Category Archives: Economics

Buddhist economics

bud-econ(1)Nice blog by a staffer at Bank of England on ‘Mindfulness economics‘.

Small is Beautiful had a disappointing chapter on Buddhist Economics;  Dan Nixon has done a better job than Ernst Schumacher! Also some useful links to Mark Carney’s Tragedy of the Horizon speech and about the how climate catastrophe is viewed by myopic markets the debates on secular stagflation about how to retain the world’s economic mojo when growth rates and interest remain persistently low.

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Filed under Economics, Politics

Review of “Postcapitalism: A Guide to Our Future” – Paul Mason

PostcapitalismMason is best known to Brits as a broadcast journalist on BBC and Channel 4, and as a professional northerner-Trotskyist purveyor of political balance on the interview couch. He has drawn on an eclectic mix of economists, psychologists and futurologists to substantiate his obituary of neo-liberalism.
The book’s key argument is that several megatrends make it likely and desirable for traditional capitalism to collapse. Markets are becoming increasingly irrelevant in many of their key functions like the allocation of capital, price discovery and matching supply and demand. In a world of quantitative easing and dematerialisation of production there is excess capital rather than lack, digitalisation has meant that marginal production costs for many classes of goods are virtually zero, and the Internet is increasingly making geography irrelevant so the markets for many goods have become tournaments with a single supplier like Expedia or Amazon dominating the sector through unassailable network economies.
There is reference to a fascinating essay by Marx Fragment on Machines written in 1858 in Kentish Town (near my home) in which Marx argues that innovation in organisation and technology greatly increases labour productivity, more so than the simply accumulation of capital – and machines have the potential to cheaply displace the working classes. But as we know Marx dropped this line of reasoning and the first volume of his opus published in 1867 was called Capital rather than The Terminator. We had to wait 117 years for the other great seer James Cameron to finally identify the threat posed by machines.
The book also features a slightly quixotic discussion of an economist I had never heard of Kondratieff who reached the politically uncomfortable conclusion, at least in Joseph Stalin’s Russia, backed up by painstaking statistical analysis that capitalism instead of dying and being replaced by socialist utopia always survived its internal crisis, through increasingly traumatic structural shifts – like the 1930s crash – which took place every fifty or so years. This was roughly the interval of time that the collective human brain allows hubris to overcome caution.
Mason’s book could be criticised for its rather quixotic selection of writers and events to cite, but this would be missing the point. Mason is not projecting into the future, simply into a future if you buy into his thesis. But compared to his fire-in-the-belly analysis his policy recommendations are rather tame, and some naïve. Does anyone seriously believe that if his first recommendation “Model first, act later” that macro-economic crisis could be averted; that somehow cranking the wheel on some tired old model infested with dodgy data and prejudices dressed up as structural equations would provide us with actionable insight. His other recommendations similarly feel a bit like he’d reached the end of the analysis and was left struggling with how to finish. Unlike me.

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Filed under Economics, Review

Sustainable consumption

SCI_Info_watermark_ENG_LowThe Hong Kong Consumer Council published its first report on sustainable consumption a couple of weeks ago. The highlight are results from the first survey of Hong Kong consumers knowledge, attitudes and behaviours to sustainability. Also a chapter on firm’s listing on the Hong Kong Stock Exchange pitiful corporate social responsibility reports. The stock exchange is toughening up the rules so should see an improvement. The metabolic rate of policy making in Hong Kong is much slower than in the UK and we managed to get the two members of the cabinet to speak at the report’s launch. Organising an event in HK is very different to UK – with as much attention given to the group photos as the contents of the talk.

Organising conferences about sustainable consumption is much easier than making it happen. TRAFFIC arranged a three-day workshop to help activists in SE Asian countries stop illegal or unsustainable trade in rare wildlife – ivory, tiger parts but also less photogenic plants and animals like agarwood and the truly ugly humphead wrasse. Hong Kongers make a lot of money out of trading in illegal substances – a sad legacy of Britain’s imperial past!

Mainland China’s pushing the idea of “Ecological Civilisation”. Hard to tell whether it’s a coherent alternative to current neo-liberal capitalism with some market based environmental policy or just a soundbite. But certainly true that they’re quickly replacing old polluting factories with less polluting ones, poor air quality in Chinese cities is a high priority and there’s a substantial market in green finance opening up.

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Filed under Economics, Environment

Manufacturing scarcity

Until I came to Hong Kong I thought debenture was a fancy word for pretty-young-things’ first grown-up party. It is only when I arrived here that I found out otherwise. Elite schools use debentures to borrow for free from wannabe students’ parents, and exclude the hoi-polloi. Try googling debenture and you’ll get sent straight to There’s a thriving secondary market in debentures – prices vary from $25,000 for the not so grand schools to $10million for the most sought after. This is on top of the annual fees of around £15k.


Competition in my building

As the photo to the left shows education is where the rat race starts. And as the second picture reminds us there’s no need to wait till a kid gets is at school to start tutoring. Kindergarten kids can cram in another language while they are being potty-trained. (To be fair the nursery did also have some very nice climbing frames).

Education could be the great leveller, but money is able to frustrate such egalitarianism.

Why are so many expats, and wealthy local people, prepared to pay so much to avoid the local schools? Anyone who’s watched BBC’s fascinating reality show on Chinese education applied to UK schools knows that Chinese kids do incredibly well in international student comparisons. But ambitious Chinese aren’t interested in learning the syllabus. They want their kids to be taught in English and gain internationally recognised qualifications rather than the HK Diploma of Secondary Education so they have an exit strategy to a better life via a foreign university. A quarter of the state schools language of instruction is English but entry is highly competitive – and the educational regimes hellish with too much homework, boring rote learning and a lack of opportunity to develop creative skills.

Kinder garden in mid-levels

Kinder garden in mid-levels

It’s incredibly competitive getting a place in one of Hong Kong’s seven public universities. Government funds just 20,000 new enrolments per year, far less than the demand from the 100,000 young people that will reach 18 this year. Given that so many young Hong Kongers want to go to university many have no choice but to attend HK’s private universities or go overseas.

But it’s not just education where manufactured scarcity is driving up prices. You have similar secondary markets for membership of the Hong Kong’s elitist private clubs. Getting hold of a membership for Clearwater Bay Golf Club – the swish-est in the territory – will set you back a million sterling. By way of comparison the cost of private clubs in London is around £1500. In UK allocation is by queue, or through obscure nomination procedures.

Large plots of new space has to be created either as newly manufactured islands or reclaimed shoreline. It is used to site airports, motorways and high-end offices. No-one is likely to set up a new golf club or cricket club anytime soon. Instead membership to the existing ones is traded. The private clubs are great places to entertain clients or take the family on Sundays when the helper gets her day-off.

Cartoon from South China Morning Post

Cartoon from South China Morning Post

Uber has been in the Hong Kong news the last week after the police arrested several drivers for providing taxi services without a permit, and raided Uber’s offices taking several staff away for questioning. The number of red taxi permits in Hong Kong has remained fixed for twenty years. This is despite souring demand through increase in tourism and people’s income. This means the costs of the permit has now risen to over £600,000 and there is such a healthy secondary market in the permits. Investors treat them as another asset class to buy and sell.

So what else have I been up to? I took my bike on the ferry at Sai Wan Ho to Kowloon a few weeks ago. I had a vague ambition to see some of Kowloon’s more spiritual and ancient sites. Weaving through traffic and carrying your bike over six lane motorways wasn’t the most relaxing way of travelling but it was fast and exhilarating. Stupidly I had picked the hottest day ever recorded, in some parts of HK the temperature hit 38°C.


Chi Lin Buddhist nunnery

Nan Lian garden

Nan Lian garden

The most photogenic place was the Nan Lian Garden near to Diamond Hill MTR. It looks ancient but was actually created from a brownfield site in 2006. The stunning buildings use traditional wood construction techniques. You can, for an hour or two, from the right angle, totally forget you are in Kowloon surrounded by 2 million people in 50 square-km. The buildings are held together using clever joints instead of nails. There is a small exhibition in one building showing models of such traditionally built temples from the Mainland, some are almost a thousand years old and six or seven storeys high.

The garden was designed and is operated by the Chi Nin nunnery, which is situated right next door. Again this seemingly ancient building was constructed in the 1990s. There are some terrific Buddhas in the shrine rooms but no sign of nuns and little evidence of anyone practising religion.

Roof in Plaza Hollywood shopping mall

Roof in Plaza Hollywood shopping mall

Here is a photo is of the stain-glassed roof of Plaza Hollywood. The mall is over the road from the nunnery. Thousands of retail devotees take part every week in their weekly pilgrimage to the 130 retail outlets. Shopping must surely be Hong Kong’s truest religion.

A few miles from Diamond Hill is the fascinating Kowloon walled city. This tiny patch of space, just 2.6 hectares, used to be a Chinese enclave following the leasing of the New Territories in 1898. For a few years the Chinese maintained a garrison inside the walled city in the 19th Century but they very soon pulled out and the tiny plot of land became stateless and a safe haven for triads, drug manufacture and even some legit manufacture

Kowloon Walled City

Kowloon Walled City

(apparently a big centre for making toilet plungers!). Its population mushroomed and tens of thousands lived there. In 1994 the British Government agreed to sort it all out and the buildings were levelled and the land converted into a park. A few of the oldish

buildings still stand but they have no roofs, which made them less than ideal to hide from the 34°C. Memo to myself – check the weather forecast next time I go cycling.


Filed under Economics, Travel