Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Category: Economics Page 14 of 89

Western Australia Proves Basic Pandemic Control Methods Would Have Stopped Covid

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On January 21, 2022

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Western Australia:

Per Capita Cases, Western Australia: .11%.

Per Capita Deaths, Western Australia: practically none.

Per Capita Cases, Australia: 8.1%

Per Capita Deaths, Australia: .12%

Per Capita Cases, USA: 21%

Per Capita Deaths, USA: .26%

Australia is famous, or perhaps infamous, for its lockdowns, but Western Australia has essentially closed its borders since Covid. Australia has thus done far better than the US, with fewer cases and even fewer deaths per capita. Western Australia, on the other hand, essentially hasn’t had a pandemic, at least not in terms of deaths and cases.

Of course, all numbers will be under-counts, but I doubt the overall picture changes because of that.

What this tells you is something simple: Basic measures for dealing with a plague were required to control Covid and would have worked. If travel, except for shipping, had been shut down the way that Western Australia did (ship crews staying on ships), then Covid would be controlled, and most likely, over by now.

Simply stopping travelers (or at least forcing them into long quarantines) is probably the oldest method of plague control in history, used for thousands of years.

We didn’t even do that. Our leaders wanted us to die and get sick, and we did. Our media rains contempt on places which dare control Covid. In those cases where our leaders preferred we not die, and were willing to do what is necessary to ensure our health and well-being, we did not die.

Had we done things right, at the start, there would have been no Omicron and probably no Delta. It wasn’t hard, it would have spared the economy in the long run, and a lot of people wouldn’t be dead or have long Covid, with more to come.

Let NO ONE tell you that letting Covid run free as a plague was not a choice. It has more than doubled the wealth of billionaires, and so a choice was made: Their money was more important than your life or health, or that of your parents, grandparents, children, or friends.

People were killed so the rich could get richer. Every one of you who has Long Covid has it because that’s what the rich wanted, so they could get richer.

Had this been done properly, at the start, or even after a couple months, we also would most likely be finished with most Covid restrictions — except maybe a few travel bans to a few countries, so, ironically, clamping down hard would have made any civil liberties restrictions (the right to infect other people or force your workers to infect others) brief and not in danger of turning chronic, like Covid.

Your leaders kill you, disable you, and they do it to get richer.

Understand that at your core. They are your enemies, by any reasonable definition of enemy, with a few rare exceptions, like in Western Australia.

(Near the start of the plague I noted that if US states wanted to control Covid, those which did the right things (currently, so far as I know, none of them) would be required to close their borders to other US states. Western Australia shows the difference that makes.)

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Elevated from Comments: This comment, from GM, is important enough that I’ve partially quoted it here:

1. Over the last few days they have had one, then two, then five, then now seven local cases, and they are not in lockdown to stop it (while previously, they did lockdown for three days over even a single case). So there is a real danger that this is deliberately allowed to get out of hand and then McGowan says “Well, it is out of the bag now, we will reopen.” There have been mentions from the local government previously that if an outbreak gets out of control, they will reopen, and this would be following the script that played out already elsewhere (NSW, VIC, Vietnam, Singapore, etc.) that allows the government to both ease the population into endemic COVID and save face by putting a “Look, we tried our best, but there is nothing that can be done” facade over it.

2. There is a long-standing suspicion that the local oligarchs controlling the mining industry in Western Australia are the ones pushing for keeping COVID out. Not because of concern for the wellbeing of the general population, but because they want to keep it out of the mines. Of course, mines have been operating in the midst of devastating COVID outbreaks in Brazil, South Africa, Indonesia, etc. But WA is a bit of a special case because of how remote from any significant population centers most of their mines are. So if you get all of your workers seriously sick at the same time, it will be a very problematic logistic operation to transport them from somewhere in Middleofnowhereville in Pillbara to Perth, which is the only location within a 1500 km radius that can treat them. And Perth’s hospitals are barely keeping up with their load even without COVID (due to many years of the usual neoliberal defund-and-crapify practices).

1) and 2) are mutually exclusive, unless there are, indeed, as is rumored, plans to impose intrastate borders in case Perth is lost, so that COVID does not spread to the mining regions.

Again, on Omicron & “Just Give Up and Let Everyone Get It”

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On January 4, 2022

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Start with this:

Omicron is more infectious than Delta. Its symptoms are concentrated more in the upper respiratory tract, which is one reason it is substantially less deadly, but upper respiratory tract infections are worse for children and better for adults.

Though it’s unclear how much less deadly Omicron is than Delta (because there are too many confounding variables like previous infection and vaccination), let’s do some clarifying math, as if you were back in school.

If Omicron is half as deadly as Delta, and four times as many people get it, how many people will die compared to Delta?

If five times as many people get it will more people die or less?

This is before we get into the question of hospitals being overwhelmed, meaning some people don’t get care, including people with problems other than Covid.

Then we have the multiplication of re-infection. Omicron appears to be optimized for re-infection. It’s not a case of “everyone gets it.” It’s a question of “How many times will you get it and does each time increase the chance of organ damage/Long Covid and/or death?” You can get the flu multiple times, then die from the last time, happened to one of my friends in his 30s.

Finally, a variant this widespread has many, many more chances to mutate. It might mutate towards even more mildness, but there’s no guarantee of that. Delta certainly wasn’t more mild.

Sending children back to schools during the Omicron surge is insanity.

I notice, also, that at least two nations are handling Omicron: China and Japan, so it isn’t a case of, “It can’t be done,” and gnashing, weeping, and pretending that we would do something — if something was possible. Something has always been possible and most nations have always refused to do what needed to be done.

That something has always been a mix of policies; not just vaccines, but track-and-trace, quarantines, lockdown, and improved ventilation. (Indeed it may be that one reason Japan is doing so well is that they acknolwedged Covid was airborne early and have taken that into account in their response.) US schools keeping doors and windows locked out of fear of shooters is an amazing case of statistical innumeracy, and every country which hasn’t been changing ventilation systems to deal with Covid is a country which is not serious about saving lives and avoiding a mass crippling of their population.

Covid has been a mass-crippling event. Millions of people will be disabled, for who knows who long, with affects on our societies and our sacred economies which will, themselves, be disabled.

Nor is there any particular reason to think that “herd immunity” from natural immunity will work, as Covid is good at re-infecting and immunity drops fast.

This is a brilliant and wonderful scenario for anyone who owns shares in vaccine manufacturers, with their boosters every few months (more often than every six, as we are seeing it), but bad for everyone else.

Covid is and always was a worldwide phenomena, which required a worldwide response. That could have happened if the major powers had agreed and done not only the right things themselves, but also assisted everyone else in doing the right thing. Instead, vaccine chauvinism, profit opportunities, and so on took precedence.

China’s leaders, totalitarian tyrants, apparently cared enough about their population to stop Covid, even at economic cost. Our leaders, seeing that Covid was a huge profit opportunity (billionaire wealth has about doubled), decided that mass death and disabling was a cost they were happy for their “free” subjects to pay.

Who are the barbarians?

And now it’s killing and crippling our children.

Your leaders kill and hurt you for money and power. That is how they have acted since Reagan and Thatcher took power.

They’re killing you. They’re killing your children. They’re crippling you. They’re crippling your children.

You make excuses for them, but the Chinese and Japanese leaders made other choices and so far, at least, they have avoided mass death among adults, elders, and children. Perhaps they’ll be overwhelmed eventually, I don’t know, but so far they’ve held the line.

Your leaders kill, cripple, hurt, and impoverish you for money. They’re doing it to your children now.

Is there anything they can and will do that will cause revolution?

Because removing them, en-masse, and trying them for their crimes is the only thing that will ever make the world better, or give  you even the faintest chance of dealing with climate change and environmental collapse in a humane manner.

Covid has been a practice run for when climate change starts really hitting. It shows which societies are able to respond to a collective challenge.

Most of our societies have failed and because climate change, like Covid, is a world problem, that a few societies haven’t failed is unlikely to matter much, even to them. They’ll just stay together under pressure longer than we will.

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Meat Packer Profits Up 300%

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On December 16, 2021

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Reuters:

This isn’t caused by supply chain shortages, it’s caused by pure greed operating through an oligopoly which is sure that governments won’t stop them.

When we let insulin prices go up to hundreds of dollars for a vial that costs under $4 to produce, something we knew would kill a ton of people, when we let them raise prices on a bevy of drugs which cost almost nothing to produce, we let every businessman know that, no matter what the consequences, price-gouging was A-OK. If it’s okay to kill sick people with price gouging, what’s off the table?

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The solution to this is to break up the oligopolies and to charge executives with conspiracies under RICO, which allows all their money to be removed as the product of a crime and forces them to use public defenders. (If it’s okay to do this to serial killers, who kill a lot less people than most oligopolists, then I don’t see why the real criminals should be spared).

As I’ve written in the past, modern capitalism is simply predators feasting on herd animals.

Our era is built on three ideological assertions:

  1. There is no such thing as society.
  2. Greed is good.
  3. There is no alternative (TINA).

Whatever makes a profit, according to this assertion, is good. There is no society, and, therefore, no social goals. There are only competing people and whatever they get is fair. And this is the only way to run society; there is no alternative.

Your lords and masters, for that is how they see themselves, hurt, impoverish, and kill you for money they don’t even need. You are the sheep, and they are the herders, and the cops are the sheepdogs, just like the cops say.

They have even less regard for you than most farmers, though, since they figure there are more of you than they need, and thus, they see no need to care for you the way a good farmer cares for his animals until he kills them for food.

Remember, everything evil they do and are rewarded for simply leads to the question, “What else can we do to make even more money?”

Until the consequence of them hurting and killing “sheep” is that they start dying, or have something worse than dying happen to them (time in ultra-max’s counts), they’re going to kill and hurt more and more, because they are rewarded for it, and most of them get off on it.

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Privatization Is Always A Ripoff

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On November 11, 2021

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Water edition, from the UK

Analysis in 2020 found that privatised (sic) water companies paid £57bn in dividends to shareholders since their foundation in 1991 to 2019. Now they say they need better infrastructure to stop piping sewage into rivers, lakes, and sea.

Up here in Toronto, Canada, we privatized half our trash collection, dividing the city in half. The West has private collection, the East has public. When it went into force, the arguments were strong: private was cheaper. Now, a few years later:

Oh, hey, what a surprise. It costs more and they pay workers less than the City does.

Let’s keep this simple, as free market fundamentalists who usually understand nothing about markets often say, “There is no such thing as a free lunch.” TANSTAAFL.

Private companies have to make a profit. Public companies do not. Private companies are not miraculously more efficient, to be cheaper than public companies, they have cut costs. Often that is wages, other times it is not paying to maintain or upgrade infrastructure required to keep sewage out of the water.

For anything where we know how to do it; where there is actually little room for innovation, and where the service provided is about the same for everyone (this includes almost all universal or near universal insurance, all utilities including water and power and internet) public provision is more efficient and private provision can only be cheaper by cutting costs you don’t want cut. That includes, of course, pushing costs into the future: the trash company in Toronto knew it’d raise prices in the future, it undercut for a few years to get its foot in the door.

Once you do privatize it can be difficult to take something back public. You’ve sold the assets, and the people you sold them to are making money and don’t want to sell back. Especially at lower levels of government you may not be able to force them to, or force them to at a reasonable price. In addition, they now have a constituency of rich people who need them to continue (investors, executives) and who can use their money to lobby and bribe officials.

As a rule, most privatizations are fraud, and the politicians who do them are corrupt, helping out friends and donors and doing well out of the process. Most politicians who do this should be treated as criminals and thrown in prison for defrauding the public, corruption and fraud.

(About half of the neoliberal agenda initiated by Thatcher and Reagan was and is just “privatize everything you can so the rich can get richer.” It’s not capitalism, it’s rentierism and corruption and makes economies weaker, not stronger.)

TANSTAAFL. There is no free lunch, if a private company can make money off a public asset, it’s been sold to them for less than its worth, and the people who will pay in the end are taxpayers.

If it is a public good, it should be provided publicly.

(My writing helps pay my rent and buys me food. So please consider subscribing or donating if you like my writing.)

 

 

India Is Not The Next China

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On November 2, 2021

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One of the main reasons I took some time to read the smarter members of our international elite was to learn what their assumptions are. The smart ones disagree on the consensus in some places, but what is most interesting to me is where they don’t.

India is one of those places: almost all assume that since China modernized, India’s modernization is inevitable and it will be the next great power.

I don’t see it. India still doesn’t have the necessary government capacity to run the country. Despite the attempt to clean up corruption with demonitization, the civil service is still immensely corrupt, but it is also incompetent. Whatever one thinks of the CCP, they had state capacity; they could make things happen and discipline local elites. The central government in Delhi still mostly lacks the ability to carry out complicated actions in the regions; heck, often enough they can’t even manage the capital region well.

Next, the Indians haven’t taken the right lessons from China. They see that China was involved in global value chains, but they haven’t understood how China used dual currencies and currency restrictions, along with currency purchases to control subsidize exports. They don’t understand, that is, that China’s rise was Mercantalist and not Neo-liberal. Certainly China liberalized certain sectors, but they didn’t neo-liberalize monetary policy and they kept government firms in charge of large amounts of the economy, including much of the banking sector, which they used to direct loans where they wanted. Despite criticisms and problems, this worked.

Chinese liberalization was always within the context of a centrally controlled monetary and fiscal policy, ntended to create the necessary conditions for international competitiveness and to direct capital towards sector the government prioritized. Regional governments were allowed vast latitude to purse centrally chosen goals, but the center did determine the goals and keep an eye on what regional officials were doing.

Third, even if India modernizes faster than I expect, they aren’t beating climate change. India is one of the major countries which will be hit hardest. Crude effects like pure heat increases, potential problems with rainfall, increased extreme weather events, and loss of water from the Himalayas can all be expected to harm India. Since the Indians have also vastly overused their groundwater, they will be hit by serious water issues very early compared to much of the rest of the world.

Then there is Bangladesh, one of the lowest lying countries in the world: it will be one of the first nations to collapse under climate change, and it will send literally tens of millions of mostly Muslim refugees into India.

India isn’t making it. They still only have a small middle class, they regularly have food problems, their government is corrupt and incompetent and they don’t understand how modernization actually happens so they aren’t pursuing the right policies. Ironically they really should sit down with the Chinese and cut a deal through the Belt and Road initiative to be the nation which primarily receives industry China is offshoring but is suitable for India’s stage of development, but tense Chinese/Indian relationships are preventing making an arrangement which would benefit them.

(The Chinese cut deals with America, who they have many historical grievances with, and overlooked America’s primary support for Taiwan, when they needed what America offered. They weren’t over-proud, they did what they had to to get strong first.)

Unless climate change effects happen far slower than I expect (and so far my predictions have been far closer to what’s happening than consensus forecasts, but still slightly optimistic) and the Indian government gets a clue about how the world actually works and manages to actually fix their civil service, there’s no way India makes it before global value chains start collapsing under climate change and having to be re-engineered. At that point India will have so many problems that industrialization will be off the board, and only an extraordinary government and leadership would be able to take advantage of changed circumstances to build up India. Much more likely is government collapse and loss of effective control of huge swathes of the subcontinent as mass famines killing at least 10s of millions of people (and quite possible hundreds of millions) and mass migrations occur.

I wish my analysis indicated otherwise. I’ve spent time in India, I have family who stayed after independence, and I like the Indian people.

But I’m just not seeing it.

 

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China’s Economic “Miracle” Was Normal

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On November 1, 2021

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Over the last few weeks I’ve been reading books by some of the smarter members of the international elite. One thing they all seem to agree on is how amazing and unprecedented China’s economic rise was.

It wasn’t.

China industrialized and modernized the way almost all nations have:

  1. Through mercantalist policies. In China’s case, keeping the value of the currency low, taking advantage of low wages, and starting with the oldest parts of industrial value chains.
  2. By exporting to large external economies which let them: the US and Europe.
  3. By grabbing as much intellectual property as possible.

This is how America did it in the 19th century. This is how Japan did it twice (Meiji, post WWII, Taiwan and South Korea did it. This is how virtually everyone did it.

Americans got greedy and stupid, from a geopolitical point of view. They believed the nonsense “End of History” bullshit about how capitalism and democracy are intertwined and capitalism inevitably leads to democracy and they were salivating over the profits they could make in China. So they traded and they let China into the WTO.

Contrary to the idea that democracy and industrialization/modernization are intertwined; Japan and Germany did most of it under authoritarian governments and with massive government direction. Even post-WWII, Japan was a one-party state, not a real democracy. Germany’s industrialization was based on Prussia’s command economy, and the great companies were practically state organs even if they were nominally civilian.

Japan didn’t become a nominal democracy because “capitalism” it became one because it lost WWII. The Kaiser had a parliament, but still a great deal of power and he didn’t step down voluntarily, he lost power because the Germans lost WWI.

But the emphasis on authoritarianism misses what is actually interesting and almost unique about China: it has the most decentralized government spending of any major country, with over 70% of spending decisions made below the Federal government. As a rule, the center made and makes goals and guidelines, but leaves it up to regional and municipal governments to figure out how to achieve them. China has a dynamic government, and there is a lot of competition between governments, as much as between firms.

It is also easier and cheaper to start a new business in most of China (free in Beijing to incorporate) than it is in most of America or Europe.

Meanwhile, the great danger to capitalism is capitalists being too successful, and buying the system, and then getting rid of necessary oversight and regulation. China has largely avoided that (though real-estate wealth is still a problem) and Xi Jingping has cracked down repeatedly those he considers bad actors. In one recent example he forced delivery app companies to treat their employees much better (better than in America). In another he got rid of the College prep industry almost entirely, which a lot of western observers thought was bad, but the industry was a pure “Red Queen’s Race” situation, because it existed everyone had to do it, and as with all such college prep industries it favored those with money over those without. Xi was entirely right to end it.

Democracy used to serve this purpose in the West. Almost everything FDR did, economically, was to stop capitalism from destroying itself.

Further, all evidence I have seen indicates that contrary to what I thought in the past, the Chinese Communist Party (CCP) goes out of its way to recruit smart, competent people and has thus, so far, been able to avoid the generational nepotism and degradation cycle.

To bring this back to Western elites, a lot of the mistakes come from drinking their own Kool-aid. While virtually no country larger than a city state has ever modernized without mercantalist policies, the orthodox economic position of the West for decades was laissez-faire, and that’s what the World Bank and IMF made most countries do. Those policies are vastly destructive and don’t work IF you want a country to modernize, but if you really want it to become a helpless satellite state they work well. (Bad Samaritans, by Ha-Joon Chang covers this well.)

“Free” trade is not what America did, Germany did, France did, Japan did or even England did to industrialize, and it’s not what China did.

What it is truly unique about China’s industrialization is its size: it’s a subcontinental power with a huge population. Japan was never really a threat to the US, for all the screaming in the 80s, because of its population size and limited geographic extent. China is by some measures already a larger economy, and the only thing might stop it from becoming the world’s greatest power and eclipsing the United States is that climate change will  hit it hard somewhat earlier than it will hit the US, as best I can tell.

So, what matters about China is just that it’s not Western, and poised to become the first Eastern hegemonic power in about 200 years. Of course the US doesn’t like that, and of course Europe (still an American satrapy) is uneasy.

This could have been avoided easily enough, though it probably shouldn’t have been, simply by refusing to cooperate with Chinese mercantalist policies and certainly, if the US didn’t want a rival who would probably eclipse it, letting China into the WTO was insanity. (This was clear at the time, and many people objected.)

The other issue is that the West no longer has a veto on who gets to industrialize. For various reasons Japan, South Korea and Taiwan couldn’t serve as the necessary markets for mercantalist expansion, but China can and that’s what they’re offering many other nations the West never let develop. The European/US monopoly is broken.

The lesson is not to believe your own lies and bullshit. Fukuyama was obviously full of shit about “The End of History” and developed world suggested “development” policies in the last half of the 20th century were meant to stop nations from developing, which was their record, and anyone with  sense who spent a few hours examining the policies of countries which actually industrialized, could know it.

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I Was Shocked To Find Out How Many People The Terror Killed

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On October 29, 2021

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Twenty-seven thousand. Seventeen thousand executed, ten thousand died in prison.

This is slightly less than 1/1000th of the French population.

This was the Terror? A higher percentage of Americans died in WWII, the Civil War, this pandemic (1 in 500) and nothing compared to, say, the Great Irish famine or hell, tons of other geopolitical events.

Now I’m not saying it was good, but the shadow it throws over our imagination is HUGE and I genuinely thought far more people had died because of it.

Perhaps it’s who mostly died: first aristocrats then various radicals (largely bourgeois) as they fought among themselves. Mostly somewhat important people. That must have terrified everyone of importance in every other European country: if it spread, they were for the chop. They wrote the first edition of history, and their personal terror has come down to us.

Napoleon, now his wars killed a vast number of people, somewhere between 3,250,000 to 6,500,000, but the Terror itself? No.

Mark Twain probably said it best in his “The Other Terror”, which I’ve quoted before and will quote again today.

THERE were two “Reigns of Terror,” if we would but remember it and consider it; the one wrought murder in hot passion, the other in heartless cold blood; the one lasted mere months, the other had lasted a thousand years; the one inflicted death upon ten thousand persons, the other upon a hundred millions; but our shudders are all for the “horrors” of the minor Terror, the momentary Terror, so to speak; whereas, what is the horror of swift death by the axe, compared with lifelong death from hunger, cold, insult, cruelty, and heart-break? What is swift death by lightning compared with death by slow fire at the stake? A city cemetery could contain the coffins filled by that brief Terror which we have all been so diligently taught to shiver at and mourn over; but all France could hardly contain the coffins filled by that older and real Terror—that unspeakably bitter and awful Terror which none of us has been taught to see in its vastness or pity as it deserves.

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The Perceived Self-Interest Of The Rich And Powerful

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On October 28, 2021

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Yesterday I had a brief article, which noted a general rule, “only things the rich and powerful believe will benefit them will be done” and applied it to shortages, suggesting that if the rich and powerful are benefiting from them, no serious action will be taken to end the crisis in countries where that is true.

I wanted to note that this is a general rule. It applied to Covid (70% increase in the wealth of billionaires) and it applies to climate change: most powerful people are old, they’re going to die before climate change gets bad, or that’s their bet, and for those who aren’t, they seem to assume their money will protect them. In Britain there’s a debate over forcing private water companies to stop spewing sewage, but so far, the government is resisting making them do so: after all, because dividends and stock option are more important.

Without a change in who runs government, who’s rich, and who runs the big firms, this sort of calculus, “does it affect we few powerful and rich?” will continue and I’d suggest using it as a heuristic for if something will be done. Sometimes it’ll be wrong, but the vast majority of the time it will work out.

It’s not impossible for this rule to get you something you might like. For example, there’s a push in some corporate circles towards a guaranteed income, simply because they need customers and are aware that too many people are becoming poor. Those businesses which want to sell mass quantities of goods without extreme markups thus need the working and middle class not to be completely impoverished.

But, overall, the rich and powerful are different, in the sense that they don’t see their interests as the same as those of ordinary people, and they have the ability to act on those perceived interests.

Take it into account. Build it into your worldview.

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