“Henry George Reconsidered” : Dodson on Hellman on George

Back in 1987, a book was published titled “Henry George Reconsidered.” The author was a woman who had a long but not intimate association with the followers of Henry George in New York City. Her name was Rhoda Hellman.

Ms. Hellman’s book adds nothing to the details of Henry George’s life, the core arguments in his writings, or the early decades of the movement he started. Yet, as an outside observer she reached a number of thoughtful conclusions about why little of concrete result had been and was being accomplished.

If you have not previously come across this book, it might be worth a quick read, particularly those chapters that record her first-hand observations. Here is the direct link:

Op-Ed. US Trade War with China: Desperate Move to Save Western Empire

by Andre Vltchek, International Daily News in China.  November 26th, 2018

Most of those who have had a chance to witness Chinese internationalist mega-projects, clearly understand that the West is near to collapsing; it will never be able to compete with tremendous enthusiasm and progressive spirit of the most populous country on earth, which on top of it, is built on socialist principles (with Chinese characteristics).

Comments invited here, with copies to both eric.britton@ecoplan.org and  robert.ayres@insead.edu please.

The Universal Basic Income: It’s time

The most widely read book on economics in history (with the possible exception of “Wealth of Nations” by Adam Smith) was a book by a self-taught political economist named Henry George. His formal education ended at age 14. He made his living as a journalist and later became a politician. Yet, his magnum opus, entitled “Progress and Poverty” was taken very seriously by economists, and justifiably so.  The book sold 3 million copies in English, in the first years after publication, 6 million copies in thirteen languages, by 1936, and many more since then. It is justifiably included as one of the ten all-time economics classics {George, 1879 [1946] #2004}. See Figure  1.

In 1879 Henry George advocated a single tax on land values. At the time he wrote, land values were a reasonable proxy for total societal wealth. Today that is less true, and I will focus on the alternatives later. Very briefly, it argued that people should own the products of their work, but that the gifts of nature, including the fertility of the land and the mineral wealth beneath, should be shared equally among all the inhabitants of the earth or the territory..

Henry George also proposed a universal basic income, or UBI, to be financed by his tax on land.  His proposal was not the first.

OP-ED. The World Economy Is A Pyramid Scheme, Steven Chu Says

Steven Chu, former U.S. Secretary of Energy, 1997 Nobel Prize winner in physics, and the new president of the American Association for the Advancement of Science. (AP Photo/Tsering Topgyal)

Jeff McMahon, 5 April 2019.

Source: https://www.forbes.com/sites/jeffmcmahon/2019/04/05/the-world-economy-is-a-pyramid-scheme-steven-chu-says/?fbclid=IwAR205rvCNRvpIO6LopZwwpRIaABuLPlJ_q-FqjyX3LY_QHOW6SwaULAABwg#17854e6f4f17

 

The world economy is based on ever-increasing population, said Nobel laureate Steven Chu, a scheme that economists don’t talk about and that governments won’t face, a scheme that makes sustainability impossible and that is likely to eventually fail.

“The world needs a new model of how to generate a rising standard of living that’s not dependent on a pyramid scheme,” Chu said at the University of Chicago.

Chu didn’t specify what that new model would look like, but he offered a solution to the population growth the current one relies on.

“Increased economic prosperity and all economic models supported by governments and global competitors are based on having more young people, workers, than older people,” Chu said. “Two schemes come to mind. One is the pyramid scheme. The other is the Ponzi scheme. I’m not going to explain them both to you, you can look it up. But it’s based on growth, in various forms.”

For example, healthy young workers pay the health care costs for aging workers and retirees, the former energy secretary said, a scheme that requires increasing numbers of young workers. And economic growth requires more and more people to buy more and more stuff, with dire environmental  consequences.

There are at least two problems with that:

1. “Depending on a pyramid scheme or a Ponzi scheme, there’s no such thing as sustainability,” Chu said.
2. As standards of living increase, population growth declines. So if the economy succeeds in raising standards of living, it undermines itself.

“The economists know this, but they don’t really talk about it in the open, and there’s no real discussion in government,” Chu said. “Every government says you have to have an increase in population, whether you do it through immigrants or the home population. So, this is a problem.”

China has replaced its one-child policy with incentives for parents to have two children, Chu noted as an example, and France offers a prize, the Médaille de la Famille Française, to mothers of large families. Incentives like these will not help the world achieve sustainability, he said.

Chu, the man who solved the Gulf Oil spill with a doodle on a napkin, then offered two painless solutions to population growth:

“Education of women and wealth creation. Across all cultures. You go negative. You go negative birth.

“In many countries around the world, developed countries, Japan, Spain Italy, we’re talking about 1.3 (children per couple), 1.2 going below 1, where 2 is steady state.”

So Chu expects these effects of rising living standards to eventually offset the growth of human population. That will help the environment, he said, but it will also require a new kind of economy.

Chu’s visit to the University of Chicago was sponsored by the Energy Policy Institute of Chicago (for whom I sometimes host podcasts) and the Institute of Molecular Engineering.

# # #

AYRES ON SEX AND SOCIETY

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Sex among humans is very different than it is among other species, although tree-dwelling species (anthropoid apes and monkey share some of the differences. Jared Diamond started his book with his idea of a dog’s view of human sexuality:

If your dog had a brain, and could speak . .  .

THINKING ABOUT SIMPLE THINGS

– By Robert U. Ayres

Background

From early childhood I have been fascinated by learning “how things work”. I suppose that is quite natural for children, but for one reason or another, most children are discouraged at an early age. The world is too complicated, there are too many “things” to learn about, there are conflicting short-term needs for time, they are told that parents or teachers or priests will explain it all in due course when we are “ready”, etc.

For some reason, however, I found a book called “The Strange Story of the Quantum” that introduced a curious idea, namely that there is an underlying simplicity that can be grasped by human intelligence, and that understanding “things” can sometimes be approached from “below”, so to speak rather than from the usual perspective “above”.  I read that a fizzy-haired man named Albert Einstein had already found a way to put that underling simplicity in a single mathematical equation, a “theory of everything”. It is why I was attracted to physics.

Battles of Ideas

Section to follow [perhaps a bit less bloody but no guarantees].

Editorial: Hmm, let’s see. Now that didn’t work, didn’t it? That at least is clear. But why? And what do we do now?

Editor’s Note. Paris, 25 May 2018.

Dear readers, friends and colleagues,

This ambitious collaborative web project “Ayres on Environment, Economy, Energy & Growth” has been in existence for close to four full years now.  And over this time despite the potential of tremendous content and burning issues, and considerable effort on our part, it has failed to take off.  At least to the degree that the subject merits.  What went wrong?  And where should we go from here?

Making a web platform like this work — highly technical content, including a fair dose of abstract  topics and analytic approaches which require a well prepared audience to be meaningful — is no easy task. And all the more so in this era of crushing information overload.  But that would be a poor excuse.

The main shortcoming thus far has been that we have simply failed to give it sufficient time, commitment, touch and content  — or regularity, — to win over the kind and size of audience which the work and findings of Ayres and his distinguished colleagues deserve in their own work in these complex inter-related spheres of, once again, Environment, Economy, Energy & Growth,..

Protected: Op-Ed: Joseph Stiglitz on America as afflicted by an ideology that doesn’t work

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Op-Ed: Econ Majors Graduate With a Huge Knowledge Gap

What’s needed is a mandatory course on ethics and the limits of knowledge.

    Moral philosopher. 1723-1790

  – By Noah Smith.   Bloomberg View. April 13, 2018.   https://bloom.bg/2vue79V

Economics remains one of the most popular majors for college students. Most econ students, of course, don’t go on to become professional economists; instead, they fill the ranks of the U.S.’s vast pper-middle-class of business managers and professionals.

The models they learn in their college classes inform the way they think about the world, even if they don’t end up using them for quantitative purposes after final exams are over.

After the great repatriation: Where will the money go and what will it do?

– By Robert U. Ayres

               For several weeks, the guys and gals at CNBC and Bloomberg News, and their guests, have been talking about the coming tax reform (cut) legislation that the Republicans finally seem to have in their grasp. Well, maybe not exactly reform, maybe not revenue-neutral, but at least tax cuts for the corporations that give them campaign money. All the cheerleaders, both in Congress and the White House, assert confidently that faster growth will pay for the cost of the tax cut, even though virtually all economists (including me) say that it won’t.

A hint about the trouble with GE

                                                                                                          Source https://www.investopedia.com/

The continued decline in GE share prices (now around $13 per share) have been a major topic in the financial press (and TV) during the past year. Jeffrey Immelt (Jack Welch’s protegé) is gone, no doubt with a sizeable “golden parachute” to comfort his golden years. Yet in GE’s peak year, under Welch, in August 2000 (just before the “dot.com” crash) GE was worth more than $600 billion. Currently it hovers around $115 billion. As of September 2017 GE was still in the Dow-Jones Industrial Average (DJIA), since it is by far the biggest US manufacturing company in revenues, if not in profits. The annual dividend, formerly  $0.90 per share, is now $0.48. In other words, GE is not earning enough to cover its traditional dividend payout. The company is likely to sell around $20 billion in assets in 2018, just to cover expenses.

China’s Lose-Lose Love Affair with the Modern Motor Car

Credit: David Gray/Reuters/Fil

Report from China: Robert Ayres

In December I travelled to the city of Kunming, in Yunnan province, China. The occasion of the trip was to attend a conference on planning and give a talk on economics at that conference. The host was the newly appointed provincial Governor, who is also the Communist Party Chairman for Yunnan. The organizer was the former chief planner for Singapore, and the attendees were academics and civil servants in the urban planning departments from all of the major cities of  organizer was the former chief planner for Singapore, and the Yunnan province. I was invited on short notice (only two weeks) and I was asked to provide a copy of my talk in advance, without much detailed information about the actual situation. What I did know about China was more applicable to Beijing and Shanghai than to Kunming. So, I had to “punt”, as they say.

REPUBLICAN TAX POLICY: A cruel scheme to cut social security while gorging the military-industrial complex.

The all-white, all male finance committees of both Houses of Congress got behind this bill.

With straight faces, the salesmen for the Trump tax cut have promised a miracle: increased corporate profits, a surge of investment in CAPX, more and better jobs with higher pay, all to be paid for by accelerated economic growth. In fact, the all-white, all male finance committees of both Houses of Congress, with Treasury Secretary Mnuchin and Chief Economic Advisor Hassett say that the US will grow at 3% p.a. or more for the next ten years – no recessions – and that the tax cuts will actually generate a profit for the government of $300 billion in that time. Sadly (and no irony intended) this combination of goodies is a pipe dream. In the next few paragraphs I will explain why, and why Trump and the Republicans are selling snake oil to the suckers. What is surprising is how many financial professionals are buying it.

WHY THE REPUBLICAN TAX BILL SHOULD FAIL IMMEDIATELY.

Robert Ayres, INSEAD
with Michael Olenick and Lu Hao

Tax cuts, wages and salaries: Will lower taxes help workers? And the economy?

For several weeks, the guest experts on CNBC and Bloomberg News have been talking about the coming tax cut legislation (for corporations) that the Republicans finally seem to have in their grasp. The Bill, as it is currently proposed, will eliminate the insurance mandate for health care and may leave quite a lot of upper middle class salaried people, worse off, especially in high tax states.

The sure winners will be the shareholders of multinational corporations and “pass through” enterprises, especially real estate partnerships. The “supply-side” cheerleaders for the plan, both in Congress and the White House (Mnuchin, Cohen, Mulvaney, et al) argue that economic growth be much faster, that it will pay for the cuts, and that wages and salaries will rise, thanks to a burst of new investment.

By contrast, virtually all top economists say that the cuts won’t pay for themselves, that the deficit and the national debt will increase, and that growth will not accelerate.

After the great repatriation . . . ?

 

Where will the money go and what will it do?

By Robert U. Ayres and Michael Olenick

For several weeks, the guys and gals at CNBC and Bloomberg News, and their guests, have been talking about the coming tax reform (cut) legislation that the Republicans finally seem to have in their grasp. Well, maybe not exactly reform, maybe not revenue-neutral, but at least tax cuts for the corporations that give them campaign money. All the cheerleaders, both in Congress and the White House, assert confidently that faster growth will pay for the cost of the tax cut, even though virtually all top economists, starting with Paul Krugman and Larry Summers,  say that it won’t.

A hint about the trouble with GE

 

The continued decline in GE share prices (now below $20 per share) have been a major topic in the financial press (and TV) during the past few weeks. Jeffrey Immelt (Jack Welch’s protegé) is gone, no doubt with a sizeable “golden parachute” to comfort his golden years. Yet in GE’s peak year, under Welch, in August 2000 (just before the “dot.com” crash) GE was worth more than $600 billion. Recently it fell to $190 billion.

Hmm. Let’s have a look.

Secular Stagnation (Or Corporate Suicide?)

Robert Ayres and Michael Olenick, INSEAD
INSEAD WORKING PAPER

 Abstract

We advanced the null hypothesis that stock buybacks will have a positive impact on the market value of a business over a five-year horizon. We find that there is a negligible chance for this to be true (with a two tail heteroscedastic p=.000023).

We find that the more capital a business invests in buying its own stock, expressed as a ratio of capital invested in buybacks to current market capitalization, the less likely that company is to experience long-term growth in overall market value.

Our findings, for US firms worth more than $100 million, suggest that long-term investors, such as pension funds, should be wary of investing businesses that have engaged in significant cumulative stock repurchases (i.e. 50% or more of current market cap.)

We find that excessive buybacks in the past decades are a significant cause of secular stagnation, inasmuch as they effectively reduce corporate R&D while contributing, instead, to an asset bubble that creates no value.