We fear that the Telegraph is grossly mislead here

The Telegraph tells us that:

OECD figures from 2021 show that 16pc of Ireland’s £423bn gross domestic product that year came from taxes on US tech businesses.

Ahahaha. No.

That 16% would be £67.6 billion. For Ireland:

“Revenue collected total gross receipts of almost €96.6 billion, including €17.5 billion in non-Exchequer receipts collected on behalf of other Government Departments, Agencies and EU Member States. Net Exchequer receipts of €67.5 billion were up by 20% or €11.3 billion on 2020.”

It really isn’t true that the Republic runs on nothing but tax revenue from the Big Tech companies. It would be lovely if it did of course, no one in the country would have to pay income tax, VAT, sin taxes on the stout or anything else. Anyone who has ever been to Ireland will know - even if only from the price of a stout - that this isn’t true.

Now it is true that there’s something very odd about Irish economic statistics. It’s one of the few places in the world where using GNP, not GDP, is necessary (here’s, as with sticky-backed plastic, one we made earlier) as our model.

But that 16% of the economy, that’s more like the Big Tech revenue which flows through Ireland. Sounds about right, that’s similar in size to the difference between Irish GDP and GNP and that difference between the two economic measures is largely the Big Tech revenue that flows through Ireland.

Connoisseurs of corporate accounting will understand that revenue is not the same as profits and of course neither are the same as the tax lifted from the flow of funds.

We do not insist that everyone knows these sorts of details about national income accounting. We would hope that those who write the business pages do - for, of course, the business pages are one of those places where everyone gains their imperfect knowledge of these details.

One of the things (and given that he’s safely ensconced at Berkeley, you might imagine there aren’t that many) we agree with the American economist Brad DeLong upon is his insistence that basic economic numerology is something that should be taught to journalists. He’s gone so far as to actually teach such classes, if any editor wishes us to do so here please do get in touch.

We’re not suggesting that all should be propagandised into agreeing with us on the joys of free markets red in tooth and claw - altho’ we do think the world would be a better place if all were. Rather, those who write the daily record should be aware of basic economic numbers. If only to the sort of level of getting the right number of digits and with a hope of getting the first digit itself correct.

UK GDP is around the £2 trillion mark, the government is in the 40 to 45% range of that. There’re approaching 70 million in the UK, around 30 million in the workforce. Corporate profits are possibly 10% of GDP, the capital share possibly 20% and so on. Just a general guide to what is around and about true - the importance of which is that a statement which is untrue, wildly outside possibility, then becomes jarring and so is checked.

As with on the sports pages, employing someone who didn’t know that 15-0 is a most unlikely association football score (tho’ it has happened) while nothing too far out of the ordinary in rugby football would be considered most, most, odd.

We don’t actually mind whether it’s all called economic numerology or economic numeracy - nor whether we’re involved in inculcating it - but we do recommend it to the editors of the nation.

Baumol says the answer is more markets

Larry Elliott treats us to an analysis of where it’s all going wrong:

Three factors were behind the massive jump in productivity in the middle decades of the 20th century: ideas, investment and the struggle against inequality. Economies only really started to motor when new products were available to the masses through policies that encouraged full employment, collective bargaining and rising wages. Currently, there are plenty of ideas but the other two factors are missing. Until that changes, the global economy will be stuck in its low-growth rut.

As you might imagine there are certain aspects of that we don’t agree with. But the big one there, yes, we do. As Paul Krugman has been known to note, productivity isn’t everything but in the long run it’s pretty much everything. By far the largest determinant of living standards. So, assuming that we want our future selves to be richer, our children too, we desire to increase productivity.

The big question is how to do that of course?

One observation we would make is that what new tech there has been introduced in recent years has been in new fields. There’s been very little - comparatively - change in the way we do old things. Which isn’t how a new technology - this internet, web, AI and so on - is supposed to work. Electricity changed everything, as did steam before it. So, why is there this failure of the new to disrupt the old? We’d put forward the idea that there are too many protections for those old ways of doing things. Say, train unions insisting that guardless, or driverless, trains may not be used even as we know - Docklands light rail for example - that they do in fact work. We’re not being allowed to automate because the current economic set up produces too many of Warren Buffett’s moats to protect the old ways.

The regulatory fightback against Uber/Lyft and so on is another example of this.

We thus need to strip the regulatory state of much of its power in order that the competition from new tech is allowed to eat those old ways.

A more theoretic view comes from Willam Baumol. Many will know of his insistence that services will become more expensive, relative to manufactures, as the economy develops and we as individuals become richer. The mechanism is that average wages - as per Krugman - are determined by average productivity. But productivity is easier to improve in manufactures than services. Therefore, given the labour inputs to each over time, services become relatively more expensive.

This is true, but does need the addition of the other leg of Baumol’s work. What is it that drives productivity improvements? It’s market pressures, competition. Improving productivity in services is not impossible, just more difficult. Therefore we need more market pressures, more competition, in services than we do in manufactures. Which leads us to again insisting that we must strip the regulatory state of its ability to protect the old ways from that beneficial competition.

For example, the NHS is fully - at least - one tenth of our economy. Sweating an increase in productivity out of that will have as much effect on living standards as an increase in manufacturing. Which is also, as it happens, about 10% of our economy.

Assume that the original diagnosis is correct for a moment. We’ve not been getting the productivity improvements we’d like to have had and need to reorganise in order to gain those we could have in the future. The answer is markets, markets red in tooth and claw. For those are what do indeed improve productivity.

Markets with the freedom of entry - you know, free markets?

Worrying about Fukushima radiation is just bananas

It was one of us who first did the calculation comparing the radiation release from those stricken Fukushima reactors to global banana consumption. Further calculations pointed out that worries over bioaccumulation in fish were similarly nonsense. The claim was not - is not - that radiation is nothing to worry about. It’s that when worrying we need to think about how much is there? At which point, given that the universe itself is radioactive, we can place it in that spectrum between no worries and flee for the hills. Given that the fish concentrations were, at their peak, around that of one single dried banana chip we’re at the no worries end here.

This seems not to have convinced absolutely everyone:

Japan must work with the Pacific to find a solution to the Fukushima water release issue – otherwise we face disaster

Henry Puna

Based on our experience with nuclear contamination, continuing with ocean discharge plans is simply inconceivable

Ocean discharge is one of the few sensible things to be done here actually.

The water under discussion has already been filtered. We are not talking of releases of plutonium, uranium, caesium and so on. Rather, it’s the tritium in the molecules of the water itself. The Pacific Ocean already contains substantial amounts of such, as does all water. The release, if it happens, will make no measurable difference whatsoever to those naturally existing levels.

It’s easy to check back on this. All those hopes of fusion power, unlimited energy and so on. The fuel will be seawater suitably processed. Because all seawater does contain both deuterium and tritium which are the fuels for the fusion process. QED, it’s there already, as evidenced by all those articles shouting that if fusion works then we can power the world on mere seawater.

It’s also true that any such release would flood the oceans with less radioactivity than one single coal fired plant already does. We really are at the no worries end.

All of this is obvious to anyone who can keep track of the zeroes in a calculation - or grasps scientific notation - so that leaves us with the question of why are people shouting about it? If we were cynics we might mutter something about politicians, bureaucrats and NGOs setting up a couple of decades worth of very important meetings over sushi and whisky at someone else’s expense. We are not, of course, cynics.

But let us be positive here, helpful. One obvious solution is simply to take the tops off the tanks on sunny days. Evaporation will take care of the problem. Or, think along those lines of fusion power. The entire complaint here is that we’ve water already enriched in tritium. As and when fusion works - that 50 years of course - then we will want to have water enriched in tritium to power it. Just as with that thorium that so many minerals processors have been putting by for the now arrived day then thorium reactors start getting filled up, allow the energy production system to eat the supposed pollution.

The only problem with that final suggestion is that the Fukushima “radioactively polluted” water is so low in tritium enrichment that it doesn’t, in fact, get us anywhere in trying to fuel a fusion reactor. Which is another one of those proofs that we’re at the entirely “no worries” end of our spectrum, isn’t it.

Pull the plug on this discussion, it’s nonsense to worry about these trivial levels of radiation.

Unexamined assumptions are dangerous

Assume that all of the following from The Guardian is true. Much of it is but assume all is:

Pillar 4: free movement of goods, people and money

To be truly economically orthodox means opposing trade barriers, curbs on immigration and capital controls, because all these restrictions put up barriers to economic efficiency. Most of the fast-growing countries of east Asia have used protectionism to support economic development, but most economists support the idea that trade should be liberalised, investors allowed to move their money from country to country, and migrant labour should be used to tackle skills shortages.

The case for: Protectionism means slower growth.

The case against: Without a degree of protectionism there will be no meaningful renaissance of manufacturing.

The unexamined assumption there, the one that is dangerous, is that we should desire a renaissance of manufacturing.

Protectionism does two things. Firstly, it makes us poorer right now - by definition it does. We’re deliberately insisting that things must be more expensive than they need be. That’s the entire function of tariffs, quotas and all the rest. To ensure that things within the protectionist trade barriers are higher priced than those without. We’ve always wondered why it is that so many on the left of politics support this idea. After all, that is synonymous with - actually, it is exactly the same as - demanding that the domestic capitalist be able to make higher profits at the expense of the domestic consumer. We grasp why the capitalists like this, just not why so many of the tribunes of the people do.

Secondly, yes, it makes growth slower - making the future poorer as well. For it is competition that improves productivity. Competition from the best in the world - being open to that trade and competition from those best in the world - increases productivity more than its absence does.

So, there are two significant counts against protectionism. To which the offered counterargument is that without it - without us being poorer now, and also the future being poorer - we will not have a renaissance in manufacturing.

The value of that being the thing which needs to be examined. Why would we desire a renaissance in manufacturing? What benefit or value would it produce for us? Other than the obvious, making us poorer now and poorer in the future?

We appear to have something close to full employment right now - at least among those who desire to work we do. We’ve no need to run around and invent jobs for people to do. We don’t seem to have a greater shortage of manufactured items than we do of the provision of services. Quite the contrary in fact. Anyone who wants one can find a TV, or sofa, computer or pair of shoes - manufactures all. It’s health care, child care, elderly care, social care, even decent economic policy, which is in short supply - services all. So, why would we want to redirect those scarce economic resources of capital and labour away from those things we are told we’ve a shortage of to those we seem to have an ample supply of?

Well, we wouldn’t - and that’s before we even consider the effects of the necessary protectionism on our current and future well being.

Take all that The Guardian has said as being true - then examine the unexamined assumption about the desirability of that renaissance of manufacturing. Upon that examination we don’t in fact desire that at all - therefore free trade it is and into the fiery pits of economic damnation with the protectionists.

As universities have known for a millennia now, examinations do indeed uncover who knows what they’re talking about.

Striking at the heart of the British state

Not that we really do think that reform of the House of Lords would be a strike at the heart of that British state. But the principle, if more widely applied, would be:

Previous prime ministers have made liberal use of their unrestrained powers of patronage,

Well, yes.

…something must be done to stop prime ministers being able to pack their numbers with cronies and donors,

Quite possibly so.

….is heavily dominated by those with political connections.

Quite so.

So, what do we do to stop the quangos, the Arms Length Bodies, from being run by those selected in such an obviously absurd manner? Those are the bodies with the real power in our state structure so how do we rid ourselves of the cronies, donors and those with no merit - to be very liberal with the meaning of that word “merit” - other than their political connections?

Our preference would be to not have the quangos, the ALBs. If something’s not important enough to be run by someone elected - which means we can throw them out - then it’s not important enough to be done by government. For part of that social contract which leads to the idea of government is that we can throw them out as and when we tire of them. That being, as PJ O’Rourke pointed out, at the next opportunity to do so among the sensible.

Quangos and ALBs produce a level of government that we cannot throw out - therefore, in the name of that sacred democracy we must get rid of them.

Of course, this is all entirely obvious to any thinking person but we promise that we’ll have some actually radical ideas later in the year.

Get Xi Jinping on the phone - "Quick, send more munnies!"

The Sunday Times - driven, we think, by some of the economic nationalists - is worrying about Chinese state investment in Britain. We’d suggest that we here in Britain are on the correct end of one of the great bargains in all history here - if we judge by the figures the Sunday Times uses that is. So rather than worrying about this the correct action would seem to be to call up and ask for some more.

The claim is, firstly:

The updated list, published today, puts the UK assets held by the Chinese state at £45 billion and the total held overall by Chinese and Hong Kong investors at £152 billion.

£45 billion for the state is a big number. Except, well, it isn’t. UK household wealth - which is what we all own in aggregate - is around the £15 trillion mark. Roughly and aroundandabout half of that is financial assets, the vast majority of which is inside pensions. So the Chinese state owns perhaps 0.6% of Britain’s financial assets.

Ooooh, scary! Or, of course, close to a rounding error.

But the S Times goes on to tell us something even more scary too:

Taking account of dividends paid out by Shell, BP and other stock market-listed firms, it easily takes the payments back to the Chinese state above £1 billion over the past five years.

So, £200 million a year then. On a £45 billion investment pot. A 0.44% yield. The 30 gilts yield is around 4% at present. So, roughly and aroundandabout, it seems that we can borrow from the Chinese state at one tenth of the rate that our own government can borrow from the markets in general.

Now yes, that ignores any capital appreciation and looks only at yields. It’s also not true that companies listed in London necessarily have much to do with the UK economy and even, well, UK financial assets do not belong to us, the nation, but to whichever individuals happen to own them.

But think like those economic nationalists are asking us to do. China has perhaps 0.6% of us and we’ve got to pay one tenth of the rate that we charge our own government. We get their money at an absolutely bargain price that is.

The claim is then made that of course we’ve got to stop this economic rapine by dastardly foreigners. The correct reaction is to ‘phone up Xi Jinping and shout “Quick! Send more munnies!”

There is no case for slavery reparations

We have pointed this out before but the idea seems to still have legs. This idea that people now owe compensation, reparations, to those in the New World who are descendants of those enslaved and transported there.

Barbados is trying to collect on such a promise - or perhaps construct the argument that such a promise should be made. Lionel Shriver runs back with the usual arguments against.

There is a much, much, simpler point to be made. So, make it again we shall.

With the possible exception of poor, benighted, Haiti - the poorest place in the Western Hemisphere - those transatlantic descendants of those enslaved are better off than the descendants of those not enslaved in West and Southern Africa.

We agree, slavery was vile. Yet the net effect of that movement of peoples, on people alive today, was to make better off those descendants of those enslaved. This is not something that compensation, reparations, can be paid for.

No, we are not trying to justify slavery through this argument. No, the suffering then is not compensated for by the position now. Yes, it was a moral outrage and so on - we agree with all of the criticisms of the acts themselves. And yet the impact upon the economic lives of those here with us today was beneficial. Which isn’t something that can be compensated for.

Which is, as far as we’re concerned, the end of that argument.

We do indeed agree that this current world is not perfect, that things both can and should be done to make it better. Things we should do precisely in order to make it better for all of us - without regard to creed or colour.

As Robert Wright points out, peace, easy taxes and the tolerable administration of justice would be a good start. As was pointed out a generation before the end of the slave trade, two generations before the end of slavery. So, about time we got on with it perhaps?

So, just how would GOSBRIT handle this?

Imagine a slightly different history where the Fabians actually won. Those early years Fabians, Wells, Shaw, the Webbs, their belief in the efficiency of proper scientific socialism and planning. We’d have had GOSBRIT to sort things out for us. Then add in a bit of real history:

Ukraine and Russia are major suppliers of sunflower oil and the invasion caused serious shortages. Many shoppers and manufacturers started buying vegetable oils in the place of sunflower oil, creating a domino effect of price rises.

“[The war] had a huge impact on sunflower and the wider vegetable oils market, pushing up prices in alternative vegetable oils such as rapeseed and soybean,” says Gary Lewis, chief executive of KTC Edibles and president of the National Edible Oil Distributors Association (NEODA).

As economists like to point out everything is both substitutable and also, by that definition, itself a substitute. So a sudden shortage of sunflower oil has those knock on effects upon soy and rape. But also upon olive oil. And, well, butter (in French cooking perhaps) and lard (in British) can also be such substitutes. Some will look at the price of any of those and have mash instead of chips, or baked. Or even substitute away from potatoes entirely to rice or quinoa. Or - well, it’s complex, isn’t it?

So, how does GOSBRIT deal with this? We can’t use prices because we’ve already decided to use planning. How is the calculation done of what to produce now that there’s that sunflower lack? Then comes the problem of actually communicating that change in production to the producers - then the further and more difficult step of informing the consumers of what they should be using.

Well, yes, it doesn’t really work, does it? Precisely because everything, but everything, is a substitute we’ve got the one change in one part of the economy and the entire national plan has to be changed. In real time. It’s not even our economy, our plan, that has changed to require the recalculation.

Now consider that part of the economy where the Fabians did actually win - health care. The NHS is run by GOSBRIT without the use of prices or markets, but by bureaucratic dictat according to the plan.

Yes, yes, we’re quite prepared to agree that health care is more important than sunflower oil. But that’s precisely why we shouldn’t be using scientific planning there, isn’t it?

So which resources are you trying to save then?

It isn’t correct that the French get everything to do with food right:

Fast-food chains in France are preparing for one of the biggest changes to their restaurants in decades as the government bans disposable plates, cups and tableware for anyone eating or drinking on-site.

Chains such as McDonald’s, Burger King, Starbucks and Subway are facing what environmentalists have called a “revolution” on 1 January as pioneering new measures come into force in France to combat waste.

Much of the fast-food industry uses an economic model built on throwaway boxes, cups and packaging which customers tip from their tray into a bin straight after eating.

Under the new rules, any restaurant with more than 20 seats – including work canteens, bakery chains, fast-food and sushi outlets – will have to provide reusable, washable cups, plates, dishes and cutlery for customers eating in.

Combatting waste is a synonym for that saving of resources which is so important these days. You know, that walk more lightly upon this Earth and all that.

Except, well, which resources?

Less paper will be used this way, we’re sure. Less polystyrene perhaps. And more energy - no one is going to be using cold water plate washing techniques, or at least we hope not in a commercial environment. And more human labour, obviously - we’ve been there, done that, washing up requires more labour than rolling up paper for the bin.

So, which resources is it that we’ve scarcity of? Well, obviously, all of them, so resources use reduction depends upon a complicated blend of which we’re least scarce of in order to get the job done. So how would we do that complicated calculation?

Prices, obviously. The only calculating engine we’ve got that is fine grained and timely enough to chew through that problem for us.

And here’s the thing. Profit seeking capitalists have had a look around at prices and worked out that the least resource use is achieved - across all those resources, energy, labour, capital, machinery, usables, paper, polystyrene and the rest - by the use of the paper and other disposables.

Apparently the bureaucrats know better. Well, no, they don’t, because they’ve not asked, let alone answered, the one important question here. Which is “Why did fast food settle on the system it has?”

Having not asked that one important question they then insist, by law, on a system which uses more resources in order to save resources.

We’re not quite sure whether that’s a commentary upon bureaucracy or France but we are sure that it’s not the right way to be doing things.

The Stern Review tells us not to do it this way

There’s little point in our having 1200 page reports about something if everyone’s then going to ignore the central lessons of that report.

Note that we don’t say findings. The Stern Review, for example, makes a number of “should” statements. Should is always arguable. But there are also simple statements of fact in there. At which point, trying to agree with those “shoulds” while also attempting to dismiss those facts, that becomes a significant problem. As is being done here:

“You can’t think that you solve the climate crisis and then attend to racial justice or racial discrimination,” Achiume said. “What you have to realise is that every action that is taken in relation to ecological crisis – environmental, climate and otherwise – has racial justice implications, and so every action becomes a site of undoing racial subordination.”

We’d dispute the entire concept of racial subjugation. But let us follow the logic being employed here a little more:

After Achiume’s final report was filed to the UN general assembly in October, delegates at the Cop27 climate change summit in Egypt agreed to a loss and damage fund to help underdeveloped countries adapt to climate-related disasters. These provisions were a positive step, and even “a way of forcing some engagement with reparations”, Achiume said.

“I see it as a wedge, you know, a way in the door, and a way to create space, for accountability for the historic injustice that brings us to this moment of the climate crisis.”

The demand is that both climate change and also historic racial injustice be cured at the same time. This is wrong, incorrect.

Even if we assume that both exist, both must be cured, it’s still incorrect.

For one of those central points made in the Stern Review is that we must be efficient in our manner of dealing with climate change. On the very simple grounds of the most basic of economic insights. Humans do less of more expensive things, more of those that are cheaper. That’s just how the species rolls.

Dealing with that historic injustice might be that moral imperative but it’s clearly an expensive one. The request - nay demand - is for a very large sum of money after all. So, by demanding this be wrapped into dealing with climate change we are adding expense to dealing with climate change - we’ll do less dealing with climate change therefore.

By insisting that we deal with climate change in a more expensive manner we’ll do less dealing with climate change. That’s not the way to do it, no, really, Stern himself told us so.