Ayres on Governance: Some half-baked ideas that might be worth baking

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If I had the job of preparing a model constitution today, I would start with . . .

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Op-Ed: Extreme Inequality not Driven by Merit, but by Rent-Seeking and Luck

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From an article in Evonomics by Didier Jacobs,special advisor to the president at Oxfam America. Full text at http://evonomics.com/extreme-inequality-not-driven-merit-wealth/. Based on an interview by  Sam Pizzigati, veteran labor journalist and Institute for Policy Studies associate fellow

Defenders of our deeply unequal global economic order had to put in a bit of overtime last month. They had to explain away the latest evidence — from the global charity Oxfam — on how concentrated our world’s wealth has become. A challenging task.

Back in 2010, Oxfam’s new stats show, the world’s 62 richest billionaires collectively held $1.1 trillion in wealth, far less than the $2.6 trillion that then belonged to humanity’s least affluent half.

Now the numbers have reversed. The world’s top 62 billionaires last year held $1.76 trillion in wealth, the bottom half of the world only $1.75 trillion.

Jacobs: Put simply, economists define rent as the difference between what people are paid and what they would have to be paid to do the work anyway. In other words, a rent is excess income, income that does not generate any effort.  So if your farmland happens to be more fertile than surrounding farmland, you get more production out of it for the same effort, and that extra income you get is a rent. Rent-seeking entails getting hold of wealth produced by others. Lobbying government to obtain a subsidy is an example.

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Cornucopians versus Doomsters: On Julian Simon’s Refutation of Global 2000 (and the Club of Rome)

man-chart-growth-copernius-viewRachel Carson’s landmark book “Silent Spring” was published in 1962. It, alone, of the important environmental best-sellers of that era, had a significant impact: it led to the banning of DDT (at least in the Western world) and major shifts in agricultural practice.

Paul Ehrlich, a noted American biologist, best known for his warnings about the consequences of population growth and limited resources,  was the author of a famous book “The Population Bomb” (1968), in which he claimed (as Malthus had claimed in 1798) that increasing population – demographic catastrophe — would inevitably outstrip food and resources, and that hundreds of millions of people would starve to death in the 1970s.

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What Climate Deniers fail to understand about the planet Earth. Part 3: The Ocean Cannot Absorb Much More CO2

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Most carbon emissions are absorbed by the ocean, but it’s running out of capacity, which could make global temperatures rise even faster.

The bottom line is that there is no alternative non-anthropogenic theory to explain rising temperatures, melting glaciers, sea level rise and ocean acidification. If we don’t act, the existing mechanisms of the climate will only reinforce the damage already done.

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A Dangerous Crack in Economic Theory:

Why growth is slow and world trade is not always win-win.

robert-ayresAs Larry Summers and many other economists have lamented (and even Donald Trump has said in several campaign speeches), it is true that the global recovery from the financial collapse of 2008 has been extraordinarily slow. Explanations vary widely. My own explanation up to now has focused on the shift from growth based on the exploitation of natural resources (especially oil and gas) to growth based on ICT technologies incubated in Silicon Valley but employing very few people. Another explanation centers on the working class reaction (in the US) to globalization and “free trade deals” favoring the export of manufacturing jobs to low wage countries.

A related explanation centers on the rise of the financial industry, along with its preference for moving money into the creation of asset bubbles rather than investment in small businesses in the “real” economy. A cousin of this explanation is that the money available for investment by the richest few is increasingly devoted to increasing the power of money in the political process. There is probably some truth in each of them.

The end of the era of increasing debt, with near zero interest rates is coming very soon. When it does, the cost of those deficits will explode, and the pressures for a major revolution in economics, capitalism and democracy, will also explode.

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What Climate Deniers fail to understand about the planet Earth. Part 2. The Climate Could Be More Sensitive to CO2 Than We Think

Climate sensitivity could be underestimated, adding urgency to reducing carbon emissions

In my last article on this topic, I pointed out how the Intergovernmental Panel on Climate Change (IPCC) is improving its methods and research, and getting closer to proving the effects of man’s current lifestyle on the climate of our planet. Climate deniers, however, remain steadfast in their convictions that the IPCC’s science is wrong or that it’s all just a scam to increase government power. The fact that they have no proprietary research to substantiate their claims that rising CO2 levels are harmless or that human beings have nothing to do with it, doesn’t seem to stop them picking holes in the science.

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