What I’m reading. When the Boat Comes In by Boris Frankel. It’s a successor to his 1992 book From Prophets the Deserts Come (great title! – and a special mention for the first reader to email me with the source of this literary allusion). It’s not only an analysis of Australia’s economic and social position, but a policy program. I come in for a mixture of bouquets and brickbats, and I’m writing a review essay for Arena, which will probably be out in a couple of months.

As the Washington Post observes, Culprits Are Countless in the recent accounting scandals. But the real culprit, mentioned towards the end of the article is the efficient markets hypothesis. More on this soon!

A further round from Don Arthur on Higher education – Is it a scam?. Don makes a lot of good points, though I disagree with him on an important one. University education does produce human capital, as I argue here. Of course this term needs to be understand in a broad sense, rather than a narrowly utilitarian one, and includes things like ‘cultural capital’, which Don mentions as including an ability to understand and make appropriate cultural allusions e.g. in Glebe to Julia Kristeva and Salman Rushdie.

A very thoughtful piece on the WorldCom collapse by Polly Toynbee. As she says, the US formula of the 90s is now clearly “Yesterday’s model”. The open question is, what will replace it.

While writing my posting about TNR, I wondered who would be the first to argue that, since John Malkovich is a well-known actor, it would be stupid to to take seriously a death threat from him. The prize goes to Jason Soon who writes:

“Does the fact that John Malkovich looks like this make his threat to shoot Fisk anymore credible? Obviously a face like that guarantees Mr Malkovich lots of psycho roles but he’s an actor and no one would seriously regard his little burst of gung-ho bullshit as a serious death threat.” (emphasis added).

Do the initials OJS mean anything to you, Jason?

More seriously, I don’t regard death threats of any kind as an appropriate subject for ‘put-downs’ and point-scoring at the expense of the recipient, particularly with respect to an issue where lots of people on both sides have in fact been murdered.

A depressing post here. The New Republic Online comes about as close as you can to endorsing the use of death threats to silence anti-Israel commentators, in particular, one made by actor John Malkovich against Robert Fisk. There is one weaselly phrase –however reprehensible–, but the anonymous editorialist’s real feeling is in the summing up.

(S)he quotes Fisk
‘ “As journalists, our lives are now forfeit to the internet haters,” Fisk wrote. “If we want a quiet life, we will just have to toe the line, stop criticising Israel or America. Or just stop writing altogether.” ‘
Then observes
‘Hey, now there’s an idea. ‘

It’s easy to find similar, and, for that matter, far worse, on the other side of the wire. (For example, look at all the equivocal or even supportive responses to the fatwa on Salman Rushdie). But it’s sad to find it somewhere like TNR. The TNR article pretty much proves Fisk’s point. He writes: ‘Slowly but surely, the hate has turned to incitement, the incitement into death threats, the walls of propriety and legality gradually pulled down‘.

As Tim Blair observes, stock markets have barely moved in the wake of the great Worldcom fraud.
On the other hand,
(a) Most US indexes are already lower than they have been for years
(b) Telecom stocks took a pounding (Worldcom was suspended after falling to 20 cents)

Two possible takes on this
(1) These problems are isolated to the telecom sector (and a few others like energy trading, conglomerates, dotcoms etc). Apart from that the economy is looking good.
(2) This isn’t news. Everyone knows corporate accounts aren’t worth the bits it takes to display them on screen.

You choose!

Jason Soon responds to my post on the failure of radical free-market reform by restating the case for a competitive model in higher education. This is a complex issue, and my counterarguments are too lengthy for a blog post. You can find them in detail in my submission to a recent Senate inquiry. It’s also available as a PDF file
For now, I’ll just observe that, outside fairly narrow forms of vocational training (as exemplified by the Australian commercial VET sector and the ‘University’ of Phoenix in the US), for-profit education has never been a success.

The exposure of massive accounting fraud at WorldCom may not signal the final crisis of capitalism or, as Margo Kingston suggests, the decline and fall of the American empire?
But it surely does signal the end of the kind of American capitalism (what Edward Luttwak called Turbocapitalism) that was presented to the world in the 1990s as the only path forward. The crucial ideas, including shareholder value, incentive-based management and the claim that stocks are always and everywhere the best investment now look every bit as discredited as the Japanese model that was touted in the 1990s.
Update 1:14
The NYT agrees with my take, saying U.S. Businesses Dim as Models for Foreigners

Jason Soon has a link to a National Review piece comparing soccer to socialism. This gives me the opportunity to reprise one of my own all-time favorites, a comparison of Super League to New Zealand