The French word for taxation

For those who are not so immersed in public economics, it is safe to say that most people agree Goverment (big G) should be as small and efficient as possible, subject to meeting the needs of its electorate. When it interferes with an otherwise unencumbered market, it should be for specific reasons: information asymmetry, externalities, etc. – poor price signalling, generally.

Along the way, Government should institute, as agent for the economy as a whole (now and future), policies that secure sustainable, stable long-run economic growth (increasing technological change, increasing labour productivity, increasing Efficiency with respect to the use of finite resources, etc.).

All of which serves to make this article in the International Herald Tribune very amusing:

Sarkozy proposes taxing new technology to finance the old

In a move that could profoundly reshape the media landscape in France, President Nicolas Sarkozy on Tuesday proposed banning commercials from public television and making up for some of the lost revenue with a first-of-its-kind tax on the Internet and mobile phones.

A government tax on Internet connections would be virtually without precedent and could be politically controversial, given that public policy experts say that Internet access drives a country’s economic growth and productivity.

…

In France, competition for Internet customers is intense, resulting in prices that are well below those of elsewhere, and an “infinitesimal” tax would presumably not discourage potential subscribers. The French pay an average of 37 percent less than the OECD average, or $36.70 a month as of October, compared to $49.36 for all 30 countries belonging to the group.

The share of residents with fast Internet connections in France is also slightly higher than elsewhere – 22.5 subscribers per 100 inhabitants, compared to 18.8 for the OECD as a whole.

But policy experts mostly advise making the Internet cheaper and not weighing down its growth with extra charges. The U.S. Congress last year extended a federal moratorium on Internet taxes for the next seven years.

While it is far from widespread, there are a few other examples of government levies on new technologies or communications to help older ones. In Europe, many countries tax blank storage media like CDs and devote that money to support music. Turkey and South Korea have also used telecommunications taxes to raise money for other industries.

Sarkozy’s proposal was part of a dense salvo of measures fired off in a New Year’s speech aimed at redirecting the focus from his Hollywood-style love affair with the Italian singer Carla Bruni to his vision for France.

In the 45-minute speech, Sarkozy declared the death of the 35-hour week, suggested that large companies may have to double or triple the part of their profit they are obliged to share with employees and vowed to replace gross domestic product with a more holistic indicator of economic welfare that he has commissioned from two Nobel laureates in economics, Amarthya Sen and Joseph Stiglitz. He also said that he would put a state bank in charge of defending French industry against sovereign wealth funds and other financial predators.

They had it at the title, really. Taxing new technologies – that are popular – in order to bolster old technologies – that are not – is not a great way to go about things. It’s a good way to raise money: demand for internet access is going to be fairly inelastic, at least for the people using it. Getting that ratio reversed would make a lot more sense, though, and a tax won’t contribute at all to Middle France’s willingness to embark on new technology.

The tax on blank media is also a poor comparison: blank CDs are almost guaranteed to be used to copy protected music/film. The internet? Not so much. I don’t like that sort of equivalency (and I’m welcome to start my own newspaper, I know).

The two things that are most interesting, yet received the least attention in the article, are this apparent “GDP plus” measure of well-being and welfare, which will be very interesting to observe, as well as the plan to set up a defense against predatory behaviour by Sovereign Wealth Funds. The latter is a little paranoid, I think, but then France is fairly high on the list of xenophobic economies.

bio-batteries vs. bio-cars vs. food?

Via the blog inhabitat:

Next time that someone asks you if you have some sugar, they may actually need it for something else other than their coffee addiction. They could be using it to power their walkman. Sony, the Japanese electronics maker announced that they have developed an experimental ‘biobattery’ powered by carbohydrates, or as it is most deliciously known, sugar.

The battery presented by Sony showed the highest output ever by a battery of this kind at a very respectable 50mW of power, or about enough to power a portable MP3 player. The Bio Battery is a type of battery that uses energy sources such as carbohydrates, amino acids and other sources of enzymes and it is based on the work of Professor Kenji Kano from Kyoto University. It is still a bit big, with a length, height and depth of 39mm all around an it does take about a minute to get started. Still, they way that it works is simply nothing short of amazing. Simply add sugar to the battery and voila, instant power. You don’t even have to mix it.

From the Sony site:

The research results presented here have been accepted as an academic paper at the 234th American Chemical Society National Meeting & Exposition in Boston, MA USA, and were announced at 11 am local time on August 22, 2007.

It does have a video:

which is cool.

I feel inclined to disagree with Inhabitat. Sony’s announcement:

Sugar is a naturally occurring energy source produced by plants through photosynthesis. It is therefore regenerative, and can be found in most areas of the earth, underlining the potential for sugar-based bio batteries as an ecologically-friendly energy device of the future.

Sony will continue its development of immobilization systems, electrode composition and other technologies in order to further enhance power output and durability, with the aim of realizing practical applications for these bio batteries in the future.

Inhabitat’s post closes with

So, is sugar the future for battery powered devices? It sure would be nice to if this could be the case.

I commented earlier that the central problem, as I see it, is the demand for energy (via our electronic entertainment fetishes)

I say “inclined” – this is related to food shortages, the Bio-fuel Thing. It doesn’t (yet) truly apply to sugar:

In spite of growing ethanol demand, there is plenty of sugar in the world. On May 24, 2007, the USDA said that 2007-2008 world sugar production will total 163.3 million tons, up from 161.3 million tons the previous year. World ending stocks are expected to increase 6.1 million tons to 45.1 million tons, or 29% of annual use. Brazil, the world’s largest producer, is expected to produce 32.85 million tons of sugar in 2007-2008, up from 31.60 the previous year. Beware: the USDA commonly revises its world data as far back as four years or more.

The International Sugar Organization increased its latest estimate of the 2006-2007 world production surplus to roughy 9 million tons. For 2007-2008, they expect record high production of 169.6 million tons to result in a production surplus of 10.8 million tons. On August 14, 2007, Czarnikow Sugar predicted that the world would produce a record high 11 million ton surplus in 2007-2008 after adding 10 million tons in 2006-2007. Sugar is a commodity that is grown on every continent, but Antarctica, and producers are responding aggressively with more production.

Bio-fuels still risk food crops. Ethanol, less so: I honestly think that the idea that pouring sugar into our petrol will somehow keep Jim Kunstler’s Happy Motoring going has been discredited. Then there is the political economy of sugar.

This is all premature. Hopefully not paranoid and angry (note to self: do not write posts while listening to Marc Maron). Nothing I’ve seen even identifies how much sugar is needed. For all I know we’ll be going to Starbucks, taking two for our coffee and one for our iPod. Who knows. Hassling technology so early is a little harsh. I just have a built-in negative reaction, in a world with the sorts of agricultural shortages so surely this close to hand, to all the new uses people are thinking up for food. I prefer crops to eat. Part of the reason I’m vegan is because cows are a waste of grain, for Cliff’s sake.

Google and eBay BFF again

While pottering around at Business Weekly.

And thus ends an amusing couple of weeks of blue chip churlishness and childishness. I wonder what they learned. Google ultimately abandoned its plan for the party that started the spat in the first place. EBay has learned it needs its partner-in-internet-traffic Google after all, else it would not have returned. They also seemed to have learned that they don’t need AdWords as much as they may have thought – it’s going to spend less than the previous USD25m, instead spending more on AOL, Yahoo and Microsoft.

Nobody has counted hard losses – USD450,000 per day in revenue for Google, 10% of traffic to eBay (although it only fell 7% – due to what were called organic results, when a google search comes up with eBay anyway, AdWords or no AdWords).

According to MSN’s Money Central they had different market reactions to the spat, specifically: eBay’s share price reacted poorly (it was the 15th):

:

While Google’s reacted well (if it was reacting at all)

Both share prices responded positively to the reunion – eBay yet to return to pre-tantrum levels, indicating that perhaps the market doesn’t agree with them about the emancipation from AdWords of its incoming business. Google’s share price mostly did its own thing for the period.