14 Smart Things Adam Smith Said About Money

1. We want money to buy things
Goods can serve many other purposes besides purchasing money, but money can serve no other purpose besides purchasing goods.

It is not for its own sake that men desire money, but for the sake of what they can purchase with it.


2. You need money to make money

A great stock, though with small profits, generally increases faster than a small stock with great profits. Money, says the proverb, makes money. When you have a little, it is often easier to get more. The great difficulty is to get that little.


3. The pursuit and exchange of money is uniquely human
Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog. 


4. The first money was labor
Labour was the first price, the original purchase-money that was paid for all things. It was not by gold or by silver, but by labour, that all the wealth of the world was originally purchased.

 
5. It is our nature to accumulate money
The natural effort of every individual to better his own condition is so powerful, that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the folly of human laws too often encumbers its operations.


6. If you have money, you should be able to spend it as you see fit
It is the highest impertinence and presumption, therefore, in kings and ministers, to pretend to watch over the economy of private people, and to restrain their expense, either by sumptuary laws, or by prohibiting the importation of foreign luxuries.


7. The joy of having money is to show it off

With the greater part of rich people, the chief enjoyment of riches consists in the parade of riches, which in their eye is never so complete as when they appear to possess those decisive marks of opulence which nobody can possess but themselves.


8. We want payment on land we control
As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce.


9. The production and sale of goods is not for the welfare of others
It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity, but to their self-love, and never talk to them of our own necessities, but of their advantages.


10. Monopolies are a fact of life
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law either could be executed, or would be consistent with liberty or justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.


11. Taxes should be gentle

Every tax ought to be so contrived as both to take out and to keep out of the pockets of the people as little as possible, over and above what it brings into the public treasury of the state.


12. Taxes should be convenient

Every tax ought to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay it. 


13. The government's job is to protect those who have money from those who don't

Civil government, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all.


14. Times get rough when too many people don't have money
No society can surely be flourishing and happy, of which the greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed, and lodged.


Excerpts from The Wealth of Nations

Warren Buffett Backs Estate Taxes

This business article puts a different twist on Warren Buffet's calls for the 'Rich' to be made to pay more taxes.  Mr. Buffett appears to be a most generous businessman but the article implies a certain level of spin is involved in his stellar reputation.


The Real Reason Warren Buffett Backs Estate Taxes:

Here’s the true reason why Buffett likes a tax code that is hard on billionaires like him, as explained by journalist Tim Carney in his book “The Big Ripoff: How Big Business And Big Government Steal Your Money”:

Warren Buffett’s business is buying businesses. Bill Gates makes software and Paul Newman makes movies and salad dressing, but Warren Buffett makes money. He runs Berkshire Hathaway as CEO and principle owner. Berkshire Hathaway used to make textiles, but now they simply own other companies. Some familiar Berkshire Hathaway properties are GEICO, Dairy Queen, Fruit of the Loom, and the Buffalo News.

While Buffett is clearly an unusually brilliant investor, what he has done with his company has been straightforward in some ways. He buys companies that are worth more than the selling price. He buys things that will go up in value.

One great way to buy something that is going up in value is to buy a company that is already very profitable, but whose owner(s) have to sell. One common way that happens is when the owner dies and the heirs cannot afford to pay the estate tax on the properties they stand to inherit. They are therefore forced to sell them to pay the taxes. Carney cites the case of the Buffalo News, a highly profitable family-owned newspaper that Buffett bought after the family matriarch died without doing proper estate planning. Dairy Queen was acquired in a similar manner.

When the estate tax forces an owner to sell his business, it provides an opportunity for a bargain, but that opportunity is not available to everyone ... When the estate tax puts a business on the market, it is a market that is only open to big business.

Beyond making it easier for Buffett to find bargains, the estate tax drives customers to his primary business interest, insurance, including life insurance. The estate tax has created an entire industry called “estate planning.” Anyone with a business or large assets sooner or later needs to engage in estate planning, which involves hiring tax specialists, attorneys, and accountants ... Two central elements of estate planning are life insurance and annuities.

Bear that in mind the next time a liberal writer extols Buffett’s selflessness.




'via Blog this'

Siemens Boosts Its Stake in Tidal Power

Siemens Boosts Its Stake in Tidal Power

The engineering giant likes the predictability of marine power—which can be "calculated for centuries in advance."

By Peter Fairley


Marine energy has long looked to be a niche area, capable of meeting just a few percent of global power demand. But this seemingly limited energy source is drawing some big players, the latest being Siemens. The German engineering giant boosted its stake this month in Bristol, U.K.-based tidal energy developer Marine Current Turbines from under 10 percent to 45 percent. The attraction, according to Michael Axmann, chief financial officer for Siemens's solar and hydro division, is the predictability of marine power.

Solar and wind farm operators struggle to predict tomorrow's output, and bad forecasts can wreak havoc with power transmission planning and market prices. In contrast, the gravitational pull of the moon and sun that controls tidal cycles provides a sure means of anticipating the output from tidal generating stations. "Power output of the systems could be calculated for centuries in advance," says Axmann.

The result could be higher revenues. Axmann notes that tidal power is "not subject to volatility. This increases the value of the energy produced, and hence makes the business case more reliable for the investor and operator."

Axmann declined to say how much value would be added by that predictability. But he anticipates that, by 2020, marine turbines will deliver power at a cost that's competitive with today's offshore wind farms—in spite of the challenges involved in engineering for underwater operations.

Marine Current Turbines CEO Andrew Tyler says a combination of cost reductions and government incentives will ensure the profitability of his firm's tidal power parks. He expects a return on investment for the company's first two offshore power parks: a proposed four-turbine array off Scotland's Isle of Skye and a five-turbine array off the northwest coast of Wales.

Cost reductions will come in part from scaling up its dual-rotor units to two megawatts from the 1.2 megawatts generated by its demonstration turbine, which has been producing power in Northern Ireland's Strangford Lough since 2008. Future cost reductions, Tyler says, will come primarily from efficiency in equipment assembly and logistics, drawing on Siemens's expertise in these areas.

The company also anticipates incentives in the form of U.K. and Scottish installation grants. The tidal power parks will also provide the company with renewable generation credits, which utilities need to acquire to comply with the U.K.'s renewable power standard. Last month, the U.K. announced plans to boost the credits for wave and tidal energy plants from two to five for every megawatt-hour of electricity generated. In comparison, offshore wind farms will earn two credits, and power stations burning biomass will earn one.

Tyler estimates that his first power parks will produce 15,000 to 20,000 megawatt-hours per year, meaning the tidal turbine arrays could earn £3.75 million ($6 million) in incentive payments annually.

Tyler says Siemens's backing will be crucial to raising the £100 million in private investment needed to finance the projects: "It completely changes their perception about our credibility," he says.

Paris-based Alstom Group, which competes against Siemens in power equipment and high-speed trains, also expects to make a splash in tidal power next year. Alstom is building a one-megawatt demonstration turbine using technology licensed from Canada'sClean Current Power Systems. At a meeting in Bali last month, Phillippe Gilson, Alstom's ocean energy manager, affirmed that Alstom plans to install the 20-meter-tall, fully submersible turbine in Nova Scotia's Bay of Fundy in 2012.

Source:

http://www.technologyreview.com/energy/39119/
Copyright Technology Review 2011.

California Reaches Solar Power Milestone | NBC Bay Area

California Reaches Solar Power Milestone | NBC Bay Area: "

The golden state has installed enough solar panels on rooftops of homes and businesses to produce one gigawatt of power, KQED's Climate Watch reports.

One gigawatt is equal to one thousand megawatts, or enough to power 600,000 homes. Only five other countries in the world can claim that, including Germany, which has reached 17 gigawatts.

“Getting to one gigawatt is a fantastic marker of the momentum towards California's clean energy future,” Sungevity President Danny Kennedy said in a report by Environment California. “Riding the exponential curve of growth, which is akin to the mass adoption of cell phones or satellite TVs, will create many more good jobs and great opportunity for the Golden State.”

One gigawatt is impressive, but California isn't stopping there. It's aiming for three gigawatts of rooftop solar by 2016 -- which was mandated by California's Million Solar Roofs Initiative five years ago."

'via Blog this'

Solar Energy is becoming competitive

The shrinking cost of solar energy: By the numbers - The Week:

BY THE NUMBERS

As harnessing the sun's energy becomes cheaper and more efficient, some analysts believe solar will overtake fossil fuels in a matter of decades



Photo: Michael DeYoung/Blend Images/Corbis
It takes the sun only 14.5 seconds to provide as
much energy to Earth as all of human civilization uses in a day.
.................................................................................................


The shrinking cost of solar energy: By the numbers:

According to Moore's Law, the price of computing power is slashed in half every two years — which helps explain why personal computers become outdated so quickly. But now, as Paul Krugman at The New York Times notes, the solar energy industry is experiencing a similar trend. The price of producing solar power cr continues to fall — thanks to technological improvements and heavy subsidies in countries like China — and this onetime punchline of an energy sector continues to expand. Will solar power eventually overtake oil as Earth's primary energy source? Perhaps. In the meantime, a look at the shrinking cost of solar energy, by the numbers:

65 Percentage growth experienced by the solar energy industry in each of the past five years

7 Percentage decline in the annual price of solar energy, adjusted for inflation

17 Percentage drop in the price of installing solar panels in the U.S. in 2010, says the, says the Washington Post. "Solar companies are figuring out how to set up systems cheaply."


17 Gigawatts of solar power that were created or used in the United States in 2010. That's roughly equivalent to the output of 17 nuclear power plants.

700 Watts of power that the sun shines on every square meter of Earth

89 quadrillion Watts of power shining on the Earth at any given moment. One quadrillion is a 1 followed by 15 zeros.

15 trillion Watts of power used by "all of human civilization" each day. It may be a big number, but it's just "one six-thousandth" of the 89 quadrillion watts shining on Earth at any given moment, says Scientific American.

14.5 Seconds it takes for the sun to provide as much energy to Earth as humanity consumes in a day

88 Minutes it takes for the sun to provide as much energy to Earth as humanity consumes in a year

2018 The year that analysts expect solar power to become affordable enough to compete directly with fossil fuels

2060 The year that analysts expect solar power may satisfy more than half of the world's energy needs

$491 billion Amount that U.S. drivers are expected to spend on gasoline this year

Sources: Forbes, Los Angeles Times, NY Times, Scientific American,Washington Post

Krugman: It's time for solar power

Solar Power has been my pick for the future of alternative, sustainable energy for a while now - years not weeks.  China has weighed in on solar by with aggressive trade practices to kill competition, distorting pricing and otherwise upsetting the course of the industry built up around solar power. Its not a walk in the park to see how to invest in this area.  Lots of money has been lost already by investors and companies bankrupted....


Solar Power
By PAUL KRUGMAN, NEW YORK TIMES
Updated Monday, November 7, 2011

For decades the story of technology has been dominated, in the popular mind and to a large extent in reality, by computing and the things you can do with it. Moore's Law - in which the price of computing power falls roughly 50 percent every 18 months - has powered an ever-expanding range of applications, from faxes to Facebook.

Our mastery of the material world, on the other hand, has advanced much more slowly. The sources of energy, the way we move stuff around, are much the same as they were a generation ago.


The success story you haven't heard about is Solar Energy

But that may be about to change. We are, or at least we should be, on the cusp of an energy transformation, driven by the rapidly falling cost of solar power. That's right, solar power.

If that surprises you, if you still think of solar power as some kind of hippie fantasy, blame our fossilized political system, in which fossil fuel producers have both powerful political allies and a powerful propaganda machine that denigrates alternatives.

These days, mention solar power and you'll probably hear cries of "Solyndra!" Republicans have tried to make the failed solar panel company both a symbol of government waste - although claims of a major scandal are nonsense - and a stick with which to beat renewable energy.

But Solyndra's failure was actually caused by technological success: The price of solar panels is dropping fast, and Solyndra couldn't keep up with the competition. In fact, progress in solar panels has been so dramatic and sustained that, as a blog post at Scientific American put it, "there's now frequent talk of a 'Moore's law' in solar energy," with prices adjusted for inflation falling around 7 percent a year.

This has already led to rapid growth in solar installations, but even more change may be just around the corner. If the downward trend continues - and if anything it seems to be accelerating - we're just a few years from the point at which electricity from solar panels becomes cheaper than electricity generated by burning coal.

And if we priced coal-fired power right, taking into account the huge health and other costs it imposes, it's likely that we would already have passed that tipping point.

But will our political system delay the energy transformation now within reach?

A large part of our political class, including essentially the entire GOP, is deeply invested in an energy sector dominated by fossil fuels, and actively hostile to alternatives. This political class will do everything it can to ensure subsidies for the extraction and use of fossil fuels, directly with taxpayers' money and indirectly by letting the industry off the hook for environmental costs, while ridiculing technologies like solar.


So what you need to know is that nothing you hear from these people is true; solar is now cost-effective. Here comes the sun, if we're willing to let it in.

 

Krugman is a columnist for The New York Times.

Source:
http://www.chron.com/opinion/outlook/article/Krugman-It-s-time-for-solar-power-2257045.php

Mankind's Report Card

20 ways the world has changed since 1st Earth Summit - Politics - CBC News

The United Nations says humans are more concerned about damage done to the environment than we were 20 years ago — but we're still destroying it faster than we can fix it.

That's part of a snapshot prepared by the United Nations Environment Program in a report called Keeping Track that looks at a wide range of changes that have occurred since the first Earth Summit in Rio in 1992.

The report is designed to be used by legislators at the 2012 Earth Summit in Rio next May.

And far from being a thick report that will just gather dust, Keeping Track is actually a bit of a page-turner, filled with surprising and often encouraging news about our stewardship of the Earth.

The report uses a minimum of text and relies on colourful graphics, charts and satellite pictures to show the major environmental and social changes that have occurred on Earth since the early 1990s, from growing cities in China to the rapidly spreading footprint of Alberta's oil sands.



Changes in the world over the last 20 years.
1. The number of megacities has doubled.

2. The world is eating 26 per cent more meat.

3. Global temperatures continue to rise, with the last 10 years the warmest on record.

4. World industry is 23 per cent more energy efficient.

5. Plastic consumption has skyrocketed — with annual production reaching a record 265 million tonnes worldwide in 2010.

6. The 1990 Montreal Protocol to limit ozone-destroying chemicals is the world's most successful international agreement, producing a 93 per cent drop in the damaging emissions since 1992.

7. Cement production is the fastest-growing source of C02 emissions.

8. The Mesopotamian Marshlands, the largest in the Middle East, are recovering from deliberate draining by Iraq in the 1990s.

9. Saudi Arabia has transformed from an importer of food to an exporter due to irrigation.

10. Environmentally protected areas have increased worldwide by 42 per cent.

11. Fish stock depletion is now one of the most pressing environmental issues.

12. Renewable energy has skyrocketed, with solar energy leading the way — up 30,000 per cent since 1992.

13. Biofuel production — up 300,000 per cent — is converting more land from farming to production of fuel.

14. Organic farming is up 240 per cent since 1999.

15. The Amazon rainforest has been largely destroyed due to drought and farming.

16. Tourism and travel is the world's largest business sector — and ecotourism is the fastest-growing type of tourism, up 20-34 per cent per year.

17. Passenger trips by airplanes have doubled in the past two decades.

18. Clean drinking water access increased to 87 per cent, but widespread sanitation is still slow.

19. 30 per cent more private companies are adopting environmental standards every year.

20. Women's influence is rising with more 60 per cent more seats in national parliaments.

......................................................................................

 .................................................................
Megacities:

Pop. in millions, 2010

1. Tokyo, Japan
36.7

2. Delhi, India
22.2

3. Sao Paulo, Brazil
20.3

4. Mumbai, India
20.0

5. Mexico City, Mexico
19.5

6. New York - Newark, USA
19.4

7. Shanghai, China
16.6

8. Kolkata, India
15.6

9. Dhaka, Bangladesh
14.6

10. Karachi, Pakistan
13.1
.........................................................................

Wall Street Protests Are Growing

"Men., it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one."

- Charles Mackay
Memoirs of Extraordinary Popular Delusions and the Madness of Crowds

World stares as Americans burn food to stay on the road.

http://www.theaustralian.com.au/national-affairs/world-starves-as-americans-burn-food-to-stay-on-the-road/story-fn59niix-1226025033392

Government intervention always distorts ...

SPECTATORS at February's Daytona 500 in Florida were handed green flags to wave in celebration of the news that the race's stock cars now use gasoline with 15 per cent corn-based ethanol. It was the start of a season-long television marketing campaign to sell the merits of biofuel to Americans.

On the surface, the "greening of NASCAR" is merely a transparent (and, one suspects, ill-fated) exercise in "greenwashing" for the sport. But the partnership between a beloved American pastime and the biofuel lobby is also the latest attempt to sway public opinion in favour of a truly irresponsible policy.

The US spends about $6 billion a year on federal support for ethanol production through tax credits, tariffs, and other programs. Thanks to this financial assistance, one-sixth of the world's corn supply is burned in American cars; enough corn to feed 350 million people for an entire year.

Government support of rapid growth in biofuel production has contributed to disarray in food production. Indeed, as a result of policy in the US and Europe, including aggressive production targets, biofuel used more than 6.5 per cent of global grain output and 8 per cent of the world's vegetable oil last year, up from 2 per cent of grain supplies and virtually no vegetable oil in 2004.

We have been here before. In 2007 and 2008, the swift increase in biofuel production caused a food crisis that incited political instability and fuelled malnutrition. Developed countries did not learn. Since 2008, ethanol production has increased by 33 per cent.This year, after a particularly bad growing season, we see the results. Global food prices are the highest they have been since the UN started tracking them in 1990, pushed up largely by increases in the cost of corn. Millions more people will be undernourished than would have been the case in the absence of official support for biofuels.

Biofuels were initially championed by environmental campaigners as a silver bullet against global warming. They started to change their minds as research showed that biofuels from most food crops did not significantly reduce greenhouse gas emissions - and in many cases, caused forests to be destroyed to grow more food, creating more net carbon-dioxide emissions than fossil fuels. Some green activists supported mandates for biofuel, hoping they would pave the way for next-generation ethanol using non-food plants. That hasn't happened.

Today, it is difficult to find a single environmentalist who still backs the policy. Even Al Gore - who once boasted of casting the deciding vote for ethanol support - calls the policy "a mistake". He now admits that he supported it because he "had a certain fondness for the [corn] farmers in the state of Iowa" - who were crucial to his 2000 presidential bid.

It is refreshing that Gore has changed his view in line with the evidence. But there is a wider lesson. A chorus of voices from the Left and Right argue against continued government support for biofuel. The problem, as Gore has put it, is that "it's hard once such a program is put in place to deal with the lobbies that keep it going".

Politicians can't stop such rent-seeking behaviour. What they can do is craft policies that maximise social welfare. Unfortunately, when it comes to reining in global warming, protecting the environment, or creating green jobs, we make hasty decisions that don't pass the test.

Government support for biofuel is only one example of a knee-jerk green policy that creates lucrative opportunities for self-interested businesses but does little to help the planet. Consider the financial support afforded early-generation renewable energy companies.

Germany led the world in putting up solar panels, funded by $75 billion in subsidies. The result? Inefficient, uncompetitive solar technology sitting on rooftops in a cloudy country, delivering a trivial 0.1 per cent of Germany's total energy supply, and postponing the effects of global warming by seven hours in 2100.

Given the financial stakes, it is little wonder that alternative energy companies, green investment firms, and biofuel producers are lobbying for more government largesse, and marketing their cause to the public by highlighting its supposed benefits for the environment, energy security, and employment, none of which withstand scrutiny.

"The NASCAR deal will push American ethanol into the stratosphere," declared Tom Buis, chief executive of the ethanol trade association Growth Energy.

At least one group is sold: presidential contenders. In Iowa last month, possible Republican candidate Newt Gingrich derided "big-city attacks" on ethanol subsidies. And, in what must be music to the industry's ears, an Obama administration official declared that even amid the highest food prices ever, there is "no reason to take the foot off the gas" on biofuel. In fact, there are millions of reasons - all of them suffering needlessly - to apply the brakes.

Bjorn Lomborg is director of the Copenhagen Consensus Centre.