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Tim Worstall

Tim Worstall

Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

Articles by Tim Worstall

The very point of carbon permits is that you don’t control the price

3 days ago

There are two basic market methods of controlling carbon emissions – carbon permits and carbon taxes. That second allows you to control the price of dealing with emissions but the quantity thereby changed is unknown. The aim of carbon permits – along with market trading of them and so on – is that the quantity allowably emitted is known but the price of the action is both unknown and uncontrolled:Ministers are considering a dramatic intervention in the carbon market to cut the amount big polluters have to pay for emissions permits.Prices have soared in the past month, from about £50 per tonne of carbon dioxide to £74. The Department for Business, Energy and Industrial Strategy said in a stock exchange announcement that prices had breached the threshold for the government to step in.No,

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Apparently spending money isn’t a good way to do stimulus

4 days ago

This is a good lesson for us all to learn in two different ways:Dame Meg Hillier, Labour MP and chair of the Public Accounts Committee, said: "It cost the taxpayer £50 million just to administer the pointlessly rushed-through Green Homes Grant scheme, which delivered a small fraction of its objectives, either in environmental benefits or the promised new jobs."We heard it can take 48 months – four years – to train the specialists required to implement key parts of a scheme that was dreamed up to be rolled out in 12 weeks."It was never going to work at this time, in this way, and that should have been blindingly obvious to the department. That it was not is a serious worry. I am afraid there is no escaping the conclusion that this scheme was a slam-dunk fail."Well, yes, and let that be a

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If you’re calorie counting lettuce then you’ve a severe problem there

5 days ago

We’ve muttered the odd bit and piece about how we tend not to trust many new measurements. Not just £ s d or the way in which a silver dollar actually had some value, nor this newfound again freedom to use lbs as the French continued to use livres. Those old ways were probably just more culturally comforting than anything else. We take issue rather more with some of the newly constructed measures of things. For example, once it became obvious that actual poverty was conquered in Britain the concept of relative poverty was brought to the fore. We’ve whine about how people adamantly refuse to note that the age profiles of the varied ethnicities are different – it’s therefore no surprise at all that ethnic representations in populations where age is a factor differ from the portions in the

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As ever, it’s the customer who really benefits from a transaction

6 days ago

We don’t have to go far to find folks who insist that every transaction means the customer is being ripped off – look the supplier is making a profit, that must be evil! These people rather missing the point, in a voluntary transaction that consumer must also be gaining something they value.As it happens we can even assign rough values to who gets the most out of this. Profits are, at most, some 10% of GDP (after we subtract depreciation etc). The usual calculation of the consumer surplus – the amount of value that consumers get that they don’t have to pay for – is some 100% of GDP. A very crude comparison indeed but the weighting seems to be 10:1 in favour of those consumers.We also find ourselves with an example out in the wild:The eurozone’s most powerful banking groups have demanded

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So, governments are good at that long term planning thing, are they?

7 days ago

Governments, in the sense of a something that rules over a territory, are not immortal – radical changes have regularly happened over history. But they’re as close to being so as anything we have in a human society. This leads some to conclude that government should be planning the long term things because that institution is the only one that faces the correct long term incentives.The more rational among us note that while this could be conceptually true that might not be quite the way it works out:Andy Cowper of Health Policy Insight points to the decision in 2006 to fix a short-term funding crisis by slashing training budgets, which contributed to staff shortages that still plague the NHS.Government is run by politics, which means politicians. Whose time horizons never do extend to

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Possibly trivial but also rather the point

8 days ago

Given that we English have been consuming mince pies since the return of the first Crusaders you’d think we might have got them right by now. But no:Britons are starting Christmas early, with sales of mince pies on track to top £100m amid a fierce supermarket bake-off.The popularity of the mince pie is rivalled only by pigs in blankets at Christmas and this year a welter of new flavours, including cookie-style and plant-based pastries, are on the menu as stores seek to appeal to younger taste buds.Even with the thick end of a millennium of experience the experimentation continues.This of course being entirely trivial, there’s no need to keep playing with such a minor issue.Except, equally of course, that this is the entire point of our basic socioeconomic system. What we can do changes

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So, why are they changing the measurement system?

9 days ago

We have a little foible, which is that we think measurement is important. This has a corollary, which is that we always wonder what people are trying to do when they change the measurement system. It’s even possible that they’re making the measurement better although that’s not always so.Consider that move from measuring poverty, actual deprivation, to worrying about relative poverty, or inequality. Clearly this was simply because actual deprivation had been beaten – as Barbara Castle pointed out in 1959 – and what’s a redistributive leftism if the moral imperative of the actually poor has already been dealt with? Invent some other reason for that same old policy of taking everything off those who have more.At which point:The term “BAME” should be scrapped as it “erases identities”,

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Indeed so, whither society?

10 days ago

The Guardian asks us to ponder the nature of society:According to the Reagan-Thatcher worldview, there is no such thing as society. There are only families, who look after one another, and individuals, who participate in markets. The idea that government is the solution to people’s problems rests on a mistaken belief in the existence of society. This mistaken belief….On the same day The Guardian praises a certain part of society:The group was originally focused on providing necessities during the early months of the pandemic, such as help with shopping, collecting prescriptions or providing reliable Covid information. Its remit has since expanded – members now share food and festivals, pool DIY tools, brainstorm measures to tackle unscrupulous landlords and speeding cars, and tend to a

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Exploiting a tragedy is not on and yet…

11 days ago

Even without exploitation it’s still possible to draw lessons:Married couple Stephen Chapple, 34, and wife Jennifer, 33, were found dead at their home in Dragon Rise, Norton Fitzwarren, Somerset, on Sunday night while their two sons, aged five and six, slept upstairs.Mrs Chapple was stabbed to death, police confirmed on Tuesday. Post mortem examinations are still being carried out on her husband.Mr Chapple taught computing at West Somerset College and his wife worked at Otter Garden Centre at Pen Elm, near Taunton. The couple’s youngest son had just started primary school.The killings are rumoured to be linked to a parking dispute between neighbours in the Taylor Wimpey development, where it is believed that residents are allocated at least one parking space each.Sharon Sedgbeer, 50, a

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We agree with The Guardian entirely here

12 days ago

It is true that folks, we humans, value agency. We prefer to have what we decide we’d like to have rather than what some other person thinks we should have that is:Giving people cash rather than food parcels would empower themWell, yes:Which would you prefer: a shopping bag of items you didn’t choose, or the money to buy what you need?Quite so.We do praise food banks often enough but that’s not because they are a perfect solution. Rather, the British government is so staffed with those Rolls Royce minds that it is incapable of handing out free money in a timely and useful manner. The major reason for the use of food banks is, after all, that the benefits haven’t turned up.This proof that we live in a second best world doesn’t change that value of agency though. As the Census Bureau over in

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We’ve said before that planning doesn’t really work

13 days ago

In fact we’ve said twice, just recently, that detailed planning of a society doesn’t work. Now we’ve that thrice:The energy sector has derided the EPC system – which rates homes from A to G – as “not fit for purpose”. The grading is based on bills, not on carbon output, meaning it can punish people for installing heat pumps and incentivises the use of gas over electricity. Inconsistencies in the system mean that homeowners can pay thousands of pounds for work that they later find actually lowered their EPC rating.Tom Spurrier, of the UK Green Building Council, an industry body, said: “We have currently got a metric that incentivises gas because it is cheaper.” If you install a heat pump, which is powered by electricity, your EPC rating may fall.If you spend – substantial amounts – of money

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Detailed planning leads to a certain amount of cross purposeness

14 days ago

We’ve mentioned before that detailed planning leads to certain problems. Another little example here.Wet wipes and ketchup sachets could be banned in England under plans to tackle plastic pollution, the Government will announce today.Well, yes, sachets for sauces, vile things. Stick a multiuse bottle of something on the table, a far better idea. Except:The European Commission is to ban the use of refillable bottles and dipping bowls of olive oil at restaurant tables from next year.From 1 January 2014, restaurants may only serve olive oil in tamper-proof packaging, labelled to EU standards.Tamper proof is a synonym, of course it is, for single use and single portion servings.We could mutter something about it only being olive oil that the EU is talking about but no, that’s not in fact true.

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Stasis isn’t a good look for an economy – nor a civilisation

15 days ago

The Public Accounts Committee tells us that losses on lending to Greensill could have been avoided: Taxpayer losses linked to the collapse of Greensill Capital could have been avoided if the state-owned British Business Bank had not conducted "woefully inadequate" due diligence and the Treasury had shared more information, a damning report has found.The Public Accounts Committee, which scrutinises public sector spending, has said the bank was "insufficiently curious" about where the money it lent was going and accepted too much information provided by Greensill in its application for Covid support scheme cash at face value.It’s entirely possible to avoid direct losses by the simple expedient of never doing anything. That does then raise the risk of suffering significant losses from not

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Unkind, perhaps, but drivel’s not a good starting point for a policy decision

16 days ago

We must, apparently, do much more recycling:The UK must scale up recycling of materials for low carbon industries or risk facing a critical shortage of key metals, a new report warns.The projected use of lithium, cobalt, silver and rare earth elements by the UK’s low carbon industries over the coming decades is set to soar. China controls 60% of global mine production and 40% of rare earth metal reserves, raising fears of a significant threat to the supply chain for businesses.But the thinktank Green Alliance said the UK could limit the threat by building up domestic recycling of valuable materials and reducing energy use.Why, yes, by “reducing energy use” they do mean that you’ll have to walk and if you can’t get there by walking then you’ll not get there. Why do you ask if they do?The

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Never, ever, forget the tax wedge

17 days ago

The famed Laffer Curve is an observation about reactions to changes in the income that can be acquired through offering labour out into the market. It’s only a subsidiary use of that observation that some strive toward a target income, others more affected by marginal gains, which concerns taxation rates. The tax is a trigger for those income changes, but the observations would be true if there were some other factor changing income due from that labour.That we use it to talk about the tax wedge – the difference between pre-tax and post-tax prices and reactions to them – just shows how important the tax wedge is when considering reactions to prices.At which point something which we don’t think is true: Currently at $150 per kilowatt hour, once battery storage falls to $100 per kilowatt

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The difficulty of governing a society in any detail

18 days ago

Three little stories from just one issue of one newspaper: Shell is planning to finally scrap the complicated Anglo-Dutch structure that critics say has been a drag anchor for years.It would shift the firm’s centre of gravity decisively from The Hague to London, completing a process started in 2005.The second:The Church of England is facing questions over its role in converting hundreds of asylum seekers, including the Liverpool suicide bomber, to Christianity in an attempt to help them avoid deportation.The third:Female prisoners should not be forced to live with “big, brute rapists who have decided to identify as women”, a former minister has said.Dutch law places significant barriers to stock repurchases through the dividend tax imposed in that country. Folks can – and do, obviously –

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Once more into the breach dear friends – time to sort out low pay again

19 days ago

Polly Toynbee alerts us to one of the unfairnesses in modern life. For once we actually agree with her as well:On Monday, the “real living wage” – a voluntary scheme – is rose to £9.90 an hour outside London, which equates to £1,930 more a year than the government’s so-called national living wage (NLW).As we’ve pointed out before there’s nothing wrong with that real living wage calculation, it uses the same underlying logic as Adam Smith and the linen shirt. If the people in a society think that not being able to do – or own – these things makes you poor then in that society, if you can’t, then you’re regarded as being poor.As we’ve also pointed out, in common with the New York Times back when it knew things, the actual minimum wage is £0. We’re thus not in favour of the idea of a

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Conglomerates and the financialisation of everything

20 days ago

General Electric is to split itself up into three companies in a continuation of a process that has been going on for decades more generally – that death of the conglomerate. In a description of why they used to exist we have this:What’s more, the cash generated by one division could be used to fund research and development in another.We would not say that what is about to follow is the entire explanation but we would insist that it’s part of it. Raising money used to be an expensive operation. Stock and other capital markets were not that liquid. Spreads were wide. The pool of capital was not that deep. As those people complaining about the financialisation of everything have been saying, the financial markets are much larger now. They’re distinctly more efficient. Spreads are vastly

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Decision making on steel – kick that can

21 days ago

Much muttering is going on over what should be done about steel in the UK. The correct answer being nothing. At least, nothing yet.The tasks of decarbonising the economy and securing supply chains do not come bigger than for the sprawling steel plant in Port Talbot in Wales.For more than a century it has dominated the town as one of its largest and best-paying employers.But the plant, one of the UK’s top carbon polluters, will need to find ways to make steel with less carbon dioxide output – eventually cutting it entirely in the race for net zero.The challenge for loss-making parent Tata Steel UK is who will pay for improvements to achieve this. An inability to find the funds could put local jobs at risk.It is possible that the UK really does need to be able to make its own virgin steel.

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Some assertions end up being ludicrous

22 days ago

It’s a standard claim from the intellectually fashionable these days that “excessive wealth” is the major problem our society, our world, faces. Which leads to statements like this: We need to redefine what the good life is, instead of never-ending expansion, the latest iPhone, jetsetting. The planet can’t take another Jeff Bezos.Mr. Bezos has that $190 billion or whatever it is this morning as the stock markets gyrate. But that he has that much is the least important part of the story. How did he get it? According to the bank, Amazon and its peers have pushed down inflation by about 0.1 to 0.2 percent.That’s per year for a couple of decades. Certainly, we shouldn’t apply all of that to Amazon, or Bezos, but just for kicks let’s try it. That’s a 4% (without compounding) reduction in the

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The capitalist and free market gloriousness of Johnson Matthey’s failure

23 days ago

Johnson Matthey has decided to pull out of that so very important battery design business:Johnson Matthey is to abandon years of research and development and hundreds of millions of pounds spent trying to find the key that will unlock the full potential of electric cars: being able to travel hundreds of miles on a single battery charge, without the weight and cost of batteries that make the vehicle undriveable or commercially unviable.What joy. For our task is to have a system which explores the technologically available space for manners of sating consumer demands. To sort through what can be done and match that up with what people want to be done. That being what capitalist free marketry does better than any other system we’ve tried as yet.That this isn’t working out in this instance is

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We can also add that the Green New Deal won’t actually work

24 days ago

Aditya Chakrabortty rather shocks contemporary opinion by stating that the Green New Deal probably isn’t quite the way to do it:At some point, the post-2016 left, radicalised by Trump and Brexit, will have to surrender its notions of a radical programme executed through a vast state machinery. …(…)… I hope what comes next is a more focused, locally rooted and inclusive politics based around asking people what they actually need in their lives, and working out how to fit those things within an environmental framework. That can be done with universal desires such as housing and food, healthcare and education.Indeed so, the task is how do we gain the highest possible standard of living for the most people within whatever constraints the universe throws at us? Highest here being measured by

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Good enough is, actually, good enough

25 days ago

We do, entirely, grasp the point being made about carbon border adjustments:A powerful incentive for the developing world to get serious about climate change, or just protectionism dressed up in green clothing? Whatever it is, the concept of carbon border taxes, once a faintly whacky fringe idea, is fast going mainstream, threatening to rewrite the rules of global trade.The UK Government seems determined to tax just about everything else, but you may be relieved to know it has no plans to tax meat. So said George Eustice, Secretary of State for Environment, Food and Rural Affairs, at the weekend, even though livestock farming is a big emitter of greenhouse gases and environmentalists would much rather we didn’t practice it at all. Yet the Government very much does have plans for a "carbon

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Not that we think there’s a coordinated plot here….

26 days ago

….but we’re entirely sure that at least some will have noted the implication, effect even, of such a ban:If we ban second jobs for MPs now, we’ll soon wonder how they were ever allowedJust for the avoidance of doubt, no, we’re not stupid enough to think that morals in Parliament – even if we just restrict ourselves to fiscal ones – are quite and wholly everything we should collectively be desiring. Switch, for a moment, to the demand common enough in America these days. That no serving politician should retain control of their own money while in office – blind trusts all the way. Even, that Donald Trump should have entirely sold out of the family business. The effect of this is that anyone who has either the drive or fiscal acuity to build a business is barred from office. Anyone who has

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The rot of their dead body politic fills the nostrils of the earth with a glorious stink

27 days ago

32nd anniversaries are not normally chosen for particular remembrance but what the heck, this is the grand moment of the past half-century.From Conrad Schumann’s jump through to the Pan-European picnic there was a vileness that cut across Europe. And then on the 9th of November 1989 there wasn’t. Yes, the system, the entire countries condemned to oppression, more can be said about all of them but this specific and particular symbol finally fell.Mr. O’Rourke:The East German border guards didn’t interfere. Instead they came up to openings in the Wall and made V-signs and posed for photographs. One of them even stuck his hand through and asked would somebody please give him a piece of concrete to keep as a souvenir.The hand of that border guard – that disembodied, palm-up, begging hand…..I

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Fortunately it’s only £9,000

28 days ago

We think this might be overpaying a little even at this low sum:The National Railway Museum will investigate steam trains for links to slavery as forces behind the expansion of colonial power are readdressed.The museum, in York, is one of a group of organisations examining how steam power aided imperial expansion and drove sugar mills on plantations and cotton gins in industrial cities.Trains will be assessed for their role in facilitating expansion, according to experts involved in the £9,000 research project – entitled "Slavery and Steam: steam power, railways and colonialism" – which is backed by the universities of Leeds, Sheffield and York.Given that Stephenson proved the viability of railways after the abolition of the slave trade and only just before the Empire abolition of slavery

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Apparently skimpflation is the new thing

29 days ago

To be a public commentator it is necessary to continually find some new thing to comment about. It’s the same with “influencers” on TokTok and the like – it must always be next week’s trend to be showcased, no one gets famous by being old fashioned. Which brings us to this new concept of skimpflation:“Nothing prepared us for how much life has gotten worse,” Cole told the Guardian. “Most of these factors haven’t been picked up on by the Bureau of Labor Statistics. We thought these changes to products were going to be temporary, so it was reasonable not to account for the changes. But now everything has got worse all at the same time, so even if you tried to account for them, you probably couldn’t.”Even if skimpflation cannot be measured conveniently, consumers have certainly noticed that

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The incoherence at the heart of the Mazzucato Plan

November 6, 2021

Mariana Mazzucato has a plan for sorting out the world. It suffers fro a number of problems, only one of which is an illusory belief in governmental competence. There’s a logical contradiction in there.If we want to ensure a socially just – and thus effective – transition, green investment banks must be governed democratically, and their financial assets should be shared collectively among workers and citizens. This could take the form of a citizens’ dividend that would provide everyone with a guaranteed minimum income, for example.This is presupposing that the entire plan is profitable. Well, OK. But then if the plan is profitable then the use of green investment banks, governmental insistences, forcings and so on aren’t necessary.Just assume, for a moment, that the initial diagnosis is

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So, what are we all going to do about aviation and climate change?

November 5, 2021

We’ve always struggled with the opprobrium aimed at flying when considering climate change. Currently the sector is some 2% of emissions which makes it an entirely marginal issue. Even when claims about the future are made – that it will be 20% of emissions say – that’s because total emissions will fall, not because aviation ones will rise all that much. Further, whatever limitations there should be, or will be, upon emissions we want those that can happen to be devoted to the highest value use possible. That being the very definition of being richer, that scarce resources are devoted to their highest valued use.Combine this with the cornerstone of any liberal polity, that it is the individual that determines value – not some bansturbator in an office nor even majoritarian imposition –

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Trains aren’t as green as all that you know

November 4, 2021

An interesting number from the trains regulator:Due to the effects of the pandemic, passenger kilometres fell by 81% and trains planned fell by 22% compared with 2019-20. As a result, estimated normalised CO2e emissions increased by 316% from 35.2g to 146.5g CO2e per passenger kilometre.Which we can compare to:The average carbon dioxide (CO2) emissions from new passenger cars registered in the European Union (EU) in 2018 increased for the second consecutive year, reaching 120.4 grams of CO2 per kilometre.Yes, clearly, lockdown was exceptional. The point being – and it’s an obvious one but all too rarely baldly stated to our mind – that emissions from any particular mode of transport depend upon the capacity utilisation of that mode.Empty trains have greater emissions, per passenger km,

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