Willy Hutton is starting to parody himself

Will Hutton’s managed to argue himself into a most interesting little corner. He’s been shouting for years that we need companies to be managed for the long term, not just for the short term interests of share traders. OK, not an argument we share (for the price of a share is the net present value of all future income, therefore it is a long term matter) but interesting in a manner. Hutton’s also one who shouts about how appalling all this inequality is. And the rich shouldn’t be allowed to own everything and other such generally lefty ideas.

And then we get to this:

In fairness, part of Tesco’s problem is that Britain’s retailing landscape is being transformed by two different challenges – online shopping and discount retailers Aldi and Lidl, whose market share has doubled in the past five years to more than 10%. Tesco’s grandiose out-of-town hypermarkets are now stranded behemoths no longer attracting, as they once did, shoppers who now prefer to go online. Tesco has recognised the reality, stopped building new stores, closed others and written down the value of its fixed assets by £4.7bn.

But Aldi’s and Lidl’s success is rooted in something more profound than just capitalising on newly cost-conscious, financially pressed consumers. They are privately owned businesses that think long term and whose business purpose, enshrined by the owners, is to focus on a very narrow range of goods they can sell at high volumes and thus price incredibly keenly. British supermarkets, having to please shareholders with no such commitment, can never price so keenly even if they could match Aldi’s and Lidl’s logistical capacity and focus.

He’s seriously arguing that it’s better for everything to be owned by a few billionaires than it is for all of us, in a rather more minor manner, to be capitalists and owning the businesses of the country through our own savings and or pensions.

How on Earth did anyone nominally on the left end up advocating such oligarchic policies?

It really is planning that is the problem with housing and house prices

We know, we go on about this almost ad nauseam. But it really is true that the basic problem with housing and house prices is the planning system. An interesting paper from the CEPR allows us, once again and via a different route, to prove this:

How have house prices evolved over the long‐run? This paper presents annual house prices
for 14 advanced economies since 1870. Based on extensive data collection, we show that real
house prices stayed constant from the 19th to the mid‐20th century, but rose strongly during
the second half of the 20th century. Land prices, not replacement costs, are the key to
understanding the trajectory of house prices. Rising land prices explain about 80 percent of
the global house price boom that has taken place since World War II. Higher land values have
pushed up wealth‐to‐income ratios in recent decades.

It is not that houses have become more expensive to build. The standard 3 bedder suburban semi can be put up, from scratch, for £120k and a little less than that in volume. What has become more expensive is that land. And, no, it’s not that we’re running out of land nor even that land itself has become more expensive. Even prime agricultural land in he SE tops out at £10k a hectare.

It is that land upon which you are allowed to build a house has become more expensive. And that of course is an entirely artificial shortage caused by the planning system itself.

So, if we want to deal with the “housing crisis” what we need to do is reform the planning system. Probably to the one we had before it caused this particular problem which was, essentially, to have no planning system at all.

An interesting idea to change copyright

We wouldn’t like to give anyone the idea that we think that the Green Party are anything other than somewhere between wildly misguided and entirely deluded on all matters. However, they have made one suggestion which is most certainly worthy of greater consideration. That’s to restrict the terms of copyright:

The Green party may be forced to backtrack on its proposals to limit UK copyright terms to 14 years after a howl of protest from prominent writers and artists including Linda Grant, Al Murray and Philip Pullman.

The Greens’ manifesto said the party aims to “make copyright shorter in length, fair and flexible” with the party’s policy website saying it would “introduce generally shorter copyright terms, with a usual maximum of 14 years”. Representatives of the party said on Thursday that length could be revised after a consultation.

There have indeed been howls of protest from just about everyone who has ever made a penny or two from stringing words together. As most of us here have made a penny or two from stringing words together as well perhaps we might add a little bit of grown up talk to the discussion?

The entire point of copyright (and also of patents) is to acknowledge that free markets, pure free markets entirely unadorned, are not the optimal solution to every problem. We’ll argue with anyone about the idea that they are the optimal solution to more problems than anyone currently allows them to be but we’re still insistent that this does not mean that they are perfect. And the issue of creation, whether of new ideas, new works of art or simply entertaining schlock is one of these areas. It’s difficult and time consuming, expensive in other words, to produce new material in any of these fields. It’s extraordinarily easy to copy it once that has been done.

This means that in a purely free market system it will be very difficult to profit from creation thus we think there will be less creation than we might want. So, we add protections for the creators. We have, simply, entirely invented this concept of “intellectual property”. That provides the incentive to create.

However, there’s also the point that we like derivative creation as well: someone creating atop the bones of what has gone before. And too long a, or too restrictive terms of, protection will limit and hinder this. So, some protection of creation is desirable and too much is not.

But note where this leads us. It is that original creation that we wish to encourage. And, if we’re honest about it, writing a book now is not influenced in any manner at all by the thought that a literary estate might still be earning from it 70 years after the authors’ death. The Sherlock Holmes stories only recently went out of copyright: does anyone think Conan Doyle was in the slightest influenced to write by what the stories might earn in the 1980s? Or take the lengthening of sound recording copyrights from 50 to 70 years just recently. Does anyone really think that Cliff Richard was incentivised to record “Living Doll” by how much it might make him in 2010? Sure, in 2010 he was very interested in the subject as he campaigned on the issue but what we want to know is what pushed him in the first place, not what he thinks post facto. Given that he did the recording under a 50 year protection does rather show that the 70 year protection was not necessary to encourage that original creation.

So, therefore, we probably shouldn’t have the longer protection.

14 years might be too short a period of time. From memory that was actually the time period in the early 18th century, and it could be renewed at least once. Full marks to the Greens for actually recognising this as an interesting area for discussion. But we would have thought that reverting to that 18th century was a bit odd for them. For they normally want us to fast forward to the Middle Ages don’t they?

The terrible pollution from Chinese rare earth manufacturing

It’s entirely true that socialist and communist mineral extraction methods are not quite as interestingly clean as we might like. It’s also true that the technologies used in China for the disposal of the wastes from such processes are less clean or safe than we would accept in our own back yards. It is, however, possible to lose any sense of proportion about this. The BBC has a long piece about just that pollution:

You can see the lake on Google Maps, and that hints at the scale. Zoom in far enough and you can make out the dozens of pipes that line the shore. Unknown Fields’ Liam Young collected some samples of the waste and took it back to the UK to be tested. “The clay we collected from the toxic lake tested at around three times background radiation,” he later tells me.

Unknown Fields has an unusual plan for the stuff. “We are using this radioactive clay to make a series of ceramic vessels modelled on traditional Ming vases,” Young explains, “each proportioned based on the amount of toxic waste produced by the rare earth minerals used in a particular tech gadget.” The idea is to illustrate the impact our consumer goods have on the environment, even when that environment might be unseen and thousands of miles away.

We admit, we’ve never really understood why every hippie is so fascinated by home made pottery. But they are correct in that rare earth mining does mean radioactive substances. Almost all such pores have thorium in them. As no one uses thorium to do very much that thorium is left in the wastes rather than extracted. And do note that none is created: what is being done is that extant radioactive metals are being pulled out of the earth in one place then dumped back onto the earth a few kilometres away. However, there’s something rather more important here. What they’re saying is true, there’s radioactivity in that thar’ lake. But is it an important amount?

Three times background? The difference between London and Cornwall. No, it’s not an important amount.

Non magister sed mendax

Once again we’ve the, umm, interesting assertion that it’s sugar that is really causing the outbreak of obesity. That this is not true doesn’t seem to bother those pushing the tale. For here they are again:

Sugar and carbohydrates are the real culprits in the obesity epidemic – and the public has been falsely told that couch potato lifestyles are to blame, a new report has claimed.

Writing in the British Journal Of Sports Medicine, they said poor diet now generates more disease than physical inactivity, alcohol and smoking combined.

The editorial, by a group of cardiologists and sports experts, says that while obesity has rocketed in the past 30 years there has been little change in physical activity levels.

“This places the blame for our expanding waistlines directly on the type and amount of calories consumed,” they write.

Here is that editorial:

A recent report from the UK’s Academy of Medical Royal Colleges described ‘the miracle cure’ of performing 30 min of moderate exercise, five times a week, as more powerful than many drugs administered for chronic disease prevention and management.1 Regular physical activity reduces the risk of developing cardiovascular disease, type 2 diabetes, dementia and some cancers by at least 30%. However, physical activity does not promote weight loss.

In the past 30 years, as obesity has rocketed, there has been little change in physical activity levels in the Western population.2 This places the blame for our expanding waist lines directly on the type and amount of calories consumed.

So, what’s actually wrong with this analysis?

What’s wrong with it is that it’s simply factually wrong. As Chris Snowdon has been manfully pointing out all along, calorie intake in both the US and UK has been falling over the decades. As has, remarkably, sugar consumption. To the point that, for the UK today, average calorie consumption is lower than the minimum recommended during WWII rationing. Actually, today’s average consumption is below where our grandparents started to lose weight on such wartime rations. It simply cannot be an increase in consumption to blame as there’s not been an increase, there’s been a reduction.

Given that weight does work on calories input minus calories expended, this means that calorie expenditure must be down. But our magisters here are telling us of a study that shows that exercise levels have not fallen, might even have risen. So, what is happening here?

Quite simply, they are looking at formal exercise, not calorie expenditure. Perhaps more people do go for a shuffle around the block than used to. But that’s not going to outrun the effect of us all having central heating these days upon calorie expenditure.

It’s getting very difficult indeed to think that magister is the appropriate word here, our opinion is leaning ever more to the word mendax.