Thought for Thursday

John Quiggin25 Comments

My column in today’s Fin (subscription) is on Lomborg and foreign aid. Having tried out the full frontal assault in the blog and found my readers generally unconvinced, I decided to take Lomborg and his backers at face value, at least to begin with.

Lomborg argues that, rather than incur the costs of Kyoto, which he estimates at around $US 200 billion per year, the money should be spent on aid to poor countries such as improvements in health and drinking water. This is more than 1 per cent of the GDP of the developed countries as a group, compared to current aid levels ranging from 0.1 per cent of GDP for the United States to 1 per cent for Denmark, Lomborgâs home country.

If Australia adopted Lomborgâs proposal, foreign aid would need to be quadrupled at least. The cost to the budget would be somewhere between $5 billion and $10 billion per year.

Itâs not surprising that the conservative commentariat has endorsed Lomborgâs opposition to Kyoto – they were against long before anyone had ever heard of Lomborg. Whatâs striking is that, without exception, they have either explicitly endorsed or tacitly accepted the second part of Lomborgâs argument, calling for a massive increase in foreign aid.

The position of the Institute of Public Affairs is particularly interesting …

Regardless of whether Lomborgâs argument is put forward in good faith, or merely as a debating point, it is worth taking seriously. There is no investment the rich countries of the world could make that would yield higher returns, even in terms of our self-interest in a less chaotic world, than $100 billion per year allocated to improved health and sanitation in the worldâs poorest countries.
Fortunately, we do not need to choose between Kyoto and aid. As Lomborg and others, both critics and supporters of Kyoto, have pointed out, implementing Kyoto through global emissions trading would amount to a massive foreign aid program as well as being an important first step towards resolving the problem of climate change.

Intelligence test

John Quiggin8 Comments

For anyone who cared to look at the issue logically, it was obvious that the question of Saddam’s putative weapons of mass destruction would be decided on day one of the war. As I said, the day before the war started,

the “best” time for Saddam to use them is before the US attack commences, which means almost immediately … If, in the face of an invasion aimed at killing him or seizing him for a war crimes trial, Saddam still refrains from using WMDs, only two conclusions are possible:
(a) there were no weapons; or
(b) they were not, even in the most drastic circumstances, a threat to the US

This is clear enough, but still, some reasonable people might have taken a little longer to be convinced, and, as we’ve seen, there’s still the possibility of a leftover test-tube in a fridge somewhere. But after six months, anyone who continues to think that illegal weapons in working order are going to be discovered is revealing more about their own psychology than about the real world. What then, is to be said about the report that Polish troops had discovered four French Roland missiles, manufactured in 2003 and delivered to Iraq at a time when massive US forces were already surrounding the country, and when the capture of such missiles would have utterly discredited the French government?

This story was so unlikely that any rational person would have dismissed it out of hand, especially in the presence of a clear alternative explanation, that the missiles had been delivered before the imposition of sanctions in 1990* , and the Poles just got the dates wrong (as they subsequently admitted). In its combination of wish fulfilment and total implausibility, it was on a par with the various rumours that Jews/Muslims/highly placed Americans had been tipped off before September 11 and stayed away from the World Trade Center.

So, who fell for it? As far as I can tell, a large proportion of warbloggerdom bought the story and hardly any debunked it.

At the top of the list, there’s, Instapundit, LGF, samizdata and Kevin Donahue

Google reveals so many suckers for this story that it’s impossible to list them all, but I estimate the number must be into the hundreds, even excluding those who reproduced the story without comment. A few linked to the subsequent retraction, but mostly in a way that failed to admit that the original report had been completely falsified. For example, Instapundit is still suggesting that the Polish retraction is part of a coverup.

Hat-tip to Roger Ailes whose link to Instapundit I followed.

*That is, in the days when Saddam was “a mass murderer, but our mass murderer”.

Arnie !

John Quiggin7 Comments

There are all sorts of problems with the process that has made Arnold Schwarzenegger governor of California. The numbers needed for a recall seem too small, the mechanics of US elections are chaotic, and the first-past-the-post (plurality) system induces lots of strategic voting.

But the idea of recall is a good one, directly opposed to the notion that governments are entitled to a set term of office, the longer the better, that dominates Australian discussion of issues such as four-year terms. The more democratic checks on government, the better.

As regards the outcome, I can’t say I endorse it, but it’s easy to make the case that, considering the feasible outcomes from the viewpoint of the average Californian, Schwarzenegger looked like the best of a bad bunch. Whatever merits Davis might have had (and they were far from obvious) and whatever the role of adverse circumstances (clearly dominant) his administration had failed, and, in a democratic system, the usual response to failure is to let someone else have a go.

Blair and Brown

John Quiggin5 Comments

Following the recent British Labour Party conference, Chris Sheil suggests that Tony Blair will be gone by Christmas. In these narrow personal terms, I’mnot sure. Most commentary suggests that his position was somewhat strengthened. More importantly, Blairism is gone already. Back in 2001, I argued that, in substantive terms, the Third Way was already dead. After the recent conference this fact is right out in the open. Its most noteworthy feature was not the debate over Iraq, but the fact that Gordon Brown felt free to give a speech in which he mentioned Labour and its traditions 57 times and failed to use the phrase New Labour even once.

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Barbarism

John Quiggin12 Comments

I’m opposed to the death penalty, on the grounds that it does more harm than good in the circumstances of a modern society, but I don’t feel any particular repugnance at the execution of someone who has had a fair trial and is obviously guilty of murder. This, however, seems like something out of the Middle Ages.

Update Some more gruesome details have just emerged about the chemical execution process.

If not Crean, who?

John Quiggin11 Comments

Chris Sheil puts forward a somewhat tentative case for the return of Kim Beazley to the Labor leadership, prompting me to clarify my own views on the subject.

In my view, it’s a mistake to expect an Opposition leader to be a votewinner. There are exceptions, such as Hawke in 1983, but most of the time the best an Opposition can hope for is that the leader should not drag the party down. An illustration is the fact that the incumbent Prime Minister, no matter how unpopular, almost invariably beats the Opposition leader on the question “Who would make the better PM”.

In current circumstances, there’s also not much point in trying to distinguish between alternative leaders on the basis of their beliefs about policy. To the extent that apparent differences have emerged from time to time, they are more about political positioning than anything else. So, for example, Beazley is now attacking Crean and Latham from the left, arguing against tax cuts, but the positions could easily be reversed. Similarly factional allegiances, while they are important in lining up numbers, now have little or nothing to do with policy. The Socialist Left faction, for example, might as well be called the Impressionist Blue faction as far as the significance of the name is concerned.

My view therefore, is that Labor needs someone competent, without substantial negatives, rather than a savior.

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Spies and scandals

John Quiggin11 Comments

I haven’t got around to blogging about the parallel Plame/Kelly/Wilkie scandals, but I didn’t have a well-thought out reason for not doing so either. Nathan Newman supplies the gap (see also here). To restate Nathan’s key points more generically

  • The main purpose of secrecy laws is to protect governments against their own citizens, so breaking these laws isn’t such a big deal
  • Scandals are a distraction from the real issues

I wrote an essay on the spy myth a couple of years ago, concluding as follows

The spy myth clearly served the interests of intelligence agencies, which prospered during the 20th century more than any set of spies before them. The real beneficiaries, however, were the counterintelligence agencies or, to dispense with euphemisms, the secret police, of both Western and Communist countries. The powers granted to them for their struggle against armies of spies were used primarily against domestic dissidents. Terms such as ‘agent of influence’ were used to stigmatise anyone whose activities, however open and above-board, could be represented as helpful to the other side.

The supposed role of the secret police, to keep secrets from opposing governments, was, as we have seen, futile. Secret police, and the associated panoply of security laws, Official Secrets Acts and so forth, were much more successful in protecting their governments’ secrets from potentially embarrassing public scrutiny in their own countries.

As spies and the associated fears have faded in their public mind, their place has been taken by terrorists. In many ways, this is a reversion to the 19th century, when the bomb-throwing anarchist was a focus of popular fears and the subject of novels by such writers as Chesterton and Conrad.

As the attacks of September 11 showed us, the threat posed by terrorists is real. Nevertheless, even if terrorists were to mount attacks ten times as deadly in the future, they would still present the citizens of the Western World with less danger than we accept from our fellow-citizens every time we step into our cars.

If the century of the spy has taught us anything, it is that we need to assess the dangers posed by terrorists coolly and calmly rather than giving way to panic.

Monday Message Board

John Quiggin26 Comments

I’m back in beautiful Brisbane and, I hope, back to normal blogging. It’s time for your comments on any topic (civilised discussion and no coarse language, please).

As a starter question, I’ll ask – should I join the general trend, and give this blog a name? If so, any suggestions? (I know I’m leaving myself wide open here, but that’s what blogging’s all about!)

What I'm reading, and more

John Quiggin

Disgrace by JM Coetzee. It’s been sitting on my shelf for a year or so, and the Nobel Prize (along with the interesting, if not strictly relevant, fact that Coetzee is now living in Adelaide) finally prompted me to read it. It’s a bleak look at post-apartheid South Africa and at the human condition in general. The hero is a middle-aged academic, formerly a classicist and now reduced to teaching communications who leaves his job in disgrace after an affair with a student, and goes to live with his daughter on a remote farmlet. Coetzee got into a lot of trouble in South Africa over the central scene, in which the pair are attacked by a group of black marauders, and for the generally pessimistic outlook of the book as a whole. His latest book, Elizabeth Costello has an Australian writer as its main character, and covers some of the same themes as Disgrace, including animal rights and how to talk about evil. I was impressed by the excerpt I read in Prospect but haven’t yet seen the book.

Last night, I went to a concert by Margret RoadKnight, looking back on forty years on the folk scene. She showed off both her vast range of traditional and contemporary music and a voice that hasn’t lost any of its quality in the thirty years I’ve been listening to her. Accompaniment was provided by Bruce McNicol, late of the Captain Matchbox Whoopee Band. The concert was held at the very snazzy Judith Wright Cultural Centre and the audience was much more cultural centre than folk club. With the exception of the goateed youngsters taking the tickets mine was just about the only beard there.

Puzzles and solutions

John Quiggin5 Comments

Brad de Long reports on a dinner discussion with Paul Krugman and Janet Yellen, hinking About Puzzling Anomalies in the Flow of Macroeconomic Data . He says

We currently have two large, puzzling anomalies in the macroeconomic dataflow. First, productivity growth is ludicrously, ridiculously, unbelievably rapid. Second, the high current level of the U.S. trade deficit fits very uneasily with the relatively high value of the dollar and the lack of large interest rate differentials in favor of the U.S. relative to other countries

and says

Things that readers think are smart should be attributed to Paul Krugman or to Janet Yellen. Things that people think are dumb should be attributed to me.

. At the risk of showing myself up as dumb (at least relative to these very smart guys), I don’t see a problem in either case.

Beginning with productivity, it’s only labour productivity that’s grown rapidly and seemingly anomalously. Capital productivity has declined markedly, as has multifactor productivity (a weighted average of capital and labour productivity) In part this reflects the economics of embodied technical change – as computing power has become cheaper it has been applied more intensively. But there’s also a big hangover effect from the bubble and bust, when crazy signals from capital markets led lots of firms to undertake unprofitable investments. Once some semblance of reality returns, the natural response is to cut back and it’s much easier to sack the least productive workers than to reduce capital stock. So labour productivity rises fast, but output growth is weak. I’ve done the numbers here (see also here and here), and they fit the data neatly.

On the absence of a large interest rate differential and the relatively high value of the dollar despite the large deficit, this is only a problem if you assume capital markets operate rationally. All the recent evidence is against this assumption, but in any case the markets aren’t as crazy as all that. Most non-US participants are now selling US-denominated assets ,which are only being kept afloat by the efforts of Asian central banks. Strong versions of the efficient markets hypothesis would suggest that such activities must be futile, and that speculators, anticipating the inevitable decline of the dollar would drive the central banks to the wall, but I don’t have any problem ignoring strong versions of the efficient markets hypothesis.