måndag 29 april 2019

Scottish independence problems

The Union originated due to the Scottish having lost a vast amount of money in an ill-fated colonial project. It will not break up unless the money settlement works.

Scotland in the EU, but England outside it would not work. England is the main source of goods imported to Scotland; they would become more expensive as they would be subject to the EU tariff, which would lead to cross border shopping in places like Newcastle and Carlisle. This in turn would lead to long tailbacks down the A1 and M6, as cars and HGVs waited to clear the EU customs barrier that would go up.

There are also issues over who would pay for defence.

The Scots would do better to focus on the highly concentrated pattern of land ownership in the country, and to use the freedom that already exists to apply a land value tax. However, Scottish politicians do not seem to be particularly smart or they would not be operating policies such as higher income taxes in Scotland.

söndag 28 april 2019

Swedish water rights mystery

My friends live in a house overlooking this lake, about 15 km from Gothenburg. The lake is man-made, having being created by the construction of a dam. A few hundred metres downstream from the outlet is the remains of a mill. Further downstream still, there was yet another mill; the present owner retains the rights to the flow of a certain volume of water. These rights were acquired in the 1920s, when the government (foolishly) gave away water rights in exchange for an undertaking to construct electricity generating facilities. However, this particular facility, is, I am informed, barely functioning, and even if it was, it would make little use of the head of water that is potentially available and is consequently inefficient.

In dry weather, as we have had recently, this owner complains of insufficient flow, and water then has to be released from the lake. Prolonged dry weather results in a significant fall in the water level and the exposure of unsightly areas of mud.

Loss of water leads to a deterioration in water quality, which for many decades has been managed by a fishing association which, among other improvements, has reduced the acidity of the water by regular dozing with chalk dust, resulting in a good population of fish including perch and pike.

I do not know if I have been given the full story, but the owner, despite making little or no effective use of this water, wants the local authority to pay 3 million kronor for the extinguishing of the rights to ‘his’ water from this and two other lakes. The obvious response would be to restrict the water outflow in dry weather so as to maintain the water level in the lakes, and wait for the claim for damages. If my information about the virtual non-use of this water is correct, the damages due would be 0,00 kr.

Such an inefficient capture of the energy in the water makes no sense. An efficient system would pipe the water from the upper level, which would create a pressure of 1 bar for every 10 metres drop and could be used efficiently to drive a turbine linked to a generator. Whether the volume of water available is worth the cost of installing such a system is another question, but it might be possible for the owner to have his power without draining down the lake.

There is a further issue also: the valuations of the lakeside properties for tax purposes, which is on the assumption that the lake is an amenity, which it certainly is not if the water level fluctuates, leaving expanses of mud in dry weather.

tisdag 2 april 2019

Rampant mercantilism

I picked this up in an article headed “Would the UK be better off outside the Customs Union.”
A YouGov survey last July found that independent trade policy was voters’ joint fourth Brexit priority, behind control over immigration, and ending EU rules and budget payments.
Trade experts say deals get more contentious once they become real. “It is one of those things that sounds great but when it actually comes down to it trade has always been controversial because people always want something from you,” said David Henig, who was heavily involved in negotiations on an EU-US trade deal. “New Zealand want to sell more lamb and Australia certainly want to sell us more lamb. That’s not going to go down very well in Wales or Scotland.”
Henig’s mercantilism is showing. Cheaper New Zealand and Australian lamb would go down very well with shoppers in Cardiff and Glasgow. Why is there this blindness to the obvious? Should this man be in charge of negotiating trade deals when he evidently has such a limited idea about the purpose of trade?

Ricardo’s Law in brief