The psychic statesman - links 28/05/18

I’d like to first start this links post with a bit of unjustified moral posturing. (Coincidentally this is also how I started life - I've been on a perpetual high horse since birth.) After my last post about blockchain, four days later the Economist releases an extended special report about the future of digital finance. All I’ll say is - never doubt the ability of the psychic statesman. And yes, it definitely has to do with my psychic intelligence, not the fact that it’s a trend that’s gained huge amounts of traction this year. Still, I contributed to that traction….? You’re witnessing my peak people.

That said, here are a few other interesting reads from the past month - moral posturing (probably) not included:

1 The amazing psychology of Japanese train stations. Featuring mood lighting and selective sounds. Reads as a little Orwellian but I’ve experienced it firsthand and didn’t have any bad experiences - except for a man watching something R 18+ rated on his phone (maybe the mood lighting was a bad idea?)


2. A great critique by Scott Alexander on the basic jobs guarantee - the new trend du jour. Beyond your basic economic arguments there’s a great section about how it would affect disabled people. As a psychologist by trade,  he brings a very interesting perspective:

As long as you have a system whose goal is to separate the “truly” disabled people from the fakers, you’re going to run into problems like these. But refuse to gatekeep, and you have an unjust system where anyone who wants to lie can get out of work while their more honest coworkers are left slaving away all day. 

If you’re abled enough to perform a government job, you’ve got to do it. Who decides if you’re abled enough? The Kafkaesque gatekeepers. And so we get the same bureaucratic despair, the same attempts to cheat the system, and the same perverse incentives.

3. Tyler Cowen argues for progress vs quality in the healthcare debate. I see this as one of the three pertinent problems for economics, alongside food and climate management. Too many predictions, I hear you say?  I’m not the psychic statesman for nothing. (Desperate times abound.)


4. Bloomberg: e commerce costs are rising just as commercial real estate costs are falling. Honestly,  I’m doubtful of the “falling rents” effects they mention being repeated elsewhere, but interesting nonetheless:  

For the first time since the dawn of e-commerce, physical retail might find itself with some cost advantages over e-commerce firms.

For much of physical retail, there's the prospect of falling rents, making running a brick-and-mortar store more viable. For e-commerce, it's a surge in ad rates, or customer acquisition costs, plus shipping bottlenecks that will make "free shipping" more onerous to offer. And profit margins on an e-commerce sale were lower than the profit margin on an equivalent brick and mortar sale to begin with. All of this is happening when e-commerce is only around 10 percent of total retail sales. Presumably, these challenges will be even greater as that share grows.

5. And finally - this new digital economy is really forcing humans to diversify, wow. After this soccer coach had a cardiac arrest while abusing a referee for a wrong call, the referee saved his life with chest compressions. From the referee himself: “First I resurrected him, then I expelled him. I was doing my job.” As my business professor would say - this is value add skills people!

¡LE SALVO LA VIDA!
En Argentina el árbitro Darío Cid le salvó la vida al técnico Luciano Susin quien sufrió un paro cardiaco, el colegiado que estaba capacitado para hacer reanimación cardiorrespiratoria intervino oportunamente pic.twitter.com/TOXoW40QlW

— joseborda (@joseborda1) April 24, 2018

Until next time.


- The Peaking Statesman

Cryptocurrency really is going to change our world - don’t laugh

I’m sure upon reading this title you thought another soldier had fallen to the bitcoin bullet. Worry not faithful reader I haven't been caught up in the hysteria. But cryptocurrency on the other hand - I really think that’s special. That's why I'm writing this post, because I really think the progression of this idea is going to hugely transform our relationship with finance. And that’s because the internet is going to do what an emotionally reclusive adult with a bad history of relationships would never - it is going to lower those barriers baby! (Sorry.)

If only the Internet could do something for these barriers.... image from Singh , 2014. 

Who, what, when, where and how, you ask? And why the change of heart? Well, see excerpts below. Or, more specifically, see (or listen) to this “Conversations with Tyler”  podcast episode with Balaji Srinivasan; CEO of Earn.com among other ventures. This guy knows his stuff. 

(The basic podcast premise is that  renowned polymath and occasional economic professor Tyler Cowen asks him a number of questions and discussion ensues. The podcast is almost always great- I’ve linked to the transcript for ease.)

Two key things that they were talking about stuck out to me - the future of financial fees; and the future of investing.

On financial fees:

COWEN: Right now, I pay financial fees to my mutual funds, to Merrill Lynch, all over... Which of those fees will go away?...Why should we think that will go away? We’re paying for some kind of service; maybe it’s not clear what it is. What in tech is going to do that more cheaply? And what will be done more cheaply for us?

SRINIVASAN: Because you can set up a new payment rail and contract execution system in your dorm room. That’s new because it provides fundamental competition at the lowest level. Now, these new payment rails are volatile. They’ve got all kinds of issues associated with them.

But you can actually, root and branch, exit the system in a way that you couldn’t have done before, and I think that’s going to give more fundamental competition to fees. The closest analogy is, with the internet, you have a new mechanism for transmitting information which lets you route around the Postal Service and NBC and the televisions and the movies and the record companies and whatnot.

The most important thing, from my standpoint, is the level of choice you’re going to have is going to be dramatically increased because the blockchain makes it much easier to startup a competitor and raise up your own shingle as a new financial outlet.

On investing:  I think this is a 20-year thing, maybe something like a personal token, which is to say, if you have some future . . . Let’s say you’ve done well in something that shows you have some promise. Rather than, let’s say, taking out a student loan, which is one way of mortgaging your future, you might issue a personal token.

That would be something where you say, “Hey, look, I’m going to sell about 20 percent of my future earnings for token-based financing...Can you finance me and help me achieve my dreams?”

That’s something where anybody in the world can chip in. A guy from India, a guy from Japan, a guy from Kenya, Brazil can help finance that. ..it opens up financing in a way that’s never been possible before at a very small level, a very individual level.

A communication, a broadcast to millions of people is now such a low-threshold activity. If financing or the financialization of something also becomes such a low-threshold activity, it’s going to become a lot more common.

I really thought the bitcoin hysteria was nonsense until i read this. The low threshold stuff is really important - the Internet has lowered the barrier to so many things and enabled cross cultural, lingual, etc innovation. See communication, see art, see music. Imagine the impact of a true digitisation of a currency. Big things coming!

I recommend that all of you (all two of you) read it. You'll probably be the better for it. You don’t have to; but my blog is my domain so… like it or leave it. But I really think you’ll like it. Until next time!

Stuff I learnt today #1

 I accidentally queued this post for next year, but nonetheless I'm top of my game again (granted it's a very low bar to jump) and have 4-5 posts lined up. One about microfinance, the other about Alan Greenspan's biography.  You're welcome to unsubscribe in anticipation. Many things have happened since:

I got a job
I graduated
I chose my degree

Funny how much things change in 4 months - but fortunately these links posts are still here. I do distinctly remember how to copy and paste... difficult skill indeed. I'm also rebranding now - these won't be called links posts; instead I'll be calling them Stuff I Learnt Today ( it's a working title okay!)

1. This is an open google doc , started by a private consultant, for brainstorming ideas re: Cape Town running out of water. Many of the residents don't adhere to the water guidelines and Cape Town's suffering a bit of a free rider problem. I used to think that the free rider problem only existed in an economics textbook until the QLD drought a few years ago, when both my neighbours on either side had suspiciously spright looking gardens despite water restrictions. God forbid our water supply gets cut off before Deb's petunias do.

Jabs aside, much of the proposals argue the effectiveness of public information campaigns - I'm inclined to agree, because it addresses the FR problem. And the government's current method of slowly cutting off the water supply is only going to make citizens panic and hoard water. This happened in Brazil.

2. Interesting fact of the day: high infant mortality rates in remote Amazon tribes inadvertently incentivise "hands off parenting". The article says that babies are often not named until after their first birthday because parents don't want to get too attached. That's not the excuse my parents used. They said it was for personal development. (I'm joking. My mum is like the only consistent reader of my blog.)

3. Percentage of people in different countries who believe life is better vs worse. 
Russia's polarised as expected. It's nice to see Vietnam up top  (i'm Vietnamese by second generation - you're witnessing misplaced nationalism at its finest ) with 88% believing life is better vs. 4% thinking life is worse. I think it arguably gives further support to the Singapore model of governance - few civil freedoms, but a thriving economy nonetheless.

4. The birth of a baby panda in Tokyo Zoo - the first in five years - sent shares in local retailers surging. 
But given the rareness of panda births, I would advise the Japanese government against relying too heavily on them as fiscal stimulus. (This is peak comedy you're witnessing.)

5. How will people work in the future? As shaped by Silicon Valley. It is interesting to think about what will happen to the humble cubicle in the future. Everything I've read so far has suggested that a majority of remedial tasks will be automated; leadership and social collaborative skills will be more valued. And maybe dancing, too:

The big idea championed by the industry is the concept of working in various spaces around an office rather than at a fixed workstation.

....

Last year LinkedIn, a professional social network, for example, opened a new building in San Francisco that is full of space set aside for networking, and that includes a “silent disco”, where people can dance to music with headphones on.

That's it for now. Yes, these new and improved posts come with new and improved levels of wit and humour. (Because that's exactly what a post about the Cape Town drought needs...) Having peak creativity hit at 1-2am in the morning has its ups and downs.

A formal apology from the Boring Statesman

To my readers:

There are many ways to bore, piss off and antagonise a group of people. It can be difficult to do all three. But across a span of approximately 11 months I have discovered an incredible method to do all three.  Here's how you too can do it (Doctors are dying to find out my secret!) -

1) Bore your audience
Make very long posts about issues that no one cares about. No, really, issues that no one cares about and that don't exist outside of your own mind. Take tentative feedback from encouraging "readers" (i.e, teachers I forced to read my blog and my mother's friends) as an endorsement of how excellent my posts are. In my  delusional state, continue to make more extremely long winded, boring posts.

(Also, because all you do is read economics blogs by American economists with PhDs, write like one. Except you obviously don't have their intelligence, so what's left is just terrible writing.)

2) Now piss them off
Neglect your blog. For long and sporadic periods of time. Each time, promise that you're turning a new page. Don't do it.

3) Finally, antagonise them 
Despite doing all of the above; still hold your blog in extremely high regard (for some reason). Maintain an "about me" page that literally stinks of pretentiousness and self righteousness. Keep it that way, while all of your mum's friends, your teachers, and former mentors think "Christ... she really thinks that having a website on the internet qualifies as an achievement. Oh to be young and deluded."

Sound familiar? That's because I just described the entire short, sporadic 11 month life span of the Budding Statesman (aka the Boring Statesman). Through the  combined efforts of 23 blog posts; and despite only posting sporadically (after promising change multiple times), I believe I have bored, pissed off, and antagonised all of you.

Sorry. When I first started the Budding Statesman I had entirely grand and, in hindsight, entirely pretentious ideas of what this Lovechild of my Creative Thought and Mind  was going to be. Instead I left the lovechild to die in  a ditch in a sad corner of the internet.

So to all my readers - a sincere apology. I am sorry you had to witness first hand the pretentiousness of a 17 year old with access to a blogging platform. I'm sorry that, because you were Facebook friends with my mother, you had to read my blog. I'm sorry that you stumbled onto my blog for whatever reason. Because it really was terrible, and, worse than that, terribly boring.

From now on, I can't and won't promise that I'll post regularly.  I can't promise that the posts will be of the best quality, because I'm still a student and in all honesty I'm doing my best. And I can't promise that the posts won't still be a little long. But what I can say for certain is that this blog will Absolutely Not  Be Boring. I'll write as myself. So here's to a new era of the Budding Statesman - I'll do my best not to bore you, piss you off, or antagonise you. High standards indeed.

Comment down below, or email me at buddingstatesman(at)gmail(dot)com, a post of mine that either bored you, pissed you off, or antagonised you. I would, in all honesty, love to know!

P.S  Here's an interesting story - what prompted this epiphany? I checked my stats and saw that one person from Estonia had viewed my blog. And all of a sudden I just felt really, really bad for them - that the only insight they had into an Australian economics student was this terrible blog. Sorry, Estonia!

Links - 28/07/17

Two days ago there was a little excitement in the Science Community when the remains of an extinct bird were discovered... little did they know that I personally have uncovered another fossil... a links post!

It's been a rather long time. Fortunately I still remember how to copy and paste links - obviously a difficult skill to master. I'm listing points by dot points instead of numbers now - sorry Dewey, it's time for a change.

Some interesting stuff I read/stumbled across the past week, and some cool things to think about.

•  Welcome to the new cash economy - in urban China, cash has increasingly become obsolete in favour of electronic payments:

“...China is systematically and rapidly doing away with paper money and coins.

 Just as startling is how quickly the transition has happened. Only three years ago there would be no question at all, because everyone was still using cash.

Even the buskers were apparently ahead of me. Enterprising musicians playing on the streets of a number of Chinese cities have put up boards with QR codes so that passers-by can simply transfer them tips directly.

• Something that's got the criminology community rather excited: a new study bolstering the "lead crime hypothesis." Apparently higher exposure to lead = higher tendency to commit crime. This sounds very promising, and if causation can be thoroughly established, what implications does this have, in terms of policy, for how we address crime and criminal offenders? Definitely something to keep an eye on - I'll keep you all updated. 

•   An interesting perspective on the minimum wage debate: when Maine (U.S) tried to lift the minimum wage, restaurant workers actually protested it. If you're not familiar with the ins and outs of  the minimum wage debate, the general perception is that minimum wage is said to be mostly beneficial for restaurant workers:

But in Maine, servers actively campaigned to overturn the results of a November referendum raising servers’ hourly wages from $3.75 in 2016 to $12 by 2024,  saying it would cause customers to tip less and actually reduce their take-home income.

•  A (surprisingly) great article about why it matters that Melania Trump wore Dior in Paris last week.   Some great and very eloquent discussion about historical perceptions of fashion in France and how that influences political and cultural discourse. Not one for the econophiles though.  

• And finally, to conclude, something to warm the hearts of any free market liberals, an article about Ford's "super smellers":  

Car designers are increasingly competing to deliver the perfect car scent in each market. For Ford Motor Company, smell is a crucial aspect of delivering high quality vehicles to customers.

Every year Ford runs an application process to select its team of super smellers in China. Would-be testers can come from any department within the company and are asked to judge material samples in 16 jars. They are judged on their smelling ability and consistency, but must also meet other requirements to qualify for a spot on the prestigious panel.

“You can’t smoke or have allergies and sinus issues,” says Mike Feng, a Ford smell tester for four years. “Wearing perfume, leather jackets or nail polish is also not allowed, and you shouldn’t use strongly scented shampoo to ensure your senses aren’t compromised.”

Ford’s super smellers must requalify annually to maintain their position on the panel and must be available to attend regular odor tests throughout the year. A small group of six panelists form the smell jury for each test and an average of their scores is given to each material sample.

Everything used in a Ford vehicle – like seat fabric, plastics or carpet – is odor tested.  

 It's pretty awesome how much time, effort, and minute details goes into small aspects; and all in the name of competition and innovation.

Also, Adam Smith really knew what he was talking about - specialisation of labour is pretty cool.

Another photo of a super smeller - not associated with Ford. 

Brexit, gold, a growth rate of 167.7%... wait, what?!

I'm doing a research project on Australia's composition of trade at the moment, so I'm looking at Australian trading stats. Scintillating stuff.* But I stumbled on something a little weird.

 So most countries had year on year growth of 2-3%. But one country had current trading growth consistently in the double digits .... and no, it wasn't China. Even China could only manage single digits (albeit approx. 8-9%... Japan can only wish). It was something that:

• has experienced stagnation compared to its more adaptable peers
• has a fairly unpopular leader at its helm
•  whose glory days remain in the past.

Pencils down. No, it's not the Canadian band Nickelback. In fact it's the United Kindgom that is managing 25.4% YOY growth in two way trading and 71.6% YOY growth in exports with the Oz. Merchandise trade grew 167.7% - and this is all around Brexit, damn! What's in the water in the U.K? Today, the Budding Statesman investigates. (Cue boring analysis below.)

On further inspection its exports that has been driving this growth. Since exports of services actually declined, it can only be Australian goods... which is probably gold, since proportionally it occupies a larger share of total exports. So the stats suggest that for some reason Britain had an absurd hankering for gold in 2015-16.  

After patting myself on the back for discovering (what I thought) was the second coming of the Gold Rush, I dug a little deeper... and alas, it was not to be:

Britain's trade deficit with the rest of the world is L6 billion larger than previously thought -- and at a record high -- because the nation's beancounters made a mistake in their sums.

The Office for National Statistics yesterday admitted to a big "processing error" that meant it had miscalculated the value of everything that the country exports and imports for almost two years.

The problem was found in the collection of "non-monetary gold" data, which measures the amount of gold traded privately rather than used in jewellery. For every other quarter from the start of 2015, the corrected numbers improve the trade picture, suggesting that UK investors have been net sellers of gold. Since Brexit, the data shows that they have become large importers of the dollar-denominated asset in an apparent flight to safety. 

So those record growth rates were a little exaggerated, to say the least. Darn. But still, I think the Nickelback/United Kingdom comparisons are still strikingly accurate. See below: this is Nickelback's "how you remind me", with some of my own personal annotations. Remind you of any country?

And this is how you remind me

This is how you remind me

Of what I really am (a country in structural decline)

This is how you remind me

Of what I really am (a country in secular decline)

It's not like you to say sorry

I was waiting for a different story...

** I actually do enjoy it quite a bit. Although I think my economics teacher might read my blog so its in my interest to say so anyway.

Many a broken promise...

It has been almost 3 months since I announced the return of the prodigal son/daughter. On April 25th, I proclaimed, rather grandly, "a return from the hiatus", implicitly promising more posts. I followed up on that by remaining inactive for three months. Caesar's backstabbing friends seem rather honest folk compared to some of my (rather ambitious) broken promises.

Since then, the trend line of the Budding Statesman's stats has followed the same life cycle as that of a souffle with too few egg whites: showing great promise, before sadly stagnating. This is entirely my own fault.

So because my lack of posting has caused my downfall, I have decided to grab the bull by the horns (the blog by the horns?) and write as often as possible (hopefully even every day) and in a more conversable manner.  This means more photos and more hip cultural references (and bad jokes). This will also mean, on average, shorter posts. But it'll also cut down on a lot of drabble, and I think overall it will improve the quality and readership of this blog. Especially considering my readership is mostly my mother's friends, who probably don't have time for 3,000 word posts.*  As Snow White proclaimed, "the mirror doesn't lie" - and neither does Google Analytics.

 So, judging by the success of some other blogs, I think I am on the right track - and so begins another day, and another approach. Hopefully this time it sticks.

(Gif courtesy of Riffsy.)

** I do appreciate your readership, but I think it may be time to branch out. Nevertheless, if some Ancient Roman armies were as loyal as you, we'd probably all be speaking Italian.

Links - 26/04/17

A new links post - finally. And a consequent (possibly temporary) return from the hiatus.

Over the past few weeks I've been busy with exams, so some of the links may be slightly dated. Nevertheless, they remain as interesting.

1. There was AirBnb, then Uber: is it now time for the 'kidney sharing economy'?

2. The effects of British colonialism on India: how bad was it really? I found this stat very revealing:

Another way to make the historical comparison is to consider which Southeast Asian economy never fell under colonial rule. That would be Thailand, which has a per capita income in the range of $16,300 by World Bank estimates, compared with India’s $6,100. 

3. Data collection in the 21st century: face scanners placed in public toilets in China to prevent toilet paper theft.  Toilet paper has some monetary value, but because of its social benefit, it is given to the public for 'free' as a common good. When you think about it, the only thing that stops widespread toilet paper theft is probably a fairly fragile belief in the common good. Its a rather unusual, yet widespread,  phenomena that disrupts the theory of the tragedy of the commons - so it's interesting to see what happens when this rather fragile "social belief" is upended by the more understandable individual desire.

4. Belarus has implemented a sort of "reverse-welfare" law (to put it crudely), where the underemployed have to pay a 'compensation tax', to make up for the taxes they aren't paying because they're underemployed. This policy seems self-perpetuating and counter - intuitive to me -- and needless to say, it has been hugely unpopular. This also invokes a pretty interesting discussion about the politics of Belarus, where political discourse has produced the label "the law against social parasites."

5. In Africa, why do women's rights advance so quickly after major conflict? Or, why are changes related to women's rights developing more rapidly in Africa than in Western countries, despite the former's relatively traditionalist and masculine culture:

 How were post-conflict countries able, in a relatively short span of time, to advance women’s status in key areas? They not only accomplished what the Nordic countries had done over the course of 100 years by increasing legislative representation, but, in some cases, even exceeded their rates almost overnight.

 Basically, major conflicts result in disruptions in traditional gender relations and structures - men are called upon during times of war to act as soldiers, etc. -   leaving a supply gap of sorts left behind, which is then filled by women.

This explains why Rwanda, despite have a male-dominated culture, has the highest proportion of females to males in Parliament. This is just another case of Markets in Everything, a.k.a the economics of gender politics in post conflict regions. It doesn't quite ring...


6. Yet another case study of black markets in fishing. Warning: plenty of puns in the link:

Federal prosecutors say a Massachusetts fishing magnate known as Carlos “The Codfather” Rafael has agreed to plead guilty in a scam involving catch quotas and smuggling money to Portugal. 

According to Hakai magazine, the malevolent fishmonger was selling his illegal catch to mob associate Michael Perretti. Perretti — a convicted felon — ran South Street Seafoods in the heavily mob-infiltrated fish market in New York.

I recall that Iceland also had rampant corruption in its catching quotas too. What is it about the fish market that seems to invite the festering of black markets? My closest guess is that its a 'tragedy of the commons': individual market players act according to their self interest, at the cost of the common good of all players, by depleting that resource through collective action. So, seemingly abundant and immeasurable resources such as the sea, and fish, seem limitless - and people fish to their heart's content, without consideration of the gradual erosion of a common good.

Challenging western voter demographics

Why are young voters turning out in droves for Le Pen?

Since Brexit and the election of Trump, there seems to be a general consensus in the mainstream media about western voter demographics. The narrative seems to be that older voters (say 50+), vote for the isolationist, protectionist option (that is, Brexit and Trump); while young people, having grown up in the era of social media, are more likely to vote for the socially and economically liberal option. American voters aged 18-24 preferred Clinton over  Trump by 55% - 37%; 75% of British voters aged 18-24 voted to remain, with the proportion of voters who voted to exit the EU increasing with age. 

So a general belief has emerged in Western voter demographics: older people = more conservative; and young people under the age of 30 = socially liberal.

So with the upcoming French election, I very much expected to see the aforementioned trends replicated in polls. The election has much of the same features that have been seen across recent elections in the Western world: an ideological clash between the  populist protectionist vs. the social liberal, a disenchanted populace, poor economic conditions. 

Not so!

A new poll on the French election shows that it is in fact younger voters who are throwing their support behind Marine Le Pen, the French presidential candidate of the anti-immigrant, anti - EU Front National  (FN) party. And older voters are more likely to vote for pro business, pro - free trade  Emmanuel Macron. 

See the graph below. Thanks to Ben Judah for the pointer. Unfortunately I wasn't able to find the original source of the graph: 

Form Trump & Brexit  trends shown, one would expect that Le Pen polls particularly well with older voters.  But support for Le Pen (the nationalist candidate)  decreases very strongly as the voters get older, while her support remains comparatively high among younger age groups, peaking at 35% in the 18-24 yrs. 

Meanwhile Macron polls (in my perspective) shockingly low amongst 18-24 group at 11%; ranging from 11-19% for those under 50 years. Adversely, his support has the opposite trend to Le Pen: it decreases as the groups get older, peaking at 28% in the 65+ group.

I find this fascinating - even though older voters tended to support Brexit and Trump, young French voters have completely rejected this pattern - so the question is, why is France not following the trend shown in other Western elections?

For the purpose of succinct analysis, I am only going to focus on Le Pen and Macron, the two candidates who:

1) are polled as the most likely candidates to make it to the final round

2) represent two vastly oppositional positions on most stances (pro EU vs. anti- EU; pro free trade vs anti free trade)

3) represent the seemingly 'ideal' candidates for two different groups: millennial (30 years and under) vs. baby boomers (50 years and older).

Why is there a difference? I have three hypotheses to this fascinating phenomena, listed from most to least relevant:

1. Young French voters have been disproportionately effected by France's economic downturn.

Political activism fundamentally stems from poor economic conditions. Voters who cannot see, or feel, a rise in living standards will turn towards unorthodox options, such as Le Pen. And in the case of young voters, their economic conditions, namely their inability to find a job, have necessitated political action. 

Firstly, youth unemployment in France is 23.6%, and has averaged 20% from the late 1980's to now - overall unemployment is 10%. This means that generally, French youths have been the unfortunate bearers of France's economic stagnation. This inability to find a job can be attributed to a number of factors - overall stagnant growth is one of them - but fundamentally, it comes down to the inflexibility of the labour market.  France's labour market has very generous conditions that greatly benefit those who are already employed - but unfortunately, those very benefits make it very difficult to hire people who are beginning to enter the market, such as young people. 

This systemic rigidity is compounded somewhat by the 'job market culture' in some Western Europe labour markets, such as France and Italy, that incorporate socialist benefits. The culture is generally geared to older, more experienced workers vs. young, entrepreneurial yet untested workers. 

Like fleas to a dog, France's labour market is partially responsible for unemployment and young people becoming inseparable from each other.  While employment prospects of French youths become more doubtful, their counterparts in the U.S and the U.K experience better job prospects. 
So young voters will begin to pivot to alternatives, such as Le Pen, when the political norm doesn't seem to be working. 

2. The memories of the 'dirtier' FN party linger among older voters; but are less familiar to millennials.

The FN was originally founded  in the 1970's, but only achieved prominence during the 1980's to the early 2000's. During this time, it became known for a number of controversial issues - most famously, their reinstatement of the death penalty  and their leader's denial of the Holocaust - leading to the party's slow decline in the 2000's. Marine Le Pen's modern leadership has since revamped the party, altering many of their previously xenophobic connotations. Perhaps older voters restrain from voting for the FN, due to their historic polarisation - but young voters, having grown up in the era of the transformed FN, do not maintain these connotations. 

EDIT: And, just as I am writing and editing this post, Marine Le Pen has just announced that she is stepping down as head of the FN in order to "broaden her appeal."

3. The ramifications of a potential EU exit for older voters.
This theory is perhaps a little less plausible, but I've included it because I find this theory very interesting and unorthodox. One of the central messages of Le Pen's campaign has been the electoral pledge of a Frexit referendum. Exiting the EU - and subsequently abandoning the single currency would be more damaging to the elderly, who have higher savings rates and are more heavily exposed, than the young. 

Of the three theories, ultimately I believe that 1) is the likely cause. In an era where it seems that political affiliations seem to be increasingly decided by age, it is important to remember that at the end of the day, people vote with their feet, not their social media feed. 

Links - 11/03/17

1. Sweden complains it's citizens are paying too much tax (the Financial Times). This is also a pretty interesting side effect of negative interest rates:

Negative interest rates have made some of the world’s highest taxes a lot less painful as businesses and individuals race to hand cash to the state because of the relatively generous returns on offer. 

Data released on Wednesday showed Sweden’s government generated a budget surplus of SKr85bn ($9.5bn) in 2016, with approximately SKr40bn coming from tax overpayments. The government will have to repay more than £3.5bn to businesses and individuals who purposely paid too much tax in 2016. 

2. Why hasn't Spain experienced a rise in right wing nationalist populist politics despite similar conditions? (the Financial Times).
 Article is really interesting, and mentions the importance of one aspect: the structure of the Spanish welfare system. It grants generous access to public services such as health and education, but doesn't provide social housing/cash payments. So its less obvious that the state is making wealth transfers from one part of the population (the natives) to another (the immigrants), and there's less finger pointing when economic conditions turn sour. "When there are no resources to compete for, the potential for conflict decreases."

3. The economics of kidnap insurance. 

4. What happens when populist policies become a reality? (podcast) A case study of Argentina. After being elected President, Cristina Fernandez de Kirchner said banned exports, and mandated that if companies wanted to sell in Argentina, they would have to build in Argentina.

5. The markets in hacking. (podcast) Again, to repeat the age - old mantra : "Nothing is certain except death, taxes, and the existence of markets when there is demand for a certain good. " I think Benjamin Franklin said that...