This was before helicopter parents

Source: When Kids Played With Alligators in Los Angeles | Smart News | Smithsonian.

$1/2 billion in customs duties still collected in New Zealand!

In the course of feuding with strangers on Twitter about how much tariff revenue is still collected in New Zealand, I discovered that the revenue from customs duties are less than I recall but more than most think. These customs duties are distinct from any GST collected at the border by New Zealand Customs.

Source: Tax Outturn Data — The Treasury – New Zealand.

Source: Import Tariff Levels After 2015 Cabinet Submission by Minister of Commerce.

There is a God! @AlboMP and @tanya_plibersek could lose their seats to Greens at the next election

Source: Do it | Catallaxy Files.

Similar karma here. The deputy leader of the New Zealand Labour Party wins his seat because the Greens do not fight for it. The co-leader of the Greens happens to contest that seat. The Greens win or almost win the party vote in that electorate for several elections now.

Sales of Electric Vehicles | The End of Traffic and the Future of Transport

Transportist by David Levinson

In the early 2000s, Hybrid-Electric Vehicles (HEVs) started to become visible (especially in California), overcoming the range concerns as  electric power would be used on city streets, and the ICE could recharge the battery, at somewhat higher sales price than conventional vehicles. As shown in Figure 5.1, US sales are generally rising, but are still small for Hybrids and Electric Vehicles.  Sales outside the US are similarly low.   From Levinson and Krizek (2015) The End of Traffic and the Future of Transport. http://davidlevinson.org/the-end-of-traffic-and-the-future-of-transport/    Figure 5.1 Source: Electric Drive Transportation Association (2015) Electric Drive Sales Dashboard http://electricdrive.org/index.php?ht=d/sp/i/20952/pid/20952. In the early 2000s, Hybrid-Electric Vehicles (HEVs) started to become visible (especially in California), overcoming the range concerns as electric power would be used on city streets, and the ICE could recharge the battery, at somewhat higher sales price than conventional vehicles. As shown in Figure 5.1, US sales are generally rising, but are still small for Hybrids and Electric Vehicles. Sales outside the US are similarly low.
From Levinson and Krizek (2015) The End of Traffic and the Future of Transport
Figure 5.1 Source: Electric Drive Transportation Association (2015) Electric Drive Sales Dashboard .

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Leading questions on the Paris climate treaty

Watts Up With That?

We should lead from behind – instead of with brains in our behinds – on this new Treaty of Paris

Guest essay by Paul Driessen

What an unpalatable irony. The 1783 Treaty of Paris ended the Revolutionary War and created the United States. The 2015 Treaty of Paris could end what’s left of our democratic USA – and complete the “fundamental transformation” that the Obama Administration intends to impose by executive fiat.

Meanwhile, as a prelude to Paris, October 24 marked a full ten yearssince a category 3-5 hurricane last hit the United States. (Hurricane Wilma in 2005; Sandy hit as a Category 2.) That’s a record dating back at least to 1900. It’s also the first time since 1914 that no hurricanes formed anywhere in the Western Atlantic, Caribbean Sea or Gulf of Mexico through September 22 of any calendar year.

Global temperatures haven’t risen in 18 years…

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The Paradox of Revolution

Let A Thousand Nations Bloom

vladimir_lenin_quote

A buddy of mine coined the term “underthrow the state.” I use it all the time. What the hell does it mean? Shouldn’t we overthrow bad governance? Revolutions are bad for all sorts of reasons, but one under-appreciated reason we shouldn’t try to overthrow anything is because it’s not practical–too many free riders and bad incentives. Philosopher Gregory Kavka via Gordon Tullock:

Imagine a small country in which a small elite rules over and exploits the vast majority of the citizens. All the members of the exploited group know that if they acted together, they could easily overthrow the present regime and set up a new and just government that would better serve their interests. Furthermore, the elite regime has not rendered the exploited so fearful that they fail to communicate their dissatisfaction to one another. Initially, it seems obvious that, if the members of the exploited group are…

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What’s the difference between embedded neoliberalism and Director’s Law of public expenditure?

I learnt a new word today off the back of Jane Kelsey winning a $600,000 Marsden grant to study embedded neoliberalism and her latest transnational conspiracy theory about trade agreements.

I’ve never heard of embedded liberalism before today despite a keen interest in popular and academic news. I don’t think I’m poorer for that ignorance but let’s push on. According to that source of all knowledge and truth Wikipedia, embedded neoliberalism’s been around for about 35 years:

Embedded liberalism is a term for the global economic system and the associated international political orientation as it existed from the end of World War II to the 1970s. The system was set up to support a combination of free trade with the freedom for states to enhance their provision of welfare and to regulate their economies to reduce unemployment. The term was first used by the American political scientist John Ruggie in 1982.[1]

Mainstream scholars generally describe embedded liberalism as involving a compromise between two desirable but partially conflicting objectives. The first objective was to revive free trade. BeforeWorld War I, international trade formed a large portion of global GDP, but the classical liberal order which supported it had been damaged by war and by the Great Depression of the 1930s. The second objective was to allow national governments the freedom to provide generous welfare programmes and to intervene in their economies to maintain full employment.[2] This second objective was considered to be incompatible with a full return to the free market system as it had existed in the late 19th century—mainly because with a free market in international capital, investors could easily withdraw money from nations that tried to implement interventionist and redistributive policies.[3]

The resulting compromise was embodied in the Bretton Woods system, which was launched at the end of World War II. The system was liberal[4] in that it aimed to set up an open system of international trade in goods and services, facilitated by semi fixed exchange rates. Yet it also aimed to “embed” market forces into a framework where they could be regulated by national governments, with states able to control international capital flows by means of capital controls. New global multilateral institutions were created to support the new framework, such as the World Bank and theInternational Monetary Fund.

Source: Embedded liberalism – Wikipedia, the free encyclopedia.

Decoding Marxist rhetoric is never easy, but I think what these academic Marxists are trying to do is describe the rise of the mixed economy and the welfare state over the course of the early and middle parts of 20th century.

The welfare state was never an easy thing for your card-carrying Marxist looking forward to the immiserisation of the proletariat as the trigger for the proletarian revolution.

Embedded neoliberalism mostly all about what Aaron Director in the 1950s explained as the reasons for the growth of government in the 20th century. He put forward what George Stigler label for him Director’s Law of Public Expenditure. George Stigler published an article on this law because Aaron Director published next to nothing for reasons no one understands. Director founded law and economics through teaching law classes at the University of Chicago law school.

Sam Peltzman pointed out that most of modern public spending is supported by the median voter –  the ‘swinging’ voter. He observed that governments at the start of the 20th century were a post office and a military; at the end of the 20th century, governments are a post office, a larger military and a very large welfare state.

Studies starting from Peltzman in 1980 showed that governments grew in line with the growth in the size and homogeneity of the middle class that was organised and politically articulate enough to implement a version of Director’s Law.

Director’s Law of public expenditure is that public expenditure is used primary for the benefit of the middle class, and is financed with taxes which are borne in considerable part by the poor and the rich. Based on the size of its population and its aggregate wealth, the middle class will always be the dominant voting bloc in a modern democracy. Growth in the size of governments across the developed world took off in the mid-20th century as the middle class blossomed. Peltzman maintained that:

“The levelling of income differences across a large part of the population … has in fact been a major source of the growth of government in the developed world over the last fifty years” because the levelling created “a broadening of the political base that stood to gain from redistribution generally and thus provided a fertile source of political support for expansion of specific programs. At the same time, these groups became more able to perceive and articulate that interest … [and] this simultaneous growth of ‘ability’ served to catalyse politically the spreading economic interest in redistribution.”

After the 1970s economic stagnation, the taxed, regulated and subsidised groups had an increasing incentive to converge on new, lower cost modes of income redistribution.

  • economic reforms ensued, led by parties on the left and right, with some members of existing political and special interest groupings benefiting from joining new coalitions.
  • More efficient taxes, more efficient spending, more efficient regulation and a more efficient state sector reduced the burden on the taxed groups.
  • Most of the subsidised groups benefited as well because their needs were met in ways that provoked less political opposition from the taxpaying groups.

Sweden, Norway and Denmark could be examples of Gary Becker’s idea that political systems converge on the more efficient modes of both regulation and income redistribution as their deadweight losses grew in the 1970s and 1980s and after. Unlike some of their brethren abroad, more of the Nordic Left and, more importantly, the Nordic median voter were cognizant of the power of incentives and to not killing the goose that laid the golden egg. Taxes on income from capital are low in Scandinavia.

The rising deadweight losses of taxes, transfers and regulation all limit the political value of inefficient redistributive policies. Tax and regulatory policies that are found to significantly cut the total wealth available for redistribution by governments are avoided relative to the germane counter-factual, which are other even costlier modes of redistribution.

An improvement in the efficiency of either taxes or spending reduces political pressure from taxed and regulated groups for suppressing the growth of government and thereby increases total tax revenue and spending because there is less political opposition. Efficient taxes lead to higher taxes.

Improvements in the efficiency of taxes, regulation and in spending reduce political pressure from the taxed and regulated groups in society. This suppressed the growth of government and thus increased or prevented cuts to both total tax revenue and spending since 1980. Economic regulation lessened after 1980 and there were privatisations, but social and environmental regulation grew unabated. Certainly in New Zealand the post-1984 economic reforms followed a good 10 years of economic stagnation and regular economic crises:

In the early 1980s, New Zealand’s economy was in trouble. The country had lost its guaranteed export market when Britain joined the European Economic Union in 1973. The oil crisis that year had also taken a toll.

The post-1980 reforms of Thatcher, Reagan, Clinton, Hawke and Keating, Lange and Douglas and others saved the modern welfare state for the middle class. Most income transfer programmes in modern welfare states disproportionately benefit older people. With an aging society, that trend can only continue. That is why these reforming policies survived political competition, election after election. The political parties on the left and right that delivered efficient increments and streamlined the size of government were elected, and in turn, got thrown out from time to time because they became tired and flabby.

The rest of embedded neoliberalism is trying to explain widespread economic deregulation and liberalisation of international trade along with the continual growth of social regulation. This is something that Gary Becker, George Stigler and Sam Peltzman have written on previously.

The continued growth of social regulation is best explained by the median voter theorem. Both Bryan Caplan and Sam Peltzman pointed out that it’s hard to think of any major government program or regulation that does not enjoy widespread popular support.

As for the public been duped by neoliberal economists, George Stigler argued that ideas about economic reform need to wait for a market. As Stigler noted, when their day comes, economists seem to be the leaders of public opinion but when the views of economists are not so congenial to the current requirements of special interest groups and voting public, these economists are left to be the writers of letters to the editor in provincial newspapers. These days they would run an angry blog.

Rocket man overtakes Boeing A380

HT: David Taverna

The gig economy: don’t give up your day job

Flip Chart Fairy Tales

Everybody seems to be talking about the gig economy at the moment. It’s an ill-defined term but basically it means more people making their living by picking up bits of freelance work through online marketplaces.

Every so often, a survey, usually by an agency or a freelancers’ organisation, tells us that a large proportion of the US workforce (usually somewhere between 30 and 40 percent) is now self-employed and that the number will inevitably rise, possibly to 50 percent, by the end of the next decade. This has perplexed many American economists and business writers who point out that there is no evidence behind these claims and quite a lot to suggest the opposite. As Bloomberg’s Justin Fox points out, the surveys with these big numbers include anyone who has done some freelance work over a given period and would include “an 18-year-old who lives with his parents and plays…

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% young adults still living with their parents in Europe

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NOT A LOT OF PEOPLE KNOW THAT

“We do not believe any group of men adequate enough or wise enough to operate without scrutiny or without criticism. We know that the only way to avoid error is to detect it, that the only way to detect it is to be free to inquire. We know that in secrecy error undetected will flourish and subvert”. - J Robert Oppenheimer.

STOP THESE THINGS

The truth about the great wind power fraud

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