Quotulatiousness

June 3, 2020

Fanatics gonna fanatic … they can’t help it

Filed under: Britain, Economics, Environment, Government, Health — Tags: , , , , , — Nicholas @ 03:00

It’s funny that no matter what the claimed crisis, the answers always go in the same direction, as Kristian Niemietz points out with the demands to turn our still unending lockdown toward “protecting the environment”:

The change, superficially, is to encourage “a safe return to work” allowing more social distancing between pedestrians, but more substantially in order to preserve the cleaner air that has resulted from the lockdown.

The health and safety excuse for the policy change can be largely dismissed. The simple truth of the pandemic and national policy is that if social distancing matters, the centre of London is not safe to return to work. It is too densely populated and almost entirely reliant on mass transit which cannot operate above 10-15% capacity with 2m exclusion rules. With average commutes over 9 miles each way, substitution effects to walking and cycling will be extremely limited and temporary.

It is then hard to see then how the policy’s architects imagine the streets will fill up to the extent urgent measures are needed. Conversely, if social distancing does not matter (and it will cease to matter eventually), then a policy to enable more social distancing outside by widening the pedestrian streetscape is redundant. If it is safe to sit on a crowded train, it is safe to walk on a crowded pavement. It is not hard then to cut through the pandemic packaging to note that the motive for this policy is opportunistic, to accelerate a pedestrianisation plan that is the dream of many an urban planner.

Many will see this as self-evidently a good thing. Removing vehicle traffic from densely populated narrow streets will reduce air pollution, congestion and road traffic accidents. As a policy it will have more supporters than opponents; very few people drive into the centre of London to commute and there is very little capacity for parking. London’s leaders are not wrong to think that this is the future, the question is really one of timing and how they go about it, which is far more difficult and does not have anything to do with managing a coronavirus.

What the pandemic allows is the ability to use emergency powers for something that is not an emergency. This matters, in normal times it took several years to close one dangerous junction at Bank to most traffic, and this under a hail of protests from local businesses and taxi drivers. The same result can now be achieved in a few weeks across many streets. The democratic checks and balances that differentiate the UK from authoritarian states can be ditched and London officialdom granted extraordinary powers to do as they please. If the protestors don’t like it this time, they should note the right to protest has also been suspended, at least for now.

June 2, 2020

QotD: Economic inequality

Filed under: Economics, Quotations — Tags: , — Nicholas @ 01:00

Economic inequality […] is both highly moralized (right-thinking people agree it’s the root of all evil) and intellectually devilishly complex, far more than people acknowledge. For example, if “the bottom fifth” earns the same proportion of income in 1980 and 2010, it doesn’t mean anyone’s income stagnated: these “fifths” are different people, and they earn a fifth of different totals. Also, it’s not clear that inequality (as opposed to poverty) is a moral abomination, or that reducing it is progress. As Walter Scheidel argues in The Great Leveler (another superb book of 2017), the most effective ways of reducing inequality are epidemics, massive wars, violent revolutions and state collapse.

Steven Pinker, “Twenty Questions with Steven Pinker”, Times Literary Supplement, 2018-02-18.

May 24, 2020

QotD: The “balance of trade”

Filed under: Economics, Quotations — Tags: , , — Nicholas @ 01:00

Joseph Schumpeter [wrote in] History of Economic Analysis (1954):

    The first thing to observe about this concept [of the balance of trade] is that it is in fact an analytic tool. The balance of trade is not a concrete thing like a price or a load of merchandise.

Yes (although it is even more accurate to describe the balance of trade as an accounting convention). If, for example, it had been decided to record purchases and sales of real estate on the current account rather than on the capital account, the size of each country’s current-account deficit or surplus would be different even though absolutely nothing real in the national or global economy would be changed. And yet to hear any of the many protectionists bemoan their country’s trade- or current-account deficit is to hear people who typically mistake this accounting convention for a concrete thing. Such complaints almost always reflect utter misunderstanding of so-called “trade balances.”

Don Boudreaux, “Bonus Quotation of the Day…”, Café Hayek, 2018-01-21.

May 22, 2020

When raising tax rates reduces total tax revenue

Filed under: Economics, Government, USA — Tags: , , , — Nicholas @ 03:00

In the Continental Telegraph, Tim Worstall explains that the US tax system is already drawing too much in tax and any hope of increasing the total revenue will hinge on reducing the tax rate:

It is often stated that the rate [the Laffer Curve peak rate] discovered here is 75 to 80%. This is not so – that could be the rate if only we entirely and wholly changed the taxation system in a mass of highly undesirable ways. If we remain with roughly what we’ve got in structure and intent then the peak of the Laffer Curve is 54%. That is not income tax, that is taxes upon income. That means we add together all Federal and State taxes upon income, including “employer paid” portions of Social Security, Medicaid, special amounts for this and that and so on and on. Anyone even vaguely familiar with the US taxation system will note that top earners are, already in many states, paying this or more.

There is something else though. The Laffer Curve is not about taxes upon high earners. It is about taxes upon income. It’s true that there will be slight differences in what the peak rate on lower incomes should be, or what the peak of the curve is there. The income effect will be higher than the substitution at lower incomes than it is at higher. We don’t know how much so let’s just stick with what we’ve got – 54%.

At which point:

    The U.S. has a plethora of federal and state tax and benefit programs, each with its own work incentives and disincentives. This paper uses the Fiscal Analyzer (TFA) to assess how these policies, in unison, impact work incentives. TFA is a life-cycle, consumption-smoothing program that incorporates household borrowing constraints and all major federal and state fiscal policies. We use TFA in conjunction with the 2016 Federal Reserve Survey of Consumer Finances to calculate Americans’ remaining lifetime marginal net tax rates. Our findings are striking. One in four low-wage workers face marginal net tax rates above 70 percent, effectively locking them into poverty.

This includes the withdrawal of welfare benefits as income rises – as it should – and so is compatible with the Universal Credit idea that the peak tax and withdrawal rate should be 60%. Or is it 66%?

As we can see that rate is hugely above the Laffer Curve peak. It should, therefore, be lower.

It’s possible to extend the taper. Withdraw benefits at slower rates as income rises. This is, however, hugely, vastlylily, expensive. So it’s not going to happen to any significant degree and if it does then it will be financed by reducing the overall amount of benefit being paid. Which would mean taking money off the truly low income in order to soften the blow to the marginally low income – not the way we want to be doing things.

The only other way to do this is to reduce the taxation of the income of those low income folks. This has been done, a bit, by the Trump tax reforms and the much larger personal deduction. A further bite could be taken by FICA taxation only applying to the income above the personal deduction, not from dollar $1 of income as now. In fact that would be the simplest manner of at least beginning to get to grips with this problem. FICA only starts at $12,000 a year or so. Or even, if all are to be sensible, starting income tax and FICA only at the poverty line, currently $14,000 or so a year for a single adult.

May 20, 2020

QotD: Behavioural economics, aka the applied theory of bossing people around

Filed under: Economics, Quotations — Tags: , , — Nicholas @ 01:00

Once [Richard] Thaler has established that you are in myriad ways irrational it’s much easier to argue, as he has, vigorously — in his academic research, in popular books, and now in a column for The New York Times — that you are too stupid to be treated as a free adult. You need, in the coinage of Thaler’s book, co-authored with the law professor and Obama adviser Cass Sunstein, to be “nudged.” Thaler and Sunstein call it “paternalistic libertarianism.”

Adam Smith spoke of “the man of system” who “seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board.” Thaler and his benevolent friends are men, and some few women, of system. They hate the Chicago School, have never heard of the Austrian School, dismiss spontaneous order, and favor bossing people around — for their own good, understand. Employing the third most unbelievable sentence in English (the other two are “The check is in the mail” and “Of course I’ll respect you in the morning”), they declare cheerily, “We’re from the government and we’re here to help.”

We humans face a choice of treating people as children or as adults. A liberal society, Smith’s “liberal plan of [social] equality, [economic] liberty, and [legal] justice,” treats adults as adults. The principle of an illiberal society, from Thaler’s to the much worse kind, is that you are to be corrected not through respectful dialog that treats you as an equal, but by compulsion or trickery, which treats you like a toddler about to walk into traffic.

Wikipedia lists fully 257 cognitive biases. In the category of decision-making biases alone there are anchoring, the availability heuristic, the bandwagon effect, the baseline fallacy, choice-supportive bias, confirmation bias, belief-revision conservatism, courtesy bias, and on and on. According to the psychologists, it’s a miracle you can get across the street.

For Thaler, every one of the biases is a reason not to trust people to make their own choices about money. It’s an old routine in economics. Since 1848, one expert after another has set up shop finding “imperfections” in the market economy that Smith and Mill and Bastiat had come to understand as a pretty good system for supporting human flourishing.

Dierdre McCloskey, “The Applied Theory of Bossing People Around”, Reason, 2018-02-11.

May 19, 2020

Some changes to the working world … when the world gets back to working

Filed under: Britain, Business, Economics — Tags: , , , , , , — Nicholas @ 05:00

Sean Gabb has some thoughts on the post-lockdown return so … well, not normal, but as the economy reaches toward a new working equilibrium:

Kensington High Street at the intersection with Kensington Church Street. Kensington, London, England.
Photo by Ghouston via Wikimedia Commons.

The Coronavirus and its aftermath of lingering paranoia are the perfect excuse. Decentralisation and homeworking must be done. They must be done for the duration. They must be continued after that to maintain social distancing. No one will think ill of Barclays and WPP for taking the leap. No one will blame them for taking the leap in a way that involves a few deviations from course and a less than elegant landing. A year from now, these organisations will be making measurably larger profits than they would be otherwise. The mistakes will have been ignored.

And other organisations will follow. Whether the present crash will bring on a depression shaped like a V or an L, there is no doubt that, even if slowly at first, the wheels of commerce will continue turning. But they will be turning on different rails. As with any change of course, there will be winners and losers. I have already discussed how I can expect to be among the winners. I will leave that as said for the other winners — these being anyone who can find a market for doing from home what was previously required by custom and lack of imagination to be done somewhere else. I will instead mention the losers.

Most obvious among these will be anyone involved in commercial property. Landlords will find themselves with many more square feet to fill than prospective tenants want to fill. Rental and freehold values will crumble. Bearing in mind how much debt is carried by commercial landlords, there will be some interesting business failures in the next few years. Then there are the ancillary sectors — property management companies, commercial estate agents, maintenance companies. These employ swarms of architects and surveyors and lawyers and negotiators, of builders, plumbers, electricians, of drivers and cleaners. If the humbler workers will eventually find other markets, many with degrees and professional qualifications can look to a future of straitened circumstances.

The lush residential estates in and about Central London will follow. I think particularly of the aristocratic residential holdings in Kensington. Houses here go for tens of thousands a week to senior bank workers from abroad. If the City and Canary Wharf are emptied out, who needs to live in a place like Kensington? It has poor Underground connections. It is close by places like Grenfell Tower. Its residents keep predators at bay only by heavy investment of their own in security and by suspecting every knock on the door and every sound in the night. Many of the shops and eateries that make its High Street an enjoyable place to be will not reopen. Those that do reopen will be hobbled by continuing formal and informal rules on social distancing.

As a result, restaurants and pubs and coffee bars will begin to disappear. All but a few of these were barely making normal profit before they were closed last month. So few are in liquidation as yet only because so few petitions have been lodged in the courts. Most of them will now be surplus to requirement. The same can be said of hotels. Speaking for myself, I used to visit Cambridge twice a year on examinations business. I was always put up there for a couple of nights. I shall now do from home all that I did in Cambridge. I doubt I am alone. Zoom will destroy business travel. In the same way, bigger televisions plus continued social distancing will finish off the theatres and cinemas — also in decline before last month.

May 16, 2020

QotD: Division of labour in the modern world

Filed under: Business, Economics, Quotations, Technology — Tags: , , , , — Nicholas @ 01:00

… digital devices slow us down in subtler ways, too. Microsoft Office may be as much a drag on productivity as Candy Crush Saga. To see why, consider Adam Smith’s argument that economic progress was built on a foundation of the division of labour. His most celebrated example was a simple pin factory: “One man draws out the wire, another straights it, a third cuts it, a fourth points” and 10 men together made nearly 50,000 pins a day.

In another example — the making of a woollen coat — Smith emphasises that the division of labour allows us to use machines, even “that very simple machine, the shears with which the shepherd clips the wool”.

The shepherd has the perfect tool for a focused task. That tool needs countless other focused specialists: the bricklayer who built the foundry; the collier who mined fuel; the smith who forged the blades. It is a reinforcing spiral: the division of labour lets us build new machines, while machines work best when jobs have been divided into one small task after another.

The rise of the computer complicates this story. Computers can certainly continue the process of specialisation, parcelling out jobs into repetitive chunks, but fundamentally they are general purpose devices, and by running software such as Microsoft Office they are turning many of us into generalists.

In a modern office there are no specialist typists; we all need to be able to pick our way around a keyboard. PowerPoint has made amateur slide designers of everyone. Once a slide would be produced by a professional, because no one else had the necessary equipment or training. Now anyone can have a go — and they do.

Well-paid middle managers with no design skills take far too long to produce ugly slides that nobody wants to look at. They also file their own expenses, book their own travel and, for that matter, do their own shopping in the supermarket. On a bill-by-the-minute basis none of this makes sense.

Why do we behave like this? It is partly a matter of pride: since everyone has the tools to build a website or lay out a book, it feels a little feeble to hand the job over to a professional. And it is partly bad organisational design: sacking the administrative assistants and telling senior staff to do their own expenses can look, superficially, like a cost saving.

Tim Harford, “Why Microsoft Office is a bigger productivity drain than Candy Crush Saga”, The Undercover Economist, 2018-02-02.

May 14, 2020

QotD: Anti-dumping laws

Filed under: Business, Economics, Government, Quotations — Tags: , , — Nicholas @ 01:00

The antidumping law is defended as a remedy for market distortions caused by foreign government policies. Yet in actual practice, the methods of determining dumping under the law fail, repeatedly and at multiple levels, to distinguish between normal commercial pricing practices and those that reflect market-distorting government policies.

As a result, antidumping law as it currently exists routinely punishes normal competitive business practices — practices commonly engaged in by American companies at home and abroad. It is therefore not the case that the law guarantees a level playing field for American companies and their foreign competitors. On the contrary, it actively discriminates against foreign goods by subjecting them to requirements not applicable to American products.

Brink Lindsey and Dan Ikenson, Antidumping Exposed: The Devilish Details of Unfair Trade Laws, 2003.

May 9, 2020

History Summarized: The Meiji Restoration

Filed under: Economics, Government, History, Humour, Japan, Military, USA, WW1, WW2 — Tags: , , , , , , — Nicholas @ 04:00

Overly Sarcastic Productions
Published 8 May 2020

Japan may well have the record for World’s Speediest Industrialization, but how did they accomplish so much so fast without falling victim to Europe’s favorite 19th century pastime of “Colonization”? And how did Japan build up a Pan-Asian empire so darn quickly? All that and more in this deep-dive into the Meiji Restoration!

SOURCES & Further Reading:
Modern Japan: A Very Short Introduction by Goto-Jones.
The Japanese Empire: Grand Strategy from the Meiji Restoration to the Pacific War by Paine.
Bushido: The Soul of Japan by Nitobe.

THAT WACKY POLITICAL CARTOON: “Japan Makes Her Debut Under Columbia’s Auspicies” https://tile.loc.gov/storage-services…

This video was edited by Sophia Ricciardi AKA “Indigo”. https://www.sophiakricci.com/

Our content is intended for teenage audiences and up.

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May 7, 2020

Interesting change in shipping patterns … to avoid the Suez canal

Filed under: Business, Economics, Middle East — Tags: , , , , — Nicholas @ 05:00

Colby Cosh linked to this story at gcaptain.com which would have been an unbelievable one in the pre-epidemic world:

A column of ships along the Suez Canal on 3 December, 2011.
Photo by https://web.archive.org/web/20161022104657/http://www.panoramio.com/user/2433337?with_photo_id=64163879 via Wikimedia Commons.

The Suez Canal Authority (SCA) is set to lose over $10m in revenue from container lines routing vessels via the Cape of Good Hope rather than its waterway.

According to new Alphaliner research, “the number of containerships that have opted to use the Cape route and bypass the Suez Canal has risen to a historic peace-time high,” including at least 20 sailings on the Asia-Europe, Europe-Asia and North America east coast-Asia trades.

“A unique combination of a container tonnage surplus and rock-bottom bunker prices has increasingly prompted ocean carriers to avoid the canal – and thus its fees,” the analyst noted today.

“Rather unusually, even three westbound Asia-Europe headhaul sailings have opted for the Cape route, all operated by CMA CGM.

“Carriers very rarely choose this longer route for the time-sensitive headhaul, but the low bunker price and lack of demand in European markets, hit by the Covid-19 lockdowns, have suddenly made such moves viable,” it added.

May 6, 2020

Essential private sector workers and non-essential government workers

Filed under: Business, Economics, Government — Tags: , , — Nicholas @ 03:00

A couple of articles at the Foundation for Economic Education look at the arbitrary division of peoples’ jobs into two broad categories:

In a recent TV appearance with Dana Perino on The Daily Briefing, [Mike] Rowe made it clear he’s not a fan of the terms “essential” and “non-essential” worker. The problem with such a view, Rowe said, is that such terms have little actual meaning and the economy makes no such distinction.

“There’s something tricky with the language going on here, because with regard to an economy, I don’t think there is any such thing as a nonessential worker,” Rowe said. “This is basically a quilt … and if you start pulling on jobs and tugging on careers over here and over there, the whole thing will bunch up in a weird way.”

Rowe’s message is precisely what FEE president and economist Zilvinas Silenas was getting at in a recent article published at Townhall.

    Allowing politicians to decide which businesses and products are “essential” is an invitation for disaster. If we continue to deny these businesses the ability to do the one essential thing they are best at — providing goods and services to millions of everyday Americans — we risk more than unemployment or recession of stock price plunge. We deprive ourselves of the best resource — our people — during the time of need.

The truth is, all workers are essential.

Unfortunately, all too often what is deemed “essential” is simply what’s convenient to state leaders making the decisions. Few would suggest that liquor store owners are inherently more essential than pizza parlor owners — except perhaps state revenue collectors. No doubt this is the same reason Michigan Gov. Gretchen Whitmer concluded that lottery tickets are essential, but gardening seeds are not.

Liquor stores and lottery tickets aren’t especially “essential” to Americans, just state budgets. But as one Washington State sheriff noted in April, this seems to be the criteria state leaders often use to determine what is “essential” and “non-essential”: whether it helps the government’s bottom line.

When the state picks winners and losers it’s not only unfair, however. It’s also destructive.

In the other piece, J. Kyle deVries points out that government cannot be immunized from the economic harm the shutdown has and continues to inflict on the private sector:

So far millions in the private sector have lost their jobs or have been furloughed — but not many in government have. Many government employees continue to get salaries and benefits despite not working. Their agencies most certainly will not have as much work to do since major portions of the economy are closing down. Many agencies won’t even be needed any longer, but you better believe they will continue to be funded and probably expanded over time. That is outrageous. As we suffer economically, government should not be exempted.

This phenomenon is truly confounding and unfair. After all, government does not exist without taxes and taxes can only come from people who produce and earn a living — in other words, the private sector. The private sector supports government employees who, on average, receive higher pay, better perquisites and much better retirement plans. That should change. As we restructure our economy in the wake of the coronavirus, government should be restructured as well.

Businesses have no guarantee they will remain in business — they must provide their customers with a quality product or service at a competitive price or they will go bust. But government agencies remain in place for life, even if they continue to provide lousy services at outrageous expense. Government needs to show us they are with us during this fight. Part of doing so is to take a hard look at various agencies and departments to see if they can be improved or if they need to be eliminated. Before you say that would be difficult, let’s look at some obvious choices.

May 5, 2020

The perverse incentives of the Wuhan Coronavirus outbreak

Filed under: Economics, Government, Health, Media — Tags: , , , — Nicholas @ 03:00

David Warren has clearly taken his cynical pills today:

The daily count of deaths from the Red Chinese Batflu is among the prized, scare-mongering features of our mass media. I am among those who consider these numbers to be significantly overstated, for a reason that Nikolai Gogol would understand. Each corpse is worth cash to some public authority, usually from a higher authority; and as always, finally from the taxpayers. Each also saves money for government programmes, that can be reallocated to the purchase of new votes. As the corpse providers from this virus are very old, and suffering from other life-threatening conditions, in almost every case, this statistical inflation is easy to perform. Death certificates are issued for any who died with “Covid-19,” whether or not they died from it, and more are then added of those who were never tested. Anything respiratory will do. It’s all judgement calls — on which side of the bread is buttered.

Compare if you will the Hong Kong Flu of 1968 and 1969. I was just reading a memoir, from down that memory hole. The death toll was actually higher then, than ours is now, and from within a smaller population; the victims included children and the young. Yet there were no interruptions in economic life; no public emergency theatricals; and at the height of the second wave of that scourge, we had events like Woodstock. (Those were the days, my friend.)

A neat way to correct for all our “judgement calls” might be to look at overall death rates, and see if they have risen or fallen. It is too early to get a clear view, but soon it may be too late, for vested interests will have tampered with them. All my life I have been learning to trust statistics, less — especially from those who dress in labcoats and affect that earnest look. Sometimes an exception must be considered, however. An unpredictable minority may be honest; some others might get numbers right by mistake.

May 4, 2020

Government “problem solving” is an oxymoron

Filed under: Bureaucracy, Economics, Food, Government, USA — Tags: , , , , , , — Nicholas @ 05:00

Antony Davies and James R. Harrigan explain why you should back away quickly when you hear a variant of “We’re from the government and we’re here to help”:

A central theme of our recent book, Cooperation & Coercion, is that all governments are hamstrung when they attempt to fix problems. Policymakers suffer from the knowledge problem: they don’t know enough to foresee every eventuality that will follow from what they do. Politicians see a problem, speak in sweeping statements, then declare what will happen, assuming their edicts will settle matters. But that is always just the beginning. More often than not, all manner of unintended consequences emerge, often making things worse than they were before their policies went into effect.

Consider the United States’ three high-profile wars against common nouns over the past half-century. Lyndon Johnson declared a War on Poverty in the 1960s, Richard Nixon a War on Drugs in the 1970s, and George W. Bush declared a War on Terror in the early 2000s.

How are those wars working out? Because a back-of-the-envelope calculation indicates that we have spent somewhere in the neighborhood of $23 trillion in our attempt to eradicate poverty, drugs, and terror. Not only have we not won any of these wars, it is unclear that any of them can be won. These three so-called wars have managed to saddle future generations of taxpayers with unprecedented debt. And, as is the case with all coercive endeavors, policymakers ask us to imagine how bad things would have been had we not spent the trillions we did spend. And then they ask for even more money. So now we have unwinnable wars along with institutionalized boondoggles to support them.

We see the same sort of thing happening now in the face of the COVID-19 threat that has induced the largest panic attack in world history. In the name of safety, policymakers have shut down myriad productive endeavors. And there will be a raft of unintended consequences to follow. We are already seeing them manifest, and they portend potential disaster as supply chains fail.

The first cracks in US supply chains appeared in the meat industry. Smithfield Foods, reacting to a number of workers contracting the virus, shut down its Sioux Fall plant. Kenneth M. Sullivan, President and CEO, explained in a press release that, “the closure of this facility, combined with a growing list of other protein plants that have shuttered across our industry, is pushing our country perilously close to the edge in terms of our meat supply.” But it’s not just the meat plant that’s implicated. It’s everyone from the cattle farmer to the person who cooks dinner, and there are a number of people who have a place in that process who might first escape attention. The people who make packing materials needed to ship food, the maintenance workers who service machines up and down the supply chain, the truck drivers who move product from one place to another, the grocers who sell the product, the daycare workers who care for the grocers’ children so the grocers can work, and many, many more are all at risk.

[…]

In declaring some jobs “necessary” and others not, in focusing on one supply chain versus another, policymakers show how little they know about the nation’s economy. In their view, they can simply declare things they want to happen, and then those things will happen. But that is not how economies work. An economy is the sum total of everyone’s activities, and when the government declares that something must happen, all kinds of other things happen too.

Consider how all the “non-essential workers” have been sent home for the past two months. Who gets to declare which workers are non-essential to the economy, and by what standard? Most assumed that politicians had the correct answers to these questions. But, as we are discovering, there is no such thing as “non-essential” workers. All workers are essential. How do we know? Because their jobs existed. Profit-driven businesses do not create non-essential jobs. Those people’s jobs were essential to their employers. Further, those people’s jobs were incredibly essential to the people themselves. They need their wages to pay the rent, buy their food, make their car payments, and for everything else that makes their lives livable.

But policymakers simply declared them non-essential, as if there would be no fallout from that decision.

May 3, 2020

The Great Exhibition of 1851

Filed under: Britain, Economics, History, Technology — Tags: , , , , , , , — Nicholas @ 03:00

In the latest Age of Invention newsletter, Anton Howes looks at one of the biggest popular events of Queen Victoria’s reign, the Great Exhibition:

The Crystal Palace from the northeast during the Great Exhibition of 1851, image from the 1852 book Dickinsons’ comprehensive pictures of the Great Exhibition of 1851
Wikimedia Commons.

On this day, in 1851, Londoners were finally allowed to enter one of the most spectacular edifices to grace their city. Over the previous months they had watched it spring up in Hyde Park — the largest enclosed structure that had ever been built, and made with three hundred thousand of the largest panes of glass ever produced. Set against the blackened, soot-stained buildings of London, the massive glass edifice gleamed. It soon became known as the Crystal Palace.

Although it no longer exists — it was rebuilt in Sydenham, but the new version burnt down in the 1930s — the fame of the Crystal Palace endures. The same goes for the event that it was originally built for, the Great Exhibition of 1851. But, despite that name-recognition, I’ve found that most people don’t really know what the Great Exhibition was for. Yes, it attracted six million visitors in the space of just a few months — an estimated two million people, almost a tenth of the entire population of Great Britain, most of them returning again and again. But why? I must admit, despite having mentioned the event before in some of my work, I’d never really considered it properly before I started researching the history of the Society of Arts.

The idea of such an exhibition in Britain originated with the Society’s secretary in the 1840s, the civil engineer Francis Whishaw. He had seen the use of industrial exhibitions in France, as a means of catching up with Britain in terms of technology. Every few years since 1798, the French government had held an exhibition of its national industries in Paris. The state paid for everything — a grand temporary building, as well as the expenses of the exhibitors — and the head of state himself awarded medals and cash prizes for the bet works on display. Some of the very best exhibitors were even admitted to the Légion d’honneur, France’s highest order of merit. The benefits to exhibitors were so high that essentially every manufacturer wished to take part. In the days before GDP statistics, the exhibitions were thus an effective means of getting a detailed snapshot of the nation’s manufacturing capabilities. An exhibition served as the nation’s industrial audit.

[…]

Although there had been a few local exhibitions of industry in Britain in the late 1830s and early 1840s, there had been nothing on a national scale to rival the French ones. So Francis Whishaw began the work of getting the Society to organise such an event — a national exhibition of industry for Britain. His initial plan came to nothing, partly as he left the Society to take another job, but in the late 1840s the project was resurrected by a new member of the Society, a civil servant named Henry Cole. In fact, Cole almost entirely took over the Society in the late 1840s, turning it into an exhibition-holding organisation. It held exhibitions devoted to particular living artists, on ancient and medieval art, on inventions, and especially on industrial design — what Cole liked to call “art-manufactures”. And, at the 1849 national exhibition in Paris, he adopted an idea that had already been floated for some years by French officials: an international exhibition, to show the industry of all nations.

This was the crucial step. The idea of an international exhibition of industry appealed to the free trade movement in Britain, which had achieved success in the 1840s with the abolition of the Corn Laws. By displaying the products of other nations, the argument went, British consumers would demand that they be able to buy them more cheaply. And free trade would hopefully bring an end to war, too. Free trade campaigners argued that the productive classes of rival nations competed peacefully, simply by trying to outdo one another in the quality and quantity of what they produced. It was the landed aristocracy, they argued, who let the competition become violent, feeding their pride by causing destruction. Thus, a grand exhibition of the products of all nations — the Great Exhibition — would be a physical manifestation of free trade and international harmony: a “competition of arts, and not of arms”.

The Great Exhibition thus had many roles. It was partly born of national paranoia, about French industrial catch-up, as well as about Britain being the first to hold such an event. It was also about exciting competitive emulation between manufacturers, showing consumers what they did not know they wanted, and achieving world peace and free trade. It certainly spurred on dozens of examples of international cooperation. In fact, just the other day I discovered that the first international chess tournament was held in London to coincide with the exhibition. And it served as an audit of the world’s industries, allowing people to judge who was ahead and who was behind. It thereby gave domestic reformers the ammunition to push for changes in areas where Britain seemed to be falling behind, in areas like education, intellectual property, and design. But more on those another time.

May 2, 2020

Drawing some conclusions from our Wuhan Coronavirus experiences

Filed under: China, Economics, Environment, Government, Health — Tags: , , , , , , , — Nicholas @ 03:00

At Catallaxy Files, Justinian the Great provides an expanded list of nine lessons we should learn from our still ongoing Wuhan Coronavirus (aka “Chinese Batflu”, “Kung Flu”, “Bat-biter Bronchitis” and other names our betters insist we not use):

1. Models are not infallible.

When dealing with complex subject matter involving lots of uncertainties, unknowns and data gaps, modelling will almost certainly be wrong. That doesn’t make them worthless but nor does it mean they should be elevated to infallible status and acted upon as though they constitute proof of something.

If we can’t get epidemiological models right involving trajectories of months what is the chance of climate models being correct considering they involve substantially greater uncertainty, unknowns and data problems involving trajectories of decades to centuries?

[…]

2. Experts can get it wrong.

The pandemic has shown that epidemiologists and health experts the world over have got COVID-19 wrong at one stage or another.

The most famous example is the Imperial College model that forecast 2.2m deaths in the United States and over 500,000 deaths in the UK. Critics have argued this was never plausible but it was the catalyst for UK lockdown policy.

[…]

3. Experts can disagree

Experts can disagree and this is normal in science (and policy making).

During the pandemic, health experts across the world have disagreed over epidemiology models (e.g. R0) ranging from thousands of deaths to millions, over treatments (i.e. the efficacy of anti-virals and anti-malarials), over who and how to test (targeted (symptomatic) versus broad based (even antibody testing), how to record cases and fatalities (e.g. Italy counting deaths with COVID the same as due to COVID, Belgium recording deaths suspected to be COVID related but not verified), the origin and nature of the virus (laboratory/synthetic or wet market/natural), over what the public health response should be (full lockdowns, targeted lockdowns, Sweden (minimal) or something in-between), and the susceptibility of children to the virus, leading to divergence on school closures.

[…]

4. The Precautionary Principle – No such thing as a free lunch

The COVID-19 crisis is a classic case of the precautionary principle in action. The policy measures put in place have been justified by the worse case scenarios of epidemic models forecasting mass deaths and hospital systems in collapse. These scenarios have been hyped up by an alarmist media presenting such scenarios / predictions as established fact.

Part of the problem stems from politicians abdicating responsibility for decision-making and hiding behind health experts as human shields. These experts have nothing to gain and everything to lose from underestimating the epidemic. No-one wants to be blamed for hundreds of thousands of preventable deaths.

[…]

5. If you can’t trust the WHO in a pandemic why would you trust the IPCC on climate change?

The neo-liberal (in international relations terms) notion that the UN (and other international institutions) are independent actors working altruistically for the global good has been blown to bits during the COVID-19 pandemic.

The conduct of the WHO and its complicity with China throughout the pandemic has demonstrated what realists have always known, i.e. international institutions are not independent actors, but instead reflect the interests of great powers in the international system.

[…]

6. If you can’t trust the Chinese in a pandemic how can you trust them on climate?

The COVID crisis also demonstrates why should not trust a communist dictatorship to act truthfully, transparently or ethically, much less put global interests above national interests even in times of an international crisis.

If we can’t believe China about infection rates, how can we believe their carbon accounting? If we can’t trust China to reduce the spread of a virus, how can we trust China to reduce the growth in CO2 emissions? If we believe China has captured/corrupted the WHO how do we know it hasn’t captured/corrupted the IPCC? If China will prioritise national interest in a health crisis, why won’t China prioritise national interest in a climate crisis? If we don’t believe China action/excuses in a pandemic why would we believe China action/excuses on climate change? If we can acknowledge China is trying to exploit the health crisis geo-strategically (i.e. South China Sea military manoeuvres) and geo-economically (belt and road and coercive threats), why will it not exploit climate change in the exact same way?

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