Does “the Economist” know what a “market failure” is?

Apparently not. "Do British housing markets suffer from market failure”? The answer is no.

Here’s a quick refresher - a market failure is when the market - left alone - doesn’t produce an efficient or pareto optimal solution. Good examples are externalities such as pollution or congestion, or public goods such as new vaccines. The London housing market is not a good example of a market failure, where poor outcomes are the result of clumsy government regulation restricting supply. The fact that the market is responding to insane restrictions on new supply by focusing what little building they are allowed to do on expensive rather than affordable houses is not a market failure. Yes it is a market, and yes it is producing poor outcomes, but it is failing because of over-regulation. That is a government failure not a failure of the market mechanism.

It’s one thing when ordinary people use economic jargon in a colloquial sense with a totally different meaning to the economic term, but you expect better from a magazine called the Economist.

London bicycle stats

# cyclists killed in London in the past 2 weeks: 6
# police deployed to street corners in response, to patronise cyclists and warn them about cycling sensibly, wearing helmets, and listening to music: 2,500
% cyclists killed in London whilst breaking the law: 6%
% cyclists killed in London by a HGV turning left right into them: 50%
Average annual cycle deaths in Amsterdam (where most people don't wear helmets): 6
Average annual cycle deaths in Paris: 2

Guardian economics fail #636352747

If the Guardian's economics leader writer actually knew even the very first thing about economics, he might be able to recognise that an increase in supply normally leads to a decrease in prices. And so new tall buildings in London should generally be celebrated for being exactly what is needed to cut rents, and are basically a total economic free lunch for the city and the country. And if you don't believe me, try the leading urban economists at Harvard or the LSE.

Sex, fame, and economic geography

"We seek cities because there are a greater range of girls at the bar, of reproductive choice. Number one. 

Number two is there are better outcomes for health and wealth. And now we care more about the environment, and cities are better for the environment. But above all, talented people seek cities for fame. They can't get famous in the fucking village."

Boris Johnson. I'm not a fan, but it's a great quote. 

LSE joins the blogosphere

A couple of potentially interesting new blogs from the LSE, Do No Harm written by students on the MSc Development Management and a course blog DV409: Economic Development Policy written by Instructor Diana Weinhold.
There is an even a post by an ex-Juba-ite on working in development:

A self-serving bureaucracy that never gets to the field, lives in meetings, writes endless reports and pays itself handsomely.  This isn’t why a lot of people join the cause.  They want to be working directly with people, seeing the impacts of their work in front of them, confronting poverty and injustice head on.  But how do you achieve large-scale impact from a local level, how do you fully engage with national politics, and how do you bring the large resources to bear?  Personally I’m in development to work on the big issues, which means in 3 years in Sudan I got out of the capital three times.  I could live with that.  Other people felt sorry for me, often quite angry.  You know that aid official who lives behind barbed wire in western comfort when there are poor people just the other side of the fence?  That was me.

In my 18 months I’ve left the capital twice.

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Links fixed - thanks Laura

Ernest asks…

“What’s worse than seeing the driver in the speeding taxi you are trapped in whip out his mobile phone and start a conversation?”

My worst was the guy driving me from Entebbe to Kampala who decided to show me a Ugandan music video on the PORTABLE DVD PLAYER INSTALLED IN THE FRONT OF HIS CAR.

Taxi Driver: “Oh watch this bit its really good”

Me (in my head): “No!! Watch the fucking road you maniac!!”

Me (actually): “Er, yeah… that’s nice…”

My favourite Ugandan music video I saw about 5 times on a long bus journey a few years ago. The lyrics went something like “O mama I married a Mzungu (White person), please forgive me, he doesn’t know our ways, he doesn’t eat matooke (mashed banana), but I love him anyway,” complete with idiotic Mzungu in the video committing lots of social faux-pas. I would kill for a copy of that.

I also saw a good one in the Amen supermarket the other day which appeared to be showing the life of a Nigerian living in England. There were 3 scenes.

1. Man rapping as walking down a London street being a parking inspector
2. Man rapping as being the toilet attendant in a London club
3. Man rapping as being pushed into police car

Anecdotally, African immigrants do seem to make up a disproportionate percentage of London parking inspectors and toilet attendants. I’d say approximately 99%. Probably because everybody hates parking inspectors and nobody wants to be a toilet attendant. No wonder the guy is getting arrested by the end.