Vaclav Smil’s Growth – He Gets The Economics Wrong You Know

One of the joys of being a public intellectual (ahem) is that publishers send you freebie books. As the MIT Press has just done with Vaclav Smil’s “Growth” for which I thank them.

In which we find this:

“Although economists have a long history of ignoring energy, all economic activities are, in fundamental physical (thermodynamic) terms, simple or sequential energy conversions aimed at producing specific products or services.”

No, they’re not. And if you start off like this, as he does in his consideration of the economy, you’re not going to get to the right answer either.…

See More

Haven’t We All Got Rich This Past Century?

Quite the most interesting part of this paper to me is the chart in it. Showing quite how rich we’ve all become in this past century or so. Sure, it’s not equally distributed and all that. But this is the first time that the average member of society – OK, so, still only limited to the rich countries – has had any wealth at all. Which is quite an achievement after a few hundred thousand years of trying, no?

See More

Brexit’s To Blame For The British Economy – Odd, Innit?

The reports – cries of pain really- from the Treasury, G. Osborne and all about the immediate and deep recession we’d have if we even thought about leaving the European Union were published everywhere. Cheered from the rooftops even. Certainly, there was much smacking of the lips about how we really would get it in the neck if we had the temerity to differ with our betters.

As we know, it didn’t really turn out like that.…

See More

It’s Almost Like It’s Possible To Have Too Much Government And Tax

That we do need some government is true – we are not anarcho capitalists here. Given that necessity of having a system of who takes out the bins there is also going to be taxation in order to gain those public goods. This is not then to say that more government, more tax, is thus a good thing. It is rather to posit that there’s an optimal amount of both government and the tax to pay for it.

See More

George Monbiot’s Delusion – Capitalism Doesn’t Require Growth Even As It’s Good At It

George Monbiot gives us the latest cool kids reason why capitalism has to be done away with – the environment can’t take it. This being entirely at odds with the actual science here of course, even the science coming from the IPCC. However, it’s worse than that as it’s conceptually wrong as well.

As to the science bit we do indeed have all those International Panel on Climate Change reports. All of which are based on economic models, the best collection of which is still the SRES.…

See More

Interesting – Developing Country Growth Took Off As Inflation Fell

There used to be a lot of inflation in developing countries. Now there’s lots of growth. The two switched in some senses – which is interesting, no?

The great disinflation in emerging and developing economies
Jongrim Ha, M. Ayhan Kose, Franziska Ohnsorge 10 April 2019

Emerging market and developing economies have achieved a remarkable decline in inflation since the early 1970s, supported by robust monetary policy frameworks, strengthening of global trade, financial integration, and the disruptions caused by the global crisis.…

See More

Don’t Let The Government Run Industry – The Chinese Experience

That China has relaxed the governmental grip upon industry in recent decades is true. That China has become very much richer in recent decades is also true. The two are not a coincidence, there’s causality there. However, we hear often enough that it’s the residual control over industry by the government that drives that success. Sure, OK, so the bureaucracy doesn’t specify prices or detailed actions but the general guidance provided by a politically driven bureaucracy explains the outperformance.

See More

You’re Right, The European Union Doesn’t Produce Nor Aid Economic Growth

The idea that being stuck inside a rigid and protectionist zollverein would produce extra economic growth is of course ridiculous. Even though it’s oft claimed that he EU does this. The thing is though if doesn’t. But, worse than that, the EU produces many things which should promote growth, peace being the most obvious. Yet if the EU provides many things which should produce growth and yet the EU as a whole doesn’t then the other things the EU does must be right stinkers, correct?

See More

Domino’s Pizza Has Greater Growth Opportunities Than Apple Does

This is a bit of a surprise. No, not that Domino’s has better growth opportunities than Apple, that’s trivially obvious. Rather, that someone in academia not only notes this but manages to get to the conclusion by the right method. That is, that we don’t in fact know which has the better growth prospects. What we do know though is what is the aggregated opinion of tens of millions of people. And as with Galton’s Ox as long as a market is complete that’s about the best we’re ever going to do.

See More

High GDP Growth With Low Business Investment Is A Good Thing, An Efficiency

The UK economy seems to be growing reasonably, the best for a couple of years at least. It’s also growing rather better than the eurozone, although obviously not as fast as all national components within that average. So, what’s wrong with what is going on? Leave it to The Guardian to get the point wrong:

The UK economy accelerated to its fastest quarterly growth rate in almost two years over the summer but economists warned that with Brexit uncertainties curbing spending, the performance would soon decline.

See More