Tuesday, 19 July 2016

A tip for the race to the bottom

From the annals of uninspired guesswork. "The human race is probably decades away from creating a robo-tailor" I supposed in January. By May, I wasn't so sure "...if they have a robo-cobbler next year, what might happen to the global garment trade, if a viable robo-tailor comes along the year after that?"

Now we're in July and the Graun is reporting that:
The jobs of nearly 90% of garment and footwear workers in Cambodia and Vietnam are at risk from automated assembly lines – or “sewbots” – according to a new report from the International Labour Organisation (ILO).

There are 9 million people, mostly young women, dependent upon jobs in textiles, garments, and footwear within the Association of Southeast Asian Nations (Asean) economic area, which includes Cambodia, Indonesia, Thailand and Malaysia. These are the workers the ILO identifies as most susceptible to losing their jobs to the new robot workforce.

Sewbots are unlikely to appear in factories in Asia, the report says, but will be installed in destination markets like Europe and the US. It is such a big threat that the ILO urges Asean countries to start planning to diversify to “avoid considerable setbacks in development”.
Moving swiftly on from my miserable failure to cut it as a prophet, or even a pundit, the interesting thing about this story is the on-shoring aspect. The work that corporations in the rich world exported, because poorer people would do it for a relative pittance, may be about to come back. But most of the jobs aren't, because robots will be doing them.

At least the title of one of my posts still stands - "Robots win race to the bottom?"

Sunday, 17 July 2016

Diggers to the rescue!

Who needs boring old Europe, anyway? Now we've got our country back and set the clock back to the jolly old days of empire, the colonies will save us! Look over there, Australia wants a free trade deal!

Britain's new headmistress called the news from Down Under a "very encouraging" demonstration of how leaving the European Union will work out splendidly for Britain.

And I'm sure it will. After all, who wouldn't want to swap a market of 440 million people, located right on Britain's doorstep for one of just 24 million, living almost as far away as it's possible to go without actually leaving the planet? And isn't Australia a dynamic, growing economy? Yes, it is ... sort of:
The national accounts published last Wednesday showed GDP growth of 3.2 per cent over the year to March – the highest since 2012, and among the highest of all ‘developed’ countries.

Those same national accounts, however, revealed that gross national income (GNI) had not moved over the year.

The main reason for the divergence between GDP and GNI is that recent GDP growth has come mainly from commodity exports – iron ore and liquified natural gas – at depressed prices (particularly for iron ore).

As resource companies’ earn income from exports, much of that income goes out again in the form of dividends to foreign investors and payments to foreign suppliers. Also, once these companies are fully operational, the domestic economic benefits of wages and contracts are far less than we had enjoyed in the investment phase.

Such is the cost of our “open for business” dependence on foreign capital to finance a mining boom ...

... The resources boom is over, and any recovery in resource prices will probably be minor. Thermal coal prices are almost certainly in long-term decline, as the world adjusts to climate change, and as less polluting sources of energy are developed...

...Had this foreign capital been directed to long-term wealth creation, our situation would not be so dire. But it has gone to finance extractive industries, with a legacy of holes in the ground, and to finance housing inflation.
"What's that Skippy? The poms are trapped down that big hole they dug themselves? Let's go and rescue them, Skip!"

"What's that now, Skippy? We're trapped in a big hole in the ground, too? Oh jeez, who's going to save us? Hello, is anybody there? Lassie? Flipper? Anybody!?"

Tuesday, 12 July 2016

Headline of the day

In another startling turn of events, ex-Shadow Business Secretary Angela Eagle has upped the stakes in her increasingly bizarre bid to become Labour’s next leader, by attempting to take an Austalian child hostage. During a tearful police stand-off, Eagle told surrounding police and journalists that she hoped Jeremy Corbyn was a "reasonable man" and promised that if he just went quietly, nobody needed to get hurt.

In other news, a bird did a thing.

David Cameron (abridged)

I just decided to write a biography of David Cameron, because I think I’d be rather good at it. Here goes:
Asked why he wanted to become prime minister, David Cameron is supposed to have said “Because I think I’d be rather good at it.”*

He went on to accidentally plunge Britain into its biggest existential crisis since World War Two, then walked away, humming a little tune:

"Do doooo, do doo.... Right..."

The End (© Andrew King).
I think that just about covers all the important details. Publishers can contact me via this blog.

*I don't know the original source of this story, but the earliest reference I could find in the minute I spent extensively researching my biography was this, by Leo McKinstry, in the Express.

Headline of the week

Oh Fark.

Monday, 11 July 2016

The Incredibles

It's been in the headlines ever since the vote for Brexit, but I still don't understand the logic behind the Parliamentary Labour Party's coup to unseat Jeremy Corbyn. Suggestions that he's not "relevant" or "credible" keep getting thrown around, but I'm still failing to see what relevance or credibility the plotters from Labour's Old Guard have brought to the party.

Consider the most important issue facing the party and its leader - the economy, stupid. From 2010, the Conservatives' only response to the post-financial crisis slump has been self-defeating austerity with a side-order of promising to be tough on foreigners and tough on the causes of foreigners. The Labour Old Guard could have come up with something more relevant and credible than that, but all they could manage was to promise austerity lite, plus a mug that promised that they, too, would be tough on the causes of foreigners.

It isn't difficult to see why a watered-down copy of a failing strategy failed miserably. It really wouldn't have been that hard to do something different, like explaining why austerity wouldn't and couldn't work under the circumstances. Never mind making an anti-austerity case to people of voting age, they could have explained it to children. Literally:
Why are debts going up if the policy is "cut, cut, cut"?

Now this is something I just couldn't understand why Labour couldn't articulate. It's not difficult. You could kind of explain it to, as the US would say, to a seventh grader, right? Primary seven,* right? You could do this with a primary seven.

So imagine that the economy is composed of two bits. The debt and the economy that pays for the debt, you with me?

Now let's turn that into a sum. We've all done sums, right? So we'll put the debt on the top, we'll call that the numerator and we'll put the economy on the bottom, we'll call that the denominator.

Now let's call it 100 and 100, so you've got a debt to GDP ratio of 100%.

Now let's assume that 40% of the economy's government spending - which would be true for a developed European economy.

Let's say that you're convinced that the only way in a crisis to improve business expectations is to slash the welfare stare. So you cut government spending by 20%.

Now what just happened to your denominator?

It just went to 80.

So what happens now when you've got 100 over 80?

You've got 120% debt to GDP. Now if everybody's sharing a currency and they're all each other's trading partners and they're all simultaneously trying to save, the only result can be a contraction of the denominator and an increase reciprocally in the numerator.

That's what happened. That's what everybody said would happen. And guess what? That's what happened. It's not a shocker.
From Mark Blyth's talk Geographies of Austerity (video below -  it's a long talk, but the section I've quoted starts at 8' 56"):
So, after losing the election, Labour finally woke up, smelled the coffee and elected a leader with a clear, understandable, anti-austerity message. Then Brexit happened, Ukip and the the Tory Brexiteers went back on their pre-referendum promises within 48 hours, and there were resignations and turmoil in the blue and purple ranks. Oh, and look, the Tories just quietly abandoned their plan to eliminate the deficit with austerity (George Osborne would have you believe that he's abandoned his plans to cut his way to surplus because of the post-Brexit crisis, but that makes no sense at all, given that the whole justification for all the austerity since 2010 was that we had to cut because we'd just had a crisis - if this was true, he'd be announcing that we'd have to cut even harder to claw a way out of this new crisis).

Under these circumstances, "Now would be a good moment to start a civil war in the Party" may go down in history as the worst decision in Labour history since that other screw-up Corbyn wasn't responsible for, "Now would be great time to start a war in Iraq."

*A child of 11.