Ed Conway Profile picture
Aug 23, 2019 14 tweets 5 min read Read on X
What can we learn about capitalism from this valley in Mallorca? My @thetimes column: thetimes.co.uk/article/what-m…
This is Sóller. A town in the north of Mallorca with a pretty church, lovely botanical gardens and a quaint tram that trundles down to the sea. But the thing it’s prob best known for is... 1/
Oranges. The orange groves, or “huertas” around Sóller (see pic) produce oranges of a particular sweetness and succulence. Louis XIV used to demand only to be served oranges from Sóller. Take it from me, they’re really juicy and lovely. 2/
But orange trees are relatively thirsty and rainfall in Mallorca is not esp frequent, so there wouldn’t be Sóller oranges without a complex system of irrigation canals originally constructed by the Moors hundreds of yrs ago. You see them all around the valley 3/
If you’re a farmer you’ll be entitled to a certain no of hours of water each week, after which it’s yr responsibility to switch a gate, diverting water onto yr neighbour downhill (pics show one of the junctions & one of those gates, which in practice is just a rock in a hole) 4/
The striking thing abt this system is it’s managed and enforced not by the Ajuntament (town hall) or a company but by the farmers themselves. If you forget to move your rock you’ll soon get a visit from an irate neighbour. The COMMUNITY manages this common resource (water) 5/
And this is not really what conventional economics implies. The whole point of the “tragedy of the commons” is that it’s a tragedy: people are doomed to deplete common resources because someone will always take advantage. But Sóller’s orange groves show that’s not quite right 6/
Indeed it turns out there are hundreds of examples of small communities coming together to manage common resources. Elinor Ostrom won a Nobel memorial prize for her work cataloguing them. Her Nobel speech is a must read on this topic [pdf]: nobelprize.org/uploads/2018/0… 7/
One of Ostrom’s examples was the orange growers around Valencia, who operate a very similar system to the one in Sóller. Here’s the map from the relevant chapter of her seminal work Governing the Commons 8/
Ostrom found that actually these community managed systems tended to be MORE efficient than those managed top down by governments or companies. This is the exact opposite of what conventional economics and the tragedy of the commons suggest. And it’s an important reminder... 9/
We often assume that if there’s the risk of a market failure the obvious solution is either top down regulation or slicing something up into parcels of privately owned land/resource. Ostrom’s work suggests there is a better bottom-up alternative 10/
Of course there are many provisos. Small community schemes to manage common resources prob won’t solve climate change or overfishing since these issues are too vast. Still it’s striking how often ppl trot out the “tragedy of the commons” w/o remembering it’s not that simple 11/
Before anyone pipes up, yes that includes me; I made a whole documentary about problems facing the oceans which talked extensively about the tragedy of the commons 12/
Anyway plenty more on this in my @thetimes column today thetimes.co.uk/article/what-m… 13/13

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More from @EdConwaySky

Mar 18
NEW
Britain's motoring lobby group the @SMMT has insisted that an unprecedented 2,000% increase in car exports to Azerbaijan has NOTHING to with Russia and is explained by the fact that this former Soviet state is a “flourishing market in its own right”.
This is rather... odd
🧵 Image
Before we get onto that, some background (thread on this here👇).
TLDR: UK car exports to Russia have collapsed, because of sanctions. But UK car exports to countries neighbouring Russia have suddenly risen by nearly the same amount. Esp Azerbaijan
Following my original report we now have new figs on UK car exports.
They show flows to Azerbaijan have continued. £42m in Jan. 3rd highest EVER.
Now there's no way of being 100% sure what's going on here. you can't track consignments beyond Azerbaijan (if they ever reach Az) Image
Read 13 tweets
Mar 12
🚨The strange tale of British luxury cars & Russian sanctions🚨
🧵A thread on some v striking charts which raise some disturbing questions abt the car industry.
Let's start at the start.
Wealthy Russians love high-end British cars.
Don't just take it from me. Take it from her 👇
So when Russia invaded Ukraine, it was not without significance that all Britain's major carmakers said they would stop sending their cars to Russia.
Anyway, shortly afterwards, the UK imposed sanctions which made it illegal to do so anyway...
There are two sanctions of note here.
First, UK companies cannot send "dual use" items to Russia which could be turned into weapons.
Second, there was a specific ban on the sale of any car over £42k👇
So it's pretty simple. No cars. Esp not luxury cars. legislation.gov.uk/uksi/2022/452/…
Image
Read 15 tweets
Mar 6
💷BUDGET THREAD💷
A few thoughts on what was supposed to be a big event but ended up feeling, well, a wee bit thin.
And that’s the first thing to say.
Strikingly, this Budget was HALF as big as the Autumn Statement. Look at the difference between the scorecard totals 👇
Image
Image
Was it a tax-cutting Budget?
I mean… not really.
Well, OK, the net impact is taxes aren’t going up as quickly as they were 6 months ago.
But (and I think this is pretty crucial) THEY’RE STILL GOING UP. The tax burden will be higher at the end of this Parliament than before.
Here’s a good illustration of that.
The bars here show you the impact, across the economy, of the decision a few Budgets ago to freeze tax allowances. The bars are in negative territory.
People are paying more in taxes as they get dragged into higher thresholds… Image
Read 14 tweets
Feb 23
🧵Here's a thread about an obscure economic theory from a century and a half ago, which is about to become a MASSIVE deal.
⚡️It helps explains why tackling climate change is going to be v v hard. Some say impossible.
The story begins with this building👇
Yes it's the @SphereVegas.
Not just a massive entertainment venue but also the world's biggest screen. By all accounts it's an amazing spectacle both outside and in, where there's also a ginormous wraparound LED screen (also one of the biggest anywhere)
Get up close to that enormous exterior screen & it looks v different.
You see an array of little glowing pucks, each one decked with 48 light emitting diodes (LEDs). These act as the "pixels" of the image you see from miles around. These things are magic businessinsider.com/what-the-las-v…
Image
Read 32 tweets
Feb 21
🚨How British companies are bolstering Vladimir Putin’s war machine🚨
A depressing thread.
But an important one.
With some pretty shocking charts.
Let’s begin with the “official” picture. It suggests UK trade with Russia has collapsed since Feb 2022. Down by 74%… Image
Now let's fill in the data.
Look how we're no longer exporting cars or heavy machinery to Russia. Because the govt is well aware this stuff could be repurposed into weapons. So the official line is that this is a big success story.
Looks like Russia's economy is being starved Image
But clearly the Russian economy isn't doing as badly as all that. Indeed Russia is due to grow faster than any G7 nation this year 👇
And that's just the economy. Now look at the battlefield and Russia is looking v strong. No shortage of weapons/drones etc despite sanctions
Why? Image
Read 17 tweets
Jan 20
With Tata steel having just confirmed the closure of the two blast furnaces at Port Talbot, here are a few important datapoints.
First, UK steelmaking has collapsed faster, over the past half century, than ANY other country in the world save for Venezuela.
Pretty shocking👇 Image
The Tata plan is to replace the two blast furnaces with two electric arc furnaces.
There are some strong arguments - not all of which come back to net zero.
One is that Britain produces more than enough scrap steel to satisfy its needs. At the moment this is mostly exported Image
Electric arc furnaces exist to RECYCLE steel via a massive electric current.
UK has long been an outlier in having v few of them. Look: less, proportionally, than nearly any other country in the world.
Essentially we stuck with blast furnaces far longer than most other nations... Image
Read 10 tweets

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