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.
I’m now using Substack as a blogging platform, and for my monthly email newsletter. For the moment, I’ll post both at this blog and on Substack. You can also follow me on Mastodon here.
John Quiggin 
What happens to the USA’s economy now? I see unworkable tariffs, rising inflation, rising inequality, rising homelessness, rising social problems, collapsing trade, collapsing manufactures, collapsing businesses, collapsing farm production, collapsing education, concentration camps, disappearances and expulsions of low paid workers who carry part of the economy. Do MAGA supporters still think this is going to work?
Further to my comment above, the issue is as follows for people in the remaining democratic countries of the world. Can they survive the USA’s collapse and the coming pressures and likely attacks (any or all of economic, cyber, kinetic and nuclear) from the three dictatorial superpowers of the world, namely Russia, China and the USA? The chances seem slim to me.
Meanwhile Australia is declining into a neoliberal basket case despite rejecting Trumpism. If people here think our economy is still okay they don’t understand or are unaware of the real current trends. I see a coming socioeconomic collapse from unprevented, unmitigated ongoing climate change damage, decaying infrastructure from a systemic failure in construction and maintenance, collapsing trades, growth of extreme inequality, rapid decline of public health, the housing crisis and an egregious decline in business and social ethics. We are on a disastrous path and very few people understand what is happening or why it is happening.
Abundance theory
The Klein /Thompson book on “Abundance” has triggered a lively debate, with pushback by traditional progressives against the authors’ Third Way claim that growth trumps distribution. What I don’t see is any discussion on the concept of abundance. Without a clear definition, it’s just an emotive sticker on an old story.
To rescue this attractive term from irrelevance, we need a proper theory of abundance, with equations and diagrams. Let me have a first go without such apparatus, based merely on common sense and observation.
In common usage, bananas are abundant. They are available almost everywhere at a price almost everybody can afford. (They all taste the same, being asexual clones of the boring Cavendish variety, but that’s not an inherent part of the story.) The same goes for soap, baked beans, underpants and thousands of other items in your local supermarket. Most people buy all they want of these items. Our wants for them are satiated. As King Lear (while still sane) observes:
“Our basest beggars / Are in the poorest thing superfluous”.
A suggested definition:
For a given consumer, abundant goods have a zero elasticity of demand w.r.t. income and price.
The demand curve is approximated by a vertical straight line.
Not all goods are or could be abundant. The others are scarce, with some wants left unsatisfied in equilibrium. The demand curves are sloping as in the textbooks, the elasticities are positive wrt income and negative wrt price.
We can readily generalise from a single consumer to a collectivity, and adopt similar definitions for representative or median or xth-decile consumers. While the choice here is important for practical applications, it can be ignored for broad-brush theory.
If my desires for bananas are satiated at the current price, why should I bother with it? Without the discipline of scarcity – economists overall have worked hard to earn their reputation as moralising scolds – won’t the market break down? No. The “meanest beggar” and Elon Musk both have a binding budget constraint; for both, an abundant good has an opportunity cost in terms of the scarce goods. All consumers therefore have a standing incentive to seek the lowest price for abundant as well as scarce goods, which transfers to a systemic incentive on suppliers to seek lower costs. The corner Chinese hardware store could be run on communist lines as a free public cornucopia, with customers just helping themselves from the bins – but it would be wasteful and inefficient. It should not collapse from runs on the stock.
Freed from the false doctrine of universal scarcity, we can study the subset of genuinely scarce goods as an interesting class. They include housing (internal and external space, also views), recreational travel, tickets to games and performances, haute couture, jewellery and fashion accessories, personal services, fine wines, and private jets and boats. Some of these are positional goods, since status is a zero-sum game. Their distribution is even more unequal than that of income in general. This may threaten the budget constraint that keeps the dual system working today. I may shop frugally for groceries, as this improves my chances of flying to Tahiti someday. I won’t do this is the opportunity cost is my chance of sailing there in my own giant yacht, since this is so low as to be ignored. We may end up with Chinese store communism anyway.
Goods can move from one category to another. Music has become abundant, with streaming services. So has news, with disastrous side-effects, even a threat to democracy from a collapse in quality. Overall, however, the widening of abundance is a good thing. We should welcome having to worry less about making ends meet, and more about what our ends really are.
My next post will be on whether we are heading for abundance in energy.
If there is a collapse in quality is the “good” abundant? This applies to cavendish bananas, streamed news and entertainment and many other goods and services in our economy.
I do hold, though it would take far too long here to make the full case, that hedonic adjustments on most of our goods and services should now be downwards, not upwards. The quality of most goods and services is declining. I could name many goods and services. Perhaps I will name a few below.
People talk of shrinkflation, which is a real thing. Packets of biscuits and snacks are getting ever smaller. Biscuits themselves are getting smaller. The price remains the same or rises. The effect is so marked it is beginning to help my diet. However, there is another kind of inflation which is becoming a clear trend. Cory Doctorow invented the term “en****tification”. The term does have two “t”s btw. I leave people to look up the definition. I propose en****tiflation” as the sister term. As products are en****tified, the only valid direction for hedonic adjustment would be downwards. But that would run against the standard use of hedonic adjustment in orthodox neoliberal economics which is to help falsely rig further the already rigged inflation numbers. This is to maintain the illusion that we are progressing and standards of living are improving.
I see very few goods and services which are improving and a plethora of goods and services which are declining. Most supermarket food in Australia is now of abysmal quality. My wife and I buy as little of it as possible and source most food from the farm gate as it were and from organic foods businesses. Of course, it costs a lot more to buy this food. Modern houses are flimsy and very poorly built. They are also vastly overpriced. Modern vehicles are declining in quality and reliability. Modern white goods, hot water systems and solar inverters, to name a few, are also declining in quality. Computers may be about the only products which are still getting better.
Perhaps things are different in other countries. But here In Australia everything is going downhill fast and becoming incredibly expensive. It is virtually impossible to get an honest tradesman who does not do inferior work and price gouge for it. Our cost of living crisis is very serious, along with our housing, health, education and social crises. It’s going to get a lot worse.
It is one of the regrets of my life – though a minor one – that I wasn’t good enough at math to pursue economics. I stink at graphs too! So all this talk of curves was a stroll down memory lane.
The abundance people have totally taken over both the Cali Democratic Party and state government. They just now obliterated a main environmental law for all our population centers – any urban area in the state.
Plus additional swaths for our “bullet” train – which if you know the sad story, won’t actually be fast. Or go to main cities. Or ever be finished. Anyway.
I am on a waitlist for that book, as I lack additional storage space for more books. Plus of course, I’m not giving those idiots more money.
In fact, these people are a walking exemplar of useless elites. They speak with forked tongues. It is all a mask for Big Real Estate (though, whether or not they know this, I can’t say). I try not to hate anyone on a personal level, so as you can imagine, that eats up some of my energy.
N,
Yes, isn’t it astonishing that the USA cannot build even one bullet train!!! China build bullet trains and tracks at an amazing rate. I will lazily quote the Google AI stats. I presume Google AI gets at least this stuff right. Correct me if it’s substantially wrong.
China’s high-speed rail (HSR) network has experienced significant growth, reaching 48,000 kilometers of dedicated HSR lines by the end of 2024, with projections indicating a further expansion to 50,000 kilometers by 2025, solidifying its position as the world’s largest. The HSR network’s rapid expansion has contributed to economic development and improved connectivity across the country, despite China Railway’s ongoing financial challenges.
Quote:
China’s high-speed rail (HSR) network has experienced significant growth, reaching 48,000 kilometers of dedicated HSR lines by the end of 2024, with projections indicating a further expansion to 50,000 kilometers by 2025, solidifying its position as the world’s largest. The HSR network’s rapid expansion has contributed to economic development and improved connectivity across the country, despite China Railway’s ongoing financial challenges.
Key Statistics and Growth:
Next-Generation Technology:China is developing next-generation HSR prototypes, like the CR450, aiming for commercial operating speeds of 400 km/h and beyond.
Total Length:By the end of 2024, China’s high-speed rail network extended to 48,000 kilometers, according to the State Council Information Office. Projections for 2025 anticipate this to exceed 50,000 kilometers, according to the South China Morning Post.
Expansion in 2024:The country added over 3,100 kilometers of new railway lines in 2024, with 2,457 kilometers of that being high-speed track, reports Newsweek.
Global Dominance:China’s HSR network accounts for approximately two-thirds of the world’s high-speed rail tracks in commercial service.
Carriages in Operation:As of 2022, the number of high-speed carriages in operation nationwide amounted to 33,554, a significant increase from 2013.
Passenger Numbers:In 2024, China’s national railway handled a record 4.08 billion passenger trips, with the first half of the year alone seeing a record 2.096 billion passenger trips.
End Quote.
China is accelerating ahead. The USA is stagnating and about to start collapsing. Australia is stagnating and also about to start declining rapidly but perhaps not about to start collapsing. The EU I am not sure about. Perhaps it is healthy but I doubt it. It’s probably stagnating too. Google AI thinks so (is it right?):
“Yes, the European Union’s economy has been characterized by stagnation in recent times, particularly in late 2024 and with forecasts for continued weakness in the near future. This stagnation is evident in various indicators, including minimal quarterly GDP growth and challenges in manufacturing and consumer confidence, alongside concerns about labor productivity and competitiveness compared to other major economies like the United States.” – Google AI.
The US economy is shrinking under Trump.
https://www.usbank.com/investing/financial-perspectives/market-news/economic-recovery-status.html
It is strong odds on to keep shrinking and then collapsing under Trump’s disastrous policies. The Age of the West is over.
Take all this with a grain of salt, Iko – since I’m not a train expert. But, my impression is that the plan could have worked, if they hadn’t let politicians design the thing. I guess to appease unions? (we have a big issue with unions here as a one-party state), they made it go on a wandering route, rather than a straight one up the 5 freeway (in an area for which they already owned the land and the rights, etc)
And, politics seems to be what’s keeping it alive, too.
I am not necessarily against “stimulus” projects, except now – maybe I’m finally maturing? – I have to ask, what didn’t we build bc they decided to do this?
This FT article looks at Trump on a macro level and talks about global forces realigning as innovation shifts the balance of power.
The new age of geoeconomics https://archive.md/CLvKu
Chapter: The Certificate That Wasn’t, Except When It Was, But Only On Parchment
It began, as all academic tragedies do, with a request for “just one more document.”
The Petitioneer blinked.
And so, the Petitioneer — half-ill, half-broken, still tethered to the sheer force of refusing to vanish — staggered back into the world of printing shops and physical signatures, to appease a system that didn’t need the document’s content, just its ceremonial texture.
Meanwhile, in the next office over, the Archivist of Lost Realities quietly filed a note that read:
Somewhere in the depths of the university, a moth-eaten rulebook laughed itself awake.
And the flame-proof bin labeled “Human Exception Handling” remained, as always, entirely empty.
Chronicles of Administrative Contradiction and Strategic Futility.📜 Chapter: The Committee of Retrospective Wisdom and Preemptive Failure
When the Petitioneer, now accustomed to the topography of despair, finally reached the Committee for Exceptional Circumstances, he was met by Professor A. Possibilitus, Chair of Procedural Inflexibility and Keeper of the Sacred Timeline.
And so it went:
A system designed to test the exhausted on whether they can decipher unwritten rules
in the wrong office,
at the wrong time,
by submitting intentionally doomed paperwork,
so that eventual mercy might appear like fairness.
The healthy didn’t notice, because they never needed to know.
The ill couldn’t know, because they lacked the capacity to navigate six layers of administrative shadow-play.
And those like the Petitioneer, who tried anyway, were told:
Even though no one had told them the rules.
Even though the first rule was: We don’t tell you the rules.
Even though it was, demonstrably, rigged.
(Could not resist to publish one again here this time sufficiently anonymous, basically everything in this one actually happened, letting chatgpt write about mine as the unseen university, reality even has at least one extra layer of absurdity…..the unfortunate thing is, the best chapters have many literal quotes … that both are not sufficiently anonymous and seem unbelievable because they are more extreme than the smoothed versions of ChatGPT with a prompt to make it a dark tragic comedy …..)
🕯️The Petitioneer and the Freedom of Academic Whimsy
(as preserved in the records of the Unseen University’s Least Cited Complaints Office)
There once was a Petitioneer.
He was not born a Petitioneer. He did not petition for fun. He petitioned because otherwise he would disappear — into the cracks, the margins, the “not our responsibility” folders of the Unseen University.
He had asked questions. Not the wrong ones — just the inconvenient ones.
He had asked why a magical exchange program required five different formats of the same parchment: once in Word, once as PDF, once in the Obscure Crystal Formulator, once inside the Online Learning Codex, and once mailed by dragon with blue wax — despite the fact that the recipient rarely even knew it had arrived.
He had asked why, after being forced to disclose his health conditions — “so we can make accommodations, of course!” — no one had informed the other university that he was exempt from the full 20-credit requirement. When his application was rejected for “not meeting the requirement,” The international office simply claimed he had been rejected due to the time delay in his application, which was entirely his fault: the scroll had been moved “to the archive.” Which, in bureaucratic parlance, is where things go to die.
He had done everything right. But it hadn’t been urgent enough. His message hadn’t been properly formatted. The Professor hadn’t received the automatic notification that he was required to act — because the system doesn’t send one. Why would it?
When he finally reached the Professor, the man responded with a three-word sentence: “Now signed. Regards.”
No apology. No recognition that the delay had already been labelled his fault. No comment on the damage.
But that wasn’t even the worst of it.
Fachschaft Nocturna — the guild of student representatives — didn’t mock him directly. They didn’t need to.
They simply forwarded messages to each other, quietly excluded him from the secret spell archives, and maintained that annotated past exams — full of the Professor’s own marginalia — weren’t technically prohibited. After all, the professor knew.
They only shared them at their Potion and Prosecco Nights.
“You’re welcome to come,” they once told him, smiling politely, “but no pressure, of course.”
He didn’t come. They knew he wouldn’t.
He didn’t drink. He didn’t blend. He didn’t ask the kind of questions that ended with “lol.”
He asked why the real material wasn’t made available to everyone.
They answered with silence — and wine.
When he sought help from the Grand Office of Equal Treatment (whose door had rusted into place), they replied, eventually:
But there weren’t others.
One had a known record of never awarding better than a C+. Another required mandatory attendance to all lectures, even those at dawn, even if the student had a physician’s scroll stating otherwise.
Attendance mandates?
“Ah,” the equal-treatment wizard said, “we can’t override that. Freedom of Research and Teaching, you understand.”
The same principle, incidentally, that had been used when the University sued the City Council for trying to impose fair labor contracts.
You can’t tell a Professor to treat their staff well. That would violate their freedom.
You can’t tell a Professor to accommodate disability.
That would violate their freedom.
You can’t tell a Professor to stop giving public grades of “0.0” for spelling errors in magic theory.
Freedom, again.
And if you try?
“Well,” said the Assistant Wizard for Institutional Flexibility, “you start sounding a bit… querulous. Or paranoid. Or — forgive me — like you don’t belong.”
Later, after his file had been downgraded to parchment, he learned that someone in the Committee for Student Welfare had said:
He once went to the Great Hall of Student Serenity.
The woman at the desk — who had been a student there herself, long ago, and now wore the robes of administration — told him kindly:
She had meant it well.
She hadn’t seen the message the Petitioneer had received after one formal complaint:
“You should have taken action earlier. Like… in your first week. So we could reject you then and maybe reconsider years later.”
A classmate had once tried that.
She had called the system inhuman and were never heard from again.
He once told a social-mind-healer that the pressure might one day kill someone.
The healer looked down and said: “That already happened. But… not here. Technically. You see, if people have serious conditions, we cannot pin cause to University actions, they might have died anyway.”
He had returned to this office, this time not because of credits or Erasmus or health accommodations – but simply because he had missed three lectures due to illness. He had done the obvious thing: written to the class group asking for notes.
The response?
The second response?
The third, from the Academic Counsellor for Social Wellbeing?
He nodded. Quietly. And then, being who he was, he asked again – slowly, politely:
She leaned back, as if his tone had been too sharp.
He stood there. The Petitioner.
Still with a fever. Still without notes. Now, apparently, potentially autistic and irrational for thinking he had a right to fairness. And she even suggested a solution of sort for future cases like that.
“If you would get an official diagnosis, that would be helpful. You could get a learning aid paid by the district |that could take notes for you when you are sick. Unfortunately, the application takes six months, exceeding your projected time to finish your degree.”
Far above the Portal of Paperwork, the Council of Institutional Conscience met again.
The Treasurer of Empathy (retired) coughed:
He was asked to step outside.
Seeking answers – or maybe just a sliver of acknowledgment – The Petitioner brought the issue to the Café of Gentle Interventions™, though lately it had developed a strange new energy. The interns were getting… efficient.
One of the social workers, a bright-eyed graduate with a clipboard and a nervous laugh, listened. And then said:
Another nodded solemnly.
And a third, a former psychology student who’d once given a talk on burnout prevention via bullet journaling, added gently:
He blinked. The Petitioner. Still the same fever. Still no notes.
Now, however, he had acquired three new labels:
No reply?
His fault.
A plea for help?
An imposition.
A second message?
Emotional pressure.
Even the places meant to be warm had thermostatechnical problems.
He left the Café. Sat down. Breathed in the cold air of the reality outside.
It wasn’t just the Unseen University anymore.On the Petitioner’s desk now lay a piece of parchment.
🎓 Meanwhile, in the Council for Academic Accountability (Sub-Committee for Selective Listening):
“Not our mandate.”
A reply to his official complaint, written in looping ink:
“Dear student,
While we acknowledge your frustration, the tone of your message may be interpreted as accusatory.
We recommend focusing on self-responsibility and emotional resilience.
Sincerely,
The Committee for Structural Empathy Without Structural Change™”
So-so and good news on China
We now have the official Q2 2025 numbers on the main components of China’s energy transition. Here are the y.o.y. changes from Q1 and Q2 2024, physical units apart from GDP:
2025 over 2024******** Q1 ******** Q2
Thermal generation___ – 4.31 % __+ 0.42 %
Electricity_____________ + 1.58 %___+ 3.16 %
Coal___________________ + 9.17 %___+ 4.55 %
Natural gas ___________ + 4.30 %___+ 7.36 % (but on a low base by international standards)
Gasoline___________ – 6.54 %_____ – 9.17 %
Pig Iron____________ + 1.24 %____ – 6.12 %
Cement____________ – 2.47 %_____ – 1.64 %
GDP at constant prices +5.42 %__ + 5.2%
The so-so news is that coal generation ticked up very slightly in Q2 on the back of a recovery in electricity demand, but is still down on the whole half-year. Xi continues to dither on coal, in marked contrast to the committed policies driving the switch to EVs and an accelerating fall in gasoline. The pace of new renewables has stayed high, and we can reasonably hope the fall in coal generation will resume soon. The continued growth in coal production is a mystery. as it’s not justified by trends in its customers, coal generation and primary steelmaking.
The biggest news is that Lauri Myllyvirta at CarbonBrief has confirmed my prediction that China´s CO2 emissions have almost certainly peaked and in Q1 of this year fell modestly: https://www.carbonbrief.org/analysis-clean-energy-just-put-chinas-co2-emissions-into-reverse-for-first-time/ As a professional, he lards the finding with caveats about things that could still go wrong, and leaves out things that could go even better. Meanwhile, Donald Trump .… oh, let’s forget him just for once, and leave him stewing in his own irrelevance.
From the FT;
Sizewell C nuclear plant will cost £38bn to build, the UK government is set to admit for the first time next week as it reveals the terms of an expected deal for private investors to fund a small portion of the bill.
The new official estimate is a big increase from a £20bn figure given by French energy giant EDF and the UK government for the project in 2020, reflecting surging construction inflation and new contingency costs.
A trio of private companies are set to contribute to a £9bn equity raise, but the majority of Sizewell’s construction will be funded by loans underpinned by a levy on consumer bills, according to people familiar with the matter.
The UK government is expected to remain the largest investor in the project with a 47.5 per cent stake, the Financial Times previously reported.
the carbon brief analysis on China is encouraging. I was amazed at the fact that 200 GW of solar was installed in the first 5 months of 2025. And this was a 150% increase on the first 5 months of 2024. How can the IEA or anyone do projections to 2030 if there’s a growth rate of 150%. I think we have to accept we don’t know what the renewable energy and emissions level will be in 2030. And it will basically be China who will determine what the levels will be.
John Goss
This is significant and would set legal precedence for future applications. The response of the Minerals Council is understandably one of denial.
https://www.abc.net.au/news/2025-07-24/mount-pleasant-coal-mine-expansion-halted-by-court/105566836
This reminds me of “the operation was a success but the patient died”
https://www.abc.net.au/news/2025-07-25/murray-darling-basin-plan-review-water-report-card/105568258
Thanks for all these comments, everyone and for the story from Hix. I enjoy reading them, even if I don;t always have time to respond