If not repairing things were more expensive then we'd repair things, wouldn't we?
There’s a current mania - sadly prevalent within government as well as elsewhere - to insist that we should be repairing things instead of just recycling the components when they break down. For example, white goods like fridges, dishwashers and the like.
We can think of two models here. One is that we’ve that steel box with bits in it and we build it so that each component can be replaced, repaired, so that the box staggers on as a whole for decades. Or, we could build so that the box as an integrated whole of bits. When one or more break we then reuse - recycle perhaps - by passing the steel box through a furnace and build a new one out of the melted metal. These are not entirely or of course, there’s a spectrum here. We’d probably not want to melt the entire box because of a grommet on the feet meaning it sits wonky on the floor. We’d probably not want to repair if a falling i-beam had flattened it all. We’re thus talking about which tendency we’d prefer, a little bit more to the repair end, a little more to the junk and recycle.
The current contention is that we must move to the more repair end of our spectrum. But why?
But if you’ve ever had a sense that things are falling apart faster than they used to, invariably just after the warranty runs out, then you may have a point. A 2015 study showed that between 2004 and 2012, the proportion of household appliances that died within five years of purchase had doubled. This speeded-up cycle of stuff breaking down, being chucked away and having to be replaced isn’t just expensive,…
But is it expensive? Not obviously so, no:
In 1981, the 24-inch built-in dishwasher pictured above from a 1981 Wards Christmas catalog sold for $359.88. The average hourly manufacturing wage then was $7.42, meaning that it would have taken 48.5 hours of work at the average hourly wage for a typical factory worker to earn enough income 32 years ago to purchase the dishwasher above.
The new Kenmore 24-inch built-in dishwasher pictured above is currently listed on the Sears website for sale at $539.99. At the current average hourly wage of $20.26 for production workers, the average factory worker today would only have to work 26.7 hours to earn enough pre-tax income to buy today’s energy-efficient dishwasher, which is only a little more than one-half of the 48.5 hour time-cost for the 1981 model.
White goods are becoming cheaper by the only measure that actually matters, the labour we must perform to be able to gain access to them. And they’re becoming cheaper in that other measure of real prices, post-inflation adjustment - US CPI rose 176% between 1981 and 2018. It’s not just that our incomes are rising relative to prices, it’s that real prices are falling too.
Falling prices do indeed indicate that we’re using fewer resources to make these things over time. It’s also a flat rejection of the idea that this is all becoming more expensive in at least this one sense.
But there’s another thing we should look at too. What is the cost of the labour to repair something? Our average cost of labour has risen from that $7-ish an hour to $20-ish without the inflation adjustment - nominal prices have moved more than inflation note, meaning that labour has really become more expensive. This changes the repair to recycle costs, no? 10 hours of labour to repair has gone from $70 on a $360 machine to $200 on a $540 one. At some point in this process we will be using fewer resources to melt and do over our steel box rather than attempt to repair it.
Now run the same process over the repair or recycle decision for a computer. A 1981 model against a 2018 one. The decision is more obvious there.
At which point we need a decision making process. How are we to calculate through these numbers to decide upon which? Obviously enough the price system, it’s the only one we’ve got which can do it for us. But when we do look at this we find that we’re already doing so. People do resole £500 pairs of handmade shoes and don’t £10 trainers. People do repair £2,000 ovens and don’t £30 microwaves. On the grounds that some things are not cheaper to repair, others are.
Oh, and we’ve also proven that the statement that not repairing is more expensive isn’t true - for a reasonable subset of all goods that is. Thus an insistence that we must repair more in order to save isn’t true, is it?
Doesn't this just put the cat amongst the pigeons over Grammar Schools?
Apparently grammar schools are rather more efficient at doing something many insist is highly desirable. That would seem to be a point in favour of grammar schools but that’s not how it’s going to play out, quite obviously. Non-comprehensive education is a thing of the very Devil to all too many. Therefore some reason will be - will have to be - found to explain to us all why this isn’t a good idea:
Grammar schools are sending more black and minority ethnic (BME) students to Cambridge University than all the other state schools in the country combined, a new analysis reveals.
Children from the most disadvantaged 20 per cent of households are more than twice as likely to get a place at Oxford or Cambridge if they live in an area with grammar schools, according to the report.
The paper, published by the Higher Education Policy Institute (Hepi), examines the impact of selective schooling on state educated pupils’ progression to top universities.
Iain Mansfield, a former senior civil servant who wrote the report, said the figures are a "shocking indictment" on the country's 1,849 comprehensive schools.
His analysis found that BME pupils are more than five times as likely to progress to Oxford or Cambridge if they live in a selective area rather than a non-selective area. Other data shows that more than a third (39 per cent) of pupils in grammar school areas progress to prestigious universities, compared to just 23 per cent in comprehensive areas.
The gross numbers cannot be explained by there being a higher BME population in the selective areas - rather the opposite is true in fact.
We are continually told that BME students - people of all ages in fact - are oppressed by our institutionally racist system. Seems that selective schooling aids in overcoming this. So, what’s the explanation going to be?
For there will have to be some refutation. The British left has as articles of faith both that insistence on the racism of our society and also that comprehensive schooling benefits the less favoured. Somehow this evidence that at least one of those ideas must be wrong will have to be countered.
The Mild West: Terror or Tranquil?
In Mel Brook’s 1974 film ‘Blazing Saddles’ Sheriff Bart’s farewell to the townspeople of Rockridge ended with “all right, you caught me. Speaking the plain truth is getting pretty damn dull around here”. Not only are his words an excellent allegory for politics today, they excellently satirise the historical inaccuracies surrounding the Old West of the 19th century which, in the Hayekian legal tradition, had a relatively peaceful society.
Sergio Leone, the director credited as the inventor of the Spaghetti Western genre, described it as a society where ‘life has no value’. The old American frontier is notorious for its fiendish and violent way of life, mainly due to such distortions created by the film industry. This stereotype was popularised by American folklore, music and dime novels published in the latter half of the 19th century with prominent figures such as ‘Buffalo Bill Cody’ but taking a look at the historical evidence paints a different picture.
Bayard Taylor, contemporaneous travel author, noted “the punctuality with which debts were paid, and the general confidence which men were obliged to place, perforce, in each other’s honesty.” However, Dodge City, a place thought of as the biggest and most rambunctious town of the Wild West experienced a grand total of 5 deaths in 1878, its worst year for homicides. Take one of the most famous gunfights; the ‘O.K. Corral’ shoot-out. It lasted for a total of 60 seconds and resulted in 3 deaths. Though it was 5 and 3 deaths too many, you were still more likely to be gunned down in Victorian London than in the Wild West. (1)
The Old West can be best explained by Hayekian legal institutions where laws were grown organically, not manufactured. It is a process analogous to the market’s production of prices arising from voluntary interactions between individuals using information they have available and producing information in the process. Over time, through competitive jurisdictions, groups of individuals observe this information, develop expectations about the results of particular interactions, and plan their behavior accordingly. Thus this system resolves disputes according to the ex ante rather than ex post expectations of the parties.
They effectively developed unofficial legal institutions to fill the vacuum created by the lack of a state. These involved cattle associations with clear land ownership boundaries, private enforcement of property rights and even enforced codes of permissible moral behaviour. It resulted in a competitive environment in which different ranches imposed different codes of conduct on cowboys, and took different approaches toward the introduction of farming into the land.
The gold mining districts even agreed on a constitution, defining their borders, allocating claims and limiting claim size. Enforcement was done through various dispute resolution processes, amongst them the infamous vigilance committees: a response to the lack of state-provided legal services. They overcame free rider problems in the private provision of legal services by enabling community members to band together against threats and take steps to defend themselves.
Whilst the frontier was a harsh place where social capital lay relatively thin on the ground, Hayekian legal institutions flourished. Customary legal institutions not only flourished in but successfully adapted to conditions across the West. This case is yet another testament to the fact that Leviathan can be avoided.
(1) Marriott, E. (2011). Bad history - How we got the past wrong.
When the lights went out
In the early 1970s, power blackouts were an occasional feature as militant unions of nationalized industries used industrial muscle to force governments to capitulate to their wage demands. The National Union of Mineworkers would picket the power stations to prevent coal and oil reaching them, supported by secondary action from the National Union of Railwaymen, so power cuts were implemented.
In December 1970 hospitals were forced to function on batteries and candles during a "work-to-rule" strike. The most damaging power cuts came in 1973, when an oil shock from the Middle East coincided with a miners’ strike. Petrol was rationed, there was a 50mph speed limit on roads, and there was a heating limit of 63F (17C) in office and commercial premises and a reduction in street lighting. A three-day working week was introduced, and a 10.30pm shutdown for TV. The electricity often went off, leaving people with no heat or light.
Naturally many people improvised. I bought a small calor gas stove and a calor gas lamp, both powered by little cylinders of “Camping Gaz.” When the power went off, it was still possible to boil water for tea or coffee and to cook, and there was enough light to avoid total darkness.
When my colleagues and I returned to the UK to found the Adam Smith Institute, the unions were still rampant, so the portable stove and lantern were transferred to London to cope with any power cuts. After the famous “Winter of Discontent” of mass strike action in late 1978 and early 1979, Mrs Thatcher was elected, and introduced measures that gradually brought the unions within the law. There were no more power cuts.
Forty years later, we have just taken the dust-stained stove and lamp from the cupboard and cleaned them up in case there is a Jeremy Corbyn government. Astonishingly both still work, which is just as well, because if he returns powers to the unions, they will probably both be needed.
Madsen Moment — Parmenides & Heraclitus
Dr Pirie starts the New Year with a look back all the way to Ancient Greece, asking: do we embrace churn and change, or seek stolified stagnation?
How to get the renewable electricity market right
There’s always the hope that someone, somewhere, will finally stumble across the correct method of dealing with and even measuring this renewable electricity stuff. It appearing that we’ve a danger that it will be our own UK electricity market which does so. The end result will be that we’ll see the true value of this generation - perhaps something that not all will be happy about:
Households with solar panels are to get a guaranteed payment for excess electricity they export to the grid – but there will be a hiatus when people are expected to give it away for free.
Energy minister Claire Perry said on Tuesday she would legislate for a new market that will make energy firms compete to offer solar homes the best price for any unused energy they export.
The marketplace would replace a scheme that pays households about 5p for each unit of solar electricity they export, which is paid for by all energy billpayers but will close for new applicants on 31 March.
Solar households expected to give away power to energy firms
Read more
Energy suppliers with more than 250,000 customers will be mandated to offer a “smart export guarantee” tariff, with solar households expected to shop around for the best rate.
We’re not quite there yet of course as what we would really want is a time variable tariff to deal with intermittentcy. But, baby steps and all that.
What, actually, is the electricity produced by such solar panels worth? No, not ought it to be worth, not would some like it to be worth, but what is it that people will actually pay for it? Only when we know that number can we find out whether the installations are worth their cost - obviously enough, for an investment in anything is only worth the return from it.
Our own suspicion is that the market price will turn out to be very much lower than the current assumptions but we’re entirely willing to be surprised on that.
The NHS error - Theresa May thinks GPs should have Skype appointments
We’re entirely open to the idea that patients should see their general practitioners by Skype. Also that others shouldn’t, that a telephone call might work, that mobiles be used to send text messages reminding of an appointment and so on. Sure, technology changes and the methods we use to achieve certain goals should righteously move with such times. However, this headline tells us what is in fact wrong with the National Health Service:
Theresa May wants digital consultations to become NHS norm in order to give patients greater control
Bully for Theresa really.
The argument made about the NHS is that health care is really important therefore it should be under political control. The Prime Minister of the day is and should be judged on how that NHS is doing. Which is exactly our argument against this system. Or perhaps this specific argument against this system.
A geography graduate, many levels up and removed from the front line of the actual work, is not the correct person to be deciding upon how individuals see their doctors. Central planning isn’t the right way as a concept. What we need is a suck it and see system. Maybe this new technology will indeed be advantageous in application. Maybe it won’t be. Until someone starts to do it we’ll not know - there being too may potentially confounding factors for us to be able to tell without that real world experience.
This is exactly what market processes do for us, sort through that technological envelope of what can and could be done in order to find those solutions which are advantageous. The most important part being to enable us to reject those which aren’t.
That the PM announces how GPs should interact with their patients is exactly the problem with that NHS system. You know, that NHS which ranks near last among rich world health care systems in treating “mortality amenable to health care”. Or, as we might colloquially put it, curing people?
As Facebook shows, this planning stuff is difficult
There’s an amusement in that it’s the Observer which retails this story to us. It’s about the problems that Facebook has in working out might be allowable to say on its site and what might not be. The point being that vast resources are being thrown at the problem and it’s not really being solved:
Two weeks ago, the New York Times was leaked 1,400 pages from the rulebooks that the company’s moderators are trying to follow as they police the stuff that flows through its servers.
Some rulebook there.
An examination of the leaked files, says the NYT, “revealed numerous gaps, biases and outright errors. As Facebook employees grope for the right answers, they have allowed extremist language to flourish in some countries while censoring mainstream speech in others.” Moderators were instructed, for example, to remove fundraising appeals for volcano victims in Indonesia because a co-sponsor of the drive was on Facebook’s internal list of banned groups; a paperwork error allowed a prominent extremist group in Myanmar, accused of fomenting genocide, to stay on the platform for months. And there was lots more in this vein.
Complicated.
Some numbers might help to put this in context. Facebook currently has 2.27bn monthly active users worldwide. Every 60 seconds,510,000 comments are posted, 293,000 statuses are updated and 136,000 photos are uploaded to the platform.
The conclusion?
To a cybernetician, though, it is merely confirmation that Facebook is no longer a viable system.
The whole thing doesn’t work because the central authorities do not and cannot have either the information or the rules to be able to plan and manage things centrally.
Now expand that out to the entire series of economic interactions between 7 billion people, not just the internet scribblings of a minority of them. The idea of the centre being able to even monitor, let alone plan, all of that is just not going to work, is it?
The truth here being that:
Way back in the 1950s, a pioneering British cybernetician, W Ross Ashby, proposed a fundamental law of dynamic systems. In his book An Introduction to Cybernetics, he formulated his law of requisite variety, which defines “the minimum number of states necessary for a controller to control a system of a given number of states”. In plain English, it boils down to this: for a system to be viable, it has to be able to absorb or cope with the complexity of its environment. And there are basically only two ways of achieving viability in those terms: either the system manages to control (or reduce) the variety of its environment, or it has to increase its internal capacity (its “variety”) to match what is being thrown at it from the environment.
That second isn’t possible therefore a planned economy could only be a simple economy. And the thing is that it’s the complexity itself which produces the riches from an economy. Thus simple economies are poor ones. We can thus be planned and poor or unplanned and at least possibly rich. Choose wisely.
Venezuela Campaign: Workers betrayed
“I stake my future with the working class,” boasted Hugo Chavez, as he set out his plans to transform the Venezuelan economy.
The reality has turned out to be very different. An astonishing story recently came to light: hundreds of laid-off Venezuelan workers are still turning up to work in order to protect their workplace from looters. The factory where they worked, owned by the Irish company Smurfit, had been seized on spurious grounds by the Maduro regime. The workers are desperate, for anyone – other than the regime – to restart operations.
“Help, we need a boss here. We’re desperate,” said Ramón Mendoza, who has been a forestry division worker for 17 years. “We’re so scared because we now know that all the government does is destroy everything, every business.”
The closure of Smurfit’s packaging plant not only made 1,600 workers unemployed but also damaged other companies, who now lack vital materials. According to Carlos Rodriguez a union leader at Colgate Palmolive, production at one its plants has been halted because of an absence of boxes to package soaps and detergents.
The 1,600 former employees of Smurfit have lost more than their jobs. Smurfit had been providing interest-free loans for their houses and free education for their children. Smurfit used to finance the Agricultural Technical School in nearby Acarigua, where 200 children in extreme poverty could receive an education, accommodation and hot meals. That school has now closed, and the teachers are unemployed. According to Maria Vielma, the school’s psychologist, “This used to be a family. I just don’t have words right now. We have a government that is dedicated to destroying, not constructing.”
That feeling of betrayal has spread throughout all sectors of the economy. After the destruction of the Venezuelan cement industry under state ownership, the general secretary of the cement workers’ union said this to a rally of protesting cement workers:
“[W]hen the government took control of the facilities, it did so under the premise that it would improve the quality of life of the workers; that the companies would be self-sustaining; that they would guarantee the product at fair prices to the people; and that they would use the least harmful mechanisms possible for the environment, neighbours & workers. However, the opposite has happened….they owe labour liabilities and have a collective contract that does not guarantee benefits for the working masses…the cement is only available at speculative prices, and pollution levels are increasing.”
Public sector workers feel particularly betrayed by the regime. While Chavez had focussed on increasing public sector employment, the regime can now no longer afford to pay its workers. Collective bargaining agreements have been torn up and a flat payment for all public sector workers imposed, all without consulting the workers or their union leaders.
Iván Freites, head of the United Federation of Oil Workers of Venezuela (Futpv), denounced the government’s action as one that “violates the National Constitution and the Framework Law on Labour which is the basis for collective bargaining agreements.”
One worker at the nationalised CANTV telecommunications company said: “It makes no sense that someone who’s just starting at the company gets the same as someone with 15 years here. Now the janitor, the manager, the secretary, everyone earns the same. Nonsense. I can’t complain to my bosses, because they’re screwed too.”
Moreover the regime frequently interferes in union elections and undermines workers’ representatives. For workers, the Chavista regime has truly been a disaster. Not only is the Government rolling back rights acquired by the unions over many decades, but many employees are losing their jobs. No wonder that over 3 million Venezuelans have already fled the country. As one worker at the state oil company said recently, "Now what we ask each other is: 'When are you leaving and for where?”
More information on the Venezuela Campaign can be found on their website.
Who should we blame for the British level of illiteracy?
That large numbers of we British are functionally illiterate is not a good look nor a decent outcome. The point being that we’ve got to work out what is going wrong, wherever it is in the system, so that we can fix it. If it can be fixed of course, there is always going to be some irreducible minimum number of people who simply cannot grasp such complicated concepts. That’s a sadness of the human condition to be sure but something we’ve got to accept.
However, the claim is that we’re well above that level:
Millions of British adults are functionally illiterate but the subject is ignored because it is not a “fashionable” cause, according to the most powerful woman in publishing.
Dame Gail Rebuck founded the Quick Reads scheme, which distributes specially-written books designed to encourage adults to discover the joy of reading.
The scheme began in 2005 and attracted some of the country’s best-selling authors, including Joanna Trollope, Adele Parks and Andy McNab. But this year it faced closure after failing to find a corporate sponsor and was only saved after Jojo Moyes, the writer, stepped in with £120,000 of her own money.
“It’s a huge sum of money but not to a corporate sponsor,” Dame Gail told the Telegraph. “But the point is, it’s not fashionable, is it? You can talk about little kids reading - we can all relate to that, we all want children to read books, it’s lovely.
“But adults not reading? Or adults in the workplace not having enough literacy to fill in a form, to work on a computer, to be promoted? That’s not something that people like to talk about. But it exists.”
We think that talking about it should become very much more fashionable, we agree there. But then that’s because we do so like to play the boy’s part in the Emperor’s clothes story.
Currently the State insists that each and every child be placed into its care for some 30, 35 hours a week for some 13 years - it does now at least with the rise in the school leaving age. That’s many thousands of hours of instruction time and the claim is being made that this doesn’t result in general literacy.
We tend to think that thousands of hours of instruction time is enough to ensure general literacy. That it doesn’t might just be the State not being able to do things. Could be that the mechanism has been taken over by ideologues insisting upon teaching something else - how to be an ecowarrior perhaps, or be nice to people. Might even be political fashion as with whole words and teaching kiddies their letters.
But we will insist that this is where the failure is. The State has spent the last century insisting upon many years of exclusive access to children and the end result is that millions of the system’s graduates are functionally illiterate. That system’s not doing what we pay for it to be doing - that’s where the solution will be found, where the reform needs to be.