Sunday, 2 July 2017

Round-up of the week

I was very busy at work this week; Mrs W was abroad on holiday all week so I was on single-parent duty (which is not that difficult once your kids are school-age) and the weather was nice so sitting in the garden was always the obvious thing to do.

But lots of things caught my eye:

1. From The Sun:

YOUNG families are being milked by councils who are now charging to take away nappies as part of their household rubbish.

The charges – for either big bins or special plastic bags – have been slammed as being unfair on families and could cause fly-tipping.

It is complete nonsense.
- The cost of emptying household bins (and those of most businesses) is surprisingly small, average £100 to £200 per year per household/business.
- If they are going to charge extra for nappies, why not charge extra for everything that people throw away?
- If they are going to levy specific amounts for what people put in the bin, the most efficient way of doing it would be to levy the charge when they buy it new. I covered all that years ago. That largely solves the fly tipping and enforcement issues.

If you want to simplify it and put a number on it, a flat tax of 1% of the value of all the products which households and businesses buy would cover the cost of refuse collection. Seeing as VAT is already 20% on most things, people buying e.g. disposable nappies have already paid for the cost twenty times over.

2. My view is that each election is actually a referendum in which everybody can choose their own question.

So while the Greens and UKIP have had little electoral success (apart from in meaningless EU Parliament elections), they did manage to shift the terms of debate in their favour and the two big parties adjusted their policies accordingly.

That being so, the Tories messed up the election because Labour nearly outflanked them with their two main vote grabbing proposals - "an end to austerity" and "reducing tuition fees". Lots of people voted for the former and they got an extra few million younger people who'd like to see the end of tuition fees.

Hey presto:

From The Guardian:

One of the key architects of David Cameron’s austerity programme has suggested the government must consider tax rises and increased spending on public services to respond to overwhelming pressure on social care, schools and the NHS.

From the BBC:

The Conservatives must "change hard" to win over young voters who backed Labour in June's general election, Theresa May's most senior minister has warned.

Damian Green told Tories to modernise after losing their majority in the general election and trailing behind Labour by 30% among voters aged 18-35... Speaking at the Bright Blue liberal conservative think-tank's conference in central London, Mr Green said a new "city Conservativism" would woo young, metropolitan voters... Mr Green also suggested there was a "national debate that we need to have" about university tuition fees.

This is all tokenism of course, there is no sincerity on either side, but it confirms my suspicion that there is no need for - or any real prospect of - any YPP candidate with Georgist policies to be - or being - elected. As soon as we are getting a few per cent of the vote, the big two parties will modify their policies accordingly to try and put us out of business.

(The most successful UK movement of recent years doesn't even bother having their own party - it's the old age pensioners. They push out simplistic and inherently contradictory slogans i.e. "We have worked hard and paid taxes and saved hard all our lives". The "worked hard and paid taxes" justifies higher old age pensions, plus all the extra NHS spending. The "paid taxes and saved hard" bit is the argument against taxing land values i.e. clawing back inflated house prices. Hang about here - if they really have saved so hard, how come they need hand outs and subsidies? A century of deficit spending suggests they weren't paying enough taxes, doesn't it? But they get what they want because they bother to go out and vote, that's it, one tick every few years, job done, don't bother with silly protest marches, get on with more important things - a winning strategy.)

3. EU v Google.

Disclaimer - I am big fan of Google: their search engine, gmail, Blogger, Google maps, Google translate, Chrome are all free to use, work very well and make the world a better place. I am no fan of the EU for various reasons. But every now and then the EU get it right.

As I said last year, we all now that these supra-national corporations take the piss on corporation tax, which is not actually that important, because they get stung for VAT, PAYE and Business Rates which are more difficult to evade. National governments know this but find it difficult to draw up and enforce rules which would make them pay "the right amount" of corporation tax in any country.

So the EU doesn't bother with all that, it just invents some trumped up anti-competitive practices and fines them a few billion every few years.

From The Telegraph:

The European Union has fined Google €2.42bn (£2.14bn) after a seven-year investigation into claims the technology giant abused its internet search monopoly.

The penalty is the biggest ever competition fine from the European Commission, doubling the previous record handed to Intel in 2009. The EU said Google had broken EU competition law by exploiting the power of its search engine to promote its online shopping service, at the expense of other price comparison sites.

Which doesn't make sense on their terms - it's Google's search engine and they can use it to advertise what they like, surely? You wouldn't expect the Tesco website to carry advertising for competitors.

The real point, which the EU seem to have missed is not just that Google have a competitive advantage that amounts to a monopoly, it is that what they are charging their advertisers is rent. As with land rent, the value arises from agglomeration benefits (same as Air BNB or Uber), consumers use it because so many sellers use it and vice versa. It is surely more efficient for everybody to use the same marketplace for buying and selling, that's fine, what is not so fine is for a third party, to siphon off part of the producer and consumer surplus.

4. On the topic of Google, Microsoft etc, Benjamin' emailed me a link to a splendid lecture by a succesful Silicon Valley insider/investor called "Competition is for losers".

It's fifty minutes long but I watched it all the way through. I gritted my teeth at the appalling typo at 25 minutes 14 seconds; applauded at 31 minutes when he points out that the main beneficiares of the British Industrial Revolution were landowners ("The workers didn't make that much, the capitalists didn't make that much either"). The most telling bit is where he cheerfully admits that competition and free markets are good for society as a whole, but promptly dismisses it as a way for an individual businessman to make money (I didn't make a note of when he says it).

5. Right, I'm off back into the garden, shame to waste the sunshine.


L fairfax said...

When he says landowners, does he mean landowners in general or those who owned the land for the factories. If in general he is wrong as IIRC Agriculture went into recession in the 1870s and has never fully recovered.

Mark Wadsworth said...

LF, he means urban, the massive shift from at to urban land values was well underway by then.

L fairfax said...

Thanks for the clarification. I can certainly believe that was true.