… it was a problem of permitting, by and large. Portugal isn’t as bad, mind, nowhere near but in the seventies a lot of places were designated “green belts” everywhere, so that to build on them (and you had to build on them, or you were stymied in growth) you had to know who to bribe, and of course have the money to do it. This isn’t the only reason why favelas end up housing even the middle class. There’s a ton of other reasons, including but not limited to land ownership and property rights, and a shit-ton of stuff. But permitting is part of it.
This is because people don’t view their public posts as something they do to make society better/serve society or even do a job, but as a way to enrich themselves/benefit their friends/make it easier to make money in the future.
Everything, from truly shoddy workmanship to rushed, corner/cutting work, to outright corruption comes from viewing a job not as something you take pride in and work to do your best at, but from viewing a job as an opportunity to enrich yourself and your family while doing as little work as humanly possible. In fact in some societies, this is viewed as a duty. As someone in comments cited there are places in Africa where locals can’t run a shop, because all their relatives near and distant will expect to be given merchandise for free … or even money out of the till.
A lot of this is because the idea of the individual as independent of the tribe and the family is a very new thing in most of the world. We kind of have a head start on it because we are/are descended from those who left family and tribe behind.
[…]
Also in most of the world working for money is vaguely shameful. Particularly so if you’re working for someone else. […] And even here not only does that attitude persist, but it’s trying to make itself normal. Particularly in politics.
So, take pride in what you do, and do the best job you can. It’s not just important for you, it’s a building block of society. Do the best you can, and control as much as you can, so maybe you will have just reward which is an incentive to do better.
This way is civilization built. This way do things actually improve.
Sarah Hoyt, “BUILD!”, According to Hoyt, 2018-07-25.
November 8, 2020
QotD: Tribal and post-tribal economies
November 7, 2020
Misunderstanding what is meant by “mineral reserves”
It seems to happen almost as regularly as Old Faithful, as someone blows a virtual gasket over the reserves of this or that mineral “running out” in x number of years. Tim Worstall explains why this is a silly misunderstanding of what the term “mineral reserves” actually means:
“Aerial view of a small mine near Mt Isa Queensland.” by denisbin is licensed under CC BY-ND 2.0
It’s not exactly unusual to see some environmental type running around screaming because mineral reserves are about to run out. The Club of Rome report, the EU’s “circular economy” ideas, Blueprint for Survival, they’re all based upon the idea that said reserves are going to run out.
They look at the usual listing (USGS, here) and note that at the current rate of usage reserves will run out in 30 to 50 years. Entirely correct they are too. It’s the next step which is such drivelling idiocy. For the claim then becomes that we will run out of those metals, those minerals, when the reserves do. This being idiot bollocks.
For a mineral reserve is, as best colloquial language can put it, the stuff we’ve prepared for use in the next few decades. Like, say, 30 to 50 years. That we’re going to run out of what we’ve got prepared isn’t a problem. For we’ve an entire industry, mining, whose job to to go prepare some more for us to use.
[…] A mineral reserve is something created by the mining company. Created by measuring, testing, test extracting and proving that the mineral can be processed, using current technology, at current prices, and produce a profit. Proving that this is not just dirt but is in fact ore.
Mineral reserves are things we humans make, not things that exist.
November 6, 2020
The World’s Most Recycled Material
Practical Engineering
Published 6 Aug 2020Exploring the complexities that go into the creation and application of asphalt concrete.
Use code80PRACTICALto get $80 off with purchase, including free shipping on your first box https://bit.ly/30sYo7c Go to HelloFresh.com for more details.Of all the ubiquitous things in our environment, roads are probably one of the least noticed. Our roads see tremendous volumes of traffic and withstand considerable variations in weather and climate, and they do it on a pretty tight budget. That’s really only possible because of all the scientists, engineers, contractors, and public works crews keeping up with this simple but incredible material called asphalt.
-Patreon: http://patreon.com/PracticalEngineering
-Website: http://practical.engineeringWriting/Editing/Production: Grady Hillhouse
Editing and Direction Help: Wesley CrumpThis video is sponsored by HelloFresh.
November 5, 2020
QotD: The idiocy of tariffs
The true sadness here being that the spiral works the other way too. But hugely, vastly, more slowly. GATT was founded in 1947, it became, the process was transferred to, the WTO and it has taken them since then, that two generations, to reduce tariff levels to where they’re not really all that important in trade matters. Something that is being undone in just a couple of months of foolishness. GATT being something of a response to the economic demolition work done by Smoot Hawley of course.
Trade protection does spiral up and spiral down, the sadness being that here’s an asymmetry to the process. The reductions that make us richer take very much longer than the nonsenses that impoverish.
Tim Worstall, “The China, US, Trade War – It’s All Mutual On The Way Down As Well As Up”, Continental Telegraph, 2018-07-11.
November 3, 2020
QotD: Water pricing
Near all freshwater availability problems come from the fact that farmers get it cheap or for free, diverting it from much more valuable uses like keeping people alive if they drink it. This is true in California – we’ve actually cases of farmers using $400 of water to grow $100 of alfalfa – as it is in Pakistan. There are cases of people growing water hungry crops in near drought areas just because they get that water too cheaply.
[…]
Gaining revenue with which to build dams is useful, it most certainly is. But that’s not the only function of pricing. The cash to increase supply, great, but the very fact of charging will reduce demand. And we should be charging what it costs to produce the water too. So charges should cover 100% of the costs of the dams, not just 25%.
It’s entirely possible that charging that full cost will mean that no farmers want the water. OK, then we shouldn’t build the dam, should we? For if the value of the water – measured by what people will pay – is less than the cost of its provision, then that’s value destroying, providing the water. The dam makes us all poorer, therefore we shouldn’t build it.
The point here being – and it’s an important one – that prices affect both supply and demand. They’re what brings them into balance even. So, yes, charge for water, but not just so that we can pay to increase supply, also so that we, merely by charging, reduce demand.
Tim Worstall, “Pakistan’s Chief Justice Almost Right – Charge For Water, Not For Dams, But To Charge For Water”, Continental Telegraph, 2017-07-17.
October 31, 2020
Modern Halloween costumes show us how wealthy we have become
Richard Lorenc looks back at the “costumes” for Halloween from the 1970s and 1980s to help illustrate how much our general economic picture has improved since those dark days:
While my husband and I were recently struggling to figure out our costumes for this Halloween (and we still don’t have any idea), he pulled up some old commercials on YouTube. The off-the-shelf options that trick or treaters had were, in a word, pitiful.
Basically, costume makers thought it was ok to make a front-only plastic mask (in any color, really) of a character and top it off with a plastic smock featuring an illustration of said character with either its name or the name of the show or movie it comes from. There was no attempt to dress in the character’s actual attire. If you wanted that, you’d either have to know a professional costumer or cobble together something from your closet.
Take a look for yourself at just how costume-poor we used to be:
Obviously, every costume is an opportunity to generate interest in a brand or franchise, and slapping on a logo is an easy way to get a name out there, but these costumes truly heralded a dark time for Halloween. Some may even argue that it demonstrated crass consumerism at its worst, with cynical companies taking the easiest route to grabbing a couple of bucks from desperate parents.
The truth of the tragedy of terrible old Halloween costumes has to do with a simple idea: specialization.
[…]
The next time you compare our screen-accurate store-bought costumes of Darth Vader and Mr. Incredible to those of yesteryear, remember that we enjoy them today not because previous generations didn’t care for accurate costuming, but because growing trade across the globe has generated so much wealth for each of us that we can now demand things we may have only imagined previously.
I only realized as I got ready to schedule this post that it was an article I’d blogged a couple of years back, but the point of the story is still relevant even in our pandemic-wracked economy of 2020.
October 22, 2020
When England “Londonized”
In the latest Age of Invention newsletter, Anton Howes looks at changes in urbanization in England from the Middle Ages onward and the astonishing growth of London in particular:
John Norden’s map of London in 1593. There is only one bridge across the Thames, but parts of Southwark on the south bank of the river have been developed.
Wikimedia Commons.
We must thus imagine pre-modern England as a land of tens of thousands of teeny tiny villages, each having no more than a couple of hundred people, which were in turn served by hundreds of slightly larger market towns of no more than a few hundred inhabitants, and with only a handful of regional centres of more than a few thousand people. By the 1550s, the country’s population had still not recovered to its pre-Black Death peak, and still only about 4% of the population lived in cities. London alone accounted for about half of that, with approximately 50-70,000 people (about five times the size of its closest rival, Norwich). So after a couple of centuries of recovery, London was only a little past its medieval peak.
But over the following century and a half, things began to change. At first glance, England’s continued population growth was unremarkable. By 1700, its overall population had finally reached and even surpassed the medieval 5 million barrier, despite the ravages of civil war. This was, perhaps, to be expected, with a little additional agricultural productivity allowing it to surpass the previous record. But the composition of that population had changed radically, largely thanks to the extraordinary growth of London. England’s overall population had not only recovered, but now 16% of them lived in cities of over 5,000 inhabitants — over two thirds of whom lived in London alone. Rather than simply urbanise, England londonised. By 1700, the city was nineteen times the size of second-place Norwich — even though Norwich’s population had more or less tripled.
London had, by 1700, thus risen from obscurity to become one of the largest cities in Europe. At an estimated 575,000 people, it was rivalled in Europe only by Paris and Constantinople, both of which had been massive for centuries. And although by modern standards it was still rather small, it could at least now be comfortably called a city — more or less on par with the populations of modern-day Glasgow or Baltimore or Milwaukee.
During that crucial century and a half then, London almost single-handedly began to urbanise the country. Its eighteenth-century growth was to consolidate its international position, such that by 1800 the city was approaching a million inhabitants, and from the 1820s through to the 1910s was the largest city in the world. In the mid-nineteenth century England also finally overtook Holland in terms of urbanisation rates, as various other cities also came into their own. But this was all just the continuation of the trend. London’s growth from 1550 to 1700 is the phenomenon that I think needs explaining — an achievement made all the more impressive considering how many of its inhabitants were dropping dead.
Throughout that period, urban death rates were so high that it required waves upon waves of newcomers from the countryside to simply keep the population level, let alone increase it. London was ridden with disease, crime, and filth. Not to mention the occasional mass death event. The city lost over 30,000 souls — almost of a fifth of its population — in the plague of 1603 (which was apparently exacerbated by many thousands of people failing to social distance for the coronation of James I), followed by the loss of a fifth again — 41,000 deaths — in the plague of 1625, and another 100,000 deaths — by now almost a quarter of the city’s population — in 1665. And yet, between 1550 and 1700 its population still managed to increase roughly tenfold.
I’ve been hard-pressed to find an earlier, similarly rapid rise to the half-a-million mark that was not just a recovery to a pre-disaster population or simply the result of an empire’s seat of government being moved. Chang’an, Constantinople, Ctesiphon, Agra, Edo, for example — all owed their initial, massive populations to an administrative change (often accompanied by a degree of forcible relocation), and all then grew fairly gradually up to or beyond half a million. As for a very long-term capital like Rome, it seems to have taken about three or four centuries to achieve the increases that London managed in just one and a half (though bear in mind just how rough and ready our estimates of ancient city populations are — our growth guesstimate for Rome is almost entirely based on the fact that the water supply system roughly doubled every century before its supposed peak). The rapidity of London’s rise from obscurity may thus have been unprecedented in human history — and was certainly up there with the fastest growers — though we’ll likely never know for sure.
But how? I can think of a multitude of factors that may have helped it along, but I find that each of them — even when considered altogether — aren’t quite satisfactory.
Carbon taxes may be the most efficient way to address GHG emissions, but no government has implemented them properly
I was persuaded by the economic arguments in favour of a carbon tax to address the externaly of greenhouse gas emissions, but I’ve long been skeptical that governments would actually implement them in a way to minimize economic distortion. A report from the Fraser Institute this week shows I was right to be doubtful, as none of the 31 OECD countries in the study have managed to introduce some form of carbon pricing without political “tinkering” … rather than replacing inefficient regulations, taxes and mandates with the carbon tax, they’ve generally just added carbon pricing on top of existing rules, making the carbon pricing scheme merely another tax grab that fails to achieve the stated goals:
Most economists consider human-made greenhouse gas (GHG) emissions an unintended negative externality of production and consumption. A negative externality occurs when the effects of producing or consuming goods and services impose costs on a third party which are not reflected in the prices charged for said goods and services. In the context of GHG emissions, this negative externality is calculated using the “social cost of carbon,” which is the future damage to society (adjusted to present value) of one additional tonne of carbon emitted to the atmosphere today.
Governments have a wide variety of policy alternatives to address the negative externality of emissions depending on the degree and depth of the policy intervention. They can either mandate individuals and firms to change their behaviour through command-and-control regulations, grant subsidies and tax credits to foster cleaner energy sources, or use market-based mechanisms to correct the misalignment of incentives. It is widely acknowledged that carbon pricing, one of these market tools, is the most cost-effective policy to reduce emissions, as it relies on price signals and trade to provide flexibility to economic agents as to where and how emissions mitigation occurs.
[…]
This report includes thirty-one high-income OECD countries, where each country has either implemented a carbon tax, an ETS [emissions trading system], or a combination of both pricing mechanisms. Carbon taxes are being implemented in 14 of them whereas 25 of these countries have their emissions covered by an ETS. Our analysis finds that, on average, 74 percent of carbon tax revenues in high-income OECD countries go directly into their general budget with no earmarking for any specific expenditure, while 12 percent are ring-fenced for environmental spending, and only 14 percent for revenue-recycling measures. This means that most governments are using carbon taxes as a revenue-raising tool rather than a mechanism to internalize the negative externalities of emissions in a cost-effective manner. Additionally, the vast majority of ETS revenues are being used to artificially accelerate the use of renewable energy sources, infrastructure, and technology.
The study also finds that no high-income OECD country has used carbon pricing to repeal emission-related regulations, but instead have introduced new ones following the adoption of the carbon tax or the ETS. Emissions caps, mandated fuel standards, technology-based standards, and renewable power mandates are just some examples of these regulations that undermine the cost-effectiveness of carbon pricing mechanisms. The majority of high-income OECD countries have a combination of support schemes for renewable energy sources, carbon pricing tools, and command-and-control regulations.
Overall, no high-income OECD country is following the textbook model of an optimal carbon pricing system, undermining their theoretical efficiency by design and implementation.
QotD: The needs of creative people
The question of where to live on such a low income while trying to write becomes crucial: in the middle of nowhere with cheap rent, or in the city where day jobs help pay for housing? Compromise clouds every decision.
And this simply will not do. You see, creative people, that’s people like Ms Delaney, must live in locales befitting their importance, not their budget. You, taxpayer, come hither. And bring your wallet.
The city of Sydney recently tried to address the problem of artists being priced out by introducing six rent-subsidised studio spaces in Darlinghurst. Those chosen get a year-lease and pay reduced rent of $250 a week on a one-bedroom with work studio.
Creative people, being so creative, deserve nothing less than special treatment. I mean, you can’t expect a creative person to write at any old desk in any old room in any old part of town. What’s needed is a lifestyle at some other sucker’s expense. And so that garret has to be in a fashionable suburb or somewhere happening, where the creative vibrations are at their strongest and genius will surely follow. And that pad of choice has to come before the publishing deal and film rights and the swimming pool full of cash. Indeed, it has to materialise before the book itself, or any part thereof. How else can their brilliance flourish, as it most surely will, what with all that creativity. Our betters just need a little cake before they eat those damn vegetables. And possibly ice cream. Here’s some money that other, less glamorous people had to actually earn. You fabulous creature, you.
David Thompson, “The Humble Among Us”, David Thompson, 2014-01-21.
October 20, 2020
QotD: The errors of socialist experiments
Ivor Thomas, The Socialist Tragedy, 1951.
October 15, 2020
QotD: What the GDP is failing to show (even though it’s there)
Our problem is that we know technological revolutions produce growth. Yet economic growth is limp at best, meagre perhaps a better description. So, there’s something wrong here. Either our basic understandings about how growth occurs are wrong and we [are] loathe to agree to that. Not because too much is bound up in that understanding but because too much of it makes sense. The other explanation is that we’re counting wrong.
[…]
We know that we’ve not quite got new products and their falling prices in our estimates of inflation quite correctly. They tend to enter the inflation indices after their first major price falls, meaning that inflation is always overstated. Given that the number we really look at is real growth – nominal growth minus inflation – this means we are consistently underestimating real growth.
[…]
The more we dig into this the more convinced I am that our only real economic problem at present is counting. Everything makes sense if we are counting output and inflation incorrectly, under-estimating the first, over- the second. If we are doing that – and we know that we are, only not quite to what extent – then all other economic numbers make sense. We’re in the midst of a large technological change, we’ve full employment by any reasonable measure, wages and productivity should be rising strongly. If we’re mismeasuring as above then those two are rising strongly, we’re just not capturing it. Oh, and if that’s also true then inequality is lower than currently estimated too.
The thing is, the more we study the details of these questions the more it becomes clear that we are mismeasuring, and mismeasuring enough that all of the claimed problems, the low growth, low productivity rises, low wage growth, simply aren’t there in the first place. And if they ain’t then nothing needs to be done about them, does it? Except, perhaps, count properly.
Tim Worstall, “Where’s All The Economic Growth? Goldman Sachs Blames Apple’s iPhone”, Continental Telegraph, 2018-07-03.
October 3, 2020
QotD: Literal first world problems
Again, I don’t say that these and other modern concerns are invalid. Some are and some aren’t. But it’s good to pause from time to time to be thankful that we’re wealthy enough to have escaped most of the daily, much more horrible concerns that pressed immediately upon our ancestors. It’s appropriate to be grateful that we’re rich enough to worry about, say, what might happen in a few decades to the sea level in a distant country rather than about whether or not our children will die of starvation during the night.
Don Boudreaux, “Quotation of the Day…”, Café Hayek, 2018-05-27.
October 2, 2020
QotD: Price “gouging” in emergencies
In spite of the fact that per capita, there were more emergency responders sent to Puerto Rico and more funds sent to Puerto Rico than Texas, their problem persisted while the Texans very quickly received aid. The answer to the question why is: because of price fixing.
The free market, in seeing the price jump recognized the shortage of supply and responded quickly supplying Texans with an abundance of water cases because of the excessive profit margins – the increased supply eventually caused market competition and the price quickly dwindled to a more reasonable price.
Meanwhile, the market ignored Puerto Rico because the market was asked to ignore them by their own leaders through price fixing. Texans received water, quickly, and at reasonable prices, while Puerto Ricans didn’t.
If water is selling for $99/case, by the end of the day someone will have airlifted water into the region at $50/case, and the next morning water will be selling for $30/case. This will go on for a day or so, and the water crisis is quickly resolved. This was never permitted to happen in Puerto Rico.
Brandon Kirby, “Why Women Generally Aren’t Libertarian”, Being Libertarian, 2018-06-27.
October 1, 2020
English lead and the European markets of the 1600s
In the latest Age of Invention newsletter, Anton Howes considers the meteoric rise in lead production in England and Wales from the dissolution of the monasteries under Henry VIII to the Thirty Years’ War in Europe:
The well-preserved ruins of Fountains Abbey, a Cistercian monastery near Ripon in North Yorkshire. Founded in 1132 and dissolved by order of King Henry VIII in 1539. It is now owned by the Royal Trust as part of Studley Royal Park, a UNESCO World Heritage Site.
Photo by Admiralgary via Wikimedia Commons.
In the early sixteenth century, England was a minor producer of the stuff. It was widespread and cheap enough to be used for roofing buildings (unlike much of the rest of Europe, where copper was preferred), but the country never produced more than a few hundred tons per year. It didn’t really need to. Like stone in [the game] Dawn of Man, you could amass a stockpile and not worry too much about any leaky bucket problems [where stockpiles need to be replenished due to wastage or other “drains”]. The lead in roofs could always be recycled, and hardly any more was needed for pipes or cisterns. The vast majority of the demand came from Germany, and then the New World, where it was used to extract silver from copper ore. Even this dissipated in the mid-sixteenth century, when the New World silver mines began to switch to using mercury instead.
Yet by 1600, England was producing about 3,000 tons of lead a year, up from just 300 in the 1560s. By 1700, it was producing two thirds of Europe’s lead — a whopping 20,000 tons a year. How?
Unlike copper or iron, there is no evidence that lead mining or processing techniques were imported. If anything, they seem to have emerged from the Mendips, in Somerset, where production costs fell with the introduction of furnace smelting in the 1540s. As well as raising the extraction rates from the ore coming up from the mines, the new furnaces allowed previously unusable ores — found in the easily-accessible waste tips of old mining camps — to be smelted after some simple sifting. Unfortunately, we don’t have a clear idea of who was responsible for the innovation.
Yet the source of England’s supremacy was really, at first, religious. Following the dissolution of the monasteries by Henry VIII in the 1530s, the melting down of their roofs dumped some 12,000 tons of lead onto England’s markets — at least a year’s worth of Europe’s entire output. Although the immediate effect was to annihilate England’s own lead industry, the medium-term effect was to send the other European producers into disarray. By the 1580s, once the stockpile had depleted, England’s lead producers were among the only ones left standing. The sale of monastic lead ensured that the English retained a foothold in foreign markets, while the cost-saving innovations then gave them the competitive edge. These factors explain, at least, England’s eventual hold over the European lead market.
But there was yet another phenomenon responsible for the industry’s massively increased scale: the development of hand-held firearms. Gunpowder technology was of course centuries old, but cannon had largely fired balls made of stone or cast iron. Muskets and pistols, however, used bullets made of lead. With the proliferation of the weapons over the course of the seventeenth century, lead thus acquired a major leaky bucket problem. Bullets were too costly to recycle, leading to an estimated fifth of Europe’s annual production of lead disappearing every year — a wastage that only increased as armies grew, weapons’ rate of fire improved, and the continent experienced extraordinary violence. Europe lost an estimated fifth of its population to the Thirty Years’ War, and England itself succumbed to civil strife.
England’s lead industry thus had to drastically increase its production just to maintain Europe’s stock of lead, let alone increase it. It was from soldiers entering the fray, to trade bullets across sodden fields, that it owed its extraordinary success.
QotD: Even so-called “Keynesians” fail to follow Keynes
When wages are flatlining, when the economy needs that bolus of extra demand then, OK, go borrow and spend. Or, in the MMT world, print money and spend. But once you’ve delivered that bolus and the economy has recovered then you must be able to stop that spending – whether delivered by borrowing or printing. That is, a permanent increase in spending is not Keynesian demand management, only a temporary one is.
Tim Worstall, “The Guardian‘s Absurd View Of NHS Funding”, Continental Telegraph, 2018-06-15.
