Brexit means leaving the EU









The book you should be reading







How we solve Brexit might reduce inequality









In which I learn from Shelter that my flat is unacceptable















Cities as markets—markets as cities

Over at Market Urbanism (one of my favourite sites) economist Sandy Ikeda has a post on the links between markets and cities. In it he references a bunch of recent writing on the links between markets and cities: "Cities aren’t merely convenient locations for markets; a living city (which I’ll define in a moment) is a market, and the first cities probably originated as markets."

He points to Jane Jacobs' view that cities' strength is in their diversity: both in terms of land use—Le Corbusier look away—and in terms of their inhabitants. With different tastes, opinions, skills, abilities, and so on individuals can satisfy each other's demands and preferences. But it goes further:

Now, standard economics teaches us that the differences among economic actors allow them to specialize and trade for mutual gain. This principle is called “comparative advantage,” which is the idea that people should choose those lines of production in which they are the most efficient. That’s fine as far as it goes.
But more importantly Jacobs, and indeed most Austrian economists, see the essence of markets as not merely places that promote efficiency, but as places in which entrepreneurial competition spurs the discovery of new things. That discovery process entails fundamental changes in culture as well as in economic development. Joseph Schumpeter’s phrase “gales of creative destruction” better captures the essence both of living cities and of markets than the standard economic notions of efficiency, comparative advantage, and low-cost production, as important as those are in their limited context.
Living cites and successful markets bring intellectually and culturally diverse people together to their mutual advantage, but they also create conditions in which vast amounts of novel information—about science, technology, religion, music, the arts, and lifestyles—get dispersed very rapidly. That in turn allows all kinds of people, the ordinary and the extraordinary, to experiment and to make new connections among all that information, generating even more diversity and attracting even more people. In this way, cities become “incubators of ideas” and economic growth. The process is highly dynamic, but also very messy and, yes, in a sense inefficient. Most experiments fail. But someone who fails in a city, unlike her counterpart in less-urbanized cultures, need not starve as a result, and there is more likely to be some new opportunity just around the corner.  We see the successes that drive innovation, but the failures are important, too.

Read the whole thing!

Obama right and wrong


Firstly, he is optimistic about the present and the future. "The truth is," he says, "if you had to choose any time in the course of human history to be alive, you’d choose this one."  Agreed.  The world is better than it has been.  "A smaller share of humans know chronic hunger or live in extreme poverty."  Yes, indeed, and the future will be better still because we will make it so by doing more of what it took to achieve that. 

"Humans—through our ingenuity, our commitment to fact and reason, and ultimately our faith in each other—can science the heck out of just about any problem."  Well said.  Human creativity can devise solutions to overcome challenges and improve the world.  Technology can solve problems better, we think, than wishful thinking or pious resolutions.  It can enhance and enrich the lives that future people will live.

Where we part company with him is on the methodology that can bring this about.  He clearly thinks in terms of political action to solve pressing problems. "To clear these hurdles we’re going to need everyone—policy makers and community leaders, teachers and workers and grassroots activists."  Actually some of the groups he mentions are going to be opposing the innovations that can solve problems, a brake on progress rather than a spur to it.  What it is going to need is space for human creativity and ingenuity to develop and flourish.  It is going to need entrepreneurs, and conditions that favour their talents. 

Instead of big projects developed and orchestrated by governments, it is going to need a large measure of the personal liberty that allows people to break out from the norm and seek new things and new ways.  It is going to need property rights, low taxes and regulations to foster growth and innovation.  It is going to need a culture that esteems and rewards innovative problem-solving. 

Governments have a role to play, of course.  But it will not be one of restricting and confining the lives people live and of limiting their choices and their chances.  It will be one of embracing new technologies and allowing those who discover and develop them to be rewarded for doing so.  It will be one that flows with the tide of an unbounded and spontaneous future rather than one that seeks to confine it to preconceived and pre-planned channels.

Marks for attitude, Mr President, but not for methodology.

See the full Wired article here.

Will the Liberal Hillary Clinton Please Stand Up?

Last Sunday's debate showcased attempts by Hillary Clinton and Donald Trump to outdo one another in their commitments to winning at trade, and punishing China for its inadvertent subsidisation of the American construction industry.

The universal acceptance of trade as a zero-sum game was both unexpected, and difficult to stomach. While Trump has promoted protectionism since the 1980s, fearful back then of unchecked Japanese growth, Clinton has long championed trade liberalisation. She supported NAFTA as both First Lady and Senator, contending that “everybody is in favour of free and fair trade. I think NAFTA is proving its worth," and later deeming the Trans Pacific Partnership the “gold standard” of trade deals. 

In a reversal of her earlier positions, Clinton has publicly embraced protectionism during her current presidential campaign, disavowing past support for TPP and NAFTA. During Sunday’s debate, she announced her intent to empower a trade prosecutor to hold China accountable for “illegally dumping steel in the United States” and “putting steelworkers and American steel plants out of business”. While this commitment would seem to put her squarely at odds with her past beliefs, recently leaked excepts from private speeches given to bank executives call her commitment to protectionism into question. 

Addressing the Brazilian Banco Itaú, Clinton expressed her desire for “a hemispheric common market, with open trade and open borders”, and went on to describe the tremendous effort and cooperation required to advance pro-trade policy. Another leaked email, written by campaign pollster Joel Benenson, evidences that Clinton’s decision to oppose TTP was motivated by political, rather than ideological, concerns. Benenson writes; “I accept the position we’re taking but she has generally been more pro-trade than anti and we get (sic) we need politically by opposing this”.

Her public positions are therefore a far cry from those she’s willing to support with friends in the privacy of her living room. While John Cassidy, writing for the New Yorker, describes Clinton’s revealed positions as those of a “hard-headed centrist”, they are effectively neoliberal; removing restrictions on the international exchange of goods and services helps the global poor while providing for the more efficient use of scarce resources. 

During a speech in Cincinnati, Clinton reiterated the protectionist themes presented in her debate speech, telling supporters she would “say no to bad trade deals like the Trans-Pacific Partnership and unfair trade practices like when China dumps cheap steel in our markets”. Leaving aside the fact that anti-dumping laws harm consumers far more than they help producers, or that WTO dispute panels have judged current duties to be illegally anticompetitive, Clinton’s stated opposition to free trade is electorally unsustainable in the long term. 

While Trump may have been able to attract support by getting on TV and letting loose on foreign competition and trade deficits, Hillary can’t. She is supported by a coalition of beneficiaries of trade and immigration. While Podesta’s emails draw focus to the financial sector’s membership in this group, they are hardly the only pro-globalization group upon which Hillary relies. The tech sector requires a steady supply of highly skilled foreign workers, and while republican voters increasingly support protectionism, support for free trade among rank-and-file democrats has increased from sixty to seventy-four percent over the past decade.
While most democrats believe that globalization reduces domestic job security, they consider this an acceptable price to pay for increased standards of living, politicians don’t need to sugarcoat the tradeoffs at all.

Even Bernie Sanders’ supporters expressed skepticism at his claim that open borders were “a Koch brothers plot”. Just imitating conservative protectionism will bring diminishing returns as the gap between democrat and republican support of free trade continues to widen, and tariff-happy democratic politicians may find themselves facing primary challenges from free-traders unencumbered by Trump’s regressive social views. Hillary Clinton has expressed continuing private support for free trade, coming out about her beliefs will bring her in line with the majority of her supporters, and push her party toward a sustainable future. 

Shelter's latest - the Living Home Standard
















But what if subsidies to pharmacies should be cut?








And the specific change here doesn't seem to onerous: 





We'd better get fracking then, hadn't we?








