Archive for January, 2005

Monday Message Board

January 31st, 2005 42 comments

It’s time for the regular Monday message board, where you are invited to post your thoughts on any topic. Civilised discussion and no coarse language, please. My suggested discussion starter: Back to school?

Categories: Regular Features Tags:

Some unsolicited advice for the United Iraqi Alliance

January 31st, 2005 16 comments

The Iraqi elections seem to have been about as successful as could have been hoped, and may represent the last real chance to prevent a full-scale civil war. The pre-election analysis suggests that the United Iraqi Alliance, the main Shiite coalition, will get the biggest share of the votes, but probably not an absolute majority. If so, their leaders will face two immediate choices.
Read more…

Categories: World Events Tags:

What I’m reading

January 30th, 2005 8 comments

I’ve just finished Who Rules? How government retains control in a privatised economy by Michael Keating. Keating’s basic analysis, with which I agree, is that governments are facing a problem of rising demands and bounded state capacity. Hence, wherever possible, they are economising on capacity, for example by using regulation rather than direct public provision of goods and services. Thus, the reforms of the 1980s and 1990s are seen, not as cutting back government but as making it more effective. An obvious inference is that, if the size of the public sector, relative to the economy as a whole, has remained roughly constant for the past 25 years, and the effectiveness of the state has been enhanced, then government is playing a larger role than before, contrary to the hopes of neoliberals and the fears of social democrats. I think this is broadly correct.

Not surprisingly, Keating has a more favourable view of the reforms, many of which he helped to implement, than I do. On almost every point, I felt he was a little too supportive of the reform agenda and a little too dismissive of the critics[1]. Still, it’s an important contribution to the debate, and well worth reading.

fn1. Interestingly, I get quoted a few times, but mainly for criticisms of the pre-reform status quo, such as the observation that industry policy in the era of tariff protection was ad hoc and incoherent.

Categories: Books and culture, Regular Features Tags:

PPPs and renegotiation: Citylink and Scoresby

January 30th, 2005 20 comments

One of the big questions about Public Private Partnerships is what happens, when the deal needs to be renegotiated in some way, 10, 20 or 30 years after it was signed. This story about changes to an interchange affecting CityLink in Melbourne is of interest. The deal is being financed in part by replacing some payments due to be made by Transurban (the Citylink operator) with a smaller upfront payment. The financial arrangements are too complex to permit a clear assessment, but one point is striking.

Last year Transport Minister Peter Batchelor said the Government wanted $200 million for the upgrade. Transurban said it wanted to pay only $150 million – the eventual figure.

So, starting with a a $50 million gap between the initial positions, Transurban got the whole $50 million and the public got nothing.

Related to this is an interesting kerfuffle over the Scoresby (Mitcham-Frankston) motorway. As many will remember, the Bracks government initially promised not to impose tolls, then reneged, copping a lot of flak in the process. The Opposition leader, Doyle, has promised to renegotiate and remove the toll. This has presented the Bracks government with interesting incentives. Usually governments involved in PPPS want to stress what a good deal they have got for the public, in terms of the toll revenue that has been promised the private ownership. But now the situation has been reversed. Faced with Doyle’s promise, the government and its agencies commissioned a PwC report[1] which said that scrapping the tolls would cost $7 billion, with a cost of $4.5 billion for buying out the project. By contrast, construction cost is about $2.5 billion plus “other financial costs” of $1.3 billion.

It appears from these reports that the value of the tolls that have been alienated is nearly three times the cost of building the road[2]. Of course, the government’s report has been produced under pressure to make the repurchase option look as unfavorable as possible. But then, the vast majority of published analyses of PPP projects suffer from the opposite bias.

What’s even more striking about this is that, in PPP circles, the Mitcham-Frankston project is being touted as a huge success, evidence that we are finally getting these things right. Something does not add up here.

fn1. The conclusions have been released, but the interesting bits like the traffic projections are, as usual, commercial-in-confidence. At least, when I asked for them, that’s what I was told.

fn2. Using the $4.5 billion buyback cost and accepting that some of the “other financial costs” would be incurred under standard procurement would give a less extreme result. But the $7 billion number is the one the government has been touting.

Categories: Economics - General Tags:

An emerald the size of a plover’s egg

January 29th, 2005 Comments off

Readers of my previous post will have noticed that I don’t know much about MMPORPGs In fact, I don’t do much gaming these days, though I chewed up untold amounts of then-scarce mainframe computer time playing Adventure in the 1970s. Still my foray into the field has left me the kind of excitement you get the first time you wander into one of these domains and find precious jewels lying about everywhere.
Read more…

Categories: Metablogging Tags:

Habib and proceeds of crime

January 29th, 2005 23 comments

As Mamdouh Habib returns from Guantanamo Bay, released without charge after three years, Attorney-General Philip Ruddock is suggesting that the government may seek to stop him selling his story, using legislation that prevents people gaining income from the proceeds of crime.

Contrary to some other commentators, I hope Habib sells his story and that the government makes good on its threat of legal action. I’d be very interested to see what information the government has on this man, whom they have effectively labelled a terrorist, and left to rot, first in Egyptian torture chambers and then in Guantanamo Bay. If they can show, even on the balance of probabilities, that Habib is a terrorist, then he shouldn’t get any money from media organisations, though he should still be free to tell his side of the story without payment.

And now that the issue has been raised, the heat is on the government. If they don’t act, it can reasonably be inferred that it’s because they couldn’t win, and given his statements on this and previous occasions, Ruddock should resign[1].

fn1. Fat chance, I know. But the presence of Ruddock and others like him is the main reason I’ll never be reconciled to this government, no matter how lame the opposition.

Categories: Oz Politics Tags:

The Everquest Economy (crossposted at Crooked Timber)

January 28th, 2005 10 comments

The Economist has an interesting piece on the interaction between the economy in massively multiplayer games and that of the real world. The classic study of this question is Castronova’s analysis of the economy of Norrath, the setting for Everquest. Among various features of Norrath’s economy, one of the most interesting is trade with Earth through the sale of game items (weapons and so forth) via private treaty or on eBay[1]. This enables Castronova to estimate that the wage in Norrath is $US3.42 an hour, a figure that has some interesting implications.

At the Creative Commons conference last week, I heard a story to the effect that when the owners of one of these games tried to prohibit item trading they were sued and, in the course of litigation discovered that the plaintiff ran a sweatshop in Mexico where workers participated in the game solely to collect salable items. Clearly as long as the wage is below $3.42 there’s an arbitrage opportunity here. More technically sophisticated arbitrageurs have replaced human workers by scripted agents, working with multiple connections. Either way, arbitrage opportunities can’t last for ever, and are likely to be resolved either by intervention or inflation

The positive economics of all this are interesting enough. But how about policy analysis? Who benefits and who loses from this kind of trade, and do the benefits outweigh the costs?
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Categories: Intellectual 'property' Tags:

Responding to the critics, part 2

January 28th, 2005 Comments off

Today’s Fin (subscription only) has a couple of letters responding to my review of Lomborg’s “Global Crises, Global Solutions
. One from Brent Howard takes the Copenhagen panel to task over their approach to discounting the future costs of global warming. I agree, and will maybe post more on this later. The other, from Rajat Sood, is odd. He doesn’t address the main review at all, focusing instead on my summary of The Sceptical Environmentalist. Sood denies my initial claim that Lomborg did not argue that the scientific evidence on global warming was wrong, focusing instead on the idea that it would be better to spend money on aid projects. (full letter over the fold) I expected the review to be attacked from various directions, but this one surprised me.

In response, I can’t do much better than quote Lomborg himself

Let us agree that human activity is changing our climate and that global warming will have serious, negative impacts. Nonetheless, all the information from the UN climate panel, the IPCC, tells us that it will not end civilisation … The end-of-civilisation argument is counterproductive to a serious public discourse on our actions. We do have a choice. We can make climate change our first priority, or choose to do other good first.

If we go ahead with Kyoto, the cost will be more than $150bn (£80bn) each year, yet the effect will first be in 2100, and will be only marginal. This should be compared with spending the $150bn each year on the most effective measures outlined in the Copenhagen Consensus, saving millions of lives. The UN estimates that for just half the cost of Kyoto we could give all third world inhabitants access to the basics like health, education and sanitation.

It’s true that Lomborg spends some time in his book discussing arguments that the threat of global warming may be overstated in scientific terms, but (wisely) he doesn’t rely on any of them.Here are a couple more sources, favourable and hostile, giving broadly similar summaries of Lomborg’s position.
Read more…

Categories: Economics - General, Environment Tags:

Responding to the critics, part 1

January 28th, 2005 3 comments

The Economists’ Voice has printed a comment by Thomas Grennes on my article on the US trade deficit. The abstract

John Quiggins’ article, “The Unsustainability of U.S.Trade Deficits” ignores the gains from international borrowing and lending and the gains from trading according to comparative advantage.

isn’t very informative, but he mainly argues against the idea of a zero current account deficit. Grennes misses my point fairly comprehensively. Here’s my draft response

Thomas Grennes’ letter ‘Neither Borrower nor Lender Be’, in response to my article on The Unsustainability of the US Trade Deficit illustrates my observation that ‘much analysis confuses the current account deficit and the goods and services deficit’. As stated in the summary, ‘Although substantial current account deficits can be sustained indefinitely, large deficits in goods and services trade cannot be. Even to stabilise the current account deficit, the United States must restore balance in goods and services trade within a decade or so.’ Grennes ignores this, and focuses entirely on the current account balance.

Grennes suggests that ‘a zero current account balance implies neither borrowing nor lending, and a zero balance appears to be what Quiggin advocates.’ In fact, I examine the adjustment needed to stabilise the current account at its current (historically high) level of 5 per cent of GDP, and show that this requires a fairly rapid return to balance or surplus on the trade account.

Even in the world of web-based journal publishing, it will probably take a month or two for this to get through the publishing process, so comments and suggested improvements are most welcome.

Categories: Economics - General Tags:

Pinochet’s private pensions

January 27th, 2005 15 comments

For twenty-five years or so, the privatised pension scheme introduced in Chile under the Pinochet regime by his labour minister, Jose Pinera, has been touted as a model for the world to follow. It’s been particularly influential in the US debate over social security privatisation but has also had some influence in Australia, which has a somewhat similar setup, though we arrived at it by a different route – Chile scrapped its defined-benefit state pension scheme, keeping a basic safety net, Australia started with a means-tested flat-rate pension, but has tried to expand private superannuation since the 1980s

Now the New York Times reports that the Chilean scheme is not delivering the promised benefits . Lots of people are getting less than they would have under the old scheme and large numbers are falling back on the government safety net. Fees have chewed up as much as a third of contributions.

Why has this bad news taken so long to emerge. Complaints about fees have been around almost since the start, but right through the 1980s, they were ignored becuase investment returns were exceptionally high. This in turn reflects the fact that Pinera had the good luck or good judgement to start the scheme when the stock market was at an all-time low, thanks to a financial crisis (in retrospect the first of many cases where financial market darlings got into trouble). The economy recovered and the stock market boomed. Once gross returns fell back to normal levels, the bite taken out by fees became unbearable.
Read more…

Categories: Economics - General Tags:

Best blog in Queensland!

January 27th, 2005 10 comments

One of the Australia Day events I didn’t catch up with until today was the announcement of the second (I think) annual Australian blog awards, run by Keks. Most of my favourites scored some kind of guernsey, including Barista (best Vic blog), Rob Corr’s Kick and Scream (best political and best WA), Troppo Armadillo (best NT and best group blog), Surfdom (best OS blog) and Gianna at She Sells Sanctuary (best personal blog). And this blog picked up the coveted “best blog in Queensland” award, beating off (sorry, couldn’t resist) Dawei’s House of Debauchery and Bee-yotching.

The left wing of Ozplogistan swept the awards, which is partly a reflection of who bothered to vote, but partly a reflection of the extent to which the left now dominates the virtual sphere in Australian politics, however poorly we may be doing In Real Life. When I started blogging in the distant days of 2002, right-wing bloggers dominated the scene. A year ago, I’d have said the balance was about the same as in the Australian electorate as a whole. Today, although there are some good right-wing and centre-right blogs, they are a distinct minority.

Anyway, thanks very much to Keks for taking the trouble to run this exercise. I know how much work goes into this kind of thing and I really appreciate it.

Categories: Metablogging Tags:

Innovation and the internet

January 27th, 2005 6 comments

My piece in today’s Fin is on innovation and the internet, developing some of the ideas I’ve discussed recently. It’s over the fold
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Categories: Intellectual 'property' Tags:

Patriotic pride

January 26th, 2005 2 comments

It’s not often I get to an international sporting event on Australia Day, but tonight’s NBL match between Brisbane Bullets and NZ Breakers qualifies at a stretch. Brisbane won by the satisfyingly crushing margin of 40 points. Aussie, Aussie, Aussie! Oi, Oi, Oi!

Categories: Life in General Tags:

Let’s hear it for holidays

January 26th, 2005 9 comments

Ross Gittins says

Those who whinge about lost production on public holidays are misguided

, and readers won’t be surprised to learn that I agree. Here’s a piece I wrote before Christmas. It was planned as a leisurely holiday piece for the Fin, but the tsunami disaster gave us something more urgent to think about.

In many ways, the Christmas holidays represents the Australian economic problem in microcosm. On the one hand, we expect and look forward to a break from work. Even if we don’t take a holiday, Australians have traditionally taken it for granted that not too much will get done in December and January.

On the other hand, we spend a lot on Christmas presents and they seem to get more lavish every year. If we want to spend more, we need to work more to pay for it.

In the short run, we can bridge the gap with the trusty credit card, but that just means a lot more work to pay it off, some time in the future. It seems as if the only solution is to stop taking those long Christmas breaks and go back to work straight after New Year.
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Categories: Regular Features Tags:

Lessig on the limits of copyright (Crossposted at CT)

January 26th, 2005 6 comments

This is my second report on last week’s Creative Commons conference. Lessig’s closing lecture was given in the Banco court of the Queensland Supreme Court (very plush – those lawyers don’t stint themselves) and was focused on traditional copyright issues . For Brisbane readers, an interesting tidbit titbit was that we haven’t seen OUTFOXED: Rupert Murdoch’s War on Journalism because neither the Courier-Mail nor the Australian (both Murdoch-owned) would carry more than minimal ads for it. One of the costs of being in a one-newspaper town.

The main point of the lecture was a historical survey of the relentless extension of copyright, along with some discussions of a failed attempt to stop this in the case of Eldred vs Ashcroft. This case is notable for the fact that, as has happened before, the economics profession almost unanimously supported the losing side. As Lessig argued copyright has been extended in length, scope and force to the extent that nowadays virtually everything is copyright, virtually forever.

Given that the defenders of unlimited copyright are interested mainly in protecting the merchandise markets for Mickey Mouse and Winnie the Pooh, it’s often struck me that the sensible political resolution would be to concede defeat on this point, and seek to liberalise copyright for the 99 per cent of literary and artistic output that doesn’t have such huge monopoly value. One step in this direction, which Lessig discussed in his talk, is the case of Kahle v. Ashcroft which challenges changes to U.S. copyright law that have created a large class of “orphan works.” Orphan works are books, films, music, and other creative works which are out of print and no longer commercially available, but which are still regulated by copyright.

As I’ve said previously, in the end, I don’t think either law or technology will be decisive here. Rather it’s that the value of being freely connected to a huge network will exceed any benefits that can be obtained by gating off a particular part of the network and demanding payment for access. After all, the reason we have an open Internet is that it drove proprietary networks out of business or else absorbed them. Attempts to create “walled gardens” within the Internet haven’t been abandoned entirely, but they haven’t prospered either.

In this context, the most exciting feature of the conference was the launch of the Australian version of the Creative Commons licence. Widespread voluntary adoption of this kind of license will render measures like the extension of copyright irrelevant. In this context, the version of the license I particularly like the “Share Alike” version, which resembles the GNU public licence in requiring derivative users to adopt a similarly open licence. The greater the volume of material with this kind of licence that is out there, the greater the incentive to make use of it, even at the cost of forgoing commercial copyrights. Since most commercial culture depends ultimately on unpaid appropriation of older material, the effects will be cumulative (or, in today’s popular jargon, ‘viral’)[1].

As I mentioned, I was struck by the quality of Lessig’s presentation. He’s a great speaker and I was so struck by the elegance of his minimalist Powerpoint presentations that I got him to send them to me . He mostly uses a white typewriter font on black background with just one or a few words per slide. In the spirit of remix, I plan to see how much of this look and feel I can appropriate for my own work[2].

update By coincidence, just after I finished this the latest London Review of Books arrived, complete with a lengthy article on the monopolistic practices of the London booksellers in the 18th century, a point also addressed by Lessig. Unfortunately, the article itself is subscriber-only

fn1. This reminds me that my CC licence got lost in the shift from Movable Type. Another job to be done.

fn2. I’ve just decided to make the shift from Powerpoint to Keynote and Lessig mentioned he was doing the same. I’ll be trawling the web for examples.

Categories: Regular Features Tags:

Sponsored link

January 25th, 2005 6 comments

I’m posting this link supporting Nicholas Gruen of Peach who cosponsored the tsunami appeal.


Categories: Regular Features Tags:

Monday Message Board

January 24th, 2005 41 comments

It’s time for the regular Monday message board, where you are invited to post your thoughts on any topic. Civilised discussion and no coarse language, please. I probably won’t have anything more to say about the Labor leadership, but I’d be interested in the thoughts of others.

Categories: Regular Features Tags:

The centrality of coffee

January 24th, 2005 11 comments

Tony Judt illustrating the centrality of coffee as a metaphor (or maybe synecdoche) for civilisation. (thanks to Glenn Condell for the link)

Categories: Regular Features Tags:

Follow-up on the tsunami appeal

January 23rd, 2005 2 comments

I’ve now received confirmation from everyone who pledged money to the tsunami appeal with a total of $2455. As I mentioned, the generosity of the cosponsors meant that the appeal raised more than twice as much as I had planned to give myself, while using only half of the money I’d allocated. I gave the rest to the UNICEF Darfur appeal.I plan another appeal on similar lines when I think the time is appropriate.

In the meantime, if you’d like to help a needy (and excellent) blogger, Gary Farber would be a worthy recipient. The topic of prioritising aid is bound to come up, so I’ll address it briefly. Most of us, even the relatively generous, give so little of our incomes in charity that the real alternative is an item of personal consumption rather than an alternative charitable object. The same is true for national governments.

My sincere thanks again to everyone who helped with this and especially to those who dug deep into their pockets.

Categories: Books and culture, Environment Tags:

Lessig on text and image

January 22nd, 2005 9 comments

As I mentioned, earlier this week, I attended a Creative Commons conference at QUT in Brisbane, including the launch of the Creative Commons licence for Australia. The main speaker was Larry Lessig, who gave two papers and joined a panel discussion as well. Lessig is a great speaker with really effective presentations, a point on which I hope to post more later. There was a lot of food for thought, and I’ll start with the opening presentations

In this talk, the central idea was remix, taking bits and pieces from the existing culture and recombining them to produce something new. My summary of the core argument

  1. text is the past, video and audio are the future
  2. the set of rights surrounding text has always allowed for a lot of remix, including direct copying for fair use, parody and so on
  3. because of digital rights management technology and strong IP, the current trend is to suppress remix for video and audio, thereby depriving our culture of one of its historic sources of validity

Read more…

Categories: Books and culture Tags:

Copenhagen review

January 21st, 2005 24 comments

Today’s Fin ReView section (subscription only) runs my review of Bjorn Lomborg’s new book. Regular readers won’t be surprised to find a lot of criticisms of the Copenhagen Consensus project that produced the book. But I found a fair bit to praise as well. The review, pretty lengthy, is over the fold. Comments appreciated.
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Categories: Books and culture, Environment Tags:

Weekend reflections

January 21st, 2005 Comments off

This regular feature is back. The idea is that, over the weekend, you should post your thoughts in a more leisurely fashion than in ordinary comments or the Monday Message Board.

Please post your thoughts on any topic, at whatever length seems appropriate to you. Civilised discussion and no coarse language, please.

Categories: Regular Features Tags:

Meanwhile, just across the border (crossposted at CT)

January 21st, 2005 10 comments

Iranians are stocking up on candy and flowers with which to bestrew invading US troops, according to Thomas Friedman who says “many young people apparently hunger for Mr. Bush to remove their despotic leaders, the way he did in Iraq.”. His evidence for this proposition is the following

n Oxford student who had just returned from research in Iran told me that young Iranians were “loving anything their government hates,” such as Mr. Bush, “and hating anything their government loves.” Tehran is festooned in “Down With America” graffiti, the student said, but when he tried to take pictures of it, the Iranian students he was with urged him not to. They said it was just put there by their government and was not how most Iranians felt.

Iran, he said, is the ultimate “red state.”

Oddly enough, when I last visited America, I met plenty of people who “love anything their government hates,” and assured me that the kind of thing I saw on Fox was not really the way most Americans felt. They didn’t feel able to confess to me that they were longing for the arrival of a Franco-German liberation army, but no doubt if I’d had the benefit of an Oxford education, I would have been able to detect their eagerness for an invasion, civil war and so on.

Categories: Metablogging Tags:

Weekend reflections

January 21st, 2005 10 comments

This regular feature is back. The idea is that, over the weekend, you should post your thoughts in a more leisurely fashion than in ordinary comments or the Monday Message Board.

Please post your thoughts on any topic, at whatever length seems appropriate to you. Civilised discussion and no coarse language, please.

Categories: Regular Features Tags:

New layout

January 20th, 2005 37 comments

Reader Nick Caldwell kindly took the trouble to supply me with an alternative layout for the blog, which I’m now testing. Unfortunately, I haven’t got the header working yet, but hopefully I can fix that soon. In the meantime, I’ll ask for comments from readers on any of
(i) The changes to the layout of the main post section
(ii) Readability problems created or resolved
(iii) Links column on left rather than right
(iv) Anything else

Update Thanks to all who’ve commented, favourably and otherwise. Some further points

1. I plead guilty to asking for more red in Nick’s original design, resulting in the terrible puce/mushroom you see now. My color intuition is woeful, I’m afraid. If anyone can suggest a better colour scheme that I can easily implement, please do so. In the meantime, I plan to go back to Nick’s original.

2. I’ve now managed to get the links to the header working, and Nick has supplied more CSS which implements Textile footnotes properly. Great!

3. I’m still not happy with the sidebar, but I definitely like the changes in the main body.

Categories: Metablogging Tags:

Iraq: just about time to go

January 20th, 2005 22 comments

The latest terrorist bombings in Iraq came closer than usual to home for Australia, with two soldiers suffering (reportedly) minor injuries in an attack on the Australian embassy[1], while 20 more innocent Iraqis were killed, adding to the tens of thousands already killed by both/all sides in this terrible war.

It’s pretty clear by now that Iraq has descended into something approaching full-scale civil war and that, as is usually the case in civil wars, the presence of foreign troops is only making things worse. But rather than arguing about this, it might be better to put it to the test. This NYT Op-ed piece by three researchers from the Center for Strategic and International Studies suggests a referendum on US withdrawal to be held soon after the forthcoming elections. They make a pretty good case that it would be hard for the insurgents to justify disrupting such a referendum, or for nationalists like Sadr to justify a boycott.

I expect such a referendum would lead to a majority vote for withdrawal. But a majority the other way would certainly be an improvement on the current situation. The only really bad outcome would be the case where the Kurds voted solidly for keeping US troops, reversing a majority vote the other way among Arab Iraqis.

fn1. Despite this event, Australia has suffered far less direct loss in Iraq than many nations who were far less deeply involved in the decision to go to war.

Categories: World Events Tags:

Creative Commons

January 19th, 2005 8 comments

I’ve spent most of the last couple of days at the QUT Creative Commons Conference, with Larry Lessig as the main speaker and featuring the launch of the Australian version of the Creative Commons license. I’ve got enough out of this for weeks of blogging. For the moment though I’ll just mention that there were some very interesting sessions on intellectual property rights in massively multiplayer games like Everquest. This got me thinking that, purely for research purposes, I should give one of these games a try. Fortunately, sanity returned in time. If I need another addiction to combine with blogging, I’ll go for something safe and sensible, like crack cocaine.

Categories: Economics - General Tags:

The significance of the A380

January 19th, 2005 25 comments

The unveiling of the Airbus A380 raises a couple of thoughts (not entirely new ones, and pointing in somewhat different directions). First, this is another example of the US loss of dominance in manufacturing. Boeing has ceded the jumbo jet market it created with the 747 to Airbus, betting everything on the proposition that airlines will want medium size planes like its forthcoming 7E7. Even if this turns out to be true (and limp early orders don’t support the idea) Airbus has an entrant in this market as well (the A350). Meanwhile, by abandoning the 717 (the old DC 9 inherited in the merger with MacDonnell Douglas), Boeing has abandoned the small jet market, the winner here being the Brazilian fimr Embraer. All of this parallels Detroit’s loss of dominance in the car market. And all this despite the big decline in the dollar-euro exchange rate. This suggests that winding down the US trade deficit is going to be a painful process.

The second point is the slowdown in progress in transport. In the 25 years from the end World War II to 1970, passenger air travel went from essentially nothing to the 747 jumbo jet launched by Boeing in 1967. Move ahead another 35 years, and we still rely on the jumbo jet. With the A380, we are looking at what will probably be the state of the art for the next few decades, and it’s … a jumbo jet, only 50 per cent bigger. Of course, there have been improvements in every part of the plane, from composite materials to more efficient engines, but it’s still, in essence, a bigger 747. The same is true, in spades, for cars. For all practical purposes, it looks as though we reached our collective speed limit 40 years ago[1].

So, maybe it doesn’t matter that the US is losing the markets for cars and planes. With firms like Intel and Microsoft it dominates the moneymaking end of the most innovative part of the economy, and with Apple, it provides most of the creativity. On the other hand, you need a lot of iMacs to buy an A380.

fn1. In fact, we’ve slowed down in the interim, with the introduction, commercial failure and ultimate withdrawal of the Concorde.

Categories: Economics - General Tags:

Latham and after

January 19th, 2005 38 comments

I don’t think the Australian media has much to be proud of in the way it’s treated Mark Latham, over his entire period as Labor leader and particularly over the past few weeks. When he was new and exciting, he got fairly uncritical reporting and was built up further. Then, inevitably, he was torn down and, after the election loss, subjected to quite unfair criticism. This is the nature of the way media treats celebrities, including rapidly-rising politicians, and there’s probably nothing much that can be down about it, but it’s still depressing. And, of course, the Labor Party itself didn’t behave too well. Latham made some significant tactical mistakes, particularly regarding the way the Tasmanian forests issues were handled, and he had same bad luck, but he still performed better as leader, in my view than anyone Labor has had since 1996, and arguably since 1993.

Meanwhile, the view that Kim Beazley must lead again is being presented as irresistible by all the papers. One striking thing is that a lot of them refer to opinion polls showing that Beazley is the popular choice, but none of the polls I’ve seen (survey-based or write in) give him more than 35 per cent support. Both the Age and SMH have Internet polls running, and in both cases the combined vote for Rudd and Gillard exceeds that for Beazley. Given that most voters have already made up their minds about Beazley, this is not very promising.

Still, it looks as if we’re going to get him back again, and I’ll just have to hope he outperforms my expectations.

fn1. Keating did a great job demolishing Hewson, but let this narrow victory go to his head, and his second term was a disaster for Labor.

Categories: Oz Politics Tags:

Boymal and Davidson on copyright

January 18th, 2005 1 comment

Although I don’t shy away from it, I’m not a fan of conflict for its own sake. So when I’ve been critical of work written by someone, it’s nice to find something by the same person with which I can agree wholeheartedly. In the course of some work on the FTA, I found a nice piece on copyright by Jonathan Boymal and Sinclair Davidson[1] in Agenda (vol 10, no 2, 2003). Agenda itself protects its copyright, so I’ll give a summary and extract rather than a link

Boymal and Davidson do a good critique of arguments for longer copyright, focusing on the fact that any benefits more than 50 years beyond the death of today’s authors will be discounted to (virtually) zero using private risk-adjusted discount rates. By contrast, the costs of copyright extension start immediately, and are subject to lower social discount rates.

Another issue relates to ways in which copyrighted characters may be appropriated by other writers, and some very interesting points are raised. (mildly non-PG content over page).

fn1. Davidson and I have crossed swords on tax quite a few times.
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Categories: Life in General Tags: