Conspiracy or stuffup ?

John Quiggin13 Comments

Perhaps the best informed commentator on the Shiite community in Iraq, Juan Cole asks whether the actions of the Coalition Administration which led directly to the current bloody fighting between Coalition forces and (hitherto relatively quiescent) Shiite militias was Incompetence or Double-Dealing . As he says

The Coalition decision to provoke a fight with Muqtada al-Sadr’s movement[1] only three months before the Coalition Provisional Authority goes out of business has to be seen as a form of gross incompetence in governance. How did the CPA get to the point where it has turned even Iraqi Shiites, who were initially grateful for the removal of Saddam Hussein, against the United States? Where it risks fighting dual Sunni Arab and Shiite insurgencies simultaneously, at a time when US troops are rotating on a massive scale and hoping to downsize their forces in country? At a time when the Spanish, Thai and other contingents are already committed to leaving, and the UN is reluctant to get involved?

As I read Cole, the answer is neither pure incompetence nor double-dealing for its own sake but the fact that the US Administration contains so many competing agendas that its policies are invariably incoherent.

fn1. By closing their newspaper, arresting a leading supporter of Sadr and threatening Sadr himself.

Selfish genes, selfish individuals or selfish nations ?

John Quiggin18 Comments

Following up a post by Henry Farrell at Crooked Timber, I wanted to look slightly differently at the appeal of evolutionary psychology. As I said in Henry’s comments thread the ev psych analysis is essentially “realist”. This is the kind of style of social and political analysis that purports to strip away the illusions of idealistic rhetoric and reveal the underlying self-interest. The only question is to nominate the “self” that is interested. In Ev Psych the unit of analysis is the gene, in Chicago-school economics the individual, in Marxism the class, in public choice theory the interest group, and in the realist school of international relations the nation.

All of these realist models are opposed to any form of idealism in which people or groups act out of motives other than self-interest. But, logically speaking, different schools of realists are more opposed to each other than to any form of idealism. If we are machines for replicating our genes, we can’t also be rational maximizers of a utility function or loyal citizens of a nation. Clever and consistent realists recognise this – for example, ideologically consistent neoclassical economists are generally hostile to nationalism. But much of the time followers of these views are attracted by style rather than substance. Since all realist explanations have the same hardnosed character, they all appeal to the same kind of person. It’s not hard to find people who simultaneously believe in Ev Psych, Chicago economics and international realism. One example of this kind of confusion is found in Stephen Pinker whose Blank Slate I reviewed here, back in 2002.
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What I’m reading

John Quiggin15 Comments

I’ve been looking at an interesting report from the National Office for the Information Economy on Productivity Growth in Australian manufacturing (PDF file). Released with no fanfare (not even a press release) recently, it presents results which accord with everyday observation, but not with the ideological assumptions that dominate the policy debate in Australia. The approach used was to examine labour productivity growth in a wide range of manufacturing industries and use regression analysis to explain differences in rates of productivity growth. By far the most important factor was the use of advanced information and communications technology, with additional explanatory power being gained when the education level of the workforce was taken into account. Claims that reductions in tariffs would expose inefficient industries to the “cold wind of competion” (or sometimes the “hot blast”), forcing them to increase productivity and therefore induce dynamic efficiency gains got no support. The coefficient on the associated variable was both economically and statistically insignificant (negative in most cases) [1].

A notable technical feature is the point, which has been emphasised by Brad de Long that it’s not appropriate to focus on multifactor productivity when most technological progress is embodied in capital items with rapidly declining prices, such as computers.

fn1. A mildly surprising result in view of the Thatcher effect, by which average productivity is automatically increased when inefficient factories close.

What I'm reading

John Quiggin15 Comments

I’ve been looking at an interesting report from the National Office for the Information Economy on Productivity Growth in Australian manufacturing (PDF file). Released with no fanfare (not even a press release) recently, it presents results which accord with everyday observation, but not with the ideological assumptions that dominate the policy debate in Australia. The approach used was to examine labour productivity growth in a wide range of manufacturing industries and use regression analysis to explain differences in rates of productivity growth. By far the most important factor was the use of advanced information and communications technology, with additional explanatory power being gained when the education level of the workforce was taken into account. Claims that reductions in tariffs would expose inefficient industries to the “cold wind of competion” (or sometimes the “hot blast”), forcing them to increase productivity and therefore induce dynamic efficiency gains got no support. The coefficient on the associated variable was both economically and statistically insignificant (negative in most cases) [1].

A notable technical feature is the point, which has been emphasised by Brad de Long that it’s not appropriate to focus on multifactor productivity when most technological progress is embodied in capital items with rapidly declining prices, such as computers.

fn1. A mildly surprising result in view of the Thatcher effect, by which average productivity is automatically increased when inefficient factories close.

A snippet on economic modelling

John Quiggin16 Comments

Economic analysis of policy proposals may be based either on first principles or on economic modelling. The proposed FTA is too complex to be analysed simply in terms of first principles. Nevertheless, a great deal of insight can be obtained from simple parametric models of various aspects of the proposal.

As compared to a large-scale simulation model, this approach has the advantage of clarifying the processes leading to estimates of costs and benefits. A large-scale model offers greater precision and the capacity to model policy outcomes for particular regions and industries. However, where there is a large divergence in estimates of aggregate outcomes between simple and elaborate models, this divergence is rarely a consequence of greater precision in the elaborate model. More frequently, the divergence is the result of differences between the economic assumptions used to ‘close’ (that is, derive an equilibrium for) the elaborate model and the economic assumptions used in the simple model. Hence, there should be no automatic preference for the results of more elaborate models. What matters is the validity of the core assumptions.

Newsflash: sex invented in 1985

John Quiggin17 Comments

This piece in the Age by Michael Scammell manages to hit nearly all my hot buttons at once. It includes generation-game garbage, postmodernist apologias for the advertising industry, support for exploitation of workers, and heaps of all-round stupidity. The background to the story, it appears, is that a clothing store called Westco required its female staff to wear T-shirts carrying a lame double entendre. One worker refused, and the Victorian Minister for Women’s Affairs, Mary Delahunty protested, with the result that the company abandoned the promotion. Scammell attempts to set Ms Delahunty straight on the subject of postmodernist irony.

The headline (not picked by the author, but a direct lift from the article) is Sex sells. Gen X knows this. MPs don’t. I know every generation is supposed to imagine that it invented sex, but not even the most self-indulgent of baby boomers would have the chutzpah to claim this insight as their own. Vance Packard was making hay with this kind of thing back in the 50s, and it was tired old stuff even then. In fact, the basic point predates the wheel. Hasn’t Scammell heard the phrase “the oldest profession”?

Then he claims that the slogan on the T-shirt “stop pretending you don’t want me” represents ” a dollop of knowing post-modernist irony”. If this is post-modernist irony, I’ll stick with the modernist version, or better still that of the classics like Dr Johnson.

But for all-round stupidity you can’t beat Scammell’s observation that it must be all right because ‘Westco reports a significant public demand for the T-shirt despite its seemingly offensive message”. Can’t he see that there’s a big difference between wearing a provocative T-shirt to advertise your own wares to members of the opposite (or perhaps your own) gender, and being made to wear one to flog the wares of your employer, who is doubtless offering little more than the minimum wage for the privilege. Obviously the Westco worker who refused to wear the shirt and made a fuss about it could do so. (In a non sequitur that’s typical of the piece, Scammell asserts that since this worker was willing to stand up for herself, there can’t have been a problem in the first place).

Scammell goes on about “grid girls” at the Grand Prix, and near-naked models at fashion shows, but these workers know what they are offering from the start and (at least in the case of successful models) are paid accordingly. If he wants to work out what’s going on here, Scammell would be well advised to go back to school and learn some old-fashioned class analysis instead of the 1990s postmodernism he apparently thinks is still hip.

Worst case scenarios 3: Climate change

John Quiggin20 Comments

The big threat to the worlds environment as a whole is global warming. The best-bet projections prepared by the International Panel on Climate Change suggest that, in the absence of substantial action to mitigate global warming, global temperatures would probably increase by about 1 degree C between now and 2050 and by a further 1 degree C between 2050 and 2100.
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