Sunday, December 31, 2006
Something to celebrate in 2007
It looks certain that some time in the coming year the number of city-dwellers will exceed the number of those who live in the countryside. It will be the first time in human history that most of the world’s population will be urban.
According to an article in today’s Independent a report from the Worldwatch Institute in January and one from the UN Population Fund, due out in the summer, will discuss this trend. This follows an earlier report published by the United Nations in 2006 on the same subject.
No doubt many critics will condemn this development as creating a “planet of slums” (to use Mike Davis’s phrase). But in reality the trend to greater urbanisation is closely related to economic development. People tend to move to the cities as they will enjoy a better life there than living an isolated existence in rural poverty.
According to an article in today’s Independent a report from the Worldwatch Institute in January and one from the UN Population Fund, due out in the summer, will discuss this trend. This follows an earlier report published by the United Nations in 2006 on the same subject.
No doubt many critics will condemn this development as creating a “planet of slums” (to use Mike Davis’s phrase). But in reality the trend to greater urbanisation is closely related to economic development. People tend to move to the cities as they will enjoy a better life there than living an isolated existence in rural poverty.
Labels: cities, development
Saturday, December 30, 2006
Blaming climate change for everything
The Christian Science Monitor provides a typical example of how an increasing number of problems are being viewed through the prism of climate change. An article on Uganda looks at recent conflicts between the semi-nomadic Karimojong and the Ugandan army. It goes on to quote an environmentalist activist as if she was a neutral expert:
“With more people forced to share fewer resources, experts warn that conflict will increase. ‘Climate change will hit pastoral communities very hard,’ says Grace Akumu, executive director of environmental pressure group Climate Network Africa. ‘The conflict is already getting out of hand and we are going to see an increase in this insecurity.’ “
She goes on to argue that it is the West, and particularly America, that is to blame. If only they had signed global protocols to reduce greenhouse gas emissions.
Her argument is based on several dubious assumptions:
* By far the biggest error is that holding that without global warming there would be no conflict. But the problem of scarce resources, particularly in a poverty-stricken country like Uganda, would exist in any case. What the country desperately needs is economic development to enrich its people and make it less prone to environmental problems.
* It assumes that global warming has already had a substantial impact on Uganda. This needs to be proved rather than assumed.
* It is taken as given that the Kyoto protocol, if successfully implemented, would make a significant difference to the warming trend. There are good reasons to question this argument too.
“With more people forced to share fewer resources, experts warn that conflict will increase. ‘Climate change will hit pastoral communities very hard,’ says Grace Akumu, executive director of environmental pressure group Climate Network Africa. ‘The conflict is already getting out of hand and we are going to see an increase in this insecurity.’ “
She goes on to argue that it is the West, and particularly America, that is to blame. If only they had signed global protocols to reduce greenhouse gas emissions.
Her argument is based on several dubious assumptions:
* By far the biggest error is that holding that without global warming there would be no conflict. But the problem of scarce resources, particularly in a poverty-stricken country like Uganda, would exist in any case. What the country desperately needs is economic development to enrich its people and make it less prone to environmental problems.
* It assumes that global warming has already had a substantial impact on Uganda. This needs to be proved rather than assumed.
* It is taken as given that the Kyoto protocol, if successfully implemented, would make a significant difference to the warming trend. There are good reasons to question this argument too.
Labels: Africa, America, climate, environment
Sunday, December 24, 2006
Bono's knighthood
If there is any doubt that Bono is an establishment figure – and there really should not be – then his honorary knighthood should erase it. Tony Blair’s open letter to the U2 lead singer, on the official Number 10 website, is particularly telling. It confirms the key role Bono played in selling the official “make poverty history” agenda to the public:
“I want personally to thank you for the invaluable role you played in the run up to the Gleneagles G8 Summit. Without your personal contribution, we could not have achieved the results we did. So thank you and I look forward to continuing to work together to maintain momentum on Africa, and ensure leaders around the world meet the promises they have made.”
Bono was awarded a Legion D'Honneur from the French government in 2003 while Bob Geldof, his follow Irish musician and anti-poverty campaigner, received an honorary knighthood in 1986 for his work with Live Aid.
“I want personally to thank you for the invaluable role you played in the run up to the Gleneagles G8 Summit. Without your personal contribution, we could not have achieved the results we did. So thank you and I look forward to continuing to work together to maintain momentum on Africa, and ensure leaders around the world meet the promises they have made.”
Bono was awarded a Legion D'Honneur from the French government in 2003 while Bob Geldof, his follow Irish musician and anti-poverty campaigner, received an honorary knighthood in 1986 for his work with Live Aid.
Labels: Africa, development
Wednesday, December 20, 2006
The Economist on happiness
The Economist’s Christmas double issue includes a comment and a special report on the debate on happiness and economics. Its comment makes the correct point, if a little coyly, that increasing affluence is immensely beneficial even though it is not guaranteed to bring joy. The special report discusses the work of some of the most prominent happiness gurus including Mihaly Csikszentmihalyi, Robert Frank, Daniel Kahneman and Richard Layard.
Tuesday, December 19, 2006
Brave New World
On rereading Aldous Huxley’s Brave New World, his dystopian novel first published in 1932, I found some fascinating contemporary echoes. Obviously Huxley was writing at the height of the Great Depression of the 1930s when it looked like capitalism was on the verge of collapse. But a society in which happiness is compulsory looks like one that New Labour yearns for today. In Huxley’s dystopia everyone is given soma, a happiness drug, and the phrase “everybody’s happy now” is repeated 150 times every night for 12 years as people sleep. If Tony Blair reads the novel he might get some nasty ideas.
Monday, December 18, 2006
My spat with George Monbiot
George Monbiot, Guardian columnist and environmental campaigner, has taken offence at my review of his book Heat in Fund Strategy (reproduced in my 13 November entry). I have published a letter to the editor which I have reproduced below. There follows my response along with an additional comment.
Dear Sir
Daniel Ben-Ami's review of my book Heat contains a number of outrageous misrepresentations. He claims that I call for "dictatorship" and "authoritarianism". This is untrue. In the introduction, I write the following:
"A 90% cut in our emissions of carbon dioxide is, I admit, an inherently narrow constraint. I did not invent it - it is what the science appears to demand. But within that constraint, we should be free to live as we wish. The need to tackle climate change must not become an excuse for central planning. The role of government must be to establish the limits of action, but to guarantee the maximum of freedom within those limits. And it must help us by ensuring that even within those constraints, life remains as easy as possible."
He goes on to suggest that I oppose projects such as carbon capture and storage. In fact I have devoted half a chapter to this technology, which I recommend. He chides me for not accepting a line now wholly discredited, by the Stern review and other reports: that efforts to prevent climate change will hurt the poor, while adapting to it, for example by moving human settlements "to higher ground", is both cheaper and more progressive.
He plainly has not read or understood the Stern review, with which he seeks to contrast my book. And I can't help wondering whether he has really read Heat.
Yours sincerely
George Monbiot
My response follows below:
It is George Monbiot who misrepresents or fails to understand my arguments.
Monbiot objects to my point that his views are authoritarian yet my review quotes his book’s conclusion explicitly calling for curbs on freedom. He says the campaign against climate change “is a campaign not for more freedom but for less”. It is also hard to see how the imposition of mass austerity that he sees as necessary could be achieved by voluntary means.
Contrary to what Monbiot asserts I do not say he opposes carbon capture and storage. Rather my point is that new forms of technology should allow society to become more prosperous while tackling climate change at the same time. My central argument is that Monbiot is wrong to claim there is a trade-off between prosperity and improving the environment. I note that he does not take up my substantial point in his letter.
Nor do I argue that efforts to prevent climate change necessarily hurt the poor. My point is that becoming richer puts humanity in a better position to mould the environment to its advantage. Moreover even the Stern review, for all its flaws, sees a key role for adaptation in tackling climate change.
As for whether I have read or understood Stern, readers can read my cover story in last week’s Fund Strategy and judge for themselves.
Daniel Ben-Ami
If I had more space I would have taken up Monbiot’s Orwellian notion of freedom with constraints imposed by natural science. To me this, more than anything else, opens the way for the authoritarian measures that he proposes.
It should also be noted that and the need for austerity and curbs on democracy are recurring themes in his work. See my review of his The Age of Consent – there is a link on the bar on the left of this site.
Dear Sir
Daniel Ben-Ami's review of my book Heat contains a number of outrageous misrepresentations. He claims that I call for "dictatorship" and "authoritarianism". This is untrue. In the introduction, I write the following:
"A 90% cut in our emissions of carbon dioxide is, I admit, an inherently narrow constraint. I did not invent it - it is what the science appears to demand. But within that constraint, we should be free to live as we wish. The need to tackle climate change must not become an excuse for central planning. The role of government must be to establish the limits of action, but to guarantee the maximum of freedom within those limits. And it must help us by ensuring that even within those constraints, life remains as easy as possible."
He goes on to suggest that I oppose projects such as carbon capture and storage. In fact I have devoted half a chapter to this technology, which I recommend. He chides me for not accepting a line now wholly discredited, by the Stern review and other reports: that efforts to prevent climate change will hurt the poor, while adapting to it, for example by moving human settlements "to higher ground", is both cheaper and more progressive.
He plainly has not read or understood the Stern review, with which he seeks to contrast my book. And I can't help wondering whether he has really read Heat.
Yours sincerely
George Monbiot
My response follows below:
It is George Monbiot who misrepresents or fails to understand my arguments.
Monbiot objects to my point that his views are authoritarian yet my review quotes his book’s conclusion explicitly calling for curbs on freedom. He says the campaign against climate change “is a campaign not for more freedom but for less”. It is also hard to see how the imposition of mass austerity that he sees as necessary could be achieved by voluntary means.
Contrary to what Monbiot asserts I do not say he opposes carbon capture and storage. Rather my point is that new forms of technology should allow society to become more prosperous while tackling climate change at the same time. My central argument is that Monbiot is wrong to claim there is a trade-off between prosperity and improving the environment. I note that he does not take up my substantial point in his letter.
Nor do I argue that efforts to prevent climate change necessarily hurt the poor. My point is that becoming richer puts humanity in a better position to mould the environment to its advantage. Moreover even the Stern review, for all its flaws, sees a key role for adaptation in tackling climate change.
As for whether I have read or understood Stern, readers can read my cover story in last week’s Fund Strategy and judge for themselves.
Daniel Ben-Ami
If I had more space I would have taken up Monbiot’s Orwellian notion of freedom with constraints imposed by natural science. To me this, more than anything else, opens the way for the authoritarian measures that he proposes.
It should also be noted that and the need for austerity and curbs on democracy are recurring themes in his work. See my review of his The Age of Consent – there is a link on the bar on the left of this site.
Labels: book, climate, environment, Fund Strategy
Wednesday, December 13, 2006
Cover story on climate change economics
This week Fund Strategy published a cover story by me on the economics of climate change. Unfortunately it is too long to fit on this blog and there is no direct internet link. However, I have pasted one of the boxes below:
The discussion on the economics of climate change is typically steeped in the culture of precaution. Even when the language of catastrophe is eschewed - as it is in the Stern report - similar conclusions can be drawn from a precautionary approach. Essentially the idea is that because the future is so uncertain, it is necessary to be particularly cautious about the appropriate action to take. The idea that climate change could be irreversible and harmful to the whole of humanity adds weight to the precautionary approach.
Precaution was certainly built into the Stern review. In a section on "risk and uncertainty" it states: "The analytical approach [in the report] incorporates aspects of insurance, caution and precaution directly, and does not therefore require a separate 'precautionary principle' to be imposed as an ethical criterion."
To Stern, and other advocates of a precautionary approach, this outlook is based on common sense. It is akin to buying insurance for a house except, in relation to climate change, there is only one Earth. If Earth is destroyed or seriously damaged, there is no chance of moving to another planet.
But the idea of precaution is not as straightforward or positive as is generally assumed. An alternative would be to argue that a timid approach towards humanity's relationship with the environment itself entails risks. The bolder and more ambitious the development plans, the better able humans will be to control their environment. In contrast, a limited approach to development leaves humans prey to environmental changes.
Despite seemingly ambitious rhetoric elsewhere, the low horizons of Stern are apparent in its definition of sustainable development: "Future generations should have a right to a standard of living no lower than the current one." Such a miserable definition runs directly counter the experience of the past two centuries. Since about 1800 the level of output per person has risen enormously. As a result, humans have come to live longer, healthier and more fulfilling lives.
Arguably, a precautionary approach is the worst possible response to climate change. It deters humanity from developing the means to control its environment. Greater development, and more widespread prosperity, enhance the ability of humans to create a better life for themselves.
The discussion on the economics of climate change is typically steeped in the culture of precaution. Even when the language of catastrophe is eschewed - as it is in the Stern report - similar conclusions can be drawn from a precautionary approach. Essentially the idea is that because the future is so uncertain, it is necessary to be particularly cautious about the appropriate action to take. The idea that climate change could be irreversible and harmful to the whole of humanity adds weight to the precautionary approach.
Precaution was certainly built into the Stern review. In a section on "risk and uncertainty" it states: "The analytical approach [in the report] incorporates aspects of insurance, caution and precaution directly, and does not therefore require a separate 'precautionary principle' to be imposed as an ethical criterion."
To Stern, and other advocates of a precautionary approach, this outlook is based on common sense. It is akin to buying insurance for a house except, in relation to climate change, there is only one Earth. If Earth is destroyed or seriously damaged, there is no chance of moving to another planet.
But the idea of precaution is not as straightforward or positive as is generally assumed. An alternative would be to argue that a timid approach towards humanity's relationship with the environment itself entails risks. The bolder and more ambitious the development plans, the better able humans will be to control their environment. In contrast, a limited approach to development leaves humans prey to environmental changes.
Despite seemingly ambitious rhetoric elsewhere, the low horizons of Stern are apparent in its definition of sustainable development: "Future generations should have a right to a standard of living no lower than the current one." Such a miserable definition runs directly counter the experience of the past two centuries. Since about 1800 the level of output per person has risen enormously. As a result, humans have come to live longer, healthier and more fulfilling lives.
Arguably, a precautionary approach is the worst possible response to climate change. It deters humanity from developing the means to control its environment. Greater development, and more widespread prosperity, enhance the ability of humans to create a better life for themselves.
Labels: climate, economics, environment, Fund Strategy, sustainability
Me on spiked on household debt
Yesterday spiked published an article by me about the panic on household debt levels in Britain. To read the piece click here.
Tuesday, December 12, 2006
China switches to higher-value goods
There follows a comment by me on Chinese economic development from the 11 December issue of Fund Strategy.
One of the few interesting things in Gordon Brown's generally dull pre-Budget report speech was his reference to China. He started with some figures that will not be a surprise to anyone who follows the economic fortunes of the Asian giant: "China alone is manufacturing half the world's computers, half the world's clothes and more than half the world's digital electronics, and this Christmas, more than 75% of children's toys."
He went on to recognise that China is increasingly competing on quality as well as quantity. As an indicator, Brown used the massive number of engineers and computer scientists graduating from Chinese universities.
The existence of this trend is underlined by a report from the Organisation for Economic Cooperation and Development, published last week. It shows that in absolute terms, China looks set to become the second-largest spender on research and development in the world. America is set to spend $330bn (£168bn), China $136bn and Japan $130bn. The EU15 - which includes Britain - looks set to spend a combined $230bn.
On other measures too China's R&D effort is increasing. As a proportion of GDP it increased from 0.6% in 1995 to more than 1.2% in 2004. China has the second-highest number of researchers in the world, at 926,000, compared with more than 1.3 million in America.
Another indication of China's growing economic sophistication is its increasing concern with intellectual property rights. As Stephen Roach, chief economist at Morgan Stanley, wrote last week: "There is a key reason for this shift: Inasmuch as China's economic prowess has moved rapidly up the value chain in recent years - from low-value-added items such as toys and textiles to increasingly high-valued-added products - there is a growing consensus forming within the Chinese leadership that IPR protection is now in its best interest." (Morgan Stanley, Global Economic Forum, December 4, 2006).
When Hank Paulson, the US treasury secretary, leads a delegation to trade talks with China this week he will be aware of such shifts. America can no longer look down on China as a minor player in the world. For the rest of the world too it is necessary to grapple with the reality of a sophisticated, as well as large, China. Although China is still a developing nation, it is already playing a large role in shaping global economic and financial affairs.
One of the few interesting things in Gordon Brown's generally dull pre-Budget report speech was his reference to China. He started with some figures that will not be a surprise to anyone who follows the economic fortunes of the Asian giant: "China alone is manufacturing half the world's computers, half the world's clothes and more than half the world's digital electronics, and this Christmas, more than 75% of children's toys."
He went on to recognise that China is increasingly competing on quality as well as quantity. As an indicator, Brown used the massive number of engineers and computer scientists graduating from Chinese universities.
The existence of this trend is underlined by a report from the Organisation for Economic Cooperation and Development, published last week. It shows that in absolute terms, China looks set to become the second-largest spender on research and development in the world. America is set to spend $330bn (£168bn), China $136bn and Japan $130bn. The EU15 - which includes Britain - looks set to spend a combined $230bn.
On other measures too China's R&D effort is increasing. As a proportion of GDP it increased from 0.6% in 1995 to more than 1.2% in 2004. China has the second-highest number of researchers in the world, at 926,000, compared with more than 1.3 million in America.
Another indication of China's growing economic sophistication is its increasing concern with intellectual property rights. As Stephen Roach, chief economist at Morgan Stanley, wrote last week: "There is a key reason for this shift: Inasmuch as China's economic prowess has moved rapidly up the value chain in recent years - from low-value-added items such as toys and textiles to increasingly high-valued-added products - there is a growing consensus forming within the Chinese leadership that IPR protection is now in its best interest." (Morgan Stanley, Global Economic Forum, December 4, 2006).
When Hank Paulson, the US treasury secretary, leads a delegation to trade talks with China this week he will be aware of such shifts. America can no longer look down on China as a minor player in the world. For the rest of the world too it is necessary to grapple with the reality of a sophisticated, as well as large, China. Although China is still a developing nation, it is already playing a large role in shaping global economic and financial affairs.
Labels: china, development, economics, Fund Strategy
Sunday, December 10, 2006
Science versus Superstition
A new pamphlet from Policy Exchange, an independent think tank, puts the case for a scientific enlightenment. Science versus Superstition, edited by Jim Panton and Oliver Marc Hartwich, includes chapters on the precautionary principle, the anti-nuclear movement and climate change. It can be downloaded from the internet: here.
Labels: climate, environment, science
Friday, December 08, 2006
The Economist versus ethical food
This week’s Economist (9 December) includes some useful criticisms of the idea of “ethical food” while also making unnecessary concessions. It points out that organic food is far less intensive than traditional agriculture; so therefore more expensive and able to feed fewer people. Fairtrade discourages farmers from diversifying and local food often uses more energy than that produced a long way away. However, it is untrue that the ethical food movement aims to encourage development while there is nothing inherently positive about protecting the environment. The final conclusion, that only politics rather than ethical consumption can bring change, is certainly correct.
Wednesday, December 06, 2006
Brown promotes unhealthy climate
Today’s pre-budget report from Britain’s Treasury gives some indication of how climate change policy is likely to unfold. Policies designed to encourage behaviour modification, such as green taxes, will be quickly implemented while initiatives to develop new technology will be minimal. Among the measures discussed in Gordon Brown’s speech to parliament:
* Air passenger duty will be doubled from 1 February. For three-quarters of journeys the rise will be £5 to £10. So the government will continue its policy of punishing those who travel abroad.
* Fuel duty will increase by 1.25 pence per litre.
* Within 10 years every new home will be “zero carbon”. Given that so few new homes are built in Britain this new measure may not amount to much. But what is a “zero carbon” home? Surely it cannot be one that uses no electricity or has no hot water? Then again given Brown’s passion for austerity …
* Brown confirmed the government will spend £550m on an Environmental Technology Institute (as far as I can gather the money will be spent over 10 years or more). As Anatole Kaletsky, an associate editor of the Times (London), has argued this is a pitiful amount for a government that claims climate change is the top challenge facing humanity.
* Along similarly meagre lines Britain and Norway are launching a “feasibility study” to investigate the possibility of capturing carbon emissions and storing them under the North Sea.
* Brown said the government’s aim was “to make London the world’s leading centre for carbon trading”. This is one pledge where the government’s sincerity cannot be doubted. If there is an area where Britain leads the world it is in financial speculation.
* Air passenger duty will be doubled from 1 February. For three-quarters of journeys the rise will be £5 to £10. So the government will continue its policy of punishing those who travel abroad.
* Fuel duty will increase by 1.25 pence per litre.
* Within 10 years every new home will be “zero carbon”. Given that so few new homes are built in Britain this new measure may not amount to much. But what is a “zero carbon” home? Surely it cannot be one that uses no electricity or has no hot water? Then again given Brown’s passion for austerity …
* Brown confirmed the government will spend £550m on an Environmental Technology Institute (as far as I can gather the money will be spent over 10 years or more). As Anatole Kaletsky, an associate editor of the Times (London), has argued this is a pitiful amount for a government that claims climate change is the top challenge facing humanity.
* Along similarly meagre lines Britain and Norway are launching a “feasibility study” to investigate the possibility of capturing carbon emissions and storing them under the North Sea.
* Brown said the government’s aim was “to make London the world’s leading centre for carbon trading”. This is one pledge where the government’s sincerity cannot be doubted. If there is an area where Britain leads the world it is in financial speculation.
Labels: climate, environment
Monday, December 04, 2006
Put alarmist debate on debt into context
There follows a comment by me on household debt from the 4 December issue of Fund Strategy.
Tucked away in the latest issue of a dusty journal lies a healthy corrective to the often hysterical discussion of household debt. An article in the Organisation for Economic Cooperation and Development's Economic Outlook shows the debt situation is not nearly as serious as is often assumed.* To the extent it could become a problem, it is likely to be because of broader economic factors rather than the debt situation in itself.
Most sensationalist coverage of household debt follows a similar pattern. It starts with sensational-sounding figures on the size of the debt burden. Often it claims that debt levels are at an all-time high. Rarely is the discussion of debt put into its proper context.
For example, the fact that debt is at record levels reveals less than it seems. As the economy grows it is unusual for many indicators not to be at record levels. Economic output is usually at its highest level ever, corporate profits are generally at record highs and the economy is often more productive than ever.
Nor are figures on their own particularly revealing. The claim that personal debt in Britain is growing by £1m every four minutes sounds impressive but says little. How many people is this debt burden spread across? How high are their incomes? What assets do they have?
As with most statistics, skill is needed to ensure that comparisons are meaningful. For instance, looking at debt levels relative to GDP in an international or historical context makes more sense. It is also instructive to compare debt levels to levels of household assets. That way the overall health of household balance sheets can be properly examined.
The OECD makes several useful points to put the debt discussion into context:
* Favourable financial conditions and buoyant housing markets have bolstered household debt. In addition, financial liberalisation has meant that credit has become more widely available.
* Household wealth has risen sharply as a result of higher property values and a stockmarket recovery. In addition, home ownership rates have increased, so debt is spread across a larger number of people.
* Although debt service levels have risen, mortgage delinquency rates have trended downwards over the past decade.
* Surveys show that most debt is held by households better able to manage it.
None of this means that debt could not become a problem but if it does so it is likely to be because of broader economic factors.
Higher interest rates, falling house prices and drops in income could all turn debt into a serious economic problem. But at present, for the economy as a whole, the burden looks manageable.
* Available at www.oecd.org
Tucked away in the latest issue of a dusty journal lies a healthy corrective to the often hysterical discussion of household debt. An article in the Organisation for Economic Cooperation and Development's Economic Outlook shows the debt situation is not nearly as serious as is often assumed.* To the extent it could become a problem, it is likely to be because of broader economic factors rather than the debt situation in itself.
Most sensationalist coverage of household debt follows a similar pattern. It starts with sensational-sounding figures on the size of the debt burden. Often it claims that debt levels are at an all-time high. Rarely is the discussion of debt put into its proper context.
For example, the fact that debt is at record levels reveals less than it seems. As the economy grows it is unusual for many indicators not to be at record levels. Economic output is usually at its highest level ever, corporate profits are generally at record highs and the economy is often more productive than ever.
Nor are figures on their own particularly revealing. The claim that personal debt in Britain is growing by £1m every four minutes sounds impressive but says little. How many people is this debt burden spread across? How high are their incomes? What assets do they have?
As with most statistics, skill is needed to ensure that comparisons are meaningful. For instance, looking at debt levels relative to GDP in an international or historical context makes more sense. It is also instructive to compare debt levels to levels of household assets. That way the overall health of household balance sheets can be properly examined.
The OECD makes several useful points to put the debt discussion into context:
* Favourable financial conditions and buoyant housing markets have bolstered household debt. In addition, financial liberalisation has meant that credit has become more widely available.
* Household wealth has risen sharply as a result of higher property values and a stockmarket recovery. In addition, home ownership rates have increased, so debt is spread across a larger number of people.
* Although debt service levels have risen, mortgage delinquency rates have trended downwards over the past decade.
* Surveys show that most debt is held by households better able to manage it.
None of this means that debt could not become a problem but if it does so it is likely to be because of broader economic factors.
Higher interest rates, falling house prices and drops in income could all turn debt into a serious economic problem. But at present, for the economy as a whole, the burden looks manageable.
* Available at www.oecd.org
Labels: debt, Fund Strategy
Friday, December 01, 2006
The world is richer and healthier
The cover story of this week’s Spectator is based on fascinating-sounding research by Indur Goklany, an American economist and former delegate to the Intergovernmental Panel on Climate Change. In a book to be published by the Cato Institute he evidently argues that on every objective measure the human condition is improving. Naturally this does not mean that everything is perfect but things are, on average, much better than at any time in human history.
Labels: inequality, progress
