Parkinson's and the EU Digital Services Act

We tend to think this is going to end up being a very bad idea indeed:

The EU Digital Services Act (DSA), which goes fully into force on in-scope digital services later this month but is already being applied on a sub-set of larger platform providers like Meta, makes provision for charging these so-called very large online platforms (VLOPs) and very large online search engines (VLOSE) to help fund the cost of the bloc’s oversight of their businesses.

The regulation stipulates that the amount charged annually should take into account the costs incurred by the European Commission, which is the primary enforcer of the DSA on VLOPs and VLOSE; and be “proportionate” to the size of the service (based on average active monthly regional users) and also factor in the provider’s “economic capacity”, or that of the designated service (or services) they offer. (In Meta’s case, it provides two services which are designated under the DSA: Its social networks, Facebook and Instagram.)

Now, yes, some of us here aren’t all that keen on the EU itself. Some have even campaigned against it - but there is no ASI “view” on the organisation. So this isn’t about the EU specifically.

It’s also not about regulation - although we have a well known antipathy to many forms of it around here.

This is, rather, about something very specific, the setting of that budget.

We know, from C. Northcote Parkinson, that the motivating force of a bureaucracy is simply the survival of that bureaucracy. Once that is achieved it is the growth in the budget of that bureaucracy and the associated headcount. Given that there can be no useful measure of the output of a bureaucracy that’s just what the motivating forces are.

This is simply a revealed truth and is why we do now have more Admirals than ships, why the MoD now has more than one bureaucrat per sailor or soldier and also what gave rise to Ronnie Reagan’s joke (the punchline of which is the D of Ag bureaucrat crying at his desk because “My farmer died”).

OK, we know this. So now we have a bureaucracy to “monitor” certain companies. But the budget is not determined by what taxpayers are willing to pay for such monitoring (not that that’s much of a limitation at EU level) nor, in fact, by anything very much. The more the bureaucracy spends - that is, the greater the desire for a higher headcount, and expanded budget - the more the captive companies under the law will have to pay.

We do not expect this to work out well. In fact, we’ll make a prediction.

Per the Commission, the total pot of supervisory fees it has collected from VLOPs/VLOSE for 2023 is €45.24M (~$48.7M).

That’s not going to remain about €45 million. That’s going to go north at 15 to 25% a year soon enough.

Come back and prove us wrong in 20 years.

We do know that Parkinson is right. And the nutshell argument about bureaucracy is that to put bureaucrats in charge of their own budget is to put children in charge of the sweetie shop. An amusing idea leading to hyperactivity but no long term good will come of it.

This isn’t a good idea.

We fear this claim might not be entirely true

Bill McKibben tells us that:

We now live on a planet where the cheapest way to produce power is to point a sheet of glass at the sun

If it is true then that’s excellent, we’ve solved climate change. All we have to do now is wait. As extant plants come to the end of their working life they will - entirely naturally, with no other incentive nor action needed - be replaced by sheets of glass pointed at the sun.

As no one at all does in fact believe this to be true - not even Bill McKibben - then we do have to assume that the statement is either not true or not believed by anyone. Possibly not believed by anyone on the basis that it’s not true.

The background here is the pause in granting new LNG export licences in the US. Something we dealt with back a bit. It’s actually an internal to the US argument over who gets the profits from fracking, nothing else.

It is possible to go a step further in analysing this claim. So, all those/us Europeans eager to buy this American LNG that isn’t to be exported. Why are we eager to buy it? It has to be because it’s cheaper than putting up sheets of glass pointed at the sun, doesn’t it? And if that’s the only possible explanation for the demand for the LNG then that statement about sheets of glass cannot be true, can it?

As we’ve been pointing out for a couple of decades now there are interesting things to say and discuss about climate change. But assertions of untruths don’t help.

Apparently we all have to be conned into being evil

Andrew Simms with his usual perspicacity here:

But the SUV craze has been driven by marketing, so an obvious step would be to introduce tobacco-style bans on their advertising.

Consumers are fools who only buy because they’re brainwashed by advertising. Ban the brainwashing and all will be well. Using the car industry - home of the Ford Edsel - as the proof of this contention is something we might describe as less than evidentially valid.

But how did we get here and what can be done? SUVs didn’t just swarm on to city streets like a natural phenomenon – even if that’s the impression the adverts like to create. In a very short period of time, consumer behaviour was switched on to the SUV by massive marketing campaigns and new consumer debt models, in the shape of personal contract purchase (PCP) loans. In 2010, SUVs accounted for just one in 10 new car sales in the EU, but by last year this had climbed to over half. It’s a stunning example of how quickly a heavily polluting sector can change. Unfortunately for human health and the climate, it has been in the wrong direction. Why is not hard to understand. In a saturated car market, manufacturers found they could charge more and make more profit from SUVs.

The contention is that consumers all went and bought SUVs because they are more expensive. Which is not only less than evidentially valid it’s insane.

Consumers will indeed buy something they consider to be worth more but that’s a different contention:

Then there is the other problem: electric or not, SUVs are killers. People in a light vehicle are three times more likely to get seriously injured when in collision with a much bigger car than one of similar weight.

Ah, SUVs are safer for those who buy SUVs. Which does seems like a good enough reason for people to preferentially buy SUVs. But this then has its problems when we consider Simms’ insistence on that advertising. It should be illegal to tell you about greater safety?

But of course the real joy here is what this means for EVs. Which are, naturally, considerably heavier than ICE cars. Therefore they have all the same problems as larger ICE cars. So, presumably, under the Simms dispensation advertising them should be illegal.

We did note the perspicacity which Mr. Simms brings to discussions, didn’t we?

Isn't this just so delightfully stupid?

What happens if the consumer decides not to buy an EV?

It is this confusion that is partly being blamed for the slow-motion car crash now unfolding in EV sales, with industry figures published on Monday showing that their market share slipped from 19.7pc in December to just 14.7pc in January.

That was after annual figures showed the proportion of car sales that were electric slipped from 16.6pc in 2022 to 16.5pc in 2023, the first time the EV segment has gone into reverse.

The next stage is massive fines - as much as £15,000 per vehicle in fact:

This requires 22pc of new cars sold this year to be ZEVs, rising to 28pc in 2025, 52pc in 2028 and 80pc by 2030. Manufacturers who fail to meet the targets must pay fines or cover shortfalls through an emissions trading scheme.

The poor old manufacturers are left pushing on a string.

The background logic here is what is stupid. We don’t have to go far to find someone who’ll tell us that what we buy is all determined by the Big Corporations. It’s advertisin’, innit? They brainwash us, right?

That near all advertising is not “Buy this!” but is “Buy my this!” seems to escape. But here we’ve actually got a test. Do consumers rule or producers?

We’ve also gone through this before. Producers were forced to lower the average CO2 emissions of their fleets. Rolls Royce, embedded within BMW, could do this. Bentley, within VW, as well. Aston Martin, selling only those sporting beasts, could not. Which is what gave us the Cygnet, about as silly a motoring idea as ever saw light of day and about as successful as the Ford Edsel.

Which is where our stupidity diagnosis comes in. Those Rolls Royce minds in Whitehall have designed a grand plan To Save The Planet. And they’ve done it on the most basic misdiagnosis of who is the decision maker in an economy. It isn’t the producers who shepherd the consumer sheep into buying whatever it is that is produced. It’s the consumer making the decision. And if the consumer says no then that’s that.

This entire plan for EVs is based upon producer sovereignty. But that’s not how the world works - consumer sovereignty is. And basing your grand plan To Save All Of Humanity on an incorrect piece of sub-Marxist wibble, well, that’s really pretty stupid, isn’t it.

We can see a certain problem with ethnic pay gap protection

Over and above the problem of this being attempted management of the economy at too great a level of detail that is. We simply do not believe that government is able to deal with things at this level of fineness. But as we say, beyond that.

Inequality has risen over the last decade, with BAME families disproportionately hit by the pandemic and the cost of living crisis, as well as being on the sharp end of cuts to the NHS, education and the criminal justice system.

Anneliese Dodds, the shadow women and equalities secretary, said: “It has never been more important to deliver race equality. Inequality has soared under the Tories and too many black, Asian and ethnic minority families are working harder and harder for less and less. This is holding back their families and holding back the economy.

The problem being in the numbers used to analyse or explain differences in ethnic pay, that ethnic pay gap.

On the raw figures British born Black, Asian or Asian British, Mixed or Multiple ethnic groups and Other ethnic groups all in fact get paid more than White. When we include overseas born Black with British born then that group does earn less. This is something that has happened in this past 5 or 6 years, from 2018 onwards or so, a reversal of the earlier paid less than.

When we drill down further into these numbers and correct for geography then the picture changes. For this higher pay is partly at least an artefact of the concentration of ethnic minorities in London, where pay is significantly higher than the rest of the country - but so are living costs as well.

When we drill down further to examine by education level and so on then the picture changes once again.

The point being that the situation is complex. And, OK, so it’s complex.

However, it’s complex in the opposite direction from the gender pay gap. On those raw, national, figures women earn less than men. On those raw, national, figures ethnic minorities earn more than whites. On the fully adjusted for working hours, jobs done, education levels, geography of workplace, job for job, parental status and so on then women do not earn less than men. But some ethnic minorities do earn less than whites, others more.

Which is, we think, something of a problem for at least one or the other set of complaints. If it is the properly adjusted gap that we should all worry about then gender pay has been solved. For which Hallelujah, obviously. If it is the raw and unadjusted gap that is the problem then there is nothing to do - unless we’re to start worrying that whites are underpaid - about the ethnic pay gap.

To change the method of measurement midstream as it were, to say that unadjusted is important when talking of gender and adjusted when talking of ethnicity is to, we would suggest, be overly picking and choosing which numbers to pay attention to. Almost as if there’s a manipulation of the figures in order to create a political issue that requires action.

Some still think The Good Life is, well, good

Or even, some still seem to think that the - attempted at least - peasant self-sufficiency portrayed in The Good Life is well good.

‘Our chickens cost us £5 per egg’: what to expect from keeping hens

Could keeping a flock be a plucky financial decision or will it peck away at your bank balance?

In more detail:

Joanne Swali, who looks after three hens with her family, says: “My husband has joked quite a lot of times that it would have been cheaper if I asked for some diamond earrings.

“I would say that, a few years in, if you factored in all our expenditure to date, our cost per box of six eggs would probably be in the region of £30.

Even at current supermarket prices that is not a saving.

Howorth also stresses that hen owners could save money by ditching a gym membership in favour of getting outside and exercising their muscles tending a flock.

It also seems to require a gym-level amount of physical labour. And we’ll guarantee that the cost of the time spent doing that isn’t in that £30 per small box of eggs calculation either.

There is a reason why we all abandoned peasant farming, it’s that farming is one of those things where there are vast economies of scale. Thus, returning to peasant farming would be a return to the abject poverty of the past where we were all peasant farmers.

Of course, if you like doing this sort of stuff, if this is what makes your life good, then by all means carry on. But we do need to vituperatively reject those who try to insist that we should all be doing this. Or even, those like Oxfam who have, in the past, insisted that Africa should be forced to remain like this.

Peasant farming, as a lifestyle choice, is fine if you like that sort of thing. As a general or national thing it’s a poverty creating disaster.

Exxon Knew!

We’re seeing, around and about, an insistence that Exxon knew all about CO2 levels and so on back in the 1970s, even the 1960s. We’ll leave it to others to discuss more fully the implications of that, we just want to make the one apposite comment.

So the allegation, claim, insistence, is that privately funded, within a corporation, science was more accurate and earlier by a couple of decades than publicly funded science and governments. We have got that right, yes?

Therefore, when we look around today at who is predicting what for 40 and 50 years in the future we should be looking to what source? The publicly funded science and governments who have been late and wrong? Or the corporate estimates of the future that were early and right?

Assuming that original allegation, claim, insistence, is correct then clearly it’s the latter, isn’t it? The views of those with skin in the long term game - the corporates - have a better view of the future than those playing politics over the same points.

So, for example, rather than believing what politics tells us about the need for the circular economy, recycling everything and the looming shortages of critical minerals we should be looking to the estimates from mining companies about what that future holds. You know, the insistences that we might have a shortage of current holes we get our minerals from but there’s no shortage of the actual minerals themselves?

Oh, good. So, everyone who is insisting that Exxon Knew! is indeed on board with the scientific proof that we’ve not got a minerals problem then, yes? Glad we've been able to settle that one.

Picking winners

From the obituary of a successful entrepreneur:

“I’m a serial entrepreneur,” he said. “I started ten companies up and seven went bankrupt.”

Given that Mr. Zockoll was a successful entrepreneur this gives us a good idea of how many truly bad - or perhaps, things that upon experimentation turn out not to be so good - ideas there are out there.

Which should give us pause for thought about these Tutto nello Stato ideas that float around out there. Given that people with a proven track record of getting it right, with all the incentives to do so, still have this dismal a success rate, then what are we to think of bureaucrats trying the same? Without that demonstrated skill, without the incentives, without, dare we say it, detailed knowledge of the markets themselves?

We’d run with the idea that the bureaucrats are going to pick even more losers than those directly involved and incentivised. There are those who disagree of course but it’s very much less than obvious that they’ve the empirical data to back up their pretension.

One of the grand functions of free to enter markets is precisely this - sorting through ideas that work and don’t work. Thinking about it, planning it, studying it, doesn’t in fact, work. For every business plan works until it first confronts the market. As New Coke showed. Given that this is the test it seems logical to use market players to do the testing rather than those not subject to those market forces - with other peoples’ money to boot.

It's all the capitalists, the neoliberals, the CEOs and markets and, and, and

Mr Chakrabortty applies his well known economic perspicacity to the Royal Mail:

So this is how the Royal Mail ends: killed by lying politicians, lousy managers and ruthless moneymen

Aditya Chakrabortty

Barring the occasional rhetorical twist any one of us can predict how the other 1200 words go.

Sigh.

Now given that Royal Mail is politically, government, influenced we’re not going to argue that the issue has been perfectly managed. But the one bit - a really rather important bit we feel - that Aditya doesn’t remark upon is that all mail systems have exactly this same problem. We out here are simply sending fewer letters.

For Royal Mail, and from different data series so perhaps not entirely comparable, some 20 billion or so in 2004, 8 billion in 2021. No, the collapse did not come as a result of privatisation. Any chart wouldn’t, in fact, be able to visually spot the date of that privatisation. Rather, it tracks the rollout of broadband internet and then smartphones. The background technology has changed.

This produces a vast fiscal or economic problem. The cost of Royal Mail is near entirely the fixed cost of the network. The marginal cost of another letter is as close to zero as makes no difference. That also means that the marginal revenue loss of one less letter feeds near entirely through to the bottom line - the costs of the network have not fallen but revenue has.

Actual serious people have been chewing over this. Perhaps the overhead cost can be reduced by reducing that universal service obligation? Maybe. Or possibly the cost for each letter should triple to cover the lower volume. Maybe. Or some vast subsidy to retain the system. Maybe.

But this problem is not a feature of Royal Mail alone. Every postal system is facing exactly the same problem. It’s therefore not a point of the ownership or management structure of Royal Mail. Which is, sadly, exactly the one point which Mr. Chakrabortty does not examine nor explain, instead blaming everything upon the capitalists and privatisation and, and etc.

Which is a pity. It would have been possible to find out about this if he’d simply read his own newspaper. This is a good explainer for example. At which point we think someone should give Aditya a prize. Imagine, a Guardian column which could be factually improved merely by reading The Guardian?

A big number of a very big number is a small number

Apparently we’ve all got to be poorer. Well, yes, again, but this time it’s because:

The global extraction of raw materials is expected to increase by 60% by 2060, with calamitous consequences for the climate and the environment, according an unpublished UN analysis seen by the Guardian.

Natural resource extraction has soared by almost 400% since 1970 due to industrialisation, urbanisation and population growth, according to a presentation of the five-yearly UN Global Resource Outlook made to EU ministers last week.

To get a handle on the sort of size of number they’re talking about:

Each year, the world consumes more than 92b tonnes of materials – biomass (mostly food), metals, fossil fuels and minerals – and this figure is growing at the rate of 3.2% per year.

Of course we don’t, in fact, “consume”, we borrow for a bit. That old phrase of dust to dust, ashes to ashes, is true at the planetary system level. Say, the use of metals - we might dig them up out of one hole, use them then stick them back in another, mine to landfill, but we’ve not consumed them.

But OK, so 92 billion tonnes, call it 100bn. Up by 60%, let’s give them an inch and call it 200 billion tonnes. Big number.

Except: The lithosphere consists of sediments and crystalline rocks with a total mass of 23,000–24,000 × 10x15 metric tons.

24,000,000,000 billion tonnes.

200 billion is 0.0000008%

In a million years we’ll use under 1% of it (assuming we’ve got the right number of zeroes there all the way through).

This is such a problem that: ““Higher figures mean higher impacts,” he said. “In essence, there are no more safe spaces on Earth. We are already out of our safe operating space and if these trends continue, things will get worse. “ which we think might be a bit of an exaggeration. “The report prioritises equity and human wellbeing measurements over GDP growth alone and proposes action to reduce overall demand rather than simply increasing “green” production.” Ah, yes, we must be more equal and poorer as a solution. How did we guess that is what would be suggested? “Decarbonisation without decoupling economic growth and wellbeing from resource use and environmental impacts is not a convincing answer and the currently prevailing focus on cleaning the supply side needs to be complemented with demand-side measures,” Potočnik said.” That, again, means make everyone poorer.

Yes, sure, 200 billion is a big number even when speaking about government budgets and deficits. But the size of the Earth is a really, really, big number. Against which 200 billion is a grain of a smidgeon of a smear. It’s simply not an important nor relevant number nor percentage.

It’s a great excuse to impose perpetual poverty upon the population, of course it is. But it’s not a good reason. Because a big number of a very big number is a small number.