by Peter Franklin
Tuesday, 10
December 2019

Has the FT turned red?

For the first time in three elections, the pink paper is not endorsing the Tories

The Financial Times endorsed the Conservative Party at the 2010, 2015 and 2017 general elections. Not this time though. Instead, the paper’s “wholehearted support” went to candidates who share its “internationalist, pro-business” values.

But while the Tories weren’t embraced, Labour was rejected “as the party most distant from FT values,” not least because its “socialist blueprint would replace a thriving market economy with a statist model.”

OK, I guess that’s what you’d expect. Except that a few days later comes another editorial calling on western governments to borrow more and spend more, which is very much what the Labour manifesto promises to do. ...  Continue reading

by Peter Franklin
Thursday, 5
December 2019
Seen Elsewhere

Who is the world’s most typical person?

The answer might be very different in 100 years' time

That’s the fascinating question that Tyler Cowen asks in a brilliant piece for Bloomberg. And this is his answer:

“I… nominate a 30-year-old Cebu mother as the epicenter of human existence.”

Cebu City is a community of about a million people in the central Philippines. It’s not a familiar name in the West, but then the West is highly atypical of humanity.

Much more representative are places like Cebu — one of hundreds of rapidly growing cities in the increasingly urbanised developing world:

” … the most typical place should have an income not too far from the world’s median. According to Gallup, world median household income was almost $10,000 in 2013 (though it is by now somewhat higher). The average family income in the Philippines is about $5,340 at current exchange rates, but as a major city Cebu is richer, and at any rate life is especially cheap in the Philippines.

“The world’s most typical place also should have a fairly high degree of income inequality, and Cebu does. There are gleaming shopping malls and skyscrapers, but also considerable poverty.”

- Tyler Cowen

The city is getting richer thanks to new industries like business outsourcing — helped by the fact that English is widely spoken. ...  Continue reading

by Peter Franklin
Wednesday, 4
December 2019

To boldly go? You first, Mr Bezos

The Amazon founder should focus on problems back down on Earth

What is it with billionaire businessmen and private spaceflight ventures? Richard Branson has Virgin Galactic, Elon Musk has SpaceX and Jeff Bezos has Blue Origin.

The latter is the target of an excoriating piece by Paris Marx in Jacobin:

“Bezos is convinced that humanity will fall prey to ‘stasis and rationing’ if we remain on Earth. The Jeff Bezos brand of never-ending growth will require constant population gains, increased energy use, and more resources than our planet can provide — so, into the stars we must go.”
- Paris Marx

Technically this is correct, we can’t have infinite growth on a finite planet. So eventually we either need to stop growing or radically expand our horizons.

In the meantime, however, we need to buy ourselves some wiggle room by pursuing greener growth. Jeff Bezos as the boss of Amazon has more influence over the future direction of capitalism than almost anyone else on the planet, so why on Earth wouldn’t he want to focus on that as opposed to messing around with rockets? After all, we’re going to have to head-off catastrophic climate change long before we have the option of high-tailing it to heavens. The order of priorities should be obvious. ...  Continue reading

by Peter Franklin
Tuesday, 3
December 2019

How to turn higher production into higher wages

A captive labour force might be good for a company, but not the economy

Richard Jones is the physics professor whose paper on transforming the UK economy got the thumbs-up from Dominic Cummings last week.

I wrote a piece about his arguments on Monday, but there was something else in the paper that I didn’t have room for. It’s about the crucial relationship between productivity and wages.

Jones begins with the uncontroversial observation that “the growth of real wages tracks overall productivity growth.” This stands to reason, as the more productive that workers are the more they can command in the market place for their time. It’s surely no coincidence that in a decade of very low productivity growth we’ve also seen wages stagnate. ...  Continue reading

by Peter Franklin
Thursday, 28
November 2019

How old is too old in politics?

Should there be an age limit for political candidates?

The state devotes ten of billion of pounds every year in pension payments, tax credits and other means of funding retirement. The idea that we should not have to work in old age is uncontroversial. Indeed, our politicians compete among themselves to find new ways of bunging billions at retirees.

And yet some of our leaders are reluctant to retire themselves. In 2021, Angela Merkel is due to bow out at the age of 67, after 16 years of leading her country. Jeremy Corbyn, however, proposes to start out at the age of 70 — and that’s nothing compared to America.

Despite a recent heart attack, Bernie Sanders is still battling for the Democratic nomination at the age of 78. Still leading the field is Joe Biden, aged 77. For a while it looked as though Elizabeth Warren, 70, was the frontrunner. However, inadequate poll ratings against Donald Trump, 73, have counted against her. Support is currently surging for Pete Buttigieg — but at 37, he has the opposite problem to the other main contenders. ...  Continue reading

by Peter Franklin
Wednesday, 27
November 2019

Netflix is like food – more doesn’t mean better

We end up consuming rubbish, even though there's plenty of good stuff to go round

Philip Aldrick, economics editor of The Times has a super-interesting piece about boredom. Or rather, the abolition of boredom:

People do not get bored any more. There are too many distractions for that. Listless, yes, but not bored, because the moment that sense of having nothing to do creeps up, you need only to flick on your phone.
- Philip Aldrick

Yes, there’s always something to read, watch, listen to or interact with online — and smartphones mean we never need be offline. As a result human attention has been maxed out — there is nothing more for us to give:

From a content provider’s point of view, the problem with attention is that it is finite. We have only a set number of hours that we can give to those who want our eyeballs or our ears. Reed Hastings, founder of Netflix, put it more starkly: ‘We’re competing with sleep. Sleep is my greatest enemy.’
- Philip Aldrick

Personally, I hope that sleep wins that particular struggle.

Aldrick describes attention as as a “commodity” which I guess it is when it is captured and sold on to advertisers. But with paid-for content, it’s better to think of attention as a limited capacity for consumption in a world of essentially unlimited production: ...  Continue reading

by Peter Franklin
Monday, 25
November 2019

Housing policy — will the Tories never learn?

A government that refuses to take action against rentiers and land bankers will not be able to deliver affordable home ownership

Most comparisons between the Conservative and Labour manifestos are pointless. The latter is to fiscal credibility what MC Escher is to geometry.

Housing policy, however, is a partial exception — because the big solutions don’t depend on profligate state expenditure.

Last week, I gave a broad welcome to Labour’s proposals, though not without serious reservations. So how does the Tory offer compare? Let’s start with the good points.

First of all, there’s something that’s absent from the Labour manifesto — an emphasis on beauty:

We will ask every community to decide on its own design standards for new development, allowing residents a greater say on the style and design of development in their area, with local councils encouraged to build more beautiful architecture.
- Conservative Manifesto 2019

Also in contrast to Labour, there’s a commitment to “rebalance the housing market towards more home ownership”. What’s missing here, however, is a convincing set of policies to make this happen. Tory policy continues to centre upon poorly-targeted, economically-illiterate subsidies for first-time buyers, when what is needed is action on the root of the housing crisis — which is the exploitation of land monopolies by landlords, developers and speculators. ...  Continue reading

by Peter Franklin
Thursday, 21
November 2019

Two cheers for Labour’s housing policy

It pains me to say it, but there's a lot to welcome in Corbyn's manifesto

It pains me to say this, but there’s a lot to welcome in Labour’s housing policy.

One particular highlight in the new manifesto is the setting up of a dedicated Department for Housing (and, presumably, planning). The scale of the housing crisis is such that it needs the exclusive attention of a full team of ministers. A commitment to leave them in post long enough to make a difference would have been nice, but you can’t have everything.

Also welcome is the proposal for an “English Sovereign Land Trust, with powers to buy land more cheaply for low-cost housing”. There’s not much detail, however, as to how land can be obtained at low cost. At the very least, it would require getting rid of the ‘hope value’ principle in law, which effectively entitles landowners to the windfall that comes from getting planning permission. It is the planning system that creates this added value not the landowner. ...  Continue reading