November 11, 2012

The natural lifecycle of a “monopoly”

Filed under: Asia, China, Economics, Technology — Tags: , , — Nicholas @ 12:53

In Forbes, Tim Worstall celebrates the natural end to a “monopoly” — the quasi-monopoly of Chinese exports of rare earth compounds:

These past several years I’ve been shouting to all who would listen that while China does indeed have a stranglehold on current production of rare earths that’s not something that we really need to worry about. For the important thing about rare earths is that they’re not rare (nor earths either). There are plenty of deposits around and we can get all we need from other areas of the world if we should care to.

    The same cannot be said of Kuantan, the Malaysian locale where Lynas plans to build a rare earth processing plant, a type of facility residents and Australian supporters say, in online campaigns, will result in “millions of tonnes of toxic radioactive waste left behind”.

    Residents took Lynas to court in Malaysia, resulting in the suspension of its operating licence. That decision was overturned yesterday.

Lynas is the company desiring to mine the Mt. Weld deposit (a nice rich one it is too). They are going to separate the RE concentrate at that plant in Malaysia. There’s been a vocal campaign against the licensing of that extraction plant and Lynas has, as above, just succeeded in over-turning a previous license refusal. Once up and operating fully the plant should supply some 20,000 tonnes a year of REs. This is a substantial portion of demand outside China: it’s some 15% or so of entire global demand in fact.

And thus we again see how an apparent monopoly isn’t really all that much use to the supposed monopolist. It certainly was true that China supplied 95-97% of the world’s REs. Largely because they were willing to mine and supply at prices that made it not worth anyone else’s while to do so. But when they tried to constrain supply, to exercise that monopoly, instead of being able to exploit us all they simply encouraged the competition that destroys that monopoly.

Markets do indeed work and the only monopoly that can really be exploited is one that isn’t contestable. And an attempted monopoly in something as common as rare earths simply is contestable and thus cannot be exploited.

A major reason for Romney’s defeat

Filed under: Politics, USA — Tags: , , , , , — Nicholas @ 11:55

At Reason, Sheldon Richman explains one of the major reasons Mitt Romney’s campaign for president fell short of victory:

Romney couldn’t call Obama to account because he fundamentally agreed with most of what the president did. He could hardly have substantively criticized Obama’s fiscal record: Romney had little specific to say about cutting the government’s deep-in-deficit budget, and he even proposed to leave education and other federal spending intact. While Romney talked about cutting income-tax rates, he emphasized that he had no intention of cutting government revenues, which represent resources extracted from the private economy. He proposed only revenue-neutral tax “reform.”

While Romney promised to “repeal and replace” Obamacare, the architect of Massachusetts’ Romneycare was hardly in a position to offer a fundamental critique. The insurance mandate is the linchpin of Obamacare, but since Romneycare has the same mandate, what could the Republican candidate say? His weak federalist defense of state mandates versus national mandates sounded more like a rationalization. Moreover, Romney doesn’t understand what is wrong with America’s overpriced health-care system: the pervasive, monopolistic government privilege and regulation in the medical and insurance industries at both the state and federal levels. There is no free market in health care — something Romney does not get. As a result, he made the fatal mistake of implying that a partial repeal of Obamacare is all that is needed.

He also endorsed economic regulation, just to a vaguely lesser extent than what Obama favors. That only muddled the message. Romney showed no sign of understanding the relationship between regulation and privilege, which usually go hand in hand. So it’s not enough to favor deregulation; a true advocate of the free market favors “de-privileging” as well.

The biggest pass Obama got was on foreign policy and civil liberties, where his record has been horrendous. Of course, Romney could make no principled criticism because he basically approves of the record, though he claimed Obama hasn’t been aggressive enough.

As early as August, this lack of actual substantive differences between the candidates had already become quite clear.

Royal Navy patrol sees off Spanish corvette

Filed under: Britain, Europe, Military — Tags: , , , , — Nicholas @ 11:25

Gibraltar. Scenic and historic port at the mouth of the Mediterranean Sea. Oh, and ongoing point of friction between the UK and Spain:

A Royal Navy patrol boat has confronted a Spanish warship off the coast of Gibraltar in the latest and most serious clash over Britain’s territorial waters.

The Government has accused Spain of an ‘unlawful incursion’ after the Vencedora, a 288ft-long naval corvette, came within three miles of Gibraltar’s coast, apparently heading towards its port.

The Vencedora, which means ‘winner’, was equipped with Harpoon anti-ship missiles, multiple guns and torpedoes when it entered Gibraltar’s territorial waters on Wednesday afternoon.

The Spanish ship ignored radio warnings to leave the area, and HMS Scimitar, a seven-man patrol boat, was scrambled to intercept.

Gibraltar has been British territory since the early 1700’s, but the current Spanish government would like to change that. As the Wikipedia article points out, the inhabitants strongly prefer staying as British citizens to becoming Spanish:

In the 1950s, Franco renewed Spain’s claim to sovereignty over Gibraltar and restricted movement between Gibraltar and Spain. Gibraltarians voted overwhelmingly to remain under British sovereignty in the Gibraltar sovereignty referendum, 1967, which led to the passing of the Gibraltar Constitution Order in 1969. In response, Spain completely closed the border with Gibraltar and severed all communication links. The border with Spain was partially reopened in 1982, and fully reopened in 1985 prior to Spain’s accession to the European Community.

In a referendum held in 2002, Gibraltarians rejected by an overwhelming majority (99%) a proposal of shared sovereignty on which Spain and Britain were said to have reached “broad agreement”. The British government has committed itself to respecting the Gibraltarians’ wishes. A new Constitution Order was approved in referendum in 2006. A process of tripartite negotiations started in 2006 between Spain, Gibraltar and the UK, ending some restrictions and dealing with disputes in some specific areas such as air movements, customs procedures, telecommunications, pensions and cultural exchange.

Update, 13 November: And here they come again:

In memorium

Filed under: Britain, History, Military — Tags: , , , , — Nicholas @ 11:00

A simple recognition of some of our family members who served in the First and Second World Wars:

The Great War

  • Private William Penman, Scots Guards, died 1915 at Le Touret, age 25
    (Elizabeth’s great uncle)
  • Private David Buller, Highland Light Infantry, died 1915 at Loos, age 35
    (Elizabeth’s great grandfather)
  • Private Walter Porteous, Northumberland Fusiliers, died 1917 at Passchendaele, age 18
    (my great uncle)
  • Corporal John Mulholland, Royal Tank Corps, died 1918 at Harbonnieres, age 24
    (Elizabeth’s great uncle)

The Second World War

  • Flying Officer Richard Porteous, RAF, survived the defeat in Malaya and lived through the war
    (my uncle)
  • Able Seaman John Penman, RN, served in the Defensively Equipped Merchant fleet on the Murmansk Run (and other convoy routes), lived through the war
    (Elizabeth’s father)
  • Private Archie Black (commissioned after the war and retired as a Major), Gordon Highlanders, captured at Singapore (aged 15) and survived a Japanese POW camp
    (Elizabeth’s uncle)
  • Elizabeth Buller, “Lumberjill” in the Women’s Land Army in Scotland through the war.
    (Elizabeth’s mother)

In Flanders fields the poppies blow
Between the crosses row on row,
That mark our place; and in the sky
The larks, still bravely singing, fly
Scarce heard amid the guns below.

We are the Dead. Short days ago
We lived, felt dawn, saw sunset glow,
Loved and were loved, and now we lie
In Flanders fields.

Take up our quarrel with the foe:
To you from failing hands we throw
The torch; be yours to hold it high.
If ye break faith with us who die
We shall not sleep, though poppies grow
In Flanders fields.

Lieutenant Colonel John McCrae, MD (1872-1918)

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