AI and Population

The combination of two topic problems could result in an opportunity.

1. Now that populations in most developed countries are in decline, many commentators are concerned about the economic challenges of a declining population. This is exacerbated by the fact that the only population growth is from immigration.

2.  The rapid development and engagement with Artificial Intelligence applications such as ChatGPT in 2023 raises concerns about changes to the world of work, with the prospect of wide spread unemployment.

On the bright side, if we put the two issues together we could envisage a scenario where populations do slowly decline, with all the related positive effects on the natural world, and the lost productivity is replaced by AI and other forms of automation.

Why Trump?

So Donald Trump is President and the UK elected to exit the EU - here's my take on the explanation.

Free trade and global markets has been great for growing economies in general but not everyone has been a winner. Many studies have shown that wealth at the top has increased while the base of the pyramid is wider and deeper with many feeling a sense of hopelessness.

Traditional working class jobs have been exported to cheaper labour countries with large areas of the US where coal mining, steel production, car manufacturing, etc have all closed down with devastating effects on the local economy. Things are looking rosy in New York or Silicon Valley but not so much in Detroit.

For non-graduates many of the remaining jobs are low wage, low skill and these have largely been filled by immigrants, whether they be Eastern European in the UK or Latin American in the US. The locals might not really want these jobs but they still resent the new comers getting on better than they are.

Trump and the Brexiteers openly promised to reduce immigration. It's an easy sell but this doesn't solve the problem because the locals don't really want to do the work in the low pay sector. They also hint at some protectionism as a means to bring back some of the skilled blue collar work. This could have a positive effect locally in the medium term but global economies could crash as the draw bridges rise.

Fundamentally the only way to deal with immigration is to improve standards in the poorer countries. The bigger the margin between the rich and poor countries the more tempting it is to migrate.

The US in particular enjoys the highest standards of living on the planet by some margin. The problems are not those of competition with other countries they are caused by domestic inequalities. There's more than enough wealth in the US to allow everyone a fair share but there is an inbuilt distrust of any state level attempts at wealth redistribution.

Rental Economy

The loss of council owned rented properties is responsible for the large increases in the cost of renting a home.

Council controlled rented accommodation acts as an anchor to the market. The council owns the asset for a long period and rental income just needs to cover repayments (over say 50 years), interest and maintenance.

Since property prices have always increased there is no necessity for rents to rise.

In the free market landlords are trade in their property much more frequently. Each time a property changes hands the sale price is higher and therefore the rent must increase.

If there were more council properties it would clearly show up any rip off pricing in the private market.

Since the property market is such a good investment for private landlords why isn't government more keen to be in this market? Why should government expenditure only ever be an expense an rarely an investment?

GM Foods

1. Is GM Safe?

The question "is GM food safe" is a meaningless question. Each genentic modification will have it's own impact on the species in question and also on the whole environment around it - the effects is far too complex for us to be able to predict so we will only know the full effects over time. Some modifications might well turn out to be fine, especially those that could have been achieved using selective breeding over a longer time frame. The most extreme modifications are clearly not safe and might have a catastrophic impact on the environment.

2. Who Controls GM?

Large companies invest a lot of money into genetic modifications and as a business it's important for them to make a profit. To prevent competitors using their research they apply for a patent on their modification. Once a farmer goes down the GM route they may find they are locked into buying certain fertilizers or pest control chemicals from the same company in order to get the best from their new crop. Or the supplier of GM will tie them into a contract. Some farmers have been treatened with legal action when the genetic pattern is identified on their land. There are also concerns about the fertility of some GM pigs, no-one is sure whether this is to make sure that the farmer always has to buy from the GM company.

3. Genetic Modification vs Selective Breeding

Some GM supports compare GM to an accelerated form of selected breeding. For a long time man has picked the best individuals, whether it be pigs, cows, wheat or corn and bred them together. Over a relatively long period certain characteristics can be developed such as beef cows with less fat or corn plants with shorter stalks. However, each generation of selected breeding is exposed to the effects of nature and so there is time to observe any undesirable side effects. With genetic modifications we can leap forward by adding genetic patterns from alien species. We will always run the risk of accidentally releasing a modification that has disasterous consequences - we are not always as smart as we think we are!

4. Better Safe than Sorry

Once the genie is out of the bottle it's not going to be easy to every put it back. Time and again mankind has created problems by introducing non-native species, whether it be rats in the Galapagos, rabbits in Australia or Japanese knotweed in the UK.

5. Agriculture in the Ecosystem

In the densely populated UK the vast majority of our land is used for agriculture. This means that our farms and plantation forests are very important to our ecosystem. If GM were successful in elimating weeds (a weed is just a plant growing in the wrong place) and pests (just another species trying to survive) then all the creatures up the food chain will decline. Everyone likes to see butterflys but the caterpillers are not so popular and caterpillers often need weeds such as nettles - unfortunately you can't have one without the other. Of course, it is incredibly important that we produce enough food for the UK to be reasonably independant on basic foods but we must take our fair share and allow nature her fair share too.

6. GM Can't Eradicate Hunger; Education Can

GM supporters point to the need to increase food production to feed the Third World. Two problems with GM as a solution to this; firstly there is already enough food grown worldwide it just a question of getting it in the right place without destroying local markets, secondly GM technology is expensive and very high tech. We can not solve the food problems of the Third World by getting them addicted to technology that has to be purchased from us. Education is the key; through education farmers can find their own solutions using more traditional approaches, education also has a very significant effect on population so we can avoid the vicious cycle of more food leading directly to an increased population, leading to demand for more food - especially if this food can only be grown using western technology. This will inevitably lead to disaster.

Wealth & Taxes

During the Olympics and Paralympics we have been reminded of just what a great country we live in and suddenly there is a surge of pride and optimism in what we can achieve.

Apart from our sporting prowess what else is great about the UK and what makes it a great place to do business?

Firstly I would point to our innate sense of fair play; maybe this also has something to do with our love of sport. Generally we do not tolerate unfairness in society and this had helped us create a strong legal system with laws that are generally respected and adhered to. If you gain wealth in the UK the system protects your property rights, unlike other parts of the world where you would have to keep the local police and politicians 'onside' by various other means.

Despite the many debates about our school the UK does have a well educated population. Of course improvements can be made but everyone has the opportunity to better themselves through their schooling and this is provided to everyone by the state. This means that businesses operating in the UK can draw on a well qualified workforce. There can be little doubt that a better educated population is also a less violent and more law-abiding one. Together with our state benefits, which provide a safety net, we avoid the desperation that leads to the extreme poverty, and violence seen in other parts of the world. In the UK a successful businessman generally doesn't need to hire personal security guards.

The state also provides universal services such as a routine rubbish collection service that ensures that our streets are clean and hygienic, we care about protecting our environment and maintaining a pleasant and healthy place to live.

The crown jewel of our public services, of course, is the NHS, which ensures that our population is relatively healthy. A healthy workforce is a productive workforce. Again this is provided free to everyone so we have fewer workers struggling with poor health.


Therefore businesses that operate in the UK are benefiting from a wide range of background public services that they can not be sure to get in other parts of the world, especially low wage countries and those with poor records of human rights. It is right and proper that businesses and high income individuals should pay higher taxes because they benefit most from the environment that is created by the public services.

We often hear the argument that taxes need to be lower in order to attract business to the UK or keep high wealth individuals working in the UK but how much truth is there to this argument? How many businesses could realistically move abroad and still operate in the UK market? Well none of our bricks and mortar retail business for a start - they physically need to be on the high street but Internet business can operate overseas and the government needs to clamp down on tax dodgers like Amazon. Tesco is one of our biggest businesses but they cannot leave the UK tax system and still benefit from doing business here, they cannot do business without employing British workers.

The building industry can only work from within the UK and almost all of the service industries need to be in the UK to interface with their customers. Some workers might come from other countries but this is a relatively small number and easily controlled. Some manufacturing could move overseas, indeed much of it has already done so but despite the apparent advantages of low wage labour markets several foreign companies choose to build cars in the UK.

In summary I would argue that the UK offers a great environment for businesses and business people to work and live and we should not be scared of them leaving if they don't like our system of public services and taxes on the wealthy to fund them.

Occasionally a truly unique entrepreneur emerges but generally speaking if Business A didn't exist then similar Business B would take it's niche and thrive just as well. Successful people like to think they did something special but often they were just in the right place at the right time and marginally more lucky that their competitor. We should not be scared by threats of business people flying the country - it simply won't happen because they are onto too good a thing here in the UK.

Banker's Bonuses

The outcry over large bonuses paid in the financial services sector, in particular investment banking, is understandable but the argument seems to be missing a couple of critical points;

1. we should not really be so concerned with how private businesses choose to run their affairs. What has impacted the general public is the enormous amount of money the government had to invest into the banks to avoid a terrible crisis. Steps are already under way to ensure we never have to do this again and in future poorly run banks should be allowed to go to the wall with investors taking the hit as they would in any other business.

2. no-one seems to be asking how investment banks can make such huge profits (in good times at least) that they can afford to pay such massive amounts to their staff both in salary and bonus. Only a small proportion of these profits come from proprietary investment (i.e. where the bank gambles with its own money) and the majority comes from trading on behalf of clients, the largest of which are the pension companies. So, the fees paid by pension companies make up the majority of the banks profits and it is our money that goes into these investments whether it be in the shape of a pension or an ISA.

In any other form of business we would be asking questions about the competitiveness of a market that allows such massive profits to accumulate. Undoubtedly the mega-mergers that went through in the wake of the 2008 financial crisis were bad for competition and the sooner they can be reversed the better.

Alternative forms of financial management should also be encouraged such as credit unions, co-operatives, etc that retain capital within a community instead of seeing it disappear into the pockets of a faceless, probably overseas multi-millionaire.

Supermarket Low Pay

Rates of pay for the lowest earners at the big four supermarkets are between £6.50 and £7.50 an hour and many of their employees need state benefits just to make ends meet. On Newsnight they estimated that this costs some £50 a month per employee on average.

The idea of a Living Wage at around £8.50 was floated and it would seem fair to employees of such large businesses, so perhaps all businesses with a staff of 50 or more should have to meet the Living Wage. Despite the large profits and high executive pay these companies would have good cause to be upset by this.

I would suggest that National Insurance should be cut by a couple of percentage points in order to lower the costs for businesses to employ people. The nett cost to the tax man should not be that significant due to the corresponding drop in benefits paid out.

Almost all the extra money paid to such low earners goes straight back into the economy, some in direct taxes and others through indirect taxes (VAT) and the knock on effect of increased spending on the high street.

For a just society we have to aim for everyone to have the opportunity to work and we also need to find ways to reduce the consumption rate of all natural resources. Much better to spend tax money on getting people into work than artificially reduce the cost of non-renewable resources such as fossil energy.

The Big Society

David Cameron's Big Society policy is rapidly becoming a joke as the media poke fun at the poorly explained, poorly understood concept.

The Conservatives have long standing objectives to reduce the size of the state; they believe that tax should be lower and individuals be given the freedom to decide how to spend their money. So it seems quite likely that the Big Society concept is camoflage designed to give this old objective a new gloss.

However, I feel that the quality of our democratic processes are being degraded as we centralise. The systems were put in place at a time when the population of the UK was much lower and so the concept of a local person representing a constituency in Parliament made some sense. There was no mass media so you would elect someone that you knew and trusted personally - hopefully someone that would act both public sipritedly and in the interest of their constituency. Today we get to know our MP through the filter of the media, they typically come from outside and they represent large numbers of people that they could never hope to meet.

I would like to see much more power devolved to a local level; borough councils, district councils and even parish councils. Maybe every group of 50 houses should elect someone to represent them.

So, the Big Society might bring some local influence and power to the people. However the grave danger is that because we've learned to be very selfish and materialistic in the last 30 years there will be very few people choosing to reinvest their tax savings into the local community, services will close and we will be poorer for it. On the other hand you can look to the work done by Transition groups across the world for an example of how people can make collective decisions and work together to improve their community. Sometimes these projects need grant assistance from government while others are run on a semi-commercial basis and are self sustaining.

But the idea of running major enterprises on  purely voluntary basis is clearly a non-starter as today's news demonstrates; Big society tsar Lord Wei 'doesn't have enough time to perform role'

National Insurance & Person Tax

Surely the government is making a mistake by increasing National Insurance contributions. As energy and other raw materials become scarce and therefore expensive it is going to be increasingly important to make it cheaper to employ people (especially in the developed world). A healthy economy has a high level of employment, with just enough slack (unemployment) to allow for some flexibility.

Since public services employ a very significant percentage of the population it makes little sense to take with one hand and give straight back with the other (in increased employers contributions).

I would reduce National Insurance with the aim of eliminating it altogether. NI was designed as a tax that everyone pays at a similar level and everyone takes a pension, health care and employment cover. The reasons for the way NI works are long since lost in the mists of time and are not well understood. High earns may complain about the way Income Tax increases on higher earnings but you don't often hear that NI actually works the other way around. If you model the total personal tax it comes out at about 25% across the board.

Maybe the first step would be to bring it down to 10% but eventually I would like to simplify the personal tax regime by having single direct tax based on Income;

First £8,000 tax free - this needs to be sufficiently higher than the level of benefits available to the unemployed to maintain an incentive to work
Further £20,000 at 25% - medium level earners are significantly better off
All additional income at 50% - those earning over £100K might be penalised slightly

Alternatively it would be interesting to model what happens if a flat tax rate of, say, 30% would work. There is an argument that capturing 30% from everyone is better than taking 50% for the few rich people not employing a good accountant.

It would also be necessary to recover the tax income handed back to employers by reducing or eliminating their NI contributions. We want businesses to employ people, indeed it needs to be efficient to employ a person instead of purchasing an energy intensive machine. Additional Corporation Tax might penalise good businesses but we could take a tax off energy intensive businesses in the form of a steep Carbon Tax.

Population & Housing

Having seen David Attenborough present the Horizon special the other night it seem obvious that the UK government needs to set a target population for the country to work towards. Somewhere between 50 - 60 million seems about right. Achieving the target might take a generation but policy should be bent towards the goal starting with a look at tax and benefits that relate to children other than the first.

Further efforts need to be made toward addressing our high levels of teenage pregnancy, indeed education towards making it the norm for couples to wait until at least the age of 25 would almost certainly lead to better parenting.

The overall population target should be adopted at regional level by adopting the current policy towards new housing development. Instead of expanding the housing stock a mechanism should be developed to promote the building of new energy efficient houses while simultaneously redeveloping older houses where it is not economical to bring them up to modern building standards. Maybe there is an opportunity to resolve the inequity of Stamp Duty at the same time?

Q: how to make it economically desirable to demolish old energy-inefficient houses?

Proposal to Reform TV License Fee

Objectives;

1. Reduce beauracracy
2. Reduce costs of issuing, policing and prosecuting

Proposal;

Fixed fee per household to be added to Council Tax, eliminate TV License
Re-employ those currently working in the TV License system into tax or benefit frauds
BBC receives index linked fee based on revenue collected = fee * # of households

Proposal to Reform Road Tax

Objectives;

1. Reduce beauracracy

Proposal;

Road tax to be collected by Insurance company
Insurance company pay money collected to Treasury
New combined Tax + Insurance certificate to be issued by DVLA on (electronic) instruction from Insurer, cross reference with MOT database
Does not change car registration system in any way

Proposal for Child Benefit Reform

Objectives;

1. Remove any financial incentive to have more than 2 children
2. Contribute to drive for lower UK population (~45 million)
3. Maintain overall cost of child benefit
4. Focus benefit where most needed

Proposal;

Child benefit for first child only
Double current payment

How Objectives Are Achieved;

• Objective 1&2 are obvious - double benefit allows for 2 children but gives some incentive to stop at 1
  
• Child benefit currently paid for 2 children - check this - therefore overall cost should be slightly lower
  
• Poor families will receive existing means tested benefits
• No longer paying benefit for third child to those who can afford it

Domestic Energy Pricing Proposal

If we are all being encouraged to save energy how come the pricing model for most energy tariffs (gas and electricity) get cheaper as consumption increases? For example my gas bill from July - September 2008 shows the first 396 kWh at 7p with addition kWh at nearly half price (3.056p).

When you think about it the cost of electricity is fairly cheap. Even a big, plasma TV using 0.5kW is only costing about 30p an hour. It might cost £1 to cook dinner for four in an electric oven. By taking up all the available energy efficiency advice, low power light bulbs, eliminate stand-by, etc, the average household might stand to gain £200 a year - big deal!

Anyone looking at domestic renewable energy (solar PV, wind, heat pumps) soon realises that the economics are marginal with 10+ years payback. While large scale renewables are claiming close to parity with fossil fuels investment is unreliable (see recent announcements by EDF and E.ON regarding their commitment to wind power).

Therefore we need to price domestic energy from fossil fuel in a manner that;

• encourages efficiency
• makes small scale renewables cost effective (~5 year payback)
• does not punish those less able to pay
• does not punish those who are efficient in their use of energy

My proposal is that domestic energy should be priced in such a way that the price increases with usage. The energy regulators should have a key role in determining the quantity and base price, while the market would be free to establish the price of additional energy.

Those energy companies that offer a flat rate generally impose an annual fixed fee. These should be eliminated as they penalise low energy users. The energy companies will squeal about their fixed costs but they must be encouraged to recover these costs from high energy users and through energy efficiency services.

I believe this is a simple step that achieves all the goals set out above.

In addition this can be extended to replace the current fuel subsidies for low income and pensioner households. You simply need to increase the amount of energy they get at the lower rate or lower their base price.

Economy and Population

I have been reading "The Great Boom Ahead" written by Harry S. Dent, Jnr in 1993. His hypothesis is that economic cycles are tied to periodic fluctuations in population, that the baby boom following World War II meant resulted in a peak of consumption between the mid-90's and 2007. He actually predicts that there would be an economic crash around 2008 and that our economy would remain in recession until 2022 when the next birth boom reaches the peak of their spending power.

It makes you wonder whether our economy is just a great big ponzi scheme based on growing population and increased consumption! If you study the impending pensions crisis you definitely get that feeling.

Now combine this with a need to decrease our population long term in order to foster a sustainable society.

How would companies grow without a growing market for their goods? Who would invest in companies without growth potential? How can companies develop improved products without the market to sustain a return on investment?

Investment based on profits (dividends) not growth (share price)?
Profits based on efficiency, quality, customisation not ecomony of scale, mass production?

Darwinian Response

Darwin's theory of Natural Selection tells us that survival is dependant upon a species being well adapted to its surroundings. We are changing our world at an unprecedented rate, of that there can be no doubt, undoubtedly leading to the extinction of many species. Will we be one of them?

Homo Sapiens are an adaptable species and will probably be able to survive anything, even a large scale nuclear war. The question is what will our society look like? Will we be able to maintain our "civilisation" or will we be forced back into a subsistence existance? Can our economy exist without cheap energy? Where will our energy come from once fossil fuels run out (this is only a question of time and whether we care about future generations)? The chances are that we will have to consume less and that there will need to be fewer of us in order to reach long term sustainability.

I believe the debate needs to move on from the symptom issues of Climate Change, environment destruction and extinction to discuss "Sustainability". We need to address the question of how to sustain our society in the long term? Starting with the basics of food, water, heating and clean air, how much energy and raw materials are required to sustain us? It is safe to assume that we want our future society to include good health care, education, be safe (i.e. policing, fire, social services, etc), that we wish to continue to improve our knowledge of the world. What other things really matter to us and what resource do we need to have them? We could apply a "hierarchy of needs" similar to that proposed my Maslow to identify necessities and luxuries.

The upper levels of Maslow's hierarchy focus on Esteem and Self-Actualisation, those things that give us pleasure in rich, free countries where basics are taken for granted. As a result of our study of sustainability we might find that our materialistic approach to building self-esteem has to change. Could we evolve as a society so that big homes, inefficient cars and regular foreign holidays are no longer the things we strive for?

It seems to me that we are much more likely to be able to develop a sustainable society if we are in harmony with our environment, in other words we are well adapted, therefore it makes sense to minimise the disruption that we cause to the planet.

Population

Today I have been reading about population issues. I have been aware and confused by the lack of government policy for some time but I hadn't realised quite how serious matters are for the UK in particular. My recollection from the late '90s was that UK population was about to go into decline but the economic boom years since then have re-ignited the fire of our population with some estimates showing the UK could have 77 million people by 2050 and 100 million by the end of the century.

What is even more scary is that research into finding a sustainable level of population for the UK shows that we might already have 30 million "too many" people in the country. The vast majority of our wealth and food is generated overseas and south-east England is one of the most densely populated areas in the world.

On a global scale many countries have succeeded in bringing their birth rates under control and are entering a period of slow decline in population as a result. Yet none of the main political parties in the UK have a policy on population.

The main reasons seem to be civil liberties and religion. However a policy that sets out to work towards a given target, say 50 million by 2050, doesn't need to infringe upon the rights of any individual as other countries have shown. Some couples will still have large families and immigration will still take place but overall the average will be reduced through "Stop at Two" programmes and availability of contraception.

The big question on my mind today is whether it is all too late. With a soaring population all our efforts to live more sustainably are for nought. The planet will survive and mankind will no doubt survive in much smaller numbers but what of our society? What will get lost along the way? How much pain are we storing up for the next generation?

I want to find out whether it's possible to drive this agenda from the bottom up; if all councils in the UK set their own population reduction targets then there is no need for central government controls.

A Star on Earth?

BBC's Horizon recently screened an interesting programme about the prospect of nuclear fusion power called "Can we make a star on Earth?". The conclusion of the programme, presented by the entertaining Professor Brian Cox, was that nuclear fusion power is a real prospect that given proper funding might produce real results in 20 - 40 years.

However the programme contained a very informative interview with Saul Griffith of wind energy firm Mankani Power where the alternatives were examined. Cox sets Griffith a challenge to show what would be required to give every person on the planet 5kW of energy within 25 years without recourse to fossil fuels (given that today's average US energy consumption is 11.4kW).

To accumulate the necessary 30TW they assume 5TW from conventional nuclear, 5TW from Wind, 10TW from Solar, 2TW from Biomass, etc. But creating 5TW of wind power in 25 years would mean building a full size, 3MW, turbine every 3 minutes, the same impossible problems face solar and even conventional nuclear would require 5,000 new reactors to meet it's quota.

Essentially there are three factors in this equation that we can effect;

1. The population of the world - this assumed a population of 6 billion so we can reduce our target if we find ways to control our population.
2. The average energy target of 5kW is a reasonable one but even a tiny reduction would have a massive effect.
3. Let's pray the engineers working on nuclear fusion are successful sooner than they predict!

Ultimately, if we don't balance this equation then nature will take a grip and force us into balance by reducing our population as predicted recently by James Lovelock.

For those of us that are not world renowned nuclear scientists we can best have a positive impact by reducing consumption and this is where Transition Initiatives can be so powerful.