On WOTCs permissive licences

On WOTCs permissive licences

Earlier this year, Wizards of the Coast, the owners of Dungeons & Dragons, bought D&D Beyond, the premiere and largest web store for the rules of D&D and they are now trialling a new version of the rules called One D&D; they are also planning to release a virtual table top solution and have a new movie in production. Also recently at a Hasbro earnings call, one of their executives stated that D&D was now a lifestyle brand and was under-monetised. This has created a sense of fear amongst 3rd party creators that WOTC will revise their intellectual property sharing agreements to the detriment of themselves and non-Dungeon Master players who have been identified as under spenders. Depending on where you look, this has created a lot of noise; I think there’s a lot of fear being generated, and it interests me to consider the issues in the context of the software industry practice. I think that software industry grew the open source models and the interaction by games vendors such as Wizards with software continues to inform good & bad practice, There's more overleaf ...

Trade Friction and free movement.

I co-authored this, published at Brexit Spotlight by Another Europe.

Measuring the Brexit impact on the economy: the evidence that points to a self-inflicted calamity

It is little wonder then that the Conservatives are under acute pressure to revise their trading arrangements with the EU in order to re-open access the European single market. But it seems likely that – at least for the time being – Brexit ideology will not allow any serious recognition of the economic reality.    …

Trebles all round!

Trebles all round!

This week, the Labour front bench, in a trinity of acts, supported the autumn statement and thus austerity in principle, criticised Tory immigration policy on the grounds of competence and repeated their promise to not join the EU, its single market, or adopt the EU’s freedom of movement in the next parliament (if they win).

The inconvenient truth is that the UK economy needs unskilled EU workers to do the work, It’s not the net fiscal impact that’s the issue. We have a massive labour shortage, we need migrants to do the work, it’s about the output. It’s not all highly skilled work as we define it either, it’s hospitality, agriculture, and health care. And today we define highly skilled as highly paid; even if only the highly skilled were desirable, they are not synonymous.

I have thought long and hard to find a way of compromising with those who want to pander to racists on free movement, and I can’t find a way of doing it while solving both the macro-economic problems and remaining true to our internationalist principles. All this “control immigration” or a fair “points based” immigration policy which involves stopping people is just pandering to racism.

Differentiating from the Tories on competence is morally vacant.

Accepting the debt fetishism at the heart of the Tories “New Economic Policy” is also morally vacant, and self defeating, you can’t cut your way to growth and austerity causes poverty, homelessness and is killing the NHS. Labour’s next manifesto and government must offer hope. They will lose votes from Corbyn’s voting coalition, and as far as I can see it’s deliberate.

You’d think they’d learn that voters always have somewhere else to go! Some demographics, historically Labour voters, are choosing to vote Tory.  …

Where’s prudence gone?

Where’s prudence gone?

While reading Simmon Hannah’s “A party with socialists in it”, I made a note to talk about Corbynism and Modern  Monetary Theory. I am writing an omnibus, review of that book, but think that a further note on MMT and its role in Corbynism, and the insights and weaknesses it brings to today's crisis might be appropriate. In 2015, Corbyn flirted with MMT but by 2017, McDonnel, Meadway and Wren Lewis had won control of the Party’s economic agenda. The rest of this article looks at the bond market disruptions, FX and the balance of trade, the threat to pension funds, and the extent to which MMT has some useful insights. For more, check out overleaf behind the "Read More" button. ...

Crisis, what crisis!

Crisis, what crisis!

Some aspects of this are hard to understand, here's my attempt. The UK has been in a balance of trade deficit for decades. For most countries it is the main factor in determining foreign exchange rate between sterling (GBP) and other currencies. In the case of the UK, there is significant additional incoming flows buying sterling quoted stocks, bonds and gilts. Sterling has been falling ever since Brexit, in my mind as a result of a drop in confidence due to Brexit and the growing relevance of the balance of payments deficit; the fear of inflation has added to that recently. This article looks at the history of bond prices and interest rates and warns that increasing interest rates may cause mortgage defaults. I conclude, "A triple whammy of inflation, pension losses, and mortgage payment increases, suddenly the UK seems a lot poorer than it was. " The full article and diagrams can be seen overleaf ...

Promises from Rachel Reeves

Promises from Rachel Reeves

Conference was addressed then by Rachel Reeves, the Shadow Chancellor. ( video | text ). I have used diigo to mark out the exciting quotes from the text. The rest of this post is from my contemporaneous notes.

She started by promising to be Britain’s first green chancellor and promises net zero carbon for electricity by 2030. She promises a real living minimum wage, resurrecting NEDC, where Govt, business and the unions can talk about the economy. She promises that business subsidies will be training focused, business rates are to be abolished to allow the high street to compete with their online competitors, although I wonder where local authority income will come from.

She promised a new sovereign wealth fund, forty years too late, but that’s not her fault.

She spoke of responsible finance, and I add that while I wasn’t so concerned last week, a stricter approach may be needed now that the debt to GDP is nearing 150%. We all need to remember that only growth can reduce debt, but she did promise “No return to austerity”.

She finished the speech with a full and comprehensive promise to invest in NHS jobs, to which I say good, but ask who’s going to do them; many of the vacancies are Brexit related as nurses, cleaners, doctors and research scientists have gone home to Europe and won’t return until the hostile environment is repealed.

She briefly mentioned the plan to ‘Fix Brexit’, which gives me the excuse to repeat or preview that on immigration and labour supply, they have a cakeist view, but left hanging is that she recognised our loss of competitive advantage in science and bioscience, underling the urgency with which we have to rejoin Horizon Europe.

She was silent on currency, and some may consider the plan a version of autarky. It’s a bit hard to judge from a 35 minute speech. …

On the Economy

On the Economy

The bulk of motions on the economy were tabled by Unions, and focused on wages, infrastructure and working rights. Several of the Union motions call for renationalisation of the basic utilities, mail and rail, but not gas or water. I wrote a speech but wasn’t called. This is sort of what I planned to say.

“We are in an economic crisis, a crisis of living standards and possibly the first one caused by a government since the discovery of … Keynesianism.

Reinforced by Brexit, we have declining inward investment, the highest inflation in a decade, imports are up, exports catastrophically down, we have a possibly unsustainable balance of payments deficit again, it’s been in deficit for decades and a labour shortage impacting agriculture, social care, and the NHS and also stagnating wages.

The currency is taking a fall due to confidence, this increases the price of energy and food.

My dad, once said to me, that, “governments take thousands of decisions every day and under the Tories everyone is wrong”. it is not enough to seek to get only some of these decisions right, to compete with this ERG government on the basis of competence allied to debt fetishism. We need to offer hope and then deliver on that promise.

One thing that Kier Starmer has right is the growing anger that hard work is not enough to allow an even reasonable standard of living. it is a struggle to pay for rent or a mortgage and heat one’s home and even, although I hate the phrase put food on the table. We must offer people hope of a better economy and society.

I finish by saying this is a crisis caused by this Brexit government and planning to fix it neither offers hope nor is truthful.

Flirting with monetarism and offering little hope on even trade friction with the European Union jeopardises the loyalty of many of those who voted for us in 2017 & 2019.

Dave Levy, from my notes

Apart from the attempt to fix Brexit, I think we’ll offer more than I had feared. …

A short note on FX & UK Trade

A short note on FX & UK Trade

Like many, I am considering the macro drivers of the cost of living crisis and I listened to the AEIP podcast with Gary Stevenson. He has an interesting view and argues that the QE funded furlough scheme was in fact a subsidy to the rich and that the fundamental imbalance in the country is the shift of wealth from poor to rich. It’s a version of the argument that the problem is insufficient demand being caused by the continued pressure on medium and low incomes.

He also argues that the massive QE efforts are an effective devaluation which given the relative stickiness of prices with wages being the slowest to change and everything that wages need to buy increasing will exacerbate the squeeze on spending. He also argues that given the choice between working and starving, people will work. The use of the word devaluation led me to look at the following charts

GBP:USD FX from Google Finance

The pound has been falling against the dollar all year, this makes imports, particularly of Oil, but also of Gas and food more expensive.

Balance of Trade: GBP millions

Here we see the balance of trade figures, a more traditional cause of devaluations. With the exception of two months, the UK has been in deficit for the last five years. There are those who contest the the balance of trade causes currency price movements and Sterling in particular is impacted by speculative currency flows. The key drivers of speculation are expected rate of return, which for fixed income assets is driven by the bank rate, and animal spirits about which I think it best not to comment.  …

Are freeports a bad thing?

Are freeports a bad thing?

There’s some pretty cataclysmic stuff being written about the Freeport/Charter City initiatives. I have had a quick poke around and made this, these notes on my wiki. I think the more cataclysmic predictions are not on the table although it’ll be interesting to see what happens in London Gateway wrt to Amazon , the minimum wage and union recognition. The Baker St. Herald is also on the case, documenting the ideological genesis of the idea of Charter Cities and the powerful network of libertarian billionaires pushing them and their [un]desirable end goals. The Institute of Government seems more sanguine and I note that the Economist article says that they lead to a ‘beggar my neighbour’ policy i.e. that the economic activity they generate is more likely to have come from elsewhere inside the [sterling] customs union.

From the Economist, I draw the conclusion that this is a Tory levelling up/regional policy substituting the market for local government/public money. We should also note that levelling up/regional policy is hard, no UK government has been successful for decades and that the ability to deliver one is more difficult outside the EU/Horizon Europe and having lost the EU levelling up funds.

Freeports basically minimise import duties, they are designed to aid manufacturing to allow them to import raw materials more cheaply and not pay tax on the goods twice i.e. once on the way in and once on the way out, if they are to be exported. While having a freeport in Newcastle may make sense for Nissan, I am unclear how one in London will help the UK’s lawyers and management consultants.

I have two conclusions, for those who think that Freeports will damage local democracy, the issue threatening local democracy is money. The Government are squeezing local government budgets to the extent that some are going under, and others are reduced to performing statutory tasks only. The second is that this Brexit Government has admitted that it cannot install the legally required import tax collection system on EU imports; I wonder if Freeports are a means of disguising yet another Brexit failure.  …