I missed this interesting sidelight to the Nobel prizes, but my wife pointed it out to me.
Vernon Smith is putting his share of the prizemoney back into research

As if to prove his point [that people are innately co-operative], Mr Smith, in a crass display of economic irrationality, has announced he would not keep his share of the $US1.07 million prize money.
Irrational, but perhaps not totally unselfish: the money is to go into research, which as Mr Smith mischievously remarked, is a way of giving it back to himself.

The NYT report on Bali includes the information that:

The Laskar Jihad, the most prominent face of militant Islam in Indonesia, said it had disbanded and would withdraw its militia forces from the Moluccas islands where they have fought in a vicious conflict with indigenous Christians.

Further detail is given later in the article:

The leader of Indonesia’s high profile militant group Laskar Jihad said his organization had disbanded.
Jafar Umar Thalib denied the move was linked to the Bali bombings. He said the group made the decision to close and bring home its fighters from the Moluccas islands on October 7, days before the Bali explosions.

Nevertheless, Laskar Jihad is struggling. Thalib is currently on trial for inciting violence, and there are reports his group, which analysts say is sponsored by segments of the armed forces, is now running short of cash.

If correct, this report is good news on a number of fronts. Laskar Jihad was the other obvious suspect after Jemaah Islamiyah. Even if this group wasn’t responsible for Bali it has committed hundreds, if not thousands, of murders in Ambon and elsewhere. And, given all the criticism of the Indonesian government, much of it justified, the fact that they’ve apparently been able to beat a group with notoriously powerful military sponsors (or perhaps to scare those sponsors into pulling out) is an encouraging sign.

It’s been hard to think about much other than the horror of the bombings for the last few days. But, as citizens of other countries under similar attack have learned, we can’t let the terrorists dominate our lives, even if there are inevitable changes. For the foreseeable future, we’re going to have to live our normal lives while maintaining a heightened state of alert, whatever that turns out to mean in practice.
Some good news today is that the Indonesian police have detained two suspects in Bali and that Howard has named Jemaah Islamiyah as the perpetrators. Hopefully the Bali arrests will lead to convictions and there will be enough evidence to tie Jemaah Islamiyah to the bombings or Al Qaeda or both.

CSL, the company accused of a secret plan to sell blood products overseas was privatised by the Labor government in the early 1990s. The sale looked profitable on the surface but was sweetened by an incredibly lucrative contract for the processing of blood donated by Australians to the Red Cross. This cash cow has been used to finance a range of biotech ventures that, until recently, were pushing CSL’s share price up to the stratosphere.

The deal has given rise to a string of subsequent scandals, not surprisingly when you read something like this:

The proposal to sell products made from donated blood to foreign bidders was revealed in a candid address to an international conference by the head of CSL, Dr Brian McNamee, in which he said: “The reality is the Red Cross is a franchise and is a retailer.”

As Clive Hamilton and I showed in a paper available here, this was one of the worst privatisations ever undertaken by an Australian government. In view of the latest scandal, it’s a prime candidate for renationalisation.

I’ve said most of what I have to say in immediate response to the terrorist murders in Bali. I haven’t linked to any of the other responses because I wanted to focus on clarifying my own thoughts rather than getting involved in the disputes that can easily arise at a time like this. Most of the Oz blogs linked on the left have something to say, and most of it is thoughtful and valuable.

I will respond to one point raised in the comments thread, and on her blog, by Asparagirl who quoted my observation that

“The same news bulletin that brought the first news of Bali also reported a car crash in New South Wales, with three teenagers dead and three more badly injured. Six kids died in another crash only a few weeks ago.”

and responded:

I don’t think I like your attempts at equivalency here. The latter examples are tragic accidents. The former, Bali, is mass murder. Both events may result in dead people whose families will grieve them, but that’s where the similarities stop..

I had thought about including a disclaimer about moral equivalence, but decided it was unnecessary, given that the point of the post was to say that we should take some time to think about grieving families before rushing on to the issue of how to respond.

To be absolutely clear before going on, there is no moral equivalence between a car crash (usually the result of negligence or recklessness) and a terrorist murder. I fully support our government in its determination to hunt down the killers in Bali and those who armed and financed them.

However, I think Asparagirl is wrong on the facts when she goes on to say:

There will always be tragic accidents; there need not be murderous acts of terrorism. It *can* be stopped

In important respects, fighting terrorism is very like fighting road deaths. With determination and sacrifice we can make progress, but final victory is at best a long-term aspiration.

On the other hand, the fight against the road toll should give us some hope. When we started to take this issue seriously, with the introduction of compulsory seat belt laws around 1970, the general view was that road ‘accidents’ were just part of life, and that nothing could really be done about them. In the following thirty years, we’ve cut road deaths in half and more, despite more people and more cars. We’ve saved thousand of lives, if not tens of thousands.

We’ve also learned to accept a lot of inconveniences in the process, such as random breath testing, and to distinguish between such inconveniences and threats to basic civil liberties. This is something that will be even more important in the fight against terrorism, where drawing this line is going to be more difficult.

For me, the most depressing feature of discussion of the Bali bombing (apart, of course, from the images of the event itself) has been the eagerness of partisans on both sides to score points on the Iraq issue. Opponents of war were ready to blame Howard even before there was any good information on the likely perpetrators of the crime. Meanwhile supporters of war had their counterattacks in print (or posted on weblogs) without even waiting for the other side to start.
For what it’s worth, I doubt that any policy an Australian government could plausibly have taken on Iraq would have made a lot of difference to the people carrying out this attack. For a start, I don’t imagine most of them care much about Saddam Hussein. And even a clear statement that we were staying out of it, like that made by Schroder in Germany, would be unlikely to change their view of Australia as part of the Western enemy.
If we want to look at what we could have done differently, and will need to do differently in future, I’d suggest looking at the attitudes towards both Islam and Indonesia that were displayed during the debate over refugees, well before S11. I don’t think this influenced the attitudes of the terrorists and their immediate supporters, but I’m sure it influenced the people we’ll now be relying on to catch them, and not favorably. The idea that we don’t have to worry about what the rest of the world thinks of us is looking pretty naive right now.
Coming back to Iraq, the comparison between the Bali bombing and S11 has crystallised many of the concerns I have had about the US Administration’s eagerness for war with Iraq. Although the attack on the Taliban and Al-Qaeda was only a partial success (with Mullah Omar getting away, and bin Laden unaccounted for) it was still a success. It’s natural to want to repeat the same thing, with an enemy army that can be bombed into submission, an evil leader who can be chased and hopefully caught or killed, and a hostile government that can be overturned.
But on any plausible assessment, a war with Iraq is likely to increase terrorism of the kind we have just experienced, not reduce it, and it will certainly chew up resources, including money, political capital and attention, that could be used against Al-Qaeda. That may be a necessary price for getting rid of Saddam’s weapons, but we should recognise it as a price, rather than imagining that the whole thing can be done without cost, or even, as some have suggested, at a profit. If we can achieve a peaceful settlement that would keep Saddam contained, it would be our interests to do so.
As previous experience, for example that of Europe in the 1970s, has shown, the struggle against terrorism is likely to be long, slow, expensive and frustrating. In most cases, for example, we’ll never conclusively identify the actual perpetrators of particular terrorist crimes, even if we can destroy the organisations to which they belonged. The appropriate strategy is one of unremitting effort to hunt down the actual terrorists, combined with a sustained attempt to chip away at their bases of support.

In thinking about how to respond to the Bali bombing, the biggest single danger is that of ‘fighting the last war’, that is, seeking to model our response on the (broadly correct) US response to S11. In that case, Al-Qaeda was operating, more or less openly, with the protection of the Taliban government in Afghanistan. Although there were plenty of disputes about the details, the basic policy of overthrowing the Taliban and destroying as much of Al-Qaeda as possible was agreed on by everybody outside the fringes of the left and far-right. And the maxim of ‘either with us or against us’ could be applied fairly straightforwardly, allowing most of the local warlords who’d accepted the Taliban to change sides, while offering no quarter to foreign Al-Qaeda operatives.
The situation in Indonesia is quite different. In fact, a closer parallel is that of the Oklahoma City bombing. While we don’t know precisely whether the bombing was the work of Al-Qaeda or of ‘domestic’ extremists, the situation of the terrorists is similar to that of Timothy McVeigh. McVeigh came out of the network of right-wing Christian militias, which in turn was (and is) embedded in a much larger group of people adhering to extreme fundamentalist Christian views and conspiratorial political theories. This group shades into the broader Christian right of people like Jerry Falwell, which in turn shades into mainstream American conservatism in which (moderate) Christianity is taken as the norm. Substitute ‘Islamic’ for ‘Christian’ and you have a pretty fair description of the situation in Indonesia. A simple ‘with us or against us’ approach is not likely to work here, any more than a decision by the US government to disarm the militias and arrest their members would have worked after Oklahoma City.
The problems are further complicated by the role of the various factions in the Indonesian army and police. Some have fomented religious discord, and particularly Islamic extremism from a variety of motives, while others have brutally suppressed Islamic opponents of past and present governments. Yet this is the group that is going to have to most of the work of chasing and catching the terrorists.
The basic problem is going to be one of ‘hearts and minds’. Unlike the Middle East, Indonesia already has a moderate, and basically pro-Western, Muslim majority, and a democratically elected, if imperfect and fragile, government. The problem is to keep their support while doing as much as possible to root out the extremists. This is not going to be achieved by the kind of military response some people seem to be contemplating.

I thought I’d give myself some time to think about the Bali bombing and its consequences before writing anything more than the brief note I posted yesterday. As of this morning not much has become clear except that the number of casualties is large and likely to get worse, that many of them are Australians, and that most of them are young.
As with nearly everybody else, my first thoughts are with the families of those who have been killed or injured, or are still missing. As far as I know, none of my family or friends is in Bali, but many have been at some time, and others were planning visits in the near future. I know from experience that words are not much use at times like this, but I’m very much saddened.
The same news bulletin that brought the first news of Bali also reported a car crash in New South Wales, with three teenagers dead and three more badly injured. Six kids died in another crash only a few weeks ago. And every day, many families experience private tragedies that don’t make the news. We should try to spare a thought for them as well.
It’s worth stopping to think about all this before being caught up again in the trivial events that inevitably dominate our days, and before we start rushing to judgement on the political or military implications of these dreadful crimes.

Between the horrific bombings in Bali and Finland, and the shootings in DC, not to mention all the places where this kind of thing never stops, the world is a pretty gloomy place at the moment, and Australia is obviously not immune. There’s no easy answer to any of this. As far as I can tell, the Helsinki bombing was the act of a lone psycho, the Bali bombing was presumably done by Islamic terrorists of some kind, and the DC shootings could be either, or both, or something else altogether. Effective gun control, a successful campaign against Al-Qaeda, a resolution of the Israel-Palestine dispute might have prevented some of these acts. But these are some of the toughest things I can think of to do, and even if they were all successful there would still be plenty of other sources of terror in the world.
Given that we have been living with this kind of thing, in one form or another, for a long time, and will have to do so for the foreseeable future, we should be careful about being panicked into doing anything stupid as an ’emergency measure’.

The Tax Pack. Yes, it’s that time of year again. Tax time for a social democrat is like election time for a democrat or jury duty for a citizen. You know it’s vitally necessary, and you’re glad to do your bit, but that doesn’t make it any more enjoyable.