A ‘no first use’ U.S. nuclear policy could save the world

My latest piece in Independent Australia

THE RISKS of nuclear war are greater than at any time since the Cuban Missile Crisis. Not only is Vladimir Putin threatening to use nuclear weapons to stave off defeat in Ukraine, but the North Korean Government has continued to develop and test both missiles and nuclear warheads.

U.S. President Joe Biden has responded to Putin’s threats with admirable calm so far, playing down the risk that Putin will use nuclear weapons and avoiding any threat of escalation.

Leaks from the U.S. Administration have indicated that the response to a tactical nuclear weapon would be massive but confined to conventional weapons. 

Yet the official doctrine of the U.S. would call for the use of nuclear weapons in exactly the situation faced by Putin today: a conventional war going badly.

With Russia and the U.S. currently on the warpath during the escalating conflict in Ukraine, the world is again at serious risk of nuclear disaster.

Unlike Russia and China, the U.S. military maintains the right to a “flexible response” in which nuclear weapons may be used against an adversary who hasn’t used nuclear weapons and doesn’t pose an existential threat to the U.S. itself [1]

If Putin is threatened with massive retaliation for breaking a supposed taboo on nuclear weapons, the U.S. should commit itself to “no first use” of nuclear weapons. But why hasn’t this happened already?

Throughout the Cold War, U.S. military planning was based on the assumption that the Soviet Union would have a massive advantage in conventional weaponry, most notably because of its tens of thousands of tanks and other armoured vehicles, not to mention millions of artillery shells.

In the scenario favoured by Pentagon planners, these forces would pour the Fulda Gap, on the border between East and West Germany, rapidly overwhelming North Atlantic Treaty Organization (NATO) forces. 

Only the use of “tactical” nuclear weapons would even the balance. The term “tactical” might sound moderately comforting, but some of these weapons would have many times the explosive power of the bombs that destroyed Hiroshima and Nagasaki. They would obliterate the advancing forces.

The end of the Cold War shifted the frontier hundreds of kilometres to the east, but the planners found another “gap” to worry about near Suwałki in Poland. And, as Putin rebuilt the crumbling armed forces he had inherited, it seemed that he still had at least 3,000 modern tanks, with another 10,000 in reserve.

But the failed invasion of Ukraine has shown Putin’s army to be a paper tiger. More than half of Russia’s front-line tanks have already been destroyed or captured by Ukraine. Indeed, Russia has been the biggest single supplier of tanks and armoured vehicles to the Ukrainian armed forces.

Meanwhile, the vast reserves turned out to be largely illusory. Thousands of tanks had been left to rust in the open air or pillaged for parts to be sold on the black market. By June, Russia was reduced to deploying ancient T-62 tanks, first produced in the 1960s and then updated in the 1980s. These have already been destroyed in large numbers.

After failing to conquer its near neighbour, there is no prospect that Russia could launch a successful conventional attack on NATO. There is, therefore, no need for tactical nuclear weapons. The same is true of a hypothetical invasion of Taiwan by China.

By adopting a “no first use” policy, the U.S. could greatly reduce the risk of an accidental nuclear war or an unintended process of escalation. Such a policy would certainly face resistance from the U.S. military, which never saw a weapons system it didn’t find essential — as it would from the Republican party.

The U.S. is one of a handful of countries that don’t ban the use of landmines. The Trump Administration revoked restrictions on the use of landmines and sought to develop new ones.

Still, there is hope. Richard Nixon, of all people, committed the U.S. to ban chemical weapons and stocks were finally destroyed under George W Bush.

And the Biden Administration has moved towards a ban on landmines. A “no first use” commitment once made, would be difficult to roll back, even for a future Trump Administration.

fn1. Putin has used annexation as a way of claiming that resisting Russia’s aggression represents an existential threat

Capitalism without capital doesn’t work

The future of the information (non) economy

For quite a while now, I’ve been making the argument that, in an information economy, the relationship between investment, production and profit, central to capitalism, no longer works. Here’s an early statement from my Giblin lecture in 2005.

to the extent that innovation and productive growth arise from
activities that are pursued primarily on the basis non-economic motives, the link
between incentives and outcomes is weakened. This in turn undermines the
reationale for policies aimed at sharpening incentives and ensuring that everyone
engaged in the production of goods and services is exposed to the incentives15
generated by a competitive market. Such policies represent the core program of
‘economic rationalism’, the set of ideas that dominated Australian public policy in
the 1980s and 1990s.

I recently reviewed two books by Jonathan Haskel and Stian Westlake. Their 2017 book, Capitalism without Capital presented a relatively optimistic view of a market economy in which “intangible capital” plays a central role. But their followup Restarting the Future: How to Fix the Intangible Economy, is much bleaker

“When we think about the state of the economy today, it is hard not to think, it wasn’t supposed to be like this,”

My assessment was that

The real intangible here is likely to be monopoly power, generated either by intellectual property laws or control over platforms.

My conclusion

Haskel and Westlake discuss traditional spheres of government activity — the defence-related R&D that gave us the internet, for example — but they don’t consider whether governments should become active investors in intangible capital.

The possibilities are full of promise, but also potential pitfalls. Governments could expand the informational role of public media services like the ABC, reversing the cuts of recent decades. They could systematically strive to make information of all kinds available in an easily searchable form, bypassing advertising-driven search engines like Google. And they could provide platforms for social media on a common-carrier basis, requiring easy interconnection and discouraging the use of “algorithms” (a misnomer) to keep people inside a “walled garden.”

It’s easy to point to the problems that would arise if these possibilities were pursued in a world where trust in governments is low. But these are the kinds of arguments that need to be made when the existing economic model is failing so clearly.

Despite the limited scope of the reforms they consider, Haskel and Westlake’s work tackles fundamental questions considered by few other writers. Restarting the Future is essential reading for anyone interested in the future of capitalism, or in the possibility of a post-capitalist future. •

Monday Message Board

Another Message Board

Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

I’ve moved my irregular email news from Mailchimp to Substack. You can read it here. You can also follow me on Twitter @JohnQuiggin

I’m also trying out Substack as a blogging platform. For the moment, I’ll post both at this blog and on Substack.


A new sandpit for long side discussions, conspiracy theories, idees fixes and so on.

To be clear, the sandpit is for regular commenters to pursue points that distract from regular discussion, including conspiracy-theoretic takes on the issues at hand. It’s not meant as a forum for visiting conspiracy theorists, or trolls posing as such.

Monday Message Board

Another Message Board

Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

I’ve moved my irregular email news from Mailchimp to Substack. You can read it here. You can also follow me on Twitter @JohnQuiggin

I’m also trying out Substack as a blogging platform. For the moment, I’ll post both at this blog and on Substack.

There’s been a lot of excitement about Artificial Intelligence (AI) lately, much of focused on long-standing “big questions” like “is AI really intelligent” (short answer, no)

I don’t have an answer to that, so I’ll stick to the easier questions like “will a robot take my job”. I’ve argued before that this isn’t a good way to think about the issue. New technology has been changing the way we work for centuries, and will continue to do so. But for particular jobs being transformed by technological change, it is certainly relevant.

One area that’s moved ahead very rapidly is the generation of human-like text. The cutting edge here is a program called GPT-3, launched in 2020, which can produce impressive looking philosophical discussions. The underlying research has already been commercialised with products like Jasper, which has the much more prosaic (literally!) goal of producing advertising copy, blog posts and so on.

Jasper clearly won’t pass a Turing test if you ask for anything complex, but it is very good for its intended purpose: turning out text that looks as if a human wrote it. This has big implications for a large category of jobs, notably including many that the late David Graeber called “bullsh*t jobs”.

As an example, a fair bit of the content of a typical newspaper consists of press releases that have been lightly edited and perhaps spiced up a bit. With Jasper, the time taken for this task goes from an hour or so to a few minutes. For that matter, the press release itself can be generated from a few prompts in a similarly short time.

As with previous tech advances, that’s not likely to create mass unemployment any time soon. But it will mean that this kind of routine copywriting will be done much faster, by writers who have the skills to give programs like Jasper the right prompts, and then to touch up the final output. And this will extend to lots of admin jobs that have previously been immune from technical change.

Lots of middle management jobs, for example, involve writing memos and reports justifying one corporate decision or another. After you read a few, they all seem the same. AI can distil the essence well enough to mimic the style. After that, it’s just a matter of fitting the verbiage around the desired conclusion.

Over the fold, a few examples.

Here’s an output sample I produced in a couple of minutes, using a couple of prompts such as “create change” (UQ’s current marketing slogan) and Shanghai rankings

If you’re looking for a top-quality university that will help you create change in the world, look no further than the University of Queensland. UQ has a proud history of producing leaders and changemakers, and its graduates are highly sought-after by employers all over the world. UQ is consistently ranked as one of the world’s top universities. In the 2019 Shanghai Ranking, UQ was ranked 28th in the world and first in Australia for overall university performance. The Shanghai Ranking is one of the most respected university rankings in the world.

A longer version is here.

Most of the info has been scraped from websites, including UQ’s own. But Jasper provides a plagiarism checker to assure that it isn’t simply a cut-and-past job. The 28th figure looks a bit suspicious to me, but I assume someone at UQ has found a definition of “overall university performance” that fits the bill.

So, if I were told I had a morning to produce a puff piece for every university in Australia, I’d say I could do it with Jasper, and still have time for an early lunch.

And here’s what I got when I asked Jasper to argue that trail running is better than triathlon, using some first-person testimony. I’m almost convinced.

Finally, for those worried about contract cheating, here’s Jasper pitching its essay writing services, then denouncing itself as a threat to education.

Stage 3 tax cuts: The fight is on

That’s the headline for my latest piece in Independent Australia . The next couple of weeks, leading up to Labor’s first budget, will determine the fate of this government, one way or another.

If the tax cuts go through unchanged, the government will be a failure as far as economic and social policy is concerned. Some have suggested that the problems could be fixed in a second term. But having handed out big tax cuts for 2024-25, it’s absurd to suggest that Labor could turn around immediately and campaign on cancelling them. And, there’s no guarantee of a second term. While the LNP is looking pretty hopeless at the moment, an economic downturn would change things. Locking in the cuts would leave Labor with little or no capacity to respond to such a downturn.

Modifying the tax cuts, to keep only the elements that benefit middle income earners would have the political costs associated with a broken promise, but would reduce the costs of the cuts by around $12 billion a year. This would give the government sufficient room to respond to economic crises and address urgent needs.

Among those wishing to keep the cuts for higher incomes, the two main arguments are

(a) a promise is a promise

(b) people earning $150000 or $200000 a year aren’t “rich”

On the first point, while it would have been better not to make the promise to implement the cuts, it’s rarely possible for a government to keep all its promises. Labor’s promise to deliver higher wages has already been downgraded to a hope that real wages *might* increase over the next three years.

As regards “rich”, it’s a meaningless term which roughly means “makes much more money than me”. The fact is that only about 3 per cent of income-earners have a taxable income of $200 000 a year. This well-off group have less need for tax relief than the rest of the population

We need to keep the pressure up, in every way possible, until Budget Day

A day late, and $20 million short

I wrote a piece for the Guardian, urging the Queensland government to hold the line on its plan to close a tax loophole for wealthy investors, in the face of a ferocious Murdoch media campaign, and sabotage from the Perrottet government in NSW. Sadly, just as I submitted it, the government caved in. But the critique of the Courier-Mail might get a run on Media Watch. Anyway, here it is

The Queensland government’s announcement that it is closing a loophole in the land tax system, benefiting interstate investors has produced a furious reaction from the Murdoch-owned Brisbane paper Courier-Mail. More than a dozen editorials and articles have quoted ‘experts’ who warn that the proposal will be unworkable, unconstitutional and will raise rents. These articles have been backed up by editorials and by a parallel campaign in the Courier-Mail’s Sydney counterpart, the Daily Telegraph.

Oddly enough, hardly of these “experts” is a tax economist or, indeed, any kind of economist. The Courier-Mail has managed to locate one economist willing to support its claims: Shane Oliver of AMP. But the vast majority of its sources are representatives of the property lobby.

Economists are famous for disagreeing among themselves, so it might seem surprising that hardly any have come forward to criticise the Queensland government. In reality, however, one of the few propositions on which nearly all economists, of all persuasions, agree, is that governments should raise more revenue from taxing land.

The economic reasoning is simple. Taxes change incentives. In particular, taxes on capital, while desirable as far as equity is concerned, tend to reduce investment in new capital goods. But as a saying variously attributed to Will Rogers and Mark Twain puts the case for buying land “they aren’t making any more of it”. Whether land is taxed heavily, lightly or not at all, the amount of it won’t change. And changes in the value of land aren’t driven by investment, but by the general development of a given area.

The standard analysis of land tax is based on the assumption that all privately owned land is taxed at a common rate. In fact, there are a range of exemptions, reflecting the political difficulty of taxing land. Owner-occupiers are exempt from land tax. Landowners in general are taxed on a sliding scale, with the first $600 000 of land exempt.

This is where the loophole comes in. Each state levies its own land tax independently, with its own threshold and sliding scale. So, large landowners with holdings in more than one state can gain the benefit of the threshold separately in each state. It is rather as if people who derived income in more than one state could split their income and take advantage of the tax-free threshold several times over. The effect of closing this loophole will be to reduce the incentive for interstate investors to buy land, thereby making it a little cheaper for local buyers, both owner-occupiers and investors.

Apart from interstate investors, the big losers from closing this loophole will be real estate agents who rely on their business and benefit from inflated land prices. But neither of these groups is likely to attract much political sympathy. So, to oppose the tax, it’s necessary to claim that it will lead to an increase in rents.

The simplest, not to say most simplistic version of the claim is that land tax is a cost that will be ‘passed on’ to tenants. As any competent economist will tell you, rents, like other prices, are determined by supply and demand. A land tax changes the ownership of land and houses, but has no effect on supply. So, there’s no reason for changes in land tax to affect market rents.

A more elaborate version of the claim is that closing the tax loophole will lead interstate investors to sell, and that the buyers will be owner-occupiers. The Property Investors Professional Association claims that, as a result, Queensland 162, 239 fewer rental properties – or a reduction in supply of nearly 30 per cent. https://www.realestate.com.au/news/interstate-investors-snub-qld-market-set-for-major-sell-off/?rsf=syn:news:nca:cm:spa

There is just one problem with this claim – where did the owner-occupiers come from? If they sold an existing home, there is no change in the net supply. If they were previously renters then the reduction in rental supply is matched by a reduction in demand. And if they moved from interstate or overseas, they made the same addition to demand whether they bought or rented.

The ferocity of the Courier-Mail campaign against the closure of a relatively small loophole also yields some interesting insights into the operations of the media. Most of the time, the Courier-Mail presents itself as a fiercely parochial local paper. But in this case, it is acting to defend the interests of interstate investors, at the expense of Queenslanders (at least those who don’t own land interstate).

The Palaszczuk government has shown unusual courage recently, defying the mining lobby by raising royalty rates, and announcing a radical expansion of renewable energy. Closing the land tax loophole isn’t on this scale, but it’s an important and progressive reform. Let’s hope that it succeeds.


Status quo ante bellum: what does it mean for the war in Ukraine

Back in 2011, I wrote a post arguing that

self-defense (including collective self-defense) is justified only to the extent of restoring the status quo ante bellum. That is, having defeated an aggressor, a country is not justified in seizing territory, unilaterally exacting reparations or imposing a new government on its opponent. Conversely, and regardless of the alleged starting point, countries not directly involved should never recognise a forcibly imposed transfer of territory or similar attempt to achieve advantages through war.

What does this claim mean in the context of the war in Ukraine? In my view, it means that the Ukrainian government and its international supporters should seek a ceasefire in which Russia withdraws its forces to their positions of 23 February, without conceding any Russian claims regarding annexations or (if they still operate after the sham referendums) the Luhansk and Donetsk separatist republics.

It is already evident that the Russian army can’t hope to secure a better outcome than this. Judging by hostile leaks and popular opposition, lots of Russians, including in the military have recognised this, even if Putin hasn’t. But, on current indications, it will take a long time before the Ukrainians can recover all the territory currently occupied since the invasion. An early Russian withdrawal would liberate tens of thousands of people from a brutal occupation, as well as preventing vast loss of life on both sides (bearing in mind that the Russian army will increasingly be made up of conscripts, including Ukrainians). And more of the aid flowing to Ukraine could be used for rebuilding, rather than expended in fighting.

A ceasefire wouldn’t imply that Zelensky was going back on the pledge to recover all the territory of Ukraine, including Crimea. The Ukrainian position would be the same as it was before the invasion. But it was clear then that the areas under occupation couldn’t be recovered by force and that is probably still true, particularly as regards Crimea.

An obvious question is whether a ceasefire would give the Russians the chance to rebuild for another attack. In my view, the opposite is more likely. By next year, Russian energy exports to the EU will have ceased, and Russia’s technical capacity will have degraded further through the effects of sanctions and the flight of skilled workers. Meanwhile, Ukraine will have the chance to train its enlarged army, and reorient its economy towards the EU.

Of course, wars change things and an exact return to the status quo ante bellum is impossible. The dead are still dead, the crimes committed during the war will not be absolved, the aggressor can rarely be made to pay full reparation, and so on. Both sides will be worse off than if the war never happened.

I’d be interested in thoughts. However, anyone thinking putting forward a pro-Putin, or anti-anti-Putin position should stay quiet. No comment of this kind will be published, and the commenter will be permanently banned. If you’re in doubt, that probably means you shouldn’t comment.