Kaiser

John Quiggin2 Comments

At a time when the Howard government’s increasingly brazen dishonesty (in all senses of the term) might just be starting to sink in with the electorate, and with the Hanson business raising all sorts of memories, what does Labor go and do but appoint Mike Kaiser assistant national secretary. For those who don’t recall, Kaiser was the leading operative of the AWU machine in Queensland and was forced to resign his Parliamentary seat after admitting involvement in branch-stacking.

Stacking is not the gravest of offences, and I wouldn’t necessarily say that Kaiser should never return to public life, but appointing him as a national official in a party that is supposedly trying to stamp out things like branch stacking is just plain stupid.

Walmart and productivity

John Quiggin4 Comments

Brad de Long links to this piece by Robert Gordon arguing that an important segment of the recent gain in US productivity growth has come in retail trade. Gordon says

America’s retail productivity performance has all been achieved in stores newly built since 1990, not in existing stores.

The new stores are the “big boxes” such as Wal-Mart, Home Depot and Best Buy, large new buildings set up on greenfield sites at interstate highway junctions, in suburbs and, increasingly, in inner cities. As these new stores reap the rewards of their size, openness and accessibility and drive smaller stores out of business, they bolster the average productivity of the US retail sector as a whole.

While countries differ, Europe has many ways of stifling modern retailing, from green belts and land-use restrictions to laws that prevent companies from lowering their prices. These make life difficult for new, more efficient retailers in order to protect small, traditional merchants. This is one of many cultural chasms across the Atlantic. Many Europeans could not care less about retail productivity and instead are adamant that Europe must avoid the US’s unregulated land use and starvation of public transport, which have produced its overly dispersed, energy-wasting metropolitan areas.

This is interesting in a couple of ways.

First, it helps to resolve a puzzle I’ve been pointing out for some time. If US productivity growth is so strong, why is employment in tradables like manufacturing shrinking so fast? On this account, the productivity growth is mainly in nontradables.

But the second point is more important. Retail productivity is very hard to measure. For example, measured retail productivity declined in Australia when shopping hours were extended – the extra convenience wasn’t taken into account in the statistics. By Gordon’s account, the apparent efficiency of big, edge-of-town stores is offset by a lot of negative externalities, and higher travel costs borne by consumers, and other road users. As I observed here and here the US has experienced a big increase in distances travelled, even compared to Australia and this has been accompanied by an increase in road deaths, giving the US one of the highest rates of road death in the OECD, about 50 per cent higher than Australia’s. And all of this reflects the fact that road use in the US is substantially underpriced, as was noted in a recent Chicago Fed letter.

Of course, there’s no easy way of telling whether the costs I’ve mentioned outweigh the benefits that are measured in the retail productivity statistics. Since so many of the costs are externalities, the success of WalMart in driving out the competition doesn’t prove anything. But it’s disappointing to see a fine economist like Robert Gordon fall back on cliches like ‘cultural chasm’ in relation to outcomes that are largely the product of economic policy. And, whatever the net balance, it’s clear that the measured growth in retail productivity is an overestimate.

Bad news from Kabul

John Quiggin6 Comments

This report from Salon is the most depressing of a string of depressing stories I’ve seen coming out of Afghanistan.

As the article makes clear, there are all sorts of reasons for the current problems, going back at least to the Russian invasion. But a big one is that the US has not spent the kind of money required to make a success of nationbuilding, and has not provided the kind of security that would encourage other donors to spend either. How much is needed would be hard to tell, but an obvious benchmark would be to return living standards to what they were before the current cycle of wars started. This would cost tens of billions of dollars, whereas the total amount being spent is around $1 billion.

All of this applies even more with respect to Iraq, which was wealthy before the war with the US started in 1991 (even more so before Saddam’s war with Iran). I estimated a few months back that a policy with a reasonable chance of establishing a stable democratic government would require expenditure of between $25 billion and $50 billion, and that the cost of undoing the damage of the last 15 years would be between $100 billion and $200 billion (all of this excludes the costs of military occupation). So far, the aid committed by the US Administration is $2 billion.

The pro-war Weekly Standard agrees, and has even suggested a petrol tax to defray some of the costs (thanks to Jack Strocchi for passing this along). Of course, there is no prospect of this happening. But at least the Standard, unlike most of those who supported the war, is pushing the Administration to take the kind of actions that would be needed to justify it.

It’s possible that the current policy of nation-building on the cheap might work. The atrocious attack on the UN building and, more generally, the shift towards civilian targets on the part of at those fighting the occupation forces may shift public sentiment against them. And perhaps the attacks on civilians are a sign of weakness. But the example of Afghanistan does not provide any grounds for optimism.

Freedom of speech part 2

John Quiggin1 Comment

Andrew Norton responds to my brief post on neoliberalism and free speech, joining a longstanding debate I’ve had with his Catallaxy colleague Jason Soon, in which I’ve criticised neoliberals, and particularly Hayek, for a lack of commitment to free speech. A few of my posts are here, here and here (if you want the comments threads you’ll need to go through the archives of the old Blogspot site). Here’s one of Jason’s responses.

I’ll say more on this soon, but before the brickbats start flying, I thought I’d throw a bouquet. Norton’s post mentioned that he’d written on political correctness and I found this piece, in what appears to be a preblog precursor of Catallaxy, in the old Geocities domain. Given that, as he says, Norton shares many of the views of the anti-PC brigade on political issues, his rejection of the anti-PC line shows a robust commitment to free speech.

Hanson

John Quiggin9 Comments

While I’m no fan of Pauline Hanson, I’m concerned about the processes that have led to her being imprisoned for three years.

As I understand it, her offence was to create a political structure under which she and her immediate circle constituted and controlled the One Nation Party, while the ordinary members belonged to a ‘supporters group’ with no power to do anything. Since the Party proper did not have 500 members, its registration was an offence, as was the receipt of electoral funds.

The fact is that, with the exception of the Australian Democrats (and maybe the Greens, I don’t know how they work) all the major Australian political parties have structures under which the leadership is a self-perpetuating elite and the ordinary members belong, for all practical purposes, to a supporters group. Particularly in the Labor Party, the exclusion of the members from any real power has been a slow and painful process, which has taken decades. Hanson’s crime was to cut corners in an effort to achieve the same outcome quickly.

More importantly, I don’t think the requirements of the Electoral Act for 500 members were meant to ensure party democracy, but merely to avoid the registration of bogus parties as a political device. Whatever its faults, One Nation was (and I suppose, still is) a real political party.

Freedom of speech

John Quiggin16 Comments

Catallaxy Blogger Andrew Norton has an article in the Oz arguing, among other things that labels like “neoconservative” aren’t really applicable in Australia. In general, the piece is both informative and accurate.

There is, however, one characteristic error. Norton suggests the use of

liberalism or classical liberalism to describe the free marketers who, in the old line, want to keep the government out of the bedroom as well as the boardroom.

This definition omits the crucial preoccupation of classical liberals like John Stuart Mill, freedom of political speech and thought. The problem is illustrated by, say, Jeff Kennett, who fits Norton’s definition perfectly, but would certainly not have been recognised as a liberal by Mill in view of his sustained, and largely successful, efforts to intimidate and silence his critics. A lack of concern with freedom of speech and political thought is the main distinguishing feature of neoliberals, as compared to classical liberals.

Health & Education vs Welfare

John Quiggin3 Comments

Peter Saunders (the CIS one) has a piece in today’s Age about people’s responses to public question on taxation and public spending. He correctly observes that it all depends on what question you ask but gets the main issues wrong. Saunders makes a big deal about status quo bias, arguing that the big difference is between questions that ask “tax cuts vs improved services” and those that ask about “higher taxes for improved services”. The ACTU gets 76 per cent in favor of improved services vs tax cuts, whereas the CIS found only 12 per cent in favor of higher taxes.

The status quo effect is real, but Saunders ignores the big difference between the questions. The ACTU asked about health and education services, whereas the CIS asked about welfare. An ANU question asking about “social services” came in halfway between the two. This is consistent with a string of findings going back to EPAC surveys in the early 90s which show that people are much keener on health and education spending than on higher welfare payments.

Reading the data, most people are happy to keep welfare payments where they are, though more would prefer a cut to an increase. On the other hand, most people would support higher taxes for better education and health, though of course they’d prefer other people to pay the higher taxes.

Even given his relatively recent arrival on our shores, Saunders ought to be aware of all this. It may be that he’s papering over the gaps in his argument, or it may be that he’s simply not up to speed with the issues.

Broke vs broken up

John Quiggin6 Comments

While I was looking into household debt recently, I ran across a striking fact. In the year ending March 2003, more Americans went bankrupt than got divorced. There were 1.6 million bankruptcies in the year, about 40 per cent of which involved couples, implying around 2.2 million people going bankrupt. There were around 1.0 million divorces, or about 2.0 million people getting divorced. This (or maybe the year before, the divorce stats are a bit fuzzy) is the first time bankruptcies have exceeded divorces, at least since the Depression. The increase in bankruptcy has been exceptionally rapid. As recently as 1985, there were only 300 000 personal bankruptcies a year.
image001.gif

Read More »

The generation game

John Quiggin5 Comments

Ken Parish has been playing the generation game (in this case, Baby Boomer vs Gen X) with Paul Watson an avid boomer-basher. A good time was had by all, as usual.

I don’t want to interrupt anyone’s fun, but I thought it might be worth pointing out that as a device for explaining social trends, the idea of a ‘generation’ is almost totally useless*. Nowhere is this more true than when it’s used with reference to ‘baby boomers’.

Among the obvious problems with this concept are the facts that

  • Most of the people thought of as archetypal boomers weren’t born during the baby boom (examples: John Lennon 1940-80 and Mick Jagger 1943- )
  • Most people born during the baby boom entered the labour force during a period of high youth unemployment and have experienced high rates of unemployment ever since

To satisfy all the standard cliches about baby boomers you would have to be simultaneously over 60 (to be a contemporary of Lennon and Jagger) and under 35 (to be among the last to get a free university education in Australia).

I did a more lengthy analysis of the generation game in the Fin a few years back which I’ll post soon.

* For some limited technical purposes, the related concept of a ‘cohort’ is useful, if handled with care.

Data is not the plural of datum

John Quiggin10 Comments

In a recent comments thread, Dave Ricardo notes my observation

Unfortunately the data is only published annually

and asks

Don’t you mean, the data are published only annually?

This is a common error, reflecting a confusion between Latin and English.

In Latin, data is the plural of datum (‘something given’). The word ‘datum’ is used in English, but is an archaism, except for a specialised use in surveying. On standard principles of modern English usage, the correct plural of datum is ‘datums’ and a Google search reveals 158 000 occurrences of this term. (For comparison, ‘data’ occurs over 100 million times).

In English ‘data’ is a mass noun like water or wheat. Hence it can be used in compounds like “data base”, “data processing” and so on, which would be ungrammatical for a plural like ‘datums’. This simply reflects our everyday experience with data which, is that it is a quantity of information, not a collection of facts. For example, it would be natural to refer to “500Kb of data”, but wrong to refer to “500 data”.

Data is normally dealt with as a mass, but it is sometimes important to refer to discrete units, in which case it is appropriate to use the count nouns ‘data point’ or ‘observation’ (drops of water and grains of wheat provide an analogy for other mass nouns). A collection of data points can be referred to as a ‘data set’.

Although lots of people imagine that ‘data’ is a plural count noun, and some try to treat it that way, hardly any do so consistently. To give just one example, I looked for occurrences of the phrases ‘not much data’ (correct for a mass noun) and ‘not many data’ (correct for a count noun) using Google. There were 10 times as many occurrences of ‘not much data’. Moreover, a large proportion of the ‘not many data’ observations were either written by non-native speakers of English or formed part of grammatically correct phrases such as ‘not many data sets’.

Update There is nothing new under the sun. Kevin Drum at Calpundit blogged on the same topic a few months ago, reaching the same conclusion.