I have recently contended in an article (here) that the London Riots of the summer of 2011 were the cause of a perceived lack of opportunities for upward mobility. I contended that policies that raise the cost of living (zoning laws, import duties, regulations on businesses) are combined with policies that reduce the possibilities of employment as well as the rewards of employment. I put considerable emphasis on the perverse effects of occupational licensing and its rise in the United Kingdom.
There is considerably litterature on the issue of occupational licensing in the United States (where nearly 30 % of occupations are subject to licensing) and the possible effects it has on low skill labour (mostly uneducated natives and African-Americans). There is less data available on the case of the United Kingdom, but the little data we do have does point to a steady rise in the number of jobs being more tightly regulated through licensing (see graph below derived from this paper)
What are excess profits? How do we define them ? Companies that produce goods and services that we will demand regardless of price (oil and pharmaceuticals) are believed to be benefitting from the ineslaticity of our demand and hence charging us excessive profits. However, what would you say that periodicals publishers and book publishers have higher profit margins than oil producers and refiners?
I took the time to use Yahoo! Finance to see how large (or small) are profit margins by industry. It is an interesting since oil and gas refining, generic drug manufacturing, oil and gas pipelines and major oil and gas integrated firms have net profit margins of 2.9 %, 4,7 %, 5.3 % and 6.8 %. This is compared with confectioners at 7.3 %, toys and games at 9.6 %, soft drinks at 14.2 % and periodical publishing at over 52%.
See the table below
With my friend and colleague Pierre Simard from the École Nationale d’Administration Publique in Québec city, I have published an op-ed in the second largest french newspaper in North America, La Presse, arguing that free trade and free markets have made the world safer. In short, I argue the case of the capitalist peace. In reaction to the article, some have criticized our points despite quoting a vast series of econometric articles (from Erich Weede to Steven Polachek without forgetting Erik Gartzke, Alan Taylor, Reuven Glick and numerous others). So I have decided to include some graphics derived from the Human Security Report which show a reduction in violence since the 1950s – meaning since the beggining the Thirty Glorious, the reduction of formal trade barriers, the explosion of foreign investment, the reduction in transaction costs, cheaper communications and an increase in economic freedom.
Indeed, a safer world…
Note : All the data will be republished in my “data sets” section.
In my recent interview on CHOI Radio X, I mentionned that income growth for unilingual francophones in Quebec has been the the fastest of all linguistic groups since 1970. This claim has been questionned by some critics of mine. To dissipate any doubts about the validity of my claims, I am adding a new data set to this blog dervied from a 2007 paper by Vaillancourt, Vaillancourt and Lemay published at the C.D. Howe. I am also adding the two following graphs as evidence.
As we can see, unilingual francophones and bilingual francophones (first language) have the fastest growth of all since 1970. This means that we can see the following convergence in incomes as we can see in the following graph.
For those who are still skeptical of this claim of mine, you can also consult the 2008 article of David Albouy in the Canadian Journal of Economics which evaluates the wage gap betwen anglophones and francophones in Quebec since 1970. He, like Vaillancourt and al., arrives to the same conclusion regarding convergence in income.