China’s grievances, for anyone to read

A few weeks ago, the Chinese embassy leaked a list of grievances against the Australian government to the Nine Newspapers. I’ve seen lots of references to items in the list, but searching for the whole thing produces very little. It turns out that Nine published an image of the list, but did not convert it into text, and no other media organization appears to have bothered to do so. In the interests of producing an accessible document, I spent the five minutes required to do this.

Here’s the list

— foreign investment decisions, with acquisitions blocked on opaque national security grounds in contravention of ChAFTA/since 2018, more than 10 Chinese investment projects have been rejected by Australia citing ambiguous and unfounded “national security concerns” and putting restrictions in areas like infrastructure, agriculture and animal husbandry.


— the decision banning Huawei Technologies and ZTE from the 5G network, over unfounded national security concerns, doing the bidding of the US by lobbying other countries


— foreign interference legislation, viewed as targeting China and in the ‘ absence of any evidence.


— politicization and stigmatization of the normal exchanges and cooperation between China and Australia and creating barriers and imposing restrictions, including the revoke of visas for Chinese scholars.


— call for an international independent inquiry into the COVID-19 virus, acted as a political manipulation echoing the US attack on China


— the incessant wanton interference in China’s Xinjiang, Hong Kong and Taiwan affairs; spearheading the crusade against China in certain multilateral forums


— the first non littoral country to make a statement on the South China Sea to the United Nations


—siding with the US’ anti-China campaign and spreading disinformation imported from the US around China’s efforts of containing COVID-19.


— the latest legislation to scrutinize agreements with a foreign government targeting towards China and aiming to torpedo the Victorian participation in B&R


— provided funding to anti-China think tank for spreading untrue reports, peddling lies around Xinjiang and so-called China infiltration aimed at manipulating public opinion against China


— the early dawn search and reckless seizure of Chinese jounalists’ homes and properties without any charges and giving any explanations


— thinly veiled allegations against China on cyber attacks without any evidence


—outrageous condemnation of the governing party of China by MPs and racist attacks against Chinese or Asian people.

-an unfriendly or antagonistic report on China by media, poisoning the atmosphere of bilateral relations

Fighting on two fronts, and losing on both

My latest piece in Inside Story, and also the Canberra Times, is headlined Punching above our weight looks like getting us knocked out (CT slightly varied). The key point is that having picked a fight with China, the government is alienating potential allies through its climate donothingism. Key para

Australia is a lightweight, and we are fighting out of our class. If we want to succeed on issues like our trade dispute with China, we can’t afford to poke our potential allies in the eye by suggesting, as Scott Morrison has repeatedly, that our climate policy will be determined by our own national interests and not by our obligations to the rest of the world.

That point has been illustrated again by an article in the New York Times on China’s boycott of Australian coal. The government would doubtless have liked a story along the lines “Plucky Aussies bullied by Chinese dictator”. Instead, it’s more like “Climate cheats get well-earned comeuppance“. The opening para “China is forcing Australia to confront what many countries are concluding: The coal era is coming to an end.”

We are fighting on two fronts and losing on both.

There’s been a lot of publicity for Morrisons. exclusion from the speakers list at the recent climate summit and resistance to our push for Matthias Cormann as head of the OECD. One thing that hasn’t attracted much attention is an earlier insult we delivered to the OECD when we appointed a climate denier, Alex Robson, as our Ambassador to the OECD. Robson was closely associated with the IPA, and contributed to their denialist volume Climate Change: The Facts I engaged in a dispute with him in the ANU magazine Agenda, but can’t now locate his piece.

Ergodicity economics and rank-dependent utility

Slightly behind the pack, it seems, I’ve suddenly started hearing about “ergodicity economics”, presented as an alternative to expected utility (EU) theory. Commenter James asked me about it here, and I also received from a colleague a copy of a paper in Nature, by Ole Peters, who appears to be the main developer of this idea. The essential idea of ergodicity is that the long-run distribution of outcomes for a dynamic process should match the uncertainty of the process at any point in time. You can get something more precise in Wikipedia. Expected utility starts with preferences over uncertainty at a point in time. Peters argues that things are better understood in terms of evolution over time. I haven’t followed all of the details of this argument as yet.

What piqued my interest is that the discussion involves a lot of discussion of probability weighting and particularly the idea that extreme low-probability outcomes may be overweighted. The most famous expression of this idea is the cumulative prospect theory put forward by Kahneman and Tversky in 1992. Their original prospect theory applied the same weighting function to all events, which raises a number of difficulties. These were resolved using the idea of rank-dependent probability weighting which I proposed in a paper in 1982 (under the name ‘anticipated utility’ and now usually called rank-dependent utility or RDU) .

The underlying reasoning is that, in a dynamic process repeated over time, taking low-probability extreme risks will (very probably) catch up with you. I’m pretty sure I made an argument of this kind in support of RDU back in the 1980s, but I haven’t been able to locate it for now.

This is one of many independent rediscoveries of the rank-dependent approach, with a variety of motivations. I think this reflects the fact that the RDU is, in some sense, the natural generalization of EU.

Trumpism and crony capitalism

Some tentative thoughts, for a chapter I’m writing about the decline of neoliberalism, and the crony capitalism I see as replacing it (unless we can achieve a leftwing alternative)

An important difference between Trumpism[1] and neoliberalism (in both hard and soft variants) is that Trumpism is associated with crony capitalism, rather than global corporations and finance. This is obscured to some extent by shared interest in corporate tax cuts and deregulation. But it’s a clear pattern,exemplified by Erdogan, Modi, Orban and Putin (search “X + crony” for illustration). Why is this? The core appeal of US Trumpism is a negative kind of identity politics, reaffirming the rightful dominance of the “unmarked category”, or default identity, that is assumed when a term like “real Americans” is used. Unmarked categories in the US context include white, male, employed, English-speaking, Christian and cis-het.

Trump’s global counterparts have the same kind of politics, but their unmarked categories are different, most obviously with respect to language, race and religion. These differences are problematic for global corporations, who want to operate in different national markets and employ the best talent they can find anywhere.

As long as neoliberalism was dominant, Trumpist voters could be bought off with gestures, while policy was run in the interests of global business. But now that the Trumpists are in charge, they are demanding measures that harm global businesses both economically (restrictions on trade and investment) and culturally (by making ascribed characteristics, rather than market outcomes the measure of esteem). By contrast, local capitalists (like Trump himself and the billionaires who now back him) mostly benefit from these measures as well as from pro-rich policies in general. Even under neoliberalism, many operated largely on the basis of connections. Provided they can stay in the good graces of the strongman (not guaranteed, as various Russian oligarchs have discovered), they are well placed in the new environment. And, unlike global corporations, crony capitalists can operate with a short time horizon. Even if Trumpist policies are ultimately disastrous in economic terms, they have time to make their pile and cash out.

fn1. In 2016, I used the unsatisfactory term “tribalism”, for want of a better alternative, but Trumpism fits the bill perfectly.

Synopsis

As was the case with Economics in Two Lessons, I’ve been struggling with the material for my book-in-progress, The Economic Consequences of the Pandemic. But I’ve now managed to put together a synopsis I can work with. I’d very much appreciate comments, including but not limited to: topics I should be covering; issues raised by the brief summaries; and useful references. Thanks for comments so far, and thanks in advance for more.

Is nuclear power the answer

The last (I hope) extract from the climate change chapter of Economic Consequences of the Pandemic. I’m in two minds about whether this is really needed. The group of pro-nuclear environmentalists seems to be shrinking towards a hard core who can’t be convinced (and some of them, like Shellenberger turn out to have been concern trolls all along). But every now and then I run across people who seem open-minded enough, but haven’t caught up with the bad news on nuclear.

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Sandpit

A new sandpit for long side discussions, conspiracy theories, idees fixes and so on.

To be clear, the sandpit is for regular commenters to pursue points that distract from regular discussion, including conspiracy-theoretic takes on the issues at hand. It’s not meant as a forum for visiting conspiracy theorists, or trolls posing as such.