This week’s prize for obdurate stupidity goes to….
And it’s only Monday as we write:
Campaigners have urged the chancellor to start taxing jet fuel – with a report showing that charging duty at the same rate paid by motorists would raise up to £6bn a year for the public finances.
An analysis by the thinktank Transport & Environment (T&E) UK said introducing a “fair” equivalent to the fuel duty paid in other sectors could raise between £400m and £5.9bn a year, based on the 11m tonnes of kerosene consumed by planes taking off from the UK in 2023.
It’s entirely true that jet fuel is not directly taxed. But we do have Air Passenger Duty:
Air Passenger Duty, a duty unique to the UK, was introduced in 1994 by the then chancellor of the Exchequer, Kenneth Clarke. Clarke regarded it as anomalous that fuel duty was not levied on air transport, but international agreements prevented his levying a duty on aircraft kerosene. As an alternative, Clarke introduced Air Passenger Duty, a levy collected by airlines on passengers who start their journeys at UK airports.
As with skinning cats in the Mid West there are many ways to tax something. APD is the method we use to tax jet fuel. Annual collection is heading toward £4 billion.
In the paper from the not thinking very much tank, Transport and Environment (UK), there is no mention of Air Passenger Duty. Not one.
Yes, today’s only Tuesday, we’ve only had Monday’s examples to consider for nominations for this week’s prize so far but we are going to have to award that prize for obdurate stupidity to T&E (UK) we’re afraid. For we really do think it most unlikely that anyone’s going to beat this in only 6 days.
No, please, do not take this as the start of an hold my beer challenge. We are indeed pretty robust but there is still only so much we can take.
Tim Worstall
Live by the meme, die by the meme
We do think this is a bit rich from The Observer:
Trump’s fantasy that migrants are eating cats proves the meme has prevailed over real politics
Signs and symbols are increasingly being wielded by politicians around the world in place of reasoned debate about serious issues
Politics isn’t about reasoned debate over serious issues, it’s about memes. At least one of us has done this for a real political party in an election cycle. Politics isn’t about reality, it’s about what people believe.
Memes about those foreigns barbecuing cats are something we’re not going to comment upon - only to say that if that’s what people believe is happening then that’s what people believe. Politics is about those beliefs.
We have our own more recent example domestically. Until just a few weeks back it was an absolute truth of British politics that there had been “austerity”. The Tory B’stards had deliberately and with malice aforethought slashed away at government. Those of us who pointed out that, acshully, real spending, nominal spending, spending as a proportion of GDP, had - absent the fall back from the pandemic and financial crisis highs - risen over the years were pooh-poohed as spouting nonsense. Yet we were right. As the current mumblings from the current government are showing. There are “black holes” in the government accounts, too much has been spent and not enough taxed. Despite taxation being the highest, as a proportion of everything, since the War. Thus these “difficult decisions” that must be taken.
The proof that there was no austerity being that we’re now told there is no unspent pot of money, no austerity that can be reversed.
But the meme won. That’s the way politics works. It is not about reality, it’s about what people believe.
Say, you know, that underfunding of the NHS. We’ve seen people insisting that NHS got under inflation funding over the years of the Tory B’Stards. There’s not a year since the early 1950s when the NHS has had a less than inflation funding round. It’s beliefs, not facts, that matter. True, there are those who insist the NHS just always requires more than mere general inflation - but that’s proof of a problem with the NHS, nothing else.
Of course, memes do end up, eventually, being confronted with reality. Which is what makes those incorrect beliefs so dangerous. We end up committed to a plan based upon beliefs and then those ugly facts rear their heads.
As long as everyone grasps this politics will carry on as it has for centuries. An inefficient and largely useless way of running things but with that saving grace of allowing a change of power at the top without a bloody revolution. The true danger is those politicians who believe their own memes. Like this idea that the British grid and energy production system is going to be net zero in only 4.25 years. Two decades back that was a useful enough meme to get loins girded for the task*. Here’s reality knocking on the door now and it’s simply not going to work. Having a politician in charge who actually believes the meme, now that’s dangerous.
Politics concerns beliefs about reality, not reality itself. Which is why memes work and also why they’re dangerous.
Tim Worstall
*Note we don’t say correct, or righteous, but as a piece of propaganda it works
It’s successful! Quick, regulate it!
It is entirely true that certain forms of economic power do need to be regulated. It’s also true that there are those who would insist that anything, everything, must be regulated. This is one of those second:
But regulators do too, because they know from experience how monopolies engage in illegal anti-competitive behavior that squashes competitors and manipulates the market to expand their dominance. The US Department of Justice (as well as other competition authorities and tech observers) suspects Nvidia has used such tactics to entrench its chips monopoly, and last month it was reported that the Department of Justice was opening an antitrust investigation. It’s high time.
No one has the slightest idea how this is all going to work out. Let alone the regulators - so what are they going to do in their regulation then? Other than piddle about, waste everyones’ time and collect fat cheques for doing so?
And there’s another reason to be wary of a hyper-concentrated chip market: AI regulation, be it the EU’s AI Act or the White House executive order on AI, is emerging slowly, putting Nvidia – which gets to decide who gets chips for what – in a quasi-regulatory role. That’s not the way things should work; regulatory policy is a public function, and a for-profit company should not be allowed, through its sheer size, to fill the vacuum. But Nvidia likes it this way, and has stepped up lobbying to try to maintain its de facto control of global AI.
Tsk, cannot have that at all. Industry participants taking the place of bureaucrats? Heavens to Betsy isn’t that a violation of all that is Good and Holy?
It is possible to give a little pencil sketch of how this is going to work out. The whole point of GPUs is that they do graphics - that’s what the G is, graphics - better than general purpose CPUs. The hint is in the name. However, the how they do it is by being better at floating point operations. OK. Which means that we can look at another area of the chip industry for a guide.
Crypto mining depencds upon those floating point operations as well. Which is why mining crypto quickly moved off general purpose CPUs and into graphics chips. That was the first boom that Nvidia enjoyed in fact. But that boom ended. Because specialisation is good. So therefore people designed chips that specialised in the specific processes that mined crypto, not chips that were just good at floating point. What are known as ASICs. Which now have the crypto market and Nvidia pretty much doesn’t get a look in these days.
As sure as eggs is eggs this will happen again. Because specialisation is good. The why should be obvious enough - currently Nvidia gets to charge truly massive prices for what is essentially processed sand. Every capitalist - and VC more importantly - worth their greed is thus throwing money at those who think they might have an idea about ASICs for AI. Design some of those, send the designs to TSMC and the job’s a good ‘un.
The cure, you see, for high prices being high prices.
The most important part here being that this is going to happen faster than any bureaucracy can swing into action. Or even, faster than any bureaucracy can expensively swing into action.
It is entirely true that certain monopolies need to be regulated. Sure it is. It’s even true that certain technical monopolies do. But one that is under attack from the world’s largest concentration of bright people - Silicon Valley - and faces the world’s largest concentration of risk loving capital - Silicon Valley - through a specialisation cycle well understood by Silicon Valley probably isn’t one of those technical monopolies that requires regulation.
Well, not unless you belong to the regulatory school of if it moves regulate it.
Tim Worstall
Hayek warned us that we’d all end up serfs to the NHS
The warning, in Road to Serfdom, was not that the existence of a health care service would turn us all into slaves. Nor that a government, or tax, financed health care service would revive serfdom. Rather, that direct government provision of health care would lead to us, the populace, being managed to benefit the health care service. Rather than the NHS taking care of us we would be managed so as to take care of the NHS.
We all do recall being told to stay at home to save the NHS, yes?
Sir Keir Starmer is preparing a raft of “nanny state” interventions on public health as he scrambles to save the NHS from collapse.
The Government promised a “prevention revolution” on Thursday – saying measures would be bold, controversial and not universally popular.
Ministers announced plans to introduce a 9pm watershed on junk food advertising – and a total ban on paid-for online ads – by October next year. Sir Keir has also promised a string of further measures as part of efforts to move “from sickness to prevention” of ill-health.
A ban on energy drinks for children under 16 is expected to be introduced to Parliament next month, with supervised tooth-brushing rolled out for pre-school children later this year.
We are indeed being Nanny-stated for the benefit of that direct government provision of healthcare, the National Health Service.
This is getting pretty extreme too:
Honesty about death is long overdue, as are frank conversations about the tendency to keep very infirm people alive a bit longer with more interventions, instead of allowing them to die more comfortably at home.
One, possibly harsh, way to read that is that Polly thinks Granny should die earlier to save the NHS.
As Chris Snowdon has pointed out:
Starmer is not going to reform the NHS. He is going to try to reform the public.
Well, yes. The Road to Serfdom came out in 1944. A prescient warning, obviously. We would though remind of something about Brecht’s of 9 years later:
Would it not in that case
Be simpler for the government
To dissolve the people
And elect another?
That was satire, criticism, not a plan for action.
We can’t help feeling that paying attention to the warning rather than enacting the satire would be a better government plan.
Tim Worstall
If we desire investment then why does everyone want to tax pensions?
A fairly standard analysis of the UK economy at present is that we don’t have enough investment going on. Therefore we desire to have more investment, an obvious outcome from that analysis. The usual claim is also that we desire patient, long term, investment.
Private pensions are a £7, perhas £8 trillion, pot of such long term investment. That’s a very large pot of such investment too - getting on for three times the size of GDP, the annual economic output of the country as a whole.
Well, OK. But everyone seems to be competing to see how much more pensions can be taxed. It’s becoming a general sport. But taxing something simply always does lead to less of it. So, we tax pensions more heavily than we do now and people will save less into their pensions - so there will be less long term and patient capital around that can be invested into solving the base British economic problem.
This strikes us as being illogical. So, why then? What is the logic behind this seeming illogic?
It’s because they’ve already run out of everyone elses’ money, isn’t it.
That is, we didn’t in fact get rid of the socialists but perhaps we ought to?
Tim Worstall
An entire country making the Naomi Klein mistake. Sigh.
We’ve been making fun of Naomi Klein’s ignorance of trade for well over a decade now. For she claimed, in one of her books, that banning cheap solar panels from a country aids the fight against climate change by making solar panels more expensive.
Yes, aids.
But how we’ve an entire country going down that path to madness:
The Biden administration touts solar energy as one of its big success stories, a booming new industry that is curbing the effects of the climate crisis and creating high-paying jobs across the country. But the more complicated truth is that the United States is mired in a long-running trade war with China, which is flooding the market with artificially cheap solar panels that carry an uncomfortably large carbon footprint and threaten to obliterate the domestic industry.
At which point they’re adding tariffs to stop those dastardly Chinese sending cheap solar kit which will aid in the fight against climate change. Abject nonsense, obviously. Either we want cheap solar so as to beat climate change or we don’t. If we don’t then no subsidies, no push, no regulations are required. If we do then getting them from anyone sellin’ ‘em cheap is a great idea. And that’s all there is.
As to why there’s this problem it’s because people simply don’t understand trade. Yes, it’s true, comparative advantage is indeed the only theory in the social sciences that is not trivial or obvious. But even then we’d hope for a better understanding of it than this:
“Chinese companies don’t have any comparative advantage, only artificial advantages. They rely on government subsidies, and on lack of enforcement of labor and environmental laws.”
That’s not comparative advantage in the slightest. That’s absolute advantage. Comparative means what is, given those advantages, China least bad at doing? Absolute is that those advantages mean that China is better than US companies at solar panels.
Sigh.
Either climate change is some vast problem that we need to subsidise our way out of - in which cheap solar from anyone at all is just what we want - or it isn’t and therefore no subsidy from anyone is desirable. Insisting it’s a very big problem that needs hundreds of billions in subsidy but that we must reject the cheap kit someone’s knocking on the door with is to be, well, it’s to be Naomi Klein. That way madness lies.
Tim Worstall
Yes, this is the problem with the Green Belt
Geoffrey Lean is one of those we can and should use as the butt end of our policy compass. The latest proof being this:
Yet the green belt – originating with the Attlee government – has been astonishingly successful. In 1940, London and Los Angeles had similar greater urban areas. Since then, Los Angeles’ sprawl, without any green-belt protection, has covered an area equivalent to reaching from Brighton to Cambridge.
That is not the proof of success, that is the proof of failure. The Green Belt exists because the British haute bourgeoisie saw the success of the pre- 1940s free market in planning permissions. Things like Metroland, the building of housing the British wished to live in where Britons wished to live. This was, obviously, not to be put up with. How dare anyone come to live where said haute bourgeoisie had their views of rolling Home County acres? Have to put a stop to that, eh?
So they did. The Town and Country Planning Act 1947 and successors. Which, as we say, should be blown up, proper blown up - kablooie.
On the grounds that the law, political policy, should not be used to preference the desires of the haute bourgeoisie. We’re a democracy now, recall? Time to stop putting the proles into urban rabbit hutch slums and get back to building homes for Britons.
Kablooie, it’s the only way to be sure.
Tim Worstall
Allow us to explain: The planners have been trying to plan
We do actually have a great big, 1200 page, report on what we should do about climate change:
Why ‘the UK’s biggest carbon emitter’ receives billions in green subsidies
The Drax power plant burns 7m tonnes of biomass pellets a year and generates 4% of the UK’s electricity needs
The why is that the planners decided to try planning. As that 1200 page Stern Review says not to do.
For planners always will get it wrong. Partly because just planning. Partly because the economy is complex therefore any plan will end up more than a bit Heath Robinson. Partly because those being planned will react to the plans and drive coach and horses through the jury-rigged nonsense.
Which is why the Stern suggestions are to keep it simple, stupid. Have the one, grand, intervention into prices and leave the market be to sort it all out. The big point being that this is efficient. Efficiency matters too. For humans do less of things that are more expensive and more of those that are cheaper. Therefore if we adopt the efficient - not the expensive - method of dealing with climate change we will, wholly naturally, do more dealing with climate change.
This isn’t difficult even though it clearly does not accord with political beliefs about the ability of politicians and plans. But there we are.
The reason the country’s largest emitter gets subsidised is that political egos were large enough to think that planning was the solution.
Tim Worstall
It’s market competition that raises the workers’ wages
As Karl Marx so rightly pointed out it’s competition that raises the workers’ wages. That’s why monopoly capitalism - by which he meant our new word, monopsony, or a single buyer - that keeps the workers poor.
Saudi Arabia’s new luxury airline Riyadh Air is fuelling a war for talent in the aviation industry as it poaches British pilots.
The British Airline Pilots’ Association (Balpa) said the impact of a recruitment drive by Riyadh Air, together with Emirates, Qatar Airways and Etihad, was being felt at carriers including British Airways, Virgin Atlantic and easyJet.
Large numbers of pilots retired during Covid, forcing airlines worldwide into a battle to retain captains and first officers.
Amy Leversidge, the Balpa general secretary, told The Telegraph that wealthy Gulf carriers were making it harder for British carriers to retain staff by offering generous salaries and benefits.
Capitalists can make money by employing workers. Or, in the airline industry, capitalists think they can do so. That there are many who so think means that there are many possible buyers of the labour of those workers. Therefore the price paid to the workers goes up. So does capitalist competition for labour drive up wages.
The only time this doesn’t happen is when there’s the single and one buyer of that labour. In that case the capitalist doesn’t have to raise wages for the labour dhe’s then going to exploit. As happened in the Soviet Union of course, Stalin deliberately suppressed wages in order to fatten profit margins so as to pay for his industrialisation projects.
That is, it’s only in market economies that wages track increases in labour productivity. Given the fashion for believing Marx we do think it would be helpful if more paid attention to one of the very few bits he got right.
Tim Worstall
We fully support the citizen testing of the waters
This sounds like an excellent idea to us:
‘Citizen scientists’ to check UK rivers for sewage and pollution
Big River Watch scheme asks general public to help monitor state of rivers after years of deregulation
Not that there’s been any deregulation of course. But still, Burke’s little platoons going out and doing it for themselves, of ccourse we support such. Who wants to have to try and fight through whatever a bureaucracy might tell us when pure and clear information can be gathered by the populace?
We have just the one small concern.
British waterways, pollution in England, around the UK, rivers in England, England and Wales, targets and milestones to phase out spills of human waste into rivers and seas
There seems to be a little variance there about whether this is UK or England or England and Wales and so on. Which we take to be - as the cool kids say these days - problematic.
For the grand question in water politics these days is over the State running the water system or private companies. Which means that we want to see the difference between the private and capitalist companies in England, the social company in Wales, the state companies in Scotland and Northern Ireland. That’s exactly - for of course it is - the information we don’t get from the official, bureaucratic, figures. Near all of England’s overflows are monitored, for example, while only 8% of Scotland’s are. How amazin’ that the State does not check its own performance, eh? And exactly the thing that the little platoons could, possibly should, check up upon.
So, we do, we do, we look forward to this survey of all of the United Kingdom’s waters. With the raw information presented to us all so it is possible to actually check which system, that private or state, produces the best environmental outcome.
That is, obviously, what they’re going to do because of course they are. Right?
Tim Worstall