In this episode of Understanding Economics, I explain why microeconomics needs to look beyond markets. It should ask how society allocates resources, who has power, who bears the costs, who receives the benefits, and how we can organise the economy so that everyone has the opportunity to live well and thrive.

No one says markets do these things perfectly. All of the discussion is when do they work better than alternatives, when do they not?

The answer being more often than most think.

The post Sigh first appeared on Tim Worstall.

France has opened disciplinary proceedings against its ambassador to Central African Republic over allegations of misconduct, after claims he brought dozens of women into his official residence, raising potential security concerns.

One could – unkindly no doubt – suggest that French meddling in Africa is driven by some French having a delight in dusky maidens. Or not so maiden perhaps.

The French foreign minister, Jean-Noël Barrot, praised the “complete restoration of relations” between France and CAR when he visited Bangui in March.

Oh yes, very restored.

The post How unusual is this then? first appeared on Tim Worstall.

What’s going on? It’s too early to tell. But evidence is mounting that artificial intelligence is playing a role.

New research by economists at Morgan Stanley shows that the rate of unemployment is half a percentage point higher than it would otherwise be in occupations significantly exposed to AI, which they put at about 30% of all employment. The effect is even more dramatic among younger people.

Workers in these exposed occupations are also finding it more difficult to transition from unemployment back into employment than workers in less exposed occupations, leading to longer spells of joblessness.

And according to research by the economists Sania Edlich and Apollo Global Management’s Torsten Slok, wage growth in jobs exposed to AI has contracted by 6.7% since 2023. This slowdown in wage growth has already resulted in at least $28bn in losses for 5.8 million affected workers.
….
Even if AI begins to generate the productivity bonanza its advocates predict – but that it hasn’t yet – there’s no reason to assume US workers will see any of the benefits in their paychecks.

Sigh. That hiring is slowing – that employers can produce while bringing in less labour – is, definitionally, proof that productivity is rising. Further, and again by definition, average wages in an economy are determined by average productivity in that economy.

Sigh.

The post If only Bobby Reich knew some economics first appeared on Tim Worstall.

Yet the response completely misunderstands what diversity and inclusion is about. If it meant lowering standards I’d never waste my time pushing it. Who could possibly believe in making their organisation worse? D&I is not about making a moral point that you believe in equality (though you should); it’s not about performing an act of charity because you feel sorry for poor, excluded minorities (though you might); it’s not even about a business case in the expectation of making more money (though you also might).

The point of D&I is that you bring people into your organisation with different life experiences and perspectives; you value them and listen to them (that’s why it’s called “inclusion”); and the outcome is that you make more informed decisions, so that your organisation better serves its customers. This may or may not translate into profits, but it definitely makes you better, and able to spot changing trends and changing patterns of behaviour more quickly.

Opening up your hiring to more diverse communities leads to more competition and therefore higher standards.

The purpose of a thing is what it does etc. So D&I does not, in fact, work out that way, does it?

The post Smokeblowing here first appeared on Tim Worstall.

The top editor of Forbes left his job last month and was reportedly dismissed for accepting $6m from the founder of a firm that does business with the magazine.

The New York Times reported this week that Randall Lane was paid by RJ Shook, whose company, Shook Research, worked with Forbes since 2016 to publish rankings of wealth advisers. The payment was made after Shook sold a majority stake in the company to a private equity firm a year ago.

A internal email dated 23 July and reviewed by the Associated Press confirmed that Lane, who had been editor and chief content officer, no longer worked for the company. It provided no other details of his departure. Lane had worked for Forbes for nearly 16 years and as its top editor since 2017.

No, nowt to do with me. But you can see what the claim there is. “Partnering” with Forbes to create rankings system could be potentially very profitable. There is, obviously, the ownership of said rankings. But also the interesting things that can be done to create and rank those rankings. Exactly how were those rankings composed etc?

One might, one might assume, find some interesting ways to do that and want to make sure that the gig of association with Forbes remained in place. Until it didn’t matter. Possibly.

They did – regularly and wholly rightly – fire contributors who were accepting outside payments. I’d be very surprised if they weren’t out there touting for contributors they could sting into accepting therefore they could weed out too. But $6 million, eh?

The post How joyously snigger this is first appeared on Tim Worstall.

As predicted, a cohort of conservative critics emerged on social media to bemoan AOC’s personal choice, which challenges their prescriptive vision for American mothers: young, married and uninterested in pursuing a career.

There will deffo be those out there who insist that there’s only the one way to live life, barefoot and pregnant. There are rather more muttering something about, well, 36, not getting any younger, biology does matter, yes, so throw away the condoms and get shagging lassie.

Apparently the boyfriend/fiance has just left which isn’t going to make it easier of course. But prescriptive? Or realist?

This is also glorious word salad:

The decision to go public with her egg-freezing distinguishes Ocasio-Cortez as the rare Democrat willing to articulate an alternative vision of gender politics in an era when the Trump administration and its allies have rapidly eroded women’s civil rights protections, reproductive rights and workforce access, but when many mainstream Democrats have eschewed a robust defense of women’s 20th-century gains in favor of coveting white male votes and making overtures to the manosphere.

The post Prescriptive perhaps first appeared on Tim Worstall.

Beyond his personal enrichment, Trump’s monetizing his office and transactional governing style has proved lucrative to his sons, some top advisers, billionaire buddies, big donors and other allies, say critics.

Of course, everyone before was wholly lilywhite. Like, say, how donations to the Clinton Foundation wholly dried up once Hills hadn’t become president.

Wholly willing to consider that Donnie is more brazen about it all but that he’s sui generis? Hmm…..

The post Could be, could be first appeared on Tim Worstall.

So, let’s be clear: almost everything said about the wealthy and their willingness to flee from tax is total nonsense. Might we, therefore, politely ignore them in the future?

If that’s true then why does absolutely every proposal for a wealth tax come with an inbuilt exit tax?

The post Just so joyous first appeared on Tim Worstall.

The US embassy in London is also offering grants of up to $500,000 for “public education” programmes that foster a “national conversation” about “shared civilizational values” between the UK and US.

Right up my street. Magna Carta, free markets, jury trial, right on stuff.

Sadly, you’ve also got to actually do something. Sigh.

The post How very annoying first appeared on Tim Worstall.

In 2015, a row broke out in which the renowned University of Leeds sociologist Zygmunt Bauman was accused of multiple instances of “self-plagiarism”. Colleagues claimed those allegations were motivated by another scholar’s “personal agenda” and said they were “tantamount to a form of intellectual violence wrapped in objective scholarship that plagues the academy”.

This is even better:

What I do have to say about Jason Arday is really very simple. The overwhelmingly white dons and administrators at Cambridge chose one academic – unrecognised by many of his black peers in the field – and felt his was an appointment with which they could feel comfortable. This resembles a pattern we see elsewhere in public life, where the disproportionately few black people who are selected by white gatekeepers are sometimes chosen for reasons that seem to have little legitimacy among black peers.

Black academics, and black people in general, have never and – it’s my confident prediction – will never demand the right to plagiarise, lie or fabricate our credentials. What we have been demanding is to be treated equally. To be appointed to the levels commensurate with our actual credentials, to have our work taken seriously by intellectual peers, and to be paid fairly and on equal terms for our labour. To not have opportunities taken away because of our race. To have our work, performance and legacy held to the same standards as everyone else’s.

We are very far from anything resembling this.

Whitey’s to blame. As ever.

The post Isn’t that a lovely word salad? first appeared on Tim Worstall.

But interviews with former schoolmates have produced conflicting accounts of his childhood. Two remember him speaking at primary school, describing a chatty child who loved making jokes, while two others say they did not hear him speak until he reached secondary school.

Jonathan Stewart, 40, told the Guardian he remembered Arday from when they were children growing up in south London. He described him as a good mimic who entertained other pupils by putting on accents and singing songs.

Stewart, a YouTuber who says he was in the year below Arday at Heathbrook primary school in Nine Elms, south-west London, said the academic was known as the class clown. “He was always cracking jokes. He was the comedian guy, he would even put on voices,” claimed Stewart, who said he regularly attended church with Arday.

Stewart said that in the Sunday school minibus that would pick them up, Arday would entertain his peers by singing the jingle from the 90s advert for Baby All Gone dolls. He said Arday, a talented goalkeeper, would bring in his own pair of gloves and dive to save shots, even on the school’s concrete playground.

Oh……

The post So, yet more fun first appeared on Tim Worstall.

Dear Customer,
Thank you for sharing your perspective. We understand your point that a change in ownership does not necessarily mean that the airline itself is being “sold by the UK,” and that the distinction between the company and its shareholders is important.
We appreciate your feedback and would be happy to address any specific concerns you have regarding easyJet.
Please provide:
Phone number
Booking reference
Kind regards,
easyJet Customer Service Team

The only place I’ve made that point about “the UK” is on Twitter. And I substantially doubt that Easyjet is monitoring that, connecting it to my email, then writing to me about it.

But then I also substantially doubt that some scamster is going to all that palaver either. So quite what this email is about I’m at a loss to explain…..

The post Weird first appeared on Tim Worstall.

Britain is being told to fear a Russian invasion and spend accordingly. The evidence says otherwise. Russia is losing an estimated 30,000 soldiers a month in Ukraine, according to the Financial Times, with casualties now exceeding 500,000 killed and 1.4 million in total, or roughly one in every hundred Russians. Recruitment is failing even with £40,000 signing bonuses. This is a country that cannot defeat a vulnerable neighbour, let alone mount a conventional invasion of a NATO state.

The real threats are cyber attacks and drone warfare, which is cheap, deniable, and already happening, yet current defence spending is still aimed at ballistic missiles, aircraft carriers and tanks that are increasingly vulnerable to the drones doing the actual damage.

Yes, but Russia has direct, hands on, blood and guts, experience of drones and drone warfare. The sort of experience you only get by actually fighting such a war.

No, this doesn’t mean that Russia could just roll over Europe. Nor that it wants to. But given that they are up to speed – even if not quite No 1 – with this new method of war and we are not then they are a potential danger.

Reading Corrigan again at present and it’s really quite obvious that no one does know how to fight in the new way until they’ve done it for 12 to 18 months. Actually done it, not trained to do it.

The post It’s not just Spud getting this wrong first appeared on Tim Worstall.

There are more votes in tolerance and decency than in toxic division.

This could be true. The general shrieking about capitalists and billionaires makes me think the left itself doesn’t think so. But maybe.

It doesn’t take a great leap of political courage to fight back against Reform

Bit of a non sequiter, no?

The post Maybe first appeared on Tim Worstall.

Reform’s deputy leader Richard Tice has been accused of using “nasty tactics” in an attempt to intimidate journalists and deflect attention from his own financial affairs after issuing a legal threat to the Guardian.
…
“The essence of a free press is that journalists can use verified information from sources without being forced to reveal who they are. This betrays a failure to understand how important that principle is to journalism.”

Margaret Hodge, the peer and former Labour MP and anti-corruption campaigner, said: “It is never acceptable for individuals to seemingly abuse our laws to silence investigative journalism and close down public criticism. That’s why we need to urgently reform our laws to stop rich people using their wealth to close down legitimate scrutiny.”

Jemimah Steinfeld, the chief executive at the Index on Censorship, added: “This has the appearance of an attempt to force a journalist to break the golden rule: that sources must be protected.

“This has been vital public interest reporting by the Guardian. The sources of such journalism are sacred. If the facts are incorrect, then they can be challenged, but the sources should not be chased down.

Note that my comments are nothing to do with who is involved in this.

Over in the US they have shield laws. A journo can report on something even if the info/doc was provided to them illegally. And they cannot be forced to reveal the source. I’m wholly sure that UK journos would like to have the same. But I’m pretty sure that they, in fact, do not. So what we’re getting here is a lot of huffing that it’s very nasty to insist rather than an assertion that you may not.

The post Don’t think the UK has shield laws, does it? first appeared on Tim Worstall.

I thought having a second baby would be easier – but, from food to teeth to poos, I’ve forgotten so much
Bim Adewunmi

As has been pointed out – notably by my own mother, who had four – if mothers remembered exactly how everything was we’d all be only children.

The post Err, yes first appeared on Tim Worstall.

In Tirana, Albania, is a bizarre glass pyramid that the tyrant Enver Hoxha constructed as a museum about his life, and in which he is now buried. In Rome’s EUR, Mussolini and his city planners designed a neighborhood scaled for the race of Fascist giants to which they imagined they belonged.

So it comes as no surprise that Donald Trump has invested so much energy, sacrificed so much popular goodwill, and already spent a fortune on the East Wing ballroom, a project that will occupy an astonishing 90,000 square feet.

Not wholly sure that it’s the same, no. But if it makes you happy to think so then fine.

The post Sorta, maybe, but perhaps no first appeared on Tim Worstall.

Housing

Housing costs are one of the biggest pressures on household budgets.

Questions:

Why are house prices and rents still rising faster than many people’s incomes?

House prices are falling as a multiple of median wages. This is a number ONS publishes, should be possible for even Spud to look this up.

Rents are going up because the insane have been reducing the amount of rental housing available by changing contractual terms for rental housing.

What will your government do to make housing genuinely affordable rather than simply increasing supply?

Like more houses won’t mean lower house prices?

Britain continues to have some of the highest electricity prices in Europe despite generating increasing amounts of renewable energy.

Questions:

Why are British consumers still paying such high electricity prices?

It’s not despite, it’s because.

How will you reform the electricity market so that cheaper renewable power permanently reduces household bills?

It’s not cheaper once you add in the subsidies and the grid costs, that’s why.

What are you going to do to reduce long-term energy costs rather than offering temporary subsidies?

Nuclear maybe?

Childcare

Many parents find childcare costs make working financially difficult.

Questions:

Why has childcare become so expensive?

We’re a rich country. Therefore wages are high. That’s definitional, high wages, rich country, they mean the same thing. Thus services which are primarily human labour cost a lot. Baumol had things to say about this. It’s the same reason the NHS *needs* that 4% real budget increase each year.

Etc, etc……

The post Questions from Spud first appeared on Tim Worstall.

Fiona Tomas
Camera crews told to shoot female athletes respectfully – it should be a given
In battle against sexualisation of sportswomen, latest guidance must be paired with improvement of gender diversity in broadcasting

By definition humans like looking at fit young women. Yes, this includes wimmins too – the wimmins’ mags are hadly full of hags now, are they? You’re just complaining about the species itself which, you know, isn’t the way to go?

Anyway, it does create a business opportunity. So the major broadcasters do it this proper way. Leaves a gap for a few enterprising lads to shoot differently, doesn’t it. Or even enterprising lassies.

The post Wrong species, Honey first appeared on Tim Worstall.

Speaking on the Alex Armstrong Tonight show, Farrow said the march was “not about gay rights” and had instead “become about celebrating every single sexuality that isn’t heterosexuality”.

She said this included “some very bizarre and unhealthy kinks and quirks, you know, like furries and bestiality and even minor-attracted, they call themselves minor-attracted people, you know, paedophiles”.

The remarks prompted an open letter signed by Polanski and Bimini calling on Ofcom to deal with the “dangerous” disinformation.

If she’s not allowed to say that then we’ve got censorship, not free speech.

So, Ofcom gets to fuck off then.

The post Free speech does indeed mean free speech first appeared on Tim Worstall.