Sweden’s Economic Brainwave

I’m sure Tim Worstall will get around to this, but I’m going to tackle it anyway.

To combat its ‘throwaway consumer culture’, Sweden has announced tax breaks on repairs to clothes, bicycles, fridges and washing machines. On bikes and clothes, VAT has been reduced from 25% to 12% and on white goods consumers can claim back income tax due on the person doing the work.

Years ago I had a Russian friend who moved from Dubai to Sydney.  Within a few weeks of her arrival she told me she found some aspects of living in Australia frustrating.  The example she gave was that she needed an old, decrepit wardrobe removed from her house, only to do this she had to call a removal company which could come some time next week and charge $200 for the job.  Whereas in Russia, she said, you just find a couple of alcoholics and buy them a bottle of vodka or two and they’d happily do it.  They’d probably go on to sell the wardrobe, too.

One of the big differences I noticed while moving between countries as economically diverse as France, Nigeria, Australia, Russia, and Thailand is that the wealthier a country is, the more difficult it is to get simple repair or semi-skilled trade jobs carried out.  The reason for this is obvious: as a country gets wealthier and more educated, the value added by each individual in the workforce increases, and a lot of low-value jobs simply disappear.  For example, in a poor country a guy can make a reasonable wage repairing bicycles: it might be the best way for him to make money and other people can’t afford to just buy a new one.  Whereas somebody living in London can make more money doing almost anything other than repairing bicycles, and he’d anyway have to charge so much that customers would find it easier and possibly cheaper to just buy a new one.  Economics, in other words.

You would therefore expect a developed country with an educated population like Sweden to have its workforce employed doing high-value jobs: technology, services, manufacturing, etc. rather than low-skilled jobs like repairing clothes.  And funnily enough that’s what they have, but now they’ve decided this ought to change:

The incentives are intended to reduce the environmental impact of the things Swedes buy. The country has ambitious targets to reduce greenhouse gas emissions, but has found that the impact of consumer choices is actually increasing.

They appear to have stumbled on the concept that a low-tech economy in which consumers have fewer choices produces fewer greenhouse gases.  Now they want to move to such an economy, which is in the precise opposite direction everyone else is moving.  We have the developed world.  We also have the developing world.  Sweden wants to kick-start the undeveloping world.

The scheme is expected to cost the state some $54 million in lost taxes, which will be more than outweighed by income from a new tax on harmful chemicals in white goods.

Erm, okay.  But isn’t the point of this new scheme to reduce the number of new white goods being bought?  So if it is successful, this new tax take won’t materialise, will it?

Moreover, Sweden’s economy is growing strongly and the government has an $800 million budget surplus.

My bank account is in surplus.  I’m therefore going to quit heart surgery and take a job in McDonald’s.

I interviewed the man behind the scheme, deputy finance minister Per Bolund, a member of the Green party and a biologist by training.

Ah.

He spoke about nudging people towards better choices; creating jobs for skilled manual workers; and Sweden’s six-hour working day.

Moving workers from skilled to semi-skilled jobs is a better choice?  This doesn’t seem to be consistent with the history of the human race.

I think many of us have had a bike standing around broken and we don’t fix it and then start using other modes of transportation.

Which suggests the individuals concerned aren’t so interested in riding a bike, doesn’t it?

This will expand the number of companies giving these kinds of services, so it’ll be easier for consumers to have things repaired.

How many unrepaired bikes are lying around in Sweden, exactly?

And sometimes you can be surprised by how a small change in fees can really change behaviour.

Oh no, we are quite aware of how fees – especially taxes – can change behaviours.  For example:

And in white goods, the tax break is actually quite substantial since most of the cost of repair is actually labour, so it can really make a quite big difference.

You’ve taxed labour to the point semi-skilled jobs have vanished.  Now you need a tax break to bring them back again.

It’s actually a tax on chemicals. So if the appliance has harmful chemicals in the production process or incorporated in it there will be a levy, but if, on the other hand, you decrease the amount you can actually get a much lower levy, or even a zero increase. So that will give an incentive to producers to decrease the use of harmful chemicals, and we know that appliances are a major contributor to the amount of them in the everyday environment.

Great.  But what if by using less of the harmful chemical the appliance becomes less efficient, thus needing more power for the same performance?  I’m pretty sure this would apply to a fridge or air conditioner.  I’m also pretty sure nobody has thought about this.

The idea is to help the private and municipal sectors use nudges to make it easier for consumers to act responsibly and reduce their environmental impact with everyday choices.

Translation: we’ll make you pay more if you live in ways of which we don’t approve.

We don’t anticipate that this will make people avoid buying things overall, but hopefully it will be easier for people to buy high-quality products because they know it’s affordable to have them fixed if something breaks. So it’s a lessened incentive to buy as cheap as possible and then scrap something.

People generally buy high-quality products because they don’t want them to break.  Nobody buys a high-quality product thinking it is a smart purchase because when it breaks, Olaf from around the corner can fix it on the cheap.  All people will do is buy the cheaper (and probably less efficient) appliances and get them fixed if and when they break.  The high-end appliances, subject to the “harmful chemical” surcharge, will suffer a drop in sales.  And I bet the repairs will still be too expensive compared to scrapping and replacing goods made in China.

And we also know that repairs are more labour-intense than production, which has been largely automised, so expanding repairs could actually contribute to an expanding labour market and a decrease in unemployment.

So you want to go from a lower-cost, automated process to a high-cost, manual process to achieve the same result?  Progress!

Especially because repair services often require high skills but not very high education,

Highly-skilled jobs requiring no education.  I suppose this is the theory underpinning Sweden’s immigration policies.

so we believe there’s a currently unemployed part of the labour force that could benefit.

Why not get them doing jobs that need doing, rather than getting them to do tasks which without meddling with the tax system nobody has a demand for?

Of course it is a boost for the local labour market because repairs are by their nature done near where you live. So hopefully this will contribute to the growth of jobs locally all over the country. Whereas large-scale manufacturing is very centralised and can only happen in a few locations around the nation and internationally.

A blast-furnace in every garden!

We’ve managed quite well to decrease emissions within Sweden – by some 25% since the early 1990s – but we see that the environmental effects of consumption are actually moving in the opposite direction, they’re increasing. And since Sweden wants to be a leader in sustainable development on a global scale, we feel a responsibility to do what we can domestically to decrease the impact of consumption.

No new bike for you, Erik!  The government has decided you must get your old one fixed.

What do you think of the six-hour working day, which is being tried in Sweden?

There’s no national scheme, but municipalities and private employers have tried it, and in general found it quite beneficial for the labour force. They experience better working conditions and you can see some effects when it comes to health, you get fewer sick days.

The fewer hours people work, the fewer hours they spend off sick.  Who knew?

And what I think will really change consumption patterns is the growth of the sharing economy, which has so many benefits for the individual – getting easy access to things like vehicles without the responsibility of ownership and maintenance. That could be a game-changer.

Oh, it’ll be a game-changer all right.  Look at how well the Soviets got on with collective farms which had no responsibility of ownership or maintenance for machinery and vehicles.

I think this is what happens when you make a biologist the deputy finance minister of a country.

Share

Even More on Carrier Bags

This is the post I know you’ve all been waiting for!  Further to my previous two posts on carrier bags, I now have something more to add.

Back in August I said that my local supermarket had stopped providing free carrier bags and everyone jumped on me by saying you can buy them for only 5p.  Only I couldn’t, because my supermarket wasn’t selling them.  But now they’ve given us an alternative: a strong, American-style paper bag with handles that looks like this:

They cost 23 cents each.  Last night I bought one because I found myself needing a couple of bottles of milk, a bottle of some sugary fizzy shite that I drink, and a bottle of wine and I didn’t have room in my gym bag.  As I was walking the few hundred metres home I noticed the handles were cutting into my hand, and that carrying more than one in each hand would be damned near impossible.  Plus they’d lose all their strength if they got wet.  You know what I did with it when I got home?  I put it straight in the bin.  What the hell am I going to use it for?  It is too big when folded flat to go into a pocket, and it’s useless for lining a bin, wrapping shoes, or any other purpose to which a secondhand plastic bag can be used.

Maybe it is because my supermarket is a “metro” style one in a nice suburb that these are on offer and traditional carrier bags are unavailable, but I am still convinced that whoever decided free plastic bags should be replaced by inferior paper bags at 23 cents each didn’t have poor, single mothers with no car in mind when they campaigned for it.  No, like my French acquaintance – who no longer speaks to me following an initial argument over the original post and another row over my mentioning her in the follow-up – they will be wealthy middle-class and living a short walk from the nearest supermarket either alone, or with a car in the basement.  Or both.  The types who buy overpriced organic avocados and wear complete Nike outfits when they go to their gym classes.  Now that’s probably enough snark for today.

Staying on topic, there was a rather revolting story doing the rounds on social media the other day about a camel in the UAE having eaten a load of plastic and dying.  I have looked for it online but it seems to be one of those stories that gets recycled every few years, only the name of the camel changes each time.  Anyway, the premise of these articles goes like this:

1. A camel has died in the UAE by eating discarded plastic, some of which is carrier bags.

2. GLOBAL BAN ON PLASTIC BAGS NOW!!!

Whereas my first reaction, having lived in the UAE, was how’s about they get the ignorant, arrogant, self-centred assholes who inhabit that part of the world to strop strewing litter all over the place?  This would do more for the wellbeing of camels than banning carrier bags in Parisian supermarkets, surely?

Share

More on Carrier Bags

I can’t believe I’m going to write a second post on carrier bags, let alone in the same week as the first, but that’s blogging for you.  Tim Worstall did me a solid and linked to my piece over at his own blog, whereupon a number of people missed the point.  So I’ll clarify.

Firstly, I wrote about my specific experience in my local supermarket where buying a carrier bag for 5p is not an option, so for all those people throwing their hands in the air and saying “Oh, it’s only 5p!” unfortunately it isn’t.  And I’ll come back to you lot later.   Although I did notice last time I was in that they’ve started offering paper bags (I don’t know for how much), so at least now customers have a (presumably) cheap option.  But if tens of millions of paper bags are more environmentally friendly to produce, use, and dispose of than plastic bags then fair enough: but I don’t think it’s enough just to assume they are.

And that’s part of my problem with the ban.  One of Tim’s commenters said:

I don’t see the objection. If you buy groceries unplanned, you pay 5p for a bag. Meanwhile, the charge has caused a massive reduction in plastic bag use, and the world will be a very slightly better place for it.

Why is it assumed that a reduction in plastic bag use makes the world a better place?  Was it better for the poor lady in Avignon whose groceries spilled all over the street?  Does using stronger, reusable plastic bags offer an overall improvement?  If so, where are the studies to back it up?  This article (thanks, Bardon) suggests the alternatives are not as good for the environment, partly because (as Tim W mentions) people would reuse carrier bags for other purposes anyway, and now they’ll be buying specific bags.

I think what has driven this ban is an assumption that the use of plastic is in itself bad.  Why, other than some vague reference to “the environment”, is not really explained.  An acquaintance of mine here in Paris took it upon herself to tell me she disagreed with my article and supported the ban because it reduced plastic use.  When I asked why she thought this was a good thing, she said there is a lot of plastic in the sea.  Which is true, but I very much doubt the plastic in the sea takes the form of carrier bags given away at checkouts in European supermarkets.  But somebody has taken the leap from plastic in the sea to plastic in general and flogged it to the gullible in order to support a ban.  Others talked about noticing a reduction in litter since the ban came into effect.  Do we have data showing litter in the form of carrier bags across Europe before and after the various bans, are people happy to go with anecdotes and feelings?  For if we accept the use of plastic in itself is bad, why carrier bags?  Should we ban Bic biros and force everyone to use pencils?

What bothered me about the ban is that it was more than likely proposed by a “charity” or pressure-group whose members will almost certainly be wealthy middle-class; the ban would have been taken up by politicians who probably haven’t bought a trolley-load from a supermarket since barcode scanners came in; and now the population can sit back in smug satisfaction at having made the world a better place.  Only a better place for whom?  The wealthy middle-classes, of course.  But what about the poor?  The middle-classes who agitated for this ban probably don’t have to go shopping with 3 kids and take the bus home, do they?  Oh no, they’ll drive the car to the nearest Waitrose, if they don’t already live within walking distance.  Tell me, what would you rather use to take 15kgs of shopping home on the bus, a paper bag or a carrier bag?  (Incidentally, my French acquaintance who approves of the ban lives alone and directly opposite an organic farmers’ market.)  And for all the quips about being organised enough to bring a bag in advance, most people don’t realise that the lives of the poor are usually neither organised nor predictable, not least because people who live appallingly disorganised lives through no fault of their own are usually poor as a result.

And that’s what really pissed me off about the “Oh, it’s only 5p!” remark.  Yes, it is only 5p, but it is 5p multiplied by however many carrier bags that is being taken out of the grocery budgets of the poorest in society.  Of course the wealthy middle-classes can afford 5p, and as far as purchasing a moment of self-righteous smugness goes, this is pretty cheap.  But this tax (for it is effectively that) is not the only one in existence and every incremental increase in the cost of living has made western Europe seriously bloody expensive to live in.  So yes, it might be “only 5p”, but when you’re shit poor and you’ve been hit with another two or three dozen charges of “only” some nominal amount, it might not seem so negligible.  It might also grate a little that those who lobbied for it are sitting in a quarter-of-a-million quid house.

And that was my point about the Soviet Union: the privileged imposing artificial material restrictions on society which hit those at the bottom hardest, all the while saying it is for their own good.

In summary, I’m not necessarily saying the ban on carrier bags is a bad thing.  I just take objection to people making the assumption that plastic use is in itself bad, alternatives better, and the ban good as if it these were self-evident truths; and the lifestyle preferences of the wealthy middle-classes being imposed on everyone else with nothing but condescending dismissal of the costs and inconvenience to those not so fortunate.

Share

Chesterton’s Fence and Carrier Bags

As with seemingly a good portion of my newly-acquired knowledge, I first heard about Chesterton’s Fence over at Tim Worstall’s blog.  Chesterton’s Fence is the principle that reforms should not be made until the reasoning behind the existing state of affairs is understood:

[L]et us say, for the sake of simplicity, a fence or gate erected across a road. The more modern type of reformer goes gaily up to it and says, “I don’t see the use of this; let us clear it away.” To which the more intelligent type of reformer will do well to answer: “If you don’t see the use of it, I certainly won’t let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it.

I’d actually forgotten about this until it was mentioned again more recently in the comments at Tim Worstall’s, and it reminded me of something I saw in Avignon the weekend before last, which in turn reminded me of something I had been thinking for a while.

While in Avignon, I was walking down a busy shopping street when I saw a young lady carrying a large paper bag full of groceries in her arms.  As I walked past her, the bottom of the bag fell out and the groceries went everywhere.  I commented to my companion that there are very good reasons why plastic carrier bags were invented and became extremely popular, and that I’d often thought these reasons were not properly considered when France banned them at the beginning of July (my local supermarket stopped providing them sometime last year, and they don’t even give you the option of buying them like you can in British supermarkets).

The American practice of using paper bags doesn’t really work in any place where you have to walk any distance with groceries, let alone use public transport.  The American-style paper bags are designed to be packed by a former convict and wheeled to your car in a trolley, not carted down the street by hand.  They don’t even have handles for a start, and the young lady who I saw in Avignon was carrying hers in her arms as if it were a child.

I think the behaviour that governments and the lobbyists want the citizens to adopt is one whereby they turn up to the supermarket with one or more robust, reusable grocery bags but this only really works when the shopping trip is planned.  What somebody is supposed to do if they pop into the supermarket to buy more than two items on the way home is anyone’s guess, unless they fancy forking out a fiver for one of those robust, reusable grocery bags.  I expect what we’ll find is people taking up the habit of carrying around a small, compact bag in case they need to do some unscheduled grocery shopping at some point in the day.  During the good old days of the Soviet Union, the happy citizens would routinely carry around a string bag called an avoska, which roughly translates as “perhaps bag”, on the off-chance they would stumble across a store selling something worth buying and would be able to carry it home (before swapping it with a neighbour or friend in return for something they might actually want).

For some people, particularly middle-class environmentalists, forcing the masses to adopt practices common in the Soviet Union is probably seen as progress.

Share