With the resignation of Steve Case as chairman of AOL Time Warner (soon to be just plain Time Warner again, it seems) we can pronounce the “New Economy” officially dead. When the biggest merger in history was announced almost exactly three years ago (it seems like a century), I wrote

If the accounting numbers are taken at face value, AOL Time Warner will have a price-earnings ratio of about 350 to 1, modest by Internet standards. When options are taken into account, the ratio is more like 1000 to 1. It is difficult to see how an economy in which investment decisions are based on numbers like these can avoid some sort of financial catastrophe.

So is AOL Time Warner a super-profitable monopolist in the making or a jerry-built piece of financial engineering ? It can scarcely be both. But in the miraculous world of the New Economy, anything is possible.

Of course, as the blogworld and other phenomena show, the death of the New Economy has had almost no impact on the development of the Internet. For that matter, neither did its rise. In economic terms, the Internet has provided a source of modest but significant productivity gains in the market sector. However, the trillion dollars or so dissipated in the bubble has probably negated the impact of several years worth of Internet productivity growth.

Coming back to blogs, the big impact of the Internet has been in non-market services, of which email has been the paradigm example, but for which blogs are an even better illustration. Apart from the commodity service of ISPs providing the connection, no-one has ever made any significant money out of these things and, probably, no-one ever will. That doesn’t mean that they don’t count towards economic welfare, but the New Economy was never about economics.

I’ve been receiving a lot of interesting material on both Lomborg and global warming, but this time I’m going to stick to my plan of putting aside, for a while, the academic scandals that have been dominating the blog lately. In the meantime, those who want more can visit Ken Parish for what looks like a mirror-image of the Bellesiles story, involving pro-gun economist John Lott.

I’ll just offer the following thought. In the context of political debate, if a recently-reported scientific result seems too good to be true, it probably is.

Ken Parish attacks my “credulous applause” for the Danish finding that Bjorn Lomborg’s book The Sceptical Environmentalist was ‘scientifically dishonest’. To briefly reprise what I’ve stated so far:

(1) Lomborg’s summary of the literature is in fact selective and biased, and crucial arguments are dishonest
(2) This is typical of the advocacy literature on both sides of this debate, and Lomborg is ‘entitled to feel aggrieved’ that his book has been singled out
(3) The Danish committee erred in deciding that Lomborg’s book was a scientific work and should be assessed against the relevant standards. However, Lomborg contributed to the problem by ‘trying to have his cake and eat it’ regarding the scientific status of the book

There remains the question, raised by Ken and others, of whether the committee’s consideration of Lomborg’s book amounted to a ‘kangaroo court’. I can’t say I’m satisfied with the way the committee proceeded. Essentially they read the Scientific American critique and Lomborg’s response and concluded that Lomborg had violated scientific norms of discourse by taking a clearly one-sided position and by failing to respond to criticisms of this.

Having failed in the first instance to reach the conclusion that Lomborg’s book was not scientific research but ‘designed to provoke debate’, I think they should have done so on reading the interchange between Lomborg and his critics – several of whom were also clearly engaged in polemical debate. The Committee was overly deferential to the ‘expert’ status of the critics, and failed to make the obvious point that several had personal interests in the debate.

On the other hand, I think Ken’s critique is equally problematic and shows uncritical reliance on biased sources.

To begin with, Ken attacks Stephen Schneider on the basis of a 1989 quote that I’ve seen reproduced many times, and responded to nearly as many times. As in most instances, Ken’s version omits crucial sentences (without ellipses) in a way that makes Schneider appear deliberately dishonest. Schneider’s response is here. I’m not a huge fan of Schneider – I find him overly prone to alarmism, and even in the corrected version I think this comes through. But that doesn’t justify reproducing quotations from obviously hostile sources without the simple precaution of a Google check.

Second, I think Ken mischaracterizes the Committee’s decision not to seek additional expert advice, again omitting crucial sentences.

DCSD did consider whether a better basis for evaluating the cases under review would be obtained by itself forming ad hoc committees with accredited experts in the respective fields. A number of members voiced the view that sourcing new expert evaluations might possibly create scope to establish whether the defendant has not only-as the experts at Scientific American claim-used selective data, but whether he has done so wilfully in order to delude the public, and hence enable DCSD to ascertain the presence or absence of the subjective conditions required to uphold scientific dishonesty.
DCSD, however, has reached the conclusion that new experts would scarcely be able to add new dimensions to the case. In this process of deliberation, a crucial role has also been played by the fact that even on the existing basis there is agreement at DCSD in adjudging the defendant’s conduct to be contrary to good scientific practice, as expressed below.(sentences omitted by Ken in italics)

To summarise, the Committee formed its views based on Lomborg’s own conduct in the debate, which was not that of a scientist disinterestedly seeking truth in accordance with standard scientific norms of procedure but that of an advocate for a particular case. I think this should be evident to anyone who has read Lomborg’s book and other writings. Precisely for that reason, I think the correct conclusion was that the book should not have been assessed as a piece of scientific research or as a meta-analysis of the scientific literature, but as advocacy for a particular viewpoint.

Update The formatting of the Stephen Schneider piece in the link isn’t very clear. So here’s the relevant part of Schneider’s statement. The words omitted in the standard quote (originally by Julian Simon) are in italics

[to get action we have] to get some broadbased support, to capture the public’s imagination. That, of course, entails getting loads of media coverage. So we have to offer up scary scenarios, make simplified, dramatic statements, and make little mention of any doubts we might have. This ‘double ethical bind’ we frequently find ourselves in cannot be solved by any formula. Each of us has to decide what the right balance is between being effective and being honest. I hope that means being both

Schneider argues that he is describing the problem of dealing with media who want snappy quotes and clear positions, not advocating giving them what they want.

Whatever you think of Schneider, I can’t see any charitable interpretation of Simon’s doctoring of the quote. The quote is too long and, apart from the multiple omissions, too accurate, to be from memory, and Schneider asserts that he advised Simon of the error. The original version published by Simon included a fabricated statement that ‘Scientists should consider stretching the truth’ but this was ultimately withdrawn and doesn’t appear in the standard blogosphere version. On the other hand, Simon’s quote included ellipses that have been dropped in the blogosphere version, and the sentence about media coverage has also been dropped.

It’s time again for one of the most popular features of this blog. Comment here on any topic you like (civilised discussion only and no coarse language please). Suggested starter topic “Is blogging a fad?”

Unless something new comes up, I think it’s time to wrap up the debate raised by Keith Windschuttle. I think historical truth is important and I don’t apologise for spending time on it, but I take Ken Parish’s point that the problems of today should take precedence. I plan a summary of the debate next week and then I’ll move on to my very inadequate ideas for an economic policy response to the problems of Aboriginal communities.

My last substantive point on Windschuttle is this. He makes great play of the Christian conscience of the British and claims that this justifies him in always imputing the best possible motives to the colonists. But whenever he comes across historical figures who actually display this Christian conscience, like the Rev Ernest Gribble, he dismisses them as ” emotionally disturbed” troublemakers, a description that could certainly be applied to the biblical Jesus. My impression is that Christianity sat pretty lightly on the average 19th century Australian or Englishman. I certainly see no evidence of it in Windschuttle and his friends at Quadrant.

The Middle East By Bernard Lewis. The main part of the book covers the period from the rise of Islam to the 19th century Ottoman empire. Apart from bits and pieces I’ve , my knowledge of this comes from Gibbon’s Decline and Fall, not the most modern source and told from the other side. So there’s a lot here that’s new to me.

Like just about everyone else, I went, with my son, to The Two Towers. The films are doing quite a good job, staying faithful to the original without some of the longeurs of, for example, Tom Bombadil.

With the welcome return of Ken Parish, Ozplogistan is just about back to full strength, though the blogging blues are affecting quite a few. Ken threatened to talk about trivial fluff like the High Court and Lomborg, but has instead gone straight to the crucial issue in modern life – the difficulty of getting a good cup of coffee, particularly in the United States. This should certainly attract some responses from outraged American aficionados, who are unlikely to be appeased by his concession that Vietnamese ‘weasel coffee’ (I can’t bring myself to describe this) is even worse than Starbucks.

Having made some incautious statements on this subject myself, I’ll observe that the US situation is highly variable – some places are good and getting better, but there are others where the sight of a Starbucks would seem like a godsend.

The issue of GM food has returned to centre stage with the US threat to take the Europeans to the WTO, I thought I’d continue my practice of reposting pieces that seem relevant.

On this issue, I’m a big believer in the principle of subsidiarity, that is, letting the people directly affected make the decisions. Speaking for myself, I’m convinced by the scientific evidence that GM food is as safe as the ordinary sort, that is, not perfectly, but safe enough that I have plenty of bigger things to worry about. On the other hand, the idea of tomatoes with fish genes makes me a bit queasy, and I think I and others should have a choice about whether or not to eat them. Hence, I’m in favor of labelling and I think the producers of GM foods, as the innovators, should bear the cost of this.

Taking it a level higher, I think that this is an issue that is within the competence of individual countries to decide. If Australians, contrary to my preference, decide to ban GM foods altogether, then that is our decision to make and we should not be subject to punishment by bodies such as the World Trade Organisation. To paraphrase our beloved leader, we will decide what foods we eat and under what circumstances. Similarly I think the Americans are showing some chutzpah in taking Europe to the WTO. The Bush steel tariffs are a far more fundamental breach of free-trade principles than food-safety laws which, whatever their scientific basis or lack of it, have no obvious discriminatory impact. Obviously the same freedom should apply to poor countries that want to take advantage of GM foods – they should not be subject to bullying from anti-GM Europeans.

My only dispute with the pro-GM side on the latter point is that I haven’t seen much evidence of GM foods that are actually useful in feeding the poor. Rice with added Vitamin A sounds nice, but it’s scarcely the next instalment Green Revolution. Most of the effort seems to have gone into making crops like soybeans “Roundup Ready’, which is not much use in poor countries. I have a bit more to say in this 1999 article entitled, The pros and cons of labelling are food for thought

Update The link that was not working has been fixed, though you have to click on an annoying disclaimer from UQ. I hope to bypass this shortly. Also, there’s an excellent comments thread, well worth reading.

“Nathan” seems to be a common name among US bloggers, or maybe just the ones I like. Recently-added Nathan Newman is the third bearer of that name to join the roll*. Here’s a sensible (that is, in agreement with me) statement of Why Iraq War Looks Unlikely. I’ve also added bertramonline and Tom V’s Rippy aggregator service. Check them all out.

*There are two Australian Tims plus one Tom – this must mean something!

It’s time for the return of the ever-popular Song for Saturday. This one’s just doggerel, but I couldn’t resist it given the themes we’ve been discussing recently. The original* is a Just-So story, explaining why dogs sniff each others’ rear ends on meeting.

The Racists’ Meeting

Oh, the racists held a meeting and they came from near and far
Some tried to hide their faces but we all know who they are
And before they were let into the hall or out onto the floor
Each one had to take his conscience off and leave it at the door
Yes, each one had to take his conscience off and leave it at the door

But scarcely were they all sat down and ready with their mud
Than a terrible hullabaloo broke out, ’cause someone shouted “Flood!”
The all jumped through the windows, upon that terrible day
And the flood roared through the building, washed their consciences away
Yes, the flood roared through the building, washed their consciences away

That’s why with all these gentlemen, so lily-white and pure
If you get too close to one, you’ll catch a whiff of sewer
They’ve been crawling through the gutters in groups and all alone,
Fishing for guilty consciences and trying to find their own
Fishing for guilty consciences and trying to find their own

* In the performed version of the original, scansion and decency are preserved by replacing the crucial word with three knocks