Opinion | These French Riots Are Different — and Far More Disturbing

Posted on by Lone Candle

“It is extremely tempting to see the riots that spread across France recently as merely a sequel to the shocking events of 2005. Back then, 21 days of riots shook France’s “banlieues” (code for largely impoverished multi-racial communities) and made international headlines. And there are indeed long-term political, economic and social issues in France that explain why things have not improved since. Why there is more, or even worse, police violence against rebellious — but usually defenseless — young men of Arab or non-Western descent.
But the stunning disorder that’s plagued France in recent days is coming from a different place from what we’ve seen before. There is now a sense of humiliation and dispossession that crisscrosses French society, that transcends the banlieues, and transforms today’s riots into a display of shared and paroxysmic frustration. That should be deeply worrying, not just for President Emmanuel Macron, but for democratic leaders across the West.”

…

“This time, the riots followed the point-blank police shooting of 17-year-old Nahel Merzouk after a car chase. The cost of the riots in a mere week — over $1 billion in damages to businesses — towers above that of 2005, but perhaps more notable is that the discussion of the banlieues has receded, or is mediated through, the lens of the police. (In fact, this echoes a different French film, Ladj Ly’s 2019 crime thriller Les Miserables; the last prophetic image is of a young boy beside himself with trauma and anger brandishing a Molotov cocktail in the face of a cop with a gun.) Today the majority of rioters don’t have an immigrant background, and most of them are minors, some as young as 12 — in other words only a few years younger than the victim. It is their extreme youth combined with what has been characterized as their hyper violence that makes headlines.”

…

“Regardless of the mindlessness of some of the destruction, the young people rampaging across French cities and towns are also expressing a deep anger rooted in humiliation that is felt across the country, not just in the banlieues. You could argue that for many French people, regardless of where they live, the nature of governance and decision-making in the past few years means that they all feel like “riff-raff” now.”

…

“From the often violent repression of the gilets jaunes (yellow vest movement) and Macron’s broken promises of a changed governing style, to the ramming through of pension reform (without a vote) in the face of massive, violent protests, the current government, despite its technocratic prowess, has given nearly every segment of French society, across all demographics and regions, cause to feel that they are governed sometimes competently but almost always with humiliating impunity. And too many have been injured or killed by police in the process; statistics show that French police kill four times more today than they did in 2010, fueling cycles of protest and repression.”

Study: Banning Investors From Buying Homes Leads to Higher Rents, More Gentrification

Posted on by Lone Candle

“They found that banning investors from buying and converting housing to rentals worked in one sense: The share of investor-owned rental properties in affected neighborhoods fell, and the number of properties bought by first-time homebuyers increased.
On the other hand, however, these new homeowners tended to be richer than the renters they were replacing, and the costs of rental housing increased overall.

“The ban has successfully increased middle-income households’ access to homeownership, at the expense of buy-to-let investors. However, the policy also drove up rents in affected neighborhoods, thereby damaging housing affordability for individuals reliant on private rental housing, undermining some of the intentions of the law,” write researchers in the study published on SSRN.”

Adam Smith at 300: The Gospel of Mutual Service

Posted on by Lone Candle

“Adam Smith may fairly claim to be the father, not of economics generally—that would be absurd—but of what in modern times has been called, with opprobrious intention, “bourgeois economics,” that is, the economics of those economists who look with favor on working and trading and investing for personal gain. We are apt to forget that the idea that a wage-earner, a trader, or an investor may be, and indeed generally is, a very respectable person is very modern. From Homer we learn that the people whom Odysseus visited on his travels thought it all the same whether he was a trader or a piratical murderous marauder. Primitive people are said to have regarded exchange as a kind of robbery rather than as a mutual giving. Greek philosophers thought wage-earners incapable of virtue, and money-lenders have been objects of antipathy throughout the ages.”

Sunak tells Biden UK will stand by cluster bomb ban amid Ukraine tensions

Posted on by Lone Candle

“Britain is one of more than 100 countries who are signed up to the Convention on Cluster Munitions, which prohibits “the use, production, transfer and stockpiling of cluster munitions that cause unacceptable harm to civilians.””

Study Blames Regulation for Lower Rates of Innovation

Posted on by Lone Candle

“The authors find that “there is a sharp fall in the fraction of innovating firms just to the left of the regulatory threshold,” which they label an “innovation valley” because the regulatory consequences of increased employee size mean that firms choose not to innovate. This fact holds for firms’ responses to demand shocks, as firms “with size just below the regulatory threshold” choose not to increase production to meet this demand because of the regulatory implications.
In total, the authors conclude that labor regulations equate to a 2.5 percent tax on profit, which reduces innovation by about 5.4 percent and “reduces welfare by at least 2.2% in consumption equivalent terms.” This tax on profit continues to affect firms to the right of the threshold, resulting in “a greater flattening of the positive relationship between innovation and firm size.”

The authors examine the effects of labor regulations on firms with between 10 and 100 employees, noting that “many labor regulations apply to firms with 50 or more employees,” and measure the firms’ innovative capacity by the number of patents.

These regulations force firms to devote resources away from production, including spending revenue on worker training, offering union representation, and creating profit-sharing schemes and a works council with employee representation.

“We are not saying all regulations are bad, but rather it is important to go beyond the usual approach to thinking about costs and benefits which are short-term and generally ignore long-run innovation,” Van Reenen tells Reason.”

…

“”Firms respond to incentives and disincentives and we find that even when firms experience positive developments, such as a surge in demand, they may still hesitate to invest in research and development and pursue innovation if they are near this size threshold,” Bergeaud explains to Reason. “Indeed successful innovation implies growth, which, in this case, would mean crossing the 50-employee threshold and incurring additional costs.”

Another interesting finding of the study is that firms innovating under substantive regulation tend to “swing for the fence” since “regulation deters incremental R&D” and firms want “to avoid being only slightly to the right of the threshold.” While significant innovations garner media coverage and drastically affect consumer well-being, minor innovations also provide benefits, allowing firms to deal with immediate concerns for less investment.”