Malthus was both right and wrong but we've solved that problem anyway

As we might have noted before the Rev Malthus was absolutely right about all of history until he sat down to write and absolutely wrong about near all that has followed. Population growth can indeed - and often will - outstrip food production growth yet this is a problem that capitalism and industrialisation solve. Rich people have fewer children:

South Korea’s fertility rate is expected to fall to an all-time low this year, setting the country up for a host of problems including underfunded pensions, expanding debt and economic decline.

The average number of babies born per woman of reproductive age is due to be as low as 0.96 this year, falling below one for the first time in history, according to a study commissioned by the Chosun Ilbo newspaper.

That sort of fertility rate pretty much solves the overpopulation concern. And while that rate is alarmingly low by anyone's standards it's also true that every rich country, absent immigration, is below the 2.1 which is replacement level. The world is expected to be below it when he world is as rich then as we are now, around 2100 or so.

It's not even access to contraception which drives this - although obviously those who wish to use it should be able to buy it if they so wish. It's desired fertility which falls like a stone.

We know how to solve overpopulation, that's one through economic growth. You know, that thing caused by capitalism and free markets? Or as we might put it, economic freedom is the most effective contraceptive we know of yet. 

The terror of people being employed where they are productive

The Telegraph has uncovered quite the horror of our age:

Britain faces an artificial intelligence “brain drain” as Silicon Valley raids its top universities for talent, data compiled by The Telegraph shows.

Around a third of leading machine learning and AI specialists who have left the UK’s top institutions are currently working at Silicon Valley tech firms.

More than a tenth have moved to North American universities and nearly a tenth are currently working for other smaller US companies. Meanwhile just one in seven have joined British start-ups.

People are being employed where they are the most productive. Given the global nature of the tech business the where where this is doesn't matter in the slightest. Thus the brightest minds being allied to the deepest capital pockets are off being productive - exactly the result we desire.

There is another point here too. The argument in favour of the universities - government funded of course - doing all the research is that it's all so long term, so much of a public good, that the private sector, private actors, just won't do it. Takes far too long, it's all far too risky, to do that research in a private company. 

Now we've the complaint that everyone capable of doing this research is in a private company - wherefore our universities now? Well, clearly, the argument that only universities, only the government, can do that research has something of a dent in it, doesn't it? 

And we do seem to have entirely demolished the idea that the universities must have more money in order to attract those brains to do the research that the private companies are already handling rather well.

In more formal terms the argument is that the private sector won't produce public goods therefore the public sector must. That doesn't then mean that the public sector must be funded to compete with private - it means that if the private sector is producing the public goods then we don't need the public option at all.

Help To Buy - why politics, again, isn't the way to run things

It was never a very sensible scheme to start with:

The government's Help to Buy scheme is facing the axe amid concerns it is helping wealthier households and pushing up house prices.

The Telegraph understands that ministers are planning a “fundamental review” of the policy that could see it replaced with a scheme that is "more targeted on those it is meant to be helping."

Subsidising the purchase of something you've already decided is too expensive is not the way to do it. For you're just adding more money to the flow chasing that already too expensive thing.

And yet it was done - why? Because political pressure to do something and logic to do the right thing aren't - as we can note - the same thing. House prices were/are such that people find it very difficult to get on the ladder. Reducing the price to be paid would help but that might mean confronting one or other shibboleth. Like allowing people to build houses people want to live in where they'd like to live instead of where the planners damn well tell them to.

Thus we get policy which not just doesn't quite address the justificatory problem given but is entirely counter-productive.

The point being that politics isn't a good way to be managing things. For what bubbles to the top of that political do something list, what politics suggests, or allows to, be done,  tends not to be what either needs or should be done. Better instead to use politics to decide that absolute minimum of things which can only be dealt with in that manner and leave the rest of life to us the people to deal with in a very much less inefficient manner.

Venezuela Campaign: a country in a death spiral

When people abandon a country in droves, it is rarely a sign of a healthy economy.  2.3 million Venezuelans (7% of the population) have fled poverty and economic despair, and another 2 million are predicted to leave over the next year and a half. For scale, imagine if half of London’s population left the UK, and the other half were about to leave. And we may be underestimating the crisis, since the situation is rapidly becoming nightmarish.

Hyperinflation has risen above 61,000% and is predicted by the IMF to reach 1,000,000% by the end of the year. When inflation runs this high, the lag between tax assessments and payments means that inflation wipes out the real value of taxes. This forces the government to print yet more money in a hyperinflationary death spiral. The recent botched operation to remove five zeros from banknotes has only caused further panic and confusion among the population.

Escaping Venezuela is increasingly difficult. Public transport has ceased to operate, and private cars lack petrol or can’t be repaired due to an absence of affordable spare parts.  Walking to the border is almost the only option, difficult for the old and sick or those with small children. Moreover, neighbouring countries have started to insist that Venezuelans should present passports. However, this is no longer possible because Venezuela’s passport bureau has run out of materials to produce them.

One could say “could the last person to leave please switch out the lights,” but that won’t be necessary as the electricity network is falling apart with blackouts becoming ever more frequent. As public services grind to a halt, so does the country. In Caracas, there is rarely running water available, which Bloomberg’s correspondent has described as “a man-made drought that is arguably the most equalising disaster the government has ever managed to engineer.”

Some Venezuelans suggest that the government would prefer most citizens to leave, as this will help it stay in power.  Fewer people means fewer protests, and if political opponents are no longer in the country, they cannot campaign against the regime. The regime’s food distribution network, or CLAP, assures the loyalty of many poor Venezuelans. Meanwhile, the regime’s leaders allegedly siphon off money for themselves from state oil operations, regardless of its effect on the country.

What should the world do when a country’s leadership steers it off a cliff? Must we wait until the country crashes at the bottom? Venezuela is certainly already in free fall.  The British Government must be proactive both in addressing the humanitarian crisis and in working with Latin American countries to try and help the Venezuelan people find a new leadership dedicated to the welfare of the people.

The art installation that is the Soviet Union

A vastly ambitious and potentially interesting art installation. One which we'll guarantee manages to get one hugely important thing wrong. 

In an art project that has been compared to The Truman Show, Big Brother and the Charlie Kaufman film Synecdoche, New York, a Russian artist has paid 400 people to live for three years in a fictional but functioning Stalin-era research institute.

In an experiment long anticipated in the film and art worlds but confirmed by the Guardian on Friday, Ilya Khrzhanovsky created an institute of theoretical physics in eastern Ukraine modelled on the shadowy facilities which existed in the Soviet Union from the 1930s to the 1950s.

Inside it were more than 400 real people, who relived 30 years of the Soviet experience in three years between 2008-11, eating the same food, wearing the same clothes, and obeying the same rules as Soviet citizens would have.

That's not going to be true. One of us has extensive experience of this, having lived and worked in the rubble of actually existing socialism for a decade or so. Yes, including time when it was still the Soviet Union. Including an episode when the mathematicians of a research institute in Siberia (in Academgorodok) travelled hundreds of kilometres following a rumour that some pigs were to be slaughtered. That being the only way to get any pork, possibly.

The food, clothing, even housing, will be what the plan, the system, said would be available. Rather than what was actually available. It may well have been that carrots were a kopek a kilo in the ration shops. But a film assuming that there would be carrots - at whatever price - in the ration shops is making a serious error.

There is a reason why Soviet factories paid so much attention to providing the workers with a dacha. Not because those who work by hand should have a country cottage for the cottage didn't exist. It was so there was a piece of land upon which the worker could grow a few vitamins, those the State could not and did not provide whatever the plan said.

We too think that allotments for those who want them are a pretty neat idea in Britain. But we'd think that absolute reliance upon them by the population for anything close to a balanced diet is an indictment of the food system.

The point about a film, an art installation, concerning the Soviet Union is that it should not be about what it was claimed it supplied but should show that actually existing socialism. You know, that one that, whatever the ration, didn't actually provide that housing, clothing nor food in any great quantity.

The difference between Stella Creasy and ourselves

Other than the obvious differences that is, she's an MP, we're not and so on. This tale of Wonga falling into administration being a useful example of that major underlying difference. We'd like to solve problems, Ms Creasy to appear to do so.

Wonga collapsed into administration yesterday as Britain’s biggest payday lender lost its battle to stay afloat after a wave of customer complaints.

It was indeed Stella Creasy who led the charge against the company and payday lending in general. The thing being, the problem isn't solved, not at all. As a part of the Federal Reserve has noted:

Except for the ten to twelve million people who use them every year, just about everybody hates payday loans.

Yes, that's an American number but the UK incidence will be about the same in proportion. As they go on to say:

Even though payday loan fees seem competitive, many reformers have advocated price caps. The Center for Responsible Lending (CRL), a nonprofit created by a credit union and a staunch foe of payday lending, has recommended capping annual rates at 36 percent “to spring the (debt) trap.” The CRL is technically correct, but only because a 36 percent cap eliminates payday loans altogether. If payday lenders earn normal profits when they charge $15 per $100 per two weeks, as the evidence suggests, they must surely lose money at $1.38 per $100 (equivalent to a 36 percent APR.) In fact, Pew Charitable Trusts (p. 20) notes that storefront payday lenders “are not found” in states with a 36 percent cap, and researcherstreat a 36 percent cap as an outright ban. In view of this, “36 percenters” may want to reconsider their position, unless of course their goal is to eliminate payday loans altogether. 

Again, specific numbers will be different but the general underlying point is the same. A price cap will, dependent upon its level, simply abolish the activity altogether. Or at least legal versions of it, Big Tom and his kneebreakers will revive themselves.

The difference? Ms. Creasy and her campaign have exited Wonga from the market. But there has been no replacement for those borrowing desires of all those customers, the problem has not been solved that is. How to provide the desired credit at a price thought reasonable? 

Our preferred solution? Those who think that the price was unreasonable set themselves up to provide short term credit in small amounts and do so at that price they consider moral. This would both drive Wonga and others out of business and also solve the problem, that unavailability of reasonably priced credit. 

It's possible that this won't work. That this form of credit is simply very expensive to provide. We're aware of a US attempt by the largest Thrift Store organisation and they found themselves charging 230% or so APR just to cover costs, no profit involved nor even return to capital.

Even so we disagree with what has been done. For the problem isn't solved - the provision of reasonably priced credit. All that has been banned is those voluntary transactions of credit at a price suppliers and consumers are willing to agree upon. We don't regard this as a victory - but Ms. Creasy and the like will. Which is something of a difference, isn't it? 

Of course we don't know what the AI algorithms do, that's the point of using them

We've yet another instance of the engineers' fallacy concerning the economy. Which is that we can understand it as a detailed level and therefore guide and even plan it. This is, as we all recognise, that Socialist Calculation debate all over again, the answer to which is that we can't, as in Hayek's The Pretence of Knowledge.

Here the fallacy comes from this insistence that we've got to know what all those algorithms are doing. For if we don't then we don't know what they're doing, do we? The answer to which is yes, quite, that's the point.

“In some ways we’ve lost agency. When programs pass into code and code passes into algorithms and then algorithms start to create new algorithms, it gets farther and farther from human agency. Software is released into a code universe which no one can fully understand.”

Entirely so, that's why we're using the algos. That real world out there is complex. Too much so for us to fully understand in detail. That's why planning doesn't work - the centre can never gain enough information in useful time to be able to process it. Which is exactly why we're using the algos, isn't it, just as we use markets to guide the economy.

The insistence that we've got to examine each and every algorithm, in order to see what it's doing, so that we can direct it, is exactly that socialist - or here that desire of engineers to, well, engineer everything - planning fallacy. We'll not be able to do it, doing it would be contrary to the very reason we're using the software in the first place.

Rather better for us to get on with what we do in that economy therefore. For the idea that we'll ultimately know it all is a delusion. 

Emissions testing fakery hasn't cost drivers €150 billion, nonsense

That the car manufacturers have been, to put it most delicately, specially preparing cars that go through the emissions tests is true. It is possible, but by no means certain, that this has cost drivers some amount of money. That the number is €150 billion is definitively untrue:

Drivers in Europe have paid €150bn more on fuel than they would have if their vehicles had performed as well on-the-road as in official laboratory-based tests, according to a new report.

Car companies have legally gamed official tests of fuel economy for many years by, for example, using very hard tyres during tests or taking out equipment to make cars lighter. The gap between test and actual performance has soared from 9% in 2000 to 42% today.

Analysts at research and campaign group Transport & Environment have now calculated that this difference cost motorists in Europe €150bn (£136bn) in extra fuel between 2000 and 2017. UK drivers paid €3.5bn more in 2017 alone, and a total of €24bn since 2000.

Consider the specific problem with diesel. It is possible to make a low NoX emissions diesel with good mpg, which is expensive. It is possible to make a good mpg cheap diesel which has higher NoX emissions. What is not available - physics - is a low NoX, high mpg, low cost, diesel. 

We're thus in swings and roundabouts territory, costs and benefits. Meeting the varied EU emissions tests costs money. So too with mileage. It may well be that consumers have paid more for more fuel. But how much less have they paid for cheaper engines, cheaper cars?  

If there are c. 15 million new car registrations a year, worth €20,000 each, then the market is €300 billion a year. Over 20 years, give or take, those emissions dodging cars only have to be 2.5% cheaper for it to be a wash for the consumer. And if it's 3% cheaper then they're gaining. Note that we're not insisting those numbers are correct, only ballpark for logical purposes.

In fact, we'd rather like to know exactly what those relative costs are, the size of the market, for that's the manner in which we can work out whether those mpg and emissions standards are actually worth it. Do they cost consumers more, in capital costs, than the fuel savings? Interesting question, no? What is gained on the swings of lower fuel consumption is lost on the roundabouts of higher purchase costs? 

Yes, excellent work there, now, what's the net effect?

We've a finding that air pollution damages the human intellect. Significant such is estimated to limit brain power equivalent to a year of education. No, no jokes about how being free of a year of British propagandistic education makes you smarter.

The important thing we need to know being not what is the effect of pollution, but what is the net effect of pollution having been created? 

Air pollution causes a “huge” reduction in intelligence, according to new research, indicating that the damage to society of toxic air is far deeper than the well-known impacts on physical health.

The research was conducted in China but is relevant across the world, with 95% of the global population breathing unsafe air. It found that high pollution levels led to significant drops in test scores in language and arithmetic, with the average impact equivalent to having lost a year of the person’s education.

“Polluted air can cause everyone to reduce their level of education by one year, which is huge,” said Xi Chen at Yale School of Public Health in the US, a member of the research team. “But we know the effect is worse for the elderly, especially those over 64, and for men, and for those with low education. If we calculate [the loss] for those, it may be a few years of education.”

We do rather think that, at times at least, the creation of pollution is net beneficial. The production or processing of food that enables people to not be stunted or brain damaged from malnutrition we might think adds to human intelligence. The creation of an economic surplus so that we've got an education system perhaps.

We've even empirical evidence. As nations have joined the soot spewing lower middle class we've seen IQ measurements rise, that Flynn Effect. That is, we know that, up to a point at least, more pollution  - as a result of what causes the pollution - is net beneficial.

The point here being that there are always costs as well as benefits to something and it's the net position we want to know about, not just the one or the other. The truth coming from this being that many a poor place out there would benefit from more pollution - or at least, the costs of the pollution would be less than the benefit coming from the activities which create the pollution. Pollution's a cost of people making a living, making a living is a benefit. Net is what matters, not just the cost of the pollution.

And yet we're thought to be the odd, delusional, ones

One of those less than delightful bits of cognitive dissonance on display here in The Guardian. The general view of that newspaper being that every problem in the world will be solved by the application of more government to whatever it is. We're then presented with the list of things that government really should be working upon:

Meanwhile, many people will wonder why there is such little interest in an array of massively important subjects. Labour is bound to sound off about the condition of the country more than the Tories, but even so, on both sides the no-shows will be obvious. Even after a summer that has flagged the realities of a warming planet in no end of vivid ways, there will probably be precious little attention paid to climate change. No one is likely to speak convincingly about how to radically change a benefits system that is broken beyond repair; nor about a schools system that is increasingly unfit for the future. The profound challenges presented by an ageing population will be skirted over, at best. The fact that councils are now colliding with bankruptcy might be mentioned, but is unlikely to lead to any deep discussion of how to change our system of local government.

Every economist on the planet has been insisting that a carbon tax is the correct and complete solution to climate change. The government's own report even stated so, the Stern Review going on to say that we should not have plans, targets, schemes, but a carbon tax. We've got plans, targets, schemes, and no carbon tax.

The benefits system is, by definition, a government incompetence and has been for many centuries now, at least since QE I. The schools are and have been government since the absorption (perhaps nationalisation) of the Church schools in the 19th century. Demography moves pretty slowly, we've known of the perils of an ageing population for decades now as we all age, that one day at a time, toward the grave. Local councils actually are government and obviously always have been.

So, our five major problems as elucidated by those who continually campaign for ever more government. Those five major problems entirely cocked by government itself, four of them for at least a century.

And yet we're the delusional ones for arguing that markets are, a little more than just occasionally, a pretty cool solution to our varied problems? 

Which is where the cognitive dissonance comes in. Given the actual track record of government in dealing with the outlined problems why do they think that government is the solution?