This Washington Post article is the first I’ve seen based on extensive interviews with Iraqi civilians (in this case, in Basra) in the absence of the armed forces of either side. For those tempted to believe the official statements of one side or the other, it makes interesting reading. The headline “People in Basra Contest Official View of Siege: Life Was Mostly Normal, Residents Say; Doctors Report Many Civilians Killed” gives a reasonably accurate summary.

Responding to my piece on PPPs in last Thursday’s Fin, Dennis O’Neill of the Australian Council for Infrastructure Development concedes that the obligations associated with PPP are similar to those of sovereign debt, but then says that governments prefer PPPs because they are unwilling to take on additional debt for fear of jeopardising AAA credit ratings.*This makes about as much sense as saying that people who are worried about the size of their mortgage should borrow on their credit cards instead.

At lower credit ratings you could make an argument about transfers of systemic risk (very tenuous in my opinion), but the only question that should affect a AAA rating is the ratio of total obligations (including debt and PPP contractual obligations) to income.

Despite his protestations, O’Neill belongs among the believers in the magic pudding theory of private finance for infrastructure.

* [the letter is not on the Fin website yet, I’ll try to post it later].

This is pretty much the antithesis of blogging. I read an article by Will Hutton a few days ago, thought I’d noted down the link and now I can’t find it anywhere. Anyway, Hutton produced statistics to show that the increased public spending of Blair’s second term was producing the desired results – shorter waiting lists, better school performance, lower crime and so on. But I don’t have a link, so you’ll just have to take my word for it.

As I recall, Hutton had a go at the standard free-market line that ‘you don’t solve a problem by throwing money at it’. It’s easy to make fun of this kind of claim. After all, no-one, least of all free-marketeers believes this in relation to their daily lives – there aren’t that many problems that can’t be eased to some extent by a generous application of money.

But I thought that it might be worth exploring the underlying argument a bit further. At its weakest it’s a statement about logical implication, namely that spending more money is neither necessary nor sufficient to bring about better outcomes. This is true, and can be backed up by supporting examples and counterexamples, but it isn’t very helpful. Training is neither necessary nor sufficient for swimmers to win races, but that doesn’t mean it’s a good idea not to train.

A more serious version of the claim rests on the factual claim that the public sector is inefficient compared to the private sector. If true, this means that it would be possible to improve performance without cost, and it raises the possibility that an increase in funds will simply lead to an increase in inefficiency. But most plausible models of public sector inefficiency don’t yield this conclusion.

Finally, there is statistical evidence. Taken in aggregate, statistical evidence produces the commonsense result that, other things equal, more input implies more output. The apparent counterexamples, such as US studies showing no relationship between class size and academic performance, generally don’t stand up to scrutiny very well. (at last, a link!)

Update In the comments thread, Mark Chambers comes to my rescue with this link to the Hutton article.

Both globalism and internationalism imply some sort of limits on national sovereignty. The main source on this topic is Stephen Krasner’s book Sovereignty: Organised Hypocrisy. Krasner distinguishes four different concepts of sovereignty. International legal sovereignty is the acceptance of a given state as a member of the international community, and is, in most cases, relatively uncontroversial. Westphalian sovereignty is based on the principle that one sovereign state should not interfere in the domestic arrangements of another (supposedly, this was the principle underlying the Peace of Westphalia, which ended the Thirty Years War in 1648). Interdependence sovereignty is the capacity and willingness to control flows of people, goods and capital into and out of a country. Domestic sovereignty is the capacity of a state to choose and implement policies within its territory.

During the 1980s and early 1990s, the emerging literature on globalization focused primarily on the apparent erosion of interdependence sovereignty and Westphalian sovereignty. Much of this literature was primarily concerned to criticize ‘realist’ models of international politics in which the Westphalian notion of the state as a unitary actor are taken as axiomatic.

During the 1990s, a neoliberal account of globalization came to the fore. The starting point of the neoliberal account of globalization is the observation that states have abandoned or lost much of the interdependence sovereignty they possessed for most of the 20th century. It is then argued that this loss of interdependence sovereignty entails a loss of domestic economic sovereignty, so that states are constrained by the pressures of international capital markets to follow the neoliberal policy agenda of deregulation, privatization and small government, regardless of the wishes of their domestic electorates

A similar view is implicit, though not always clearly argued, in postmodernist and ‘Third Way’ accounts of globalization, notably that of Giddens 1999. In addition, left-wing writers such as Panitch and Strange, while deploring convergence on a neoliberal policy agenda, broadly accept the claim that such convergence is the result of technologically-driven developments in the world economy.

The most effective criticism of the factual validity of the neoliberal story of the end of domestic economic sovereignty has come from writers with a social-democratic viewpoint. The crucial observation is that globalization is not fundamentally new, but is, in large measure, a reversion to the economic institutions of the 19th century. The experience of the late 19th century casts doubt on claims that the loss of interdependence sovereignty implies the erosion of Westphalian sovereignty. The claim that the loss of interdependence sovereignty entails the adoption of neoliberal domestic policies is similarly problematic.

I’ve finally got around to posting my Fin Rev piece on blogging. Although I didn’t use the much-debated word ‘parasitic’, I think I contributed to this characterization with my concluding paras:

claims that blogging will displace traditional media are not merely premature but unsound. Bloggers are dependent on the public record, and that public record is largely created by traditional media. It’s only possible to unearth a 1983 Trent Lott speech if that speech has first been recorded.

The mass media have more deeply-rooted advantages arising from the simple fact that they are mass media. Despite the growth of ‘narrowcast’ media like blogs, it is clear that the vast majority of people want to see and read the same things their friends and workmates do, at least some of the time. The fact of a shared experience that can form a basis for discussions, a source of catchphrases and so on is at least as important as the actual content of the experience.

It is unlikely then, that weblogs will displace traditional newspapers any time soon. Nevertheless, the dream that anyone who wants to should be able to publish their own newspaper is closer to reality than at any time in history. The implications have yet to become fully apparent, but are sure to be profound.

Of course, truth is the first casualty in war. But the frequency with which good news has been reported by the Coalition, only to be retracted a day or two later is unparalleled in my memory. [At least on our side of wars – perhaps Saddam lies more than the Coalition, but does anyone really want that to be the test].

The latest and potentially the most serious case, relates to the fatwa (judgement) supposedly issued by Grand Ayatollah Sistani calling for non-resistance to the Coalition forces. This was announced on Thursday by the the US Central Command, a rather strange medium for Shi’ite fatwas. Today, the BBC is reporting that nobody associated with Sistani knows anything about the supposed fatwa. If it turns out to be a fabrication, the chances of a successful peace, already slim, will dwindle even further.

Stephen Kirchner raises all sorts of issues in this post (no permalink) which I just found (interestingly enough, just after giving a talk to a leftish audience in which I criticized, among other ‘magic puddings’, the idea that expenditure could be funded by deficits in the long run). After talking in a rather waffly way about the US budget, Kirchner says:

Similarly, it has been amusing to watch many left-of-centre economists re-discover fiscal conservatism now that the government in the US is spending money on stuff they don’t like. John Quiggin characteristically overstates his case in referring to the rise of ‘banana republic populism’ in the US. There are many objections one could raise to the growth in non-defence discretionary outlays under the Bush Administration. But one can’t help but think that deficits of similar magnitude incurred by a Democratic Administration in the wake of a major recession would not occasion similarly alarmist predictions from the likes of Quiggin.

My first response is that it’s a bit annoying when you take the trouble to post almost your entire output on the Web and someone makes this kind of comment without reading what you’ve written. I’ve written many times, and in many different contexts, on the need for a ‘golden rule’ approach in which budgets are balanced (more precisely, public net worth is stable) over the course of the economic cycle. But Kirchner feels free to present me as a recent convert to fiscal conservatism motivated by political partisanship.

The second point is that the objection is not to the current relatively modest deficits, associated, as Kirchner says, with a major recession, but at the projection of deficits growing indefinitely into the future. Brad de Long gives the alarming details in numerous posts on his site.

The final point relates to Kirchner’s own inconsistency. He denies being a Keynesian, but seems to imply that running deficits in recessions isn’t such a bad idea (or maybe he’s just imputing this viewpoint to me). Or perhaps, like the US Republicans, he thinks that deficits are always good. I’ll leave it to him to clarify his position on all this.

To summarise, I don’t see anything wrong with the proposed US budget deficit for this year or next . But if a government of any political color put forward a long-term fiscal strategy as irresponsible as that put up by Bush, I would certainly be raising the alarm.

Update Following a discussion you can read in the comments thread, Stephen Kirchner has now graciously withdrawn the suggestion that my concern about fiscal sustainability is politically selective.

Internationalism is not a political movement like social democracy or neoliberalism, nor is it a central term in a body of argument, like globalisation. Rather, it is a general aspiration. So I’m going to offer my own definition, and try to tease out its relevance to our present problems. As opposed to globalism, internationalism accepts the reality and legitimacy of national governments. This legitimacy arises in part from acceptance of the idea of the nation-state, that particular groups of people (nations) are bound together by ties of common history and language, and are natural units of governments. But the legitimacy of the nation-state is provisional, dependent on both on the consent of the people who make up the nation and on adherence to evolving rules of international law. So, for internationalists, notions of sovereignty, derived from the idea that a king or emperor has the right to manage the affairs of his domain as he sees fit, are problematic.

From an internationalist viewpoint, the debate over the war between Iraq and the US-led coalition has been highly unsatisfactory. On the one hand, the anti-war idea that Iraq is a sovereign nation and that interference with its internal affairs is necessarily wrong cannot be accepted. Saddam’s lack of democratic legitimacy and numerous breaches of international law give the world community the right to protect itself. On the other hand, despite the figleaf of claiming to enforce UN resolutions (now virtually abandoned) the US-led coalition has relied essentially on nationalist arguments that the US has the right to do whatever it sees fit to promote its own national security and national interest. The commonly heard statement ‘S11 changed everything’ can be unpacked into a claim that, in a situation where the US has been subject to direct attack, it is not bound by any concept of international law.

The outcomes of the war so far give strong support to the internationalist view. In particular, the arguments for reliance on international organisations like the United Nations are, in large measure, the same as the arguments for liberal democracy within nations, for example, that no one nation (person) has the wisdom to make the decisions for everyone and that any nation (person) who is given a position of absolute power will ultimately abuse it. It is already clear that on the key issue that divided the US from the majority of members of the UNSC (the claim that Saddam’s weapons represented an immediate threat, and the claim that the calculus of costs and benefits favored immediate action over taking time to build an international consensus), the US was wrong and the majority was right.

The long-rumoured 7:30 Report segment on blogging went to air today. Other Ozbloggers covered were James Morrow, Gareth Parker and Gianna. I thought it was a pretty good introductory piece, with some cool montages. Gareth had a cool shot as a footy umpire (but his blog wasn’t given much of a run) and Gianna was shot with a very arty black background. I did my usual academic office thing, and James was shown at home. It seems like there’s a few visitors who are coming in because of the show, and I’d be interested in your thoughts (click on the “Comments” link, read others’ comments and add your own).

Sadly, Salam Pax, the Baghdad blogger who was featured in the opening of the segment has not posted for more than a week – maybe because Saddam’s police got to him or maybe because of the cutoff of Internet access, now complete since the Americans bombed the telephone network out of existence.

Update A colleague has emailed me to say that, according to Al Jazeera, salam pax is wounded in hospital. He seems to be in the city of Najaf. The doctor said that he was on his computer when his house was hit by a bomb.

Further update There’s a transcript of the 7:30 report segment here.

Further update 5 April Jim Henley reports that Al Jazeera’s English-language site is up here, and there is no mention of salam. So I guess something got confused along the way as happens with rumours of war. I hope so, anyway.

Within the first hour of war (when I was at Parliament House in fact), the newsticker included claims that two entire Iraqi divisions were about to surrender. Twelve days later, Associate Press is running a story headed Three Iraqi Soldiers Desert the Army (running frontpage on the LA Times website). I was going to do one of those calculations about how long it would take for the entire Iraqi army to desert at this pace, but you get the drift.