Archive for August, 2003

Feet of Clay

August 31st, 2003 14 comments

This opinion poll reported in the Sun-Herald shows Labor 4 points ahead on the two-party preferred vote. I don’t imagine that this will persist – the government has had a particularly bad week. Still there are a couple of lessons that can be drawn.

One is that, contrary to what was, at least a week ago, the conventional wisdom, Howard does not bestride the political scene like a colossus. Given some bad luck at the right time (for example, a Tampa-style stunt that went wrong), he could easily lose the next election.

The second is that the view of the government as ‘mean and tricky’ is well-established for a large section of the electorate. Episodes such as the ethanol scandal, Abbott’s efforts over Hanson and the WMD lies all fit into this perception.

As long as the housing bubble continues, the odds are in Howard’s favor. But, the bubble will burst sooner or later. When it does, the accumulated costs of mean and tricky government will burden the Liberal Party for years to come.

Update 1/9/03: Glenn Milne agrees with much of this, and emerges as a Costello partisan and strong critic of Howard. Is this new, and does it reflect a nascent Press Gallery consensus that Howard is consistently dishonest, and therefore should not be PM?

Further update 2/9: Dave Ricardo and Tim Dunlop, who follow Milne more closely than I do, say that he is a longstanding Costello partisan. And Mork raises the more general issue of the Press Gallery and its role. This will require a big post some time.

Categories: Oz Politics Tags:


August 31st, 2003 3 comments

Regular reader Jim Birch has been in touch by email to advise me that this site has been inaccessible and suggests the problem may be access restrictions introduced in response to the Blaster worm. I am looking into this, but haven’t made any progress yet. I’ve had lots of similar problems with other blogs in the last couple of weeks so it seems as if this worm is still doing lots of damage. To anyone who can read this and has any helpful suggestions, please make them.

Categories: Metablogging Tags:

What I'm reading, and more

August 31st, 2003 Comments off

A Universal History of Infamy by Jorge Luis Borges. Among other interesting features is the fact that Borges has drawn on sources including Gangs of New York (which was only recently published at the time Borges wrote) and Life on the Mississippi. I haven’t read either and also missed the film of Gangs of New York when it came out. So I’ll have to follow Borges’ pre-hyperlinks. I think he would really have loved the Internet.

I also went to see Life + Debt, a documentary about Jamaica and its troubles with the IMF. Insofar as there was a ‘line’, it was the standard anti-globalisation story of farmers being driven out of business by import competition and so on. A couple of things struck me about the film. One was that Jamaica seemed to have tried everything (self-sufficiency, free trade zones, general liberalization) and nothing seemed to work. So while the analysis implicit in the film was inadequate, it didn’t seem to me that the IMF had any better answers.

The other point, discussed previously in Ozplogistan, is how bad economists look on film. The film gave a lot of time to Stanley Fischer and wasn’t obviously unfair to him, but he came across dreadfully nevertheless.

Categories: Books and culture Tags:


August 30th, 2003 2 comments

This piece by Daniel Benjamin in Slate attacks the idea, being popularised by Bush Administration figures like Condoleezza Rice and Donald Rumsfeld that the occupying forces in Germany after World War II faced resistance from ‘Werewolves’, that is diehard remnants of the SS and Hitler youth similar to those found in Iraq today. The story seems to have been started by this National Review Online piece by Mackubin Owens

This story rang a bell with me, and, digging back I found this NRO piece by John O’Sullivan from early April which seems to have been the first mention of Werewolves. Interestingly, though, O’Sullivan, writing before Baghdad fell, was using this precedent to predict that no resistance would emerge.

Not a single “Werewolf” emerged from his lair. And the allies, who had arrived as conquerors not liberators, soon found themselves handing out food parcels to a grateful German population. That will happen in Iraq too. When? That no one can predict with certainty. But happen it will � and not long after the battle of Baghdad is joined.

So O’Sullivan’s account of the facts matches Benjamin’s and is exactly the opposite of his NRO colleague. I don’t know who’s right, though the fact that O’Sullivan’s version came first and that I had never heard anything of postwar German resistance before it became a Republican talking point suggests that O’Sullivan is correct.

I’ve never been a big fan of the ‘meme’ metaphor, but this example may force me to reconsider. Obviously, the Werewolves image has a good deal of reproductive power, and the virus changes its coat to survive in changing environments.

Categories: World Events Tags:

Age before beauty

August 30th, 2003 3 comments

Here in Brisbane, the buses still have signs admonishing students (who get concessional fares) to give up their seats to adults. I hadn’t seen this in action until yesterday, when I was on a bus from the University to the city, which was standing room only when I got on. An elderly lady got on the next stop and the driver used the PA system to call on students to get up and “give their seats to the older people”.

I was pleased to see that one student immediately offered her seat to the old lady. I had slightly more mixed feelings when another student followed suit, offering her seat to me. After declining one such offer, I decided it was better to age gracefully and accepted a second – the old knees aren’t what they used to be, after all.

Categories: Life in General Tags:

New on the website

August 29th, 2003 2 comments

A piece I wrote for the Fin on the ‘generation game’ several years back, but omitted to post on my website is finally online. Here’s a couple of paras.

One of the standard ploys in journalism, marketing and political commentary is the generation game. The basic idea is to label a generation ‘X’ or ‘Y’, then dissect its attitudes, culture, and relationship with other generations. The most famous generation, of course, is that of the Baby Boomers, born between the end of World War II and the early 1960s, and their most enduring contribution to the generation gap is the ‘Generation Gap’ between children and their parents.

At first sight, discussion of this kind can carry with it an air of fresh insight, but most of it stales rapidly. Much of what passes for discussion about the merits or otherwise of particular generations is little more than a repetition of unchanging formulas about different age groups ö the moral degeneration of the young, the rigidity and hypocrisy of the old, and so on.

Update 30/8/03 As if to prove my point, today’s Fin (subscription required) runs a particularly silly generation game, with an even sillier lead on the front page. After recycling the the usual cliched half-truths, the article turns to a complete furphy as its main theme. Boomers are blamed for grabbing the old age pension and leaving nothing for the young. In reality, boomers paid taxes during the 1970s and 1980s to finance a universal non-means-tested pension, with access for women at 60 and men at 65. Even when the pension was means-tested, tax concessions for superannuation and easy access to lump sums gave lots of early retirees the chance to double dip.

Now pensions are tested on both income and assets, the women’s age is being raised to 65 (just in time for the first boomers) and there’s talk of pushing the pension age up to 67 after that. Concessions for superannuation, while still generous compared to most other investments, have been scaled back significantly, as has the generosity of employer contributions. On any reasonable assessment, it’s the Depression kids who have done well on this score and the boomers who have paid for schemes whose benefits they will never enjoy.

Categories: Metablogging Tags:

Walmart and productivity, Round 2

August 28th, 2003 2 comments

Brad de Long slams as ‘fast food journalism’ a piece in the Financial Times by John Kay, on the topic of US and European retail productivity. His main complaint is that Kay implies that productivity statistics for retailing take no account of differences in the quality of service between friendly local retail markets and gigantic US-style megamarts. As Brad correctly says, the Bureau of Labor Statistics in the US takes a lot of trouble over this kind of thing.

Brad goes on to say, or at least imply, that Kay’s preference for the friendly local market over the Carrefour supermarket is snobbish and takes no account of the benefits to low-income workers from low-margin stores like WalMart, which are denied them by European regulation. This seems a bit unfair – as I read Kay, he’s saying that the regulations are superfluous and that the local markets can survive the competition.

Turning to the more general issue of productivity comparisons, Brad’s post raises quite a few points. First, while the BLS no doubt does its best, it is still true that retail productivity is hard to measure, and that claims of large gains must be taken with a grain of salt. For example, in principle, the BLS should take account of the increased travel time required for shoppers to go to edge-of-town Walmarts, but I don’t think they do so.

Second, as I pointed out in another recent post on this topic, the quality adjustments undertaken by the BLS do not take account, even in principle, of the negative externalities arising from people driving long distances, externalities that include traffic congestion, the loss of green space and thousands of extra road deaths every year.

Third, the BLS generally does a lot more of this ‘hedonic adjustment’ than do European statistical agencies (or, as far as I can tell, the Australian Bureau of Statistics). I think the BLS estimates are probably more accurate on balance. Regardless of which estimates are better, the inconsistency means that comparisons of US and European GDP and productivity growth are systematically biased in favor of the US, by about 0.5 percentage points per year.

Finally, the really big question is whether the differences in US and European consumption patterns, working hours and so on are driven by different tastes, different relative prices and regulatory constraints or some complex combination of the two. I’m still planning a big post on this question Real Soon Now.

Categories: Economics - General Tags:

Thought for Thursday

August 28th, 2003 Comments off

My opinion piece in today’s Fin (subscription required) covers the failure of the Job Network to put people into jobs and the general tendency of Australian economic policy to destroy human capital rather than building it. It should be posted at Australian Policy Online fairly soon, and at my website a bit later on.

Categories: Economics - General Tags:

Academic freedom

August 28th, 2003 11 comments

I’ve finally got around to resuming the debate with Andrew Norton over my claim that neoliberals (or, if you prefer, contemporary classical liberals) are not particularly supportive of freedom of speech. Norton argues that the absence of discussion of freedom of speech reflects the fact that, with minor exceptions, freedom of speech is not threatened.

But at least one form of freedom of speech, academic freedom, is coming under sustained attack. Academics are regularly being subject to attacks from university managers either for criticising the commercial operations of the university or for political speech. The most notable recent example was the Steele case, but it is by no means unique.

The Centre for Independent Studies has been active participant in this debate, and has presented the viewpoints of university managers concerned to manage or suppress academic freedom. The most striking instance is a piece by Steven & Gregory Schwartz (Steven Schwartz was formerly vice-chancellor of Murdoch university. The breakout quotes chosen by the CIS in republishing the piece give the basic line

the laissez-faire approach to academic freedom is neither logical nor practical

like freedom of speech, academic freedom has its limits

Lauchlan Chipman is more reasonable, but still seeks to invent precedents for the restrictions on academic speech managers are now trying to impose.

Australian universities have always insisted that academics have no right to comment publicly, except as ordinary citizens, on any matters outside their area of academic expertise. Whether written or unwritten, such policies have always denied academics the right to use their university rank, occupational position, or address in external communications on other than their area of academic expertise

I can say from personal experience that this is untrue. Precisely this issue was vigorously debated when I was at James Cook University, where the management was trying to suppress an environmental law lecturer who was criticising an influential local property magnate. You can read a bit about the case here (search for David Haigh). At the time, the Academic Board had sufficient power to resist this move, but as Chipman indicates, it’s a standard item in the managerialist log of claims. And of course it’s managers who decide what is relevant.

The concept of academic freedom raises a lot of complex issues, including the general ‘whistleblower’ problem, the relative weight placed on freedom of contract and freedom of speech and the nature of universities. But it’s easy to see who is in favour of free speech and who is against it.

Categories: Politics (general) Tags:

Asian values

August 28th, 2003 4 comments

Absurd comparisons between Pauline Hanson and Nelson Mandela have not helped to advance the debate. But a more useful comparison might be made with legal harassment of opposition politicians in countries like Singapore. It is not illegal to oppose the government there, but somehow opposition leaders seem to run afoul of the law a lot, notably with defamation actions. In particular there are strict regulations on the constitutions and financial affairs of political parties, which cause big problems for opposition parties.

Australia is not the same as Singapore. Nevertheless, I imagine the Hanson case will be quoted prominently in reply next time anyone from Australia criticises restrictions on the political freedom of our Asian neighbours.

Categories: Oz Politics Tags:

Reality bites

August 27th, 2003 8 comments

This reported statement from Paul Bremer, acknowledging that reconstruction in Iraq will cost tens of billions of dollars, and that oil revenue will come nowhere near paying for this is a welcome acknowledgement of reality. But there is still no sign that the US Administration as a whole has accepted the need to spend lots more money. And even Bremer is still sticking to the party line that other countries (read Old Europe) can be expected to give buckets of money to Uncle Sam while being treated as pariahs or interlopers.

Meanwhile Howard is steering clear of the whole thing, offering no more than the handful of troops still left in Iraq and no serious money. I’m in two minds about this. Certainly, we have plenty of problems closer to home, and the benefit-cost ratio is probably higher in the Solomons than in Iraq. On the other hand, we invaded Iraq, smashed its economy to bits, and are now leaving the unfortunate Iraqis to pick up the pieces.

Categories: World Events Tags:

Copy that

August 27th, 2003 4 comments

First, it was Fox News claiming to own fair and balanced. Now US clothing store Abercrombie and Fitch claims to own the number 22.

They can have it for the moment. I plan to file an innovation patent on prime numbers. On past precedent, there should be no problem with that. Once that’s established, I’ll license derivative products like composites and A&F can look out.

Categories: Economic policy Tags:

Abbott v Hanson

August 26th, 2003 23 comments

Our legal system behaves in strange ways. Pauline Hanson was jailed for three years for a highly technical breach of the electoral registration rules. But apparently it’s OK for one political party to foment and fund legal disputes within another.

Update According to Ken Parish, Abbott may indeed be in legal difficulty over this.

Categories: Oz Politics Tags:

A belated farewell

August 25th, 2003 1 comment

Blogging is hard work – it’s particularly hard if you try to keep up with what other bloggers have been doing on a regular basis. I’ve let that slide a bit recently, and have been busy enough just responding to comments and pings. As a result I only just read this signoff post from Carita Kazakoff’s Manas blog. Carita didn’t post all that often (probably why she’s managed to kick the habit), but she brought a refreshingly different perspective to a lot of the issues she covered, particularly East Timor/Timor Leste.
Her post gives a hint that she may return next year, which would be very welcome.

Categories: Metablogging Tags:

Bad news for red wine drinkers

August 25th, 2003 2 comments

The news that scientists have discovered an ingredient in red wine that promotes longevity has been greeted with naive enthusiasm in some quarters. On the contrary, this is BAD NEWS. The sooner they isolate the crucial ingredient, the sooner they’ll be able to package it in a nasty pill.

Categories: Life in General Tags:

Monday Message Board

August 25th, 2003 4 comments

Another Monday, another message board. Post on any topic, civilised discussion and no coarse language please.

Regular reader Observa suggests the topic ‘Is the patenting of living organisms the new face of slavery?’

I’d be interested in comments the more general question of whether the patent system has overreached itself and whether patents now do more harm than good (leading questions, I know).

Categories: Regular Features Tags:

What I'm reading

August 24th, 2003 9 comments

The Glass Bead Game by Herman Hesse. Hesse had a huge vogue in the late 60s – along with Charles Dickens and Aldous Huxley, he’s one of a handful of writers to have been the inspiration for the naming of a well known rock group – but he seems to have slipped into obscurity nowadays. Rereading The Glass Bead Game, there’s an obvious similarity with Ursula Le Guin’s Earthsea books, which in turn are reflected in Harry Potter. I’m tempted to say that this is a line of descent in more ways than one, but actually Le Guin stands up pretty well to comparison with Hesse and I’m not going to bag JK Rowling for writing readable massmarket kids books rather than great literature.

Categories: Books and culture Tags:

Patently right

August 23rd, 2003 1 comment

There’s an interesting piece in today’s Fin (subscription required) about Uni of NSW Vice-Chancellor Rory Hume, who says universities should give away (nearly all) the research they produce rather trying to make money out of intellectual property. I think he’s right for a number of reasons.

First, despite some impressions to the contrary, the returns to universities from commercialising research have been very poor, even in the US where this has been going on for a long time. The Australian Research Council did a study on this and found that the returns from commercialisation were about 2 per cent of the cost of research. In fact, if unis fully costed their commercialisation outfits, including land and administrative overheads, I suspect that the true figure would be negative.

Second there’s the standard public good argument. The social benefits are greater if the results are free to use.

Third, there’s something I saw on Four Corners a couple of weeks ago. They interviewed a very unattractive character who’s secured a dubious patent on non-coding DNA and is using it to extract license payments from virtually anyone engaged in genetic research. In a breach of previous tradition, he’s going after university researchers. When challenged on this, he made the point that uni research labs were commercial outfits these days and deserved to be treated as such.

Categories: Economics - General Tags:


August 22nd, 2003 2 comments

At a time when the Howard government’s increasingly brazen dishonesty (in all senses of the term) might just be starting to sink in with the electorate, and with the Hanson business raising all sorts of memories, what does Labor go and do but appoint Mike Kaiser assistant national secretary. For those who don’t recall, Kaiser was the leading operative of the AWU machine in Queensland and was forced to resign his Parliamentary seat after admitting involvement in branch-stacking.

Stacking is not the gravest of offences, and I wouldn’t necessarily say that Kaiser should never return to public life, but appointing him as a national official in a party that is supposedly trying to stamp out things like branch stacking is just plain stupid.

Categories: Oz Politics Tags:

Walmart and productivity

August 21st, 2003 3 comments

Brad de Long links to this piece by Robert Gordon arguing that an important segment of the recent gain in US productivity growth has come in retail trade. Gordon says

America’s retail productivity performance has all been achieved in stores newly built since 1990, not in existing stores.

The new stores are the “big boxes” such as Wal-Mart, Home Depot and Best Buy, large new buildings set up on greenfield sites at interstate highway junctions, in suburbs and, increasingly, in inner cities. As these new stores reap the rewards of their size, openness and accessibility and drive smaller stores out of business, they bolster the average productivity of the US retail sector as a whole.

While countries differ, Europe has many ways of stifling modern retailing, from green belts and land-use restrictions to laws that prevent companies from lowering their prices. These make life difficult for new, more efficient retailers in order to protect small, traditional merchants. This is one of many cultural chasms across the Atlantic. Many Europeans could not care less about retail productivity and instead are adamant that Europe must avoid the US’s unregulated land use and starvation of public transport, which have produced its overly dispersed, energy-wasting metropolitan areas.

This is interesting in a couple of ways.

First, it helps to resolve a puzzle I’ve been pointing out for some time. If US productivity growth is so strong, why is employment in tradables like manufacturing shrinking so fast? On this account, the productivity growth is mainly in nontradables.

But the second point is more important. Retail productivity is very hard to measure. For example, measured retail productivity declined in Australia when shopping hours were extended – the extra convenience wasn’t taken into account in the statistics. By Gordon’s account, the apparent efficiency of big, edge-of-town stores is offset by a lot of negative externalities, and higher travel costs borne by consumers, and other road users. As I observed here and here the US has experienced a big increase in distances travelled, even compared to Australia and this has been accompanied by an increase in road deaths, giving the US one of the highest rates of road death in the OECD, about 50 per cent higher than Australia’s. And all of this reflects the fact that road use in the US is substantially underpriced, as was noted in a recent Chicago Fed letter.

Of course, there’s no easy way of telling whether the costs I’ve mentioned outweigh the benefits that are measured in the retail productivity statistics. Since so many of the costs are externalities, the success of WalMart in driving out the competition doesn’t prove anything. But it’s disappointing to see a fine economist like Robert Gordon fall back on cliches like ‘cultural chasm’ in relation to outcomes that are largely the product of economic policy. And, whatever the net balance, it’s clear that the measured growth in retail productivity is an overestimate.

Categories: Economics - General Tags:

Bad news from Kabul

August 21st, 2003 6 comments

This report from Salon is the most depressing of a string of depressing stories I’ve seen coming out of Afghanistan.

As the article makes clear, there are all sorts of reasons for the current problems, going back at least to the Russian invasion. But a big one is that the US has not spent the kind of money required to make a success of nationbuilding, and has not provided the kind of security that would encourage other donors to spend either. How much is needed would be hard to tell, but an obvious benchmark would be to return living standards to what they were before the current cycle of wars started. This would cost tens of billions of dollars, whereas the total amount being spent is around $1 billion.

All of this applies even more with respect to Iraq, which was wealthy before the war with the US started in 1991 (even more so before Saddam’s war with Iran). I estimated a few months back that a policy with a reasonable chance of establishing a stable democratic government would require expenditure of between $25 billion and $50 billion, and that the cost of undoing the damage of the last 15 years would be between $100 billion and $200 billion (all of this excludes the costs of military occupation). So far, the aid committed by the US Administration is $2 billion.

The pro-war Weekly Standard agrees, and has even suggested a petrol tax to defray some of the costs (thanks to Jack Strocchi for passing this along). Of course, there is no prospect of this happening. But at least the Standard, unlike most of those who supported the war, is pushing the Administration to take the kind of actions that would be needed to justify it.

It’s possible that the current policy of nation-building on the cheap might work. The atrocious attack on the UN building and, more generally, the shift towards civilian targets on the part of at those fighting the occupation forces may shift public sentiment against them. And perhaps the attacks on civilians are a sign of weakness. But the example of Afghanistan does not provide any grounds for optimism.

Categories: World Events Tags:

Freedom of speech part 2

August 21st, 2003 1 comment

Andrew Norton responds to my brief post on neoliberalism and free speech, joining a longstanding debate I’ve had with his Catallaxy colleague Jason Soon, in which I’ve criticised neoliberals, and particularly Hayek, for a lack of commitment to free speech. A few of my posts are here, here and here (if you want the comments threads you’ll need to go through the archives of the old Blogspot site). Here’s one of Jason’s responses.

I’ll say more on this soon, but before the brickbats start flying, I thought I’d throw a bouquet. Norton’s post mentioned that he’d written on political correctness and I found this piece, in what appears to be a preblog precursor of Catallaxy, in the old Geocities domain. Given that, as he says, Norton shares many of the views of the anti-PC brigade on political issues, his rejection of the anti-PC line shows a robust commitment to free speech.

Categories: Philosophy Tags:


August 21st, 2003 9 comments

While I’m no fan of Pauline Hanson, I’m concerned about the processes that have led to her being imprisoned for three years.

As I understand it, her offence was to create a political structure under which she and her immediate circle constituted and controlled the One Nation Party, while the ordinary members belonged to a ‘supporters group’ with no power to do anything. Since the Party proper did not have 500 members, its registration was an offence, as was the receipt of electoral funds.

The fact is that, with the exception of the Australian Democrats (and maybe the Greens, I don’t know how they work) all the major Australian political parties have structures under which the leadership is a self-perpetuating elite and the ordinary members belong, for all practical purposes, to a supporters group. Particularly in the Labor Party, the exclusion of the members from any real power has been a slow and painful process, which has taken decades. Hanson’s crime was to cut corners in an effort to achieve the same outcome quickly.

More importantly, I don’t think the requirements of the Electoral Act for 500 members were meant to ensure party democracy, but merely to avoid the registration of bogus parties as a political device. Whatever its faults, One Nation was (and I suppose, still is) a real political party.

Categories: Oz Politics Tags:

Freedom of speech

August 20th, 2003 16 comments

Catallaxy Blogger Andrew Norton has an article in the Oz arguing, among other things that labels like “neoconservative” aren’t really applicable in Australia. In general, the piece is both informative and accurate.

There is, however, one characteristic error. Norton suggests the use of

liberalism or classical liberalism to describe the free marketers who, in the old line, want to keep the government out of the bedroom as well as the boardroom.

This definition omits the crucial preoccupation of classical liberals like John Stuart Mill, freedom of political speech and thought. The problem is illustrated by, say, Jeff Kennett, who fits Norton’s definition perfectly, but would certainly not have been recognised as a liberal by Mill in view of his sustained, and largely successful, efforts to intimidate and silence his critics. A lack of concern with freedom of speech and political thought is the main distinguishing feature of neoliberals, as compared to classical liberals.

Categories: Philosophy Tags:

Health & Education vs Welfare

August 20th, 2003 3 comments

Peter Saunders (the CIS one) has a piece in today’s Age about people’s responses to public question on taxation and public spending. He correctly observes that it all depends on what question you ask but gets the main issues wrong. Saunders makes a big deal about status quo bias, arguing that the big difference is between questions that ask “tax cuts vs improved services” and those that ask about “higher taxes for improved services”. The ACTU gets 76 per cent in favor of improved services vs tax cuts, whereas the CIS found only 12 per cent in favor of higher taxes.

The status quo effect is real, but Saunders ignores the big difference between the questions. The ACTU asked about health and education services, whereas the CIS asked about welfare. An ANU question asking about “social services” came in halfway between the two. This is consistent with a string of findings going back to EPAC surveys in the early 90s which show that people are much keener on health and education spending than on higher welfare payments.

Reading the data, most people are happy to keep welfare payments where they are, though more would prefer a cut to an increase. On the other hand, most people would support higher taxes for better education and health, though of course they’d prefer other people to pay the higher taxes.

Even given his relatively recent arrival on our shores, Saunders ought to be aware of all this. It may be that he’s papering over the gaps in his argument, or it may be that he’s simply not up to speed with the issues.

Categories: Oz Politics Tags:

Broke vs broken up

August 19th, 2003 6 comments

While I was looking into household debt recently, I ran across a striking fact. In the year ending March 2003, more Americans went bankrupt than got divorced. There were 1.6 million bankruptcies in the year, about 40 per cent of which involved couples, implying around 2.2 million people going bankrupt. There were around 1.0 million divorces, or about 2.0 million people getting divorced. This (or maybe the year before, the divorce stats are a bit fuzzy) is the first time bankruptcies have exceeded divorces, at least since the Depression. The increase in bankruptcy has been exceptionally rapid. As recently as 1985, there were only 300 000 personal bankruptcies a year.

Read more…

Categories: Economics - General Tags:

The generation game

August 19th, 2003 4 comments

Ken Parish has been playing the generation game (in this case, Baby Boomer vs Gen X) with Paul Watson an avid boomer-basher. A good time was had by all, as usual.

I don’t want to interrupt anyone’s fun, but I thought it might be worth pointing out that as a device for explaining social trends, the idea of a ‘generation’ is almost totally useless*. Nowhere is this more true than when it’s used with reference to ‘baby boomers’.

Among the obvious problems with this concept are the facts that

  • Most of the people thought of as archetypal boomers weren’t born during the baby boom (examples: John Lennon 1940-80 and Mick Jagger 1943- )
  • Most people born during the baby boom entered the labour force during a period of high youth unemployment and have experienced high rates of unemployment ever since

To satisfy all the standard cliches about baby boomers you would have to be simultaneously over 60 (to be a contemporary of Lennon and Jagger) and under 35 (to be among the last to get a free university education in Australia).

I did a more lengthy analysis of the generation game in the Fin a few years back which I’ll post soon.

* For some limited technical purposes, the related concept of a ‘cohort’ is useful, if handled with care.

Categories: Life in General Tags:

Data is not the plural of datum

August 18th, 2003 10 comments

In a recent comments thread, Dave Ricardo notes my observation

Unfortunately the data is only published annually

and asks

Don’t you mean, the data are published only annually?

This is a common error, reflecting a confusion between Latin and English.

In Latin, data is the plural of datum (‘something given’). The word ‘datum’ is used in English, but is an archaism, except for a specialised use in surveying. On standard principles of modern English usage, the correct plural of datum is ‘datums’ and a Google search reveals 158 000 occurrences of this term. (For comparison, ‘data’ occurs over 100 million times).

In English ‘data’ is a mass noun like water or wheat. Hence it can be used in compounds like “data base”, “data processing” and so on, which would be ungrammatical for a plural like ‘datums’. This simply reflects our everyday experience with data which, is that it is a quantity of information, not a collection of facts. For example, it would be natural to refer to “500Kb of data”, but wrong to refer to “500 data”.

Data is normally dealt with as a mass, but it is sometimes important to refer to discrete units, in which case it is appropriate to use the count nouns ‘data point’ or ‘observation’ (drops of water and grains of wheat provide an analogy for other mass nouns). A collection of data points can be referred to as a ‘data set’.

Although lots of people imagine that ‘data’ is a plural count noun, and some try to treat it that way, hardly any do so consistently. To give just one example, I looked for occurrences of the phrases ‘not much data’ (correct for a mass noun) and ‘not many data’ (correct for a count noun) using Google. There were 10 times as many occurrences of ‘not much data’. Moreover, a large proportion of the ‘not many data’ observations were either written by non-native speakers of English or formed part of grammatically correct phrases such as ‘not many data sets’.

Update There is nothing new under the sun. Kevin Drum at Calpundit blogged on the same topic a few months ago, reaching the same conclusion.

Categories: Dictionary Tags:

Monday Message Board

August 18th, 2003 17 comments

It’s time once again for your comments on any topic (civilised discussion and no coarse language please).

Suggested discussion starter: Is there an optimum population for Australia, and if so, what is it?

Categories: Regular Features Tags:

The Bush miracle, again ?

August 17th, 2003 3 comments

In the comments thread to a recent post, Brad de Long argues against my claim that it’s appropriate to focus on multifactor productivity, pointing out

falling prices of IT have led to an *enormous* increase in the rate of capital deepening. Stagnant capital productivity and slow growth in multifactor productivity are not inconsistent with rapid growth in labor productivity if capital goods become really cheap really fast…

On reflection, I think Brad is correct at least in principle. The point he makes reflects the distinction between “embodied” productivity growth, which arises from better and cheaper machines, and “disembodied” productivity growth, which is the residual captured in multifactor productivity calculations. The remaining issue is how the numbers work out

Read more…

Categories: Economics - General Tags: