Driverless taxis are already operating on public streets in these two places, although for now their range is limited and they still have “safety operators”. Once this catches on, I have a hard time imagining how fixed-route bus services could continue to compete. If I ran a public transportation system I would be trying to get innovative on flexible routes right away.
directed technological change
If I follow the general idea in this paper, it is that some government policy intervention, whether through taxes or direct R&D spending, is necessary to get green technological improvement to a rate that would be best for society.
Directed Technological Change in a Post-Keynesian Ecological Macromodel
Abstract: This paper presents a post-Keynesian ecological macromodel, which is stock-flow consistent, and incorporates directed technological change. Private and public R&D spending across three competing, yet complementary inputs – Labor, Capital, and Resources – follow a portfolio allocation decision, where inputs with relatively higher growth in costs, see higher R&D investment and productivity gains. Two policy experiments are reported; a market-based Resource tax increase, and a centralized green policy, where public R&D budget is shifted towards Resource-saving technologies. We highlight that in the presence of labor market institutions, which give rise to hysteresis, and limited R&D budgets, a policy of continuous Resource tax growth is needed to induce Resource-saving technological change to achieve a greener economy. This needs to be coupled with planned government spending adjustment to spur demand and boost investment. The findings also suggest that a mix of market-based and centralized policies may be optimal.
I had to look up the term “post-Keynesian”, and I’m still confused after reading the Wikipedia entry. Basically, these are people trying to carry on and build on Keynes’s original work. They emphasize the importance of long term aggregate demand on growth and employment, and the importance of money and interest rates in this system.
bullshit jobs
In David Graeber’s 2013 essay On the Phenomenon of Bullshit Jobs, a bullshit job is one where the person doing it doesn’t think it is necessary or important. The paradox is that many high-paying corporate jobs seem to fit this mold.
Why did Keynes’ promised utopia—still being eagerly awaited in the ’60s—never materialise? The standard line today is that he didn’t figure in the massive increase in consumerism. Given the choice between less hours and more toys and pleasures, we’ve collectively chosen the latter. This presents a nice morality tale, but even a moment’s reflection shows it can’t really be true. Yes, we have witnessed the creation of an endless variety of new jobs and industries since the ’20s, but very few have anything to do with the production and distribution of sushi, iPhones, or fancy sneakers…
But rather than allowing a massive reduction of working hours to free the world’s population to pursue their own projects, pleasures, visions, and ideas, we have seen the ballooning of not even so much of the ‘service’ sector as of the administrative sector, up to and including the creation of whole new industries like financial services or telemarketing, or the unprecedented expansion of sectors like corporate law, academic and health administration, human resources, and public relations. And these numbers do not even reflect on all those people whose job is to provide administrative, technical, or security support for these industries, or for that matter the whole host of ancillary industries (dog-washers, all-night pizza delivery) that only exist because everyone else is spending so much of their time working in all the other ones…
This is a profound psychological violence here. How can one even begin to speak of dignity in labour when one secretly feels one’s job should not exist? How can it not create a sense of deep rage and resentment. Yet it is the peculiar genius of our society that its rulers have figured out a way, as in the case of the fish-fryers, to ensure that rage is directed precisely against those who actually do get to do meaningful work. For instance: in our society, there seems a general rule that, the more obviously one’s work benefits other people, the less one is likely to be paid for it. Again, an objective measure is hard to find, but one easy way to get a sense is to ask: what would happen were this entire class of people to simply disappear? Say what you like about nurses, garbage collectors, or mechanics, it’s obvious that were they to vanish in a puff of smoke, the results would be immediate and catastrophic. A world without teachers or dock-workers would soon be in trouble, and even one without science fiction writers or ska musicians would clearly be a lesser place. It’s not entirely clear how humanity would suffer were all private equity CEOs, lobbyists, PR researchers, actuaries, telemarketers, bailiffs or legal consultants to similarly vanish. (Many suspect it might markedly improve.) Yet apart from a handful of well-touted exceptions (doctors), the rule holds surprisingly well.
I’m not quite so sure. I think that as we have become wealthier, things our grandparents would have thought of us “wants” are now classified as “needs”. I think air conditioning is one good example. My grandparents would have considered it an unimaginable luxury, but I consider it somewhat of a necessity that improves my life and my family’s life, and I am willing to work a little extra to have it. I can think of a lot more examples that don’t fit this though, starting and ending with all the junk in my house. I would gladly give up most of it in exchange for working a little less. So what is stopping me? That’s actually a hard question to answer. My life style is calibrated to my income and vice versa in an endless cycle that is hard to break, kind of like popping a balloon with your bare hands – how do you get a grip so you can apply pressure? The cable bill might be a start – in fact, I just bought a digital antenna and cancelled my cable. I kept my internet connection though, and somehow Verizon figured out a reason that saves me only a little money (some “discount for bundled services” that no longer applies). So now I could theoretically work maybe 5 minutes less a week, but that would be a weird conversation to have with my employer, and is not going to happen. And of course I am not giving up my internet, because that is a necessity for me and my family, which my grandparents could not even have conceived of existing, but which I am willing to work a little extra to pay for…
the stats on Uber and Lyft
A new report provides interesting data on ride sharing nationwide. We all knew they were shifting rides away from the traditional taxi industry, but they are also resulting in more traffic on the road for a few reasons. First, they are taking trips away from traditional public transportation and from walking in major, high-density cities. And second, people are taking trips they otherwise wouldn’t have taken. The evidence that they are putting downward pressure on car ownership rates does not appear to be strong, at least so far.
I have a few reactions. From a purist economic perspective, if people are choosing to take trips that were too expensive or too inconvenient before, that is a positive improvement in those people’s lives. If the traditional taxi and public transportation models are too slow, dirty, inconvenient and/or expensive to compete, they need to figure out how to step up their games. My sympathy is limited, but I would rather see traditional public transportation adapt than disappear. I have no love for taxi dispatch companies, but I do have sympathy for the small-time owner operators that borrowed large sums of money to invest in a regulated taxi medallion. Governments really ought to buy those medallions back at the market price before Uber and Lyft came on the scene (and then throw them away forever). Fewer walking and/or biking trips is not good for people’s health for both physical activity and air quality reasons, but there city governments need to step up their infrastructure and planning games if they want walking and biking to be truly safe and inviting ways to get around. A final note is that even if traffic does not go down in the near term, any decrease in parking demand will be a positive for dense cities.
Ride sharing has improved my life immeasurably. I choose to live in a dense city and choose not to own a car. Before ride sharing was available, I often had trouble getting a taxi home from certain neighborhoods when I needed it, got cheated by drivers who pretended not to understand where I was going or refused to give change for cash-only payments (which were the only option). Taxi service has improved a lot now that they have some competition. Buses and commuter trains too are slow, dirty, and unreliable, although they too have improved recently. So I think a lot of people’s lives are better and I think the public will continue to demand this technology.
body scanners from Total Recall are now a thing
The Los Angeles subway is installing the body scanners from Total Recall (the good 1990 version, not the garbage 2012 remake.)
The machines scan for metallic and non-metallic objects on a person’s body, can detect suspicious items from 30 feet (9 meters) away and have the capability of scanning more than 2,000 passengers per hour…
In addition to the Thruvision scanners, the agency is also planning to purchase other body scanners — which resemble white television cameras on tripods — that have the ability to move around and hone in on specific people and angles, Wiggins said.
Hothouse Earth
This is the Hothouse Earth paper, which supposedly got media coverage last week that I completely missed despite scanning the media daily for articles on exactly this sort of topic. It argues that one or more tipping points leading to catastrophic feedback loops are looking increasingly likely if we exceed the 2 degrees C. So yes, we really need to get serious about not exceeding the 2 degrees C. But don’t worry, solutions exist! We need only take simple steps such as “decarbonization of the global economy, enhancement of biosphere carbon sinks, behavioral changes, technological innovations, new governance arrangements, and transformed social values.”
Capitalism without Capital
Bill Gates reviews Capitalism without Capital, a new book about “intangible” products and services.
They start by defining intangible assets as “something you can’t touch.” It sounds obvious, but it’s an important distinction because intangible industries work differently than tangible industries. Products you can’t touch have a very different set of dynamics in terms of competition and risk and how you value the companies that make them…
What the book reinforced for me is that lawmakers need to adjust their economic policymaking to reflect these new realities. For example, the tools many countries use to measure intangible assets are behind the times, so they’re getting an incomplete picture of the economy. The U.S. didn’t include software in GDP calculations until 1999. Even today, GDP doesn’t count investment in things like market research, branding, and training—intangible assets that companies are spending huge amounts of money on.
Measurement isn’t the only area where we’re falling behind—there are a number of big questions that lots of countries should be debating right now. Are trademark and patent laws too strict or too generous? Does competition policy need to be updated? How, if at all, should taxation policies change? What is the best way to stimulate an economy in a world where capitalism happens without the capital? We need really smart thinkers and brilliant economists digging into all of these questions. Capitalism Without Capital is the first book I’ve seen that tackles them in depth, and I think it should be required reading for policymakers.
Recently I was reading something suggesting that countries should keep a balance sheet, which keeps track of stocks, in addition to GDP, which is more like an income statement keeping track of flows. This seems right to me. Spending on education and training adds to the stock of human capital at some rate, but efficiency may vary and the stock is also being depleted at the same time. Drawing down natural capital increases income on the short term but comes at the expense of the long term. Research and development are a little different because they affect the pace of progress, or at least improve the odds of the gamble.
trees, air and traffic
Vancouver has successfully combined and implemented “green streets” and “complete streets” concepts, which somewhat obviously should be combined and implemented everywhere.
box plots!
One of my nerdy interests in box plots. And no, you can’t make great ones in Excel. Here is a blog about making fantastic ones in the R package ggplot2.
China’s population could “drop sharply”
According to this New York Times article, China’s working-age and child-bearing age population has already started to drop, and the population as a whole may follow. Considering that China represents 1/7th or so of humanity, this is supposedly bad for the economy. It could be good for the planet, but just a reminder that peak population does not necessarily peak ecological footprint if “living standards” (i.e. fossil fuel burning, private car driving, plastic consuming, meat eating, etc.) per person continues to rise.