Fuel Protests To Return?

[audiotech]

Is the price elasticity of demand (the responsiveness to the quantity of a good demanded to a change in the price of a good) for oil perfectly inelastic (does not change no matter what the change in price)?

No.

Oil-consuming nations should promote policies, which would encourage alternative fuel use, conservation and increased production of domestic oil. The degree of monopoly power could be reduced by these measures, as the demand becomes more elastic. Most importantly, these measures would shorten the painful cycle of market adjustment suffered by oil-importing countries through increasing elasticity. With higher elastic demand in the long run, oil-importing countries would enjoy lower fuel cost, as the price of crude oil remains low.
http://www.iaes.org/conferences/past/philadelphia_52/prelim_program/d00-1/hwang-yang.htm

.....

 

[the B]

totaladdict, don't understand a jot of economics do you! PED is effected by the existence of complimentary and substitute goods. And yes, there are substitutes or alternatives to living in distant rural areas with high transport costs that rise ever higher as oil gets ever more scarce. Leaving them. It's been the historical trend for a while, the move to cities. Been on-going for about 25,000 years odd?

Aside from that sorry, some things in the rural areas are much more expensive to provide per person. Things like laying down roads and doing the maintaince which won't be used as much, high speed/mobile telecoms or even the post, more efficient pipes for water and gas... providing public services which are generally most efficient when people are concentrated (policing, fire coverage, hospitals, secondary schools - particularly as the population tends to age more, they will close).

Why should others have to pay to sudsidise rural life in economic and environemtal terms, sorry?

 

[totaladdict]

totaladdict, don't understand a jot of economics do you! PED is effected by the existence of complimentary and substitute goods. And yes, there are substitutes or alternatives to living in distant rural areas with high transport costs that rise ever higher as oil gets ever more scarce. Leaving them. It's been the historical trend for a while, the move to cities. Been on-going for about 25,000 years odd?

Aside from that sorry, some things in the rural areas are much more expensive to provide per person. Things like laying down roads and doing the maintaince which won't be used as much, high speed/mobile telecoms or even the post, more efficient pipes for water and gas... providing public services which are generally most efficient when people are concentrated (policing, fire coverage, hospitals, secondary schools - particularly as the population tends to age more, they will close).

Why should others have to pay to sudsidise rural life in economic and environemtal terms, sorry?

Yes, I do understand economics. I also understand it's drawbacks and blindspots.

It's exactly those blindspots that are leading you to the suggestions that you're making (it appears you're incapable of looking beyond "economic" justifications).

Do you really think that those living in rural areas should simply move to the city? And do you honestly believe that cities are subsidising the countryside in environmental terms?

By the way, how do you imagine eating if there isn't a rural population?

 

[TeeJay]

...In practical terms, despite constantly rising fuel prices over the last decade, vehicle use has increased massively - to 30 million on the road this year...

The cost of motoring depends more on road tax, MOT, insurance, repairs and the cost of the car itself. This typically accounts for more than the cost of the petrol itself.

For example if someone buy a relatively cheap & old car for £1,000 (and it lasts for three years) and spend another £1,000 a year on the 'fixed costs', this equals £1,333 per year. If a car does 40mpg (150 miles per litre) then £1000 of petrol (c.1000 litres) will give 150,000 miles which only an extremely heavy driver would manage. Many people have far more expensive cars than this.

The cost of motoring has been coming down massively over the last 10 to 20 years but this is due IIRC to decreases in the *fixed* costs of motoring - ie the actual price of owning car rather than the price of petrol/diesel.

 

[totaladdict]

The cost of motoring depends more on road tax, MOT, insurance, repairs and the cost of the car itself. This typically accounts for more than the cost of the petrol itself.

For example if someone buy a relatively cheap & old car for £1,000 (and it lasts for three years) and spend another £1,000 a year on the 'fixed costs', this equals £1,333 per year. If a car does 40mpg (150 miles per litre) then £1000 of petrol (c.1000 litres) will give 150,000 miles which only an extremely heavy driver would manage. Many people have far more expensive cars than this.

The cost of motoring has been coming down massively over the last 10 to 20 years but this is due IIRC to decreases in the *fixed* costs of motoring - ie the actual price of owning car rather than the price of petrol/diesel.

True enough...

 

[TeeJay]

Why should others have to pay to sudsidise rural life in economic and environemtal terms, sorry?

This is disingenuous considering the proportion of the price of petrol that is actually due to taxation! For poor people who rely on using a lot of petrol due to where they live, their jobs etc petrol taxs are highly regressive. It is true that many 'city types' go and buy up rural cottages, but there are also a lot of badly off working people in rural areas: not only are rural wages often very low but they also have far less services and amenities. You overlook the fact that people may have various reasons to remian in a certain area - continuity of their childrens education, looking after sick and elderly relatives, wanting to hang onto a job that they actually have, some may have invested savings in a shop or farm which are not easily liquidated. Many urban people who seem to take pride in cycling everywhere and using public transport also seem more than happy to burn more than a years worth of 'petrol-equivalent' by taking an aeroplane journey or two (or more!) every year. They also seem happy to bang on about the cultural live of their home city as if they are actually paying more tax for the priveldge of having national assets on their doorstep. It reminds me slightly of the hyposcrisy of bleeding-heart leftie students decrying fees as 'inequality' when actually it is the the children from better off families - and those who will be better off - that are demanding to have more state money throw at them.

Leaving aside the more economic reasoning, you yourself bring in 'moral' issues when you mention environmental and economic costs and 'subsidising' people (ie redistribution). If you feel that there is an environmental and social argument to be made, then why not put some value on sustaining rural communities, seeking to retain rural infrastructure and skills, taking account of the social welfare of rural communities and so forth? You seem to want to bring up moral/value-judgement issues so why not bring up these as well?

By the way, how is the economics degree going?

 

[the B]

Yes, I do understand economics. I also understand it's drawbacks and blindspots.

It's exactly those blindspots that are leading you to the suggestions that you're making (it appears you're incapable of looking beyond "economic" justifications).

Do you really think that those living in rural areas should simply move to the city? And do you honestly believe that cities are subsidising the countryside in environmental terms?

By the way, how do you imagine eating if there isn't a rural population?

Because everyone in the rural population is involved in agriculture. Of course.

I think a lot of people in rural areas would move to the city under economic persuasion if prices for a lot of items - in particular, energy, the consequences. and the amenities provided - are correctly represented.


Teejay - I'd very happily see the price of jet fuel cranked up.

As for the jab at students I do think more state money should be thrown at them. You can tax the rich to do it. Something that doesn't happen enough.

Degree is going alright, start up again on the 26th

 

[the B]

Leaving aside the more economic reasoning, you yourself bring in 'moral' issues when you mention environmental and economic costs and 'subsidising' people (ie redistribution). If you feel that there is an environmental and social argument to be made, then why not put some value on sustaining rural communities, seeking to retain rural infrastructure and skills, taking account of the social welfare of rural communities and so forth? You seem to want to bring up moral/value-judgement issues so why not bring up these as well?

I, perhaps sadly, don't place a huge value on the sustaining of rural communities. It seems to be placing the value of one community type ahead of another. Why deprive suburban or urban communities of enrichment?

Why retain rural infrastructure and skills if they won't ever be used - because sustaining them is too expensive? Is the social welfare of people going to fall if they are in suburban or urban areas? Why? Is my welfare lower by being in a city?


There are mechanisms in the economy which in my opinion tend to make rural living a little too persuasive. Mostly around energy.

 

[TeeJay]

I think a lot of people in rural areas would move to the city under economic persuasion if prices for a lot of items - in particular, energy, the consequences. and the amenities provided - are correctly represented.

Correctly represented?

What kind of price per litre are we talking here?
And would you get people to pay congestion charges/pay-per-use/road tax?
How would you go about reconciling consumption taxes with the principle of progressive taxation?
Do you think that rural residents are entitles to equal amenities as anyone else? Or should it simply be an equivalent amount of money spent per person? Do you have any idea what the current situation is in this regard?

You want to spend more money on "middle class" (ie better off/children of better off) people? Would you also spend an equal amount on people who didn't go to university, so they could sleep all day and drink beer all night for three years as well (in between doing their low-wage jobs they had to take on leaving school at 16 or being excluded at 14)?

You want to tax the rich more? You would put the 22% rate up and the 40% rate up - but how far? What kind of tax rates would you like to see? Do you think the government does a good job of spending people's money for them (it currently accounts for c.40% of GDP)? You believe in big government?

Glad the economics course is going well.

 

[the B]

Yeah, have to admin, I'd tax the rich more and tax the crap out of road users.

I'd shoot for good public transport.

What kind of price for petrol - for a private motorist with no particularly urgent need (ie. disability) maybe double* what it currently is and see where we go from there.

By limiting consumption of some goods to the rich people only, a tax on the good can become progressive. Bit like, taxing luxury yachts or adding a second band of consumption tax to an expensive good.

Rural resident are entitled to the amenities as much as anyone else. Yep. Provided it is affordable. If provided amentities to rural communities was any cheaper than to an urban area, might I ask why we strangely see less given to them?


Yeah, I do want to spend more money on students and education across the board. Studenthood is not such cake walk. I'd make changes to make it less 'wasteful'. Like culling all degrees below 2.2 and making fails an instant smackdown without mitigating reasons.

Government spending is about 30% of the GDP actually. 10% of GDP is a big difference. Kind of like the difference between the USA and UK (and in fact, is spending-wise almost shown by the size of the NHS in the UK versus none in the USA, of course, there are differences mainly through the USA having military expenditure far beyond the UK). Anyway, tax the rich as needed. Government could do a better job, but I'm sure more resources wouldn't hurt.

If you're going to have government at all, make it 'big enough'. Bad markets can be more a plague than government handled ones.

*I say double, I'm really not sure. Not got the data to make an evaluation.


**I'm stuck in tonight, so I apologise in advance for being slightly obtuse to keep a lively debate going.

 

[TeeJay]

I, perhaps sadly, don't place a huge value on the sustaining of rural communities. It seems to be placing the value of one community type ahead of another. Why deprive suburban or urban communities of enrichment?

It is a moot point that petrol taxes are being used equally in the first place. It could be argued that petrol taxes fall disproportionately on rural communities yet the proceeds of these taxes are not spent on them.

You do seem to value the "student community".

Why retain rural infrastructure and skills if they won't ever be used - because sustaining them is too expensive? Is the social welfare of people going to fall if they are in suburban or urban areas? Why? Is my welfare lower by being in a city?

Again you are making all sorts of assumptions. The EU supports agriculture and the government supports 'rural heritage' (for example you can get grants to repair and upkeep dry stone walls). There is a general public demand for countryside management. But these grants don't 'trickle down' to everyone equally - poorer residents may well not benefit as much as others. People whpo contribute to the upkeep of the countryside and to keeping the place 'liveable' may well not profit as much as the people who get the grants or who actually own the bed & breakfasts or other tourist venues, despite their contributions helping make the area attarctive in the first place.

You may well have a point about wealth urban people who choose to buy a holiday cottage or second home, or people who retire to the countryside as a lifestyle option - I can't see strong argument for subsidising this. But the poorer rural residents are just as 'deserving' as the more "fashionable" urban poor, and may well be worse off when you consider they have less public transport, higher basic costs for some things, less amenities, lower wages and so forth.

You seem to be mix & matching hard nosed economics (why subsidise things that are obsolete) with socially conscious ideas (tax the rich, help the poor, protect the environment etc). What I am failing to understand is your stereotyping of rural popultions as entirely undeserving and your total denial of any value to actually having functioning and viable rural communities (and "indigenous culture" if you will). In cities most people don't blink an eye at the idea of social centres, arts festivals, community centres and support for community groups. But it seems that there is an 'if it aint urban it aint worth shit' attitude by some people, possible linked to never having much contact with rural communities and/or thinking that they consist purely of vile toffs, redneck farmers and lots of sheep.

 

[TeeJay]

By limiting consumption of some goods to the rich people only, a tax on the good can become progressive.

Your tax is so regressive that only the super rich can afford it - so much so that it become progressive?

Wtf?

We are talking about *petrol* here, not caviar! Someting that is figured into the cost of almost every single other product. Something that millions of UK residents use on a daily basis.

 

[TeeJay]

Government spending is about 30% of the GDP actually. 10% of GDP is a big difference. Kind of like the difference between the USA and UK...

Actually:

Total tax revenue as percentage of GDP 2003 (provisional)

USA: 25.4%
UK: 35.3%
Sweden: 50.8%

source: http://www.oecd.org/dataoecd/6/1/33826979.pdf

 

[TeeJay]

Don't get me wrong. I am in favour of eco-taxes. But as I said earlier in the thread, only if they are introduced *alongside* other adjustments that maintain social justice.

Another factor that impacts on the cost of transport is congestion, which would be an issue in cities even if we were driving 100% eco-friendly vehicles. There have been proposals that eventually we could replace road tax - maybe even fuel tax as well - with a variable pay-per-use system. This could figure in various factors: Location/road, time of day, type of vehicle, purpose of travel (eg lower rates or exemptions for ceratin journies or users) - you could even have a 'ration' or quota, over which you paid more for excess distance.

I think that there are a whole range of "goods" and "bads" that need to be balanced when it comes to transport: Environmental impacts (local and global), noise, congestion, road accidents, social impacts, economic impacts and so forth. I don't think that any single "magic bullet" solution is without its own problems or issues - and this applies to the idea that we should just make petrol massively expensive and just let people (and the market) sort out the resulting issues. I think that a more "intelligent" approach is both possible and desirable.

 

[the B]

Yeah, a tax can be so high on certain goods (and I do somewhat think petroleum should be considered something close to a luxury good for private use) that only the rich would buy it. Say diamonds. Or perhaps, in the future (quite seriously) petrol.

If only the rich are paying tax, it's working progressively.


Taxes fall disproportionately on the rural community. Maybe they should? To act as a disincentive to living in them?

I don't value the student community anymore than another. I think money should go into the thing because it's important for the economy as a whole and the people who go there.


EU and government support. It's vote grabbing. Not sure it makes environmental of economic sense.


Hard nosed economics does have a social conscious

In cities most people don't blink an eye at the idea of social centres, arts festivals, community centres and support for community groups. But it seems that there is an 'if it aint urban it aint worth shit' attitude by some people, possible linked to never having much contact with rural communities and/or thinking that they consist purely of vile toffs, redneck farmers and lots of sheep.

You're being more obtuse than me

 

[the B]

Actually:

Total tax revenue as percentage of GDP 2003 (provisional)

USA: 25.4%
UK: 35.3%
Sweden: 50.8%

source: http://www.oecd.org/dataoecd/6/1/33826979.pdf

Fair enough, not sure it is something to quibble on though. Or makes a difference to what is going on in the thread.

Given the size of the black economy, 30% sounds about right

 

[the B]

Don't get me wrong. I am in favour of eco-taxes. But as I said earlier in the thread, only if they are introduced *alongside* other adjustments that maintain social justice.

Same.

But this thread is about the petrol side of things

 

[TeeJay]

If this thread is about fuel protests and the issues involved then you simply can't separate out social justice from petrol prices. However you want to argue things theoretically or in some long term scenario, we still have to have a debate about the social justice or injustice of heavy taxation/prices falling on certain groups.

You have said you favour heavier taxes on the rich. How do you feel about higher prices for petrol falling on poorer people? While the urban poor tend to use public transport - eg take the bus - the rural poor simply have to bite the bullet and spend more on petrol.

You might welcome higher petrol prices for environmental reasons and you might support heavy taxes on petrol for similar reasons - but are you really saying you are happy to see poorer people being hit by both of these things?

Maybe you are saying that poorer people shouldn't be using petrol in the first place or shouldn't be living in rural areas - and therefore this increased pain will send them signals to put both of these things right?

But firstly 'shouldn't' is loaded full of value-judgements and doesn't seem to differentiate between necessities and luxuries - petrol can be used for necessary transport as well as joy-riding. This view also doesn't acknowledge either possibly very high transaction and amenity costs of relocating (eg if you have family members and childrens' schools locally) nor does it put much value on 'cultural heritage'. Far be it from me to start a camoiagn for morris dancers, but if things like stonehenge and national parks are worth preserving then maybe rural communities - as 'living heritage' - has some value as well, in the same way as many Guardian readers would be loath to see Brazilian tribes be forced into cities and lose all their traditions and culture.

Secondly, using a blunt instrument to aim at just one outcome (presumably less petrol use) regardless of all the other possible consequences and side effects, while a nice simply position to take when getting into a beer-fuelled pub argument against a petrol-head, is no substitute for an intelligent and nuanced policy that aims to balance multiple outcomes.

Finally, while economic theory can be useful, its no good hiding behind theoretical positions or arguing about far off future scenarios when people are talking in the here and now about a fuel protest motivated by immediate problems they are having in the here and now. Any policy answers have to address the here-and-now situation, and don't have to be theoretically "pure" - they do have to be politically 'do-able' and should avoid making your other aims so unpopular that people end up thinking you are the enemy. More specifically, arguing that rural communities - and truckers even - can go to hell for the sake of "green" policies would be a massively counter-productive stance to take and a gift to anti-greens.

 

[the B]

I think poorer people can face higher taxes - and the revenue from the rich can be used to make it overall, better for them.

Rurals - bite the bullet or move.


Transaction costs are one off. Rather those than continuing or perserving chaff. Bit 'creative winds of destruction'.

Are rural communities as living hertiage really that different from the rest of us? Will the hertiage die a miserable death if they relocate?

Brazillian tribes - very different, no? They have a sustainable life imo at present. Unlike rural communities at present who from where I am, appear to require subsidy to be where they are.

The utterly anti-greens can go stuff themselves with my favourite weapons of choice, logic and evidence Some policies are not immediately popular but good. Like not having a death sentence... not having bastard immigration controls etc.

The immediate problems are symptoms of being so lazy in the past about dealing with energy wasting, petrol use etc.

 

[Bernie Gunther]

You've got some basic problems.

* dependency on stored energy support
* constant input of nutrients and other materials from storage
* inescapable loss of nutrients, which is an effect from
* linearity of the nutrient handling system

You've got some aggravating factors.

* ongoing specialisation of agricultural units -
* decreasing population working with agriculture
* urbanisation
* a dependency on cheap energy
* a probable increase in fossil fuel prices

One way to deal with these problems is to:

* minimise dependency on industrial energy by shortening supply lines
* increase nutrient circulation by a changed nutrient infrastucture
* increase integration between agriculture and other social activities
* improve and support the natural enviroment

source

 

[TeeJay]

Sorry, but half of that doesn't mean anything to me. For example what does "dependency on stored energy support" mean exactly?

I don't think we were talking about agriculture per se - more about the issue of the cost of petrol to people living in rural areas where there is no real public transport.

 

[butchersapron]

Sorry, but half of that doesn't mean anything to me. For example what does "dependency on stored energy support" mean exactly?

It's quite simple i think. It means dependecy upon a finite limited pre-stored source of enegry rather than an externally renewable one.

But you've got a bee in your bonnet about 'destroying' bernie so go ahead, you're not doing very well so far.

 

[Bernie Gunther]

He does? I must admit I hadn't noticed. I'm off to bed soon, but can elaborate.

 

[butchersapron]

He does? I must admit I hadn't noticed. I'm off to bed soon, but can elaborate.

tee jay gets a bee in his bonnet now and then - when he does he threatens to 'destroy them' - normally by going through every single post they've made on here. It takes nothing to piss him off. But you're on his list - didn't you notice his repeated digs at you and your 'infamous research' last week? I wouldn't change flight pattern though.

 

[Isambard]

yeah, your a cunt. Your just another authoritarian idiot. ..........justify the government taxing the workers more. Your nothing but a licksptital.As every with your sort, its the poor that get the blame.

Not for the first time, I'll ask you to refrain from personal abuse.

Not for the first time I'll point out that you don't know the income of people in my household or my background.

You gave a whole lot of rubbish about the supposed lack of public transport in your area and the cost thereof. How it was supposedly non-existent, supposedly didn't run in the evenings. How your couldn't possibly bear to walk 1/2 a mile.

I did you a favour and looked up public transport in your area. I PROVED you WRONG!

And as for me wanting the government to tax workers more and "blame" the poor, I can only refer you to scores of posts of mine over the last couple of years.

 

[snadge]

Sorry, but half of that doesn't mean anything to me. For example what does "dependency on stored energy support" mean exactly?

dependency on fossil fuels and the mechanisms to access it ?

 

[Bernie Gunther]

tee jay gets a bee in his bonnet now and then - when he does he threatens to 'destroy them' - normally by going through every single post they've made on here. It takes nothing to piss him off. But you're on his list - didn't you notice his repeated digs at you and your 'infamous research' last week? I wouldn't change flight pattern though.

Ah OK, fair enough.

I did sort of notice actually, particularly that post you mentioned. bigfish was doing something similar too the other week. The big difference though, between having a loony bothering you on the bus and a loony bothering you on U75 is ...

the ignore button

 

[Bernie Gunther]

It's quite simple i think. It means dependecy upon a finite limited pre-stored source of enegry rather than an externally renewable one.

But you've got a bee in your bonnet about 'destroying' bernie so go ahead, you're not doing very well so far.

Yes. The principle here is this -

One of the more basic requirements for a sustainable society is that it cannot be dependent on storage for its survival. If it is, its sustainability cannot last longer than the contents of the store.

What that article I linked (from which I nicked those bullet points) is about is proposing a move towards an ecologically balanced settlement patterns, which would tend to spread the population out over the landscape with time.

The point being to find a way to live in reasonable style, while getting that oil monkey off our backs. The author analyses the areas in which an average Swedish household uses fossil fuels; looks for the potential to be made in savings in transport, heat and food. He concludes the biggest savings are actually to be made in food, by getting as much of it as possible from as close as possible to where one lives. Hence he proposes gradually reducing population density of our urban areas over time, by doing what's necessary to spread out .

Agriculture uses oil energy in roughly four ways.

Fertilisers made from oil/gas + nutrients (inc non-renewable ones).
Tractors and other farm machinery.

With these two you can cut the oil inputs by going organic and by using more human and animal power. The other two ways are trickier though.

Transport and distribution of raw materials, farm products and wastes.
Industrial processing, packaging and waste.

Those two, because you're exporting nutrients as well as using unnecessary oil, you can arguably only really tackle by changing settlement patterns in the direction of what he's describing as a "balanced settlement" which minimises oil energy use by growing most of its food within walking distance and which is able to recycle non-renewable nutrients locally instead of flushing them down the toilet. The author proposes a roadmap to move towards such settlements over say 50 years.

The big difference here is that he's looking at it as an ecologist, not as an economist. So he's saying "how do I minimise dependence on non-renewable energy?" (and nutrients) and optimising for settlement patterns that can live on sustainable energy and nutrient flows rather than allowing the market to optimise things for ... um ... whatever it is that markets optimise for ...

 

[TeeJay]

tee jay gets a bee in his bonnet now and then - when he does he threatens to 'destroy them' - normally by going through every single post they've made on here. It takes nothing to piss him off. But you're on his list - didn't you notice his repeated digs at you and your 'infamous research' last week? I wouldn't change flight pattern though.

Butchers you are talking shite as per usual and have come onto this thread - like many other threads - just to have a personal go at me. You don't have *anything* to say about the topic of this thread, do you?

You won't find a single post where I have threatened to "destroy" anyone. Feel free to go and read all my posts butchers, but I really wouldn't waste you time as you won't find it. As per usual you are making up bullshite in a pathetic effort to attack me. And as per usual it has nothing whasoever to do with the thread.

 

[TeeJay]

...rather than allowing the market to optimise things for ... um ... whatever it is that markets optimise for ...

"Individual preferences" - if you believe mainstream economists.