presentation_can-markets-solve-problems

Véra Ehrenstein, Daniel Neyland, Sveta Milyaeva

CAN MARKETS SOLVE PROBLEMS?

• Véra Ehrenstein is professor at UCL in the anthropology department, even though she holds a PhD in Technology and Science.

• Daniel Neyland teaches Social Sciences, in particular the markets' dynamic, at the University of Bristol. When he wrote the book, he was teaching at the Goldsmiths University in London.

• Sveta Milyaeva is a lecturer in Social Sciences at the University of Bristol.

• The research has been developed for the Goldsmiths University.

INFORMATION

Selling

Trade and Exchange

Incentive

PROGRESS

Investment

Property and Ownership

Competition

CHAPTERS

In 2006 the EU ETS sold to firms CO2 allowances (the firms have to buy an allowance to be able to buy materials with a certain total of CO2 in it). Following this process, firms should have been forced to be more careful on using CO2.Because of the 2008 crisis and the complexity of the whole operation, lots of companies failed, while there were others which got a big reserve of allowances and, didn't change their amount of emissions of CO2.

TRADE AND EXCHANGE

CONCLUSION: Allowances became more expensive, this market-based intervention became a series of negotions between industrial representatives, politicians, national and european authorities, environmental activists and economists, the staff of the EU ETS was forced to enterfere with the market.This market-based intervention was initially considered a second choice. Indeed, there should have been a carbon tax instead, but the carbon tax had to be agreed by the European Council and our parliamentarians didn't want to spend time in these bureaucratic processes.

TRADE AND EXCHANGE

The REF is the ranking that orders all the UK universities from the most competent to the least. It's important because the State looks at this to give the "higher educational fundings". The ranking is based on the top 4 researches of each department.At first, there were controversies regarding the scores. The Main Panel responded that, among the people who scored the researches, there were obviously "softer and tougher guys", but these ones weren't assumed for the score in itself, but for the method they used. CONCLUSION: The REF gave more competition and research for excellece among the universities, despite the evident inequity between them.

COMPETITION

The protection of data and privacy is one of the major problems in Internet. The "freedom" provided by the Internet gave as many positive aspects, like the cookie policy, as relatively bad ones, like the monetization of data. This market exploded in 2016-2018, when no one really knew who owned their datas and political parties were able to influence people.The US in 2018 emphasized consumption and market, while EU decided to install a regulatory institution. CONCLUSION: The fact that US has imitated EU's model tells you already which one was the better option (already before there were private companies that tried to replicate the EU philosophy in the US, but they failed).

PROPERTY ANDOWNERSHIP

During the New Labour period governments tried to decrease the public debt by replacing public costs with private money underwritten by the State. Tony Blair's ministry gained much success in these types of economic strategies.For this reason, the county of Essex decided put more efficiency and less money on the research regarding children, by using only money collected by investors; after a certain time, State had to return a percentage of that money. The problem is that there weren't enough money to take care of all children. CONCLUSION: The State gained money, investors gained money, but of 60 families, 12 got support and 6 got effectively into care.

INVESTMENT AND RETURN

Michael Kremer, now Nobel prize winner, dreamt in 90's of a new global vaccine market that could go beyond the States' control, and that could help the poor States with vaccination problems. It got approved during the G7 in 2007 by UK, Canada, Russia, Italy and Norway. The project was centered on the pneumococcal vaccine.Because of the skepticism around the project, there were bureaucratic problems between the members (Kremer wasn't a member yet) and the States, which had delays on sending money. Even the World Bank didn't want to give money, and the UNICEF was ready to not give support or founds on projects based on a similar model on other vaccines.

INCENTIVE

Michael Kremer and other people got involved in the project for the "economic" part. They found a way to make vaccines accessible to most people (3,5$ each). They sent 200 milion doses; after some time UNICEF understood they had to send more vaccines. CONCLUSION: Despite the controversies surrounding private companies that in those poor countries could have benefit of the project money, now 109 milions of children have received the vaccine, and 500,000 lifes were saved because of this experiment.

INCENTIVE

In 1996 (Blair's ministry) the first Student Loans were released for 615,000 individuals. The loans were designed for high-educational universities. The government led by Cameron used the same strategy; however, a major problem of these second Student Loans was that most students haven't paid them back yet. It was done on purpose; students who take the Loans for high educational school are excellences and they should succeed in their career. It's been demonstrated that a person who has taken the loan in 2013 should be able of repaying the loan in 2027-29. The government didn't initiate the project for the present days, but for the future. CONCLUSION: It's extimated that Student Loans will be 20% of the removal of public debt by 2040.

SELLING

• From these 6 examples we've seen that market-based interventions can work, but they have to be analyzed carefully, putting in them lots of work, time and money; market in itself is inequity.

• If a market-based intervention works in a certain sector it doesn't mean it has to work in others, or even in the same sector but in a place or time different.

• However there are many cases, like the EU ETS' allowances, that, according to theory, should have worked, but they didn't. Obviously there are exceptions like the pneumococcal vaccine, but because this last one has been carefully analyzed by the genius of Kremer.

Theory will take you only so far Oppenheimer (movie)

PROGRESS

• The book ends with a theory that had been formulated by the famous french philospher Bruno Latour: numbers are not a problem, because we certainly need an understanding of the complexity of the situation, the society in which we're living, but we don't have to forget our key targets based on social and economic progress because of them. This book shows us how numbers in our society are imperfect, and the quote "Theory will the take you only so far" is a demonstration of that. The authors finish by saying that the problem now is that we're effectively near progress but, despite that, it seems we're going backwards; if that's true, maybe, progress was only a big illusion.

Theory will take you only so far Oppenheimer (movie)

PROGRESS

THE END

• Inquiry - inchiesta
• Allowance - bonus, indennità
• Bond - legame
• To encounter - incontrare
• Consternation - costernazione
• Outwardly - esternamente
• Vault - volta, caveau
• To meddle - immischarsi
• Flux - flusso

WORDS I'VE LEARNT