What excellent news, risottos are becoming cheaper

There are always those who will complain about delicious food becoming cheaper of course:

Half a century on, the Italian rice industry is suffering badly from foreign competition.

While Italian farmers sell a tonne of home-grown risotto rice for 322 euros, producers in south-east Asia grow it for less than 200 euros a tonne.

Rice producers in the Po and Ticino valleys will organise a week of protests and strikes against the cheap imports, starting on Monday.

“In the first six months of this year, rice coming from Cambodia has been subject to at least one fine every week because of the presence of unauthorised pesticides or the absence of the proper food safety certificates,” said Roberto Moncalvo, the president of Coldiretti, a national farmers’ organisation.

The absence of the proper certificates is, of course, in this modern world, a heinous sin. And that presence of pesticides. Hmm, perhaps that’s something to worry about?

Gianmaria Melotti, a rice producer from near Verona, said rice arriving from countries like Cambodia and Burma was devoid of the weevils and grubs that afflicted Italy’s output.

“What are they putting in their rice fields, that they are able to eliminate all these insects? Saving Italian rice means also safeguarding people’s health,” he said.

That’s an interesting one to think about really, isn’t it? Safeguarding peoples’ health these days means ensuring that their rice is not vegetarian.

The answer here is obvious: as Bastiat told us we should always be looking at any and every economic question from he point of view of consumption, the consumer. And here the answer is blindingly obvious. Simply label the two, the imports with may contain pesticides and the Italian with does contain weevils. Let the customer make the choice.

Excellent, so that’s climate change entirely sorted then

I take this to be exceedingly good news. Our struggles to contain climate change are entirely over and we can all go back to sleep:

Solar has won. Even if coal were free to burn, power stations couldn’t compete

As early as 2018, solar could be economically viable to power big cities. By 2040 over half of all electricity may be generated in the same place it’s used. Centralised, coal-fired power is over.

It’s true that we don’t normally believe The Guardian on matters environmental. But let us just take them seriously here.

As we all know the predictions of future climate change are based upon economic predictions of the future. How many people will there be, how rich will they be and what technologies will they be using to generate the power to create that wealth for that many people. And of the models that are used the one that tells us that we’ve a serious problem with climate change insists that we’ll still be using coal for 50% of our power needs in 2080 or so.

We don’t actually have to believe that in order to be able to observe that that is the central point of the alarmist case.

Excellent, so, if no one is going to be using coal in the future then we’ve not got a problem with climate change, do we?

Do note that this is not to take as being true, nor even seriously, any of the predictions that are being made by anyone. It is, rather, just to point out an important piece of logic. If solar is now, or will be imminently, cheaper than coal so that we all start to use it purely on economic grounds then the problems with climate change are over. For all of the models and predictions insist that we only get major problems if we don’t stop using coal.

It cannot be true that solar is wholly (and unsubsidised) competitive, or cheaper, than coal and we still have a problem. Alternatively, it cannot be true that we still have a problem in hte future if we believe what we are being told about the imminent cost competitiveness of solar.

It’s an either or thing.

Looking at the true numbers, rather than those provided by the boosters of solar power, it’s probably a little early, 2018, to be saying that solar will be truly competitive. But by 2025 (as Bjorn Lomborg has long been saying) it almost certainly will be. Meaning that we don’t actually have a problem and that we can indeed all go back to sleep.

The only way that this cannot be true is if solar doesn’t become so competitive. In which case we shouldn’t be working so hard to install it either, should we?


On the appallingness of traditional English food

We’re all well aware of the appalling nature of the traditional English cuisine. Oddly preserved vegetables (mushy peas?), grossly overcooked fresh ones, allied with dubious meat masked with gelatinous sauces. At least one American professor insists that the real reason for the British Empire was the desperate search for a decent lunch. That we found that lunch, as modern day English cuisine shows, is therefore why we gave up that empire, job done as it were.

Paul Krugman has written on this point:

Maybe the first question is how English cooking got to be so bad in the first place. A good guess is that the country’s early industrialization and urbanization was the culprit. Millions of people moved rapidly off the land and away from access to traditional ingredients. Worse, they did so at a time when the technology of urban food supply was still primitive: Victorian London already had well over a million people, but most of its food came in by horse- drawn barge. And so ordinary people, and even the middle classes, were forced into a cuisine based on canned goods (mushy peas!), preserved meats (hence those pies), and root vegetables that didn’t need refrigeration (e.g. potatoes, which explain the chips). But why did the food stay so bad after refrigerated railroad cars and ships, frozen foods (better than canned, anyway), and eventually air-freight deliveries of fresh fish and vegetables had become available? Now we’re talking about economics–and about the limits of conventional economic theory. For the answer is surely that by the time it became possible for urban Britons to eat decently, they no longer knew the difference. The appreciation of good food is, quite literally, an acquired taste–but because your typical Englishman, circa, say, 1975, had never had a really good meal, he didn’t demand one. And because consumers didn’t demand good food, they didn’t get it. Even then there were surely some people who would have liked better, just not enough to provide a critical mass.

There’s possibly a certain tongue in cheek element there but a great deal of truth as well.

However, there’s one little point coming out of an economic history project looking at the First World War that throws an interesting light on all of this. They have been taking a detailed look at the heights of those who joined the Army after 1914. Did birth order affect height? Economic background? Crowded industrial area as origin? All those sorts of things and then we get this:

Nor do we find that living in an agricultural district confers much height advantage, as studies of much earlier eras have found, probably because market integration had diminished the benefit of living close to food sources.

Something that is most, most, interesting.

If the tasteless nosh produced by those canning and early preservation techniques had been less healthy (rather than just less appetising) than fresh grown country food then we would have expected to see some differential in height between rural and urban entrants into the Army. But we don’t: differences in height are explained by many other factors but not by that access to fresh food or preserved.

Krugman may be right that that early urbanisation and the crude techniques used to preserve the necessary food led to the destruction of the palates of the nation for several generations. But while it may have led to a cuisine that would have (and did in some instances) make a Frenchman projectile vomit, there’s not really any evidence that it was an unhealthy diet. At least, not compared to what they were still eating out in the countryside.

Brown Windsor soup, corned beef pie with two overboiled veg, spotted dick to follow anyone?

Inside the Adam Smith Institute

Now that the new Adam Smith website is up, with an exciting plethora of activities and reports scheduled, new readers might like to take stock of what the ASI does, and what motivates us.

If labels are used, they might be “free market” and “libertarian,” but these are big tents under which disparate people are grouped. The crucial thing is that our free market libertarianism is both consequentialist and empiricist, combining an essentially Hayekian economic outlook with a deep optimism about the world.

In our view actions that enable individuals to advance their happiness by pursuing their own goals are worthy of support, and those that restrict their ability to do that should be opposed. We are more concerned with what results from actions than with the intentions or attitudes of those who initiate those actions. And we are more concerned with changing the world for the better than with promoting theories about it.

As empiricists we make conjectures about the world and its future, and we test their value against experience of real world outcomes. Where the two conflict, it is the conjecture that has to be rejected or modified. We take the view that “an ounce of practice is worth a pound of theory.”

While economics and public policy are complex fields that make experiment and testing difficult to perform, we do attempt to test proposals by their results. Several times we have proposed small-scale trials of larger ideas in order to validate the ideas and ascertain any unforeseen drawbacks before they are rolled out more widely.

We recognize, of course, that poor people do not have access to the choices and chances accessible to the rich, and this is why many of our policy initiatives are directed to improving the lot of poorer people in society. We have advocated for many years that the income tax and national insurance thresholds should be set at the level of the minimum wage and indexed to it, so we would not be taxing people on the bottom income level.

Some of our research studies and policy suggestions derive from our recognition that poor people are hurt most by things such as restrictions on international trade and migration, planning controls that prevent cheap housing from being built, education policies that condemn poor children to bad schools and regulatory policies that protect established market players from new entrants.

We propose and back policies that give all parents choice over where their children go to school and which introduce competition into the school system, whether these be by education vouchers, or by allowing the allocation of state funds to schools be determined by the choices parents make. We tend to back the view that welfare is not just about providing the services the state thinks poor people should have, but about equipping people with the means to make their own choices about the mix of services they prefer. Ideas such as a negative income tax could remove the perverse incentives present in the current welfare system.

We recognize that states can cause a great deal of harm when they attempt to direct and micromanage the economy. Many regulations have damaging effects that were not anticipated, and this includes financial regulations that can make financial systems more unstable than they would be without them.

More broadly, we think that the ‘unknown unknowns’ of regulation should lead society to prefer decentralized trial and error to the risk of one big mistake that affects everyone in the same way.

We have argued that the central bank should follow the ‘Hayek rule’ – the stabilization of the level of nominal spending in times of booms and busts along a predictable path. Scott Sumner recently delivered our annual Adam Smith Lecture and explained how the failure of the world’s central banks to do this led to the Great Recession.

In the Adam Smith Institute we have always been very optimistic about technology and society. We see the world becoming increasingly open and tolerant in most (though not all) areas, with technology and entrepreneurship helping to drive that. To us, companies like Uber, Google and Airbnb deserve to be celebrated when they break down barriers to competition and disrupt the existing way of doing things in ways that give consumers a better product for a lower cost. It is this kind of innovative entrepreneurship that moves the world forward and allows today’s luxuries of the very rich to be tomorrow’s household commonplaces.

There is a dark side when new technologies are used by governments to spy on their citizens and control them. If technologies like Bitcoin and other blockchain-based innovations represent a long-term way of evading the worst excesses of government intrusion, they should be defended from government now while they are still in their infancy.

Of course the Institute is not a monolith. It consists of people who sometimes differ, but all of whom are brought together by a desire to give more power and liberty to individuals, so that their regard to their own interest can make them and us richer, freer and happier.

Why golf is a rubbish sport

The LSE’s Paul Cheshire has a good post up on the Spatial Economics Research Centre blog today on green- and brown-field development. Among other things, he explains why there are so many golf courses on the green belt:

Nothing wrong with golf or horsey culture but what we have to understand is that Greenbelt designation gives those land uses a massive subsidy. House building cannot compete for agricultural land but golf and horses can. I recently discovered another reason why we have so many golf courses around our cities: they are substitutes for landfill sites. It costs £80 a ton to dispose of ‘inert material’ in registered landfill sites but nothing if it goes into building bunkers! To quote Paul Robinson, Derby Council’s Strategic Director for Neighbourhoods, in defending the potential to capitalise on the value of the sites of the Councils two golf courses: “Effectively you go out to the waste industry and you say we will allow you to put your inert waste in our golf course…So you create mounds and bunker areas using the waste and at the core of those is inert waste.” .

This is one factor which underlies the proliferation of golf courses close to sources of builders’ waste and on land where there is no competition from houses. As noted in The Economist there is a serious oversupply of them. So the combination of Greenbelt designation and landfill costs means we can build as many golf courses as the market demands at their subsidised price but we cannot build houses. It is time to start turning some of our excess supply of golf courses into gardens; with houses on them!

The whole thing is a good read, particular the estimate of how much greenfield land is currently available to build on within a ten minute walk of a train station. (Quite a lot.)