Here’s another draft excerpt from my book in progress, Economics in Two Lessons. To recap, the idea of the book is to begin with the idea that market prices represent opportunity costs for the households and business who face them (Lesson 1), and then go on to explain why market prices won’t in general equal opportunity costs for society as whole (Lesson 2). A lot of the book will be applications of the two lessons, and this section is an application of Lesson 1.
As before, all kinds of comment and criticism, from editorial points to critiques of the entire strategy are welcome.
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“Freedom Commissioner” Tim Wilson has been quoted in The Australian saying that Australian schoolchildren ought to learn more about classical liberal theorists like John Locke. While loath to squeeze yet more material into an already overcrowded curriculum, I’d certainly be glad if there was more awareness of Locke’s actual ideas and actions, as opposed to his prevailing image as an early apostle of freedom. A proper treatment of Locke would have to explain how
* His theory of natural rights in property was designed to justify the expropriation of indigenous populations
* His advocacy of freedom included support for slavery
* His theory of religious toleration excluded atheists and Catholics
* His theory of political freedom did not extend to freedom of speech.
How then did Locke get such a high reputation? The answer isn’t all that mysterious. Locke was closely involved in the British colonisation of North America, both as an investor and as a participant in political activity such as the drafting of the Constitution of the Carolinas, which ratified the expropriation of the indigenous population and enshrined the absolute power of slave-owners.
When the slave-owning colonists achieved independence from the British Crown, it was natural for them to look to Locke to provide the basis for their political theories (theories that did not preclude the passage of the Alien and Sedition Acts restricting political freedom). Locke then benefitted from the same historical amnesia that has absolved all the US founders from their role in maintaining and extending slavery.
Instead of Locke, it might be better for students to learn about that old-fashioned Tory, Dr Samuel Johnson, who remarked “How is it that we hear the loudest yelps for liberty from the drivers of Negroes”, and whose friendship with his Jamaican servant, Francis Barber, a former slave, was a striking testimony to his character.
fn1. of course, the American Revolution embodied much nobler hopes than those of the Southern aristocracy that dominated the early years of the United States. Realising those hopes took decades of struggle and a bloody civil war.
I’m still redrafting the opening section of my book, on the concept of opportunity cost. Some applications to specific problems coming soon, I promise. In the meantime, comments and criticism, including editorial corrections and nitpicks, much appreciated.
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As the time left to save the planet from uncontrolled climate change gets shorter and shorter, the previously glacial pace of movement on the issues has speeded up. One of the most important, and surprising, developments has been a string of increasingly sharp attacks on coal, coming from representatives of major oil and gas companies. As this (rather excitable) piece explains, the reason is simple. The policy debate has crystallised around the idea of a carbon budget – the remaining amount of CO2 that can be emitted while keeping atmospheric concentrations at levels consistent with 2 degrees of warming or less.
Obviously, if such a budget is imposed and adhered to, a lot of fossil fuel resources, currently sitting on corporate account books, will have to be left in the ground. Unsurprisingly, fossil fuel companies have done their best to prevent such an outcome, promoting science denial, and encouraging national governments to shirk their share of the burden with the argument that others should do more. Such a strategy implies a united front among fossil fuel owners, since the longer the imposition of a budget can be delayed, the better off they all are.
The recent break in the fossil fuel coalition therefore marks a new stage. Rather than try to expand the budget for all fossil fuels, the oil and gas companies have decided to get as much as possible for themselves, which means shutting down coal as fast as possible. The facts that have made such a strategic switch sensible are many and varied but the most important are
(a) the increasing recognition of the health effects of burning coal which gives national governments like that of China a strong incentive, independent of climate change, to reduce coal use
(b) the fact that the most immediately promising alternatives to fossil fuels are renewable sources of electricity which compete directly with coal, and are, to a significant extent complementary with gas (as a dispatchable source, gas-fired electricity tends to offset problems associated with the variability/intermittency of renewables.
What’s the appropriate response here? In the end, it will be necessary to phase out fossil fuel use altogether. But the logic of tackling coal first is inescapable. If that logic drives a wedge in the fossil fuel coalition, so much the better for all of us.
Another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.
Since it’s notionally the Queen’s Birthday today, I’d be interest in thoughts about the prospects for, and politics of, an Australian republic.
A new sandpit for long side discussions, idees fixes and so on. Unless directly responding to the OP, all discussions of nuclear power, MMT and conspiracy theories should be directed to sandpits (or, if none is open, message boards).
Graham Lloyd in the Oz (not going to link) is pretty upset about the latest research showing that there is no significant difference between the rate of global warming over the 15 years since 2000 and that over the 50 years 1950 to 2000. The finding is the result of some corrections to data on sea surface temperatures, with the result that the estimated temperature at the beginning of the period is higher (so warming since 1950 is lower) and the fact that the period since 2014 has been the warmest on record.
Lloyd and others have popularized the term “hiatus” to refer to the slowdown which could at least plausibly be found in the data prior to this update and correction. Climate denialists capitalized on the ambiguity in this term to keep alive their beloved, but long discredited, “no warming since 1998, no significant warming since 1995” talking point.
For those interested, there’s a good analysis at Real Climate.