Economics on Graeme's

Why CO? emissions will keep rising.

Wed, 29 Mar 2023 12:17:19 +0000

We have had many climate change agreements that have not changed anything. The greenwashing was inevitable and to be expected. This graph from Our World in Data says it all: there has been no change in trajectory.

Climate treaties cheat the environment.

Fri, 13 Jul 2018 11:06:35 +0000

Climate treaties suffer from a problem that is pervasive in our society. It is the same problem that is destroying British state schools, makes public sector out-sourcing fail, and cripples businesses. Once you set a numerical target, the metric becomes more important that what it measures.

Not just a CO2 shortage - the economy is broken

Thu, 12 Jul 2018 09:27:19 +0000

Shortages happen. A shortage of a gas that is vital to the manufacture of everything from beer to pain killers may look like just another unfortunate occurrence, but it is really a product of the way a “neo-liberal” economy works: globalisation and centralisation.

What has the EU ever done for us?

Sun, 05 Jun 2016 10:15:59 +0000

What has the EU ever done for us? Mostly, a lot of harm.

Consistently favoured corporate interests over public interests

The EU is far more insulated from public pressure than national governments but even more prone to listening to corporate lobbyists. It is not transparent enough about lobbying for us to even know what the real expenditure is, but we know it a lot. The greatest single case of this is in the supposedly free trade, but really corporate welfare, TTIP treaty which the EU is pushing hard, despite widespread public opposition. Who wants the treaty? Corporate lobbyists. It also binds countries permanently to particular policies, undermining democracy.

Taylor Swift on Apple Music - translated

Mon, 22 Jun 2015 05:41:21 +0000

As Taylor Swift seems to have difficult saying what she means, so I thought I would provide a plain English translation of what she has to say about Apple Music.

The real purpose of DRM

Wed, 27 Mar 2013 13:45:25 +0000

Ian Hickson, maintainer of the HTML5 specification, argues that the real purpose of DRM is to give content providers leverage over device manufacturers. Although this is true for some applications of DRM, in many cases the purpose is to lock customers to particular devices and services, and to raise barriers to entry against new devices and services.

How to fix the deficit, immigration and growth.

Mon, 18 Mar 2013 12:28:58 +0000

My idea, intended for the UK, but possibly applicable elsewhere, will generate a huge amount of government revenue, complete change immigration, and stimulate economic growth. The idea is a very simple: auction residence visas.

The death of equity growth

Sun, 10 Feb 2013 13:36:32 +0000

Future returns on investments in shares will come less from growth in the underlying businesses and more from income. This means that ratings should be lower, and, in particular, we should expect higher yields.

Insider trading IS harmful, but legalise it anyway

Wed, 26 Sep 2012 08:38:46 +0000

The usual argument in favour of legalising insider trading is that it is not actually harmful (or even beneficial) to investors. I think that insider trading is extremely harmful and in-ethical, but it should be legalised anyway. My reasons are the difficulties in enforcing the law, and the probable effects on markets of legalisation.

The innovation slowdown IS a serious crisis

Fri, 04 May 2012 11:25:27 +0000

Rick’s latest post on the creativity crisis raises the possibility that the current slowdown in technological advance is merely a period of adjustment rather than a permanent slowdown. I have three reasons for remaining pessimistic.

The slowdown is historically unprecedented, not just part of a cycle.
The reasons for the slowdown are built into our economy and politics, so it cannot easily be reversed.
Even if this is just a temporary phenomenon, the results could still be catastrophic.

An alternative to pharmaceutical patents

Mon, 30 Apr 2012 07:14:50 +0000

I have thought about this before, but a question my nine year old daughter asked me crystallised the idea. The (already existing) regulatory process can be tweaked to provide an alternative to patents that would make the market more competitive, reduce over-head costs of research, and reduce litigation costs and uncertainties.

How big is the UK's internet economy?

Fri, 23 Mar 2012 03:32:40 +0000

I am entirely unable to understand Boston Consulting Group’s much publicised claim that the “internet economy” contributes 8.3% of UK GDP. They do not define what they mean and I cannot reconcile it with the numbers. Most of the discussion in their document is of online retail so that is clearly important, but lets start with a key question.

The unnoticed megatrend

Sun, 04 Mar 2012 10:20:41 +0000

Investors, and others who try to predict the future, are often fond of thinking in terms of megatrends. Changes in demographics, climate, technology and culture are often discussed. One that I believe to be the most significant of all is rarely mentioned, and I have never seen the implications discussed. It is also hard to accept, because it appears to be disproved by experience.

Free books and media – days 8 and 9

Tue, 26 Jul 2011 01:56:39 +0000

Another uneventful days as far as the books go, but music is going better than I expected.

Free ebooks and video, first day

Mon, 18 Jul 2011 08:50:59 +0000

Yesterday was my first full day of consuming only free media, Its a day and a half since I started. So how is it going?

A month of only free content

Sat, 16 Jul 2011 11:59:26 +0000

For the next month (i.e. from 16th July 2011 to 15th August 2011) I will only read/watch/listen to legally free media (audio, video, books, whatever). The biggest changes will be reading only free ebooks (something I have been doing a lot of lately, anyway) and listening only to free music.

Governments should promote OSS

Thu, 24 Feb 2011 08:50:10 +0000

One would imagine that economists would have learned by now that they need to check their theoretical models against the real world. A recent article arguing that governments need to promote a “balance” between open source and proprietary software, rather than promoting open source, rests on no fewer than five incorrect assumptions, and is easily rebutted by what happens in the real world.

Was Marx right?

Tue, 15 Feb 2011 09:20:51 +0000

One reason that Marx’s prediction that capitalism would lead to increasing inequality, and then failure, was wrong, was that advancing technology lead to increases in prosperity for almost everyone. Slowing technological change will mean an increase in inequality, so Marx may have another chance to be proved right.

The plutocracy is no meritocracy

Tue, 25 Jan 2011 06:52:02 +0000

Many of the spate of recent articles on the super-rich, such as the influential one in The Atlantic have accepted the idea that the plutocracy is meritocratic: the wealth is earned. I have my doubts, and had a look at how and where the richest of the super-rich made their money.

Do the British really hate foreigners that much?

Wed, 08 Sep 2010 13:01:56 +0000

The government has so far come up with two ideas to reduce cap immigration, both of which would be highly damaging to the country:

Let fewer students in
Reduce the number of foreign workers

Take the first as it has had less attention. Educating foreign students is highly profitable for Britain and earns huge amount of money. It is like an extended, and far more profitable, version of tourism.

Great crash and credit crunch similarities.

Sun, 20 Dec 2009 10:59:29 +0000

I have been reading Galbraith’s The Great Crash of 1929 and a lot of similarities have struck me, not all of which seem to have been noticed by everyone.

How to break up oligopolists

Wed, 16 Dec 2009 10:32:43 +0000

The most discussed problem with my proposals on how to fix capitalism is how one decides which companies to break up, and how one goes about doing it. Needless to say, I do have some answers

How to fix the banking system

Wed, 02 Dec 2009 19:42:47 +0000

This is a bit less ambitious than my plan to reform capitalism, but the principles are the same.

Too big to fail is too big to exist

Big banks create too much systemic risk, and are far too much of a strain on government finances when they need to be bailed out.

Two more objections to pharmaceutical patents

Mon, 23 Nov 2009 13:25:27 +0000

My wife suggested an addition to my list of bad incentives created by pharmaceutical patents. It is actually one of two closely related problems. These are possibly the most harmful of all as they can lead to patients directly getting worse treatments, as well as wasting money.

Fixing capitalism: reactions and replies

Sun, 22 Nov 2009 11:33:54 +0000

The reactions to my post on fixing capitalism have surprised me: almost everyone who has blogged or tweeted on it agrees with the broad thrust of what I advocate. For proposals so far from the political mainstream, what does that mean? Perhaps is shows how for the politicians are from a popular demand for change. There also a few points that need replies.

How to fix capitalism

Fri, 20 Nov 2009 11:40:24 +0000

The recession and the crisis and banking are the least of the reasons for thinking that we need reforms. the crisis of capitalism goes much deeper: the influence big business has on governments (and the warped policies this leads to), increasing central control of the economy and the general move away from free markets.. I have some modest proposals on how to fix capitalism.

Two economists on labour and value

Thu, 19 Nov 2009 15:04:51 +0000

I came across two interesting quotes from two famous economists of the 18th and 19th centuries:

I bought my first e-book

Wed, 02 Sep 2009 19:36:34 +0000

It is not the first e-book I have read (no by a long way), but it is the first I have bought. It is (of course) DRM free. It is also a book (actually two books ) I would never have bought if the previous books in the series had not been free downloads.

National Portait Gallery and everlasting copyrights

Wed, 22 Jul 2009 04:44:05 +0000

I had not intended to blog about the National Portrait Gallery threatening to sue Wikipedia over the latter’s publication of copies of paintings in the gallery, as I thought it would be obvious to anyone that this is a blatant attempt to use physical possession of a work to get around the expirations of copyrights. Tactics like this can effectively extend copyright indefinitely.

Google hatred

Wed, 29 Apr 2009 06:37:53 +0000

The usually intelligent Willem Buiter has written a great example of the irrational hatred that Google seems to sporadically evoke. He attacks them with a list of charges, all of which are easily refuted.

Patent on patenting others' inventions

Tue, 11 Nov 2008 08:16:54 +0000

Halliburton (it would be) have patented an aspect of patent trolling: reverse engineering other people’s trade secrets using a patent, patenting the (former!) trade secret and then suing the original inventor.

Why tax havens are fraudulent

Fri, 29 Feb 2008 08:50:08 +0000

I usually enjoy reading Economic Logic, but this post defending tax havens seems badly wrong headed to me. It misses the essentially fraudulent character of tax havens.

Alan Sugar fails to understand education

Mon, 11 Feb 2008 07:20:47 +0000

Alan Sugar has called for “enterprise lessons” in schools. While a capitalist economy may benefit from there being some people like Alan Sugar, I see absolutely no evidence that we need more of them.

Beyond capitalism?

Tue, 15 Jan 2008 12:55:30 +0000

This blog post by an academic economist raises a question that I am convinced we can already see part of the answer to. Industries that have a negligible marginal cost of production (media, software, etc.) demand a different economic system.

Northern Rock should have been allowed to fail

Fri, 14 Sep 2007 10:05:45 +0000

Willem Buiter is quite right to criticise the Bank of England’s bailout of Northern Rock. The message to bank directors and shareholders is quite clear: “take big risks, and if they go wrong the taxpayer will pay for your mistakes, if they work, you can keep the profit”.

Abolish planning laws; solve housing "crisis"

Wed, 22 Aug 2007 10:15:35 +0000

Imagine that the UK had enough housing that every single household occupied a detached or semi-detached house (two thirds of them in detached houses) and all the country’s 12 million currently occupied terraced houses, maisonettes and flats were empty. You might think that to provide so much housing we would need to “concrete over the countryside”, in fact we would need to switch just 2.5% of the UK’s land area to urban residential use. Switching much less would provide a more than adequate supply.

The end of academic publishing

Thu, 26 Jul 2007 07:20:17 +0000

It has been clear to many analysts (including myself) for years that publishers of academic journals were facing the slow death of their business. Despite the view of publishers and the more optimistic analysts that peer reviews journals were irreplaceable, the evidence continues to emerge for a slow, but certain, decline.

Fixed rates will not make housing affordable

Tue, 10 Jul 2007 09:38:29 +0000

I find it hard to believe that encouraging long term fixed interest mortgages, as the government plans to, will really make housing more affordable. Here is why:

The end of the housing affordability argument?

Fri, 06 Jul 2007 07:04:09 +0000

The Council of mortgage lenders says that yesterday’s interest rate raise “will leave more households financially stretched”, with an especially marked impact on the two million people close to coming off fixed rates. Are we hearing the end of the argument that housing remains “affordable” thanks to low interest rates, despite the high ratio of prices to incomes?

Spreading greed

Fri, 29 Jun 2007 10:26:54 +0000

According to economist Robert H Frank, economics students become more selfish as a result of spending years immersed in the study of economic theory that is based on the idea that people act selfishly (or “rationally”, as economists describe it.

What effect does living in a neo-liberal capitalist society that is based on exactly the same assumptions have on people?

Counter-signalling web-sites

Fri, 29 Jun 2007 06:08:24 +0000

Since I read this post on countersignalling, I have been bothered by a feeling that there was a good example I could not bring to the front of my mind. I just realised what it was: ugly websites.

Off-shoring professionals work

Thu, 10 May 2007 10:26:34 +0000

I have blogged before on the increasing off-shoring of professional jobs. The issue continues to attract comment from bloggers, with Richard Murphy arguing against expecting large scale off-shoring of professional work. I think he is wrong.

How to pay CEOs

Thu, 03 May 2007 08:09:40 +0000

Eric Rasmusen has an interesting proposal on how to pay CEOs. I think the underlying ideas is right, but I see one danger in his proposal, and one aspect of motivation that he is missing.

Immigration and the economy

Thu, 03 May 2007 07:33:52 +0000

Putting together the information from these articles from the Christain Science Monitor and the Washington Post, (found via Greg Mankiw’s blog) once more emphasis the enormous economic benefits of immigration. It also demolishes the arguments of those “concerned” about immigration, in Britain as well as the US.

Don't blame the city for job cuts

Tue, 01 May 2007 12:03:32 +0000

It is common to hear the City being blamed for pushing companies into cost cutting strategies. I never really believed this, and now comes some solid evidence that Wall Street does not like job cuts. The City is not likely to be different.

Income inequality and incentives

Mon, 16 Apr 2007 06:21:07 +0000

An article by Robert H Frank on trickle down economics in the NY Times points out that there is little correlation between high earners pay and how hard they work. This is backing for my views on directors pay.

How the economy should work

Fri, 13 Apr 2007 09:02:37 +0000

Fabian Tassano has responded to my post on the problems of the emergence of monopolies and oligopolies in more and more markets. He appears to think it is less damaging than I do, and he also wants to know what I think the best alternatives are.

Low taxes do not attract investment

Thu, 12 Apr 2007 09:25:46 +0000

It appears that cutting corporate taxes does not make a country more attractive to investors. I do not find this surprising. The long term benefits of the right government expenditure (on education, infrastructure and health, for example) are obvious. So why are governments so keen on tax cuts?

Innumerate Polly

Wed, 04 Apr 2007 08:39:26 +0000

Anyone even vague numerate reading this article by Polly Toynbee would would have probably spotted where it went wrong. It is very hard to read it without thinking “surely that £5bn must be a reccuring annual amount whereas as she is comparing it to one off amounts”. David Smith confirms that this is the case.

Where's the perfect competition?

Wed, 04 Apr 2007 07:57:36 +0000

This post at Economist’s View touches on a problem that bothers me. The assumption by economists and policy makers that markets are competitive and efficient.