Of Population Pyramids and Value Chains

It is by now well known that the main hope for developed societies subject to rapid population ageing who wish to maintain their relative standard of living lies in increasing their collective productivity more rapidly than they increase their dependency ratio via-a-vis the older age groups. Now in the comments thread on the recent ‘Reform is a Dirty Word‘ post I ventured to say that I found it obvious that at some stage we would reach a point where the rate of population ageing was going to outstrip the rate of productivity increase (in which case relative income per capita would inevitaby start to fall). David, unsurprisingly, asked me why I thought this to be the case. I was not happy with the response I offered (which was essentially some ‘rigmarole’ about the biology of ageing which is coming in a separate post), and since that time I have been scratching my head trying to find a simple way to get this point across. Perhaps I now have one.

All you need to get to grips with what follows is a basic understanding of geometry and a vague interest in football.
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The Danish Job

This is really a hybrid post, although perhaps the unifying theme – for reasons which should be clear by the end – is Denmark.

In the first place Danish journalist Kjeld Hansen has a hard-hitting article in EU Observer about just what does actually happen to all that money paid-out in the form of agricultural subsidies (hat tip New Economist), whilst in the second one there is news today that the Commission is preparing a position paper on the EU’s social model for discussion at the October 27/28 summit.
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Better News on Agricultural Tarrifs

For once something positive to report:

After months of deadlock, the Doha round of global trade talks has taken a big step forward, thanks largely to an abstruse but important deal over agricultural tariffs….On May 4th, negotiators from America, the European Union, Brazil, India and Australia hammered out a formula for converting specific tariffs on agricultural goods, such as 10 cents per pound in weight, into percentage (or so-called ad valorem) tariffs.

Measuring all tariffs as a percentage of the goods? value is a prerequisite for further progress in talks about reducing trade barriers for agricultural goods. Under the broad outline for the farm-trade talks agreed last summer, countries pledged to divide their tariff barriers into different tiers. Higher tariffs will be cut more than lower ones. Not surprisingly, those countries that protect their farmers most wanted a conversion formula that translated specific tariffs into lower percentages, as that would imply smaller cuts down the road. In the end, the deal was based on a compromise proposal made by the European Union.
Source: The Economist

Obviously this is a dense technical issue, but the good news is that the EU has moved to break the deadlock. The slightly ironic detail is that the meeting where the agreement was ironed-out was held in Paris with the French referendum campaign as a background. Still I suppose this puts the suggestions that current EU policy is being driven exclusively by the needs of obtaining a ‘yes’ vote in some sort of context.

Also, as the Economist notes there is plenty yet to do. In the first place all the details on agriculture have still to be worked out. And then there is the tricky question of services……………

Around the Blogs: CAP etc

I finally got around to looking at the Guardian’s new campaign blog, KickAAS, which is dedicated to abolishing agricultural subsidies, certainly a laudable goal., and while I don’t know if it’ll be a regular read, it’s surprisingly non-boring. It’s also interesting as a phenomenon, especially for those buying into the hype on poli blogs.

Via their comments section I discovered ideosyncratic conservative Back40’s blog, where was delighted to find a coherent and reasoned defense of CAP*, probably the first time I’ve seen such a thing. The blog’s full of original takes on original choices of topics. (except when talking about ‘the liberal media’.)

Who knew agricultural subsidies could be fun?

Less fun is the news that Matthew Yglesias will do all his political blogging on The American Prospect’s staff blog – unaccredited. I join his commenters in wondering why they didn’t give him his own blog, which would presumably get them more of his considerable readership, and thus get TAP more revenue and exposure. Especially since he on his own has posted more frequebtly than all TAPPED contributors combined.

This is sad since Yglesias was one of my favorite’s bloggers and this will obviously not be the same thing.

Update: Henry Farrell gives us a nod (thank you!) and responds to Iain’s post. In comments, ‘Doug’ made this brilliant observation, that I gotta reproduce here:

“There?s an interesting article to be done on what fantasies European integration evokes from local paleocons. In Britain, it?s apparently Guy Fawkes. In Poland, it?s godlessness, Communism and abortion. In Hungary, it?s Jews and maybe Germans. In Germany, it?s waves of invaders from the East. There?s probably a specific set for almost any EU or soon-to-be EU country that would tell outsiders a lot about the neuroses in national history. And these, in turn, tend to draw on political tropes that are so old fashioned you wonder what steamer trunk someone lifted them out of.”

In Sweden, of course, it’s an evil neoliberal plot to destroy the welfare state.

*The EU’s Common Agricultural Policy.