The US leaving the Paris Accord Just doesn't matter

Actually, we can argue that whether anyone signs up or doesn't to the Paris Accord isn't a matter of importance. For here's some talking about the effects of the US not remaining:

Existing climate efforts expected to keep US goals on track

More specifically:

The momentum of climate change efforts and the affordability of cleaner fuels will keep the United States moving toward its goals of cutting emissions despite the Trump administration's withdrawal from the Paris global accord, business and government leaders in a growing alliance said.

In detail:

The momentum of existing climate-change efforts and the availability natural gas, wind and solar power mean those loyal to the Paris accord in the U.S. will have an easier time, with emissions expected to fall overall for years, said Robert Perciasepe with the Center for Climate and Energy Solutions, who worked with Bloomberg's group on the climate pledge.

Some studies suggest the United States will cut emissions as much as 19 percent by 2025 if it simply moves forward as is, he said. That's not far from former President Barack Obama's goals for a reduction of 25 to 28 percent as part of the Paris accord, Perciasepe said.

If it doesn't matter much whether the US is in or out of Paris then Paris itself doesn't matter very much, does it?

Which underlines a point we continually make. The world has already done rather a lot to create the possibility of reduced emissions. Absolutely all of the predictions of future emissions - such as this one in The Guardian - resolutely ignore what has already been done. Those charts you see going off into infinity are ignoring the manner in which we're already closing or have closed coal stations, we've brought solar power down in price by an order of magnitude, people are already buying electric cars and so on and on.

Leave aside the basic contentions for a moment and consider this important detail. The predictions of total disaster are all based upon our doing nothing at all. Yet we've done a lot, we are already quite obviously not on the higher emissions pathways. Thus the predictions of total doom are simply wrong for we've already done quite a lot about it.

Hey, maybe we need to do more, maybe we don't, but we should at least start from the current position, not the predictions based upon our having done nothing for 20 years, for we've not done nothing in those decades.

Free market welfare: not this!

Out of all the think tanks in the world, probably the one that has the closest "fit" with the ASI is the Niskanen Centre in Washington DC. They share our pragmatic, compassionate, and neoliberal outlook, proposing liberal market-orientated policies that raise the wealth, and welfare, of the majority. But a recent article of theirs by Sam Hammond clarifies a major disagreement that nevertheless exists between our approaches.

Hammond, a friendly acquaintance and poverty researcher at Niskanen, makes the case for a "free market welfare system", asking "what is the welfare state for". So far, so good. And we do start with a lot in common. Hammond is right that spending and regulation are not necessarily intertwined, and that reducing regulation should be more of a priority for market liberals. He is right that redistribution can be a compensatory mechanism, paid out of the massive gains from free trade and relaxed immigration policies, to the minority who lose out. And he is right that, historically, the social insurance systems he describes, were not justified so much by their redistributive functions, but as social insurance systems.

But there is also a lot to disagree with.

Social Security retirement benefits, for example, represent a transfer from people who die young to those who live a long, long life — a structure that may even be mildly regressive in its first-order effects. Every year, thousands of millionaires collect unemployment insurance between gigs, having paid an outsize share of payroll taxes. And then there are infrastructure, policing, national defense, and all the other things the state provides out of general revenue, not due to fairness, but because they are public goods.

If Heath is right, the normative logic of the social safety net and the market are not at all in tension. States provide public goods for the very same win-win efficiency reasons that they enforce property rights and a robust legal system (public goods in their own right). We all benefit from things like national defense, but high transaction costs prevent us from organizing to provide them privately. We also all stand to benefit from the ability to insure against economic risks like the loss of a job — millionaires have bills to pay, too — even when information asymmetries make private-sector unemployment insurance a challenge. Too much insurance has costs, as well, like inducing overly risky behavior. Yet such “moral hazards” are a generic feature of all insurance, and an inevitable part of making trade-offs.

The upshot is that the welfare state is better thought of as a kind of democratic mutual insurance scheme rather than, as it is often portrayed, a nationalized form of private charity or a tool to soak the rich. We fail to realize this because the ex ante win-win nature of social insurance (and, indeed, insurance more generally) is obscured by the ex post win-lose transfer to the recipient. The Swedes’ concept of “the people’s insurance,” which developed alongside the construction of their own formidable welfare state, shows that this notion is not even foreign to the places that strong egalitarians look up to.

Firstly, the fact that some aspects of the benefits system are, considered alone, regressive, does not tell us much, because the overall system is highly progressive. Just look how the UK GINI coefficient shifts when you switch from market income and income after taxes and transfers. The UK government now does 30% of its spending directly on alleviating poverty and inequality, and most of the rest is in-kind benefits that achieve a similar thing. The US isn't much different. The fact that historically these systems were justified in the language of reciprocity and efficiency doesn't change this.

Secondly, there is a strange slide between public goods and "public goods". A public good is nonrival and nonexcludable, or close to. The combination of these two features, according to solid Econ101 principles, means it will be underprovided by the market. National defence is a very solid example. Defending me, by defending the country, doesn't defend my compatriots any less, and there is only rarely any way of excluding citizens from the benefits of the national defence. Lighthouses are another classic example. Vaccination for herd immunity is another. And clean air may be yet another.

But it's not clear at all that most policing is a public good: most of its features are straightforwardly rival and excludable. Maybe the government should provide policing for areas that can't afford it, and maybe it should subsidise it because some elements (deterrence) do have public good features. But at least two recent papers show private US police forces massively outperforming US government police.

Infrastructure only very rarely has public good features (roads, rail, cables, pipes, wires, and even electromagnetic spectrum are always excludable, and usually rival), which is why the UK was able to fund a gigantic railway network privately, as were most Western countries. Japan does it that way now. The UK also expanded its turnpike (toll road) network that way. And coal. And electricity. And so on.

Finally, social insurance certainly isn't a public good! My drawing from a fund is highly rival to yours, and highly excludable. This is why it's, historically, been quite easy to insure against the mishaps he worries about—if you have enough money. Even in the 19th century workers who were actually able to work could get unemployment, healthcare, and life insurance through friendly societies. Divorce used to be insured against with binding prenuptial agreements and tough marriage contractsboth scrapped. And millionaires insure against rent and bills risk by buying their house and saving money.

The problem was that this left a lot of people without. Some can't work at all. Some don't earn enough to support themselves. Some don't have parents. And some don't have what we consider enough for a decent life. The market can provide perfectly well for the majority, but, for others, state supplementation is necessary to avoid destitution, and allow freedom. There is a real cost to those paying huge fractions in, but it's outweighed by the benefit to those receiving. That's what we at the ASI call free market welfare.

Why Corbyn's wave of youth support may not carry him to Downing Street

Much has been said and criticised about the "magic money tree" Corybn will have to unearth to make Labour's overambitious economic plan work. But a more important aspect of Corbyn's policies is his appeal to under 25s, an age group who feel that they have long been alienated by mainstream politics.

Historically this has been the group with the lowest voting turnout, with just 58% of 18-24 voting in the 2015 general election according to British Election Study (BES). But this fraction has been highly variable, rising from a 52% turnout in 2010 and just 38% in 2005. A study conducted by Matt Henn and Nick Foard concluded that whilst young people are firmly absorbed in political ideas, they "feel considerably disenchanted by their recent experiences of formal politics, and remain relatively disengaged from the political process and from democratic institutions and players". If Corbyn is able to overcome this disenchantment then, coupled with Corbyn's seductive policies aimed at the younger voter—the abolition of university fees, a possible write-off of existing student debt, and rent controls—he could see a wave of support from the so-called 'Snowflake generation'.

Corbyn has resonated with the young voter, partly through gimmicks such as meeting with popular grime artists, appearing at a Libertines gig, as well as his youth-targeting policies. Many 18-24s see Corbyn as a rare breed—a genuinely compassionate politician, eager to spearhead positive change for the youth. Whilst the youth are often branded as naive and impressionable, the flipside is that they can also provide a boisterous base for a social media campaign, not to mention memes. His perceived honesty too is another factor that seems to play well with the younger voter, many of whom may feel disenchanted and embittered by Theresa May's inability to answer a question directly, not to mention her association with Brexit (18-24s were strongly in favour of Remain), and austerity.

However, it does not seem like Corbyn will surf this tidal wave of youth support to Number 10, his resonance with the young is matched by the complete opposite reaction from the older voter. This focus on the youth vote may well prove to be an error—older voters have consistently proven to be the most likely to vote. What's more, the youth vote tends to be concentrated in areas that are overwhelmingly Labour anyway, with nine out of the 10 seats where young voters are the greatest share of the population, such as Sheffield Central and Cardiff Central, already won by Labour in 2015. Piling up extra votes in safe Labour seats is not the route to a Corbyn majority.

Ultimately, despite Corbyn's attempts to actively incorporate the younger voters as a major breeding ground of partisan Labour support, disenchantment and dissatisfaction towards mainstream politics, coupled with alienation of the older voter, will make it troublesome for Corybn to place so many eggs into the younger voter basket.

Tax avoidance? Or just tax competition?

Labour and the Greens have both given rousing speeches this week about how they are going to equalise society’s wealth stratifications by clamping down on tax avoidance. In declaring this, they’ve just set themselves a task that’s literally impossible to accomplish, because technically there is no such thing as tax avoidance that can be used to recoup losses.

In a society with tax laws, there are only two states: the state of paying tax and the state of evading tax. Taxpayers operate within the orbit of the law, and tax evaders break the law by not paying the taxes to which the law compels them. There is no third option called tax avoidance, because every action either places you in the category of a legal taxpayer or an illegal tax evader – you are either complying with the law or breaking it. 

What people call ‘tax avoidance’ is really only businesses being sensitive to tax competition – that is, the different tax rates set by each country and the ways in which competition helps drive down taxes elsewhere. Tax competition helps keep governments in check in not raising taxes too much, lest they lose business investments to other countries, which ultimately reduces the amount of tax they collect domestically.

People who are said to be guilty of ‘tax avoidance’ are simply people that look to invest and trade in more tax competitive countries. What they are doing is perfectly rational, and therefore politicians that wish to clamp down on tax avoidance are ostensibly trying to tax rationality – which is a bad thing, not just because if you tax something you generally get less of it, but also because tax competition is a benefit to everyone because it helps keeps our taxes lower and curbs politicians’ enthusiasm for making imprudent decisions centred on high taxes and excessive public spending.

Moreover, because this thing called ‘tax avoidance’ doesn’t exist in any meaningful definitional sense, there is no practical way to legislatively clamp down on it. Ironically, the best way to tackle the issue of untaxed income earned outside of the UK would be to lower UK taxes to a more competitive rate, whereby more investment and trade occurs in the UK, and more tax revenue is collected because of it.


A small note on where it's all going wrong

If we're to have useful conversations, discussions, about what the economy is, what's happening in it, where it's going, then we do need to have some generally accepted meaning of words with which to discuss such matters. For example, if we wish to discuss the gig economy then we need to understand why it has arisen and to agree upon the words we're going to use to describe it. At which point:

Too many people still talk about the casualisation of work as an innovation, as an impersonal, technological and irresistible force to which we must adapt if humanity is to continue its march into the future. Instead of a reversion to more exploitative form of labour relations, driven by the wealthy people who own and operate companies, we are told the “gig economy” is merely the inevitable outcome of inventions like the smartphone.

Nobody does say that the gig economy is inevitable. Not even that it's an inevitable outcome of the existence of the smartphone. But we must all agree that it is an innovation.

Further, we really must all agree what it is an innovation about. Those rules about secure employment, about sick pay, holiday, pensions, time off in lieu and all that are the very things that the gig economy is innovating around.

The reason we must all agree with the basics is that without doing so we'll not grasp the important truth here. Those labour rights and payments are costs. Perhaps they're worthwhile costs, perhaps they're essential ones, but they are indeed costs. And as we can see from what is happening out there they're costs that both employers and workers seem entirely happy to bypass when given the chance. Thus the real lesson of the gig economy, those costs, given that so many are entirely happy to side step them, may not actually be worthwhile. Or they may be, entirely possibly, but our discussion has to centre upon the cost benefit analysis of them.

Markets do indeed innovate around blockages to them. And one useful indicator of where things really are going wrong is that it's the Financial Times, of all papers, which doesn't grasp that.

Short termism n: electric boogaloo

Lots of people think businesses are short termist, especially nowadays, and that this is one reason why productivity growth seems a bit slower now, especially since the crisis.

I've always had trouble understanding the mechanism. In their view firms can either do more investment and raise total output and net income over time, or invest less and divest more money to shareholders through dividends. In this view society as a whole would be better off if we consumed less of this wealth and invested more of it. But short-termist fund managers and other shareholder advocates are pressuring firms explicitly and implicitly to do less investment and pay more out.

But even if a fund manager was a short-termist this wouldn't make sense. There are two main ways you can make money from shares: you can get money in dividends or you can sell some of your holdings on the market. Their very hypothesis holds that taking too much out in dividends damages firms, and does so obviously, in the long run. So it must be driving the price of the shares they hold down, or preventing them from rising as they otherwise would. This is a straightforward implication of their argument: if the investments are worth doing then they have a net present value above 1. Each £1 you invest would create more than £1 of firm value.

So short-termist shareholders have a simple decision: do £1 of investment, sell £1 of your shares, and net a profit—the amount that that investment adds to the firm's value in net present value; or take that £1 out in dividends. Even the short-termist does the investment. The argument doesn't make sense.

There are ways you can make the argument make sense. If markets don't price assets well, then maybe shareholders can strip firms and other suckers will still buy them, even though they've destroyed all this value. It doesn't seem plausible to me that top asset managers can both be worried about short termism and endlessly willing to suck it up and buy firms that self-sabotage by underinvesting. But even if this is the story, it's a different story. Excessive long-termism would cause an identical problem in a systematic market inefficiency story. So would any error. The short-termism story needs something like market efficiency to be a short-termism story.

Another way is that wealth holders and those they get to do investment for them are systematically too myopic relative to society as a whole. Investments are profitable if they have a net present value above one—that means that the cost now is outweighed by the returns later, discounted by the social discount rate, which we take to be proxied by the real interest rate. But maybe the real interest rate is not a good proxy for the social discount rate—we should be investing in much more marginal projects but those with money want to spend it, not invest it in stocks or lend it out via banks.

Does this sound realistic? It is widely accepted that the rich consume less of their income and wealth than the less well off. The world is widely perceived to have a "glut" of savings—not a dearth!

But hey, maybe firms are short-termist anyway, even if this channel doesn't work as an explanation why. A new paper (pdf) from Steven Kaplan at Chicago Booth questions this, firstly showing how short-termism worries have been pervasive since the 70s; and secondly attempting to provide some hard evidence against the hypothesis.

Some of his arguments against the short-termism hypothesis don't, to me, hold water. For example, high corporate profits now probably do suggest that firms weren't short-termist 10, 20, and 30 years ago. But it doesn't imply they're not short-termist now. If you feed your chickens the seed corn you can feed a huge flock this year, but you'll get your comeuppance soon enough.

And rising globalisation and falling worldwide poverty could just as much indicate myopia, in my view, as long-sightedness. Maybe American workers have higher wages, but maybe they also make higher quality products, you gain reputation capital by employing them, and maybe they're more loyal. These are popular anti-globalisation claims and need to be addressed with more granular info.

But some of Kaplan's arguments are very powerful. Kaplan points out that some investors, such as venture capitalists, are clearly not short termist, and put away money without any control or returns for 5, 10, or 20 years. But these investors are neither a growing share of the market, nor earn abnormally high returns—as they would if the rest of the market was, through short-termism, leaving profit opportunities on the table. And neither does private equity, the very function of which is to get around the shareholder-orientation and complicated structures of the public firm.

Kaplan also notes that US firms are less likely to be profitable when they go public. But this is precisely the opposite of what shareholder and firm short-termism predicts! That theory would expect higher profits, through investing less for the future and taking gains now—the eating of the seed corn I mention above. He also points to big, widely-publicised examples of firms whose investors have been willing to live with negative or minimally positive cash flows for years or decades: the 90s internet boom, Amazon today, biotech, and frackers, as well as many of the VC-funded tech startups like Uber. Is it possible to say both that Snapchat investors are crazy to value it so highly, and that they only care about short-term returns? I don't think so.

Short-termism is a perennial charge laid at capitalism's door. But the arguments don't work in theory, and nor they don't work in practice.

If you outlaw encryption, only outlaws will have encryption

There’s a dangerous little idea floating around about the encryption debate, that it is a battle between realists who want to protect us and privacy-obsessed geeks who don’t want government messing with their toys. 

This is utterly, hopelessly wrong. The encryption debate is not really about civil liberties at all. If the issue really was just whether GCHQ should be allowed to look at your messages while looking for jihadis planning murder, you’d get much less resistance from people like us. Privacy is an important freedom, but so is the freedom not to be murdered on a night out. We need to compromise.

No, the real issue here is that there is absolutely nothing the government can do to stop jihadis from keeping their communications secret, no matter what laws they pass. Encryption is simply not something you can stop people who are willing to break the law from using.

You can, of course, ban Facebook and Whatsapp from using end-to-end encryption, which encrypts messages in such a way that only the two users can decrypt and read them. (This, by the way, is why news reports about Whatsapp “refusing” to disclose dead terrorists’ communications are nonsense – they have no more way of decrypting them than you or I do.)

You can force Apple and Microsoft to put backdoors into their software, which only government agents can use to pry into your activity. Only government agents, that is, until they’re discovered by the guys behind the WannaCry ransomware hack that brought the NHS down for a few days. When you have a backdoor you effectively turn a system with two points of vulnerability into one with three, this extra one being a shared vulnerability that puts all users of a service at risk. (Let’s assume for argument’s sake that these firms actually comply with HM Government instead of quitting the UK altogether, which is far from certain.) 

That is to say you can make it so that no law-abiding person can use encryption without breaking the law.

But you cannot stop people who are determined to use encryption from doing so. This is because it is not very difficult to actually set up extremely strong encryption without the assistance of an app all by yourself. As Ken Tindell shows here, a few lines of code can build an end-to-end encryption system that will be nearly impossible for others to crack. 

And since the British government does not actually control the internet, it will not be able to stop people from downloading apps like Signal. These are designed with the specific intent of letting users avoid government surveillance, something that comes in handy for people in Russia, Venezuela and Iran, and I’m quite happy that they can communicate without their governments listening in. You can stop these apps from being hosted on the Google app store, but you cannot stop people from downloading and installing them themselves. ISIS has already made its own encrypted messaging app called “Alrawi”. 

The best argument I can think of is that, even if banning stuff like end-to-end encryption doesn't stop terrorists from using it, it does make it much easier for the security services to see who is using it – the amount of encrypted traffic is much smaller and now you know the people using it are law-breakers. This is still not that persuasive: if you use a VPN located outside the UK, it's very difficult to track down who is behind the encrypted communications.

Here in Britain the costs of ordinary users not having this sort of protection are more mundane: your financial details and private conversations will be less safe. Major companies like LinkedIn and Adobe have been hacked on a massive scale. Most people, even the ones who never break the law, would not like their private photos or Whatsapp and Facebook chat histories to be leaked online. Would you?

Let me repeat: there is nothing we can do to stop people from encrypting their communications this way. This is a practical point, not a principled one. We can block websites, we ban apps, and we can insert backdoors. It will rob normal people of a valuable defence against malicious attacks, but none of it will stop bad people from using a few lines of code to keep their plans secret. 

It needs to be said again and again: if you outlaw encryption, only outlaws will have encryption.

Spend your year with us

This time last year I had just finished my A levels, and had slipped into an exam induced coma, unready to be awoken until university began in September. My foot was well off the pedal, and I was happy about the fact. In a moment borne of either extreme wisdom or extreme optimism (probably the latter), very much off the cuff, I applied to the Adam Smith Institute’s post A level gap year placement.

To my surprise I discovered that they accepted my application, and I was to spend the year there. I deferred my university place and on September the 5th, with a brand new suit and an open mind I began my year at the Adam Smith Institute. And now I have only a month left here, I can honestly say that the experience has given me the best year of my life.

It is nigh on impossible to describe working here. Tasks are as eclectic as they are fun, and the people you work with really make it. If you enjoy off the wall debates about anything from monetary policy to medical ethics, this is the place for you. Alternatively, if meeting many new liberal-minded people is your thing, this is also the job for you. Had this job been described to me before I begun, I would not have believed a word of it — eccentric brilliance is the norm, and by choosing to take up this gap year opportunity, you have the chance to spend time with the most brilliant minds around.

You’ll be the envy of all your mates, city slicking in the belly of the nation’s political engine, helping to influence policy by researching, editing, formatting and drinking — you’ll do it all.

Before I joined I could barely even operate a dishwasher, yet now I know my way around almost any kitchen appliance, I can frank a label with ease, and can taste the difference between chardonnay and sauvignon blanc.

My skills have developed at an exponential rate, and anyone lucky to be accepted for a gap year here will find the same. You will become an invaluable asset to any future employer. President of the ASI Madsen Pirie likes to say upon leaving the Adam Smith Institute that “the question is not whether our gap year students are ready for the world, rather, whether the world is ready for them”.

So if you would like to be absolutely irresistible to future employers, have fun, and get paid along the way, there is only one place to spend your gap year.

For more details, see here

Is it too much to ask that people read, even understand, their own evidence?

Britain's economy is broken apparently. Everyone is simply intellectually bankrupt other than those brave people at the IPPR who are going to do all that heavy thinking for us and put the world to rights. You know, with a properly radical and progressive list of the things we must all be forced to do.

One minor point we would make:

In the early 19th century, the process of mechanisation created mass destitution and misery. The Luddites were right that new technologies were taking their jobs, even if they were wrong to think they could face this threat down by breaking the machinery. How will we manage the 21st-century disruption better than we did last time? How can we imagine new jobs that make the best use of uniquely human talents? Should we explore a universal basic income or not? Is it time to reopen questions of common ownership in a machine age in which capital is likely to dominate?

There is something called the Engels Pause. The Industrial Revolution was revoluting, GDP and output climbing sharply, yet pay didn't seem to be rising. One part of this is simply that at this distance we're not measuring living standards properly. To be trite about it the replacement of woollen underwear by the newly cheap cotton we think a decent advance in living standards. Try wearing woollie undies for a week between washes to get the point. Not being trite the vast reduction in female household labour brought about by the Spinning Jenny was not a minor matter. Near every woman we meet in literature all the way back to Homer, rich women and all, spends inordinate amounts of time hand spinning. By Jane Austen it's not even mentioned.

That Pause ends in the 1840s in terms of wages paid. Which is also the time that Britain adopts free trade with the repeal of the Corn Laws. This is not a coincidence. The greater competition from that trade means that the rentier and capitalist profits are competed away to the benefit of the workers. Thus one part of the solution is clear today, unilateral free trade, as last time.

And now a more major point:

Britain has an enormous trade deficit, since we buy more from the rest of the world than we sell to it. The result is that the British economy is dangerously dependent on what the governor of the Bank of England has described as the “kindness of strangers” – borrowing from foreigners to keep us afloat. Our economy has not achieved sustained trade surpluses since the late 1970s and early 1980s.

We do not borrow in order to fund a trade deficit. We most certainly have, must have, a surplus on the capital account. But that surplus is made up of portfolio and direct investment by foreigners, only some of which is borrowing. And the idea that "we," the country, borrow from foreigners is because the government is borrowing, nothing at all to do with a trade deficit.

Wrong in micro, wrong in macro therefore. But it gets worse, with the major point:

 In Britain in 2017, the gap in wealth (rather than income) between top and bottom is almost the same as in Russia.

We are directed to this page. Where we are told:

The UK's wealth distribution is roughly average compared to the other OECD countries. The UK has a wealth GINI coefficient of 73.2% compared to an OECD average of 72.8%.

That is, wealth inequality in the UK is lower than it is in Denmark, Sweden, Finland and Norway. Lower than all of the Nordic social democracies. It would appear therefore that social democracy does not reduce wealth inequality, no?

But this is what makes it all so appallingly bad. The IPPR is not just wrong in micro and macro they're not even reading their own evidence.

And these are the people who should plan what we should all be forced to do?

This isn't an error it's an intention

One letter pointing out the dangers of the Corbynista agenda:

Theresa May’s economic plans are underwhelming and do little to boost the UK, a panel of more than a dozen leading economists has told The Sunday Telegraph.

But the Conservative manifesto is still far superior to Labour’s, the economists said, fearing that a win for Jeremy Corbyn on Thursday would leave the country with excessive taxes, soaring debts and an interventionist industrial policy which risks taking the country back to the 1970s.

We agree that there aren't that many joys in the Tory promises. But to say that Corbyn and allies risk going back to the 70s is an error, for that's the intention. Another letter in another paper:

In contrast, Labour’s manifesto proposals are much better designed to strengthen and develop the economy and ensure that its benefits are more fairly shared and sustainable, as well as being fiscally responsible and based on sound estimations.

We point to the proposed increases in investment in the future of the UK and its people, labour market policies geared to decrease inequality and to protect the lower paid and those in insecure work and fair and progressive changes in taxation.

That second signed by all the usual suspects, Danny Dorling, Andrew Simms, Ha Joon Chang and what looks like the entire faculty of SOAS - those educated enough to sign at least.

What we need to remember is that to some significant portion of the minor level intelligentsia the 1970s were admirable. The country has indeed never been more equal, it is the time of the lowest Gini in our history. The capital share of the economy was the lowest it ever has been, the labour share the highest. There are innumerable papers and articles making these points spread around - even Polly has been known to talk about 1976, when we were most equal, approvingly.

That the capital share didn't even cover depreciation does not matter - business wasn't sticking it to the workers! That the equality came at the price of recession, inflation and near national bankruptcy does not matter - equality!

A standard reminder in the City is that the next crisis is going to occur, in the same place and in the same manner, just after the people who recall the last one retire. There's no one in that list of academics signing that second letter who was both adult and policy making last time around which is why they're not recalling the flip side of their stated desires. A monomania in favour of equality is enough for them, without bothering to think about the evidence of what happened last time we tried it.

It really is true, a return to the 70s is not, for all too many, a warning of an error, it's a stated goal, an intention.