Here’s another excerpt from my book-in-progress, Economics in Two Lessons. As usual, praise is welcome, useful criticism even more so. You can find a draft of the opening sections here.
In the section over the fold, I’m looking at public ownership.
Fuel efficiency standards could help curb Australia’s persistently growing emissions
That’s the title of my latest contribution to The Conversation.
That was quick
Not long after the election, I perceived the signs of an emerging semi-formal coalition between the LNP and One Nation. Less than three months later, here’s Jeff Kennett, generally seen as a relative moderate in the Victorian Liberal Party, endorsing the idea.
To repeat what I said then, I remain convinced that this will prove a path to disaster for the LNP in the long run. One Nation is already repeating the history of meltdowns we saw in its first big run, and making clear that it stands for nothing beyond incoherent gesture politics. That’s true of rightwing identity politics in general, which is why I think it can’t last. It can, however, do plenty of damage in the meantime.
Privatisation and education re-re-re-post
I’m working on my long running book project Economics in Two Lessons, and I dug out this old post, originally written in 2008, which remains strikingly relevant today.
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The economics of open borders
A colleague recently sent me a paper on the economics of open borders, by John Kennan, which I hadn’t known of before, though it came out in 2013.
Kennan’s conclusion is striking
Liberal immigration policies are politically unpopular. To a large extent, this is because the beneficiaries of these policies are not allowed to vote. It is also true, however, that the enormous benefits associated with open borders have not received much attention in the economics literature.20 Economists are generally enthusiastic about free trade. But if free movement of goods is important, then surely free movement of people is even more important.
One conclusion of this paper is that open borders could yield huge welfare gains: more than $10,000 a year for a randomly selected worker from a less-developed country (including non-migrants). Another is that these gains are associated with a relatively small reduction in the real wage in developed countries, and even this effect disappears as the capital–labor ratio adjusts over time; indeed if immigration restrictions are relaxed gradually, allowing time for investment in physical capital to keep pace, there is no implied reduction in real wages.
So, is Kennan right about the benefits of open borders? And if so, is there a way of transferring some of those benefits to already-resident wage earners who would otherwise lose, or at least not gain, from expanded migration?
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If the Productivity Commission puts ideology ahead of evidence, do we still need it?
That’s the title of my latest piece in The Guardian. It’s a response to the Productivity Commission’s report on competition in human services. I wrote a submission in response to the draft report a while back, but it had no impact, and neither did any other evidence.. If anything, the final report is slightly worse than the draft.
My final para
Rather than close on a negative tone, I’ll make one suggestion for contestability. Private sector consulting firms have demonstrated a long-standing expertise in producing impressive looking reports to support the (predetermined) conclusion required by the client.
Given the predictability of the Productivity Commission’s conclusions on topics like this, private firms would have no difficulty in replicating them. Surely this is a service that could do with being opened up to the chill winds of competition.
Monday Message Board
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.
Monopoly and Regulation: Excerpt from Two Lessons book
Here’s another excerpt from my book-in-progress, Economics in Two Lessons. Rather than work sequentially, I’m jumping between:
Lesson 1: Market prices reflect and determine opportunity costs faced by consumers and producers.
and
Lesson 2: Market prices don’t reflect all the opportunity costs we face as a society.
In the section over the fold, I’m looking at monopoly and regulation. Next up, public ownership.
As usual, praise is welcome, useful criticism even more so. You can find a draft of the opening sections here.
Are young Australians (mostly) Christians ?
Regular readers will know that I’m not a great fan of analysis based on generations (Boomers, X, Millennials and so on). Most of what passes for insight on this topic consists of the repetition of unchanged cliches about the rigidity and hypocrisy of the old, the laziness and irresponsibility of the young, and so on, applied to whichever cohort happens to be old or young at the time.
But there are some genuine differences between cohorts, typically determine by the time they have entered adulthood. One of these is religion.
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Dutton, cringeworthy and (literally) un-Australian
Peter Dutton’s attempts to promote an “uprising” in support of Christmas, and against “political correctness gone mad” are un-Australian in all sorts of ways, but most obviously in the stunning cultural cringe they reflect. He’s borrowed the catchphrase of a British tabloid in an attempt to import a US culture war campaign that has been going on so long it’s a Christmas tradition in itself (I observed that it was old stuff, back in 2004). This guy is the best the Trumpist faction of the LNP/ON can come up with?
John Quiggin 