A little point about the costs of renewables
The International Energy Authority says that the solution to not having enough power from renewables is to build more renewables:
Electricity prices and carbon emissions will keep rising unless more money is invested in renewables, the International Energy Agency has warned.
Well, yes, although we’re not sure how having more windmills produces more electricity when there’s still no wind.
However, snark aside, there is an important point here. One solution to the intermittency problem is said to be deliberately overbuilding. Say, sometimes solar only produces one third of rated power. Cloudy days say, or short winter daylight hours. So, overbuild by a factor of three.
We have seen this seriously suggested.
But here’s the problem. Rather the point of renewables is that near the entire cost is in the capital, construction. Once built the energy comes - near enough - for free. So, building 3x the renewables capacity means that the system costs 3x.
So, imagine that solar power costs £50 MWh just to use some number or other. That’s the cost of electricity from one set of panels. But if our system, in order to deal with cloudy days, requires 3x capacity then actually the cost is £150 MWh. No, we can’t use just the cost of the electricity we actually use at peak performance because all of the cost is in the building out of the system itself. Therefore all electricity from the system as a whole has to be priced at the cost of the system as a whole.
Marginal cost isn’t something that really works with a renewables system that is because there aren’t, to a useful level of accuracy, marginal costs as they’re all fixed. In this it is very like nuclear - once you’ve built and fed the reactor that’s pretty much all of the costs involved, actually operating the thing costs next to nothing.
Now of course benevolent and omniscient planners would have already incorporated this into all discussions of the system. Our problem here is that we just don’t feel lucky, today or any other day, about the omniscience nor even benevolence of those planning the energy system. Our proof being that if either were even vaguely true then we’d not be right where we are, would we?
The British Museum and NFTs - exactly why we use markets
We do understand, it is the job of the newspaper columnist to suck teeth over the way society is going. And yet there’s a significant point to be made about the British Museum and their issuance of NFTs:
The British Museum should think again on NFTs
We agree entirely, they - or it - should.
Institutions could come to regret joining the rush to cash in on collections by issuing digital art tokens
We think that entirely possible.
Leaving that debate aside, the two most likely outcomes are that NFTs soar in value, in which case those that sell them may face accusations having offloaded them on the cheap, or they crash in value, in which case sellers may face accusations for duping buyers. I will leave others to decide which of these two eventualities is more likely.
We’d not agree that those are the most likely outcomes and certainly not that they are the only likely two. But the essence of our point is in the word “likely”.
We all face uncertainty here. We cannot even calculate probabilities, we simply do not know. This is something new that might become a common feature of the future society - like the automobile - or some forgotten byway as with the Pet Rock. Shrug, absolutely no one has a clue.
Which is why we use markets of course. Changing tastes mean that what people wish done, umm, changes. Changing technology means that what can be done similarly changes. The societal task is to sort through those two sets of changes and see where they can meet. Among the things we can now newly do what is it that folk want done?
The entire point of the system is that anyone gets to do anything possible and then we see how it turns out. Most of the time it is Pet Rocks but sometimes it is that car, or new fangled permanent dyes from coal tar, or aspirin, or….or, well, all the things that make up our civilisation. They all did start with some nutter running wet down the street shouting Eureka!
Which is why we allow, encourage, even applaud, the attempts. Because we face uncertainty and can only find out by doing. The time for the rethink is after the having done and the collapse of that uncertainty down to “Ah, so, that’s what happens then”.
This is the entire and whole point of the use of markets in the face of changing technology - to find out what does and does not work.
I Spy With My Red Eye
With recent news of espionage in the heart of Her Majesty’s Most Loyal Opposition, we have a responsibility to bring the public to further attention of communist malfeasance in politics. Barry Gardiner’s willingness to accept Beijing bucks and take the Chinese Communist Party’s line from Hong Kong to climate change, should bring goosebumps to anyone proud of the West’s liberal institutions, respect for democracy, and protection of human rights.
The Chinese spy, Mrs Christine Lee, used charm, intelligence, and finances to leverage influence with a self-avowed “democratic socialist” until she was eventually outed as an agent of the United Front Work Department. This wing of the Chinese Party, and therefore of the Chinese State, operates a complex network of financially-backed agents to actively undermine Western institutions. Without a firm and aware stance from liberal institutions, our superior system of governance will soon be shunted aside - all due to fifth column manipulation from within.
Communist spying and manipulation is not just confined to today’s Labour Party. Giles Udy’s Labour And The Gulag: Russia and the Seduction of the British Left examines how the British Labour Party responded to the endemic genocide and terror regime of the USSR; frighteningly, he discovered that figures within the British left actively defended this horrifying system in the face of the more peaceable liberal democracies which sheltered them. Sound familiar?
Liberal internationalism is having a reckoning against the many-armed octopus of Beijing. In Australia, the Labor Home Affairs spokeswoman, Senator Kristina Keneally, proudly boasted of meetings with anti-Taiwanese agents of the United Front. Meanwhile, universities across the US, UK, and EU are awash with Chinese money through Confucius Institutes; academic free speech is curtailed and research bends from autonomy to instruction. During the early pandemic, United Front agents based in embassies around the world mobilised to deprive their host countries of PPE and Covid-supplies by exporting them to China, before Beijing leaked the news of an embryonic but devastatingly growing pandemic.
How can liberalism stand its ground against this malevolent force? Liz Truss’ leadership of the Foreign Office is an encouraging development. Truss has argued that the West, not just Britain, needs to stand firmly against Beijing. Aware of Communist espionage and threats in Europe, she has agreed security partnerships with a specifically anti-China bulwark across the world, including the Five Eyes security network.
Our own institutions require greater strengthening against bullying and espionage. Universities should take a more robust stance in response to pressure from Chinese authorities; the LSE received abuse from the Chinese state (and students on campus) after unveiling a work of art that displayed Taiwan as an independent country. Anti-Beijing students have also been harassed on campus by Workers Front agents across the Western World, which should prompt universities to further stand with democratic values against the dictatorial communist threat which is increasingly present in universities.
The Chinese espionage state should be actively confronted and curtailed across our institutions. Gone are the days of a Golden Age between liberal democracies and Chinese authoritarianism; a Muscular Liberalism is required, confronting anti-democratic and anti-Western values wherever they are present in our world.
Barry Gardiner’s disappointing receipt of Chinese manipulation will not be the end of the effrontery by Communist state action against the free world. Our liberal institutions must provide support to one another in order for the successful liberal world-order to survive a new era of skullduggery and cloak-and-dagger international affairs. Without such strength against a genocidal, imperialistic, and belligerent power, liberals can begin to write the epitaphs of our most successful civilisation yet.
In praise of Freecycle and Buy Nothing groups
One can see the waved - and clenched - fists, hear the whoops of joy, as the hippies and communalists get one over on us capitalists and free marketeers:
There are 7,000 Buy Nothing groups with more than 5 million members worldwide. But their appeal goes beyond the chance to swap everything from nettles to power tools
See? People freeing themselves from the confines of hyperconsumerism!
…but what distinguishes the Buy Nothing project from Freecycle, Freegle, Olio and their ilk is that the emphasis is less on stuff, per se, and more on community. In what Buy Nothing describes as its “hyperlocal gift economies”, users are encouraged to let items “simmer” rather than giving them away to the first person who asks, perhaps suggesting they share a joke or provide a story explaining why they would like the item.
This is Polanyi’s web of mutual community rather than the impersonal, monetised, transaction with a stranger.
However, it does need to be pointed out that this is entirely part of the plan, our plan.
Our aim in having an economy, a civilisation even, is in enabling folk to be as rich as they can be. As liberals we define that richness as being according to their own lights. Worth, value, these are always in the weighing of the consumer, no one else.
Some folk do value that recovery of something seemingly of no use to others. Some do value that communal feeling, that not transacting with someone a continent away. At which point, good for them.
We value global markets, capitalism even, simply because they are useful ways of producing that value that many do, umm, value. They are not reifications of some ideal, they’re simply useful tools. If value is created by not using those tools well, tant pis and so what? It’s the value creation which is the goal and who, really, cares how it is reached?
Or, more simply, by their own standards and evaluations people are being made richer through voluntary transactions. Why would we be against that?
Party? What party?
“Prime Minister, I fear the troops have become a little restive.”
“Yes, Humphrey, I had noticed. The question before us now is whether they will recognise that all great men have their peccadillos. I mean look at Lloyd George. Churchill never paid for his cigars and Kennedy was in cahoots with the mafia. They certainly can’t accuse me of that.”
“All true, Prime Minister, but don’t you think we should consider how to extract ourselves from the hole, if I may call it that, we ourselves have dug?”
“Well, you certainly got me out of a further investigation into the refurbishment of our Downing Street flat. Carrie was delighted. How did you get the Cabinet Secretary to stand aside so that you could exercise your charms with Kathryn Stone?”
“My relationship with the Parliamentary standards commissioner is purely professional. I simply reminded her that she’d found you guilty of misreporting your Christmas holiday in Mustique in 2019 and her conclusion was promptly overturned by her committee of MPs. I gently suggested that the same thing happening again would be a little unfortunate. No blandishments were required.”
“Good thinking, Humphrey. What do we do now?”
“I fear Sue Gray is more formidable mettle. As fine a civil servant as you will find; she is unalloyed.”
“Metal? Unalloyed? What are you talking about, Humphrey?”
“She understands that a good report should not be rushed. The substance of your excellent, if I may say so Prime Minister, statement to the House yesterday was that no one should rush to judgement. We should await Ms Gray’s report.”
“We appointed her on 17th December when my boss Simon Case recused himself from the parties investigation on the grounds that his department had been having some of their own. Then of course we were into the Christmas break and Ms Gray would have had to attend the gatherings that were all entirely legitimate this time around. So she could only start work this month.”
“Stop dithering, Humphrey. She’s only asking a few people whether they went to any parties they should not have attended. How long can that take? When can she publish?”
“Well, the draft will have to be reviewed by the Cabinet Office and then by our lawyers and you know how quick they are. And we may need to check it out with the European Court of Human Rights to ensure no one will be upset by her findings.”
“OK, so when?”
“Obviously this will have to be published at the beginning of a recess to ensure the MPs are on their hols. Easter is a good long break. Shall we target 31st March?”
“That’s excellent, Humphrey. With the local elections just coming up none of my backbenchers will be looking for trouble.”
“May I suggest, Prime Minister, that you spend a little time in the Commons’ tea room today? A few pats on the backs and intimations of promotion will work wonders.”
“What do you think of my argument that I thought the May 2020 gathering was a work meeting, not a party?”
“I don’t think it has had the credit it deserves. No one who knows you would believe you would stay only 25 minutes if you thought it was a party. Furthermore, staying as long as 25 minutes at a business meeting is both unusually long and shows dedication to duty.”
“Quite right, Humphrey, quite right.”
“But the real clincher is that the rosé came from Tesco. Standards have undoubtedly slipped, Prime Minister, since David Cameron’s time, but who could possibly believe that Tesco rosé, probably from some cheap cooperative favoured by M. Macron, could possibly be served at a Number 10 party.”
“You have to be right, Humphrey: that was no party; it was a business meeting.”
Just when we could be free
Brexit is, of course, a controversial subject. Something that should not be controversial about it is that food prices within the EU are higher than those outside it. On the grounds that the entire Common Agricultural Policy is designed to make this be so. With food the EU is a zollverein - yes, a seamless market inside but with high walls to keep the outside out there, outside.
At which point we get this:
But as an island nation outside of the Continental trading bloc, the UK is going to need domestic farmers more than ever, while the pandemic was a wake-up call to the importance of food production self-sufficiency.
The correct conclusion is of course entirely the opposite. We are now free of that zollverein. It is possible for us, as it wasn’t before, to tear down those tariff and quota barriers that locked us away from the global food markets. We can - if we so wish - enjoy the finest foods from the globally finest suppliers at our leisure. Being outside the bloc enables us to actually be an island trading nation that is.
Yes, we do grasp that there are other issues here, what about that second Range Rover for the barley baron and all that. But the idea that leaving the EU means we must grow more of our own food is an absurdity.
Don’t forget, we have actually done this before. We abolished the Corn Laws in 1846, threw the British food market open to those finest global suppliers. That’s actually when British living standards started to markedly improve after the Engels Pause. We know the idea and action works.
We’ll even concede that maybe this is something to be talked about. But as we do so we’ve got to get the facts straight in the conversation. Being outside the EU makes it easier to import more of our food. As this would lead to cheaper and better food that’s not an argument in favour of more self-sufficiency in food production, is it now?
Bernard Levin told us to beware the Single Issue Fanatics
Not that we intend to pose as experts upon diet but:
Analysis of the government-funded National Diet and Nutrition Survey revealed that 11 per cent of males aged 11 to 18, 54 per cent of females aged 11 to 18 and 27 per cent of females aged 19 to 64 consumed less than the minimum recommended level of iron. Only 2 per cent of males aged 19 to 64 consumed less than the minimum recommended level of iron. Red meat is a source of iron, though it is also found in beans and nuts.
Givens said iodine deficiency was particularly worrying in young women approaching child-bearing age because it was essential for foetal health.
He said milk was the biggest source of iodine for most people but relatively few plant-based milk alternatives were fortified with the mineral.
We do grasp that idea that many have, that meat - or dairy - contributes to climate change and so vegetarianism or even veganism is warranted. Or on moral grounds and so on and on.
The point we do want to make is that one that Bernard Levin made for so many decades, beware of the Single Issue Fanatics (SIFs). Life is complex, it’s a series of more or less difficult trade offs. There is no one single true and pure answer to most of the questions that afflict us.
Take this nutrition thing, what we suppose would be called micronutrients. The iron problem is one that’s well known and it’s even true that certain vegans are, because of their problems, prescribed liver to eat in order to boost their intake.
Lack of iodine in the diet leads to goitre, that itself potentially leading to cretinism - no, not the insult, the diagnosis - in children. The usual population wide cure for this is to add iodine to salt. But we have those Single Issue Fanatics demanding that our diet be cleansed of salt as well.
We have so many SIFs shouting about - and with power over unfortunately - our diets that we are, as noted above, seeing falls in population health in some areas.
Our point is that this is testable and thereby proven in this area of diet. But that SIFs problem applies to all things. We have those insisting that climate change simply must be dealt with however - at whatever cost to life, living standards, liberty or anything else. Or that fracking cannot be allowed because earth tremors. Or that inequality must be fought with every available weapon no matter what those costs to liberty and so on again.
Life’s complicated, it’s a series of trade offs and those who become Single Issue Fanatics need to be either dialled back into an acceptance of that or ignored.
Sorry Claudia, billionaires have the right to exist
At the heart of Claudia Webbe’s recent tweets, where she stated that ‘every UK billionaire should be brought before a Public Inquiry to be held accountable for their wealth’ lies the dangerous fallacy that creating wealth is a zero-sum game.
Claudia claims that ‘if you cannot afford to ensure the workers that make your goods are paid at least a living wage, your business model is based on exploitation.’ There are a lot of issues with this statement. Firstly, what constitutes a ‘living’ wage?
It is possible to live in a cave, without electricity or the delights of modern capitalism. Whilst humans did so for thousands of years and it would not be difficult to do so on minimum wage, I highly doubt Webbe would consider this ‘living’. All that is to say that what constitutes a ‘living’ wage is completely arbitrary.
More importantly, she is wrong in saying that business models that don’t live up to her standards of delivering a ‘livable’ wage are exploitative. Her tweets show that she arrived at this conclusion by judging how much ‘hard work’ workers put in. “Billionaires do not work harder than nurses,” she claims, then using this to justify her belief that billionaires do not deserve their wealth.
Though here’s the thing: under capitalism, you are not rewarded for how much ‘hard work’ you put in, you are rewarded, through others voluntarily trading with you, for how much value you create. Elon Musk did not work millions of times harder than nurses, but he did create a product that has transformed millions of lives whilst promising to reduce air pollution. On the other hand, I would ‘work hard’ by breaking rocks all day but that would create very little value.
That is not to say the work of nurses, doctors, and supermarket workers has no value. On the contrary, I am extremely grateful to live in a country where we do have access to excellent healthcare and education. But wages should always be set according to supply and demand and there is nothing wrong with doing so.
At their core, prices are information signals. Thomas Sowell, in his book Basic Economics, very clearly demonstrates the implications of attempting to fix prices artificially high or low through price controls and taxes: it always distorts the efficient allocation of resources, as we’ve seen with the recent energy price cap.
Furthermore, to offer a job cannot be ‘exploitation.’ You are not forced to work for any company so people only do so as it benefits them. If you choose you do not want to live by growing your own food directly, you can obtain it by creating value in other ways then trading. The same is true for healthcare, education, and everything else. There is nothing ‘exploitative’ about that.
A claim I hear over and over again is that billionaires shouldn’t exist and the state should redistribute their wealth because the marginal utility of an extra Pound is higher for those at the bottom than those at the top. When examined more closely, I do not think this argument holds up.
It’s important to understand that most of the wealth owned by billionaires is speculative and illiquid. It is composed mostly of shares and real estate whose value is constantly fluctuating, and it is difficult to capture this, hence why many countries including France have abandoned their wealth taxes. What do advocates of wealth taxes propose? Seizing these assets and selling them off? Transferring these shares to poorer people? This would merely result in corporations becoming more badly run and would be a massive disincentive to investment.
Furthemore billionaires don’t just hold their money in a vault (though if they do, it’s their right). Many will reinvest it into other businesses, furthering innovation and creating more wealth. In addition to the direct benefits and jobs that are created, the resulting innovation overwhelmingly helps the poor. The invention of domestic appliances, to take one example, freed up the leisure time of the poor then created plenty of activities with which to fill that free time. But investment takes time and it takes money, and nobody spends their own money more wisely than themselves. The critics of billionaires should focus on the end result, not ideology.
To say that the rich are rich because the poor are poor is as wrong as saying that the healthy are healthy because the unhealthy are unhealthy. It’s just not true. I suggest that in 2022, Webbe reads a little more David Ricardo and a little less Karl Marx.
So, how was the housing crisis solved then?
A rather good article by David Olusoga* contains this:
While the 1921 census is a record of a moment of unique trauma, it arrives in the public domain at another fraught and disorienting point in British history, making it impossible not to draw comparisons between then and now.
The nation of 1921, like that of 2022, was afflicted by a deep and socially corrosive housing crisis.
The 20s didn’t in fact solve that housing problem although there was much trying to do so. There were advances, a possibly apocryphal story has Bath City Council declaring that a working man needed a garden large enough to grow the family’s vegetables plus the room to keep a pig. It is true that there are council built houses on the south of Bath today built at that time with enjoyably large gardens and they’re highly desired as a result. This also something that wouldn’t be allowed today as a result of that putrid (no lesser description seems appropriate) insistence that 30 to 35 dwellings must be packed into each single hectare of land.
What did solve that housing crisis was the rampant free market boom of the 1930s. Which was, of course, the last time that it was possible to build houses people want to live in where people want to live. Since then - with that little interregnum of not much building being done at all - we’ve all been constrained by the planning system which insists, in its wisdom, on not being allowed to build housing people wish to live in where people wish to live. The end result being that Britain now produces the smallest new housing in Europe. Smaller than vastly poorer places as well as richer.
The thing that has changed in the Town and Country Planning Act 1947 and successors. Which all does indeed simply ban the building of housing that people would like to live in where people would like to live.
Fortunately this makes the crafting of a solution rather simple. Blow up the Town and Country Planning Act 1947 and successors.
You know it makes sense.
*Yes, we know, we know, wonders will never cease etc
Petitio principii in defence of the NHS
One of the CEOs of one part of the National Health Service tells us that:
These are the advantages of a single, taxpayer-funded, national system. A system with a proper national and regional infrastructure to support local trusts to work together to meet collective patient need, free from the requirement to maximise individual organisational profit.
Ah, no, that is petitio principii, or begging the question. Assuming what it is necessary to prove.
Health systems everywhere have dealt with covid these past couple of years. It is possible that the NHS, with its centralised, single, taxpayer-funded and no profit motive, system has done better than others which do not share those attributes. It is also possible that it has done worse.
In order to praise that NHS structure - even to assume that it has done better - it is necessary to show that it has done better than those other systems with those different attributes. At which point, well, has it?
No evidence of any kind is presented. It is merely assumed that because the NHS is wondrous therefore the superb performance may be asserted and no actual reference to reality is required. This isn’t the way to prove anything.
It is now very clear that the NHS and our social care system do not have sufficient capacity. That asking staff to work harder and harder to address that gap is simply not sustainable. That we need a long-term, fully funded, workforce plan to attract and retain the extra 1 million health and care staff the Health Foundation estimates will be needed by 2031.
As a result that also rather fails. But then that should be obvious enough too. An insistence upon decade long plans to near double the workforce and also gain lots, lots, more money isn’t that innovative plan we’re all looking for to make even better what is already being assumed is the finest health care service in the world.
Chris Hopson is chief executive of NHS Providers
We’d also put forward the idea that management capable of such logical errors - and swathes of near mindless corporatespeak at the same time - might be one of the problems we all have with the NHS.