653 posts • joined 12 Feb 2008
"Nice article but could have done with being a bit more precise about what form of globalisation you were talking about."
The piece coming up at the weekend goes into that subject using a different example.
Re: What a confused mess!
"where one can buy a lovely house (architecturally speaking) for $500. Why are people not flocking in droves to move to Detroit?"
I don't know if this is true but I offer it as an exp,anation that I've heard. That the City of Detroit charges you property taxes on what they think the house is worth, not the market transaction. So you might but a house for $500. But you'll be charged property taxes as if you paid $100,000, because that's what they *ought* to be worth. And at, so I'm told, 2-3 % pa of assessed value, that's quite a lot.
Re: Too much choice definitely makes me less happy
That's very much the point that the economists are making about opportunity costs. And yet, while I suffer from it myself, I've also lived in a society with fewer choices. Which, given that the choices available were along the lines of "food today" or "no food today" wasn't notably better.
It's a toughie, maybe there just isn't an answer.
Re: It's a PHYSICS award
Ever so slightly unkind. You say:
"Back to the Physics - working GaN LEDs was a tremendous achievement, and not at all trivial scientifically. Thus prize well deserved in my book.
Economists can fuck off back to their own brand of astrological hocus pocus on their own time..."
My opening paragraph once again:
"This year's Nobel Prize in Physics went to the three Japanese guys who worked on, and got right, the blue LED. It's an excellent piece of work, enabling a whole new ensemble of energy efficient lamps and colour LED screens, and fully deserving of the prize. And yes, it might well change society in wondrous and wonderful ways."
Apologies, typo here
"For what we don't actually know is the electrical price of lumens?"
Should read "elasticity of demand for lumens with respect to price."
The real it about this
Is that GT was previously a manufacturer of the machines to make the sapphire boules and then to cut them. Good machines too.
Then they said we've got this next generation of machines that are much better. So, let's go into business producing sapphire, not just the machines to make sapphire. So they do and they sign up with Apple.
And it turns out that the new machines aren't quite as good as they thought they were. Oh Dear.
Have I told you that my office is in the building of a sapphire producer?
"Not that I didn't enjoy reading it"
Ah, good, that's OK then.
Re: Economics is like philosophy
I tend to think that macroeconomics is, yes. Micro, not so much. We do know at least a few useful things there.
Re: There is another way to make the numbers fit.
We've moved beyong it being considered aberrant (in most social cicrles at least) but "rare" still applies. We've simply no evidence at all that the number is as high as 30% of the population. And lots of people have been looking and counting for some time now.
The very highest number I've seen is from the likes of Stonewall (and Peter Tatchell and the like) at 10%. And that's for one lifetime same sex experience.
It's possible that the number could be as high as that in some other cultures. The Ancient Athenians had a thing for adult men to have teenage boy lovers, there's at least a sub-culture among the Pathans of similar. But that doesn't apply in this culture we've got right here right now.
Re: A pedant writes ...
Lifetime number, not regular users.
Re: A pedant writes ...
Slightly unfortunate subbing error there. Should be 10% of hetero population
Re: 240 million trembling knees
"ladies of the night would be earning 100K a year."
Sorta: there's some expenses in there too. They'll get charged at least double rent on their working flat for example (that's pretty standard, double rent in such cases). So it's, umm, turnover, not income.
The standard estimation is that those servicing the working class get high end working class wages, those the middle class high end middle class wages and so on. Certainly some of them will be making £100k a year in actual income.
Re: I for one look forward to this
"Economists actually believe - no really, they do - that if you allow people to be selfish then everything magically self-organises into the best of all possible economic worlds."
Well, no, not really. In fact you'll very definitely find that all economists reject that idea. What you could get all economists to agree to is the following two precepts.
1) Self-interested behaviour sometimes to often leads to the optimal outcome.
2) Sometimes it doesn't.
As examples of 2) every economist would agree that public goods and externalities can (please note, not will be, but can be) be sub-optimally provided by the interactions of purely self-interested behaviour.
Most of the arguments in the subject are about which other things we should add to 2) and that Sorites Paradox of what is the definition of "sometimes to often".
That's without even delving deeper into the difference between being selfish and enlightened self-interest, the coping mechanisms that social beings like us human have to others' selfishness and so on.
Economists simply do not believe what you think they do.
Re: I for one look forward to this
"The total energy flux from the sun, geothermal, and nuclear is still a finite number."
OK, sure, even I'm willing to agree that the economy might not expand all that far once the Sun stops shining. The argument though is rather more about whether there are actually any pressing limits to economic growth, other than, say, the heat death of the universe?
I for one look forward to this
"Secondly, in the long term, indefinite economic growth is not possible as it violates the Laws of Thermodynamics and would result in Earth becoming uninhabitable long before it otherwise would. I propose to expand on that in a future piece."
I'll admit that I'm a bit hazy about the details of physics but don't those laws of thermodynamics refer to closed systems?
Thus if someone did something entirely mad, like, say, sticking a giant nuclear furnace up into the sky then the Earth would not be a closed system in terms of energy? OK, agreed, we've then got to posit methods of harvesting that energy. And who is going to accept the idea that plants, just plants!, might spontaneously develop a green sorta chemical that does that?
I agree, my scenario is really pretty way out there, most unlikely. But is it sufficiently likely to make the not possible possible?
"extracts 92% of the energy from fuel,"
That's fine if we are looking at fuel as the scarce resourse. For coal, nuclear, gas, we are. But for solar, given insolation, we've not got a shortage of the primary fuel. We've a cost issue, sure. But if we can (an asumption rather made) get cheap solar then eficiency isn't all that important.
Yes, sure, greater eff is better. But if we can get all the W we want at 3 cents a W, then so what?
Re: Is your money where your mouth is?
My current work (a start up) is entirely devoted to extraction of the scandium necessary to power those cute little sofc fuel cells (and possibly to be used in aluminium alloys for wind turbines, those are the two largest markets for the element). So you could possibly say I'm working on it.
In terms of direct expenditure by myself, rather than time, effort and investors' money, perhaps rather less. Perhaps only my subsidy to an academic testing the viability of using Sc in sofcs well over a decade ago.
Re: Tim's hopes for solar and wind are doomed
The Spanish proved that wrong though. Their solar panels were generating at night.
Of course the reason was that the feed in tariff was so high that it made sense to use coal produced mains electricity to power the lights to shine on the solar panels to produce electricity at the higher feed in tariff price.......
I've long though that every new law, every new piece of public policy, could be greatly improved by having a group of out and out criminals* consider it for a few months before it's enacted. Just to see if they can find a way to make money out of it and thus uncover the flaw in the proposal itself.
*To the extent that this group does not already include all politicians.
Re: 5 kW from 1 micron thin film SOFCs?
No, no evidence of that at all: for I'm projecting from two pieces of information.
1) The size of backplate etc that Bloom Energy uses in its scandia stabilised zirconia plates and their power output.
2) The volume of that scandia stabilised zirconia (the scandia being the expensive part, zirconia is by comparison free) that you'd need it you used that inkjet printing method (and I used 3 micron, giving three passes to make sure that missed pixels don't lead to incomplete circuits).
I'll admit that that's very much back of a fag packet working out from me.
Given that even scandia based SOFCs operate at 650 oC to 800 oC, they're really best thought of as combined heat and power devices for homes/factories.
Re: The problem with this article...
"cheap fertiliser comes from cheap oil"
Not really. You make fertiliser from natural gas (Haber Process).
But cheap fossil fuels, yes.
Well, the difference being that the EU ruled (or the EU court did) that Vodafone didn't owe any UK tax. Therefore it's unlikely that the EU will now say that it did.
Just to clarify: the EU court said that while that money was in Luxembourg then the UK couldn't have any of it. But if it moved to the UK then of course normal tax would be payable. So, Vodafone moved some to the UK in order to pay a dividend and paid tax.
There wasn't even a "deal".
"This is my other point of contention. Is this necessarily the case? Are the two really inextricably entwined? Are there not governmental mechanisms which can be used to reduce national inequality, without lowering the demand for international trade?"
Sure, there are other policies that can be used to change inequality. But the effects of this particular one, globalisation, will be as advertised.
I'm not particularly opposed to reducing within rich country inequality either (I don't think it's very important and I might well oppose certain methods of doing so for the side effects of those methods, but no great ideological objection to the idea). I would be greatly opposed to choking off globalisation for the sake of reducing that inequality though. Precisely because the effect on hte absolutely poor is directly linked.
Re: Generally correct
I've written about that elsewhere. And I find Klein's attitude to be truly fascinating.
Ontario had feed in tariffs on solar. This is to encourage people to install solar panels to beat climate change. It makes installation cheaper for those who do it by providing a subsidy.
Then they say that you can only get these subsidies is 60% of the solar panels are made in Ontario. Hmm, well, that clearly does violate WTO guidelines. You can have all the renewable energy subsidies you want but you can't have place of origin qualifications for them.
So, yes, Ontario gets sued and the origin requirements are scrapped. So Klein's right so far. It's the implication that she gets so wrong though.
What's the point of the subsidies? To make installing solar cheaper and thus make sure more of it happens. What's the effect of allowing cheaper EU and Chinese panels to collect the subsidy? To make panels cheaper to install and thus lead to more being installed.
And we can tell that imports are cheaper: because the local to Ontario factories can't sell any when the local origin requirements are abolished. So, the abolition of the local content rules means that solar panels in Ontario are cheaper, ergo more will presumably be installed and climate change is closer to being beaten.
Klein then says that the trade rules frustrate the fight against climate change. But the outcome of the trade rules is cheaper solar panels and thus more fight against climate change.
Someone, somewhere, is very confused here. And it ain't me.
Not written by me although I orginally made a couple of the points that it then picks up.
Perhaps the most important one to make is that the very start of the Spirit Level is looking at the Easterlin Paradox. That, past a certain point (some $15,000 a year in GDP per capita is the usual identified point, this being where the basics of Maslow's Heirarchy are covered) greater wealth or GDP in the society doesn't seem to increase happiness very much. This is in fact wrong, as it does, just not very much. But let's go with the idea that it's correct. It's at that point that inequality, according to Pickett and Wilkinson, becomes the defining issue.
But please do note: this is them stating this. Growth to beat absolute poverty is great, it's only when we get above that Paradox level that inequality becomes so important. That's why all of their comparisons are with OECD countries only.
I am comparing matters across global levels of poverty: including many countries that are quite clearly well below that $15k a year standard. Even by the Spirit Level arguments raising incomes there in an absolute sense is more important than inequality.
Further, I'm discussing something, globalisation, that has different effects on the two things. It increase the incomes of the absolutely poor. It also increases inequality within the rich countries. We thus do face a moral point. Should we continue for the good being done to those absolutely poor? Or should the harm done to the relatively poor outweigh that?
It's not explicitly stated in the Spirit Level that the gains of the absolutely poor are worth more in terms of human happiness or utility. But it's certainly a possible outcome of their analysis.
Re: Race to the bottom
"$32 trillion in liquid assets squirrelled away off-shore, doing NOTHING, is a disgrace not to mention a giant black hole in the economy:"
Because banks do tend to lend out the money that is sitting in them. And if shares are simply registered as belonging offshore, well, they're still shares in that company that's doing the work.
Even the people who came up with that $32 trillion number (Tax Justice peeps I think) don't say it's doing nothing. They do say it ain't being taxed but that's not the same as doing nothing.
Re: So many bum assumptions,
"but it also seems odd you didn't mention Piketty at all."
Piketty is all about wealth distribution. This is all about income distribution. Further, Piketty, when he does mention global inequality, does so pretty much only to note that it is falling. For he's read Milanovic too.
Yeah, but you did notice the bit in the piece where I say I think the Spirit Level is hokum?
"The measure has no meaning outside the country being measured, it's deleterious effects are psychological and result from comparing self to those at the top in your community and country."
That's a difficult one to maintain. Because you're trying to straddle "community" and "country". And they're not actually the same thing. We could obviously say that my community is "Bradford Road, Doncaster" and it's the inequality in that which is important. At which point the inequality between my bit of Doncaster and Bradford isn't all that important. Or we could say that my community is Bradford, and it's the inequality in that which is important.
In either case the inequality between my community and the bankers of London isn't all that important. Or we could say that it's English, or UK inequality that is: but then that's not really a "community". And if there's something special about the political entity that we belong to then why is Scottish v English inequality important? Or why isn't entire EU inequality important (and worth noting that if we did measure that then it would be considerably worse than US).
I'm entirely willing to believe that there's gradations in this: perhaps it depends upon quite how in your face it is. Meaning that local inequality in a village is more pernicious than the same level across a country perhaps. But if that's true then that does leave room open for it to still have some importance, even if less, across the world.
Re: Ditch the white cat, please
"Lovely argument concluding that the poor have only themselves to blame"
I thought I wrote a piece pointing out that we've got to decide which poor we want to help before we can decide our policy. Because this globalisation thing is great for the global poor but not for the rich world poor locally on our doorsteps.
I can't quite see the leap from that to the idea that poor have only themselves to blame. Could you point it out to me?
Re: More of a hostile takeover target
Actually, if Microsoft used its offshore cash to do the buying (it has enough) then that would count as an inversion (ie, move Yahoo offshore, out of the US tax net) and thus solve the tax problem as well.
Re: Further Explanation required
Sending money to the people that own that money is an interesting definition of "waste".
There is a solution to this
Change the aluminium alloy they're using. Amazingly, they should change it to the one that I sell. so what's Jony Ive's number again?
Re: But is a fluid definition a bad thing?
"Well you've just written a long article saying that absolute poverty is indeed gone. So in fact what you are saying is it's now time to address relative poverty?"
If that's what everyone wants to do, fine. Just as it's fine that we have another hula hoop craze. This freedom and liberty stuff does indeed mean that we get to, collectively and individually, do whatever comes into our pretty little heads.
But we should know what we're doing and why. Thus if relative poverty is the thing that we try to deal with next then it should be because it's inequality that we want to deal with, not "poverty" which has already gone.
Re: "you've got that $1.25 a day at US prices to play with...
That's part of the point of highlighting those historical figures. That really was the level of consumption in the past. Beaten earth floor, wattle and daub walls, a diet of pease pudding. "Sunday Best" wasn't just a phrase, it really did mean that most people had just two sets of clothes.
Bread riots didn't happen because people were missing their morning toast. They happened because they couldn't afford the "gallon" loaf of bread that was the major source of calories for a day (and that was well into Victorian times that that was true).
Urban labourer, 1830s, might get £20 a year in 1830 money. Skilled crafstman perhaps £50. Dr. Johnson's special state pension for being a genius was £300 a year.
That £20 a year in current purchasing power is some £1,400. A bit over £100 a month at current prices.
If you use the growth in incomes as a comparator, not the change in prices, then it's more like £23,000 a year. Call it £2,000 a month. Interestingly, that's around current UK median income.
That's how much living standards have changed. Your average Georgian/early Victorian was trying to live on £100 a month at current prices.
That really is how poor the past was.
"So, even though poverty has been defeated in the UK, if we want to have a prosperous society, it is still important to reduce the inequality."
Super, go for it. Convince the electorate that inequality is as important as you say. Do so and you win. I'm only complaining about the use of "poverty" when inequality is meant.
Re: "you've got that $1.25 a day at US prices to play with...
Graham, apologies, but you're still not getting it.
$1.25 a day is, around and about, £20 a month. Including housing, food, etc, etc, there just ain't anyone at all in the UK trying to live on that.
"Those, and many others, are the people who are having to visit the rising number of Food Banks"
And that's one of the reasons why.
I think it's just great that individuals step in to prevent the destititution of their fellows when the State fucks up. I've done it myself, as an individual, I recommend it to all as a general principle of life.
Or, as we might say, what in buggery is wrong with charity?
Re: But is a fluid definition a bad thing?
"Tim, you pulled your punch at the end, which is rather unlike you: I was expecting a full-on "throw another child onto the fire, Jenkins, the parlour's a little chilly at this time of year" paean to the innovation-promoting, bottom-line-boosting benefits of Victorian-era drudgery and workhouses. But thanks for pleasantly surprising me."
I'm more complex than that. Senior Fellow at the ASI means that, unlike Roy Hattersley, I do know (and have read) that Adam Smith wrote Theory of Moral Semntiments as well.
"My feeling is this: isn't the upwards revision of the definition of 'poverty' an indication that we're becoming more civilised?"
"Civilised" is a freighted word. You can hide almost anything in it. To be both absurd and vile I think that the absence of capital punishment is a sign of greater civilisation. Adolf Hitler insisted that killing the Jews and the Poles and the Ukrainians was evidence of greater German civilisation. They should do so because they were more civilised.
Yeah, I know, Godwin's etc. I'm perfectly happy with the idea that a richer society could, should even, make sure that those at the bottom gain from the greater riches. I'd be incredibly hesitant to ascribe that to "greater civilisation".
"As you quite rightly point out, people pay much more attention to the word 'poverty' than they do to 'inequality', but, in the interests of developing a more humane society - or, if you insist, in the interests of increasing the number of potential consumers of goods - surely a more fluid definition of 'poverty' (and the consequent implementation of measures to tackle it) can help to make life better for an increasingly larger number of people."
I don't believe, never have done in that bit you've got there in the "- -". And I'm fine with the Adam Smith definition of poverty. At the ASI I've praised the Rowntree folk for using it in fact. I only want us to be exact in our language. Absolute poverty is one thing, relative poverty or inequality is another. Given that they are different things it's entirely possible that the solution to each is different.
Which, actually, it seems to be. The solution to absolute poverty is free markets, trade and capitalism. so let's have those until absolute poverty is gone and then we can think again about relative poverty.
Re: Poverty gone?
"The point is that in the West nobody needs to be that poor, and the fact that people are is a disgrace."
Sure. And the last 50 years, maybe the last 100, is the first time in human history that anyone could actually say that. Rather my point really.
I am, for example, a big supporter of the basic income. We're a rich enough society that everyone can just get a cheque to cover the basics (and it would be the basics, around the level of the pension, say £130 a week or so) just because they're a citizen.
I insist that it's fucking marvellous that we've reached this point. Maybe only 30 or 40 countries have reached this point so far. Where absolutely no one has to die as a result of dearth of food, shelter, clothing, basic medical care (ie, vaccines and the like, not strange cancer treatments).
And not only does no one have to but absent other problems (mental health or addictions) no one actually does.
When you look at Maddison's numbers, absorb their implication, I'm amazed that people don't bow down before the Temples of Mammon every morning and afternoon. What we've got certainly ain't perfect but Dear God it's better than everything that came before.
Re: The measure of Poverty
There's one more difference too. US poverty is measured *before* almost all of the things done to try to alleviate poverty. Everyone else measures *after*.
25% also sounds pretty low. Think it's more like 50% isn't it? $23k a year or so for a family of four and median household income is around $50k? It is 25% for a single person, agreed ($12 or $13k, no?)
Re: The measure of Poverty
It's become an official measure now. Late 90s I think govt decided to define it as less than 60% of median income adjusted for household size. Pretty much everyone except the US uses this now.
I think (not sure, note the "think" there) that Roslin draws on Maddison's data. Wouldn't surprise me if he does at least, it's the standard source.
Re: Bad link for data?
You want the "Maddison Project Database" on this page:
It's also, amazingly, the first Google result for "Angus Maddison".
Re: @Tim Worstal
While I obviously agree in theory I don't in the specific instance you give. For one of the things you can't recycle used beverage cans into is new beverage cans. The alloy for the top of the can is slightly different from that for the side and bottom. When you crush and melt the old cans they mix and can't be used as cans again.
Meaning that you can turn old aircraft into cans, and old cans into new aircraft, but not old cans into new cans.
But that's just me bneing a pedant again: the core argument I obviously agree with.
Re: Where's Worstall?
Here's the standard definition (from Wiki of course):
"Gross domestic product (GDP) is defined by OECD as "an aggregate measure of production equal to the sum of the gross values added of all resident institutional units engaged in production (plus any taxes, and minus any subsidies, on products not included in the value of their outputs)."
GDP estimates are commonly used to measure the economic performance of a whole country or region, but can also measure the relative contribution of an industry sector. This is possible because GDP is a measure of 'value added' rather than sales; it adds each firm's value added (the value of its output minus the value of goods that are used up in producing it). For example, a firm buys steel and adds value to it by producing a car; double counting would occur if GDP added together the value of the steel and the value of the car. Because it is based on value added, GDP also increases when an enterprise reduces its use of materials or other resources ('intermediate consumption') to produce the same output."
Note well that last: a reduction in resource use is an addition to GDP. And yes, it really is value added.
So, of course the production of a car is a *part* of GDP as people value the car more than the value the steel and labour and rubber that went into making it (not always the case, the value of Trabants rolling out of the factory was lower than that of the raw materials).
But people also value the lovely software that some of you guys around here write. And that requires no resource use (time and effort, yes, but none of those "finite resources") in manufacture. But it's still an addition to value added and thus is part of GDP.
There's no surprise in this either: it's exactly the same thing Herman Daly is saying when he talks about quantitative growth and qualitative growth. Perfectly willing to agree that we can't have an infinite amount of the former. But given that "economic growth" includes the second as well (and actually is rather more important too in terms of the quantitiy of each) and we can have an infinite amount of that thus, therefore, we can have infinite economic growth.
Re: All been done before
I very much doubt this:
"I've got a £200 computer here that can do 32Billion floating point operations a second. I'd say that can model a whole years economic activity in the UK in less than a minute. In a month it could test and forecast and improve more economic models that you can shake a stick at."
"It's worth thinking it through: we've those 65 million utility functions. We've also got some number of things in the economy that we've got to plan the output of. Estimates vary, but some say there are as many as one billion things available in London right now. Not one billion individual items, but a billion types of items. And then there's geography: a two inch left-hand threaded brass wood screw in London is not the same as a two inch left-hand threaded brass wood screw in Lancaster.
The end result is that we'd need at least a century to be able to run this program. And no, that's not a century of elapsed time; we need to wait for another century of Moore's Law to kick in before we have a computer able to do this.
Which is our physical impossibility of planning our economy.
If you'd like the above argument in all its glory (8,000 words – with equations!), it's here in this excellent essay by Cosma Shalizi, associate professor in the Department of Statistics at Carnegie Mellon University."
The paper is here: http://crookedtimber.org/2012/05/30/in-soviet-union-optimization-problem-solves-you/
Re: Where's Worstall?
"Indefinite growth on a finite planet is not possible. I don’t need to explain that. "
Sadly you do. For it's wrong, badly wrong. And trying to explain it would aid in realising that.
It's linked to this:
"Looked at another way, GDP is also an indicator of the amount of the world’s resources that were used up by commerce. In other words it is the rate at which the planet is being raped."
GDP isn't an indicator of resource use. It's a measure of value added.
We all entirely agree that infinite growth in a finite system isn't possible. But you've got to be careful that the finity you're assuming actually exists. Sure, we can't have an infinite number of people on the planet. We also can't have an infinite number of cars, nor an infinite number of physical things. But people, cars, physical things even, are not GDP nor are they economic growth. GDP is the measure of the value that has been added in the economy. And as long as we continue to find new ways to add value then the economy can continue to grow.
This is true even in Herman Daly's "steady state" economy. Even if we only ever recycle everything, abstract no new physical resources from anywhere ever, as long as we continue to find new ways of adding value to our current stock then GDP will continue to rise.
I agree that economics ought to be taught as a general part of the school curriculum, of course I do. For then everyone would already know all of this.
Re: About time...
Very roughly speaking, and from memory, incidence here seems to be two to three times general population incidence. Don't hold me to that though.....
Occasional limp dicks in men of a certain age are also a fact of life. I've been known to also consider it a tragedy myself.
Re: environmental cost
Rutile is indeed a good example of that sorting having already been done for us by rivers. Ilmenite is the hard rock equivalent in many cases. Zirconia tends to be mined in the same manner these days.
Re: environmental cost
I don't, particularly, argue against peak oil. I do argue against the effect of it. Sure, agreed, there's "x" amount of stored sunlight out there. And we're fortunate that technology to extract it seems to be advancing faster that our use of it.
My reference to it here was about that peak oil argument that it will all take more energy to extract in future. As is being said about those minerals. With minerals it ain't true.
With oil? Could be true. Willing to consider that it might be. But, to stick with peak oil, not minerals, so what? Once it becomes ineffective to use fossil fuels we will stop doing so.
That's the bit of "peak oil" that I never have got. So, energy becomes more expensive. So we'll use more expensive energy then, won't we?
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