We have compiled some news, comment pieces and announcements that we hope our readers find interesting. In this instalment, there are stories relating to carbon markets, housing, the use (or not) of cash, the need for economic growth in the UK, and on the capacity of artificial intelligence to aid with international negotiation but also to deceive:
Environment and Sustainability
The Prime Minister is planning to use a summit in May to align the UK’s emissions trading scheme with that of the European Union. With its overall higher cap on the total volume of emissions, the cost of carbon credits has been lower in the UK. By linking the UK’s system with Brussels’ regulations, British exporters will be able to avoid the EU’s carbon taxes but there are likely to be consequences for the UK’s ‘carbon market’, as the cost of credits could increase by up to 50 per cent, resulting in higher energy bills and higher prices on energy intensive goods.
Housing and Taxation
Local authorities acquired the power as of April 1st to increase council tax charges on second homes, the idea being that the additional charges would ultimately come to have a positive effect on local housing provision and improve local services. There are reports that many councils are not using the additional revenue to address housing problems but are in fact using it to fund everyday spending, as well as projects such as parking infrastructure, environmental grants and playgrounds, with very little going towards affordable housing.
A First Review
A review of our latest publication: Inflation is About More Than Money, by Brian Griffiths:
Money
It is reported that notes and coins now account for just 12 per cent of payments in the UK, yet according to the Bank of England, a record £86 billion of banknotes are currently in circulation. If this cash is in circulation but is not being used for transactions, what are the reasons? Are people hoarding cash, simply struggling to spend it or using it selectively for reasons associated with taxation?
Growth
Growth in the UK over the last two decades has surely been ‘good’ growth: equitable and environmentally concerned. The problem is that growth itself has been poor, with the result that median salaries are lower than they would have been had pre-2008 rates of growth continued, opportunities are fewer, the poor are no better off, tax burdens are higher and yet public services seem under-funded. In short, we need not just good growth – but growth itself:
Capital Investment and Politics
Latin America appears to be emerging as a destination for investors seeking to reallocate capital, in part owing to a shift in the politics of many governments in the region towards free markets and more limited government, with increasing shares of voters taking the view that a market economy is the best path to pursue:
Artificial Intelligence
OpenAI’s GPT-4 model, a large language model, was instructed to manage a fictional firm’s investment portfolio without engaging in insider training, yet, it is reported, it proceeded to act on an insider tip about a merger and then, when asked later whether it had any knowledge of the merger, made no mention of it. If AI models are capable of pursuing ends that are in conflict with those of their programmers, and then deceive the programmers – a trait that seems to increase and become more varied as their ‘reasoning’ processes become more sophisticated – this raises questions about the ability of AI to circumvent human control:
Various AI models are being developed with a view to assisting with peace negotiations, whether by modelling proposals for peace, for instance in Ukraine, and assessing the likelihood of agreement by the various parties involved, or by assisting negotiators by allowing them to foresee responses to proposals and so maintain momentum in talks. As ever, the results raise questions, some of which will shortly be discussed on our blog:
With employers having introduced the use of artificial intelligence for selecting and screening applicants prior to interview, jobseekers are now making greater use of AI tools when applying for vacant positions, using the technology to boost test scores and generate applications. Many businesses reject applications that they believe have been created or enhanced using AI. As such, something of an ‘AI arms-race’ is developing, so we might ask whether the technology which was introduced to streamline and simplify the recruitment process has actually introduced greater complication: