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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  • Willy2

    - 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.

  • Bhaskara II

    @ 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

  • Bhaskara II

    @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.

  • Bhaskara II

    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

  • Bhaskara II

    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

  • Bhaskara II

    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

  • Bhaskara II

    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

  • Bhaskara II

    ’ 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. ’

  • ken

    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.

  • Bhaskara II

    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.

  • Bhaskara II

    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.

  • Bhaskara II

    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.

  • Bhaskara II

    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.

  • Bhaskara II
  • Tim Ward

    Con­grat­u­la­tions, Bhaskara II.

  • Bhaskara II

    Con­grat­u­la­tions for what, Tim Ward?

  • Bhaskara II
  • Bhaskara II

    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

  • Tim Ward

    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.

  • Bhaskara II

    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

  • Bhaskara II

    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.

  • Bhaskara II
  • Bhaskara II

    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

  • Bhaskara II

    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!

  • Bhaskara II

    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.