I guess the trick to interesting search engine queries is posting lots of things with lots of different words in them. I used to get very dull queries, but on Friday I got the bizarre “opinion Poles in race for california state treasurer phil angelides” and the scary “how to deliver death threat “. Those Poles are pretty opinionated, I guess. And I’ve just discovered that this blog is Google’s number 1 source for ‘goldbricking’

Paul Kelly in the Weekend Oz, is a must-read, both for the points on which he’s right and for those on which he’s wrong. Kelly presents a strong case that we should focus on our own region, rather than alienating potential allies in the war on terror by joining a US attack on Iraq (although he doesn’t clarify this, the point is much stronger in the case of a unilateral attack by the US and a handful of allies than in the case of an operation with broad international backing.
But when he comes to Indonesia, Kelly illustrates everything that’s wrong with the Australian debate on this topic. He says:

Unless Australia changes its cultural outlook towards Indonesia, it will fail this security challenge. As a nation we can no longer afford the insidious delusions that have been incorporated into our national mind-set ? that it was morally wrong to deal with a military autocracy; that East Timor’s liberation was a triumph of our values; that a weak Indonesia was less important to Australia; and that those Australians who sought to bridge the divide were either appeasers or betrayers of Australia’s own honour.

Does Kelly really think that our dealings with Suharto were both moral and sensible or that it’s a ‘delusion’ to say that East Timor’s liberation was a triumph of our values?
The problem is that Kelly’s uncritical support for friendly relations with ‘Indonesia’ (that is, whoever happens to be in power in Indonesia) is mirrored by the unalloyed hostility to all things Indonesian of those whose views were formed by the struggle over Timor. The most influential example is Scott Burchill, who refer to Indonesia as the Javanese empire.
While Suharto was in power, the appeasement policy advocated by Kelly and pursued with sickening fulsomeness by Keating was unchallenged within the establishment. The East Timor episode and the complete failure of the ties we had so carefully cultivated with the likes of General Wiranto and the Kopassus security forces discredited the Keating-Kelly policy and swung influence to the anti-Indonesians.
This shift in the debate combined with very poor policy on the part of the Howard government on a number of fronts (general disdain for Asia, the ‘deputy sheriff’ fiasco and the bullying chauvinism of ‘border protection’ and the ‘Pacific solution’) have produced the paradoxical outcome that, having followed a policy of sycophantic support for the dictator Suharto, we have had steadily worse relations with his successors, even as they have become steadily more representative of the Indonesian people.
The Howard government has done an excellent short-term job in the wake of the Bali bombings. But we will be paying the price for the mistakes (and worse) of the past for a long time to come. I don’t know how we are going to fix these problems, but generous aid to the Balinese could scarcely hurt.

Update Another lengthy and erudite comments thread clarifies the central role of Java and the Javanese (not the same thing) in Indonesia’s state and society. Nearly all posters are agreed on the failure of the Keating-Kelly policy, but there is a lot of disagreement over what should replace it. And there’s plenty of criticism for past and present governments of all political colours.
And if the prospect of comments many times as long as the original (lengthy by blog standards) post deters you, there’s a string of other great posts just waiting for comments. So jump in!

Further updateRoss Gittins, who is sensible here as usually, argues that “Good relations with Indonesia are vital”. This does not mean ‘kowtowing”. As Gittins points out, our problem is the opposite – Howard and others playing to the Australian gallery by ostentatiously not kowtowing.

Since Alex Robson introduced the economic haiku, and Ken Parish has a joke section, I thought I might as well reveal my hidden past as a folk singer/songwriter (with that Ned Kelly beard, who would have guessed it?).
Here’s a song I wrote in the 80s. Then as now, a lot of sharp operators in business were finding ways to dodge taxes and other debts. The lurk du jour was the ‘bottom of the harbour’ scheme, an asset-stripping operation in which debts were dumped into a bogus company with ‘straw man’ directors. The company records were then literally dumped, most famously at the bottom of Sydney Harbour. It’s to the tune of “Fiddler’s Green”, one of a large family of folk songs of which Australia’s favorite example is ‘The Dying Stockman’. In the original, Fiddler’s Green is where fishermen go if they don’t go to hell.

Bottom of the Harbour

As I was a-walking by the stock exchange door
I heared the rich businessmen all crying poor
My taxes are high and I can’t bear to pay
So it’s time to go cruising on Botany Bay

Chorus:
Take me down to the bottom of the harbour
No more on the board I’ll be seen
I’m going to relax, mates, and live off your backs, mates
And I’ll see you someday on Fiddlers Green

Now Fiddlers Green is a place I’ve heard tell
Where businessmen go if they don’t go to jail
There’s no tax to pay and there’s no work to do
Cos you’re bludging off people much worse off than you

Chorus

You lie round the pool and you sit in the sun
Then sip on your port when the long day is done
The company cars and the meals are all free
And the workers are down just where they ought to be

Chorus

I don’t want to work for a living, not me
So I’ll just go out cruising the wide open sea
My files and records to the bottom I’ll tip
Then claim a deduction for the cost of this trip

Chorus

Tune: Fiddlers’ Green

Tim Cavanaugh at Reason takes a ‘moral equivalence’ line on Campus Watch. He admits that Daniel Pipes (the leading figure behind Campus Watch) wants to suppress free speech on campus, but then quotes some overheated rhetoric from the other side about McCarthyism as being equally bad. Cavanaugh pretends to take a balanced ‘plague on both your houses’ line, but obviously his sympathies lie with Pipes, and, I suspect, McCarthy. This is another instance of my general observation that, among the inheritors of the classical liberal tradition, ideological libertarians are the group least supportive of freedom of political speech. (link via Bargarz)
Update Don Arthur has more on this. He notes “The trouble is Daniel Pipes and Campus Watch are not trying to promote informed debate – they’re trying to intimidate people who express views they don’t approve of.”
Further update Another great comments thread (an all-time record of 22 comments and counting), with informed discussion on the distinction between individual and collective defamation from Ken Parish and “Simon”. Jason Soon defends Reason and CW vigorously, but, I think, unsuccessfully. And the inimitable Jack Strocchi introduces what I believe to be a new move in blogging, using one comments thread to advertise comments posted in another. Everyone, including me, has told Jack he should start his own blog, but perhaps his unique style is better suited to a comments thread, and no blog I know of has better comments than this one.
Further updateComment 23, from Ken Parish brings in flag-burning which seems to a guaranteed firestarter in the Us, but not so much here. Prove me wrong and keep those comments coming!

Submission, to Victorian Parliament Public Accounts and Estimates Committee Inquiry into Private Sector Investment in Public Infrastructure

This is a submission dealing with the currently popular policy of private-public partnerships. A key recommendation of my submission is that measures of public debt should be extended to include obligations under leases and other long-term obligations, particularly where these arise from contracting arrangements that replace public investments that would otherwise incur debt. Currently, both governments and private corporations can conceal debt by converting into long-term leases. Enron was a leading practitioner of this ‘asset light’ strategy.

Brad DeLong is running some fascinating posts on productivity and technology. A good place to start is this piece, on the data showing rapid declines in the cost of hardware, with no corresponding decline in the cost of software. Brad’s piece is headed “Where Is Moore’s Law for Software?, or, The Mythical Man-Month Strikes Back”
My view is that both hardware and personal computer software have run into diminishing returns. In the case of hardware, this has been offset until recently by Moore’s Law – the biennial doubling of processor speed, memory capacity and so on. In the case of software, the opposite is true if anything. Not only has the marginal benefit of a line of code diminished, but the rising real wages of programmers and the rapacious demands of Microsoft have pushed the price of code up.
Economists profess not to like introspection and anecdotal evidence but we actually rely on it all the time. So I’ll draw on my own. I’ve realised huge increases in productivity from personal computers and I’m always willing to spend money if it will improve my productivity further. But all the really crucial innovations, as far as my ‘pure’ research is concerned were between 1984, when I got my first Mac, and the early 1990s, when email with attachments became generally available for academics. This set of innovations mean that I now routinely work on a shift system with co-authors in the United States. In the morning I get the latest instalment from my co-author, and in the evening I send an amended version back to them. I estimate that this system, along with the prior innovation of word processing, has at least doubled my research productivity and probably quadrupled it (in quantity terms, anyway, but I think there’s also been a quality improvement from the ability to collaborate with colleagues on the other side of the world).
Throughout the 80s and most of the 90s I was always aware of hardware constraints. The processor was never fast enough for Mac OS, there was never enough hard disk space and never enough memory. I remember the relief when, thanks to a price war around 1990, I was able to pick up 20Mb of RAM for only $1000. And that was nothing compared to the time saved when I got my first 20MB hard disk in the 1980s. Today, I’m like the apocryphal millionaire (Getty?) – if you know how much RAM and disk space you have, then you obviously haven’t got enough. I could easily double both at low cost, and upgrade my processor to one twice as fast, but I can’t be bothered doing the necessary paperwork (and it’s still literally paperwork!) or taking my Mac into the store. The only margin on which improved hardware is still contributing to my productivity is that of monitors – bigger, brighter, flatter and multiple, I still can’t get enough. But of course, Moore’s Law doesn’t apply here. It’s taken fifteen years for the standard monitor to go from 13 inches to 21.
It’s a similar story with software. Throughout the 1980s, a new version of a word processor was an event to be eagerly awaited. Now the only reason I bother with upgrades is to maintain file compatibility.
The discussion above leaves out the Web and blogging, which I’ll talk about in a later post. For the moment, I’ll just observe that, as far as my research in economic theory is concerned the impact of the Web on my productivity has been modest or, in its capacity as a method of wasting time, negative. As for blogging ….

One of the great dangers of political struggles is that of ‘fighting fire with fire’ and thereby becoming the same as your enemy. Nowhere is this more evident than among critics of ‘political correctness’. The standard critique of political correctness is that its practitioners believe that hurtful speech is oppressive and therefore seek to curtail freedom of speech. In the caricature version of PC, a reference to a 150 cm, 200 kg person as ‘fat’ is un-PC and must be replaced by a euphemism such as ‘gravitationally challenged’.
Opponents of political correctness are similarly quick to claim oppression whenever they are subject to verbal criticism. ‘Racist’ is the absolute taboo term for these reverse-PC types, followed by ‘McCarthyist’, but even something as neutral as ‘right-wing’ reliably calls forth howls of protest.
All of this confusion is exhibited by Janet Albrechtsen complaining about left-wing attempts to censor free speech on campus. Although she says this is a problem in Australia, the sole example she gives is that of Robert Manne criticising his off-campus opponents as supporters of a ‘new racism’.
Most of her examples are American. A typical instance is a letter written by some academics to an Oklahoma newspaper criticising a Web Site called Campus Watch. Janet was so upset about this that I initially supposed that the University of Oklahoma must be hosting the site and that the letter could be seen as an attempt to have it taken down. But no, in Janet’s world, a letter to your local paper counts as attempted censorship.
Intrigued by this, I went to the site and clicked on the first page an article entitled Harvard’s Un-American Activities. I assumed that this headline would refer to some committee established by Harvard, on the model of the famous House Un-American Activities Committee, to suppress non-PC comments on various issues. But, as it turns out, Campus Watch wants to suppress Harvard. The article refers in general terms to opponents of a war with Iraq as treasonous, and specifically stated that

The unconscionable decision to allow the commencement speech called “My American Jihad” – which whitewashed the real meaning of the term in favor of a mild vision of personal struggle – has now been followed by a faculty-signed petition against war on Iraq.

In other words, despite its frontpage claim to ‘fully respect the freedom of speech of those it debates’, Campus Watch is specifically engaged in attempts to suppress campus speech, and to label dissent as treason.
A few of final observations. First the term ‘politically correct’, like its Australian cousin ‘ideologically sound’, was almost never used seriously. It originated within the left as a term of relatively gentle mockery for those obsessively concerned with superficialities like the use of appropriate terminology and the avoidance of unsound choices in consumer goods.
Second, political correctness is, under the name of ‘civility’, widely praised by many who would shrink in horror from anything ‘PC’. The basic point of civility or ‘manners’ is to act in a way that is socially appropriate rather than acting in accordance with your own feelings. As such it is an organised system of hypocrisy. Considered as ‘the tribute that vice pays to virtue’, a certain amount of hypocrisy is socially useful. But ultimately, correct choices of words are no substitute for genuine sympathy with other members of the community, something that is distinctly lacking among many right-wing advocates of ‘civility’ and quite a few ‘politically correct’ leftwingers.
Finally, a week or so ago, the Oz was honest, or brazen, enough to reprint the entire controversy between Janet and Media Watch. Reading it at one sitting it was obvious that Janet was guilty as charged, of printing distorted and plagiarised quotes, then failing to retract properly despite complaints from the person being quoted. Her only defence was that MW was engaged in selective prosecution, a valid enough point, but not one that does anything to restore her own credibility.

Forbes.com reports that online sales have fallen (relative to the same quarter last year) for the first time. The report includes this gem:

Along with economic weakness, and the inevitable slowdown in growth that comes from a maturing industry, this year’s online sales figures reflect more sophisticated strategies about what can and cannot be sold online.

In March 1999, I wrote

A more promising way of making money on the Net is by selling goods and services. Superficially, the scope for growth here looks limitless. So far, however, sales on the Internet have been strong only where a lot of business was previously done by phone or mail-order. Examples include computer hardware and software, books and CDs (particularly hard-to-get items), florists and travel services. Once the bugs are ironed out, the Net will offer a better service than a call-centre or paper catalog. So, business on the Internet should grow to a level comparable to that of the present mail-order and phone-order sectors.

The Harvard and Stanford MBAs who ran and financed the dotcom bubble companies spent around $100 billion to work out that home-delivering Internet-ordered dog food is not a viable business plan, and this is called ‘more sophisticated strategies’.

Ken Davidson slams the fashionable policy of public-private partnerships. I recently appeared before a Victorian Parliamentary committee inquiring into this issue. I’ll post a link to my submission shortly.
Update Here it is (PDF file)

Ross Gittins has an interesting piece on the Western Australian decision to abolish all jail sentences shorter than six months. (Link via Professor Bunyip who includes an interesting personal anecdote, which gives clues to the continuing puzzle of his true identity, and pretty conclusive refutes my own hypothesis on this topic).
I endorse this decision. I hope it works satisfactorily and I think it should be taken further. As I pointed out here, once you accept that prison sentences don’t have much effect in either deterring crime or rehabilitating criminals, there’s no point in short sentences. On the one hand, there’s a strong case for locking hardened criminals up until they’re too old for crime. On the other hand, given that most juvenile institutions appear to be training grounds for adult criminals, there’s a strong case for second chances and slaps on the wrist for young offenders, based on the observation that a lot of them grow out of it naturally.

Let me throw another idea into the mix. One reason we resort to imprisonment so readily is that there’s no alternative punishment that’s really serious. Fines typically max out at a couple of thousand dollars, which is trivial for an employed criminal. I’d suggest making fines proportional to income and collecting them over a period of years using the same mechanisms that are used for child support. We could then impose much heavier fines as an alternative to short stretches of prison or pointless ‘community service’.

Update As always, there’s lots of good stuff in the comments thread. In response to Ken Parish, I want to clarify one point. My argument doesn’t rely on the assumption that criminal penalties have no deterrent effect, only that there is no significant deterrent effect from marginal increases in the severity of penalties e.g. short prison terms vs fines. I agree that greater probability of detection does have a deterrent effect.