Why spies never discover anything useful

John Quiggin61 Comments

I’ve long maintained the view that spies never discover anything useful about a country’s foreign enemies, though they are very useful in suppressing domestic opponents. This is a straightforward implication of game theory, but my attempts to explain it haven’t worked in the past, and I don’t know how to do much better. So, I’m going to restate my arguments from 10 years ago, against the massive expansion of spying that was already under way, and make the observation that the evidence since then strongly supports my case.

Despite an espionage and surveillance effort unparalleled in history, the US NSA has been unable to produce any convincing evidence of stopping even one domestic terror plot. Its best case was someone alleged to have sent a few thousand dollars to Al Shabab in Somalia. The NSA not only missed actual terror plotters like those in Boston, but also performed poorly relative to ordinary police methods which have produced numerous convictions (many of them admittedly, by methods that verge on entrapment).

But if anti-terrorist espionage has proved ineffectual, spying on friendly governments is just plain stupid. This isn’t a zero-sum game, like espionage in warfare, it’s a negative sum game. Australia is now finding this out, but the reflex reactions of “everyone does it”, “we don’t comment on intelligence matters” and so on, remain as firmly embedded as ever.

Of course, while this is stupidity as regards the public interest, or even that of Australian political and business elites as a whole, it is massively beneficial to the security apparatus, and the complex of interests it supports. It’s striking that the only Indonesians who’ve given Abbott any support have been their own spies and secret police, who can expect more funding and greater powers. Doubtless our own spooks will return the favor in due course, if their Indonesian counterparts are caught doing something we don’t like.

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Sauce for the goose

John Quiggin23 Comments

Among those hyperventilating about the ABC decision to publish the information about the spying fiasco, Andrew Bolt has been every bit as vociferous and hyperbolic as you would expect. Of course this is silly: the UK based Guardian was going to publish anyway, and if they had, for some reason, chosen not to do so, Snowden and his team could have given it to the Indonesian press, which would have been an even worse outcome for the Australian government.

In this context, it’s worth recalling that Bolt wasn’t always so highminded about protecting our nation’s secrets. Back in 2003, when Andrew Wilkie resigned from the Office of National Assessments because he could not stand the way Iraq intelligence was being “sexed up”, Bolt was denouncing anyone and everyone who suggested that the Iraq war was anything other than a brilliant success based on overwhelming evidence. Somehow, he received a leaked copy of a report written by Wilkie, which, with his characteristic method of selective quotation, he used to attack Wilkie’s credibility. The Howard government (which could not, of course, quote the original report) used Bolt’s article to attack Wilkie. As Mike Seccombe observed at the time

You have to admire the neat circularity of it: top secret information is leaked to a government-friendly journo, who puts bits of it deemed damaging to Wilkie on the public record. Downer’s office briefs Senator Macdonald using that information.

This is part of a more general information. When secrets embarrass the government, leaking them is a major crime. When the government wants to attack its opponents, leaks are just part of politics. I don’t have a problem with journalists who publish leaked information without fear or favor. But someone like Bolt, willing to be used as a conduit for leaks that make the government look good, and then to pontificate about the immorality of leaks that make the government look bad, isn’t a journalist – he’s a lackey.

And looking back again, it’s worth remembering that Wilkie was right, that every word Bolt wrote about Iraq turned out to be utterly, howlingly wrong, and that he has never apologised or retracted. The credibility of anything he writes now should be assessed in that light.

A new front in the culture wars

John Quiggin31 Comments

The political right seems eager to open new fronts in the culture wars. The latest, from the WSJ, is running (I won’t link to their piece, but to this translation). I’m happy to say that I am on the correct (that is, left) side of this latest battle. Apparently, liberal elitist runners have bumper stickers indicating the longest distance (in miles) they have run, say 26.2 for a marathon. Real Americans, on the other hand, never leave their cars (except to move from the garage to the couch) and therefore have stickers saying 0.0.

Konfrontasi

John Quiggin85 Comments

I was going to write something about Abbott’s mishandling of the latest spy fiasco, but I don’t think I can improve on Tad Tietze at Left Flank. I’ll just stress a few points

(a) Indonesia is now a democracy which means that the kind of cosy deals between military/security apparatchiks we used to do are just as constrained by Indonesian public opinion as by Australian if not more. I don’t know who the Indonesian equivalents of Ray Hadley and Alan Jones might be, but I can imagine what they are saying

(b) The idea, still underlying a lot of the discussion, that we can and should dictate terms to the Indonesians is nonsense. The US can get away with this kind of thing (though Obama was wise enough to end the bugging of Merkel’s phone), but we need the goodwill of the Indonesians at least as much as they need ours. The fact that neither we nor they are paragons of human rights policy or the treatment of minority groups is a case of attending to our own problems before lecturing others.

For the record

John Quiggin25 Comments

I just read Peter Hartcher’s series on the meltdown arising from the rivalry between Rudd and Gillard. A pretty good summary, I thought, though of course Hartcher was, like me, more in sympathy with Rudd.

The account clarified one point for me. A crucial element of the anti-Rudd story was the supposedly critical impact of leaks before the 2010 election, for which Rudd was widely blamed. I couldn’t remember thinking of these as a big deal at the time, and Hartcher explained why. The most damaging leak (Gillard making some dismissive remarks in Cabinetabout age pensioners) occurred on the same day as Gillard announced the Citizens Consultative Assembly. As this post shows, this appalling idea permanently changed my view of Gillard, which, even after the coup against Rudd had remained broadly positive. “Cash for clunkers“, which came shortly afterwards, cemented my view. By contrast, the leaks were the kind of insider gossip which excites the Press Gallery, but had absolutely no impact on my thinking.

As Hartcher points out, while he was sensible for most of his brief second term, Rudd spent the first two weeks of the 2013 campaign pursuing ideas that were just as silly.

This will, I think be my last word on the Gillard-Rudd rivalry. Feel free to comment, but please avoid attacks on other commentators. Obviously, political figures are fair game, within the usual limits.

The Rudd-Gillard government: An appreciation

John Quiggin66 Comments

A lot has already been said on the occasion of Kevin Rudd’s retirement from politics. Having already written a great deal about Rudd while he was active in politics, I’m not going to add to it. Rather, I’ll reflect on the achievements of the Labor governments of the past six years, which were substantial. They included

* The uniquely bold and successful management of the Global Financial Crisis
* The creation of the NBN
* The design and implementation of a price on carbon
* The National Disability Insurance Scheme
* Plain packaging for cigarettes

among many others. How much of this will survive what, I hope will be one term of LNP government remains to be seen, but Labor can campaign for years on defending and extending this record.

Against that, there were some failures. Most obviously, the government failed to come up with a workable solution to the problem of asylum seekers, and eventually capitulated to the xenophobic rhetoric of Abbott and Morrison (though with the important qualification that Labor greatly increased the total refugee intake, while Abbott has cut it). In addition, despite Rudd’s recognition that the GFC marked the breakdown of the post-Bretton Woods capitalist order, he(and even more, Wayne Swan) rapidly came to treat it as a momentary aberration, and to return to the policy orthodoxy that created the crisis in the first place.

The biggest failures, though, were personal, not political. Rudd’s abrasive egotism was matched by Gillard’s unprincipled tribalism (for her, Labor was an extended family, not a political movement) to produce a series of catastrophes that eventually destroyed the government. If they had managed to work together, as they did with reasonable success for the first two years of the government, they could have been a better team than Howard-Costello or Hawke-Keating. But it seems to be the nature of Australian politics taht such partnerships never worked for long.

Wall Street isn't Worth It

John Quiggin55 Comments

That’s the title of my new piece at Jacobin, which links back to a variety of discussions at Crooked Timber, in particular this one from Ingrid Robeyns. Mankiw, whom Ingrid cites, offers an implicit defence of the 1 per cent, implying though not quite asserting, that the gains accruing to those in this group (largely senior executives and the financial sector) have been the price we pay for a process that benefits everyone, yielding a Pareto improvement. As Ingrid says, Pareto improvements aren’t as self-evidently desirable as Mankiw assumes. My argument focuses on Mankiw’s factual premise, concluding that the expansion of the financial sector has made the majority of people worse off. This implies that a response to the global financial crisis focused on attacking the financial sector is feasible as well as being, in my view, politically necessary as an alternative to rightwing populism.

Jacobin doesn’t appear to have a comments section, so feel free to comment and criticise here. I’ve had an interesting discussion with Daniel on Twitter already, but it’s not really a great medium when more than a few people are involved.

Some good news from the US Congress

John Quiggin11 Comments

The US Congress is rightly regarded as a dysfunctional mess, blocking vital legislation for trivial partisan reasons. But occasionally, things work out for the best. A variety of critics ranging from left and liberal Democrats to members of the Tea Party appear likely to derail ‘fast track’ authority for Obama to sign the appalling Trans-Pacific Partnership. By contrast, the Abbott government is keen to sign this secret deal and has dropped Labor’s objections to clauses that would allow foreign corporations to sue our government for policies inconsistent with the market liberal ideology that informs the treaty. Let’s hope the whole thing is slowed down until the 2016 election year. If that happens, the pressure to renegotiate the deal, or scrap it altogether, will become intense.

Coincidentally, Wikileaks has published a draft chapter from the agreement, hidden from us by our governments and making clear what everyone knows. This isn’t about trade but about imposing market liberal institutions, including strong intellectual property in pharmaceuticals, copyright and so on.

Colin Clark lecture

John Quiggin4 Comments

I presented the Colin Clark lecture today, on the topic “National Accounting and the Digital Economy: The Case of the NBN’

Synopsis

Colin Clark’s greatest contribution to economics was his pioneering role in the construction of national accounts. In the industrial economy of the 20th century, the central problem in the national accounting was the need to avoid double counting, by measuring only the value added at each stage of production. This problem is closely related to that of benefit-cost analysis for public projects. In the 21st century digital economy, value is primarily derived from the flow of information rather than physical inputs and outputs. This creates new problems for national accounting, and for benefit-cost analysis. One example of these problems is the question of how to evaluate alternative proposals for the National Broadband Network.

Paul Syvret covered it in the Courier-Mail. I also did an interview with Steve Austin on the local ABC 612[1], which started off with a brief discussion of Rudd’s economic legacy, and another for AM on Radio National which didn’t make it to air.

The slides are here

fn1. Illustrated with a slightly goofy candid shot, taken in the ABC Green Room

Fiasco

John Quiggin69 Comments

If you want a single episode to summarize the fiasco that is the Abbott government, the first working hour of the 44th Parliament would be hard to beat.

First, the government had to gag the Opposition seeking to get any kind of information about the government’s signature issue, Stopping the Boats. If anyone had said, 20 years ago, that it would be necessary to read the Jakarta Post to find out what our own government was doing, they would have been greeted with incredulity.

Then, having specifically nominated juvenile insults like “Electricity Bill” as the kind of thing his new Speaker, Bronwyn Bishop would rule out of order, he had to watch as his attack poodle, Christopher Pyne used that very insult and was supported by Bishop. Then, of course, Abbott voted to uphold Bishop’s ruling.

Then, having wasted the first hour of the Parliament, Abbott announced his discredited bill to repeal the carbon tax. Meanwhile, the vice-president of our most important neighbour, representing a government Abbott has already insulted half a dozen times in as many weeks, was left to wait in an anteroom.

The Labour government of the last six years had its low points, to be sure. But it’s hard to imagine that those who voted for this crew (or for their former ally, Clive Palmer) aren’t experiencing a fair bit of buyer remorse.