Who Noticed Earth Day?

It was Earth Day yesterday, although you would not have known this in the United Kingdom where politicians are much more concerned about being elected to office than they are in protecting our planet and the environment in which we live.  Continue reading

The Difference Between Pain Relief and Curing the Disease

The House of Commons has solemnly concluded that the United Kingdom does not spend enough money on flood protection. This conclusion was reached after widespread flooding caused many people problems in the last winter. Apparently more money will be spent on flood protection in future, mainly on dredging rivers so that flood water may flow away more freely than before. Of course, if a patient is ill you must relief the suffering as best you can, but relieving the pain does not cure the patient; curing the patient will relieve the pain, but simply giving painkillers will not do much to prevent future pain. Dredging rivers is important pain relief, but does not cure the problem that causes flooding.

Humanity cannot cure the disease whose symptoms include flooding, drought and extreme weather events easily. The medicine that will provide a cure is too unpleasant for humanity to take, even if humanity holds it nose while trying to swallow. The medicine requires humanity to recognise that economic growth in the only way that humanity knows creates the disease and no politician would ever get elected on a platform which proposes to reduce or curtail growth in order to make the planet fit for humanity in several generations time.

Thus will will continue to administer pain killers until, like all pain killers, the drugs no longer work or their side effects prove worse than the pain.

 

 

Russia, China and Future Growth

Ten years ago conventional business wisdom was that if you had to make something you moved the production to China and invested (directly or indirectly) in production facilities in China. Today the position has almost reversed. Production in China has been so profitable that Chinese businesses are encouraged and urged to invest their profits in business in the United States, the European Community and other parts of the world. The Chinese economy has transformed from a branch of the western economy to an economic centre in its own right. Continue reading

As the trains rush past

The current debate about the proposed high speed rail link between London and Lancashire seems to have got into a muddle. It seems that the real advantage of this railway will not be speed but extra capacity. However there are real doubts about whether it will help a revival of the economy outside London.  Continue reading

It is worth sacrificing some money and prosperity for an improvement in things that cannot be measured in money

As China struggles to overcome levels of air pollution that compare with the worst pea souper fogs and smogs of former industrial Britain, I conclude that there is no free lunch and that economic growth has its pitfalls and problems as well as its advantages.   Continue reading

Occam’s Razor Rules

It is snowing in London this morning and there is a bitter wind, more suited to January than March. Our economy is also cold and bitter. We cannot change the weather, although in the long term we can and will change the climate, whether we want to or not and whether we believe it or not. We can change the economy, although the way to change it into something that is more benign and brings more prosperity is not clear. As with the environment, politics interferes with doing what is right for the economy. Continue reading

Such is the Nature of Progress

The World Meteorological Organization is an Agency of the United Nations. It has published data which shows that in 2011 the atmospheric content of carbon dioxide in the world was 390.9 parts per million which is two parts per million more than the atmospheric content of carbon dioxide in 2010. In 2011, concentrations of atmospheric methane (of which 60% is as a release of human activities) reached a record high of 1813 parts per billion. Carbon dioxide measured at Mauna Loa Observatory, Hawaii in December 2012 was 394.28 parts per million. Nitrous oxide also reached a new record high of 324.2 parts per billion. Continue reading

Economic Growth Coffee and Taxes

Germany has announced that it expects its economic growth next year to be very small; it will probably be at the same level as that of the United Kingdom. These are difficult times and although economic growth is one measure of difficulty, it is not the only measure. Much depends on what the growth is and which sector is affected.

Some economic growth is merely the adoption of a new fashion or a new technology. When I first travelled to the United States it was impossible to get a decent cup of coffee anywhere. Coffee was served as merely a slightly flavoured and weakly coloured hot water. It was something that you had to accept and understand that this weak brew was how the Americans liked their coffee.

Later the concept of what Americans called “gourmet” coffee” (proper coffee to Europeans) caught on and the fashion grew.

Chains of aggressively marketed coffee shops grew up, led by Starbucks, out of Seattle. They carried out their business aggressively, swallowing competition by securing the best sites and using their wealth to market their products. They drove out of business many small family run coffee shops, so that the economic growth that arose as a result of the gourmet coffee shop chains was to a large extent illusory, because it came at the cost of economic recession caused by the small family run businesses being closed by the competition. Having grown a successful business Starbucks franchised coffee shops and ensured that they arranged their affair using devices such as transfer pricing and royalty payments to their own associated companies located in tax havens to avoid paying corporation tax in places like the United Kingdom.

That made the UK branch of Starbucks unprofitable, so that the profits were made in places that had very low rates of tax.

We were told that despite billions of turnover in the United Kingdom Starbucks did not pay any corporation tax, and the folk of the United Kingdom thought this unfair and improper. They started to boycott Starbucks and Starbucks as a result saw that they were losing business. Starbucks announced that they would voluntarily pay small amounts of corporation tax, even though they were not liable for it. Continue reading

The Cost of the Olympics and The Recession

Britain is now out of recession and that is good news. Preliminary figures show a third quarter growth of just 1%. Some commentators put the growth down to the Olympic Games ticket sales, but I have no doubt that the tickets sales were of a lesser amount than the lost dales in the retail industry in London and the construction and maintenance industry slow down during the games which was caused by the games taking place in London.

There is other good news; there have been more people in employment and despite the impossibility of small businesses securing finance  from their banks, businesses are managing somehow, although with difficulty.

It is clear that we need to employ people in making things, installing things and servicing things if we are to secure our economic future. It is also clear that we must learn the lessons of the recession, caused by bank and hedge fund speculation. Someone has calculated that people are now £1800 a year worse off than they were in 2008. Most of that money has gone into the pockets of the bankers and hedge fund operators. That is no way to run an economy.

As our economy grows we must ensure that we direct money and therefore growth into the production of things, rather than the production of another giant casino which will impoverish those who are not wealthy. That is the lesson we must learn.

Mr Monbiot’s mistake

George Monbiot is arguing that “they bailed out the banks in days. But even deciding to bail out the planet is taking decades.” Unfortunately Mr Monbiot’s is accurate but perhaps not in the sense that Mr Monbiot writes. Continue reading