Thursday, August 17, 2017

The Great Evils in Society: 1942 and 2017

In 1942 William Beveridge MP was given the responsibility to find out what was needed for Britain to take care of the basic needs of the people and create a set of reforms that would look after the basic needs of the people giving everyone a basic standard of living.

In his report, Beveridge proposed a new system of social security, which would include everyone and provide benefits 'from the cradle to the grave' and tackle what he saw as the 5 Giant Evils of society.

The Five Giants

Beveridge believed that want, disease, ignorance, squalor and idleness stood in the way of social progress.

GIANT EVILBeveridge in 1942
WANTToo many people were living below the poverty line
IGNORANCEToo many children left school at 14 without any qualifications and went into low paid jobs
SQUALORMany people lived in overcrowded slums and there was a shortage of good houses
DISEASEMany people suffered from poor health because they could not afford medical treatment
IDLENESSUnemployment was very high before the war and caused poverty

To fight these giants a proper system of sickness and unemployment benefit was needed. This would include a proper national health service, family allowance and a full employment policy.

GIANT EVILin 2017 (???)
WASTEObscene levels of consumption (structured into an economy that requires waste to distribute resources equitably)
IGNORANCESocial expectations and advertising are highly unrealistic - low uptake of opportunities - evil agencies
AGEINGNeed for care and financing of the ageing population
DISEASEObesity and sedentary living - drunkeness, tobacco and opiates
IDLENESS (automation)Economy may not provide meaningful jobs for the skills and capacities of all people
POLLUTION and EXTINCTIONSGreenhouse gases, habitat loss and depletion of biodiversity - owing to reliance on inefficiencies and resource intensive infrastructure

To fight these giant evils a proper system of allocation (economy) that rewards all virtues and an ecosystem services policy is needed. This would include a proper set of behavioural signals and incentives. And, coordination of the monetarised sector with ecosystems and with the family sector.

GIANT CHALLENGESConservative Party 2017 Election Manifesto[comment]
1. The need for a strong economy.We need to make the most of our existing strengths, invest in infrastructure and people, and ensure that the whole of our economy across the whole of our country can grow. Without a strong economy, we cannot guarantee our security, our personal prosperity, our public services, or contented and sustainable communities.l.o.c. - meaningless bollocks - ?more is better?
2. Brexit and a changing world.We need to deliver a smooth and orderly departure from the European Union and forge a deep and special partnership with our friends and allies across Europe. As there is increasingly little distinction between domestic and international affairs in matters of migration, national security and the economy, Britain must stay strong and united – and take a lead in the world to defend our interests.l.o.c. - meaningless bollocks
3. Enduring social divisions.For too many people, where you end up in life is still determined by where you were born and to whom. We need to make sure that everyone has the opportunity to make the most of their talents and hard work, whoever you are and wherever you are from.an important challenge
4. An ageing society.We need to respond to the reality of an ageing society, giving people security in old age and caring for those with long-term health conditions, whilst making sure we are fair to younger generations.an important challenge
5. Fast-changing technology.For the sake of our economy and our society, we need to harness the power of fast-changing technology, while ensuring that our security and personal privacy – and the welfare of children and younger people – are protected.an important challenge

Tuesday, June 28, 2016

I file emails, why can't I file webpages?

Google! I file away my emails, so why can I not easily file away web pages that I have visited (into my cache)? On all browsers and devices.

Thursday, March 24, 2016

SUV's and Cleantech Events - Sustainability

In Cambridge, UK, we work to address the issues of our era. It was, one-time, a centre of the Reformation and home to Erasmus, and lately host to the discoveries and sequencing of DNA.

So today we have Cambridge Cleantech (www.cambridgecleantech.org.uk) and the Cambridge Institute for Sustainability Leadership (www.cisl.cam.ac.uk).

And, until recently, there was the Cambridge Centre for Climate Change Mitigation Research (4CMR), headed by the very keen Prof Doug Crawford-Brown. However the inertia and reluctance to spend anything means that change in Cambridge is moving at a glacial pace, unlike global warming, which is fast outpacing any move to mitigation.

In this context I wonder how does the media impact of "SUVs New York auto show" (eg [1]) (or "Iran to buy 100 Airbus") compare to the overall media impact of cleantech?

How will it be possible to change the main game (which might soon be the survival of humanity)? And, what is the main game (which might be winning tokens for myopic shareholders, Trump and Islamic loons)?

Or is there, actually, no hope?

[1] www.usatoday.com/story/money/cars/2016/03/22/suvs-take-center-stage-new-york-auto-show

Tuesday, January 26, 2016

Hollowing and the Assets Bubble - FT letter - not published

Letter to the Financial Times - January 18th 2016

Sir

The hollowing of margins (Sainsbury's Home Retail bid, FT 17 January), and the end of the growth funding scheme (Zoellick/Rogoff, FT 18 January), might be a harbinger of bigger needed adjustments.

The only way that the giant grocery retailers in the UK might survive the onslaught of our heavy discounters is through ruthless cost cutting. So how soon will we see robotic grocery pickers and stackers? And driverless taxis - which it will be trivial to build for retrofit - using the algorithms of Google, Mobileye or Delphi and off-the-shelf hardware?

But where will that surplus, which formerly went to employees, accumulate. In a hollowed out world, where needs are met by the few, it will not trickle to the least skilled humans, or to the less resource rich regions.

And the model, of perhaps the last 160 years where redistribution flowed from growth financing, has probably reached it's logical conclusion in absurd asset bubbles.

In this context redistribution - through explicit wealth, and consumption, taxes - will grow in urgency. Likely when we face calamity. And the time will come when we are surely driven to devise allocation systems beyond just "rewards for productivity, and for frugality".

Mark Reader
Cambridge

Twitter: @READER_MA

Wednesday, November 25, 2015

Capturing Rents, or Creating Wealth?

Real wealth consists of tangibles, like cars, food and commodities, as well as of services like social care (of which we can only provide so much). This real wealth can only be consumed if its creation is adequate. We can't consume wealth that has not been created. So wealth creation really matters.

People's needs, however, are unrelated to the levels of wealth created in the economy. These needs are finite. Being physiological, social and intellectual (ie identity/spiritual). However as primates of 60-90kg we tend to be rather limited in perspective and so can be greedy, self-seeking, narcissistic and often inconsiderate. Especially when confronted with a choice of placing a small burden on many others and extracting a large personal benefit. Or, particularly, in avoiding a large perceived personal loss.

Thus, when confronted with a choice of paying the full cost, or of placing a burden on society, students in South Africa felt that education should be seen as a low cost "right" (#FeesMustFall). However, there are very real direct costs and great opportunity costs in providing education. An excessive education sector will reduce wealth creation - and so, necessarily, will deprive other people of the fruits of the economy - and make most people poorer.

Similarly in the outsourcing dispute in South Africa (#OutsourcingMustFall), which was framed as black workers getting their rights - but, actually, doing away with outsourcing just redistributes money (ie tokens or promises to pay) (and the consequent consumption) without any compensating increase in wealth creation. And, in practical experience, will lead to losses of efficiency. It was a dispute about pure economic rents - in other words about capturing a surplus - pitted against efficiency savings and so consequently against wealth creation.

This socially engendered sense of entitlement to rights, and of passive expectations, may be the fundamental defect in the South African economy.

Fortunately markets (which arise legally or otherwise for scarce resources or real wealth) give incentives to be: i) productive (with rewards for efficiency and wealth creation); and to be ii) frugal (being able to access more resources or real wealth, by spending less). And the scarcity of resources usually leads to crisis, so that pure rents tend to be swept away in history.

What South Africa, and perhaps the whole world, needs is some way to reward virtue (or "being good") rather than the narrow perspective of the market (just productive and selfish). The students and strikers lose nothing by disrupting exams and lessons - but destroy much real wealth. As well as do damage to norms and values, that maintain a just society.

Tax - a fraction of the flow of money (promises to pay) in the economy - seems to be an inadequate source of financing redistribution by the state (which is absolutely fundamental to just society). So we see addictions to growth through deficit financing - with all of the undesired incentives for excessive consumption and obscene waste. For this, there are likely better types of economy (allocation system), beyond capitalism and socialism.

And the appeal of rents - pure redistribution or capture of surplus - leads to imposing short-sighted burdens on the rest of society (like "cheap education" and "ineffective services"). In this situation it is the poor and truly deprived who suffer most, because education is underprovided and less wealth is created.

As the elite of the next generation, and leaders, one would hope that students and activists can see the full cost of these short-sighted actions. And be insightful and considered, rather than follow the examples of obscene rent capture we see by financial and political elites.

But appeals of seemingly simple matters of "rights" often obscure the bigger picture of norms, wealth-creation and redistribution.

Friday, September 11, 2015

Eat Every Bit

Thank you for asking for my dietary requirements.

Personally I eat virtually anything.

But our common diet, and the media propaganda, drive staggering waste of food and so of animal lives. Which create much avoidable suffering.

Hence disproportionate cuts of meat, like cheap chicken breasts and unrealistically cheap steaks, see huge amounts of perfectly good food go to waste.

For which animals suffer. That care for their young, and experience joys and pain. Rejecting over half the animal does not respect their being.

Hence my preference is for cuts like chicken thighs, haggis, tendons and stewing meats. As well as cheap burgers and especially sausages.

The respectful spirit of these is far more wholesome and virtuous than the disrespecting blindness of supposedly luxury cuts.

Please pass this on to your chef.

Wednesday, May 6, 2015

"Good-will" and harsh lessons

-- economic allocation --

Rupert Read (Green Party Transport Spokesperson, and chair of the UK think tank "Green House") says that "we must let go of this 'trickle-down' nonsense once and for all" (Guardian Sustainable Business, 23 March 2014 gu.com/p/46pkd). He identifies fundamental failings in our economic and biological systems, but fails to deal with very harsh lessons that humanity has learned over centuries.

Namely how to adjust for human tendencies to sloth, selfishness and righteous indignation.

As we saw in Soviet countries, and as we see today in South Africa's state education, relying on good nature breaks down. Owing to small indignities and to free-riding by the selfish minority.

A strength of market economies is that they reward productivity and frugality. Today, however, these are perverted with incentives for waste, obesity and imaginary economic activity. In order, I suspect, to keep deficit financing viable (by the government, for those who cannot be productive).

A further problem with rewarding productivity is that, as virtually any economic modeller will tell you, all of the wealth and all of the resources usually end up in the hands of only one producer.

To get around that, biblical writers suggested Sabbath years (when all debts are forgiven and land is redistributed). But this does great harm by eating up incentives to save.

In Islam Zakaat is promoted - where everyone should give, to the poor, 3 percent of their wealth each year. Which leaves grinding poverty among the majority.

Hence it seems to me that the fundamental question should be "How can we redistribute (provide for those who cannot work) - while maintaining incentives for productivity and frugality - and keep families and financing of the state viable?"

All economists agree, I think, that growth (which is inevitably exponential) cannot continue indefinitely. Owing to physical limits on resources. Which we see today in the Guardian's recognition of deadly climate change.

The Green Party, and many economist-philosophers like Rupert Read, do not address the question of incentives. And hold up, the old mirage, of enduring good-will.

Perhaps the Templeton Foundation, the NEF or the Aldersgate Group, will do helpful research on the topic.