Economics

There’s an easy way to test this

Billion-dollar export trade puts lives of animals and crew at greater risk of ‘total loss’ through faulty design and inexperience

Ships carrying live animals are at least twice as likely to suffer a “total loss” from sinking or grounding as standard cargo vessels, the Guardian has found.

They’ve gone through the files of an insurance company to count losses of livestock vessels and non.

OK, cool. Now, there’s a much easier way of doing this. Go and ask the insurance company – or perhaps a Lloyd’s broker – for the premium rates to insure a livestock voyage and a non.

Prices are, after all, information…..

Go buy some cheap t-shirts

When Hla, 19, tried to go back to work seven months ago after having a baby, there were no jobs. Hundreds of garment factories in Myanmar had closed after western fashion brands cancelled orders due to the pandemic, leaving thousands of women jobless.

As lockdown gripped Yangon, her marriage broke down, her husband left, and her father had to sell his trishaw – no longer able to take passengers in the city. Her parents and baby were hungry. Five months ago, she became a sex worker.

No, go on. Go buy a handful of £1 t-shirts. Increase the business at garment sweatshops so as to buy Hla out of sexual exploitation.

And then, when some upper middle class bint at The Guardian clucks and tsks at you about your rape of the natural environment through your fast fashion addiction you can punch her in the mouth.

So, one of them calculation things

Vis a vis something I saw this morning.

So, how much human labour would be required to handspin the current global output of machine spun yarn?

Weird question I know. But interesting all the same for a certain level of interest.

I see one modern number which is 40 metres per second of yarn from a modern machine.

I see a re-enactor number (which is probably longer than actual pre-modern wimmins who did this a lot) of one metre a minute.

After much practice since this past spring, I now can spin an arm’s length of highly twisted fine thread, using the long draw, with naturally colored cotton whose fiber length is less than an inch, with my brass Indian takhli support spindle, in less than one minute.

Those are good enough numbers.

At which point I get stuck. Can’t see any numbers for global production of yarn in metres (70 million tonnes for manmade, but that’s not quite the same thing) and 70 billion sq metres of cloth made in India alone a year. But what’s length of yarn to sq m of cloth? Yes, obviously, depends upon the yarn and the cloth. But some rough idea?

The aim is to work backwards. The machines are 2,400 times faster at the spinning than humans alone (although the hand spin is still using a machine we’ll overlook that). So, how many human labour hours do we need to produce the current global production of yarn?

A guess here is that there’s not enough female labour hours among the 7 billion of us to produce that amount. But it would be fun to check that.

Aha. Global yarn (cotton, and cotton alone) production is perhaps 20 million tonnes. Not an accurate number but useful as to magnitude.

Hmm. T-shirts seem to be made from cloth that is 200 grammes per square metre. Ish-ish.

But that’s still not getting to metres of yearn per fabric produced which is what we need for hours of labour…..

OK, and yes, the $3,500 shirt in the comments. 2,000 metres of thread/yarn to 1 sq m of cloth. We have 70 billion sq m of cloth. And so 140 trillion metres of thread. Or, 140 trillion womanminutes of handspinning. Divide by 60 and 2,000 (minutes per hour and hours of a working year) to give us 1166666666 hours. Or, 1,166,666,666 woman years of labour.

Hmm, surprises. It would actually be possible to do this by hand. If one third of all women, of all ages, did nothing but hand spinning we could produce the world’s current consumption of cloth.

Anyone got any different calculations to offer?

Those new Scottish Bawbies

Let us assume, just for a moment, that Scotland becomes independent, issues its own currency and then follows Snippa’s advice on how to manage it including all of his joy over modern monetary theory.

The pound Scots (Modern Scots: Pund Scots, Middle Scots: Pund Scottis) was the unit of currency in the Kingdom of Scotland before the kingdom unified with the Kingdom of England in 1707. It was introduced by David I, in the 12th century, on the model of English and French money, divided into 20 shillings, each of 12 pence. The Scottish currency was later debased relative to sterling and, by the time of James III, the pound sterling was valued at four pounds Scots.

In addition to the pound Scots, silver coins were issued denominated in merk, worth 13 shillings 4 pence (two-thirds of a pound Scots). When James VI became King James I of England in 1603, the coinage was reformed to closely match that of England, with 12 pounds Scots equal to the pound sterling.[1] No gold coinage was issued from 1638 to 1700, but new silver coinage was issued from 1664 to 1707.[2]

In 1707, the pound Scots was replaced by the pound sterling at a rate of 12 to 1 (1 pound Scots equal to 1s 8d sterling)

The odds we’re offering on it taking 6 centuries to do that again are?

To answer a question

From BiS:

One despairs. I have a Bolivian friend here & yes, she’s in favour of MaS despite not having an atom of actual socialism in her. It’s a something for nothing culture. Like all of Latin America. And they’re not a stranger to it here, either.
Question for Tim. The entire culture is riddled with Catholicism & it’s moral teaching. So why does it fail to instil some actual morality into its flock? Anyone who gets themselves into any position with power immediately starts enriching themselves & their cronies at the expense of the people they’re supposed to be serving. Lying is virtually automatic. The truth is whatever they want it to be. And they have no shame when found out. It’s your fault for discovering it. With their politics, the best you can hope for is ones get in are a little less venal than the ones who didn’t. And the other side of the coin, why are they so gullible? They must know they lie. So why do they believe these assholes? Or do they not actually believe they themselves are lying? That somehow reality will rearrange itself in-line with their promises? So it might for others. Whatever, there seems to be an enormous disconnect with the real world.

We can approach this from the other end, the ultimatum game. That foundation of behavioural economics.

We’ve $100 and two players. The first player gets to decide how much of the $100 he keeps, the second gets to decide whether the deal happens or not. If it doesn’t happen then neither gets anything.

We find out that deals offering less than $30 – maybe $40 – to the second player get rejected and thus no one keeps anything. This is taken as evidence of a sense of innate fairness in human beings. Also of our willingness to undergo personal pain – the loss of $30 – in order to teach someone a wider social lesson – don’t be an unfair and mean git.

A Nobel was gained on this insight.

Then someone thought hmmm. This game was played with upper middle class American university students – the sort of subjects that a US professor with multiple $100 stashes for experiments would have access to at Yale, Harvard, Princeton. What happens if we play this with other people?

One such was – I think I’m right here – with Peruvians over the other side of the Andes. Not sure if on the slope down into the Amazon or still up in the mountains but really, very close indeed in culture to those Bolivians who have been screwed over for the past thousand years. Yes, thousand, because the Incas weren’t exactly democratically inclined free market capitalists when they expanded – that was closer to what Pol Pot tried to bring in than anything else in this modern world.

So, different people, different culture – different results. The second party in the game would accept pretty much anything. Hey, a $’s a $. And the first parties would offer $99 for me and $ for you and expect the split to be accepted.

It is a very different economic culture.

The next question, something where the answer is not as yet known, is how this works. Is that “fairness” and so on a result of seeing that something akin to a free market capitalism works and that this don’t fuck me over response is behaviour learnt from that? Or, perhaps, is it necessary for the belief to exist first before anything close to a modern economy works?

Dunno, no one does, but it’s sure an interesting question.

The logic here seems sound

President Trump’s trade policies, or perhaps the tariff parts of them, have turned out just like every economist but one predicted: They’re terrible. Unfortunately, the one economist who says otherwise is Peter Navarro, Trump’s main adviser on trade issues. I’m not even exaggerating that he’s the only one: A New Yorker reporter wrote about Navarro’s trade policies that “even with his assistance, I was unable to find another economist who fully agrees with them.” And that’s precisely because those policies are just plain wrong.
…..
It is true that sometimes an entire science is wrong. It happened to chemistry with phlogiston, geology with continental drift, and even economics in thinking that planned economies worked better. However, it’s still the way to bet that if one single member of a science or profession is entirely at odds with everything everyone else says and believes, then it’s the odd man out that is, well, odd. So it is with Peter Navarro and thus Trump’s trade policies.

Slave wages

He put out an appeal on Facebook for people to help him out on the small farm he owns on the island of Lipari, part of the Aeolian Islands archipelago off the coast of Sicily, from November to February.
He grows fruit and vegetables for the local market, keeps chickens and donkeys, and makes natural soap out of olive oil and donkey milk.
Volunteers will be given their own room with a wood-burning stove, a terrace, a hammock and views of the sea, including the distant island of Stromboli, an active volcano which frequently spews lava, creating spectacular nighttime pyrotechnics.
He will provide food, wine and wi-fi but there is no salary.

Slave wages there. Bed and board and no money. Of course, you can in fact check out and leave as well so it is only the ages that are equal to slavery.

Wow! Amazin!

Figures used by the Bank of England to track Britain’s five million freelancers show that average incomes dropped by more than 30pc in the first half of the year, revealing for the first time the full extent of the devastating impact of the pandemic on the self-employed….

GDP dropped by 30% (on an annualised basis it did), GDP is, by definition, all incomes in aggregate and……

I find this hard to believe

August’s gain leaves monthly GDP up 37% annualized over the prior three months. In August, monthly GDP fell 8.2% annualized over the prior six months.
On a year-ago basis, GDP was down 3% on a year-ago basis, compared with declines of 4.1% and 3.3% in June and July, respectively.

That means that the bounceback has in fact already happened. Being 3% down on a year ago is a mildish recession rather than anything serious.

Isn’t the euro such a great idea?

The argument in favour of the euro is that it will produce greater economic growth than not having it. So, what happened? The first time there was any major stress on the assembled economies, in 2006, the eurozone unemployment rate rose above the the all-EU one and stayed there.

Not really what was hoped for, is it?

No Boris, no, not this damned idiocy

Taxpayers face being on the hook for billions of pounds’ worth of mortgages under a “generation buy” scheme being considered by the government to get young people on the housing ladder.

Boris Johnson is reported to have asked ministers to devise plans for long-term fixed-rate mortgages with a 5% deposit. This could require the government to take some of the risk from lenders through a form of state guarantee — sparking concern among mortgage experts.

Sigh. Subsidising people who shouldn’t be buying houses into buying houses is not a good idea. That they shouldn’t be buying houses is proven by the fact that, without subsidy, they can’t afford to buy a house.

Sure, economics can be complicated but sometimes it’s really damned simple.

Student lockdowns

Students at universities in the Glasgow region are effectively being held under house arrest in their halls of residence. According to this particular Nicola, it is for their own good. The students are apparently at serious risk of dying from coronavirus.

If we turn to the data to see how many people under 30 have died from Covid in Scotland since the pandemic began, the number is in fact zero.

I have to admit that Mr. Ormerod pisses me off. For he occupies the sensible, free market-ish with provisos, economics slot at City AM. Which leaves me without a look-in there.

Plus he writes better than I do but that’s just piling insult upon injury.

Jeez people, get this right

The figures confirmed that the UK suffered the steepest recession in the first half of the year of all G7 advanced nations

No, ONS is the only statistical agency which has counted the economy properly, by including the loss of state provided services like health care and education.

Well done there, well done

A wave of demonstrations has erupted across Venezuela as angry citizens flout lockdown restrictions to demand an end to worsening shortages of everything from electricity and water to fuel and household supplies.

I’m told that (via the comments section at Samizdata) the Venezuelan minimum wage is now, at the free market exchange rate, under $1 a month. That’s under one United States dollar a month.

Socialism will make ye rich indeed.

Fun comparison

My theory is this: the price of old master portraiture is pegged to another commodity with comparable interest for billionaires. The last time Botticelli’s painting was sold at auction, in 1982, it went for £810,000, then the going price of the most coveted footballer. Today, a Premier League star with flowing locks and a roundel under his arm – Aston Villa’s Jack Grealish, say – would still cost an interested oligarch the same as a Botticelli. Sotheby’s transfer window opens in January.

The correct observation to draw from this being look how governments have lowered the value of money over that time period.

Err, never Ollie?

Consider the example of dynamic pricing. If you order goods or services online, you’ll probably have noticed that when booking a taxi or buying a rail or airline ticket you can be quoted different prices only minutes apart. The operators will argue that, armed with their complex algorithms, they are responding to a surge in demand with flexible pricing. In principle, that will benefit consumers who are willing to be flexible about when they travel.

It’s not easy to separate that legitimate practice from formal collusion. When does dynamic pricing shade into fixing a market?

Sigh:

A particularly stark and serious example was the banks’ collusion to fix the interest rate known as Libor (the London interbank offer rate), which fed through into market interest rates across the economy.

It wasn’t the banks, was it? It was specific traders, not the banks.

Then this is just insane:

In these unprecedented economic times, the most effective preventative course is pre-emptive rather than reactive. Online retailing is susceptible to collusion because sellers have to go through a single marketplace to reach customers. Their margins are at the mercy of whatever cut Amazon decides to take for itself, which in turn dictates that they will try to recoup the cost from consumers. Competitive capitalism points to the need in retailing, as in other services, to break up the tech cartel. Its pioneers are rich enough already and should have no objection to being cut down to size.

That 5,000 people are using amazon as the fulfillment house makes price collusion among 5,000 people more likely how?

The glories of state control

Whole of Sri Lanka hit by power blackout
Water supply and road traffic disrupted for seven hours after main power station suffers ‘technical issue’

Why?

The public utilities regulator said there would be an inquiry into the failure and gave the state-run electricity monopoly, the Ceylon Electricity Board, three days to explain the disruption.

Ah.

Not the hugest of surprises

US productivity accelerates at fastest rate in 11 years

The marginal workers are, one supposes, the least productive. So fire a lot of them and productivity improves.

Further, close own the least labour productive part of the economy – restaurants, bars – and productivity improves.

So, sectoral analysis then

Sectoral analysis is based on the insight that when the government sector has a budget deficit, the non-government sectors (private domestic sector and foreign sector) together must have a surplus, and vice-versa. In other words, if the government sector is borrowing, the other sectors taken together must be lending. The balances represent an accounting identity resulting from rearranging the components of aggregate demand, showing how the flow of funds affects the financial balances of the three sectors.

OK. The private sector must end up with more financial assets when the government is borrowing.

Equally so, the private sector must end up with control over fewer real assets when the government is borrowing. For the government is borrowing to take control over real assets. The same sectoral accounting identity means that as government does so then the private sector must have control over fewer.

There’s got to be something wrong with that because it cannot be that simple. But using a wide definition of real assets – like, the attentions of the people being paid money by government – it seems to be true. So, why is it wrong?