Urbanization in China (crosspost from Crooked Timber)

The NY Times has an interesting, but unsatisfactory, article, on government attempts to promote urbanization in China, with a target of 70 per cent by 2025. The story is mostly about farmers whose land has been acquired by fiat, which fits into well-established journalistic frames. The bigger issue, buried right near the end, is the fact that, under the hukou system of registration, people classed as rural can’t legally live in the city. So, while about 35 per cent of the population is legally urban, the true figure is more like 53 per cent. That makes nonsense of the figures quoted at the beginning of the article, and the suggestion of forced urbanization on a historically unparalleled scale. In reality, the announced target implies a modest slowdown in rural-urban migration, which has occurred despite official disapproval.

The big question, at least from the viewpoint of rural Chinese, is whether China can shift to a universal social welfare and retirement income system to replace the workplace-based system of social welfare, of which hukou was part, and which made sense with comprehensive state ownership. This topic is touched on in the NYT article, but in a fragmentary and confusing way, and it’s one about which I know little. I’d be grateful if anyone could point to a more comprehensive treatment.

From an Australian point of view, the continued construction of high-rise apartment buildings, highlighted in the article, is a big deal, since it drives much of the demand for steel, and therefore iron ore and coking coal, that has underpinned our amazing run of good economic fortune, along with the willingness of both Australian and Chinese governments to implement large-scale fiscal stimulus at the time of the global financial crisis.

Update Paul Romer makes much the same points, from a more informed perspective than mine.

Last three on the island (Crosspost from Crooked Timber)

There’s been a spate of recent articles looking at a group of US political writers referred to as “conservative reformers”.

The term ‘reformers’ is misleading since it tends to imply a shift in the direction of liberalism, which is not what the members of this group are hoping to do. More importantly, it implies the existence of a body of orthodox conservative thought against which the reformers are reacting. In reality, US conservatism has returned to the state identified by Trilling ‘ a series of irritable mental gestures. The ‘reformer’ label covers all those self-identified conservatives who would like to present some sort of intellectually coherent policy platform. These days, that’s a surprisingly small set – the typical list includes Douthat, Salam, Ponnuru, Barro, Brooks, Levin, and Dreher.

There used to be many more people in this group. But one by one, they’ve either abandoned ship and moved to the left (Lind, Sullivan, Frum, Bartlett, Ornstein) or descended into outright hackery, an absolute requirement for employment at any of the main rightwing thinktanks (and it’s hard to recall, but there was a time when people like Glenn Reynolds and the Volokhs seemed like serious intellectuals).

Looking at the remaining group, it’s pretty clear that Barro and Dreher are well on the road to apostasy, while Brooks and Levin are now reliable hacks, if they weren’t always. So, that leaves three reformers (Douthat, Salam and Ponnuru) still on the island.

The reactions of the remaining three reveal the pressure they are under. Salam more or less openly shills for the party line from time to time, as in his (now-deleted) attack on the DREAM Act. It seems pretty clear that he will stick with the team, come what may.

Ponnuru responded with the plaintive observation that, to accept the positions being urged on him from the left, he would have to concede that the majority of US conservatives were crazy. But, if craziness is assessed on the basis of stated views, this is evidently true, as Ponnuru surely knows.

Pluralities of US conservatives believe, or at least claim to believe, that:

The President of the US is a socialist Muslim, born in Kenya
The earth is less than 10 000 years old
Mainstream science is a communist plot
Armed revolution will likely be necessary in the near future

Ponnuru hopes that he can engage in serious policy discussion with conservatives while treating such delusional statements as mere shibboleths – harmless assertions of tribal identity

Most interesting is this piece by Ross Douthat, setting out what he sees as the reform conservative policy program. As he observes, it’s not designed to appeal to (US) liberals, and its full of arguments that have been demolished repeatedly by the left.

OTOH, as Douthat admits, there’s no sign that the Republican party has any interest in a program of this kind. More importantly there’s nothing there that would seriously upset a moderate conservative like Obama, or either of the Clintons. It’s well to the left of the revealed preferences of someone like Rahm Emanuel.

Conservative reform of the Republican party is a project that has already failed. The only question is whether the remaining participants will choose hackery or heresy.

Gallipoli and Crimea

Thinking about Anzac Day, with the inevitable mixed emotions, I was struck by the resemblance of the Anzac legend to that of the Charge of the Light Brigade in the Crimean War – the same incredible bravery of ordinary men commanded by bungling leaders to undertake a doomed and futile mission.

There’s another, even more tragic, echo here. Both the Crimean War and the Gallipoli campaign arose from the same cause – the decline of the Ottoman Empire, and the struggle over its partition. But in the Crimean War, the British and French were on the side of the Turks against the Russians. In the Great War, the imperial alliances had shifted, and the Russians formed part of the Triple Entente, while the Turks were on the side of the Germans.

Whatever the justice of the Allied cause in the Great War as a whole, the war with Turkey was nothing more than a struggle between rival imperialisms. The British and French governments signed secret treaties with each other, and with the Russian Czar, promising to divide the spoils of victory. At the same time, they made incompatible promises of independence for the Arabs and of a homeland in Palestine for the Jews.

There are no consolations to be had here. The Great War did not protect our freedom, or that of the world. Rather, it gave rise to the horrors of Nazism and Bolshevism, and, within Turkey, to the Armenian genocide. The carve-up of the Ottoman empire created the modern Middle East, haunted even a century later by bloodshed and misery.

As we reflect on the sacrifices made by those who went to war nearly 100 years ago, we should also remember, and condemn, the crimes of those, on all sides, who made and carried on that war.

Lest we forget.

Bolt and Krauthammer Day

At Crooked Timber, Henry Farrell points out that it is now exactly a decade (24 times 5 months) since Charles Krauthammer told us that

Hans Blix had five months to find weapons. He found nothing. We’ve had five weeks. Come back to me in five months. If we haven’t found any, we will have a credibility problem.

Despite being utterly and repeatedly wrong about Iraq, and many other things, Krauthammer is now, as he was then, a prominent columnist at the Washington Post.

What about our own Krauthammers? The leading candidate is surely Andrew Bolt, and a search through the archives[1] finds him denouncing the Left saying, triumphantly “they were wrong”. Those attacked include Carmen Lawrence, Bob Brown, Robert Manne, Andrew Vincent and Paul Dibb. Here’s a typical example of Bolt’s vitriol

NO one tried harder to save Saddam than Greens leader Bob Brown, a notorious scaremonger, who claimed more than 100,000 Iraqi children would die in this war. He also quoted from a leaked UN report which predicted 900,000 refugees. In fact, hardly one Iraqi refugee has fled in four weeks.

Of course, Brown was right[2].

Bolt is pretty big on demands for retractions. So, has he ever apologized for this appalling, and utterly wrong, attack on the reputations of those who correctly predicted the disastrous outcomes of the Iraq war?

fn1. The News archive doesn’t seem to go back 10 years, so I’ve been using the Factiva database. Google found Bolt’s spray reproduced on the Free Republic (I haven’t heard anything of the Freepers for years, but apparently they are still going). I’d welcome any help with data sources, and also any suggestions for more absurd wrongness from 10 years ago. If there are enough good links, I might make this a regular feature

fn2. From the days of the Iraq debate, I can just imagine someone quibbling about Brown’s reference to “children” and demanding a source that specifies the ages of those who died as a result of this tragedy. Such quibbles, and their authors, will be treated with the contempt they deserve.

1975 as the mirror image of 2013

There’s already plenty of commentary, here and elsewhere on Margaret Thatcher. Rather than add to it, I’d like to compare the situation when she assumed the leadership of the Conservative Party with the one we face now. As Corey Robin points out at Crooked Timber

In the early 1970s, Tory MP Edward Heath was facing high unemployment and massive trade union unrest. Despite having come into office on a vague promise to contest some elements of the postwar Keynesian consensus, he was forced to reverse course. Instead of austerity, he pumped money into the economy via increases in pensions and benefits and tax cuts. That shift in policy came to be called the “U-Turn.”

Crucially, Heath was defeated mainly as a result of strikes by the coal miners union.[1]

From the viewpoint of conservatives, the postwar Keynesian/social democratic consensus had failed, producing chronic stagflation, but the system could not be changed because of the entrenched power of the trade unions, and particularly the National Union of Miners. In addition, the established structures of the state such as the civil service and the BBC were saturated with social democratic thinking.[2]

Thatcher reversed all of these conditions, smashing the miners union and greatly weakening the movement in general, and promoting and implementing market liberal ideology as a response to the (actual and perceived) failures of social democracy. Her policies accelerated the decline of the manufacturing sector, and its replacement by an economy reliant mainly on the financial sector, exploiting the international role of the City of London.

Our current situation seems to me to be a mirror image of 1975. Once again the dominant ideology has led to economic crisis (now about 4 years old), but attempts to break away from it (such as the initial swing to Keynesian stimulus) have been rolled back in favour of even more vigorous pursuit of the policies that created the crisis. The financial sector now plays the role of the miners’ union (as seen in Thatcherite mythology) as the unelected and unaccountable power that prevents any positive change.

Is our own version of Thatcher waiting somewhere in the wings to take on the banks and mount an ideological counter-offensive against market liberalism? If so, it’s not obvious to me, but then, there wasn’t much in Thatcher’s pre-1975 career that would have led anyone to predict the character of her Prime Ministership.

fn1. I was too far from the scene to be able to assess the rights and wrongs of these strikes or the failed strike of the early 1980. It’s obvious that the final outcome was disastrous both for coal miners and for British workers in general, but not that there was a better alternative on offer at the time.

fn2. The popular series, Yes Minister, was essentially a full-length elaboration of this belief, informed by public choice theory

Sceptics and suckers: A look back at Iraq

Ten years after the invasion of Iraq, the disastrous failure of Bush’s war is evident to just about everyone. Here’s the news from the day before the anniversary.

Debates over the case for war in Iraq coincided with the emergence of the political blogosphere and created divisions that have been pretty much set in stone ever since. Those who, for one reason or another, swallowed and repeated the lies used to push the war dug themselves further and further in over subsequent years. Those of us who were sceptical[1] of the claims made by Bush and Blair, and proven right by events, came to realise that the other side inhabited a parallel universe, in which the possibility that prior beliefs might be changed by factual evidence was largely absent.

I want to restate a point that seems to be forgotten a lot, especially by those who went along with the Bush-Blair claims about WMDs. Until December 2002, there was plenty of behavioral evidence to suggest that Saddam had WMDs, namely the fact that he had expelled (or, more precisely, refused to co-operate with) the UN weapons inspection program. Given the benefits from being declared WMD-free, this made little sense unless he had weapons. Equally, Bush and Blair were making statements that they knew what WMDs Saddam had and fairly accurate knowledge of their location. Again, this seemed (to me, at any rate) to make no sense if they were relying on a bluff that Saddam could easily call.

All of that changed, in December 2002, when Saddam readmitted the inspectors and declared that he had no WMDs. At that point, it suddenly became obvious (again, to me, at any rate) that Bush and Blair had been making it up. I naively supposed that it would be equally obvious to everyone else, and that, as a result it would be impossible to mobilise support for war. That was wrong, of course. I was particularly struck by the unanimity with which the pro-war bloggers reproduced the ever-changing propaganda lines of the Administration. No one would be surprised now, but back then, the assumption was that disputes with rightwingers were a matter of honest disagreement.

fn1. It’s striking, in view of the extreme gullibility shown by such people that the overlap with those who call themselves climate “sceptics” is very high.

Is the tide turning?

It’s easy to overestimate the significance of a single electoral cycle (look at the Repubs after 2010), but there really does seem to have been a big shift in US political debate. Of course, that’s from a position where centrists like (first-term) Obama were occupying the positions held by moderate Republicans 25 years ago. It’s reasonable to feel a bit ambivalent about ‘victories’ like repealing the most regressive bits of the wholly regressive Bush tax cuts. A couple of links of interest (a few weeks old, but I’m running behind on most things)

* The Hoover Institution’s Policy Review is ceasing publication, and its final issue includes a piece by longtime editor Tod Lingren who concedes defeat, at least for the moment, to what he calls Left 3.0. This is his name for the self-described “Democratic wing of the Democratic party” which has, in his view, absorbed and tamed the radical left, defeated the Clintonite New Democrats, and dominated the Republicans. Lingren is surprisingly sympathetic, essentially implying that the only thing wrong with Left 3.0 is that too much egalitarianism is bad for economic growth

* Michael Lind gives chapter and verse supporting a view that I advanced a while ago, that US politics is best understood by treating “Southern White” as an ethnicity. There’s an interesting comparison to the now-disappeared nativist movements among Northeastern Yankees in response to Irish and other European immigrants

If US politics does shift to the left, what effects will that have elsewhere? Even the most liberal Democrats would be centrist at best in most countries, and their most radical goals (single-payer health care, a progressive income tax, parental leave and so on) would be uncontroversial in most places, so there won’t be much direct effect. On the other hand, in Australia and other English speaking countries, a large slab of the right wing gets its talking points from the US Republican bubble, via the Murdoch press, and look to an idealised version of the US as a free-market model. If the Repubs are discredited at home, that will create some problems for their followers abroad.

BReakout?

A crosspost from Crooked Timber, speculating (from a non-expert perspective) on the possible consequences of a referendum vote in favor of a British exit (BReakout?) from the EU. I’ll start by thinking about two polar cases.

One is the Norway/Switzerland model. Initially, the only thing that changes is that Britain gives up its political membership of the EU and institutions like the European Parliament, Council and so on. Otherwise things go on as before – Britain pays into the EU Budget, is bound by current EU regulations and subsequent changes, keeps its optouts on things like Schengen, at least initially, and maintains its current access to EU markets, free movement and so on. This seems to work well enough for Norway and Switzerland, but doesn’t seem likely to satisfy UKIP or Tory Eurosceptics. And, of course, it depends heavily on the goodwill of the EU. Britain could seek to negotiate further exemptions from EU rules, but, the EU could scale back the existing British optouts over time.

At the other extreme, Britain could unilaterally abrogate all the existing arrangements and start over from the position of, say, Russia – a major EU trading partner without any special rights or obligations other than those agreed on a case by case basis. Prima facie, that would include applicability of the standard third-country tariffs in each direction, non-tariff restrictions applicable to goods not compliant with EU (or, in the opposite direction, UK) regulations, standard visa requirements for travel, residence and work, controls on capital flows and so on. It seems clear that this would be damaging for the EU, and disastrous for the UK. Still, it also seems clear that this is what the Eurosceptics have in mind, though typically with a liberal dose of wishful thinking about how easy it will be to negotiate FTAs, visa-free travel etc.

Is there an intermediate path? I can’t immediately see one. Presumably, there is a notion that Britain would stay in while the terms of exit were negotiated. But that could last many years, and would effectively amount to the Norway/Switzerland situation in the interim.

Any other thoughts on this?

Swartz and Keen

Over at Crooked Timber, I and others have been blogging about the death of the wonderful Aaron Swartz, driven to suicide by abusive prosecutors Carmen M. Ortiz and Stephen Heymann (there are petitions calling for their dismissal, which US readers are encouraged to sign, and another to pardon Swartz. Opinions differ on the last of these, but I think it should be supported).

Now we have a similar, though hopefully less tragic, case of the same mentality being applied in Australia. Last year, the University of Western Sydney tried to shut down its economics program. I was among the many who protested and the university backed down partially, agreeing to retain a major. But lots of people, including well-known macroeconomist Steve Keen decided to take the redundancy package and leave. Keen’s course was to be scrapped, and he commented to students that, in the absence of any way of retaking the course, he wouldn’t be able to fail them. Whether this was a joke, or a serious statement, it certainly pointed out the incompetence with which the shutdown was being managed. The University, possibly still smarting from its defeat, took disciplinary action against Keen and has now taken the extraordinary step of referring him to the Independent Commission Against Corruption. I’m sure that ICAC will laugh at this, but it’s the kind of threat that has to be taken seriously. I imagine Keen will face significant legal expenses as a result.

So far, I’ve referred to the University, but obviously these decisions were made by actual people, and those at the centre appear to be:

Kerri-Lee Krause, pro vice-chancellor (education) (quoted in the Oz story)
and
Clive Smallman, Dean of Business

The vice-chancellor of UWS, Janice Reid hasn’t made any public statement as yet, AFAIK. If she has any care for the reputation of UWS, and her own, she needs to abandon this vindictive attempt at prosecution, and pull these bullying bureaucrats into line.

More at Catallaxy – on this occasion, I agree entirely.

Note – if you follow the Catallaxy link, do yourself a favor and skip the comments thread. Australia’s centre-right intelligentsia living up/down to its usual standard.