1 Norway fund to sue Volkswagen (BBC) Norway's
sovereign wealth fund, the world's largest, plans legal action against
Volkswagen over the firm's emissions scandal. "We have been advised by our
lawyers that the company's conduct gives rise to legal claims under German
law," the company said in a statement.
Volkswagen admitted last year that it had installed
secret software to cheat US emissions tests. Norges Bank Investment Management
is one of the company's biggest investors. It is worth $850bn (£592bn; €751bn)
and has stakes in more than 9,000 companies.
According to the Financial Times, which first
reported the story, the lawsuit is expected in the coming weeks. It will be
filed in Germany, joining class-action cases which are being prepared there. Volkswagen
has put aside some €16.2bn to pay for the emissions scandal.
Last month the German carmaker reached a deal with
US authorities in which it agreed to offer "substantial compensation"
and car buy-back deals. Final details are expected in June. The Norwegian fund
recently announced action to clamp down on excessive executive pay at the
companies it invests in, as well as encouraging oil firms to report more on the
risks of climate change.
2 Tough times for Singapore port (Straits Times) Maritime
and Port Authority of Singapore (MPA) data shows that there were 4,452
container vessel arrivals during the first quarter of the year, marking a 4.5
per cent growth year on year.
But container throughput for the quarter slumped 9
per cent to 7.4 million twenty-foot equivalent units (TEUs) - down from the 8.1
million TEUs in the same period a year ago, and a 0.4 per cent drop from the
fourth quarter last year.
"Shipping lines may have been calling more at
Singapore, but the intensity of volume is lower," said Mr Victor Wai, a
Drewry Maritime Equity Research analyst, adding that port volumes have been
"stuck stubbornly in the high single-digit decline" since March last
year. He attributed this largely to the alignment of the mega shipping
alliances, which helped lift volumes at Malaysia's Port of Tanjung Pelapas and
Port Klang instead.
While first-quarter figures for the two lower-cost
Malaysian ports are not yet available, Westports, the main operator for Port
Klang, said throughput rose 6.6 per cent to 2.4 million TEUs for the period. Ocean
Shipping Consultants director Jason Chiang noted that Singapore's ports took a
hit in terms of market share relative to the two Malaysian ports.
Prime Minister Lee Hsien Loong noted in his May Day
Rally speech that a port workers' unionist had told him that there was a day
when the Tanjong Pagar Terminal did not receive a single ship for two shifts
out of three.
Mr Andy Lane, a partner at CTI Consultancy, said:
"What we will not see is a return to the days of 10 per cent to 15 per
cent containerised volume growth year on year, every year." He cited a
lack of consumer confidence in the US and Europe that is further worsened by
reshoring, as well as disruptive technologies such as advanced robotics and 3D
printing.
3 The new era of monopoly (Joseph Stiglitz in The
Guardian) For 200 years, there have been two schools of thought about what
determines the distribution of income – and how the economy functions. One,
emanating from Adam Smith and 19th-century liberal economists, focuses on
competitive markets. The other, cognisant of how Smith’s brand of liberalism
leads to rapid concentration of wealth and income, takes as its starting point
unfettered markets’ tendency toward monopoly.
For the 19th-century liberals and their latter-day
acolytes, because markets are competitive, individuals’ returns are related to
their social contributions – their “marginal product”, in the language of
economists. Capitalists are rewarded for saving rather than consuming. The
second school of thought takes as its starting point “power”, including the
ability to exercise monopoly control or, in labour markets, to assert authority
over workers
In the west in the post-second world war era, the
liberal school of thought has dominated. Yet, as inequality has widened and
concerns about it have grown, the competitive school, viewing individual
returns in terms of marginal product, has become increasingly unable to explain
how the economy works. So, today, the second school of thought is ascendant.
After all, the large bonuses paid to banks’ CEOs as
they led their firms to ruin and the economy to the brink of collapse are hard
to reconcile with the belief that individuals’ pay has anything to do with
their social contributions. Of course, historically, the oppression of large
groups – slaves, women, and minorities of various types – are obvious instances
where inequalities are the result of power relationships, not marginal returns.
In today’s economy, many sectors – telecoms, cable
TV, digital branches from social media to internet search, health insurance,
pharmaceuticals, agro-business, and many more – cannot be understood through
the lens of competition. In these sectors, what competition exists is
oligopolistic, not the “pure” competition depicted in textbooks.
Joseph Schumpeter, one of the great economists of
the 20th century, argued that one shouldn’t be worried by monopoly power:
monopolies would only be temporary. There would be fierce competition for the
market and this would replace competition in the market and ensure that prices
remained competitive. My own theoretical work long ago showed the flaws in
Schumpeter’s analysis, and now empirical results provide strong confirmation.
Today’s markets are characterised by the persistence of high monopoly profits.
The implications of this are profound. Many of the
assumptions about market economies are based on acceptance of the competitive
model, with marginal returns commensurate with social contributions.
This view has led to hesitancy about official
intervention: If markets are fundamentally efficient and fair, there is little
that even the best of governments could do to improve matters. But if markets
are based on exploitation, the rationale for laissez-faire disappears. Indeed,
in that case, the battle against entrenched power is not only a battle for
democracy; it is also a battle for efficiency and shared prosperity.
No comments:
Post a Comment