Apparently skimpflation is the new thing

To be a public commentator it is necessary to continually find some new thing to comment about. It’s the same with “influencers” on TokTok and the like - it must always be next week’s trend to be showcased, no one gets famous by being old fashioned. Which brings us to this new concept of skimpflation:

“Nothing prepared us for how much life has gotten worse,” Cole told the Guardian. “Most of these factors haven’t been picked up on by the Bureau of Labor Statistics. We thought these changes to products were going to be temporary, so it was reasonable not to account for the changes. But now everything has got worse all at the same time, so even if you tried to account for them, you probably couldn’t.”

Even if skimpflation cannot be measured conveniently, consumers have certainly noticed that the quality of service seems to be deteriorating everywhere. Consumer satisfaction indices are trending down, as they have been since before the onset of the pandemic, while consumer confidence was mildly better last month after dropping over the summer.

The thing is this isn’t new. In fact, it’s what those in our right minds have been warning about concerning the minimum wage.

There are a number of axes along which producers can adapt to a change in the price of inputs. One of which is simply make the product worse. Which is one of the things we said could/would hap[pen from a rise in the price of labour. That the offerings to us consumers would decline in quality. Here we have the effects of a rise in the cost of labour and the pointing is to the decline in the quality being offered to consumers.

We ourselves will just have to remain unfamous therefore by continuing to be old fashioned. A rise in the price of labour reduces the quality of products offered to consumers. And?

The incoherence at the heart of the Mazzucato Plan

Mariana Mazzucato has a plan for sorting out the world. It suffers fro a number of problems, only one of which is an illusory belief in governmental competence. There’s a logical contradiction in there.

If we want to ensure a socially just – and thus effective – transition, green investment banks must be governed democratically, and their financial assets should be shared collectively among workers and citizens. This could take the form of a citizens’ dividend that would provide everyone with a guaranteed minimum income, for example.

This is presupposing that the entire plan is profitable. Well, OK. But then if the plan is profitable then the use of green investment banks, governmental insistences, forcings and so on aren’t necessary.

Just assume, for a moment, that the initial diagnosis is correct. There’s a climate change problem, we’re causing it and something must be done. It’s possible that the something which must be done is not conventionally profitable therefore the investment won’t arrive under its own steam. Thus the forcing by government is required.

Or, alternatively, the system is altered so that such investment is conventionally profitable. Externalities are internalised, climate costs are now in prices, green investment makes sense in traditional money grubbing terms.

We would all agree that the capitalists are greedy for profit - sorry, are motivated by their enlightened self-interest. That means that we only require - again, assuming the base diagnosis is itself correct - one of the two sets of actions.

We either require the forcing into unprofitable investment or, having adjusted the system’s incentives, we stand back and gawp at the rush for the lucre to be had by going green.

What cannot possibly be true is that we’ve this gushing fountain of profit to be had which we also have to force finance to gulp from. And yet that’s what the insistence is. There’s going to be this massive profit to be had from greenery which must be shared directly among the citizenry but also we’ve got to force finance into partaking because there’s no profit available in their doing so.

We can’t believe that we’re the only people to spot this logical contradiction at the heart of this plan for the species. But then it never is popular to be pointing to the errors in recitations of currently fashionable nostrums, is it? However contradictory they are when piled upon each other.

So, what are we all going to do about aviation and climate change?

We’ve always struggled with the opprobrium aimed at flying when considering climate change. Currently the sector is some 2% of emissions which makes it an entirely marginal issue. Even when claims about the future are made - that it will be 20% of emissions say - that’s because total emissions will fall, not because aviation ones will rise all that much. Further, whatever limitations there should be, or will be, upon emissions we want those that can happen to be devoted to the highest value use possible. That being the very definition of being richer, that scarce resources are devoted to their highest valued use.

Combine this with the cornerstone of any liberal polity, that it is the individual that determines value - not some bansturbator in an office nor even majoritarian imposition - then if people wish to fly then why shouldn’t they? Staying within those necessary limits, of course.

However, even the debate itself seems to be missing technological advance. It’s possible to imagine all sorts of outcomes here. Plastering the planet with a network of trains say. Taking a week - instead of that month by rail - to get somewhere by airship. Limiting long distance travel only to the antinomian elite such as those visiting Glasgow this week.

Or, what we think is far more likely to happen. Synthetic aviation fuel:

Rolls-Royce, working with Boeing and World Energy, has carried out a successful test flight of its 747 Flying Testbed aircraft using 100% Sustainable Aviation Fuel (SAF) on a Trent 1000 engine.

SAF might not meet everyone’s definition of sustainable, true. But insisting that it isn’t also means that all biofuels are not, that burning American woodchips in Drax isn’t and so on.

It’s also possible to see a pathway to something that is sustainable by any definition. Really cheap solar power (Abu Dhabi is apparently managing 1.5 US cents per kWh in new auctions) the electrolysis of water and once you’ve got H2 then hydrocarbons are easy enough. Yes, this might well still be more expensive than current fuels but this is rather the point we’re interested in. Observation of people tells us that they really, really, value being able to leave on a jetplane.

We do not, by the way, offer this as investment advice or anything like that. That route to truly sustainable flying is one of those that is obviously technologically possible and the jury is entirely out on whether it is economically so.

Which does, finally, bring us to our point here. Imagine that it does work out that way. Synthetic jetfuel turns out to be entirely useful and appropriate. We then get to use the standard infrastructure of currently extant airports, ‘planes and so on to continue to travel much as we did before ‘rona. No, just imagine, as a thought experiment.

There are those out there who would decry this, aren’t there? The conclusion we must reach about those people being that their opposition to population mobility is an opposition to population mobility, climate change is just an excuse.

Trains aren't as green as all that you know

An interesting number from the trains regulator:

Due to the effects of the pandemic, passenger kilometres fell by 81% and trains planned fell by 22% compared with 2019-20. As a result, estimated normalised CO2e emissions increased by 316% from 35.2g to 146.5g CO2e per passenger kilometre.

Which we can compare to:

The average carbon dioxide (CO2) emissions from new passenger cars registered in the European Union (EU) in 2018 increased for the second consecutive year, reaching 120.4 grams of CO2 per kilometre.

Yes, clearly, lockdown was exceptional. The point being - and it’s an obvious one but all too rarely baldly stated to our mind - that emissions from any particular mode of transport depend upon the capacity utilisation of that mode.

Empty trains have greater emissions, per passenger km, that single occupancy cars. Further, a little manipulation tells us that a four occupant car has about the same emissions as the average pre-lockdown and special circumstances train journey.

Trains just aren’t as green as many seem to think, nor cars as un-green as the general insistence.

There is also a point that can be derived from this. For a train system to be properly green, as is generally assumed it always will be, it has to be packed. It’s not possible to have a system that goes everywhere, at all hours, with lots of spare capacity, and still have it be green. We can have green transport by the usual measures. But it does require that the trains which are a part of it be a heaving mass of folk fighting for a seat. Or, obviously, just as green, four people in a car.

If only Polly Toynbee understood matters

At least half an excuse for getting that fatted calf backing up away from the bludgeon:

Here’s one action that will be necessary: carbon taxes. Writing in the Financial Times, the economist Tim Harford recently suggested that every product needs a carbon price attached, sending a signal not just to the buyer, but right down every supply chain to use less energy in growing, manufacturing and transporting a product to attract less tax.

This is hardly a new idea and it’s not unique to Tim Harford. Bill Nordhaus gained his Nobel for pointing it out, Nick Stern his peerage. For that is the lesson of the Stern Review. If we accept - whether you do or not is entirely up to you - the basic idea that climate change is a problem we should do something about then the thing we should do is a carbon tax at the social cost of carbon.

Much as it will shock Polly this being something we here have been saying for decades. Get on with it in fact.

That will be necessary. But any climate-abating tax brings on green crocodile tears for poor people, often from the same Tory MPs who just voted to remove the £20 universal credit uplift. The claim that carbon taxes would disproportionately affect the poorest people was what killed off the fuel price escalator – a yearly tax increase devised by the Tories in 1993 to discourage driving – after owner-driver hauliers blockaded oil refineries in 2000. When the climate demands that fuel taxes rise, politicians make them fall.

That being where Polly is failing to grasp the important point. A carbon tax does not mean “tax carbon ever more”. It means “tax carbon this much and no more”.

Back a decade and a bit the fuel duty escalator was too high as a tax upon those emissions. As we pointed out once upon a time (now sadly lost to the ether, sorry) that hike in fuel duty that Ken Clarke started “to meet our Rio commitments” was 11 pence a litre too high when compared with the social cost of carbon.

The correct solution to climate change thus requiring lower fuel duty, not higher. Of course, this being politics no actual cut was made. Instead, not raising the tax again and allowing inflation to degrade the value of it reaches the same end point.

The IMF just proved this for us too. On page 18 here. UK petrol and diesel is near exactly properly taxed to take account of the expenses of emissions, local air pollution, accidents, congestion and the existence or not of VAT.

Just for the hard of understanding - or hearing perhaps - Pigou Taxes mean the right amount of taxation, not more.

If only there were some system of deciding what to do here

We’re told that lots of something that people use is in lots of things that people use:

About 7% of the world’s gold supplies are trapped inside existing electronic devices, meaning that, according to some estimates, by 2080 the largest metal reserves will not be underground but in circulation as existing products. What’s more, one tonne of extracted gold ore yields 3g of gold, whereas recycling one tonne of mobile phones yields 300g. So waste dumps and landfill sites are the new resource-rich mines.

Gold could be lying around in some mountain somewhere or it could be in some handy or TV that people like to use. We think we’re just fine with the idea that some portion of it is in use rather than lying around in some mountain.

We’d also note that it’s not actually unusual for some large portion of available metal to be in use somewhere. AT&T spent much of the 1970s paranoid that someone would realise that their telephone network was the world’s largest store of refined - and increasingly valuable - copper.

But it’s clear that folk are shocked by this. Or at least worried about that value that might be missed at the end of useful life of the electronics. If only we could devise some system that could sort this out for us. Aid in deciding what to do with that waste even.

Which, of course, we have. That combination of human greed - sorry, enlightened self interest - and the price system. When gold is profitable to extract from waste electronics then gold will be extracted from waste electronics. That lust for lucre will see to that.

That is, assuming that those facts on offer are true (not something we’d wholly agree with, gold plating in modern electronics is much thinner than the old stuff these numbers are derived from) then we’ve already the decision making process in place. The political and societal task then becomes being wise enough to leave it be and allow it to work to its conclusion.

In honour of this week's screaming match about the environment

COP26 is going to lead to an awful lot of insistences that we’re all gonna die, right now, unless we - well, unless we do whatever it is that the person screaming demands. Kill the use of fossil fuels, send $100 billion a year to the despots of poor countries, stop eating red meat, return to the life patterns of medieval peasantry and so on.

We’ve also been told this a number of times before, memory isn’t what it once was but we’d start with an estimate of at least 25 times so far, given that that appears to be how many COPs there have been.

At which point a small examination of another warning of environmental disaster. This comes from the New Scientist of 2007 and has been added to varied school curricula along the way. It’s not just some passing error. George Monbiot, just to name one, was using it as a reference to bolster his argument.

…both indium and hafnium – which is increasingly important in computer chips – could be gone by 2017, and terbium – used to make the green phosphors in fluorescent light bulbs – could run out before 2012.

Indium did not run out in 2017, terbium is still available despite that posited end date of 2013 and the idea that hafnium will ever run out at anything like current consumption volumes is a gross absurdity.

The thing about science is that when an hypothesis meets reality it’s reality that wins, not the idea. The process of science is to examine hypotheses (yes, we know hypothethi is wrong but rather fancy it all the same) and, where reality does disagree with them, change the idea so that it does accord with the facts the universe is presenting to us.

What went wrong here is explained in full in this (free) book. The short answer being that those who made the prediction had no knowledge of metals, minerals, mineral reserves, mineral resources, extraction techniques or even the definitions of most of them. All certain handicaps to trying to measure the availability of metals, minerals, the relationship between them and reserves, resources and so on.

We do not say that every assertion made this week in Glasgow will be as idiotic as our example here. But every one does need to be subjected to the same scepticism. For that is actually the scientific method, that assertions are tested against reality and it is always reality that wins.

There are times when we just don't believe what people try to tell us

We agree that we might be wrong to do so but still:

Johan Rockström, the director of the Potsdam Institute for Climate Impact Research and one of the world’s foremost climate scientists, warned that the 1.5C target was not like other political negotiations, which can be haggled over or compromised on.

“A rise of 1.5C is not an arbitrary number, it is not a political number. It is a planetary boundary,” he told the Guardian in an interview. “Every fraction of a degree more is dangerous.”

We get the very definite impression that some people are using climate change as an excuse rather than a reason. It used to be, for example, that we were all told that 2 degrees was the limit. Only when it became obvious that a capitalist, globalised, free market system could meet that 2 degree target did we start to get the shouting that actually, 1.5 was necessary. For there are those who want to insist that it is the overthrow of capitalism - and markets, globalisation - that must be done.

As George Monbiot says in the same edition of the same newspaper:

Capitalism is killing the planet – it’s time to stop buying into our own destruction

The base understanding is in error. The assumption is being made that capitalism demands growth. Which isn’t the point at all. Humans desire growth in the economy - who doesn’t like being richer? - and capitalism is a good way to get it.

But it’s also wrong in another manner. As the basic economic assumptions behind all the predictions of climate change say (the SRES models) continued economic growth is entirely consistent with the continued health of the planet and also with beating climate change. What’s worse for the argument that capitalism is to blame is that those models with globalised free market capitalism do this better, Horrendous results stem from having a regionalised, non-market, socialised economy (the B2 model).

The reason being that very lust for profit directed by that capitalist and market system. It encourages efficiency, it encourages the use of fewer inputs to gain any specific output. Given that the ecological constraint is those inputs (defining the disposal of wastes correctly as an input as well) then for any given standard of living a capitalist and market system will use fewer inputs. Equally, for any possible set of input limitations a capitalist and market based system will provide a higher standard of living.

We can’t help but think that at least some of what we’re being told here just isn’t true. On the basis that at least some are using climate change as the excuse for their desired socioeconomic system rather than as a rational analysis of the problem or even a reason for a specific response.

This is no doubt cynical of us but then as we’ve said before the only correct question in politics is “Am I being cynical enough?”

Just a little more proportional representation and we could have perfect government

King Log does appeal:

Government formation talks in the Netherlands have become the longest on record, 226 days after the 17 March elections delivered a fractured political landscape that made parties more reluctant than ever to compromise.

Dutch government coalitions often take months to form, but this year’s post-election talks have been especially drawn out. For months, parties failed to even move beyond the question of who would be allowed at the negotiation table.

If that proportional representation system could be tweaked just a little more then the negotiations could stretch out until the time of the next election. Perfection, no government could ever actually do anything.

The problem with that being that the aim of democracy is to be able to change who is in power. Without elections changing governments we end up with that permanent state of the bureaucracy, just below the politicians, in charge of everything, forever.

This is one of those problems to which there is no solution, just a series of increasingly - or decreasingly - attractive trade offs. Yes, we grasp the arguments that more PR provides ever greater refinement, granularity, to democratic representation. We also, as here, understand that at a certain level of such PR then an actual change in governance becomes near impossible. The very point of elections being to be able to have a change in governance.

The decision is where to be on the spectrum, elections that are truly representative of all opinion and elections that actually perform a useful function.

It's as if no one bothers to cross check the numbers

Aditya Chakrabortty tells us, in The Guardian, that the state has been permanently hollowed out by the rigours of austerity:

The basic message of today – the most significant in British policymaking this parliament, setting out the shape of the state and budgets for Whitehall departments for years to come – is that the Tories have now called off their decade-long austerity programme, but they will never reverse it. Beyond the NHS, huge swaths of the public realm are now permanently shrunken.

On the same day The Times tells us that:

Rishi Sunak claimed that the Conservatives are the “real party of public services” as he announced a budget yesterday in which government spending will rise to its highest sustained level since before Margaret Thatcher.

And:

The Office for Budget Responsibility (OBR) said that the overall tax burden would be at its highest level since Clement Attlee’s postwar Labour government of 1945-51 and spending at its highest level since the 1970s.

One of those two claims about the size of the state must be wrong. It being that of Mr. Chakrabortty which is so, of course. There has been some movement around of how much is spent upon which thing, that’s true, but then that’s a necessary process even within a rising budget in order to avoid running out of other peoples’ money.