March 2018

From a professor of international political economy

As a matter of fact I am not opposed to all tariffs. In fact, in the case of lower income countries I think that tariffs often have a strong and positive role to play in the development of economies, firstly by protecting local business and secondly by providing an easy, cost-effective, and desirable tax base that is charged on the effective rent that they are due for the loss of their natural resources.

What does that last clause even mean?

But so too, necessarily, in situations such as this (but not in the case of low income countries, as I previously described) well-being is reduced because whilst there are, undoubtedly, problems with the Ricardian theory of trade, it is also undoubtedly true that some countries do have a competitive advantage over others in some activities, and it is to the overall benefit of all that they be permitted to exploit that advantage so long as others are able to do so in their own area of advantage as well.

It’s comparative advantage, dingbat.

And yes, it gets worse:

James E says:
March 8 2018 at 12:16 pm
“easy, cost-effective, and desirable tax base that is charged on the effective rent that they are due for the loss of their natural resources.”

Is there a typo in there? Isn’t the tariff paid to the importing country, not the exporting country?

So if a developing country charges tariffs on imports (as part of its tax base and to protect domestic industry), aren’t the imported goods using up natural resources of the exporting country (ie another country), not those of the importing country charging the tariff?

Richard Murphy says:
March 8 2018 at 12:22 pm
No: many of these were effectively export charges and were for a long time considered unacceptable

I think they are just fine


Ritchie thinks export tariffs are a good idea. What he’s trying to crawl to is the idea that the taxation of resource rents is a good idea. Which it is. Stunningly good idea. But that’s different from export taxes. Because resource rent taxation is upon all uses of the resource, not just that portion exported. Tax the hell out of the location value of, say, oil. But don’t distinguish between domestic and foreign consumers.

Sigh, no wonder he thinks there’s a problem or two with Ricardo. He doesn’t understand Ricardo.

For Tim Newman and similar

Something we’re going to try over at the other place:

We’re going to start a new section here at the Continental Telegraph. We will indeed be having a standard review section but why not slightly turn the idea upon its head? Have the readership here being the reviewers?

That means that we’re looking for extracts from books that you’ve published. There’s not exactly a great shortage of self-published e-books these days after all. Let us have your sample chapter say – the one you already allow people to read for free as a taster. Or if you’re pushing out a poem or two, or a review, or a part of a story, that’s fine. Let us publish, on an entirely non-exclusive basis, that bit you’re already allowing people to read for free.

We’ll publish a set of them each weekend. Our readers get a taste of you and your work. No doubt some will offer criticism of it – sometimes robust. Both sides here get something useful. Authors an exposure to the reading public, the public an exposure to authors and works they might not otherwise hear of.

Send an email to “” with the extract. Also, let us know where the complete, or perhaps other of your, works are for sale. We’ll see how it all works out.

Dear Lord the man’s a fool

Neoclassical economics is built on the assumptions of microeconomics that say that all government activity is a market aberration and therefore to be minimised.

There simply isn’t anything at all in neoclassical economics which says that all government activity is a market aberration. Nor that it must be minimised. It’s simply not there at all.

Now, if you were to say neoliberal then perhaps you might be getting somewhere. But neoclassical economics is just a result of the marginalist revolution. Given that MMT accords with that basic idea, to look to the margins, it’s also neoclassical economics.

Note that he’s also trying to insist that Keynesianism is neoclassical, which it is, but then that it regards government activity as something to be minimised. That would be a hell of a surprise to Keynes.

Stunning economics here

The FT reports this morning that:

Since 2012, developers [in London] have begun building 44 per cent more homes than they have managed to sell. Last year, work was started on 1,900 luxury apartments, but only just over half have sold.

The reaction being:

I’m forever blowing bubbles,

Pretty bubbles in the air,


That’s the tale of the modern London apartment block for you.

And that’s the tale of market failure.

High prices call forth more supply which then lowers prices.

That’s market failure?


Early reports suggested that colonel Skripal and the unnamed woman may have been exposed to the synthetic drug, Fentanyl, which is up to 10,000 times more powerful than heroin and has been linked to scores of deaths in the UK.

Killing someone with opiates works. Assuming the dosing is correct.

But why?

Fun for Bathonians

Sir Roger Bannister
Gentlemanly athlete and physician who was the first person to run a mile in under four minutes, but was prouder of his achievements in neurology
The family moved to Bath, Somerset, when the war broke out. His daily walk to the City of Bath Boys’ School ended with a sprint up 150ft of steps, and he soon broke the school’s cross-country record.

City Boys’ is now Beechen Cliff. So those steps are those leading up from the station/Widcombe to Alexandria Park. Yep, they’ll get the lungs and legs working. I’ve walked them.


Gone ’round the other way ever since.

Well, they probably will actually

It’s always worth reminding ourselves of the realities Rees-Mogg ignores. And let’s be clear: he can’t ignore them. If we are to trade with the EU after March 2019 we have to give them data. If we can’t, we won’t trade. It really may well be that simple. They are not going to break their law to do so.

It’s so quaint to think that the EU obeys the law all the time, isn’t it?

We’re looking for writers

Over at Continental Telegraph.

No, don’t get excited, it’s definitely unpaid.

But we would be interested in more people joining the roster. There is no commitment to regularity, you don’t need to sign up to do a regular column or anything.

Pieces should be unique tho’. We’re not going to become simply a place to reprint blog posts.

If you’ve an expertise, or a point of view, we’re interested. If you’ve specific books, records, video games you’d like to review and tell us all about that’s fine too. That second might well suit those who review stuff at Amazon for example.

Drop me a line at “” and we’ll get things moving.

Hmm, right

Now, don’t get me wrong. I happen to agree that we do need more government spending. But let me be clear. This is not a matter that need be decided upon on the basis of whether or not there is sufficient tax to pay for it. The decision criteria is simply is there need, and are there unused resources that could meet that need? If the answer to both is yes then the spend is necessary and a responsible government should undertake it, knowing that the boost to the economy that will result will return the spend to the Treasury by way of additional tax yield in due course: that’s what the multiplier does.

Those unused resources being, at full employment as we are, what?

Ritchie on Maplin

Maplin had almost no chance of meeting the expectations of its new owners. The chance
that it could ever pay a 15% return was remote in the extreme. The chance that it was overstressed
in an attempt to make such payments is highly likely. The result is its employees
losing their jobs and a valuable resource for many being lost to the High Street.

But there wasn’t any value,. was there? For consumers valued it at less than the cost of providing it to them.

No, we didn’t

First, we spent £54.8 billion subsidising pensions in 2016/17.

We did not tax people by £54.8 billion. Not the same thing at all. The government didn’t tax my shit this morning, doesn’t mean it subsidised my easement.

Well, yes, it has

I have always argued that offshore is a mechanism created by capital to launch an assault on democracy. That is exactly what is written all over this suggestion. Macquarrie are making it clear that people’s choice to elect a government that might seek to take into public ownership the utilities that serve them should not matter: the ‘fiduciary duties’ of capitalism come first.

I would suggest Macquarrie are too late. First, saying it proves the public case against them. Second, the potential for this to happen is already foreseeable and so is not protected by treaties.

But the broader signalling is more important, and clear this morning. First we have Dyson demanding the UK behave like a tax haven. Now we have a warning that tax havens must be used to subvert the democratic choices of the UK population.

It feels as if class warfare has been declared.

The declaration was made by those like the Senior Lecturer who decided that anything owned by rich people should be nicked.