Month: January 2023

Occasionally when reading an article, a new insight pops into my head. On 11 January Lex in The Financial Times provided commentary on the efforts of Lina Khan to eliminate the broad use of non-compete clauses in the US workplace. This effort by Khan is worth discussing with nuance and facts.

Lex notes that: “(i)n 2022, the labour market boasted its best-ever nominal gain in wage growth in two decades with wage growth above 5 per cent. Those gains — at the indirect expense of shareholders — would continue if employers could not simply lock employees in any more.”

What is most interesting about this comment is the implicit bias that gains in wages are not as important as the fact that shareholders will receive lower returns. In fact in much of the business press there is a consistent bias that only shareholder returns matter. For society in total, the split of revenue between providers of inputs, financial capital and human capital should be subject to fair negotiations.

The financial press should not be biased in favour of only one of those components. Perhaps a fairer share going to wages would reduce the political polarisation facing so much of the world today.

A recent article in The Economist provides insight into far reaching positive consequences from shifting to renewable energy. The article focuses on the development of wind driven energy based in the North Sea. The analysis in the article goes beyond the basic fact that the wind powered energy will reduce carbon emissions to look at the impact on the political and economic power shifts that may result from a wind-based power system.

At the same time the article does not ignore the challenge of wind-based renewable energy. Based on my walks along the beach in The Netherlands, I can testify to the strength of the winds of the North Sea. However, these winds are not always present and the article notes the need to address the variability. The need for investment in more efficient interconnections of power grids as well as the development of “green energy storage” through creating of hydrogen or ammonia is noted in the article.

Overall the article provides an optimistic view on the potential shift to renewable energy from wind. Emphasising and supporting the development of this future should be a key focus for any financial institution looking to the future rather than continuing to invest in the dying past of fossil fuels.