Sunday, 15 October 2017

Why nationalising the water industry is a stupid idea

Firstly here's Sky News' business editor:
The nadir came when, during the drought of 1976, millions of people in Yorkshire, Wales, the Midlands, East Anglia, Devon and Cornwall had their household water supply cut off due to shortages and were forced instead to queue in the street for water from standpipes.

Privatisation enabled investment. More than £130bn has been ploughed into the industry since 1989 - a sum unimaginable under state ownership - and standards have shot up.

There have been plenty of long, hot summers since but, thanks to investment in new reservoirs and pipes, households have not had to endure their supply being cut off as they did in 1976.
That's the deal folks. Some people made some profits and in exchange we got £130bn invested in our water supplies, sewerage, clean beaches, unpolluted rivers and a pile of other services. That's £130bn that the government didn't have to borrow and you didn't have to pay taxes for.

Next, let's look at what happens when government runs the water supply:
According to a class-action lawsuit, the state Department of Environmental Quality was not treating the Flint River water with an anti-corrosive agent, in violation of federal law. The river water was found to be 19 times more corrosive than water from Detroit, which was from Lake Huron, according to a study by Virginia Tech.
Since the water wasn't properly treated, lead from aging service lines to homes began leaching into the Flint water supply after the city tapped into the Flint River as its main water source.

Health effects of lead exposure in children include impaired cognition, behavioral disorders, hearing problems and delayed puberty. In pregnant women, lead is associated with reduced fetal growth. In everyone, lead consumption can affect the heart, kidneys and nerves. Although there are medications that may reduce the amount of lead in the blood, treatments for the adverse health effects of lead have yet to be developed.
Nationalising Britain's water services is a really stupid idea.


Is our future suburban?

Interesting little article by Tyler Cowan:
As American travel infrastructure decays, and traffic congestion worsens, what we used to call cities and suburbs won’t be able to rely on each other so much, as trips become too exhausting and time-consuming. That too will encourage cities and suburbs each have their own mix of jobs, retail and cultural opportunities.
I suspect he makes the point more strongly that will be realised - elite culture (and other elite institutions) will remain in the cities as will the wealthy elite that populate them. But the everyday sort of leisure and pleasure, what most of us do mostly, will be more evenly spread especially in centre urban rents continue to climb.


Saturday, 14 October 2017

If it's such a good idea, Jeremy, set one up...

The leader of the Labour Party has been talking about business (while smiling benignly at his youth wing who want to nationalise Greggs). He tweeted this:
Imagine an Uber run co-operatively by their drivers, collectively controlling their futures, with profits shared or re-invested.
Splendid. There are some great worker-owned businesses - John Lewis, Arup and so forth - although none of them started that way. But the implication of Corbyn's comments sound a little more sinister - even a hint of some form of nationalisation for dear old Uber.

But seriously, if it's such a good idea to have a ride share co-op, Jeremy, why not set one up? No-one's stopping you (except maybe the Mayor of London and his Black Cab mates).


Friday, 13 October 2017

There is no "will of the people"

This is true:
The point of democracy is not to discover and implement the so-called “will of the people,” for no such thing exists (as proven, among others, by Kenneth Arrow – who was no libertarian or classical liberal). Instead, the point of democracy is to give each individual a say in making collective decisions.

52 things that are more important than Brexit - including mushrooms

I know it seems that Brexit (or not-Brexit for that matter) is the most significant and momentous thing that has happened anywhere or anywhen. The chattering classes have nothing else to talk about - everything from the cost of coffee to the price of a flat in Mayfair is washed through the "what does this mean for Brexit" mill. Well I'm here to suggest that when other folk look back at 2017 in fifty years time they'll see some other things that were more important to the future of mankind - even of that small bit of mankind living in the UK.

I did a little list of those things that might be more important than Brexit.
  1. Driverless cars and autonomous transport technology
  2. Neo-Luddite campaigns opposed to digital disaggregation, AI and robots
  3. Better drones enable African development without roads or rail
  4. Electricity supply systems (power supply, microgeneration, disagregation, off-grid)
  5. Fracking, renewables lead to declining reliance on oil (impact on economy, on geopolitics)
  6. Private space travel
  7. Colonising Mars
  8. Non-national living, seastedding, artificial islands, cruise living
  9. Declining fertility rates in rich countries
  10. Continuing population pressures in poor countries
  11. Migration from poor places to rich places
  12. International migration, people trafficking, refugees
  13. Integration and community cohesion in a world with more migration
  14. Food production and distribution - feeding the world: GMO, animal welfare
  15. Changing diets as poor nations become richer
  16. Big killers - malaria, AIDS, and so forth
  17. Antibiotics
  18. Medical technology
  19. Continuing urbanisation with associated health and societal problems
  20. The future of care and health provision in an ageing society
  21. Loneliness
  22. Declining rates of functional literacy as technology reduces need to read and write
  23. Ideological bias in education - especially higher education
  24. Decline in religious worship leading to more extremism from faith groups
  25. Intellectual property, copyright and piracy
  26. Scientifical and technical literacy
  27. Cyberterrorism, cybercrime and cyberwar
  28. Pornography and sexual exploitation
  29. Women's rights
  30. Rogue states, civil war and terrorism
  31. Break up of established nations - Spain, Italy, UK, USA?
  32. Climate change - resilience, technological response, economic impact
  33. Environmental degradation, desertification
  34. Reforestation, rewilding
  35. Flooding and flood mitigation
  36. Water supply and water quality
  37. Pollution of the oceans
  38. Digital disruption of elite white collar business (law, accountancy, banking)
  39. FinTech and its challenge to central banking system of financial management
  40. 3D Printing and associated technologies
  41. Impact of Internet of Things on human productivity
  42. The 'gig' economy, self-employment - rights and protections
  43. Chinese monopoly of African resources
  44. China becoming a net importer of goods
  45. Remote warfare - drones, military robots
  46. Nuclear proliferation
  47. Mushrooms (or rather fungi in building, medicine and environmental management)
  48. Nanotechnology
  49. Biotechnology including 'bionics'
  50. Break up of blue collar/white collar political order
  51. Impact of digital technology on democratic institutions
  52. England winning the World Cup (well we can dream!)


Wednesday, 11 October 2017

Not sure this is about Brexit

Although we can rest assured that people will say that it is:
Realtors who thought that London’s luxury-home market would be kick started by the pound’s fall after the Brexit referendum are being left disappointed.

Sales of houses and apartments in the U.K. capital’s best districts rose less than 0.5 percent in the three months through September from a year earlier, according to data compiled by researcher Lonres. That’s based on transactions for existing homes and new properties being sold on by speculators.
This is a report about the top end of the housing market - homes on the market at £5m or more. Seems to me that if you're a footloose Anywhere Man or Woman then you've quite a choice as to where you spend the £5m or so you've got for a house. From Shanghai and Tokyo to Dubai or Singapore those Asian billionaires have a growing choice and there's also the US options or even places in Europe. And this is before we consider country piles or Tuscan villas.


Monday, 9 October 2017

The case for Devo (Akron, Ohio version) - can we get satisfaction?

Aaron Renn headlines his commentary "Their Problems are not Your Problems" by which he means that basing our economic policies on the needs of superstar cities (New York, London, San Francisco and so on) rather ignores what's going on elsewhere. Renn cites an article by David Zipper:
If you live in a place like San Francisco or New York where urban tech startups (and, ahem, national media) are concentrated, these conflicts seem to be reshaping cities throughout the country. But if you dig a little deeper, it’s clear that’s hardly the case. With fewer than twenty new homes built in a city of 200,000 last year, Akron recently abated property taxes for new housing as a way to prop up the construction market. Many of Akron’s leaders would love to have the problem of excessive housing demand that Airbnb has allegedly created.
There are probably more places more like Akron than like San Francisco yet our discussion about public policy is still dominated by the problems of the latter (housing costs, transport investment, disruption and the gig economy, etc.) except for vague references to other places being 'left behind' with their people being unsuited to the shiny and exciting new economy being forged in the Superstar Cities. And when (as Trump did by unpicking some of the energy greenery policies promoted by his predecessor) policies do lean towards a place like Akron, they are attacked by politicians based in those superstar cities.

Right now in the UK we're in the throes of another somewhat occult but rather important debate linked to our planning system. The national government is consulting on a standardised methodology for the 'objective assessment of (housing) need' or OAN. For the layman this is the way in which the planners (backed up by lucrative consultancies selling macroeconomic models) decide on the number of houses that need building in a given 'local planning authority' or LPA. The reason for this new system is pretty straightforward - without a great big stick lots of those LPAs won't be allocating anything close to the amounts of land needed to meet housing need in their area. We're solving a problem for San Francisco (or London) rather than a problem for Akron (or Burnley if you'd rather).

The case for devolution - appropriate because the splendid 1970s semi-punk band, Devo came from Akron - is very clear when you realise the extent to which near every policy in England is determined by the needs of London and a few other over-heating places. It's not just the obvious stuff about housing and transport but also things like health systems, benefits and policing that get policies designed for London, Cambridge and Brighton rather than Bradford, Oldham and Stoke. Despite this case, the English programme of devolution is ridiculous consisting as it does of 'coalitions of the willing' competing through 'asks' for the few crumbs of power central government is prepared to give up.

I guess this brings us to the real deal in devolution - taxes, benefits and regulation. There's a debate in the UK about returning business rates to local councils (note this is the cash not the ability to set the rate) but no-one has raised the question as to whether local councils should get other taxes devolved - stamp duty, for example - or whether things such as planning and licensing policies should be locally determined rather than constrained within a tightly drawn national framework. Akron could zero property taxes to incentivise development but such an option isn't available to Burnley. In the 1960s, Singapore could use corporation taxes and investment exemptions as a way to attract business investment - Leeds and Manchester can't. We talk about the 'Celtic Tiger' but fail to notice that it was low taxes and business-friendly regulation that made those big tech companies head to Ireland (the EU noticed as they're busy trying to clobber the Emerald Isle for having the audacity to be creative in order to develop its economy). None of these policies are available to the North of England (even the bits with Heseltine's mayors) - we don't even get to decide which roads get improved first, we just get a promise of a meeting with the national agency responsible. Same goes for flood defences, for health services and for education investment.

For the North of England - or for it's constituent regions - the case for devo rests with the fact that, without real devolved powers, policy will always be determined by the demands of England's superstar city, London. And, right now, the devo deals on offer involve elected mayors with limited (now officially termed "soft") power and not much else. It may be that the Two Andys will transform Birmingham and Manchester by sheer force of personality but I suspect that real devolved power - even what Wales has got would do, we needn't go full Scots - would be a deal more effective as a way of transforming the economy and society of England's provinces.