New Economy Infrastructure for Philanthropy and Social Good

The RMIT Blockchain Innovation Hub and Blockchain Philanthropy Foundation is hosting a full day conference on Blockchains and Philanthropy. The objective is to explore new blockchain technology and how it provides new economic infrastructure and business models for the charity and philanthropy sector.

The event will cover topics such as Blockchain 101, Crypto Altruism and Social Impact, Blockchain and Public Finance, Blockchain Application in organisations.

Click here for the program.

Posted in Cryptoeconomics, Gratuitous Advertising | 3 Comments

Dodgy data from the Bureau of Meteorology

Several chapters of Climate Science: The Facts raise really serious issues about the temperature records maintained by the Bureau of Meteorology (the Bureau). In addition to the adjustment (homogenisation) of records and the trashing of old files investigators met bureaucratic obstruction to keep the management processes out of sight.

One of Tony Abbott’s last moves as PM was to set in train an investigation into the operations of the Bureau but that initiative was aborted by the incoming PM Turnbull. This is understandable given the importance of fake science and fake news to sustain the push to destroy the electrical grid of the nation.

Joanne Nova described mysterious revisions to Australia’s long hot history that were located by a team of well qualified and experienced volunteer citizen scientists. The story really has to be read to get the full flavour. For example they found that thermometers accurate to a tenth of a degree were being adjusted by as much as two degrees. The records now indicate that the hottest day recorded in modern history was at Albany on the coast of WA rather than in the baked arid zones of Oodnadatta or Marble Bar. The temperature reported in Albany on 8 February 1933 was 44C and 8 decades this was adjusted by 7C to 51. This pipped the 50.7 that was recorded for Oodnadatta on 2 January 1960.

New electronic thermometers were widely installed in the 1990s and many ran alongside the old system which would permit comparison of the old and new systems but the data are not available to the public and are routinely deleted as a part of normal practice. It is likely that the new system generates a “step up” in recorded temperatures but it appears that the trashing of records has eliminated the possibility of a proper investigation.

Early explorers were trained to record temperatures and there are masses of newspaper records that indicate weather patterns around the nation with many accounts of temperatures around 125F “in the shade” translating into 52C. On 3 January 1909 an observer recorded 125F at Bourke. The handwritten entry was underlined as one might do for a remarkable reading. Decades later this was declared an error for two reasons: it was taken on Sunday when the observers didn’t normally work and the temperature at some other towns in midwestern NSW only hit 113F. On the first point, why would an observer NOT make an effort to record a potentially record-breaking temperature? On the second, a newspapers reported a figure of 123 at Brewarinna which is the nearest town to Bourke.

This team joined forces with Senator Bernardi to ask for an audit of the historical records from the Australian National Audit Office in 2011 but the Bureau announced a major revision of the data called the Australian Climate Observation Reference Network – Surface Air Temperature (ACORN-SAT) which sidestepped the audit because the request referred to the old data set, now unused and possibly deleted.

Jennifer Marohasy described the homogenisation of Rutherglen, a town in the Victorian wine country a little west of Albury. The temperatures were recorded at the agricultural research station since 1912 in a Stevenson screen, a wooden structure designed to standardise the immediate environment of the equipment. Very strange things happened in the course of homogenising the data for the new ACORN-SAT system. A cooling trend of 0.3C at the station is converted into a statistically significant warming of 1.6C per century, ignoring trends at nearby stations. The story is complex involving tables of data and helpful charts so I will not try to tell more of it here – just beg, borrow or steal the book if you are too poor or mean to buy it.

When Greg Hunt announced that the investigation of the Bureau would not proceed under the new management he explained to Tony Jones on Lateline that the Bureau used hard science, hard data, literally millions of data points of information through our satellite and local monitoring. Marohasy wrote that ACORN-SAT relies entirely on surface data from 112 stations, 109 of which are homogenised. Satellite readings are not involved which means that the acronym SAT is as deceptive as the information provided.

Marohasy and Dr Jaco Vlok wrote Chapter 10 “Moving in Unison: Maximum Temperatures from Victoria, Australia. Dr Vlok is apparently a refugee from South Africa, now engaged in research at the University of Tasmania (my alma mater) on building historical temperature records using artificial neural networks (don’t ask me).

The work in this chapter does not call for sophisticated mechanical or electronic analysis, merely the technique known as “eyeballing” in the technical language of the trade, using the neural network connected to your eyes. This involves more charts and I strongly suggest that you eyeball them. They simply show all the raw data for maximum temperature series in Victoria that are available, starting with some in 1860. To summarize, all the series move together suggesting that they are all reflecting the same reality, the same variations and changes over the many decades. “But there is no long-term trend. There are, however, cycles of warming and cooling with the warmest periods corresponding with times of drought.

Posted in Global warming and climate change policy, Rafe | 25 Comments

Good morning Australia

Not a bad day on the windfarms the bird-killing factories, apart from Qld (1), too early for solar but Wind and Other are cranking out 8% of demand! Interesting to see the demand building up in the last few minutes.

Work in progress on a post about the fake data supplied by the Bureau of Meteorology, one of the requirements along with fake science to support the policies that are destroying the electricity grid of the nation.

At 9 demand has gone up but Solar is kicking in and Solar and Other are delivering 11.5% of demand.

1.30pm Demand down to 21GW Wind and Other up to 4 – 19% of demand! What a relief, we might only need six or seven times as much (and storage).

5.00pm Demand is up to 25GW (heaters going on, early dinner?) no wind in Qld and the sun is setting. Wind and Other deliver 2.7GW 11% of demand.

Posted in Global warming and climate change policy, Rafe | 18 Comments

Government of the bureaucrat, for the bureaucrat, by the bureaucrat

Who would have thunk it.  A government filled with no-one who has ever run their own business, has passed another virtue signalling law that will achieve nothing.  Nil, nada, nought, nuffin.

Which government you may ask?  The NSW Liberal-National government following the footsteps of the Commonwealth Liberal-National Government.

And when Spartacus says no-one who has ever run their own business, he is not referring to people who have worked in the private sector but rather people who have never run their own business, who receive nothing before the tax man and the salaries are paid.  The ones who have an ever growing bureaucratic compliance activity list which achieve nothing but keep the government active and busy.  The ones on whom layer upon layer of idiotic laws and regulations fall, distracting from, you know, the act of running a business.

You see, the NSW Government has just passed a law requiring companies to report on modern slavery:

the Modern Slavery Bill of 2018 (the “NSW Act”), which requires companies with employees in NSW and with an annual turnover of over AU $50 million to release an annual statement that details the steps taken to ensure their operations and suppliers do not engage in modern slavery.  The NSW Act has no effective date yet.  Implementing regulations are expected to further define the contours of this new law.

Bonza!  But wait, there is more:

NSW Act comes on the heels of a similar law proposed by the Australian federal government, raising questions of overlapping responsibilities on companies.  The NSW Act adds to the increasing number of supranational, national, and sub-national laws that place direct obligations on certain companies to report upon efforts to identify and mitigate human rights risks such as human trafficking, child labor, and other forms of forced labor – often collectively described as “modern slavery” – from their global operations.

The NSW parliament is not only dumb enough to pass such virtue signalling laws but too lazy to define “Modern Slavery” in the act, leaving it to bureaucrats to define it and subsequently re-define and re-define and re-define it as is their capricious desire?

Hey Bob, if you have nothing do to next week, can you work up a new definition of Modern Slavery and update the regs.  Not urgent.  Only if you have nothing better to do.  Gotta keep that budget ticking.

And what will this legislation achieve?  Other than of course stopping businesses from conducting business?   Perhaps nothing, nil, nada, nought, nuffin.

There must be a “Modern Slavery” conference coming up somewhere in Europe or the the USA next northern summer.

Next on the “keep the bureaucrats busy but kill the business hit list” are probably further laws requiring businesses to:

  1. report on domestic violence detailing the steps taken to ensure their operations and suppliers do not engage in domestic violence;
  2. report on paedophilia detailing the steps taken to ensure their operations and suppliers do not engage in paedophilia;
  3. report on domestic violence detailing the steps taken to ensure their operations and suppliers do not engage in domestic violence;
  4. report on carbon pollution detailing the steps taken to ensure their operations and suppliers do not engage in carbon pollution;
  5. report on water usage detailing the steps taken to ensure their operations and suppliers do not engage in excessive water usage;
  6. report on smoking detailing the steps taken to ensure their operations and suppliers do not engage in smoking;

and on and on and on.

And when will it end?  Clearly not with a Liberal-National Government.  Perhaps it might end when there are no more businesses left because the cost of doing business is too high.

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Posted in Uncategorized | 28 Comments

The Winston Churchill of our times

‘Our relationship had never been worse – but that changed four hours ago’: Trump hails ‘direct, open, deeply productive’ talks with Putin

US President Donald Trump has come face-to-face with Russian President Vladimir Putin in Helsinki, Finland

The pair made opening remarks to the media before reaching across to shake hands ahead of private talks

Trump said he hoped for ‘extraordinary relationship’ with Moscow and praised Russia’s hosting of World Cup

Afterwards, Trump admitted ties between nations had ‘never been worse’ but said the situation had changed

Putin said the Cold War was over and that the US and Russia now needed to solve problems together

The above from here with quite a bit more. The Russians are no longer an ideological enemy, but there are many who are.

As for those who must live in the past, this is what we say to them. And there are plenty among the insane, with the deep state comprised of the politicians of the left and their supporters, bureaucrats and public “servants”, virtually the whole of the media, and the academic social sciences left and not just social scientists. This is how they see things.

This instead is the new reality.

Trump winks at Putin during high stakes Helsinki summit…
Putin declares ‘Cold War is over’…
Body language expert analyzes…
EU urges to protect global order…
China watching…
‘Journalist’ dragged out of press conference by secret service…

Hardly peace in our time but greater safety and a collective focus, hopefully with the Russians, on those who really would do us harm.

Posted in International | 111 Comments

Q&A Forum: July 16, 2018

Posted in Open Forum | 23 Comments

Donald J. Boudreaux: The Myth of Predatory Pricing

Economic reality is enormous and complex. Each and every moment brings countless actions, reactions, course corrections, and unexpected discoveries. To make sense of it all requires sound theory and a healthy knowledge of history.

Among the important tasks that sound theory and knowledge of history enable us to perform is to distinguish what’s merely possible from what’s probable. The range of all that is possible is vast. It includes, for example, your discovering next month a vaccine for cancer while modifying a recipe for turtle soup.

It is indeed possible that cancer will be prevented in this way. Yet no one in his or her right mind would leap from a recognition of this remote possibility to the conclusion that all medical research into cancer should end.

Nearly everything that is possible will never happen. Never.

The Theory

This truth is important when discussing so-called predatory pricing. Prices are said to be predatory when they are both below cost and used as a means of monopolizing a market. Superficially, fears of predatory pricing make sense. After all, if a firm today charges prices below cost, not only does it forgo profits today, its low prices also threaten the existence of its rivals. Once the predatory firm’s rivals all go out of business—voila!—the predator has a monopoly and then jacks up prices to monopoly levels. Consumers suffer unwarranted harm.

It’s possible. But this outcome is no more probable than your stumbling upon a cancer vaccine while cooking turtle soup. The reasons are many. Here are just some.

The Reality

For a firm to drive its rivals out of business by charging “excessively” low prices, it must not only cut its prices but also expand its sales. Remember, the objective is to take so many sales away from rival firms that they all go bankrupt. But when a firm increases its sales at below-cost prices, that firm necessarily incurs huge losses. The predator’s rivals, while they might all be obliged to also sell at prices below cost, have an advantage that the predator doesn’t: they can reduce their sales during the price war in order to keep their losses to a minimum.

Basic economic theory makes clear that a firm that tries to monopolize a market by charging prices below cost inflicts on itself losses larger than those it inflicts on any of the firms it’s trying to bankrupt.

Basic economic theory makes clear that a firm that tries to monopolize a market by charging prices below cost inflicts on itself losses larger than those it inflicts on any of the firms it’s trying to bankrupt. And the greater the number of rival firms that must be pushed into bankruptcy, the greater the number of sales that the predator must make at below-cost prices and, thus, the heavier the predator’s self-inflicted losses. This reality prompted Robert Bork to snarkily advise that “the best method of predation is to convince your rival that you are a likely victim and lure him into a ruthless price-cutting attack.”

Those who are desperate to portray predatory pricing as being probable respond by insisting that predatory firms have deeper pockets than do their rivals. These deeper pockets allegedly enable predatory firms to endure heavy losses while their rivals, being so very short on cash, shut down because they cannot afford even light losses.

Capital Changes Everything

This response overlooks the existence of capital markets. A core function of capital markets and their institutions (such as banks, venture capitalists, and angel investors) is to channel needed liquidity to potentially profitable firms. Firms with good track records, promising business plans, and reputable management teams have ready access to global capital markets, which are huge. (The value of outstanding commercial and industrial loans made by U.S. banks alone is now about $2.2 trillion.)

Because firms that can operate profitably over the long run routinely tap into capital markets for liquidity, each firm’s pockets are as deep as its skills are impressive, as its ideas are promising, and as its integrity is high.

Because firms that can operate profitably over the long run routinely tap into capital markets for liquidity, each firm’s pockets are as deep as its skills are impressive, as its ideas are promising, and as its integrity is high. Thus, the pockets of even the richest predatory pricer are no deeper than are those of any of its capable rivals.

Of course, it’s possible that all rivals of a predator will be unable to convince banks or other investors to supply them with needed liquidity. Possible—in the sense that this outcome can be imagined. But it is extremely improbable.

Nevertheless, assume that the extremely improbable occurs and the rich predator manages to bankrupt all of its rivals. Being now the lone supplier in that market, the predator finally has the monopoly power for which it paid so dearly.

Yet this monopoly power is worthless to the predator unless the predator now raises prices above costs in order to reap monopoly profits. So the predator does so. But prices above costs lure new entrants into competition with the predator. So bankrupting all existing rivals isn’t sufficient for the predator to secure monopoly power; the predator must also somehow prevent new rivals from competing with it after it bankrupts its previous rivals. Another round of predatory price cutting ensues, with the predator once more suffering larger losses than are suffered by any of its new rivals.

Again, it’s possible to imagine that all of the new entrants will fail—just as all of the predator’s initial rivals failed—to get sufficient liquidity and will thus be bankrupted by the predator’s low prices. But the very need to string together so many bizarre possibilities makes clear that cutting prices below costs is a fantastically unlikely means of monopolizing markets. This possibility is so remote that it should never be taken seriously.

Nevertheless, many people, including antitrust authorities and trade officials, continue to treat predatory pricing as a plausible means of monopolizing markets. Ironically, this refusal to dismiss predatory pricing as an utterly unrealistic means of securing monopoly power has a strong likelihood of itself creating monopoly power.

Government Action

Precisely because a key feature of healthy market competition is the downward pressure it puts on prices, if governments are open to acting on complaints of predatory pricing, firms that are unable or unwilling to compete fairly will seek shelter from competition by accusing their more entrepreneurial rivals of such predation. Further, fearful of being prosecuted for predatory pricing, entrepreneurial firms—even without actual complaints being leveled against them—will be more reluctant to cut their prices if governments actively police against price cutting. Economic competition is thus stymied rather than stimulated.

In this historical record, you’ll find not a single clear-cut instance of a firm securing genuine monopoly power through so-called predatory pricing.

Comb the historical record as carefully as you can. This record confirms the conclusion of sound economic theory. In this historical record, you’ll find not a single clear-cut instance of a firm securing genuine monopoly power through so-called predatory pricing.

All governments and all courts everywhere would, if they were sincerely committed to keeping markets as competitive as possible, announce loudly and unconditionally that never again will they take accusations of predatory pricing seriously.

Reprinted from the American Institute for Economic Research.

Donald J. Boudreaux

Donald J. Boudreaux

Donald J. Boudreaux is a senior fellow with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University, a Mercatus Center Board Member, and a professor of economics and former economics-department chair at George Mason University.

This article was originally published on Read the original article.

Posted in Cross Post, Economics and economy | 34 Comments

Record cold but a lot of Wind and Other

Apparently many places in Eastern Australia enjoyed record minimum temperatures overnight but apparently this got as much cover on the ABC as the number of rockets launched into Israel before they retaliated.

On the upside the wind is blowing, the sun is shining and Wind and Other are delivering almost 10% of demand!

A bit pricey in SA and Victoria but.

Posted in Global warming and climate change policy, Rafe | 11 Comments

Monday Forum: July 16, 2018

Posted in Open Forum | 1,568 Comments

Crowd sourcing research on the dogs that didn’t bark

Last week Cats contributed a heap of information and sources about scientists and others who have been punished for having unfashionable views on a certain topic. That will all contribute to a section of a work in progress under the working title The Dogs That Didn’t Bark.

The dogs are the academics working in the history and philosophy of science and science studies who might have warned us that something has gone wrong, except that they have mostly signed up to alarmism. The book will be lightly footnoted for a general readership and the heavy duty research will be in a companion website with copious links to primary materials.

In the background are some key points. For one, there have always been people going on about the end of the world and other disasters. People might like to give examples of their favourite cases.

More specifically there have been no end of failed predictions about impending climate disasters and statements from the likes to people like Prince Charles on the number of hours, days or months that we have left to start making drastic changes to avert disaster. I want to collect these cases as well, although comprehensive reporting might call for another book.

Another aspect is the history of popular delusions and the madness of crowds referencing an 1841 book on things like occultism, witch mania and financial episodes like the South Sea Company bubble of 1711-1720, the Mississippi Company bubble of 1719-1720, and the Dutch tulip mania.

This particular delusion may be unique in the way that it has obtained support from modern science, in the volume of the propaganda exercise supporting it and the amount of waste and destruction of resources that it is causing. More on those aspects another time.

In the meantime please comment on “end of the world” episodes and more specifically the predictions of climate disaster over the last 20 or 30 years. If you have too much for a comment, say that and I will get in touch by email.

Posted in Global warming and climate change policy, Rafe | 30 Comments