Isn't the world becoming a better, cleaner, place?

From The Guardian:

It’s an encouraging start to 2022. In an informal census – or perhaps a sort of watery award ceremony – the Wildlife Trusts’ marine review of 2021 has pointed to humpback whales off the north-east coast of Scotland and England, increasing numbers of seal pups being born, and seahorses in protected beds of eel grass off the Dorset coast.

As has been noted, London’s air is now cleaner than it has been since 1306 and that first delivery of sea coal from Newcastle.

Or, the environmental Kuznets curve is a real thing. As Maslow’s Pyramid points out humans have an hierarchy of needs and desires. Full bellies come first, then shelter, clothing and on. It’s only when baser desires are sated that attention turns to other desirables. Like, say, being able to breathe without coughing, or gawping in delight at nature’s wonders.

The implication of which is that the richer a society becomes the cleaner it will be, the more nature it will leave room for. Just because that’s something that folk will spend some increasing part of their greater income upon. Which is true from even a cursory glance at the world around us. A useful proof, is one is required beyond this theoretical observation, is to try sucking in a lungful of air in Dhaka, New Delhi, London or Tokyo.

This is not just trite though, it needs to inform through into policy. If richer people have cleaner environments and we desire a cleaner global environment then we need to make all people richer. That is, the environmental movements’ calls for less economic growth are entirely the wrong answer.

Interesting what a little observation plus knowledge of how humans actually work can lead to, isn’t it?

We spy that cakeism the Prime Minister is so fond of

If we are to avoid the problem of trivial earthshakes from fracking (‘quakes is far too strong a word) and also to have our energy domestically produced we’ve got to put the windmills and the solar panels somewhere:

Countryside campaigners have warned that swathes of rural southern England face being ruined by “massive industrialisation” if plans for one of the country’s largest solar farms are given the go-ahead.

The approval of plans for a large solar power plant in Oxfordshire has sparked fears of a “tidal wave of solar farms” despoiling rural areas.

There are now proposals for another four huge solar farms covering between 160 to 340 acres each, close to the Chiltern Area Of Outstanding Beauty and the north part the Oxford Green Belt.

We have been known to recommend the blowing up of the Town and Country Planning Act 1947 and successors but this idea that building cannot happen even close to the protected areas, let alone in them, is extreme in the other direction.

The point that caught our eye though is this:

The CPRE argues that solar farms should be built on brownfield sites and not in open countryside.

Definitely cakeism, the wanting to have it and also eat it.

For the CPRE also argues that if we continue to stuff the British into the smallest new housing in Europe then we’ve, just about, enough brownfield land to stick the rabbit hutches on. Only very minor amounts - but even so still some - of greenfield land will need to be used to provide such shelter. All of which will be far away from the window views of any CPRE bigwigs which is the point of the objections.

But if those brownfield sites now have to be used for the solar cells then where are the houseless proles to be stocked? Don’t ask the CPRE for as long as it’s far away from those countryside views they’re not worried.

The essential truth here is that if we are to move to an energy provision system that makes extensive use of land - which renewables do - then we’ve got to use more land than we did in the previous, land-light system. As population isn’t going down then that means more land must be brought into housing/industrial use. There simply isn’t enough brownfield land to do both, land hungry energy supply and also house the population in shelter fit for helots let alone heroes.

Make a decision people. One way or the other for you cannot have it all - that’s cakeism.

Stop making laws about it, abruti

There is little we can do here except shake our heads in wonder at the fools just across the Channel. This goes beyond goofy and is accelerating through half-wittedness:

A law banning plastic packaging for large numbers of fruits and vegetables comes into force in France on New Year’s Day, to end what the government has called the “aberration” of overwrapped carrots, apples and bananas, as environmental campaigners and exasperated shoppers urge other countries to do the same.

Emmanuel Macron has called the ban on plastic packaging of fresh produce “a real revolution” and said France was taking the lead globally with its law to gradually phase out all single-use plastics by 2040.

This does, specifically, include cucumbers. Which is something of a problem.

One hand of the argument is that the use of plastic is, by modern mores, evil. So, there’s that of course.

The other hand is that such plastic sleeves prolong the life of a cucumber which is why they’re used. As Morrisons, who actually do such sheathing, point out:

In actual fact, a cucumber has a “best before” life of 3 days – which film can increase almost 5 times over, to 14 days. This is because a cucumber is 96% water, which it begins to lose as soon as it is picked. After 3 days, it has lost so much water that it becomes dull, limp and unsellable. Wrapping it in just 1.5 grammes of plastic film extends its quality dramatically .

Ah. We are in the standard space of life where there’s not actually a solution there’s merely that set of trade offs. Limp cucumbers that are thrown away or firm and long lasting but using plastic. That plastic working as the sildenafil rather than merely the sheath perhaps.

There is no “right” answer as to whether the plastic wrapping should be used or not, it depends upon whether one is trying to save plastic wastage or cucumber wastage.

Except we have the third and gripping hand of our argument. Which is, well, what’s it all about then? This idea of having an economy, a civilisation, the aim is that just ordinary folks have more of what they want. By definition this is making them richer. We can also note that what folks want varies. A system which allows variance will therefore be able to provide more of those folks with more of the varied things they desire to have - variance allows increased richness that is.

At which point the not just silliness but stupidity of laws on the subject become apparent. Some will value the lower food waste costs of sheathed cucumbers. Other will feel righteous for not having wasted 1.5 grammes of dead dinosaur as they throw away that dried husk of cucumer sativus.

Human utility is maximised by allowing producers to vary their practices to meet the varied desires of their consumers. Rather, really, the point of a market economy in fact.

If only French officialdom had a phrase with the meaning of chacun à son goût to hand, or something even approximating it.

This isn't an entirely new observation

That conflict between political visions and actual economics:

What if monetarists are right and German headline inflation - currently at a euro-era high of 6pc - proves stubbornly persistent?

Germany faced this level of inflation during the Reunification boom of the early 1990s. The Bundesbank crushed it by raising rates 500 basis points to 8.75pc, and in the process blasted sterling out of the Exchange Rate Mechanism, with potent political consequences for Britain’s relations with Europe.

This time the ECB is persisting with negative rates even as Germany hits full employment and full capacity, and even as the ECB’s own staff union demands a 5pc pay rise.

The central bank is continuing to soak up eurozone budget deficits with QE bond purchases on a vast scale, essentially shielding a string of insolvent Club Med states from market forces under scarcely-disguised “fiscal dominance”.

Leave aside all of the details here - exclude even Germany, Brexit, the Olive Line and all that from your thoughts. Observe instead that we have a clash here.

There’s a political idea - again, what exactly it is isn’t the point - which says that Europe should be united like a country, countries have the one currency, there should therefore be the euro.

There’s the economic reality which is that Europe isn’t an optimal currency area. Note that “optimal” here already means taking into account ease of trade in one currency, as against the problems of one monetary policy for disparate economies etc.

That clash produced that bouncing of Britain out of the ERM. Germany needed, and got, different monetary conditions than the UK so the FX peg could not be held. Later, Germany needed laxer conditions than some of the periphery countries needed - thus Ireland and Spain’s property booms. Then again conditions differed and Greece needed - and, and, and.

Just to emphasise again. This is not about the political dreams themselves, whether that united Europe is a good idea or not. Clearly, we have views but that’s not what we’re on about here.

Rather, there’s a clear attempt to impose a political dream upon reality. Further, it’s not really working. Working in the sense that the economy can do its job of making the average person better off over time. That hasn’t been true of Italy for three decades now, just as an example.

Which brings us to the point we do want to make. There are many political dreams out there. There is also economic reality. In a clash between the two it’s the economics that wins out - as reality always does against dreams.

Which is what our recommendation for the New Year would be. Try to make sure that your political dreams are in fact things that accord with that economic reality.

Just one of those little things that confuses

Yes, OK, EV revolution, save the planet, blah blah. And yet:

Yet there are 25 gigafactories planned for the continent by 2030, according to BMI, as the industry races to keep up with soaring demand for electric cars. Nine of those are owned by Asian manufacturers, which control most of the global supply.

The UK is arguably further behind the rest of Europe, with plans for only two gigafactories.

It’s this idea that if you don’t, in fact, make it yourself then you’re behind.

We have checked behind the sofas and all that and we here at the ASI seem to be remarkably short of steel making capacity. And yet we’ve never faced an inability to find some steel when we’ve wanted some. Seem to be shops all over the country piled high with the stuff in fact. Barring the possible odd tree at Kew the entire UK is desperately short of banana production capacity and yet unlike any socialist economy ever there seems to be a reasonable supply in every supermarket in the land.

So with batteries. There is no reason that they must be locally made. We are not in League of Gentlemen here, where we require local things only for local people.

In short, haven’t these people ever heard of trade? We’ll do what we’re least bad at, everyone else does the same, swap the resultant production and we’re all as well off as we can be? Adam Smith published 245 years ago, David Ricardo 204, isn’t that enough time for the lessons to sink in?

Division and specialisation of labour, comparative advantage - trade. Seems simple enough to us but clearly it entirely blindsides all too many others.

This is before we get to the narrower point that if other folk are building 25 factories then that sounds like a really good business not to be in for ourselves. Investment manias leading to overcapacity - tulips through railways to dotcom and banking - are a real thing. So are the resultant bankruptcies.

This is entirely vile from The Guardian

It’s difficult for us to constrain our anger at this suggestion:

An alternative African strategy would see governments spending on public services and on increasing food and renewable energy sovereignty, while cracking down on corruption.

This provides a way out of the current development trap. In their book Africa’s Last Colonial Currency, Fanny Pigeaud and Ndongo Samba Sylla suggest that, instead of importing food and burning through foreign reserves, African states should produce food at home, as land, work and knowhow are abundant. “If they financed the development of their agriculture, they wouldn’t reduce their foreign exchange reserves; on the contrary, they would save money.”

State-owned enterprises and a competitive domestic private sector would help Africa evade activities demanded by the global north. As African countries become increasingly digital, data will be power in economic governance – and local entities must be its custodian, not transnational corporations. Trade agreements between countries of similar income levels are more beneficial for them compared with the World Trade Organization’s framework.

This is just the old idiocy dressed up in new clothes.

This used to be what was recommended for all of what was then called the “Third World”. Don’t trade with the richer capitalist places, aim for autarkic development. It didn’t work. Then we tried it the other way around, that global neoliberalism. Which worked, astonishingly well. This past 40 years has seen the greatest reduction in absolute poverty in the history of our species.

Now, when we’ve the one more heave to go - that absolute poverty is largely still concentrated in Africa - the argument is that we must abandon what provably works and return to the policy failures of the past.

Just how racist is The Guardian against black Africans? That they must be condemned to longer and deeper poverty to conform to fashionable metropolitan ideas?

It’s simply vile to be insisting on the policies that have been tried, have been seen to fail, once and yet again. How dare they?

So, £20 billion seems to be the cost of current energy policy then

That combination of the price cap - a ludicrous idea - plus no fracking and the dash for renewables seems to have caused a £20 billion cost:

Energy bills could treble unless the Government sets up a £20bn fund to help companies spread out the cost of soaring global gas prices, ministers were warned on Monday.

That idea of the government setting up a fund to pay that bill - spreading it over all taxpayers - doesn’t decrease the cost of the policy mess of course.

In fact, it would increase it. If people were facing higher costs for their energy consumption - absent the price cap - then they’d reduce their energy consumption making the cost lower.

Ministers are under growing pressure to protect households from soaring energy costs as they face the threat of their bills doubling in a year.

It’s not possible to protect households from that cost. There’s only us 65 million folk here to pay the bills. We can indeed pay through the tax system, or out of pocket, but that cost is going to fall on the 65 million of us whatever anyone does.

We would insist that this should all be visible through those bills. If wholesale prices have risen then so too retail. Because that’s the way for us all to see the costs of those decisions that have been made about the energy system. Who knows, we might even disagree about that policy or those policies. You know, when being up front and in our faces fully informed?

The universe really does throw costs at us and while it’s possible for governments to make those costs higher just shifting who pays for them doesn’t lower them. One of those advantages of actually free markets being that we find out, plainly, how much the fashions of those who govern cost us. To the point that we might even disagree about going along with the latest fad.

Amazingly, we don't believe Christian Aid about climate change damages here

We’re entirely happy to specify that if climate change is happening then there will be damages from climate change happening. Even, that if the process is getting worse then so will the damages. However, we don’t think that excuses this tosh from Christian Aid:

The 10 most expensive weather disasters this year caused more than $170bn in damage, $20bn more than in 2020, a British aid group has found.

Christian Aid said the upward trend reflects the effects of manmade climate change and added that the 10 disasters in question also killed at least 1,075 people and displaced 1.3 million.

Each year, the aid group calculates the cost of weather incidents like flooding, fires and heatwaves according to insurance claims. In 2020, it found the world’s 10 costliest weather disasters caused $150bn in damage, making this year’s total an increase of 13%.

Weather disasters, well, yes. The big thing in climate change research is, well, where are all those super-storms? No, really, significant work is going on try to explain why those predicted aren’t arriving in the numbers predicted.

We might also use those super-sekkret insights available to us from economics. The first of those being that they’re measuring insured losses. Insurance being a luxury, or superior, good. Richer societies devote more of their total income to insurance that is - the peace of mind being something that folks buy more of as the daily grind of finding three squares becomes less of a task.

Economic growth in 2021 has been substantial.

We might also want to add in inflation - if we’re talking about the US we could peg that at 6% or so, which is a substantial fraction of that claimed 13% rise, isn’t it?

We might even go further. The damage from such storms is largely to property, property largely being the thing that is insured too. US house prices have risen 16% of this past year. That is, if there were exactly the same US housing stock, facing exactly the same weather damage, at the recorded price change, we’ve already explained more than Christian Aid’s climate change related increase in damages.

Of course, we can’t add together rising house prices and also GDP and also inflation and also the luxury nature of insurance because that’s counting inflation at least twice and possibly more. But it is entirely possible to say that those features alone more than cover that 13% rise in insured damages. For Christian Aid hasn’t accounted for inflation or any of those others even once.

We’d also like to complain about this practice of pushing out the press release - which is why it’s in the newspapers - without releasing the actual report so that it can be checked.

We’re absolutely delighted to discuss climate change, what we should be doing about it and all that. But even the dangers of that dread event don’t excuse this total tripe that Christian Aid is trying to ladle onto our plates. Measuring insured damages without correcting for inflation, nominal values of assets, GDP growth and the very nature of insurance itself simply isn’t good enough. This gets a ”Grade F. See me after class”.

If only Will Hutton were able to make the necessary logical leap here

Will Hutton tells us that neoliberalism - capitalism and markets - is terrible, no good, horrible, because self-interest. And he then divines the truth of human nature:

On the other hand, are the “we firsts”. They are equally passionate in their insistence that salvation lies in the group and society and convinced, whether on the climate emergency, hi-tech monopolies, crippling uncertainties about living standards or just the evident truth that we humans are altruists as much as individualists, that to follow the “me firsts” is the road to perdition. What is crucial to us as social beings is the group, society, the commonweal and belonging as equals. After all, it was associating in groups that was fundamental to our evolutionary capacity to hunt and to see off predators. That primeval urge to associate in the group is what underpins happiness and wellbeing. What people want is less the exercise of choice in markets, more to control their lives in the service of what they value – and that is best done collectively and, as far as possible, equitably.

The logical leap Hutton fails to make is that yes, that is indeed that human nature. We are a cooperating species, working in groups. That’s what makes neoliberalism - capitalism and markets - work. That’s what capitalism and markets are, people cooperating with each other. Exxon is 100,000 people cooperating to bring us fossil fuels. Amazon is a million people cooperating the heck out of each other to bring us speedy tchotchke. The whole system works precisely because humans do cooperate with each other. A transaction is exactly that cooperation, competition is merely the choice of who to cooperate with.

Neoliberalism being - that globalised version of capitalism and markets - the apposite socioeconomic structure for our species precisely because we are a cooperating one.

It’s also worth pointing out that if Will Hutton were to truly believe his own rhetoric there then he’d have to conclude that we need fewer Will Huttons telling us all what to do. For as that we first species we’d already be cooperating, wouldn’t we? As, indeed, we do.

We really shouldn't be taxing companies at all

Current political philosophy is that companies should be taxed and then given tax breaks on things that politicians would like companies to do. This makes sense to politicians. A better suggestion might well be just not to tax corporates in the first place.

There exists a large set of well-identified studies demonstrating that targeted R&D tax policies – such as R&D tax credits, deduction possibilities or subsidies – indeed increase firms’ R&D activities

Tax something, you get less of it. Tax privilege something you get more of it. This is not a great surprise. But now comes the next question:

In contrast to this large literature, little is known about the possible disincentive effects of general profit taxes, which – unlike R&D tax credits – are in place in almost every country. From a theoretical perspective, general profit taxes should have sizeable disincentive effects on innovative activity, as higher taxes reduce the after-tax returns on investment. Due to differences in deduction possibilities, this is particularly true when investments are financed via equity rather than debt – which frequently applies to R&D projects because investments carry high risks and lack collateral.

The answer is yes. So, logically, the thing to do is not to tax corporations in order to increase the amount of R&D that is done.

Politicians won’t like this because it would lessen their power over what sort of R&D gets done. Taxing then privileging does direct, of course, to be able to direct is power and why does anyone go into politics if not for power?

Which is exactly why the rest of us should like the idea of not taxing corporations of course.