Monday Message Board

Back again with 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. If you would like to receive my (hopefully) regular email news, please sign up using the following link You can also follow me on Twitter @JohnQuiggin, at my Facebook public page   and at my Economics in Two Lessons page

80 thoughts on “Monday Message Board

  1. James W… “Only those who are capable of silliness can be called truly intelligent.”
    — Christopher Isherwood

    Not sillly…
    “Meet the Leftist Philosopher Running for Senate in Georgia

    Philosopher Richard Dien Winfield has spent his career studying concepts like truth, justice, and freedom. Now he wants to put these principles into practice by bringing an agenda of Medicare for All, a Green New Deal, and full employment to the nation’s capital.”..?

  2. We all ned to remember;

    “I’m willing to engage—usually, and unless people are just trolling or monstering or gaslighting or sealioning me—because that’s what philosophers do: they replace conflict with dialogue” 

    “Nothing in my life is separate from anything in my life.”

    Sophie Grace Chappell is professor of philosophy at the Open University. This interview was conducted online by Jean Kazez and has been edited.
    — Sophie Grace Chappell (Open University) interviewed by Jean Kazez (SMU)

  3. I’d never heard of the Energy Charter Treaty from 1994, but it includes neo-liberal provisions crimping the rights of governments to regulate energy industries. It supports ISDS provisions that have recently been used by German utility Uniper to extort compensation from the Dutch government for early closure of a coal plant on climate grounds. Text here:

    Now the EU wants the treaty changed, and is threatening to quit if others like
    Japan continue to stall. If the EU goes and is followed by Biden’s USA, the treaty will presumably collapse. Good riddance.
    From Climate Home News:

  4. It can’t be so difficult to circumvent legal issues that require compensation payments for explicit closure orders. Just introduce legal responsibility for health damage, or introduce a stricter limit for some emissions that just happens to make running coal power plants uneconomical, or introduce an externality fee. It’s not even real cheating, that is the underlying intention anyway. I think most of the time when coal plant operators get compensation payments, an alleged legal necessity is just a pretense. Those lobby groups are so strong that the government want to give them money. At least that’s the impression I get in Germany, where huge compensation payments will be made even so the closure dates are so late that brown coal mines attached have reached their economic extinction date anyway. Would not put it beyond some politicians that they intentionally write the closure law so bad that it will be successfully challenged for compensation payments if the voluntary payments create too much of an outcry.

  5. Certainly all treaties which prevent action on climate change and all treaties which permit ISDS actions should be abandoned forthwith. These are treaties where governments voluntarily straight-jacket themselves so that corporations can rob them, or more accurately, rob their citizens. We have to fight all such trends to corporate dictatorship and re-establish the power primacy of the democratic state and thus of the majority of the people.

    Down with corporate dictatorship! Up with Democracy!

  6. I never believed the story that increasing real wages would have no effect on employment. I disbelieve the “evidence” that was claimed to show that labor demand curves don’t slope downwards. The lags that arise naturally in labor markets where trained workers are a quasi-fixed factor make it nearly impossible to track down precise effects of wage hikes on employment so I prefer to stick to the intuition I got from Economics 101 – demand curves for labor will slope downwards.

    It seems that a similar sort of questionable claim is now being made with respect to proposals to increase the superannuation levy from 9.5 to 12%. The argument this time is that the increased levy will have no effect on take-home pay or on jobs. So that if the increased levy goes through, employers will compensate workers by the amount of the take-home pay foregone without cutting back on jobs. This would make sense if, as above, employment decisions are insensitive to wages – the employers top up wages by the 2.5% that are lost and this will have no impact at all on the number of workers they choose to employ.

    The view that increasing the superannuation levy will advantage workers seems wrong. At a time where unemployment is 10% and we are experiencing the worst recession in 90 years, it is important to not allow ideology to override economic senses.

  7. Chilling effect of free speech supression leading to;

    ^1.- “One third of respondents reported personal suffering related to suppression, including job losses and deteriorating mental health.”…

    “Research reveals shocking detail on how Australia’s environmental scientists are being silenced”

    ^1.- Consequences of information suppression in ecological and conservation sciences

    Don A. Driscoll 
    Georgia E. Garrard 
    Alexander M. Kusmanoff
     … See all authors 

    First published: 07 September 2020

    Suppressing expert knowledge can hide environmentally damaging practices and policies from public scrutiny. We surveyed ecologists and conservation scientists from universities, government, and industry across Australia to understand the prevalence and consequences of suppressing science communication. Government (34%) and industry (30%) respondents reported higher rates of undue interference by employers than did university respondents (5%). Internal communications (29%) and media (28%) were curtailed most, followed by journal articles (11%), and presentations (12%). When university and industry researchers avoided public commentary, this was mainly for fear of media misrepresentation, while government employees were most often constrained by senior management and workplace policy. One third of respondents reported personal suffering related to suppression, including job losses and deteriorating mental health. Substantial reforms are needed, including to codes of practice, and governance of environmental assessments and research, so that scientific advice can be reported openly, in a timely manner and free from interference.”

    Know Free Speech

  8. Harry Clarke,

    Surely the labor demand curve will be a compound curve. Reasoning to extremes, I can deduce that an infinite wage will be paid by no business. Thus at infinite wages the amount of labor purchased will be zero. At the other extreme, at zero wages no worker will work. Thus at zero wages, the amount of labor purchased will also be zero.

    On the standard axes (wages on the vertical axis and quantity of labor on the horizontal axis), the labor curve will be a sort of splayed “U” lying on its side, actually as some kind of distribution curve with the closed end pointing right and its open side against the Y axis.

    However, there are second order effects (and probably higher) to be considered. Every wage is another actor’s income. If wages are too low, workers cannot buy (enough) products. If firms cannot sell products then they cannot pay wages. Cutting wages too much will cut production by feedback of weak demand.

    If we look at the current economy for goods and services empirically, we note that administered prices and regulated prices are the norm, not market prices. Administered prices are set by firms. Regulated prices are set or kept in a range by government regulation. The idea that we have a free market is a fallacy. The reason we don’t have a free market is because they don’t work very well. They are very unstable. Rather than arriving at any workable equilibrium, free markets tend to boom and bust.

    Firms and governments work, sometimes together and sometimes against each other, to administer and regulate prices. This is the main way that relative stability is achieved for at least some of the time.

    I’ll come back to these ideas if they generate any interest.

  9. Further to Harry Clarke’s and Ikonoclast’s discussion of (labour) market demand, the Econ 101 idea is not the only one.
    Prof Werner Hildenbrand’s book: Market demand, 1994, may be of interest. Here is a preview:

    From a theoretical perspective, the issue is an aggregation problem. That is, while the Econ 101 idea, exposed by Harry, is plausible from the perspective of an individual buyer (‘consumer’) or the perspective of an individual business (‘producer’ or ‘firm’ in the older literature), it does not follow that therefore the outcome of the interaction of many actor – the market – has the same properties. So, the question arises, under which conditions do we get what aggregated outcome.

    To Ikonoclast’s pleasure, I assume, Hildenbrand compliments his theoretical work with empirical analysis. So, it is useful to have theoretical models, which do not a priori exclude the need for empirical studies (to avoid dogma), but rather to gain an insight that under some conditions outcome A is plausible but not under all conditions; it depends. (This is one of the useful outcomes of post 1950s theoretical work in economics, IMHO.)

  10. Ikonoclast, In your first para you confuse the demand and supply for labour. At a zero wage, the quantity of labour demanded will be huge. The quantity of labour supplied will be zero.

    The supply of labour can have a U-shape but it is easy to show that of the intersections with the downward sloping demand for labour only have one equilibrium that vyou will ever observe – the other is unstable.

    The point about higher wages boosting the demand for output and therefore increasing the demand for labour is possible but you would expect the effects to be very small.

  11. I did mention the aggregation issue which is sometimes referred to by talking about the “fallacy of composition”. I noted that excessively low wages would reduce demand (for goods and services). In turn that low demand would likely depress wages and employment further. This model suggest a slide into a depression is possible and indeed it has been empirically proven to be possible. The supply and demand curves suggest automatic correction will always occur. This does not appear to be the case.

    The false assumption is that the supply and demand curves are wholly independent. They are actually complexly linked and cross-influence each other. My graph idea was wacky from the perspective of Econ 101 but then that is not my perspective. From the perspective of asking “What empirically enacted demands would we see at different wage prices?” my graph suggestion makes perfect sense I think.

    “Empirically enacted demand” at any given price level (and at given levels of many other factors) is a real and measurable quantity. “Pure” demand existing independent of any other relations in the complex system of an economy is a theoretical and idealized assumption.

    I mentioned “administered” prices and “regulated” prices and gave definitions for those terms. Do they only occur because of oligopoly influence and government interference in what would otherwise be perfect markets? Or do markets left alone become so imperfect that people and governments are forced to act to prevent the wholesale destruction of society by markets?

    On a further tack, it’s worth looking at this link I think:

    This refers to the issue that “consumers are subject to anchoring and arbitrary coherence which nudges them towards higher or lower prices.” The author has a real point, though the question of whether the goods and services in question are necessities or luxuries will be very important in looking at the extent of these effects, I would think.

    When and if we generate a more complex price theory which references not only supply and demand but also aggregation or compositional affects AND “administered” prices / “regulated” prices AND the psycho-social realities of “anchoring” and “arbitrary coherence”, then we might be getting nearer to a general theory of prices.

    Apologies if I raise more questions than answers but I believe asking more questions is better than accepting inadequate answers.

  12. I gotta give it to Ernestine. On the basis of G.A.N. economics it’s true that (almost) anything can happen. You might also appeal to the Debreu-Sonnenschein theorem. But I am unsure that G.A.N. economics are the appropriate tools for analysing the impact of superannuation on take-home pay or the effect of increases in the labour force on real wages.

    AFAIK, G.A.N. economics are not the tools used by the RBA or the Treasury. There is just a certain lack of specificity to their outcomes and they have a spirit of inconsistency with good sense.

  13. Harry, what is G.A.N. economics?
    Googling G.A.N. resulted in “Generative Adversarial Networks”. Hildenbrand’s work does not belong to this framework.[1]

    But, you are right, a reference to the Sonnenschein-Mantel-Debreu theorem (1970s) would also be relevant in a literature survey. I chose Hildenbrand because his approach integrates empirical observations in a critical manner.

    The supply and demand cross diagrams of Econ 101 are diagrammatic characterisation of an individual agent’s choice ‘in equilibrium’ (ie existence is presupposed.

    You refer to ‘instability’. From the context I infer you are talking about the problem of ‘stability of an equilibrium’ – but the conditions of existence of an equilibrium have not been established.

    Irrespective of what model the Treasury or the RBA are using, surely it is quite obvious from comparing empirical data on income distribution, wealth distribution, environmental degradation and the behaviour and structure of financial markets as well as the structure of corporate and small and medium size business enterprises, including multinationals that the conditions for the existence of an equilibrium have been grossly (no pun intended) violated even before the pandemic. By now the ‘global economy’ is in a state of dynamic disequlibrium – no matter which notion of equilibrium I consider.

    To be frank, IMHO Ikonoclast is considering a dynamic disequilibrium situation, which takes into account the extreme income inequality and the flow-on affects for ‘aggregate demand’ for goods and services. Ikonoclast keeps on saying he is not an economist. I belief he should be given credit for his analytical skills. He should be assisted, IMHO.

    [1] In 1990 I spent several weeks attending a workshop at the University of Bonn, organised by Prof Hildenbrand (big research grant) on the aggregation problem. Long term benefit: I have an idea where to look for for new results.

  14. Yes, you assume equilibrium exists here – it need not prevail – there could be an excess supply of labour because of an award wage or a minimum wage. Consider a downward-sloping labour demand and a labour supply schedule that bends backwards at high wages. Instability here has the standard meaning that an excess labour supply will tend to drive wages up and an excess demand will reduce them – these silly behaviours surround the top equilibrium which you will not observe. It doesn’t happen for the other equilibrium (where demand has a negative slope and supply a positive slope). The latter has the sensible out-of-equilibrium properties and is the one you will observe. A good logical reason for assuming demands slope downwards and supplies don’t bend backwards!

    Would you really want to analyse the effects of an increase in superannuation on a labour market using Hildenbrand and some impossibility results? How? If you just say well anything can happen and then allow empirical work to sort things out you have identification problems that make things almost impossible. You can observe equilibrium or excess demands but don’t know what is shifting – supply or demand.

    I prefer the standard labour market models of basic microeconomics. It reflects basic economic logic and gives results that make abundant sense. A firm producing brooms that faces higher wages will not employ more workers even if the increased incomes from the workers somehow filter through the economy and increase demand for brooms.

    G.A.N. was an acronymn from the 1970s “Generalized Abstract Nonsense”. It referred to the attempt to treat microeconomics as some elaborate game rather than as an attempt to understand how markets work. A variant of the Anglo-British approach to microeconomics – teach it but for God’s sake don’t take it seriously.

  15. Harry, the acronym G.A.N., as deciphered by you, could be applied to anything a particular economist does not like. It has nothing to do with Hildenbrand, Sonnenschein, Mantel, Debreu or any other literature I have ever cited. But I accept you don’t like this literature.

    Superannuation contributions made now affects future prices and quantities via financial markets. Considering how the actual financial markets are fed via quantitative easing by major monetary authorities (FED, ECB, Bank of Japan, China, ….), since the GFC, it seems to me equating a superannuation contribution at time t with a wage at time t is fundamentally wrong in line one. There is of course not one wage but there is a huge dispersion of wages (including bonus payments, share options, golden handshakes).

    I say these real life complexities cannot be adequately treated by “standard” microeconomic supply and demand models (with or without broom handle producers).

  16. The derivation of G.A.N. (Generalized Abstract Nonsense) is from mathematics according to Wikipedia. The term referred to aspects and uses of category theory.

    “Roughly speaking, category theory is the study of the general form, that is, categories of mathematical theories, without regard to their content. As a result, mathematical proofs that rely on category-theoretic ideas often seem out-of-context, somewhat akin to a non sequitur. Authors sometimes dub these proofs “abstract nonsense” as a light-hearted way of alerting readers to their abstract nature. Labeling an argument “abstract nonsense” is usually not intended to be derogatory, and is instead used jokingly, in a self-deprecating way, affectionately, or even as a compliment to the generality of the argument.” – Wikipedia.

    I don’t know or understand anything about category theory in mathematics so I will have to take their word for it. In modern terminology we might refer to that as a macro theory: a theory about (the forms of) a set of theories. I suspect when transferred to economics the term “Generalized Abstract Nonsense” is not complimentary.

    To be honest, the supply and demand model is very generalized and very abstract. I won’t say it’s nonsense but it does greatly oversimplify matters and it does ignore feed-backs which we can also call second order and higher order effects or aggregation effects or compositional effects.

    However, I am a little sorry now that I did not address Harry Clarke’s original point and I have done Harry a disservice in that (although we have had an interesting side discussion). The Australian superannuation system seems to have been overtaken by events. Is there now any point to a superannuation levy when interest rates are low and the price of money to government is effectively zero? I could add in that the stock market is over-valued on Price-earnings ratio view and a market crash and thus market-linked superannuation crash seems likely and possibly even imminent.

    Putting more money into superannuation might be the wrong thing to do at this juncture. Any effective wage increase, if it occurs, should go directly to weekly pay and thence into current demand. That is where it is needed. So strangely, I might well agree with Harry on this part of the super issue, though maybe for different reasons.

    In the bigger picture, I doubt the need for or wisdom of market-linked superannuation at all for ordinary workers from minimum wage up to at least median wage. Instead, the federal government should simply provide a living pension based on the current pension as proportion of MATWE or 50% of retirement income (average of last 5 years income), whichever is the greater, and paid out of general revenue.

    The forcing of workers into market-linked super (as opposed to market adepts who want to be in that space) has been a recipe for excess fictionalization and the creation of a large and parasitic financial advisers industry.

  17. Ernestine replied while I was replying to Harry. I thank Ernestine for her support on matters of “considering a dynamic disequilibrium situation, which takes into account the extreme income inequality and the flow-on affects for ‘aggregate demand’ for goods and services.” That is indeed what I am pointing at, albeit using ideas from heterodox economics and complex systems philosophy expressed in words and not mathematics.

    At the same time, I indicate support for the idea that now might not be the time for a larger superannuation guarantee, if that is the correct term. I give my reasons which might not, probably are not, the same as Harry’s reasons. In passing, the spell checker changed my “financialization” to “fictionalization” which might not be totally off target (in terms of the concept of “fictitious capital” as the capitalization on property ownership).

    I do believe that when we argue about economics we should look for pragmatic commonalities and agreements as well as, or at least in lieu of, theoretical agreement. That’s because I hold my philosophical and scientific position to be empirical and pragmatic and that the empirical and pragmatic domains are the only ones where we can meet theoretic and ideological opponents and agree on something at least.

    My “social conscience” problem with Harry’s exposition of supply and demand, is that I inferred, rightly or wrongly, that strict adherence to that model will imply and thus recommend no minimum wage. I won’t get into that discussion unless people want to.

  18. “it is important to not allow ideology to override economic senses.”

    Your punch line raised a smile, Harry. I enjoyed the joke, thanks.

  19. News out this morning on dirty deals done cheap. Just a coincidence, nothing to see here.. today.

    Natural Resources and Mines Minister Anthony Lynham has announced he will not be recontesting his seat at the state election in October.

    Adani launches own rail company to haul coal from Carmichael mine

  20. Not too long ago (pre covid – when such things could be top battleground issues to politicians) the Coalition cut penalty rates for cafe workers .There would be other variables at play, but I thought that that did not turn out to result in more jobs ?

  21. Ernestine, Of course, I don’t dislike the Hildenbrand, Sonnenschein, Mantel, Debreu literature. I did my Ph.D. in macroeconomics when the sentiment was that macroeconomic relationships should be derived from microeconomics. This literature showed that was impossible. I just don’t think this literature helps at all to analyse the effects of a superannuation deduction.

    You say that such deductions affect asset markets so let’s think how that might nullify the view that such deductions do not reduce the real wage. The deductions for the broom maker’s employees could be lodged in a union-run superfund and, after deducting their 1.5% fee, could be invested in a public offering by the broom maker. This could then bolster the broom maker’s capital stock and, assuming capital and labour are complements, could boost the demand for labour by the broom maker. This could then raise the wage to the level that prevailed prior to the deduction. Is this what you have in mind because if it is I’d say it is a fantasy.

    Iconoclast, A minimum wage can be justified if the firm has monopoly power in labour markets and can force a wage outcome in those markets. It then makes sense for the firm to restrict its demand for labour to take advantage of that power. If you set a minimum wage at some socially desired level then the firm’s monopoly power vanishes and the firm will employ more than it otherwise would.

  22. Harry, the number of issues seems to grow – not surprisingly on a blog. I’ll try to disentangle the issues a bit, starting with a quote from your last post.

    “Of course, I don’t dislike the Hildenbrand, Sonnenschein, Mantel, Debreu literature. I did my Ph.D. in macroeconomics when the sentiment was that macroeconomic relationships should be derived from microeconomics. This literature showed that was impossible. I just don’t think this literature helps at all to analyse the effects of a superannuation deduction.”

    Werner Hildenbrand, Hugo Sonnenschein, Rolf Mantel, Gerard Debreu are all recognised original contributors to general equilibrium theory. This theory consists of many theoretical models, which differ in their specific assumptions about elements of ‘the economy’. They have one thing in common, namely they treat micro-economics (individual agents decisions) and macroeconomics (‘the economy as a whole’ – the usual description of what macroeconomics is) simultaneously. So, I don’t understand your statement “This literature showed that was impossible.” (to derive macroeconomic relationships from microeconomics).

    You referred to the SMD result, using Mascollel’s expression “anything goes” in response to my reference to Hildenbrand. But Hildenbrand did not try to derive an aggregate demand function (or excess demand function) from individual agent’s decision problems (as is the case with SMD) but from the income distribution. Are you telling me that the income distribution is not empirically observable?

    The notion of an equilibrium in any one of the class of models hinted with my paragraph on general equilibrium theory consists of several conditions, which are not all identical across the models.

    It seems to me your model of the labour market defines an equilibrium as the market (for labour) clears (excess demand is zero). Is is this case?

    Another quote:
    “You say that such deductions affect asset markets so let’s think how that might nullify the view that such deductions do not reduce the real wage.”

    I did not say that “such deductions” (presumably superannuation contributions) affect asset markets. I said the monetary policy, known as quantitative easing, affects the prices of financial securities (but not wages!). I wasn’t thinking of the ‘real wage’. I was thinking of the income and wealth distribution (not surprisingly, given that I started of with Werner Hildenbrand)

    As for superannuation, I am more inclined to support Ikonoclast’s ideas, although perhaps for different reasons.
    Yes, now is not a good time to increase the superannuation contribution. It is also not a good time to reduce income taxation for anybody except the low to lower medium income earners. The pandemic is a significant shock to the system, which magnifies the pre-pandemic disequilibrium. I don’t think comparative static arguments help. In an earlier post, JQ suggested an approach based on conceptual framework of the second welfare theorem is appropriate. I agree – the ‘material welfare’ of each individual is of paramount importance. Moreover, if the notion of ‘freedom of choice’ isn’t going to be completely lost, then the income distribution is important.

    By pre-pandemic disequilibrium I mean three interrelated observable problems:

    1) Unsustainable growth in income and wealth concentration (relative to the conditions in GE models, where ‘freedom of choice’ is not an empty phrase)
    2. Unsustainable environmental degradation (relative to the finite life of the planet and the reports of an annual real resource budget deficit, reduced by one months since the pandemic, but still several months short of a balanced budget); human induced global warming is perhaps the most widely recognised problem but by far not the only one.
    3. Financial system instability. (Does anything go here? Or is this part of ‘the economy’ the only element that matters?)

    It seems to me the superannuation system has to be reviewed and re-evaluated. Ultimately, the quality of life in retirement depends on the quality of life and the productivity of the then young generation and natural resources and not on the numerical value of a superannuation account, which records the aggregate value of financial securities. So, Ikonoclast’s suggestion to not have a compulsory superannuation system for the low to middle income people but higher pensions is something which at least promotes considering the financing of retirement rather than haggling about superannuation contributions in isolation from the pension.

  23. Harry, I referenced Werner Hildenbrand’s book, Market Demand. Hildenbrand’s work does not belong to the Sonnenschein-Mantel-Debreu categeory of the aggregation problem. So, I don’t understand your initial response.

    I also don’t understand your second one. But I know the aggregation problem is a serious one.

  24. Ikonoclast, IMHO a minimum wage is justified if the wage some people are paid in the absence of a legislated minimum wage is below a ‘decent living wage’ (a weaker version of the ‘minimum wealth condition’ I have been going on about in the context of general equilibrium theory and ‘freedom of choice’).

  25. To take the discussion a bit wider…

    I tend to the view that everything we do in socioeconomics or political economy is an experiment. Everything we do is an ongoing, trial-and-error, uncontrolled experiment. That we are in a dangerously uncontrolled experiment is shown by the fact, reported yesterday, that wildlife populations have declined by 2/3rds since 1970. That is to say, wildlife populations have declined by 2/3rds since I left high school. To me that is a terrifying thought. Our current system, call it what we will, is a dangerous, out-of-control planetary experiment so dire that an new experiment, a new trial-and-error program in the other direction is absolutely mandated. It will be ethically indefensible to go back to business as usual after the pandemic.

    Thirty years ago or so, it was common for some religious and political conservatives to refer to left-wing views and programs (such as gender equality programs) as “social engineering”. The implication from the religious and political conservatives was that the status quo was natural (and even supernaturally ordained) and attempting anything else was “social engineering”. My standard reply to such thinkers was “It’s all social engineering. The conservative status quo was and is also engineered. It’s dishonest to call only what you disagree with social engineering and blind yourself to your own social and economic engineering agenda.” Of course, I failed to convince any conservatives with my arguments. Empiricism and logic fail against dogma. These consevatives were simply and fundamentally right in their view and believed they had history on their side and their particular religious Deity as well. As I have said before, this kind of dogmatic certainty will start to break down under enough salutary demonstrations from nature.

    The progress to the neoliberal ascendancy was engineered by the major owners of capital in the 1970s and 1980s. Almost from the very moment that the “Limits to Growth” publication appeared, a campaign was undertaken to mischaracterize it, discredit it and intensify capital expansion and endless growth theory. Calls for even a precautionary easing of rapid growth and more studies of the earth systems, ecology, atmosphere and biosphere were largely swept aside. We now see the results of that campaign. A wildlife population decline of 2/3rds in 50 years: a sixth mass extinction many orders of magnitude more rapid than any previous mass extinction. South-Eastern Australia last year and California, Oregon and Washington state this year essentially burning to the ground : large tracts of wilderness, farmed and grazed lands all burnt to the ground in catastrophic wildfires with fire regimes and pyro weather events never seen before in modern history and perhaps not in all of human civilization.

    The experiment of highly centralized private onwership of productive capital has failed. The neoliberal experiment has failed. An apocalyptic collapse is in the near offing. The COVID-19 pandemic (a zoonotic disease unleashed by our depredations on wilderness and wild-life) is actually showing us the direction we need to take. We need to shut down excess consumption to save the planet and ourselves.

    This raises the enormous problem that an old-fashioned capital-system demand-led recovery is impossible. If we attempt that we collapse faster. This is why I say that the COVID-19 pandemic is showing us the way, showing us what we have to do. All non-essential economic activities need to cease or be largely curtailed permanently. The only parts of the economy necessary are those which provide the necessities for modern civilized life. What we have shut down for the COVID-19 pandemic for months now is basically all the non-essential stuff. If it were truly essential on a daily or even monthly basis we would all be dead already without it. Ergo, what has been shut for months and hasn’t killed us by being shut down is unnecessary. If we reopen it, that reopening will kill us. Climate change, species extinctions and the other attendant catastrophes will continue and send the human race extinct or near extinct. Deaths will be in the billions over the course of the rest of this century.

    The new policies necessary to provide income, while work is restructured away from non-essentials to survival essentials and renewable energy build-outs etc., must be continued and augmented. Nobody must be left without the means to purchase food, accommodation and other necessities. Many services in health and education must be made free and public. In short, we must abandon capitalism and implement democratic socialism immediately. It is possible some of us might survive if we make this new experiment. Continuing the current experiment of neoliberal capitalism or anything like it will kill us all in short order in historical terms. That trend is clear from the last 50 years.

  26. Iconoclast, I am a keen conservationist who taught environmental economics for 30 years. The problems the world faces are due to the success of capitalism as well as its failures. Most parts of the world are now developing rapidly – even sub-Saharan Africa – using market-based reforms. We can expect that, as they do, they will aspire to North American-European consumption standards. Currently, it is the developed world that is doing the most damage per capita to the environment and the situation is grim and global – problems of a deteriorating climate, water shortages, pollution, soil degradation, and biodiversity loss can be mainly attributed to consumption patterns in wealthy countries. That they have not been addressed is a failure of capitalism to internalize externalities and common property problems. But they are about to be scaled up in a dramatic way due to the success of market processes around the globe in enhancing living standards in countries that were previously poor.

    I am very pessimistic about the prospects for reversing these ominous trends, It is impractical to say to formerly poor countries that they cannot seek to mimic the consumption standards of rich countries. Yet their very success in achieving good development outcomes will worsen the terrible environmental problems we currently face.

  27. Liberalism squashed by postmodernism with the right to rule? A book reviewed on Crikey today with good insight into causes, perhaps? But apparently with no pc solution, so no solution.

    The destructive power of culture wars and how they put liberalism in retreat

    A new book argues that the push from the far-left to make everything about identity is actually harming liberal causes.

    Margot Saville Sep 11, 2020

    Cynical Theories, by political writer Helen Pluckrose and mathematician James Lindsay, will be released around the world next week. But already the book, subtitled “How activist scholarship made everything about race, gender and identity — and why this harms everybody” is creating a stir.

    The two authors have written this book because they believe that “liberalism” or “social democracy”, the core political philosophy of modern Western democracies, is under threat….

    Pluckrose and Lindsay write that “this shift away from class and towards gender identity, race and sexuality troubles traditional economic leftists, who fear that the left is being taken away from the working class and hijacked by the bourgeoisie within the academy”.


    “TALLAHASSEE, Fla. — Florida school districts are defying Gov. Ron DeSantis and publicly reporting new Covid-19 cases among students and staff that the state government considers confidential.

    The state Department of Health has tried to directly quash reporting on the virus in some instances, after DeSantis said K-12 testing data “needs to be put in the right context.”

    Florida’s governor seems to be a bit of a mini Trump. Opening up schools is not even anywhere close to the craziest move he did. Bars were allowed to open for a while long before schools -great priorities. Then he has the Chutzpah to argue he now has to open schools because all the other unimportant riskier stuff is open already.

    Wondering how much data fiddling is going on in the Trump aligned let’s just open up COVID-19 be damned states. Excess death rates are already quite a big higher than explicit covid counts without intentional distortions.


    Sweden is doing great at the moment, while Spain now has twice as many new cases per capita as the US. Note Sweden’s keep things open stunt still killed around 5000 people (comparing numbers with its neighbors that did do a lockdown and have a similar degree of social cohesion) among a population of 11 Million.

  30. Harry Clarke,

    The real point is that when capitalist society was warned of the dangers (from “Limits to Growth” onward), those warnings were ignored and worse than ignored. The system reacted to suppress the warnings and to intensify production and consumption. This behavior is intrinsic to capitalism and to the state capitalism misnamed “communism”. That statement does not exhaust the contributory causes to this behavior. Humans are inherently greedy, selfish and short-sighted so it is a human nature thing too. In turn, we should not be particularly morally judgemental about this fact. Greediness, selfishness and shortsightedness are clearly evolved behaviors which can play a survival role for individuals and species. Then again, cooperation, altruism and farsightedness are also among our evolved repertoire of survival behaviors as a eusocial species.

    As a thinking species, we needed to. and need to, attune our adopted political economy system(s) to the emerging conditions of society and environment. That is what we failed to do. We failed to select behaviors and systems from our repertoire of biologically evolved and culturally developed possibilities to suit the emerging conditions. Instead of being adaptive, the ideology of unfettered capitalism is sclerotic and fixed. It’s a “one solution fits all” philosophy. Growth and increased consumption (demand) are always the prescription even when it becomes patently obvious that attempted endless growth and increased consumption have become our main problem.

    We need to jettison the basic idea, in unfettered capitalism, that endless wants, self interest and self indulgence alone need to be encouraged to spur innovation and development and to provide self-fulfillment. A degree of self-discipline and self-denial needs to be returned to as a central moral philosophy principle but in a “golden mean” manner, not in a self-punishing or other-punishing, masochistic or sadistic manner. A key here is the recognition of the importance of disinterested social and public action as well as private self-interested action as drivers for developing an equitable and sustainable society.

    All of this sounds “preachy” these days and is even stranger, I guess, coming from a secular humanist like myself. But I think part of the problem we might have as a society is the continuing implicit and explicit idea that self-interest and markets alone can somehow automatically ensure the general public good or good social outcomes, let alone address the issue of sustainable environmental outcomes. The empirical progress of this system to date has not justified the faith in it. Secular faith in private interests, money and markets, is manifest as a blind belief without adequate evidence.

    The real world evidence re inequality is mixed. According to UNU (United Nations University) “between 1975 and 2010 “relative” global income inequality decreased substantially, in spite of a marked increase in “absolute” income inequality.” The real world evidence re climate change and the sixth mass extinction (to name two developing catastrophes) is unequivocal. We are headed for disaster. Uneven equality outcomes and outrageous absolute inequality (billionaires and paupers) all achieved in a completely unsustainable manner. This is no recommendation for the current system.

  31. Iconoclast, I was trying to argue that capitalism has delivered good economic outcomes to many previously poor economies over recent decades. These countries will seek to mimic the high consumption standards of the already rich countries that are currently doing most of the environmental damage. Hence I think things are likely to get much worse.

    Maybe there will be a values revolution that will address greed ethics and place a higher value von the environment. That has happened to some degree in Western countries but clearly not enough. Overall I am pessimistic that people in China, Africa, and South America will change their value system rapidly enough, as they develop, to prevent disaster.

  32. With peak oil we are now outside of the post-Malthusian reality that discredited Malthus. We have to do the right thing and use less energy. But the question is how can we do so and still have high wages and living standards? In earlier decades more wealth for others meant more wealth for us as well. Now this is disappearing. But we cannot be like this. Once Malthusian reality reasserts itself there is a huge risk that we could lose all humanity.

  33. The good news, Harry, is no one is going to use an incandescent light bulb or plasma TV. They’re also not going to build coal power stations or gas turbines when solar panels and batteries are cheaper. On the minus side, they are going to create pop music we will hate.

  34. Ronald, I agree. The issue is often whether the pace of invention and innovation can undo the growth in environmental resource demands. For pelagic fisheries, soils, and biodiversity I think the issues remain grim. I am less pessimistic on climate.

  35. The Commission for the Human Future published a discussion paper in April 2020, alerting humanity to the nature and scale of the combination of ten catastrophic risks, identified as:

    • Decline of key natural resources and an emerging global resource crisis, especially in water;
    • Collapse of ecosystems that support life, and the mass extinction of species;
    • Human population growth and demand, beyond the Earth’s carrying capacity;
    • Global warming, sea level rise and changes in the Earth’s climate affecting all human activity;
    • Universal pollution of the Earth system and all life by chemicals;
    • Rising food insecurity and failing nutritional quality;
    • Nuclear arms and other weapons of mass destruction;
    • Pandemics of new and untreatable disease;
    • Advent of powerful, uncontrolled new technologies; and
    • National and global failure to understand and act preventively on these risks.

    “The group recognised that all these risks are interconnected and therefore cannot be solved one at a time. It is a systems issue. All risks must therefore be solved together, as a system, at the same time and in ways that make none of them worse.

    What our species does about these ten existential threats in the next few years will determine whether present and future generations face a safe, sustainable and prosperous future or the prospect of
    collapse and even extinction. It is a choice we all must make, together.”

    No pressure then?

  36. What do people think about bringing back tram tracks and overhead wires then massively expanding their applications? I would like to see this applied first up as a way of unloading containers. So lets say the containers are at the wharves, they come off and are taken, by electric vehicle, to the outer suburbs to where they are unloaded by specialist companies. I’m imagining that we are building up tram and overhead wires slowly over many many decades. Once the container goods are unloaded then you’d distribute them by your standard diesel trucks and vans. Until such time as the system was more mature.

    Tram/rail tracks are more energy efficient with electricity than wheels up to some gradient. Less maintenance costs as well. Certainly if the tracks are flat they are really efficient. The problem is that economically viable electrical vehicles must tap out at bus level because of the weight of the batteries. Even with electrical busses its going to be only fairly rarified circumstances that allow for energy efficiency. But it could be a good thing to get the tracks and overhead wires in place and just keep on expanding their usage. We ought never have gotten rid of the street-car/tram transport. By now we’d be in a very good position to expand the application of the overhead wires.

  37. “No pressure then?”

    If we think of these threats one by one the problems look insurmountable. But if we have a cool head about things and collapse all of these threats into one or two overall strategies then its not as big a task as what might be imagined.

    For example massively increasing sea life and productivity means that, where the ocean is deep you will get what amounts to a carbon rain. Carbon will be interred in the deep ocean in this case simply by giving nature a gentle and caressing help along. Of course soil development is carbon internment as a one to one identity relationship. Some actions need to be socialist but these ought to be mostly infrastructural and catalytic. If you view all 10 threats separately, and develop socialist measures for each, without a strategic plan, then we are all doomed.

  38. Real life consumption data of electric cars:
    Modell kWh/100km
    1 Peugeot iOn (21) 12,6
    2 Skoda Citigo (11) 13,6
    3 Hyundai IONIQ (121) 13,9
    4 Volkswagen Up! (37) 14,2
    5 Mitsubishi i-MiEV (21) 14,4
    6 Citroen Saxo (11) 14,4
    7 Fiat 500 (11) 14,8
    8 Citroen C-Zero (20) 14,8
    9 Volkswagen Golf (113) 15,0
    10 Hyundai Kona (65) 15,2
    11 BMW i3 (103) 15,3
    12 Nissan Leaf (101) 15,4
    13 Smart Fortwo (61) 16,0
    14 Kia Niro (26) 16,0
    15 Smart Forfour (19) 16,1
    16 Renault ZOE (244) 16,2
    17 Opel Ampera (19) 16,4
    18 Kia Soul (25) 16,7
    19 Tesla Motors Model 3 (139) 17,9
    20 Tesla Motors Model S (95) 20,5
    21 Mercedes-Benz B-Klasse (12)

    Conventional ones:
    Modell (Diesel) l/100km
    1 Audi A2 3L (172) 3,6
    2 Volkswagen Lupo 3L (301) 3,7
    3 Peugeot 107 (15) 4,2
    4 Citroen C1 (61) 4,2
    5 Smart Fortwo (2302) 4,3
    6 Citroen AX (53) 4,3
    7 Seat Arosa (94) 4,7
    8 Citroen C4 Cactus (114) 4,7
    9 Citroen Saxo (102) 4,7
    10 Renault Twingo (121) 4,7
    11 Peugeot 208 (269) 4,8
    12 Peugeot 106 (79) 4,8
    13 Fiat 500 (63) 4,8
    14 Toyota iQ (46) 4,8
    15 Audi A2 (578) 4,8
    16 Ford Ka (21) 4,8
    17 Volkswagen Lupo (161) 4,8

    Modell (Benzin) l/100km
    1 Suzuki Celerio (72) 4,6
    2 Hyundai IONIQ (418) 4,8
    3 Toyota Yaris Hybrid (1611) 4,8
    4 Kia Niro (551) 5,1
    5 Nissan Pixo (52) 5,1
    6 Toyota Prius (3125) 5,1
    7 Toyota Corolla Hybrid (625) 5,2
    8 Daihatsu Cuore (526) 5,2
    9 Citroen C1 (906) 5,2
    10 Honda Insight (255) 5,3
    11 Skoda Citigo (539) 5,3
    12 Seat Mii (294) 5,3
    13 Toyota Auris Hybrid (2816) 5,3
    14 Toyota Aygo (1303) 5,3
    15 Toyota C-HR (648) 5,4
    16 Peugeot 107 (489) 5,4
    17 Honda Jazz Hybrid (94) 5,4
    The best Diesel is a decades old small series model and Hyundai is doing great. No cne cares. Tehy ain´t hype at the moment.

  39. The cars doing better than the Ioniq, both in the hybrid and the electric category are smaller. In that sense, Hyundai even overtook Toyota in the hybrid sector. Still, no one is talking about Hyundai anymore and the stocks are not worth much.

    It’s all a bit sad really. CNG never took off anywhere. Hybrids were so so. Both should have been the bridge technologies to go. Now we seem to jump directly to electric ones. For the most part cars are just too big and getting even bigger. There is no rationality in SUVs and there is no rationality in accepting only EV with outsized batteries.

    Consumption still matters, not just for conventional cars since most countries still got a long way to go towards a genuinely eco-friendly electricity grid.

    The consumption list for electric cars is unlikely to include transmission losses during loading. Those also vary a lot and Tesla was, no surprise there, among the bottom third in a specific study of those.

    Making the fanciest status symbols still matters most if one wants to make money in cars. Making the best practical cars …. forget about it. Unfortunately, fancy still correlates strongly with oversized and fast.

  40. hix (Re your comment at SEPTEMBER 17, 2020 AT 7:57 AM),
    I’d suggest it would be better to compare apples with apples. It would be better to express the energy consumption values of vehicles as kWh per 100 km (or MJ per 100 km) for both EVs and ICEs.

    1 kWh = 3.6 MJ

    1 litre of petrol fuel contains 9.1 kWh or 32.6 MJ of energy
    1 litre of diesel-oil fuel contains 10.0 kWh or 35.9 MJ of energy

    You state:
    “The consumption list for electric cars is unlikely to include transmission losses during loading.”

    Why would you say that? Battery electric vehicles (BEVs) don’t have clutches/torque-converters and gearboxes, and I’d suggest the only mechanical transmission losses would be in the electric motor bearings, differential gear drive (if an electric motor drives two wheels, whether at rear or front), final drive shaft flexible couplings (universal or CV joints) and bearings – less mechanical losses (and complexity) compared with an internal combustion engine (ICE) vehicle.

    BEVs are at least three times more energy efficient than hydrogen fuel-cell electric vehicles (HFCEVs). ICE vehicles have much worse energy efficiencies.
    Overall efficiencies for renewable electricity generated through to that energy dissipated at the road wheels to do useful work for equivalent mass vehicles (per Transport & Environment):
    • BEVs: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 73%;
    • HFCEVs: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _22%;
    • Power2Liquid Hydrocarbon Synthetic Fuels-ICE Vehicles: 13%.

  41. “The consumption list for electric cars is unlikely to include transmission losses during loading.”

    After reading what you said Geoff, the statement still sounds true enough. An electric car is really a coal burning car if you are driving it in New South Wales. Its a uranium burning car if you are driving it in France. And if you are driving it in a place where there is solar panels thats a brown coal burning car with emissions released in China. Electric cars are coal burning in general unless we get the French to manufacture the wind turbines and solar panels. Getting too excited electric cars is a product of failure to integrate all the threats you mentioned into an overall strategy. This one problem one solution thinking is going to leave us broke and make the problems worse.

  42. Huritau Hurai Kino (re your comment SEPTEMBER 17, 2020 AT 11:45 AM)
    You state:
    “Electric cars are coal burning in general unless we get the French to manufacture the wind turbines and solar panels.”

    I don’t see any comparison from you of CO2 emissions per km between BEVs and ICEVs. If you had done so, then you might have noticed BEVs are already operationally ‘cleaner’ than ICEVs.

    On the ABC’s “Fight For Planet A”, Craig Reucassel in a Tesla S drag raced a Holden HSV GTSR W1.

    The Holden HSV GTSR W1 reportedly produces 476 g/km of CO2 emissions.
    The Tesla S produces 153 g/km of CO2 emissions utilizing the grid, or zero with renewable energy.

    The Driven posted “Is a diesel cleaner than an electric car in Australia?” on 15 Dec 2019, stating:

    “In Australia Whitehead, Smit and Robinson reveal that, primarily through their efficiency, even on the coal rich Australian grid, EVs produce 40% less GHG when compared with equivalent ICE vehicles.”

    An ultimate goal is to end the combustion of all fossil fuels. Until we do – and that certainly won’t happen overnight – the evidence I see indicates it’s still better from a GHG emissions perspective, to switch to electric transport, wherever possible, even if they are powered via fossil fuels, because electric motors already have much higher energy efficiencies compared with equivalent ICE powered transport. And as the electricity grid gets GHG ‘cleaner’, BEV’s will get ‘cleaner’.

    You also state:
    “Getting too excited electric cars is a product of failure to integrate all the threats you mentioned into an overall strategy. This one problem one solution thinking is going to leave us broke and make the problems worse.”

    Do you have “an overall strategy”?

  43. “An ultimate goal is to end the combustion of all fossil fuels.”

    No thats the low IQ constipation that will get us in trouble. That is NOT the goal. The goal is to head off the environmental threats you listed IN TOTAL. With an integrated strategy. If you cannot think holistically you are part of the problem. You will make us all debt slaves in an environmental wasteland. This idea of people getting a wild hair up their butt and making up extremist sub-goals; this is a greater obstacle to us dealing with all these threats than complacency is.

  44. Huritau Hurai Kino (Re your comments at SEPTEMBER 17, 2020 AT 12:58 PM),
    I suspect you missed “An” in my statement “An ultimate goal…”. I agree it’s not THE goal – it’s one of many that are part of the list referred above by the Commission for the Human Future.

    I still don’t see any solutions from you in your comment, only negativity. Rather than emotive rhetoric like “low IQ constipation”, “debt slaves” and “extremist sub-goals”, do you have anything constructive to offer? Do you have “an overall strategy”? What do you think should be done?

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