• The outline of Mrs May’s strategy can already be discerned: it is hidden in plain sight, but gradually becoming clearer to those who are connecting the clues contained in various speeches and policy papers. The evidence suggests Mrs May wants to keep Britain in a tight customs relationship with the EU and something that looks suspiciously like a single market for industrial goods; services and financial services would be covered by looser agreements.

    Some fear this will end up with European Court of Justice rulings over the goods sector — crossing one of Mrs May’s red lines — and possible payments to the EU budget. The threat last week by Airbus to shift investment out of the UK unless a smooth Brexit is guaranteed will strengthen Mrs May’s hand. It is far from clear whether the EU would accept such a proposal, but it is certain that the Eurosceptics will not like it.

    Mr Johnson told his Thatcherite colleagues this month that Brexit would happen, but added: “The risk is that it will not be the one we want.” The most obvious sign of Mrs May’s intent is her answer to the so-called “Irish backstop” question: the legally binding and open-ended guarantee demanded by Brussels that there will be no return to a hard border on the island of Ireland.

    In a paper published this month, she quashed protests from her Brexit secretary, David Davis — who threatened to resign — by committing the whole UK to close ties to the EU’s customs union until or unless another solution was found to avoid checks along what was once a militarised frontier…

    The prime minister is edging towards something that looks much like a single market in industrial goods, to counter the need for regulatory checks at the Irish border — or any of Britain’s ports — after Brexit. “It is a proposal under current consideration,” says Charles Grant, director of the Centre for European Reform. He wonders whether Mr Johnson and fellow Eurosceptics might quit rather than swallow it…

    The clues are everywhere. Britain wants to stay part of EU regulatory agencies and this month Greg Clark, the business secretary, made a little-noticed announcement that Britain would seek to remain part of the European standards system, rejecting suggestions from Liam Fox, the pro-Brexit trade secretary, that the UK might be better off aligning with the US.

    Meanwhile Mrs May, in her Mansion House speech in March, noted that as part of a “comprehensive system of mutual recognition” parliament might choose to pass identical laws in the goods field to the ones adopted by the EU. Although she insisted Britain was leaving the single market and that any mutual recognition deal would have to be policed by an independent body, Eurosceptics fear that some of these caveats would be lost in future negotiations on trade with Brussels.

    tags: Brexit TheresaMay ConservativeParty

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  • In “Bullshit Jobs” (Simon & Schuster), David Graeber, an anthropologist now at the London School of Economics, seeks a diagnosis and epidemiology for what he calls the “useless jobs that no one wants to talk about.” He thinks these jobs are everywhere. By all the evidence, they are…YouGov, a data-analytics firm, polled British people, in 2015, about whether they thought that their jobs made a meaningful contribution to the world. Thirty-seven per cent said no, and thirteen per cent were unsure—a high proportion, but one that was echoed elsewhere. (In the functional and well-adjusted Netherlands, forty per cent of respondents believed their jobs had no reason to exist.) …In the course of Graeber’s diagnosis, he inaugurates five phyla of bullshit work. “Flunkies,” he says, are those paid to hang around and make their superiors feel important: doormen, useless assistants, receptionists with silent phones, and so on. “Goons” are gratuitous or arms-race muscle; Graeber points to Oxford University’s P.R. staff, whose task appears to be to convince the public that Oxford is a good school. “Duct tapers” are hired to patch or bridge major flaws that their bosses are too lazy or inept to fix systemically. (This is the woman at the airline desk whose duty is to assuage angry passengers when bags don’t arrive.) “Box tickers” go through various motions, often using paperwork or serious-looking reports, to suggest that things are happening when things aren’t. (Hannibal is a box ticker.) Last are “taskmasters,” divided into two subtypes: unnecessary superiors, who manage people who don’t need management, and bullshit generators, whose job is to create and assign more bullshit for others…Graeber comes to believe that the governing logic for such expansion isn’t efficiency but something nearer to feudalism: a complex tangle of economics, organizational politics, tithes, and redistributions, which is motivated by the will to competitive status and local power. (Why do people employ doormen? Not because they’re cost-effective.) The difference between true feudalism and whatever is going on now—”managerial feudalism” is Graeber’s uncatchy phrase—is that, under true feudalism, professionals were responsible for their own schedules and methods… Left to their own devices, Graeber points out, people tend to do work like students at exam time, alternately cramming and slacking. Possibly, they work this way because it is the most productive way to work. Most of us would assume that a farmer who started farming at 9 a.m. and stopped at 5 p.m. five days a week was strange, and probably not a very good farmer. Through the better part of human history, jobs from warrior to fisherperson to novelist had a cram-and-slack rhythm, in part because these jobs were shaped by actual productive needs, not arbitrary working clocks and managerial oversight. Graeber laments a situation in which it’s “perfectly natural for free citizens of democratic countries to rent themselves out in this way, or for a boss to become indignant if employees are not working every moment of ‘his’ time.”…Is it possible that bullshit jobs are useful? In Graeber’s view, they simply reinforce their premises. “We have invented a bizarre sadomasochistic dialectic whereby we feel that pain in the workplace is the only possible justification for our furtive consumer pleasures, and, at the same time, the fact that our jobs thus come to eat up more and more of our waking existence means that we do not have the luxury of—as Kathi Weeks has so concisely put it—’a life,’ ” he writes. His own idea of a life, which includes “sitting around in cafés all day arguing about politics or gossiping about our friends’ complex polyamorous love affairs,” may not be everyone’s. He also may misidentify the degree to which most people fret about the nature of their productive output; for some, work is the least important and defining of life’s commitments. But his point is that the bullshit economy feeds itself. Workers cram in Netflix binges, online purchases, takeout meals, and yoga classes as rewards for yet another day of the demoralizing bullshit work that sustains such life styles. (Graeber’s frame is mostly urban and educated middle-class, which seems unobjectionable, since, one suspects, his readers are, too.) Acculturation happens early… In Graeber’s eyes, make-work student jobs educate the young into lives of bullshit. Without such demands on their time, he writes, they could be “rehearsing for plays, playing in a band,” and the like. The binary is misleading—it is possible to hold a mind-numbing job and be the singer in a band—and anybody who has read much student fiction or seen many campus plays will wonder whether the bullshit quotient is much lessened there. Young people may be asked to do inconsequential work as part of an insidious acculturation scheme. Or they may be asked because their higher-order skills are not honed, and there’s benefit—for everyone—in forcing them to attain their lives’ endeavors by intent, not by default…Unnecessary employment may be one of the great legacies of recent public-private collaboration.By most criteria for market efficiency and workplace happiness, that is bad. Yet it leads to a realization that Graeber circles but never articulates, which is that bullshit employment has come to serve in places like the U.S. and Britain as a disguised, half-baked version of the dole—one attuned specially to a large, credentialled middle class. Under a different social model, a young woman unable to find a spot in the workforce might have collected a government check. Now, instead, she can acquire a bullshit job at, say, a health-care company, spend half of every morning compiling useless reports, and use the rest of her desk time to play computer solitaire or shop for camping equipment online. It’s not, perhaps, a life well-lived. But it’s not the terror of penury, either.Or maybe she does something even more ambitious. Graeber claims that it’s “unusual” for workers to use nonsense jobs as fronts for more rewarding work. Yet people do write music, poetry, and more at the bullshit desk… None of us entirely avoids the bullshit. But a few people, in the end, make it work.

    tags: bullshit work employment jobs culture leisure anthropology 21stCentury prediction Keynes bookreview technology

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  • Decades from now, we may look back at the first weeks of June 2018 as a turning point in world history: the end of the liberal order…

    Americans want an international order that makes them safe and prosperous. And no doubt this fall, when Mr. Trump gets his military parade in Washington, we will hear no end of boasts about American power. And during the midterm elections, we will hear all sorts of talk about how the president has made America great again.

    But those boasts will ring hollow if, at the same time, America lets go of the world order that is its greatest achievement. Tending the garden that the hard men who fought World War II labored to create is a much less expensive undertaking than allowing it to fall into disrepair and having to recreate it.

    tags: foreignpolicy USforeign USsecurity security stability DonaldTrump USpolitics China Russia

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  • Recent studies show that their resolve wavers when racially or ethnically charged issues like neighborhood integration are at stake…EXCERPT >>>In other words,Prejudice may have helped cause segregation, but then the segregation helped cause even more prejudice.Looking beyond the borders of the United States, Enos argues that as much as support for diversity is integral to modern democracy, diversity can make governing more difficult:The negative effects of diversity may be responsible for some of the profound differences between places such as Denmark and Zambia or Singapore and India. Noting that these four countries are all democracies, we see the consequences of voters — normally separated by geographic, social, and psychological space — coming together to govern and having to make decisions and allocate resources. It appears that when people are faced with these decisions in a diverse democracy, rather than a homogeneous one, they often choose not to do the things that “make democracy work,” failing to bridge the space between groups by cooperating to share resources and provide for the common welfare.This tendency, according to Enos, demonstrates “why diversity is such a vexing problem.”Liberal democracies endorse diversity, Enos writes,indeed, it is often considered one of our strengths and liberal individuals usually favor diversity as a matter of ideology and public policy. We often support diversity out of a genuine ideological commitment and because we rightly perceive that diversity can improve the performance of many organizations, such as universities and businesses.But, he continues, “looking across the world and even across states and cities within the United States, most of us would rather not live with some of the social, economic, and political consequences of diversity.” This is what Enos calls “the liberal dilemma.”Enos cites Gordon Allport, formerly a professor of psychology at Harvard, who described “contact theory” in his 1954 book, “The Nature of Prejudice.” Under the right circumstances, Allport argued, interracial contact could reduce hostility. Those circumstances, Enos notes, include “economic equality and social integration.”In practice, Enos points out:Allport’s conditions for prejudice reduction are seldom fulfilled. One of these conditions was that interpersonal contact would reduce prejudice when members of each group were of equal social standing.In reality,not only does equality between groups not exist, but true interpersonal contact across groups seldom takes place, even when groups are proximate. Two groups can live in the same area without having meaningful interpersonal contact.It almost goes without saying that the patterns Enos describes have been crucial to President Trump’s political success.Trump’s “most dramatic gains,” Enos observes, “that is, where a greater percentage of voters voted Republican than had done so in 2012 — were in the places where the Latino population had grown most quickly.”Not all of Enos’s findings are bleak. Group hostility, he writes, grows as the size of the immigrant population grows until it reaches a certain point and then begins to recede…

    tags: race racism voting election anxiety fear integration research attitude publicopinion publicpolicy DonaldTrump

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  • In the many critical thought pieces Tesla, and by obvious extension Elon Musk, have generated over the past few years, there seems to be a common thread of reasoning.

    The argument often goes something like this: “yes electric cars are good, and climate change is the existential issue facing planet earth, but why oh why do Elon’s businesses burn so much capital and lean so heavily on the largesse of the state?”

    Critics have been quick to point out the sheer waste — of industrial and human capital alike — generated by Musk’s green empire. Take for example this 2015 Los Angeles Times piece highlighting the billions of government-subsidy dollars spent, or the Boston Review’s castigation of the “irrational vanity” of “self-seeking financiers” funding Tesla’s persistent losses.

    (Alphaville, we must add, has also been writing about this to varying degrees.)

    They are right of course. But a brief look at the history of capitalism as an engine for innovation and economic expansion shows that seemingly wasteful speculation can have an impact far beyond the typical time horizons of investors.

    The great American railways provide a helpful illustration….

    Yet its genesis, much like Britain’s railways, was a period of investor mania and torched capital.

    The railroad industry, much like car manufacturing or reusable rockets, had expensive economics, requiring a large amount of upfront capital to cover the enormous fixed costs of building out the core infrastructure.

    Sourcing this capital, as historian Alfred Chandler wrote in his book The Visible Hand, led the railroads to become the first private businesses to seek funding from outside their own regions as it could “no longer be raised, as it had been earlier, from farmers, merchants, and manufacturers”.

    In step, French and English speculators began to purchase railroad securities in the early 1850s, stumping up close to $700m by 19*1859 (around $20bn in today’s dollars) as they sought to get rich quick in a rapidly developing frontier market. Over the 1850s, over 30,000 miles of rail-track was laid thanks to this wave of speculative finance.

    To get a sense of the scale of cash injected, economist Bill Janeway calculates railroad investment amounted to approximately 20 per cent of all capital formation in the United States, or 3 per cent of gross national product, during the mid-1850s.

    As with all speculation, it came to a messy end in the panic of 1857, when credit markets froze, and stocks and railroad securities collapsed under the weight of rising interest rates and a vast of oversupply of railroads with no clear economic value. Remind you of anything, solar investors?

    In 1858, the mountains of wasted capital and railroads to Kansas which served no obvious economic purpose (except for helping land speculators high-tail it back to the East coast), must have looked, for lack of a better word, dumb.

    Yet as Chandler notes, the railroads eventually ended up transforming America. They encouraged migration to the West coast, opened new markets for goods, created liquid capital markets (which would fund future innovators, such as Thomas Edison and Nikola Tesla) and helped develop the basic tenets of modern accounting.

    Arguably the “killer application” of the railroads, the mail order catalog of Sears-Roebuck, didn’t arrive until the end of the century, as economist Brad DeLong has argued. In any event, it demonstrates that spurious financing, with no clear expected value, can produce value which outlives the inevitable losses of its initial financial backers.

    The role of the state was also crucial to the railroads’ success — perhaps even more so than the current set of regional green incentives for Tesla and other businesses today. Between 1850 and 1871, for example, the federal government granted between 130m to 175m acres of land to railroad companies, depending on who you ask. This figure doesn’t even include the Pacific states, where industrialists received their own set of land grants after the Pacific Railway Act of 1862.

    Parallels between 1850’s railway mania and Musk’s fiefdom (and with it, the wider green revolution) may seem tenuous to our readers. After all, a modern economy is pretty much unimaginable without rail infrastructure while we could probably do without $500 a pop Boring Company flamethrowers.

    However, when the dust has settled in twenty years, will we look at the Tesla supercharging network, which reportedly just hit 10,000 locations, and think of it as anything other than key infrastructure? Even if Tesla were to disappear tomorrow, one would imagine it would not take a huge amount of work to make the charging stations brand agnostic.

    Perhaps more importantly, and regardless of the businesses economics, Musk has succeeded in transforming how the general public perceives electric cars. A decade ago, a hybrid or electric vehicle was explicitly a compromise – a car could green or be sexy, but never both. It’s not hard to remember the Toyota Prius being the butt of jokes on dad-friendly automotive television.

    The Model S, Tesla’s flagship luxury car, irrevocably changed this dynamic for good. Even Jim Chanos, perhaps the most renowned of Tesla bears, admitted as much in a recent podcast with Bloomberg’s Barry Ritholtz.

    While bears are probably correct in citing the incoming tide of electric cars from seasoned automakers such as Jaguar and Porsche as a threat to Tesla’s market dominance, it is also often said imitation is the sincerest form of flattery. Would Porsche’s timeline for an electric vehicle look the same if Tesla hadn’t forced its hand? We can only hypothesise, but even if Tesla have pulled forward demand by only a few years, the marginal environmental benefits are sizable. Unfortunately, this value will not accrue to investors.

    Let it be clear we’re not here to defend Tesla’s questionable business practices, such as its alleged treatment of workers or murky marketing of its autopilot software. Nor are we denying the equal importance of scrutiny in public markets, whether from investors or the media. For every buyer of a security there has to be a seller, after all.

    However one should be aware of the role irrationally allocated capital has played in funding innovation and infrastructure, a function it usually performs with the state’s explicit support, as Bill Janeway and Marianna Mazzucato often point out.

    Perhaps then it’s time to celebrate entrepreneurs who are willing to literally flame-throw cash. After all, if a business blows up, as Brad DeLong has argued, investors lose and we get to use their stuff for free.*

    tags: investment technology railway ElonMusk UShistory USeconomics economics publicgood publicpolicy

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