Infrastructure conference in Westminster Tuesday 24th

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A new organisation called NEKS (for “New Economic Knowledge Services”, see www.neks.ltd) is holding its inaugural conference on the economics of infrastructure In Westminster on Tuesday January 24th, and you should attend.

Why NEKS, and why Infrastructure? The economic importance of infrastructure is obvious, but the actual performance of infrastructure often differs radically from what is predicted when it is being planned. Three forms of delusion make many infrastructure projects far less beneficial than expected by their proponents: the complexity of execution is underestimated, the benefits are overestimated, and benefits are also calculated poorly using dodgy economic theory.

These are precisely the sort of issues that NEKS was formed to address. NEKS’s objective with this conference is to provide a real understanding of how complexity and uncertainty—including the impact of actual human behaviour and institutions—affect large public infrastructure projects. These issues are simply not adequately considered by the current “cost-benefit” method of evaluating projects, which relies heavily on mainstream economic concepts of marginal cost and marginal utility.

For example, HM Treasury’s supplement to The Green Book (the bible for evaluating government projects) talks about the need to consider ‘non-marginal economic impacts’ (which is almost the whole point of infrastructure investment), and to take into account ‘endogenous preferences’ (the fact that people change their micro behaviour when the macro world changes around them). This supplement followed the debacle over HS2, when the purported strategic case based on transforming northern economies was totally divorced from the evaluation of economic benefits, which were based mainly on trying to quantify the increased utility experienced by lots of people saving bits of time travelling.

Both Trump and May are portraying themselves as “infrastructure leaders”, but they will only prove to be so if their projects work and deliver on time. The chances that they will instead be White Elephants, delivered too late with inadequate or even negative returns, are high unless the real-world complexities of developing and delivering infrastructure are properly considered.

NEKS’s conference at the premium County Hall venue in Westminster will take a real-world look at the UK’s infrastructure plans. Vince Cable, the lead minister for industrial strategy in the Coalition Government and an advocate for new economic thinking, will kick off the conference. A Minister should speak about infrastructure and the Government’s freshly minted industrial strategy Green Paper. Ann Pettifor, who successfully led the Jubilee 2000 campaign to forgive the debts of the world’s poorest countries, will speak about the financing implications of infrastructure.  Bridget Rosewell, a National Infrastructure Commissioner and definitely a new economic thinker, will be giving a keynote.  The ever controversial hedge fund manager and Hayek fan, Crispin Odey, will add contrarian spice to proceedings (he was one of the few people who saw the Crash coming….. and shorted it).

There will be an interesting combination of creative, strategic and analytical thinkers attending from many areas of life to discuss these issues with.

If you’ll pardon the pun, I am keen that as many of you that follow this blog and understand the need for new economic thinking, are there and I’ve persuaded NEKS to offer a 50% discount on the cost of the conference. Go here to get more information. I will definitely be there from 2pm onwards (teaching responsibilities prevent me attending for the whole day). I hope to see you there.

 

About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.
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32 Responses to Infrastructure conference in Westminster Tuesday 24th

  1. Willy2 says:

    – I don’t necessarily welcome spending on NEW infrastructure. Because every kilometer/mile of new road/railtrack costs A LOT OF money to build. But after a few years that extra kilometer/miles of new road/railtrack requires maintenance that also costs lots of money. In other words, with every new kilometer/mile of road/railtrack the amount of maintenance costs go up at the same rate.
    – The biggest benefit of spending money on infrastructure in the current situation will be to repair a lot of infrastructure. And in the US & UK there’s A LOT OF maintenance highly overdue.

  2. Bhaskara II says:

    @ Prof. Keen:

    RE: Looking for central London venue to launch my new book “Can we avoid another financial crisis?” in early April. Tweet if you can help

    What about the British Library?

    “Events and Conferences at the British Library

    Our Conference Centre offers unique and flexible meeting and event spaces right in the heart of Kings Cross.

    Providing facilities for up to 255 guests, our spaces accommodate all types of events from smaller board meetings, business interviews and private dinners to larger conferences, product launches and private screenings.

    For more information visit the British Library Conference Centre pages.
    – See more at: http://www.bl.uk/food-and-drink/cafes-and-restaurants#sthash.pEqZaJbv.dpuf

    Quoted from
    http://www.bl.uk/food-and-drink/cafes-and-restaurants

  3. Bhaskara II says:

    @Prof. Keen:

    They have your book. You might leave them a copy of your new one.

    http://explore.bl.uk/primo_library/libweb/action/search.do?dscnt=1&dstmp=1484875690843&vl(freeText0)=9781848139930&vid=BLVU1&fn=search&fromLogin=true

    I found it using worldcat.org, a merging of library catalogs around the world.

  4. Bhaskara II says:

    RE: Not sun circling but earth rotate.

    Ever wonder how to orient a sundial and what angle the gnomon or style is? This photo demonstrates it well.

    http://www.twanight.org/newtwan/guests_photos.asp?ID=5001887&Nav=Next

    The stile points parallel to the earth’s rotational axis, almost the same as the direction of Polaris. The angle of the stile (and Polaris) is also equal to the latitude of the location in the Northern hemisphere.

    https://en.wikipedia.org/wiki/Gnomon

  5. Bhaskara II says:

    And, this photo shows at Latitude zero Polaris is on the horizon. (At the north pole it is at the zenith.)

    http://www.twanight.org/newtwan/photos.asp?ID=3005634&Sort=Region

  6. Bhaskara II says:

    “Second, this is my belief. Entrepreneurs and business people are the scientists of the economy. It’s not the government officers. It’s not an economist. It is the business. It’s the entrepreneurships; they are the scientist of the society’s economy.” —Jack Ma

    CNBC Transcript: Jack Ma, Executive Chairman and Founder of Alibaba Group
    Friday, 2 Sep 2016
    http://www.cnbc.com/2016/09/02/cnbc-transcript-jack-ma-executive-chairman-and-founder-of-alibaba-group.html

    ‘ “You’re supposed to spend money on your own people,” Ma said. ‘

    —- “Chinese billionaire Jack Ma says the US wasted trillions on warfare instead of investing in infrastructure”
    Wednesday, 18 Jan 2017
    http://www.cnbc.com/2017/01/18/chinese-billionaire-jack-ma-says-the-us-wasted-trillions-on-warfare-instead-of-investing-in-infrastructure.html

  7. Bhaskara II says:

    A story on how the global Woman’s March started.

    (The names of at least one of the characters are interesting.)

    “The Women’s March: Maui Post Heard ‘Round the World ”
    http://hawaiipublicradio.org/post/womens-march-maui-post-heard-round-world

    “Who started the march? One woman”
    http://www.latimes.com/nation/la-na-pol-womens-march-live-who-started-the-march-one-1485033621-htmlstory.html

  8. Bhaskara II says:

    ‘ The Women’s March on Washington all started with a Facebook invite. And Shook, a resident of Hawaii who goes by “Maui cooper slim” online, is the women who started it all with the click of a button.

    Frustrated by the 2016 election results, Shook invited 40 of her friends to a March on Washington. When she awoke the next morning 10,000 additional names had joined the group and there were 10,000 interested in coming.

    Did Shook foresee this all culminating in Saturday’s march? “I hoped but no,” Shook said. “That night I just did it because it made me feel better in the moment. I hoped that people would get on board.”

    With a D.C. crowd estimated at 500,000 and more than 600 marches around the country, clearly they did. ‘

  9. ken says:

    It doesn’t help that in Australia we seem to be getting the worlds most expensive infrastructure projects. I expect that construction companies able to do large projects and the major unions are both doing well. Much easier for governments to just borrow and ignore the cost rather than start managing.

  10. Bhaskara II says:

    “The new legislation calls for more than doubling minimum salary of H-1B holders to $130,000, which will make it difficult for Indian firms to send workers under the visa.”

    http://www.thehindu.com/business/markets/IT-stocks-slump-on-worries-of-stricter-H-1B-visa-rules/article17121758.ece

    Some of the the problems engineers face:

    1. Geographic concentration of engineering jobs.
    a. Moving away from family.

  11. Bhaskara II says:

    Yeah, like that will ever see the light of day! That would have to go through both houses of congress they make the laws H-1B included. If it did it would be quashed within a month.! If so that would be a great time to be a land lord!

    Sorry I was going to go into the numerous problems of what is billed as an engineering “career” in the US. But, I will skip it.

    I mistakenly posted before I decided abandoned that subject.

  12. Bhaskara II says:

    The danger of discussing H1-B visas is half haphazardly falling for it’s purposes and previous and current practice of dividing and conquering the work force! Don’t fall for it, it is important to work together!

    If you have any doubt look at the immigration labor history of the robber barons of the past. The similarities with today are amazing. That way you can look at it without any personal involvement because you were not involved. If I remember rightly one of the tactics were native and immigrant groups in corporations were separated and made to compete against or abuse the each other.

    If you are an American engineer. There will always and have always been a flow of talented immigrant engineers. So, the better welfare for them(us) the better welfare for American engineers. That is why, a while back, in answer to false claims of shortages and a correct claim of the country getting such talented engineers, I suggested immigrant engineers should be given citizenship outright. As, “they” would become “us”, command better pay and be free agents an not be treated as indentured servants. Thus lifting the boat for all.

  13. Bhaskara II says:

    “Ironically the vigorous claims of shortages concern occupations in science and engineering, yet manage to ignore or reject most of the science-based evidence on the subject. The repeated past cycles of “alarm/boom/bust” have miscalculated public and private resources by periodically expanding higher education in science and engineering beyond levels for which there were attractive career opportunities. In so doing they produced large unintended costs for those talented students who devoted many years of advanced education to prepare for careers that turned out to be unattractive by the time they graduated, or who later experienced massive layoffs in mid-career with few prospects to be rehired.”

    I hate to have quoted “The Atlantic” but I they put so much in one paragraph.
    https://www.theatlantic.com/education/archive/2014/03/the-myth-of-the-science-and-engineering-shortage/284359/

    I am seeing other countries do the same thing, but worse.

  14. Tim Ward says:

    Congratulations, Bhaskara II.

  15. Bhaskara II says:

    Congratulations for what, Tim Ward?

  16. Bhaskara II says:

    https://www.govtrack.us/congress/bills/115/hr670 As of Jan 24, “he ext is not available.
    —-Zoe Lofgren
    Representative for California’s 19th congressional district
    Democrat

  17. Tim Ward says:

    What is infrastructure? My idea of infrastructure is beyond the roads, bridges, ports, airports, rails, canals, water, utilities, …

    For me, scientific, technical, engineering and other research and the buildings equipment education etc required are also infrastructure.

    For example, professor Keen’s modelling software system fits into this, and it can be publicly supported. From that, and many other types of research, biochemical, electronic, medical, materials, etc results arise that propel new insights, new ideas and economic development. Now that we are in a high productivity economic system, we should include infrastructure development that will be where the cutting edge will be for new development and new discoveries. And new opportunities for infrastructure will also appear. Growth doesn’t have to be size, it can be knowledge. Intellectual capital. Human capital.

  18. Bhaskara II says:

    RE: Example of a how a bank increased it’s capital. (Italian bank)

    What, when, where, why, and how:

    Unicredit bank of Italy just sold 13 new shares for every existing 5 old shares at a discount. They were sold as a subscription I think to the previous share holders for near 8 euros a share.

    The stock price on the market dropped from 26 per share to near 13 per share.

    This dilutes the share holders but raises money thus saving the bank and the depositors for now.

    Capital had fallen, accounting wise, because they had expensed assets on the books from the historical cost to a new estimated current value.

    This is after a run up in stock price after the Italian referendum vote of no and talking up their strategy for raising capital. I do not see stories on how much would be expensed.

    https://www.thestreet.com/story/13975948/1/unicredit-shares-drop-after-unveiling-steeply-discounted-rights-price.html
    Click 6 month stock price chart:
    https://www.google.com/finance?q=BIT%3AUCG&ei=rihmWIiRMdaejAGdnpbQAw

  19. Bhaskara II says:

    More on why:
    Capital ended up low and there is a non performing loan problem. They have reduced staff and will also be selling non performing loans.

  20. Bhaskara II says:

    An other heliocentric theorist:

    Aristarchus of Samos (/?ær??st??rk?s/; Greek: ?????????? ? ??????, Aristarkhos ho Samios; c. 310 – c. 230 BC)

    https://en.wikipedia.org/wiki/Aristarchus_of_Samos
    https://www.britannica.com/biography/Aristarchus-of-Samos

  21. Bhaskara II says:

    RE: A Universal Basic Income Experiment in Finland

    “s Finland’s basic universal income a solution to automation, fewer jobs and lower wages?

    Both left and right are promoting the idea of a basic wage for everyone, currently on trial, as a solution to the new world of work

    ‘ “For me, it’s like free money on top of my earnings – it’s a bonus,” he tells me. But he thinks the basic income will make a big difference to others who are unemployed, especially those who are entrepreneurially minded. “If someone wants to start their own business, you don’t get unemployment benefits even if you don’t have any income for six months. You have to have savings, otherwise it’s not possible.” ‘

    Ha ha. Fire your employees and they might become capitalists like you!

  22. Bhaskara II says:

    ‘When he got the letter after Christmas saying he was entitled to an unconditional income of €560 (£478) a month, Mika Ruusunen couldn’t believe his luck. “At first I thought it was a joke. I had to read it many times. I looked for any evidence it might be false.” ‘

    So it is an actual economic experiment and the data will be available in the future.. The article mentioned that the previous benefit system discourages people from earning part time money and starting business. I could not read the whole of the article, just the top. I don’t know why it is so long.

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