Economics

Why Uber deserves to lose its London licence

Published by Anonymous (not verified) on Sat, 23/09/2017 - 7:45pm in

Sadiq Khan, who I have known since we were on the same school governing body many years ago, has said he will have Uber’s licence removed in London in three weeks time. This may not happen of course: there is an appeals process. I think it should.

I should say I have never used Uber, on principle. If I need a cab in London there are black ones. Or better still, buses. And trains. But that’s not my point. My objection is to the fact the Uber does not charge VAT by seeking to exploit the gig economy.

I do not believe anyone who uses Uber contracts with their driver. They book and pay through Uber. I think the driver works for Uber. But Uber says they are the agent of the driver who, they claim, contracts with the passenger..

This matter for VAT. I won’t go through all the ramifications. Jolyon Maugham, who has made this an issue, and I discussed it some time ago. He has pursued it, and all credit to him for doing so. The difference between the two contractual positions is that if Uber supplies the service then VAT is charged on the fare. If the driver does, as Uber claims, then the driver charges VAT only if registered. No one can, I suggest, make enough as a Uber driver to require registration. The result is that VAT is almost invariably not paid. And that, in my opinion, is a deliberate market distortions by claiming contracts are not as they appear to the end customer in a way intended to arbitrage the tax system to secure a deliberate competitive advantage the company should not enjoy.

This issue has not been resolved in tax law as yet: it is my suggestion that a wise government would consider legislation on the issue. In the meantime the attitude that it reveals about Uber’s approach to regulation suggests to me that it is not an appropriate organisation to hold a private hire licence in London, not least when, as a matter of fact, it claims it does not provide private hire at all, but its drivers do.

Seven sins of economics

Published by Anonymous (not verified) on Sat, 23/09/2017 - 7:44pm in

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Economics

There has always been some level of scepticism about the ability of economists to offer meaningful predictions and prognosis about economic and social phenomenon. That scepticism has heightened in the wake of the global financial crisis, leading to what is arguably the biggest credibility crisis the discipline has faced in the modern era. Some of […]

Paul Krugman: Cruelty, Incompetence and Lies

Published by Anonymous (not verified) on Sat, 23/09/2017 - 3:03am in

"the evasions and lies we’re seeing on this bill have been standard G.O.P. operating procedure for years":

Cruelty, Incompetence and Lies, by Paul Krugman: Graham-Cassidy, the health bill the Senate may vote on next week, is stunningly cruel. It’s also incompetently drafted: The bill’s sponsors clearly had no idea what they were doing... Furthermore, their efforts to sell the bill involve obvious, blatant lies.

Nonetheless, the bill could pass. And that says a lot about today’s Republican Party, none of it good. ...

Did Graham-Cassidy’s sponsors know what they were doing when putting this bill together? Almost surely not, or they wouldn’t have produced something that everyone, and I mean everyone, who knows anything about health care warns would cause chaos.

It’s not just progressives: The American Medical Association, the insurance industry and Blue Cross/Blue Shield have all warned that markets would be destabilized and millions would lose coverage. ...

Lindsey Graham, Bill Cassidy, and the bill’s other sponsors have responded to these critiques the old-fashioned way — with lies.

Both Cassidy and Graham insist that their bill would continue to protect Americans with pre-existing conditions — a claim that will come as news to the A.M.A., Blue Cross and everyone else who has read the bill...

Cassidy has also circulated a spreadsheet that purports to show most states actually getting increased funding under his bill. ... Independent analyses find that most states would, in fact, experience serious cuts... — and everyone would face huge cuts after 2027.

So we’re looking at an incompetently drafted bill that would hurt millions of people, whose sponsors are trying to sell it with transparently false claims. How is it that this bill might nonetheless pass the Senate?

One answer is that Republicans are desperate to destroy President Barack Obama’s legacy ... no matter how many American lives they ruin...

Another answer is that most Republican legislators neither know nor care about policy substance. ... Vox asked a number of G.O.P. senators to explain what Graham-Cassidy does; the answers ranged from incoherence to belligerence to belligerent incoherence.

I’d add that the evasions and lies we’re seeing on this bill have been standard G.O.P. operating procedure for years. ... Graham-Cassidy isn’t an aberration; it’s more like the distilled essence of everything wrong with modern Republicans.

Will this awful bill become law? I have no idea. But even if the handful of Republican senators who retain some conscience block it — we’re looking at you, John McCain — the underlying sickness of the G.O.P. will remain.

It’s sort of a pre-existing condition, and it’s poisoning America.

Republicans Try to Block RT from Being Shown in US

The Republicans are up to their tricks again, trying to stop American audiences from taking their news from alternative sources and so getting a clearer, different picture from that the corporate media wishes to impose. In this report by Samira Khan from RTUK, Republican Senator John McCaine and one of his colleagues are trying to pass a bill, which would allow American network providers to avoid having to carry RT – Russia Today – in the US. The ostensible reason is that Russia is using the broadcaster, which is owned by the Russian state, to influence American politics. There’s a clip in the programme of various Republicans in Congress debating and complaining that too many Americans are getting their views from RT.

The programme notes that there are three other state-owned foreign broadcasters in the US. These are France 24, Al-Jazeera, which is owned by Qatar, and, of course, the Beeb. None of these will be subject to the McCaine’s and Graham’s bill.

I’m very much aware that RT is owned by Russia, which since the Second World War has been America’s ideological and geopolitical opponent. And, despite the Fall of Communism and the introduction of capitalism, Russia still is in geopolitical opposition to America. But the claims that Russia is interfering in US politics is pure rubbish.

This twaddle ultimately comes from Hillary Clinton and her attempts to blame everyone else for her failure and corruption at the elections. She claimed that the leaked emails from the Democratic National Convention, which showed how corrupt she was in her dealings with corporate backers, and how she and Debbie Wasserman Schultz unfairly manipulated the internal electoral process within the party to stop Bernie Sanders coming to power, came from the Russians. They weren’t. They came from disgruntled members of her own party.

As for the accusation that Russia was influencing US politics, there’s no evidence that they were doing so unduly, or at least, no more than they had been. And as William S. Blum has pointed out on his Anti-Empire Report, that’s a lot less than America has interfered in other countries. He has a whole list of the countries, in which America has interfered in their politics and elections, not counting those, which the US has actively invaded or organized or backed coups to overthrow liberal and left-wing, but not necessarily Marxist or even Socialist governments. And there are pages and pages on this in Blum’s book.

This is just another attempt by the political establishment to try and shut down alternative media, and stop the American people from finding out what their country is really doing. Not just around the world, but also to them. Thanks to both the establishment Democrats and the Republicans’ promotion of corporate interests, as Pat Mills observed in one of his talks on politics and comics, there are pockets of America which are like the Third World. And this is White America, never mind Blacks, who still remain much poorer.

The corporate establishment is panicking, both in America and over here in Blighty, because people are no longer buying the right-wing propaganda churned out by Fox News and MSNBC, or by a supine BBC over here, which has turned its news into a kind of British TASS for Conservatives. (TASS was the Soviet state news agency before the collapse of Communism). They’re taking their news from alternative sources, like the Real News Network, RT, Democracy Now!, The Young Turks, Secular Talk, the David Pakman Show, Sam Seder’s Majority Report in the US, RTUK over here, media commentators like Chunky Mark the Artist Taxi Driver, and a whole plethora of bloggers and vloggers. And they’re getting worried.

It’s why establishment journos in the press and on the Beeb are whining about how the decline of their sector of news gathering and publication means that there will no longer be a consensus view that broadly unites people of all shades of political opinion. What this actually translates into is a panic that they won’t be able to shape public opinion like they could. They argue this means that opinions are becoming increasingly polarized and oppositional. It also means that they’re afraid that they can’t shape public opinion for the benefit of their corporate proprietors like they used to, and without influence and declining sales they could see all that lucrative advertising money that keeps so many of them going, drying up.

And the giants of the internet are also panicking. It’s why Google is so keen to demonetize ‘controversial’ material on YouTube. The excuse is that they’re doing so to stop racist, Alt Right, Nazi and Islamist propaganda appearing on the platform. But as so much of what is demonetized extends to left-wing news outlets, like David Pakman, Sam Seder and Democracy Now!, this excuse is very spurious and flimsy indeed. Google has said it wants to prioritise corporate content. It’s therefore just another big corporation trying to silence the critics of the corporate capitalism that’s destroying the planet and impoverishing everyone in the world except the super-rich 1 per cent.

It’s also why Facebook has also changed its policy, so that bloggers like Mike over at Vox Political also find it hard to reach their audience.

People the world over aren’t buying the corporate, establishment propaganda. They are turning to alternative media, which includes Russia Today, to find out about what’s really going on. And the corporate media is terrified. Hence this wretched bill. And I’ve no doubt that if this gets through Congress, the Tories will try something similar over here. After all, RT is also over here, as is the Iranian state broadcaster, PressTV, and they also tell the British public facts and information that they really don’t want people to see. Like George Galloway talking about the oppression of the Palestinians in Israel, and western militarism and imperialism in eastern Europe and the Middle East.

Progressive taxation is key to tackling inequality

Published by Anonymous (not verified) on Fri, 22/09/2017 - 6:09pm in

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Economics

Charles Adams has offered powerful arguments for progressive taxation as the primary mechanism to tackle inequality in a new blog post for Progressive Pulse.

I’m not going to repeat them: this is a case where going to read the original makes sense. I recommend it.

Deirdre McCloskey explains what makes Australia great

Published by Anonymous (not verified) on Fri, 22/09/2017 - 7:02am in

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Economics

The quaint idea that the intellectual property of Australia was somehow created by Aborigines, Anglos and (mostly) European postwar settlers misrepresents the truth.

Game theory and the shaping of neoliberal capitalism

Published by Anonymous (not verified) on Fri, 22/09/2017 - 1:00am in

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Economics

Neoliberal subjectivity arises from the intricate pedagogy of game theory that comes to the fore in the Prisoner’s Dilemma game and is interchangeable with contemporary paradigmatic instrumental rationality. Rational choice is promoted as an exhaustive science of decision making, but only by smuggling in a characteristic​ confusion​ suggesting​ that everything of value​ to agents can […]

Deliveroos accounts take some beating

Published by Anonymous (not verified) on Thu, 21/09/2017 - 11:19pm in

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Economics

The parent company of Deliveroo is Roofoods Limited. They’ve just published accounts to 31 December 2016. This is some profit and loss account:

I am sure the company will argue that a gross profit margin of 0.845% -or near enough nothing, meaning that in effect they only just cover the cost they pay out to directly deliver food – is just fine at this stage in the company’s development and that investors are more than happy to inject the money required to cover the £142 million of admin expenses that actually exceeded turnover in the year, but that’s still one heck of a profit and loss account, especially when the company admits thats one of its biggest risks is:

I’d put having to actually employ the staff doing the delivery in that category. Right now not one of the company’s staff appears to actually get on a bike to make a living: 80% of them are in sales and marketing. If the employment model changes that tiny gross margin looks like it could become a gross loss.

One to watch, but a sure sign that it’s not just employees at risk in the gig economy.

Book Review: A Little History of Economics by Niall Kishtainy

Published by Anonymous (not verified) on Thu, 21/09/2017 - 8:33pm in

In A Little History of Economics, Niall Kishtainy details the complex trajectory of economics from ancient Greece to the present, drawing on a wealth of historical knowledge, illuminating anecdotes and examples as well as imaginative metaphors to trace the evolution of economic thinking. But, asks Madeline McSherry, where are the women in this history? 

A Little History of Economics. Niall Kishtainy. Yale University Press. 2017.

Find this book: amazon-logo

Over the past two years, the Western world has seen a growing interest in protectionism. Donald Trump rode a wave of anti-trade rhetoric to a presidential victory, while anti-globalisation discourse dominated the lead-up to the French election. Meanwhile, the UK is negotiating the terms of its exit from the European Union.

So it’s hard to believe that almost 200 years ago, labourers across the UK were clamouring for free trade and open borders. In fact, when the British government instated the Corn Laws, which banned cheap foreign grain, people across the country rose up in protest. In Parliament, the protestors had at least one economic thinker on their side: stockbroker-turned-MP David Riccardo, who espoused the somewhat controversial view that ‘it’s better for countries to open their borders to foreign trade than to try to be self-sufficient’ (42).

The evolution of economic thought has never been simple or linear. It has been punctuated by new discoveries, shaped by changing economic landscapes and dependent on leaps forward and lunges backward. This complex trajectory is the subject of Niall Kishtainy’s new work A Little History of Economics.

But Kishtainy does not begin with Riccardo or his more famous contemporary, Adam Smith—‘the father of modern economics’. Instead, he starts much earlier. Taking readers into the heart of ancient Greece, Kishtainy places the origins of economic thought on the shoulders of the ancient Greek philosophers, whom he calls the world’s ‘first economic thinkers’ (7). Plato envisioned a world where no one owned property or pursued wealth. Aristotle argued for the even and honest exchange of goods. Both warned against the love of money.

In their quest to imagine an ideal society, the Greek philosophers were, in fact, tackling some of the most basic questions of economics—especially as Kishtainy defines the term. For him, economics is a study of ‘how people get what they need to live full, happy lives—and why some people don’t’ (2). By defining the social science in this way, Kishtainy aims to expand not only its scope but also its significance. Economics, he argues, touches the lives of each and every individual.

Image Credit: (Ben Sutherland CC BY 2.0)

Former economic policy advisor to the UK and the United Nations Economic Commission for Africa, Kishtainy draws on his breadth of historical and cultural knowledge to make the book’s complex ideas engaging and relatable. Almost every chapter begins with a quirky and illuminating anecdote featuring a diverse cast of characters that includes St Augustine, Abraham Lincoln and Charlie Chaplin. In one instance, Kishtainy uses a reference to Stanley Kubrick’s film Dr. Strangelove to expound the nuances of game theory.

He also employs an array of useful analogies and metaphors to explain various interpretations of the economy. For example, to understand John Maynard Keynes, remember that he rejected the idea that economies are like ‘round-bottomed roly-poly toys’ that, when pushed over, self-correct (108). To describe the limits of Say’s Law of Markets, think of a bathtub: the water level indicates spending, and savings are water leaking down the drain (106).

There is, however, a significant oversight in the book: Kishtainy focuses almost exclusively on the contributions of white, western men. Shouldn’t a history of economics—however ‘little’—include reference to the economic ideas that developed in ancient China and India? The Arthashastra, for instance, was an ancient Indian text that informed economic policy in the empires of South Asia for centuries. Or what about Islamic economics, which flourished as early as the eighth century and still influences much of the banking world today?

But if we are to judge the book only on its attempt to cover Western economic thought, the more pressing question becomes: where are all the women?

It certainly isn’t the case that there aren’t any in the history of economics. For instance, while Kishtainy dedicates part of his work to economist Milton Friedman, he fails to mention the great monetary scholar Anna Schwartz—who’s also the lesser-known co-author of one of Friedman’s most influential works, A Monetary History of the United States, 1867-1960.

The first time Krishtainy mentions a female economist—Joan Robinson—he introduces her as ‘a Cambridge professor’s wife’ (85). Though he aims to convey Robinson’s ‘outsider’ status as a woman in economics in the early twentieth century (85), such language perpetuates this position and undermines her contribution to the canon of economic thought.

In his book, Kishtainy literally relegates women to the margins: he puts most of the female thinkers in a single chapter towards the end. It’s easy for readers to feel like this section was an afterthought or an attempt to appease readers. Moreover, this ‘women’ chapter is all about feminist economics. While this is an interesting and important area of study, it seems to suggest that all female economists pursue feminist economics, which is simply not true.

Granted, it may seem easy to critique a work that aims to be a history of an entire scientific discipline by pointing to what the work leaves out. And in less than 250 pages, Kishtainy has managed to include a vast range of historical examples from the ancient Greek city-states to the 2008 Financial Crisis.

But when we write history books and do not include alternative voices, we perpetuate their exclusion. We may argue such voices are rare or difficult to find, but by failing to include them, we make it even more difficult for the next generation of readers and thinkers to find them. This is a serious concern, especially as men’s voices continue to dominate economics today.

If economics is, as Kishtainy cogently argues, a grappling with ‘life’s most fundamental questions’ (241), then we must make sure we acknowledge and include a more diverse range of lives in all our answers.

Madeline McSherry is a writer and editor with an MSc in International Relations Theory from LSE. Her work focuses on language and representation in international politics. She is also co-founder and editor of Foreign Policy Rising, a platform showcasing women’s voices in international affairs. Find her on twitter at @madmcsherry. Read more by Madeline McSherry.

Note: This review gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics. 


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