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Samizdata quote of the day – lets give Willy Hutton a kicking edition

But we can and should go further than that. We all know there’s a vast amount of investment happening in this going green stuff. Maybe that’s a good idea, maybe not, that’s for another day. But the point of what is being done is to address an externality – those environmental damages, costs of emissions, which do not show up in prices and therefore are, again, not in GDP. So, we solve those externalities – and maybe we should! – and we create green jobs while doing so.

Cool. So, now we have the same output – say a GW of ‘leccie, even a GWhr – with the same value as before but we’ve used more human labour to produce it – those green jobs that the energy transition creates. By definition productivity has declined. Again, by definition productivity has declined.

Tim Worstall

10 comments to Samizdata quote of the day – lets give Willy Hutton a kicking edition

  • Fred Z

    Someone’s got to tell Worstall that logic and mathematics are offensive to the religious zealots of the Church of Climate Change.

    He’s just going to get himself stoned to death, sooner or later.

  • Fraser Orr

    I don’t think his argument holds up at all. If you produce the same amount of electricity AND something else (in this case the reduction in the externalities) your productivity is not necessarily going down at all. If for example, a gas fired power station produced 100MW of power, and they decided to build pipes that took some of the waste heat and transfer it through a series of pipes to a chemical factory next door, they’d need more people and generate the same amount of electricity, but there is no reason to think that overall productivity is down.

    I’m no fan of the government funded green revolution and I think the countryside has been absolutely ruined by endless miles of ugly windmills, but I think his economics are off here. On the other hand I think the generation of electricity without fossil fuels is a good thing in many respects, if and when it can be shown to be profitable by attracting private capital investment rather than stealing from the taxpayers. I think, for example, the recent opening of a massive solar power station in the UAE built in the middle of a useless desert, is all in all a good thing. And I think that the idea of spending more now by capital investment, for a better more profitable future is the very essence of the free market.

    This Hutton quote really struck me:

    Britain is suffering from an intensifying four-decade-long investment drought in the public and private sectors – the root cause of the crisis in stagnating productivity and living standards that shapes our politics and daily lives.

    That’s not true. Britain and the west is suffering from a lack of investment because the government is bleeding the private sector dry with massive taxes, huge inflation and the non stop printing of unbacked money. The private sector can’t make investments if the government takes away all its money.

    And stagnating productivity and living standards? Apparently it never occured that productivity might be caused by a massive regulatory burden (and Covid — don’t get me started) and lower living standards? Did it occur to him that this might be because the non stop government printing presses have caused crazy levels of inflation?

    However, his points about measuring real productivity are good ones.

  • Paul Marks

    Like HS2, a 100 Billion Pound link from Gospel Oak (a London suburb) to Birmingham (London and Birmingham are already liked by rail), – if these “Green” schemes were sensible the government would not need to subsidise them.

    When official people talk of a “business case” they do not mean what these words used to mean – when government and corporate bureaucrats (there is no real difference) now talk of a “business case” they are just using Corporate State jargon for some demented scheme that is going to cost the taxpayers a lot of money in order to benefit a small, but well connected, group.

    As for calling government spending “investment” and talking of “the public and private sectors” – this yet more Corporate State jargon, it is nonsense.

    By the way – if there is a housing shortage (do not see the ten million immigrants over the last 25 years – you are not supposed to link this with the housing shortage) then HS2, which destroys many houses, should not have been started.

  • Paul Marks

    In case anyone does not know – much of the attack on C02 (pictures of smoke, C02 is transparent, faked temperature figures and-so-on) is farcically false, the United Kingdom produces about 1% (one per cent) of human emissions of C02 (most C02 emissions are natural) and the People’s Republic of China and other Asian nations are massively INCREASING C02 emissions anyway.

    As people as varied as David Rockefeller and Gro Harlem Brundtland (the former socialist Prime Minister of Norway who became a high official in international governance) admitted – this is not really about attacking plant food (which is what C02 really is – if C02 levels had not modestly increased there would likely be mass starvation now), this is about international governance and “redistributing wealth” away from the West.

    Contrary to what TW says – stating the facts should not be “put off to another day” – the facts need to be stated every time this “Green” agenda comes up.

  • Lee Moore

    Fraser, I think Tim’s point was that the “output” represented by environmental “goods” is not included in GDP, not that it isn’t, or might not be, valuable output. But the productivity numbers on which Hutton bases his whining about low productivity ARE based on GDP. So whatever “investments” the government makes in environmental improvements necessarily reduce productivity as measured by the stats Hutton uses because they consume measured resources without producing any measured output.

    Tim is obviously right about this, and also obviously right about Hutton being a wally, but I’m not sure Tim is being wise in pointing this out (or at least the first point.)

    Because he is simply begging the government to insert an adjustment into its GDP figures representing the value (as estimated by the government) of the environmental “outputs” purchased with all that “investment” in greenery. And why not add the social “output” from welfare spending too ?

    So we will soon discover that more taxes and more government spending are fantastically economically efficient, just look at the figures you reactionary dolt. Your complaints that these adjustments are JUST MADE UP will be defined as misinformation, because these figures have been provided by EXPERTS no less. In short, Tim is making a rod for his own back. And ours.

  • Windy Pants

    Not that long ago, a sightseeing daytrip to a big city could involve lugging around a camera, a camcorder, a wallet, a mobile phone, a book to read on the train, a fist full of timetables, a walkman to listen to, a selection of cassette tapes by your favorite artists and half a hundred other odds and sods that we’re already well on the way to forgetting about. Not only was this inconvenient, but it also cost a fortune.

    These days we just pick up our smartphone.

    This is a far more convenient solution, but I bet it plays merry hell with the GDP stats.

  • jgh

    Government output figures *are* just made up. As there is no way of measuring the output, they define output = input.

    During Covid the UK national statistics office recognised that was nonsense for output=input with huge numbers of public servants doing no work, but still being paid, so did some work to calculate what the actual (reduced) public sector output was – much to the horror of observers horrified by the recalculated GDP figures going down.

  • Paul Marks

    Lee Moore – yes indeed.

    As for GDP – it is already a junk statistic, as Windy Pants and jgh make clear.

    The back pages of the Economist magazine used to have both industrial production figures (which have some utility – although, yes, it is a far from a perfect measure) and “GDP” figures (consumption – even government spending) – now they just have “GDP”, no industrial production figures.

    The international Corporate State is now totally shameless – they lie about everything, from historic temperature figures to American election results, indeed even if there are effective Early Treatments for life threatening diseases.

  • Kirk

    Anything involving administration or government is an illusion; the people involved in that end of things have little incentive to determine the truth of things, let alone tell you what it is.

    Consider the amount of “overhead” in today’s version of health care and education: First, we establish the government agencies to “oversee” these things, and then they cooperatively work with their peers inside the institutions of education and medicine to further the aim of parasitizing the institution. How much of what an education costs these days stems from circular demands for data, reports, and compliance? With medicine? Do you think that all that money is actually going to health care? Fixing people?

    You have to analyze all of this as “anti-profits”, financial friction that takes actual resources away from their intended purpose and places it into the ever-deepening pockets of the administrative state. When the end-state is reached, the budgets for health care and education will be near-infinite, and zero health care or education will actually be delivered.

    They come to us for bond issues to “improve the schools”; how much of that money goes to the teachers, when we’re simultaneously being dunned for more and more “school supplies” for the children to take to school? They’re actually demanding toilet paper, these days in some areas of the country…

    My take on it? The parasite class, produced by the academy, needs culling. Badly. The entire structure needs to be pulled down and replaced with something that actually works.

    Which likely won’t happen until the whole thing collapses under the weight of its contradictions, serving as a cautionary tale for the ages…

  • Tim Worstall

    Quite so, quite so:

    “Fraser, I think Tim’s point was that the “output” represented by environmental “goods” is not included in GDP, not that it isn’t, or might not be, valuable output. But the productivity numbers on which Hutton bases his whining about low productivity ARE based on GDP. So whatever “investments” the government makes in environmental improvements necessarily reduce productivity as measured by the stats Hutton uses because they consume measured resources without producing any measured output.”

    Specifically, when we say “productivity” we mean labour productivity, which is simply GDP/labour hours. Use labour for anything which doesn’t show up in GDP, productivity therefore falls.