not enough.

There are four sectors to the national income, capital, labour, mixed income, subsidies to production and taxes upon consumption. Mixed income has risen as there are more self employed about. This reduces the labour share while not changing the profit share one iota. Taxes and subsidies – well, think on VAT, a tax on consumption, this has risen substantially over the decades. So too has the amount of subsidy to production – think of all those feed in tariffs, this is where they appear in the national income.

The amusement of Willy Hutton on Bitcoin

He doesn’t get it in the slightest:

Blockchain is a foundational digital technology that rivals the internet in its potential for transformation. To explain: essentially, “blocks” are segregated, vast bundles of data in permanent communication with each other so that each block knows what the content is in the rest of the chain. However, only the owner of a particular block has the digital key to access it.

So what? First, the blocks are created by “miners”, individual algorithm writers and companies throughout the world (with a dense concentration in China), who want to add a data block to the chain.

Sigh.

Elsewhere

We’ve thus got to make a decision. Do we wish to have less absolute poverty or would we like a more equal country? The rich nations have, today, made the decision that more equality is more important. Europe quite happily taxes the rich a lot, knowing that this reduces economic growth, in order to redistribute to the poorer.

But do note that Europe has none of that $1.90 a day absolute poverty, it has passed through that stage. Even in the absence of redistribution, it still wouldn’t exist.

Bangladesh isn’t in that position. Even with more redistribution, there would still be that poverty — a more equal Bangladesh would still have it. But we might still say that greater equality is more important than poverty abolition.

Which is what AMA Muhith is telling us here. That the strategy is to work for that economic growth, not for the redistribution. Specifically, poverty removal is the policy, not poverty alleviation.

Let’s have enough economic growth that there just isn’t any more poverty at all. After that we can, if we want to, work on the equality part, on the redistribution and relative poverty.

Which is the thing that I agree with. There are varied problems and evils in this world but when I list them, the idea that some have more than others comes very much further down my list than the problem of some having near nothing.

Thus, to me, the solution is to gain that economic growth, as fast as we can, so that all have something before we worry about how much. That is, for a poor country, growth is the imperative.

Or, as I sometimes put it, worrying about inequality is something that only a rich country can afford to do.