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Retired since 2012.
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The dollar may be the dominant global currency for the moment, but there are real questions about how long this moment will last. The argument that dollar-pegged stablecoins will extend it rests on a slew of shaky assumptions and leaves key questions unanswered.
Whereas geothermal development is a protracted process and requires significant risk-tolerant finance, dams and solar farms easily attract donor money, offering the kinds of quick victories politicians crave. But for Africa, geothermal energy may well be the key to more secure, sustainable, and affordable supplies.
Here's a surprising stat: from 1845-1960, UK house prices pretty much kept pace with inflation – a house you'd bought 20 years ago could only be sold for more-or-less what you paid for it (technically, houses rose about 0.25% ahead of consumer prices).
From 1960-1979, house prices started to nudge ahead of inflation, averaging gains that were 1.75% higher than consumer prices. But it wasn't until 1980 that the annual above-inflation price increase of houses grew to 3%. Steve Keen's "Remedies for Ridiculous House Prices" explains what happened to make housing so eye-wateringly expensive (and how to make it affordable again):
https://profstevekeen.substack.com/p/remedies-for-ridiculous-house-prices
Keen unpacks just how dramatic this change is: since the Thatcher years, house prices have doubled every 23 years. Before 1960, the house prices rose so slowly that they would have taken 280 years to double (which is to say, the fate of most houses was to turn to rubble, not to double).
So what did Thatcher do to make homes so eye-wateringly expensive? The high-level explanation is that the UK – like much of the world – transformed its housing stock: not a way provide the basic human right to shelter, but rather, an asset:
https://pluralistic.net/2021/06/14/euthanasia-of-the-rentier/#georgeism
Transforming a human necessity into an asset is a terrible idea. Governments work to increase the price of assets owned by actors in their economy. But increasing the price of housing only benefits the minority who own houses, while everyone else – everyone who needs a roof over their head – suffers. For a comparison, imagine if our governments instituted a policy of making some other necessity as expensive as possible, say, food or water. Transforming shelter into an asset class was always going to end badly.
Keen is an econ prof, and the point of this piece isn't merely to observe this remarkable shift in the economics of having a home, but also to trace the policy choices that led us to this moment, and to propose policies that could change things so that everyone can have a home.
So what did Margaret Thatcher do to destroy the chances of everyday Britons to have a home? Well, this is Margaret Thatcher, so if you guessed the answer was "deregulation," you'd be right. Prior to Thatcher's deregulation, home loans in the UK mostly originated with "building societies," a specialized lender whose operations are fundamentally different from the operations of a bank.
Here's the difference: when a building society makes a home loan, it withdraws money from a regular bank account at a regular bank, much like your savings account. In order for your building society to credit your mortgage account by £100k, there must be a corresponding decrease of £100k in its savings account (just like when you send £10 to a friend, you have £10 less and they have £10 more).
But that's not how it works when a bank originates a loan. Banks are "fiscal agents" for the UK's central bank, the Bank of England. That means that banks can create new money, simply by crediting one of its depositors' accounts. When a bank loans you £100k to buy a house, £100k in new money is created. Banks don't raid other depositors' accounts for your loan – they make new money, out of thin air.
So after the bank originates your loan, your account has £100k more in it, and the bank has an IOU from you for £100k, which sits on its books as an asset. In the moment the money is created, the bank makes £100k in new money for its balance-sheet.
Every time a bank issues a new mortgage loan, the money supply increases – more money is added to the economy. Thatcher deregulated mortgage lending, and after that, the majority of UK mortgages came from banks, not building societies. Every new mortgage increased the supply of money in circulation in the UK.
As Keen writes, this precipitated an "explosion" in house prices – and in household debt, which rose from 20% of GDP to 80% of GDP by the time of the Great Financial Crisis. Since Thatcher, house prices have risen by 350% more than consumer prices.
Thatcher's deregulation "set off a vicious cycle": the existence of more mortgage debt made house prices rise (when banks supply more bidding money to buyers, buyers bid higher sums). As housing prices went up, housing could be used as collateral for still more loans, which encouraged homeowners to stake their homes to borrow money in order to buy more homes to rent out. Because they have so much collateral (an overpriced home), they can borrow so much (from banks that can create money) that they are able to outbid people who don't have a home yet and just want to buy a home so they can live in it.
This is Keen's diagnosis, but the real question is, what do we do about it? The UK housing situation has been vapor-locked, because there's a powerful voting and donating bloc of homeowners who want to keep house prices high, both to maintain their personal net worth, and to avoid having their "chained mortgages" collapse when prices fall and they suddenly no longer have enough collateral and the banks demand repayment.
This is where Keen's proposal gets really interesting. In this installment, he proposes two policies that break the deadlock, offering a glide-path out of the housing crisis, rather than a crash.
The first of these policies is deflationary – it will lower prices. It's called the "PILL" ("Property Income Limited Leverage").
With the PILL, the most a bank could offer a housebuyer for a mortgage loan would be some multiple of the rental income from the property they're buying. Say that multiple is 10, and the home you're trying to buy would rent out at £50k/year: the largest mortgage you'd be allowed to take would be £500k (even if you're not buying a home to rent it out, you'd still be subject to this cap, since potential rental income is a large determinant of the price of a home).
Keen notes that UK rents are really high, but property prices are even higher – property prices (and mortgages) have risen faster than rents. The average London home price is about 25x the annual rent it generates, and London mortgages are about 20x the annual rent for the properties those mortgages cover.
The PILL would cap mortgage issuance at the current multiple (so in London, about 25x annual rent), but that number would be gradually reduced, a few points per year, until it reaches about 10x annual rent. This will have the effect of making homes a much less attractive asset-class for speculators, gradually driving "investors" out of the market, so that the majority of homebuyers would be people who were in the market for somewhere to live.
This will make houses cheaper over time, and the majority of Britons (who can't afford to buy a home) would like this. But house-rich Boomers would not, and for good reason: the austerity-starved UK state has slashed benefits for everyone, and older people rely on selling or borrowing against their homes as a way to remain sheltered, fed, and cared for as they age.
How do we win those Boomers over and stop them from scuttling affordable housing (again)? That's where the second proposal kicks in: AHA (the "Affordable Housing Authority"). This is a system for making homes more valuable, offsetting some of the reductions from the PILL, but without denying homes to people looking for somewhere to live.
The biggest barrier to buying a home isn't the price of the home – it's the price of the home and the price of the mortgage. Decades of mortgage interest vastly increase the total cost of a home, and the interest on a monthly mortgage can make the difference between an affordable home and one that makes you "house poor" (where the cost of your home eats up so much of your income that you struggle to pay for heating, groceries, transportation, etc).
Here's Keen's math: say you're a median UK household (£37k/year in disposable income) and you buy a median house (£270k) with a 10% deposit (what Americans call a "down-payment"), at 7% interest. Over a 25-year mortgage, your monthly payments will be £20.6k/year, more than half of your disposable income.
Not only is this more than you can afford – it's also so much that you just won't get a mortgage from a bank. They'll look at those numbers and decide that you can't afford to pay back this loan (they'd be right, too).
But what if we trim that interest rate to zero? At 0% interest, the annual payments for your mortgage go from £20.6/year to £9,300 per year – an easily affordable sum for the median household.
So the question is, why do we pay so much to the banks in interest? The Econ 101 answer is that banks take a risk when they loan out their depositors' funds, and they need a reward and incentive to take that risk. But banks don't lend out deposits: they create deposits. When you take out a £100k mortgage, the bank adds £100k to your account, without taking it from anywhere else. Banks are "fiscal agents" of the national bank, and they are permitted to create money this way – and then charge you rent (interest) on that money they can create for free.
Keen's AHA is a different kind of lender, a publicly owned one that creates money in exactly the same way as banks do, but without charging interest. The AHA is charged with offering loans solely to people trying to buy a home who have been priced out of the market. These loans will drive property prices up (by putting more buyers into the system), offsetting some of the price declines created by the PILL.
Other than the fact that AHA loans won't come with interest, these loans will work like regular mortgages: the borrower will pay them off every month, until they have paid back the entire principal. If they default on the mortgage, AHA can foreclose on the house and sell it off to get its money back. AHA always gets its money back and costs nothing – on balance – to operate.
Do interest free loans sound like a communist plot to you? Keen asks us to consider such noted socialist proponents for this ideas as Henry Ford and Thomas Edison, who railed against financing the Muscle Shoals hyrdroelectric plant with bank loans, instead insisting that the national bank should simply create the money to make those loans:
https://timesmachine.nytimes.com/timesmachine/1921/12/06/98768710.html?pageNumber=6
Here's Edison:
[Ford] thinks it’s stupid, and so do I, that for the loan of $30,000,000 of their own money the people of the United States should be compelled to pay $66,000,000—that is what it amounts to, with interest. People who will not turn a shovel of dirt nor contribute a pound of material will collect more money from the United States than will the people who supply the material and do the work. That is the terrible thing about interest.
As Keen points out, it's not merely that the banks that currently issue mortgages don't "turn a shovel of dirt or contribute a pound of material" – they simply will not issue a mortgage to a median buyer. The median buyer can't get a mortgage, so the system is rigged to make them pay someone else's mortgage through their monthly rents, every month until they die.
AHA cuts the banks "out of a market they won't even enter."
Now, it's true that current financial rules (foolishly) ban the Treasury from having a negative balance at the Central Bank. But we don't have to repeal those rules to make this work: the Treasury can offset AHA loans by offering bonds to private banks.
These two policies create "winners all round." New home buyers can afford a home. Banks get interest from AHA bonds to offset losses from limits on mortgage lending. Current home owners get a cushion to protect their net worth even as homes become more affordable.
The loser is the investment sector, the City boys who buy and sell mortgage debt. And you know, fuck those guys.
Keen finishes by teasing one more policy prescription that he thinks will tie this all together: the intriguingly named Modern Debt Jubilee, a way to "to reduce private debt, but in a way that doesn’t cause an economic collapse," which he says he'll cover in his next post. Can't wait!
How close are we to solid state batteries for electric vehicles? https://arstechnica.com/cars/2025/10/how-close-are-we-to-solid-state-batteries-for-electric-vehicles/
The Fluke That Brought Us The Discreet Eliminators Series https://horrortree.com/the-fluke-that-brought-us-the-discreet-eliminators-series/
Q Timex 1975 SSQ Digital Reissue https://timex.com/products/q-timex-1975-ssq-digital-reissue-38mm-stainless-steel-bracelet-watch-tw2y06100
The App Store Was Always Authoritarian https://infrequently.org/2025/10/the-app-store-was-always-authoritarian/
The first evidence of a take-off in solar in Africa https://ember-energy.org/latest-insights/the-first-evidence-of-a-take-off-in-solar-in-africa/
#20yrsago TV on the Internet versus IPTV https://web.archive.org/web/20051013090228/http://gigaom.com/2005/10/11/iptv-versus-tv-over-ip/
#20yrsago Privacy and access-control in America’s theme-parks https://archive.epic.org/privacy/themepark/
#20yrsago Why hotel WiFi sucks https://web.archive.org/web/20090917145044/https://wifinetnews.com/archives/2005/10/ny_times_v_wall_st_journal_on_hotel_internet_fees.html
#20yrsago Vet’s obit: “send acerbic letters to Republicans” https://www.legacy.com/us/obituaries/chicagotribune/name/theodore-heller-obituary?id=2437473
#15yrsago Canon’s printer/photocopier blocks jobs based on keywords https://www.itnews.com.au/news/canon-blocks-copy-jobs-by-keyword-235047
#15yrsago Tom Waits and Preservation Hall Jazz Band release limited-edition 78RPM record and matching limited edition record-player http://www.tomwaits.com/news/article/108/Preservation_Hall_Jazz_Band_Tom_Waits_On_78_rpm_Vinyl/
#15yrsago Koster’s “Fundamentals of Game Design” https://www.raphkoster.com/2010/10/12/the-fundamentals-of-game-design/
#15yrsago Pratchett’s I Shall Wear Midnight, sentimental and fun book about a witch among enemies https://memex.craphound.com/2010/10/12/pratchetts-i-shall-wear-midnight-sentimental-and-fun-book-about-a-witch-among-enemies/
#15yrsago Depressing million-dollar London homes https://www.oobject.com/category/depressing-million-dollar-london-property/
#15yrsago Library of Congress: Copyright is killing sound archiving https://www.osnews.com/story/23888/us-library-of-congress-copyright-is-destroying-historic-audio/
#15yrsago Irish High Court strikes down “3 strikes” copyright rule https://web.archive.org/web/20101012083637/http://www.irishtimes.com/newspaper/breaking/2010/1011/breaking32.html
#15yrsago Rise Again: would you rather be killed by zombies or Blackwater mercs? https://memex.craphound.com/2010/10/11/rise-again-would-you-rather-be-killed-by-zombies-or-blackwater-mercs/
#10yrsago Funny because it’s true: “Tories to build thousands of affordable second homes” https://www.thedailymash.co.uk/politics/politics-headlines/tories-to-build-thousands-of-affordable-second-homes-20151008102712
#10yrsago Facebook UK made £105M in 2014, paid £35M in bonuses, and will pay £4,327 in tax https://www.theguardian.com/global/2015/oct/11/facebook-paid-4327-corporation-tax-despite-35-million-staff-bonuses
#10yrsago Economics research considered unreplicable https://www.federalreserve.gov/econresdata/feds/2015/files/2015083pap.pdf
#10yrsago The hockey-stick from hell: US incarceration per 100,000 people, 1890-today https://www.vox.com/2015/10/11/9497161/incarceration-history
#10yrsago Read: Austin Grossman’s moving text-adventure story “The Fresh Prince of Gamma World” https://www.wired.com/2015/10/excerpt-fresh-prince-of-gamma-world/
#5yrsago The herd immunity conspiracy https://pluralistic.net/2020/10/12/redeeming-hackers/#herd-immunity
#5yrsago Attack Surface in Wired https://pluralistic.net/2020/10/12/redeeming-hackers/#origin-stories
#5yrsago Basic income works https://pluralistic.net/2020/10/11/means-testing-conundrum/#ubi-v-bi
#5yrsago Hong Kong's ghost protest posters https://pluralistic.net/2020/10/11/means-testing-conundrum/#seeing-ghosts
#1yrago Lina Khan's future is the future of the Democratic Party – and America https://pluralistic.net/2024/10/11/democracys-antitrust-paradox/#there-will-be-an-out-and-out-brawl
Los Angeles: Enshittification with David Dayen (Diesel), Oct 16
https://dieselbookstore.com/event/2025-10-16/cory-doctorow-enshittification
San Francisco: Enshittification at Public Works with Jenny Odell (The Booksmith), Oct 20
https://app.gopassage.com/events/doctorow25
PDX: Enshittification at Powell's, Oct 21
https://www.powells.com/events/cory-doctorow-10-21-25
Seattle: Enshittification and the Rot Economy, with Ed Zitron (Clarion West), Oct 22
https://www.clarionwest.org/event/2025-deep-dives-cory-doctorow/
Vancouver: Enshittification with David Moscrop (Vancouver Writers Festival), Oct 23
https://www.showpass.com/2025-festival-39/
Montreal: Montreal Attention Forum keynote, Oct 24
https://www.attentionconferences.com/conferences/2025-forum
Montreal: Enshittification at Librarie Drawn and Quarterly, Oct 24
https://mtl.drawnandquarterly.com/events/3757420251024
Ottawa: Enshittification (Ottawa Writers Festival), Oct 25
https://writersfestival.org/events/fall-2025/enshittification
Toronto: Enshittification with Dan Werb (Type Books), Oct 27
https://www.instagram.com/p/DO81_1VDngu/?img_index=1
Barcelona: Conferencia EUROPEA 4D (Virtual), Oct 28
https://4d.cat/es/conferencia/
Miami: Enshittification at Books & Books, Nov 5
https://www.eventbrite.com/e/an-evening-with-cory-doctorow-tickets-1504647263469
Miami: Cloudfest, Nov 6
https://www.cloudfest.com/usa/
Burbank: Burbank Book Festival, Nov 8
https://www.burbankbookfestival.com/
Lisbon: A post-American, enshittification-resistant internet, with Rabble (Web Summit), Nov 12
https://websummit.com/sessions/lis25/92f47bc9-ca60-4997-bef3-006735b1f9c5/a-post-american-enshittification-resistant-internet/
Cardiff: Hay Festival After Hours, Nov 13
https://www.hayfestival.com/c-203-hay-festival-after-hours.aspx
London: Enshittification with Sarah Wynn-Williams and Chris Morris, Nov 15
https://www.barbican.org.uk/whats-on/2025/event/cory-doctorow-with-sarah-wynn-williams
Seattle: Neuroscience, AI and Society (University of Washington), Dec 4
https://compneuro.washington.edu/news-and-events/neuroscience-ai-and-society/
Enshittification (Democracy Now!)
https://www.democracynow.org/2025/10/10/cory_doctorow
Enshittification with Lina Khan (Brooklyn Public Library)
https://www.youtube.com/watch?v=NCX5Yst64Hw
Enshittification with Adam Conover (Factually)
https://www.youtube.com/watch?v=P1EKQidRooc
Enshittification (Everyday Anarchism)
https://www.everydayanarchism.com/168-enshittification-cory-doctorow/
"Enshittification: Why Everything Suddenly Got Worse and What to Do About It," Farrar, Straus, Giroux, October 7 2025
https://us.macmillan.com/books/9780374619329/enshittification/
"Picks and Shovels": a sequel to "Red Team Blues," about the heroic era of the PC, Tor Books (US), Head of Zeus (UK), February 2025 (https://us.macmillan.com/books/9781250865908/picksandshovels).
"The Bezzle": a sequel to "Red Team Blues," about prison-tech and other grifts, Tor Books (US), Head of Zeus (UK), February 2024 (the-bezzle.org).
"The Lost Cause:" a solarpunk novel of hope in the climate emergency, Tor Books (US), Head of Zeus (UK), November 2023 (http://lost-cause.org).
"The Internet Con": A nonfiction book about interoperability and Big Tech (Verso) September 2023 (http://seizethemeansofcomputation.org). Signed copies at Book Soup (https://www.booksoup.com/book/9781804291245).
"Red Team Blues": "A grabby, compulsive thriller that will leave you knowing more about how the world works than you did before." Tor Books http://redteamblues.com.
"Chokepoint Capitalism: How to Beat Big Tech, Tame Big Content, and Get Artists Paid, with Rebecca Giblin", on how to unrig the markets for creative labor, Beacon Press/Scribe 2022 https://chokepointcapitalism.com
"Enshittification, Why Everything Suddenly Got Worse and What to Do About It" (the graphic novel), Firstsecond, 2026
"The Memex Method," Farrar, Straus, Giroux, 2026
"The Reverse-Centaur's Guide to AI," a short book about being a better AI critic, Farrar, Straus and Giroux, 2026
Today's top sources:
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A Little Brother short story about DIY insulin PLANNING
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A prominent beer judging competition introduced an AI-based judging tool without warning in the middle of a competition, surprising and angering judges who thought their evaluation notes for each beer were being used to improve the AI, according to multiple interviews with judges involved. The company behind the competition, called Best Beer, also planned to launch a consumer-facing app that would use AI to match drinkers with beers, the company told 404 Media.
Best Beer also threatened legal action against one judge who wrote an open letter criticizing the use of AI in beer tasting and judging, according to multiple judges and text messages reviewed by 404 Media.
The months-long episode shows what can happen when organizations try to push AI onto a hobby, pursuit, art form, or even industry which has many members who are staunchly pro-human and anti-AI. Over the last several years we’ve seen it with illustrators, voice actors, music, and many more. AI came for beer too.
“It is attempting to solve a problem that wasn’t a problem before AI showed up, or before big tech showed up,” Greg Loudon, a certified beer judge and brewery sales manager, and who was the judge threatened with legal action, said. “I feel like AI doesn’t really have a place in beer, and if it does, it’s not going to be in things that are very human.”
“There’s so much subjectivity to it, and to strip out all of the humanity from it is a disservice to the industry,” he added. Another judge said the introduction of AI was “enshittifying” beer tasting.
This story started earlier this year at a Canadian Brewing Awards judging event. Best Beer is the company behind the Canadian Brewing Awards, which gives awards in categories such as Experimental Beer, Speciality IPA, and Historic/Regional Beers. To be a judge, you have to be certified by the Beer Judge Certification Program (BJCP), which involves an exam covering the brewing process, different beer styles, judging procedures, and more.
Around the third day of the competition, the judges were asked to enter their tasting notes into a new AI-powered app instead of the platform they already use, one judge told 404 Media. 404 Media granted the judge anonymity to protect them from retaliation.
Using the AI felt like it was “parroting back bad versions of your judge tasting notes,” they said. “There wasn't really an opportunity for us to actually write our evaluation.” Judges would write what they thought of a beer, and the AI would generate several descriptions based on the judges’ notes that the judge would then need to select. It would then provide additional questions for judges to answer that were “total garbage.”
“It was taking real human feedback, spitting out crap, and then making the human respond to more crap that it crafted for you,” the judge said.
“On top of all the misuse of our time and disrespecting us as judges, that really frustrated me—because it's not a good app,” they said.
Screenshot of a Best Beer-related website.
Multiple judges then met to piece together what was happening, and Loudon published his open letter in April.
“They introduced this AI model to their pool of 40+ judges in the middle of the competition judging, surprising everyone for the sudden shift away from traditional judging methods,” the letter says. “Results are tied back to each judge to increase accountability and ensure a safe, fair and equitable judging environment. Judging for competitions is a very human experience that depends on people filling diverse roles: as judges, stewards, staff, organizers, sorters, and venue maintenance workers,” the letter says.
“Their intentions to gather our training data for their own profit was apparent,” the letter says. It adds that one judge said “I am here to judge beer, not to beta test.”
The letter concluded with this: “To our fellow beverage judges, beverage industry owners, professionals, workers, and educators: Sign our letter. Spread the word. Raise awareness about the real human harms of AI in your spheres of influence. Have frank discussions with your employers, colleagues, and friends about AI use in our industry and our lives. Demand more transparency about competition organizations.”
33 people signed the letter. They included judges, breweries, and members of homebrewer associations in Canada and the United States.
Loudon told 404 Media in a recent phone call “you need to tell us if you're going to be using our data; you need to tell us if you're going to be profiting off of our data, and you can't be using volunteers that are there to judge beer. You need to tell people up front what you're going to do.”
At least one brewery that entered its beer into the Canadian Brewing Awards publicly called out Best Beer and the awards. XhAle Brew Co., based out of Alberta, wrote in a Facebook post in April that it asked for its entry fees of $565 to be refunded, and for the “destruction of XhAle's data collected during, and post-judging for the Best Beer App.”
“We did not consent to our beer being used by a private equity tech fund at the cost to us (XhAle Brew Co. and Canadian Brewers) for a for-profit AI application. Nor do we condone the use of industry volunteers for the same purpose,” the post said.
Ob Simmonds, head of innovation at the Canadian Brewing Awards, told 404 Media in an email that “Breweries will have amazing insight on previously unavailable useful details about their beer and their performance in our competition. Furthermore, craft beer drinkers will be able to better sift through the noise and find beers perfect for their palate. This in no way is aimed at replacing technical judging with AI.”
With the consumer app, the idea was to “Help end users find beers that match their taste profile and help breweries better understand their results in our competition,” Simmonds said.
Simmonds said that “AI is being used to better match consumers with the best beers for their palate,” but said Best Beer is not training its own model.
Those plans have come to a halt though. At the end of September, the Canadian Brewing Awards said in an Instagram post the team was “stepping away.” It said the goal of Best Beer was to “make medals matter more to consumers, so that breweries could see a stronger return on their entries.” The organization said it “saw strong interest from many breweries, judges and consumers” and that it will donate Best Beer’s assets to a non-profit that shows interest. The post added the organization used third-party models that “were good enough to achieve the results we wanted,” and the privacy policies forbade training on the inputted data.
The post included an apology: “We apologize to both judges and breweries for the communication gaps and for the disruptions caused by this year’s logistical challenges.”
In an email sent to 404 Media this month, the Canadian Brewing Awards said “the Best Beer project was never designed to replace or profit from judges.”
“Despite these intentions, the project came under criticism before it was even officially launched,” it added, saying that the open letter “mischaracterized both our goals and approach.”
“Ultimately, we decided not to proceed with the public launch of Best Beer. Instead, we repurposed parts of the technology we had developed to support a brewery crawl during our gala. We chose to pause the broader project until we could ensure the judging community felt confident that no data would be used for profit and until we had more time to clear up the confusion,” the email added. “If judges wanted their data deleted what assurance can we provide them that it was in fact deleted. Everything was judged blind and they would have no access to our database from the enhanced division. For that reason, we felt it was more responsible to shelve the initiative for now.”
One judge told 404 Media: “I don’t think anyone who is hell bent on using AI is going to stop until it’s no longer worth it for them to do so.”
“I just hope that they are transparent if they try to do this again to judges who are volunteering their time, then either pay them or give them the chance ahead of time to opt-out,” they added.
Now months after this all started, Loudon said “The best beers on the market are art forms. They are expressionist. They're something that can't be quantified. And the human element to it, if you strip that all away, it just becomes very basic, and very sanitized, and sterilized.”
“Brewing is an art.”
Confronted with the impact of Donald Trump’s policies, Europe – like other parts of the world – has no choice but to fundamentally rethink its trade rules. To put it plainly: If Europe does not urgently give up its love of free trade, it risks an unprecedented social and industrial disaster, and the planet will also suffer.
When setting tariffs, Trump has followed a narrowly nationalist (such as focusing on the US’s bilateral trade surplus) and rather chaotic logic, often changing course on a whim. The opposite approach is needed: Tariffs should be set based on universal and predictable principles.
The first reason for implementing tariffs is that international freight generates pollution that accounts for 7% of global emissions. Economists have long underestimated this environmental cost, using a low value for the metric ton of carbon (between €100 and €200). However, the worsening of global warming has led to a reassessment. The costs stemming from emissions – natural disasters, decline in economic activity and so on – are now estimated at about €1,000 per ton, if not more, without even factoring in loss of well-being and non-economic costs. Using this value, one would need to apply average tariffs of around 15% on global trade flows to compensate for warming linked to freight, with significant variations depending on the type of goods.
The second justification for tariffs is social, fiscal and environmental dumping. Some countries apply less stringent regulations than others, allowing producers based there to undercut competitors. In practical terms, China currently accounts for 30% of global emissions, with exported emissions making up about 20% of this (or 6% of the global total). At €1,000 per ton, average tariffs of about 80% would be needed on Chinese exports to account for this environmental cost. If focusing only on net exported emissions (after subtracting imported emissions), which is about 10% of China’s emissions (3% of the global total), the necessary tariffs would be around 40%.
Now to social dumping. Wages account for 49% of gross domestic product in China, compared to 64% in Europe. This distorts competition and would require compensatory tariffs of about 15%. A similar calculation can be made for fiscal dumping, especially regarding corporate taxes and state subsidies.
As with carbon, the aim is not to penalize China per se, but to encourage it to pay better wages, at which point the compensatory tax could be lifted. China has no need to accumulate endless trade surpluses; it should first continue its plans for decarbonization (which are further along than in the US, for example) and increase its wages and domestic demand. In the long run, if the US does not change course, Europe and China will have to impose significant sanctions on it.
In any case, tariffs are not an end in themselves: They can be dispensed with if binding agreements are put in place to achieve the same objectives. They can also be replaced by targeted financial sanctions if those prove more effective. The exact amounts should be determined following thorough democratic deliberation, conducted transparently, ideally within transnational assemblies.
What is certain is that the amounts at stake are potentially very large: between 50% and 100% tariffs to account for the negative externalities associated with freight and dumping. In comparison, the modest European carbon border adjustment mechanism is projected to bring in barely €14 billion per year by 2030 – that is, 2% of Chinese imports and 0.5% of total imports from outside of Europe. Let’s be honest: This will have no tangible effect on trade flows. Claiming otherwise will lead to bitter disappointment.
Two powerful factors could prompt Europe to change course. First, the social and political pressures arising from the new wave of industrial job losses that is looming. Second, the urgent need for tax revenue to repay the 2020 European loan and finance new spending. Tariffs could help address these needs.
The main difficulty is that Europe remains deeply committed to absolute free trade. The European Union does acknowledge the importance of promoting sustainable and fair development, including in the founding articles of its treaties. But when it comes to action, it hesitates to move too far from absolute free trade, for fear of triggering an endless protectionist spiral. This Pandora’s box argument is understandable, but it is not without hypocrisy (it was used a century ago to oppose any form of progressive taxation, and fortunately has since been overcome), and above all, it is no longer suited to our current challenges.
Unilateral action will perhaps be needed to overcome these deadlocks, with certain countries adopting national measures to protect themselves from social and environmental dumping. If we use the example of the United States, it is possible that this kind of initiative comes from the right and from nationalists, which would be regrettable since the exclusionary logic of that political camp will solve none of the social challenges or the feeling of abandonment it exploits to gain power. It is time for the left, in Europe and around the world, to take up the issue of sustainable and fair trade and put forward an ambitious plan of action.
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