The Telegraph is promoting Rishi Sunak's favourite theme - which is freeports - this morning. I suspect that's not by chance. I said to myself that I would not blog today, but I did some tweets (best read from the bottom up)
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According to that well known Aberdonian Michael Gove, there should be a free port in Aberdeen. If they try that, I hope that the Scottish Government and local councils will find a way to stop them – any advice on how to do that would be welcome as I suspect the SNP may just shrug, issue platitudes, and say it wasn’t me guv.
Some aspects of the Freeport definitely conflict with devolved powers – the consultation acknowledges this
May I say I appreciate the easy access to your tweets. They are well written.
Freeports – once these are in, they will be very hard to get rid of.
I want to emigrate.
I enjoy the discipline of tweets at present
A friend once mentioned the 4 C test that should be applied to any government policy:
Does the government have the Competence to carry it out?
Does it encourage Corruption?
Does it meet basic Cost Benefit analysis?
Does it have broad Consensus?
Answers on a post card to 11 Downing Street.
I am no fan of cost benefit analysis
“I am no fan of cost benefit analysis”
????
You don’t think that it is a good idea to assess the benefits of a particularly course of action before incurring significant costs?
It seems an entirely sensible approach to me.
How do you price externalities?
Is Labour an asset or cost?
What price is a death?
Why discount values?
Ultimately CB analysis can be used to justify anything, or not
The problem with cost-benefit analysis (CBA) is that there is no agreed, boilerplate methodology that stands up to criticism. Government uses it to produce the results it wants. Examine, simply for example the methodological criticisms that have poured down on HS2.
Dieter Helm, Professor of Energy Policy at the University of Oxford has described HS2 (in spite of favourable Government CBA analysis of returns for £1 investment of 1.4-2.3, depending on the time they carried it out and the fancy footwork) as “a conclusion in search of a rationale”, here: http://www.dieterhelm.co.uk/regulation/transport/hs2-a-conclusion-in-search-of-a-rationale/
Helm points out “The original idea, the good one, was to integrate the UK into a European increasingly interconnected high-speed network”. That was abandoned early by the British Government. Now with Brexit it is deader than dead. Helm closes with this reminder: “Cancelling HS2 has many attractions. Building a European linked rail system also has lots of attractions. Half-baked intermediate options risk losing major gains, for the benefit of small cost savings.”
The problem is that cost-benefit analysis can easily be used to prove just about anything you want.
I could point you to lots of detailed analysis that criticises the methods used by Government on HS2, like the lack of a ‘Henscher equation’ (whatever that is), but I think we can all see when we are being invited to look at this esoteric stuff over here, when actually we should be looking somewhere else completely; somewhere obvious.
Here is the irony of HS2. If it ever arrives in London, it assumes that all these people from Birmingham, or Manchester or Leeds or Newcastle (never), Glasgow (never), Edinburgh (never) their only destination must be London; not Paris or Brussels or beyond: because they are going to have to disembark at Euston and walk to St.Pancras for the Eurostar, about ten minutes away. They might supply a travelling walkway, if you are lucky. This is how daft HS2 is, and it all passed CBA with flying colours. QED.
Agree with all that
Agree that cost benefit analysis is no silver bullet. However what they provide is a basis for discussion and further analysis. Some planning is better than no planning.
I agree with planning and risk appraisal
But with it being recognised that all decisions are ultimately judgment in the dark
CBA disguises that and pretends the unknowable can be rationally appraised
What CBA proves “is a basis for discussion and further analysis.”
No it doesn’t. It was hijacked long ago. It is used by Governments generally to provide recondite methods of analysis that typically grossly over-simplify complex relationships, to spin whatever result the government wants. CBA has allowed itself to destroy its own credibility.
The results are used in the media by Government to achieve a short-term purpose, then they throw it in the wastebin. Very few people examine the detail, or understand the terminology, because very few people actually use CBA day-in-day-out, nor does it have a sufficiently robust history beyond the theory to hold up to close examination.
Usually the projects that use CBA are over long time scales and the basis of the assumptions corrodes very quickly; then the design parameters change; then the economy changes; then the technology changes; then the contracts change: and eventually everyone either forgets about it; or loses the will to pursue it, or even live with it.
Hmmm…..
Maybe I am too reasonable 🙂
Interestingly in the First Phase trade agreement the United States has made with China under Trump the United States has insisted on inserting what is known as a “Non-Market Clause” which basically means if China doesn’t play by what is considered normal global trading rules, i.e. continues to currency rig, then the United States will have the right to withdraw from the agreement and put up a high tariff barrier against Chinese imports. Of course, the Chinese are trying to get round this by re-badging their exports through other friendly countries Vietnam in particular.
If Johnson and Sunak think they can get round normal global trading rules to boost British exports by using freeports then I suspect they’ve got a big surprise waiting for them. The world is slowly waking up to how market fundamentalist capitalism lacks much in the way of a moral compass!
Good point
I do hope that the world is waking up to this sort of stuff but not on a moral basis, maybe a more self-interested one?
When I hear ‘free-port’ I equate it with ‘free-fire zones’ in combat areas – they have consequences and as Michael Hudson points out, modern trade is too much like warfare than co-operation and mutual benefit (the EU perhaps excepted).
China are obviously playing a better game than Russia – rather than be victims of Western trade pressures, they have instead embedded themselves in the world trade infrastructure. It has pluses and minuses of course but it also enables them to develop their own internal economy and maintain their communism (or their strain of it) unlike Russia.
And we don’t need another Russia – that’s for sure.
I do hope that the world is waking up to this sort of stuff but not on a moral basis, maybe a more self-interested one?
When I hear ‘free-port’ I equate it with ‘free-fire zones’ in combat areas – they have consequences and as Michael Hudson points out, modern trade is too much like warfare than co-operation and mutual benefit (the EU perhaps excepted).
China are obviously playing a better game than Russia – rather than be victims of Western trade pressures, they have instead embedded themselves in the world trade infrastructure. It has pluses and minuses of course but it also enables them to develop their own internal economy and maintain their communism (or their strain of it) unlike Russia.
And we don’t need another Russia – (the way in which was kicked into the free market which I think has a lot to do with how it is now) that’s for sure.
Slightly off topic Richard, but what do you think of the following:
1) Blockchain based accounting/financial systems, if not in widespread usage already ?
2) Establishment of some sort of quasi-independent global/universal currency going forward ?
a) https://www.weforum.org/agenda/2019/04/is-it-time-for-a-true-global-currency/
Maybe these measures in the next 10-25 years will improve the stability of the whole world & avert what we have seen of late ?
Blockchain? Why? Accounting is about transparency and auditability. Blockchain is the opposite
There is no currency without tax. Your suggestion makes no sense
Sorry – but these are nit credible suggestions, in my book
Essentially a blockchain is just a distributed ledger, so rather than hiding anything it can actually be used to stop fraud.
A well designed system would mean that you cannot hide transactions or change the ledger, since everyone’s copy of the ledger is identical, and the blockchain enforces that. It’s therefore a list of what happened and when, and a single source of truth that cannot be altered.
This is different and distinct to the way bitcoin works, which is obviously designed precisely to hide the origin of the money, but the concept of blockchains is much larger and can could potentially used to force transparency as much as to hide it.
I have to disagree re blockchain: the distributed ledger is usually utterly opaque, and is designed to be
But I accept it could be adapted
Indeed. Talk of walled cities makes me think something medieval this way comes. Anyhoo… what do you think they’re up to with this?
https://uk.reuters.com/article/uk-health-coronavirus-britain-finance/british-finance-proposes-repackaging-state-backed-coronavirus-loans-idUKKBN24B1M6
I suspect this may be represent skulduggery on many levels.
The enterprise zone analysis of Sissons and Brown ( which I know you have not read, alas ) does rather contradict your analysis. And these are rather serious analysts.
Of course I have my read every analysis
But I have of pretty much every major law enforcement agency
Thank you for the link, and FWIW, to make them appear in the correct order you can just keep replying to the most recent tweet in the thread (even though that means replying to yourself). Alternatively Twitter lets you compose a thread and send them all at once: Once you run out of characters simply click the + sign instead of the word “tweet” and it will make another text field, repeat as necessary. Then to link to the thread you need to select the first tweet in the thread to copy the URL.
But they’re nit threads on Twitter, necessarily, so those don’t work
In fact, experience us that twitter threads are not well read
So I am afraid they’ll continue here the wrong way up for now – because I have not got the time to do anything else. Sorry….
They could write encyclopedias about how twitter’s algorithm supposedly does or does not favor certain styles. If you were trying to become an instagram influencer I’d say give every one of them a shot. Since you are trying to convey educational material my advice would be to do so in whatever way best gets the message across. Threads may not get as many ‘impressions’ as single tweets, but I suspect engagement is much higher with threads. And certainly the kind of person who would likely be in your audience.
Basically, if you have a thread, tweet a thread, if you have a tweet just go with that. It just gets confusing to look for sequential tweets when they aren’t in order, and if anyone wanted to use it as a reference (retweeting it with a comment) then anyone that followed would just see the 1 isolated tweet.
Just my two cents though, do with it what you will.
I’ll bear it in mind
Seriously….
But what I find is that the ones in the middle are ignored
And they’re the ones that often get retweeted most…
Its not just freeports its their bigger sister free trade agreements.
Once these are signed off any future government will find that these measures cannot be reversed except at huge costs.
These agreements will permanently reduce tax revenues , shrink the effective state, incorporate multinational arbitration clauses favourable to corporate interests, guarantee access to public services markets for multinationals, and make the country reliant on flows of dodgy money for which no questions will be asked.
And the negotiations for the biggest trade agreement is going on in secret right now.
By the time we find out the final version it will be too late to do anything about it.
https://www.huffingtonpost.co.uk/entry/uk-accused-of-caving-to-us-trade-demands_uk_5eb16d59c5b60a9277823f3e
Why is this being ignored ?
and this…
https://www.huffingtonpost.co.uk/entry/what-us-business-wants-from-a-us-uk-trade-deal_uk_5dc97dc9e4b00927b2370fa9
Why is this being ignored ?
because we are being played – those in the know, know exactly what they are doing.
Bit like Brexit – Liz Truss only now pops up with some of the problems that were immediately apparent to anyone who took more than a cursory interest.
I said in our office this morning – Brits will only be outraged when they find they are denied free hospital treatment in Spain after a night out on the sherberts and when their darling daughter racks up a huge roaming bill sending photos to her friends. Then it will be in the Sun “family has Spanish holiday ruined….” Mother says “I aint going back there again; they were so rude to us and couldnt be bothered to speak E-n-g-l-i-s-h-”
FUBAR / SNAFU applies..
The Bresxit of Small Things… as has mentioned elsewhere ( https://beergbrexit.blog/2019/02/08/brexit-of-little-things/ ), they are what people will notice, to bring the meaning of Brexit home – but not until too late…
Let us not forget Europe’s many Freeports:
https://en.m.wikipedia.org/wiki/List_of_free_economic_zones#Europe
Brexit was not necessary for the U.K. to have four freeport’s too.
We no longer have them
They failed
They will again