Posts by Tim Worstal

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

"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?

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.

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.

OK.

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.

Re: Apologetic.

Yes: http://spiritleveldelusion.blogspot.cz/

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

Quite.

"$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.

Re: Apologetic.

Yeah, but you did notice the bit in the piece where I say I think the Spirit Level is hokum?

Re: Apologetic.

"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

Eh?

"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: Further Explanation required

Sending money to the people that own that money is an interesting definition of "waste".

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.

Re: Ironic.

"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?

Naah:

"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:

http://www.ggdc.net/maddison/maddison-project/home.htm

It's also, amazingly, the first Google result for "Angus Maddison".

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)."[2]

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.[3] 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."

From here:

http://www.theregister.co.uk/2014/08/13/centrally_planned_economies_never_work_worstall_on_weds/?page=2

"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?

Eeek!

"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.

Err

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

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.

Shrug, and?

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?

Re: Zinc

Your zinc numbers are here:

http://minerals.usgs.gov/minerals/pubs/commodity/zinc/

Current mining 13.5 million tonnes a year. Current reserves 250 million tonnes. Looks a bit squeaky at only 20 year's worth left.

Resources: 1.9 billion tonnes. 150 years....not something that should be worried about too much.....and that's "identified" resources, who knows how much there is if we go hunting?

As to it becoming too expensive for coins, well, that does happen. Happened to silver in the 60s in most countries, to copper in most in the 90s ("copper" coins are now plated steel). I've actually bought truck loads of nickel silver (ie, I think at least, Ni and Zn) coins to process for the metals value.

but the reason it happens isn't so much the rise in the price of metals as the fall in the value of money: governments not ecology at fault here. That nickel silver stuff was in the wake of Russia having 3.000 % inflation for a couple of years for example.

Re: crushed waste, from the ground rock.

Yup, and a vital part of a rock crushing operation's economics is, well, would anyone like to buy my sand?

Can range in value from less than zero (the sand so fine that it is "mud") to $50 a tonne for nice quartz sand for the kiddie's playgrounds.

All I ever wanted was scandium but I've had to find out about tin, tungsten, and yes sand, in pursuit.

Re: environmental cost

Fair point, I stand corrected.

"Their wet and dry vacuum models are "Charles" and "George". "Henry" is their low-end model and doesn't do wet vacuuming, so I'd not recommend using one for hoovering an Asian beach,"

Re: environmental cost

Well, that "so little concern" for environmental degradation will bring out a hollow laugh in miners these days.

I do agree with the basic idea: we don't want to go polluting rivers just as we don't want to build roads over mating natterjack toads. But to give you one example from personal experience. I've a little project in development. Processing the crud left over from a previous mining exercise. Rock just sitting on a hillside. And to process it I've got to go through the entire mine permit process as if I was about to blow apart a mountain with dynamite.

Seriously, I want to pick up rock from where it is lying on the ground, grind it and separate it (using electricity and water, no chemicals at all) and the whole thing would take a year, employ maybe 5 people and have a total value of perhaps 3 million euros (gross turnover, not profit at all). License time? 2 years and counting so far.

Re: Ok, how about some calculations Tim

Oh sure, I know that ore goes bulk, not TEU (well, iron ore does, the ores I deal with go in containers, but then we tend to deal with 40 or 80 tonnes a month sort of levels). It's just a quick Google gave me a container ship fuel consumption first which I thought was good enough for a quick and dirty.

BTW, my definition of "quick and dirty" here is the hope that we end up with the correct number of digits and the first of them correct. Every thing after we've established the order of magnitude and that first digit I take to be detail.

Which brings me onto two bugbears of mine. The first being that this is usually good enough for any economic purpose (obvs not for finance, but for thinking about economies etc) simply because it's all such a vast and chaotic system that we're just being spurious in looking for greater accuracy. If you're trying to actually manage something perhaps greater detail might be useful, but in just trying to get an idea of theory, of what's important and what isn't, I take that quick and dirty to be good enough.

And my real rant is reserved for all too many people who share this joyous job of writing about the world. All too many on the broadsheets just don't have basic numbers in their heads. The EU economy is around $15 trillion a year, US $16 or 17 trillion, UK some £1.5 trillion. There's 30 million jobs in the UK, 10% of which get destroyed each year, 10% of which get newly created (jobs churn). And so on and so on. Yes, Exxon is the same size as a country: but the country is Luxembourg which has 400,000 people, or perhaps 200,000 workers, in it, and Exxon employs about 200,000 people. Not a great surprise that they've got about the same value added or GDP really.

I admit that I have to look up the relationship between a Watt and a Joule, every single time (and to work out what a calorie is I need to read it all several times): that marks me out as ignorant to all around here, good engineering types that you are. But I am essentially numerate in my field, the economy etc. And it really is one of my bugbears that all too many who write about the same sort of subjects that I do aren't numerate in that manner, just don't have that basic mental arithmetic.

Perhaps I shouldn't whine though: while the quality of economic commentary would be much better if they all did I'd get fewer gigs if they all did.

Re: environmental cost

"That does not change that everytime one of those is found and used there is one less of those easily discovered and devoloped resources to be used by future generations."

Yes, obviously, but if we adhere to that strictly then no generation can ever use anything. For no generation can ever be allowed to use anything that might reduce the ability of a future generation to use what has been used.

That's a sufficiently strict standard that there's no way we can hold a society to it. It would, obviously, mean that no generation could ever use any mineral at all. Not even those future generations that we're leaving them for, because there will be generations after them.

If the "running out" date were in 50 years time I might even sign up to such a plan. But even the earliest of such running out dates are thousands of years in the future (and some appear to extend to the heat death of the universe, for aluminium or iron for example) and who in buggery knows what society, technology or price are going to be like then?

Re: Ok, how about some calculations Tim

150 million tonnes of ore a quarter (last quarter 2013 actually). Call it 600 million a year. 2/3 is to China but let's call it all.

Fuel consumption? Well: "around 8,000 TEU would consume about 225 tons of bunker fuel per day at 24 knots"

Call that 300,000 tonne for 8,000 TEU (roughly 40 tonnes per container). That's not right for there's no way you run an iron ore ship at that sort of high speed. But for ballpark reasons only we'll take it.

Call it 4,000 miles Pilbara to China. Knots are different from miles but what the hell: 8 days travel for our iron ore ship (ignore returning empty, fuel use much less).

So 600 million divided by 300,000 to give number of ship movements. Each ship movement uses 225 tonnes bunker fuel per day times 8 days, 2,000 x 8 x 225 = 3.6 million tonnes fuel?

C to CO2 is something like 2.5 or so isn't it? So 10 million tonnes CO 2 emissions?

I find it very easy for zeroes to go walkabout in these sorts of numbers so do check this.

But as against 5 GT CO2 emissions globally, it's a very small part of the problem.

Do also note that the cost of that fuel is already included in the calculations of "cheaper". The emissions (because bunker fuel pays no tax) are not. The solution to which is of course that a proper carbon tax should be instituted.